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EXHIBIT 10.6
COOPERATION AND FRAMEWORK AGREEMENT
This Cooperation and Framework Agreement (this "Framework Agreement"), is
made as of this 8th day of May, 2000, by and between I-Link Incorporated, a
Florida corporation having its principal office at 13751 S. Wadsworth Park
Drive, Suite 200, Draper, Utah 84020 ("I-Link"), and Cyber Office International
AG, a Swiss corporation having its principal office at Foerrlibuckstrasse 178,
8005 Zurich, Switzerland ("Cyber Office").
RECITALS
WHEREAS, Cyber Office and I-Link are each in the business of providing
enhanced communication services through an advanced IP network and
application architecture;
WHEREAS, the parties desire to enter into a strategic relationship to
create a [***].
WHEREAS, the parties intend to interconnect their IP networks in order to
be able to offer seamless and transparent services to their respective
customers in the United States and Europe;
WHEREAS, this Framework Agreement is intended to set forth the principal
terms of the parties' cooperation;
NOW, THEREFORE, in consideration of the above recitals and mutual
agreements set forth in this agreement, the parties intending to be legally
bound, agree as follows:
1. Definitions.
In this Framework Agreement, including the Recitals, unless the context requires
another meaning:
1.1 "AFFILIATE" means with respect to a specified Person (i) any Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified; (ii) each
Person that serves as a director, officer, employee, partner, member, manager,
executor, or trustee of such specified
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Person (or in a similar capacity); and (iii) any Affiliate of any individual
described in clause (ii). For purposes of this definition, "control" of a Person
will mean the possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies, whether through the ownership
of voting securities, by contract or otherwise.
1.2 "CHANGE OF CONTROL TRANSACTION" means (1) I-Link enters into a transaction
(other than a transaction with Cyber Office or Winter Harbor or any of their
respective Affiliates) the result of which would be a merger, reorganization,
combination, share exchange, consolidation or similar transaction involving the
purchase of more than 50% of the assets or more than 50% of the shares of common
stock of I-Link (the "I-Link Common Stock") on a fully diluted basis, or (2) in
any event if a third party (other than Cyber Office or Winter Harbor or any of
their respective Affiliates) acquires more than 50% of the assets or more than
50% of the I-Link Common Stock on a fully diluted bases.
1.3 "COMBINED NETWORK" is the I-Link Network and the Cyber Office Network and
any hardware used to connect the I-Link Network and Cyber Office Network.
1.4 "DIRECT COMPETITOR" means any direct competitor of Cyber Office listed in
Schedule D hereto, which schedule may be periodically updated by mutual
agreement of Cyber Office and I-Link to reflect the then current market
conditions. The parties hereto acknowledge that a Person will cease to be a
Direct Competitor to the extent such Person merges with or into I-Link or any
subsidiary of I-Link or I-Link directly or indirectly acquires all or
substantially all of the assets or a majority of the capital stock of such
Person.
1.5 "ONE YEAR EXCLUSIVE ACTIVITIES" are: (i) the licensing of the Licensed
Technology to any Direct Competitor for the provision of services to end users
located in the countries listed in Schedule E; (ii) allowing the sale of I-Link
services to any Direct Competitor for the provision of services to end users
located in the countries listed in Schedule E; or (iii) allowing any Direct
Competitor to use the I-Link Network, I-Link Platform and Licensed Technology to
offer services to end users located in the countries listed in Schedule E, which
services are similar to or in competition with those offered by Cyber Office.
1.6 "TWO YEAR EXCLUSIVE ACTIVITIES" are: (i) the licensing of the Licensed
Technology to any Direct Competitor for the provision of services to end users
located in the countries listed in Schedule F; (ii) allowing the sale of I-Link
services to any Direct Competitor for the provision of services to end users
located in the countries listed in Schedule F; or (iii) allowing any Direct
Competitor to use the I-Link Network, I-Link Platform and Licensed Technology to
offer services to end users located in the countries listed in Schedule F, which
services are similar to or in competition with those offered by Cyber Office.
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1.7 "CYBER OFFICE NETWORK" is the network used by Cyber Office to provide
enhanced communications services to its current end users.
1.8 "CYBER OFFICE PLATFORM" is the software used by Cyber Office on the Cyber
Office Network to provide enhanced communications services.
1.9 "INTELLECTUAL PROPERTY RIGHTS" means all patents and patent applications
(including all divisions, continuations, continuations-in-part, reissues,
renewals, extensions, supplementary protection certificates, utility models and
the like), copyrights (whether registered or unregistered), trade dress, trade
marks (whether registered or unregistered) discoveries, inventions, designs
(whether registered or unregistered), circuit layout rights, moral rights and
other intellectual property rights (including Know-How) and any applications
for, or rights to obtain or acquire such rights, whether currently existing or
hereafter acquired.
1.10 "I-LINK NETWORK" is the network used by I-Link to provide enhanced
communications to provide services to its current end users.
1.11 "I-LINK PLATFORM" is the software used by I-Link on the I-Link Network to
provide enhanced communications services.
1.12 "JOINT NETWORK OPERATING AGREEMENT" means the agreement contemplated in
Section 4.1.
1.13 "KNOW-HOW" means all unpatented proprietary and/or confidential know- how,
trade secrets, information, data and materials, in whatever form, including, but
not limited to, the following: specifications, calculations, formulae
engineering and technical data, blueprints, diagrams, charts, results, computer
programs, designs, skills, methods, techniques, procedures, manufacturing data
and marketing or sales information.
1.14 "LICENSED TECHNOLOGY" means the Intellectual Property Rights of I-Link
(together with all updates thereto) which relate to the I-Link Platform, all as
more fully described in Schedule A.
1.15 "PERFORMANCE MILESTONES" means the milestones set forth in Schedule B
hereto.
1.16 "PERSON" means any individual, sole proprietorship, firm, corporation,
general or limited partnership, limited liability partnership, joint venture,
limited liability company, estate, trust, association, organization, or other
entity.
1.17 "RESOURCE COMMITMENTS" has the meaning set forth in Section 3.1.
1.18 "SOURCE CODE" means insofar as I-Link uses any or all of the following for
the functioning and maintenance of the I-Link Platform, the computer software
and any
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associated documentation in human-readable form, including programmers'
comments, and the following items to the extent they are confidential: data
files and structures, APIs, header and include files, macros, programming tools
not commercially available, technical specifications, flowcharts and logic
diagrams.
1.19 "WINTER HARBOR" means Winter Harbor LLC, a Delaware limited liability
company.
2. ACCESS TO RIGHTS AND TECHNOLOGY.
2.1 TECHNOLOGY GRANT. I-Link hereby grants to Cyber Office a perpetual (subject
to Section 12.3(b)) non-transferable license to use the Licensed Technology for
the purpose of implementing the Combined Network and providing enhanced
telecommunications services, provided however that such license shall not extend
to or permit the use of the Licensed Technology in connection with, any
multilevel or network marketing distribution channels like, for example, the
current arrangements between I-Link and Big Planet (the "Purpose"). Cyber Office
shall not use the Licensed Technology in connection with any of its products and
services other than the Purpose and shall otherwise use it solely in accordance
with this Framework Agreement. The parties acknowledge and agree that as
consideration for the foregoing license and other rights described herein,
I-Link and Cyber Office will enter into the Revenue Sharing Agreement described
below, which Revenue Sharing Agreement will provide for certain payments between
the parties.
2.2 ACCESS GRANT. Cyber Office hereby grants to I-Link a nontransferable
license to access the Cyber Office Network for the purpose of implementing the
Combined Network. I-Link hereby grants to Cyber Office a nontransferable license
to access the I-Link Network for the purpose of implementing the Combined
Network.
2.3 EXCLUSIVITY. (a) For a period of two years commencing from the date hereof,
I-Link shall not, except pursuant to any agreement in existence on the date
hereof, engage in any of the Two Year Exclusive Activities without the prior
written consent of Cyber Office; provided, however, if Cyber Office has not made
the payment specified in Section 5.2(a) within 75 days from the date of the
execution of this Framework Agreement (whether or not pursuant to such Section
5.2(a) Cyber Office is required to make such payment), then the provisions of
this Section 2.3 shall be of no effect.
(b) For a period of one year commencing from the date hereof, I-Link shall
not, except pursuant to any agreement in existence on the date hereof, engage in
any of the One Year Exclusive Activities, without the prior written consent of
Cyber Office; provided, however, if Cyber Office has not made the payment
specified in Section 5.2(a) within 75 days from the date of the execution of
this Framework Agreement (whether or
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not pursuant to such Section 5.2(a) Cyber Office is required to make such
payment), then the provisions of this Section 2.3 shall be of no effect.
(c) During the term of this Framework Agreement, Cyber Office agrees that
it will not provide any IP-based enhanced communications services to end users
in North America (the "Cyber Office North American Services") other than on the
I-Link Network. In providing the Cyber Office North American Services on the
I-Link Network, I-Link agrees that all access to the I-Link Network, revenue
sharing and pricing arrangements shall be [***]. Notwithstanding the forgoing,
in the event that I-Link is not able to provide Cyber Office with sufficient
capacity for the provision of Cyber Office's North American Services [***],
Cyber Office shall not be subject to the restrictions in this Section 2.3(c).
2.4 TECHNOLOGY UPDATES.
(a) Cyber Office and I-Link agree that all modifications, enhancement
updates and new additions to and advances in the Combined Network and any
associated technology (including any Intellectual Property Rights) when
individually developed by I-Link (the "I-Link Technology Updates") shall be
exclusively owned by I-Link, when individually developed by Cyber Office (the
"Cyber Office Technology Updates") shall be exclusively owned by Cyber Office,
and when jointly developed by both parties (the "Joint Technology Updates")
shall be jointly owned.
(b) All I-Link Technology Updates shall be exclusively controlled by
I-Link; however, I-Link's implementation of any I-Link Technology Update shall
not impair Cyber Office's ability to access and utilize the Combined Network.
For the purpose of this Section, Cyber Office's ability to access and utilize
the Combined Network would be considered impaired if Cyber Office is not able to
provide services to its customers at least as effectively as before the I-Link
Technology Update is implemented (the "I-Link Impairment"). If the
implementation of such I-Link Technology Update requires the modification of the
then existing Cyber Office Network in order to avoid the I-Link Impairment,
Cyber Office's consent to such modifications shall not be unreasonably withheld.
(c) All Cyber Office Technology Updates shall be exclusively controlled by
Cyber Office; however, Cyber Office's implementation of any Cyber Office
Technology Update shall not impair I-Link's ability to access and utilize the
Combined Network. For the purpose of this Section, I-Link's ability to access
and utilize the Combined Network would be considered impaired if I-Link is not
able to provide services to its customers at least as effectively as before the
Cyber Office Technology Update is implemented (the "Cyber Office Impairment").
If the implementation of such Cyber Office Technology Update requires the
modification of the then existing I-Link Network in order to avoid the
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Cyber Office Impairment, I-Link's consent to such modifications shall not be
unreasonably withheld.
(d) The Joint Technology Updates shall be jointly controlled by both
parties and shall not be implemented such as to cause an I-Link Impairment or
Cyber Office Impairment without the consent of both parties, which consent shall
not be unreasonably withheld.
2.5 CAPACITY COMMITMENT. Cyber Office agrees to provide I-Link every 30 days
(and upon such intervals as I-Link reasonably requests) information with respect
to Cyber Office expected use of the Combined Network for the 90 days following
the delivery of such information. I-Link agrees to increase the capacity of and
to upgrade the I-Link Network on a timely basis in order to accommodate any
increased use of the I-Link Network experienced as a result of the operation of
the Combined Network due to the normal and customary growth of the Cyber
Office's subscriber base (consistent with Cyber Office's currently forecasted
growth) or as a result of arrangements entered into by I-Link. In the event that
the I-Link Network is operating at or above normal capacity, I-Link shall ensure
that Cyber Office's access to the I-Link Network is in amounts and on terms no
less favorable than the access to the I-Link Network granted by I-Link to third
parties (only to the extent such third parties purchase comparable services from
I-Link in quantities comparable to those purchased from I-Link by Cyber Office).
2.6 PERFORMANCE MILESTONES AND RESOURCE COMMITMENTS COVENANT
(a) I-Link agrees that as a fundamental and material component of this
Framework Agreement that it will use its best commercially reasonable efforts to
help complete the Performance Milestones as set forth on Schedule B and the
Resource Commitments for which it is responsible.
(b) Cyber Office agrees that as a fundamental and material component of
this Framework Agreement that it will use its best commercially reasonable
efforts to help complete the Performance Milestones as set forth on Schedule B
and the Resource Commitments for which it is responsible.
3. CONSULTING.
3.1 UPGRADE OF CYBER OFFICE'S PLATFORM. In order to permit the seamless
provision of the use of the Licensed Technology for the Purpose, I-Link shall
provide all necessary assistance to Cyber Office in order to (i) upgrade the
Cyber Office Platform to facilitate implementation of the Combined Network; and
(ii) achieve the Performance Milestones set forth in Schedule B hereto in
accordance with the terms thereof. As a material and fundamental component of
this Framework Agreement, I-Link shall provide for the substantial commitment of
personal time of [***] in addition to the commitment of time
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from any other personnel and resources required to meet its obligations under
the Performance Milestones set forth on Schedule B and generally under this
Framework Agreement (the "Resource Commitments"). Notwithstanding the foregoing,
to the extent any of the foregoing persons is no longer employed by I-Link, in
lieu of providing the personal time of any such person, I-Link shall be required
to provide the personal time of the person or persons who assumed such foregoing
person's duties and responsibilities. The parties agree to more fully describe,
if necessary, the Performance Milestones and Resource Commitments as part of the
consulting agreement described in Section 3.2.
3.2. CONSULTING AGREEMENT. As soon as reasonably practicable after the date
hereof, the parties hereto agree to enter into a consulting agreement (the
"Consulting Agreement") which shall set forth the timetable and content of
upgrades to be made to the Cyber Office Platform by I-Link and the resources
required of I-Link to perform such upgrades in order to meet its obligations set
forth in Section 3.1.
4. OPERATION OF THE JOINT NETWORK.
4.1 JOINT NETWORK OPERATING AGREEMENT. In order to more fully implement the
terms of their cooperation, Cyber Office and I-Link agree to reasonably
negotiate and enter into a joint network operating agreement (the "Joint Network
Operating Agreement") as soon as reasonably practicable following the execution
of this Framework Agreement. The Joint Network Operating Agreement shall provide
for:
(a) Cyber Office's right to use the Combined Network to provide Cyber
Office's and I-Link's proprietary services and applications under Cyber Office's
and/or I-Link's brands;
(b) ongoing mutual design, planning, implementation, testing, integration,
training, technical and operational consulting, maintenance and support of the
Combined Network;
(c) I-Link's right to use the Combined Network to provide I-Link's and its
partners' and its customers' proprietary services and applications; and
(d) associated pricing and joint billing for the use of the Combined
Network; and
(e) joint development and marketing of new applications and services for
the Combined Network.
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4.2 REVENUE SHARING AGREEMENT. As soon as reasonably practicable after the date
hereof and consistent with the terms of Section 5.2, the parties hereto agree to
negotiate in good faith and enter into a Revenue Sharing Agreement (the "Revenue
Sharing Agreement").
5. PAYMENT.
5.1 [INTENTIONALLY LEFT BLANK]
5.2 PREPAYMENT FOR SERVICES. (a) By the date that is 75 days after the
execution of this Framework Agreement, provided that on or before such date
I-Link has substantially completed Milestone Number 1 as set forth in Schedule
B, Cyber Office shall pay to I-Link $10 million in cash (the "Service
Prepayment"). Such Service Prepayment shall be payment for the use of the I-Link
Network and Licensed Technology and shall be credited against amounts owed by
Cyber Office to I-Link under the Revenue Sharing Agreement.
(b) As fundamental components of the Revenue Sharing Agreement (i) in
consideration for the substantial advance payment represented by the Service
Prepayment, I-Link shall offer to Cyber Office a significant discount on the
fees charged by or revenues to be shared with I-Link as compared to the fees
charged by or revenues to be shared with I-Link under I-Link's normal pricing
and revenue sharing arrangements; and (ii) in any event, all revenue sharing and
pricing arrangements shall be [***].
5.3. LICENSE AND CONSULTING FEES. In consideration for the license and access
rights granted under this Framework Agreement, Cyber Office shall pay to I-Link
$7.5 million in cash upon the execution of this Framework Agreement. In
consideration for any services performed by I-Link under the Consulting
Agreement and Section 3.1, Cyber Office shall pay I-Link $2.5 million in cash
upon the execution of this Framework Agreement.
6. REPRESENTATIONS AND WARRANTIES.
6.1 REPRESENTATIONS AND WARRANTIES OF I-LINK. I-Link represents and warrants to
Cyber Office as follows:
(a) I-Link is a corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under this Framework Agreement. I-Link
is duly licensed or qualified to do business under the laws of each state or
other jurisdiction in which either the ownership or use of the properties owned
or used by it, or the nature of the activities conducted by it requires such
licensing or qualification, except to the extent that the failure to be so
licensed or
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qualified would not have a material adverse effect on I-Link. I-Link has
delivered to Cyber Office copies of the certificate of incorporation and
articles of incorporation and by-laws of I-Link.
(b) I-Link has full power and authority to execute and deliver this
Framework Agreement, and to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and performance by
I-Link of this Framework Agreement have been duly and validly authorized and no
additional corporate authorization or consent is required in connection with the
execution, delivery and performance by I-Link of this Framework Agreement. This
Agreement constitutes the valid and legally binding obligation of I-Link,
enforceable against I-Link in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles whether or not considered in a court of law or equity.
(c) During the term of this Framework Agreement, I-Link will not enter
into any agreement, arrangement or affiliation with any Person or engage in any
conduct that would be in conflict with Cyber Office's rights under Section 2 of
this Framework Agreement.
(d) I-Link has not licensed or granted to any third party any rights in
the I-Link Network or entered into any reselling or other agreements that are in
conflict with the license rights granted by I-Link to Cyber Office hereunder.
(e) Except as set forth on Annex A hereto, I-Link has not received any
written notice or claim, and is not otherwise aware that the Licensed Technology
infringes or misappropriates the valid proprietary rights of any other Person.
(f) To the extent that the Licensed Technology comprises Confidential
Information (as defined below), it has been kept confidential by I-Link.
(g) Entering into this contract by I-Link does not result in any material
breach of any agreement to which I-Link is a party.
(h) There is no unsatisfied judgment or, arbitral award or decision of any
court or tribunal against I-Link and there is no claim, demand, litigation,
arbitration or prosecution to which I-Link is a party, or to I-Link's knowledge,
pending or threatened, in respect of the Licensed Technology, the I-Link
Platform or I-Link Network.
(i) No action or proceeding is pending or, in so far as I-Link knows, is
threatened against I-Link before any court, administrative agency or other
tribunal which would be reasonably likely to impact I-Link's right, power and
authority to enter into this Framework Agreement or to otherwise carry out its
obligations hereunder.
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6.2 REPRESENTATIONS AND WARRANTIES OF CYBER OFFICE. CYBER OFFICE REPRESENTS AND
WARRANTS TO I-LINK AS FOLLOWS:
(a) Cyber Office is a corporation duly organized, validly existing, and in
good standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under this Framework Agreement. Cyber
Office is duly licensed or qualified to do business under the laws of each state
or other jurisdiction in which either the ownership or use of the properties
owned or used by it, or the nature of the activities conducted by it requires
such licensing or qualification except to the extent that the failure to be so
licensed or qualified would not have a material adverse effect on Cyber Office.
(b) Cyber Office has full power and authority to execute and deliver this
Framework Agreement, and to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and performance by
Cyber Office of this Framework Agreement have been duly and validly authorized
and no additional corporate authorization or consent its required in connection
with the execution, delivery and performance by Cyber Office of this Framework
Agreement. This Agreement constitutes the valid and legally binding obligation
of Cyber Office, enforceable against Cyber Office in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles whether or not considered in a court of law or equity.
(c) During the term of this Framework Agreement, Cyber Office will not
enter into any agreement, arrangement or affiliation with any Person or engage
in any conduct that would be in conflict with I-Link's rights under Section 2 of
this Framework Agreement.
(d) Entering into this contract by Cyber Office does not result in any
material breach of any agreement to which Cyber Office is a party.
(e) No action or proceeding is pending or, in so far as Cyber Office
knows, threatened against Cyber Office before any court, administrative agency
or other tribunal which would be reasonably likely to impact upon Cyber Office's
right, power and authority to enter into this Framework Agreement or to
otherwise carry out its obligations hereunder.
7. [INTENTIONALLY LEFT BLANK].
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8. INTELLECTUAL PROPERTY INDEMNITY.
8.1 INTELLECTUAL PROPERTY RIGHT INFRINGEMENT INDEMNITY. I-Link will indemnify
Cyber Office from and against all actions, proceedings, claims, damages, costs,
expenses, and demands (collectively "Damages") by third parties in respect to
the infringement or alleged infringement of any Intellectual Property Rights or
Know-How belonging to such third parties arising from the exploitation by Cyber
Office or I-Link of the Licensed Technology under and in accordance with this
Framework Agreement; provided however, such indemnification shall not apply to
any action taken or action not taken by Cyber Office after I-Link has provided
Cyber Office notice stating that such action taken or action not taken would
infringe upon the Intellectual Property Rights or Know-How of third parties or
would otherwise give rise to Damages.
(b) Without limiting any other rights that Cyber Office may have, if it is
determined by an independent tribunal of fact or law or if it is agreed between
the parties that through Cyber Office's exercise of its rights contemplated in
this Framework Agreement an infringement of the intellectual property rights of
a third party has occurred, I-Link will make all reasonable efforts to procure
for Cyber Office the right to continue to exercise the rights granted to Cyber
Office under this Framework Agreement.
9. FURTHER INDEMNITIES.
9.1. Each party agrees to indemnify the other party and its officers, employees
and agents ("Those Indemnified") against all expenses, losses, damages and costs
(including legal fees) incurred by Those Indemnified in the performance of this
agreement as a result of:
(a) any injury to or death of any person caused by an act or omission of
the indemnifying party or its officers, employees, agents or subcontractors; or
(b) any damage to real or tangible property caused by any act or omission
of the indemnifying party or its officers, employees, agents or subcontractors;
or
(c) the gross negligence or willful misconduct of the indemnifying party
or its officers, employees, agents or subcontractors; or
(d) a breach of any of the terms or warranties of this Framework Agreement
by the indemnifying party or its officers, employees, agents or subcontractors.
10. INDEMNITY PROCEDURE.
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Any Person entitled to make a claim for indemnification under Sections 8 or
9 (the "Indemnified Party") not involving a claim or demand by a third party,
may make a claim for indemnification by giving written notice of the assertion
of such claim covered by this indemnity to the Person from whom it is seeking
indemnification (the "Indemnifying Party"). With respect to third party claims,
all claims for indemnification by any Indemnified Party hereunder shall be
asserted and resolved as set forth below in this Section 10. In the event that
any written claim or demand for which the Indemnifying Party would be liable to
any Indemnified Party hereunder is asserted against or sought to be collected
from any Indemnified Party by a third party, such Indemnified Party shall
promptly, but in no event more than thirty (30) days following such Indemnified
Party's receipt of such claim or demand, notify the Indemnifying Party of such
claim or demand (the "Claim Note"); provided, however, that the Indemnified
Party's failure to provide such notice in not more than thirty (30) days shall
not preclude the Indemnified Party from being indemnified for such claim or
demand, except to the extent that the failure to give timely notice results in
material prejudice to the Indemnifying Party. The Indemnifying Party shall have
ten (10) days from the personal delivery or mailing of the Claim Notice (the
"Notice Period") to notify the Indemnified Party whether or not it desires to
defend the Indemnified Party against such claim or demand. All costs and
expenses incurred by the Indemnifying Party in defending such claim or demand
shall be a liability of, and shall be paid by, the Indemnifying Party. Except as
hereinafter provided, in the event that the Indemnifying Party notifies the
Indemnified Party within the Notice Period that it desires to defend the
Indemnified Party against such claim or demand the Indemnifying Party shall have
the right to defend the Indemnified Party by appropriate proceedings and shall
have the sole power to direct and control such defense. If any Indemnified Party
desires to participate in any such defense, it may do so at its sole cost and
expense, except that if the Indemnified Party advises the Indemnifying Party
that there are issues which raise conflicts of interests between the
Indemnifying Party and the Indemnified Party, the Indemnified Party may retain
counsel satisfactory to it, and the Indemnifying Party shall pay all reasonable
fees and expenses of such counsel. The Indemnifying Party shall not without the
prior written consent of the Indemnified Party, settle, compromise or offer to
settle or compromise any claim or demand if such settlement or compromise
provides for anything other than the payment of monetary damages. The
Indemnified Party shall not settle a claim or demand and the Indemnifying Party
shall not be liable for any claim or demand settled without the prior written
consent of the Indemnifying Party. To the extent the Indemnifying Party shall
direct, control or participate in the defense or settlement of any third party
claim or demand, the Indemnified Party will give the Indemnifying Party and its
counsel access to, during normal business hours, the relevant business records
and other documents, and shall during such hours permit them to consult with the
employees and counsel of the Indemnified Party. The Indemnified Party shall use
its commercially reasonable efforts in the defense of all such claims or
demands. Except in the case of common law fraud, Sections 8 and 9 shall be the
exclusive remedy of the Indemnified Parties for any
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Damages arising out of or relating to the breach of any representation or
warrant made in this Framework Agreement.
11. CONFIDENTIALITY.
11.1 CONFIDENTIAL INFORMATION. (a) In connection with this Framework Agreement,
each of I-Link and Cyber Office (in such capacity, the "Recipient") has
received, developed or been given access to, and shall in the future receive,
develop or be given access to, certain information and materials deemed
confidential by and/or proprietary to the other party hereto (in such capacity,
the "Disclosing Party"), including, without limitation, Intellectual Property
Rights trade secrets, Know-How, technical data and/or other information and
materials pertaining to (i) this Framework Agreement and its terms and
conditions; (ii) the Licensed Technology and Combined Network; and (iii) the
Disclosing Party's products, services, customers, potential customers,
employees, operating methods, sources of supply, potential sources of supply,
distribution methods, sales, sales plans, sales methods, profits, markets,
financing or plans for future development (collectively, "Confidential
Information"). Notwithstanding the foregoing sentence, "Confidential
Information" shall not include any information or materials which:
(i) prior to disclosure, are or were known or generally available to the
public;
(ii) after disclosure, become known to the public through no act or
omission of the Recipient or any of its Representatives (as defined below) or
any other Person with an obligation of confidentiality to the Disclosing Party;
(iii) are independently developed by or for the Recipient, as evidenced by
written records of the Recipient;
(iv) are required to be disclosed (x) pursuant to an applicable law, rule,
regulation, government requirement or court order, or the rules of any stock
exchange or automated quotation system or (y) in connection with such party's
(i) public offering of its securities, (ii) listing of its securities on an
exchange or automated quotation system, or (iii) on-going national, federal,
state, local, or other governmental reporting requirements related to such
party's securities and in the case of this clause (y) such party's counsel has
provided written advice that such disclosure is required by applicable law or
regulation (provided, however, that in all of the foregoing notices the
Recipient shall advise the Disclosing Party of such required disclosure promptly
upon learning thereof in order to afford the Disclosing Party a reasonable
opportunity to contest, limit and/or assist the Recipient in crafting such
disclosure); or
(v) as agreed to in writing by the parties hereto.
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11.2 PROTECTION OF CONFIDENTIAL INFORMATION. A Recipient shall take reasonable
steps to prevent the Disclosing Party's Confidential Information from being
disclosed to any other Person. Notwithstanding the foregoing, a Recipient may
disclose such Confidential Information to those directors, officers, employees,
agents and sublicensees of the Recipient (each, a "Representative," and
collectively, "Representatives") who have a need to know such information in
connection with performance under this Framework Agreement; provided that each
Representative, prior to such disclosure, is informed by the Recipient of the
confidential nature of such information and of the confidentiality obligations
imposed on the Recipient under this Framework Agreement, and, in the case of
sublicensees provided further that each such sublicensee agrees in advance and
in writing to abide by provisions of confidentiality and restrictive use no less
stringent than those set forth herein. The Recipient shall be responsible for
any and all breaches of the provisions of this Section 11 by its
Representatives. As used herein, "reasonable steps" means the steps that the
Recipient takes to protect its own, similarly confidential and/or proprietary
information, which steps shall not be less than a reasonable standard of care.
11.3 RESTRICTED USE OF CONFIDENTIAL INFORMATION. A Recipient and its
Representatives shall use the Disclosing Party's Confidential Information solely
in connection with performance under this Framework Agreement and for no other
purpose and upon termination hereof, shall return to such Disclosing Party all
such Confidential Information (including any copies, extracts, summaries, or
syntheses thereof) of such Disclosing Party in possession of such Recipient and
its Representatives.
11.4 OBLIGATION TO INFORM. Upon learning of any unauthorized disclosure or use
of the other party's Confidential Information, the party learning of such
disclosure promptly shall provide the other party with notice thereof.
11.5 EQUITABLE RELIEF. I-Link and Cyber Office hereby acknowledge and agree that
(i) the provisions and restrictions contained in this Section 11 are reasonable
and necessary for protection of the legitimate interests of the parties hereto,
(ii) neither I-Link nor Cyber Office would have entered into this Framework
Agreement in the absence of such provisions and restrictions, and (iii) any
violation of any provision of this Section 11 by a party hereto or such party's
Representatives may result in irreparable injury to the other party hereto,
which injury may be inadequately compensable in monetary damages. Accordingly,
I-Link and Cyber Office acknowledge and agree that each of them shall be
entitled to seek preliminary and/or permanent injunctive relief from any
violation or threatened violation of this Section 11 by the other party hereto
or by such other party's Representatives, without the necessity of proving
actual damages or posting any bond or other security. The rights and remedies of
each party under this Section 11 shall be cumulative and in addition to any
other rights or remedies to which the such party may be entitled under this
Framework Agreement, at law, or in equity.
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12. TERM AND TERMINATION.
12.1 TERM. Unless otherwise terminated as provided for in Section 12.2, this
Framework Agreement shall be effective until two years from the date hereof (the
"Initial Term"). This Framework Agreement shall be automatically renewed for an
additional two years under the terms and conditions hereof at the expiration of
the Initial Term or at the expiration of any subsequent renewal term (each a
"Renewal Term") unless a notice is given by one party to the other at least
sixty (60) days prior to the expiration of such Initial Term or Renewal Term.
Such notice shall state that such party no longer desires a renewal of this
Framework Agreement. If this Framework Agreement is not extended at the end of
the Initial Term or any Renewal Term solely because I-Link states that it no
longer desires a renewal of this Framework Agreement (a "I-Link Expiration"),
then I-Link shall be obligated to provide Cyber Office, at Cyber Office's sole
cost and expense, I-Link's obligations under Sections 12.3(a)(x) and (y) and
Cyber Office shall provide to I-Link, Cyber Office's obligations under Sections
12.3(a)(x) and (y). This Section 12.1 and Sections 8, 9, 10, 11 and 14 shall
survive any I-Link Expiration. Except to the extent specifically provided above
in this Section 12.1, upon any expiration of this Framework Agreement in
accordance with this Section 12.1, all rights and obligations and provisions
hereof shall immediately terminate (other than Section 11 hereof) and I-Link
shall keep all moneys previously paid to it by Cyber Office.
12.2 TERMINATION.
(a) This Framework Agreement may be terminated:
(i) [Intentionally Omitted]
(ii) by either party in the event of a breach of any material
representation, warranty, obligation or agreement under this Framework Agreement
by the other party, provided that the terminating party has given the breaching
party written notice of such breach that identifies the nature of the breach and
within 30 days after such notice such breaching party has failed to cure the
breach;
(iii) by Cyber Office in the event that I-Link has entered into a Change of
Control Transaction and (x) to the extent such Change of Control Transaction is
with a person other than a Direct Competitor, Cyber Office, in its sole and
reasonable judgment, determines that, as a result of such Change of Control
Transaction, Cyber Office ability to obtain full and satisfactory performance
under this Framework Agreement from I-Link or its successor in interest would be
materially and adversely affected or (y) to the extent such change of Control
Transaction is with a Direct Competitor, Cyber Office, in its sole and
reasonable judgment, determines that, as a result of such Change of Control
Transaction, the continuation of this Framework Agreement would be detrimental
to the best interest of Cyber Office; and
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(iv) by Cyber Office, in the event that Milestone Number 1 is not completed
according to the Performance Milestones set forth on Schedule B and provided
that Cyber Office has not breached its obligations under Section 2.6.
(v) by either party in the event that the parties have not entered into
the Revenue Sharing Agreement, in form and substance reasonably satisfactory to
each of the parties, within 45 days of the execution of this Framework
Agreement.
12.3 EFFECT OF TERMINATION. (a) Upon termination of this Framework Agreement by
Cyber Office solely (x) pursuant to Section 12.2(a)(ii) (but only if Cyber
Office, in its sole and reasonable judgment, determines that as a result of such
termination, Cyber Office ability to obtain full and satisfactory performance
under this Framework Agreement from I-Link or its successor in interest would be
materially and adversely affected) or (y) pursuant to Section 12.2(a)(iii),
then, provided that (A) Cyber Office shall have previously made the payment
specified in Section 5.2(a) (whether or not pursuant to such Section 5.2(a)
Cyber Office is required to make such payment) and (B) the parties hereto shall
have entered into a Revenue Sharing Agreement, in form and substance reasonably
satisfactory to each of the parties, I-Link shall be obligated to provide Cyber
Office at Cyber Office's sole cost and expense:
(x) a non-transferable, non-exclusive, perpetual (subject to Section
12.3(b)) world-wide license for the use (including the modification by
Cyber Office for the subsequent use by Cyber Office) of the Source Code. If
such Source Code is used by Cyber Office for provision of its services to
end users located in any countries located outside of North America, then
Cyber Office shall not be required to make any further payments to I-Link
under this or any other agreement for such license. If such Source Code is
used by Cyber Office for provision of its services to end users located in
any countries located in North America, then to the extent that Cyber
Office utilizes the Source Code for the provision of its services to end
users in any countries located in North America, Cyber Office shall
continue to pay I-Link for such license pursuant to the Revenue Sharing
Agreement, which agreement shall survive for as long as and to the extent
that Cyber Office utilizes the Source Code for provision of its services to
end users in any countries located in North America; and
(y) for a period of six months following such a termination,
reasonable access to, and the sufficient commitment of, the key personnel
and other resources necessary for (i) the maintenance and operation of the
Cyber Office Network and Cyber Office Platform and future modifications
thereto and (ii) to insure that the Cyber Office Network and Cyber Office
Platform remains compatible to and integrated with the I-Link Platform and
I-Link Network; provided however, in the event that Cyber Office elects to
disconnect the Cyber Office Network and Cyber
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Office Platform from the Combined Network, then I-Link shall no longer have
any obligations under this Section 12.3(a)(y)(ii).
(b) Sections 2.3, 4.2, 5.2, 8, 9, 10, 11, 12, 13 and 14 shall survive any
termination of this Agreement by Cyber Office pursuant to Section 12.2(a) (ii)
or (iii) provided that I-Link shall continue to be entitled to receive payments
under the Revenue Sharing Agreement in accordance with Section 12.3(a)(x).
Upon termination of this Framework Agreement pursuant to Section
12.2(a)(iv) or 12.2(a)(v): (i) I-Link shall immediately return all money paid by
Cyber Office to I-Link pursuant to Section 5; (ii) all future obligations of
Cyber Office to pay money to I-Link shall be null and void; (iii) all rights and
obligations of both parties under Section 2 shall be null and void; and (iv) all
other rights and obligations under this Framework Agreement and all other
agreements contemplated hereunder shall terminate and be null and void
(including without limitation Section 2 hereof), except for Sections 8, 9, 10,
11, 12.3(b) and 14.
Except to the extent specifically provided above in this Section 12.3(b),
upon any termination of this Framework Agreement pursuant to Section 12.2(a) all
rights and obligations hereunder and provisions hereof shall immediately
terminate (other than Section 11 hereof) and I-Link shall keep all moneys
previously paid to it by Cyber Office.
12.4 [INTENTIONALLY OMITTED]
13. ESCROW. As soon as reasonably practicable following the execution of this
Framework Agreement, Cyber Office and I-Link shall negotiate in good faith and
enter into an escrow agreement (the "Escrow Agreement"). The Escrow Agreement
shall provide that I-Link shall deposit in escrow (i) upon execution of this
Framework Agreement, and (ii) at least every four (4) weeks thereafter until
this Framework Agreement is terminated, the most recent copy of the Source Code
necessary for the maintenance and operation of the Cyber Office Network and
Cyber Office Platform and future modifications thereto. The Source Code shall be
immediately released to Cyber Office by the escrow agent (the "Escrow Agent")
appointed under the Escrow Agreement to the extent Cyber Office is entitled to
such Source Code pursuant to 12.1 and Section 12.3(a).
In the event of a dispute concerning Cyber Office's right to terminate this
Framework Agreement and receive the Source Code from the Escrow Agent pursuant
to this Section 13 or the Escrow Agreement (the "Escrow Dispute"), the parties
agree that the Escrow Agent shall not delay the release of the Source Code due
to such Escrow Dispute and that such Escrow Dispute shall be resolved pursuant
to the arbitration provisions set forth in Section 14.4. If the final judgment
or determination of such arbitration finds that Cyber Office was not entitled to
terminate this Framework Agreement and receive the Source
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Code, then Cyber Office shall, within 10 days of such decision, discontinue use
of the Source Code and return all copies of the Source Code to the Escrow Agent.
In the event that the parties are unable to enter into an Escrow Agreement, the
terms of this Section 13 shall become binding obligations on the parties and
I-Link shall be considered the Escrow Agent for the purposes of this Section 13.
14. GENERAL PROVISIONS
14.1 TRANSACTION EXPENSES. Except as otherwise provided herein, each party will
pay its own costs and expenses incurred in connection with the transactions
contemplated hereby, including the fees of any legal counsel, economist,
accountant or consultant or other similar fees.
14.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity with
respect to this Framework Agreement and the transactions contemplated hereby
shall be issued, if at all, at such time and in such manner as Cyber Office and
I-Link mutually shall determine, unless otherwise required by law, in which case
the party required to make such disclosure may do so upon notice and
consultation with the other party. Unless consented to by Cyber Office or
I-Link, as the case may be, in advance or required by law, Cyber Office and
I-Link shall keep this Framework Agreement strictly confidential and may not
make any disclosure of this Framework Agreement to any person.
14.3 NOTICES. All notices, consents, waivers, and other communications under
this Framework Agreement shall be in writing and shall be deemed to have been
duly given when (a) delivered by hand (with written confirmation of receipt),
(b) sent by telecopier (with written confirmation of receipt), provided that a
copy is mailed by registered or certified mail, return receipt requested, or (c)
when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
I-Link:
David Hardy, Esq.
I-Link Incorporated
13751 S. Wadsworth Park Drive, Suite 200
Draper, Utah 84020
Facsimile No.:
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with a copy to:
Dennis J. Friedman, Esq.
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, NY 10112
Facsimile No.: 212-541-5369
Cyber Office:
Cyber Office International AG, Inc.
Uta Ulrich
Foerrlibuckstrasse 178
8005 Zurich
Switzerland
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: David Rockwell
Facsimile No.: 212-558-3588
14.4 ARBITRATION. Each of the parties agrees to submit to binding arbitration
any and all differences and disputes related to this Framework Agreement which
may arise between them in accordance with the Commercial Rules of the American
Arbitration Association and agree that pending resolution of such differences
and disputes, subject to any termination or expiration thereafter pursuant to
Sections 12.1 or 12.2, each party shall continue to honor all of its obligations
under this Framework Agreement, including all of such obligations which are the
subject of such differences and disputes. Such arbitration shall be initiated in
the New York office of the American Arbitration Association. Any award entered
in any such arbitration shall be final and binding, and may be entered and
enforced in any court of competent jurisdiction Each party to the dispute will
share equally the fees and expenses of the arbitrator and such arbitration.
14.5 JURISDICTION; SERVICE OF PROCESS.
Any action or proceeding seeking to compel arbitration or enforce a judgment
under an arbitration based on any right arising out of, this Framework Agreement
may be brought against any of the parties in the courts of the State of New
York, and each of the parties
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consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
14.6 ARTICLE AND SECTION HEADINGS; CONSTRUCTION. The headings of sections in
this Framework Agreement are provided for convenience only and shall not affect
its construction or interpretation. All references to "Article", "Articles",
"Section" or "Sections" refer to the corresponding Article, Articles, Section or
Sections of this Framework Agreement unless otherwise indicated. All words used
in this Framework Agreement shall be construed to be of such gender or number as
the circumstances require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
14.7 WAIVER. The rights and remedies of the parties to this Framework Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Framework
Agreement or the documents referred to in this Framework Agreement shall operate
as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege shall preclude any other or
further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law
(a) no claim or right arising out of this Framework Agreement or the documents
referred to in this Framework Agreement can be discharged by one party, in whole
or in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a party shall be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party shall be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Framework Agreement or the documents referred to in this Framework Agreement.
14.8 ENTIRE AGREEMENT; MODIFICATION. This Framework Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes (along with such other agreements contemplated hereby) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Framework Agreement may not be amended
except by a written agreement executed by the party to be charged with the
amendment.
14.9 ASSIGNMENTS; SUCCESSORS; NO THIRD-PARTY RIGHTS. (a) Neither party may
assign any of its rights and/or obligations under this Framework Agreement to
any other party, and any such attempted assignment or transfer shall be void;
provided, however, that Cyber Office may assign or transfer any of its rights
and/or obligations under this
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Framework Agreement to any Affiliate of Cyber Office with the prior consent of
I-Link, which consent shall not be unreasonably withheld or delayed.
(b) This Framework Agreement shall apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Framework Agreement shall be
construed to give any Person other than the parties to this Framework Agreement
any legal or equitable right, remedy, or claim under or with respect to this
Framework Agreement or any provision of this Framework Agreement. This Framework
Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Framework Agreement and their
successors and permitted assigns.
14.10 SEVERABILITY. If any provision of this Framework Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Framework Agreement shall remain in full force and effect. If any provision
of this Framework Agreement, or the application thereof to any person or entity
or any circumstance, is invalid or unenforceable, (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision; and (ii) the remainder of this Framework Agreement and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
14.11 GOVERNING LAWS. This Framework Agreement shall be governed by the laws of
the State of New York without regard to conflicts of laws principles.
14.12 COUNTERPARTS. This Framework Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Framework Agreement and all of which, when taken together, shall be deemed to
constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Framework Agreement as
of the date first above written.
I-LINK INCORPORATED
By:
Name:
Title:
CYBER OFFICE INTERNATIONAL AG
By:
Name:
Title:
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SCHEDULE A
LICENSED TECHNOLOGY
[***]
<PAGE>
SCHEDULE B
MILESTONES
[***]
<PAGE>
SCHEDULE C
[INTENTIONALLY OMITTED]
<PAGE>
SCHEDULE D
DIRECT COMPETITORS
[***]
<PAGE>
SCHEDULE E
[***]
<PAGE>
SCHEDULE F
[***]
<PAGE>
ANNEX A
[***]
