SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported):January 31, 1997
VERSUS TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-17500 22-2283745
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
2600 Miller Creek Road, Traverse City, Michigan 49684
(Address of principal executive offices) (Zip Code)
Registrant`s telephone number, including area code:(616) 946-5868
2320 W. Aero Park , Traverse City, MI 49686
(Former name or former address, if changed since last report.)
Item 2. Acquisition or Disposition of Assets
Versus Technology, Inc. (``Versus``) and Precision Tracking
FM, Inc. (``PTFM``) of Dallas, Texas, have signed an
Agreement (`The License Agreement`) for Versus to become a
licensee of PTFM`s patents and other intellectual property
rights related to infrared tracking technology. PTFM has
previously been a supplier of infrared components to Versus.
In the future, Versus will control component production.
Subject to certain existing PTFM license and supply
agreements, Versus will become the sole and exclusive PTFM
licensee for a period of 10 years, after which Versus`
rights will become nonexclusive. This licensing arrangement
does not effect PTFM`s non-infrared based tracking and
communication technologies.
Concurrent with executing the License Agreement, a short-
term (one year) Engineering and License Agreement (`The
Engineering Agreement`) was entered into by the parties to
assist Versus in the technology transfer and to support
Versus in use and development of the technology. Under the
Engineering Agreement, PTFM will work over the next twelve
months to help assure a complete technology transfer to
Versus, coupled with a smooth transition to Versus of the
infrared tracking technology & infrared product
manufacturing capabilities. Under the Engineering Agreement,
expense reimbursement payments are estimated at $40,000 per
month during the one year term. As applicable, Versus will
reimburse PTFM for additional authorized expenses.
Versus` infrared patents, especially when combined with the
PTFM patents, gives Versus a significant base of proprietary
intellectual property from which to work.
In consideration of the License Agreement, based on
negotiations between the parties, Versus has agreed to pay
$500,000 in cash and 1.6 million restricted shares of
Versus` common stock. Versus has agreed to enter into a
Registration Rights Agreement with PTFM with respect to
these shares. Versus` cash payments are derived from its
August 1996 private placement proceeds.
Under the terms and substance of the agreements, the
licensing of PTFM`s intellectual property and the short-term
operating arrangements do not constitute the acquisition of
a ``business`` under the SEC`s rules and regulations.
Item 7. Financial Statements and Exhibits
( a ) Not applicable
( b ) Not applicable
( c ) Exhibits
Exhibit 10.1 Agreement with Precision Tracking FM, Inc.,
(`The License Agreement`)
Exhibit 10.2 Engineering and License Agreement with
Precision Tracking FM, Inc.
(`The Engineering Agreement`)
Exhibit 10.3 Form of Registration Rights Agreement
with Precision Tracking FM, Inc.
Exhibit 99 Press Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, hereunder
authorized.
VERSUS TECHNOLOGY, INC.
(Registrant)
By: GARY T. GAISSER
_________________
Gary T. Gaisser
President and Chief Executive Officer
By: DEBRA A. BOYER
__________________
Debra A. Boyer
Chief Financial Officer and
Principal Accounting Officer
February 18, 1997
EXHIBIT 10.1
Agreement with Precision Tracking FM, Inc.,
(`The License Agreement`)
AGREEMENT
This is an agreement made effective as of January 31, 1997
(hereinafter `Effective Date`) by and among Versus
Technology, Inc., a Delaware corporation, whose mailing
address is 2600 Miller Creek Rd.., Traverse City, Michigan
49684, including its parent or subsidiary corporations
(hereinafter `Versus`), and Precision Tracking FM, Inc., a
Texas corporation, whose mailing address is 15001 E.
Beltwood Parkway, Dallas, Texas 75244-2709, including its
parent or subsidiary corporations (hereinafter `PTFM`) and
Alan C. Heller (hereinafter `Heller`).
RECITALS:
A. In addition to non-infrared based tracking and
communication technologies, PTFM is engaged in the
business of manufacturing, selling, installing, licensing
and servicing products which are associated with infrared
data collection and asset location systems. PTFM claims
ownership of various United States and foreign patents,
and certain trade secrets, know how, and other
intellectual property which cover all necessary aspects
of the know how and technology employed by PTFM in the
manufacture, use, sale or licensing of PTFM`s infrared
products. PTFM markets its products both directly from
PTFM to the end user and through various licensees and
distributors.
B. PTFM desires to withdraw from its infrared based business
activities in order to develop, market, and exploit its
non-infrared based intellectual property, and desires to
transfer and exclusively license all such infrared based
intellectual property, and at Versus` option, all such
infrared based business and distribution network, to
Versus pursuant to the terms and conditions of this
Agreement and the other written agreements contemplated
hereby. Versus desires to enhance and expand its
existing infrared technology based business, and desires
substantially to acquire (for at least 10 years) the
infrared business, distribution network, and infrared
based intellectual property of PTFM pursuant to the
terms and conditions of this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING
RECITALS AND THE RECIPROCAL COVENANTS HEREINAFTER
SET FORTH, AND OTHER GOOD AND VALUABLE
CONSIDERATION, THE RECEIPT AND ADEQUACY OF WHICH IS
HEREBY STIPULATED, THE PARTIES AGREE AS FOLLOWS:
1. Grant of License.
(a) Subject to paragraph l.(b) of this Agreement,
PTFM hereby grants to Versus a world wide, fully paid
up and royalty free, sole and exclusive, right and
license (with the right to sub-license) to make, use,
and sell articles or products which employ, practice,
or make use of any or all intellectual property or
proprietary rights to intellectual property, or any
related ancillary rights of PTFM or its affiliates
applicable to products, articles, or devices which
make use of infrared frequencies or infrared
technology, including, without implied limitation, all:
issued or applied for patents, including all
continuation, supplemental, applications or
improvements patents; know how; source codes; mask
works; manufacturing practices and procedures, bills of
material and engineering packages; schematics;
engineering files; customer and supplier data and
information; distribution agreements; manufacture or
supply agreements; firmware; software; confidential
information; trade secrets; enhancement, maintenance
and support agreements, practices and procedures;
modifications, improvements and supplements to any of
the foregoing; the right to receive royalties or other
compensation or remuneration derived from any of the
foregoing; and the like. (hereinafter the `Licensed
Rights` and/or `Assigned Rights`).
(b) For 10 years, Versus will have and enjoy the Licensed
Rights and Assigned Rights, exclusively, free and
clear, and prior in right to, the rights or claims of
any other person or entity whatsoever, including PTFM
and its affiliates; and after 10 years, the rights and
licenses of Versus obtained from PTFM will convert to a
nonexclusive basis, to be used and enjoyed by Versus on
a worldwide and royalty free nonexclusive basis in
perpetuity.
(c) The parties acknowledge and agree that the Licensed
Rights and Assigned Rights may include certain
software, hardware, patents and trade secrets that can
be used in both infrared and non-infrared based
applications. (hereinafter `Dual Use Technology`). The
parties acknowledge and agree that, subject to the
covenants of PTFM and Heller not to compete with
Versus, any license or transfer of PTFM`s rights in the
Dual Use Technology hereunder shall not impair its
rights to exploitation of Dual Use Technology for non-
infrared technology based products.
(d) Pending PTFM`s receipt of all consideration provided
for in paragraph 5, below, the rights granted herein
shall be deemed executory to the extent that no
sublicense, assignment, encumbrance or mortgage of the
Licensed Rights and or/ Assigned Rights, whether
voluntary or involuntary, shall be permitted or be
effective with respect to PTFM`s continuing interest in
the Licensed and/or Assigned Rights, without PTFM`s
express written consent to same. If the consideration
due to PTFM is not timely paid, in whole or in part,
due to the uncured fault or neglect of PTFM as may be
determined by arbitration or a final judgment of a
Court of competent jurisdiction, such failure shall not
adversely affect Versus` right to full and exclusive
use and exploitation of the Licensed Rights and/or
Assigned Rights; and if the consideration due to PTFM
is not timely paid, in whole or in part, due to the
uncured fault or neglect of Versus, PTFM`s remedy
shall be for monetary damages, and under no
circumstances shall the Licensed Rights and/or Assigned
Rights revert to, or be deemed not transferred by, PTFM
to Versus, or otherwise be divested from Versus without
its consent unless and until a judgment for such
monetary damages as may be due has not been paid or
satisfied and levy and execution pursuant to such
judgment has occurred.
2. Technology and Business Transfer.
(a) PTFM`s services and duties described below shall be
rendered pursuant to the accompanying Engineering
Services and License Agreement and Versus shall
compensate PTFM for same in accordance with paragraph 2
thereof. Promptly upon the mutual execution and
delivery of this Agreement, PTFM and Heller will take
such reasonable steps requested by Versus as may be
practicable to ensure a full and complete disclosure
and transfer to Versus of the Licensed Rights and
Assigned Rights, and PTFM and Heller will cooperate
with Versus in helping to ensure a smooth and orderly
transfer to Versus of the infrared related business
activities of PTFM. Whenever deemed desirable by
Versus, and subject to the reasonable availability of
the parties, PTFM and Versus personnel will jointly
notify and personally call on PTFM`s former infrared
customers, suppliers, manufacturers and distributors to
ensure orderly transition of the infrared business and
communication with PTFM`s infrared business network.
Further, PTFM and Heller will use their best reasonable
efforts to cause all necessary deliverables, and all
reasonably necessary personal consultation and
instruction as may be requested by Versus to be fully
and completely supplied to Versus` reasonable
satisfaction not later than 90 days following the
mutual execution and delivery of this Agreement. The
parties hereto mutually intend that, within said 90
days, PTFM shall have supplied or tendered to Versus
all such information and consultation reasonably
necessary to allow Versus and its personnel (assuming
such personnel have reasonable educational credentials,
skill and experience in the field, and sufficient time
to devote to the process, and assuming Versus has all
required facilities and equipment) to fully use,
practice and implement in a practicable and efficient
manner the Licensed Rights and Assigned Rights in the
manufacture, installation, licensing, sale and service
of the infrared products and infrared related business
as theretofore conducted by PTFM prior to the Effective
Date. The date on which PTFM certifies, in writing to
Versus, that all such information, instruction,
consultation, and cooperation has been provided to
Versus, or the date upon which said 90 days has
elapsed, whichever is later, is hereinafter referred to
as the `Completed Transfer Date`. In the event that
Versus may express reasonable dissatisfaction with
PTFM`s performance required under this paragraph,
Versus shall inform PTFM, in writing, of the specific
grounds for such reasonable dissatisfaction within 14
working days of such dissatisfaction or the Completed
Transfer Date, whichever is earlier (the `Notice`).
The Notice shall identify specific, objective and
reasonable means for PTFM to cure. If the date of the
Notice is more than 90 from the Effective Date of this
Agreement and the Notice is timely forwarded, the date
of PTFM`s reasonable and substantial compliance with
such Notice shall constitute the Completed Transfer
Date. Any dispute concerning PTFM`s reasonable and
substantial compliance hereunder shall be subject to
arbitration in Dallas County, Texas.
(b) In order to help ensure a smooth transition of
the PTFM infrared business and technology over to
Versus as above contemplated, to ensure that proper
warranty repairs and service are made for infrared
products sold by PTFM to its customers prior to the
Effective Date, as well as for other necessary business
purposes, Versus, Heller, and PTFM agree to mutually
execute and deliver, concurrently with the mutual
execution and delivery of, and as a condition precedent
to the effectiveness of, this Agreement, the form of
Engineering Services and License Agreement which is
attached hereto and incorporated herein by reference.
3. Assignment of Trademarks and Trade Names.
PTFM hereby agrees to transfer and assign to Versus`
ownership `as is`(and where possible, registered
ownership) of the following trademarks or trade names
owned by PTFM which have been used on the infrared
technology based goods or products sold by PTFM prior to
the date of this Agreement: `Collect IR,` `Argus,`
`FactoryVision,` `OmniVision,` `Phone Talker,`
`PhoneVision` and `Precision Tracking.` Promptly upon
the mutual execution and delivery of this Agreement, PTFM
shall execute such documents, and file them with the
State of Texas as may be necessary to remove the words
`Precision Tracking` from its corporate name, and will
execute and deliver in recordable form such documents of
transfer as Versus may reasonably request to convey and
transfer to Versus ownership of the foregoing trademarks
and trade names.
4. Transfer of Distribution Network; Assignment and
Assumption of Agreements.
At Versus` option, which may be exercised at any time, in
whole or in part, and from time to time, there shall be
assigned by PTFM to Versus, and Versus shall assume,
ownership and control of PTFM`s infrared product
distribution network, OEM Agreements, licenses and other
contracts to which PTFM may presently be a party relating
to the manufacture, use, sale or distribution of infrared
products (the `Existing PTFM Contracts`). Until such time
as Versus exercises its option, PTFM shall timely and
fully service, pursuant to their terms, all of the
Existing PTFM Contracts; after the exercise of Versus`
option and the consummation of the assignment and
assumption contemplated thereby, Versus shall timely and
fully service, pursuant to their terms, all of such
agreements. Following the Effective Date hereof and
pending Versus` acceptance of assignment of the Existing
PTFM Contracts, Versus shall warranty all products
approved by Versus and supplied by PTFM within such
period of time pursuant to those Existing PTFM Contracts.
The warranty shall be the same as, and be subject to the
same limitations as, the PTFM warranty contemplated by
paragraph 3(B) of the Engineering Services Agreement. In
the event any Existing PTFM Contracts continue in force
after the termination date of the Engineering Services
and License Agreement and Versus shall have failed to
request assignment of same from PTFM, then in that event,
Versus shall enter into an OEM Agreement with PTFM,
making Versus` infrared based products available to PTFM
upon the identical terms and conditions as Versus` June
30, 1995 OEM Agreement with PTFM, to the limited extent
necessary for PTFM to continue its performance under any
remaining Existing PTFM Contracts. The Existing PTFM
Contracts are attached hereto as Exhibit A and
incorporated herein by reference.
5. Payments From Versus to PTFM.
Concurrently with the mutual execution and delivery of
this Agreement Versus will pay $250,000.00 in cash to
PTFM. In addition, on the Completed Transfer Date,
Versus shall pay to PTFM an additional $250,000.00 in
cash. In addition, as promptly as practicable following
the Effective Date, Versus will issue and register in the
name of PTFM a certificate for such number of shares of
Versus common stock as is derived from dividing into
$1,000,000.00 the `Market Price of Versus Common Stock as
of the Effective Date.` (For purposes of this Agreement,
the `Market Price of Versus Common Stock as of the
Effective Date` shall be one half of the sum of the bid
and asked prices for all Versus common stock traded
during the week ending on the Friday immediately
preceding the Effective Date of this Agreement, for such
trades as are publicly reported on the NASDAQ Bulletin
Board or other then applicable public reports concerning
public transactions in shares of Versus` issued and
outstanding common stock. ) PTFM shall make such written
disclosures and representations and warranties, and shall
fully cooperate with, Versus and its counsel as may
reasonably be requested by them concerning compliance
with any applicable securities laws, rules or regulations
applicable to the issuance of such Versus shares to PTFM
or the filing of any registration statement applicable to
such shares. The certificates for the shares of Versus
common stock to be issued to PTFM will contain a legend
on the face thereof which will preclude PTFM from selling
or otherwise transferring such shares until the later of
October 1, 1997 or the date upon which there is an
effective SEC registration statement applicable to such
shares which will allow them to be publicly traded.
Versus hereby covenants and agrees to use its best good
faith efforts, at its expense, within two months
following the Effective Date of this Agreement, to
commence (and to diligently pursue to completion
thereafter) the filing of such SEC and state blue sky
registrations as may be necessary to permit such shares
to be freely tradable by PTFM upon the later of October
1, 1997 or the completion of the registration process.
If feasible, the stock to be issued to PTFM hereunder
shall be included in Versus` first registration statement
filed after Versus` 1996 private placement offering.
PTFM and Versus will mutually execute and deliver upon
the Effective Date of this Agreement the form of
Registration Rights Agreement attached hereto as Exhibit
B and incorporated herein. If Versus fails to fully and
timely pay any of the consideration contemplated in this
paragraph and fails to cure such breach within 15 days of
written notice of breach to Versus, then in that event
PTFM shall be entitled to pursue its available legal and
equitable remedies by way of arbitration in Dallas
County, Texas.
6. Enforcement and Maintenance of Patents; Indemnity.
(a) Versus, at its own expense, shall have the right and
power (but not the obligation) to institute and
prosecute or settle suits in its own name, or, if
required by law, jointly with PTFM, for infringement of
any patent legally or beneficially owned by PTFM or the
other parties to this Agreement which is included as
part of the Licensed Rights and/or Assigned Rights
under this Agreement. PTFM will give Versus such
reasonable assistance and cooperation in connection
therewith as Versus may reasonably request. Versus
shall be entitled to retain any awards, settlements or
damages which may be recovered as a result of any such
suits.
(b) PTFM shall take all such steps, and will timely pay
such fees and make such filings, as may be required to
maintain in full force and effect PTFM`s presently
existing patents identified in Exhibit C attached to
this Agreement.
(c) For claims first asserted during such time as PTFM is
required to perform services under the Engineering
Services and License Agreement which is attached hereto
and incorporated herein by reference, PTFM will
indemnify, defend, and save Versus harmless from any
cost or expense (including attorney fees and expenses)
arising from any claim of infringement of any United
States patent or wrongful use of proprietary
information of any third person, whose intellectual
property Versus` current infrared technology does not
otherwise infringe upon, insofar as such claim is based
upon an assertion that the infringement or wrongful use
is attributable to Versus` use or application of the
Licensed Rights and/or Assigned Rights.
7. Representations and Warranties.
7.1 PTFM represents and warrants to Versus that:
(a) the patents and intellectual property being
licensed to Versus by PTFM do not, and for the term of
the Engineering Services Agreement, Versus` use thereof
will not infringe upon the rights of any third party
except to the extent that Versus` presently existing
infrared based intellectual property may so infringe;
(b) except to the extent that Versus` presently existing
infrared based intellectual property may infringe upon
the rights of any third party, upon receipt of the
package constituting the Licensed Rights and Assigned
Rights, and subject to training through the Completed
Transfer Date, Versus will, at a minimum, possess all
information, know how and rights necessary effectively
to make, use and sell, without the necessity to obtain
any further rights, licenses, information or agreements
from or with anyone else, any or all of the infrared
products which are the subject of this Agreement,
including without limitation, any products which were
covered by any written agreement between PTFM and
Versus existing prior to the Effective Date of this
Agreement;
(c) PTFM has not granted to or made commitments to grant to
any other person or entity any rights or licenses to
make, use or sell infrared products employing the
Licensed Rights or Assigned Rights except for the
following agreements, a true and complete copy of each
of which, as in force on the Effective Date, has been
delivered to Versus:
(1)Emtrak
(2)Codem
(3)Continuum Production Corp. (`CPC`)
(4)Arial
(5)Entouch;
(d) Exhibit C, attached hereto contains a full and complete
list of all patents and patent applications legally or
beneficially owned or enjoyed by PTFM or Heller which
are applicable to the manufacture, use or sale of
infrared products made or sold by PTFM at any time
prior to the Effective Date of this Agreement;
(e) PTFM understands the shares of Versus common stock to
be issued to PTFM pursuant to the terms of this
Agreement (the `securities`) have not been registered
under the Securities Act of 1933, as amended (the
`Act`), and may not be sold except pursuant to an
effective registration statement, or pursuant to a duly
available exemption from such registration
requirements; PTFM is acquiring the securities for its
own account, for purposes of investment, and not with a
view to or for sale that would be in violation of the
Act; PTFM is not an `accredited investor` as such term
is defined in Rule 501(a)(1) of Regulation D under the
Act, but has such knowledge and experience in financial
and business matters that it is capable of evaluating
the merits and risks of the acquisition of the
securities, and having had access to, or having been
furnished with all such information as it has
considered necessary, has concluded that it is able to
bear those risks; the securities were not offered or
sold to PTFM by any form of a general solicitation or
general advertising; if any transfer of the securities
is to be made in reliance on an exemption under the
Act, the issuer of the securities may require an
opinion of counsel satisfactory to it that such
transfer may be made pursuant to an exemption under the
Act; in making any subsequent offering or sale of the
securities PTFM will be acting only for itself and not
part of a sale or planned distribution that would be in
violation of the Act; and, to the best of PTFM`s
knowledge, the acquisition of the securities does not
violate any law or regulation applicable to it or its
business;
(f) The product names identified in paragraph 3, above,
constitute all of the names legally owned by PTFM for
infrared based products made, marketed and sold by
PTFM;
(g) PTFM is aware of no claims, rights of off-set or causes
of action of any kind, existing or potential, which it
may have against Versus, and PTFM is aware of no
impediment to Versus` ability to perform in accordance
with this Agreement and the accompanying Engineering
Services and License Agreement;
(h) The execution and delivery of this Agreement and the
other agreements contemplated hereby, and the
performance hereunder and thereunder, by PTFM, has been
approved in writing by PTFM`s Board of Directors and by
all requisite shareholder action;
(i) A true and complete copy of each of the Existing PTFM
Contracts as in force on the Effective Date is attached
hereto as Exhibit A.
7.2 Versus Warrants and Represents to PTFM that:
(a) Versus is aware of no claims, rights of off-set or
causes of action of any kind,existing or potential, which
it may have against PTFM or Heller;
(b) Versus is aware of no impediment to PTFM`s ability to
perform in accordance with this Agreement and the
accompanying Engineering Services Agreement;
(c) The execution and delivery of this Agreement and the
other agreements contemplated hereby, and the
performance hereunder and thereunder, by Versus, has
been approved in writing by Versus` Board of Directors.
8. Force Majeure.
`Force Majeure` shall mean war, fire, flood, strike,
labor trouble, breakage of equipment, accident, riot,
action of governmental authority, or contingencies beyond
the reasonable control of the parties which prevent
performance of obligations under this Agreement. If a
Force Majeure circumstance occurs, the party so affected
shall be excused from the performance of the particular
obligation affected during the period of the Force
Majeure circumstance.
9. No Personal Liability.
Notwithstanding any provision herein to the contrary,
Heller shall not be personally liable for monetary
damages for any breach of contract or duty relating to
this Agreement and Versus` sole remedy for monetary
damages shall be limited to PTFM.
10. Miscellaneous.
This Agreement shall inure to the benefit of and be
binding upon the heirs, personal representatives,
successors and assigns of the respective parties hereto.
This Agreement, and the other documents and agreements
mentioned herein, constitute and fully integrate the
entire understanding between the parties hereto, and is
intended to supersede and cancel all prior written or
oral understandings between them dealing with the subject
matter hereof which have accrued prior to the date of
this Agreement. This Agreement may not be changed
orally, but only in writing, signed by the party against
whom enforcement of any waiver, change, amendment,
modification, extension or discharge is sought. No other
warranties, representations or covenants exist that are
not herein contained. All notices required or authorized
under this Agreement shall be in writing and shall be
deemed to have been duly given on the date of service if
served personally on the party to whom notice is to be
given, or the second day after mailing, if mailed to the
party to whom notice is to be given by first class mail,
registered or certified, postage prepaid and addressed to
the respective parties at the addresses set forth above,
unless and until a different address shall be furnished
in writing by any party desiring to change such address
to the other party, or if no such address is set forth
with respect to any such party, then by personal delivery
or registered or certified mail, postage prepaid, to the
principal office of such party, or alternatively, the
personal residence of such party, all as last known to
the party giving such notice. For each term and pronoun
used in this Agreement, the singular number includes the
plural number, and vice versa, and any gender, whether
masculine, feminine, or neuter, includes the other
genders, as appropriate and as the context may reasonably
require. The invalidity of any paragraph, provision or
part hereof shall not affect the validity of any other
paragraph, provision or part hereof. This Agreement
shall be construed as a whole and in accordance with its
fair meaning. Captions, if any, and organization are for
convenience and shall not be used in construing its
meaning. This Agreement may be executed in one or more
counterparts, all of which shall constitute one and the
same instrument and each one of which shall be deemed an
original. Each party shall, upon reasonable request,
execute and deliver such other and further documents as
may be necessary and proper to effectuate this Agreement.
This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Michigan,
excluding any conflicts-of-law rule or law which refers
to the laws of another jurisdiction. Any dispute or
controversy arising under, out of or in connection with,
or in relation to any promises by Versus hereunder (or
any amendments hereto)to pay to PTFM money, shares or
compensation shall be determined and settled by
arbitration in Dallas County, Texas, in accordance with
the rules of the American Arbitration Association and
Texas law. Any award rendered by the arbitrator shall be
final and binding upon each of the parties, and judgment
thereof may be entered in any court having jurisdiction
thereof. During the pendency if any such arbitration and
until final judgment hereon has been entered, this
Agreement shall remain in full force and effect. The
party in whose favor a money judgment may be entered
shall be entitled to recover its reasonable expenses,
attorneys fees and costs of arbitration. In the event of
litigation arising under or in connection with any other
matter or circumstances, each party consents to the
exclusive in personam jurisdiction of the state courts of
the State of Michigan, with venue in Traverse City,
Michigan, and the nonprevailing party agrees to pay the
prevailing party`s actual attorney`s fees and expenses in
connection with any such litigation, in addition to any
costs, remedies or damages the court may award. This
Agreement constitutes the jointly bargained agreement of
the parties, and the construction of this Agreement shall
not be altered or influenced by the fact or presumption
that one party had a greater or lesser hand in drafting
this Agreement. Any Recitals are hereby made a part of
this Agreement and all exhibits, attachments, and
schedules, if any, attached to this Agreement are hereby
incorporated herein by reference for all applicable
purposes. If the date for performance of any act
hereunder falls on a Saturday, Sunday, or legal holiday,
then the time for performance thereof shall be deemed
extended to the next successive business day. Whenever
it is provided in this Agreement that days be counted,
the first day to be counted shall be the day following
the date on which the event causing the period to
commence occurs. This Agreement is intended solely for
the benefit of the parties hereto and their successors,
heirs and assigns, and may not be relied upon or enforced
by any third party beneficiary.
IN WITNESS WHEREOF, THE PARTIES HAVE MUTUALLY EXECUTED
AND DELIVERED THIS AGREEMENT, EFFECTIVE AS OF THE DATE
FIRST ABOVE STATED.
Versus Technology, Inc. Precision Tracking FM, Inc.
By: Gary T. Gaisser By: Alan C. Heller
__________________________ ___________________________
Gary T. Gaisser, President Alan C. Heller, President
Alan C. Heller
______________________________
Alan C. Heller, individually
License Agreement Exhibit ` A `:
Precision Tracking FM Contracts
1. Software License and Value added
Reseller Agreement - T Cubed, (D) 7/12/96
2. Letter to Ms Donna Assemany
from Southwestern Bell (D)6/25/93
3. Release and License Agreement CPC
(Interactive Home Systems) (D) 8/23/94
4. EMTRAK/EMPAK
A. Letter to Rik Heller (D) 6/17/96
B. Settlement Agreement (D) 3/95
5. TRL
Tag Manufacturing Venture Operating Summary (D) 7/21/95
A. Original Equipment Manufacturer`s
Reseller Agreement (D) 7/24/95
B. Amendment to Original Equipment
Manufacturer`s Reseller Agreement (D)10/24/95
6. OEM Agreement - Versus (D) 6/30/95
7. Technology License Agreement - CODEM (D)10/24/94
8. Rauland-Borg
A. Original Equipment Manufacturer`s
Reseller (D) 9/02/93
B. Copyright License (D) 3/30/94
C. License Agreement (D)12/29/95
9. Precision Tracking FM, Inc. Buyer
Agreement-Zettler (D) 9/01/95
10. Reseller Agreement - Dukane (D) 3/23/95
11.Turnkey Manufacturing Agreement - Ember (D) 4/26/94
12.ESSI Software Systems Incorporated/ Letter
to Richard Fettig (D)12/28/94
13. Distributorship Agreement - AST&T (D)12/12/95
14. Dealer Agreement - ISOELECTRA BV (D) 7/25/95
15. Miscellaneous Dealer Agreements
Precision Tracking License Agreement EXHIBIT` B ` :
Registration Rights Agreement,
separately bound, See Exhibit 10.3
Precision Tracking License Agreement EXHIBIT ` C ` :
Precision Tracking FM Patent List
1. United States Patent
Location System Adapted For Use
In Mulitpath Environments (D) 6/02/92
2. United States Patent
Optical Receiver For Area Location System (D) 1/04/94
3. United States Patent
Method For Receiving Optical Receiver
For Area Location System (D)10/11/94
4. United States Patent
Method For Receiving And Transmitting
Optical Data and Control Information To
And From Remotely Located Receivers and
Transmitters In An Optical Locator System (D) 2/07/96
5. United States Patent Method and Apparatus
For Locating Personnel and Objects In
Response To Telephone Inquiries (D) 8/20/96
6. United States Patent Sensory and Control
System for Local Area Networks (D)11/05/96
EXHIBIT 10.2
Engineering and License Agreement
with Precision Tracking FM, Inc.
(`The Engineering Agreement`)
ENGINEERING SERVICES AND LICENSE AGREEMENT
This is an agreement made effective as of January 31 ,1997
(the `Effective Date`) by and among Versus Technology, Inc.,
a Delaware corporation, including its parent or subsidiary
corporations, whose mailing address is 2600 Miller Creek
Rd., Traverse City, Michigan 49684 (hereinafter `Versus`),
Precision Tracking FM, Inc., a Texas corporation, including
its parent or subsidiary corporations, whose mailing address
is 15001 E. Beltwood Parkway, Dallas, Texas 75244-2709
(hereinafter `PTFM`), and Alan C. Heller (hereinafter
`Heller`).
RECITALS:
A. PTFM and Versus are parties to an agreement of even date
herewith (the `Agreement`) pursuant to which Versus has
become the licensee of certain intellectual properties of
PTFM relating to products employing infrared technology,
and pursuant to which Versus will take over management of
existing contracts with PTFM`s existing resellers and the
manufacturing and sales of PTFM`s infrared technology
based products.
B. To help assure continuity in the implementation of the
business and technology transfer contemplated by the
Agreement, and to obtain help in further developing the
market for and products based upon infrared technology,
Versus desires to employ the services of PTFM (with
Heller as its chief executive officer), as an independent
contractor and consultant for the purpose of coordinating
the infrared sales and service business formerly owned by
PTFM. Versus is also willing to grant back to PTFM a
limited license to make, use, and sell infrared products
to the limited extent necessary for PTFM to complete its
performance under the Existing PTFM Contracts (as
defined in paragraph 4 of the Agreement), but without any
extensions, renewals or modifications being made thereto
by PTFM, pursuant to the terms and conditions of this
Engineering Services and License Agreement.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS
1. Term.
_____
The term of this Engineering Services and License
Agreement shall commence as of the Effective Date and
shall end at such time as PTFM has performed services and
incurred expenses pursuant hereto on Versus` behalf in
the sum of $480,000, or on the first anniversary of the
Effective Date, whichever shall come first; provided,
however, the term of the limited license granted to PTFM
hereunder shall be extended, as necessary to permit PTFM
to remain in compliance with any Existing PTFM Contract
with respect to which PTFM may still have obligation
after termination hereof.
2. Compensation and Reimbursement to PTFM; Accounting.
__________________________________________________
2.1 Versus shall pay to PTFM during the 12 months following
the Effective Date the sum of $480,000 (excluding
payments applicable to Additional Authorized Expenses, as
hereinafter defined in subsection 2.2), in return for
which PTFM shall make its employees and internal
resources available to Versus to perform such support,
training, management and development services as
elsewhere described herein. Versus shall pay such sum to
PTFM based on average anticipated billings of $40,000 per
month (excluding Additional Authorized Expenses). PTFM
will submit to Versus a detailed invoice on or before the
10th day of each month following the month in which the
services billed for were performed (the `Invoice(s)`).
The Invoices shall itemize the time, costs and expenses
paid or incurred by PTFM in its performance of the duties
set forth in paragraphs 3 and 4, below, (except no time,
costs or expenses attributable to subparagraph 3(B) will
be invoiced to or otherwise be the responsibility of
Versus). The Invoices shall itemize, at PTFM`s cost, all
costs and expenses reasonably incurred in the performance
of this Engineering Services and Licensing Agreement for
which PTFM shall be reimbursed, including a separate
allocation of the costs of : PTFM`s (1) office
facilities, equipment, utilities, copying, fax, postage
and similar office overhead expenses allocable to
performance of services for Versus hereunder, which
office overhead expenses are currently estimated to
aggregate, and shall not without Versus` prior approval
exceed, approximately $4,000 per month, plus (2) out of
pocket travel-related expenses for the first 24 trips
from Dallas, Texas to Traverse City, Michigan, and the
first trip to any currently existing distributor,
reseller or customer of PTFM which are made during the
term of this Engineering Services and Licensing Agreement
by Heller or Richard Fettig or other necessary PTFM
personnel at the request of Versus (to be counted as one
trip for each person Versus requests), plus (3) the time
based fees of PTFM applicable to performance of PTFM`s
duties set forth in paragraphs 3 and 4 of this
Engineering Services and Licensing Agreement (other than
subparagraph 3(B)), which time based fees are estimated
to aggregate, and shall not without Versus` prior
approval exceed, approximately $25,200 per month, as
follows: Heller - $12,960; Fettig - $8,640; Internal
Clerical/Bookkeeping - $3600; plus (4) miscellaneous
incidental travel or other expenses, if any, not to
exceed an average of $10,800 per month (provided,
however, that at such time as Versus has approved the
adding of a technician, the amount budgeted in item (3)
shall be increased to $30,000 and the preceding $10,800
budgeted amount shall be reduced to $4,000. The
immediately preceding items (1) through (4) are herein
referred to as the `Budgeted Items.` The Invoices shall
itemize the nature of, date performed, and time spent
with respect to each service performed hereunder, showing
the name of the person performing the service, and the
hourly rate of such person. The hourly rate for Alan C.
Heller shall be $90. The hourly rate for Richard G.
Fettig shall be $60. The hourly rate for internal
clerical and bookkeeping services performed by personnel
other than Heller and Fettig shall be $25.00. The hourly
rate for internal technicians other than Heller and
Fettig shall be $40.
2.2 From time to time PTFM may, with Versus` prior
authorization, make use of outside contractors in order
to perform services pursuant to this Engineering Services
and Licensing Agreement. In the event outside
contractors are so utilized, PTFM will document and
Versus shall pay the total reasonable amount billed by
said contractors. In addition, Versus will reimburse
PTFM for any direct out of pocket costs of goods sold
which are paid or incurred by PTFM in connection with
goods sold or supplied by PTFM in fulfillment of the
Existing PTFM Contracts during the term of this
Engineering Services and License Agreement prior to the
assignment of the applicable Existing PTFM Contract to
Versus or such contract`s termination, whichever first
occurs. In addition, Versus will reimburse PTFM for any
direct out of pocket travel expenses of PTFM`s personnel
which may be incurred by PTFM at Versus` request, to the
extent such travel expenses exceed the core estimated
travel expenses contemplated by the Budgeted Items. The
amounts to be paid by Versus pursuant to this paragraph
2.2 are herein referred to as `Additional Authorized
Expenses.` Each monthly Invoice shall separately state
what amounts, if any, are applicable to Additional
Authorized Expenses and which amounts are applicable to
the Budgeted Items.
2.3 At the end of the term of this Engineering Services and
License Agreement the parties shall render to each other
an accounting of the Invoices, the Additional Authorized
Expenses, and the sums paid to PTFM by Versus under or in
connection herewith. To the extent that the amounts paid
by Versus pursuant to the Invoices for Budgeted Items
shall have exceeded the actual amounts earned by PTFM
from time based fees and cost pass through of authorized
expenses, such amount shall be promptly repaid to Versus
by PTFM, or shall be credited against any sums Versus may
owe for the Additional Authorized Expenses. In the event
the accounting shall disclose that Versus has failed to
pay any sums due under this Engineering Services and
License Agreement, Versus shall promptly pay the same.
3. Services.
________
During the term of this Engineering Services and License
Agreement, PTFM will maintain offices and make
arrangements for manufacturing facilities, supplies,
equipment and staffing necessary to:
(A) perform and complete all services requested by Versus
which may be necessary to correct errors which may
exist in any engineering or end user documentation
applicable to the installation, use, maintenance,
modification or performance of the hardware, software
or firmware associated with the infrared technology
based products sold by PTFM. PTFM shall also use its
best efforts to assist Versus in correcting or
completing any of Versus` own documentation related to
infrared products or services sold or supplied by
Versus; and
(B) with respect to only those infrared based products
shipped by PTFM prior to the Effective Date, perform
limited warranty services in accordance with the terms
of any written, limited warranty extended by PTFM to
its customers at the time the product was sold.
Without any indemnity by Versus being made or implied,
the parties agree that PTFM`s maximum liability under
its warranties, if any, shall be limited to the repair
or replacement of product, at PTFM`s sole discretion,
at such facility as PTFM may designate; and
(C) perform all PTFM obligations under the Existing PTFM
Contracts, pending their assignment to Versus or
expiration of the terms thereof, and perform support
services to existing customers of infrared products
sold by or through PTFM prior to the Effective Date, or
pursuant to the license granted under this Engineering
Services and License Agreement; and
(D) Make available to Versus all deliverables,
information, copies of documents, consultation and
instruction as may be reasonably requested by Versus in
order to fully implement and carry out the intent of
the Agreement; and
(E) provide to Versus such communication and information
as may be reasonably requested by Versus from time to
time concerning PTFM`s manufacture, marketing and sale
of infrared based products, including, without implied
limitation, any details or information concerning
PTFM`s infrared based business with its existing
customers, dealers, distributors, resellers,
manufacturers, suppliers, licensees, or their
affiliates; and
(F) provide such product development information, designs
and services regarding new infrared technology products
as may be reasonably requested by Versus; and
(G) take all such reasonable action that Versus may deem
necessary or desirable to preserve and protect the
existing good will and customer and distribution
network of PTFM for its infrared products, and
cooperate with the transfer of all Existing PTFM
Contracts as and when requested by Versus.
4. Developments and Confidential Information.
_________________________________________
During the term of this Engineering Service and
Licensing Agreement, PTFM and Heller
(A) agree to promptly inform Versus of the full details of
all inventions, discoveries, concepts, and ideas,
whether patentable or not including, but not limited to
hardware and apparatus, processes and methods,
formulae, computer programs and techniques, as well as
any improvements and related knowledge of which they
may conceive, complete or reduce to practice (whether
alone or jointly with others) during the term of this
Engineering Services and Licensing Agreement which
employ or may reasonably be calculated to employ
infrared based technology (the `Developments`); and
(B) agree to assign, and hereby do assign, to Versus or
Versus` designee, their entire right, title and
interest in: (1) the Developments; (2) all trademarks,
copyrights and mask work rights in the Developments;
and (3) all patent applications filed and patents
granted on the Developments, including those in foreign
countries, which they conceive of or make (whether
alone or with others) during the term hereof or within
one year thereafter; and
(C) during the term of this Engineering Services and
License Agreement and for one year thereafter, they
agree to execute such documents as may be reasonable
and necessary for Versus to obtain or maintain infrared
technology related patents in and to the Developments,
whether during the prosecution of patent applications
or in connection with infringement litigation (all of
their expenses to be borne by Versus); and
(D) agree not to use or disclose (except as their duties
for Versus may require) any of Versus` Confidential
Information, including confidential information
concerning the Developments, without Versus` written
consent. They understand that this obligation remains
with them for a reasonable period (not to exceed 5
years) from the termination of this Engineering
Services and License Agreement.
`Confidential Information` means information or
material, clearly marked `confidential Information
of Versus` (or other similar words which clearly
give substantially the same message) , which is not
generally available to or used by PTFM or Heller
except by virtue of this Engineering Services and
License Agreement, or of which the utility or value
is not generally known or recognized by PTFM, Heller
or similar companies as standard practice, whether
or not the underlying details are in the public
domain. Confidential Information includes:
information or materials which relate to Versus`
presently existing inventions, the Developments,
`know-how,` purchasing, accounting, merchandising,
or licensing; trade secrets, as defined in the
Restatement of Torts; software in various stages of
development (source code, object code,
documentation, diagrams, flow charts), designs,
drawings, specifications, models, data and customer
information; and any information of the type
described above which Versus obtained from another
party and which Versus treats as proprietary or
designates as confidential, whether or not owned or
developed by Versus and not otherwise known to PTFM
or Heller.
(E) agree to make available to Versus, on or before the
date this Engineering Services and Licensing Agreement
terminates, and in any event, promptly upon request,
all documents and things in their possession pertaining
to PTFM`s infrared technology products or services, or
the business of Versus, including, but not limited to
Versus` Confidential Information. If documents and
things pertaining to the business of Versus or
originating with Versus come into their possession or
are discovered after the term hereof, they will
promptly notify Versus and make same available to
Versus; and
(F) agree that all Developments (whether created alone or
jointly with others) pursuant to this Engineering
Services and Licensing Agreement (including, but not
limited to, computer programs, listings, design
specifications, flow charts and documentation) are
works made for hire under the United States Copyright
Laws and are the sole and exclusive property of Versus.
In the event a court of competent jurisdiction
determines that any of the Developments are not `works
made for hire` under the United States Copyright Laws,
this document shall operate as an irrevocable
assignment to Versus of all rights related to the
copyrights in the Developments.
(G) agree to assign, and do assign, to Versus or Versus`
designee their entire right, title and interest in all
mask works (as the Semiconductor Chip Protection Act,
17 U.S.C. Section 901, defines the term) related to the
Developments which they create (whether alone or
jointly with others) for Versus hereunder.
(H) agree to include the appropriate proprietary rights
notice on all materials, mask works, masks, and
semiconductor chip products embodying mask or copyright
works related to the Developments which they create
(whether alone or jointly with others) for Versus
hereunder.
(I) represent that, except as set forth in the Existing
PTFM Contracts (Exhibit A to the Agreement) they have
no agreements with or obligations to others concerning
any Developments or Confidential Information, nor,
except as indicated in said Exhibit A, do they have any
agreements or obligations that might conflict with this
Engineering Services and License Agreement.
PTFM shall take all reasonable and necessary steps with
respect to each of its employees or consultants who
shall remain with PTFM during the term of this
Engineering Services and License Agreement to insure
that they are obligated in writing to PTFM in such
manner as is consistent with PTFM`s obligations to
Versus under paragraph 4 hereof.
5. License to PTFM.
_______________
Upon request by Versus, PTFM shall make assignment to
Versus of Existing PTFM Contracts. Pending such
request, PTFM shall retain a license from Versus to the
extent necessary to comply with PTFM`s obligations under
the Existing PTFM Contracts. During the term of this
Engineering Services and License Agreement, and pending
the assignment to and assumption by Versus of such
Existing PTFM Contracts, PTFM shall continue to perform
under its contracts and pass through to Versus all
Additional Authorized Expenses and all gross receipts or
accounts receivable first attributable to such Existing
PTFM Contracts after the Effective Date. Versus shall
compensate PTFM for PTFM`s billable time and expenses
incurred in fulfilling said Existing PTFM Contracts in
accordance with paragraph 2, above. If PTFM shall remain
obligated under any Existing PTFM Contracts at the
termination of this Engineering Services and License
Agreement, then in that event Versus shall enter into an
OEM Agreement with PTFM, making Versus` infrared based
products available to PTFM upon the identical terms and
conditions as Versus` June 30, 1995 OEM Agreement with
PTFM, to the limited extent necessary for PTFM to
continue its performance under any remaining Existing
PTFM Contracts until they expire by their terms.
6. Force Majeure.
______________
`Force Majeure` shall mean war, fire, flood, strike,
labor trouble, breakage of equipment, accident, riot,
action of governmental authority, or contingencies beyond
the reasonable control of the parties which prevent
performance of obligations under this Engineering
Services and License Agreement. If a Force Majeure
circumstance occurs, the party so affected shall be
excused from the performance of the particular obligation
affected during the period of the Force Majeure
circumstance.
7. No Personal Liability.
______________________
Notwithstanding any provision herein to the contrary,
Heller shall not be personally liable for monetary
damages for any breach of contract or duty relating to
this Engineering Services and License Agreement and
Versus` sole remedy for monetary damages shall be limited
to PTFM.
8. Covenants Not to Compete.
___________________________
For the period beginning on the Effective Date of this
Engineering Services and License Agreement and ending ten
years following same, neither PTFM nor Heller will aid
or assist any competitor of, or compete with, Versus in
the infrared based technology market, nor will they make,
sell, service, or consult with respect to any products
which make use of infrared technology (except for Versus`
sole benefit). PTFM and Heller further agree, for a
period beginning on the Effective Date and ending three
years after the Completed Transfer Date (as defined in
the Agreement) that they shall not themselves make or
sell, nor shall they knowingly and intentionally aid or
assist any person or entity to make or sell any product
or service which competes with Versus in any North
American market in which Versus markets and sells, or is
attempting to market and sell, the following existing
products of Versus:
1. Mobil Alarm Product Security;
2. Trigger alarm home security system with cellular
telephone back-up (an example of which is used by
Brinks Security);
3. Machining software for use in mold making;
4. Data-base software products for use in machining;
5. Video compression software (an example of which is
used by TVX);
6. Infrared to Radio frequency data transmission;
7. Products designed and manufactured by or for Versus
for in-door tracking of personnel or equipment.
9. Heller`s Personal Services.
___________________________
Heller agrees to devote an average of not less than 36
hours per week (with not more than 8 billable hours in
any one day) of his business time and attention to Versus
through the Completed Transfer Date or 120 days from the
Effective Date, whichever is later.
10. Miscellaneous.
______________
This Engineering Services and License Agreement shall inure
to the benefit of and be binding upon the heirs, personal
representatives, successors and assigns of the respective
parties hereto. This Engineering Services and License
Agreement, and the Agreement, constitute and fully integrate
the entire understanding between the parties hereto, and are
intended to supersede and cancel all prior written or oral
understandings between them dealing with the subject matter
hereof which have accrued prior to the date hereof. This
Engineering Services and License Agreement may not be
changed orally, but only in writing, signed by the party
against whom enforcement of any waiver, change, amendment,
modification, extension or discharge is sought. No other
warranties, representations or covenants exist that are not
herein contained. All notices required or authorized under
this Engineering Services and License Agreement shall be in
writing and shall be deemed to have been duly given on the
date of service if served personally on the party to whom
notice is to be given, or the second day after mailing, if
mailed to the party to whom notice is to be given by first
class mail, registered or certified, postage prepaid and
addressed to the respective parties at the addresses set
forth above, unless and until a different address shall be
furnished in writing by any party desiring to change such
address to the other party, or if no such address is set
forth with respect to any such party, then by personal
delivery or registered or certified mail, postage prepaid,
to the principal office of such party, or alternatively, the
personal residence of such party, all as last known to the
party giving such notice. For each term and pronoun used
herein, the singular number includes the plural number, and
vice versa, and any gender, whether masculine, feminine, or
neuter, includes the other genders, as appropriate and as
the context may reasonably require. The invalidity of any
paragraph, provision or part hereof shall not affect the
validity of any other paragraph, provision or part hereof.
This Engineering Services and License Agreement shall be
construed as a whole and in accordance with its fair
meaning. Captions, if any, and organization are for
convenience and shall not be used in construing its meaning.
This Engineering Services and License Agreement may be
executed in one or more counterparts, all of which shall
constitute one and the same instrument and each one of which
shall be deemed an original. Each party shall, upon
reasonable request, execute and deliver such other and
further documents as may be necessary and proper to
effectuate this Engineering Services and License Agreement.
This Engineering Services and License Agreement shall be
interpreted and enforced in accordance with the laws of the
State of Michigan, excluding any conflicts-of-law rule or
law which refers to the laws of another jurisdiction. No
party hereunder shall be entitled to exercise a right of off
set with respect to compensation and/or goods in its hands
held for the benefit of the other pursuant to this
Engineering Services and License Agreement. Any dispute or
controversy arising under, out of or in connection with, or
in relation to any promises by Versus hereunder (or any
amendments hereto)to pay to PTFM money, shares or
compensation shall be determined and settled by arbitration
in Dallas County, Texas, in accordance with the rules of the
American Arbitration Association and Texas law. Any award
rendered by the arbitrator shall be final and binding upon
each of the parties, and judgment thereof may be entered in
any court having jurisdiction thereof. During the pendency
if any such arbitration and until final judgment hereon has
been entered, this Agreement shall remain in full force and
effect. The party in whose favor a money judgment may be
entered shall be entitled to recover its reasonable
expenses, attorneys fees and costs of arbitration. With
regard to all other disputes in connection herewith, each
party consents to the exclusive in personam jurisdiction of
the state courts of the State of Michigan, with venue in
Traverse City, Michigan, and the nonprevailing party agrees
to pay the prevailing party`s actual attorney`s fees and
expenses in connection with any such litigation, in addition
to any costs, remedies or damages the court may award. This
Engineering Services and License Agreement constitutes the
jointly bargained agreement of the parties, and the
construction of this Agreement shall not be altered or
influenced by the fact or presumption that one party had a
greater or lesser hand in the drafting hereof. Any Recitals
are hereby made a part of this Engineering Services and
License Agreement and all exhibits, attachments, and
schedules, if any, attached hereto are incorporated herein
by reference for all applicable purposes. If the date for
performance of any act hereunder falls on a Saturday,
Sunday, or legal holiday, then the time for performance
thereof shall be deemed extended to the next successive
business day. Whenever it is provided that days be counted,
the first day to be counted shall be the day following the
date on which the event causing the period to commence
occurs. This Engineering Services and License Agreement is
intended solely for the benefit of the parties hereto and
their successors, heirs and assigns, and may not be relied
upon or enforced by any third party beneficiary.
IN WITNESS WHEREOF, THE PARTIES HAVE MUTUALLY EXECUTED
AND DELIVERED THIS ENGINEERING SERVICES AND LICENSE
AGREEMENT, EFFECTIVE AS OF THE DATE FIRST ABOVE STATED.
Versus Technology, Inc. Precision Tracking FM, Inc.
By: Gary T. Gaisser By: Alan C. Heller
_______________________ _ _ _________________________
Gary T. Gaisser, President Alan C. Heller, President
Alan C. Heller
_____________________________
Alan C. Heller,individually
EXHIBIT 10.3
Form of Registration Rights Agreement
with Precision Tracking FM, Inc.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of this ___ day
of _______, 1997, between VERSUS TECHNOLOGY, INC., a
Delaware corporation (the `Corporation`), and PRECISION
TRACKING FM, Inc., a Texas corporation (`PTFM`).
W I T N E S S E T H
WHEREAS, the Corporation agreed to provide PTFM with
registration rights as set forth herein as further
consideration for the acquisition by PTFM of all shares of
Common Stock of the Corporation closing pursuant to an
agreement of even date (the `Transfer Agreement`)
transferring certain intellectual property from PTFM to the
Corporation.
NOW, THEREFORE, in consideration of the foregoing and
the terms and conditions hereof, the parties hereto agree as
follows:
1. Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
Affiliate and Associate: Such terms shall have the
respective meanings assigned to them pursuant to Rule 12b-2
under the Exchange Act.
Commission: The United States Securities and Exchange
Commission and any successor federal agency having similar
powers.
Exchange Act: The Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and
regulations thereunder, all as at the time in effect.
Person: An individual, partnership, joint venture,
corporation, trust, unincorporated organization or the
government or any department or agency thereof.
Registrable Securities: All of the Corporation`s
restricted Common Stock, $.01 par value (`Common Stock`)
acquired by PTFM pursuant to the Transfer Agreement.
Registration Expenses: Except as otherwise
specifically provided herein, all of the Corporation`s out-
of-pocket expenses, without limitation as to amount,
incident to the Corporation`s performance of or compliance
with Section 2 herein, including, without limitation, all
fees and expenses, outside messenger and delivery expenses,
the fees and disbursements of counsel for the Corporation
and of its independent public accountant, and any fees and
disbursements of underwriters customarily paid by issuers or
sellers of securities and the expenses of one firm of
attorneys who shall represent PTFM. Registration Expenses
shall not include any underwriter`s discounts, commissions
or transfer taxes paid by PTFM.
Securities Act: The Securities Act of 1933, as
amended, or any similar federal statute, and the rules and
regulations thereunder, all as at the time in effect.
2. Registration
2.1 Registration on Request (Demand Registration). (a)
Request. At any one time more than six (6) months after the
date hereof, upon the written request of PTFM that the
Corporation effect the registration under the Securities Act
of all or part of PTFM`s Registrable Securities specifying
the intended method or methods of disposition thereof, the
Corporation will use its best efforts to effect the
registration under the Securities Act of such securities to
permit their disposition (in accordance with the intended
methods thereof as aforesaid) and keep such registration
open for a period of not less than nine (9) months, provided
that if such registration may then be effected by the
Corporation on Form S-3 or any successor Form of
registration, then the Corporation shall keep such
registration effective until the Registerable Securities may
be sold publicly pursuant to Rule 144 by persons who are not
affiliates of the Company.
(b) Registration Statement Form. Registrations
under this Section 2.1 shall be on an appropriate
registration form of the Commission as determined by the
Corporation and shall permit the disposition of the
Registrable Securities in accordance with the intended
method or methods of disposition specified in PTFM`s
request for such registration.
(c) Expenses. The Corporation will pay all
Registration Expenses in connection with any registration of
the Registrable Securities.
2.2 Incidental Registration (Piggyback Registration).
(a) Notice and Request. If the Corporation at any time
proposes to register any of its securities under the
Securities Act (except registrations solely for registration
of shares in connection with an employee benefit plan or a
merger or consolidation), whether or not for sale for its
own account, it will each such time give prompt written
notice to PTFM of its intention to do so. Upon the written
request of PTFM within 30 days after the receipt of any such
notice (which request shall specify the Registrable
Securities intended to be disposed of by PTFM, the
Corporation will use its best efforts to effect the
registration under the Securities Act of all Registrable
Securities which the Corporation has been so requested to
register by PTFM as part of the incidental registration,
provided that if the Corporation shall determine for any
reason not to register or to delay registration of such
securities the Corporation may, at its election, give
written notice of such determination to PTFM, and,
thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register
any Registrable Securities in connection with such
registration, without prejudice, however, to the rights of
PTFM to request that such registration be effected as a
registration under Section 2.1, and (ii) in the case of a
determination to delay registering, shall be permitted to
delay registering any Registrable Securities, for the same
period as the delay in registering such other securities.
No registration effected under this Section 2.2 shall
relieve the Company of its obligation to effect any
registration upon request under Section 2.1. The
Registration Expenses of PTFM shall be paid by the
Corporation.
(b) Underwriters Cutback. If, in any incidental
registration referred to in Section 2.2(a) above, the
managing underwriter or underwriters thereof shall advise
the Corporation in writing that in its or their reasonable
opinion the number of securities proposed to be sold in such
registration exceeds the number that can be sold in such
offering without having a material effect on the success of
the offering (including, without limitation, an impact on
the selling price or the number of shares that any
participant may sell), the Corporation will include in such
registration only the number of securities that, in the
reasonable opinion of such underwriter or underwriters can
be sold without having a material adverse effect on the
success of the offering as follows: (i) first, all of the
shares to be issued and sold by the Corporation and (ii)
second, the Registrable Securities requested to be included
in such registration by PTFM and any other Person pro rata
on the basis of the aggregate number of shares requested to
be included.
(c) Sales during Registration. PTFM participating in
the incidental registration agree, if requested by the
managing underwriter in an underwritten public offering, not
to effect any public sale or distribution of securities of
the Corporation of the same class as the Registrable
Securities so registered, including a sale pursuant to Rule
144 under the Securities Act (except as part of such
underwritten offering), during the ten-day period prior to,
and during the 90-day period beginning on, the closing date
of the underwritten offering. PTFM agrees that it shall
undertake, in its request to participate in any such
underwritten offering, not to effect any public sale or
distribution of any applicable class of Registrable
Securities during the 90-day period commencing on the date
of sale of such applicable class of Registrable Securities
unless it has provided 90 days prior written notice of such
sale or distribution to the underwriter(s).
2.3 Registration Procedures. Whenever the Corporation
is required to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections
2.1 and 2.2, it shall, as expeditiously as possible:
(i) prepare and (within 120 days after a request for
registration is given to the Corporation or as soon
thereafter as possible) file with the Commission a
registration statement with respect to such Registrable
Securities and use its best efforts to cause such
registration statement to become effective;
(ii) prepare and file with the Commission such
amendments and supplements to the registration statement and
prospectus used in connection therewith as may be necessary
to keep such registration statement effective and to comply
with the provisions of the Securities Act for nine (9)
months if under 2.1 and 90 days if under 2.2;
(iii) furnish to PTFM such number of conformed copies
of such registration statement and of each amendment and
supplement thereto (in each case including all exhibits),
such number of copies of the prospectus contained in such
registration statement (including each preliminary
prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and
such other documents, as PTFM may reasonably request;
(iv) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statements under such other securities or blue
sky laws of such jurisdictions where an exemption is not
available and as PTFM shall reasonably request, to keep such
registration or qualification in effect for so long as such
registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to
enable PTFM to consummate the disposition in such
jurisdictions of the securities owned by them, except that
the Corporation shall not for any such purpose be required
to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the
requirements of this subdivision (iv) be obligated to be so
qualified or to consent to general service of process in any
such jurisdiction; and
(v) notify PTFM at any time when a prospectus forming
a part of such registration statement is required to be
delivered under the Securities Act, upon discovery that, or
upon the happening of any event as a result of which, the
prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading in the light of the circumstances under which
they were made, and at the request of PTFM promptly prepare
and furnish to PTFM a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers
of such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of
the circumstances under which they are made.
2.4 Limitations, Conditions and Qualifications to
Obligations under Registration Covenants. The obligations
of the Corporation to use its reasonable efforts to cause
the Registrable Securities to be registered under the
Securities Act are subject to each of the following
limitations, conditions and qualifications.
(a) Year End Financials. The Corporation shall
not be obligated to file any registration statement pursuant
to Section 2.1 hereof at any time if the Corporation would
be required to include financial statements audited as of
any date other than the end of its fiscal year.
(b) Time-Outs. The Corporation shall be entitled
to postpone for a period of time (which in the judgment of
the Corporation is reasonable under the circumstances) the
filing of any registration statement otherwise required to
be prepared and filed by it pursuant to Section 2.1 if the
Corporation determines, in its reasonable judgment, that
such registration and offering would interfere with any
financing, acquisition, corporate reorganization or other
proposed material transaction involving the Corporation or
any of its Affiliates or that it would require the
Corporation to disclose material non-public information that
it deems advisable not to disclose and promptly gives PTFM
written notice of such determination. Further, the
Corporation shall have the right to require PTFM
participating not to sell securities in a public offering
for a period of up to 90 days during the effectiveness of
any registration statement if the Corporation shall
determine that such sale would interfere with any
transaction involving the Corporation as described above
or that such registration would require disclosure of such
material non-public information. If pursuant to the
preceding sentence the Corporation has required PTFM to
discontinue the sale of securities during the effectiveness
of a registration statement, then the period of time any
such registration statement must be kept effective pursuant
to Section 2.3(ii) hereof shall be extended for a period
equal to the length of such discontinuance.
(c) Approval of Underwriters. If PTFM proposes
that the sale of Registrable Securities pursuant to Section
2.1 hereof be an underwritten offering, the Corporation
shall have the right to approve the choice of underwriters
who undertake such offering.
2.5 Indemnification. (a) Indemnification by the
Corporation. In the event of any registration of any
Registrable Securities of the Corporation under the
Securities Act pursuant to Section 2.1 or 2.2, the
Corporation will, and hereby does, indemnify and hold
harmless, PTFM, its directors and officers, any underwriter
and each other Person, if any, who controls PTFM or any such
underwriter, against any losses, claims, damages or
liabilities, to which PTFM or any such director or officer
or underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are
based upon any untrue statement of any material fact
contained in any registration statement under which such
securities were registered under the Securities Act or any
prospectus contained therein, or any omission or alleged
omissions to state therein a material fact required to be
stated therein or necessary to make the statements therein
in light of the circumstances in which they were made not
misleading, and the Corporation will reimburse PTFM, and
each such director, officer, underwriter and controlling
person for any legal or any other expenses reasonably
incurred by them in connection with investigating or
defending any such loss, claim or liability or action or
proceeding in respect thereof; provided that the Corporation
shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or expense arises out of
or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such
registration statement or any such prospectus, in reliance
upon and in conformity with written information furnished to
the Corporation by or on behalf of PTFM or underwriter, as
the case may be, specifically stating that it is for use in
the preparation thereof; and provided, further, that the
Corporation shall not be liable in any case to the extent
that such loss, claim, damage, liability or expense arises
out of an untrue or alleged untrue statement or omission or
alleged omission in a prospectus, if such statement or
omission is corrected in an amendment or supplement to the
prospectus and PTFM thereafter fails to deliver such
prospectus as amended or supplemented prior to or
concurrently with the sale of the Registrable Securities.
Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of
PTFM, or any such director, officer or controlling person
and shall survive the transfer of such securities by PTFM.
(b) Indemnification by PTFM. The Corporation may
require, as a condition to including any Registrable
Securities in any registration statement filed pursuant to
Section 2.1 or 2.2, that the Corporation shall have received
an undertaking satisfactory in all respects to it from PTFM
to indemnify and hold harmless (in the same manner and to
the same extent as set forth in subdivision (a) of this
Section 2.5) the Corporation, each director of the
Corporation, each officer of the Corporation and each other
person, if any, who control the Corporation within the
meaning of the Securities Act, with respect to any statement
or alleged statement in or omission or alleged omission from
such registration statement or any prospectus contained
therein, if such statement or alleged statement or omission
or alleged omission was made in reliance upon or in
conformity with written information furnished to the
Corporation by PTFM for use in the preparation of such
registration statement or prospectus. Such indemnity shall
remain in full force and effect, regardless of any
investigation made by or on behalf of the Corporation or any
such director, officer or controlling person and shall
survive the transfer of such securities by PTFM.
(c) Notices of Claims, etc. Promptly after
receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section
2.5, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such
action, provided that the failure of any indemnified party
to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding
subdivisions of this Section 3.6, except to the extent that
the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought
against an indemnified party, unless in such indemnified
party`s reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist in
respect of such claim, the indemnifying party shall be
entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred
by the latter in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying
party shall be liable for any settlement of any action or
proceeding effected without its written consent. No
indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter
into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(d) Other Indemnification. Indemnification
similar to that specified in the preceding subdivisions of
this Section 2.5 (with appropriate modifications) shall be
given by the Corporation and PTFM with respect to any
required registration or other qualification of securities
under any Federal or state law or regulation of any
governmental authority other than the Securities Act.
3. Notices. All communication provided for hereunder
shall be sent by first-class mail and, if to PTFM, addressed
to it at 15001 E. Beltwood Parkway, Dallas, Texas 75244-2709
or to such other address as PTFM may have designated to the
Corporation in writing, and, if to the Corporation,
addressed to it at c/o Versus Technology, Inc., 2600 Miller
Creek Road, Traverse City, MI 49684, Attention: President,
or to such other address as the Corporation may have
designated to PTFM in writing.
4. Assignment. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the
parties hereto and their respective successors and assigns.
5. Descriptive Headings. The descriptive headings of
the several sections and paragraphs of this Agreement are
inserted for reference only and shall not limit or otherwise
affect the meaning hereof.
6. Governing Law. This Agreement shall be construed
and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of
Michigan.
7. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which
shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their respective
officers thereunto duly authorized as of the date first
above written.
VERSUS TECHNOLOGY, INC.
By:
__________________________
Gary T. Gaisser, President
PRECISION TRACKING FM, INC.
By:
_________________________
Alan C. Heller, President
EXHIBIT 99
Press Release
NEWS RELEASE
Versus Technology, Inc. Enters Into Exclusive Licensing
Agreement with Precision Tracking FM, Inc.
TRAVERSE CITY, Mich., February 18/PRNewswire/--Versus
Technology, Inc. (Nasdaq Bulletin Board: VSTI) announced:
Versus Technology, Inc. (``Versus``) and Precision Tracking
FM, Inc., of Dallas, Texas, (``PTFM``) have signed an
Agreement for Versus to become a licensee of PTFM`s patents
and intellectual properties related to infrared tracking
technology. Subject to certain existing PTFM license and
supply agreements, Versus will become the sole and exclusive
PTFM licensee for a period of 10 years, after which Versus`
rights will become nonexclusive.
Under the Versus/PTFM Agreement, PTFM desires to withdraw
from its infrared technology based products, and will work
over the next twelve months to help assure a complete
technology transfer to Versus, coupled with a smooth
transition to Versus of infrared product manufacturing
capabilities, ongoing distribution and customer support
activities previously provided by PTFM to its customers.
PTFM has previously been a supplier of infrared components
to Versus. In the future, Versus will control component
production and distribution.
``We are very pleased with this agreement,`` said Versus`
President, Gary Gaisser. ``Versus` infrared patents,
especially when combined with the PTFM patents, give Versus
a significant base of proprietary intellectual property from
which to work. The agreement should also make a solid
contribution toward our goal of expanding the Versus product
distribution network, especially into markets outside the
medical field. And, with the new product enhancements we
are working on, Versus` infrared tracking products will
continue to be the finest available, offering features and
options other products do not have.``
Based in Traverse City, Versus Technology markets infrared
tracking systems and related wireless products. For
additional information, please call (616) 946-5868 or FAX
(616) 946-6775.
- - -0- 2/18/97
/CONTACT: Gary T. Gaisser, 616-946-5868, of Versus
Technology, Inc./(VSTI)
Versus Technology, Inc. 2600 Miller Creek Rd., Traverse
City, MI 49684 616-946-5868 fax 616-946-6775
