Exhibit 10.12
TECHNOLOGY TRANSFER AGREEMENT
BETWEEN WHO?VISION AND PHILIPS
This Technology Transfer Agreement ("Agreement") is made as of
September 30, 1998 (the "Effective Date") by and between Philips Flat Panel
Display (Philips FPD) Co. BV, which has its registered place of business at
Professor Xxxxxxxxx 0, 0000 XX, Xxx Xxxxxxxxxxx ("Philips") and Who?Vision
Systems, Inc., having its place of business at 000 Xxxxx Xxxxxx Xxxxx, Xxxx
Xxxxxx, XX 00000 ("WhoVision").
RECITALS
WHEREAS, WhoVision is active in the field of the development,
manufacture, marketing and sale of fingerprint sensor systems based on
WhoVision's proprietary technology named TactileSense, which uses polymers that
transform capacitive coupling into light.
WHEREAS, Philips is active in the development and manufacture of
capacitive and optical fingerprint sensors, more specifically the Philips
proprietary amorphous silicon technology.
WHEREAS, the parties, after having each other's aforementioned
proprietary fingerprint sensor technology as well as their future fingerprint
sensor (system) business objectives, have concluded that there is substantial
synergy between their fingerprint sensor (system) businesses and therefore wish
to enter into a co-operative relationship, and Philips feels that in the
interest of minimizing prices and maximizing output for fingerprint sensor
systems, Philips prefers to support WhoVision as set out hereinafter in
WhoVision's efforts to extend and complete its fingerprint sensor systems
portfolio rather than for Philips to attempt to establish a complete portfolio
of fingerprint sensor systems on its own behalf.
WHEREAS, Koninklijke Philips Electronics N.V. (as defined below) owns
patented technology in the field of fingerprint sensors based on its proprietary
amorphous silicon technology and Philips is prepared to arrange for WhoVision a
non-exclusive license thereunder as further set out hereinafter.
WHEREAS, Koninklijke Philips Electronics N.V. (as defined below) owns
know-how in the field of fingerprint sensors based on its proprietary amorphous
silicon diode technology and Philips is prepared to arrange for WhoVision an
exclusive license thereunder as further set out hereinafter.
WHEREAS, Philips is working with Cadence Design Systems Ltd. from
Bracknell, Berkshire, United Kingdom ("Cadence") on the design and development
of an ASIC to be applied
in conjunction with fingerprint sensors based on Philips proprietary amorphous
silicon diode technology. In consideration for WhoVision's payment of the fees
due to Cadence as described hereinafter, WhoVision will be party to the relevant
agreements with Cadence, such that WhoVision has certain rights to the ASIC
design and related technology so developed.
WHEREAS, Philips is prepared to grant WhoVision technological support
by certain of Philips' design engineers active in the field of the development
of fingerprint sensors based on Philips proprietary amorphous silicon
technology, on terms and conditions to be agreed upon by the parties, as further
set out hereinafter.
WHEREAS, Philips is prepared to supply to WhoVision capacitive and
photo fingerprint sensors subject to WhoVision committing to purchase from
Philips certain minimum quantities to be agreed upon.
WHEREAS, it is Philips' intent to concentrate its marketing and sales
efforts on fingerprint sensors to be applied in cellular phones and furthermore
on sales to affiliated companies within the world-wide Philips Group of
Companies and Philips is in that respect prepared to purchase fingerprint sensor
systems from WhoVision.
WHEREAS, in consideration for Philips granting WhoVision broad access
to its fingerprint sensor technology based on its proprietary amorphous silicon
technology, for Philips rendering technological support to WhoVision, for
Philips purchasing fingerprint sensor systems from WhoVision and for Philips
cooperating with WhoVision in general and for the added goodwill that will be
associated with WhoVision as a result of a strategic business alliance with
Philips, Koninklijke Philips Electronics N.V. (as defined below) will acquire
capital stock of WhoVision pursuant to a separate agreement of even date
herewith (the "Securities A") and furthermore WhoVision is prepared to grant
Philips a license, subject to certain conditions set forth herein, under
intellectual property rights and know-how generated by WhoVision related to,
based on or derived from Philips amorphous silicon technology.
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms will have the meanings
indicated:
1.1 "Capacitive Sensor System" means a device for sensing fingerprints
that uses a glass sensor designed by Philips that measures the difference
between the valleys and ridges of a fingerprint to create capacitive output, and
an ASIC that converts and stores digital information regarding the fingerprints
sensed by the sensor ("Cadence ASIC"). The Capacitive Sensor System also may
include an electronic device designed by WhoVision that converts and stores
digital
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information regarding the fingerprints sensed by the sensor, and may include a
housing designed by WhoVision to contain the sensor system. Capacitive Sensor
System may also includes software designed by WhoVision that may be used to
compare or identify fingerprints sensed by the sensor.
1.2 "Change of Control" means (a) a merger or consolidation of
WhoVision with or into any other corporation or corporations in which the
shareholders of WhoVision own less than fifty percent (50%) of the voting
securities of the surviving corporation, or (b) a sale of all or substantially
all of the assets of WhoVision (other than to a wholly-owned Subsidiary).
1.3 "Improvement" means any modification, improvement, or enhancement
to a invention or technology or Intellectual Property related thereto that is
developed by a party to this Agreement during the term of this Agreement.
Improvements made by Philips or WhoVision are referred to as "Philips
Improvements" or "WhoVision Improvements," as the case may be.
1.4 "Intellectual Property" means all current and future worldwide
patents, patent applications, trade secrets, copyrights, copyright registrations
and applications therefor, moral rights, and all other intellectual property
rights and proprietary rights (except trademarks, service marks and related
rights), whether arising under the laws of the United States of America or any
other state, country or jurisdiction.
1.5 "Invention" means any idea, design, concept, technique, apparatus,
method, discovery, improvement or work of authorship, whether or not patentable,
that is conceived or reduced to practice by one or more of the inventing party's
employees during the term of this Agreement.
1.6 "Licensed Products" means capacitive fingerprint sensors and photo
fingerprint sensors based on Philips' proprietary amorphous silicon technology.
1.7 "Licensed Philips Information" means (a) Confidential Information
owned or controlled by Philips or Philips Affiliates on or before the Effective
Date regarding the development of Photo Sensor Systems and Capacitive Sensor
Systems, including without limitation all such information relating to the use
of amorphous silicon technology in the WhoVision Field of Use, and including
without limitation the Xxxxxx ASIC 1 and 2 specifications and other information
provided by Philips to Cadence in connection with the Cadence ASIC; and (b) all
such information developed by Philips after the Effective Date in the course of
the services to be provided by Philips under the Technology Services Agreement.
1.8 "Net Sales" means [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxx
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xxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxx xxxxxxxxxx
xxxxxx xxxxxxxxxx.]
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1.9 "Optical Sensor System" means a device for sensing fingerprints
that uses an optical sensor designed by WhoVision that converts capacitive
coupling to optical output, a lens or fiber bundle designed by WhoVision to
direct the light impulses detected by the optical sensor, and an electronic
device designed by WhoVision that converts and stores digital information
regarding the fingerprints sensed by the sensor. Optical Sensor System may also
include software designed by WhoVision that may be used to compare or identify
fingerprints sensed by the sensor.
1.10 "Philips Affiliates" means Koninklijke Philips Electronics N.V. of
Eindhoven, The Netherlands, the ultimate parent company of the world-wide
Philips Group of Companies (hereinafter referred to as "Koninklijke Philips
Electronics N.V.") and any entity that is directly or indirectly majority owned
or controlled by Koninklijke Philips Electronics, by owning more than fifty
percent (50%) of the voting capital stock or otherwise, but only for as long as
such ownership or control exists.
1.11 "Photo Sensor System" means a device for sensing fingerprints that
uses a sensor designed by WhoVision that converts capacitive input to photo
output, which is attached to a photosensitive glass strip designed by Philips,
and the Cadence ASIC. The Photo Sensor System also may include an electronic
device designed by WhoVision that converts and stores digital information
regarding the fingerprints sensed by the sensor, and may include a housing
designed by WhoVision to contain the sensor system. Photo Sensor System may also
include software that may be used to compare or identify fingerprints sensed by
the sensor.
1.12 "WhoVision Business" means the development and manufacture of
capacitive and optical fingerprint sensor systems.
1.13 "WhoVision Field of Use" means the field of sensing, storing,
identifying or comparing fingerprints.
1.14 "WhoVision Products" means all products manufactured, distributed
or sold by WhoVision in the WhoVision Field of Use.
ARTICLE 2
DEVELOPMENT
2.1 WhoVision shall develop sensor systems in the WhoVision Field of
Use as follows:
2.1.1 Optical Sensor System.
Development. WhoVision shall use commercially reasonable efforts
to develop products embodying the Optical Sensor System according to the
milestone schedule and specifications in Exhibit D.
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2.1.2 Photo Sensor System.
(a) Technology Transfer. Philips shall provide WhoVision with
information, including all relevant documents, software and other materials as
described in Section 2.3, to develop the Photo Sensor System.
(b) Development. WhoVision shall use commercially reasonable
efforts to develop products embodying the Photo Sensor System according to the
milestone schedule and specifications in Exhibit D.
2.1.3 Capacitive Sensor System.
(a) Technology Transfer. Philips shall provide WhoVision with
information, including all relevant documents, software and other materials as
described in Section 2.3, to develop the Capacitive Sensor System.
(b) Development. WhoVision shall use commercially reasonable
efforts to develop products embodying the Capacitive Sensor System according to
the milestone schedule and specifications in Exhibit D.
2.1.4 Steering Committee Review. The Steering Committee (as
defined in Section 2.4) may review and modify the milestone schedules described
in this Section 2.1.
2.2 Improvements and Enhancements. WhoVision shall use commercially
reasonable efforts to develop improvements and enhancements to the products
described in Sections 2.1.1, 2.1.2 and 2.1.3. The parties may contribute
technology or resources, or otherwise cooperate to develop such additional
improvements and enhancements, as mutually agreed.
2.3 Transfer of Technology. Philips shall deliver to WhoVision all
relevant documents, software and other materials embodying the Licensed Philips
Information, and shall provide the services of certain engineers to advise
WhoVision regarding the information disclosed by Philips under this Section 2.3,
all in accordance with a Technology Services Agreement in substantially the form
in Exhibit F. WhoVision shall pay Philips for such services as set forth in such
Technology Services Agreement. A3 Ventures Incorporated ("A3") will provide
certain services to assist in the transfer of technology described in this
Section 2.3, pursuant to the Services Agreement between WhoVision and A3, which
is attached to this Agreement as Exhibit E, of which Philips is an intended
third party beneficiary.
2.4 Steering Committee. The parties shall form a technology advisory
board and steering committee ("Steering Committee") to address technological and
business issues relating to this Agreement. The Steering Committee will consist
of 2 representatives from each party, one of which must be a corporate officer
of such party, selected by such party. The Steering Committee will meet
quarterly, or as otherwise agreed by the parties, at such locations as the
parties agree. Each party
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shall bear its own personnel and travel costs and expenses relating to Steering
Committee meetings. Decisions of the Steering Committee will be made by
unanimous approval, and a quorum will consist of 4 members.
2.5 Disclosures and Technology Review. WhoVision shall present
quarterly reports to the Steering Committee regarding the development of the
WhoVision Products and technology in the field of the Licensed Products, subject
to existing and future restrictions on WhoVision in agreements between WhoVision
and third parties for the co-development of products in the field of the
Licensed Products. WhoVision shall disclose to Philips its development plans for
the WhoVision Products and technology in the WhoVision Field of Use
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Philips acknowledges WhoVision may acquire or develop alternative technologies
at any time, so long as such development does not violate Philips' intellectual
property rights or this Agreement.
2.6 Development Costs. WhoVision shall pay all the costs of the
development described in this Section 2.
ARTICLE 3
INTELLECTUAL PROPERTY
3.1 Patent License. Philips shall cause Koninklijke Philips Electronics
N.V. to grant to WhoVision the non-exclusive (subject to Section 3.3),
worldwide, non-transferable, royalty-free (except under Section 3.11),
irrevocable (except under Section 3.6) and non-sublicenseable right under
certain of Philips' patent rights, during the term ending with the last
expiration of any such patent, to make, use, sell, have made, import, lease, and
otherwise dispose of products in the field of the Licensed Products, pursuant to
the Patent License Agreement in Exhibit A. In case of a WhoVision Change of
Control, the patent license mentioned in the previous sentence will remain
effective as provided for herein and in the Patent License Agreement in Exhibit
A for the WhoVision Business only, or the license may be transferred subject to
the terms and conditions set out in the Patent License Agreement in Exhibit A
for the WhoVision Business only, subject to the prior written approval of
Koninklijke Philips Electronics N.V., which will not be unreasonably withheld.
3.2 Proprietary Information License. Koninklijke Philips Electronics
N.V. hereby grants to WhoVision, under Koninklijke Philips Electronics N.V.'s
and all Philips Affiliates' rights to the Licensed Philips Information, a
non-exclusive (subject to Section 3.3), non-transferable, royalty-free (except
under Section 3.11), irrevocable (except under Section 3.6), non-sublicenseable,
perpetual license to use such proprietary information to make, use, sell, have
made, import, lease, and otherwise dispose of products in the field of the
WhoVision Field of Use. In case of a WhoVision Change of Control, the license
mentioned in the previous sentence will remain effective as provided for herein
for the WhoVision Business only, or the license may be transferred subject to
the terms
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and conditions set out herein for the WhoVision Business only, subject to the
prior written approval of Koninklijke Philips Electronics N.V., which will not
be unreasonably withheld. Nothing in this Section 3.2 will be deemed to require
Philips to disclose any proprietary information outside the field of the
Licensed Products.
3.3 Exclusivity. Neither Philips nor Koninklijke Philips Electronics
N.V. nor any Philips Affiliates shall grant to any third party the right to use
(a) the Licensed Philips Information; (b) the Philips Improvements; (c) any
Innovations (as defined in the Cadence Agreement) assigned jointly to WhoVision
and Philips under Section 6.2 of the Cadence Agreement; (d) any Joint
Innovations (as defined in the Cadence Agreement); or (e) the rights granted
jointly to WhoVision and Philips under Section 7.2 of the Cadence Agreement to
make products in the WhoVision Field of Use, nor shall Philips use the Licensed
Philips Information to make fingerprint sensors based on amorphous silicon diode
technology. Subject to Section 3.14, such obligation will cease with respect to
the Photo Sensor System if WhoVision fails to deliver the Photo Sensor System in
accordance with the milestone schedule described in Section 2.1.2, and such
obligation will cease with respect to the Capacitive Sensor System if WhoVision
falls to deliver the Capacitive Sensor System in accordance with the milestone
schedule described in Section 2.1.3. In addition, subject to Section 3.14, such
obligation will cease if WhoVision commits either of the following breaches of
the Agreement: (i) if WhoVision cannot meet the quarterly minimum volume orders
required under Article 4 of this Agreement; or (ii) if WhoVision materially
breaches its non-use or non-disclosure obligations under Article 8 of this
Agreement.
3.4 License to Philips Improvements.
3.4.1 Amorphous Silicon Technology. Koninklijke Philips
Electronics N.V. hereby grants to WhoVision, under Koninklijke Philips
Electronics N.V.'s and all Philips Affiliates' rights to the Philips
Improvements, a non-exclusive (subject to Section 3.3), nontransferable,
royalty-free (except under Section 3.11), irrevocable (except under Section
3.6), non-sublicenseable, perpetual license to make, use, sell, have made,
import, lease, and otherwise dispose of products in the field of the Licensed
Products. In case of a WhoVision Change of Control, the license mentioned in the
previous sentence will remain effective as provided for herein for the WhoVision
Business only, or the license may be transferred subject to the terms and
conditions set out herein for the WhoVision Business only, subject to the prior
written approval of Koninklijke Philips Electronics N.V., which will not be
unreasonably withheld.
3.4.2 Other Fingerprint Sensor Technology. Koninklijke Philips
Electronics N.V. hereby grants to WhoVision, under Koninklijke Philips
Electronics N. V.'s and all Philips Affiliates' rights to the Philips
Improvements in the field of fingerprint sensor technology other than in the
field of the Licensed Products, a non-exclusive, non-transferable, irrevocable
(except under Section 3.6), non-sublicenseable, perpetual license to make, use,
sell, have made, import, lease, and otherwise dispose of products in the field
of the Licensed Products; provided that (i) such grant is subject to any other
current or future agreements between Philips and any third party, and (ii)
WhoVision shall pay to Philips a reasonable royalty for such license, to be
determined in good faith by the parties. In
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case of a WhoVision Change of Control, the license mentioned in the previous
sentence will remain effective as provided for herein for the WhoVision Business
only, or the license may be transferred subject to the terms and conditions set
out herein for the WhoVision Business only, subject to the prior written
approval of Koninklijke Philips Electronics N.V., which will not be unreasonably
withheld. Philips shall use commercially reasonable efforts to disclose to
WhoVision its development plans for the products and technology in the WhoVision
Field of Use [xxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxx
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obligations under this Section 3.4.2 will terminate automatically if Philips
terminates the exclusivity of the licenses under Section 3.3.
3.5 Other Intellectual Property. Koninklijke Philips Electronics N.V.
hereby grants to WhoVision, under Koninklijke Philips Electronics N.V.'s rights
to any works of authorship included in the Licensed Philips Information, a
non-exclusive, non-transferable, non-sublicenseable, royalty-free (except under
Section 3.11), perpetual, irrevocable (subject to Section 3.6) license under
Philips' copyrights, mask work rights, and design rights, to use, copy,
distribute, display, and perform such works, solely in connection with the
exercise of WhoVision's rights under Sections 3.1, 3.2 and 3.4.
3.6 Termination of License. Subject to Section 3.14, Philips may
terminate the licenses under Sections 3.1, 3.2, 3.4 and 3.5 above only if
WhoVision has materially breached WhoVision's obligations to Philips under
Section 5.1 with respect to a product that WhoVision has developed in
satisfaction of WhoVision's obligations under Section 2.1.
3.7 Ownership. Each party will retain the rights in its Intellectual
Property developed before the Effective Date, subject only to the licenses
granted herein. Any Philips Improvements made by Philips employees in the course
of performing under the terms of Exhibit F will be owned as set forth therein.
3.8 Patent Prosecution. Philips and WhoVision, as the case may be, may,
at its expense, prepare, file, prosecute and maintain its solely-owned patent
applications and patents. Philips may pursue patent or other Intellectual
Property protection for Inventions that are jointly owned by Philips and
WhoVision under Section 3.7, and WhoVision shall take all reasonable actions to
cooperate fully with Philips in this regard. WhoVision shall promptly reimburse
Philips for one-half of Philips' out-of-pocket expenses in connection with such
activities as they are incurred, provided that if WhoVision notifies Philips
that it no longer desires to pay for such expenses, WhoVision will not be
responsible for any further costs under this Section 3.8 related to such patent
or patent application, in which case all right, title and interest in or to such
patent or application, and any patents issuing on such application, will be
owned solely by Philips (subject to the rights and licenses granted to WhoVision
under this Agreement) and WhoVision hereby assigns to Philips all right, title
and interest in and to such patent. If Philips declines to take such actions
with respect to
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any jointly owned Inventions in accordance with this Section 3.8, then WhoVision
may file, prosecute and maintain such patent applications or patents at its sole
expense, in which case all right, title and interest in or to such patent or
application, and any patents issuing on such application, will be owned by
WhoVision (subject to the rights and licenses granted to Philips under this
Agreement) and Philips hereby assigns to WhoVision all right, title and interest
in and to such patent. Philips shall notify WhoVision at least thirty (30) days
prior to the date the next action or filing is due to be taken with respect to a
jointly owned invention, patent application or patent, as to whether Philips
intends not to take any of the foregoing actions with respect to such invention,
patent application or patent.
3.9 Enforcement. If WhoVision believes that a third party is infringing
any of the Intellectual Property rights licensed by Koninklijke Philips
Electronics N.V. to WhoVision under this Article 3 or the Patent License in
Exhibit A, WhoVision shall notify Philips of such alleged infringement. Upon
such notice, the parties will discuss in good faith what action, if any, should
be taken by Philips with respect to such infringement. Any such action may be
taken only by Philips, in its sole discretion. Philips shall make reasonable
efforts to protect the value of the licenses granted under this Agreement.
WhoVision shall take no action against such alleged Infringement without the
prior written approval of Philips, which Philips may give or withhold in its
sole discretion.
3.10 License Back of Improvements. WhoVision hereby grants to Philips
and the Philips Affiliates the non-exclusive, perpetual, irrevocable, worldwide,
royalty-free (except as described in the last sentence of this Section 3.10),
fully paid-up, sublicenseable right and license, under all of WhoVision's
proprietary information, copyright, and other Intellectual Property rights in
and to WhoVision Improvements with respect to the technology licensed by Philips
to WhoVision under this Article 3, to make, use, sell, have made, import, lease,
and otherwise dispose of products in the WhoVision Field of Use. Such license
may be exercised by Philips only if Philips terminates the exclusivity in
accordance with Section 3.3. The right to sublicense the rights granted in this
Section 3.10 is subject to the prior written approval of WhoVision, which shall
not be unreasonably withheld. Philips' exercise of the above license with
respect to products outside the field of the Licensed Products will bear a
reasonable royalty to be negotiated by the parties.
3.11 Royalty. In consideration of the license to Philips Affiliates'
Intellectual Property and other proprietary information granted under this
Agreement, WhoVision shall pay to Koninklijke Philips Electronics N.V., no later
than thirty (30) days after the end of each calendar quarter, a royalty of
[xxxxxxxxxxxx] of Net Sales received by WhoVision during such quarter.
WhoVision's obligation to pay royalties pursuant to the previous sentence will
cease if Philips, in accordance with Section 3.3, terminates the exclusivity of
the license granted under Sections 3.1 and 3.2. WhoVision shall make quarterly
written reports to the Philips Affiliates no later than thirty (30) days after
the end of each calendar quarter, stating in each report the number,
description, and aggregate Net Sales of such WhoVision Products sold during the
calendar quarter. If no royalties are due, WhoVision shall so report.
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3.11.1 Records; Inspection. WhoVision shall keep complete and
accurate books of account and records for the purpose of determining the royalty
amounts payable under this Article 3, and regarding the pricing of products sold
under the purchase agreement referenced in Article 5. WhoVision shall keep such
books and records reasonably accessible for at least three (3) years following
the end of the calendar quarter to which they pertain. Such records will be open
for inspection during such three (3) year period by an independent certified
public accountant appointed by Philips or the Philips Affiliates, for the
purpose of verifying the royalty statements. Such inspections may be made no
more than once each calendar year, at reasonable times. Philips' or Philips
Affiliates' representative or agent will be obliged to execute a reasonable
confidentiality agreement prior to commencing any such inspection. Philips shall
bear the costs and expenses of inspections conducted under this Section 3.11.1.
unless a variation or error producing an underpayment in royalties payable
exceeding five percent (5%) of the amount paid for the period covered by the
inspection is established in the course of any such inspection, whereupon all
costs relating to the inspection and any unpaid amounts that are discovered will
be paid by WhoVision, together with interest on such unpaid amounts.
3.12 Indemnification.
3.12.1 By Philips. Philips shall indemnify WhoVision against all
third party claims arising out of the infringement of any third party copyright
or trade secret right by the Licensed Philips Information. WhoVision shall
promptly notify Philips of such claim. WhoVision shall give Philips sole control
of the defense or settlement of such claim. WhoVision shall provide reasonable
assistance and full information with respect to such claim at Philips's expense.
The Philips Corporate Patents Department is prepared to assist WhoVision in the
defense of claims filed against WhoVision by third parties alleging that
products developed and/or sold on the basis of the technology which is the
subject of the patent license mentioned in Section 3.1 infringe upon the patents
of those third parties. Such assistance will be at Philips' expense if it
relates to a claim that the Xxxxxx 1 or 2 Specification would necessarily cause
one or more Licensed Products to infringe on patents of third parties.
3.12.2 By WhoVision. WhoVision shall indemnify Philips and the
Philips Affiliates against all claims arising out of the Agreement other than
those specified in Section 3.12.1, including without limitation claims of
infringement to the extent relating to the Intellectual Property of WhoVision,
claims of unfair business practices or fraud by WhoVision, and products
liability claims relating to the WhoVision Products. Philips shall promptly
notify WhoVision of such claim. Philips shall give WhoVision sole control of the
defense or settlement of such claim. Philips shall provide reasonable assistance
and full information with respect to such claim at WhoVision's expense.
WhoVision's obligations under this Section 3.12.2 will be subject to any
indemnity obligations of Philips in the supply agreement referenced in Article 4
and the purchase agreement referenced in Article 5.
3.13 Reservation of Rights. Each party reserves all rights in its
proprietary information and Intellectual Property that are not explicitly
granted to the other party under this Agreement.
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3.14 Termination of Exclusivity or Licenses. Philips may terminate its
exclusivity obligations as described in Section 3.3, or the licenses as
described in Section 3.6 (such process, to "Terminate Rights") only as follows.
In the event Philips determines it has the right to Terminate Rights, Philips
shall provide WhoVision with written notice of such determination, which notice
must include a description of the act or omission of WhoVision that is the basis
for such determination, which act or omission is not the result of a breach by
Philips ("Termination Trigger Event"). WhoVision will have thirty (30) days in
which to cure such Termination Trigger Event before Philips may take any further
action under this Section 3.14. If WhoVision cures such Termination Trigger
Event within such time period, Philips may not Terminate Rights based on such
Termination Trigger Event. If WhoVision fails to cure such Termination Trigger
Event within such period, the parties shall submit the question to the Steering
Committee. The parties shall abide by the decision of the Steering Committee
whether Philips may Terminate Rights. If the Steering Committee cannot make a
unanimous determination regarding the matter within thirty (30) days, Philips
may bring the matter to arbitration as described in Section 7.3. The arbitrators
will be instructed to make a determination no less than thirty (30) days after
the matter is brought whether Philips has the right to Terminate Rights. To
Terminate Rights is Philips' sole remedy for any Termination Trigger Event
(except a breach of Article 8). Philips may Terminate Rights under this Section
upon thirty (30) days written notice to WhoVision if and only if (a) WhoVision
does not cure the Termination Trigger Event at any time during the process
described above; and (b) the arbitrators decide that Philips may Terminate
Rights.
ARTICLE 4
SUPPLY BY PHILIPS
Supply of Components. Philips shall sell to WhoVision the following
components for the WhoVision Products, according to a supply agreement in
substantially the form of Exhibit B: capacitive fingerprint sensors, photo
fingerprint sensors. The Steering Committee may review and modify the quarterly
minimum quantities required of WhoVision as set forth in such supply agreement.
ARTICLE 5
SALES TO PHILIPS
Requirements. WhoVision shall sell to Philips and the Philips
Affiliates all WhoVision Products requested by Philips and the Philips
Affiliates, according to a purchase agreement in substantially the form of
Exhibit C. The above obligations will be subject to that certain manufacturing
and supply agreement between WhoVision and SPOT Technology, Inc. dated July 21,
1998 and that certain manufacturing and supply agreement between WhoVision and
Silitek Corporation dated July 10, 1998, as they are in effect as of the
Effective Date.
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ARTICLE 6
CADENCE ASIC
6.1 Cadence Agreements. Philips, WhoVision and Cadence have entered
into a Professional Services Agreement in the form attached as Exhibit G (the
"Cadence Agreement"). Philips and WhoVision are jointly and severally liable for
the obligations under the Cadence Agreement of the Customer (as such term is
defined therein). Philips has made payments to Cadence for work performed
through August 19, 1998. WhoVision shall be responsible for all payments to
Cadence for work performed thereafter. WhoVision shall be the primary contact as
the Customer (as such term is defined in the Cadence Agreement) of Cadence, with
assistance from Philips. All correspondence from either party regarding the
Cadence Agreement shall be copied to WhoVision and Philips.
6.2 Indemnification. Philips shall indemnify WhoVision against claims
by Cadence relating to technology provided by Philips to Cadence. WhoVision
shall promptly notify Philips of such claim. WhoVision shall give Philips sole
control of the defense or settlement of such claim. WhoVision shall provide
reasonable assistance and full information with respect to such claim at
Philips' expense. WhoVision shall indemnify Philips against claims by Cadence
for breach of other Customer (as defined in the Cadence Agreement) obligations
unless Philips has expressly undertaken to perform such obligations. Philips
shall promptly notify WhoVision of such claim. Philips shall give WhoVision sole
control of the defense or settlement of such claim. Philips shall provide
reasonable assistance and full information with respect to such claim at
WhoVision's expense.
ARTICLE 7
DISPUTE RESOLUTION
7.1 Disputes. Any dispute relating to this Agreement will be referred
to the Steering Committee. If the Steering Committee cannot resolve a dispute
within thirty (30) days after such dispute is referred to the Steering Committee
under Section 7.1, the parties shall abide by the dispute resolution procedures
in Section 7.2 and 7.3.
7.2 Mediation. The parties shall submit to non-binding mediation of the
dispute before a professional mediator, whom the parties will mutually select.
If such dispute is not resolved within thirty (30) days of the start of such
mediation, the parties shall resolve the dispute as set forth in Section 7.3.
7.3 Arbitration Proceedings. The parties shall resolve disputes through
binding arbitration using the rules of conciliation and arbitration of the
International Chamber of Commerce ("ICC") having its seat in Paris, France. The
arbitration will take place before three (3) arbitrators appointed in accordance
with ICC rules (the "Panel"). The parties and the arbitrators shall use their
best efforts to complete the arbitration within one (1) year after the
appointment of the Panel, unless a party can demonstrate to the Panel that the
complexity of the issues or other reasons warrant an extension of such time
limit. In such a case, the Panel may extend such time limit as reasonably
required. The
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Panel shall, in rendering its decision, apply the substantive law of the State
of California, without regard to its conflict of laws provisions. The
arbitration will take place in the English language, in Santa Xxxxx County,
California. The parties shall submit all pleading and written evidence in the
English language. The party losing the arbitration, as designated by the Panel,
shall pay the fees of the Panel. If the Panel is unable to designate a losing
party, the parties shall equally split the fees of the Panel. Each party shall
bear the costs of its attorneys' and experts' fees, provided that the Panel may,
in its discretion, award the prevailing party all or part of the costs and
expenses incurred by the prevailing party in connection with the arbitration.
7.4 Injunctive and Equitable Relief. Notwithstanding Sections 7.1, 7.2
and 7.3 above, should any dispute arise relating this Agreement, either party
may apply to any court of competent jurisdiction for injunctive or equitable
relief.
ARTICLE 8
NON-USE AND NON-DISCLOSURE
8.1 Definition. "Confidential Information" means any information
disclosed by either party to the other party, either directly or indirectly, in
writing, orally or by inspection of tangible objects (including without
limitation documents, prototypes, samples, plant and equipment), which is
designated as "Confidential," "Proprietary" or some similar designation.
Information communicated orally shall be considered Confidential Information if
such information is confirmed in writing as being Confidential Information
within a reasonable time after the initial disclosure. Confidential Information
may also include information disclosed to a disclosing party by third parties.
Confidential Information shall not, however, include any information which (i)
was publicly known and made generally available in the public domain prior to
the time of disclosure by the disclosing party; (ii) becomes publicly known and
made generally available after disclosure by the disclosing party to the
receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party at the time of disclosure by
the disclosing party as shown by the receiving party's files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving
party from a third party without a breach of such third party's obligations of
confidentiality; (v) is independently developed by the receiving party without
use of or reference to the disclosing party's Confidential Information, as shown
by documents and other competent evidence in the receiving party's possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the receiving party gives the disclosing party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an order
protecting the information from public disclosure.
8.2 Non-Use and Non-Disclosure. Neither party shall use any
Confidential Information of the other party for any purpose except to exercise
its rights and perform its obligations under this Agreement. Neither party shall
disclose any Confidential Information of the other party to third parties or to
such party's employees, except to those employees of the receiving party with a
need to know. Notwithstanding the above, either party may disclose information
on a "need-to-know" basis to potential business associates with the approval of
the other party, which will not be
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unreasonably withheld. Neither party shall reverse engineer, disassemble or
decompile any prototypes, software or other tangible objects that embody the
other party's Confidential Information and that are provided to the party
hereunder.
8.3 Maintenance of Confidentiality. Each party shall take reasonable
measures to protect the secrecy of and avoid disclosure and unauthorized use of
the Confidential Information of the other party. Without limiting the foregoing,
each party shall take at least those measures that it takes to protect its own
most highly confidential information and shall ensure that its employees who
have access to Confidential Information of the other party have signed a non-use
and non-disclosure agreement in content similar to the provisions hereof prior
to any disclosure of Confidential Information to such employees. Neither party
shall make any copies of the Confidential Information of the other party unless
the same are previously approved in writing by the other party. Each party shall
reproduce the other party's proprietary rights notices on any such approved
copies, in the same manner in which such notices were set forth in or on the
original.
ARTICLE 9
TERM AND TERMINATION
9.1 Term. The term of this Agreement will commence on the Effective
Date and continue in full force and effect in perpetuity. Neither party may
terminate this Agreement except by mutual agreement of the other party.
ARTICLE 10
LIMITATIONS ON LIABILITY
Liability Arising Out of Supply or Purchase. In addition to
the limitations on liability set forth in Section 11.11 of this Agreement, the
parties' liability arising out of the supply or purchase of WhoVision Products
will be as set forth in the supply and purchase agreements attached to this
Agreement as Exhibit B and Exhibit C respectively.
ARTICLE 11
GENERAL
11.1 Patent Marking. WhoVision shall xxxx permanently and legibly all
WhoVision Products manufactured, used or sold under the license granted by
Philips under Article 3 with all applicable patent numbers or otherwise conform
to patent laws and practices of the country in which such licensed product is
sold.
11.2 Independent Contractors. The relationship of Philips and WhoVision
established by this Agreement is that of independent contractors. Nothing in
this Agreement will be construed to create any other relationship between
Philips and WhoVision. Neither party will have any right, power or authority to
assume, create or incur any expense, liability or obligation, express or
implied, on behalf of the other.
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11.3 Confidential Terms. Except as expressly provided herein, neither
party shall disclose any terms of this Agreement to any third party without the
consent of the other party, except as required by securities or other applicable
laws, rules, and regulations, or to prospective and other investors and such
party's accountants, attorneys and other professional advisors, provided such
parties receive such information under a duty of confidentiality.
11.4 Assignment. Philips may not assign this Agreement without the
prior written consent of WhoVision, except to (i) a Philips Affiliate, or (ii) a
party that succeeds to all or substantially all of Philips' business or assets
relating to this Agreement whether by sale, merger, operation of law or
otherwise, provided that such assignee or transferee promptly agrees in writing
to be bound by the terms and conditions of this Agreement. WhoVision may not
assign this Agreement without the prior written consent of Philips. Subject to
the above, this Agreement will inure to the benefit of the parties' successors
and assigns.
11.5 Force Majeure. If either party to this Agreement is prevented from
or delayed in the performance of any of its obligations under this Agreement by
reason of acts of God, war, strikes, riots, storms, fires, or any other cause
whatsoever beyond the reasonable control of the party, the party so prevented or
delayed will be excused from the performance of any such obligation to the
extent and during the period of such prevention or delay.
11.6 Notices. Any notice, submission, or communication required or
permitted under the terms of this Agreement, or required by law, whether or not
so required elsewhere in this Agreement, must be in writing and must be (a)
delivered in person, (b) sent by first class registered mail, return receipt
requested, or air mail, as appropriate, or (c) sent by overnight air courier, in
each case properly posted and fully prepaid to the appropriate address set forth
below:
If to Philips: Xxxx Xxxxxxxx, CEO
0000 X. Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx
With a copy to: Kees Van Der Klauw
Philips Flat Panel Display (Philips FPD) Co. BV
Professor Xxxxxxxxx 0, 0000 XX
Xxx Xxxxxxxxxxx
And a copy to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxx, Esq.
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If to WhoVision: Xxxx Xxxxxxxxx, CEO
WhoVision Systems
000 Xxxxx Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Either party may change its address for notice by notice to the other party
given in accordance with this Section 11.6. Notices will be deemed to have been
given upon the earlier of (i) actual delivery in person, (ii) the date of a
receipt of such notice signed by an authorized representative of the party being
notified, (iii) the date of a written confirmation of receipt by the party being
notified, or (iv) thirty (30) days after deposit in the mail as set forth above.
11.7 Payment. All payments made under this Agreement by either party
must be in U.S. Dollars.
11.8 Language. This Agreement is in the English language only, which
language will be controlling in all respects, and any version hereof in any
other language is not binding on the parties hereto. The parties shall make or
give all communications and notices pursuant to this Agreement in the English
language.
11.9 Governing Law. This Agreement will be governed by, and construed
and interpreted in accordance with, the laws of the State of California, without
regard to its conflicts of laws principles.
11.10 No Waiver. A waiver, express or implied, by either party of any
right under this Agreement or of any failure to perform or breach hereof by the
other party hereto will not constitute or be deemed to be a waiver of any other
right hereunder or of any other failure to perform or breach hereof by such
other party, whether of a similar or dissimilar nature thereto.
11.11 Limitation of Liability. NEITHER PARTY WILL BE LIABLE TO THE
OTHER PARTY OR ANY PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL
DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE
SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS
BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN
AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR
LIKELIHOOD OF SUCH DAMAGES.
11.12 Headings. Headings included herein are for convenience only, do
not form a part of this Agreement and must not be used in any way to construe or
interpret this Agreement.
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11.13 Severability. If any provision of this Agreement is adjudicated
to be void, invalid or unenforceable, such provision will be reformed to comply
with applicable law or stricken if not so conformable, so as not to affect the
validity or enforceability of the remainder of this Agreement.
11.14 Entire Agreement. This Agreement (along with the Exhibits hereto)
constitutes the entire understanding and agreement between the parties with
respect to the subject matter hereof and supersedes any and all prior
negotiations, representations, agreements, and understandings, written or oral,
that the parties may have reached with respect to the subject matter hereof. No
agreements altering or supplementing the terms hereof may be made except by
means of a written document signed by the duly authorized representatives of
each of the parties hereto. It is understood that the Securities Agreement is
separate and independent from this Agreement and termination of either agreement
will not operate to terminate or otherwise effect the rights and obligations of
the parties under the other agreement. In the event of a conflict between the
terms of the body of this Agreement and the Exhibits, the terms of the body of
this Agreement will govern, unless such Exhibit specifically states that its
terms are to supersede the terms of the body of this Agreement. In the event any
Exhibits, or portions thereof, are incomplete at the time of execution of this
Agreement, the parties shall negotiate in good faith the completion thereof.
11.15 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
11.16 Board of Management Approval. This Agreement including its
Exhibits which form an integral part hereof are subject to the approval of the
Board of Management of Koninklijke Philips Electronics N.V.
11.17 Warranty Disclaimer. EACH PARTY HEREBY DISCLAIMS ANY WARRANTIES,
WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO ANY
PROPRIETARY INFORMATION DISCLOSED UNDER SECTIONS 2.3 AND 2.5, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
The parties have signed below to indicate their acceptance of the terms and
conditions of this Agreement:
Philips Electronics Who?Vision Systems, Inc.
North America Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxxxxx
--------------------------------- -----------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxx Xxxxxxxxx
-------------------------------- ----------------------------
Title: Chairman & CEO Flat Display Title: CEO
------------------------------- ---------------------------
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Exhibit D
Development Schedule
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Exhibit D
2.1.2
Milestone Schedule*
[xxxxxx]
[Confidential treatment is requested for redacted portion of document]
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Exhibit D
2.1.3
Preliminary Milestone Schedule*
[xxxxxx]
[Confidential treatment is requested for redacted portion of document]
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