Exhibit 10.2
PRODUCT DEVELOPMENT AGREEMENT
This agreement (the "Agreement") is entered into as of June ___, 1998 by and
between UTMC MICROELECTRONIC SYSTEMS INC., a Delaware corporation, with offices
located at 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxx Xxxxxxx, XX 00000 ("UTMC") and
BRAINTECH, INC. a Nevada corporation, with offices located at 000-000 Xxxx 0xx
Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0 ("BrainTech")
(BrainTech together with UTMC being, collectively, the "Parties" and each,
individually, a "Party").
1. PURPOSE
Each of BrainTech and UTMC possesses proprietary information, technologies and
capabilities that together are anticipated to permit the development of products
for the commercial vision systems market. This Product Development Agreement
sets out the agreement of the Parties with respect to the development,
manufacture, marketing, distribution and sale of the initial product, being an
image processing accelerator card (the "IMPAC Product") for use in vision
systems.
2. JOINT DEVELOPMENT
The Parties agree to endeavour to jointly develop the IMPAC Product in
accordance with the terms of this Agreement. The IMPAC Product shall be
developed by the Parties in accordance with the Statement of Work ("SOW")
attached hereto as Schedule A and each of the Parties agrees to use all
commercially reasonable efforts to perform their respective tasks described in
the SOW diligently, carefully and in a timely and workmanlike manner. No
amendment or modification to the SOW shall be effective or binding unless such
amendment or modification is recorded in writing and signed by the authorised
representatives of each Party. The Parties shall reduce to writing a
description of the technical specifications of the IMPAC Product as soon as it
is reasonably practical to do so, but in any event not later than the time of
delivery of the prototypes pursuant to Section 2 of the SOW.
3. COMMUNICATIONS
Each of the Parties will make reasonable efforts to consult with the other Party
and to keep the other Party informed during its development efforts under this
Agreement and will provide the other Party with copies of all documents relating
to such efforts as are reasonably requested by the other Party and which
documents will be subject to the provisions of Section 8 of this Agreement.
4. PERIOD OF PERFORMANCE
The term of this Agreement shall be as described in the IMPAC PC-Board & Support
S/W Development Schedule set out in the SOW. The Parties recognize the need for
flexibility in
developing new products such as the IMPAC Product. Consequently, the Parties
agree to evaluate progress and modify the schedule contained in the SOW as is
reasonably necessary from time to time. Notwithstanding the foregoing
provisions of this Section 4, neither party shall have any obligation
hereunder upon the expiration of twelve (12) months from the date of this
Agreement, except only pursuant to the provisions of Section 8, which shall
remain in effect.
5. FUNDING AND PAYMENTS
Each Party shall bear the labour and other internal costs of performing their
respective obligations under this Agreement. Further, each Party shall bear all
out of pocket expenses incurred by it in connection with the development of the
IMPAC Product pursuant to this Agreement including, but not limited to, the
purchase of layout boards, third party software licenses and components. The
maximum amount of all labour and other internal costs and all out of pocket
expenses that each Party is obliged to incur shall be the sum of (U.S.)
$500,000.
6. OWNERSHIP OF IMPAC PRODUCT AND OTHER INTELLECTUAL PROPERTY
(a) The Parties agree that rights to the Intellectual Property created by
either Party in performing its requirements set out in the SOW in respect of
the IMPAC Product shall be owned jointly and equally by BrainTech and UTMC as
set out in this Section 6. From time to time, at the request of either Party,
the Parties shall identify in writing the Intellectual Property created by each
Party in performing its requirements set out in the SOW in sufficient detail to
accurately describe such Intellectual Property and shall insert such written
description on Schedule B attached to this Agreement. At the time of insertion
of such written description on Schedule B such Intellectual Property shall
thereupon be owned jointly and equally by BrainTech and UTMC (the "Jointly Owned
Intellectual Property"), and the Parties shall execute all such assignments as
necessary in order to evidence and/or document the same.
(b) For purposes of this Agreement, "Intellectual Property" means all patents,
patent applications, patent rights, copyright registrations, copyrights, trade
secrets, know-how, mask works, discoveries, research data, inventions,
manufacturing methods, industrial designs, processes, technology, technical
information, and any rights under license to any of the foregoing, whether or
not subject to statutory registration or protection and whether protected,
created, or arising under the laws of the United States or Canada or any state
or province thereof or under the laws of any other jurisdiction.
(c) In the event the Parties identify any other Intellectual Property in
respect of any products, inventions or processes in addition to the IMPAC
Product which they desire to jointly develop, they shall denominate the same in
writing as Jointly Owned Intellectual Property and such Jointly Owned
Intellectual Property will, unless otherwise agreed in writing, be owned jointly
and equally by the Parties, and the Parties shall execute all such assignments
as necessary in order to evidence and/or document the same.
(d) Each Party agrees, at the request of the other Party, to meet and discuss
the identification of Jointly Owned Intellectual Property in addition to the
Intellectual Property created pursuant to the SOW in respect of the IMPAC
Product, to establish procedures for identification and
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protection of the same, and to take such reasonable actions as may be required
to preserve and protect such Jointly Owned Intellectual Property for the
benefit of both Parties.
(e) The Parties agree to take such actions as are necessary with each Party's
respective employees to secure ownership of any and all Jointly Owned
Intellectual Property. Each Party will cooperate with the other Party in the
prosecution of patents, copyright registrations, and all other registrations or
other forms of legal protection for the Jointly Owned Intellectual Property, and
in protecting the same in order to maintain trade secret protection for such
property. The Parties shall share equally the expenses associated with filings
for patents, copyright registrations or any other form of intellectual property
protection.
(f) During the term of this Agreement and during the term of the Manufacturing
and Sales Agreement entered into between the Parties as of the date of this
Agreement in respect of the exploitation of the IMPAC Product (the
"Manufacturing and Sales Agreement") each Party agrees to recognize and respect
the Intellectual Property of the other. It is understood and agreed by the
Parties that, except as expressly set out in this Agreement or in the
Manufacturing and Sales Agreement, neither Party is granted any license or other
right whatsoever to use any Intellectual Property or any other proprietary
information, technologies or capabilities of the other, whether for development,
manufacture, distribution or sale of the IMPAC Product or otherwise. For
greater certainty, and without limitation of the foregoing:
(i) it is understood and agreed by UTMC that, except as set out in Section
4.3(b) of the Manufacturing and Sales Agreement, no right is granted
by BrainTech to UTMC to use, for any purpose, any of the Intellectual
Property of BrainTech described in Part I of Schedule C hereto and any
improvements or other modifications thereto (the "BrainTech
Technology"), nor will any improvements or other modifications to the
BrainTech Technology made pursuant to the SOW or otherwise (including,
without limitation, any improvements or other modifications made to
the BrainTech Odysee Development Studio as described in item 4(a)(x)
of the SOW and any improvements or other modifications to the Vision
Recognition System made in connection with the preparation of that
system as described in item 4(a)(xi) of the SOW, and any applications
built with the Odysee Development Studio) comprise any part of the
IMPAC Product or of any Jointly Owned Intellectual Property; and
(ii) it is understood and agreed by BrainTech that, except as set out in
Section 4.1 of the Manufacturing and Sales Agreement, no right is
granted by UTMC to BrainTech to use, for any purpose, any of the
Intellectual Property of UTMC described in Part 2 of Schedule C hereto
and any improvements or other modifications thereto (the "UTMC
Technology"), nor will the UTMC Technology or any improvements or
other modifications to the UTMC Technology made pursuant to the SOW or
otherwise (and in particular, any improvements or other modifications
made to the UTMC CAM) comprise any part of the IMPAC Product or any
Jointly Owned Intellectual Property.
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(g) Each Party represents to the other that the activities to be carried on by
it pursuant to the SOW and the resulting Jointly Owned Intellectual Property
created by such activities will not, to the knowledge of such Party (upon
completion of reasonable due diligence investigations in respect thereof)
infringe upon nor violate any patent, copyright, trade secret, industrial design
or any other proprietary right of any person not a party to this Agreement.
7. MANUFACTURE AND SALE OF THE IMPAC PRODUCT
The Parties agree that, following the successful development of the IMPAC
Product, the IMPAC Product shall be manufactured, marketed, distributed and sold
pursuant to the terms of the Manufacturing and Sales Agreement. Except as
otherwise provided in this Agreement or in the Manufacturing and Sales
Agreement, neither Party may manufacture, market, distribute, sell or otherwise
exploit the IMPAC Product or any Jointly Owned Intellectual Property other than
pursuant to the Manufacturing and Sales Agreement or as otherwise agreed to in
writing by both Parties.
8. CONFIDENTIALITY
(a) Neither Party may disclose Confidential Information received from any other
Party without the prior written consent of the disclosing Party and then only to
the extent specified in such consent. Both Parties shall maintain the
confidentiality of the Confidential Information received from the other Party
with the same degree of care it uses to protect its own confidential and
proprietary information of like importance, but in no event less than a
reasonable degree of care. Each Party shall limit access to the Confidential
Information received hereunder to those employees and independent contractors
who have a business need for such access and have entered into appropriate
confidentiality agreements or if they have enforceable professional obligations
to maintain the confidentiality of the applicable information. Confidential
Information may only be copied and disseminated within a receiving Party's own
organization on a need to know basis. Confidential Information maybe used only
for the purposes outlined in this agreement.
(b) "Confidential Information" shall consist of any written, audible, visual or
oral information or physical items disclosed by a Party that is either
(i) marked with a restrictive legend or (ii) identified as confidential or
proprietary at the time of disclosure and is confirmed in writing by the
disclosing Party as such within fifteen (15) days after its disclosure, provided
that any proprietary software disclosed hereunder (including all written
materials provided in connection with such software) shall be deemed to be
"Confidential Information" until the commercial release thereof, whether or not
such software is legended or otherwise identified as confidential.
(c) The restrictions on disclosure of Confidential Information described in
Section 8(a) above shall not extend to any item of information which (i) is
publicly known at the time of its disclosure, (ii) is lawfully received from a
third party not bound in a confidential relationship to the other Party,
(iii) is published or otherwise made known to the public by the disclosing
Party, or (iv) is generated independently without reference to Confidential
Information received from the other Party. A Party may disclose Confidential
Information to the extent required by law,
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provided that the Party so required must give the original disclosing Party
prompt notice and shall reasonably cooperate with any effort by such
disclosing Party to obtain a protective order.
(d) The Parties are independent contractors, and no Party is the employee,
agent or customer of any other Party absent a separate binding written agreement
to that effect. Nothing contained in this agreement or any discussion between
the Parties, including without limitation any disclosure of Confidential
Information hereunder, will impair the rights of either Party to make, procure
and market products or services, now or in the future, which may be competitive
with those offered by the other Party.
(e) Each Party acknowledges that a violation of this Section 8 could cause
irreparable harm to the other Party for which no adequate remedy at law exists
and each Party therefore agrees that, in addition to any other remedies
available, a Party shall be entitled to seek injunctive relief to enforce the
nondisclosure obligations set forth in this section, without having to post a
bond.
(f) Upon demand of the disclosing Party, the recipient Party shall promptly
return any written Confidential Information of the other and all physical media
on which Confidential Information was received, including any copies thereof,
with a letter confirming that the Confidential Information has in no way been
reproduced or copied or that all copies have been returned. The obligations set
forth herein to hold Confidential Information disclosed by the other Party in
confidence expire three (3) years after the date of disclosure thereof, provided
that, with respect to an software disclosed in source code form, such
obligations shall be perpetual.
9. NO-HIRE
During the term of this Agreement, and for a period of two (2) years following
the date of delivery of the prototypes pursuant to Section 2 of the SOW, neither
Party shall employ or seek to employ any person who is at the time employed by
the other or by its subsidiary or affiliate, or otherwise induce any such person
to leave his or her employment, without the prior written consent of such
person's employer.
10. WARRANTIES AND REPRESENTATIONS OF BRAINTECH
BrainTech warrants and represents to UTMC that:
(i) it, or its wholly-owned subsidiary Brainware Systems Inc.
("Brainware), is the owner or licensee of the BrainTech Technology;
(ii) neither it nor Brainware has licensed the BrainTech Technology in a
manner which conflicts or would conflict with the terms of this
Agreement; and
(iii) it will conduct itself in the future, and will cause Brainware to
so conduct itself in the future, so as to protect and preserve,
for both Parties, the Jointly Owned Intellectual Property and,
for UTMC, the UTMC Technology, and UTMC's rights hereunder.
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11. WARRANTIES AND REPRESENTATIONS OF UTMC.
UTMC warrants and represents to BrainTech that:
(i) it is the owner of the UTMC Technology;
(ii) it has not licensed the UTMC Technology in a manner which conflicts
or would conflict with the terms of this Agreement; and
(iii) it will conduct itself in the future so as to protect and preserve,
for both Parties, the Jointly Owned Intellectual Property and, for
BrainTech, the BrainTech Technology, and BrainTech's rights
hereunder.
12. NOTICES
All notices required to be provided pursuant to this Agreement shall be written
and shall be delivered by personal delivery or facsimile to:
BrainTech, Inc. XXXX
000 - 000 Xxxx 0xx Xxxxxx 0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx, XX Xxxxxxxx Xxxxxxx, XX 00000
Xxxxxx X0X 0X0 XXX
Attention: The President Attention: The President
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Either Party may appoint another person or change the address to which notices
shall be delivered by providing written notice to the other Party.
13. RELATIONSHIP OF THE PARTIES
The relationship between the Parties established under this Agreement shall be
that of independent contractors. Nothing in this Agreement shall render either
Party responsible for any loss, expense, obligation, liability or debt of the
other Party. Neither Party will be required to develop or introduce any product
or perform any effort not expressly described in this Agreement. This Agreement
does not restrict either Party from pursuing independently other business
opportunities or selling its products.
14. NON-ASSIGNABILITY
Neither this Agreement nor any obligation contained herein may be assigned to or
transferred in any way by either Party without the express written consent of
the other Party, provided that some or all of the obligations of BrainTech
hereunder may be performed by Brainware Systems Inc., a British Columbia company
and a wholly-owned subsidiary of BrainTech.
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15. GENERAL
(a) The headings contained in this Agreement are included for convenience only
and are not to be used in construing or interpreting this Agreement.
(b) Whenever any event delays or threatens delay of performance under this
Agreement, BrainTech and/or UTMC shall promptly give written notice of such
event to each other, including all relevant information and its plan to address
such delay in an expeditious manner.
(c) The failure of either Party to insist, in one or more instances, upon the
performance of any of the terms, covenants or conditions of this Agreement and
the failure of either to exercise any right hereunder, shall not be construed as
a waiver or relinquishment of the future performance of any such term, covenant,
or condition or the exercise of such right, and the obligation of the other
Party with respect to such future performance shall continue in full force and
effect.
(d) This Agreement is made under and shall be construed under the laws of the
state of Colorado and constitutes the entire understanding of the Parties hereto
with respect to the subject matter of this Agreement. This Agreement and the
Manufacturing and Sales Agreement supersede all previous communications,
understandings and representations between the Parties with respect to the
subject matter hereof, including without limitation the letter of understanding
made between the Parties dated as of April 1, 1998. This Agreement may be
modified solely by a formal written amendment, executed by authorized
representatives of the Parties.
(e) The failure of either Party to perform its obligations delineated in this
Agreement shall constitute a default if not corrected within a reasonable period
of time from receipt of written notice by the defaulting Party from the non-
defaulting Party. Upon failure to cure the event of default, the defaulting
Party shall license to the other Party that intellectual property necessary to
complete development of the IMPAC Product. This license shall be irrevocable,
exclusive (for a period of five (5) years from the completion of the IMPAC
Product development), worldwide and bear a royalty at 10% of the net sales price
of the IMPAC Product developed under this Agreement. Royalties shall accrue and
become payable once the licensed Party recovers its costs of product development
and product introduction.
(f) The Parties both covenant to abide by all applicable federal, provincial,
state, local, and municipal laws and regulations ("Regulatory Requirements")
governing the types of activities contemplated by this Agreement. Each Party
shall indemnify and hold harmless the other for any damages, expenses,
liabilities, costs and fines suffered by one Party as a result of the other
Party's non-compliance with such Regulatory Requirements.
(g) In the event either Party declares there to be a claim against the other or
a dispute as to the performance of the other, the provisions of Article 6 of the
Manufacturing and Sales Agreement respecting dispute resolutions shall apply.
(h) Neither Party will use the other Party's name, logo or other proprietary
xxxx without the prior written consent of the other Party.
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(i) Each Party agrees that it shall take such action with its employees,
officers, directors, owners, agents, customers and suppliers as are necessary to
comply with the other Party's reasonable security and safety requirements while
such individuals are on the other Party's premises.
(j) This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
(k) Each party agrees to treat the terms of this Agreement and the
Manufacturing and Sales Agreement entered into pursuant to Section 7 as
Confidential Information. Any public announcement or press release regarding
this Agreement or the Manufacturing and Sales Agreement shall be limited to
general disclosure of the existence of the agreement, but not the terms thereof,
and shall be made at a time and place, and shall contain such information, as
the parties hereto may mutually agree.
IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first
above written.
BRAINTECH, INC. UTMC MICROELECTRONIC SYSTEMS INC.
/s/ XXXX XXXXX /s/ C.H. IDE
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Name: Xxxx Xxxxx Name: C.H. Ide
Title: President Title: President
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SCHEDULE A
STATEMENT OF WORK
1. INTRODUCTION
This statement of work defines the tasks, responsibilities and schedule required
of BrainTech and UTMC for the development and generation of a limited number of
prototypes of an Image Processing Accelerator Card (IMPAC) for use in vision
system applications. The scope of work defined in this document is limited to
development and prototype generation of the IMPAC and does not include any
integrated circuit development or any support activities beyond those specified.
Any requests for work considered outside the scope of this SOW will only be
considered as additions and may require a new statement of work. Agreement of
both parties is required to modify the schedules or scope of this SOW.
2. SCOPE
This statement of work covers BrainTech and UTMC tasks relating to the design
and fabrication of the IMPAC. Description of the IMPAC design is included as
Supplement 1, BrainTech Odysee System: Image Processing Accelerator Card
(IMPAC). North Shore Circuit Design, dated June 26, 1998. Development of the
IMPAC requires refinement of the conceptual IMPAC design, including final
component selection and acquisition, board organization and engineering
analysis, printed circuit board design and fabrication, pc board assembly and
test/debug, acquisition of development software and development of software
modules, and board and system checkout. Ten (10) IMPAC prototype boards will be
produced, five each for UTMC & BrainTech. The activities listed above are
shared by both parties and are defined later in this document. Development,
acquisition and checkout of the BrainTron Engine (R-II) and its associated
memory is not included in the scope of this SOW. The pc board will include
footprints for the BrainTron Engine and its associated memory, which may be
inserted at a later date. As defined in the Product Development Agreement, both
parties shall bear the cost of their own out-of-pocket expenses incurred in
performance of this SOW.
3. GENERAL RESPONSIBILITIES - BRAINTECH AND UTMC
Several of the activities to be performed are identified to a single party.
However, some activities are jointly shared or may be treated somewhat
differently and are not identified to a single party. The following definition
and general responsibility description is included to define the activities of
each party.
Page 2 of Supplement 1 (IMPAC design description) defines the IMPAC block
diagram. It is composed of the major components and their conceptual placement
on the pc board. For purposes of definition in this SOW the IMPAC block diagram
on page 2 is annotated to define
four logical blocks: the Microprocessor block, the CAM engine block, the
BrainTron block and the Interface block.
All blocks are timing sensitive. The Microprocessor and the BrainTron blocks
are best understood by BrainTech and will in general be handled by BrainTech.
Detailed directions on pc-board component placement and trace placement will be
provided for this section of the IMPAC by BrainTech to UTMC. The CAM engine and
the Interface blocks are best understood by UTMC and will in general be handled
by UTMC. CAM engine memory requirements, etc. will be determined by UTMC.
BrainTech and UTMC will mutually agree on a Power PC software development
environment which both will purchase. Each will develop Power PC applications
software using the software development environment as outlined below. Each
will develop host software (pc-based) as outlined below.
4. DELIVERABLES - BRAINTECH & UTMC
(a) BrainTech will:
(i) complete engineering analysis of the design (including all blocks)
(ii) provide parts lists
(iii) provide schematic diagrams
(iv) provide termination, test point, and pc board layout information
(v) provide program files for programmable components
(vi) develop host IMPAC interface software
(vii) acquire Power PC development software
(viii) develop IMPAC Power PC applications software
(ix) perform board and system checkout of the completed IMPAC boards
(x) modify BrainTech Odysee Development Studio to operate with the
IMPAC (utilizing the CAM engine)
(xi) prepare BrainTech's Video Recognition System to operate with the
IMPAC (utilizing the CAM engine)
(xii) attend the architectural review (AR), the preliminary design review
(PDR), the critical design review (CDR) and the Odysee IMPAC
demonstration
(b) UTMC will:
(i) complete engineering analysis and component selection for the CAM
engine memory requirements
(ii) design and fabricate the pc board
(iii) acquire all components
(iv) program the programmable components
(v) assemble the pc boards
(vi) develop host CAM engine test software
(vii) develop host CAM interface software
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(viii) acquire Power PC development software
(ix) develop CAM engine Power PC applications software (if required)
(x) develop test software for the CAM engine block, and perform testing
of the CAM portion of the pc board
(xi) assist BrainTech as required in preparing the Odysee/IMPAC
demonstration
(xii) host the architectural review (AR), the preliminary design review
(PDR), the critical design review (CDR) and the Odysee IMPAC
demonstration
Both parties will cross-check each other's information at various points during
the design process. An architectural review (AR) will be held within a month of
project start. A preliminary design review (PDR) will be held before pc board
layout. A critical design review (CDR) will be held before pc board
fabrication, programming of programmable components and pc board assembly.
After board and system checkout and debug, a demonstration of Odysee/IMPAC in a
vision system application will be held. All reviews and the Odysee/IMPAC
demonstration are shown in the attached schedule. Reasonable support will be
provided by each party to the other during the debug and checkout activities.
It is expected that limited modifications (jumper wires, etc.) may be required
to correct minor pc board anomalies.
5. SCHEDULE
A schedule is attached outlining the major activities. The schedule is
constructed based on tasks and task durations as discussed at the UTMC -
BrainTech May 21, 1998 meeting. Task ownership is shown in the "Owner" column,
and is denoted as UTMC, BTECH, or BOTH.
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SCHEDULE B
Following is a description of all Jointly Owned Intellectual Property:
SCHEDULE C
PART 1
The "BrainTech Technology" includes, without limitation, the Odysee Development
Studio, being an open object-oriented system incorporating software that allows
for the rapid design, construction and testing of sensor independent PC-based
vision systems applications capable of acquiring, digitizing, pre-processing and
classifying real world items, all as the same may be enhanced, amended,
modified, or improved from time to time.
PART 2
The "UTMC Technology" includes, without limitation:
(1) the UTCAM-Engine integrated circuit, being a dynamically configurable
content addressable memory engine which allows rapid access to large lookup
tables via associative keys rather than physical addresses. This includes
the ability to access exact or close matches at speeds which can not be
achieved with PC-based software implementations; and
(2) any other integrated circuits now or hereafter built using the UTCAM-Engine
core technology.
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