Exhibit 10.17
SERVICES AND STOCK PURCHASE AGREEMENT
THIS SERVICES AND STOCK PURCHASE AGREEMENT ("Agreement") is entered
into this 30th day of September, 1998, by and between Philips Flat Panel Display
(Philips FPD) Co. B.V., which has its registered place of business at Professor
Holstlaan 4, 5656 AA, The Netherlands (hereinafter jointly referred to as
"Philips"), WHO?VISION SYSTEMS, INC., having its place of business at 100 North
Pointe Drive, Lake Forest, CA 92680 ("WhoVision"), and A3 VENTURES INCORPORATED,
having its place of business at 27791 Edgerton Road, Los Altos Hills, California
94022 ("A3 Ventures").
R E C I T A L S
A. Philips and WhoVision have entered into a Technology Transfer
Agreement of even date herewith (the "Technology Agreement") pursuant to which
Philips grants WhoVision broad access to its fingerprint sensor technology based
on its proprietary amorphous silicon diode technology, Philips renders
technological support to WhoVision, Philips purchases fingerprint sensor systems
from WhoVision, Philips and WhoVision establish a strategic business alliance,
and furthermore WhoVision grants Philips a license under intellectual property
rights and know-how generated by WhoVision related to, based on or derived from
Philips amorphous silicon diode technology, and furthermore Philips and
WhoVision have entered into an Investment Agreement of even date herewith (the
agreement and exhibits thereto are referred to collectively as the "lnvestment
Agreement") pursuant to which Philips will purchase shares of Series C Preferred
Stock of WhoVision and obtain certain stockholder rights in connection
therewith.
B. Philips and WhoVision jointly desire that A3 Ventures provide
certain services to assist in the transfer of technology pursuant to Section 2.3
of the Technology Agreement, in consideration of which WhoVision will issue to
A3 Ventures a total of Seventy-five Thousand (75,000) shares of the Series C
Preferred Stock bf WhoVision (the"Shares"), and in recognition of the tax burden
such issuance may create for A3 Ventures, WhoVision shall pay A3 Ventures One
Hundred Twenty-five Thousand Dollars ($125,000.00) pursuant to the terms and
conditions of this Agreement.
C. A3 Ventures desires to provide certain services to assist in the
transfer of technology pursuant to Section 2.3 of the Technology Agreement, and
agrees to accept the Shares and the One Hundred Twenty-five Thousand Dollars
($125,000.00) as consideration for its services pursuant to the terms and
conditions of this Agreement.
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NOW, THEREFORE, in consideration of the above premises, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, the parties hereto hereby agree as follows:
1. Definitions. As used herein:
1.1 Technology. The term "Technology" shall mean information, including
all relevant documents, software and other materials to develop the Photo Sensor
System and the Capacitive Sensor System as described in the Technology
Agreement, whether tangible or intangible, including, without limitation, each
and every invention, formula, trade secret, software program (including, without
limitation, object code, source code, flow chart, algorithm and related
documentation), manual specification, technique, product, concept, know-how, or
similar property, whether or not patentable or copyrightable and whether or not
embodied in any software.
1.2 Confidential Information. The term "Confidential Information" shall
mean all information disclosed by a party hereto (the "Disclosing Party") to any
other party hereto (the "Receiving Party"), in connection with the performance
by A3 Ventures of services hereunder, as described in the Technology Agreement.
2. Engagement for Performance of Services.
2.1 Engagement. In exchange for the Shares issued to A3 Ventures
pursuant to Section 5 of this Agreement and payment of One Hundred Twenty-five
Thousand Dollars ($125,000.00), Philips and WhoVision hereby engage A3 Ventures
to perform services during the thirty (30) day period following the closing date
as defined in the Technology Agreement (the "Services Term"), at the request of
Philips and WhoVision, in accordance with the terms and conditions of this
Agreement. A3 Ventures shall make the services of Adriaan Ligtenberg available
during the Services Term for purposes of fulfilling A3 Ventures' obligations
hereunder.
2.2 Facilities, Equipment and Supplies. A3 Ventures shall, at its own
cost and expense, provide all facilities, equipment and supplies necessary for
A3 Ventures to perform the services hereunder.
3. Protection of Confidential Information.
3.1 Confidentiality. A3 Ventures, Philips and WhoVision agree, with
respect to any Confidential Information disclosed hereunder:
(a) To use such Confidential Information only for the purposes
contemplated in this Agreement;
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(b) To use the same methods and degree of care to prevent disclosure of
such Confidential Information as the Receiving Party uses to prevent disclosure
of its own proprietary and confidential information;
(c) To disclose the Confidential Information to the employees of the
Receiving Party only on a need-to-know basis and not to disclose any
Confidential Information to any third party without the prior written consent of
the Disclosing Party; and
(d) To return any Confidential Information in any tangible form to the
Disclosing Party at the request of the Disclosing Party and to retain no copies
or reproductions thereof.
3.2 Limitations. The Receiving Party shall not be obligated to comply
with Section 3.1 if such information:
(a) was rightfully in the Receiving Party's possession or was
rightfully known to the Receiving Party prior to receipt from the Disclosing
Party;
(b) is or becomes publicly known without the fault of the Receiving
party;
(c) is or becomes rightfully available to the Receiving Party without
confidential restriction from a source not bound by a confidentiality obligation
to the Disclosing Party;
(d) is independently developed by the Receiving Party without use of
the Confidential Information disclosed hereunder; provided, however, that the
burden of proof of such independent development shall be upon the Receiving
Party; or
(e) is required to be disclosed pursuant to court or government action;
provided, however, that the Receiving Party gives the Disclosing Party
reasonable prior notice of disclosure pursuant to such court or government
action and, upon the request of the Disclosing Party, the Receiving Party shall
cooperate in contesting such disclosure
4. Property Rights. Except to the extent set forth in the Technology
Agreement, all right, title and interest in and to the Technology shall at all
times be and remain the sole and exclusive property of Philips or WhoVision, and
in no case shall any right, title or interest in and to the Technology accrue to
A3 Ventures.
5. Authorization and Sale of Preferred Stock.
5.1 Rights, Privileges and Preferences of the Shares. The Shares shall
have all the rights, privileges and preferences of Series C Stock set forth in
the
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WhoVision's Restated Certificate of Incorporation, and unless otherwise
specified herein shall be issued to A3 Ventures or an affiliated entity in
accordance with all terms and conditions of the Investment Agreement which is
attached hereto as Exhibit A and incorporated herein by reference, whereby
Philips will receive shares of Series C Preferred Stock of WhoVision and obtain
certain stockholder rights in connection therewith. In addition, A3 Ventures
shall be entitled to receive all information to be provided to Philips pursuant
to Article V of the Investment Agreement irrespective of the number of Shares
held by A3 Ventures.
5.2 Sale of the Shares. Subject to the terms and conditions hereof, at
the Closing (as hereinafter defined) WhoVision will issue and sell to A3
Ventures, and A3 Ventures agrees to purchase from WhoVision, Seventy-five
Thousand (75,000) shares of Series C Preferred Stock of WhoVision in partial
consideration of A3 Ventures' services provided hereunder.
5.3 Philips' Right to Enforce Agreement for Sale of the Shares.
WhoVision and A3 Ventures hereby grant Philips the right to enforce any and all
rights of A3 Ventures against WhoVision pursuant to the terms of this Agreement,
provided that Philips must give A3 Ventures notice of any intended enforcement
action and allow A3 Ventures full opportunity to participate in any such action.
6. Closing; Delivery.
6.1 Closing. The closing of the sale and purchase of the Shares under
this Agreement (the "Closing") shall take place at the offices of Wilson Sonsini
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California 94304 concurrently
with the execution and delivery of this Agreement by the parties.
6.2 Delivery. WhoVision shall deliver to A3 Ventures at the Closing a
certificate representing the Shares, which shall be registered in the name of A3
Ventures or an affiliated entity. On the earlier of completion of WhoVision's
IPO or March 1, 1999, WhoVision shall deliver a check or wire transfer in the
amount of One Hundred Twenty-five Thousand Dollars ($125,000.00), payable to A3
Ventures or an affiliated entity.
7. Share Transfer Restrictions; Termination; Legends.
7.1 Share Transfer Restrictions. Subject to the termination provisions
of Section 7.2 herein, A3 Ventures shall not transfer, sell, assign,
hypothecate, encumber, or alienate any of the Shares other than according to the
terms of this Agreement, and any attempt to so transfer, sell, assign,
hypothecate, encumber, or alienate any of the Shares is void and shall transfer
no right, title, or interest in or to said Shares, or to the purported
transferee, buyer, assignee, pledgee, or encumbrance holder.
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7.2 Termination of Restrictions. All restrictions on transfer of the
Shares imposed by this Agreement shall be terminated in accordance with the
following schedule:
(a) Twenty-five Thousand (25,000) of the Shares at the Closing; and
(b) Twenty-five Thousand (25,000) of the Shares upon upon completion of
the first approved product described in Sections 2.1, 2.2 or 2.3 of the letter
of intent for technology transfer between Philips and WhoVision dated August 28,
1998 (the "Technology LOI"); and
(c) Twenty-five Thousand (25,000) of the Shares on completion of a
fingerprint sensor system into a commercially viable and customer deliverable
product as described in Sections 2.1, 2.1 and 2.3 of the Technology LOI; or
(d) The earlier of the third anniversary of this Agreement, or
termination or expiration of the Technology Service Agreement, or in the event
that upon the third anniversary of this Agreement neither of the events
contemplated in paragraphs (b) and (c) above have shall have occurred, all
restrictions on transfer of any of the Shares imposed by this Agreement shall be
terminated with regard to all the Shares on such third anniversary.
7.3 Endorsements on Certificates.
7.3.1. The certificates representing the Shares subject to
this Agreement shall be endorsed as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, PURSUANT TO THE TERMS OF AN AGREEMENT BETWEEN THE SHAREHOLDER AND
THE COMPANY, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY."
7.3.2. Any transfer or sale of the Shares is further subject
to all the restrictions on transfer imposed by California and Federal securities
laws. Accordingly, it is understood and agreed that the certificates
representing the Shares shall bear any legends required by the Commissioner or
Corporations of the State of California and any other state securities
administrator or commissioner and a legend required by Federal securities laws.
7.4 Issuance of New Certificate. As the restrictions imposed by this
Agreement are terminated as herein provided, a new certificate or certificates
representing such Shares shall be issued, on request, without the legends
referred to in Section 7.3.1, above.
8. Miscellaneous.
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8.1 Relationship of Parties. A3 Ventures shall at all times during; the
performance of its services hereunder be an independent contractor, maintaining
sole and exclusive control over its ;business and operations. At no time will
any party hold itself out to be the agent, employee, lessee, sublessee, partner
or joint venturer of the other party as a result of this Agreement. No party
hereto shall have the express or implied right or authority under this Agreement
to assume or create any obligation on behalf of or in the name of any other
party, or to bind any other party in regard to any contract, agreement or
undertaking with any third party.
8.2 Entire Agreement. This Agreement, together with the Technology
Agreement and exhibits attached hereto and thereto, constitutes the entire
agreement between the parties relating to the subject matter hereof and
supersedes all prior, written or oral negotiations, representations or
agreements. No modification of this Agreement shall be binding on either party
unless it is in writing and signed by both parties.
8.3 Severability. The provisions of this Agreement are severable, and
if one or more provisions of judicially determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions or portions of this
Agreement shall nevertheless be binding on and enforceable by and between the
parties hereto.
8.4 Assignment. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the parties hereto; provided,
however, that neither party shall transfer or assign this Agreement in whole or
in part without the prior written consent of the other party hereto.
Notwithstanding the foregoing and the restrictions on assignment of the Shares
set forth in Section 7.1, A3 may assign the Shares to another legal entity owned
50% or more by Adriaan Ligtenberg or to Adriaan Ligtenberg personally.
8.5 Governing Law. The rights and obligations of the parties to this
Agreement shall be governed by and construed in accordance with the laws of the
State of California as such laws are applied to agreements entered into and
wholly performed within California.
8.6 Headings. Section headings are for convenience of reference only
and shall not be considered in the interpretation of this Agreement.
8.7 Unavoidable Delays. Each party shall be excused for any delays or
defaults in the performance of this Agreement (except the payment of amounts due
and payable hereunder) unavoidably caused by the act of the other, the act of
any agent of the other, the act of any governmental authority, acts of God, the
elements, war, litigation, strikes, walkouts, or any other cause beyond its
reasonable control. Each party shall use all reasonable diligence to avoid any
such delay or default and to resume performance ;under this Agreement as soon as
practicable after such delay or default.
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8.8 Enforcement. The parties agree that a violation of the terms of
this Agreement by any of them may cause irreparable damage, the exact amount of
which is impossible to ascertain, and for that reason the parties, and each of
them agree that all other parties will be entitled to a decree of specific
performance of the terms of this Agreement or an injunction restraining further
violation thereof, said right to be in addition to any other remedies of the
parties.
8.9 Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
personal delivery or on the day sent by facsimile transmission if a true and
correct copy is sent the same day by first class mail, postage prepaid, or by
dispatch by an internationally recognized express courier service, and in each
case addressed as follows:
If to A3 Ventures: A3 Ventures Incorporated
27791 Edgerton Road
Los Altos Hills, California 94022
Fax: (650) 618-1445
Attn: Adriaan Ligtenberg
If to WhoVision: Who?Vision Systems, Inc.
100 North Pointe Drive
Lake Forest, CA 92680
Fax: (949) 837-5355
Attn: Alex Dickinson, CEO
If to Philips: Philips Flat Panel Display (Philips FPD) Co. B.V.
Professor Holstlaan 4, 5656 AA,
The Netherlands
8.10 Third Party Beneficiaries. No party or person is an intended third
party beneficiary to any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
PHILIPS: WHOVISION:
By: /s/ Matthew T. Medeiros By: /s/ Alex Dickinson
Title: Chairman & CEO Flat Display Title: CEO
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A3 VENTURES:
By: /s/ Adriaan Lightenberg
Title: CEO
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