EXHIBIT 10.14
PC 3 SCOS License Agreement, dated as of July 3, 1995, by and between Personal
Computer Card Corporation and the Registrant, as amended on November 1, 1997,
August 24, 1998 and March 17, 1999, and extended by letter agreement dated
September 12, 2000.
LiCENSE AGREEMENT
Between: Personal Computer Card Corporation ("PC3")
0000 X. Xxxxxxxx Xx., Xxxxx 00
Xxxxxxxx, XX 00000
And: On Track Innovations Corporation ("Licensee")
Z.H.R. GaLilee Industrial Park
X.X. Xxx 00
Xxxx Xxxx, 00000 Israel
Whereas: PC3 is in the business of developing and marketing "Smart Cards" and
associated components to read from and write to the Smart Cards. A Smart Card is
a credit card sized card containing an integrated circuit with erasable memory.
PC3 owns certain proprietary rights including patents in and to certain Smart
Card technology, the integrated circuits within Smart Cards, associated
components of Smart Cards and a Smart Card Operating System. Licensee desires to
License PC3's technology to manufacture and sell Smart Cards based on PC3's
technology, including without Limitation PC3's Smart Card Operating System, and
PC3 is prepared to License Licensee its technology and the proprietary rights
relating thereto under the terms and conditions of this agreement.
It is agreed as follows:
Article 1: DEFINITIONS
1.1 PC3 SCOS(tm) - means PC3's proprietary Smart Card Operating System. SCOS(tm)
is a U.S. trademark of PC3.
1.2 PC3 Module - means an integrated circuit (die with ROM mask) which excludes
PC3 SCOS.
1.3 Transport Code - PC3 Modules are protected by a "Transport Code." Until
this transport code is presented to the module, the modules are protected from
operation. When the transport code is presented, their "Lifetime" options
(encryption capabiLities) are set and they are enabled for operation. At this
time they are also assigned a new transport code which permits only the customer
(issuer) to personaLize them.
1.3.1 PC3 User module - PC3 Modules which when enabled either have no encryption
capabiLities or their capabiLities are Limited to only use encryption to provide
authentication and secure communications (they cannot be used to encrypt/decrypt
data for the interfacing device.)
1.3.2 PC3 AppLication module - PC3 Modules which when enabled are given the
capabiLities to store keys and provide general encryption services for the
interfacing device.
1.4 PC3 SCOS(tm) Development System - means PC3's DOS based personal computer
card test programs, DOS and Windows device drivers, and Windows SCDISK DLL
Library for interfacing to smart cards through readers connected to a serial
communications port and associated documentation with which appLication programs
can be developed to make use of SCOS Smart Cards.
1.5 Licensed Product - means the PC3 Modules and the Development System.
1.6 Effective Date of Agreement - means the date of signature of this Agreement
by the last signing Party.
1.7 PC3 Patents - all of the patents PC3 holds, or has filed appLications for as
of the Effective Date of this Agreement which cover any of the Licensed
Products, including without Limitation issued patents U.S. 4,742,215, AustraLia
597359, and Taiwan 37460 and corresponding Patents pending in France, United
Kingdom, Germany, Italy, Holland, Sweden, Austria, and Belgium.
Article 2: GRANT OF LiCENSE
2.1 PC3 grants to Licensee, and Licensee accepts, a non-exclusive
non-transferable License to purchase, sell, and use the Licensed Products and
to design and manufacture, and have manufactured for it, products utiLizing the
Licensed Products.
2.2 PC3 agrees to transfer to Licensee, and Licensee agrees to protect and
properly use, the Transport Code(s) and an InitiaLization procedure whereby
Licensee can "Enable and configure" PC3 Modules.
EnabLing of modules shall be performed only just before the module carriers
(cards) are assigned to customers at approved manufacturing sites provided in
Attachment A. This agreement can be amended to include additional sites.
Licensee agrees that the general encryption services provided by the PC3
AppLication Modules will only be enabled if the modules are to be used in
transaction terminals or appLications for purposes of authenticating and
communicating with smart cards and which prohibit use of the encryption services
by the terminal user.
2.3 PC3 agrees to transfer to Licensee the PC3 Development System, and Licensee
agrees to protect and properly use it to develop smart card appLications.
Licensee agrees that AppLications developed with the PC3 Development system,
will be Limited to use with PC3 Modules purchased under this License.
Licensee agrees that the general encryption services provided by PC3
Development system will be Limited to use in authenticating and communicating
with smart cards. They may not be used to encrypt data files or made available
to provide general encryption services to a user.
2.4 Licensee may use third party distributors, agents, and system integrators
to sell and lease the Licensed Products, but Licensee shall in all respects be
responsible for such sale and lease under all the terms and conditions of this
Agreement as though the sale or lease were Licensee's own act. Licensee may not
sub License any party to manufacture or purchase the Licenses Products or any
part thereof.
2.5 PC3 is only granting Licensee the rights to purchase, use, manufacture and
sell the Licensed Products. Noting herein shall be construed as transferring to
Licensee any of PC3's right, title and interest in and to the PC3's Property
Rights. There are no impLied Licenses under this Agreement.
2.6 Although the above License includes the PC3 Module Listed in Attachment A,
Licensee will not receive the source or ROM mask code.
As PC3 upgrades SCOS and releases new non-proprietary masks, they will be added
to the List of products available under this agreement. Licensee shall receive
such upgrades and new releases upon the most favorable conditions they are
offered to any other party.
PC3 will at the request of Licensee provide ROM mask code at a mutually
acceptable Module Manufacturer for the manufacture of PC3 Modules for Licensee.
In this case, PC3 will charge Licensee for the costs of the modifications
required to produce the mask. Such costs will be reasonable and agreed with
Licensee in advance. PC3 shall not unreasonably withhold acceptance of any
module manufacturer.
2.7 Territory - For manufacturing means the country(s) designated in Attachment
A. For sales means worldwide, except for countries on the U.S. State
Department's terrorist List or excluded by the country of manufacture.
Article 3: - DELETED
Article 4: PAYMENTS AND REPORTING
4.1 Licensee shall pay to PC3 a one-time non-refundable License fee for the
rights to use the Licensed Products. The License fee is given in Attachment A.
4.2 In addition Licensee shall pay a per unit royalty ("Royalty") to PC3 for
each PC3 Module purchased from the manufacturer. The Royalty is due upon receipt
of the PC3 Module for the Module manufacturer. The module fee is given in
Attachment A.
Licensee will prepare Purchase Orders specifying Module, quantity, and shipment
schedule. This purchase order will be suppLied in dupLicate to the Module
Manufacturer and PC3. PC3 will automatically, within 7 days, notify the Module
Manufacturer to permit it to produce and sell to Licensee the requested quantity
of PC3 Modules. These request can be in the form of a "blanket" purchase order
releasing specified quantities vaLid for a specified period.
It shall be Licensee's responsibiLity to arrange for payment and terms for the
PC3 Modules with the Module Manufacturer.
With respect to the payment of Royalties, it shall be Licensee responsibiLity to
document shipments of PC3 Modules with receiving records. Without this
documentation and not with standing section 4.7, Royalties shall be due on the
projected receive date specified in the release Purchase Order.
4.3 Where (if) Licensee is required to withhold taxes imposed by appropriate
governmental authorities based on the use of PC3 Property Rights of PC3
Technology, Licensee shall pay all taxes as required. All Royalties are due in
full exclusive of any withholding taxes or other taxes.
4.4 Royalties shall be paid within thirty (30) days of the their due date as
defined in Section 4.2.
4.5 Royalties shall be calculated and paid in U.S. Dollars wire transferred to a
bank designated by PC3.
4.6 Licensee shall send to PC3, within thirty 30 days of the end of each
calendar year, a yearly declaration, which contains statements setting forth the
number of Licensed Products purchased by Licensee and for which Royalties are
due.
4.7 PC3 shall have the right to examine and audit Licensee records relating to
payments due under this Agreement at PC3's expense upon reasonable notice during
reasonable business hours, provided that such examination and audit may be
performed only by an independent certified pubLic accountant selected by PC3
("CPAA") and no more frequently than once in any twelve month period, except
that if such audit reveals that Royalties in the amount of five per cent (5%) or
more of their total Royalties payable by Licensee during the period audited are
found to be owing and unpaid, the expense of the relevant audit shall be paid by
Licensee and PC3's CPA shall have the right to audit Licensee records again
within such twelve month period. Any payments found owing from any audits shall
be promptly paid to PC3 plus interest at the rate of the Bank of America prime
from the date such payments were due.
Article 5: DESIGNATIONS
5.1 As a condition to the License, Licensee agrees to place a notice on each PC3
Product manufactured by or for Licensee.
PC3-Module Carrier (Card or other media):
If Licensee prints or otherwise displays its trademarks, logo, name, or
affiLiated name, or that of other Licensee (e.g. Innovation), then it will
include the following with that information
"PC3 (copyright)"
Licensee developed AppLications using PC3 Development System:
The following must be included within the code
"Portions of this code Copyright (c) of Personal
Computer Card Corporation 199x."
If the appLication prints or otherwise displays Licensee's trademarks, logo,
name or affiLiated name, then it will include the above notice with that
information
5.2 Licensee acknowledges that PC3 may insert a mutually acceptable legend
indicating its ownership of copyrights, patents and proprietary information in
the code associated with said PC3 Modules and PC3 Development System and have
embedded on the PC3 Modules such legend(s) in a manner which will not be visible
to a card used without disassembLing the card (i.e. the legends will not be on
the contact pad visible to a card user).
5.3 During the term of this Agreement, Licensee is authorized by PC3 to use the
SCOS "Logo" which is a registered PC3 U.S. trademark in connection with
Licensee's advertisement, promotion and distribution of Licensed Products. Upon
expiration or termination of this Agreement, Licensee will immediately cease all
display, advertising and use of the SCOS "logo" and will not thereafter use,
advertise or display any trademark, trade name, logo or designation which is, or
any part of which is similar to or confusing with SCOS.
Article 6: LiCENSED PERIOD
Subject to the appLication of the provisions of Article 9 below, the License
granted by this Agreement shall commence on the Effective Date and shall
continue subject to the conditions given in Attachment A.
Article 7: TERMINATION
7.1 PC3 may, during the term of this Agreement, terminate this Agreement in the
event of failure of Licensee to perform any material obLigation under this
Agreement and where such failure has not been remedied within a period of sixty
(60) days following notice by PC3 by registered mail or nationally recognized
express couriers indicating the failure or failures invoked as grounds of
termination. Licensee may terminate on the same terms and by the same means.
7.2 Upon any termination of this Agreement, except as set forth below, the
Licenses granted to Licensee shall immediately terminate, and Licensee shall
immediately cease from manufacturing and using the Licensed Products. Licensee
will return within fifteen (45) days after such termination all software, mask
works and any other PC3-Technology and related documentation and notes provided
to Licensee, as well as any and all copies thereof. Notwithstanding the
foregoing, so long as this Agreement is not terminated due to breach by
Licensee, Licensee may continue to sell their on-hand inventory provided that
all payable Royalties are timely paid. Any such termination must be validly
effected.
Article 8: MISCELLANEOUS PROVISIONS
8.1 At signing Licensee agrees to provide PC3 with an annual purchase forecast
of Licensed Products, in a mutually agreeable format, setting forth the
requirements of PC3 products for use in material planning and production
control. Thereafter, the reports shall be updated and provided during January of
each year during the term of this Agreement.
8.2 Licensee acknowledges that the export of Licensed Products may be subject to
restrictions imposed by its Government. Licensee shall be responsible for any
License fees, obtaining regulatory approvals and compLiance with export control
laws with respect to the Licensed Products. Both parties agree to comply with
all appLicable laws.
8.3 PC3 agrees to provide Licensee with reasonable aid and assistance including
documentation, and reasonable support on request related to use of SCOS and the
Development System on a fee for service basis. Such fee for service shall be
reasonable and at the most favorable rate which PC3 offers to any other party.
8.4 PC3 beLieves that Innovation and Bull CP8, French Companies among others,
may hold certain patent rights which cover appLications of the smart cards and
associated components. These patent rights may cover the Licensed Products and
appLications using the Licensed products developed by Licensee.
PC3 shall not be responsible for any infringement of patent rights caused by
Licensee's manufacture and sale of the Licensed Products. Licensee is wholly
responsible for determining the necessity and for negotiating any Licensing
arrangement which may be required to avoid infringement by Licensee of these
patents and Licensee shall be wholly responsible for paying any License fees due
for the sale and manufacture of Licensed Products
Licensee indemnifies PC3 for any breach by Licensee of this agreement. Licensee
will not enter into a settlement agreement where by it acknowledges the
superiority of any other patents over PC3's patent, or otherwise impair PC3's
rights.
Article 9: ESCROW
Upon the request of and at the expense of Licensee, PC3 agrees to place in
escrow, source code, object code, and related documentation relating to the
Licensed Products. Said escrow items to be made available to Licensee upon the
occurrence of any of the following events.
(a) PC3 becomes insolvent or generally fails to pay, or admits in writing its
inabiLity to pay, its debts as they become due; or
(b) PC3 appLies for or consents to the appointment of a trustee, receiver or
other custodian for PC3, or makes a general assignment for the benefit of its
creditor; or
(c) Any bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution or
Liquidation proceedings commenced by or against PC3, and if such case or
proceeding is not commenced by PC3, it is acquiesced in or remains un-dismissed
for sixty (60) days.
Article 10: SUBSTANTIVE LAW
This Agreement will be governed and construed in accordance with the
substantive law in force in the state of Florida and the U.S. copyright laws,
without reference to other law, except that questions affecting the construction
and effect of any patent shall be determined by the appLicable law of the
country in which the patent was granted. (Except for any Non-Disclosure
Agreement executed by the parties) this agreement is the entire agreement
relating to the subject matter herein and supersedes all prior communications
between the parties.
Article 11: CHANGES OR AMENDMENTS
All changes and/or amendments in respect of this Agreement must be in writing
and signed by both parties to be effective. This requirement of written form may
only be waived if expressly agreed to in writing by both parties.
Changes and amendments will require written approval of the United States
government.
Article 12: WAIVER AND SEVERABILiTY
A waiver of a breach or default under this Agreement shall not be a waiver of
any other default. Failure or delay by either party to enforce compLiance with
any term or condition of this Agreement shall not constitute a waiver of such
term or condition. In the event that any of the provisions of this Agreement
shall be held by a court or other tribunal of competent jurisdiction to be
unenforceable, such provision will be enforced to the maximum extent permissible
and the remaining portions of this Agreement shall remain in full force and
effect.
Article 13: ASSIGNMENT
Neither this Agreement nor any License granted hereunder may be assigned, sub
Licensed or otherwise transferred by either party without the prior written
consent of the other party, except as expressly permitted by this Agreement.
This Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of the parties.
Article 14: INFORMATION AND SECRECY
14.1 Each party agrees not to disclose or issue any pubLic statements, press
releases, or the Like discussing, setting forth, or otherwise disclosing any
aspects of the agreement between PC3 and Licensee, and/or acknowledging its
existence, without the prior written consent of the other party.
14.2 The technology provided to Licensee in the course of supporting the
Licensed Products hereunder contains trade secrets of PC3 and is to be kept
strictly confidential by Licensee and is not be used for any purposes by
Licensee except those expressly set forth herein. Without Limiting the
generaLity of the foregoing, Licensee agrees to protect any source code provided
by PC3 in the same manner it uses to protect its own highly confidential source
code. The obLigations of Licensee pursuant to this Agreement with regard to
PC3's Technology that shall not apply to PC3's Technology: (a) that becomes
pubLicly available through no fault of Licensee or its AffiLiated Companies; (b)
is released for pubLic disclosure by PC3 in writing; (c) is lawfully obtained
from third parties without restrictions not is breach of the confidential
relationship with PC3; (d) which can be shown to be previously known or
developed by Licensee independently of PC3; or (e) is lawfully required to be
disclosed under mandatory legislation. The obLigations of Licensee under this
Section are not appLicable to information which, according to documentary
evidence, becomes available from a third party who has no obLigation of secrecy,
or it within the pubLic domain without breach of this Agreement by Licensee
(e.g. information disclosed by PC3's patents.)
14.3 PC3 MAKES NO WARRANTIES OF ANY KIND WITH RESPECT TO THE LiCENSEE TECHNOLOGY
EITHER EXPRESS OR IMPLiED. PC3 HEREBY EXPRESSLY DISCLAIMS ANY AND ALL SUCH
WARRANTIES INCLUDING WITHOUT LiMITATION THE IMPLiED WARRANTIES OF
MERCHANTABILiTY AND FITNESS FOR A PARTICULAR PURPOSE.
14.4 Except for Licensee's willful disclosure of their source code, in no event
shall either party be Liable for any indirect, incidental, special or
consequential damages, including without Limitation loss of profits, whether in
an action in contract or tort (including negLigence), even if the action in
contract or tort (including negLigence), even if the other party has been
advised of the possibiLity of such damages.
Article 15: U.S. GOVERNMENT EXPORT LAWS
The following statements are required by U.S. Government law in all
international Technology Assistance agreements. The inclusion of these
statements does not confer on the Licensee any additional rights not previously
included in other areas of the agreement.
15.1 This agreement must not enter into force, and shall not be amended or
extended, without the prior written approval of the Department of State of the
U.S. Government.
15.2 This agreement is subject to all United States laws and regulations
relating to exports and to all administrative acts of the U.S. Government
pursuant to such laws and regulations.
15.3 The parties to this agreement agree that the obLigations contained in this
agreement shall not affect the performance of any obLigations created by prior
contracts or subcontracts which the parties may have individually or
collectively with the U.S. Government.
15.4 No LiabiLity will be incurred by or attributed to the U.S. Government in
connection with any possible infringement or privately owned patent or
proprietary rights either domestic of foreign, by reason of the U.S.
Government's approval of this agreement.
15.5 The technical data or defense service exported from the United States in
furtherance of this agreement and any defense article which may be produced or
manufactured from such technical data or defense service may not be transferred
to a person in a third country or to a national or a third country except as
specifically authorized in this agreement unless the prior written approval of
the Department of State has been obtained.
15.6 All provisions in this agreement which refer to the United States
Government and the Department of State will remain binding on the parties after
the termination of the agreement.
ATTACHMENT A: PRICES AND TERMS OF AGREEMENT
A.1 LiCENSE FEE
A $10,000 U.S. fee with be charged for the Technology Transfer. This fee will be
due upon signing of the License agreement.
A.2 PC3 MODULES
A.2.1 ROYALTIES
This License gives Licensee the right to purchase a module from the Module List
below for a price set in the Royalty Schedule, plus premium if appLicable. The
quantity appearing in the royalty schedule is derived by taking the total
purchases of all modules appearing in the List.
MODULE LiST
PC16T4 SGS-Thomson SCOS4 2K Contact only 16612 SEB.
In Production
PC64T4 SGS-Thomson SCOS4 8K Contact only 16612 SEC.
In Process
PC1xT5 SGS-Thomson SCOS5 1K Contact/RF 16C601 SEF.
To be released (see A.2.2)
ROYALTY SCHEDULE per module
Quantity (1000s) Royalty/unit
0-100 *
100-500 *
500-10,000 *
10,000+ *
Licensee will be responsible for negotiating module purchase price(s) with the
Module manufacturer SGS-Thomson (SGS-T). PC3 will assist in the process and to
the extent of its influence assist in obtaining the best price for Licensee.
The royalties are due upon receipt of the dies from SGS-T. OTI must notify PC3
whenever it orders dies from SGS-T and PC3 will approve the order by notifying
SGS-T it has permission to ship (the PC3 masked) dies to OTI. This approval will
be automatic unless OTI fails to keep current with its payments to PC3. Payments
are to be made in U.S. dollars by wire transfer to PC3's bank account in
Lakeland within 30 day of their due date.
A.2.2 NEW MASK
PC3 will produce a PC1xT5 version of SCOS-5 for the 1K 16601 which will include
modifications to the purse, the RF routines with "colLision" protection and the
contact I/O routines. PC3 will charge OTI $7,000 U.S. for release of the PC1xT5
mask. PC3 owns the mask.
* Omitted pursuant to a confidential treatment request. The confidential
information has been filed separately with the SEC.
The $7,000 development charge also covers the work PC3 has done in the past
including the four "Chip Managers" modules produced already produced. The fee is
due upon receipt and verification of the prototypes deLivered approximately 9
weeks after release of the mask.
A.2.3 INITIAL ORDER
SGS-T will require a minimum order of 10,000 dies for the new mask with a
pre-paid masking fee of $7,000 with the order. OTI will pay this masking fee on
behalf of PC3 as part of the License agreement. OTI will subtract the masking
fee from the Development Fee due PC3. SGS-T will not process the mask until they
receive the order and masking fee.
A.3 CODE DISCLAIMER AND PROTECTION
When dies are manufactured by SGS-T, the RF code must IS enabled only if SGS-T
sets a switch in EEPROM. OTI forgoes (gives up) all claims to its code even
though it is contained in the mask when SGS-T initiaLized the dies with the RF
operation disabled. With RF disabled the code cannot be referenced or executed.
Pc3 is permitted to use and License a contact only configuration (RF operation
disabled) without obLigation to or approval from OTI. Pc3 agrees it will not
permits SGS-T to enable the RF code unless the dies are sold to OTI or OTI's
customers. PC3 Agrees to protect this code form disclosure (the ROM cannot be
read from the die) to unauthorized parties.
A.4 MANUFACTURING LOCATION
The Issuing of cards (turning on their options and setting their initial
passwords) must be performed by OTI at their offices in Rosh Xxxx. The issuing
site determines the rules of export and therefore must be included in the
agreement. Additional sites may not be utiLized without Prior Approval.
A.5 TERM & U.S. GOVERNMENT APPROVAL
The term of this agreement shall be for 5 years renewable upon re-negotiating.
The agreement must be approved by the U.S. Department of State. PC3 will be
responsible for obtaining their approval. Anticipating this License we have
already presented the structure of the agreement to the National Security Agency
for review and beLieve there should be no problems. However, they may impose
unanticipated restrictions.
SIGNATURE PAGE
Between: Personal Computer Card Corporation (PC3)
0000 X. Xxxxxxxx Xxxxx, Xxxxx 00
Xxxxxxxx, XX 00000 X.X.X.
And: On Track Innovations Corporation ("Licensee")
Z.H.R GaLilee Industrial Park
X.X. Xxx 00
Xxxx Xxxx, 00000 Israel
PC3:
By: /s/ Xxxxxxx X. Xxxxxxx Date: June 20, 1995
Xxxxxxx X. Xxxxxxx
V.P. Operations and Technology
Licensee:
By: ____________________ Date: July 3, 1995
Supplement to PC3/OTI License Agreement
November 1, 1997
Notification of new ownership and address
Effective October 1, 1995 Personal Cipher Card Corporation purchased the
technology including the PC3-OTI License agreement from Personal Computer Card
Corporation.
Retroactively effective that date, Licensee refers to Personal Cipher Card
Corporation (PC3). The address of notification for PC3 is as follows
Personal Cipher Card Corporation
0000 Xxxxxxxxxx Xx. X.
Xxxxxxxx, XX 00000
Change to Royalty payment Schedule
In exchange for a one time non-refundable payment totaLing $50,000, reporting of
royalties will be amended to be due based on quarterly sale of cards, rather
than receipt of dies and the royalty payment schedule will be amended as given
in Section "Revision to Appendix A.2.1." The effective date of this change will
be January 1, 1997. Receipt of the one time $50,000 payment is a condition of
activation of this amendment.
OTI will report to PC3 its SCOS cards sales quarterly in the following month via
FAX. Payment will be initiated at the same time. On receipt of the information
PC3 will generate an original invoice and furnish it to OTI. OTI will furnish
PC3 with its yearly audited statement verifying its SCOS card sales.
Card sales for purposes of reporting will refer to all carrier forms containing
SCOS dies in which SCOS is enabled and utiLized (in any appLication) excluding
returns, defective products, and internal engineering uses.
A 1.0% per month interest fee will be charged if the payment or reporting of
royalties become 60 days past due.
PC4T5 Mask
PC3 will produce a PC4xT5 version of SCOS-5 for the SGS-Thomson 4K ST16SF44.
This mask will only permit OTI to enable the RF routines. The ROM RF routines
are not viewable. It will include purse to purse commands. Release of the mask
will require OTI approval of its suitabiLity for XXXx purposes.
PC3 grants rights to purchase PC4xT5 dies from SGS-Xxxxxxxx under prevaiLing
terms of the Licence agreement and will so notify SGS-Xxxxxxxx.
PC3 will charge OTI ten thousand dollars ($10,000)U.S. for release of the PC4xT5
mask. PC3 will own the mask. Seven Thousand Dollars will be paid to SGS-Xxxxxxxx
on behalf of PC3 to cover their masking charge payable. Three thousand dollars
will be payable to the PC3 upon receipt of the prototypes.
OTI will issue a purchase order to SGS-Xxxxxxxx for a minimum of 10,000 dies and
stating it will pay the masking charge on behalf of PC3. This order will be
placed concurrent with the release of the mask code by PC3 to SGS-Xxxxxxxx.
Royalties will be paid to PC3 under the conditions of the amended License
agreement and according to the schedule in Appendix A.
Additional masks
PC3's PC64T4 SCOS-4 mask for the SGS-Xxxxxxxx 2K ST16SF48 is added to the List
of products available to OTI. These are contact only products.
PC3's PC2xT5 DCOS-5 mask for the SGS-Xxxxxxxx 2k ST16F42 is added to the List of
products available to OTI. This mask contains the RF routines but requires
contact IO to issue. Only OTI will be given an explanation of how to enable
the RF routines.
Revision to Appendix A 2.1 Royalty/unit
Quantity (1000) Royalty/unit
0-100 *
100-500 *
500-4500 *
4500-10000 *
10000+ *
Revision to Appendix A.3 Code Protection
New masks containing the RF routines, including the PC4xT5, will be protected by
two separate transport (factory) keys for issuing, Unissued card will have both
contact IO and RF IO enable prior to issuing. One key shall be reserved for OTI
and the only with use of that key can the RF routines be left enabled when
cards are issued. The ROM RF routines are not viewable.
OTI's "OEM XXX Reader"
*Confidential information. Subject to FOLA
Confidential treatment request.
I exchange for PC3 assistance in developing routines for the same utiLized in
its new OEM reader, use of PC3 reader protocol, and use of PC3 DOS and Windows
drivers, OTI will pay PC3 $3,000 and a royalty of $1.00 per share using SCOS
sold.
It is hereto agreed:
By: /s/ Kipper X. Xxxxxxx
-----------------------
Kippper X. Xxxxxxx
Personal Cipher Card Corporation
Date: 12/4/97
----------
By:
------------------
Ontrack Innovations Ltd.
Date December 9th 1997
-------------------
Supplement to PC3/OTI License Agreement
March 17, 1999
Background
On June 20th 1995 On Track Innovations (OTI) And Personal Computer Card
Corporation (later transferred to Personal Cipher Card Corporation (PC3) signed
a License agreement for a non exclusive License to purchase, sell, and use PC3
modules with the SCOS operating system and development system.
Effective November 1, 1997 and August 24, 1998 amendments to the agreement
were signed and among other things amended the royalty payment schedule.
Confirmation of Verbal PoLicy in Place
This supplement confirms a verbal agreement, in place since the conception of
the agreement that Limited use of OTI's contactless RF routine contained in some
PC3 modules to OTI. These modules are capable of being used and Licensed to
third parties for contact only operation. With respect to third party Licenses,
PC3 agrees to Limit it's Licensing of PC3 modules, containing OTI's RF routines
(present and future), to contact only use, protect the RF routine from discovery
and review, and prohibit enabLing use of these routines, thus guaranteeing OTI
exclusive use of its technology. Current products include the PC1xT5, PC1xT5a,
PC2xT5, and PC4xT5.
This supplement take precedence over the preceding amended August 24, 1998 which
detailed separate issuer keys for enabLing contact and contactless only use of
the PC3 modules containing the OTIRF routines.
New PC8xS5 Samsung Mask for KS88C92008
PC3 herein agrees for the fixed price of $25,000 to convert SCOS to operate on
the KS88C92008 Samsung microprocessor with integrated RF I/O. This mask will be
identified as the PC8xS5 and will be configurable as a contact, contactless or
combi card. This new mask will be added to the Agreement's List of approved
products which OTI may purchase at the agreed $0.50 royalty per sold die and
will be subject to the conditions of the Agreement and the restriction specified
above Limiting use of the RF routines to OTI. The mask will be owned by PC3. PC3
will notify Samsung within 14 days from the signing of this Supplement that OTI
has unrestricted rights to purchase dies made with this mask. OTI agrees to
inform PC3 whenever a purchase order is issued to Samsung.
OTI will provide, or have provided by Samsung the necessary documentation and
development tools, for the use at PC3's offices where the work will take place.
OTI will provide PC3 with its RF routines for the KS88C92008 and updates for its
OTI reader.
OTI will faciLitate the opening of communications channels within Samsung to
support development and release of the mask. If required by Samsung OTI will be
responsible for issuing a minimum quantity order. If masking charges are
required by Samsung, they will be paid by OTI on behalf of PC3...
The mask will be based on PC3's PC8xT5 mask (unreleased) which contains in ROM
the latest improvement integrated into the PC4xr5 with patches. It remains to
be determined if the use of Samsung contact I/O and EE routines will be
required. The PC8xT5is the equivalent of the PC8xM5 mask described in SCOS5
reference manual RM1051, which has already been provided to OTI.
It is determined to take 12 weeks, once documentation and equipment are in hand,
to perform the task. PC3 will make its best effort accelerate this schedule.
The payment/event schedule will be as follows:
$5,000 Due upon this agreement
Receive equipment and documentation
Approximately 2 months to perform conversion/testing
One week joint testing with OTI at PC3 to verify suitabiLity
$10,000 Due upon approval by OTI and release of code to Samsung
Prototypes to be received and tested by OTI and PC3
$10,000 Due upon approval of prototypes
It is hereto agreed:
Personal Cipher Card Corporation:
By: /s/ Xxxxxxx X. Xxxxxxx Date: March 28, 1999
------------------------- -------------------
Xxxxxxx X. Xxxxxxx
OnTrack Innovations Ltd.
Print: Xxxx Xxxxxx Date: March 31, 1999
----------------------- --------------------
Supplement to PC3/OTI License Agreement
August 24, 1998
Backgrounds
On June 20th 1995 On Track Innovations Ltd. and Personal Computer Card Corp.
(later on transferred to Personal Cipher Card Corp. know as PC3) signed a
License agreement for a non-exclusive License to purchase, sell and use the PC3
modules with the SCOS operating system and development system.
Effective November 1st 1997 the last amendment to the agreement was signed and
among other things, amended the royalty payment schedule.
Change to Royalty payment Schedule
I exchange for a monthly retainer fee of $2,500 that PC3 will be entitled to
starting August 1998, the royalty payment schedule will be amended starting
October 1st 1998 so that there will be a fixed royalty rate of * per sold card
contains SCOS dies in which SCOS is enabled and utiLizes (in any appLication)
excluding returns, defective products and internal engineering uses.
OTI will report to PC3 its SCOS cards sales quarterly in the following month via
FAX. Payment will be initiated at the same time. On receipt of the information
PC3 will generate an original invoice and furnish it to OTI.
Within twelve months from August 1998 the retainer fee will be examined and
revised should the two sides will agree on a different retainer.
All other terms set in the Licence agreement and following amendments remain
unchanged.
It is hereto agreed:
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxx
--------------------- -------------------
Xxxxxxx X. Xxxxxxx Xxxx Xxxxxx
Personal Cipher Card Corporation On Track Innovations Ltd.
Date: Aug. 24, 1998 Date: Aug. 24, 1998
[LOGO]
Sunday, September 10, 2000
Xxxxxxx X. Xxxxxxx
Personal Cipher Card Corporation
0000 Xxxxxxxxx Xx. X.
Xxxxxxxx, XX 00000
Dear Xxx,
Re: Agreement between us dated August 24, 1998 as supplemented and
amended November 1, 1997 August 24, 1998 and March 17, 1999 (the "Agreement")
------------------------------------------------------------------------------
For sake of good order please confirm by counter signing below your agreement to
extend the period of the Agreement by additional 5 years, terminating on July 5,
2005.
Regards,
/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
President & CEO
We Agree:
/s/ Xxxxxxx X. Xxxxxxx Sept 12, 2000
-------------------------------- -----------------
Personal Cipher Card Corporation Date
By Xxxxxxx X. Xxxxxxx, President
