<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 4, 1997
REGISTRATION NO. 333-35017
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
TELETRAC HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 4812 43-1789886
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation) Classification Code Number) Identification No.)
</TABLE>
------------------------
2323 GRAND STREET, SUITE 1100, KANSAS CITY, MO 64108
(816) 474-0055
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
------------------------
KAREN C. WIEDEMANN, ESQ.
REBOUL, MACMURRAY, HEWITT, MAYNARD & KRISTOL
45 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10111
(212) 841-5700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: /X/
If this Form is filed to register additional securities for any offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED SECURITY(1) PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Warrants to Purchase Shares of
Class A Common Stock.......... 105,000 $67.05 $7,040,250 $2,133.41
Class A Common Stock.......... 56,437 (2) -- -- No separate fee
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Shares of Common Stock issuable upon exercise of outstanding Warrants.
Pursuant to Rule 416 under the Securities Act of 1933, as amended, this
Registration Statement also relates to such additional indeterminate number
of shares of Common Stock as may be issued pursuant the antidilution
provisions of the Warrants.
------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
- ------ --------------------------------------------------------------------------
<C> <S>
3.1 Certificate of Incorporation, dated July 15, 1997.**
3.2 Certificate of Amendment of Certificate of Incorporation, dated July 30,
1997.**
3.3 By-laws, adopted as of July 30, 1997.**
4.1 Warrant Agreement, dated August 6, 1997, between the Registrant and
Norwest Bank Minnesota, National Association, as Warrant Agent.**
4.2 Indenture between Teletrac, Inc. and Norwest Bank Minnesota, National
Assocation, as Trustee, dated August 6, 1997.**
5 Opinion of Reboul, MacMurray, Hewitt, Maynard & Kristol.**
10.1 VLU Production Agreement, dated as of September 6, 1996, between Tadiran,
Ltd. and Teletrac, Inc.*
10.2 Amendment to VLU Production Agreement, dated as of May 28, 1997, between
Tadiran, Ltd. and Teletrac, Inc.*
10.3 Mobile Data Terminal Purchase Agreement, dated as of February 8, 1996,
between Micronet, Inc. and Teletrac, Inc.*
10.4 Amendment to Mobile Data Terminal Purchase Agreement, dated September 16,
1996, between Micronet, Inc. and Teletrac, Inc.*
10.5 Value Added Reseller License Agreement, dated June 3, 1997, between Etak,
Inc. and Teletrac, Inc.*
10.6 Pledge Agreement, dated August 6, 1997, between Teletrac, Inc. and Norwest
Bank Minnesota, National Association, as Collateral Agent.**
10.7 Stock Purchase Agreement, dated as of December 6, 1996, by and among
Teletrac, Inc. and certain Investors named therein.**
10.8 Stockholders' Agreement, dated as of December 6, 1996, by and among
Teletrac, Inc. and certain Stockholders named therein.**
10.9 Amended and Restated Registration Rights Agreement, dated as of December
6, 1996, by and among the Company and certain Stockholders named
therein.**
10.10 Exchange Agreement, dated as of July 31, 1997, among Teletrac, Inc.,
Teletrac Holdings, Inc. and certain Stockholders named therein.**
10.11 Credit Agreement, dated as of September 18, 1997, among Teletrac, Inc.,
Banque Paribas, as Administrative Agent, and Fleet National Bank, as
Documentation Agent.**
10.12 Unlimited Guaranty, dated September 18, 1997, by Teletrac Holdings, Inc.
to and with Fleet National Bank, as Agent.**
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
- ------ --------------------------------------------------------------------------
<C> <S>
10.13 Security and Pledge Agreement, dated September 18, 1997, by and between
Teletrac, Inc. and Fleet National Bank, as Agent.**
10.14 Securities Pledge Agreement, dated as of September 18, 1997, by and
between Teletrac Holdings, Inc. and Fleet National Bank, as Agent.**
10.15 Equity Holder Agreement, dated as of September 18, 1997, among Banque
Paribas, Fleet National Bank and Teletrac, Holdings, Inc.**
21.1 Subsidiaries of Registrant**
23.1 Consent of Reboul, MacMurray, Hewitt, Maynard & Kristol (included in their
opinion filed as Exhibit 5)**
23.2 Consent of Arthur Anderson LLP
23.3 Consent of Coopers & Lybrand LLP
24.1 Power of Attorney of the Board of Directors (included in the Signature
Page)**
</TABLE>
- ------------------------
* Certain information in this Exhibit is deleted pursuant to a request with
the Securities and Exchange Commission for confidential treatment.
** Previously Filed.
(b) Financial Statement Schedules
All other schedules are omitted because they are inapplicable or the
requested information is shown in the financial statements of the Registrant or
notes thereto.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in New York, New
York on November 4, 1997.
TELETRAC HOLDINGS, INC.
/s/ JAMES A. QUEEN
---------------------------------------------
James A. Queen
Chairman of the Board of Directors,
Chief Executive Officer, and Director
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
Chairman Of The Board,
/s/ JAMES A. QUEEN Chief Executive Officer
- ------------------------------ and Director (Principal November 4, 1997
James A. Queen Executive Officer)
Vice President of Finance
/s/ ALAN B. HOWE and Corporate Development
- ------------------------------ (Principal Financial November 4, 1997
Alan B. Howe Officer)
/s/ CHARLES SCHEIWE
- ------------------------------ Controller (principal November 4, 1997
Charles Scheiwe Accounting Officer)
- ------------------------------ Director November 4, 1997
Sanford Anstey
*
- ------------------------------ Director November 4, 1997
Robert Benbow
*
- ------------------------------ Director November 4, 1997
David J. Berkman
*
- ------------------------------ Director November 4, 1997
Michael A. Greeley
II-3
<PAGE>
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
*
- ------------------------------ Director November 4, 1997
Michael Markbreiter
*
- ------------------------------ Director November 4, 1997
Marc H. Michel
- ------------------------------ Director November 4, 1997
Brian A. Rich
- ------------------------------ November 4, 1997
*Attorney-in-Fact
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------------------
<C> <S>
3.1 Certificate of Incorporation, dated July 30, 1997.**
3.2 Certificate of Amendment of Certificate of Incorporation, dated June 30, 1997.**
3.3 By-laws, adopted as of July 30, 1997.**
4.1 Warrant Agreement, dated August 6, 1997, between the Registrant and Norwest Bank Minnesota, National
Association, as Warrant Agent.**
4.2 Indenture between Teletrac, Inc. and Norwest Bank Minnesota, National Association, as Trustee, dated
August 6, 1997.**
5 Opinion of Reboul, MacMurray, Hewitt, Maynard & Kristol.**
10.1 VLU Production Agreement, dated as of September 6, 1996, between Tadiran, Ltd. and Telectrac, Inc.*
10.2 Amendment to VLU Production Agreement, dated as of May 28, 1997, between Tadiran, Ltd. and Teletrac,
Inc.*
10.3 Mobile Data Terminal Purchase Agreement, dated as of February 8, 1996, between Micronet, Inc. and
Teletrac, Inc.*
10.4 Amendment to Mobile Data Terminal Purchase Agreement, dated September 16, 1996, between Micronet,
Inc. and Teletrac, Inc.*
10.5 Value Added Reseller License Agreement, dated June 3, 1997, between Etak, Inc. and Teletrac, Inc.*
10.6 Pledge Agreement, dated August 6, 1997, between Teletrac, Inc. and Norwest Bank Minnesota, National
Association, as Collateral Agent.**
10.7 Stock Purchase Agreement, dated as of December 6, 1996, by and among Teletrac, Inc. and certain
Investors named therein.**
10.8 Stockholders' Agreement, dated as of December 6, 1996, by and among Teletrac, Inc. and certain
Stockholders named therein.**
10.9 Amended and Restated Registration Rights Agreement, dated as of December 6, 1996, by and among the
Company and certain Stockholders named therein.**
10.10 Exchange Agreement, dated as of July 31, 1997, among Teletrac, Inc., Teletrac Holdings, Inc. and
certain Stockholders named therein.**
10.11 Credit Agreement, dated as of September 18, 1997, among Teletrac, Inc., Banque Paribas, as
Administrative Agent, and Fleet National Bank, as Documentation Agent.**
10.12 Unlimited Guaranty, dated September 18, 1997, by Teletrac Holdings, Inc. to and with Fleet National
Bank, as Agent.**
10.13 Security and Pledge Agreement, dated September 18, 1997, by and between Teletrac, Inc. and Fleet
National Bank, as Agent.**
10.14 Securities Pledge Agreement, dated as of September 18, 1997, by and between Teletrac Holdings, Inc.
and Fleet National Bank, as Agent.**
10.15 Equity Holder Agreement, dated as of September 18, 1997, among Banque Paribas, Fleet National Bank
and Teletrac, Holdings, Inc.**
21.1 Subsidiaries of Registrant**
23.1 Consent of Reboul, MacMurray, Hewitt, Maynard & Kristol (included in their opinion filed as Exhibit
5)**
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Coopers & Lyrand LLP
24.1 Power of Attorney of the Board of Directors (included in the Signature Page)**
</TABLE>
- ------------------------
* Certain information in this Exhibit is deleted pursuant to a request with the
Securities and Exchange Commission for confidential treatment.
** Previously Filed.
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Exhibit 10.1
VLU PRODUCTION AGREEMENT
This VLU Production Agreement (the "Agreement") is made as of September 6, 1996
(the "Effective Date") by and between Tadiran Ltd., a company duly organized and
existing under the laws of Israel, through its Telematics Division ("Seller" or
"Tadiran"), and Teletrac Inc., a corporation registered in Delaware ("Buyer" or
"Teletrac") (jointly - the "Parties").
THE PARTIES THEREFORE AGREE AS FOLLOWS
1. AGREEMENT TO PURCHASE AND SELL
Within the term of this Agreement (two years from the date hereof), Buyer
shall purchase from Seller, and Seller shall sell to Buyer [****] [****]
Vehicle Location Units ("VLUs"). The Parties hereby acknowledge that
[****] [****] VLUs ordered on February 26, 1996 (purchase order number
[****]) ("the [****] Order") is included in the above [****] VLUs and this
Agreement shall apply to the [****] VLUs in full, including the [****]
Order. Within 7 days hereof Teletrac shall issue a purchase order for the
additional [****] ([****]) VLUS.
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
2. UNIT SPECIFICATIONS AND CHANGES
2.1 The VLUs shall fully comply with the VLU technical specifications, as
set forth in Exhibit "A" attached hereto (the "Specifications").
2.2 Subject to provisions of Section 15 below, the Parties may negotiate
changes to the specifications which shall be implemented in a manner
that will not interrupt the then current production of VLUs. The
Parties shall determine by mutual consent the corresponding adjustment
in prices and the delivery schedule, and this Agreement shall be
modified in writing accordingly.
3. PURCHASE PRICE/PAYMENT TERMS
3.1 The basic purchase price for each VLU shall be US $ [****] ([****]) per
unit for the [****] Order and US $[****] ([****] US Dollars and [****]
cents) per unit, exclusive of G.S.P., for the remaining [****] VLUs
(respectively - the "Purchase Price"). Should the G.S.P. apply during the
term of this Agreement, the cost of the G.S.P. shall be added to the
Purchase Price. During the term of this Agreement, from time to time,
Seller shall use its best efforts to reduce the costs that were the basis
of its initial determination of US $[****] as the appropriate purchase
price
2
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
and shall pass through to Teletrac any such cost reductions, as it
achieves. This undertaking does not constitute the grant to Teletrac of a
right to audit Tadiran's books, records or financial statements.
3.2 Subject to the provisions of Section 4 below, The Basic Price includes
freight, handling, insurance, and other delivery costs (all as of the
Effective Date and shall be adjusted accordingly upon any change in the
above), predicated upon the Seller's shipment to Garden Grove, California
("Buyer's Facility") or any other single facility in the United States
provided that the Buyer shall pay the difference in additional delivery
costs from Buyer's Facility to the final destination.
3.3 The invoice of VLUs shall contain, at a minimum, the purchase price in US
dollars, purchase order number, invoice date, quantity, description,
invoice number, reference to this Agreement, ship to name and address, bill
to name and address, emit to name and address and method and name of
carrier.
3.4 TERMS OF PAYMENT. Terms for the payment of the Purchase Price are as
defined in Exhibit "B" attached hereto.
3
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
4. DELIVERY TERMS
4.1 DELIVERY SCHEDULE. Seller shall ship the VLUs to Buyer according to the
delivery schedule attached as Exhibit "C" (the "Delivery Schedule"). The
monthly delivery rate (as set forth in Exhibit "C" or amended by the
Parties) may be increased by up to [****]% or decreased by up to [****]% by
means of a 60 days prior written notice. In no event shall the monthly
delivery rate be increased in excess of 20,000 VLUs or decreased below
[****] VLUs.
4.2 DELIVERY POINT. All VLUs shall be delivered by Seller FOB Seller's
facilities in Holon, Israel or a facility of any of Seller's subcontractors
(not necessarily in Israel). Title and risk of loss shall pass from Seller
to Buyer at Seller's facilities or subcontractors' facility.
4.3 SHIPMENT POINT. Upon request by Buyer, Seller shall arrange for and pay
the cost of packaging, insurance and freight to Buyer's Facility. US
federal, state and local taxes shall be the responsibility of Buyer.
4.4 METHOD OF SHIPMENT. Method of shipment and selection of carrier is to be
determined by Seller. Seller agrees to ship VLUs by methods that support
the Delivery Schedule as specified herein. If Seller is late in expected
delivery date, Seller shall use and pay for the most expeditious
4
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
shipment means. Seller shall, at its sole expense, provide for all
crating, packaging and packing in shipping containers that are designed to
provide adequate protection for the VLUs during shipment. Buyer shall
incur all additional costs, of in-bound freight when, at Buyer's request,
VLUs are expedited. Seller shall use reasonable efforts to comply with
such requests.
4.5 TAXES. All prices are inclusive of all present export duties (including
brokerage fees) and all Seller's corporate income taxes, duties, tariffs,
fees, levies, charges, federal, state and local sales taxes and other
compulsory payments arising out of or in connection with any such sale or
order, if payable under the laws in force in Israel, including any Israeli
governmental agency operating under the authority of such laws shall be
paid by Seller.
4.6 All claims for shortages in the number of VLUs which have been delivered to
Teletrac shall be made to Tadiran within 60 days of the actual delivery of
the VLUs to Teletrac.
5. REQUEST FOR DEVIATIONS
The Parties may request reasonable deviations from the Specifications in
writing. Requests for deviations must clearly identify the following:
description of the deviation; reference the individual Specification being
deviat-
5
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
ed; term of deviation, i.e. temporary or permanent; number of VLUs
affected; Effective Date; effect of deviation on any other technical or
performance Specification, including whether, following the deviation, the
Unit remains within the applicable margin or tolerance; anticipated delay,
if any, in Delivery Schedule due to deviation; and reason for deviation.
Deviations may be made only if a written addendum describing the deviations
(including the change, if any, in Delivery Schedule) has been mutually
agreed upon and signed by both parties.
6. WARRANTY
Seller hereby warrants the VLUs to be in compliance with the Specifications
and to be free from defects in materials and workmanship for the shorter
of: (a) three years from the date of delivery to Buyer or (b) two years
from the date the VLUs have been delivered by Buyer to third party. The
crystal to be in full compliance with the Specifications and to be free
from defects in materials and workmanship for the period of five years from
the date of receipt at Buyer's Facility. The warranty periods defined
above shall be referred to as the Warranty Period. Seller shall have the
option of either repairing or replacing VLUs found to be defective during
the Warranty Period. Time to repair or replace shall not exceed 90 days
from the date of actual
6
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
delivery of the item to Seller's facility. Seller also warrants the
merchantability and fitness for use within the Specifications of the VLUs.
Following the expiration of the Warranty Period, Seller shall be obligated
to provide maintenance support for VLUs for a period of 15 years in
accordance with a schedule of parts and labor rates which it shall
periodically publish. Seller's schedules for parts and labor rates shall
be effective 30 days following the delivery of the schedule.
6.1 Buyer acknowledges that the warranty contained in this Section 6 above
shall not apply to damage, deterioration or malfunctions which are caused
by:
6.1.1 The improper removal or installation of VLUs.
6.1.2 Accidents, acts of nature, misuse, abuse, negligence, neglect,
unauthorized product modification or failure to follow proper
instruction procedure.
6.1.3 Repair or attempted repair by any person not authorized by
Seller.
6.2 Buyer also acknowledges that Buyer shall be responsible and shall bear all
costs and charges related to the deinstallation of defective VLUs and
reinstallation of the VLUs, Seller shall bear the cost of shipment of the
VLUs from Buyer to Seller and back.
7
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
6.3 THE WARRANTIES CONTAINED IN THIS SECTION 6 ARE IN LIEU OF ALL OTHER
WARRANTIES WHETHER ORAL, WRITTEN, OR EXPRESS, IMPLIED OR STATUTORY. SELLER
SHALL NOT BE LIABLE FOR ANY BUSINESS EXPENSES, LOSS OF PROFIT,
INCONVENIENCE, OR DAMAGE, INCLUDING DIRECT, INDIRECT, SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES RESULTING FROM VLU DEFECTS WHETHER RESULTING FROM
BREACH OF WARRANTY OR ANY OTHER LEGAL THEORY. SELLER DISCLAIMS ALL
LIABILITY, WHETHER IN CONTRACT, TORT, WARRANTY OR OTHERWISE TO ANY THIRD
PARTY OTHER THAN BUYER. NOTWITHSTANDING THE ABOVE, SELLER SHALL REMAIN
LIABLE TO BUYER (AND ONLY TO BUYER) UNDER THE ABOVE WARRANTY FOR THE
DURATION OF THE WARRANTY PERIOD, DESPITE PASSAGE OF TITLE TO THE VLUs TO
ANY THIRD PARTIES.
7. CONFIDENTIALITY AND PROPRIETARY RIGHTS
Neither party shall, without the prior written consent of the other party,
use (for any purpose other than that contemplated by this Agreement) or
disclose or divulge to any third party the terms and conditions of this
Agreement or any documents, specifications or information, including
technical information, received from the other party under or in connection
with this Agreement, provided, however, that Seller may disclose to any
third party, including its employees and subcontractors (provided they have
executed
8
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
an appropriate NDA), in connection with the manufacture of the VLUs, the
documents, specifications or information received from Buyer, to the extent
that in Seller's reasonable opinion it is necessary for the purposes of
this Agreement. Seller shall have the right to disclose any information
reasonably necessary to file for patent and other intellectual property
rights protection. At all times Seller shall retain exclusive proprietary
rights in the VLU (including design, configurations, drawings,
specifications, etc.) and nothing herein may be construed as granting any
intellectual property rights in the VLU to the Buyer.
8. USE OF NAME OR TRADEMARKS
Seller shall print any name or mark requested by Buyer on the VLUs in
addition to the name "Tadiran". Buyer shall be liable for an infringement
of copyright or trademarks as a result of any name or mark requested by
Buyer on the VLUs. If Buyer elects to use another name in addition to the
name "Tadiran", Buyer shall give Seller such name or mark to be used on the
VLUs at least 90 days prior to the delivery date for such VLUs.
9
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
9. FORCE MAJEURE
If performance by Seller of its obligations hereunder is prevented by force
majeure, affecting the activities of Seller or any party connected with the
sale, manufacture, supply, shipment or delivery of VLUs, including but not
limited to, acts of God, flood, typhoon, earthquake, tidal wave, landslide,
fire, plague, commotion, strike, labor disturbances, blockade, arrest or
restraint of government, requisition of vessel or aircraft, explosion, war,
government request, guidance, order or regulation or the boycotting of
Israeli goods, or any other unforeseeable causes or circumstances beyond
the reasonable control of Seller, then Seller shall not be liable for loss
or damage or failure or delay in performing its obligations under this
Agreement; provided, however, that Seller promptly fulfills its obligations
under this Agreement immediately after such force majeure ceases.
Notwithstanding the foregoing, Teletrac may terminate this Agreement, by
written notice to Tadiran, if performance by Tadiran is prevented by force
majeure for a period of more than 90 days.
10. COMPLIANCE
10.1 COMPLIANCE WITH AGREEMENT. Parties hereby agree to fully cooperate with
each other and to sell and buy VLUs which fully comply with the terms,
conditions, provisions and
10
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Specifications of this Agreement, including the exhibits attached hereto
for price set forth herein to be paid in a timely manner.
10.2 COMPLIANCE WITH LAW. Parties shall be in compliance with (as to their
respective roles as manufacturer or operator/seller) and the VLUs shall be
in compliance with all federal, state and municipal regulations governing
the sale and use of the VLUs. The Parties shall cooperate in obtaining
necessary government agency approvals. Seller shall notify Buyer thirty
days prior to submission to any governmental agency as to the nature of the
submission. Buyer may elect to jointly apply for such agency approval,
registration or listing. Buyer shall incur the cost of obtaining and
maintaining a requested listing, approval or registration.
10.3 COMPLIANCE WITH PROPRIETARY RIGHTS REQUIREMENTS. Seller shall retain the
right to use all technology, know-how, copyright, trademark and patent
rights used in producing the VLUs. The Parties agree that Seller shall
retain all rights to file for patents on the VLUs or any other protection
of intellectual property relating to the VLUs.
11
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
11. INDEMNIFICATION
11.1 SELLER'S INDEMNIFICATION FOR ACTIONS. Subject to limitations listed below,
Seller shall indemnify, defend and hold harmless Buyer from and against all
claims, liabilities, obligations, damages, losses, deficiencies, costs,
shipping and transportation expenses, payments and expenses (including
court costs and reasonable attorney's fees), lawsuits, actions and other
proceedings, judgments and awards (collectively, "Claims") (other than
Claims due to the fault of Buyer or a failure of the VLU to perform in
accordance with the specifications), including, without limitation, Claims
of personal injury and death, arising directly out of any act or omission
of Seller, under this Agreement, including Claims of product liability.
Buyer acknowledges that the coverage of this indemnification does not
include patent infringements of the Buyer or any other breach of
obligations of Buyer contained in the Specifications. In no event shall
Seller be liable for indirect or consequential damages.
11.1.1 Buyer shall give Seller notice of any Claim within 10 business days
after Buyer's receipt of such Claim.
11.1.2 Buyer shall empower Seller to conduct the defense of any Claim and
shall cooperate fully with such defense.
12
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Seller shall have full authority to conduct the defense.
11.1.3 Buyer shall not be entitled to settle a Claim without the express
written permission of Seller.
11.1.4 Provided that Seller advances the funds necessary to defend a Claim,
Buyer shall be obligated to defend such Claim.
11.2 BUYER'S INDEMNIFICATION FOR ACTIONS. Buyer shall indemnify, defend and
hold harmless Seller from and against all Claims (other than Claims due to
the fault of Seller), including, without limitation, Claims of personal
injury and death, arising, out of any act or omission of Buyer, or Buyer's
agents or employees, in connection with this Agreement.
11.2.1 Seller shall give Buyer notice of any Claim within 10 business days
after Seller's receipt of such Claim.
11.2.2 Seller shall consult regularly with Buyer in connection with the
defense of any Claim.
11.2.3 Seller shall not be entitled to settle a Claim without the express
written permission of Buyer.
11.2.4 Provided that Buyer advances the funds necessary to defend a Claim,
Seller shall be obligated to defend such Claim.
13
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
11.3 PROPRIETARY RIGHTS INDEMNIFICATION. Seller shall indemnify, defend and
hold harmless the Buyer from and against any Claims resulting or arising
from or in connection with Seller's violation of any third party's trade
secrets, proprietary information, trademarks, copyrights or patent rights
in connection with services, work or VLUs provided under this Agreement.
Buyer shall indemnify, defend and hold harmless the Seller from and against
any Claims resulting or arising from or in connection with Buyer's
violation of any third party's trade secrets, proprietary information,
trademarks, copyrights or patent rights in connection with services, work
or VLUs provided under this Agreement.
11.4 PROPRIETARY RIGHTS INDEMNIFICATION. Buyer shall indemnify, defend and hold
harmless the Seller from and against any Claims resulting or arising from
or in connection with Seller's violation of any third party's trademarks or
copyrights in connection with name or mark requested by Buyer pursuant to
Section 8 above.
11.5 COOPERATION. Each party agrees to promptly notify the other of any Claim
and to cooperate fully in the defense thereof or any negotiations related
thereto, and neither
14
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
shall enter into any settlement without the consent of the other party.
12. CONTRACT ADMINISTRATION
Alan B. Howe ("Howe") or his duly appointed successor shall administer the
terms of this Agreement on behalf of Buyer, and Roman Sternberg
("Sternberg") or his duly appointed successor shall administer the terms of
this Agreement on behalf of Seller.
13. NOTICES
Any notice, request or demand required to be made or given hereunder by any
party shall be deemed to be duly given or made upon receipt. The notice,
request or demand must be sent by air courier or registered or certified
airmail, or facsimile to the respective addresses of the parties set forth
below, or at such other address as has been given by either party to the
other in writing in accordance with the terms of this Agreement.
Teletrac Inc.
8900 State Line Rd., Suite 500
Leawood, Kansas 66206
Attention: Alan B. Howe
With a copy to: Steven D. Scheiwe
Tadiran Ltd., Telematics Division
26 Hashoftim Street
Holon, 58102 Israel
Attention: Roman Sternberg
With a copy to: Layla Chertow
15
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
14. TERMINATION
Each party shall have the right, as set forth below, to terminate this
Agreement without prejudice to any rights that it may have, whether under
the provisions of this Agreement, in law or in equity or otherwise, upon
the occurrence of any of the following events, hereinafter called
"Defaults".
(a) Either party, if the other party defaults in the performance of a
material obligation, provided for in this Agreement; or
(b) Either party, if the other party files a voluntary petition in
bankruptcy, files any voluntary petition seeking any reorganization,
arrangement, readjustment, liquidation, dissolution or similar relief
under the present or any future federal or state bankruptcy or
insolvency act; fails to remove an involuntary petition for a
reorganization, arrangement, readjustment, liquidation, dissolution or
similar relief under the present or any future federal or state
bankruptcy or insolvency act within 60 days after the filing of such
petition, or appoints a trustee, receiver or liquidator of its
properties.
Notwithstanding the above, a corporate reorganization or spin off not
under bankruptcy or insolvency proce-
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
dures shall not be considered a default, unless there is an intention
to abandon the business.
The party claiming a Default shall give written notice of termination to
the party alleged to be in Default in accordance with the notice provision
set forth in Section 13. The defaulting party shall have 90 business days
in which to correct any such Default, and failing such, this Agreement
shall terminate. If the defaulting party shall, within ten business days,
notify the other party in writing that it disputes the asserted Default,
and the matter cannot be resolved by mutual agreement of the parties, the
matter shall be submitted to binding mediation as hereinafter provided.
15. DECREASE OF QUANTITIES AND TERMINATION OF PRODUCTION
Buyer may decrease the total quantity of the VLUs he has undertaken to
purchase under Section 1.1 above under the following conditions:
15.1 Buyer must give Seller prior written notice of Buyer's election to
decrease the quantities of VLUs to be delivered under this Agreement
("Decrease Notice"). Notwithstanding the above, Buyer may not
decrease the [****] Order.
17
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
15.2 Should the consequences of Decrease Notice require any changes in
overall delivery schedule, the Parties shall determine a new delivery
schedule by mutual consent. In any event the quantities of the VLUs
to be supplied after the Decrease Notice shall be more than the
quantities scheduled to be supplied within 4 months following the date
of the Decrease Notice.
15.3 Buyer shall compensate Seller in the amount of US$[****] per each VLU,
canceled in accordance with Sub-sections 15.1 and 15.2 above.
15.4 Buyer may give Seller Decrease Notice of cancellation of all further
deliveries, and, in such case, Buyer shall cover the following costs:
a. [****]% of the total price of the VLUs shipped prior to the
Decrease Notice;
b. [****]% of the total price of the ordered VLUs planned to be
shipped during 30 days immediately following the date of the Decrease
Notice;
c. [****]% of the total price of the ordered VLUs planned to be
shipped within 30-60 days from the date of the Decrease Notice;
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
d. [****]% of the total price of the ordered VLUs planned to be
shipped within 60-90 days from the date of the Decrease Notice;
e. US$ [****] per each VLU related to the order canceled as a result
of this termination of production.
"Planned to be shipped" shall be interpreted in accordance with the
last update of the monthly delivery rate.
In such case all inventory becomes the property of Buyer, including
all parts and partly completed units. Seller shall ship same (at
Buyer's expense) to a destination requested by Buyer.
16. BINDING MEDIATION
16.1 If one or more disputes arise between the parties with respect to the
obligations and responsibilities of either party under this Agreement, any
such dispute shall be resolved in accordance with the process described in
this Section 16, provided, however, that if either party determines that
provisional relief (e.g. a temporary restraining order or preliminary
injunction) is required to provide temporary relief, nothing herein shall
prevent the aggrieved party from applying to a court for provisional
relief. An application for provisional relief to a court shall not relieve
either party of its obligation under this
19
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Section 14 and shall not alter the power of the mediator to determine the
rights and obligations of the Parties under this Agreement.
16.1.1 Either party may initiate the dispute resolution process by sending a
written notice (which the parties hereby agree will automatically toll
any applicable statute of limitations) of the alleged dispute and the
alleged wrong suffered, to the members of the Dispute Resolution
Committee, consisting of the following individuals at Seller and Buyer
or their successors, who shall be persons holding positions at a level
substantially equivalent to those named ("Dispute Committee"):
SELLER BUYER
------ -----
General Manager The Chairman of the Board
Telematics Division
16.1.2 Upon receipt of any such notice, the Dispute Committee, using all
available and relevant resources of their respective companies, shall
promptly investigate the facts and circumstances surrounding the
disputes and shall meet (either in person or by telephone) to attempt
to resolve the dispute. Any resolution reached, either informally or
in such a meeting, shall be committed to writing and signed by the
Dis-
20
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
pute Committee and communicated to the appropriate management of the
parties for implementation. This resolution shall be conclusive and
binding upon the parties.
16.1.3 If a dispute is not resolved by the Dispute Committee, any party may
pursue its action as set forth in Section 16.2 below.
16.1.4 Each of the parties specifically acknowledges and agrees that remedies
at law for any breach of this Agreement would be inadequate, and that
the parties, in addition to any other relief available, shall be
entitled to specific performance of all of the provisions of this
Agreement.
16.2 Within 5 days after the Dispute Committee has failed to resolve any
dispute, the parties shall meet to discuss and agree upon the
qualifications which they desire a mediator to possess.
Any party may suggest one or more candidates to fill the position of
mediator.
The parties shall then attempt to select a mutually acceptable
candidate.
16.2.1 Once a candidate has been agreed upon by the parties, the candidate
shall be invited to serve as the mediator. If the candidate declines
to do so, the parties
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
shall meet or confer again to select another qualified candidate.
This process shall be repeated until a mediator is selected and agrees
to serve. If, however, after 30 days, the parties are unable to agree
upon a mediator, the mediator shall be selected by the President of
the New York Arbitration Association, whose selection shall be binding
upon the parties.
16.2.2 During the selection and mediation processes, each party shall
disclose to the other party any circumstances known to it which would
create any reasonable doubt about the impartiality or neutrality of an
individual who is being considered as a potential mediator or who is
serving as the mediator. The candidate or mediator may be asked to
explain such circumstances and be required to disclose any information
which would constitute grounds for doubt as to the candidate's or the
mediator's impartiality or neutrality. If any such circumstances have
been disclosed, either before or after the individual's appointment as
mediator, the candidate or mediator shall not serve or continue to
serve unless both parties agree.
16.2.3 The mediator's compensation rate shall be determined and agreed upon
at or prior to the mediator's appointment. The mediator's
compensation and all other inci-
22
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
dental costs incurred during the mediation process will be shared
equally by the parties.
16.2.4 The mediator shall be neutral and impartial and shall use the laws of
the State of New York to resolve the dispute between the parties.
16.2.5 The mediator shall control the procedural aspects of the mediation.
The parties shall cooperate fully with the mediator at all times.
16.2.6 The mediator is free to meet and communicate separately with each
party.
16.2.7 The mediator shall, in consultation with the parties, fix the agenda
for all meetings.
16.2.8 Each party may be represented by counsel, who shall be authorized to
recommend settlement options to their principals.
16.2.9 The mediation process shall be conducted expeditiously and shall be
completed in less than 120 days from the date the mediator was
selected. Each representative shall make every effort to be available
for meetings, and the mediator shall ensure that he is able to devote
all the time necessary to quickly and effectively mediate the dispute.
16.2.10 The entire mediation process shall remain confidential. The parties
or the mediator shall not disclose
23
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
information regarding the process, including settlement terms, unless
the parties agree otherwise. The mediator may obtain assistance and
independent expert advice with the agreement of and at the expense of
the parties.
16.2.11 The mediator shall not be liable for any good faith act or omission in
connection with his role as mediator.
16.2.12 The mediation shall take place in New York City.
16.2.13 The mediator's decision shall be final and binding upon both parties.
17. NEW YORK LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York as the same or any succeeding provision of
law may be in effect from time to time. For the purposes of any dispute
between the parties, this Agreement shall be construed as if all parties
were resident and doing business in New York. If there are any ambiguities
in the Agreement, such ambiguities shall not be construed against either
party on the basis of who drafted the documents.
24
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
18. MISCELLANEOUS PROVISIONS
18.1 RELATIONSHIP OF PARTIES. This Agreement does not constitute and shall not
be construed as constituting a partnership or joint venture between The
Parties. Neither party shall represent that it is an agent for the other
party. Both parties acknowledge that the relationship of Seller and Buyer
shall be and at all times remain one of an independent contractor, and so
shall represent themselves to third parties. Neither party has the right
to bind the other in any manner.
18.2 SUCCESSORS. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective executors, heirs, legal
representatives, successors and assigns.
18.3 ASSIGNMENT. Parties shall not assign, transfer or sell any of their rights
hereunder to any third party without the prior written permission of the
other Party, which permission shall not be unreasonably withheld; provided,
however, that Teletrac may assign this agreement, without the permission
from Tadiran, as part of sale or transfer of all or substantially all of
its assets and business. Notwithstanding the above Tadiran may assign this
agreement to its subsidiary created as part of a corporate reorganization,
provided Tadiran shall guarantee the performance of such
25
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
subsidiary. No rights hereunder shall devolve by operation of law or
otherwise upon any assignee, receiver, liquidator, trustee or other party.
The VLUs delivered hereunder shall be manufactured only by Tadiran Ltd.,
its legitimate assigns or Tadiran LTD's subcontractors.
18.4 NO WAIVER. Failure of either party to insist upon strict performance of
any of the terms, conditions, provisions or Specifications within this
Agreement (including the exhibits), or the delay in exercising any of its
remedies, shall not constitute a waiver of such terms conditions,
provisions or Specifications or a waiver of any default thereof nor the
remedy of such default.
18.5 SURVIVAL OF OBLIGATIONS. Each party's obligations under this Agreement
which, by their nature, would continue beyond termination or expiration of
this Agreement, including by way of illustration only and not limitation,
Section 4 or any Section related to confidentiality, warranty and
indemnification, shall survive termination or expiration of this Agreement
by either party for any reason.
18.6 ENTIRE AGREEMENT. This Agreement, together with all exhibits hereto,
constitute the entire agreement and understanding between the parties as to
the subject matter of this Agreement, and supersedes all previous
communications,
26
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
representations or agreements. Any other document issued by Buyer shall be
deemed to be issued only for administrative convenience and no term or
condition thereof, including any purchase order, shall supersede the terms
and conditions of this Agreement.
18.7 REMEDIES. Except as specifically set forth in this Agreement, all remedies
available to either party for breach of this Agreement are cumulative, and
may be exercised concurrently or separately, and the exercise of any one
remedy shall not be deemed an election of such remedy to the exclusion of
other remedies.
18.8 HEADINGS. The paragraph headings used in this Agreement are for
convenience of reference only, and shall not in any way limit or amplify
the terms and provisions hereof, nor enter into the interpretation of this
Agreement.
18.9 BINDING AGREEMENT. The persons executing this Agreement on behalf of the
parties have been duly and validly authorized to do so, and this Agreement
is a valid and binding obligation of the parties.
18.10 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which shall constitute
one and the same Agreement.
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
18.11 SEVERABILITY. If any term of this Agreement shall be unlawful, void
or unenforceable, such term shall be deemed omitted to the extent
prohibited or invalid, but the remainder of this Agreement shall not
be invalidated and shall be given effect as far as possible. If any
term hereof is found by a court or arbitrator to be over-broad, such
term shall be limited to the extent required to make it enforceable.
18.12 MODIFICATION. This Agreement may not be modified, supplemented or
otherwise changed except by a written instrument executed by both
parties.
18.13 ATTORNEY'S FEES. If any action or proceeding (judicial or
non-judicial) is brought to interpret any term or provisions of this
Agreement, the prevailing party shall be entitled to costs and
reasonable attorney's fees in addition to any other relief to which it
is entitled.
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE SIGNED THIS
AGREEMENT AS OF THE DAY AND YEAR FIRST ABOVE WRITTEN.
TELETRAC INC.
By /s/ James A. Queen
-----------------------------
TADIRAN LTD.
By /s/ Eddy Kafry
-----------------------------
29
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
VLU AGREEMENT
EXHIBIT A
SPECIFICATIONS
[****]
[143 pages omitted and filed separately with the Commission
pursuant to a request for confidential treatment]
30
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
VLU AGREEMENT
EXHIBIT B
TERMS OF PAYMENT
1. A combination of a downpayment and a Standby Letter of Credit will be
provided.
[****]
2. The payment for the delivered VLUs will be made upon shipment.
31
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
VLU AGREEMENT
EXHIBIT C
DELIVERY SCHEDULE
The following is a projected delivery schedule for VLUs:
October 1996 [****]
November 1996 [****]
December 1996 [****]
January 1997 [****]
February 1997 [****]
March 1997 [****]
April 1997 [****]
May 1997 [****]
June 1997 [****]
July 1997 until completion [****]
A final "Baseline Schedule" will be summarized not later than October 10, 1996.
In any event, the minimum quantities to be delivered will be as follows:
October 1996 [****]
November 1996 [****]
December 1996 [****]
January 1997 [****]
February 1997 [****]
March 1997 [****]
April 1997 [****]
May 1997 [****]
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
June 1997 [****]
July 1997 until completion [****]
33
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Exhibit 10.2
Amendment
to VLU Production Agreement
This Amendment to VLU Production Agreement dated September 6, 1996
("Amendment") is made as of May 28, 1997 by and between Tadiran Ltd. ("Seller"
or "Tadiran") and Teletrac Inc. ("Buyer" or "Teletrac").
Whereas, due to interference with proper function of the VLU caused by
unrelated third parties (the "Interference"), Specifications of the VLU Exhibit
"A" to the Agreement have to be modified; and
Whereas, in order to resolve the above problem, Teletrac requested
Tadiran, in accordance with the Agreement, to change the Specifications of the
VLU and develop a modified VLU (the "Modified VLU"); and
Whereas, the Parties wish to cooperate in order to resolve the above
problem.
The Parties hereby agree as follows:
1. Terms used in this Agreement shall have the same meaning as
defined in the Agreement.
2. Based on data and information provided by Teletrac and
independently confirmed by Tadiran, Tadiran shall make all
reasonable efforts to develop a Modified VLU which shall provide
technical solution to the Interference. Joint teams of Tadiran
and Teletrac (the "Joint Team") shall cooperate in definition of
the changes. Upon development of the Modified VLU the Joint Team
shall perform laboratory and field tests in order to determine
the suitability of the technical solution. Should the solution
be found acceptable, it shall be approved by the Joint Team.
3. The Parties hereby acknowledge that the above development shall
require joint efforts of both Parties. If the proposed technical
solutions are not successful, despite their efforts, the Parties
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
shall coordinate further steps in order to resolve the problem of
Interferences.
4. Upon approval of the Joint Team, the Specifications shall be
changed in writing in accordance with the approved technical
solution (the "Revised Specifications"), which shall be signed by
both Parties. The Parties hereby undertake to make reasonable
efforts to approve the Revised Specifications and to instruct
their members of the Joint Team to promote the approval of the
technical solution in the speediest and most efficient manner.
5. Upon approval of Revised Specifications, Tadiran shall submit to
Teletrac a proposal for retrofit costs (excluding R&D) and for
adjustment of the price for all new VLU Units to be ordered under
the Agreement.
5.1. It is hereby agreed that the retrofit costs shall not exceed
US $**** per Unit if **** has to be replaced and US $****
per Unit, if **** have to be replaced. The Parties shall
add the retrofit costs to the VLU price defined in the
Agreement for all retrofit Units.
5.2. It is hereby agreed that the price for all new VLU Units to
be ordered under the Agreement shall be adjusted but shall
not exceed US $**** per Unit, if **** has to be replaced or
US $**** per Unit, if **** have to be replaced.
5.3. The above "not to exceed" estimates are based on assumption
that the cost of **** to Tadiran shall not exceed US $****.
If the cost of **** exceeds US $****, the difference shall
be added to the above "not to exceed" estimates.
5.4. As soon as production facilities could be readjusted and the
prices be agreed upon (the "Modification Effective Date"),
all Units ordered under the Agreement shall be Modified VLUs
and manufactured in accordance with the Revised
Specifications.
2
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
6. In order to preserve the production capacity established under
the Agreement and within the framework of mutual cooperation, the
Parties hereby agree to the following changes in the on-going
production of the VLUs:
6.1. from the date of execution of this Amendment until
Modification Effective Date, the VLU's shall be manufactured
without components which require modification and without
final acceptance tests. These VLUs shall be delivered to
bonded warehouse in Thailand and upon such delivery the
title to these VLUs shall pass to Teletrac ("Warehouse
VLUs"). Tadiran represents and Teletrac shall have the
right to verify that the storing conditions in the bonded
warehouse are adequate. Teletrac shall have the right to
inspect the bonded warehouse from time to time.
The cost of storage and insurance premium for the duration
of the storage in the bonded warehouse (up to four months)
shall be paid by Tadiran. If by the end of the four-month
period the Revised Specifications have not been approved,
Tadiran shall complete the manufacture of the Warehouse VLUs
and shall ship them to Teletrac, unless the Parties agree to
continue their joint development effort.
6.2. Starting with the Modification Effective Date, all Warehouse
VLUs shall be modified according to Revised Specifications
and delivered to Teletrac in accordance with the Agreement
at a minimum monthly rate of **** Units a month (in addition
to regular deliveries as per section 6.3 below). Warranty
for Warehouse VLUs shall begin upon actual delivery to
Teletrac in accordance with the Agreement.
6.3. For the duration of the development of the Modified VLUs
until Modification Effective Date, the monthly delivery rate
defined in the Agreement may be decreased to **** VLUs. For
the purpose of determination of the monthly delivery rate,
delivery to the bonded
3
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
warehouse shall be considered a "delivery." On Modification
Effective Date the monthly delivery rate of regular
deliveries shall be raised to a minimum of **** Units a
month.
6.4. Notwithstanding the above, it is hereby agreed that payments
for Warehouse VLUs shall be made in the following manner:
****% of the payment due for each delivery shall be paid
upon delivery to the bonded warehouse and the other ****%
plus retrofit costs shall be paid upon shipment of the
Modified VLUs in accordance with the Agreement. For
avoidance of doubt these terms of payment shall apply to
Warehouse VLUs only and terms of payment for any other VLUs
shall be in accordance with the Agreement.
The Letter of Credit issued under the Agreement in favor of
Tadiran shall apply to all payments under the Agreement and
under this Amendment.
7. All other provisions of the Agreement unless amended specifically
herein shall remain intact and Teletrac shall remain importer of
record of all VLUs and Modified VLUs.
/s/ Alan B. Howe /s/ Eddy Kafry
- ------------------------------ ----------------------------------
Teletrac Tadiran
Alan B. Howe Eddy Kafry
Vice President - Finance and President and CEO Tadiran
Corporate Development Telematics
4
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Exhibit 10.3
MOBILE DATA TERMINAL
PURCHASE AGREEMENT
This Mobile Data Terminal Purchase Agreement (this "Agreement") by and
between Teletrac Inc., 7391 Lincoln Way, Garden Grove, California 92641
("Teletrac") and Micronet Ltd., 7 Hashalom Road, Tel-Aviv, Israel 67892
("Micronet"), is made effective as of the 8th day of February, 1996. The
parties hereby agree as follows:
1. AGREEMENT TO PURCHASE AND SELL.
1.1 SALE OF PRODUCTS. Teletrac shall purchase from Micronet a minimum of ****
Terminals, and Micronet shall sell to Teletrac a minimum of **** Terminals, on
the terms set forth herein and on the attached purchase order #****. Terminals
are defined as Micronet's production level Net-950 Mobile Data terminals. The
description and technical, engineering, and operational specifications for the
Terminals and the protocol (the "Specifications") are set forth in Appendix "A",
all of the terms of which are incorporated herein by this reference. Micronet
shall imprint serial numbers (including bar coded serial numbers) on the back
panel of each Terminal, and shall print, in white, "Net-950" on each Terminal.
1.2 INITIAL ORDER. Teletrac hereby places a firm and irrevocable order for
**** Terminals from Micronet (the "Initial Order"), all of which will be
purchased in accordance with the terms and conditions of this agreement.
1.3 SUBSEQUENT ORDERS. After the Initial Order for **** Terminals ordered
hereunder have been purchased, orders for additional Terminals shall be in
writing and shall specify arrival dates of not less than 10 weeks from delivery
of the order to Micronet. Micronet may, by written notification delivered to
Teletrac within 10 working days of Micronet Receipt of a subsequent order, elect
not to fill the subsequent order. If Micronet does not notify Teletrac of its
election to not fill the subsequent order, the order shall be filled as
described in this paragraph 1.3 and in accordance with the other terms of this
Agreement. All subsequent orders shall be for at least **** Terminals per
order. The prices set forth in paragraph 3.1 shall apply to subsequent orders,
but shall be subject to an annual increase on each anniversary of the effective
date of this Agreement, in an amount
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
equal to the increase in the U.S. Consumer Price Index ("CPI") over the prior
12-month period. Micronet shall use its reasonable efforts to expeditiously
fill subsequent orders.
1.4 PURCHASE ORDERS. Purchase orders will be issued by Teletrac for purposes
of administration of delivery and quantity schedules. No term or condition of
any purchase order shall supersede the terms and conditions of this agreement.
In the event of any conflict between the terms of any purchase order and this
Agreement, the terms of this Agreement shall control. Micronet shall promptly
honor and fulfill all purchase orders in accordance with the terms and
conditions of this Agreement.
2. QUALITY CONTROL.
2.1 DEVELOPMENT. Micronet acknowledges and agrees that Teletrac is not a
participant in the development of the Terminals and is not liable for the
design, any design defects, product liability, strict liability (i.e, liability
without fault), or failure of the Terminals to meet the Specifications.
2.2 TEST UNITS. Teletrac acknowledges that it has been supplied **** test
units and that it has tested these units and found them acceptable and
conforming to the specifications and that the plastics and graphics are also
acceptable. Teletrac confirms that Micronet may proceed with production units
based on these test units. The test units shall be included in the count of
Spare terminals as defined in Paragraph 5.2.
2.3 ACCEPTANCE/REJECTION OF TERMINALS. Within two weeks of receipt, Teletrac
shall inspect all incoming Terminals (each shipment of Terminals shall be
referred to as a "Lot") to insure compliance with the Specifications. Teletrac
may reject the total lot received (if more than ****% of the Lot does not comply
with Specifications), or portions of the Lot, as to those Terminals that do not
comply with Specifications. Teletrac shall inspect Terminals on a sampling
basis. Rejected Terminals shall be promptly returned to Micronet; provided,
however, that rejected Terminals shall be Held so that they can be shipped in
bulk, and will be shipped to Micronet not more frequently than once per month.
Micronet shall bear all costs of freight, duty, insurance and other costs
incurred in returning the Terminals to Micronet and shipping new Terminals to
replace the rejected Terminals to Teletrac. Micronet acknowledges and agrees
that timely receipt of conforming Terminals is critical to Teletrac and that
Teletrac shall suffer severe damages if substantial numbers of Terminals are
non-conforming. The parties recognize that the full impact of such breach would
be very difficult to assess and it would be difficult to fix the actual amount
of damages. Therefore, to avoid possible disputes, the parties agree that if
more than
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
****% of a Lot is rejected and returned, Micronet shall pay to Teletrac
liquidated damages of US $**** per rejected Terminal per day beginning after the
tenth day following Micronet's receipt of each non-conforming Terminal unit
replaced. This amount shall be invoiced and paid by Micronet within 30 calendar
days of receipt of invoice. If not paid by Micronet, the amount shall be
applied against monies owed for Terminals. The amount established under this
paragraph for liquidated damages represents a reasonable attempt by the parties
to state an amount that bears a reasonable relationship to actual damages and
does not constitute a penalty. Notwithstanding anything in this paragraph to
the contrary, Teletrac shall specify the reasons for the rejection and give
Micronet an opportunity to discuss the rejection prior to imposition of the
liquidated damages described in this paragraph.
3. PAYMENT.
3.1 PRICE. The purchase price for each Terminal (including bracket and screws)
shall be U.S. $**** per unit (the "Purchase Price"). The Purchase Price
includes packaging, export duties, Israeli taxes, and handling costs. Except as
otherwise provided herein, Teletrac is responsible for insurance and shipping
costs and shall select the carrier. Teletrac is also responsible for import
duties and U.S. taxes, provided that Micronet includes with each shipment a
"Country of Origin Certificate (Form A)".
3.2 INVOICING. Invoices for Terminals shall contain, at a minimum, the
Purchase Price in U.S. dollars, purchase order number, invoice date, quantity,
description, invoice number, reference to this Agreement, ship to name and
address, remit to name and address and method and name of carrier.
3.3 TERMS OF PAYMENT.
DOWN PAYMENT. Teletrac, by Bank wire transfer, shall make a down payment
to Micronet's account in the amount of U.S. $**** within 4 business days of the
effective date of this Agreement. Micronet shall Invoice Teletrac for this
amount. The down payment shall be applied towards the last shipment payment.
Payments for all other shipments, as per paragraph 4 below, will be made by wire
transfer immediately prior to each delivery.
4. SHIPMENT.
4.1 SHIPMENT TERMS. Unless Teletrac notifies Micronet otherwise, as provided
in Paragraph 12.2, Teletrac hereby orders **** Terminals to be shipped to
Teletrac's facility described in paragraph 4.3, on the dates set forth in the
following Shipment Schedule:
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
- ------------ ------------- ------------------------------------------------
Number of Terminal Date shipped to Teletrac Facility
Terminals Type
- ------------ ------------- ------------------------------------------------
**** Net-950 Within 35 calendar days after effective date.
**** Net-950 Within 14 calendar days thereafter
**** Net-950 Within 60 Calendar days thereafter
- ------------ ------------- ------------------------------------------------
NOTE:
Micronet is allowed to accelerate shipments without limitation on quantities and
Teletrac is owed to payment terms as specified in Paragraph 3.3 above.
Shipment dates are conditional on Teletrac complying on time with payment terms
of paragraph 3.3 above.
4.2 LATE DELIVERIES. Micronet acknowledges and agrees that time is of the
essence in shipment of the Terminals and Teletrac shall suffer severe damages if
conforming Terminals are not shipped in accordance with the Shipment schedule.
The parties recognize that the full impact of such a breach would be very
difficult to assess and it would be difficult to fix the actual amount of
damages. Therefore to avoid possible disputes the parties agree that if the
shipment schedule slips by more than 15 working days due to Micronet's failure
to ship conforming Terminals, a late charge of U.S. $**** per terminal per
working day shall be imposed until the breach is cured; provided, however,that
the late charges for orders shipped under the Initial Order shall not exceed
$****.
The late charge will be invoiced by Teletrac and paid by Micronet within 30
calendar days of date of invoice. If not paid by Micronet, the amount shall be
applied against monies owed for terminals.
The amount established under this paragraph for liquidated damages represents a
reasonable attempt by the parties to state an amount that bears a reasonable
relationship to actual damages and does not constitute a penalty.
4.3 RESCHEDULING SHIPMENT DATES
Teletrac allows Micronet to accelerate shipment dates and to deliver
Teletrac bigger quantities than those stipulated in Paragraph 4.1 above.
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4.4 FOB POINT. All Terminals are F.O.B Ben-Gurion Airport, Israel, unless
Teletrac notifies Micronet that Terminals are to be sent by ship rather than
air. Shipment address is Teletrac location at 7391 Lincoln Way, Garden Grove,
California 92641.
4.5 TITLE, RISK OF LOSS, INSURANCE. Title to the Terminals and risk of loss or
damage shall pass from Micronet to Teletrac upon Micronet's delivery to the
carrier at the F.O.B. point.
4.6 METHOD OF SHIPMENT. Micronet shall at its sole expense, provide for all
crating, packaging and packing in shipping containers that are designed to
provide adequate protection for the Terminals during shipping. Each Terminal is
to be bundled with its necessary bracket and screws and washers, appropriately
protected. Terminals shall be packaged in bulk in quantities of up to 50.
5. WARRANTY AND SERVICE TERMS.
5.1 WARRANTY TERMS. Micronet hereby warrants the Terminals to be in full
compliance with the Specifications and to be free from defects in workmanship
and materials (the "Warranty") for the shorter of two years from the date of
arrival at Teletrac's facility or one year after the Terminals have been
delivered by Teletrac to a third party customer ("the warranty period").
Teletrac will provide Micronet with monthly reports containing the serial
numbers of all terminals delivered to customers during the preceding month.
Micronet also warrants the merchantability and fitness for use of the
terminals. Terminals that are repaired or replaced during the Warranty Period
shall be warranted for the longer of the period of time remaining under the
original warranty period or 90 working days. Micronet hereby (a) consents to
Teletrac's right at Teletrac's option to assign the warranty, or the
remaining portion thereof, to Teletrac's customers, and (b) agrees to perform
the obligations described in this paragraph 5 for the benefit of such
customers. During the Warranty Period Micronet shall bear all out of pocket
costs to repair or replace defective Terminals, including, without
limitation, all costs of returning the Terminals to Micronet and shipping
repaired or replaced Terminals to Teletrac.
5.2 PROCEDURES. Micronet shall, at its cost, manufacture and ship to Teletrac,
with the first shipment, **** additional terminals. These along with the ****
approved test units will serve as "Spare Terminals". Teletrac shall as
necessary, replace defective Terminals with Spare Terminals, or replace parts
from the Spare Terminals, accumulating the defective Terminals until the earlier
of (a) 10 defective Terminals are being held, or (b)
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
3 months have passed since Teletrac's last shipment of defective Terminals to
Micronet. Teletrac will then notify Micronet by FAX of the number of defective
Terminals it will ship to Micronet. Within 3 working days of receipt of
Teletrac's FAX stating the number of defective Terminals being shipped, Micronet
shall (a) provide Teletrac a Return Material Authorization ("RMA") number by FAX
and (b) ship to Teletrac's California facility an equal number of replacement
Terminals to be used as Spare Terminals. Spare Terminals will not be used for
any purpose other than as replacement for defective Terminals. The procedures
described in this paragraph shall apply to service during the Warranty and
thereafter, except that post-warranty repairs will be subject to the charges
described in paragraphs 5.5 and 5.6 below. RMA numbers must be used in all
correspondence with Micronet and must be clearly marked on all packages and
boxes shipped to Micronet. Defective Terminals shall be sent to:
MICRONET LTD
7 HASHALOM ROAD
TEL-AVIV, ISRAEL 67892
Or if after May 1st 1996 to:
MICRONET LTD
IRIS BUILDING, 27 HAMETZUDA ST
AZUR, ISRAEL 58001
5.3 TIME OF REPAIR OR REPLACE. If the number of defective Terminals exceeds
the number of Spare Terminals held by Teletrac, the additional defective
Terminals shall be repaired or replaced by Micronet within 14 working days, plus
transit time from Micronet to Teletrac, from the date the defective Terminals
are delivered to Micronet. Micronet acknowledges and agrees that time is of the
essence in Teletrac's receipt of repaired or replaced Terminals.
5.4 FAILURES. The failure rate will be considered too high if it exceeds any
of the following: (a) ****% of the units in a single shipment fail the
acceptance tests; (b) ****% (cumulative) delivered within a 12 month period
fail the acceptance tests; or (c) ****% of the units delivered to customers
and in warranty do not function in full compliance with the specifications.
Malfunctions falling under the limitations in section 5.8 shall not be
counted as failures. If the failure rate is too high Micronet shall use its
best efforts to make required engineering or production changes as promptly
as possible to prevent the continued occurrence of such failures. Teletrac
may require a total recall of Terminals if such step is appropriate.
Micronet shall
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not be liable for consequential damages or lost profits or loss of business
opportunity by a third party customer.
5.5 POST-WARRANTY REPAIR. For 12 months following the termination of the
Warranty Period, Terminals shall be repaired for U.S. $**** per hour. Parts
shall be billed at Micronet's then prevailing rates. After this 12 month
period, parts and labor shall be charged at Micronet's then prevailing rates,
not to exceed the annual increase in the U.S CPI over the prior 12-month period.
Repaired Terminals shall be in full compliance with the Specifications and will
be free from defects in material and workmanship for 90 working days from the
date the repaired Terminals or Replacement Terminals have been delivered to
Teletrac or to Teletrac's customer.
5.6 FREIGHT AND OTHER COSTS AFTER WARRANTY PERIOD. After the Warranty period,
Teletrac shall bear all costs of shipping defective Terminals to Micronet and
cost of returning the repaired or replaced Terminals to Teletrac or Teletrac's
customer. Teletrac is responsible, on its own or through a qualified
independent contractor, for installation, deinstallation, and reinstallation of
all Terminals after the Warranty Period.
5.7 CONTINUING AVAILABILITY AND CORRECTIONS. Micronet shall, for a period of
five years from the effective date of this Agreement, maintain a repair facility
in Tel-Aviv or another location that is no more costly to ship to and will
require no longer transit periods than the Tel-Aviv facility and shall for the
same period, maintain service and repair capability, including spare parts
availability. Upon the termination of the Warranty Period, Micronet shall, at
its cost, perform the following services for a period of two years and six
months from the effective date of this Agreement: (a) correct any original
design or manufacturing defects that were not detected prior to shipment of the
production Terminals if such defects can be corrected on a reasonable basis; and
(b) correct any firmware defects within 30 days of notification of such defects.
Micronet shall, for a period of 5 years from the effective date of this
agreement, correct other defects in the Terminals (including the firmware) and
work with Teletrac on modifications and enhancements to the design and
performance of the Terminals (including the firmware) at the presently existing
hourly rate for Micronet's personnel, plus an annual percentage increase equal
to the increase in the U.S. CPI over the prior 12-month period. The terms of
this Paragraph 5 shall survive the termination of this agreement.
5.8 LIMITATIONS ON WARRANTY. This warranty shall not apply to Terminals which
have been subject to accident, improper storage, mishandling, unauthorized
alteration, misuse, vandalism, neglect or which have not been properly installed
or maintained.
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6. TELETRAC'S NAME AND TRADE MARKS.
Micronet shall not print or use the Teletrac name, logo, or other trade marks,
service marks, trade names, or similar indicia which Teletrac owns or becomes
licensed or sub-licensed to use (the "Teletrac Marks"). Micronet acknowledges
that Teletrac is the owner of the Teletrac Marks and that Micronet has no
interest in or right to use the Teletrac Marks.
7. NO CONSEQUENTIAL DAMAGES.
Without affecting Micronet's right to claim ordinary damages for Teletrac's
breach hereunder, in no event shall Teletrac be liable for incidental,
consequential or special damages, including, without limitation, frustration of
economic or business expectations, loss of profits, or loss of sales, arising
under or related to this Agreement or by reason of Teletrac's purchase or
failure to purchase Terminals hereunder.
8. INDEMNIFICATION
8.1 MICRONET'S INDEMNIFICATION FOR ACTIONS. On demand, Micronet shall
indemnify, defend and hold harmless Teletrac and each corporation, partner,
affiliate, subsidiary, parent, joint venture, officer, agent, employee,
director, shareholder, representative, successor and assign of Teletrac
(collectively, the "Indemnified Teletrac Parties") from and against all claims,
liabilities, obligations, damages, losses, deficiencies, costs, payments and
expenses (including, without limitation, court costs and reasonable attorney's
fees), lawsuits, actions and other proceedings, judgments and awards
(collectively, "Claims") including without limitation claims of personal injury
and death (a) to the extent that such Claims result from or arise directly or
indirectly, out of any act or omission of Micronet, or Micronet's agents or
employees, in connection with this Agreement or services provided hereunder, and
(b) any Claims that arise out of the failure of Micronet's Terminals, including,
without limitation, Claims of product liability, strict liability, design
defect, or third party Claims of breach of Warranty (collectively, "Product
Claims"); provided, however, that Micronet shall not indemnify Teletrac for
Claims that arise out of the failure of Teletrac's installation, radiolocation
system or services.
8.2 TELETRAC'S INDEMNIFICATION. On demand, Teletrac shall indemnify, defend
and hold harmless Micronet and each corporation, partner, affiliate, subsidiary,
parent, joint venture, officer, agent, employee, director, shareholder,
representative, successor and assign of Micronet from and against all Claims,
including, without limitation, Claims of personal injury and death (a) to the
extent that such Claims result from or arise,
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to a Request for Confidential Treatment.]
directly or indirectly, out of any act or omission of Teletrac, or Teletrac's
agents or employees, in connection with this Agreement or services provided
hereunder; provided, however, that Teletrac shall not indemnify Micronet for
Product Claims, or Claims that arise out of the failure of Micronet's Terminals.
8.3 PROPRIETARY RIGHTS INDEMNIFICATION. On demand, Micronet shall indemnify,
defend and hold harmless, Teletrac from and against any Claims resulting or
arising from or in connection with the violation or infringement of any third
party's trade secrets, proprietary information, trademarks, copyrights or patent
rights ("Proprietary Rights Claims") in connection with services, work or
Terminals provided by Micronet under this agreement; provided, however, that
Micronet shall not be required to indemnify Teletrac against any Proprietary
Rights Claims from third parties arising out of Specifications provided by
Teletrac. If Teletrac is enjoined or otherwise prevented by any administrative
or legal order from using or selling the Terminals due to such a violation or
alleged violation, Micronet shall take such action as is necessary to clear the
infringement claim, as follows:
(a) Replace the Terminals, without additional charge, with a compatible,
functionally equivalent and non infringing product;
(b) Modify the Terminals to avoid the infringement;
(c) Obtain a license for Micronet's continued use of the Terminals and pay any
fee required for such license; or
(d) If none of the foregoing alternatives is available despite Micronet's best
efforts, Micronet shall repurchase such Terminals from Teletrac at the price
Teletrac paid Micronet, and Teletrac shall sell such Terminals to Micronet at
such price, without waiving any other rights, remedies or claims for damages
Teletrac may have at law, in equity or under this agreement.
8.4 SURVIVAL. The parties' obligations to indemnify as described in this
Paragraph 8 shall survive the expiration or termination of this Agreement by
either party for any reason.
8.5 COOPERATION. Each party agrees to promptly notify the other of any Claim
and to cooperate fully in the defense thereof or any negotiations related
thereto, and neither shall enter into any settlement without the consent of the
other party.
9. RIGHTS AND OBLIGATIONS
9.1 NON INFRINGEMENT. Micronet represents that it owns or has the right to use
(and Teletrac hereby grants to Micronet the
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
right to use, for the purpose specified herein, Teletrac's Specifications) all
technology, know how, copyright, trademark, patent, and intellectual property
rights used in producing the Terminals or as are otherwise necessary to
consummate the transactions contemplated by this Agreement.
9.2 MICRONET'S DESIGN RIGHTS.
(a) Teletrac shall not duplicate or reverse engineer Micronet's proprietary
circuitry, firmware, software, or circuit diagrams used in the design and
manufacture of the Terminals ("Micronet's Design"). Micronet acknowledges that
Micronet's Design does not include Teletrac's Specifications, which are the
proprietary property of Teletrac.
(b) Teletrac shall not provide a Terminal to any third party manufacturer for
purposes of duplicate or reverse engineering Micronet's Design. Micronet
acknowledges that Teletrac has no control over the conduct of any third party
manufacturer or other party and is not liable therefor.
(c) Teletrac shall not provide to a third party manufacturer copies of
correspondence or documentation written or prepared by Teletrac and provided to
Micronet in connection with Micronet's design. Teletrac may distribute its
Specifications.
(d) Teletrac shall not provide to a third party manufacturer copies of
correspondence or documentation (including mock-ups, designs, diagrams, charts,
and reports) written or prepared by Micronet and provided to Teletrac in
connection with Micronet's Design; provided, however, that Teletrac may
distribute materials intended for use by installers, service providers, and end
users (including service manuals installation documents, and manuals intended
for product and users).
10. INSURANCE. At all times during the term of this agreement, Micronet, at
its sole expense, shall maintain in full force and effect a policy of commercial
general liability insurance, including coverage against claims for Bodily
Injury, Personal Injury, Property Damage and Advertizing Injury caused by or
occurring in conjunction with the operation of Micronet's business including all
activities authorized or required to be performed under this Agreement. Such
insurance coverage shall designate ATT and its agents, employees, general
partners, officers and directors as Additional Insureds and shall be maintained
under one or more policies of insurance from an insurance company(s)
satisfactory to Teletrac and shall provide a minimum liability protection of
$**** per occurrence for bodily and personal injury or death, $**** per
occurrence for property damage and $**** per occurrence for product liability.
Micronet
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shall give Teletrac prompt written notice of any material modification,
cancellation/ or non-renewal of any insurance required by this agreement.
Teletrac may terminate this Agreement immediately without notice to Micronet if
any insurance required by this Agreement is canceled.
11. NOTICES
Any notice, request or demand required to be made or given hereunder by any
party must be in writing and shall be deemed to be duly given or made one day
after it has been sent by air courier; upon telephonic confirmation of receipt
if sent by fax; or ten days after it was mailed if mailed by prepaid, registered
or certified mail addresses of the parties set forth below, or at such other
address as has been given by either party to the other in writing in accordance
with the terms of this Agreement.
TELETRAC INC.
7391 Lincoln Way
Garden Grove, CA 92641
MICRONET LTD
7 HASHALOM ROAD
TEL-AVIV, ISRAEL 67892
Or if after May 1st 1996 to:
MICRONET LTD
IRIS BUILDING, 27 HAMETZUDA ST
AZUR, ISRAEL 58001
12. TERMINATION
This agreement may be terminated as set forth below:
12.1 TERMINATION WITHOUT CAUSE. Following the fulfillment of Teletrac's
obligations pertaining to the Initial Order, Teletrac may terminate this
Agreement, without cause, and cancel any orders for any additional Terminals
that have been ordered but not shipped, upon 90 days' prior written notice.
12.2 FOR BREACH. The appropriate party may, by written notice to the other,
terminate this Agreement without prejudice to any rights that it may have,
whether under the provisions of this agreement (including Teletrac's rights to
liquidated damages, as set forth in Paragraphs 2.4 and 4.2), in law or in
equity, or otherwise, upon the occurrence of any of the following events:
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(a) By Teletrac, if Micronet fails to meet any dates set forth in the Shipment
Schedule, following 30 days written notice and opportunity to cure within such
notice period; or
(b) By Teletrac, if (a) ****% or more of the terminals received in a single
shipment or (b) ****% (cumulative) delivered within a 12 month period or (c)
****% of the units delivered to customers and in warranty; do not function in
substantial compliance with the Specifications, following 30 days' written
notice and opportunity to cure within such notice; or
(c) By Teletrac, if a government agency with jurisdiction over the operation,
function, production or sale of the Terminals or over Teletrac's services or
operations (by way of an example, but not limited to, the Federal Communication
Commission) has determined that the Terminal is defective; or
(d) Except for the breaches described in subparagraphs 12.2(a), (b) or (c), by
either party, if there is a material breach or default in the other's
performance of its obligations hereunder, following 30 day's written notice and
opportunity to cure within such notice period; or
(e) By either party, if the other party files or has filed against it a
petition under any bankruptcy or insolvency act or has appointed a trustee,
receiver, or liquidator of its properties.
13. ARBITRATION. All disputes that may arise in connection with this Agreement
that are not adjusted by the parties themselves shall be submitted to binding
arbitration in Los Angeles, California under the rules and regulations then
prevailing of the American Arbitration Association. Teletrac shall select one
arbitrator, Micronet shall select one arbitrator, and the two arbitrators so
selected shall select a third arbitrator. All costs of arbitration, including
each party's attorneys' fees shall be paid by the non-prevailing party. The
award shall be binding and conclusive on each of the parties and may be used on
or enforced by the party in whose favor it runs in a court of competent
jurisdiction in Los Angeles, California (including the United States District
Court for the Central District of California). Pending resolution of any
dispute , if requested in writing by Teletrac, Micronet shall proceed diligently
with the performance of its obligations hereunder, including the shipment of
Terminals, and Teletrac shall make payment therefor on the basis set forth in
the applicable paragraphs of this agreement.
14. FORCE MAJEURE.
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to a Request for Confidential Treatment.]
If an event of force majeure, including but not limited to acts of God, flood,
earthquake, landslide, fire, war, blockage, requisition of vessel, or aircrafts,
explosion, governmental request, order or regulations or any other unforeseeable
causes or circumstances beyond the control of Micronet, and without its fault or
negligence, directly affects the ability of Micronet to manufacture and ship the
Terminals then Micronet shall not be liable in damages for its delay in
performing its obligations hereunder, on a day for day basis as to the days of
force majeure; provided however, that Micronet shall promptly fulfill its
obligations under this agreement after the force majeure ceases.
If an event of force majeure occurs which will prevent Micronet from shipping
the Terminals for more than 120 calendar days, Teletrac shall have the automatic
and immediate right to obtain a complete and accurate set of design and
production technology documents sufficiently detailed to enable a third party to
manufacture the Terminals. ("Technology Documents"). The Technology Documents
shall be revised and updated as changes are made to the Terminals or the
manufacturing process during the term of this agreement.
15. MISCELLANEOUS PROVISIONS
15.1 RELATIONSHIP OF PARTIES. This agreement does not constitute
partnership or joint venture between Teletrac and Micronet. Both parties
acknowledge that the relationship of Micronet to Teletrac shall be one of an
independent contractor.
15.2 GOVERNING LAW. This agreement and any dispute or claim arising from
this Agreement shall be governed, construed and interpreted in accordance
with the laws of the state of California without regard to any rule of
conflicts of law.
15.3 JURISDICTION. The parties hereby consent to the personal
jurisdiction of an arbitrator or court located in Los Angeles, California and
of the United States District Court for the Central District of California.
It is the specific intent of the parties that this Agreement not be construed
in accordance with or governed by the laws of Israel and that Israeli courts
have no jurisdiction over this Agreement or any dispute or claim arising from
this agreement except as may be necessary to enforce an award of the
arbitrator or court. The parties expressly agree that the United Nations
Conventions on Contracts for the International Sale of Goods and the Hague
Convention shall not apply to the construction or interpretation of this
Agreement or affect any of its provisions.
Initials /s/ AH Initials
----------------- ----------------
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to a Request for Confidential Treatment.]
15.4 ASSIGNMENT. Micronet shall not assign, transfer, or sell any of the
rights of Teletrac hereunder without the prior permission of Teletrac.
15.5 NO WAIVER. Failure of Teletrac to insist upon strict performance of
any of the terms, conditions, provisions, or specifications within this
Agreement, or the delay in exercising any of its remedies, shall not
constitute a waiver of such terms, conditions, provisions, or Specifications
or a waiver of any default.
15.6 SURVIVAL OF OBLIGATIONS. Obligations under this Agreement which by
their nature would continue beyond termination or expiration of this
Agreement, including by way of illustration only and not limitation,
paragraphs related to Warranty and Indemnification, shall survive termination
or expiration of this Agreement by either party for any reason.
15.7 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties as to the subject matter of this
Agreement and supersedes all previous written or oral communications,
representations or agreements. This Agreement may not be modified except by
written instrument executed by both parties.
15.8 REMEDIES. All remedies available to either party for breach of this
Agreement are cumulative and may be exercised concurrently or separately, and
the exercise of any one remedy shall not be deemed an election of such remedy
to the exclusion of other remedies.
15.9 HEADINGS. The paragraph headings used in this Agreement are for
convenience of reference only and shall not in any way limit or amplify the
terms and provisions hereof, nor enter into the interpretation of this
Agreement.
15.10 BINDING AGREEMENT. The persons executing this Agreement on behalf
of the parties have been duly and validly authorized to do so, and this
Agreement is a valid and binding obligation of the parties.
15.11 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which shall constitute one
and the same Agreement.
15.12 SEVERABILITY. If any terms of this Agreement shall be unlawful,
void or unenforceable, such term shall be deemed omitted to the extent
prohibited or invalid, but the remainder of this Agreement shall not be
invalidated and shall be given effect as far as possible. If any term hereof
is found by a court or
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to a Request for Confidential Treatment.]
arbitrator to be overbroad, such term shall be limited to the extent required to
make it enforceable.
15.13 DOLLARS. All money amounts specified in this Agreement are in U.S
dollars.
Executed as of the day and year first above written.
Teletrac Inc.
By: Steven D. Scheiwe
-------------------------------
Title: Secretary
-----------------------------
Signature: /s/ Steven D. Scheiwe
-------------------------
Micronet Ltd.
By: Eli Nahum
--------------------------------
Title: Vice President Engineering
-----------------------------
Signature: /s/ Eli Nahum
-------------------------
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
- --------------------------------------------------------------------------------
MESSAGE DATA TERMINAL (MDT)
NET-950
SPECIFICATIONS
VER. E, FEBRUARY 4, 1996
TELETRAC, INC. PROPRIETARY
- --------------------------------------------------------------------------------
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
MDT Specification Revision E February 1, 1996
1. SCOPE
-----
This document defines the specifications of the Message Data Terminal (MDT)
to be integrated with the Teletrac system Vehicle Location Units (VLUs).
****
[17 pages omitted and filed separately with the Commission pursuant
to a request for confidential treatment.]
2
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Exhibit 10.4
SEPTEMBER 16 1996
REF: 1345
AMENDMENT FOR:
Mobile Data Terminal- Purchase Agreement
The following will amend the existing agreement, between Teletrac Inc. and
Micronet Ltd for the purchasing of Mobile Data Terminals as originally signed by
both parties on February 8th 1996.
This amendment is in pursuance of Teletrac official letter dated September 12th
1996 and signed by Teletrac's Vice President for Finance Mr. Alan B Howe
applying for additional **** MDTs to be supplied on equal quarterly basis.
This amendment will become effective and part of the existing agreement between
Teletrac Inc. and Micronet upon authorized signatures by both parties.
Teletrac Inc. Micronet Ltd.
By: Steve Scheiwe By: Eli Nahum
---------------------- ------------------------
Title: Secretary Title: Vice President Engin.
------------------- ---------------------
Signature: /s/ Steve Scheiwe Signature: /s/ Eli Nahum
----------------- -----------------
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
1. AGREEMENT TO PURCHASE AND SELL.
1.1 SALE OF PRODUCTS. "Teletrac shall purchase from Micronet a minimum of ****
Terminals and Micronet shall sell to Teletrac a minimum of **** Terminals,
on the terms set forth herein and on the attached purchase order # ______"
The rest of this paragraph remains unchanged.
1.2 INITIAL ORDER. "Teletrac hereby places a firm and irrevocable order for
**** Terminals from Micronet (the "Initial Order"), all of which will be
purchased in accordance with the terms and conditions of the existing
agreement from February 8th 1996 and its amendments from September 16th
1996."
1.3 "INCREMENTAL ORDERS. Within the time period of the Initial Order for ****
Terminals, ordered hereunder, incremental orders for additional Terminals
shall be in writing and shall specify arrival dates of not less than 12
weeks from delivery of the order to Micronet. All incremental orders shall
be for at least **** terminals per order and shall be filled in accordance
with this amendment and the other terms of the existing agreement.
SUBSEQUENT ORDERS After the Initial Order for **** Terminals, ordered
hereunder, have been purchased and supplied, subsequent orders for
additional Terminals shall be in writing and shall specify arrival dates of
not less than 12 weeks from delivery of the order to Micronet. Micronet
may, by written notification delivered to Teletrac within 10 working days
of Micronet receipt of a subsequent order, elect not to fill the subsequent
order. If Micronet does not notify Teletrac of its election to not fill
the subsequent order, the order shall be filled as described in the
existing agreement. All subsequent orders shall be for at least ****
Terminals per order.
The rest of this paragraph remains unchanged.
3. PAYMENT
3.1 PRICE
"The purchase price for each Terminal (including bracket and screws) shall
be:
$ U.S $**** (****) per unit (the "Purchase Price") for an order of ****
Terminals.
and
$ U.S $**** (****) per unit (the "Purchase Price") for an order of ****
Terminals. Additional orders for Terminals within the time period of such
an order but in lower quantities as specified in paragraph 1.3 shall still
be priced at $**** Ea."
The rest of this paragraph remains unchanged.
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
3.3 TERMS OF PAYMENT
Teletrac, by Bank wire transfer, shall make a down payment to Micronet's
account in the amount of U.S. $**** (****) within 4 business days of the
signature of this amendment. Micronet shall invoice Teletrac for this
amount. The down payment shall be applied towards the last shipment
payment.
Incremental orders shall require ****% down payment to be credited upon
payment of balance due prior to actual delivery.
Payments in full for all shipments, as per paragraph 4 below less down
payment credited to last shipment will be made by wire transfer immediately
prior to each delivery."
4. SHIPMENT
4.1 SHIPMENT TERMS. Unless Teletrac notifies Micronet otherwise, as provided
in Paragraph 12.2, Teletrac hereby orders **** Terminals to be shipped to
Teletrac's facility described in paragraph 4.3, on the dates set forth in
the following Shipment Schedule:
- ---------------------- --------------------- ------------------------------
- ---------------------- --------------------- ------------------------------
Number of Terminals Terminal Type Date shipped to Teletrac
Facility
- ---------------------- --------------------- ------------------------------
**** Net-950 January 1 st 1997
- ---------------------- --------------------- ------------------------------
**** Net-950 April 1 st 1997
- ---------------------- --------------------- ------------------------------
**** Net-990 July 1 st 1997
- ---------------------- --------------------- ------------------------------
**** Net-990 October 1 st 1997
- ---------------------- --------------------- ------------------------------
- ---------------------- --------------------- ------------------------------
The rest of the paragraph remains unchanged.
2
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Exhibit 10.5
ETAK, INC.
THE DIGITAL MAP COMPANY
VALUE ADDED RESELLER
LICENSE AGREEMENT
TELETRAC, INC.
AGREEMENT NO. VAR-96-023
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
TABLE OF CONTENTS
ARTICLE 1: PARTIES, BACKGROUND AND DEFINITIONS...................... 1
1.1 Parties to Agreement.......................................... 1
1.2 Background.................................................... 1
1.3 Definitions................................................... 1
1.4 Escrow Agreement.............................................. 2
ARTICLE 2: APPOINTMENT OF TELETRAC AND GRANT OF LICENSE........ 2
2.1 Appointment................................................... 2
2.2 Grant of Development License.................................. 2
2.3 Grant of Right to Sublicense.................................. 2
2.4 Sublicenses................................................... 3
2.5 Authorized Usage.............................................. 3
2.6 Unauthorized Usage............................................ 3
2.7 Ownership..................................................... 3
2.8 Authorized Type of Hardware and Environment................... 3
2.9 Object Code and Data Only..................................... 4
2.10 Copyrights.................................................... 4
2.11 Duplication of Products....................................... 4
2.12 Source Code................................................... 5
ARTICLE 3: ORDERS AND PAYMENT TERMS............................ 7
3.1 License Fees, Royalties....................................... 7
3.2 Shipment of Licensed Products................................. 7
3.3 Order Procedure............................................... 7
3.4 Shipment Terms................................................ 7
3.5 Payment Terms................................................. 7
ARTICLE 4: PROTECTION OF ETAK'S INTELLECTUAL PROPERTY.......... 8
4.1 Confidentiality of the Licensed Products...................... 8
4.2 Assistance.................................................... 8
ARTICLE 5: DEMONSTRATION PRODUCTS.............................. 8
5.1 Demonstrations................................................ 9
5.2 Demonstration and Other No-Charge Copies...................... 9
ARTICLE 6: WARRANTIES, UPDATES AND DISCLAIMER THEREOF.......... 9
6.1 Limited Warranty By Etak...................................... 9
6.2 Teletrac Express Warranty..................................... 10
(i)
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
ARTICLE 7: INDEMNIFICATION.......................................... 10
7.1 Indemnification by Etak....................................... 10
7.2 Indemnification by Teletrac................................... 11
ARTICLE 8: LIMITATION ON ETAK LIABILITY............................. 12
ARTICLE 9: RECORDS, REPORTS AND AUDITS.............................. 13
9.1 Required Records.............................................. 13
9.2 Audit......................................................... 13
ARTICLE 10: TERM AND RENEWAL......................................... 13
ARTICLE 11: TERMINATION, EFFECTS THEREOF AND REMEDIES................ 13
11.1 Termination Events........................................... 13
11.2 Survival..................................................... 14
11.3 Return of Information........................................ 14
ARTICLE 12: GENERAL PROVISIONS....................................... 14
12.1 Final Agreement; Status of Former Agreements................. 14
12.2 Governing Law; Jurisdiction.................................. 14
12.3 Product Changes.............................................. 15
12.4 Arbitration.................................................. 15
12.5 Notices...................................................... 15
12.6 Severability................................................. 15
12.7 No Waiver.................................................... 15
12.8 Attorney Fees................................................ 16
12.9 Assignment................................................... 16
12.10 Force Majeure................................................ 16
12.11 Compliance with Laws......................................... 17
12.12 Government Rights............................................ 17
12.13 No Joint Relationship........................................ 17
(ii)
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
LIST OF EXHIBITS
Exhibit A-1: Licensed Product and Services
Exhibit A-2: Derivative Product, Schedule of Fees, and Royalties
Exhibit B: Etak End User License Agreement
Exhibit C: Computer Configurations on Which Teletrac May Use the Products
Exhibit D: Preferred Escrow Agreement
Exhibit E: Source Code Addendum
(iii)
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
AGREEMENT NO. VAR-96-023
ARTICLE 1: PARTIES, BACKGROUND AND DEFINITIONS
1.1 PARTIES TO AGREEMENT. This Etak, Inc. Value Added Reseller Agreement
(the "Agreement") is entered into by and between Etak, Inc., a California
corporation ("Etak") and Teletrac, Inc., a Delaware corporation ("Teletrac"),
and is effective as of the date countersigned by Etak below.
1.2 BACKGROUND. Etak set forth on Exhibit A-1 as it
develops and distributes digital may be amended.
geographic data, geographic
access software, navigation (b) "Products" means
products, and related materials. Licensed Products and Derivative
VAR wishes to obtain a Products.
non-exclusive, object code only
license to combine certain of (c) "Teletrac Products"
Etak's products with VAR's own means all software, data,
products to create a derivative documentation and related
product which will be sublicensed materials that: (i) are or were
by VAR to End Users. created by Teletrac or by a party
other than Teletrac and licensed
Etak and Teletrac enter or purchased by Teletrac, and
into this Agreement for the (ii) in either case the party
purpose of superseding and creating them did so without
replacing all former Agreements infringing on any of Etak's
and Amendments with this intellectual property rights
Agreement, including the Escrow arising from contract or law.
Agreement Subscription Letter
dated January 14, 1992. (d) "Derivative
Products" means all works
1.3 DEFINITIONS. In this acquired by or created by or for
Agreement, the following are Teletrac which are based upon or
defined terms: incorporate all or part of one or
more Licensed Products, such as a
(a) "Licensed Products" revision, modification,
means all software ("Software"), translation, abridgment,
data ("Data"), documentation and condensation, expansion,
related materials as listed on collection, compilation or any
Exhibit A-1 hereto, as amended other form in which such Licensed
from time to time by the mutual Products may be recast,
consent of the parties. Teletrac transformed or adapted.
shall not be entitled to receive,
Etak shall not be obligated to
deliver, and Teletrac shall
refuse delivery of, any items
other than those expressly
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
(e) "End User" means that those employees and
any third party who is granted contractors before obtaining the
the right to use any of the Products have executed
Products or receives information confidentiality, non-disclosure
as a result of the use of the and proprietary rights agreements
Products. consistent with the provisions of
this Agreement, and provided
1.4 ESCROW AGREEMENT. further that those contractors
Concurrently herewith, Etak shall are not competitors of Etak.
deliver a Preferred Escrow Teletrac shall not be liable in
Agreement in the form attached money damages to Etak for
hereto as Exhibit D to be disclosing Licensed Products to a
executed by Teletrac and returned contractor who is a competitor of
to Etak for further processing, Etak, provided that Teletrac
prior to its effectiveness. obtains a representation and
Teletrac shall pay all fees warranty from each contractor
associated with this escrow signing a contract with Teletrac
account. after the date of this Agreement
stating that the contractor is
ARTICLE 2: APPOINTMENT OF not a competitor of Etak;
TELETRAC AND GRANT nevertheless, Etak shall be
OF LICENSE entitled to injunctive relief
against Teletrac and such
2.1 APPOINTMENT. Etak competitor. Upon request Etak
hereby appoints Teletrac, on a will advise Teletrac whether a
non-exclusive basis, and Teletrac particular company is considered
accepts such appointment as an a competitor of Etak.
authorized Etak Value Added
Reseller. 2.3 GRANT OF RIGHT TO
SUBLICENSE. Etak hereby grants
2.2 GRANT OF DEVELOPMENT to Teletrac the non-exclusive,
LICENSE. Etak hereby grants to non-transferable right to
Teletrac a non-exclusive, sublicense the Products to End
nontransferable, license to use Users. Etak also grants to
each Licensed Product for the Teletrac the right to duplicate
limited purpose of in-house Products for distribution to End
development by Teletrac Users, provided that (i) Teletrac
(including through the use of has paid to Etak all fees and
outside contractors, provided royalties due in accordance with
that said outside contractors Exhibit A; and (ii) Teletrac
have executed a nondisclosure and complies with all provisions of
confidentiality agreement in this Agreement. In marketing
accordance with section 4.1 Products to End Users, Teletrac
hereof), of Derivative Products. shall have the right to use third
Teletrac may create and use a parties to procure End Users, but
maximum of **** copies for in all
in-house development by Teletrac.
"In-house development" means use
as necessary within the scope of
this Agreement by employees and
contractors with a need to know
to enable Teletrac's authorized
uses, provided
2
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
cases Teletrac itself must 2.6 UNAUTHORIZED USAGE.
directly sublicense the Products Teletrac shall not use the
to End Users; provided, however, Products to provide a service or
that Teletrac shall have the for any other use involving the
right to distribute the Products processing of data of other
through authorized resellers, persons or entities, except that
distributors and agents of Teletrac is permitted to use the
Teletrac provided that all such Products to communicate the
resellers, distributors and location of the Teletrac
agents enter into sublicense and transceiver or Teletrac icons to
distribution agreements with the End User, the End User's
Teletrac on terms reviewed and designee, a Teletrac subscriber,
approved by Etak, including a Reseller, or a recipient of a
without limitation provisions television news broadcast. The
protecting Etak's intellectual "Teletrac transceiver" means
property rights in accordance Teletrac radiolocation software
with this Agreement. employing the **** through ****
mHz frequency range only in the
2.4 SUBLICENSES. Teletrac United States and the Teletrac
and/or its authorized resellers, network. "Teletrac icons" means
distributors and agent shall points of interest selected by
deliver the Products to the End Teletrac or the End User.
User in shrinkwrapped form with a Teletrac shall not use the
shrinkwrap end user license which Products for any purpose except
conforms in all material respects as expressly authorized by this
to the Teletrac end user license Article 2. Teletrac shall not
agreement attached hereto as provide any Product(s) to any End
Exhibit B, or Teletrac may use an User, or any portion thereof,
agreement executed by the End except by tangible media. Except
User which agreement contains as specifically authorized in
substantially the same terms and this Article 2, Teletrac shall
conditions as Exhibit B; for not use the Products for any
either agreement, adjustments may other purpose.
be made as appropriate to reflect
various applications by the End 2.7 OWNERSHIP. This
Users as such applications are Agreement does not constitute a
permitted under this Agreement. transfer of any title or interest
in the Licensed Products, and
2.5 AUTHORIZED USAGE. Etak reserves all rights in the
Teletrac is authorized to use the Licensed Products not expressly
Products to communicate the granted to Teletrac by this
location of the Teletrac Agreement. Any portion of the
transceiver or Teletrac icons, as Licensed Products that is
defined in Section 2.6, to End modified or merged into another
Users via telephone lines, computer program by Teletrac,
including the BBS server or
password-enabled internet access,
or other wire or wireless means.
3
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
or is combined with other shall bear the same trademarks,
programs or data to form logos, copyright notices and
Derivative Products, shall proprietary legends as the
continue to be subject to the Licensed Product which Teletrac
provisions of this Agreement, and received from Etak, and Teletrac
Etak retains ownership of all shall not remove such notice or
such Licensed Products and all alter or augment it (except for
such portions. However, Teletrac adding Teletrac's own copyright
shall be owner of any item which notice for Teletrac Products
Teletrac demonstrates to be a delivered therewith).
Teletrac Product. Specifically, Teletrac shall
conspicuously display Etak's
2.8 AUTHORIZED TYPE OF copyright/restricted rights
HARDWARE AND ENVIRONMENT. notice and logo on the display
Teletrac may use or sublicense screen, in the code, in the
the Products on any type of manuals, and on the storage
hardware or environment, but medium for each Product, in
Etak's limited warranty for the accordance with reasonable
Products shall apply only to the written instructions from Etak.
type of hardware and environment
set forth in Exhibit C. 2.11 DUPLICATION OF PRODUCTS.
Teletrac shall not duplicate,
2.9 OBJECT CODE AND DATA manufacture, copy or reproduce
ONLY. This license from Etak is any Products, or any portion
for object code and data only. thereof, except as necessary for
Except as expressly permitted (i) internal use as expressly
herein, or in the source code permitted in this Article 2; (ii)
escrow agreement attached hereto distribution to its End Users as
as Exhibit E, Teletrac shall not part of a Derivative Product or
obtain access to or any use of in connection with the licensing
Etak source code, and Etak does of a Teletrac Product; (iii)
not grant (except to the extent back-up and archival purposes;
expressly set forth in section and (iv) one copy for each
2.12 of this Agreement) any Teletrac salesperson of the
rights whatsoever in Etak's database(s) included within that
source code. Teletrac shall not salesperson's assigned territory.
derive or attempt to derive the Under no circumstances shall
source code or structure of all Teletrac grant permission to any
or any portion of the Licensed third parties to duplicate,
Products by reverse engineering, manufacture, copy or reproduce
disassembly, decompilation or any any Products, or any portion
other means. thereof, and Teletrac's
agreements with third parties
2.10 COPYRIGHTS. The shall expressly prohibit such
Licensed Products are copyrighted dupli-
by Etak, and unauthorized copying
of the Licensed Products, or any
portion thereof, is expressly
prohibited. Teletrac shall
ensure that each copy of a
Product and any portion thereof
4
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
cation, manufacture, copying and od. Notwithstanding the
reproduction. However, Teletrac foregoing, Etak shall have no
shall be authorized to contract a obligation whatsoever to make any
third party vendor for volume corrections or changes to the
duplication purposes only, Source Code. Further, any
provided that vendor is support services regarding Source
contractually under a Code requested by Teletrac and
confidential/nondisclosure which Etak in its discretion
provision and shall be prohibited agrees to provide shall be paid
from using the Licensed for at Etak's then standard
Product(s) or Product(s) for any hourly engineering rates
other purpose. For purposes of (presently $**** per hour).
this Section 2.11, loading the
Product on a single central (c) Teletrac may also use
processing unit for permitted, the Source Code to create an
licensed use by an authorized End executable object code
User shall not constitute compilation under the operating
"duplication." system(s) as defined on
Attachment A of Exhibit E, or
2.12 SOURCE CODE. Etak has under any other operating system
provided to Teletrac a copy of Teletrac shall adopt in the
the source code for MapAccess future and that Etak approves in
libraries (the "Source Code") as writing. That object code
listed on Exhibit A-l. Except compilation shall be subject to
under the conditions expressly all terms and conditions
set forth in Exhibit E, Etak applicable to Source Code under
shall not be obligated to this Agreement. Etak shall have
deliver, and Teletrac shall not no obligation whatsoever, under
be entitled to receive source any circumstances, to assist
code for any other Licensed Teletrac in this compilation, and
Products. The Source Code has Etak makes no warranty or
been provided to Teletrac on the representation that such
following terms and conditions: compilation can be accomplished
at all or with any degree of
(a) ADDITIONAL RESTRICTIONS success. However, if Etak in its
FOR SOURCE CODE. The Source Code discretion chooses to provide
shall be subject to all terms and support services to Teletrac
conditions applicable to Licensed regarding the QNX project, or any
Products in this Agreement, and future project, Teletrac shall
shall also be subject to the pay for such services at Etak's
following additional restrictions: then standard hourly engineering
rates (presently $**** per hour).
(b) Teletrac may use the
Source Code for the purpose of (d) Except as expressly
analysis. Teletrac may request permitted in this section 2.12
Etak to make corrections or
changes to the Source Code at
Etak's then standard hourly
engineering rates (presently
$**** per hour) within a mutually
agreeable and reasonable time
peri-
5
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
and except under the conditions most confidential and sensitive
expressly set forth in Exhibit E, data, and shall indemnify and
Teletrac shall make no use of the hold harmless Etak from any
Source Code. Teletrac failure to do so.
specifically is prohibited from
creating any derivative products (h) Teletrac agrees that
of or from the Source Code, or only Teletrac's employees and
from modifying, altering or contractors having a need to know
correcting the Source Code, shall have access to any Source
except as necessary pursuant to Code in any form, and Teletrac
this section 2.12 and except agrees that it will implement
under the conditions expressly appropriate action by
set forth in Exhibit E. instruction, agreement or
otherwise with its employees and
(e) Only one copy of Source contractors permitted access to
Code may be in use, and that copy Source Code to satisfy its
shall be stored on a single CPU. obligations and restrictions
One additional copy of Source under this Agreement with respect
Code may be kept for archival to use, copying, modification,
purposes. Except as expressly nondisclosure, protection and
permitted above in this section security of Source Code.
2.12 (and except under the
conditions expressly set forth in (i) Teletrac agrees that
Exhibit E), Source Code shall not money damages are inadequate to
be copied, in whole or in part on protect Etak's rights under this
any medium. section 2.12 and that Etak shall
be entitled to specific
(f) Etak's copyright/ performance to protect its rights
proprietary notice shall be under this section 2.12, in
prominently included on the addition to any other remedies to
original and any and all copies which it may be entitled.
of the Source Code, and on the
medium on which Source Code is (j) SOURCE CODE IS PROVIDED
stored. "AS IS." ETAK MAKES NO EXPRESS
OR IMPLIED WARRANTY OF ANY KIND
(g) Teletrac acknowledges WITH REGARD TO THE SOURCE CODE,
that Source Code is the INCLUDING WITHOUT LIMITATION, THE
unpublished work of Etak and IMPLIED WARRANTIES OF
contains valuable trade secrets. MERCHANTABILITY AND FITNESS FOR A
Teletrac shall not publish or PARTICULAR PURPOSE. ETAK MAKES
permit others to publish Source NO REPRESENTATION OR WARRANTY
Code. Teletrac shall not THAT TELETRAC CAN SUCCESSFULLY
disclose Source Code to any USE SOURCE CODE. NO WARRANTY,
persons except as expressly INSTALLATION, TRAINING OR SIMILAR
authorized by this Agreement.
Teletrac shall take all
commercially reasonable steps to
ensure that the confidentiality
of the Source Code shall not be
compromised, at least consistent
with the precautions taken for
Teletrac's own
6
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
SERVICES WILL BE PROVIDED BY ETAK accordance with the Schedule of
FOR SOURCE CODE, ANY EXECUTABLE Fees set forth in Exhibit A-2.
OBJECT CODE, OR ANY APPLICATION
PROGRAM OR FILE AFFECTED BY THE 3.2 SHIPMENT OF LICENSED
SOURCE CODE. PRODUCTS. Etak or Etak's
designee shall ship to Teletrac
(k) TELETRAC ACKNOWLEDGES any Licensed Products ordered by
THAT MODIFICATIONS TO SOURCE Teletrac under this Agreement
CODE, OR USE OF ANY DERIVATIVE within a commercially reasonable
PRODUCT COULD ADVERSELY AFFECT time after receipt of Teletrac's
THE PERFORMANCE OF THE UNALTERED order therefor.
PORTION OF THE SOFTWARE, AND/OR
UNALTERABLY AND IRRETRIEVABLY 3.3 ORDER PROCEDURE. All
CORRUPT TELETRAC'S DATA. orders by Teletrac shall be
TELETRAC ASSUMES ALL SUCH RISK controlled by the terms and
AND HEREBY RELEASES ETAK FROM ANY conditions of this Agreement.
OBLIGATION OR LIABILITY ARISING Any proposed variation from or
THEREFROM. ETAK SHALL IN ITS addition to these terms and
DISCRETION MAKE THE FINAL conditions appearing on any
DETERMINATION AS TO THE CAUSE OF purchase order, invoice or other
SUCH DATA CORRUPTION OR ADVERSE document submitted by Teletrac or
SOFTWARE PERFORMANCE. Etak shall be null and void,
unless specifically accepted in a
(l) Teletrac agrees to writing signed by an authorized
indemnify and hold Etak harmless officer of Etak. Purchase orders
against any and all loss or are not valid until accepted in
damage in any way arising out of writing by Etak. Shipments will
or in connection with Source Code be scheduled by Etak only upon
furnished hereunder. receipt of a duly executed
purchase order from Teletrac and
(m) Except under the upon acceptance of the purchase
conditions expressly set forth in order by Etak.
Exhibit E, upon termination or
expiration of this Agreement for 3.4 SHIPMENT TERMS. All
any reason whatsoever, Teletrac Licensed Products licensed under
shall immediately return to Etak this Agreement shall be shipped
the original and all copies of F.O.B, Teletrac's destination
the Source Code, and any location, from a facility of
derivatives thereof, and shall Etak. Etak is responsible for
certify to Etak in writing that all shipping, insurance and
it has done so and that it shall related charges, and all risk of
make no further use of such damage or loss to the Licensed
materials. Products shall pass to Teletrac
at Teletrac's facility upon
ARTICLE 3: ORDERS AND PAYMENT tender by the
TERMS
3.1 LICENSE FEES, ROYALTIES.
Teletrac shall pay Etak fees in
7
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
carrier to Teletrac; however, ployees, agents and
Teletrac shall be responsible for representatives, in confidence
all freight charges except for and except as expressly permitted
those due to a re-shipment caused by this Agreement, shall not be
by defective media. used, duplicated or disclosed by
any of them in any form for the
3.5 PAYMENT TERMS. Teletrac use or benefit of any person or
shall pay to Etak a fixed fee in entity, nor reproduced,
the amount of ****. Teletrac transcribed, imitated or
shall make payments to Etak in simulated in whole or in part,
the amounts and on the dates set except for sublicenses to End
forth on Exhibit A-2. Etak may Users in accordance with this
refuse to ship, or may delay the Agreement. Teletrac may disclose
shipment of, any Licensed relevant aspects of the
Products on order and/or any Confidential Items to its
agreed-upon maintenance update if employees, agents or
Teletrac becomes delinquent in representatives only to the
the payment of any of its extent that such disclosure is
obligations to Etak. All reasonably necessary to
outstanding amounts which are not Teletrac's use of the
paid when due shall bear interest Confidential Items pursuant to
at the rate of the lesser of (i) this Agreement, provided that
**** percent per month; or (ii) Teletrac shall take all
the maximum allowable statutory reasonable steps to ensure that
rate at the time. All prices are the Confidential Items are not
net of any local, state or disclosed or duplicated in
federal taxes, fees, assessments contravention of this Agreement
or other levies, which shall be by its employees, agents or
the sole obligation of Teletrac. representatives, including but
Teletrac shall pay to Etak all not limited to, the execution of
applicable local, state and a written confidentiality
federal taxes and levies unless agreement by each such person.
Teletrac has presented to Etak a Teletrac shall take all other
valid and appropriate certificate reasonable steps to maintain the
of exemption from those taxes and confidentiality of the Licensed
levies. Products and to protect the
Licensed Products from
ARTICLE 4: PROTECTION OF misappropriation or misuse,
ETAK'S INTELLECTUAL PROPERTY unauthorized duplication or
distribution, including without
4.1 CONFIDENTIALITY OF THE limitation, the exercise by
LICENSED PRODUCTS. The Licensed Teletrac of at least the same
Products, including all aspects degree of care Teletrac employs
thereof used or incorporated in in protecting its own most
Derivative Products, together valuable confidential information.
with all materials and knowledge
related thereto (the
"Confidential Items"), are
obtained by Teletrac, and its
em-
8
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
4.2 ASSISTANCE. Teletrac ARTICLE 6: WARRANTIES, UPDATES
shall notify Etak promptly if AND DISCLAIMER THEREOF
Teletrac learns of any
misappropriation of the Products 6.1 LIMITED WARRANTY BY
or use of the Products by anyone ETAK. SET FORTH BELOW IS
in any manner not expressly ETAK'S LIMITED WARRANTY FOR THE
authorized by this Agreement, and LICENSED PRODUCTS.
shall fully cooperate with any
efforts by Etak to prevent any (a) Etak warrants to
misappropriation or misuse of the Teletrac that the Software
Products. In the event of any Licensed Products (that is
violation or suspected violation Licensed Products consisting of
of any provision of Article 4 software) in the version and
hereof, Teletrac shall level that is current on the date
immediately notify Etak and of initial delivery to Teletrac
shall, at its reasonable expense, will, for ninety (90) days from
assist Etak in the enforcement of that date, substantially conform
Article 4 against any current or to the specifications contained
former employee, agent or in Etak's documentation for that
representative of Teletrac or any version, when used on the
End User to the extent Etak authorized computer hardware;
chooses to enforce this Article that the Data Licensed Products
4. However, Etak shall not be (that is Licensed Products
obligated to enforce any of its consisting of data) in the
rights hereunder. version and level that is current
on the date of initial delivery
ARTICLE 5: DEMONSTRATION to Teletrac will, for one (1)
PRODUCTS year from that date,
substantially conform to the
5.1 DEMONSTRATIONS. specifications contained in
Teletrac shall be entitled to Etak's documentation for that
demonstrate the operation and version, when used on the
capabilities of the Products to authorized computer hardware; and
any potential customer. If that the media containing the
demonstration involves the Licensed Products will be free of
installation of Products on a manufacturing defects on the date
potential or existing customer's of initial delivery to Teletrac.
equipment, such installation will
be made according to the (b) Teletrac acknowledges
requirements of Section 2.5 of that the Licensed Products are
this Agreement, except as complex products and may contain
expressly permitted otherwise some non-conformities, defects or
below in this section 5.1. errors. Etak does
5.2 DEMONSTRATION AND OTHER
NO-CHARGE COPIES. Teletrac shall
be authorized to provide
demonstration copies of products
to prospective clients and copies
at no charge to law enforcement
agencies.
9
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
not warrant that the Licensed to correct nonconformities
Products will meet Teletrac's resulting from Teletrac's
needs or expectations, that modification of the Licensed
operations of the Licensed Products, Teletrac shall be
Products will be error-free or charged for and agrees to pay for
uninterrupted, or that all custom programming at Etak's then
nonconformities can or will be current standard hourly rate.
corrected. Teletrac must notify
Etak in writing within the (e) This Limited Warranty is
applicable warranty period set void if any non-conformity has
forth above of any claim that the resulted from accident abuse,
Licensed Products do not meet misuse, or misapplication. This
this Limited Warranty. Etak's Limited Warranty is for
SOLE OBLIGATION and Teletrac's Teletrac's exclusive benefit and
SOLE REMEDY under this Limited is non-transferable. Teletrac
Warranty is for Etak to use conclusively agrees that under
reasonable efforts to repair or all circumstances this Limited
replace the Licensed Products or Warranty fulfills its essential
to provide an avoidance procedure purpose.
at Etak's expense within a
commercially reasonable time so (f) THE EXPRESS WARRANTY
that the Licensed Products PROVIDED IN SECTIONS 6.1(a)
substantially conform to the THROUGH (f) IS A LIMITED WARRANTY
specifications contained in the AND IT IS THE ONLY WARRANTY MADE
Documentation, or at Etak's BY ETAK. ETAK MAKES AND TELETRAC
option, to refund the fees AND END USER RECEIVE NO OTHER
previously paid by Teletrac for WARRANTY, WHETHER EXPRESS OR
the Licensed Products involved. IMPLIED, AND ALL WARRANTIES OF
If Teletrac is unable to describe MERCHANTABILITY AND FITNESS FOR
the claimed non-conformity with ANY PARTICULAR PURPOSE ARE
sufficient specificity to enable EXPRESSLY EXCLUDED. THE STATED
Etak to replicate it on Etak's EXPRESS WARRANTY IS THE EXCLUSIVE
hardware at Etak's premises, then REMEDY FOR DAMAGES AND IS IN LIEU
no non-conformity shall be deemed OF ALL LIABILITIES OR OBLIGATIONS
to exist. OF ETAK. NO ORAL OR WRITTEN
ADVICE OR INFORMATION PROVIDED BY
(c) If the media containing ETAK OR ANY OF ITS AGENTS OR
the Licensed Products possess EMPLOYEES SHALL CREATE A WARRANTY
manufacturing defects, Etak will OR IN ANY WAY INCREASE THE SCOPE
provide Teletrac with a OF THIS LIMITED WARRANTY, AND
replacement copy of the Licensed TELETRAC AND END USER ARE NOT
Products within a commercially ENTITLED TO RELY ON ANY SUCH
reasonable time after receipt of ADVICE OR INFORMATION.
notice of the defective copy from
Teletrac.
(d) If Teletrac modifies or
attempts to modify the Licensed
Products, this Limited Warranty
shall terminate immediately. If
Etak elects, in its sole discretion,
10
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
6.2 TELETRAC EXPRESS any portions thereof as may be
WARRANTY. Teletrac represents contained in Derivative Products)
and warrants that it possesses used within the scope of this
the financial resources, Agreement infringe any patents,
technical facilities and skill, copyrights, trade secrets or
and all other requirements other intellectual property
necessary for its timely and full rights of any third party created
performance pursuant to the terms by United States federal law or
and conditions of this Agreement. the law of any of the United
Teletrac further represents that States, provided that, after
it is an experienced, expert and Teletrac became aware of such
knowledgeable licensor of Claim, Teletrac notified Etak in
computer software and data, and writing of such Claim within
is competent to create, market sufficient time to enable Etak to
and support Derivative Products. take action to fully protect
Etak's rights without any adverse
ARTICLE 7: INDEMNIFICATION impact on Etak's position.
7.1 INDEMNIFICATION BY ETAK. (c) If, as a result of any
claim of infringement of the type
(a) Teletrac shall notify described in this Section 7.1,
Etak immediately upon learning of Etak is enjoined or otherwise
any threatened or asserted claim prevented by an administrative or
that the Licensed Products legal order from licensing or
infringe any patents, copyrights, sublicensing any Licensed
trade secrets or other Product, or Teletrac is enjoined
intellectual property rights of or otherwise prevented by an
any third party. Etak shall have administrative or legal order
the sole right to control the from using any Licensed Product,
defense and negotiation of all or if Etak believes that such
such claims, and Teletrac shall injunction is likely or that any
fully cooperate in Etak's defense Licensed Product is likely to
of all such claims. become the subject of a claim of
infringement of the intellectual
(b) Etak shall protect, property rights of any third
defend (or in Etak's discretion, party, Etak shall (at Etak's
settle), indemnify and hold option) at its expense, either
Teletrac harmless from any and (i) procure the right for
all claims, demands, liabilities, Teletrac or Teletrac's End User
obligations, deficiencies, to continue to use said Licensed
losses, damages, actions, suits, Product, (ii) replace or modify
proceedings, assessments, the Licensed Product so as to
judgments or settlements make it non-infringing but
(collectively, "Claims"), substantially functionally
including all reasonable costs
and expenses related thereto such
as attorneys' fees, that are
asserted against Teletrac or
Teletrac's End Users to the
extent that the Licensed Products
(or
11
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
equivalent, or, if in Etak's all reasonable costs and expenses
judgment the foregoing options related thereto such as
are not available on commercially attorneys' fees, to the extent
reasonable terms or are that they:
impracticable, terminate this
Agreement and refund the (a) Arise from or are
unamortized portion of the fees connected with the development,
previously paid by Teletrac for modification, use or distribution
the use of said Licensed Product. of the Derivative Products or
Calculation of the unamortized Teletrac Products, including
portion of the fees shall be pro without limitation, any
rated over the life of the unauthorized reproduction,
Agreement. warranty violations, inadequate
installation, maintenance,
(d) Etak shall not have any defects in design, workmanship,
liability under this Article 7 to materials or otherwise, or any
the extent that a claim of misrepresentation or breach of
infringement is based upon the any covenant or agreement by
use of the Licensed Products in Teletrac relating to any of said
combination with other hardware products; or,
or products not furnished or made
by Etak, the use of the Licensed (b) Arise from or are
Products in practicing any connected with any breach by
infringing process (other than an Teletrac of any provision of this
infringing process created and Agreement; or,
used by Etak), the modification
of the Licensed Products or any (c) Are the direct or
portion thereof by anyone other indirect result of any asserted
than Etak, or application or use or proven obligations of Etak, to
of the Licensed Products in a the extent any such asserted or
manner for which they were not proven obligations of Etak (i)
designed or specified by Etak. arise in whole or in part from
any intentional misconduct,
(e) Sections 7.1(a) through negligence, omission or
7.1(e) state the entire and unperformed obligation of or by
exclusive obligation of Etak to Teletrac or Teletrac's agents or
Teletrac or Teletrac's End User employees; or (ii) are the direct
for any claim of infringement or indirect result of any claim
relating to the Licensed Products. by an End User of Teletrac
against Etak, except for such
7.2 INDEMNIFICATION BY claims as are covered by Section
TELETRAC. Teletrac shall 7.1.
protect, defend, indemnify and
hold Etak harmless from any and (d) If Etak and Teletrac are
all claims, demands, liabilities, both named as defendants in a
obligations, deficiencies, lawsuit in which it is un-
losses, damages, actions, suits,
proceedings, assessments,
judgments or settlements
(collectively, "Claims"),
including
12
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
clear whether or to what extent OR DEMAND AGAINST TELETRAC
Etak and/or Teletrac should BY ANY OTHER PERSON, ORGANIZATION
provide indemnity under this OR ENTITY (EXCEPT AS EXPRESSLY
Article 7, then each party shall SET FORTH IN ARTICLE 7). ETAK
bear its own costs and attorneys' SHALL NOT BE LIABLE TO TELETRAC
fees until this issue is BECAUSE OF ANY EXPIRATION,
resolved. At that point, it is TERMINATION OR FAILURE TO RENEW
intended under this Article 7 OR EXTEND THIS AGREEMENT, OR FOR
that the principles of FAILURE TO TIMELY DELIVER
comparative indemnity be applied, PRODUCT. IF ETAK'S LIMITED
so that Etak and Teletrac each is WARRANTY OR LIMITATION OF
responsible for indemnity in LIABILITY SET FORTH IN THIS
proportion to its own culpability. AGREEMENT SHALL FOR ANY REASON
WHATSOEVER BE HELD UNENFORCEABLE
ARTICLE 8: LIMITATION ON ETAK OR INAPPLICABLE, TELETRAC AGREES
LIABILITY THAT ETAK'S LIABILITY SHALL NOT
EXCEED **** PERCENT (****%) OF
IN NO EVENT SHALL ETAK BE THE FEES PAID BY TELETRAC TO ETAK
LIABLE FOR ANY CLAIM OR LOSS WITH RESPECT TO THE LICENSED
INCURRED BY TELETRAC (INCLUDING PRODUCTS THAT ARE THE SUBJECT OF
WITHOUT LIMITATION COMPENSATORY, THE CLAIM.
INCIDENTAL, INDIRECT, SPECIAL,
CONSEQUENTIAL OR EXEMPLARY ARTICLE 9: RECORDS, REPORTS
DAMAGES, LOST PROFITS, LOST SALES AND AUDITS
OR BUSINESS, EXPENDITURES,
INVESTMENTS, OR COMMITMENTS IN 9.1 REQUIRED RECORDS.
CONNECTION WITH ANY BUSINESS, Teletrac shall prepare and
LOSS OF ANY GOODWILL, OR DAMAGES maintain at its expense complete
RESULTING FROM LOST DATA OR and accurate books and records
INABILITY TO USE DATA) documenting its compliance with
IRRESPECTIVE OF WHETHER ETAK HAS the terms of this Agreement. The
BEEN INFORMED OF, KNEW OF, OR books and records prepared by
SHOULD HAVE KNOWN OF THE Teletrac shall be retained for a
LIKELIHOOD OF SUCH DAMAGES, minimum of three (3) years from
EXCEPT AS EXPRESSLY PROVIDED IN the date on which this Agreement
ARTICLES 6 AND 7. THIS is terminated.
LIMITATION APPLIES TO ALL CAUSES
OF ACTION IN THE AGGREGATE, 9.2 AUDIT. During the
INCLUDING WITHOUT LIMITATION initial term hereof, any renewal
BREACH OF CONTRACT, BREACH OF periods, and for a period of one
WARRANTY, NEGLIGENCE, STRICT (1) year after expiration or
LIABILITY, MISREPRESENTATION, AND termination of this Agreement,
OTHER TORTS. TELETRAC FURTHER Etak shall have the right
AGREES THAT ETAK SHALL NOT BE
LIABLE IN ANY EVENT FOR ANY
DAMAGES INCURRED BY TELETRAC, END
USER, OR BY ANY OTHER PERSON,
ORGANIZATION OR ENTITY AS A
RESULT OF TELETRAC OR END USER'S
MISUSE OF ANY OF THE PRODUCTS.
NOR SHALL ETAK BE LIABLE FOR ANY
CLAIM
13
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
at its expense and upon ARTICLE 11: TERMINATION,
reasonable notice, to examine or EFFECTS THEREOF AND REMEDIES
have examined by its authorized
representative, Teletrac's books 11.1 TERMINATION EVENTS.
and records relevant to license
agreement, sublicense agreements (a) Etak may terminate this
and third party vendor and/or Agreement immediately, without
distributor agreements to judicial action and (i) with ten
determine or verify Teletrac's (10) days' notice with
performance hereunder. opportunity to cure ff VAR
violates any of the provisions of
ARTICLE 10: TERM AND RENEWAL Articles 2 or 4; and (ii) with
thirty (30) days' notice if VAR
Unless terminated earlier commits a material breach of any
pursuant to any provision of other provision of this Agreement
Article 11, this Agreement shall or otherwise fails materially to
commence on the later date below fulfill any of its obligations
the parties' signatures, and hereunder and VAR fails to cure
shall continue in force until such breach within the thirty
February 14, 1998, at which time (30) day notice period, or if VAR
this Agreement will expire neglects or fails to conduct its
automatically, unless renewed as business in a manner that
provided in Exhibit A-2. represents fairly Etak products
Teletrac does not have or acquire and the good name, goodwill and
by execution of this Agreement, reputation of Etak.
by performance hereunder, or
otherwise, any vested right with (b) Either party hereto may
respect to the distribution of terminate this Agreement
Products or the renewal of this immediately upon written notice
Agreement. If Etak continues a to the other party without
business relationship with opportunity for cure if, whether
Teletrac after termination or voluntarily or involuntarily, any
non-renewal of this Agreement, process or proceeding of any
that relationship shall not be court is instituted against such
construed as a renewal of this party by attachment or levy or
Agreement or a waiver of execution, in insolvency or
termination, but such bankruptcy, or in receivership,
relationship shall be "at will," or if any general assignment is
terminable at any time with or made or attempted to be made for
without cause or notice by either the benefit of creditors by such
party, and all such transactions party.
shall be governed by terms
otherwise identical to the 11.2 SURVIVAL. Termination
relevant provisions of this of this Agreement for any
Agreement, unless the parties
have executed a new written
agreement superseding this
Agreement.
14
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
reason shall not relieve Teletrac sive statement of the terms of
of its obligations to make full their agreement.
payment of the fixed fee or any
other amounts that are owed by 12.2 GOVERNING LAW;
Teletrac to Etak. In addition, JURISDICTION. This Agreement and
Sections 2.7, 2.9, 2.10, 2.11, all aspects of the relationship
Article 4, Article 7, Article 8, between Etak and Teletrac shall
Article 9, Article 10, Section be governed by and construed in
11.3, and Article 12 (other than accordance with the internal laws
Section 12.9) hereof shall of the State of California.
survive any such termination or
expiration for at least as long 12.3 PRODUCT CHANGES.
as Teletrac uses or has access to Teletrac agrees that Etak has the
the Products, but in no event right to modify any of the
less than the applicable statute Licensed Products at any time
of limitations period. whatsoever without notice or
discontinue any of the Licensed
11.3 RETURN OF INFORMATION. Products at any time whatsoever,
Promptly upon termination or with one hundred eighty (180)
expiration, Teletrac shall, at days' prior written notice to
its expense, return to Etak all Teletrac. If Etak modifies or
copies of the Products, related discontinues any Licensed
materials, and other materials Product, Etak shall have no
developed by or belonging to Etak obligation to modify, replace, or
which are in possession or make any refund with respect to
control of Teletrac. Licensed Products previously
Concurrently therewith, a duly delivered to Teletrac.
authorized officer of Teletrac
shall certify in writing to Etak 12.4 ARBITRATION. Any
that Teletrac has made every dispute arising out of, connected
reasonable effort to return all with or relating to this
such materials to Etak and that Agreement, the past, present or
to the best of Teletrac's future relationship between Etak
knowledge and information all and Teletrac, or the termination
have been returned to Etak. or non-renewal of this Agreement
or of the relationship between
ARTICLE 12: GENERAL PROVISIONS Etak and Teletrac, whether
sounding in contract, tort or
12.1 FINAL AGREEMENT; STATUS otherwise, shall be finally
OF FORMER AGREEMENTS. This resolved exclusively by
Agreement may be amended, arbitration. Such arbitration
altered, or modified only by a shall be conducted by a panel of
writing so stating its purpose, three arbitrators. To the
and signed by both parties. This greatest
Agreement and the attached
Exhibits supersede all prior and
contemporaneous agreements and
understandings between the
parties relating to their subject
matter and are the complete and
exclu-
15
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
extent practicable, the jurisdiction, that
arbitrators shall be appointed provision shall be severed from
from a pool of arbitrators who this Agreement as to such
are stated to have experience or jurisdiction (but, to the extent
expertise in the computer permitted by law, not elsewhere),
industry. The arbitration shall and shall not affect the
proceed in accordance with the remainder hereof.
then existing California
Arbitration Act, California Code 12.7 NO WAIVER. No waiver of
of Civil Procedure Section 1280, any obligation or right of either
et seq. Any award made by the party shall be effective unless
arbitration panel, however in writing, executed by the party
constituted, shall be final, against whom it is being
binding and conclusive on all enforced. Any such waiver shall
parties for all purposes and not preclude a party from
judgment may be entered thereon exercising any other right or
by any state or federal court later exercising the same right.
having jurisdiction.
12.8 ATTORNEY FEES. If
12.5 NOTICES. Any notice, either party commits a material
request or demand is required to breach of this Agreement, such
be given or made hereunder in party shall pay to the other
writing, and may be delivered in party all reasonable costs and
person, by certified or expenses incurred by such other
registered mail, postage prepaid, party in enforcing its rights
or by overnight courier. All under this Agreement, including
notices shall be addressed to the without limitation, costs and
party and address set forth at attorneys' fees to the extent the
the end of this Agreement, unless other party substantially
and until a party provides prevails on its claims.
written notice of a new address
for receipt of notice. All 12.9 ASSIGNMENT. This
notices shall be deemed received Agreement shall inure to the
when (i) received; or (ii) when benefit of and shall be binding
delivery is first attempted by upon the parties hereto and their
the carrier at the address of respective successors, legal
record, whichever occurs first. representatives and permitted
A copy of all notices to Etak assigns, except that Teletrac
shall also be sent by Teletrac to shall not assign or transfer this
Etak's Chief Financial Officer Agreement or any part hereof
with a copy in separate envelope without Etak's prior written
to Attn: Contracts. Etak shall consent, which consent shall not
send all notices to Teletrac to be unreasonably withheld. This
Teletrac's General Counsel. restriction on assignments or
transfers shall
12.6 SEVERABILITY. If any
provision of this Agreement or
the application thereof to any
party or circumstance shall to
any extent be invalid or
unenforceable in any
16
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
apply to assignments or transfers and warrant in writing that
by operation of law, as well as Teletrac has fully complied with
by contract, merger or this provision.
consolidation. Any attempted
assignment or transfer in 12.10 FORCE MAJEURE. Except
derogation of this prohibition is for payments due to Etak from
void. Notwithstanding the Teletrac pursuant to this
foregoing, Teletrac shall be Agreement, neither party shall be
permitted to assign this liable for nonperformance or
Agreement, with prior notice to delays in performance hereunder
Etak and provided that Teletrac if caused by factors beyond its
has not committed an uncured reasonable control, including
material breach of which it has without limitation, acts of God,
been given notice of any acts of public enemy, acts of
provision of this Agreement, to: government or courts of law or
(a) any company that may result equity, civil war, insurrection
from a merger, reorganization, or or riots, interruption of
consolidation by or with transportation, embargo,
Teletrac; or (b) any company to litigation or other private or
which Teletrac sells all or public proceedings, accident,
substantially all its assets or inability to procure materials,
stock; or (c) the stockholders of prohibition of import or export
Teletrac, or to any affiliate of of materials, government orders,
Teletrac or the stockholders of regulations, restrictions,
Teletrac; provided, however, that priorities or rationing, or
only one such assignment is strikes, lockouts or other labor
permitted (to any non-affiliate disputes, fires, floods,
of Teletrac), and further explosions, earthquakes or other
provided that the assignee must casualties.
be an "acceptable third party" in
Etak's judgment. An "acceptable 12.11 COMPLIANCE WITH LAWS.
third party" means a third party Teletrac acknowledges and
who is not a competitor of Etak understands that the Products may
and who will abide by all be Subject to restrictions on
proprietary rights and other exportation and reexportation
provisions of this Agreement. If pursuant to the United States
Teletrac seeks to make an Export Administration
assignment to other than an Regulations, 15 CFR Parts
"acceptable third party," then 368-399. Prior to export of any
Etak shall have the right, within Product, Teletrac represents and
thirty (30) days of receiving warrants that it will be familiar
written notice thereof from with the requirements of the
Teletrac, to terminate this Export Administration Regulations
Agreement, in which event and will comply strictly with
Teletrac shall return to Etak all those requirements in all
Products, source code and all transactions
associated documentation, all
copies thereof, all portions
thereof, and shall make no
further use thereof in any form
or manner, and an authorized
officer of Teletrac shall
certify, represent
17
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
involving any Products supplied FOR PURPOSE OF ANY PUBLIC
by Etak hereunder. Teletrac DISCLOSURE PROVISION UNDER ANY
shall comply with all applicable FEDERAL, STATE OR LOCAL LAW, IT
laws and regulations, and IS AGREED THAT THESE PRODUCTS ARE
maintain all required licenses TRADE SECRET AND PROPRIETARY
and permits. COMMERCIAL PRODUCTS AND NOT
SUBJECT TO DISCLOSURE.
12.12 GOVERNMENT RIGHTS. If
any Product is used in any 12.13 NO JOINT RELATIONSHIP.
fashion, directly or indirectly, Teletrac and Etak are independent
in connection with foreign or contractors and neither has nor
domestic government contracting shall have any power, nor will
or subcontracting, including either represent that either has
without limitation, Teletrac's any power to bind the other
performance of any government party, or to assume or create any
contracts or subcontracts, then obligation or responsibility,
Teletrac shall ensure that the express or implied, on behalf of
government entity receives the other party or in the other
nothing more than the right to party's name. This Agreement
use the Products pursuant to a shall not be construed as
sublicense agreement equivalent constituting Teletrac and Etak as
to that allowed under section 2.4 employees, agents, partners,
of this Agreement. Teletrac joint venturers, franchisers or
shall inform any government franchisees, to create any other
entity or prime contractor with form of legal association or
which it is contracting exactly arrangement which might impose
how it intends to use the liability upon Etak or Teletrac
Products in connection with its for any act or failure to act of
government contracts, that such the other.
Products are proprietary to Etak
and that Teletrac has no right to
grant to the government entity or
prime contractor any rights in
the Products. THE SOFTWARE IS A
"COMMERCIAL ITEM", AS THAT TERM
IS DEFINED AT 48 C.F.R 2.101 (OCT
1995) CONSISTING OF "COMMERCIAL
COMPUTER SOFTWARE" AND "COMMERCIAL
COMPUTER DOCUMENTATION," AS SUCH
TERMS ARE USED IN 48 C.F.R. 12.212
(SEPT. 1995). CONSISTENT WITH
48 C.F.R. 12.212 AND 48 C.F.R.
227.7202-1 THROUGH 227.7202-4
(JUNE 1995), ALL U.S. GOVERNMENTAL
END USERS ACQUIRE THE SOFTWARE
WITH ONLY THOSE LICENSE RIGHTS
SET FORTH HEREIN. THE PRODUCTS
ARE COPYRIGHT -C- 1984-1997 BY ETAK.
UNPUBLISHED. ALL RIGHTS RESERVED
UNDER THE COPYRIGHT LAWS OF THE
UNITED STATES.
18
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
latest day and year written below.
Teletrac, Inc. Etak, Inc.
a Delaware corporation a California corporation
2323 Grand, Suite 1100 1430 O'Brien Drive
Kansas City, Missouri 64108-2670 Menlo Park, California 94025
(816) 474-0055 (415) 328-3825
Fax: (816) 474-3475
By: /s/ Steven D. Scheiwe By: /s/ Steven T. Dodds
---------------------- -------------------------
Name: Steven D. Scheiwe Name: Steven T. Dodds
--------------------- ------------------------
Title: Secretary Title: VP of Product Marketing
-------------------- & Sales
-----------------------
19
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
EXHIBIT A-1
LICENSED PRODUCT AND SERVICES
STANDARD - RELEASED LICENSED PRODUCT:
A. SOFTWARE
****
B. DATA
****
NON-STANDARD/NON-RELEASED LICENSED PRODUCT
A. SOFTWARE
****
B. DATA
N/A
SOURCE CODE
****
SERVICES
Teletrac shall be entitled to **** hours of telephone technical support at
no additional charge. Etak support services can be reached via telephone
at 1-800-765-0555. For any support requested by Teletrac in excess of this
time, Teletrac shall pay to Etak an amount equal to Etak's then current
support rate (current rate of $****/hour; minimum 1 hour).
A-1(1)
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
EXHIBIT A-2
DERIVATIVE PRODUCT, SCHEDULE OF FEES, AND ROYALTIES
The terms set forth in this Exhibit A-2 supersede any prior Schedule of Fees and
Royalties agreed to between the parties, and apply only to the Derivative
Product set forth below in Section 1 below. A new Exhibit A-2 must be submitted
for each Derivative Product to be covered under this Agreement.
1. DERIVATIVE PRODUCT TO WHICH THIS SCHEDULE APPLIES:
Teletrac Radiolocation software employing the **** through **** mHz
frequency range only in the United States and the Teletrac network and
Teletrac points of interest (icons).
2. FEES PAYABLE:
For those items listed in Exhibit A-1, Teletrac shall pay to Etak a fixed
fee in the amount of **** dollars ($****). These fees exclude escrow fees
or engineering fees.
$ **** payable upon signature
$ **** payable on 04/14/97
$ **** payable on 07/14/97
$ **** payable on 10/14/97
RENEWAL OPTION. Providing that Teletrac is not in any material breach of
this Agreement, including but not limited to making timely payment of all
fees due Etak, Teletrac shall have the right to renew this Agreement for an
additional term of one (1) year by providing Etak with written notice no
later than November 14, 1997 of its intent to renew. Payment of fees for
the renewal term shall be as follows:
$ **** payable on 02/14/98
$ **** payable on 05/14/98
$ **** payable on 08/14/98
$ **** payable on 11/14/98
CUSTOM DATA MERGING OPTION. Etak will provide custom data merging services
for adjoining ECAs at the rate of **** Dollars ($****) per ECA merged. For
example, the price to merge two (2) adjoining ECAs is $**** and $**** for
each additional ECA merged to the original two.
3. STANDARD DATA UPDATES:
A-2(1)
<PAGE>
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Etak, Inc.
Value Added Reseller Agreement
Providing that Teletrac is not in any material breach of this Agreement,
including but not limited to making timely payment of all fees due Etak,
Teletrac shall be entitled to receive quarterly updates of Etak's standard
MapAccess data for the geographic areas provided for in Exhibit A-1 as they
are generally released by Etak.
Teletrac shall be entitled to receive updates of Etak's standard US
MapAccess data as they are generally released by Etak. Etak typically
provides full sets for the US updates in January with modifications/deltas
typically provided in April, July and October.
Teletrac shall be entitled to receive updates of Etak's custom merged ECA's
for Los Angeles, CA; Houston, TX; Miami, FL; Detroit, MI; Chicago, IL;
Dallas, TX. Etak will provide these updates no sooner than ninety (90)
days after contract execution. Etak will not provide updates of these
custom merged ECAs after initial delivery.
4. ADVERTISEMENTS
Teletrac shall not place any advertising by third parties in or onto
Derivative Products unless Etak and Teletrac first agree in writing upon a
mutually acceptable arrangement concerning the revenue or potential revenue
of such advertising.
5. CONFIDENTIALITY
Neither party shall discuss or disclose the terms of the Agreement or this
Exhibit with any third party, other than its legal counsel and accountant,
without prior written consent from the other party, which consent shall not
be unreasonably withheld.
Teletrac, Inc. Etak, Inc.
a Delaware corporation a California corporation
2323 Grand, Suite 1100 1430 O'Brien Drive
Kansas City, Missouri 64108-2670 Menlo Park, California 94025
(816) 474-0055 (415) 328-3825
Fax: (816) 474-3475
By:_____________________________ By:__________________________
Name:___________________________ Name:________________________
A-2(2)
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Title:__________________________ Title:
Date:___________________________ Date:________________________
A-2(3)
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EXHIBIT B
ETAK END USER LICENSE AGREEMENT
SAMPLE ONLY - DO NOT USE
1. GRANT OF LICENSE. Licensor grants User a non-transferable, non-exclusive
five (5) year license to use the software, data and/or documentation as
defined in the attached quotation (the "Products"), solely for internal use
by User's business, only with one central processing unit at any one time.
User may not copy, reverse engineer, translate, port, modify or make
derivative works of the Products. User may not rent, disclose, publish,
sell, assign, lease, sublicense, market, or transfer the Products or use them
in any manner not expressly authorized by this Agreement. User shall not
derive or attempt to derive the source code or structure of all or any
portion of the Products by reverse engineering, disassembly, decompilation or
any other means. User shall not use the Products to operate a service bureau
or for any other use involving the processing of data of other persons or
entities. User may not use the data Products with any software other than
the software Products provided to User under this license agreement.
User does not receive any, and Licensor retains all, ownership rights in the
Products. The Products are copyrighted and may not be copied, even if
modified or merged with other Products. User shall not alter or remove any
copyright notice or proprietary legend contained in or on the Products.
Licensor's supplier shall be a third party beneficiary of Licensor's rights
under this Agreement, but is not a party hereto and shall have no obligation
hereunder.
2. LIMITED WARRANTY AND LIABILITY. Licensor warrants that the Products in
the version and level that is current on the date of initial shipment to User
will, for ninety (90) days from that date, substantially conform to
Licensor's specifications, when used in a computer environment approved by
Licensor. The Products are complex and may contain some non-conformities,
defects or errors. Licensor does not warrant that the Products will meet User
needs or expectations, that operations of the Products will be error-free or
uninterrupted, or that all nonconformities can or will be corrected.
User must notify Licensor within the 90-day warranty period of any warranty
claim. Licensor's SOLE OBLIGATION and User's SOLE REMEDY under this Limited
Warranty is for Licensor, at Licensor's option, to
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use reasonable efforts to repair or replace the Products or to provide an
avoidance procedure within a commercially reasonable time so that the
Products substantially conform to the specifications contained in Licensor's
documentation, or, in Licensor's sole discretion, to refund the amount of the
initial license fee previously paid by User for the non-conforming Product
unit(s).
This Limited Warranty is void if any non-conformity has resulted from accident,
abuse, misuse, misapplication, or modification by someone other than Licensor.
This Limited Warranty is non-transferable.
THE EXPRESS WARRANTY IN THIS SECTION 2 IS A LIMITED WARRANTY AND IT IS THE ONLY
WARRANTY MADE BY LICENSOR. LICENSOR MAKES AND USER RECEIVES NO OTHER WARRANTY,
WHETHER EXPRESS OR IMPLIED, AND ALL WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR ANY PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED. THE STATED EXPRESS WARRANTY
IS THE EXCLUSIVE REMEDY FOR DAMAGES AND IS IN LIEU OF ALL LIABILITIES OR
OBLIGATIONS OF LICENSOR.
IN NO EVENT SHALL LICENSOR BE LIABLE FOR ANY DAMAGES, CLAIM OR LOSS INCURRED BY
USER (INCLUDING WITHOUT LIMITATION COMPENSATORY, INCIDENTAL, DIRECT, INDIRECT,
SPECIAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, LOST PROFITS, LOST SALES OR
BUSINESS, EXPENDITURES, INVESTMENTS, OR COMMITMENTS IN CONNECTION WITH ANY
BUSINESS, LOSS OF ANY GOODWILL, OR DAMAGES RESULTING FROM LOST DATA OR INABILITY
TO USE DATA) IRRESPECTIVE OF WHETHER LICENSOR HAS BEEN INFORMED OF, KNEW OF, OR
SHOULD HAVE KNOWN OF THE LIKELIHOOD OF SUCH DAMAGES, EXCEPT AS EXPRESSLY
PROVIDED IN SECTION 2. THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION IN THE
AGGREGATE, INCLUDING WITHOUT LIMITATION BREACH OF CONTRACT, BREACH OF WARRANTY,
NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATION, AND OTHER TORTS. IF LICENSOR'S
LIMITED WARRANTY OR LIMITATION OF LIABILITY SET FORTH IN THIS AGREEMENT SHALL
FOR ANY REASON WHATSOEVER BE HELD UNENFORCEABLE OR INAPPLICABLE, USER AGREES
THAT LICENSOR'S LIABILITY SHALL NOT EXCEED FIFTY PERCENT (50%) OF THE LICENSE
FEES PAID BY USER TO ETAK WITH RESPECT TO THE PRODUCT UNIT(S) AT ISSUE. Some
states do not allow the exclusion or limitation of incidental or consequential
damages or the limitation of duration of an implied warranty, so the limitation
or exclusion herein may not apply to User. This warranty shall not be
applicable to the extent that any provision of this warranty Is prohibited by
any federal, state or local law which cannot be preempted. This warranty gives
User specific legal rights, and User may also have other rights which vary from
state to state.
3. MISCELLANEOUS. This is the exclusive Agreement between Licensor and User
regarding its subject matter. User may not assign any part
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of this Agreement without Licensor's prior written consent. This Agreement
shall be governed by the internal laws of California. User shall pay any
taxes on the Products or transactions, except for those based on Licensor's
annual net income.
If any provision of this Agreement is declared invalid or unenforceable, the
remaining provisions of this Agreement shall remain in effect. Any notice
under this Agreement shall be delivered by U.S. certified mail, return
receipt requested, or by overnight courier to Licensor at the address below.
U.S. GOVERNMENT RESTRICTED RIGHTS
If any Product is used in any fashion, directly or indirectly, in connection
with foreign or domestic government contracting or subcontracting, including
without limitation, USER's performance of any government contracts or
subcontracts, then USER shall ensure that the government entity receives
nothing more than RESTRICTED RIGHTS to use the Products pursuant to a
sublicense agreement equivalent to that allowed under section 2.4 of this
Agreement. USER shall inform any government entity or prime contractor with
which it is contracting exactly how it intends to use the Products in
connection with its government contracts, that such Products are proprietary
to Etak and that Licensee has no right to grant to the government entity or
prime contractor any rights in the Products. THE SOFTWARE IS A "COMMERCIAL
ITEM", AS THAT TERM IS DEFINED AT 48 C.F.R 2.101 (OCT. 1995) CONSISTING OF
"COMMERCIAL COMPUTER SOFTWARE" AND "COMMERCIAL COMPUTER DOCUMENTATION," AS
SUCH TERMS ARE USED IN 48 C.F.R. 12.212 (SEPT 1995). CONSISTENT WITH 48
C.F.R. 12.212 AND 48 C.F.R. 227.7202-1 THROUGH 227.7202-4 (JUNE 1995), ALL
U.S. GOVERNMENTAL END USERS ACQUIRE THE SOFTWARE WITH ONLY THOSE LICENSE
RIGHTS SET FORTH HEREIN. FOR PURPOSE OF ANY PUBLIC DISCLOSURE PROVISION
UNDER ANY FEDERAL, STATE OR LOCAL LAW, IT IS AGREED THAT THESE PRODUCTS ARE
TRADE SECRET AND PROPRIETARY COMMERCIAL PRODUCTS AND NOT SUBJECT TO
DISCLOSURE.
(company) Etak, Inc.
a (state) corporation a California corporation
(address) 1430 O'Brien Drive
(state, city, zip) Menlo Park, California 94025
(phone) (415) 328-3825
By:_____________________________ By:____________________________
Name:___________________________ Name:__________________________
Title:__________________________ Title:_________________________
B(3)
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Date:___________________________ Date:__________________________
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EXHIBIT C
COMPUTER CONFIGURATIONS ON WHICH
TELETRAC MAY USE THE PRODUCTS
An environment is a combination of processor type, compiler and operating
system.
ENVIRONMENT:
****
TOOLS TO BE USED:
****
****
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EXHIBIT D
PREFERRED ESCROW AGREEMENT
Account Number ______________
This Agreement is effective _______________, 19___ among Data Securities
International, Inc. ("DSI"), Etak, Inc. ("Depositor") and Teletrac, Inc.
("Preferred Beneficiary"), who collectively may be referred to in this
Agreement as "the parties."
A. Depositor and Preferred Beneficiary have entered or will enter into a
license agreement, development agreement, and/or other agreement regarding
certain proprietary technology of Depositor (referred to in this Agreement as
"the license agreement").
B. Depositor desires to avoid disclosure of its proprietary technology
except under certain limited circumstances.
C. The availability of the proprietary technology of Depositor is critical
to Preferred Beneficiary in the conduct of its business and, therefore,
Preferred Beneficiary needs access to the proprietary technology under
certain limited circumstances.
D. Depositor and Preferred Beneficiary desire to establish an escrow with
DSI to provide for the retention, administration and controlled access of the
proprietary technology materials of Depositor.
E. The parties desire this Agreement to be supplementary to the license
agreement pursuant to 11 United States [Bankruptcy] Code, Section 365(n).
ARTICLE 1 -- DEPOSITS
1.1 OBLIGATION TO MAKE DEPOSIT. Upon the signing of this Agreement by the
parties, Depositor shall deliver to DSI the proprietary information and other
materials ("deposit materials") required to be deposited by the license
agreement or, if the license agreement does not identify the materials to be
deposited with DSI, then such materials will be identified on an Attachment
A. If Attachment A is applicable, it is to be prepared and signed by
Depositor and Preferred Beneficiary. DSI shall have no obligation with
respect to the preparation, signing or delivery of Attachment A.
1.2 IDENTIFICATION OF TANGIBLE MEDIA. Prior to the delivery of the deposit
materials to DSI, Depositor shall conspicuously label for
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identification each document, magnetic tape, disk, or other tangible media
upon which the deposit materials are written or stored. Additionally,
Depositor shall complete Attachment B to this Agreement by listing each such
tangible media by the item label description, the type of media and the
quantity. The Attachment B must be signed by Depositor and delivered to DSI
with the deposit materials. Unless and until Depositor makes the initial
deposit with DSI, DSI shall have no obligation with respect to this
Agreement, except the obligation to notify the parties regarding the status
of the deposit account as required in Section 2.2 below.
1.3 DEPOSIT INSPECTION. When DSI receives the deposit materials and the
Attachment B, DSI will conduct a deposit inspection by visually matching the
labeling of the tangible media containing the deposit materials to the item
descriptions and quantity listed on the Attachment B. In addition to the
deposit inspection, Preferred Beneficiary may elect to cause a verification
of the deposit materials in accordance with Section 1.6 below.
1.4 ACCEPTANCE OF DEPOSIT. At completion of the deposit inspection, if DSI
determines that the labeling of the tangible media matches the item
descriptions and quantity on Attachment B, DSI will date and sign the
Attachment B and mail a copy thereof to Depositor and Preferred Beneficiary.
If DSI determines that the labeling does not match the item descriptions or
quantity on the Attachment B, DSI will (a) note the discrepancies in writing
on the Attachment B; (b) date and sign the Attachment B with the exceptions
noted; and (c) provide a copy of the Attachment B to Depositor and Preferred
Beneficiary. DSI's acceptance of the deposit occurs upon the signing of the
Attachment B by DSI. Delivery of the signed Attachment B to Preferred
Beneficiary is Preferred Beneficiary's notice that the deposit materials have
been received and accepted by DSI.
1.5 DEPOSITOR'S REPRESENTATIONS. Depositor represents as follows:
a. Depositor lawfully possesses all of the deposit materials deposited
with DSI;
b. With respect to all of the deposit materials, Depositor has the right
and authority to grant to DSI and Preferred Beneficiary the rights as
provided in this Agreement;
c. The deposit materials are not subject to any lien or other
encumbrance; and
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d. The deposit materials consist of the proprietary information and other
materials identified either in the license agreement or Attachment A,
as the case may be.
1.6 VERIFICATION. Preferred Beneficiary shall have the right, at Preferred
Beneficiary's expense, to cause a verification of any deposit materials. A
verification determines, in different levels of detail, the accuracy,
completeness, sufficiency and quality of the deposit materials. If a
verification is elected after the deposit materials have been delivered to
DSI, then only DSI, or at DSI's election an independent person or company
selected and supervised by DSI, may perform the verification.
1.7 DEPOSIT UPDATES. Unless otherwise provided by the license agreement,
Depositor shall update the deposit materials within 60 days of each release
of a new version of the product which is subject to the license agreement.
Such updates will be added to the existing deposit. All deposit updates
shall be listed on a new Attachment B and the new Attachment B shall be
signed by Depositor. Each Attachment B will be held and maintained
separately within the escrow account. An independent record will be created
which will document the activity for each Attachment B. The processing of all
deposit updates shall be in accordance with Sections 1.2 through 1.6 above.
All references in this Agreement to the deposit materials shall include the
initial deposit materials and any updates.
1.8 REMOVAL OF DEPOSIT MATERIALS. The deposit materials may be removed
and/or exchanged only on written instructions signed by Depositor and
Preferred Beneficiary, or as otherwise provided in this Agreement.
ARTICLE 2 -- CONFIDENTIALITY AND RECORD KEEPING
2.1 CONFIDENTIALITY. DSI shall maintain the deposit materials in a secure,
environmentally safe, locked receptacle which is accessible only to
authorized employees of DSI. DSI shall have the obligation to reasonably
protect the confidentiality of the deposit materials. Except as provided in
this Agreement, DSI shall not disclose, transfer, make available, or use the
deposit materials. DSI shall not disclose the content of this Agreement to
any third party. If DSI receives a subpoena or other order of a court or
other judicial tribunal pertaining to the disclosure or release of the
deposit materials, DSI will immediately notify the parties to this Agreement.
It shall be the responsibility of Depositor and/or Preferred Beneficiary to
challenge any such order; provided, however, that DSI does not waive its
rights to present its position with respect to any
D(3)
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such order. DSI will not be required to disobey any court or other judicial
tribunal order. (See Section 7.5 below for notices of requested orders.)
2.2 STATUS REPORTS. DSI will issue to Depositor and Preferred Beneficiary a
report profiling the account history at least semi-annually. DSI may provide
copies of the account history pertaining to this Agreement upon the request
of any party to this Agreement.
2.3 AUDIT RIGHTS. During the term of this Agreement, Depositor and Preferred
Beneficiary shall each have the right to inspect the written records of DSI
pertaining to this Agreement. Any inspection shall be held during normal
business hours and following reasonable prior notice.
ARTICLE 3 -- GRANT OF RIGHTS TO DSI
3.1 TITLE TO MEDIA. Depositor hereby transfers to DSI the title to the media
upon which the proprietary information and materials are written or stored.
However, this transfer does not include the ownership of the proprietary
information and materials contained on the media such as any copyright, trade
secret, patent or other intellectual property rights.
3.2 RIGHT TO MAKE COPIES. DSI shall have the right to make copies of the
deposit materials as reasonably necessary to perform this Agreement. DSI
shall copy all copyright, nondisclosure, and other proprietary notices and
titles contained on the deposit materials onto any copies made by DSI. With
all deposit materials submitted to DSI, Depositor shall provide any and all
instructions as may be necessary to duplicate the deposit materials including
but not limited to the hardware and/or software needed.
3.3 RIGHT TO SUBLICENSE UPON RELEASE. As of the effective date of this
Agreement, Depositor hereby grants to DSI a non-exclusive, irrevocable,
perpetual, and royalty-free license to sublicense the deposit materials to
Preferred Beneficiary upon the release, if any, of the deposit materials in
accordance with Section 4.5 below. Except upon such a release, DSI shall not
sublicense or otherwise transfer the deposit materials.
ARTICLE 4 -- RELEASE OF DEPOSIT
4.1 RELEASE CONDITIONS. As used in this Agreement, "Release Conditions"
shall mean the following:
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a. Depositor's failure to carry out obligations imposed on it pursuant to
the license agreement; or
b. Depositor's failure to continue to do business in the ordinary course.
4.2 FILING FOR RELEASE. If Preferred Beneficiary believes in good faith that
a Release Condition has occurred, Preferred Beneficiary may provide to DSI
written notice of the occurrence of the Release Condition and a request for
the release of the deposit materials. Upon receipt of such notice, DSI shall
provide a copy of the notice to Depositor, by certified mail, return receipt
requested, or by commercial express mail.
4.3 CONTRARY INSTRUCTIONS. From the date DSI mails the notice requesting
release of the deposit materials, Depositor shall have ten business days to
deliver to DSI Contrary Instructions. "Contrary Instructions" shall mean the
written representation by Depositor that a Release Condition has not occurred
or has been cured. Upon receipt of Contrary Instructions, DSI shall send a
copy to Preferred Beneficiary by certified mail, return receipt requested, or
by commercial express mail. Additionally, DSI shall notify both Depositor
and Preferred Beneficiary that there is a dispute to be resolved pursuant to
the Dispute Resolution section (Section 7.3) of this Agreement. Subject to
Section 5.2, DSI will continue to store the deposit materials without release
pending (a) joint instructions from Depositor and Preferred Beneficiary, (b)
resolution pursuant to the Dispute Resolution provisions, or (c) order of a
court.
4.4 RELEASE OF DEPOSIT. If DSI does not receive Contrary Instructions from
the Depositor, DSI is authorized to release the deposit materials to the
Preferred Beneficiary or, if more than one beneficiary is registered to the
deposit, to release a copy of the deposit materials to the Preferred
Beneficiary. However, DSI is entitled to receive any fees due DSI before
making the release. This Agreement will terminate upon the release of the
deposit materials held by DSI.
4.5 USE LICENSE FOLLOWING RELEASE. Unless otherwise provided in the license
agreement, upon release of the deposit materials in accordance with this
Article 4, Preferred Beneficiary shall have a non-exclusive, nontransferable,
irrevocable right to use the deposit materials for the sole purpose of
continuing the benefits afforded to Preferred Beneficiary by the license
agreement. Preferred Beneficiary shall be obligated to maintain the
confidentiality of the released deposit materials.
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ARTICLE 5 -- TERM AND TERMINATION
5.1 TERM OF AGREEMENT. The initial term of this Agreement is for a period of
one year. Thereafter, this Agreement shall automatically renew from
year-to-year unless (a) Depositor and Preferred Beneficiary jointly instruct
DSI in writing that the Agreement is terminated; or (b) the Agreement is
terminated by DSI for nonpayment in accordance with Section 5.2. If the
deposit materials are subject to another escrow agreement with DSI, DSI
reserves the right, after the initial one year term, to adjust the
anniversary date of this Agreement to match the then prevailing anniversary
date of such other escrow arrangements.
5.2 TERMINATION FOR NONPAYMENT. In the event of the nonpayment of fees owed
to DSI, DSI shall provide written notice of delinquency to all parties to
this Agreement. Any party to this Agreement shall have the right to make the
payment to DSI to cure the default. If the past due payment is not received
in full by DSI within one month of the date of such notice, then DSI shall
have the right to terminate this Agreement at any time thereafter by sending
written notice of termination to all parties. DSI shall have no obligation
to take any action under this Agreement so long as any payment due to DSI
remains unpaid.
5.3 DISPOSITION OF DEPOSIT MATERIALS UPON TERMINATION. Upon termination of
this Agreement by joint instruction of Depositor and Preferred Beneficiary,
DSI shall destroy, return, or otherwise deliver the deposit materials in
accordance with Depositor's instructions. Upon termination for nonpayment,
DSI may, at its sole discretion, destroy the deposit materials or return them
to Depositor. DSI shall have no obligation to return or destroy the deposit
materials if the deposit materials are subject to another escrow agreement
with DSI.
5.4 SURVIVAL OF TERMS FOLLOWING TERMINATION. Upon termination of this
Agreement, the following provisions of this Agreement shall survive:
a. Depositor's Representations (Section 1.5).
b. The obligations of confidentiality with respect to the deposit
materials.
c. The licenses granted in the sections entitled Right to Sublicense Upon
Release (Section 3.3) and Use License Following Release (Section 4.5),
if a release of the deposit materials has occurred prior to
termination.
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d. The obligation to pay DSI any fees and expenses due.
e. The provisions of Article 7.
f. Any provisions in this Agreement which specifically state they survive
the termination or expiration of this Agreement.
ARTICLE 6 -- DSI'S FEES
6.1 FEE SCHEDULE. DSI is entitled to be paid its standard fees and expenses
applicable to the services provided. DSI shall notify the party responsible
for payment of DSI's fees at least 90 days prior to any increase in fees.
For any service not listed on DSI's standard fee schedule, DSI will provide a
quote prior to rendering the service, if requested.
6.2 PAYMENT TERMS. DSI shall not be required to perform any service unless
the payment for such service and any outstanding balances owed to DSI are
paid in full. All other fees are due upon receipt of invoice. If invoiced
fees are not paid, DSI may terminate this Agreement in accordance with
Section 5.2. Late fees on past due amounts shall accrue at the rate of one
and one-half percent per month (18% per annum) from the date of the invoice.
ARTICLE 7 -- LIABILITY AND DISPUTES
7.1 RIGHT TO RELY ON INSTRUCTIONS. DSI may act in reliance upon any
instruction, instrument, or signature reasonably believed by DSI to be
genuine. DSI may assume that any employee of a party to this Agreement who
gives any written notice, request, or instruction has the authority to do so.
DSI shall not be responsible for failure to act as a result of causes beyond
the reasonable control of DSI.
7.2 INDEMNIFICATION. DSI shall be responsible to perform its obligations
under this Agreement and to act in a reasonable and prudent manner with
regard to this escrow arrangement. Provided DSI has acted in the manner
stated in the preceding sentence, Depositor and Preferred Beneficiary each
agree to indemnify, defend and hold harmless DSI from any and all claims,
actions, damages, arbitration fees and expenses, costs, attorney's fees and
other liabilities incurred by DSI relating in any way to this escrow
arrangement.
7.3 DISPUTE RESOLUTION. Any dispute relating to or arising from this
Agreement shall be resolved by arbitration under the Commercial Rules of the
American Arbitration Association. Unless otherwise agreed by
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Depositor and Preferred Beneficiary, arbitration will take place in San
Diego, California, U.S.A. Any court having jurisdiction over the matter may
enter judgment on the award of the arbitrator(s). Service of a petition to
confirm the arbitration award may be made by First Class mail or by
commercial express mail, to the attorney for the party or, if unrepresented,
to the party at the last known business address.
7.4 CONTROLLING LAW. This Agreement is to be governed and construed in
accordance with the laws of the State of California, without regard to its
conflict of law provisions.
7.5 NOTICE OF REQUESTED ORDER. If any party intends to obtain an order from
the arbitrator or any court of competent jurisdiction which may direct DSI to
take, or refrain from taking any action, that party shall:
a. Give DSI at least two business days' prior notice of the hearing;
b. Include in any such order that, as a precondition to DSI's obligation,
DSI be paid in full for any past due fees and be paid for the
reasonable value of the services to be rendered pursuant to such
order; and
c. Ensure that DSI not be required to deliver the original (as opposed to
a copy) of the deposit materials if DSI may need to retain the
original in its possession to fulfill any of its other duties.
ARTICLE 8 -- GENERAL PROVISIONS
8.1 ENTIRE AGREEMENT. This Agreement, which includes the Exhibits described
herein, embodies the entire understanding among the parties with respect to
its subject matter and supersedes all previous communications,
representations or understandings, either oral or written. No amendment or
modification of this Agreement shall be valid or binding unless signed by all
the parties hereto, except that Attachment A need not be signed by DSI,
Attachment B need not be signed by Preferred Beneficiary and Attachment C
need not be signed.
8.2 NOTICES. All notices, invoices, payments, deposits and other documents
and communications shall be given to the parties at the addresses specified
in the attached Attachment C. It shall be the responsibility of the parties
to notify each other as provided in this Section in the event of a change of
address. The parties shall have
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the right to rely on the last known address of the other parties. Unless
otherwise provided in this Agreement, all documents and communications may be
delivered by First Class mail.
8.3 SEVERABILITY. In the event any provision of this Agreement is found to
be invalid, voidable or unenforceable, the parties agree that unless it
materially affects the entire intent and purpose of this Agreement, such
invalidity, voidability or unenforceability shall affect neither the validity
of this Agreement nor the remaining provisions herein, and the provision in
question shall be deemed to be replaced with a valid and enforceable
provision most closely reflecting the intent and purpose of the original
provision.
8.4 SUCCESSORS. This Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the parties. However, DSI shall
have no obligation in performing this Agreement to recognize any successor or
assign of Depositor or Preferred Beneficiary unless DSI receives clear,
authoritative and conclusive written evidence of the change of parties.
Etak, Inc. Teletrac, Inc.
Depositor Preferred Beneficiary
By:_____________________________ By:__________________________
Name:___________________________ Name:________________________
Title:__________________________ Title:_______________________
Date:___________________________ Date:________________________
Data Securities International, Inc.
By:________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
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ATTACHMENT A TO EXHIBIT D
MATERIALS TO BE DEPOSITED
Account Number ____________________
Depositor represents to Preferred Beneficiary that deposit materials delivered
to DSI shall consist of the following:
****
Etak, Inc. Teletrac, Inc.
Depositor Preferred Beneficiary
By:_____________________________ By:__________________________
Name:___________________________ Name:________________________
Title:__________________________ Title:_______________________
Date:___________________________ Date:________________________
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ATTACHMENT B TO EXHIBIT D
DESCRIPTION OF DEPOSIT MATERIALS
Account Number______________________________________________________
Depositor Company Name: Etak, Inc.
DEPOSIT TYPE: _______ Initial ______ Supplemental
ENVIRONMENT:
Host System CPU/OS_______________ Version___________ Backup_________
Source System CPU/OS_____________ Version___________ Compiler ______
Special Instructions:_______________________________________________
DEPOSIT COPYING REQUIREMENT:
Hardware needed:____________________________________________________
Software needed/Instructions:_______________________________________
DEPOSIT MATERIALS:
Attachment B Name____________________________ Version_______________
Item label description Media Quantity
**** **** ****
For Depositor, I certify that the For DSI, I certify that the
above described deposit materials deposit inspection has been
have been transmitted to DSI: completed (any exceptions are
noted above):
By_______________________________ By____________________________
Print Name_______________________ Print Name____________________
Date_____________________________ Date of Acceptance____________
ISE__________ EX. B#__________
D(11)
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Etak, Inc.
Value Added Reseller Agreement
Send materials to: DSI, 9555 Chesapeake Dr. #200, San Diego, CA 92123
ATTACHMENT C TO EXHIBIT D
DESIGNATED CONTACT
Account Number_____________________
Notices, deposit material returns Invoices to Depositor should be
and communications to Depositor addressed to:
should be addressed to:
Company Name: Mgr. Contract Company Name: Mgr. Contract
Administration Administration
Address: 1430 O'Brien Drive Address: 1430 O'Brien Drive
Menlo Park, CA 94025 Menlo Park, CA 94025
____________________ ____________________
Designated Contact: Angela Gomez Designated Contact: Angela Gomez
Telephone: (415) 617-4446 Telephone: (415) 617-4446
Facsimile: (415) 617-4456 Facsimile: (415) 617-4456
Notices and communications to Invoices to Preferred Beneficiary
Preferred Beneficiary should be should be addressed to:
addressed to:
_________________________________
Company Name:____________________ _________________________________
Address:_________________________ _________________________________
_________________________ _________________________________
_________________________ Contact:_________________________
Designated Contact:______________ _________________________________
Telephone:_______________________ _________________________________
Facsimile:_______________________ _________________________________
Requests from Depositor or Preferred Beneficiary to change the designated
contact should be given in writing by the designated contact or an authorized
employee of Depositor or Preferred Beneficiary.
Contracts, deposit materials and Invoice inquiries and fee
notices to DSI should be remittances to DSI should be
addressed to: addressed to:
DSI DSI
Contract Administration Accounts Receivable
Suite 200 Suite 1450
9555 Chesapeake Drive 425 California Street
San Diego, CA 92123 San Francisco, CA 94104
Telephone: (619) 694-1900 (415) 398-7900
Facsimile: (619) 694-1919 (415) 398-7914
D(12)
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Date:_________________________________
D(13)
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[****Omitted and Filed Separately With the Commission Pursuant
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Etak, Inc.
Value Added Reseller Agreement
Etak, Inc.
Value Added Reseller Agreement
EXHIBIT E
SOURCE CODE ADDENDUM
Etak, Inc. ("Etak") and Teletrac ("USER") agree that USER shall have
access to and use of certain Etak Software "Software") source code in
accordance with the terms and conditions of this Addendum ("Addendum").
1. DELIVERY OF SOURCE. Upon execution of this Addendum by both parties,
Etak shall deliver to USER source code for Etak Software ("Source"), as
specified in Attachment A to this Addendum. USER shall be entitled to retain
and use Source only if USER continues to fully comply with all of USER's
obligations under the USER Agreement.
2. LICENSE. Etak hereby grants to USER, subject to the terms and conditions
of this Addendum, a nontransferable, non-exclusive license to (i) load Source
on a single CPU at USER's primary business facility in the United States; and
(ii) permit up to three (3) "Designated Employees" of USER to access and use
Source for the sole purpose of "porting" Source to a specified single target
"platform." The single target platform is specified in Attachment A.
"Designated Employee" shall mean a full-time employee of USER who has signed
a non-disclosure agreement with respect to use, confidentiality, security and
other restrictions regarding Source that is consistent with this Addendum.
USER shall indicate on Attachment A the name and title of the Designated
Employees. "Porting" shall mean using Source to create object code that is
executable on the target platform and that duplicates the functionality of
Source (the "Ported Code"). "Platform" shall mean a combination of hardware
and operating system. Upon termination of this Addendum, USER shall return
Source and all copies thereof to Etak and shall certify in writing that USER
has done so and that USER shall make no further use of Source.
Etak also hereby grants to USER, subject to the terms and conditions of this
Addendum, a non-transferable, non-exclusive license (valid as long as the
USER Agreement is in effect) to sublicense the Ported Code to End Users as a
Licensed Product under the terms and conditions of the USER Agreement, as
modified by this Addendum. However, USER shall not sublicense the Ported
Code separately, but only in combination with application software created by
USER. All Ported Code shall be considered a Derivative Product under the
terms of the USER Agreement. USER agrees to provide to Etak a complete and
correct copy of the Ported Code and the "makefile file" used to create the
Ported Code, as well as all associated documentation used in the Porting,
promptly upon creation thereof. However, Etak agrees that it will not
provide a copy of the Ported Code to any third party unless Etak has first
generally released the Ported Code as an Etak Product, in which case Etak may
provide the Ported Code
E(1)
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[****Omitted and Filed Separately With the Commission Pursuant
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Etak, Inc.
Value Added Reseller Agreement
to any third party in accordance with Etak's standard distribution practices.
USER agrees not to use Source for any purpose except as specifically
permitted above in this Section 2. By way of example, and not by way of
limitation, USER shall not reverse engineer, analyze, or modify Source
(except for modifications that are necessary to create operational Ported
Code), nor shall USER rent, disclose, publish, sell, assign, lease,
sublicense, market, or transfer Source to any third party. USER shall not
ship, load or use Source outside the United States. Etak shall provide to
USER source code only for Etak Software as specified in Attachment A, and not
for any other Etak software.
3. PROTECTION OF SOURCE. USER acknowledges that Source is the unpublished,
copyrighted work of Etak, contains valuable trade secrets, and Etak reserves
all rights in the Source not expressly granted to USER by this Addendum.
USER shall not publish or permit others to publish Source. No title to or
ownership of Source is hereby transferred to USER. USER's rights shall at
all times be subject to the use, non-disclosure and other restrictions
contained in this Addendum
USER agrees that Source shall not be duplicated, copied, manufactured or
reproduced in any manner, except for a single archival backup copy. USER
agrees to mark the original and the archival copy with a human-readable
legend stating (i) "CONFIDENTIAL TO AND PROPERTY OF ETAK, INC."; (ii)
"SUBJECT TO USE RESTRICTIONS IN ETAK, INC. LICENSE AGREEMENT"; and (iii)
"COPYRIGHT ETAK, INC. 1984-1997." USER shall not remove or alter such marking.
Source, including all aspects thereof, together with all materials and
knowledge related thereto (the "Confidential Items"), are obtained by USER,
and its employees, agents and representatives, in confidence and in trust and
except as expressly permitted by this Addendum, shall not be used, duplicated
or disclosed by any of them in any form for the use or benefit of any person
or entity, nor reproduced, transcribed, imitated or simulated in whole or in
part. USER shall take all reasonable steps to ensure that the Confidential
Items are not disclosed or duplicated in contravention of this Addendum, to
maintain the confidentiality of Confidential Items and to protect
Confidential Items from misappropriation or misuse, unauthorized duplication
or distribution, including without limitation the exercise by USER of at
least the same degree of care USER employs in protecting its own most
valuable confidential information. USER shall notify Etak promptly if USER
learns of any misappropriation of the Confidential Items or use of the
Confidential Items by anyone in any manner not expressly authorized by this
Addendum, and shall fully
E(2)
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[****Omitted and Filed Separately With the Commission Pursuant
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Etak, Inc.
Value Added Reseller Agreement
cooperate with any efforts by Etak to prevent any misappropriation or misuse
of Confidential Items.
USER agrees that money damages are inadequate to protect Etak's rights under
this Addendum and that Etak shall be entitled to specific performance to protect
its rights hereunder, in addition to any other remedies to which it may be
entitled.
4. DISCLAIMER OF WARRANTIES, LIABILITY.
4.1 SOURCE IS PROVIDED "AS IS" AND "WITH ALL FAULTS." ETAK MAKES NO EXPRESS OR
IMPLIED WARRANTY OF ANY KIND WITH REGARD TO THE SOURCE, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND TITLE. ETAK MAKES NO REPRESENTATION OR WARRANTY THAT USER CAN
SUCCESSFULLY USE SOURCE. NO WARRANTY, INSTALLATION, TRAINING OR SIMILAR
SERVICES WILL BE PROVIDED BY ETAK FOR SOURCE. THE ENTIRE RISK OF PERFORMANCE
AND USE OF SOURCE IS ASSUMED BY USER, WITH USER'S EXPRESS UNDERSTANDING THAT USE
OF SOURCE COULD ADVERSELY AFFECT THE FUNCTIONING OF SOFTWARE OR CORRUPT DATA.
NO ORAL OR WRITTEN ADVICE OR INFORMATION PROVIDED BY ETAK OR ANY OF ITS AGENTS
OR EMPLOYEES SHALL CREATE A WARRANTY AND USER IS NOT ENTITLED TO RELY ON ANY
SUCH ADVICE OR INFORMATION. IF USER REQUESTS, ETAK WILL PROVIDE REASONABLE
CONSULTING SERVICES REGARDING THE SOURCE AT ETAK'S THEN STANDARD TIME AND
MATERIALS RATES.
4.2 IN NO EVENT SHALL ETAK BE LIABLE FOR ANY CLAIM OR LOSS INCURRED BY USER
(INCLUDING WITHOUT LIMITATION COMPENSATORY, INCIDENTAL INDIRECT, SPECIAL,
CONSEQUENTIAL OR EXEMPLARY DAMAGES, LOST PROFITS, LOST SALES OR BUSINESS,
EXPENDITURES, INVESTMENTS, OR COMMITMENTS IN CONNECTION WITH ANY BUSINESS, LOSS
OF ANY GOODWILL, OR DAMAGES RESULTING FROM LOST DATA OR INABILITY TO USE DATA)
IRRESPECTIVE OF WHETHER ETAK HAS BEEN INFORMED OF, KNEW OF, OR SHOULD HAVE KNOWN
OF THE LIKELIHOOD OF SUCH DAMAGES. THIS LIMITATION APPLIES TO ALL CAUSES OF
ACTION IN THE AGGREGATE, INCLUDING WITHOUT LIMITATION BREACH OF CONTRACT, BREACH
OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATION, AND OTHER TORTS.
USER FURTHER AGREES THAT ETAK SHALL NOT BE LIABLE IN ANY EVENT FOR ANY DAMAGES
INCURRED BY USER OR BY ANY OTHER PERSON, ORGANIZATION OR ENTITY AS A RESULT OF
USER'S MISUSE OF SOURCE. NOR SHALL ETAK BE LIABLE FOR ANY CLAIM OR DEMAND
AGAINST USER BY ANY OTHER PERSON, ORGANIZATION OR ENTITY. ETAK SHALL NOT BE
LIABLE TO USER BECAUSE OF ANY EXPIRATION, TERMINATION OR FAILURE TO RENEW OR
EXTEND THIS ADDENDUM, OR FOR FAILURE TO TIMELY DELIVER SOURCE. IF ETAK'S
WARRANTY DISCLAIMER OR LIMITATION OF LIABILITY SET FORTH IN THIS ADDENDUM SHALL
FOR ANY REASON WHATSOEVER BE HELD UNENFORCEABLE OR INAPPLICABLE, USER AGREES
THAT ETAK'S LIABILITY SHALL NOT EXCEED THE FEE PAID BY USER TO ETAK IN
ACCORDANCE WITH SECTION 1 OF THIS ADDENDUM.
E(3)
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Etak, Inc.
Value Added Reseller Agreement
4.3 USER shall protect, defend, indemnify and hold Etak harmless from any and
all claims, demands, liabilities, obligations, deficiencies, losses, damages,
actions, suits, proceedings, assessments, judgments or settlements (including
all reasonable costs and expenses related thereto such as attorneys' fees), that
arise from or are connected with the USER's use of possession of Source or
Ported Code, or, arise from or are connected with any breach by USER of any
provision of this Addendum.
5. TERMINATION. This Addendum shall continue in full force and effect for
the term of the USER Agreement and shall terminate immediately upon
termination of the USER Agreement for any reason. In addition, either party
may terminate this Addendum if the other party fails, neglects or refuses to
comply with the terms of this Addendum.
6. MISCELLANEOUS.
6.1 USER's receipt of any Source shall be deemed conclusive evidence of
USER's agreement that such materials are governed by this Addendum. USER
acknowledges that Etak has made no commitment and has no obligation to
release Source for any future upgrades, enhancements or releases of Software,
or for any other software.
6.2 The terms and conditions of Article 11, "Miscellaneous" of the USER
Agreement are incorporated herein by reference. In the event of any
conflict, the terms and conditions of this Addendum shall govern the use of
Source and the parties' rights and obligations related thereto.
6.3 Except as expressly modified by this Addendum, the USER Agreement remains
in full force and effect in accordance with its terms. USER cannot use
Source in any manner to violate the terms and conditions of the USER
Agreement.
6.4 All of USER's obligations under this Addendum shall survive the
termination of this Addendum or the USER Agreement.
Teletrac, Inc. Etak, Inc.
a Delaware corporation a California corporation
2323 Grand, Suite 1100 1430 O'Brien Drive
Kansas City, Missouri 64108-2670 Menlo Park, California 94025
(816) 474-0055 (415) 328-3825
By:_____________________________ By:__________________________
Name:___________________________ Name:________________________
E(4)
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Etak, Inc.
Value Added Reseller Agreement
Title:__________________________ Title:_______________________
Date:___________________________ Date:________________________
E(5)
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Etak, Inc.
Value Added Reseller Agreement
ATTACHMENT A TO EXHIBIT E
I. Description of Etak Software Source
****
II. Single Target Platform or Specified Single Operating System
****
III. Designated Employees Who Will Access Source
Name:__________________ Title:_____________________
Name:__________________ Title:_____________________
Name:__________________ Title:_____________________
E(6)
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EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
and to all references to our firm included in or made a part of this
Registration Statement (File No. 333-35017) on Form S-1.
Kansas City, Missouri, /s/ Arthur Andersen LLP
October 31, 1997
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Registration Statement of Teletrac Holdings,
Inc. on Form S-1 (File No. 333-35017) of our report dated February 3, 1995,
except for Note 11, as to which the date is September 8, 1995, on our audit of
the financial statements of AirTouch Teletrac General Partnership as of and for
the year ended December 31, 1994. We also consent to the reference to our firm
under the caption "Experts".
Coopers & Lybrand
Newport Beach, California
October 31, 1997
