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Exhibit 10.1




RESTRICTIVE COVENANT




between





Kudelski S.A., CH- [Address],





-hereinafter referred to as “Kudelski S.A.“-




and





Robert Schneider, A- Salzburg [Address]





-hereinafter referred to as “Mr. Schneider“-




Preamble




SCM Microsystems, Inc. (“SCM”) and Kudelski S.A. have entered into an Asset Purchase Agreement
dated April 5, 2006 concerning the Digital TV business (the “Business”) of SCM and its affiliates
(“APA”). The APA provides in its Sec. 4.14 for a restrictive covenant that protects Kudelski S.A.
and its subsidiaries against certain competitive actions of SCM and its affiliates (as defined in
the APA, hereinafter “SCM Affiliate”); the content of sec. 4.14 is shown in Exhibit 1 to this
Agreement. In view of the fact that Mr. Schneider is founder, major stock owner and CEO of SCM and
Managing Director of SCM Microsystems GmbH, Kudelski S.A. has made it a condition to closing of the
APA that Mr. Schneider will accept certain restrictions to his ability to compete with Kudelski
S.A. and its subsidiaries after SCM’s sale of the Digital TV business to Kudelski S.A. and its
subsidiaries.



Having said this, parties agree as follows:



§ 1 Restrictive Covenant




As far as Mr. Schneider acts as an individual, during or after an employment or involvement in any
capacity with SCM or a SCM Affiliate or for any SCM Successor, Mr. Schneider shall refrain from
developing, designing, manufacturing or selling products that directly compete with the digital
television security solution products of the Business that exist as of the date hereof.



This prohibition applies irrespective of whether the activities of Mr. Schneider are direct or
indirect, whether they are carried out (i) as an employee, officer or director of a third party,
(ii) as a consultant or self-employed, or (iii) as an entrepreneur directly or through any legal
entity or any organization; provided that Mr. Schneider may (i) as a mere investor, own
securities in any publicly held company, but only to the extent Mr. Schneider owns of record or
beneficially less than 2% of the outstanding beneficial ownership of such company and (ii) hold
securities of any SCM Successor received in connection with a SCM Acquisition.







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This restrictive covenant shall end two years after the date hereof.



§ 2 SCM Successors




This Agreement shall not apply to, restrict or bind, in any way, (a) SCM or Mr. Schneider
with respect to the production and sale of digital media readers, including those that might be
used in digital television, or (b) any person that may at any time in the future (i) acquire the
SCM or any of its Affiliates or any of the assets or properties of the SCM or any of its
Affiliates, (ii) be acquired by the SCM or any of its Affiliates, (iii) merge or consolidate with
or into the SCM or any of its Affiliates, or (iv) otherwise succeed to the business or operations
of the SCM or any of its Affiliates (collectively, a “SCM Acquisition“ and such ‘person’ referred
to in this Agreement as “SCM-Successor”), in each case, whether or not Mr. Schneider is employed by
or affiliated with SCM or any such SCM Successor.



For avoidance of doubt regarding the demarcation between § 1 and § 2 parties agree as follows:
After a SCM Acquisition Mr. Schneider can remain employed with and can act as legal representative
(e.g. CEO) of SCM, a SCM Affiliate or a SCM-Successor, but will have to refrain from
developing, designing, manufacturing or selling products that directly compete with the
digital television security solution products of the Business that exist as of the date hereof.
However, if following a SCM Acquisition a SCM-Successor directly competes with the
digital television security solution products of the Business that exist as of the date hereof, Mr.
Schneider cannot be appointed into the position, or -as the case may be- will have to resign from
the position, of a legal representative (e.g. CEO) of the SCM-Successor.



§ 3 Miscellaneous




As the market for the aforementioned software, silicon products and conditional access module
products is a worldwide market, the restrictive covenant set forth in above § 1 shall apply
globally.



Mr. Schneider acknowledges and agrees that non-compliance with the terms of this Agreement (or any
threat thereof) by Mr. Schneider would cause material irreparable damage to Kudelski and that
damages may be inadequate, and that, in addition to all other remedies which it may have, including
damages, Kudelski or its subsidiaries will be entitled to specific performance and injunctive or
other equitable relief. No delay or failure in exercising any right, power or privilege hereunder
shall be construed to be or operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right, power or
privilege hereunder or otherwise legally available.



If Mr. Schneider infringes any provisions of this Restrictive Covenant, Kudelski S.A. or any of its
subsidiaries may — provided that such infringement is proven but without being subject to any
requirement to provide a proof of loss — claim a contractual penalty in the amount of 25,000.00
Euro (twenty-five-thousand Euro) for any one case of non-compliance. In the event of a continuing
infringement of this Restrictive Covenant, such contractual penalty shall be due for every month or
part of a month in



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which the infringement continues. Kudelski S.A. or any of its subsidiaries reserves the right to
the assertion of further rights arising from an infringement, in particular the assertion of
additional damages, if it can prove that its loss exceeds the amount of the contractual penalty due



This Agreement is subject to German law. The parties submit for all contractual and extra
contractual disputes arising from this Agreement to the local and international exclusive
jurisdiction of the courts having jurisdiction for Munich, Germany, provided, however, that
Kudelski or any of its subsidiaries shall have the right to bring an action for a preliminary
injunction in any court having jurisdiction over any such place where a breach of this Agreement
shall have, or shall have allegedly, occurred.



Alterations and/or amendments to this Agreement require written form to be valid; the same applies
for this written form requirement.



If any provision of this Agreement is or becomes invalid or unenforceable, the validity or
enforceability of the remaining provisions of this Agreement shall not be affected thereby. Parties
undertake to agree to replace the unenforceable provision by a provision permitted by statute which
most approximates the intended economic result of the invalid provision. The same shall apply for a
gap in this Agreement.


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	Location:
	Cheseaux, Switzerland	 	 
	Date:

	 	May 22, 2006

	 	 
	 

	 

	 	 
	 
	 	 	 	 
	Kudelski S.A.	 	 
	represented	 	 
	 
	 	 	 	 
	By: 
	/s/ Nicolas Goetschmann	 	 
	 

                Name:
Nicolas Goetschmann
	 	 
	 

	 	Title: Corporate Secretary	 	
	 
	By: 
	/s/ Jean - Jacques Duvinsin	 	 
	 

                Name:
Jean - Jacques Duvinsin
	 	 
	 

	 	Title: VP Finance and Administration	 	 






[Signature Page to Robert Schneider Restrictive Covenant]



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	Location:
	Ismaning Germany	 	 
	Date: 


	 	May 22, 2006

	 	 
	 

	 

	 	 
	/s/ Robert Schneider
	 	 	 
	Robert Schneider	 	 






[Signature Page to Robert Schneider Restrictive Covenant]




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