UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1998 Commission File No. 0-19301
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Communication Intelligence Corporation
(Exact name of registrant as specified in its charter)
Delaware 94-2790442
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
275 Shoreline Drive, Suite 500
Redwood Shores, California (650) 802-7888 94065
- -------------------------------- ------------------------- ---------
(Address of principal executive (Registrant's telephone (Zip Code)
offices) number, including area code)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference into Part III of this Form 10-K or any
amendment to this Form 10-K.
The aggregate market value of the voting stock (Common Stock) held by
non-affiliates of the registrant as of March 29, 1999 was approximately
$131,803,421 based on the closing sale price of $1.93on such date, as reported
by the Nasdaq SmallCap Market.
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
The number of shares of Common Stock outstanding as of March 29, 1999
was 79,413,954.
<PAGE>
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CIC November 19, 1998
Confidential
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READ 1998:17429
Confidential
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Exhibit 10.26
SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT
This Software Development and License Agreement ("Agreement") is entered
into this 04 day of December 1998, by and between Ericsson Mobile Communications
AB, a corporation organized and existing under the laws of Sweden (hereinafter
"ERICSSON"), and Communication Intelligence Corporation, a corporation organized
and existing under the laws of the State of Delaware (hereinafter "LICENSOR").
WITNESSETH:
WHEREAS, LICENSOR desires to grant to ERICSSON and ERICSSON desires to
acquire from LICENSOR nonexclusive right(s) and license(s) to use, copy,
reproduce, sell or otherwise distribute certain software programs under the
terms and conditions set forth in this Agreement; and
WHEREAS, ERICSSON is desirous of retaining LICENSOR to perform
certain services as described in this Agreement; and
WHEREAS, LICENSOR desires to provide the rights and licenses and perform
the services described herein in accordance with the terms and conditions of
this Agreement.
NOW, THEREFORE, ERICSSON and LICENSOR hereby agree as follows:
Attachments
Appendix A Description of Licensed Programs
Appendix B License Fee Schedule
Appendix C NRE Specifications
1. Definitions
a. Licensed Programs shall mean:
Jot;
OnScreen Keyboard;
Quick Notes; and
Sign-it software
in Executable Code form, as described in APPENDIX A.
<PAGE>
Exhibit 10.26 (continued)
b. Documentation shall mean all instructions and end-user information needed to
fully implement and utilize the Licensed Programs. c. Executable Code shall mean
the electronic machine-readable form of the Licensed Programs.
d. Source Code shall mean the original, human readable
instructions used to produce Executable Code by, compilation
or assembly process.
e. Party shall mean ERICSSON or LICENSOR, as identified above.
f. Project shall mean the performance of services to develop the
Licensed Programs and Documentation and/or modify the Licensed
Programs for operation on specified ERICSSON hardware
platforms.
g. Proprietary Information shall mean information, including data and know-how,
which is:
1) the proprietary property of one of the Parties which is not developed
under this Agreement; and
2) disclosed or transmitted by ERICSSON to LICENSOR or by LICENSOR to
ERICSSON in relation to, or in connection with this Agreement; and
3) not within one of the exceptions of Paragraph c of Section 9 hereof.
2. Term
The initial term of this Agreement shall be for [Confidential Material
provided separately to the SEC] commencing on the date set forth above, and
[Confidential Material provided separately to the SEC] or any renewal term, of
it's intent not to renew; or until termination pursuant to Sections 3 or 4.
3. Termination
a. In General. This Agreement may be terminated by either Party upon
written notice if the other Party breaches any material term or condition of the
Agreement and such breach remains uncorrected for thirty (30) days following
written notice from the non-breaching party specifying the breach.
b. Failure to Meet Milestone or Delivery. Either party may terminate
this Agreement immediately upon notice to the other party at any time that the
other party fails to meet a mutually agreed upon milestone or deliver an item as
provided by APPENDIX C within ten (10) days of the date set for such milestone
or deliverable item, or at the offended parties option, the party failing to
meet such milestone agrees to pay the offended party a penalty of [Confidential
Material provided separately to the SEC] paid or payable by ERICSSON in
satisfaction of such milestone or deliverable item. To the extent that LICENSOR
is unable to deliver acceptable Licensed Programs and Documentation under this
Agreement to ERICSSON, LICENSOR agrees to [Confidential Material provided
separately to the SEC].
<PAGE>
Exhibit 10.26 (continued)
c. Obligations Upon Termination. Upon termination of this Agreement for any
reason, the parties shall have no further obligations pursuant to the terms of
the agreement except Sections 8, 9, 10, 19 and 20 shall survive any termination
or expiration of this Agreement.
d. Continuance of Licenses. All licenses for which ERICSSON has fully paid all
royalties under this Agreement shall continue after any expiration or
termination of this Agreement for any reason.
4. Development of Licensed Programs and Documentation
a. In General. In consideration of the fees described in Section 5 of
this Agreement, LICENSOR will develop and deliver to ERICSSON the Licensed
Programs according to the development specifications set forth in APPENDIX C,
including all necessary Documentation as required by ERICSSON. LICENSOR shall
meet with ERICSSON monthly, or more often if requested by ERICSSON, to discuss
and report on the progress on the Project. Time for attending such meetings
shall be billed at [Confidential Material provided separately to the SEC] plus
travel and living expenses.
b. Technical Design. To the extent not specified in APPENDIX C,
LICENSOR shall provide hardware and software specifications, performance
specifications, a narrative description of the Licensed Programs, a description
of all input data (such as type, size, range of expected values, and
relationship to other data), a description and pictures of all screens,
including sequence diagrams, and definitions and descriptions of all outputs and
reports to be generated and the process for generating them.
c. Acceptance. LICENSOR shall deliver the final completed Licensed
Programs and Documentation to ERICSSON no later than the date specified in
APPENDIX C for delivery of the "Golden Master", and ERICSSON shall have
[Confidential Material provided separately to the SEC] thereafter in which to
accept or reject the delivered materials in writing. If ERICSSON rejects the
Licensed Programs and Documentation, ERICSSON shall specify in writing its
grounds for rejection and LICENSOR shall use its best efforts to make the
Licensed Programs and Documentation conform to the specifications provided by
ERICSSON as soon as possible. LICENSOR shall continue to use its best efforts to
make the Licensed Programs and Documentation conform to the specifications until
ERICSSON accepts the Licensed Programs and Documentation or terminates this
Agreement upon written notice to LICENSOR.
d. Training. LICENSOR shall provide ERICSSON with training on use of
the Licensed Programs, as requested by ERICSSON. Such training will be billed
[Confidential Material provided separately to the SEC] plus travel and living
expenses.
e. Integration Support. LICENSOR shall provide ERICSSON with technical
assistance for testing and integration of the Licensed Programs and
Documentation into ERICSSON's end user products. Such assistance shall be
rendered at the request of ERICSSON at ERICSSON's facility in Research Triangle
Park, North Carolina, USA or Manchester, England. Integration support will be
billed at [Confidential Material provided separately to the SEC] plus travel and
living expenses.
f. Maintenance and Support. During the warranty period defined in
Paragraph 19, below, LICENSOR shall perform remedial and preventive maintenance
and support for the Licensed Programs after their acceptance so that the
Licensed Programs continue to perform in accordance with the specification.
LICENSOR shall provide telephone support, including dial-up support, between the
hours of 8:00 a.m. and 5:00 p.m., U.S. Eastern Time, Monday through Friday,
excluding federal holidays or at such other times or time zones as may be
requested by ERICSSON from time to time. LICENSOR shall also provide maintenance
and support as requested by ERICSSON for each product line using the Licensed
<PAGE>
Exhibit 10.26 (continued)
Programs. ERICSSON and LICENSOR shall negotiate the terms and price of
maintenance and support services following the conclusion of the warranty
period, provided that such maintenance and support services shall be provided on
at least the following terms:
1) LICENSOR shall provide telephonic, email, fax, phone and onsite
support to ERICSSON on a time and materials basis.
2) At ERICSSON's option, ERICSSON may purchase up to[Confidential
Material provided separately to the SEC] of support for [Confidential
Material provided separately to the SEC] with additional time
billed on an hourly basis at [Confidential Material provided
provided separately to the SEC] for separately to the SEC] per hour
for remote and [Confidential Material onsite support, plus actual
reasonable travel and living expenses.
3) ERICSSON shall have the right to terminate such maintenance and
support services at any time upon thirty (30)days written notice
to LICENSOR.
5. Fees
a. Development Fees.
1) Amount and Dates. ERICSSON shall pay LICENSOR development fees upon the
events and in the amounts set forth in APPENDIX C.
2) Reports. LICENSOR shall deliver to ERICSSON monthly reports of LICENSOR's
progress on the Project and LICENSOR's expenses incurred in
connection with the Project. Such reports shall be due on the fifteenth
day of each month for the prior month. Each report shall contain a
description of the current status of the Licensed Programs and
Documentation, the time spent on the Project by each employee of
LICENSOR, the tasks on which it was spent, the estimated progress to
be made in the next month, and the problems encountered, the proposed
solutions to them and their effect, if any, on the milestones or
Deliverables.
b. License Fees.
1) In General. In consideration of the license granted by
LICENSOR under this Agreement, ERICSSON shall pay LICENSOR a fee as set
forth in APPENDIX B (the "License Fee").
2) Payment Terms. Each installment of the License Fee shall be due and
payable in accordance with the payment schedule set forth in APPENDIX B.
6. License Grant
In consideration of payment to be made by ERICSSON to LICENSOR of the
License Fee(s) set forth above, LICENSOR hereby grants and agrees to grant to
ERICSSON a worldwide, non-exclusive license to use, copy, incorporate into
products to be sold, sell or otherwise distribute the Licensed Programs together
with the Ericsson product platforms identified on APPENDIX A. No rights are
granted with respect to any Source Code.
<PAGE>
Exhibit 10.26 (continued)
The rights granted herein shall extend to all ERICSSON components,
subsidiaries, affiliates and joint-venture partners worldwide, which are
majority controlled by Telefonaktiebolaget LM Ericsson. In particular, but not
by way of limitation, the rights granted herein shall extend to Ericsson Inc., a
Delaware corporation, having an address at 7001 Development Drive, Research
Triangle Park, NC 27709.
7. Change of Scope
At any time during the term of this Agreement, should ERICSSON desire
LICENSOR to provide any additional services in the form of a modification of or
a change to the Project, for example, should ERICSSON
desire to have the Licensed Programs modified for operation with a different
hardware platform, LICENSOR and ERICSSON shall comply with the following:
a. Submission of Request. ERICSSON shall submit to LICENSOR in writing
all requests by ERICSSON for any such additional services which alter, amend,
enhance, add to, or delete from the Project and/or time and/or place of
performance (hereinafter referred to as "Modification/Change Request" or
"Request").
b. Acceptance Procedure. LICENSOR will evaluate such
Modification/Change Request at no additional charge to ERICSSON as soon as
possible but not later than ten (10) working days following LICENSOR's receipt
of the Request. LICENSOR's written response shall include a statement of the
availability of LICENSOR's personnel and resources, the impact, if any, on the
completion date and the change in costs, if any. The Parties agree to negotiate
the charges for any such changes in good faith. Should ERICSSON elect to
authorize such Request, ERICSSON will, as soon as possible but not later than
ten (10) working days, authorize LICENSOR to perform the requested
Modification/Change Request by returning a duly authorized copy of the Request
to LICENSOR.
c. Performance. Upon such authorization by ERICSSON of the
Modification/Change Request, LICENSOR will commence performance in accordance
with such Request immediately. LICENSOR shall not be obligated to perform any
additional services in advance of written authorization from ERICSSON. In the
event that LICENSOR commits resources to the performance of a
Modification/Change Request without such prior written authorization, it shall
be presumed that performance of such Modification/Change Request will have no
effect on the completion date.
d. Binding Agreement. For the purposes of this Agreement, each
Modification/Change Request duly authorized in writing by ERICSSON and agreed to
by LICENSOR shall be deemed incorporated into and part of this Agreement and
each such Request shall constitute a formal amendment to this Agreement
adjusting fees and completion date as finally agreed upon for each authorized
Modification/Change Request. In no event shall the services be deemed altered,
amended, enhanced, or otherwise modified except through written authorization by
ERICSSON of a Modification/Change Request and acceptance by LICENSOR, all in
accordance with this Section 7.
8. Ownership of Licensed Programs and Intellectual Property Rights
<PAGE>
Exhibit 10.26 (continued)
LICENSOR shall retain title and ownership of the Licensed Programs and
all Intellectual Property Rights therein except as otherwise provided in this
Agreement or agreed between the Parties.
9. Confidentiality
a. All ERICSSON Proprietary Information and all LICENSOR Proprietary
Information disclosed under this Agreement that is proprietary to one
or both Parties, in tangible form (including, but not limited to,
printed matter, computer software, models, specimens and the like)
shall be clearly identified at the time of disclosure as being
Proprietary Information by an appropriate and conspicuous legend,
marking, stamp or other positive identification and if disclosed in
oral or visual form, shall be identified as being Proprietary
Information at the time of disclosure or observation, and shall be
confirmed as such in writing by the disclosing Party to the receiving
Party within thirty (30) days after such oral or visual disclosure.
b. For the term of this Agreement, and for [Confidential Material
provided separately to the SEC] thereafter a Party receiving another
Party's Proprietary Information shall: a) handle, safeguard and
protect such Proprietary Information from unauthorized or accidental
disclosure or unauthorized use by the exercise of the same degree of
care, but not less than reasonable care, as it employs with respect to
information of its own of a similar nature which it does not desire to
be published, obtained or disseminated; b) not use such Proprietary
Information for purposes other than those provided for under this
Agreement; c) not reproduce such Proprietary Information, in whole or
in part, without identifying such whole or partial reproduction as
being Proprietary Information of the disclosing Party; and d) not,
without the prior written permission of the disclosing Party, furnish
or otherwise disclose such Proprietary Information to any third party,
nor to employees of the receiving Party not having a "need-to-know" of
same except in the furtherance of the purposes of this Agreement or as
otherwise provided in this Agreement.
c. Information shall not be considered to be Proprietary Information, and
the recipient shall not be liable for the use and disclosure thereof,
if such information:
(1) as shown by written records, was known or available to the
receiving Party prior to receipt from the disclosing Party; or
(2) becomes known or available to the receiving Party from sources
other than the disclosing Party without restrictions as to
disclosure or use of the kind provided for by this Agreement and
otherwise than as a consequence of breach of obligations under
this Agreement; or
(3) as shown by written records, is independently developed by the
receiving Party; or
(4) is or becomes part of the general public knowledge or literature
otherwise than as a consequence of breach of obligations under
this Agreement; or
<PAGE>
Exhibit 10.26 (continued)
(5) is provided by the disclosing Party to a third party without
restrictions as to disclosure or use of the kind provided for by
this Agreement; or
(6) is disclosed pursuant to judicial action and no suitable
protective order, or equivalent, is available.
d. No information disclosed under this Agreement, other than Proprietary
Information shall be considered to have been submitted under
restriction and the recipient may freely disclose and use any such
information without obligation to the disclosing Party, except as may
be created by valid patents owned by the disclosing Party.
e. The parties hereto agree that the terms and conditions contained in
this Agreement shall not be disclosed to any third party, without the
concurrence of the other party hereto.
f. Proprietary Information disclosed by one Party to the other Party
under this Agreement shall remain the property of the disclosing
Party.
g. The disclosing Party agrees to grant and does hereby grant to the
other Party a non-exclusive, royalty-free right to use Proprietary
Information disclosed in conjunction with this Agreement, and practice
any Patents based thereon, solely within the receiving Party's own
facilities and the facilities of its Subsidiaries, solely for
fulfilling the purposes of this Agreement and only for the duration of
this Agreement, except as otherwise provided in this Agreement.
10. Indemnification and Limitation of Liability
a. LICENSOR shall indemnify and hold ERICSSON harmless against and shall
handle and defend against any claim, suit, or other proceeding brought
against ERICSSON based on an allegation that the Licensed Programs or
any elements thereof, or the use of any Licensed Programs furnished by
LICENSOR pursuant to this Agreement constitutes a violation or
infringement of [Confidential Material provided separately to the SEC]
patent, copyright, trade secret, or other proprietary information
right provided that LICENSOR is notified promptly in writing of such
allegation, suit, or proceeding and give full and complete authority,
information and assistance (at LICENSOR's expense) for the defence of
same. LICENSOR shall pay all damages and costs incurred by ERICSSON
with respect to such suites or proceedings, up to the amount received
by LICENSOR under this agreement, but LICENSOR shall not be
responsible for any compromise made by ERICSSON or its agents without
LICENSOR'S consent. If such Licensed Programs are held by a court of
competent jurisdiction to constitute infringement, and their use is
enjoined, LICENSOR shall, at its own expense, either promptly procure
the right for continued use of such Licensed Programs by ERICSSON, or,
if the performance thereof will not thereby be materially adversely
affected promptly replace or modify such licensed Programs so that
they become noninfringing. If neither of the actions specified for
LICENSOR in the preceding sentence is commercially feasible, then as a
last resort, LICENSOR shall accept return of such Licensed Programs
and refund to ERICSSON all license fees paid by ERICSSON for such
Licensed Programs, plus any costs incurred by ERICSSON in the removal
of such Licensed Programs and installation of alternative products.
During the pendency of any claims against LICENSOR or ERICSSON with
respect to LICENSOR's ownership or authority, ERICSSON may withhold
payment of any sum otherwise required to be paid hereunder.
b. ERICSSON agrees to hold LICENSOR harmless from and indemnify LICENSOR
against any and all liabilities, demands, expenses or damages arising
out of or resulting from (1) the manufacture, use or sale of any
products or services by ERICSSON other than products containing the
Licensed Programs, or (2) any alteration or modification of the
Licensed Programs by ERICSSON without the consent of LICENSOR.
c. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, EVEN IF THE PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
d. The provisions of this Section 10 relating to limitation of or
protection against liability shall apply regardless of fault (of
whatever degree) and to the full extent permitted by law.
<PAGE>
Exhibit 10.26 (continued)
11. Independent contractor
LICENSOR is and shall at all times be an independent contractor and
shall not be deemed an employee or agent of ERICSSON. Nothing in this Agreement
is intended to constitute, create, give effect to or otherwise imply a
partnership, joint venture or other business organization of any kind between
the parties. Neither Party has any authority to bind the other.
12. Other Agreements
This Agreement, including Appendices, contains the complete agreement
between the parties and shall, as of the effective date hereof, supersede all
other agreements between the parties relating to the Project and development of
the Licensed Programs and Documentation. The parties stipulate that neither of
them has made any representation with respect to the subject matter of this
Agreement or the execution and delivery hereof except such representations as
are specifically set forth herein. Each of the parties hereto acknowledges that
they have relied on their own judgment in entering into this Agreement. The
terms and conditions of the Appendices are incorporated herein by reference. To
the extent that there is any conflict between the terms and conditions of the
Appendices and this Agreement, the provisions of this Agreement shall control
13. Modification of Agreement
No waiver or modification of this Agreement or of any covenant,
condition, or limitation herein contained shall be valid unless in writing and
duly executed by both parties, and no evidence of any waiver or modification
shall be offered or received in evidence in any proceeding, arbitration, or
litigation between the parties hereto arising out of or affecting this
Agreement, or the rights or obligations of the parties hereunder, unless such
waiver or modification is in writing and duly executed by both parties. The
parties further agree that the provisions of this Section may not be waived
except as herein set forth.
14. Forbearance--No Waiver
Any failure by either Party to enforce any of the provisions of this
AGREEMENT or to require at any time performance by the other party of any of the
provisions hereof, shall in no way affect the validity of this AGREEMENT or any
part hereof, or the right of either Party thereafter to enforce each and every
such provision.
15. Choice of Law
It is the intention of the parties hereto that this Agreement and the
performance hereunder and all suits and special proceedings hereunder be
construed in accordance with and pursuant to the laws of the State of North
Carolina.
16. Agreement Binding on Successors
This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the respective parties.
<PAGE>
Exhibit 10.26 (continued)
17. Assignment Restricted
LICENSOR may not assign this Agreement in whole or in part without the
written consent of the other party, provided that LICENSOR may contract with
other parties to provide services hereunder subject to ERICSSON's prior written
approval. ERICSSON may not assign this Agreement in whole or in part without the
consent of LICENSOR, except that ERICSSON may assign this agreement to any
parent, subsidiary, affiliate or joint venturer, which is majority controlled by
Telefonaktiebolaget LM Ericsson, with ERICSSON that agrees to assume all
obligations and liabilities of ERICSSON hereunder.
18. Notices
All notices, demands, or requests provided for or permitted to be given pursuant
to this Agreement must be in writing. All notices, demands, and requests to be
sent to a party hereunder pursuant hereto shall be deemed to have been properly
given or served by depositing the same in the United States mail, addressed to
such party, postage prepaid, and certified with return receipt requested, at the
address set forth below or at such other address as any party shall hereafter
furnish to the others in writing:
LICENSOR: Communication Intelligence Corporation
275 Shoreline Drive
Suite 520
Redwood Shores, CA 94065
Attn: Mike Sullivan
With a copy to:
Communication Intelligence Corporation
275 Shoreline Drive
Suite 520
Redwood Shores, CA 94065
Attn: Legal Department
ERICSSON: Ericsson Mobile Communications AB
c/o Program Administrator, RTP
Ericsson Inc.
7001 Development Drive
Research Triangle Park NC 27709
Attn: Lynn Canada
with a copy to:
Ericsson Inc.
7001 Development Drive
Research Triangle Park NC 27709
Attn: Legal Department
<PAGE>
Exhibit 10.26 (continued)
19. Warranty
a. In General. LICENSOR warrants that the services will be performed in
a workmanlike manner and that for a period of [Confidential Material provided
separately to the SEC] days following ERICSSON's acceptance of the Licensed
Program, the Licensed Programs will perform according to the specifications
agreed upon by LICENSOR and ERICSSON. LICENSOR will repair or replace the
Licensed Programs during such [Confidential Material provided separately to the
SEC] days as soon as possible after ERICSSON informs LICENSOR of any breach of
this warranty.
b. Ownership and Authority. LICENSOR represents and warrants that it is
the sole owner of the Licensed Programs, or has procured the Licensed Programs
under valid licenses from the owners thereof, and LICENSOR further represents
and warrants that it has full power and authority to grant the rights herein
granted without the consent of any other person.
c. Code Integrity. LICENSOR warrants that Licensed Programs contain no "computer
viruses," "time bombs" or "Easter eggs" as those terms are commonly understood
in the information processing industry. Specifically, LICENSOR warrants that the
Licensed Programs contain no code or instructions (including any code or
instructions provided by third parties) that may be used to access, modify,
delete, damage, or disable any computer, associated equipment, computer
programs, data files or other electronically stored information. Except as may
otherwise be expressly provided in this Agreement, LICENSOR hereby expressly
waives and disclaims any right or remedy it may have at law or in equity to
de-install, disable or repossess any Licensed Programs.
d. Documentation. Any Documentation furnished with the Licensed Programs
hereunder will be in form and substance at least equal to comparable materials
generally in use in the industry. If at any time such original Documentation is
revised or supplemented by additional documentation, thereupon LICENSOR shall
deliver to ERICSSON copies of such revised or additional documentation at no
charge in quantity equivalent to the
quantity of such original Documentation then in ERICSSON's possession. ERICSSON
shall have the right to reproduce all documentation supplied hereunder.
e. Exclusions. This warranty excludes any claims based on defects in the License
Programs and Documentation caused by ERICSSON, other parties beyond the control
of LICENSOR, or the hardware. EXCEPT AS PROVIDED IN SUBSECTION 18. ABOVE, THERE
ARE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, RESPECTING THIS AGREEMENT.
f. All Licensed Programs deliverable by LICENSOR hereunder containing or calling
on a calendar function including, without limitation, any function indexed to
the CPU clock, and any function providing specific dates or days, or calculating
spans of dates or days (collectively, "Time-Keyed Software"), shall record,
store, process, provide and, where appropriate, insert, true and accurate dates
and calculations for dates and spans including and following January 1, 2000. As
part of its maintenance obligations, LICENSOR shall consult with ERICSSON to
assure that Licensed Programs will (i) have no lesser functionality with respect
to data containing dates both, or either, before or after January 1, 2000, than
heretofore with respect to dates prior to January 1, 2000 and (ii) be
interoperable with other software used by ERICSSON which may deliver data to,
receive data from or otherwise interact with Licensed Programs.
<PAGE>
Exhibit 10.26 (continued)
g. All software heretofore provided or specified to ERICSSON by LICENSOR whether
hereunder or under separate agreement, if not currently capable of using or
rendering date- or time-sensitive data or supporting interoperability in the
manner described in subsection e above, but still under maintenance, shall be
modified or replaced by LICENSOR with software which provides all existing
functionality and is so capable, by a date no later than January 1, 2000,
without incremental charge therefor.
20. Marketing
a. ERICSSON shall have the right to brand one or more of the following with a
trademark or slogan of LICENSOR which is acceptable to ERICSSON:
i) Data Sheets
ii) Advertising
iii) Product Packaging
iv) Owner's Manuals
In any such use, ERICSSON shall clearly indicate LICENSEE's ownership
of its trademarks. ERICSSON shall display LICENSOR's trademarks in conformance
with LICENSOR's reasonable instructions from time to time, provided that the
font type, size, color, placement and other aesthetic aspects shall at all times
be subject to the reasonable approval of ERICSSON. LICENSOR shall indemnify and
hold ERICSSON harmless against and shall handle and defend against any claim,
suit, or other proceeding brought against ERICSSON based on an allegation that
the use of LICENSOR's trademarks constitutes a violation or infringement of any
trademark, service mark, trade name, or other proprietary information right.
b. All press releases of a Party which mention the other Party or this
Agreement must be reviewed and approved by the other Party.
c. ERICSSON shall, at LICENSOR's request, provide samples of literature,
packaging and advertising materials bearing LICENSOR's trademarks. ERICSSON
agrees to maintain the high level of quality accorded products associated
with and marketed by LICENSOR. ERICSSON shall not remove, obliterate or
conceal copyright or patent notices included in the Licensed Programs and
Documentation.
d. Except as expressly provided herein, neither Party is granted any right in
or license to use any trademark or service mark of the other Party.
21.Enforceability
If any term or provision of this Agreement shall be invalid or
unenforceable, the remainder of this Agreement shall not be affected; and the
remainder of this Agreement shall be valid and enforceable to the extent
permitted by applicable law. In addition, the parties shall in good faith
endeavor to reach agreement on a provision to replace the invalid provision
which, as nearly as possible, will reflect the intent of the original provision.
IN WITNESS WHEREOF, each of the Parties hereto has caused this
AGREEMENT to be executed in duplicate originals by their respective duly
authorized officers or representatives.
Ericsson Mobile Communications AB Communication Intelligence Corporation
By: /s/Joakin Ingers By: /s/Guido DiGregorio
Title: Director Data Development Title: President
Print Name: Joakin Ingers Print Name: Guido DiGregorio
Date: November 30, 1998 Date: December 4, 1998
------------------- -------------------
<PAGE>
Exhibit 10.26 (continued)
APPENDIX A
CIC Product Descriptions
1. JOT
a) Jot is a natural character set handwriting recognition system which
supports US English and accented Roman characters. The patented user
interface utilizes a segmented input panel which is divided into two
regions and can be used in a box mode or full screen mode.
b) The Jot trainer allows user tuning of character recognition to improve
recognition accuracy. c) The Jot animated tutorial demonstrates how to
write the full character set. d) The Jot Macro Editor allows the user
to define frequently used phrases or actions for quicker text entry
and editing.
2. On-screen Keyboard
The software on-screen keyboard is an application that emulates a hardware
keyboard on the screen. The user can touch characters on it and the
characters are posted to the application that has focus. The keyboard will
support accented Roman characters currently available in the Jot
recognizer.
3. Quick Notes
QuickNotes is an electronic notetaking and ink capture application.
QuickNotes incorporates CIC's patented INKshrINK compression technology for
reducing the size of the note or drawing to a fraction of the size of
standard graphical file formats (i.e.- bmp, gif or jpg).
4. Sign-It (login)
Sign-it is a dynamic signature verification software which will utilize the
login API so that the users signature can be used for login security.
Sign-it includes CIC's SigCheck(TM) handwritten signature verification and
InkSentry(TM) data encryption algorithms. For use outside the United States
a 40bit version of the encryption algorithms will be included.
<PAGE>
Exhibit 10.26 (continued)
"Appendix B"
License Fee Schedule
Per unit Royalties shall be as follows:
Jot [Confidential Material supplied separately to the SEC]
On-Screen Keyboard [Confidential Material supplied separately to the SEC]
Quick Notes [Confidential Material supplied separately to the SEC]
Sign-IT Login [Confidential Material supplied separately to the SEC]
Licensee shall pay a non-refundable fee of [Confidential Material supplied
separately to the SEC], due at contract signing, for [Confidential Material
supplied separately to the SEC] Jot & On-Screen Keyboard Units. Ericsson can
debit against these prepaid credit units in accordance with the terms below
and/or any [Confidential Material supplied separately to the SEC] platform as
determined by Ericsson internal management with notice to CIC.
[Confidential Material supplied separately to the SEC]
<PAGE>
Exhibit 10.26 (continued)
"Appendix C"
Non-Recurring Engineering (NRE) Specifications
Port CIC Pen Products to Pamela & Roxette Platforms
Rev 2.7
<PAGE>
Exhibit 10.26 (continued)
Non-Recurring Engineering (NRE) Effort
I. Introduction
This Scope of Work is intended to provide the framework for porting key CIC
products to Ericsson's Pamela and Roxette platforms. An overview of the
activities are included in the table below.
- --------------------------------------------------------------------------------
CIC Product Pamela [Confidential Roxette [Confidential
Materialsupplied Material supplied
separately to the SEC] separately to the SEC]
- --------------------------------------------------------------------------------
JotTM X X
On-screen Keyboard X X
Word Jot (code name) X
QuickNotes X
SignIt - Login X
- --------------------------------------------------------------------------------
Porting to the [Confidential Material supplied separately to the SEC] operating
system will be common to both Ericsson products. Final porting and testing of
JotTM will be specific to each platform due the use of different processors,
screen sizes and user interfaces. Further, QuickNotes and SignIt (Login) will be
ported specifically to Pamela.
Under this proposal, CIC will work with Ericsson, and it's partners, to port the
above products to Ericsson's Pamela and Roxette. Smart Phone products, focusing
on user interface, recognition and input mechanisms. Ericsson's responsibility
is the general structure of the product around the [Confidential Material
supplied separately to the SEC] software layering and low level driver elements.
In the case of JotTM, , it will post characters to the application area as a
keyboard would. It is assumed that CIC will work in close connection with
Ericsson, Symbian and its other partners in this effort, in definition, design
and implementation of these elements.
Software objects developed under this agreement, which contain proprietary CIC
technology (i.e. user interface, character recognition and input mechanisms),
will be owned exclusively by CIC and shall be considered part of the Licensed
Programs per Appendix B.
<PAGE>
Exhibit 10.26 (continued)
II. Core Deliverables from CIC
1. Jot(TM)
e) Provide JotTM recognition engine and patented user interface capability to
the [Confidential Material supplied separately to the SEC] application
environment. Supported character sets are[Confidential Material supplied
separately to the SEC]. The assumed user interface model is [Confidential
Material supplied separately to the SEC] with all Jot user interface
elements (i.e.
mode marks, relevant user interface labels) implemented in software.
f) [Confidential Material supplied separately to the SEC]-based Jot(TM)
trainer application, to allow user tuning of character recognition
optimized for each of Ericsson's Pamela & Roxette products.
g) [Confidential Material supplied separately to the SEC]-based Jot(TM)
animated tutorial, with interface optimized for each of Ericsson's Pamela &
Roxette products.
h) [Confidential Material supplied separately to the SEC]-based Macro Editor,
with interface optimized for each of Ericsson's Pamela & Roxette products.
2. On-screen Keyboard
The software on-screen keyboard is an application that emulates a hardware
keyboard on the screen. The user can touch characters on it and the
characters are posted to the application that is having focus. This
proposal addresses porting of CIC's standard on-screen keyboard.
Customization of user interface and character sets may require additional
development and charges determined by a mutually agreeable functional
specification.
5. [Confidential Material supplied separately to the SEC] Jot (Code name)
Provide same Jot functionality as in "1." above. CIC will provide an
additional mode to the standard Jot interface that will allow it
to[Confidential Material supplied separately to the SEC]. Recognition and
the posting of characters may proceed in parallel. The details of the
metaphor will be mutually defined by CIC and Ericsson, however, it will
essentially provide for a [Confidential Material supplied separately to the
SEC].
6. Quick Notes
CIC will port it's current Palm-size PC note taking application to Pamela
and optimize the user interface. It will link to existing [Confidential
Material supplied separately to the SEC] and email capability. Additional
work may be required to link to the standard [Confidential Material
supplied separately to the SEC] productivity applications. Synchronization
to the CIC QuickNotes Desktop application will be handled separately.
7. Sign-It (login)
CIC will port it's current Sign-It product to Pamela, optimize the user
interface and link to the [Confidential Material supplied separately to the
SEC] login API so that the users signature can be used for login security
to the Pamela device.
<PAGE>
Exhibit 10.26 (continued)
III. Deliverables
This section describes the deliverables for the project. Any changes are to be
mutually agreed upon with appropriate approvals.
IIIa. Deliverables Common to Pamela & Roxette
Alpha 0:
o Jot user interface and recognition engine implemented on[Confidential Material
supplied separately to the SEC].
IIIb. Pamela Specific Deliverables
a.) Functional Specification:
o Design recommendations for Jot and "[Confidential Material supplied
separately to the SEC] Jot" on Pamela.
o Testing plan and procedures for each Phase (Alpha,
Beta, & GMC).
o Written CIC deliverable specifications.
b.) Alpha 1:
o Jot with test interface and recognition engine implemented on Pamela EP1.
o Technical support to Ericsson by fax or email for integration support.
c.) Alpha 2:
o Jot & "[Confidential Material supplied separately to the SEC] Jot"
recognition engine implemented on[Confidential Material supplied separately
to the SEC].
o Technical support to Ericsson by fax or email for integration support.
d.) Alpha 3:
o Quick Notes & Sign-It (login) implemented on [Confidential Material
supplied separately to the SEC].
o Technical support to Ericsson by fax or email for integration support.
e.) Beta:
o Jot, "Word Jot", Macro Editor, Trainer and Tutorial implemented
on Final[Confidential Material supplied separately to the SEC].
o Quick Notes Tutorial implemented on Final [Confidential Material
supplied separately to the SEC].
o Sign-It implemented on Final[Confidential Material supplied separately
to the SEC].
o Sample code for testing and integration.
o Technical support to Ericsson by fax or email for integration support.
f.) Final Integration Testing:
o Final integration and testing of Jot, "[Confidential Material supplied
separately to the SEC] Jot", macro editor, and tutorial, trainer on EP2.
o Final integration and testing of Soft Keyboard on EP2.
o Final integration and testing of Quick Notes, Sign-It (login) on EP2.
o Technical support to OEM by fax or email for integration support.
o On site integration testing and support in Ericsson facilities in Raleigh,NC
o Sample code for testing and integration.
o Software will be tested in accordance with Ericsson software standards.
<PAGE>
Exhibit 10.26 (continued)
g.) Final Deliverables
o Golden Master Disk (Product-quality software) containing;
o Jot user interface, recognition engine, trainer and macro editor implemented
on EP2.
o On-screen keyboard implemented on EP2.
o "[Confidential Material supplied separately to the SEC] Jot" implemented
on EP2.
o Quick Notes implemented on EP2.
o Sign-It (login) Jot user interface, recognition engine, trainer and macro
editor implemented on EP2.
o Final Documentation including;
o User documentation (per license agreement).
o Final documentation of API's and software structure.
IIIc. Roxette Specific Deliverables
a.) Functional Specification:
o Design recommendations for Jot on Roxette.
o Testing plan and procedures for each Phase (Alpha, Beta, & GMC).
o Written CIC deliverable specifications.
b.) Alpha 1:
o Jot recognition engine implemented on Roxette EP1.
o Technical support to Ericsson by fax or email for integration support.
c.) Beta 1:
o Jot user interface and recognition engine implemented on Roxette EP2 SDK.
o Jot tutorial, macro editor and trainer implemented on Roxette EP2 SDK.
o Soft Keyboard implemented on Roxette EP2 SDK.
o Sample code for testing and integration.
o Documentation of APIs and software structures.
o Technical support to Ericsson by fax or email for integration support.
d.) Final Integration Testing:
o Final integration and testing of Jot, macro editor, trainer and tutorial
on EP2.
o Final integration and testing of Soft Keyboard on EP2.
o Technical support to OEM by fax or email for integration support.
o On site integration testing and support in Ericsson facilities in Manchester
, England.
o Sample code for testing and integration.
o Software will be tested in accordance with Ericsson software standards.
e.) Final Deliverables
o Golden Master Disk (Product-quality software) containing;
o Jot user interface, recognition engine, trainer and macro editor implemented
on Roxette EP2.
o On-screen keyboard implemented on EP2.
o Final Documentation including;
o User documentation (per license agreement).
o Final documentation of API's and software structure.
<PAGE>
Exhibit 10.26 (continued)
IV. Dependencies
Note: These dependencies may affect CIC's ability to deliver a given
deliverable or to meet the agreed schedule milestones.
o Completion of NRE & License Agreements between CIC and Ericsson.
o Ability to get necessary development tools/information from either Ericsson
or key vendors (Operating System, Processor, etc.)
o Ericsson delivery to CIC of necessary components to simulate Pamela & Smart
Phones Roxette (Early Prototypes and SDK's).
o Cooperation and clear definition of User Interface requirements.
<PAGE>
[OBJECT OMITTED]
Exhibit 10.26 (continued)
Material Costs
[Confidential Material supplied separately to the SEC]
On Site Integration and Testing Costs:
[Confidential Material supplied separately to the SEC]
--------------------------------- ------------------------------------------
Item Est. Cost
--------------------------------- ------------------------------------------
--------------------------------- ------------------------------------------
Integration test in Raleigh, NC [Confidential Material supplied separately
to the SEC]
--------------------------------- ------------------------------------------
--------------------------------- ------------------------------------------
Integration test in Manchester [Confidential Material supplied separately
to the SEC]
--------------------------------- ------------------------------------------
--------------------------------- ------------------------------------------
Est. Travel & Living Expenses [Confidential Material supplied separately
to the SEC]
--------------------------------- -----------------------------------------
--------------------------------- -----------------------------------------
Est. Total [Confidential Material supplied separately
to the SEC]
--------------------------------- -----------------------------------------
<PAGE>
Exhibit 10.26 (continued)
Terms of Agreement;
o [Confidential Material supplied separately to the SEC].
o "Other Costs" will be billed as incurred for actual amounts.
VI. Definitions & Acceptance Criteria
Any changes are to be mutually agreed upon with appropriate approvals.
o Alpha Version: Key functionality implemented but contains known bugs that
may cause fatal errors occasionally (i.e. system hanging, loss of
information). Engine is fully implemented and work in OEM OS emulator but
there may be fatal errors. After CIC delivers the software, Ericsson shall
integrate it to development board and verify that it meets the above
performance criteria within [Confidential Material supplied separately to
the SEC] weeks. If there is no written disagreement after [Confidential
Material supplied separately to the SEC] weeks, it is deemed that the
release is done.
o Beta Version: All components are implemented but the software may contain
known bugs of minor severity, no known fatal errors. User Interface,
recognition engine, trainer, macro editor are all implemented and have the
desired UI and functionality. There may be some minor bugs but no fatal
errors that cause system hang or data loss. After CIC delivers the
software, Ericsson shall integrate it to their respective products and
verify it meets the above performance criteria within [Confidential
Material supplied separately to the SEC] weeks. If there is no written
disagreement after [Confidential Material supplied separately to the SEC]
weeks, it is deemed that the release is done.
o Golden Master Candidate: The software is fully functional and contains no
known problems. It is ready for product shipment. After CIC delivers the
software, Ericsson shall integrate it to the respective products and verify
it meets the above performance criteria with [Confidential Material
supplied separately to the SEC] weeks. If there is no written disagreement
after [Confidential Material supplied separately to the SEC] weeks, it is
deemed that the release is done and the version is the final Golden Master
release.
In practice there may be intermediate releases for Alpha, Beta and Golden Master
Candidate versions. For example, CIC may release Alpha1, Alpha2, Beta1, Beta2 or
GMC1, GMC2 etc, and Ericsson may give feedback for each release. CIC continues
to fix problems until both parties agree that a release meets the above criteria
and it is deemed the final Alpha, final Beta or final GMC.
VII. Licensed Deliverables
The following is a description of licensed deliverables to be bundled on the
respective Pamela & Roxette products;
o JotTM Handwriting Recognition engine for Ericsson implementation of
[Confidential Material supplied separately to the SEC] based Smart Phone.
o JotTM User Interface for Ericsson implementation of [Confidential Material
supplied separately to the SEC] based Smart Phone.
o JotTM Trainer, Animated Tutorial, and Macro Editor for Ericsson
implementation of [Confidential Materialsupplied separately to the SEC] based
Smart Phone
o Sign-ItTM
o QuickNotesTM
<PAGE>
Exhibit 10.26 (continued)
- --------------------------------------------------------------------------------
CIC November 19, 1998
Confidential
- --------------------------------------------------------------------------------
READ 1998:17429
Communication Intelligence Ericsson Commercial
Corporation
By: /s/Guido DiGregorio By: /s/Del Hanson
--------------------- --------------------------
Program Director
Title: President Title: SW Technology Provisioning
------------------ --------------------------
Date: December 4, 1998 Date: 12/1/98
------------------ -------------------------
Ericsson Roxette Technical Manager Ericsson Pamela Technical Manager
By: /s/Joakin Ingers By: /s/Danny Bravo
------------------- -------------------------
Title: Director Data Development Title: Sr. Project Manager
------------------------- ------------------------
Date: November 30, 1998 Date: 12/1/98
-------------------- --------------------------
