EXHIBIT 10.14
AMENDED AND RESTATED
RESEARCH AND DEVELOPMENT SERVICES AGREEMENT
This Amended and Restated Research and Development Services Agreement (the
"Agreement") is effective as of October 1, 1999, between X10 Ltd., a Bermuda
corporation ("X10 Ltd."), and X10 Wireless Technology, Inc., a Delaware
corporation ("X10 Wireless Technology").
RECITALS
A. Whereas, X10 Ltd. is in the business of designing and developing
powerline-based home and small office networking products, and has technical
expertise and facilities dedicated to research and development of such products;
B. Whereas, X10 Wireless Technology is in the business of designing,
developing, marketing, selling and distributing broadband wireless- and
powerline-based home and small office networking products;
C. Whereas, X10 Ltd. and X10 Wireless Technology have previously entered
into that certain Research and Developmental Services Agreement (the "Original
Agreement") dated and effective as of October 1, 1999, pursuant to which X10
Wireless Technology contracted for research and development services provided by
X10 Ltd.;
D. Whereas, the Original Agreement did not adequately set forth the
entire understanding between the parties with respect to the provision of
research and development services by X10 Ltd. and with respect to certain other
terms incidental thereto; and
E. Whereas, the parties now wish to amend and restate the Original
Agreement in order to clarify and memorialize the correct understanding of the
parties with respect to the research and development services to be provided
under the Original Agreement and to further describe the obligations and
existing practices of the parties in connection therewith;
AGREEMENT
Now, therefore, in consideration of the foregoing, the mutual covenants and
conditions contained in this Agreement and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1. Development Services. X10 Ltd. shall, at the direction of X10
Wireless Technology:
a. Undertake such research and development for the design and
production of broadband wireless- and powerline-based home and small office
networking products and other electronic products as may be requested from time
to time by X10 Wireless Technology in accordance with design criteria and
specifications provided from time to time by X10 Wireless Technology.
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b. Submit binding quotes for completion of the services described in
Section 1.a. above and production of workable prototypes of products identified
by X10 Wireless Technology.
c. Provide quotes of the cost per unit to manufacture products
selected by X10 Wireless Technology.
d. Determine all necessary or appropriate production standards and
licensing requirements for each product, in order to ensure that if and when the
product is produced, marketed and sold, it will be in compliance with all
applicable federal laws and regulations within the United States, or other
applicable country of sale, and the country of origin.
e. Produce workable prototypes of products as requested by X10
Wireless Technology, in quantities specified by X10 Wireless Technology.
f. Provide to X10 Wireless Technology detailed specifications for
all prototypes produced under this Agreement as well as provide appropriate
specifications for the packaging and labeling of such prototypes.
2. No Obligation. X10 Wireless Technology shall be under no obligation
to use X10 Ltd. for research and development services, to purchase or source
from X10 Ltd. any products developed under this Agreement or to utilize any
manufacturing services of X10 Ltd. in connection with the production of any such
products. X10 Wireless Technology shall be entitled to use the research and
development services of any third party to meet its design and production needs.
Further, X10 Wireless Technology shall be entitled to use the materials and/or
services of any supplier or manufacturer in connection with the production of
any such products and any materials required for such manufacturing, and X10
Ltd. hereby grants any necessary license of X10 Ltd.'s technology and
intellectual property rights in order to allow such manufacture of products.
3. Production Schedule. The delivery of designs, specifications and
prototypes being produced by X10 Ltd. shall be in accordance with a production
schedule to be agreed upon by the parties in connection with each proposed
product. In order to provide timely service to X10 Wireless Technology in all
phases of development, X10 Ltd. agrees to accord design requests submitted by
X10 Wireless Technology priority in preference to any other research,
development or engineering projects undertaken by X10 Ltd., including, but not
limited to, any research, development or engineering projects undertaken by X10,
Ltd. on its own behalf.
4. Service Fees. X10 Wireless Technology shall pay to X10 Ltd. a service
fee in connection with the services provided by X10 Ltd. under this Agreement,
in an amount equal to the quote provided to X10 Wireless Technology by X10 Ltd.
pursuant to Section 1.b above (the "Fee"). The Fee for each product shall be
payable one-third at the commencement of design and development, one-third upon
receipt of the initial prototype or a tooled sample of the product, and the
balance upon approval and acceptance of the final product by X10 Wireless
Technology. In the event that the final product(s) requested to be developed by
X10 Wireless Technology do not, in the reasonable commercial judgment of X10
Wireless Technology, perform in accordance
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with the design criteria and specifications provided, X10 Ltd. agrees to refund
any payments made by X10 Wireless Technology for the non-performing product(s).
5. Ownership of Designs, Specifications and Prototypes. X10 Ltd.
acknowledges and agrees that all right, title and interest in and to (i) all
patents, copyrights, trade names, logos, trademarks, service marks, know-how,
ideas, inventions, concepts and other intellectual property rights which are
embodied in, developed in connection with, incorporated into or placed upon any
of the designs, specifications or prototypes developed by X10 Ltd. pursuant to
this Agreement, or any products developed in connection therewith (the
"Intellectual Property Rights"), and (ii) all designs, specifications and
prototypes developed by X10 Ltd. pursuant to this Agreement, and any products or
technology developed in connection therewith (the "Technology"), shall be owned
exclusively by X10 Wireless Technology. X10 Ltd. shall cause any third parties
who design or develop any Intellectual Property Rights or Technology to assign
all right, title and interest in and to the Intellectual Property Rights and
Technology to X10 Wireless Technology. At any time during the term of this
Agreement, upon X10 Wireless Technology's request, X10 Ltd. shall deliver to X10
Wireless Technology, in the manner requested by X10 Wireless Technology, all
designs, specifications, prototypes and other information relating to the
Intellectual Property Rights, the Technology, and any request for or performance
of any services or the design or development of any products pursuant to this
Agreement.
6. Warranties. X10 Ltd. represents and warrants that:
a. To its knowledge, none of the designs, specifications or
prototypes designed and developed by X10 Ltd. pursuant to this Agreement, or any
products developed in connection therewith, will infringe any patent, copyright,
trademark, trade name, trade secret or other intellectual property or
proprietary right of any third party;
b. To its knowledge, the resale by X10 Wireless Technology of any
products designed and developed by X10 Ltd. pursuant to this Agreement will not
violate any laws, regulations, orders or ordinances of the federal law of the
United States, any applicable country in which products are sold, or the country
of origin, or any agency of the foregoing; and
c. All design, production, manufacturing and associated activities
undertaken by X10 Ltd. pursuant to this Agreement will be performed in a
workmanlike manner in accordance with prevailing professional standards.
7. Indemnity.
a. Indemnification. Each party (the "Indemnifying Party") shall
defend, indemnify and hold the other party and its officers, directors, agents,
customers and sublicensees harmless from and against any loss, damage, injury,
liability, claim, causes of action or other expense, including reasonable
attorneys' fees involved in the defense of any such action, that the other party
may suffer arising out of or resulting from the indemnifying party's services,
or activities performed pursuant to this Agreement including, without
limitation, (i) any claim based on the negligence or willful misconduct of the
indemnifying party or any of the indemnifying
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party's Affiliates; and (ii) any breach of the representations and warranties,
if any, set forth in Section 6 of this Agreement.
b. Indemnification Procedure. In the event the Indemnifying Party
is obligated to indemnify the other Party (the "Indemnified Party") under this
Agreement, the Indemnified Party will, as soon as is reasonably practicable, (i)
provide the Indemnifying Party with prompt written notice of any claim for which
indemnification is required, (ii) tender the defense of any such claim to the
Indemnifying Party, (iii) provide full cooperation for such defense at the
Indemnifying Party's expense, and (iv) not settle without the Indemnifying
Party's prior written approval, not to be unreasonably withheld. Notwithstanding
the foregoing, failure to give prompt notice as required by this Section 7.b.
shall not preclude any claim for indemnification unless such failure has the
effect of prejudicing the rights of the Indemnifying Party with respect to such
claim. The Indemnified Party may participate in any such defense or settlement
with counsel of its own choosing at its expense.
8. Limitation of Liability. In no event will X10 Ltd. be liable for any
consequential, indirect, exemplary, special or incidental damages including,
without limitation, any lost profits, arising from or relating to this
Agreement. X10 Ltd.'s total cumulative liability in connection with this
Agreement, whether in contract, tort or otherwise, will not exceed the amount of
fees actually paid to X10 Ltd. hereunder.
9. Confidentiality.
a. Confidential Information. "Confidential Information" shall
consist of all information and materials clearly identified in writing as
Confidential Information including, without limitation, formulas, methods, know
how, processes, designs, new products and the terms and pricing under this
Agreement.
b. Confidentiality Obligations. Each party agrees not to use or
disclose any Confidential Information of the other, except as may be necessary
to (i) third parties who have a specific need to know in order to facilitate the
design, development and manufacture of prototypes and products and who have
executed confidentiality agreements with such party sufficient to cover the
confidential information disclosed, or (ii) employees of such disclosing party
who have a specific need to know in order to fulfill the terms of this Agreement
and who agree, in writing, to hold all such information in confidence. Further,
each party agrees not to disclose any Confidential Information of the other
party to any third party, including affiliates of such disclosing party,
without the prior express written permission of the other party. These
confidentiality provisions of this Section 9 shall not apply to any information
that is or becomes generally available to the public through no fault of the
party seeking to disclose the information, or any information properly obtained
from a completely independent source under no obligation of confidentiality.
The confidentiality provisions of this Section 9 shall also not apply to
prohibit disclosure of Confidential Information (x) as required by applicable
disclosure laws; or (y) in connection with a court order requiring disclosure,
in which case the party required to disclose the Confidential Information must
provide immediate notice of such order to the other party and cooperate in any
attempt to quash such order.
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10. Term and Termination.
a. Term. The term of this Agreement (the "Term") shall commence on
the date hereof and continue in effect until December 31, 2019. Thereafter, the
Term shall automatically be renewed for subsequent five-year terms unless
terminated by X10 Wireless Technology by written notice to X10 Ltd. at least
ninety (90) days prior to the expiration of the preceding term or as otherwise
provided herein.
b. Termination. This Agreement may be terminated by either party
upon breach of any material obligation or condition hereof by the other,
effective thirty (30) days after giving written notice to the other of such
termination specifying such breach; provided, however, that if the default or
breach is cured or shown not to exist within such period, the notice shall be
deemed withdrawn and of no effect; provided, however, that this Agreement may be
terminated immediately by X10 Wireless Technology upon breach of the
confidentiality obligations in Section 9 hereof by X10 Ltd. The right to
terminate hereunder is not exclusive and may be exercised in conjunction with or
in addition to any other right or remedy such party might have, at law or
equity.
11. Continuing Obligations. Upon termination of this Agreement, X10 Ltd.
shall deliver to X10 Wireless Technology, in the manner requested by X10
Wireless Technology, all designs, specifications, prototypes and other
information relating to any request for or performance of any services or the
design or development of any products pursuant to this Agreement. In addition,
X10 Ltd. shall promptly refund to X10 Wireless Technology all Fees paid by X10
Wireless Technology for any project for which X10 Wireless Technology has not
provided final approval and acceptance. The provisions of this section and
Sections 5 ("Ownership of Designs, Specifications and Prototypes"), 7
("Indemnification"), 9 ("Confidentiality"), 17 ("Waiver"), 18 ("Governing Law"),
19 ("Severability") and 20 ("Attorneys' Fees") shall survive termination or
expiration of this Agreement for any reason.
12. Force Majeure. No failure or omission by either party in the
performance of any obligation hereunder shall be deemed a breach of this
Agreement, nor create any liability if same shall arise from acts of God, acts
of war, condemnation, appropriation, governmental regulations or orders, floods,
the elements, fire, explosions and other casualties, accidents, transportation
delays, embargo, or any other occurrences beyond the reasonable control of such
party ("Force Majeure"). Each party agrees to promptly notify the other party
of any of the foregoing occurrences and the non-performing party shall be
excused from performance, to the extent it relates to the Force Majeure, so long
as such conditions prevail; provided, however, that if the non-performing party
remains unable to perform for a continuous period of ninety (90) days, the other
party may engage another party to perform the services described in this
agreement at the expense of the non-performing party.
13. Relationship of Parties. The relationship between X10 Ltd. and X10
Wireless Technology is and during the term of this Agreement shall be solely
that of independent contractors. X10 Ltd. will not have, and will not represent
that it has, any power, right or authority to bind X10 Wireless Technology, or
to assume or create any obligation or responsibility, express or implied, on
behalf of X10 Wireless Technology or in X10 Wireless Technology's name, except
as herein expressly provided. Nothing stated in this Agreement shall
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be construed as making partners of X10 Ltd. and X10 Wireless Technology, nor as
creating any agency, employment or franchise relationship between the parties.
14. Assignment. X10 Ltd. may not assign, encumber or in any way transfer
or delegate any interest, right or duty under this Agreement without prior
written consent of X10 Wireless Technology. X10 Wireless Technology shall be
entitled to assign, encumber or in any way transfer or delegate any interest,
right or duty under this Agreement to any affiliate of X10 Wireless Technology,
or to any third party, without consent of X10 Ltd., provided that such affiliate
or third party agrees to be bound by all of the terms and obligations of this
Agreement.
15. Notices. All notices or other communications hereunder shall be in
writing and shall be made by hand delivery, internationally-recognized overnight
courier, electronic mail or registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
X10 Wireless Technology, Inc.: X10 Wireless Technology, Inc.
00000 00xx Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: President
e-mail: xxxx@x00.xxx
X10 Ltd.: X10 Ltd.
Xxxx 0000-0,
Hilder Center
0 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxx Xxxx
e-mail: xxxxx@xxx.xxx
or at such other address as shall be furnished by any of the parties by like
notice, and such notice or communication shall be deemed to have been given or
made as of the date so delivered, if delivered personally one (1) day after
deposit with an internationally-recognized overnight courier, and three (3)
calendar days after so mailed, if sent by registered or certified mail.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all prior arrangements and negotiations between the parties. This Agreement may
be modified or amended only by mutual written consent of the parties; provided,
however, that after the effective date of X10 Wireless Technology's first firm
commitment underwritten public offering of its securities registered under the
Securities Act of 1933, as amended, any such modification or amendment shall be
effective only if it is approved by a majority of the directors serving on the
Audit Committee of the Board of Directors of X10 Wireless Technology.
17. Waiver. Failure by either party to enforce at any time any term or
condition under this Agreement shall not be a waiver of the right to act on the
failure of such term or condition and shall not impair or waive that party's
right thereafter to enforce each and every term and condition of this Agreement.
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18. Governing Law. This Agreement will be governed and construed in
accordance with the laws of the State of Washington as applied to transactions
taking place wholly within Washington between Washington residents. The parties
hereby expressly consent to the exclusive personal jurisdiction of and venue in
the state and federal courts located in King County, Washington for any lawsuit
filed there arising from or related to this Agreement. Notwithstanding the
foregoing, however, Licensee may bring an action for injunctive or equitable
relief in any jurisdiction it deems reasonably necessary to protect its
proprietary rights. This Agreement shall not be subject to or governed by the
United Nations Convention on Contracts for the International Sale of Goods,
which is specifically disclaimed by the parties.
19. Severability. If any portion of this Agreement shall be held invalid
or inoperative, then, so far as is reasonable and possible, the remainder of
this Agreement shall be considered valid and operative, and effect shall be
given to the intent manifested by the portion held invalid or inoperative.
20. Attorneys' Fees. The substantially prevailing party in any action
between the parties which is based on this Agreement or any document related
hereto shall have its reasonable attorneys' fees and other costs incurred in
such action or proceeding, including any incurred for pre-suit, trial,
arbitration, post-judgment and appeal, paid by the other party.
21. Waiver of Conflicts. Each party to this Agreement acknowledges that
Xxxxxx Godward LLP ("Xxxxxx Godward"), outside general counsel to the X10
Wireless Technology, represents only the X10 Wireless Technology with respect to
the matters contained in this Agreement and does not represent X10 Ltd. in
connection herewith. X10 Ltd. understands that and agrees that it should not
rely upon the advice of Xxxxxx Godward with respect to the matters contained
herein, and that it has had adequate opportunity to obtain the advice of
independent legal counsel with respect to the matters contained in this
Agreement.
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In Witness Whereof, the parties have executed this Amended and Restated
Research and Development Services Agreement as of the date set forth below.
X10 Ltd., a Bermuda corporation X10 Wireless Technology, Inc., a
Delaware corporation
By /s/ Xxxxxx Xxxxxxxxx By /s/ Xxxx Xxxxxxxx
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Xxxxxx Xxxxxxxxx, President Xxxx Xxxxxxxx, Chief Financial Officer
Dated: August 9, 2000 Dated: August 9, 2000
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