EXHIBIT 10.19
CONFIDENTIAL TREATMENT REQUESTED.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT
HAVE BEEN REDACTED AND HAVE BEEN
SEPARATELY FILED WITH THE COMMISSION.
SECOND APPENDIX TO THE COOPERATION AGREEMENT AND
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RMR AGREEMENT
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Made and executed in Holon on December 28, 2003
BETWEEN Arad Technologies, Ltd., of: 6 Hacarmel, Yokneam
Hereinafter: "ARAD"
AND BETWEEN Telematics Wireless, Ltd. (formerly, Tadiran Telematics, Ltd.),
of: 00 Xxxxxxxxx Xx., Xxxxx
Xxxxxxxxxxx: "TELEMATICS"
WHEREAS The parties have signed agreements between them on December 3,
2000 and June 14, 2001 regarding cooperation in the AMR field,
and an appendix to these agreements dated December 11, 2002
(hereinafter, "The Agreements");
AND WHEREAS The parties wish to supplement and update the Agreements
according to changes in the time requirements,
THEREFORE THE PARTIES HAVE AGREED AND STIPULATED AS FOLLOWS:
1. Telematics shall manufacture and provide Arad with an additional *** units
as specified below:
A) Around *** TMW units at $ *** per unit. The previous price
($ *** ) shall remain valid up to and including the deliveries made in
February 2004. Units shall be delivered and distributed according to
the order appended to this agreement, and shall be provided not later
than
*** Confidential material redacted and filed separately with the Commission.
December 31, 2004. Deliveries shall begin in January 2004. The TMW
units slated for the Israeli market shall be sold at an additional
$ *** per unit.
B) An additional *** Universal units, which shall be delivered not
later than December 31, 2004 for $ *** per unit for the
single/dual/clip-on switch type of unit, and $ *** per unit for the
Encoder type. These prices shall be valid for deliveries beginning
from March 2004.
C) About *** MMR units of any configuration, except a DriveBy
configuration, for $ *** per unit, and these shall be delivered not
later than December 31, 2004.
D) About *** MMR units with a DriveBy configuration for $ *** per unit,
and these shall be delivered not later than December 31, 2004.
Arad shall inform Telematics at least 90 days in advance regarding the
quarterly quantity and required delivery distribution according to product,
and Telematics shall supply the quantity ordered on time, as stated.
2. Telematics shall provide units in working order, that is: with standards
approvals such as those issued by the FCC, or any other approval required
by the Israeli authorities, such as the Ministry of Communications (MOC).
Additionally, Arad hereby undertakes to act in accordance with the terms of
the Israeli and foreign authorizations, as these shall be updated from time
to time.
3. Telematics shall supply the product under its responsibility with a
warranty in accordance with Para. 6 of the Production Agreement dated June
14, 2001. In addition, Telematics shall repair malfunctioning units after
the warranty period at a price of the direct *** .
4. Units that are supplied by Telematics may be used for other applications
employed by the same product, according to Arad's prerogative. Costs for
products that differ from the cost of the original product (Dialog3G) will
be calculated separately.
5. Each month Arad shall register Telematics as an exporter sharing in at
least 50% of the full value of the products sold by Telematics to Arad.
*** Confidential material redacted and filed separately with the Commission.
6. The cost of engineering support paid by Arad shall be equal to $ *** per
month for the entire delivery period.
7. A) The deposit in the amount of $ *** paid to Telematics for previous
orders shall be offset from the payments due for the aforementioned
deliveries, beginning in January 2004, in six equal monthly
installments.
B) Payments shall be made against signed bills of lading of Telematics
products and COC documents that include quality data regarding the
unit (quality assurances).
8. Payment terms for the orders - Net + *** days.
9. In the event there is a halt in sales of AMR, Arad shall be entitled to
announce a production halt. In such an event Arad shall be obligated to
purchase the entire production inventory (raw materials and finished
products) planned for a four-month period following announcement of the
production halt.
10. In addition to the contents of paragraph 1 above, Telematics shall develop,
manufacture and supply Arad with an additional *** units using DSSS
(Direct Sequence Spread Spectrum) technology. For the purpose of this
agreement, the start of production of these DSSS units is planned for the
fourth quarter of 2004. Deliveries shall be is specified below:
A) *** TMW-DS units for $ *** per unit, distributed according to the
order appended to this agreement, and which shall be delivered no
later than 18 months from the start of production.
B) *** additional Universal type units, which shall be delivered no
later than 18 months from the start of production in exchange for
about $ *** per single/dual switch type unit, and about $ *** per
Encoder type unit.
C) *** MMR-DS units with a Repeater configuration (including a cellular
cell and battery) for $ *** per unit, and with a Concentrated
configuration for $ *** per unit; and these shall be delivered not
later than 18 months from the start of production.
D) *** MMR-DS units with a DriveBy configuration for $ *** per unit, and
these shall be delivered not later than 18 months from the start of
production.
*** Confidential material redacted and filed separately with the Commission.
E) *** MMR-DS units with a Low Cost Repeater configuration for around
$ *** per unit, and these shall be delivered not later than 18 months
from the start of production.
Arad shall inform Telematics at least 90 days in advance regarding the
quarterly quantities and delivery distribution according to product as
required, and Telematics shall deliver the quantity on time, as stated.
11. Telematics shall operate directly with the customer from China regarding
AMR for electricity and gas only. The product sold shall be different from
the products supplied to Arad. If the sale does not include components
manufactured by Arad, Telematics shall pay Arad a fee equivalent to 5% of
the revenue from to the sale of Telematics products from the factory gate
to this customer, as they are actually received by Telematics. If the sale
includes Arad components, Arad shall not be entitled to any payment beyond
payment for the said components.
12. The validity of the Agreements and this Appendix to the Agreements shall be
five years from the date on which this Appendix is signed.
13. The previous Agreements between the parties shall continue and shall apply
to the mutual relations between the parties, provided they do not conflict
with the contents of this Appendix. In any event of a contradiction between
the Agreements and the Appendix, the Appendix shall take precedence.
14. VAT must be added to all of the prices quoted above, at the rate specified
by law and against tax invoices.
15. Payments quoted above shall be paid in New Israeli Shekels according to the
representative rate of the US dollar on the day the payment is actually
made.
AND IN WITNESS THEREOF THE PARTIES HAVE SIGNED ON THE AFOREMENTIONED DATE:
(-signed-) (-signed-)
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Telematics Wireless, Ltd. Arad Technologies, Ltd.
*** Confidential material redacted and filed separately with the Commission.
