1007-00008 · Vantage Mobility Systems Corp · Negotiation Documents

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DRAFT — PRIVILEGED & CONFIDENTIAL — PREPARED BY CALDERWOOD & HARKNESS LLP C&H Matter No. 1007-00008

AMENDMENT NO. 1 TO MASTER EMBEDDED SOFTWARE LICENSE AND SERVICES AGREEMENT

Dormancy Extension, Scope Reduction, and Fee Credit

Amendment to the Master Embedded Software License and Services Agreement dated June 21, 2022

by and between

VANTAGE MOBILITY SYSTEMS CORP.

and

MERIDIAN CODE TECHNOLOGIES, INC.

[●], 2023

AMENDMENT NO. 1 TO MASTER EMBEDDED SOFTWARE LICENSE AND SERVICES AGREEMENT

This Amendment No. 1 (this "Amendment") to the Master Embedded Software License and Services Agreement is entered into as of [●], 2023 (the "Amendment Effective Date"), by and between:

VANTAGE MOBILITY SYSTEMS CORP., a corporation duly organized and existing under the laws of the State of Delaware, with its principal place of business located at 4100 Industrial Parkway, Sterling Heights, MI 48312 (the "Licensee" or "VMS");

and

MERIDIAN CODE TECHNOLOGIES, INC., a corporation duly organized and existing under the laws of the State of California, with its principal place of business located at 2750 Orchard Blvd., Suite 400, Santa Clara, CA 95054 (the "Licensor" or "MeridianCode").

Each of VMS and MeridianCode is sometimes referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, the Parties entered into that certain Master Embedded Software License and Services Agreement, dated as of June 21, 2022 (the "MESLSA" or the "Agreement"), pursuant to which Licensor granted Licensee a worldwide, non-exclusive license to integrate Licensor's proprietary ATLAS-RT™ embedded real-time operating system, Version 4.2 (as subsequently updated to Version 4.2.3) (the "Licensed Product"), into Licensee's next-generation adaptive vehicle platform program designated as "Project Argonaut," on the terms and conditions set forth therein;

WHEREAS, the Agreement was entered into with a total deal value of Twenty Million Dollars ($20,000,000), for a five (5)-year term commencing on the effective date of the Agreement and expiring on June 20, 2027, and the Agreement granted Licensee a worldwide license to integrate the Licensed Product into up to five (5) designated vehicle platform configurations under Project Argonaut, specifically designated as Argonaut-A, Argonaut-B, Argonaut-C, Argonaut-D, and Argonaut-E;

WHEREAS, Licensee has paid the following fees under the Agreement as of the date hereof: (a) an Upfront License Fee in the amount of Eight Million Dollars ($8,000,000), paid on June 21, 2022; (b) the Year 1 Annual Maintenance & Support Fee in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000), paid on July 15, 2022; and (c) Integration Services Fees for Milestones 1 through 3 of Statement of Work No. 1 in the aggregate amount of One Million Nine Hundred Twenty Thousand Dollars ($1,920,000), for a total of Twelve Million Three Hundred Twenty Thousand Dollars ($12,320,000) in aggregate fees paid to date;

WHEREAS, on March 14, 2023, Licensee's Board of Directors approved a strategic rescoping of Project Argonaut (the "Project Argonaut Rescoping"), pursuant to which the target vehicle platforms were reduced from five (5) to two (2) (specifically, Argonaut-A and Argonaut-C), and electrification integration was deferred to a future phase, in response to supply-chain delays in semiconductor procurement affecting Licensee's operations and portfolio-wide capital expenditure constraints applicable across Licensee's business units, and integration work under the Agreement was suspended effective March 22, 2023;

WHEREAS, at the time of such suspension: (a) with respect to Argonaut-A, Milestone 3 of 5 had been completed (alpha integration testing having been passed on February 28, 2023); (b) with respect to Argonaut-C, Milestone 2 of 5 had been completed (source-code customization having been delivered on January 15, 2023); (c) with respect to Argonaut-B, only Milestone 1 had been completed (requirements specification approved, with no code integration commenced); and (d) with respect to Argonaut-D and Argonaut-E, no integration work had been commenced, and Licensee's engineering teams had invested approximately 14,200 person-hours in Project Argonaut integration efforts through the date of suspension;

WHEREAS, Licensee provided written notice of dormancy to Licensor on July 14, 2023, pursuant to Section 9.4 of the Agreement, which notice was delivered six (6) days prior to the one hundred twenty (120)-day dormancy trigger date of July 20, 2023, and Licensor acknowledged Dormancy Status in writing on August 3, 2023, and under the terms of Section 9.4, the twelve (12)-month dormancy cap would expire on August 3, 2024, at which point the Parties would be required to renegotiate or the Agreement would be subject to termination;

WHEREAS, Licensor invoiced the Year 2 Annual Maintenance & Support Fee in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000) on July 1, 2023 (the "Disputed Invoice"), and Licensee disputes payment of the Disputed Invoice on the ground that Section 9.4 of the Agreement reduces Licensor's support obligations to critical-security-patch-only level during Dormancy Status and that the full maintenance fee is not owed for the diminished service levels actually provided during the dormancy period, and Integration Services Fees for Milestones 4 and 5 in the aggregate amount of One Million Two Hundred Eighty Thousand Dollars ($1,280,000) have not been invoiced or earned, and no per-unit runtime royalties have accrued (zero dollars ($0) of the Four Million Dollar ($4,000,000) aggregate cap);

WHEREAS, during the course of integration efforts, Licensee's engineers created three (3) derivative software modules designated DW-001, DW-002, and DW-003, comprising approximately 47,000 lines of source code, and the ownership and license-back rights with respect to such derivative works under Section 7.2 of the Agreement remain in dispute between the Parties and are to be addressed separately by the Parties pursuant to a side letter governing derivative works ownership clarification (the "Derivative Works Side Letter"); and

WHEREAS, the Parties desire to amend the Agreement to: (i) extend the dormancy period; (ii) reduce the licensed platform scope; (iii) restructure the fee schedule and credit disputed maintenance fees; (iv) adjust the per-unit runtime royalty cap; (v) revise the Section 4.3 "Use-It-or-Lose-It" deadlines; and (vi) make certain conforming changes, all as more particularly set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the sufficiency of which is hereby acknowledged, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1 — DEFINITIONS

Section 1.1 — Defined Terms. All capitalized terms used but not otherwise defined in this Amendment shall have the respective meanings ascribed to such terms in the Agreement. In addition to the defined terms set forth in the Agreement, the following terms shall have the meanings set forth below when used in this Amendment:

(a) "Adjusted Royalty Cap" has the meaning set forth in Section 4.3 of this Amendment.

(b) "Adjusted Section 4.3 Deadline" has the meaning set forth in Section 5.1 of this Amendment.

(d) "Amendment Effective Date" means the date first written above.

(e) "Derivative Works Side Letter" means the separate side letter between the Parties governing derivative works ownership clarification, as referenced in Article 6 of this Amendment.

(f) "Disputed Invoice" means the Year 2 Annual Maintenance & Support Fee invoice in the amount of $2,400,000 issued by Licensor on July 1, 2023.

(g) "Extended Dormancy Period" has the meaning set forth in Section 2.1 of this Amendment.

(h) "Maintenance Fee Credit" has the meaning set forth in Section 4.1 of this Amendment.

(i) "Reactivation Date" means the date on which Licensee provides a Reactivation Notice to Licensor of its intent to resume active integration under the rescoped program, as set forth in Section 2.3 of this Amendment.

(j) "Reactivation Notice" means a written notice from Licensee to Licensor delivered pursuant to Section 2.3 of this Amendment, indicating Licensee's intent to resume active integration under the rescoped program.

(k) "Rescoped Platforms" means the two (2) vehicle platform configurations designated as Argonaut-A and Argonaut-C, as described in Section 3.1 of this Amendment.

(l) "Retired Platforms" means the three (3) vehicle platform configurations designated as Argonaut-B, Argonaut-D, and Argonaut-E, which are eliminated from the scope of the Agreement pursuant to Section 3.1 of this Amendment.

Section 1.2 — Interpretation. The following rules of interpretation shall apply to this Amendment: (a) all headings and captions contained herein are for convenience of reference only and shall not affect the meaning or interpretation of any provision of this Amendment; (b) the word "including" (and any derivative thereof) shall mean "including, without limitation"; (c) the singular shall include the plural and the plural shall include the singular, as the context may require; (d) references to "Sections" or "Articles" shall mean Sections or Articles of the Agreement as amended by this Amendment, unless the context clearly indicates a reference to a Section or Article of this Amendment; (e) references to "days" shall mean calendar days unless otherwise specified; (f) the terms "herein," "hereof," "hereunder," and words of similar import shall refer to this Amendment as a whole; and (g) references to any agreement, instrument, or document shall mean such agreement, instrument, or document as amended, supplemented, or modified from time to time in accordance with its terms.

ARTICLE 2 — DORMANCY EXTENSION AND REACTIVATION

Section 2.1 — Extension of Dormancy Period. Section 9.4 of the Agreement is hereby amended to extend the maximum dormancy period from twelve (12) months to twenty-four (24) months from the date of Licensor's written acknowledgment of Dormancy Status (August 3, 2023) (the "Extended Dormancy Period"). Accordingly, the dormancy cap date shall be August 3, 2025, rather than August 3, 2024 as provided under the original terms of Section 9.4 of the Agreement. During the Extended Dormancy Period, Licensor's support obligations shall remain at the critical-security-patch-only level as specified in Section 9.4 of the Agreement, and Licensor shall continue to provide such critical-security-patch-only support in accordance with the service level requirements applicable to such patches as set forth in Exhibit D to the Agreement. If the Extended Dormancy Period expires on August 3, 2025, without Licensee having provided a Reactivation Notice to Licensor in accordance with Section 2.3 of this Amendment, the Parties shall enter into a mandatory renegotiation period of sixty (60) days commencing on August 4, 2025, during which the Parties shall negotiate in good faith regarding the terms for continued engagement, and if such renegotiation period expires without the Parties reaching agreement, either Party may terminate the Agreement in accordance with the termination provisions of Section 9.4 of the Agreement, as amended hereby.

Section 2.2 — Tolling of Deadlines During Dormancy. All milestone deadlines, performance obligations, and time-based requirements under the Agreement (including, without limitation, the deadlines set forth in Section 4.3 of the Agreement, Statement of Work No. 1, and any other time-sensitive provisions of the Agreement or any exhibit thereto) shall be tolled during the entire period commencing on March 22, 2023 (the date on which integration work was suspended) through and including the Reactivation Date (the "Tolling Period"). The Tolling Period shall be calculated on a day-for-day basis. Upon the occurrence of the Reactivation Date, all tolled deadlines shall resume with the remaining time that existed as of March 22, 2023, and the Parties shall, within fifteen (15) business days following the Reactivation Date, jointly prepare and execute a revised schedule reflecting the adjusted deadlines applicable to each remaining milestone and performance obligation. For the avoidance of doubt, the tolling provisions of this Section 2.2 shall apply retroactively to the period from March 22, 2023 through the Amendment Effective Date, such that no deadlines shall be deemed to have expired during such period.

Section 2.3 — Reactivation Procedure. Licensee may reactivate the Agreement at any time during the Extended Dormancy Period by delivering a Reactivation Notice to Licensor with not less than sixty (60) days' prior written notice. The Reactivation Notice shall be delivered in accordance with the notice provisions set forth in Section 10.5 of this Amendment and shall specify the intended Reactivation Date. Upon receipt of a valid Reactivation Notice, Licensor shall take the following actions:

(a) Within thirty (30) days of the Reactivation Date, Licensor shall restore full support and maintenance services (including all service levels beyond critical-security-patch-only support) in accordance with the terms and service level commitments set forth in the Agreement, including the response time and resolution commitments specified in Exhibit E to the Agreement.

(b) Within sixty (60) days of the Reactivation Date, Licensor shall update the Licensed Product to the then-current minor version of the ATLAS-RT™ platform (which may include versions beyond Version 4.2.3) at no additional charge to Licensee, provided that such update shall not include major version upgrades (e.g., from Version 4.x to Version 5.x), which shall be subject to separate negotiation and, if applicable, additional licensing fees.

(c) Licensor shall assign a dedicated integration support team of not fewer than three (3) senior engineers to support the resumption of integration activities for the Rescoped Platforms, and such team shall remain assigned for a minimum of ninety (90) days following the Reactivation Date.

Section 2.4 — No Automatic Termination. For the avoidance of doubt, entry into or continuation of the Extended Dormancy Period shall not constitute a termination event under any provision of the Agreement, a breach of any obligation of Licensee under the Agreement, or a basis for fee forfeiture under Section 9.1 of the Agreement. The Parties expressly acknowledge that the Extended Dormancy Period is a consensual modification of the Agreement's timeline and shall not give rise to any claim by Licensor for damages, penalties, or acceleration of fees on account of Licensee's decision to enter into or remain in Dormancy Status.

ARTICLE 3 — SCOPE REDUCTION

Section 3.1 — Reduction of Licensed Platforms. The license scope under the Agreement is hereby reduced from five (5) vehicle platform configurations to two (2) vehicle platform configurations. The remaining licensed platforms shall be designated as follows:

(a) Argonaut-A; and

(b) Argonaut-C

(collectively, the "Rescoped Platforms"). All references in the Agreement, the exhibits and schedules thereto, and Statement of Work No. 1 (including all annexes, appendices, and attachments thereto) to Argonaut-B, Argonaut-D, and Argonaut-E (collectively, the "Retired Platforms") are hereby deleted in their entirety. The license granted under the Agreement shall hereafter apply solely to the Rescoped Platforms, and Licensee shall have no obligation to commence or complete integration of the Licensed Product on any Retired Platform. The elimination of the Retired Platforms from the scope of the Agreement shall not be construed as a breach or default by Licensee, and Licensor hereby waives any claim or right it may have under the Agreement arising from Licensee's decision not to proceed with integration on the Retired Platforms.

Section 3.2 — Amendment to Statement of Work No. 1. Statement of Work No. 1 attached to the Agreement is hereby amended to reflect the reduced scope as follows:

(a) All milestone deliverables, acceptance criteria, testing protocols, resource allocation schedules, and performance benchmarks applicable to Argonaut-B, Argonaut-D, and Argonaut-E are deleted in their entirety.

(b) The milestone deliverables and acceptance criteria applicable to Argonaut-A (Milestones 1 through 5) and Argonaut-C (Milestones 1 through 5) shall remain in full force and effect, subject to the tolling provisions set forth in Section 2.2 of this Amendment and the adjusted fee provisions set forth in Article 4 of this Amendment.

(c) The total number of milestones remaining under Statement of Work No. 1 shall be ten (10) (five (5) milestones for Argonaut-A and five (5) milestones for Argonaut-C), of which five (5) milestones have been completed (Milestones 1 through 3 for Argonaut-A and Milestones 1 and 2 for Argonaut-C) and five (5) milestones remain pending (Milestones 4 and 5 for Argonaut-A and Milestones 3 through 5 for Argonaut-C).

(d) The milestone fees shall be adjusted as set forth in Article 4 of this Amendment and in the amended fee schedule attached hereto as Exhibit A.

(e) The amended milestone schedule, reflecting only the Rescoped Platforms, is set forth in Exhibit B attached hereto.

Section 3.3 — No Expansion Without Consent. Licensee may not add additional vehicle platforms beyond the Rescoped Platforms to the scope of the license granted under the Agreement without the prior written consent of Licensor. Any such expansion shall require the negotiation and execution of an additional Statement of Work, and shall be subject to additional licensing fees to be negotiated by the Parties in good faith. For the avoidance of doubt, Licensor shall not be obligated to agree to any expansion of scope, and the addition of any vehicle platform beyond the Rescoped Platforms shall be at Licensor's sole discretion, provided that Licensor shall consider any such request in good faith and shall not unreasonably withhold its consent if the proposed expansion is within the capabilities of the Licensed Product and does not conflict with Licensor's existing third-party obligations.

ARTICLE 4 — FEE RESTRUCTURING

Section 4.1 — Year 2 Maintenance Fee Credit. The Parties acknowledge that Licensor invoiced the Year 2 Annual Maintenance & Support Fee in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000) on July 1, 2023 (the "Disputed Invoice"). Licensee disputes payment of the Disputed Invoice on the basis that Dormancy Status, as acknowledged by Licensor on August 3, 2023, reduced Licensor's support obligations to critical-security-patch-only level under Section 9.4 of the Agreement, and the full Annual Maintenance & Support Fee is therefore not owed for the diminished service levels actually provided during the dormancy period. In resolution of this dispute, the Parties agree as follows:

(a) The full amount of the Disputed Invoice, Two Million Four Hundred Thousand Dollars ($2,400,000), shall be credited in full (the "Maintenance Fee Credit") and shall not be payable in cash by Licensee.

(b) The Maintenance Fee Credit shall be applied as follows:

(i) One Million Two Hundred Thousand Dollars ($1,200,000) shall be credited against Integration Services Fees for Milestones 4 and 5 of Statement of Work No. 1 upon reactivation of the Agreement in accordance with Section 2.3 of this Amendment; and

(ii) One Million Two Hundred Thousand Dollars ($1,200,000) shall be credited against future Annual Maintenance & Support Fees payable by Licensee following the Reactivation Date, to be applied to the first Annual Maintenance & Support Fees invoiced after reactivation until the credit is fully exhausted.

(c) Licensee shall have no obligation to make any cash payment in respect of the Disputed Invoice, and the Disputed Invoice shall be deemed satisfied in full upon the Amendment Effective Date.

(d) During the Extended Dormancy Period, no additional Annual Maintenance & Support Fees shall be invoiced by Licensor or payable by Licensee. Licensor's obligation to provide critical-security-patch-only support during the Extended Dormancy Period shall be provided at no additional cost to Licensee.

Section 4.2 — Adjusted Integration Services Fees. The total Integration Services Fee payable under Statement of Work No. 1 is hereby reduced from Three Million Two Hundred Thousand Dollars ($3,200,000) to Two Million Five Hundred Sixty Thousand Dollars ($2,560,000), reflecting the elimination of all integration work for the three (3) Retired Platforms and the reduction in scope to the Rescoped Platforms only.

(a) Fees Paid to Date. Integration Services Fees in the aggregate amount of One Million Nine Hundred Twenty Thousand Dollars ($1,920,000) have been paid by Licensee for Milestones 1 through 3, which milestones related to integration work performed on the Rescoped Platforms (Argonaut-A and Argonaut-C). These payments are acknowledged by both Parties and remain unchanged.

(b) Remaining Integration Services Fees. The remaining Integration Services Fees for Milestones 4 and 5 applicable to the Rescoped Platforms shall be Six Hundred Forty Thousand Dollars ($640,000), reduced from the original remaining amount of One Million Two Hundred Eighty Thousand Dollars ($1,280,000).

(c) Application of Maintenance Fee Credit. After application of the One Million Two Hundred Thousand Dollar ($1,200,000) portion of the Maintenance Fee Credit allocated to Integration Services Fees under Section 4.1(b)(i), Licensee shall have a net credit balance of Five Hundred Sixty Thousand Dollars ($560,000) applicable to future fees under the Agreement (calculated as $1,200,000 credit minus $640,000 in remaining Integration Services Fees). Such net credit balance shall be applied against subsequent fees payable by Licensee under the Agreement, including Annual Maintenance & Support Fees, in the order in which such fees become due.

Section 4.3 — Adjusted Per-Unit Runtime Royalty Cap. The per-unit runtime royalty rate of Eighty Dollars ($80) per unit, as set forth in the Agreement, shall remain unchanged. The aggregate runtime royalty cap is hereby reduced from Four Million Dollars ($4,000,000) (representing fifty thousand (50,000) units at $80 per unit) to Two Million Dollars ($2,000,000) (representing twenty-five thousand (25,000) units at $80 per unit) (the "Adjusted Royalty Cap"), reflecting the reduced platform scope resulting from the elimination of the Retired Platforms. All other terms and conditions of the runtime royalty provisions set forth in the Agreement, including the reporting, invoicing, and audit provisions applicable to per-unit runtime royalties, shall remain in full force and effect without modification.

Section 4.4 — Adjusted Total Deal Value. The amended total deal value under the Agreement is recalculated as follows:

(a) Upfront License Fee: Eight Million Dollars ($8,000,000) (unchanged).

(b) Annual Maintenance & Support Fees: Year 1 fee of Two Million Four Hundred Thousand Dollars ($2,400,000) (paid), plus Annual Maintenance & Support Fees payable upon and following the Reactivation Date for the remaining term of the Agreement, less the Maintenance Fee Credit of Two Million Four Hundred Thousand Dollars ($2,400,000) applied in accordance with Section 4.1 of this Amendment.

(c) Integration Services Fee (Total): Two Million Five Hundred Sixty Thousand Dollars ($2,560,000) (reduced from $3,200,000).

(d) Per-Unit Runtime Royalty Cap: Two Million Dollars ($2,000,000) (reduced from $4,000,000).

The Parties acknowledge and agree that the restructured fee arrangement set forth in this Article 4 reflects a good-faith allocation of economic risk arising from the scope reduction and dormancy, and that neither Party has been coerced, pressured, or unduly influenced in agreeing to the terms set forth herein. The amended fee schedule is set forth in Exhibit A attached hereto and incorporated herein by reference.

Section 4.5 — No Forfeiture of Prepaid Fees. Notwithstanding anything in Section 9.1 of the Agreement to the contrary, and notwithstanding any provision of the Agreement that would otherwise provide for the forfeiture, clawback, or non-refundability of prepaid fees upon a scope reduction, termination, or dormancy event, Licensee shall not forfeit any prepaid fees as a result of the scope reduction, the dormancy, or any future termination for convenience occurring after the Amendment Effective Date. For the avoidance of doubt, the following prepaid fees shall be preserved and shall not be subject to forfeiture or clawback under any provision of the Agreement:

(a) The Upfront License Fee of Eight Million Dollars ($8,000,000), paid on June 21, 2022;

(b) The Year 1 Annual Maintenance & Support Fee of Two Million Four Hundred Thousand Dollars ($2,400,000), paid on July 15, 2022; and

(c) The Integration Services Fees for Milestones 1 through 3 in the aggregate amount of One Million Nine Hundred Twenty Thousand Dollars ($1,920,000).

Total prepaid fees preserved: Twelve Million Three Hundred Twenty Thousand Dollars ($12,320,000). In the event of a termination for convenience by either Party following the Amendment Effective Date, the disposition of such prepaid fees shall be governed by the termination and wind-down provisions of the Agreement, as modified by this Section 4.5, and in no event shall Licensor be entitled to retain any prepaid fees in excess of amounts allocable to services actually performed or deliverables actually delivered prior to the effective date of such termination.

ARTICLE 5 — AMENDMENT TO SECTION 4.3 (USE-IT-OR-LOSE-IT CLAUSE)

Section 5.1 — Revised Integration Testing Deadline. Section 4.3 of the Agreement is hereby amended and restated in its entirety as follows:

"Section 4.3 — Integration Testing Deadline. Licensee must commence integration testing on at least two (2) Rescoped Platforms within eighteen (18) months following the Reactivation Date (the 'Adjusted Section 4.3 Deadline'). The original deadline of December 21, 2023 (eighteen (18) months from the June 21, 2022 Effective Date of this Agreement) is hereby superseded and replaced in its entirety by the Adjusted Section 4.3 Deadline. For purposes of this Section 4.3, 'commence integration testing' shall mean and include, without limitation, achieving Milestone 3 (alpha integration testing) on at least one (1) Rescoped Platform and achieving Milestone 2 (source-code customization) on the remaining Rescoped Platform. Failure by Licensee to satisfy the Adjusted Section 4.3 Deadline shall constitute a material breach of this Agreement, subject to the cure provisions set forth in Section 9.2, provided that Licensor shall provide Licensee with written notice of such failure and Licensee shall have ninety (90) days from receipt of such notice to cure such failure before Licensor may exercise any remedies available under this Agreement."

Section 5.2 — Credit for Prior Integration Progress. The Parties acknowledge and agree that as of the date on which integration work was suspended (March 22, 2023), the following integration progress had been achieved:

(a) Argonaut-A: Milestone 3 (alpha integration testing) was completed, having been passed on February 28, 2023, as evidenced by the Milestone 3 Completion Certificate executed by both Parties on March 1, 2023.

(b) Argonaut-C: Milestone 2 (source-code customization) was completed, having been delivered on January 15, 2023, as evidenced by the Milestone 2 Completion Certificate executed by both Parties on January 18, 2023.

This prior integration progress shall be credited toward satisfaction of the Adjusted Section 4.3 Deadline. Specifically, upon the Reactivation Date, Licensee shall be deemed to have substantially commenced integration testing on both Rescoped Platforms for purposes of Section 4.3 of the Agreement (as amended and restated by Section 5.1 of this Amendment), subject only to: (i) completing any remaining validation or re-validation of Milestones 1 through 3 for Argonaut-A that may be necessary as a result of any updates to the Licensed Product delivered during the Extended Dormancy Period; and (ii) achieving Milestone 3 (alpha integration testing) on Argonaut-C and completing any remaining work required to advance Argonaut-C from its current status at Milestone 2 through to the level of integration progress that satisfies the requirements of the Adjusted Section 4.3 Deadline. The Parties acknowledge that, given the credit for prior progress set forth in this Section 5.2, the Adjusted Section 4.3 Deadline is intended to provide Licensee with adequate time to resume and complete integration without the risk of forfeiture or default.

ARTICLE 6 — DERIVATIVE WORKS

Section 6.1 — Reservation of Rights. The Parties acknowledge and agree that during the course of the integration efforts undertaken by Licensee's engineering teams in connection with Project Argonaut, Licensee's engineers created three (3) derivative software modules designated as follows:

(a) DW-001 — [module description to be confirmed in the Derivative Works Side Letter];

(b) DW-002 — [module description to be confirmed in the Derivative Works Side Letter]; and

comprising in the aggregate approximately forty-seven thousand (47,000) lines of source code (collectively, the "Derivative Works"). The ownership and license-back rights governing the Derivative Works under Section 7.2 of the Agreement are the subject of a separate Derivative Works Side Letter between the Parties, the terms of which, upon execution by both Parties, shall control over any conflicting or inconsistent provisions in Section 7.2 of the Agreement with respect to the Derivative Works. Pending execution of the Derivative Works Side Letter:

(i) The status quo as of the Amendment Effective Date with respect to the Derivative Works shall be maintained in all respects;

(ii) Neither Party shall exploit, sublicense, distribute, commercialize, or otherwise make available to any third party any of the Derivative Works without the other Party's prior written consent;

(iii) Each Party shall preserve and maintain all copies of the Derivative Works (including source code, object code, and all related documentation) in its possession or control in accordance with the document retention obligations set forth in the Agreement; and

(iv) The Parties shall negotiate the terms of the Derivative Works Side Letter in good faith and shall use commercially reasonable efforts to execute the Derivative Works Side Letter within one hundred twenty (120) days of the Amendment Effective Date.

Section 6.2 — Estimated Value. The Parties acknowledge that an independent technical assessment performed by Hargrove Technical Consulting, LLC, retained by counsel for Licensee, has estimated the commercial value of the Derivative Works (DW-001, DW-002, and DW-003, collectively) at between One Million Eight Hundred Thousand Dollars ($1,800,000) and Two Million Five Hundred Thousand Dollars ($2,500,000). This valuation is referenced herein for informational purposes only and is not binding on either Party for purposes of the Derivative Works Side Letter negotiations or for any other purpose. Neither Party makes any representation or warranty as to the accuracy, completeness, or reliability of such valuation, and each Party reserves its right to obtain independent valuations and to assert alternative valuations in connection with the negotiation of the Derivative Works Side Letter.

ARTICLE 7 — REPRESENTATIONS AND WARRANTIES

Section 7.1 — Mutual Representations. Each Party hereby represents and warrants to the other Party, as of the Amendment Effective Date, as follows:

(a) Organization and Good Standing. Such Party is duly organized, validly existing, and in good standing under the laws of the state of its incorporation, and has full corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.

(b) Authority. Such Party has full corporate power and authority to enter into, execute, and deliver this Amendment, and to perform its obligations hereunder. The execution, delivery, and performance of this Amendment by such Party have been duly authorized by all necessary corporate action, including any required approval by its board of directors or equivalent governing body.

(c) Binding Obligation. This Amendment constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and other similar laws affecting creditors' rights generally from time to time in effect, and subject to general principles of equity (including concepts of materiality, reasonableness, good faith, and fair dealing), regardless of whether considered in a proceeding in equity or at law.

(d) No Conflict. The execution, delivery, and performance of this Amendment by such Party do not and will not: (i) violate, conflict with, or result in a breach of any provision of its certificate of incorporation, bylaws, or other organizational documents; (ii) violate, conflict with, or result in a breach or default under any material agreement, contract, or instrument to which such Party is a party or by which it is bound; or (iii) violate any applicable law, rule, regulation, order, judgment, or decree of any governmental authority having jurisdiction over such Party.

Section 7.2 — Licensee's Representations. Licensee hereby represents and warrants to Licensor, as of the Amendment Effective Date, as follows:

(a) Board Authorization. Licensee's Board of Directors has duly authorized the rescoping of Project Argonaut pursuant to a resolution adopted on March 14, 2023, and such resolution remains in full force and effect as of the Amendment Effective Date. Licensee's Board of Directors has further authorized the execution and delivery of this Amendment and the performance by Licensee of its obligations hereunder.

(b) Credit Facility Compliance. Licensee has complied with all notification obligations under its credit facility with Pinnacle National Bank, N.A. (the "Credit Facility"), including the material contract notification requirement set forth in Section 6.12 of the credit agreement governing the Credit Facility, and Licensee has provided the required notice to Pinnacle National Bank, N.A. on August 10, 2023, disclosing the material modification of the Agreement contemplated by this Amendment. Licensee has not received any notice of default or event of default from Pinnacle National Bank, N.A. in connection with the Agreement, the dormancy, or the scope reduction.

(c) Preservation of Records. Licensee has preserved all integration documentation, milestone completion records, testing reports, and related materials in accordance with its document retention obligations under Section 11.3 of the Agreement, and all such records remain available for inspection and audit as required by the Agreement.

Section 7.3 — Licensor's Representations. Licensor hereby represents and warrants to Licensee, as of the Amendment Effective Date, as follows:

(a) Continued Support During Dormancy. Licensor has continued to provide critical-security-patch-only support during the Dormancy Status period as required by Section 9.4 of the Agreement, and has not failed to deliver any critical security patch within the timeframes specified in the Agreement. Licensor has delivered a total of seven (7) critical security patches to Licensee during the period from August 3, 2023 through the Amendment Effective Date.

(b) No Conflicting Rights. Licensor has not granted any third-party rights to the Licensed Product (including any rights to the ATLAS-RT™ embedded real-time operating system, Version 4.2 or any subsequent version thereof) that would conflict with, diminish, or impair Licensee's rights under the Agreement as amended by this Amendment.

(c) Product Support Status. The Licensed Product (including Version 4.2.3 and any subsequent minor versions) remains fully supported by Licensor and has not been designated as end-of-life, deprecated, or scheduled for discontinuation during the remaining term of the Agreement. Licensor commits to maintaining active support for the Licensed Product through at least June 20, 2027, the expiration date of the Agreement.

ARTICLE 8 — CHANGE OF CONTROL

Section 8.1 — Confirmation of Section 12.6. Section 12.6 of the Agreement (requiring Licensor's prior written consent for assignment of the Agreement or any rights or obligations thereunder by Licensee in connection with a change of control, which consent shall not be unreasonably withheld, conditioned, or delayed) remains in full force and effect and is not modified, amended, or superseded by this Amendment. For the avoidance of doubt, a change in the direct or indirect ownership interest of Kestrel Capital Partners, LP in Licensee, or a sale, transfer, or other disposition by Kestrel Capital Partners, LP of all or a substantial portion of its equity interest in Licensee, whether by merger, consolidation, sale of assets, sale of equity interests, recapitalization, or otherwise, shall constitute a "change of control" for purposes of Section 12.6 of the Agreement and shall require Licensor's prior written consent in accordance with such Section. Nothing in this Amendment shall be construed to limit, waive, or modify the consent requirements set forth in Section 12.6 of the Agreement.

ARTICLE 9 — DISPUTE RESOLUTION

Section 9.1 — Arbitration. All disputes, controversies, or claims arising out of or relating to this Amendment, the Agreement as amended hereby, or any breach, termination, or invalidity thereof, shall be resolved by final and binding arbitration administered under the rules of the Midwest Arbitration Institute ("MAI"), as in effect at the time of filing, with the seat of arbitration in Detroit, Michigan. The following provisions shall govern any arbitration proceeding:

(a) For disputes in which the amount in controversy exceeds One Million Dollars ($1,000,000), the arbitration shall be conducted by a panel of three (3) arbitrators, one (1) appointed by each Party and the third selected by the two (2) Party-appointed arbitrators within thirty (30) days of their appointment.

(b) For disputes in which the amount in controversy is One Million Dollars ($1,000,000) or less, the arbitration shall be conducted by a single arbitrator mutually agreed upon by the Parties, or, if the Parties are unable to agree, selected by MAI in accordance with its applicable rules.

(d) The arbitrator(s) shall render a written, reasoned award within one hundred twenty (120) days of the close of the arbitration hearing, unless extended by agreement of the Parties.

(e) Judgment upon the award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction, including the United States District Court for the Eastern District of Michigan or the Circuit Court of Macomb County, Michigan.

(f) The costs and expenses of the arbitration (including the fees of the arbitrator(s) and MAI administrative fees) shall be borne by the non-prevailing Party, unless the arbitrator(s) determine that an alternative allocation is warranted in the interests of justice.

The arbitration provisions of the Agreement, as set forth in the original dispute resolution clause thereof, remain in full force and effect and are supplemented, but not superseded, by the provisions of this Section 9.1. In the event of any conflict between the arbitration provisions of the Agreement and the provisions of this Section 9.1, this Section 9.1 shall control.

Section 9.2 — Escalation Prior to Arbitration. Before initiating arbitration pursuant to Section 9.1, the Parties shall first attempt resolution of any dispute through the following escalation procedure:

Step 1: Within fifteen (15) business days of delivery of a written dispute notice by either Party to the other Party, the Parties' respective General Counsel (Martin G. Cross for VMS and Priya Ramaswamy for MeridianCode, or their respective successors or designees) shall meet (in person or by videoconference) and confer in good faith in an effort to resolve the dispute.

Step 2: If the dispute is not resolved within the fifteen (15) business day period specified in Step 1, the dispute shall be escalated to the Parties' respective Chief Executive Officers (Thomas R. Keating for VMS and Jeffrey N. Castellano for MeridianCode, or their respective successors or designees) for an additional period of fifteen (15) business days, during which the Chief Executive Officers shall meet (in person or by videoconference) and confer in good faith in an effort to resolve the dispute.

Step 3: If the dispute remains unresolved after completion of the escalation procedures set forth in Steps 1 and 2 above, either Party may initiate arbitration by filing a demand for arbitration before MAI in accordance with Section 9.1 of this Amendment.

The escalation procedure set forth in this Section 9.2 shall be a condition precedent to the initiation of arbitration by either Party, provided that nothing in this Section 9.2 shall prevent either Party from seeking provisional or injunctive relief from a court of competent jurisdiction in circumstances where such relief is necessary to prevent irreparable harm pending the outcome of the escalation and arbitration procedures.

ARTICLE 10 — MISCELLANEOUS

Section 10.1 — Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Michigan, without giving effect to any choice of law or conflict of laws principles that would cause the application of the laws of any other jurisdiction. Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of the State of Michigan and the United States District Court for the Eastern District of Michigan for any action or proceeding arising out of or related to this Amendment that is not subject to arbitration under Article 9 hereof, and each Party irrevocably waives any objection that it may now or hereafter have to the laying of venue of any such action or proceeding in such courts.

Section 10.2 — Entire Agreement. This Amendment, together with the Agreement (including all exhibits, schedules, and annexes thereto and Statement of Work No. 1, each as amended hereby), and upon execution by both Parties, the Derivative Works Side Letter, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral or written agreements, understandings, representations, warranties, and negotiations between the Parties relating to the dormancy extension, scope reduction, fee restructuring, and the other matters addressed herein.

Section 10.3 — Effect on Agreement. Except as expressly modified, amended, or supplemented by this Amendment, all terms, conditions, covenants, representations, warranties, and provisions of the Agreement remain in full force and effect and are hereby ratified and confirmed in all respects. The Agreement, as modified by this Amendment, shall be read and construed as a single integrated agreement. In the event of any conflict or inconsistency between the provisions of this Amendment and the provisions of the Agreement, the provisions of this Amendment shall control and govern.

Section 10.4 — Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Execution and delivery of this Amendment by means of electronic signature (including DocuSign or other similar electronic signature platform) or by delivery of a portable document format (.pdf) copy of the executed signature page shall be deemed to constitute original execution and delivery for all purposes, and each such copy shall be given the same legal effect, validity, and enforceability as an originally signed agreement.

Section 10.5 — Notices. All notices, demands, consents, requests, and other communications required or permitted to be given under this Amendment shall be in writing and shall be delivered in accordance with the notice provisions of the Agreement, addressed to the Parties at the following addresses (or at such other address as a Party may specify by written notice in accordance with this Section):

If to Licensee:

Vantage Mobility Systems Corp.

Attn: Martin G. Cross, General Counsel

4100 Industrial Parkway Sterling Heights, MI 48312

Email: mcross@vantagemobility.com

With a copy (which shall not constitute notice) to:

Calderwood & Harkness LLP

Attn: Bernard Crawford

600 Renaissance Center, Suite 3200 Detroit, MI 48243

Email: bcrawford@calderwoodharkness.com

If to Licensor:

Meridian Code Technologies, Inc.

Attn: Priya Ramaswamy, General Counsel & Corporate Secretary

2750 Orchard Blvd., Suite 400 Santa Clara, CA 95054

Email: pramaswamy@meridiancode.com

With a copy (which shall not constitute notice) to:

Redstone Whitaker LLP

Attn: Alan M. Briscoe

555 Mission Street, Suite 2800 San Francisco, CA 94105

Email: abriscoe@redstonewhitaker.com

Section 10.6 — Waiver. No waiver of any provision of this Amendment or the Agreement shall be effective unless set forth in a written instrument signed by the Party granting such waiver. No failure or delay by either Party in exercising any right, remedy, power, or privilege under this Amendment or the Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. The rights and remedies provided herein are cumulative and not exclusive of any other rights or remedies provided by law or under the Agreement.

Section 10.7 — Severability. If any provision of this Amendment is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction or an arbitral tribunal, such invalidity, illegality, or unenforceability shall not affect any other provision of this Amendment, and the remaining provisions shall continue in full force and effect. The Parties shall negotiate in good faith to replace any invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that, to the greatest extent possible, achieves the original intent and economic effect of the invalid, illegal, or unenforceable provision.

Section 10.8 — Third-Party Beneficiaries. This Amendment is entered into solely for the benefit of the Parties and their respective successors and permitted assigns. Nothing in this Amendment, express or implied, is intended to or shall confer upon any other person or entity (including, without limitation, Kestrel Capital Partners, LP, Pinnacle National Bank, N.A., Hargrove Technical Consulting, LLC, or any other person or entity) any rights, benefits, or remedies of any nature whatsoever under or by reason of this Amendment, and no such person or entity shall be deemed a third-party beneficiary of this Amendment or any provision hereof.

Section 10.9 — Fees and Expenses. Each Party shall bear its own costs, fees, and expenses (including attorneys' fees, consultant fees, and other professional fees and expenses) incurred in connection with the negotiation, preparation, execution, and delivery of this Amendment. Neither Party shall be entitled to recover from the other Party any costs, fees, or expenses incurred in connection with this Amendment, except as may be expressly provided in Article 9 with respect to the allocation of arbitration costs.

[Remainder of this page intentionally left blank. Signature page follows.]

IN WITNESS WHEREOF, the Parties have caused this Amendment No. 1 to be executed by their duly authorized representatives as of the date first written above.

VANTAGE MOBILITY SYSTEMS CORP.

By: ________

Name: Thomas R. Keating

Title: Chief Executive Officer

Date: ________

MERIDIAN CODE TECHNOLOGIES, INC.

By: ________

Name: Jeffrey N. Castellano

Title: Chief Executive Officer

Date: ________

EXHIBIT A TO AMENDMENT NO. 1

AMENDED FEE SCHEDULE

The following table sets forth the restructured fee components under the Agreement, as amended by Amendment No. 1:

Application of Maintenance Fee Credit ($2,400,000):

(a) $1,200,000 applied to remaining Integration Services Fees (Milestones 4 and 5 for Rescoped Platforms), reducing remaining integration services balance from $640,000 to $0, with a net credit balance of $560,000 carried forward and applicable to future fees under the Agreement.

(b) $1,200,000 applied to future Annual Maintenance & Support Fees payable by Licensee upon and following the Reactivation Date, to be credited against the first Annual Maintenance & Support Fees invoiced after reactivation until the credit is fully exhausted.

Summary of Fees Paid and Credits:

EXHIBIT B TO AMENDMENT NO. 1

AMENDED MILESTONE SCHEDULE (STATEMENT OF WORK NO. 1)

The following table sets forth the revised milestone schedule under Statement of Work No. 1, as amended by Amendment No. 1, reflecting only the Rescoped Platforms (Argonaut-A and Argonaut-C):

Notes:

1. All milestones previously applicable to Retired Platforms (Argonaut-B, Argonaut-D, and Argonaut-E) have been deleted in their entirety from Statement of Work No. 1.

2. All milestone deadlines for pending milestones have been tolled effective March 22, 2023 (the date integration work was suspended) and shall resume upon the Reactivation Date in accordance with Section 2.2 of Amendment No. 1. The remaining time for each tolled milestone deadline shall be calculated on a day-for-day basis from the Reactivation Date, based on the remaining time that existed as of March 22, 2023.

3. Milestone fees for pending milestones are subject to the Maintenance Fee Credit in accordance with Section 4.1 of Amendment No. 1 and the adjusted fee provisions set forth in Section 4.2 of Amendment No. 1. As set forth in the Amended Fee Schedule (Exhibit A), the remaining Integration Services Fees of $640,000 for Milestones 4 and 5 are fully offset by the $1,200,000 Maintenance Fee Credit allocation, resulting in a net credit balance of $560,000 applicable to future fees.

4. Upon the Reactivation Date, the Parties shall jointly prepare and execute a revised schedule with specific calendar dates for each remaining milestone, in accordance with Section 2.2 of Amendment No. 1.

EXHIBIT C TO AMENDMENT NO. 1

KEY DATES CALENDAR (AMENDED)

The following table sets forth the key dates under the Agreement, as amended by Amendment No. 1, including original dates and amended dates where applicable:

[End of Exhibits]

Fee Component	Original Amount	Amended Amount	Status
Upfront License Fee	$8,000,000	$8,000,000 (no change)	Paid June 21, 2022
Year 1 Annual Maintenance & Support Fee	$2,400,000	$2,400,000 (no change)	Paid July 15, 2022
Year 2 Annual Maintenance & Support Fee	$2,400,000	$0 (credited in full)	Maintenance Fee Credit applied per Section 4.1
Integration Services Fees (Total)	$3,200,000	$2,560,000	$1,920,000 paid (Milestones 1–3); $640,000 remaining (Milestones 4–5 for Rescoped Platforms)
Per-Unit Runtime Royalty Cap	$4,000,000 ($80/unit × 50,000 units)	$2,000,000 ($80/unit × 25,000 units)	$0 incurred to date
Total Deal Value	$20,000,000	Recalculated per Section 4.4 of Amendment No. 1
Item	Amount
Total Fees Paid to Date	$12,320,000
Maintenance Fee Credit (Year 2 M&S Invoice)	($2,400,000)
Net Credit Balance (after application to remaining integration services)	$560,000
Remaining Annual M&S Fee Credit (applicable post-reactivation)	$1,200,000
Milestone	Platform	Description	Status	Fee
M1	Argonaut-A	Requirements specification	Completed	Paid
M2	Argonaut-A	Source-code customization	Completed	Paid
M3	Argonaut-A	Alpha integration testing	Completed (February 28, 2023)	Paid
M4	Argonaut-A	Beta integration & validation	Pending (tolled)	Subject to Maintenance Fee Credit per Section 4.1
M5	Argonaut-A	Final acceptance & deployment	Pending (tolled)	Subject to Maintenance Fee Credit per Section 4.1
M1	Argonaut-C	Requirements specification	Completed	Paid
M2	Argonaut-C	Source-code customization	Completed (January 15, 2023)	Paid
M3	Argonaut-C	Alpha integration testing	Pending (tolled)	Subject to Maintenance Fee Credit per Section 4.1
M4	Argonaut-C	Beta integration & validation	Pending (tolled)	Subject to Maintenance Fee Credit per Section 4.1
M5	Argonaut-C	Final acceptance & deployment	Pending (tolled)	Subject to Maintenance Fee Credit per Section 4.1
Date	Event	Original / Amended
June 21, 2022	MESLSA Effective Date	Original

June 21, 2022	Upfront License Fee ($8,000,000) paid	Original
July 15, 2022	Year 1 Annual Maintenance & Support Fee ($2,400,000) paid	Original
January 15, 2023	Argonaut-C Milestone 2 (source-code customization) completed	Original
February 28, 2023	Argonaut-A Milestone 3 (alpha integration testing) completed	Original
March 14, 2023	VMS Board of Directors approves Project Argonaut rescoping	Original
March 22, 2023	Integration work suspended; tolling of deadlines begins	Original
July 1, 2023	Licensor issues Year 2 Annual Maintenance & Support Fee invoice ($2,400,000) (Disputed Invoice)	Original
July 14, 2023	VMS dormancy notice sent to MeridianCode pursuant to Section 9.4	Original
August 3, 2023	MeridianCode acknowledges Dormancy Status in writing	Original
August 10, 2023	VMS provides material contract notification to Pinnacle National Bank, N.A.	Original
December 21, 2023	Original Section 4.3 integration testing deadline (18 months from Effective Date)	Superseded by Adjusted Section 4.3 Deadline per Section 5.1 of Amendment No. 1
June 21, 2024	24-month anniversary of Effective Date (fee forfeiture cliff under original Section 9.1)	Mooted by Section 4.5 of Amendment No. 1 (no forfeiture of prepaid fees)
August 3, 2024	Original 12-month dormancy cap under Section 9.4	Superseded; extended to August 3, 2025 per Section 2.1 of Amendment No. 1
August 3, 2025	Extended dormancy cap date (24 months from Licensor's Dormancy Status acknowledgment)	Amended per Section 2.1 of Amendment No. 1
To Be Determined	Reactivation Date (upon delivery of Reactivation Notice by Licensee with not less than 60 days' prior written notice)	Amended per Section 2.3 of Amendment No. 1
Reactivation Date + 30 days	Licensor to restore full support and maintenance services	Amended per Section 2.3(a) of Amendment No. 1
Reactivation Date + 60 days	Licensor to update Licensed Product to then-current minor version at no additional charge	Amended per Section 2.3(b) of Amendment No. 1
Reactivation Date + 18 months	Adjusted Section 4.3 Deadline (Licensee must commence integration testing on at least two Rescoped Platforms)	Amended per Section 5.1 of Amendment No. 1
June 20, 2027	MESLSA expiration (end of 5-year term)	Original (unchanged)

DRAFT — PRIVILEGED & CONFIDENTIAL — PREPARED BY CALDERWOOD & HARKNESS LLP C&H Matter No. 1007-00008
AMENDMENT NO. 1 TO MASTER EMBEDDED SOFTWARE LICENSE AND SERVICES AGREEMENT
Dormancy Extension, Scope Reduction, and Fee Credit
Amendment to the Master Embedded Software License and Services Agreement dated June 21, 2022
by and between
VANTAGE MOBILITY SYSTEMS CORP.
and
MERIDIAN CODE TECHNOLOGIES, INC.
[●], 2023
AMENDMENT NO. 1 TO MASTER EMBEDDED SOFTWARE LICENSE AND SERVICES AGREEMENT
This Amendment No. 1 (this "Amendment") to the Master Embedded Software License and Services Agreement is entered into as of [●], 2023 (the "Amendment Effective Date"), by and between:
VANTAGE MOBILITY SYSTEMS CORP., a corporation duly organized and existing under the laws of the State of Delaware, with its principal place of business located at 4100 Industrial Parkway, Sterling Heights, MI 48312 (the "Licensee" or "VMS");
and
MERIDIAN CODE TECHNOLOGIES, INC., a corporation duly organized and existing under the laws of the State of California, with its principal place of business located at 2750 Orchard Blvd., Suite 400, Santa Clara, CA 95054 (the "Licensor" or "MeridianCode").
Each of VMS and MeridianCode is sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Parties entered into that certain Master Embedded Software License and Services Agreement, dated as of June 21, 2022 (the "MESLSA" or the "Agreement"), pursuant to which Licensor granted Licensee a worldwide, non-exclusive license to integrate Licensor's proprietary ATLAS-RT™ embedded real-time operating system, Version 4.2 (as subsequently updated to Version 4.2.3) (the "Licensed Product"), into Licensee's next-generation adaptive vehicle platform program designated as "Project Argonaut," on the terms and conditions set forth therein;
WHEREAS, the Agreement was entered into with a total deal value of Twenty Million Dollars ($20,000,000), for a five (5)-year term commencing on the effective date of the Agreement and expiring on June 20, 2027, and the Agreement granted Licensee a worldwide license to integrate the Licensed Product into up to five (5) designated vehicle platform configurations under Project Argonaut, specifically designated as Argonaut-A, Argonaut-B, Argonaut-C, Argonaut-D, and Argonaut-E;
WHEREAS, Licensee has paid the following fees under the Agreement as of the date hereof: (a) an Upfront License Fee in the amount of Eight Million Dollars ($8,000,000), paid on June 21, 2022; (b) the Year 1 Annual Maintenance & Support Fee in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000), paid on July 15, 2022; and (c) Integration Services Fees for Milestones 1 through 3 of Statement of Work No. 1 in the aggregate amount of One Million Nine Hundred Twenty Thousand Dollars ($1,920,000), for a total of Twelve Million Three Hundred Twenty Thousand Dollars ($12,320,000) in aggregate fees paid to date;
WHEREAS, on March 14, 2023, Licensee's Board of Directors approved a strategic rescoping of Project Argonaut (the "Project Argonaut Rescoping"), pursuant to which the target vehicle platforms were reduced from five (5) to two (2) (specifically, Argonaut-A and Argonaut-C), and electrification integration was deferred to a future phase, in response to supply-chain delays in semiconductor procurement affecting Licensee's operations and portfolio-wide capital expenditure constraints applicable across Licensee's business units, and integration work under the Agreement was suspended effective March 22, 2023;
WHEREAS, at the time of such suspension: (a) with respect to Argonaut-A, Milestone 3 of 5 had been completed (alpha integration testing having been passed on February 28, 2023); (b) with respect to Argonaut-C, Milestone 2 of 5 had been completed (source-code customization having been delivered on January 15, 2023); (c) with respect to Argonaut-B, only Milestone 1 had been completed (requirements specification approved, with no code integration commenced); and (d) with respect to Argonaut-D and Argonaut-E, no integration work had been commenced, and Licensee's engineering teams had invested approximately 14,200 person-hours in Project Argonaut integration efforts through the date of suspension;
WHEREAS, Licensee provided written notice of dormancy to Licensor on July 14, 2023, pursuant to Section 9.4 of the Agreement, which notice was delivered six (6) days prior to the one hundred twenty (120)-day dormancy trigger date of July 20, 2023, and Licensor acknowledged Dormancy Status in writing on August 3, 2023, and under the terms of Section 9.4, the twelve (12)-month dormancy cap would expire on August 3, 2024, at which point the Parties would be required to renegotiate or the Agreement would be subject to termination;
WHEREAS, Licensor invoiced the Year 2 Annual Maintenance & Support Fee in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000) on July 1, 2023 (the "Disputed Invoice"), and Licensee disputes payment of the Disputed Invoice on the ground that Section 9.4 of the Agreement reduces Licensor's support obligations to critical-security-patch-only level during Dormancy Status and that the full maintenance fee is not owed for the diminished service levels actually provided during the dormancy period, and Integration Services Fees for Milestones 4 and 5 in the aggregate amount of One Million Two Hundred Eighty Thousand Dollars ($1,280,000) have not been invoiced or earned, and no per-unit runtime royalties have accrued (zero dollars ($0) of the Four Million Dollar ($4,000,000) aggregate cap);
WHEREAS, during the course of integration efforts, Licensee's engineers created three (3) derivative software modules designated DW-001, DW-002, and DW-003, comprising approximately 47,000 lines of source code, and the ownership and license-back rights with respect to such derivative works under Section 7.2 of the Agreement remain in dispute between the Parties and are to be addressed separately by the Parties pursuant to a side letter governing derivative works ownership clarification (the "Derivative Works Side Letter"); and
WHEREAS, the Parties desire to amend the Agreement to: (i) extend the dormancy period; (ii) reduce the licensed platform scope; (iii) restructure the fee schedule and credit disputed maintenance fees; (iv) adjust the per-unit runtime royalty cap; (v) revise the Section 4.3 "Use-It-or-Lose-It" deadlines; and (vi) make certain conforming changes, all as more particularly set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the sufficiency of which is hereby acknowledged, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 — Defined Terms. All capitalized terms used but not otherwise defined in this Amendment shall have the respective meanings ascribed to such terms in the Agreement. In addition to the defined terms set forth in the Agreement, the following terms shall have the meanings set forth below when used in this Amendment:
(a) "Adjusted Royalty Cap" has the meaning set forth in Section 4.3 of this Amendment.
(b) "Adjusted Section 4.3 Deadline" has the meaning set forth in Section 5.1 of this Amendment.
(c) "Amendment" means this Amendment No. 1 to the Master Embedded Software License and Services Agreement.
(d) "Amendment Effective Date" means the date first written above.
(e) "Derivative Works Side Letter" means the separate side letter between the Parties governing derivative works ownership clarification, as referenced in Article 6 of this Amendment.
(f) "Disputed Invoice" means the Year 2 Annual Maintenance & Support Fee invoice in the amount of $2,400,000 issued by Licensor on July 1, 2023.
(g) "Extended Dormancy Period" has the meaning set forth in Section 2.1 of this Amendment.
(h) "Maintenance Fee Credit" has the meaning set forth in Section 4.1 of this Amendment.
(i) "Reactivation Date" means the date on which Licensee provides a Reactivation Notice to Licensor of its intent to resume active integration under the rescoped program, as set forth in Section 2.3 of this Amendment.
(j) "Reactivation Notice" means a written notice from Licensee to Licensor delivered pursuant to Section 2.3 of this Amendment, indicating Licensee's intent to resume active integration under the rescoped program.
(k) "Rescoped Platforms" means the two (2) vehicle platform configurations designated as Argonaut-A and Argonaut-C, as described in Section 3.1 of this Amendment.
(l) "Retired Platforms" means the three (3) vehicle platform configurations designated as Argonaut-B, Argonaut-D, and Argonaut-E, which are eliminated from the scope of the Agreement pursuant to Section 3.1 of this Amendment.
Section 1.2 — Interpretation. The following rules of interpretation shall apply to this Amendment: (a) all headings and captions contained herein are for convenience of reference only and shall not affect the meaning or interpretation of any provision of this Amendment; (b) the word "including" (and any derivative thereof) shall mean "including, without limitation"; (c) the singular shall include the plural and the plural shall include the singular, as the context may require; (d) references to "Sections" or "Articles" shall mean Sections or Articles of the Agreement as amended by this Amendment, unless the context clearly indicates a reference to a Section or Article of this Amendment; (e) references to "days" shall mean calendar days unless otherwise specified; (f) the terms "herein," "hereof," "hereunder," and words of similar import shall refer to this Amendment as a whole; and (g) references to any agreement, instrument, or document shall mean such agreement, instrument, or document as amended, supplemented, or modified from time to time in accordance with its terms.
ARTICLE 2 — DORMANCY EXTENSION AND REACTIVATION
Section 2.1 — Extension of Dormancy Period. Section 9.4 of the Agreement is hereby amended to extend the maximum dormancy period from twelve (12) months to twenty-four (24) months from the date of Licensor's written acknowledgment of Dormancy Status (August 3, 2023) (the "Extended Dormancy Period"). Accordingly, the dormancy cap date shall be August 3, 2025, rather than August 3, 2024 as provided under the original terms of Section 9.4 of the Agreement. During the Extended Dormancy Period, Licensor's support obligations shall remain at the critical-security-patch-only level as specified in Section 9.4 of the Agreement, and Licensor shall continue to provide such critical-security-patch-only support in accordance with the service level requirements applicable to such patches as set forth in Exhibit D to the Agreement. If the Extended Dormancy Period expires on August 3, 2025, without Licensee having provided a Reactivation Notice to Licensor in accordance with Section 2.3 of this Amendment, the Parties shall enter into a mandatory renegotiation period of sixty (60) days commencing on August 4, 2025, during which the Parties shall negotiate in good faith regarding the terms for continued engagement, and if such renegotiation period expires without the Parties reaching agreement, either Party may terminate the Agreement in accordance with the termination provisions of Section 9.4 of the Agreement, as amended hereby.
Section 2.2 — Tolling of Deadlines During Dormancy. All milestone deadlines, performance obligations, and time-based requirements under the Agreement (including, without limitation, the deadlines set forth in Section 4.3 of the Agreement, Statement of Work No. 1, and any other time-sensitive provisions of the Agreement or any exhibit thereto) shall be tolled during the entire period commencing on March 22, 2023 (the date on which integration work was suspended) through and including the Reactivation Date (the "Tolling Period"). The Tolling Period shall be calculated on a day-for-day basis. Upon the occurrence of the Reactivation Date, all tolled deadlines shall resume with the remaining time that existed as of March 22, 2023, and the Parties shall, within fifteen (15) business days following the Reactivation Date, jointly prepare and execute a revised schedule reflecting the adjusted deadlines applicable to each remaining milestone and performance obligation. For the avoidance of doubt, the tolling provisions of this Section 2.2 shall apply retroactively to the period from March 22, 2023 through the Amendment Effective Date, such that no deadlines shall be deemed to have expired during such period.
Section 2.3 — Reactivation Procedure. Licensee may reactivate the Agreement at any time during the Extended Dormancy Period by delivering a Reactivation Notice to Licensor with not less than sixty (60) days' prior written notice. The Reactivation Notice shall be delivered in accordance with the notice provisions set forth in Section 10.5 of this Amendment and shall specify the intended Reactivation Date. Upon receipt of a valid Reactivation Notice, Licensor shall take the following actions:
(a) Within thirty (30) days of the Reactivation Date, Licensor shall restore full support and maintenance services (including all service levels beyond critical-security-patch-only support) in accordance with the terms and service level commitments set forth in the Agreement, including the response time and resolution commitments specified in Exhibit E to the Agreement.
(b) Within sixty (60) days of the Reactivation Date, Licensor shall update the Licensed Product to the then-current minor version of the ATLAS-RT™ platform (which may include versions beyond Version 4.2.3) at no additional charge to Licensee, provided that such update shall not include major version upgrades (e.g., from Version 4.x to Version 5.x), which shall be subject to separate negotiation and, if applicable, additional licensing fees.
(c) Licensor shall assign a dedicated integration support team of not fewer than three (3) senior engineers to support the resumption of integration activities for the Rescoped Platforms, and such team shall remain assigned for a minimum of ninety (90) days following the Reactivation Date.
Section 2.4 — No Automatic Termination. For the avoidance of doubt, entry into or continuation of the Extended Dormancy Period shall not constitute a termination event under any provision of the Agreement, a breach of any obligation of Licensee under the Agreement, or a basis for fee forfeiture under Section 9.1 of the Agreement. The Parties expressly acknowledge that the Extended Dormancy Period is a consensual modification of the Agreement's timeline and shall not give rise to any claim by Licensor for damages, penalties, or acceleration of fees on account of Licensee's decision to enter into or remain in Dormancy Status.
ARTICLE 3 — SCOPE REDUCTION
Section 3.1 — Reduction of Licensed Platforms. The license scope under the Agreement is hereby reduced from five (5) vehicle platform configurations to two (2) vehicle platform configurations. The remaining licensed platforms shall be designated as follows:
(a) Argonaut-A; and
(b) Argonaut-C
(collectively, the "Rescoped Platforms"). All references in the Agreement, the exhibits and schedules thereto, and Statement of Work No. 1 (including all annexes, appendices, and attachments thereto) to Argonaut-B, Argonaut-D, and Argonaut-E (collectively, the "Retired Platforms") are hereby deleted in their entirety. The license granted under the Agreement shall hereafter apply solely to the Rescoped Platforms, and Licensee shall have no obligation to commence or complete integration of the Licensed Product on any Retired Platform. The elimination of the Retired Platforms from the scope of the Agreement shall not be construed as a breach or default by Licensee, and Licensor hereby waives any claim or right it may have under the Agreement arising from Licensee's decision not to proceed with integration on the Retired Platforms.
Section 3.2 — Amendment to Statement of Work No. 1. Statement of Work No. 1 attached to the Agreement is hereby amended to reflect the reduced scope as follows:
(a) All milestone deliverables, acceptance criteria, testing protocols, resource allocation schedules, and performance benchmarks applicable to Argonaut-B, Argonaut-D, and Argonaut-E are deleted in their entirety.
(b) The milestone deliverables and acceptance criteria applicable to Argonaut-A (Milestones 1 through 5) and Argonaut-C (Milestones 1 through 5) shall remain in full force and effect, subject to the tolling provisions set forth in Section 2.2 of this Amendment and the adjusted fee provisions set forth in Article 4 of this Amendment.
(c) The total number of milestones remaining under Statement of Work No. 1 shall be ten (10) (five (5) milestones for Argonaut-A and five (5) milestones for Argonaut-C), of which five (5) milestones have been completed (Milestones 1 through 3 for Argonaut-A and Milestones 1 and 2 for Argonaut-C) and five (5) milestones remain pending (Milestones 4 and 5 for Argonaut-A and Milestones 3 through 5 for Argonaut-C).
(d) The milestone fees shall be adjusted as set forth in Article 4 of this Amendment and in the amended fee schedule attached hereto as Exhibit A.
(e) The amended milestone schedule, reflecting only the Rescoped Platforms, is set forth in Exhibit B attached hereto.
Section 3.3 — No Expansion Without Consent. Licensee may not add additional vehicle platforms beyond the Rescoped Platforms to the scope of the license granted under the Agreement without the prior written consent of Licensor. Any such expansion shall require the negotiation and execution of an additional Statement of Work, and shall be subject to additional licensing fees to be negotiated by the Parties in good faith. For the avoidance of doubt, Licensor shall not be obligated to agree to any expansion of scope, and the addition of any vehicle platform beyond the Rescoped Platforms shall be at Licensor's sole discretion, provided that Licensor shall consider any such request in good faith and shall not unreasonably withhold its consent if the proposed expansion is within the capabilities of the Licensed Product and does not conflict with Licensor's existing third-party obligations.
ARTICLE 4 — FEE RESTRUCTURING
Section 4.1 — Year 2 Maintenance Fee Credit. The Parties acknowledge that Licensor invoiced the Year 2 Annual Maintenance & Support Fee in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000) on July 1, 2023 (the "Disputed Invoice"). Licensee disputes payment of the Disputed Invoice on the basis that Dormancy Status, as acknowledged by Licensor on August 3, 2023, reduced Licensor's support obligations to critical-security-patch-only level under Section 9.4 of the Agreement, and the full Annual Maintenance & Support Fee is therefore not owed for the diminished service levels actually provided during the dormancy period. In resolution of this dispute, the Parties agree as follows:
(a) The full amount of the Disputed Invoice, Two Million Four Hundred Thousand Dollars ($2,400,000), shall be credited in full (the "Maintenance Fee Credit") and shall not be payable in cash by Licensee.
(b) The Maintenance Fee Credit shall be applied as follows:
(i) One Million Two Hundred Thousand Dollars ($1,200,000) shall be credited against Integration Services Fees for Milestones 4 and 5 of Statement of Work No. 1 upon reactivation of the Agreement in accordance with Section 2.3 of this Amendment; and
(ii) One Million Two Hundred Thousand Dollars ($1,200,000) shall be credited against future Annual Maintenance & Support Fees payable by Licensee following the Reactivation Date, to be applied to the first Annual Maintenance & Support Fees invoiced after reactivation until the credit is fully exhausted.
(c) Licensee shall have no obligation to make any cash payment in respect of the Disputed Invoice, and the Disputed Invoice shall be deemed satisfied in full upon the Amendment Effective Date.
(d) During the Extended Dormancy Period, no additional Annual Maintenance & Support Fees shall be invoiced by Licensor or payable by Licensee. Licensor's obligation to provide critical-security-patch-only support during the Extended Dormancy Period shall be provided at no additional cost to Licensee.
Section 4.2 — Adjusted Integration Services Fees. The total Integration Services Fee payable under Statement of Work No. 1 is hereby reduced from Three Million Two Hundred Thousand Dollars ($3,200,000) to Two Million Five Hundred Sixty Thousand Dollars ($2,560,000), reflecting the elimination of all integration work for the three (3) Retired Platforms and the reduction in scope to the Rescoped Platforms only.
(a) Fees Paid to Date. Integration Services Fees in the aggregate amount of One Million Nine Hundred Twenty Thousand Dollars ($1,920,000) have been paid by Licensee for Milestones 1 through 3, which milestones related to integration work performed on the Rescoped Platforms (Argonaut-A and Argonaut-C). These payments are acknowledged by both Parties and remain unchanged.
(b) Remaining Integration Services Fees. The remaining Integration Services Fees for Milestones 4 and 5 applicable to the Rescoped Platforms shall be Six Hundred Forty Thousand Dollars ($640,000), reduced from the original remaining amount of One Million Two Hundred Eighty Thousand Dollars ($1,280,000).
(c) Application of Maintenance Fee Credit. After application of the One Million Two Hundred Thousand Dollar ($1,200,000) portion of the Maintenance Fee Credit allocated to Integration Services Fees under Section 4.1(b)(i), Licensee shall have a net credit balance of Five Hundred Sixty Thousand Dollars ($560,000) applicable to future fees under the Agreement (calculated as $1,200,000 credit minus $640,000 in remaining Integration Services Fees). Such net credit balance shall be applied against subsequent fees payable by Licensee under the Agreement, including Annual Maintenance & Support Fees, in the order in which such fees become due.
Section 4.3 — Adjusted Per-Unit Runtime Royalty Cap. The per-unit runtime royalty rate of Eighty Dollars ($80) per unit, as set forth in the Agreement, shall remain unchanged. The aggregate runtime royalty cap is hereby reduced from Four Million Dollars ($4,000,000) (representing fifty thousand (50,000) units at $80 per unit) to Two Million Dollars ($2,000,000) (representing twenty-five thousand (25,000) units at $80 per unit) (the "Adjusted Royalty Cap"), reflecting the reduced platform scope resulting from the elimination of the Retired Platforms. All other terms and conditions of the runtime royalty provisions set forth in the Agreement, including the reporting, invoicing, and audit provisions applicable to per-unit runtime royalties, shall remain in full force and effect without modification.
Section 4.4 — Adjusted Total Deal Value. The amended total deal value under the Agreement is recalculated as follows:
(a) Upfront License Fee: Eight Million Dollars ($8,000,000) (unchanged).
(b) Annual Maintenance & Support Fees: Year 1 fee of Two Million Four Hundred Thousand Dollars ($2,400,000) (paid), plus Annual Maintenance & Support Fees payable upon and following the Reactivation Date for the remaining term of the Agreement, less the Maintenance Fee Credit of Two Million Four Hundred Thousand Dollars ($2,400,000) applied in accordance with Section 4.1 of this Amendment.
(c) Integration Services Fee (Total): Two Million Five Hundred Sixty Thousand Dollars ($2,560,000) (reduced from $3,200,000).
(d) Per-Unit Runtime Royalty Cap: Two Million Dollars ($2,000,000) (reduced from $4,000,000).
The Parties acknowledge and agree that the restructured fee arrangement set forth in this Article 4 reflects a good-faith allocation of economic risk arising from the scope reduction and dormancy, and that neither Party has been coerced, pressured, or unduly influenced in agreeing to the terms set forth herein. The amended fee schedule is set forth in Exhibit A attached hereto and incorporated herein by reference.
Section 4.5 — No Forfeiture of Prepaid Fees. Notwithstanding anything in Section 9.1 of the Agreement to the contrary, and notwithstanding any provision of the Agreement that would otherwise provide for the forfeiture, clawback, or non-refundability of prepaid fees upon a scope reduction, termination, or dormancy event, Licensee shall not forfeit any prepaid fees as a result of the scope reduction, the dormancy, or any future termination for convenience occurring after the Amendment Effective Date. For the avoidance of doubt, the following prepaid fees shall be preserved and shall not be subject to forfeiture or clawback under any provision of the Agreement:
(a) The Upfront License Fee of Eight Million Dollars ($8,000,000), paid on June 21, 2022;
(b) The Year 1 Annual Maintenance & Support Fee of Two Million Four Hundred Thousand Dollars ($2,400,000), paid on July 15, 2022; and
(c) The Integration Services Fees for Milestones 1 through 3 in the aggregate amount of One Million Nine Hundred Twenty Thousand Dollars ($1,920,000).
Total prepaid fees preserved: Twelve Million Three Hundred Twenty Thousand Dollars ($12,320,000). In the event of a termination for convenience by either Party following the Amendment Effective Date, the disposition of such prepaid fees shall be governed by the termination and wind-down provisions of the Agreement, as modified by this Section 4.5, and in no event shall Licensor be entitled to retain any prepaid fees in excess of amounts allocable to services actually performed or deliverables actually delivered prior to the effective date of such termination.
ARTICLE 5 — AMENDMENT TO SECTION 4.3 (USE-IT-OR-LOSE-IT CLAUSE)
Section 5.1 — Revised Integration Testing Deadline. Section 4.3 of the Agreement is hereby amended and restated in its entirety as follows:
"Section 4.3 — Integration Testing Deadline. Licensee must commence integration testing on at least two (2) Rescoped Platforms within eighteen (18) months following the Reactivation Date (the 'Adjusted Section 4.3 Deadline'). The original deadline of December 21, 2023 (eighteen (18) months from the June 21, 2022 Effective Date of this Agreement) is hereby superseded and replaced in its entirety by the Adjusted Section 4.3 Deadline. For purposes of this Section 4.3, 'commence integration testing' shall mean and include, without limitation, achieving Milestone 3 (alpha integration testing) on at least one (1) Rescoped Platform and achieving Milestone 2 (source-code customization) on the remaining Rescoped Platform. Failure by Licensee to satisfy the Adjusted Section 4.3 Deadline shall constitute a material breach of this Agreement, subject to the cure provisions set forth in Section 9.2, provided that Licensor shall provide Licensee with written notice of such failure and Licensee shall have ninety (90) days from receipt of such notice to cure such failure before Licensor may exercise any remedies available under this Agreement."
Section 5.2 — Credit for Prior Integration Progress. The Parties acknowledge and agree that as of the date on which integration work was suspended (March 22, 2023), the following integration progress had been achieved:
(a) Argonaut-A: Milestone 3 (alpha integration testing) was completed, having been passed on February 28, 2023, as evidenced by the Milestone 3 Completion Certificate executed by both Parties on March 1, 2023.
(b) Argonaut-C: Milestone 2 (source-code customization) was completed, having been delivered on January 15, 2023, as evidenced by the Milestone 2 Completion Certificate executed by both Parties on January 18, 2023.
This prior integration progress shall be credited toward satisfaction of the Adjusted Section 4.3 Deadline. Specifically, upon the Reactivation Date, Licensee shall be deemed to have substantially commenced integration testing on both Rescoped Platforms for purposes of Section 4.3 of the Agreement (as amended and restated by Section 5.1 of this Amendment), subject only to: (i) completing any remaining validation or re-validation of Milestones 1 through 3 for Argonaut-A that may be necessary as a result of any updates to the Licensed Product delivered during the Extended Dormancy Period; and (ii) achieving Milestone 3 (alpha integration testing) on Argonaut-C and completing any remaining work required to advance Argonaut-C from its current status at Milestone 2 through to the level of integration progress that satisfies the requirements of the Adjusted Section 4.3 Deadline. The Parties acknowledge that, given the credit for prior progress set forth in this Section 5.2, the Adjusted Section 4.3 Deadline is intended to provide Licensee with adequate time to resume and complete integration without the risk of forfeiture or default.
ARTICLE 6 — DERIVATIVE WORKS
Section 6.1 — Reservation of Rights. The Parties acknowledge and agree that during the course of the integration efforts undertaken by Licensee's engineering teams in connection with Project Argonaut, Licensee's engineers created three (3) derivative software modules designated as follows:
(a) DW-001 — [module description to be confirmed in the Derivative Works Side Letter];
(b) DW-002 — [module description to be confirmed in the Derivative Works Side Letter]; and
(c) DW-003 — [module description to be confirmed in the Derivative Works Side Letter],
comprising in the aggregate approximately forty-seven thousand (47,000) lines of source code (collectively, the "Derivative Works"). The ownership and license-back rights governing the Derivative Works under Section 7.2 of the Agreement are the subject of a separate Derivative Works Side Letter between the Parties, the terms of which, upon execution by both Parties, shall control over any conflicting or inconsistent provisions in Section 7.2 of the Agreement with respect to the Derivative Works. Pending execution of the Derivative Works Side Letter:
(i) The status quo as of the Amendment Effective Date with respect to the Derivative Works shall be maintained in all respects;
(ii) Neither Party shall exploit, sublicense, distribute, commercialize, or otherwise make available to any third party any of the Derivative Works without the other Party's prior written consent;
(iii) Each Party shall preserve and maintain all copies of the Derivative Works (including source code, object code, and all related documentation) in its possession or control in accordance with the document retention obligations set forth in the Agreement; and
(iv) The Parties shall negotiate the terms of the Derivative Works Side Letter in good faith and shall use commercially reasonable efforts to execute the Derivative Works Side Letter within one hundred twenty (120) days of the Amendment Effective Date.
Section 6.2 — Estimated Value. The Parties acknowledge that an independent technical assessment performed by Hargrove Technical Consulting, LLC, retained by counsel for Licensee, has estimated the commercial value of the Derivative Works (DW-001, DW-002, and DW-003, collectively) at between One Million Eight Hundred Thousand Dollars ($1,800,000) and Two Million Five Hundred Thousand Dollars ($2,500,000). This valuation is referenced herein for informational purposes only and is not binding on either Party for purposes of the Derivative Works Side Letter negotiations or for any other purpose. Neither Party makes any representation or warranty as to the accuracy, completeness, or reliability of such valuation, and each Party reserves its right to obtain independent valuations and to assert alternative valuations in connection with the negotiation of the Derivative Works Side Letter.
ARTICLE 7 — REPRESENTATIONS AND WARRANTIES
Section 7.1 — Mutual Representations. Each Party hereby represents and warrants to the other Party, as of the Amendment Effective Date, as follows:
(a) Organization and Good Standing. Such Party is duly organized, validly existing, and in good standing under the laws of the state of its incorporation, and has full corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.
(b) Authority. Such Party has full corporate power and authority to enter into, execute, and deliver this Amendment, and to perform its obligations hereunder. The execution, delivery, and performance of this Amendment by such Party have been duly authorized by all necessary corporate action, including any required approval by its board of directors or equivalent governing body.
(c) Binding Obligation. This Amendment constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and other similar laws affecting creditors' rights generally from time to time in effect, and subject to general principles of equity (including concepts of materiality, reasonableness, good faith, and fair dealing), regardless of whether considered in a proceeding in equity or at law.
(d) No Conflict. The execution, delivery, and performance of this Amendment by such Party do not and will not: (i) violate, conflict with, or result in a breach of any provision of its certificate of incorporation, bylaws, or other organizational documents; (ii) violate, conflict with, or result in a breach or default under any material agreement, contract, or instrument to which such Party is a party or by which it is bound; or (iii) violate any applicable law, rule, regulation, order, judgment, or decree of any governmental authority having jurisdiction over such Party.
Section 7.2 — Licensee's Representations. Licensee hereby represents and warrants to Licensor, as of the Amendment Effective Date, as follows:
(a) Board Authorization. Licensee's Board of Directors has duly authorized the rescoping of Project Argonaut pursuant to a resolution adopted on March 14, 2023, and such resolution remains in full force and effect as of the Amendment Effective Date. Licensee's Board of Directors has further authorized the execution and delivery of this Amendment and the performance by Licensee of its obligations hereunder.
(b) Credit Facility Compliance. Licensee has complied with all notification obligations under its credit facility with Pinnacle National Bank, N.A. (the "Credit Facility"), including the material contract notification requirement set forth in Section 6.12 of the credit agreement governing the Credit Facility, and Licensee has provided the required notice to Pinnacle National Bank, N.A. on August 10, 2023, disclosing the material modification of the Agreement contemplated by this Amendment. Licensee has not received any notice of default or event of default from Pinnacle National Bank, N.A. in connection with the Agreement, the dormancy, or the scope reduction.
(c) Preservation of Records. Licensee has preserved all integration documentation, milestone completion records, testing reports, and related materials in accordance with its document retention obligations under Section 11.3 of the Agreement, and all such records remain available for inspection and audit as required by the Agreement.
Section 7.3 — Licensor's Representations. Licensor hereby represents and warrants to Licensee, as of the Amendment Effective Date, as follows:
(a) Continued Support During Dormancy. Licensor has continued to provide critical-security-patch-only support during the Dormancy Status period as required by Section 9.4 of the Agreement, and has not failed to deliver any critical security patch within the timeframes specified in the Agreement. Licensor has delivered a total of seven (7) critical security patches to Licensee during the period from August 3, 2023 through the Amendment Effective Date.
(b) No Conflicting Rights. Licensor has not granted any third-party rights to the Licensed Product (including any rights to the ATLAS-RT™ embedded real-time operating system, Version 4.2 or any subsequent version thereof) that would conflict with, diminish, or impair Licensee's rights under the Agreement as amended by this Amendment.
(c) Product Support Status. The Licensed Product (including Version 4.2.3 and any subsequent minor versions) remains fully supported by Licensor and has not been designated as end-of-life, deprecated, or scheduled for discontinuation during the remaining term of the Agreement. Licensor commits to maintaining active support for the Licensed Product through at least June 20, 2027, the expiration date of the Agreement.
ARTICLE 8 — CHANGE OF CONTROL
Section 8.1 — Confirmation of Section 12.6. Section 12.6 of the Agreement (requiring Licensor's prior written consent for assignment of the Agreement or any rights or obligations thereunder by Licensee in connection with a change of control, which consent shall not be unreasonably withheld, conditioned, or delayed) remains in full force and effect and is not modified, amended, or superseded by this Amendment. For the avoidance of doubt, a change in the direct or indirect ownership interest of Kestrel Capital Partners, LP in Licensee, or a sale, transfer, or other disposition by Kestrel Capital Partners, LP of all or a substantial portion of its equity interest in Licensee, whether by merger, consolidation, sale of assets, sale of equity interests, recapitalization, or otherwise, shall constitute a "change of control" for purposes of Section 12.6 of the Agreement and shall require Licensor's prior written consent in accordance with such Section. Nothing in this Amendment shall be construed to limit, waive, or modify the consent requirements set forth in Section 12.6 of the Agreement.
ARTICLE 9 — DISPUTE RESOLUTION
Section 9.1 — Arbitration. All disputes, controversies, or claims arising out of or relating to this Amendment, the Agreement as amended hereby, or any breach, termination, or invalidity thereof, shall be resolved by final and binding arbitration administered under the rules of the Midwest Arbitration Institute ("MAI"), as in effect at the time of filing, with the seat of arbitration in Detroit, Michigan. The following provisions shall govern any arbitration proceeding:
(a) For disputes in which the amount in controversy exceeds One Million Dollars ($1,000,000), the arbitration shall be conducted by a panel of three (3) arbitrators, one (1) appointed by each Party and the third selected by the two (2) Party-appointed arbitrators within thirty (30) days of their appointment.
(b) For disputes in which the amount in controversy is One Million Dollars ($1,000,000) or less, the arbitration shall be conducted by a single arbitrator mutually agreed upon by the Parties, or, if the Parties are unable to agree, selected by MAI in accordance with its applicable rules.
(c) The language of the arbitration shall be English.
(d) The arbitrator(s) shall render a written, reasoned award within one hundred twenty (120) days of the close of the arbitration hearing, unless extended by agreement of the Parties.
(e) Judgment upon the award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction, including the United States District Court for the Eastern District of Michigan or the Circuit Court of Macomb County, Michigan.
(f) The costs and expenses of the arbitration (including the fees of the arbitrator(s) and MAI administrative fees) shall be borne by the non-prevailing Party, unless the arbitrator(s) determine that an alternative allocation is warranted in the interests of justice.
The arbitration provisions of the Agreement, as set forth in the original dispute resolution clause thereof, remain in full force and effect and are supplemented, but not superseded, by the provisions of this Section 9.1. In the event of any conflict between the arbitration provisions of the Agreement and the provisions of this Section 9.1, this Section 9.1 shall control.
Section 9.2 — Escalation Prior to Arbitration. Before initiating arbitration pursuant to Section 9.1, the Parties shall first attempt resolution of any dispute through the following escalation procedure:
Step 1: Within fifteen (15) business days of delivery of a written dispute notice by either Party to the other Party, the Parties' respective General Counsel (Martin G. Cross for VMS and Priya Ramaswamy for MeridianCode, or their respective successors or designees) shall meet (in person or by videoconference) and confer in good faith in an effort to resolve the dispute.
Step 2: If the dispute is not resolved within the fifteen (15) business day period specified in Step 1, the dispute shall be escalated to the Parties' respective Chief Executive Officers (Thomas R. Keating for VMS and Jeffrey N. Castellano for MeridianCode, or their respective successors or designees) for an additional period of fifteen (15) business days, during which the Chief Executive Officers shall meet (in person or by videoconference) and confer in good faith in an effort to resolve the dispute.
Step 3: If the dispute remains unresolved after completion of the escalation procedures set forth in Steps 1 and 2 above, either Party may initiate arbitration by filing a demand for arbitration before MAI in accordance with Section 9.1 of this Amendment.
The escalation procedure set forth in this Section 9.2 shall be a condition precedent to the initiation of arbitration by either Party, provided that nothing in this Section 9.2 shall prevent either Party from seeking provisional or injunctive relief from a court of competent jurisdiction in circumstances where such relief is necessary to prevent irreparable harm pending the outcome of the escalation and arbitration procedures.
ARTICLE 10 — MISCELLANEOUS
Section 10.1 — Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Michigan, without giving effect to any choice of law or conflict of laws principles that would cause the application of the laws of any other jurisdiction. Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of the State of Michigan and the United States District Court for the Eastern District of Michigan for any action or proceeding arising out of or related to this Amendment that is not subject to arbitration under Article 9 hereof, and each Party irrevocably waives any objection that it may now or hereafter have to the laying of venue of any such action or proceeding in such courts.
Section 10.2 — Entire Agreement. This Amendment, together with the Agreement (including all exhibits, schedules, and annexes thereto and Statement of Work No. 1, each as amended hereby), and upon execution by both Parties, the Derivative Works Side Letter, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral or written agreements, understandings, representations, warranties, and negotiations between the Parties relating to the dormancy extension, scope reduction, fee restructuring, and the other matters addressed herein.
Section 10.3 — Effect on Agreement. Except as expressly modified, amended, or supplemented by this Amendment, all terms, conditions, covenants, representations, warranties, and provisions of the Agreement remain in full force and effect and are hereby ratified and confirmed in all respects. The Agreement, as modified by this Amendment, shall be read and construed as a single integrated agreement. In the event of any conflict or inconsistency between the provisions of this Amendment and the provisions of the Agreement, the provisions of this Amendment shall control and govern.
Section 10.4 — Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Execution and delivery of this Amendment by means of electronic signature (including DocuSign or other similar electronic signature platform) or by delivery of a portable document format (.pdf) copy of the executed signature page shall be deemed to constitute original execution and delivery for all purposes, and each such copy shall be given the same legal effect, validity, and enforceability as an originally signed agreement.
Section 10.5 — Notices. All notices, demands, consents, requests, and other communications required or permitted to be given under this Amendment shall be in writing and shall be delivered in accordance with the notice provisions of the Agreement, addressed to the Parties at the following addresses (or at such other address as a Party may specify by written notice in accordance with this Section):
If to Licensee:
Vantage Mobility Systems Corp.
Attn: Martin G. Cross, General Counsel
4100 Industrial Parkway Sterling Heights, MI 48312
Email: mcross@vantagemobility.com
With a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP
Attn: Bernard Crawford
600 Renaissance Center, Suite 3200 Detroit, MI 48243
Email: bcrawford@calderwoodharkness.com
If to Licensor:
Meridian Code Technologies, Inc.
Attn: Priya Ramaswamy, General Counsel & Corporate Secretary
2750 Orchard Blvd., Suite 400 Santa Clara, CA 95054
Email: pramaswamy@meridiancode.com
With a copy (which shall not constitute notice) to:
Redstone Whitaker LLP
Attn: Alan M. Briscoe
555 Mission Street, Suite 2800 San Francisco, CA 94105
Email: abriscoe@redstonewhitaker.com
Section 10.6 — Waiver. No waiver of any provision of this Amendment or the Agreement shall be effective unless set forth in a written instrument signed by the Party granting such waiver. No failure or delay by either Party in exercising any right, remedy, power, or privilege under this Amendment or the Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. The rights and remedies provided herein are cumulative and not exclusive of any other rights or remedies provided by law or under the Agreement.
Section 10.7 — Severability. If any provision of this Amendment is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction or an arbitral tribunal, such invalidity, illegality, or unenforceability shall not affect any other provision of this Amendment, and the remaining provisions shall continue in full force and effect. The Parties shall negotiate in good faith to replace any invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that, to the greatest extent possible, achieves the original intent and economic effect of the invalid, illegal, or unenforceable provision.
Section 10.8 — Third-Party Beneficiaries. This Amendment is entered into solely for the benefit of the Parties and their respective successors and permitted assigns. Nothing in this Amendment, express or implied, is intended to or shall confer upon any other person or entity (including, without limitation, Kestrel Capital Partners, LP, Pinnacle National Bank, N.A., Hargrove Technical Consulting, LLC, or any other person or entity) any rights, benefits, or remedies of any nature whatsoever under or by reason of this Amendment, and no such person or entity shall be deemed a third-party beneficiary of this Amendment or any provision hereof.
Section 10.9 — Fees and Expenses. Each Party shall bear its own costs, fees, and expenses (including attorneys' fees, consultant fees, and other professional fees and expenses) incurred in connection with the negotiation, preparation, execution, and delivery of this Amendment. Neither Party shall be entitled to recover from the other Party any costs, fees, or expenses incurred in connection with this Amendment, except as may be expressly provided in Article 9 with respect to the allocation of arbitration costs.
[Remainder of this page intentionally left blank. Signature page follows.]
IN WITNESS WHEREOF, the Parties have caused this Amendment No. 1 to be executed by their duly authorized representatives as of the date first written above.
VANTAGE MOBILITY SYSTEMS CORP.
By: ________
Name: Thomas R. Keating
Title: Chief Executive Officer
Date: ________
MERIDIAN CODE TECHNOLOGIES, INC.
By: ________
Name: Jeffrey N. Castellano
Title: Chief Executive Officer
Date: ________
EXHIBIT A TO AMENDMENT NO. 1
AMENDED FEE SCHEDULE
The following table sets forth the restructured fee components under the Agreement, as amended by Amendment No. 1:
Application of Maintenance Fee Credit ($2,400,000):
(a) $1,200,000 applied to remaining Integration Services Fees (Milestones 4 and 5 for Rescoped Platforms), reducing remaining integration services balance from $640,000 to $0, with a net credit balance of $560,000 carried forward and applicable to future fees under the Agreement.
(b) $1,200,000 applied to future Annual Maintenance & Support Fees payable by Licensee upon and following the Reactivation Date, to be credited against the first Annual Maintenance & Support Fees invoiced after reactivation until the credit is fully exhausted.
Summary of Fees Paid and Credits:
EXHIBIT B TO AMENDMENT NO. 1
AMENDED MILESTONE SCHEDULE (STATEMENT OF WORK NO. 1)
The following table sets forth the revised milestone schedule under Statement of Work No. 1, as amended by Amendment No. 1, reflecting only the Rescoped Platforms (Argonaut-A and Argonaut-C):
Notes:
1.  All milestones previously applicable to Retired Platforms (Argonaut-B, Argonaut-D, and Argonaut-E) have been deleted in their entirety from Statement of Work No. 1.
2.  All milestone deadlines for pending milestones have been tolled effective March 22, 2023 (the date integration work was suspended) and shall resume upon the Reactivation Date in accordance with Section 2.2 of Amendment No. 1. The remaining time for each tolled milestone deadline shall be calculated on a day-for-day basis from the Reactivation Date, based on the remaining time that existed as of March 22, 2023.
3.  Milestone fees for pending milestones are subject to the Maintenance Fee Credit in accordance with Section 4.1 of Amendment No. 1 and the adjusted fee provisions set forth in Section 4.2 of Amendment No. 1. As set forth in the Amended Fee Schedule (Exhibit A), the remaining Integration Services Fees of $640,000 for Milestones 4 and 5 are fully offset by the $1,200,000 Maintenance Fee Credit allocation, resulting in a net credit balance of $560,000 applicable to future fees.
4.  Upon the Reactivation Date, the Parties shall jointly prepare and execute a revised schedule with specific calendar dates for each remaining milestone, in accordance with Section 2.2 of Amendment No. 1.
EXHIBIT C TO AMENDMENT NO. 1
KEY DATES CALENDAR (AMENDED)
The following table sets forth the key dates under the Agreement, as amended by Amendment No. 1, including original dates and amended dates where applicable:
[End of Exhibits]
Fee Component | Original Amount | Amended Amount | Status
Upfront License Fee | $8,000,000 | $8,000,000 (no change) | Paid June 21, 2022
Year 1 Annual Maintenance & Support Fee | $2,400,000 | $2,400,000 (no change) | Paid July 15, 2022
Year 2 Annual Maintenance & Support Fee | $2,400,000 | $0 (credited in full) | Maintenance Fee Credit applied per Section 4.1
Integration Services Fees (Total) | $3,200,000 | $2,560,000 | $1,920,000 paid (Milestones 1–3); $640,000 remaining (Milestones 4–5 for Rescoped Platforms)
Per-Unit Runtime Royalty Cap | $4,000,000 ($80/unit × 50,000 units) | $2,000,000 ($80/unit × 25,000 units) | $0 incurred to date
Total Deal Value | $20,000,000 | Recalculated per Section 4.4 of Amendment No. 1
Item | Amount
Total Fees Paid to Date | $12,320,000
Maintenance Fee Credit (Year 2 M&S Invoice) | ($2,400,000)
Net Credit Balance (after application to remaining integration services) | $560,000
Remaining Annual M&S Fee Credit (applicable post-reactivation) | $1,200,000
Milestone | Platform | Description | Status | Fee
M1 | Argonaut-A | Requirements specification | Completed | Paid
M2 | Argonaut-A | Source-code customization | Completed | Paid
M3 | Argonaut-A | Alpha integration testing | Completed (February 28, 2023) | Paid
M4 | Argonaut-A | Beta integration & validation | Pending (tolled) | Subject to Maintenance Fee Credit per Section 4.1
M5 | Argonaut-A | Final acceptance & deployment | Pending (tolled) | Subject to Maintenance Fee Credit per Section 4.1
M1 | Argonaut-C | Requirements specification | Completed | Paid
M2 | Argonaut-C | Source-code customization | Completed (January 15, 2023) | Paid
M3 | Argonaut-C | Alpha integration testing | Pending (tolled) | Subject to Maintenance Fee Credit per Section 4.1
M4 | Argonaut-C | Beta integration & validation | Pending (tolled) | Subject to Maintenance Fee Credit per Section 4.1
M5 | Argonaut-C | Final acceptance & deployment | Pending (tolled) | Subject to Maintenance Fee Credit per Section 4.1
Date | Event | Original / Amended
June 21, 2022 | MESLSA Effective Date | Original
June 21, 2022 | Upfront License Fee ($8,000,000) paid | Original
July 15, 2022 | Year 1 Annual Maintenance & Support Fee ($2,400,000) paid | Original
January 15, 2023 | Argonaut-C Milestone 2 (source-code customization) completed | Original
February 28, 2023 | Argonaut-A Milestone 3 (alpha integration testing) completed | Original
March 14, 2023 | VMS Board of Directors approves Project Argonaut rescoping | Original
March 22, 2023 | Integration work suspended; tolling of deadlines begins | Original
July 1, 2023 | Licensor issues Year 2 Annual Maintenance & Support Fee invoice ($2,400,000) (Disputed Invoice) | Original
July 14, 2023 | VMS dormancy notice sent to MeridianCode pursuant to Section 9.4 | Original
August 3, 2023 | MeridianCode acknowledges Dormancy Status in writing | Original
August 10, 2023 | VMS provides material contract notification to Pinnacle National Bank, N.A. | Original
December 21, 2023 | Original Section 4.3 integration testing deadline (18 months from Effective Date) | Superseded by Adjusted Section 4.3 Deadline per Section 5.1 of Amendment No. 1
June 21, 2024 | 24-month anniversary of Effective Date (fee forfeiture cliff under original Section 9.1) | Mooted by Section 4.5 of Amendment No. 1 (no forfeiture of prepaid fees)
August 3, 2024 | Original 12-month dormancy cap under Section 9.4 | Superseded; extended to August 3, 2025 per Section 2.1 of Amendment No. 1
August 3, 2025 | Extended dormancy cap date (24 months from Licensor's Dormancy Status acknowledgment) | Amended per Section 2.1 of Amendment No. 1
To Be Determined | Reactivation Date (upon delivery of Reactivation Notice by Licensee with not less than 60 days' prior written notice) | Amended per Section 2.3 of Amendment No. 1
Reactivation Date + 30 days | Licensor to restore full support and maintenance services | Amended per Section 2.3(a) of Amendment No. 1
Reactivation Date + 60 days | Licensor to update Licensed Product to then-current minor version at no additional charge | Amended per Section 2.3(b) of Amendment No. 1
Reactivation Date + 18 months | Adjusted Section 4.3 Deadline (Licensee must commence integration testing on at least two Rescoped Platforms) | Amended per Section 5.1 of Amendment No. 1
June 20, 2027 | MESLSA expiration (end of 5-year term) | Original (unchanged)

DRAFT — PRIVILEGED & CONFIDENTIAL — PREPARED BY CALDERWOOD & HARKNESS LLP C&H Matter No. 1007-00008

AMENDMENT NO. 1 TO MASTER EMBEDDED SOFTWARE LICENSE AND SERVICES AGREEMENT

VANTAGE MOBILITY SYSTEMS CORP.

MERIDIAN CODE TECHNOLOGIES, INC.

AMENDMENT NO. 1 TO MASTER EMBEDDED SOFTWARE LICENSE AND SERVICES AGREEMENT

RECITALS

VANTAGE MOBILITY SYSTEMS CORP.

MERIDIAN CODE TECHNOLOGIES, INC.

EXHIBIT A TO AMENDMENT NO. 1

AMENDED FEE SCHEDULE

EXHIBIT B TO AMENDMENT NO. 1

AMENDED MILESTONE SCHEDULE (STATEMENT OF WORK NO. 1)

EXHIBIT C TO AMENDMENT NO. 1

KEY DATES CALENDAR (AMENDED)

Record

Parties

Dates

Amounts