Exhibit 10.15
COOPERATIVE DEVELOPMENT AGREEMENT
This Cooperative Development Agreement (this "AGREEMENT") is entered
into as of June 30, 1999 (the "EFFECTIVE DATE") by and between SMARTDISK
CORPORATION, a Delaware corporation, with its principal offices at 0000
Xxxxxxxxxx Xxxxxx, Xxxxxx, XX 00000 ("SMARTDISK") and SANDISK CORPORATION, a
Delaware corporation, with its principal offices at 000 Xxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxx, 00000 ("SANDISK").
R E C I T A L S
A. SmartDisk designs, develops and manufactures, among other products,
adapters that allow standard PC floppy disk drives to read and write data to and
from flash memory storage products and other devices.
B. SanDisk designs, develops and manufactures flash memory storage
products in the form of MultiMediaCards and CompactFlash Cards, among other
things.
C. SanDisk desires to have SmartDisk design, manufacture and own,
subject to SanDisk's proprietary rights, a floppy disk adapter for use with
SanDisk's MultiMediaCard partially using SanDisk's proprietary technology and
engineering assistance.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. DEFINITIONS
1.1 "MULTIMEDIACARD ADAPTER DESCRIPTION" means the written
detailed description of the MultiMediaCard Adapter to be developed by SmartDisk
as set forth in Section 2.1 below.
1.2 "ADDITIONAL PRODUCTS" means any Card Adapter that reads to
(i) a SanDisk product, (ii) a MultiMediaCard or CompactFlash Card manufactured
by an authorized SanDisk licensee, (iii) a MultiMediaCard or CompactFlash Card
that is external to the Card Adapter and which is sold separately from the Card
Adapter by a third party and (iv) a product developed by SanDisk with one or
more third parties.
1.3 "AFFILIATE" means any wholly owned subsidiary of SmartDisk
identified in EXHIBIT 1.3 that has agreed in writing to be bound by the terms of
this Agreement as such terms apply to SmartDisk.
1.4 "CARD ADAPTER" means a device designed by SmartDisk based
on SmartDisk's FlashPath product, and which is a device that can transmit data
stored on flash memory to a magnetic head media simulating the movement of a
cassette tape or the spinning of a disk or zip drive.
1.5 "COMPACTFLASH" means flash memory cards that conform to
the description published by the Compact Flash Association as set forth in
Exhibit 1.5 hereto.
1.6 "CONFIDENTIAL INFORMATION" means all information disclosed
by either party to the other during the term of this Agreement relating to
either party's financial or business plans and affairs, financial statements,
internal management tools and systems, marketing plans, clients, contracts,
products and programs, product and program development plans, hardware,
firmware, software programs, Intellectual Property Rights (as defined below),
trademarks, tradenames, logos, rights in tradedress, maskwork rights, know how,
trade secrets and other technology which information is deemed by the disclosing
party as confidential. No formal identification of information as "Confidential
Information" shall be required by the disclosing party.
1.7 "INTELLECTUAL PROPERTY RIGHTS" means all classes or types
of patents, utility models, designs patents (including without limitation,
originals or divisions, continuations, continuations-in-part or reissues) and
applications therefor of all countries of the world, which are used, or
published, or have a first effective filing date prior to the date of any
expiration or termination of this Agreement. Intellectual Property Rights shall
also include masswork rights, know how and trade secrets disclosed after the
Effective Date by SanDisk employees to assist SmartDisk in the development of
the MultiMediaCard Adapter and/or Additional Products. The term Intellectual
Property does not include trademarks, trade names, logos and rights in trade
dress and packaging.
1.8 "MULTIMEDIACARD" means flash memory cards that conforms to
the description published by the MultiMediaCard Association as set forth in
Exhibit 1.8 hereto.
1.9 "MULTIMEDIACARD ADAPTER" means a card adapter designed in
accordance with the MultiMediaCard description as set forth in Exhibit 1.8
hereto.
1.10 "NET REVENUES" means the total amount received by
SmartDisk for all copies of a Royalty Product other than amounts received for
sales or licenses of such products to or on behalf of SanDisk, less the
following amounts, in each case either allocated from SmartDisk's total such
expenses or, in certain instances where it is practical to measure such expenses
on a per-product basis, attributable to the subject product: all sales,
value-added, excise and other taxes; export charges or import duties; returns;
sales commissions which are reasonable and consistent with the amounts
customarily paid in the industry; freight and insurance paid by SmartDisk for
shipments of products; any currency exchange fees incurred by SmartDisk with
respect to invoiced amounts other than in United States dollars. In the event
that SmartDisk sells a Royalty Product in combination with another product, a
portion of the amount received by SmartDisk for such combined product shall be
attributed to a Royalty Product, consistent with SmartDisk's stand-alone product
pricing practices, and it is such apportioned amount which will be deemed to be
"Net Revenues" hereunder. Such amount shall be allocated pro rata to the Royalty
Product based on the aggregate list prices of all SmartDisk products in the
bundled product, but in no event shall the amount allocated to the Royalty
Product exceed the list price for such Royalty Product.
1.11 "OTHER PRODUCTS" means any Card Adapter which reads to a
SmartMedia Card, Sony MemoryStick Card or any other product that is not an
Additional Product.
1.12 "PROJECT PLAN" means a complete description of the
development of the Card Adapter which sets forth the obligations of each party
with respect thereto to be set forth in EXHIBIT 1.12 attached hereto. The
Project Plan shall include, without limitation, a detailed description of each
party's deliverables, delivery dates, milestones, target milestone achievement
dates for: (i) developing a proof of concept; (ii) developing and testing a
production prototype which shall be used as a manufacturing sample; (iii)
developing and testing manufacturing and engineering improvements for commercial
manufacturing cost reductions; and (iv) developing commercialized, final
products.
1.13 "ROYALTY PRODUCT" means the MultiMediaCard Adapter and
Additional Products collectively.
1.14 "SANDISKCARD" means the MultiMediaCard, the Compact Flash
Card and other flash memory cards produced or manufactured by SanDisk or
mutually agreed to in writing by the parties hereto.
1.15 "SANDISK CONTRIBUTIONS" means all of SanDisk's
contributions and all technical assistance SanDisk renders to the development of
the Project Plan and the Card Adaptor hereunder, and all Intellectual Property
Rights therein, whether in the form of: (i) oral or written presentations,
explanations or instructions; (ii) design specifications; or (iii) updates,
additions, enhancements, corrections and modifications to the Card Adaptor or to
any of SmartDisk's other adaptor products, but, in all cases excluding the
SanDisk Card, the Software, as defined in Section 3.1 below and the Hardware, as
defined in Section 3.1.1.16 "SANDISK CARD UPDATES" means updates, enhancements,
additions or modifications to a SanDisk Card.
2. DEVELOPMENT PHASE I - PROJECT PLANNING.
2.1 ADAPTER DESCRIPTION. THE MULTIMEDIACARD ASSOCIATION has
developed written specifications for the MultiMediaCard, a copy of which is
attached hereto as EXHIBIT 1.8. Within forty-five (45) calendar days after the
Effective Date, SmartDisk shall develop the MultiMediaCard Adapter Description
based upon such MultiMediaCard specifications, against which SmartDisk shall
develop the MultiMediaCard Adapter with SanDisk's assistance, as reasonably
requested by SmartDisk.
2.2 PROJECT PLAN. Within forty-five (45) calendar days of the
Effective Date, the parties will negotiate in good faith to develop and agree
upon the Project Plan, which shall be deemed to be part of this Agreement as
EXHIBIT 1.12.
3. DEVELOPMENT PHASE II - PROJECT PREPARATION
3.1 SANDISK TECHNICAL ASSISTANCE. Within thirty (30) calendar
days of the Effective Date, SanDisk shall deliver and convey to SmartDisk,
subject to Section 3.2 below, at SanDisk's expense, the software ("SOFTWARE"),
hardware and testing equipment (together, "HARDWARE"), as set forth in EXHIBIT
3.1 attached hereto, to enable SmartDisk to: (i) design and
develop the MultiMediaCard Adapter in accordance with the MultiMedia Adapter
Description; (ii) test the MultiMediaCard Adapter; (iii) perform quality
assurance and quality control for the MultiMediaCard Adapter; and (iv) to
provide support and maintenance with respect to the MultiMediaCard Adapter.
3.2 SOFTWARE LICENSE. SanDisk hereby grants SmartDisk a
non-exclusive, perpetual, worldwide, fully-paid right and license to use, and
reproduce, as reasonably required by SmartDisk, the Software for the sole
purpose of designing, developing, manufacturing, testing, performing quality
assurance, performing quality control, improving and providing support and
maintenance for a Royalty Product and Other Products. Notwithstanding the grant
of non-exclusive rights by SanDisk as set forth above, the parties understand
and agree that SmartDisk shall be the exclusive developer of a Royalty Product
as developed in accordance with the MultiMedia Adapter Description. In the event
a Royalty Product contains any portion of the Software which is proprietary to
SanDisk or a third party, SanDisk hereby grants SmartDisk a fully-paid,
worldwide right and license, or sublicense in the case when such proprietary
portion is owned by a third party, to reproduce, have made, modify and include
such portions of the Software in the Royalty Product and to market, sell and
distribute a Royalty Product which includes such portions of the Software.
SmartDisk shall retain possession and use of the Software pursuant to the
license set forth herein through that time when SmartDisk shall no longer be in
the business of developing, making, selling, licensing or distributing a Royalty
Product.
4. DEVELOPMENT PHASE III - PROJECT DEVELOPMENT
4.1 DESIGNATED CONTACTS. EXHIBIT 4.1 attached hereto sets
forth each party's designated "Principal Contact", which shall be each party's
respective point of contact for the resolution of problems. In addition, Exhibit
4.1 sets forth each party's respective "Program Manager", who shall have overall
responsibility for the direction and coordination of the development of the
MultiMediaCard Adapter. The SanDisk and SmartDisk Program Managers shall
establish and implement reasonable project management procedures. In addition to
the responsibilities set forth herein, the Principal Contact and Program Manager
shall be responsible for matters designated in the Project Plan.
4.2 OPERATING UNDER THE PROJECT PLAN. The parties hereby agree
to carry out their respective obligations pursuant to and in accordance with the
Project Plan.
4.3 REGULATORY APPROVAL. Except as set forth in the
Distribution Agreement, as described in Section 6.2 below, SmartDisk shall bear
sole responsibility for obtaining any required regulatory approval for the
MultiMediaCard Adapter. SmartDisk reserves the right to request that SanDisk
reasonably assist SmartDisk in seeking such approvals, at SanDisk's expense.
5. OWNERSHIP
5.1 ASSIGNMENT. Subject to the license set forth in Section
5.2 and to Section 5.5 below, SanDisk acknowledges and agrees that it is the
intent of the parties that SmartDisk shall be the owner of a Royalty Product.
SanDisk agrees to do any lawful act and to sign and deliver to SmartDisk, at
SmartDisk's expense, any document necessary to apply for,
prosecute or enforce any patent, copyright or other right or protection relating
to a Royalty Product which SmartDisk may reasonably request, subject to
ScanDisk's rights
5.2 LICENSE. For the term of this Agreement, SanDisk hereby
grants and agrees to grant to SmartDisk under SanDisk's Intellectual Property
Rights a non-exclusive, non-transferable to non-Affiliates of SmartDisk,
non-sublicensable, worldwide, right and license to reproduce, make, have made,
use, modify, market, sell and distribute Royalty Products and Other Products.
This license specifically excludes all other products except Royalty Products
and Other Products. Specifically, SanDisk does not grant SmartDisk a license to
make or have made flash memory or flash memory cards.
5.3 LICENSE FEES. In consideration of the license rights
granted in Section 5.2 above, SmartDisk shall pay the following amounts to
SanDisk:
(i) One hundred fifty thousand (150,000) shares of
Common Stock of SmartDisk (the "Common Stock"), payable within three
(3) business days of the Effective Date. Prior to the delivery of the
Common Stock to SanDisk. SanDisk shall executive the Investment
Representant Letter attached hereto as Exhibit S.3.
(ii) A royalty of [*****] percent ([*****]%) of the
Net Revenues. SmartDisk shall remit such payments thirty (30) calendar
days after each calendar quarter for Net Revenues received by SmartDisk
during such calendar quarter. The royalty amount of the license fee set
forth in this Section 5.3(ii) shall be subject to renegotiation by the
parties in good faith at the tenth anniversary of the Effective Date.
The parties agree that such royalty amount shall be a fair royalty at
the time. In the event the parties cannot reach agreement on the new
royalty amount payable to SanDisk within thirty (30) calendar days
prior to such date, the parties shall submit the matter to a single
arbitrator knowledgeable in the relevant technology field to determine
a fair royalty amount. The parties shall have ten (10) calendar days to
select a mutually agreeable arbitrator. If the parties cannot agree on
an arbitrator, each party shall select its own arbitrator and the two
selected arbitrators shall have ten (10) calendar days to select a
third arbitrator, which third arbitrator shall make the royalty
determination within thirty (30) calendar days.
5.4 CARD ADAPTER. Subject to Section 5.5 below, the license
rights granted to SmartDisk in Sections 3.2 and 5.2 above, SmartDisk has and
shall retain any and all rights of ownership in and to the MultiMediaCard
Adapter, any and all modifications, enhancements and derivative works thereof
and the Intellectual Property Rights embodied therein.
5.5 SANDISK CARDS. Subject to the license rights granted to
SmartDisk in Sections 3.2 and 5.2 above, SanDisk has and shall retain any and
all rights of ownership in and to the proprietary technology of the Software,
Hardware and all SanDisk Cards and all modifications, enhancements created by or
on behalf of SanDisk and the Intellectual Property Rights embodied therein.
***** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
6. DISTRIBUTION
6.1 SMARTDISK DISTRIBUTION. SmartDisk is free to determine its
own prices for a Royalty Product or Other Products to its distributors and other
customers unilaterally. Nothing set forth herein is a guaranty of distribution
or commercial success of a Royalty Product or Other Products by SmartDisk.
6.2 APPOINTMENT OF SANDISK. SmartDisk hereby agrees to appoint
SanDisk as a non-exclusive distributor of the MultiMediaCard Adapter pursuant to
a Distribution Agreement, the material terms of which are set forth in the
Distribution Term Sheet attached hereto as EXHIBIT 6.2.
6.3 MARKETING ASSISTANCE. Prior to the first commercial
release of the MultiMediaCard Adapter, the parties shall complete a marketing
plan therefor.
7. UPDATES, SUPPORT AND MAINTENANCE
7.1 SANDISK CARD UPDATES. In the event that during the term of
this Agreement, SanDisk develops, or has developed on its behalf, SanDisk Card
Updates relating to SanDisk's MultiMediaCards, SanDisk shall send SmartDisk
written notice thereof as soon as commercially reasonable with the intent that
SmartDisk has notice at least three (3) months prior to SanDisk's anticipated
first commercial release of such SanDisk Card Update. SanDisk's notice shall
describe the updates, enhancements, additions and modifications to the SanDisk
Card and shall state whether and how the MultiMediaCard Adapter's effectiveness,
functionality and commercial viability are affected by such SanDisk Card Update.
SanDisk shall use it's best effort to insure any changes made do not impair the
use of the MultiMediaCard Adapter. To the extent SmartDisk determines in its
commercially reasonable business judgement that the MultiMediaCard Adapter
should be modified to accommodate the SanDisk Card Update, the Program Managers
shall meet and confer to develop a new project plan for a modified
MultiMediaCard Adapter. SanDisk agrees to cooperate with SmartDisk, at SanDisk's
expense, to modify the MultiMediaCard Adapter to accommodate any such SanDisk
Card Update. Such cooperation may be in the form of supplying SmartDisk with
SanDisk engineering resources, training and equipment, at Sandisk's expense.
7.2 OBSOLESCENCE. SanDisk agrees that it will not modify the
SanDisk Card relating to ScanDisk's MultiMediaCards in a manner which reduces or
appears to reduce the commercial or technical quality of the MultiMediaCard
Adapter developed by SmartDisk hereunder for a period of eighteen (18) months
from the date of first commercial shipment of the MultiMediaCard Adapter.
7.3 MULTIMEDIACARD ADAPTER SUPPORT. Throughout the term of
this Agreement, SanDisk shall provide a reasonable amount of remote (telephonic
and electronic) engineering and other technical support, at SanDisk's expense,
as reasonably requested by SmartDisk to assist SmartDisk in its efforts to
improve the MultiMediaCard Adapter and to reduce the costs of manufacturing the
MultiMediaCard Adapter. The periodic meetings held by the Program Managers shall
address mutually agreeable ways to have SanDisk render such support to
SmartDisk. Nothing set forth herein shall require SanDisk to provide distributor
or end-user support for MultiMediaCard Adapters distributed by SmartDisk to
non-SanDisk
distributors or to end-users, although SanDisk's MultiMediaCard Adapter support
obligations for the MultiMediaCard Adapters which it distributes shall be as set
forth in the Distribution Agreement. SmartDisk shall provide support for the
MultiMediaCard Adapter to its distributors and end-users consistent with its
standard support and warranty programs for its products, which SmartDisk
reserves the right to modify from time to time.
7.4 SANDISK CARD SUPPORT. As between the parties, SanDisk
shall provide all distributor and end-user support for the SanDisk Card and the
SanDisk Card Updates. SmartDisk shall not be responsible for any support of the
SanDisk Card or SanDisk Card Updates.
8. WARRANTIES AND LIMITATIONS ON LIABILITY
8.1 SANDISK REPRESENTATIONS.
8.1.1 SanDisk represents and warrants to SmartDisk
that no claim of infringement as part of any actual, threatened or imminent
legal action of any SanDisk Intellectual Property Right has been made or is
pending against SanDisk relating to the SanDisk Card, the Software or the
Hardware. SanDisk will promptly notify SmartDisk in the event there is any such
claim, or threatened claim of which it is aware, of infringement of any third
party's Intellectual Property Rights arising out of the SanDisk Card, the
SanDisk Card Updates, the SanDisk Contributions, the Software, the Hardware, or
any component thereof.
8.1.2 SanDisk represents and warrants to SmartDisk
that to its knowledge after reasonable investigation, SanDisk has the right to
enter into this agreement and grant the licenses herein granted.
8.2 DISCLAIMER OF WARRANTIES. EXCEPT FOR THE EXPRESS
WARRANTIES STATED IN THIS SECTION 8, SANDISK MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY SANDISK CARD, ANY SanDisk Card Updates, THE
HARDWARE OR THE SOFTWARE, AND SANDISK SPECIFICALLY DISCLAIMS ANY WARRANTIES,
WHETHER EXPRESS OR IMPLIED, FOR MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE.
8.3 LIMITATION OF LIABILITY. SUBJECT TO THE PROVISIONS OF
SECTION 9.1 HEREOF, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INCIDENTAL,
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND OR THE LOSS OF
ANTICIPATED PROFITS ARISING FROM ANY BREACH OF THIS AGREEMENT EVEN IF SUCH PARTY
IS NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF WHETHER ANY
REMEDY SET FORTH HEREIN FAILS OF ITS ESSENTIAL PURPOSE.
9. INFRINGEMENT AND OTHER REPRESENTATIONS
9.1 SANDISK INTELLECTUAL PROPERTY INDEMNITY. SanDisk shall use
it's best effort to defend SmartDisk from any claim, demand or liability brought
against SmartDisk to the extent it is based upon a claim that any of the SanDisk
Card or the SanDisk Card Updates, infringe upon any third party Intellectual
Property Right. SmartDisk agrees that it shall promptly
notify SanDisk in writing of any such claim or action and give SanDisk full
information and assistance in connection therewith. SanDisk shall have the sole
right to control the defense of any such claim or action and the sole right to
settle or compromise any such claim or action.
9.2 LIMITATION OF SANDISK OBLIGATIONS. SanDisk shall have no
obligation hereunder for or with respect to claims, actions or demands alleging
infringement which arise by reason of a) the combination of SanDisk's
non-infringing items with any items not supplied by SanDisk unless such
combination is expressly contemplated hereunder, b) SanDisk's compliance with
SmartDisk's designs, specifications or instructions, or c) unauthorized
modification by SmartDisk of the SanDisk Card, the SanDisk Card updates, the
Software or Hardware.
9.3 SmartDisk Indemnity. SmartDisk shall be responsible for
and shall indemnify and hold SanDisk harmless for any and all losses,
liabilities or damages arising out of or incurred in connection with a)
SmartDisk's distribution of Royalty Products or Other Products, except for third
party infringement claims as set forth in Section 9.1 or any other claims
relating to the SanDisk Card, the SanDisk Card Updates, the SanDisk
Contributions, the Software, the Hardware, or any component thereof, and b) any
unauthorized representation, warranty, or agreement, express or implied, made by
SmartDisk to any third party with respect to a Royalty Product, Other Product or
any other product which SmartDisk may distribute which incorporates or uses
SanDisk Intellectual Property.
10. ASSIGNMENT
This Agreement shall not be assigned by either party, in whole or in
part without the written consent of the other, which consent will not be
unreasonably withheld. However, either party may assign this Agreement to a
subsidiary or entity controlled by or under common control with such party, or
to any successor in-interest resulting from a reorganization, merger,
acquisition or sale of substantially all of the assets of such party, upon
written notice to the other party, (as long as the original party hereto, to the
extent such party continues to exist, remains primarily liable to the other
contracting party
11. DURATION AND TERMINATION OF AGREEMENT
11.1 TERM. This Agreement is effective for a period of ten
(10) years commencing on the Effective Date and will be automatically renewed
for successive two (2) year periods, unless ninety (90) calendar days prior to
any such expiration, either party sends the other party written notice of its
intent not to renew this Agreement, in which case this Agreement shall expire at
the conclusion of its existing term.
11.2 TERMINATION FOR CAUSE. In the event that either
materially breaches this Agreement and such breach remains uncured twenty (20)
calendar days following receipt of written notice by the nonbreaching party, the
nonbreaching party may terminate this Agreement by written notice to the
breaching party in which case the effective date of such termination shall be
the day following the twenty (20) day cure period described herein.
11.3 NO EXPECTATION OF BUSINESS RELATIONSHIP. Neither party
has any expectation that the business relationship set forth herein will
continue beyond the expiration of
this Agreement, or any renewal hereunder, or its earlier termination as herein
provided, or that SanDisk shall obtain any anticipated amount of profits by
virtue of this Agreement.
11.4 SURVIVAL. Sections 8, 9, 11.3, 11.4, 12, 13 and 14 shall
survive the termination or expiration of this Agreement.
12. CONFIDENTIAL INFORMATION
12.1 CONFIDENTIAL INFORMATION. Each party agrees to use
reasonable efforts, and at least the same care that it uses to protect its own
Confidential Information of like importance, to prevent unauthorized
dissemination and disclosure of the other party's Confidential Information
during and for a period of three (3) years after the term of this Agreement.
These obligations will be subject to the following terms and conditions:
(i) The foregoing obligations will not apply to any
Confidential Information that: (a) becomes known to the general public
without fault or breach on the part of the receiving party; (b) the
disclosing party customarily provides to others without restriction on
disclosures; (c) the receiving party receives from a third party
without breach of a nondisclosure obligation and without restriction on
disclosure; (d) was in the possession of the receiving party prior to
disclosure by the other; or (e) is independently developed by the
receiving party's personnel having no access to similar confidential
information obtained from the other.
(ii) Nothing in this Agreement will affect any
obligation of either party to maintain the confidentiality of a third
party's confidential information.
12.2 NO IMPAIRMENT. Nothing in this Agreement will impair the
right of either party to use, develop or market technologies, ideas or products
similar to those of the party so long as such use, development or marketing does
not infringe on any Intellectual Property Right of such other party or use such
other party's Confidential Information.
12.3 PUBLIC ANNOUNCEMENT. SanDisk and SmartDisk agree that no
press release or other public announcement about this Agreement or the business
relationship between the parties shall be made without the prior written consent
of both parties, which shall not be unreasonably withheld.
13. INFORMAL DISPUTE RESOLUTION
Should any dispute or disagreement between SmartDisk and SanDisk arise
relating to any provision of this Agreement (except with respect to Section 12
or with respect to a claim of misappropriation of the other party's Intellectual
Property or Confidential Information), the Program Manager of one party may give
written notification of such dispute or disagreement to the Program Manager of
the other party. The Program Managers shall communicate with each other promptly
with a view to resolving such dispute or disagreement within fourteen (14)
calendar days of commencing their negotiations (or such extended period as the
Program Managers agree is appropriate in any case). In the event that a dispute
or disagreement is not resolved by the Program Managers within such time period,
the Program Managers shall refer the dispute for discussion and resolution to
the Principal Contact of SmartDisk and the Principal
Contact of SanDisk, who shall have an additional fourteen (14) calendar days to
meet and confer concerning a possible resolution. In the event that a dispute or
disagreement is not resolved by the Principal Contacts within such time period,
the Principal Contacts shall refer the dispute for discussion and resolution to
the President of SmartDisk and the President of SanDisk, who shall have an
additional fourteen (14) calendar days to meet and confer concerning a possible
resolution.
14. GENERAL
14.1 RELATIONSHIP OF THE PARTIES. The parties' relationship
during the term of this Agreement shall be that of independent contractors.
Neither party shall have, nor shall represent that it has, any power, right or
authority to bind the other, or to assume or create any obligation or
responsibility, express or implied, on behalf of the other or in such other
party's name, except as herein expressly provided. Nothing stated in this
Agreement shall be construed as constituting a partnership or as creating the
relationships of employer/employee, franchiser/franchisee, or principal/agent
between the parties.
14.2 GOVERNING LAWS. The internal laws of the State of
California, U.S.A., regardless of any choice of law principles, shall govern the
validity of this Agreement, the construction of its terms and the interpretation
and enforcement of the rights and duties of the parties.
14.3 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties.
14.4 SEVERABILITY. If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances shall be interpreted so as best to reasonably
effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision which will achieve, to the extent possible, the economic,
business and other purposes of the void or unenforceable provision.
14.5 ENTIRE AGREEMENT. This Agreement, the exhibits hereto,
the documents referenced herein and the exhibits thereto, constitute the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and thereof and supersede all prior and contemporaneous agreements
or understandings, inducements or conditions, express or implied, written or
oral, between the parties with respect hereto and thereto. The express terms
hereof control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.
14.6 OTHER REMEDIES. Any and all remedies herein expressly
conferred upon a party shall be deemed cumulative with, and not exclusive of,
any other remedy conferred hereby or by law on such party, and the exercise of
any one remedy shall not preclude the exercise of any other.
14.7 AMENDMENT AND WAIVERS. Any term or provision of this
Agreement may be amended, and the observance of any term of this Agreement may
be waived, only by a writing signed by the parties. The waiver by a party of any
breach hereof for default in payment of any amount due hereunder or default in
the performance hereof shall not be deemed to constitute a waiver of any other
default or succeeding breach or default.
14.8 ATTORNEYS' FEES. Should suit be brought to enforce or
interpret any part of this Agreement, the prevailing party shall be entitled to
recover, as an element of the costs of suit and not as damages, reasonable
attorneys' fees to be fixed by the court (including, without limitation, costs,
expenses and fees on any appeal). The prevailing party shall be the party
entitled to recover its costs of suit, regardless of whether such suit proceeds
to final judgment. A party not entitled to recover its costs shall not be
entitled to recover attorneys' fees. No sum for attorneys' fees shall be counted
in calculating the amount of a judgment for purposes of determining if a party
is entitled to recover costs or attorneys' fees.
14.9 NOTICES. Whenever any party hereto desires or is required
to give any notice, demand or request with respect to this Agreement, each such
communication shall be in writing and shall be given or made by facsimile, mail
or other delivery and faxed, mailed or delivered to the intended recipient at
the addresses specified below:
If to SmartDisk: SmartDisk Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxxx
with a copy to: Xxxxxxxxx Xxxxx Morosoli & Maser LLP
000 Xxxx Xxxx Xxxx, Xxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
If to SanDisk: SanDisk Corporation
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx Xxx Xxxxx
with a copy to: Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
2 Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attn: Xxxxxxx Xxxxx
Except as may be otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by facsimile with
verified receipt by the receiving fax machine, when personally delivered, four
(4) days after being delivered to an overnight air courier (E.G. DHL, or Federal
Express) upon proof of delivery, or, in the case of a mailed notice, five (5)
days after being deposited in the United States mail certified or registered
mail, postage prepaid. Either party may change its address for such
communications by giving notice thereof to the other party in conformance with
this section.
14.10 FURTHER ASSURANCES. Each party agrees to cooperate fully
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to better evidence and reflect the transactions
described herein and contemplated hereby, and to carry into effect the intents
and purposes of this Agreement.
14.11 FORCE MAJEURE. No failure or omission to carry out or
observe any of the terms, provisions or conditions of this Agreement shall give
rise to any claim by one party against the other or be deemed to be a breach of
this Agreement if the same is caused by or arises out of one or more of the
following conditions: acts of God; acts, regulations or laws of any government;
war; civil commotion; destruction of production facilities or materials by fire,
earthquake or storm; labor disturbances; epidemic; failure of public utilities
or of suppliers; or any other event, matter or thing wherever occurring and
whether or not of the same class or kind as those set forth above, which is not
reasonably within the control of the party affected thereby. However, the
parties hereto shall endeavor to avoid, remove or cure all such conditions. Any
party temporarily excused from performance hereunder by such conditions shall
resume performance promptly when such conditions are removed or cured. Any party
claiming any such conditions as an excuse for delay in performance hereunder
shall give prompt notice in writing thereof to the other party.
14.12 COMPLIANCE WITH LAWS. The parties acknowledge and agree
that this Agreement and the rights and obligations of the parties hereunder are
subject to all applicable laws and regulations of governmental entities having
jurisdiction over any aspects of this Agreement.
14.13 AFFILIATE. EXHIBIT 1.3 identifies SmartDisk's Affiliates
may be amended from time to time to add new SmartDisk wholly owned subsidiaries
on the condition that each such wholly owned subsidiary has agreed in writing to
be bound by the terms of this Agreement as such terms apply to SmartDisk.
14.14 RECORDS AND INSPECTION. SmartDisk agrees to keep all
usual and proper records and books of account and all usual and proper entries
therein related to the license, royalty payments, or other rights and
restrictions hereunder. Upon reasonable notice and after the execution of a
confidentiality agreement by Sandisk and any appointed representative, SanDisk
or its duly appointed representative shall have the right, at its expense and
during normal business hours, to audit SmartDisk's records or inspect its files
necessaryto verify SmartDisk's compliance with this Agreement. In the course of
such inspection or audit, SanDisk or its representative will be entitled to copy
any item that SanDisk believes indicates violation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
SMARTDISK CORPORATION SANDISK CORPORATION
By: /s/ XXXXXXX X. XXXXXXXXX By: /s/ XXXXXX XXXXXXX
-------------------------------- -----------------------------
Name: Xxxxxxx X. Xxxxxxxxx Name: Xxxxxx Xxxxxxx
Title: President and CEO Title: Vice President
EXHIBIT 1.5
Reference is hereby made to that certain CompactFlash Memory
Card Product Manual that may be in effect from time to time, as
amended, and obtained from SanDisk Corporate Headquarters, 000 Xxxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000-0000.
EXHIBIT 1.7
Reference is hereby made to that certain MultiMediaCard
Product Manual that may be effect from time to time, as amended, and
obtained from SanDisk Corporate Headquarters, 000 Xxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000-0000.
EXHIBIT 3.1
SOFTWARE AND HARDWARE
SOFTWARE:
1. A copy of the 2.0 release of the MMC specification.
2. Commitment from SanDisk to perform Quality Assurance tests on both the
FlashPath hardware and software.
3. Detailed specifications of how a format utility should configure the
MMC (e.g., layout of MBR).
HARDWARE:
1. A copy of the 2.0 release of the MMC specification.
2. VHDL model of MMC.
3. 20 samples of each MMC memory density (e.g., 2MB, 4MB, 8MB, 16MB, etc.)
4. Hardware emulators (3) to test future density products (e.g., 128MB)
5. A set of MMC modules which have been modified to include errors which
FlashPath firmware or software will have to handle.
6. 40 MMC sockets for building prototypes.
7. Commitment from SanDisk to perform Quality Assurance tests on both the
FlashPath hardware and software.
8. Specification on the CRC routine used with MMC.
EXHIBIT 4.1
CONTACTS
PROGRAM MANAGER
SmartDisk SanDisk
--------------------------------------------------------------------------------
Xxx Xxxxxxxxx Xxx Xxxxxxx
PRINCIPAL CONTACT
SmartDisk SanDisk
--------------------------------------------------------------------------------
Xxx Xxxxxxxxx Xxx Xxxxxxx
SmartDisk Corporation SanDisk Corporation
0000 Xxxxxxxxxx Xxxxxx 140 Caspian Court
Naples, Fl 34104 Xxxxxxxxx, XX 00000
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
EXHIBIT 5.3
INVESTMENT REPRESENTATION LETTER
SmartDisk Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Gentlemen:
The undersigned is acquiring One Hundred Fifty Thousand
(150,000) shares o SmartDisk Corporation, a Delaware corporation (the
"Company"), Common Stock (the "Stock").
The undersigned understands that the issuance of the Stock has
not been registered under the Securities Act of 1933 (the "ACT") or
qualified under the Florida Securities Law (the "LAW") in reliance upon
exemptions from the registration requirements of the Act and the
qualification requirements of the Law.
The undersigned further understands that the exemptions from
the registration requirements of the Act relied upon in issuing the
Stock to the undersigned are only available if, among other things, the
undersigned is acquiring the Stock for investment for its own account
and not with a view to, or for transfer in connection with, any
distribution of a security.
In light of these restrictions on the availability of the
exemptions from the Act and the Law, the undersigned hereby makes the
following statements of fact upon which the Company is entitled to rely
in connection with the issuance of the Stock to it:
1. The undersigned is aware that the Stock is highly speculative; there
can be no assurance as to what the return, if any, on this investment may be.
2. The undersigned is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Stock.
3. The undersigned is acquiring the Stock for investment for its own
account and not with a view to, or for transfer in connection with, any
distribution of the Stock.
4. The undersigned understands that the Stock has not been registered
under the Act nor qualified under the Law by reason of specific exemptions
therefrom which exemptions may depend upon, among other things, the bona fide
nature of my investment intent as expressed herein. In this connection, the
undersigned understands that, in the view of the Securities and Exchange
Commission (the "SEC"), the statutory basis for the exemption from the Act may
not be present if its representations mean that its present intent is to hold
the Stock for a minimum capital gains period under the tax statutes, for a
deferred transfer, for a market rise, or a transfer if the market does not rise,
or for a year or any other fixed period in the future.
5. The undersigned understands that the Stock must be held indefinitely
unless it is subsequently registered under the Act and qualified under the Law
or exemptions from such registration and qualification are available. The
undersigned understands that the Company is under no obligation to register or
qualify the Stock. The undersigned understands that the certificate evidencing
the Stock will be imprinted with a legend which prohibits the transfer of the
Stock unless it is registered and qualified or such registration and
qualification are not required in the opinion of counsel satisfactory to the
Company.
6. The undersigned is aware of Rule 144 promulgated under the Act which
permits limited public resale of stock acquired in a non-public offering subject
to the satisfaction of certain conditions. The conditions specified in Rule 144
include, among other things: the availability of certain public information
about the Company; the resale occurring not less than one year after the
undersigned purchased and completed payment for
the Stock, the sale being on the public market through a broker in an
unsolicited "broker's transaction" or to a "market-maker", and the amount of
stock being sold during any three-month period not exceeding specified
limitations (generally, one percent (1%) of the total stock outstanding every
three months) except that such conditions need not be met by a person who is not
an affiliate of the Company at the time of sale and has not been an affiliate
for the preceding three months, if the securities to be sold have been
beneficially owned by such person for at least two years prior to their sale.
The undersigned understands that the Company's stock may not be publicly traded
or may not be satisfying the current public information requirements of Rule 144
at the time the undersigned wishes to sell the Stock, and thus the undersigned
may be precluded from selling the Stock under Rule 144.
7. The undersigned further understands that in the event all of the
requirements of Rule 144 are not met, registration under the Act or compliance
with Regulation A promulgated under the Act or some other registration exemption
will be required for any disposition of the Stock; and that, although Rule 144
is not exclusive, the SEC has expressed its opinion that persons proposing to
sell private placement securities other than in a registered offering and other
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales and that such persons and the brokers who participate in the transactions
do so at their own risk.
8. The undersigned agrees, in connection with any registration of the
Company's securities in a firm commitment underwriting, upon the request of the
company, or the underwriters managing such underwriting, not to sell, make any
short sale of, loan, grant any option for the purchase of or otherwise dispose
of any of the Company's Common Stock, including Common Stock issuable upon
conversion of any convertible securities held by the undersigned, without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed one hundred eighty (180) days after the
effective date of such registration) as the Company or the underwriters may
specify, provided that each officer of the Company, each director of the Company
and each person then holding ten percent (10%) or more of any class of the
Company's securities then outstanding shall make the same agreement with respect
to other securities of the Company then held by such other shareholder or such
other person.
9. The undersigned understands that the certificate evidencing the
Stock will be imprinted with such legends as the Company's counsel may deem
necessary to assure the Company's compliance with the Act and the Law.
The undersigned warrants that the foregoing statements concerning
itself to be true and correct. This letter may be relied upon and enforced by
the Company.
Very truly yours,
SANDISK CORPORATION
By: /S/ XXXXXX X. XXXXXXX
----------------------------------------
Name: XXXXXX X. XXXXXXX
Title: SR. VP, BUSINESS DEVELOPMENT
EXHIBIT 6.2
DISTRIBUTION AGREEMENT TERM SHEET
Product: Card Adaptors and updates thereto.
Status: Nonexclusive distributor of Multi Medicard Adapter, with the
right to distribute direct to end-users and through
subdistributors.
Term: Five (5) years, with successive two (2) year automatic renewal
periods thereafter, unless either party elects 90 days prior
to expiration not to renew and unless the Distribution
Agreement has not otherwise been terminated.
The Distribution Agreement will automatically terminate upon
the termination of the Cooperative Development Agreement.
Territory: Worldwide
Pricing: Equal to the best price SmartDisk offers to any other entity.
Shipping: F.O.B. SmartDisk's manufacturing facility.
Other Terms: All other terms and conditions will be as set forth in
SmartDisk's standard distribution agreement.
