STRATEGIC ALLIANCE, BUNDLING & AUTHORIZATION TO
REPLICATE AGREEMENT
FOR THE INTEGRATION OF SAC TECHNOLOGIES FINGERPRINT TECHNOLOGY AND
MIROS TRUEFACE SOFTWARE PRODUCTS
Duly made and executed on this 13th day of February 1998, by and between:
SAC Technologies, Inc., a Minnesota corporation having its principal place of
business at 0000 Xxxx 00xx Xxxxxx, Xxxxx Xxxxxxxxx 00000 hereinafter referred to
as "SAC", represented by Xxxxx Xxxxx, Chief Executive Officer; and
Miros Incorporated, a Delaware corporation with its principal offices at 000
Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, XX, 00000, hereinafter referred to as "MIROS",
represented by Xxxxx X. Xxxxxx, Chief Operation Officer.
INTRODUCTION
This Strategic Alliance, Bundling and Authorization to Replicate AGREEMENT
contains understandings between MIROS and SAC (the "Parties"), with regard to
the integration of biometric technologies, including, but not limited to: voice,
facial recognition and fingerprint for desktop computer/network access,
appliance access control and facility access control for Industrial, Commercial
and Consumer market applications.
MIROS is currently developing, marketing and licensing software products based
on facial verification, including the TrueFace PC/95, a stand alone product for
logon to Windows95, and TrueFace PC/NT, a stand alone product for logon to
WindowsNT, together referred to as the "PRODUCTS" which address opportunities in
the authentication market and desires to participate with SAC in the areas of
integration and co-marketing.
SAC is currently developing, marketing and selling various fingerprint
"identification" based products such as SACCat, SACMan, SAC_Remote and
SAC_Encrypt along with associated applications, has technical and business
interests in the PRODUCTS and desires to participate with MIROS in the areas of
integration, bundling, replication and co-marketing. From time to time, SAC may
integrate the MIROS PRODUCTS with SAC products and this integration will be
known as the "Bundle".
1.0 SCOPE OF COOPERATION - MIROS and SAC's intended cooperation will include
the following:
1.1 MIROS OBLIGATIONS - Miros grants SAC the nonexclusive,
non-transferable worldwide right and license to distribute, promote,
market, and advertise the PRODUCTS, but only when the PRODUCTS are
distributed to resellers or end users as part of the SAC product
Bundle. Miros' PRODUCTS will be included in each SAC Product Bundle.
Miros grants SAC the nonexclusive, non-transferable worldwide right
to replicate the PRODUCTS without alteration for inclusion in the
Bundle for distribution by SAC under this AGREEMENT. Miros will
deliver or otherwise make available to SAC at the delivery address
set forth in Section 6:
* a master of the PRODUCTS in suitable digital form on diskette
or CD;
* all applicable artwork associated with the PRODUCTS.
During the term of this AGREEMENT, Miros will notify SAC of any
changes to the PRODUCTS or artwork prior to the date Miros
implements the change, and will promptly provide SAC with the
necessary material for SAC to replicate the changed PRODUCTS or
artwork. SAC or its agent is responsible for providing support to
end users of the Bundle. Miros will have no obligation to provide
support to end users of the Bundle.
1.2 SAC OBLIGATIONS - SAC will include the PRODUCTS in the CD/diskette
for every SAC Product Bundle. SAC will incorporate any changes to
the PRODUCTS or artwork provided by Miros in updates to the Bundle
in a timely fashion, unless mutually agreed upon by both parties.
SAC will provide Miros with one (1) copy of the Bundle and of each
subsequent version of the Bundle containing changes to the
PRODUCTS or artwork upon commercial availability. SAC grants Miros
the nonexclusive, worldwide right and license to distribute,
promote, market, and advertise the SAC line of products.
1.3 Furthermore, the parties agree to cooperate and share resources and
information, on a global basis, in the mutual and/or joint
development, promotion, marketing and sales described below in
Sections 1.4-1.7
1.4 DEVELOPMENT-
* Joint development of, support for, and integration for certain SAC
products with MIROS' PRODUCTS.
* Joint development of, support for, and integration of biometric
facial authentication and SAC's technology.
* Working together and sharing resources and information on the
support of new interfaces and standards, in order to ensure the
timely support of significant industry standards by both parties'
products.
* Providing reciprocal access to each party's white papers and
technical briefs and reciprocal participation in beta testing,
subject to appropriate confidentiality obligations.
1.5 MARKETING AND SALES - On a case by case basis, based on mutual
business considerations and approvals:
* Joint participation in marketing efforts, including joint
advertising, press releases, joint participation in trade shows,
linking web sites, and other industry events.
* Mutual referral of relevant customer leads as determined by the
source party.
* For use on brochures, advertising, packaging and other promotional
material for the sale of the Bundle created under this AGREEMENT,
SAC may itself or may authorize SAC authorized resellers to without
Miros' prior approval, provided that Miros may at any time in its
sole discretion object to a use or uses by SAC or any SAC reseller
and such use shall promptly be suspended until the parties are able
to agree mutually on further use:
1) reproduce without alteration the PRODUCTS or artwork as
part of the Bundle; or
2) use without alteration Miros' name and the current
Miros' designated product name as part of the Bundle;
3) make factual statements referring to the fact that the
PRODUCTS are contained in the Bundle without using any
stylized form of such PRODUCTS names or other stylized
logo or symbol appearing on such PRODUCTS.
4) SAC shall provide Miros a copy of each use of Miros'
name and of any Miros product name, trademark, trade
name and trade dress, and shall require its resellers to
do the same.
* Except as stated above concerning replication of PRODUCTS, and in
the preceding paragraph: (a) no license or rights under any
trademark, trade name or trade dress of Miros is granted under this
AGREEMENT; (b) no reference to any trademark, trade name or trade
dress of Miros may appear on the Bundle, or on packaging, or related
advertising or promotional materials for the Bundle without Miros'
express prior written consent. Reference to Miros PRODUCTS, using
Miros approved artwork, on all SAC or SAC reseller packaging is
required.
* SAC acknowledges Miros' ownership of the Miros trademarks, trade
names, and trade dress that appear on the PRODUCTS and that every
use of these trademarks, trade names, and trade dress inures solely
to the benefit of Miros.
* SAC or Miros may issue press releases relating to the Bundle.
Neither party will publish such releases without the prior written
consent of the other party, such consent not to be reasonably
withheld.
1.6 SERVICES, TRAINING & SUPPORT - On a case by case basis, based on
mutual business considerations and approvals:
* Joint technical seminars for application developers;
* Joint "road shows" addressing the parties' target markets;
* Training of MIROS associates by SAC and training of SAC associates
by MIROS, providing reciprocal high priority access to technical
support resources.
1.7 EXPENSES - Additionally, the parties have agreed to the following
principals on a case by case basis, based on mutual business
considerations:
* MIROS and SAC shall be responsible for their own out of pocket
expenses generated by each party in relation to
special/extraordinary development, promotion marketing and sales
work done by either party to support the requests of the other
party.
2.0 TERM - The term of this AGREEMENT will be for [*] from the signature date,
unless terminated as defined in Section 8.0. The term may be extended or
renewed by the mutual written agreement of both parties.
3.0 TERRITORY/MARKET - The parties shall promote, market and sell the products
on a worldwide basis for desktop computer/network access, appliance access
control and facility access control for Industrial, Commercial and
Consumer market applications. The stated Territory/Market definition does
not include any existing exclusive arrangements that the parties may have
at the time of the execution of this AGREEMENT. Such exclusive
arrangements will be only as defined in an Addendum to this AGREEMENT.
4.0 CONFIDENTIALITY
4.1 In order to pursue the facilitation of the cooperation between the
parties as detailed in section 1.0 to this AGREEMENT ("Scope of
Cooperation"), the parties, having recognized that there is need to
disclose to each other confidential information, and to provide for
mutual agreements to protect such confidential information which is
to be used only for the purposes of facilitating the Scope of
Cooperation, have signed a Non Disclosure Agreement ("The NDA") on
October 8, 1997.
4.2 Without derogating from the generality of the AGREEMENT, this NDA
shall remain in effect for a period of [*] from the later of the
signature date of the present AGREEMENT or the date of subsequent
addendum to this AGREEMENT.
5.0 INTELLECTUAL PROPERTY RIGHTS
5.1 The parties hereby agree that all the proprietary interests and/or
all intellectual property rights, owned by each party prior to
entering this AGREEMENT shall remain the property of that party
solely, and that in entering this AGREEMENT or any other agreement
deriving from it, either party does not, and shall not, acquire any
rights in the other party's proprietary interests and/or all
intellectual property rights.
5.2 All rights (including but not limited to copyright, patent, trade
secret and other intellectual property rights) in and to the
PRODUCTS provided by Miros (including but not limited to any images,
photographs, animations, video, audio, or text incorporated into the
PRODUCTS), the accompanying printed materials, and any copies of the
PRODUCTS are owned by Miros and its suppliers. SAC may not rent,
lease, timeshare, lend or otherwise share or allow others to use the
PRODUCTS and may not transfer any rights under this AGREEMENT.
5.3 The parties hereby agree that software and hardware developed by SAC
for the support and integration of the PRODUCTS are the property of
SAC.
5.4 Each of MIROS and SAC hereby represents that it does not, in any
manner whatsoever, possess any proprietary interest in the
intellectual property rights owned by the other party. MIROS and SAC
shall be entitled to use each others' name, trade-names and logos as
described in this AGREEMENT, and subject to obtaining the counter
party's prior written consent, such consent not to be unreasonably
withheld.
6.0 TEAM COORDINATORS - The Parties will assign a representative from each
company to assign attendees for joint project workshops as necessary.
* For MIROS - Xxxxx Xxxxxx, Chief Operations Officer
Miros address for notices, reports and remittances:
Miros, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
* For SAC - Xxxxx Xxxxx, Chief Executive Officer
SAC address for notices, reports and remittances:
SAC Technologies, Inc.
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
* Confidential portion has been omitted and filed separately with the Securities
and Exchange Commission.
7.0 TERMS AND CONDITIONS -
7.1 There will be [*] annual volume requirements for either
party.
7.2 SAC Technologies will pay a per copy license cost for MIROS Products
based on the number of SAC product shipments, according to the fee
schedule below for quantities based on an annual calendar year
cumulative basis. Each calendar year will be a zero restart.
Annual Cumulative Quantity PRODUCT Price per Copy
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7.3 SAC Technologies will receive the best available pricing for the
PRODUCTS based on their annual volume, prepayment and
licensing/bundling fee for the term of the AGREEMENT.
7.4 In consideration of the alliance, MIROS will be assigned Distributor
status for SAC's products and be entitled to Volume Purchase pricing
at the highest quantity, according to SAC's current published price
list as amended from time to time.
7.5 SAC hereby grants MIROS an option for 48,000 shares of unregistered
SAC stock with a strike price of 85% of fair market per share price
based on an average price of the last ten (10) trading days before
execution of this AGREEMENT, exercisable for ten years from the date
of this agreement. Of these 48,000 stock option shares, 12,000
shares vest immediately and 3000 vest quarterly thereafter for three
years (total of 12,000 shares per year). SAC will allow Miros to
effect a cashless exercise of this option, which should enable Miros
to tack their holding period back to the vestment date. In the event
that SAC performs another round of financing, MIROS shares will be
registered at that time.
7.6 SAC will make a non-refundable payment of [*] as follows; [*] and
[*] to secure this alliance pricing. This payment will be used to
offset the purchase of [*] copies of the PRODUCTS for [*] a copy.
7.7 License fees are payable by SAC to Miros monthly. Within 30 days
after the end of each calendar month following initial commercial
shipment of the Bundle by SAC, SAC will mail a written statement
setting forth the basis for SAC's calculation of the license fee due
Miros at the address stated in Schedule 1, and a check covering
payment of all required license fees, to the remittance address set
forth in Schedule 1.
7.8 In order that the reports and license fees may be verified, SAC
agrees to keep full, complete, and accurate books and records in
accordance with generally accepted accounting principles covering
the Bundles sold and fees payable under this AGREEMENT for a period
of three years after the relevant transaction which gave rise to the
accrual of a fee obligation hereunder.
7.9 It is agreed that the books and records of SAC may be audited from
time to time upon written notice at least five business days in
advance, during SAC's normal business hours, but not more than twice
in each calendar year, by an independent certified public accountant
appointed by Miros and reasonably acceptable by SAC, to the extent
necessary to verify the accuracy of the fee statements and payments.
Such audit shall be completed at Miros' sole expense, at SAC's
location unless otherwise agreed to by the Parties, and limited to
an audit of the fee reports for the two years preceding the date of
the audit, except that if any discrepancy or error exceeding five
percent of the money actually due is found in connection with the
computation, the reasonable cost of such audit shall be borne by
SAC, and the scope of the audit may be expanded to cover the three
years preceding the audit.
7.10 Fee payments are to be made in U.S. dollars.
7.11 All products sold by SAC to MIROS and by MIROS to SAC shall bear the
cost of any related royalties. If the existence of other
intellectual property rights relevant to a product comes to light,
the supplying party will secure the full right to use the item
throughout the world.
8.0 TERMINATION - This AGREEMENT shall terminate at the end of its initial
term unless extended or renewed by the mutual written agreement of the
parties. Prior thereto, this AGREEMENT may be terminated by the mutual
written agreement of the parties; by either party if the other party makes
any assignment for the benefit of
* Confidential portion has been omitted and filed separately with the Securities
and Exchange Commission
its creditors or makes any composition with creditors, if any actions or
proceedings under any bankruptcy or insolvency law are taken by or against
it, if it passes a resolution for its voluntary or compulsory liquidation,
or if it suffers execution to be levied against any of its assets; or by
either party upon the failure of the other to comply with any of the
material terms and conditions in this AGREEMENT by giving the other party
written notice of termination stating the nature of the breach at least
thirty (30) days prior to the effective date of termination, provided that
the party allegedly in default may avoid termination by immediately
initiating a remedy to cure such default, curing it to the other party's
reasonable satisfaction within the thirty (30) day period, and promptly
providing proof thereof to the other party. If such default is not cured
within that time, or such longer period as applicable law may require,
this AGREEMENT shall terminate without further notice to the party
allegedly in default effective immediately upon expiration of the thirty
(30) day period or such longer period as applicable law may require. Upon
the expiration or termination of this AGREEMENT, SAC shall immediately
destroy all copies and all component parts of the PRODUCTS then in SAC's
possession. In the event of a termination of this AGREEMENT by SAC prior
to the end of the initial term pursuant to this section because of an
uncured breach by Miros, the stock option granted in Section 7.5 shall
terminate in respect to any unvested shares.
9.0 SURVIVAL - The provisions of Section 4 and 5, governing Confidentiality
and Intellectual Property Rights and any other provision which, by its
sense and context is intended to survive the termination of this
AGREEMENT, shall indefinitely survive the termination of this AGREEMENT.
10.0 WARRANTIES - Miros warrants that for a period of ninety (90) days from the
date of purchase, the Products, if operated as directed, will
substantially achieve the functionality described in the Documentation.
Miros does not warrant, however, that SAC's use of the software will be
uninterrupted or that the operation of the Software will be error-free.
Miros also warrants that the media containing the Software, if provided by
Miros, is free from defects in material and workmanship and will so remain
for ninety (90) days from the date SAC purchased it. Miros' sole and
exclusive obligation and liability for any breach of this warranty shall
be, in Miros' discretion: (i) to replace SAC's defective media, (ii) to
repair or correct SAC's defective media so that it will conform to the
above warranty, or (iii) to demonstrate to SAC how to achieve
substantially the same functionality with the Software as described in the
Documentation through a procedure different from that set forth in the
Documentation. Repaired, corrected, or replaced Software and Documentation
shall be covered by this limited warranty for the period remaining under
the warranty that covered the original Software or, if longer, for thirty
(30) days after the date (A) of shipment to SAC of the repaired or
replaced Software, or (B) Miros advised SAC how to operate the Software so
as to avoid the difficulty that SAC was having to achieve this
functionality. Only if SAC informs Miros of its problem with the Software
during the applicable warranty period will Miros be obligated to honor
this warranty. SAC must contact Miros by telephone or in writing to inform
Miros of the problem. THIS IS A LIMITED WARRANTY AND IT IS THE ONLY
WARRANTY MADE BY MIROS. NO MIROS SUPPLIER OR EMPLOYEE IS AUTHORIZED TO
MAKE ANY MODIFICATIONS, EXTENSIONS, OR ADDITIONS TO THIS WARRANTY. The
warranties set forth above shall not apply to errors or other problems
arising out of (i) modifications made to the Software by anyone other than
Miros, (ii) use of the Software on or in conjunction with hardware or
software other than the unmodified version of the hardware and software
with which the Software was designed to be used as described in the
Documentation, or (iii) with respect to the media, disaster, accident,
negligence or misuse after delivery to SAC. THIS LIMITED WARRANTY GIVES
SAC SPECIFIC LEGAL RIGHTS. SAC MAY HAVE OTHERS, WHICH VARY FROM
STATE/JURISDICTION TO STATE JURISDICTION. TO THE MAXIMM EXTENT PERMITTED
BY APPLICABLE LAW, MIROS AND ITS SUPPLIERS DISCLAIM ALL OTHER WARRANTIES,
EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH
REGARDS TO THE SOFTWARE AND ANY ACCOMPANYING HARDWARE.
11.0 LIMITATION OF LIABILITY - To the maximum extent permitted by applicable
law, and except as expressly provided in section 10 of this AGREEMENT, in
no event shall Miros or its suppliers be liable for any special,
incidental, indirect, or consequential damages whatsoever (including,
without limitation, damages for lost business profits, business
interruption, loss of business information, or any other pecuniary loss)
arising out of the use of or inability to use the software, even if Miros
has been advised of the possibility of such damages. Because some states
and jurisdictions do not allow the exclusion or limitation of liability
for consequential or incidental damages, the above limitation may not
apply to user.
12.0 INDEMNIFICATION - Notwithstanding any limitations under Section 11.0
hereof: I) Miros will indemnify, defend and hold SAC harmless against any
claim that the PRODUCTS distributed hereunder infringe any patent,
copyright, or trademark and Miros will pay any costs and damages,
including reasonable attorney's fees, that a court finally awards against
SAC as a result of such claim, provided SAC gives Miros prompt written
notice of such claim and tenders to Miros the defense and all related
settlement negotiations; 2) SAC will indemnify, defend and hold Miros
harmless against any claim that the SAC products and other Bundle software
in the Bundle distributed hereunder infringe any patent, copyright, or
trademark and SAC will pay any costs and damages, including reasonable
attorney's fees, that a court finally awards against SAC as a result of
such claim or that are paid in settlement thereof, provided Miros gives
SAC prompt written notice of such claim and tenders to SAC the defense and
all related settlement negotiations; 3) SAC will indemnify Miros against
any cost, loss, liability, or expense, including reasonable attorneys'
fees, arising out of third party claims against Miros relating to the
Bundle except to the extent the claim relates to or is caused by the
PRODUCTS; and 4) Miros will indemnify SAC against any cost, loss,
liability, or expense, including reasonable attorneys' fees, arising out
of third party claims against SAC relating to the Bundle except to the
extent the claim relates to or is caused by SAC or the third party
products included in the Bundle.
13.0 ASSIGNMENTS - The parties privileges, ownership or control in this
AGREEMENT are not transferable and shall not be transferred or assigned to
any other person, firm, corporation, partnership or other business entity,
whether by operation of law or otherwise, without the other parties prior
approval. Such transfer for assignment without the prior written approval
of the other party shall be null and void and shall not be binding.
14.0 ENTIRE AGREEMENT - This AGREEMENT, together with the Addendum's attached
constitutes the entire understanding and AGREEMENT between the parties and
supersedes any understanding, agreement or arrangements previously made or
in existence between the parties. This AGREEMENT may not be altered,
enlarged, supplemented, abridged, modified, nor any provisions waived
except as provided in this AGREEMENT, or by a written AGREEMENT between
SAC and MIROS that makes express reference to this AGREEMENT, and
specifically declares it is intended as an amendment hereto.
15.0 APPLICATION LAW - This AGREEMENT shall be governed by and construed in
accordance with the laws of the State of Massachusetts, United States of
America.
16.0 ARBITRATION - Any dispute relating to the interpretation of this Agreement
or the relationship between the parties hereunder, shall be settled by
final and binding arbitration pursuant to the rules of the American
Arbitration Association. The arbitration shall take place before a panel
of three qualified arbitrators, one chosen by each of the parties. The
parties hereby agree that results of the arbitration are final and binding
and may not be appealed by either party to any court of judicial
authority. Disputes arising out of, resulting from or relating to the
intellectual property rights of a party (including but not limited to
patents and patent rights, copyrights, trademarks, service marks, trade
secrets, and unauthorized disclosure of Confidential Information shall be
resolved as follows: notwithstanding anything to the contrary in this
Section, in the event of alleged violation of a party's intellectual
property rights, that party may seek temporary injunctive relief from any
court of competent jurisdiction. The party requesting such relief shall
simultaneously file a demand for arbitration of the dispute, and shall
request the AAA to proceed under its rules for expedited hearing. In no
event shall any such temporary injunctive relief continue for more than 30
days without review by the issuing court.
17.0 EFFECTIVE DATE - This AGREEMENT shall become effective upon execution by
both parties as of the date and year first above written, and shall
continue in force and govern all relations and transactions between the
parties until terminated and thereafter to the extent necessary to give
effective to those provisions, hereof applicable following termination.
IN WITNESS WHEREOF, the Parties have caused this Alliance AGREEMENT to be
executed by their respective authorized representatives.
For Miros Incorporated: For SAC Technologies, Inc.:
/s/ Xxxxx Xxxxxx 3/3/98 /s/ Xxxxx Xxxxx 2-13-98
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Xxxxx Xxxxxx Date Xxxxx Xxxxx Date
Chief Operating Officer Chief Executive Officer
