Development, Support and Indemnification Agreement - International Technology Concepts Inc. and Identix Inc.
Identix Proprietary and Confidential
Identix Incorporated
--------------------
DEVELOPMENT, SUPPORT AND INDEMNIFICATION AGREEMENT
--------------------------------------------------
This Development, Support and Indemnification Agreement (this "Agreement")
is entered into as of July 1, 2000 by and between International Technology
Concepts, Inc., a California corporation ("IT Concepts") and Identix
Incorporated, a Delaware corporation ("Identix").
WHEREAS, IT Concepts, Identix and Identicator Technology, Inc., a wholly-
owned subsidiary of Identix ("Identicator Technology") are parties to a
Development, Support and Indemnification Agreement dated as of June 30, 1999
(the "First Agreement") pursuant to which IT Concepts agreed to provide certain
research, development and support services to Identix and Identicator Technology
at prices and other consideration set forth in the First Agreement;
WHEREAS, the research, development and support services provided by IT
Concepts under the First Agreement are primarily directed at developing hardware
and software solutions for the IT security market;
WHEREAS, IT Concepts and Identix now desire to enter into a separate
agreement pursuant to which IT Concepts will provide Identix with research,
development and support services primarily directed at developing hardware and
software solutions for the Identix Imaging Division;
NOW THEREFORE, in consideration of the collective promises and covenants
set forth herein, IT Concepts and Identix agree as follows:
1. Definitions: As used in this Agreement:
------------
(a) "Biometric Business" means the business of designing, developing,
manufacturing and marketing biometric technologies for the electronic capture or
comparison of fingerprints, facial and other unique physical characteristics for
identification, verification or security purposes.
(b) "Confidential Information" means information disclosed to IT
Concepts or its employees or consultants as a consequence of or through
performance of services for Identix, or their affiliates, whether or not related
to IT Concept's specific work under this Agreement. Confidential Information
includes, but is not limited to, all information related to any aspect of the
business, technology or affairs of Identix which is either information not known
by actual or potential competitors of Identix or is proprietary information of
Identix whether of a technical nature or otherwise. Confidential Information
includes ideas, designs, circuits, schematics, formulas, algorithms, trade
secrets, works of authorship, mask works, developmental or experimental work,
processes, techniques, Inventions, know-how, data, financial information and
forecasts, product plans, marketing plans and strategies, and customer lists.
Information shall be considered, for purposes of this Agreement, to be
Confidential Information if not know by the
<PAGE>
Identix Proprietary and Confidential
trade generally, even though such information has been disclosed to one or more
third parties pursuant to distribution agreements, joint research agreements or
other agreements entered into by Identix or any of their affiliates. For the
purposes of this Agreement, information shall not be considered confidential to
the extent that such information is or becomes, through no fault of IT Concepts,
part of the public domain, or such information is lawfully furnished to IT
Concepts by a third party without restriction or disclosure.
(c) "Inventions" means any and all inventions, improvements,
modifications, concepts, ideas, designs, circuits, schematics, formulas,
algorithms, trade secrets, works of authorship, mask works, developmental or
experimental work, processes, and techniques arising out of or related to the
services provided by IT Concepts or its employees or consultants pursuant to in
furtherance of this Agreement.
(d) "Party" or "Parties" means each of IT Concepts, or Identix, or
both of them together.
(e) "Person" means any individual, corporation partnership, business
trust, joint venture, association, joint sock company, trust, unincorporated
organization, or government or agency or political subdivision thereof.
(f) "Term" means the term of this Agreement, as defined in Section 9
below.
2. Services/Compensation.
----------------------
(a) Services. IT Concepts shall perform for Identix the services,
--------
and afford Identix access to its facilities, as described in Schedule 1.
(b) Compensation. Identix agrees to pay IT Concepts fees, prices and
------------
other consideration as set forth in Schedule 1. IT Concepts shall be entitled to
no other compensation from Identix for the performance of services hereunder.
(c) Management of Relationship. In responding to and performing the
---------------------------
requirements and instructions of Identix hereunder, and accordingly, in managing
its resources, development activities and timetables hereunder, IT Concepts
shall be entitled to rely on (1) overall strategic and business directions from
James P. Scullion, President and COO of Identix, or his designee, and (2)
overall technical, engineering and product directions from Daniel F. Maase, Vice
President of Identix's Imaging Division.
3. Representations and Warranties. IT Concepts represents and warrants
------------------------------
to Identix that:
(a) No conflicts. IT Concepts is not a party to any existing
------------
agreement that would prevent it from entering into this Agreement or restrict
its obligations or activities under this Agreement, or restrict or affect the
rights or benefits of Identix under this Agreement;
2
<PAGE>
Identix Proprietary and Confidential
(b) No misappropriation or infringement. The conduct of any business
-----------------------------------
conducted by IT Concepts does not infringe or constitute a misappropriation of
any copyright or trade secret of any other Person, or to the knowledge of IT
Concepts, any patent, trademark, or trade names of any other person, and the
solutions, designs, services and products provided by IT Concepts under this
Agreement are and will be original and will not, to the best knowledge of IT
Concepts, infringe upon or misappropriate any patent, copyright, trade secret or
other proprietary rights of others;
(c) Proprietary rights agreement. Each employee and consultant of IT
----------------------------
Concepts (including employees of Intech, a Russian subsidiary of IT Concepts,
"Intech") shall execute a proprietary rights information agreement substantially
in the form attached as Schedule 2 hereto; and
(d) Personnel. IT Concepts is in compliance with all federal and
---------
state wage, tax and withholding obligations for all current and former
employees, whether or not correctly characterized as employees by IT Concepts,
including but not limited to personnel characterized as freelancers,
consultants, independent contractors, or temporary, casual, or contract
employees.
4. Covenants. IT Concepts acknowledges and agrees that:
---------
(a) Biometric Business. During the Term, and for a period of two
------------------
years after the expiration or termination of this Agreement, IT Concepts shall
not perform research, consulting, development or manufacturing services for any
other Person in the Biometric Business. Identix understands and agrees that
during the Term, IT Concepts may be retained by other Persons which are not
engaged in the Biometric Business;
(b) Segregation of work. During the Term, IT Concepts shall
-------------------
segregate all work done under this Agreement from all work done at, or for, any
other Person. In any dealings with third parties IT Concepts shall protect and
guard any and all Confidential Information in accordance with the terms of this
Agreement;
(c) Work Product Retention and Delivery Obligations. IT Concepts
-----------------------------------------------
shall be obligated to keep, and shall cause Intech to deep, detailed, up-to-date
records satisfactory to Identix of any and all ideas for technical solutions,
and any and all designs, drawings, schematics, technical data, prototypes
inventions, or other intellectual property in progress under this Agreement. In
addition to its obligations to segregate such work product as set forth in
Section 4(b), IT Concepts shall be obligated to store such work product in a
fireproof location with limited and controlled access thereto so as to preserve
the confidentiality of such work product as set forth in this Agreement. Identix
may, upon request, conduct reviews of IT Concepts work and record retaining by
means of program or technical reviews at IT Concepts facilities or the
facilities of Intech. Beginning no later than 30 days following the date first
above written and continuing thereafter at least once every month during the
term, IT Concepts shall provide Identix with (1) a written summary of all
activities and progress respecting all development efforts by IT Concepts and
Intech under this Agreement, and (2) copies and duplicates, as the case may be,
of any and all ideas for technical solutions, and any and all designs, drawings,
schematics, technical data, prototypes, inventions, or other intellectual
3
<PAGE>
Identix Proprietary and Confidential
property of work product in progress under this Agreement, regardless of whether
such information or work product is being performed or developed in the United
States or Russia.
(d) Proprietary rights agreement. No later than August 1, 2000,
----------------------------
written (1) IT Concepts shall cause each employee and consultant of IT Concepts
(including employees of Intech, a Russian subsidiary of IT Concepts) who will
provide services to or on behalf of Identix under this Agreement to execute a
proprietary rights information agreement substantially in the form attached as
Schedule 2 hereto, and (2) IT Concepts shall deliver all such executed agreement
to Identix. IT Concepts shall not permit any employee or consultant who has
failed to execute and deliver such an agreement to have access to Confidential
Information or to work on Identix projects under this Agreement;
5. Confidentiality. IT Concepts shall hold all Confidential Information
---------------
in strict confidence and shall not disclose Confidential Information to any
unauthorized Person. Except as required under this Agreement, IT Concepts will
never directly or indirectly use, disseminate, disclose, lecture upon, or
publish articles concerning, Confidential Information. IT Concepts shall keep,
and cause its employees and consultants to keep, separate and segregated from
other work, all documents, records, notebooks and correspondence which directly
relate to services under this Agreement. All notes, contracts, memoranda,
reports, drawings, manuals, materials, files, samples, products, data, and any
papers or records of every kind (and any copy of any of the foregoing) which are
or shall come into IT Concept's possession (or into the possession of any of its
employees or consultants) at any time during the Term related to the business of
Identix shall be the sole and exclusive property of Identix, whether or not such
items are Confidential Information. This property shall be surrendered to
Identix upon termination of the Term or upon request of Identix at any time
either during or after the termination of the Term, and no copies, notes, or
excerpts thereof shall be retained.
6. Inventions.
----------
(a) Property of Identix. All Inventions made, conceived, or
-------------------
completed by IT Concepts, its employees or consultants resulting from work or
services performed by IT Concepts, its employees or consultants on behalf of
Identix hereunder or from access to Confidential Information or property,
whether or not patentable, copyrightable, or qualified for mask work protection,
shall be the sole and exclusive property of Identix. IT Concepts here by assigns
and agrees to assign to Identix or its designee, without further consideration,
all of its right, title, and interest in and to all Inventories, including all
rights to obtain, register, perfect, and enforce patents, copyrights, mask work
rights, and other intellectual property protection for Inventions.
(b) Disclosure, etc. IT Concepts shall, without royalty or any other
---------------
further consideration to IT Concepts, but at the expense of Identix: (1) as
promptly as known or possessed by IT Concepts, disclose to Identix, and provide
tangible copies to Identix, all information with respect to any Inventions; (2)
whenever requested by Identix, promptly execute and assign any and all
applications, assignments and other instruments which Identix shall deem
4
<PAGE>
Identix Proprietary and Confidential
necessary to apply for and obtain copyrights, letters patent, or mask work
rights in the United States and in foreign countries, for said Inventions, and
convey to Identix or its nominee the sole and exclusive right, title and
interest in and to said Inventions or copyrights, mask work rights, parents, or
applications for any of the foregoing; and (3) whenever requested by Identix,
provide evidence for interference purposes or other legal proceedings and
testify in any interference or other legal proceedings which relates to any
matters on which IT Concepts has provided services to Identix hereunder.
7. Indemnification. IT Concepts hereby agrees to indemnify and hold
---------------
harmless Identix from and against any and all losses, damages, liabilities,
claims, judgments, settlements, costs and expenses (including reasonable
attorneys' fees) incurred by Identix arising from or relating to (i) any claim
made by any past or current employee or consultant of IT Concepts that arises
from or relates to such person's employment with or work performed for IT
Concepts, or (ii) the breach by IT Concepts of any representations, warranties,
covenants or agreements in this Agreement.
8. Further Assurances; Access to Documents. From time to time after the
---------------------------------------
date of this Agreement, IT Concepts shall execute, and cause its employees and
consultants to execute, such documents and take such other actions requested by
Identix as may reasonably be necessary in order to complete the transactions
contemplated in this Agreement. In addition, IT Concepts acknowledges that there
may be occasions in the future when Identix may need access to certain
documentation of Identix maintained by IT Concepts (including, without
limitation, technical documentation) in order to conduct their affairs.
Accordingly, IT Concepts shall cooperate fully with Identix for the purpose of
making available appropriate personnel and documentation, at reasonable times
upon reasonable notice. Identix shall be responsible for any out-of-pocket
expense incurred by IT Concepts with respect thereto.
9. Term and Termination.
---------------------
(a) Term. This Agreement shall commence on the date first above
----
written and shall expire Sept 1, 2002, or such other date as may be agreed to in
writing by the Parties or by operation of this Agreement. This Agreement will
automatically renew every year after the date scheduled for expiration for
additional one-year terms unless a Party provides the other with notice of its
decision not to renew this Agreement no less than 30 days prior to the then
scheduled date for expiration of this Agreement. On or prior to 90 days before
any scheduled expiration date, the Parties will meet to review the budgets and
spending levels identified on the applicable Schedules hereto. The Parties shall
amend such Schedules to reflect changes in the budgets and spending levels, if
mutually agreed to by the Parties.
(b) Termination with or Without Cause. If either Party breaches any
---------------------------------
material provision of this Agreement, then the non-breaching Party may give
notice to the defaulting Party of such default and if such default is not cured
within 30 days of receipt of such notice, then the non-breaching Party shall
have the right to terminate this Agreement upon written notice to the other
Party.
5
<PAGE>
Identix Proprietary and Confidential
(c) Dissolution, etc. Either Party may terminate this Agreement upon
----------------
the dissolution or termination of existence of the other, the insolvency of the
other, and assignment for the benefit of creditors by the other, the appointment
of a trustee or receiver for any part of the other's property or the filing by
or against the other of any petition in bankruptcy or under any bankruptcy
statute which filing remains undischarged for 30 days.
(d) Survival. The provisions of Sections 4(c) (until such time as IT
--------
Concepts' obligations under Section 5 to surrender to Identix all Confidential
Information have been satisfied in full), 5, 6, 7, 8, and 10(a), (c), (d), (f)
and (i) shall survive the termination of this Agreement for any reason.
10. Miscellaneous.
-------------
(a) Specific Performance. IT Concepts acknowledges and agrees that
--------------------
the extent of damages to Identix in the event of a breach of Sections 5, 6 or 8
(will respect to access to records) would be difficult or impossible to
ascertain and that there is and will be available to Identix no adequate remedy
at law in the event of any such breach. Accordingly, IT Concepts agrees that in
the event of such breach, Identix shall be entitled to enforce such Sections by
injunctive or other equitable relief in addition to any other relief to which
they may be entitled (without the necessity of posting a bond).
(b) Notices. All notices, requests, demands, and other
-------
communications made in connection with this Agreement shall be in writing and
shall be deemed to have been duly given on the date of delivery if delivered by
hand delivery or 12 hours after facsimile transmission to the persons identified
below or five days after mailing if mailed by certified or registered mail
postage prepaid return receipt requested addressed as follows:
If to Identix:
Identix Incorporated
510 N. Pastoria Ave
Sunnyvale, California 95086
Attn: President
Facsimile: 408-739-0178
Confirmation Number: 408-731-2000
If to IT Concepts:
11501 Dublin Boulevard, Bldg 101
Dublin, CA 94566
Attn: Naum Pinkhasik, President
Facsimile: 925-556-6901
Confirmation Number: 925-558-6900
6
<PAGE>
Identix Proprietary and Confidential
Either party may change its address for notices by notice duly given pursuant to
this Section 9(b).
(c) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California applicable to contracts
entered into a wholly to be performed within the State of California by
California residents.
(d) Successor and Assigns. This Agreement shall be binding upon and
---------------------
inure to the benefit of the executors, administrators, heirs, successors and
assigns of the parties. IT Concepts shall not assign this Agreement without the
prior written consent of Identix.
(e) Counterparts. This Agreement may be signed in counterparts with
------------
the same effect as if the signatures of each party were upon a single
instruments. All counterparts shall be deemed an original of this Agreement.
(f) Severability. If any provision of this Agreement is held to be
------------
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
(g) Entire Agreement; Modifications. This Agreement represents the
-------------------------------
entire understanding between the parties with respect to the subject matter
hereof, and this Agreement supersedes any and all prior understandings,
agreements, plans and negotiations, written or oral, with respect to the subject
matter hereof. All modifications to the Agreement must be in writing and signed
by the party against whom enforcement of such modification is sought.
(h) Independent Contractor. IT Concepts shall be an independent
----------------------
contractor with respect to Identix and shall not be an employee or agent of
Identix. IT Concepts shall be entitled to no benefits or compensation except as
set forth in this Agreement and shall in no event be entitled to any fringe
benefits payable to employees of Identix.
(i) Non-waiver. The failure by any Party to insist upon or enforce
----------
strict performance by the other party of any of the terms of this Agreement or
to exercise any rights hereunder shall not be construed as a waiver or
relinquishment to any extent of its right to assert or rely upon such terms or
rights on any future occasion.
7
<PAGE>
Identix Proprietary and Confidential
IN WITNESS WHEREOF, Identix and IT Concepts have executed this Agreement as of
the date first above written.
Identix Incorporated
By /s/ D. Maase
-------------------------------
Name: Dan Maase
Title: Vice President
International Technology Concepts, Inc.
By /s/ N. Pinkhasik
-------------------------------
Name: Naum Pinkhasik
Title: President
8