Document:

exv10w5

 

Exhibit 10.5

TRADEMARK LICENSE AGREEMENT

          This Trademark License Agreement (this “Agreement”), effective as of the 31st day of December,
2002 (the “Effective Date”), is made and entered into by and between Veraz Networks, Inc. (formerly
NexVerse Networks, Inc.), a Delaware corporation (“Company”) and ECI Telecom Ltd., an Israeli
corporation (“ECI”).

          WHEREAS, Company, ECI and ECI Telecom — NGTS, Inc., a Delaware corporation and an indirect
wholly owned subsidiary of ECI, are parties to that certain Share Exchange Agreement dated as of
October 30, 2002 (the “Share Exchange Agreement”); and

          WHEREAS, in furtherance of the Share Exchange Agreement, ECI desires to grant a license to
Company under the trademarks and service marks identified in Schedule A (the “Licensed
Marks”) and the “ECI” trade name as specified in Schedule A (the “Licensed Name”), and
Company desires to receive such rights from ECI.

          NOW, THEREFORE, in consideration of the foregoing premises and the agreements and covenants
set forth herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties do hereby agree as follows:

1. License Provisions.

1.1 Licensed Marks and Name. Subject to all of the terms and conditions of this Agreement,
ECI hereby grants to Company a limited, nonexclusive, royalty-free, non-transferable (except as
specifically set forth in Section 7), non-sublicensable (except as specifically set forth below)
right and license during the Term to use the Licensed Marks and the Licensed Name anywhere in the
world solely in connection with the Company Business and in the form and for the purpose specified
in Schedule A (the “License Purpose”), and solely in accordance with trademark usage
guidelines attached hereto as Schedule B, as may be amended and provided to Company by ECI
in ECI’s reasonable discretion from time to time. Company shall have the limited right to
sublicense the rights above to the Licensed Marks and the Licensed Name for the License Purpose to
a wholly owned subsidiary of Company (a “Subsidiary”); provided, however, that (i) each Subsidiary
be bound by the terms and conditions of this Agreement (including, without limitation, the license
restrictions and indemnification obligations), (ii) Company shall remain liable for the actions or
inactions of each Subsidiary with respect to the Licensed Marks and the Licensed Name, and (iii)
each such sublicense shall automatically terminate if the Subsidiary at any time ceases to be a
wholly-owned subsidiary of Company. As used in this Agreement, the term “Company Business” shall
mean the marketing, sales, distribution and service of the DCME product line, VoIP media gateway,
and end-to-end IP telephony.

1.2 Ownership and Restrictions.

     1.2.1 Ownership. The Licensed Marks and the Licensed Name, and all goodwill
pertaining thereto, are owned and shall be retained solely and exclusively by ECI. Except for the
limited license expressly set forth in Section 1.1, Company shall have no right, title or interest
in or to the Licensed Marks or Licensed Name and all rights not specifically granted to Company in

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Section 1.1 are expressly reserved to ECI. All use of the Licensed Marks and Licensed Name by
Company shall inure to the benefit of ECI for all purposes, including, without limitation, for
purposes of trademark registration and domain name registration, and nothing herein shall confer
any such rights to Company. Nothing in this Agreement shall in any way limit or restrict ECI’s
right, either by itself of through third parties, to use, promote, license or otherwise exploit the
Licensed Marks, the Licensed Name, or any portion thereof.

     1.2.2 General Restrictions. Company will not use the Licensed Marks in any manner
which is not specifically authorized by this Agreement. Without limiting the generality of the
foregoing, (a) Company shall not use any marks, trade names or Internet domain names confusingly
similar to the Licensed Marks and Licensed Name, (b) Company shall not use any Licensed Mark, the
Licensed Name, or portion thereof in conjunction with any Company trademark, trade name or logo in
a manner that suggests that such marks are a composite or singular mark, and (c) Company shall use
the Licensed Marks and Licensed Name in compliance with all applicable laws and regulations
(including, without limitation, all laws and regulations relating to the maintenance of the
validity and enforceability of a Licensed Mark or Licensed Name), and shall at all times conduct
its activities under this Agreement in a lawful manner. Company agrees that it shall cooperate to
avoid confusion or conflict arising out of Company’s and ECI’s (including any licensees of ECI) use
of the Licensed Marks and Licensed Name, and to resolve any such conflicts to the satisfaction of
ECI. Company shall not challenge the validity of the Licensed Marks or the Licensed Name, any
registrations or applications for registration thereof or ECI’s ownership thereof, or register or
attempt to register any Licensed Mark or the Licensed Name or any confusingly similar intellectual
property, including, without limitation, Internet domain names and any phrase in which a Licensed
Mark or the Licensed Name is used.

     1.2.3 Conflicting Uses. Company understands and agrees that it does not have the
right to use any of the Licensed Marks or the Licensed Name in any manner that might conflict with
the rights of any third party or tarnish, disparage, weaken or otherwise be reasonably expected to
adversely affect ECI’s rights in any of the Licensed Marks or the Licensed Name. If ECI determines
in its discretion that Company’s use of a Licensed Mark or the Licensed Name may or does infringe
the rights of any third party or adversely affect ECI’s rights in such Licensed Mark or Licensed
Name, Company will terminate or modify such use immediately in accordance with ECI’s instructions.
If Company fails to terminate or modify such use as reasonably directed by ECI, ECI shall have the
right to terminate this Agreement for breach as set forth in Section 4.2. If ECI identifies
conflicting uses requiring treatment under this Section, ECI agrees to work with Company in good
faith to identify alternatives under this Section permitting modification of conflicting uses,
prior to exercising its right of termination under this Section. Company shall notify ECI promptly
of any infringement or adverse affect which comes to Company’s attention, and ECI shall have the
sole right and authority to take action in any such case.

     1.2.4 Further Assurances. Company shall cooperate and assist ECI in securing,
perfecting, preserving and enforcing ECI’s rights in the Licensed Marks and the Licensed Name.
Without limitation, Company shall, at ECI’s sole expense, (a) execute and deliver to ECI, upon
ECI’s request, all documents which are necessary or desirable to secure, prefect or preserve ECI’s
rights in and to the Licensed Marks and the Licensed Name, to record Company as a registered user
of the Licensed Marks and the Licensed Name or to cancel such registered user

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recordation when appropriate and (b) cooperate and assist ECI in registering, and prosecuting
claims against infringers of, the Licensed Marks and the Licensed Name.

1.3 No Warranty. The grant of rights hereunder by ECI to the Licensed Marks and the
Licensed Name is made only to the extent of the rights actually held by ECI in such Licensed Marks
and Licensed Name. ECI makes no warranty, express or implied, and hereby disclaims all warranties,
with respect thereto or with respect to the rights of any third parties that may conflict with the
rights granted hereunder.

2. Quality Control.

2.1 Quality Standards. ECI shall have the right to exercise quality control over Company’s
use of the Licensed Marks and the Licensed Name, including over the materials, products and
services which are actually or planned to be offered, sold, marketed, distributed or provided
(“Offered”) by Company under or in connection with any of the Licensed Marks or the Licensed Name,
and to the degree deemed necessary by ECI to maintain the validity and enforceability of the
Licensed Marks and the Licensed Name and to protect the goodwill associated therewith. ECI
acknowledges that the quality of the materials, products and services Offered by ECI through ECI’s
business as of the Effective Date is adequate for this purpose. Accordingly, Company acknowledges
and is familiar with the high standards, quality, style and image of ECI, and Company shall at all
times during the Term use the Licensed Marks and the Licensed Name in a manner that is consistent
therewith; and Company shall ensure that the materials, products and services Offered by it under
or in connection with the Licensed Marks or the Licensed Name adhere to at least this level of
quality and shall not reflect adversely upon ECI, the Licensed Marks or the Licensed Name. Company
shall not use or display the Licensed Marks or the Licensed Name in any manner that might be
deceptive or misleading or that might bring ECI or the Licensed Marks of the Licensed Name into
disrepute. Each of the provisions of this Agreement relating to the proper use and protection of
the Licensed Marks and the Licensed Name, and of the goodwill associated therewith, is a material
provision of this Agreement.

2.2 Right to Sample and Inspect. To permit ECI to determine whether ECI’s standards of
quality are met by Company’s use of the Licensed Marks, the Licensed Name and the materials,
products and services which are actually or planned to be Offered by Company under or in connection
with any Licensed Mark or the Licensed Name, Company shall, upon ECI’s request, and at no cost to
ECI, during Company’s normal business hours (i) provide to ECI reasonably representative samples of
all such materials and products and the use of the Licensed Marks and the Licensed Name thereon or
in connection therewith, and (ii) permit ECI to review all such services at Company’s premises, in
the manner in which they are performed, and the use of the Licensed Marks and the Licensed Name in
connection therewith; provided, however, that ECI shall provide reasonable prior written notice of
any such review and any such review shall not interfere with the normal operation of Company’s
business.

2.3 Changes and Corrections. ECI shall have the right at any time to require Company to
make any changes and/or corrections with regard to such materials, products and/or services as may
be required in ECI’s reasonable judgment to maintain the quality standards prescribed by ECI, and
Company agrees to make and incorporate such changes or corrections at Company’s sole cost and
expense.

3.

 

3. Proprietary Notices.

3.1 Licensed Marks and Licensed Name. All advertising and promotional materials and all
other electronic, printed and written materials using a Licensed Mark or the Licensed Name shall
state that such Licensed Mark or Licensed Name is owned by ECI Telecom Ltd. Company agrees to use
one of the following forms of such notice, which ECI may change from time to time:

[LICENSED MARK OR LICENSED NAME]* is a [trademark][service mark][trade name] of ECI
Telecom Ltd. and is used by Veraz Networks, Inc. under license from ECI Telecom Ltd.

Where “*” indicates the symbol “®” where the applicable Licensed Mark is the subject of a
registration issued by the United States Patent and Trademark Office, and indicates the
symbol “TM” or “SM”, as appropriate, where the
applicable Licensed Mark is not the subject of such a registration.

4. Term; Termination; Effects of Termination.

4.1 Term. The term of the is Agreement (the “Term”) shall commence on the Effective Date
and end upon the last to occur of (a) three (3) years thereafter, (b) the date, if ever, upon which
ECI and its affiliates no longer own at least twenty percent (20%) of the outstanding shares of
Veraz Common Stock (as defined in the Share Exchange Agreement), on an as-converted basis, and (c)
the termination of this Agreement in accordance with Section 4.2.

4.2 Termination. Company may terminate this Agreement and the licenses granted hereunder
at any time upon written notice to ECI. ECI may terminate this Agreement and the licenses granted
hereunder upon written notice to Company if Company (i) materially fails to perform or comply with
the terms and conditions of this Agreement and fails to cure such breach within thirty (30) days
following receipt of written notice thereof, (ii) (a) makes a general assignment for the benefit of
its creditors, (b) institutes proceedings to be adjudicated a voluntary bankrupt, or consents to
the filing of a petition of bankruptcy against it, (c) seeks reorganization under any bankruptcy
act, or consents to the filing of a petition seeking such reorganization, or (d) has a decree
entered against it by a court of competent jurisdiction appointing a receiver, liquidator, trustee
or assignee in bankruptcy or in insolvency covering all or substantially all of its property or
providing for the liquidation of its property or business affairs, and such decree is not vacated
within thirty (30) days.

4.3 Effects of Termination. Upon any termination of this Agreement, Company shall have
twenty (20) days from the effective date of termination within which to cease all usage of all
Licensed Marks and the Licensed Name. Also upon the termination or expiration of this Agreement,
all equities, goodwill, title or other rights in and to the Licensed Marks and the Licensed Name
shall immediately and automatically revert to ECI, and Company shall be deemed to have assigned,
transferred and conveyed any equities, goodwill, title or other rights which may have accrued
through its use of the Licensed Marks or the Licensed Name to ECI. Licensee and its Affiliates
shall cease all further use of the Licensed Marks and the Licensed Name, or of any similar mark or
name, including, but not limited to, any mark or name consisting of or incorporating “An ECI
Telecom Company”. Company shall take all actions reasonably necessary to prevent further use by
Company of the Licensed Marks and the Licensed

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Name. In
the event Company is deemed to hold any interest in any trademark, service mark, trade name or domain name in which the Licensed Marks or the Licensed Name appear, Company shall
promptly execute all papers and take all actions reasonably necessary to transfer all right, title
and interest in and to such mark or name to ECI.

5. Indemnification. Company agrees to defend, indemnify and hold ECI and its officers,
directors, employees, subsidiaries, affiliates, agents, servants, representatives, successors,
transferees, heirs, assigns, and attorneys harmless from any and all costs and expenses (including
reasonable attorneys’ fees), liabilities, damages or other losses incurred in connection with a
claim by any third party, or regulatory or government body (collectively, “Losses”), arising out of
a breach of this Agreement by Company, or otherwise out of any use by Company of the Licensed Marks
or the Licensed Name. The foregoing indemnification obligations shall be in addition to, and not
exclusive of, the indemnification obligations, if any, set forth in the Share Exchange Agreement.

6. Independent Contractors. For purposes of this Agreement, the parties hereto are
independent contractors and are not partners or joint venturers, and neither party has any right or
authority to bind the other in any way.

7. Assignment. Other than as set forth in subsection 1.1 above, the rights granted to and
obligations undertaken by the parties under this Agreement may not be assigned, sublicensed or
otherwise transferred (whether by stock or asset sale, share exchange, reorganization or otherwise)
without the prior written consent of the other party; provided, however, that ECI may assign this
Agreement to an Affiliate, or to a third party that purchases all or substantially all of its
business or assets, provided that such Affiliate or third party undertakes all of ECI’ s
obligations set forth in this Agreement. Any attempted assignment or transfer of rights or
obligations under this Agreement except as expressly permitted hereunder shall be deemed null and
void. For purposes of this Agreement, an “Affiliate” shall mean, with respect to any person, any
other person that controls, is controlled by or is under common control with the first person.

8. Notices. All notices, requests, demands and other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have been duly given
only if personally delivered, delivered by confirmed facsimile transmission, delivered by a major
commercial rapid delivery courier service or mailed by certified or registered mail, return receipt
requested, postage prepaid, to a party at the address set forth below or such other address as a
party last provided to the other by written notice:

If to ECI, to:

ECI Telecom Ltd.

30 Hasivim Street

Petah Tikva 49133, Israel

Attn: Martin Ossad

Fax: 972 (3) 926-6070

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with a copy to:

Brobeck, Phleger & Harrison LLP

1633 Broadway, 47th Floor

New York, New York 10019

Attn: Richard Gilden

Fax: (212) 586-7878

If to the Company, to:

Veraz Networks, Inc.

926 Rock Avenue

San Jose, California 95131

Attn: Amit Chawla

Fax: (408) 750-9409

with a copy to:

Cooley Godward LLP

Five Palo Alto Square

3000 El Camino Real

Palo Alto, California 94306-2155

Attn: James Fulton

Fax: (650) 849-7400

9. General.

9.1 Binding Effect. This Agreement shall be binding on the parties, their permitted
successors and assigns, and the parties hereby warrant that the undersigned are authorized to
execute this Agreement on behalf of the respective parties.

9.2 Entire Agreement. Upon execution by both parties, this Agreement, together with the
Share Exchange Agreement, shall constitute the entire agreement between the parties with respect to
the subject matter hereof and shall supersede all proposals, oral or written, all negotiations,
conversations, discussions and past dealings between or among the parties relating to the subject
matter of this Agreement. In the event of a conflict between the terms of this Agreement and the
terms of the Share Exchange Agreement, the terms of this Agreement shall control.

9.3 Headings. Headings and captions are for convenience of reference only and shall not be
deemed to interpret, supersede or modify any provisions of this Agreement.

9.4 Amendment, Modification and Waiver. The failure of either party to enforce its rights
or to require performance by the other party of any term or condition of this Agreement shall not
be construed as a waiver of such rights or of its right to require future performance of that term
or condition. Any amendment or modification of this Agreement or any waiver of any breach of any
term or condition of this Agreement must be in a writing signed by each of the parties in order to
be effective and shall not be construed as a waiver of any continuing or succeeding

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breach of such term or condition, a waiver of the term or condition itself or a waiver of any right
under this Agreement.

9.5 Representations and Warranties.

Each Party hereby represents and warrants to the other party that:

          (i) it is duly organized and validly existing under the laws of the jurisdiction of its
formation and has full power and authority to enter into this Agreement and to carry out the
provisions hereof;

          (ii) this Agreement is a legal and valid obligation binding upon such party and enforceable in
accordance with its terms;

          (iii) the execution, delivery and performance of the Agreement by such party does not conflict
with any agreement, instrument or understanding, oral or written, to which it is a party or by
which it is bound, nor violate any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it; and

          (iv) it is duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder.

9.6 Severability. To the maximum extent permissible under applicable law, if one or more
provisions of this Agreement are held to be illegal, invalid or unenforceable under applicable law,
such provision shall be modified or excluded from this Agreement to the minimum extent necessary so
that the balance of the Agreement shall remain in full force and effect and enforceable. The
parties further agree to use reasonable efforts to amend the Agreement so that its effect remains
as close as possible to the original intent of the parties.

9.7 Governing Law and Venue. This Agreement shall be governed by the laws of the State of
New York, without regard to the choice of law rules thereof, and the sole jurisdiction and venue
for actions related to the subject matter hereof shall be conducted in the state or federal courts
of the State and County of New York.

9.8 Nonexclusive Remedies. The rights and remedies of a party set forth herein with
respect to the failure of the other party to comply with the terms of this Agreement (including,
without limitation, rights of termination of this Agreement) are not exclusive, the exercise
thereof shall not constitute an election of remedies and the aggrieved party shall in all events be
entitled to seek whatever additional remedies may be available at law or in equity. The parties
acknowledge and agree that nothing contained in this Agreement is intended to affect or limit the
rights and obligations of the parties set forth in the Share Exchange Agreement.

9.9 Survival. The provisions of Sections 1.2.4 (Further Assurances) and 4.3 (Effects of
Termination), and any other provision which by its nature should survive, shall survive any
expiration or termination of this Agreement for any reason.

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9.10 Counterparts. This Agreement may be executed in one or more counterparts (including
facsimile counterparts), each of which shall be deemed an original and all of which, when taken
together, shall constitute one and the same instrument.

[Remainder of this page intentionally left blank]

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          IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their
authorized representatives as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	ECI TELECOM LTD.	 	 	 	VERAZ NETWORKS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signatory:

	 	/s/ Giora Bitan
	 	 	 	Signatory:
	 	/s/ Amit Chawla
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name: Giora Bitan	 	 	 	Name: Amit Chawla	 	 
	Title: Executive VP and CFO	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 	 	 	 	 

 

 

SCHEDULE A — LICENSED MARKS, LICENSED NAME & LICENSE PURPOSE

SCHEDULE B — TRADEMARK USAGE GUIDELINESexv10w6

 

Exhibit 10.6

EXHIBIT D TO SEPARATION AGREEMENT

INTELLECTUAL PROPERTY LICENSE AGREEMENT

     This Intellectual Property License Agreement (this “Agreement"), is entered into as of October
___, 2002 (the “Effective Date") by and among ECI TELECOM LTD. (“ECI TELECOM”), ECI TELECOM-NGTS
LTD. (“NGTS”), and VERAZ NETWORKS LTD. [formerly Chorale Networks Ltd.] (“Veraz"). ECI TELECOM and
NGTS are collectively referred to in this Agreement as “ECI.” ECI, on the one hand, and Veraz, on
the other, may each individually be referred to in this Agreement as a “Party”, and collectively
referred to in this Agreement as the “Parties”.

WITNESSETH:

     WHEREAS, ECI and Veraz have entered into a Separation and Asset Purchase Agreement dated as of
                     ___, 2002 (the “APA”); and

     WHEREAS, it is a condition to closing of the APA that this Agreement be entered into between
the Parties;

     NOW, THEREFORE, it is hereby agreed by and between the Parties as follows:

ARTICLE 1

DEFINITIONS

As used herein, the following terms have the following meanings:

     1.1 “Assignment Agreement” shall mean the Intellectual Property Assignment Agreement by and
between the Parties of even date herewith.

     1.2 “Veraz Know-How” shall have the meaning ascribed to it in the Assignment Agreement.

     1.3 “Veraz Patents” shall have the meaning ascribed to it in the Assignment Agreement.

     1.4 “Closing Date” and “Closing” shall have the respective meanings ascribed to them in the
APA.

     1.5 “DCME Distribution Business” shall have the meaning ascribed to it in the APA.

     1.6 “DCME Know-How” shall mean all Know-How that pertains to DCME products and services or is
required for the conduct of the DCME Distribution Business that exists on the Closing Date as
listed in Appendix 1.6 attached hereto.

1.

 

     1.7 “DCME Patents” shall mean the Patents listed in Appendix 1.7 attached hereto.

     1.8 “DCME Trademarks” shall mean the trademarks, service marks, trade names and service marks
listed in Appendix 1.8 attached hereto.

     1.9 “DCME Manufacturing and Distribution Agreement” shall mean the DCME Manufacturing and
Distribution agreement signed between the Parties as of the date hereof.

     1.10 “ECI IP” shall mean all ECI Know-How and ECI Patents.

     1.11 “ECI Know-How” shall mean the Know-How owned, licensed, or used by ECI listed in Appendix
1.11 attached hereto.

     1.12 “ECI Patents” shall mean the Patents owned or sublicenseable by ECI, excluding all Veraz
Patents and DCME Patents, and listed in Appendix 1.12 attached hereto.

     1.13 “Intellectual Property Rights” shall mean all rights under the laws of any jurisdiction
in the world with respect to: (i) rights associated with works of authorship, including exclusive
exploitation rights, copyrights, moral rights, and mask works; (ii) trade secret rights; (iii)
contract rights in intellectual property of every kind and nature; and (iv) rights in or relating
to registrations, renewals, extensions, combinations, divisions, and reissues of, and applications
for, any of the rights referred to in subclauses (i) through (iii) above; but excluding all
Patents, trademarks, service marks, trade names, and service names.

     1.14 “Know-How” shall mean all technology, software (whether in source code or in executable
code), ideas, concepts, know-how, techniques, technical and commercial information, data and
documents of whatever kind, including drawings, specifications, photographs, samples, models,
processes, procedures, reports and correspondence, including works of authorship embodying the
foregoing, as well as information incorporated in formal or informal databases, correspondence,
email, proprietary methods and processes of conducting business as well as know-how and show-how,
customer lists, marketing plans, business plans, strategies, workflows and other information of
value, and maintained in secrecy.

     1.15 “Patents” shall mean all patents, utility model applications, pending patent applications
and industrial property rights, including any and all divisionals, continuations, reexaminations,
renewals, provisionals, continuations-in-part, re-issues, and foreign equivalents thereof.

     1.16 “VoIP” shall mean Voice over Internet Protocol.

     1.17 “Veraz Business” shall mean the development manufacturing, marketing sale distribution
and service of products and solutions for gateways and/or soft-switches for point-to-point, point
to multipoint and/or switching and non-switching applications for connecting end to end telephony
or telephony over packet networks. Said gateways include classification and/or compression of
telephony signals such as voice, modem, fax and/or other signals such as video conference, and
conversion of the classified and/or compressed signals into packets in format suitable for media
such as Ethernet, IP ATM or MPLS.

2.

 

ARTICLE 2

LICENSE GRANTS

     2.1 Exclusive License for DCME Patents and DCME Know-How for Veraz Business. ECI
hereby grants to Veraz an exclusive (with respect to both ECI and all other parties with respect to
activities conducted within the Veraz Business), worldwide, irrevocable, perpetual, fully paid,
royalty-free, transferable in accordance with Section 6.2, sublicensable license:

          (a) under the DCME Patents to use, develop, design, integrate, make, have made, market, sell,
offer to sell, lease, offer to lease, import and transfer products and services with respect to
activities conducted within the Veraz Business, and to use any apparatus and practice any method in
the manufacture or use thereof; and

          (b) under ECI’s Intellectual Property Rights to use, develop, design, integrate, reproduce,
display, perform, import, modify, create derivative works of, adapt, further develop, distribute
directly or indirectly, and otherwise exploit the DCME Know-How with respect to any activities
conducted within the Veraz Business.

     2.2 Nonexclusive License for ECI Patents and ECI Know-How for Veraz Business. ECI
hereby grants to Veraz a nonexclusive, worldwide, irrevocable, perpetual, fully paid, royalty-free,
transferable in accordance with Section 6.2, sublicensable license:

          (a) under the ECI Patents to use, develop, design, integrate, market, sell, offer to sell,
lease, offer to lease, import and transfer products and services with respect to activities
conducted within the Veraz Business, and to use any apparatus and practice any method in the
manufacturer or use thereof; and

          (b) under ECI’s Intellectual Property Rights to use, develop, design, integrate, reproduce,
display, perform, import, modify, create derivative works of, adapt, further develop, distribute
directly or indirectly, and otherwise exploit the ECI Know-How with respect to activities conducted
within the Veraz Business.

     2.3 Nonexclusive License for the DCME Distribution Business. ECI hereby grants to
Veraz a nonexclusive, worldwide, perpetual and revocable in accordance with the termination rights
set forth in the immediately following sentence, fully paid, royalty-free, transferable in
accordance with Section 6.2, license:

          (a) under the DCME Patents and ECI Patents to use, develop, design, integrate, market, sell,
offer to sell, lease, offer to lease, import and otherwise transfer any products and services with
respect to activities conducted within the DCME Distribution Business; and

          (b) under ECI’s Intellectual Property Rights to use, develop, design, integrate, reproduce,
display, perform, import, modify, create derivative works of, adapt, further develop, distribute
directly or indirectly, and otherwise exploit the ECI Know-How and DCME Know-How with respect to
activities conducted within the DCME Distribution Business; and

3.

 

          (c) to have applied the DCME Trademarks on DCME products obtained from ECI, and use the DCME
Trademarks in connection with marketing, sales, distribution, service and support activities,
anywhere in the world, for DCME products obtained from ECI; subject to the guidelines and
restrictions set forth in Appendix 2.3(c) hereto.

Veraz may sublicense the rights granted in this Section 2.3 to the extent necessary to develop,
market, sell, offer to sell, lease, offer to lease, import, distribute, service and support
products or services with respect to activities conducted in connection with the DCME Distribution
Business. Additionally, ECI may, at its discretion, terminate prospectively the license rights
granted in this Section 2.3 with respect to Veraz’s ability to perform licensed activities
hereunder if Veraz no longer provides service and support for the DCME products or services made
available to Veraz under the DCME Manufacturing and Distribution Agreement.

     2.4 Additional Obligations of ECI.

          (a) ECI hereby agrees not to license, use or otherwise exploit in any manner the DCME Patents,
DCME Know-How, or ECI IP in connection with any activities contained within the Veraz Business,
except:

               (i) to manufacture and supply exclusively to Veraz VoIP products and services under the VoIP
Manufacturing and Distribution Agreement; or

               (ii) as permitted in accordance with the terms and conditions of the License Agreement
referred to in Section 2.5(a) below and attached hereto as Appendix 2.4(a) and as shall be
permitted under the licenses which may be granted pursuant to Section 2.5(b), if any.

          (b) In the event that ECI shall desire to assign or otherwise transfer, to any third party,
all or part of ECI’s interest in (i) the DCME Know-How, (ii) the DCME Patents, or (iii) any ECI IP,
ECI shall, subject to ECI’s compliance with confidentiality obligations (if any and only to the
extent thereunder) made to the proposed assignee and applicable securities laws, inform Veraz in
writing within a reasonable period of time prior to entering into an agreement for any planned
assignment. The notice shall include the general terms of the proposed assignment or transfer. In
the event any assignment or transfer is made by ECI of any of the DCME Know-How, DCME Patents or
ECI IP such assignment or transfer shall be made subject to the license grants, covenants and
license restrictions granted or undertaken by ECI in and to any such DCME Know-How, DCME Patents or
ECI IP under this Agreement.

          (c) Should ECI decide to abandon the prosecution or maintenance of any DCME Patents or ECI
Patents, ECI shall provide promptly to Veraz written notice of any such planned abandonment and,
upon Veraz’s written request and at Veraz’s expense, and provided that Veraz has requested in
writing for ECI to assign and transfer ECI’s ownership rights in and to any such DCME Patents or
ECI Patents within thirty (30) days of such notice, ECI shall unconditionally and irrevocably
assign and transfer complete and exclusive ownership in and to any such DCME Patents or ECI Patents
to Veraz upon reasonable terms that are to be agreed upon by the Parties. Upon the making of any
such assignment or transfer to Veraz, Veraz

4.

 

covenants to grant to ECI a royalty-free and fully paid license under such assigned DCME
Patents or ECI Patents of the same scope and duration and with the same restrictions as provided
for other similar patents for which Veraz grants a license to ECI under the License Agreement
attached as Appendix 2.4(a) hereto. Any assignment or transfer that is made by ECI of any DCME
Patents or ECI Patents pursuant to the provisions of this Section 2.4(c) shall be made subject to
any underlying license grants, covenants and license restrictions granted or undertaken by ECI in
and to any such DCME Patents or ECI Patents. Upon written request by Veraz, ECI shall assist in
the completion of such assignment at the sole cost of Veraz.

          (d) If Veraz determines that there are any items that are being used by ECI in the Veraz
Business or DCME Distribution Business on the date of execution of this Agreement, but have not
been specifically listed or identified on Appendices 1.6, 1.7, 1.8, 1.11 or 1.12, then Veraz may
request in writing for ECI to license the applicable item to Veraz in accordance with the
respective terms under this Agreement which relate to the license of the items appearing in the
Appendix in which such item should have been listed. Upon delivery of such notice to ECI and
subject to ECI’s written agreement, which agreement shall not be unreasonably withheld, delayed or
conditioned by ECI, ECI will be deemed, without any further action necessary, to have licensed to
Veraz such items in accordance with the respective terms under this Agreement which relate to the
license of other items appearing in the Appendix in which such item should have been listed.

          (e) For a period of two (2) years after the date of execution of this Agreement by the
Parties, at Veraz’s written request and subject to the availability and agreement by the Parties
upon the amounts, including the rates for support, to be paid by Veraz for technical support to be
provided by ECI, ECI (through its Celtro division) will provide at mutually agreed dates and times
technical support to the extent required for Veraz to resolve technical problems encountered with
Veraz’s use of the DCME Know-How in connection with the Veraz Business. Any amount that is agreed
upon between the Parties to be paid by Veraz for technical support to be provided hereunder shall
be paid within ten (10) days after services are performed by ECI. ECI will invoice Veraz for
technical support services on at least a monthly basis after services are rendered. Any technical
support that will be provided to Veraz by ECI hereunder, at Veraz’s written request, will be
further limited solely to the permitted use by Veraz of the DCME Know-How that is existing as of
Closing and generally available at the time of Veraz’s written request in accordance with the
license rights granted in this Section 2.

     2.5 Additional Obligations of Veraz.

          (a) License Back. Concurrently with the execution of this Agreement, Veraz shall
enter into a license agreement with NGTS to provide it rights in Veraz Patents and Veraz Know-How
in respect of its Celtro product line, all as set forth in the license agreement attached as
Appendix 2.4(a) hereto (the “License
Agreement”).

          (b) Other License Backs. If Veraz elects to grant any license under the Veraz Patents
or to use the Veraz Know-How (the “VoIP License”), it shall so notify in writing to ECI and upon
ECI’s request, Veraz shall grant ECI a nonexclusive license under the Veraz Patents or

5.

 

to use the Veraz Know-How on terms and conditions that are consistent with and no less
favorable in any material respect than those terms and conditions of the VoIP License.

          (c) Third Party Patents and Know-How. The attached Appendix 2.5(c) sets forth DCME Know-How
and ECI Know-How that is licensed to ECI from third parties, and licensed hereunder by ECI to
Veraz, and for which the license in respect of such is subject to the terms and conditions of a
third party license by which ECI is bound in respect thereof. ECI shall use its reasonable
commercial efforts to obtain and provide to Veraz prior to Closing all third-party consents with
regard to the license to Veraz hereunder of the items of DCME Know-How and ECI Know-How listed in
Appendix 2.5(c) which are marked as material in such schedule. Prior to exercising its rights
hereunder in respect to the remaining DCME Know-How and ECI-Know listed in Appendix 2.5(c), ECI
shall provide to Veraz, and Veraz shall review, said terms and conditions to ensure Veraz’s
compliance therewith. ECI shall use commercially reasonable efforts to obtain properly all
third-party consents, if any, that are necessary for the exercise by Veraz of the licenses
hereunder.

ARTICLE 3

INTELLECTUAL PROPERTY MATTERS

     3.1 Each Party shall promptly notify the other Party of any and all infringements, imitations,
simulations or other illegal use or misuse of the licensed DCME Know-How, DCME Patents or DCME
Trademarks which come to its attention. ECI shall determine whether to take any action to prevent
the infringement, imitation, simulation or other illegal use or misuse of the DCME Know-How, DCME
Patents or DCME Trademarks. If ECI elects not to take such action, Veraz may take such action if
it has received ECI’s prior written approval to take such action. In this event, ECI shall, at
Veraz’s expense, cooperate in such action with Veraz including, without limitation, joining as a
party. Any money recovered by way of damages or otherwise with respect to such action shall be
kept by the Party which bore the costs of such action; or, in any case where the Parties have
shared the costs, such money shall be shared in proportion to the costs borne by each Party. Each
Party shall, at the request of the other, render all reasonable assistance in connection with any
matter pertaining to the protection, enforcement or infringement of the licensed DCME Know-How,
DCME Patents or DCME Trademarks, whether in the courts, administrative or quasi-judicial agencies,
or otherwise, at the cost of the requesting party.

     3.2 In the event that, Veraz decides to defend itself against patent claims or other illegal
use or misuse relating to the DCME Patents and DCME Know-How, ECI shall, at the request of Veraz,
provide reasonable assistance to enable Veraz to defend such claims and immediately initiate a
limited assignment of joint ownership rights in specified DCME Patents and DCME Know-How for the
period of time, if and to the extent required for the defense (including counter-claims) of such
claims, and to the extent not sufficient for such defense, ECI shall, upon Veraz’s reasonable
request, join Veraz in any action to defend such claims and consent to the granting to third
parties by Veraz, without any financial accounting to ECI or the making of any payment to ECI, of
any necessary licenses to specified DCME Patents and DCME Know-How.

6.

 

     3.3 Any and all ECI Know-How is provided by ECI to Veraz “AS IS,” and ECI shall have no
liability whatsoever to Veraz in connection with Veraz’s use thereof in any manner whatsoever.
Additionally, ECI makes no representations or warranties regarding whether any of the DCME or ECI
Patents are valid or useful to Veraz. ECI makes no representation, extends no warranties or
indemnification of any kind, expressed or implied, nor assumes any responsibilities whatsoever with
respect to the commercial utility or quality of any of the licensed Patents, Know-How, Trademarks
or other Intellectual Property Rights licensed hereunder (the “Licensed IPR”). ECI DISCLAIMS ALL
WARRANTIES, INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE AND NONINFRINGEMENT OF THIRD PARTY RIGHTS. ECI SHALL HAVE NO OBLIGATIONS
OR LIABILITIES UNDER THIS AGREEMENT RELATING TO THE USE BY VERAZ OF ANY SUCH LICENSED IPR.

     3.4 EXCEPT FOR BREACHES AND VIOLATIONS OF CONFIDENTIALITY OBLIGATIONS, IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR OTHER
INDIRECT DAMAGES, INCLUDING LOST PROFITS, RESULTING FROM OR ARISING OUT OF THIS AGREEMENT OR THE
PERFORMANCE BY SUCH PARTY OF ANY OBLIGATIONS HEREUNDER, OR FOR THE COST OF THE PROCUREMENT OF
SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES. FOR THE AVOIDANCE OF DOUBT, DAMAGES INCURRED BY VERAZ
FROM ECI’S BREACHES OR VIOLATIONS OF THE LICENSE GRANTS OR EXCLUSIVITY OBLIGATIONS IN SECTION
2.4(A) OF THIS AGREEMENT SHALL BE DEEMED DIRECT DAMAGES TO WHICH THIS LIMITATION OF LIABILITY
PROVISION SHALL NOT APPLY.

     3.5 Veraz hereby acknowledges and agrees that ECI owns the Licensed IPR that is licensed by
ECI hereunder and all rights therein and that nothing in this Agreement shall give Veraz any right,
title or interest in or to such Licensed IPR, other than the limited and restricted licenses and
rights granted in Section 2 of this Agreement and the rights of a limited assignment of joint
ownership rights which may be granted in Section 3.2 of this Agreement.

ARTICLE 4

GOVERNING LAW; DISPUTE RESOLUTION

     4.1 This Agreement shall be governed by and construed in accordance with the laws of the State
of Israel, regardless of the laws that might otherwise govern under applicable principles of
conflicts of laws thereof.

     4.2 In the event of any controversy or claim arising out of or in connection with this
Agreement, Section 11.5 of the APA shall govern, mutatis mutandis.

7.

 

ARTICLE 5

CONFIDENTIALITY

     5.1 Veraz acknowledges and agrees that all Confidential Information of ECI that it receives or
obtains prior to Closing or receives or obtains in the context of this Agreement is the valuable
proprietary information of ECI. Except as expressly allowed herein, Veraz will hold in confidence
and not use or disclose any Confidential Information of ECI for any purpose other than for the
purposes contemplated under this Agreement, and shall similarly bind its employees. Veraz will
exercise the same level of care to prevent unauthorized disclosure or compromise of the
Confidential Information of ECI as it uses to safeguard its own Confidential Information, but in no
event will Veraz use less than reasonable care. Veraz shall not be obligated under this Section 5
with respect to information it can document:

          (a) is or has become readily publicly available without restriction through no fault of Veraz
or its employees or agents; or

          (b) is required to be disclosed by legal process, court order or governmental regulations,
provided that Veraz, subject to any such process, order or regulations, shall furnish notice of any
required disclosure and reasonably assists ECI in any effort of ECI to limit or restrict any such
disclosure.

     5.2 For purposes hereof, “Confidential Information” means, without limitation, the DCME
Know-How, ECI Know-How and any informative technical material, technical information, know-how,
software and firmware (including all copies derived from material furnished hereunder) of ECI,
whether written or oral, furnished to or obtained by Veraz that is marked as, or otherwise
reasonably understood by Veraz to be, confidential to ECI.

ARTICLE 6

ASSIGNMENT

     6.1 This Agreement and the rights, duties and liabilities of the Parties under this Agreement
will bind and inure to the benefit of their successors and assigns, respectively, as permitted
pursuant to Section 6.2.

     6.2 Neither Party may assign, transfer or delegate its rights and obligations under this
Agreement, either in whole or in part, except with the prior written consent of the other Party;
provided, however, that a Party may assign this Agreement without obtaining such prior written
consent to a successor-in-interest to it that agrees to be bound by all of the terms and conditions
in this Agreement, in connection with (i) the sale of all or substantially all of the assets of
such Party, (ii) the purchase of all or a majority of such Party’s outstanding voting shares, or
(iii) a consolidation, merger or reorganization of such Party. Notwithstanding the foregoing,
Veraz may assign or transfer the non-exclusive license for the DCME Distribution Business that is
granted by ECI under Section 2.3 above only in connection with an assignment or transfer of the
DCME Manufacturing and Distribution Agreement or any of Veraz’s rights thereunder to the

8.

 

extent permitted under the DCME Manufacturing and Distribution Agreement. Any such attempted
assignment, transfer or delegation in derogation of the foregoing shall be null and void and
without any legal effect.

ARTICLE 7

MISCELLANEOUS

     7.1 The term of this Agreement shall commence upon the Effective Date and will continue
indefinitely.

     7.2 All notices, requests and other communications hereunder shall be in writing and shall be
governed by Section 11.13 of the APA, mutatis mutandis.

     7.3 The headings of this Agreement are included for convenience only, and the articles or
sections shall not be construed in accordance with their headings.

     7.4 The Parties hereto agree that the invalidity or unenforceability of any of the provisions
hereof shall not in any way affect the validity or enforceability of any other provisions of this
Agreement except those from which the invalidated or unenforceable provisions comprise an integral
part or are otherwise clearly inseparable.

     7.5 Nothing contained in this Agreement shall be deemed or construed to constitute or create
among the Parties hereto a partnership, association, joint venture franchise or other agency.

     7.6 This Agreement is the entire agreement by and among the parties with respect to this
subject matter, and supersedes all prior discussions, negotiations, communications and agreements
with respect thereto. This Agreement may be modified only in writing signed by all Parties hereto.
Any purported oral modification of this Agreement shall be without any effect whatsoever.

     7.7 The failure of any party to enforce at any time any of the provisions of this Agreement
shall not be deemed to be a waiver of the right of such Party thereafter to enforce such provision.

     7.8 Each Party hereto shall execute and cause to be delivered to the other Party hereto such
instruments and other documents, and shall take such other actions, as such other Party may
reasonably request for the purpose of carrying out or evidencing any of the transactions
contemplated in this Agreement.

     7.9 In the event of any breach of any of the confidentiality obligations, license grants,
license restrictions or additional obligations of ECI in Section 2.4(a), each party hereby agrees
that the harm suffered by the affected party would not be compensable by monetary damages alone
and, accordingly, that the affected party shall, in addition to any other available legal or
equitable remedies, be entitled to seek an injunction or other equitable relief against the other
party in connection with any breach or violation of any such provisions.

9.

 

     7.10 This Agreement establishes the rights, duties and obligations of ECI and Veraz with
respect to the subject matter hereof.

     7.11 The obligations of any Party shall be excused to the extent, and for the period during
which, that performance is rendered impossible by strike, fire, flood, earthquake, other natural
disasters, governmental acts, orders or restrictions, or any other reason beyond the reasonable
control of such Party.

     7.12 Each Party’s performance of this Agreement, including without limitation Veraz’s use of
the Licensed IPR, shall at all times comply with all requirements, rules, laws and regulations of
all governmental bodies having proper jurisdiction, and including without limitation any
requirements to obtain any licenses under the export or similar laws applicable jurisdiction, and
including without limitation any requirements to obtain any licenses under the export or similar
laws of the United States.

     [SIGNATURE PAGE FOLLOWS]

10.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Effective Date.

	 	 	 	 	 
	VERAZ NETWORKS LTD.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Zamir Segev
	 	 
	 

	 	 	 	 
	Printed Name: Zamir Segev	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	ECI TELECOM LTD.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Illegible	 	 
	 

	 	 	 	 
	Printed Name:	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	ECI TELECOM-NGTS LTD.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Giora Bitan	 	 
	 

	 	 	 	 
	Printed Name: Giora Bitan	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 

11.

 

LIST OF APPENDICES:

	 	 	 
	Appendix 1.6

	 	“DCME Know-How”
	 
	 	 
	Appendix 1.7

	 	“DCME Patents”
	 
	 	 
	Appendix 1.8

	 	“DCME Trademarks”
	 
	 	 
	Appendix 1.11

	 	“ECI Know-How”
	 
	 	 
	Appendix 1.12

	 	“ECI Patents”
	 
	 	 
	Appendix 2.3(c)

	 	“Guidelines and restrictions to the use of the DCME Trademarks”
	 
	 	 
	Appendix 2.4(a)

	 	“License Agreement”
	 
	 	 
	Appendix 2.5(c)

	 	“DCME Know-How which may be licensed to ECI from third parties”

12.

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