EXHIBIT 10.11
Confidential Treatment Requested Confidential
Portion Has Been Filed Separately With
the Securities and Exchange Commission
AGREEMENT
THIS AGREEMENT is entered into and effective as of the date of signing by
the last of the parties to sign below, and is by and between FREIGHTLINER
CORPORATION, of 0000 X. Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000 (hereinafter
"Freightliner"), and ODETICS ITS, INC., of 0000 X. Xxxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000 (hereinafter "Odetics ITS").
BACKGROUND
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1. Odetics ITS, and Daimler-Benz of Stuttgart, Germany, have been
involved in developing a product for, among other purposes, detecting when a
vehicle departs from a highway lane. The Lane Tracking System (hereinafter
"LTS") portion of this product is that portion which detects a potential lane
departure of a vehicle at an early stage to provide a warning to the vehicle
driver.
2. Odetics ITS and Freightliner desire to work together to develop a Lane
Tracking System adapted for North American driving conditions (hereinafter
"North American Lane Tracking System" or "NALTS"). It is expected that the NALTS
will be particularly useful for truck operators and may have applications
outside North America. A preliminary description of the NALTS product as it
exists as of the effective date of this agreement is attached hereto as Exhibit
A.
3. The parties hope that much of the work previously accomplished by
Odetics ITS, in connection with developing the LTS with Daimler-Benz will be
applicable to the development of the NALTS. It is also expected that
Freightliner's familiarity with road conditions in North America, and with truck
development in general, will also assist in the more rapid completion of an
acceptable NALTS product.
4. This Agreement establishes the basis by which Freightliner and Odetics
ITS, will cooperate in the development of a NALTS product. In addition, this
Agreement establishes the terms under which Freightliner may purchase NALTS
products from Odetics ITS for resale to customers as an optional equipment item
for its Class 3-8 trucks, to other Original Equipment Manufacturers, and to
after-market customers. This agreement also includes terms restricting Odetics
ITS to the sale in North America of NALTS products for Class 3-8 trucks to
Freightliner on an exclusive basis for a limited period of time.
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NOW, THEREFORE, the parties agree as follows:
I. Definitions
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A. The terms "System", "North American Lane Tracking System" and "NALTS"
are equivalent names for the lane departure detection product covered by this
Agreement and which will have particular applicability to North American road
conditions. The NALTS product will include a physical assembly consisting of 1)
an electronic module that includes a host processor, an image capture device,
circuits that receive inputs and provide outputs, and an external interface
connector; 2) embedded lane departure detection Application Software; 3)
embedded Operating System Software; and 4) embedded Lane Detection Techniques.
The NALTS product does not include external sensors or detectors for providing
vehicle data or road data inputs.
B. "Application Software" shall mean software which operates in the
selected host Operating System Software environment that implements algorithms
used in the System to process captured images, implement the Lane Detection
Techniques to determine Lane departure from an evaluation of specified inputs,
and provide a warning of lane departure based on these determined conditions.
The Application Software shall be jointly developed with Odetics ITS as the lead
and Freightliner as support.
C. "Lane Detection Techniques" shall mean algorithms and techniques for
detecting the existence of lane markings along a roadway for use by the
Application Software in determining possible lane departure. Freightliner will
develop the Detection Techniques with support by Odetics ITS.
D. "Operating System Software" shall mean software developed and provided
by Odetics ITS, that operates a system processor included in the System and that
also hosts the Application Software.
E. "Background Technology" shall mean drawings, data, know-how,
inventions, software, and other technical information owned or possessed by a
party prior to February 6, 1998, the commencement of cooperation between the
parties in connection with developing the System. In the case of Odetics ITS,
Background Technology shall include, but is not limited to, Odetics ITS vision
sensor products to detect changes in images of highway lane markings, to process
detected images, and to provide outputs to warning devices. Freightliner
Background Technology shall include, but is not limited to, techniques for
presenting
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information to drivers and the integration of electronics on Freightliner
trucks.
F. "Foreground Technology" shall mean all drawings, data, know-how,
inventions, software and other technical information developed subsequent to
February 6, 1998, the commencement of cooperation between the parties in
connection with developing the system, and which specifically relates to the
NALTS.
G. "Developed" shall mean developed, invented, authored, or created, but
does not include mere ideas prior to the time a substantial effort is made to
incorporate the ideas into software or into an embodiment of the System.
H. "Software" shall mean the specifications, high level and detailed
level design, code in all of its forms, tests and integration test documents,
and the underlying algorithms incorporated into code.
I. "Testing Procedure" shall mean a testing procedure mutually agreed to
by the parties to which NALTS prototype products and NALTS production products
are subjected prior to delivery to Freightliner.
J. "Freightliner Owned Tooling" shall mean any tooling for which
Freightliner has agreed in advance to make payment and for which payment has
been made by Freightliner.
K. "Freightliner Companies", when used in this Agreement, shall mean
Freightliner Corporation, its subsidiaries and joint ventures throughout the
world, including, but not limited to Sterling Truck Corporation, Alliance,
Freightliner Custom Chassis Corporation, and America XxXxxxxx Corporation, but
does not include Daimler-Benz.
L. "C-sample" or "C-sample prototypes" shall mean production-intent NALTS
products produced, as much as possible, using production tools and production
processes.
II. Development of Customer Product Definition
------------------------------------------
A. The parties shall cooperatively work with one another to prepare a
Customer Product Definition for the NALTS product. Time is of the essence and it
is expected the Customer Product Definition will be completed by January 29,
1999.
B. The Customer Product Definition will include, but is not limited to: a
detailed definition of the Operating System
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Software and of the Application Software which will further functionally define
the NALTS System; a detailed list of hardware which is required for the
Operating System Software and Application System Software to operate; a block
diagram and/or a functional description of circuits required for a NALTS product
to operate in a truck environment with the Application Software and Operating
System Software; a projected time schedule for producing prototypes of the NALTS
product and for going into production with such products following the
acceptance of prototypes; an estimated price for NALTS products FOB Freightliner
acceptance criteria and testing procedures for Operating System Software,
Application Software and NALTS prototypes products.
C. The Customer Product Definition is to be agreed upon and accepted by
both parties concurrently with the development of NALTS prototype products.
Subject to an extension by mutual written agreement of the parties, either party
may terminate this Agreement for any or no reason upon written notice to the
other party without any further obligation or liability to the other party if a
Customer Product Definition, which is acceptable to each party, is not completed
by March 31, 1999. In the event this Agreement is terminated for lack of a
mutually acceptable Customer Product Definition, Freightliner and Odetics ITS
shall have a paid-up, royalty-free, worldwide license to utilize the Customer
Product Definition without any duty to account to the other party; provided,
however, this license to use the Customer Product Definition does not constitute
a license to either party to utilize background or foreground technology solely
owned by the other party. Each party shall bear its own costs and expenses
incurred in connection with the development of the Customer Product Definition.
D. Unless altered by the Customer Product Definition, the
responsibilities of the parties for development work in connection with NALTS
prototypes and production products shall be as follows:
1. Freightliner and Odetics ITS shall jointly be responsible for:
(a) cooperating in developing a Customer Product Definition; and (b) adapting
the Lane Detection Techniques from the Odetics ITS/Daimler-Benz cooperative
effort to operate in North America.
2. Freightliner shall have primary responsibility for: (a) [*]; and
(b) [*].
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3. Odetics ITS shall have primary responsibility for: (a) [*]; (b)
[*]; (c) [*]; (d) [*]; (e) [*]; (f) [*]; (g) [*]; and, (h) [*].
III. Modifications Following the Approval of
----------------------------------------
the Customer Product Definition
-------------------------------
Following the approval by both parties of the Customer Product Definition
for the NALTS product, any design change for the NALTS product by either party
will not be made without prior evaluation and approval of the proposed change by
the other party.
IV. Production of NALTS Prototypes
------------------------------
The parties agree to promptly work toward producing C-sample prototypes
with each party carrying out their responsibilities as set forth above. Unless
the parties by mutual agreement extend the time for production of C-sample
prototypes, by no later than [*] Odetics ITS will provide C-sample prototype
NALTS products to be tested for compliance with the Customer Product Definition
as it exists at the time of delivery of the prototypes to Freightliner for
evaluation and field testing. The exact quantity of prototype NALTS products to
be provided by Odetics ITS will be mutually agreed to prior to assembly and
delivery of such prototypes. The price for prototypes shall be as stated in
Exhibit B, which Freightliner shall promptly pay upon delivery of such
prototypes. If such prototypes in compliance with the Customer Product
Definition are not provided to
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Freightliner within the time frame specified by this paragraph of the Agreement,
each party shall have the option of terminating this Agreement without further
liability to the other party. In the event of any such termination, Freightliner
(for use on its class 3-8 trucks) and Odetics ITS (excluding class 3-8 trucks in
North America) shall have a paid-up, royalty-free, worldwide license to utilize
jointly-developed Foreground Technology without any duty to account to the other
party; provided, however, this license to use the jointly-developed Foreground
Technology does not constitute a license to either party to utilize background
or foreground technology solely owned by the other party. Freightliner and
Odetics ITS shall in good faith negotiate appropriate licenses for use of
jointly-developed Foreground Technology for applications excluded above and for
use of solely owned background or foreground technology.
V. Supply of NALTS Products
------------------------
A. Following the acceptance of NALTS prototypes by Freightliner and
during the term of this Agreement, Odetics ITS shall, subject to receipt of a
Freightliner purchase order, deliver NALTS products to Freightliner for sale in
its Class 3-8 trucks, sale to other OEM, and/or sale through its after-market
channels. The price(s) for NALTS products shall be as set forth in Exhibit B.
Provided Odetics ITS is able to meet Freightliner's quality, delivery schedule,
product specification and warranty requirements, Freightliner may, but is not
required to, purchase NALTS products from Odetics ITS. Based upon Freightliner's
forecast of NALTS product sales, Odetics ITS shall allocate sufficient NALTS
product production capabilities to supply Freightliner with NALTS products which
are purchased by Freightliner from Odetics ITS. In the event of a shortage of
components, production capacity or other circumstances which prevent or
interfere with Odetics ITS filling of customer orders, Freightliner shall
receive preference.
B. The base prices for NALTS products shall be as set forth in Exhibit B.
These base prices shall only be adjusted after good faith negotiation between
the parties and modification of Exhibit B by mutual agreement. With respect to
modifications in NALTS products which may be mutually approved by the parties
over time following the acceptance of the prototypes, the price(s) in Exhibit B
shall be used as a base line for negotiating in good faith the initial price for
the modified product. Odetics ITS shall supply NALTS products, as well as
modified NALTS products, to Freightliner to the extent Freightliner issues
purchase orders to Odetics ITS for such products. Freightliner shall have no
purchase requirements with
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respect to any NALTS product provided NALTS products are made available to
Freightliner customers as a published option on or before [*]. If Freightliner
does not include NALTS as a published option on or before [*] it shall
reimburse Odetics ITS for reasonable NALTS non-recurring engineering and
development costs. In addition, exclusivity provisions are subject to purchase
goals specified in Article VI.
C. The parties acknowledge the importance of reducing the price of NALTS
products sold by Odetics ITS to Freightliner and they shall cooperate with one
another to reduce the cost of materials and production of the NALTS products,
including modified versions of such products, to thereby result in a reduction
in the price to Freightliner for such products. Any price change resulting from
price reduction cooperation shall be negotiated in good faith by the parties and
shall be effective only upon modification of Exhibit B by mutual agreement.
D. Unless otherwise agreed by the parties, Freightliner shall pay tooling
costs for tooling (but not for production equipment) specifically required to
produce NALTS products for Freightliner. All tooling for which Freightliner has
been invoiced and for which Freightliner has made full payment of the invoice,
shall be owned solely by Freightliner. Odetics ITS agrees that it will not use
Freightliner owned tooling to produce any products for any other party, unless
authorized in writing in advance by Freightliner.
E. The parties agree that the terms and conditions of Freightliner's
standard purchase order as modified in Exhibit C shall apply to any and all
orders for NALTS products by Freightliner from Odetics ITS whether or not these
modified terms and conditions are cited therein.
F. Odetics ITS shall be responsible for integrating and incorporating
software into any NALTS products, at the time of manufacture, regardless of who
develops the software. Odetics ITS shall maintain a NALTS product identification
system to enable a determination of the specific version of software and
hardware included in each NALTS product from an examination of the NALTS
product.
G. Odetics ITS and Freightliner recognize the benefits of supplying a
quality product to the purchaser of Freightliner vehicles. To better ensure that
NALTS products will meet the temperature and other conditions experienced in
Freightliner trucks, such products will be tested in accordance with a test
procedure to be mutually agreed upon in good faith by the
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[*] Confidential Treatment Requested for Redacted Portion
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parties. Odetics ITS shall bear the cost of compliance with the test procedure
for stand-alone product testing; Freightliner shall bear the cost of compliance
with the test procedure for in-truck system level and road testing.
H. Odetics ITS shall provide Freightliner with sufficient information
concerning the NALTS product, including any software included in such product
(including source code if required) to enable Freightliner and its designees to
service NALTS products. Odetics ITS hereby grants Freightliner and its designees
a paid up, royalty fee, worldwide license to maintain, service, install any
authorized modification or upgrade, and repair any NALTS products purchased by
Freightliner Companies from Odetics ITS. Such license does not authorize
Freightliner or its designees to manufacture, have manufactured, incorporate or
make derivatives of any NALTS products for any purpose.
VI. Exclusivity
-----------
A. Recognizing Freightliner's contributions to the development of NALTS
products, for a period of three (3) years from the commercial availability of
NALTS products to Freightliner customers, Odetics ITS will not provide any NALTS
product developed pursuant to this Agreement, or any product incorporating any
Odetics ITS or Freightliner Background or Foreground Technology, or any lane
departure detection product to any other Class 3-8 vehicle manufacturer or for
use in Class 3-8 vehicles knowingly destined for delivery or sale to end users
in North America. This initial three (3) year exclusivity period is contingent
upon Freightliner achieving the agreed minimum purchase goals listed in the
following table. A two (2) year extension of the exclusivity to five (5) years
is subject to a mutually agreed marketing method addressing non-Freightliner
fleet purchases.
Minimum Purchase Goals
----------------------
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Time from First Notice or Total Unit Volume of
Offering of NALTS Products for Purchase Orders of
Sale NALTS Products by
To Freightliner Customers Freightliner Companies
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0 to one year [*]
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One year and one day [*]
to two years
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Two years and one day [*]
to three years
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It is specifically understood by the parties that Freightliner is not obligated
to make any purchases from Odetics ITS. Should Freightliner not make the minimum
purchases from Odetics ITS during any calendar year, Odetics ITS shall have as
its sole remedy, waiver of all restrictions in this paragraph VI for sale of any
NALTS product developed pursuant to this Agreement, or any product incorporating
any Odetics ITS or Freightliner Background or Foreground Technology, or any lane
departure detection product to any other Class 3-8 vehicle manufacturer or for
use in Class 3-8 vehicles.
B. Recognizing Odetics ITS contributions to the development of NALTS
products, for the same time periods specified in paragraph VI A, Freightliner:
(1) will not cooperate or participate in the development of any product
competitive to any NALTS product incorporating any Odetics ITS Background
Technology, Freightliner Foreground Technology or jointly-developed Foreground
Technology; and (2) will specify the NALTS products developed under this
agreement as the Freightliner recommended and preferred Lane Departure Detection
product or system.
C. Except for any license which is expressly set forth in this
Agreement, neither party to this Agreement grants the other party any rights in
its own Background or Foreground Technology or in any other technology owned by
the other party. Subject to whatever patent and copyright rights the other party
may have, and subject to the exclusivity provisions of the preceding paragraphs
(paragraphs VI. A and VI. B of this Agreement, either party is free to
independently develop, offer to sell or sell any products or services even
though such products or services may be similar to the products covered by this
Agreement.
VII. Confidentiality
---------------
The Confidentiality Agreement dated September 9, 1998 which is now in
effect between the parties shall remain in effect.
VIII. Intellectual Property Rights/Licensing
--------------------------------------
The following provisions shall apply to the rights and obligations of the
parties with respect to the results of the development work:
A. Background Technology
Each party shall retain ownership of its own Background Technology; and
unless otherwise expressly provided herein,
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neither party grants the other any license to disclose such technology or to use
such technology in connection with the manufacture or sale of any products.
B. Foreground Technology
1. Foreground Technology developed by an employee or representative
of a party and any patents or other intellectual property rights based thereon,
shall be owned by that party. The parties shall inform each other of patent
applications which are filed on such inventions. The parties specifically agree
that, as between the parties, the Lane Detection Techniques developed in whole
or in part by Freightliner shall be deemed Freightliner owned Foreground
Technology. Freightliner shall, as between the parties, solely own the Lane
Detection Techniques and all worldwide rights therein, including, but not
limited to worldwide copyright and patent rights therein.
2. Foreground Technology developed jointly by employees or
representatives of both parties, and any patents or other intellectual property
rights based thereon, shall be jointly owned by both parties. In order for
Foreground Technology to be jointly developed, employees or representatives of
both parties must contribute substantially to a completed design. A substantial
contribution to a completed design does not include mere specification of form,
fit and function or testing or critiquing a completed design.
3. The party to whose business a jointly made invention most closely
relates shall have the first option to file a U.S. patent application and any
foreign patent application(s) using counsel of its choice, and the other party
will cooperate fully therein, including in the execution of all necessary
documents. If such party chooses not to file on a jointly made invention, the
other party may file and shall have the cooperation of the non-filing party.
Neither party is obligated to file any patent application on any invention. In
the absence of a written agreement to the contrary, the party who proceeds with
the filing of a patent application shall bear all costs associated with
obtaining patent protection on an invention and may abandon its attempt to seek
patent protection or any resulting patent without notice to the other party.
Either party, at its own expense, may file foreign (non-U.S.) patent
applications on jointly made inventions. The other party shall jointly own any
such foreign patent applications and any patent rights issuing thereon and is
not obligated to make any payment therefore.
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C. Patents and Copyrights
1. As between the parties, all worldwide copyrights in Freightliner
Background Technology and in the Lane Detection Techniques and in all derivative
works thereof shall belong to Freightliner. Odetics ITS will execute all
documents, prepared at Freightliner expense, required to assign and/or confirm
such rights in Freightliner.
2. As between the parties, all worldwide copyrights in Odetics ITS
Background Technology and in all derivative works thereof shall belong to
Odetics ITS. Freightliner will execute all documents, prepared at Odetics ITS
expense, required to assign and/or confirm such rights in Odetics ITS.
3. As between the parties, all worldwide copyrights in jointly-
developed Foreground Technology shall be belong to both parties and either party
may copy, use, or make derivative works without accounting to the other party.
Worldwide copyrights in derivative works shall belong to the party creating the
derivative works.
D. Licensing
1. At any time while this Agreement is in effect and following the
completion of NALTS prototypes acceptable to the parties, in the event Odetics
ITS is unable or unwilling to supply any NALTS products to Freightliner pursuant
to this Agreement, Odetics ITS hereby grants to Freightliner upon any such
occurrence a paid-up, royalty-free, perpetual, nonexclusive, worldwide right and
license to use any technology incorporated in any NALTS product previously
delivered to Freightliner, and modifications and derivative works based
thereupon, in any Freightliner Corporation class 3-8 truck. This license shall
extend to use and resale by Freightliner, its subsidiaries, joint ventures and
their customers of products incorporating this technology. In such an event,
Odetics ITS agrees to transfer any Freightliner owned tooling to Freightliner
and grants Freightliner a license to any patents, copyrights and other
technology required to enable Freightliner to carry out the provision of this
paragraph VIII. D. 1 of this Agreement.
2. Providing NALTS products conforming to the Customer Product
Definition are developed and prototypes are delivered to Freightliner,
Freightliner grants Odetics ITS a paid-up, exclusive, royalty-free, worldwide,
license to utilize Freightliner Foreground Technology to make, have made, use,
offer to sell or sell in any lane tracking device provided such devices
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are for other than Class 3-8 trucks in North America during any effective
exclusivity period.
3. During any effective exclusivity period, Odetics ITS shall have
no right to use Freightliner Background or Foreground Technology, including Lane
Detection Techniques and derivatives thereof, in any product for use in any
class 3 - 8 truck(s) except as such products are sold to Freightliner or
Freightliner designees. Beginning upon expiration of any exclusivity period or
failure by Freightliner to meet Minimum Purchase Goals and continuing for three
(3) years thereafter, Odetics ITS shall pay Freightliner a royalty for use of
Freightliner Background or Foreground Technology in the amount of three percent
(3%) of the net sales price for any NALTS product, or derivative thereof
incorporating Freightliner Technology, sold to a party other than Freightliner
or Freightliner designee for use in any end user class 3-8 truck in North
America. Thereafter, sales of NALTS products or derivatives thereof
incorporating Freightliner Technology to another party shall be royalty free.
Net sales price will not include shipping costs, sales and excise taxes, export
duties or fees, sales commissions, or the cost of parts purchased from Odetics
ITS. Such royalties will be payable semi-annually on or before thirty (30) days
after June 30 and December 31.
IX. Term and Termination
--------------------
A. Unless earlier terminated in accordance with its terms, this Agreement
shall remain in force for a period of ten (10) years from its effective date.
B. This Agreement may be terminated by either party upon a material
breach by the other party which is not cured within sixty (60) days of written
notice to the breaching party from the non-breaching party. The following
provisions of the Agreement shall remain in effect following termination: VI,
--
VII, and VIII
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X. Warranties
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A. Each party warrants that it has the right to enter into this
Agreement.
B. In the event a claim is received by one party that alleges the NALTS
Products or any part thereof infringes upon the patent, copyright, trademark or
proprietary rights of others, the receiving party shall immediately notify the
other party in writing of such claim. The party whose Background or Foreground
Technology is the subject of the claim, or the party whose
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business more closely relates to a jointly developed Foreground Technology that
is the subject of the claim shall be authorized the sole power to defend or
settle such claim, and exercise its best efforts to procure for the other party
the right to use the NALTS Products or modify the NALTS Products to avoid
infringement. The other party will cooperate, at its own expense, in the defense
of any such claims as reasonably requested by the defending party. The defending
party shall indemnify and hold the other party harmless from any damages
resulting from a judgment of infringement from a competent authority.
XI. Miscellaneous
-------------
A. The rights and obligations of the Parties to this Agreement and all
interpretations of this Agreement shall be governed in all respects by the
domestic laws of the State of Oregon, except for its rules with respect to
conflict of laws.
B. Any notices, reports and submittals required by this Agreement must be
in writing and may be given by U.S. Express Mail (or other written means if
receipt is acknowledged or if proof of delivery is obtained) to:
FREIGHTLINER CORPORATION ODETICS ITS, INC.
Attn: Xxxxxx Xxxxx Attn: Xxx Xxxxxxx
0000 X. Xxxxxxx Xxxxxx 0000 X. Xxxxxxxxxx Xxxxxx
X.X. Xxx 0000 Xxxxxxx, XX 00000
Xxxxxxxx XX 00000-0000 Phone: 714/000-0000
Phone: 503/000-0000 Fax: 714/000-0000
Fax: 503/000-0000
C. This Agreement may not be changed, amended or modified except by means
of a written document executed by the duly authorized representatives of the
parties.
D. This Agreement, including the Exhibits A-B and the Confidentiality
Agreement identified in Article VII, which are each incorporated by reference
herein, shall constitute the entire agreement between the parties related to its
subject matter and supersedes any prior contemporaneous discussions,
understandings' representations or proposals' written or oral between the
parties. No party has relied upon any representation (whether express, implied
or by way of omission) unless such representation is contained in this
Agreement. If any portion of this Agreement is held illegal or unenforceable by
a court of competent jurisdiction, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired.
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E. No term of this Agreement shall be considered waived, and no breach
excused by either party unless made in writing executed by an authorized
representative of the party which is waiving or excusing the breach. No consent,
waiver or excuse by any party, whether express or implied, shall constitute a
subsequent consent, waiver or excuse.
F. Neither this AGREEMENT nor any interest herein may be assigned, in
whole or in part, by either party hereto without the prior written consent of
the other party hereto, except that without securing such prior consent, either
party hereto shall have the right to assign this AGREEMENT to any successor or
to such party by way of merger or consolidation or the acquisition of
substantially all of the entire business and assets of such party relating to
the subject matter of this AGREEMENT, provided that such successor shall
expressly assume all of the obligations and liabilities of such party under this
AGREEMENT, and provided further, that such party shall remain liable and
responsible to the other party hereto for the performance and observance of all
such obligations.
G. With the exception of injunctive relief sought by either party, any
dispute unresolved between the parties arising out of or in connection with this
Agreement shall be settled by binding arbitration. Arbitration shall be
conducted in a mutually convenient location in accordance with the rules of the
American Arbitration Association ("AAA"). In any case, there shall be only one
arbitrator who shall be selected by mutual agreement of the parties. The Civil
Discovery Rules of the State of Oregon shall apply to such arbitration. The
prevailing party shall be entitled to reasonable costs and attorney fees.
Judgment upon any award may be entered in any court having jurisdiction thereof.
H. This Agreement may be executed in duplicate with each party retaining
a fully executed copy with each such executed copy having the full force and
effect of an original.
I. The subheadings of this Agreement, including those in the Exhibits
hereto, are provided for purposes of convenience and are not to be considered
nor are they to affect the interpretation of this Agreement.
J. The parties are independent contractors relative to one another.
Nothing in this Agreement shall be construed as creating a fiduciary
relationship between the parties or making the parties partners, joint ventures
or employees of the other, or to
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make either party liable for any of the debts or obligations of the other party.
Neither party shall be considered as an agent, employee or representative of the
other in any dealings with third parties, or otherwise. Neither party shall act
for or make any representations on behalf of the other party and shall have no
power to contract on behalf of the other party.
K. Force Majeure - Neither party shall be liable to the other for failure
to perform its obligations under the Agreement when performance is prevented by
flood, drought, fire, war, riot, acts of God, Government interference, or any
other cause beyond its control.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized representatives as of the dates set forth below.
Freightliner Corporation Odetics ITS, Inc.
(Freightliner) (Odetics ITS)
By: /s/ V.W. XXXXXX By: /s/ XXXX XXXXXXX
----------------------------- -----------------------------
Name: V.W. Xxxxxx Name: Xxxx Xxxxxxx
----------------------------- -----------------------------
Title: V.P. Purchasing Title: President
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Date: 1-11-94 Date: December 23, 1998
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EXHIBIT A
PRELIMINARY DESCRIPTION OF NALTS PRODUCT
----------------------------------------
The North American Lane Tracking System (NALTS) is a single board electronic
module for Freightliner Corporation class 3-8 trucks,which when properly
located, aimed, and focused will capture roadway images, process them to
identify lane markings, track the lane markings, collect other vehicle inputs,
evaluate lane marking positions with respect to the other vehicle inputs, and
generate an audible tone warning when an imminent lane departure is calculated.
The module consists of a power subsystem (voltage regulator and transient
protection); an imaging subsystem (lens, lens mount, +imager, and video buffer);
a processing subsystem (digital signal processor, volatile memory, non-volatile
memory, and control logic); a discrete interface subsystem (two input receivers
and an output driver with protection circuitry); a CAN interface subsystem (CAN
processor and CAN transceivers); a warning generation subsystem (pulse
generator, amplifier, and protection circuitry); and an interface subsystem. The
figure below shows a graphical representation of the system. The module hosts a
complete lane tracking software solution including image capture and
improvement, lane detection techniques, and drivers for the various system
interfaces.
[DIAGRAM OF PROPOSED NALTS PRODUCT APPEARS HERE]
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EXHIBIT B
BASE PRICES FOR NALTS PRODUCTS
------------------------------
===================================================================
Annual Order Quantity
--------------------------------
[*] [*] [*]
-------------------------------------------------------------------
Unit Price $[*] $[*] $[*]
===================================================================
C Samples $815 each
Notes:
1. All prices quoted FOB Sellers Factory in 1999 U. S. dollars.
2. Price breaks are based upon annual order quantities.
3. Price for quantity [*] is based upon a planned design update for cost
reduction.
__________
[*] Confidential Treatment Requested for Redacted Portion
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EXHIBIT C - FREIGHTLINER TERMS AND CONDITIONS OF PURCHASE (Modified)
1. DELIVERY AND ACCEPTANCE - Time of delivery is of the essence of this
purchase order. Acceptance of this purchase order shall be unqualified,
unconditional, and subject to the terms and conditions herein. No additional or
different terms and conditions, including those which appear in any quotation,
acceptance or acknowledgment of Seller, shall be of any force or effect unless
Buyer expressly agrees in writing to such additional or different terms and
conditions. Seller agrees that it will not assert, as a defense to the
enforcement of the conditions of this purchase order, any limitation set out in
its acceptance or acknowledgment of this order. Upon acceptance, this purchase
order shall constitute the entire agreement between Buyer and Seller unless
otherwise agreed to in writing by both Buyer and Seller.
2. PACKING, MARKING AND SHIPPING - Shipments shall be routed in accordance
with Buyer's instructions, and Seller agrees to reimburse Buyer for all expense
incurred by Buyer as a result of improper packing, marking or routing. Buyer's
purchase order number, part number, and Seller's shipment identification (SID)
number will appear on each package and xxxx of lading. Goods for two or more of
Buyer's locations will be shipped in separate packages for the different
locations. Shipments in excess of those authorized may be returned to Seller,
and Seller shall pay the transportation charges both ways for such shipments.
Subject to item 8, CHANGES herein, Buyer may from time to time change shipping
schedules previously furnished Seller, or direct temporary suspension of
scheduled shipments. Buyer's count will be accepted as final on all shipments.
Unless otherwise expressly agreed to in writing by Buyer, no charge shall be
made by Seller for containers, crating, boxing, bundling, dunnage, drayage, or
storage.
3. PERFORMANCE/DELAYS - (a) Seller agrees not to give any other customer of
Seller any priority over Buyer in the allocation of Seller's production. (b)
Timely delivery is essential; however, neither party shall be liable to the
other for any material delay or failure to perform where such delay or failure
is caused by events beyond the control of the affected party. The foregoing
shall be subject to the affected party giving reasonable notice to the other
party. In the event of a material delay or failure to perform by Seller, Buyer
may, without waiving its right to seek damages caused by the delay, either
terminate this purchase
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order or reject any partial or future performance, without further liability of
Buyer, upon written notice to Seller.
4. INVOICES - Delay in receiving invoices, also errors and omissions on
invoices, will be considered just cause for withholding payment without losing
cash discount privileges.
5. TAXES - Buyer will not pay Seller any state or local sales, use, or similar
tax unless Seller is required by law to collect such taxes from Buyer. Federal
excise taxes charged to Buyer shall be separately stated or it shall be
indicated as being included in the unit price. Seller agrees that no tax for
which an exemption is indicated hereon or otherwise by Buyer is or will be
included in the prices stated hereon, nor will they be subsequently charged.
Seller agrees to pay any and all personal property and/or ad valorem taxes
assessed or otherwise levied against any property placed in the hands of Seller
by Buyer for the purpose of fulfilling this purchase order.
6. WARRANTY - Seller warrants that all goods and services covered by this
order shall, at the time of delivery to Buyer, conform to the specifications,
drawings, samples or other description upon which this order is based (software
shall not be included for purposes of this order), shall be of good material and
workmanship and free from defect. This warranty shall run to Buyer, its dealers,
customers, and users of its products. Seller agrees to promptly replace or
correct defects of any goods or services not conforming to the foregoing
warranty provided the nonconforming item is returned to Seller promptly upon
discovery of nonconformity, but in no case later than ninety (90) days after
warranty period has expired. This warranty shall be void in the event, (i) the
item fails, malfunctions or is damaged as the result of improper modifications
or repairs, (ii) the item fails as the result of improper or insufficient
maintenance, (iii) the item is damaged by accident or induced failure or (iv)
the item is subjected to abuse or improper use.
NO OTHER WARRANTIES OR GUARANTEES, EXPRESSED OR IMPLIED INCLUDING
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARISING BY LAW, CUSTOM, OR
CONDUCT, SHALL BE APPLICABLE. THE RIGHTS AND REMEDIES PROVIDED HEREIN ARE
EXCLUSIVE AND IN LIEU OF ANY OTHER RIGHTS OR REMEDIES.
7. INDEMNITY - Seller agrees to indemnify and save harmless Buyer, its agents
and employees, against any claims, actions or demands against Buyer, its agents
and employees, and against any damages, liabilities or expenses, for injury to
or death of any person and for loss of or damage to any and all property arising
out of a claim of defect in the materials, workmanship, or
-19-
manufacture of products delivered under this agreement (software is not included
for purposes of this order).
8. CHANGES - Buyer may at any time and from time to time make changes in the
drawings, designs or specifications, method of shipping or packing, and the
place of delivery of any goods and/or work covered hereby. Any such change is
subject to negotiation of an equitable change in price and/or schedule.
9. PATTERNS, TOOLS AND DIES - All patterns, tools, dies, or other material
furnished by Buyer to Seller, or which are specifically paid for by Buyer, and
any replacement thereof, or anything affixed or attached thereto, shall be and
remain Buyer's personal property. Such property, if it can reasonably be done,
shall be plainly marked or otherwise adequately identified by Seller as
"Property of Freightliner", and shall be safely stored separate and apart from
Seller's property. Seller shall not substitute any property for such and shall
not use such property except for filling Buyer's order. While in Seller's
custody or control, such property shall be held at Seller's risk, and shall be
subject to removal at Buyer's request.
10. RECALL OR REPAIR CAMPAIGN - In the event it is determined that a product of
Seller purchased hereunder creates or contributes to a vehicle repair campaign
or safety recall due to a vehicle defect, or non-compliance with the National
Motor Vehicle and Traffic Safety Act, Seller shall pay the cost of repair or
recall and correction, including labor and administrative costs, based upon
Seller's proportionate responsibility for the defect or non-compliance. This
section shall not limit Seller's liability under other provisions hereof.
11. WORK ON BUYER'S OR ITS CUSTOMERS' PREMISES - If Seller's work under this
purchase order involves operations by Seller on the premises of Buyer, Seller
shall take all necessary precautions to prevent the occurrence of any injury to
person or property during the progress of such work. Seller agrees to indemnify
and protect Buyer against all liabilities, claims, or demands for injuries or
damage to any person or property growing out of the performance of this purchase
order, and to pay Buyer's costs and expenses in connection with any thereof.
Seller shall maintain such public liability property damage, and employer's
liability and worker's compensation insurance as will protect Buyer from said
risks and from any claims under any applicable worker's compensation,
occupational disease, or similar act. Seller shall furnish certificates of
insurance to Buyer at Buyer's request.
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12. INFRINGEMENT - Refer to Article X, paragraph B of this agreement.
13. USE AND PROTECTION OF INFORMATION - Refer to Article VII of this agreement.
14. COMPLIANCE WITH LAWS - Seller agrees to comply with all applicable federal,
state and local laws, regulations and ordinances and to indemnify Buyer against
all liability for Seller's failure so to comply. The provisions of Executive
Order 11246 relating to Equal Employment Opportunity, the Vietnam Era Veterans
Readjustment Assistance Act of 1974, and the Rehabilitation Act of 1973 relating
to handicapped persons, are made a part of this purchase order by reference.
15. RELATIONSHIP - Neither Seller nor its subcontractors or the employees or
agents of any of them, shall be deemed to be Buyer's employees, or agents, it
being understood that Seller and its subcontractors are independent contractors
for all purposes and at all time, and Seller shall be wholly responsible for
withholding or payment of all federal, state and local income and other payroll
taxes with respect to its employees, including contributions from them and as
required by law.
16. TERMINATION AT OPTION OF BUYER - At its option, Buyer may terminate all or
a part of the work under this purchase order. In such case, Buyer shall have no
liability with respect to goods or components procured, or work done, or
supplies partially fabricated, in excess of authority contained in this order or
in any shipment release and issued to Seller pursuant hereto. In no event shall
Buyer be liable for prospective or anticipated profits by reason of such
termination.
17. TERMINATION ON DEFAULT OF SELLER - By notice in writing to Seller, Buyer
may terminate this purchase order, without liability except as hereinafter
stated, upon (a) Seller's failure to conduct its operations in the normal course
of business (including liability to meet its obligations as they occur) or(b)
the instituting of any proceedings by or against Seller under the bankruptcy or
insolvency laws, or (c) appointment or application for a receiver for Seller, or
(d) an assignment by Seller for the benefit of creditors, or (e) Seller's
default in any other particular in the performance of this purchase order. Upon
termination pursuant to this paragraph, Buyer shall pay Seller for deliveries
previously made and not paid for,for materials and/or work-in-process as a
direct result of an active delivery order or shipment release from Buyer, and
for goods completed at the time of termination in accordance with this purchase
order
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and subsequently delivered according to the purchase order or the shipment
release and issued pursuant hereto.
18. ENFORCEMENT AND SEVERABILITY - Buyer's failure at any time to enforce any
of the provisions of this purchase order or any right with respect thereto, or
to exercise any option herein provided, shall in no way be construed to be a
waiver of such provisions, rights, or options or in any way to affect the
validity of this purchase order. This purchase order is to be governed by and
construed under the laws of the State of Oregon. In the event that any one or
more of the provisions contained herein shall for any reason to be held invalid
and/or unenforceable in any respect, such invalidity/unenforceability shall not
affect any other provision of this purchase order. This purchase order shall
then be construed as if such invalid/unenforceable provision(s) had never been
contained herein.
19. ELECTRONIC DATA INTERCHANGE - If Buyer and Seller use electronic data
interchange for order processing, all transactions shall be in accordance with
Buyer's electronic data interchange users manual.
20. HAZARDOUS SUBSTANCES/LABELS - Seller shall notify Buyer in writing upon
receipt of this purchase order if goods sold hereunder are subject to laws or
regulations relating to hazardous or toxic substances; or when disposed of, to
regulations governing hazardous waste, or to any other environmental or safety
and health regulations. Seller shall furnish all appropriate shipping
certification and instructions for shipping, safety, handling, exposure, and
disposal (including without limitation material data safety sheets) in a form
sufficiently clear for use by Buyer's non-technical personnel and sufficiently
specific to identify all action which the user must take concerning the
material. All labels must conform to the ANSI Z535 standard for product safety
labels.
21. ASSIGNMENT - Refer to Article XI, paragraph F of this agreement.
22. HEADINGS - Captions and headings in this agreement are intended for ease of
reference only and shall not in any manner affect the construction or meaning of
this purchase order or the rights and obligations of the parties.
-22-
