Co-Development Agreement Template

CO-DEVELOPMENT AGREEMENT

This Co-Development Agreement (the Agreement) is made and entered into as of Effective Date: by and between Party A Name: with principal place of business at , and Party B Name: with principal place of business at . Each of Party A and Party B is sometimes referred to herein individually as a Party and collectively as the Parties.

RECITALS

WHEREAS, Party A possesses certain Background Technology, expertise, personnel and facilities relevant to the development of the Project described below; and

WHEREAS, Party B possesses complementary technology, know-how and resources and desires to collaborate with Party A to co-develop improvements, prototypes, and related materials for the Project; and

WHEREAS, the Parties desire to set forth the terms and conditions under which they will cooperate to develop the Project, allocate ownership of resulting intellectual property, and define responsibilities, costs and commercialization rights.

Project Name:

NOW, THEREFORE

In consideration of the mutual covenants and promises contained herein, the Parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below:

"Background Technology" means intellectual property, inventions, processes, methods, designs, and know-how that a Party owned or controlled prior to the Effective Date and that is listed in that Party's Background Technology Disclosure.

"Foreground Technology" means inventions, improvements, developments, data, designs, documentation and other results that are conceived, reduced to practice, authored or otherwise generated in the performance of the activities under this Agreement.

2. SCOPE OF CO-DEVELOPMENT

2.1 The Parties shall cooperatively engage in research, design, testing and engineering activities (the Co-Development Activities) to develop the Project described in the Project Plan. The Co-Development Activities shall be limited to the scope expressly set forth in the Project Plan and any mutually agreed written amendments.

3. RESPONSIBILITIES; RESOURCES

3.1 Each Party shall perform the tasks assigned to it in the Project Plan in a timely, professional manner consistent with industry standards. A Party's failure to meet a milestone shall constitute a Default only after written notice and a thirty (30) day cure period, except where immediate injunctive relief is appropriate.

3.2 Each Party shall make available its personnel, facilities and Background Technology as specified in the Project Plan. Costs for dedicated personnel, materials and third-party services shall be allocated as set forth in Section 10 (Payment and Expenses).

4. DELIVERABLES; ACCEPTANCE

4.1 Deliverables shall be defined in the Project Plan. Upon delivery of a deliverable, the receiving Party shall have the period specified in the Project Plan to perform acceptance testing and to provide written acceptance or rejection. Rejection shall be accompanied by a written description of deficiencies and the Parties shall cooperate in good faith to correct such deficiencies.

5. INTELLECTUAL PROPERTY

5.1 Background Technology shall remain the exclusive property of the Party that owns it. Each Party grants the other a non-exclusive, non-transferable, royalty-free license to use its Background Technology solely to perform the Co-Development Activities and to exploit Foreground Technology to the extent necessary to exercise rights granted under this Agreement.

5.2 Ownership of Foreground Technology shall be allocated as follows: Foreground created solely by one Party shall be owned solely by that Party; Foreground created jointly by employees or agents of both Parties shall be jointly owned by the Parties as tenants in common, subject to any contrary written allocation in the Project Plan. Joint ownership shall permit each Party to exploit jointly owned Foreground without accounting to the other, subject to any commercial licenses set forth in this Agreement.

6. LICENSES; COMMERCIALIZATION

6.1 Subject to ownership provisions above, the Parties may grant each other non-exclusive licenses to exploit Foreground Technology on terms to be negotiated in good faith. Unless otherwise agreed in writing, commercialization activities and revenue sharing shall be governed by the separate commercialization schedule attached to the Project Plan.

7. CONFIDENTIALITY

7.1 Each Party shall keep confidential and shall not disclose Confidential Information of the other Party except as necessary to perform this Agreement. Confidential Information shall not include information that is (a) in the public domain through no breach of this Agreement; (b) rightfully received from a third party without restriction; or (c) independently developed without use of the disclosing Party's Confidential Information.

7.2 The Parties shall use at least the same degree of care to protect Confidential Information as they use to protect their own confidential information, but in no event less than reasonable care.

8. REPRESENTATIONS AND WARRANTIES

8.1 Each Party represents and warrants that (a) it has the full corporate power and authority to enter into this Agreement; (b) execution and performance of this Agreement will not violate any third-party agreement or legal obligation; and (c) to its knowledge, its Background Technology does not infringe third-party intellectual property rights.

8.2 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

9. PAYMENT AND EXPENSES

9.1 The Parties shall share costs in accordance with the Budget attached to the Project Plan. Payments due between the Parties shall be made within thirty (30) days of receipt of a proper invoice unless otherwise specified in the Project Plan.

10. TERM AND TERMINATION

10.1 This Agreement shall commence on the Effective Date and continue until completion of the Co-Development Activities as set forth in the Project Plan, unless earlier terminated as provided herein.

10.2 Either Party may terminate this Agreement for material breach by the other Party if such breach remains uncured thirty (30) days after written notice. Termination shall not affect accrued rights or obligations, including payment obligations and IP ownership provisions.

11. INDEMNIFICATION

11.1 Each Party (the Indemnifying Party) shall indemnify, defend and hold harmless the other Party (the Indemnified Party) from and against any third-party claims, liabilities, damages, losses and expenses arising out of the Indemnifying Party's gross negligence, willful misconduct, or breach of its representations and warranties in this Agreement.

11.2 The Indemnified Party shall promptly notify the Indemnifying Party in writing of any claim for which indemnification is sought and shall permit the Indemnifying Party to control the defense and settlement thereof, provided that the Indemnifying Party may not settle any claim that imposes obligations on the Indemnified Party without the Indemnified Party's prior written consent.

12. LIMITATION OF LIABILITY

12.1 EXCEPT FOR LIABILITY ARISING FROM A PARTY'S GROSS NEGLIGENCE, WILLFUL MISCONDUCT, BREACH OF CONFIDENTIALITY, OR INDEMNIFICATION OBLIGATIONS, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS.

13. NOTICES

13.1 All notices required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below by certified mail, overnight courier, or personal delivery and shall be effective upon receipt.

14. ASSIGNMENT

14.1 Neither Party may assign or transfer its rights or delegate its duties under this Agreement, in whole or in part, without the prior written consent of the other Party, except that either Party may assign this Agreement in its entirety to an affiliate or to a successor in interest in connection with a merger, sale of substantially all assets, or similar corporate transaction, provided that the assignee assumes the assigning Party's obligations hereunder.

15. AMENDMENTS; WAIVER

15.1 No amendment or modification of this Agreement shall be effective unless in writing and signed by authorized representatives of both Parties. No waiver of any breach shall constitute a waiver of any subsequent breach.

16. GOVERNING LAW

16.1 This Agreement shall be governed by and construed in accordance with the laws of the state or jurisdiction specified below, without regard to conflict-of-law principles. The Parties submit to the exclusive jurisdiction of the courts located in such jurisdiction for resolution of any dispute arising out of this Agreement.

17. ENTIRE AGREEMENT

17.1 This Agreement, including the Project Plan and any attachments or exhibits expressly incorporated herein, constitutes the entire agreement between the Parties with respect to the subject matter and supersedes all prior and contemporaneous agreements, proposals and communications, whether oral or written.

18. SEVERABILITY

18.1 If any provision of this Agreement is held to be invalid, illegal or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect, and the Parties shall negotiate in good faith to replace the invalid provision with a valid provision that, to the greatest extent possible, achieves the original intent.

19. COUNTERPARTS

19.1 This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures transmitted by electronic means shall be treated as originals.

20. MISCELLANEOUS

20.1 The Parties shall comply with all applicable laws and regulations in performing their obligations under this Agreement. Nothing in this Agreement creates a partnership, joint venture, agency or employment relationship other than the contractual relationship set forth herein.

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