EXHIBIT 10.14
Agreement No. 9-642117
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MDOT No. CM84909-37040A
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Confidential Treatment Requested Confidential
Portion Has Been Filed Separately With
the Securities and Exchange Commission
FIRM FIXED PRICE AGREEMENT FOR ODETICS SERVICES FOR MDOT
ATMS/ATIS OPERATIONAL DEPLOYMENT, FINAL ACCEPTANCE AND INITIAL
TWO-YEAR WARRANTY
Agreement dated 06 November 1998 by and between Rockwell Xxxxxxx, Inc., a
Delaware Corporation (herein called "Buyer"), and Odetics ITS, Inc., a
California Corporation. (herein called "Seller").
In consideration of the mutual promises herein contained, Buyer and Seller agree
as follows:
1.0 SCOPE OF SERVICES
During the term of this Agreement, Seller shall provide all personnel,
equipment, material, and other costs to perform the MDOT ATMS/ATIS Initial
Two Year Warranty in accordance with the MDOT Prime Contract CM 849-37040A
Special Provision for Performance Warranty on Subsystem and System
Performance and Task 7 Warranty, Service, Maintenance and Training (See
Attachment 1) at an agreed Firm Fixed Price of $[*] quoted net, FOB
destination. Such services shall be performed by individuals as employees
of Seller, an independent contractor, and not as employees of Buyer.
Seller shall also complete development and delivery of the following items
within the fixed price Scope of Services described above:
. Display Activity Logs
. Data / Documentation
5.5 Software Design Description document
5.5 System Design Description Document
5.5 Commercial Off The Shelf (COTS) Software Purchased
. All project and support activity necessary to bring the project to
final acceptance. This includes any remaining punch list items,
field repair, technical support, deliverable documentation,
correction of deficiencies, finance support, etc.
2.0 TERM OF AGREEMENT
The project support, operational deployment, final acceptance, and warranty
services shall be performed over the period beginning October 17, 1998 and
continue through the end of the MDoT prime contract
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two-year warranty period. Fulfillment of obligation shall be completion
of the two-year warranty support period, unless extended pursuant to the
mutual agreement by Buyer and Seller.
3.0 BILLING AND PAYMENT
3.1 As compensation for services to be performed by Seller hereunder,
Seller will invoice on a monthly basis per the following payment
schedule.
Month 1 $[*] Month 13 $[*]
Month 2 $[*] Month 14 $[*]
Month 3 $[*] Month 15 $[*]
Month 4 $[*] Month 16 $[*]
Month 5 $[*] Month 17 $[*]
Month 6 $[*] Month 18 $[*]
Month 7 $[*] Month 19 $[*]
Month 8 $[*] Month 20 $[*]
Month 9 $[*] Month 21 $[*]
Month 10 $[*] Month 22 $[*]
Month 11 $[*] Month 23 $[*]
Month 12 $[*] Month 24 $[*]
Buyer shall not have any liability for any other expenses or costs
incurred by Seller hereunder, unless otherwise agreed to by Buyer in
advance in writing. All invoices submitted in accordance with this
Section 3 shall be paid by Buyer within 30 days of receipt by Buyer.
If final acceptance is not realized by 31 March 1999 due to
performance failure of Seller to complete closure of remaining punch
list items, subsequent payments due to Seller will be withheld until
punch list items are complete and final acceptance has occurred.
3.2 Seller shall xxxx Buyer at monthly intervals. Invoices shall be mailed
to Rockwell Xxxxxxx, Inc., 000 Xxxxxxx Xx., X.X., Xxxxx Xxxxxx, Xxxx
00000, to the attention of Xxxxxxx Xxxxxxxx, M/S 191-106,
3.3 Each invoice submitted by Seller will include a summary of monthly
activity, i.e. key accomplishments, key issue/action plans.
3.4 Seller shall not take, or be obligated to take, any action under this
Agreement which could cause the amount the Buyer would be obligated to
pay to Seller in connection with this Agreement to exceed $[*]
in the aggregate (the Contract Amount). Notwithstanding any other
provisions of this Agreement, Buyer shall not be obligated to pay to
Seller any amount in excess of the aforementioned sum, unless
otherwise expressly agreed to by Buyer in advance in writing.
3.5 The [*] defined in the Asset Sale Agreement, Section 8.o.(iv) -- (v)
shall be modified as described below:
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After reimbursement of claim [*], the [*] formulas will be:
. [*]% Rockwell / [*]% Odetics for the portion of claim recovery
between $[*] and $[*]
. [*]% Rockwell / [*]% Odetics for the portion of claim recovery
between $[*] and $[*].
. [*]% Rockwell / [*]% Odetics for the portion of claim recovery
greater than $[*].
[*] shall be entitled to all profits earned by [*] for [*]
and [*] related to the MDOT Contract.
3.6 Buyer will be responsible for its own costs in support of achieving
final acceptance. Buyer's participation is expected to be minimal and
limited to managerial oversight.
3.7 Buyer will maintain responsibility for closing out other contract
obligations put in place prior to the operational acceptance date of
17 October 1998 (i.e. close out of subcontracts that are not being
assigned to Seller, submittal of correspondence to subcontractors on
Buyer's behalf that document assignment of continuing warranty
obligations to Seller, handling of purchase orders/subcontracts and
coordination efforts by HRC to facilitate disposition of Node 3
residual equipment, final Buyer EAC, current subcontractor close outs
for work performed prior to operational acceptance, outstanding
authorized but unpaid contractor expenditures committed prior to
operational acceptance [e.g. specific Matrix 2070 repairs), relocation
of the Seller's project manager, and costs associated with support
of the claims).
4.0 PUBLICITY
Seller shall not, without the prior written consent of Buyer, in any manner
advertise or publish the fact that Buyer has entered into this Agreement
with Seller, which consent shall not be unreasonably withheld or delayed.
5.0 ASSIGNMENT AND SUBCONTRACTING
Buyer will assign it's rights, obligations, title and interest in the
initial two-year warranty in the same manner as stated for the four,
one-year warranty options in the Asset Sale Agreement dated 20 June 1997,
Section 8 Paragraph 0 Sub-Paragraph (vi), between Buyer and Seller. If MDOT
will not consent to the assignment, the alternative arrangements to
assignment described in the Asset Sale Agreement will apply. The following
subparagraph applies regardless of assignment.
5.1 Buyer will be responsible for any required performance or xxxx xxxxx.
Seller will indemnify Buyer for these performance and xxxx xxxxx.
5.2 Seller will perform the warranty obligations in accordance with
Buyer's stated proposal and interpretation of contract requirements as
agreed with MDOT and documented in letter dated June 3, 1998 (See
Attachment 2).
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5.3 Buyer will transfer or assign to Seller all unexpired manufacturer's
warranties including the existing Detection Systems and Engineering
(DSE) Warranty for CCTV Equipment and the Highway Services Company
(HSC) Warranty for CMS.
5.4 All residual material and spare/replacement parts remaining after MDOT
acceptance of the ATMS/ATIS will be provided as expendable material
for Seller's unconditional use without charge.
5.5 Buyer will transfer or assign to Seller all test equipment, test
software, vehicles, and tools developed or acquired for the ATMS/ATIS
project.
6.0 TERMINATION
Buyer shall have the right to terminate this Agreement or any part thereof
at any time:
6.1 For Cause--If Seller fails to perform it's obligations under Section 1
hereof following Seller's failure to cure such condition or to reach a
mutually acceptable solution after a period of 15 days after written
notice of such failure shall have been given to Seller by Buyer
hereunder. In the event of any termination for Cause, Buyer may, in
addition to any other right or remedy provided by this Agreement or by
law, terminate all or any part of this Agreement by written notice to
Seller pursuant to Section 8 of this Agreement without any liability
by Buyer to Seller on account thereof and buyer may produce or
purchase or otherwise acquire warranty services elsewhere on such
terms or in such manner as Buyer may deem appropriate and Seller shall
be liable to Buyer for any excess cost or other expenses incurred by
Buyer in connection with obtaining such services.
6.2 Buyer shall have the right to terminate this Agreement or any part
thereof at any time following the termination by MDOT of, or the
release of Buyer (by settlement or otherwise, excluding assignment
of the MDOT Contract to Odetics ITS) from all of its' obligations
under, the MDOT Contract (in either case after 15 days notice to
Seller).
7.0 CHANGES
Buyer, within the general scope of this Agreement, may, at any time by
written notice to Seller, issue additional instructions, require additional
services or direct the omission of services covered by this Agreement. In
such event, there will be made an equitable adjustment in price and time of
performance, but any claim for such an adjustment must be made within
thirty (30) days of the receipt of said written notice. During the
performance of this Agreement, the Michigan Department of Transportation
(MDOT) may request Seller to perform non-warranty billable repair work or
billable new work (which for this Agreement is limited to non-warranty
maintenance and system studies) using the Buyer's prime contract as the
contracting vehicle. Subject to Buyer's prior concurrence, which allows for
Buyer to recover any direct costs plus an administrative fee of 6%, and a
binding subcontract commitment between Buyer and
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Seller in place, Seller shall be responsible for determining prices for
such work and negotiating the prices with MDOT. Seller shall be responsible
for performance of work and for the accuracy and submittal of invoices and
supporting data, on behalf of Buyer and per the Buyer's instructions adding
Buyer's direct costs, if appropriate, and a 6% administrative fee, with
copies to Buyer. Buyer shall have no obligation to pay Seller for any
billable repair work or billable new work except to pass through any
payments less the Buyer's direct costs, if appropriate, and the 6%
administrative fee made to Buyer by MDOT within 10 days of receipt from
MDOT. Seller shall indemnify Buyer for any liability related to such work
in accordance with Article 10, Insurance, Indemnity, and Liability herein.
Seller fully understands that Buyer has no obligation to add additional
work, requested by MDOT or any other party, to MDOT Contract CM 84909-
37040A, other than as defined in this paragraph.
8.0 NOTICES
Any notice or order provided for in this Agreement shall be considered as
having been given (i) to Buyer if mailed by certified mail, postage prepaid
to Rockwell Xxxxxxx, Inc., 000 Xxxxxxx Xxxx X.X., Xxxxx Xxxxxx, Xxxx 00000,
to the attention of Xxxxxxx Xxxxxxxx, or (ii) to Seller if mailed by
certified mail, postage prepaid to Odetics ITS, Inc., 0000 Xxxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxx, Xx. 00000-0000, to the attention of Xxx Xxxxx, or in
either case to such other address as hereafter shall be furnished as
provided in this Section 8 by either party to the other party.
9.0 COMPLIANCE WITH LAWS
To the extent applicable hereto, Seller shall in the performance of this
Agreement comply with: The Fair Labor Standards Act of 1938 (29 U.S.C. 201-
219); the Xxxxx-Xxxxxx Public Contracts Act (41 U.S.C.35-45); the Contract
Work Hours and Safety Standards Act - (40 U.S.C. 327-333); laws prohibiting
the use of convict labor; and all applicable federal, state and local laws;
and all regulations and orders issued under any applicable law. Seller will
notify Buyer immediately if Seller's work for Buyer becomes the subject of
a government audit or investigation. Seller will promptly notify Buyer if
Seller is indicated, suspended or debarred. Seller represents that seller
has not been convicted of fraud or any other felony arising out of a
contract with the Department of Defense, as described in more detail in
10U.S.C. 2408.
Seller is aware of the requirements of the Xxxx Amendment, Section 319 of
P.L. 101-121. In carrying out the work required hereunder Seller agrees not
to make any communication to or appearance before any person in the
Executive or Legislative branches of the Federal government for the purpose
of influencing or attempting to influence any such persons in connection
with the award, extension, continuation, renewal, amendment or modification
of any Federal contract for the benefit of the Buyer. Seller may perform
professional or technical services that are rendered directly in the
preparation, submission or negotiation activities preceding award to Buyer
of a Federal contract or to meet requirements imposed by law as a condition
for receiving the award but only to the extent specifically detailed in the
Statement of Work. Professional and technical services are limited to
advice and analysis directly applying Seller's professional or technical
discipline.
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10.0 INSURANCE, INDEMNITY AND LIABILITY
Seller shall carry Worker's Compensation and Comprehensive General
Liability Insurance (including Products, Contractual, and Automobile
Liability) in such form as to protect Seller and Buyer, its' directors and
officers, and the agents and employees of Buyer as additional insured from
any claims or damages for bodily injury, including death, and any damage to
property which may arise from acts or omissions of Seller under this
Agreement. Seller shall furnish Buyer with a certificate of insurance
evidencing limits of liability not less than $1 million combined single
limit per occurrence for bodily injury (including death) and property
damage. Such insurance shall be primary and non-contributing to any
insurance maintained or obtained by Buyer and shall not be canceled or
materially reduced without thirty (30) days prior notice to Buyer. Seller
agrees to waive any rights of subrogation Seller or Seller's insurers may
have against Buyer under the applicable Worker's Compensation Law.
Seller shall indemnify, defend and hold harmless Buyer, and Buyer's
officers, directors, employees, agents and contractors (each an
"Indemnitee") from and against any and all damages, claims, actions or
demands against Buyer, its' directors, officers, agents and employees and
against any and all damages, liabilities or expenses, including counsel
fees, for injury to or death of any person and for loss of or damage to any
and all property, arising out of the acts or omissions of Seller under this
Agreement.
(i) An Indemnitee hereunder shall promptly notify Seller of any claim,
action or demand for which recovery may be sought against Seller
because of the indemnity set forth in this Section, provided,
however, that no delay on the part of such Indemnitee in notifying
Seller shall relieve Seller from any obligations hereunder unless
(and then solely to the extent) Seller is prejudiced thereby.
Seller shall have the right to control the defense of any such
Claim with counsel of its choice so long as (a) Seller notifies the
Indemnitee in writing within twenty (20) days after the Indemnitee
has given notice of the Claim that Seller will indemify the
Indemnitee from and against any and all damages which the
Indemnitee may suffer arising out of or in connection with such
Claim; (b) such Claim involves only money damages and does not seek
an injunction or other equitable relief; (c) settlement of, or an
adverse judgment with respect to, such Claim is not, in the
reasonable judgment of the Indemnitee, likely to establish a
precedential custom or practice materially adverse to the
continuing business interests of the Indemnitee; and (d) Seller
conducts the defense of such Claim actively and diligently.
(ii) So long as Seller is conducting the defense of such Claim in
accordance with Clause (i) above, (a) the Indemnitee may retain
separate counsel and participate in the defense of such Claim at
the Indemnitee's cost; (b) the Indemnitee will not consent to the
entry of any judgment or enter into any settlement with respect to
such Claim without the prior written consent of Seller (not to be
withheld or delayed unreasonably), (c) Seller will not consent to
the entry of any judgment or enter into any settlement with respect
to such Claim without the prior written consent of the Indemnitee
(not to be withheld or delayed unreasonably, provided that such
consent shall not be deemed to be withheld unreasonably if any such
judgment or settlement does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the
Indemnitee of a release from all liability in respect of the Claim
giving rise thereto) and (d) the Indemnitee shall cooperate with
all reasonable requests of Seller in connection with the defense of
such Claim.
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(iii) In the event any of the conditions in Clause (ii) above is or
becomes unsatisfied: (a) the Indemnitee may defend against, and
consent to the entry of any judgment or enter into any settlement
with respect to the Claim in any manner it reasonably may deem
appropriate; (b) Seller will reimburse the Indemnitee promptly and
periodically for the costs of defending against the Claim
(including reasonable attorney's fees and expenses); and (c) Seller
will remain responsible for any and all damages the Indemnitee may
incur arising out of or in connection with the Claim.
11.0 STANDARDS
All services hereunder shall be performed by employees or agents of Seller
who are experienced and highly skilled in their profession and in
accordance with the highest standards of workmanship in their professions.
In the event that the employment of any such identified employee with
Seller is terminated, such service will be performed by employees or agents
of Seller who are experienced and highly skilled in their profession and in
accordance with the prevailing standards of workmanship in their
professions.
12.0 RECORDS
Buyer and its' employees and agents shall, until the expiration of three
(3) years after final payment under this Agreement, have access during
regular business hours to and the right to examine any directly pertinent
financial records and supporting documents and records of Seller involving
transactions related to this Agreement; provided, however, that such access
shall not unreasonably interfere with the normal operations of Seller and
the reasonable out-of-pocket expenses of Seller incurred in connection
therewith shall be paid by Buyer.
13.0 INTELLECTUAL PROPERTY RIGHTS
13.1 Buyer acknowledges and agrees that any intellectual property rights
of Buyer (i) presently in existence and developed or which may be
developed exclusively in conjunction with the MDOT Contract,
including, without limitation, any of Buyer's rights with respect to
proprietary software (including source code) being developed pursuant
to the MDOT Contract and (ii) which may be developed by or on
behalf of Seller during the course of, as a result of or otherwise in
connection of Seller's providing services pursuant to this Agreement
(collectively, "MDOT Contract Intellectual Property") are or shall
become the sole and exclusive property of Seller and Buyer hereby
waives for itself and its' affiliates, successors and assigns all
right, title and interest in and to any MDOT Intellectual Property.
Seller's right, title and interest in and to the MDOT Contract
Intellectual Property shall survive the termination of this Agreement
for any reason, including, without limitation, any termination of
this Agreement by Buyer for Cause pursuant to Section 6.2.
13.2 The parties recognize and understand that governmental participants,
defined as all federal, state and local agencies, including, without
limitation, MDOT, have or may obtain certain rights in
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MDOT Intellectual Property, as set forth in the MDOT Contract and
certain other instruments by which such Government funding has or
will be made available to Buyer ("Governmental Rights").
14.0 U.S. EXPORT CONTROL LAWS AND REGULATIONS
Seller, for itself and any of its' employees and agents who may be given
access by Seller to technical information of Buyer or who may be provided
access to Buyer's premises in carrying out the services to be provided by
Seller under this Agreement, acknowledges its' obligations to control
access to such technical information and to ensure that such access does
not result in a violation of the U.S. Export Control Laws and Regulations.
15.0 CONFIDENTIAL INFORMATION EXCHANGE
During the term of this Agreement, the parties agree to exchange non-
proprietary Data. Further, the parties may exchange proprietary data if the
disclosing party determines it to be essential for the accomplishment of
the objectives of the work to be performed in accordance with this
Agreement.
Notwithstanding that the term of this Agreement shall have expired, each
party agrees to keep in confidence and prevent the use (except for purposes
of this Agreement) or the disclosure to any person or persons outside the
receiving party's organization, and limit the disclosure inside its
organization to employees having a need-to-know, of all Data received under
this Agreement which is designated in writing, or marked by an appropriate
stamp or legend, by the disclosing party to be of proprietary or
confidential nature. In order to be protected hereunder, Data which is
first disclosed orally or by demonstration must be identified as
proprietary or confidential at the time of disclosure and shall be reduced
to writing or other tangible form, marked as proprietary and a copy
delivered to the receiving party by the disclosing party within thirty (30)
days after such disclosure or demonstration of any such Data. All
protections and restrictions as to use and disclosure shall apply during
such (30) day period. Any markings, stamps, or legends identifying
proprietary or confidential information hereunder shall not impose any
obligations on either party inconsistent with this Agreement.
The above restrictions on use and disclosure shall not apply to such Data
(other than any of the MDOT Contract Intellectual Property) if the same:
a) Is in the public domain or in the possession of the receiving party
without restriction at the time of receipt under this Agreement.
b) Is used or disclosed with prior written approval of the disclosing
party.
c) Is used or disclosed after five (5) years from the date of first
receipt under this agreement.
d) Is independently developed by the receiving party.
e) Becomes known to the receiving party from a source other than the
disclosing party without breach of this Agreement by the receiving
party.
f) Is made available by the disclosing party to a third party on an
unrestricted, non-confidential basis.
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Neither party shall be liable for inadvertent, accidental or mistaken use
or disclosure of Data obtained under this Agreement if that party
exercised the same reasonable precautions as the receiving party takes to
safeguard its' own proprietary information. Any copies of the Data made by
the receiving party shall reproduce the proprietary markings and any other
legends contained thereon.
16.0 DISPUTES
All disputes relating to, or arising out of, any provision of this
Agreement shall be resolved pursuant to procedures set forth in Attachment
3 hereto.
17.0 UTILIZATION OF SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS,
WOMEN-OWNED SMALL BUSINESS AND LABOR SURPLUS AREA CONCERNS
To support Government policy as declared by the Congress, and all
consistent with the efficient performance of this Agreement, Seller agrees
to accomplish a maximum amount of subcontracting to small business, small
disadvantaged business and women-owned small business concerns, and to use
its' best efforts to place subcontracts hereunder with subcontractors who
will perform such subcontracts substantially in areas of persistent or
substantial labor surplus when it can be done at prices no higher than are
obtainable elsewhere observing exemptions and preferential order
established by applicable Government regulations.
18.0 NOTICE TO BUYER OF LABOR DISPUTES
(a) Whenever Seller has knowledge that any actual or potential labor
dispute is delaying or threatens to delay the timely performance
of this Agreement, Seller shall immediately give notice thereof,
including all relevant information with respect thereto, to Buyer.
(b) Seller agrees to insert the substance of this clause, including this
paragraph (b), in any subcontract hereunder as to which a labor
dispute may delay the timely performance of this Agreement; except
that each such subcontract shall provide that in the event its'
timely performance is delayed or threatened by delay by any actual or
potential labor dispute, the subcontractor shall immediately notify
the Seller of all relevant information with respect to such dispute.
19.0 EVIDENCE OF CITIZENSHIP OR IMMIGRANT STATUS
Buyer may be required to obtain information concerning citizenship or
immigrant status of subcontractor personnel entering the premises of
Buyer. Seller agrees to furnish this information before commencement of
work and at any time thereafter before substituting or adding new
personnel to work on Buyer's premises. Information submitted by Seller
shall be certified by an authorized representative of Seller as being true
and correct.
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20.0 ALTERATIONS
None
THE PARTIES ACKNOWLEDGE THAT EACH HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND
AGREES TO BE BOUND BY ITS' TERMS AND CONDITIONS.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
AGREED TO: AGREED TO:
ODETICS ITS, Inc. ROCKWELL XXXXXXX, INC.
By: /s/ Xxxx Xxxxxxx By: /s/ General Manager - NBI
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Title: PRESIDENT Title: GENERAL MANAGER - NBI
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Employer ID No.* 00-0000000
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* This is the identifying number required to be used in Federal Income Tax and
Employment tax returns.
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