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*
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Portions marked
with a “*” have been omitted pursuant to a request for
confidential treatment. Such portions have been filed separately
with the Securities and Exchange Commission.
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Exhibit 10.10
FRAMEWORK FOR TECHNOLOGY
COLLABORATION AGREEMENT
This Framework for Technology Collaboration
Agreement (the “ Agreement ” or “
Framework Agreement ”) is made and entered into on the
Closing Date, as defined in Exhibit D, by and between AMAZON.COM,
INC., a Delaware corporation (“ Amazon ”) and
FRANKLIN ELECTRONIC PUBLISHERS, INC., a Pennsylvania corporation
(“ Franklin ”).
INTRODUCTION
Amazon is acquiring all of the shares of
MobiPocket.com, S.A. (“ MobiPocket ”) as of the
Closing Date.
Franklin and MobiPocket are parties to several
agreements related to MobiPocket technologies and other items which
will remain in effect in accordance with their terms after the
Closing Date (as defined in Exhibit D).
Franklin is a major shareholder in MobiPocket,
and Franklin and Amazon desire to establish the terms of the
ongoing software development and distribution relationship between
Franklin and MobiPocket that will be in effect as of the Closing
Date by entering into this Agreement and the further agreements in
the forms set forth as Exhibits hereto.
Amazon and Franklin also desire to set forth the
terms of a release and license from Franklin to Amazon and its
Affiliates under certain intellectual property of Franklin and its
Affiliates (as defined in Exhibit D).
In consideration of the foregoing premises and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
AGREEMENT
Section 1. Defined Terms.
Unless otherwise specified in this
Agreement, each term that appears with initial letters capitalized
has the meaning set forth in Exhibit D (Definitions), or in the
applicable Going-Forward Technology Agreement(s).
Section 2. Technology Development and
Licenses
2.1 Japan Reader Development and License
Terms . Franklin and MobiPocket shall enter into, effective as
of the Closing Date, the First Amendment to the Japan Reader
Development and License Agreement in the form set forth in Exhibit
A.
2.2 Amendment to Development and License
Agreement. Franklin and
MobiPocket shall enter into, effective as of the Closing Date, the
Third Amendment to the Development and License Agreement in the
form set forth in Exhibit B.
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2.3
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Source Code
Escrow Agreement.
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2.3.1 Franklin and MobiPocket shall enter into a
Source Code Escrow Agreement in the form set forth in Exhibit C,
effective as of the Closing Date, and shall terminate their
existing Source Code Agreement in its entirety as of the effective
date of the Source Code Escrow Agreement contemplated by this
Agreement. Notwithstanding anything to the contrary in the
Going-Forward Technology Agreements, Franklin and Amazon agree that
MobiPocket shall deposit, within thirty (30) days of the Closing
Date, source code for current versions of the MobiPocket Reader
(including the UA Reader and the MPRJ delivered under the Japan
Reader Development and License Agreement ) licensed to Franklin,
and related deposit materials, in the escrow account established by
such Source Code Escrow Agreement. Section 2.4.5 of this Agreement
shall take effect only upon Mobi-Pocket’s deposit of all
source code required to be deposited in accordance with the
previous sentence; provided, however, that Amazon, on behalf of
MobiPocket and any Affiliate of Amazon, agrees that Franklin shall
at all times during the term of Source Code Escrow Agreement and
any successor thereto be entitled to bring actions or proceedings
against MobiPocket, Amazon, or any Affiliate of Amazon seeking
specific performance to remedy any breach of Section 1.6 of the
Source Code Escrow Agreement or any successor thereto Franklin and
Amazon further agree that the terms of the Source Code Escrow
Agreement, together with this Section 2.3 and the source code
escrow-related terms of the Going-Forward Technology Agreements (as
amended by this Agreement), amend and supersede in their entirety
all obligations of MobiPocket or Amazon to Franklin with respect to
source code escrow or access rights.
2.3.2 If Iron Mountain Intellectual Property
Management, Inc. (“IMIPM”), the third party source code
agent selected by mutual agreement of the parties to perform such
function for purposes of the Source Code Escrow Agreement set forth
in Exhibit C, elects (a) to terminate the Source Code Escrow
Agreement, or (b) not to renew the Source Code Escrow Agreement on
terms mutually agreeable to the parties, Franklin and Amazon will
work together to identify a substitute third party escrow agent and
to complete all necessary forms of agreement, on substantially
equivalent terms (to the extent this is possible based on using
commercially reasonable efforts to work with the substitute third
party escrow agent to obtain such terms) as set forth in the Source
Code Escrow Agreement except to the extent (if any) that the
parties mutually agree to modify such terms, as promptly as
possible (and, if possible, before the actual date of expiration or
termination of the then-existing Source Code Escrow Agreement).
Should Amazon fail to comply in any respect with its duties and
obligations under this Section 2.3.2, Amazon hereby agrees that
Franklin may, notwithstanding the provisions of Section 2.4.5
herein, exercise any appropriate remedy in connection with such
failure. Any such substitute source code escrow agreement that the
parties may enter into shall be deemed to be the “Source Code
Escrow Agreement” for purposes of this Agreement upon its
entry into effect. The terms of this Section 2.3.2 shall not apply,
and the parties shall have no obligation to seek to enter into a
substitute source code escrow agreement, in the event the
then-current Source Code Escrow Agreement is terminated because of
an uncured nonpayment or breach by Franklin or any authorized
successor thereto.
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2.4
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Future
Development Projects .
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2.4.1 During the term of Franklin’s license to
the UA Reader (as set forth in the Development and License
Agreement), Franklin may request from time to time that MobiPocket
perform particular Future Development Projects that relate solely
to development for the Franklin operating system platforms and
Franklin devices for which MobiPocket has previously performed
development work, are reasonably related to
previous development activities
undertaken by MobiPocket under agreements with Franklin, and are
otherwise commercially reasonable in nature and scope. Franklin
shall provide MobiPocket with a detailed written proposal regarding
any Future Development Project that it requests that MobiPocket
consider undertaking, including without limitation which
Going-Forward Technology Agreement Franklin proposes to have apply
to the results of such Future Development Project (i.e., which
Going-Forward Technology Agreement’s license terms, duration
and potentially other terms, subject to mutual agreement of the
parties in each such instance, should apply to the deliverables
that Franklin is proposing to obtain under a Future Development
Project). Upon request from MobiPocket, Franklin shall provide
additional information and requirements regarding any such proposal
to assist MobiPocket’s consideration thereof.
2.4.2 MobiPocket may in its sole discretion determine
that it is willing, subject to further mutual agreement with
Franklin on applicable terms (including without limitation
regarding specifications, milestone schedule, acceptance testing,
fees, payment schedule, and the application of the license terms,
duration and potentially other terms from a Going-Forward
Technology Agreement) to perform such a Future Development Project.
If MobiPocket notifies Franklin that it is potentially interested
in performing a Future Development Project on mutually agreed terms
and conditions, the parties shall use commercially reasonable
efforts to negotiate for a period of not less than thirty (30) days
and enter into a binding written agreement concerning such Future
Development Project, which agreement shall either state that the
license terms and duration of a specified Going-Forward Technology
Agreement apply to the results of the Future Development Project,
or shall expressly supersede all potentially relevant terms of the
Going-Forward Technology Agreements and shall specify the license
terms and duration applicable to the results of such Future
Development Project. In either case, such agreement shall specify
that source code to be developed thereunder shall be placed in
escrow under the terms of the then applicable Source Code Escrow
Agreement between Franklin and MobiPocket or its
successor.
2.4.3 If (a) MobiPocket does not agree to enter into
negotiations regarding a Future Development Project that Franklin
believes in good faith relates solely to development for the
Franklin operating system platforms and Franklin devices for which
MobiPocket has previously performed development work is reasonably
related to previous development activities undertaken by MobiPocket
under agreements with Franklin, and is otherwise commercially
reasonable in nature and scope, or (b) MobiPocket and Franklin do
not reach agreement on binding terms that would apply to a Future
Development Project after negotiating pursuant to Section
2.4.2 for at least thirty (30) days with respect to such terms
(in either such case, the parties shall have reached a “
Future Development Impasse ”), Franklin may provide
written notice to Amazon that Franklin is escalating discussion
regarding the applicable Future Development Project within the
management of Franklin and Amazon as follows: The Chief Executive
Officer of Franklin and a Vice President of Amazon shall arrange
and participate in a meeting (in person or otherwise, as such
individuals may determine) and seek to resolve the Future
Development Impasse. If such discussions do not result in the
parties’ reaching a mutually satisfactory resolution within
thirty (30) days after Franklin issued a written notice invoking
this escalation procedure, Franklin may pursue obtaining access to
relevant versions of MobiPocket Reader source code in accordance
with the release conditions and other terms of the Source Code
Escrow Agreement.
2.4.4 Franklin agrees that notwithstanding anything to
the contrary in the Going-Forward Technology Agreements or any
other agreement between Franklin and MobiPocket, this Section
2.4 together with Section 1.1 and Exhibit A of
the Japan Reader Development and License Agreement, Section 8(d) of
the Development and License Agreement (as amended), and the Source
Code Escrow Agreement set forth the sole and exclusive obligations
of MobiPocket and Amazon with respect to any future software
development, customization or update activities (collectively,
“ Future Development Projects ”) in connection
with any Going-Forward Technology Agreement or any other agreement
between Franklin and MobiPocket.
2.4.5 SOLE AND EXCLUSIVE REMEDY;
WAIVER OF OTHER REMEDIES . FRANKLIN FURTHER AGREES THAT, SUBJECT TO
MOBIPOCKET’S DEPOSIT OF ALL SOURCE CODE AS EXPRESSLY
REFERENCED IN SECTION 2.3.1 HEREIN OR SECTION 1.6 OF THE SOURCE
CODE ESCROW AGREEMENT OR ANY SUCCESSOR THERETO, THE TERMS OF
SECTION 2.4.3 AND THE RELEASE TO FRANKLIN OF APPROPRIATE SOURCE
CODE IN ACCORDANCE WITH THE SOURCE CODE ESCROW AGREEMENT SHALL
CONSTITUTE ITS SOLE AND EXCLUSIVE REMEDY FOR ANY FAILURE BY
MOBIPOCKET OR AMAZON OR ANY AMAZON AFFILIATE TO PROVIDE ANY
REQUESTED SOFTWARE CUSTOMIZATION, ERROR CORRECTION, OR OTHER FUTURE
SOFTWARE DEVELOPMENT. FRANKLIN HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHTS AND REMEDIES THAT IT MAY HAVE AT LAW OR OTHERWISE TO
OBTAIN ANY REMEDY OR RELIEF OTHER THAN AS EXPRESSLY SET FORTH IN
THIS AGREEMENT OR THE JAPAN READER DEVELOPMENT AND LICENSE
AGREEMENT OR THE DEVELOPMENT AND LICENSE AGREEMENT WITH RESPECT TO
ANY FAILURE BY MOBIPOCKET OR AMAZON OR ANY AMAZON AFFILIATE TO
PERFORM ANY OBLIGATION TO FRANKLIN (INCLUDING WITHOUT LIMITATION
ANY OBLIGATION TO TIMELY COMPLETE AND DELIVER ANY SOFTWARE UPDATE
OR ERROR CORRECTION, ANY MODIFIED OR NEW SOFTWARE, OR ANY WARRANTY
OR REPAIR OBLIGATION REGARDING ANY OF THE FOREGOING), WHETHER OR
NOT SUCH FAILURE CONSTITUTES A MATERIAL BREACH OF ANY AGREEMENT OF
MOBIPOCKET, AMAZON OR ANY AMAZON AFFILIATE.
2.4.6 AMAZON RESPONSIBILITY FOR
MOBIPOCKET PERFORMANCE; TERMINATION OF CERTAIN
AGREEMENTS. For purposes
of clarification, Amazon agrees that it shall be responsible for
MobiPocket’s compliance with and performance of all
responsibilities under this Agreement, the Going-Forward Technology
Agreements, and the Source Code Escrow Agreement, and that Amazon
will be liable for any failure of MobiPocket to so comply or
perform, and Amazon further agrees that in the case in which
MobiPocket is merged into or otherwise consolidated with Amazon or
in the case in which MobiPocket takes action to assign or transfer
any Going-Forward Technology Agreements or the Source Code Escrow
Agreement to Amazon that Amazon hereby accepts the obligations of
MobiPocket thereunder or accepts the delegation of all duties of
MobiPocket thereunder. Without limiting the foregoing, the parties
hereby acknowledge and agree that, other than the Source Code
Escrow Agreement, and the Going-Forward Technology Agreements that
any and all other agreements between MobiPocket and Franklin
existing as of the date hereof are hereby terminated in their
entirety as of the Closing Date.
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2.5
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Revised Per
Unit Royalty Amount .
Franklin shall pay to MobiPocket a per unit royalty
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of * in connection with
Franklin’s sales of any and all products containing the UA
Reader, any other version of the MobiPocket Reader, or any
derivative work of any of the foregoing developed by Franklin or
MobiPocket in accordance with the Going-Forward Technology
Agreements or any other agreement between them regarding a Future
Development Project, or pursuant to any license rights granted to
Franklin under the Source Code Escrow Agreement; provided,
however, that this sentence shall not apply to Franklin’s
sales of products that are subject to the LPL 1000 Letter
Agreement. The parties agree that this Section 2.5 amends
and supersedes in their entirety the per unit royalty terms set
forth in each of the Going-Forward Technology Agreements. The
parties agree that any royalties that are due to be paid by
Franklin under any Going-Forward Technology Agreements on or after
the Closing Date shall be accrued and earned out against any
royalty advances paid by Franklin to MobiPocket or Amazon at any
time without regard to the determination of which agreement under
which such royalty advance was initially paid by
Franklin.
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2.6
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Other
Fees. Except as expressly
amended by this Agreement, all royalties, fees and other amounts
that Franklin is obligated to pay MobiPocket or its successors
(including without limitation Amazon and its Affiliates) pursuant
to the Going-Forward Technology Agreements or any other agreement
between MobiPocket and Franklin will continue to accrue after the
Closing Date in accordance with the applicable agreement and for as
long as it remains in effect. MobiPocket shall invoice Franklin
for, and Franklin shall pay to MobiPocket, any and all such
royalties, fees and other amounts in accordance with each
applicable agreement.
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2.7
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Review of
Certain Terms . The terms
of this Section 2.7 will apply only if, *
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2.8
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Additional
Framework Terms .
Franklin and Amazon further agree that, effective as of the Closing
Date the following shall govern all of the Going-Forward Technology
Agreements:
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2.8.1 Notwithstanding anything to the contrary in the
Going-Forward Technology Agreements or any other agreement between
Franklin and MobiPocket, this Agreement, as well as each of the
Going-Forward Technology Agreements, including all amendments and
addenda thereto, shall be governed by the laws of the State of New
York, without reference to rules governing choice of
law.
2.8.2 (a) With respect to all deliverables that
MobiPocket has provided or provides in the future to Franklin under
either the Reader Agreement dated June 22, 2001, as amended, or the
LPL 1000 Letter Agreement, MobiPocket shall have no indemnity or
other obligation under Section 26 of such Reader Agreement, the
second paragraph of the LPL 1000 Letter Agreement, or otherwise,
with respect to any third party claim to the extent arising from
any code, specifications or other material not created by
MobiPocket; any modification or unauthorized use of the MPR or
other mutually-agreed deliverable; any further distributions of
Franklin products that incorporate a prior version of the MPR or
other mutually-agreed deliverable following MobiPocket’s
delivery of any updated version thereof to Franklin with respect to
such future distribution; or the combination of the MPR or other
mutually-agreed deliverable with any Franklin product, or any
product, software, hardware, technology or service with which the
MPR or other mutually-agreed deliverable may be used, where the
applicable third party claim would not have occurred but for such
combination (any claim described in this sentence, an “
Excluded Claim ”).
(b) Franklin shall defend, indemnify
and hold MobiPocket harmless from and against any and all third
party claims, damages, liabilities, costs (including reasonable
attorneys’ fees) and expenses incurred by MobiPocket
resulting from any Excluded Claim or regarding Franklin’s use
or distribution of the Franklin Products; provided, however, that
this Section 2.8.2 shall not apply to the subject matter of the
Patent Infringement Defense Letter Agreement.
2.8.3 Reservation of Rights .
Notwithstanding anything set forth in any of the Going Forward
Technology Agreements to the contrary, except as otherwise
expressly authorized in (i) the Development and License Agreement,
as amended, the Source Code Escrow Agreement, or the Japan Reader
Development Agreement, as amended, or (ii) as otherwise authorized
in writing by MobiPocket or Amazon after the Closing Date: (a)
Franklin will not use, disclose, publish or distribute any
MobiPocket software, including the MPR or the MobiPocket Publisher
Professional Software, or any other mutually-agreed MobiPocket
deliverable (or any portion thereof), or any and all updates or
upgrades thereto (collectively, “MP Software”); (b)
Franklin will not decompile, reverse engineer, disassemble or
otherwise attempt to derive source code from any MP Software; (c)
subject to the licenses expressly granted in the Going Forward
Technology Agreements, MobiPocket hereby reserves all of its right,
title and interest in and to all MP Software, including the MPR,
the MobiPocket Publisher Software, and any other mutually-agreed
MobiPocket deliverable; and (d) for purposes of clarification,
nothing in this Agreement or in any of the Going-Forward Technology
Agreements authorizes Franklin to distribute, or to sublicense
rights in the MPR, the MobiPocket Publisher Software, or any other
MP Software whatsoever, for use on or distribution with, any
product other than products based on or incorporating the UA;
provided that Franklin, its sublicensees and its customers shall be
entitled to continue to distribute products that include the MPR
existing as of the Closing Date and Franklin shall be entitled to
develop Franklin’s “Ultimate Reference Suite”
line of products incorporating the MPR under the Going-Forward
Technology Agreements; and, further provided, that Amazon agrees
that, notwithstanding anything to the contrary in this Section
2.8.3, Amazon will negotiate in good faith with Franklin at
Franklin’s reasonable request for extension of rights under
any Gong-Forward Technology Agreement to platforms based on
operating systems other than UA during the term of any such
Going-Forward Technology Agreement on fair and non-discriminatory
terms. In addition to and without limiting the foregoing, Franklin
acknowledges that nothing contained in this Agreement or any of the
Going-Forward Technology Agreements shall be construed to allow
Franklin to sublicense or otherwise distribute any MP Software
whatsoever (including, but not limited to, the MPR or the
MobiPocket Publisher Professional Software) on a standalone basis
in any manner whatsoever, without MobiPocket’s prior written
approval; provided that Franklin shall be entitled to continue to
distribute any version of the MPR, whether Standard or Pro, or of
the MobiPocket Standard or Publisher Professional Software or of
the MobiPocket Office Companion to end users from Franklin’s
web site for which Franklin shall pay to MobiPocket * for all such
sales.
Section 3. License and Release Related to
Franklin Patents and Other Proprietary Rights
(a) Franklin hereby grants to
MobiPocket, Amazon, and Amazon’s current and future
Affiliates, on behalf of Franklin and its Affiliates, and effective
as of the Closing Date, an irrevocable, fully paid up, worldwide,
non-exclusive license under the Franklin Patents, to make, have
made, use, contribute to the use of, induce the use of, and
incorporate any and all software and other technologies applicable
to its or their development work for Franklin or its Affiliates,
and solely for use in such development work for
Franklin,
pursuant to the Going-Forward
Technology Agreements or any written agreement between any such
parties concerning any Future Development Project. Such license
shall take effect on the Closing Date and shall remain in effect
until the expiration or termination of Franklin’s license to
distribute any development work performed and owned by MobiPocket,
Amazon or any Amazon