EXHIBIT 10.12
RADIO LOCATION SYSTEM LICENSE AGREEMENT
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THIS RADIO LOCATION SYSTEM LICENSE AGREEMENT (this "License Agreement"), dated
as of the 21st day of December, 1999, is made by and between TELETRAC, INC., a
Delaware corporation, ("Teletrac"), and GREENPORT ENTERPRISES A.V.V., a
corporation organized under the laws of Aruba ("Licensee"). Teletrac and
Licensee are sometimes individually referred to as "Party" and collectively as
"Parties."
WITNESSETH:
WHEREAS, Teletrac owns or possesses rights to proprietary information,
technology and software necessary for the operation of a Radio Location System;
as defined below; and
WHEREAS, Licensee has or intends to obtain a Spectrum License for operation of a
land-based radio location system in the Territory, as defined below; and
WHEREAS, Licensee desires to establish and operate within the Territory a Radio
Location System; and
WHEREAS, subject to the terms and conditions of this License Agreement, and only
for purposes within the Territory, Teletrac desires to grant to Licensee: (i) an
exclusive, nontransferable right to use, construct, maintain and provide support
for a Radio Location System, and to market, sell, promote, maintain and provide
support for RLS Customer Equipment and RLS Customer Services, as defined below;
and (ii) an exclusive, nontransferable license to use RLS Licensed Software and
RLS Licensed Technical Information, as defined below, to construct, maintain,
operate and provide support for a Radio Location System in the Territory, and
Licensee desires to acquire such right and licenses.
NOW THEREFORE, in consideration of the foregoing and the mutual premises set
forth in this License Agreement, the Parties agree as follows:
1. Definitions.
1.1 "Contract Administrator" shall mean the person designated by each Party as
the contact person at such Party for matters, other than engineering matters,
concerning the administration of this License Agreement.
1.2 "Contract Technical Coordinator" shall mean the person designated by each
Party as the contact person at such Party for engineering matters related to
this License Agreement.
1.3 "Effective Date" shall mean March 1, 1999.
1 4 "Radio Location System" shall mean a land-based radio location system that
uses the RLS Licensed Software and RLS Licensed Technical information for
purposes of locating animate or inanimate objects, including people and
vehicles, and for ancillary activities such as data messaging or voice messages,
or both.
1.5 "RLS Components" shall mean all components of the Radio Location System in
the Territory. In general, the major components are: the RLS Customer
Workstation; the RLS Network Control Center and network; the RLS Transmission
Sites; the RLS Receiver Sites; and the RLS Location Units. Each of these major
components, in turn, has a number of constituent parts, all of which are
considered "RLS Components" for purposes of this License Agreement.
1.6 "RLS Coverage Area" shall mean the geographic area of designed coverage of
the Radio Location System in the Territory.
1.7 "RLS Customer" shall mean a purchaser, renter, lessee or other end user of
any RLS Customer Equipment, RLS Customer Maintenance, RLS Customer Services or
RLS Component, that is provided with respect to the Radio Location System in the
Territory.
1.8 "RLS Customer Equipment" shall mean the equipment, including, but not
limited to, RLS Location Unit and RLS Customer Basestations, that enables an RLS
Customer to receive RLS Customer Services.
1.9 "RLS Customer Equipment Revenue" shall mean the gross amount invoiced to any
RLS Customer or other third party for RLS Customer Equipment less any value
added tax, sales tax or other tax or levy actually imposed in the Territory on
the RLS Customer with respect to sales of RLS Customer Equipment and paid by
Licensee (not including any tax on Licensee's income with respect to such
sales). If Licensee receives compensation for RLS Customer Equipment in the form
of goods or services, then the fair market value of such goods or services shall
be included as RLS Customer Equipment Revenue.
1.10 "RLS Customer Maintenance" shall mean maintenance and support provided for
software, hardware or other equipment with respect to RLS Location Unit, RLS
Customer Workstations and other RLS Customer Equipment.
1.11 "RLS Customer Maintenance Revenue" shall mean the gross amount invoiced to
RLS Customers and other third parties for RLS Customer Maintenance.
1.12 "RLS Customer Services" shall mean the services provided by means of the
Radio Location System, including, but not limited to' radio location, data
messaging and voice messages. RLS Customer Services do not include RLS Customer
Maintenance.
1.13 "RLS Customer Services Revenue" shall mean the gross amount invoiced to any
RLS Customer or other third party for RLS Customer Services, together with all
other revenues, other than revenues attributable to RLS Customer Equipment and
RLS Customer Maintenance, received by Licensee by reason of the rights and
licenses granted under this License Agreement, less any value added tax, sales
tax or other tax or levy actually imposed in the Territory on the RLS Customer
with respect to such Services and paid by Licensee (not including any tax on
Licensee's income with respect to such Services). If Licensee is compensated in
the form of goods or services, then the fair market value of such goods or
services shall be treated as income for the purpose of calculating RLS Customer
Services Revenue.
1.14 "RLS Customer Workstations" shall mean a workstation installed at an RLS
Customer site that enables an RLS Customer to forward requests for locations to
the RLS Network Control
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Center, that receives location information from the RLS Network Control Center
and displays locations on an RLS Map. The RLS Customer Workstation consists of
hardware and software components.
1.15 "RLS Data Transmission Network" shall mean the data transmission equipment
that transports data between RLS Transmission Sites, RLS Receiver Sites and the
RLS Network Control Center.
1.16 "RLS Licensed Software Corrections" shall mean any and all technical,
functional, operational or other corrections or modifications to the RLS
Licensed Software that are designated by Teletrac, in its sole discretion, to be
minor corrections or modifications. RLS Licensed Software Corrections shall not
include any software or other proprietary data that a third party owns and that
Teletrac is not authorized to disclose. RLS Licensed Software Corrections that
Teletrac provides to Licensee during the term of this License Agreement shall be
treated as RLS Licensed Software for all purposes under this License Agreement.
1.17 "RLS Licensed Software Upgrades" shall mean any and all technical,
functional, operational or other enhancements, improvements, additions, upgrades
or modifications to, and new versions of, the RLS Licensed Software other than
the RLS Licensed Software Corrections. RLS Licensed Software Upgrades shall not
include any software or other proprietary data that a third party owns and that
Teletrac is not authorized to disclose. RLS Licensed Software Upgrades that
Teletrac provides to Licensee during the term of this License Agreement shall be
treated as RLS Licensed Software for all purposes under this License Agreement
1.18 "RLS Licensed Software" shall mean the executable format versions of the
operational computer software or firmware programs, or both, that are listed in
Exhibit A to this License Agreement and are commonly referred to by Teletrac as
the "SIMON software", as such programs exist and, to the extent applicable, may
be sublicensed by Teletrac to Licensee, at the time of delivery in accordance
with this License Agreement, and available documentation relating to the use of
such software or firmware. With respect to the RLS Customer Workstation Licensed
Software only, RLS Licensed Software also shall include the source code of such
software to the extent that Teletrac is entitled to disclose such source code.
The RLS Licensed Software does not include management information software,
including, but not limited to, for purposes such as customer activation, billing
and accounting, and Licensee will be responsible for supplying any such
software. Teletrac will, however, provide all of its available interface
specifications or software books, for Licensee's use in designing management
information software to be used with the RLS Licensed Software. In summary, the
RLS Licensed Software programs are the programs designed to perform the
following functions for the Radio Location System:
(1) RLS Customer Workstations Licensed Software. These software programs enable
the RLS Customer to send and receive information to and from the RLS Network
Control Center and to display the location date on the RLS Map when such map is
provided as part of the RLS Customer Workstation.
(2) RLS Network Control Center Licensed Software. These software programs
consist of the following three categories:
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(a) Real time operating software that communicates and synchronizes information
received from Location Unit radio signals to calculate locations in real time.
(b) Systems support and maintenance software that enables RLS Customers to
access a Radio Location System, forwards requests for locations to RLS
Transmission Sites and diagnoses Radio Location System malfunctions; provided,
however, that Licensee acknowledges that this software has been specifically
designed to perform in accordance with the standards and protocols in use on the
telephone system in the United States and may need to be modified by Licensee in
order to perform properly in the Territory.
(c) Database services software that performs customer validation functions,
tracks or records use of the Radio Location System and performs message
management functions.
(3) RLS Transmission and RLS Receiver Sites Licensed Software. These software
programs perform calculations and act as an interface for signals from RLS
Receiver Sites and RLS Transmission Sites and the RLS Data Transmission Network.
(4) RLS Episode Software. Teletrac is finalizing the development of certain
software programs designed for managing critical events generated from RLS
Location Units at times when the corresponding RLS Customer Workstation is not
logged in to the RLS Network Control Center or the RLS Customer does not have a
workstation.
1.19 "RLS Licensed Technical Information" shall mean the manuals, blue prints
and other tangible data listed in Exhibit B to this License Agreement, together
with intangible information that is proprietary to Teletrac and that may assist
Licensee to use the information listed in Exhibit B for the purpose of
designing, constructing and operating and maintaining the RLS in the Territory.
1.20 "RLS Licensed Technical Information Corrections" shall mean any and all
technical, functional, operational or other corrections or modifications to the
RLS Licensed Technical Information that are designated by Teletrac, in its sole
discretion, to be minor corrections or modifications to the RLS Licensed
Technical Information, provided that RLS Licensed Software Upgrades and RLS
Licensed Software Corrections are not included in this definition. RLS Licensed
Technical Information corrections shall not include any software or other
proprietary data that a third party owns and that Teletrac is not authorized to
disclose. RLS Licensed Technical Information Corrections that Teletrac provides
to Licensee during the term of this License Agreement shall be treated as RLS
Licensed Technical Information for all purposes under this License Agreement.
1.21 "RLS Licensed Technical Information Upgrades" shall mean any and all
technical, functional, operational or other enhancements, improvements,
additions, updates or modifications to, and any new versions of, the RLS
Licensed Technical Information other than the RLS Licensed Technical Information
Corrections, provided that RLS Licensed Software Upgrades and RLS Licensed
Software Corrections are not included in this definition. RLS Licensed Technical
Information Upgrades shall not include any software or other proprietary data
that a third party owns and that Teletrac is not authorized to disclose. RLS
Licensed Technical Information Upgrades that Teletrac provides to Licensee
during the term of this
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License Agreement shall be treated as RLS Licensed Technical Information for all
purposes under this License Agreement.
1.22 "RLS Location Unit" shall mean a radio transceiver and its antenna that is
capable of receiving and sending radio signals. A RLS Location Unit enables a
Radio Location System to locate the object to which such RLS Location Unit is
attached.
1.23 "RLS Map" shall mean the digitized map of the RLS Coverage Area that
Licensee will provide and use.
1.24 "RLS Network Control Center" shall mean the master station that serves a
RLS Coverage Area. The RLS Network Control Center consists of a group of
networked or interconnected computers, or both, that constitute the information
processing hub of the Radio Location System.
1.25 "RLS Receiver Sites" shall mean the receivers that gather Location Unit
radio signals. Each RLS Receiver Site consists of equipment and software
components that capture and convert transmitter and RLS Location Unit radio
signals to a computer usable level, and calculate and transmit to the RLS
Network Control Center information about the signals received.
1.26 "RLS Transmission Sites" shall mean the sites that receive location
requests from the RLS Network Control Center and transmit forward link signals
that prompt RLS Location Unit located in the RLS Coverage Area to send a
response radio signal to the RLS Receiver Sites.
1.27 "Spectrum License" shall mean a permit granted to Licensee or a Sublicensee
by the proper governmental authorities to use a radio spectrum of four (4) MHz
in the Territory.
1.28 "Territory" shall mean the countries described on Exhibit C. ---------
1.29 "Tier I Countries" shall mean those countries in the Territory designated
on Exhibit C as "Tier I Countries".
1.30 "U.S. CPI" shall mean the Consumer Price Index for Urban Wage Earners and
Clerical Workers published by the U.S. Department of Labor, Bureau of Labor
Statistics, U.S. City Average, "All Items," base year 1982-1984 = 100. If for
any reason the U.S. CPI is discontinued or does not exist, "U.S. CPI" shall mean
the official or replacement index published by the U.S. Department of Labor,
Bureau of Labor Statistics, or successor or similar governmental agency which is
most similar to the U.S. CPI. U.S. CPI dates shall mean the latest published
U.S. CPI.
2. Grant of Rights.
2.1 Radio Location System. As of the Effective Date, and subject to the terms
and conditions of this License Agreement, Teletrac grants to Licensee an
exclusive nontransferable right, except as may be permitted by Section 21.6,
solely within the Territory, to construct, use, maintain and provide support for
a Radio Location System, and to market, sell, promote, maintain and provide
support for RLS Customer Equipment and RLS Customer Services, and to provide RLS
Customer Maintenance. Teletrac shall not directly or indirectly operate a Radio
Location System in the Territory during the term of this License Agreement.
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2.2 RLS Licensed Software Executable Format and RLS Licensed Technical
Information. As of the Effective Date, and subject to the terms and conditions
of this License Agreement, Teletrac grants to Licensee an exclusive
nontransferable license to use RLS Licensed Software in executable format and
RLS Licensed Technical Information solely for the purpose of operating,
maintaining and providing support for a Radio Location System in the Territory.
Licensee may sublicense to RLS Customers the right to use RLS Customer
Workstation Licensed Software only in executable format and only on such RLS
Customers designated computer processing unit(s). Licensee agrees that neither
it nor its employees will use or copy RLS Licensed Software except as authorized
in this License Agreement. Other than the RLS Customer Workstation Licensed
Software in executable format, which Licensee may sublicense to RLS Customers,
Licensee may copy the RLS Licensed Software solely for its own use and solely in
connection with the performance of its obligations under this License Agreement.
2.3 RLS Customer Workstation Licensed Software Source Code. As of the Effective
Date, and subject to the terms and conditions of this License Agreement,
Teletrac grants to Licensee a non-exclusive, nontransferable license to use the
RLS Customer Workstation Licensed Software that Teletrac delivers to Licensee in
source code format, solely for the purpose of translating such software to the
native language of the countries in the Territory and otherwise adapting such
software for purposes of operating the Radio Location System in the Territory.
Licensee may copy the source code for the RLS Customer Workstation Licensed
Software solely for its own internal use for the purposes set forth in this
Section 2.3 and for the use of independent contractors that Licensee has engaged
to make the translations or adaptations authorized under this Section 2.3,
provided that such independent contractors shall execute a confidentiality
agreement in substantially the same form as the Nondisclosure Agreement referred
to in Section 16.4.1 below, and shall execute an agreement to assign to Licensee
all inventions made and work performed by the contractor in connection with the
RLS Customer Workstation Licensed Software. In addition, such contractors shall
not have any direct or indirect ownership interest in a land-based radio
location system or be in the business of providing or programming software for
any such system, other than the Radio Location System. Any other use or
disclosure of the Customer Workstation Licensed Software source code shall be
subject to Teletrac's prior written consent, which consent Teletrac may withhold
in its sole discretion. Teletrac shall have no obligation to provide RLS
Licensed Software Upgrades or RLS Licensed Technical Information Upgrades that
are compatible with Licensee's modifications to the RLS Customer Workstation
Licensed Software.
2.4 Registration of Patent and Copyrights. Each Party shall have the right in
the Territory to file and prosecute to issuance, at its own expense,
applications for letters patent and registrations of copyrights with respect to
all or any part of the RLS Licensed Software and RLS Licensed Technical
information, but in any such event the application or registration shall be in
the sole name of Teletrac and Teletrac shall be the sole owner of any such
letters patent or copyrights, subject only to the terms of this License
Agreement; provided, however, that before taking any action under this Section
2.4, Licensee shall notify Teletrac of its intention to do so, and Teletrac
shall have the right within sixty (60) days after receipt of such notice, at its
own expense, to take such action or any other action it deems necessary or which
may be lawfully available, in which event Licensee shall not proceed to take the
proposed actions set forth in its notice. Each Party will keep the other fully
informed of its activities with respect to the filing of patent applications or
registration of copyrights hereunder. In the event that the Party taking such
action determines
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not to take necessary measures to maintain any letters patent, patent
application, copyright or copyright registration, such Party shall notify the
other Party of such determination in writing and, thereafter, the other Party
shall have the right, at its own expense, to take such measures as may be deemed
advisable by it to maintain such rights and coverage; provided, however, that
the other Party shall not thereafter be obligated to maintain such coverage or
rights.
3. Reservation of Rights. Except as to those certain rights and licenses
expressly granted to Licensee under this License Agreement, Teletrac reserves
all proprietary rights, title and interest, including all ownership and
proprietary rights, in and to the Radio Location System, RLS Licensed Software,
RLS Licensed Technical Information and the "Teletrac" trade name, trademark and
service ▇▇▇▇, including all designs, inventions, patents, copyrights,
trademarks, service marks, trade secrets, know-how, techniques, engineering
details, enhancements, improvements, addition, upgrades, modifications,
derivative works. Licensee acknowledges that no title to the "Teletrac" marks,
RLS Licensed Software or RLS Licensed Technical Information, or any part
thereof, has been or will be transferred to Licensee. Neither Licensee nor any
Licensee affiliate will disassemble or recompile any RLS Licensed Software,
other than the RLS Customer Workstation Licensed Software solely for the
purposes set forth in Section 2.3 above.
4. Consideration.
4.1 Fees. In consideration for the grant of rights to Licensee in this License
Agreement, Licensee will perform the obligations set forth in this License
Agreement and will pay to Teletrac the following amounts:
4.1.1 Lump Sum Payment. In consideration for the execution and delivery of this
License Agreement by Teletrac, Licensee shall pay to Teletrac the sum of Two
Million Eight Hundred Thousand U.S. Dollars (U.S. $2,800,000.00) payable on the
Effective Date.
4.1.2 Annual Royalty. In addition, Licensee shall pay to Teletrac an annual
royalty (the "Annual Royalty"), payable quarterly, based upon the revenues
earned by Licensee from operating the Radio Location System in the Territory, as
follows:
(1) Equipment Royalty Interest. A fee equal to three per cent (3%) of RLS
Customer Equipment Revenue (the "Equipment Royalty Interest").
(2) Maintenance Royalty Interest. A fee equal to three per cent (3%) of RLS
Customer Maintenance Revenue (the "Maintenance Royalty Interest").
(3) Service Royalty Interest. A fee equal to three per cent (3%) of RLS Customer
Service Revenue (the "Services Royalty Interest, and together with the Equipment
Royalty Interest and Maintenance Royalty Interest, the "Royalty Interests").
4.1.3 Tier I Countries - Annual Royalty Wavier. Licensee's obligation to pay an
Annual Royalty on revenues received from the operation of the Radio Location
System in each Tier I Country shall not commence until the earliest to occur of
(i) the fifth anniversary of the issuance of the Spectrum License in such
country and (ii) the eighth anniversary of the Effective Date.
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4.2 Records and Adjustments. Licensee shall keep full, clear, separate and
accurate records, accounts and working papers with respect to RLS Customer
Equipment Revenue, RLS Maintenance Revenue, and RLS Customer Services Revenue
and calculation of Royalty Interests for at least four (4) years after the
termination of the calendar year to which they relate. Licensee shall use
accounting principles generally accepted in Israel ("Israeli GAAP") for all
records and accounts required under this License Agreement. Licensee shall
engage an independent accountant to conduct an annual audit of such records and
accounts. In addition, upon two (2) days notice to Licensee, Teletrac or its
agent shall have the right to examine during normal business hours all records
and accounts relating to the Royalty Interest and Licensee's performance under
this License Agreement, including, but not limited to, any auditors' work
records. Prompt adjustment shall be made by the proper party to compensate for
any errors or omissions disclosed by any such examination. If a special
examination or special audit requested by Teletrac discloses an under
calculation in excess of five percent (5%) of the amount payable to Teletrac,
then Licensee shall bear the cost of such examination, and shall promptly
correct the calculation of amounts payable and pay any underpaid amount, plus
all late payment charges due and owing. If such an examination or audit
discloses an overpayment to Teletrac, then Teletrac shall promptly repay to
Licensee the overpaid amount. Disagreements about accounting matters shall be
resolved as set forth in Section 20.4 below.
4.3 Reports, Forecasts and Payments.
4.3.1 Reports. Commencing on the date that Royalty Interests first begin to
accrue, Licensee shall provide to Teletrac within thirty (30) days after the end
of each calendar quarter ending on March 31, June 30, September 30 and December
31, financial information for the quarter that just ended and year-to-date
financial information (in accordance with the accounting requirements set forth
in Section 4.2 above), together with all working papers used to compile such
statements, that show the amount of and the basis for the calculation of the RLS
Customer Equipment Revenue, RLS Maintenance Revenue, RLS Customer Services
Revenue, and Royalty Interests and the number of activated Location Units and
RLS Customers. In all such reports, the amount of RLS Customer Equipment
Revenue, RLS Maintenance Revenue, RLS Customer Services Revenue, and Royalty
Interests and the number of activated Location Units and RLS Customers, shall be
reported in the aggregate and for each country in the Territory. All such
information and working papers shall be in English and shall be accompanied by a
letter from the independent accountant that Licensee has engaged as required
under Section 4.2 above confirming that such accountant has reviewed and agrees
that the method of computing the Royalty Interests complies with the
requirements of this License Agreement. Licensee also shall provide with its
quarterly financial statements its forecast of RLS Customer Equipment Revenue,
RLS Maintenance Revenue and RLS Customer Services Revenue for the next four (4)
quarters. Such statements, working papers and forecasts, together with all fees
due to Teletrac, shall be sent to Teletrac at its address specified in
accordance with Section 21.2 below.
4.3.2 Payments. All payments of Royalty Interests shall be made quarterly and
audited and adjusted annually. The audit shall be conducted by Licensee
independent accountant as set forth in Section 4.2 above. All payment shall be
due and payable thirty (30) days after the end of each calendar quarter in U.S.
dollars and any conversion to U.S. dollars shall be made as often as Licensee
makes such conversions for its own purposes and, in all cases, at least on the
last day, Monday through Friday, excluding Bank of Israel holidays, before the
payment is due, at the
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Representative Rate of Exchange determined by the Bank of Israel. Payments of
Royalty Interests shall be subject to deduction for Israeli withholding taxes
that apply to payments from Licensee to Teletrac. Licensee shall cooperate with
Teletrac in providing documentation that will assist Teletrac to obtain tax
credits with respect to such withholding.
4.4 Late Payments. Late payments of Annual Royalty Payments or of any other
amounts due under this License Agreement shall be subject to a late payment
charge calculated at an annual rate of eighteen percent (18%) commencing on the
date such payment or other amount was due and continuing until it has been paid
in full. If the amount of such charge exceeds the maximum charge permitted by
law, such charge shall be reduced to such maximum.
5. Radio System Location Equipment. Licensee acknowledges that Teletrac does not
manufacture or provide any of the equipment that will be needed in order to
construct and operate the Radio Location System in the Territory. Teletrac has
advised Licensee that Teletrac currently purchases most RLS Location Units and
RLS Receiver Site equipment for its operations in the United States from Tadiran
Telematics Ltd., a division of Tadiran Ltd., of ▇▇▇▇▇, ▇▇▇▇▇▇ ("Tadiran"). The
Parties acknowledge and agree that Licensee is free to purchase RLS Location
Units, RLS Receiver Site equipment, RLS Customer Workstations, RLS Network
Control Center Equipment and any and all other equipment and materials needed in
order to construct and operate the Radio Location System in the Territory from
any individual or entity that manufactures such equipment in accordance with the
technical and other specifications necessary to properly operate the Radio
Location System. Licensee acknowledges and agrees that Teletrac does not provide
any representation or warranty of any kind, express or implied, including,
without limitation, any implied warranty of merchantability or fitness for a
particular purpose on any equipment or materials obtained by License from any
third party, including Tadiran.
6. Term. This License Agreement shall commence on the Effective Date and shall
remain in effect until it is terminated in accordance with Section 7 below.
7. Termination. Neither Party shall be in breach of this License Agreement if
the License Agreement is terminated under Sections 7.1, 7.3, 7.4 or 7.5 below,
and the terminating Party shall not be in breach of this License Agreement if it
terminates this License Agreement under Sections 7.2 or 7.6 below.
7.1 This License Agreement may be terminated by mutual written agreement.
7.2 If either Party (a) is dissolved or liquidated or otherwise ceases to
operate as a going concern or ceases to operate a Radio Location System, and (b)
does not have a successor to its rights and obligations under this License
Agreement (the "Non-operational Party"), then, at any time within ninety (90)
days from the date that the other Party (the "Operational Party") learns of the
facts referred to in subsections (a) and (b) above, the Operational Party may
elect to terminate this License Agreement upon thirty (30) days' written notice
to the Non-operational Party. If Licensee elects to terminate this License
Agreement pursuant to this Section 7.2, then Licensee also may elect to continue
to operate the Radio Location System in the Territory pursuant to Section 9.1
below.
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7.3 Licensee may elect to cease operation of the Radio Location System at any
time and to terminate this License Agreement provided that it complies with the
provisions of Section 9.2 below.
7.4 Teletrac may elect to cease its Radio Location System business at any time
and to terminate this License Agreement provided that Licensee is allowed to
continue to operate its Radio Location System as set forth in Section 9.1.
7.5 Either party may terminate this License Agreement if:
(1) the other Party shall file a voluntary petition pursuant to Chapter 7 of the
United States Bankruptcy Code (the "Bankruptcy Code") or commence any other
proceeding for the liquidation of its business under the laws of any state or
nation governing insolvencies, liquidation, or other similar matters; or
(2) if a person shall file an involuntary petition against the other Party
pursuant to Chapter 7 of the Bankruptcy Code or commence any other proceeding
against such other Party for the liquidation of such Party's business and a
bankruptcy or other court, tribunal or body having jurisdiction shall, by final
order no longer subject to appeal, ajudge such other Party a bankrupt under
Chapter 7 of the Bankruptcy Code or such other law or order the liquidation of
the other Party's business; or
(3) if, pursuant to the order which shall become final and no longer subject to
appeal of a court having jurisdiction over the other Party, a receiver or
trustee, shall be appointed to liquidate the Party's business; or
(4) if the other Party shall, in fact, terminate all or substantially all of its
business;
provided, however, that notwithstanding anything in this License Agreement to
the contrary, a Party shall not be entitled to terminate this License Agreement
(i) because the other Party shall file or commence, or have filed or commenced
against it, any petition or proceeding for a reorganization of its business; or
(ii) because the other Party shall transfer to any person its business, assets
or operations, provided that the transferee shall agree to be bound by the terms
of this License Agreement.
7.6 Either Party may terminate this License Agreement by written notice to the
defaulting Party if any of the following occurs and the defaulting Party has
received written notice of the default and has failed to cure the default during
the cure period specified below.
7.6.1 A Party's failure to timely make any payment as required by this License
Agreement, and the failure to cure such default within sixty (60) days of its
receipt of written notice of such default during the first two such defaults, or
within thirty (30) days of its receipt of written notice of any payment default
after the first two events of late payment;
7.6.2 A Party's breach of one or more of its material obligations under this
License Agreement, and the breaching Party's failure to cure such breach within
sixty (60) days of its receipt of written notice of such breach; or
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7.6.3 An attempt to sell, transfer or assign a Party's rights or delegate its
duties under this License Agreement in violation of Section 21.6 of this License
Agreement, and the failure to cure such default within sixty (60) days of the
defaulting Party's receipt of written notice of such default.
provided, however, notwithstanding the foregoing, the License Agreement can not
be terminated pursuant to this Section 7.6 if the Parties are arbitrating a
dispute in good faith and the cure periods set forth herein have expired after a
final arbitration decision has been reached.
7.7 The rights granted to Licensee hereunder shall terminate on the eighth
anniversary of the Effective Date with respect to any country in the Territory
for which Licensee has not obtained a Spectrum License and is actively pursuing
establishment of a Radio Location System by such date, provided, however, that
if on such date Licensee has applied for and is actively pursuing a Spectrum
License in any such country, Licensee may obtain a reasonable extension of this
deadline in order to obtain the Spectrum License and establish a Radio Location
System in such country by paying Teletrac an extension fee in an amount to be
negotiated by the parties at such time.
8. Restrictions on Business Activities.
8.1 Except for the operation of the Radio Location System in the Territory
during the term of this License Agreement, and after the term of this License
Agreement as specifically set forth in Section 9.1 of this License Agreement,
during the term of this License Agreement and for a period of three (3) years
after termination of this License Agreement, neither Licensee nor any entity
that Licensee controls or has the ability to control:
8.1.1 Shall construct or operate or invest in any multi-lateration land based
radio location services designed to service the mass consumer or commercial
market anywhere in the world that is based or derived, in whole or in part, on
any confidential or proprietary information of Teletrac, including, without
limitation, the RLS Licensed Software and the RLS Licensed Technical
Information. For purposes of this Section 8.1, "radio location service" shall
mean any service which, within a defined geographic region that (a) uses time of
arrival radio measurements to locate an object and (b) has been designed
primarily for the purpose of determining an object's location.
8.1.2 Shall operate, invest in or acquire a direct or indirect ownership
interest in any entity that operates a business that competes or will compete,
directly or indirectly, with the Radio Location System operated by Licensee in
the Territory.
8.2 Teletrac shall not unreasonably withhold its consent to allow entities that
have previously provided services to Teletrac, and have entered into
confidentiality and nondisclosure agreements with Teletrac which prohibit such
entities and their employees from disclosing confidential or proprietary
information regarding Teletrac to third parties, to provide services to
Licensee, provided that any confidential or proprietary information of Teletrac
received by Licensee from such entities shall be subject to the provisions of
the Nondisclosure Agreement attached hereto as Exhibit D to the same extent as
if Licensee had received such information directly from Teletrac.
11
9. Effect of Termination or Cancellation.
9.1 Circumstances Where Operations Continue - Continued Rights. If, as set forth
in Section 7.2, 7.5 or 7.6.2, Licensee elects to terminate this License
Agreement, or as set forth in Section 7.4, Teletrac elects to terminate this
License Agreement, and Licensee elects to continue to operate the Radio Location
System in the Territory, then, solely for the purpose of such operations in the
Territory, Licensee may continue to use the RLS Licensed Software and RLS
Licensed Technical Information.
9.2 Circumstances Where Operations End -- Return of Materials and Non-Compete.
In all cases of termination or cancellation of this License Agreement (other
than where Licensee elects to terminate this License Agreement under Section
7.2, 7.5 or 7.6.2, or Teletrac elects to terminate this License Agreement under
Section 7.4, and Licensee elects to continue operation of the Radio Location
System in the Territory pursuant to Section 9.1 above), within sixty (60) days
after termination or cancellation of this License Agreement, Licensee shall
cease all use of RLS Licensed Software and RLS Licensed Technical Information.
In addition, Licensee shall, at Teletrac's request, return to Teletrac, or to
Teletrac's designee, all RLS Licensed Technical Information, RLS Licensed
Software, and all other data, software, warranty and maintenance information,
and other materials related to Radio Location Systems, and shall permanently
erase, including low-level re-format of fixed disk storage devices, and remove
from all computer, electronic or other storage devices in its possession or
under its control, or otherwise destroy, all images, copies or documents that
incorporate the RLS Licensed Software and RLS Licensed Technical Information.
Notwithstanding anything to be contrary in this License Agreement, Licensee
shall not be required to return RLS Customer Equipment that Licensee has
provided to RLS Customers, or executable format RLS Customer Workstation
Licensed Software that Licensee has licensed to third parties, in accordance
with the terms and conditions of this License Agreement.
9.3 No Damages. Neither Licensee nor Teletrac shall, by reason of the
termination or cancellation of this License Agreement in accordance with the
terms of this License Agreement, be liable to the other for compensation,
reimbursement or any damages, either actual, consequential, incidental, special
or punitive, arising out of such termination or cancellation, including, but not
limited to, the loss of prospective profits on anticipated sales, or on account
of expenditures, investments, leases or commitments in connection with the
business or goodwill of Teletrac or Licensee or otherwise anticipated under this
License Agreement.
9.4 Payment Obligations. Termination or cancellation of this License Agreement
shall not relieve Licensee of any obligation to pay Teletrac any amounts due and
owing to Teletrac under this License Agreement.
9.5 Survival. After the termination or cancellation of this License Agreement by
its terms, operation of law or otherwise, all rights, privileges and obligations
arising from this License Agreement shall cease to exist; provided, however the
confidentiality requirement in Section 16.4, the obligations and limitations in
Sections 3, 4.1 (to the extent amounts are past due), 4.2, 8, 9, 10.2, 10.3,
10.5, 11, 12, 13.2, 14, 16.6, 16.9, 19, 20 and 21, and such other obligations
which, from the context hereof, are intended to survive the termination of this
Agreement, shall remain in full force and effect.
12
10. Corrections, Upgrades and Newly Developed Equipment.
10.1 RLS Licensed Software Upgrades and Corrections; RLS Licensed Technical
Information Upgrades and Corrections.
10.1.1 RLS Licensed Software Upgrades. Licensee shall have the right to receive
any RLS Licensed Software Upgrades, at no charge, provided that Teletrac shall
have no obligation to provide Licensee any RLS Licensed Software Upgrades until
such upgrades have been installed on at least twenty-five percent (25%) of
Teletrac's Radio Location System operating in the United States. Licensee
acknowledges that Teletrac shall have no obligation to create RLS Licensed
Upgrades or to provide upgrades requested by Licensee.
10.1.2 RLS Licensed Software Corrections. During the term of this License
Agreement, Teletrac agrees that, within sixty (60) days after the release of any
RLS Licensed Software Corrections to at least fifty percent (50%) of Teletrac's
Radio Location System operating in the United States, Teletrac will deliver to
Licensee, at no charge, copies in executable format of such RLS Licensed
Software Corrections. Licensee acknowledges that Teletrac shall have no
obligation to create RLS Licensed Software Corrections or to provide corrections
requested by Licensee. Teletrac shall deliver all such corrections to Licensee's
Contract Technical Coordinator, together with a list of the corrections that
Teletrac is providing.
10.1.3 RLS Licensed Technical Information Upgrades. Licensee shall have the
right to receive any RLS Licensed Technical Information Upgrades at no charge,
provided that Teletrac shall have no obligation to provide any RLS Licensed
Technical Information Upgrades until such RLS Technical Modifications have been
installed on at least twenty-five (25%) of Teletrac's Radio Location System
operating in the United States. Licensee acknowledges that Teletrac shall have
no obligation to make RLS Licensed Technical Information Upgrades or to design
or implement RLS Licensed Technical Information Upgrades requested by Licensee.
10.1.4 RLS Licensed Technical Information Corrections. During the term of this
License Agreement Teletrac agrees that, within sixty (60) days after the release
of any RLS Licensed Technical Information Corrections to at least fifty percent
(50%) of Teletrac's Radio Location Systems operating in the United States,
Teletrac will deliver to Licensee, at no charge, copies of such RLS Licensed
Technical Information Corrections. Licensee acknowledges that Teletrac shall
have no obligation to make RLS Licensed Technical Information Corrections or to
design or implement RLS Licensed Technical Information Corrections requested by
Licensee. Teletrac shall deliver all such Corrections to Licensee's Contract
Technical Coordinator, together with a list of the corrections that Teletrac is
providing.
10.2 Upgrades and Modifications to the Radio Location System Developed by
Licensee; Newly Developed Equipment.
10.2.1 RLS Licensed Customer Workstation Software.
(1) Authority to Make Upgrades. Licensee may make upgrades, improvements,
additions, enhancements or modifications to RLS Customer Workstations Licensed
Software ("Licensee Workstation Software Upgrades"). Licensee shall notify the
Teletrac Technical Coordinator in
13
writing of the Licensee Workstation Software Upgrades within thirty (30) days
after Licensee commences work on them. Licensee acknowledges and assumes all
risks that Licensee Workstation Software Upgrades may affect the functionality
or operation of the RLS Licensed Software or Radio Location System, or both.
(2) Ownership and License of Upgrades. Licensee will be the sole owner of
Licensee Workstation Software Upgrades.
(a) Derivative Upgrades. As to those Licensee Workstation Software Upgrades that
are derived from or include any part the RLS Workstation Software or RLS
Licensed Technical Information, Licensee hereby grants to Teletrac a world-wide,
exclusive (except in the Territory, where such license shall be nonexclusive)
perpetual, royalty free, license to use, market, distribute, sublicense,
reproduce and have reproduced such Licensee Workstation Software Upgrades solely
for purposes of land-based radio location systems that locate animate or
inanimate objects, including people, and for ancillary activities such as data
messaging or voice messages. Such licenses shall not include any portion of the
Licensee Workstation Software Upgrades that is owned by a third party other than
any entity that Licensee controls or has the ability to control, and that
Licensee is not authorized to disclose. Licensee shall have no right, either
during or after the term of this License Agreement, to sell or disclose to third
parties, or to use, other than as part of the Radio Location System in the
Territory, Licensee Workstation Software Upgrades that are derived from or
include any part of the RLS Licensed Software or RLS Licensed Technical
Information. Licensee shall have no obligation to deliver Licensee Workstation
Software Upgrades to Teletrac until test versions of such Upgrades are
available.
(b) Stand-alone Upgrades. As to those Licensee Workstation Software Upgrades
that are neither derived from nor include any part of the RLS Workstation
Software or RLS Licensed Technical Information, Licensee hereby grants to
Teletrac a world-wide, nonexclusive, perpetual, royalty free, license to use,
market, distribute, sublicense, reproduce and have reproduced such Licensee
Workstation Software Upgrades solely for the purposes of land-based radio
location systems that locate animate or inanimate objects, including people, and
for ancillary activities such as data messaging or voice messages. Such licenses
shall not include any portion of the Licensee Workstation Software Upgrades that
is owned by a third party other than any entity that Licensee controls or has
the ability to control, and that Licensee is not authorized to disclose.
Teletrac shall have no right to sell or disclose stand-alone Licensee
Workstation Software Upgrades as a product independent from its provision of a
radio location service. Other than the limitations on business activities set
forth in Section 8 above, there shall be no restrictions on Licensee's rights
with respect to Licensee Workstation Software Upgrades that do not include and
are not derived from any of the RLS Licensed Software or RLS Licensed Technical
Information. Licensee shall have no obligation to deliver Licensee Workstation
Software Upgrades to Teletrac until test versions of such Upgrades are
available.
10.2.2 RLS Licensed Software Other Than RLS Licensed Customer Workstation
Software.
(1) Authority to Make Upgrades. Licensee may make upgrades, improvements,
additions, enhancements or modifications to RLS Licensed Software other than the
RLS Licensed Customer Workstation Software ("Licensee Executable Software
Upgrades"). Licensee shall notify the Teletrac Technical Coordinator in writing
of the Licensee Executable Software
14
Upgrades within thirty (30) days after License commences work on them. Licensee
acknowledges and assumes all risks that Licensee Executable Software Upgrades
may affect the functionality or operation of the RLS Licensed Software or Radio
Location System, or both.
(2) Ownership and License of Upgrades. Licensee will be the sole owner of
Licensee Executable Software Upgrades.
(a) Derivative Upgrades. As to those Licensee Executable Software Upgrades that
are derived from or include any part the RLS Licensed Software or RLS Licensed
Technical Information, Licensee hereby grants to Teletrac a world-wide,
exclusive (except in the Territory where such license shall be nonexclusive)
perpetual, royalty free, license to use, market, distribute, sublicense,
reproduce and have reproduced such Licensee Executable Software Upgrades solely
for purposes of land-based radio location systems that locate animate and
inanimate objects, including people, and for ancillary activities such as data
messaging or voice messages. Such licenses shall not include any portion of the
Licensee Executable Software Upgrades that is owned by a third party other than
any entity that Licensee controls or has the ability to control, and that
Licensee is not authorized to disclose. Licensee shall have no right, either
during or after the term of this License Agreement, to sell or disclose to third
parties, or to use, other than as part of the Radio Location System in the
Territory, Licensee Executable Software Upgrades that are derived from or
include any part of the RLS Licensed Software. Licensee shall have no obligation
to deliver Licensee Executable Software Upgrades to Teletrac until test versions
of such Upgrades are available.
(b) Stand-alone Upgrades. As to those Licensee Executable Software Upgrades that
are neither derived from nor include any part of the RLS Licensed Software or
RLS Licensed Technical Information, Licensee hereby grants to Teletrac a
world-wide, nonexclusive, perpetual, royalty free, license to use, market,
distribute, sublicense, reproduce and have reproduced such Licensee Executable
Software Upgrades solely for purposes of land-based radio location systems that
locate animate or inanimate objects, including people, and for ancillary
activities such as data messaging or voice messages. Such licenses shall not
include any portion of the Licensee Executable Software Upgrades that is owned
by a third party other than any entity that Licensee controls or has the ability
to control, and that Licensee is not authorized to disclose. Teletrac shall have
no right to sell or disclose stand-alone Licensee Executable Software Upgrades
as a product independent from its provision of a radio location service. Other
than the limitations on business activities set forth in Section 8 above, there
shall be no restrictions on Licensee's rights with respect to Licensee
Executable Software Upgrades that do not include and are not derived from any of
the RLS Licensed Software or RLS Licensed Technical Information. Licensee shall
have no obligation to deliver Licensee Executable Software Upgrades to Teletrac
until test versions of such Upgrades are available.
10.2.3 RLS Licensed Technical Information.
(1) Authority to Make Modifications. Licensee may make modifications, upgrades,
additions, enhancements and improvements to the RLS Licensed Technical
Information ("Licensee Technical Modifications"). Licensee shall notify the
Teletrac Technical Coordinator in writing of the Licensee Technical
Modifications within thirty (30) days after Licensee commences work on them.
Licensee acknowledges and assumes all risks that Licensee Technical
Modifications
15
may affect the functionality or operation of the RLS Licensed Software or Radio
Location System, or both.
(2) Ownership and License of Modifications. Licensee will be the sole owner of
Licensee Technical Modifications.
(a) Derivative Upgrades. As to those Licensee Technical Modifications that are
derived from or include any part of the RLS Licensed Technical Information,
Licensee hereby grants to Teletrac a world-wide, exclusive (except in the
Territory, where such license shall be nonexclusive), perpetual, royalty free,
license to use, market, distribute, sublicense, reproduce and have reproduced
such Licensee Technical Modifications solely for purposes of land-based radio
location systems that locate animate or inanimate objects, including people, and
for ancillary activities such as data messaging or voice messages. Such licenses
shall not include any portion of the Licensee Technical Modifications that is
owned by a third party other than any entity that Licensee controls or has the
ability to control, and that Licensee is not authorized to disclose. Licensee
shall have no right, either during or after the term of this License Agreement
to sell or disclose to third parties, or to use, other than as part of the Radio
Location System in the Territory, Licensee Technical Modifications that are
derived from or include any part of the RLS Licensed Technical Information.
Licensee shall have no obligation to deliver Licensee Technical Modifications to
Teletrac until test versions of such Modifications are available.
(b) Stand-alone Upgrades. As to those Licensee Technical Modifications that are
neither derived from nor include any part of the RLS Licensed Technical
Information, Licensee hereby grants to Teletrac a world-wide, nonexclusive,
perpetual, royalty free, license to use, market, distribute, sublicense,
reproduce and have reproduced such Licensee Technical Modifications solely for
purposes of land-based radio location systems that locate animate or inanimate
objects, including people, and of ancillary activities such as data messaging or
voice messages. Such licenses shall not include any portion of the Licensee
Technical Modifications that is owned by a third party other than any entity
that Licensee controls or has the ability to control, and that Licensee is not
authorized to disclose. Teletrac shall have no right to sell or disclose
stand-alone Licensee Technical Modifications as a product independent from its
provision of a radio location service. Other than the limitations on other
business activities set forth in Section 8 above, there shall be no restrictions
on Licensee's rights with respect to Licensee Technical Modifications that do
not include and are not derived from any of the RLS Licensed Technical
Information. Licensee shall have no obligation to deliver Licensee Technical
Modifications to Teletrac until test versions of such Modifications are
available.
10.2.4 Newly Developed Equipment. If Licensee develops equipment related to the
Radio Location System, Licensee shall not be required to disclose to Teletrac
the engineering and manufacturing specifications for the equipment, but Licensee
shall within sixty (60) days after the development thereof, notify and provide
to the Teletrac Technical Coordinator the performance specification and Radio
Location System interface information for such equipment, and shall offer to
Teletrac the opportunity to purchase such equipment at a reasonable price, which
shall be no higher than the lowest price at which Licensee sells such equipment
to third parties purchasing similar quantities.
16
10.3 Delivery; Licensee Assistance Concerning Upgrades and Modifications. As to
all Licensee Workstation Software Upgrades, Licensee Executable Software
Upgrades and Licensee Technical Modifications that Licensee delivers to Teletrac
under this Agreement, Licensee will deliver to Teletrac the software source code
and information concerning the source and authorship of delivered material and
inventions and copies of all printed or written materials related thereto.
Licensee agrees to make its engineering and production personnel reasonably
available, at Teletrac's cost, for consultation with Teletrac at Teletrac's
facilities in the United States of America, or at such other location selected
by Teletrac, in order to provide training, advice and assistance with respect to
the Licensee Workstation Software Upgrades, Licensee Executable Software
Upgrades and Licensee Technical Modifications.
10.4 Teletrac Obligations With Respect to Licensee Upgrades and Licensee
Modifications. Licensee's implementation of Upgrades and Modifications
authorized under Section 10.2 will not relieve Teletrac of its obligations under
this License Agreement. However, the Parties acknowledge and agree that Teletrac
will have no obligation to modify the RLS Licensed Software or RLS Licensed
Technical Information or to modify the training, support and warranty provisions
that it is obligated to provide under this License Agreement, to make them
compatible with the Licensee Workstation Software Upgrades, Licensee Executable
Software Upgrades or Licensee Technical Modifications.
10.5 Protection of Licensee Upgrades and Licensee Modifications. Licensee will
cooperate with Teletrac in taking such actions as Teletrac reasonably requests
for the purposes of filing, any where in the world, patent, copyright and other
intellectual property registration applications with respect to the Licensee
Workstation Software Upgrades, Licensee Executable Software Upgrades and
Licensee Technical Modifications. Such applications, shall, where applicable,
list Licensee as the author, owner or inventor. Nothing in this Section 10.5
shall limit Licensee's right to file or prosecute to issuance any such
applications with respect to the Licensee Workstation Software Upgrades,
Licensee Executable Software Upgrades or Licensee Technical Modifications, and
Licensee shall be free to file such applications, provided that (i) Licensee
notifies Teletrac in writing of such action prior to the time it is taken and
(ii) any such application by Licensee concerning rights that are derived from,
or include any part, of the RLS Licensed Software or RLS Licensed Technical
Information shall acknowledge and protect Teletrac's sole ownership of, and such
right's derivative use of, the RLS Licensed Software and/or RLS Licensed
Technical Information. Teletrac shall have the right, at its expense, but,
except as set forth in Section 11.2 below, no obligation, to bring, defend and
maintain any appropriate suit, action or proceeding involving the infringement
or misappropriation of the Licensee Workstation Software Upgrades, Licensee
Executable Software Upgrades or Licensee Technical Modifications. If Teletrac
finds it necessary to join Licensee in such suit, action or proceeding, Licensee
shall execute all papers and perform such other acts as may reasonably be
required and may, at its option and expense, be represented by counsel of its
choice. Should Teletrac lack standing to bring any such suit, action or
proceeding, then Licensee, at the request of Teletrac, shall do so, or, at
Teletrac's request, Licensee shall assign such rights and interest to Teletrac
as will enable Teletrac to gain such standing.
17
11. Teletrac Indemnity; Infringement Claims.
11.1 Indemnity. Subject to Sections 13.2 and 14 below, Teletrac will defend,
indemnify and hold harmless Licensee, and its directors, officers, employees and
agents, from and against any and all claims, demands, liabilities, actions,
suits, proceedings (including reasonable attorneys' fees) asserted by a third
party arising out of or relating to Teletrac's performance under or breach of
this License Agreement, and Teletrac agrees to undertake the cost of defending
the same, and will pay resulting costs and damages finally awarded, provided
that:
(1) Licensee promptly notifies Teletrac of the claim;
(2) Licensee cooperates with Teletrac in the defense, provided that Teletrac
reimburses Licensee for its seasonable out-of-pocket expenses (including
reasonable outside counsel legal fees) associated with such cooperation; and
(3) Teletrac has sole control of the defense and all related settlement
negotiations, using counsel reasonably satisfactory to Licensee.
11.2 Teletrac's Obligations Regarding Infringement Claims.
11.2.1 No Warranty; Licensee Due Diligence. Teletrac represents and warrants to
Licensee that as of the Effective Date it has not been notified of any claim
that Teletrac's use of the RLS Licensed Software and RLS Licensed Technical
Information in the United States violates the legally protected trade secret,
proprietary right or other interest of a third party, or infringes a patent,
copyright or other intellectual property right of a third party (a "Third Party
Infringement Claim"). Licensee acknowledges and agrees, however, that Teletrac
makes absolutely no representation or warranty regarding Third Party
Infringement Claims arising from Licensee's use of the RLS Licensed Software and
RLS Licensed Technical Information in the Territory. Teletrac strongly
encourages Licensee to conduct patent and copyright searches, and other
appropriate due diligence, in the Territory to ensure that Licensee's use of the
RLS Licensed Software and RLS Licensed Technical Information in the Territory
will not result in a Third Party Infringement Claim, prior to investing any
substantial funds in the construction of the Radio Location System in the
Territory. Licensee acknowledges and agrees that it is assuming all risk and
liability that a Third Party Infringement Claim may result from Licensee's use
of the RLS Licensed Software or RLS Licensed Technical Information in the
Territory.
11.2.2 Third Party Infringement Claims. If a Third Party Infringement Claim
occurs in the Territory with respect to one or more elements of the RLS Licensed
Technical Information or RLS Licensed Software, or in Teletrac's opinion is
likely to occur, Teletrac will use reasonable commercial efforts, at its option
and expense, either to challenge such Third Party Infringement Claim or
otherwise procure for Licensee the right to continue to use, maintain and
provide support for the Radio Location System, or to replace or modify the
alleged infringing element so that such element becomes non-infringing, provided
that such replacement or modification does not materially affect performance of
the Radio Location System. If Teletrac has spent, or anticipates that it will be
required to spend, more than U.S. $100,000 for such efforts, then Teletrac may
give Licensee a ninety (90) day option to pursue such efforts on its own and at
its own expense. If Licensee elects to pursue such efforts on its own, then
Licensee may deduct
18
from the Annual Royalty Payments due to Teletrac in the future, the reasonable
expenses Licensee has incurred in obtaining non-infringing elements, up to a
maximum amount of U.S.$250,000. If Licensee has not elected to pursue such
efforts on its own within such ninety (90) day option period, then Licensee must
notify Teletrac in writing either (i) that this License Agreement shall continue
in full force and effect without regard to such Third Party Infringement Claim
and without any reduction in the Annual Royalty Payment, or (ii) that Licensee
elects to terminate this License Agreement due to such Third Party Infringement
Claim, which shall be deemed to be a termination under Section 7.1. If the use
of any RLS Licensed Software or RLS Licensed Technical Information is enjoined
and the foregoing remedies cannot reasonably be accomplished, or if Licensee
elects to continue this License Agreement but fails to procure the right to use
the infringing element or to replace or modify the infringing element so that it
becomes non-infringing, then Teletrac may require the return of the infringing
RLS Licensed Software or RLS Licensed Technical Information, and Licensee's
right to use such RLS Licensed Software or RLS Licensed Technical Information
shall thereupon terminate. In no event shall Teletrac have any obligation to
repay or refund any amounts previously paid to it by Licensee.
11.2.3 Limitation on Teletrac's Obligations. Teletrac shall have no obligation,
and Licensee shall have no rights, under Section 11.2.2 if the Third Party
Infringement Claim: (a) could have been avoided by Licensee's use of the most
current, unaltered release of RLS Licensed Software or RLS Licensed Technical
Information; (b) resulted, in whole or in part, from a modification to the Radio
Location System made or owned by Licensee or by one or more of its affiliates;
(c) resulted, in whole or in part, from Licensee's use, sale or modification,
enhancement or improvement of RLS Location Units, RLS Customer Workstations, RLS
Network Control Center or any equipment, software or other items not obtained
from Teletrac; (d) resulted, in whole or in part, from Licensee's combination of
the RLS Licensed Software or RLS Licensed Technical Information with any other
software, equipment or technology; (e) resulted, in whole or in part, from
Licensee's Workstation Software Upgrades, Licensee Executable Software Upgrades
or Licensee Technical Information Upgrades; or (f) resulted, in whole or in
part, from Licensee's breach of its obligations under this Licensed Agreement.
11.2.4 Sole Remedy for Infringement Claims. The foregoing states the entire
obligation of Teletrac, and the sole remedies of Licensee, with respect to
infringement of patents, copyrights, trade secrets and other proprietary rights
or interests.
12. Licensee Indemnity. Licensee shall defend, indemnify and hold harmless
Teletrac, and its directors, officers, employees and agents from and against any
and all claims, demands, liabilities, actions, suits, proceedings or expenses
(including reasonable attorney's fees) asserted by a third party: (a) arising
out of or relating to Licensee's marketing, sale, use, design, construction,
manufacture, maintenance, repair, modification, upgrade, enhancement,
improvement or support of the Radio Location System in the Territory, or any
part thereof, including Licensee Workstation Software Upgrades, Licensee
Executable Software Upgrades or Licensee Technical Modifications, the RLS
Location Units, RLS Customer Workstations, RLS Network Control Center or any
equipment, software or other items not obtained from Teletrac, or any
combination thereof; or (b) arising out of or relating to Licensee's performance
under or breach of this License Agreement, and Licensee agrees to undertake the
cost of defending the same, and will pay resulting costs and damages finally
awarded, provided that:
19
(1) Teletrac promptly notifies Licensee of the claim;
(2) Teletrac cooperates with Licensee in the defense, provided that Licensee
reimburses Teletrac for its reasonable out-of-pocket expenses (including
reasonable outside counsel's legal fees) associated with such cooperation; and
(3) Licensee has sole control of the defense and all related settlement
negotiations, using counsel reasonably satisfactory to Teletrac.
13. Teletrac Representations and Disclaimer.
13.1 Exhibits. Teletrac represents that to the best of its knowledge the RLS
Licensed Software listed on Exhibit A and the RLS Licensed Technical Information
listed on Exhibit B to this License Agreement is all of the RLS Licensed
Software and all of the tangible RLS Licensed Technical Information that has
been released to at least fifty percent (50%) of Teletrac's U.S. Radio Location
Systems as of the date of this License Agreement. If Teletrac has omitted any
such software or information, upon discovery of such omissions, it will amend
Exhibits A and B and deliver such software or information to Licensee.
13.2 NO WARRANTY. EXCEPT AS PROVIDED IN SECTION 11.2.1, TELETRAC MAKES
ABSOLUTELY NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE RADIO LOCATION
SYSTEM OR ANY PART THEREOF, INCLUDING, BUT NOT LIMITED TO, THE RLS COMPONENTS,
RLS LICENSED SOFTWARE AND RLS LICENSED TECHNICAL INFORMATION. BY WAY OF EXAMPLE,
BUT NOT OF LIMITATION, TELETRAC MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR WARRANTY THAT THE RADIO LOCATION SYSTEM, OR ANY PART
THEREOF, IS ERROR-FREE OR THAT ITS USE WILL BE UNINTERRUPTED OR THAT ITS SALE OR
USE WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADE SECRET, TRADEMARK, SERVICE
▇▇▇▇ OR OTHER PROPRIETARY RIGHT OR THAT THE RADIO LOCATION SYSTEM WILL BE A
PROFITABLE ENTERPRISE FOR LICENSEE. LICENSEE ACKNOWLEDGES THAT IT HAS MADE AN
INDEPENDENT INVESTIGATION OF THE RADIO LOCATION SYSTEM BUSINESS THAT IT WILL
CONDUCT UNDER THIS LICENSE AGREEMENT. TELETRAC AND EACH OF ITS AFFILIATES
EXPRESSLY DISCLAIM THE MAKING OF, AND LICENSEE ACKNOWLEDGES THAT IT HAS NOT
RECEIVED OR RELIED UPON, ANY GUARANTEE OR REPRESENTATION, EXPRESS OR IMPLIED, AS
TO THE FEASIBILITY OF OPERATING A RADIO LOCATION SYSTEM IN THE TERRITORY, AS TO
LICENSEE'S ABILITY TO DESIGN, CONSTRUCT, OPERATE OR MAINTAIN A RADIO LOCATION
SYSTEM IN THE TERRITORY OR AS TO THE COSTS LICENSEE MAY INCUR OR THE REVENUES IT
MAY RECEIVE WITH RESPECT TO A RADIO LOCATION SYSTEM IN THE TERRITORY. LICENSEE
FURTHER ACKNOWLEDGES THAT IT HAS NO KNOWLEDGE OF ANY REPRESENTATIONS BY ANY
OFFICER, EMPLOYEE, OR AGENT OF TELETRAC THAT ARE CONTRARY TO THIS SECTION 13.2.
14. LIMITATION OF LIABILITY. OTHER THAN WITH RESPECT TO THIRD-PARTY DAMAGE
CLAIMS FOR WHICH THE PARTIES MAY BE OBLIGATED TO INDEMNIFY
20
EACH OTHER AS SET FORTH IN SECTIONS 11 AND 12 ABOVE, IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER FOR ANY DAMAGES OR FOR ANY LOST REVENUES, LOST
PROFITS, OR OTHER, INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES CAUSED, IN WHOLE OR IN PART, BY THE LICENSING, USE OR SALE OF THE RADIO
LOCATION SYSTEM OR ANY PART THEREOF, INCLUDING, BUT NOT LIMITED TO, RLS LICENSED
SOFTWARE AND RLS LICENSED TECHNICAL INFORMATION, OR OTHERWISE ARISING OUT OF OR
RELATING TO THIS LICENSE AGREEMENT. NOTHING IN THIS SECTION 14 SHALL RELIEVE
LICENSEE OF ANY OBLIGATION TO PAY TO TELETRAC AMOUNTS DUE AND OWING UNDER
SECTION 4 AND DEVELOPMENT, TRAINING AND SUPPORT CHARGES UNDER SECTION 15.3.
15. Obligations and Responsibilities of Teletrac. Teletrac will have the
following obligations and responsibilities in addition to those specified
elsewhere in this License Agreement:
15.1 Delivery of RLS Licensed Technical Information. Teletrac will deliver the
RLS Licensed Technical Information to Licensee, as applicable, during the
training sessions available pursuant to Section 15.3 below. Notwithstanding
anything to the contrary in this License Agreement, all deliveries of RLS
Licensed-Technical Information shall be subject to Teletrac's receipt of all
necessary export licenses and all required consents from third parties with
proprietary rights in such information, which Teletrac shall use reasonable
efforts to acquire. If there are delays in obtaining any such licenses or
consents, Teletrac will make partial deliveries of RLS Licensed Technical
Information, in accordance with the terms and conditions of this License
Agreement, to the extent feasible.
15.2 Delivery of RLS Licensed Software. Teletrac will deliver the components of
the RLS Licensed Software to Licensee, as and when needed by Licensee during the
design and construction of the Radio Location System and the Territory, within
thirty (30) days after receiving a written request therefor from Licensee.
Notwithstanding anything to the contrary in this License Agreement, all
deliveries of RLS Licensed Software shall be subject to Teletrac's receipt of
all necessary export licenses and all required consents from third parties with
proprietary rights in such software, which Teletrac shall use reasonable efforts
to acquire. If there are delays in obtaining any such licenses or consents,
Teletrac will make partial deliveries of RLS Licensed Software, in accordance
with the terms and conditions of this License Agreement, to the extent feasible.
15.3 Training and Support. Teletrac shall provide 50 hours of training and
support to Licensee as set forth in this Section 15.3. Licensee acknowledges and
agrees that Teletrac shall have an obligation to provide only the 50 hours of
training and support for Licensee and that any additional training or support
shall be provided at Teletrac's sole discretion, subject in all cases to the
availability of sufficient qualified personnel of Teletrac to provide such
services to Licensee. Notwithstanding any training or support provided to
Licensee hereunder, Teletrac shall have no responsibility or liability for the
design, construction, operation or maintenance of the Radio Location System.
15.3.1 Training. Licensee may request that Teletrac provide, at Licensee's cost
following the first 50 hours of training and support, the training courses set
forth below. The scope and subject
21
matter to be covered by each training course shall be determined by the mutual
agreement of the parties at least thirty (30) days in advance of the scheduled
date for the training course. All training courses shall be conducted in English
at Teletrac's facilities, or at such other location within the United States as
Teletrac may specify.
15.3.1.1 The training courses available to Licensee shall be:
(1) Technician Training Courses;
(2) Master Control Center Operator Training Course;
(3) RLS Customer Support Training Course; and
(4) RLS Customer Service Training Course.
15.3.1.2 Licensee shall provide Teletrac with at least ninety (90) days advance
notice of a requested date for a training course. If Teletrac is not able to
provide the training course, then Teletrac shall so notify Licensee.
15.3.1.3 At Licensee's request, Teletrac will prepare a non-binding estimate of
the cost for a particular training course each time it is to be provided.
15.3.1.4 Teletrac will ▇▇▇▇ Licensee monthly for the costs that Teletrac incurs
in preparing and providing each training course, each time it is provided. Such
costs shall include all of the out-of-pocket costs and expenses that Teletrac
incurs in preparing and providing such course, plus a rate of U.S. $125.00 per
person hour for time Teletrac employees or consultants spend preparing and
providing such course. Such rate shall be adjusted annually after the fast year
of this Agreement to reflect percentage changes in the U.S. CPI during the
preceding year.
15.3.1.5 Licensee shall be responsible for all travel arrangements, including
obtaining all visas that may be required, and shall pay all travel costs and
expenses, including transportation, meals, lodging and any per diem pay and
other salary and benefits arrangements, for Licensee's personnel in connection
with the training courses provided under this Section 15.3. As to training
courses provided at Teletrac facilities, Licensee acknowledges that its
employees participating in such training are not employees of Teletrac, and
Licensee will obtain such insurance coverage as Teletrac may reasonably request
for such Licensee employees, including, but not limited to, workers'
compensation insurance. Licensee shall provide Teletrac with a certificate of
such insurance that names Teletrac as an additional insured.
15.3.2 Telephone Support. Licensee may request that Teletrac provide, at
Licensee's cost, telephone support to Licensee. Licensee shall pay for such
telephone support at a rate of U.S. $125.00 per person hour, with such rate to
be adjusted annually after the first year of this Agreement to reflect
percentage changes in the U.S. CPI during the preceding year. In addition,
Licensee shall be responsible for placing and paying for all telephone calls
made in connection with telephone support to be provided under this Section.
15.3.3 Payments for Training and Support. Teletrac will ▇▇▇▇ Licensee monthly
for training and support provided under this Section 15.3, and Licensee's
payments will be due and payable in
22
U.S. dollars within thirty (30) days of receipt of the invoice. In the event
Teletrac pays overtime pay to its personnel providing such training and support,
Licensee's charges for such training and support shall be increased accordingly.
15.4 Completion of RLS Episode Software. Teletrac is obligated to finalize the
development of the RLS Episode Software by April 30, 1999. Teletrac acknowledges
that Licensee has informed Teletrac that completion of this development is vital
to Licensee's business prospects and failure to complete the work may have a
significant adverse effect on Licensee's business.
16. Obligations and Responsibilities of Licensee. Licensee will have the
following obligations and responsibilities in addition to those specified
elsewhere in this License Agreement.
16.1 Compliance With Laws; Enforceability. Licensee represents, warrants,
covenants and agrees with and to Teletrac that, during the term of this License
Agreement (and thereafter with respect to those provisions which survive the
termination of this License Agreement), this License Agreement, and all
agreements executed and delivered in connection herewith, and the performance by
both Parties of their respective obligations and duties under this Agreement and
such other agreements, will not violate any law, rule or regulation in effect in
the Territory. Licensee further represents, warrants, covenants and agrees with
and to Teletrac that, during the term of this License Agreement (and thereafter
with respect to those provisions which survive the termination of this License
Agreement), all of the provisions of this License Agreement are fully
enforceable under the laws in effect in the Territory and that each party can
fully and completely enforce the obligations, covenants, agreements and
restrictions of the other Party under this License Agreement.
16.2 Spectrum License. Prior to commencing the construction and operation of the
Radio Location System in the Territory, a Spectrum License shall be held by
Licensee or a sublicensee as permitted by this License Agreement, and Licensee
or the sublicensee will use reasonable efforts to expand the Spectrum License to
obtain approval for paging, data messaging and other activities via a land-based
radio location system.
16.3 Reasonable Diligence. Licensee shall use reasonable diligence, at its own
expense, to build, operate and maintain a Radio Location System in the Territory
and to promote, market, sell and support RLS Customer Equipment and RLS Customer
Services in the Territory.
16.4 Confidentiality and Proprietary Protection.
16.4.1 Confidentiality and Nondisclosure Agreement. Teletrac and Licensee shall
execute, and deliver, as part of this License Agreement, the Nondisclosure
Agreement that is attached as Exhibit D and incorporated by reference in this
License Agreement.
16.4.2 Proprietary Rights Reserved. It is expressly agreed that neither title to
the Radio Location System, nor title to any part thereof, including, but not
limited to the RLS Licensed Software and RLS Licensed Technical Information,
passes to Licensee. Licensee's license and right to use any part of the Radio
Location System is as set forth in this License Agreement, and Teletrac reserves
all proprietary rights in the Radio Location System. This reservation of
proprietary rights survives any termination of this License Agreement.
23
16.4.3 Copyright and Patent Registration and Notices. Licensee agrees not to
remove from view any copyright, trademark, confidentiality or other proprietary
notice, ▇▇▇▇, or legend appearing on any of the RLS Licensed Software, on output
generated by such software or on RLS Licensed Technical Information, and agrees
to reproduce and include the same on each copy of the RLS Licensed Technical
Information and RLS Licensed Software.
16.5 Insurance. Licensee agrees that at all times during the term of this
License Agreement it will maintain property and liability insurance in an amount
adequate to cover the value of and risks associated with the Radio Location
System in the Territory.
16.6 Teletrac Marks. The rights and licenses granted under this License
Agreement do not constitute a grant of any right or license to use Teletrac's
marks, including but not limited to the "Teletrac" trade name, trademark and
service ▇▇▇▇. Upon Teletrac's request, Licensee will cooperate with and, if
necessary, consent to, any registration by Teletrac or any of its affiliates of
the "Teletrac" ▇▇▇▇ in the Territory. Licensee and Licensee's affiliates are
estopped from challenging the validity of the Teletrac ▇▇▇▇ or from setting up
any claim adverse to Teletrac with respect to the Teletrac ▇▇▇▇, and any good
will arising with respect to such ▇▇▇▇ in the Territory shall inure solely to
the benefit of Teletrac.
16.7 Other Marks. Other than as set forth in Section 16.6 above, Licensee shall
be the sole owner of valid marks that Licensee uses to identify the Radio
Location System, or any part thereof.
16.8. Infringement by Others. Licensee agrees to inform Teletrac promptly of any
possible infringement of, or unfair competition affecting, the Radio Location
System in the Territory, including the RLS Licensed Software and RLS Licensed
Technical Information, that comes to the attention of Licensee. If Teletrac
decides to take action against any such possible infringement or act of unfair
competition, Licensee agrees to assist Teletrac, in whatever manner Teletrac may
direct, and, provided that neither Licensee nor one or more of its affiliates
is, in whole or part, responsible, directly or indirectly, for such
infringement, at the expense of Teletrac.
16.9 Restriction Regarding Reverse-Engineering. Licensee agrees that it will not
derive or attempt to derive the source code or structure of all or any portion
of the RLS Licensed Software by reverse engineering, disassembly, decompilation,
or any other means, and that it will not decompile, disassemble, reverse
engineer, port, translate, modify, copy, transfer, make derivative works of, or
otherwise use the RLS Licensed Software, except as expressly authorized by this
License Agreement.
17. Relationship of the Parties. The relationship of the parties established by
this License Agreement shall be that of independent contractors. Nothing in this
License Agreement shall be construed to create an agency, partnership, joint
venture or employment relationship between Licensee and Teletrac, nor to make
Licensee the agent of Teletrac, or Teletrac the agent of Licensee, for any
purpose. Neither party is granted authority by the other to undertake
commitments, transact business, create or assume any obligation (express or
implied) or otherwise act (or represent that it can act) in the other's name or
on the other's behalf.
24
18. Force Majeure. If the performance of either Party required by this License
Agreement (other than payment of amounts due under this License Agreement) is
prevented, restricted or delayed by fire, other casualty or accident, war or
violence or serious threat of the same, arrest or restraint of government,
requisition of vessel or aircraft, explosion, governmental request, guidance,
order or regulation, or any other circumstance beyond the reasonable control of
the Party and without such Party's fault or negligence, the affected Party, upon
giving due notice to the other Party, shall be excused from such performance,
but only to the extent directly attributable to the circumstance and the excused
party shall not be liable for loss or damage or failure of or delay in such
performance.
19. Governing Law. The governing law of this License Agreement shall be that of
the State of California, U.S.A., as if both parties hereto were resident and
doing business in such state.
20. Dispute Resolution.
20.1 Good Faith and Fair Dealing. The parties intend to carry out the provisions
of this License Agreement in accordance with principles of good faith and fair
dealing and to respect and observe the spirit as well as the letter of this
License Agreement. The parties shall exercise their best efforts to settle
between themselves in an amicable way any dispute which may arise out of or in
connection with this License Agreement.
20.2 Arbitration. Except as set forth in Sections 20.3 and 20.4 below, any
controversy or claim arising out of or relating to this License Agreement, or
the breach, termination or invalidity thereof, shall be settled by arbitration
in accordance with the rules and regulations of the American Arbitration
Association for resolving commercial disputes, as modified by this Section 20.2.
The number of arbitrators shall be three (3). The place of arbitration shall be
San Diego, California and the arbitration shall be conducted in English. The
arbitrators shall be bound by stare decisis, and the arbitral award shall be
final and binding, shall be rendered in writing and shall state the reasons for
the award. Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. The costs of arbitration, including the
cost of legal counsel, shall be awarded in the discretion of the arbitrators.
The arbitrators shall have the ability to grant all relief available at law and
in equity, to the extent permitted under this License Agreement.
20.3 Legal Proceedings. Either Party may elect to initiate litigation, rather
than arbitration, but only with respect to claims for nonpayment of the Annual
Royalty Payment (other than accounting disputes covered by Section 20.4), or for
specific performance or injunctive relief to enforce the terms of this agreement
or prevent a breach thereof. In particular, Licensee acknowledges that its
failure to comply with the provisions of this License Agreement concerning use
of the RLS Licensed Software, RLS Licensed Technical Information or Teletrac's
trade names, trademarks or service marks will result in immediate and
irreparable harm to Teletrac for which there is no adequate remedy at law.
Teletrac shall be entitled to bring an action or proceeding for specific
performance, injunctive relief, declaratory relief or other equitable relief to
compel Licensee to cease and desist all unauthorized use of the RLS Licensed
Software, RLS Licensed Technical Information or any trade name, trademark or
service ▇▇▇▇ of Teletrac, to require Licensee to perform its obligations with
respect to such software, technology and marks, and to obtain such other relief
as may be necessary and proper. Teletrac shall not be
25
required to post a bond in connection with any such proceeding. The Parties'
consent to the nonexclusive venue and jurisdiction of the state and federal
courts serving San Diego, California in any legal proceeding commenced pursuant
to this License Agreement.
20.4 Annual Royalty Payment Disputes. If the sole subject of a dispute under
this License Agreement concerns the manner of accounting for the Annual Royalty
Payment and the amount of royalties due to Teletrac, then such dispute shall be
settled by a mutually agreeable independent accountant (the "Neutral
Accountant"). Either Party may initiate resolution of an accounting dispute by
the Neutral Accountant by requesting a meeting with the Neutral Accountant, and
by sending at least forty-five (45) days' notice of such meeting to the other
Party. If the Parties are unable to agree on a Neutral Accountant within ten
(10) days of the date of such notice, then, within ten (10) days each Party
shall select one accountant (the "Party Accountant"). The Party Accountants
shall then select a Neutral Accountant within a further ten (10) days and
schedule the first meeting with the Neutral Accountant. If a Party fails to
select a Party Accountant, then the Neutral Accountant shall be the other
Party's Party Accountant. At least thirty (30) days prior to the first meeting
with the Neutral Accountant each Party may submit to the Neutral Accountant a
written explanation of the dispute, together with any relevant documents. Within
thirty (30) days after the meeting, the Neutral Accountant shall conduct an
audit of Licensee, if in the opinion of the Neutral Accountant such an audit is
necessary. Within sixty (60) days after the meeting, the Neutral Accountant
shall issue a decision on the accounting matter. The Neutral Accountant's
decision shall be final and binding, shall be rendered in writing and shall
state the reasons for the decision.
Judgment upon the decision rendered by the Neutral Accountant, and any costs to
be awarded as set forth below, may be entered in any court having jurisdiction
thereof. Each Party shall bear its own costs of the proceeding and the Parties
shall share equally the costs of the Neutral Accountant; provided, however, that
if the Neutral Accountant decides that Licensee's position has resulted or would
result in an under calculation or underpayment in excess of two (2) percent of
the amount owed, paid or to be paid to Teletrac, then Licensee shall be
responsible for Teletrac's costs of the proceeding, including reasonable legal
fees, and for the entire cost of the Neutral Accountant, and if the Neutral
Accountant decides that Teletrac's position has resulted or would result in an
overpayment to Teletrac that in excess of two percent (2%), then Teletrac shall
be responsible for Licensee's costs of the proceeding, including reasonable
legal fees, and for the entire cost of the Neutral Accountant. During all
proceedings under this Section 20.4, each Party shall continue timely payment of
all amounts owed to the other Party under this License Agreement.
21. General.
21.1 Designation of Contract Administrators and Contract Technical Coordinators.
Each party shall designate a Contract Administrator and Contract Technical
Coordinator within ten (10) business days of the Effective Date. If a Party
fails to make such designation, then that Party's Contract Administrator and
Technical Coordinator shall be the person designated by such Party in Section
21.2 below, or such other person as either Party may notify to the other from
time to time.
26
21.2 Notices. All notices under this License Agreement shall be in writing and
may be given by delivering the same by hand, or by sending the same by an
overnight courier that maintains verification of delivery, or by facsimile, to
the relevant person and address set out below or such other person and address
as either Party may notify to the other from time to time. Any such notice given
as set forth above shall be deemed to have been given or received at the time of
delivery (if delivered by hand) and upon verified receipt (if sent by post,
facsimile or overnight courier). In the case of facsimile, the transmission
report shall constitute the verified receipt. Each Party may, at any time,
change the persons or address to which its notices are to be sent by notifying
the other Party of such change in accordance with this Section 21.2.
Teletrac Licensee
-------- --------
Teletrac, Inc. Greenport Enterprises A.V.V.
3220 Executive Ridge Drive, Suite ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇ Boulevard 160
(▇▇▇) ▇▇▇-▇▇▇▇ (Tel) Oranjestad, Aruba
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
Attn: General Counsel Attn: General Manager
21.3 English Language. All communications, notices and records required to be
kept under and materials provided pursuant to this License Agreement shall be in
English.
21.4 No Publicity. Each Party agrees not to disclose the contents of this
License Agreement to anyone other than its employees and affiliates with a need
to know, without the prior written consent of the other Party. Consistent with
the requirements of law and any legal process, neither Party will issue any
press or news release, make any public disclosure with respect to the substance
of this License Agreement or the relationship of the Parties, or make any such
general disclosure to either Party's customers, or potential customers, without
the prior written approval of the other Party.
Notwithstanding the foregoing, if either Party is required, by any law or
regulation to which such Party is subject, to make any public disclosure
regarding this License Agreement, and it is impracticable to obtain written
approval of the other Party prior to making such disclosure, the Party may make
such disclosure without the other Party's approval, provided that the other
Party is provided with a copy of the news or press release or other disclosure
prior to or concurrently with the public disclosure of such information.
21.5 Scope and Amendment of License Agreement. The parties acknowledge that each
has read this License Agreement, understands it and agrees to be bound by its
terms. This License Agreement may be amended only by a subsequent writing that
specifically refers to this License Agreement and that is signed by both
Parties, and no other act, document, usage or custom shall be deemed to amend
this License Agreement.
21.6 Assignment. Neither Party may assign or delegate any of its rights, duties
or obligations under this License Agreement in whole or in part without the
other Party's written consent. Any attempt by either Party to assign or delegate
any rights, duties or obligations which arise under
27
this License Agreement, without the other Party's written consent, shall be
void. Teletrac may, however, upon notice to Licensee, assign or delegate, or
both, its rights, duties and obligations under this License Agreement to an
entity: (a) that Teletrac controls or has the ability to control, or that
controls or has the ability to control Teletrac and that receives and assumes
all of Teletrac's rights and obligations under this License Agreement; or (b)
that has purchased all or substantially all of the assets of Teletrac utilized
in connection with its Radio Location Systems, and receives and assumes all of
Teletrac's rights and obligations under this License Agreement, provided that,
in either case, the same entity provides engineering support to Radio Location
Systems located in the United States, and also will be available to provide to
Licensee the engineering support that Teletrac is required to provide under this
License Agreement. Notwithstanding the foregoing, Licensee may sublicense its
rights hereunder to another entity (a "Sublicensee") for the purpose of
permitting the Sublicensee to operate a Radio Location System hereunder in a
country in the Territory, provided that (i) the Sublicensee is an entity
organized and existing under the laws of, and authorized to operate a Radio
Location System under a Spectrum License in, such country, (ii) Licensee has an
equity ownership interest in the Sublicensee, (iii) if Licensee has less than a
twenty five percent (25%) equity ownership interest in the Sublicensee, Licensee
shall pay to Teletrac twenty percent (20%) of any "lump sum payment" (as defined
below) received from Sublicensee, (iv) the Sublicensee shall pay to Teletrac all
royalties due to Teletrac under this License Agreement with respect to revenues
received from the operation of the Radio Location System in the country and the
Licensee shall remain liable for such royalties in the event they are not
promptly paid by the Sublicensee, (v) the Sublicensee shall agree in writing to
comply with all of the terms and conditions of this License Agreement and that
Teletrac shall have the right to enforce its rights hereunder directly against
the Sublicensee as if the Sublicensee was the licensee hereunder, (vi) Licensee
shall provide Teletrac with copies of all agreements between Licensee and
Sublicensee, and any amendments thereto, and (vii) Licensee shall provide
Teletrac with detailed information regarding the Sublicensee and its principals
as reasonably requested by Teletrac. In the event any payment is made to
Teletrac pursuant to clause (iii) above, the royalty payments to be made to
Teletrac by Sublicensee pursuant to clause (iv) above shall be paid to Licensee
until such time as Licensee has been paid an amount equal to the amount received
by Teletrac pursuant to clause (iii) above. For the purposes of this Section,
"lump sum payment" shall mean any payment received from the Sublicensee, either
upon commencement of the sublicense or thereafter, which is not based on a
percentage of the Sublicensee's revenues or income, or the number of customers
of Sublicensee or RLS Location Units in service in the country.
Notwithstanding the foregoing, Licensee may assign all of his rights, duties or
obligations under this License Agreement, provided the assignment will take
place within ninety (90) days of the Effective Date and the assignee will be an
entity controlled by the Licensee. Licensee will be obligated to inform Teletrac
of the assignment within seven (7) days following the assignment. Upon
Licensee's request, Teletrac and the assignee will execute an identical Radio
System License Agreement with appropriate Exhibits and deliveries that shall
replace this License Agreement.
21.7 Binding Effect. This License Agreement shall be binding on and inure to the
benefit of the respective successors and permitted assigns of the parties.
28
21.8 Authority. Each of the respective persons executing this License Agreement
hereby covenants and warrants that such person has full legal power, right and
authority to bind the entity on whose behalf such person is signing to each and
every term and provision herein.
21.9 Severability. If any provision of this License Agreement shall be held
illegal or invalid by and court, this License Agreement shall be construed and
enforced as if such illegal or invalid provision had not been contained herein
and this License Agreement shall be deemed an agreement of the Parties to the
full extent permitted by law. If any provision shall be declared invalid or
unenforceable because of its breadth, scope or duration, such provision shall be
deemed modified to the extent necessary to make it valid and enforceable and
shall remain in full force and effect as so modified, or if not so modified,
shall be severable from the rest of this License Agreement.
21.10 Headings. All headings are for reference only and shall not be considered
in construing this License Agreement.
21.11 Expenses of Litigation. In case of litigation arising out of or in
connection with this License Agreement, the substantially prevailing Party shall
be entitled to recover its reasonable attorneys' fees, costs and expenses from
the other Party. In case of arbitration or Neutral Accountant proceedings, such
fees, costs and expenses shall be recovered asset forth in Sections 20.2 and
20.4 above.
21.12 Waiver. The failure of either Party at any time to require performance by
the other Party of any provision hereof shall in no way affect the full right to
require such performance at any time thereafter. Nor shall the waiver by either
party of a breach of any provision hereof be a waiver of any succeeding breach
of the same or any other such provisions or be a waiver of the provision itself.
21.13 Entire Agreement. This License Agreement together with its Exhibits and
the Nondisclosure Agreements constitute the entire agreement of the parties with
respect to the license of the RLS Licensed Software and RLS Licensed Technical
Information to Licensee and supersede any and all prior negotiations,
correspondence, understandings and agreements between the parties respecting the
subject matter of this License Agreement, and the full understanding of the
Parties is embraced herein.
21.14 Re-Export Assurances.
21.14.1 Licensee agrees to comply with the terms of the Export Administration
Act of 1979 (the "Act") of the United States of America, as amended, and the
rules and regulations promulgated thereunder, and any other law or regulation of
the United States of America which restricts, regulates or prohibits the export
or license of the RLS Licensed Software and RLS Licensed Technical Information,
or any portion thereof, or any other technical data relating to the Radio
Location System, now or hereafter in effect, Licensee agrees that it will not
knowingly, either directly or indirectly, export or re-export such technology or
products without the prior authorization of Teletrac and the United States
Office of Export Administration to Country Group P, Q, W, Y or Z, as defined in
the regulations, or to Afghanistan, or otherwise in violation of any requirement
or prohibition contained in the Act or such laws, rules and regulations.
29
21.14.2 Teletrac agrees that it will comply with-the terms of any export laws,
rules or regulations in the Territory with respect to the export of software and
technical data and components licensed to Teletrac under Section 10.2 above.
21.14.3 Licensee, hereby agrees to pay for all fees and expenses (including
reasonable attorney's fees) incurred by Teletrac in complying with the
provisions of Section 21.14.2 and in ensuring that Licensee has complied with
the provisions of Section 21.14.1.
21.15 Exhibits. The following are a part of this License Agreement:
Exhibit A - List of RLS Licensed Software
Exhibit B - List of RLS Licensed Technical Information
Exhibit C - Territory Description
Exhibit D - Nondisclosure Agreement
Exhibit E - Escrow Agreement
21.16 Construction of Agreement. This License Agreement has been negotiated by
the Parties and their respective attorneys and the language of this Agreement
shall not be construed for or against either party.
21.17 Counterparts. This License Agreement may be executed in counterparts, each
of which shall be an original as against any Party whose signature appears on
such counterpart and all of which together shall constitute one and the same
instrument.
21.18 Escrow of RLS Licensed Software. The parties agree to execute and deliver
the Escrow Agreement attached as Exhibit E and incorporated by reference in this
License Agreement on the Effective Date.
30
IN WITNESS WHEREOF, the Parties executed and delivered this License Agreement as
of the day and year first above written.
TELETRAC, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title CEO
Date: 12/21/99
GREENPORT ENTERPRISES A.V.V.
By
---------------------
Name
---------------------
Title
---------------------
Date:
---------------------
31
IN WITNESS WHEREOF, the Parties executed and delivered this License Agreement as
of the day and year first above written.
TELETRAC, INC.
By
---------------------
Name
---------------------
Title
---------------------
Date:
---------------------
GREENPORT ENTERPRISES A.V.V.
By /s/ Easi Sheratzky
------------------
Name Easi Sheratzky
Title Proxy Holder
Date: 22/12/99
32
EXHIBIT A
RLS LICENSED SOFTWARE
Component O/S Purpose
--------- --- -------
RXIF QNX4 Interface to Tadiran Receiver sites
TXIF QNX4 Interface to transmit sites using
Simulcast Paging Controller
SOLVR QNX4 Multilateration position determination
ITH QNX4 Inbound transmission handler
RMGR QNX4 Request Manager for user service requests
TP QNX4 Transaction Processor to capture
transaction data for billing
CAM QNX4 Customer Access Monitor for FD3.x access
lines
SCHED QNX4 Transmission Scheduler for Simulcast
Paging System
ASMGR QNX4 Process messages initiated from mobile
units
CAL QNX4 Calibrate receiver site timing
SF QNX4 Message store and forward services
Traccess QNX4 Dial in access for FD3.x protocol
Traccess II QNX4 TCP/IP Access for FDEE protocol
Mqueue QNX4 Message queuing between QNX tasks on same
LAN
QWIS QNX4 Message queuing between QNX tasks on same
WAN
SMC Server QNX4 Network management server
SMC Workstation NT4 Network management workstation
DBClient QNX4 Route database queries from QNX to WINDOWS
NT
Eventlogger QNX4 Performance analysis database capture
Eventlogger NT4 ODBC Interface to MS-SQL Server for
Eventlogger
WDBServer NT4 ODBC Interface to MS-SQL Server for
DBCLIENT
CAB NT4 Customer Access Bridge
CDPDMgr* NT4 CDPD Network Interface
CustomerDB SQL Customer database schema
EventLogStat SQL Eventlogger statistical database schema
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ Data entry for MS-SQL Server
Pasmdb W95 Performance analysis user interface
(MSACCESS)
* This component is required only for CDPD network access.
No later than April 30, 1999, Teletrac shall deliver certain additional software
for the management of Episode situations. The Episode software shall include:
33
Component O/S Purpose
--------- --- -------
EMSDatabase SQL Critical Event database schema
EMSAgent NT4 Notify operators of events
EMSIncipient NT4 Episode generator
EMSScheduler NT4 Schedule events to operator
EMSVerifier NT4 Customer Verification
EMSUser/GUI Services W95 Operator Graphical User Interface
▇▇▇▇▇▇▇ ▇▇▇ Episode location workstation
34
EXHIBIT B
RLS LICENSED TECHNICAL INFORMATION
A brief description of Teletrac's radio location system technical information
library is attached. The description sets out the format of the information as
being either HC (hard copy) EC (electronic copy or both. The assigned document
number is indicated as is the status on the current revision, if any. The title,
use description, author and other comments are also indicated.
35
EXHIBIT C
TERRITORY
EUROPE/ASIA
-----------
Poland*
Czech Republic*
Hungary*
Russia
SOUTH AMERICA
-------------
Argentina*
Bolivia
Brazil*
Chile
Colombia*
Ecuador
Guyana
Paraguay
Peru*
Suriname
Uruguay
Venezuela*
CENTRAL AMERICA
---------------
Costa Rica
El Salvador
Guatemala*
Honduras
Belize
Nicaragua
Panama*
Mexico*
* Designates Tier I Countries
36
EXHIBIT D
NONDISCLOSURE AGREEMENT
between
GREENPORT ENTERPRISES A.V.V
and
TELETRAC, INC.
THIS NONDISCLOSURE AGREEMENT ("Agreement") is entered into between GREENPORT
ENTERPRISES A.V.V, a company organized under the laws of Aruba ("Greenport"),
and Teletrac, Inc., a Delaware corporation ("Teletrac"). This Agreement shall be
effective on the Effective Date of the License Agreement, as defined in
Paragraph 1 below.
NOW, THEREFORE, it is hereby agreed as follows:
1. In connection with the exercise and implementation of those rights and
obligations set forth in that certain Radio Location System License Agreement
between Greenport and Teletrac, dated December ____, 1999 (the "License
Agreement"), which License Agreement pertains to the (i) licensing of certain
software and technical information to Greenport and (ii) development of a radio
location system in certain countries described therein (hereinafter the
"Project"), each party may disclose to the other certain confidential or
proprietary information (hereinafter "Information") which may include, but is
not limited to, (1) trade secrets, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blue prints, diagrams, flow
charts data computer programs, and other technical information; (2) certain
information and analyses concerning the relevant marketplaces; (3) certain
operations, data including internal marketing, sales information, customer
services, engineering and support services, financial data (including revenues,
overhead expenses, profitability, and other like financial information); and (4)
certain information regarding future product and technology plans as well as
market development plans and vendor information. Information shall include the
items in (1) through (4) that are provided by or are regarding the disclosing
company, its present or future divisions, parents, subsidiaries, and/or
affiliates.
2. With respect to Information to be disclosed in either oral or written form
pursuant to this Agreement or already disclosed in anticipation of this
Agreement, the recipient shall:
a. hold such Information in confidence, using the same degree of care the
recipient uses for its own information of the same materiality;
b. restrict disclosure of the Information solely to those of its employees and
employees of its present or future divisions, parents, subsidiaries, and
affiliates (hereinafter "employees") with a need to know, solely to advance the
Project, and not disclose it to any other third persons;
37
c. advise those employees of their binding obligations with respect to such
Information and take such measures to protect the confidentiality of such
Information as is commensurate with recipient's liability with regard to the
same; and
d. use the Information only as needed to advance the Project, except as may
otherwise be mutually agreed upon in writing, and in particular, will not employ
the Information in competition with the disclosing party nor will it use it in
any unlawful manner.
3. As part of recipient's obligations under Paragraph 2.c. above, (i) recipient
shall ensure that each of its employees, directly or indirectly involved in the
Project, executes a written nondisclosure agreement with recipient (in the form
attached hereto as Exhibit "A" for Greenport, and as Exhibit "B" for Teletrac)
prior to such employee's receipt of the Information; and (ii) recipient shall
provide to each such employee written notice of such employee's obligations
under the recipient/employee nondisclosure agreement with a specific reference
in such notice being made to the applicability of said nondisclosure agreement
to the Project.
If there is any violation of this Agreement by any current or former employee of
recipient, recipient shall immediately notify the other party and shall, at
recipient's sole cost and expense, pursue the enforcement of the
recipient/employee nondisclosure agreement against any such current or former
employee. The recipient shall be fully liable to the other party for any damages
caused to the other party as a result of the breach of a recipient/employee
nondisclosure agreement by a current or former employer of recipient, provided
that recipient's negligence contributed to the breach by the current or former
employee.
4. The recipient of Information shall not copy, reproduce, or reverse engineer
any hardware, computer program, tape, disk, or other Information which may be
provided pursuant to this Agreement other than as expressly authorized in the
License Agreement.
5. The recipient of Information under this Agreement shall have no obligation to
preserve the confidential or proprietary nature of any Information which:
a. was previously known to the recipient free of any obligation to keep it
confidential/proprietary; or
b. is disclosed to third persons by the disclosing party without restriction; or
c. is or becomes publicly available by other than unauthorized disclosure; or
d. is independently developed by the recipient, except when such development is
prohibited by the terms of the License Agreement.
6. Nothing contained herein shall be construed to preclude the recipient from
disclosing any Information pursuant to a lawful subpoena or other civil process
having the compulsion of law, except that in such case the recipient shall
promptly notify the disclosing party prior to such disclosure or submission so
that it may appear and defend its interests in a timely manner.
7. The Information shall be deemed the property of the party which provides it,
and unless the recipient is permitted by the License Agreement to retain said
Information, the recipient shall,
38
upon request, promptly return to the providing party all Information in its
possession that is in a tangible form and will not retain copies, extracts,
plans, schematics, or other reproductions in whole or in part of such
Information. Unless based on Information that may be retained by recipient
pursuant to the License Agreement, all documents, memoranda, notes, and other
writings whatsoever prepared by the recipient based on the Information shall be
destroyed and such destruction shall be certified in writing to the providing
party by an authorized officer supervising such destruction.
8. Nothing contained in this Agreement shall be construed as granting or
conferring any rights by license or otherwise in any Information disclosed to
either party.
9. All Information disclosed in the course of the Project will be provided under
the terms of the License Agreement. Each party agrees that all remedies and
damages that might otherwise be available to a party for claims arising out of
or related to this Agreement or to the use of the Information shall be subject
to the limitations set forth in the License Agreement, including, but not
limited to the limitation of liability set forth in Section 14 of the License
Agreement.
10. Information provided to either party hereunder does not, and is not intended
to, represent a commitment by the other party to license, purchase, or sell any
products or services or enter into a business relationship. If any party desires
to pursue business opportunities stemming herefrom, the parties will execute a
separate written agreement to govern such business relationship.
11. Section 18, 20.1.2, 20.3 through 20.11, 20.13, 20.15, 20.16, and the
applicable dispute resolution provisions of Section 19 of the License Agreement
are hereby incorporated by reference in this Agreement, and all references to
the "License Agreement" in such Sections shall be deemed to be references to
this "Agreement" for purposes of this Agreement.
12. This Agreement, together with the License Agreement, constitutes the entire
agreement of the parties with respect to the matters that are the subject of
this Agreement and supersede any and all prior negotiations, correspondence,
understandings, and agreements between the parties with respect to the subject
matter of this Agreement.
13. This Agreement shall continue until termination of the License Agreement;
provided however, that all obligations hereunder with respect to Information
received prior to termination of cancellation shall survive the termination or
cancellation of this Agreement for a period of five (5) years from such
termination or cancellation.
14. This Nondisclosure Agreement may be executed in counterparts, each of which
shall be an original as against any Party whose signature appears on such
counterpart and all of which together shall constitute one and the same
instrument.
39
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their respective duly authorized representatives.
GREENPORT ENTERPRISES A.V.V
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
Date:
------------------------------------------------
TELETRAC, INC.
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
Date:
------------------------------------------------
40
EXHIBIT A
GREENPORT EMPLOYEE NONDISCLOSURE AGREEMENT
UNDERTAKING CONCERNING CONFIDENTIALITY
I, the undersigned, _________________, I.D. _________________ of
__________________ ______________ hereby covenant towards GREENPORT ENTERPRISES
A.V.V and towards any corporation controlled by it (hereinafter "Greenport") as
follows:
1. To keep absolutely secret, and, during the period of my employment and/or the
provision by me of services to Greenport as well as subsequent thereto, to not
disclose and not convey at any time whatsoever -- to any person and/or body
whatsoever, any information, knowledge and confidential documents concerning
Greenport's plans and/or activities, and/or manufacturing procedures used
therein, and/or concerning its products and/or the development thereof and/or
any defense, commercial or industrial information owned by it and/or any
professional secret whatsoever (all the foregoing being hereinafter referred to
as the "Information"), coming to my knowledge, directly and/or indirectly,
during the course of and in consequence of my employment and/or the provision of
my services to Greenport.
2. Not to make any use of and not to convey the Information and/or any part
thereof in any form and manner either personally or through others, directly or
indirectly, at any time, and, not to make use of nor convey all or any of the
Information now and/or hereafter reaching my knowledge in the circumstances
detailed above, without receiving the prior written consent of Greenport
thereto. In the event I wish to use the Information or any part thereof, I shall
apply Greenport with a request to grant me permission to do so in consideration
of such payment and on the terms as shall be agreed upon between us in writing.
Nothing herein contained shall affect my obligations under paragraph 6 hereof.
3. Not, after my employment and/or the performance of my task and/or providing
the services provided by me to Greenport have been completed, to keep in my
possession any document, instrument or item given to me and/or which has reached
me by reason of my employment, performance of such task and/or provision of my
services to Greenport.
4. a. I have read the section annexed hereto taken from the Penal Law Revision
(State Security, Foreign Relations and Official Secrets) Law, 3717-1957
(hereinafter "the Law") from which my obligation to keep information and secrets
connected with the security of the State and reaching me either in writing or
orally following the performance of my function is clear to me, and to refrain
from conveying the same to the knowledge of any unauthorized person and/or body
unless and to the extent that the performance of my task with which I am charged
obliges me to do.
b. It is clear to me that if I fail to obey all or any of the provisions of the
Law, I shall be liable to prosecution and to the penalties prescribed in the
Law.
5. I am aware that the breach of my obligations under this Affidavit will cause
damage to Greenport and which shall be entitled to obtain any legal remedy
against me including for damages and compensation.
41
6. As an integral part of these obligations by me to keep the Information
absolutely secretly, I hereby undertake not, for a period of two years at least
after the completion of my employment at Greenport, to work in those enterprises
in Aruba which engage in the manufacture of products of the type in which I
engage in Greenport and which are in competition with Greenport.
7. I hereby confirm that I have read and understood the contents of this
Undertaking.
Date
---------------------------------------
Signature
----------------------------------
42
EXHIBIT B
TELETRAC EMPLOYEE NONCOMPETITION AGREEMENT
CONFIDENTIALITY AND INVENTIONS AGREEMENT
In consideration of your employment by Teletrac, Inc., its affiliates,
successors, or assigns (collectively referred to herein as the "Company"), or
your being retained on a temporary basis to do work on behalf of the Company,
either as an independent contractor or as an agency employee on assignment at
the Company, you hereby enter into the following Confidentiality and Inventions
Agreement (the "Agreement").
1. Confidentiality.
(a) Confidential Information. You agree that the Company's business and success
depend upon the development, use and protection of confidential and proprietary
information (hereinafter referred to as "Confidential Information"), including,
but not limited to, information relating to (i) the Company's trade secrets,
products, equipment, inventions, discoveries, ideas, designs, processes,
research, manufacturing techniques, production methods, technical, professional
or scientific know-how, drawings, sketches, layouts, formulas, specifications,
reports, software systems and processes, customer, vender or supplier lists,
addresses, telephone numbers, contact persons, product or pricing information,
methods of doing business or the like, (ii) information that is classified for
purposes of national security, (iii) information that is the property of a
client or any other person or entity that has a business relationship with the
Company, (iv) information that is designated by the Company as "Limited",
"Private" or "Confidential" or similarly designated, (v) marketing research and
the Company's corporate and financial structure and operations and (vi)
communications by or to attorneys (including attorney-client privileged
communications) and memos and other material prepared by attorneys or under
their direction (including attorney work product).
(b) Non-Disclosure. You acknowledge that the Confidential information is secret,
confidential and proprietary to the Company and will be (or has been) disclosed
to you or obtained, discovered, created or developed by you in confidence and
trust for the sole purpose of using the same for the sole benefit of the Company
and its customers. You agree to hold such Confidential Information in the
strictest confidence in accordance with the provisions of this Agreement, and
agree not to take or use for your own purposes or for the purposes of others, or
to disclose or permit to be disclosed to any other person or entity for its own
use or the use of any other persons or entities, any of the Confidential
Information either during your employment or after the termination of your
employment (whether voluntary or involuntary), except as authorized in writing
by the Company.
(c) Confidential Materials. You agree that all records, books, documents,
materials and other media containing or relating to the Confidential
Information, or any copy thereof (the "Confidential Materials") are and will
remain the Company's sole and exclusive property and that you will make no
copies of them except as required in the course of your employment by the
Company. You agree to deliver immediately to the Company all property belonging
to the Company, including Confidential Materials, in your possession or control
in the event of the termination of your employment, whether voluntary or
involuntary.
43
2. Inventions and Discoveries.
(a) Disclosure of Inventions and Discoveries; Grant of Rights to the Company.
You agree, without further consideration other than reimbursement of expenses to
the extent hereinafter provided, to disclose in writing and assign to the
Company, and hereby grant to the Company the sole and exclusive ownership of,
including the sole and exclusive right to reproduce, use, or disclose for any
purpose, all right, title and interest in all ideas, designs, improvements,
works of authorship, inventions and discoveries (including, without limitation,
all reports, drawings, blueprints, data, software, writings, technical
information or discoveries devised or conceived by you or by you jointly with
others during any past, current or future employment with the Company), whether
or not such inventions or discoveries are patentable or protectable by
copyright, which relate at the time of conception or reduction to practice of
the invention, to the Company's business or to actual or demonstrably
anticipated research of the Company ("Inventions and Discoveries").
(b) Certain Inventions Excluded. The term "Inventions and Discoveries" does not
include any ideas, designs, improvements, work of authorship, inventions or
discoveries for which no equipment, supplies, facility or Confidential
Information or Confidential Materials was used and which was developed entirely
on your own time, and which neither (a) relates to the business of the Company
or to the Company's actual or demonstrably anticipated research or development,
nor (b) results from any work you performed for the Company. In addition, the
provisions of this Section 2 do not apply to the list of patented or unpatented,
copyrighted or copyrightable inventions owned or controlled or conceived by you
on the date of your entering employment, which inventions (including a
description of any documents relating to the same or evidencing your rights
therein) are specified on Exhibit A annexed hereto. If no such Exhibit is
attached to this Agreement, you represent that no such inventions have been made
by you on or prior to the date of this Agreement.
(c) Company Property. You acknowledge that all Inventions and Discoveries are
the sole and exclusive property of the Company and that you are required to
disclose in writing and assign to the Company all Inventions and Discoveries.
All Inventions and Discoveries are the Company's property whether or not they
are disclosed.
(d) Assignments. You agree to execute, acknowledge and deliver assignments,
affidavits and other instruments prepared by the Company or its nominee and do
such other things as will assist the Company or its nominee in obtaining, for
the benefit of the Company or its nominee, ownership rights in Inventions and
Discoveries (including, without limitation, patents or copyrights relating to
Inventions and Discoveries) during the term of your employment and after
termination of your employment (whether voluntary or involuntary). The expenses
for which the Company or its nominee shall be obligated to reimburse you shall
be limited to mailing charges and notary fees and to such payments to others
that the Company or its nominee have given prior written authorization. You
hereby irrevocably designate and appoint the Company and it's duly authorized
officers and agents as your agents and attorney-in-fact to act for and on your
behalf to execute any applications and documents required to obtain, renew or
enforce copyrights, mask work rights, or patents for the Inventions and
Discoveries.
44
3. Conflicting Agreements.
You have not entered into any assignment of inventions, confidentiality, or
similar agreement other than those specified in Exhibit B annexed hereto (copies
of which have been provided to the Company). You represent that your performance
of all the terms of this Agreement and that your employment by the Company does
not and will not breach any agreement to keep in confidence proprietary
information acquired by you in confidence or trust prior to your employment to
the Company. You have not brought and will not bring with you to the Company or
use in performance of your responsibilities at the Company any equipment,
supplies, or trade secret information of any former employer, which are not
generally available to the public, unless you have obtained written
authorization for their possession and use.
4. Non-competition During Employment.
You understand that the Company expects you to devote your full energies,
efforts, and abilities to your employment with the Company. During your
employment you shall not, without the express written consent of the Company,
either as an independent contractor, employee, employer, consultant, agent,
principal, partner, stockholder (holding shares representing more than ten
percent of the voting control of a corporation), corporate officer, director, or
in any other individual or representative capacity, engage or participate in any
business that is in competition in any manner whatsoever with the business of
the Company.
5. Unfair Competition, Non-Solicitation
(a) Unfair Competition. You acknowledge and agree that the names and addresses
of the Company's customers constitute Confidential Information and that the sale
or unauthorized use or disclosure, either during or after the termination of
your employment (whether voluntary or involuntary), of any of the Confidential
Information that you obtained during the course of your employment will
constitute unfair competition. You agree not to engage in any unfair competition
with the Company.
(b) Non-Solicitation. You agree that you will not, for a period of two years
immediately following the termination of your employment, whether voluntary or
involuntary, directly or indirectly, either (i) recommend that a competitor of
the Company solicit for employment (or solicit for employment on behalf of a
competitor of the Company) any employee of the Company or (ii) call on or
solicit, or attempt to call on or solicit, any of the Company's customers with
whom you become acquainted during the course of your employment by the Company
in order to offer such customers products or services that compete with products
or services being sold to such customers by the Company.
6. General Provisions.
(a) Breaches. You acknowledge that your failure to adhere to the terms of this
Agreement will cause the Company irreparable damage for which the monetary
damages alone would be inadequate compensation. If there is a breach or
threatened breach of any provision of this Agreement, you agree that the Company
is entitled to injunctive relief without posting a bond or other security, in
addition to all other remedies. If any legal action is brought to enforce the
45
terms of this Agreement, the prevailing party shall be entitled to recover
reasonable attorney's fees from the other party, in addition to any other relief
to which the prevailing party may be entitled.
(b) Changes. All changes to this Agreement will be effective only if they are in
writing and signed by you and the Company's Chief Executive Officer.
(c) Governing Law. This Agreement shall be governed by the laws of the State in
which you are employed without regard to the choice of law provisions thereof.
(d) Entire Agreement. This Agreement is our entire agreement and understanding
and superseded all other agreements, whether written, oral express or implied
concerning the subject matter of this Agreement. Neither you nor the Company has
made any representation to the other relating to the matters covered by this
Agreement that are not set forth in this Agreement. No waiver by you or the
Company of any failure to perform any obligation under this Agreement shall
constitute a waiver of further obligations.
(e) Severability. If any provision of this Agreement is held to be invalid,
illegal or unenforceable, all other provisions, sections or parts of this
Agreement that can be effective without such invalid, illegal or unenforceable
provision shall, nevertheless, remain in full force and effect to the extent
permitted by law of the state in which you are employed.
(f) Binding Effect; Assignment. This Agreement shall be binding upon you, your
heirs, executors and administrators, and shall inure to the benefit of the
Company, its successors and assigns. This Agreement (i) shall not be assignable
by you without the Company's prior written consent and (ii) may be assigned by
the Company without your consent to any successor in interest to substantially
all of the assets or business of the Company (whether by merger, sale of stock
or assets or otherwise.)
(g) Review. You agree that you have had a full opportunity to discuss the terms
and conditions of this Agreement, that you have had the opportunity to review
and analyze this Agreement, that you have been advised to have independent
counsel to do so, that you fully and completely understand all of the terms and
conditions of this Agreement and that you are signing this Agreement
voluntarily, freely and knowingly.
46
(h) Effective Date. This Agreement shall be effective as of the first day of
your employment with the Company.
ACCEPTED AND AGREED Very truly yours
TELETRAC, INC.
By:
-------------------------------------------- -----------------------------
Print employee name
Title:
-------------------------------------------- --------------------------
/
--------------------------------------------
Signature Date Dated:
--------------------------
47
ASSIGNMENT
Pursuant to the Radio Location System License Agreement dated December 21, 1999
(the "Agreement") by and between Teletrac, Inc., a Delaware corporation
("Teletrac"), and Greenport Enterprise A.V.V. ("Licensee") and to the Software
Sub-License Agreement dated December 20, 1999 by and between Licensee and ▇▇▇▇▇
▇▇▇▇▇ B.V. (the "Sub Licensee"), a corporation organized under the laws of the
Netherlands (the "Sub License Agreement") and to the Royalties Agreement dated
January 1, 2002 by and between Licensee and Ituran Location and Controls, ltd.
("Ituran"), a company organized under the laws of Israel (the "Royalties
Agreement"), Licensee desires to assign, transfer and convey to Ituran NY Corp
("Assignee"), a company organized under the laws of Delaware and an __________
affiliate of Licensee and wholly-owned subsidiary of Ituran, all of Licensee's
rights under the Agreement and the Sub License Agreement and the Royalties
Agreement (the "Assignment").
NOW THEREFORE, in consideration of the mutual promises contained in the
Agreement and in this Assignment and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, Licensee, for itself and its successors and assigns, does
hereby assign to Assignee all of the rights, title and interest in, to and under
the Agreement.
IN WITNESS WHEREOF, Licensee has caused this Assignment to be executed by its
duly-authorized officer on January 1st, 2002.
In consideration for the above assignment, Assignee shall pay Licensee the sum
of USD 2,800,000, equal to the sum paid by Licensee to Teletrac pursuant to that
Agreement. The above payment can be made by remaining Licensee obligations to
third parties equal to the consideration mentioned above, therefor The above
payment shall be made directly to Ituran - transfer of _______________ at the
same amount.
/s/ ▇▇▇ ▇▇▇▇▇▇
--------------
48
Without derogating from the above, Assignee shall be entitled to any rights and
payments paid to Licensee by Sub Licensee, pursuant to the Sub License
Agreement.
GREENPORT ENTERPRISES, A.V.V.
By: /s/ [illegible]
---------------
Name: Karo Trust International N.V.
Title: Managing Director
ITURAN NY CORP.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
--------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: C.E.O.
ITURAN __________ B.V.
By: /s/ [illegible]
---------------
Name:
Title:
ITURAN LOCATION AND CONTROL LTD.
By: /s/ [illegible]
---------------
Name:
Title
49
