FUNFACS Consortium Agreement Final Version

CONSORTIUM AGREEMENT

for the Project

Fundamentals, Functionalities and Applications of Cavity Solitons

(“FUNFACS”)

Table of Contents

Article 1- Definitions

Article 2 - Purpose and Nature of the Consortium Agreement

Article 3 - Duration

Article 4 - Organisational Structure

Article 5 - The Project Management Committee

Article 6 - The Co-ordinator

Article 7 - Costs, Reserve Funds and Payments

Article 8 – Inclusion of a new Party

Article 9 - Responsibilities of the Parties

Article 10 - Liabilities / Indemnifications / Force majeure

Article 11 - Confidentiality

Article 12 - Publications

Article 13 - Ownership and Protection

Article 14 - Dissemination

Article 15 - Access Rights

Article 16 - Prior Restrictive Commitments

Article 17 - Withdrawal and Termination

Article 18 - Inconsistency Clause

Article 19 - Defaults and Remedies

Article 20 - Assignment

Article 21 – Language

Article 22 - Applicable Law

Article 23 - Settlement of Disputes

Article 24 - Amendments

Article 25 - Severability

Article 26 - Entire Agreement

ANNEX 1 - List of Affiliates

ANNEX 2 - List of the excluded Pre-Existing Know-how

This Consortium Agreement is made BETWEEN:

(1) Centre National de la Recherche Scientifique (CNRS), France

(“the Co-ordinator“)

(2) Istituto Nazionale per la Fisica della Materia (INFM), Italy

(3) University of Strathclyde (USTRAT), United Kingdom

(4) U-L-M photonics GmbH (UP), Germany

Hereinafter referred to as the “Parties”

WHEREAS the Parties have submitted a Proposal for an Specific Targeted Research Project to the European Commission entitled “Fundamentals, Functionalities and Applications of Cavity Solitons” (hereinafter referred to as “the Project”) to be carried out under the Sixth Framework Programme of the European Community for research, technological development and demonstration activities – Priority 2 “Information Society Technologies” / Future and Emerging Technologies / Open domain.

WHEREAS the Project has been selected for funding, and the Co-ordinator has entered into negotiations for the signature of the Proposal n° 004868-2 with the European Commission, and each of the other Contractors will execute the Accession Form A under which they agree to be bound by the provisions of the EU Contract.

WHEREAS the Parties have agreed to enter into this Consortium Agreement in order to establish appropriate structures to conduct the Project and to specify certain rights and obligations in accordance with the provisions of the EC Contract (Decision COM (2003) 799/2, 17.03.03) and the EU legislation governing free competition.

WHEREAS pursuant to an agreement signed between Alcatel Group and CNRS, a non-exclusive and non transferable license in all Alcatel’s fields of application is granted to Alcatel Group and its Affiliates on any patent filed by CNRS, alone or jointly with a third party, to protect results obtained by the “Laboratoire de photonique et de nanostructures (LPN)”.

THEREFORE IT IS AGREED AS FOLLOWS:

Article 1 - Definitions

1.1 General Definitions

Words defined in the EC Contract and its Annexes have the same meaning in this Consortium Agreement.

1.2 Additional Definitions

“Affiliate” of a Party means:

(a) Any legal entity directly or indirectly controlling a Party, controlled by a Party, or under common control with a Party, for so long as such control lasts and provided that the said Affiliate or the ultimate controlling entity is incorporated and resident in, and subject to the law of a Member State of the Community, or an Associated State and specified in Annex 1.

Control of an entity shall exist through the direct or indirect:

(i) control of 50% or more of the nominal value of the issued equity share capital of the entity or of 50% or more of the equity's shares entitling the holders to vote for the election of directors or persons performing similar functions, or

(ii) right by any other means to elect or appoint directors of the entity (or persons performing similar functions) who have a majority vote,

Common control through Governments does not, in itself, create an affiliated status unless otherwise agreed by the Parties and specified in Annex 1 .

The Parties may unanimously agree to review the list of Affiliates of any Party during the Project. In such event, Annex 1 of this Consortium Agreement shall be updated accordingly. Annex 1 shall also be updated if as a consequence of a change of control of a Party, the Affiliates listed therein no longer comply with the conditions set out in this Article.

“Consortium Agreement“ means this Consortium Agreement entered into by the Parties in respect of the Project to achieve the purpose mentioned in Article 2.

"Defaulting Party" means a Party breaching any of its obligations under the EC Contract or this Consortium Agreement.

"EC Contract" means the contract (including its Annexes) concluded between the European Commission and the Contractors for the performance of this Specific Targeted Research Project.

“Project Budget” is the budget agreed upon for each Contractor for the execution of the Project defined in Annex I of the EC Contract.

“Project Deliverables” means the reports, including progress reports as well as audit certificates that shall be delivered via the Co-ordinator to the European Commission as detailed in Annex 1 of the EC Contract.

“Software" means:

(a) software programs, (i.e. sequences of instructions to carry out a process in, or convertible into, a form executable by a computer and fixed in any tangible medium of expression and in any code form). However, it is upon the Parties to agree if they include Source Code form in this definition on a case by-case basis;

(b) software information, (i.e. technical information used or, useful in, or relating to the design, development, use or maintenance of any version of a software program); and/or

c) software documentation, (i.e. software information in documentary form).

For the purpose of avoiding doubt, Software may be Knowledge or Pre-existing Know-how.

"Object Code" means Software in machine-readable form, compiled and/or executable form including but not limited to, byte code form and in the form of machine-readable libraries used for linking procedures and functions to other Software.

"Source Code" means Software in human-readable form normally used to make modifications to it, including, but not limited to, comments and procedural code such as job control language and scripts to control compilation and installation.

“Project Management Committee” means the committee established in accordance with Article 5

“Work Plan” means the description of work and activities to be carried out in order to implement the Project as described in Annex I of the EC Contract.

“ Work-Package” means each block of tasks and research efforts around which the Project is built as defined in Annex I of the EC Contract.

Article 2 - Purpose and Nature of the Consortium Agreement

2.1 The purpose of this Consortium Agreement is the following:

(a) To establish the appropriate structures for managing and directing the Project.

(b) To define the respective rights and obligations of the Parties in performing the Project. .

(c) To set a legal framework that enables the Parties to make the necessary arrangements regarding intellectual property and other matters in order to supplement the EC Contract but without conflicting with the provisions thereof.

2.2 The Parties agree to cooperate under the terms of this Consortium Agreement in order to carry out the Project by using all reasonable endeavours and scientific and technological skills to perform the tasks allocated to any of them as defined in the Work Plan.

2.3 Nothing in this Consortium Agreement shall create an agency or partnership or any form of legal entity between all or some of the Parties.

Article 3 – Duration

3.1 This Consortium Agreement shall enter into force as of the date of its signing by the Parties and shall continue in full force and effect until terminated in accordance with Article 17 hereof or complete discharge of all obligations for the carrying out of the Project undertaken by the Parties under the EC Contract and under this Consortium Agreement, whichever occurs first.

3.2 This Consortium Agreement is subject to the condition that the EC Contract is signed between the European Commission and the Co-ordinator on behalf of the Contractors. For the purpose of avoiding doubt, in the event that the EC Contract is not finally signed between the European Commission and the Co-ordinator, this Consortium Agreement shall automatically become null and void for all the Parties hereto and shall, subject to Article 3.4, be deemed to have produced no legal effects or obligations.

3.3 This Consortium Agreement shall, subject to Article 3.4, also become null and void for any Party hereto that decides not to accede to the EC Contract, as from the date on which such Party notifies of such decision to the Co-ordinator.

3.4 Notwithstanding the nullity of this Agreement pursuant to Articles 3.2 and 3.3, the requirements of confidentiality as stated in Article 11 hereof shall remain in effect for a period of 5 (five) years for all Parties, including any Party hereto not having acceded to the EC Contract.

Article 4 - Organisational Structure

4.1 The organisational structure of the Consortium shall consist of:

(a) The Project Management Committee, and

(b) The Co-ordinator.

4.2 The European Commission has the right to participate as an observer at the meetings of the Project Management Committee.

Article 5 - The Project Management Committee

5.1 Composition

The Project Management Committee shall consist of:

(a) The Co-ordinator.

(b) The Work-Package Managers.

Each member of the Project Management Committee shall have the right to appoint a deputy or a proxy although it shall use all reasonable endeavours to maintain the continuity of its representation.

5.2 Responsibilities

5.2.1 The Project Management Committee shall deal with all the major decisions regarding the Project and shall be responsible for:

(a) Reviewing the Work Plan and approving any scientific and technical major strategy regarding the Project, including any substantial changes in the agreed Work- Packages.

(b) Approving the annual actual expenditures and the forecast expenditures for the next financial period.

(e) Requesting the European Commission to review and /or amend any provision (s) of the EC Contract.

(f) Deciding upon substantial changes or amendments of the terms of this Consortium Agreement (and if required any updating of its Annexes).

(g) Requesting the European Commission to suspend or prolong all or part of the Project, to terminate the EC Contract or the participation of one or more of the Contractors.

(h) Deciding upon the actions to be taken against any Defaulting Party, and the assignment of the Defaulting Party's tasks to another Party.

(i) Deciding upon the accession of new Parties to the Project and to this Consortium Agreement.

(j) Upon proposal of the Co-ordinator, approving the Plan on the use and dissemination of Knowledge and any updating of same as provided in the EC Contract.

(k) Deciding upon any other matter on which a decision of the Project Management Committee is required in accordance with the terms of this Consortium Agreement.

(l) Arbitrating and resolving disputes or disagreements between the Parties concerning publications in accordance with Article 12.1 (e) and the granting of Access rights in accordance with Article 15.1.7.

5.2.2 Decisions of the Project Management Committee under this Article 5.2.1 are legally binding for all Parties.

5.3 Meetings

5.3.1 The Project Management Committee shall meet at least once every twelve months and for the Mid-Term meeting (month 18).

5.3.2 The Project Management Committee may also meet:

(a) at any other time when necessary at the discretion of the Co-ordinator,

(b) upon written request to the Co-ordinator of 1/3 of its members.

5.3.3 Meetings shall be convened by the Co-ordinator with at least (30) calendar days prior notice to the day scheduled. The agenda shall be enclosed with the notification and shall be deemed to be accepted unless any of the members of the Project Management Committee notifies the Co-ordinator in writing of its disagreement, at least ten (10) working days before the date of the meeting. The Parties shall be entitled to request that additional items be included on the agenda subject to such requests being made within the aforesaid period of ten (10) days.

5.3.4 Meetings of the Project Management Committee shall be chaired by the Co-ordinator unless he decides to delegate this function to another Party’s on a case-by- case –basis subject to the matters to be discussed in the relevant meeting.

5.4 Voting Rules

5.4.1 The Project Management Committee shall not deliberate and decide validly unless two-thirds (2/3) of its members are present or represented by proxy. Where decisions have to be taken unanimously, the Project Management Committee shall not deliberate and decide validly unless three-quarters (3/4)) of its members are present or represented by proxy.

5.4.2 In voting, each member of the Project Management Committee shall have one (1) vote. With the exceptions established in Article 5.4.3, the Project Management Committee shall take decisions by a majority of the 75% of the votes of its members present or represented by proxy. In case of deadlock the Co-ordinator or the Party’s representative who is chairing the meeting shall have a casting vote.

5.4.3 Decisions under Article 5.2.1 (f), (g), (h) and (i) shall be taken unanimously by the members of the Project Management Committee (in accordance with the quorum as established in Article 5.4.1), but excluding, in the case of Article 5.2.1 (g), the representative of the Party whose participation may be terminated and in the case of Article 5.2.1 (h), the Defaulting Party’s representative.

5.4.4 Any decision requiring a discussion or vote at the Project Management Committee shall be duly identified on the agenda.

5.4.5 The Project Management Committee may take decisions via teleconference and/or via e-mail, phone etc, provided that the Co-ordinator duly identifies such decision and that the concerned members ratifies such decision to the Co-ordinator by e-mail, letter or fax by the deadline established by the Co-ordinator.

5.5 Minutes

Minutes of the meetings of the Project Management Committee shall be transmitted by the Co-ordinator to the members within thirty (30) calendar days after the date of the meeting. The minutes shall be considered as accepted by the other Parties if, within fifteen (15) calendar days from receipt, no Party present or represented by proxy at the meeting has objected in writing to the Co-ordinator.