EXHIBIT 10.2
JOINT VENTURE AGREEMENT
This Joint Venture Agreement (JVA) is entered into by and between ▇▇▇▇▇▇▇ ▇▇▇,
Inc., on behalf of its wholly owned subsidiary, SILICON FILM TECHNOLOGIES, INC.
("SILICON") and APPLIED COLOR SCIENCE, INC. ("ACSi"), hereinafter collectively
referred to as the "Parties."
WHEREAS, SILICON, has developed technology that enables a conventional
35mm single reflex camera to capture, store, manipulate, display and transfer
digital images without any modification to the camera. This technology is
sometimes referred to herein as the "EFS." Further research and development,
testing, evaluation and deployment of this technology is needed to produce a
commercialized product and requires skill and expertise in the digital imaging
industry;
WHEREAS, APPLIED COLOR SCIENCE has more than twenty five years of
combined experience in developing digital imaging systems and image processing
algorithms;
WHEREAS, the Parties wish to join together in a joint venture for the
purpose of developing a functional prototype of the electronic film system with
modular and upgradeable image sensors, memory, display, I/O features and
35mm-quality video capture;
NOW THEREFORE BE IT RESOLVED, in consideration of the mutual covenants,
promises, warranties and other good and valuable consideration set forth herein,
the Parties agree as follows:
1. FORMATION. The parties agree to enter into a joint venture formed
pursuant to this Agreement (the "Joint Venture"). The Joint Venture shall be
considered in all respects a joint venture between the Parties, and nothing in
this Agreement shall be construed to create a partnership or any other fiduciary
relationship between the Parties. Neither Party has any authority whatsoever to
bind the other party, nor shall either party represent that it has any such
authority, express, implied or otherwise. Neither Party shall not negotiate or
enter into any oral or written contract, agreement or arrangement on behalf of,
or in the name of the other Party. The Parties shall not engage in any conduct
which would result in the breach or violation of any agreement, law, ordinance
or regulation. Neither Party shall enter into any agreement, either written or
oral, on behalf of the joint venture unless agreed to in writing by both
Parties.
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2. PURPOSE/PROJECT. The Joint Venture shall be formed for the purpose of
having ACSi develop a functional prototype of the electronic film system with
modular and upgradeable image sensors, memory, display, I/O features and
35mm-quality video capture using the three existing 4 megapixel image sensors of
SILICON and ACSI's FPGA-based Sensor Developers' platform. This purpose shall
hereinafter be referred to as the "project."
3. CONTRIBUTIONS.
3.1. The Parties shall each make an initial contribution to the Joint
Venture according to the following terms:
i. SILICON's Contribution:
a. Three existing image sensors (4megapixel) suitable for a
product demonstration;
b. Use of Intellectual property regarding electronic film
operation as follows:
#5282040-Apparatus for operating a film camera;
#5452000-An apparatus for electronic photography using a
conventional film camera;
#6147389-An image sensor package with image plane references;
#6393224-E-film cartridge with sensor avoidance feature;
#HK1004077-Apparatus for operating a conventional film camera in
an electronic mode; and,
c. Mechanical designs and hardware resources in existence
relating to the electronic film system
ii. ACSi's Contribution:
a. Patented "Universal Imager Bus" architecture for connecting
a variety of image sensors through a common interface;
b. More than twenty five years combined experience in
developing digital imaging systems and image processing
algorithms;
c. Technical and financial resources to develop a working
prototype of the electronic film system; and,
d. Waiver of $11,000 of outstanding balance due ACSi.
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3.2. Additional contributions shall be determined in writing by the
Parties as the need arises from time to time during the term of the Joint
Venture.
3.3 In addition to the contributions described above, upon execution
of this JVA SILICON shall transfer restricted shares of stock in SILICON's
parent company, ▇▇▇▇▇▇▇ ▇▇▇, Inc. (OTCBB: VYGO) in a manner and form to be
agreed upon by the parties as follows: 350,000 (THREE HUNDRED FIFTY
THOUSAND) restricted shares to ACSi and 355,000 (THREE HUNDRED FIFTY FIVE
THOUSAND) restricted shares to ▇▇▇▇▇ Van Wye.
3.4 With the exception of the shares described in Section 3.3, in the
event the Project and/or the Joint Venture are terminated for any reason
each Party shall be entitled to the immediate and unconditional return of
its contributions.
4. MANAGEMENT. The Joint Venture shall be administered by ▇▇▇▇▇▇ ▇▇▇▇▇▇,
President of ACSi, who shall perform the day-to-day management and
administration of the project and provide monthly reports to each party.
4.1 MANAGEMENT COMMITTEE. The Management Committee, composed of one
representative of each Party to be designated upon the effective date of
this agreement, shall provide the general direction for the project through
the JV Administrator. The JV Administrator can also be the representative
of a Party.
4.2 COMPENSATION. The JV Administrator and the Management Committee
managers shall not receive any compensation for services rendered by them
under this JVA.
EXPENSES OF VENTURE: All expenses incurred in the work performed pursuant to
this JVA shall be paid for by ACSi unless otherwise agreed upon in writing by
both parties.
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6. CONFIDENTIALITY.
6.1 All information, material and data labeled or designated in
writing as confidential or proprietary or which each Party or its
employees, agents or representatives are advised by the other Party is of
such character or which each Party knows or reasonably should know is
customarily treated as such within the industry of SILICON and/or ACSi, and
solely by way of illustration and not in limitation including the
following: drawings, designs, concepts, architecture and circuitry,
specifications, software programs, routines, subroutines, concepts, ideas
and formulas, production plans, designs, layouts, schedules, drawings,
sales, cost and price analyses, evaluations, formulae, lists and sales and
marketing analyses, plans and data, prototypes, pre-production samples,
parts, 3D data bases, program listings, data file printouts, printed
circuit boards, processes, component part listings and prices, product
information, new product plans, customer lists and other customer
information shall be deemed "Confidential Information". Any Confidential
Information concerning each Party, which is disclosed to or obtained by the
other Party either directly or indirectly in the performance of this JVA,
shall remain the property of the original Party and is disclosed or
obtained in strict confidence. The Parties shall not use (other than in the
performance of Services pursuant to this JVA) or disclose to others during
or subsequent to the termination of this JVA the Confidential Information
unless in each instance the disclosing Party secures the prior written
consent of the other Party. The Parties shall take every such action with
its employees and agents to effectuate the intent of this provision and the
confidentiality obligation imposed by this JVA. Information shall not be
considered confidential which:
i. is in the public domain at the time of disclosure or thereafter enters
the public domain other than through a breach of this JVA; or
ii. is in the possession of the receiving Party prior to its receipt from
the disclosing Party; or
iii. is lawfully obtained from a third party under circumstances permitting
the receiving Party to use or disclose the information without
restrictions; or
iv. is independently developed by the receiving Party; or is required to
be disclosed as a result of government or judicial action.
6.2. In addition to any other rights or remedies available, both
parties shall be entitled to enforcement of the obligations in this Section
6.1 by court injunction. The Parties shall disclose information learned in
the course of work performed only to such of its employees or independent
contractors, if any, who have a need to know and who are bound by a written
agreement to maintain the confidentiality of any such information learned
in the course of work performed in a manner consistent with this JVA.
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7. INTELLECTUAL PROPERTY. Any technology including but not limited to any
inventions, original works of authorship, developments, concepts, improvements,
designs, discoveries, ideas, trademarks or trade secrets, whether or not
patentable or registrable under copyright or similar laws, which ACSi may solely
or jointly conceive or develop in the performance of the project herein shall be
the sole property of SILICON and all rights, title and interest therein shall be
held in trust for the sole right and benefit of SILICON, shall be assigned to
SILICON in accordance with subparagraph 7.1 herein. The prototype shall also be
the exclusive property of SILICON.
7.1 TRANSFER. ACSi shall, on demand at any time after termination of
this JVA absolutely and without reservation assign, transfer and set over
to SILICON all rights, title and interest of ACSi in and to any work
product, improvement or process which ACSi may discover, make, invent,
conceive, develop or design, solely or jointly with others, during
performance of this JVA, or which was directly or indirectly discovered,
made, invented, conceived, developed or designed in the performance of the
project herein. ACSi covenants and agrees to sign any papers and do all
rightful acts or things necessary or appropriate to secure for SILICON, or
its successors or assigns, any and all rights, title and interest relating
to such work product, improvement or process, including patents and
copyrights in the United States and foreign countries. The prototype shall
be returned, on demand, at any time after termination of this JVA to
SILICON unless otherwise agreed upon in writing by the parties.
7.2 MAINTENANCE OF RECORDS. ACSi agrees to keep and maintain adequate
and current written records of all Inventions made by it (solely or jointly
with others) in the performance of this JVA. The records will be in the
form of notes, sketches, drawings, and any other format utilized in the
ordinary course of business. The records will be available to and remain
the sole property of SILICON at all times and shall be returned to SILICON
upon termination of this JVA. At any time during the existence of the Joint
Venture SILICON shall be entitled to examine and review, by itself or
through its designated representative, all such records. Such review shall
take place only upon reasonable notice and during normal business hours.
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7.3 PATENT AND COPYRIGHT REGISTRATIONS. ACSi agrees to assist SILICON,
at SILICON's expense, unless otherwise subsequently agreed to, in every
proper way to secure SILICON's rights in the technology and any copyrights,
patents, mask work rights or other intellectual property rights relating
thereto in any and all countries, including the disclosure to SILICON of
all pertinent information and data with respect thereto, the execution of
all applications, specifications, oaths, assignments and all other
instruments which SILICON shall deem necessary in order to apply for and
obtain such rights and in order to assign and convey to SILICON, its
successors, assigns, and nominees, the sole and exclusive rights, title and
interest in and to such technology, and any copyrights, patents, mask work
rights or other intellectual property rights relating thereto. ACSi further
agrees that its obligation to execute or cause to be executed shall
continue after the termination of this Agreement.
8. TERM. This JVA shall terminate upon the earlier of the following events
(a) ACSi's successful development and demonstration to SILICON of a functional
prototype of the electronic film system; (b) 180 days from the effective date of
this JVA or (c) upon mutual consent of the parties as indicated in paragraph 9.
9. TERMINATION. This JVA may be terminated by mutual written consent of
both Parties. If this Agreement is terminated, the Joint Venture shall be
terminated as well, and all Parties' obligations under this Agreement with
respect to the operation and administration of the Joint Venture shall no longer
have force or effect.
9.1 TERMINATION UPON SUCCESSFUL DEVELOPMENT AND DEMONSTRATION OF
FUNCTIONAL PROTOTYPE. The parties agree that upon termination of this JVA
based upon the successful development and demonstration of a functional
prototype to SILICON, then ACSi and SILICON shall, within 90 days of the
termination of this Agreement, enter into one or more of the following:
(a) a licensing agreement between SILICON and ACSi for ACSi's exclusive
license of the technology developed during this JVA and/or patents
indicated in Paragraph 3(a)i with terms to be determined at a later date.
In the event ACSi refuses such license and SILICON thereafter licenses the
technology developed during this JVA to a third party (exclusive of patents
indicated in Paragraph 3(a)I, then ACSi shall have a right to a 25% share
of revenue generated from said licensing agreement. This license revenue
sharing is non-cumulative to any revenue sharing generated in paragraphs
9.1(b) and 9.1(c) below and shall not apply to the licensing of patents
currently owned by SILICON; OR
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(b) a revenue sharing agreement for the commercialization of the technology
developed during this JVA culminating in an EFS provided ACSi agrees to
undertake product development and raise all of the necessary capital to
fund the project; whereupon, ACSi shall receive a 25% share of revenue
generated from the sale of production units or sale of technology developed
during this JVA and EFS rights to a third party; OR
(c) a revenue sharing agreement for the commercialization of the technology
developed during this JVA culminating in an EFS provided a third party is
found by either SILICON and/or ACSi to undertake product development and
raise all of the necessary capital to fund the project; whereupon, ACSi and
SILICON, each, shall receive a 50% share of the negotiated split of
revenues between the third party and SILICON.
In the event the parties do not, within ninety days, enter into an agreement as
indicated above, then SILICON shall thereafter have the right to enter into an
agreement with a third party for the commercialization of the results of the
development work of this JVA and/or the sale or licensing of the technology
developed during this JVA. In that event, ACSi shall be entitled to 25% of the
revenue generated from the sale of production units of the EFS or licensing or
sale of technology developed during this JVA and EFS rights to a third party.
ACSi understands and agrees that the decision whether or not to commercialize or
market the EFS or license or sell the technology developed solely by ACSi
pursuant to this JVA, other than as indicated herein, is within SILICON's sole
discretion and that no renumeration will be due to ACSi should these events
never occur.
10. LIABILITY. Each Party acknowledges that it shall be responsible for any
loss, cost, damage, claim, or other charge that arises out of or is caused by
the actions of that Party or its employees or agents. No Party shall be liable
for any loss, cost, damage, claim, or other charge that arises out of or is
caused by the actions of any other Party or its employees or agents. Joint and
several liability will not attach to the Parties; no Party is responsible for
the actions of any other Party, but is only responsible for those tasks
undertaken by it. The Parties agree that in no event will consequential or
punitive damages be applicable or awarded with respect to any dispute that may
arise between or among the Parties in connection with this JVA.
11. INSURANCE. Each party, at its own cost and expense, shall secure and
maintain in force during the term of this JVA, appropriate public liability and
casualty insurance, or adequate levels of self-insurance sufficient to insure
against any liability under this JVA.
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12. WARRANTIES. ACSi warrants that the services in furtherance of the
project herein will be performed with care, skill and diligence in accordance
with the applicable professional standards currently recognized by such
profession, and shall be of high professional quality, technically accurate and
complete, and in strict accordance with the requirements of this JVA.
13. INFRINGEMENT WARRANTY. ACSi represents, warrants and covenants that any
writings, proposals, products, systems, improvements or processes (collectively,
"Intellectual Property") which ACSi conceives or develops pursuant to this JVA
in any work performed under this Agreement will not infringe upon the patents,
patent applications, copyrights, trademarks or any intellectual property rights
of any third party. If a third party asserts a claim that the Intellectual
Property or any portion thereof infringes a third party's validly issued patent
or copyright, SILICON shall have the right to require ACSi to either procure for
SILICON the right to continue using such materials or to replace or modify same
so that it is non-infringing. In the event a third party asserts a claim against
SILICON, alleging that the Intellectual Property infringes a third party's
rights in a patent or copyright in the United States or any other intellectual
property rights, ACSi shall, subject to the provisions of this Section 13,
defend and indemnify SILICON and hold it harmless from any costs, damages,
liabilities, claims, counterclaims, fees (including attorneys' fees) and
expenses arising from such claim of infringement.
14. INDEMNIFICATION. In addition to the indemnification of third party
Intellectual Property claims which are addressed in Section 13, each Party shall
defend, indemnify and hold harmless the other party, its officers, directors,
partners, employees, agents or other representatives from any claims,
liabilities, losses, damages, costs, expenses (including, without limitation,
attorney's fees), arising out of or resulting from any act or omission of the
other party in connection with this JVA.
15. ASSIGNMENT. Neither Party may assign or transfer their respective
rights or obligations under this Agreement without prior written consent from
the other Party. Except that if the assignment or transfer is pursuant to a sale
of all or substantially all of a Party's assets or is pursuant to a sale of a
Party's business, then no consent shall be required. In the event that an
assignment or transfer is made pursuant to either a sale of all or substantially
all of the Party's assets or pursuant to a sale of the business, then written
notice must be given of such transfer within 10 days of such assignment or
transfer. No consent is required in the event a Party changes its name.
16. SUBCONTRACTORS. Neither Party shall subcontract any or all of the
services to be performed pursuant to this JVA unless agreed to in writing by the
other party after review and approval of all subcontractor agreements which
shall include provide confidentiality provisions no less stringent than provided
herein.
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17. AMENDMENT. No amendment or modification of this JVA shall be valid
unless agreed to in writing by both parties.
18. GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed in all respects by, the laws of the State of Illinois, without
regard to conflicts of law principles.
19. SEVERABILITY. If any part or parts of this Agreement shall be held
unenforceable for any reason, the remainder of this Agreement shall continue in
full force and effect. If any provision of this Agreement is deemed invalid or
unenforceable by any court of competent jurisdiction, and if limiting such
provision would make the provision valid, then such provision shall be deemed to
be construed as so limited.
20. NOTICE. Any notice required or otherwise given pursuant to this JVA
shall be in writing and mailed certified return receipt requested, postage
prepaid, delivered by overnight courier, or by facsimile, addressed as follows:
If to SILICON: ▇▇▇▇▇▇▇ ▇▇▇, Inc., on behalf of its
wholly owned subsidiary, Silicon Film Technologies, Inc.:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to ACSi:
Applied Color Science, Inc.:
▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Joint Venture:
To both parties as indicated above
21. HEADINGS. The headings for sections herein are for convenience only and
shall not affect the meaning of the provisions of this JVA.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties, and supersedes any prior understanding or representation of
any kind preceding the effective date of this JVA. There are no other promises,
conditions, understandings or other agreements, whether oral or written,
relating to the subject matter of this JVA except the Memorandum of
Understanding executed on August 11, 2006 which is superceded by this JVA.
23. WAIVERS. Waiver by any Party of any breach or failure to comply with
any provision of this JVA by another Party shall not be construed as, or
constitute, a continuing waiver of such provision or a waiver of any other
breach of or failure to comply with any other provision of this JVA.
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24. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall constitute an original and all of which, when taken
together, shall constitute one agreement.
25. EFFECTIVE DATE. This JVA shall be effective as of the date of the last
signature below.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date of the last signature below.
▇▇▇▇▇▇▇ ▇▇▇, ON BEHALF OF ITS APPLIED COLOR SCIENCE, INC.
WHOLLY OWNED SUBSIDIARY, SILICON
FILM TECHNOLOGIES, INC.
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Signature Signature
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Print Name Print Name
President President
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Title Title
September 22, 2006 September 22, 2006
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Date Date
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