EXHIBIT 10.8
STRATEGIC BUSINESS AGREEMENT
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THIS STRATEGIC BUSINESS AGREEMENT (this "Agreement") is entered into as of
the 11th day of September, 2000 (the "Effective Date") by and between Terion,
Inc. ("Terion"), a Delaware corporation with a principle place of business at
000 Xxxxx Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxx 00000 and XTRA Lease, Inc. ("XTRA"),
a Delaware corporation with a principle place of business at 0000 Xxxx 000
Xxxxx, Xx. Xxxxx, Xxxxxxxx 00000.
RECITALS
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WHEREAS, Terion, a mobile information products and services company, owns
rights to, and manufactures an operational monitoring product which is more
particularly described on Exhibit A attached hereto (the "FleetView Unit"); and
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WHEREAS, XTRA is a leading provider of trailer leasing services and desires
to (i) purchase FleetView Units for use in the XTRA Fleet (as defined below),
(ii) market and sell FleetView Units to End Users (as defined below), (iii) be a
lessor of trailers containing the FleetView Unit or provider of lease financing
to End Users who desire to purchase the FleetView Unit from Terion, and (iv)
acquire equity in Terion; and
WHEREAS, the parties desire to enter into a strategic business relationship
to enhance the acceptance of FleetView Units.
THEREFORE, for good and valuable consideration, the parties agree as
follows:
1. DEFINITIONS.
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In this Agreement, the following terms have the meanings specified or
referred to in this Section 1 and shall be equally applicable to both the
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singular and plural forms. In this Agreement, the words "including," "include"
and "includes" shall each be deemed to be followed by the term "without
limitation." Any agreement or exhibit referred to herein shall mean such
agreement or exhibit as amended, supplemented and modified from time to time to
the extent permitted by the applicable provisions thereof and by this Agreement.
References to any statute or regulation means such statute or regulation as
amended at the time and includes any successor statute or regulation. Unless
otherwise stated, references to recitals, articles, sections, paragraphs,
schedules and exhibits shall be references to recitals, articles, sections,
paragraphs, schedules and exhibits of this Agreement.
"Communication Services" means Terion's wireless tracking and mobile
information management services that utilizes the communications network
provided by Terion.
"Dispute" means any dispute, controversy, or claim arising out of or
relating to this Agreement, including without limitation the interpretation,
performance, breach, termination or invalidity of this Agreement.
"End User" means a third party who uses the FleetView Unit and the
Communication Services in the Territory solely for its own customary internal
business purposes in accordance with a written agreement with Terion, and not
for redistribution.
"End User Communication Services Account" means an account activated by
Terion that allows an End User to use the Communication Services.
"Look and Feel" means the distinctive and particular elements of graphics,
design, organization, presentation, layout, user interface, navigation, trade
dress and stylistic convention (including the digital implementation thereof)
within the Terion Site or the Private Labeled Site and the total appearance and
impression substantially formed by the combination, coordination and interaction
of such elements.
"Losses" means, collectively, any and all claims, losses, liabilities,
damages, costs or expenses including reasonable attorneys' fees.
"Order" means a request for the sale and delivery of the FleetView Unit and
activation of the Communication Services made pursuant to Terion's Product
Purchase Form.
"Private Labeled Site" means a private labeled version of Terion's
FleetView website.
"Product Purchase Form" means the Terion FleetView Product Purchase Form
and related terms and conditions attached hereto as Exhibit B, as modified or
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amended from time to time.
"Rental User" means any customer of XTRA who rents or leases a trailer from
XTRA's Fleet and uses the FleetView Unit and the Communication Services in the
Territory.
"Software" means the object code version of (i) the software code that is
embedded in and that is required to operate the FleetView Unit, (ii) Terion's
TView software, (iii) any other software provided by Terion, (iv) any user
documentation and (v) any updates or modifications made thereto.
"Terion Indemnified Parties" means collectively, Terion, its affiliates and
their respective officers, directors, and employees.
"Xxxxxx Xxxxx" means the trademarks set forth on Exhibit C.
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"Terion Shipping Point" means Terion's Melbourne, Florida location or such
other location as determined by Terion from time to time.
"Terion's Standard Volume Pricing Schedule" means Terion's pricing schedule
as amended or updated from time to time, a current copy of which is attached
hereto as Exhibit D.
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"Territory" means the continental United States and Canada.
"Trailer Rental/Leasing Company" means an entity that receives any revenue
from the rental or leasing of semi trailers to third parties excluding revenue
received as a result of the exchange or pooling of trailers between parties who
are members of any trailer pooling or exchange group.
"XTRA" means XTRA Lease, Inc. and any and all of the XTRA Affiliated
Companies.
"XTRA Affiliated Company" means any entity controlling, controlled by or
under common control now and hereafter with XTRA. For the purposes of this
definition, "control" shall mean the possession, directly or indirectly, of a
majority of the voting power of such entity (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
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"XTRA Indemnified Parties" means collectively, XTRA, the XTRA Affiliated
Companies and their respective officers, directors, and employees.
"XTRA Marks" means the trademarks set forth on Exhibit F.
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"XTRA Net Book Value" means the original cost of each FleetView Unit
purchased by XTRA as depreciated based on a sixty (60) month straight-line zero
percent (0%) residual value depreciation method.
"XTRA's Fleet" means XTRA's fleet of semi trailers used exclusively for
leasing or rental to third parties.
2. PURCHASE OF FLEETVIEW FOR USE IN XTRA'S FLEET. Due to the unique nature of
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the strategic relationship established by this Agreement and in light of the
risk assumed by XTRA the following pricing shall apply:
(a) Purchase of the FleetView Unit. Subject to the terms and conditions of
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this Agreement, Terion agrees to sell, and XTRA agrees to purchase, a minimum of
twenty-five thousand (25,000) FleetView Units at the price set forth on Schedule
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1 for use in the XTRA Fleet. XTRA agrees to take delivery of (i) a minimum of
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ten thousand (10,000) FleetView Units by December 31, 2000 and (ii) an
additional fifteen thousand (15,000) FleetView Units within one (1) year of the
Effective Date. The FleetView Units will be shipped FOB Terion's Shipping
Point. XTRA shall be responsible for the payment of all freight charges,
insurance, custom brokers' fees, demurrage and other related charges. Terion
assumes no liability and shall not be held responsible to XTRA in connection
with any cancellation or delay in shipment of the FleetView Units for reasons
outside of Terion's control.
(b) Favored Customer for FleetView Units. During the Initial Term or any
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Renewal Term, if Terion sells FleetView Units to a third party in the Territory
(other than a Trailer Rental/Leasing Company) at a price that is lower than the
price set forth on Schedule 1 (the "Lower Price"), XTRA shall receive the
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benefit of the Lower Price on all subsequent purchases of the FleetView Units
for use in the XTRA Fleet.
(c) XTRA Discount. During the Initial Term and any Renewal Term, the price
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paid by XTRA per FleetView Unit shall be ten percent (10%) less than the price
paid by any other Trailer Rental/Leasing Company in the Territory.
(d) Rebate. During the first three years of the Initial Term only, if
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Terion sells the FleetView Unit for a price that is less than the then current
average XTRA Net Book Value, then XTRA shall receive a per FleetView Unit rebate
for all FleetView Units previously purchased by XTRA that is equal to:
(i) if the sale of the FleetView Unit is made to a Trailer
Rental/Leasing Company in the Territory, the difference between the then current
average XTRA Net Book Value and the price paid by such Trailer Rental/Leasing
Company, plus an additional rebate of ten percent (10%) of the price paid by
such third party; or
(ii) if the sale of the FleetView Unit is made to any party in the
Territory other than a Trailer Rental/Leasing Company, the difference between
the then current average XTRA Net Book Value and the price paid by such other
customer.
(e) Software License. Subject to the terms and conditions of this
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Agreement, Terion grants to XTRA a non-exclusive, non-transferable limited
license to (i) use the Software in connection with XTRA's
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use of the Communication Services in the Territory; and (ii) sublicense the
right to use the Software to Rental Users while such Rental User is renting or
leasing trailers from XTRA.
(f) Limitations. All rights not expressly granted herein are reserved by
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Terion and/or its licensors. Without limiting the generality of the preceding
sentence, XTRA shall not modify, port, translate, localize, or create derivative
works of, decompile, disassemble or otherwise reverse engineer the FleetView
Unit or the Software.
(g) Communications Services. Subject to the terms and conditions of this
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Agreement, Terion grants to XTRA the right to (i) access the Communications
Services for use with the FleetView Unit in the Territory, and (ii) sublicense
the right to access the Communication Services for use with the FleetView Unit
in the Territory to Rental User's. XTRA shall pay Terion's standard
communications charges on a per FleetView Unit basis in accordance with the
monthly rate plan set forth on Exhibit E, provided, that if Terion lowers the
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price for a monthly rate plan that is available to Terion customers, XTRA shall
be charged the lower price for such available monthly rate plan .
Notwithstanding the foregoing, Terion may sell Communication Services at a price
that is lower than the price paid by XTRA in connection with XTRA's rights to
provide lease financing to a third party, provided that Terion shall make such
Communications Services pricing available to XTRA in connection with lease
financing for that same party. Charges for Communications Services begin from
the date of activation of the FleetView Unit and shall cease when the FleetView
Unit is de-activated. Terion will invoice XTRA for all Communications Services
monthly in advance. XTRA shall obtain all appropriate telecommunications links
to permit XTRA and Rental Users to access the Communications Services. XTRA
shall not be responsible for any Communication Services charges if there is any
failure or malfunction of a FleetView Unit due to any hardware provided by
Terion or due to any other problem solely attributable to Terion and/or its
wireless service carrier, which is not corrected by Terion within thirty (30)
days after receiving notice from XTRA of such failure or malfunction.
(h) Terion's Limited FleetView Unit Warranty. Terion warrants that the
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FleetView Unit will be free from defects in material and workmanship under
normal use and service for one (1) year after delivery to XTRA. The sole
obligation of Terion and the sole remedy of XTRA under this warranty is for
Terion at its election to either repair the defect or replace the defective
FleetView Unit. Any replacement will be new. If such replacement is not
performed by Terion in a timely manner, XTRA shall have the option upon
reasonable notice to Terion to replace the defective Unit and invoice Terion for
the labor costs associated with such Unit replacements. FleetView Units that
are replaced become the property of Terion. Repaired or replaced FleetView
Units will be warranted as provided above for the balance of the original one
(1) year period. Terion shall also pay reasonable labor charges for the
installation of any replacement batteries on FleetView Units due to normal use.
(i) Terion's Limited Software Warranty. During the Initial Term and any
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Renewal Term, Terion warrants that the Software will operate in substantial
conformance with written performance-related materials provided by Terion to
XTRA under normal use and service. The sole obligation of Terion and the sole
remedy of XTRA under this warranty is for Terion to use commercially reasonable
efforts to either correct the defect or provide a suitable "bug fix" or "work
around" within thirty (30) days after notice from XTRA. XTRA shall not be
responsible for any Communication Services charges if the Software does not
operate in substantial conformance with such written performance related
materials and such problem is not corrected by Terion within thirty (30) days
after receiving notice from XTRA. Corrected Software, will be warranted as
provided above for any remaining balance of this Agreement.
(j) Required Clause. XTRA shall include the following clauses in all of
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its agreements with its customers who use the FleetView Units:
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"Lessee expressly understands and agrees that it has no contractual
relationship whatsoever with the underlying wireless service carrier and
that Lessee is not a third party beneficiary of an agreement between Terion
Inc., and the underlying wireless service carrier. In addition, Lessee
expressly understands and agrees that the underlying wireless service
carrier shall have no legal, equitable or other liability of any kind to
Lessee. In any event, regardless of the form of the action, whether for
breach of contract, warranty, negligence, strict liability in tort or
otherwise, Lessee's exclusive remedy and the total liability of the
underlying wireless service carrier arising in any way in connection with
this Agreement for any cause whatsoever including, without limitation, any
failure or disruption of service provided hereunder, is limited to payment
of damages in an amount equal to the portion of the fixed monthly charges
to Lessee for the services relating to the period of service during which
said damages occur."
"Lessee shall indemnify and hold harmless the underlying wireless service
carrier supplying services to Terion, Inc., and it officers, employees, and
agents against any and all claims, including claims for libel, slander or
any property damages, personal injury or death arising in any way directly
or indirectly in connection with this Agreement or the use, failure to use
or inability to use the access telephone number, except where the claims
result from the underlying wireless service carrier's gross negligence or
willful misconduct. This indemnity shall survive termination of this
Agreement." Lessee acknowledges and understands that it uses all
information provided via the service at Lessee's own risk. Lessee
acknowledges and understands that it will acquire no proprietary interest
in any number assigned to it for use with the service.
(k) Disclaimers.
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(i) The Communications Services are designed for high reliability,
availability, security, and performance. Terion shall provide the
Communications Services in a manner that is based on industry standard
practices. Occasionally, the Communications Services shall require scheduled
maintenance, and Terion shall use commercially reasonable efforts to perform
maintenance during times when the Communications Services are not heavily
utilized. Terion shall have no liability for down time of the Communications
Services caused by forces beyond Terion's control such as unplanned or emergency
down time, or unauthorized or fraudulent use of the Communications Services.
(ii) XTRA expressly understands and agrees that it has no contractual
relationship whatsoever with the underlying wireless service carrier and that
XTRA is not a third party beneficiary of an agreement between Terion Inc., and
the underlying carrier. In addition, XTRA expressly understand and agrees that
the underlying carrier shall have no legal, equitable or other liability of any
kind to XTRA. In any event, regardless of the form of the action, whether for
breach of contract, warranty, negligence, strict liability in tort or otherwise,
XTRA's exclusive remedy and the total liability of the underlying carrier
arising in any way in connection with this Agreement for any cause whatsoever
including any failure or disruption of service provided hereunder, is limited to
payment of damages in an amount equal to the portion of the fixed monthly
charges to XTRA for the services relating to the period of service during which
said damages occur.
XTRA shall indemnify and hold harmless the underlying wireless service
carrier supplying services to Terion, Inc., and it officers, employees, and
agents against any and all claims, including claims for libel, slander or any
property damages, personal injury or death arising in any way directly or
indirectly in connection with this Agreement or the use, failure to use or
inability to use the access telephone number, except where the claims result
from the underlying carrier's gross negligence or willful misconduct. This
indemnity shall survive termination of this Agreement. XTRA acknowledges and
understands that it uses
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all information provided via the service at XTRA's own risk. XTRA acknowledges
and understands that it will acquire no proprietary interest in any number
assigned to it for use with the service.
(l) Training and Support. Terion and XTRA shall jointly develop a "train
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the trainer" training program in the proper configuration, installation,
operation, use and service of the FleetView Units and the Communication Services
(as applicable). Such training shall be provided at Terion's facilities in
Melbourne, Florida or such other location as agreed upon by Terion and XTRA.
XTRA shall be responsible for all costs relating to such training, including,
without limitation, travel, lodging, meals and other expenses of XTRA personnel
participating in such training. Unless otherwise agreed in writing between the
parties with respect to a particular Rental User, XTRA shall be responsible for
providing all first tier support required by Rental Users who utilize the
FleetView Unit and the Communication Services; provided, however, that XTRA
shall refer End Users to Terion for technical support and system usage issues.
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(m) Maintenance Services.
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(i) On or before expiration of the FleetView Unit's warranty period,
XTRA may purchase maintenance services for the FleetView Unit ("Maintenance
Services") at specified monthly rates. Maintenance Services are not a warranty
extension, but rather a contractual sale of services. XTRA acknowledges that
Maintenance Services do not entitle XTRA to any equipment upgrades or new
features which may be introduced in the FleetView Units, and that any such
improvements may be subject to upgrade pricing.
(ii) Under Maintenance Services, Terion will either repair or replace
FleetView Units that fail other than due to misuse, abuse or accident. Any
replacement FleetView Unit will be new. FleetView Units that are replaced will
become the property of Terion. At the expiration of Maintenance Services (if
selected), the Maintenance Services will automatically renew each month until
and unless canceled by XTRA. Maintenance Services may not be available for
FleetView Units or Software that is not continuously covered beginning at the
time of warranty expiration, or for FleetView Units that have been in service
five (5) years or longer.
(n) Payment. XTRA will be invoiced for the FleetView Unit when shipped,
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the Communication Services monthly in advance and for other services, as they
are provided. All invoices are due and payable by XTRA in U.S. dollars within
thirty (30) days after the date of the invoice, and shall be subject to late
charges of 1.5% per month or the maximum rate allowable by law if not fully paid
by their due date. XTRA shall pay all sales, use and other taxes, duties or fees
resulting from Terion's provision of products and services, exclusive of taxes
based on Terion's net income.
(o) NAFTA Coverage. XTRA acknowledges that Terion has or will in the
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future have affiliates or partners in Canada and Mexico that provide, under
license from Terion, Communication Services in Canada and Mexico (collectively,
the "Partners"). XTRA agrees that each of the Partners, pursuant to a current
or future agency arrangement among Terion and the Partners, is or will become a
party to this Agreement by Terion as their agent and that XTRA is or will become
a customer of each of the Partners for the purposes of providing full NAFTA
coverage for XTRA.
(p) Reservation of Rights. Notwithstanding anything to the contrary in
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this Agreement, Terion reserves the right to sell and or lease its cab tracking
product to any third party and to sell FleetView Units and Communication
Services to Transport International Pool, Inc., or other over-the-road Trailer
Rental/Leasing Company for installation of the FleetView Units in their own
fleets or for trailer leases where the FleetView electronics package is bundled
into the trailer lease. Terion further reserves the right to sell FleetView
Units to trailer OEM's who will bundle the price of the FleetView product into
their trailer financing package and/or other third parties who use the FleetView
Units to retrofit their fleets.
(q) FleetView Unit Upgrades. XTRA shall receive free upgrades
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generally made available to End Users, at no cost, for the basic FleetView Unit
and sensor package.
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3. APPOINTMENT AS SALES AGENT
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(a) Appointment and Training of XTRA as Sales Agent. Subject to the terms
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and conditions of this Agreement, Terion hereby grants to XTRA a non-exclusive,
non-transferable limited license to sell and market the FleetView Unit and
Communication Services to End Users in the Territory in accordance with the
Standard Volume Pricing Schedule. All rights not specifically granted to XTRA
herein are reserved by Terion. Terion and XTRA shall jointly develop a "train
the trainer" training program in the proper sales and marketing, operation, and
use of the FleetView Units and the Communication Services (as applicable). Such
training shall be provided at Terion's facilities in Melbourne, Florida or such
other location as agreed upon by Terion and XTRA. XTRA shall be responsible for
all costs relating to such training, including, without limitation, travel,
lodging, meals and other expenses of XTRA personnel participating in such
training.
(b) Pricing. All prices for the FleetView Unit and the Communication
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Services shall be in United States Dollars and shall be set forth on Terion's
Standard Volume Pricing Schedule. XTRA shall sell all FleetView Units and
Communication Services at the prices set forth in the Standard Volume Pricing
Schedule. Orders received and accepted by Terion within fifteen (15) days after
the effective date of any price change will not be subject to the price change.
Terion shall notify XTRA in writing sixty (60) days prior to any planned
FleetView Unit price changes.
(c) Orders. XTRA shall take Orders only on completed Product Purchase
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Forms. XTRA shall be responsible for ensuring that every End User has read,
fully understands and executes the Product Purchase Form. XTRA shall forward
all completed Product Purchase Forms promptly to Terion. XTRA reserves the right
to reject any potential FleetView Unit lease customer that it deems, in its
reasonable discretion to be an unacceptable credit risk. In such event, Terion
shall have the right to seek an alternative leasing source for that particular
customer. Terion reserves the right to accept or reject each Product Purchase
Form in its reasonable discretion. Each Product Purchase Form shall be accepted
by Terion when signed by an authorized representative of Terion.
(d) Account Activation. Following the installation of the FleetView Unit,
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Terion shall activate an End User Communication Service Account.
(e) Commission for the Sale/Lease of the FleetView Unit. Terion shall pay
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to XTRA in accordance with Section 3(f) below, a commission of five percent (5%)
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of the price set forth on the Standard Volume Pricing Schedule of each FleetView
Unit (including sensors) sold or leased by XTRA to End Users, provided that such
sale or lease was procured solely by XTRA. Terion shall not pay XTRA, and XTRA
shall not be entitled to receive, any commission on Communication Services sold
by XTRA. All commissions shall be based on Terion's Standard Volume Pricing
Schedule, exclusive of any and all taxes, trade tariffs, import/export charges
and fees, certification or documentation charges, customs duties and fees,
packing, insurance, freight, shipping and other transportation costs or service
charges.
(f) Payment of Commissions. All payments of commissions shall be
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calculated and made in United State Dollars, and shall be payable on or about
the thirtieth (30/th/) day of the
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month following the month in which full and final payment for the FleetView Unit
is received by Terion.
(g) Marketing Efforts. XTRA and Terion shall use their best efforts to
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market and sell the FleetView Units and the Communication Services to End Users
in the Territory. XTRA shall provide Terion with periodic written reports in
form and substance agreed upon by XTRA and Terion of its marketing activities
during each quarter and shall describe all relevant matters in reasonable detail
for the following quarter. Terion shall provide XTRA with all information
concerning any preferred pricing offered by Terion to potential customers or any
other information relevant to XTRA's and Terion's joint marketing efforts and
strategies.
4. REFERRAL TO XTRA FOR LEASING SERVICES. During the Initial Term and any
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Renewal Term, and subject to the terms of this Section 4, XTRA shall be the
exclusive provider of lease financing in the Territory to End Users who desire
to finance their acquisition of the stand-alone FleetView Units.
Notwithstanding the foregoing sentence, Terion reserves the right to refer an
End User to another source of lease financing if (i) the End Users, in its sole
and exclusive discretion desires to pursue lease financing through a source
other than XTRA, provided that the other source is not a Trailer Rental/Leasing
Company, or (ii) XTRA rejects any potential FleetView Unit lease customer that
it deems, in its reasonable discretion, to be an unreasonable credit risk. XTRA
agrees to provide a lease proposal to each End User who submits a credit
application to XTRA within a reasonable amount of time after receipt the End
Users credit application, and such proposal must contain industry standard terms
and conditions.
5. PRIVATE LABELED SITE.
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(a) Creation of the Private Labeled Site. Terion shall create, host and
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manage the Private Labeled Site. Terion shall have editorial control over the
features and functionality of the Private Labeled Site. Terion shall design and
implement the Look and Feel of the Private Labeled Site and may display the
Xxxxxx Xxxxx or other indication of its role in the creation of the Private
Labeled Site (e.g. "Powered by Terion") in a manner agreed to by the parties.
Terion shall provide all technical support related to the operation of the
Private Labeled Site.
(b) URL. XTRA shall be solely responsible, at its own cost and expense,
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for registering and maintaining the registration and availability of the domain
names and URL's for the Private Labeled Site, including the provision of domain
name system ("DNS") services thereto. XTRA hereby grants to Terion the right to
operate the Private Labeled Site on the applicable URL. Terion shall provide
XTRA with IP addresses and other technical information required to route the
URL's to the servers on which the Private Labeled Site is operated.
(c) Additional Changes to the Private Labeled Site. Terion reserves the
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right to redesign or modify the organization, functionality, structure, Look and
Feel, navigation and any or all other elements of the Private Labeled Site at
any time.
6. TAXES. XTRA will pay or reimburse Terion for all federal, state and local
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taxes (exclusive of taxes on Terion's net income), duties and assessments
arising on or measured by
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amounts payable to Terion under this Agreement, or furnish Terion with evidence
acceptable to the taxing authority to sustain an exemption therefrom.
7. TRADEMARKS.
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(a) Xxxxxx Xxxxx. Subject to the terms and conditions of this Agreement,
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Terion hereby grants to XTRA a non-exclusive, non-transferable license to use,
publish and display (electronically and otherwise) the Xxxxxx Xxxxx in XTRA's
marketing of the FleetView Units; provided, that such use is in accordance with
Terion's trademark use guidelines then in effect. Any use of the Xxxxxx Xxxxx,
including use in advertising collateral and on the Internet, must be approved in
advance by Terion. XTRA acknowledges and agrees that as between Terion and XTRA
(i) Terion is the sole owner of the Xxxxxx Xxxxx and all of the goodwill
attached thereto, and (ii) Terion has the exclusive right to the Xxxxxx Xxxxx.
XTRA agrees that it will not at any time assert or claim any interest in or do
anything which may adversely affect the validity or enforceability of the Xxxxxx
Xxxxx. If this Agreement is terminated for any reason, XTRA shall immediately
cease the use of the Xxxxxx Xxxxx and shall (x) remove any and all signs,
lettering, or other public display of the Xxxxxx Xxxxx, and (y) at Terion's
direction return or destroy material containing the Xxxxxx Xxxxx.
(b) XTRA Marks. Subject to the terms and conditions of this Agreement,
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XTRA hereby grants to Terion a non-exclusive, non-transferable license to use,
publish and display (electronically or otherwise) the XTRA Marks in Terion's
marketing of the FleetView Units and on the Private Labeled Site; provided, that
such use is in accordance with XTRA's trademark use guidelines then in effect.
Any use of the XTRA Marks, including use in advertising collateral and on the
Internet, must be approved in advance by XTRA. Terion acknowledges and agrees
that as between Terion and XTRA (i) XTRA is the sole owner of the XTRA Marks and
all of the goodwill attached thereto, and (ii) XTRA has the exclusive right to
the XTRA Marks. Terion agrees that it will not at any time assert or claim any
interest in or do anything which may adversely affect the validity or
enforceability of the XTRA Marks. If this Agreement is terminated for any
reason, Terion shall immediately cease the use of the XTRA Marks and shall (x)
remove any and all signs, lettering, or other public display of the XTRA Marks,
and (y) at XTRA's direction return or destroy all material containing the XTRA
Marks.
8. COMPLIANCE WITH LAW AND GOVERNMENTAL REQUIREMENTS. XTRA, at its own
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expense shall (i) be responsible for current and ongoing familiarity with, and
shall at all times comply with all applicable laws, treaties, rules,
regulations, orders and other requirements; and (ii) obtain and maintain all
permits, licenses and approvals that are required from time to time to market,
sell, distribute promote, maintain, support and/or service the FleetView Units.
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9. RESERVATION OF RIGHTS. Except as expressly set forth in this Agreement,
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nothing herein shall grant, or be deemed to grant to either party, any right,
title, or interest in or to the other party's proprietary technology, methods
and methodologies, software code, documentation, tools, software and interfaces,
trade secrets, works of authorship and other proprietary materials that are
protected by intellectual property rights held by the other party and/or its
licensors, including, but not limited to, any and all intellectual property
rights and other proprietary rights embodied therein or otherwise applicable
thereto.
10. RIGHT TO PURCHASE TERION SHARES. Promptly after the Terion's receipt of a
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non-cancelable purchase order for the initial 25,000 FleetView Units (as set
forth in Section 2(a)), but in no event greater than seven (7) business days
after the Effective Date, Terion shall grant to XTRA warrants in the form
attached hereto as Exhibit G for 700,000 shares of Terion common stock at a
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warrant price equal to $2.00 per share. Terion further agrees to grant to XTRA
additional warrants ("Additional Warrants") in the form similar to the form
attached hereto as Exhibit G for Terion common stock, at the then current
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warrant price, in increments of 100,000 shares of stock for each additional
25,000 FleetView Units purchased, sold or leased by XTRA during the term of this
Agreement, provided, however, that the maximum number of Additional Warrants to
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be issued to XTRA shall not exceed 500,000. Terion further agrees that during
the Initial Term or any Renewal Term of this Agreement, no other Trailer
Rental/Leasing Company in the Territory shall receive warrants or any other
rights to Terion common stock in exchange for any purchase, sale and/or lease of
FleetView Units.
11. CONFIDENTIAL INFORMATION.
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(a) Confidential Information. Information or materials exchanged between
------------------------
the parties or otherwise made available by one party to the other party in
connection with this Agreement before or after the Effective Date, whether
furnished orally or in writing or gathered by inspection, and regardless of
whether or not specifically identified as "confidential," including, information
and materials relating to a party's past, present or future research,
development or business affairs that such party does not disclose to the public
in the ordinary course of its business such as trade secrets, software, software
and technology architecture, networks, business methodologies, facilities,
billing records, policies, financial and operational information, contracts,
officer, director and shareholder information, suppliers, client lists,
marketing prospects, projected projects, "know how," and all copies,
reproductions, notes, analyses, compilations, studies, interpretations,
summaries and other documents prepared by the receiving party (collectively,
"Confidential Information").
(b) Obligation of Confidentiality. Each party receiving Confidential
-----------------------------
Information (the "Receiving Party") of the other party (the "Disclosing Party")
shall:
(i) Treat such Confidential Information as the confidential property
of the Disclosing Party;
(ii) Not use, disclose or otherwise make available or allow to be
used, disclosed or made available the Confidential Information of the Disclosing
Party by or to any third party (except as authorized herein and other than to
such party's officers, directors, agents,
-11-
employees, accountants and attorneys who have a need to know such Confidential
Information); and
(iii) Maintain the confidentiality of the Confidential Information of
the Disclosing Party as it would its own confidential information, but in no
event shall a party use less than due care and attention.
(c) Notice Obligation. Each party shall notify its officers, directors,
-----------------
agents, employees or independent contractors who have access to the Confidential
Information of the other party of such party's obligations hereunder, and shall
ensure that all such persons agree to be bound by such provisions.
(d) Exceptions. Notwithstanding the foregoing, Confidential Information
----------
shall not include: (i) information that is published or otherwise becomes
available to the general public as part of the public domain without breach of
this Agreement; (ii) information furnished to a party by a third party that does
not involve a breach of the third party's obligations to the other party; (iii)
information that was properly in the Receiving Party's possession without
restrictions prior to the date of disclosure to the Receiving Party; (iv)
information that the Receiving Party is required, by law or regulation to
disclose; (v) information that the Receiving Party establishes through written
records was developed independently of Confidential Information furnished to it;
and (vi) general information of a nonproprietary nature.
(e) Notice of Disclosure. If a Receiving Party is requested or required
--------------------
(by oral questions, interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process) to disclose any
Confidential Information of the Disclosing Party supplied to them pursuant to
this Agreement, the Receiving Party shall promptly notify the Disclosing Party
of such request(s) so that the Disclosing party may seek an appropriate
protective order and/or waive compliance with the provisions of this Agreement.
Each party shall cooperate with the other party, at the other party's expense,
in obtaining such a protective order. If the Disclosing Party does not provide
such protective order or waiver within a reasonable time after such notice, the
Receiving Party may disclose such Confidential Information of the Disclosing
Party without liability hereunder, provided that the Receiving Party has
--------
complied with the notice provisions of this Agreement, and provided, further,
-------- -------
that the Receiving Party has received an opinion of counsel that concludes that
such disclosure is legally required.
12. INDEMNIFICATION.
---------------
(a) Indemnification of XTRA by Terion. Terion shall defend and indemnify
---------------------------------
the XTRA Indemnified Parties and hold them harmless from and against Losses,
which the XTRA Indemnified Parties may suffer, sustain or become subject to (1)
as a result of any claim by a third party that the FleetView Units, the Software
or the Xxxxxx Xxxxx infringe, misappropriate or violate any U.S. patent, trade
secret, copyright or trademark, (2) as a result of use by XTRA of the FleetView
Unit, the Software or the Xxxxxx Xxxxx in compliance with this Agreement, and
(3) as a result of any breach by Terion of any applicable law, rule or
regulation in connection with this Agreement. If the use of the FleetView Unit,
the Software or the Xxxxxx Xxxxx or any
-12-
portion thereof is or in Terion's opinion is likely to be the subject of a third
party infringement claim, then Terion may (i) modify the infringing item to make
it non-infringing, (ii) replace the infringing item with a non-infringing item
that has substantially similar functionality as the infringing item, or (iii)
obtain the rights to use such infringing item by agreeing to pay a reasonable
royalty to the third party, or (iv) if (i), (ii) or (iii) are not reasonably
practicable, terminate this Agreement with respect to such infringing item and
refund to XTRA fees paid for such infringing items to the extent that such
infringing item were used by XTRA in the XTRA Fleet or XTRA is obligated to
return to any of its customers their payment made to XTRA for such infringing
item.
(b) Exclusions. Notwithstanding Section 12(a), Terion shall not be liable
---------- --------------
to XTRA for any claim arising from or based upon the combination, operation or
use of the FleetView Units, the Software or the Xxxxxx Xxxxx with equipment,
data or programming not supplied or authorized by Terion, or arising from any
alteration or modification of the FleetView Units, the Software or the Xxxxxx
Xxxxx by a party not authorized by Terion.
(c) Indemnification of Terion by XTRA. XTRA shall defend and indemnify the
---------------------------------
Terion Indemnified Parties and hold them harmless from and against Losses, which
the Terion Indemnified Parties may suffer, sustain or become subject to as a
result of (i) breach by XTRA of any applicable law or regulation, (ii)
misrepresentation by XTRA to an End User or a Rental User with respect to the
FleetView Units, or the Software, (iii) improper use or application by XTRA of
the FleetView Units or the Software, (iv) XTRA making or purporting to make End
User or Rental User warranties on behalf of Terion, or (v) use of the XTRA Marks
in accordance with this Agreement. If the XTRA Marks or any portion thereof
become or in XTRA's opinion are likely to become the subject of a third party
infringement claim then XTRA may, at its option (a) modify the infringing item
to make it non-infringing, (b) replace the infringing item with a non-infringing
item that has substantially similar functionality as the infringing item, or (c)
obtain the rights to use such infringing item by agreeing to pay a reasonable
royalty for the infringing item, or (d) if (a), (b) or (c) are not reasonably
practicable, terminate this Agreement with respect to such infringing item.
(d) Conditions of Indemnity. An indemnified party hereunder shall promptly
-----------------------
notify the indemnifying party of any such claim of which it becomes aware and
shall: (i) at the indemnifying party's expense, provide reasonable cooperation
to the indemnifying party in connection with the defense or settlement of any
such claim; and (ii) at the indemnified party's expense, be entitled to
participate in the defense of any such claim. The indemnified party agrees that
the indemnifying party shall have sole and exclusive control over the defense
and settlement of any such third-party claim; provided, however, that the
indemnifying party shall not acquiesce to any judgment or enter into any
settlement that adversely affects the indemnified party's rights or interests
without prior written consent of the indemnified party.
13. WARRANTY.
--------
(a) Limited Warranties. Each party represents and warrants to the other
------------------
that:
(i) Such party has the full corporate right, power and authority to
enter into this Agreement and to perform the acts required of it hereunder;
-13-
(ii) The execution of this Agreement by such party, and the
performance by such party of its obligations and duties hereunder, do not and
will not violate any agreement to which such party is a party or by which it is
otherwise bound;
(iii) When executed and delivered by such party, this Agreement shall
constitute the legal, valid and binding obligation of such party enforceable
against such party in accordance with its terms; and
(iv) Such party acknowledges that the other party makes no
representations, warranties or agreements related to the subject matter hereof
that are not expressly provided for in this Agreement.
(b) Limited Warranty Regarding the Xxxxxx Xxxxx and the XTRA Material.
------------------------------------------------------------------
Terion and XTRA each hereby represent and warrant to the other that each party
possesses all necessary rights and privileges to use and electronically publish
the Xxxxxx Xxxxx and the XTRA Marks and to permit the other party to do so in
accordance with the terms and conditions of this Agreement.
(c) NO OTHER WARRANTIES. OTHER THAN THE EXPRESS WARRANTIES SET FORTH
-------------------
IN SECTIONS 2(h), 2(i) AND 13, THE FLEETVIEW UNIT, THE SOFTWARE AND THE
--------------------------
COMMUNICATION SERVICES ARE PROVIDED "AS IS" WITHOUT EXPRESS OR IMPLIED WARRANTY
OF ANY KIND. TERION FURTHER DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WITHOUT
LIMITATION ANY IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. TERION DOES NOT WARRANT THAT THE FLEETVIEW
UNIT, THE SOFTWARE OR THE COMMUNICATION SERVICES WILL BE ERROR FREE OR WILL
OPERATE WITHOUT INTERRUPTION. EXCEPT AS EXPRESSLY SET FORTH IN THE AGREEMENT,
THE ENTIRE RISK ARISING OUT OF THE USE OF THE FLEETVIEW UNITS, THE SOFTWARE AND
THE COMMUNICATIONS SERVICES REMAINS WITH XTRA.
14. LIMITATION OF LIABILITY.
-----------------------
IN NO EVENT WILL TERION BE LIABLE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL,
INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES ARISING OUT OF THE USE, INABILITY TO
USE, OR PERFORMANCE OF THE FLEETVIEW UNITS, THE SOFTWARE, THE COMMUNICATION
SERVICES OR THE PRIVATE LABLED SITE INCLUDING, DAMAGES FOR LOSS OF BUSINESS
PROFITS OR BUSINESS INTERRUPTION, BASED UPON PRINCIPLES OF CONTRACT, WARRANTY,
NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, BREACH OF ANY STATUTORY DUTY,
PRINCIPLES OF INDEMNITY OR CONTRIBUTION, EVEN IF TERION HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, TERION'S CUMULATIVE
LIABILITY WILL NOT EXCEED THE XTRA NET BOOK VALUE AMOUNT PAID BY XTRA FOR
FLEETVIEW UNITS PURCHASED UNDER THIS AGREEMENT.
-14-
15. ESSENTIAL BASIS. THE LIMITATIONS OF LIABILITY, DISCLAIMER OF DAMAGES AND
---------------
DISCLAIMERS OF WARRANTY STATED IN THIS AGREEMENT FORM AN ESSENTIAL BASIS OF THE
BARGAIN BETWEEN THE PARTIES AND SHALL CONTINUE TO APPLY EVEN IF ANY TERM OF THIS
AGREEMENT IS HELD TO BE VOID, VOIDABLE OR OTHERWISE INEFFECTIVE.
16. TERM AND TERMINATION
--------------------
(a) Initial Term. The term of this Agreement shall commence on the
------------
Effective Date and continue in full force and effect for a period of five (5)
years from the Effective Date (the "Initial Term").
(b) Renewal. This Agreement shall automatically renew at the end of the
-------
Initial Term for a second term of five (5) years (the "Renewal Term") only if
XTRA shall have sold, purchased, and/or leased 150,000 FleetView Units during
the Initial Term.
(c) Termination. This Agreement may be terminated immediately upon
-----------
notice to a party if the other party (i) becomes or is declared bankrupt,
becomes the subject of any proceeding related to its liquidation or insolvency
(whether voluntary or involuntary), or makes an assignment for the benefit of
creditors; or (ii) breaches one of its obligations under this Agreement in any
material respect, which breach is not remedied to the reasonable satisfaction of
the non-breaching party within thirty (30) days following such breaching party's
receipt of written notice from the non-breaching party of the breach (ten (10)
business days following receipt of notice in the case of a failure to pay), or
if such breach cannot be remedied within thirty (30) days, that the breaching
party has commenced efforts to cure such breach within such thirty (30) day
period, provided such breach is cured within 90 days or such longer period of
time as agreed to by the parties. In addition, XTRA shall have the right to
terminate this Agreement if XTRA does not receive the warrant as set forth in
Section 10 in form acceptable to XTRA.
(d) Effect. Upon expiration or termination of this Agreement for any
------
reason:
(i) All licenses and other rights granted to XTRA and/or Terion under
this Agreement will become null and void;
(ii) All outstanding obligations or commitments of either party to pay
amounts to the other party, if any, will become immediately due and payable;
(iii) Neither party will have any right to receive any compensation,
reimbursement or other amounts from the other party solely as a result of such
termination, and neither party will have any right whatsoever in or to the other
party's copyrighted materials, patents, trademarks, trade secrets, or other
proprietary rights or Confidential Information;
(iv) XTRA shall retain the right to purchase FleetView Units for use
in the XTRA Fleet (at Terion's then current pricing) and all Communications
Services shall continue unless XTRA fails to pay associated monthly charges for
such Communications Services.
-15-
17. DISPUTE RESOLUTION.
------------------
(a) General. The parties desire to avoid and settle without litigation any
-------
disputes that may arise between them with respect to any controversy or claim
arising out of or relating to this Agreement. If any dispute, controversy, or
claim between the parties arises out of the interpretation of or performance
under this Agreement, the parties agree to resolve such dispute, controversy, or
claim exclusively as provided in this Section 17 and, except as provided in
----------
Section 17(d), to refrain from initiating any legal or other proceedings until
-------------
all of the procedures set forth in this Section 17 have been exhausted.
----------
(b) Informal Resolution. The parties through employees who have management
-------------------
responsibility over the management of this Agreement shall first attempt to
resolve amicably and informally any Dispute. A party shall initiate informal
negotiations to resolve the Dispute by giving the other party written notice of
such intent ("Request for Informal Dispute Resolution"). The Request for
Informal Dispute Resolution shall (i) describe the Dispute and (ii) propose the
procedure for its amicable resolution, including, if appropriate, the hiring of
consultants. Within fifteen (15) days of the date of such Request for Informal
Dispute Resolution, the parties shall attempt to resolve the Dispute amicably,
and no party shall resort to any other means of dispute resolution for at least
fifteen (15) days after such Request for Informal Dispute Resolution has been
delivered.
(c) Resolution by Executives. If any Dispute is not resolved pursuant to
------------------------
this Section 17(b), each party shall designate one or more executives (the
-------------
"Executives") to act on behalf of such party to negotiate to resolve the matter.
At the earliest practical time, and in any event, no later than fifteen (15)
days after the conclusion of the process set forth in Section 17(b) of this
-------------
Agreement, the Executives of both parties shall meet in a mutually agreeable
location or at the business location of the non-complaining party to discuss the
Dispute. Any subsequent meetings shall be rotated between the Executive's place
of business or held at a mutually agreeable location. The Executives shall
negotiate in good faith to resolve the Dispute, and any resolution shall be set
forth in writing and signed by both Parties.
(d) Arbitration. If the Executives are unable to resolve the Dispute
-----------
within thirty (30) days of their receipt of the matter for resolution, such
Dispute will be promptly referred to and settled by binding arbitration in
accordance with the then prevailing Commercial Arbitration Rules of the American
Arbitration Association (the "Rules"). The arbitration shall be conducted by an
arbitration panel consisting of three (3) members, one appointed by each party
and the third appointed by the first two members. All decisions and awards
shall be made by a majority of the arbitrators except for decisions relating to
discovery and disclosures as set forth below. The parties agree that after the
notice of a demand for arbitration has been filed with the American Arbitration
Association, they shall, before the arbitration hearing, make discovery and
disclosure of all matters relevant to such dispute, to the extent and in the
manner provided by the Rules. All questions and issues that may arise with
respect to the obligation of discovery and disclosure and the protection of the
disclosed and discovered materials shall be referred to the third neutral
arbitrator appointed by the first two arbitrators, and the determination of such
single neutral arbitrator shall be final and conclusive. Discovery and
disclosure shall be completed and
-16-
the hearing shall take place within ninety (90) days after the selection of the
neutral arbitrator unless extended by the single neutral arbitrator upon a
showing of good cause by either party. Each party shall bear its own costs and
expenses (including attorneys' fees and expenses) incurred in connection with
the arbitration, except that the parties shall share equally the cost of the
arbitration hearing and the fees and expenses of the arbitrators. Pending
resolution or settlement of any dispute, each party shall proceed diligently
with its performance under this Agreement. The arbitration shall take place in
Florida, or such other place as the parties may mutually agree. The arbitration
award shall be final and binding upon both parties hereto, and judgment thereon
may be entered in any court having jurisdiction over the party against whom
enforcement is sought or such party's property, and application may be made to
such court for judicial acceptance of the award and/or an order of enforcement
as the case may be.
18. GENERAL.
-------
(a) Independent Contractor. Each party hereto is an independent contractor
----------------------
and nothing contained herein shall be construed to create a partnership, joint
venture or agency relationship between the parties, nor shall either party be
authorized to bind the other in any way
(b) Remedies; Amendment. Except as otherwise specifically provided herein,
-------------------
no remedy referred to in this Agreement is intended to be exclusive. No delay
by either party in exercising any of their respective rights or remedies
hereunder shall be deemed to be a waiver of such rights or remedies. No waiver
by either party of any rights under this Agreement or breach by the other party
hereunder shall in any way be a waiver of any such rights in the future or any
future breach. Any waiver, amendment or modification of this Agreement, and any
approval or consent hereunder must be in writing and signed by the party against
whom enforcement is sought or the party providing such approval or consent.
(c) Governing Law; Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT
-------------------------------------------------
(TOGETHER WITH ALL DOCUMENTS REFERRED TO HEREIN) SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD TO
ITS CONFLICT OF LAWS PRINCIPLES. LICENSEE HEREBY IRREVOCABLY CONSENTS TO THE
JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN BREVARD COUNTY, FLORIDA.
THE PARTIES HERETO HEREBY KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHT WHICH EITHER
OR BOTH OF THEM WILL HAVE TO RECEIVE A TRIAL BY JURY WITH RESPECT TO ANY CLAIMS,
CONTROVERSIES OR DISPUTES WHICH WILL ARISE OUT OF OR RELATE TO THIS AGREEMENT OR
THE SUBJECT MATTER HEREOF.
(d) Assignment. Each party consents to the assignment of this Agreement in
----------
the event the other party sells its business or substantially all of its assets,
merges or consolidates to or with a third party provided such third party agrees
to be bound by the terms and conditions of this Agreement, and this Agreement
shall thereafter be binding on such party's successors and assigns. Except as
set forth in the preceding sentence, neither party shall assign this Agreement,
or any right, interest or benefit under this Agreement, without the prior
written consent of the other party which consent shall not be unreasonably
withheld or delayed.
-17-
(e) Invalidity. If any provision of this Agreement is held to be invalid
----------
or unenforceable for any reason, such provision shall be conformed to prevailing
law rather than voided, if possible, in order to achieve the intent of the
parties and, in any event, the remaining provisions of this Agreement shall
remain in full force and effect and shall be binding upon the parties hereto.
(f) Captions. The captions set forth in this Agreement are solely for
--------
reference and have no legal effect whatsoever and shall not in any way affect
the interpretation or construction of this Agreement.
(g) Force Majeure. Neither party shall be liable for damage due to any
-------------
cause beyond its control, including, acts of God, acts of civil or military
authority, labor disputes, failure or delay of suppliers or systems, including
communications and power systems, fire, sabotage, war, embargo or acts or
omissions of the other party caused by any of such events.
(h) Notices. All notices, authorizations and requests in connection with
-------
this Agreement shall be deemed given (i) three (3) days after being deposited in
the United States Mail, postage prepaid, certified or registered, return receipt
requested; or (b) one (1) day after being sent by overnight courier, charges
prepaid, addressed to the address of the Receiving Party set forth below (or
such other address as the party to receive the notice or request so designates
by written notice to the other party).
(i) Publicity. All press releases, marketing or sales or other materials
---------
developed by or on behalf of either party that refer to this Agreement or use
the name or trademark of the other party shall be subject to prior review and
approval by such other party except that either party shall have the right,
subject to Section 11 to make accurate factual reference to the existence of a
----------
relationship with the other party without specific authorization from the other
party.
(j) Survival. The provisions of Sections 2(f), 2(h), 2(i), 2(j), 2(k),
--------
2(m), 2(n), 3(e) and 3(f) (for the sole purpose of commissions due for sales
made prior to termination as to 3(e) and 3(f)), 6, 8, 9, 10 (with respect to
sales made through the date of termination), 11, 12, 13(c), 14, 15, 16(d), 17
and 18 shall survive the termination of this Agreement.
(k) Export. XTRA shall not ship or divert for use in any country any of
------
the FleetView Units, the Software or technical data with respect thereto in
contravention of the laws and regulations of the United States or knowingly
allow such shipping or diversion. XTRA and/or Terion, as applicable, shall
obtain all required governmental approvals necessary in connection with this
Agreement. Without limiting the generality of the foregoing, XTRA and Terion
acknowledges that its exportation of any FleetView Unit, and the Software may be
subject to the United States Export Administration Act of 1979, as amended (the
"Act"), and XTRA and Terion warrant and represent that they shall comply in all
---
respects with the Act.
(l) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between Terion and XTRA pertaining to the subject matter hereof and supersedes
all proposals or prior and contemporaneous agreements or understandings of the
parties regarding such matter.
-18-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the Effective Date.
TERION, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------
Title: Chief Financial Officer
-----------------------------
XTRA LEASE, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------
Title: President
-----------------------------
-19-
Exhibit A
---------
The FleetView Unit
------------------
The tracking system that is installed on a trailer including cellular
communications transceiver, global positioning system (GPS) module, any
componentry for motion status detection, embedded software for location and
status tracking and communications with the Terion Network operating center, and
the application processing and memory which runs the embedded software.
-20-
Exhibit B
---------
Product Purchase Form
---------------------
-21-
Exhibit C
---------
Xxxxxx Xxxxx
------------
Terion (and Design)
Fleetview
-22-
Exhibit D
----------
Terion Standard Volume Pricing Schedule
---------------------------------------
FleetView Control Unit
. FleetView Control Unit
. Includes battery, antennae, installation hardware and cables.
. Excludes installation and external sensor kits.
. Trailer fleet size less than 200 $ 495
. Trailer fleet size 200 - 1500 $ 475
. Trailer fleet size over 1500 $ 425
. External FleetView Sensor Kits Fleets * 200 Fleets 200
------------ -----------
. Cargo Sensor Kit $105 $ 95
. Door Sensor Kit $ 85 $ 75
. Cargo + Door Sensor Kit $140 $ 125
. Connection Sensor Kit $TBD $ TBD
Tview Software
. Internet based access to trailer status, utilization and location, including
street level mapping.
. Access to Tview Application Software
. Fleets * 200 units $1,495
. Fleets 200 units $2,495
. Internet Service Provider Not Included
* less than
-23-
Exhibit E
---------
Communication Service Rate Plan
-------------------------------
Monthly Communication Service Plans:
Fleet Size * 200 Units 200 Units
---------- ----------- ---------
. D: Light Trailer Contact (30 messages) $11.95 $10.95
Additional messages $ .40 $ .37
. E: Moderate Trailer Contact (45 messages) $14.95 $13.95
Additional messages $ .34 $ .31
. F: Frequent Trailer Contact (60 messages) $15.95 $14.95
Additional messages $ .27 $ .25
Service Plan Notes:
. Messaging billing starts from in-service date through last month in service.
. Positions are included in message budget.
. Plans D, E & F (FleetView System):
. Messages are not averaged across units.
. Incremental charges are assessed for messages exceeding plan limits.
Additional Services:
. FleetView Trailer Monitoring
. Standard FleetView Control Unit Installation $ 125
. Standard Sensor Installation
. Cargo Sensor TBD
. Door Sensor TBD
. Cargo + Door Sensor TBD
. Connection Sensor TBD
. Connection + Other Discount From Total TBD
Monthly extended maintenance (control units and sensors) $3.50/month
Re-activation or account transfer of in-service unit $25/unit
. Software installation and/or user training (on site) $125/hour
. Special administrative requests $75/hour
Note: FleetView Product Purchase Form specifies applicable terms and
conditions.
* less than
-24-
Exhibit F
---------
XTRA Marks
----------
XTRA (Name and Design)
XTRA Intermodal
XTRA Lease
Roadwatch
Signature Solutions
Repair Cost Standards
-25-
Exhibit G
----------
Form of Warrant
---------------
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF ABSENT
REGISTRATION OF SUCH SECURITIES UNDER SAID ACT AND SAID LAWS UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THIS WARRANT AND THE SHARES REPRESENTED BY THIS WARRANT ARE SUBJECT TO CERTAIN
RESTRICTIONS CONTAINED IN THAT CERTAIN SEVENTH AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT, DATED AS OF AUGUST 10, 2000, AS AMENDED, COPIES
OF WHICH ARE AVAILABLE FOR EXAMINATION AT THE PRINCIPAL OFFICE OF THE COMPANY.
Void after 5:00 PM New York Time, on [____], 2005
WARRANT
TO PURCHASE COMMON STOCK OF
TERION, INC.
[____] Shares
THIS CERTIFIES THAT XTRA CORPORATION or its registered assignee pursuant to
Section 5 hereof ("Holder") is entitled to purchase from Terion, Inc., a
corporation organized and existing under the laws of Delaware (herein called the
"Company"), upon and subject to the terms and conditions set forth herein, at
any time after the date hereof and until 5:00 p.m. (Eastern Time) on [____],
2005 (the "Warrant Expiration Time"), an aggregate of up to [______] fully paid
and non-assessable shares of voting Common Stock at a purchase price per share
equal to the Exercise Price, as hereinafter defined. The number of shares of
voting Common Stock to be received upon the exercise of this Warrant and the
Exercise Price to be paid for a share of voting Common Stock are subject to
limitation and adjustment from time to time as hereinafter set forth.
1. Certain Definitions. As used herein, the following terms shall have
-------------------
the following meanings:
(a) "Additional Shares of Common Stock" means all shares of Common
Stock (and all warrants, options or other rights to purchase shares of Common
Stock and all securities convertible into or exchangeable for shares of Common
Stock) issued by the Company after the Original Issue Date, whether or not
subsequently reacquired or retired by the Company, other than:
-26-
(i) securities issued in connection with any stock splits,
stock dividends or other distributions payable pro rata to all holders of Common
Stock;
(ii) Preferred Stock and any Common Stock issued upon the
conversion of such Preferred Stock;
(iii) warrants, options or other rights to purchase shares of
Common Stock or stock or securities convertible into or exchangeable or
redeemable for shares of Common Stock (other than the options and other rights
described in clause (iv) and clause (vi) of this paragraph (a)), and any shares
of Common Stock issued upon exercise or conversion of any such warrants,
options, stock, securities or other rights to purchase or acquire shares of
Common Stock, to the extent any of the foregoing were outstanding on the
Original Issue Date;
(iv) options or other rights to purchase shares of Common
Stock, and any shares of Common Stock issued upon exercise of any such option or
other right, issued pursuant to the Company's 1995 Employee Stock Option Plan
(as the same may be amended or restated from time to time) or any other equity
incentive plan adopted by the Company for grant of stock options, shares or
similar rights to employees, directors and consultants;
(v) any shares of Common Stock issued upon the exercise of
any warrant, option or other right to purchase or acquire shares of Common Stock
so long as such warrant, option or other right was itself an Additional Share of
Common Stock or was excluded from the definition of Additional Shares of Common
Stock pursuant to clauses (iii), (iv), (vi), (vii), or (viii) of this paragraph
(a);
(vi) the warrants issued to International Logistics Group
L.L.C. ("ILG") on October 27, 1998, and issued thereafter in connection with the
issuance of Series D Preferred Stock (the "ILG Warrants"), the Warrants issued
to Communications Equity Associates, Inc. and/or its designees or assigns
("CEA") on October 27, 1998, and issued thereafter in connection with the
issuance of Series D Preferred Stock (the "CEA Warrants"), and the shares of
Common Stock into which the ILG Warrants and CEA Warrants are exercisable;
(vii) the warrants issued and to be issued in connection with
the issuance shares of Series E Convertible Preferred Stock, $.01 par value per
share, (as adjusted for all subsequent stock dividends, subdivisions,
combinations and anti-dilution adjustments) (the "Series E Warrants");
(viii) any options or warrants which may be granted to any
person or entity with an exercise price of $1.65 or more per share of Common
Stock and the shares of Common Stock issuable upon the exercise of such options
or warrants (as adjusted for all subsequent stock dividends, subdivisions,
combinations and anti-dilution adjustments);
(ix) any securities of the Company or any warrants, options
or other rights to purchase any securities of the Company issued after the
closing date of the Company's initial Public Offering.
-27-
(b) "Capital Stock" means the Company's Common Stock, Preferred
Stock, and any other stock of any class, whether now or hereafter authorized,
which has the right to participate in the distribution of earnings and assets of
the Company without limit as to amount or percentage.
(c) "Common Stock" means the Company's voting Common Stock, par value
$0.01 per share, and the Company's Non-voting Common Stock, $0.01 par value per
share.
(d) "Exercise Price" means Two Dollars ($2.00) per share for the
purchase of the Warrant Shares as the same may be adjusted from time to time as
provided herein.
(e) "Preferred Stock" means the Company's Series A Convertible
Preferred Stock, Series B Convertible Preferred Stock, Series C Convertible
Preferred Stock, Series D Convertible Preferred Stock, Series E Convertible
Preferred Stock, and any other class or series of the Company's preferred stock
issued after the Original Issue Date with an effective conversion price of $1.65
or more per share of Common Stock (as adjusted for all subsequent stock
dividends, subdivisions, combinations and anti-dilution adjustments).
(f) "Public Offering" means any underwritten public offering of the
Company's Common Stock, the gross proceeds of which to the Company and/or
selling stockholders (if any) (before deducting any underwriting fees and
selling commissions) are at least $50 million, provided that the public offering
price per share (before deducting any underwriting fees or selling commissions),
when multiplied by the number of shares of Common Stock outstanding immediately
after such closing, exceeds $100 million.
(g) "Strategic Business Agreement" means the Strategic Business
Agreement dated as of September 11, 2000, between the Company and XTRA Lease,
Inc.
(h) "Warrant Shares" means the shares of voting Common Stock
deliverable upon exercise of this Warrant, as adjusted from time to time.
(i) "Warrant Expiration Time" has the meaning assigned to it in the
paragraph immediately preceding this Section 1.
2. Exercise of Warrant.
-------------------
(a) Exercisability. The Holder's right to purchase the Warrant
--------------
Shares shall be immediately exercisable.
(b) Manner of Exercise. Except as otherwise provided herein, this
------------------
Warrant may be exercised in whole or in part on any business day (the "Exercise
Date") by presentation and surrender hereof to the Company at its principal
office at the following address: 000 X. Xxxxxxx Xxxx, Xxxxxxxxx, XX 00000, or at
the office of its stock transfer or warrant agent, if any, (or at such other
address as the Company may hereafter notify the Holder in writing) with the
Purchase Form annexed hereto duly executed and accompanied by proper payment of
the
-28-
Exercise Price in lawful money of the United States of America in the form of a
check (subject to collection) or wire transfer to an account designated by the
Company, for the number of Warrant Shares specified in the Purchase Form. If
this Warrant should be exercised in part only, the Company shall, upon surrender
of this Warrant, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
hereunder, subject to the same terms and conditions as would be applicable under
this Warrant. Upon receipt by the Company of this Warrant and such Purchase
Form, together with proper payment of the Exercise Price, the Holder shall be
deemed to be the holder of record of the Warrant Shares, notwithstanding that
the stock transfer books of the Company shall then be closed or that the
certificates representing such Warrant Shares shall not then be actually
delivered to the Holder. The Holder shall pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
the Warrant Shares.
(c) HSR. Notwithstanding anything to the contrary elsewhere herein,
---
the Holder acknowledges and agrees that its right to exercise this Warrant shall
be contingent upon, in each instance, the expiration of all waiting periods and
the receipt of any authorizations or consents that the Company, in its sole
discretion, may determine are required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), or any other applicable
rule or regulation by which the Company is bound. The Holder shall provide the
Company not less than ten (10) business days' prior written notice, in each
instance, of its intention to exercise this Warrant, specifying the number of
Warrant Shares that the Holder intends to purchase and the aggregate purchase
price payable therefore.
3. Reservation of Shares. The Company shall reserve at all times for
---------------------
issuance and delivery upon exercise or conversion of this Warrant all shares of
its Common Stock or other shares of Capital Stock of the Company from time to
time issuable upon exercise of this Warrant. All such shares shall be duly
authorized and, when issued upon the exercise or conversion of this Warrant in
accordance with the terms hereof, including payment of the applicable Exercise
Price in full, shall be validly issued, fully paid and nonassessable, free and
clear of all liens, security interests, charges and other encumbrances or
restrictions ("Liens") on sale (other than (i) restrictions pursuant to
applicable federal and state securities laws, and (ii) any Liens created by any
action or inaction of the Holder of the Warrant Shares) and free and clear of
all preemptive rights.
4. Fractional Interest. The Company will not issue a fractional share of
-------------------
Common Stock or scrip upon any exercise or conversion of this Warrant. Instead,
the Company will deliver its check for the current market value of the
fractional share. The current market value of a fraction of a share is
determined as follows: multiply the current market price of a full share by the
fraction of a share and round the result to the nearest cent.
The current market value of a share of Common Stock for purposes of this
Section shall be determined as follows:
(i) If the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such exchange or listed for
trading on The NASDAQ National Market, the current market value shall be
the last reported sale price
-29-
of the Common Stock on such exchange or Market on the last business day
prior to the date of exercise or conversion of this Warrant or if no such
sale is made on such day, the average closing bid and asked prices for such
day on such exchange or Market; or
(ii) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current market value shall be the mean of the last
reported bid and asked prices reported by the National Quotation Bureau,
Inc., on the last business day prior to the date of exercise or conversion;
or
(iii) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current market value per share shall be an amount determined in such
reasonable manner as may be prescribed in good faith by the Board of
Directors of the Company.
5. Assignment or Transfer of Warrant.
---------------------------------
(a) Conditions. The Holder shall not assign or otherwise transfer
----------
its interest in this Warrant, or any of the Warrant Shares, in whole or in part,
unless: (i) the Company shall have consented in writing to the proposed
transfer; (ii) the proposed transferee shall have agreed in writing, in form and
substance satisfactory to the Company, to be bound by the terms of this Warrant;
and (iii) the Holder shall have provided the Company with an opinion of counsel
in such form reasonably acceptable to the Company, that such transfer would not
be in violation of the Act or any applicable state securities or blue sky laws.
(b) Procedure. Subject to the provisions of 5(a) above and Section
---------
8 below, upon surrender of this Warrant to the Company or at the office of its
stock transfer agent or warrant agent, with the Assignment Form annexed hereto
duly executed and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees named in such instrument of assignment and, if the
Holder's entire interest is not being assigned, in the name of the Holder, and
this Warrant shall promptly be canceled.
6. Adjustment of Exercise Price and Number of Shares. The number and
-------------------------------------------------
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification, Consolidation or Merger. In case of any
-----------------------------------------
reclassification or change of outstanding securities issuable upon exercise or
conversion of this Warrant (other than a change in par value, or from par value
to no par value, or from no par value to par value or as a result of a
subdivision or combination) or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with another
corporation in which the Company is a continuing corporation and which does not
result in any reclassification or change, other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination of outstanding securities issuable upon
the exercise of this Warrant), the Company, or such successor or purchasing
corporation, as the case may be, shall, without payment of any additional
consideration therefore,
-30-
execute a new warrant providing that the Holder of the Warrant shall have the
right to exercise such new warrant (upon terms not less favorable to the Holder
than those then applicable to this Warrant) and to receive upon such exercise,
in lieu of each share of Common Stock theretofore issuable upon exercise or
conversion of this Warrant, the kind and amount of shares of stock, other
securities, money or property receivable upon such reclassification, change,
consolidation or merger by the Holder of one share of Common Stock issuable upon
exercise or conversion of this Warrant had the Warrants been exercised or
converted immediately prior to such reclassification, change, consolidation, or
merger. Such new warrant shall provide for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section. The provisions of this subsection shall similarly apply to successive
reclassifications, changes, consolidations, or mergers.
(b) Subdivision or Combination of Shares. If, at any time while
------------------------------------
this Warrant remains outstanding and unexpired, the Company shall subdivide or
combine its Capital Stock, the Exercise Price shall be proportionately reduced,
in case of subdivision of shares, as of the effective date of such subdivision,
or, if the Company shall take a record of holders of its Capital Stock for the
purpose of so subdividing, as of such record date, whichever is earlier, or
shall be proportionately increased, in the case of combination of shares, as of
the effective date of such combination, or, if the Company shall take a record
of holders of its Capital Stock for the purpose of so combining, as of such
record date, whichever is earlier.
(c) Stock Dividends and Distributions. If the Company at any time
---------------------------------
while this Warrant is outstanding and unexpired shall pay a dividend in shares
of, or make other distribution of shares of, its Capital Stock, then the
Exercise Price shall be adjusted, as of the date the Company shall take a record
of the holders of its Capital Stock for the purpose of receiving such dividend
or other distribution (or if no such record is taken, as at the date of such
payment or other distribution), to that price determined by multiplying that
Exercise Price in effect immediately prior to such payment or other distribution
by a fraction (a) the numerator of which shall be the total number of shares of
Capital Stock outstanding immediately prior to such dividend or distribution,
and (b) the denominator of which shall be the total number of shares of Capital
Stock outstanding immediately after such dividend or distribution. The number of
shares of Capital Stock at any time outstanding shall not include any shares
thereof then directly or indirectly owned or held by or for the account of the
Company.
(d) Sale of Shares Below Conversion Price.
-------------------------------------
(i) Adjustment. Subject to the remaining provisions of this
----------
paragraph (d), if the Company at any time while this Warrant is outstanding and
unexpired shall issue or sell Additional Shares of Common Stock, other than as a
dividend or distribution as provided in Section 6(c) above, and other than upon
a subdivision or combination as provided in Section 6(b) above, for a
consideration per share less than the Exercise, then and in each case the
Exercise Price shall be reduced, as of the opening of business on the date of
such issue or sale, to a price determined by multiplying the Exercise Price by a
fraction (A) the numerator of which shall be (x) the number of shares of Common
Stock outstanding immediately prior to such issue or sale, plus (y) the number
of shares of Common Stock that the aggregate consideration received by the
Company for the total number of Additional Shares of Common Stock so issued
would purchase
-31-
at such Exercise Price, and (B) the denominator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issue or sale plus
the number of such Additional Shares of Common Stock so issued.
(ii) Amount of Consideration. For the purpose of making any
-----------------------
adjustment in the Exercise Price or number of Warrant Shares purchasable
hereunder, the consideration received by the Company for any issue or sale of
securities shall:
(A) to the extent it consists of cash, be computed at the
amount of cash received by the Company after deduction of any underwriting or
similar commissions, concessions or compensation paid or allowed by the Company
in connection with such issue or sale;
(B) to the extent it consists of services or property
other than cash, be computed at the fair value of such services or property as
determined in good faith by the Board of Directors of the Company; and
(C) if Additional Shares of Common Stock, Convertible
Securities (as hereinafter defined), or rights or options to purchase either
Additional Shares of Common Stock or Convertible Securities are issued or sold
together with other stock or securities or other assets of the Company for a
consideration that covers all assets sold by the Company, be computed as the
portion of the consideration so received that may be reasonably determined in
good faith by the Board of Directors of the Company to be allocable to such
Additional Shares of Common Stock, Convertible Securities or rights or options.
(iii) Issuance of Convertible Securities. For the purpose of
----------------------------------
the adjustment provided in subsection (i) of this Section 6(d), if the Company
at any time while this Warrant is outstanding and unexpired shall issue any
options, warrants or other rights for the purchase of, or stock or other
securities convertible into or exchangeable or redeemable for, Additional Shares
of Common Stock (such convertible stock or securities being hereinafter referred
to as "Convertible Securities"), then, in each case, if the Effective Price (as
defined in the next sentence) of such rights, options or Convertible Securities
shall be less than the Exercise Price, then and in each case the Company shall
be deemed to have issued at the time of the issuance of such rights or options
or Convertible Securities the maximum number of Additional Shares of Common
Stock issuable upon exercise or conversion thereof and to have received as
consideration for the issuance of such shares an amount equal to the total
amount of the consideration, if any, received by the Company for the issuance of
such rights or options or Convertible Securities, plus, in the case of such
options or rights, the minimum amounts of consideration, if any, payable to the
Company upon exercise or conversion of such options or rights. For purposes of
this paragraph, "Effective Price" shall mean the quotient determined by dividing
the total of all such consideration by such maximum number of Additional Shares
of Common Stock. No further adjustment of any Exercise Price adjusted upon the
issuance of such rights, options or Convertible Securities shall be made as a
result of the actual issuance of Additional Shares of Common Stock on the
exercise of any such rights or options or the conversion of any such Convertible
Securities.
-32-
If any such rights or options or the conversion privilege represented by
any such Convertible Securities shall expire without having been exercised, the
respective Conversion Prices adjusted upon the issuance of such rights, options
or Convertible Securities shall be readjusted to the Conversion Prices that
would have been in effect had an adjustment been made on the basis that the only
Additional Shares of Common Stock so issued were the Additional Shares of Common
Stock, if any, actually issued or sold on the exercise of such rights or
options, or rights of conversion of such Convertible Securities, and such
Additional Shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise, plus the
consideration, if any, actually received by the Company for the granting of all
such rights and options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted
plus the consideration, if any, actually received by the Company on the
conversion of such Convertible Securities.
(iv) Issuance of Rights or Options for the Purchase of
-------------------------------------------------
Convertible Securities. For the purpose of the adjustment provided for in
----------------------
subsection (i) of this Section 6(d), if the Company at any time while this
Warrant is outstanding and unexpired issue any rights or options for the
purchase of Convertible Securities, then in each such case, if the Effective
Price (as defined in the next sentence) thereof shall be less than the Exercise
Price, the Company shall be deemed to have issued at the time of the issuance of
such rights or options the maximum number of Additional Shares of Common Stock
issuable upon conversion of the total amount of Convertible Securities covered
by such rights or options and to have received as consideration for the issuance
of such Additional Shares of Common Stock an amount equal to the amount of
consideration, if any, received by the Company for the issuance of such rights
or options, plus the minimum amounts of consideration, if any, payable to the
Company upon the conversion of such Convertible Securities. For the purposes of
this paragraph, "Effective Price" shall mean the quotient determined by dividing
the total amount of such consideration by such maximum number of Additional
Shares of Common Stock. No further adjustment of any Exercise Price adjusted
upon the issuance of such rights or options shall be made as a result of the
actual issuance of the Convertible Securities upon the exercise of such rights
or options or upon the actual issuance of Additional Shares of Common Stock upon
the conversion of such Convertible Securities.
The provisions of subsection (iii) above for the readjustment of the
Conversion Prices upon the expiration of rights or options or the rights of
conversion of Convertible Securities, shall apply mutatis mutandis (with the
necessary changes having been made) to the rights, options and Convertible
Securities referred to in this subsection (iv).
(v) Other Action Affecting Capital Stock. In case after the
------------------------------------
date hereof the Company shall take any action affecting the Capital Stock, other
than an action described in any of the foregoing provisions of this Section,
which in the opinion of the Company's Board of Directors would have a materially
adverse effect upon the rights of the Holder to purchase the Warrant Shares, the
Exercise Price shall be adjusted in such manner and at such time as the Board of
Directors may in good faith determine to be equitable in the circumstances.
-33-
(e) Notices of Record Date. In the event of (i) any taking by the
----------------------
Company of a record of the holders of any class or series of securities for the
purpos of determining the holders thereof who are entitled to receive any
dividend or other distribution or (ii) any reclassification or recapitalization
of the capital stock of the Company, any merger or consolidation of the Company,
or any transfer of all or substantially all the assets of the Company to any
other corporation, entity or person, or any voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, the
Company shall mail to the Holder at least 30 days prior to the record date
specified therein, a notice specifying (A) the date on which any such record is
to be taken for the purpose of such dividend or distribution, (B) the date on
which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become effective,
and (C) the time, if any is to be fixed, as to when the holders of record of
Common Stock (or other securities) shall be entitled to exchange their shares of
Common Stock (or other securities) for securities or other property deliverable
upon such reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up.
(f) Adjustment of Number of Shares. Upon each adjustment in the
------------------------------
Exercise Price pursuant to any provisions of this Section, the number of shares
of Common Stock purchasable hereunder shall be adjusted, to the nearest one
hundredth of a whole share, to the product obtained by multiplying such number
of shares purchasable immediately prior to such adjustment by a fraction, the
numerator of which shall be the Exercise Price immediately prior to such
adjustment and the denominator of which shall be the Exercise Price immediately
thereafter.
(g) Officer's Certificate. Whenever the Exercise Price shall be
---------------------
adjusted as required by the provisions of this Section, the Company shall
forthwith file in the custody of its secretary or an assistant secretary at its
principal office an officers' certificate showing the adjusted Exercise Price
determined as herein provided, setting forth in reasonable detail the facts
requiring such adjustment and the manner of computing such adjustment. Each such
officers' certificate shall be signed by the chairman, president or chief
financial officer of the Company and by the secretary or any assistant secretary
of the Company. A copy of each such officers' certificate shall be promptly
mailed, by certified mail, to the Holder and the original shall be made
available at all reasonable times for inspection by any other holder of a
Warrant executed and delivered pursuant to Section 5 hereof.
7. Rights of the Holder. The Holder shall not, by virtue hereof, be
--------------------
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those set forth in this Warrant. The
Holder shall be entitled to execute and enter into the Company's Seventh Amended
and Restated Registration Rights Agreement dated as of August 10, 2000, as
amended, providing for certain registration rights with respect to the Warrant
Shares, but not the Warrant and pursuant to which the Holder will agree to a 180
day lock-up with respect to the Warrant Shares.
8. Transfer to Comply with the Securities Act of 1933. No sale, transfer,
--------------------------------------------------
assignment, hypothecation or other disposition of this Warrant or of the Warrant
Shares shall be made if such transfer, assignment or other disposition would
result in a violation of the Act, or
-34-
any state securities laws. Upon exercise of this Warrant, the Holder shall, if
requested by the Company, confirm in writing, in a form reasonably satisfactory
to the Company, that the shares of Common Stock so purchased are being acquired
solely for the Holder's own account, and not as a nominee thereof, for
investment, and not with a view toward distribution or resale, except as
permitted by the Act, and shall provide such other information to the Company as
the Company may reasonably request. Any Warrant and any Warrants issued upon
exercise of, substitution for, or upon assignment or transfer of this Warrant,
as the case may be, and all shares of Common Stock issued upon exercise hereof
or conversion thereof shall bear legends (in addition to any legend required by
state securities laws) in substantially the form set forth on the first page of
this Warrant, unless and until such securities have been transferred pursuant to
an effective registration statement under the Act or may be freely sold to the
public pursuant to Rule 144 (or any successor rule thereto) or otherwise.
9. Modification and Waiver. Neither this Warrant nor any term hereof may
-----------------------
be changed or waived other than by an instrument in writing signed by the
Company and by the holder hereof.
10. Notices. Any notice, request or other document required or permitted
-------
to be given or delivered to the holder hereof or the Company shall be delivered
or shall be sent by certified mail or documented overnight delivery service,
postage prepaid, or by telecopy, receipt acknowledged, to the Holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefore in Section 2(b) of this Warrant.
11. Descriptive Headings and Governing Law. The descriptive headings of
--------------------------------------
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware.
12. No Impairment. The Company will not knowingly avoid or seek to avoid
-------------
the observance or performance of any of the terms to be observed or performed
hereunder by it, but will at all times in good faith assist in the carrying out
of all of the provisions of this Warrant.
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed
by its duly authorized officer and to be dated as of [_________, ___, 2000].
TERION, INC.
By: __________________________________
Xxxxx Xxxxxxxxx, Vice President & CFO
-35-
PURCHASE FORM
-------------
Dated _______________________
The undersigned hereby irrevocably elects to exercise the within Warrant to
purchase _____________ shares of Common Stock and hereby makes payment of
$_________________ in payment of the exercise price thereof.
__________________________________________
[PRINT OR TYPE NAME OF ENTITY]
By: _____________________________________
Name: _______________________________
Title: ______________________________
-36-
ASSIGNMENT FORM
---------------
Dated ________________________
FOR VALUE RECEIVED, ______________________________________ hereby sells,
assigns and ____________________________________________________________________
(please type or print in block letters)
transfers unto _________________________________________________________________
(please type or print in block letters)
(the "Assignee"), of ___________________________________________________________
(Address)
its right to purchase up to _________ shares of Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint _____________________
Attorney, to transfer the same on the books of the Company, with full power of
substitution in the premises.
________________________________________
[PRINT OR TYPE NAME OF ENTITY]
By: ___________________________________
Name: _____________________________
Title: ____________________________
-37-
Schedule 1
----------
Pricing
-------
. Hardware Pricing (includes: antennae, control unit, battery, and cables)
. $[ * ] Per Unit
. Monthly Service Pricing (per trailer per month/per additional
message)
--------------------------------------------------
15 Message Plan $[ * ]
--------------------------------------------------
30 Message Plan $[ * ]
--------------------------------------------------
45 Message Plan $[ * ]
--------------------------------------------------
60 Message Plan $[ * ]
--------------------------------------------------
. Sensor Pricing
----------------
XTRA
--------------------------------------------------
Door Sensor Kit $[ * ]
--------------------------------------------------
Cargo & Door Sensor Kit $[ * ]
--------------------------------------------------
. Software
. Standard Software and private labeled website to be
provided pursurant to the terms of the Strategic
Business Agreement
. ISP: Not included
. Installation
-------------------------
XTRA
-----------------------------------------------------------
Basic Unit $[ * ] (No wait time)
-----------------------------------------------------------
Sensor Package (Door & Cargo) $[ * ] (No wait time)
-----------------------------------------------------------
* Information omitted pursuant to a confidentiality request filed with the
Securities and Exchange commission
-38-
