TECHNICAL SUPPORT AND COOPERATIVE DEVELOPMENT AGREEMENT
Effective the 1st day of November, 1996, in consideration of the mutual
covenants hereinafter set forth, SAC Technologies, Inc. ("SAC") and
Inter-Con/PC, Inc. ("Inter-Con"), intending to be legally bound, hereby covenant
and agree as follows:
SECTION 1 - PRODUCT DEFINITION
1.1 SAC shall use its best efforts to provide technical support
to the following products (the "Products") for the benefit of
Inter-Con:
1.1.1 Inter-Con PC Units - the Inter-Con PC Units will
consist of a main-board which supports 1-33 megabyte
of Dram with embedded VGA and I/O interfaces
consisting of floppy disk interface, fixed
disk/CD-ROM interface, 2 serial ports and 1 parallel
port. (See Specifications attached as Exhibit A (the
"Specifications")).
1.1.2 Mux-Panel - a system which allows for economic
connection of up to 256 simultaneous users to a PC
Compatible, Internet Access Switch, File Server,
Switching Network, and/or Computer Network, via
direct connect serial cards or modem cards that plug
into the Mux-Panel. The system will be expandable (in
16-slot increments) with a total of 16 external I/O
modules and one or more Data-Cops in the PC
Compatible, Internet Access Switch, File Server,
Switching Network, and/or Computer Network. (See
Specifications attached as Exhibit B (the
"Specifications")).
1.1.3 Data-Cop - a system for PC Compatible, Internet
Access Switch, File Server, Switching Network, and/or
Computer Network to connect up to 256 simultaneous
users via a standard hardware modem interface in a PC
Compatible, Internet Access Switch, File Server,
Switching Network, and/or Computer Network. The
Data-Cop will control modem port functions, packetize
data with encryption/de-encryption, and provide for
traffic routing through packet-ID/Command functions.
(See Specifications attached as Exhibit C (the
"Specifications")).
1.2 If either party proposes a change to the Specifications of the
Products, the other party will reasonably and in good faith consider
and discuss with the proposing party the proposed change. In the event
the parties mutually agree on a proposed change, the same, and the cost
of the same, shall be the subject of a subsequently negotiated
development agreement. SAC shall cooperate to the fullest reasonable
extent with Inter-Con regarding questions and design with respect to
its manufacturers.
SECTION 2 - PRODUCTS TO BE DESIGNED AND DEVELOPED
2.1 SAC is hereby contracted to design, develop and deliver to
Inter-Con the Mux Panel and Data-Cop Products as described in
Paragraphs 1.1.2 and 1.1.3 in accordance with the specifications in
Exhibits B and C hereof.
SECTION 3 - OBLIGATIONS OF INTER-CON IN TECHNICAL SUPPORT OF PRODUCTS
3.1 Inter-Con shall take the following actions in connection with the
technical support of the Products:
3.1.1 Advise and consult about the Products and their
applications.
3.1.2 Make available adequate laboratory space and
qualified personnel to participate in the technical
support of the Products at Inter-Con's location.
3.1.3 Advise and consult regarding the manufacturing of the
Products including, but not limited to, the design of
the Products for manufacturing efficiency and cost
reduction, as well as the ease of conducting quality
assurance and testing.
3.1.4 Advise and consult regarding competitive products and
new technical improvements and innovations to enable
the Products to remain competitive.
3.1.5 Advise and consult on the selection of independent
contract manufacturers.
3.1.6 Provide technical support to insure that the Products
designed by SAC comply with the Consumer Safety Act
of 1972.
SECTION 4 - OWNERSHIP OF THE PRODUCTS
4.1 Inter-Con shall own all right, title and interest (including patent
rights, copyrights, trade secrets rights, mask work rights and other
rights throughout the world) in the Products.
4.2 Inter-Con will use its best efforts to obtain appropriate patents
from the U.S. patent office unless, based on the advice of SAC's patent
counsel, SAC and Inter-Con mutually determine in good faith that it is
not desirable to patent any part or all of the Products.
4.3 Inter-Con shall own any and all rights, title and interest in the
marketing, licensing, development, manufacture and distribution of the
Products.
SECTION 5 - TECHNICAL SUPPORT OBLIGATIONS
5.1 As part of SAC's technical support of the Products, SAC will
endeavor to cause the Products to operate in substantially the same
manner as described in the Specifications. SAC, at its own expense,
upon receipt of written notice from Inter-Con, will endeavor to make
all adjustments and modifications necessary to cause the Products to so
operate and furnish the documentation and other material as to the
modification to Inter-Con.
5.2 SAC shall further be obligated to provide the following:
5.2.1 Advise and consult about the Products and their
applications.
5.2.2 Advise and consult regarding the manufacturing of the
Products including, but not limited to, the design of
the Products for manufacturing efficiency and cost
reduction, as well as the ease of conducting quality
assurance and testing.
5.2.3 Advise and consult regarding competitive products and
new technical improvements and innovations to enable
the Products to remain competitive.
5.2.4 Advise and consult on the selection of independent
contract manufacturers.
5.3 With the approval of Inter-Con, which approval shall not be
unreasonably withheld, and as the second aspect of SAC's technical
support of the Products, SAC may suggest suitable and durable
substitute components to the extent any specific components of the
Product are not suitable or durable or are not available because of
obsolescence, short supply or other reasons. If any such suggested
substitution requires redesign of the Products, then such redesign
shall be deemed to be a change to the Specifications of the Products.
SAC shall furnish appropriate documentation as to substituted
components.
5.4 SAC's technical support of the Products shall be to and for the
benefit of Inter-Con only, and (except as otherwise agreed to by SAC
and Inter-Con) shall not be to or for the benefit of any of Inter-Con's
customers.
5.5 In the event changes to the Specifications become necessary or
otherwise requested, the same shall not be part of SAC's obligations of
technical support, but instead shall be the subject of a subsequent and
mutually agreed upon development agreement.
SECTION 6 - INTER-CON'S PAYMENTS TO SAC
6.1 Inter-Con shall pay to SAC commencing on the first day of the month
next following the month in which the Inter-Con PC Unit described in
Section 1.1.1 has been fully developed in accordance with the
Specifications the amount of $15,566 per month as a retainer and fee
for the ongoing technical support of the Products during the first six
(6) months (November 1, 1996 to May 1, 1997) and for the next thirty
(30) months, a fee of $11,667 per month during the term of this
Agreement. Such payment shall accrue from November 1, 1996, but shall
not be payable until Inter-Con has received the minimum amount of
proceeds from the Initial Bridge Financing contemplated by Inter-Con.
6.1.1 An additional $4,167 shall be paid monthly commencing
on the first day of the month next following the
month in which the Mux Panel has been developed, in
accordance with the Specifications delivered to
Inter-Con and upon test found to meet the
Specifications by Inter-Con. Payment shall be only
due and payable as a fee for ongoing technical
support of the Mux Panel and shall terminate on the
termination of this Agreement.
6.1.2 An additional $4,167 shall be paid monthly commencing
on the first day of the month next following the
month in which the Data-Cop has been developed in
accordance with the Specifications delivered to
Inter-Con and upon test found to meet the
Specifications by Inter-Con. Payment shall only be
due and payable as a fee for ongoing technical
support of the Data-Cop and shall terminate on the
termination of this Agreement.
6.1.3 There will be no consideration paid to SAC in
addition to the technical amount set forth in
Sections 6.1.1 and 6.1.2 for the development, design
and delivery of either the Mux Panel or Data-Cop.
6.2 At such time as SAC is no longer providing technical support with
respect to any one of the Products, the monthly technical support
payment shall terminate with respect to such Products.
6.3 In addition to the aforesaid technical support payment, Inter-Con
shall pay to SAC quarterly on or before the 28th day next following the
end of each calendar quarter a royalty equal to two (2%) percent of the
net revenues collected by Inter-Con from the sale or lease of Products
for the subject quarter. Net revenues of the Products shall mean
revenues actually received from the sale less any allowances actually
made or taken for return shipping and insurance costs actually paid,
cash discounts, sales, use, value added and similar taxes and duties
and similar governmental assessments on Products as shipped. These
royalty payments shall terminate on the earlier of: (a) the sixth (6th)
anniversary date; or (b) at such time as Inter-Con files a registration
statement under Section 5 of the Securities and Exchange Act of 1933,
as amended, and as a result thereof Inter-Con completes an initial
public offering or in any other manner Inter-Con becomes a publicly
traded company. The foregoing royalty payments shall survive the
termination of this Agreement regardless of the cause of the
termination of the Agreement.
SECTION 7 - TERM
7.1 The term of this Agreement shall continue until October 31, 1999,
and at Inter-Con's option may be renewed for three (3) successive
one-year periods; provided, however, written notice is given to SAC
exercising its option to renew for each one-year period prior to the
expiration of each one-year period renewal.
SECTION 8 - USE AND PROTECTION OF PROPRIETARY INFORMATION
8.1 SAC acknowledges and agrees that all code, inventions, algorithms,
know-how, ideas, software, and all other business, technical and
financial information relating to the Products ("Proprietary
Information") embody proprietary information of substantial value to
Inter-Con. However, Inter-Con and SAC acknowledge and agree that the
code, inventions, algorithms, knowledge, ideas, and software included
in the Proprietary Information may be used by SAC in the development of
other non-competitive products. Accordingly, SAC agrees that it will
not use the Proprietary Information itself or for the benefit of any
other person to develop products which would compete directly or
indirectly with any of the Products or any improvements of such
Products and SAC shall maintain all Inter-Con business and financial
information in confidence and shall neither use, copy or disclose, nor
permit any personnel of SAC to use, copy, or disclose, such business
and financial information for any purpose not specifically authorized
under this Agreement or otherwise. In the event that Inter-Con or any
successor or assign of Inter-Con for any reason abandons either the
business of marketing, distributing or manufacturing the Products or
similar products for a period of twelve (12) consecutive months, then
the foregoing non-competition covenant agreement of SAC contained
herein shall be null, void and of no further force and effect.
8.2 SAC shall require that the Products' software and hardware design
documents be kept in separate, secure drawers, cabinets, or storage
rooms, subject to restricted access by only select, authorized persons.
8.3 SAC acknowledges that any use or disclosure of Proprietary
Information by SAC or its personnel in a manner not authorized by this
Agreement would likely cause Inter-Con irreparable damage that could
not be fully remedied by monetary damages. The parties therefore agree
that Inter-Con shall have the right to obtain such injunctive or other
equitable relief from a court of competent jurisdiction as may be
necessary or appropriate to prevent such unauthorized or unlawful
action.
8.4 Notwithstanding anything to the contrary, the provisions of this
Section 8 shall not apply to information which: (i) is or has become
readily available without restriction through no fault of the receiving
party or its employees or agents; (ii) is received without restriction
from a third party lawfully in possession of such information and
lawfully empowered to disclose such information; or (iii) was
rightfully in the possession of the receiving party without restriction
prior to its disclosure by the other party.
8.5 The provisions of this Section 8 shall survive termination of this
Agreement.
SECTION 9 - FORCE MAJEURE AND EXCUSABLE DELAYS
9.1 Neither party shall be liable for any costs or damages attributable
to nonperformance (including delays on the part of SAC in making
deliveries hereunder) arising out any "Event of Force Majeure," which
shall consist of any cause not within its reasonable control and not
due to its fault or negligence.
9.2 Each party shall give the other party prompt notice of the
occurrence of any Event of Force Majeure that is expected to cause
delay hereunder, and the date of performance by any such party shall be
extended for a period not exceeding the period of delay caused by the
Event of Force Majeure identified in such notice.
SECTION 10 - TERMINATION
10.1 This Agreement may be terminated as follows:
10.1.1 If SAC fails to discharge any material
obligation or remedy any default under this
Agreement for a period of more than 60 days
after Inter-Con has given SAC written notice
of such failure then Inter-Con may terminate
this Agreement by giving written notice to
SAC.
10.1.2 If Inter-Con fails to discharge any material
obligation or remedy any default under this
Agreement for a period of more than 60 days
after SAC has given Inter-Con written notice
of such failure then SAC may terminate this
Agreement by giving written notice to
Inter-Con.
10.2 If this Agreement is terminated by either party in accordance with
this Section 10:
10.2.1 Inter-Con shall have no further obligation
to pay any money to SAC nor any further
obligation to cooperate in the continued
development of the Products by SAC, and SAC
shall have no further obligation to support
the Products or cooperate in the continued
development of them.
10.2.2 Inter-Con shall have ownership of SAC's
software and hardware designs as they exist
on the date of termination with respect to
the Products.
10.3 In addition to any other rights and remedies contained in
Sections 10.2.1, 10.2.2 and 10.2.3, either party shall have all other
rights and remedies under applicable law, all of which rights and
remedies shall be cumulative and non-exclusive to the extent permitted
by law. In addition, certain obligations of each party under this
Agreement are unique. If any party should default in its obligation
under this Agreement, the parties acknowledge that in certain
circumstances which are reasonably determined by a party, it would be
extremely impractical to measure the resulting damages, and
accordingly, the non-defaulting party, in addition to any other
available rights or remedies set forth in the preceding sentence may
xxx in equity for specific performance and the parties each expressly
waive the defense that a remedy in damages will be adequate.
10.4 Should any litigation be commenced between Inter-Con and SAC
concerning this Agreement, the prevailing party in such litigation will
be entitled in addition to such other relief as may be granted, to a
reasonable sum as and for its attorneys fees and court costs in such
litigation which shall be determined by the court in such litigation as
any separate action brought for that purpose.
SECTION 11 - MISCELLANEOUS
11.1 This Agreement shall be binding upon the successors and assigns of
the parties hereto; provided, however, that no assignment shall be made
by either party without the prior written consent of the other party.
Any attempt by either party to assign this Agreement or any of the
rights or duties hereunder contrary to the foregoing provision shall be
void.
11.2 Any notice permitted or required under this Agreement shall be
deemed given when mailed by certified mail, return receipt requested,
postage prepaid, or when dispatched by telegram or facsimile (and
followed by a written confirmation mailed by certified mail, return
receipt requested, postage prepaid, within 4 hours after such
dispatch). Mail shall be addressed as follows:
if to Inter-Con: if to SAC:
0000 Xxxxxxxxx Xxxxx, Xxxxx 000 0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000 Xxxxx, XX 00000
or to either party at such other address as shall have notified the
other pursuant to this Section 11.2
11.3 This Agreement constitutes the entire agreement between SAC and
Inter-Con with respect to SAC's development and support of the Products
for Inter-Con, and supersedes all prior oral or written agreements and
understandings and may be modified or amended only in a writing signed
by the parties. No representation, promise, inducement, or statement of
intention has been made or relied upon by any party hereto that is not
set forth in this Agreement and the exhibit referred to herein.
11.4 Inter-Con shall pay directly to SAC's attorneys reasonable costs
and fees in connection with the negotiation, execution and delivery of
this Agreement.
11.5 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Minnesota in all respects. If
any term of this Agreement conflicts with the law, all other terms of
this Agreement shall remain in effect and enforceable. Any suit,
action, litigation or other proceeding in connection with this
Agreement, or the agreements and documents executed and delivered
hereunder, will be brought, prosecuted and resolved solely in the state
or federal courts located in Hennepin County, Minnesota, and each party
hereby waives any objections it may have to the personal jurisdiction
of such courts.
11.6 The provisions of this Agreement which on their face anticipate
their survival, including but not limited to the provisions of Sections
6.3 (to the extent provided therein) and 8 of this Agreement, shall
survive the expiration or termination of this Agreement. The parties
hereto agree that each party's obligations herein are unique and that
upon breach of any such agreement, damages or other remedy at law may
be inadequate. Therefore, the rights and obligations of the parties
under this Agreement may be enforceable by appropriate equitable relief
such as specific performance, restraining orders and preliminary or
permanent injunctions. Such remedy shall, however, be cumulative and
not exclusive and shall be in addition to any other remedies which any
party may have under this Agreement or otherwise.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their duly authorized corporate officers as of the day and year
first above written.
INTER-CON/PC, INC. SAC TECHNOLOGIES, INC.
By:/s/ illegible By: /s/ Xxxxx Xxxxx
---------------------------- --------------------------------
Its: CEO Its: CEO
---------------------------- --------------------------------
EXHIBIT A
INTER-CON/PC
SET TOP BOX Specification
The Inter-Con/PC Set Top consists of a main-board which supports 1-33 Meg/Byte
Dram with embedded VGA and I/O interfaces consisting of floppy disk interface,
fixed disk/CD Rom interface, 2 serial ports and 1 parallel port.
The unit supports booting from ROM and running either ROM resident or disk
resident DOS/Windows applications.
The system is based on a 000XX0-000 Xxx or faster CPU with additional embedded
logic and components consisting of the following:
1 MEG/on board DRAM Memory with SIMM expansion connector.
2 MEG/on board FLASH Memory for embedded or down-loadable applications.
VGA to NTSC for driving a TV and software pan & zoom - via - wireless infra-red
keyboard/w-mouse control.
Security system interface for home or business application such as interfacing
to infra-red motion sensors.
Embedded hardware serialization for product & application protection.
14.4 baud modem with RJ-11 interfaces for external line.
Wireless Keyboard Interface, (Infra-red).
Wireless Infra-red Keyboard, W/Track Ball Mouse.
ISA expansion, 2 slots.
One - 3 1/2" floppy disk drive
Case and Power supply. Commercial Unit size of 8" Wide by 10" Deep and 2 1/4"
High.
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SAC TECHNOLOGIES, Inc.________________ Inter-Con/PC, Inc._______________
DATE: October 24, 1996
DISTRIBUTED BY:
INTER-CON/PC, INC.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000
(000) 000-0000 Office (000) 000-0000 Fax
EXHIBIT B
MUX-PANEL SPECIFICATION
* Support connection of up to 256 users via direct connection serial cards,
modem cards or "Data-Cops".
* Modular-design back panel consisting of 16 ISA card slots each, which can
be connected to form a 16 back panel that supports 256 users.
* Each back panel provides support for 16 ISA cards as detailed in Item No. 1
with a local back panel CPU which provides for data routing between users
connected to the Mux- Panel and/or from the Mux-Panel to a locally
connected PC via a Data-Cop installed in the PC.
* Local firmware (each back panel) which provides for intelligent background
data routing transparent to the local PC. Firmware will recognize special
Inter-Con/PC packet protocol headers for data routing purposes.
* Each user's installed communication hardware will appear as a standard
PC-COM Port to the Mux-Panel system.
EXHIBIT C
DATA-COP SPECIFICATION
* Uses 1 standard ISA-PC slot.
* Appears as 256 consecutive comm ports to the host-PC.
* Performs data packetizing/de-packetizing, data encryption/de-encryption,
data compression/de-compression and standard hardware modem data flow
functions.
* Provides for local PC to Mux-Panel interface.
* Provides for Mux-Panel to Mux-Panel data routing.
