TECHNICAL DEVELOPMENT AND MARKETING AGREEMENT
This TECHNICAL DEVELOPMENT AND MARKETING AGREEMENT (this "Agreement") is
made and entered into as of the 10th day of December, 1998, by and between
SENSAR CORPORATION, a Utah corporation with a usual place of business at ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and its corporate parent, LARSONoDAVIS
INCORPORATED, a Nevada corporation (Sensar Corporation and LarsonoDavis
Incorporated are hereinafter jointly referred to as "Sensar"), and JEOL USA,
INC., a Delaware corporation with a usual place of business at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("JEOL"), based on the following:
Premises
A. Sensar owns and/or holds licenses to certain technology that it has
used to develop and manufacture its "Jaguar" time-of-flight mass spectrometer
product.
B. JEOL is engaged in the sale and marketing of mass spectrometers and
related products and services. JEOL wishes to market Sensar's Jaguar product
and to assist Sensar in continuing to develop its Jaguar product and related
software.
Agreement
NOW, THEREFORE, based on the foregoing premises and for and in
consideration of the mutual covenants herein contained and the benefit of the
parties to be derived therefrom, the parties agree as follows:
1. Appointment as a Distributor. Sensar hereby appoints JEOL, on the
terms and conditions set forth in this Agreement, exclusive distributor in
North, Central, and South America (the "Territory") to market and solicit orders
for the sale of the Sensar Jaguar time-of-flight mass spectrometer (the "Jaguar
Product") currently being sold by Sensar to the mass spectrometry market (the
"Market"). JEOL accepts this appointment upon the terms and conditions set
forth herein and agrees to use its best efforts to promote the sale of the
Jaguar Product to the Market in the Territory. JEOL may use the commercial
distribution network of JEOL, its parent JEOL, Ltd., and all entities owned or
controlled by JEOL, Inc. (the "JEOL Group"), for the promotion, marketing, and
the sale of the Jaguar Product. Sensar shall be entitled to (i) subject to JEOL
approval, complete the sale to those entities purchasing Jaguar Products with
delivery of the product prior to April 1, 1999; (ii) sell to those entities
identified on Schedule A; and (ii) sell to purchasers outside the Territory.
2. Marketing and Sales Responsibilities.
(a) JEOL shall provide comprehensive marketing and sales service for
the Territory. JEOL shall use its best efforts to solicit orders of sales
of the Jaguar Product by advertising, symposium presentations, catalog
placements, mailings, booths at trade shows, journal articles, journal
advertising, and such other methods as may be appropriate. JEOL shall from
time to time, but not less than semi-annually, review with Sensar its
marketing plan, including documentation related thereto. JEOL shall
actively seek out new applications for the Jaguar Product and promptly
follow-up sales leads obtained from any source in a professional manner.
JEOL shall be responsible for maintaining proper records and documentation
of all sales, consistent with good accounting practices.
(b) Sensar shall provide technical and service training for JEOL
technicians and sales and applications data and training for JEOL sales and
marketing staff. It is anticipated that the technical and service training
will be at Sensar and the sale and applications training will be at JEOL.
Sensar shall bear the cost of the initial meeting at Sensar and the initial
meeting at JEOL; provided that, each party shall bear their own costs of
travel and lodging. Thereafter, the cost of training shall be invoiced to
JEOL at Sensar's standard rates.
(c) During the term of this Agreement, JEOL shall not act as a
distributor for any product that competes with the Jaguar Product without
the prior written consent of Sensar. For purposes of this Agreement, the
parties agree that (i) Maldi time-of-flight; (ii) ICP mass spectrometers;
(iii) any products currently manufactured by JEOL; and (iv) any products
manufactured by JEOL in the future for which the list price is more than
$200,000 will not be deemed to be competing products.
(d) JEOL shall be responsible for all expenses incurred in connection
with the marketing and sales efforts for the Jaguar Product within the
Territory. This includes, but is not limited to: preparing product
brochures and application notes, advertising, mailing of marketing
materials, participating in trade shows, conducting surveys, and conducting
demonstrations of the Jaguar Product.
(e) JEOL shall pay all sales taxes, import or export duties, or
levies of any kind imposed by any governmental authority which may arise in
connection with the sale or delivery of the Jaguar Products.
(f) JEOL shall provide reasonable commercial levels of after-sales
service and support to all purchasers of Jaguar Products from JEOL within
the Territory and make every reasonable effort to resolve or assist in the
resolution of customer complaints or concerns. JEOL agrees to provide a
minimum of three (3) years of such support for all installed units, whether
during or after the term of this Agreement at its usual service contract or
demand service rates. JEOL shall be responsible for its share of warranty
costs as provided in paragraph 5.
(g) JEOL shall be solely responsible for any representations or
warranties to customers or potential customers concerning the Jaguar
Products that are not contained in written materials provided by Sensar.
(h) JEOL shall not undertake any act that is materially detrimental
to Sensar or the Jaguar Products.
(i) Sensar shall provide, in a timely manner and in good faith, any
technical data and professional assistance reasonably requested by JEOL in
support of the marketing and sale of the Jaguar Products. Sensar shall
furnish JEOL with technical data, sales data, engineering materials, and
such other information as may be needed to solicit sales of the Jaguar
Products. Sensar shall use its best efforts to provide materials and
technical assistance to JEOL wherever and whenever Sensar is reasonably
required to assist in the sales of the Jaguar Product, including, but not
limited to, service manuals, block diagrams, and customer instruction
manuals in form and substance suitable to enable JEOL to market, service,
and support the Jaguar Product.
(j) Sensar shall promptly refer any inquiries, requests, and/or
orders related to the Jaguar Product received from the Territory for sales
to the Market to JEOL, and JEOL will promptly refer all inquiries,
requests, and/or orders related to the Jaguar Product to Sensar received
from outside the Market or any geographical area outside the Territory.
(k) Sensar reserves the right to maintain technical contacts and
relationships with potential and future customers; provided, however, that
JEOL shall be promptly informed of said contacts. In the event services
are performed by Sensar for customers in the Territory and Market, billing
shall be through JEOL and Sensar shall be reimbursed for its services.
(l) Sensar agrees to provide parts for the Jaguar Product for a
minimum of five (5) years from the date of the termination of this
Agreement or cessation of manufacture of the part by Sensar whichever is
later. Sensar reserves the right to substitute parts provided they are
compatible with earlier Jaguar Products sold by JEOL. At the expiration of
the five (5) year period, if Sensar is no longer maintaining an inventory
of parts, Sensar will provide to JEOL documentation sufficient to allow
JEOL to acquire the necessary parts from third-party suppliers.
(m) In the event Sensar materially fails to provide service, parts,
or support in accordance with the provisions of this Agreement and such
failure continues for a period of three (3) months after written notice
from JEOL, Sensar shall cooperate with JEOL at no additional charge, to
provide JEOL with the necessary information to permit JEOL to fully support
service, operations, and parts back up. In the event of any bankruptcy or
cessation of operations by Sensar, in addition to JEOL's rights under
paragraphs 3(b), (c), and (d), below, JEOL shall have a right of first
refusal to acquire any parts inventory related to service support of
purchased and installed Jaguar Products.
3. Manufacturing of Jaguar Product.
(a) The Jaguar Product shall meet or exceed the Specifications as
defined in Schedule B by the deadlines indicated in such schedule. Sensar
shall directly or indirectly through the use of subcontractors, manufacture
the Jaguar Products for sale by JEOL under this Agreement. Sensar shall
use its best efforts to manufacture the Jaguar Product in such a manner so
as to timely meet the sales orders placed by JEOL in accordance with the
forecasts of JEOL. Sensar shall use reasonable commercial efforts to
deliver Jaguar Products as promptly as possible, typically within six (6)
weeks from the date of the order if within the volume of sales forecasted
by JEOL as provided in subparagraph (b) below or sixteen (16) weeks if in
excess of forecasted volumes. The Jaguar Product shall be year 2000
compliant as further defined in the Specifications as defined herein.
(b) Commencing with the month of December ▇▇▇▇, ▇▇▇▇ will provide
Sensar with six (6) month sales and parts forecasts on a monthly basis
during the term of this Agreement. The initial three (3) months of each
sales and parts forecast shall be treated as a purchase order from JEOL
against which Sensar can manufacture products and replacement parts which
JEOL shall be obligated to purchase. In the event that Sensar is unable to
manufacture and deliver the Jaguar Products as a result of a cessation of
business, Sensar will grant to JEOL a manufacturing license for the Jaguar
Product and shall provide JEOL with all information necessary for JEOL to
manufacture and to provide full technical support of the Jaguar Product.
In such event, Sensar shall have the right to sell its existing inventory
to JEOL at the then current book value of such inventory and shall be
entitled to a royalty of seven and one-half percent (7.5%) of the sale
price of all Jaguar Products manufactured by JEOL. Sensar shall also
provide JEOL with the written consent of all patent holders for the
technology underlying the Jaguar Product to permit such manufacture.
(c) Within ten (10) days of signing this Agreement, Sensar will place
into escrow its then current technical documentation (the "Documentation
Package"), including, but not limited to, source codes, schematics, service
manuals, final test procedures, field installation manuals, and operation
manuals relating to the Jaguar Product and within sixty (60) days
thereafter, all engineering drawings, ▇▇▇▇ of materials, list of suppliers
and sub-contractors, final test procedures, and other such items JEOL deems
necessary. All technical and technological updates and improvements
implemented by Sensar relating to the Jaguar Product will also be placed
into escrow.
(d) The Documentation Package will be held by a mutually acceptable
independent party, under the terms of the Escrow Agreement attached hereto
as Schedule "C."
(e) Sensar agrees that it shall indemnify, defend, and hold JEOL
harmless from and against any claims, damages, costs, and expenses
(including attorneys' fees) caused by the negligence of Sensar in the
manufacture of the Jaguar Product, including, without limitation, claims
for product liability or claims based on patent, copyright, or trademark
infringement and caused by reason of any defective design or manufacture of
the Jaguar Product and without the fault or negligence of JEOL. JEOL
agrees that it shall indemnify, defend, and hold Sensar harmless from and
against any claims, damages, costs, and expenses (including attorneys'
fees) attributable to or arising out of the fault or negligence of JEOL.
(f) Notwithstanding the foregoing, Sensar's liability during the
warranty period shall be limited to its standard warranty for the Jaguar
Product as it may exist from time to time during the term of this
Agreement.
(g) To the extent necessary for JEOL to provide necessary support to
its installed customer base, the provisions of paragraphs 3(b), (c), (d),
(e), and (f) shall survive any termination of this Agreement.
4. Marketing and Manufacturing Information and Changes. JEOL shall
provide Sensar with field performance and quality information on any ongoing
basis but in no event less often than once a month during the term of this
Agreement. Such information shall contain all customer comments concerning the
implementation, use, and application of Jaguar Products. Sensar will provide
JEOL with a monthly report of any corrective action taken in response to the
information previously provided to Sensar by JEOL. The parties agree to
mutually cooperate to implement a routine corrective action process.
5. Warranty.
(a) Sensar will provide its standard printed warranty attached hereto
as Schedule D to the ultimate end user of the Jaguar Products, which is
limited to the Jaguar Products being free from defects in material and
workmanship under normal use and service, Sensar's obligation being limited
to repairing or replacing at its manufacturing facility in accordance with
the terms of the Limited Warranty shipped with such Jaguar Products. The
warranty term shall commence upon the earlier of (i) JEOL's final customer
acceptance on demonstration that the product meets the specifications at
the customer's site; or (ii) one hundred eighty (180) days subsequent to
shipment from Sensar. Sensar, with the prior written consent of JEOL,
which shall not be unreasonably withheld or delayed, may change the terms
of said Limited Warranty with respect to any Jaguar Products not yet
shipped. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE FOREGOING WARRANTY
OF SENSAR IS EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, and Sensar neither assumes nor authorizes any person to
assume for it any other liability in connection with the manufacture,
design, construction, sale, delivery, or installation of the Jaguar
Products. It is further understood and agreed that in no event shall
Sensar be liable for indirect or consequential damages of any kind arising
out of any warranty claim. JEOL shall not make, nor authorize any other
person or entity to make, any representation or warranty with respect to
the Jaguar Products greater than as set forth in this Agreement or Sensar's
Limited Warranty.
(b) The parties agree that Sensar will provide all replacement parts
and JEOL will provide all services with respect to any warranty work.
Sensar will bear the cost of any replacement parts and JEOL will bear the
cost of any necessary services up to five percent (5%) of the selling price
to the end user of the unit. Thereafter, JEOL and Sensar shall evenly
divide the costs of any necessary additional services. The costs of
services shall be calculated by the hourly rate set by JEOL for internal
charges.
6. Product Development Activities.
(a) The parties shall mutually cooperate in a joint effort to improve
Jaguar Product performance, increase quality, reduce costs, extend the
capabilities, improve marketability, and develop new instrumentation.
Sensar shall have the primary development responsibility, although JEOL
shall provide Sensar all information that is available, or which may in the
future become available, to JEOL, regarding customer needs, specifications,
know-how, technical assistance, and engineering which would assist Sensar
in such development.
(b) The parties have prepared detailed written specifications as set
forth on Schedule B (the "Specifications"), including agreed upon
milestones and target completion dates, for the initial development work to
be completed for the Jaguar Products no later than April 10, 1999.
Thereafter, Sensar shall prepare and deliver to JEOL, within ten (10)
business days of the end of each month, a report of the development
activities conducted during the month and a summary of Sensar's progress as
compared to the milestones and target completion dates set forth in the
plan.
(c) Any changes to the Specifications shall be in writing and shall
be mutually agreed to by the parties.
(d) JEOL agrees to provide partial funding for the initial
development project in the amount of $60,000 per month for the initial five
(5) months of this Agreement, or an aggregate of $300,000. The first
payment will be made on the date of this Agreement and thereafter, on
achieving certain milestones as defined in Schedule B so that the entire
balance is paid by the 10th of April 1999. Notwithstanding the foregoing,
in the event that the parties make material changes to the development
plan, they agree to negotiate in good faith to share the increased costs
associated with such changes in a reasonable manner.
(e) Any enhancements or improvements to the Jaguar Product or related
products resulting from the joint development program of the parties shall
be included in the definition of Jaguar Products for purposes of granting
JEOL exclusive marketing rights in the Territory and shall be added to the
Documentation Package held in escrow.
(f) The parties agree to hold joint meetings, on at least a quarterly
basis, alternating between Provo, Utah, and Peabody, Massachusetts, between
the project managers and key individuals involved in the sales and
marketing and development process. Both parties shall be able to set
agenda items for these meetings which shall be fixed five (5) business days
prior to the meeting.
(g) It is further agreed that Sensar will redesign the Jaguar Product
to ensure that it achieves a mass accuracy of 10ppm on a consistent basis
by no later than October 30, 1999. The definition of mass accuracy of
10ppm is contained in Schedule E. Should the redesign involved with such
mass accuracy result in increased component or labor costs for the
manufacture of the Jaguar Product, the parties agree that such increases
shall be included in the price of the Jaguar Product to JEOL at an amount
equal to such increased cost plus forty percent (40%); provided that, the
price increase to JEOL shall in no event exceed Five Thousand Dollars
($5,000.00)
7. Ownership of Jaguar Product. Subject to the provisions of paragraphs
3(b), (c), and (d), all of the rights relating to the development and commercial
application of any products produced in connection with this Agreement, and any
products which result therefrom, are, and shall remain, the sole property of
Sensar, including (without limitation) each source code, invention, discovery,
use, improvement, device, formula, application, design, apparatus, practice,
process, method of production or product, including models or prototypes, which
is conceived, developed, or reduced to practice by Sensar, its employees,
agents, or subcontractors as a result of the duties performed with respect to
this Agreement, as well as all patent applications, patents, trademarks, and
copyrights with respect to such products. Sensar's property rights shall extend
to copies of any and all notebooks, memoranda, specifications, and other items
developed as a result of the work performed hereunder. JEOL shall hold all such
information in a fiduciary capacity for Sensar and any patents, trademarks, and
copyrights that issue with respect to any product shall be in the name of, or
assigned to, Sensar. On completion of the development or other work, JEOL
shall, on Sensar's request, deliver to Sensar the items specified above, which
are owned by Sensar. In the event that Sensar and JEOL mutually agree to
develop a new product or a complete redesign of the Jaguar Product, they agree
to enter into an agreement concerning the joint ownership of such new
development efforts.
8. Jaguar Product Purchase Agreement and Schedule.
(a) JEOL shall purchase Jaguar Products from Sensar at a price to be
negotiated from time to time by the parties. The price to JEOL for the
Jaguar Product as it exists at the date of this Agreement shall be $95,000
per unit, FOB Provo, Utah, for the initial year of this Agreement.
Thereafter, the price shall be renegotiated at semi-annual intervals based
on any increased costs in parts or materials and in light of the final
specifications of the Jaguar Products as developed by the parties. JEOL
shall be free to set its own price for sale of the Jaguar Products to end
users.
(b) JEOL shall purchase a minimum of Jaguar Products from Sensar as
set forth in this Agreement. Upon the signing of this Agreement, one (1)
demonstration unit shall be ordered by JEOL, for delivery in twenty (20)
days from the order date and shall be paid for upon achieving the April
1999 Specifications.
Thereafter, JEOL shall purchase the minimum number of Jaguar Products (or
improved products if identified differently) as set forth below:
Period Number of Jaguar Products
----------------------------------- ------------------------------------
April 1999 2 (including the demonstration unit)
May 1999 2
June 1999 2
July 1999 through December 31, 1999 1 per month
January 1 through December 31, 2000 44
January 1 through December 31, 2001 68
It is the parties intention to maintain a continuous flow of orders to
permit orderly production schedules and cash flow. Both parties will cooperate
to ensure, to the extent possible, this result. If at any time subsequent to
December 31, ▇▇▇▇, ▇▇▇▇ purchases less than two (2) units in a month, then
Sensar shall have the right to terminate this Agreement upon thirty (30) days
written notice to JEOL. If at any time subsequent to December 31, ▇▇▇▇, ▇▇▇▇
purchases less than four (4) units in a month, the parties agree, at the request
of either party, to mutually review their relationship and to make such
modifications as may be appropriate. To the extent that the parties are unable
to agree within ninety (90) days of the notice, either party can terminate this
Agreement on thirty (30) days written notice.
(c) If JEOL does not purchase the minimum amount of Jaguar Products
indicated above for the periods through December 31, 1999, it shall, within
ten (10) days of the end of each such period, pay $50,000 to Sensar for
each unit not purchased. Any units including the demonstration unit
purchased in advance of the minimum requirements shall be credited against
future minimums for the period ending December 31, 1999. If, at December
31, ▇▇▇▇, ▇▇▇▇ has sold at least a minimum of twelve (12) units, Sensar
shall give JEOL credit for any dollar amounts paid to Sensar during the
preceding period in lieu of minimum purchases.
(d) All Jaguar Products shall be shipped at the direction of JEOL,
FOB Sensar's manufacturing facility. Payment shall be due from JEOL within
forty-five (45) days after receipt of a unit but in no event more than
sixty (60) days after shipment. Amounts not due when paid and other terms
of the sale shall be governed by Sensar's standard purchase order
provisions, a copy of which is attached hereto as Schedule F and which
shall not be modified as to the products sold hereunder to JEOL, without
JEOL's prior written consent which shall not be unreasonably withheld or
delayed.
9. Expansion of Territory. If the activities under the terms of this
Agreement are mutually satisfactory, the parties agree to seek to negotiate a
mutually agreeable expansion of the Territory to other parts of the world. If
JEOL desires such expansion, it agrees to give Sensar six (6) months prior
written notice so that Sensar can notify the other party to any distribution
arrangement it may have in place at such time.
10. Definition of Confidential Information. For purposes of this
Agreement, the term "Confidential Information" does not apply to information
generally available to the public or to businesses in the industry in which
Sensar and/or JEOL is engaged, but otherwise shall mean (a) information
disclosed to or known to JEOL or Sensar as a direct or indirect consequence of
or through its engagement with the other, including, but not limited to, the
special proprietary and economic information regarding the business, methods,
and operation of each company; and (b) all information disclosed to JEOL or
Sensar, or to which JEOL has access during the period of its engagement, for
which there is any reasonable basis to be believed is, or which appears to be,
treated by Sensar or JEOL as Confidential Information.
11. Protection of Goodwill. JEOL and Sensar acknowledge that in the
course of carrying out, performing, and fulfilling its responsibilities to the
other, each company will be given access to and be entrusted with Confidential
Information relating to the other's business. JEOL and Sensar recognizes that
(i) the goodwill of each company depends upon, among other things, its keeping
the Confidential Information confidential and that unauthorized disclosure of
the Confidential Information would irreparably damage each company; and (ii)
disclosure of any Confidential Information to competitors of Sensar or to the
general public would be highly detrimental to Sensar and ▇▇▇▇.
▇▇. Covenants Regarding Confidential Information. In consideration of the
agreements between JEOL and Sensar and in consideration of the sums to be paid
to Sensar and compensation to be paid to JEOL during its engagement, JEOL hereby
agrees that (a) it will not, during its engagement with the other or at any time
after termination of its engagement, irrespective of the time, manner, or cause
of termination, use, disclose, copy, or assist any other person or firm in the
use, disclosure, or copying of any Confidential Information unless otherwise
ordered by a court of competent jurisdiction; and (b) all files, records,
documents, drawings, equipment, and similar items relating to the business of
Sensar or JEOL shall remain the exclusive property of the creating party and
shall not be removed from the premises of Sensar, except where necessary in
carrying out the provisions of this Agreement, without the prior written consent
of Sensar. Upon termination of this Agreement, JEOL and Sensar each agree to
deliver to the other party all Confidential Information and all copies thereof
along with any and all other property belonging to Sensar whatsoever. The
provisions of this paragraph are subject to the provisions of paragraphs 3(b),
(c), and (d) and the cross licensing provisions of paragraph 7.
13. Survival. The provisions of paragraphs 10, 11, and 12 shall survive
the termination of this Agreement.
14. Non-Solicitation of Employees. The parties agree that they will not
solicit the employees of the other or in any other way interfere with the
employment relationships of the other. The parties agree that they will not
hire the former employees of the other at any time within six (6) months of the
termination of the employment relationship. The provisions of this paragraph 14
shall survive the termination of this Agreement for one (1) year unless Sensar
is no longer actively conducting business.
15. Relief. JEOL agrees that a breach or threatened breach on its part of
the covenants contained in paragraphs 2(c), 10, 11, 12, and 14 of this Agreement
may cause such damage to Sensar as will be irreparable and for that reason, JEOL
further agrees that Sensar may be entitled as a matter of right to an injunction
out of any court of competent jurisdiction, restraining any further violation of
such covenants by JEOL, its employer, employees, partners, or agents. The right
to injunction shall be cumulative and in addition to whatever other remedies
Sensar may have, including, specifically, recovery of damages.
16. Term. Except as provided herein, the term of this Agreement shall be
for a period of five (5) years beginning on the effective date of this
Agreement. This Agreement shall continue for successive one-year periods upon
the expiration of such original period. In the event of termination in
accordance with paragraph 17, all amounts previously paid by one party to the
other shall be deemed to be in full satisfaction of the obligations of either
party, except as to payment for outstanding purchase orders and as to the
provisions of this Agreement which by their explicit terms, survive this
Agreement.
17. Termination for Cause. Either party shall have the right, without
further obligation to the other party other than for compensation previously
paid or accrued, to terminate this Agreement in the event of such other party's
fraud, theft, or any material act of gross negligence, of malfeasance, or of
intentional breach of any material covenant or term of this Agreement. Such
termination shall be effective immediately upon the acts of fraud or theft or
upon thirty (30) days prior written notice for such other events.
For purposes of this Agreement, "breach" by Sensar entitling JEOL to
terminate for cause shall be any one or more of the following:
(i) Failure to provide any of the Documentation Package within thirty
(30) days written notice from JEOL;
(ii) Failure to deliver any shipment of the Jaguar Product in full as
provided herein, within thirty (30) days written notice from JEOL;
(iii) Cessation of business or the filing of any petition for
voluntary or involuntary bankruptcy or receivership;
(iv) Failure to provide training as set forth herein;
(v) Any material failure of the Jaguar Product to meet the
Specifications per the milestones provided in Schedule B unless Sensar
shall, within sixty (60) days of written notice from JEOL, have undertaken
remedial action to cure such failure and thereafter proceed with due
diligence to complete such remedial action; and
(vi) The merger, acquisition, or consolidation of Sensar with a direct
competitor of JEOL.
Notwithstanding the foregoing, if the Jaguar Product has not met the 10ppm
specification set forth in paragraph 6(g), JEOL's remedy shall be to require
Sensar to repurchase, at seventy percent (70%) of JEOL's cost, any inventory
held by JEOL at March 31, 2000; provided that, JEOL has used good faith efforts
to sell such inventory. Sensar's obligation shall be limited to six (6) units
if JEOL has purchased all twelve (12) guaranteed units or four (4) units if JEOL
has purchased only ten (10) units. Payment shall be by delivery to JEOL of a
promissory note due December 31, 2000.
For purposes of this Agreement, "breach" by JEOL entitling Sensar to
terminate for cause shall be any one or more of the following:
(i) Failure to purchase the minimum quantity of the Jaguar Product as
set forth in paragraph 8(b);
(ii) Failure to make all payments as set forth herein;
(iii) Cessation of business or the filing of any bankruptcy or
receivership;
(iv) Failure of JEOL to use good faith efforts to meet the minimum
sales goals set forth in paragraph 8.
18. Savings Clause. If any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the validity and enforceability of any other provisions hereof.
Further, should any provisions within this Agreement ever be reformed or
rewritten by a judicial body, those provisions as rewritten shall be binding
upon Sensar and ▇▇▇▇.
▇▇. Right of Setoff. Sensar and JEOL shall each be entitled, at its
option and not in lieu of any other remedies to which it may be entitled, to set
off any amounts due from the other or any affiliate of the other against any
amount due and payable by such person or any affiliate of such person pursuant
to this Agreement or otherwise.
20. Representations. JEOL and Sensar represent and warrant to the other
that it has not previously assumed any obligations inconsistent with those of
this Agreement.
21. Succession. This Agreement and the rights and obligations hereunder
shall be binding upon and inure to the benefit of the parties hereto and their
respective legal representatives, and shall also bind and inure to the benefit
of any successor of Sensar by merger or consolidation of any assignee of all or
substantially all of its property. Except to any such successor or assignee of
Sensar, neither this Agreement nor any rights or benefits hereunder may be
assigned by either party hereto.
22. Notices. All notices provided for by this Agreement shall be made in
writing, (a) either by actual delivery of the notice into the hands of the
parties entitled to notice, or (b) by the mailing of the notice in the United
States mail to the address set forth in the introductory paragraph, certified or
registered mail, postage prepaid, return receipt requested or by Federal
Express, UPS, or other overnight carrier. The notice shall be deemed to be
received in case (a) on the date of its actual receipt by the parties entitled
thereto, and in case (b) three (3) days after the date of deposit in the United
States mail. Any party hereto may, at any time by giving notice to the other
party in the manner prescribed above, designate any other address in
substitution of the foregoing address to which such notice shall be given.
23. Entire Agreement. This Agreement contains the entire Agreement
between the parties hereto with respect to the subject matter contained herein.
No change, addition, or amendment shall be made except by written agreement
signed by the parties hereto.
24. Waiver of Breach. The waiver by either party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by any party.
25. Governing Law. The laws of the state of Delaware shall govern the
validity, construction, enforcement, and interpretation of this Agreement.
26. Attorneys' Fees. In the event that any party institutes any action or
suit to enforce this Agreement or to secure relief from any default hereunder or
breach hereof, the breaching party shall reimburse the nonbreaching party for
all costs, including reasonable attorneys' fees, incurred in connection
therewith and in enforcing or collecting any judgment rendered therein,
including such costs which are incurred in any bankruptcy or appellate
proceeding.
DATED as of the date first above written.
Sensar:
SENSAR CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
LARSONoDAVIS INCORPORATED
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
JEOL:
JEOL USA, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive
Officer
By /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President and
Treasurer