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EXHIBIT 10.24
The following
AGREEMENT
is hereby concluded by and between
BetaDigital Gesellschaft fur digitale Fernsehdienste mbH, represented by
General Manager, Mr. Xxxxx Xxxx, Xxxxxxx. 0, 00000 Xxxxxxxxxxxx
and
SCM Microsystems GmbH, represented by General Manager, Xx. Xxxxx Xxxxx, Luit-
xxxxxxx. 0, 00000 Xxxxxxxxxxxx:
I. DEVELOPMENT CONTRACT
1. BetaDigital hereby engages SCM to develop a Conditional Access Module
(module) in accordance with the specification, construction plans and
xxxx of material attached as appendices 1 through 3; express reference
is hereby made thereto.
A component of the development order shall be the delivery of 10
prototypes of the module. Half of the prototypes shall, in addition to
the foregoing description, be equipped with sockets for EEPROM 8 Pin,
EPROM 64 K x 8 and for the Micro Controller ST 90 R 52.
For this purpose, BetaDigital shall provide 30 chips descrambling ASIC
in the TQFP housing (Euro-I Chip); the 20 Euro-I Chips which have
already been delivered shall be offset against this amount. Upon
availability of a new version of the descrambling chip, BetaDigital
shall provide such new version; SCM shall be obligated to incorporate
the newest version of the descrambling chip into the development of the
module and later serial fabrication.
BetaDigital shall supply the software download files for the 64 K X 8
EPROM and the EEPROM 8 pin or for derivative storage building blocks.
Each module shall be provided with the label "BetaDigital" in accordance
with the description set forth in appendix 4.
2. SCM shall deliver to BetaDigital the development documentation, which
must be fully created, as well as all other documents in connection with
the development for the hardware (such as electric circuit diagrams,
mechanical plans, PCB layout) and the software for the
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development and testing tools, to the extent that these are created by
SCM or in joint collaboration with BetaDigital.
3. SCM shall transfer to BetaDigital the right to use the copyright arising
in connection with the development of the module, including the
developmental tools and test tools; said use right shall be exclusive,
chronologically unrestricted, not unilaterally revokable and
transferrable.
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The provisions of SectionSection 69 a and 69 b UrhG [German Copyright
Act] and SectionSection 69 d through 69 g UrhG shall remain unaffected.
4. It shall be responsibility of SCM that the services rendered by SCM do
not infringe upon the proprietary rights of third parties.
SCM shall defend BetaDigital in its own name against all claims which
are asserted by a third party on the grounds of alleged infringement of
industrial property rights (patents, patent applications, copyrights,
trademarks, rights to masks and semiconductor topologies, etc.) as a
result of the delivered or licensed products and shall compensate
BetaDigital for all judicially imposed costs and compensatory damage,
provided that BetaDigital - informs SCM promptly and in writing
concerning the assertion of such claims, - provides SCM with all
necessary information, - provides reasonable support and - provided that
the authority to decide whether such claims shall be defended or settled
shall remain exclusively with SCM.
5. It shall be the responsibility of BetaDigital that the hardware and
software provided by BetaDigital does not infringe upon proprietary
rights of third parties.
BetaDigital shall defend SCM in its own name against all claims which
are asserted by a third party on the grounds of alleged infringement of
industrial property rights (patents, patent applications, copyrights,
trademarks, rights to masks and semiconductor topologies, etc.) as a
result of the delivered or licensed products and shall compensate SCM
for all judicially imposed costs and compensatory damage, provided that
SCM
- informs BetaDigital promptly and in writing concerning the assertion
of such claims,
- provides BetaDigital with all necessary information,
- provides reasonable support and - provided that the authority to
decide whether such claims shall be defended or settled shall remain
exclusively with BetaDigital.
6. SCM promises that it shall develop the module set forth in paragraph 1
by no later than 10/15/96 and shall do so in such a manner that serial
fabrication shall be possible starting November 1996.
7. Acceptance of the prototypes shall take place with the help of the
performance description in section 1, above, within a period of 2 months
following delivery of the prototypes.
8. The descrambling chips which are delivered shall remain the property of
BetaDigital. If a loss of ownership occurs as a result of combination,
mixture or processing, BetaDigital shall receive a co-ownership share of
the overall object in accordance with the chips provided. The delivery
of chips shall not include a right on the part of SCM to utilize, use or
transfer any existing copyrights.
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9. The development, manufacture and delivery of prototypes shall be
carried out without compensation.
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10. In the event of default in performance by SCM, BetaDigital shall be
entitled to withdraw from the entire agreement following the imposition
of a deadline and the threat of refusal. Claims for compensatory damages
for failure to perform shall be barred.
Default in performance shall not occur to the extent that BetaDigital
fails to perform in a timely manner a duty to supply to which it is
subject.
Otherwise, the statutory regulations shall apply; specifically, the
right of termination set forth in Section 649 BGD [German Civil Code]
shall remain unaffected.
II. PILOT SERIES PRODUCTION
1. BetaDigital shall order [ * ] units of the pilot series of the modules
in accordance with the performance description in section 1 of the
development order. If, during the development phase, the parties
mutually agree to modify the performance description, delivery shall be
made in accordance with the modified specification.
The release of the pilot series production shall be carried out by
BetaDigital. It shall take place in writing within 10 business days
following acceptance of the prototypes.
2. The components supplied by BetaDigital shall remain the property of
BetaDigital. If a loss of ownership occurs as a result of combination,
mixture or processing, BetaDigital shall receive a co-ownership share of
the overall object in accordance with the components provided. The
delivery of components shall not include a right on the part of SCM to
utilize, use or transfer any existing copyrights.
3. The delivery of the pilot series lot shall take place by no later than
10/31/96.
4. The per module price of the pilot series shall be DM [*]. It shall be
understood that this price does not include the descrambling chip to be
provided by BetaDigital.
5. Delivery shall be made at the expense and risk of SCM to Nokia Satellite
Systems AB, Xxxxxxxx, 00000 Xxxxxx, Xxxxxx.
6. Acceptance shall be carried out by Nokia in the capacity of
representative of BetaDigital. Checking shall be done by means of random
samples (5% of the delivery).
If the receiving inspection reveals a projected defect ratio of [ * ] or
more, BetaDigital--represented by Nokia, if applicable--shall be
entitled to return the entire delivery at SCM's expense. SCM shall be
obligated to provide prompt replacement in the event of a return. In the
event of failure or delay of the replacement delivery, BetaDigital shall
be entitled to cancellation.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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III. ORDER QUANTITY GUARANTEE
1. BetaDigital shall be obligated to order [ * ] modules (less the pilot
series) [ * ] and [ * ]. The following shall fall within said order
quantity guarantee:
- orders of a further developed Conditional Access Module
based on a separate development contract (concerning
software and/or hardware) and/or conditional access
module with Common Interface, and
- all orders by third parties, to the extent that they use
the module in connection with the d-box technology.
BetaDigital shall be entitled to hire an auditor to
inspect the orders of third parties at SCM.
For the first [ * ] units in connection with the order quantity
guarantee, the parties hereby agree among themselves upon a price per
module of DM [ * ]. It shall be understood that this price does not
include the descrambling chip to be provided by BetaDigital.
3. SCM shall be obligated to supply at least [ * ] modules during [ * ].
BetaDigital shall order [ * ] units for delivery by [ * ]
and an additional [ * ] units for delivery by no later than [ * ].
To the extent that BetaDigital does not call for the second
25,000 units for delivery in the [ * ], an advance
toward material costs in the amount of [ * ] of the module price shall
be paid by [ * ], for the difference in unit number. The residual price
shall be paid according to the usual payment rules.
4. For the following [ * ] units in connection with the order quantity
guarantee, the parties hereby agree among themselves upon a price
determination by BetaDigital as follows:
[ * ]
- It is intended that the price determination [ * ] be
exercised in advance by BetaDigital--one month after
sending the cost lists, if possible.
5. If the order quantity guarantee is not satisfied within the stipulated
period of time, BetaDigital shall be obligated to pay [ * ](in lieu of
stipulated performance) for the order quantity not purchased.
6. To the extent that components are delivered by BetaDigital for the
production of the modules, SCM shall check them for their functionality
prior to use. The components shall remain the property of BetaDigital.
If a loss of ownership occurs through combination, mixture or
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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processing, BetaDigital shall receive a co-ownership share of the
overall object in accordance with the components provided.
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The delivery of components shall not include a right on the part of SCM
to utilize, use or transfer any existing copyrights. In the case of
orders by third parties in connection with the order quantity guarantee,
SCM shall be obligated to obtain consent in advance from BetaDigital
concerning the use of the components.
IV. DELIVERY TERMS FOR DELIVERIES IN CONNECTION WITH THE ORDER QUANTITY
GUARANTEE
1. The lot size shall be [ * ] units.
2. The delivery times shall be a maximum of 16 weeks from the time of the
order. Order and delivery time provisions shall be made by BetaDigital
or Nokia in its capacity as representative upon presentation of a power
of attorney.
3. Delivery shall be made at the expense and risk of SCM to Nokia Satellite
Systems AB, Xxxxxxxx, 00000 Xxxxxx, Xxxxxx.
4. The described delivery deadline shall be binding with the exception of
the delivery of the first [ * ] units.
If SCM defaults with regard to a delivery or portions thereof, SCM shall
be obligated to pay lump-sum compensatory damages in the amount of 0.5%
of the invoice amount of the delivery affected by the defaults or
portion thereof for each week which is started as of the beginning of
the default. The lump-sum compensatory damage claim, however, shall be
limited to a maximum of 10% of the relevant invoice amount. SCM shall be
entitled to provide documentation of lower or an absence of damages; in
such a case, compensation shall be made therefor.
Default shall not take place to the extent that BetaDigital does not
provide the descrambling chip a timely manner.
Acceptance shall be carried out by Nokia in the capacity of
representative of BetaDigital. Checking shall be done by means of random
samples (0.5% of the delivery).
5. If the receiving inspection reveals a projected defect ratio of [ * ] or
more, BetaDigital--represented by Nokia, if applicable--shall be
entitled to return the entire delivery at SCM's expense. SCM shall be
obligated to provide prompt replacement in the event of a return. In the
event of failure or delay of the replacement delivery, BetaDigital shall
be entitled to cancellation. If a projected total of less than 4% of the
delivered modules are defective, BetaDigital shall be entitled to a
reduction on a percentage basis. Otherwise, guarantee shall be barred.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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V. LIABILITY
1. SCM shall be liable without restriction for damages--regardless of the
legal grounds therefor--to the extent that such damages were caused by
intentional conduct or gross negligence or are attributable to the
absence of a promised attribute, or to the extent that the Product
Liability Act provides for mandatory liability.
2. Unless otherwise provided in section I.4, I.5, IV.4 or V.1, SCM shall be
liable up to a maximum of DM 2,000,000.00 (in words two million German
marks) for personal injury and property damage and up to a maximum of DM
1,000,000.00 (in words one million German marks) for other damage, but
not for lost profits or damages whose occurrence was typically not
foreseeable at the time of the conclusion of the contract.
3. Otherwise, further liability shall be barred.
VI. PAYMENT TERMS
Unless expressly agreed to the contrary, payments shall be due 10 days
after invoicing.
VII. MISCELLANEOUS
1. This agreement shall replace the contractual relationship concerning the
fabrication and order of Conditional Access Modules with Common
Interface order letter dated [ * ] in its entirety.
2. In accordance with the non-disclosure agreements already stipulated on
12/15/95, the parties shall be obligated to treat information and
knowledge arising from the collaboration in a strictly confidential
manner.
The parties hereby agree to pay a contractual penalty in the amount of
DM 100,000.00 for each instance of violation (the defense of a single
continuing offense shall be barred).
3. The appendices to this contract shall constitute substantial components
thereof.
4. This contract shall be governed by the law of the Federal Republic of
Germany.
5. The place of venue for all disputes concerning the validity and
performance of this agreement shall be Munich.
* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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6. No oral collateral agreements exist. The parties hereby agree that
modifications of this contract and its appendices must be made in
writing; this shall also apply to modification of the written form
clause.
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7. If individual provisions of this contract or portions thereof are or
should become invalid or void, the validity of the remaining provisions
shall not be affected.
Unterfohring, 10/9/96
s/Xxxxx Xxxxx
[signature]
SCM Microsystems GmbH BetaDigital, Gessellschaft
fur digitale Fernsehdienste
mbH
General Manager General Manager
