Agreement for ASIC Design and Development - Immersion Corp. and Kawasaki LSI USA Inc.
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 2158 Paragon Drive, San Jose, CA 95131 (hereinafter
referred to as "Immersion") and Kawasaki LSI U.S.A., Inc., a California
corporation having its principal place of business at 2570 North First Street,
Suite 301, San Jose, CA 95131 (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 "AOX Modifications" shall mean modifications made by AOX
in the course of performance under the AXIS Chip Agreement to
the USB Microcode and the Clock Generation and General Purpose
I/O and the related Intellectual Property Rights.
1.3 "AOX Preexisting Technology" shall mean AOX technology and
the related Intellectual Property Rights in existence prior to
the Effective Date and used in the AXIS Chip, consisting of the
"QT Engine" Core Logic, the ROM BIOS, the Boot Loader Microcode,
the USB Controller, the USB Microcode, the Timer Subsection, the
Memory Controller, and the Clock Generation and General Purpose
I/O.
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 same or derivative base wafer, metal 1 and
metal 2 layers as the AXIS Chip and which (i) does not contain
the same ROM Mask Layer as the AXIS Chip, (ii) does not contain
any portion of the Force Feedback Microcode, (iii) does not
incorporate firmware that provides Force Feedback Functionality,
to the best of KLSI's knowledge, as determined by KLSI by making
a reasonable inquiry, and (iv) does have the Shaft Encoder Logic
present but disabled through a means disclosed and described to
Immersion in writing and approved by Immersion in writing.
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1.6 "AXIS Chip Agreement" shall mean the written agreement between
KLSI and AOX 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 "Boot Loader Microcode" shall mean the boot loader microcode
described in Exhibit A ("Specifications").
1.8 "Clock Generation and General Purpose I/O" shall mean the clock
generation and general purpose I/O described in Exhibit A
("Specifications").
1.9 "Confidential Information" shall mean: (i) the Specifications,
the Product, the PLSSOP, the Prototype Units, the Shaft Encoder
Logic, the Force Feedback Microcode, 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 "DMA Controller" shall mean the DMA controller 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.
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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 (a) sending and receiving
commands from a host computer, (b) generating tactile sensations
felt by a user by reading local sensors and controlling local
actuators based upon embedded mathematical relations between
sensor data and actuator output, and (c) generating said tactile
sensations in response to said commands from said host computer.
1.18 "Force Feedback Microcode" shall mean the Immersion microcode
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 Shaft Encoder Logic and the Force Feedback
Microcode.
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 AOX in the course of performance
under the AXIS Chip Agreement, consisting of (i) modifications
to the Shaft Encoder Logic and the Force Feedback Microcode and
(ii) modifications, which are specifically implemented to
facilitate and support the implementation of the Force Feedback
Functionality which are made to the "QT Engine" Core Logic, the
ROM BIOS, the Boot Loader Microcode, the USB Controller, the
UART, the Time Subsection, the DMA Controller, the Memory
Controller, the PWM Generation Logic, the Watchdog Timer Logic
and the Final Mask ROM.
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
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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 USB
Transceiver and the A/D Converter 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 USB
Transceiver, the A/D Converter and the Phase Lock Loop.
1.26 "Memory Controller" shall mean the memory controller described
in Exhibit A ("Specifications").
1.27 "Non-Immersion Technology" shall mean the AOX Preexisting
Technology, the AOX Modifications, the KLSI Preexisting
Technology and the KLSI Modifications.
1.28 "Phase Lock Loop" shall mean the phrase lock loop 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 "PWM Generation Logic" shall mean the PWM generation logic
described in Exhibit A ("Specifications").
1.34 "`QT Engine' Core Logic" shall mean the QT engine core logic
described in Exhibit A ("Specifications").
1.35 "ROM BIOS" shall mean the ROM BIOS 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.
1.37 "Services" shall mean the design and development of the
Prototype Units and the fabrication and assembly of the
Prototype Units.
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1.38 "Shaft Encoder Logic" shall mean the Immersion custom gate array
that extracts position, velocity and other relevant information
from shaft encoder signals.
1.39 "Specifications" shall mean the initial technical and design
specifications for the Product set forth in Exhibit A
("Specifications").
1.40 "Timer Subsection" shall mean the timer subsection described in
Exhibit A ("Specifications").
1.41 "UART" shall mean the UART described in Exhibit A
("Specifications").
1.42 "USB Controller" shall mean the USB controller described in
Exhibit A ("Specifications").
1.43 "USB Microcode" shall mean the USB microcode described in
Exhibit A ("Specifications").
1.44 "USB Transceiver" shall mean the USB transceiver described in
Exhibit A ("Specifications").
1.45 "Watchdog Timer Logic" shall mean the watchdog timer logic
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;
(e) Any changes in KLSI's estimate of recurring
manufacturing costs for the Prototype Unit or First
Articles.
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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 and
will notify KLSI if any items are missing. KLSI will
promptly deliver any Deliverables that are missing upon
notification by Immersion.
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(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 AOX will be assigned to
Immersion, through KLSI. KLSI agrees that in no case
will Immersion be required to assign any Immersion
Preexisting Technology to KLSI or AOX and KLSI agrees
that KLSI's and AOX's use of the Immersion Requested
Revisions shall be limited to the licenses granted
herein.
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(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 AOX
for AOX 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 AOX for AOX 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 AOX for
AOX 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 AOX, 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 AOX's 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 Shaft Encoder Logic, the Immersion
Requested Revisions and the Force Feedback Microcode (i)
to use and modify the Shaft Encoder Logic, the Immersion
Requested Revisions and the Force Feedback Microcode 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
grants KLSI a license under Immersion's Intellectual
Property Rights in the Shaft Encoder Logic and the
Immersion Requested Revisions (i) to use and modify the
Immersion Requested Revisions and to include the Shaft
Encoder Logic (but to
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disable such Shaft Encoder Logic) 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 thirty (30) days 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 ninety (90) 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 ninety (90)
days 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 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,
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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.
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
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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 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.
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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.
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
<PAGE> 14
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 AOX 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 Clara, the Santa Clara Municipal Court, and
any mutually agreed to alternative dispute resolution proceeding
taking place in Santa Clara 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 the addresses first above
written. Either party may change its address by giving notice
pursuant to this Section 12.10.
13
<PAGE> 15
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/ Masanori Kodama By: /s/ Louis Rosenberg
---------------------------- ----------------------------
(Signature) (Signature)
Masanori Kodama Louis Rosenberg
---------------------------- ----------------------------
(Print Name) (Print Name)
President President
---------------------------- ----------------------------
(Title) (Title)
10/15/97 10/16/97
---------------------------- ----------------------------
(Date) (Date)
14
<PAGE> 16
EXHIBIT A
SPECIFICATIONS
Immersion ASIC Specification dated October 16, 1997
<PAGE> 17
IMMERSION ASIC SPECIFICATION
[****]
*All information in this forty page exhibit has been omitted and filed
separately with the Commission. Confidential treatment has been requested
with respect to the omitted portions.
1-40
<PAGE> 18
EXHIBIT B
DEVELOPMENT AND PAYMENT SCHEDULE
41
<PAGE> 19
IMMERSION CORPORATION
-------------------------------------------------------------------------------
To KLSI c/o Brooks Technical Group April 24, 1997
10080 N. Wolfe Rd. SW3-100
Cupertino, CA 950114
408-257-3880 x 1307
408-252-4434 fax
PURCHASE ORDER
NO: 10499
Description of Purchased Item:
Design and development KLSI/AOX "Processor Plus" ASIC to be developed in
conjunction with Immersion personnel.
Total NRE Charges: $198,000 USD
Payment Schedule:
1) Design award/initiation - $15,000 USD
2) Technical transfer completion - $55,000 USD (action scheduled for completion
prior to 5/15/1997)
3) Design sign-off - $80,000
4) Ceramic sample delivery - $48,000 USD
This program will be run according to a Design and Development Agreement that
outlines the program in detail, itemizes each action step, who is assigned to
what action, and the completion date for each action. This plan will be
developed within 1 week of this purchase order date.
Bruce Schena
V.P./C.T.O. _________________________
Tim Lacey
V.P./C.F.O. _________________________
Thanks for your time. I look forward to hearing from you.
BRUCE SCHENA, CTO
IMMERSION
42
<PAGE> 20
EXHIBIT C
DELIVERABLES
43
<PAGE> 21
STATEMENT OF WORK
REV. 1.4
-----------------------------------------------------------------------------------------------------------------------------------
NO TASK DATE/ WHO DESCRIPTION
TIME
-------------------------------
IMMERSION AOX KLSI
-----------------------------------------------------------------------------------------------------------------------------------
1 Function 4/21/97 X X X Immersion, AOX, and KLSI agree to functional block
spec. sign-off specification and interface specification
-----------------------------------------------------------------------------------------------------------------------------------
2 Issue P.O. 4/21/97 X Immersion issues formal Purchase Order number (1st
payment $15K)
-----------------------------------------------------------------------------------------------------------------------------------
3 Detailed 6/12 X X X Immersion, AOX, and KLSI agree to detailed specification
spec. sign-off defines internal implementation of the chip. This document
add some details that are not well defined in the
function specification.
-----------------------------------------------------------------------------------------------------------------------------------
4 Code 5/15/97 X Immersion transfers Intel 930 microcode to AOX
transfer
-----------------------------------------------------------------------------------------------------------------------------------
5 Code 5/15/97 X - Immersion transfers all available date on shaft encoder
transfer
-----------------------------------------------------------------------------------------------------------------------------------
6 Place & 6/18 X Trial place and route complete
route
--------------------------------------------------------------------------------------------------------------
7 Base water 5/18/97 X X KLSI and AOX sign off on base wafer
Master slice
sign-off
-----------------------------------------------------------------------------------------------------------------------------------
8 VHDL X AOX completes VHDL functional code, simulates the
result and assures that the design agrees with the
detailed specification.
-----------------------------------------------------------------------------------------------------------------------------------
9 Pre-layout X AOX synthesizes the VHDL code, simulates the
design resulting level netlist, and assures that the design
agrees with the specification.
-----------------------------------------------------------------------------------------------------------------------------------
10 Pre-layout 6/12/97 X X AOX and KLSI agree that the pre-layout simulation
simulation result is satisfactory. 1st sign off
-----------------------------------------------------------------------------------------------------------------------------------
11 post layout 6/19/97 X KLSI-placement generate post-layout file.
-----------------------------------------------------------------------------------------------------------------------------------
12 ROM code 6/26/97 X AOX provides preliminary ROM code
-----------------------------------------------------------------------------------------------------------------------------------
13 simulation 7/3/97 X AOX simulates the design and makes sure that the design
with the detailed specification
-----------------------------------------------------------------------------------------------------------------------------------
14 second sign 7/3/97 X X AOX and KLSI agree that the post-layout simulation
off result is satisfactory, second sign off
-----------------------------------------------------------------------------------------------------------------------------------
15 KLSI fabs X KLSI fabricates ceramic and plastic prototypes
-----------------------------------------------------------------------------------------------------------------------------------
16 proto X Immersion provides AOX with prototype Joystick system
joystick
-----------------------------------------------------------------------------------------------------------------------------------
17 KLSI 7/25/97 X KLSI delivers Xx ceramic prototypes
delivers
prototypes
-----------------------------------------------------------------------------------------------------------------------------------
18 Integration X X AOX and Immersion integrate system
-----------------------------------------------------------------------------------------------------------------------------------
19 marking X X Immersion and KLSI agrees to the marking specification.
marking will be based on KLSI's standard marking
with positive modifications to it depending on
Immersion's requirement.
-----------------------------------------------------------------------------------------------------------------------------------
44
<PAGE> 22
-----------------------------------------------------------------------------------------------------
DATE/
NO TASK TIME WHO DESCRIPTION
---------------------------
IMMERSION AOX KLSI
-----------------------------------------------------------------------------------------------------
20 plastic 8/8/97 X KLSI delivers 12 plastic prototypes
prototypes
-----------------------------------------------------------------------------------------------------
21 approval X Immersion approves prototype
-----------------------------------------------------------------------------------------------------
22 ROM final X Immersion finalizes ROM code
-----------------------------------------------------------------------------------------------------
23 Production X Immersion places first mass production
order order with 10 weeks time
-----------------------------------------------------------------------------------------------------
45