Exhibit 10.31
Partnering Agreement
concluded by and between
Xxxxxxxx & Devrient GmbH
Xxxxxxxxxxxxxxxxxxxx 000, 00000 Xxxxxx, Xxxxxxx
- hereinafter referred to as "G&D" -
of the one part,
and
Smart Chip Technologies, LLC
00000 Xxxxx Xxxxx, XX, XXX
- hereinafter referred to as "SCTN" -
of the other part.
Partnering Agreement
1. Recitals
G&D is active in all card application areas, and supplies a wide range
of complete system solutions for international payment transactions.
The wide spectrum of multifunctional G&D card solutions ranges from
counterfeit-proof identity cards through contactless smart cards for
transportation applications and data-secure health cards to loyalty
cards. In addition, G&D is a solutions specialist in the field of
information and network security. Represented on all continents, G&D is
certified by the leading card organizations and a member of
internationally relevant technical committees. SCTN is a Software
Technology Company with a patent protected loyalty application for use
in the smart card and wireless environment. The software is designed to
operate on smart cards, point-of-sale terminals, and smart devices such
as personal digital assistants. SCTN also provides complete loyalty
program management, transaction processing, and accounting services
through its LoyaltyCentral(tm) software and back office operation.
2. Functional Scope of the Agreement
G&D and SCTN agree to cooperate on the marketing and sale of joint
solutions based on G&D's Chip Cards and Chip Card Operating Systems and
SCTN's Loyalty Application as set out in detail in this Agreement.
3. Subject of the Agreement
The cooperation between G&D and SCTN encompasses the aspects described
below:
3.1 Leads
If a third party desires to establish contact with one of the partners
("Lead"), the parties hereto agree to proceed as follows:
a) In cases where one of the partners is directly mentioned by
name, the other partner refers the Lead immediately to the
partner concerned, if possible accompanied by the following
information: see Annex 1, Lead Details (schedule of minimum
information on Leads).
b) Indirect Leads, i.e. cases where neither of the partners is
referred to directly by name, but it can be deduced which
partner is intended, are referred by each partner to the
partner concerned in the same way as described in a) above.
c) Unspecific or general Leads need not be referred to the
respective other partner.
d) The same applies to Leads relating to associations, government
agencies or suppliers.
e) Press Leads are followed up by the partner receiving them.
However, the other partner must be informed immediately. The
procedure is in accordance with 3.10 below.
f) Beyond the referral of Leads as provided here, no customer
information is exchanged, in particular no lists of customers.
It is further agreed that no information on suppliers is to be
exchanged.
3.2 Promotional material
The exchange of promotional material, the adoption of promotional
material supplied by the other partner and the joint development of
promotional material must be agreed in writing on a case by case basis
as supplement to this Agreement. The written agreement must include in
particular a provision on the allocation of the costs incurred.
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3.3 Customer acquisition planning
G&D and SCTN intend to jointly develop a plan for the acquisition of
customers in the Loyalty application for both payment and non-payment
market segment. The customer acquisition planning shall be in place 90
days after the execution of the contract. Each partner acquires a
global, non-transferable, non-exclusive right to use the finished plan
or preliminary stages thereof. However, neither partner may pass the
plan or its preliminary stages to a competitor of the other partner, or
use it in any way in connection with such a competitor. If the agreed
resources are not sufficient for completion of the plan, the partners
may agree in writing to make further resources available. If such an
agreement is not reached, the work on the customer acquisition plan
will be discontinued.
3.4 Sales calls
Joint calls on customers are jointly prepared and the details agreed
between the partners adequately in advance of the call. Unless
explicitly otherwise agreed in writing, each partner itself bears the
costs that it originates.
3.5 Joint promotional activities
It is understood by the parties that a mutually agreed to press release
describing the intent of the parties as laid out in the agreement will
be released within 5 business days after the execution of the
agreement.
3.6 Joint business plan
G&D and SCTN intend to jointly develop a business plan for the above
mentioned market segment. Above mentioned business plan shall be in
place 60 days after the execution of the agreement. Each partner
acquires a global, non-transferable, non-exclusive right to use the
finished plan or preliminary stages thereof. However, neither partner
may pass the plan or its preliminary stages to a competitor of the
other partner, or use it in any way in connection with such a
competitor. If the agreed resources are not sufficient for completion
of the business plan, the partners may agree in writing to make further
resources available. If such an agreement is not reached, the work on
the business plan will be discontinued.
3.7 Development activities
Joint development activities are agreed in writing by means of a
separate development agreement on a case by case basis. Before the
execution of this development agreement there is no obligation to
undertake development activities and no entitlement to remuneration or
payment of expenses. Without legal obligation at present, the partners
intend to examine the possibilities of undertaking the following joint
development work:
Integration of SCTN's Loyalty Application with G&D's Smart Card
Operating System as well as an integration at an application level.
3.8 Training, skills development
Concrete agreements on training and skills development measures must be
concluded on a case by case basis but it is intended to provide each
other's sales forces at minimum with each party's product
documentation.
3.9 Mutual support
Both parties undertake to use their best efforts to support each other
within the limits of their commercial and operational capabilities,
except where otherwise provided under this Agreement. Such support
shall not include the disclosure of know-how or the performance of any
services for the respective other party that exceed those specifically
provided under this Agreement. Each party undertakes to behave fairly
and cooperatively towards the other party at all times and to take fair
and reasonable account of the other party's interests.
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3.10 External communications
The parties agree to consult on any report or information on their
cooperative activities before its publication. An exception to this
rule is only admissible if, in the case of public relations contacts
that occur orally, e.g. interviews with the press, prior consultation
is not possible. In such a case, the party concerned may repeat
information on the cooperation that is already in the public domain.
Information that has not yet been published may not be disclosed.
3.11 Use of company name and logo
G&D consents to SCTN using the company name Xxxxxxxx & Devrient GmbH
and the company logo in the form made available to it in Annex 2 for
the term of the Agreement as follows:
- the cooperation with G&D may be indicated on all promotional
materials, using the form of expression as stated in Annex 2
- G&D's company name and logo may be used on SCTN's Internet site in
the format shown in Annex 2
- Web site links
SCTN consents to G&D using SCTN's company name and logo as follows:
- Web site links
- SCTN's company name and logo may be used on G&D's Internet site in
the format shown in Annex 2
- the cooperation with SCTN may be indicated on all promotional
materials, using the form of expression as stated in Annex 2
3.12 Alterations and additions
The parties are aware that in the course of their cooperation
alterations and additions to the subject of the Agreement will be
necessary in order to sustain the effectiveness and focus of the
cooperative activities. They are therefore fundamentally prepared to
discuss initiatives for alterations and additions at any time with the
other party. However, the parties are aware that the exercise of a
certain discipline in documenting the subject of the Agreement, among
other aspects, is necessary to ensure the long-term success of the
cooperation. They therefore explicitly agree that alterations and
additions to the subject of this Agreement shall not be legally binding
unless and until they have been confirmed in writing by both parties on
the same document. The text of such document shall refer to this
Partnering Agreement.
4. Non-disclosure
4.1 The parties hereto agree to treat all information in connection with
this Agreement and all other confidential information belonging to the
parties and/or affiliated organizations as confidential.
4.2 Unless explicitly otherwise agreed by the parties, "confidential
information" shall be taken to mean:
a) All and any information that one of the parties to this
Agreement has designated as confidential.
b) Lists of customers, lists of suppliers, detailed information
on customers, accounting data and information on business
plans and business activities in the fields of administration,
finance or marketing.
c) Technical specifications, drawings, descriptions, blueprints,
documents, tapes, samples etc.
4.3 The parties agree to treat such confidential information as secret and
not to use it, in whole or in part, for any purposes other than for the
fulfillment of this Agreement. The parties hereto agree not to disclose
confidential information to third parties, either by publication or in
any other form, unless both parties agree to such disclosure. Either
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party may disclose confidential information of the other party or of
the customer to its employees or affiliated companies if this is
necessary for fulfillment of this Agreement. However, this presupposes
that the employees or affiliated companies concerned have entered into
an obligation to maintain confidentiality in such a way as if they were
themselves parties to this Agreement.
4.4 The provisions of this Agreement and the resulting circumstances shall
also be treated as confidential.
4.5 This clause does not protect confidential information that
a) is or becomes publicly accessible without breach of this
Agreement,
b) one of the parties has received from third parties in a
legally permissible way without being bound by an obligation
to preserve confidentiality,
c) must be published, according to statutory or common law,
d) one of the parties can prove by means of written records that
it has developed independently,
e) has been released in writing for publication by the party to
which it belongs.
4.6 On demand, or on expiry or termination of this Agreement, each party
shall return to the other party all written documents or descriptive
materials, including drawings, blueprints, descriptions or other
papers, documents, tapes or any other medium that contains confidential
information belonging to the other party. Both parties undertake to
conclude agreements with those of their employees or other persons who
have access to confidential information belonging to the parties in
such a way that fulfillment of the provisions of this Agreement can be
ensured.
4.7 All and any original materials or documents that have been drawn up,
produced or prepared by either party as a consequence of this Agreement
are property of the party that has produced these materials or
documents. Neither party will copy, in whole or in part, any original
materials that have been developed under this Agreement by the other
party, unless this serves the purposes of this Agreement.
5. Exclusivity
As soon as the partners have begun to work jointly on a proposal for a
specific customer, that has been generated through the customer
acquisition plan, stated in 3.3, or have called on a customer together,
they will not cooperate in the same matter with a competitor of the
respective other partner or pursue the matter alone without the other
partner. This shall only not apply in the event that cooperation with a
specific competitor and/or a certain structure for fulfillment of the
contract is explicitly requested by the customer in writing. However,
here too the parties undertake to use their best efforts to enable the
other party to maintain its interests.
Beyond this, the parties will cooperate exclusively with each other
only if this is explicitly stated in a separate written agreement
relating to the handling of a concrete proposal.
6. Proposals; Agreements with Third Parties
This Partnering Agreement does not constitute an adequate basis for
submitting joint or coordinated proposals or concluding joint or
coordinated agreements with customers, suppliers or other third
parties. In these cases the cooperative activity takes place solely on
the basis of separate, written agreements that must be concluded
adequately in advance of such activity.
7. Liability
7.1 Neither of the parties hereto shall be liable to the other for any
breach of obligations under this Agreement if such breach is due to
circumstances beyond its control, in particular to cases of force
majeure.
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7.2 Irrespective of the nature of the claim, each party shall only be
liable to the other for actual, provable damage or loss caused by this
party with harmful intent or by negligence. Each party's liability
towards the other party under this Agreement shall be limited to the
sum of USD 25,000 . Neither party shall be liable to the other under
any circumstances for indirect or consequential damage or losses,
including loss of profit.
7.3 The above provisions comprehensively govern all legal consequences and
the entire liability of each party in connection with matters under
this Agreement, with the exception of claims based on mandatory law.
8. Termination
8.1 Either party may terminate this Agreement effective at the end of a
calendar year by giving the other party three months' prior written
notice.
8.2 The right of either party to terminate for cause remains intact. Cause
for termination may be given in the following instances:
o if one of the parties hereto has persistently failed to comply
with material obligations under this Agreement,
o if insolvency proceedings have been instituted against one of
the parties,
o if there is a material change in the ownership or management
structure of SCTN that results in a situation where SCTN is
owned or controlled by a competitor of G&D.
8.3 The provision in 4. above concerning non-disclosure shall survive
termination of this Agreement.
9. Other provisions
9.1 Unless otherwise explicitly provided in this Agreement or elsewhere,
each party itself bears the expenses that it incurs as a result of this
Partnering Agreement, e.g. costs of travel, working time, materials.
9.2 Each party acts as an independent organization and no agency,
partnership, joint venture or other joint marketing relationship is
established by this Agreement or its implementation. In particular no
joint property or joint assets and liabilities are created thereby.
9.3 If any term or provision of this Agreement is invalid, legally
ineffective or unenforceable, the validity, legal effectiveness and
enforceability of the remaining provisions shall not be affected
thereby. In such a case, the parties shall agree on a legally effective
provision that comes as close as possible to their original intentions.
The same applies analogously to any omission from the contractual
provisions.
9.4 This Agreement shall be construed in accordance with and governed by
German substantive law. Place of jurisdiction is Munich.
9.5 Amendments to this Agreement shall not be effective unless agreed
explicitly in writing.
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10. Annexes
Annex 1: Lead Details
Annex 2: Company Name and Logo
Signed in Munich on Oct. 23rd, 2001 Signed in Munich on Oct. 23rd, 2001
/s/ X. Xxxxx /s/ C. Hirschvogel
----------------------------- ------------------------------
ppa Xxxxxx Xxxxx i.A. Xxxxxxxxx Xxxxxxxxxxx
Xxxxxxxx & Devrient GmbH Xxxxxxxx & Devrient GmbH
Executive Vice President Product Marketing Manager
Signed in Aliso Viejo on Sept. 24th, 2001
/s/ Xxx Xxxxxxxx
--------------------
Xxx Xxxxxxxx
SCTN LLC
CEO and President
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Annex 1, Lead Details
Annex 2 , Company Name and Logo
[Company Logo] Xxxxxxxx & Devrient
