Exhibit 10.08
EXECUTION COPY
AGREEMENT NO. PA-011008
CERTAIN PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT. ALL OMITTED PORTIONS HAVE BEEN
SEPARATELY FILED WITH THE SEC
ISECURETRAC(TM) CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EXCLUSIVE PRODUCT PURCHASE AND DISTRIBUTION AGREEMENT
THIS AGREEMENT is effective as of the 1st day of November, 2001 (the
"Effective Date"), by and between iSecureTrac Corporation, a Delaware
corporation, having its principal offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇
▇▇▇▇▇ ("iSecureTrac"), and ADT Security Services, Inc., a Delaware corporation
with its headquarters at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, successor in interest to SecurityLink, Inc., an Illinois Corporation
("DISTRIBUTOR").
iSecureTrac has designed and developed and manufactures the iTracker(TM)
mobile tracking device utilizing GPS and advanced communications technologies to
enable accurate tracking and real time or scheduled mapping of individuals,
mobile equipment and transportation vehicles.
DISTRIBUTOR is, to the extent provided in Section 2.9, capable of
monitoring the movement of iTracker units, and desires to purchase from
iSecureTrac, from time to time, iTracker units and associated products on the
terms and conditions described in this Agreement for resale, lease or other
distribution to its customers and/or "Service Providers" (as defined herein) in
the criminal justice marketplace in North America ("Target Market").
NOW THEREFORE, iSecureTrac and DISTRIBUTOR agree as follows:
1.0 DEFINITIONS
1.1 "Products" shall mean iTracker-ET PTUs and other specific products
available for purchase by DISTRIBUTOR under this Agreement, and any
replacements or substitutes therefor, as more fully described on
Attachment 1 hereto.
1.2 "Services" shall mean the Product support services to be provided by
iSecureTrac to DISTRIBUTOR hereunder, including, but not limited to,
training, extended warranty service and product repair services, as
more fully described on Attachment 2 hereto.
1.3 "Service Providers" shall mean third parties not affiliated with
DISTRIBUTOR that (i) provide monitoring services and products to End
Users and (ii) are selected, appointed, and authorized by DISTRIBUTOR,
with the prior written
consent of iSecureTrac (which consent shall not be unreasonably
withheld, denied, or delayed by iSecureTrac), to market, resell, and
otherwise distribute Products to End Users.
1.4 "End User" shall mean a prospective or actual user of Products or
products similar thereto within the Target Market.
1.5 This Agreement consists of the terms and conditions stated herein and
in the Attachments which are incorporated herein by reference and
consist of:
Attachment 1: Product Pricing
Attachment 2: Support Services
Exhibit A: P.O. Number SL-IST0001
Exhibit B: P.O. Number SL-IST0002
2.0 PURCHASER AND RESELLER
2.1 PRODUCT PURCHASES. During the Term of this Agreement, DISTRIBUTOR
may purchase from iSecureTrac the Products listed on Attachment 1
at the Prices indicated thereon, PROVIDED that DISTRIBUTOR's
initial purchase order submitted to iSecureTrac, P.O. number
SL-IST0001, dated June 25, 2001, a copy of which is attached hereto
as "Exhibit A" and incorporated herein by this reference, shall
state and govern the Prices for the quantities listed thereon, and
DISTRIBUTOR's Purchase Order number SL-IST0002 dated June 25, 2001
for [confidential treatment requested] "iTracker-ET PTUs" (as
defined herein) in the amount of [confidential treatment requested],
a copy of which is attached hereto as "Exhibit ▇" ("▇▇
▇▇-▇▇▇▇▇▇▇") and incorporated herein by this reference, shall state
and govern the Prices for the quantities of Products listed
thereon. Subject to the terms and conditions of this Agreement,
DISTRIBUTOR hereby agrees and commits to purchase a minimum of one
thousand (1,000) iTracker-ET PTUs during the eighteen (18) month
period from the date of DISTRIBUTOR's receipt of the first
functional iTracker-ET PTU that conforms to its "Specifications"
(as defined herein) as reasonably determined and acknowledged by
DISTRIBUTOR in writing (the "1,000 Unit Commitment" and "18 Month
Commitment Period", respectively); provided, however, that: (i) the
[confidential treatment requested] iTracker-ET PTUs ordered by
DISTRIBUTOR under ▇.▇. ▇▇-▇▇▇▇▇▇▇ shall be applied against and
count towards satisfaction of the 1,000 Unit Commitment,
notwithstanding the fact that PO SL-IST0002 was issued on June 25,
2001, prior to the Effective Date and the 18 Month Commitment
Period, (ii) all iTracker-ET PTUs ordered by DISTRIBUTOR hereunder
constituting "Cancelled Products" or "Deficient Products" (each, as
defined herein) shall be applied against and count towards
satisfaction of the 1,000 Unit Commitment, even if DISTRIBUTOR
rejects such Products and/or cancels or terminates its purchase
order therefor as provided herein; provided, further, however, that
if DISTRIBUTOR ultimately purchases any Cancelled Product or
Deficient Product which, at the time of such purchase, has already
been applied against the 1,000 Unit Commitment ("Previously Applied
Products"), then iSecureTrac's purchase of such Previously Applied
Products shall not be applied against the 1,000 Unit Commitment a
second time (the "Double Counting Prohibition"), and (iii)
iSecureTrac's sole and exclusive remedy and recourse against
DISTRIBUTOR (and DISTRIBUTOR's sole and exclusive liability to
iSecureTrac) in contract, tort, or under any other legal or
equitable theory for any breach, default, or other failure by
DISTRIBUTOR to comply with or satisfy the 1,000 Unit Commitment in
violation of the terms hereof (each, a "Purchasing Volume Default")
shall be to recoup any "Unearned Discount" previously granted to
DISTRIBUTOR on the iTracker-ET PTUs actually purchased and paid for
by DISTRIBUTOR hereunder during the 18 Month Commitment Period
applicable to the 1,000 Unit Commitment (or portion thereof in the
event of early termination of this Agreement during such period)
("Purchased Units") in accordance with Attachment 1.
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2.2 RESELLER AUTHORIZATION. iSecureTrac hereby specifically authorizes
DISTRIBUTOR to (i) resell, lease, rent or otherwise distribute
Products to End Users and Service Providers, including the exclusive
distribution of those specific Products described in Section 2.4
below, and (ii), with iSecureTrac's prior written consent (which
consent shall not be unreasonably withheld, denied, or delayed by
iSecureTrac), appoint and authorize Service Providers to resell,
lease, rent or otherwise distribute Products to End Users.
2.3 PURCHASE ORDERS. Products and Services purchased by DISTRIBUTOR
hereunder shall be ordered for delivery only through the execution or
electronic release of applicable written or electronic purchase orders
issued by DISTRIBUTOR which shall state quantity, Product
identification numbers and/or Product name, unit "Price" (as defined
herein), point of delivery ("Delivery Destination"), delivery dates,
accessories to be shipped with the Products, delivery instructions and
any other special information and shall refer to this Agreement by
agreement number. During the Term of this Agreement (including any
extension thereof) (collectively, the "Term"), iSecureTrac shall
accept, honor, and fill each purchase order issued by DISTRIBUTOR
hereunder in accordance with its terms by manufacturing, performing,
selling, providing, and supplying the ordered Products and Services to
and for DISTRIBUTOR at and for the Prices, and in compliance with all
terms, warranties, and other requirements established hereunder
therefor (collectively, "Conforming Products").
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2.4 EXCLUSIVE PRODUCTS PURCHASER AND DISTRIBUTOR. iSecureTrac is
authorized to resell 533 EMS2000I House Arrest transmitter bracelets
manufactured by Elmo Tech Ltd., Israel (the "Elmo Tech Transmitters").
iSecureTrac has configured a version of its iTracker product to
receive signals from the Elmo Tech Transmitters and, together with an
Elmo Tech Transmitter, operate as a single Personal Tracking Unit
(PTU), known as the iTracker-ET PTUs ("iTracker-ET PTUs"). iSecureTrac
hereby agrees to sell iTracker-ET PTUs ONLY to DISTRIBUTOR in the
Target Market during the Term of this Agreement and any extension
thereof. iSecureTrac and its affiliates will not, during the Term of
this Agreement and any extension thereof, directly or indirectly,
sell, lease, rent or make available in any manner, any iTracker-ET
PTUs to any person or entity in the Target Market. iSecureTrac hereby
appoints DISTRIBUTOR as the exclusive distributor in the Target Market
of iTracker-ET PTUs and related documentation and materials during the
Term, and hereby grants DISTRIBUTOR the sole and exclusive, royalty
free right and license to market, promote, offer for sale, sell,
supply, and otherwise distribute (by way of lease, rental, loan,
bailment, or otherwise), and support iTracker-ET PTUs to and for
End-Users and Service Providers in the Target Market during the Term
(the "Distribution License"). DISTRIBUTOR may sublicense any of its
rights under the Distribution License to the Service Providers, and,
may exercise all such sublicensed rights concurrently with such
Service Providers. Without limiting the foregoing, DISTRIBUTOR may
resell, lease, rent or otherwise distribute Products directly and/or
indirectly to End-Users using DISTRIBUTOR's own employees and internal
resources and/or by and through one (1) more layers of Service
Providers appointed by DISTRIBUTOR. Notwithstanding the foregoing,
iSecureTrac agrees and acknowledges that during the Term, DISTRIBUTOR
may, at its option and sole discretion, on its own and/or in
conjunction with Service Providers, promote, market, offer, sell, and
otherwise distribute to End Users in the Target Market DISTRIBUTOR's
own and third party products that compete against the Products
(including, but not limited to, the iTracker-ET PTUs) in the Target
Market, and that nothing in this Agreement shall prohibit, limit,
diminish, qualify, or otherwise affect DISTRIBUTOR's ability to do so,
nor shall anything herein impose any duty of exclusivity upon
DISTRIBUTOR.
2.5 Pricing. Products and Services are priced for sale by iSecureTrac
to DISTRIBUTOR during the Term as specified on Attachments 1 and 2
(collectively, the "Prices"). The Prices shall be fixed and firm
during the 18 Month Commitment Period of the 1,000 Unit Commitment.
Once during each twelve (12) month period of the Term thereafter,
iSecureTrac may make an increase in Prices of up to [confidential
treatment requested] percent [confidential treatment requested]and
on ninety (90) days prior notice to DISTRIBUTOR (the "Price Increase
Notice"). Each such implemented increase shall become effective for
those purchase orders issued by DISTRIBUTOR ninety (90) days after its
receipt of the Price Increase Notice. However, such Price changes
shall not effect pricing listed on any purchase orders issued before
the end of such ninety (90) day notice period. Prices shall not
increase during the Term except for Approved Price Increases
implemented in accordance with this Section 2.5. The "Price" for all
iTracker-ET PTUs hereunder shall be the "Contract Unit Price"
specified on Attachment 1.
2.6 INCONSISTENCIES IN P.O. TERMS. In the event of any inconsistencies
between the terms of this Agreement and any terms contained on any
purchase order
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delivered to iSecureTrac hereunder, the terms of this Agreement shall
govern and take priority unless such inconsistent purchase order terms
have otherwise been previously agreed to by the parties.
2.7 LICENSE. iTracker contains firmware developed and owned by
iSecureTrac. A limited, non-exclusive, irrevocable, fully paid,
royalty free, transferable license is hereby granted to DISTRIBUTOR,
in perpetuity, for distribution and use of said software on the
specific iTracker device in which said software was placed, and for no
other; provided, however, that DISTRIBUTOR may, without limitation,
distribute and sublicense any or all of its rights under such software
license to End Users and Service Providers as part of such
Distribution License. iSecureTrac shall retain all ownership of all
proprietary rights to said software. The software license granted
herein shall be deemed to be in effect upon delivery of each iTracker
unit and shall be included in its Price.
2.8 INDEPENDENT CONTRACTORS. Neither the above nor any other part of this
Agreement shall be construed as agency, legal representation,
partnership, joint venture, or any other relationship between the
parties other than being separate entities which remain independent
contractors.
2.9 DISTRIBUTOR REPRESENTATION. DISTRIBUTOR hereby represents that it is
capable or will use its reasonable best efforts to obtain the
capability to provide 7x24 monitoring of the movement of any and all
specific iTracker units (including iTracker-ET PTUs) sold to
DISTRIBUTOR under this Agreement and that, furthermore, it believes
that it has the capability to support End Users in their use of the
Products through training and other services which are designed to
ensure proper Product usage; provided, however, that each
representation and covenant made by DISTRIBUTOR as stated above shall
be conditioned upon iSecureTrac's performance of its obligations under
this Agreement and the Hosting Services Agreement. DISTRIBUTOR further
represents that it is the exclusive distributor in North America for
certain products made by Elmo Tech, Ltd. ("Elmo Tech") and that it
intends to maintain such exclusivity during the Term of this
Agreement. DISTRIBUTOR further represents that if its exclusive
distributorship of such Elmo Tech products is not maintained, then
DISTRIBUTOR will, at its option, either (i) make a volume commitment
purchase of iTracker-ET PTU's from iSecureTrac in order to maintain
the exclusivity of this Agreement pursuant to a written amendment
hereto complying with Section 14.2, or (ii) become a non-exclusive
DISTRIBUTOR of the iTracker-ET PTU's. In the event DISTRIBUTOR loses
its ability to provide iSecureTrac with the Elmo Tech components, for
any reason, either party may terminate this Agreement on sixty (60)
days prior notice to the other party without penalty or further
liability or obligation to such other party.
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3.0 PRODUCT SUBSTITUTION
3.1 NOTIFICATION. iSecureTrac shall use its best efforts to notify
DISTRIBUTOR in writing of plans and intentions to modify form, fit or
function of iTracker-ET PTUs, as soon as such plans have been
finalized by iSecureTrac.
3.2 SUBSTITUTION. iSecureTrac may develop and manufacture new versions of
the Products purchased hereunder and substitute the same for Products
then being purchased by DISTRIBUTOR at the same Price as the replaced
Products, provided that, the functionality, performance, useful life,
value, and efficiency of such substitutions equals or exceeds that of
the Products being replaced. In the event such replacement Products
replace iTracker-ET PTUs, iSecureTrac shall ensure that such
replacement Products remain compatible with standard Elmo Tech
Transmitters.
3.3 DISCONTINUANCE. In the event that iSecureTrac intends to discontinue
the manufacturing of specific types of Products (other than
iTracker-ET PTU(s)), without substitution, it shall notify DISTRIBUTOR
thereof in writing at least ninety (90) days in advance so as to
enable DISTRIBUTOR to liquidate its inventory of discontinued Products
and procure similar products elsewhere, if desired. iSecureTrac shall
not cease manufacturing any iTracker-ET PTU at any time during the
Term this Agreement, PROVIDED that it has received and accepted a
purchase order from DISTRIBUTOR for any iTracker-ET PTUs at any time
within the prior six (6) months.
3.4 COMPATIBILITY WARRANTY. Notwithstanding anything in this Agreement
(including, but not limited to, Section 3) to the contrary,
iSecureTrac represents and warrants to DISTRIBUTOR that all
iTracker-ET PTUs shall operate compatibly with standard Elmo Tech
Transmitters.
4.0 SHIPMENT
4.1. CARRIER. iSecureTrac shall select and pay for the method of shipment
and the carrier, consistent with the nature of the Products and the
hazards of transportation, as instructed in DISTRIBUTOR's purchase
order.
4.2. F.O.B./DELIVERY ADDRESS. All deliveries of Products made pursuant to
this Agreement shall be made [confidential treatment requested] to
the delivery address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇, whichever made be specified by Distributor on the purchase order.
4.3. CONFIRMED DELIVERY DATE. DISTRIBUTOR will use its best efforts to
place purchase orders with iSecureTrac at least
[confidential treatment requested] prior to delivery dates. The
delivery date on each such purchase order for iTracker-ET PTU(s) in
quantities of less than [confidential treatment requested] Units
shall automatically be deemed a
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"Confirmed Delivery Date" hereunder, and iSecureTrac shall accept
and timely fill each such purchase order issued by SERVICE PROVIDER
in accordance with its terms. Upon receipt of any purchase order
issued [confidential treatment requested] prior to the delivery
date specified thereon or for iTracker-ET PTU(s) in quantities of
more than 500 units, iSecureTrac shall promptly confirm the
delivery date designated thereon with DISTRIBUTOR, or arrange for a
mutually agreeable alternative delivery date with DISTRIBUTOR
(each, a "Confirmed Delivery Date") and shall fill each such
purchase order on its Confirmed Delivery Date in accordance with
its terms; provided, however, that if the parties fail to agree
upon an alternative delivery date for any such purchase order
within five (5) business days after iSecureTrac's receipt thereof,
DISTRIBUTOR may cancel such purchase order free of charge,
cancellation fee, or penalty, and all iTracker-ET PTUs listed on
any such cancelled purchase order ("Cancelled Products") shall
nevertheless be applied against and count towards satisfaction of
the 1,000 Unit Commitment, subject to the Double Counting Prohibition
applicable to any Previously Applied Products subsequently
purchased by DISTRIBUTOR. If iSecureTrac does not confirm any
delivery date to DISTRIBUTOR in writing within fifteen (15)
calendar days of its receipt of the applicable purchase order, the
delivery date stated thereon shall be deemed the Confirmed Delivery
Date. iSecureTrac understands and agrees that all Products
purchased by DISTRIBUTOR from iSecureTrac hereunder shall be
purchased for the purpose of resale and other distribution by
DISTRIBUTOR to third parties, and that DISTRIBUTOR may make resale
and delivery commitments to its customers based on the terms of
this Agreement.
4.4. TRANSFER OF TITLE AND RISK OF LOSS. Title to Products shall pass to
DISTRIBUTOR, and all risk of loss, damage or destruction of Products
shall be assumed by DISTRIBUTOR upon receipt of the Products at the
Chicago, IL warehouse designated by DISTRIBUTOR on its purchase order
therefor.
4.5. SHIPPING DELAY. iSecureTrac shall ship Products in a sufficiently
timely manner as to meet Confirmed Delivery Dates. In the event
iSecureTrac fails to ship Products as specified in DISTRIBUTOR's
purchase orders within fifteen (15) calendar days after the
Confirmed Delivery Date for any reason, DISTRIBUTOR may cancel such
shipment without penalty, fee, or charge, in addition to all of its
other rights and remedies under this Agreement. Notwithstanding the
above, iSecureTrac reserves the right to temporarily suspend
shipments not yet paid for by DISTRIBUTOR in the event DISTRIBUTOR
has not paid overdue invoices to iSecureTrac (i.e. invoices more
than [confidential treatment requested] days old) ("Past Due
Invoices") by providing written notice of such suspension to
DISTRIBUTOR, in which event
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shipping delays, for purpose of this paragraph, shall be deemed
tolled. Such suspended shipments shall be immediately resumed upon
iSecureTrac's receipt of payment for such Past Due Invoices.
4.6. CANCELLATION. DISTRIBUTOR may cancel part or all of any purchase
order(s) for convenience without cost or penalty, provided that such
cancellation is received by iSecureTrac more than ninety (90) days
prior to the Confirmed Delivery Date for the applicable shipment. If
iSecureTrac receives such cancellation order for convenience within
ninety (90) days of the Confirmed Delivery Date, such cancellation
shall still be effective, but iSecureTrac may charge DISTRIBUTOR
cancellation fees therefor, consisting of a percentage of the Price of
the Products so cancelled on such purchase order, in accordance with
the following schedule:
CANCELLATION RECEIVED BY ISECURETRAC CANCELLATION FEE
60 to 90 days before Confirmed Delivery Date [confidential
treatment requested]30 to 59 days before Confirmed Delivery Date
[confidential treatment requested]0 to 29 days before Confirmed
Delivery Date
[confidential treatment requested]
Cancellation fees shall accrue only for (i) purchase orders
cancelled by DISTRIBUTOR for its convenience under this Section
4.6 during the time periods listed above, and (ii) "Delayed
Shipments" cancelled by iSecureTrac under Section 4.7.
4.7. RESCHEDULING. DISTRIBUTOR may, once for each shipment ordered from
iSecureTrac, reschedule shipments of all or any portion of any firm
purchase order at any time without penalty or charge up to the
Confirmed Delivery Date determined under Section 4.4. If DISTRIBUTOR
reschedules any shipment, or part thereof, not yet paid for by
DISTRIBUTOR to a date more than six (6) calendar months from the
Confirmed Delivery Date ("Delayed Shipments"), iSecureTrac may treat
such requested delay-in-shipment as a cancellation, subject to the
penalty provisions of Section 4.7 above, upon written notice thereof
to DISTRIBUTOR within five (5) business days after its receipt of
notice of rescheduling by DISTRIBUTOR.
4.8. SHIPMENT CONDITION. iSecureTrac shall ship each Product to DISTRIBUTOR
(i) in new condition, (ii) free and clear of all liens, encumbrances,
security interests, claims, and other interests whatsoever, (iii)
properly packaged to protect against loss and damage in transit, and
(iv) with one (1) complete up-to-date installation/activation
instructions for each Product shipped (collectively, "Activation
Documentation"). As part of the Distribution License, DISTRIBUTOR and
each Service Provider may reproduce, modify, and distribute the
Activation Documentation
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and/or any other tangible or intangible user or Product documentation
or materials to End Users under iSecureTrac's, DISTRIBUTOR's, or the
Service Provider's respective trademarks, PROVIDED that iSecureTrac's
copyright notices in such Activation Documentation are not removed or
altered.
5.0 CHARGES AND PAYMENTS
5.1. INVOICES. iSecureTrac shall render invoices to DISTRIBUTOR for
delivered Products upon or after shipment thereof to their Delivery
Destination, and shall, except for Extended Warranty Services, ▇▇▇▇
for all Services in arrears after the performance thereof.
iSecureTrac shall issue a separate invoice for each purchase order
containing the following information ("Invoice(s)"): (i) the
description and quantity of Products and Services ordered; (ii) the
quantity of Products shipped and Services performed; (iii) the
Delivery Destination; (iv) the date of shipment or performance; (v)
the purchase order number; (vi) the Price hereunder for each
Product and Service; (vii) the total Price for the purchase order;
and (viii) any applicable taxes and discounts hereunder. All
Invoices, bills of lading, and freight bills for the Products shall
be delivered to DISTRIBUTOR at the "▇▇▇▇ To" address shown on the
face of DISTRIBUTOR's purchase order. All charges shall be set
forth in U.S. dollars. Invoices for Conforming Products shall be
due and payable net [confidential treatment requested] days from
the date of DISTRIBUTOR's receipt of such Conforming Products and
an Invoice therefor (the "Payment Due Date"). Payment of any
Invoice by DISTRIBUTOR, in whole or in part, shall not waive or
abridge any of DISTRIBUTOR's rights or remedies under this
Agreement, including, but not limited to, under the "Product
Warranty."
5.2. TAXES. Product Prices are exclusive of all taxes however designated.
DISTRIBUTOR shall be responsible for the payment of only all
applicable sales and/or use taxes assessed and measured directly by
and upon the Prices paid for its purchases of Products and Services
hereunder.
5.3. SHIPPING CHARGES. The cost of shipping Products, including applicable
insurance, to DISTRIBUTOR will be included in the Product Prices. Cost
of shipping Products back to iSecureTrac for repair will be borne by
the DISTRIBUTOR.
5.5. INSPECTION. All Products shall be subject to inspection
and testing by DISTRIBUTOR prior to acceptance and payment during
the [confidential treatment requested] days period before the
Payment Due Date. Any Product requiring installation or activation
shall not be deemed finally accepted until DISTRIBUTOR establishes
that such Product is a Conforming Product
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through appropriate testing and/or use after installation and
activation.
5.6. REJECTION. DISTRIBUTOR may, at iSecureTrac's sole cost, reject,
return, withhold payment of the Price for, and/or terminate the
purchase order for, the following Products on or before their
Payment Due Dates ("Deficient Product(s)"): (i) any excess or
unordered Products; (ii) any Product that (A) fails to operate as
described in its written specifications or user documentation
(collectively, "Specifications"), or (B) is defective or otherwise
fails to conform in any respect to any applicable warranty or
requirement hereunder; (iii) any Product delivered to its Delivery
Destination more than 15 days after its Confirmed Delivery Date;
and (iv) any Product delivered to any location other than its
Delivery Destination. No amount or payment shall accrue or be due
hereunder for any Deficient Product rejected and re-shipped by
DISTRIBUTOR to iSecureTrac prior to its Payment Due Date, but all
such Deficient Products shall nevertheless be applied against and
count towards satisfaction of the 1,000 Unit Commitment, subject to
the Double Counting Prohibition applicable to any Previously
Applied Products subsequently purchased by DISTRIBUTOR. Any
Products not rejected and shipped back to iSecureTrac by
DISTRIBUTOR before the Payment Due Date may be deemed by
iSecureTrac to have been accepted by DISTRIBUTOR.
6.0 WARRANTY
6.1. PRODUCT WARRANTY. Each Product purchased hereunder is warranted by
iSecureTrac to operate in onformity with its Specifications and be
free from defects in design, materials, and workmanship, under normal
use for a period of one (1) year following its date of delivery to
DISTRIBUTOR at its Delivery Destination (the "Product Warranty"). The
Product Warranty shall survive any expiration or termination of this
Agreement, and any testing, inspection, delivery, payment, and
acceptance of any Product by DISTRIBUTOR, and shall continue with
respect to any unresolved warranty claim made by DISTRIBUTOR for any
Product during its one (1) year warranty period. The Product Warranty
on each Product shall be freely and fully assignable and transferable
by DISTRIBUTOR to its customers (whether such customer is an End User
or Service Provider), and may be further reassigned and re-transferred
by Service Providers to End Users or other Service Providers.
6.2. REMEDY. iSecureTrac's obligation under the Product Warranty is limited
to repairing or replacing, at iSecureTrac's sole option, free of
charge, F.O.B. at iSecureTrac's designated facility, within the time
required hereunder, any Product which fails to conform to such Product
Warranty within the one year warranty period described above, such
that the repaired
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or replacement Product redelivered to DISTRIBUTOR is a Conforming
Product.
6.3. PROCEDURE. Unless waived by iSecureTrac, DISTRIBUTOR will obtain a
return authorization from iSecureTrac prior to returning any defective
or non-conforming Product (collectively, "Defective Products").
DISTRIBUTOR will provide iSecureTrac with a written description of the
claimed defect. Within five (5) business days of its receipt of each
warranty claim, iSecureTrac shall issue and deliver to DISTRIBUTOR
either (i) a return authorization for each Defective Product, or (ii)
a written denial of such warranty claim, accompanied by an explanation
therefor ("Claim Denial"). Any warranty claim not rejected by
iSecureTrac in a Claim Denial timely delivered to DISTRIBUTOR within
the aforementioned time period shall be deemed accepted by iSecureTrac
on such date, and the requirement for a return authorization therefor
shall be waived. DISTRIBUTOR may contest any Claim Denial in its sole
discretion.
6.4. EXPEDITED REPLACEMENT. iSecureTrac will repair, replace, and ship
Conforming Products, repaired or replaced under this Product Warranty,
back to DISTRIBUTOR at such address as may be specified by
DISTRIBUTOR, within the fastest time reasonably possible, but in all
events no later than thirty (30) days after issuing (or waiving) a
return authorization therefor.
6.5. LIMITATIONS. The foregoing warranty will not apply if the Product
fails to function due to abuse, misuse, accident, neglect,
unauthorized repair, or use other than ordinary use after delivery, in
each case (i) by parties other than iSecureTrac, its employees,
agents, or contractors - not including DISTRIBUTOR, and (ii) in
violation of the core Product documentation delivered to DISTRIBUTOR
with each Product. The foregoing warranty does not apply to Elmo Tech
Transmitters (Elmo Tech Transmitters are subject to a separate
warranty available from Elmo Tech) or iTracker-ET PTU components
received from DISTRIBUTOR or Elmo Tech, Ltd.
EXCEPT AS OTHERWISE PROVIDED HEREIN, THE ISECURETRAC PRODUCT
WARRANTY STATED ABOVE IS GIVEN IN LIEU OF ALL OTHER WARRANTIES
REGARDING THE PRODUCTS, EXPRESS OR IMPLIED, WHICH ARE
SPECIFICALLY EXCLUDED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7.0 INDEMNIFICATION AND INSURANCE
11
7.1. SCOPE. iSecureTrac will defend, indemnify, and hold DISTRIBUTOR, its
affiliates, and all of its and their respective directors, officers,
employees, and agents (all of the foregoing entities and individuals
being collectively referred to herein as the "DISTRIBUTOR
Indemnitees") harmless from and against any claim, action, damages,
liability, cost (including attorneys fees at trial and on appeal),
expense, or loss (collectively, "Liability") arising out of or
resulting from any and all claims that the Products or any part
thereof or any use, offer, sale, or distribution thereof by
DISTRIBUTOR in accordance with the Distribution License infringes upon
or misappropriates any United States patent, copyright, trade secret,
trademark, service ▇▇▇▇, or other proprietary right (collectively,
"Intellectual Property Rights"). iSecureTrac agrees to defend any suit
or proceeding brought against any DISTRIBUTOR Indemnitee which is
based on such claim.
7.2. CONDITIONS. The above stated indemnity is subject to the following
conditions; provided, however that any failure to satisfy such
conditions shall excuse iSecureTrac from its indemnification
obligation hereunder only to the extent (if any) that it is prejudiced
thereby:
(a) DISTRIBUTOR must promptly notify iSecureTrac in writing of
any claim of infringement covered by such indemnity upon
obtaining actual knowledge thereof and provide iSecureTrac,
at its reasonable request and at iSecureTrac's expense, with
the reasonable assistance, information and cooperation
necessary to defend against any such claim or litigation;
(b) DISTRIBUTOR must grant iSecureTrac sole authority to defend
or settle such claim with counsel reasonably satisfactory to
DISTRIBUTOR, except that the iSecureTrac shall not settle
any such claim without first obtaining DISTRIBUTOR's prior
written consent, unless: (i) such settlement contains no
finding or admission of fault or violation of law on the
part of DISTRIBUTOR, (ii) the sole relief provided in such
settlement is monetary damages that are paid in full by
iSecureTrac, and (iii) if iSecureTrac fails to retain
counsel or otherwise defend any such claim, DISTRIBUTOR may,
in DISTRIBUTOR's sole discretion and without prior notice to
or approval from iSecureTrac, defend or settle such claim at
iSecureTrac's sole cost and expense;
(c) Any costs paid by iSecureTrac for such claim pursuant to its
indemnity hereunder that are incurred or recovered in such
litigation or negotiation shall accrue to iSecureTrac's
account; and
12
(d) If a preliminary injunction or final judgment is entered
against DISTRIBUTOR's use, resale, distribution, or
operation of any Product because of any alleged
infringement, then in addition to the indemnity provided
herein, iSecureTrac, at its own expense and option shall (i)
modify or replace the Product so that it becomes
non-infringing while providing equivalent performance,
functionality, and compatibility; or (ii) procure for
DISTRIBUTOR the right to continue to use and resell
Products; or (iii) in the event iSecureTrac has been unable
to achieve such procurement or modifications despite its
best efforts, to refund to DISTRIBUTOR the Price DISTRIBUTOR
paid for such Product or Products less a straight line
depreciation for actual use computed based on a five (5)
year useful life.
7.3. MUTUAL INDEMNIFICATION. Each party (the "Indemnitor") will defend,
indemnify, and hold the other party (the "Indemnitee") harmless for
and against any Liability arising out of or resulting from: (i) the
negligence or willful misconduct of the Indemnitor, its employees,
and agents; and/or (ii) any breach of this Agreement by the
Indemnitor, including any breach, falsity, violation, or inaccuracy
of or in any representation, warranty, obligation, or covenant made
by the Indemnitor hereunder.
7.4. PRODUCTS LIABILITY INDEMNIFICATION. iSecureTrac will defend,
indemnify, and hold the DISTRIBUTOR harmless for and against any
Liability arising out of or resulting from any claim alleging any
defect or deficiency in or involving the Products (whether in design,
manufacturing, warnings, instructions, or otherwise), including, but
not limited to, any claim based on products liability, strict
liability in tort, negligence, breach of warranty, or any other
legal or equitable theory, subject to the limitations described in
Section 8.0 below for acts committed by individuals being monitored
using the Products under any home arrest or curfew monitoring program
("Monitored Participants").
7.5. SEC DISCLOSURE INDEMNIFICATION. iSecureTrac will defend, indemnify,
and hold the DISTRIBUTOR Indemnitees harmless for and against any
Liability arising out of or resulting from any "SEC Disclosure" by
iSecureTrac and/or any related "SEC Disclosure Matters" (each, as
defined herein), including, but not limited to, any claim brought by
any third party (including, but not limited to, any governmental
regulatory authority or any past, present, future, or potential
shareholder or investor in iSecureTrac) based upon its use of or
reliance upon any SEC Disclosure or alleging any violation of any
applicable federal or state securities laws or the rules and
regulations of the Securities Exchange Commission or any other state
or federal governmental regulatory authority (collectively,
13
"Securities Laws") involving any SEC Disclosure.
7.6. INSURANCE. iSecureTrac agrees to obtain and maintain the following
insurance policies throughout the Term at iSecureTrac's sole cost and
expense (collectively, "Insurance Policies"): (1) Workers'
Compensation insurance as prescribed by the law of the state in which
iSecureTrac's obligations under this Agreement are performed, (2)
employer's liability insurance with limits of at least $500,000 for
each occurrence, and (3) comprehensive general liability insurance
with limits of $1,000,000 for each occurrence, and specific
contractual liability insurance to cover legal liability under this
Agreement (the "CGL Policy"). All Insurance Policies shall: (i) be
primary without right of contribution from any insurance maintained
by DISTRIBUTOR; (ii) be issued by duly qualified insurance carriers
reasonably satisfactory to DISTRIBUTOR; and (iii) require that
DISTRIBUTOR be given at least thirty (30) days prior written notice
of cancellation, non-renewal, or any material change therein.
Contemporaneously with iSecureTrac's execution of this Agreement,
iSecureTrac shall deliver to DISTRIBUTOR Certificates of Insurance
evidencing the Insurance Policies required by this Agreement.
8.0 LIMITATION OF LIABILITY
EXCEPT AS OTHERWISE PROVIDED BELOW, IN NO EVENT WILL EITHER DISTRIBUTOR OR
ISECURETRAC BE LIABLE FOR (i) SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, OR (ii) ANY DAMAGES RESULTING FROM LOSS OF DATA, FRUSTRATION OF
ECONOMIC OR BUSINESS EXPECTATIONS, LOSS OF PROFITS, REVENUES OR USE ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR THE USE OR PERFORMANCE OF ANY
PRODUCTS OR SERVICES SOLD OR PROVIDED HEREUNDER, REGARDLESS OF WHETHER
DISTRIBUTOR OR ISECURETRAC, AS APPLICABLE, HAS BEEN NOTIFIED IN ADVANCE OF SUCH
DAMAGES EXCEPT TO THE EXTENT THAT ANY SUCH DAMAGES, WHETHER DESCRIBED IN POINT
(i) OR (ii), ARISE OUT OF, RELATE TO, OR ARE COVERED BY: (A) A PARTY'S BREACH OF
ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR APPLICABLE LAW PERTAINING TO
INTELLECTUAL PROPERTY RIGHTS OR CONFIDENTIALITY; (B) ANY REPRESENTATION,
WARRANTY, OR INDEMNITY GIVEN BY A PARTY FOR OR AGAINST PRODUCT LIABILITY OR
INFRINGEMENT OF A THIRD PARTY'S INTELLECTUAL PROPERTY RIGHTS; (C) A PARTY'S
GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR VIOLATION OF THE LAW; (D) PERSONAL
INJURY OR DEATH; OR (E) ANY RESPONSIBILITY, OBLIGATION, OR INDEMNITY OF
ISECURETRAC HEREUNDER FOR OR PERTAINING TO ANY SEC DISCLOSURE OR SEC DISCLOSURE
MATTER.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT,
14
iSecureTrac SPECIFICALLY DISCLAIMS ANY LIABILITY OR RESPONSIBILITY FOR THE ACTS
OF ANY MONITORED PARTICIPANT MAKING USE OF ANY SPECIFIC iTracker DEVICE.
DISTRIBUTOR hereby acknowledges that it recognizes and fully understands
that successful operation of iTracker units is highly dependent on wireless
communication and locational devices not provided by iSecureTrac and outside of
the control or scope of iSecureTrac Products. iSecureTrac DISCLAIMS ANY
LIABILITY OR RESPONSIBILITY FOR THE OPERATION OF GPS SATELLITES OR COMMERCIAL
COMMUNICATIONS SYSTEMS USED IN CONNECTION WITH ITS PRODUCTS.
9.0 GOOD TITLE
iSecureTrac hereby warrants that it has and will convey to DISTRIBUTOR sole
and good title to all Products purchased by DISTRIBUTOR on the date of shipment.
All Products purchased by DISTRIBUTOR shall be free and clear from all liens,
encumbrances and charges, at the time of such purchase. Should iSecureTrac ship
any Products to DISTRIBUTOR which are subject to any liens, encumbrances or
claims by third parties, same shall be a material breach of this Agreement by
iSecureTrac. In addition, iSecureTrac shall promptly notify DISTRIBUTOR of
actual and prospective claims in writing and indemnify and hold DISTRIBUTOR
harmless from all liability, cost and expense which may result from such liens
and claims. DISTRIBUTOR may, at its sole discretion, pay and discharge any valid
liens and claims against delivered Products and set off the amount of such
payments against any sums due iSecureTrac hereunder.
10.0 SUPPORT SERVICES
iSecureTrac shall provide DISTRIBUTOR with the Services described in
Attachment 2 hereto, at the rates listed, upon DISTRIBUTOR's submission of a
purchase order for such Services. iSecureTrac shall continue to provide and
perform the Services for DISTRIBUTOR so long as any Product remains activated,
continuing even after any completion, termination, or expiration of this
Agreement under any circumstances whatsoever (collectively, "Agreement
Termination"), including, but not limited to, any termination of this Agreement
by either party for the other party's material breach hereof.
11.0 NOTICES
Any notices required to be given hereunder will be given in writing and
sent to the other party, postage or transmission cost prepaid and properly
addressed, at the address indicated below:
To iSecureTrac:
15
iSecureTrac Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: SecurityLink Account Manager
To DISTRIBUTOR:
SecurityLink/ADT Security Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇ ▇▇▇▇▇
With a copy to:
ADT Security Services, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Esq., General Counsel
Notices shall be deemed given when delivered in person or received via
registered or certified mail, or via a nationally recognized overnight courier,
or acknowledged facsimile transmission, provided such acknowledgement is machine
generated.
12.0 INFORMATION RELEASES
12.1. PRESS RELEASES. Except as may be required by law or the rules or
regulations of the Securities and Exchange Commission (subject to
compliance with the terms provided below), prior to the disclosure
or dissemination of any publication, notice, advertising or
promotional material, public statement, or press release by either
party regarding the existence or subject matter of this Agreement,
or any transactions contemplated hereby (collectively, "Public
Disclosures"), written consent must be obtained from the other party
as to content, means and timing of such Public Disclosure, which
consent may be granted or denied in such other party's sole
discretion. The Public Disclosure shall be reviewed by the
non-disclosing party as expeditiously as reasonable upon receipt.
The following terms shall apply to any Public Disclosure made
pursuant to any Securities Laws, including, but not limited to, the
rules or regulations of the Securities and Exchange Commission
(each, an "SEC Disclosure"): (i) except to the extent specifically
required by Securities Laws, no SEC Disclosure shall, directly or
indirectly, expressly or implicitly, identify or refer to the
non-disclosing party or any of its affiliates by name or otherwise
(the "Anonymity Requirement"), (ii) no SEC Disclosure referencing,
involving, or pertaining to this Agreement, the transactions
16
hereunder, or the non-disclosing party shall be made, published, or
released without first obtaining the non-disclosing party's prior
written confirmation that each portion of such SEC Disclosure
referencing, involving, or pertaining to this Agreement, the
transactions hereunder, or the non-disclosing party ("Relevant SEC
Disclosure Provision(s)") complies with the Anonymity Requirement,
(iii) only the Relevant SEC Disclosure Provisions (as opposed to
the full text of the SEC Disclosure of which such Relevant SEC
Disclosure Provisions are a part) shall be subject to the
non-disclosing party's prior review and confirmation for
compliance with the Anonymity Requirement, (iv) the non-disclosing
party's review, approval, and/or rejection of any SEC Disclosure
shall be limited solely and exclusively to an evaluation and
determination of whether each Relevant SEC Disclosure Provision
satisfies the Anonymity Requirement, (v) no review, approval,
rejection, and/or any other act or omission on the part of the
non-disclosing party with respect to any SEC Disclosure shall
constitute or be taken, construed, or represented as an opinion,
representation, warranty, approval, authorization, ratification,
confirmation, recommendation, or guidance, or assumption of any
liability, duty, or responsibility by or of the non-disclosing
party for, of, or with respect to the SEC Disclosure or any matter
relating thereto, including, but not limited to, the content,
form, truth, accuracy, sufficiency, timing, legality, or necessity
of such SEC Disclosure, the use of or reliance upon such SEC
Disclosure by the disclosing party or any third party (including,
but not limited to, any past, present, future, or potential
iSecureTrac shareholder or investor of the disclosing party), or
whether such SEC Disclosure complies with or violates any
applicable Securities Law (collectively, "SEC Disclosure
Matters"), and (vi) the disclosing party shall have and at all
times retain sole and exclusive liability and responsibility for
each SEC Disclosure and all SEC Disclosure Matters under all
circumstances whatsoever, including, but not limited to, where the
non-disclosing party confirms that an SEC Disclosure satisfies the
Anonymity Requirement. Each Relevant SEC Disclosure Provision
shall be a "SEC Disclosure" for all purposes hereunder.
12.2. CONFIDENTIALITY. In connection with this Agreement, each party and
its affiliates may disclose (the "Disclosing Party") to the other
party (the "Receiving Party"), and the Receiving Party may
otherwise obtain or learn, tangible and intangible confidential or
proprietary information regarding the Disclosing Party, its
affiliates, or their respective businesses, operations, customers,
marketing or business plans, pricing, trade secrets, or finances
(collectively, "Confidential Information"). The Receiving Party
shall: (i) hold and protect the Disclosing Party's Confidential
Information in the strictest confidence, using the same degree of
care (but at least reasonable care) that it uses to protect its
own confidential or proprietary information of a similar
character; (ii) not directly
17
or indirectly disclose any of the Disclosing Party's Confidential
Information to any third party; (iii) disclose the Disclosing
Party's Confidential Information only to the Receiving Party's own
employees on a "need to know" basis; (iv) use the Disclosing
Party's Confidential Information only during the Term of this
Agreement and solely to perform the Receiving Party's obligations
and rights hereunder, and for no other purpose, and (v)
discontinue all use of, and return to the Disclosing Party (or in
lieu of such return, destroy), all of the Disclosing Party's
Confidential Information upon the earlier of (A) the Disclosing
Party's request, or (B) any Agreement Termination. The Disclosing
Party shall be and at all times remain the sole and exclusive
owner of all of its Confidential Information and all Intellectual
Property Rights therein, and the Receiving Party shall not have or
acquire any right, title, or interest in or to any of the
Disclosing Party's Confidential Information or any Intellectual
Property Rights therein under this Agreement, by virtue of the
Receiving Party's acquisition or use of the Disclosing Party's
Confidential Information, or otherwise. "Confidential Information"
shall be deemed to include all copies, extracts, excerpts,
abstracts, and summaries containing any Confidential Information
prepared by either party in any medium. Notwithstanding the
foregoing, "Confidential Information" shall not include, and this
Section 12.2 shall not apply to, any information that: (1) is at
the time of disclosure, or subsequently becomes, part of the
public domain through no act or failure to act on the part of the
Receiving Party, (2) was already known or possessed by the
Receiving Party with no obligation of confidentiality at the time
of the disclosure of such information by the Disclosing Party, (3)
is furnished to the Receiving Party by a third party source,
provided that such third party source is not known by the
Receiving Party to be prohibited from disclosing such information
by a contractual, legal, or fiduciary obligation owed to the
Disclosing Party, (4) is independently developed by the Receiving
Party without reference to or use of any of the Disclosing Party's
Confidential Information, or (5) whose disclosure is sought by
subpoena, litigation discovery device, or other legal process or
is otherwise required by law.
13.0 TERM AND TERMINATION
13.1. TERM. The initial term of this Agreement shall be three (3) years
from the Effective Date first written above, unless terminated
earlier as provided herein. At the end of the three (3) year
initial term, this Agreement shall automatically extend for up to
two (2) additional, consecutive one (1) year periods upon the
anniversary date of the initial term and the first annual
extension thereof, unless either party terminates the Agreement,
for any reason, upon 90 days written notice to the other party;
provided, however, that there shall be no volume purchasing
commitment, obligation, or
18
requirement (collectively, "Purchasing Commitments"), whether in the
form of the 1,000 Unit Commitment or otherwise, for any period
after the 18 Month Commitment Period of the 1,000 Unit Commitment,
including, but not limited to, during the balance of the initial
term or during any extension or renewal term. If such cancellation
notice is given and firm purchase orders hereunder are outstanding
at the date of cancellation of this Agreement, this Agreement
shall continue in effect until all Products specified in such
purchase orders have been shipped to DISTRIBUTOR hereunder.
13.2. CONTRACT TERMINATION. Either party may terminate this Agreement at
any time upon the occurrence of any of the following events by or
involving the other party ("Termination for Cause"):
(a). The other party liquidates or ceases to conduct business
in the normal course, or makes a general assignment of assets
for the benefit of creditors.
(b). The other party is in material default of any of its
material oligations under this Agreement, and such material
default is not cured within thirty (30) days from the date on
which it was notified in writing of such default by the other
party, unless subsequently waived in writing. For purposes of
this paragraph, the term "default of obligations" shall
include, on the part of DISTRIBUTOR, a material breach of its
representation described in Section 2.9.
13.3. TERMINATION FOR CONVENIENCE. Either party may terminate this
Agreement without cause at any time during the Term on ninety (90)
days prior written notice to the other party hereto ("Termination
for Convenience").
13.4. SURVIVAL. Sections 2.9, 3.4, 4.8, 6, 7, 8, 9, 10, 12, 13, and 14,
and all other provisions hereof that would by their very nature or
terms survive this Agreement, shall survive any Agreement
Termination. In addition, after any Agreement Termination,
DISTRIBUTOR may continue to (i) sell and otherwise distribute the
Products remaining in its inventory to liquidate same; and (ii)
continue to maintain, monitor, and support the Products in service
with DISTRIBUTOR's customers. In addition, Services shall continue
to be provided and performed to and for DISTRIBUTOR after any
Agreement Termination so long as any Products remain activated in
accordance with Section 10.0.
13.5. EFFECT ON PURCHASE COMMITMENTS. Upon the occurrence of any Agreement
Termination other than a (i) Termination for Cause by iSecureTrac
in accordance with Section 13.2, or (ii) Termination for
Convenience by DISTRIBUTOR under Section 13.3, the 1,000 ▇▇▇▇
▇▇
Commitment and all other Purchasing Commitments (if any) shall
terminate, and DISTRIBUTOR shall have no further liability or
obligation to iSecureTrac hereunder or otherwise with respect
thereto, any Purchasing Volume Default, or any similar deficiency
or amount.
14.0 MISCELLANEOUS
14.1. FORCE MAJEURE. Neither party shall be liable to the other party for
failure or delay in performance of its obligations under this
Agreement due to events of "force majeure," including, but not
limited to strikes, wars, revolutions, fires, floods, explosions,
earthquakes, other acts of God, government regulations or other
causes beyond its control. Notwithstanding the foregoing, if any
force majeure prevents or delays either party from performing its
obligations for 180 consecutive days or more, the other party may
terminate this Agreement on written notice to the delayed or
non-performing party.
14.2. AMENDMENT. This Agreement may not be changed, amended or modified
except by a writing executed by the parties hereto. Terms and
conditions, whether printed or written, stated in any purchase
order, acknowledgement, confirmation or invoice pursuant hereto
shall be of no force or effect to the extent such terms would
modify, add to or are inconsistent with the terms and conditions
described in this Agreement.
14.3. CAPTIONS. The captions contained herein are for convenience of
reference only and shall not affect or be construed to affect the
meaning or the terms of this Agreement.
14.4. BINDING AGREEMENT. This Agreement shall inure to the benefit of and
binding upon the parties hereto and their respective successors and
assigns.
14.5. ENTIRE AGREEMENT. This Agreement and attachments hereto represent
the entire and final agreement and understanding between the parties
concerning the subject matter described herein. Any other agreements
or understandings between the parties concerning the subject matter
described herein, whether oral or written, shall be of no force and
effect.
14.6. SEVERABILITY. If any provision of this Agreement shall be invalid or
unenforceable under the law of the jurisdiction applicable to this
Agreement, such invalidity or unenforceability shall not invalidate
or render unenforceable the entire Agreement, but the rights and
obligations of the parties shall be construed as if the Agreement
did not contain the unenforceable provision or provisions.
20
14.7. WAIVER. No delay or failure by either party to exercise or enforce
at any time any right or provision of this Agreement shall be
considered a waiver thereof or of such party's right thereafter to
exercise or enforce each and every right and provision of this
Agreement. In order for a waiver to be valid, it shall be in
writing, signed by the waiving party, but need not be supported by
consideration.
14.8. ASSIGNMENT. Neither party hereto shall have the right to assign this
Agreement or any obligations or rights hereunder to any third party
without the prior written consent of the other party. Any attempt to
make said assignment without the written permission of the other
party shall be void.
14.9. APPLICABLE LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the STATE OF NEW YORK.
14.10. PRIVATE LABELING. Upon DISTRIBUTOR's request, iSecureTrac agrees to
private label the Products and/or related Product documentation
(including, but not limited to, Activation Documentation) with
DISTRIBUTOR's trademarks and trade names (collectively,
"DISTRIBUTOR Trademarks"), all at no additional charge to
DISTRIBUTOR (collectively, "Private Labeling"). All use of
DISTRIBUTOR Trademarks by iSecureTrac in connection with any
Private Labeling hereunder shall be subject to a limited,
personal, non-exclusive, non-transferable, non-assignable license
or sublicense (in each case, without right of sublicense) granted
by DISTRIBUTOR to iSecureTrac to use the DISTRIBUTOR Trademarks
during the Term solely and exclusively for iSecureTrac's
performance of Private Labeling as described herein and for such
other purposes as DISTRIBUTOR may expressly authorize in advance
in writing (the "Limited Trademark License"). All Private
Labeling shall be submitted to DISTRIBUTOR for review in advance,
and no DISTRIBUTOR Trademark shall be utilized in any Private
Labeling without DISTRIBUTOR's specific prior written consent to
such use. Each item of documentation or other tangible material
(with each copy thereof constituting a separate item) on which
any DISTRIBUTOR Trademark appears shall contain a prominent
legend stating that the DISTRIBUTOR Trademarks are registered
trademarks of DISTRIBUTOR or DISTRIBUTOR's affiliates. The
registered symbol "(R)" appearing each time as part of the
DISTRIBUTOR Trademark will constitute a sufficient legend.
iSecureTrac acknowledges that DISTRIBUTOR is, and shall at all
times remain, the sole and exclusive owner of the DISTRIBUTOR
Trademarks and all goodwill contained therein, and that neither
the Limited Trademark License, nor any Private Labeling, shall
convey any right, title, or interest in or to any of the
DISTRIBUTOR Trademarks or such goodwill to iSecureTrac. All
goodwill arising from iSecureTrac's use of the DISTRIBUTOR
21
Trademarks shall inure solely to the benefit of DISTRIBUTOR, and
iSecureTrac shall not assert any claim to any right, title, or
interest in or to the DISTRIBUTOR Trademarks or the goodwill
associated therewith, nor shall iSecureTrac at any time take any
action that could be detrimental to the goodwill associated with
any DISTRIBUTOR Trademark, either during the Term or after any
Agreement Termination. DISTRIBUTOR may revoke the Limited
Trademark License as to any Product or related documentation not
then in production upon written notice to iSecureTrac at any time
with or without cause. Upon any such revocation, or any Agreement
Termination, including, but not limited to, any Agreement
Termination resulting from the material breach of either party
hereto, the Limited Trademark License shall automatically
terminate, and iSecureTrac shall immediately cease all further
use of the DISTRIBUTOR Trademarks.
IN WITNESS WHEREOF, DISTRIBUTOR and ISECURETRAC have caused this Agreement
to be executed by their duly authorized representatives as of the Effective Date
first above written.
iSecureTrac Corp. ADT Security Services, Inc.,
("iSecureTrac") successor in interest to SecurityLink, Inc.
("DISTRIBUTOR")
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇ ▇▇▇▇▇
---------------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇ ▇▇▇▇▇
-------------------------- --------------------------
Title: Vice President & CFO Title: Director
------------------------- -------------------------
Date: 10/31/01 Date: 11/2/01
-------------------------- --------------------------
22
AGREEMENT NO. PA-011008
ATTACHMENT 1
PRODUCT PRICING
Contract
Product ID Product Description MSRP Unit Price*
---------- ------------------- ---- -----------
533 Elmo Tech Transmitters [confidential treatment
requested]
2100c-ET iTracker-ET PTU cell unit
WITHOUT Elmo Tech transmitter [confidential treatment
requested]
2100nc-ET iTracker-ET PTU non-cell unit
WITHOUT Elmo Tech transmitter [confidential treatment
requested]
2100 ACC-Case PTU carrying case with foam
insert and polyester pouch [confidential treatment
requested]
* Contract Unit Price applies PROVIDED that DISTRIBUTOR purchases a
minimum of one thousand (1,000) iTracker-ET PTUs within the 18 Month
Commitment Period if and as required by the 1,000 Unit Commitment hereunder;
provided, however, that (i) the [confidential treatment requested]
iTracker-ET PTUs already ordered by DISTRIBUTOR under PO SL-IST0002 shall be
applied against and count towards satisfaction of this 1,000 Unit Commitment,
notwithstanding the fact that same predates the 18 Month Commitment Period,
leaving an outstanding balance of [confidential treatment requested]
iTracker-ET PTUs on the 1,000 Unit Commitment to be purchased during the 18
Month Commitment Period; (ii) the 1,000 Unit Commitment shall be subject to
the terms and conditions of the Agreement; and (iii) no adjustment shall be
made to the Contract Unit Price unless DISTRIBUTOR commits a Purchasing
Volume Default with respect to such 1,000 Unit Commitment. If DISTRIBUTOR
does not purchase an aggregate total of 1,000 iTracker-ET PTUs (including the
[confidential treatment requested] iTracker-ET PTUs already ordered by
DISTRIBUTOR under PO SL-IST0002) within the 18 Month Commitment Period under
circumstances constituting a Purchasing Volume Default, then, as
iSecureTrac's sole remedy and recourse against DISTRIBUTOR (and DISTRIBUTOR's
only liability to iSecureTrac), hereunder or otherwise, therefor: (A) the
MSRP, discounted by the "Eligible Product Discount" shown on the following
page (the "Discounted MSRP"), shall apply to each Purchased Unit, and (B)
iSecureTrac shall be entitled to recoup any "Unearned Discount" (as defined
herein) from DISTRIBUTOR for each Purchased Unit. For the purposes of this
Agreement, the "Unearned Discount" for any Purchased Unit shall be an amount
equal to the positive difference (if any) between its Discounted MSRP and the
Contract Unit Price paid by DISTRIBUTOR therefor (the "Unearned Discount").
Notwithstanding anything contained herein to the contrary, no Unearned
Discount shall accrue or be due or owing from DISTRIBUTOR in the absence of a
Purchasing Volume Default, and such Unearned Discount shall be iSecureTrac's
sole and exclusive remedy and recourse against DISTRIBUTOR (and DISTRIBUTOR's
only liability to iSecureTrac) for each such Purchasing Volume Default.
23
DISCOUNT SCHEDULE
The Eligible Product Discounts set forth below (i) shall be used for the sole
purpose of computing the amount of any Unearned Discount which may accrue in
favor of iSecureTrac hereunder if (and only if) DISTRIBUTOR commits a qualifying
Purchasing Volume Default hereunder, and (ii) shall not grant or entitle
DISTRIBUTOR to a second, additional reduction in the Price for any Product above
and beyond the discount already reflected in its Contract Unit Price. For the
purpose of computing the amount of any such Unearned Discount, the Eligible
Product Discount shall apply to all Product orders placed during the 18 Month
Commitment Period (and also to ▇▇ ▇▇-▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇-▇▇▇▇▇▇▇) and shall be
calculated based on the cumulative, total MSRP for such Products taken in the
aggregate ("Total MSRP Purchase Amount"). Discounts apply only to the total MSRP
of all Products, and not service orders or other charges. Discounts are not
earned if delivery is not requested within 18 months of the order date, unless
otherwise provided in this Agreement, including where caused by iSecureTrac's
breach of this Agreement. Unearned Discounts may be billed to DISTRIBUTOR for
any Purchasing Volume Default occurring and existing either (i) at the end of
the 18 Month Commitment Period, or (ii) on the effective date of any Agreement
Termination, and DISTRIBUTOR agrees to pay such Unearned Discounts within 30
days of receipt of an invoice therefor, unless such Unearned Discounts arise
from an ordering deficiency caused by iSecureTrac's breach of this Agreement or
under other circumstances not constituting a Purchasing Volume Default.
Total MSRP Purchase Amount * Eligible Product
Discount
[confidential treatment requested]
*Calculated based on the cumulative total MSRPs of all Purchased Units
taken in the aggregate, including (i) the [confidential treatment
requested] total MSRP for the [confidential treatment requested]
iTracker-ET PTUs already ordered by DISTRIBUTOR under PO SL-IST0002, and
(ii) the [confidential treatment requested] total MSRP for the five
hundred thirty-three (533) Elmo Tech Transmitters already ordered by
DISTRIBUTOR under PO SL-IST0001, yielding an aggregate, combined Total
MSRP Purchase Amount for both purchase orders taken together of
[confidential treatment requested], computed as shown below:
[confidential treatment requested]
iSecureTrac Corp. ADT Security Services, Inc.,
("iSecureTrac") successor in interest to SecurityLink, Inc.
("DISTRIBUTOR")
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇ ▇▇▇▇▇
---------------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇ ▇▇▇▇▇
-------------------------- --------------------------
Title: Vice President & CFO Title: Director
------------------------- -------------------------
Date: 10/31/01 Date: 11/2/01
-------------------------- --------------------------
24
AGREEMENT NO. PA-011008
ATTACHMENT 2
SUPPORT SERVICES
Service Description Fee
------- ----------- ---
TRAINING On-site training with DISTRIBUTOR
designated personnel (up to
8 persons per session), covering installation
of bracelets, Personal Tracking Units, monitoring,
establishing limiting parameters per iTracker unit,
Mapping and Reporting. [confidential treatment requested]
iSecureTrac will also invoice DISTRIBUTOR for reasonable travel expenses
actually incurred by iSecureTrac personnel in providing on-site training
consisting of transportation, lodging, and meals. Prior to scheduling on-site
training, iSecureTrac will submit a training agenda for DISTRIBUTOR's approval.
--------------------------------------------------------------------------------
EXTENDED iSecureTrac will provide repair and replacement
WARRANTY SERVICE service for each iTracker PTU purchased under this
Agreement for one (1) or two (2) or three (3) year
periods beyond the original Product Warranty period
and on the same terms as the Product Warranty described
in this Agreement. Cost per year:
iTracker 2100c PTU (cell unit) [confidential treatment requested]
iTracker 2100nc PTU (non-cell unit) [confidential treatment requested]
Extended warranty service must be ordered at the time of the purchase order
of the Products.
25
AGREEMENT NO. PA-010910
ATTACHMENT 2
-------------------------------------------------------------------------------------------------
NON-WARRANTY Products are repaired by iSecureTrac on a time
REPAIR SERVICE* and materials basis. Hourly labor charge:[confidential treatment requested]
Handling charge for each Product: [confidential treatment requested]
*Will not be performed or invoiced unless authorized in advance by DISTRIBUTOR's
purchase order
--------------------------------------------------------------------------------
iSecureTrac Corp. ADT Security Services, Inc.,
("iSecureTrac") successor in interest to SecurityLink, Inc.
("DISTRIBUTOR")
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇ ▇▇▇▇▇
---------------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇ ▇▇▇▇▇
-------------------------- --------------------------
Title: Vice President & CFO Title: Director
------------------------- -------------------------
Date: 10/31/01 Date: 11/2/01
-------------------------- --------------------------
26
AGREEMENT NO. PA-011008
EXHIBIT "A"
P.O. NUMBER SL-IST0001
Attached Hereto
27
AGREEMENT NO. PA-011008
EXHIBIT "B"
P.O. NUMBER SL-IST0002
Attached Hereto
28