SUB-CONTRACT AGREEMENT
Between
Hyundai Syscomm Corp.
And
Electronic Control Security, Inc
Dated as of: December 22, 2006
THIS AGREEMENT is dated as of December 22, 2006.
PARTIES
(1) Hyundai Syscomm Corp. a California corporation with a place of business at
0000 Xxxxxx Xxx, Xxx Xxxxx XX 00000 ("Contractor").
(2) Electronic Control Security, Inc., a New Jersey corporation with a place
of business at 000 Xxxxxxxxxx Xxxxxx, Xxxx X0, Xxxxxxx XX 00000 ("ECSI").
BACKGROUND
A. Contractor and its Affiliates, amongst other things, design, manufacture,
supply, market, sell, install and maintain wireless networks and
components and security systems throughout the world ("Contractor's
Primary Business").
X. XXXX and its Affiliates, amongst other things, supply, market, sell,
install and maintain surveillance and security systems ("ECSI's Primary
Business").
C. Contractor and its Affiliates, on the one hand, and ECSI and its
Affiliates, on the other hand, believe that:
(i) ECSI and its Affiliates have the knowledge and capability to
integrate ECSI's Primary Business with Contractor's Primary Business
by retrofitting surveillance and security systems into established
wireless networks and by integrating such systems into pending and
future wireless infrastructure projects around the world that
Contractor and its Affiliates procure;
(ii) the integration of ECSI's Primary Business into Contractor's present
and future projects in Contractor's Primary Business will enhance
Contractor's ability to maximize its profits and make its offerings
to present and potential clients more attractive; and
(iii) ECSI's relationship with Contractor and its Affiliates will enable
ECSI to greatly expand its worldwide exposure, revenues and
enterprise value.
D. Contractor represents that it will have the right to hire ECSI on each
project on which it requests ECSI's involvement.
X. XXXX represents that it will have the right to work for Contractor on each
project on which it agrees to participate with Contractor.
F. Contractor desires to participate in ECSI's growth in market value as a
result of the benefits ECSI will receive under this Agreement, and ECSI is
willing to encourage Contractor to maximize its collaboration with ECSI by
making available to Contractor its shares of Common Stock that will have
the potential to appreciate in value as ECSI's revenues from collaborating
with Contractor increase.
NOW THEREFORE, in consideration of the promises and the mutual covenants set
forth herein, the Parties agree as follows:
1. DEFINITIONS
Capitalized terms used in the Agreement, unless defined in the text of the
Agreement, shall have the meanings specified in this Section 1.
1.1. Affiliate means any company, which is under common control with,
controls, or is controlled by, either one of the Parties to the
Agreement.
1.2. Agreement means this document, Annexes and all amendments and
changes signed by the Parties.
1.2. Attachment means a document agreed between the Parties and attached
to this Agreement forming an integral part hereto.
1.4. Common Stock means the common stock, par value $.001 per share, of
ECSI.
1.5. Cost of Goods Sold means the sum of the direct cost of good sold
plus such other related manufacturing costs as may be mutually
agreed by the Parties.
1.6. Escrow Shares means the four million eight hundred thousand
(4,800,000) shares of Common Stock being sold to the Contractor
pursuant to the Stock Purchase Agreement.
1.7. Gross Profit means the excess of the gross revenues received by ECSI
in connection with this Agreement over the Cost of Goods Sold in
connection with such gross revenues.
1.8. Registration means the registration under the Securities Act of 1933
of the resale of all shares of Common Shares owned by Contractor.
1.9. Registration Rights Agreement means the Registration Rights
Agreement dated the date hereof between Contractor and ECSI.
1.10. Section 2.2 Update means a quarterly update provided by Contractor
pursuant to Section 2.2.
1.11. Stock Purchase Agreement means the Stock Purchase Agreement dated as
of the date hereof between Contractor and ECSI.
1.12. Term means the term of this Agreement as determined pursuant to
Section 4.
1.13. Warrant means the warrant dated the date hereof issued and delivered
by ECSI to Contractor pursuant to the Stock Purchase Agreement. The
Warrant shall become exercisable as Contractor is credited with a
share of ECSI's Gross Profit under this Agreement.
1.14. Warrant Shares means the shares of Common Stock that may be issued
by ECSI to Contractor upon the exercise of the Warrant.
2. RESPONSIBILITIES OF CONTRACTOR
Contractor's responsibilities during the Term shall include the following:
2.1. Contractor will provide ECSI with sub-contract payments during the
Term against deliverables to be mutually agreed between the Parties
as quickly as possible after the execution and delivery of this
Agreement. Unless otherwise specified in the relevant purchase order
entered into by ECSI and Contractor prior to a project, all
sub-contract payments to ECSI by Contractor shall be subject to
Contractor's prior receipt of contract revenues from the contract
counterparty with respect to the work performed or products supplied
by ECSI. ECSI acknowledges that contract payments to Contractor with
respect to work required to have been performed or products required
to have been supplied by ECSI ("ECSI Deliverables") may be reduced
or delayed by a Contractor counterparty due to the quality or
timeliness of the ECSI Deliverables. ECSI agrees to take all
xxxxx-cially reasonable actions to correct the reason for such
reduction or delay, and Contractor agrees to take all commercially
reasonable actions to encourage Contractor counterparties to accept
and pay for all corrected ECSI Deliverables.
2.2. On or prior to the last day of each calendar quarter during the
Term, Contractor shall deliver to ECSI a Section 2.2 Update that
sets forth a minimum in contract revenues based on US GAAP during
the subsequent 12-month period. By way of illustration of the
foregoing, on or prior to December 31, 2006, Contractor shall
provide ECSI with a Section 2.2 Update that sets forth the minimum
Dollar amount of sub-contract US GAAP revenues to be provided to
ECSI during the 12-month period ending December 31, 2007, and on or
prior to March 31, 2007, Contractor shall deliver to ECSI a Section
2.2 Update that sets forth the minimum Dollar of sub-contract US
GAAP revenues to be provided to ECSI during the 12-month period
ending March 31, 2008. The aggregate amount of minimum revenue to be
guaranteed pursuant to the Section 2.2 Updates delivered with
respect to calendar quarters up to an including June 30, 2008 is
subject to the aggregate gross revenue guarantee set forth in
Section 2.4 hereof.
2.3. Contractor will provide ECSI with the opportunity to participate
with Contractor in contracts Contractor and its Affiliates now have
or hereafter seek to obtain during the Term ("Contracts"), where
ECSI's participation would enhance the value of the Contract to
Contractor by adding a surveillance and security component to the
scope of work of such Contract.
2.4. Contractor hereby agrees to provide under this Agreement to ECSI on
or prior to June 30, 2008 at least twenty five million dollars
($25,000,000) of gross revenues from security worthy assets on terms
beneficial to HYUNDAI as well as ECSI, provided that ECSI performs
its obligations under this Agreement in a timely and efficient
manner. It is reasonable to assume that ECSI will have a gross
profit margin under this Agreement of at least thirty-five percent
(35%) provided that ECSI is efficient in discharging its duties
under this Agreement.
4. RESPONSIBILITIES OF ECSI
ECSI's responsibilities during the Term shall include the following:
3.1. ECSI shall continue sub-contracting work for Contractor as long as
Contractor procures the approvals deemed necessary by Contractor for
ECSI's participation under all relevant contracts.
3.2. ECSI shall provide Contractor and its Affiliates on a timely basis
with all assistance needed to integrate ECSI's surveillance and
security components into Contractor's plan of work for each contract
under which ECSI is a sub-contractor.
3.3. ECSI will design a technical solution to address the surveillance
and security needs of Contractor and its Affiliates. The Parties
will mutually agree in advance upon the acceptance criteria for the
solution. Upon acceptance, ECSI will proceed with the implementation
of the solution. This will include the assembly of the necessary
hardware and software components and features, the delivery of same
to Contractor for deployment at the site of Contractor's projects,
and appropriate guarantees of performance by ECSI to assure
Contractor that ECSI will perform its responsibilities according to
contract specifications and on a timely basis.
3.4. ECSI shall maintain the confidentiality of the counterparty to each
Contract but may make known that Contractor is the counterparty to
this Agreement.
3.5. ECSI shall permit Contractor to become and remain a fifty percent
(50%) holder of ECSI Common Stock by compensating Contractor for
Gross Profit recognized by ECSI from this Agreement on a basis
designed to share the benefit between ECSI and Contractor. ECSI
shall be credited with seventy percent (70%) of Gross Profit and
Contractor shall be credited with will thirty percent (30%) of Gross
Profit. Contractor may at its election take its thirty percent (30%)
of Gross Profit in the form of cash or in the form of Warrant Shares
becoming exercisable under the Warrant, with each Warrant Share
becoming exercisable with fifty eight cents ($.58) Gross Profit
credited to Contractor until the average price of Escrow Shares and
the Warrant Shares then exercisable or exercised becomes forty cents
($.40) per share. By way of example, if revenues provided to ECSI by
Contractor and or one or more Contractor Affiliates under this
Agreement produce a Gross Profit to ECSI of thirty five percent
(35%) on aggregate gross revenues of Twenty Five Million Dollars
($25,000,000) and Contractor elects to take its share of the Gross
Profit by making the Warrant exercisable with respect to Warrant
Shares, the Warrant would become exercisable with respect to four
million five hundred twenty five thousand eight hundred sixty two
(4,525,862) Warrant Shares calculated as follows: ($25,000,000 x .35
x .30)/$.58 = 4,525,862; provided, however, that the Warrant shall
be exercisable for a maximum number of Warrant Shares, that when
added to the Escrow Shares would make Contractor own fifty percent
(50%) or less of the outstanding shares of ECSI Common Stock. Any
Warrant Shares becoming exercisable but not issued because of the
fifty percent (50%) limitation set forth in the preceding proviso,
shall be promptly issuable to Contractor upon exercise of the
Warrant as ECSI's outstanding shares of Common Stock increase so
that, to the extent the Warrant is exercised by Contractor,
Contractor shall retain its fifty percent (50%) ownership interest
of ECSI Common Stock.
3.6. Once the average cost to Contractor of the Escrow Shares and all
Warrant Shares then exercisable or exercised becomes forty cents
($.40) per share, any further Warrant Shares becoming exercisable
under the Warrant shall be valued at forty cents (.40) rather than
fifty eight cent ($.58) per share.
4. TERM OF AGREEMENT
This Agreement shall be valid for a period of three (3) years from its date (the
"Period"). The Period shall be renewed for additional one-year periods unless
the Agreement is terminated by either Party pursuant to Section 25. Even if the
Period isn't renewed, the responsibilities of the Parties, which started during
the Period and which stays to a duration after the end of the Period, shall
continue in accordance with the Agreement.
5. CONSULTATION
5.1. The Parties shall have periodic review meetings, where their
authorized representatives shall consult with each other with
respect to existing and prospective projects on which ECSI is
sub-contracting or may be expected to sub-contract to Contractor.
5.2. The Parties shall exchange information on design changes or
improvements to their respective products and services, new
products, market, demographic and similar matters as mutually
agreed. All such information shall be subject to the terms and
conditions of the Mutual Confidentiality, Non-Circumvention and
Invention Transfer Agreement between the Parties, dated November 28,
2006.
6. THE COMMON STOCK
ECSI represents and warrants that its Board of Directors has ratified the
execution and delivery of this Agreement, the Warrant and the issuance of the
Warrant Shares pursuant to the Warrant.
7. PRODUCT WARRANTY
7.1. ECSI warrants to Contractor that, as of the date title to products
supplied by ECSI passes to Contractor or the contract counterparty,
ECSI will have the right to sell, transfer, and assign such products
and the title conveyed by ECSI shall be good.
7.2. ECSI guarantees to Contractor that the ECSI products and product
components supplied to Contractor for each project on which ECSI
sub-contracts shall be provided without any material and
craftsmanship defects and that the products or product components
shall be in compliance in all material respect with all ECSI
Technical Specifications. In case a defect or lack of conformity is
detected during the guarantee period in a product or product
component supplied by ECSI during the normal and correct usage,
Contractor shall inform ECSI about the incident promptly and shall
follow the instructions of ECSI concerning the return of the
defective of non-conforming product or product component. ECSI shall
decide whether to repair or change the product or product component
returned to ECSI, without requesting any material or craftsmanship
expenses. In case technical operational defects due to manufacturing
defects are detected, the changed product or product components
shall be changed by ECSI with new products or product components.
The guarantee periods for the products and product components
provided by ECSI shall be defined on a product by product basis at
time of P.O. and shall become effective immediately following the
assembly of the products and product components by Contractor.
Expenses caused by the defects of the products shall be met by ECSI.
7.3. Warranty replacement product components are warranted to be in good
working order for the unexpired warranty period. The costs of
transportation, risk of loss and customs duties related to the
shipment of product and/or product components for repair or
replacement from Contractor to ECSI shall be for the account of
Contractor. The costs of transportation, risk of loss and customs
duties related to the shipment of repaired or replacement products
and/or product parts from ECSI to Contractor are for the account of
ECSI.
7.4. The foregoing warranty does not extend to products or product
components that have (a) been subjected to misuse, neglect, power
failures or surges, lightning, fire, flood, pest damage or accident,
(b) been repaired or altered contrary to ECSI's instructions, (c)
been improperly handled, installed, stored, or maintained, (d) been
used contrary to ECSI instructions.
8. SOFTWARE WARRANTY
8.1. ECSI guarantees Contractor that, for the warranty period set forth
below, all software supplied by ECSI to Contractor and installed in
accordance with ECSI's instructions will perform substantially as
described in the technical specifications for such software. During
the warranty period, in case a failure to perform as set forth
above, after the instructions of ECSI are followed and the defective
software is returned to ECSI, ECSI shall fix or change the
aforementioned software without any additional charges. ECSI shall
do its best to fix or change the software.
8.2. The warranty period for software provided by ECSI will be 12 months
from the date of installation of the software by Contractor.
8.3. When it discovers a defect subject to this warranty, Contractor
shall contact ECSI and based on the nature of the request,
Contractor will be advised as to the estimated time for trouble
clearance or provided with the information requested. ECSI will be
responsible for resolution of all troubles reported.
ECSI makes no warranty as to the following: defects other than those
which result in performance not in conformance with ECSI's
specifications and which have a significant impact on the user of a
product; defects related to Contractor's or its End Users' misuse,
neglect, accident or abuse; defects related to Contractor's or its
End Users' alteration of software.
9. WARRANTY DISCLAIMER
THE WARRANTIES FOR PRODUCTS AND SOFTWARE SET FORTH IN SECTIONS 7 AND 8 ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES, INCLUDING
BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. CONTRACTOR'S SOLE AND EXCLUSIVE REMEDY SHALL BE ECSI'S OBLIGATION TO
CORRECT OR REPLACE, AS SET FORTH IN SECTIONS 7 AND 8.
10. REPAIRS NOT COVERED UNDER WARRANTY
10.1. In addition to repairs provided for in the warranty sections, ECSI
will, during the Term and for a period of 5 years thereafter,
provide repair services for such reasonable charges as may from time
to time be specified by ECSI. Products to be repaired under this
Section must be returned by Contractor to a location designated by
ECSI. The repaired product or product component will be shipped to
Contractor.
10.2. It is understood that, to facilitate the process of product or
product components returned to ECSI for non-warranty repair, new
factory reconditioned, refurbished, remanufactured, or functionally
equivalent replacement product component may be shipped. Replacement
and repaired product or product components shall be warranted for a
period of three (3) months from the date of installation.
10.3. All transportation costs, custom duties, risk of loss and damage to
product or product components returned for repair under this section
will be borne by Contractor, and all transportation costs, custom
duties, and in-transit risk of loss and damage to such repaired or
replacement product or product components returned to Contractor
will be borne by Contractor.
11. TRAINING
ECSI shall provide training for the assembly, maintenance and usage of the test
equipment, and shall charge its most favored prices to Contractor, in case
another agreement concerning the topic isn't agreed upon by the Parties. The
Parties shall jointly decide on the location of these aforementioned trainings.
In case another agreement isn't agreed upon by the Parties, the provided
trainings and all the printed literature shall be English. The initial product
trainings shall be provided by ECSI as part of the initial system offering.
12. PRICE
ECSI shall provide such bid information as Contractor reasonably requires in
order for Contractor to bid on contracts in which ECSI acts as a sub-contractor.
13. INVOICING AND PAYMENTS
13.1. Unless otherwise agreed, the provisions in this Section shall apply
to invoicing and payments.
13.2. Contractor shall effect all payments due to ECSI net in US Dollars
(USD) to the ECSI bank account indicated in the applicable invoice.
All price information on invoices and related documents shall be in
US Dollars.
13.3. The whole of the order price (100%) shall be paid by Contractor,
without any interest, within ten (10) days of Contractor's receipt
of contract payments for items supplied by ECSI.
13.4. Letter of Credit - To be determined and mutually agreed.
14. DELIVERY AND TITLE
14.1. All deliveries by ECSI to Contractor shall be made to Contractor FOB
ECSI factory.
14.2. Title and risk of loss to the products (except as provided in
Section 17 with regard to Firmware) shall pass to Contractor on
shipment, without thereby in any way waiving ECSI's right to any
payment not yet received at that time.
15. IMPORTATION EXPENSES AND TAXES
Contractor shall be responsible for payment for all taxes, customs duties and
other governmental charges, however designated, associated with importation of
the products into the country where the contract is to be performed. Contractor
shall reimburse ECSI for any such taxes, duties and charges that ECSI advances
or pays.
16. NOTICES
All notices, which shall or should be made in compliance with this hereby
Agreement, shall be made in written form and to the addresses set forth herein,
or to the addresses notified to the other Party in written form afterwards; and
when these notices are received then they shall be accepted as made. Notices
made with faxes or e-mails shall only be accepted, in case the sending may be
proved.
17. FIRMWARE
No title or other ownership rights in Firmware or any copy thereof shall pass to
Contractor under this Agreement. Contractor agrees that it shall not alter any
notices on, prepare derivative works based on, or reproduce, disassemble or
decompile any Software embodied in Firmware recorded in the products.
18. INTENTIONALLY OMITTED
19. INTENTIONALLY OMITTED
20. TRADEMARKS AND MARKINGS
ECSI hereby consents and grants Contractor permission to utilize certain ECSI
designated trademarks, insignia and symbols ("Marks") solely in connection with
Contractor'S advertising and promotion of the contracts on which ECSI is a
sub-contractor. Contractor's rights under this Section 20 shall be subject to
Contractor's agreement to comply with any reasonable written instructions
provided by ECSI from time to time with respect to usage of the Marks.
21. MUTUAL LIMITATION OF LIABILITY
21.1. No action or proceeding against a Party or its Affiliates under this
Agreement may be commenced more than twelve (12) months after the
cause of action accrues.
21.2. This Article shall apply and remain operative notwithstanding the
failure of an exclusive remedy.
22. INDEMNITY
22.1. General Litigation: - Either Party (for the purpose of this
paragraph, an "Indemnifying Party") will defend and indemnify the
other Party (an "Indemnified Party") for any settlement or final
judgment that arises out of a claim or suit by third parties to the
extent that such claim or suit is based on an action for negligent
acts or omissions of the Indemnifying Party. An Indemnifying Party's
obligation to indemnify will be reduced to the extent that the
settlement or judgment is attributable to the actions of the
Indemnified Party. The Indemnified Party will give the Indemnifying
Party prompt notification of any claim or suit and will co-operate
in the defence or settlement thereof. The Indemnifying Party will be
responsible for all attorney's fees and costs incurred in defending
or settling any claim or suit. In no event will the liability of an
Indemnifying Party under this Article (inclusive of legal fees)
exceed the Gross Profits credited to such Indemnifying Party
pursuant to Section 3.5 of this Agreement.
22.2. Patent, Trademark and Copyright Litigation: - ECSI shall, subject to
the conditions and exceptions stated in this paragraph, defend or
settle all suits against Contractor or any of Contractor's
contractual counter parties alleging that any product or product
component including Firmware provided by ECSI (for the purpose of
this paragraph the term "Product" shall be read to mean product and
product component, including Firmware) furnished hereunder infringes
any U.S. patent, U.S. trademark or U.S. copyright, by reason of its
use, in accordance with ECSI's specifications, and shall pay all
damages and costs which by final judgement of a court of competent
jurisdiction may be assessed against or on account of such
infringement; provided that ECSI (i) shall have had prompt written
notice from Contractor of the claim of such infringement and full
opportunity and authority to assume the sole defence of and to
settle such claims or suits, and (ii) shall have been furnished,
upon ECSI's request, by Contractor with all information and
assistance available to Contractor for such defence or settlement.
If the use of the product shall be or is likely to be enjoined, ECSI
at its sole discretion will either (a) procure for Contractor a
license or other right to continue use and sale of the product; or
(b) replace the enjoined product with a suitable substitute free of
any infringement; or (c) modify them so they become non-infringing.
Contractor agrees to indemnify and save harmless ECSI and its
suppliers and Affiliates from all costs, expenses, liabilities and
claims for (a) infringement of any intellectual property rights
arising from adherence to instructions, specifications or drawings
which ECSI is directed by Contractor to follow; or (b) infringement
of any intellectual property rights related to Contractor's use of
the product in combination with any item or items not furnished by
ECSI.
23. TERMINATION OF AGREEMENT
This Agreement may be terminated by either Party, in its sole discretion, upon
sixty (60) days' prior written notice if the other Party has materially breached
this Agreement and such breach (provided it is capable of remedy) remains
uncured for a period of thirty (30) days following receipt of notice of such
failure, default or breach; or if any material written representation made by
the other Party shall not be true and correct as of the relevant publication
date.
24. FORCE MAJEURE
Neither Party shall be held responsible for any delay or failure in performance
of any part of the Agreement to the extent such delay or failure is caused by:
fire; flood; explosion; war or the engagement of hostilities; strike; embargo;
labor dispute; government requirement; acts or failure to act of civil or
military authority; acts of God or the public enemy; inability to secure
materials or transportation facilities; acts or omissions of carriers or
suppliers; or any other causes beyond its control, whether or not similar to the
foregoing (hereafter, a "Force Majeure Condition").
25. CHOICE OF LAW AND SETTLEMENT OF DISPUTES
25.1. This Agreement shall be administered and interpreted in accordance
with California laws other than laws which would make the laws of
another jurisdiction applicable.
25.2. All conflicts arising about or in connection with this hereby
Agreement shall be settled by 3 arbiters in accordance with the
commercial rules and regulations of the American Arbitration
Association International Chamber of Commerce. The arbitration shall
be conducted in San Francisco, California and the arbitration
language shall be English.
26. ASSIGNMENT
This Agreement shall not be assigned by either Party in whole or in part,
without the prior written consent of the other Party, (such consent not to be
unreasonably withheld). Any such "assignment" shall include, without limitation,
a merger, sale, or transfer of control, by operation of law or otherwise.
27. SUBCONTRACTING
Each Party may subcontract any or all of the work to be performed by them under
the terms and conditions of the Agreement, but ECSI and Contractor shall retain
the responsibility for the work subcontracted.
28. EXPORT CONTROL REGULATIONS
28.1. ECSI and its Affiliates shall: (i) procure the necessary exportation
licenses from the United States Chamber of Commerce or from the
country of origin; and (ii) shall export the products and product
components.
28.2. Contractor shall be responsible for importing the products and
product components into each country where a contract is to be
performed and where ECSI is a sub-contractor.
28.3. Contractor agrees to provide to ECSI, upon its request, all
necessary assistance to facilitate the procurement of such required
export licenses.
28.4. In case Contractor has signed an agreement with its customer, and
has placed an order to ECSI, then ECSI is responsible for providing
the mentioned products on time, and in case a delay occurs or ECSI
isn't able to obtain the necessary exportation licenses, then ECSI
shall be held responsible and Contractor shall have the right to
demand a compensation.
28.5. Contractor acknowledges that the commodities transmitted or sold
under the Agreement may in fact be subject to export and re-export
restrictions under the United States Department of Commerce Export
Control Regulations (the "Regulations") and may require the specific
written permission of the United States Department of Commerce to
export or re-export the commodities outside the country of
destination of such commodities listed in XXXX'x xxxx of lading (the
"Destination Country"). Contractor further acknowledges that any
product manufactured by Contractor or its agents incorporating any
item(s) furnished hereunder may also require the specific written
permission of the United States Department of Commerce for export
for the Destination Country, as described in Part 776.12 of the
Regulations.
28.6. Contractor hereby assures ECSI that it does not intend to and will
not knowingly, without the prior written consent, if required, of
the Office of Export Administration of the Xxxxxx Xxxxxx Xxxxxxxxxx
xx Xxxxxxxx, Xxxxxxxxxx, X.X. 00000, transmit directly or
indirectly, sell, transfer, or, convey (i) any of the technical
information (including technology and information included in the
product components) or software furnished by ECSI; or (ii) any
immediate product (including materials, processed and services)
produced directly by the use of any such technical information to
(1) Afghanistan, the People's Republic of China, Iraq or any Group
Q, S, W, Y or Z country as specified in Supplement No. 1 to Part 770
of the Regulations; or (2) any citizen or resident of the
aforementioned countries; or (3) any individual, person or entity
appearing on the Table of Denial orders as published in Supplements
Nos. 1 and 2 to Part 788 of the Regulations. Current copies of such
lists and tables will be provided by ECSI to Contractor upon
request.
28.7. Contractor agrees to inform ECSI promptly in writing of any such
written consent issued by the United States Office of Export
Administration.
28.8. Contractor agrees that it will not, without the prior written
consent of ECSI and the prior written authorization of the United
States Department of Commerce, export directly or indirectly, any
information or product components including any associated Firmware
covered by the Agreement to any country outside of the country in
which the contract on which ECSI supplied such information or
product components is to be performed.
28.9. Contractor acknowledges that its obligations under this Article
shall survive the termination of the Agreement.
29. U.S. FOREIGN CORRUPT PRACTICES ACT
Contractor acknowledges that it is familiar with and fully understands the
provisions of the U.S. Foreign Corrupt Practices Act of 1977 and its subsequent
amendment of 1988 ("the Act"), and that with respect to the Act neither
Contractor nor any officer, director, employee or agent of Contractor shall do
or be instructed to do any of the following: (a) pay or give anything of value,
either directly or indirectly, to an official of any government or any political
party for the purpose of influencing an act or decision in his official
capacity, or inducing him to use his influence with the government in order to
assist Contractor in obtaining or retaining business for or with, or directing
business to, any person, or for any other purpose whatsoever; or (b) take any
act or use any compensation received for any purpose which would constitute a
violation of any law of the U.S. or any political subdivision within the
Territory, including the Act.
30. WAIVER
No failure to exercise and no delay or partial exercise of a right or power
conferred upon a Party under the terms of the Agreement shall operate as a
waiver of such right or power.
31. SURVIVAL OF OBLIGATIONS
The obligations of the Parties under Sections 6-10, 13-17, 21, 22 and 25-34 of
this Agreement shall survive any termination of this Agreement.
32. SEVERABILITY
If any section, paragraph or Article in the Agreement shall be held to be
invalid or unenforceable, then the meaning of such section, paragraph or Article
(the "Element") shall be construed so as to render it enforceable, to the extent
feasible; and if no feasible interpretation would save such section, paragraph
or Article, it shall be severed from the Agreement and the remainder of the
Agreement shall remain in full force and effect. However, in the event any
Element is considered an essential commercial or legal element of the Agreement
by either ECSI or Contractor, the Parties shall promptly negotiate and implement
a replacement therefor.
33. GOVERNING LANGUAGE
This Agreement has been made and executed in the English language. In case of
conflict between the Agreement and any translation thereof from English, this
English counterpart of this Agreement shall control.
34. ENTIRE AGREEMENT
The terms and conditions contained in the Agreement supersede all prior oral or
written understandings between the Parties with respect to the subject matter
hereof, shall constitute the entire agreement between them concerning the
subject matter of the Agreement and shall not be contradicted, explained or
supplemented by any course of dealing or course of performance between ECSI or
any of its Affiliates and Contractor. There are no understandings or
representations, expressed or implied, not expressly set forth in this
Agreement. This Agreement shall not be modified or amended except by a written
document signed by the Parties hereto; provided, however, that Contractor shall
be able to unilaterally supplement Section 2.1 by the delivery of Section 2.1
Updates pursuant to Section 2.2.
IN WITNESS WHEREOF the Parties have caused the Agreement to be signed by their
duly authorized representatives effective as of the date written above.
HYUNDAI SYSCOMM CORP.
By:/s/Xxxxxx Xxx
--------------------------------
Name: Xxxxxx Xxx
Title: Chairman of the Board
ELECTRONIC CONTROL SECURITY, INC.
By:/s/Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer
