1
EXHIBIT 10.20
*Certain information in this document has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
TECHNOLOGY PRODUCT DEVELOPMENT AGREEMENT
IMMERSION CORPORATION AND LOGITECH, INC.
This Technology Product Development Agreement (the "Agreement") between
Immersion Corporation, a California corporation, with principal offices
in San Jose, California (hereinafter "Immersion") and Logitech Inc., a
California corporation, with principal offices in Fremont, California
(hereinafter "Logitech"), is entered into as of April 13, 1998 (the
"Effective Date").
RECITALS
WHEREAS, Logitech and Immersion desire to establish a mutually
beneficial business relationship and to develop, verify and launch under
their best efforts high quality and competitively priced "FEELit Mouse"
force-feedback Planar Force Feedback Cursor Control Devices; and,
WHEREAS, Immersion is in the business of developing certain computer
peripheral force feedback industrial, business, gaming, arcade and
medical devices, and represents it is the owner and/or licensee of
certain know-how, trade secrets and issued or pending patents; and,
WHEREAS, Logitech is in the business of developing, manufacturing and
distributing software and electrical computer peripheral devices such as
input data, gaming, and control devices including, but not limited to,
Planar Force Feedback Cursor Control Devices, and represents it is the
owner and/or licensee of certain know-how, trade secrets and issued or
pending patents; and,
WHEREAS, Logitech desires to develop internally and with third parties,
use, manufacture and distribute Planar Force Feedback Cursor Control
Devices which utilize FEELit Mouse technology.
NOW, THEREFORE, in consideration of the promises and agreements set
forth below and the other consideration cited herein, the parties agree
as follows:
1. PURPOSE AND SCOPE OF THE AGREEMENT
1.1 PURPOSE. The purpose of this Agreement is to expressly define the
terms and conditions of Logitech's and Immersion's business
relationship with respect to force-feedback Planar Force Feedback
Cursor Control Device projects.
2
1.2 SCOPE. The scope of this Agreement encompasses Immersion's and
Logitech's respective development, service and support rights and
obligations regarding Planar Force Feedback Cursor Control Device
projects provided for herein.
2. DEFINITIONS
In this Agreement, including the Exhibits hereto, the following words
and expressions shall have the following meanings:
2.1 AFFILIATES. This means any corporation or business entity which
is controlled by, controls, or is under common control of a
Party. For this purpose, the meaning of the word "control" shall
include, without limitation, direct or indirect ownership of more
than fifty percent (50%) of the voting shares of interest of such
corporation or business entity.
2.2 DEFECT. This means, with respect to any non-software Deliverable,
failure to materially conform to the applicable then-current
Specifications for such non-software Deliverable.
2.3 DEFECT CORRECTION. This means either a modification or addition
that eliminates or works around a Defect in a non-software
Deliverable so as to cause the non-software Deliverable to comply
with the applicable then-current Specification.
2.4 DELIVERABLES. This means the various deliverables, which are
tangible implementations or items, including interim deliverables
or final prototype deliverables, identified as such and described
in Exhibit B ("Development Schedule"), or any subsequent
development schedule attached hereto by amendment.
2.5 ENHANCEMENT OR ENHANCEMENTS. This means any force-feedback
modification or addition made by Immersion under the terms of
Section 6.7 ("Other Development") and Section 7.2 ("Enhancements
by Immersion"), for the Planar Force Feedback Cursor Control
Field of Use, and which is a tangible implementation, other than
a Defect Correction or Error Correction, that when incorporated
into the Planar Force Feedback Cursor Control Device, materially
reduces the product cost of a Planar Force Feedback Cursor
Control Device, or materially changes the functional capability,
or form factor.
2.6 ERROR. This means, with respect to any software Deliverable,
failure of any such software Deliverable to materially conform to
the applicable then-current Specification for such software
Deliverable.
2
3
2.7 ERROR CORRECTION. This means either a modification or addition
that eliminates or works around an Error in the software
Deliverable so as to cause the software Deliverable to comply
with the then-current Specification.
2.8 FEELIT MOUSE PRODUCT. This means the final production version of
the mouse described in the first Exhibit A ("Specifications")
which utilizes and/or contains Immersion Product Model
Technology, including but not limited to the applicable Immersion
Software, documentation, Defect Corrections and Error Corrections
thereto.
2.9 FINAL PROTOTYPE. This means a Deliverable which is the final
functional form of the Planar Force Feedback Cursor Control
Device, if any, including software and hardware, produced by
Immersion under a development schedule, which prototype serves as
a model for the final production version of the Planar Force
Feedback Cursor Control Device, if any, and which conforms to the
applicable Specification.
2.10 IMMERSION PRODUCT MODEL TECHNOLOGY. This means that subset of
Immersion Technology delivered as a Deliverable under the terms
of a development schedule, or as an Enhancement or New
Technology, which is actually utilized in or in connection with
and/or embedded in the final production version of the FEELit
Mouse Product, any subsequent Product Model of the FEELit Mouse
Product or any Product Model of any Planar Force Feedback Cursor
Control Device.
2.11 IMMERSION SOFTWARE. This means the driver software and computer
firmware subset of the Immersion Product Model Technology
actually utilized in or in connection with and/or embedded in the
final production version of the FEELit Mouse Product, any
subsequent Product Model of the FEELit Mouse Product or any
Product Model of any Planar Force Feedback Cursor Control Device
that acts as an interface to and controls the FEELit Mouse
Product, any subsequent Product Model of the FEELit Mouse Product
or any Planar Force Feedback Cursor Control Device.
2.12 IMMERSION TECHNOLOGY. This means any and all technology created
or acquired by Immersion, or licensed to Immersion by third
parties, including but not limited to software created by
employees or consultants of Immersion, (i) first developed or
reduced to practice before or after the Effective Date solely by
Immersion independent of the scope of the work under this
Agreement or (ii) first developed or reduced to practice after
the Effective Date and within the scope of a Deliverable
developed solely by Immersion (a) under a development schedule in
effect under the terms of this Agreement, (b) as an Enhancement
or (c) as New Technology.
3
4
2.13 INTELLECTUAL PROPERTY LICENSE AGREEMENT. This means the
Intellectual Property License Agreement between Immersion and
Logitech dated the same date as this Agreement.
2.14 JOINT TECHNOLOGY. This means any and all technology created
and/or invented jointly by Immersion and Logitech employees or
consultants after the Effective Date and within the scope of
development of the FEELit Mouse Product or any Planar Force
Feedback Cursor Control Device and/or any Enhancements under the
terms of this Agreement. The term "Joint Technology" specifically
excludes Immersion Technology and Logitech Technology.
2.15 LOGITECH PRODUCT MODEL TECHNOLOGY. This means that subset of
Logitech Technology which is actually utilized in or in
connection with and/or embedded in the final production version
of the FEELit Mouse Product, any subsequent Product Model of the
FEELit Mouse Product or any Product Model of any Planar Force
Feedback Cursor Control Device.
2.16 LOGITECH TECHNOLOGY. This means any and all technology created or
acquired by Logitech, or licensed to Logitech by third parties,
including but not limited to software created by employees or
consultants of Logitech (i) first developed or reduced to
practice before or after the Effective Date solely by Logitech
independent of the scope of the work under this Agreement or (ii)
first developed or reduced to practice after the Effective Date
solely by Logitech and within the scope of a development schedule
in effect under the terms of this Agreement.
2.17 PLANAR FORCE FEEDBACK CURSOR CONTROL FIELD OF USE. This means the
market for Planar Force Feedback Cursor Control Devices which are
not targeted for use in specific applications or designed for
specific applications. The Planar Force Feedback Cursor Device
Field of Use does not include the market for products
specifically targeted for use in gaming, medical, industrial,
human disabilities, military, automotive, scientific and arcade
products and applications.
2.18 PLANAR FORCE FEEDBACK CURSOR CONTROL DEVICE(S). This means (i) a
force feedback computer cursor control device having the
capability of tracking position of an endpoint in a two
dimensional plane and applying two dimensional planar forces upon
the user through said endpoint and (ii) one-dimensional force
feedback cursor control embodiments, including but not limited to
a force feedback roller for "roller mouse" cursor control
embodiments. Planar Force Feedback Cursor Control Devices include
but are not limited to the FEELit Mouse Product. The endpoint may
be a mouse handle, stylus, finger tip receptacle, ball, or other
manipulandum that can be moved by the user in two dimensional
plane. A Planar Force Feedback Cursor Control Device can be
mounted in any housing including but not limited to a housing
shared by a
4
5
keyboard, track ball or other interface peripheral that provides
additional functionality. Planar Force Feedback Cursor Control
Devices specifically do not include (i) devices that can apply
three dimensional forces through the device or (ii) a "Gaming
Device" as that term is defined in the Intellectual Property
License Agreement between Immersion and Logitech dated April 2,
1997.
2.19 NEW TECHNOLOGY. This means any force-feedback technology
modification or addition made by Immersion, for the Planar Force
Feedback Cursor Control Field of Use, other than a Defect
Correction or Error-Correction, that when incorporated into a
Planar Force Feedback Cursor Control Device, materially changes
the utility, efficiency, market value, functional capability or
application, and which is developed by Immersion on a
non-exclusive basis and made "generally available" for use in
Planar Force Feedback Cursor Control Devices in the Planar Force
Feedback Cursor Control Field of Use and which is delivered by
Immersion to Logitech as a tangible implementation pursuant to
the terms of Section 7.4 ("New Technology"). For purposes of this
definition, "generally available" shall mean offered under
nonexclusive license to any one unaffiliated third party (other
than the original third party for whom the technology,
modification or addition was originally developed) for use in
Planar Force Feedback Cursor Control Devices in the Planar Force
Feedback Cursor Control Field of Use.
2.20 OEM OR OEMS. This means any third party (not including
Affiliates) that does not manufacture Planar Force Feedback
Cursor Control Devices and that wishes to purchase finished
Planar Force Feedback Cursor Control Devices for sale in the
Planar Force Feedback Cursor Control Field of Use under its own
brand name.
2.21 PARTY OR PARTIES. This means Immersion and/or Logitech.
2.22 PRODUCT LAUNCH. This means the date on which first
commercial-level shipping of the FEELit Mouse Product or any
Product Model commences to third party unaffiliated customers of
Logitech or a Logitech Affiliate.
2.23 PRODUCT MODEL. This means a single model of the FEELit Mouse
Product or any other Planar Force Feedback Cursor Control Device.
"Product Model" shall mean each variation of a FEELit Mouse
Product or Planar Force Feedback Cursor Control Device which (i)
differs by virtue of addition of or alteration through an
Enhancement or (ii) constitutes a change in form factor or (iii)
incorporates a material change in force-feedback functionality
made by a party other than Immersion. Purely cosmetic alterations
(e.g., color or styling) to the physical appearance of the FEELit
Mouse Product or a Planar Force Feedback Cursor Control Device,
or changes that do not alter the force-feedback functionality but
reduce manufacturing costs shall not be deemed a Product Model.
5
6
2.24 QUARTER OR QUARTERS. This means Logitech's yearly fiscal
quarters. Specifically, Logitech's yearly fiscal quarters begin
and end on the following dates: first quarter, April 1 - June 30;
second quarter, July 1 - September 30; third quarter, October 1 -
December 31; and fourth quarter, January 1 - March 31.
2.25 ROYALTY BEARING PRODUCT. This means a Planar Force Feedback
Cursor Control Device which either (1) incorporates or utilizes
Immersion Product Model Technology that is not otherwise made
generally available to the public by Immersion without charge or
(2) is covered by a Licensed Patent as defined in the
Intellectual Property License Agreement or by a copyright of
Immersion embodied in any Immersion Product Model Technology that
is not otherwise made generally available to the public by
Immersion without charge generally.
2.26 SPECIFICATION(S). This means the FEELit Mouse Product
specification attached hereto as Exhibit A ("Specification") and
each Planar Force Feedback Cursor Control Device specification
associated with a development schedule which is attached by
amendment to this Agreement.
2.27 YEAR. This means any full four-Quarter period.
2.28 Any reference to the words "PURCHASE," "SALE," or "SELL," when
used in connection with intellectual property, shall mean
license.
3. EXHIBITS
The following Exhibits shall be attached hereto and incorporated in
their entirety by this reference.
EXHIBIT A ("Specification"), the Specification, contains the description
of the FEELit Mouse Product.
EXHIBIT B ("Development Schedule"), the Development Schedule, contains
the Milestones, Deliverables and Deliverable Due Dates. The parties
agree to complete Exhibit B within thirty (30) days of the Effective
Date and add such Exhibit B to this Agreement by written amendment
within such time period.
EXHIBIT C ("Change Order Form"), is the Change Order Form.
EXHIBIT D ("Software License Agreement") is the end user software
license agreement.
EXHIBIT E ("Immersion Packaging Labeling Specification") is the
Immersion Packaging Labeling specification.
6
7
4. TERM
The initial term of this Agreement shall be for a period of five (5)
years commencing on the Effective Date, unless otherwise earlier
terminated by the Parties according to the terms of this Agreement.
Thereafter, this Agreement shall automatically renew for subsequent
two-year periods, unless either party terminates the Agreement by
written notice at least one hundred eighty (180) days prior to the end
of the initial term or any renewal term.
5. ENGAGEMENT OF SERVICES
5.1 PROJECT ASSIGNMENT. Subject to the terms of this Agreement,
Immersion and Logitech will render the services and develop the
Deliverables described in Exhibit B ("Development Schedule"),
based upon Exhibit A ("Specifications"), which development
schedule and/or Specification may be modified by the Parties from
time to time in accordance with the procedures described in
Section 6.6 ("Modification of Specification"). Immersion shall
dedicate full-time employees of sufficient technical and
professional caliber to define, develop, complete and verify the
Planar Force Feedback Cursor Control Device it develops with
Logitech in accordance with Exhibit B ("Development Schedule"),
based on Exhibit A ("Specifications"), and will assist Logitech
in launching and supporting the resulting Planar Force Feedback
Cursor Control Device in accordance with the terms of Section 7.1
("Technical Service and Support").
5.2 PERFORMANCE OF SERVICES. Logitech has selected Immersion to
perform the services described in this Agreement based upon
Logitech receiving Immersion's personal services. Immersion may
not, therefore, subcontract or otherwise assign and delegate its
obligations under this Agreement without Logitech's prior written
consent.
5.3 PRESS RELEASE. Each of the Parties agree to credit appropriately
the other Party in all press releases, promotions, advertisement
and announcements that mention the force feedback Planar Force
Feedback Cursor Control Devices. Prior to a Party releasing any
information that references the other Party, the publishing Party
shall obtain the other Party's prior written approval. The
parties shall announce their FEELit Mouse partnership within six
months of the Effective Date.
6. PLANAR FORCE FEEDBACK CURSOR CONTROL DEVICE DEVELOPMENT
6.1 FUNDING. Logitech shall fund all costs related to its internal
development of the Planar Force Feedback Cursor Control Devices.
In consideration of the duties and obligations of Immersion with
respect to its development obligations hereunder for Logitech,
Logitech will pay Immersion on a reasonable time and material
basis. Immersion will be liable for all taxes levied against
Immersion which arise
7
8
in connection with Immersion's performance under this Agreement
and the payments received from Logitech. Any payment designated
as due and payable based upon completion of development of a
specified Deliverable(s) and acceptance by Logitech shall not be
payable until Logitech's acceptance thereof.
6.1.1 FEELit MOUSE PRODUCT FUNDING. In consideration of the
duties and obligations of Immersion with respect to
development pursuant to Exhibit B ("Development Schedule")
by Immersion, Logitech will pay Immersion a total amount
of three hundred and sixty two thousand dollars ($362,000)
(US Dollars) ("Development Fee"), which sum is in addition
to the eight thousand dollars ($8,000) to be paid by
Logitech to Immersion under the terms of the Parties'
Phase 0 Term Sheet, receipt of which previous payment is
hereby acknowledged by Immersion. The Development Fee will
be payable based on a segmented development schedule with
scheduled deliverables as described in Exhibit B
("Development Schedule").
6.2 DEVELOPMENT MILESTONES. Immersion's development obligation under
the terms of this Agreement as described in Exhibit B
("Development Schedule") shall be conducted on a first priority
basis. The FEELit Mouse Product development schedule is described
with particularity in Exhibit B ("Development Schedule") and the
schedule is divided into milestones ("Milestones"), each of which
require the delivery of one or more Deliverables on specific
Deliverable due dates ("Deliverable Due Dates"). Upon completion
of each Milestone associated with a Deliverable under Exhibit B
("Development Schedule") as amended in writing by the Parties
from time to time, Immersion shall promptly deliver to Logitech
the applicable Deliverable called for under such Milestone.
Logitech agrees to promptly complete and deliver to Immersion
Deliverables required to be completed and delivered by Logitech
pursuant to the terms of Exhibit B ("Development Schedule").
6.3 DELIVERY AND ACCEPTANCE OF DELIVERABLES BY LOGITECH. Upon
completion of each Deliverable, Immersion shall deliver to
Logitech such Deliverable, including documentation, if included
as part of the Deliverable requirement, for evaluation by
Logitech. Logitech shall review, test, and evaluate each
Deliverable and where indicated in the Development Schedule,
accept or reject each Deliverable in accordance with Exhibit B
("Development Schedule") and make the associated payment, if any,
for accepted Deliverables. Logitech shall provide Immersion with
written acceptance of each Deliverable (for which acceptance is
indicated as a requirement in the Development Schedule), or a
written statement of Defects and/or Errors to be corrected within
ten (10) business days after such delivery unless a different
acceptance time period for a Deliverable is described in Exhibit
B ("Development Schedule") or as otherwise mutually agreed upon
in a
8
9
writing signed by the Parties. Immersion shall promptly correct
such Defects and/or Errors and return the corrected Deliverables
for retesting and reevaluation, and unless otherwise provided for
in Exhibit B ("Development Schedule"), Logitech shall within ten
(10) business days after such redelivery provide Immersion with
written acceptance or a statement of Defects and/or Errors to be
corrected. The foregoing procedure shall be repeated until
Logitech accepts the Deliverable or finally rejects the
Deliverable and either terminates the Agreement or the
development project related to the unacceptable Deliverable
pursuant to Section 12 ("Termination").
6.4 PROGRAM MANAGERS. Immersion and Logitech shall each appoint a
program manager ("Program Manager"). Each Party reserves the
right to change such Program Manager, at any time, upon written
notice to the other Party. Immersion's appointed Program Manager
as of the Effective Date is Xxx Xxxxxx. Logitech's appointed
Program Manager as of the Effective Date is Laurent Plancherel.
6.5 STATUS MEETINGS. The Parties shall notify each other of any
anticipated problems and any indication of delay in fixed or
tentative schedules. At least once each month, the Parties shall
conference, as mutually agreed, for progress discussions
describing in detail the status of the work performed and
discussion of possible resolution of any problems which have
arisen.
6.6 MODIFICATION OF SPECIFICATION. Logitech may modify the
Specifications at any time during development after consulting
with Immersion. If any such modification requires an increase in
the time or cost to perform by Immersion, an equitable adjustment
shall be negotiated and mutually agreed upon in writing by
Immersion and Logitech. Such changes will be implemented only
pursuant to a change order form in the form of Exhibit C ("Change
Order Form"), signed by both Parties. Such changes will become
effective and will be deemed incorporated into the Agreement as
an amendment to the applicable exhibit or section of the
Agreement. This procedure is used to control the technical
configuration of the Deliverables, as well as to control and
document costs and schedules. Logitech shall not be liable for
any work performed by Immersion which differs from the
then-current Specification and/or development schedule prior to
such work being authorized in a signed Change Order Form.
6.7 OTHER DEVELOPMENT. Should Logitech desire to have Immersion
design other Planar Force Feedback Cursor Control Devices after
the FEELit Mouse Product and/or Enhancements, the Parties will
mutually agree in writing upon a supplemental development
schedule substantially in the form of Exhibit B
("Development Schedule"), and reasonable associated development
fees, and an accompanying Exhibit A ("Specifications") and shall
amend this Agreement to
9
10
incorporate such project. Except as provided in Section 7.4 ("New
Technology"), all terms and conditions of this Agreement, and the
Intellectual Property License Agreement including royalty rates
set forth in the Intellectual Property License Agreement, Section
3 ("Royalties"), shall apply to any Planar Force Feedback Cursor
Control Device developed under this Agreement unless otherwise
mutually agreed in writing.
7. IMMERSION'S POST-DEVELOPMENT OBLIGATIONS
7.1 TECHNICAL SERVICE AND SUPPORT. Immersion shall provide Logitech
with ongoing engineering and technical support up to at least
sixty (60) hours per week for the Planar Force Feedback Cursor
Control Device, as reasonably requested by Logitech. So long as
Logitech has "preferred customer status," Immersion will provide
such ongoing engineering and technical support on a first
priority basis. If Logitech does not have "preferred customer
status", Immersion will continue to provide such ongoing
engineering and technical support on an as-available basis
without the sixty (60) hour per week minimum commitment. In
consideration of any such support, whether on a priority or
as-available basis, Logitech shall pay Immersion at a reasonable
time and materials rate.
7.1.1 EXCEPTION. Immersion shall promptly provide Error
Corrections without charge for any Errors, including
software Errors in any Immersion Software including any
firmware.
7.2 ENHANCEMENTS BY IMMERSION. So long as Logitech has "preferred
customer status," and in accordance with Section 6.7 ("Other
Development") above, an Enhancement project shall be scheduled on
a first priority basis. If Logitech does not have "preferred
customer status", Immersion may agree to provide Enhancements
under the terms of this Section 7.2 ("Enhancements by Immersion")
on a case by case and time available basis but Immersion will be
under no obligation to accept an Enhancement project.
7.3 OEM REFERRAL. Should an OEM contact Immersion concerning
manufacture of a Planar Force Feedback Cursor Control Device for
the Planar Force Feedback Cursor Control Field of Use, Immersion
agrees to direct such OEM to contact Logitech with respect to
manufacturing such Planar Force Feedback Cursor Control Device.
The obligation of Immersion to direct OEMs to Logitech is
independent of Logitech having "preferred customer status" and is
not required for such referrals. Logitech agrees that when
contacted by any OEM referred by Immersion, Logitech will include
Immersion Product Model Technology and/or technology covered by
the Licensed Patents as defined in the Intellectual Property
License Agreement in any initial proposals or designs for
manufacturing a Planar Force Feedback Cursor Control Device for
such OEM. If Logitech's proposal or
10
11
design incorporating Immersion Product Model Technology and/or
technology covered by the Licensed Patents as defined in the
Intellectual Property License Agreement is accepted, Logitech
agrees to make good faith efforts to utilize Immersion Product
Model Technology and/or technology covered by the Licensed
Patents as defined in the Intellectual Property License Agreement
in the Planar Force Feedback Cursor Control Device manufactured
for such OEM and to pay royalties therefor to Immersion in
accordance with this Agreement. If the OEM in its own discretion
elects to reject Logitech's proposal and/or design which
incorporates Immersion Product Model Technology and/or technology
covered by the Licensed Patents as defined in the Intellectual
Property License Agreement, then (i) Immersion agrees and
acknowledges that Logitech may manufacture a Planar Force
Feedback Cursor Control Device for the OEM without incorporating
Immersion Product Model Technology and/or technology covered by
the Licensed Patents and (ii) Logitech agrees and acknowledges
that Immersion may enter into an agreement with the OEM with
respect to Planar Force Feedback Cursor Control Devices in the
Planar Force Feedback Cursor Control Field of Use.
7.4 NEW TECHNOLOGY. So long as Logitech has "preferred customer
status", if Immersion develops and decides to make "generally
available" and to license, on a nonexclusive basis, to any one
unaffiliated third party (other than the original third party for
whom the New Technology was originally developed) any New
Technology for use in Planar Force Feedback Cursor Control
Devices in the Planar Force Feedback Cursor Control Field of Use,
Immersion shall provide Logitech with an opportunity to license
such New Technology, under the terms of a separate agreement, on
a nonexclusive basis and on terms at least as favorable as those
upon which such New Technology is offered by Immersion to others,
which royalty terms may or may not be as favorable as the royalty
terms in the Intellectual Property License Agreement Section 3
("Royalties"). If Logitech does not have "preferred customer
status", Immersion may decide to offer New Technology under the
terms of this Section 7.4 ("New Technology") but is not obligated
to do so.
7.5 NOTICE OF IMMERSION MANUFACTURE. Immersion shall provide Logitech
with twelve (12) months' written notice prior to commencement by
Immersion of distribution of a Planar Force Feedback Cursor
Control Device for the Planar Force Feedback Cursor Control Field
of Use to be manufactured by Immersion or manufactured by a third
party on Immersion's behalf for distribution by Immersion under
Immersion's name. Upon expiration of this notice period,
Immersion may, but shall no longer be obligated to offer Logitech
Enhancements in accordance with Section 7.2 ("Enhancements by
Immersion"), may but shall no longer be obligated to offer OEMs
to Logitech in accordance with Section 7.3
11
12
("OEM Referral"), and may but shall no longer be obligated to
provide New Technology under Section 7.4 ("New Technology").
7.6 LOGITECH PREEMPTION PROTECTION. Provided that Logitech is in
compliance with its development obligations under the terms of
this Agreement, which will be measured by Logitech making
substantial progress toward meeting its milestones as indicated
in Exhibit B ("Development Schedule"), Immersion agrees not to
enter into an agreement with any third party manufacturer which
will permit such third party manufacturer to ship a mouse product
for the Planar Force Feedback Cursor Control Field of Use which
incorporates similar Immersion Technology as incorporated into
the FEELit Mouse Product (a "Similar Product") on or before three
(3) months after the Product Launch Commitment Date as defined in
Section 8.4 ("Product Launch Commitment").
7.7 ADVISEMENT PERIOD. Although Immersion's development relationship
with Logitech under the terms of this Agreement is not exclusive,
Immersion agrees, during the Advisement Period (as defined
below), to provide Logitech with written notice if Immersion
enters into an agreement with a third party manufacturer which
will permit such third party manufacturer to produce a Similar
Product that is scheduled or planned to ship during calendar
1999. Such notice will not identify the third party manufacturer
and will not provide details regarding the Similar Product but
will simply advise Logitech that such an agreement has been
signed. For purposes of this Agreement, the Advisement Period
shall be a period which commences on the Effective Date of this
Agreement and ends three (3) months after the Product Launch
Commitment Date.
8. LOGITECH'S OBLIGATIONS
8.1 DEVELOPMENT. Logitech shall (i) work with Immersion to produce
each set of Exhibit A ("Specifications") which shall include
product features, performance and design criteria, power
requirements, schematics, quality requirements, and the
preliminary component summary; and Exhibit B ("Development
Schedule"), including technical assistance in the development
thereof; (ii) review, test and evaluate the Immersion
Deliverables for conformance with the applicable Specification,
and (iii) deliver the Logitech Deliverables to Immersion for use
in development in accordance with Exhibit B ("Development
Schedule"). Immersion agrees not to disclose or copy for any
purpose Logitech's Specifications and Deliverables without the
express written consent of Logitech or in fulfillment of
Immersion's obligations under this Agreement.
12
13
8.2 PREFERRED CUSTOMER STATUS.
8.2.1 REQUIREMENTS. Logitech shall have "preferred customer
status" during the first four quarter period (the "Initial
Period") following the Product Launch. If the Product
Launch falls within the first half of a Quarter, such
Quarter will be counted as the first such Quarter. If the
Product Launch falls in the second half of a Quarter, the
next Quarter will be counted as the first such Quarter.
Thereafter, except as provided in Section 7.5 ("Notice of
Immersion Manufacture"), for so long as (i) Logitech
continues to timely pay royalties to Immersion according
to the Intellectual Property License Agreement Section 3
("Royalties") in an amount equal to at least three hundred
twenty thousand dollars ($320,000) ("Minimum Annual
Revenue Requirement") per four Quarter period (a "Revenue
Period") beginning at the expiration of the Initial
Period, payable on a quarterly basis as set forth in
Section 8.2.2 ("Minimum Annual Revenue Requirement"); and
(ii) Logitech is not distributing (directly or through
OEMs) any force-feedback Planar Force Feedback Cursor
Control Device which is not a Royalty Bearing Product,
Immersion agrees to grant Logitech "preferred customer
status." Notwithstanding the foregoing, Logitech may, by
written notice given at least thirty (30) days prior to
the first day of any given Revenue Period terminate the
"preferred customer status" for the upcoming Revenue
Period. Upon termination of "preferred customer status" as
described herein all of the obligations of Immersion and
Logitech, and any provisions in this Agreement, which are
contingent upon "preferred customer status" shall be null
and void and of no further force or effect upon expiration
of the then current four Quarter period. If Logitech does
not send a termination notice as permitted herein, the
"preferred customer status" will continue for the duration
of the upcoming Revenue Period, except as otherwise
provided herein. If Immersion does not receive a
termination notice from Logitech as provided herein,
Immersion will send a notice to Logitech, confirming that
no termination notice has been received, within thirty
(30) days after the subject Revenue Period commences;
however a failure by Immersion to send such notice will
not be a material breach and will in no way change
Logitech's "preferred customer status."
8.2.2 MINIMUM ANNUAL REVENUE REQUIREMENT. Each Minimum Annual
Revenue Requirement shall consist of four (4) payments of
eighty thousand dollars ($80,000) each. Each quarterly
payment shall be referred to as a "Quarterly Payment".
Each such Quarterly Payment shall be due on the last day
of each Quarter ("Preferred Status Quarter") and is
payable within forty-five (45) days after the end of each
Preferred Status Quarter. Royalties accrued in each
Preferred Status Quarter as provided in the
13
14
Intellectual Property License Agreement Section 3
("Royalties") shall be credited toward the Quarterly
Payments due for such Preferred Status Quarter. If the
actual royalties due for the Preferred Status Quarter are
less than the Quarterly Payment due, Logitech will submit
the actual royalty payment and Logitech will pay the
difference between the Quarterly Payment due and the
actual royalties due for the Preferred Status Quarter. If
the actual royalties due for the Preferred Status Quarter
are greater than the Quarterly Payment due, such excess
amount shall be credited toward future Quarterly Payments
within the same Revenue Period. Actual royalties paid in
excess of the Minimum Annual Revenue Requirement for a
given Revenue Period will not be applied as a credit
toward Quarterly Payments due for Preferred Status
Quarters in a later Revenue Period. Should Logitech not
timely pay any required Quarterly Payment and fail to make
such payment within ten (10) days of receiving written
notice from Immersion and unless otherwise agreed to in
writing by the Parties, preferred customer status benefits
as described in Sections 7.1 ("Technical Services and
Support"), 7.2 ("Enhancement by Immersion") and 7.4 ("New
Technology") shall no longer be in force or effect,
effective as of the date on which such Quarterly Payment
was due.
8.2.3 TERMINATION OF PREFERRED CUSTOMER STATUS. If Logitech
terminates its "preferred customer status" by distributing
(either directly or through OEMs) a force-feedback Planar
Force Feedback Cursor Control Device in the Planar Force
Feedback Cursor Control Field of Use which is not a
Royalty Bearing Product, Logitech agrees to provide
Immersion with six (6) months' prior written notice. Upon
expiration of such notice period, (i) Logitech shall no
longer be obligated to pay the Quarterly Payments starting
on the date the next Quarterly Payment would have come due
after the expiration of the six (6) month notice, however,
Logitech will submit a pro rata Quarterly Payment for the
portion of the Quarter in which the "preferred customer
status" was in effect prior to the expiration date of the
six (6) month notice which shall be applied in accordance
with Section 8.2.2 ("Minimum Annual Revenue Requirement")
and (ii) all of the obligations of Immersion and Logitech,
and any provisions in this Agreement which are contingent
upon "preferred customer status" shall be null and void
and of no further force or effect upon expiration of the
notice period.
8.3 DEVELOPER UNITS. Subject to the timely completion of Immersion's
development obligations under the terms of this Agreement,
Logitech agrees to produce one hundred (100) FEELit Mouse units
(PVT) at least six (6) months prior to the Product Launch.
Immersion shall be responsible for providing such units to
software developers in a timely manner.
14
15
8.4 PRODUCT LAUNCH COMMITMENT. Logitech agrees to use
reasonable efforts to launch the FEELit Mouse Product with
a "Product Availability Date" or "PAD" on or before July
23, 1999 (such date (and not the actual shipment date)
shall be referred to as the "Product Launch Commitment
Date"). Immersion recognizes that the actual shipment date
may be adjusted to a later date due to unforeseen events,
manufacturing issues, and/or sourcing issues and that
Logitech, by way of this provision, is merely confirming
Logitech's commitment of the resources and priority level
to make Product Launch by July 23, 1999 a strong
possibility. The parties have designated a date in the
milestone schedule in Exhibit B ("Milestone Schedule") as
the "Design Freeze" date, after which Immersion shall not
be responsible for schedule delays resulting from
subsequent Logitech changes to the design specification of
the FEELit Mouse. Immersion acknowledges that Immersion
may be responsible for several time sensitive and critical
steps in a given milestone schedule which will need to be
completed prior to the Design Freeze date. The parties
agree that the Product Launch Commitment Date of July 23,
1999 is dependent upon this Design Freeze date identified
in the milestone schedule in Exhibit B ("Milestone
Schedule") being met. Therefore, the parties agree that
for each day that the Design Freeze is adjusted to a later
date substantially due to Immersion's failure to complete
milestones which are substantially Immersion's
responsibility to complete and substantially within
Immersion's control and upon which the Design Freeze date
is dependent, the Product Launch Commitment Date will be
moved back one day not including weekends.
8.5 OEM SOLE SOURCE INITIATIVE. The parties intend to
negotiate in good faith to sign an OEM Purchase Agreement
under which, for the first eighteen (18) months of such
agreement, Logitech agrees to purchase all of its
peripheral device components requirements which can be met
by certain FEELit Mouse Controller Chip and Custom
Actuator Core components as defined in the OEM Purchase
Agreement.
9. FINANCIAL TERMS
9.1 DEVELOPMENT FEES. Development of the FEELit Mouse Product
will be funded in accordance with the terms of Section 6.1
("Funding") and any subsequent development will be funded
as provided under the terms of Section 6.7 ("Other
Development").
9.2 NEW TECHNOLOGY ROYALTIES. New Technology will be provided
under royalties which are subject to the terms of Section
7.4 ("New Technology") and which are mutually agreed upon
in writing by Immersion and Logitech.
15
16
10. OWNERSHIP OF TECHNOLOGY
10.1 IMMERSION TECHNOLOGY. Immersion shall retain ownership of all
Immersion Technology (and Immersion Product Model Technology).
10.2 LOGITECH TECHNOLOGY. Logitech shall retain ownership of all
Logitech Technology (and Logitech Product Model Technology).
10.3 JOINT TECHNOLOGY. All Joint Technology shall be jointly owned by
Immersion and Logitech. Exploitation of and subsequent
development of Joint Technology, including commercial development
and/or licensing, will be by each Party without financial
accounting to, or the consent of, the other Party. Each Party
agrees to assist the other Party in any reasonable manner to
obtain and enforce intellectual property rights with respect to
the Joint Technology for the requesting Party's benefit in any
and all countries, and each Party agrees to execute, when
requested, applications and assignments to the requesting Party
and any other lawful documents deemed necessary by the requesting
Party to carry out the ownership provisions of this Agreement. If
called upon to render assistance under this Section 10.3 ("Joint
Technology"), a Party will be entitled to a fair and reasonable
fee, in addition to reimbursement of expenses incurred, at the
prior written request of the other Party.
10.4 JOINT TECHNOLOGY COPYRIGHTS. Each Party agrees to execute, upon
written request of the other Party, a signed transfer of an
undivided one-half interest in any Joint Technology copyright to
the other Party (so that the Parties are joint owners of the
copyright).
10.5 JOINT TECHNOLOGY INVENTIONS. Immersion and Logitech will
determine whether any Joint Technology inventions were conceived
or first actually or constructively reduced to practice within
the scope of development of the FEELit Mouse Product, or any
Planar Force Feedback Cursor Control Device and/or any
Enhancements during the term of the Agreement, and the Parties
will discuss the circumstances of the invention. The Parties will
discuss whether a patent application should be filed for a
particular Joint Technology invention or, in the alternative, the
Joint Technology invention should be kept as a trade secret by
the Parties. If the Parties mutually agree to file a patent for a
particular Joint Technology invention, the Parties will discuss
the patent filing details, including but not limited to which
Party shall file and prosecute the U.S. and any foreign patent
applications. The cost of such filing and prosecution shall be
evenly distributed between the Parties. If the Parties cannot
mutually agree to file for a patent for a particular Joint
Technology invention, such Joint Invention shall be treated as a
trade secret by both Parties provided, however, such treatment
shall not prevent either party from shipping a product based upon
such trade secret. In
16
17
any case where the Parties mutually agree to file for a patent,
the application shall include all inventors and the Parties shall
jointly own the patent. Should both Parties agree not to file for
a patent such Joint Invention shall be treated as a trade secret
by both Parties, provided, however, such treatment shall not
prevent either party from shipping a product based upon such
trade secret. Assignment of patent(s) issuing from application(s)
for Joint Technology inventions shall be made jointly to
Immersion and Logitech.
10.6 SURVIVAL OF JOINT TECHNOLOGY OBLIGATIONS. The obligations set
forth in this Section 10 ("Ownership of Technology") shall
survive the expiration or termination of this Agreement.
11. LOGITECH DEVELOPMENT LICENSE TO IMMERSION
Logitech grants Immersion a non-exclusive license to use the Logitech
Technology under Logitech's intellectual property rights, provided to
Immersion hereunder for purposes of performing Immersion's development
obligations under any development schedule attached to this Agreement,
to have and distribute internally Logitech Technology and to modify or
copy the materials exclusively for the purpose of performing the
development activities required under this Agreement. Immersion's
intellectual property license to Logitech with respect to all
Deliverables delivered hereunder and all development performed under the
terms of this Agreement, with the exception of Joint Technology is
described and subject to the terms and conditions of the Intellectual
Property License Agreement.
12. TERMINATION
12.1 TERMINATION BY LOGITECH WITHOUT CAUSE. Logitech may terminate
this Agreement and/or any development project without cause upon
sixty (60) days written notice.
12.2 TERMINATION FOR CAUSE. Immersion may terminate this Agreement
and/or any development project by written notice if Logitech
materially breaches Section 16 ("Confidentiality") or if Logitech
fails to make development payments as provided in this Agreement
and any Exhibit B ("Development Schedule"). Immersion's
termination shall become effective upon thirty (30) days written
notice of breach, provided Logitech fails to cure its breach
within the notice period. Logitech may terminate this Agreement
upon thirty (30) days written notice if Immersion materially
breaches this Agreement and fails to cure its breach during the
notice period.
12.3 EFFECT OF TERMINATION. If either Party terminates this Agreement
and/or a development project hereunder, both Parties will stop
all work in progress and minimize all related costs (e.g. pending
materials orders). If a Party
17
18
independently elects to proceed with its work in progress it
shall be solely responsible for related costs. If Logitech
requests that Immersion complete work in progress, Logitech shall
be responsible for related costs according to the applicable
Exhibit B ("Development Schedule"). If Immersion terminates the
Agreement as provided in Section 12.2 ("Termination for Cause"),
or Logitech terminates the Agreement or an Exhibit B
("Development Schedule") without cause Logitech shall pay
Immersion for Deliverables due and delivered up to the effective
date of termination and Logitech shall also pay for development
fees then owing under this Agreement based upon a pro rata
portion of the number of calendar days elapsed since completion
of the last Deliverable for which payment was due and the number
of the days between such Deliverable and the next sequent
Deliverable for work done for such deliverable. If Logitech
terminates this Agreement or an Exhibit B ("Development
Schedule") for cause, no further payments shall be due under this
Agreement except for Deliverables accepted up to the date of
termination. In no event, however, will either Party's liability
under this Agreement for any development project of a Planar
Force Feedback Cursor Control Device exceed the amounts set forth
in the applicable Exhibit B ("Development Schedule"). NEITHER
PARTY SHALL BE LIABLE TO THE OTHER FOR DAMAGES OF ANY SORT AS A
RESULT OF TERMINATING THIS AGREEMENT IN ACCORDANCE WITH THE TERMS
OF THE AGREEMENT.
12.4 THIRD PARTY ACQUISITION OF IMMERSION.
12.4.1 SPECIAL HANDLING PROVISIONS. In the case of a merger or
acquisition where Immersion is not the surviving entity or
in the case of a sale of assets by Immersion in accordance
with the terms of Section 18.2 ("Succession and
Assignment"), Immersion is not required to obtain
Logitech's prior approval to assign this Agreement,
however, Immersion will provide Logitech with written
notice as soon as possible, consistent with and subject to
Immersion's obligations of confidentiality with respect to
such merger, acquisition or sale of assets transaction.
Immersion recognizes that Logitech may have concerns with
respect to the assignee of this Agreement ("Assignee") if
such Assignee is viewed by Logitech to be a competitor,
however, notwithstanding competitive concerns, Logitech
may not desire to terminate this Agreement. Immersion
therefore agrees to permit Logitech to be able to require
that the following "special handling" provisions described
in this Section 12.4 ("Third Party Acquisition of
Immersion") be implemented if so requested by Logitech, in
writing.
12.4.2 CONFIDENTIAL INFORMATION SPECIAL HANDLING. If Logitech
desires to prevent the Assignee from accessing Logitech's
confidential information
18
19
after assignment of this Agreement because such Assignee
is viewed by Logitech as a competitor, Logitech may so
notify Immersion in writing and Immersion will implement
special procedures to keep the Logitech confidential
information separate from the Assignee's information and
will limit disclosure of the Logitech confidential
information to those employees who had previously had
access prior to the assignment of the Agreement. In such
case, the Logitech confidential information will be stored
and used in a separate area in order to limit access to
only those former Immersion employees who are authorized
to work with such Logitech confidential information. If
invoked, such special procedures will be observed for at
least ninety (90) days from the date of notice by Logitech
so as to give Logitech time to assess the situation,
however, Logitech must cancel the special procedures or
terminate this Agreement in accordance with Section 12.1
("Termination by Logitech Without Cause"), effective one
year from the date of the written notice which invoked the
special procedures unless the Assignee, in its sole
discretion, agrees in writing to continue the special
procedures, for the mutual benefit of the Parties. Upon
Logitech's request Immersion shall return any and all
copies of Logitech's confidential information or, at
Logitech's option, Immersion shall destroy such copies and
notify Logitech in writing when such copies have been
destroyed, however if Logitech requests such return or
destruction, immersion shall be released from all
obligations under this Agreement which Immersion is unable
to perform without access to such confidential
information, if any.
12.4.3 TERMINATION OF OBLIGATIONS. After receipt by Logitech of
notice from Immersion as described in Section 12.4.1
("Special Handling Provisions"), Immersion may but shall
no longer be obligated to refer OEMs to Logitech in
accordance with Section 7.3 ("OEM Referral") and (iii)
provide New Technology under Section 7.4 ("New
Technology"). For six (6) months after receipt of such
notice, Immersion shall continue to provide to End User in
accordance with Section 7.2 ("Enhancements by Immersion")
on a reasonable (versus priority) commercial basis.
13. SOURCE CODE ESCROW. Logitech may request Immersion to deposit
Source Code materials and if so, then Immersion shall promptly
provide to a mutually agreeable escrow agent, under the terms of
a mutually agreeable escrow agreement, all Immersion Software
source code, drawings, specifications, and other information
necessary for Logitech to continue development or support of each
Final Prototype or Deliverable described in the applicable
Exhibit B ("Development Schedule") ("Source Code Materials"),
which is being developed under Exhibit B ("Development
Schedule"). Immersion shall promptly deposit any future updates
or revisions with the escrow agent. Under the terms of the escrow
agreement, the escrow agent shall be instructed to deliver
19
20
such Source Code Materials to Logitech upon a certification from
Logitech that Immersion has become bankrupt and is unable to
perform any of its material software development obligations
relating to software, including firmware, pursuant to Exhibit B
("Development Schedule") prior to completion of the Final
Prototype of any Planar Force Feedback Cursor Control Device and
acceptance by Logitech pursuant to the terms of this Agreement
and/or fails to perform any of its material software development
obligations relating to software, including firmware, pursuant to
Exhibit B ("Development Schedule") prior to completion of the
Final Prototype of any Planar Force Feedback Cursor Control
Device and acceptance by Logitech pursuant to the terms of this
Agreement or Logitech terminates the Agreement for cause based on
Immersion's failure to perform any of its material software
development obligations relating to software, including firmware,
pursuant to Exhibit B ("Development Schedule") prior to
completion of the Final Prototype of any Planar Force Feedback
Cursor Control Device and acceptance by Logitech pursuant to the
terms of this Agreement. If Logitech elects to disclose Source
Code materials (other than firmware source code designated by
Immersion as "Authorized For Modification" pursuant to Section
2.2.1 of the Intellectual Property License Agreement) to any
Affiliate and prior to any disclosure, Logitech shall enter into
a written agreement with such Affiliate and such written
agreement shall contain terms similar to subsections (i)-(v)
below. Logitech will not disclose Source Code material (other
than firmware source code designated by Immersion as "Authorized
For Modification" pursuant to Section 2.2.1 of the Intellectual
Property License Agreement) to any third parties without
Immersion's prior written consent. Such disclosures, if any,
shall be upon terms similar to subsections (i)-(v) below. The
escrow agreement will include the following minimum terms and
conditions, which shall not be applicable to the firmware source
code that is designated by Immersion as "Authorized For
Modification" pursuant to Section 2.2.1 of the Intellectual
Property License Agreement, use of which is governed by the
Intellectual Property License Agreement:
(i) Immersion will grant Logitech the right to use the Source Code
Materials solely for the purpose of maintaining object code
versions of the Immersion Software portion of the Immersion
Product Model Technology in the Planar Force Feedback Cursor
Control Devices or to continue development or support of the
Planar Force Feedback Cursor Control Devices.
(ii) Logitech will acknowledge and agree that use of the Source Code
Materials is furnished to Logitech on a confidential and secret
basis for the sole and exclusive use of Logitech, and not for
copying, distribution, sale, sublicense or disclosure to third
parties except as provided under the Intellectual Property
License Agreement signed by the Parties. In the event that
Logitech obtains the Source Code Materials pursuant to the terms
of the escrow agreement, Logitech will agree that it will not
publish, disclose or otherwise divulge the Immersion Source Code
to any person, except officers, employees and independent
contractors of Logitech who have entered into non-disclosure
agreements and need access to the Immersion Source Code Materials
to perform their duties. Logitech may make one
20
21
(1) machine-readable copy of the Immersion Source Code Materials
solely for backup and archival purposes. Logitech agrees to
reproduce and include all copyright and other proprietary notices
appearing in or on any and all Immersion Source Code Materials
provided to Logitech by the escrow agent on any copy made by
Logitech.
(iii) Logitech will agree to take all necessary steps to prevent
unauthorized disclosure of the Immersion Source Code Materials,
including but not limited to the following:
(a) The building in which Logitech uses the Immersion
Source Code Materials shall have restricted access twenty-four
(24) hours a day;
(b) The Immersion Source Code Materials shall be used only
in a location within such building to which access is further
restricted to persons authorized to use the Immersion Source
Code;
(c) Logitech shall prevent telephone or other remote
access to the Immersion Source Code Materials from other
locations; and
(d) The Immersion Source Code Materials shall be installed
only on a single computer system which is password protected, and
all Immersion Source Code Materials files will be password
protected.
(iv) Logitech shall be liable to Immersion or its successor company for all
direct and indirect, consequential, special and incidental damages
resulting from any unauthorized disclosure by Logitech of the Immersion
source code. To the extent, if any this Section 13 ("Source Code
Escrow") is inconsistent or conflicts with any provision of this
Agreement, this Section 13 ("Source Code Escrow") shall be controlling.
(v) The obligations of this Section 13 ("Source Code Escrow") shall survive
any termination or expiration of the escrow agreement.
14. LOGITECH WARRANTY.
Logitech represents and warrants that it will not knowingly provide to
Immersion any data, specifications, designs or similar information that
infringe upon or violate any intellectual property rights of a third
party.
15. TRADEMARK INFRINGEMENT INDEMNIFICATION BY IMMERSION
Subject to prompt notification by Logitech, cooperation by Logitech and
control of all litigation and/or settlement by Immersion, Immersion
shall indemnify, defend and hold Logitech harmless from and against any
and all claims, damages, liabilities, judgments, settlements, costs and
expenses (including reasonable attorneys' fees) suffered or incurred by
Logitech arising out of a claim of infringement of any Immersion
trademark, service
21
22
xxxx, or trade name resulting from the labeling requirement of
Intellectual Property License Agreement Section 2.5 ("Label
Requirements"). In the case of an infringement or alleged infringement
of any such Immersion trademark, service xxxx, or trade name, Immersion
will have the right to require Logitech to stop using such trademark,
service xxxx, or trade name and will provide a new trademark to be used
in connection with the Immersion Product Model Technology.
16. CONFIDENTIALITY.
16.1 OBLIGATIONS. During the course of this Agreement, each Party may
be a disclosing Party (hereinafter called Discloser) for
transmitting certain proprietary information to the other Party
(hereinafter called Recipient). Recipient agrees to treat as
confidential all such proprietary information, including all
information, written or oral, relating thereto, including, but
not limited to, know how, concepts, techniques, drawings,
specifications, processes, computer programs, designs and
systems, manufacturing and marketing information, received from
Discloser, and Recipient agrees not to publish such information
or disclose same to others except to those employees,
subcontractors and sublicensees to whom disclosure is necessary
to order to carry out the purpose for which such information is
supplied. Recipient shall inform such employees, subcontractors
and sublicensees of the confidential nature of such information
and of their obligation to keep same confidential. Recipient
further agrees not to use such proprietary information for
Recipient's own benefit or for the benefit of others, other than
in accordance with this Agreement, without Discloser's prior
written consent, and that all tangible materials, including
written material, photographs, discs or other documentation
embodying such proprietary information shall remain the sole
property of Discloser and shall be delivered to Discloser upon
Discloser's request. Upon Discloser's request a Receiving party
shall return any and all copies of Discloser's confidential
information or, at Discloser's option, the Receiving party shall
destroy such copies and notify Discloser in writing when such
copies have been destroyed.
16.2 EXCEPTIONS. The foregoing obligations of confidentiality do not
apply to information which was previously known to Recipient, is
rightfully received from a third party by Recipient, or becomes
publicly known or available without breach of this Agreement by
Recipient.
17. LIMITATION OF LIABILITY.
17.1 EXCEPT AS PROVIDED IN SECTION 13 ("SOURCE CODE ESCROW"), IN NO
EVENT WILL LOGITECH OR IMMERSION BE LIABLE FOR LOST PROFITS, OR
ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
HOWEVER CAUSED AND ON ANY
22
23
THEORY OF LIABILITY, ARISING IN ANY WAY IN CONNECTION WITH THIS
AGREEMENT. THIS LIMITATION WILL APPLY EVEN IF LOGITECH AND
IMMERSION HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES
AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY.
17.2 EXCEPT WITH RESPECT TO THE PARTIES' OBLIGATIONS SET FORTH IN
SECTION 13 ("SOURCE CODE ESCROW") AND WITH RESPECT TO ANY
QUARTERLY PAYMENTS DUE AND PAYABLE BY LOGITECH HEREUNDER, IN NO
CASE WILL EITHER PARTY'S TOTAL CUMULATIVE LIABILITY OR
OBLIGATIONS UNDER THE TERMS OF OR ARISING OUT OF THIS AGREEMENT
EXCEED ONE MILLION U.S. DOLLARS ($1,000,000).
18. GENERAL PROVISIONS
18.1 ENTIRE AGREEMENT. This Agreement and its exhibits, together with
the Intellectual Property License Agreement, constitutes the
complete agreement of the parties and supersedes any other
agreements, written or oral (including all correspondence,
emails, such as but not limited to the letter regarding Phase 0
dated February 20, 1998 concerning the subject matter hereof and
such materials do not have any effect upon the rights and
obligations of the Parties under this Agreement. This Agreement
and the Intellectual Property License Agreement in no way
supersede or affect the Intellectual Property License Agreement
between Immersion and Logitech dated April 2, 1997 and/or the
Technology Product Development Agreement between Immersion and
Logitech dated April 2, 1997.
18.2 SUCCESSION AND ASSIGNMENT. Either party may assign this Agreement
provided that the other party has consented in writing to the
assignment or delegation and provided, further, that the rights
and obligations of the parties may be assigned to a corporate
successor in interest in the case of a merger or acquisition or
in the case of a sale of assets without the prior approval of the
other party. Any attempt to assign this Agreement in violation of
the provisions of this Section 18.2 ("Succession and Assignment")
shall be void.
18.3 NOTICES. Notices required under this Agreement shall be addressed
as follows, except as otherwise revised by written notice:
23
24
TO IMMERSION: TO LOGITECH:
Xxxxx X. Xxxxxxxxx, Ph.D. General Counsel
President Logitech, Inc.
Immersion Corporation 0000 Xxxxxx Xxxxx
0000 Xxxxxxx Xxxxx Xxxxxxx, XX 00000-0000
Xxx Xxxx, XX 00000
18.4 GOVERNING LAW. The validity, interpretation and performance of
this Agreement shall be governed by the substantive laws of the
State of California, without the application of any principle
that leads to the application of the laws of any other
jurisdiction.
18.5 NO AGENCY. Neither party is to be construed as the agent or to be
acting as the agent of the other party hereunder in any respect.
18.6 NO RECRUITMENT. During the term of this Agreement and for one (1)
year after the termination or expiration of this Agreement, each
Party agrees not to recruit any employee of the other Party.
18.7 MULTIPLE COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which taken together shall constitute one
single Agreement between the parties.
18.8 NO WAIVER. No delay or omission by either Party hereto to
exercise any right or power occurring upon any noncompliance or
default by the other party with respect to any of the terms of
this Agreement shall impair any such right or power or be
construed to be a waiver thereof. A waiver by either of the
parties hereto of any of the covenants, conditions, or agreements
to be performed by the other shall not be construed to be a
waiver of any succeeding breach thereof or of any covenant,
condition, or agreement herein contained. Unless stated
otherwise, all remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other
remedies available to either party at law, in equity, or
otherwise.
18.9 SEVERABILITY. If any one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable,
the validity, legality or enforceability of the remaining
provisions of this Agreement shall not in any way be affected or
impaired thereby.
18.10 AMENDMENTS IN WRITING. Any amendment to this Agreement shall be
in writing and signed by both parties hereto.
18.11 INTERPRETATION. Since this Agreement was prepared by both parties
hereto, it shall not be construed against any one party as the
drafting party.
24
25
18.12 DISPUTE RESOLUTION. Except in the case of a breach of an
obligation related to a Party's intellectual property rights, in
the event either Party concludes that it is in its best interest
to file any legal action against the other, the Party shall
contact the other Party's management and at least two (2) senior
managers from each Party shall meet without legal counsel or
interruption for a minimum amount of three (3) eight (8) hour
periods and diligently attempt to resolve all disputed matters.
If the Parties are unable to resolve their difference and either
Party desires to file a legal action against the other, at least
two (2) senior managers from each Party and their respective
counsels shall meet for three (3) eight (8) hour periods and
diligently attempt to resolve all disputed matters. Either Party
may request that an independent third party, bound to mutually
agreed upon legations of confidentially, attend such meeting in
order to assist the Parties in reaching a reasonable resolution.
All oral and written information exchanged in these meetings
shall be exchanged in an effort to settle all disputed matters.
If either Party still desires to file a legal action against the
other after these prescribed meetings such Party may file a legal
action against the other Party as allowed by applicable law in
Santa Xxxxx County state court or in the Federal Circuit. The
Parties agree that if a Party does not attend all of the
prescribed meetings it waives its rights to any monetary damages
in the legal action(s) it files.
18.13 SURVIVAL. Sections 6.1 ("Funding"), 6.1.1 ("FEELit Mouse Product
Funding"), 10 ("Ownership of Technology"), 12.3 ("Effect of
Termination"), 12.4 ("Third Party Acquisition of Immersion"), 13
("Source Code Escrow"), 14 ("Logitech Warranty"), 15 ("Trademark
Infringement Indemnification by Immersion"), 16
("Confidentiality"), 17 ("Limitation of Liability") and 18
("General Provisions") will continue after the expiration or
termination of this Agreement.
18.14 FORCE MAJEURE. With the exception of the obligation to pay monies
due and owing, each Party hereto shall be excused from
performance hereunder for any period and to the extent that it is
prevented from performing any services pursuant hereto, in whole
or in part, as a result of delays caused by the other Party or an
act of God, war, civil disturbance, court order, governmental
action, laws, orders, regulations, directions or requests, or as
a result of events such as acts of public enemies, earthquakes,
fires, floods, strikes or other labor disturbances of the other
Party or any third party, or other cause beyond its reasonable
control and which it could not have prevented by reasonable
precautions, and such nonperformance shall not be a default
hereunder or a ground for termination hereof.
25
26
IN WITNESS WHEREOF, the authorized representatives of the parties hereto
have signed this Agreement as of the date and year last set forth below.
LOGITECH: IMMERSION:
LOGITECH, INC. IMMERSION CORPORATION
By: /s/ X. X. Xxxxxx By: /s/ Xxxxx Xxxxxxxxx
-------------------------- --------------------------------
Name: X. X. Xxxxxx Name: Xxxxx Xxxxxxxxx
------------------------ -------------------------------
Title: SVP/GM Title: President
----------------------- -------------------------------
Date: 4/13/98 Date: April 13, 1998
------------------------ -------------------------------
26
27
EXHIBIT A
SPECIFICATION
Immersion shall develop a Mouse Product to conform to the following
basic specifications: The Mouse Product shall be a two degree of freedom mouse
controller with active force feedback functionality along each of the two
displacement axes. The Mouse Product will be fixed by a linkage to a mouse pad
that houses the actuators and sensors. The Mouse Product will allow both
absolute position data and relative position data to be reported to the host
computer. The Mouse Product must be compatible with Intel based personal
computers (or equivalent) running Microsoft Windows 98 and NT operating systems.
It must connect to the PC through a universal Serial Bus ("USB") interface using
the USB communication protocol for "HID" and/or "PID" class devices (or HID
equivalent). In addition to receiving position data and button press data from
the Mouse Product across the USB, the host computer will command force
sensations on the Mouse Product by sending a high level force command with
command parameters across the USB. The completed work must include host drivers,
firmware and electromechanical hardware that work together to allow cursor
related force feedback sensations to be generated by a processor on-board the
Mouse Product (for example, physical detent sensations when traversing a menu
item). Said sensations must be appropriately coordinated with events running in
host software applications. The programming of coordination between force
sensations and software events will be achieved using a high-level Application
Programming Interface ("API") that allows software developers to command force
feedback sensations from their applications. For gaming applications, the
Windows API will use the "DirectX" force feedback implementation as its core and
the Mouse Product must have compatible firmware that locally produces all key
features supported by the then current DirectX 6.0 (Direct-Input) specification.
For non-gaming applications, API will also enable advanced features not
necessarily specified by DirectX as included in the current FEELit API
specification. The device must be able to provide mouse functionality (no force
feedback) when powered by USB only, in low power mode (4.4V, 100 mA) to comply
with the USB Specification at power up.
Requirement Overview: The Mouse Product must be a high quality, premium
cursor control peripheral capable of providing accurate positioning data and
producing realistic force feedback sensations. The product must consist of the
following subsystems:
Mouse Handle: Logitech to provide the design. A deadman switch is not
currently provided from Immersion but may be included by Logitech if it
proves necessary.
Base Enclosure/Support: Immersion to provide the basic mouse pad housing
concept and recommendations. Logitech to provide the industrial design.
Logitech to do detailed design with input from Immersion. The support
must carry the mouse loads, both user loads and force feedback loads,
without introducing excessive friction or binding. The support must
include a hard stop around the peripheral of the mouse workspace. Range
of motion provided for the Mouse Product is specified at the end of this
section.
Transmission: Immersion to provide a parallel linkage design. The
transmission will be a five-bar linkage structure that conveys
mechanical power from actuators to the Mouse Handle.
27
28
Actuator: Immersion to provide the full design of custom flat actuators
(voice coils) optimized for the Mouse Product embodiment. Logitech will
produce the actuator coils but Immersion will supply the Magnet Assembly
as a separate component governed by a separate Component Supply
Agreement.
Spring Centering: Physical springs are not needed for this product. All
spring centering for gaming applications will be simulated by the local
processor.
Power Electronics: Immersion must provide the initial design. There will
be an external power source (brick) in the initial product. [****]
Product will draw non-force feedback power from USB.
Microprocessor and Interface Electronics: Immersion must provide the
board design for controller electronics, to be industrialised by
Logitech. Immersion will supply the FEELit Chip processor under a
separate OEM agreement, said processor including firmware to create
local force feedback sensations. Design will be USB high speed
compatible. It is currently estimated that the COG for the die-shrink
version of the FEELit Chip in production volumes (100,000 units per
year) will be [****] or less.
Sensors: Immersion provides recommendation and design implementation for
sensors that monitor the motion of the mouse and report such data back
to the host across USB via the microprocessor. It is currently estimated
that the COG for the sensing electronics will be less than [****].
Sensitivity: Mouse to support basic mouse ballistic scaling algorithms
wherein mouse position sensitivity is varied with velocity of mouse
movement. [****].
Embedded Software: Immersion must provide the HEX code. The embedded
software will be Direct-X and FEELit compatible and USB enabled.
Logitech will not have access to any parts of the source code (including
but not limited to the force feedback core) except as provided in
Section 2.2.1 ("Firmware Source Code"). [****] After the final firmware
is delivered, Immersion will provide access to several sections of the
firmware including those related to [****]
Host Software: Immersion will provide drivers that manage force feedback
of the device in Windows 98 and NT. The driver will support the
DirectInput API and the FeelIt API. A custom interface may be needed to
communicate with existing Logitech MouseWare drivers. This custom
interface would be developed between Logitech and Immersion. The general
breakdown of the software should be such that Immersion manages the
Force Feedback components, and Logitech's MouseWare manages the button
programmability, wheel support, port management, and sensor and button
reporting for cursor movement control as well as gaming movement control
through DirectX.
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
28
29
Switches and Buttons: The product will support three standard moue
buttons plus [****], all processed by the FEELit Chip if possible.
Compliance: The Immersion/Logitech design must comply with 761325-0000
Rev A Logitech EMI standard. Exceptions to this standard must be duly
approved by Logitech. GOI-740329-00 Rev B is the current generic
reference for reliability. Applicable standards are the following:
Drop: 90 cm
Light immunity: 100 kLux
Environmental: -40.. +70C (non Operating, 53 Hours cycle)
0C (operating, 8 hours)
+40C (operating, 90% RH, 8 hours)
+40C (operating, 10% RH, 8 hours)
Vibration: refer to GOI-740329-00
Shock: refer to GOI-740329-00
Product Details: The product must perform as follows:
Range of Motion: No less than [****]
Force Output: A minimum of [****] grams (peak)
Dimensions: The size shall be minimized within the constraints of
packaging.
Power Consumption: No more than [****] xxxxx peak.
Tracking: Allows [****].
Target Cost: Logitech desires a product with a suggested retail price of
$99 assuming China based labor costs, approximately [****] Logitech margin, and
approximately [****] in nine-level costs. While many of the component costs,
labor costs, and other factors that affect Logitech's ability to hit any given
price target are not related to Immersion's obligations under this contract,
there are currently unknown component costs that do depend upon Immersion's
design. These unknown component costs are the cost of goods for the sensor
electronics and actuator subsystem. At the present time, the preliminary sensor
electronics component costs are estimated at [****] and the preliminary actuator
component costs are estimated at [****]. Based upon the current specification,
Immersion has informed Logitech that it expects that [****] to [****] can be cut
from the combined component costs of the sensor electronics and actuator
subsystem. Note: all costs are based upon the production volume target of
100,000 units per year.
*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.
29
30
EXHIBIT B
MILESTONE SCHEDULE
PAYMENT MILESTONES AMOUNT APPROX DATE
------------------ ------ -----------
DESIGN STAGE (Q2)
Actuator design has been approved
PAO PWA transferred to Logitech, and
approved by Logitech
TOTAL 75k AUG 98
EVT PREPARATION (Q3)
Actuator ready for qualification
EVT actuators available in TWN
FW available for EVT
TOTAL 75k NOV-DEC 98
EVT EXIT - DVT ENTRY (Q4)
EVT completed successfully
DVT actuators available in TWN
FWQA1 completed
TOTAL 75k MAR 99
DVT EXIT - PVT ENTRY (Q1)
DVT completed successfully
PVT actuators available in TWN
FWQA2 completed successfully
TOTAL 40k APR-MAY 99
PVT EXIT (Q2)
PVT completed successfully
MP started
TOTAL 20k JULY 99
SW ACTIVITIES:
To be planned according to SW milestones ...> Xxx XxXxxxxx 85k
30
31
EXHIBIT C
Change Order Form
Date:
Change Control Form No.:
Description of Change:
Reason for Change:
Man Hours:
Impact on Schedule:
Affect on Cost:
Accepted by Logitech: Accepted by Immersion:
LOGITECH, INC. IMMERSION CORPORATION
By: By:
------------------------------ ----------------------------------
Name: Name:
---------------------------- --------------------------------
Title: Title:
--------------------------- -------------------------------
Date: Date:
---------------------------- --------------------------------
31
32
EXHIBIT D
Software License Agreement
SOFTWARE LICENSE AGREEMENT. LOGITECH IS WILLING TO LICENSE THE ENCLOSED SOFTWARE
TO YOU ONLY ON THE CONDITION THAT YOU ACCEPT ALL OF THE TERMS CONTAINED IN THIS
LICENSE AGREEMENT. This is a legal agreement between (either an individual
end-user or an entity) and Logitech. By opening the software package, you are
agreeing to be bound by the terms and conditions of the Agreement. If you do not
agree to the terms of this Agreement, promptly return the software package and
other items that are part of this product in their original package with your
payment receipt to your point of purchase for a full refund.
GRANT OF LICENSE. Logitech and its suppliers grant you a nonexclusive license to
use one copy of the enclosed software program ("Software") on one computer only
with the Logitech product you have purchased. No other rights are granted. The
Software is in use if it is loaded on the computer's permanent or temporary
memory. For backup purposes only, you may make one copy of the Software. You
must include on the backup copy all copyright and other notices included on the
Software as supplied by Logitech. Installation on a network server for the sole
purpose of your internal distribution of the Software is permitted only if you
have purchased an individual Software package for each networked computer to
which the Software is distributed.
RESTRICTIONS. Logitech and its suppliers retain ownership of the Software. You
shall not decompile, disassemble, reverse-engineer, or modify the Software in
any way. You may not transmit the Software over a network (except as expressly
permitted by above), by telephone, or electronically using any means. You may
not transfer the software except upon a permanent transfer of the enclosed
Logitech product provided that all software updates are included in the
transfer, you do not retain a copy of the Software, and the transferee agrees to
be bound by the terms and conditions in the license. Upon any violation of the
provisions of this Agreement, rights to use the Software shall automatically
terminate and the Software must be returned to Logitech or all copies of the
Software destroyed.
32
33
EXHIBIT E
Immersion Packaging Labeling Specification
Logitech must place or have placed the following notice or other similar xxxx,
at Immersion's request, on the underside (exterior) of those products which
incorporate Licensed Technology as well as on the packaging and manuals for such
products:
"FEELit(TM) Force Feedback Technology Licensed from Immersion
Corporation".
Logitech must also place or have placed the following FEELit Mouse logo (or
future derivative of the xxxx as reasonably approved by Logitech) at Immersion's
request, prominently on retail packaging and manuals such that the logo is
clearly legible and occupies a rectangular area of no less than 0.70 inches by
0.825 inches. The xxxx must be displayed on at least two surfaces of the retail
packaging, including the front surface and specifically not including the bottom
surface.
[LOGO] [DIAGRAM]
33
