[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Exhibit 10.1
VLU PRODUCTION AGREEMENT
This VLU Production Agreement (the "Agreement") is made as of September 6, 1996
(the "Effective Date") by and between Tadiran Ltd., a company duly organized and
existing under the laws of Israel, through its Telematics Division ("Seller" or
"Tadiran"), and Teletrac Inc., a corporation registered in Delaware ("Buyer" or
"Teletrac") (jointly - the "Parties").
THE PARTIES THEREFORE AGREE AS FOLLOWS
1. AGREEMENT TO PURCHASE AND SELL
Within the term of this Agreement (two years from the date hereof), Buyer
shall purchase from Seller, and Seller shall sell to Buyer [****] [****]
Vehicle Location Units ("VLUs"). The Parties hereby acknowledge that
[****] [****] VLUs ordered on February 26, 1996 (purchase order number
[****]) ("the [****] Order") is included in the above [****] VLUs and this
Agreement shall apply to the [****] VLUs in full, including the [****]
Order. Within 7 days hereof Teletrac shall issue a purchase order for the
additional [****] ([****]) VLUS.
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
2. UNIT SPECIFICATIONS AND CHANGES
2.1 The VLUs shall fully comply with the VLU technical specifications, as
set forth in Exhibit "A" attached hereto (the "Specifications").
2.2 Subject to provisions of Section 15 below, the Parties may negotiate
changes to the specifications which shall be implemented in a manner
that will not interrupt the then current production of VLUs. The
Parties shall determine by mutual consent the corresponding adjustment
in prices and the delivery schedule, and this Agreement shall be
modified in writing accordingly.
3. PURCHASE PRICE/PAYMENT TERMS
3.1 The basic purchase price for each VLU shall be US $ [****] ([****]) per
unit for the [****] Order and US $[****] ([****] US Dollars and [****]
cents) per unit, exclusive of G.S.P., for the remaining [****] VLUs
(respectively - the "Purchase Price"). Should the G.S.P. apply during the
term of this Agreement, the cost of the G.S.P. shall be added to the
Purchase Price. During the term of this Agreement, from time to time,
Seller shall use its best efforts to reduce the costs that were the basis
of its initial determination of US $[****] as the appropriate purchase
price
2
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
and shall pass through to Teletrac any such cost reductions, as it
achieves. This undertaking does not constitute the grant to Teletrac of a
right to audit Tadiran's books, records or financial statements.
3.2 Subject to the provisions of Section 4 below, The Basic Price includes
freight, handling, insurance, and other delivery costs (all as of the
Effective Date and shall be adjusted accordingly upon any change in the
above), predicated upon the Seller's shipment to Garden Grove, California
("Buyer's Facility") or any other single facility in the United States
provided that the Buyer shall pay the difference in additional delivery
costs from Buyer's Facility to the final destination.
3.3 The invoice of VLUs shall contain, at a minimum, the purchase price in US
dollars, purchase order number, invoice date, quantity, description,
invoice number, reference to this Agreement, ship to name and address, ▇▇▇▇
to name and address, emit to name and address and method and name of
carrier.
3.4 TERMS OF PAYMENT. Terms for the payment of the Purchase Price are as
defined in Exhibit "B" attached hereto.
3
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
4. DELIVERY TERMS
4.1 DELIVERY SCHEDULE. Seller shall ship the VLUs to Buyer according to the
delivery schedule attached as Exhibit "C" (the "Delivery Schedule"). The
monthly delivery rate (as set forth in Exhibit "C" or amended by the
Parties) may be increased by up to [****]% or decreased by up to [****]% by
means of a 60 days prior written notice. In no event shall the monthly
delivery rate be increased in excess of 20,000 VLUs or decreased below
[****] VLUs.
4.2 DELIVERY POINT. All VLUs shall be delivered by Seller FOB Seller's
facilities in Holon, Israel or a facility of any of Seller's subcontractors
(not necessarily in Israel). Title and risk of loss shall pass from Seller
to Buyer at Seller's facilities or subcontractors' facility.
4.3 SHIPMENT POINT. Upon request by Buyer, Seller shall arrange for and pay
the cost of packaging, insurance and freight to Buyer's Facility. US
federal, state and local taxes shall be the responsibility of Buyer.
4.4 METHOD OF SHIPMENT. Method of shipment and selection of carrier is to be
determined by Seller. Seller agrees to ship VLUs by methods that support
the Delivery Schedule as specified herein. If Seller is late in expected
delivery date, Seller shall use and pay for the most expeditious
4
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
shipment means. Seller shall, at its sole expense, provide for all
crating, packaging and packing in shipping containers that are designed to
provide adequate protection for the VLUs during shipment. Buyer shall
incur all additional costs, of in-bound freight when, at Buyer's request,
VLUs are expedited. Seller shall use reasonable efforts to comply with
such requests.
4.5 TAXES. All prices are inclusive of all present export duties (including
brokerage fees) and all Seller's corporate income taxes, duties, tariffs,
fees, levies, charges, federal, state and local sales taxes and other
compulsory payments arising out of or in connection with any such sale or
order, if payable under the laws in force in Israel, including any Israeli
governmental agency operating under the authority of such laws shall be
paid by Seller.
4.6 All claims for shortages in the number of VLUs which have been delivered to
Teletrac shall be made to Tadiran within 60 days of the actual delivery of
the VLUs to Teletrac.
5. REQUEST FOR DEVIATIONS
The Parties may request reasonable deviations from the Specifications in
writing. Requests for deviations must clearly identify the following:
description of the deviation; reference the individual Specification being
deviat-
5
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
ed; term of deviation, i.e. temporary or permanent; number of VLUs
affected; Effective Date; effect of deviation on any other technical or
performance Specification, including whether, following the deviation, the
Unit remains within the applicable margin or tolerance; anticipated delay,
if any, in Delivery Schedule due to deviation; and reason for deviation.
Deviations may be made only if a written addendum describing the deviations
(including the change, if any, in Delivery Schedule) has been mutually
agreed upon and signed by both parties.
6. WARRANTY
Seller hereby warrants the VLUs to be in compliance with the Specifications
and to be free from defects in materials and workmanship for the shorter
of: (a) three years from the date of delivery to Buyer or (b) two years
from the date the VLUs have been delivered by Buyer to third party. The
crystal to be in full compliance with the Specifications and to be free
from defects in materials and workmanship for the period of five years from
the date of receipt at Buyer's Facility. The warranty periods defined
above shall be referred to as the Warranty Period. Seller shall have the
option of either repairing or replacing VLUs found to be defective during
the Warranty Period. Time to repair or replace shall not exceed 90 days
from the date of actual
6
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
delivery of the item to Seller's facility. Seller also warrants the
merchantability and fitness for use within the Specifications of the VLUs.
Following the expiration of the Warranty Period, Seller shall be obligated
to provide maintenance support for VLUs for a period of 15 years in
accordance with a schedule of parts and labor rates which it shall
periodically publish. Seller's schedules for parts and labor rates shall
be effective 30 days following the delivery of the schedule.
6.1 Buyer acknowledges that the warranty contained in this Section 6 above
shall not apply to damage, deterioration or malfunctions which are caused
by:
6.1.1 The improper removal or installation of VLUs.
6.1.2 Accidents, acts of nature, misuse, abuse, negligence, neglect,
unauthorized product modification or failure to follow proper
instruction procedure.
6.1.3 Repair or attempted repair by any person not authorized by
Seller.
6.2 Buyer also acknowledges that Buyer shall be responsible and shall bear all
costs and charges related to the deinstallation of defective VLUs and
reinstallation of the VLUs, Seller shall bear the cost of shipment of the
VLUs from Buyer to Seller and back.
7
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
6.3 THE WARRANTIES CONTAINED IN THIS SECTION 6 ARE IN LIEU OF ALL OTHER
WARRANTIES WHETHER ORAL, WRITTEN, OR EXPRESS, IMPLIED OR STATUTORY. SELLER
SHALL NOT BE LIABLE FOR ANY BUSINESS EXPENSES, LOSS OF PROFIT,
INCONVENIENCE, OR DAMAGE, INCLUDING DIRECT, INDIRECT, SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES RESULTING FROM VLU DEFECTS WHETHER RESULTING FROM
BREACH OF WARRANTY OR ANY OTHER LEGAL THEORY. SELLER DISCLAIMS ALL
LIABILITY, WHETHER IN CONTRACT, TORT, WARRANTY OR OTHERWISE TO ANY THIRD
PARTY OTHER THAN BUYER. NOTWITHSTANDING THE ABOVE, SELLER SHALL REMAIN
LIABLE TO BUYER (AND ONLY TO BUYER) UNDER THE ABOVE WARRANTY FOR THE
DURATION OF THE WARRANTY PERIOD, DESPITE PASSAGE OF TITLE TO THE VLUs TO
ANY THIRD PARTIES.
7. CONFIDENTIALITY AND PROPRIETARY RIGHTS
Neither party shall, without the prior written consent of the other party,
use (for any purpose other than that contemplated by this Agreement) or
disclose or divulge to any third party the terms and conditions of this
Agreement or any documents, specifications or information, including
technical information, received from the other party under or in connection
with this Agreement, provided, however, that Seller may disclose to any
third party, including its employees and subcontractors (provided they have
executed
8
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
an appropriate NDA), in connection with the manufacture of the VLUs, the
documents, specifications or information received from Buyer, to the extent
that in Seller's reasonable opinion it is necessary for the purposes of
this Agreement. Seller shall have the right to disclose any information
reasonably necessary to file for patent and other intellectual property
rights protection. At all times Seller shall retain exclusive proprietary
rights in the VLU (including design, configurations, drawings,
specifications, etc.) and nothing herein may be construed as granting any
intellectual property rights in the VLU to the Buyer.
8. USE OF NAME OR TRADEMARKS
Seller shall print any name or ▇▇▇▇ requested by Buyer on the VLUs in
addition to the name "Tadiran". Buyer shall be liable for an infringement
of copyright or trademarks as a result of any name or ▇▇▇▇ requested by
Buyer on the VLUs. If Buyer elects to use another name in addition to the
name "Tadiran", Buyer shall give Seller such name or ▇▇▇▇ to be used on the
VLUs at least 90 days prior to the delivery date for such VLUs.
9
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
9. FORCE MAJEURE
If performance by Seller of its obligations hereunder is prevented by force
majeure, affecting the activities of Seller or any party connected with the
sale, manufacture, supply, shipment or delivery of VLUs, including but not
limited to, acts of God, flood, typhoon, earthquake, tidal wave, landslide,
fire, plague, commotion, strike, labor disturbances, blockade, arrest or
restraint of government, requisition of vessel or aircraft, explosion, war,
government request, guidance, order or regulation or the boycotting of
Israeli goods, or any other unforeseeable causes or circumstances beyond
the reasonable control of Seller, then Seller shall not be liable for loss
or damage or failure or delay in performing its obligations under this
Agreement; provided, however, that Seller promptly fulfills its obligations
under this Agreement immediately after such force majeure ceases.
Notwithstanding the foregoing, Teletrac may terminate this Agreement, by
written notice to Tadiran, if performance by Tadiran is prevented by force
majeure for a period of more than 90 days.
10. COMPLIANCE
10.1 COMPLIANCE WITH AGREEMENT. Parties hereby agree to fully cooperate with
each other and to sell and buy VLUs which fully comply with the terms,
conditions, provisions and
10
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Specifications of this Agreement, including the exhibits attached hereto
for price set forth herein to be paid in a timely manner.
10.2 COMPLIANCE WITH LAW. Parties shall be in compliance with (as to their
respective roles as manufacturer or operator/seller) and the VLUs shall be
in compliance with all federal, state and municipal regulations governing
the sale and use of the VLUs. The Parties shall cooperate in obtaining
necessary government agency approvals. Seller shall notify Buyer thirty
days prior to submission to any governmental agency as to the nature of the
submission. Buyer may elect to jointly apply for such agency approval,
registration or listing. Buyer shall incur the cost of obtaining and
maintaining a requested listing, approval or registration.
10.3 COMPLIANCE WITH PROPRIETARY RIGHTS REQUIREMENTS. Seller shall retain the
right to use all technology, know-how, copyright, trademark and patent
rights used in producing the VLUs. The Parties agree that Seller shall
retain all rights to file for patents on the VLUs or any other protection
of intellectual property relating to the VLUs.
11
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
11. INDEMNIFICATION
11.1 SELLER'S INDEMNIFICATION FOR ACTIONS. Subject to limitations listed below,
Seller shall indemnify, defend and hold harmless Buyer from and against all
claims, liabilities, obligations, damages, losses, deficiencies, costs,
shipping and transportation expenses, payments and expenses (including
court costs and reasonable attorney's fees), lawsuits, actions and other
proceedings, judgments and awards (collectively, "Claims") (other than
Claims due to the fault of Buyer or a failure of the VLU to perform in
accordance with the specifications), including, without limitation, Claims
of personal injury and death, arising directly out of any act or omission
of Seller, under this Agreement, including Claims of product liability.
Buyer acknowledges that the coverage of this indemnification does not
include patent infringements of the Buyer or any other breach of
obligations of Buyer contained in the Specifications. In no event shall
Seller be liable for indirect or consequential damages.
11.1.1 Buyer shall give Seller notice of any Claim within 10 business days
after Buyer's receipt of such Claim.
11.1.2 Buyer shall empower Seller to conduct the defense of any Claim and
shall cooperate fully with such defense.
12
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Seller shall have full authority to conduct the defense.
11.1.3 Buyer shall not be entitled to settle a Claim without the express
written permission of Seller.
11.1.4 Provided that Seller advances the funds necessary to defend a Claim,
Buyer shall be obligated to defend such Claim.
11.2 BUYER'S INDEMNIFICATION FOR ACTIONS. Buyer shall indemnify, defend and
hold harmless Seller from and against all Claims (other than Claims due to
the fault of Seller), including, without limitation, Claims of personal
injury and death, arising, out of any act or omission of Buyer, or Buyer's
agents or employees, in connection with this Agreement.
11.2.1 Seller shall give Buyer notice of any Claim within 10 business days
after Seller's receipt of such Claim.
11.2.2 Seller shall consult regularly with Buyer in connection with the
defense of any Claim.
11.2.3 Seller shall not be entitled to settle a Claim without the express
written permission of Buyer.
11.2.4 Provided that Buyer advances the funds necessary to defend a Claim,
Seller shall be obligated to defend such Claim.
13
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
11.3 PROPRIETARY RIGHTS INDEMNIFICATION. Seller shall indemnify, defend and
hold harmless the Buyer from and against any Claims resulting or arising
from or in connection with Seller's violation of any third party's trade
secrets, proprietary information, trademarks, copyrights or patent rights
in connection with services, work or VLUs provided under this Agreement.
Buyer shall indemnify, defend and hold harmless the Seller from and against
any Claims resulting or arising from or in connection with Buyer's
violation of any third party's trade secrets, proprietary information,
trademarks, copyrights or patent rights in connection with services, work
or VLUs provided under this Agreement.
11.4 PROPRIETARY RIGHTS INDEMNIFICATION. Buyer shall indemnify, defend and hold
harmless the Seller from and against any Claims resulting or arising from
or in connection with Seller's violation of any third party's trademarks or
copyrights in connection with name or ▇▇▇▇ requested by Buyer pursuant to
Section 8 above.
11.5 COOPERATION. Each party agrees to promptly notify the other of any Claim
and to cooperate fully in the defense thereof or any negotiations related
thereto, and neither
14
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
shall enter into any settlement without the consent of the other party.
12. CONTRACT ADMINISTRATION
▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇") or his duly appointed successor shall administer the
terms of this Agreement on behalf of Buyer, and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇") or his duly appointed successor shall administer the terms of
this Agreement on behalf of Seller.
13. NOTICES
Any notice, request or demand required to be made or given hereunder by any
party shall be deemed to be duly given or made upon receipt. The notice,
request or demand must be sent by air courier or registered or certified
airmail, or facsimile to the respective addresses of the parties set forth
below, or at such other address as has been given by either party to the
other in writing in accordance with the terms of this Agreement.
Teletrac Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tadiran Ltd., Telematics Division
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
14. TERMINATION
Each party shall have the right, as set forth below, to terminate this
Agreement without prejudice to any rights that it may have, whether under
the provisions of this Agreement, in law or in equity or otherwise, upon
the occurrence of any of the following events, hereinafter called
"Defaults".
(a) Either party, if the other party defaults in the performance of a
material obligation, provided for in this Agreement; or
(b) Either party, if the other party files a voluntary petition in
bankruptcy, files any voluntary petition seeking any reorganization,
arrangement, readjustment, liquidation, dissolution or similar relief
under the present or any future federal or state bankruptcy or
insolvency act; fails to remove an involuntary petition for a
reorganization, arrangement, readjustment, liquidation, dissolution or
similar relief under the present or any future federal or state
bankruptcy or insolvency act within 60 days after the filing of such
petition, or appoints a trustee, receiver or liquidator of its
properties.
Notwithstanding the above, a corporate reorganization or spin off not
under bankruptcy or insolvency proce-
16
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
dures shall not be considered a default, unless there is an intention
to abandon the business.
The party claiming a Default shall give written notice of termination to
the party alleged to be in Default in accordance with the notice provision
set forth in Section 13. The defaulting party shall have 90 business days
in which to correct any such Default, and failing such, this Agreement
shall terminate. If the defaulting party shall, within ten business days,
notify the other party in writing that it disputes the asserted Default,
and the matter cannot be resolved by mutual agreement of the parties, the
matter shall be submitted to binding mediation as hereinafter provided.
15. DECREASE OF QUANTITIES AND TERMINATION OF PRODUCTION
Buyer may decrease the total quantity of the VLUs he has undertaken to
purchase under Section 1.1 above under the following conditions:
15.1 Buyer must give Seller prior written notice of Buyer's election to
decrease the quantities of VLUs to be delivered under this Agreement
("Decrease Notice"). Notwithstanding the above, Buyer may not
decrease the [****] Order.
17
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
15.2 Should the consequences of Decrease Notice require any changes in
overall delivery schedule, the Parties shall determine a new delivery
schedule by mutual consent. In any event the quantities of the VLUs
to be supplied after the Decrease Notice shall be more than the
quantities scheduled to be supplied within 4 months following the date
of the Decrease Notice.
15.3 Buyer shall compensate Seller in the amount of US$[****] per each VLU,
canceled in accordance with Sub-sections 15.1 and 15.2 above.
15.4 Buyer may give Seller Decrease Notice of cancellation of all further
deliveries, and, in such case, Buyer shall cover the following costs:
a. [****]% of the total price of the VLUs shipped prior to the
Decrease Notice;
b. [****]% of the total price of the ordered VLUs planned to be
shipped during 30 days immediately following the date of the Decrease
Notice;
c. [****]% of the total price of the ordered VLUs planned to be
shipped within 30-60 days from the date of the Decrease Notice;
18
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
d. [****]% of the total price of the ordered VLUs planned to be
shipped within 60-90 days from the date of the Decrease Notice;
e. US$ [****] per each VLU related to the order canceled as a result
of this termination of production.
"Planned to be shipped" shall be interpreted in accordance with the
last update of the monthly delivery rate.
In such case all inventory becomes the property of Buyer, including
all parts and partly completed units. Seller shall ship same (at
Buyer's expense) to a destination requested by Buyer.
16. BINDING MEDIATION
16.1 If one or more disputes arise between the parties with respect to the
obligations and responsibilities of either party under this Agreement, any
such dispute shall be resolved in accordance with the process described in
this Section 16, provided, however, that if either party determines that
provisional relief (e.g. a temporary restraining order or preliminary
injunction) is required to provide temporary relief, nothing herein shall
prevent the aggrieved party from applying to a court for provisional
relief. An application for provisional relief to a court shall not relieve
either party of its obligation under this
19
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
Section 14 and shall not alter the power of the mediator to determine the
rights and obligations of the Parties under this Agreement.
16.1.1 Either party may initiate the dispute resolution process by sending a
written notice (which the parties hereby agree will automatically toll
any applicable statute of limitations) of the alleged dispute and the
alleged wrong suffered, to the members of the Dispute Resolution
Committee, consisting of the following individuals at Seller and Buyer
or their successors, who shall be persons holding positions at a level
substantially equivalent to those named ("Dispute Committee"):
SELLER BUYER
------ -----
General Manager The Chairman of the Board
Telematics Division
16.1.2 Upon receipt of any such notice, the Dispute Committee, using all
available and relevant resources of their respective companies, shall
promptly investigate the facts and circumstances surrounding the
disputes and shall meet (either in person or by telephone) to attempt
to resolve the dispute. Any resolution reached, either informally or
in such a meeting, shall be committed to writing and signed by the
Dis-
20
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
pute Committee and communicated to the appropriate management of the
parties for implementation. This resolution shall be conclusive and
binding upon the parties.
16.1.3 If a dispute is not resolved by the Dispute Committee, any party may
pursue its action as set forth in Section 16.2 below.
16.1.4 Each of the parties specifically acknowledges and agrees that remedies
at law for any breach of this Agreement would be inadequate, and that
the parties, in addition to any other relief available, shall be
entitled to specific performance of all of the provisions of this
Agreement.
16.2 Within 5 days after the Dispute Committee has failed to resolve any
dispute, the parties shall meet to discuss and agree upon the
qualifications which they desire a mediator to possess.
Any party may suggest one or more candidates to fill the position of
mediator.
The parties shall then attempt to select a mutually acceptable
candidate.
16.2.1 Once a candidate has been agreed upon by the parties, the candidate
shall be invited to serve as the mediator. If the candidate declines
to do so, the parties
21
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
shall meet or confer again to select another qualified candidate.
This process shall be repeated until a mediator is selected and agrees
to serve. If, however, after 30 days, the parties are unable to agree
upon a mediator, the mediator shall be selected by the President of
the New York Arbitration Association, whose selection shall be binding
upon the parties.
16.2.2 During the selection and mediation processes, each party shall
disclose to the other party any circumstances known to it which would
create any reasonable doubt about the impartiality or neutrality of an
individual who is being considered as a potential mediator or who is
serving as the mediator. The candidate or mediator may be asked to
explain such circumstances and be required to disclose any information
which would constitute grounds for doubt as to the candidate's or the
mediator's impartiality or neutrality. If any such circumstances have
been disclosed, either before or after the individual's appointment as
mediator, the candidate or mediator shall not serve or continue to
serve unless both parties agree.
16.2.3 The mediator's compensation rate shall be determined and agreed upon
at or prior to the mediator's appointment. The mediator's
compensation and all other inci-
22
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
dental costs incurred during the mediation process will be shared
equally by the parties.
16.2.4 The mediator shall be neutral and impartial and shall use the laws of
the State of New York to resolve the dispute between the parties.
16.2.5 The mediator shall control the procedural aspects of the mediation.
The parties shall cooperate fully with the mediator at all times.
16.2.6 The mediator is free to meet and communicate separately with each
party.
16.2.7 The mediator shall, in consultation with the parties, fix the agenda
for all meetings.
16.2.8 Each party may be represented by counsel, who shall be authorized to
recommend settlement options to their principals.
16.2.9 The mediation process shall be conducted expeditiously and shall be
completed in less than 120 days from the date the mediator was
selected. Each representative shall make every effort to be available
for meetings, and the mediator shall ensure that he is able to devote
all the time necessary to quickly and effectively mediate the dispute.
16.2.10 The entire mediation process shall remain confidential. The parties
or the mediator shall not disclose
23
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
information regarding the process, including settlement terms, unless
the parties agree otherwise. The mediator may obtain assistance and
independent expert advice with the agreement of and at the expense of
the parties.
16.2.11 The mediator shall not be liable for any good faith act or omission in
connection with his role as mediator.
16.2.12 The mediation shall take place in New York City.
16.2.13 The mediator's decision shall be final and binding upon both parties.
17. NEW YORK LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York as the same or any succeeding provision of
law may be in effect from time to time. For the purposes of any dispute
between the parties, this Agreement shall be construed as if all parties
were resident and doing business in New York. If there are any ambiguities
in the Agreement, such ambiguities shall not be construed against either
party on the basis of who drafted the documents.
24
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
18. MISCELLANEOUS PROVISIONS
18.1 RELATIONSHIP OF PARTIES. This Agreement does not constitute and shall not
be construed as constituting a partnership or joint venture between The
Parties. Neither party shall represent that it is an agent for the other
party. Both parties acknowledge that the relationship of Seller and Buyer
shall be and at all times remain one of an independent contractor, and so
shall represent themselves to third parties. Neither party has the right
to bind the other in any manner.
18.2 SUCCESSORS. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective executors, heirs, legal
representatives, successors and assigns.
18.3 ASSIGNMENT. Parties shall not assign, transfer or sell any of their rights
hereunder to any third party without the prior written permission of the
other Party, which permission shall not be unreasonably withheld; provided,
however, that Teletrac may assign this agreement, without the permission
from Tadiran, as part of sale or transfer of all or substantially all of
its assets and business. Notwithstanding the above Tadiran may assign this
agreement to its subsidiary created as part of a corporate reorganization,
provided Tadiran shall guarantee the performance of such
25
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
subsidiary. No rights hereunder shall devolve by operation of law or
otherwise upon any assignee, receiver, liquidator, trustee or other party.
The VLUs delivered hereunder shall be manufactured only by Tadiran Ltd.,
its legitimate assigns or Tadiran LTD's subcontractors.
18.4 NO WAIVER. Failure of either party to insist upon strict performance of
any of the terms, conditions, provisions or Specifications within this
Agreement (including the exhibits), or the delay in exercising any of its
remedies, shall not constitute a waiver of such terms conditions,
provisions or Specifications or a waiver of any default thereof nor the
remedy of such default.
18.5 SURVIVAL OF OBLIGATIONS. Each party's obligations under this Agreement
which, by their nature, would continue beyond termination or expiration of
this Agreement, including by way of illustration only and not limitation,
Section 4 or any Section related to confidentiality, warranty and
indemnification, shall survive termination or expiration of this Agreement
by either party for any reason.
18.6 ENTIRE AGREEMENT. This Agreement, together with all exhibits hereto,
constitute the entire agreement and understanding between the parties as to
the subject matter of this Agreement, and supersedes all previous
communications,
26
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
representations or agreements. Any other document issued by Buyer shall be
deemed to be issued only for administrative convenience and no term or
condition thereof, including any purchase order, shall supersede the terms
and conditions of this Agreement.
18.7 REMEDIES. Except as specifically set forth in this Agreement, all remedies
available to either party for breach of this Agreement are cumulative, and
may be exercised concurrently or separately, and the exercise of any one
remedy shall not be deemed an election of such remedy to the exclusion of
other remedies.
18.8 HEADINGS. The paragraph headings used in this Agreement are for
convenience of reference only, and shall not in any way limit or amplify
the terms and provisions hereof, nor enter into the interpretation of this
Agreement.
18.9 BINDING AGREEMENT. The persons executing this Agreement on behalf of the
parties have been duly and validly authorized to do so, and this Agreement
is a valid and binding obligation of the parties.
18.10 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which shall constitute
one and the same Agreement.
27
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
18.11 SEVERABILITY. If any term of this Agreement shall be unlawful, void
or unenforceable, such term shall be deemed omitted to the extent
prohibited or invalid, but the remainder of this Agreement shall not
be invalidated and shall be given effect as far as possible. If any
term hereof is found by a court or arbitrator to be over-broad, such
term shall be limited to the extent required to make it enforceable.
18.12 MODIFICATION. This Agreement may not be modified, supplemented or
otherwise changed except by a written instrument executed by both
parties.
18.13 ATTORNEY'S FEES. If any action or proceeding (judicial or
non-judicial) is brought to interpret any term or provisions of this
Agreement, the prevailing party shall be entitled to costs and
reasonable attorney's fees in addition to any other relief to which it
is entitled.
28
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE SIGNED THIS
AGREEMENT AS OF THE DAY AND YEAR FIRST ABOVE WRITTEN.
TELETRAC INC.
By /s/ ▇▇▇▇▇ ▇. Queen
-----------------------------
TADIRAN LTD.
By /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------
29
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
VLU AGREEMENT
EXHIBIT A
SPECIFICATIONS
[****]
[143 pages omitted and filed separately with the Commission
pursuant to a request for confidential treatment]
30
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
VLU AGREEMENT
EXHIBIT B
TERMS OF PAYMENT
1. A combination of a downpayment and a Standby Letter of Credit will be
provided.
[****]
2. The payment for the delivered VLUs will be made upon shipment.
31
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
VLU AGREEMENT
EXHIBIT C
DELIVERY SCHEDULE
The following is a projected delivery schedule for VLUs:
October 1996 [****]
November 1996 [****]
December 1996 [****]
January 1997 [****]
February 1997 [****]
March 1997 [****]
April 1997 [****]
May 1997 [****]
June 1997 [****]
July 1997 until completion [****]
A final "Baseline Schedule" will be summarized not later than October 10, 1996.
In any event, the minimum quantities to be delivered will be as follows:
October 1996 [****]
November 1996 [****]
December 1996 [****]
January 1997 [****]
February 1997 [****]
March 1997 [****]
April 1997 [****]
May 1997 [****]
32
[****Omitted and Filed Separately With the Commission Pursuant
to a Request for Confidential Treatment.]
June 1997 [****]
July 1997 until completion [****]
33