[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Exhibit 10.3
MOBILE DATA TERMINAL
PURCHASE AGREEMENT
This Mobile Data Terminal Purchase Agreement (this "Agreement") by and
between Teletrac Inc., 0000 Xxxxxxx Xxx, Xxxxxx Xxxxx, Xxxxxxxxxx 00000
("Teletrac") and Micronet Ltd., 0 Xxxxxxxx Xxxx, Xxx-Xxxx, Xxxxxx 00000
("Micronet"), is made effective as of the 8th day of February, 1996. The
parties hereby agree as follows:
1. AGREEMENT TO PURCHASE AND SELL.
1.1 SALE OF PRODUCTS. Teletrac shall purchase from Micronet a minimum of ****
Terminals, and Micronet shall sell to Teletrac a minimum of **** Terminals, on
the terms set forth herein and on the attached purchase order #****. Terminals
are defined as Micronet's production level Net-950 Mobile Data terminals. The
description and technical, engineering, and operational specifications for the
Terminals and the protocol (the "Specifications") are set forth in Appendix "A",
all of the terms of which are incorporated herein by this reference. Micronet
shall imprint serial numbers (including bar coded serial numbers) on the back
panel of each Terminal, and shall print, in white, "Net-950" on each Terminal.
1.2 INITIAL ORDER. Teletrac hereby places a firm and irrevocable order for
**** Terminals from Micronet (the "Initial Order"), all of which will be
purchased in accordance with the terms and conditions of this agreement.
1.3 SUBSEQUENT ORDERS. After the Initial Order for **** Terminals ordered
hereunder have been purchased, orders for additional Terminals shall be in
writing and shall specify arrival dates of not less than 10 weeks from delivery
of the order to Micronet. Micronet may, by written notification delivered to
Teletrac within 10 working days of Micronet Receipt of a subsequent order, elect
not to fill the subsequent order. If Micronet does not notify Teletrac of its
election to not fill the subsequent order, the order shall be filled as
described in this paragraph 1.3 and in accordance with the other terms of this
Agreement. All subsequent orders shall be for at least **** Terminals per
order. The prices set forth in paragraph 3.1 shall apply to subsequent orders,
but shall be subject to an annual increase on each anniversary of the effective
date of this Agreement, in an amount
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
equal to the increase in the U.S. Consumer Price Index ("CPI") over the prior
12-month period. Micronet shall use its reasonable efforts to expeditiously
fill subsequent orders.
1.4 PURCHASE ORDERS. Purchase orders will be issued by Teletrac for purposes
of administration of delivery and quantity schedules. No term or condition of
any purchase order shall supersede the terms and conditions of this agreement.
In the event of any conflict between the terms of any purchase order and this
Agreement, the terms of this Agreement shall control. Micronet shall promptly
honor and fulfill all purchase orders in accordance with the terms and
conditions of this Agreement.
2. QUALITY CONTROL.
2.1 DEVELOPMENT. Micronet acknowledges and agrees that Teletrac is not a
participant in the development of the Terminals and is not liable for the
design, any design defects, product liability, strict liability (i.e, liability
without fault), or failure of the Terminals to meet the Specifications.
2.2 TEST UNITS. Teletrac acknowledges that it has been supplied **** test
units and that it has tested these units and found them acceptable and
conforming to the specifications and that the plastics and graphics are also
acceptable. Teletrac confirms that Micronet may proceed with production units
based on these test units. The test units shall be included in the count of
Spare terminals as defined in Paragraph 5.2.
2.3 ACCEPTANCE/REJECTION OF TERMINALS. Within two weeks of receipt, Teletrac
shall inspect all incoming Terminals (each shipment of Terminals shall be
referred to as a "Lot") to insure compliance with the Specifications. Teletrac
may reject the total lot received (if more than ****% of the Lot does not comply
with Specifications), or portions of the Lot, as to those Terminals that do not
comply with Specifications. Teletrac shall inspect Terminals on a sampling
basis. Rejected Terminals shall be promptly returned to Micronet; provided,
however, that rejected Terminals shall be Held so that they can be shipped in
bulk, and will be shipped to Micronet not more frequently than once per month.
Micronet shall bear all costs of freight, duty, insurance and other costs
incurred in returning the Terminals to Micronet and shipping new Terminals to
replace the rejected Terminals to Teletrac. Micronet acknowledges and agrees
that timely receipt of conforming Terminals is critical to Teletrac and that
Teletrac shall suffer severe damages if substantial numbers of Terminals are
non-conforming. The parties recognize that the full impact of such breach would
be very difficult to assess and it would be difficult to fix the actual amount
of damages. Therefore, to avoid possible disputes, the parties agree that if
more than
2
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
****% of a Lot is rejected and returned, Micronet shall pay to Teletrac
liquidated damages of US $**** per rejected Terminal per day beginning after the
tenth day following Micronet's receipt of each non-conforming Terminal unit
replaced. This amount shall be invoiced and paid by Micronet within 30 calendar
days of receipt of invoice. If not paid by Micronet, the amount shall be
applied against monies owed for Terminals. The amount established under this
paragraph for liquidated damages represents a reasonable attempt by the parties
to state an amount that bears a reasonable relationship to actual damages and
does not constitute a penalty. Notwithstanding anything in this paragraph to
the contrary, Teletrac shall specify the reasons for the rejection and give
Micronet an opportunity to discuss the rejection prior to imposition of the
liquidated damages described in this paragraph.
3. PAYMENT.
3.1 PRICE. The purchase price for each Terminal (including bracket and screws)
shall be U.S. $**** per unit (the "Purchase Price"). The Purchase Price
includes packaging, export duties, Israeli taxes, and handling costs. Except as
otherwise provided herein, Teletrac is responsible for insurance and shipping
costs and shall select the carrier. Teletrac is also responsible for import
duties and U.S. taxes, provided that Micronet includes with each shipment a
"Country of Origin Certificate (Form A)".
3.2 INVOICING. Invoices for Terminals shall contain, at a minimum, the
Purchase Price in U.S. dollars, purchase order number, invoice date, quantity,
description, invoice number, reference to this Agreement, ship to name and
address, remit to name and address and method and name of carrier.
3.3 TERMS OF PAYMENT.
DOWN PAYMENT. Teletrac, by Bank wire transfer, shall make a down payment
to Micronet's account in the amount of U.S. $**** within 4 business days of the
effective date of this Agreement. Micronet shall Invoice Teletrac for this
amount. The down payment shall be applied towards the last shipment payment.
Payments for all other shipments, as per paragraph 4 below, will be made by wire
transfer immediately prior to each delivery.
4. SHIPMENT.
4.1 SHIPMENT TERMS. Unless Teletrac notifies Micronet otherwise, as provided
in Paragraph 12.2, Teletrac hereby orders **** Terminals to be shipped to
Teletrac's facility described in paragraph 4.3, on the dates set forth in the
following Shipment Schedule:
3
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
------------ ------------- ------------------------------------------------
Number of Terminal Date shipped to Teletrac Facility
Terminals Type
------------ ------------- ------------------------------------------------
**** Net-950 Within 35 calendar days after effective date.
**** Net-950 Within 14 calendar days thereafter
**** Net-950 Within 60 Calendar days thereafter
------------ ------------- ------------------------------------------------
NOTE:
Micronet is allowed to accelerate shipments without limitation on quantities and
Teletrac is owed to payment terms as specified in Paragraph 3.3 above.
Shipment dates are conditional on Teletrac complying on time with payment terms
of paragraph 3.3 above.
4.2 LATE DELIVERIES. Micronet acknowledges and agrees that time is of the
essence in shipment of the Terminals and Teletrac shall suffer severe damages if
conforming Terminals are not shipped in accordance with the Shipment schedule.
The parties recognize that the full impact of such a breach would be very
difficult to assess and it would be difficult to fix the actual amount of
damages. Therefore to avoid possible disputes the parties agree that if the
shipment schedule slips by more than 15 working days due to Micronet's failure
to ship conforming Terminals, a late charge of U.S. $**** per terminal per
working day shall be imposed until the breach is cured; provided, however,that
the late charges for orders shipped under the Initial Order shall not exceed
$****.
The late charge will be invoiced by Teletrac and paid by Micronet within 30
calendar days of date of invoice. If not paid by Micronet, the amount shall be
applied against monies owed for terminals.
The amount established under this paragraph for liquidated damages represents a
reasonable attempt by the parties to state an amount that bears a reasonable
relationship to actual damages and does not constitute a penalty.
4.3 RESCHEDULING SHIPMENT DATES
Teletrac allows Micronet to accelerate shipment dates and to deliver
Teletrac bigger quantities than those stipulated in Paragraph 4.1 above.
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
4.4 FOB POINT. All Terminals are F.O.B Ben-Gurion Airport, Israel, unless
Teletrac notifies Micronet that Terminals are to be sent by ship rather than
air. Shipment address is Teletrac location at 0000 Xxxxxxx Xxx, Xxxxxx Xxxxx,
Xxxxxxxxxx 00000.
4.5 TITLE, RISK OF LOSS, INSURANCE. Title to the Terminals and risk of loss or
damage shall pass from Micronet to Teletrac upon Micronet's delivery to the
carrier at the F.O.B. point.
4.6 METHOD OF SHIPMENT. Micronet shall at its sole expense, provide for all
crating, packaging and packing in shipping containers that are designed to
provide adequate protection for the Terminals during shipping. Each Terminal is
to be bundled with its necessary bracket and screws and washers, appropriately
protected. Terminals shall be packaged in bulk in quantities of up to 50.
5. WARRANTY AND SERVICE TERMS.
5.1 WARRANTY TERMS. Micronet hereby warrants the Terminals to be in full
compliance with the Specifications and to be free from defects in workmanship
and materials (the "Warranty") for the shorter of two years from the date of
arrival at Teletrac's facility or one year after the Terminals have been
delivered by Teletrac to a third party customer ("the warranty period").
Teletrac will provide Micronet with monthly reports containing the serial
numbers of all terminals delivered to customers during the preceding month.
Micronet also warrants the merchantability and fitness for use of the
terminals. Terminals that are repaired or replaced during the Warranty Period
shall be warranted for the longer of the period of time remaining under the
original warranty period or 90 working days. Micronet hereby (a) consents to
Teletrac's right at Teletrac's option to assign the warranty, or the
remaining portion thereof, to Teletrac's customers, and (b) agrees to perform
the obligations described in this paragraph 5 for the benefit of such
customers. During the Warranty Period Micronet shall bear all out of pocket
costs to repair or replace defective Terminals, including, without
limitation, all costs of returning the Terminals to Micronet and shipping
repaired or replaced Terminals to Teletrac.
5.2 PROCEDURES. Micronet shall, at its cost, manufacture and ship to Teletrac,
with the first shipment, **** additional terminals. These along with the ****
approved test units will serve as "Spare Terminals". Teletrac shall as
necessary, replace defective Terminals with Spare Terminals, or replace parts
from the Spare Terminals, accumulating the defective Terminals until the earlier
of (a) 10 defective Terminals are being held, or (b)
5
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
3 months have passed since Teletrac's last shipment of defective Terminals to
Micronet. Teletrac will then notify Micronet by FAX of the number of defective
Terminals it will ship to Micronet. Within 3 working days of receipt of
Teletrac's FAX stating the number of defective Terminals being shipped, Micronet
shall (a) provide Teletrac a Return Material Authorization ("RMA") number by FAX
and (b) ship to Teletrac's California facility an equal number of replacement
Terminals to be used as Spare Terminals. Spare Terminals will not be used for
any purpose other than as replacement for defective Terminals. The procedures
described in this paragraph shall apply to service during the Warranty and
thereafter, except that post-warranty repairs will be subject to the charges
described in paragraphs 5.5 and 5.6 below. RMA numbers must be used in all
correspondence with Micronet and must be clearly marked on all packages and
boxes shipped to Micronet. Defective Terminals shall be sent to:
MICRONET LTD
0 XXXXXXXX XXXX
XXX-XXXX, XXXXXX 00000
Or if after May 1st 1996 to:
MICRONET LTD
XXXX XXXXXXXX, 00 XXXXXXXXX XX
XXXX, XXXXXX 00000
5.3 TIME OF REPAIR OR REPLACE. If the number of defective Terminals exceeds
the number of Spare Terminals held by Teletrac, the additional defective
Terminals shall be repaired or replaced by Micronet within 14 working days, plus
transit time from Micronet to Teletrac, from the date the defective Terminals
are delivered to Micronet. Micronet acknowledges and agrees that time is of the
essence in Teletrac's receipt of repaired or replaced Terminals.
5.4 FAILURES. The failure rate will be considered too high if it exceeds any
of the following: (a) ****% of the units in a single shipment fail the
acceptance tests; (b) ****% (cumulative) delivered within a 12 month period
fail the acceptance tests; or (c) ****% of the units delivered to customers
and in warranty do not function in full compliance with the specifications.
Malfunctions falling under the limitations in section 5.8 shall not be
counted as failures. If the failure rate is too high Micronet shall use its
best efforts to make required engineering or production changes as promptly
as possible to prevent the continued occurrence of such failures. Teletrac
may require a total recall of Terminals if such step is appropriate.
Micronet shall
6
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
not be liable for consequential damages or lost profits or loss of business
opportunity by a third party customer.
5.5 POST-WARRANTY REPAIR. For 12 months following the termination of the
Warranty Period, Terminals shall be repaired for U.S. $**** per hour. Parts
shall be billed at Micronet's then prevailing rates. After this 12 month
period, parts and labor shall be charged at Micronet's then prevailing rates,
not to exceed the annual increase in the U.S CPI over the prior 12-month period.
Repaired Terminals shall be in full compliance with the Specifications and will
be free from defects in material and workmanship for 90 working days from the
date the repaired Terminals or Replacement Terminals have been delivered to
Teletrac or to Teletrac's customer.
5.6 FREIGHT AND OTHER COSTS AFTER WARRANTY PERIOD. After the Warranty period,
Teletrac shall bear all costs of shipping defective Terminals to Micronet and
cost of returning the repaired or replaced Terminals to Teletrac or Teletrac's
customer. Teletrac is responsible, on its own or through a qualified
independent contractor, for installation, deinstallation, and reinstallation of
all Terminals after the Warranty Period.
5.7 CONTINUING AVAILABILITY AND CORRECTIONS. Micronet shall, for a period of
five years from the effective date of this Agreement, maintain a repair facility
in Tel-Aviv or another location that is no more costly to ship to and will
require no longer transit periods than the Tel-Aviv facility and shall for the
same period, maintain service and repair capability, including spare parts
availability. Upon the termination of the Warranty Period, Micronet shall, at
its cost, perform the following services for a period of two years and six
months from the effective date of this Agreement: (a) correct any original
design or manufacturing defects that were not detected prior to shipment of the
production Terminals if such defects can be corrected on a reasonable basis; and
(b) correct any firmware defects within 30 days of notification of such defects.
Micronet shall, for a period of 5 years from the effective date of this
agreement, correct other defects in the Terminals (including the firmware) and
work with Teletrac on modifications and enhancements to the design and
performance of the Terminals (including the firmware) at the presently existing
hourly rate for Micronet's personnel, plus an annual percentage increase equal
to the increase in the U.S. CPI over the prior 12-month period. The terms of
this Paragraph 5 shall survive the termination of this agreement.
5.8 LIMITATIONS ON WARRANTY. This warranty shall not apply to Terminals which
have been subject to accident, improper storage, mishandling, unauthorized
alteration, misuse, vandalism, neglect or which have not been properly installed
or maintained.
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
6. TELETRAC'S NAME AND TRADE MARKS.
Micronet shall not print or use the Teletrac name, logo, or other trade marks,
service marks, trade names, or similar indicia which Teletrac owns or becomes
licensed or sub-licensed to use (the "Teletrac Marks"). Micronet acknowledges
that Teletrac is the owner of the Teletrac Marks and that Micronet has no
interest in or right to use the Teletrac Marks.
7. NO CONSEQUENTIAL DAMAGES.
Without affecting Micronet's right to claim ordinary damages for Teletrac's
breach hereunder, in no event shall Teletrac be liable for incidental,
consequential or special damages, including, without limitation, frustration of
economic or business expectations, loss of profits, or loss of sales, arising
under or related to this Agreement or by reason of Teletrac's purchase or
failure to purchase Terminals hereunder.
8. INDEMNIFICATION
8.1 MICRONET'S INDEMNIFICATION FOR ACTIONS. On demand, Micronet shall
indemnify, defend and hold harmless Teletrac and each corporation, partner,
affiliate, subsidiary, parent, joint venture, officer, agent, employee,
director, shareholder, representative, successor and assign of Teletrac
(collectively, the "Indemnified Teletrac Parties") from and against all claims,
liabilities, obligations, damages, losses, deficiencies, costs, payments and
expenses (including, without limitation, court costs and reasonable attorney's
fees), lawsuits, actions and other proceedings, judgments and awards
(collectively, "Claims") including without limitation claims of personal injury
and death (a) to the extent that such Claims result from or arise directly or
indirectly, out of any act or omission of Micronet, or Micronet's agents or
employees, in connection with this Agreement or services provided hereunder, and
(b) any Claims that arise out of the failure of Micronet's Terminals, including,
without limitation, Claims of product liability, strict liability, design
defect, or third party Claims of breach of Warranty (collectively, "Product
Claims"); provided, however, that Micronet shall not indemnify Teletrac for
Claims that arise out of the failure of Teletrac's installation, radiolocation
system or services.
8.2 TELETRAC'S INDEMNIFICATION. On demand, Teletrac shall indemnify, defend
and hold harmless Micronet and each corporation, partner, affiliate, subsidiary,
parent, joint venture, officer, agent, employee, director, shareholder,
representative, successor and assign of Micronet from and against all Claims,
including, without limitation, Claims of personal injury and death (a) to the
extent that such Claims result from or arise,
8
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
directly or indirectly, out of any act or omission of Teletrac, or Teletrac's
agents or employees, in connection with this Agreement or services provided
hereunder; provided, however, that Teletrac shall not indemnify Micronet for
Product Claims, or Claims that arise out of the failure of Micronet's Terminals.
8.3 PROPRIETARY RIGHTS INDEMNIFICATION. On demand, Micronet shall indemnify,
defend and hold harmless, Teletrac from and against any Claims resulting or
arising from or in connection with the violation or infringement of any third
party's trade secrets, proprietary information, trademarks, copyrights or patent
rights ("Proprietary Rights Claims") in connection with services, work or
Terminals provided by Micronet under this agreement; provided, however, that
Micronet shall not be required to indemnify Teletrac against any Proprietary
Rights Claims from third parties arising out of Specifications provided by
Teletrac. If Teletrac is enjoined or otherwise prevented by any administrative
or legal order from using or selling the Terminals due to such a violation or
alleged violation, Micronet shall take such action as is necessary to clear the
infringement claim, as follows:
(a) Replace the Terminals, without additional charge, with a compatible,
functionally equivalent and non infringing product;
(b) Modify the Terminals to avoid the infringement;
(c) Obtain a license for Micronet's continued use of the Terminals and pay any
fee required for such license; or
(d) If none of the foregoing alternatives is available despite Micronet's best
efforts, Micronet shall repurchase such Terminals from Teletrac at the price
Teletrac paid Micronet, and Teletrac shall sell such Terminals to Micronet at
such price, without waiving any other rights, remedies or claims for damages
Teletrac may have at law, in equity or under this agreement.
8.4 SURVIVAL. The parties' obligations to indemnify as described in this
Paragraph 8 shall survive the expiration or termination of this Agreement by
either party for any reason.
8.5 COOPERATION. Each party agrees to promptly notify the other of any Claim
and to cooperate fully in the defense thereof or any negotiations related
thereto, and neither shall enter into any settlement without the consent of the
other party.
9. RIGHTS AND OBLIGATIONS
9.1 NON INFRINGEMENT. Micronet represents that it owns or has the right to use
(and Teletrac hereby grants to Micronet the
9
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
right to use, for the purpose specified herein, Teletrac's Specifications) all
technology, know how, copyright, trademark, patent, and intellectual property
rights used in producing the Terminals or as are otherwise necessary to
consummate the transactions contemplated by this Agreement.
9.2 MICRONET'S DESIGN RIGHTS.
(a) Teletrac shall not duplicate or reverse engineer Micronet's proprietary
circuitry, firmware, software, or circuit diagrams used in the design and
manufacture of the Terminals ("Micronet's Design"). Micronet acknowledges that
Micronet's Design does not include Teletrac's Specifications, which are the
proprietary property of Teletrac.
(b) Teletrac shall not provide a Terminal to any third party manufacturer for
purposes of duplicate or reverse engineering Micronet's Design. Micronet
acknowledges that Teletrac has no control over the conduct of any third party
manufacturer or other party and is not liable therefor.
(c) Teletrac shall not provide to a third party manufacturer copies of
correspondence or documentation written or prepared by Teletrac and provided to
Micronet in connection with Micronet's design. Teletrac may distribute its
Specifications.
(d) Teletrac shall not provide to a third party manufacturer copies of
correspondence or documentation (including mock-ups, designs, diagrams, charts,
and reports) written or prepared by Micronet and provided to Teletrac in
connection with Micronet's Design; provided, however, that Teletrac may
distribute materials intended for use by installers, service providers, and end
users (including service manuals installation documents, and manuals intended
for product and users).
10. INSURANCE. At all times during the term of this agreement, Micronet, at
its sole expense, shall maintain in full force and effect a policy of commercial
general liability insurance, including coverage against claims for Bodily
Injury, Personal Injury, Property Damage and Advertizing Injury caused by or
occurring in conjunction with the operation of Micronet's business including all
activities authorized or required to be performed under this Agreement. Such
insurance coverage shall designate ATT and its agents, employees, general
partners, officers and directors as Additional Insureds and shall be maintained
under one or more policies of insurance from an insurance company(s)
satisfactory to Teletrac and shall provide a minimum liability protection of
$**** per occurrence for bodily and personal injury or death, $**** per
occurrence for property damage and $**** per occurrence for product liability.
Micronet
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[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
shall give Teletrac prompt written notice of any material modification,
cancellation/ or non-renewal of any insurance required by this agreement.
Teletrac may terminate this Agreement immediately without notice to Micronet if
any insurance required by this Agreement is canceled.
11. NOTICES
Any notice, request or demand required to be made or given hereunder by any
party must be in writing and shall be deemed to be duly given or made one day
after it has been sent by air courier; upon telephonic confirmation of receipt
if sent by fax; or ten days after it was mailed if mailed by prepaid, registered
or certified mail addresses of the parties set forth below, or at such other
address as has been given by either party to the other in writing in accordance
with the terms of this Agreement.
TELETRAC INC.
0000 Xxxxxxx Xxx
Xxxxxx Xxxxx, XX 00000
MICRONET LTD
0 XXXXXXXX XXXX
XXX-XXXX, XXXXXX 00000
Or if after May 1st 1996 to:
MICRONET LTD
XXXX XXXXXXXX, 00 XXXXXXXXX XX
XXXX, XXXXXX 00000
12. TERMINATION
This agreement may be terminated as set forth below:
12.1 TERMINATION WITHOUT CAUSE. Following the fulfillment of Teletrac's
obligations pertaining to the Initial Order, Teletrac may terminate this
Agreement, without cause, and cancel any orders for any additional Terminals
that have been ordered but not shipped, upon 90 days' prior written notice.
12.2 FOR BREACH. The appropriate party may, by written notice to the other,
terminate this Agreement without prejudice to any rights that it may have,
whether under the provisions of this agreement (including Teletrac's rights to
liquidated damages, as set forth in Paragraphs 2.4 and 4.2), in law or in
equity, or otherwise, upon the occurrence of any of the following events:
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to a Request for Confidential Treatment.]
(a) By Teletrac, if Micronet fails to meet any dates set forth in the Shipment
Schedule, following 30 days written notice and opportunity to cure within such
notice period; or
(b) By Teletrac, if (a) ****% or more of the terminals received in a single
shipment or (b) ****% (cumulative) delivered within a 12 month period or (c)
****% of the units delivered to customers and in warranty; do not function in
substantial compliance with the Specifications, following 30 days' written
notice and opportunity to cure within such notice; or
(c) By Teletrac, if a government agency with jurisdiction over the operation,
function, production or sale of the Terminals or over Teletrac's services or
operations (by way of an example, but not limited to, the Federal Communication
Commission) has determined that the Terminal is defective; or
(d) Except for the breaches described in subparagraphs 12.2(a), (b) or (c), by
either party, if there is a material breach or default in the other's
performance of its obligations hereunder, following 30 day's written notice and
opportunity to cure within such notice period; or
(e) By either party, if the other party files or has filed against it a
petition under any bankruptcy or insolvency act or has appointed a trustee,
receiver, or liquidator of its properties.
13. ARBITRATION. All disputes that may arise in connection with this Agreement
that are not adjusted by the parties themselves shall be submitted to binding
arbitration in Los Angeles, California under the rules and regulations then
prevailing of the American Arbitration Association. Teletrac shall select one
arbitrator, Micronet shall select one arbitrator, and the two arbitrators so
selected shall select a third arbitrator. All costs of arbitration, including
each party's attorneys' fees shall be paid by the non-prevailing party. The
award shall be binding and conclusive on each of the parties and may be used on
or enforced by the party in whose favor it runs in a court of competent
jurisdiction in Los Angeles, California (including the United States District
Court for the Central District of California). Pending resolution of any
dispute , if requested in writing by Teletrac, Micronet shall proceed diligently
with the performance of its obligations hereunder, including the shipment of
Terminals, and Teletrac shall make payment therefor on the basis set forth in
the applicable paragraphs of this agreement.
14. FORCE MAJEURE.
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to a Request for Confidential Treatment.]
If an event of force majeure, including but not limited to acts of God, flood,
earthquake, landslide, fire, war, blockage, requisition of vessel, or aircrafts,
explosion, governmental request, order or regulations or any other unforeseeable
causes or circumstances beyond the control of Micronet, and without its fault or
negligence, directly affects the ability of Micronet to manufacture and ship the
Terminals then Micronet shall not be liable in damages for its delay in
performing its obligations hereunder, on a day for day basis as to the days of
force majeure; provided however, that Micronet shall promptly fulfill its
obligations under this agreement after the force majeure ceases.
If an event of force majeure occurs which will prevent Micronet from shipping
the Terminals for more than 120 calendar days, Teletrac shall have the automatic
and immediate right to obtain a complete and accurate set of design and
production technology documents sufficiently detailed to enable a third party to
manufacture the Terminals. ("Technology Documents"). The Technology Documents
shall be revised and updated as changes are made to the Terminals or the
manufacturing process during the term of this agreement.
15. MISCELLANEOUS PROVISIONS
15.1 RELATIONSHIP OF PARTIES. This agreement does not constitute
partnership or joint venture between Teletrac and Micronet. Both parties
acknowledge that the relationship of Micronet to Teletrac shall be one of an
independent contractor.
15.2 GOVERNING LAW. This agreement and any dispute or claim arising from
this Agreement shall be governed, construed and interpreted in accordance
with the laws of the state of California without regard to any rule of
conflicts of law.
15.3 JURISDICTION. The parties hereby consent to the personal
jurisdiction of an arbitrator or court located in Los Angeles, California and
of the United States District Court for the Central District of California.
It is the specific intent of the parties that this Agreement not be construed
in accordance with or governed by the laws of Israel and that Israeli courts
have no jurisdiction over this Agreement or any dispute or claim arising from
this agreement except as may be necessary to enforce an award of the
arbitrator or court. The parties expressly agree that the United Nations
Conventions on Contracts for the International Sale of Goods and the Hague
Convention shall not apply to the construction or interpretation of this
Agreement or affect any of its provisions.
Initials /s/ AH Initials
----------------- ----------------
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15.4 ASSIGNMENT. Micronet shall not assign, transfer, or sell any of the
rights of Teletrac hereunder without the prior permission of Teletrac.
15.5 NO WAIVER. Failure of Teletrac to insist upon strict performance of
any of the terms, conditions, provisions, or specifications within this
Agreement, or the delay in exercising any of its remedies, shall not
constitute a waiver of such terms, conditions, provisions, or Specifications
or a waiver of any default.
15.6 SURVIVAL OF OBLIGATIONS. Obligations under this Agreement which by
their nature would continue beyond termination or expiration of this
Agreement, including by way of illustration only and not limitation,
paragraphs related to Warranty and Indemnification, shall survive termination
or expiration of this Agreement by either party for any reason.
15.7 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties as to the subject matter of this
Agreement and supersedes all previous written or oral communications,
representations or agreements. This Agreement may not be modified except by
written instrument executed by both parties.
15.8 REMEDIES. All remedies available to either party for breach of this
Agreement are cumulative and may be exercised concurrently or separately, and
the exercise of any one remedy shall not be deemed an election of such remedy
to the exclusion of other remedies.
15.9 HEADINGS. The paragraph headings used in this Agreement are for
convenience of reference only and shall not in any way limit or amplify the
terms and provisions hereof, nor enter into the interpretation of this
Agreement.
15.10 BINDING AGREEMENT. The persons executing this Agreement on behalf
of the parties have been duly and validly authorized to do so, and this
Agreement is a valid and binding obligation of the parties.
15.11 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which shall constitute one
and the same Agreement.
15.12 SEVERABILITY. If any terms of this Agreement shall be unlawful,
void or unenforceable, such term shall be deemed omitted to the extent
prohibited or invalid, but the remainder of this Agreement shall not be
invalidated and shall be given effect as far as possible. If any term hereof
is found by a court or
14
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to a Request for Confidential Treatment.]
arbitrator to be overbroad, such term shall be limited to the extent required to
make it enforceable.
15.13 DOLLARS. All money amounts specified in this Agreement are in U.S
dollars.
Executed as of the day and year first above written.
Teletrac Inc.
By: Xxxxxx X. Xxxxxxx
-------------------------------
Title: Secretary
-----------------------------
Signature: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Micronet Ltd.
By: Xxx Xxxxx
--------------------------------
Title: Vice President Engineering
-----------------------------
Signature: /s/ Xxx Xxxxx
-------------------------
15
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to a Request for Confidential Treatment.]
--------------------------------------------------------------------------------
MESSAGE DATA TERMINAL (MDT)
NET-950
SPECIFICATIONS
VER. E, FEBRUARY 4, 1996
TELETRAC, INC. PROPRIETARY
--------------------------------------------------------------------------------
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
MDT Specification Revision E February 1, 1996
1. SCOPE
-----
This document defines the specifications of the Message Data Terminal (MDT)
to be integrated with the Teletrac system Vehicle Location Units (VLUs).
****
[17 pages omitted and filed separately with the Commission pursuant
to a request for confidential treatment.]
2
