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EXHIBIT 10.21
DEVELOPMENT AND LICENSE AGREEMENT
THIS AGREEMENT, effective as of March 6, 1997 (the "Effective Date"), is made
and entered into by and between Intel Corporation ("Intel"), a Delaware
corporation with a business address at 0000 X. Xxxxxxxx Xxxx., Xxxxxxxx Xxxxxxx
00000 and SCM Microsystems, Inc., a Delaware corporation with a business address
at 000 Xxxxxxxx Xxx, Xxx Xxxxx, Xxxxxxxxxx 00000.
RECITALS
SCM has developed technology that combines the capability of a PCMCIA card and a
microprocessor-based smart card compliant with International Standards
Organization ("ISO") specification 7816 for use in PCMCIA slots.
SCM has also developed VHDL models and silicon implementations of ISO 7816 smart
card physical interfaces and software technology for use with compliant smart
cards in PC applications.
Intel has developed [* ] Intel Architecture microprocessors and [* ] technology
which may be suitable for use in PCMCIA-based applications.
Intel and SCM desire to cooperate in the development of certain [* ] products
which utilize the respective technical capabilities of both companies.
Intel and SCM are interested in developing and promoting various industry
standards applicable to [* ] products.
Intel is interested in licensing SCM's ISO 7816 smart card VHDL models for
incorporation in various Intel products.
Intel and SCM are engaged in independent development of [* ] software and desire
to cross license certain patents related to such development.
Intel and SCM are interested in establishing an equity investment that
facilitates a collaborative business relationship of the parties in a manner
consistent with the requirements of both companies.
AGREEMENT
1.0 DEFINITIONS
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.1 "SCM Products" means the PCMCIA form factor products or items
to be developed by or for SCM which incorporate Intel
Technical Information [* ].
1.2 "Licensed SCM IP" means all patents, copyrights, trade
secrets, and other intellectual property rights, which are
embodied in SCM Technical Information and which are reasonably
necessary for the manufacture, use or distribution of Licensed
Intel Products.
1.3 "Intel Technical Information" means technical product
documentation [* ] to be provided to SCM in accordance with
Section 2.4 below.
1.4 "SCM Technical Information" means the technical knowledge,
VHDL model(s), test programs and interface schematics for the
ISO 7816 interface and other semiconductor-related information
or documentation (but not software) to be provided to Intel in
accordance with Section 2.2 below.
1.5 [* ].
1.6 "Licensed Intel Products" means [* ] any other component,
module, board, or system-level product developed or
manufactured by or for Intel which incorporates or utilizes
SCM Technical Information.
1.7 "[* ] Specification" means any current or future
specifications for [* ] software that are published and
promulgated by PCMCIA.
1.8 "Licensed [* ] Software" means any software (in either source
code or object code form) which (1) is created and used
primarily to support or enhance the operations [*] devices;
(2) complies with the implements the [* ] Specification; and
(3) is owned by, or created by or for, either party to this
Agreement.
1.9 "Licensed Patents" means all issued utility patents and
utility models (1) which are applicable to Licensed [* ]
Software; and (2) which are owned by a party to this Agreement
or under which party to this Agreement has the right to grant
licenses of the scope granted herein, but only to the extent a
party is authorized to grant licenses without payment of
additional consideration to third parties.
1.10 "OEMs" means the original equipment manufacturers of computer
systems, computer motherboards or daughtercards, computer
add-in boards, wireless phones, PCMCIA cards, and any other
electronic devices (such as a digital cameras, printers,
digital audio recorders, etc.) that are connectable or can
directly transfer data to computer systems.
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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2.0 DEVELOPMENT EFFORTS
2.1 SCM Obligations. SCM shall use commercially reasonable efforts
to develop SCM Products. It is anticipated by the parties that
SCM Products will be available in the marketplace no later
than six (6) months after Intel's first customer shipment [*].
2.2 SCM Technical Information. SCM shall provide Intel with SCM
Technical Information.
2.3 Intel Obligations. Intel shall use commercially reasonable
efforts to [* ]. Intel will provide SCM with early visibility
into [* ].
2.4 Intel Technical Information. Intel shall provide SCM with
Intel Technical Information. SCM agrees to use Intel Technical
Information only as necessary in developing SCM Products. SCM
shall not authorize others to use the Intel Technical
Information for any purpose without Intel's prior written
consent.
3.0 OWNERSHIP AND IP DEVELOPMENT
3.1 SCM Ownership. SCM shall retain all right, title, and
ownership of its preexisting intellectual property, including
without limitation the VHDL model for ISO 7816 interface and
SCM Technical Information, and of any intellectual property
created solely by SCM personnel under this Agreement.
3.2 Intel Ownership. Intel shall retain all right, title, and
ownership of its preexisting intellectual property, including
without limitation [* ] Intel Technical Information, and of
any intellectual property created solely by Intel personnel
under this Agreement.
3.3 Joint Ownership and IP Protection. The parties do not
anticipate joint development of intellectual property. In the
event that such joint development occurs or is likely to
occur, the parties agree to negotiate appropriate terms and
conditions covering such joint intellectual property. It is
the expectation of the parties that jointly developed
intellectual property will be jointly owned and that either
party will be free to exploit such jointly owned intellectual
property without accounting to the other party.
4.0 LICENSES
4.1 SCM Grant to Intel. SCM hereby grants to Intel a perpetual,
nonexclusive, royalty-free, worldwide right and license, with
a limited right to sublicense as set forth in Section 4.2
below, under Licensed SCM IP to (i) make, have made, use,
import, offer to sell, sell and otherwise distribute Licensed
Intel Products; and (ii) to use,
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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reproduce, display, distribute, make derivative works of, or
to have used, have reproduced, have displayed, have
distributed and have derivative works made of SCM Technical
Information for the sole purposes of exercising the license
grant of Section 4.1(i) above.
4.2 Limited Right to Sublicense. SCM authorizes Intel to provide a
limited sublicense of the rights granted in Section 4.1[* ]
for the sole purpose of developing [* ] support (i.e.,
software hooks, drivers and software [* ]) for SCM Technical
Information; provided however, that such sublicense is
authorized under this Agreement only if the sublicense [* ]
is subject to an express prohibition against any further
sublicense of SCM Technical Information and contains
confidentiality obligations with regard to SCM Technical
Information which are no less restrictive than those set forth
in Section 6. In addition, if Intel desires to sublicense its
resellers or end users to prepare derivative works of, or
reproduce SCM Technical Information for the purpose of making,
having made, using, selling, offering for sale, importing or
otherwise distributing Licensed Intel Products, the parties
shall consult with regard to each desired sublicense and agree
to negotiate in good faith a separate sublicense agreement.
4.3 Patent Cross License. Each party hereby grants to the other a
perpetual, nonexclusive, nontransferable, worldwide license
under its respective Licensed Patents (but not copyrights,
trade secrets, trademarks, or maskworks) to make, to have
made, to use, to sell and offer to sell (either directly or
indirectly) Licensed [* ] Software; provided however, that
neither party has any right to sublicense, transfer or assign,
in whole or in part, any of its rights under this license
grant, whether by operation of law, implication, estoppel or
otherwise except as provided in this Section 4.3. The
prohibition against sublicensing above notwithstanding, each
party authorizes the other party to provide a limited
sublicense only to OEMs to use, reproduce, perform, display,
make derivative works of and distribute Licensed [* ]
Software; provided, however, that such sublicense is
authorized under this Agreement only if the sublicense to OEMs
is subject to an express prohibition against any further
sublicense of Licensed FTL Software by the OEMs.
4.4 No Other Licenses. All rights not expressly granted in this
Section 4.0 are reserved to the owner, and no other licenses
are granted herein, by implication, estoppel or otherwise.
5.0 MARKETING COOPERATION
5.1 Press Releases. Neither party shall issue any press release or
other public statement regarding this Agreement or any work
done or to be done hereunder by the other party without the
prior written consent of the other party. Notwithstanding the
foregoing,
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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SCM may announce that SCM has licensed [* ] smart card
reader/writer technologies to Intel, provided Intel reviews
and approves such SCM announcement prior to its release. SCM
agrees that Intel has the option, but not the obligation, to
include a quote from an Intel manager in such SCM
announcement.
5.2 Strategic Cooperation. Intel and SCM shall make reasonable
efforts to coordinate their positions regarding, and to
include each other in, any international or other industry
standardization efforts which may affect existing or
anticipated product lines which are the subject of this
Agreement.
5.3 No Representations. SCM shall make no warranties or
representations to any third party regarding the performance,
capabilities, or functionality of [* ] or Licensed
Intel Products without the prior written approval of Intel.
Intel shall make no warranties or representations to any third
party regarding the performance, capabilities, or
functionality of SCM Products without the prior written
approval of SCM.
5.4 Availability of SCM Product. SCM shall use reasonable efforts
to market, maintain, and support SCM Product. It is
anticipated that SCM Product will be made available to the
marketplace through multiple channels of distribution.
Notwithstanding the foregoing, SCM shall have the right, in
its sole and absolute discretion, to discontinue any SCM
Product.
5.5 Other Marketing Plans. Intel will acknowledge SCM's
participation in the collaborative development effort
contemplated under this Agreement, with the goal of
highlighting SCM as a technology leader in providing PCMCIA
data security solutions. The timing, content and logistics for
such acknowledgment to be mutually agreed. Intel and SCM also
agree to discuss other possible cooperative marketing,
promotion, or distribution opportunities as they may appear
desirable.
6.0 CONFIDENTIALITY
6.1 Agreement Confidential. Each party agrees not to disclose the
existence or content of this Agreement without the written
approval of the other party. If it reasonably appears that
this Agreement or any portion of it must be filed with any
public agency, then the filing party shall first notify the
other party, and the parties shall use reasonable efforts to
preserve the confidential nature of this Agreement.
6.2 Information. "Confidential Information" shall mean SCM
Technical Information, Intel Technical Information, or other
technical or business information of a party (the "Discloser")
which is disclosed to the other party (the "Recipient") and
which consists of source code in any medium, or is marked as
"Confidential" if first provided in
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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tangible form, or is identified as confidential at the time of
oral disclosure and is, within thirty days, identified in
writing as Confidential Information. Except to the extent
licensed to do so hereunder, Recipient shall not reveal,
disclose or distribute the Discloser's Confidential
Information and shall maintain in confidence, and not disclose
it to any person other than Recipient's employees and
full-time contractors bound to confidentiality and whose
duties require such access. These obligations of
confidentiality shall not apply to information which is shown
to be (i) available to the public other than by breach of this
Agreement by Recipient; (ii) rightfully received by Recipient
from a third party without breach of a duty to the Discloser;
(iii) independently developed by Recipient's employees without
access to the Confidential Information; or (iv) known to
Recipient prior to first receipt of same from Discloser.
6.3 Term of Confidentiality. The obligations of confidentiality
set forth herein shall extend for five (5) years from the date
of receipt of the Confidential Information.
Expiration of an obligation of confidentiality shall not be
deemed a license to any patent, trade secret, copyright or
maskwork hereunder.
6.4 No Restrictions on Employees. Receipt of Confidential
Information under this Agreement shall not create any
obligation in any way limiting, restricting, or prohibiting
the receiving party's assignment of employees or contractors.
6.5 Use of Residual Information. Each party shall be free to use
residuals of the Confidential Information for any purpose
including use in development, manufacture, promotion, sale and
maintenance of its products and services. The term "residuals"
as used herein means information in nontangible form retained
by persons who have access to such Confidential Information.
This provision grants no patent or copyright license.
6.6 Reverse Engineering. Except to the extent a party is entitled
to receive all trade secret information regarding a particular
technology hereunder, where software has been provided solely
in object code format, the recipient party shall not
disassemble, decompile or otherwise reverse engineer such
software.
7.0 REPRESENTATIONS AND WARRANTIES
7.1 Right to Contract. Each party represents and warrants to the
other that it has the right to enter into and perform this
Agreement and that it has not done any act or entered into any
agreement which prevents performance of this Agreement.
7.2 Right to Grant Licenses. SCM represents and warrants that it
has the right to grant the licenses it is granting under
Section 4.0 of this Agreement.
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7.3 SCM Disclaimer. Except as provided in Section 7.2, SCM makes
no warranty with respect to Licensed SCM IP and SCM Technical
Information. LICENSED SCM IP AND SCM TECHNICAL INFORMATION ARE
PROVIDED "AS IS". SCM SPECIFICALLY DISCLAIMS ANY WARRANTY,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, ANY WARRANTY
OF MERCHANTABILITY, NON-INFRINGEMENT OF INTELLECTUAL PROPERTY,
FITNESS FOR ANY PARTICULAR PURPOSE, OR ANY OTHER WARRANTY
OTHERWISE ARISING OUT OF ANY PROPOSAL, SPECIFICATION OR
SAMPLE.
7.4 Intel Disclaimer. Intel makes no warranty with respect to
Intel Technical Information. INTEL TECHNICAL INFORMATION IS
PROVIDED "AS IS". INTEL SPECIFICALLY DISCLAIMS ANY WARRANTY,
EXPRESS OR IMPLIED INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY
OF MERCHANTABILITY, NON-INFRINGEMENT OF INTELLECTUAL PROPERTY,
FITNESS FOR ANY PARTICULAR PURPOSE, OR ANY OTHER
WARRANTY OTHERWISE ARISING OUT OF ANY PROPOSAL,
SPECIFICATION OR SAMPLE.
8.0 INTELLECTUAL PROPERTY INDEMNIFICATION
8.1 Indemnity. SCM agrees to defend, indemnify, and hold Intel
harmless against any loss, cost liability and expense
(including reasonable attorney's fees) arising from any action
or claim brought or threatened against Intel or its customers
alleging that the ISO 7816 smart card interface design
("Design") infringes any patent, copyright, trade secret, or
other intellectual property right of any third party. Intel
agrees to provide SCM with (1) prompt written notice of such
claim or action, (2) the opportunity to participate in the
defense or settlement of such claim or action, and (3)
reasonable information and assistance in the defense and/or
settlement any such claim or action.
8.2 Limited Remedies. In the event the Design is held, or in
Intel's reasonable opinion, may be held to constitute such
infringement, SCM, at its expense, will either (1) obtain for
Intel or its customers the right to continue to use the Design
as contemplated herein, (2) modify the Design so that it
becomes non-infringing (without materially altering its
functionality, or (3) replace the Design with a functionality
equivalent non-infringing design.
8.3 Limitations. Notwithstanding the foregoing, SCM assumes no
liability for infringement claims arising from (1) combination
of the Design with other products not provided by SCM, but
which would not cover the use of the Design standing alone,
(2) any modification of such Design not made by or under the
authority of SCM, where such infringement would not have
occurred but for such modifications, (3) compliance by SCM
with Intel's detailed specifications, or (4) any sublicense
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granted pursuant to Section 4.2, where such infringement would
not have occurred but for the circumstances arising out of
such sublicense.
8.4 Sole remedy. The foregoing states the entire obligation and
exclusive remedy with respect to any alleged intellectual
property infringement.
9.0 PURCHASING AND CROSS DISTRIBUTION
9.1 SCM's Purchase of Intel Products. SCM will purchase [* ] under
Intel's standard terms and conditions of sale, at prices which
are no less favorable to SCM than the average of the three
lowest prices [* ] sold by Intel to third parties during the
same calendar quarter for similar volumes. Intel Products
purchased by SCM shall be subject to Intel's standard
commercial warranty and intellectual property indemnification
provisions.
9.2 SCM Products. Intel may, upon its request, become a reseller
of SCM Products under reasonable terms and conditions to be
negotiated by the parties.
9.3 Terms and Conditions. Any purchase, distribution or resale
under this Section 9.0 shall be done pursuant to a separate
agreement to be negotiated by the parties.
10.0 EXPENSES
Each party shall invest in its own research and development efforts and
shall be responsible for its own expenses pursuant to the activities
contemplated under this Agreement.
11.0 OTHER LICENSES
Within ninety (90) days after the Effective Date, the parties agree to
enter into, and use good faith efforts to complete, negotiations
concerning the nonexclusive licensing [* ] to SCM under terms and
conditions to be negotiated.
12.0 TERM AND TERMINATION
12.1 Term. The initial term of this Agreement shall continue to be
three (3) years from the Effective Date, and may be renewed
thereafter for successive terms of one (1) year unless, two
(2) months prior to the expiration of the initial term or any
successor term, a party gives written notice that it desires
the Agreement to terminate as of the end of such term.
12.2 Breach. Either party may terminate this Agreement if the
other: (a) files or has filed against it a petition in
bankruptcy which it is not contesting in good faith; (b) has a
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
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receiver appointed to handle its assets or affairs which it is
not contesting in good faith; or (c) makes or attempts to make
an assignment for benefit of creditors.
12.3 Survival. The following provisions and licenses shall survive
termination or expiration of this Agreement: Sections
(including any subsections) 1.0, 3.0, 4.0, 6.0, 7.0, 8.0,
10.0, 12.0, 13.0, and 14.0.
12.4 Survival of End-User Licenses. Where Intel has properly
granted an end-user a license, directly or indirectly, to use
Licensed Intel Products, the license to such end-user shall
survive notwithstanding the expiration or termination Intel's
right to grant further licenses to such technology.
13.0 GENERAL TERMS AND CONDITIONS
13.1 Independent Pricing. Pricing of any Licensed Intel Products
marketed and distributed by Intel or SCM Products marketed and
distributed by SCM will be at each party's sole discretion.
13.2 Export Restrictions. In the event any product is exported from
the United States or re-exported from a foreign destination by
either party, that party shall ensure that the distribution
and export/re-export of product is in compliance with all
laws, regulations, orders, or other restrictions of the U.S.
Export Administration Regulations. Both parties agree that
neither it nor any of its subsidiaries will export/re-export
any technical data, process, product, or service, directly or
indirectly, to any country for which the United States
government or any agency thereof requires an export license,
other governmental approval, or letter of assurance, without
first obtaining such license, approval or letter.
13.3 Notices and Requests. All notices, agreements and requests
under this Agreement shall be in writing and will reference
this Agreement, and will be deemed given upon delivery if
personally delivered or upon receipt if sent by registered or
certified mail, postage prepaid, return receipt requested, to
the addresses listed below, which addresses may be modified
upon subsequent written notice.
Notices to Intel: Notices to SCM:
Intel Corporation SCM Microsystems, Inc.
Attn: Legal Department Attn: Chief Executive Officer
M/S: CH6-404 000 Xxxxxxxx Xxx
0000 X. Xxxxxxxx Xxxx. Xxx Xxxxx, XX 00000
Xxxxxxxx, XX 00000
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13.4 Limitation of Liability. NEITHER PARTY SHALL HAVE ANY
LIABILITY TO THE OTHER PARTY BASED ON FAILURE TO ULTIMATELY
DEVELOP OR MARKET THE PRODUCTS OR TO CONSUMMATE THE ACTIVITIES
ENVISIONED HEREIN. IN NO EVENT SHALL EITHER PARTY HAVE ANY
LIABILITY TO THE OTHER ON ANY CAUSE OF ACTION RELATING TO THE
AGREEMENT FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL, LOSS OF PROFIT OR LOST OPPORTUNITY DAMAGES,
HOWEVER CAUSED, WHETHER OR NOT THE PARTY HAS ADVANCE NOTICE OF
THE POSSIBILITY OF SUCH DAMAGES. The parties acknowledge that
this limitation on potential liabilities is an essential
element in reaching the Agreement.
13.5 Evaluation and Independent Development. This Agreement does
not preclude Intel or SCM from evaluating, acquiring from
third parties not a party to this Agreement, independently
developing, or marketing similar products, or making and
entering into similar arrangements with other companies.
13.6 Assignment. Neither party may, by operation of law or
otherwise, assign any rights or obligations hereunder without
the prior written consent of the other party, which consent
may be withheld in a party's sole and absolute discretion. Any
attempt to assign any rights or obligations hereunder without
the other party's written consent will be voidable by the
other party.
13.7 Relationship Of Parties. Both parties are independent
contractors. Neither party will have the authority to act for
and or bind the other in any way, or to represent that either
is responsible for the acts of the other. Nothing herein will
be construed as forming a partnership or agency between the
parties.
14.0 INTERPRETATION, ENFORCEMENT AND LAW
14.1 Interpretation. The Section titles in this Agreement are
provided for convenience only and shall not affect the meaning
or interpretation of any term of this Agreement. A reference
to a Section shall be deemed a reference to all Sub-Sections
within the Section.
14.2 Disputes. In the event of any dispute between the parties,
Intel and SCM shall use good-faith efforts to resolve any
disagreement regarding the dispute inducing, as the parties
may deem appropriate, meetings between senior executives of
the parties, or other agreeable means. If such efforts are
unsuccessful, either party may initiate litigation
proceedings.
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14.3 Governing Law. This Agreement shall be governed by the laws of
the state of California, excluding its conflicts of law
provisions.
14.4 Future Majeure. Neither party will be liable for any failure
to perform due to unforeseen circumstances or causes beyond
the parties' reasonable control, including, but not limited
to, earthquakes, acts of God, war, riot embargoes, acts of
civil or military authorities, fire, flood, accident, strikes,
or inability to secure transportation, facilities, fuel,
energy, labor or materials. Time for performance will be
extended by the amount of any such delay.
14.5 Remedies. All rights and remedies, legal or equitable, whether
conferred hereunder, or by any other instrument or law will be
cumulative and may be exercised singularly or concurrently.
Failure by either party to enforce any term will not be deemed
a waiver of future enforcement of that or any other term.
14.6 Severable Provisions. If a court of competent jurisdiction
holds a provision of this Agreement to be invalid or
unenforceable, the other provisions of this Agreement shall
remain in full force and effect.
14.7 Merger and Modification. The terms and conditions set forth in
this Agreement, including the Recitals, constitute the entire
understanding and agreement between the parties with respect
to the subject matter hereof and supersede all prior and
contemporaneous agreements, understandings, negotiations and
discussions.
AGREED:
SCM Microsystems, Inc. Intel Corporation
By: By:
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Name: Name:
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Title: Title:
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Date: Date:
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