Exhibit 00.xx
LJU-III DEVELOPMENT AGREEMENT
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AGREEMENT made and entered into the 1st day of December, 1995, by and
between SCT Development Venture (the "Venture"), a joint venture between LoJack
Venture Corporation and Micrologic, Inc., and Micrologic, Inc., a corporation
organized and existing under the laws of the Commonwealth of Massachusetts
("Micrologic").
W I T N E S S E T H:
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WHEREAS, the business of Micrologic is to provide design, engineering and
manufacturing services for entities seeking to develop and manufacture a
product; and
WHEREAS, the Venture has a concept and design elements and specifications
for a new self-contained transponder technology using state of the art
technology; and
WHEREAS, Micrologic and the Venture desire to enter into an agreement by
which Micrologic will undertake such engineering and development for the Venture
to develop a next generation LoJack Unit (designated LJU-III) based on such
technology.
NOW, THEREFORE, in consideration of the mutual covenants expressed herein
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereby agree as follows:
I. DEFINITIONS
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1.1 "Cost," as incurred by Micrologic, shall mean hours spent by
Micrologic employees directly on the Project at rates in effect on January 1,
1995, and actual out-of-pocket costs, including the cost for subcontractors and
materials directly employed on the Project.
1.2 "Developed Technology" shall mean the technology resulting from the
activities and efforts of Micrologic pursuant to this Agreement.
1.3 "LoJack Patents" shall mean all United States Letters patent now
owned or hereafter acquired by LoJack Venture Corporation or its parent, LoJack
Corporation.
1.4 "Know-how" shall mean confidential information which is not
generally known to the public including knowledge, techniques, processes and
inventions owned, developed or acquired by and proprietary to the Company,
relating to or developed in connection with the LoJack System.
1.5 "LoJack Improvements" shall mean all Developed Technology which
constitutes an improvement in the technology embodied in the LoJack Patents.
1.6 "New Discoveries" shall refer to all developments, discoveries,
improvements, inventions, processes and trade secrets, whether or not tangible,
that are conceived, developed or reduced to practice, alone or jointly with
others, from the date hereof through termination of this Agreement, which relate
in any way to the Project.
1.7 "Project" shall refer to the further development by Micrologic of
the new transponder technology referred to above. Specifically, it shall refer
to the development of the LJU-III consistent with the specifications attached as
Exhibit A.
II. RESEARCH AND DEVELOPMENT SERVICES.
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2.1 Micrologic hereby agrees to exercise its best efforts to perform all
research and development necessary to complete the Project and to assist the
Venture in securing any patent or technology license necessary to enable the
Venture, its licensee or assignee, to commercially exploit the work product of
the Project. The parties acknowledge that the very
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nature of a research and development program precludes a detailed statement in
advance of the work that will be required to complete the Project but the
description, attached as Exhibit B, prepared by Micrologic, describes the work
to be performed. The parties intend that Micrologic will, under this Agreement,
develop new technology that will enable the Venture or LoJack or its designee to
produce the LJU-III and other products on or before October l, l996, complete
LJU-III testing on or before January l, l997, commence production on or before
July l, l997, and will use its best efforts to complete various aspects of the
Project on or before such dates.
2.2 Warranty. Micrologic will perform the agreed upon services using
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their best efforts and warrants professional workmanship and conduct. However,
Micrologic cannot and does not guarantee that any engineering or product
development effort provided by Micrologic shall result in a commercially LJU-III
product, and does not guarantee the ultimate commercial success of any developed
product, or assume any liability in connection with the development,
manufacture, distribution, or use of a product, machine, or model thereof.
Product documentation resulting from the development project shall conform to
the usual and customary standards of Micrologic.
EXCEPT AS STATED HEREIN, MICROLOGIC DISCLAIMS ALL WARRANTIES, EITHER
EXPRESSED, IMPLIED OR STATUTORY, WITH RESPECT TO ANY DEVELOPED PRODUCT, OR ANY
DEVELOPMENT OR ENGINEERING SERVICE, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. ANY EXPRESS WARRANTY
STATED IN THIS AGREEMENT IS IN LIEU OF ALL OBLIGATIONS OR LIABILITIES OF
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MICROLOGIC FOR DAMAGES INCLUDING, BUT NOT LIMITED TO, GENERAL SPECIAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE DELIVERY, USE OR
PERFORMANCE OF THE LJU-III PRODUCT OR PRODUCT DOCUMENTATION OR ARISING FROM THE
NEGLIGENCE OF MICROLOGIC, ITS EMPLOYEES, OFFICERS, DIRECTORS, OR CONSULTANTS.
Any warranties extend solely to LoJack and all warranty claims must be
made by LoJack and not by customers or other successors or assigns of LoJack.
III. PAYMENT.
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The Venture agrees to pay Micrologic on a staged basis for Cost incurred
in connection with performance of the attached description of work, with an
estimated total development cost of between Six Hundred Seventy-five Thousand
Dollars ($675,000) and Eight Hundred Twenty-five Thousand Dollars ($825,000),
provided, however, that the total cost of the Project as defined in
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Paragraph 1.7 shall not exceed Eight Hundred Twenty-five Thousand Dollars
($825,000) unless specifically authorized in advance by the Venture. The Venture
agrees to pay Micrologic for costs incurred prior to the date of this Agreement
in accordance with the payment terms set forth herein.
Micrologic will deliver invoices for services and expenses at the
beginning of each calendar month for those services and expenses rendered to the
Venture in the prior calendar month. Terms of payment are net thirty (30) days
from the date of receipt of the invoice by the Venture.
IV. LIMITATIONS ON EXPENDITURES.
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4.1 Both parties understand that the Venture intends to secure Federal
income tax
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treatment pursuant to Internal Revenue Code Section 174 for payments made to
Micrologic under this Agreement. Accordingly, Micrologic agrees to apply all
sums received under this Agreement only to qualifying research and experimental
expenditures relating to this Project.
V. REPORTS AND RECORDS.
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5.1 Micrologic shall provide to the Venture within ten (10) days of the
end of each calendar month a report in such reasonable detail as the Venture may
require setting forth:
(a) all of its labor hours by category, material expenses,
subcontract, travel, and miscellaneous expenses relating to the Project
during such period;
(b) the work performed by Micrologic during such period pursuant
to this Agreement; and
(c) the status of the Project at the end of the period. The
estimated cost to complete.
5.2 Micrologic shall keep and maintain, in accordance with generally
accepted accounting principles and practices, proper and complete books and
records of account documenting all costs and expenses.
5.3 Micrologic immediately shall notify LoJack, in writing if:
(a) Micrologic determines that it is not feasible or practicable
to develop LJU-III consistent with the specifications attached as
Exhibit A;
(b) The cost to complete development of LJU-III will greatly
exceed prior estimates; or
(c) The time required to complete the development of LJU-III shall
substantially exceed the guidelines set forth in Section 2.1, above.
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VI. OWNERSHIP, DISCLOSURE AND PATENTS.
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6.1 Except as provided in Subsection (c), the Venture shall have full
and exclusive right, title and interest in and to:
(a) all general and specific knowledge, know-how, experience and
information developed, acquired or conceived by Micrologic in performing
its obligations under this Agreement including, without limitation, design
features, processes, schematics, manufacturing procedures, test procedures
and parts information; and
(b) all physical manifestations or embodiments of such knowledge,
experience and information, including without limitation all documents and
writings and all copies thereof developed or made by Micrologic, and
including without limitation, all patent rights, patentable information,
patent applications, engineering and manufacturing information,
schematics, layout drawings, assembly drawings, printed circuit patterns,
specifications, parts lists, inspection procedures, test procedures and
engineering prototype models. Micrologic may retain possession of all
study models and prototypes constructed by Micrologic.
(c) LoJack shall own and have all patent and other rights to the
LoJack Improvements.
6.2 Micrologic shall routinely or upon demand disclose in writing to the
Venture all developments, discoveries, inventions, improvements and trade
secrets, whether or not tangible, that are conceived, developed or reduced to
practice alone or jointly with others
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from the date hereof through termination of this Agreement which relate in any
way to the Project. Such matters are herein referred to as the "New
Discoveries."
6.3 Micrologic agrees to participate in and cooperate in the
preparation, filing and prosecution of such United States and foreign patent
applications relating to the new Discoveries as the Venture or LoJack shall
reasonably request in writing. Except as provided in paragraph 6.1 (c), above,
all such applications and patents will be owned exclusively by the Venture. All
costs and expenses incurred pursuant to this Paragraph 6.3 shall be borne by the
Venture.
6.4 Micrologic hereby assigns to the Venture all rights to all software
developed in connection with the Project and agrees to deliver all instruments
or writings reasonably requested and necessary by the Venture to perfect its
title to such software.
6.5 Within thirty (30) days of termination of this Agreement for any
reason, Micrologic will deliver to the Venture all property owned by the Venture
held by or under the control of Micrologic relating to the Project.
VII. CONFIDENTIALITY.
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7.1 Micrologic agrees to keep confidential and all new discoveries and
all information relating thereto, and not to disclose the same to any third
party whatsoever and to use the same only for the purpose of performing its
obligations under this Agreement and for no purpose whatsoever following the
termination of this Agreement.
7.2 Not later than thirty (30) days after the termination of this
Agreement, provided that the Venture is not in default of any of its
obligations, Micrologic shall deliver to the Venture or its designee property:
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(a) furnished to Micrologic by the Venture, or
(b) developed or made by Micrologic pursuant to this Agreement, or
(c) which embodies or reflects the New Discoveries.
Such property shall include, without limitation, all property in which the
Venture or LoJack has ownership rights pursuant to Section 6.1 above. In the
case of any such documents other than items created by Micrologic as a result of
information furnished to Micrologic by the Venture, Micrologic shall deliver a
certificate certifying that all such documents or items or all copies thereof
have been destroyed.
7.3 The provisions of this Article VII shall survive the termination of
this Agreement.
7.4 Micrologic agrees that remedies at law may be inadequate to protect
against breach of this Article VII, and Micrologic hereby consents to the
granting of injunctive relief, whether temporary, preliminary or final, in favor
of the Venture without proof of actual damages.
VIII. TECHNICAL ASSISTANCE.
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Micrologic agrees to make available to the Venture or its designee, at
reasonable times and places and on reasonable notice the services of technical
personnel to consult with, instruct and assist the Venture or its designee in
technical matters relating to the New Discoveries in particular and the LoJack
System in general, at the Venture's expense. The cost for this work is not
included in previous figures of Section III and shall be billed separately.
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IX. TERMINATION.
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This Agreement (other than Articles VI and VII) will terminate upon the
earliest of:
(a) completion of the Project;
(b) thirty (30) days written notice by either party; or
(c) the institution of voluntary or involuntary proceedings by or
against either party in bankruptcy or under any solvency law, or corporate
reorganization, the appointment of a receiver, or petition for the
dissolution of such party or an assignment by such party for the benefit
of creditors.
X. MISCELLANEOUS.
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10.1 This Agreement sets forth and constitutes the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof, supersedes any and all prior agreements, understandings, promises and
representations made by either party to the other concerning the subject matter
hereof and the terms applicable hereto. This Agreement may not be released,
discharged, amended or modified in any manner except by and instrument in
writing signed by duly authorized officers of both parties hereto.
10.2 If any provision of this Agreement is or becomes or is deemed to be
invalid, illegal or unenforceable in any jurisdiction, such provision shall be
deemed amended to conform to applicable law so as to be valid and enforceable
or, if it cannot be so amended without materially altering the intention of the
parties, it shall be stricken and the remainder of this Agreement shall remain
in full force and effect.
10.3 This Agreement shall be deemed to have been entered into and shall
be construed and enforced in accordance with the laws of the Commonwealth of
Massachusetts.
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10.4 No waiver of any right under this Agreement shall be deemed
effective unless contained in a writing signed by the party charged with such
waiver, and no waiver of any right arising from any breach or failure to perform
shall be deemed to be a waiver of any future such right or of any other right
arising under this Agreement.
10.5 Headings contained in this Agreement are included for convenience
only and form no part of the Agreement or understanding between the parties.
10.6 Notices required and permitted hereunder shall be in writing and
shall be delivered in person or sent by registered certified mail, postage
prepaid, addressed as follows:
to the Venture:
LoJack Venture Corporation
Norfolk Place
000 Xxx Xxxxxx
Xxxxxx, XX 00000
Attention: C. Xxxxxxx Xxxxx, President
to Micrologic:
Micrologic, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, President
10.7 This Agreement may be executed in any number of counterparts, each
of which shall be an original and all of which shall constitute together but one
in the same document.
10.8 Neither this Agreement nor any right or obligation arising hereunder
may be assigned, in whole or in part, by either party without the prior written
consent of the other
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party; provided, however, that the Venture may contract with others in
furtherance of the research and development to be undertaken pursuant to this
Agreement.
This Agreement shall be binding upon any assignor and, subject to the
restrictions on assignment herein set forth, shall inure to the benefit of the
successors and assigns of each of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
ATTEST: LoJack Venture Corporation
By: /s/ Xxxxxx X. Xxxxx
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ATTEST: MICROLOGIC, INC.
By: /s/ Xxxxxxx Xxxxxx
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