AMENDMENT NO. 1 TO POINT AGREEMENT
EXHIBIT
10.8
AMENDMENT
NO. 1 TO POINT AGREEMENT
THIS
AGREEMENT is made this 17th
day of
September 2004 between NovAtel Inc. (“NovAtel”) and SOKKIA CO. Ltd
(“Sokkia”).
WHEREAS
Sokkia
and NovAtel entered into a Point Agreement dated July 20, 1999;
WHEREAS,
NovAtel
and Sokkia are willing to amend the Point Agreement and the current structure
of
their relationship, based on a memorandum of understanding dated June
15th,
2004;
THE
PARTIES AGREE AS FOLLOWS:
1. Section
5 of the Point Agreement is amended by the addition of the following paragraph:
| 5.6 |
NovAtel
will continue to develop, in the normal course of its business, at
its
cost, its core standard products, namely GNSS receivers and enclosures,
sensors and antennas (the “GNSS Products”). NovAtel shall have the right
to sell the GNSS Products into all markets and to all
customers.
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2. Section
6 of the Point Agreement is amended by the addition of the following paragraphs:
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6.8
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Point
will start developing the GSR-2700-IS, by March 31, 2004. In order
to
support this next generation product development, NovAtel and Sokkia
will
provide US$1.0 million of Non-Recurring Engineering (“NRE”) funding in
2004. This US$1.0 million shall include the current level of funding
of
approximately US$500,000 related to the Level 6 data collection software.
NovAtel and Sokkia will agree on their share of NRE funding on a
project-by-project basis, and will also agree on payment dates or
milestones. NovAtel and Sokkia will review the amount of NRE funding
on an
annual basis and will, upon both parties’ approval, adjust the amount of
NRE funding as appropriate.
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The
board
of directors of Point shall review and approve the GSR-2700-IS development
plan.
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6.9
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Point
shall be responsible for developing end-user application software,
interfaces and systems integration.
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| 6.10 |
Upon
agreement of the parties on a project by projects basis, NovAtel
will
develop customized products for Point/Sokkia who will provide funding
to
NovAtel for these customized products through either NRE fees or
product
pricing (with minimum volume commitments). Point/Sokkia will have
the
exclusive rights, as detailed in each project agreement, to the customized
product.
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| 6.11 |
Minimum
Annual Purchases
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6.11.1 Subject
to 6.11.2, Point will
purchase
a minimum annual quantity/$value of US$2.5 million of GNSS Products from NovAtel
starting in 2004. Thereafter, the annual purchase value will increase by 5%
per
year.
6.11.2 If
a
significant change in the market for GNSS Products develops that would
materially affect Point’s ability to purchase the minimum annual purchase value,
NovAtel and Sokkia will review and amend the minimum annual purchase value,
as
appropriate.
6.12
NovAtel
as Exclusive Vendor
6.12.1 NovAtel
shall be the exclusive supplier of GNSS Products for Point/Sokkia, as long
as:
(i) NovAtel
can provide a competitive product, based on price, technology and
features.
(ii) Point/Sokkia
does not experience a significant supply interruption, within the control of
NovAtel, of NovAtel’s GNSS Products
6.12.2 The
GNSS
Products will be available to Point/Sokkia at the best pricing terms (at
comparable volumes and conditions).
6.13 Sokkia's
Marketing Role for Point Products.
6.13.1 Sokkia
(Japan) will undertake to provide a stronger role for the distribution and
marketing of Point's products throughout Sokkia's worldwide distribution network
by realizing
that
Point’s products receive adequate promotion, regional technical customer support
and training and inventory stocking, amongst other support
initiatives.
6.14 Point's
Solvency
6.14.1 Point
must not become insolvent.
While
NovAtel and Sokkia agree that Point should strive to break even on an Operating
Profit basis, this objective may not be always possible, particularly if Point
undertakes significant new product development. NovAtel and Sokkia recognize
that to remain solvent, Point may require future financial support through
such
means as, loans and equity contributions. In no event shall either party be
required to provide future financial support without approval by its respective
Board of Directors.
6.15 Strategic
Plan for Point
6.15.1 NovAtel,
Sokkia and Point will develop a strategic plan for Point, no later than March
31, 2005.
3. Problem
solving
In
the
event any of the conditions contained in this amendment to the Point Agreement
are not implemented or a subsequent breach of these conditions occurs, including
the condition contained in 6.14.1 above, then NovAtel and Sokkia will enter
into
the discussion and/or negotiations, on a good faith basis, to solve the problems
and/or difficulties for the mutual benefit of both parties. As part of these
negotiations, NovAtel and Sokkia would discuss the possible sale of NovAtel’s
49% equity interest in Point, to Sokkia.
4.
General
4.1 This
Agreement may not be amended except by an instrument in writing signed by
NovAtel and Sokkia.
4.2 This
Agreement and the rights and obligations hereunder may not be transferred or
assigned by one party without the prior written consent of the other party
hereto which consent may not be unreasonably withheld.
4.3 The
specific conditions and provisions of this Agreement supersede those contained
in all prior agreements and understandings relating to such subject matter.
4.4 This
Agreement shall be governed, construed and interpreted in accordance with the
laws of the State of Kansas, USA, which shall be deemed to be the proper law
of
this Agreement.
IN
WITNESS WHEREOF,
the
parties have caused this Agreement to be duly executed by their respective
duly
authorized representatives on the day and year first above written.
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SOKKIA
CO. LTD
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BY:
/s/ Xxxxxxxx X. Xxxx
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BY:
/s/ Xxxxxxx XXX
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