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EXHIBIT 10.11
*CONFIDENTIAL PORTION HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
MSU (UK) LTD DEVELOPMENT AND LICENSING AGREEMENT.
THIS AGREEMENT IS MADE ON THE 22ND DAY OF JULY 1994
BETWEEN:
1) MSU (UK) LIMITED, a United Kingdom registered company whose registered
office is situated at 000, Xxxxx 0xx Xxxxxx, Xxxxx Xxxx Xxxx, Xxxxxxx Xxxxxx
Xxxxxx, XX0 0XX, Xxxxxx Xxxxxxx ("MSU") : AND
2) TXC CORPORATION. 0X, Xx.00, XXX.0 Xxxxx Xxxx X Xxxx, Xxxxxx, Xxxxxx, Xxxxxx
R.O.C. (THE "CLIENT")
WHEREAS:
A) MSU is inter alia a computer and ASIC design and development company and
Client are manufacturers and distributors of computer based products.
B) MSU is the beneficial owner of the intellectual property rights in the
Chipset design and has agreed to grant to Client a license of that technology.
C) MSU has agreed to develop for Client a Video CD Player as defined and to
supply on an on going basis the Chipset as defined.
D) MSU has agreed to develop an Upgrade as defined in the form of a Module that
can be connected to the Video CD Player.
OPERATIVE PROVISIONS.
1) DEFINITIONS.
*CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
1.1.1: "BANK" shall mean MSU bankers, *
1.1.2: "CHIPSET" shall mean MSU's Trademark Chipset known as
Wynpeg, full particulars of which are set ut for
identification purposes only in the First Schedule
attached hereto entitled "Wynpeg Chipset."
1.1.3: "VCD COMPLETION DATE" shall mean the earlier of the
delivery and acceptance of the production ready Video
Cd Player of the 1994.
1.1.4: "UPGRADE COMPLETION DATE" shall mean the earlier of
the delivery and acceptance of the production ready
Upgrade Module unit or the 1994.
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(2)
*CONFIDENTIAL PORTION HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
1.1.5: "FINAL PAYMENT" shall mean the sum of pounds
sterling due to MSU on the Upgrade Completion Date.
1.1.6: "FIXED ORDER SCHEDULE" shall mean the 3 month Fixed
Order Schedule of the 6 month rolling forecast to be
provided by Client to MSU.
1.1.7: "VIDEO CD PLAYER" shall mean a multi functional CD
based machine full details of which are set out in
Schedule 2 hereto entitled "Description of the
Generic Compact Disc System.
1.1.8: "UPGRADE" shall mean an Upgrade Module to the Video
CD Player full details of which are set out in
Schedule 3 hereto entitled "Generic CD Multimedia &
games Upgrade Cartridge."
1.1.9: "NET SELLING PRICE" shall mean US $ * for
orders of 1,000 units or greater of the Chipset.
*CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.
1.1.10: "PRICE" shall be the price per unit of the Chipset
calculated as to the Net Selling Price plus the
Royalty.
1.1.11: "PRODUCT" shall mean the product developed and built
to the Specification.
1.1.12: "TRADEMARK" shall mean the Trademark "Wynpeg" of which
MSU is the beneficial owner.
*CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.
1.1.13: "ROYALTY" shall mean the royalty of US$ * per unit
of the Chipset.
1.1.14: "SPECIFICATION" shall mean the Specification of the
Product to be developed by MSU as detailed in
Schedule 2 hereto attached.
1.1.15: "SPECIFICATION CHANGES" shall mean any changes to the
Specification requested by clienT.
1.2: Any reference in this agreement includes telex, cable, facsimile
transmission or any comparable means.
1.3: The headings in this agreement are for convenience only and shall not
affect its interpretation.
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(3)
*CONFIDENTIAL PORTION HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
PART 1
PRODUCT DEVELOPMENT
2. DEVELOPMENT CHARGES
In consideration of MSU designing, developing and delivering to Client
a production ready unit of the Video CD Player by the VCD Completion
Date, Client will pay to MSU the sum of * pounds sterling
upon the following dates:
*CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
2.1: Upon execution of this agreement the sum of *
pounds sterling.
2.2: Upon the VCD Completion Date the sum of *
pounds sterling.
In consideration of MSU designing, developing and delivering to Client
a production ready unit of the Upgrade Module by the Upgrade
Completion Date, Client will pay to MSU the sum of *
pounds sterling upon the following dates:
*CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
2.3: Upon commencement of the Upgrade Module Development
the sum of * pounds sterling.
2.4: Upon the Upgrade Completion date the sum of *
pounds sterling.
The development will be carried out according to the Milestones in
Schedule 5 attached.
*CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
3) THE FINAL PAYMENT of * pounds sterling referred to in
clause 2.4 shall be paid to MSU by the Client upon the Upgrade Completion Date.
In the event of any Specification Changes being requested by the Client prior
to the Completion Date, the parties shall agree what further period and costs
may reasonably be required for the development and implementation of any such
changes. If such an agreement cannot be achieved, MSU shall have no
obligations beyond those provided for by this agreement.
4) DESIGN QUALITY STANDARDS.
The developed unit will comply in all respects with the Specification, shall be
of a standard of quality and reliability for mass production, and capable of
obtaining FCC/EMI and UL approval.
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5) TECHNICAL SUPPORT.
MSU will provide a telephone support line for hardware related technical
problems for a period of 6 months following Completion Date. MSU will supply
the services of suitably qualified personnel to visit the Client for technical
support purposes at Client's cost and expense.
6) PRODUCTION SUPPORT.
MSU will supply free of charge to the Client functional test software for
production purposes.
PART 2
7) CHIPSET TERMS.
7.1: MSU agrees to sell and the Client agrees to buy the Chipset
on the terms set out in this agreement. The Video CD Player
shall incorporate the Chipset which is proprietary to MSU and
protected inter alia by the Trademark.
7.2: The Price shall include the Royalty for each Chipset supplied
for use in the Video CD Player over and above the Net Selling
Price.
7.3: In the event of any increase in Chipset manufacturing costs to
MSU, the Net Selling Price shall increase by a like amount.
8) CHIPSET LICENCE.
8.1: TXC will be and hereby are licensed to sell the Chipset for
incorporation in the Video CD Player, subject to all chip
supplies for use by TXC and its sub-licencees being made via
MSU or its authorised chip fabrication plants.
8.2: In the event that TXC is able to obtain an upfront licence
fee from any of its sub-licencees for the Video CD Player
incorporating the Chipset, such upfront licence fees shall be
shared equally between TXC and MSU after deduction of
relevant TXC expenses.
8.3: Where a TXC sub-licencee of the Video CD Player requires any
further development to the base products or Chipset, such
development work will be carried out by MSU. TXC may choose
to add a margin to any agreed development fee quoted by MSU
for the work.
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8.4: For the purposes of clarification, TXC is granted a
non-exclusive licence to sell the Chipset only to
sub-licencees for use in a Video CD Player based product. TXC
shall provide MSU with the names of all sub-licencees to whom
the Chipset is supplied to enable MSU to comply with its own
licencing restrictions.
9) CHIPSET USE.
The Client will not, without the prior written consent of MSU, by itself, its
servants, or agents or licencees or otherwise, incorporate the Chipset into any
Product or range of products other than the Video CD Player.
10) GUARANTEE.
MSU guarantee that all Chipsets supplied to the client will be defect free and
100% functional in the Video CD Player. MSU agrees to accept return of the
defective Chipsets from the Client for replacement, provided that these
Chipsets have been tested and identified as failed prior to board insertion.
11) IMPROVEMENTS.
11.1: If MSU shall at any time after the date of this agreement
make any material improvement to the Chipset, it will
forthwith notify the Client of the nature of such improvement.
11.2: If the improvement can be incorporated without any increase
in manufacturing base cost to MSU, the Client shall be
granted a licence to those improvements which shall be
incorporated into the Chipset.
11.3: If such improvement can only be incorporated by an increase
in manufacturing base cost to MSU, the Client shall be given
the option to negotiate and agree a revised Net Selling Price
in relation to the improved Chipset.
12) PAYMENT TERMS AND INVOICING.
Payment by the Client of development fees pursuant to clause 2 of this
agreement shall be made by telegraphic transfer on the due date to the
Bank. Payment for the supply of the Chipset shall be by irrevocable
transferable documentary credit opened against the Fixed Order
Schedule payable on sight and drawn up in terms acceptable to MSU.
13) ORDERS AND DELIVERY.
13.1: The Client will supply MSU, on a monthly basis, with a rolling
6 month forecast of Client's requirements of the Chipset.
During the first 3 months of such forecast, the
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(6)
*CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
Fixed Order Schedule shall be firm as to volume. In the
event of the Client from time to time requiring an accelerated
lead time and/or Chipsets in excess of the Fixed Order
Schedule, MSU shall provide such services upon mutually agreed
terms and conditions.
13.2: The Client may order Chipsets in quantities of 1,000 units per
single order at a Net Selling Price of US$ * . The Client
estimates annual volumes of units.
*CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
13.3: Delivery dates or periods specified in orders accepted by MSU
shall be firm, provided that MSU is in possession of all
information and documentation necessary to fulfill such orders
in a timely manner and without interruption.
13.4: MSU anticipates a delivery lead time of 16 weeks from Fixed
Order Schedule, however exact delivery times may vary.
13.5: Delivery of the Chipset shall be ex-works. Title and risk in
the Chipset shall pass to the Client on delivery.
13.6: MSU will make every effort to source the Intel 870376PX Chip
and include this in the Chipsets to be supplied to the Client
at a price to be agreed.
14) INTEREST.
In the event that either party fails to make any payment to the other
on the due date, then, without prejudice to any other claims that the
parties may have against each other, the sum due shall bear interest
from the due date until payment is made in full at 2% per annum above
the London base rate of Barclays Bank Plc.
15) FORCE MAJEURE.
15.1: If either party wishes to claim force majeure, it shall
promptly notify the other party in writing of its nature.
15.2: Notwithstanding any other provision of this agreement, neither
party shall be deemed to be in breach of this agreement or
otherwise be liable to the other for delay in performance or
the non-performance of any of its obligations to the extent
that the delay or non-performance is due to any circumstance
beyond its reasonable control, including, but not limited to,
acts of God, war, riots, embargo, failure of suppliers, labour
stoppages, act of civil and military authority, fire, floods,
earthquakes and accidents.
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*CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
16) PROPRIETARY INFORMATION.
All proprietary information and any copies thereof are and will remain
the property of the disclosing party.
17) LIMITATION OF LIABILITY.
17.1: The following provisions set out MSU's entire liability
(including any liability for the acts and omissions of its
employees) to the Client in respect of:
17.1.1: any breach of its contractual obligations relating to
the performance of this agreement.
00.0.0.: any representation, statement of tortious act or
omission, including negligence arising under or in
connection with the performance of this agreement.
17.2: Any act or omission on the part of MSU falling within clause
16.1 above shall for the purpose of this clause be known as an
"Event of Default".
17.3 MSU's liability to the Client for death or injury resulting
from its own or that of its employees' negligence shall *
.
*CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
17.4: Subject to the limit set out in clause 17.5 below, MSU shall
accept liability to the Client in respect of damage to the
tangible property of the Client resulting from the negligence
of MSU or its employees.
17.5: Subject to the provisions of clause 17.3, MSU's entire
liability in respect of any Event of Default shall be limited
to damages of an amount equal to:
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SEPARATELY WITH THE COMMISSION
17.5.1: US$ * in the case of an Event of Default
falling within clause 17.4 and;
71.5.2: US$ * in the case of any other Event of
Default.
17.6 Subject to clause 16.3 above, MSU shall not be liable to the
Client in respect of any Event of Default of loss of profits,
goodwill or any type of special indirect or consequential loss
(including loss or damage suffered by the Client as a result of
an action brought by a third party) even if such loss was
reasonably foreseeable or MSU has been advised of the Client
incurring the same.
17.7: If a number of Events of Default give rise substantially to the
same loss, then they shall be regarded as giving rise to only
one claim under this agreement.
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17.8: Nothing in his clause 16 shall confer any right or remedy upon
the Client to which it would not otherwise be legally
entitled.
18) TERM.
18.1: This agreement shall come into force on the date of the
signature and subject to the following provisions of this
clause, shall continue in force for a period of 2 years certain
and thereafter until terminated on not less than 3 months prior
written notice by either party to the other taking effect not
earlier than the end of the said term certain.
18.2: Either party shall be entitled forthwith to terminate this
agreement by written notice to the other if:
18.2.1: that other commits any continuing or material breach
of any of the provision of this agreement and in the
case of such a breach which is capable of remedy,
fails to remedy the same within 28 days after receipt
of written notice from the other party giving full
particulars of the breach and requiring it to be
remedied or;
18.2.2: anyone takes legal possession or a receiver is
appointed over any of the property or assets of that
other or;
18.2.3: that the other makes any voluntary arrangement with
its creditors or becomes subject to an Administration
Order or;
18.2.4: that any party goes into liquidation (other than a
voluntary liquidation) for the purpose of an
amalgamation, re construction or other reorganisation
and in such a manner that the company resulting from
the reorganisation effectively agrees to be bound by
or to assume the obligations imposed on that other
under this agreement or;
18.2.5: that the other ceases or threatens to cease to carry
on business;
18.2.6: the party wishing to rely on any of the above events
reasonably apprehends that any of the above events is
about to occur in relation to the other and notifies
the other accordingly.
18.3: Any waiver by either party of a breach of any provision of this
agreement shall not be considered a waiver of any subsequent
breach of the same or any other provision.
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18.4: The right to terminate this agreement given by this clause
shall not prejudice any other right or remedy of either party
in respect of the breach concerned (if any) or any other
breach.
18.5: Upon termination of this agreement for any reason, subject as
otherwise provided in this agreement, and to any rights or
obligations which have accrued prior to termination, neither
party shall have any further obligation to the other under this
agreement.
18.6: In the event of termination or expiration of this agreement,
the provisions of sections 9, 17 and 20 shall survive and
continue in full force and effect.
19) NATURE OF THE AGREEMENT.
19.1: This agreement is personal to the parties and neither of them
may without the written consent of the other, assign, mortgage,
charge (other than by floating charge), or dispose of any of
its rights or obligations under this agreement.
19.2: Nothing in this agreement shall create or be deemed to create a
partnership between the parties.
19.3: This agreement contains the entire agreement between the
parties with respect to its subject matter and may not be
modified, except by an instrument in writing signed by the
parties or their duly authorised representatives.
19.4: This agreement shall be governed by and construed in all
respects in accordance with the laws of England and Wales and
the parties submit to the exclusive jurisdiction of the English
courts.
20) NOTICE AND SERVICE.
20.1: Any notice required to be given by any of the parties under
this agreement may be left at or sent by prepaid first class
post to the registered office from time to time of the
addressee or the address of the addressee as set out in this
agreement or such other address as the addressee may from time
to time have notified in writing for the purpose of this clause
and each of the parties shall within 7 days of any change of
address notify the other thereof in writing.
20.2: Any notice shall have been deemed to have been received at the
time that it was so left.
20.3: Any notice sent by post shall be deemed to have been received
10 days after the date upon the registration receipt provided
by the relevant postal authority.
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20.4: Any notice may also be sent by telex or facsimile transmission
and any such transmission shall be deemed to have been received
1 hour after the time of transmission if transmitted before 4pm
on a working day, but otherwise at 9am on the next working day.
20.5: For the purpose of this clause, working day means any other day
other than a Saturday, Sunday or public holiday.
21) AUTHORITY TO EXECUTE.
Each individual executing this agreement on behalf of either party
hereby represents and warrants that he has been fully empowered to
execute this agreement and that all necessary action to authorise the
execution of this agreement has taken place.
SIGNED ON THE 22ND DAY OF JULY 1994 BY THE DULY AUTHORISED SIGNATORIES OF BOTH
PARTIES HERETO:
/S/
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FOR AND ON BEHALF OF MSU (UK) LTD.
/S/
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FOR AND ON BEHALF OF TXC CORPORATION.
