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EXHIBIT 10.23
[logo] SCM
MICROSYSTEMS
COOPERATION CONTRACT
between
SCM Microsystems GmbH
Xxxxxxxxxxxxxxx 0
00000 Xxxxxxxxxxxx
- hereinafter referred to as SCM -
and
STOCKO Metallwarenfabriken
Xxxxxxx und Xxxx GmbH & Co
Xxxxxxxxxxxxx 00
00000 Xxxxxxxxx (Vohwinkel)
- hereinafter referred to as STOCKO -
PREAMBLE
SCM has extensive know-how and experience in the area of the development and
manufacture and the distribution of electronic devices, computer hardware and
software, as well as silicon, particularly in the area of PCMCIA cards
(so-called PC, Smart or Chip Cards).
STOCKO has extensive know-how in the area of the development, manufacture and
distribution of housing, connectors and mechanical requirements for electronic
devices.
SCM and Stocko have extensive customer contacts in the area of PCMCIA and Smart
Card technology (such as, for example, national telecom companies, manufactures
of electronic components, etc.). SCM is also a member of industrial consortia
which deal with future applications of this technology.
1. PURPOSE
The purpose of this contract is the joint research and development of reader
devices on the basis of PCMCIA housings for Smart Cards and other modules for
an undetermined number of already existing and future applications (for
example, Pay TV, DVB, DAB, banking, online services, patient cards, etc.) and
the joint exploitation of the research and development results.
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2. DEFINITIONS
The following terms shall have the following meanings:
o Research and development: Acquisition of technical knowledge,
theoretical and practical analyzes, tests, including the test
manufacture and testing of products and processes, the establishment
of the installations and facilities necessary therefor.
o Contract processes: Processes which arise from research and
development.
o Contract products: Products or services which arise from research and
development or are manufactured or rendered using the contract
processes; parts of such goods or services shall also be deemed to
constitute contracts products.
o Results of research and development: Industrial property rights and
know-how which contribute substantially to technical and economic
progress and which are critical for the manufacture of contract
products or the application of the contract processes.
o Exploitation of the products: Manufacture of contract products and
use of the contract processes, assignment of industrial property
rights, issuance of manufacturing and/or use licenses to said rights
and the dissemination of know-how with the goal of permitting such
manufacture or use. However, the term "exploitation" shall not
include the distribution of the contracts products.
o Technical knowledge: Knowledge of which an industrial property right
exists or which is not obvious (know-how).
3. JOINT RESEARCH AND DEVELOPMENT
3.1 DEVELOPMENT PROGRAM AND GOAL
It is intended that the joint research and development be carried out in the
area of reader devices for Smart Cards and other reader devices in the form of
a PCMCIA card or combined solutions and that said joint research and
development pursue the goal of bringing customer-specific and standard products
to serial readiness. SCM's contribution shall be the overall concept and the
development of electronic components and software; Stocko's contribution shall
be the entire housing mechanics, including connectors.
Development work shall not begin until each contracting party has signed the
respective project plan set forth in appendix 1. Research and development
shall be divided between the contracting parties on the basis of their
respective specialization in such a manner that the contracting parties perform
the development work independently and at their own expense and risk in
accordance with the project plan and in accordance with their receptive
know-how; in each instance, STOCKO shall be responsible for the development of
housings and connectors and for the mechanical requirements and assembly
technology of the reader device, SCM shall be in charge of the development of
hardware, software and, if applicable, silicon, as well as for the test
procedures and test software for service fabrication.
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3.2 DEVELOPMENT PROJECTS
3.2.1 CUSTOMER-SPECIFIC DEVELOPMENT PROJECTS
The details concerning the respective specific customer-specific development
project shall be agreed upon between the contracting party who acquires the
order and the respective contractor or purchaser; the other contracting party
shall be included in the negotiations with the contractor as early as possible
and to the extent necessary. A duty to provide complete information shall
exist between the contracting parties.
Following the conclusion of, and in accordance with, the negotiations with the
respective contractor or purchaser, the contracting parties shall create
precise project plans for each development project in accordance with the model
attached as appendix 1 to this contract; said plan shall define the technical
specifications for the reader device which is to be developed--any licenses for
the proprietary rights of third parties which must be acquired in connection
with the development project, other technical details, scheduling, including
the setting of milestones, testing parameters for prototypes, key financial
data, including the projected development cost through serial readiness, as
well as the intended return on investment (Rol), etc.--for the respective
development project. The individual project plans shall be binding upon the
contracting parties and shall, in each instance, constitute a component of this
contract.
3.2.2 DEVELOPMENT PROJECTS FOR STANDARD PRODUCTS
For each development project for standard products, the contracting parties
shall jointly create a precise project plan in accordance with appendix 1,
which shall be binding upon the contracting parties, and shall in each
instance, constitute a component of this contract.
3.4 PROTOTYPES
Following the successful conclusion of the respective development work, the
contracting parties shall jointly manufacture the number of prototypes
established in the project plan, test them with the help of the specification
and release them following successful testing. The delivery of prototypes to
the contractor or purchaser can only take place following release by the two
contracting parties.
3.5 COMPETITIVE RESTRICTION
During the implementation of the program, no contracting party may conclude
agreements concerning research and development in the program area, or in an
area closely related thereto, with third parties which are in competition with
the other contracting party, unless the other contracting party consents
thereto in writing.
3.6 RESULTS OF RESEARCH AND DEVELOPMENT
All rights to the results of the respective development work, including the
right to apply for relevant industrial property rights, shall be held by the
contracting party in whose purview the development work was performed and which
is responsible for the development. Industrial property rights for joint
inventions shall be applied for jointly. However, all results of joint
research and development shall be accessible to both contracting parties.
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4. JOINT EXPLOITATION OF THE RESULTS
The results of joint research and development shall be exploited by the
contracting parties jointly in such a manner that the manufacture of the
contract products and the application of the contract processes is divided
among the contracting parties in such a manner that STOCKO manufactures the
housing and connectors, and SCM manufactures the electronics, hardware,
software and, if applicable, silicon. Each contracting party shall be solely
responsible for the contract products which it manufactures and shall release
the other contracting party from any and all claims of third parties in this
connection.
Each contracting party shall supply the other with the other with the contract
products which it manufactures.
If one of the contracting parties suspends production of the contract products
which it is manufacturing in connection with this contract, the other
contracting party shall be entitled to take over manufacturing. If the other
contracting party has no interest in doing so, the contracting parties shall
assign the manufacturing to a third-party enterprise. The contracting party
which suspends production shall grant all manufacturing and/or use licenses
necessary for manufacture by the other contracting party or a third-party
enterprise.
The additional issuance of manufacturing and/or use licenses to industrial
property rights (to outside third parties) held individually or jointly by the
contracting parties shall be possible at any time by mutual agreement.
5. DELIVERY OBLIGATIONS/PURCHASE OBLIGATIONS OF THE CONTRACTING PARTIES
Each contracting party shall fill orders of the other contracting party for
delivery of contract products which it manufactures; they shall do so on the
basis of individual orders in which delivery quantities, delivery times, prices
and other terms and conditions are defined.
The contracting parties shall be obligated to purchase contract products
exclusively from the contracting partner, joint installations or enterprises or
third-party facilities or enterprises which are jointly entrusted with
manufacture.
Joint or third-party enterprises which are entrusted with the manufacture of
contract products shall be obligated to supply said products exclusively to the
contracting parties.
6. TERRITORY RESERVATIONS
6.1 TERRITORIES
The territory of the U.S. and Japan shall be [handwritten interlinear
insertion:] non-exclusively reserved for SCM. The contracting parties may also
reserve territories within the European Union by mutual written agreement.
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6.2 MANUFACTURE
The manufacture of contract products and/or the use of contract processes in
[crossed out text] a territory reserved for one of the contracting parties
shall require an agreement between the contracting parties.
6.3 DISTRIBUTION
6.3.1 OUTSIDE OF THE EUROPEAN UNION
If a territory outside of the European Union is reserved for one of the
contracting parties, the other contracting party may distribute contract
products there only with the prior written consent of the former.
6.3.2 WITHIN THE TERRITORY OF THE EUROPEAN UNION
If middlemen and consumers are able to acquire the contract products from other
suppliers as well, neither of the contracting parties may conduct an active
distribution policy in the territory which is reserved for the other
contracting party for a period of five years from the date of the first
marketing of the contract products in the European Union; specifically, they
may not engage in specifically focused advertising in such territory, establish
any branch focused on the contract products or maintain a supply warehouse
there.
However, neither contracting party may, without an objectively justified
reason, refuse orders from consumers and resellers which are established in its
territory and wish to market the contract products in other parts of the
European Union; neither contracting may make it difficult for the consumers or
middlemen to purchase the contract products from other resellers or the
marketing of the contract products within the European Union.
After the end of the aforementioned five-year period, neither contracting party
shall be prevented from marketing the contract products in the territory of the
European Union which is reserved for the other contracting party or engaging in
an active distribution policy there with respect to such products.
7. NO QUANTITY, PRICE AND CUSTOMER RESTRICTIONS
If a contracting party is permitted to manufacture the contract products and/or
use the contract processes, that party shall not be restricted from determining
the quantity of contract products to be manufactured or sold and the number of
acts of use with respect to the contract processes, setting the prices, price
components or discounts for the contract objects or selecting its customers.
If it turns out that certain sales projects which arise from the business
activity of a contracting party in individual countries and/or regions cannot
be successfully concluded by that party alone, the contracting parties shall
jointly establish a strategy which ensures the respective project and leads it
to success.
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8. LICENSING OF KNOWLEDGE AND EXCHANGE OF EXPERIENCE
The contracting parties shall reasonably support one another to the extent
necessary. In this connection, the parties shall mutually grant one another
non-exclusive licenses for protected or technical knowledge which is necessary
in order to implement the program and manufacture the contract products or use
the contract process.
The contracting parties shall inform one another of their experiences in the
manufacturing of the contract products and in the use of the contract processes
and shall mutually grant one another non-exclusive no-fee licenses to
improvement and application inventions.
9. CONFIDENTIALITY
Neither contracting party may use the know-how of the other contracting party
for purposes other than the implementation of the program and the use of the
results.
The contracting parties shall preserve the confidential nature of the know-how
which they convey to one another or which arises in the course of the
implementation of the program; this obligation shall remain in effect following
the expiration of this agreement.
The exchange of such confidential information shall be made in each instance on
the basis of a confidentiality agreement to be concluded separately for each
development product in accordance with the model attached as appendix 2 to this
contract.
10. REGISTRATION AND MAINTENANCE OF THE INDUSTRIAL PROPERTY RIGHTS
The contracting parties shall be obligated to create and maintain industrial
property rights for the contracts products or processes to the extent legally
possible; this shall also apply to joint proprietary rights as well as
industrial property rights to which one of the contracting parties is entitled.
Each contracting party shall inform the other concerning infringements of joint
proprietary rights and the industrial property rights of a contracting partner.
The contracting party which discovers the infringement of joint industrial
property rights may initiate legal action against the infringer and demand that
the other contracting party support it in the judicial proceeding and share in
the cost.
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11. ATTACK UPON INDUSTRIAL PROPERTY RIGHTS
During the implementation of the research and development program, neither
contracting party may attack industrial property rights of the other
contracting party which are connected with the implementation of the program.
During the term of this agreement, neither contracting party may attack
industrial property rights which are held individually by the other contracting
partner, held jointly by the contracting parties or which protect the results
of the research and development.
12. COMPENSATION
Compensation which the contracting parties receive from third-party enterprises
for the transfer or licensing of joint commercial rights or know-how in
connection with the exploitation of research and development results shall be
divided between them on a pro rata basis in accordance with their respective
contribution to development. A contracting party shall be exclusively entitled
to compensation which it receives from third-party enterprises for the transfer
or licensing--entered into by mutual agreement with the other contracting
party--of its commercial rights or know-how in connection with the exploitation
of research and development results.
Any inequality in the contributions of the contracting parties to the joint
research and development shall be reflected in the setting of the prices for
the contract products to be purchased from the other contracting partner. If
the contracting partners exploit the results unequally, this shall be settled
by means of compensation to be negotiated between the contracting parties.
13. CONTRACT TERM
This contract shall take effect when signed by the two contracting parties. It
shall be concluded for an indefinite term and may be terminated in writing by
either contracting party upon compliance with a notice period of six (6)
months--however, said termination may not be noticed earlier than June 30,
2000, effective December 31, 2000. The provisions concerning confidentiality,
rights to the development results, manufacturing and distribution shall remain
in effect following the end of the contract until they expire in accordance
with their purpose and intent. The right to extraordinary termination shall
remain unaffected.
14. MISCELLANEOUS CONTRACT TERMS
An assignment of rights and/or delegation of duties arising from this contract
shall be effective only with the prior written consent of the other contracting
party.
Each contracting party shall remain an independent entrepreneur which is
responsible only for its own acts. This agreement shall establish no corporate
law relationship between the contracting parties.
The law of the Federal Republic of Germany shall apply. The exclusive place of
venue for all disputes arising from this contract and the performance thereof
shall be in Munich.
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If a provision of this contract or a portion of a provision is or should become
invalid, the remaining provisions of the contract or the remaining portion of
the provision shall remain valid. In lieu of the invalid provision or portion
thereof, the contracting parties shall agree upon a valid provision which comes
as close as possible to the economic content of the invalid provision or
invalid portion of a provision.
Neither contracting party may communicate the existence or the content of this
contract to third parties or the general public without the prior written
consent of the other contracting party. This obligation shall also remain in
effect after the end of this contract.
This contract contains all agreements between the contracting party relating to
the subject matter of the contract; no collateral agreements exist.
Modifications of or addenda to this contract must be in writing and must be
signed by both contracting parties.
Wuppertal, 3/25/96 Pfaffenhofen, 2/23/96
[stamp]
SCM
MICROSYSTEMS
SCM Microsystems GmbH
Xxxxxxxxxxxxxxx 0 . 00000 Xxxxxxxxxxxx
Tel. 03441/896 - 0 . Fax 08441/8 28 84
[signature] [signature]
---------------------------------- --------------------------------------
STOCKO Metallwarenfabriken SCM Microsystems GmbH
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