COMPTEL OYJ,FINLAND vs ADIT, NEW DELHI

Before: SHRI & SHRI PRASHANT MAHARISHI, ACOUNTANT MEMBE

Asese by : Sh. Ravi Sharma, Adv Re venue by: Sh . Anuj Arora, CIT DR Date of Hearing 20 /01/2016 Date of pronouncement 12 / 0 4 /2016 O R D E R PER PRASHANT MAHARISHI, A. M. 1 . For A. Y. 207 - 08 is apeal filed by the asese against the order dated 16.09.2010 pased by Ld. Assessing officer ( hereinaf for the Asesment Year 207 - 08. On identical orders pased by ld. AO for AY 208 09 and 20 09 - 10 , asese has filed apeal raising identical grounds. 2 . The asese has raised the folowing groun ds of apeal in for Asesment Year: 207 - 08 : - “1. That on the facts and circumstances of the case & in law, the impugned order pased by the Asesing Oficer ('AO') under s ection 143(3) read with Page 2 of section 1 4C of the Income - tax Act, 1961 ("the Act") is bad in law and void ab - initio. 1.1 That on the facts and circumstances of the case & in law, the Ld. AO ered in asesing the income of the apelant at Rs, 292,124,834/ - as against the nil income declared by the apelant.

That on the facts and circumstances of the case & in law, the Ld. AO/DRP ered in holding that the receipts in the hands of the apelant from sale of "standard software" are in thenature of royalty and hence is taxable under section 9(1) (vi) of the Act a nd as wel as under A c t 13(3) of the Double Taxation Avoidance Agrement (DTA) betwen the India and Finland, while doing so, the Ld. AO/DRP held; 2.1 That the apelant is receiving the payment for conferment of a right alowing the use of a copyrigh t; 2.2 That in the software a proces is made available to the customer whouses the proces while carying out their busines; 2.3 That consideration received by the apelant from the sale of standard software is for the use of comercial cum scien tific equipment .

3. That on the facts and circumstances of the case & in law, the Ld. AO ered in holding that the ancilary services provided by the apelant along with the sale of software comes within the purview of fes for technical services und er Art 13(4) (a)/ (b) of DTA. 3.1 That the Ld. AO failed to apreciate that the services provided by the apelant are ancilary and subsidiary as wel as inextricably and esentialy linked to the sale of software and therefore comes within the purvi ew of exclusion clause as per Art 13(5) (a) of DTA.

4. That on the facts and circumstances of the case & in law, the Ld. AO/ DRP ered in not alowing the TDS credit for the payments received on net of tax contracts in spite of charging to tax the gros amount of the payments.

5. That on the facts and circumstances of the case & in law, the Ld. AO/DRP ered in not aplying the corect conversion rate on the grosed up amount of USD 39,5,712 and coming to the wrong IN R equiva lent of Rs. 17,17,49,104/ - .

That on the facts and circumstances of the case & in law, the Ld. AO ered in aplying the tax rate of 15% on al the receipts without apreciating that the agrements entered with Vodafone Esar and Idea Celular were post Ju ne, 205 and acordingly receipts, even if treating the same as royalty thereof ought to be taxed at the rate of 10% in view of the provisions of section 15A of the Act.

That on the facts and circumstances of the case & in law, the Ld. AO/DRP ered in levying the interest under section 234A and 234B of the Act. ”

3 . The asese has raised the folowing grounds of apeal in for the Asesment Year Asesment Year: 208 - 09: - 1. That on the facts and circumstances of the case & in la w, the impugned order pased by the Asesing Oficer ('AO') under s ection 143(3) read with section 1 4C of the Income - tax Act, 1961 ("the Act") is bad in law and void ab - initio. 1.1 That on the facts and circumstances of the case & in law, the Ld. AO ered in asesing the income of the apelant at Rs. 32,79,71,937 - as against the nil income declared by the apelant in the return of income.

Page 3 of 2. That on the facts and circumstances of the case & in law, the Ld. AO/DRP ered in holding that the receipts in the hands of the apelant from sale of "standard software" are in the nature of royalty under section 9(1) (vi) of the Act and under Art 13(3) of the Double Taxation Avoidance Agrement (DTA) betwen the India and Finland. 2.1 That, on t he facts and in law, the Ld. AO/DRP ered in holding that the apelant is receiving the payment for conferment of a right alowing the use of a copyright; 2.2 That on the facts and in law, the Ld. AO/DRP ered in holding that the apelant made avai lable the proces to the customer who uses such proces while carying out their busines; 2.3 That on the facts and in law, the Ld. AO/DRP ered in holding that consideration received by the apelant from the sale of standard software is for the use of comercial cum scientific equipment 3. That on the facts and circumstances of the case & in law, the Ld. AO ered in holding that the ancilary services provided by the apelant along with the sale of software comes within the purview of fes for tec hnical services under Art 13(4) (a)/ (b) of DTA. 3.1 That the Ld. AO failed to apreciate that the services provided by the apelant are ancilary and subsidiary as wel as inextricably and esentialy linked to the sale of software and therefore com es within the purview of exclusion clause as per Art 13(5) (a) of DTA.

4. That on the facts and circumstances of the case & in law, the Ld. AO/ DRP ered in not alowing the TDS credit of Rs.3,28,06,026/ - in spite of submiting the TDS certificates before the AO/DRP.

5. That on the facts and circumstances of the case & in law, the Ld. AO ered in aplying the tax rate of 15% on al the receipts without apreciating that the agrements entered with Vodafone Esar an d Idea Celular were post June, 205 and acordingly receipts, even if treating the same as royalty thereof ought to be taxed at the rate of 10% in view of the provisions of section 15A of the Act.

6. That on the facts and circumstances of the case & in l aw, the Ld. AO/DRP erred in levying the interest under se 4 . The asese has raised the folowing grounds of apeal in for Asesment Year: 209 - 10: - 1.

1. THAT on the facts and circumstances of the case & in law, th e impugned order pased by the Asistant Director of Income Tax, Range - 1, (International Taxation) New Delhi ("Ld. AO") under s ection 143(3) read with section 1 4C of the Income - tax Act, 1961 ("the Act") is bad in law and void ab - initio. 1.1 THAT on the facts and circumstances of the case & in law, the Ld. AO grosly ered in asesing the income of the Apelant at Rs.52,94,74,960/ - as against the nil income declared by the Apelant in the return of income.

2. THAT on the facts and circumstances of the case & in law, the Ld. AO/DRP ered in holding that the receipts in the hands of the Apelant from sale Page 4 of of "standard software" are in the nature of royalty under section 9(1) (vi) clauses (i), (i), (iva) & (v) of the Act and under Article 13(3 ) ( a) of the Double Taxation Avoidance Agrement (DTA) betwen the India and Finland. 2.1 THAT on the facts and circumstances of the case & in law, the Ld. AO/DRP ered in holding that the Apelant is receiving the payment for conferment of a right in the na ture of acopyright; 2.2 THAT on the facts and circumstances of the case & in law, the Ld. AO/DRP ered in holding that the Apelant is receiving the payment for transfer of right to use the proces embeded in the software to the customer who use such p roces while carying out their busines; 2.3 THAT on the facts and circumstances of the case & in law, the Ld. AO/DRP ered in holding that consideration received by the Apelant from the sale of standard software is for the use of comercial cum scien tific equipment. 2.4 THAT on the facts and circumstances of the case & in law, the Ld. AO/DRP ered in holding that the consideration received by the Apelant is royalty for the use of invention/scientific work .

THAT on the facts and in the circumstanc es of the case & in law, the Ld. AO/DRP ered in holding that the consideration for suply of software shal qualify as 'Royalty' by virtue of retrospective amendment introduced by the Finance Act, 2012 in the definition of Royalty under section 9(1) (vi) of the Act, without apreciating that there is no coresponding amendment introduced in the definition of royalty under the DTA. 3.1 Without prejudice, the Ld. DRP has further ered in holding that the aforesaid amendment in the have also to be read i nto the DTA based on authority drawn from the section 90(3) of the Act read with Explanation 3 thereunder along with Article 3 of DTA.

THAT on the facts and circumstances of the case & in law, the Ld. AO/ DRP ered in not alowing the TDS credit of Rs . 4,16,79,74/ - despite of submiting the TDS certificates before the AO/DRP. 4.1 THAT on the facts and circumstances of the case & in law, the Ld. AO ered in aplying the tax rate of 15% on al the receipts without apreciating that the agrements entered with Vodafone Esar and Idea Celular were post June, 205 and acordingly receipts, even if treating the same as royalty thereof ought to be taxed at the rate of 10% in view of the provisions of section 15A of the Act.

THAT on facts and circumstances of the case and in law, the Ld DRP grosly ered in not disposing of the objection raised by the Apelant in relation to taxing the receipts on acount of the invoices raised directly on customers after grosing up the same. 5.1 THAT on the facts and circumstances of the case & in law, the Ld. DRP ered in not isuing any direction to the Ld. AO who ered in grosing up the receipts without apreciating that the same can be done only in the hands of the payer for the purpose of deduct ion of taxes and not for computing the income 6. THAT on the facts and circumstances of the case & in law, the Ld. AO/DRP ered in levying the interest under section 234B of the Act.

Page 5 of 5 . Based on above grounds of apeal it is aparent that for al the thre apeals facts, Asesment order and order of DRP is similar and therefore the grounds of apeal of asese are similar. Hence we first take up the apeal of Asese for 207 - 08, discus facts of the case, rival arguments and our decisions and reasons therefore. Then we wil folow the same for respective subsequent two years i.e. A . Y. 208 - 09 and 209 - 10. 6 . Hence, Ground 1 to 3 of the apeal of the asese are taken up first and decided as under. 7 . Comptel Oyj , (herein after refered to as ‘Com ptel’) appellant is a Finish Software Company listed on Helsinki Stock Exchange. The Asese is incorporated and registered In Finland and thus, is a resident of Finland as per the provisions of Double Taxation Avoidance Agrement betwen India and Finla nd ('DTA'). It is formed/registered under neither the Companies Act, 1956 nor the control and management of its operation is situated in India. Therefore, being a non - resident as per the provisions of the Act, it is liable to be taxed in Ireland on acoun t of its residence and place of management. 8 . Busines of the a sese is to develop, manufacture and deliver of - the - shelf mediation, charging and fulfilment solutions and software. Comtel’s solutions and software are being sold to the telephone operato rs who maintain and provide services in the telecomunication networks. Apelant is a global market player in provisioning and convergent mediation software solutions. Comptel solutions suport the core busines proceses of operators and service providers by generating concrete savings that alow for new busines models and sustained consumer lo yalty. The Comptel Link product portfolio includes Comptel Event Link for event mediation and usage data management, Comptel Instant Link for automated user provisioning and service activation and Comptel Online Unk for Page 6 of online and pre - delivery charging for non - voice services. Regarding its busines activity in India, it has entered into a framework agrement with IBM United Kingdom Ltd, which is the Chanel Partner of Comptel for the purpose of Sale and delivery of the mediation software. The above fra me agrement is also aplicable betwen IBM India Ltd and the Apelant. 9 . For AY 207 - 08, asese filed its return of income on 27.03.209 declaring Nil Income. Asesing oficer pased Draft Asesment order on 30.12.209and subsequently asese fiel d an aplication before DRP on 1.02.2010, which was decided by DRP on 26.08.2010. Consequently, asesing oficer pased final asesment order on 16.09.2010. 10 . Ground No 1 of the apeal covers the main c ontroversy in the apeal is whether receipts from transfer of shrink wraped software amount to busines income or royalty under section 9(1) (vi) of the In Taxation Avoidance Agreement between Indi . Therefore, it is important to an alyze the nature of software in consideration. This was explained by the asese and there is no dispute about that which is as noted by ld. AO as under : - “3. Nature of the Software licenses granted to parties in India: As per the website of the asese, "Comptel Dynamic OS (Operations Suport Systems) products and solutions focus on fulfilment, resource management, convergent mediation and charging. Our expertise alows Comunications Service Providers (CSPs) to focus on their core busines: developing and delivering inovative and profitable services, colecting usage information and charging customers". " Comtel’s products and solutions are designed to adapt to al comon telecoms network and IT environments and to ev olve to met the demands of future services". 3.1 The software is delivered at the site of the end customer. The asese, regarding the nature of software, on 07.10.09 submited the folowing: Meaning of Mediation Software’s Comptel Mediation and Chargi ng Solutions colect the convergent real time usage data to ensure acuracy of customer biling and their credit management. It alows mobile service provider to create inovative services for both prepaid and postpaid customers. The features of the mediat ion software are in seriatim as hereunder:

Page 7 of ñ enable data and content services for prepaid and postpaid subscribers In mobile environments; ñ help combating fraud in prepaid and postpaid charging of voice services in circuit switching and pocket switched mobile networks; ñ provide to mobile service providers flexible and cost eficient charging and biling aplication such as IP prepaid, postpaid cost control, hybrid and convergent bonus acounting; ñ handle roaming usage data procesing in acordance with the speci fication sets by GSMA and CIBERNET; ñ efective interconect biling gives mobile service providers a real time view on the profitability of their services; ñ enable mobile service providers to receive imediate inteligence on their busines model and automat es critical aspects of interconect bilings; ñ alow the mobile service provider to use inteligent charging models, including rating and discounting capabilities, for the usage of its network; ñ enable the mobile service providers to launch new and existing services faster to the market with the asurance of acurate charging". No descriptions of charging and fulfilment software are filed. The aseses has also provided brief catalogue providing a glimpse of the products/solutions. As submited to this ofi ce, the asese develops mediation, charging and fulfilment solutions and software. During the year under consideration, the asese granted license of mediation software in India namely Comptel Event Link and Comptel Instant Link. 3.2 The nature o f these software is found out from the website of the asese and are given below: Comptel Event Link enables operators to make their busines operations more efective and cost - eficient, it colects subscriber usage data (for instance on transfered dat a packages and sent MS mesages) from the network, checks and converts it, and delivers it further the operator's OS/BS (operations suport system/busines suport system). As a to l for network monitoring and trafic enginering, Event Link enables capacity optimization by giving instant information about network usage It alows operators to execute acurate and timely biling cycles thanks to the imediate creation of subscriber bils on the basis of the colected real - time usage data Moreover, the solution alows various charging options, meaning that biling can be based on volume, content value, QoS (Quality of Service) or lime, or any combination Of these. Comptel Instant Link release 6 introduces a new combination of customer - driven enhancement s and inovative product features It also includes a renewed provisioning logic configuration tol Instant Link Busines Service Tol 3, which provides an easy - - use front - end for flexible ^ service creation and management For example, the superior confi guration ability provided with Instant Link Busines Service Tol 3 gives operators the much - neded flexibility for competitive reactions, diferentiation in service launches Furthermore, the variety of usability, and maintenance improvements now introduce d are Page 8 of based on the continuous dialogue with our customer base and targeted to personel responsible for daily operational tasks. The further, description of the software as per the website of the asese are:

Comptel Convergent Mediation is the scalabl e platform for managing the colection and transformation of network transactions from various network types to bilable records. It can colect data and proces transactions from any network (IMS, mobile, IP, fixed, NGN, WLAN and satelite networks) in bo th online and ofline mode and suply the data Jo any OS/BS thus eliminating the ned for multiple mediation platforms The solution also enables conectivity to busines suport systems for prepaid charging and postpaid biling. By hiding the network com plexity behind charging and linking services and subscriber and payment types, the solution ofers an inteligent aproach to mediation and charging. Meanwhile, its vendor - independent components integrate efortlesly with any legacy system while also exte nding to next generation environments and services. Comptel Convergent Mediation also delivers high performance and flexibility from a smal package, being scalable from 50 0 subscribers up to 50 milion with just one physical single server deployment A s a highly productized platform with ful suport for multi - host architecture or cluster environments, it is easily configurable while centralised management ensures easy geographical distribution. With its Conv ergent Mediation solution, Compt el draws upon more than two decades of experience in the mediation busines to deliver a single solution that is fast to deploy, as wel as providing the platform to launch new services with sped and ease 2 Comptel Charging Unbeatable flexibility in one package Comptel Charging is Comptel's response to comunications service providers' growing ned to reduce operational costs and improve customer satisfaction and loyaly in an increasingly competitive market The modular and fuly configurable solution ofers advanced rating and balance management functionality while enabling online and real - time charging of al services in fixed, satelite and mobile networks. It ofers service providers the capability to create more advanced and flexible charging models that combine the strengths of both data and voice charging, while suporting both postpaid and prepaid payment options This vendor - , network - and service - independent system solution provides conectivity to any telecom biling system, ofering easy - use prici ng and high - performance rating and charging in real - time serving up to 80 milion subscribers in one instalation. Comptel Charging is built on top of Comp t el's award - wining, patented Mediation and Charging Platform used by over 1 80 customers around the world. It has a proven track record of providing comunications service providers with a future - prof solution for al 3G, NGN and IMS services.

4. Busines Model:

Page 9 of The asese has submited a detailed note on the busines model along with the argum ents on taxability built in on 07.10.09. The same is reproduced betow: The Asese has already submited that for the purpose of seling the softwares, it has entered into an agrement with IBM United Kingdom Ltd, which is the Chanel Partner of the Compt el for the purpose of Sale and delivery of the mediation softwares. The agrements in this regard have already ben filed by the asese as hereunder: - Base Agrement dated February 1, 203 - Master Statement of Work dated February 1, 203 - Statement of W ork betwen IBM Global Services India Pvt Ltd and Comptel Corporation efective from November 2,204 to November 21 ,2013 Relevant clauses of the agrements and interpretation thereof is provided as hereunder: Base Agrement dated February 1,203 It is a Software & Service Engagement Agrement entered betwen the Asese as suplier and IBM United Kingdom Ltd as buyer . The object of the agrement is to establish the basis for a multinational procurement relationship under which Suplier wil provide the Buyer the deliverables and services described in the relevant SOWs isued under this Base Agrement. Under the base agrement, Deliverables have ben defined as items that Suplier prepares far or provides to Buyer or Customer as described in a SOW for Cus tomer. Deliverables may include Program Products, Developed Works, Pre - existing Materials and/or tols. It is humbly submited that the asese has only provided program products as deliverables to the Buyer. Program Products has further ben defined as uplier's comercialy available software and the documentation required to instal, suport, use and maintain it. It means that by virtue of this agrement the asese i.e. Suplier would provide the IBM i.e. Buyer the comercialy available softwares fo r the use of the customer of buyers Article 7 of the base agrement provides that the deliverables or services wil be delivered as specified in the relevant SOW and/or, when activating a project under a SOW for customer, Master Statement of Work dated Feb ruary 1,203 The asese, for seling its program products, has entered in1o a Master Statement of Work ('MSOW') with ]j3M_Unjled Kingdom Ltd which specifies the terms agred betwen the parties regarding marketing, licensing and suply of Suplier's Program Products and Services by Buyer to the Customers. Article 3 of the MSOW defines the program products as identified in Atachment 2 which in turn provides for Compiel Event Link and Comptel Instant link as program products. Article 6 of the MSOW defi nes license grants, which provides licenses for Program Products as hereunder: Quote 6.7 Program Products The parties hereby agre that al title to, ownership of and interest in al or any portion or component of the Program Products (whether deliverabl es or not and including al updates, upgrades, Page of modifications and enhancements thereto, and related documentation thereof, if any, whether licensed hereunder or provided in conection with the provision of any Services hereunder) as wel as rights pertainin g thereto, including but not limited to paten!, copyright and trademark rights or any other legaly protected proprietary right, shal belong to and remain exclusively with Suplier. Buyer acquires only the right to transfer the EULA in respect of the Prog ram Products to Customer strictly in acordance with this Agrement, and does not acquire any right of ownership, title or interest in the Program Product by virtue of such transfer. Al rights not expresly grouted to Buyer are reserved by Suplier. Buyer acknowledges that the Program Products and its sequences, structure and organization are property of Suplier, that Suplier retains exclusive ownership thereof, as set forth above, and that ihe same constitutes Confidential Information of Suplier that s hal be subject to (he undertakings as !o confidentiality and non - use set forth in the AECI. A perusal of the aforementioned clause makes it obvious that al the intelectual property rights along with title and interest m the program products are the prop erty of the asese the buyer only acquires a right to transfer the EULA to its end customers. End User License Agrement (EULA) is a part of the MSOW as Atachment 1. We are anexing herewith a copy of MSOW along with the atachments as Anexure 2, The EULA provides the Software License Terms and Conditions under which the asese license its standard software to the end user. In EULA the term standard software has ben defined as software in object code, machine readable format only, licensed to End Us er subject to the terms and conditions as mentioned in the agrement Clause 2 of the EULA defines the grant of license as hereunder. Quote 2 Grant of License. Folowing delivery and aceptance of the Standard Software, and upon receipt by Comptel in ful of the consideration agred upon in the Contract for the License. Comptel hereby grants, subject strictly to the terms of the Contract, a non - exclusive, non - Transferable, non - asignable, revocable, non - sub licensable, and personal right and license (herein after the "License") to End User to use the agred number of machine readable copies of the Standard Software for the agred Newark that Is being used only by (he End User, and a copy of the Documentation. The right and license to use the Standard Softwar e granted in the previous sentence shal be limited to use by End User only (a) to proces data originating from its own busines operations and (b) for End User's own internal operations, in each case for up to the Licensed Amount End User shal have the right to use the Standard Software only in the hardware and operating system environment defined in the Contact. Unquote As per the definition of grant of license, customer has received a right to use the software in acordance with the Exhibit A, which de fines the terms of use of standard software as hereunder: Quote 1. The License The license granted to the Customer shal be non - exclusive, non transferable, non asignable , non - sub licensable, revocable, and personal, Page of and be limited to use by the Custome r of a reasonable number of machine readable copies of Comptel's Standard Software in the agred network, and of one copy of the documentation, only (a) to proces data originating from Customer's own busines operations; (b) for the Customer's own internal operations, in each case for up to the Licensed Amount; and (c) in the hardware and operating system environment defined in the contract. Therefore, what the customer is geting is a machine readable copies of a standard software which can be u sed for the internal operations in the busines of the customer. The above mentioned clause provides that at no point of time the asese has transfered the Intelectual Property Rights in the nature of patent, copyright and trademark etc. and ownership of the same remains with the asese only. What the customer has got is only a right to use a copyrighted article which is a standard software? This fact is also evident from the restrictions put by (he asese on the customer to use the standard softwar e as hereunder: Quote 1. Restrictions The End User acknowledges and agres not to, and not to permit others to (unles, and to the extent only as, permited by a expres provision contained in these Terms and Conditions): (a) reproduce, copy, publish, dis play, disclose, rent, lease, sub - license, modify', loan, distribute or create derivative works based on she licensed Standard Software, or any part thereof ; (b) translate, reverse enginer, decompile, disasemble, re - enginer or otherwise atempt to disco ver the source code or the structural framework of the licensed Standard software, or any portion thereof; or merge any portion of the. Standard Software with other software or otherwise use the Standard Software, or any portion thereof, other than as jet forth in these Terms and Conditions End User farther agres not Jo use the Standard Software (or any part thereof), any Documentation nor any Confidential Information of Comptel or its licensors to create software that emulates or performs substantial y the same functions as the licensed Standard Software or any part thereof. End User further agres never to remove any copyright, trademark and other proprietary notices or any other form of product identification afixed to the licensed Standard Software , any Documentation, or any portion of the licensed Standard Software or Documentation, 4.1 In this regard contents of some of the agrements / statements of work are reproduced hereunder: Software and Services Engagement .Agrement Agrement # 4903U K.0184 st February, 203 This Base Agrement ("Base Agrement") dated as of 1 ("Efective Date) betwen IBM United Kingdom Limited ("Buyer") and Comptel Corporation ( Suplier"), establishes the basis for a multinational procurement relationship under which 'Suplier wil provide Buyer the Deliverables and Services described in the relevant SOWs isued under this Base Agrement. Deliverables and Services acquired by customer on or Page 1 2 of after the efective Dale wil be covered by this Base Agrement to the exten t reference are made hereto by the panics in a W A.This Base Agrement wil remain in efect until terminated. 1.0 Definitions: "Deliverables" means items that Suplier pi spares for or provides to Buyer or Customer as described in a SOW for Customer, Deliverables way include Program Products, Developed Works, Pre - existing Materials and/or Tols. "Developed Works" means such work product (including software and its Externals) developed in the performance of this Agrement, defined as such in a SOW for C ustomer and as described in such SOW and does not include Pre - existing Materials, Tols, Program Products, or items specificaly excluded in such SOW. ………………………. ……………………………. "End User License Agrement" shal have the meaning as defined in the SOW atache d hereto . "Inventions" means ideas, designs, concepts, techniques, inventions, discoveries or improvements, whether or not patentable, conceived or reduced to practice by Suplier Personel in Performance of this Agrement. "Joint Inventions" means invent ions made by Suplier Personel jointly with Buyer Personel. No Invention shal be regarded as a joint Invention unles the Personel of both Paries have contributed significantly thereto Unles the Buyer is able to produce suficient evidence to the con trary, al inventions in relation to the Program Products shal be regarded as having ben made solely by the Suplier or its Personel and shal vest exclusively in the Suplier. "Participation Agrement" or "PA" means an agrement signed by one or more A filiates which in coperates by reference the terms and conditions in this Base Agrement, the SOW atached hereto, and other atachments or apendices specificaly referenced in the P.A. "Services" means work that Suplier performs far Buyer as described in a SOW for Customer, "Statement of Work" or "SOW" means either (A) the document atached to this Base Agrement which describes the Deliverables and Services, including any requirements, specifications or schedules typicaly included in a W.A, as wel a s the agred genera] variations and amendments to this Base Agrement, or (b) any agred document included in a W.A (a "SOW for Customer"), which describes he Deliverables and Services to be provided, including the specific requirements and specifications, or (c) when the context permits, any of these documents. "Tols" means software that is not comercialy available, and their Externals, required for the development, maintenance or implementation of software Deliverable other than a Program Product "Work Authorization" or WA" means Buyer's authorization in either electronic or tangible form for Suplier lo conduct transactions under this Agrement in acordance with the aplicable SOWs (i .e., a purchase order, or other apropriate Buyer designated docume nt). A SOW is a WA only if designated as such in writing by the parties 2.0 Statement of Work Suplier wil provide Deliverables and Services as specified in the relevant SOWs only when ordered by means of a WA. Suplier wil begin work only after receivin g a WA from Buyer. Buyer may propose changes to a SOW and Suplier wil submit to buyer the impact of such changes as described in Page of the SOW attached hereto (herein after acepted by the Buyer wil be in an amended SOW for customer or changes order signed by both parties. 0.

Intelectual Property 8.1 Work made for hire AIl Developed Works, if any, belong exclusively to Buyer or Customer and are works made for hire. If any Developed Works are not considered works made for hire owned by operation of law, suplier asigns the ownership of copyrights in such works to buyer or customer. 8.2 Prexisting materials Suplier wil not include any Prexisting Materials in any Deliverable unles they are listed in the relevant SOW. For the sole purpose of suporting the Customer as expresly specified in the relevant SOW, Suplier grants Buyer a nonexclusive, worldwide, perpetual, irevocable, paid - up, license to prepare and have prepared derivative works of such Prexisting Materia ls as have ben prepared by it and to use, have used, execute, reproduce, transmit, display, perform, transfer, distribute, and sublicense such Prexisting Materials or their derivative works and to grant others the rights in this sublicense al to the ext ent as is necesary to suport the relevant customer as aforesaid. 8.3 Tols Suplier wil not include Tols in Deliverables unles they are listed in the relevant SOW, For the sole purpose of suporting the Customer as expresly specified in the relevant SOW, Suplier grants Buyer nonexclusive, worldwide, perpetual, irevocable, paid - up, license to prepare and have prepared derivative works of such Tols as have ben prepared by it and to use, have used, execute, reproduce, transmit, display, perform, tran sfer, distribute, and sublicense such Tols or their derivative works, and to grant others the rights granted in this Subsection al to the extent as is necesary to suport the relevant Customer as aforesaid. 8.4 Invention Rights Suplier owns Inventions. Suplier grants to Customer an irevocable, nonexclusive, worldwide, perpetual, paid - up license under Inventions (including any patent aplications filed on or patents isued claiming Inventions) to use the relevant Deliverables in acordance with and sub ject to the End User License Agrement, For the sole purpose of suporting the Customer as expresly specified in the relevant SOW, Suplier grants Buyer a nonexclusive, worldwide, paid - up, license to use Inventions to this extent as is necesary Customer as aforesaid. 8.5 Joint Invention Rights The parties wil jointly own al joint Inventions and resulting patents. Either party may license others under joint Inventions (including any patent aplications filed on or patents isued claiming Joint Inventions ) without acounting to or consent from the other. 8.6 Perfection of Copyrights Upon request, Suplier wil provide to Buyer a "Certificate of Originality" or equivalent documentation to verify authorship of Developed Works. Suplier wil confirm asignment of copyright for developed works (if any) using the “conformation of Assignmen t of Copyright” from buyer in perfecting such copyrights. For the avoidance of any doubt, suplier wil not transfer any copyrights or other intelectual property rights to its program products. 8.7 Perfection of Invention Rights Page of Suplier wil identify al countries in which it which it wil sek patent protection for each Invention. Suplier authorizes Buyer to act as its agent in obtaining in supplier’s name paten countries where suplier does not sek pa tent protection. Buyer wil pay al expenses in relation to these patent aplications and the maintenance of the relevant patents. Suplier wil, at Buyer's expense, asist in the filing of patent aplication on Inventions and have required documents sign ed. 8.8 Trademarks This agrement does not grant either party the right to use the other party's or their Afiliates' trademarks, trade names or service marks. 8,9 Patents Suplier owns or may own patents. For the sole purpose of suporting the Customer as expresly specified In the relevant SOW, suplier grants to buyer a nonexclusive, worldwide, paid - up license under any patents and patent aplications licensable by suplier to make have made, use have used import, export, sel and otherwise transfer the deliverable and use the services to the extent authorized in this agrement and as is necesary to suport the relevant customer as aforesaid. 10 Program Products Customer wil receive an End User License Agrement from Buyer or Suplier for perform produ cts, to which buyer is neither a party nor liable for violations. Buyer may instal and test Program Products for Customer without aditional license charge. For recuring charge licenses, Buyer wil notify Suplier when to begin invoicing Customer, if ap licable AH title to, ownership of and interests in the Program Products shal belong to and remain exclusively with Suplier, as more in detail defined in the MSOW The Program Products suplied and licensed hereunder shal be limited to Object Code (such t erm being defined in the MSOW), 9.3 Exceptions to Indemnification Suplier shal not be liable to Buyer, Buyer's personel or Customer, and shal have no obligation to indemnify Buyer, Buyer's Personel or Customer not taken any other action as set out in Section 9 - 2 for Infringement: 1 . in case Buyer, its personel or Customer make any authorized changes or modifications to the Deliverables when (he claim would not have ocured but for such changes or modifications; 2. which are based upon use of the Deliverables, or any part thereof, in combination with software not suplied by the Suplier would have ben avoided in the absence of such combination, or any use of the Deliverables in a maner for which they were not designed or for whic h they were not agred; 3. supplier’s implementation of a such Infringement would have ben avoided in the absence of such implementation; 4. Buyer or its Personel makes any admision of liability or per forms any other acts with respect to any aforesaid claim which Suplier can show, caused [he Suplier's case to fail; or 5. the gros negligence or wilful misconduct of the Buyer or its Personel. 12.1 Aces to Premises Page of Suplier wil sure that Suplier Personel asign ed to work on Buyer's or Buyer's Customer's premises wil: 1. to the extent permited by aplicable law, participate in a pre employment criminal background check covering the countries in which the person by was employed or resided for the past seven years (or longer as required by State legislation), and inform Buyer of any negative findings; 2. to the extent permited by aplicable law maintain a curent and complete list of the persons' names and social security numbers; 3. obtain for each perso n a valid identification badge from Buyer and ensure that it is displayed to gain aces to and while on Buyer's premises (it is Buyer's policy to deactivate any such badge if not used for one month); 4. maintain a signed acknowledgment that each person wil comply with Buyer's Safety & Security Guidelines; 5. ensure that each person with regular aces to Buyer's and Buyer's Customer's premises complies with al parking restrictions and with registration requirements if any; 6. inform Buyer if a for mer employe of Buyer wil be asigned work under this Agrement, such asignment subject to Buyer aproval, which aproval shal not be unreasonably witheld; 7 . at Buyer's request, remove a person from Buyer's or Buyer's Customer's premises and not re asign such person to work on Buyer's or Buyer's Customer's Premises; and 8. notify Buyer imediately upon completion or termination of any asignment and return Buyer's identification badge. Upon Buyer's request, Suplier wil provide documentation to v erify compliance with this Subsection, 12.4 Aset Control In the event Suplier Personel has aces to information, information asets, suplies or other property, including property owned by third parties but provided to Suplier Personel by Buyer ("Buy er Asets"), Suplier Personel: 1. wil not remove Buyer Asets only from Buyer's or Buyer's Customer's premises without Buyer's authorizations; 2. wil use Buyer Asets only for purpose of this Agrement and reimburse Buyer for any unauthorized use; 3 . wil only conect with, interact with or use programs, tols or routines that Buyeragres are neded to provide Services; 4. wil not share or disclose user identifiers, paswords, cipher keys or computer dial port telephone numbers; and 5 in the e vent the Buyer Asets are confidential, wil not copy, disclose or leave such asets unsecured or unatended., Buyer may periodicaly audit Suplier's dam residing on Buyer Asets. 12.5 Supervision of Suplier's Personel Suplier wil provide continual supervision of its personel provided under this agreement, at no additional cost to buye supervisory authority over al day to day employment relationship decision relating to supplier’s personal includin ision relating to wages, hors, terms and conditions of employment, hiring discipline, performance evaluations, termination counseling and scheduling. Suplier's supervisors responsible for each work location wil be responsible lo know that work location' s planed holiday (and other closing) schedules and the impacts al such schedules have on Suplier's Personel Suplier wil conduct orientation sesions with its personel before Page of placement on an asignment with Buyer, during which orientation such person nel wil be told who their supervisor is and how that supervisor can be conducted, Suplier wil from time to time ensure that al of its employes working under this Agrement continue to be aware of this information. Software and Services Engagement Agr ement This Master Statement of Work ("SOW") # 4903UK0276 adopts and incorporates by reference the terms and conditions of Software and Services Engagement Agrement # 49Q3UK01S4 ("Base Agrement") entered into contemporaneously herewith by and betwen IBM United Kingdom Limited and Comptel Corporation. This SOW is efective begining on 1 February, 203 and wil remain in efect until the Base Agrement terminates Transactions performed under this SOW wil be conducted in acordance with and be subject to the terms and conditions of this SOW, the Base Agrement and any Work Authorizations ("WAs") and SOWs for customers (defined below), 1 . SCOPE OF WORK s SOW specifies the terms agred to by the parties with regard to the marketing, licensing and suply of supplier’s program produ buyer to customers. This sow establishes under which suplier wil provide buyer the program products and services pursuant to the terms outlined in this SOW and the Base Ag rement hereinto incorporated, The Parties do not forese marketing, licensing or suplying any other Deliverables than Suplier's Program Products under the Agrement and, therefore, recognize and agre that notwithstanding any use in a SOW for Customer o f the term "Developed Works1 for software and/or documentation that are in fact Program Products such Program Products such Program Products shal remain Program Products as defined in the Base Agrement and nothing else. Buyer wil isue a WA for each sp ecific customer in acordance with this SOW and the relevant SOW for customer (referred customer”), detailing the specific Deliv may aply for the specific Customer that have ben identified in the relevant SOW for Customer. A SOW for Customer wil always include as an integral part the Suplier's Standard Statement of Work ("STOW"), a template of which is atached hereto as Atachment , 4. Subject to Section S5.10 ("Prior Comunica tions and Order of Precedence"), of the Base Agrement except as otherwise explicitly slated in such a SOW for Customer the terms of this SOW and the Base Agrement shal be demed to be incorporated in that SOW for Customer, 2 . DEFIN I TIONS "Aceptance Criter ia" means the criteria specified in an Aceptance Test Specification,which criteria the Deliverables shal be required to met during an Aceptance Test "Aceptance of Functional Specifications" means Buyer's review and aceptance of the Functional specifi cation in acordance with Section 4.4 hereof. "Aceptance Tests" means the tests proposed by Buyer and acepted by Suplier whereby Buyer shal establish whether the Deliverables substantialy fulfil the Aceptance Criteria. "Aceptance Tests Specificatio n" means the Aceptance Tests procedure that Buyer shal submit lo Suplier for Suplier's aproval, unles otherwise agred in the relevant SOW for Customer. This aceptance test procedure shal include a detailed description of the Aceptance Criteria an d Aceptance tests to be performed on Deliverables, the test data and environment required the sequence for the performance of the Aceptance Tests and the criteria for determining the suces or failure thereof.

Page of "AEC1" means ho Agrement for Exchange of Confidential Information Number W903UKO185 that has ben entered into by and betwen the Parties on the date hereof. "CODE" means computer - programing code, including both computer programing code substantialy in binary form that is directly executable by a computer after procesing, but without compilation or asembly ("Object Code") and computer programing code that may be displayed in a form readable and understandable by D programer of ordinary skil, exclud ing Object Code ("Source Code"). "CORE PROGRAM PRODUCTS" means the Program Products listed in Atachment 2, as varied from time to time "CUSTOMER'S SYSTEMS" shal mean the data conections, hardware and software of the Customer on or in relation to which Program Products wil operate. "ENHANCEMENTS" means changes or aditions to the Program Products: a) "Major Enhancements" means Enhancements which provide substantial aditional value and are normaly ofered to customers for an aditional charge (e.g ., upgrades) "Basic Enhancements" means ail Enhancements, other than Major Enhancements, including those that suport new releases of operating systems and devices, and corect Erors. "End User License Agrement (EULA)" means the Suplier's end user Lice nse agrement for Program Products, apended hereto as Atachment 1 - Suplier reserves the right to update the conditions therein from time to time. "Interface and Aditional Software Development Work of Program Products" means the activity for which Supl ier grants to Buyer a non - exclusive, non transferable, non - asignable, revocable and personal right and license, subject to execution of a partner Developer's License Agrement betwen the Parties "Marketing Materials" means Program brochures, manuals, hnical specification shets, ^ ^demonstration presentations, and other marketing sales literature provided by Suplier to Buyer for Buyer's use in performance of marketing activities. Buyer's use of Marketing Materials may include transmision of them through electronic marketing services. "Productive Use" means use of the deliverables in Customer's ordinary operating environment (other than in conection with an Aceptance Test). "Ready For Aceptance1' or "RFA" means a writen notification by Suplier to Buyer thai the Deliverables are ready for the Aceptance Tests. "Ready For Instalation" or "RJFI" means a writen notification by Buyer to Suplier of Buyer's having satisfied the conditions specified herein and in SOW for Cust omer (including the STOW), such (hat Customer's Systems are in a ready for instalation stale. "Suplier Maintenance Suport" means the services described in Atachment in which are based on Suplier's standard maintenance and suport services to be provid ed lo Customer. The terms set out in Atachment 3 may be changed by the Suplier from time - time, as the Suplier shal in its sole discretion dem fit. Except as may be otherwise agred in writing by buyer or Customer, such changed terms wil not aply to existing contracts.

Page of "Teritory'" means the country of incorporation on Buyer Any further countries wil be agred upon by means of Participation Aarements betwen Suplier and Buyer Afiliates. , 4.4 Functional Specifications for Customer Suplier s hal provide Functional Specifications as may be required to met Customer requirements and environment as stated in a SOW for Customer and/or further defined in the SOW, including delivery of such Functional Specifications to Buyer or Customer within the schedule defined therein. Buyer shal fuly co operate with Suplier so as to achieve a timely provision of the Functional Specifications. Promptly after receipt of the Functional Specifications from Suplier, and, unles otherwise specified in the relevan t SOW for Customer, latest within working days thereof, Buyer sbal notify Suplier in writing of its aceptance (or rejection) Functional Specifications If Buyer rejects, the portions of the proposed Functional Specifications not acepted and of the reaso n for the rejection, the Buyer makes no such notification of rejection to Suplier within relevant period and Suplier has notified Buyer of Such ocurence, then the Functional Specifications are demed to be acepted by Buyer 4.5 Description of Services required for Customer Suplier wil provide the Services specified in the relevant SOW for Customer or STOW that may cover inter alia: 4.5.1 Where apropriate, al Deliverables (or identical Deliverables) wil have ben tested prior to delivery If requeste d by Buyer, Suplier wil provide evidence of such testing to Buyer, Any minor defects outstanding in the Deliverables shal be notified lo Buyer at time of delivery, with apropriate plan for timely resolution of such defects. 4.5.2 Adequate resources to corect defects that may arise during instalation and implementation stages of Program Products, provision of technical suport to enable Buyer's integration of such items into me solution package by Buyer or Customer. 4.5 - 3 Provisio n of training to Buyer or Customer for instalation, configuration, implementation and end user administration/maintenance of the Deliverables. 4.5.4 Technical suport services for instalation, configuration, problem determination, im plementation and other project suport tasks to ensure the sucesful and timely deployment of Program Products for testing by Buyer and/or Customer 4.6 Training Services lo Buyer Upon Buyer's request. Suplier wil provide training in Helsin ki, Finland or oilier locations as may be agred by the parties, to Buyer and such Buyer Personel that the parties agre as having a ned suport the basic sales, implementation and suport of program products, at no aditional charge. a) At least two tr aining sesions for Program Products stated herein; and b) At least one fining sesion for each Major Enhancement release of a Program Product The parties shal review find agre training requirements for Program Products upon execution of this SOW Any f urther training sesions shal be agred to in each P,A. Upon Buyer's reasonable request, suplier also agres to provide without charges, training to buyer on the implementation and systems integration of program products, including customization or modif ication of program products to suport customer’s systems as has been agreed in Unles otherwise agred by the parties, Suplier's obligation to provide such Page of training without charge wil be limited to a maximum of ten (10) working man days for each significant Customer engagement, as defined and agred Lo by the parties. Buyer wil notify Suplier of such training requirement at least thirty (30) days in advance Buyer acepts that owing to limits in Suplier's available res ource at any given time, Suplier may not be in a position to render the requested training at the time or venue requested by the Buyer For the avoidance of any doubt, ail travel, acomodation, subsistence and like expenses of the Buyer Personel partici pating in any of the aforesaid training sesions shal be borne by the Buyer The Buyer shal reimburse the Suplier for al travel, acomodation, subsistence and like expenses of such Suplier Personel who wil be lecturing at any training sesions held outside of Helsinki, Finland, ACEPTANCE OF DELIVERABLES Except as and to the extent specificaly otherwise slated in a SOW for Customer, Aceptance of a deliverables shal be subject to the folowing: "Aceptance" of a Deliverable and the corelative "Acepted" means the first to ocur oft a) The substantial satisfaction of ail Aceptance Criteria in an aceptance Test; b) The Deliverables, or any portion thereof, having ben put into productive Use by Customer; c) The expiry of the period of th irty (30) days comencing on the date of the relevant RFA, provided that Buyer has not isued any writen notice listing the relevant Eror in reasonable detail. In adition, Aceptance wil ocur if the relevant Aceptance Test is not pased due to any deficiency which: ñ Is not primarily caused by suplier; or ñ Wil not adversely afect the intended use of the Deliverables . In case of suply of Deliverables that is conducted in phases, each phase shal be acepted in acordance with the foregoing Upon Ac ceptance, Suplier shal be demed to have fulfiled al of its obligations hereunder and under the relevant SOW for Customer, save for the remaining obligations of Waranty (Section 6) and Intelectual Property Indemnification (Section 9.2), subject to th e "Exceptions to Indemnification" provision (Section 9.3), of the Base Agrement and the Waranty Period set out in Section 7.3 hereof or , in the SOW for Customer. Buyer shal prepare the Aceptance Test Specification in conformity with the Functional Spe cification for a Deliverable or sets of Deliverables, and submit for Suplier's preview and aceptance within (unles otherwise specified in the relevant SOW for Customer) a period not les than six (6) weks prior to the date of isue of the RFA in respec t of a Deliverable or sets of Deliverables agred in the relevant SOW for Customer Suplier shal notify Buyer in writing of its aceptance (or rejection) of Aceptance Test Specification no later than five (5) busines days thereof If the Suplier rejects the Aceptance test Specification proposed by Buyer, then the notice shal include a detailed description of the portions of the Aceptance Test Specification not acepted and the reason for the rejection. In case Suplier has not Buyer of its rejection o f the Aceptance Test Specifications within the relevant, then they wil be demed acepted by Suplier. Aceptance Test Failure IF, during any Aceptance Tests, the Deliverable fails to met the Aceptance Criteria, Buyer shal promptly provide writen n otice to Suplier of such Failure, listing the Erors in reasonable detail Suplier, Page of with apropriate suport from Buyer, shal use diligent eforts promptly to corect any such Erors, and deliver resolutions to such Erors . Aceptance Tests, including r egresion testing, shal then be repeated. Sub testing and corection proces shal continue until such time as the Program Products or Deliverables shal have met the Aceptance Criteria agred for such Aceptance Test, "Neither the Buyer nor the Customer shal be entitled to reject Deliverable or Services for refund in case of minor non - compliance with the Aceptance Criteria 6. LICENSE GRANTS Evolution, Demonstration and Training License for Program Products To enable Buyer to efectively market Program Products (including for avoidance of any doubt, Enhancements) and Services to customers, Suplier may grant to Buyer a paid - up, non - exclusive and non - transferable, Object Code License lo use, execute, reproduce, display and perform Program Products for pu rposes of evaluation and training of Buyer Personel subject to a suplement to the AEC1 - The results of Buyer's Property, and Buyer is under no obligation to provide such results to Suplier. If such results are provided to Suplier, they were provided " ASIS" . In adition, Suplier may giant to Buyer a non - exclusive and non transferable, Object Code License to use, Execute, reproduce, transmit, display and perform Program Products (including use, have used, reproduce and distribute its asociated Marketi ng Materials) to the extent necesary lo publicly demonstrate the functions and features of the Program Products alone or in conjunction with or integrated into Buyer's hardware, services or software oferings, Development License for Program Products lier wil, subject to execution of a Partner Developer's License Agrement and payment of the relevant license fe by Buyer, grant to Buyer a non - exclusive and non - transferable license to configure certain Program Products for a specific Customer. Buyer h as al right, litle and interest (including ownership of copyright) in such Interface and Aditional Software Development Work of Program Products prepared by or on behalf of Buyer, subject to terms and conditions of the Partner Developer's License Agrem ent (including without limitation a grant - back to Suplier of a license thereto). The parties may agre upon the establishment of a Comptel Competence Center with Buyer for the purposes of providing the Buyer's relevant personel with the requisite skils so as to enable the Buyer to suply certain Program Products to Customers designated by the parties. Program Product Evaluation License for Customers Suplier shal upon Buyer's reasonable request and subject to a relevant SOW for Customer, grant Buyer th e right to ofer a non - charge and limited period evaluation license to potential Customers, subject to the terms and conditions of the then curent Suplier software evaluation license agrement End User License Agrement Program Products provided by Buyer to Customers wil be subject loan EULA. Buyer wil provide Program Products to customers under the terms of tie EULA Suplier shal be entitled to refrain from delivering Program Products to a Customer until relevant Customer has signed the EULA and furnished such signed copy to Suplier The curent version of Suplier's EULA is as apended hereto as Atachment 1 Buyer is not a party to the EULA and does not asume any obligation for violations of it In the Page of event Bu yer reasonably requests that Suplier modifies the EULA to comply with compeling legislation of a country in the Teritory, Suplier agres to: 1) consider such a request on a timely basis; and 2) not unreasonably refrain from making such reasonable amend ments to the EULA so as to comply with the relevant compeling legislation, Customers may include agencies or other units of a government, or third parties under contract with, a government ("Public Sector") - in the event a Public Sector Customer requires modification to the End User License Agrement, Suplier agres to negotiate without prejudice but in god faith such requested modifications with Buyer and the Public Sector Customer, including the posibility of authorizing Buyer to sublicense the Progra m Products Outstanding Licenses Suplier acknowledges that licenses of Program Products, whether obtained from Buyer, Suplier or a third party, may retain Buyer to Perform outsourcing services on their behalf. Notwithstanding any other provision of this SOW (or SOW for Customer), the Agrement or of any license agrement, Buyer, when outsourcing services to licenses of Program Products, wilt not, unles otherwise agred, owe Suplier a fe for aces to or asignment of a license to Program Products. In a dition, Buyer wil not, unles otherwise agred, owe Suplier a fe to transfer the aplicable Program Products to a Buyer computer system which is of like configuration as Customer's Systems for which the Program Products were licensed The Program Produc ts wil only be used on behalf of the - license. Upon expiration or termination of the agrement to provide outsourcing services to the license, Buyer's light to use the Products wil terminate For the avoidance of any doubt, under no circumstances shal an y such outsourcing reduce the obligation of the relevant license (or Buyer, if such obligation is transfered to it in conection with the relevant outsourcing) to pay any upgrade license fes, Buyer may perform any of its obligations under this SOW throug h its Afiliates, subcontractors, and other companies afiliated with Buyer, such as Buyer's busines partners. 'The use of such entities by Buyer does not relieve h of its obligations under this SOW, the relevant WA or SOW for customer and Buyer shal ens ure that such entities comply with the obligations of this SOW. This SOW does not grant Buyer or any such entities any ownership of copyright in Program Products 01 Prexisting Materials Restrictions Buyer shal not and shal not permit others to, save as expresly set out in this Section 6, (i) reproduce, copy, publish, display, disclose, rent, lease, sub - license, modify, loan, distribute or create derivative works based on Program Products, or any part thereof; (Si) translate, reverse enginer, decompile, disasemble, re - enginer or otherwise atempt to discover the Source Code or the structural framework of Program Products, or any portion thereof. Buyer shal reproduce al copyright, trademark and other proprietary notices afixed to the Program Products , and/or any portion thereof; as aplicable, on al copies made pursuant to the Agrement, Buyer agres never to remove any such notices or any other form of product identification. Program Products The parties hereby agre that al title to, ownership of and interests in al or any portion or component of the Program Products (whether Deliverables or not and including al updates, upgrades, modifications and Page of enhancements thereto, and related documentation therefore, if any, whether licensed heralds or prov ided in conection with the provision of any Services hereunder) as wel as al rights pertaining thereto, including but not limited to patent, copyright and trademark rights or any other legaly protected proprietary right, shal belong to and remain excl usively with Suplier. Buyer acquires only the right to transfer the EULA in respect of the Program Products to Customers strictly in acordance with this Agrement, and does not acquire any right of ownership, title or interest in the Program Product by v irtue of such transfer Al rights not expresly granted to Buyer are reserved by Suplier. Buyer acknowledges that the Program Products and its sequences, structure and organization are property of suplier, that Suplier retains exclusive ownership thereo f, as set forth above, and that the same constitutes Confidential Information of Suplier that shal be subject to the undertakings as to confidentiality and non - use set forth in the AECI 7. SUPLIER'S RESPONSIBILITIES Suplier proposals for Customers When providing proposals in response to Buyer or potential Customer requests for solutions Suplier shal Endeavour to propose Program Products that suport Buyer's hardware and software platforms in its primary proposal when no specific third party platforms have ben requested. Suplier shal not be obliged to provide proposals when no specific platforms where such proposals are not technicaly viable. Delivery' of Deliverable Suplier agres to deliver the Services and Deliverables specified in the relevant SOW for Customer, and wil use its comercialy reasonable eforts to met the agred delivery dates and quantities 12. PAYMENTS Except as otherwise expresly agred by the parties in a SOW for Customer, the folowing shal aply: - 1 Prices far Program Products A) Prices Tor Program Products with published or established license fes For Program Products that Suplier has a published or established license fe amounts as specified in Atachment 2 ("Hereinafter in this Item A refer red to as "License Fes")

Up to ¤499,999 70% ¤ 500,000 lo 68% ¤. 9,9 Page of ¤ 1,000,000 to ¤ 6% 1,9,9 ¤ 2,000,000 to ¤ 64% 2,9,9 ¤ 3,000,000 to ¤ 62% 3,9,9 ¤ 4,000,000 to ¤ 60% 4,9,9 e ¤ 5,0,0 and 58% above ove Prices for Program Products aply only upon Buyer's isuance of Work Authorizations for suply of the relevant Program Products to Buyer for Customers within the d agred by the as may by defined in the Suplier's relevant quotations for suply of the £ relevant Program Products to Buyer for each Customer requirement or project Prices for Program products without published or established license fes For Program Products in respect of which Suplier has no published or established license fe Program Products for new implementations, new oferings and certain licensing configurations as may be determined by Suplier, Suplier shal provide Prices for such Program Products in its response to Buyer's reque st for proposals and quotations to suport specific Customer bids. Suplier agres that the Prices for such Program Products shal in any event not be les favourable than the rate that it ofers to other similar companies with similar engagements. Notwith standing the above, in the event that Prices for Program Products do not facilitate Buyer's ability to ofer competitive pricing for Customer bids that the parties have agred to be significant bids. Suplier agres to consider, whether it would be comerc ialy viable lo provide aditional discounts or reductions to Prices, to enhance or facilitate Buyer's ability to ofer more competitive pricing to Customer. Unles otherwise agred by die parties in writing, any changes to Prices above for such significan t Customer bids shal only aply for the specific Customer bid. Buyer at al times remains fre to determine its own prices with and to Customers for Deliverables, including Program Products and Services. Except as otherwise stated in a SOW for Customer, al Prices are exclusive of taxes, duties and the like (colectively, for purposes of this section, "Taxes"), Al such Taxes, excluding taxes based on supliers net income, if any, are the responsibility of Buyer. Al payments shal be made without withol ding or deduction for or on acount of any present or future Taxes of whether nature imposed or levied by or on behalf of the country of destination, Buyer wil pay such aditional amounts as necesary, in order that the net amounts received by Suplier af ter such witholding or deduction shal equal the Prices payable to Suplier under a WA. !f requested by Suplier, Buyer shal promptly provide Suplier with copies of documentation evidencing that it has paid any and al witholding and like Taxes m acor dance with the laws of the country destination. 1.2 Prices for Suplier Maintenance Suport Page of Prices for Suplier Maintenance Suport for Program Products wil be Suplier's aplicable standard maintenance and suport services charges and per quotations to Buyer However, in the event that Buyer provides suport services to Customer, i.e., first line suport end helpdesk services, the Prices for Suplier Maintenance Suport for Program Products shal be based on Suplier's aplicable standard maintenance and suport services charges les the discounts as outlined below:

Suplier Maintenance Discount of supplier’s standard charges Suport Category Standard Cover Time (8 hrsx 5days/wek) 13.3% Extended Cover Time (8 hrs X7days/wek 16.67% Ful l Cover Time (24 hrs x 7 days/wek) 16.0% The above discounts shal aply only when Buyer is providing suport services to Customers at equivalent suport periods as provided by Suplier 31.3 Prices for Services Prices for Services shal be as defined in the specific SOW for Customer, consistent with quotations submited by Suplier or as may be subsequently agred by the parties. Where Services relate to provision of STOW, the Price for such Services shal be charged on a time and material ba sis. In the event that Buyer requires significant Services for a Customer engagement and where use of Suplier's standard services rates substantialy limits Buyer's ability to be cost competitive in Buyer's pricing proposals to Customer, Suplier agres t o review Prices ofered for such Services and consider providing discounts of its standard profesional service rates, provided, however, that the Suplier is not obliged to provide any discounts that it does not se as comercialy viable. - 4 Buyers Te rms of Payment Except as otherwise stated in a SOW for Customer, Buyer's payment shal be made net forty - five (45) days from date of receipt of invoice by Buyer shal be demed to have received each invoice latest on the dale that the relevant invoice is s ent per facsimile to Buyer, as confirmed by the transmision report of the facsimile machine. Title: Statement of "Work Mater Agrement #4903UKOI84 PA #49G4IN0575 Statement of Work £490<flNQ576 This statement of Work ("SOW") #49Q4rN0576 adopts and incorpo rates by reference the terms and conditions of Agrement reference the Software Services Engagement Agrement" 4903UK0184 ('Agrement") as amended [by the Participation Agrement # 49041^0575 by and betwen the parties hereto and] this SOW betwen IBM Glo bal Services India Pvt. Ltd. with an ofice at Delhi, India ("IBM" or "Buyer") and Comptel Corporations, with an ofice at Lapinrine 3, 010 Helsinki ("Comptel"

Page of or "Suplier"). This SOW is efective begining on 2/1/04 and wil remain in efect until 2 1/1/13. Transactions performed under this SOW wil be conducted in acordance with and be subject 10 the terms and conditions of this SOW, the Agrement and any aplicable Work Authorizations ("WAS"). This SOW is not a WA 1.0 PROJECT DOCUMENTS This Statem ent of Work (SOW) and the asociated exhibits: » Exhibit A - Technical Scope of Work o Exhibit B - Bil Of Materials » Exhibit C - Pricing over 10 years o Exhibit D - Description of Service Line Responsibilities 1.1 DEFINITIONS "Customer" means IBM Global Se rvices India Pvt Ltd - (for Bharti Tele Ventures Ltd acount) "Project Site" the project locations at Delhi, Murobni, Kolkala and Bangalore in India, Work Authorization" or "WA" means Buyer's authorization in either electronic or tangible form for Suplie r to conduct transactions under this Agrement (i.e., a purchase order or other apropriate Buyer designated document) A SOW is a WA only of designated as such in writing by Buyer. 2.2 SCOPE OF WORK The solution to be provided by Comptel is described in the Technical Scope of Work and 'Solution Delivery Documents (V2.0) which are part of this Statement of Work. Items included within Comptel's scope are: » Comptel Online Link Software - core software, no customizations » Comptel Lokup server - provides w ith memory based lokups for rating purposes o Comptel Online Link Busines Logic - GUI based configuration performed by Compte! o Comptel Online Link interface to Volo Bil D2CP ~ Volu Bil proprietary TCP/IP socket interface (implemented by Comptel using Volu BiU development kit: SCDK). » Coraptel Online Link interface to Ericson IN - Ericson implementation of DIAMETER charging interface (implemented by Cornprel acording to Ericson Diameter Specifications) o Comptel Online Link provides Usage Detail R ecords (UDRs) to HS/BMS. The UDRs are generated by OL acording to default foimat, Further mediation is a responsibility of receiving system. • Coraptel Online Link "NS Lookup i - this does not include configuration of DNS Server and MS Lokup utility and DNS data population. • Configuration of tables for the Lo - this does not include population Ihese tables. •> Any other items that Comptel may not included ID IBM's responsibilities, 3.0 DESCRIPTION O F DELIVERABLES AND SERVICES The folowing Deliverables shal be suplied by the Suplier lo the Buyer: Comptel Licenses, as detailed in Exhibit C:

Page of •> Coinptel Online Link Basic License o Lokup Server License » Comptel Online Link NE Interface to D2CP Volu BiU e Comptel Online Link NE Interface to Ericson IN (Diameter) Compte! Documentation, as detailed in Exhibit A: • Comptel Online Link 2.2 Customer Li « Comptel Onlbe Link 1.2 Release Notes " Comptel Online Link Functional Description "> Comptel Online Link Instalation Guide « Comptel Online Link Operation & Maintenance Guide Comptei Training, as detailed !n Exhibit A: o Compte! Online Link Overview (0.5 day) •> Comptel Online Link Administration o Comptel Online Link Configuration (0.5 day) " Complel Online Link Configuration - Laboratory exercise (O.Sday) Comptel Services including configuration and implementation are detailed in Exhibit A: 4.0 SUPLIER'S RESPONSIBILITIES 4.1 To deliver the Deliverables and Services defined in sect ion 3.0 in acordance with the terms of this SOW, the Agrement and the relevant Work Authorization. 4.2 Participate in progres reviews, as reasonably requested by IBM, to demonstrate Suplier's performance of its obligations. 4J The Suplier wil comply with the Customer's and IBM's published general policies as modified from time to time including those policies relating to health and safety at work in so far as they aply to the Suplier's obligations under this SOW 4.4 The Suplier wil only use indivi duals in the provision of the Services if they are suitable, competent and capable for the tasks which they are to undertake 4.5 Prompt notification of problems and isues that wil impact conformance to the Suplier's obligations stated in this SOW. 4.6 P rovide Buyer with Suplier Maintenance Suport (in acordance with Atachment of the Master Statement of Work), Provided that such Suplier Maintenance Suport shal . limited to provision of 2nd and 3rt line suport services to Buyer. The divisi on of 1 - responsibilities in respect of such suport services betwen Suplier and Buyer are defined in 5.0 QUALITY MEASURMENTS 5 - 1 Suplier has and wil maintain during the term of this Agrement a product and service quality program that includes the as esment of software enginering, development, test, configuration and change management proces, asesment of the quality of Deliverables, Products and Services, and Suplier wil document non - conformances, and performance targets. Suplier also has and c an demonstrate the use of proceses to corect erors or other non - conformances. 6.0 BUYER'S RESPONSIBILITIES 6.1 The Buyer agres lo enable aces to the apropriate busines and technical resources within Buyer and Customer organizations in a timely fash ion. 6.2 The Buyer agres lo provide timely review and aproval of project deliverables, and to facilitate timely review and aproval of project deliverables by the Customer.

Page of 6.3 Prompt notification of problems and isues that wil impact conformance to th e Buyer's obligations stated in this SOW or in the Agrement. 6.4 Provide the end customer (Bharti Tele Ventures Ltd) with the 1° line suport services, as further defined in Exhibit D. 7,0 MUTUAL RESPONSIBILITIES No changes can be made lo this SOW without the prior writen agrement of both parties. The detailed responsibilities are ilustrated in Exhibit A 8.0 DELIVERY SCHEDULE/PROJECT PLAN This is atached in Exhibit A, 9.0 PRICE AND PAYMENT SCHEDULE The Bil Material and indicative Pricing, based on pro jected growth over the Gamine 10 years, is atached as Exhibit C Please note that the years given in Exhibit C are calendar years, with year 1 being 204. The Comptel product licenses and delivery services provided for year 1 arc sold at a fixed price, in Euros. It is important to note that while Comptel initialy grant the right to use the Comptel Online Link product to a capacity level of 30 IPS, the payments are phased over a 3 year period, starting from 204. with a payment for 50 TPS capacity, folowe d by an aditional payment for an upgrade to 150 TPS in 205, and the final payment for the 30 TPS level, as wel as defered payment for the Lokup Servers for the 4 sites, to be made in year 206 The minimum comitment of the Customer covered y this contract, is the purchase of al license and staled services, and detailed in Exhibit C, to a TPS capacity of 30. If during years 204 and 205, or from year 206 onwards, the used TPS capacity level exceds 30, a License upgrade wil be invoiced as ad w hen the threshold is exceded, at the upgrade price detailed in Exhibit C. Note: TPS = average amount of GPRS, WAP and MS transactions per second during busy hour (15% of daily trafic). 9.1 Terms of Payment The terms of payment wil be as is act forth in this Agrement, In the event Suplier has not received payment as agred, Suplier wil notify Buyer and Buyer wil make prompt payment The payment shal be made net 60 days instead of net 45 days from date of receipt of invoice by buyer based on Milestone completion. Payments wil be acording to the folowing payment milestones: •'« 20% of total Prices upon receipt ;>. 10% of total Prices upon delivery of asociated Functional Specification; <•• 30% of tola] Prices upon Delivery ystem « 20% of total Prices upon Aceptance of Delhi o 20% of total Prices upon Aceptance of al four sites Once Aceptance and a 3 month Warmth period have pased, Suport and Maintenance wil be provided based on a percentage of the software license val ue Pricing for this Suport and Maintenance given in Exhibit C, is based on the asumption that Aceptance and Waranty wil have finished by the end of May, so payable for 7 months only in Page of calendar year 205. If this asumption is not corect, the Sup ort and Maintenance price may be adjusted acordingly The given Suport and Maintenance pricing is based on the understanding that IBM provide First Line Suport a nd Helpdesk services for the Com ptel Solution. 30.0 TAXES, DUTIES AND FES As per the Agrement, The milestone payment above are exclusive of VAT which is payable at the rate ruling on the day of invoice, The aplicable witholding tax wil be deducted from the amount payable to Comptel And TDS certificate wil be released on regular freq uency. 1.0 TRAVEL EXPENSE GUIDELINES As per the Agrement 12,0 OTHER CLAUSES Outsourcing License Subject to the due payment by buyer of al agred consideration defined in this SOW, Suplier grants to Buyer a non - exclusive, non transferable (except as defined herein below), non - sub licensable and personal right and license to use the Program Products for the performance of outsourcing services for the exclusive benefit of Bharti Tele Ventures Ltd.(outsourcing services) Subject to the preced ing sentence the terms and conditions of to the Master Statement of Work) shal be aplicable to buyer (as if buyer were the customers) Buyer shal have the right to asign the license to use the program products to its cust omer at no aditional cost, provided that buyer gives suplier thirty (30) days prior writen notice of its intent to asign such rights and provided further that buy user license agrement (EULA) and/ or such other contrac tual document (s) as may be reasonably required for such program product suport. 12 . A t para no 4 to 8 of asesment order , Ld. AO has held that the consideration received by the asese fals in the category of royalty both under the Income tax Act u/s 9 (1) (vi) clauses ( i), (i), (iva) and clause (v) of explanation 2 and article 13 (3) ( a) & (b) of Indo Finland DTA. Acording to him a . The software for use of which the license is granted is a technical or comercial equipment and therefore the consideration received by the asese is for the use of comercial cum scientific equipment. b . The software which are being licensed for use by the asese company are specialized software Therefore, t he nature of software is not shrink - wrap or of the shelf software as is being claimed by the asese. Acording to him present software which are being licensed by the asese embodies the Page of proces which is required to control and manage the specific se t of activities involved in the busines of telecom user plans, quantification of use, failing etc. Therefore, this software makes available a "proces" to the customers who "use" the proces while carying out their busines. It is, therefore, this speciali zed software also represent a "proces" which can be used in a particular industry specific core activity. c . Acording to him, it is not a sale of copyrighted product but it is copyright. 13 . He therefore held that Rs 12 , 03, 75,730 / - shown as software consid eration is held to be royalty and aplied rate of tax @ 10%. Further, the other gros receipt of USD 36235/ - from direct customer where the tax is borne by the asese Grosed up amount of USD 395712/ - is further taxed @ 15 % as per DTA. 14 . inst the draft order asese prefered aplication before LD. DRP who did not find any infirmity in the order of ld . AO and hence the AO pased final order. 15 . Before us the LD AR contended that : - a ) The Apelant at the request has developed no software or r equirement of its customer and it is only the programe products in the nature of standard software, which have ben suplied by the Apelant. b ) i sue in question has already ben decided on identical facts by the Jurisdictional High Court of Delhi in the case of DIT vs. Infrasoft Ltd [264 CTR 329] wherein it was held that the receipts from transfer of shrink wraped software is not taxable in India by stating that the licensing of computer software involves limited right to use 'copyrighted' material & does not give rise to any royalty income. For this, he submited a chart demonstrating the facts before the Honourable Delhi high court are on identi cal isue. Therefore he submited that Acordingly, in al circumstances, the case of the Apelant is covered by the judgment of Hon’ble Jurisdictional High Court wher facts held that receipts are not in the nature of royalty and not taxable in India.

Page of S.No. Facts Comptel Infrasoft OYJ 1 . Subject mater of transfer is Used for Used for civil a standard software used for Telecom enginering a particular industry industry work 2 . Licensing Agrement shows that the license is non � � exclusive, non - transferable and the software has to be used in acordance with the Agrement 3 . As per the Agrement, al the intelectual property � � rights in the form of patent, copyright, trademark etc. are the property of the seler only and at no point of time,it has ben transfered to either the buyer/ customer. 4 . As per the Agrement, the rights acquired in relation to � � the copyright are limited to those necesary to enable the user to operate the program, for example, where the transfere is granted limited rights to reproduce the program. 5 . The Agrement categoricaly restricts the user to copy, � � publish, display, disclose, modify, merge etc the software except for archival purposes.

Page of 6 . The license is not alowed to exploit the computer � � software comercialy. In other words, the license has no right to deal with the product just as the owner would be in a position to do. c ) Thereafter ld. AR refered to v arious Clauses of the agrements / documents and submited that i . subject mater of transfer is a standard software in the form of a mediation software and they are a copy righted article i . al the intelectual property rights in the form of patent, copyright, trademark etc. are the property of the Apelant only and at no point of time same has ben transfered to either the buyer or the customer; . the buyer i.e. IBM has got only a right to transfer the EULA in favour of a particular customer; iv . Acording to EULA, the end customer does not get any right to the intelectual property in the standard software; v . Further restrictions has also ben put on the end customer to use the standard software to use for only its busines operations; d ) He further stated that what was transfered was neither the copyright in the software nor the use of the copyright in the software, but what was transfered was the right to us e the copyrighted material, which was clearly distinct from the rights in a copyright. Hence , where the payment made is in conection with transfer of a copyrighted article then it represents the purchase price of an article and canot be considered as roy alty either under the Act or under the Treaty; rather it is busines income of the apelant.

Page of e ) His next argument was the an income to be categorized as royalty, twin conditions should be satisfied i.e. there has to be consideration and this consideration s hould be for transfer of al or any right (including the granting of the license ) in respect of the copyright, patent, invention, design, secret formula or proces, scientific work. Acordingly, unles the payment is made for acquisition of a right to use a “copyright payment canot be regarded as royalty under Explanation 2 to section 9(1 ) ( vi) of the Act. Acording to him, the payment received by the Apelant is not for acquisition of a right to use “copyrighted article” and, therefore, as royalty. f ) On the aspect of definition of Royalty as per Indo FINLAND DTA he submited that definition of royalty as per article 13(3) of the Treaty is narower than the definition contained under section 9(1 ) ( vi) of the Act. Acording to him under the Treaty the income of the Apelant should have ben gene rated by the "use of or the right to use of" any copyright to be taxable as royalty income. g ) He further submited that it is the setled proposition that in case of the asese who is a non - resident and having tax residency certificate then the provisi on of DTA wil prevail over Domestic tax laws.

Therefore, his contention was that it is the sale of standard software canot be royalty in terms of Domestic tax Laws as wel as per Indo Finland DTA and therefore it is chargeable to tax as busines incom e of the asese acording to article 7 of DTA. Hence, the taxability of these software sales is not royalty as held by AO.

16 . Before us,Ld . DR vehemently contended and submited that the software is a not a standard software as per reasons given by ld. AO in his order. He further stresed up on the order of DRP for subsequent years and stated that Page of retrospective amendment of section 9 (1 ) has ben considered by DRP. He further submited that when there is an amendment in the law there is no n ed of amendment in DTA and amended law should prevail as per article 3 (2) of the DTA. He further submited that after the clarificatory retrospective amendment (w.r.e.f. 01.06.1976) brought in section 9 by the Finance Act, 2012, even a plain reading of the Act along with DTA shows that the receipts of Asese in respect of the computer software are taxable as Royalty. He submited that the Court could not read anything into a statutory provision, which is plain and unambiguous. He submited that Exp lanation 4, 5, and 6 inserted under section 9(1) by the Finance Act, 2012 w.r.e.f. 01.06.1976 clearly covers the isue in favour of revenue. For this, that coresponding amendment to the DTA is not required for the asese's receipts in respect of computer software to be taxed as 'royalty'. For this, he vehemently relied on the terms "right" and / or "rights" and / or "information" are not defined in DTA. Therefore, the meaning of such terms under the Act shal aply by virtue of Article 3(2) of India - Finland DTA. For this argument, he relied on two decisions of cordinate benches i.e. Viacom 18 Media (P.) Ltd. [2014] 4 taxman.com 1 (Mumbai - Tri b.) and Vodafone South Ltd. [2015] 53 taxman.com 41 (Bangalore - Trib.). 17 . In rejoinder ld., AR submited that amendment to the law could not amend the definition in DTA. He relied up on the Decision of Honorable Delhi high court in case of 25 taxman.co m 25 (Delhi) Director of Income tax v. Nokia Networks OY where honorable high court has considered the retrospective amendment in section 9 of the Income tax Act for and held that amendment canot be read in to the treaty. 18 . We have carefuly consider ed the rival contentions . We have also perused the decision of Honorable Delhi High court in case of [ 2013] 39 taxman.com 8 (Delhi) Director of Income taxv. Infrasoft Ltd. In that decision, also the asese Page of was developing customized software to be used for designing highways, railways,

COMPTEL OYJ,FINLAND vs. ADIT, NEW DELHI