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Exhibit 10.1 OEM CD Smart Card Agreement dated June 29, 1999, between iOra
Limited and DXP New Media Services Limited
DATED 29th June 1999
iOra Ltd
('Supplier') (1)
DXP New Media Services Limited
('DXP') (2)
OEM
CD SMART CARD
AGREEMENT
12
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OEM CD SMART CARD AGREEMENT
THIS AGREEMENT is made the 29th day of June, 1999
BETWEEN
(1) IORA LTD a company incorporated in England (registered number 3445693) whose
registered office is situated at Meadlands Broad Layings, Woolton Hill,
Newbury, Berks RG20 9TT (the "Supplier").
(2) DXP NEW MEDIA SERVICES LIMITED a company incorporated in England (company
number 03732349) and having its registered office at 7 Willow Court, Bourton
Industrial Park, Bourton on the Water, Cheltenham, Gloucestershire GL54 2HQ
(the "DXP")
RECITALS:
(A) The Supplier is the developer and owner of a software product known as
"SoftCD", which software consists of two components, namely SoftCD Client
and SoftCD Publisher.
(B) DXP is a provider of multimedia services and products including a product
known as the CD Smart Card which it intends to manufacture, market and
distribute to a variety of business users.
(C) DXP has entered into an OEM Partnership Agreement with the Supplier to
market, sell and deliver SoftCD to End Users on any storage media excluding
CD Smart Cards.
(D) DXP intends to incorporate the said SoftCD Client into the CD Smart Card for
distribution to potential customers.
(E) The parties wish to enter into a further agreement on the following terms.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
In this Agreement (which expression shall be deemed to include the Schedules
hereto), unless the context otherwise requires, the following expressions
have the following meanings:
"Commencement Date" means the date of this Agreement;
"Combined Product" shall have the meaning given to it in clause 2.l(a);
"End User" means a customer or prospective customer for the Combined Product
who purchases the Combined Product for use other than for resale including
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without limit for promotional purposes and shall include recipients of the
Combined Product authorised by such customer to use the Combined Product;
"Intellectual Property Rights" means patents, trade marks, service marks,
registered designs, applications for any of the foregoing, copyright, design
rights, know-how, confidential information, trade and business names and any
other similar protected rights in any country;
"CD Smart Card" means the product known as CD Smart Card developed and
distributed by DXP in business card sizes measuring approximately 3" x 2"
(and including any size within 20% of these dimensions) manufactured
utilising CD Technology and with a storage capacity of up to and including
40MB;
"OEM Partnership Agreement" means an agreement made between the same parties
as this agreement which covers the rights of DXP to market, sell and deliver
SoftCD to End Users on any storage media other than CD Smart Cards;
"SoftCD" means the software product known as SoftCD developed and
distributed by the Supplier, including SoftCD Publisher and SoftCD Client
software; 'SoftCD Publication' means a CD Smart Card or a directory thereon,
which is updated using SoftCD. 'SoftCD Amendments' mean a set of files that
represent the differences between two versions of a Publication with
different content, produced by SoftCD Publisher.
"Sub-License" means the form of agreement which grants the End User the
right and license to use the SoftCD Client, as incorporated within the
version for the time being of SoftCD Client;
"The Territory" means the world;
"Year" means any period of 12 months commencing on the Commencement Date or
any anniversary of the Commencement Date.
2. GRANT OF RIGHTS
2.1 The Supplier grants to DXP the following rights:
(a) the right to incorporate SoftCD Client into CD Smart Card so as
to create the Combined Product;
(b) the right to market, sell and deliver Combined Product to End
Users in the Territory;
(c) the non-exclusive right to copy and distribute copies of SoftCD
Client to End Users (and to carry out other restricted acts in
relation to SoftCD Client for the purposes of exercising the
rights granted in clauses 2.1 (a) and (b));
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(d) the right to grant sub-licenses to End Users in the Territory on
the terms of the Sub-License;
(e) the right to use SoftCD Publisher for the purpose of producing
an unlimited number of Amendments to an unlimited number of
Publications which have been produced on CD Smart Cards pursuant
to the terms of this Agreement for or on behalf of End Users;
such Amendments may be distributed to those to whom CD Smart
Cards incorporating SoftCD Client have been distributed under
the terms of this Agreement; subject thereto, use of SoftCD
Publisher is permitted on the terms of the Supplier's standard
license for the use thereof.
2.2 The Supplier shall at DXP's request enter into a Source Code
Escrow Agreement in terms to be agreed between the parties, pursuant to
which the Supplier will at the sole cost of DXP place a copy of the
source code to the SoftCD into escrow with an escrow agent reasonably
specified by DXP, for the continuance of this Agreement.
2.3 DXP represents and warrants to the Supplier that it has the necessary
ability and experience to carry out the obligations assumed by it under
this Agreement and that by virtue of entering into this Agreement it is
not and will not be in breach of any express or implied contractual
obligation to any third party binding upon it.
3. DURATION
This Agreement shall commence on the Commencement Date and shall
continue thereafter unless terminated under Clause 13.
4. EXCLUSIVITY
4.1 DXP agrees, for so long as the period of exclusivity referred to in
clause 4.2 continues to promote SoftCD for incorporation of SoftCD
Client into all CD Smart Cards to be produced by DXP for End Users and,
except in cases where the End User expressly refuses for any reason to
incorporate of SoftCD Client, to incorporate SoftCD Client into all CD
Smart Cards produced for End Users.
4.2 *
5. PAYMENT
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and are filed separately with the Securities and Exchange Commission.
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5.1 *
5.2 In the event that DXP for reasons of time or manufacturing capacity
cannot deliver the Combined Product on a CD Smart Card, and where the
storage capacity of the content to be delivered does not exceed that of
the CD Smart Card, and the exclusivity in clause 4.2 continues, and the
end user application meets the criteria for an 'Agreed Promotional
Project' as defined in the OEM Partnership Agreement, then the payment
to the Supplier payable under the terms of the OEM Partnership
Agreement shall be the same as the payment that would have been due if
CD Smart Cards were used under the terms of this Agreement, subject to
a minimum payment to the Supplier of (pound)2500 (net of any OEM
Discount) for the project. Approval of a project as an 'Agreed
Promotional Project' as defined in the OEM Partnership agreement is not
to be unreasonably withheld by the Supplier.
5.3 In the event that DXP is tendering for a specific client in direct
competition with another OEM partner of the Supplier who could deliver
an equivalent solution using SoftCD on a storage media acceptable to
the End User, then the amount payable to the Supplier by DXP must be no
less than the amount payable by the other OEM partner to the Supplier
for the equivalent software. For the avoidance of doubt, this clause
shall not apply where the End User requires the Combined Product and
the OEM partner shall deliver the solution using the Combined Product.
5.4 DXP will report to the Supplier within 30 days from the end of each
calendar quarter (the first calendar quarter commencing on the first
day of the month following the Commencement Date) as to the quantity of
CD Smart Cards which DXP has contracted to sell during the previous
quarter and will pay the royalties due for the said quarter within a
further period of 30 days.
5.5 *
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and are filed separately with the Securities and Exchange Commission.
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5.6 For the avoidance of doubt, the royalty arrangements contained in this
clause 5 shall constitute the entire royalty arrangement between the
parties in relation to the Combined Product and no additional amounts
shall be payable. In the event that an End User wishes to use SoftCD
Publisher for the purpose of producing its own Amendments, the royalty
arrangement for the SoftCD Publisher license shall be the subject of a
separate agreement between the Supplier and DXP.
5.7 In the event of late payment: the Supplier may charge interest on all
sums overdue at the rate of 2 per cent per month (or at the maximum
amount permitted under any applicable law, if less), compounded monthly
from the due date until payment.
6. INSPECTION AND AUDIT
6.1 DXP shall keep complete and accurate books and records with respect to
this Agreement in order to determine accurately the amount owed to the
Supplier hereunder. DXP shall preserve such records for at least two
years after the termination of this Agreement.
6.2 The Supplier shall have the right during the term of this Agreement and
within two years thereafter, to appoint a Chartered Accountant to
inspect audit and take copies or extracts from such books and records
of DXP upon reasonable prior notice during normal business hours at
DXP's offices, for the purpose of verifying the accuracy of the
statements provided to the Supplier under this Agreement. DXP agrees to
provide such Chartered Accountant with such assistance cooperation and
further information as the Chartered Accountant may reasonably require
for such purpose.
6.3 If such inspection reveals that DXP's payments were less than the
amount, which should have been paid, then DXP shall pay to the Supplier
any sums shown to be due together with interest thereon calculated on
the basis that such sums fell due on the date on which they should have
been declared to the Supplier.
6.4 In the event of an inspection revealing an error in excess of 5% of the
total sums accrued due during the period for which such inspection and
audit was made DXP shall pay to the Supplier all the costs of such
audit and inspection upon receipt of an appropriate invoice justifying
the costs. Otherwise, the Supplier will pay all the costs of the audit
and inspection.
7. TRAINING
The Supplier shall provide reasonable training in the use, installation
and maintenance of SoftCD for DXP's personnel as agreed between the
parties.
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8. DISTRIBUTOR'S OBLIGATIONS
8.1 DXP shall:
(a) use its reasonable endeavors to promote and extend the sale of
the Combined Products throughout the Territory;
(b) at all times maintain adequate demonstration facilities for the
Combined Products;
(c) use the Supplier's trade marks and trade names relating to the
Combined Products only in the registered or agreed style in
connection with the marketing and sale of the Products.
(d) provide direct support of SoftCD Client to all End Users, and
shall not require that the Supplier do so.
9. SUPPLIER'S OBLIGATIONS
9.1 The Supplier shall:
(a) provide DXP with such marketing and technical assistance as DXP may
consider reasonably necessary to assist DXP with the promotion of
the Products;
(b) provide second line support to DXP in respect of SoftCD by
telephone and email during the Supplier's normal working hours.
(c) endeavor to answer to DXP as soon as reasonably practicable all
technical queries raised by DXP or its customers concerning the use
or application of SoftCD;
(d) provide DXP with adequate quantities of instruction manuals,
technical and promotional literature and other information relating
to SoftCD, at cost;
(e) provide to DXP for inclusion in the Combined Products any updates
or enhancements (excluding any optional features offered at
additional cost) to SoftCD Client on the terms of this Agreement
and agree a price for optional features with DXP that is no greater
than the Supplier's standard list price for those optional
features.
(f) provide DXP promptly with all information and assistance necessary
to enable DXP properly to perform its obligations hereunder in
respect of any such modified or enhanced version of SoftCD.
10. INTELLECTUAL PROPERTY RIGHTS
Nothing in this Agreement shall operate to transfer any intellectual
property rights in or relating to SoftCD or the CD Smart Card.
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11. NOTICES ON SOFTWARE PRODUCTS
DXP shall ensure that all copies of all products incorporating SoftCD
Client which are sold to customers shall include an acknowledgement in
the closing titles relating to SoftCD Client, the Supplier and the
Supplier's web site address
12. CONFIDENTIALITY
12.1 Neither party shall use or divulge or communicate to any person
(other than those whose province it is to know the same or as permitted
or contemplated by this Agreement or with the written authority of the
other party or as may be required by law):
(a) any confidential information concerning the products, customers,
business, accounts, finance or contractual arrangements or other
dealings, transactions or affairs of the other party and its
subsidiaries which may come to the first party's knowledge during
the continuance of this Agreement; or
(b) any of the terms of this Agreement;
and each party shall use its best endeavors (i) to prevent the
unauthorized publication or disclosure of any such information or
documents and (ii) to ensure that any person to whom such information
or documents are disclosed by such party is aware that the same is
confidential to the other party.
12.2 Each party shall ensure that its employees are aware of and comply
with the confidentiality and non-disclosure provisions contained in
this Clause and shall indemnify the other party against any loss or
damage which the other may sustain or incur as a result of any breach
of confidence by any of such party's employees.
12.3 If either party becomes aware of any breach of confidence by any
of its employees it shall promptly notify the other party and give the
other party all reasonable assistance in connection with any
proceedings, which the other party may institute against any such
employees.
12.4 The provisions of this Clause shall survive the termination of
this Agreement but the restrictions contained in sub-clause (1) shall
cease to apply to any information which may come into the public domain
otherwise than through unauthorized disclosure by the receiving party
or its employees.
13. TERMINATION
13.1 Notwithstanding anything else contained herein, this Agreement may
be terminated by either party forthwith on giving notice in writing to
the other if:
(a) the other party commits any material or persistent breach of any
term of this Agreement and (in the case of a breach capable of
being remedied) shall have failed, within 30 days after the
receipt of a request in writing from the other party so to do, to
remedy the breach (such request to contain a warning of such
party's intention to terminate);
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(b) the other party shall have a receiver or administrative receiver
appointed of it or over any part of its undertaking or assets or
shall pass a resolution for winding up (otherwise than for the
purpose of a bona fide scheme of solvent amalgamation or
reconstruction) or a court of competent jurisdiction shall make
an order to that effect or if the other party shall enter into
any voluntary arrangement with its creditors or shall become
subject to an administration order.
(c) DXP shall not be entitled to any compensation or indemnity
(whether for loss of distribution rights, goodwill or otherwise)
as a result of the termination of this Agreement in accordance
with its terms.
14. EFFECT OF TERMINATION
On the termination of this Agreement in accordance with the preceding
clause all the rights and obligations of the parties under this
Agreement shall automatically terminate except:
(a) for such rights of action as shall have accrued prior to such
termination and any obligations which expressly or by implication
are intended to come into or continue in force on or after such
termination;
(b) DXP shall be entitled to sell any of its stocks of the Combined
Products which have been fully paid for and which are required to
fulfil any unperformed contracts of DXP outstanding at the date
of termination (and to that extent and for that purpose the
provisions of this Agreement shall continue in effect);
(c) End Users who have purchased and/or received a Combined Product
prior to termination or in cases falling within clause 13(b)
shall be permitted to continue using SoftCD Client on the terms
of the Sub-License and the license to DXP in clause 2.1(d) shall
continue for this purpose only.
15. LIABILITY
15.1 The Supplier warrants to DXP that it is entitled to grant the
rights granted under this Agreement and that use of SoftCD Client in
accordance with the Agreement will not infringe the rights of any third
party.
16. WAIVER OF REMEDIES
No forbearance, delay or indulgence by either party in enforcing the
provisions of this Agreement shall prejudice or restrict the rights of
that party nor shall any waiver of its rights operate as a waiver of
any subsequent breach and no right, power or remedy herein conferred
upon or reserved for either party is exclusive of any other right,
power or remedy available to that party and each such right, power or
remedy shall be cumulative.
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17. INDEMNITIES
The Supplier shall indemnify DXP and keep DXP fully and effectively
indemnified against any and all losses, claims, damages, costs,
charges, expenses, liabilities, demands, proceedings and actions which
DXP may sustain or incur or which may be brought or established against
it by any person and which in any case arise out of or in relation to
or by reason of any claim or allegation that any of SoftCD Client
infringes any intellectual property rights of any third party.
and which are not due to DXP's negligence, recklessness or willful
misconduct or any breach of its obligations under this Agreement. It is
acknowledged that it is DXP's responsibility to ensure that SoftCD
Client is not distributed in any jurisdiction within the Territory
unless it complies with local laws and regulations relating to its sale
and use therein.
17.1 DXP shall indemnify the Supplier and keep the Supplier fully and
effectively indemnified against any and all losses, claims, damages,
costs, charges, expenses, liabilities, demands, proceedings and actions
which the Supplier may sustain or incur, or which may be brought or
established against it by any person and which in any case arise out of
or in relation to or by reason of the negligence, recklessness or
willful misconduct of DXP or an infringement by DXP of the patent
rights of any third party in the performance of any of its obligations
or the exercise of its rights under this Agreement.
17.2 If any claim is made against either party for which indemnification is
sought under this Clause, the indemnified party shall consult with the
other and, subject to being secured to its reasonable satisfaction,
shall co-operate with the other in relation to any reasonable request
made by the other in respect of such claim.
18. FORCE MAJEURE
Subject as provided in Clause 16, neither party shall be liable for any
delay in performing any of its obligations under this Agreement if such
delay is caused by circumstances beyond the reasonable control of the
party so delaying and such party shall be entitled (subject to giving
the other party full particulars of the circumstances in question and
to using reasonable endeavors to resume full performance without
avoidable delay) to a reasonable extension of time for the performance
of such obligations.
19. NOTICES
All notices which are required to be given hereunder shall be in
writing and shall be sent to the address of the recipient set out in
this Agreement or such other address in England as the recipient may
designate by notice given in accordance with the provisions of this
Clause. Any such notice may be delivered personally or by first class
pre-paid letter or facsimile transmission and shall be deemed to have
been served if by hand when delivered, if by first class post 48 hours
after posting and if by facsimile transmission when dispatched.
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20. INTERPRETATION
20.1 In this Agreement:
(a) reference to any statute or statutory provision includes a
reference to that statute or statutory provision as from time to
time amended, extended or re-enacted;
(b) words importing the singular include the plural, words importing
any gender include every gender and words importing persons include
bodies corporate and unincorporated; and (in each case) vice versa;
(c) any reference to a party to this Agreement includes a reference to
his successors in title and permitted assigns;
(d) the headings to the Clauses are for ease of reference only and
shall not affect the interpretation or construction of this
Agreement.
21. GENERAL
This Agreement constitutes the entire understanding between the parties
concerning the subject matter of this Agreement and shall be governed
by and construed in accordance with the laws of England. No waiver or
amendment of any provision of this Agreement shall be effective unless
made by a written instrument signed by both parties. Each provision of
this Agreement shall be construed separately and notwithstanding that
the whole or any part of any such provision may prove to be illegal or
unenforceable the other provisions of this Agreement and the remainder
of the provision in question shall continue in full force and effect.
The parties submit to the exclusive jurisdiction of the English Courts
but without prejudice to either party's rights to bring proceedings in
any other jurisdiction where the other party is incorporated or has
assets.
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EXECUTED under hand in two originals the day and year first before written
SIGNED for and on behalf of
IORA LIMITED
By Paddy Falls
Signature /s/ Paddy Falls
Title Managing Director
Witness /s/ K. Patterden
13 Moselle Drive
Churchdown,
Glos - GL32RX
SIGNED for and on behalf of
DXP NEW MEDIA SERVICES LIMITED
By Tom Elek
Signature /s/ Tom Elek
Title Chief Executive
Witness Dovers Barn
Cotswold Meadows
Great Rissington
Cheltenham
Gloust GL54 2LN
