EXHIBIT 10.54
DEVELOPMENT
AGREEMENT
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DEVELOPMENT AGREEMENT
---------------------
THIS AGREEMENT having an effective date at the date of the last signature
hereto and is entered into by and between MICROPOLIS Corporation with an
office and principal place of business at 00000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxx 00000, XXX and BTS Broadcast Television Systems
GmbH, with an office and principal place of business at Xx Xxxxxxxxxxxxx
0, 00000 Xxxxxxxxx, Xxxxxxx.
WHEREAS, MICROPOLIS and BTS want to cooperate in the design, development
and manufacturing of a family of video disk recorders.
NOW, THEREFORE, the PARTIES agree that the PRODUCT development activities
shall be conducted under this AGREEMENT subject to the following terms and
conditions
1 DEFINITIONS
1.1 MICROPOLIS shall mean MICROPOLIS CORPORATION and its AFFILIATES.
1.2 BTS shall mean BTS BROADCAST TELEVISION SYSTEMS GMBH and its AFFILIATES.
1.3 AFFILIATE shall mean any company. partnership Joint venture, or other
entity which is controlled by a PARTY. Control shall mean the possession
of fifty percent (50%) or more of the voting stock or the power to direct
or cause the direction of the management and policies of the controlled
entity, whether through the ownership of voting securities by. contract or
otherwise.
1.4 PARTY or PARTIES shall mean MICROPOLIS and/or BTS.
1.5 PRODUCT shall mean a family of video disk recorders with SPECIFICATIONS as
described in Appendices A and B.
1.6 CUSTOMER SPECIFICATION shall mean a written document setting forth the
customer-observable characteristics of the PRODUCT, including but not
limited to the performance, interfaces and user features as defined in
Appendix A.
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1.7 TECHNICAL SPECIFICATION shall mean a written document setting forth the
measurable characteristics of the PRODUCT and the SPARE PARTS including
internal and external interfaces and components as described in the
Appendix B.
1.8 SPECIFICATION shall mean CUSTOMER and TECHNICAL SPECIFICATION jointly.
1.9 PROGRAM shall mean the development program undertaken pursuant to
Article 2 for the purposes of developing a PRODUCT.
1.10 BACKGROUND TECHNOLOGY shall mean any and all patents, know-how, methods
procedures processes, computer programs, information, designs and data
which a PARTY owns solely or jointly with any third party and have the
free right to grant licenses without payment to third parties, which are
pertinent to the PRODUCT, and have a priority date (or date of first
written documentation in the case of unpatented know-how and designs) that
is earlier than the effective date of this AGREEMENT.
1.11 INVENTION shall mean any technological discovery relating to the PRODUCT
made in the performance of work under the PROGRAM, not being BACKGROUND
TECHNOLOGY.
1.12 PROGRAM PATENT(S) shall mean all valid or enforceable patents, utility
models, and patent applications filed in any country by a PARTY, which are
based on or cover INVENTIONS, including any and all divisions,
continuations, continuations-in-part, extensions, additions
substitutions, renewals, or reissues thereof.
1.13 PROGRAM TECHNOLOGY shall mean any and all unpatented know-how, methods,
procedures, processes, computer programs, information, designs, data,
materials, compositions, equipment, devices, components and prototypes,
including unpatented INVENTIONS, which are made or developed by or on
behalf of either PARTY or jointly by the PARTIES in the performance of
work under the PROGRAM.
1.14 PURCHASE AND SALE AGREEMENT shall mean an agreement to be concluded
between the PARTIES in which the conditions for selling the PRODUCT from
MICROPOLIS to BTS will be fixed.
1.15 SPARE PARTS shall be the modules, as defined in Appendix B.
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2 PROGRAM
2.1 The PROGRAM to be performed hereunder shall comprise the activities of the
PARTIES directed to development of the PRODUCT as described in Appendix D.
BTS and MICROPOLIS shall share the responsibility to provide the
technological means to achieve the TECHNICAL SPECIFICATION.
2.2 The PARTIES shall participate in the PROGRAM in accordance with the
timetable contained in Appendix C and the responsibilities of the PARTIES
as described in Appendix D.
2.3 Except as otherwise specifically described herein or agreed upon between
the PARTIES, each Party shall conduct its own work under the PROGRAM at
its own facilities. BTS shall provide development funding to MICROPOLIS
presuming to MICROPOLIS meeting its designated milestones as described in
Appendix E.
2.4 During the PROGRAM term as described in Article 4 neither PARTY shall
enter into any cooperative development agreement regarding video disk
recorders similar to or identical with the PRODUCT with any third party
that develops, manufactures or markets such video disk recorders.
2.5 Each PARTY shall make its best efforts to realize the PROGRAM targets
pursuant to the timetable described in Appendix C. In the event that a
PARTY foresees a possible delay in its development work, such PARTY shall
promptly inform the other PARTY. Penalty Clauses as follows will apply:
2.5.1 BTS will be entitled, to withhold
a) for a delay of more than 2 weeks in meeting any funding development
milestone, as defined in Appendix E, a sum of 10% of the development
funding.
b) for a delay of more than 4 weeks in meeting any funding development
milestone, as defined in Appendix E, a sum of 20% of the development
funding.
2.5.2 In case MICROPOLIS will be at least able to avoid a delay in meeting the
milestone "Acceptance test", (even a delay of meeting a previous milestone
event occurred) and this milestone will be passed by successfully, BTS
will be obliged to provide the development funding in total. This means
that if the last milestone, "Acceptance test" is met, BTS will pay to
Micropolis the agreed development funds associated with that milestone,
and the agreed development funds that were earlier withheld due to the
failure of Micropolis to meet one or several milestones.
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3 PROGRAM DIRECTION
3.1 The following PROGRAM Directors are hereby appointed to direct the course
of PROGRAM activities in accordance with Article 2:
BTS PROGRAM Director: Xxxx Xxxxxxx
MICROPOLIS PROGRAM Director: Xxxx Xxxxxxx
Any change in the designated PROGRAM Directors shall require advance
written notice to the other PARTY. The PROGRAM Directors shall have no
authority to modify or amend the terms of this AGREEMENT. All decisions
with regard to changes in any of the Appendices, including any changes as
described in Articles 2.1 and 2.2, and any proposals, issues and courses
of action under the PROGRAM shall be made by agreement of the PROGRAM
Directors unless otherwise specified herein.
3.2 Subject to the provisions of Article 2, the Program Directors shall be
responsible for the following: a) Overall guidance of the PROGRAM; b)
Scheduling and conducting timely reviews of the PROGRAM; c) Reviewing,
updating and disseminating the SPECIFICATIONS and WORK PLAN in a timely
manner; and d) Controlling any form of communication between BTS and
MICROPOLIS regarding the PROGRAM.
3.3 Each PARTY agrees to make its employees and nonemployee consultants
reasonably available at their respective places of employment to consult
with the other PARTY during the PROGRAM on issues arising from work
performed under the PROGRAM.
3.4 Each PARTY agrees to make technical specialists reasonably available for a
specified period of time to assist in the development of the PRODUCT at
the other PARTY's facility. The costs for the respective travels will be
borne by each PARTY itself.
3.5 During the PROGRAM, both PARTIES shall have meetings for the purpose of
periodic status reviews of the PROGRAM. The costs for the respective
travels will be borne by each PARTY itself.
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4 TERM AND TERMINATION OF THE PROGRAM
4.1 The PROGRAM shall commence on the effective date of this AGREEMENT and
continue until completion of the PROGRAM in accordance with Appendices C
(Timetable) and D (Responsibilities) unless earlier extended by agreement
of the PARTIES or terminated as a part of termination of this AGREEMENT as
provided in Article 11.0 The PROGRAM shall be completed when the PRODUCT
meets its respective SPECIFICATIONS in accordance with the procedure as
specified in article 5.
4.2 In the event that technical support is needed during the phase of the
introduction of the PRODUCT into the market, or if a customer requests a
PARTY for improvement of the PRODUCT which requires the assistance by the
other PARTY for the period of two (2) years after termination of this
AGREEMENT, both PARTIES will discuss in good faith how to cope with such
request.
4.3 MICROPOLIS agrees that if during the term of this AGREEMENT it develops
any new video disk recorders, BTS shall be given the opportunity to
purchase and/or distribute, with limited exclusivety, such products. In
such event MICROPOLIS shall give BTS written notice of the availability of
such a product and shall provide BTS with appropriate and necessary
product information to make a reasoned decision. On receipt of such
notice, BTS shall have three (3) months to accept the offer and/or to
commence contract negotiations with MICROPOLIS and BTS will inform
MICROPOLIS before expiration of said period of its decision. This time
period may be extended by the mutual agreement of the PARTIES.
Notwithstanding any time extensions, if MICROPOLIS and BTS do not agree
upon reasonable terms and conditions for incorporation of such product
into this AGREEMENT, MICROPOLIS shall be free to market such products in
any manner it seems fit, provided an exclusive distributorship is not
offered to anyone else on terms better than those offered to BTS.
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5 ACCEPTANCE
5.1 The progress of the development PROGRAM, in terms of functionality and
deliverables is defined in Appendix D.
5.2 The acceptance of the first regular production PRODUCT will take place at
the site of BTS at the date specified in Appendix E. The acceptance to be
carried out jointly by MICROPOLIS' and BTS' inspection personnel will
cover the SPECIFICATION.
5.3 The results of the acceptance shall be laid down in an acceptance
certificate which is to be signed by both parties.
5.4 In case the PRODUCT does not meet SPECIFICATION, the responsible PARTY
shall correct such defects without delay. Upon completion of the
corrective measures the acceptance procedure to be applied shall be the
same as described above.
5.5 If no defects should be discovered during the acceptance, the PRODUCT
shall be deemed to be successfully accepted at the date of acceptance
inspection.
5.6 Once the PRODUCT is accepted by BTS as evident of article 5 above,
MICROPOLIS shall not make any changes or modifications in the PRODUCT
without prior written consent of BTS. This requirement, however, does not
preclude MICROPOLIS from using equivalent components and parts that do not
affect form, fit, function or interchangeability of SPARE PARTS. In the
event MICROPOLIS uses such equivalent components and/or parts, MICROPOLIS
shall immediately inform BTS thereof and provide BTS with an updated
version of the Documentation as soon as possible and at MICROPOLIS' costs.
Each successor model of the PRODUCT or any other model agreed upon between
the PARTIES to be incorporated herein shall be subject to the procedure
set forth in this Article 5.
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6 TRANSFER OF TECHNOLOGY
6.1 During the term of this PROGRAM, both PARTIES will, if necessary for the
--
continuation of the PROGRAM, disclose and exchange INVENTIONS, PROGRAM
PATENTS and PROGRAM TECHNOLOGY.
6.2 During the term of the Purchase and Sale Agreement MICROPOLIS will
disclose all information, documentation and PROGRAM TECHNOLOGY sufficient
to enable BTS to independently develop enhancements of the PRODUCT.
Micropolis will, upon the request from BTS, support BTS in its
development of such enhancements, over and above, the SPECIFICATION and
disclosure according to article 6.1 and 6.2 above, to the PRODUCT.
Micropolis will then, at its sole discretion, charge BTS industry standard
rates for this support. Any disclosure of such information do not
constitute any guarantee that BTS developed enhancements will perform
according to BTS's expectations.
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7 INVENTIONS AND PATENTS ON INVENTIONS
7.1 Although it is expected that the ownership of most, if not all, INVENTIONS
shall be governed by the following provisions of this Article, both
PARTIES agree to discuss in good faith the ownership of those INVENTIONS
which arise under unusual and unforeseen circumstances, such ownership to
be governed by applicable patent law.
7.2 INVENTIONS and any patents, copyrights, know-how and designs based on
INVENTIONS, shall be owned as follows:
a) if invented solely by MICROPOLIS, ownership shall vest in MICROPOLIS,
and, MICROPOLIS hereby grants BTS a paid-up, worldwide, unrestricted,
nonexclusive license (without sublicensing rights) to undertake
manufacturing as agreed in Appendix F, and to use and sell or otherwise
dispose of product incorporating such INVENTION and PROGRAM PATENTS
relating thereto.
b) if invented solely by BTS, on request and accepted, in writing by
MICROPOLIS, ownership shall vest in BTS, and BTS hereby grants MICROPOLIS
a paid-up, worldwide unrestricted, non-exclusive license (without
sublicensing rights) to undertake manufacturing, use and sell products
incorporating such INVENTION and PROGRAM PATENTS relating thereto, all in
accordance with Appendix F.
c) if invented jointly by both PARTIES of which the respective contributions
cannot be separately filed (hereinafter called JOINT INVENTIONS), any
patent applications and patents issued thereon shall be in the name of
both PARTIES and be jointly owned by both PARTIES. Each PARTY is free to
grant a license to any third party without obtaining a consent of the
other PARTY and without assuming any obligation to the other PARTY.
d) In each case of such a JOINT INVENTION, the PARTIES will promptly agree
which of them shall file the first patent application and further decide
in mutual consultation in which country or countries such applications are
to be made.
7.3 Patent and copyright procurement activity in regard to INVENTIONS shall be
pursued at the discretion and expense of the owner set forth in Article
7.2.
The costs and expenses for filing and prosecuting patent applications on
Joint INVENTIONS and for the issuance of the respective patents, except
for the internal cost of the patent department filing the first patent
application shall be borne equally by the PARTIES.
Each PARTY will notify the other upon the preparation of any written
report based on a JOINT INVENTION and upon the filing of any patent or
copyright application based on a JOINT INVENTION, furnish the filing PARTY
with all documents or other assistance that may be necessary for the
filing and prosecution of each application provide the other with a copy
of any such INVENTION report or patent or copyright application and any
issued patent or statutory copyright granted thereon and on request update
the other as to the status of any such patent or copyright application.
Each PARTY further agrees to sign documents to vest or maintain title to
patents and/or copyrights in the owner designated in Article 7.2 and
to provide reasonable assistance to the other with respect to preparation
and prosecution of such patents copyrights.
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7.4 In case a PARTY is not or no more interested in participating in a
patent or patent application on JOINT INVENTIONS or the maintenance
thereof, then this PARTY shall give written notice to the other PARTY. The
other PARTY shall be entitled to file or maintain said patent or patent
applications in its name and at its costs. The first PARTY shall have the
right to receive against reasonable royalties mutually to be agreed
between the PARTIES, a worldwide, unrestricted, non-exclusive license
(with sublicensing rights) under said applications and patents.
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8 PROPRIETARY RIGHTS OTHER THAN INVENTIONS
8.1 MICROPOLIS hereby grants to BTS a paid-up, worldwide, nonexclusive license
(without sublicensing rights) to undertake manufacturing as agreed in
Appendix F, and to use and sell or otherwise dispose of PRODUCT
incorporating (i) MICROPOLIS' rights to the extent that they do not relate
to INVENTIONS, and (ii) BACKGROUND TECHNOLOGY.
8.2 BTS hereby grants to MICROPOLIS a paid-up, worldwide, non-exclusive
license (without sublicensing rights) to undertake manufacturing and to
use and sell-all in accordance with Appendix F-the PRODUCTS incorporating
(i) BTS' proprietary rights, to the extent that they do not relate to
INVENTIONS, and (ii) BACKGROUND TECHNOLOGY.
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9 CONFIDENTIAL INFORMATION
9.1 The PARTIES recognize that the conduct of the PROGRAM may require the
transfer of confidential information between them. As used herein,
"confidential" or "proprietary" information shall include only
information, data or samples relating to the PROGRAM. Disclosures of
confidential or proprietary information hereunder by either PARTY will be
made in writing (or promptly confirmed in writing if made in another
form), and will be clearly marked confidential. Such confidential
information will be safeguarded by the recipient and will not be disclosed
to third parties. This mutual obligation of confidentiality will apply
until three (3) years after termination of this AGREEMENT, but will not
apply to any information to the extent that such information:
a) is or hereafter becomes generally available to the public other than by
reason of any default under this AGREEMENT; or
b) was already known to the recipient as evidenced by prior written
documents in its possession; or
c) is disclosed to the recipient by a third party who is not in default of
any confidentiality obligation to the disclosing PARTY hereunder; or
d) is developed by or on behalf of the receiving PARTY, without reliance on
confidential information received hereunder; or
e) is disclosed with the permission of the disclosure to any third party on
a non-confidential basis;
f) is submitted to governmental or non-governmental agencies to facilitate
the issuance of marketing or safety approvals for PRODUCT; or
g) is disclosed in patents filed under the terms of this AGREEMENT on
INVENTIONS related to PRODUCT or to the manufacture or use of such
PRODUCT; or
h) has been approved for publication by the PROGRAM Directors; or
i) is in furtherance of the licenses and rights granted herein for the
manufacture and marketing of PRODUCTS, provided that a) the other PARTY
prior to such disclosure will be informed hereof and b) declares its
consent in written form.
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10 GENERAL TERMS AND CONDITIONS
10.1 Notices
All notices required or permitted hereunder shall be in writing and shall
be deemed duly given when personally delivered or sent by registered or
certified mail return receipt requested, postage prepaid, or by cable
confirmed by letter as aforesaid, as follows:
Notice to MICROPOLIS:
for technical matters: Program Director
MICROPOLIS Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
XXX
for other matters: General Manager of the System
Business Unit
MICROPOLIS Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
XXX
Notice to BTS
for technical matters: Program Director
Business Unit Griesheim
Broadcast Television Systems GmbH
Im Xxxxxxxxxxxxx 0
00000 Xxxxxxxxx
Xxxxxxx
for other matters: General Manager of BTS-ICC
Weiterstadt
Business Unit Griesheim
Broadcast Television Systems GmbH
Im Xxxxxxxxxxxxx 0
00000 Xxxxxxxxx
Xxxxxxx
or to such other address as either PARTY may hereafter designate in
writing by like notice.
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10.2 Publicity
Neither PARTY will issue any press release or make any public statement in
regard to this AGREEMENT without the prior written approval of the other
PARTY.
Neither PARTY shall use in advertising, publicity or other promotional
activities any name, trade name, trademark, or other designation of the
other PARTY without the express written approval of the other PARTY, which
shall not be unreasonably withheld.
10.3 Export License
This AGREEMENT and any technical information provided under this AGREEMENT
may be subject to restrictions concerning the export of PRODUCT or SPARE
PARTS or technical information from the Federal Republic of Germany or USA
which may be imposed by the respective Government or any other competent
authority. Accordingly, the PARTIES agree that they shall not export or
re-export, directly or indirectly, any technical information acquired
under this AGREEMENT or any PRODUCT utilizing any such technical
information to any country for which the Government or other competent
authority at the time of export requires an export license or other
approval, without first obtaining the written consent to do so from the
competent authority when required by an applicable statute or regulation.
10.4 Force Majeure
Neither MICROPOLIS nor BTS shall be liable for delay or failure in the
performance of the obligations contained in this AGREEMENT arising solely
from any one or more of the following matters:
a) acts of God, or public enemy or war (declared or undeclared);
b) acts of governmental or quasi-governmental authorities or regulations or
restrictions imposed by law or by court action, except as they may result
from the unreasonable failure of MICROPOLIS or BTS to perform as required
hereunder;
c) acts of persons engaged in subversive activities or sabotage;
d) fires, floods, explosions or other catastrophes;
e) epidemics or quarantine restrictions;
f) strikes, lockouts or similar labour disruptions;
g) freight embargoes, or interruption of transportation;
h) unusually severe weather;
i) delays of a supplier of one PARTY due to any of the above causes or
events; or
j) any other extraordinary event beyond the control of the PARTY concerned;
and provided that due diligence is exercised to cure such cause and resume
performance, and the time for performance by such PARTY shall be extended
by a period of any such delay.
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10.5 Conflicts in Obligations
MICROPOLIS warrants to BTS that this AGREEMENT does not conflict with
MICROPOLIS' obligations under any other agreement to which MICROPOLIS is
or was a party, and that MICROPOLIS is free to fulfill all obligations
stated herein.
BTS warrants to MICROPOLIS that this AGREEMENT does not conflict with BTS'
obligations under any other agreement to which BTS is or was a party and
that BTS is free to fulfill all obligations stated herein.
10.6 Conflicts in Documentation
In case of any conflicts between this AGREEMENT and any prior agreements
on the same subject correspondence, and other documents during the term of
this AGREEMENT, this AGREEMENT shall govern and prevail, and the
conflicting terms and conditions of any such documents shall be deemed
deleted and shall not be binding upon either PARTY.
In the event the provisions of this AGREEMENT conflict with provisions of
the Appendices, this AGREEMENT shall prevail unless otherwise specifically
agreed upon.
10.7 Amendments
No addition to, deletion from or modification of any of the provisions of
this AGREEMENT shall be binding upon the PARTIES unless made in writing
and signed by a duly authorized representative of each PARTY. Any such
additions, deletions or modifications shall refer specifically to this
AGREEMENT.
10.8 Severability
If one or more of the provisions of this AGREEMENT is held invalid,
illegal or unenforceable by a competent court of law, the remaining
provisions shall not in any way be affected or impaired thereby. In the
event any provision is held invalid illegal or unenforceable, the PARTIES
shall use reasonable efforts to substitute a valid, legal and enforceable
provision which, insofar as is practical, implements purposes of the
article held invalid, illegal and unenforceable.
10.9 Assignment
The rights of either PARTY under this AGREEMENT shall not be assigned, in
whole or in part, by either PARTY (whether by operation of law or
otherwise) without the prior written consent of the other, except that
either PARTY may assign its rights hereunder to a successor, subsidiary or
affiliated corporation
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without releasing the assignor from liability hereunder. Any assignment
contrary to the terms hereof shall be null and void and of no force or
effect.
10.10 Applicable Law
This AGREEMENT shall be governed by and construed and enforced in
accordance with the laws of Germany.
10.11 Arbitration
All disputes, controversies or differences which may arise between the
PARTIES in relation to or in connection with this AGREEMENT may be settled
by amicable negotiation by both PARTIES if the PARTIES so agree. If both
PARTIES are unable to settle such disputes, then such disputes shall be
referred to and finally settled by arbitration under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce in
Paris. The Arbitration shall be conducted in the English Language and take
place in USA if it is initiated by BTS or in Germany if it is initiated by
MICROPOLIS. The award of arbitration shall bind both PARTIES.
10.12 Entire Agreement
This AGREEMENT constitutes the entire understanding of the PARTIES with
regard to the development of PRODUCT and supersedes all prior discussions,
representations and understandings.
10.13 Limitation of Liability
Neither PARTY shall be liable to the other for any indirect, special or
consequential damages whether grounded in tort, strict liability or
contract, and under no circumstances shall either PARTY's liability to the
other PARTY exceed the obligations described herein.
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11 TERM AND TERMINATION OF THE AGREEMENT
11.1 This AGREEMENT shall become effective at the date of the last signature
hereto or the date on which this AGREEMENT is approved by the USA or
German Government if such approval is required, whichever is later, and
shall continue in effect until the PROGRAM has been completed, unless
sooner terminated by a PARTY in accordance with this Article 10.
11.2 This AGREEMENT may be terminated by either PARTY in the event that the
other PARTY, despite its best efforts, provides cause for termination due
to material lack of performance in the PROGRAM, such termination to be
effective not less than sixty (60) days after written notice to the other
PARTY citing alleged deficiencies and failure of the other PARTY to
remedy, such termination shall be effective not less than sixty (60) days
after written notice to the other PARTY and failure of the PARTIES to
agree on any such revision.
11.3 This AGREEMENT may be terminated by either PARTY upon written notice to
the other (without prejudice to either PARTY'S rights to claim direct
damages or seek other equitable relief).
a) in the event of a material breach by the other PARTY of any terms or
conditions of this AGREEMENT and the failure to cure such breach within
sixty (60) days after written notice or
b) in the event that MICROPOLIS fails to meet any milestone event as per
Appendix E for more than eight weeks.
c) if, at any time during the term of this AGREEMENT, the other PARTY shall
become a voluntary debtor party to any bankruptcy, insolvency, or
reorganisation proceeding, or shall be declared bankrupt or reorganised by
a court of competent jurisdiction, or enter into any composition with its
creditors, or shall begin any proceeding for the liquidation or winding up
of its business or for termination of its corporate charter.
11.4 If MICROPOLIS stops production of PRODUCTS or terminates this Agreement
which is disputed by BTS or if MICROPOLIS is found in breach of this
Agreement, BTS is hereby granted by MICROPOLIS an unconditional, non-
exclusive, worldwide, unrestricted license under its know-how, patents,
etc. to develop and/or manufacture and/or sell and/or license and/or
dispose of products. These consequences shall also apply in case of
Article 11.3 a), b) and c) hereof.
11.5 Termination of this AGREEMENT shall not relieve BTS or MICROPOLIS of any
rights and obligations then accrued hereunder or which extend beyond the
date of termination or expiration by the terms of this AGREEMENT,
including but not limited to rights and obligations contained in Articles
4.4, 4.5, 6, 7, 8, and 11.
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12 APPENDICES
The following appendices. as referred to in this AGREEMENT. form an
integral part of the AGREEMENT:
Appendix A: Customer Specifications
Appendix B: Technical Specifications
Appendix C: Project Timetable
Appendix D: Responsibilities of the Parties
Appendix E: Milestones and development funding
Appendix F: Manufacturing Conditions
UNDERSTOOD AND AGREED: UNDERSTOOD AND AGREED:
BTS Broadcast Television MICROPOLIS Corporation
Systems GmbH
By: /s/ X. Xxxx /s/ H.D. Xxxxx By: /s/ Per Sjofors
Title: CFO General Manager Title: Director Marketing VSD
Date: 9/15/95 Date: 15 Sept 1995
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APPENDIX E: MILESTONES AND DEVELOPMENT FUNDING
Mini-Pool milestones When Funding
1 Memorandum of Agreement (MoA) signed 31. Jul 95 100.000 $
2 Kick off Meeting 10. Aug 95
3 BTS supply serial digital interface (SDI) design 30. Aug 95
4 Joint Development Agreement signed with
appendices 30. Aug 95
5 Supply BTS with Luigi Board and files 07. Sep 95
6 Brand Name Reseller's Agreement signed 15. Sep 95 200.000 $
7 Design Review AV CODEC in Chatsworth 02. Okt 95
8 Spec finalized Poolnet VDCP UI functionality 13. Okt 95
9 Supply VMC and Devlib spec 15. Okt 95
10 VDRx40 and VDRx40F full design review and
sign-off 10. Nov 95 150.000 $
11 MC3000 Ctl Panel ready 01. Dez 95
12 VDR110 prototype sign off in Chatsworth 20. Dez 95 200.000 $
13 VDR110 prototype delivered to Weiterstadt 15. Jan 96
14 VDR110 beta units 05. Feb 96
15 VDRx40 lab model to Weiterstadt 15. Feb 96 150.000 $
16 VDR110 Acceptance test 15. Mar 96
17 NAB 01. Apr 96
18 VDRx40 prototype 01. Apr 96
19 VDR110 ships 01. Apr 96
20 VDRx40 BTS-W Release to manufacturing 15. Apr 96
21 VDRx40 betasite release 01. Mai 96
22 VDRx40 Acceptance test 15. Jun 96
23 VDRx40 deliveries to customer 28. Jun 96 200.000 $
24 Data link integration begins 01. Aug 96
TOTAL 1.000.000 $
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APPENDIX F: MANUFACTURING CONDITIONS
BTS has the option to buy on an exclusive basis from Micropolis complete
units, VDR110 and VDRX40, as specified in appendix A and B;
or,
at BTS' own discretion BTS may buy from Micropolis VDR sub-assemblies as
defined in Appendix B for BTS's own manufacturing, further development,
final testing, assembly and for re-sale.
MICROPOLIS is granted the BTS licenses for the purpose of manufacturing
and selling PRODUCTS and similar PRODUCTS to BTS and a low-cost MICROPOLIS
version of the VDR110 to Tyrell corporation
PURCHASE AND SALES
AGREEMENT
Page 1 of 22
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") having an effective date at
the date of the last signature is made by and between Micropolis
Corporation ("COMPANY"), a Delaware corporation, and BTS Broadcast
Television Systems GmbH ("BTS"), a German corporation.
WHEREAS, the Parties have entered into a product development agreement on
the basis of which the COMPANY intends to develop PRODUCT for Professional
Broadcast Industry for exclusive sale to BTS.
WHEREAS, BTS desires to have said PRODUCT, key components and other
PRODUCT sold to BTS on the terms and conditions set forth in this
Agreement:
NOW THEREFORE, the parties hereto agree as follows:
1 Certain Definitions
1.1 All terms defined in the Development Agreement shall have the same meaning
when used in this Agreement.
1.2 "PRODUCT Software" means any computer software that is a component or part
of a PRODUCT, regardless of whether such software is embedded in
semiconductors.
1.3 "Distributor" means a dealer, distributor, reseller, brand name reseller,
original equipment manufacturer, value added reseller, systems integrator,
independent sales representative or agent.
1.4 Similar PRODUCTs shall mean a PRODUCT which in view of the average
customer of PRODUCT would compete with the PRODUCT respectively, taking
only price and performance into account.
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2 Exclusivity
2.1 Subject to the terms and conditions of this Agreement, COMPANY hereby
agrees to sell on an exclusive basis to BTS the PRODUCT worldwide, and
grants worldwide license to BTS to sublicense the PRODUCT Software in
connection with the sale of other BTS Products. The only exception to this
exclusivity shall be that COMPANY is allowed to conduct business for the
sale of a low cost COMPANY's version of the VDR110 to Tyrell Corporation,
00 Xxxxxxxxxx Xxxxxx, Xxxxxx, X.X.
2.2 COMPANY agrees that if during the term of this Agreement it develops any
video disk recorder, BTS shall be given the opportunity to exclusively
purchase and/or exclusively distribute such Products on the basis of the
same terms and conditions (same for pricing) as laid down in this
Agreement. In such event COMPANY shall give BTS written notice of the
availability of such a product and shall provide BTS with appropriate and
necessary product information to make a reasoned decision. On receipt of
such notice, BTS shall have three (3) months to accept the offer and/or to
commence price negotiations with COMPANY and BTS will inform COMPANY
before expiration of said period of its decision. This time period may be
extended by the mutual agreement of the parties. Notwithstanding any time
extensions, if COMPANY and BTS do not agree upon reasonable pricing for
incorporation of such product into this Agreement, COMPANY shall be free
to market such products in any manner it seems fit, provided an exclusive
Distributorship is not offered to anyone else on comparable terms better
than those offered to BTS.
2.3 Exclusive Appointments. The PRODUCT for the purpose of clause 2.1 includes
any upgrades, updates, documentation, accessories, spare parts and PRODUCT
Software.
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3 Terms of Sale and Payment.
3.1 Price. COMPANY shall supply PRODUCT to BTS at prices which, including
their period of validity, are specified in Exhibit A In the event of
unforeseen circumstances affecting COMPANY or BTS or both and/or in the
event the price/performance ratio of PRODUCT deteriorates as compared to
competitive products, the parties hereto will jointly review the situation
and attempt to find a solution reasonably acceptable to both parties.
3.2 Prices will be reviewed when deemed necessary by any PARTY, but at least
on a quarterly bases. The PARTIES will make best effort to review and
agree any changes in prices, depending on, but not limited to expected
order volume, changes in component prices etc. Price decreases will
become effective immediately upon the written mutual agreement, price
increases will only apply 60 days after the written mutual agreement.
Price increases or decreases will only apply to all orders placed after
such written agreement period.
In case after serious negotiations the parties remain unable to reach
agreement on new prices, taking the parameters of section 3.1 into
account, the following procedure shall apply: The prices will be set by a
committee of three (3) members. COMPANY and BTS each will appoint one
member ('Party-Arbitrator'), a senior manager from the respective
organizations, who jointly will appoint an independent third member
(hereinafter the 'Chairman'). The committee starts working not later than
3 months after the expiration of the quarterly period. The Party-
arbitrators will submit to the Chairman the proposed prices along with
their justifications. The Chairman will inform the parties of the
proposals so submitted, after which the Party-Arbitrators must submit
their final pricing proposal within seven (7) days. The Chairman must then
choose between the two proposals within fourteen (14) days. The prices
announced are binding for both parties. The prices announced will be
effective from the first day of the new month following on the day of the
announcement, even for orders in the pipeline. The prices valid for the
previous period will remain valid during the arbitration period. Costs of
arbitration will be shared by COMPANY and BTS.
3.3 Price increases are not applicable to PRODUCT for which a binding orders
are placed. COMPANY undertakes to grant BTS its best prices and discounts
for PRODUCT. In the event BTS looses exclusivity, as of article 4.1
hereof, COMPANY would not grant one or more of its other customers more
favorable prices, discounts, delivery terms, payment terms and/or
guarantees than those applicable to BTS for PRODUCT.
3.4 Payment conditions are forty-five (45) days after invoice date and receipt
of PRODUCT and invoice. Payment shall be made in U.S. Dollars. All prices
for shipments to BTS shall be FOB Chatsworth, California.
3.5 PRODUCT shall be supplied in suitable packing in a form to be approved by
BTS and as specified in the SPECIFICATION. Changes in approved packing
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may be introduced only on BTS' written request or after BTS' prior written
approval.
Packing and PRODUCT shall be labeled by COMPANY in accordance with BTS'
instructions and as specified in the SPECIFICATION.
3.6 BTS is entitled to have any of the BTS MSS and/or ICC Companies and
Xxxxxx COMPANY, Port Chester, N.Y. execute logistic procedures, such as,
without limitation, placing Purchase Orders, payment of invoices,
transport arrangements, shipping instructions and handling of return
shipments for repair or replacement on behalf of BTS.
3.7 PRODUCT Software. PRODUCT Software is licensed for distribution only and
not sold. Each sale of the PRODUCT to BTS shall be deemed also to include
the granting of an exclusive license to use the PRODUCT Software in the
PRODUCT so purchased and to sublicense the same with the resell of
PRODUCT.
3.8 PRODUCT hardware and software that forms an integrated part of the
PRODUCT, and is originated by BTS, shall be subject to a royalty fee, to
be paid by Micropolis to BTS for PRODUCT, including the version of the
PRODUCT sold to Tyrell Corporation and sold to other 3d parties, as
described in Exhibit B herein.
3.9 Spare Inventory. During the duration of this Agreement and six (6) years
thereafter COMPANY shall supply BTS with such Spare Parts and at prices as
specified in Exhibit A. During the 6th year, BTS will issue to COMPANY a
Spare Part order to meet customer demands for access to spares in excess
of 6 years, and COMPANY will accept such order and delivery same during
the 6th year.
3.10 It is agreed that if during the duration of this Agreement, but not sooner
then 3 years from effective date, COMPANY wishes to stop production of
PRODUCT, COMPANY shall inform BTS thereof no later than 12 month prior to
the date of envisage production stop.
3.11 If a vendor or subcompany stops production of one or more components that
might affect availability of PRODUCT, COMPANY shall immediately inform BTS
thereof in writing. Such information shall preferable be passed to BTS
within six (6) month of any expected availability disruption.
3.12 Pursuant to Article 3,8,3,9 and/or 3.10 hereof, BTS shall have an
opportunity to place a Purchase Order for PRODUCT and/or Spare Parts in
such quantity as BTS may reasonably require and COMPANY shall accept such
Purchase Order at the then prevailing price.
3.13 Prices for Spare Parts shall not be considerably higher than the prices
for the equivalent modules in PRODUCT. In no event may the sum of the
individual
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Spare Parts making one (1) PRODUCT exceed one hundred and ten percent
(110%) of the PRODUCT price for said PRODUCT as charged to BTS.
3.14 Training. COMPANY shall provide appropriate PRODUCT training and service
training courses for up to ten (10) BTS personnel with respect to PRODUCT
purchased by BTS for up to five (5) days, and at locations to be mutually
agreed upon by BTS and COMPANY. BTS shall bear transportation, food and
lodging expenses, if any, of its participants, and/or the companies
participants and COMPANY shall bear all other costs of such training. BTS
may purchase additional training at a rate of $800.00 per day, per
instructor, plus pre-approved expenses.
3.15 Engineering control:
During the term of this Agreement and the continuing Spare Parts supply
period the PRODUCT shall be under COMPANY's engineering control and
COMPANY undertakes to sustain PRODUCT as such, as well as Software parts
thereof.
3.16 Engineering Changes.
COMPANY will inform BTS in writing by means of the Standard Engineering
Change Notice of any and all engineering changes to both hardware,
firmware and software if applicable, that result from its continuing
engineering activities as they occur.
Any changes proposed by COMPANY which affect form, fit, function,
SPECIFICATION and/or use, including interfacing, of PRODUCTs and/or Spare
Parts will be subject to the prior written consent of BTS. BTS will within
thirty (30) days after receipt of notification inform COMPANY by means of
the Standard Form for Decision of Change Request or otherwise of the
proposed change. Failure to react within said 30 days period will
constitute acceptance by BTS and COMPANY will proceed with the change.
3.17 In the event BTS requests an engineering change e.g. in order to meet
SPECIFICATION, in any of the PRODUCT or parts thereof, such as, without
limitation, in the Software, the provision of article 3.15 hereof shall
apply mutatis mutandis.
3.18 In case of changes proposed by BTS and implemented by COMPANY, in the
PRODUCTs and/or the production process which affect the manufacturing
costs of the PRODUCTs and which result in a decrease of said manufacturing
and PRODUCT's costs, COMPANY shall share the profit of said decrease by
offering to BTS a price reduction equal to half the actual cost reduction
the change will make. Similarly, any change proposed by COMPANY and
implemented by BTS which result in a reduction of BTS's manufacturing cost
will render COMPANY a more favorable position in price negotiations.
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4 BTS and COMPANY Obligations
4.1 At the COMPANY's option and subject to the terms hereof, Section 2.1 shall
cease to be of force and effect in the event that BTS fails to purchase an
aggregate dollar amount of PRODUCT as specified in Exhibit C ("Minimum
Orders"), as amended. During the term of the agreement, BTS and
Micropolis shall, during the fourth quarter 1997, in good faith negotiate
minimum purchase requirements for the 12 month period starting 24 months
after the first delivery of PRODUCT, however, such minimum purchase
requirement will not be lower then the amount as specified in Exhibit C.
The loss of BTS' rights under Section 2.1 shall be the sole and exclusive
remedy and result for any failure by BTS to make the minimum dollar amount
negotiated. In the event that BTS is unable to obtain or is delayed in
obtaining export authorizations or licenses to export the PRODUCT, the
parties agree to review in good faith the amount agreed to as specified in
Exhibit C, as amended, to determine what reductions, if any, should be
made in light of such inability or delay in obtaining such authorizations
or licenses.
4.2 Purchase Orders shall be submitted on separate Purchase Order forms and
each Purchase Order shall specify the quantity, items, and agreed upon
delivery dates Purchase Orders may include additional terms relating to
the purchase, shipment and other conditions if previously agreed upon
between BTS and COMPANY.
4.3 As soon as feasible, but no later than delivery of the first PRODUCT, BTS
shall provide COMPANY with twelve (12) months rolling forecast of its
needs for PRODUCT to be renewed every month and issued to COMPANY at the
beginning of each month according to the following schedule:
a) a firm commitment for the first 2 full calendar months;
b) a non-binding orientation for the 3 up to and including the
twelfth calendar month.
4.4 BTS agrees to confirm before the 5th working day of each month the above
mentioned firm commitment by means of a Purchase Order to cover the second
month (e.g. the 5th December ultimately a Purchase Order will be issued
for deliveries equally divided over the month of February). Delivery lead
time is normally sixty (60) calendar days after receipt of order. From
time to time, on BTS request, COMPANY agrees to make every effort to meet
shorter delivery times and to meet BTS request.
Purchase Orders so placed by BTS shall be acknowledged by COMPANY within
one (1) week after receipt by issuing a Purchase Order confirmation and
such Purchase Orders may be canceled by BTS only if COMPANY defaults its
execution.
4.5 If for any reason not attributable to BTS, COMPANY does not deliver the
ordered PRODUCT 10 working days later than confirmed delivery date in
accordance with the agreed upon delivery dates set forth in the applicable
Purchase Order(s), and order confirmation, COMPANY shall reduce it's price
to BTS one percent (1%) of the purchase price of the applicable delayed
PRODUCTs per week of delay or part thereof. BTS has the right to claim
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indemnification of damages only if delivery of PRODUCT is more than 8
weeks delayed from the confirmed delivery thereof.
4.6 BTS may require for additional deliveries outside the tolerance ranges as
specified in Exhibit C and COMPANY shall use its best efforts to supply
such additional quantities.
4.7 In the event of a change in laws or a case of force majeure, BTS is unable
to obtain permission to export or import PRODUCTs into any country of the
world where previously they have been selling such, upon BTS' request the
Purchase Orders then placed with COMPANY shall be reduced proportionally
by the percentage which the expected sales in such countries bear to the
total of such Purchase Orders.
4.8 In the event COMPANY wishes to stop production of the PRODUCT, COMPANY
shall inform BTS thereof as early as possible in writing, but at least
twelve (12) month prior to the date of envisaged Production stop and BTS
shall then have an opportunity to place a Purchase Order for PRODUCTs in
such quantity as BTS may require and COMPANY shall accept such Purchase
Order at the then prevailing price. Notwithstanding the foregoing COMPANY
guarantees to produce and supply to BTS PRODUCTs during a period of at
least three (3) years starting as from the signing date of this Agreement.
4.9 In the event COMPANY is no longer able to or envisages that it shall not
(at short notice) be able to supply PRODUCTs to BTS due to shortage or
lack of components and/or Spare Parts, COMPANY shall immediately inform
BTS thereof and COMPANY shall then be fully responsible for a proper re-
design of the PRODUCT without affecting form, fit or function thereof, all
at COMPANY's costs. The re-designed PRODUCT shall be subject to the
procedure set forth in Article 4 of the Development Agreement and be
subject to the terms and conditions of this Agreement.
4.10 BTS shall endeavor to successfully market and support (including
installation, and other support) PRODUCTs on a continuing basis and to
comply with good business practices and all laws and regulations relevant
to this Agreement or the subject matter hereof. COMPANY shall provide BTS
with the documentation and the necessary technical service.
4.11 BTS will do all field service of PRODUCT. Such service can be defined as
replacement of SPARE PARTS and updating PRODUCT software. BTS will send
said faulty SPARE PARTS to MICROPOLIS for its repair, and MICROPOLIS
shall supply to BTS repaired SPARE PARTS and new released and updated
software.
4.12 All PRODUCTs to be supplied by COMPANY to BTS pursuant to this Agreement
shall be checked and tested by COMPANY in accordance with the
SPECIFICATION and COMPANY shall deliver such written test result with
PRODUCT. COMPANY shall only supply PRODUCTs which comply with the agreed
Specifications and other agreed requirements and which have
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successfully passed the agreed tests. BTS is entitled to have its
representatives present at these tests.
It is explicitly understood by COMPANY that BTS is not obligated to
execute any incoming inspection or other inspection concerning non-
compliance with the Specification of PRODUCTs delivered hereunder by
COMPANY and COMPANY shall be fully responsible for and hold BTS and the
BTS Associated Companies harmless from any claims for whatever damages
resulting from any such non-compliance.
4.13 BTS shall inform the COMPANY as to any material problems encountered by
its customers with PRODUCT and to communicate to COMPANY any and all
material modifications, design changes or improvements of PRODUCT
suggested by any customer. BTS will also promptly notify COMPANY of any
claims of infringement of any trademarks or other proprietary rights
relating to PRODUCT that are brought to the attention to an officer of
BTS.
4.14 BTS shall comply to the extent applicable with all export laws and
restrictions and regulations of the Department of Commerce or other United
States or foreign agency or authority, and agrees not to export, or allow
the export or re-export of any PRODUCT in violation of any such
restrictions, laws or regulations. BTS shall obtain any necessary licenses
and/or exemptions with respect to the export from the U.S. of any PRODUCTs
by BTS and upon request by the COMPANY shall demonstrate to COMPANY
compliance with all applicable laws and regulations. COMPANY shall certify
that no export licenses are required; however, if such export licenses are
required, COMPANY shall assist BTS to acquire such licenses
4.15 As additional consideration for Micropolis' contribution to the joint
development of the PRODUCT, upon certification by the BTS International
Competence Center (ICC) in Salt Lake City, Utah, of Micropolis' disk
drives, BTS intends to utilize Micropolis as its primary COMPANY of disk
drives for the BTS "Media Pool Video Server." This primary COMPANY status
shall only remain in effect as long as Micropolis supplies a PRODUCT equal
in performance and price to units available from other Companies.
A nonbinding forecast for these drives are included as Exhibit D.
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5 Private Label.
5.1 Brand name. BTS shall market the PRODUCT under a BTS brand name ("Brand
Name") selected by BTS. The COMPANY shall label (without additional
charge) all PRODUCT sold to BTS with the BTS name, the Brand Name and/or
any logos specified by BTS. Such labeling shall comply with specifications
provided by BTS in writing and approved by the COMPANY, the approval of
which shall not be unreasonably withheld. The PRODUCT sold to BTS shall
include (without charge to BTS) an electronic version of the Technical
Reference and Maintenance Manual, including but not be limited to
electrical schematics, mechanical drawings and maintenance procedures. BTS
at its cost, with the assistance of the COMPANY, shall develop its own
operator and installation manual and any other marketing and sales
materials. BTS shall own all right, title and interest in the Brand Name
and any tradenames, trademarks or copyrights relating thereto. The COMPANY
shall not use the Brand Name without BTS' consent.
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6 Warranty; Disclaimer; Indemnity.
6.1 Warranty. COMPANY guarantees the good quality and the good performance in
accordance with the SPECIFICATION of each PRODUCT supplied pursuant to
this Agreement during a period of eighteen (18) months from date of
delivery by COMPANY to BTS or twelve (12) months from delivery by BTS or
any of the BTS Associated Companies to its/their ultimate customers,
whichever is sooner. Under this guarantee COMPANY shall provide BTS free
of charge with replacement parts or PRODUCTs, or shall repair PRODUCTs at
COMPANIES option. It is explicitly understood that BTS bear all
transportation and labour costs in connection with returning said parts or
PRODUCTs to COMPANY's site, and that COMPANY bear all transportation and
labour costs in connection with repairing and returning said parts or
PRODUCTs to BTS or to the pertaining BTS Associated Company(ies). The
above warranty does not extend to any PRODUCT that is modified or altered
or operated in a manner other than that specified by COMPANY, has its
serial number removed or altered or is treated with abuse, negligence or
other improper treatment by BTS, any of BTS Associated Companies or
its/their customer.
COMPANY MAKES NO OTHER WARRANTIES WITH RESPECT TO THE PRODUCT OR ANY OTHER
SERVICES AND DISCLAIMS ANY OTHER WARRANTIES, INCLUDING WARRANTIES FOR
FITNESS FOR A PARTICULAR PURPOSE.
6.2 In the event of epidemic faults (faults which appear in more than 10%
out of sequentially delivered PRODUCT during a 12 month period, and which
faults are either the same or similar or have the same or similar cause)
BTS will inform COMPANY as soon as possible about the event. COMPANY and
BTS shall after consultation in order to find the cheapest solution decide
in joint consultation, it being understood that all costs connected with
the transportation of such replacements and the building in thereof and
the building out of the defective part(s) shall be for the account of
COMPANY:
a) which corrections and repairs can be made by BTS against the
reimbursement by COMPANY for labour another expenses incurred by BTS
in correcting and repairing PRODUCTs;
b) which parts and/or PRODUCTs shall be replaced free of charge by
COMPANY and within which period of time such replacement shall be
effected.
The warranty with respect to epidemic faults shall terminate eighteen (18)
months after delivery by COMPANY of the last PRODUCTs delivered to BTS
hereunder.
6.3 Notwithstanding any references in this Agreement to the purchase of
PRODUCTs by BTS hereunder, the parties agree that the Software is not
being sold by COMPANY or purchased by BTS.
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6.4 In the event of any non-compliance with the Specifications of the
Software, notified by BTS to COMPANY in writing, COMPANY shall respond as
follows:
a) In the event of a Major Defect, as defined by BTS, COMPANY
shall within 24 hours acknowledge receipt of such notification from
BTS, and make best effort to provide a permanent solution for such
defect or at least a workaround within 5 days, or, if a permanent
solution or workaround can not be found, in good faith together with
BTS negotiate with the ultimate customer how to solve such defect
COMPANY shall provide BTS and the applicable BTS Associated Companies
with a corrected version of the Software as soon as possible
thereafter, free of charge.
b) In the event of a Minor Defect, a defect that, in the opinion of BTS
is a defect that is not likely to reduce materially the usability of
the applicable PRODUCT for its intended purpose, or is a departure
from established standards having little bearing on the effective use
or operation of the PRODUCT, COMPANY shall correct same and implement
said correction in the following new release of the Software. Said new
releases shall be provided by COMPANY at most twice per calendar year.
However, if required and notwithstanding the foregoing, COMPANY shall
provide BTS and the applicable BTS Associated Companies with a work-
around within ultimately ten (10) days after receipt of notification
of such request.
6.5 Indemnification. COMPANY shall indemnify and hold BTS and its officers,
directors, shareholders, agents and employees harmless from and against
liability resulting from infringement by a PRODUCT of any United States or
other patent, any United States or other copyright or any trademark,
tradename or other intellectual property right provided COMPANY is
promptly notified of any and all threats, claims and proceedings related
thereto and given reasonable assistance and the opportunity to assume
control over the defense and negotiations for a settlement or compromise
(if the COMPANY assumes control, the COMPANY shall however permit BTS to
participate in such defense and negotiations, at BTS' expense if BTS so
requests); COMPANY will not be responsible for any settlement it does not
approve in writing. The foregoing obligation of COMPANY does not apply
with respect to a PRODUCT or portions or components thereof (i) not
supplied by COMPANY, (ii) labeling made in whole or in part in accordance
to specifications provided by BTS, or (iii) which are modified by BTS, any
of BTS Associated Companies or its/their customer after shipment by
COMPANY, if the alleged infringement relates to such modification.
6.6 In case a PRODUCT is held to constitute infringement, as defined in
Article 6.6 hereof, and the use thereof is enjoined, COMPANY shall, at its
option and expense, either procure for BTS, the BTS Associated COMPANY and
its/their customer(s) the right to continue using said PRODUCT, or replace
same, or a part thereof with a non-infringing modification in a manner
such that performance of the PRODUCT is not degraded.
6.7 COMPANY shall be responsible for and it shall defend, indemnify and hold
harmless BTS, all of the BTS Associated Companies and their respective
customers from and against any losses, expenses and liability to third
parties resulting from injuries and/or damages arising out of the use of
PRODUCTs, if such injuries and/or damages are attributable to any part of
the PRODUCT(s), not meeting SPECIFICATION, and being
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delivered by COMPANY. In connection with this obligation, it shall be BTS'
responsibility that COMPANY is promptly notified of any and all claims
made against it, the BTS Associated Companies or any of their customers
for any such personal injuries and/or damages alleged to be the result of
defective parts of PRODUCT manufactured by or for COMPANY hereunder.
7 Limited Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR
OTHERWISE, NEITHER PARTY WILL BE LIABLE WITH RESPECT TO ANY SUBJECT
MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY
OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES, LOST PROFITS OR LOST DATA OR (II) COST OF PROCUREMENT OF
SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES. NEITHER PARTY SHALL BE LIABLE
FOR ANY FAILURE OR DELAY DUE TO MATTERS BEYOND ITS REASONABLE CONTROL.
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8 Proprietary Rights
8.1 Without limiting COMPANY's liability to BTS hereunder in any way
whatsoever, it has been agreed that in case COMPANY:
a) intends to enter or actually enters liquidation procedures (either
voluntarily or forced); or
b) has entered bankruptcy procedures (either voluntarily or forced); or
c) notifies BTS in writing that it desires to stop production of the
PRODUCTs, after the agreed upon period; or
d) within sixty (60) days of notification by BTS has not remedied any
material breach of this Agreement,
e) in the event of a change of control of COMPANY.
BTS itself, any of the BTS Associated Companies or a third party to be
agreed upon between the parties hereto, shall have immediate access to all
manufacturing know-how and documentation related to the PRODUCT and the
Spare Parts and as soon as possible thereafter shall acquire all relating
know-how and inventory of Spare Parts needed for the production of
PRODUCTs, if and to the extent required by BTS, against compensation for
COMPANY's purchase price therefor.
8.2 Know-how according to this Article 8 shall mean all the information
relating to the design, development, production, testing, and servicing of
PRODUCTs as manufactured by or for COMPANY, which is in its possession or
under its control and as will be sufficient to enable BTS, a BTS
Associated COMPANY or said third party to manufacture and service
PRODUCTs. All such know-how shall be in a legible and reproducible form.
8.3 Accordingly, COMPANY hereby grants to BTS the option upon occurrence of
any of the cases referred to under a, b, c, d and/or e of Article 8.1
above to receive against a royalty of 2% of BTS sales price of PRODUCT, a
perpetual worldwide irrevocable license with the right to sublicense under
any and all patent and other proprietary rights relating to the PRODUCTs,
and know-how (as specified above) to make, have made, use, lease, sell or
otherwise dispose of PRODUCTs or other video disk recorders or parts
thereof by making use of COMPANY's proprietary rights and know-how as
specified above.
8.4 In order to secure BTS' rights set forth above the parties agree to the
following: COMPANY undertakes to deposit not later than 4 (four) weeks
from date of signature of this Agreement a copy of all drawings and other
technical information needed for the production and servicing of PRODUCT
with the firm of Xxxxx Dutilh, notary public, Eindhoven, the Netherlands,
("the Escrow Agent") and COMPANY undertakes to, during the term of this
agreement, supply Escrow Agent with quarterly updates of such PRODUCT
information, and that all present and future drawings of PRODUCT and other
information of PRODUCT will remain with the Escrow Agent during the term
of this Agreement and ten (10) years thereafter. COMPANY represents that
it has instructed the Escrow Agent to make available to BTS copies of the
drawings and other technical information without any charges, provided BTS
informs
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the Escrow Agent that COMPANY has entered liquidation procedures (either
voluntary or forced) or, has entered bankruptcy procedures (either
voluntary or forced) or that COMPANY is in breach of a contractual
obligation hereunder towards BTS, or that COMPANY has stopped production
of the PRODUCTs a in case of a change of control of COMPANY.
9 Assignment. This Agreement and the rights hereunder are not transferable
or assignable without the prior written consent of the parties hereto,
except for rights to payment and except to a person or entity who acquires
all or substantially all of the assets or business of a party, whether by
sale, merger or otherwise.
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10 Term and Termination.
10.1 Term. Unless terminated earlier as provided herein, this Agreement shall
have a term of thirty-six (36) months, extending from the date of this
Agreement. The term of this Agreement shall automatically be renewed for
consecutive twelve (12) month periods unless a party gives written notice
of termination to the other not less than 120 days prior to the expiration
of the term of the Agreement. In such case, article 4.8 applies. If the
parties continue to do business with each other after such termination
without full documentation, the relevant terms hereof will continue to
govern the relationship unless otherwise expressly agreed in writing.
10.2 Termination. This Agreement may be terminated by a party for cause
immediately by written notice upon the occurrence of any of the following
events:
a) If the other materially breaches any material provision of this
Agreement and fails to fully cure such breach within 30 days of
written notice describing the breach; or
b) If the other becomes insolvent or enters into bankruptcy
procedures. This Agreement may be terminated at any time with the
mutual consent of the parties hereto.
10.3 Effect of Termination. Each party understands that the rights of
termination hereunder are absolute. Neither party shall incur any
liability whatsoever for any damage (including, but not limited to,
incidental or consequential damage), loss or expenses of any kind suffered
or incurred by the other (or for any compensation to the other) arising
from or incident to any termination of this Agreement by such party which
complies with the terms of the Agreement whether or not such party is
aware of any such damage, loss or expenses. Termination is not the sole
remedy under this Agreement and, whether or not termination is effected,
all other remedies will remain available. The provisions of Sections 6,
7, 8, 10.2 and 10.3 shall survive any termination of this Agreement.
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11 General
11.1 General Conditions
Neither BTS' general conditions of purchase nor COMPANY's general
conditions of sales are applicable to this Agreement or to any Purchase
Orders and Purchase Order confirmations.
11.2 Relationship of Parties. The parties hereto are independent contractors
with respect to each other. Nothing in this Agreement shall be construed
as constituting BTS as a joint venture, partner or agent of the COMPANY
and BTS shall have no authority to bind the COMPANY (except pursuant to
Section 6 relating to the COMPANY's warranties). The COMPANY shall have no
right to exercise any control whatsoever over the activities or operations
of BTS, other then defined in the Memo of Agreement, attached hereto,
including the prices at which BTS may resell PRODUCTs.
11.3 Amendment and Waiver. Except as otherwise expressly provided herein, any
provision of this Agreement may be amended and the observance of any
provision of this Agreement may be waived (either generally or any
particular instance and either retroactively or prospectively) only with
the written consent of the parties. However, it is the intention of the
parties that this Agreement be controlling over additional or different
terms of any order, confirmation, invoice or similar document, even if
accepted in writing by both parties, and that waivers and amendments shall
be effective only if made by non-pre-printed agreements clearly understood
by both parties to be an amendment or waiver.
11.4 Governing Law and Legal Actions. This Agreement shall be governed by and
construed and enforced in accordance with the laws of Germany. All
disputes, controversies or differences which may arise between the Parties
in relation to or in connection with this Agreement may be settled by
amicable negotiation by both Parties if the Parties so agree. If both
Parties are unable to settle such disputes, then such disputes shall be
referred to and finally settled by arbitration under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce in
Paris. The Arbitration shall be conducted in the English Language and take
place in USA if it is initiated by BTS or in Germany if it is initiated by
COMPANY. The award of arbitration shall bind both Parties. No waiver by a
party of a right or remedy under this Agreement shall constitute a waiver
of any other right or remedy under this Agreement. No waiver of a right or
remedy shall be effective unless made in writing.
11.5 Headings. Headings and captions are for convenience only and are not to be
used in the interpretation of this Agreement.
11.6 Notices. Notices under this Agreement shall be sufficient only if
personally delivered, delivered by a major commercial rapid delivery
courier service or mailed by certified or registered mail, return receipt
requested to a party at its addresses set forth below or as amended by
notice pursuant to this
Page 17 of 22
subsection. If not received sooner, notice by mail shall be deemed
received five (5) days after deposit in the U.S. mails.
If to BTS:
Xxxxxxxxxx 0
00000 Xxxxxxxxxxx
Xxxxxxx
Attn.: General Manager
If to COMPANY:
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
XXX
Attn.: VP and General Manager
Systems Business Unit
11.7 Entire Agreement. This Agreement supersedes all proposals, oral or
written, all negotiations, conversations, or discussions between or among
parties relating to the subject matter of this Agreement and all past
dealing or industry custom.
11.8 Confidentiality. Neither party shall disclose the terms of this
Agreement or any attachment to any third party without the prior written
consent of the other party. Article 9 of the Development Agreement
continues to govern any possible exchange of confidential information.
11.9 Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be illegal, invalid or unenforceable, that
provision shall be limited or eliminated to the minimum extent necessary
so that this Agreement shall otherwise remain in full force and effect and
enforceable.
11.10 Force Majeure: Neither MICROPOLIS nor BTS shall be liable for delay or
failure in the performance of the obligations contained in this AGREEMENT
arising solely from any one or more of the following matters:
a) acts of God, or public enemy or war (declared or undeclared);
b) acts of governmental or quasi-governmental authorities or
regulations or restrictions imposed by law or by court action,
except as they may result from the unreasonable failure of
MICROPOLIS or BTS to perform as required hereunder;
c) acts of persons engaged in subversive activities or sabotage;
d) fires, floods, explosions or other catastrophes;
e) epidemics or quarantine restrictions;
f) strikes, lockouts or similar labour disruptions;
g) freight embargoes, or interruption of transportation;
h) unusually severe weather;
i) delays of a supplier of one PARTY due to any of the above causes or
events; or
Page 18 of 22
j) any other extraordinary event beyond the control of the PARTY
concerned; and provided that due diligence is exercised to cure such
cause and resume performance, and the time for performance by such
PARTY shall be extended by a period of any such delay.
11.11 Advertisements: COMPANY shall not without BTS' prior written consent use
BTS' name or trademark as such and/or use same in connection with any
advertisement or sales literature nor advertise that it is a COMPANY of
BTS and/or that this Agreement between COMPANY and BTS has been concluded.
Exhibit. The following Exhibit, as referred to in this Agreement, form an
integral part of the Agreement:
Exhibit A: Prices of PRODUCT/Modules
Exhibit B: BTS software license fee
Exhibit C: Minimum order quantity and order forecast
Exhibit D: Purchasing forcast of Micropolis drives to be used in the
Media Pool Video server.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
Micropolis Corporation
By: /s/ Per Sjofors
Name: Per Sjofors
Title: Director Marketing VSD
BTS BROADCAST TELEVISION SYSTEMS GmbH
By: /s/ X. Xxxx /s/ H.D. Xxxxx
Name: X. XXXX H.D. XXXXX
Title: CFO Gen. Manager
15. Sept. 1995
MEMORANDUM OF AGREEMENT
This memorandum of agreement (MoA) is made between Micropolis Corporation
(Micropolis) of
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
XXX
and BTS Broadcast Television Systems GmbH (BTS) of
Xx Xxxxxxxxxxxxx 0
X-00000 Xxxxxxxxx
Xxxxxxx
Whereby Micropolis and BTS (hereafter the "Parties") agree to collaborate in
accordance with the following terms and conditions.
SCOPE
The Parties shall together define and Micropolis and BTS (Weiderstadt) shall
jointly develop a family of video disk recorders for sale worldwide by BTS.
For purpose of this agreement these products shall be called "Mini-Pools".
The parties agree that they participate in this collaboration on a
non-exclusive basis in accordance with the conditions described below.
PRINCIPLES
The Mini-Pools shall be branded with the BTS logo and product name.
The Mini-Pool family shall consist of a family of products as outlined on the
attached preliminary specifications identified as exhibit "A".
The Parties agree to make a best effort for completion of the Mini-Pools as
follows:
VDR110 Prototypes completed by Dec. 31, 1995
Beta site deliveries to BTS customers by Feb. 1, 1996
Production deliveries to BTS customers starting April 1, 1996
VDRx40 Prototypes completed by March 31, 1996
Beta site deliveries to BTS customers by May 1, 1996
Production deliveries to BTS customers starting July 1, 1996
A development plan called the "Joint Development Agreement" detailing the
tasks and identifying the resources will be developed within 30 days of signing
this MoA.
A business agreement called the "Brand Name Reseller's Agreement" detailing the
pricing and sales volumes will be developed by Oct. 15, 1995.
BTS International Competence Center (Wiederstadt) and Micropolis will jointly
develop the Mini-Pool according to the "Joint Development Agreement".
The Parties agree that the total development cost of Mini-Pool will not exceed
$2M.
BTS agrees to cover a percentage of Micropolis's development cost in cash and
through contribution of engineering resources.
Micropolis shall deliver to BTS various VDR related sub-assemblies for BTS to
configure and make final test.
Payment to Micropolis is of the BTS contribution to development shall be as
follows:
LATEST DATE AMOUNT PURPOSE
AUG 7, 1995 $100,000 This amount is intended to allow development
10 working days to continue while the terms of the "Joint
after execution of Development Agreement" are being completed. If
this MoA. for any reason, the parties are unable to
reach agreement within 30 days of the
execution of the MoA, the parties must
mutually agree to continue negotiations or
they shall cease and Micropolis may keep this
payment.
SEPT 25, 1995 $200,000 This amount is part payment of the total
10 working days payment by BTS to Micropolis, as further
after execution of detailed in the "Brand Name Reseller's
the "Brand Name Agreement". If for any reason, the parties
Reseller's are unable to reach agreement by September 15,
Agreement" 1995, the parties must mutually agree to
continue negotiations and payment is then due
on execution of the "Brand Name Resellers
Agreement".
The schedule of the balance of the BTS contribution to Micropolis of $700,000
cash and engineering resources shall be as defined in the "Joint Development
Agreement".
The Parties shall exchange monthly reports, in a form to be mutually agreed,
detailing the technical progress achieved. Further to this reporting process,
each party shall allow the other party's Project Manager to inspect
development work at intervals longer than 15 days apart.
The Parties shall share the intellectual property acquired in the development
of the "MiniPools", exclusive of property previously developed by either
party, which shall remain the property of the initial developing company. The
"Joint Development Agreement" shall outline the extent of the previously
developed intellectual property of each party.
Subject to the terms and conditions of the Brand Name Reseller's Agreement,
Micropolis shall appoint BTS as the worldwide exclusive reseller of the
"Mini-Pools". Micropolis grants BTS the right to sub-license the Mini-Pool
system software. The only exception to this exclusivity shall be that BTS shall
allow Micropolis to conduct business for the sale of a Micropolis version of the
VDR110 to the following company:
Tyrell Corporation
Although there may be other differentiating features, this version will
utilize analog I/O for video and will incorporate a 'flat' file system. This
version could also be sold by BTS.
It is to be understood that if the version of the VDR110 sold to the above
company incorporates any BTS developed technology, Micropolis agrees to pay BTS
a royalty based upon standard industry practices.
If additional sales opportunities are identified by Micropolis, BTS agrees to
sell the "Mini-Pools" to other companies for their resale, provided they operate
outside the professional television industry or such companies are acceptable
to BTS. In these cases, BTS must make a minimum of 15% gross margin on the
sale.
As additional consideration for Micropolis contribution to the joint
development of the "Mini-Pools", upon certification by the BTS International
Competence Center (ICC) in Salt Lake City of Micropolis disk drives, BTS intend
to utilize Micropolis as their primary supplier of disk drives for the BTS
Media Pool Video Server. This primary supplier status shall only remain in
effect as long as Micropolis supplies a product equal in performance and price
to units available from other suppliers. The reseller's agreement shall include
projected quantities for Micropolis manufacturing forecast purposes and will not
constitute any firm order commitments.
This MoA shall come into force at the date of signatures of both Parties.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
indicated below.
MICROPOLIS CORPORATION BTS BROADCAST TELEVISION SYSTEMS
By: /s/ Xxxxx Xxxxx By: /s/ Ruttger Keienburg
Name: Xxxxx Xxxxx Name: Ruttger Keienburg
Title: President and CEO Title: CEO and President
Date: July 25, 1995 Date: July 31, 1995
Page 20 of 22
Exhibit B: BTS license fee
Hardware and Software that is independently developed by BTS, and where
the development is not paid by Micropolis, and that forms an integral part
of PRODUCT shall, in the event that PRODUCT is sold by Micropolis to other
3d parties, be subject to a license fee.
This license fee shall be subject to good faith negotiations.
In case after serious negotiations the parties remain unable to reach
agreement on the license fee, the following procedure shall apply: The
license fee will be set by a committee of three (3) members. COMPANY and
BTS each will appoint one member ('Party-Arbitrator'), a senior manager
from the respective organizations, who jointly will appoint an independent
third member (hereinafter the 'Chairman'). The committee starts working
not later than 1 month before Micropolis sells PRODUCT to 3d parties. The
Party-arbitrators will submit to the Chairman the proposed license fee
along with their justifications. The Chairman will inform the parties of
the proposals so submitted, after which the Party-Arbitrators must submit
their final license fee proposal within seven (7) days. The Chairman must
then choose between the two proposals within fourteen (14) days. The
license fee announced are binding for both parties. Cost of arbitration
will be shared by MICROPOLIS and BTS.
Page 21 of 22
Exhibit C: Minimum order quantity and order forecast
In order to enjoy it's limited exclusivity, as defined in Article 2.1
herein, BTS agrees to order a minimum volume of PRODUCT from MICROPOLIS.
The order volume is based on the prices as agreed in Exhibit A, as
amended, hereto.
Period, number of month from first Minimum purchase agreement,
production shipment of VDR110 in US dollars
0 - 12 month $4m
12 - 24 month $12m
24 - 36 month $14m
Notes:
1) The above Minimum purchase agreement, in US dollars, is based on the
assumption that the VDR110 product will have an actual performance that is
in excess of the SPECIFICATION in one respect that the minimum compression
ratio is 4:1 rather than the 8:1 as per the SPECIFICATION.
2) The minimum order volume per period and for the duration of the
AGREEMENT is accumulative; if BTS orders in excess of it's minimum order
quantity in any period, the excess amount will be counted into the next
period.
BTS will provide COMPANY with a 12 month rolling forecast. In any given 12
month period the forecast can not be changed more than
Month May Change
1,2 No change as Purchase Orders are issued
3-6 No more than plus or minus 20%
7-12 No more than plus or minus 30%
Page 22 of 22
Exhibit D: Purchasing forecast of Micropolis drives to be used in the
Media Pool Video server.
The purchasing forecast of Micropolis drives to be used in the Media Pool
Video server will be supplied by BTS to MICROPOLIS and attached to this
agreement no later then 30 days after execution.
