EXHIBIT 10.1
POWERLINX, INC. AND UNIVERSAL GENERAL CORPORATION
BINDING PURCHASE AGREEMENT
THIS BINDING PURCHASE AGREEMENT (this "Agreement") is made as of the 14th
day of September, 2004 (the "Effective Date"), by and between POWERLINX, INC., a
corporation organized and existing under the laws of Nevada, U.S.A. with its
principal offices located at 000 Xxxxxxx Xxxx., 0xx XX-X, Xxxxxx Xxxxx, XX 00000
(the "MANUFACTURER"), and UNIVERSAL GENERAL CORPORATION, a Delaware corporation
with its principal offices located 000 X. Xxxx Xx., Xxxxxxxxxx, XX 00000 (the
"PURCHASER").
WHEREAS, POWERLINX develops, manufactures and markets, among other devices,
products and applications developed to transmit voice, video, audio and data
either individually or any and all combinations over power lines, twisted pair
wires and coax in AC and DC power environments, on any and all power grids. The
Company has also developed manufactured and marketed different kinds of
underwater video cameras, lights and accessories for the marine, commercial and
consumer retail markets. The key product for purposes of this Agreement is the
PowerLinx Digital PowerLine Security System.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties, intending to be legally bound, hereby covenant,
and agree as follows:
DEFINITIONS
Confidential Information. The term "Confidential Information" means any and all
information relating to Manufacturer, its affiliates, and their respective
businesses and Intellectual Property, including all information relating to the
formulation, manufacture, use, marketing, and sale of the Products, in whatever
form such information is provided, whether oral, written, visual,
machine-readable, electronic, or otherwise. The term "Confidential Information"
may include, but is not limited to, designs, drawings, models, photographs,
prototypes, samples, data, technical information, specifications, laboratory and
product testing information, research, product development plans, product
applications, demonstrations, know-how, ideas, inventions, discoveries,
catalogs, price lists, cost data, customer and supplier lists, business and
financial information, and all manifestations or embodiments relating to the
foregoing, and all improvements made thereto, as well as any other information
relating to the business of Manufacturer which may be divulged to PURCHASER in
the course of its performance of this Agreement.
Intellectual Property. The term "Intellectual Property" means any and all
inventions (whether or not protected under patent laws), works of authorship,
information fixed in any tangible medium of expression (whether or not protected
under copyright laws), moral rights, mask works, trademarks, trade names,
Internet domain names, trade dress, trade secrets, know-how, ideas (whether or
not protected under trade secret laws), and all other subject matter protected
under patent, copyright, moral right, mask work, trademark, trade secret, or
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other laws, including without limitation all new or useful art, combinations,
discoveries, formulae, documentation, business methods, web sites, manufacturing
techniques, technical developments, artwork, software, programming, applets,
scripts, and designs.
Products. The term "Products" means only those products specifically listed on
Exhibit A attached to this Agreement, as mutually revised from time to time by
MANUFACTURER upon notice to PURCHASER, and accessories to and spare and
replacement parts for such products. Any new or different products which
MANUFACTURER may now or hereafter manufacture or sell that are not specifically
listed on Exhibit A are expressly excluded from the scope of the Products unless
expressly authorized in writing by MANUFACTURER.
STANDARD TERMS.
Standard Terms. The term "Standard Terms" means MANUFACTURER's standard terms
and conditions of sale as revised by MANUFACTURER from time to time upon notice
to PURCHASER. A copy of the Standard Terms currently in effect is attached
hereto as Exhibit C.
TERMS AND CONDITIONS OF SALE
Purchase Commitments. PURCHASER agrees to purchase as its minimum purchase
commitment over the Initial Term of this Agreement the number of PURCHASER
Products so indicated in Section 3.2. This purchase commitment is binding. The
minimum purchase commitment for Year 1, broken out in a month-by-month format,
is indicated on Exhibit B. This purchase commitment is binding.
For each subsequent contract year PURCHASER shall issue a binding annual
purchase schedule at least three (3) months prior to the start of such contract
year.
Subject to PURCHASER'S continuing obligation to fulfill its minimum purchase
commitment for the Initial Term of the contract, PURCHASER may provide written
notice of adjustment to quantity at least three (3) full calendar months prior
to the month in which the adjustment is to be applied. The maximum downward
variance during any quarter shall be 10% of the projected quantity, it being
expressly agreed that downward adjustments must be offset by increased orders in
subsequent quarters. In the case of any requested upward adjustment in quantity,
MANUFACTURER will use all commercially reasonable efforts to accommodate
PURCHASER'S needs.
Guaranteed Binding Minimum Purchases. As a condition of this agreement,
PURCHASER must purchase the guaranteed minimum Net Unit Sales ("Guaranteed
Minimum Net Unit Purchases").
Guaranteed
Minimum Net
Date Unit Purchases Cumulative Total
-------------------- ------------------------------- ---------------------------
10-01-2004 2,500
09-30-2005
10-01-2005 3,500 6,000
09-30-2006
10-01-2006 4,000 10,000
09-30-2007
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A "Unit" shall be defined as a "BASE SYSTEM" of any of the three (3) quality
levels PowerLinx Digital Security System as detailed in Exhibit A.
Cancellation of Orders. The PURCHASER may cancel purchase orders, reduce
quantities, revise specifications or extend schedules only by mutual agreement
with MANUFACTURER and in such event the PURCHASER agrees to pay MANUFACTURER
reasonable and proper cancellation charges which shall take into account
expenses already incurred and commitments made by MANUFACTURER as well as other
losses incurred by MANUFACTURER by reason thereof.
Prices. The prices of the "PURCHASER Products" are defined in Exhibit A. These
prices shall be valid excepted if any drastic development should happen on the
market, both Parties in such case agreeing to re-negotiate the prices. The
prices charged for PURCHASER Products may be increased by MANUFACTURER as a
result of increased parts or materials costs, such price increases to be
effective upon notice to PURCHASER.
Payments. MANUFACTURER will submit its invoices to PURCHASER upon shipment.
PURCHASER shall make all payments to MANUFACTURER no later than thirty (30) days
after the date of invoice. Notwithstanding the preceding sentence, if, at any
time during the term of this Agreement, PURCHASER fails to make payments in
accordance with the terms of this Article, or if for any reason MANUFACTURER
deems itself to be insecure as to payment, MANUFACTURER may require that
PURCHASER make full or partial payment for Products in advance, accept bills of
exchange, open for MANUFACTURER's benefit documentary letters of credit, obtain
for MANUFACTURER's benefit bank guarantees, or provide other satisfactory
security or guarantees that invoices will be promptly paid when due.
MANUFACTURER may, at its option, collect a finance charge on amounts past due
beginning on the eleventh (11th) day from the date of invoice. The finance
charge will be the lesser of one and one-half percent (1.5%) per month or the
maximum rate permitted by law. All payments shall be made in U.S. Dollars.
MANUFACTURER MAY, WITHOUT BREACH, SUSPEND THE SUPPLY OF PRODUCTS IN THE EVENT
TIMELY PAYMENT IS MORE THAN FIVE (5) DAYS PAST DUE. Delivery. MANUFACTURER will
be responsible for packing, labeling, and preparing the goods for shipment.
PURCHASER will select the carrier upon placement of each purchase order.
PURCHASER pays all transportation costs. Risk of loss due to damage or
destruction shall be borne by PURCHASER when the carrier takes charge of the
goods at MANUFACTURER's or its authorized contractor's loading dock.
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Warranty. All sales to the PURCHASER shall be subject to MANUFACTURER's standard
warranty as contained in the Standard Terms in effect at the time of shipment
(the "Standard Warranty").
TERM AND TERMINATION
Term. This Agreement will commence on the Effective Date and shall automatically
expire on the three (3) year anniversary of the Effective Date unless earlier
terminated as provided herein, or unless mutually extended by the parties in
writing. This Agreement may be terminated by mutual written agreement of the
parties.
4.2 Termination. Each Party will be entitled to terminate this Agreement in
case the other Party fails to comply with its contractual obligations and such
non compliance is not remedied within 30 days from a notice sent by registered
letter with acknowledgement of receipt.
4.3 Effect of Termination. Upon the expiration or termination of this
Agreement:
A. PURCHASER shall cease to be an authorized distributor of MANUFACTURER;
B. PURCHASER shall return all of MANUFACTURER's confidential information,
instruction sheets, advertising and promotional materials and all of
MANUFACTURER's supplies of every kind and character, and all other documents
relating to the business of MANUFACTURER which may be in the possession or under
the control of PURCHASER;
C. All amounts owing by PURCHASER to MANUFACTURER shall, notwithstanding prior
terms of sale, become immediately due and payable;
D. PURCHASER will remove and not thereafter use any signs, brochures, catalogs,
advertisements, or other materials that contain any Trademark of MANUFACTURER
and will immediately destroy all printed matter in its possession or under its
control containing any of MANUFACTURER's Trademarks.
MANUFACTURER: PURCHASER:
POWERLINX, INC. Universal General Corporation.
Signed: Signed:
--------------------------- --------------------------------
Xxxxxx X. Xxxxxxxxxx III Xxxxx Xxxxxxxxx Xxxxxxx
Chairman & CEO Chairman & CEO
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EXHIBIT A
PRODUCTS
------------------ ----------------------------- -------------------------------- ----------------------------------
Specification A Quality Power Linx B Quality Canon C Quality Sony
------------------ ----------------------------- -------------------------------- ----------------------------------
Video Standard: Motion-JPEG YUV Digital NTSC NTSC / MJPEG
Total Number of 326,000 410,000 (380,000 effective 380,000 Exwave HAD technology
Pixels: pixels)
Resolution: 640 x 480 pixels max. 460 TV L 470 TV L
Minimum Illumination: 2.5 lux 6 lux (2 lux at gain-up Color mode 0.7 lux; B/W mode
mode) 0.01 lux
S/N Ratio: NA 48 dB Greater than 50 dB
Horiz, Field of View: 54 degrees with standard CE 3 to 47.5 degrees 2.8 to 48 degrees
lens; (65 degrees with Wide angle (4.7 to 73 degrees with wide
Other lenses available lens adapter) angle lens adapter)
White Balance: Auto Auto Auto
Exposure: Auto EE Auto/Manual selectable Auto/Manual selectable, Day /
Night function
Focus: Fixed, 0.1 meter to infinity Auto/Manual selectable Auto/One Push/Manual selectable
Focus Length: 6.0mm std. 4 to 64mm, F1.4 to 2.8 [PTZ 4.1 to 73.8mm, F1.4 to F3.0
models only]
Zoom: Optional - other lenses 16x [PTZ models only] 18x AF optical / 12x digital
available
Pan Angle: Optional with external +/- 100 degrees (+/- 170(0) Optional with external mechanism
mechanism VC-C4R)
[PTZ models only]
Pan Speed: Optional with external 1 to 90 degrees/sec (+10(0), Optional with external mechanism
mechanism -90(0) VC-CR)
[PTZ models only]
Tilt Angle: Optional with external +90/-30 degrees [PTZ Optional with external mechanism
mechanism models only]
Tilt Speed: Optional with external 1 to 70 degrees/sec [PTZ Optional with external mechanism
mechanism models only]
Menu mode: Remote configuration Camera setting, Display Xxx XXX, XX-000, or Ethernet
via software/firmware setting, etc.
Via superimposed OSD
Preset Position: n/a 9 Positions [PTZ models Optional with external mechanism
only]
Controllable # by one TCP/IP control xxx XXX, XXX, 0 Units [PTZ models only] n/a
IR: or VPN
Cascade control: None 9 Units [PTZ models only] n/a
Control: Remote via software, uses RS232 Serial, RTS/CTS has Manual, RS-232C, VISCA, Ethernet
Internet browser; to be active
(2) 12v triggers avail. for (up to 19.2 kbps)
external devices
Power: 12vdc from included AC adapter 13V, 12W 12vdc, 24vac, XxX 9w
Size (W x D x H): 4 x 4.48 x 3.58 (inches) 80 x 184 x 77 (mm)
Weight: 0.5 lbs 0.83 lbs. (375 grams) 800 grams
Operating Temperature: 0 to 50 degrees C 0 to 50 degrees C
------------------ ----------------------------- -------------------------------- ----------------------------------
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Safe Room
(Base System)
Materials
------------- ------------- -----------------------------------------------
Item # Units/Qty. Description
------------- ------------- -----------------------------------------------
1 2 Dome Housing
------------- ------------- -----------------------------------------------
2 2 Indoor PTZ color cameras
------------- ------------- -----------------------------------------------
3 2 1 Port NTSC/PAL Encoder Server (On 2)
------------- ------------- -----------------------------------------------
4 2 Mounting Brackets
------------- ------------- -----------------------------------------------
5 3 1 Port Power Line Transceiver 110 V
------------- ------------- -----------------------------------------------
6 2 Battery Backup
------------- ------------- -----------------------------------------------
7 1 Viewing Software
------------- ------------- -----------------------------------------------
Additional Fixed Cameras
------------- ------------- -----------------------------------------------
1 1 Dome Housing
------------- ------------- -----------------------------------------------
2 1 Color cameras
------------- ------------- -----------------------------------------------
3 1 1 Port NTSC/PAL Encoder Server (On 2)
------------- ------------- -----------------------------------------------
4 1 Mounting Brackets
------------- ------------- -----------------------------------------------
5 1 1 Port Power Line Transceiver 110 V
------------- ------------- -----------------------------------------------
6 1 Battery Backup
------------- ------------- -----------------------------------------------
Additional PTZ Fixed Cameras
------------- ------------- -----------------------------------------------
1 1 Dome Housing
------------- ------------- -----------------------------------------------
2 1 PTZ color cameras
------------- ------------- -----------------------------------------------
3 1 1 Port NTSC/PAL Encoder Server (On 2)
------------- ------------- -----------------------------------------------
4 1 Mounting Brackets
------------- ------------- -----------------------------------------------
5 1 1 Port Power Line Transceiver 110 V
------------- ------------- -----------------------------------------------
6 1 Battery Backup
------------- ------------- -----------------------------------------------
Pricing includes:
o 1 year warranty
o 2 software upgrades
o 24/7/365 technical support
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EXHIBIT B
Purchase Commitments
Commitments for Net Unit Purchases
as outlined in Section 8.2.
October 2004 to November 2005
--------------------------------------
# of
Month Units
--------------------------------------
October 5
November 5
December 10
January 20
February 50
March 100
April 200
May 400
June 400
July 400
August 400
September 400
--------------------------------------
Total 2,500
--------------------------------------
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EXHIBIT C
STANDARD TERMS
TERMS AND CONDITIONS OF SALE
1. Offer, Governing Provisions and Cancellation. This writing constitutes
an offer or counter-offer by POWERLINX VIDEO TECHNOLOGY, INC. (the
"MANUFACTURER") to sell the products and/or services described herein or in a
purchase order, in accordance with these terms and conditions, is not an
acceptance of any offer made by PURCHASER, and is expressly conditioned upon
PURCHASER's assent to these terms and conditions and final acceptance of
PURCHASER's purchase order by MANUFACTURER at MANUFACTURER's headquarters.
No order may be cancelled or altered by PURCHASER except upon terms and
conditions acceptable to MANUFACTURER, as evidenced by MANUFACTURER's written
consent. In the event of such an approved cancellation by PURCHASER,
MANUFACTURER shall be entitled to payment of the full price, less the amount of
any expenses saved by MANUFACTURER by reason of the cancellation.
2. Prices and Payment. All prices are subject to change upon notice; and
the price of products on order but unshipped will be adjusted to the price in
effect at the time of shipment upon (30) day notice. PURCHASER shall make all
payments to MANUFACTURER no later than thirty (30) days after the date of
invoice. Notwithstanding the preceding sentence, if, at any time during the term
of this Agreement, PURCHASER fails to make payments in accordance with the terms
of this Article, or if for any reason MANUFACTURER deems itself to be insecure
as to payment, MANUFACTURER may require that PURCHASER make full or partial
payment for Products in advance, accept bills of exchange, open for
MANUFACTURER's benefit documentary letters of credit, obtain for MANUFACTURER's
benefit bank guarantees, or provide other satisfactory security or guarantees
that invoices will be promptly paid when due. MANUFACTURER may, at its option,
collect a finance charge on amounts past due beginning on the eleventh (11th)
day from the date of invoice. The finance charge will be the lesser of one and
one-half percent (1.5%) per month or the maximum rate permitted by law. All
payments shall be made in U.S. Dollars.
3. Delivery; Claims. Delivery of products to a carrier at MANUFACTURER's
plant or other loading point shall constitute delivery to PURCHASER; and
regardless of shipping terms or freight payment, PURCHASER shall bear all risk
of loss or damage in transit. MANUFACTURER reserves the right to make delivery
in installments, unless otherwise expressly stipulated herein; all such
installments to be separately invoiced and paid for when due per invoice,
without regard to subsequent deliveries. Delay in delivery of any installment
shall not relieve PURCHASER of its obligations to accept remaining deliveries.
Claims for shortages or other errors in delivery must be made in writing to
MANUFACTURER within ten (10) days after receipt of shipment, and failure to give
such notice shall constitute unqualified acceptance and a waiver of all such
claims by PURCHASER. Claims for loss or damage to goods in transit should be
made to the carrier and not to MANUFACTURER.
4. Force Majeure. All delivery dates are approximate. MANUFACTURER shall
not be liable for any damage as a result of any delay or failure to deliver due
to any cause beyond MANUFACTURER's reasonable control, including, without
limitation, any act of God, act of PURCHASER, embargo or other governmental act,
regulation or request, fire, accident, strike, slowdown, war, riot, delay in
transportation, or inability to obtain necessary labor, materials or
manufacturing facilities. In the event of any such delay the date of delivery
shall be extended for a period equal to the time lost because of the delay. If
such force majeure occurrence continues for sixty (60) or more days, PURCHASER's
exclusive remedy shall be to cancel any orders to the extent such orders have
not been previously fulfilled.
5. Storage. If the products are not shipped within fifteen (15) days after
notification to PURCHASER that they are ready for shipping, for any reason
beyond MANUFACTURER's reasonable control, including PURCHASER's failure to give
shipping instructions, MANUFACTURER may store such products at PURCHASER's risk
in a warehouse or yard or upon MANUFACTURER's premises, and PURCHASER shall pay
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all handling, transportation and storage costs at the prevailing commercial
rates upon submission of invoices therefore.
6. Changes. MANUFACTURER may at any time make such changes in design and
construction of products as shall constitute an improvement in the judgment of
MANUFACTURER. MANUFACTURER may furnish suitable substitutes for materials
unobtainable because of priorities or regulations established by governmental
authority or non-availability of materials from suppliers. MANUFACTURER may
discontinue or materially modify any of its standard products by giving
PURCHASER prior notice and will not be liable to PURCHASER for any damages
resulting from such discontinuation or modification.
7. Standard Warranty. MANUFACTURER warrants products manufactured by it and
supplied hereunder to be free from material defects in materials and workmanship
for a period of twelve (12) months from date of shipment. If within such period
any such product shall be proved to MANUFACTURER's satisfaction to be defective,
such product shall be repaired or replaced at MANUFACTURER's option. Such repair
or replacement shall be MANUFACTURER's sole obligation and PURCHASER's exclusive
remedy hereunder and shall be conditioned upon MANUFACTURER's receiving written
notice of any alleged defect within ten (10) days after its discovery and, at
MANUFACTURER's option, return of such products to MANUFACTURER F.O.B. its
factory or other designated location. THIS WARRANTY IS EXCLUSIVE AND IN LIEU OF
ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED; AND MANUFACTURER
EXPRESSLY DISCLAIMS AND EXCLUDES ALL OTHER REPRESENTATIONS AND WARRANTIES,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
Any description of the products, whether in writing or made orally by
MANUFACTURER or MANUFACTURER's agents, specifications, samples, models,
bulletins, drawings, diagrams, engineering sheets or similar materials used in
connection with PURCHASER's order are for the sole purpose of identifying the
products and shall not be construed as an express warranty. Any suggestions by
MANUFACTURER or MANUFACTURER's agents regarding use, application, or suitability
of the products shall not be construed as an express warranty unless confirmed
to be such in writing by MANUFACTURER.
THE WARRANTY OF THIS SECTION DOES NOT APPLY:
(A) WHERE THE PRODUCT HAS BEEN USED IN A MANNER NOT AUTHORIZED BY MANUFACTURER
OR IN A WAY IN, WHICH IT WAS NOT DESIGNED, OR INTENDED TO BE USED;
(B) WHERE THE PRODUCT HAS UNDERGONE MODIFICATION OTHER THAN BY MANUFACTURER;
(C) to DAMAGE OR MALFUNCTION CAUSED BY negligence, abuse, or misapplication of
the Product;
(D) to DAMAGE OR MALFUNCTION CAUSED BY THE ACTS (including, BUT NOT LIMITED TO,
Product installation, repair, relocation, or modification) OF ANY PARTY OTher
than MANUFACTURER;
(E) where THE ALLEGED DEFECT CANNOT BE DEMONSTRATED TO THE REASONABLE
SATISFACTION OF MANUFACTURER;
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(F) to PROBLEMS ATTRIBUTABLE TO THE USE of, or compatibility problems with,
products or systems not provided by MANUFACTURER;
(G) to spare, replacement, or refurbished parts or to parts manufactured by a
third party.
8. Returns. Products may be returned to MANUFACTURER only when PURCHASER
obtains MANUFACTURER's advance written permission. Returned products must be
securely packaged to reach MANUFACTURER without damage; and any cost
MANUFACTURER incurs to put products in marketable condition will be charged to
PURCHASER.
9. Consequential Damages and Other Liability; Indemnity. Except as
otherwise agreed in writing, MANUFACTURER's liability with respect to the
products and/or services sold hereunder shall be limited to the warranty
provided in Section 9 hereof, and, with respect to other performance of this
contract, shall be limited to the contract price. MANUFACTURER SHALL NOT BE
SUBJECT TO ANY OTHER OBLIGATIONS OR LIABILITIES, WHETHER ARISING OUT OF BREACH
OF CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHER
THEORIES OF LAW, WITH RESPECT TO PRODUCTS SOLD OR SERVICES RENDERED BY
MANUFACTURER, OR ANY UNDERTAKINGS, ACTS OR OMISSIONS RELATING THERETO. Without
limiting the generality of the foregoing, MANUFACTURER specifically disclaims
any liability for property or personal injury damages, penalties, special or
punitive damages, damages for lost profits or revenues, loss of use of products
or any associated equipment or software, cost of capital, cost of substitute
products, facilities or services, down-time, shut-down or slow-down costs, or
for any other types of economic loss, or for claims of PURCHASER's customers or
any third party for any such damages. MANUFACTURER SHALL NOT BE LIABLE FOR AND
DISCLAIMS ALL CONSEQUENTIAL, INCIDENTAL, AND CONTINGENT DAMAGES WHATSOEVER.
PURCHASER shall indemnify MANUFACTURER against any and all losses, liabilities,
damages and expenses (including, without limitation, attorneys' fees and other
costs of defending any action) which MANUFACTURER may incur as a result of any
claim by PURCHASER or others arising out of or in connection with the products
and/or services sold hereunder and based on product or service defects not
proven to have been caused solely by MANUFACTURER's negligence.
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