Exhibit 10(f)
AGREEMENT
Agreement made as of the 22nd day of November, 1996, by and between
Xxxxx Electronics, Incorporated, a Florida corporation, maintaining its
principal business offices at 0000 Xxxxxxxxxx Xxxx, Xxxxxxxx, XX 00000
(Hereinafter referred to as "Manufacturer") and Response USA, Inc., a Delaware
corporation, maintaining its principal business offices at 00-X Xxxxxxxx Xxxx,
Xxxxxxxxxxxxx, XX 00000 (Hereinafter referred to, together with its affiliates,
as "Distributor").
WITNESSETH:
WHEREAS, Manufacturer manufactures Wander Watch SPS-100 and the MPS-
C50 multi-resident system and desires to market said products.
WHEREAS, the distributor has proven to Manufacturer that it is
capable of providing the marketing efforts desired by Manufacturer.
WHEREAS, the Manufacturer has proven it can design and produce the
quality and quantity of products required by the Distributor.
NOW, THEREFORE, by reason of these premises and in consideration of
the mutual covenants herein set forth, the parties hereto agree as follows.
1. Definitions.
For the purpose of this Agreement, the following items shall be
defined as indicated below:
1.1 "SPS-100 Product" shall mean Manufacturer's item designated as
"Wander Watch SPS-100" and any additions, revisions and/or
modifications thereto.
1.2 "MPS-C50 Product" shall mean Manufacturer's item designated as
"Wander Watch MPS-C50 multi-resident system" and any
additions, revisions and/or modifications thereto.
1.3 "Products" shall mean the SPS-100 Product and the MPS-C50
Product.
1.4 "Customer" shall mean the initial purchaser from the
Distributor (which is generally a Healthcare Institution).
1.5 "End-User" shall mean the person who purchases a Product for
use, and not for resale (generally the customer of the
Customer).
1.6 "Healthcare Industry" shall mean that segment of the economy
engaged in the provision and/or delivery of medical and
healthcare services to individuals.
1.7 "Healthcare Institutions" shall mean the businesses and
governmental agencies engaged in the Healthcare Industry,
including but not limited to hospitals, pharmacies, nursing
associations, home health care delivery organizations, and
municipal, state and federal agencies providing for the
delivery of and/or reimbursement for home healthcare services.
1.8 "Distributor's Healthcare Distribution Network" shall mean the
Distributor's existing and future network of Healthcare
Institutions and persons that Distributor now or in the future
may market its Personal Emergency Response Systems ("PERS")
to, including but not limited to dealers and franchisees of
Distributor and end-users of Distributor's PERS.
2. Appointment of Distributor.
2.1 During the term of this Agreement, manufacturer hereby
designates, constitutes, and appoints the Distributor to
market and solicit orders of the Products. The Distributor
shall have the exclusive worldwide Healthcare Industry rights
to the SPS-100 Product which shall entitle the Distributor to
have the exclusive right to sell the SPS-100 Product worldwide
to Healthcare Institutions and to individuals through
Distributor's Healthcare Distribution Network. The Distributor
shall have non-exclusive world-wide rights to the MPS-C50
Product which shall entitle the Distributor to have
non-exclusive right to sell the MPS-C50 Product worldwide.
Other than KingAlarm Distributors, Inc., of New Jersey
("KingAlarm"), the Manufacturer agrees to refrain from
appointing other distributors of the SPS-100 Product and from
selling the SPS-100 Product itself at the retail or wholesale
level (including sales to Healthcare Institutions, dealers and
End-Users) and that any orders submitted to the Manufacturer
for the SPS-100 Product from the Healthcare Industry shall be
directed to the Distributor.
2.2 Manufacturer hereby grants the Distributor a license to use
the trademarks and service marks of the Products and the trade
name "SEI" to identify the manufacturer of the Products.
2.3 In the event that (a) with respect to calendar year 1997,
Distributor fails to use reasonable efforts to fully and
effectively promote the sale of the SPS-100 Product to the
Healthcare Industry, (b) with respect to calendar year 1998,
Distributor's net sales of the SPS-100 Product for such year
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are not at least 20% greater than its net sales of the SPS-100
Product for 1997 (and such shortfall is not due to any breach
of this Agreement by the Manufacturer), or (c) with respect to
any calendar year after 1998, Distributor's net sales of the
SPS-100 Product for such year are not at least 20% greater
than its net sales of the SPS-100 Product for the preceding
year (and such shortfall is not due to any breach by the
Manufacturer) and during each such year Distributor fails to
use reasonable efforts to fully and effectively promote the
sale of the SPS-100 Product to the Healthcare Industry, then
in any such case Manufacturer shall have the right, by written
notice given to Distributor within 90 days after the end of
the relevant calendar year, to cause Distributor's rights to
distribute the SPS-100 Product hereunder to the Healthcare
Industry to become non-exclusive, effective 90 days after the
date such notice is given. If Distributor's right to
distribute the SPS-100 Product to the Healthcare Industry
becomes non-exclusive, then Manufacturer shall have the right
to market and sell the SPS-100 Product itself and/or to
appoint other distributors of the SPS-100 Product to the
Healthcare Industry.
3. Distributor's Rights and Obligations.
During the term of this Agreement, the Distributor shall:
3.1 The Distributor shall provide Manufacturer with data regarding
the location of all products identified by a serial number
from Manufacturer, provided that Manufacturer agrees to keep
all such data (including the identities of Customers and
End-Users) confidential and not to disclose it to any third
party or use it for any purpose other than in connection with
recalls of Products or as otherwise required by law.
3.2 The Distributor shall have the right to use any and all of the
Manufacturer's marketing tools, resources, Healthcare Industry
customer lists and Healthcare Industry customer inquiries, and
any related information or supplies related to the Products
and market as may be appropriate, in connection with the
marketing and sale of the SPS-100 Product.
3.3 The Distributor, upon receipt of a written release and consent
in satisfactory form from KingAlarm as described in Section
4.6 below, shall pay to Manufacturer a licensing fee in the
amount of $35,000. Such fee will include the development of
the Communications Package described in Section 4.7 below.
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3.4 Distributor shall not produce any product(s) which could be
considered directly competitive with the product line
currently known as Wander Watch SPS-100.
4. Manufacturer's Rights and Obligations.
4.1 Manufacturer shall manufacture quality Products ready for
resale at mutually agreed upon time frames using quality
components and good manufacturing procedures. Manufacturer
shall deliver Products within a reasonable time after receipt
of Distributor's orders.
4.2 Manufacturer shall allocate such time and financial resources
as it deems necessary and appropriate for research and
development to improve the Products in accordance with changes
in the industry, advancements in technology, recommendations
from the Distributor and its agents in comparison with
competition, knowledge gained by Manufacturer, and related
enterprises.
4.3 Manufacturer shall not produce any product(s) which could be
considered directly competitive with the product line
currently known as Wander Watch SPS-100.
4.4 Manufacturer shall continue its best efforts to enhance and
expand Products to help Distributor meet its twenty percent
(20%) sales increase requirements in order to maintain
exclusivity under Section 2.3.
4.5 Manufacturer will not use the Distributor's name or logo in
any advertising or promotional materials without the prior
written approval of such materials by the Distributor.
4.6 Manufacturer shall, as a condition to the effectiveness of
this Agreement and payment of the fee described in Section 3.3
above, obtain a release and consent from KingAlarm
Distributors, Inc. of New Jersey, permitting Manufacturer to
enter into this Agreement with Distributor.
4.7 Manufacturer shall develop a digital communicator for the
Products to communicate to standard receivers used at
Distributor's central station (the "Communications Package").
Manufacturer shall use its best efforts to complete its
research and development of the Communications Package in
order that the Products may be manufactured with the
Communications Package fully installed, and available for
distribution on or before 60 days following the execution of
this Agreement.
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5. Training and Related Expenses.
5.1 Each of the parties hereto shall bear its own expenses for
travel and training. In the event that Distributor desires to
have individuals under its control attend meetings with
Manufacturer, it will contact Manufacturer so that a mutually
agreeable time and place can be established for the meetings.
6. Warranty, Maintenance, and Repairs.
6.1 Manufacturer shall issue a limited warranty on the Products as
published in its current promotional materials, a copy of
which is attached hereto as Schedule "B". The limited warranty
shall provide for the right to return the Product for credit
(in the full amount of the purchase price) within 60 days of
the date of purchase by the Customer and for the repair or
replacement of the Product at no charge for parts or labor for
two years (except transmitter batteries which shall be for one
year) from the date of purchase by the Customer, and shall
exclude any consequential damages the purchaser may suffer.
The Distributor shall be allowed to pass the Warranty to the
Customer and to the End-User.
6.2 The Manufacturer shall provide basic trouble-shooting to the
Distributor and to its Customers for any Product under
warranty during the Term of this Agreement and for two years
following the term of this Agreement.
6.3 If Manufacturer shall at its sole option decide to repair an
item under warranty, it shall make such repairs in a timely
manner at the expense of Manufacturer, and return the Product
directly to the Customer, the End-User, or the Distributor
when directed.
6.4 Products not under warranty shall be subject to the following
repair procedure. A reasonable repair cost estimate shall be
made by Manufacturer and reported immediately to the
Distributor for information and instruction as to whether to
repair or not. If directed by the Distributor to go ahead and
repair, Manufacturer will repair items for the reasonably
stated estimate, upon written request by Distributor.
Distributor shall pay the costs for the repair within 30 days
of delivery of the repaired Product. Costs shall include, but
not be limited to, labor, shipping, and parts.
7. Purchase.
7.1 Distributor hereby places an initial pre-production purchase
order for 100 units of the SPS-100 Product with the
Communications Package.
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7.2 Distributor shall pay for all Products delivered within
forty-five (45) days of receipt, except that the initial
purchase referred to in Section 7.1 shall be paid for within
thirty (30) days of receipt.
7.3 The Distributor shall purchase mutually agreed upon quantities
of the Products at the prices shown on "Schedule A" pricing
from Manufacturer attached hereto. Any price change must be
reasonable and in line with the electronics/computer industry
(but in no event to exceed 10% per annum) and shall not become
effective until 60 days after the Manufacturer notifies the
Distributor of such change or, if later, such effective date
as may be specified by the Manufacturer. A schedule of
Products shall be published in January of each year. Each
order for Products shall be made by:
A. A Purchase Order signed by an authorized
officer or employee of the Distributor; and
B. Payment in the amount of one-half the order
amount to the Manufacturer's assembly firm (to be named
upon receipt of P.O.) to be placed in escrow pending
receipt of the Products by Distributor.
8. Assignment.
8.1 The parties shall not assign or otherwise transfer this
Agreement or any interest or rights herein without the prior
written consent of the other party. Any such purported
assignment, transfer or attempt to assign or transfer any
interest or right herein, without the prior written consent of
the other party, shall be null and void, and of no effect.
Notwithstanding the foregoing, either party may assign this
Agreement without the consent of the other party in connection
with the sale of the business of such party, whether by sale
of assets, merger or otherwise, and Distributor may assign
this Agreement to any of its subsidiary companies.
9. Municipal Bids.
9.1 Manufacturer expressly waives the right to sell directly to
any government entities engaged in the Healthcare Industry.
10. Commercial Sales.
10.1 Manufacturer retains the right to market and sell the SPS-100
Product solely in connection with sales of the MPS-C50 Product
by Manufacturer. The SPS-100 product is supplied in connection
with the MPS-C50 Product as a demonstrator only, and numbers
supplied have been limited. The
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provisions of this Section 10.1 shall not be construed as
restricting the Distributor or its Customers from selling the
SPS-100 Product in connection with sales of the MPS-C50
Product.
11. Term of Agreement.
11.1 This Agreement shall become effective upon the date first
written (hereinafter the "effective date") and shall be for a
term of two (2) years commencing on the date that the Products
containing the Communications Package are available for
purchase. The Agreement shall be automatically renewed on a
year-to-year basis thereafter unless either of the parties
fail to conform to the terms and conditions hereof. The party
alleging that the other party has failed to so conform shall
sixty (60) days prior to the expiration of the term notify the
other party as to the particulars of its allegation of
non-conformance and its desire to terminate this Agreement.
11.2 Either party may terminate this Agreement in the event that
the other party materially breaches this Agreement and fails
to cure such breach within 30 days after written demand
therefor.
12. Indemnification and Insurance.
12.1 Distributor shall indemnify and hold harmless Manufacturer and
its directors, officers, employees and agents from and against
any all losses, liabilities, damages and expenses (including
reasonable attorney's fees and expenses) which it may incur or
be obligated to pay in any action, claim of proceeding against
it, for or by reason of any negligence or misconduct by
Distributor or any of its agents or employees in connection
with Distributor's performance of this Agreement. The
provisions of this Section and Distributor's obligations
hereunder shall survive any termination of this Agreement.
12.2 Except to the extent Manufacturer is entitled to be
indemnified by Distributor pursuant to Section 12.1 hereof,
Manufacturer shall indemnify and hold harmless Distributor and
its directors, officers, employees and agents from and against
any and all losses, liabilities, damages and expenses
(including reasonable attorney's fees and expenses) which it
may incur or be obligated to pay in any action, claim or
proceeding against it arising out of or relating to the
manufacture, distribution, promotion, sale or use by Customers
or End-Users of the Products distributed by Distributor
hereunder. The provisions of this Section and Manufacturer's
obligations hereunder shall survive any termination of this
Agreement.
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12.3 Manufacturer shall indemnify and hold harmless Distributor and
its directors, officers, employees and agents from and against
any and all such losses, liability, damages and expenses
(including reasonable attorney's fees and expenses) which any
of them may incur or be obligated to pay in any action, claim
or proceeding against any of them for infringement of any
other person's patent rights, trademark rights or other
proprietary rights, but only where such action, claim or
proceeding results from the activities of Distributor
contemplated by the Agreement conducted in accordance with the
terms of this Agreement. Distributor shall give Manufacturer
prompt written notice of any such claim or action and
thereupon Manufacturer shall undertake and conduct the defense
of any suit so brought. Distributor shall have the right to
participate in the defense of any such claim or action at its
expense through counsel of its choosing. In the event
appropriate action is not taken by Manufacturer within 10 days
of its receipt of notice from Distributor or Manufacturer
fails to diligently pursue the defense of such claim
thereafter, Distributor shall have the right to defend such
claim or action in its own name, but no settlement or
compromise of any such claim or action may be made without
prior written approval of Manufacturer (which approval shall
not be unreasonably withheld or delayed). In either case,
Manufacturer and Distributor shall keep each other fully
advised of all developments and shall cooperate with each
other in all respects in connection with any such defense as
is made. The provisions of this Section and Manufacturer's
obligations hereunder shall survive any termination of this
Agreement.
12.4 Commencing on or before the date on which Manufacturer first
ships Products to Distributor hereunder, Manufacturer shall
obtain and maintain at lest $2 million of products liability
insurance coverage with respect to the Products distributed by
Distributor hereunder, with a deductible per occurrence of no
more than the customary deductible for products liability
insurance in the electronics/computer industry, but in any
event no more than $15,000, at Manufacturer's expense, and
shall cause Distributor to be named as an additional named
insured on the policy under which such insurance is provided.
Manufacturer shall maintain "tail" insurance coverage, of the
same type, amount and deductible as it is required to maintain
during the term of this Agreement, for a period of two years
after termination of this Agreement for any reason whatsoever.
13. Miscellaneous.
13.1 Neither party shall represent itself as the agent or legal
representative of the other party or shall have any right to
create or assume any obligation
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of any kind, express or implied, for or on behalf of the other
party in any way whatsoever. This Agreement and the
performance by any party under this Agreement shall not be
deemed to create a relationship other than as independent
contractors.
13.2 This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and this Agreement
may not be amended or modified, except in a writing signed by
both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
Xxxxx Electronics Response USA, Inc.
By: By:
------------------- --------------------
Xxxx X. Xxxxx
Its: President Its:
--------------------
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SCHEDULE A
Initial pre-production order of 100 units of SPS-100 Products $400.00 per Unit*
Minimum Orders of:
0-100 units of SPS-100 Products $____ per Unit*
101-500 units of SPS-100 Products $____ per Unit*
Over 500 units of SPS-100 Products $____ per Unit*
0-100 units of MPS-C50 Products $____ per Unit*
101-500 units of MPS-C50 Products $____ per Unit*
Over 500 units of MPS-C50 Products $____ per Unit*
In addition to the above price, Distributor shall pay to
Manufacturer a portion of the monthly monitoring fee equal to 20% of such
fee or $7.50 (whichever is lower) derived from central station monitoring
revenues actually received from Customers or End Users of the Products
during the Term of this Agreement.
*Including a built-in digital communicator. The prices are to be mutually agreed
upon between Manufacturer and Distributor following receipt of the initial 100
pre-production order of SPS-100 Products.
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