Exhibit 10.9
OPERATING AGREEMENT
This Operating Agreement is made effective May 28, 1998 by and among
Xxxxxxx International Systems Corporation, a Florida corporation ("FISC") and
SmartDisk Corporation, a Delaware corporation ("SDC").
R E C I T A L S
A. FISC and SmartDiskette Limited, a private limited company registered
in England ("SDL") entered a Manufacturing License made the 20th day of April
1993 (the "MANUFACTURING LICENSE") whereby SDL licensed to FISC certain
technology (the "TECHNOLOGY").
B. On May 27, 1993 FISC assigned the Manufacturing License to SmartDisk
Security Corporation, a Florida corporation ("SDSC") pursuant to an Assignment
and Assumption Agreement in accordance with Section 4.5 of the Manufacturing
License.
C. SDSC and SDC have used and intend to use the Technology to make,
use, license and sell Crypto SmartDisk, SafeBoot, FlashPath, SmartDisk, and
Smarty ("PRODUCTS").
D. Effective January 1, 1996 FISC agreed to provide operations services
to SDSC to exploit the Technology and to enhance, manufacture and sell Products
pursuant to an Operating Agreement between SDSC and FISC. Such Operating
Agreement terminated effective January 1, 1998.
E. On January 1, 1998 certain of FISC's employees performing services
on behalf of SDSC became employees of SDC and FISC and SDC entered into an
Operating Agreement with SDSC for the provision of certain services by FISC and
SDC for SDSC. Such Operating Agreement terminated May 27, 1998.
F. SDC now wishes also to obtain operations services from FISC
commencing May 28, 1998.
A G R E E M E N T
NOW THEREFORE, in reliance on the foregoing recitals and in
consideration of the mutual covenants contained herein, the parties agree as
follows:
1. OPERATIONS. FISC agrees to provide for SDC all administrative
services necessary to operate
Operating Agreement
Page 2
its business including without limiting the generality of the foregoing:
provision of marketing services, financial and accounting services, shipping and
receiving services (known internally to SDC as "distribution services"), product
documentation services, and all other functions necessary for the administration
and operation of SDC's business of manufacturing, enhancing and selling
Products.
2. REIMBURSEMENT. SDC shall pay to FISC for these services as set forth
on Exhibit "A."
3. TERM. This Agreement shall terminate upon notice from any party.
4. LICENSE. All activities of FISC undertaken in connection with this
Agreement are on behalf of SDC and as agent of SDC, to the extent necessary to
permit performance of such activities, SDC hereby grants to FISC a sub-license
under the Manufacturing License.
5. TITLE. All right, title and interest in all intellectual property
created by FISC, its employees, agents and subcontractors pursuant to this
Agreement shall belong to SDC and FISC agrees to execute and deliver appropriate
assignment documents in form and substance acceptable to SDC upon request and
hereby confirms that all such intellectual property was created as a work for
hire, and whether or not a work for hire, FISC hereby assigns all of its right,
title and interest in all such intellectual property to SDC.
6. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Delaware excluding its conflicts of law provisions.
Operating Agreement
Page 3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective May 28, 1998.
XXXXXXX INTERNATIONAL SYSTEMS
CORPORATION
Dated: MAY 28, 1999 By: /s/ XXXXXXX X. XXXXXXXXX
------------------------
Xxxxxxx X. Xxxxxxxxx
President
SMARTDISK CORPORATION
Dated: MAY 28, 1999 By: /s/ XXXXXXX XXXXXXXXX
---------------------
Xxxxxxx Xxxxxxxxx
Secretary
EXHIBIT A
Distribution Payroll @ 50% of Actual Approximately $3,000.00
Sales Payroll @ 25% of Actual Approximately $20,000.00
Accounting Payroll @ 50% of Actual Approximately $13,000.00
Marketing Payroll @ 35% of Actual Approximately $9,000.00
Documentation Payroll @ 50% of Actual Approximately $9,000.00
International Payroll @ 10% of Actual Approximately $5,000.00
Building Occupancy - Naples Actual $10,050.00
Telephone - Naples Approximately $5,500.00
TOTAL FISC ALLOCATIONS $74,550.00
FIRST AMENDMENT TO
OPERATING AGREEMENT
BETWEEN
XXXXXXX INTERNATIONAL SYSTEMS CORPORATION
AND
SMARTDISK CORPORATION
This First Amendment to Operating Agreement between Xxxxxxx
International Systems Corporation ("FISC") and SmartDisk Corporation ("SDC") is
made effective the 1st day of January, 1999.
RECITALS
1. FISC and SDC executed an Operating Agreement effective May 28, 1998,
attached hereto as Exhibit "A" and incorporated herein by reference.
2. SDC agreed to reimburse FISC for certain administrative services
necessary to operate its business.
2. FISC continues to provide such administrative services to SDC.
3. SDC agrees to reimburse FISC for such administrative services.
AGREEMENT
NOW THEREFORE, in reliance on the foregoing and in consideration of mutual
covenants contained herein, the parties agree as follows:
1. REIMBURSEMENT. SDC shall pay to FISC for these services as set forth on
Exhibit "B", hereto;
2. RATIFICATION. FISC and SDC ratify the original terms and conditions of
the Operating Agreement, except as amended herein.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective
January 1, 1999.
XXXXXXX INTERNATIONAL SYSTEMS CORPORATION
BY: /s/ XXXX X. XXXXXXX
-------------------
Xxxx X. Xxxxxxx
Corporate Secretary
SMARTDISK CORPORATION
BY: /s/ XXXXXXX X. XXXXXXXXX
------------------------
Xxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
EXHIBIT B
Distribution Payroll @ 50% of Actual Approximately $ 4,000.00 per month
Documentation Payroll @ 50% of Actual Approximately $ 8,300.00 per month
Accounting Payroll Allocated Fee $ 3,000.00 per month
Administration Payroll Allocated Fee $ 2,100.00 per month
Information Services Allocated Fee $ 3,000.00 per month
Corporate Services Allocated Fee $ 2,000.00 per month
Telephone - Naples Allocated Fee $ 6,500.00 per month
Total FISC Allocations Approximately $28,900.00 per month