TELEMATICS AGREEMENT
This Telematics Agreement (the "Agreement"), effective as of the date
executed by both parties hereto (the "Effective Date"), is entered into by
RemoteMDx, Inc., a Utah corporation ("RemoteMDx"), SecureAlert, Inc., a Utah
corporation and wholly owned subsidiary of RemoteMDx ("SecureAlert"), (RemoteMDx
and SecureAlert are sometimes referred to collectively herein as "RMDx"), and
SecureAlert Telematics, Inc., a Tennessee corporation ("SAT").
RECITALS:
RMDx previously expended time and expenses in connection with pursuing
the sale of certain products and services as specified in Exhibit A, attached
hereto and incorporated herein by reference ("Products"), to certain customers
in the telematics industry, including those specified in Exhibit A
("Customers"). In connection with the resolution of certain matters, RMDx has
agreed to allow SAT to sell the Products to the Customers upon the terms and
conditions contained herein.
AGREEMENTS:
In consideration of the mutual covenants and agreements contained
herein, the sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Restrictions. Without RMDx's prior written consent SAT will
not sell any products in the PERS or home medical monitoring
and personal remote medical monitoring markets.
2. Intellectual Property. The parties acknowledge that Xxx Xxxxxx
("Xxxxxx"), from time to time doing business as a sole
proprietor under the name "The Xxxxxx Group") has developed a
concept and product known as "TravelPal." RMDx has filed
"TravelPal Patent Vehicle-Mounted Wireless Phone, U.S. Patent
Application No. 10/202,769 (the "TravelPal Application"). RMDx
hereby assigns such application to SAT and agrees to assist
SAT in amending such patent application to add Xxxxxx as an
inventor thereof, and represents to SAT that RMDx had no
deceptive intent when it omitted Xxxxxx as an inventor on the
original patent application. . This paragraph shall survive
the termination of this Agreement.
3. Monitoring Revenues. SAT agrees to pay to RMDx ten percent
(10%) of SAT's Net Revenues. For purposes of this Agreement,
"Net Revenues" means the amount SAT receives from a Customer
or an end user who purchased Product from a Customer, reduced
by any amount SAT must pay to any Customer with respect to
Mobile Security Services. Notwithstanding the foregoing, with
respect to each end user, regardless of whether SAT is paid by
such end user or a Customer, Net Revenues shall not include
any revenues originating from such end user after the
expiration of seven (7) years from the date such end user
initially activated its Mobile Security Services. For purposes
of this Agreement "Mobile Security Services" means the
provision by SAT or its affiliates to customers of Customers
of access to a live call center specialist for the purposes of
locating the customer and connecting the customer with
appropriate police, fire, ambulance or roadside assistance in
the event of an emergency or related assistance services.
Mobile Security Services shall not include any other services
sold or provided by SAT. SAT shall pay to RMDx the ten percent
(10%) not later than the 30th day of each month for the Net
Revenues received in the immediately preceding calendar month,
beginning with the first month in which SAT receives Net
Revenues.
4. MEW Agreement. RMDx agrees that upon execution of this
Agreement, Matsushita Electric Works, Ltd. ("MEW") will
thereafter be allowed, without further action, to sell
telematics products, including Products, to SAT and/or
Customers, and further agrees, to the extent necessary, that
it will amend its agreement with MEW to comply with the
provisions of this paragraph 4. Furthermore, SAT agrees to
utilize the TravelPAL products that have been produced by MEW
for RMDx up to the date of this agreement to satisfy the
demand in new sales channels before new orders are placed with
MEW.
5. Call Center. During the first six (6) months of this
Agreement, SAT will have the right to utilize the call center
equipment and software located in the Aradiant call center
located in San Diego, CA without charge. Provided however,
that SAT must enter into a separate agreement with Aradiant to
ensure that RMDx will not be billed for services or space
utilized by SAT.
6. Intentions to Share Fixed Costs. SAT and RMDx share the fixed
monitoring center employee costs equally in the Aradiant call
center. The parties agree to cooperate in a revision to the
existing agreement governing the use and cost of the call
center. In addition, the parties agree to cooperate in
renegotiating the agreement for the provision of conforming
and non-conforming mobile identification numbers ("MIN's").
SAT and RMDx intend to equally share the minimum monthly fixed
retainer cost balance of MIN's under the existing agreement or
any modification thereof after each parties' MIN's are
deducted.
7. Payments to Xxx Xxxxxx; Investment. RMDx has entered into an
agreement dated December 31, 2002 with Xxxxxx for the
resolution of certain obligations and arrangements between
them, in which RMDx agreed to make certain payments to Xxxxxx.
RMDx also entered into an agreement with SecureAlert
Entertainment, LLC ("SAE"), as amended, in which SAE agreed to
make a portion of the payments required to be made by RMDx to
Xxxxxx. SAT hereby agrees to assume liability for the payments
to Xxxxxx as hereinafter set forth; provided, however, that
SAT shall not be obligated to make any payments to Xxxxxx
unless and until SAT successfully raises new debt or equity
financing of a minimum of $1,300,000. In such event, SAT will
(i) repay SAE amounts paid by SAE to Xxxxxx, and (ii) pay to
RMDx the amount RMDx would have received from SAE but for the
offset provisions between RMDx and SAE with respect to
payments by SAE to Xxxxxx. In the event SAT makes such
payments to SAE and/or RMDx, SAT is hereby authorized to
offset such payments against any payments due from SAT to RMDx
pursuant to paragraph 3 hereof.
8. Term and Termination.
a. Term. This Agreement begins upon the Effective Date and shall
continue for a period of three (3) years, subject, however, to
the continuing payment obligations that extend beyond such
date as provided elsewhere herein.
b. Other Termination for Cause. Either party may terminate this
Agreement if the other party breaches any other material
covenant or undertaking contained herein, and the breach is
not cured within the 30 days following written notice thereof
from the other party, provided however, that to the extent
another provision sets or otherwise limits the right to cure,
such provision shall control any cure rights.
c. Other. This Agreement shall terminate automatically and
without further notice to the other party in the event that
either party shall make any unauthorized assignment for the
benefit of creditors, file any petition under the bankruptcy
or insolvency laws of any jurisdiction, have or suffer a
receiver or trustee to be appointed for its business or
property, or be adjudicated a bankrupt or an insolvent.
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9. Warranties; Indemnification; Limitations of Warranties and
Damages.
a. Representations, Warranties and Covenants of SAT. SAT
represents, warrants and covenants that it has the right to
enter into this Agreement and perform in accordance with the
terms of this Agreement, and such actions do not violate any
third party agreement or other obligation by which SAT is
bound.
b. Representations, Warranties and Covenants of RMDx. RMDx
represents, warrants and covenants that it has the right to
enter into this Agreement and perform in accordance with the
terms of this Agreement, and such actions do not violate any
third party agreement or other obligation by which RMDx is
bound
10. Indemnification. Each party agrees to indemnify, defend and
hold the other party harmless from and against any and all
claims, liabilities, judgments, costs, damages and expenses
(including reasonable attorneys' fees) arising out of any
breach of such party's warranties, covenants and
representations in this Agreement, and any act by such party
in violation of this Agreement. With respect to any claims
falling within the scope of this indemnification obligation,
(i) each party agrees to promptly notify the other of any
claim or lawsuit for which it believes it is entitled to be
indemnified; (b) the indemnifying party shall assume, at its
sole expense, the defense of such claim or lawsuit; and (c)
the party being indemnified shall have the right to
participate in the defense of any such claim or lawsuit with
separate counsel, at its sole expense.
11. Limitation of Warranties and Damages. EXCEPT AS OTHERWISE
SPECIFICALLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES
ANY OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER
EXPRESS OR IMPLIED, WITH RESPECT TO ITS LICENSED PRODUCTS,
COMPONENTS OR OTHER MATERIALS, INCLUDING WITHOUT LIMITATION
THE IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT
AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL RMDX
OR SAT BE LIABLE FOR, AND EACH PARTY COVENANTS NOT TO BRING
ANY CLAIM FOR, SPECIAL, CONSEQUENTIAL OR INDIRECT DAMAGES
(INCLUDING EXEMPLARY OR PUNITIVE DAMAGES), WHETHER OR NOT SUCH
DAMAGES WERE FORESEEABLE.
12. Miscellaneous.
a. Entire Agreement; Amendment; Waiver. The complete and
exclusive statement of the agreement between the parties
relating to this subject shall consist of this Agreement.
For example, any written, typed or preprinted terms
contained on a purchase order shall be superseded by the
terms of this Agreement, unless both parties specifically
agree in writing to the different terms. The waiver by
either party of any default or breach of this Agreement, or
any obligation hereunder, shall be ineffective unless in
writing. No failure to exercise any right or power under
this Agreement or to insist on strict compliance by the
other party shall constitute a waiver of the right
subsequently to exercise such right or power or to insist on
strict compliance. This Agreement may not be amended except
by a written document signed by an authorized representative
of both parties.
b. Legal Proceedings. This Agreement shall be governed by and
construed in accordance with the laws of the state of Utah
(without regard to conflicts of laws provisions).
c. Mediation and Arbitration. In the event of any dispute under
this Agreement, the parties hereto desire to avoid
litigation. Accordingly, the aggrieved party will give
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notice of the dispute to the other party and both parties
will attempt to settle the dispute during the thirty-day
period following such notice. If such dispute remains
unsettled, the parties agree to then submit such dispute to
mediation. If the parties cannot agree on a mediator, each
will select a mediator and the two chosen mediators will
select a third mediator who shall alone hear the dispute.
Such mediation will, if possible, be conducted during the
sixty-day period following expiration of the thirty-day
period. If such mediation fails to resolve the dispute, the
parties agree such dispute will be submitted to final and
binding arbitration in accordance with the rules of the
American Arbitration Association. Unless otherwise directed
by the arbitrator, such arbitration must be concluded within
one hundred ninety (190) days of the expiration of the
sixty-day period previously specified for mediation. If the
parties cannot agree on a single arbitrator, each will
select an arbitrator, and the two chosen arbitrators will
select a third arbitrator who shall alone decide the
dispute. Any mediation or arbitration conducted hereunder
will be conducted in Dallas, Texas. The costs of mediation
(including the mediator's fees and expenses and costs
directly related to the conduct of the mediation, but
excluding each party's direct costs for transportation,
attorneys, etc., for which each will be responsible) will be
shared equally by the parties.
d. Attorney Fees and Other Arbitration Expenses. If a party
hereto resorts to arbitration to remedy a breach of this
Agreement, the prevailing party in the arbitration, in
addition to any other remedies available under this
Agreement or by law, may collect all or a portion of its
reasonable attorney fees and other costs and expenses of
arbitration at the discretion of the arbitrator, who shall
consider both the reasonableness of the attorney fees and
other costs and the relative merits of each party's
position. It is the intent of the parties hereto to avoid
arbitration without preventing a party from seeking redress
for a valid dispute. To that end, the parties express their
intent and agreement that unreasonable attorney fees and
costs not be awarded, and that all or a portion of
reasonable attorney fees and costs be awarded when in the
arbitrator's opinion the party against whom such fees and
costs are awarded has maintained positions which have
significantly less merit compared to the prevailing party's
positions. Further, it is all parties' intent that any party
seeking redress through litigation despite the fact that
arbitration is required by this Agreement shall not be
entitled to recover any attorney fees or costs for such
litigation or in any subsequent arbitration, regardless of
the outcome of such litigation or subsequent arbitration.
e. Force Majeure. Neither party shall be liable for any failure
or delay in performing hereunder, if such failure or delay is
due to war, strike, government requirements, acts of nature,
acts or omissions of carriers, or other cause(s) beyond its
reasonable control; provided, however, that if a party's
performance of any material obligation is reasonably expected
to be delayed more than six (6) months due to any such cause,
the other party may terminate this Agreement upon thirty (30)
days' prior written notice.
f. Severability. If any provision of this Agreement is held to
be invalid, illegal or unenforceable by a court, authority
or arbitrator of competent jurisdiction, such provision
shall be modified by such court, authority or arbitrator to
the minimum extent necessary to make it valid, legal and
enforceable. If the provision cannot be so modified, it
shall be severed and all other provisions of this Agreement
shall remain in full force and effect. If a provision is
held illegal, invalid or unenforceable, the parties also
agree to negotiate reasonably and in good faith to modify
this Agreement with a new provision that approximates the
intent and purpose of the original provision as closely as
possible, without being illegal or unenforceable.
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g. Notice. All notices between the parties shall be in writing
and shall be sent by certified or registered mail or
commercial delivery service, with provisions for a receipt as
follows (or to such other address as a party may furnish to
the other in writing):
If To RMDx:
RemoteMDx and SecureAlert
Attn: Xxxxxxx X. Xxxxx, Chief Financial Officer
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
With a copy to:
Durham Xxxxx & Xxxxxxx, PC
Attn: Xxxxx Xxxxxxx
000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
If To SAT:
SecureAlert Telematics, Inc.
Attn: Xxxxx Xxxxxx, President
00000 Xxxxxxx Xxxx Xxx
Xxxxxxxxx, XX 00000
With a copy to:
Egerton, XxXxxx, Xxxxxxxxx & Xxxxx, P.C.
Attn: Xxxxxxx X. XxXxxxxxxx
1400 Riverview Tower
000 Xxxxx Xxx Xx.
Xxxxxxxxx, XX 00000
h. Assignment; Binding Effect. Other than SAT's right to license
or assign its rights under the TravelPal Application, neither
party hereto may sublicense or assign its rights or delegate
its duties or obligations under this Agreement without prior
written consent of the other party. This Agreement is binding
upon and inures to the benefit of the parties and their
respective successors, representatives and permitted assigns.
i. No Agency, Franchise, Partnership or Other Relationship. This
Agreement shall not be construed to create an agency,
employer/employee relationship, franchisor/franchisee
relationship, joint venture relationship or partnership
between the parties. Neither party has the authority to bind
the other, to incur any liability or otherwise act on behalf
of the other, or to direct the employees of the other. The
parties expressly agree that no franchise or partnership laws
are intended to or shall apply to this Agreement or to the
relationship of the parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date specified above.
RemoteMDx, Inc. SECUREALERT TELEMATICS, Inc.
By:/s/ Xxxxx Xxxxxxx By:Xxxxx Xxxxxx
Title: Title:CEO
Date:January 22, 2003 Date:January 23, 2003
SecureAlert, Inc.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------------------
Title:
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Date: January 22, 2003
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EXHIBIT A
Products
MobilePAL
Customers
ADT
AGI
Delcon
PEP Boys
Addendum to Telematic Agreement
This 1st Amendment to the Telematics Agreement effective as of the date executed
by both parties hereto (the "Effective Date") is entered into by between
SecureAlert Inc. ("SAI") and SecureAlert Telematics Inc. (SATI").
RECITALS:
SAI and SATI previously agreed in section 6 in the Telematics Agreement to
cooperate in renegotiating the agreement for the provision of conforming and
non-conforming mobile identification numbers ("MIN's") (the "MIN Agreement").
The MIN Agreement has been assigned to AllTel by Cellular XL Associates ("CXL")
in agreement with SAI. In connection with that provision and that assignment,
both parties agree to the terms and conditions below.
AGREEMENTS:
In consideration of the mutual covenants and agreements contained herein, the
sufficiency of which is hereby acknowledged, the parties agree as follows:
SAI agrees to assign the MIN Agreement to SATI with the following provisions:
1) SATI and SAI agree to share the minimum fixed MIN fees from Alltel on a
50/50 basis. The calculation for shared expenses each month will be: Fixed
Cost, less both parties' actual MIN and minute costs, divided by two. For
example, if the fixed expense required by AllTel was $15,000 and the April
2003 xxxx for actual MIN and minute use was $2,000 for SAI and $1,000 for
SATI, then the shared expense amount due for each party would be $15,000
-$3,000 = $12,000 / 2 = $6,000. Each party would also owe its own
individual actual MIN and minute use. In the above example, SAI would pay
$8,000 and SATI would pay $7,000. If actual MIN and minute use is greater
than the minimum required by the contract, then each party is responsible
for paying its own MIN and minute usage.
2) Both SATI and SAI acknowledge that there is an outstanding $30,000 xxxx for
services provided by CXL for the months of January and February 2003. It
has been represented by SATI to SAI that SATI has negotiated this xxxx down
to $20,000. Both parties agree that they will each overnight to CXL a check
in the amount of $10,000. If the $10,000 check from SATI to CXL is not
overnighted or if the representation by SATI that the $30,000 amount due
CXL in fact has not been reduced to $20,000, then this addendum is void.
3) Both SATI and SAI acknowledge that for services performed in March 2003 by
Cellular One Associates a xxxx for a $15,000 will be due. SATI and SAI
agree that each party will pay their respective share as required in
section 1 above.
4) This agreement shall terminate automatically and without further notice to
the other party in the event that SATI shall make any unauthorized
assignment for the benefit of creditors, file any petition under the
bankruptcy or insolvency laws of any jurisdiction, have or suffer a
receiver or trustee to be appointed for its business or property, or be
adjudicated a bankrupt or an insolvent.
5) SATI agrees to re-sell MINs to SAI on a cost basis. The parties agree to
request to receive their respective MINs directly from AllTel. SAI agrees
to pay SATI the amount due as a result of any and all costs associated with
the MIN Agreement including fixed costs, minutes, and monthly MIN costs
within the payment terms required by AllTel. SAI will have five days from
the date such payments are due to cure any payment deficits or SATI will
have the right to cease the supply of MIN's under section 2 above, and will
have the right to cancel all existing MIN's registered to SAI. The invoice
from SATI to SAI will serve as the sole notice of payments due to SATI and
no additional notice is required. The invoice from SATI to SAI will also
include a copy of the invoice from AllTel, total MINs and usage for the
month and a reconciliation of the amount owed to SATI from SAI. Should SATI
fail to make the required payments to AllTell, SAI can make the required
payments to AllTel and SATI will have five days from the date such payments
are due to cure any payment deficits, or the assignment from SAI to SATI
shall be void and SAI will have the right to cease the supply of MINs and
also have the right to cancel all existing MINs registered to SATI.
6) SATI will make best efforts to work with AllTel to separate the MIN
Agreement so that each SATI and SAI will have a MIN Agreement with AllTel.
As long as there is only the primary contract with AllTel, SATI will copy
Xxxxxxx X. Xxxxx each month by fax on the day the payment is made to
AllTel.. The fax will include a copy of the invoice and a copy of the
check. Any legal communication from AllTel to SATI regarding the MIN
contract must be copied to Xxxxxxx X. Xxxxx within two working days of
receipt. In the event SATI is found to be in breach of the MIN Agreement
with Alltel and does not cure such breach, SATI must assign the MIN
Contract back to SAI.
TERM
Term. This Agreement begins upon the Effective Date and shall continue until
October 26, 2004, subject, however, to the continuing payment obligations to
Alltel for MIN's being used by both parties that extend beyond the term of the
MIN Agreement and subject to SATI's ability to extend terms on the MIN
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed the Agreement as of the
date specified below.
SecureAlert Inc. SecureAlert Telematics Inc.
By:/s/ Xxxxxxx X. Xxxxx By: Xxxxx Xxxxxx
Title: Chief Financial Officer Title:President
Date: March 28, 2003 Date: March 28, 2003
