1
NOTE: The symbol ***** indicates where confidential portions have been
omitted and filed separately with the Securities and Exchange
Commission.
COOPERATION AGREEMENT
This Cooperation Agreement has been entered into as of this 3lst day of October
1996,
By and between
SAT (Societe Anonyme de Telecommunications)
Networks and Telecommunications Division
00 xxx Xxxx
X.X. 000
00000 XXXXX CEDEX 13
FRANCE
hereinafter referred to as "SAT"
and
INNOVA
Gateway North, Building 2, 0000 Xxxxx 000xx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx, 00000
XXX
hereinafter referred to as "INNOVA"
WITNESSETH
WHEREAS since October 1992, the parties have led a fruitful cooperation in
relation with the development, manufacture and commercialization of digital high
frequency radiolinks, starting from INNOVA's design known as XP3 design.
WHEREAS INNOVA, on the basis of a new design, known as "XP4 design" is engaged
in the process of developing digital high frequency radio links in the frequency
range 13/38 GHz with bit rates 2 x 2, 4 x 2 and 8 x 2 Mbit/s.
WHEREAS SAT has completed the design or QPSK and 16-QAM modems operating a( 34
Mbps.
WHEREAS the Parties wish now to pursue their cooperation with the intention to
make available to both of them a comprehensive range of high frequency
radiolinks and - to that effect - enter into a cooperation agreement providing
for coordinated development of products and grant of distribution fights and
manufacturing licenses by each Party to the other to manufacture and/or
commercialize products of said range when developed.
NOW THEREFORE, in consideration of the aforesaid premises and initial
covenants expressed in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by SAT and INNOVA. the Parties hereto agree as follows:
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ARTICLE I - DEFINITTONS
Capitalized terms used herein have the following meanings:
1.1 "Products" shall mean die digital high frequency radio links (comprised
of a SIU unit, an ARU unit and an antenna), as well as the Hitless
Feature and the Supervisory System, whose development is complete or is
to be achieved hereunder by either of the parties with frequency ranges
and with bit rates as defined in Annex 1, and with the specifications;
of Innova developed Products described in Annex 2 of the Master
Purchase Agreement, and the specifications of SAT developed Products
described in Annex 5.
1.2 "SIU unit" shall mean the indoor unit of each Product.
1.3 "ARU unit" shall mean the outdoor unit of each Product (excluding
antenna).
1.4 "Hitless Feature" shall mean the hitless protection function to be
developed by SAT hereunder for enhancing a number of the Products as
listed in Annex 1, the specifications of which are set forth in Annex
5.
1.5 "Supervisory System" shall mean the software to be developed by SAT
hereunder for the purpose of allowing management of a network composed
of Products, the specifications of which are set forth in Annex 5.
1.6 "Development Program" shall mean the obligations of each of the parties
to exert their commercially reasonable efforts toward achieving or
completing the respective development of tasks assigned to them under
Annex I as to the Products, the Hitless Feature and the Supervisory
System.
1.7 "IPR" (Intellectual Property Rights) shall mean patents, patent
applications registered or unregistered designs, copyrights and all
other intellectual property protection (other than trademarks) wherever
in the world enforceable.
1.8 "Foreground Technology" shall mean all technical information generated
by the parties after the date of this Agreement pursuant to the
Development Program and all IPR issuing therefrom, pertaining to the
Products and Improvements thereto.
1.9 "Background Technology" shall mean any technical information, including
all IPR pertaining thereto existing at the date of this Agreement. that
is directly relevant to the Development Program but excluding any
Foreground Technology.
1.10 "INNOVA Developed Products" includes those Products as to which
development responsibility is assigned to INNOVA under Annex I
(excluding 13 GHz Products if INNOVA is released from responsibility
therefore under footnote 2 to Annex 1).
1.11 "SAT Developed Products" includes those Products as to which development
responsibility is assigned to SAT under Annex 1.
ARTICLE 2 - OBJECTIVES
The following objectives are the basis of the cooperation between the
Parties and shall govern the interpretation and implementation of the
terms of this Agreement:
(i) to reduce the investments required by each Party in research and
development and in setting up and maintaining commercial marketing and
distribution networks.
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(ii) to increase the sales of both Parties by enabling each Party to
add the other's range of Products to its own.
ARTICLE 3 - DEVELOPMENT PROGRAM
3.1 Each Party shall exert commercially reasonable efforts to complete the
development activities allocated to it in Annex I in accordance with
the Time Schedule set forth in the same Annex. Failure to comply with
the said Time Schedule and cost objectives shall not be deemed a breach
of or have any other consequences under this Agreement (except as
stated in Section 9.2(i)), provided the non-complying party actually
exerted commercially reasonable efforts to reach compliance.
3.2 In connection with their respective development activities under this
Agreement, the Parties shall, to the extent commercially reasonable,
endeavour to maximize compatibility and commonality in Product design
and component standardization and to adopt a common Product
architecture, common technological solutions and a common approach to
mechanical designs and standards to the end that Products will be
compatible with the different practices used in each Party's domestic
market.
3.3 SAT also agrees to assist INNOVA, at INNOVA's request, for the purpose
of optimizing the design of tile INNOVA Developed Products. preparing
their manufacturability and the incorporation of tile Hitless Feature,
by sending experts at INNOVA's request to INNOVA's location for periods
to be mutually agreed.
3.4 To insure maximum efficiency in carrying-out the Development Program
activities and facilitate the communication of relevant information and
experiences between them, tile efforts of the Parties will be guided
and coordinated through a Coordinating Committee which will be
organized and function as hereinafter provided in Article 8 below.
3.5 All development costs and expenses incurred by each party in performing
tasks allocated to it under tile Development Program shall be borne by
that Party, except that for experts sent by SAT in accordance with
paragraph 3.3 above, INNOVA shall reimburse SAT for expenses thus
incurred at cost (salaries, social charges, travel, lodging and
subsistence).
3.6 Quality-Assurances
(i) Audits:
Each party may at any reasonable time carry out QA audits in other
Party's and/or other Party subcontractor's facilities in order to
assess the conformance level of that Party to international Quality
Standards ISO 9001 and/or ISO 9002. The auditing Party shall give to
the other one reasonable prior notice of the dates oil which these
audits will take place. All audits and inspections shall be performed
in such a manner as not to delay (lie current work of the Audited
Party.
(ii) Design Evaluation and Control:
Verification of design prototypes in accordance with mutually agreed
specifications and test level will be accomplished through periodic
design reviews. These reviews will be held as needed and will be
attended by those functions necessary to adequately ensure design
compliance.
Prior to these reviews and not later than two (2) weeks before, the
Party in charge of the design will have made available the relevant
test reports to the other Party.
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ARTICLE 4 - OWNERSHIP OF TECHNOLOGY - RIGHT OF USE FOR DEVELOPMENT
Each Party will retain all IPR in its existing Background Technology
and in the Foreground Technology developed by that Party hereunder,
including the Improvements referred to in paragraph 6.5 below. Each
Party will also be entitled to ownership of all IPR in any Foreground
Technology developed jointly by the Parties hereunder with respect to
the Products.
To the extent necessary or useful for the performance of other Party's
obligations under the Development Program, each Party's Background
Technology and Foreground Technology shall be made available to such
other Party and such other Party is granted a temporary license to use
the same on a cost-free basis for the limited purpose of performance of
its obligations under the Development Program. With regard to the other
Party's use thereof for manufacturing purposes, provisions of Article 6
herebelow shall apply.
ARTICLE 5 - DISTRIBUTION RIGHTS
5.1 For each Product whose development is complete and manufacture started
by the Party to which its development is allocated by Annex I (in this
Article the "Supplying Party") said party hereby appoints the other
party (in this Article "the Purchasing Party") as its distributor as
follows :
SAT shall have (i) exclusive distribution rights to the Products in
SAT's exclusive territories (as defined below) and (ii) subject to
specific arrangements for U.K. described below, non exclusive
distribution rights to the Products in the rest of the world except
INNOVA's exclusive territories (as defined below).
SAT's exclusive territories include France (including XXX-XXX),
Andorra, Monaco, Hungary, Poland and Italy. Accordingly, INNOVA shall
not sell itself the Products and, to the extent it may legally do so,
shall not permit any reseller of Products, whether on an OEM, private
label or distribution basis to (i) advertise the Products or canvas or
solicit orders for the Products (ii) open branches for the supply
and/or support of the Products or (iii) maintain distribution depots
for the Products, in SAT's exclusive territories. INNOVA recognizes
SATs right to enter into distribution agreements for the Products with
third parties in non-exclusive territories.
INNOVA shall have (i) exclusive distribution rights to the Products in
INNOVA's exclusive territories (as defined below) and (ii) subject to
specific arrangements for U.K. described below, non exclusive
distribution rights to the Products in the rest of the world except
SAT's exclusive territories.
INNOVA's exclusive territories include USA, Canada. New-Zealand,
Australia and Mexico. Accordingly, SAT shall not sell itself the
Products and, to the extent it may legally do so, shall not permit any
reseller of Products, whether on an OEM. private label or distribution
basis to (i) advertise the Products or canvas or solicit orders for the
Products (ii) open branches for the supply and/or support of the
Products or (iii) maintain distribution depots for the Products, in
INNOVA's exclusive territories. SAT recognizes INNOVA's right to enter
into distribution agreements for the Products with third parties in
non-exclusive territories.
Specific arrangements for U.K.:
INNOVA retains the right to appoint its subsidiary "INNOVA Europe
Limited." as exclusive distributor of INNOVA developed Products in U.K.
but undertakes to cause "INNOVA Europe Limited." to supply, subject to
the terms and conditions or this Agreement taken as a whole, INNOVA
Developed Products on a non-exclusive basis to SAT as an authorized
reseller for U.K.
On its part, SAT does not grant INNOVA the right to distribute SAT
Developed Products in U.K. but undertakes to supply, subject to the
terms and conditions of this Agreement taken as a whole, SAT Developed
Products on a non-exclusive basis to "INNOVA Europe Limited." as an
authorized reseller for U.K.
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Provisions of Section 5.4. below as well as the pricing and other Wins
and conditions set forth in Annex 2 hereof shall apply to transactions
hereabove contemplated between SAT and "INNOVA Europe Limited."
5.2 Products to be supplied by the Supplying Party to the Purchasing Party
hereunder shall be supplied for a price (hereinafter "Transfer Price")
representing an agreed percentage of the market price (hereinafter
"Market Price") determined by the parties for each of the Products.
Annex 2 hereto sets forth the agreed percentages for calculating the
Transfer Price, based on the Market Price of such Product as mutually
determined by the Parties for the first twenty-four months after the
effective date of this Agreement. Thereafter for each successive period
of twelve: (12) months during the term of this Agreement and thirty
(30) days before expiration of the current period, the Parties shall
meet and review the available market data and determine in good faith
the Market Price of each Product applicable for the new twelve months
period. In addition, the Parties may agree to review the Transfer
Prices at any other time, but no earlier than twelve (12) months after
the effective date of this Agreement. The conclusions of each such
meeting shall be reduced to writing in the form of an amendment to this
Agreement concerning the Transfer Prices.
The Transfer Price for each Product is meant "CIP airport of final
destination" (Seattle or Paris airport as the case may be) according to
1990 Incoterms of the International Chamber of Commerce.
US dollar shall be the accounting, invoicing and payment currency for
all transactions effected under this Article.
5.3 Notwithstanding any other provisions of this Agreement, in no event
shall the Supplying Party grant to any reseller of Products sold by the
Supplying Party, whether on an OEM, private label or distribution
basis, pricing or other terms and conditions of purchase more favorable
than those granted to the Purchasing Party under like circumstances
without offering immediately those more favorable terms and conditions
as to subsequent transactions with the Purchasing Party.
5.4 The Purchasing Party shall sell the Products under trademarks and
product names of the Purchasing Party or the Purchasing Party's
customers. To that effect, the Supplying Party agrees that all Products
supplied by the Supplying Party shall bear such logos and trademarks as
instructed by the Purchasing Party.
Nothing contained in this Agreement shall be construed as granting
either Party a license under any trade marks and trade names of the
other Party without the prior written consent of that Party.
5.5 Additional terms and conditions applicable to the purchase of Products
hereunder are set forth in Annex 2. Unless otherwise agreed in relation
to a specific project and acknowledged by both parties in writing, the
terms and conditions set forth in this Article 5 and Annex 2 hereto
shall be applicable to all orders for the purchase of Products. Such
terms and conditions shall apply in preference to and supersede any
terms and conditions referred to hi the Purchasing Party's purchase
orders or the Supplying Party's conditions of sale.
ARTICLE 6 - MANUFACTURING LICENCES
6.1 Subject to the limitations and conditions set forth below, each Party
hereby grants to the other party (in this Article "the Licensed Party")
licenses (which licenses shall be exclusive with respect to each Party's
exclusive territories) (without right to sublicense) to use, solely in
the respective exclusive territories of the Licensed Party as described
in Article 5. 1, the Background and Foreground Technology owned by the
First Party (in this Article "the Licensing Party") for the sole and
only purpose of manufacturing (partially or entirely) per paragraph 6.2,
(lie Product developed by the Licensing Party.
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Such licenses include the right of direct access to manufacturers of
custom design parts or components included in the Products, the right
to make adaptations, enhancements and improvements to the object of the
license as well as the right to have boards or subassemblies
manufacturing subcontracted worldwide and the right to sell the
Products so manufactured (and to sublicense the Supervisory System) on
an exclusive or non-exclusive basis respectively in the exclusive and
non exclusive territories allocated to the Licensed Party in Article
5. 1.
6.2 The licenses thus granted are either "unconditional", meaning that they
may be exercised by the Licensed Party at any time after completion of
development of the object of the license ("Unconditional Licenses") or
"conditional", meaning that they may not be exercised until certain
circumstances have taken place as described in more detail in
subparagraph (b) below ("Conditional Licenses").
(a) Unconditional Licenses include
(i) a license from INNOVA to SAT to use the interfaces and all
Background and Foreground Technology pertaining to the SIU and the
SIU-to-ARU interface developed by INNOVA for the INOVA Developed
Products, for the purpose of developing any product below 15 GHz. This
license will become a license for the purpose of manufacturing any
product below 15 GHz within SAT's exclusive territories as soon as all
the information, specified in Annex 3, relevant to the license of the
16,x2 M/s 13 GHz, product as described in (a) (ii) is given by SAT to
INNOVA.
(ii) a license from SAT to INNOVA to use the interfaces and all
Background and Foreground Technology pertaining to the SIU and the
SIU-to-ARU interface developed by SAT for the SAT Developed Products,
for the purpose of deve1oping and manufacturing any product above 15
GHz within INNOVA's exclusive territories.
(iii) a license from INNOVA to SAT to use INNOVA's Background and
Foreground Technology pertaining to 18/23/26/38GHz Products with bit
rates 2 x 2, 4 x 2 and 8 x 2 for tile purpose of manufacturing in
France and installing in France quantities of the above defined
Products which do not exceed oil a quarterly basis thirty percent (30%)
of SAT's quarterly sales of radio links.
(iv) a license front SAT to INNOVA to use for all purposes SAT's
Background and Foreground Technology pertaining to the Hitless Feature.
(v) a license from SAT to INNOVA to use for all purposes SAT's
Background and Foreground Technology pertaining to the Supervisory
System (object code and such portion of the source code which is
relevant to INNOVA's applications).
(b) Conditional Licenses include :
(i) a license from INNOVA to SAT to use INNOVA's Background and
Foreground Technology pertaining to 13 and 15 GHz Products with bit
rates 2 x 2, 4 x 2 and 8 x 2 for the purpose of manufacturing such
Products in France.
(ii) a license from INNOVA to SAT to use INNOVA's Background and
Foreground Technology pertaining to 18, 23, 26 and 38 GHz Products with
bit rates 2 x 2. 4 x 2 and 8 x 2 for the purpose of manufacturing in
France quantities of the above derailed Products without the quantity
limitations set forth for the same tinder (a)(iii) above (Unconditional
License).
(iii) a license from SAT to INNOVA to use SAT's Background and
Foreground Technology pertaining to 7, 8, 13 and 15 GHz Products with
bit rates 8 x 2 and 16 x 2 (I + 1) for the purpose of manufacturing
such products in the U.S.A.
(c) Exercise Rights for Conditional Licenses
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The rights under the licenses described in (b)(i) above they be
exercised by the Licensed Party only after SAT has placed with INNOVA
in the framework of a master purchase agreement to be concluded
immediately upon signature hereof (the Master Purchase Agreement),
accepted deliveries for and fully paid for purchase orders specifying
the supply of an aggregate quantity of at least ***** (*****) terminals
with bit rata (es 2 x 2, 4 x 2 and 8 x 2 upon terms and conditions set
forth in Article 5 and Annex 2 hereof.
Subject to the cure provisions below, the rights under each of the
licenses described in (b)(ii) and (iii) above may be exercised by the
Licensed Party only after one (or more) of the following conditions has
taken place and only with respect to the particular Product(s) to which
the following conditions pertain:
- discontinuation of manufacture by the Licensing Party of any
Product to which the Conditional License applies, and of which the
Licensed Party has either ordered and paid for more than *****
units in the six months preceding discontinuation. or has continued
-- within one month after the Licensing Party's notice of planned
discontinuation -- to purchase more than ***** units within 12
months following such notice.
- delay (for any reason other than as specified in Section 10.2) of
at least three (3) months after the agreed shipment date in the
delivery to the Licensed Party of at least twenty five percent (25
%) of the agreed quantities of Products to which the Conditional
License applies and for which a purchase order has been placed and
acknowledged under Article 5.
- refusal (or lack of acknowledgment for a period exceeding 21 days)
of a purchase order placed by the Licensed Party under and in
accordance with the provisions of Article 5, except under the
circumstances in which rejection is permitted by Annex 2.
- a failure to comply with the "most favoured customer" clause set
forth in Article 5.3 in respect of any Product(s) to which the
Conditional License applies,
- an imposition of Transfer Prices exceeding those currently stated
in Annex 2, unless mutually agreed upon.
- When a new ETSI standard becomes applicable, and after discussions
between the Parties to determine how and at what Market and
calculated Transfer Price the Product to which the Conditional
License applies can be inside compliant to this new ETSI standard,
one of the following conditions has taken place :
- the Product can be made compliant at the agreed recalculated
Transfer Price, yet two (2) months after the Licensed Party's
requests, the Licensing Party has not confirmed in writing its
intention to make the Product compliant with the new ETSI
standard; or
- the Product can be made compliant at the agreed recalculated
Transfer Price, yet the Product is not compliant nine (9)
months after the date when the new ETSI standard becomes
applicable.
For the purpose of this provision the relevant ETSI standards shall
be those cited in Annex III of the Master Purchase Agreement.
None of the above conditions shall result in a Conditional License
becoming exercisable unless, thirty (30) days after receipt by the
Licensing Party of a written notice to remedy such condition, the
Licensing Party has not cured such condition.
None of the above conditions shall result in a Conditional License
becoming exercisable if the condition has taken place with respect to a
quantity of Products having an aggregate purchase price below *****
(*****) US Dollars in any single incident.
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None of the above conditions shall result in a Conditional License
becoming exercisable as long as the Licensed Party is in a state of
material breach of this Agreement.
6.3. In order to allow each Licensed Party to exercise without delay its
rights under the Unconditional or Conditional Licenses granted to it as
set forth in paragraphs 6.1 and 6.2 above as soon as authorized under
this Agreement, each Licensing Party undertakes to deliver to the
Licensed Party as soon as available (and at the latest one month after
first manufacturing release of the corresponding Product) all technical
data (and thereafter any amendments thereto) required for the proper
exercise of such rights in the form and language in which they exist in
the Licensing Party's files. Such technical data shall include at a
minimum the information listed in Annex 3 hereto.
In addition to the technical data, the Licensing Party shall make
available to the Licensed Party on request reasonable technical
assistance for the purpose of assisting the Licensed Party in starting
its manufacture of Licensed Products. Financial and other conditions of
such assistance shall be mutually agreed in advance. All the costs
(salaries, benefits, travel, lodging and subsistence when applicable)
of Innova staff sent to SATs locations at SAT's request to support SAT
for the grant of licenses by Innova to SAT shall be paid by SAT.
Each Licensed Party acknowledges and agrees that technical data
received from the Licensing Party in respect of Products to which a
Conditional License applies may not be used for commercial production
or any other purpose unless and until one (or more) of the conditions
precedent to such use as defined in paragraph 6.2 above takes place.
6.4 If a Licensed Party manufactures and sells Products without having the
right to do so under any of the above Conditional Licenses, and thirty
(30) days after receipt of the Licensing Party's written notice by the
Licensed Party that a violation of any of the Conditional Licenses has
occurred, the Licensed Party manufactures and sells 100 additional
terminals, then the Licensed Party shall pay to the Licensing Party a
penalty of $5,000,000. It is thereby agreed that this penalty is a
reasonable compensation for the minimum damages estimated to be
suffered by the Licensing Party in such a case and shall be the entire
compensation for the manufacture and sale of (terminals after receipt
of the notice by the Licensed Party, provided however that nothing in
this paragraph shall be construed to limit the Licensing Party's right
to pursue any remedies it may have under the terms of this Agreement or
in equity for any other breach of this Agreement including, but not
limited to, damages incurred as the result of terminals manufactured
and sold by the Licensed Party in violation of any of the conditional
Licenses prior to receipt of the notice described herein; and provided
further that the Licensed Party shall not be liable for damages for the
manufacture and sale of less than 100 terminals prior to receipt of
said notice and that manufacture and sale of less than 100 terminals
shall not be grounds for the termination of this Agreement. Upon
payment of the penalty, both Parties agree to resume enforcement of all
provisions of this Agreement, it clearly being understood that if the
penalty has not been paid within 30 days after demand by the Licensing
Party, the Licensing Party may, in its sole discretion, terminate the
Agreement.
6.5 In consideration of the Licenses granted to it, each Licensed Party
agrees to pay to the Licensing Party for each Unconditional or
Conditional License (except for the reciprocal licenses pertaining to
the SIU-to-ARU interfaces defined for the Products and the SIU unit and
mentioned in (a) (i) and (ii) above, for which no payments are
required):
(i) a lump sum upon receipt of the full set of technical data
required for exercising its rights under such licenses and
(ii) for the initial term of this Agreement, a percentage or per
unit royalty proportionate to sales.
The lump sum and royalty applicable to each Unconditional or
Conditional License and the terms and conditions under which payments
are to be circulated and retained to the Licensing Party are set forth
in Annex 4 hereto.
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6.6 Throughout the term of this Agreement, each Party shall inform the
other Party of improvements, adaptations or enhancements
("Improvements") which it makes to its own Products as well as to
Products manufactured under (lie other Party's license, as soon as such
Improvements have been introduced into its serial production at its
manufacturing facilities. Information pertaining to Improvements shall
be delivered in the form of additions to or modifications of the
technical data referred to in paragraph 6.3 above and each Party
receiving it shall be entitled to use the corresponding Improvements in
its manufacturing and selling activities to the same extent and under
the same circumstances as it is entitled to manufacture and sell the
Product to which the Improvements relate under the terms and conditions
set forth in this Article.
Under no circumstances shall the Parties have any obligation to provide
information with respect to, nor shall this Agreement have any
application to, any technological improvements associated with any new
product or product line having design. functionality or performance
characteristics materially different from the Products as specified in
Annex 2 of the Master Purchase Agreement and Annex 5 of the Cooperation
Agreement.
6.7 Each Party disclaims any warranty or duty to indemnify with respect to
any future claim or suit against the other Party for infringement of
patents, copyrights and the like owned by third parties in connection
with the other Party's use of the first Party's Foreground or
Background Technology under the manufacturing licenses.
In the event that either Party is sued or thereafter with a suit for
any alleged infringement of a third party's patents, copyrights or the
like on account of such Party's use in the manufacture, sale, operation
or other utilization of Background or Foreground Technology of the
other Party, the first Party shall promptly notify the other Party
thereof in order that the latter may assist in the defense and
settlement of such litigation.
ARTICLE 7 - INTERTRADING
7.1 Each Party shall make available to the other Party on terms and
conditions to be agreed upon the subsystems, modules and piece parts or
its manufacture which are included in its Products.
7.2 Each Party shall use all commercially reasonable efforts to ensure that
where component parts and/or software modules specifically designed for
the Products arc to be procured from third parties, the same shall be
available to the other Party on terms not less favourable than those
granted to the first Party.
ARTICLE 8 - COORDINATING COMMITTEE
8.1 The cooperation among the Parties shall be coordinated by a
Coordinating Committee composed of representatives of the Parties,
which shall supervise and coordinate all aspects of the cooperation
contemplated by this Agreement.
Each Party shall appoint two (2) representatives and an even number of
alternates. Each Party may replace its representatives and alternates.
Each Party shall have one vote on the Coordinating Committee whose
decisions shall be taken unanimously. Meetings of the Coordinating
Committee shall in principle be held alternatively at the location or
each Party, every two months.
8.2 The Coordinating Committee shall issue and distribute to the Parties
periodic reports on the progress of work in relation with the
Development Program including information on technical standards,
technical specifications, time schedule or implementation,
manufacturing cost of the Products or other relevant issues and ensure
that the technical data resulting from each Party's activity under the
Development Program are regularly and timely communicated to the other
Party as provided for in paragraph 6.3 above.
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8.3 The Coordinating Committee in its discretion may appoint, for the
purposes of carrying on its various tasks and functions, special
committees or task Forces composed of persons who may or may not be
members of the Coordinating Committee, but who will report thereto.
8.4 The Party at whose location the meeting is to be held shall have the
responsibility to prepare the meeting of the Coordinating Committee,
propose the agenda and draft the report for approval by the other
Party.
8.5 The Coordinating Committee shall, to the extent possible, resolve any
conflicts among the Parties and refer to the head management of each of
the Parties any subsisting disputes. The Coordinating Committee shall
also be responsible for making to the Parties recommendations about
re-allocation of tasks and corresponding amendments to this Agreement,
in the event that circumstances so require.
ARTICLE 9 - TERM
9.1 This Agreement shall be effective and shall constitutes a binding
agreement immediately upon signing by both Parties, without need for
further action. Unless terminated earlier as provided in 9.2 below,
this Agreement shall remain in force for a term of five (5) years and
thereafter continue for successive periods of five (5) years, unless
terminated by not less than one (1) year's prior written notice
indicating a Party's decision to terminate at the end of the initial
term or of any subsequent term, provided that upon expiration of the
initial Term of this Agreement, all licenses herein granted which have
become exercisable in accordance with the terms hereof prior to such
expiration shall be deemed perpetual and fully paid tip Unconditional
Licenses.
9.2 A Party may terminate this Agreement upon three (3) months prior
written notice if:
(i) If by the end of the first twenty four (24) months period after the
effective date hereof (subject to Section 10.2), the tasks allocated to
the other Party under the Development Program have not been
substantially achieved. A task is described substantially achieved when
a prototype has been built and tested to demonstrate its compliance
with a mutually agreed specification or with a relevant ETSI standard
when existing, or
(ii) In the event that the other party this to pay on the due date the
price of Products purchased hereunder and/or lump sums or royalties
payable under the manufacturing licenses herein granted and such
failure has not been remedied sixty (60) days after receipt of a
written notice from the first party, or
(iii) If the other Party this to perform or observe any other material
obligation or restriction imposed by the Master Purchase Agreement or
this Cooperation Agreement and such failure has not been remedied sixty
(60) days after receipt of a written notice from the First party.
9.3 In the case of termination permitted under subparagraph 9.2. (i) above,
the distribution rights and manufacturing licenses granted hereunder
which have become exercisable in accordance with the terms hereof prior
to such termination shall remain in force to the extent necessary to
permit the terminating or terminated Party to fulfill any outstanding
contracts with or commitments to its customers, for delivery of
products within 12 months of termination, subject in the case of
manufacturing licenses to the continued payment of royalties provided
for under Annex 6 hereto. In the event of termination permitted under
subparagraph 9.2 (ii) or (iii) above, the distribution rights and
manufacturing licenses granted to the terminated Party except for the
right to fulfill outstanding contracts., shall terminate forthwith, and
the distribution rights granted to the terminating Party shall survive
termination until expiration of the current five (5) years period
mentioned in paragraph 9.1. above and all manufacturing licenses
granted to the terminating Party and which have become exercisable in
accordance with the terms hereof prior to such termination shall be
deemed perpetual and fully paid tip Unconditional Licenses.
31/10/96 Page 10
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ARTICLE 10 - GENERAL
10.1 Confidentiality
The Parties acknowledge that by reason of their relationship hereunder
reach Party may have access to certain information and materials
concerning the other Party's business, plans, customers, technology and
products that are confidential and of substantial value to the other
party, which value would be impaired if such information were disclosed
to third parties. The terms and conditions of this Agreement shall be
confidential information hereunder. Each Party agrees that it will not
disclose to any third Party, any such confidential information revealed
to it by tile other Party; provided that INNOVA shall be permitted to
disclose the terms of this Agreement and the Master Purchase Agreement
to the extent reasonably necessary in order to fulfill its disclosure
obligations and otherwise pursue its efforts to obtain private or
public equality or debt financing. Each Party shall take every
reasonable precaution to protect the confidentiality of such
information. Upon request by one Party, the other party shall advise
whether or not it considers any particular information or materials to
be confidential. Neither Party shall publish any technical description
of the items developed by the other Party beyond the description
published by the other Party. In the event of expiration or termination
of this Agreement, there shall be no use or disclosure by either Party
of any confidential information of tile other Party for a period of
rive (5) years.
10.2 Force Majeure.
Non performance of either Party shall be excused to the extent that
performance is rendered impossible by strike, fire, flood, governmental
acts or orders or restrictions, failure of supplier, or any other
reason where failure to perform is beyond the reasonable control of and
is not caused by the negligence of the non performing Party.
10.3 Independent Contractors.
The relationship of INNOVA and SAT established by this Agreement is
that of independent contractors, and nothing contained in this
Agreement shall be construed to (i) give either party the power to
direct and control the day-to-day activities of the other, (ii)
constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking, or (iii)
allow either Party to create or assume any obligation on behalf of the
other Party for any purpose whatsoever.
10.4 Governing Law.
This Agreement shall be governed by the laws of Swiss Federal Code of
Obligations.
10.5 Arbitration.
Any disputes arising out of or in connection with this Agreement shall
be finally settled by binding arbitration conducted in Geneva,
Switzerland, under the Rules of Conciliation and Arbitration of die
International Chamber of Commerce by three arbitrators appointed in
accordance with said Rules.
10.6 Entire Agreement.
This Agreement (including the annexes hereto) sets forth the entire
agreement and understanding of the parties relating to the subject
matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement shall be effective
unless in writing signed by both Parties.
10.7 Assignability and binding effect.
Either Party's rights and obligations under this Agreement may not be
assigned except with tile prior written consent of the other Party.
Notwithstanding the foregoing sentence, this Agreement shall be binding
upon and inure to the benefit of the Parties' successors.
10.8 Notices.
Any notice required or permitted by this Agreement shall be in writing
and shall be sent by registered mail or commercial express delivery
service, addressed to the other Party at the address shown at the
31/10/96 Page 11
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beginning of this Agreement or a( such other address for which such
Party gives notice hereunder. Such notice shall be deemed to have been
given six (6) days after deposit with the mail or express delivery
service.
10.9 Severability.
If any of the terms and conditions of this Agreement shall be or become
unenforceable for any cause or reason whatsoever, the ensuing lack of
enforceability shall not affect the other provisions hereof and in such
event, the Parties hereto shall endeavour to substitute forthwith such
other enforceable provisions as will most closely correspond to the
legal and economic contents of the said terms and conditions.
10.10 Waivers.
None of the terms or conditions of this Agreement shall be deemed or
construed to have been waived by either of the Parties is unless such
waiver is set forth in a written instrument properly signed by such
Party.
10.11 Previous agreements.
Both Parties agree to jointly review the existing agreements between
the Parties, in order to determine which ones or portions of should
remain in force or could be terminated. The conclusion of such review
shall be reduced to writing in the form of an amendment to these
agreements, signed by both Parties.
10.12 Interpretation.
Neither the recitals at the beginning of this Agreement nor the
captions to the various provisions hereof shall be relied upon in
interpreting this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in
two (2) original counterparts as of the date first above written.
For INNOVA CORPORATION For SAT (Societe Anonyme
de Telecommunications)
By /s/ XXXX XXXXXXXX XXXXXX By /s/ XXXX XXXXXXX
------------------------ ----------------------------
(Signature) (Signature)
XXXX XXXXXXXX XXXXXX XXXX XXXXXXX
------------------------ ----------------------------
(print name) (print name)
PRESIDENT EXECUTIVE V.P.
------------------------ ----------------------------
(title) (title)
10.13 Review Meeting Prior to Innova's IPO
Both parties agree to jointly review Paragraph 6.7.5 (exercise rights
for Conditional Licenses) ninety (90) days prior to Innova's Public
Offering of its shares. The conclusion of such review shall be reduced
to writing the form of an amendment to these agreements, signed by both
parties.
13
ANNEX I
ITEMS TO BE DEVELOPED
ALLOCATION OF DEVELOPMENT TASKS
AND TIME SCHEDULE
PRODUCTS TO BE DEVELOPED BY TIME SCHEDULE
2x2 and 4x2 Mbit/s
- 23/26/38 GHz INNOVA 3rd quarter 1996 (1)
- 00/00 XXx XXXXXX 0xx quarter 1996
- 13 GHz INNOVA 1st quarter 1997 (2)
4x2 and 8x2 Mbit/s
15/18/23/26/38 GHz INNOVA 4th quarter 1996
- 13 GHz INNOVA 1st quarter 1997 (2)
8x2 and 16x2 Mbit/s(l + 1)
- 7/8 GHz QPSK SAT 1st quarter 1997
- 13 GHz QPSK SAT 1st quarter 1997
- 15 GHz QPSK SAT 2nd quarter 1997
- 26 GHz 4-FSK SAT/INNOVA 3rd quarter 1997
HITLESS FEATURE
(for 2x2, 4x2 and 8x2 Mbit/s) SAT 1st quarter 1997
SUPERVISORY SYSTEM SAT 3rd quarter 1997 (objective to
be agreed upon by both Parties after
technical discussions)
Both parties agree to discuss in the beginning of 1997 the extension of the
Product range to other frequency bands, bit rates and modulation schemes. The
specifications of Products shall not be expanded unless expressly agreed in
writing by both Parties.
(1) according to INNOVA, these developments are complete at the date of
signature of this agreement and the products ready for type acceptance by SAT.
(2) SAT reserves the right to develop the 2, 4 and 8x2 Mb/s Product at 13 GHz
and will advise INNOVA of its intention by December 1st. If SAT decides to do
so, then INNOVA will be released from its obligations concerning the development
of products in this frequency blind. Otherwise, the above schedule shall apply.
31/10/96 Page 13
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ANNEX 2
PRICES AND OTHER TERMS AND CONDITIONS
APPLICABLE TO THE PURCHASE OF PRODUCTS
1. MARKET PRICES AND TRANSFER PRICES
For each Product, the Transfer Price per link (1+0) shall be obtained
by applying to the Market Price stated in the schedule below (which is
applicable for only 24 months after the effective date of this
Agreement), a discount equal to ***** percent (*****%) except that in
no event during such 24-month period shall the Transfer Price of INNOVA
developed Products at 2xEl and 4xE I bit rates exceed US $12,000 per
link (1+0) as an incentive for SAT to shift front XP3 and STD 10 to XP4
as soon as possible.
INNOVA Developed Products - excluding antenna and cables -
- 23, 26. 38 GHz, 2xEI & 4xEI Market Price Transfer Price
------------ --------------
Small Qty (i) (1+0) US $ 17,500 US $ *****
Large Qty (i) (1+0) US $ 15,000 US $ ***** (ii)
- 13, 15, 18 GHz, 2xEI & 4.x EI Market Price Transfer Price
------------ --------------
Small Qty (i) (1+0) US $ 17,500 US $ ***** (iii)
INNOVA developed Lens Horn Antennas: Transfer Price
--------------
23 & 38 GHz, 24 cm US $ *****
23 & 38 GHz, 34 cm US $ *****
- For Product providing 4xEI & 8xEI tributaries, Market Price and
Transfer Price are ***** higher than those of products providing
2xEI & 4xEI tributaries.
SAT Developed Products - excluding antenna and cables -
- 7/8, 13, 15 GHz QPSK 8xEI & 16xEI Market Price Transfer Price
------------ --------------
Annual Qty (iv) less than
50 links (1+0) US $ 36,000 US $ *****
Annual Qty (iv) greater than
50 links (1+0) US $ 30,000 US $ *****
Notes
(i) prices for small or large quantity apply for annual quantities
respectively below or above ***** (1+0) links, for any product
mix front 13 to 38 GHz, whatever the bit rate. At the
beginning of each year, each Party will forecast its annual
quantity requirements, which will determine the applicable
price for the year.
(ii) applicable for deliveries after 31st December 1997. For
deliveries until 30th June 1997, prices for (small quantity)
shall apply for any. quantity. For deliveries front 1st July
up to 31st December 1997 a maximum Transfer Price of US $*****
shall apply. However, INNOVA shall use commercially
reasonable efforts to reduce this Transfer Price before 1st
January 1998 if cost reductions enable it.
(iii) prices for 18 GHz will be the same as 23, 26 or 38 GHz for
deliveries after 3 1St of December 1997; 13 and 15 GHz
Products will be (licit manufactured by SAT.
(iv) for any product mix front 7 GHz tip to 15 GHz, whatever the
bit rate.
31/10/96 Page 14
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2. Additional terms and conditions of purchase of Products
(a) Maximum production capacity required to be allocated by INNOVA
to SAT:
For 1997:
up to ***** terminals per month in January thru March,
up to ***** terminals per month in April thru June,
up to ***** terminals per month in July thru September,
up to ***** terminals per month in October thru December.
For 1998 and beyond:
*****% of Innova's capacity but in any case not less than
***** terminals per month.
INNOVA shall have the right to reject purchase orders in whole or in
part to the extent that they would exceed INNOVA's maximum required
production allocation.
(b) Purchase orders
All orders for Products submitted by the Purchasing Party shall be
initiated by written purchase orders sent to the Supplying Party
(subject to Section 5.5 of tile Cooperation Agreement); provided,
however, that an order may initially be placed by (telecopy if a
confirming written purchase order is received by the Supplying Party
within fifteen (15) days after and said telecopy order).
Standard delivery lead time shall be two (2) months after receipt of
order. The Supplying Party is required to agree to the standard
delivery laid time only for orders placed in compliance with the
forecasts described below.
The Purchasing Party shall therefore submit purchase orders to the
Supplying Party at least seventy (70) days prior to the requested
delivery date(s). However the Purchasing Party may request and tile
Supplying Party may agree to earlier delivery on a case by case basis.
The Supplying Party shall notify the Purchasing Party of the acceptance
or rejection of an order and of the assigned delivery date for accepted
orders within five (5) days after receipt of tile purchase order. The
Supplying Party may reject purchase orders only if they are not
submitted at least 70 days in advance, not within the amounts forecast,
or otherwise not in conformity with the Terms and conditions of this
Article.
The Purchasing Party shall provide the Supplying Party within thirty
(30) days after start of manufacture of each Product with a first
nonbinding forecast showing six (6) months projections for prospective
orders for that Product. Thereafter the forecasts shall be revised
every month - thus becoming rolling forecasts - to reflect adjustments
in the Purchasing Party's projections. In the event that INNOVA cannot
manufacture part of SATs forecasts due to capacity constraints, it may
in its sole discretion elect to allow SAT to manufacture a mutually
agreed quantity of Products.
Forecasts: SAT will prepare, on a monthly basis, 6 month rolling
forecasts of its requirements for Products and, by the 1st of each
calendar month, will place firm purchase orders (subject to the change
order provisions below) covering the first two (2) months of such
forecasts. Such forecasts may be adjusted on a monthly basis, but
any adjustments to the forecasts are to be limited in accordance with
the following parameters:
- first two (2) months - +0%-0% firm purchase orders (subject to
change order provisions herein)
- between two (2) and three (3) months before delivery +20, -40% of
prior months forecast, forecast only
- between three (3) and four (4) months before delivery +40%, -60%
of prior months forecast, forecast only
- beyond four (4) months before delivery +100%, -100% of prior months
forecast, forecast only
31/10/96 Page 15
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(c) Change orders
The Purchasing Party may utilize written change orders without penalty
for
1) orders that have not yet been accepted by the Supplying Party.
2) orders that have been accepted by the Supplying Party but not
yet been shipped, but only under the following circumstances
and subject to the following conditions:
(i) The Purchasing Party may delay delivery for up to three (3)
months of any accepted order, provided that the Purchasing
Party's change order is received by the Supplying Party at
least thirty (30) days before the scheduled delivery date.
(ii) The Purchasing Party may cancel any order that has been
accepted by the Supplying Party, provided that the written
change order is received by the Supplying Party at least forty
five (45) days before the scheduled delivery date.
(iii) The Purchasing Party may request reasonable changes in the
Product mix and/or quantity in an order that has been accepted
by the Supplying Party, provided that the written change order
is received by the Supplying Party at least thirty (30) days
before the scheduled delivery date and that substantial
changes in Product mix and/or quantity are mutually agreed
upon.
(iv) No specific limits on rescheduling or cancellation of orders
will be imposed by the Supplying Party to the Purchasing Party
if such rescheduling or cancellation has been requested by the
Purchasing Party's customer(s) for reasons directly
attributable to Supplying Party's negligent performance.
(d) Payments
Payment of the Transfer Price for the Products shall be made
by the Purchasing Party to the Supplying Party in US Dollars
by wire transfer, check or other instruments agreed upon by
the parties. Save in case of rejection, where provisions of
clause (e) below will apply, payment terms shall be sixty (60)
days after date of invoice.
If the Purchasing Party becomes delinquent in the payment of
any invoice beyond its due date, interest shall accrue without
prior notice upon the unpaid balance at the rate of one
percent (1%) per month from said due date. In addition the
Supplying Party reserves the right to retain further
deliveries and/or to demand revised payment terms for any
further order.
(e) Packing
Unless otherwise specified by the Purchasing Party, all
products delivered pursuant to this Agreement shall be
suitably packed for air freight shipment in standard shipping
cartons bearing the Purchasing Party's trademark (but not the
Supplying Party's), marked for shipment at the Purchasing
Party's address set forth above. and delivered to the
Purchasing Party "CIP Airport of final destination", at which
time title to such Products shall pass to the Purchasing
Party.
(f) Entry Inspection
The Purchasing Party shall inspect the Products upon receipt
thereof and may reject any Product that is not accompanied by
a set of measurement sheets pertaining to the Product and a
certificate warranting compliance with relevant agreed
specifications or fails to meet said relevant specifications.
Any Product not rejected within thirty (30) days after receipt
of that Product by the Purchasing Party ("the Rejection
Period") smile be denied accepted. If any Product is shipped
by the Purchasing Party to its customer prior to expiration of
the Rejection Period, then that Product shall be deemed
accepted upon shipment by the Purchasing Party. To reject a
31/10/96 Page 16
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Product, the Purchasing Party shall, within the Rejection
Period, notify the Supplying Party of its rejection and
request a Material Return Authorization ("MRA") number. The
Supplying Party shall provide the MRA number to the Purchasing
Party within five (5) days after receipt of the request.
Within five (5) days after receipt of the MRA number, the
Purchasing Party shall return to the Supplying Party the
rejected Product. As promptly as possible but no later than
five (5) days after receipt by the Supplying Party of rejected
Products, the Supplying Party shall, at its option and
expense, either repair or replace the Products. The Purchasing
Party shall pay all shipping charges in connection with the
return to the Supplying Party of repaired or rejected
Products. The Supplying Party shall pay all shipping charges
in connection with the return to the Purchasing Party of
repaired or replacement Products. Rejection of a Product shall
entitle the Purchasing Party to retain payment of the price of
such Product until it is made compliant either through
replacement or repair.
(g) Delays in delivery
In the event that the Supplying Party fails for reasons other
than causes of force majeure to deliver "CIP Airport of final
destination" each batch of Products or spare parts at the
respective dates agreed between the Parties, then the
Purchasing Party may claim from the Supplying Party, following
a period of grace of fifteen (15) days, liquidated damages
equivalent to 0.1% (point one per cent) of the corresponding
price of tile delayed batch per day of delay with a maximum of
ten percent (10%).
(h) Warranty
The Products to be supplied hereunder shall be Warranted to be
free from defects in materials and workmanship under normal
use and service for a period of twenty four (24) months after
the date of the "CIP Airport of final destination" delivery,
provided always that
(i) the said warranty shall not extend to natural wear and tear or
to any damage arising in consequence of installation and/or
operation performed not in accordance with the Supplying
Party's procedures and/or instructions or repair to the
Products not performed by the Supplying Party.
(ii) the said warranty shall be applied on a unit by unit basis,
excepted in the case of epidemic failures.
(iii) in case of service affecting epidemic failures tile period of
warranty will be extended for all delivered Products of the
same type tip to twelve (12) months after correction of the
last defect due to said epidemic failures For the purpose of
this provision, an epidemic failure is deemed to occur when
the failure rate of one type or the Products exceeds seven
percent (7%) of the total delivered quantity over any period
of six (6) consecutive months.
(iv) the Purchasing Party shall have notified the Supplying Party
of the defects in writing or by telefax promptly after the
Purchasing Party was informed of the defects.
The defects will be made good at the Supplying Party's expense
by repair or replacement at the Supplying Party's option. The
Supplying Party shall warrant repaired or replaced items under
the same conditions as above, for a period expiring either
simultaneously with the initial warranty of the Products or
twelve (12) months after installation of such repaired or
replaced item, whichever is later. Transportation and
insurance costs for defective parts returned to the Supplying
Party shall be at the Purchasing Party's charge and
transportation and insurance costs for parts replaced or
repaired by the Supplying Party shall be at the Supplying
Party's charge. The Supplying Party shall complete all
warranty services within fourteen (14) days of the Supplying
Party's receipt of defective Products from the Purchasing
Party. The property in any parts replaced shall revisit in
the Supplying Party.
31/10/96 Page 17
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The foregoing shall constitute the sole warranty and sole
remedy of the Purchasing Party and the sole liability of the
Supplying Party. The warranty of this article is in lieu of
all other warranties, express or implied. Any enlargement of
this warranty by the Purchasing Party in dealing with
customers shall be for the Purchasing Party's exclusive
responsibility unless otherwise agreed between the Parties on
a case by case basis.
(i) Post warranty provisions
All parts and labour required to repair or replace detective
parts for the Products returned to the Supplying Party after
the warranty period set forth above has expired, shall be
charged to the Purchasing Party in accordance with the
Supplying Party's prior quotation. The Supplying Party
warrants that to the extent items are repaired by the
Supplying Party, they shall be free from defects in
workmanship and materials tender normal use and service for a
period of twelve (12) months to commence Upon the Supplying
Party's return shipment to the Purchasing Party. The
Purchasing Party shall bear all transportation costs for the
Product repaired out of warranty. Repair or replacement
service shall be performed within fourteen (14) days of the
Supplying Party's receipt of detective Products.
The Supplying Party warrants to the Purchasing Party a minimum
ten (10) year (or extended period for individually agreed
requirements) product support and maintenance service, after
the date of the on-site acceptance by the Purchasing Party's
customer of each Product.
(j) Patent indemnification
The Supplying Party will keep the Purchasing Party harmless
against any claim of infringement of letters patent,
registered design or copyright by the use or sale of any of
the Products supplied by the Supplying Party to the Purchasing
Party and indemnify all costs and damages which the Purchasing
Party may incur in any action for such infringement or for
which the Purchasing Party may become liable in any such
actions.
Provided that this indemnity is conditional on the Purchasing
Party giving notice in writing to the Supplying Party of any
claim being made or action threatened or brought against the
Purchasing Party within a reasonable time or the Purchasing
Party becoming aware of such claim or action and refraining
from making any admission which might be prejudicial to the
Supplying Party and on the Purchasing Party permitting the
Supplying Party at the Supplying Party's own expense to
conduct any litigation that may elastic and all negotiations
for a settlement of the claim.
In the event that a final injunction is obtained against the
use of infringing Products by the Purchasing Party and/or its
customers, the Supplying Party will, at its expense, obtain
for the Purchasing Party and/or its customers the right to
continue using said Products, replace or modify same so that
they become non-infringing, or if such remedies are not
reasonably available, grant to the Purchasing Party a refined
equal to the amount paid by the Purchasing Party to the
Supplying Party for the infringing Product.
Notwithstanding the provisions of this Section, the Supplying
Party assumes no liability for (i) infringements covering
completed equipment or any assembly, circuit combination,
method or process in which any of the Products may be used but
not covering the Products when used alone; (ii) trademark
infringements involving any marking or branding not applied by
the Supplying Party or involving any mining or branding
applied at the request of the Purchasing Party; or (iii)
infringements involving the modification or servicing of the
Products, or any part thereof, Unless such modification or
servicing was done by the Supplying Party.
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ANNEX 3
TECHNICAL DATA REQUIRED IN THE FRAMEWORK
OF MANUFACTURING LICENCES
- Definition files, including:
* electrical and mechanical diagrams, schematics and drawings,
* bills of materials and components
* PCB layouts and manufacturing films,
* software source and object codes, list of Development tools and
source and object code of specific development tools, if any (to
the extent such technical data may lawfully be transferred under
the terms of applicable licenses).
- Manufacturing files including
* alignment and test specifications, modules and boards level as well
as terminal and system level,
* list of alignment and test equipment,
* definition and manufacturing files (including software source code
if any) of specific manufacturing tools or test benches.
Notes:
1. files shall be supplied both on paper form and electronic format
when applicable,
2. up-dated versions shall be supplied, as soon as available,
following each new release of either the definition or the
manufacturing file.
3. Both Parties agree to use all reasonable efforts to assist the
other in becoming licensees where required to utilize any
technology not owned by the other Party but necessary for the
manufacture of Products.
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ANNEX 4
PAYMENTS UNDER MANUFACTURING LICENCES
1. LUMP SUMS AND ROYALTIES AGREED FOR EACH OF THE
UNCONDITIONAL/CONDITIONAL LICENSES.
The amounts and percentages set forth herebelow are based upon the
combination of a variety of criteria taken into account by the Parties:
the balance between the development efforts allocated to each Party,
the marketing significance of each technology to be developed, SAT's
assistance to manufacturability of the Products developed by INNOVA,
the conditions to be fulfilled precedent to the exercise of Conditional
Licenses and the mutual grant back rights on Improvements exchanged
between the Parties.
Lump sums
a) INNOVA developed Products
-------------------------
2x2 and 4x2 Mbit/s 13 GHz US $*****
15 GHz US $*****
18 GHz US $*****
23 GHz US $*****
26 GHz US $*****
38 GHz US $*****
4x2 and 8x2 Mbit/s 13 GHz US $*****
15 GHz US $*****
18 GHz US $*****
23 GHz US $*****
26 GHz US $*****
38 GHz US $*****
b) SAT developed Products
8x2 and l6x2 Mbit/s 13 GHz US $*****
15 GHz US $*****
26 GHz US $*****
c) Hitless Feature
4x2 and 8x2 Mbit/s US $*****
d) Supervisory System US $*****
ROYALTIES
a) Products
The royalty payable for each Product manufactured under license shall be
equal to *****% of the Transfer Price then in effect according to Annex 2
(or any revisions thereof) multiplied by the number of Products sold by the
Licensed Party after deduction of *****% of the-purchase price paid by the
Licensed Party for all subassemblies, components or other parts purchased
from the Licensing Party and incorporated in the Products sold by the
Licensed Party.
31/10/96 Page 20
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b) Hitless Feature
US $ ***** per Product incorporating the function.
c) Supervisory System
US $ ***** for each copy of the software.
2. Remittance of lump sums and royalties.
(a) Due date
The lump sum specified for each item in paragraph I above shall be
payable to the Licensing Party sixty (60) days after receipt by the
Licensed Party of the full set of relevant technical data as specified
in paragraph 6.3 of the Agreement and Annex 3 thereto.
Royalties shall accrue from the date of shipment by the Licensed Party
to its customers of each item in respect of which royalties apply and
shall be payable within sixty (60) days following the end of each
calendar half year.
All payments shall be remitted in US Dollars.
The Licensed Party may deduct from its payments the withholding taxes
payable to its Tax Administration, provided that in respect of all
such deductions, the Licensed Party shall promptly furnish the
Licensing Party with evidence of such tax remittance to allow the
Licensing Party to claim any applicable tax credit against its
national (French or US as the case may be) income tax.
(b) Reports
The Licensed Party shall deliver to the Licensing Party half yearly
reports showing the nature and quantity of items to which royalties
apply which have been shipped by the Licensed Party to its customers
during the preceding half year. The first report shall be delivered
thirty (30) days after the end of the calendar half year following the
date from which the Licensed Party is first authorised under the
Agreement to exercise its rights under any of the Licenses granted by
the Licensing Party. If no items in respect of which royalties apply
have been shipped by the Licensed Party to its customers during the
half year covered by the report, the report shall so state.
(c) Verifications
The Licensed Party shall keep records adequate to verify all reports
or payments due to the Licensing Party under this Agreement and a
certified public accountant acceptable to both Parties shall have
access on reasonable notice and at regular business hours to such
records to the extent necessary to verify said reports and payments.
Such records shall be retained by the Licensed Party and be so made
available for inspection at any time for a period equal to the period
during which the Licensed Party may exercise its rights under licenses
herein granted plus two (2) years, except as to any year for which an
audit has been completed and settlement made to the written
satisfaction of the Licensing Party. The Licensing Party shall bear
all expenses relating to such audit.
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ANNEX 5
TO BE AGREED LATER
31/10/96 Page 22
