EXHIBIT 00xx
XXXXX
LICENSE, TRADEMARK, AND SUPPLY AGREEMENT
This Agreement, made this 10th day of September, 1996, is entered into by
and between (l) LOJACK CORPORATION, ("LOJACK"), a Massachusetts corporation
having its principal place of business at 000 Xxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 XXX and LOJACK INTERNATIONAL CORPORATION, ("LIC"), a Delaware Corporation
having its principal place of business at 000 Xxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 XXX (collectively, "LICENSOR"); and S1 Corporation, a Korean Corporation
having a place of business at 10th floor, East Wing Xxx-xxxx Xxxx., x-00,
Xxxxxx-Xxxx, Xxxxxxx-Xx, Xxxxx, Xxxxx, hereinafter referred to as ("LICENSEE").
W I T N E S S E T H
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WHEREAS, LOJACK has developed and owns a system for the recovery of stolen
vehicles; and
WHEREAS, LOJACK has developed and owns Software and Software Programs
relative to the system for the recovery of stolen vehicles; and
WHEREAS, LOJACK has licensed to LIC its Software Programs, Trademarks and
related documentation in order for LIC to develop and license its own system for
the activation and recovery of stolen vehicles; and
WHEREAS, LICENSOR has agreed to grant LICENSEE an exclusive license to use
the Licensed Software Programs, associated documentation, and Trademarks; sell
VLUs; and use Products in the Territory as hereunder defined and to provide
certain services to LICENSEE including technical support, supply of Products,
and training upon the terms and conditions of this Agreement; and
WHEREAS, LICENSEE, recognizes the benefits to be derived from being
identified with the license by LIC, and being entitled to utilize the System and
Trademarks which LICENSOR makes available to its licensees, pursuant to
agreement; and
WHEREAS, LICENSEE desires to receive and LICENSOR is willing to grant an
exclusive License for the Licensed Rights solely in the Territory subject to the
provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
for other good and valuable consideration, receipt whereof is respectively
acknowledged, the undersigned parties hereby agree as follows:
DEFINITIONS
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Unless the context otherwise requires, the following terms, shall have the
meanings set forth below:
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CONFIDENTIAL INFORMATION
------------------------
For purposes of this Agreement "Confidential Information" shall mean:
(i) the design details and operating characteristics of the System,
information relating to the installation of VLUs in motor vehicles,
and all other aspects of the System designated as confidential or
proprietary by LICENSOR and not generally known, including all
related software, file structures, documentation, algorithms and
related software concepts;
(ii) all information, data, analyses, compilations, reports or
interpretations relating to technical, product, marketing,
financial, and business information, including but not limited to,
know-how, research, product plans, products, services, designs,
drawings, engineering, hardware configuration information, object
code, source code, interpretations, forecasts and records, which is
designated to be confidential or proprietary;
(iii) all oral information which is confirmed in writing as having been
disclosed as confidential or proprietary;
provided, however, Confidential Information shall not include:
(i) any information or data which at the time of furnishing was in the
public domain or which after such furnishing becomes part of the
public domain by any party other than LICENSEE;
(ii) any information or data which at the time of furnishing was already
in possession of the LICENSEE as evidenced by pre-existing written
records of the LICENSEE and was not previously acquired, in
confidence, from LICENSOR, or any other party obligated to maintain
the confidentiality thereof;
(iii) any information or data independently developed by the LICENSEE at
any time, without the benefit of any of the Confidential
Information, which independent development is demonstrated by
written evidence, or lawfully acquired from a third party not
subject to any restrictions on the disclosure thereof;
(iv) any information or data which LICENSOR publicly discloses;
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(v) any information or data which the LICENSEE is required to disclose
under the authorities of any statutes, ordinances, regulations, or
orders of the court or other government authorities, or in the
performance of this Agreement. In the event, LICENSEE is required to
disclose any Confidential Information pursuant to the authority of
any statute, ordinance, regulation or order of the court of
governmental authority, the LICENSEE will promptly provide LICENSOR
with prior written notice in order to enable LICENSOR, to seek a
protective order or other appropriate remedy and/or waive compliance
by the LICENSEE with the provisions of this Agreement. If, in the
absence of a protective order or waiver, the LICENSEE is compelled
to disclose any Confidential Information, the LICENSEE may disclose
only that portion of the Confidential Information which is legally
required.
LICENSEE:
--------
The LICENSEE shall mean Sl provided that Samsung America, Inc. (the
"Licensee Affiliate") will enter into a certain Confidentiality Agreement
with LICENSOR (the "Confidentiality Agreement") and the rights and
obligations of the Licensee Affiliate hereunder shall be limited to those
under the Confidentiality Agreement.
LICENSED SOFTWARE PROGRAM
-------------------------
The software programs in object code form which are required to operate the
System, including all updates, revisions and any new release of the same
which may be issued from time to time within the term of this Agreement and
some of which is protected under copyright laws.
TRADEMARKS
----------
All trademarks and trade names and logos now or hereafter registered in the
Territory during the term of this Agreement owned by LOJACK and Licensed to
the LICENSOR.
PRODUCTS
--------
All products purchased by LICENSEE from LICENSOR, including Vehicle
Location Units ("VLUs"), Vehicle Tracking Computers, (or "VTCs") the
Vehicle Activation Computer ("VAC"), Vehicle Activation Transmitter
("VATs") and all other components of the System.
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SYSTEM
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A system for locating and recovering stolen motor vehicles, utilizing a
computerized transceiver in the vehicle (the "VLU", in the singular, and
"VLUs" in the plural); devices system for activating the VLU after report
of a theft (the "Vehicle Activation Computer and Vehicle Activation
Transmitter(s)"); and a directional tracking unit designed for installation
the in vehicles that are used for tracking the stolen vehicles (the
"Vehicle Tracking Computers"); and all enhancements and improvements
thereto, as outlined in the definition document appended as Attachment I.
LICENSED RIGHTS
---------------
The Licensed Software Program, the Trademarks, the Confidential Information
and Proprietary Information, including a U.S. Patent for use only as it
applies in the Territory and for no other purpose, and access to any and
all improvements, updates and revisions thereof.
PROPRIETARY INFORMATION
-----------------------
All inventions, whether patented or unpatented, design rights, copyrights
and data and information in the nature of copyrightable material, know-how,
trade secrets, and Confidential Information and any applications and rights
to apply for any of the foregoing in any part of the world in respect of
all drawings and other documents, recordings in any form and all other
articles bearing or embodying any part of the System.
TERRITORY
---------
Korea and its territories (as such are in place as of the date of this
Agreement), including North Korea.
EFFECTIVE DATE
--------------
The Effective Date of this Agreement shall be the date that LICENSEE makes
the first installment of License Fee required in Section 2.1.
1. TRADEMARK LICENSE, SOFTWARE LICENSE,EXCLUSIVE
---------------------------------------------
DISTRIBUTION RIGHTS, and INFRINGEMENT
--------------------------------------
1.1 The LICENSOR hereby grants to LICENSEE for the term described in
Section l.6 subject to the terms and conditions herein, including
Performance Standards provided in Section l6 hereof an exclusive
license to use the Licensed Rights solely in connection with the
operation of the System within the Territory.
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All improvements, updates, and revisions to the System shall be made
available to LICENSEE at no additional cost, provided that LICENSEE
is responsible, at its cost, for adapting such improvements to its
own System.
1.2 During the term of this Agreement, and within the Territory,
LICENSOR grants to LICENSEE, subject to all terms and conditions set
forth in this Agreement, the exclusive right to sell and distribute
for resale VLU's, solely in the Territory, either to vendors
appointed by LICENSEE selling VLU's to motor vehicles owners or
operators in the usual course of business, or directly to such motor
vehicles owners or operators.
1.3 LICENSOR, in consideration of the payment by the LICENSEE of the
amounts set forth in Section 2.1, hereby grants to LICENSEE the
exclusive license to use solely in the Territory, the Licensed
Software Programs, solely in the operation of the System in the
Territory for the purposes described in Sections l.2 and l.7.
Updates, revisions, and new releases to the Licensed Software
Programs will be made available to LICENSEE at no cost, provided
that LICENSEE is responsible, at its cost, of adapting such
improvements to its own System.
1.4 In consideration of the payment by LICENSEE of the amount set forth
in Section 2.1, LICENSOR hereby grants to LICENSEE the exclusive
license to use, solely in the Territory for the purpose described in
Sections l.2 and l.7, the rights granted under this Agreement in
connection with the operation of the System, during the term of this
Agreement, including but not limited to any Patent Rights that may
be granted in said Territory.
1.5 During the term of this Agreement and within the Territory, LICENSOR
grants to LICENSEE, subject to all terms and conditions set forth in
this Agreement, the exclusive license to use the Trademarks solely
and exclusively in connection with the sale of Products in the
Territory and for no other use or purpose. LICENSEE recognizes and
acknowledges that the LICENSEE is the sole and exclusive LICENSEE of
the Trademarks and agrees not to register any of the Trademarks in
its own name or that of any other firm, person, or corporation and
further agrees not to use the LICENSOR'S name
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nor any of its Trademarks as any part of its corporate name, and
LICENSOR has the right to monitor the quality of LICENSEE'S
operations as set forth in Article l6 of this Agreement.
1.6 The term of this Agreement shall commence on the Effective Date, and
shall continue for a term of ten (10) years, with automatic renewals
for successive five (5) year periods thereafter subject to earlier
termination as provided in Article 14 of this Agreement, and other
provisions of this Agreement. Notwithstanding the foregoing, the
automatic term renewal provided above shall not take effect if
LICENSEE shall be in default beyond grace of its obligations
hereunder, or in the event of the occurrence of any other event of
default under Article 14 of this Agreement.
1.7 The rights herein granted are limited to sales of Products for
ultimate use in motor vehicles located in the Territory, which
includes trucks. LICENSEE agrees not to use the Licensed Rights,
System, or technology utilized therein for any other or additional
applications without the written approval of LICENSOR in each
instance, which approval shall be at LICENSOR's sole discretion and
may require payment of an additional fee. In no event shall LICENSEE
be allowed to use or sell Products for any purpose outside the
Territory, and LICENSEE specifically consents to this restriction
and limitation.
1.8 (a) LICENSEE promptly shall notify LICENSOR of any claim by a third
party that any activities of LICENSEE pursuant to this Agreement
infringes trademark or proprietary rights of that third party. In
such event, LICENSOR shall, at its sole expense, without cost to
LICENSEE:
(i) defend against such claim and indemnify and hold harmless
LICENSEE against all damages, liabilities, costs and expenses that
may be suffered or incurred by LICENSEE in connection with such
claim and any legal proceedings in respect thereof ("Defensive
Litigation"), provided that LICENSEE shall have given notice as
provided above of any such claim forthwith upon becoming aware of it
and further gives LICENSOR the sole conduct of the defense of
litigation and does not at any time admit liability or otherwise
attempt to settle or
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compromise the said claim or any legal action or proceedings in
respect thereof except upon the express written instructions of
LICENSOR, and acts in accordance with the reasonable instructions of
LICENSOR as notified to LICENSEE and gives LICENSOR such assistance
as it shall reasonably require and instruct LICENSEE in writing to
provide in connection with the conduct of the Defensive Litigation
including, without prejudice to the generality of the foregoing, the
filing of all pleadings and other court process and the provision of
all relevant documents and the right to use LICENSEE's name or to
join LICENSEE as a party to the proceedings, or
(ii) procure the right for LICENSEE to continue exercising
the Licensed Rights granted hereunder, or LICENSOR shall make such
alterations, modifications and adjustments to the Licensed Rights as
may be necessary to make the exercise thereof non-infringing,
without incurring any material diminution of the performance or
function of the System, or replace all or any part of the Licensed
Rights with non-infringing substitutes provided that such
substitutes do not entail a material diminution in performance; or
(iii) in the event that LICENSOR, despite the use of
reasonable efforts, cannot reasonably accomplish either (i) or (ii)
above, at reasonable expense, then LICENSOR shall refund a
proportionate part of LICENSEE fee provided in Section 2.1,
proportionate to the degree to which LICENSEE is prohibited from
exercising its rights in this Agreement.
(b) In the event of any infringement or claimed infringement of the
Licensed Rights by a third party, LICENSEE shall promptly notify
LICENSOR of said infringement or claimed infringement to the extent
such infringement would materially and adversely affect the value of
the Licensed Rights to the LICENSEE. In such a case, LICENSOR shall
promptly notify LICENSEE what action, if any, LICENSOR in its sole
discretion elects to take in respect of such matter. LICENSOR shall
have sole conduct of any action it elects to take in such matter
("Offensive Litigation") and either; LICENSOR shall pay all costs in
connection with such Offensive Litigation and shall be entitled to
all damages and other sums which may be paid or awarded as a result
thereof; or if within ten (10) business days after its receipt of
such notice LICENSEE agrees to share equally the costs of such
Offensive
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Litigation, the costs of any such Offensive Litigation shall be
borne, and all damages and other sums which may be paid or awarded
as a result thereof shall be shared equally by, LICENSOR and
LICENSEE as they relate to the Territory.
(c) In the event that LICENSOR fails to accept the conduct of any
Offensive Litigation within a reasonable period after notice from
LICENSEE requesting LICENSOR to do so, LICENSEE shall be entitled at
its cost and expense to take all such actions as it deems necessary
or desirable in connection with such infringement or claimed
infringement to the extent such infringement would materially and
adversely affect the value of Licensed Rights to the LICENSEE, and
LICENSEE shall be entitled to all damages and other sums which may
be recovered by or awarded to it as a result thereof.
(d) The LICENSOR shall reimburse LICENSEE its reasonable costs and
expenses incurred in complying with the provisions of section 1.8
(a) above. (Assistance for Defensive Litigation). LICENSOR shall
have no liability or obligation to LICENSEE in respect of any
Defensive Litigation or Offensive Litigation if the same results
from any breach of LICENSEE's obligations under this Agreement.
2. PAYMENT, PRICING AND TERMS
--------------------------
2.1 In consideration of licenses granted hereunder for the term and
subsequent renewals, LICENSEE shall pay LICENSOR a lump sum License
Fee in the total amount of U.S. $600,000 (Six Hundred Thousand
dollars) (the "License Fee"). The License Fee shall be paid as
follows: $200,000 (Two Hundred Thousand dollars) upon execution of
this Agreement ("First Installment"), $200,000 (Two Hundred Thousand
dollars) upon first shipment or any portion thereof of initial
Purchase Order referred to in Section 2.2; and $200,000 (Two Hundred
Thousand dollars) upon initial installation and activation of a
System or any portion thereof in the Territory. The License Fee is
non-refundable.
2.2 The purchase price payable for the hardware and software and the
components of the System are as listed in Attachment II. (Specific
Equipment Requirements to be determined.) Costs are for hardware and
resident software only, and do not
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include additional costs which may be incurred for insurance,
installation, testing, modification, or approvals of any kind from
local agencies. Payment for all products and services under this
Agreement shall be billed and shall be paid when shipped F.O.B.
Dedham, Massachusetts, Seguin, Texas, U.S.A. or such other place
determined by LICENSOR.
2.3 An initial purchase order for the following hardware will be placed
30 (thirty) days following the Effective Date by LICENSEE in such
quantity as specified below (the "Initial Purchase Order"):
(1) Vehicle Activation Computer (VAC)
(21) Vehicle Activation Transmitters (VATs)
(200) Vehicle Tracking Computers (VTCs)
(960) Vehicle Location Units (VLUs)
The Initial Purchase Order and any subsequent purchase orders are
referred to in the Agreement as "Purchase Orders".
The delivery of the VAC, VAT's and VTC's ordered under the Initial
Purchase Order shall be made within four (4) months following the
acceptance of the Initial Purchase Order. The delivery of the VLUs
shall be made within six (6) months of the acceptance of the Initial
Purchase Order. The actual quantity of VLUs ordered by Purchase
Order by LICENSEE may be increased or decreased (in no case shall it
be reduced below the minimum specified in Section 16) by twenty-five
(25%) percent by giving ninety (90) days written notice to LICENSOR,
prior to scheduled shipments. For purposes of this Agreement
"delivery date" shall mean the date on which LICENSOR delivers
Products to common carrier for shipment to LICENSEE.
Subsequent Purchase Orders for the Products shall be authorized in
writing by LICENSEE and shall specify requested delivery dates, but
in no instance should such Purchase Orders specify delivery dates
sooner than ninety (90) days of receipt of order by LICENSOR.
LICENSOR will use its best efforts to comply with requested delivery
dates. LICENSOR shall use its best efforts to fill each Purchase
Order of LICENSEE that is accepted by LICENSOR, but shall not be
liable in any respect for failure or delay in shipping any accepted
Purchase Orders that is due wholly or in part to any cause beyond
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LICENSOR's reasonable control as described in Section 2l or without
the LICENSOR's fault or negligence. LICENSOR shall not be liable for
shipping over routes or by means of transportation not specified by
LICENSEE. If LICENSEE does not specify shipping routes, LICENSOR
shall select routes and shall have no liability to LICENSEE by
reason of such selection.
2.4 All Products are priced in United States dollars and payment,
therefore, shall be made by LICENSEE in United States dollars. Upon
placement of a Purchase Order for the Products, LICENSEE shall cause
to be issued by a bank satisfactory to LICENSOR, an Irrevocable
Letter of Credit in favor of LICENSOR, valid for the greater of six
(6) months or a period covering the shipping schedule of the
Products specified in the Purchase Order. Such letter of credit
shall be in an amount equal to the full amount of the Purchase Order
and provide for partial shipments, and payable upon presentation of
an Airway Xxxx or Xxxx of Lading, LICENSOR's Commercial Invoice,
Packing List, Certificate of Origin, and any other documents
required. In the case of the initial Purchase Order the letter of
credit shall be in the amount of no less than the total of items on
Attachment V. Delivery of equipment and costs shall be determined
and made a part of this Agreement as Attachment V.
2.5 LICENSOR hereby guarantees that the prices payable by LICENSEE for
the VTCs and VLUs will not be increased for one (1) year from the
Effective Date of this Agreement. Thereafter, LICENSOR shall provide
the VTCs and VLUs at a price no less favorable than those it offers
other Licensee who purchase similar annual volumes.
2.6 All fees and other amounts payable by LICENSEE to LICENSOR under
this Agreement are exclusive of any Korean Value Added Tax or other
Korean Tax, or Duty (except as provided in Section 2.8).
2.7 All amounts payable either party to the other party under this
Agreement which are not paid when due shall bear and be payable with
interest at 1% (one percent) over the Prime Rate as reported by the
Bank of Boston, determined at such due date, and calculated from
such due date to the date of actual payment (whether after judgment
or before).
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2.8 The License Fee of Six Hundred Thousand ($600,000) Dollars, payable
by LICENSEE to LICENSOR under this Agreement (Section 2.1 for
Payment Shcedule less any applicable tax deduction.) shall be tax
deductible according to Convention between the Government of Korea
and USA to avoid double taxation and LICENSEE shall deduct or
withhold the taxes, charges and duties and pay over to the relevant
authority the full amount with the balance being paid to LICENSOR.
LICENSEE shall promptly forward to LICENSOR a certified copy of the
original official receipt issued by each appropriate Taxing
authority or other agency, evidencing payment in full. LICENSEE
shall cooperate with LICENSOR in such a manner as may be reasonably
requested by LICENSOR to obtain a credit or deduction in the United
States of such taxes so deducted or withheld.
2.9 The parties agree to cooperate in all such respects as may be
reasonably necessary or desirable in order to obtain such relief
from double taxation as may be available under the double taxation
treaty between the Governments of the Territory and the United
States.
3. ESTABLISHMENT OF SYSTEM; TECHNICAL ASSISTANCE;
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FEES AND EXPENSES; FINANCIAL INFORMATION
----------------------------------------
3.1 LICENSEE shall bear the sole responsibility for establishing the
System in the Territory in accordance with specifications provided
by LICENSOR, provided that the LICENSOR shall ensure that the System
will be fully functional and operative in accordance with the
specifications. Any and all modifications by LICENSEE to the
functionality and operation of the System beyond that defined in the
system specifications (Attachment I) must receive prior written
approval from LICENSOR. Such alteration, if approved by LICENSOR,
shall be completed at the sole expense of LICENSEE, and may, at
LICENSOR's sole discretion, affect the system warranty hereunder.
The responsibilities of the LICENSEE shall include, without
limitation, promptly and diligently upon execution of this
Agreement, to construct, install, test and make operational the
System in the Territory, to obtain all governmental and other
licenses, authority and approval necessary for the operation of the
System in the Territory, and to abide by all the provisions of this
Agreement.
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3.2 The sole obligations of LICENSOR in connection with the
establishment of the System in the Territory and the operation of
the System in the Territory during the term of this Agreement shall
be for LICENSOR: (a) to render technical operating and marketing
assistance to LICENSEE upon the reasonable request of LICENSEE on a
fee for service basis; (See Attachment III) (b) to honor LICENSEE's
claims for warranty repairs without cost of repair to LICENSEE in
prompt and efficient manner made in accordance with this Agreement;
(c) to supply Products at agreed terms and prices subject to
Purchase Orders executed by LICENSEE and LICENSOR; (d) to sell or to
license Products to no person or entity (other than the LICENSEE)
for use in the Territory; and (e) to abide by all of the provisions
of this Agreement. LICENSOR shall also provide, at LICENSEE's
reasonable request, assistance in training LICENSEE's properly
qualified personnel with respect to the installation of VLUs and
other operational aspects of LICENSEE's business on a fee for
service basis. LICENSOR may, at its option, provide such technical
assistance directly or by subcontracting with qualified third
parties who have experience with the System.
3.3 LICENSEE shall pay LICENSOR fees for all technical, operating,
administrative and marketing assistance, and services rendered by
LICENSOR to LICENSEE (including assistance described in Section 3.2
above), at LICENSEE's written request. Provided, however, that
LICENSOR shall provide LICENSEE with the first l00 man hours of
services rendered in connection with the establishment, start-up,
tests, and adjustments of the System in the Territory free of
charge. LICENSOR shall provide reasonable levels of training at its
Dedham, Massachusetts facility free-of-charge. Such fees shall be
payable in full when the services are rendered. LICENSEE shall
reimburse LICENSOR for all expenses reasonably incurred by LICENSOR
in rendering such requested services to LICENSEE, including: travel,
hotel, out-of-pocket expenses of LICENSOR, and fees of independent
contractors retained by LICENSOR. LICENSEE shall reimburse LICENSOR
for such expenses promptly upon receipt from LICENSOR of reasonable
written evidence of such expenses.
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3.4 Prior to the execution of the rights described in Section 1,
LICENSEE shall have provided to LICENSOR its most recent offering
information, quarterly and annual reports.
LICENSEE will provide LICENSOR with its annual financial statements
audited by an independent accounting firm.
4. PURCHASE OF SUPPLIES; COMPETING PRODUCTS; INSTALLATION
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4.1 Recognizing that LICENSOR has developed a unique System, and in
order to safeguard the integrity of the Trademarks and to protect
Proprietary Information of the LICENSOR and assure uniform product
quality and specification compliance and control, LICENSEE shall
purchase from LICENSOR all Products which it uses or sells, except
standard off-the-shelf items ordinarily purchased by LICENSOR from
third parties. In addition, the LICENSEE will not sell any products
which are in competition with the Products. LICENSEE agrees to offer
in connection with the sale of VLUs, only the standard warranty from
time-to-time given by LICENSOR to its retail customers, except as
LICENSOR may otherwise in writing approve.
4.2 LICENSEE assures that installation of VLUs shall be in compliance
and conformity with all procedures and standards reasonably
established by LICENSOR for the Territory and in compliance with all
applicable laws and regulations. LICENSOR shall provide LICENSEE
with written notice of any failure or non-conformity of which
LICENSOR has actual notice, and LICENSEE shall thereupon, and within
fifteen (15) days thereafter, furnish evidence to LICENSOR that any
such non-conformity has been fully rectified. LICENSEE hereby grants
LICENSOR the right, at reasonable times, from time-to-time, and with
or without notice to LICENSEE, as LICENSOR elects, to audit and
inspect installations and installation facilities to ascertain
LICENSEE's compliance with this Section. All such audits and
inspections shall be at LICENSOR's expense.
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4.3 All payments by LICENSEE to LICENSOR shall be made in U.S.
Dollars and either i) drawn on the bank of a designated lending
institution which is a member of the U.S. Federal Reserve System
and approved in writing by the LICENSOR or ii) by wire transfer
to LICENSOR'S bank.
5. RESALE PRICING
--------------
5.l LICENSEE shall have the right to establish its own price levels
for sale of all Products sold or installed in the Territory.
6. GOVERNMENTAL LICENSING
----------------------
6.1 LICENSEE acknowledges that certain permits, approvals,
authorizations and licenses necessary to operate the System in
the Territory (herein collectively called the "Required Permits")
may be required by governmental or other authorities prior to
operation of the System in the Territory and for the continued
operation thereof. LICENSEE hereby warrants to LICENSOR that it
has undertaken sole responsibility at its sole expense to procure
and prior to commencement of operations of the System in the
Territory shall have procured all such Required Permits necessary
to commence the operation of the System. LICENSEE specifically
represents and warrants that it shall make information regarding
all such Required Permits available to LICENSOR from time-to-time
within thirty (30) days after receipt of LICENSOR's written
request, therefore, and that LICENSEE shall make all payments,
submit all filings and applications, and do all things necessary
to keep all such Required Permits at all times current and in
full force and effect at its sole expense. LICENSEE further
warrants that it shall procure any and all other permits,
permissions, licenses and approvals (from all governmental and
other authorities and others), hereafter required or otherwise
necessary for the operation or use of the System in the Territory
(all of which shall be referred to as the "Required Permits"
hereunder). It is specifically agreed that LICENSOR shall have no
obligations or liability to LICENSEE for any loss, cost or damage
arising from LICENSEE's failure to procure or to maintain any
Required Permits.
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6.2 LICENSEE at all times shall comply with all limitations
regulations, rules, guidelines and requirements of any
governmental authorities ("Regulatory Body") having jurisdiction
in the Territory granting any of the Required Permits, including,
without limitation, those issued by authorities having
jurisdiction over radio transmissions licenses, permits or
approvals, or otherwise and in any way regulating or affecting
the System, or its operation or use in the Territory. LICENSOR
will provide to LICENSEE, subject to the confidentiality
provisions in Section 9 hereof, at no cost to LICENSEE, all
documents, information or data in the LICENSOR's control or
possession which LICENSEE reasonably determines to be necessary
for LICENSEE to obtain or maintain any Required Permit or to
comply with any requirement of any Regulatory Body, and LICENSOR
will provide same with all due diligence and dispatch upon
receipt of a written request for same from LICENSEE.
6.3 LICENSOR and LICENSEE, upon request of the other, will cooperate
with the other with respect to the filing and/or recording, if
applicable, of this Agreement (and any amendments thereto from
time-to-time in effect), or notice thereof, as applicable, with
all governmental authorities and other Regulatory Bodies in the
Territory necessary for the effectuation and/or enforcement
thereof. LICENSEE shall deliver an opinion of counsel that no
filing of this or any other agreement between LICENSOR and
LICENSEE are required and that such agreements are enforceable in
Korea.
6.4 LICENSEE hereby grants and assigns to LICENSOR, to the extent
permitted by law, and assigns to the LICENSOR all of its rights,
title, and interest in and to the Required Permits, which
assignment shall take effect and become operable only upon the
expiration of the term of this Agreement, or upon the earlier
termination of this Agreement pursuant to Article 14, or as
otherwise provided in this Agreement, provided that LICENSOR
shall reimburse LICENSEE all of its reasonable costs and expenses
(to be negotiated) incurred to obtain and maintain the Required
Permits.
7. INSURANCE
---------
7.l LICENSEE at its sole cost agrees to obtain and to continuously maintain
insurance in such amounts and against such risks as may be customarily
maintained by companies operating similar business in the Territory.
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8. INDEMNIFICATION
---------------
8.1 The LICENSOR agrees to indemnify and hold harmless LICENSEE and,
if applicable, each of LICENSEE's officers, directors, agents,
employees and controlling persons against any and all loss,
liability, claim, damage and expense arising solely from a defect
in the design or manufacture of Products purchased by LICENSEE
from LICENSOR except that this indemnification shall not extend
to any loss, liability, claim, damage or expense attributed
solely to those matters for which LICENSEE has indemnified
LICENSOR pursuant to section 8.2. below.
8.2 LICENSEE agrees to indemnify and hold harmless LICENSOR and each
of LICENSOR's officers, directors, agents, employees and
controlling persons against any and all loss, liability, claim,
damage and expense, including attorney's fees, arising solely in
connection with either (a) LICENSEE's establishment and operation
of the System, or (b) the sale and installation by LICENSEE of
the Products, or (c) the conduct of business by LICENSEE pursuant
to, or as contemplated by, this Agreement, except that this
indemnification shall not extend to any loss, liability, claim,
damage or expense attributable solely to those matters for which
LICENSOR has indemnified LICENSEE pursuant to Section 8.1 above.
8.3 Promptly after receipt by an indemnified party pursuant to
Section 8.1 above or Section 8.2 above of actual notice of the
commencement of any action giving rise to indemnification rights
under Section 8.1 above or Section 8.2 above, such indemnified
party shall, if a claim in respect thereof is to be made against
the indemnifying party under the applicable section, notify the
indemnifying party in writing of the commencement thereof. The
failure to so notify the indemnifying party shall relieve it from
any liability which it may have to any indemnified party under
such section, but shall not relieve it from any liability which
it may
-16-
have to any indemnified party otherwise than under such section. Upon
receipt of notice from the indemnified party as aforesaid , the
indemnifying party shall be entitled to participate in, and, to the
extent that it shall wish, to assume the defense of, the action, with
counsel selected and paid for by the indemnifying party but reasonably
satisfactory to the indemnified party.
After the indemnified party shall have received notice from the agreed
upon counsel that the defense has been assumed, the indemnifying party
shall not be responsible for any legal or other expense subsequently
incurred by such indemnified party in connection with the defense
thereof, other than reasonable costs of investigation, unless incurred
at the written request of the indemnifying party or the indemnifying
party shall not have employed counsel to have charge of the defense of
such action or in the opinion of counsel to the indemnified party, the
indemnified party shall have reasonably concluded that there may be
defenses available to it which are different from or additional to
those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of
such action on behalf of the indemnified party) in any of which events
such legal or other expenses shall be borne by the indemnifying party.
In no event shall the indemnifying party be liable for the fees and
expenses of more than one counsel for all indemnified parties, in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
obligations or circumstances, unless in the opinion of counsel to the
indemnified party, the indemnified party shall have reasonably
concluded and advised by indemnifying party that there may be defenses
available to it which are different from or additional to those
available to other indemnified parties, in which case the indemnifying
party shall be responsible for the fees and expenses of such additional
counsel as is reasonably required. The indemnifying party shall not be
liable under the indemnity provisions set forth above for any amount
paid in settlement of any claim unless such indemnifying party
consented in writing to any such settlement.
-17-
9. CONFIDENTIALITY
---------------
9.1 LICENSEE agrees to maintain secret and confidential all Confidential
Information and Proprietary Information of LICENSOR (all of which are
expressly agreed by the parties to constitute the know-how disclosed
or to be disclosed by LICENSOR to LICENSEE or obtained by LICENSEE
from LICENSOR pursuant to this Agreement) and all other information
that LICENSOR designates as confidential and discloses to LICENSEE
pursuant to this Agreement, to respect LICENSOR's proprietary rights
in the Confidential Information, to use the Confidential Information
exclusively for the purposes of the exercise of the Licensed Rights
and the installation, use, user, servicing and operation of the System
in the Territory in accordance with this Agreement, and to disclose
the Confidential Information only to those persons to whom and to the
extent such disclosure is absolutely necessary for the aforesaid
purposes.
9.2 LICENSEE shall require that all of its employees, sub-contractors, and
agents, who will have access to any of the Confidential Information
shall be made aware of the confidentiality thereof. LICENSEE shall
further procure that all of its employees and all of such sub-
contractors shall enter into a non-disclosure agreement substantially
in the form set forth in Attachment IV.
10. WARRANTY
--------
10.l LICENSOR shall provide LICENSEE with Quality Assurance Certificate for
the Products and Inspection Standard for the Products. LICENSOR
warrants to LICENSEE that the Products when purchased from LICENSOR,
under normal use and service, will be free from defect in materials
and workmanship. This warranty shall be in effect for a period of the
greater of (i) l (one) year from the delivery date of VLUs, VACs, VATs
and VTCs to LICENSEE or (ii) the period of the same warranty LICENSOR
receives from its manufacturers from time-to-time. LICENSOR's
liability for honoring the warranty claims is subject to LICENSEE
making claims for defective Products within the applicable Warranty
Period, and any claims not made within the Warranty Period shall be
conclusively deemed waived and released.
-18-
10.2 During the Warranty Period for respective Products, LICENSOR shall, at
its option, replace or repair, at any authorized repair facility in
the Territory designated by LICENSOR, any Products which LICENSOR
determines to be defective. In the event that LICENSOR does not hold a
sufficient number of stock of VLUs in the Far East for replacement and
does not have an authorized repair facility in the Territory to meet
the warranty claims, the LICENSOR shall deliver to LICENSEE without
any cost to LICENSEE with each shipment of VLUs in accordance with the
Purchase Order an additional quantity of VLUs equal to one percent
(l%) of the quantity so ordered by LICENSEE (the "Warranty Replacement
Stock"). LICENSEE shall maintain the Warranty Replacement Stock in its
warehouse and shall use them for replacement of the defective units
and make a monthly report to LICENSOR on the replacement occurring
during each calendar month and remaining balance, along with number of
defective units returned.
10.3 The foregoing warranty does not apply to any Products which have been
damaged as a result of force majeure, accident, shipping and handling,
improper power supply, misuse, abuse, improper storage, improper
maintenance, improper installation, improper operation, unauthorized
modification, or which has been installed, serviced, modified or
repaired by anyone other than a person designated in writing by the
LICENSOR, as an authorized service representative.
10.4 EXCEPT AS EXPRESSLY SET FORTH ABOVE, NO OTHER WARRANTIES ARE EXPRESSED
OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND THE LICENSOR
EXPRESSLY DISCLAIMS ALL WARRANTIES NOT STATED HEREIN. THE LICENSOR'S
SOLE OBLIGATION FOR VALID WARRANTY CLAIMS AND LICENSEE'S SOLE REMEDY
ON ACCOUNT OF WARRANTY CLAIMS SHALL BE FOR REPAIR OR REPLACEMENT AS
PROVIDED ABOVE. UNDER NO CIRCUMSTANCES WILL THE LICENSOR BE LIABLE TO
THE LICENSEE OR ANY OTHER PERSON FOR ANY DAMAGES OF ANY KIND
WHATSOEVER, INCLUDING WITHOUT LIMITATION ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
11. TERRITORY
---------
11.l This Agreement shall apply to the Territory with no rights for any
other territory or area outside of the Territory.
-19-
12. PROMOTION AND ADVERTISING
-------------------------
12.1 LICENSEE agrees that its retail sales activity shall be operated under
the name CARSEARCH by LoJack and that all signs and advertising shall
prominently disclose that it is a LICENSEE for the Products. In
addition, the LICENSEE hereby reserves the right to use any other
trademarks, trade names, brand names, logos, and other designation for
the Products for sale and marketing of the Products and use of the
System in the Territory. In such event, LICENSEE shall notify LICENSOR
in writing of his intent to exercise his right under this section.
12.2 LICENSEE agrees that it shall be solely responsible for sales
promotions and advertising of Products in the Territory, and that no
portion of the cost thereof shall be borne by LICENSOR. LICENSOR
reserves the right to review and approve all promotional material and
literature used by LICENSEE in the sale of the Products.
12.3 LICENSEE agrees that it shall be solely responsible at its expense for
the translation of LICENSOR'S technical and other documentation. Upon
the expiration or earlier termination of this Agreement, LICENSEE
agrees to promptly (within thirty (30) business days) deliver to
LICENSOR literature and documentation of every kind relating to the
System and/or any components thereof, and all translations, and all
promotional materials, in its possession or within its control, in the
manner directed by LICENSOR.
13. TRANSFER
--------
13.l This Agreement shall be binding upon and enure to the benefit of the
parties and their respective legal successors and permitted assigns.
LICENSOR shall have the right to assign or otherwise transfer its
rights and obligations under this Agreement to any subsidiary or to
any other person, persons, partnership, association, or corporation
provided that:-
13.l(a) each such transferee agrees in writing to assume all rights of and
obligations undertaken by LICENSOR herein;
13.l(b) LICENSEE receives an assignment and assumption agreement executed by
LICENSOR and each such transferee to that effect;
-20-
13.l(c) each transferee has the financial capacity and technical expertise
necessary to discharge the obligations of LICENSOR under this
Agreement; and
13.l(d) upon such assignment and assumption LICENSOR shall thereafter, have no
further rights or obligations hereunder, without prejudice, however,
to the accrued rights of LICENSOR to such date.
13.2 LICENSEE shall not assign, sell, transfer, sublease, license, convey,
give away, transfer or part with possession of the whole or any part
of the Licensed Rights or its other rights and/or obligations under
this Agreement.
13.3 LICENSEE shall not, without LICENSOR'S prior written consent (such
consent not to be unreasonably withheld or delayed) pledge, mortgage,
charge or otherwise encumber all or any part of its other rights and
obligations under this Agreement, except that LICENSEE may grant a
security interest for bank obligations in a maximum amount of $l
million USD.
14. TERMINATION
-----------
14.1 LICENSEE shall have the right to terminate this Agreement with or
without cause, upon the giving of sixty (60) days' written notice to
LICENSOR.
14.2 The following occurrences shall be events of defaults entitling
LICENSOR, at its option, to terminate this Agreement immediately upon
the giving of written notice by LICENSOR:
(a) If LICENSEE shall fail to make payment of any sum due from
LICENSEE to LICENSOR within twenty (20) days following the receipt of
written notice by LICENSOR stating with particularity the amount and
nature of any such unpaid amount or fails to maintain performance
standards as outlined in Section l6;
(b) if LICENSEE shall fail to comply with, observe or perform any
other covenant or agreement set forth in this Agreement, other than
those relating to the payment of monies from LICENSEE to LICENSOR or
maintenance of performance standards as outlined in Section 16, within
thirty (30) days following the receipt of written notice by LICENSOR
stating with particularity the default claimed, provided that the
LICENSEE shall not be in default if such default is
-21-
cured within such thirty (30) day period, or, with respect to breaches
that are not curable within such thirty (30) day period, shall have
commenced to cure such default and, thereafter, shall have prosecuted
to completion the cure of the same with due diligence, provided,
however, a default shall occur in all events if any such cure is not
effectuated, notwithstanding LICENSEE's due diligence, within sixty
(60) days after the giving of LICENSOR's default notice;
(c) if a receiver, liquidator or trustee of LICENSEE shall be
appointed for LICENSEE by court order, or if judicial or other
proceedings are initiated against LICENSEE for the protection of
creditors or if any other action is taken by order of court or other
governmental authority wresting control of LICENSEE or its assets, or
if a petition to reorganize or its equivalent shall be filed against
either party by a third party creditor under any bankruptcy,
reorganization or insolvency law, and shall not be dismissed within
thirty (30) days, or if LICENSEE shall file a petition in voluntary
liquidation or make an assignment for the benefit of creditors or its
equivalent under local law, any of the foregoing shall be default
entitling LICENSOR to, thereupon or thereafter, at any time, terminate
this Agreement.
15. RIGHTS AFTER TERMINATION
------------------------
15.1 Upon the termination of this Agreement, each party shall continue to
observe its respective obligations which shall survive the termination
of the Agreement, including the obligations in Section 1.5; LICENSEE
shall continue to observe its obligations with respect to Products
owned or possessed by LICENSEE; and LICENSOR shall continue to observe
the obligation set forth in section 15.2.
15.2 Except in cases where LICENSEE terminates this Agreement without
cause, in the event that following the termination of this Agreement
LICENSOR either (a) permits Products to be sold or distributed in the
Territory by a party other than LICENSEE, or (b) permits a party other
than LICENSEE to provide service in the Territory with respect to any
Products distributed, sold, or sublicensed by LICENSEE, then in either
event the LICENSOR or its designee (the "Purchaser") may purchase
inventory and such other assets, in good and marketable condition, as
agreed by both parties which are part of or relate to the System
within the Territory, including, items such as:
-22-
VTCs, the VACs, VATs, VLUs (the "Designated Assets"). The price which
purchaser shall pay for such Assets shall be by mutual agreement
between the LICENSOR and LICENSEE. The closing of the sale shall occur
in Boston, Massachusetts. At such closing, the Purchaser shall pay in
cash to LICENSEE the price set forth above for all of the Designated
Assets and LICENSEE shall execute and deliver such agreements
(including without limitation an Asset Purchase Agreement containing
such reasonable representations and warranties and other terms and
conditions as the Purchaser may require), instruments and other
documents as are necessary to transfer to the Purchaser the Designated
Assets which the Purchaser is acquiring, free and clear of all liens,
encumbrances and restrictions (unless otherwise agreed to by the
Purchaser).
15.3 Immediately upon the expiration or earlier termination of this
Agreement, LICENSEE shall cease and forever abstain from using the
Trademarks and to deliver to LICENSOR all documents, instructions,
display items, and the like bearing any of the Trademarks. To the
extent that such items were originally purchased from LICENSOR, are in
original packaging and can be used by LICENSOR, upon any such
termination LICENSOR may buy from and pay LICENSEE a price for such
items, and the price shall be mutually agreeable between the LICENSOR
and LICENSEE.
15.4 To the extent permitted under the laws of the Territory immediately
upon the expiration or earlier termination of this Agreement, LICENSEE
shall assign to LICENSOR, free and clear of all liens, encumbrances,
and restrictions, permits to operate the System by any governmental
authority or other regulatory bodies.
16. PERFORMANCE STANDARDS
---------------------
16.1 Within four (4) months after the Effective Date of this Agreement, all
approvals required by governmental authority or other regulatory
bodies within the Territory for the installations and operations of
the System and all other aspects of the System within the Territory
shall have been obtained.
16.2 Within eight (8) months after the Effective Date of this Agreement,
the System shall be established and ready for full operation within
the Territory.
-23-
16.3 For each calendar quarter commencing twelve (12) months after the
initial receipt of VLUs under the Initial Purchase Order (as described
in Section 2.3) LICENSEE shall purchase from the LICENSOR a minimum of
Nine hundred sixty (960) VLUs, plus an annual increase of 3% (three
percent) over the quantity in Section 16.3 calculated on a quarterly
basis thereafter during the term of this Agreement.
16.4 In addition to LICENSOR'S rights of termination as described in
Section l5, in the event that LICENSEE is not in compliance with any
of the terms or Performance Conditions of this Agreement, the LICENSOR
shall have the right, at LICENSEE'S expense, to visit LICENSEE's
operation in order to review and inspect such operations with five (5)
day written notice.
16.5 LICENSOR hereby agrees to consider the feasibility of the local
production by LICENSEE of such products to be sold in the territory
and to cooperate with LICENSEE to achieve such localization of the
Products. Such agreement for localized production shall be on terms
and conditions acceptable to LICENSOR in its absolute and sole
discretion.
17. DISPUTE RESOLUTION
------------------
17.l The parties agree that all controversies and disputes arising under
this Agreement or in connection with the transactions hereunder shall
be determined by arbitration conducted in accordance with the rules
for commercial disputes of the American Arbitration Association
provided that the place of such arbitration shall be in Boston,
Massachusetts, where complainant is LICENSOR and in Los Angeles,
California where complainant is LICENSEE. All matters submitted to
arbitration shall be binding upon the parties and fully enforceable.
18. GOVERNING LAW
-------------
18.1 This Agreement shall be deemed made in the Commonwealth of
Massachusetts and all rights and obligations of the parties hereunder
shall be governed as to validity, construction and in all other
respects by the Laws of the United States and the Commonwealth of
Massachusetts. LICENSOR and LICENSEE agree to submit to the exclusive
jurisdiction of the Courts of the Commonwealth of Massachusetts and
the United States.
-24-
19. NOTICE
------
19.l All notices hereunder shall be in writing and shall be deemed to be
given and effective upon delivery by a recognized international
delivery service such as Federal Express or DHL, delivery charges
prepaid or facsimile, and addressed to the parties at their respective
addresses set forth above, or at such other addresses as may be
designated from time-to-time by a party by the giving of notice
thereof in the manner herein provided for the giving of notices.
20. GENERAL
-------
20.1 The provisions of this Agreement may be varied or amended by mutual
consent of the parties but no such variation or amendment shall be
effective unless made in writing and signed by LICENSOR and LICENSEE.
20.2 This Agreement contains the whole agreement between the parties with
respect to the subject matter hereof and supersedes all previous
agreements and understandings between the parties, whether written or
oral, with respect to the subject matter hereof.
20.3 If any provision of this Agreement shall be found by any court or
administrative body of competent jurisdiction to be invalid or
unenforceable the invalidity or unenforceability of such provision
shall not affect the other provisions of this Agreement and all
provisions not affected by such invalidity or unenforceability shall
remain in full force and effect. The parties hereby agree to attempt
to substitute for any invalid or unenforceable provision a valid or
enforceable provision which achieves to the greatest extent possible
the economic, legal and commercial objectives of the invalid or
unenforceable provision.
20.4 Each party to this Agreement shall execute and deliver such other
documents and do such other acts and things as may be necessary or
desirable to carry out the terms provisions and purpose of this
Agreement.
-25-
20.5 The failure to enforce or to require the performance at any time of
any of the provisions of this Agreement shall in no way be construed
to be a waiver of such provisions and shall not affect the right of
any party thereafter to enforce and to require performance of each and
every provision in accordance with the terms of this Agreement.
20.6 The headings of the clauses of this Agreement are used for convenience
only and shall not affect the meaning or interpretation of the
contents of this Agreement.
20.7 The relationship between LICENSOR and LICENSEE is that of independent
contractors, and that LICENSEE is not authorized to undertake any
obligation or commitment on behalf of LICENSOR, including any warranty
given by LICENSOR under this Agreement, and that such purported action
by LICENSEE shall be of no effect.
21. FORCE MAJEURE
-------------
Neither party shall be liable or deemed to be in default for delay or
failure in performance under this Agreement or interruption of service
resulting directly or indirectly from acts of God, civil or military
authority, acts of public enemy, war, riots, civil disturbances,
insurrections, accidents, fire, explosions, earthquakes, floods, the
elements, strikes, labor disputes or other causes beyond reasonable control
of such party; and the time for performance so delayed shall be deemed
extended for the period of such delay.
22. SIGNATURES
----------
This Agreement may be executed in one or more counterparts having the
signatures of the parties and each such counterpart shall, for all
purposes, be deemed an original, but all such counterparts shall together
constitute but one and the same instrument.
LOJACK INTERNATIONAL CORPORATION Sl Corporation
By: /s/ C. Xxxxxxx Xxxxx By: /s/ Jeong Ok Park
------------------------------- -----------------------------
C. Xxxxxxx Xxxxx, President Jeong Ok Park, President
LOJACK CORPORATION
By: /s/ C. Xxxxxxx Xxxxx
--------------------------
C. Xxxxxxx Xxxxx, Chairman
Date
---------------------------
-26-
ATTACHMENT I
1 INTRODUCTION
--------------
This document specifies functional requirements of the CarSearch System, a
stand-alone system for activating and deactivating CarSearch Vehicle Locations
Units (VLUs).
The following items are part of the CarSearch System and are defined for the
reader to understand the meaning of this document.
CarSearch Vehicle Location Unit (VLU):
The transponder sold to and installed into subscriber vehicles.
Vehicle Tracking Computer (VTC):
The instrument used to track active VLUs in stolen vehicles.
Vehicle Activation Computer (VAC):
The command station to control transponders.
Vehicle Activation Transmitter (VAT):
The broadcast unit to transmit ACs, and DCs.
Activation Code (AC):
The unique number used to activate a specific VLU.
Reply Code (RC):
The unique number used to track an active VLU with a VTC.
Deactivation Code (DC):
The unique number used to deactivate a recovered VLU.
All issues and inquiries regarding this Attachment 1 should be directed to
Xxxxxxx X. Xxxxxx, LoJack Corporation, 000 Xxx Xx., Xxxxxx, XX 00000. Telephone
(000) 000-0000.
2 SYSTEM REQUIREMENTS
---------------------
The following requirements pertain to the CarSearch System as a whole:
2.1 Compatibility with existing equipment/services
----------------------------------------------
The CarSearch System must be able to use and interface with if appropriate, the
following existing equipment/services.
. The Public Switched Telephone Network (PSTN)
. Existing radio communications equipment on site.
. An operating frequency between 165-174 MHz, inclusive, for all
components.
. Existing computer equipment on site.
2.2 General system description
--------------------------
The CarSearch System consists of one central computer (VAC) available for human
interface, and one to eight remote devices (VAT) each of which is located at a
radio transmitter site. The VAC computer communicates with each VAT over a
switched telephone line via 1200 baud Xxxxx-compatible modems. No other means
-- -----
of communication is provided. In addition to the VAC and VAT, Vehicle Location
Units are installed into customer vehicles or which are activated by the
transmission of the appropriate activation code.
2.3 Principal system function
-------------------------
The principal function of the system is to conveniently support the following:
A user informs a central computer via a local user interface that an VLU with a
specified activation and reply code is to be activated, or deactivated. The
central computer then informs the set of remote devices, each of which transmits
via radio a corresponding control signal(s) via its Mod/PTT connection.
2.4 Limitations
-----------
Following are explicit limitations indicating what the system is not expected to
---
do.
2.4.1 Police Involvement
------------------
The CarSearch System has no involvement of any sort with law enforcement
computer systems, or radio facilities.
This means that CarSearch does not receive reports on stolen vehicles as a
normal consequence of the theft being reported to police. Rather, the owner of
a stolen VLU equipped vehicle must take steps to report the theft to the
CarSearch Operation Center.
This does not in any way preclude the participation of police vehicles which may
have VTC to track and recover stolen vehicles. Police so equipped would need to
communicate directly with the CarSearch Operation Center to query reply codes
and deactivated recovered VLU equipped vehicles.
2.4.2 No database maintained
----------------------
CarSearch System will not maintain any database of CARSEARCH equipped vehicles,
or of CarSearch Units which have been activated. It is instead oriented
strictly toward individual transactions possibly involving a single CarSearch
Unit; upon completion of any transaction, it will log that transaction to its
printer for reference by the user.
The only permanent or long-term data CarSearch System will maintain is system
configuration information, such as the phone numbers of its various remote
devices. (See section 3.4) A customer database is to be provided by the user in
the format he selects.
2.4.3 No security, encryption, authentication
---------------------------------------
CarSearch System will make no effort to encrypt or otherwise secure from
discovery the CarSearch "secret numbers" or other data it deals with.
2.4.4 No system diagnostics
---------------------
CarSearch Systems will not diagnose or report any system problems, other than
reporting success or failure of phone calls made to remote devices. (See
section 3.2.4.6)
2.4.5 No automatic broadcasts
-----------------------
When the central computer notifies a remote device or the need for broadcasting
some signal or test tone, the remote device will (promptly) perform the required
broadcast once; no repeats will occur other than by getting the central computer
to make phone calls for another specific request, as a result of specific
operator action.
3 SECTOR ACTIVATION COMPUTER REQUIREMENTS
-----------------------------------------
Following are requirements relating to the system for CarSearch System:
3.1 Hardware platform
-----------------
The central computer will be an IBM AT-compatible computer with at least 1 Mb of
RAM and a standard BIOS. The system will contain the following peripherals:
. a keyboard
. a VGA or compatible color video monitor
. a permanent storage device such as a hard disk, at least 2 megabytes
of capacity
. a standard floppy disk drive, for system loading & debugging
. a COM1 and a COM2 device
. a Xxxxx 1200-baud modem or compatible
. an LPTI (parallel) port with attached printer.
The computer and its peripherals will be dedicated to use by CarSearch System;
use for any other systems is not supported.
3.2 User Interface
--------------
The user interface will allow the user repeatedly to specify one of 5
transactions: Set Time, Update Phone List, Activate, Deactivate, and Test Tone.
The interface will be presented in English. Details:
3.2.1 Main Menu
---------
The user interface will display a (titled) main menu, offering the choice of the
5 transactions noted, as well as possible termination of the program, and
including display of current time and date (at least to the minute) as known to
the computer. User selection of an action will be by some convenience means.
While the computer is awaiting user selection, it will update the displayed time
and date appropriately. When a valid user selection has been made, the
appropriate screen will be presented for the selected transaction, as described
in following sections.
During interaction for any user selection, time and date need be displayed only
as explicitly noted. When the interaction for any user selection other than
termination of the program is completed, the computer will return to displaying
the main menu.
3.2.2 Set Time
--------
If Set time is chosen, the user interface will accept a new date and time from
the user, to be used henceforth by the computer, or course updated by the
passage of time.
Changes of time and date, showing old and new values, will be logged (see
section 3.5).
3.2.3 Update Phone List
-----------------
If update Phone List is chosen, the user information will display the current
list of phone numbers used by the central computer, and allow the user to add,
remove, or modify entries in the list.
The displayed list will always contain 8 items, some of which may be blank. To
add an entry, user fills in data for some currently blank entry. To remove an
--- ------
entry, user modifies it to all blanks.
The user may specify any printable characters in phone list entries. The user
interface will do no checking for reasonableness of the entries.
Modifications to the phone list, with old and new entry, will be logged (see
section 3.5).
The phone list will be maintained in a permanent file (section 3.4) so that
when the program is stopped and restarted, the last version of the phone list
will be available and used.
3.2.4 Activate, Deactivate, Test Tone
-------------------------------
To Activate, Deactivate, Test Tone choices all have many aspects in common, so
are treated together in the following subsections:
3.4.2.1 Activate chosen
---------------
If Activate is chosen, the user interface will accept a seven-character
activation code and a five character reply code. These codes will be validated
for correct syntax, and the user reprompted if either is invalid. The user may
then choose whether the transaction is to be sent to all the VATs or just one
VAT.
3.2.4.2 Deactivate chosen
-----------------
If Deactivate is chosen, the user interface will accept a seven-character
deactivation code. This code will be validated for correct syntax, and the user
reprompted if invalid. The user may then choose, whether the transaction is to
be sent to all the VATs or just one VAT.
3.2.4.4 Calling to remote devices
-------------------------
Following full valid specification of a transaction (Activate or Deactivate, or
Test Tone) the central computer will then attempt to notify the selected VATs;
see section 3.3. The user interface is not required to accept further
transactions, until handling of this transaction is completed or aborted.
3.2.4.5 Start of each call announced
----------------------------
At the start of each phone call by the VAC, the user interfaces will display the
phone number being called and advise the user to wait while the call is made.
No information about progress of the call need to be presented until the call is
completed.
3.2.4.6 Results announced and logged
----------------------------
Following each individual phone call (successful or not), the user interface
will display the result of the call, specifying the phone number used.
Each phone call, with phone number and result and intended transaction, will be
logged (See section 3.5).
3.2.4.7 User may abort phone call sequence
----------------------------------
After the VAC gives the results of the call, if there are any more to be made,
the VAC will check whether user has pressed any keys, and if so will allow user
to specify continuation, pause, or abort of work on the transaction.
3.3 VAT notification
----------------
When the user has specified an Activate or Deactivate or Test Tone transaction,
the VAC will attempt to notify each selected VAT, using the telephone number
currently in the phone list file (section 3.4) information (including
transactions) transferred to VAT will be done error-free.
The VAC will call each selected phone number in turn; if it succeeds in
connecting to it, it will deliver the transaction. If it does not succeed in a
reasonable time, it will consider the call failed.
Following a round of attempted phone calls to each selected SAT, if there is at
least one to which the call was not successful, the VAC will retry phone calls
to the VATs it has not yet succeeded with, in sequence, up to a specified total
number of tries. This number, NumberCallTries, will be in range 1...99 and will
be defined by either (i) an MSDOS environment variable, or (ii) a statement in a
defined configuration file.
Following any of the phone calls made, the remainder may be aborted (or paused)
by user selection (section 3.2.4.7).
3.4 Phone list file
---------------
The VAC will maintain a permanent phone list, giving one entry for each of the
(8) allowed VATs. Each entry will provide space for at least (30) characters,
and may be edited at will be the user (Section 3.2.3).
Blank entries will be interpreted to mean there is no corresponding SAT.
Non-blank entries will be interpreted as telephone numbers (including
Xxxxx-compatible command characters, such as a comma for short delay), to be
used when attempting to call the VAT.
The permanent phone list will be retrieved for use when the main program starts.
It will properly updated whenever user completes a modification to the list.
3.5 Logging
-------
The video screen will inform the user of the disposition of each transaction,
and in the case of Activate and Deactivate and Test Tone transactions, whether
each VAT was notified. Failed transactions will be highlighted or otherwise made
especially noticeable.
In addition, the disposition of each transaction and each notification attempt
(to a VAT) will be logged to the printer. See details in sections 3.2.2, 3.2.3,
3.2.4. Each item logged to the printer will include the current time and date.
On any given occasion when the VAC attempts to log something to the printer, if
the printer is not at that time operational, then:
the program will continue normally, except that there may be a short delay
(maximum 15 seconds) beyond the normal execution time;
the item being logged will be discarded, i.e., there will be no attempt to
save it for later printing;
the next time an item is to be logged to the printer, the same attempt to
log will be made.
4 VAT REQUIREMENTS
----------------
Following are requirements relating to each VAT for CarSearch:
4.1 Hardware Platform
-----------------
The remote computer will be an IBM AT-Compatible computer with at least 640 Kb
or RAM and a standard BIOS. The system will contain at least the following
peripherals:
. an MDA or compatible video board (technically, only the video RAM is
required).
. a non-mechanical permanent storage device such as a ROMdisk, with at
least 1 megabyte or capacity.
. a standard floppy disk, for system loading and debugging.
. a COM1 and COM2 device.
. a Xxxxx 1200-baud modem or compatible.
. a standard CarSearch VAS "silver box" (Mod/PTT controller).
. an appropriate radio transmitter, of up to 50 xxxxx Xx power.
The following peripherals are optional; the software is not required to support
them:
. a monitor
. a keyboard
The computer and its peripherals will be dedicated to use by CarSearch; use for
any other system is not supported. The system user is required to provide
appropriate power and environmental conditioning for the remote device
------------
equipment. This must be done as a part of site selection.
4.2 User Interface
--------------
Because a monitor and keyboard are optional, no user interface is required on
the VAT. The software may write some reasonable logging/diagnostic information
to the video RAM, which may be viewed if a monitor is attached to the remote
device.
4.3 Call processing
---------------
The VAT must be capable of receiving phone calls from the VAC via its modem.
Once a connection has been made, it will process Activate and Deactivate and
Test Tone transactions sent to it. The VAT is not required to accept more than
-----------------------------------
one transaction per call.
-------------------------
Transactions will be received error-free; i.e, the chance of phoneline bit
errors converting a valid transaction into a different but valid transaction
will, for practical purposes, be zero.
4.4 Transaction processing
----------------------
The various transactions will be processed as follows:
4.4.1 Activate transactions
---------------------
When a VAT receives an Activate transaction, it will send a single Activate
control signal (using the specified activation code), a single Speed-up control
signal (using the specified reply code), and a single Antijam Disable control
signal to its Mod/PTT, in that order. The Activate and Speed-up signals must be
contained in separate message bursts, in the order specified; the Antijam
Disable signal may be contained in either burst (as the last signal). These
signals will not be repeated.
4.4.2 Deactivate transaction
----------------------
When a VAT receives a Deactivate transaction, it will construct a message burst
containing a single Deactivate control signal (using the specified activation
code), and single Antijam Disable signal, in that order, and send the burst to
its Mod/PTT. These signals will not be repeated.
4.4.3 Test Tone transaction
---------------------
When a remote device receives a Test Tone transaction, it will tell its Mod/PTT
to generate the specified test tone. This test time will not be repeated.
4.4.4 Message burst timing
--------------------
The remote device will make no effort to broadcast a control signal in a
specific "time slot". In general control signals will be broadcast as soon as
practical after the VAT has determined and need therefore, but not longer than
______ after receipt of the signal.
4.4.5 Optional logging
----------------
Because of video screen is optional, no logging is required of the VAT. The
remote device may log time-stamped transactions to the video RAM, which may be
viewed if a monitor is attached to the remote device.
Attachment II page 1
COMPONENT PRICING FOR
CARSEARCH
STOLEN VEHICLE RECOVERY NETWORK
Vehicle Activation Computer (VAC) $52,242.00
Vehicle Activation Transmitter (VAT)
First Three $43,893.00
Additional $37,500.00
Vehicle Tracking Computer (VTC)
First Thirty $3,845.00
Additional $2,583.00
Vehicle Location Unit (VLU) $140.00*
Vehicle Alarm (Alert with Prevent)
AL-514 with SK Relay & Socket $48.75**
Door Lock/Unlock Relays and Socket $10.50**
LoJack Interface Module (IM) $25.00**
Backup Battery (BB) $12.50*
* 960 piece minimum
** 500 piece minimum September 3, 1996
Attachment II Page 2
[LETTERHEAD OF LOJACK APPEARS HERE]
================================================================================
CARSEARCH VEHICLE LOCATION UNIT (VLU)
QUANTITY DISCOUNT PRICE SCHEDULE
Quantity Price (USD)
-------- -----------
960 - 9,600 $ 140.00
10,560 - 15,360 130.00
16,320 - 37,440 122.00
38,400 - 52,800 115.00
53,760 + 109.00
All purchases are subject to the following conditions:
------------------------------------------------------
1. All orders must be in quantity increments of 960 which is our
standard manufacturing lot size.
2. Prices are FOB: Seguin, Texas; Denver, Colorado; and/or Dedham,
Massachusetts.
3. Price does not include: freight, duties, insurance, batteries, or any
externally conditioned factors.
4. Price is based on volume of units shipped in a twelve (12) month
-------
period to a single CarSearch territory, progressing from the date of
first order.
5. Price is for a VLU model that is certified for use in the United
States by the Federal Communication Commission (FCC).
6. Prices do not include any design changes or additional testing
required for certification or use in any countries other than the
United States.
7. Prices are subject to change without notice.
April 22, 1996
Attachment II Page 3
COMPONENT PRICING FOR
CARSEARCH
STOLEN VEHICLE RECOVERY NETWORK
SUPPORT ITEMS
---------------------
VAC/VAT Spare Parts Kit $8,000.00
VLU and VTC Installation Tool Kit $1,000.00
Installation Supplies for 1000 VLU & Alarms $3,000.00
VLU Replacement Antennas (40 min.) $12.00
Installation and Test Unit
First two $1,800.00
Additional $1,200.00
Tracker Training Units (Kit)
First two $650.00
Additional $500.00
April 16, 1996
Attachment III
LoJack Corporation
Cost Schedule
--------------------------------------------------------------------------------
Labor:
-----
Chief Executive $150.00/hour (minimum)
Executive Staffing 125.00/hour
Project Manager/Engineering Staff 80.00/hour
Technician/Installer 45.00/hour
Clerical or Support 35.00/hour
Materials and Non-Labor Expenditures: 1.25 X LoJack Cost
------------------------------------
Travel Expenditures: 1.15 X LoJack Cost
-------------------
Subcontract Labor: 1.25 X LoJack Cost
-----------------
X. X. Xxxxxx
Attachment IV
DISCLOSURE AGREEMENT
AGREEMENT made this day of 1996, by and between LoJack International
Corporation ("LIC"), a Delaware corporation, with its principal office at 000
Xxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 U.S.A., LoJack Corporation ("LoJack"), a
corporation organized under the laws of the Commonwealth of Massachusetts, with
its principal office at 000 Xxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 XXX and S1
Corporation, a Korean corporation having a place of business at 10th floor, East
Wing Xxx-xxxx Xxxx., 0-00, Xxxxxx-Xxxx, Xxxxxxx-Xx, Xxxxx, Xxxxx, referred to
(hereinafter "Disclosee").
WHEREAS, LoJack has developed and is the owner of certain patented,
confidential know-how relating to Stolen Vehicle Recovery System and Technology
and other information considered confidential or trade secret (the "Proprietary
Information"). LoJack has licensed the use of the Proprietary Information to
LIC; and
WHEREAS, LoJack has developed certain products and methods from the
Proprietary Information and it is anticipated that additional products, methods
and/or improvements will be developed from such Proprietary Information (such
developed products, additional products and improvements are herein collectively
referred to as (the "Products"); and
WHEREAS, Disclosee is desirous of the implementation and operation of a
System pursuant to a License Agreement between the parties dated ,
(the "Agreement").
NOW, THEREFORE, it is agreed as follows:
1. LIC will disclose to Disclosee Proprietary Information necessary for
Disclosee to carry out its obligations under the Agreement.
2. Disclosee will keep the Proprietary Information disclosed by LIC or LoJack
either in writing, or by physical sample, or if orally, in confidence and
will not make use of such Proprietary Information for any purpose other
than for carrying out its obligations under the Agreement pursuant to
this Secrecy Agreement. Disclosee will use substantially the same care to
maintain the confidentiality of the Proprietary Information as it uses with
respect to its own trade secrets, and, in any event, will use its best
efforts to:
Page 2
(a) restrict disclosure of the Proprietary Information so that it is
disclosed only to persons to whom disclosure is required for the
purposes contemplated hereby;
(b) advise such persons of the obligation of confidentiality with respect
to such Proprietary Information;
(c) obtain from such persons, prior to disclosure of the Proprietary
Information, confidentiality agreements with respect to the Proprietary
Information; and
(d) limit the number of copies made of any items of the Proprietary
Information which are in documentary or other tangible form to that
reasonably necessary for the purposes contemplated hereby and to place
on each copy a legend as to confidentiality, provide that such legend
has been applied to the original or original copy by LIC or LoJack.
3. Notwithstanding anything to the contrary contained herein, there shall be
no restrictions on disclosure with respect to:
(a) information or data which at the time of furnishing was in the public
domain or which after such furnishing becomes part of the public domain
other than by Disclosee's own action;
(b) information or data which at the time of furnishing hereunder was
already in Disclosee's possession and was not previously acquired, in
confidence, from LIC or LoJack;
(c) information or data independently developed by Disclosee at any time,
or lawfully acquired after the date of this Secrecy Agreement from a
third party, except through a violation of confidence by such third
party which is known to Disclosee;
(d) information or data of which LoJack expressly consents to the
disclosure; or
(e) information or data which LoJack publicly discloses.
4. Disclosee will afford to representatives of LIC or LoJack: (a) access to
any and all raw data, original records, and summary reports, created
pursuant to the purposes contemplated hereby and (b) access to LIC or
LoJack representatives during normal business hours.
Page 3
5. All notices required or permitted under this Secrecy Agreement shall be
deemed sufficiently given if in writing and mailed by registered or
certified mail addressed to the party to be notified at the address
hereinabove set forth for such party, or to such other address as such
party may hereafter request by notice given in accordance with this
paragraph.
6. Neither party shall assign its rights, or delegate its obligations, under
the Secrecy Agreement with the prior written consent of the other.
8. This Secrecy Agreement contains a complete statement of the understanding
between the parties with respect to its subject matter. It may not be
changed except by an instrument in writing signed by both parties.
9. This Secrecy Agreement shall be in all respects governed by the laws of the
Commonwealth of Massachusetts.
10. This Secrecy Agreement shall come into full force and effect when signed by
Disclosee.
IN WITNESS WHEREOF, the parties hereto have executed this Secrecy Agreement
the date and year first above written.
LoJack International Corporation LoJack Corporation
000 Xxx Xxxxxx 000 Xxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
------------------------------ --------------------------
Signature Signature
------------------------------ --------------------------
Title Title
------------------------------
Signature of Disclosee
------------------------------
Title
Attachment V
PROFORMA INVOICE
Initial Order
COMPONENT PRICING FOR CARSEARCH
(1) Vehicle Activation Computer (VAC) $ 52,242.00 USD
(21) Vehicle Activation Transmitters (VAT) 806,679.00 USD
(200) Vehicle Tracking Computers (VTC) 516,600.00 USD
(960) Vehicle Location Units (VLU) 134,400.00 USD
----------
Total $1,509,921.00 USD
F.O.B. Dedham, Massachusetts
Sequin, Texas
Denver, Colorado
