CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND SEPARATELY FILED
WITH THE COMMISSION
EXHIBIT 10.55
TDD DEVELOPMENT AGREEMENT
Between
InterDigital Communications Corporation
InterDigital Technology Corporation
and
Nokia Corporation
Table of Contents
ARTICLE 1 - DEFINITIONS....................................................... 2
1.1 Definition ............................................................ 2
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ARTICLE 2 - TDD PROJECT....................................................... 2
2.1 Overall Program/Goal................................................... 2
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2.2 Scope of Work.......................................................... 2
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2.3 Pre-Requisites......................................................... 2
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2.4 Technology Transfer.................................................... 3
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2.5 Location of Services .................................................. 3
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2.6 Program Control/Management ............................................ 3
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2.7 Reports/Penalty........................................................ 8
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2.8 No Solicitation ....................................................... 11i
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ARTICLE 3 - STANDARDIZATION ASSITANCE......................................... 11
3.1 Standardization Commitment ............................................ 11i
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3.2 Standardizattion Efforts .............................................. 12
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3.3 Submittals............................................................. 13
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3.4 Notification........................................................... 13
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ARTICLE 4 - INTELLECTUAL PROPERTY RIGHTS ..................................... 13
4.1 Ownership ............................................................. 13
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4.2 ITC and IDC License Grants ............................................ 14
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4.3 Nokia License Grants .................................................. 15
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4.4 Jointly Developed Patent Rights........................................ 17
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4.5 Patent Filing Coordination ............................................ 19
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4.6 Certain Ackowledgements and Representations............................ 19
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4.7 Additional Limitations and Conditions of the License Grant............. 19
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4.8 Cooperation in Patent Infringement Assessment/Litigation .............. 21
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4.9 InterDigital TDD Technology Licensing ................................. 22
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ARTICLE 5 - COMPENSATION...................................................... 23
ARTICLE 6 - TDD PRODUCT PURCHASES............................................. 23
ARTICLE 7 - TDD ASIC SALES.................................................... 24
ARTICLE 8 - WARRANTIES; LIMITATION OF LIABILITIES ............................ 24
8.1 Title Warranty ........................................................ 25
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8.2 Limitation of Liability ............................................... 25
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8.3 Limitation of Warranties............................................... 25
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ARTICLE 9 - EFFECTIVE DATE; TERM; TERMINATION................................. 26
9.1 Effective Date ........................................................ 26
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9.2 Term .................................................................. 26
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9.3 Termination for Cause ................................................. 26
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9.4 Termination for Convenience ........................................... 26
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9.5 Rights Upon Termination................................................ 27
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ARTICLE 10 - MISCELLANEOUS ................................................... 28
10.1 Incorporation by Reference ........................................... 28
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10.2 Exhibits.............................................................. 28
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10.3 Entire Agreement...................................................... 28
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PROPRIETARY INFORMATION
10.4 Counterparts/Faxed Signatures ........................................ 28
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ii
PROPRIETARY INFORMATION
TDD DEVELOPMENT AGREEMENT
THIS AGREEMENT is entered into as of the Effective Date between and among
InterDigital Communications Corporation, a corporation organized and existing
under the laws of the Commonwealth of Pennsylvania, with offices at 000 Xxxxx
Xxxxxx, Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000 ("IDC"), InterDigital Technology
Corporation, a Delaware corporation with offices at 000 Xxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxxx 00000 ("ITC" and, together with IDC, "InterDigital"),
and Nokia Corporation, a corporation existing under the laws of the Country of
Finland, with offices at [**] ("Nokia").
Background
Nokia is a global leader in the design, manufacture, and supply of advanced
wireless telecommunications equipment, including Infrastructure and Subscriber
Units utilizing time division multiple access technology (TDMA). Nokia is also a
leading developer and participant in the standards setting process associated
with Third Generation applications.
IDC has developed extensive digital communications technology experience
involving both TDMA and code division multiple access (CDMA) technologies.
Nokia desires to engage IDC to develop time division duplex ("TDD") technology,
which technology is currently being proposed as part of the technological
solution for Third Generation applications.
Nokia and InterDigital further desire to enter into an agreement providing for
the mutually beneficial cross-licensing of the TDD Technology.
NOW THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto, intending to be legally bound, agree as follows:
** Material has been omitted and filed separately with the Commission.
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PROPRIETARY INFORMATION
ARTICLE 1 - DEFINITIONS
1.1 Definitions. As used herein, the terms set forth in the Master Agreement,
Exhibit 1 thereto, when used with initial capital letters in this
Agreement, including any Exhibits, attachments or amendments, shall have
the meanings described in such Exhibit 1.
ARTICLE 2 - TDD PROJECT
2.1 Overall Program/Goal. Pursuant to the terms and conditions of this
Agreement, IDC will undertake to develop TDD Technology for Nokia. As
contemplated by the Work Plans and Specifications as of the Effective Date,
IDC will develop the technology and intellectual property blocks for the
TDD Technology for use in Third Generation. That development effort may
include software development, ASIC development, modem development, and
other aspects of TDD Technology. IDC's development effort will be
undertaken principally at IDC's R&D facilities. IDC will provide the TDD
Technology to Nokia for its use in productizing the TDD Technology. Nokia
will be permitted to employ the TDD Technology without further royalty
obligation to InterDigital, as set forth herein. IDC will be permitted to
use TDD Technology for its TDD Products, and license others under the TDD
Technology, as set forth herein.
2.2 Scope of Work. IDC will use reasonable efforts to accomplish the TDD
Project and deliver to Nokia the deliverables pursuant to the Work Plans
and Specifications. The initial Work Plans and Specifications are contained
in Exhibit 1. The Work Plans and Specifications may be amended from time to
time in accordance with the provisions of Section 2.6.
2.3 Prerequisites. IDC shall provide adequate, experienced and trained
resources to execute TDD Project according to the Work Plans and
Specifications. IDC shall provide basic facilities like office and
laboratory space with standard furnishing and equipment. These arrangement
are done so that necessary security and confidentiality
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PROPRIETARY INFORMATION
requirements have been taken care. Nokia will provide experienced and
trained resources for leading standardization activities, project
supervision and technology transfer. IDC will provide for limited number of
Nokia personnel (4-8) a possibility to work at the IDC R&D facilities
premises on the TDD Project, with such working environment to be comparable
with IDC's own project personnel. Such personnel will comply with IDC's
policies and procedures on security.
2.4 Technology Transfer. InterDigital will provide Nokia with access to TDD
Technical Information in accordance with the Work Plans and Specifications
in real time. Generally, documentation will be made when closed and final,
unless the Work Plans and Specifications provide for earlier release. For
the quality control purposes, IDC shall not be required to provide working
drafts of documentation absent a requirement to do so under the Work Plans
and Specifications; provided, however, that Nokia may request such draft
information, which request will IDC shall be considered promptly and in
good faith by IDC. The documentation will be made available to Nokia by
placement in electronic and paper format in repositories in at IDC's R&D
facilities. Computer access will be provided to authorized Nokia employees
having a valid password, and agreeing to comply with all IDC's policies and
procedures on security.
2.5 Location of Services. The services to be rendered by IDC related to this
Agreement shall be performed by IDC's employees primarily at the IDC
facilities in Melville, New York, and King of Prussia, Pennsylvania, USA.
2.6 Program Control/Management. The TDD Project shall be directed and
coordinated in the following manner:
2.6.1 Schedule/Budget. The initial Work Plans and Specifications, TDD
Project Budget and TDD Project Schedule are contained in Exhibit 1.
The Work Plans and Specifications may be revised by the parties
jointly, or by Nokia, as set forth below. Any amendments to the TDD
Project Budget and/or TDD Project Schedule must be by agreement of
the parties (generally the Program
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Managers), as set forth below. IDC shall use its reasonable efforts to
accomplish the TDD Project in a minimum budget and schedule.
2.6.2 InterDigital Management. InterDigital shall have the management
responsibility for the implementation of the Work Plans and
Specifications, such management responsibility to include but not be
limited to:
(a) Employ appropriate and skilled engineers and technicians for the
performance of the Work Plans and Specifications, it being understood
that IDC will use reasonable efforts to minimize any changes in its
personnel engaged in the TDD Project and keep Nokia informed of any
significant changes in staffing among the first two tiers of
management assigned to the project;
(b) Engage and monitor contractors using standards customary in the
industry;
(c) Maintain appropriate security measures regarding the development,
disclosure and dissemination of TDD Technology;
(d) Provide suitable training opportunities for employed personnel to
maintain and enhance competence; and
(e) Establish suitable project procedures and guidelines regarding
document and revision control, cost reporting, quality assurance,
program review, etc.
2.6.3 Technical Steering Committee. A technical steering committee (TSC),
comprised of technical representatives from Nokia and IDC, shall provide
overall technical direction for the TDD Project. The TSC will meet on an
asneeded basis to review technical matters and, with due consideration to
the
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PROPRIETARY INFORMATION
cost, schedule, and intellectual property issues, make recommendations as
to the technical direction of the TDD Project. Recommendations of the TSC
shall be made by agreement of IDC and Nokia. TSC recommendations shall be
approved in writing in program management meetings (described in Section
2.6.4) prior to implementation.
2.6.4 Program Management Meeting. The Nokia and IDC Program Managers for the TDD
Project shall meet on a regular basis. The Program Managers' Meeting (PMM)
will be used to track program status, review deliveries and milestones,
coordinate project activities, review TSC recommendations (or the
inability of the TSC to reach a consensus), approve revised TDD Project
Budgets and TDD Project Schedules prepared by IDC (as directed by the
Contract Review Committee - see below), assign and review program level
action items, make recommendations as to the how to best address Major
Deviations (described in Section 2.7.3) and generally address any other
program issues. In addition, at any PMM, the Program Managers shall have
the authority to approve changes to the Work Plans and Specifications
provided such changes do not result in (i) upward deviations of more than
five percent (5%) in the projected Total TDD Project Cost, as compared to
the then-existing TDD Budget, or (ii) upward deviation of more than 10% in
the projected Total TDD Project Cost, as compared to the then-existing TDD
Budget, when such change is combined with previously approved changes to
the Work Plans and Specifications underlying the then-current TDD Budget,
or (iii) delays in the completion of project milestones or deliverables of
more than two months as compared to the then-existing TDD Schedule, or
(iv) delays of more than four (4) months in the TDD Projection Completion,
as compared to such TDD Schedule, when such change is combined with
previously approved changes in the Work Plans and Specifications. PMM
decisions shall be made by agreement of IDC and Nokia and recorded in the
written minutes signed by the Program Managers of both IDC and Nokia.
Regardless of the number of individuals attending for each company, IDC
and Nokia shall each have one vote. Any such changes to the
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PROPRIETARY INFORMATION
Work Plans and Specifications not authorized to be made at the PMM as set
forth above must be approved in a Contract Review Meeting (described in
Section 2.6.5) prior to implementation. In addition, any deviations or
changes to the TDD Project Budget and TDD Project Schedule for which the
PMM cannot reach a consensus shall be referred to the Contract Review
Committee. All approvals and recommendations of the PMM shall be
documented in writing.
2.6.5 Contract Review Meetings. Contract review meetings ("CRM") will be held at
major program milestones, as set forth in the Work Plans and
Specifications, or as otherwise needed but in no event less than once
every six months. The Contract Review Meetings will be used to approve
project results, define the Confidential Information available for
disclosure to third parties (unless already exempted under Master
Agreement or this Agreement), review the scope and the focus of the
project, review the actions taken at, or recommendations arising out of,
the PMM, approve the TDD Project Schedule or TDD Project Budget (to the
extent such approval was not attained by the Project Managers), track
external circumstances which will have an impact to the project and give
approval of plans and funding of the project for the following six months'
period. These meetings will be attended by four Nokia and four IDC senior
corporate representatives; provided, however, that Nokia and IDC shall
each have one vote per company, regardless of the number of
representatives attending the Contract Review Committee. Nokia will
nominate one of its representatives to act as a chairman of the Contract
Review Committee. The Chairman will have the responsibility to call the
meetings; provided, however, that IDC may call a meeting if required to
have TDD Technology deliverables approved. In addition to other matters,
any changes to the Work Plans and Specifications recommended by the
Program Managers but for which the PMM did not have the authority to
implement, shall be reviewed and voted on in the Contract Review Meeting.
Such changes to the Work Plans and Specifications, as well as any PMM
proposed changes to the Work Plans and Specifications, TDD Project
Schedule and/or TDD Project Budget to address Major Deviations
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PROPRIETARY INFORMATION
(described in Section 2.7.3 below), shall be agreed to in writing by IDC's
and Nokia's senior corporate representatives on the Contract Review
Committee, such agreement not to be unreasonably withheld or delayed;
provided, however, that the Contract Review Committee Chairman may, in
good faith and after consultation with IDC, unilaterally reduce the scope
of the work effort for the TDD Project, provided such change does not
materially impair the objective of IDC to have the development of useable
and licensable TDD Technology funded by Nokia in exchange for other
considerations in this Agreement and the Patent License Agreement. By way
of examples only, "material impairment" (i) includes reduction in the Work
Scope and Specifications that would significantly reduce the Total Project
Cost below the $40,000,000 amount contemplated by the initial Work Plans
and Specifications and materially reduce any development of TDD Technology
necessary for Third Generation, and (ii) excludes a significant reduction
to the Work Plans and Specifications (a) necessary to achieve TDD Project
Completion by the year 2002 or (b) that would significantly reduce a
future TDD Project Budget (which provided for higher than $40,000,000
spending) back to $40,000,000. To the extent that such changes are
approved or directed, the Work Plans and Specifications, TDD Project
Budget and TDD Project Schedule, as applicable, shall be revised by IDC,
and approved at the next PMM. In addition, the Contract Review Committee
shall direct IDC to revise the TDD Project Budget and TDD Project Schedule
to reflect the changes to the Work Plans and Specifications previously
approved by the PMM and within the PMM's authority. The Chairman shall
provide written directives to IDC to perform all such actions set forth
above. Such directive shall be a prerequiste for IDC to commence work
according to the revised Work Plans and Specifications for changes not
previously approved at a PMM, and within the PMM's authority.
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PROPRIETARY INFORMATION
2.7 Progress Review/Penalty.
2.7.1 Monthly Reports. At the end of each month IDC will provide Nokia a
Monthly Report, which contains (i) expended hours for each person in
the project, (ii) actual labor cost, (iii) list of other expenses
with appropriate backup documentation for expenses, (iv) status of
the Deliverables having scheduled date in previous month and the
status of all delayed deliverables and (v) a short description of the
plan of next month activities. IDC monthly invoice to Nokia is based
on this report (See Compensation Schedule, Exhibit 2).
2.7.2 Quarterly Reports. At the first PMM after the end of each calendar
quarter, IDC shall make a report to Nokia describing the status of
the TDD Project. Such report shall provide information to Nokia as to
(i) actual TDD Project costs to date versus the budget cost, (ii) the
projected year-end cost versus the budgeted year-end costs, (iii) the
projected project-end costs versus budgeted project-end costs, (iv)
estimated delivery dates for key deliverables (as set forth in the
Work Plans and Specifications) as compared to the TDD Project
Schedule, and (v) the estimated date of TDD Project Completion as
compared to the TDD Project Schedule. The report will provide
suitable explanations for (i) any deviations of 5% or greater between
the actual costs or estimated costs, by appropriate cost category
(labor, travel, equipment, etc.) for the applicable period
(month-end, year-end, project-end) and the budget, and (ii) any
delays of greater than two months or more in the expected completion
of deliverables as compared to the TDD Schedule.
2.7.3 Major Deviations. If, at the PMM (as set forth in Section 2.6.2), IDC
identifies that either (i) the projected Total TDD Project Cost will
exceed the then-current TDD Project Budget by ten percent (10%), or
(ii) the projected TDD Project Completion date shall exceed the TDD
Project Schedule by more than four months ("Major Deviation"), the
Program Managers will devise a course of action to properly deal
address the causes for such Major Deviation, and a
8
meeting of the Contract Review Committee will be promptly convened.
The Contract Review Committee will review the proposal made by the
Program Managers for appropriate adjustments to the Work Plans and
Specifications and/or the TDD Project Budget or TDD Project Schedule
as set forth in Section 2.6.3.
2.7.4. IDC Penalty. The TDD Project is a research and development project,
with the attendant risks and uncertainties as regards, among other
things, schedule, cost and final results. As a result, the parties
understand that, IDC may not be able to complete the TDD Project in
accordance with the TDD Project Budget or TDD Project Schedule
adopted by the parties, and that IDC will require flexibility in
timing and cost estimates for the TDD Project. Notwithstanding the
foregoing, but subject to 2.7.5, if a Major Deviation occurs that
(i) was not caused by Nokia, (ii) was not the result of changes to
the Work Plans and Specifications approved at the PMM or by the
Contract Review Committee, (iii) cannot be attributed to the
inherent risks of R&D projects, or (iv) cannot be attributed to
situations or influences beyond the reasonable control of IDC, such
situations beyond IDC's control including without limitation changes
in Third Generation, shortage of qualified engineering resources
arising from changed conditions (as compared to those in effect as
of the Effective Date), failure of contractors selected by Nokia, or
failure of contractors selected by IDC (excluding contractors being
used to supplement IDC's internal work force) unless such failure is
solely attributable to IDC's failure to use commercially accepted
practices in managing such contractor, ("IDC-Caused Major
Deviation"), the parties agree that, subject to Nokia's rights to
terminate or reduce the TDD Project work scope, the Work Plans and
Specifications, TDD Project Budget, and/or TDD Project Schedule
shall be revised by mutual agreement of the parties, such approval
not to be unreasonably withheld or delayed, to properly address the
causes or causes for the Major Deviation. Nokia shall have the
burden of proving that a delay was an IDC-Caused Major Deviation.
Thereafter, if another IDC-Caused Major Deviation occurs without
PROPRIETARY INFORMATION
there having been an intervening approved modification to the Work
Plans and Specifications, TDD Project Schedule or TDD Project Budget
for other than IDC-Caused Major Deviations ("Intervening Change"),
[**]. The Contract Review Committee will also make appropriate
changes to the Work Plans and Specifications, TDD Project Budget,
and/or TDD Project Schedule to properly address the IDC-Caused Major
Deviation. In the event of (i) a subsequent IDC-Caused Deviation as
regards such revised TDD Project Budget or TDD Project Schedule,
without Intervening Change, or (ii) two consecutive IDC-Caused
Deviations as regards a future adopted TDD Project Budget or TDD
Schedule, [**]
2.7.5 No Cumulative Remedies.[**], as set forth in Section 2.7.4, Nokia may
alternatively pursue the termination of the agreement pursuant to the
provisions of Section 9.3. Nokia shall not be permitted to avail
itself to both [**] and the remedies available under contract and law
for termination for breach with regard to the same IDC-Caused Major
Deviation.
2.8 No Solicitation. During the term of the TDD Project and for one year
thereafter or for one year after the termination of this Agreement, the
parties' employees engaged in the TDD Project shall not actively seek to
employ, or make offers of employment to, either directly or indirectly, the
engineering, technical, or project-related supervisory personnel of the
other party engaged in the TDD Project without the prior written consent of
such other party; and further, irrespective of how such employment is
sought, neither party shall directly or indirectly actively seek to employ,
or make offers of employment to the engineering personnel occupying top two
organizational tiers on the TDD Project. IDC shall inform its employees of
such restrictions. The parties
** Material has been omitted and filed separately with the Commission.
10
PROPRIETARY INFORMATION
acknowledge that, in the event of a breach of this agreement, the affected
party will not have an adequate remedy at law. Therefore, in such event,
the affected party shall have the right, in addition to other rights and
remedies in law or in equity, to have the provision of this section
specifically enforced and to obtain a temporary or permanent injunction or
order prohibiting any of the breaching party from employing any individual
of the affected party in violation of this Section.
ARTICLE 3 - STANDARDIZATION ASSISTANCE
3.1 Standardization Commitment. Nokia will take an active role, with the
assistance of IDC, in promoting the adoption by the European Technical
Standards Institute ("ETSI"), the Telecommunications Industry Association
("TIA") and International Telecommunication Union ("ITU") as well as other
standard setting groups where Nokia has influence, of wireless
communications standards for Third Generation applications embodying key
components of TDD.
3.2 Standardization Efforts. Nokia and IDC will undertake the standardization
activities in accordance with the Work Plan and Specifications, such
efforts to include as minimum:
3.2.1 Nokia acting as the lead promoter of the TDD for inclusion of
technically and commercially desirable features in appropriate
telecommunications standards within its regular standardization
activities;
3.2.2 Nokia and IDC attending appropriate meetings and workshops,
preparing submittals and presentations, either jointly or
independently, regarding TDD;
3.2.3 IDC performing patent clearance reviews with regard to submittals
and presentations regarding TDD; and
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PROPRIETARY INFORMATION
3.2.4 IDC and Nokia keeping each other informed as to standardization
strategies, efforts and the like regarding TDD.
3.3 Submittals. Prior to making a submission regarding specifically TDD
Technology to any standard setting body during the term of the TDD Project,
the submitting party shall first provide a copy of the proposed submission
to the other parties for review and comment in respect of the technical
quality and commercial feasibility of the proposed submission. All comments
shall be considered by the submitting party in good faith, and the parties
will use all reasonable efforts to resolve any disagreements as regards the
content of the submission including, if necessary, submitting the matter to
a Contract Review Meeting for discussion. Notwithstanding the foregoing, a
party, after complying with the foregoing provisions, may make the
submission without the consent of the other party provided that the
submission does not include the name of the dissenting party and that, in
any event, the submitting party has complied with the Proprietary
Information provisions of the Master Agreement, including but not limited
to patent bar review.
3.4 Notification. Notwithstanding the provisions of Section 3.1 and 3.2, Nokia
and/or IDC may find it desirable to support other or multiple technologies
for inclusion in Third Generation. Nokia and IDC will use reasonable
efforts to keep each other informed on a regular basis as to each party's
standardization strategy.
3.5 Complience with IPR Rules of Relevant Standardization Bodies. Both parties
undertake to comply with the IPR Rules of the relevant standardization
bodies in respect of the submissions made to the TDD standardization and
undertake to license under the rules of such bodies.
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ARTICLE 4 - INTELLECTUAL PROPERTY RIGHTS
4.1 Ownership
4.1.1 Existing Patents, Copyrights and Know-How. InterDigital shall
continue to own its Existing TDD Technology and Existing Patents.
Nokia shall continue to own its Existing TDD Technology and
Existing Patents.
4.1.2 Developed Technology. Except as provided in Section 4.1.3,
InterDigital will own the Developed TDD Technology and Developed
Patents created by InterDigital, and Nokia will own any Developed
TDD Technology and Developed Patents created by Nokia. Except as
provided in Section 4.1.3, Developed TDD Technology jointly
developed by the parties shall be jointly owned by the parties with
the respective rights and responsibilities of the parties as to
jointly held Developed Patents being as set forth in Section 4.4.
4.1.3 Lab-Created Technology. Notwithstanding any provision herein to the
contrary, InterDigital will be the exclusive owner of all Developed
TDD Technology and Developed Patents created or invented solely by
a Laboratory Person(s). For the purpose of this Section, Laboratory
Person(s) shall mean (i) those InterDigital personnel (including
contractors, subcontractors, or consultants hired by InterDigital)
working principally at the IDC research and development
laboratories, and (ii) any Nokia personnel (including contractors,
subcontractors, or consultants hired by Nokia) assigned principally
to work at the IDC research and development laboratories, including
any such person for ninety days after the completion of such
assignment. Nokia will promptly execute, or cause its employees,
consultants and/or subcontractors, to execute, at Nokia's sole
expense, all appropriate assignments and other documents necessary
to accomplish or acknowledge IDC and/or ITC's ownership of
intellectual property consistent with this Section 4.1.3.
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4.2 ITC and IDC License Grants.
4.2.1 InterDigital Copyright and Know-How License Grant. InterDigital
hereby grants to the Nokia Group a non-exclusive, non-transferable,
personal, worldwide, royalty-free license under InterDigital
Licensed TDD Technology (including all related TDD Technical
Information as a result of the TDD Proejct) and Developed Patents,
to design, develop, manufacture and have manufactured (if
substantially designed by Nokia), market, sell, distribute and use
Subscriber Units and Infrastructure. The licenses granted pursuant
to this Section shall exclude any rights to sublicense, or any
rights to design, develop, manufacture and have manufactured,
market, sell and distribute BCDMA Products.
4.2.2 Technically Necessary TDD Patents. To the extent not covered by
Section above, IDC and ITC shall grant, and they shall cause any of
their Affiliates to grant, to the Nokia Group a non-exclusive,
non-transferable, personal, worldwide, royalty-free license to
design, develop, manufacture and have manufactured (if
substantially designed by Nokia), market, sell, distribute and use
TDD Products under (i) the InterDigital TDD Patents, and (ii) those
InterDigital Patents which would otherwise necessarily be infringed
when complying with any TDD standard for Third Generation;
provided, however, that such license shall only be with respect to
that portion of the TDD Product performing TDD functionality and
shall not apply to any non-TDD portion (e.g., FDD, GSM, etc) of a
TDD Product.
4.2.3 Components. The grant above shall not include, by implication or
otherwise, any license for components, except when used solely as a
part and within the licensed products defined above.
4.2.4 IDC Trademark License Grant. At the request of Nokia, IDC shall
grant Nokia and its affiliates a non-exclusive, non-transferable,
personal, world-
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wide, royalty-free license to use the TDD Trademarks in conjunction
with Subscriber Units and Infrastructure employing TDD, such
license to be in accordance with standard trademark license terms
as to maintenance of quality, and recognition of InterDigital
trademark ownership.
4.3 Nokia License Grants.
4.3.1 Nokia Grant of License. Nokia hereby grants to IDC and its
Affiliates a nonexclusive, personal, world-wide, royalty-free
license under the Developed Patents and Nokia Licensed TDD
Technology (including all related TDD Technical Information as a
result of the TDD Project) to design, develop, manufacture and have
manufactured (if substantially designed by InterDigital), market,
sell and distribute Subscriber Units and Infrastructure. The above
license shall include the right to grant sublicenses under the
Nokia Licensed TDD Technology but not under the Developed Patents
owned solely by Nokia.
4.3.2 Technically Necessary TDD Patents. To the extent not covered by
Section 4.3.1 above, Nokia shall grant, and it shall cause any of
its Affiliates to grant, to IDC and its Affiliates a non-exclusive,
non-transferable, personal, worldwide, royalty-free license to
design, develop, manufacture and have manufactured (if
substantially designed by InterDigital), market, sell, distribute
and use TDD Products under (i) the Nokia TDD Patents, and (ii)
those Nokia Group Patents which would otherwise necessarily be
infringed when complying with any TDD standard for Third
Generation; provided, however, that such license shall only be with
respect to that portion of the TDD Product performing TDD
functionality and shall not apply to any non-TDD portion (e.g.,
FDD, GSM, etc) of a TDD Product.
4.3.3 Components. [**]
** Material has been omitted and filed separately with the
Commission.
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4.3.4 Nokia Non-Assertion. Nokia shall not assert (and shall ensure that its
Affiliates do not assert) against IDC or its Affiliates any claims for
infringement of the Nokia Group Patents regarding IDC's or its
Affiliates' design, manufacture, have made, distribution, sale or use
of TDD ASICs or modems. In addition, Nokia shall not assert (and shall
ensure that its Affiliates do not assert) any claims of infringement
of the Nokia TDD Patents against (i) any purchaser of TDD ASICs or
modems from InterDigital regarding the use of such TDD ASICs or modems
in the TDD Products by such purchaser, or (ii) any TDD Licensee with
regard to the use of the TDD Technology in TDD Products by such TDD
Licensee; provided, however, that, with regard to (i) and (ii) such
non-assertion shall not apply as to any such purchaser or TDD Licensee
that asserts its Patents against the Nokia Group.
4.4 Jointly Developed Patent Rights.
4.4.1 ITC shall have the primary responsibility for (a) preparing and filing
applications in the United States and other countries for all jointly
Developed Patents, (b) pursuing the issuance of such Patents, and (c)
maintaining such patents after issuance. ITC, in performing such
obligations, shall provide Nokia with copies of all material
correspondence with the U.S. Patent Office and any foreign counterpart
thereof concerning such Patents, and shall consult at regular
intervals with Nokia concerning the same. If ITC elects not to file or
prosecute a patent application, or maintain such a patent after
issuance, then Nokia may undertake such actions at its cost ("Nokia
Controlled Patent"). ITC will use reasonable efforts to provide Nokia
with adequate notice so as not to materially prejudice Nokia's rights
as regards such patent applications or patents.
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4.4.2 Nokia and its Affiliates shall have the unrestricted right to use or
have used, for itself or its Affiliates, the inventions claimed under
such jointly owned Developed Patents. In addition, to the extent that
Nokia is sharing in the cost of patent filing, prosecution and
maintenance, Nokia shall have the right under the jointly owned
Developed Patents to grant sublicenses to any party, in any field, for
any purpose. Nokia shall also have the right under Nokia Controlled
Patents to use such Patents in any manner, and to grant sublicenses to
any party, in any field, for any purpose.
4.4.3 IDC and its Affiliates shall have the unrestricted right to use or
have used, for itself or its Affiliates, the inventions claimed under
such jointly owned Developed Patents. In addition, to the extent that
ITC is sharing in the cost of patent filing, prosecution and
maintenance, ITC shall have the right under the jointly owned
Developed Patents to grant sublicenses to any party, in any field, for
any purpose.
4.4.4 The parties agree that all attorneys fees and other out-of-pocket
expenses reasonably incurred by the parties in applying for,
maintaining and defending (as regards patent opposition proceedings
but not Declaratory Judgment actions) the jointly owned Developed
Patents shall be shared equally by the parties. In addition, the
parties will consult with each other prior to commencing any
litigation over infringement of jointly owned Developed Patents. The
parties will share in the recoveries of any such lawsuit in proportion
to the costs borne by each party in such lawsuit. Without the prior
written consent of the other party, a party that has not paid in a
timely manner for the filing, prosecution and maintenance of a jointly
owned Developed Patent shall not be permitted to commence litigation
over such patent or to share in any recoveries regarding such patent.
4.4.5 Each party agrees, at its own expense, to provide reasonable
cooperation to the other party in the application for and maintenance
of the jointly
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Developed Patents. Without limiting the foregoing, each party, at
the other party's reasonable request, shall execute (or cause its
employees to execute) all applications for jointly Developed
patents and such other instruments as may be necessary to apply
for and maintain the jointly Developed Patents. Each party hereto
grants to the other party a limited power of attorney until the
expiration of the last to expire of the jointly owned Developed
Patent to execute such applications and other documents on the
first party's behalf and to the extent the first party is unable
or unwilling to execute the same upon second party's reasonable
request.
4.5 Patent Filing Coordination. Within sixty (60) days after the end of
each calendar quarter, each party shall submit to the other party a
summary of the patent application flings made during such quarter for
inventions related to TDD Project. Such summary shall provide an
abstract of the invention, the inventor(s), and the independent claims.
Each party shall have sixty (60) days to provide comments to the other
party as regards inventorship. In the event of a dispute over
inventorship or ownership, the parties shall engage an independent
patent lawyer, acceptable to both parties, to resolve the dispute. Such
resolution shall be final and binding absent material new facts that
affect inventorship.
4.6 Certain Acknowledgments and Representations. Each party represents that
it fully understands and willingly accepts the allocation of
intellectual property rights as set forth herein. Each party further
acknowledges that the patents covering the inventions licensed pursuant
to this Agreement are not perpetual, and that various Patents may
expire during the term of this Agreement. Each party represents and
acknowledges that all allocations of intellectual property rights set
forth in this Agreement, as well as the duration of the patents
covering such intellectual property rights, have been taken into
account in the negotiation of the economic terms set forth in this
Agreement.
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4.7 Additional Limitations and Conditions of the License Grant. The license
grants of this Article 4 are subject to the following conditions:
4.7.1 As used in Article 4, Infrastructure and Subscriber Units shall
mean Subscriber Units and Infrastructure designed by, or for, the
licensed party and which are sold by the licensed party or its
Affiliates as fully completed units to its customers, including but
not limited to end-users, operators or distributors (but not other
telecommunications equipment manufacturers). The Nokia Group shall
have no right to transfer licenses under the IDC Licensed TDD
Technology or InterDigital Patents through the sale of ASICs,
software or other parts to third parties; provided, however, the
foregoing limitation will not limit the Nokia Group's right to
provide spare parts and enhancements for licensed Subscriber Units
and Infrastructure. In addition, neither IDC nor its Affiliates
shall have no right to transfer licenses under the Nokia Group
Patents through the sale of ASICs, software or other parts to third
parties; provided, however, the foregoing limitation will not limit
the right of IDC or its Affiliates to provide spare parts and
enhancements for licensed Subscriber Units and Infrastructure.
4.7.2 Subject to the provisions of Section 4.2.2, 4.3.2, 4.3.4, and
4.7.1, third party purchasers of Subscriber Units and
Infrastructure licensed hereunder and purchased directly or
indirectly from, respectively, Nokia or its Affiliates on the one
hand or, IDC or its Affiliates or Licensees on the other hand,
shall have the right to use and sell such purchased products for
their normal or expected uses without further obligation under
InterDigital TDD Patents, InterDigital Licensed TDD Technology,
Nokia TDD Patents and Nokia Licensed TDD Technology licensed
hereunder.
4.7.3 Notwithstanding the terms of Section 4.7.2, no license is granted
by estoppel or implication under the Existing or Developed Patents
to any purchaser of Subscriber Units (which are licensed hereunder)
to make, use or sell
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Infrastructure not licensed hereunder; and no license is granted by
estoppel or implication to any third party purchaser of
Infrastructure Units (which are licensed hereunder) to make, use or
sell Subscriber Units not licensed hereunder. Any claims that ITC
or Nokia may have against a third party manufacturer that such
units contributorily infringe or induce infringement of any claims
of the Existing or Developed Patents are expressly reserved by ITC
and Nokia hereunder; provided, however that in no event shall Nokia
or IDC be held liable for contributory infringement or inducing
infringement (or under any similar theory of liability) of Existing
or Developed Patents licensed in this Agreement based on the uses
made of Infrastructure and Subscriber Units licensed hereunder by
direct or indirect purchasers, regardless of the manner in which
such products are sold, marketed or promoted by Nokia or IDC.
4.8 Cooperation in Patent Infringement Assessment/Litigation.
4.8.1 Cooperation. As part of the TDD Project, InterDigital and Nokia
will evaluate, on a regular basis, the applicability of third party
Patents and patent applications to the TDD Technology, and take
appropriate action to address any potential infringement issues.
Notwithstanding the foregoing, neither InterDigital nor Nokia shall
be required to undertake any TDD Project activity to the extent
that, in the reasonable opinion of patent counsel for either party,
the TDD Technology or may infringe, or otherwise create a potential
for liability, under third party patent rights.
4.8.2 Notice. To the extent known, each party shall provide timely notice
to the other party as to any theft or misappropriation of any
Know-How licensed hereunder.
4.8.3 Non-Inclusion. Unless otherwise agreed or known by Nokia, and
subject to the provisions of Section 4.8.1, IDC shall not knowingly
and willingly, and
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based on actual knowledge of relevant third party Patents or
copyrights, nonetheless include as part of the Developed TDD
Technology Know-How any know-how that, when used by Nokia in its
intended manner would infringe such third party Patents or
copyrights. This Section shall not apply to Patents or copyrights
that are essential to the implementation of Third Generation.
4.8.4 Limited IPR Indemnity. To the extent, and only to the extent, that
IDC (i) is grossly negligent in the performance of patent clearance
reviews anticipated by the Work Plans and Specifications, or (ii)
withholds from Nokia reasonable and considered conclusions by
counsel that implementation of the TDD Technology would likely
infringe Patents held by third parties, ((i) and (ii) excluding
patents that are essential to Third Generation for which no
indemnity shall apply). IDC shall defend, indemnify and hold Nokia
and its Affiliates harmless against infringement of third party
Patent rights by the TDD Technology as follows. Such indemnity
shall be limited to 50% of the reasonable costs and damages
associated with such claims, capped at $1 million for each claim
asserted and in no event greater than $10 million in the aggregate.
In addition, such indemnity shall only apply only if Nokia (i)
completes the TDD Project with IDC, (ii) promptly informs IDC in
writing of any threatened infringement action against Nokia
regarding TDD Technology (iii) permits IDC to actively participate
in the defense of such suit, claim or proceeding, (iv) informs IDC
of any possible settlement, and (v) does not enter into any
settlement without the written consent of IDC, which consent shall
not be unreasonably withheld or delayed. IDC may, at its option,
supply non-infringing modification to the TDD Technology sufficient
to avoid the infringement. Notwithstanding anything in this
Agreement to the contrary, this indemnification obligation shall
apply only if the alleged infringement relates directly to the TDD
Technology provided to Nokia by IDC, and not any unintended
combination of such technology with technology provided by Nokia or
others
21
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4.9 InterDigital TDD Technology Licensing. Notwithstanding any provision in
this Agreement to the contrary, InterDigital's right to (i) market its
services and enter into agreements and transfer TDD Technology to TDD
Licensees, (ii) disclose Confidential Information developed in the TDD
Project, and (iii) permit laboratory visits by third parties, shall be
subject to the following restrictions:
4.9.1 Pre-Marketing. InterDigital may commence discussions with
prospective TDD Technology Licensees concerning non-confidential TDD
Technology commencing upon the earlier of July 1, 1999 or Nokia's
disclosure of the TDD development effort with InterDigital.
("Pre-Marketing Date").
4.9.2 Technical Marketing. InterDigital may commence discussions with
prospective IDC TDD Technology Licensees involving confidential TDD
Technology (on a summary, non-use, confidential basis), including
visits to the IDC research and development laboratories, commencing
three months after the Pre-Marketing Date.
4.9.3 TDD Technology Transfer. Commencing April 1, 2000, InterDigital may
provide TDD Licensees with access to Developed TDD Technology based
on a marketing plan to be adopted by the Contract Review Committee
at the first such meeting of such committee after the Effective
Date. Such plan shall be consistent with the following guidelines
(which the parties may change from time to time to address changed
circumstances, approval to any proposed changes to the guidelines
not to be unreasonably withheld or delayed):
(i) The transfer of TDD Technology may not occur earlier than
sixty (60) days after such technology has been delivered to
Nokia in final form
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PROPRIETARY INFORMATION
as part of a complete deliverable contemplated by the Work
Plans and Specifications;
(ii) In the case of IP blocks, the grace period shall be three (3)
months from testing and approval;
(iii) For ASIC samples, no grace period after testing and approval;
(iv) For ASIC volume delivers, the grace period shall be three (3)
months provided that Nokia has executed an agreement with
InterDigital for supply of ASICs in non di minimus quantities;
and
(v) IDC's arrangements with TDD Licensees may not interfere with
the TDD Project or require changes to the content, schedule or
cost of the TDD Project without Nokia's approval.
ARTICLE 5 - COMPENSATION
5.1 Compensation. IDC will be paid for the TDD Development Project in
accordance with the Compensation Schedule set out in Exhibit 2. Nokia's
commitment hereunder shall only cover costs and fees which are incurred in
accordance with this Agreement, the Work Plans and Specifications, and the
Compensation Schedule, or future amendments or revisions thereto.
ARTICLE 6 - TDD PRODUCT PURCHASES
6.1 IDC Purchase. IDC is hereby granted the option to buy from Nokia generally
available standard single-mode TDD Products for sale in those markets for
which Nokia opted to allow non-exclusive distribution by third parties,
such sales to be on the nondiscriminatory terms and conditions as compared
to those customarily given by Nokia to similarly situated wholesale
customers; provided, however, that nothing in this Section shall obligate
Nokia to develop such TDD Products.
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PROPRIETARY INFORMATION
ARTICLE 7 - TDD ASIC SALES
7.1 Joint ASIC Sales. As part of the TDD Project, IDC and Nokia shall explore
the possibility of the joint development, manufacture and sale of
single-mode TDD ASICs. If Nokia determines that such a cooperative
manufacture and sales effort has commercial merit, Nokia shall first
negotiate such a cooperative alliance with InterDigital, which negotiation
shall be undertaken in good faith.
ARTICLE 8 - WARRANTIES; LIMITATION OF LIABILITIES
8.1 Title Warranty. IDC and ITC, as applicable, represent and warrant that, to
the best of their knowledge, they have sufficient right, title and interest
in the InterDigital Licensed TDD Technology and TDD Trademarks to grant the
licenses contemplated by this Agreement. Nokia represents and warrants
that, to the best of its knowledge, it has sufficient right, title and
interest in the Nokia Licensed TDD Technology to grant the licenses
contemplated by this Agreement.
8.2 Limitation of Liability. Neither of the parties hereto shall be liable to
the other party in tort, contract or otherwise for any consequential,
incidental, exemplary, punitive, indirect or special damages of any kind,
including, but not by way of limitation, damages for loss of profit by IDC,
ITC or Nokia, even if the possibility of such damages was disclosed to, or
could reasonably have been foreseen by, the injuring party. In addition,
IDC's and Nokia's total limit of liability under this Agreement, regardless
of claim or series of claims, shall not exceed fifty percent (50%) of the
amount paid to IDC under Article 5 hereto; provided, however, that the
fifty percent limitation shall not apply to Nokia's obligation to pay IDC
for services as required under Article 5, or either party's obligation
hereunder to reimburse the other for costs.
8.3 Limitation of Warranties. THE PARTIES MAKE NO WARRANTIES EXPRESSED OR
IMPLIED, INCLUDING WITHOUT LIMITATION, IMPLIED WARRANTIES OF
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PROPRIETARY INFORMATION
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WARRANTY AS TO PATENT
NON-INFRINGEMENT, OTHER THAN THE WARRANTIES SET FORTH IN THIS ARTICLE.
ARTICLE 9 - EFFECTIVE DATE; TERM; TERMINATION
9.1 Effective Date. The Effective Date of this Agreement shall be as set forth
in the Master Agreement.
9.2 Term. The term of this Agreement shall be perpetual, unless terminated as
provided herein.
9.3 Termination for Cause. A party may terminate this Agreement by written
notice to take effect immediately if the other party is in material breach
of this Agreement, and (i) the first Party previously notified the
breaching party in writing of the default and such other party's intention
to terminate the agreement, and (ii) the breaching party has failed to cure
its breach within at least sixty (60) days after such notice or to make
substantial progress towards curing such default or, in the case the breach
consists of the breaching party's failure to make payments due hereunder,
fails to cure such breach within at least thirty (30) days of such notice.
9.4 Termination for Convenience. Nokia may terminate this Agreement for
convenience upon forty-five (45) days advance written notice to IDC. The
date of termination shall be forty-five (45) days after the date of Nokia's
notice to IDC. IDC shall be paid for all services rendered by IDC under and
in accordance with this Agreement up to and including the termination date.
In addition, to the extent that IDC does not continue the TDD Project
without Nokia, IDC shall be reimbursed, as a full and complete compensation
for the costs incurred by IDC as a consequence of the short termination
period, for the following documented out-of-pocket costs, arising due to
such project termination, such charges not to exceed [**] U.S.
DOLLARS ($US [**]), and provided further that IDC shall undertake
appropriate and
** Material has been omitted and filed separately with the Commission.
25
PROPRIETARY INFORMATION
commercially reasonable actions, including commencing the orderly shutdown
of the TDD Project promptly after receipt of the notice of termination from
Nokia, to minimize the termination liability costs to be paid by Nokia
hereunder,:
(a) actual cancellation charges for equipment ordered prior to the notice
of termination pursuant to the Work Plans and Specifications except
that Nokia shall, at its option, be entitled to purchase any such
equipment by paying the actual amount due after the termination date;
(b) actual cancellation charges under consulting and engineering services
agreements engaged pursuant to the Work Plans and Specifications and
executed prior to the notice of termination;
(c) actual cancellation charges on equipment leases necessary for the TDD
Project and entered into prior to the notice of termination except
that Nokia shall, at its opition, be entitled to assign any leases to
it to the extent accepted by the xxxxxx;
(d) actual and documented severance benefits for IDC employees hired after
the Effective Date and to be laid-off as a result of the termination
of the TDD Project, such benefit not to exceed [**] [**] weeks of
pay per employee, at [**] of the rates set forth in Exhibit 2;
(e) one-hundred percent (100%) of the laboratory and dedicated office
build-out, if such termination occurs in 1999, and [**] percent [**]
if such termination occurs in 2000;
(f) other actual and out-of pocket costs arising from such termination and
approved by Nokia, such approval not to be unreasonably withheld or
delayed.
9.5 Rights Upon Termination. Nokia shall be entitled to receive any TDD
Technical Information developed up to the termination date. The licenses
granted under Sections 4.2. and 4.3 shall survive termination of this
Agreement as to the results conceived as part of the TDD Project. To the
extent any of the Developed Patents are jointly owned, the provisions of
Section 4.4 shall survive termination as regards such Developed
** Material has been omitted and filed separately with the Commission.
26
PROPRIETARY INFORMATION
Patents. In addition, the following provisions will survive termination of
this Agreement: Section 2.4(but only as to Technical Information developed
prior to the date of termination), Section 2.8, Section 4.1.1, Section
4.1.2, Sections 4.1.3, 4.2.2 and 4.3.2 (but only as to those Patent claims
necessary for the implementation of the TDD Technology developed prior to
the date of termination), Section 8.2, Section 8.3, and Section 9.4.
ARTICLE 10 - MISCELLANEOUS
10.1 Incorporation by Reference. All of the terms and conditions of the Master
Agreement are hereby incorporated herein by reference.
10.2 Exhibits. All Exhibits and other attachments to this Agreement which are
referred to herein or therein are hereby incorporated in and made a part of
this Agreement.
10.3 Entire Agreement. This Agreement contains the complete and final agreement
between the parties, and supersedes all previous understandings relating to
the subject matter hereof and thereof whether oral or written. This
Agreement may only be modified by a written agreement signed by duly
authorized representatives of the parties.
10.4 Counterparts; Faxed Signatures. This Agreement may be executed by the
parties in counterparts, each of which shall be deemed an original of the
applicable document. Signatures provided by facsimile or other electronic
means by any party shall be valid and enforceable upon delivery to the
other parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives.
INTERDIGITAL COMMUNICATIONS CORPORATION
BY: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
Date: January 29, 1999
INTERDIGITAL TECHNOLOGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
Date: January 29, 1999
NOKIA CORPORATION
By: /s/ [**] [**]
----------------------------------- -----------------------------------
Name: [**] Name: [**]
Title: SVP, Product Creation Title: V.P. Licensing
Date: January 28, 1999 Date: January 28, 1999
** Material has been omitted and filed separately with the Commission.
28
Exhibit 1:
Program Plan, UTRA -TDD Mode Interdigital - Nokia Strategic Initiative
December 22, 1998
[**]
** Material has been omitted and filed separately with the Commission
29
PROPRIETARY INFORMATION
Exhibit 2
COMPENSATION
30
DRAFT
COMPENSATION SCHEDULE
IDC will be paid by Nokia for IDC's Labor Cost and Expenses. The determination
of those amounts is set forth below.
1. Labor Cost. IDC will be paid for the efforts of the Direct Labor involved
in the TDD Project. Direct Labor will be those engineering, technical,
software and other non-administrative or non-clerical personnel directly
involved in the performance of the Work Plans and Specifications. Except to
the extent of direct charges to the project by the individuals listed
below, the indirect involvement of management of IDC shall not be
separately recoverable. Direct Labor shall also include Patent Counsel
assigned for patent clearance and related issues according to Work Plan.
The reimbursement for Direct Labor will be determined based on the Hours
Charged times the applicable Billing Rate, where the Billable Hours shall
be the hours charged to the TDD Project for the Billing Period (see below).
Unless separately agreed, compensation for travel time shall be at one-half
of the actual time of travel, capped at four hours per one-way trip. The
Billing Rate is the applicable per hour rate set forth below:
------------------------------------------------------------------------------------------------------------------
Direct Charge Category Per Hour Rate
------------------------------------------------------
1999 2000 2001 2002 2003
------------------------------------------------------------------------------------------------------------------
Engineering Aides, Technicians, Technical Writers, [**] [**] [**] [**] [**]
Documentation Supervisors
------------------------------------------------------------------------------------------------------------------
Designers, Engineers, Project Administrators, Directors, [**] [**] [**] [**] [**]
Documentation Managers
------------------------------------------------------------------------------------------------------------------
Patent Counsel, Chief Technology Officer, General Manager [**] [**] [**] [**] [**]
------------------------------------------------------------------------------------------------------------------
2. Expenses. IDC shall be reimbursed for its expenses (excluding Incidental
Expenses) incurred related to the TDD Project, as set forth below.
A. Reimbursable Expense.
i. [**] IDC's Program Manager shall have authority to approve the
purchase of materials and equipment necessary for the
implementation of the Work Plans and Specifications such
purchases not exceeding on an individual basis or, if a series of
similar purchases is involved, in aggregate $10,000. Any purchase
in excess of $10,000 shall be approved by Nokia in advance in
writing. IDC will be reimbursed for actual, out-of-pocket expense
for such materials and equipment.
ii. Consultants. Nokia will reimburse IDC for expenses incurred for
the services of consultants engaged by IDC for the implementation
of the
** Material has been omitted and filed separately with the Commission
Compensation Schedule
Page 2
Work Plans and Specifications. The reimbursable expenses for
consultants shall be the greater of (i) the hours charged times
the Per Hour Rate for engineers, set forth above, or (ii) the
actual Consultant charge for the same period.
iii. Outside Services. Nokia will reimburse IDC for its costs related
to outside engineering, technical and other service companies
engaged for the performance of the Work Plans and Specifications.
Prior to any engagement of an outside services company for which
the estimated cost of services over the term of the engagement
will exceed $10,000, IDC shall first notify Nokia in writing with
the reasons for the engagement and the estimated cost, and Nokia
shall provide written approval not to be unreasonably withheld or
delayed. The reimbursable expense shall be the amount actually
charged to IDC by such outside service company.
iv. Travel. Nokia will reimburse IDC for its travel, hotel costs
(including only the standard room rate, business center charges
for TDD-Project related work provided that Nokia or IDC
facilities are not readily available, plus tax but excluding any
other room charges) while travelling and a fixed amount of USD
[**] to cover living and related expenses incurred in the
performance of the Work Plans and Specifications. Unless
otherwise separately agreed, these expenses shall only be covered
for travelling to Project Management Meetings and Contract Review
Meetings and standardization meetings held outside the premises
of IDC. No administrative surcharge shall be applied to such
expenses. All IDC travel for the TDD Project shall comply with
IDC's corporate policies on travel and hotel, as amended from
time to time.
v. Other Expense. Nokia shall reimburse IDC for other costs incurred
in the implementation of the Work Plans and Specifications, such
other costs to include without limitation shipping and related
insurance costs, technical data costs (necessary reports, patent
searches, etc.), personnel training costs necessary for the
implementation of the Work Plans and Specification (and
pre-approved by Nokia), and TDD Project related license, user or
application fees. Nokia shall have prior approval rights over any
expense greater than $10,000, which approval shall not be
unreasonably withheld or delayed.
B. Incidental Expense. IDC shall not be directly reimbursed for the
incidental expense related to the implementation of the Work Plan and
Specifications. Incidental expense shall include stationery supplies,
internal xeroxing costs, utilities, telephone, basic internet access,
etc.
C. Title to Equipment. All equipment shall be purchased in the name of
IDC and shall be the property of IDC; provided, however, that title to
any equipment or
** Material has been omitted and filed separately with the Commission
Compensation Schedule
Page 3
components shipped to Nokia as required under the Work Plans and
Specifications shall transfer to Nokia in accordance with the terms of
the applicable shipping procedures (FOB, FCA, etc.).
D. Billing/Reimbursement. On or before the last day of each month, IDC
shall remit a monthly invoice to Nokia for services rendered for the
previous month (the "Billing Period") along with a monthly report in
accordance with Section 2.6.2 of the TDD Development Agreement,
detailing with the break down of each of the items as to the level of
day/persons involved/ Billable Hours in respect of the following
categories: (i) the Billable Hours charged for the Billing Period,
(ii) the total Direct Labor cost, (iii) a listing of the Expenses and
the suitable backup documentation for expenses. Such invoice shall be
paid by Nokia within 30 days of receipt.
