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EXHIBIT 10.12
AGREEMENT DRAFT
FOR
ASIC DESIGN AND DEVELOPMENT
BY AND BETWEEN
IMMERSION CORPORATION
AND
KAWASAKI LSI U.S.A., INC.
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AGREEMENT FOR ASIC DESIGN AND DEVELOPMENT
This Agreement for ASIC Design and Development ("Agreement") is entered into and
is effective as of this 16th day of October 1997 (the "Effective Date") by and
between Immersion Corporation, a California corporation having its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter
referred to as "Immersion") and Kawasaki LSI U.S.A., Inc., a California
corporation having its principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter referred to as "KLSI").
RECITALS
Immersion wishes to have KLSI design and develop for Immersion and KLSI desires
to design and develop for Immersion an integrated circuit device as specified
more fully herein.
AGREEMENT
1. DEFINITIONS
1.1 "A/D Converter" shall mean the A/D converter described in Exhibit A
("Specifications").
1.2 "[****] Modifications" shall mean modifications made by [****] in the
course of performance under the AXIS Chip Agreement to the [****] and
the [****] and the related Intellectual Property Rights.
1.3 "[****] Preexisting Technology" shall mean [****] technology and the
related Intellectual Property Rights in existence prior to the Effective
Date and used in the AXIS Chip, consisting of the [****], the [****],
the [****], the [****], the [****], the [****], the [****], and the
[****].
1.4 "AXIS Chip" shall mean an integrated circuit device which is designed to
provide an optimized version of the force-feedback functions delivered
by the Immersion force feedback firmware.
1.5 "AXIS-derived Chip" shall mean an integrated circuit device which
consists of the [****] and which (i) does not contain the same [****],
(ii) does not contain any portion of the [****], (iii) does not
incorporate firmware that provides [****], to the best of KLSI's
knowledge, as determined by KLSI by making a reasonable inquiry, and
(iv) does have the [****] through a means disclosed and described to
Immersion in writing and approved by Immersion in writing.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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1.6 "AXIS Chip Agreement" shall mean the written agreement between KLSI and
[****] regarding the development of the AXIS Chip and the ownership and
licensing of certain technology and the related Intellectual Property
Rights used in the AXIS Chip.
1.7 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.8 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.9 "Confidential Information" shall mean: (i) the Specifications, the
Product, the PLSSOP, the Prototype Units, the [****], the [****], the
Immersion Requested Revisions ("IRR") and any trade secrets related to
any of the foregoing, including but not limited to any information
relating to either party's product plans, costs, prices and names,
finances, marketing plans, business opportunities, personnel, research,
development or know-how; (ii) any information designated by the
disclosing party as confidential in writing or, if disclosed orally,
reduced to writing within thirty (30) days, provided, however, that
"Confidential Information" shall not include information that (i) is or
becomes generally known or available by publication, commercial use or
otherwise through no fault of the receiving party; (ii) is known and has
been reduced to tangible form by the receiving party at the time of
disclosure and is not subject to restriction; (iii) is independently
developed by the receiving party by individuals who do not have access
to the same information from the disclosing party; (iv) is lawfully
obtained from a third party who has the right to make such disclosure;
or (v) is released for publication by the disclosing party in writing.
1.10 "Deliverables" shall mean the PLSSOP, the testable Prototype Units, the
First Articles and Documentation.
1.11 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.12 "Development and Payment Schedule" shall mean the time for the parties'
performance under this Agreement, as set forth in Exhibit B
("Development and Payment Schedule").
1.13 "Documentation" shall mean the Specification, the VHDL File for the AXIS
Chip, and other documentation that would reasonably accompany the
Deliverables.
1.14 "Errors" shall mean: (i) in the case of acceptance under the terms of
Section 4.2 ("Acceptance"), defects in the Prototype Units which cause
such Prototype Units not to operate in conformance with the requirements
of this Agreement, and, in the case of warranty under the terms of
Section 7.1 ("Warranties"), defects in the Deliverables which cause such
Deliverables not to operate in conformance with Exhibit A
("Specifications"); (ii) defects in the Products which cause such
Products not to operate in conformance with Exhibit A
("Specifications"); and (iii) defects in the Documentation which render
it inaccurate, erroneous or otherwise unreliable.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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1.15 "Final Mask ROM" shall mean the final mask ROM described in Exhibit A
("Specifications").
1.16 "First Articles" shall mean a limited number of units of the Product, as
mutually agreed upon by the parties, which are manufactured as a test
run for review and acceptance by Immersion prior to full production of
the Product.
1.17 "Force Feedback Functionality" shall mean the basic functions required
by a local processor for use in a force feedback product. These
functions include [****]
1.18 [****] shall mean the Immersion [****] designed to implement the Force
Feedback Functionality.
1.19 "Immersion Preexisting Technology" shall mean the Immersion technology
and related Intellectual Property Rights in existence prior to the
Effective Date and used in the AXIS Chip, consisting of the [****] and
the [****].
1.20 "Immersion Requested Revisions" shall mean the technology modifications
and related Intellectual Property Rights created by KLSI in the course
of the performance under this Agreement and/or the technology
modifications and related Intellectual Property Rights created by [****]
in the course of performance under the AXIS Chip Agreement, consisting
of (i) modifications to the [****] and the [****] and (ii)
modifications, which are specifically implemented to facilitate and
support the implementation of the Force Feedback Functionality which are
made to the [****], the [****], the [****], the [****], the [****], the
[****], the [****], the [****], the [****], the [****] and the [****].
1.21 "Intellectual Property Rights" shall mean all worldwide patents and
other patent rights (such as continuations, continuations in part and
reissues), utility models, copyrights and mask work rights, including
without limitation, all applications and registrations with respect
thereto and rights in trade secrets and know-how.
1.22 "Invention" shall mean any Invention or discovery which is or may be
patentable or otherwise protectable under Title 35 of the United States
Code.
1.23 "Inventions" shall mean all ideas, creations, works, processes, designs
and methods (whether or not patentable, copyrightable or registrable as
a mask work) incorporated in the design or function of the Prototype
Unit, and all documentation associated therewith, which are created or
discovered as part of the Services; provided, however, that
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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Inventions shall not include any discoveries, improvements or ideas made
solely by KLSI regarding methods of designing, structuring or producing
products generally.
1.24 "KLSI Modifications" shall mean modifications made by KLSI in the course
of performance under this Agreement to the [****] and the [****] and the
related Intellectual Property Rights.
1.25 "KLSI Preexisting Technology" shall mean KLSI technology and the related
Intellectual Property Rights in existence prior to the Effective Date
and used in the AXIS Chip, consisting of the [****], the [****] and the
[****].
1.26 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.27 "Non-Immersion Technology" shall mean the [****] Preexisting Technology,
the [****] Modifications, the [****] Preexisting Technology and the
[****] Modifications.
1.28 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.29 "Product" shall mean the Axis Chip as more fully described in the
Specifications.
1.30 "Post Layout Simulation Sign Off Package" or "PLSSOP" shall mean the
computer generated simulation of the Prototype Unit that is a model of
the Prototype Unit and that is used to review the features and
functionality which will be present in the Prototype Unit.
1.31 "Prototype Units" shall mean initial working testable units of the
Products that conform to the PLSSOP and the Specifications.
1.32 "Purchase Agreement" shall mean the agreement to be entered into by
Immersion and KLSI under which KLSI will produce AXIS Chips and
Immersion will purchase the AXIS Chips.
1.33 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.34 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.35 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.36 "Second Source" shall mean an alternative foundry for the AXIS Chip
licensed by Immersion to produce the AXIS Chip for Immersion.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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1.37 "Services" shall mean the design and development of the Prototype Units
and the fabrication and assembly of the Prototype Units.
1.38 [****] shall mean the Immersion [****].
1.39 "Specifications" shall mean the initial technical and design
specifications for the Product set forth in Exhibit A
("Specifications").
1.40 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.41 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.42 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.43 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.44 [****] shall mean the [****] described in Exhibit A ("Specifications").
1.45 [****] shall mean the [****] described in Exhibit A ("Specifications").
2. SCOPE OF WORK
2.1 Services. Based on the terms and conditions set forth in this Agreement,
KLSI agrees to perform the Services in accordance with the Development
and Payment Schedule. Except for the design and development functions of
system definition, logic design and breadboard definition and
construction (which will be provided by Immersion), KLSI will be
responsible for obtaining all the technology, labor, material, tooling
and facilities necessary for such design and development of the
Prototype Unit.
2.2 Progress Reports. KLSI will provide Immersion with written progress
reports, as requested by Immersion, starting one week after the
Effective Date and ending on the date of Immersion's final acceptance of
the Prototype Unit and receipt of all Deliverables. Each report shall
indicate progress as follows:
(a) Status of progress toward the next scheduled milestone;
(b) Short description of problems in meeting such milestone, if any;
(c) Proposed recover method to meet the next milestone, if necessary;
(d) Probability of meeting the next milestone;
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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(e) Any changes in KLSI's estimate of recurring manufacturing costs for
the Prototype Unit or First Articles.
3. DESIGN REVIEW AND SPECIFICATION CHANGES
3.1 Design Review. Immersion is entitled to conduct periodic design reviews
to ensure its satisfaction with the Services. Upon reasonable notice,
KLSI shall allow Immersion during normal business hours, to visit its
places of business for development and manufacturing to discuss and
inspect the status of the development of the Product.
3.2 Changes to the Specification. Immersion is entitled to request
modifications in the form of changes or additions to the Specifications
at anytime time during the term of this Agreement. Such requests shall
be submitted by Immersion to KLSI in writing. If any such modification
of the Specifications materially increases or decreases the cost or time
of performance of the Services, the parties will negotiate an equitable
adjustment to this Agreement. Upon receipt of Immersion's written
approval, KLSI will proceed with the implementation of the prescribed
changes and the Specifications and other exhibits to the Agreement shall
be modified in writing accordingly to reflect such agreed upon changes
and signed by both parties.
4. DELIVERABLES: DELIVERY; ACCEPTANCE; AND REJECTION
4.1 Deliverables KLSI agrees to deliver the Deliverables in accordance with
the Development and Payment Schedule. Deliverables shall be delivered to
the Immersion Project Manager accompanied by a written statement listing
the items delivered and stating that they are ready for Immersion's
acceptance testing. All Deliverables shall be sent to Immersion F.O.B.
Immersion's facility at the address stated above. KLSI's liability for
loss shall cease upon delivery to the F.O.B. point and title to the
Deliverables shall shift to Immersion without any effect on the
intellectual property rights in such Deliverables.
4.2 Acceptance
(a) Immersion, with the assistance of KLSI if requested by Immersion,
shall examine and test the PLSSOP and the Prototype Unit and examine
each other Deliverable upon delivery to determine whether the PLSSOP
and the Prototype Unit and each other Deliverable conforms to the
Specification and that the Prototype Unit conforms to the PLSSOP.
(b) Within the acceptance period for each Deliverable specified in
Exhibit B ("Development and Payment Schedule"), Immersion shall
provide KLSI with written acceptance of such Deliverable or a
written statement of Errors (the "Statement of Errors") to be
corrected prior to Immersion's payment of the amount due upon
Immersion's acceptance of such Deliverables, if any. Immersion will
examine the Deliverables received against the list in Exhibit C
("Deliverables") to confirm that all such Deliverables have, in
fact, been delivered
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and will notify KLSI if any items are missing. KLSI will promptly
deliver any Deliverables that are missing upon notification by
Immersion.
(c) KLSI will correct the Errors in any Deliverable set forth in the
Statement of Errors and redeliver the Deliverable to Immersion. The
parties will negotiate a reasonable time period for each Error
correction depending on the nature of the Errors. The following will
serve as reasonable guidelines for Error correction:
(i) seven (7) calendar days unless reprocessing of prototypes,
remasking or redesign is required,
(ii) twenty-one (21) calendar days if reprocessing of prototypes is
required,
(iii) twenty-five (25) calendar days if remasking is required, and
(iv) thirty-five (35) calendar days if redesign (new tape) is
required.
(d) Immersion will, within thirty (30) calendar days after any such
redelivery, provide KLSI with written acceptance or another
Statement of Errors. The procedure set forth in this Section 4.2
will be repeated until Immersion accepts the Deliverables or
terminates this Agreement pursuant to Section 4.3 ("Rejection").
4.3 Rejection. Should any Prototype Unit fail to conform to the PLSSOP
and/or the Specification either (i) after the second redelivery of such
Prototype Unit pursuant to Section 4.2(b) or (ii) after any delivery or
redelivery which is late, then KLSI will be deemed to be in material
breach of this Agreement and Immersion may terminate the Agreement
pursuant to Section 10.1 ("Termination for Cause by Either Party").
5. INTELLECTUAL PROPERTY RIGHT
5.1 Disclosure. KLSI will promptly and fully disclose and describe to
Immersion in writing any Inventions which are conceived or reduced to
practice during the term of this Agreement and within the scope of the
development of the Immersion Requested Revisions.
5.2 Ownership.
(a) Ownership by Immersion. The parties agree that Immersion owns and
will solely own all Immersion Preexisting Technology and Immersion
Requested Revisions. Nothing in this Agreement is intended to affect
or restrict Immersion's rights in the Immersion Preexisting
Technology or Immersion Requested Revisions. KLSI hereby assigns to
Immersion all right, title and interest in the Immersion Requested
Revisions. KLSI represents and warrants and agrees to insure that
under the terms of the AXIS Chip Agreement, all Immersion Requested
Revisions created by [****] will be assigned to Immersion, through
KLSI. KLSI agrees that in no case will Immersion be required to
assign any Immersion Preexisting
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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Technology to KLSI or [****] and KLSI agrees that KLSI's and
[****]'s use of the Immersion Requested Revisions shall be limited
to the licenses granted herein.
(b) Ownership by KLSI. KLSI owns and will own all KLSI Preexisting
Technology. Nothing in this Agreement is intended to affect or
restrict KLSI's rights in the KLSI Preexisting Technology. Immersion
agrees that in no case will KLSI be required to assign any KLSI
Preexisting Technology to Immersion and that assignment of the
Immersion Requested Revisions will not in any way grant Immersion
rights in the KLSI Preexisting Technology except as licensed to
Immersion under the terms of this Agreement.
(c) Cooperation. KLSI agrees to assist Immersion, and will make
appropriate contractual arrangements with [****] for [****] to
assist Immersion, in any reasonable manner to maintain and enforce
Immersion's Intellectual Property Rights in the Immersion Requested
Revisions for Immersion's benefit in any and all countries, and KLSI
agrees to execute, and to make appropriate contractual arrangements
with [****] for [****] to execute, when requested by Immersion,
applications for and assignments to Immersion and any other
documents necessary to effectuate the ownership provisions
applicable to the Intellectual Property Rights in the Immersion
Requested Revisions. KLSI represents and agrees and will make
appropriate contractual arrangements with [****] for [****] to
represent and agree, that all persons who perform work on the
Immersion Requested Revisions will have signed written agreements
which vest all Intellectual Property Rights in KLSI, or [****], as
applicable, for assignment to Immersion.
5.3 Licenses.
(a) License by KLSI to Immersion. KLSI hereby grants Immersion a
worldwide nonexclusive license, under KLSI's and [****] Intellectual
Property Rights in the Non-Immersion Technology (i) to have KLSI
manufacture the AXIS Chip and to have a Second Source manufacture
the AXIS Chip if KLSI cannot accommodate Immersion and Immersion's
designated parties' requests in terms of volume production of the
AXIS Chip due to lack of wafer capacity or allotment of wafer
fabrication capacity, and (ii) to distribute and sell the AXIS Chip
through Immersion's channels of distribution.
(b) License by Immersion to KLSI. Immersion hereby grants KLSI a
worldwide nonexclusive license, without a right to sublicense, under
Immersion's Intellectual Property Rights in the [****], the
Immersion Requested Revisions and the [****] (i) to use and modify
the [****], the Immersion Requested Revisions and the [****] in
developing, prototyping and manufacturing the AXIS Chip and (ii) to
distribute and sell the AXIS Chip to Immersion and Immersion
designated parties, as provided in the Purchase Agreement. In
addition, Immersion hereby
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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grants KLSI a license under Immersion's Intellectual Property Rights
in the [****] and the Immersion Requested Revisions (i) to use and
modify the Immersion Requested Revisions and to include the [****]
(but to disable such [****]) in developing, prototyping and
manufacturing the AXIS-derived Chip and (ii) to distribute and sell
the AXIS-derived Chip.
(c) Prohibitions. KLSI expressly agrees that it will not, during the
term of this Agreement or thereafter, without Immersion's prior
written consent:
(i) knowingly design, simulate, sell or otherwise distribute a
prototype device identical to the Prototype Unit, either
for KLSI's account or for any third party, or assist any
third party in so doing; or
(ii) unless for Immersion, knowingly develop, utilizing any
Confidential Information regarding the Prototype Unit
obtained by KLSI from Immersion, a prototype for a
semiconductor device that is pin-compatible with the
Prototype Unit, or assist any third party in so doing.
6. PAYMENTS
Immersion shall make payments to KLSI in accordance with the Development and
Payment Schedule, subject to completion of the applicable milestones and
acceptance of the applicable Deliverables by Immersion. Such payments shall be
due net [****] from Immersion's receipt of KLSI invoices.
7. WARRANTIES AND INDEMNIFICATION
7.1 Warranties. KLSI warranties that: (i) all Deliverables delivered to
Immersion hereunder will conform to the Specifications for a period of
[****] days after acceptance by Immersion; (ii) in connection with KLSI
performance of the Services, KLSI will not knowingly infringe any
patent, copyright, trade secret, mask work right, or any other
proprietary right of any third party; (iii) KLSI has not previously
granted and will not grant any rights in the Product or any Inventions
to any third party which grant is inconsistent with the rights granted
to Immersion herein; and (iv) all Products delivered to Immersion
hereunder will conform to the Specifications for a period of [****]
after acceptance by Immersion. In the event that the Products delivered
to Immersion do not conform to the Specifications, KLSI will repair or
replace the nonconforming Products.
7.2 Infringement Indemnity.
(a) KLSI shall, at its expense and at Immersion's request, defend any
claim or action brought against Immersion, and Immersion's
subsidiaries, affiliates, directors, officers, employees, agents and
independent contractors, to the extent it is based on a claim that
the Product provided under this Agreement infringes or violates
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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any patent, copyright, trademark, trade secret or other proprietary
right of a third party, and shall indemnify and hold harmless from
and against any costs, damages and fees reasonably incurred by
Immersion including but not limited to fees of attorneys and other
professionals that are attributable to such claim; provided,
however, that: (i) Immersion gives KLSI reasonably prompt notice in
writing of any such suit and permits KLSI through counsel of its
choice, to answer the charge of infringement and defend such claim
or suit; (ii) Immersion provides KLSI with information, assistance
and authority, at KLSI's expense, to enable KLSI to defend such
suit; and (iii) KLSI shall not be responsible for any settlement
made by Immersion without KLSI's written permission. In the event
Immersion agrees to settle the suit, Immersion agrees not to
publicize the settlement nor to permit the party claiming
infringement to publicize the settlement without first obtaining
KLSI's written permission.
(b) KLSI shall have no liability under this Section 7.2 ("Infringement
Indemnity") to the extent that such claim or suit could have been
avoided but for (i) the combination, operation, or use of the
Product with equipment, logic, software or products not supplied by
KLSI, (ii) any alteration or modification made to the Products after
delivery by KLSI to Immersion or (iii) the use by KLSI of
specifications or requirements provided by Immersion.
7.3 Duty to Correct. Notwithstanding Section 7.2(a), should the Product
become the subject of a claim of infringement of a third party's
proprietary right, KLSI shall, at KLSI's expense: (i) procure for
Immersion the past right to make, use and sell and the future right to
continue to make, use and sell the Product; (ii) replace or modify the
Product to make such non-infringing, provided that the same function is
performed by the replacement or modified Product to Immersion
satisfaction; or (iii) if the past and future rights to continue to
make, use and sell cannot be procured or the Product cannot be replaced
or modified at reasonable expense, reimburse Immersion for the total
amount paid under this Agreement.
7.4 General Indemnity. KLSI shall, at KLSI's expense, indemnify, hold
Immersion harmless and, at Immersion's request, defend Immersion and
Immersion's subsidiaries, affiliates, directors, officers, employees,
agents and independent contractors, from and against any and all loss,
cost, liability or expense (including costs and reasonable fees of
attorneys and other professionals) arising out of or in connection with
KLSI performance under this Agreement to the extent caused by, in whole
or in part, any negligent act or omission or willful misconduct of KLSI
or KLSI employees, agent or independent contractors, including but not
limited to any act or omission that contributes to: (i) any personal
injury, sickness, disease or death; (ii) any damage to or destruction of
property of Immersion or any loss of use resulting therefrom; (iii) any
violation of any statute, ordinance or regulation.
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8. CONFIDENTIALITY AND PROPRIETARY NOTICE
8.1 Each party acknowledges that by reason of its relationship to the other
hereunder, it will access to other party's Confidential Information.
Each party agrees that it shall not use in any way for its account or
the account of any third party, nor disclose to any third party any
Confidential Information revealed to it by the other party. Neither
party shall use the Confidential Information of the other party for
purposes other than those necessary to directly further the purposes of
this Agreement. Each party shall take every necessary precaution to
protect the confidentiality of all Confidential Information.
8.2 Any breach of the restrictions contained in this Section 8 is a breach
of this Agreement which will cause irreparable harm to the other party
entitling the other party to injunctive relief in addition to all legal
remedies.
8.3 KLSI will cause the outside package and top level metal mask work layer
of the Product to bear a mask work and copyright notice for Immersion's
benefit.
9. TERM
This Agreement will commence on the Effective Date and will continue until
terminated as provided in this Agreement.
10. TERMINATION
10.1 Termination for Cause By Either Party. Either party shall have the right
to terminate this Agreement immediately upon written notice at any time
if:
(a) the other party is in material breach of any warranty, term,
condition or covenant of this Agreement other than those contained
in Section 8 and fails to cure that breach within sixty (60) days
after written notice of that breach;
(b) the other party is in material breach of any warranty, term,
condition or covenant of Section 8; or
(c) the other party: (i) becomes insolvent; (ii) falls to pay its debts
or perform its obligations in the ordinary course of business as
they mature; (iii) admits in writing its insolvency or inability to
pay its debts or perform its obligations as they mature or (iv)
makes any assignment for the benefit of creditors.
10.2 Effect of Termination. Upon termination of this Agreement, each party
shall be released from all obligations and liabilities to the other
occurring or arising after the date of such termination, except that any
termination of this Agreement will not relieve obligations under
Sections 5, 7, 8 and 12 hereof, nor will any such termination relieve
Immersion or KLSI from any liability arising from any breach of this
Agreement. Neither party will be liable to the other for damages of any
sort solely as a result of terminating this Agreement in accordance with
its terms. Termination of this Agreement will be without prejudice to
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any other right or remedy of either party. Upon any termination of this
Agreement, KLSI will immediately deliver to Immersion all work in
process on the Deliverables, in whole or in part and will confirm in
writing the assignment of all related Intellectual Property Rights.
10.3 Payment by Immersion. Upon any termination of this Agreement pursuant to
the provisions of Section 10.1 above, Immersion's monetary obligation to
KLSI will be to pay for all milestones completed and accepted by
Immersion as set forth in the Development and Payment Schedule, and to
pay KLSI pro rata (based on the ratio (equal to 1:1)) of the number of
calendar days elapsed since completion of the last payment milestone and
the number of days between such milestone and the next subsequent
milestone in the Development and Payment Schedule) for work done by KLSI
towards the next subsequent milestone, including any costs, previously
approved by Immersion in writing, that are reasonably incurred for
materials related to any subsequent milestones. In no event, however,
shall Immersion's liability exceed the amounts set forth in the
Development and Payment Schedule.
11. DISCLAIMER OF CONSEQUENTIAL DAMAGES
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR BREACH OF OR FAILURE TO PERFORM UNDER
THIS AGREEMENT, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
12. GENERAL
12.1 Force Majeure. Neither party shall be liable for any failure or delay in
its performance under this Agreement due to causes, including, but not
limited to, acts of God, acts of civil or military authority, fires,
epidemics, floods, earthquakes, riots, wars, sabotage, labor shortages
or disputes, and governmental actions, which are beyond its reasonable
control; provided that the delayed party: (i) gives the other party
written notice of such cause promptly, and in any event within fifteen
(15) days of discovery thereof, and (ii) uses its reasonable efforts to
correct such failure or delay in its performance. The delayed party time
for performance or cure under this Section 12.1 shall be extended for a
period equal to the duration of the cause or sixty (60) days, whichever
is less. Notwithstanding the above provisions in this Section 12.1, the
obligations to make payments under this Agreement which are due and
owing shall not be deferred, excused or otherwise affected by Force
Majeure or any other reasons whether or not foreseen or foreseeable so
long as the services, Deliverables or Products for which the payment is
due are received.
12.2 Relationship of Parties. KLSI is an independent contractor. Neither each
party nor its employees, consultants, contractors or agents are agents,
employees or joint ventures of other party nor do they have any
authority to bind the other party by contract or otherwise to any
obligation. They will not represent to the contrary, either expressly,
implicitly, by appearance or otherwise.
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12.3 Personnel. KLSI employees, consultants, contractors and agents who work
on Immersion premises will be required to observe Immersion regulations
applying to non-Immersion personnel working on Immersion premises.
12.4 Employment Taxes and Benefits It will be KLSI's obligation to report as
income all compensation received by KLSI pursuant to this Agreement and
pay all taxes due on such compensation.
12.5 Other Tax Implications. The purpose of development of the Deliverables
under this Agreement is to demonstrate that the Product developed
hereunder will conform to the Specifications. The Deliverables have no
intrinsic value as an item. As such, no value added, sales, or use taxes
have been assessed or are anticipated to be required as a result of the
Services performed under this Agreement. To the extent any such taxes
are ultimately assessed to Immersion as a retailer, Immersion shall have
responsibility to discharge the claim.
12.6 Assignment. The rights and liabilities of the parties hereto will bind
and inure to the benefit of their respective successors, executors and
administrators, as the case may be. Each party may not assign or
delegate its rights or obligations under this Agreement either in whole
or in part, without the prior written consent of the other party except
that Immersion may assign this Agreement in the case of a merger,
acquisition or sale of assets. Any attempted assignment in violation of
the provisions of this Section 12.6 will be void. Immersion agrees that
KLSI may use [****] as a subcontractor to perform the Services.
12.7 Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of' the United States and the State of
California as applied to agreements entered into and to be performed
entirely within California between California residents.
12.8 Jurisdiction and Venue. The parties hereby submit to the jurisdiction
of, and waive any venue objections against, the United States District
Court for the Northern District of California, the Superior Court of the
State of California for the County of Santa ▇▇▇▇▇, the Santa ▇▇▇▇▇
Municipal Court, and any mutually agreed to alternative dispute
resolution proceeding taking place in Santa ▇▇▇▇▇ County, California, in
any litigation arising out of this Agreement.
12.9 Severability. If for any reason a court of competent jurisdiction rinds
any provision of this Agreement, or portion thereof, to be
unenforceable, that provision of this Agreement shall be enforced to the
maximum extent permissible so as to effect the intent of the parties,
and the remainder of this Agreement shall continue in full force and
effect.
12.10 Notices. All notices required or permitted under this Agreement shall be
in writing, and be deemed given when: (i) delivered personally; (ii)
when sent by confirmed telex or facsimile; (iii) five (5) days after
having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) one (1) day after deposit with a
commercial overnight carrier, with written verification of receipt. All
communications will be sent to
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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the addresses first above written. Either party may change its address
by giving notice pursuant to this Section 12.10.
12.11 No Waiver. Failure by either party to enforce any provision of this
Agreement shall not be deemed a waiver of future enforcement of that or
any other provision.
12.12 No Rights in Third Parties Rights. This Agreement is made for the
benefit of Immersion and KLSI and their respective subsidiaries and
affiliates, if any, and not for the benefit of any third parties.
12.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
12.14 Headings and References. The headings and captions used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
12.15 Construction. This Agreement has been negotiated by the parties and
their respective counsel. This Agreement will be fairly interpreted in
accordance with its terms and without any strict construction in favor
of or against either party.
12.16 Complete Agreement. This Agreement, including all Exhibits, constitutes
the entire agreement between the parties with respect to the subject
matter hereof, and supersedes and replaces all prior or contemporaneous
understandings or agreements, written or oral, regarding such subject
matter hereof. In the case of any conflict between the terms of this
Agreement and any of the Exhibits, the terms of the Agreement shall
govern and control. No amendment to or modification of this Agreement
shall be binding unless in writing and signed by a duly authorized
representative of both parties. To the extent any terms and conditions
of this Agreement conflict with the terms and conditions of any invoice,
purchase order or purchase order acknowledgment placed hereunder, the
terms and conditions of this Agreement shall govern and control.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
KAWASAKI LSI U.S.A. INC. IMMERSION CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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(Signature) (Signature)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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(Print Name) (Print Name)
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President President
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(Title) (Title)
10/15/97 10/16/97
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(Date) (Date)
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