Exhibit 10.24
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DISTRIBUTOR SALES, SERVICE AND LICENSE AGREEMENT
This Distributor Sales, Service and License Agreement (this
"Agreement") is made as of the fifth day of February, 2007, by and between
SecureAlert, Inc., a Utah corporation ("SecureAlert"), and Seguridad Satelital
Vehicular S.A. de C.V., a company organized and existing under the laws of
Mexico ("Distributor").
WHEREAS, SecureAlert markets and sells TrackerPAL(TM) electronic
monitoring bracelet devices and related accessories and equipment as described
in the Product Description attached hereto as Schedule A, as such schedule may
be changed from time to time by SecureAlert by written notice to Distributor,
such products to be hereinafter referred to as the "Products"; and
WHEREAS, Distributor desires to act as an exclusive authorized
Distributor of the Products in the geographic area consisting of the country of
Mexico, as such geographic area may be changed from time to time by SecureAlert
by written notice to Distributor (the "Sales Territory"), to the customers
described in Schedule B, as such schedule may be changed from time to time by
SecureAlert by written notice to Distributor ("Customers");
NOW, THEREFORE, in consideration of the foregoing and of the mutual
representations, covenants and agreements contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Distribution of the Products.
1.1 Appointment. Subject to the provisions in Section 3.1(b) hereof,
SecureAlert hereby appoints Distributor as its exclusive authorized distributor
of the Products to Customers in and for use within the Sales Territory in
accordance with the provisions of this Agreement. Distributor hereby accepts
such appointment and agrees to use its best efforts to develop and exploit the
market and to solicit sales and obtain orders for the purchase of the Products
by Customers for use in the Sales Territory.
1.2 Subdistributors. Distributor may not appoint, delegate to,
deputize, authorize or in any way whatsoever empower any other party to act on
Distributor's behalf under this Agreement or otherwise assign its rights under
this Agreement to a third party, without the express, prior written approval of
SecureAlert. If Distributor proposes to enter into any such agreements with any
party to market, distribute or sell Products, the terms and provisions of all
such agreements shall be void and have no effect unless they are approved by
SecureAlert and contain undertakings on the part of such parties to carry out
and adhere to all applicable obligations and duties of Distributor hereunder. A
failure by any such party to carry out or adhere to said obligations shall
constitute a breach of this Agreement and SecureAlert shall be entitled to all
of the rights and remedies provided hereunder upon a breach by Distributor.
1.1 Competitive Products. During the term of this Agreement and for a
period of two (2) years after its termination for any reason, Distributor shall
not, and Distributor shall cause its Affiliates not to, directly or indirectly,
market, sell or otherwise distribute other products which may be competitive
with the Products in the Sales Territory without the express, prior written
consent of SecureAlert. Distributor acknowledges and agrees that (i) the
covenants and restrictions set forth in this Section 1.3 are necessary,
fundamental and required for the protection of the legitimate continuing
interests of SecureAlert, and (ii) a breach or attempted breach of any of the
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covenants and restrictions contained in this Section 1.3 will result in
irreparable harm and damage to SecureAlert which cannot be adequately
compensated by monetary damages. Accordingly, in addition to all other remedies
that may be available in this Agreement, at law or in equity, SecureAlert shall
be entitled to the immediate remedy of a temporary restraining order or
preliminary injunction and such other form of temporary or permanent injunctive
or other equitable relief as may be issued by a court of competent jurisdiction
to restrain or enjoin a breach or threatened breach of all or any portion of the
covenants and restrictions or to specifically enforce the provisions of this
Section 1.3.
2. Distributor's Duties. Distributor's duties hereunder shall include, but
not be limited to:
(a) fully and accurately advising present and potential Customers
within the Sales Territory of Product prices, terms and conditions of
sale;
(b) regularly and diligently soliciting Products orders from
present and potential Customers within the Sales Territory for use
within the Sales Territory;
(c) making regular sales calls or solicitations upon present and
potential Customers within the Sales Territory and such other calls or
solicitations as SecureAlert may, from time to time, reasonably direct;
(d) promptly distributing to all present and potential Customers
located within the Sales Territory all SecureAlert promotional
materials, offers and consideration relating to the Products, as
appropriate;
(e) consulting with and furnishing information to SecureAlert
concerning Customers' requirements and other matters which may affect
Product sales in the Sales Territory;
(f) establishing and operating a call center, including engaging a
sufficient number of trained professional staff and procuring
sufficient facilities and subject to Section 5 below, performing
monitoring services concerning the Products and Clients (as defined
below) without the assistance of SecureAlert;
(g) coordinating problem resolution with third parties, including
cellular carriers and other service carriers, and obtaining sufficient
cellular carrier services to address voice and data service coverage to
meet Distributor's needs and the needs of any third party requesting
monitoring of Clients;
(h) retaining, together with the Customers, complete authority for
case selection (subject to Section 6.7(d)), management and
administration with respect to each Client, including monitoring
responsibility with respect to each Client;
(i) identifying and making available Distributor staff and/or
equipment that complies with SecureAlert's policies as in effect from
time to time;
(j) not making any representations or giving any warranties or
other benefits in favor of the Customers or proposed Customers or to
the detriment of SecureAlert beyond those contained in SecureAlert's
then current conditions of sale;
(k) reporting full information to SecureAlert to enable
SecureAlert to ensure that the Products meet local regulations relating
to health, safety, environment, labeling and the like;
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(l) refraining from any act or practice that (i) might tend to
diminish or inhibit Product sales or in any way adversely reflect upon
SecureAlert or (ii) constitutes a violation of applicable law;
(m) refraining from promoting, soliciting or otherwise
participating in the sale in the Sales Territory of products that
compete directly or indirectly with the Products;
(n) refraining from changing Product labels or containers,
repackaging the Products or otherwise presenting or marketing the
Products in competition with or as similar substitute items for other
products of SecureAlert sold in the Sales Territory;
(o) furnishing to SecureAlert copies of all proposed advertising,
technical, sales and other materials relating to Products and
refraining from or discontinuing the use of any such materials which in
the opinion of SecureAlert are inappropriate or misleading or may
subject SecureAlert to liability;
(p) supplying SecureAlert with such reports and other information
as SecureAlert may reasonably request from time to time;
(q) refraining from (i) acting in any manner that could expose
SecureAlert to any liability and (ii) pledging or purporting to pledge
SecureAlert's credit;
(r) informing SecureAlert of any actual or, to Distributor's
knowledge, reasonably likely, infringements of its Intellectual
Property rights and assisting SecureAlert in the safeguarding of such
legal rights;
(s) not disputing the right of SecureAlert to its trademarks and
not registering or having registered in any country any word or symbol
whatsoever for the Products or any of SecureAlert's other products or
products under development;
(t) not disputing the ownership by SecureAlert of all Intellectual
Property rights in and to the Products, Software or Support Services,
regardless of (i) whether any such rights were conceived by, were
created by, or initially accrue to Distributor or (ii) when such rights
came into existence;
(u) not marketing the Products (i) for sale, delivery or use
outside the Sales Territory, unless otherwise agreed in writing in
advance with SecureAlert, (ii) for sale inside the Sales Territory if
the Products is ultimately destined for delivery or use outside the
Sales Territory, unless otherwise agreed in writing in advance with
SecureAlert or (iii) for sale, delivery or use in any manner other than
the Permitted Use;
(v) not marketing the Products (i) for sale and delivery other
than to Customers, unless otherwise agreed in writing in advance with
SecureAlert, or (ii) for sale to Customers, if the Products are
ultimately destined for delivery to or use by persons other than
Customers, unless agreed in writing in advance with SecureAlert;
(w) without limiting the obligations in Section 1.3, not
developing, creating, improving or assisting any third party to
develop, create or improve, any product, software or service that
competes directly or indirectly with the Products, Software or Support
Services;
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(x) exporting the Products from the United States, importing the
Products into the Sales Territory, including obtaining licenses, paying
all duties, clearing customs, transporting, and such other related
activities as may be necessary to export, import, inspect, transport
and store the Products;
(y) complying, at its sole expense, with all Laws applicable to
the performance of its duties under this Agreement and to the operation
of this Agreement, including the filing of all documents and obtaining
of all permits, authorizations and the like required by the Laws of all
the jurisdictions in the Sales Territory; and
(z) paying all expenses of and incidental to the distributorship
obligations hereunder incurred by the Distributor, including all
acquisition, payment and maintenance costs of all hardware and software
associated with the Distributor's operations, including, without
limitation, server hardware, network equipment, third party software
licenses, telephony infrastructure, cellular carrier fees (including
certification and service subscriptions), optional software services
integrated local government fees, local government certification fees
and operational fees and fees to facilitate language localization
associated with the Products and Software.
3. Certain Terms and Conditions of Product Sales.
3.1 Product Inventory; Minimum Purchase Requirements.
(a) Distributor shall purchase a minimum number of Units for sale
to Customers in the Sales Territory, during the Initial Term and during
each Renewal Term, in accordance with the terms set forth in Schedule C
attached to this Agreement, as such schedule may be changed from time
to time (i) in writing by SecureAlert and Distributor or (ii) by
SecureAlert in accordance with Section 6.1.
(b) If Distributor fails to purchase the minimum quantities during
the Initial Term or any Renewal Term as provided in this Section 3.1,
SecureAlert, at its option, on 30 days prior written notice to
Distributor, may (i) amend this Agreement to provide that Distributor
is its non-exclusive authorized distributor of the Products in the
Sales Territory or (ii) terminate this Agreement.
4. Terms and Conditions of Software License.
4.1 License. In connection with the sale of the Products, SecureAlert
hereby grants to Distributor a limited, non-exclusive, non-transferable,
non-assignable, non-sublicensable, limited license (the "License") to use in the
Sales Territory software for electronically monitoring individuals who are
either required to be or have agreed to be tracked by the Tracker PAL(TM)
electronic monitoring bracelet device comprising part of the Products (the
"Clients") with SecureAlert's proprietary software (the "Software"). The
Software is in object code form only to be installed and run on a single server
solely for the Permitted Use. Except as otherwise expressly provided under this
Agreement, Distributor shall have no right, and Distributor specifically agrees
not to: (1) sublicense, distribute or modify, or adapt, port, translate,
localize or create derivative works of the Software; (2) reproduce, copy, in
whole or in part, decompile, decrypt, reverse engineer, disassemble or otherwise
reduce the Software to human-readable form; (3) export the Software outside the
Sales Territory; (4) duplicate the Software except for a single backup or
archival copy that is conspicuously labeled "SecureAlert Confidential and
Proprietary Software;" (5) use the Software for commercial timesharing, rental
or service bureau use; or (6) monitor or agree to monitor any Client without
first causing the Client and/or third party requesting the monitoring of the
Client to agree to the terms of Section 6.7 of this Agreement. Title to the
Software, all property rights, including all the tangible and intangible
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Intellectual Property rights therein, and all materials other than the Products
supplied to Distributor under this Agreement shall be and remain the sole and
exclusive property of SecureAlert. Distributor agrees that it shall at all times
keep the Software free from any legal process or lien whatsoever, and agrees to
give SecureAlert immediate notice if any legal process or lien is asserted or
made against the Software.
4.2 Operation. On a monthly basis, SecureAlert shall provide to
Distributor a new key code required to operate the Software. Distributor shall
provide SecureAlert a secure access to the network server upon which Distributor
shall house the Software in order for SecureAlert to perform maintenance and
upgrade functions. Distributor shall provide SecureAlert remote access at all
times to Distributor's TrackerPAL(TM) and TrackerPAL(TM) Gateway servers for
support and troubleshooting. Such access shall be provided through a secured
firewall access and/or a dedicated site-to-site data link. Distributor shall
provide and maintain, at its cost, a data connection between SecureAlert and
Distributor's server facility. The data connection shall facilitate a minimum
sustained bandwidth of 1.5mbs or higher.
4.3 License Fee. During the term of the Agreement, Distributor agrees
to pay to SecureAlert, the license fee as set forth in Schedule D attached to
this Agreement as it may be changed by mutual agreement of SecureAlert and
Distributor from time to time in writing. Distributor agrees that Distributor's
obligation to pay is unconditional and is not subject to any reduction, set-off,
defense or counterclaim for any reason whatsoever. If at any time, Distributor
has any balance owing under this Agreement that is more than thirty (30) days
past due, SecureAlert has the right to withhold the monthly key code referenced
in Section 4.2 above.
4.4 Non-Disclosure of Software. Distributor acknowledges that the
Software is confidential and proprietary information of SecureAlert, that
Distributor may obtain or have access to additional confidential and proprietary
information of SecureAlert, and that all such confidential and proprietary
information is the sole and exclusive property of SecureAlert or other entities
or persons Affiliated with SecureAlert (the "Software Proprietary Information").
Distributor agrees to keep all such Software Proprietary Information
confidential, to limit its use to the Permitted Use, and to protect it with at
least the same level of protection that Distributor affords its own most
confidential and proprietary information. If Distributor is required by
applicable Law or regulation or by legal process to disclose any Software
Proprietary Information, Distributor agrees that it shall provide SecureAlert
with reasonable prior written notice of such request to enable SecureAlert to
seek a protective order or other appropriate remedy prior to disclosure. Should
this Agreement be terminated for any reason whatsoever, Distributor shall, at
the request of SecureAlert, either destroy or promptly (but no later than 15
days after such termination) deliver to SecureAlert all Software Proprietary
Information, including all documents or other media containing Software
Proprietary Information, including all copies, reproductions, summaries,
analysis or extracts thereof, in the possession of Distributor, and Distributor
shall, concurrently with such destruction or delivery, certify to SecureAlert
that Distributor has done so. The obligation to keep the Software Proprietary
Information confidential pursuant to this Section shall survive the expiration
or termination of this Agreement.
4.5 Intellectual Property. Without limiting anything in Section 10, any
rights, including all Intellectual Property rights, developed by or resulting
from Distributor's performance pursuant to this License will be owned by
SecureAlert, and Distributor will assist SecureAlert, as reasonably necessary,
in further documenting such ownership, including the execution of any assignment
documents.
5. Support Services and Training.
5.1 Support Center. In connection with the sale of the Products and the
licensing of the Software pursuant to the License, SecureAlert will provide to
Distributor reasonable support services related to the Software, including
Training (as defined below) ("Support Services"). Distributor may contact
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SecureAlert's Support Center at any time, via telephone, facsimile or email, and
SecureAlert shall use its commercially reasonable efforts to respond to any
service inquiries within fifteen (15) minutes following receipt of such service
inquiries by either (a) telephone or (b) the same means by which the inquiry was
submitted.
5.2 Software Maintenance. SecureAlert will provide reasonable Software
Maintenance to Distributor that may include modifications, upgrades, updates,
fixes and/or patches to the Software as part of the Support Services (each, a
"Maintenance Release").
5.3 Software Errors. An "Error" means a failure of the Software to
conform to the specifications set forth in the Software documentation, resulting
in the inability to use, or material restriction in the use of, the Software. An
"Update" means either a software modification or addition that, when made or
added to the Software, corrects the Error, or a procedure or routine that, when
observed in the regular operation of the Software, eliminates the practical
adverse effects of the Error on the Distributor. SecureAlert will make
commercially reasonable efforts to provide an Update designed to solve or
by-pass a reported Error. The Update may be provided in the form of a temporary
fix, procedure or routine, to be used until a Maintenance Release containing the
permanent Update is available. Distributor shall reasonably determine the
priority level of Errors, pursuant to the following protocols:
(a) Severity One Error. SecureAlert promptly initiates the
following procedures: (1) assigns specialists to correct the Error on
an expedited basis; (2) provides ongoing communication on the status of
an Update; and (3) begins to provide a temporary workaround or fix. A
Severity One Error means the (i) system is severely impacted or
completely shut down or (ii) system operations or mission-critical
applications are down.
(b) Severity Two Error. SecureAlert assigns one of its specialists
to begin an Update, and provides additional, escalated procedures as
reasonably determined necessary by SecureAlert Support Services staff.
SecureAlert exercises commercially reasonable efforts to provide a
workaround or include a fix for the Severity Two Errors in the next
Maintenance Release. A Severity Two Error means (i) the system is
functioning with limited capabilities, or (ii) is unstable with
periodic interruptions, or (iii) system operations or mission-critical
applications are periodically down.
(c) Severity Three Error. SecureAlert may include an Update in the
next Maintenance Release. A Severity Three Error means there (i) are
errors in fully operational systems, (ii) is a need to clarify
procedures or information in documentation, or (iii) is a request for a
product enhancement.
(d) Maintenance Releases and Upgrades. During the term of the
License, SecureAlert will make Maintenance Releases available to
Distributor if, as and when SecureAlert makes any such Maintenance
Releases available to its other customers. If a question arises as to
whether a product offering is an Upgrade or a new product or feature,
SecureAlert's opinion will prevail, provided that SecureAlert treats
the product offering as a new product or feature for its other
customers generally.
5.4 Conditions for Providing Support. SecureAlert's obligation to
provide Support Services is conditioned upon the following: (a) Distributor
makes reasonable efforts to solve the problem after consulting with SecureAlert;
(b) Distributor provides SecureAlert with sufficient information and resources
to correct the problem either at SecureAlert's Support Center or via dial-up
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access at Distributor's site, as well as access to personnel, hardware and any
additional software involved in discovering the problem; (c) Distributor
promptly installs all Maintenance Releases; (d) Distributor procures, installs
and maintains all equipment, telephone lines, communication interfaces and other
hardware necessary to operate the Software; and (e) Distributor is not in breach
of any of its representations, covenants or other obligations in this Agreement,
including its duties set forth in Section 2.
5.5 Exclusions from Support Services. SecureAlert is not obligated to
provide Support Services in the following situations: (a) the Software has been
changed, modified or damaged (except if under the direct supervision of
SecureAlert); (b) the problem is caused by Distributor's negligence, hardware
malfunction or other causes beyond the reasonable control of SecureAlert; (c)
the problem is with third party software not licensed through SecureAlert; (d)
Distributor has not installed and implemented Maintenance Release(s) so that the
Software is a version supported by SecureAlert; (e) Distributor has not paid
fees when due; and (f) any of the conditions in Section 5.4 is not satisfied at
the time such services are to be performed. If SecureAlert chooses to provide
Support Services under any of the situations listed above, it may charge
Distributor time and materials for such Support Services.
5.6 Training. In connection with the sale of the Products and the
licensing of the Software pursuant to the License, SecureAlert will provide, at
no additional cost to Distributor, training from time to time on an as needed
basis as determined by Distributor and agreed to by SecureAlert, for the purpose
of assisting Distributor to incorporate the Software into Distributor's
monitoring system (the "Training"). The Training shall not require the presence
of SecureAlert personnel in the Sales Territory. Distributor shall provide, or
make available to SecureAlert at no cost, (i) any information, hardware or
software resources or other materials of Distributor reasonably necessary for
SecureAlert to perform the Training, (ii) reasonable assistance in the
performance of such Training; and (iii) reasonable access to Distributor's
facilities and personnel.
6. Other Terms and Conditions of Product Sales, License, Services and
Other Agreements.
6.1 Price and Fees.
(a) Product Sales. The prices for the Products to be supplied by
SecureAlert to Distributor are set forth in Schedule C attached to this
Agreement, as it may be changed by mutual agreement of SecureAlert and
Distributor from time to time in writing; provided, however, if the
direct or indirect cost to SecureAlert of providing the Products
increases or decrease after the Effective Date, SecureAlert may, in its
sole discretion, amend Schedule C to change the prices to the extent of
any such cost increase or decrease. Prior to any unilateral amendment
of such Schedule by SecureAlert, SecureAlert shall provide Distributor
with reasonable documentation to evidence such cost increase or
decrease, and any such amendment to Schedule C shall become effective
immediately upon notice of such amendment to Distributor.
(b) License. As consideration for the License, Distributor shall
pay SecureAlert a license fee as set forth in Schedule D attached to
this Agreement, as it may be changed by mutual agreement of SecureAlert
and Distributor from time to time in writing.
(c) Certain Fees. Prices and fees for the Products and the License
do not include transportation, freight or insurance costs, all of which
shall be borne by Distributor. The prices and fees set forth in
Schedule C and Schedule D do not include any fees, charges,
withholdings, commissions, etc., nor any U.S. or Mexican federal, state
or local taxes or import tariffs which may be applicable to the
Products sold or Software or Support Services provided under this
Agreement. A sum equal to any such amounts will be added (grossed up)
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to the amounts to be paid to SecureAlert pursuant to this Section 6.1
in case SecureAlert has the legal obligation to collect, pay or
withhold any such amounts under any applicable Laws. Distributor shall
pay any such amounts to SecureAlert unless Distributor provides
SecureAlert with a valid tax exemption certificate authorized by the
appropriate taxing authority. Each Party shall be responsible for its
own income taxes in respect of any income earned or losses incurred by
such Party under this Agreement.
6.2 Payment Terms.
(a) Product Sales. Distributor shall pay for the Products
purchased hereunder prior to the delivery of such Products and in
accordance with the terms and provisions of this Section 6. SecureAlert
will not be obligated to deliver any Product until it has received full
payment for (i) such Product and any related fees, charges, taxes,
duties, imports, charges, assessments and other amounts and costs to be
paid to SecureAlert by Distributor in respect of the Product and (ii)
all other amounts then due and payable under this Agreement.
(b) License. Commencing on the License Fee Start Date, Distributor
shall pay the License fees set forth in Schedule D and in accordance
with the terms and provisions of this Section 6. SecureAlert shall have
the right, in its sole discretion, to terminate the License if at any
time Distributor has a License fee balance owing that is more than
thirty (30) days past due.
(c) Expense Reimbursement. Distributor shall pay or reimburse
SecureAlert for travel, meal, lodging and living expenses incurred by
SecureAlert's personnel in performing the Support Services if
Distributor requests SecureAlert's personnel to travel outside the
Sandy, Utah, U.S.A. vicinity and SecureAlert reasonably determines that
the need for such Support Service is related to Distributor's breach of
its obligations under this Agreement, Distributor's failure to properly
maintain the Products or Software or any other matter that could have
reasonably been resolved by Distributor without SecureAlert personnel
traveling outside the Sandy, Utah, U.S.A. vicinity.
(d) Invoices. With respect to all payments and reimbursements to
be made by Distributor to SecureAlert pursuant to this Agreement,
including Sections 6.2(a), (b) and (c), SecureAlert shall send
Distributor an invoice containing a description of the relevant fees,
charges, taxes, tariffs, duties, imports, charges, withholdings,
assessments and other amounts and costs to be paid to SecureAlert by
Distributor.
(i) Upon receipt of an order for the Products pursuant to
Section 6.6, SecureAlert shall send Distributor an invoice containing a
description of the relevant fees, charges, taxes, tariffs, duties,
imports, charges, withholdings, assessments and other amounts and costs
to be paid to SecureAlert by Distributor in respect of the ordered
Products. All such invoiced amounts shall be due and payable by
Distributor prior to the delivery of the Products covered by such
order.
(ii) On or about the first day of each month during the
term of this Agreement, SecureAlert shall send Distributor an invoice
containing a description of the accrued and unpaid License fees and all
other charges, taxes, tariffs, duties, imports, charges, withholdings,
assessments and other amounts and costs to be paid to SecureAlert by
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Distributor under this Agreement, together with the interest on any
past due amounts, through the date of such invoice. All such invoiced
amounts shall be due and payable by Distributor within thirty days of
the date of such invoice, except for any past due amounts and any
interest thereon, which shall be immediately payable.
(iii) From time to time, SecureAlert shall send Distributor
an invoice containing a description of the amounts to be paid or
reimbursed to SecureAlert pursuant to Section 6.2(c) or otherwise under
this Agreement, to the extent such amounts are not reflected in an
invoice delivered pursuant to Section 6.2(d)(i) or (ii), together with
reasonable supporting documentation of such amounts. All such invoiced
amounts shall be due and payable by Distributor within five days of the
date of such invoice, together with the interest on any past due
amounts, through the date of such invoice.
(iv) Distributor agrees to pay interest on any past due
amounts at the rate of one percent (1%) per month, or the maximum rate
permitted by applicable Law, whichever is less, until full payment of
any past due amount has been made to SecureAlert.
(e) Payments upon Termination. Immediately upon a termination of
this Agreement, all amounts owed to SecureAlert under this Agreement
shall become immediately due and payable, to the extent not already due
and payable, and Distributor shall pay such amounts to SecureAlert on
or before the tenth day following the termination of this Agreement.
Distributor agrees to pay interest on any past due amounts at the rate
of one percent (1%) per month, or the maximum rate permitted by
applicable Law, whichever is less, until full payment has been made to
SecureAlert.
(f) Payment Method; Currency. All payments to SecureAlert
hereunder shall be made by (i) wire transfer of immediately available
funds to an account designated by SecureAlert in writing or (ii) by
irrevocable letters of credit issued directly in favor of SecureAlert
by a United States bank acceptable to SecureAlert, in its sole
discretion, the proceeds of which shall be available to SecureAlert at
sight upon presentation of its invoices. All payments to SecureAlert
hereunder shall be made in United States dollars.
6.3 Delivery. All deliveries of the Products to Distributor hereunder,
unless otherwise agreed in writing, shall be made FOB Sandy, Utah, U.S.A., and
liability for loss or damage in transit, or thereafter, shall pass to
Distributor upon SecureAlert's delivery of Products to a common carrier for
shipment. Shipping dates are approximate and are based, to a great extent, on
prompt receipt by SecureAlert of all necessary ordering information from
Distributor. Distributor shall bear all costs of transportation, insurance and
customs, and will promptly reimburse SecureAlert if SecureAlert prepays or
otherwise pays for such expenses. SecureAlert shall not be in default by reason
of any failure in its performance under this Agreement if such failure results
from a force majeure event as described in Section 17 or otherwise arises out of
causes beyond the control of SecureAlert. Without limiting any other provision
of this Agreement, SecureAlert shall not at any time be liable for indirect,
special, punitive, incidental or consequential damages or lost profits arising
out of the delivery, or failure to deliver, the Products. Distributor or its
appointed customs broker shall take possession of the Products at the U.S.
border at a specific location to be agreed upon by the Parties; Distributor
shall bear the costs and be responsible and liable for the legal importation and
status of the Products in the Sales Territory.
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6.4 Regulatory Approval. Distributor shall be responsible for securing
all marketing and other regulatory approvals and permits necessary or otherwise
required in the Sales Territory and shall pay for all costs associated
therewith. Distributor shall submit to SecureAlert for approval all applications
and correspondence in connection with securing such approvals or permits prior
to the submission of such applications or correspondence to any Governmental
Authority.
6.5 Import and Export Costs. Any taxes, duties, imports, charges or
assessments levied on the Products, Software or Support Services or payments
hereunder by any Governmental Authority within the Sales Territory shall be the
responsibility of and paid by Distributor. Any similar costs levied by the
United States of America or any state thereof shall be the responsibility of and
paid for by Distributor. Distributor shall be responsible for obtaining all
export licenses required for shipment of the Products to the Sales Territory.
6.6 Orders. Distributor agrees to submit written orders for the
Products to SecureAlert at its address set forth in Section 16 of this Agreement
on order forms prescribed and supplied by SecureAlert. All such orders (i) must
be submitted at least 60 days prior to the requested delivery date of the
Products covered by such order, (ii) shall be firm and binding upon Distributor
upon submission and (iii) are subject to approval and acceptance by SecureAlert.
On the first day of each month during the term of this Agreement, Distributor
shall provide SecureAlert with a good faith estimate of the Products to be
ordered by Distributor during the immediately following twelve month period;
provided that such forecast shall not constitute an order and shall not obligate
SecureAlert to approve or accept any particular order. SecureAlert and
Distributor acknowledge and agree that the extent to which any order or series
of orders deviates from the forecast may affect SecureAlert's approval or
acceptance of any particular order.
6.7 Warranty; Disclaimer; Limitation of Liability; Remedies;
Indemnification. Distributor agrees on its own behalf and agrees to cause its
Clients and any third party requesting the monitoring of Clients by Distributor
to agree prior to receiving monitoring services from Distributor that:
(a) Regardless of cause, Distributor and such Clients and such
requesting third parties (collectively "Servicees") shall not assert,
and SecureAlert shall not be liable for, any claim whatsoever against
SecureAlert for any and all direct, indirect, special, punitive,
incidental or consequential damages or lost profits or any other
damages, without limitation, which may result from the use of, delivery
of, failure to deliver, or any inadequacy of, the Products, the
Software, the Support Services or any obligation of SecureAlert under
this Agreement. SecureAlert and the manufacturer(s) and vendor(s) of
the Products and Software are separate, independent companies, and that
neither a manufacturer nor any vendor of the Products and Software is
SecureAlert's agent, partner or joint venture. No representation,
guaranty, or warranty by a manufacturer or any vendor of the Products
and Software is binding on SecureAlert, and no breach by a manufacturer
or any such vendor shall excuse Distributor's obligations hereunder.
Servicees' sole remedy against SecureAlert for any failure whatsoever
relating in any way to the use of the Products and Software shall be
limited to the replacement of the Products and Software; provided, that
any such failure of the Products and Software was not caused by any act
or omission on the part of any Servicee.
(b) NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT,
SECUREALERT PROVIDES THE PRODUCTS, SOFTWARE AND SUPPORT SERVICES,
"AS-IS" WITH ALL FAULTS AND MAKES NO WARRANTIES, WHETHER EXPRESS,
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IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WARRANTIES OF TITLE,
NONINFRINGEMENT, MERCHANTABILITY, QUALITY, ACCURACY AND FITNESS FOR A
PARTICULAR PURPOSE IN CONNECTION WITH THIS AGREEMENT, THE PRODUCTS,
SOFTWARE OR SUPPORT SERVICES EVEN IF SECUREALERT HAS BEEN INFORMED OF
SUCH PURPOSE. THERE IS NO WARRANTY THAT ANY PRODUCTS, SOFTWARE OR
SUPPORT SERVICE, THE INFORMATION PROVIDED THEREIN OR IN CONNECTION
THEREWITH OR SECUREALERT'S EFFORTS WILL FULFILL ANY OF THE SERVICEES'
OR ANY OTHER PERSON'S NEEDS.
(c) SECUREALERT IS NOT RESPONSIBLE FOR ANY INJURIES, DAMAGES, OR
LOSSES TO THE SERVICEEES, OR TO ANY OTHER PERSON OR TO ANY PROPERTY,
REGARDLESS OF OWNER, CAUSED BY THE USE, MISUSE, IMPROPER ACTIVATION OR
IMPROPER MAINTENANCE OF THE PRODUCTS OR SOFTWARE, OR THE FAILURE TO
CONNECT TO, OR THE INABILITY TO ACCESS, THE USER INTERFACE, THE FAILURE
TO FOLLOW ANY INSTRUCTIONS OR ABIDE BY ANY POLICIES RELATED THERETO OR
TO ANY MONITORING SERVICE, OR THE FAILURE OF THE SAME TO OPERATE AS
ANTICIPATED, INCLUDING, AS A RESULT OF ANY DEFECTS IN THE MANUFACTURING
OR PROGRAMMING OF THE SAME OR ANY FAILURE OF THE PRODUCTS OR SOFTWARE,
USER INTERFACE OR ANY MONITORING SERVICE TO OPERATE FOR ANY REASON. THE
SOFTWARE AND THE ASSOCIATED DATA ARE SUBJECT TO THE LIKELIHOOD OF HUMAN
AND MACHINE ERRORS, OMISSIONS, DELAYS, AND LOSSES, INCLUDING
INADVERTENT LOSS OF DATA OR DAMAGE TO MEDIA, THAT MAY GIVE RISE TO LOSS
OR DAMAGE. SECUREALERT SHALL NOT BE LIABLE FOR ANY ERRORS, OMISSIONS,
DELAYS OR DAMAGES RESULTING FROM OR CAUSED BY USE OF THE SOFTWARE.
(d) Neither the Products, the Software, the Support Services nor
any use thereof will prevent, and none of them is intended to prevent,
the commission of any harmful, tortious, or illegal acts. It may be
possible for a Client to remove the Product by unauthorized means, and
SecureAlert expressly disclaims, and Servicees expressly release
SecureAlert from, any liability for any harmful, tortious, or illegal
acts committed by any third party, including, without limitation, any
Client monitored with the Software. Should any disclaimer or limit on
liability for indirect, special, punitive, incidental or consequential
damages or lost profits set forth in this Agreement be found invalid
under the Laws or policy of the state or country which the terms of
this Agreement, including the License, are interpreted, then such
indirect, special, punitive, incidental or consequential damages or
lost profits shall be liquidated and shall equal $100 per indirect,
special, punitive, incidental or consequential injury or loss or lost
profits. The use of the Products and the related monitoring to be
provided by Distributor or any third party requesting the monitoring of
Clients shall be reserved for those Clients who are considered to be
minimal flight risks and minimal risks for commission of crimes or
torts against person or property. Servicees assume all risks related to
the use of the Products, Software and Support Services and Servicees
agree to indemnify, defend and hold SecureAlert harmless from and
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against any and all claims for any losses, damages, or injuries which
may be asserted on any basis, including those listed above, by Client
or any other Person against SecureAlert. Servicees agree to require
each Customer to agree in writing not to assert any such claims against
SecureAlert. The provisions of this Section 6.7 shall continue to be in
force even after the expiration or termination of this Agreement.
(e) SecureAlert is not responsible, and shall have no liability
for, (i) overseeing or managing any operation or maintenance (hardware,
software, administration or configuration of Distributor's telephony
services, data/application servers, data network, data center
operations, Internet ISP services, infrastructure or, (ii)
deficiencies, limitations or services outages of any cellular carrier,
telephony services or data center, (iii) services outside of any
software developed by SecureAlert, implementation or operability of any
architectural recommendations or continuation planning or any similar
services provided by SecureAlert hereunder.
(f) SecureAlert has set its prices and entered into this Agreement
in reliance upon the disclaimers of warranty, the limitations of
liability and the indemnity, defense and exculpation obligations herein
and that the same form an essential basis of the bargain between the
Parties. Distributor has not entered into this Agreement in reliance
upon any express or implied warranty or representation by SecureAlert.
6.8 Product or Software Changes. SecureAlert reserves the right at any
time to make changes in the Products or Software or, following 30 days notice to
Distributor, to discontinue the manufacture or sale of any of the Products or
the License. Distributor agrees that SecureAlert shall have no liability to
Distributor by reason of discontinuance of the manufacture or sale of the
Products or the License or any Product or Software change.
6.9 Product Recalls or Notifications. Distributor shall maintain and
make available to SecureAlert on request records of the use of the Products,
sufficient to conduct a recall of the Products or notification to the Customers
regarding the Products.
6.10 Access to Books, Records and Systems; Right to Audit. SecureAlert
shall have the right, without notice, but during normal business hours, to
examine and make copies or extracts of or from the books and records of
Distributor that are specifically related to its activities in performing its
obligations under this Agreement. SecureAlert shall have the right, without
notice, but during normal business hours, to visit Distributor's and any
Customer's facilities that are used for the activities contemplated by this
Agreement. SecureAlert shall have the right to audit the books and records and
financial statements of Distributor. SecureAlert shall have the right, without
notice, but during normal business hours, to audit Distributor's use of the
Product and Software and its compliance with the License and other terms of this
Agreement.
6.11 Non-Solicitation. Without the prior written consent of
SecureAlert, Distributor agrees during the term of this Agreement and for a
period of one year after the expiration or termination thereof (the
"Non-Solicitation Period"), Distributor will not, and will cause its Affiliates
and representatives not to, solicit for employment or hire, directly or
indirectly, any person who is or has been, at any time during the
Non-Solicitation Period, employed by SecureAlert or its Affiliates.
7. Duration. This Agreement shall become effective on December 22, 2006 (the
"Effective Date") and, unless earlier terminated, shall remain in force for a
period of sixteen months beginning on such date (the "Initial Term"). This
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Agreement shall renew automatically for successive terms of one year beginning
on the first day after the expiration of the Initial Term (each a "Renewal
Term") unless earlier terminated or either Party gives notice of termination
pursuant to Section 8.2 below.
8. Termination.
8.1 Without Cause. Subject to Section 8.4, either Party may terminate
this Agreement at any time without cause by giving the other Party 180 days
prior written notice of termination, except as provided in Section 3.1(b).
8.2 Expiration. Subject to Section 8.4, this Agreement shall terminate
at the end of the Initial Term or Renewal Term, as the case may be, if any Party
hereto gives notice of termination in writing, at least 30 days prior to the
expiration of such Initial Term or Renewal Term in which such notice is given.
8.3 Cause.
(a) This Agreement shall terminate, at the option of SecureAlert,
immediately without notice in the event of (i) an attempted assignment
or delegation of this Agreement by Distributor without SecureAlert's
prior written consent, (ii) a determination by SecureAlert of the
insolvency of Distributor, (iii) the institution of any proceedings by
or against Distributor for reorganization, bankruptcy or other relief
under any insolvency or similar Law, (iv) an application for or the
appointment of a receiver for Distributor, (v) dissolution of
Distributor, voluntary or by applicable Law, (vi) a change in the
control or management of Distributor unacceptable to SecureAlert or
(vii) a material breach of any of the terms of this Agreement by
Distributor.
(b) This Agreement shall terminate in accordance with the
provisions of Sections 3.1 and 13.4.
8.4 Termination Fee. Distributor shall not have a right to terminate
this Agreement pursuant to Section 8.1 or 8.2 unless and until Distributor pays
SecureAlert a termination fee in the amount described in Schedule E attached to
this Agreement.
8.5 Notice to Customers; Governmental Authorities. Not later than 10
days following notice from a Party to the other Party that it intends to
terminate this Agreement, Distributor shall, unless otherwise requested by
SecureAlert, notify, in form and substance satisfactory to SecureAlert, each
Customer and any Governmental Authority in the Sales Territory that would
reasonably be affected by such termination that such Agreement will be
terminated and the expected termination date.
8.6 Product Shipments. SecureAlert agrees that upon termination of this
Agreement, SecureAlert will ship Products only with respect to orders from
Distributor duly accepted by SecureAlert during the term of this Agreement for
which SecureAlert has received full payment. Distributor shall not be entitled
to and shall not claim or seek indemnification or any other form of damages or
compensation from SecureAlert by reason of termination of this Agreement
pursuant to its terms or loss of its rights under this Agreement pursuant to
such termination, nor shall it seek compensation or damages on account of
prospective profits or income after the termination date.
9. Representations and Warranties.
9.1 Representations and Warranties of SecureAlert. SecureAlert
represents and warrants to Distributor that:
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(a) SecureAlert is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Utah and
has all requisite corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. The execution,
delivery and performance by SecureAlert of this Agreement have been
duly authorized by all necessary action on the part of SecureAlert. The
execution and delivery by SecureAlert of this Agreement and the
performance of its obligations hereunder will not, with or without the
passage of time or the giving of notice, (i) conflict with or violate
the Articles of Incorporation or Bylaws of SecureAlert, (ii) violate
any applicable Law or (iii) result in a breach of, constitute a default
under, accelerate the performance required by or give rise to a right
of termination under any material indenture, agreement or instrument to
which SecureAlert is a party or by which SecureAlert may be currently
bound or affected, except for such violations referred to in clause
(ii) or breaches, defaults, accelerations or rights of termination
referred to in clause (iii) that, individually or in the aggregate,
could not reasonably be expected to have a material adverse effect on
SecureAlert or its assets or to interfere or conflict with or adversely
affect its performance of its obligations hereunder.
(b) All consents or approvals from third Persons or Governmental
Authorities necessary to permit the valid execution and delivery by
SecureAlert of this Agreement have been obtained.
(c) This Agreement has been duly executed and delivered by
SecureAlert and constitutes the legal, valid and binding obligations of
SecureAlert enforceable against SecureAlert in accordance with its
terms, subject, however, to bankruptcy, insolvency, reorganization, and
other Laws affecting creditors' rights generally and, with regard to
any equitable remedies, to the discretion of the court before which
proceedings to obtain such remedies may be pending. There are no
bankruptcy, insolvency, reorganization or receivership proceedings
pending, being contemplated by or, to the knowledge of SecureAlert,
threatened against SecureAlert.
9.2 Representations and Warranties of Distributor. Distributor
represents and warrants to SecureAlert that:
(a) Distributor is a company duly organized, validly existing and
in good standing under the laws of Mexico and has all requisite
corporate power and authority to execute and deliver this Agreement and
to perform its obligations hereunder. The execution, delivery and
performance by Distributor of this Agreement have been duly authorized
by all necessary action on the part of Distributor. The execution and
delivery by Distributor of this Agreement and the performance of its
obligations hereunder will not, with or without the passage of time or
the giving of notice, (i) conflict with or violate the organizational
or constituent documents of Distributor, (ii) violate any applicable
Law or (iii) result in a breach of, constitute a default under,
accelerate the performance required by or give rise to a right of
termination under any material indenture, agreement or instrument to
which Distributor is a party or by which Distributor may be currently
bound or affected, except for such violations referred to in clause
(ii) or breaches, defaults, accelerations or rights of termination
referred to in clause (iii) that, individually or in the aggregate,
could not reasonably be expected to have a material adverse effect on
Distributor or its assets or to interfere or conflict with or adversely
affect its performance of its obligations hereunder.
(b) All consents or approvals from third Persons or Governmental
Authorities necessary to permit the valid execution and delivery by
Distributor of this Agreement have been obtained.
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(c) This Agreement has been duly executed and delivered by
Distributor and constitutes the legal, valid and binding obligations of
Distributor enforceable against Distributor in accordance with its
terms, subject, however, to bankruptcy, insolvency, reorganization, and
other Laws affecting creditors' rights generally and, with regard to
any equitable remedies, to the discretion of the court before which
proceedings to obtain such remedies may be pending. There are no
bankruptcy, insolvency, reorganization or receivership proceedings
pending, being contemplated by or, to the knowledge of Distributor,
threatened against Distributor.
10. Intellectual Property.
10.1 Ownership. Distributor acknowledges that SecureAlert shall own the
trademarks or trade names set forth on Schedule F hereto (the "Trademarks").
Distributor acknowledges and agrees that SecureAlert shall own all Intellectual
Property rights in and to the Products and Software.
10.2 Grant. SecureAlert grants to Distributor a non-exclusive license
to use the Trademarks during the term of this Agreement solely in connection
with Distributor's marketing and sales of the Products pursuant to and in
accordance with this Agreement.
10.3 Limitation of Grant. In performing its obligations hereunder,
Distributor may use the Trademarks only for display on packaging or images of
the Products. All such use and display shall be solely in connection with the
promotion and solicitation of orders for the Products in the Sales Territory and
only in such fashion as has been expressly authorized by SecureAlert in advance
of such use or display. Distributor acknowledges and agrees that its use of the
Trademarks shall at all times be as licensee for the account and benefit of
SecureAlert.
10.4 Assignment. To the extent that any rights in and to any of the
Intellectual Property rights are deemed to accrue to Distributor, its agents,
contractors, permitted subcontractors, or its employees pursuant to this
Agreement or the performance of the Parties contemplated hereby, Distributor
hereby assigns, and Distributor agrees to cause its agents, contractors,
permitted subcontractors and employees to assign, any and all such rights at
such time as they may be deemed to accrue to SecureAlert. In connection
therewith, Distributor agrees to promptly execute or cause to be executed any
instruments requested by SecureAlert which SecureAlert, in its sole discretion,
deems necessary, proper to appropriate to secure such rights to SecureAlert. Any
such instrument shall be made without further consideration other than the
mutual agreement contained herein.
10.5 Covenants. Distributor shall not, at any time, do or suffer to be
done any act or thing that (i) will in any way impair the rights of SecureAlert
in and to the Trademarks or their registrations, (ii) may affect the validity of
any of the Trademarks or (iii) may depreciate the value of the Trademarks or
their reputation. Distributor shall not, during the term of this Agreement or
thereafter, assert any claims against SecureAlert in the event any claims or
suits are made or instituted against Distributor by unrelated third parties in
connection with Distributor's use of any of the Trademarks. Except as otherwise
specifically provided herein, Distributor agrees that it will not, during the
term of this Agreement or thereafter, attach SecureAlert's title or right in and
to the Trademarks. Distributor shall, at SecureAlert's request, provide full and
complete cooperation and assistance in connection with SecureAlert's efforts to
register, maintain, protect and defend the Trademarks and to prosecute any
infringers with respect to such Trademarks. SecureAlert shall control all
efforts to register, maintain, protect and defend the Trademarks and to
prosecute any infringers with respect to the Trademarks. Distributor agrees to
advise promptly SecureAlert of any actual or potential infringement of the
Trademarks promptly on becoming aware of such infringements. SecureAlert shall
have the sole right to determine if any action shall be taken against any third
party on account of any such infringements or imitations and Distributor shall
not institute any suit or take any action against any third party on account of
any such infringements or imitations without first obtaining SecureAlert's
written consent to do so. Any recovery as a result of such action shall belong
solely to SecureAlert, except to the extent that such recovery represents damage
15
to Distributor, in which event any specified recovery, net of all expenses paid
by SecureAlert, including Distributor's attorneys fees, if any, shall be paid to
Distributor. Distributor agrees and undertakes that its use of the Trademarks
will be in strict compliance with any and all trademark Laws, and that it will
make such marking on the Product packaging or otherwise in connection therewith
as may be required by SecureAlert in its sole discretion. Distributor shall
cooperate fully with SecureAlert in preparing and causing to be recorded at
SecureAlert's expense such documents as may be necessary or desirable to
evidence, protect and implement the rights of SecureAlert pursuant to this
Section 10.
10.6 Advertising Materials. Distributor shall submit to SecureAlert any
advertising materials Distributor uses in connection with the marketing and sale
of the Products promptly after Distributor develops such advertising materials.
SecureAlert shall advise Distributor of any comments or suggested changes to
such materials.
10.7 Termination of Use of Intellectual Property. Except as provided in
Section 8.6, if for any reason Distributor ceases to be the Distributor of the
Products in the Sales Territory, Distributor's right to use the Intellectual
Property shall terminate immediately. Except as provided in Section 8.6, upon
any termination of this Agreement, (i) any and all rights granted to Distributor
hereunder, together with any interest in and to the Intellectual Property and
registrations therefor which Distributor may be deemed to have acquired by
virtue thereof or otherwise, shall immediately cease and without further act or
instrument be assigned to and revert to SecureAlert, and (ii) Distributor shall
immediately terminate all further use of the Intellectual Property. Thereafter,
Distributor shall not recommence or continue using any of the Intellectual
Property without the prior written consent of SecureAlert. In addition,
Distributor will promptly execute or cause to be executed any instruments
requested by SecureAlert which SecureAlert, in its sole discretion, deems
necessary, proper or appropriate to accomplish or confirm the foregoing. Any
such assignment, transfer or conveyance shall be without further consideration
other than the mutual agreement contained herein. Furthermore, Distributor
shall, at the option of SecureAlert (i) destroy all documents and things,
including electronic documents and records, that comprise Intellectual Property
related to the Products, Software or Support Services, (ii) return all or any
part of such documents and things requested by SecureAlert to SecureAlert,
and/or (iii) provide from an authorized officer of Distributor written
certification of (A) such destruction or return and (B) Distributor's full
compliance with the terms and conditions of this Section 10.7.
10.8 Equitable Relief. Distributor acknowledges and agrees that (i) the
covenants and restrictions set forth in this Section 10 are necessary,
fundamental and required for the protection of the legitimate continuing
interests of SecureAlert, and (ii) a breach or attempted breach of any of the
covenants and restrictions contained in this Section 10 will result in
irreparable harm and damage to SecureAlert which cannot be adequately
compensated by monetary damages. Accordingly, in addition to all other remedies
that may be available in this Agreement, at law or in equity, SecureAlert shall
be entitled to the immediate remedy of a temporary restraining order or
preliminary injunction and such other form of temporary or permanent injunctive
or other equitable relief as may be issued by a court of competent jurisdiction
to restrain or enjoin a breach or threatened breach of all or any portion of the
covenants and restrictions or to specifically enforce the provisions of this
Section 10.
11. Independent Contractor. Distributor is an independent contractor and agrees
not to represent itself in any manner to any third party as a partner, agent,
associate or employee of SecureAlert. It is expressly provided that this
Agreement does not create a partnership, joint venture or any similar business
association or combination between the parties hereto. It is understood and
agreed that all contracts for the sale of the Products to Customers will be
between Distributor or its permitted sub-distributors and Customers. Distributor
16
shall have no authority to accept Products orders on behalf of SecureAlert.
Distributor does not have the power, and shall not take any action that could
purport to bind SecureAlert or to assume or create any contract or other
obligation on behalf of SecureAlert.
12. Indemnification.
12.1 Indemnification.
(a) Distributor Indemnification. Distributor shall indemnify,
protect, defend and hold harmless SecureAlert, its Affiliates and its
equity holders, directors, officers, employees, agents, permitted
successors, permitted assigns, and their respective Affiliates
(collectively, "SecureAlert Parties"), from and against any and all
judgments, claims, causes of action, actions, orders, investigations,
audits, suits, charges, complaints, injunctions, decrees, rulings,
proceedings, hearings, liabilities, losses, damages, demands,
assessments, impositions, fines, penalties, obligations, costs and
expenses, including in each case, interest, awards, judgments,
penalties, settlements, fines, costs and expenses incurred in
connection with investigating and defending any such matters (including
attorneys' fees and expenses of all fees and expenses of consultants,
experts and other professionals) ("Damages") suffered by or asserted
against SecureAlert Parties (under any contractual, statutory or common
law claim or theory), which relate to or arise out of the activities of
the Distributor or its Affiliates, employees, agents or representatives
or any third party requesting the monitoring of Clients or any Client,
in connection with this Agreement, including (i) any breach by the
Distributor of this Agreement, including any representation or warranty
of the Distributor hereunder or covenant, agreement or obligation of
the Distributor, (ii) the use of the Trademarks by the Distributor; or
(iii) the distribution of the Products and use of the Software pursuant
to this Agreement, including infringement claims, unfair or fraudulent
advertising claims, warranty claims, product defect claims, and
liability claims pertaining to the distribution of the Products or use
of the Software or (iv) claims of any third parties claiming under, by
or through Distributor, and to reimburse any expenses, penalties or
costs, including, but not limited to, legal fees and expenses of
investigation incurred by SecureAlert in defending any such claim,
demand, suit or action. Notwithstanding the foregoing provisions of
this Section 12, Distributor shall have no obligation to indemnify any
person under this Section 12 in respect of any product liability claims
relating to the Products, other than and only to the extent that such
claims are attributable to the negligence, gross negligence or willful
misconduct of Distributor or its representatives.
(b) SecureAlert Indemnification. SecureAlert shall indemnify,
protect, defend and hold harmless the Distributor, its Affiliates and
its equity holders, directors, officers, employees, agents, permitted
successors, permitted assigns, and their respective affiliates
(collectively, "Distributor Parties"), from and against any and all
Damages suffered by or incurred against Distributor Parties (under any
contractual, statutory or common law claim or theory) which relate to
or arise out of the breach by SecureAlert of any representation,
warranty, covenant or obligation of SecureAlert in this Agreement.
Notwithstanding anything to the contrary, SecureAlert's total liability
for all Damages incurred by SecureAlert as a result of SecureAlert's
indemnification obligations hereunder shall not exceed the lesser of
(i) the actual aggregate amount of any Damages or (ii) the aggregate
total of all amounts paid by Distributor to SecureAlert for the
Products and License fees during the term of this Agreement, less any
amounts paid by SecureAlert pursuant to this Section 12.
12.2 Method of Asserting Claims. All claims for indemnification by the
SecureAlert Parties or the Distributor Parties (each, an "Indemnified Party")
under this Article 12 shall be asserted and resolved as follows:
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(a) In the event that any claim or demand for which SecureAlert or
the Distributor (as the case may be, an "Indemnifying Party") would be
liable to an Indemnified Party is asserted against or sought to be
collected from such Indemnified Party by a third party, such
Indemnified Party shall promptly, but in no event later than the
earlier to occur of (i) such date that is 15 days prior to the date on
which a response to such claim or demand is due under applicable Law or
(ii) the 30th day following its receipt of such claim or demand, notify
the Indemnifying Party of such claim or demand, specifying the nature
of such claim or demand and the amount or the estimated amount thereof
to the extent then feasible (which estimate shall not be conclusive of
the final amount of such claim or demand) (the "Claim Notice");
provided, however, that the failure to promptly provide any such Claim
Notice shall not affect such Indemnified Party's right to
indemnification under Section 12.1, except to the extent that such
failure to provide such Claim Notice promptly shall prevent or shall
have prevented the Indemnifying Party from properly or effectively
defending the claim or demand or from recovering reimbursement or other
damages to which the Indemnifying Party or Indemnified Party would
otherwise be entitled, unless the Indemnifying Party, directly or
indirectly, caused such failure. The Indemnifying Party shall have 30
days from its receipt of the Claim Notice (the "Notice Period") to
notify the Indemnified Party whether or not it desires, at its sole
cost and expense, to defend the Indemnified Party against such claim or
demand, and thereby assume control of such defense; provided, however,
that the Indemnified Party is hereby authorized prior to and during the
Notice Period to file any motion, answer or other pleading which it
shall deem necessary or appropriate to protect its interests. If an
Indemnified Party desires to participate in, but not control, any such
defense or settlement, it may do so, which participation shall be at
the Indemnifying Party's cost and expense unless (i) the Indemnifying
Party has accepted liability for such claim in writing to the extent
that it ultimately is found to be liable, or (ii) the Indemnifying
Party is finally determined by a court having proper jurisdiction not
to have any liability to the Indemnified Party with respect to such
claim. If the Indemnifying Party disputes its liability with respect to
such claim or demand or elects not to defend against such claim or
demand, whether by not giving timely notice as provided above or
otherwise, the Indemnified Party shall have the right but not the
obligation to defend against such claim or demand.
(b) Unless the Indemnifying Party has accepted liability for a
claim or demand in writing, the Indemnifying Party shall not settle,
compromise, or offer to settle or compromise any such claim or demand
without the prior written consent of the Indemnified Party (which
consent shall not be unreasonably withheld or delayed). The Indemnified
Party shall not settle any claim or demand without the prior written
consent of the Indemnifying Party (which consent shall not be
unreasonably withheld or delayed) unless the Indemnifying Party has
refused to accept liability for such claim or demand or elected not to
defend the Indemnified Party against such claim or demand.
(c) To the extent the Indemnifying Party shall direct, control or
participate in the defense or settlement of any third party claim or
demand, the Indemnified Party will give the Indemnifying Party and its
counsel access to, during normal business hours, the relevant business
records and other documents subject to any confidentiality restrictions
applicable thereto, and shall permit them to consult with the employees
and counsel of the Indemnified Party at reasonable times during normal
business hours. The Indemnified Party shall use its reasonable efforts
to cooperate with the Indemnifying Party in the defense of all such
claims. The Indemnifying Party shall keep the Indemnified Party fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. The parties involved in the defense
of any matter which is the subject of indemnification under this
Section 12 shall cooperate in good faith in contesting all such claims,
which cooperation shall include the retention and, upon request, the
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provision to the requesting person of records and information which are
reasonably relevant to such claims, and in making employees available
on a mutually convenient basis to provide additional information or
explanation of any material hereunder or to testify at proceedings
relating to such claims. Any actual and reasonable out-of-pocket
expenses incurred by the Indemnified Party in connection with the
foregoing shall be fully reimbursed by the Indemnifying Party.
(d) In the event that the Indemnified Party shall have a claim
against the Indemnifying Party hereunder which does not involve a claim
or demand being asserted against or sought to be collected from it by a
third party, the Indemnified Party shall promptly send a Claim Notice
with respect to such claim or demand to the Indemnifying Party;
provided, however, that the failure to promptly provide any such Claim
Notice shall not affect such Indemnified Party's right to
indemnification under Section 12.1, except to the extent that such
failure to provide such Claim Notice promptly shall prevent or shall
have prevented the Indemnifying Party from properly or effectively
defending the claim or demand or from recovering reimbursement or other
damages to which the Indemnifying Party or Indemnified Party would
otherwise be entitled, unless the Indemnifying Party, directly or
indirectly, caused such failure. If the Indemnifying Party does not
notify the Indemnified Party within the Notice Period that it disputes
such claim or demand, the amount of such claim or demand shall be
conclusively deemed a liability of the Indemnifying Party hereunder.
12.3 Payment. Payments under this Section 12 shall be made as follows:
(a) In the event that the Indemnifying Party is required to make
any payment under this Section 12, the Indemnifying Party shall
promptly pay the Indemnified Party the amount so determined. If there
should be a dispute as to the amount or manner of determination of any
indemnity obligation owed under this Section 12, the Indemnifying Party
shall nevertheless pay when due such portion, if any, of the obligation
as shall not be subject to dispute. The difference, if any, between the
amount of the obligation ultimately determined as properly payable
under this Section 12 and the portion, if any, theretofore paid, shall
bear interest at an annual rate of eight percent (8%), or the maximum
rate permitted by applicable Law, whichever is less, until full payment
has been made to SecureAlert. Upon the payment in full of any claim,
the Indemnifying Party shall be subrogated to the rights of the
Indemnified Party against any person or entity with respect to the
subject matter of such claim.
(b) If all or part of any indemnification obligation under this
Agreement is not paid when due upon resolution of the claim or demand,
the Indemnifying Party shall pay on demand to the Indemnified Party
interest at the annual rate of ten percent (10%) on the unpaid amount
of the obligation for each day from the date the amount became due, or
the maximum rate permitted by applicable Law, whichever is less, until
payment in full.
12.4 Exclusive Remedy. The sole and exclusive remedy of each of
SecureAlert and the Distributor with respect to a breach of or default under
this Agreement shall be pursuant to the express indemnification provisions of
this Section 12 and Sections 6.7, 10 and 13.5, except for breaches or defaults
of Section 10 and Sections 1.3, 4.4, 6.11, 10, 14.1 and 14.2, for which a party
may seek specific performance. This Agreement sets forth the parties' entire
rights and remedies pertaining to this Agreement and transactions under this
Agreement, in lieu of any and all other rights and remedies available in Law or
in equity.
12.5 Limitation on Damages. Notwithstanding anything to the contrary
contained herein, in no event shall an Indemnifying Party be liable under this
Agreement for indirect, special, punitive, incidental, or consequential damages,
loss of profit or revenue, cost of capital, loss of tax benefits, damages
suffered by an Indemnified Party as the result of the loss business or damages
19
suffered by customers of such person for service interruptions; provided,
however, that Damages shall include consequential, incidental or punitive
damages, loss of profit or revenue recovered by any third party against the
Indemnified Party.
13. Compliance with Laws.
13.1 General. Distributor shall comply with, and be responsible for
ensuring that its Representatives comply with all Laws of the United States, the
nations constituting the Sales Territory or any other jurisdiction where the
Products or Software may be stored, transported or delivered or the Support
Services may be performed. During the term of this Agreement, Distributor agrees
to maintain internal policies and/or procedures with respect to any payment to a
government official, the purpose of which is to expedite or to secure the
performance of a routine, non-discretionary governmental action by that or any
other government official ("Facilitating Payments"). During the term of this
Agreement, Distributor shall ensure that all appropriate Distributor personnel
(a) have received a copy of such policies and/or procedures, (b) have received
training with respect to such Facilitating Payments and (c) understand and will
comply with Distributor's policies and/or procedures on such Facilitating
Payments.
13.2 Certain Laws. Distributor agrees that in the course of fulfilling
its responsibilities under this Agreement, it shall not engage in any conduct,
furnish any information or take any other action that would violate (a) United
States Law or cause SecureAlert to violate any United States Law or lose any
United States federal tax benefits, including but not limited to, any of the
activities described in or prohibited by the Foreign Corrupt Practices Act of
1977 of the United States of America, as amended (the "FCPA"), Section 999 of
the Internal Revenue Code of the United States of America, as amended
(International Boycott Determinations), the Export Administration Act of 1984 of
the United States of America, as amended, and regulations promulgated
thereunder, and (b) any applicable Laws or customs having the effect of Law, and
Distributor further agrees that, upon SecureAlert's request, it shall certify
that it has not done any of the foregoing. Without limiting the foregoing,
Distributor represents, warrants and covenants that none of Distributor or its
subsidiaries, and, to the knowledge of Distributor, no director, officer, agent,
employee, subcontractor or any other party acting on behalf of any of
Distributor or its subsidiaries, (i) has used, offered to use, or promised to
use any funds or thing of value for any unlawful contribution, gift,
entertainment, or any other unlawful payments or expenses relating to political
activity, (ii) has made, offered to make, or promised to make any unlawful
contribution, gift, or any other payment of money or any thing of value to any
foreign or domestic government official or employee, specifically including any
official or employee of any instrumentality, company, or any other entity owned
or controlled by any foreign or domestic government, or to any foreign or
domestic political party or campaign or any candidate for foreign political
office, and (iii) will take or assist any other party to take any of the
foregoing acts in connection with Distributor's performance under this
Agreement. Distributor also represents and warrants that, to the best of its
knowledge, there has been and is now no action, suit, proceeding, audit or claim
formally commenced or pending, or any investigation with respect to any actual
or claimed violation of the anti-corruption and anti-bribery laws to which
Distributor is subject, including the FCPA, and no Governmental Authority is now
asserting or to Distributor's knowledge threatening to assert against
Distributor any violation of any anti-corruption or anti-bribery laws to which
Distributor is subject.
13.3 Affirmations. Neither Distributor nor any of its employees, agents
or representatives is authorized under this Agreement to engage in any of the
activities described in Section 13.2, and Distributor agrees that no such
activity will be in furtherance of its relationship with SecureAlert or of
SecureAlert's business. Distributor affirms that neither it nor any of its
agents or representatives is an official or an employee of any Governmental
Authority.
20
13.4 Termination. If SecureAlert determines that at any time during the
term of this Agreement Distributor or any of its employees, agents or
representatives acting on its behalf has engaged in any of the activities
described in Section 13.2, or has otherwise engaged in any action or conduct in
violation of the FCPA or any other applicable anti-bribery or anti-corruption
law or regulation, this Agreement, at SecureAlert's option, shall terminate
immediately without notice.
13.5 Indemnification by Distributor. In the event Distributor, its
employees, agents or representatives acting on its behalf engage in any of the
activities described in Section 13.2, and if such activities result in any
judicial, quasi-judicial or administrative proceedings involving SecureAlert or
any of its employees, agents or representatives, Distributor shall indemnify
SecureAlert and such Representatives for all expenses, including attorneys' fees
and expenses of investigation incurred in the course of such proceedings.
13.6 Secure Alert Compliance with Export Control Laws. Notwithstanding
anything to the contrary in this Agreement, in no case shall SecureAlert be
required to conduct any transaction in violation of U.S. export controls Laws,
including the U.S. Export Administration Regulations among others. SecureAlert
shall have no liability whatsoever to Distributor for any failure to comply with
any of its obligations in this Agreement, if the compliance with such obligation
would result in a violation of U.S. export controls Laws, including the
performance of any obligation without a required export license or similar
permit.
14. Confidential Information.
14.1 Confidential Information. SecureAlert may from time to time
provide to Distributor certain advice, technical information, know-how and other
proprietary data and information that it has available to aid Distributor in the
solicitation of sales of the Products. Inasmuch as various of these materials
and advice (all of which will be referred to herein as the "SecureAlert
Confidential Information") which SecureAlert may make available to Distributor
will contain confidential information and trade secrets, it is hereby agreed
that any SecureAlert Confidential Information which SecureAlert discloses to
Distributor is valuable, proprietary property belonging to SecureAlert, and
Distributor agrees that it will neither use nor disclose any SecureAlert
Confidential Information to any third party (except if necessary in the
performance of its duties hereunder), except with prior written consent of
SecureAlert.
14.2 Copies. Distributor agrees to make only such copies of SecureAlert
Confidential Information as are authorized by SecureAlert and necessary to
solicit the sale of the Products within the Sales Territory and to limit
disclosure of SecureAlert Confidential Information to those employees of
Distributor necessary to solicit such sales.
14.3 Equitable Relief. In the event of breach or threatened breach by
Distributor or its employees of the provisions of Sections 14.1(a) or 14.2(a),
SecureAlert shall be entitled to an injunction or judicial order equivalent
thereto restraining Distributor or its employees from disclosing, in whole or in
part, such SecureAlert Confidential Information. Nothing herein shall be
construed as prohibiting SecureAlert from pursuing any other remedies available
to it for such breach or threatened breach, including recovery of damages from
Distributor.
14.4 Termination. Without limitation of any other provisions of this
Agreement, Distributor agrees, either upon the termination of this Agreement or
upon request, to surrender to SecureAlert all documentary material, including
SecureAlert Confidential Information, price lists, catalogues, technical
literature, sales literature, samples and any other documents, papers or other
properties of SecureAlert, however previously supplied to Distributor by
21
SecureAlert. Distributor will not retain any copy or memorandum of said
documentary materials, except as required by Mexican Law or for regulatory or
accreditation compliance.
14.5 Survival. The obligations of Distributor and SecureAlert pursuant
to this Section 14 shall continue in full force and effect for a period of five
years after the termination of this Agreement regardless of how or when this
Agreement is terminated. This Section 14 shall be in addition to, and not deemed
to be in limitation of, Section 4.4 of this Agreement.
15. Arbitration.
15.1 Arbitrators. Any dispute, controversy or claim arising out of or
relating to this Agreement including the breach, termination or validity hereof,
which cannot be resolved by agreement of the Parties within the thirty (30) day
notice period described in Section 15.4, shall be settled finally under the
Rules of Arbitration of the International Chamber of Commerce (the "Rules") by
one or more arbitrators. The arbitration shall be held before one arbitrator
(unless otherwise expressly agreed by the parties in writing) appointed by
mutual agreement of the parties. If, however, the Parties cannot agree upon an
arbitrator prior to the expiration of the thirty (30) day notice period
described in Section 15.4, each shall appoint one arbitrator and the two
arbitrators so appointed shall appoint a third arbitrator. In such a case, a
decision of the majority of the arbitrators shall be binding.
15.2 Site. Unless the Parties shall otherwise agree in writing, the
arbitration shall be held in Houston, Texas, U.S.A. The language to be used in
the arbitral proceedings shall be English.
15.3 Waiver. Any arbitration proceeding hereunder must be instituted
within one year after the controversy or claim becomes known or should have been
known to the party instituting arbitration. Failure to institute an arbitration
proceeding within such period shall constitute an absolute bar to the
institution of any proceedings respecting such controversy or claim, and a
waiver thereof.
15.4 Notice. Neither Party shall institute an arbitration proceeding
hereunder unless, at least thirty (30) days prior thereto, such Party shall have
furnished to the other Party written notice of its intent to do so and of the
basis therefor in detail.
15.5 Law. The arbitrator(s) shall interpret this Agreement in
accordance with the Laws stipulated in Section 19.
15.6 Binding. Any award, order or judgment pursuant to such arbitration
shall be deemed final and binding on all Parties and may be entered or enforced
in any court of competent jurisdiction. The Parties agree to submit to the
jurisdiction of any such court for purposes of the enforcement of any such
award, order or judgment.
15.7 Decision. Any award of damages pursuant to such arbitration shall
be included in a written decision signed by the arbitrator (or a majority of the
arbitrators) which shall state the reasons upon which the award was based,
including all the elements involved in the calculation of any award of damages.
The award of damages shall not include damages that are limited by Section 6.7,
12.5 or any section of this Agreement or any damages other than or in addition
to actual damages, but may include interest from the date of the award.
15.8 Equitable Relief. Notwithstanding any provision of this Agreement,
either Party shall have the right, at any time after commencement of any
arbitration proceeding hereunder and prior to the rendering of any award, order
22
or judgment thereunder, to apply to the arbitrator(s) or to any court of
competent jurisdiction for injunctive or preliminary relief. No application for
injunctive or preliminary relief shall be construed to infringe this arbitration
agreement or affect the powers of the arbitrator(s).
16. Notices. Any notice, transmittal of documents, correspondence or other
communication between the Parties to this Agreement required hereunder shall be
in writing, addressed to the Party to whom sent and transmitted either by an
internationally recognized courier or by facsimile with signed written original
to follow by an internationally recognized courier. All such notices in
compliance with this provision shall be deemed received by the other Party on
the date of receipt of such notice by the other Party. For purposes of this
Agreement, the addresses of the Parties are as follows until changed by written
notice from the Party desiring to change its address to the other Party:
SecureAlert: SecureAlert, Inc.
150 West Civic Center Drive, Suite 400
Sandy, Utah 84070
Telephone: 801-451-6141
Facsimile: 801-451-6281
Attention: Randy Olshen
President
Distributor: Seguridad Satelital Vehicular S.A. de C.V.
Camino al Olivo 15-206
Lomas de Vista hermosa
Mexico DF 05100
Telephone: 52-55-9112-6809
Facsimile: 52-55-9112-6810
Attention: Moises Sevilla
CEO
17. Force Majeure.
17.1 Definitions. Neither Party hereto shall be responsible for any
loss or damage to the other in the event that it is unable to fulfill the whole
or any part of its obligations hereunder, or is prevented or delayed from
fulfilling the same, due to war or hostilities (whether war be declared or not),
invasion, act of foreign enemies, rebellion, revolution, insurrection, military
usurpation of power, civil war or riot, strike, lockout, commotion, disorder,
flood, tempest, earthquake, acts or omissions of civil or military authority
whether legitimate or not, or other causes beyond the control of either Party.
17.2 Notice. Upon the occurrence of an event of force majeure, the
Party affected shall notify the other Party immediately. The rights and
obligations of either Party under this Agreement affected by any such event of
force majeure shall be suspended only for the duration and to the extent of such
event of force majeure, and once such event of force majeure ceases to exist,
the rights and obligations of the Parties shall continue in full force.
18. Definitions and Construction.
18.1 Certain Terms. Capitalized terms used in this Agreement, unless
the context otherwise requires, have the meanings specified in this Section 18.1
or in the part of this Agreement referred to below.
(a) "Agreement" shall have the meaning given to such term in the
preamble.
23
(b) "Affiliate" means with respect to any Person, any other Person
that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with, such
Person. The term "control" (including the terms "controlled by" or
"under common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership, by
contract or otherwise. Any Person shall be deemed to be an Affiliate of
any specified Person if such Person owns more than 50% of the voting
securities of the specified Person, if the specified Person owns more
than 50% of the voting securities of such Person, or if more than 50%
of the voting securities of the specified Person and such Person are
under common control.
(c) "Claim Notice" shall have the meaning given to such term in
Section 12.2(a).
(d) "Client" shall have the meaning given to such term in Section
4.1.
(e) "Customers" shall have the meaning given to such term in the
preamble.
(f) "Damages" shall have the meaning given to such term in Section
12.1(a).
(g) "Distributor" shall have the meaning given to such term in the
preamble.
(h) "Distributor Parties' shall have the meaning given to such
term in Section 12.1(b)
(i) "Effective Date" shall have the meaning given to such term in
Section 7.
(j) "Error" shall have the meaning given to such term in Section
5.3.
(k) "Facilitating Payments" shall have the meaning given to such
term in Section 13.1.
(l) "FCPA" shall have the meaning given to such term in Section
13.2.
(m) "Governmental Authority" means the government of the United
States of America and any other nation or country, or any political
subdivision of such government, whether state, commonwealth, territory
or local, and any agency, authority, commission, department,
instrumentality, judicial or regulatory body, court, tribunal, central
bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative power or functions of or
pertaining to government having jurisdiction over either Party, their
respective Affiliates or the Products, Software or Support Services,
whether acting under actual or assumed authority.
(n) "Indemnified Party" shall have the meaning given to such term
in Section 12.2.
(o) "Indemnifying Party" shall have the meaning given to such term
in Section 12.2(a).
(p) "Initial Term" shall have the meaning given to such term in
Section 7.
(q) "Intellectual Property" means (a) all rights to the name
"SecureAlert" and all patents, patent rights, inventions, shop rights,
know how, trade secrets, designs, drawings, art work, plans, prints,
manuals, computer files, computer software, hard copy files, catalogs,
24
specifications, confidentiality agreements, confidential information
and other proprietary technology, intellectual property rights and
computer programs and similar information; all registered and
unregistered trademarks, service marks, logos, names, trade names and
all other trademark and service mark rights; all registered and
unregistered copyrights; and all registrations for, and applications
for registration of, any of the foregoing, that are used in the conduct
of the business of SecureAlert, and (b) any and all other information
and material proprietary to SecureAlert, owned, possessed or used by
SecureAlert, whether or not such information is embodied in writing or
other physical form, and which is not generally known to the public,
that (i) relates to financial information regarding SecureAlert,
including, without limitation, (A) business plans and (B) sales,
financing, pricing and marketing procedures or methods of SecureAlert
or (ii) relates to specific business matters concerning SecureAlert,
including, without limitation, the identity of or other information
regarding sales personnel or customers of SecureAlert.
(r) "Law" means (i) any law, legislation, statute, act, rule,
ordinance, decree, treaty, regulation, order, judgment or similar legal
requirement of any Governmental Authority or (ii) any legally binding
announcement, directive or interpretation thereof promulgated by any
Governmental Authority.
(s) "License" shall have the meaning given to such term in Section
4.1.
(t) "License Fee Start Date" shall have the meaning given to such
term in Schedule D.
(u) "Maintenance Release" shall have the meaning given to such
term in Section 5.2.
(v) "Non-Solicitation" shall have the meaning given to such term
in Section 6.11.
(w) "Notice Period" shall have the meaning given to such term in
Section 12.2(a).
(x) "Party" means either Distributor or SecureAlert.
(y) "Permitted Use" means the use of the Products or Software
solely in direct relation to the criminal justice system in the Sales
Territory.
(z) "Person" means any individual, natural person, corporation,
joint venture, partnership, limited partnership, limited liability
company, trust, estate, business trust, association, custodian,
nominee, Governmental Authority, or any other entity or organization.
(aa) "Products" shall have the meaning given to such term in the
preamble.
(bb) "Renewal Term" shall have the meaning given to such term in
Section 7.4.
(cc) "Rules" shall have the meaning given to such term in Section
15.1.
(dd) "Sales Territory" shall have the meaning given to such term
in the preamble.
(ee) "SecureAlert Parties" shall have the meaning given to such
term in Section 12.1.
(ff) "SecureAlert Confidential Information" shall have the meaning
given to such term in Section 14.
25
(gg) "Servicees" shall have the meaning given to such term in
Section 6.7(a).
(hh) "Software" shall have the meaning given to such term in
Section 4.1.
(ii) "Software Proprietary Information" shall have the meaning
given to such term in Section 4.4.
(jj) "Support Services" shall have the meaning given to such term
in Section 5.1.
(kk) "Trademarks" shall have the meaning given to such term in
Section 10.1.
(ll) "Training" shall have the meaning given to such term in
Section 5.6.
(mm) "Unit" means one set of Products that comprises (i) one
TrackerPAL(TM) electronic monitoring bracelet device, (ii) one charger,
(iii) two batteries, (iv) one A/C adapter and (v) one strap kit that
includes a quantity of pre-cut straps.
(nn) "Update" shall have the meaning given to such term in Section
5.3.
18.2 Other Terms. Other terms may be defined elsewhere in this
Agreement and shall have the meaning there indicated.
18.3 Gender. Words used in this Agreement, regardless of the number or
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context shall require.
18.4 Construction. As used in this Agreement, unless expressly stated
otherwise:
(a) (i) "including" means "including, without limitation", (ii)
the words "hereof", "herein" and "hereunder", and similar words, refer
to this Agreement as a whole and not to any particular section,
paragraph or provision of this Agreement and (iii) "or" means "either
or both".
(b) unless otherwise specified, all references in this Agreement
to sections, paragraphs or schedules are deemed references to the
corresponding sections, paragraphs or schedules in this Agreement.
(c) the schedules attached hereto and referred to herein
constitute a part of this Agreement and incorporated by reference
herein.
18.5 Language. This text of this Agreement has been written in and this
Agreement has been executed in the English language, and any interpretation or
construction of this Agreement shall be based solely on the English language
official text.
18.6 Headings. The section and paragraph headings contained herein are
for convenience of reference only and shall not affect or control the
construction or interpretation of any provision hereof.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah, U.S.A. and, to the extent
applicable, the laws of the United States. The Parties hereby exclude the
application of The United Nations Convention for Contracts for the International
Sale of Goods.
26
20. Right of Setoff. In addition to any other rights now or hereafter granted
under applicable Law or otherwise, and not by way of limitation of any such
rights, SecureAlert is hereby authorized from time to time, without presentment,
demand, protest or other notice of any kind to Distributor, or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all amounts owing by Distributor against and on
account of any amounts owing by SecureAlert under this Agreement to Distributor.
21. Reliance. Each Party acknowledges that it has read and understands the terms
of this Agreement and has had an opportunity to consult with legal, tax and
accounting counsel and advisors of its choice concerning the meaning and effect
thereof. Neither Party has relied on any other Party or its counsel or advisors
with respect to the meaning or effect of any such agreement or instrument.
22. Remedies; Waivers. All remedies available to either party for breach of this
Agreement are cumulative and may be exercised concurrently or separately.
Exercise of any one remedy shall not be deemed an election of such remedy to the
exclusion of other remedies. Any waiver by either of the parties hereto of any
right arising hereunder shall not be construed as a continuing waiver of
subsequent breaches of such right or of any other right.
23. Severability. Should any provision of this Agreement be held unenforceable
or invalid, then the parties hereto agree that such provision shall be deemed
modified to the extent necessary to render it lawful and enforceable, or if such
a modification is not possible without materially altering the intention of the
parties hereto, then such provision shall be severed herefrom. In such case the
validity of the remaining provisions shall not be affected and this Agreement
shall be construed as if such provision were not contained herein.
24. Assignment. Neither Party shall assign or subcontract the whole or any part
of this Agreement without the other Party's written consent.
25. Entire Agreement. All agreements and understandings between the Parties
relating to the purchase and distribution of the Products in the Sales
Territory, the License of the Software and the Support Services are embodied in
this Agreement. This Agreement supersedes any previous agreements and
understandings between the parties as to the subject matter hereof and is entire
in itself and not a part of any other agreement, and no promises, covenants, or
representations of any kind or nature other than those expressly stated herein
have been made to induce either party to enter into this Agreement. All other
terms and conditions, whether express or implied by statute, common law, trade
usage or custom are hereby excluded and extinguished.
26. Amendment. No amendment, modification, rescission, or waiver of this
Agreement or any provision hereof shall be binding upon SecureAlert or
Distributor unless evidenced by an agreement in writing duly executed by
authorized officers of SecureAlert and Distributor, or expressly permitted by
the terms of this Agreement; provided that Distributor agrees to enter into an
amendment on or before the 60th day after the Effective Date, to reflect any
reasonable comments provided by SecureAlert's Mexican legal advisors regarding
this Agreement and the subject matter hereof.
27. Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
27
IN WITNESS WHEREOF, the parties hereto, by their duly authorized
representatives, have executed and delivered this Agreement as of the date first
above written.
SECUREALERT:
SECUREALERT, INC.
By: /s/ Randy Olshen
----------------------
Name: Randy Olshen
----------------
Title: President
---------------
DISTRIBUTOR:
SEGURIDAD SATELITAL VEHICULAR S.A. DE C.V.
By: /s/ Moises Sevilla
-----------------------
Name: Moises Sevilla
-----------------
Title: CEO
----------------
Attachments:
Schedule A - Product Description
Schedule B - Customers
Schedule C - Product Prices and Minimum Purchase Requirements
Schedule D - License Fee
Schedule E - Termination Fee Schedule
Schedule F - SecureAlert Trademarks
28
Schedule A
Product Description
TrackerPAL(TM) electronic monitoring bracelet device, together with one charger,
two batteries, one A/C adapter and one strap kit that includes a quantity of
pre-cut straps.
One set of the foregoing equipment (i.e., one device, two batteries, one adapter
and one strap kit) comprises one Unit of the Products.
A-1
Schedule B
Customers
Customers must have places of business in, and use the Products, in the Sales
Territory. Customers must be part of the criminal justice system in Mexico. No
Person may be a Customer if such Person uses, or allows or facilitates other
Persons to use, the Products for any use other than the Permitted Use.
B-1
Schedule C
Product Prices and Minimum Purchase Requirements
PRICE TERMS FOR PRODUCTS
$600.00USD per Unit.
- ----------------------- --------------------------------------------------------
Time Period Minimum Purchase Requirement Terms
- ----------------------- --------------------------------------------------------
Initial Term 10,000 Units by the end of the Initial Term
- ----------------------- --------------------------------------------------------
First Renewal Term A number of Units such that Distributor shall have
purchased in the aggregate, at least:
2,500 Units by the end of the first quarter of the
First Renewal Term
5,000 Units by the end of the second quarter of the
First Renewal Term
7,500 Units by the end of the third quarter of the
First Renewal Term
10,000 Units by the end of the fourth quarter of the
First Renewal Term
- ----------------------- --------------------------------------------------------
Second Renewal Term A number of Units such that Distributor shall have
purchased in the aggregate, at least:
2,500 Units by the end of the first quarter of the
Second Renewal Term
5,000 Units by the end of the second quarter of the
Second Renewal Term
7,500 Units by the end of the third quarter of the
Second Renewal Term
10,000 Units by the end of the fourth quarter of the
Second Renewal Term
- ----------------------- --------------------------------------------------------
Third Renewal Term A number of Units such that Distributor shall have
and Each Renewal purchased during each such Renewal Term, at least 115%
Term Thereafter of the Units [required to be] purchased during the
immediately preceding Renewal Term
- ----------------------- --------------------------------------------------------
C-1
Schedule D
License Fee
DAILY FEE
For each TrackerPAL(TM) electronic monitoring bracelet device, a US$2.00 per day
fee, commencing upon the earlier to occur of (i) the activation of such device
and (ii) the 90th day after Distributor's purchase of such device (the "License
Fee Start Date").
D-1
Schedule E
Termination Fee Schedule
- ------------------------------------ -------------------------------------------
Time Termination Termination Fee and Other Amounts Payable
- ------------------------------------ -------------------------------------------
Termination becomes effective at $100,000, plus all other amounts payable
or before the day after the to SecureAlert under the Agreement,
expiration of the Initial Term together with all applicable interest, if
any, as provided for in the Agreement
- ------------------------------------ -------------------------------------------
Termination becomes effective $50,000, plus all other amounts payable
after the first day following the to SecureAlert under the Agreement,
Initial Term and at or before the together with all applicable interest, if
day after the expiration of the any, as provided for in the Agreement
First Renewal Term
- ------------------------------------ -------------------------------------------
Termination becomes effective $0, provided, that Distributor shall be
after the first day following the required to pay all amounts payable to
First Renewal Term and at or SecureAlert under the Agreement, together
before the day after the with all applicable interest, if any, as
expiration of the Second Renewal provided for in the Agreement
Term
- ------------------------------------ -------------------------------------------
E-1
Schedule F
SecureAlert Trademarks
TrackerPAL(TM): electronic monitoring bracelet device
F-1