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EXHIBIT A TO OPTION AGREEMENT
EXCLUSIVE LICENSE AGREEMENT
AGREEMENT made this ____ day of ____, 2001, by and between DSI Datotech
Systems, Inc., a Vancouver corporation, having its principal offices at 525
Semour Street, Suite 712, Vancouver BC, Canada V6B 3H7 (hereinafter referred
to as the "Licensor" or "Datotech"), and Biometrics Security, Inc., a State
of Nevada, USA corporation, having its principal offices at 675 Fairview
Drive, Suite 246, Carson City, Nevada USA 89701 (hereinafter reffered to as
the "Licensee" or "Biometrics Security")
WITNESSETH:
WHEREAS, Datotech is the owner of the Technology and Existing
Proprietary Property as hereinafter defined;
WHEREAS, pursuant to the Option Agreement dated as of the 22nd day of
August, 2000, by and between Datotech and Biometrics Security (the "Option
Agreement"), Biometrics Security was granted the option to enter into an
exclusive license agreement to acquire the exclusive rights to eploit the
Technology and the Existing Proprietary Property for Licensed Items within
the Territory as hereinafter defined; and
WHEREAS, as of the date hereof, Biometrics Security has exercised the
option granted to Biometrics Security pursuant to the Option Agreement and
has paid the Option Price (as defined in the Option Agreement) to Datotech;
NOW THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration from each to the other, the receipt
and sufficiency of which is hereby acknowledged by both parties, it is hereby
agreed as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. The following terms used in this License Agreement
(the "Agreement") shall have the meanings set forth below:
(a) "Existing Propietary Property" shall mean all intellectual
property rights in the Technology, including without limitation, (i) any and
all patent applications file worldwide based upon the
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Technology, including any and all continuations, divisions and
continuations-in-part thereof, and all patents, inventor's certificates,
utility models and the like issuing therefrom worldwide, including any and
all re-examinations, reissues, renewals and extentions thereof, (ii) any
copyrightable or copyrighted works based upon the Technology, including
computer software and computer programs, (iii) any confidential or
proprietary know-how and information regarding the Technology, (iv) any
trademarks and tradenames associated with the Technology, whether or not
registered, and (v) all fixed representations, hard copies, hardware,
computer-readable media and other tangible implimentation of the Technology
(collectively, the "Proprietary Property"), patent rights, copyrights,
trademarks and trade secret rights. "Existing Proprietary Property" shall
also include patent rights in the Technology that are pending as of the date
hereof.
(b) "License Agreement" shall mean this License Agreement by
and between Datotech, as Licensor, and Biometrics Security, as Licensee.
(c) "Licensed Items" shall mean the interface and software for
banking and financial transactions, in which the technology might be utilized
pursuant to the execution by the parties herein of this License Agreement.
(d) "Option Agreement" has the meaning set forth in the second
recital hereof.
(e) "Purchase Price" shall mean $8 Million US Dollars payable
by Biometrics Security to Datotech upon the signing of this Agreement, less
the above amount of $3,320,000 US Dollars paid to Datotech within the terms
of the Option Agreement. In addition, Biometrics Security or its assignee
grants to Datotech a perpetual non-dilutive twenty percent (20%) Common Share
Interest in Biometrics Security or the assignee of the Option and License
Agreements upon the signing of the Licensing Agreement.
(f) "Technology" shall mean Datotech's proprietary gesture
recognition technology ("GRT") system comprising multiple-touch sensors and
related hardware, gesture recognition algorithms and software, and user
interface designs for mapping gestures to control electronic devices, as well
as alterations, improvements, modifications and derivatives to the Technology
described herein as well as all related software, documentation and other
materials, embodying GRT heretofore or created or developed by Datotech.
(g) "Territory" shall mean all major markets worldwide.
(h) "Third-Party Licenses" shall mean sub-licenses granted by
Biometrics Security to third parties pursuant to the licenses and rights
granted to Biometrics Security by Datotech in accordance with this Agreement.
"Third-Party Licensees" shall mean those parties to whom Third-Party
Licensees are granted pursuant hereto.
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ARTICLE 2
LICENSE GRANT
2.1 LICENSE TO EXERCISE RIGHTS. In consideration of the payment to
Datotech of the Purchase Price, Datotech hereby grants to Biometrics Security
the perpetual, royalty-free, sole and exclusive divisible and assignable
license to commercially exploit the Technology and the rights constituting
the Existing Proprietary Property for the Licensed Items subject to all of
the terms, conditions and restrictions contained in this Agreement. The
rights granted hereunder include, without limitation, the marketing, use,
sale and distribution of the Technology and the rights constituting the
Existing Proprietary Property for Licensed Items.
2.2 AUTHORITY TO SUBLICENSE. Subject to all of the terms, conditions
and restrictions contained herein, Datotech hereby grants Biometrics Security
the authority to sublicense the exercise of the rights specified in Section
2.1 above. Datotech will play an active role in all negotiations for
sublicensing agreements.
2.3 RESERVATIONS. Datotech retains all rights except those granted
above in Sections 2.1 and 2.2. Without limiting the generality of the
foregoing sentence. Datotech retains title to the Technology and the Existing
Proprietary Property.
ARTICLE 3
IMPROVEMENTS
3.1 DATOTECH IMPROVEMENTS. Biometrics Security acknowledges and
agrees that Datotech shall retain exclusive ownership of any and all
improvements to the Technology during the term of this Agreement as well as
after this Agreement is terminated regardless of the cause or method of
termination.
3.2 BIOMETRICS SECURITY IMPROVEMENTS. Datotech acknowledges and
agrees that Biometrics Security shall retain ownership of any and all
improvements made by Biometrics Security. Datotech also acknowledges and
agrees that Biometrics Security shall retain exclusive ownership of such
improvements after the termination of this Agreement regardless of the cause
or method of termination.
ARTICLE 4
BIOMETRICS SECURITY RIGHTS AND OBLIGATIONS
4.1 CONFIDENTIALITY OF DISCLOSURES TO THIRD PARTIES. Biometrics
Security may disclose any portion of the Technology, the Existing Proprietary
Property, and the improvements to a third party only pursuant to a
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written agreement between Biometrics Security and any third-party, approved
by Datotech, obligating such third party to secrecy regarding the disclosure.
Biometrics Security acknowledges and agrees that, because of the nature of
the property rights involved in this Agreement, any breach of Biometrics
Security's obligations under this Section 4.1 shall cause immediate,
irreparable injury to Datotech; therefore, Biometrics Security agrees and
acknowledges that Datotech shall be entitled, in addition to its other rights
and remedies at law and in equity, to seek temporary, preliminary and/or
permanent injunctions in the event an unauthorized disclosure is made or
appears to be imminent. Biometrics Security's duty of confidentiality shall
survive the termination of this Agreement regardless of the cause or method
of termination.
4.2 DISCLOSURE OF IMPROVEMENTS. From time to time, throughout the
duration of this Agreement, Datotech shall be affirmatively obligated to
disclosure the nature of any and all improvements to the Technology for
Licensed Items to Biometrics Security so as to keep Biometrics Security as
current as is practicable regarding the Technology. Datotech shall also
disclose any and all improvements to the Technology for Licensed Items to
prospective Third-Party Licensees as well as participate in meetings and
presentations with prospective Third-Party Licensees to assist in the
integration of the Technology into the Licensed Items. Datotech shall
cooperate with Biometrics Security and prospective Third-Party Licensees by
providing, at no cost, all required disclosures and assistance in order to
integrate the Technology into the Licensed Items, including but not limited
to, hardware and software for demonstrations and simulations. The form of
such disclosures shall be decided by mutual agreement between the parties on
a case-by-case basis. Datotech and Biometrics Security shall each bear their
own expenses resulting from such meetings, presentations or any disclosures
required pursuant to this Section 4.2. The costs of any subsequent
development by Datotech at Biometrics Security request of any hardware and
software for a specific application shall be borne by Biometrics Security.
4.3 REPORTING. Biometrics Security shall provide to Datotech written
reports on an annual basis, no later than March 1st of the subsequent year.
Such reports shall detail Biometrics Security's exploitation, licensing and
sublicensing activities and shall include a report of all related revenues
received and expenses incurred for the same quarter. Such reports shall also
(a) detail Biometrics Security's intellectual property protection activities
and expenses under Section 6.1 hereof for the immediately preceding quarter;
(b) include a status report on the condition of all worldwide intellectual
property rights related to the Technology; and (c) include a report of all
strategy and planning for intellectual property protection activities for the
upcoming quarter.
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ARTICLE 5
DATOTECH RIGHTS AND OBLIGATIONS
5.1 RIGHTS TO LICENSED ITEMS TECHNOLOGY Datotech represents, warrants
and covenants that Datotech is the owner of the Existing Proprietary
Property and has the exclusive right and license for the use of the
Technology together with the right to sub-license to others,
manufacture, distribute and sell the Technology in connection with
the Licensed Items. Datotech shall provide all disclosures and
assistance to Biometrics Security and Third-Party Licensees, at no
cost, in order to integrate the Technology into the Licensed Items.
ARTICLE 6
PROTECTION OF INTELLECTUAL PROPERTY RIGHTS
6.1 AUTHORIZATION TO BIOMETRICS SECURITY TO FILE FOR INTELLECTUAL
PROPERTY PROTECTION IN THE TERRITORY. Subject to the provisions of
Section 2.3, Article 4, Section 6.4, Section 7.1 hereof and all of the other
terms and conditions contained herein, Biometrics Security shall have the
authority but not the obligation, with the consent of Datotech, to take
actions in the Territory on behalf of Datotech such as filing patent
applications and seeking registrations of copyrights for the purpose of
securing and protecting intellectual property rights for Datotech in the
Technology and the improvements thereto. The authority granted in this
Section 6.1 may not be assigned, delegated or sublicensed. Biometrics
Security shall bear the expense of all of its activities under this Section
6.1 including the payment of attorney fees, patent issuance and maintenance
fees, copyright and trademark registration fees and other similar fees and
expenses where applicable.
6.2 ACTIONS NOT TAKEN BY BIOMETRICS SECURITY. In the event Datotech,
in its sole discretion, deems it necessary or beneficial to take a specific
action that Biometrics Security has not taken somewhere in the Territory to
protect or maintain any or all of the intellectual property rights discussed
in Section 6.1 hereof, it may notify Biometrics Security of its intention in
writing. Upon receipt of such notice, Biometrics Security shall respond to
Datotech within fifteen (15) calendar days indicating whether Biometrics
Security chooses to take the action requested. If Biometrics Security fails
to respond within such time period, or if Biometrics Security responds
indicating that it chooses not to undertake the requested action, then in
that event Datotech may take the action independently, bearing the cost of
the action. In such case, the intellectual property right or rights resulting
from or saved by Datotech's action, if any, shall automatically cease to be
within the scope of the license rights granted to Biometrics Security in
Sections 2.1 and 2.2 hereof.
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6.3 ASSISTANCE AND COOPERATION IN PROTECTING INTELLECTUAL PROPERTY.
Both parties, including their employees and affiliates, shall be obligated to
assist and cooperate with each other in securing the legal protection of any
and all intellectual property rights under Sections 6.1 and 6.2 above.
6.4 ACTS OR OMISSIONS HARMFUL TO INTELLECTUAL PROPERTY. Biometrics
Security shall take no action, nor shall it omit to take any action, if the
effect of such act or omission would be to harm any or all of Datotech's
then-existing intellectual property rights.
ARTICLE 7
DISCLAIMERS
7.1 NO REPRESENTATIONS REGARDING TECHNOLOGY OR INTELLECTUAL PROPERTY.
Datotech makes no representations about and disclaims all warranties, express
or implied, about the Technology, the Existing Proprietary Property, and any
improvements thereto. Without limiting the generality of the foregoing,
Datotech disclaims any express or implied warranties regarding the following:
(a) the fitness, usefulness, efficiency or profitability of the
Technology, the Existing Proprietary Property, the improvements thereto or
any of the rights granted herein;
(b) the validity or scope of any intellectual property rights; and
(c) that anything made, used or sold based on or deriving from the
Technology or any of the rights licensed herein will be free from infringement
of third party rights.
ARTICLE 8
TERM; TERMINATION FOR CAUSE AND SURVIVAL OF CERTAIN PROVISIONS
8.1 TERM. The term of this Agreement shall commence on the date hereof
and shall continue indefinitely unless terminated pursuant to the provisions
of this Agreement.
8.2 TERMINATION FOR CAUSE. Upon a breach by Biometrics Security of any
of its obligations hereunder, Datotech may terminate this Agreement upon
sixty (60) calendar days advance written notice to Biometrics Security
describing the grounds for termination; however, such termination shall not
occur if Biometrics Security conclusively demonstrates to Datotech's
satisfaction before the end of such sixty (60) calendar days that the breach
has been cured.
8.3 SURVIVAL. The rights and obligations contained in the following
Sections shall survive
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termination of this Agreement regardless of the method or timing of its
termination: 2.3, 3.1, 3.2, 4.1, 6.3, and 7.1.
8.4 RETURN OF EXISTING PROPRIETARY PROPERTY. If this Agreement shall
be terminated, Biometrics Security shall return to Datotech all technical data,
know-how, confidential information and trade secrets so far as any of them
consists of written materials, prints and other tangible items which either
bear a stamp "confidential" or "confidential information" thereon or are
designated in any other way to Datotech, whether orally or in writing, as
confidential information. For purposes of this Agreement, all Technology as
utilized in the Licensed Items shall be classified as confidential
information.
ARTICLE 9
MISCELLANEOUS
9.1 ASSIGNABILITY. This Agreement shall not be assignable by either
party in whole or in part except upon the written and signed consent of the
other party, which shall not be unreasonably withheld.
9.2 BINDING EFFECT. Subject to the restrictions on assignability
contained herein, this Agreement is binding on and inure to the benefit of
the parties and their respective authorized successors and assigns.
9.3 FURTHER ASSURANCES. Biometrics Security agrees to execute and
deliver any additional documents and instruments and perform any additional
acts that may be necessary or appropriate to comply with its obligations
hereunder.
9.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia and of Canada as
to all matters of interpretation, performance, remedies and enforceability.
The parties hereto hereby irrevocably submit to the jurisdiction of the
Supreme Court of British Columbia, Canada, over any action or proceeding
arising out of or relating to this Agreement and hereby irrevocably agree
that all claims in respect to any action or proceeding may be heard and
determined in such Supreme Court. The parties hereto irrevocably consent to
the service of any and all process in any such action or processing by the
certified mailing with return receipt of copies of such process to their
address specified in this Agreement. The parties hereto agree that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or any other
manner provided by law. The parties hereto waive any objection to venue in
such state and any objection to an action or proceeding in such state on the
basis of forum non convenience.
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9.5 NOTICE. All notices, requests or consents provided for or permitted
under this Agreement must be in writing and must be given either by sending
the writing in the mail addressed to the recipient, postage paid, registered
or certified mail, return receipt requested, which shall be effective upon
receipt, or by delivering the writing to the recipient in person, by courier
or by facsimile transmission to the address specified below:
If to the Licensor:
DSI Datotech Systems, Inc.
525 Seymour Street
Suite 712
Vancouver, BC
Canada V6B 3H7
Attention: Elli Segeve
President & CEO
If to the Licensee:
Biometrics Security, Inc.
675 Fairview Drive
Suite 246
Carson City, Nevada
USA 89701
Attention: Stephen J. Henry
President & CEO
With a copy to Legal Firm:
Law Offices
3838 Camino del Rio North
Suite 333
San Diego, California
USA 92108 1789
Attention: Carmine Bua
9.6 HEADINGS AND CERTAIN WORDS. Headings are used in this Agreement for
the purpose of organization only and do not constitute terms of the
Agreement. The words "herein," "hereof," "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless otherwise expressly indicated.
9.7 SEVERABILITY. If any provision of this Agreement or its application
to any person or circumstance shall be invalid, illegal, or unenforceable to
any extent, the remainder of this Agreement and its application shall
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not be affected and shall be enforceable to the fullest extent permitted by
law unless the provision held to be illegal, invalid or unenforceable is so
fundamental to the sense of this Agreement that its illegality, invalidity or
unenforceability would make the enforceability of the remainder unreasonable.
9.8 ENTIRE AGREEMENT. This Agreement sets forth the entire, final and
exclusive agreement and understanding between the parties as to the subject
matter hereof and supersedes all prior and contemporaneous writings and
discussions between the parties pertaining hereto.
9.9 NO ORAL MODIFICATION. This Agreement may be amended or modified
only by a written instrument signed by proper and duly authorized
representatives of both parties.
9.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and
the same instrument.
In witness whereof, the parties have caused this Agreement to be duly
executed on the date first set forth above.
BIOMETRICS SECURITY, INC.
By:____________________________________
Name:
Title:
DSI DATOTECH SYSTEMS INC.
By:____________________________________
Name:
Title:
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OPTION AGREEMENT
AGREEMENT made and entered into this 22nd day of August, 2000, by and
between DSI Datotech Systems, Inc., a Vancouver corporation, having its
principal offices at 525 Seymour Street, Suite 712, Vancouver BC, Canada V6B
3H7 ("Datotech") and Biometrics Security, Inc., a State of Nevada, USA
corporation, having its principal offices at 675 Fairview Drive, Suite 246,
Carson City, Nevada USA 89701 ("Biometrics Security").
WITNESSETH:
WHEREAS Datotech represents that it is the developer and the owner of
the right title and interest in and to the Technology and Existing
Proprietary Property as hereinafter defined; and
WHEREAS Biometrics Security desires Datotech to disclose the details of
the Technology to Biometrics Security to permit Biometrics Security to
evaluate the Technology and to determine whether Biometrics Security will
exercise the Option granted to Biometrics Security hereunder and enter into
an exclusive License Agreement (in the form attached hereto and made apart
hereof as Exhibit A) with Datotech for the Technology, all know-how related
to the Technology and the Existing Proprietary Property;
WHEREAS, Datotech wishes to grant Biometrics Security the sole and
exclusive Option to acquire the exclusive licensing rights for the
exploitation of the developed Technology for Licensed items within the
Territory through the License Agreement;
NOW THEREFORE, in consideration of the provisions contained herein, and
of the payment of the Option Price, the receipt and sufficiency of which is
hereby acknowledge, the undersigned agree as follows:
ARTICLE 1
DEFINITIONS
The following terms used in this Option Agreement shall have the meanings
set forth below:
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(a) "Agreement" shall mean this Option Agreement, entered into on the
date first above written.
(b) "Existing Proprietary Property" shall mean all intellectual
property rights in the Technology, including without limitation, (i) any and
all patent applications filed worldwide based upon the Technology, including
any and all continuations, divisions and continuations-in-part thereof, and
all patents, inventor's certificates, utility models and the like issuing
therefrom worldwide, including any and all re-examinations, reissues,
renewals and extensions thereof, (ii) any copyrightable or copyrighted works
based upon the Technology, including computer software and computer programs,
(iii) any confidential or proprietary know-how and information regarding the
Technology, (iv) any trademarks and trade names associated with the
Technology, whether or not registered, and (v) all fixed representations,
hardware, hard copies, computer-readable media and other tangible
implementation of the Technology (collectively, the "Proprietary Property"),
patent rights, copyrights, trademarks and trade secret rights. "Existing
Proprietary Property" shall also include patent rights in the Technology
that are pending as of the date hereof.
(c) "License Agreement" shall mean the License Agreement attached
hereto and made apart hereof as Exhibit A that may be executed by the parties
hereto upon the exercise by Biometrics Security of the Option granted to
Biometrics Security hereunder.
(d) "Licensed Items" shall mean the interfaces and software for
executing banking and financial transactions, in which the Technology may be
utilized pursuant to the execution by the parties herein of the License
Agreement.
(e) "Option" shall mean the sole, transferable and exclusive Option of
Biometrics Security to acquire, for the Option Price, the exclusive licensing
rights for the exploitation of the Technology within the Territory through a
license agreement.
(f) "Option Period" shall mean the period commencing on the date
hereof and ending three months from the date when a reasonably acceptable
prototype is made available to Biometrics Security by Datotech.
(g) "Option Price" shall mean the amount of $320,000 US Dollars fully
creditable towards any amount, which may be owed to Datotech pursuant to the
execution of the License Agreement.
(h) "Prototype" shall mean a device using Datotech Technology that will
demonstrate, beyond any reasonable doubt, multi-touch gesture recognition and
individual gestures utilizing a PC system. Datotech commits to use its best
efforts to make this prototype available at a charge of $3,000,0000 US
Dollars to Biometrics Security, within 12 months of the delivery of
$3,000,000 US Dollars to Datotech. This charge of
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$3,000,000 US Dollars is fully creditable towards any amount that may be owed
to Datotech pursuant to the execution of the License Agreement.
(i) "Technology" shall mean Datotech's proprietary gesture recognition
technology ("GRT") system comprising multiple-touch sensors and related
hardware, gesture recognition algorithms and software, and user interface
designs for mapping gestures to control electronic devices, as well as
alterations, improvements, modifications and derivatives to the Technology
described herein, as well as all related software, documentation and other
materials, embodying GRT theretofore or hereafter created or developed by
Datotech.
(j) "Territory" shall mean all major markets worldwide.
(k) "Third-Party Licenses" shall mean sub-licenses granted by
Biometrics Security to third parties pursuant to the license and rights
granted to Biometrics Security by Datotech in accordance with the License
Agreement. "Third-Party Licensees" shall mean those parties to whom
Third-Party Licenses are granted in accordance with the License Agreement.
ARTICLE 2
DATOTECH OBLIGATIONS
2.1 RESEARCH AND DEVELOPMENT. Datotech shall conduct research and
development of the Technology with ultimate goal of developing the
Technology and Existing Proprietary Property for the Licensed Items and
otherwise maximize the commercial value of the Technology and Existing
Proprietary Property for the Licensed Items.
2.2 DISCLOSURE OF IMPROVEMENTS. From time to time throughout the
duration of this Option, Datotech shall disclose any and all improvements to
the Technology for Licensed Items to Biometrics Security so as to keep
Biometrics Security as current as is practicable regarding the Technology.
Datotech shall also disclose any and all improvements to the Technology for
Licensed Items to prospective Third-Party Licensees as well as participate in
meetings and presentations with prospective Third-Party Licensees to
demonstrate the feasibility of integrating the Technology into the Licensed
Items. Datotech shall cooperate with Biometrics Security and Prospective
Third-Party Licensees by providing, at no cost, all required disclosures and
assistance in order to demonstrate the feasibility of integrating the
Technology into the Licensed Items, including but not limited to, hardware
and software for demonstrations and simulations. Such disclosures shall be in
a form and manner to be agreed upon by the parties on a case-by-case basis.
Datotech and Biometrics Security shall each bear their own expenses resulting
from such meetings, presentations or any disclosures
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required pursuant to this Section 2.2.
2.3 MAINTENANCE OF EXISTING PROPRIETARY PROPERTY. During the term of
this Agreement Datotech shall utilize its best efforts to maintain all
Existing Proprietary Property in valid force and effect.
ARTICLE 3
BIOMETRICS SECURITY OBLIGATIONS
3.1 NO OBLIGATION TO EXERCISE OPTION. Biometrics Security has a genuine
interest in commercializing the Technology but shall not be obligated to
exercise the Option granted hereunder and may refuse to execute the License
Agreement.
3.2 CONFIDENTIALITY. Biometrics Security shall have an affirmative duty
of confidentiality regarding all confidential information provided to it by
Datotech hereunder. Such obligation shall survive the termination of this
Agreement and the License Agreement for a period of two (2) years. Moreover,
Biometrics Security acknowledges and agrees that, because of the nature of
the property rights involved under this Agreement and the License Agreement,
any breach of Biometrics Security's obligations under this Section 3.2 shall
cause immediate, irreparable injury to Datotech; therefore, Biometrics
Security agrees and acknowledges that Datotech shall be entitled, in addition
to its other rights and remedies at law and in equity, to seek temporary,
preliminary and/or permanent injunctions in the event an unauthorized
disclosure is made or appears to be imminent.
ARTICLE 4
GRANT OF OPTION
4.1 BIOMETRICS SECURITY OPTION. Datotech hereby grants Biometrics
Security the sole, transferable and exclusive Option, for the Option Period
to acquire the exclusive rights to exploit the Technology, the Existing
Proprietary Property, and any proprietary property related to the Technology
conceived pursuant to this Agreement within the Territory for Licensed items
through an exclusive license agreement in the form attached hereto as
Exhibit A.
ARTICLE 5
CONSIDERATION FOR OPTION
5.1 CONSIDERATION. In consideration of the option granted to Biometrics
Security hereunder, Biometrics Security shall pay Datotech the amount of
$320,000 US Dollars, which shall be fully creditable towards any amounts due
Datotech under the License Agreement. Said $320,000 US Dollars shall be due
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and payable within two months of the signing of this Option Agreement.
Biometrics Security shall pay Datotech $3,000,000 US Dollars within eleven
months of signature of the Option Agreement. Datotech will exclusively apply
the $3,000,000 payment towards the development of the Prototype. "Prototype"
shall mean a device using Datotech Technology that will demonstrate, beyond
any reasonable doubt, multi-touch gesture recognition and individual gesture
patterns utilizing a PC system. Datotech commits to use its best efforts to
make this prototype available at this charge of $3,000,000 US Dollars to
Biometrics Security, within 12 months of the delivery of this $3,000,000 US
Dollars to Datotech. Upon the exercise by Biometrics Security of the Option
granted hereunder and the signing of the License Agreement, Biometrics
Security shall pay Datotech the amount of $8 Million US Dollars less the
above amount of $3,320,000 US Dollars paid to Datotech within the terms of
this Agreement. Biometrics Security must exercise its Option within three
months of the time a reasonably acceptable prototype is made available to
Biometrics Security by Datotech. In addition, Biometrics Security or its
assignee grants to Datotech a perpetual non-dilutive twenty percent (20%)
Common Share Interest in Biometrics Security or the assignee of the Option
and License Agreements upon the signing of the Licensing Agreement.
ARTICLE 6
TERM AND TERMINATION
6.1 TERM. The term of this Agreement shall be for the duration of the
Option Period unless otherwise terminated as provided herein.
6.2 TERMINATION. Any exercise of the right of termination hereunder
shall not impose any liability upon the terminating party nor waive any other
rights that the terminating party has or may have. This Agreement may be
terminated, in whole or in part, at the option of the party having such right
as below provided, by written notice upon the occurrence of any of the
following events:
(a) by either party in the event the other party is adjudicated
bankrupt, or if a receiver or trustee is appointed for such party or for a
substantial portion of its assets, or if any assignment is made for the
benefit of creditors;
(b) by Datotech in the event Biometrics Security elects not to pay
$320,000 US Dollars to Datotech within two months of the signature of the
Option Agreement.
(c) by Datotech in the event Biometrics Security elects not to pay
$3,000,000 US Dollars to Datotech within eleven months of the signature of
the Option Agreement.
(d) by Datotech in the event Biometrics Security elects not to
exercise the Option granted
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hereunder and not to proceed with negotiations for the execution of the
License Agreement.
(d) Biometrics Security elects not to pay the balance of the $8
million US Dollars under the terms of this Agreement within three months from
the date when a reasonably acceptable prototype is made available to
Biometrics Security by Datotech.
ARTICLE 7
MISCELLANEOUS
7.1 NO THIRD PARTY BENEFICIARIES. There shall be no third party
beneficiaries to this Agreement.
7.2 ASSIGNABILITY. This Agreement shall be assignable by either party
in whole or in part upon the written and signed consent of the other party
which shall not be unreasonably withheld.
7.3 BINDING EFFECT. Subject to the restrictions on assignability
contained herein, this Agreement shall be binding upon and inure to the
benefit of the parties and their respective authorized successors and assigns.
7.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of British Columbia, Canada.
7.5 NOTICES. All notices, requests or consents provided for or
permitted under this Agreement must be in writing and must be given either by
mail addressed to the recipient, postage paid, registered or certified mail
return receipt requested, or by delivering the writing to the recipient in
person, by courier or by facsimile transmission. Such a writing so delivered
shall be effective upon receipt.
7.6 HEADINGS. Headings are used in this Agreement for the purpose of
organization only and do not constitute terms of the Agreement. The words
"herein," "hereof," "hereunder," and other words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless
otherwise expressly indicated.
7.7 SEVERABILITY. If any provision of this Agreement or its application
to any person or circumstance shall be invalid, illegal, or unenforceable to
any extent, the remainder of this Agreement and its application shall not be
affected and shall be enforceable to the fullest extent permitted by law
unless the provision held to be illegal, invalid or unenforceable is so
fundamental to the sense of this Agreement that its illegality, invalidity or
unenforceability would make the enforceability of the remainder unreasonable.
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7.8 ENTIRE AGREEMENT. This Agreement sets forth the entire, final and
exclusive agreement and understanding between the parties as to the subject
matter hereof and supersedes all prior and contemporaneous writings and
discussions between the parties pertaining hereto.
7.9 NO ORAL MODIFICATIONS. This Agreement may be amended or modified
only by a written instrument signed by proper and duly authorized
representatives of both parties.
7.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and
the same instrument.
In witness whereof the parties hereto have entered into this Agreement
on the date first above written.
DSI DATOTECH SYSTEMS INC.
BY: /s/ Edward C. Pardiak /s/ Elli Segev
------------------------------- --------------------------
Name: Edward C. Pardiak Elli Segev
Title: Chairman & CFO President & CEO
BIOMETRICS SECURITY, INC.
By: /s/ Stephen J. Henry
--------------------------------
Name: Stephen J. Henry
Title: President & CEO
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