HOME DIRECTOR SERVICE AGREEMENT
THIS AGREEMENT ("AGREEMENT") is made as of the 17th day of April, 2003
(the "EFFECTIVE DATE"), by and between Sears, Xxxxxxx and Co., a New
York corporation with its principal office at 0000 Xxxxxxx Xxxx,
Xxxxxxx Xxxxxxx, Xxxxxxxx, for itself and its agents, assigns,
subsidiaries and affiliates (collectively, "SEARS"), and Home Director
Inc., a corporation with its principal office at 0000 Xxxxxxx Xxxxxx
Xxxx, Xxxxxxxxx, XX, for itself and its agents, assigns, subsidiaries
and affiliates (collectively, "HOME DIRECTOR"). Sears and Home Director
shall collectively be referred to herein as the "PARTIES" and
individually as a "PARTY".
WHEREAS, the Parties entered into a Pilot Agreement dated June 27,
2002, to market and sell Home Networking Systems (as defined the
Exhibits) and Services (as defined herein), to builders of new homes in
metropolitan areas, ("BUILDERS"), and new homeowners, ("HOMEOWNERS")
who utilize the services of Builders to build their homes.
WHEREAS, the Parties seek to enter into a definitive agreement where
Sears desires Home Director to supply Home Networking Systems to Sears
and to those designated by Sears including, contractors authorized by
Sears, ("AUTHORIZED INTEGRATORS") as identified by Sears to Home
Director throughout the term of this Agreement, and Home Director is
willing to and able to provide the requested products and services in
accordance with the terms and conditions of this Agreement.
NOW THEREFORE, it is mutually agreed as follows:
1. TERM
The term of this Agreement shall commence on the Effective Date and
shall continue in full force for two (2) years from the Effective Date;
provided, however, either Party hereto shall have the right to
terminate this Agreement at anytime during the term, without cause,
without penalty and without liability for any damages as a result of
such termination, by giving to the other party at least one hundred
twenty (120) days prior written notice of termination. Any such
termination shall not relieve Home Director of obligations accepted by
Home Director prior to such termination or Sears' payment obligations
for such services.
2. RESPONSIBILITIES OF HOME DIRECTOR
2.1 SALE OF PRODUCTS. Home Director agrees to supply the standard and
custom Home Networking Systems, (the "PRODUCTS") specified in Exhibit
A, and provide such Products to Sears and Authorized Integrators, upon
request from Sears, in accordance with the terms of the Home Networking
Proposal, specified in Exhibit B, and the terms of this Agreement.
2.2 INVENTORY. Home Director agrees to maintain an inventory of
Products in an amount that is sufficient to meet reasonably foreseeable
demand. Home Director shall have thirty (30) days upon submission of a
purchase order by Sears, to deliver the Product to Sears or the
Authorized Integrator in accordance with the purchase order.
2.3 PARTS. Home Director shall be the preferred supplier to Sears and
Authorized Integrators for component parts, replacement parts, existing
parts or new parts (collectively, "Parts") for the Products for which a
purchase order is placed. For the purposes of this Section 2.3,
"preferred supplier" shall mean that, absent a commercially reasonable
rationale, Home Director shall be the supplier of Parts to Sears under
the terms of this Agreement. The parties acknowledge that under certain
circumstances, such as a requirement from a builder or developer Sears
may seek an alternate supplier of Parts. Under these certain
circumstances Sears will for its part, notify Home Director in writing
of such request and Home Director shall have 10 business days to
respond in writing to accept, or reject such request. If Home
Director's acceptance is not competitive under these certain
circumstances, Sears may in its sole discretion seek an alternate
supplier of Parts.
2.4 SERVICES. Home Director agrees to provide certain services, (the
"SERVICES") including the training of designated Sears representatives
and Authorized Servicers on the installation, sale and use of Products.
Home Director acknowledges that although Sears may consider accepting
offers relating to other services provided by Home Director which may
include, but not be limited to, design and engineering of floor plans,
proposal generation, technology consulting, sales support, installation
services and Homeowner orientations; as of the Effective Date, Sears
has no obligation to accept such offer. Home Director further
acknowledges that offering services such as home security monitoring
services and home office equipment to customers is not within the scope
of this Agreement, however, nothing in this Agreement shall be deemed
to preclude Home Director from offering such services to Homebuilders
and Homeowners as long as the Xxxxx Xxxx (as defined hereafter) is not
associated with such offerings, and Home Director discloses in writing
to the customer that such offer is not affiliated with Sears.
2.5 SALES TRAINING. Home Director shall support Sears marketing and
selling efforts by (i) conducting training ("SALES TRAINING"), which
includes but is not limited to training on the Products operation and
functionality, technology updates and sales techniques based on Home
Directors patent application serial number 09/840,742 filed with the
United States patent office, and (ii) make Home Director sales
associate(s) available to accompany Authorized Integrators on select
sales calls to Builders and Homeowners. Home Director shall conduct a
minimum of ten (10) Sales Training sessions per year at locations
mutually agreed upon by the Parties at a later date.
2.6 INSTALLATION TRAINING. Home Director shall conduct Product
installation and Service training ("INSTALLATION Training") for Sears
employees and Authorized Integrators. Home Director acknowledges that
Authorized Integrators are not Sears employees, and shall be directly
responsible for payment of Installation Training fees that Home
Director may charge. Home Director shall submit invoices for
Installation Training to the Authorized Integrator and agrees not to
seek payment from Sears in the event of non-payment from the Authorized
Integrator. Home Director will conduct a minimum of ten (10)
Installation Training sessions per year at locations mutually agreed
upon by the Parties at a later date.
2
2.7 DEMONSTRATION UNITS. Home Director shall furnish Authorized
Integrators with a Dealer Promo Kit, and one (1) demonstration unit-
*confidential treatment*
2.8 PROMOTIONAL SUPPORT. Home Director shall provide, at no charge to
Sears, co-operative support for marketing and advertising initiatives
by Sears Product Repair Business. Such support shall include, without
limitation, package inserts, signage, promotional items as Sears may
reasonably request from time to time.
2.9 HOME DIRECTORS RELATIONSHIPS WITH COMPETITORS. Home Director agrees
for itself, and its affiliates, that during the term of this Agreement,
as to providing Services, Sales Training and Installation Training,
Home Director will not enter into an agreement or negotiate for the
purposes of entering into an agreement with any Restricted Party (as
defined herein), where such agreement relates to a purpose identical or
substantially similar to the transactions specified in this Agreement,
or assist, directly or indirectly, any third party in any way to do the
same, unless Sears and Authorized Integrators' total purchases of Parts
from alternate supplier or suppliers exceed 25% as measured over a
Sears fiscal quarter. "RESTRICTED PARTIES" include but are not limited
to large retail companies such as *confidential treatment*, and all
affiliates of these companies. Transactions with Restricted Parties
will be deemed to be substantially similar if the Services offered to
the Restricted Party are related to the Products. Home Director
warrants that neither it nor any Home Director affiliate currently has
existing agreements with Restricted Parties to manufacture Products
including Home Director's current relationship as a supplier of Parts
to *confidential treatment*. If Home Director provides Services, Sales
Training and Installation Training that is identical to or
substantially similar to the Services, Sales Training and Installation
Training specified in this Agreement, Home Director shall be in breach
of this Agreement.
2.10 RELEASE OF LIEN. Upon request, Home Director shall furnish a Sworn
Statement of Account showing the names and addresses of all parties who
furnish Home Director, materials, supplies and/or products with the
amount due or to become due and a description of the nature of the
Services performed and to be performed, as often as requested by Sears.
A final waiver and release of lien on a form satisfactory to Sears (or
otherwise required by applicable law) must be submitted before
disbursement of final payment, together with a final affidavit from
Home Director certifying that all materials, supplies, Products and
independent contractors, under Home Directors direct contract have been
paid in full, which affidavit Sears shall be entitled to rely on.
3
3. RESPONSIBILITY OF SEARS
3.1 MARKETING AND SELLING PRODUCTS. Sears shall be responsible for
developing the marketing and business strategy to sell the Products by
creating and managing a business infrastructure to support the sales
and marketing efforts, which includes entering into relationships with
Authorized Integrators and managing such relationships.
3.2 BILLING. Sears shall be responsible for submitting invoices to the
Builders and Homeowners at prices and other terms and conditions
determined by Sears, in its sole discretion.
4. ORDERS AND FULFILLMENT
4.1 PURCHASE ORDERS. A commitment by Sears to purchase Products shall
arise only at such time as Home Director receives a purchase order,
from Sears or an Authorized Integrator submits a purchase order to a
designated authorized Home Director distributor. The obligation to
purchase Products shall be limited to the quantities specified in such
purchase orders.
4.2 ESTIMATES AND FORECASTS. Sears and Home Director shall cooperate to
develop estimates and forecasts of Sears' future needs for Products.
Any such estimates and forecasts that exceed the requirements set forth
in Section 2.2 above, are for planning purposes only and shall not in
any way represent or create any commitment by Sears to purchase any
particular quantity of Products. Sears shall have no responsibility for
any actions taken by Home Director based on such estimates or
forecasts.
4.3 DELIVERY TERMS. All Products will be delivered to the
location specified on the purchase order, or any other location
specified by Sears prior to shipment, F.O.B. Home Director, or when
requested by Sears, F.O.B. Origin
4.4 CHANGES. Sears or the Authorized Integrator may, at any time, by
written notice to Home Director, request changes to a purchase order.
Home Director shall, within a reasonable time, provide Sears or
Authorized Integrator with an estimate of the impact, if any, of such
requested change on the payment terms and completion date. If the
Parties mutually agree to such changes, a written description of the
agreed change, ("CHANGE OF SPECIFICATION") as defined in Exhibit B
attached hereto, will be prepared which both Parties must sign. In the
event of any conflicts or inconsistency, the terms of a Change of
Specification, such Change of Specification shall prevail over those of
the purchase order. Home Director shall continue work pursuant to the
existing purchase order, and shall not be bound by any change requested
by Sears or the Authorized Integrator, until such change has been
accepted in writing by both Parties.
4.5 INTRODUCTION OF NEW PRODUCTS. From time to time, Home Director may
introduce new Home Networking System technology to the market place.
Prior to Home Director offering such Home Networking Systems to
Authorized Integrators, Home Director shall meet with Sears to discuss
the possibility of including the new technology as part of the Product
offering.
4
4.6 DISCONTINUATION OF PRODUCTS. From time to time, the Parties may
review the history of demand of the Product categories, and mutually
decide to discontinue offering or selling one or more of the Product
categories, however, such decision shall not relieve Sears or
Authorized Integrators of any obligations related to accepted purchase
orders by Home Director as of the date of the decision to discontinue
the Product, or a date mutually agreed to by the Parties.
4.7 NONCONFORMING PRODUCTS. "NONCONFORMING PRODUCTS" are Products
submitted to Sears or Authorized Integrators by Home Director that do
not conform to the purchase order for such Products, or (i) are not
merchantable; (ii) have defects in design, workmanship, materials;
(iii) are not fit for the purposes for which they are intended; (iv)
are not equivalent to samples or demonstration units that were
submitted to Sears, or (v) delivered damaged. At the election of Sears,
such Nonconforming Products (1) may be accepted as is; (2) or may be
accepted and Home Director shall issue a credit in the amount of the
selling price for any reduced value of such Nonconforming Products as
mutually agreed upon by Home Director and Sears or (3) Home Director
may grant a return authorization and re-deliver such shipments so that
they are no longer Nonconforming Products, or (4) Home Director may
grant a return authorization and a full credit of all charges for such
Nonconforming Products.
4.8 PAYMENT. Home Director shall submit all invoices in the form
attached as Exhibit C of this Agreement. Failure of Home Director to
comply with the invoice requirement shall negate Section 5.2 below.
Furthermore, Home Director acknowledges that if an Authorized
Integrator submits a purchase order to the designated Home Director
distributor, the Authorized Integrator shall be solely responsible for
the payment of Products that are shipped, received and conform to the
purchase order during the term of this Agreement. Furthermore, Home
Director, and their designated distributor shall not invoice Sears in
the event that an Authorized Integrator fails to pay for such Products.
*confidential treatment*
5. TERMINATION
5.1 TERMINATION BY SEARS. This Agreement shall automatically terminate
upon delivery of notice of termination to Home Director, if Home
Director (i) abandons, surrenders or transfers control of the operation
of the business without prior approval of Sears; offers any
unauthorized Services or Products; (ii) offers any services or products
the same as or similar to the Services and/or Products to a competitor;
(iii) has made any material misrepresentation or omission in the
negotiations of this Agreement with Sears; (iv) is convicted by a trial
court of or pleads no contest to a felony, or other crime or offense
that is likely to adversely affect the reputation of Sears; (v) makes
any unauthorized use or disclosure of any Confidential Information;
(vi) becomes insolvent or files for bankruptcy; Sears shall have the
right to cancel or terminate immediately this Agreement for any
particular line or lines of Products and Services, or cancel or
terminate all or any outstanding orders for Products and Services under
this Agreements if Home Director (i) is in default of any other
5
agreement with Sears or any of its affiliates, and such agreement is
terminated as a result thereof; (ii) fails to maintain in force the
insurance coverage as required by this Agreement and does not correct
such failure within thirty (30) days after written notice of such
failure to comply is delivered to Home Director; (iii) fails on two or
more separate occasions within any period of twelve (12) consecutive
months to comply with the same obligation under this Agreement, whether
or not such failures to comply are corrected after notice of default is
given; or (iv) fails to comply with any other provision of this
Agreement or any mandatory specification, standard or operating
procedure prescribed by Sears and does not correct such failure within
thirty (30) days after written notice of such failure to comply is
delivered to Home Director.
5.2 IMMEDIATE TERMINATION BY HOME DIRECTOR. Home Director may
terminate this Agreement by giving written notice to Sears if: (i)
Sears fails to make a payment required of it under this Agreement and
such payment is more than sixty (60) days delinquent, or (ii) Sears
becomes the subject of a case under the Federal Bankruptcy Code or
similar state or federal insolvency laws, or (iii) Sears infringes
upon the patent rights granted under Home Director patent application
serial number 09/840,742 filed with the United States patent office.
5.3 EFFECTS OF TERMINATION. Termination shall be subject to the Parties
obligation to complete performance pursuant to the terms of this
Agreement, unless circumstances warrant otherwise. In such event, Sears
and Home Director agree to negotiate in good faith a reasonable process
to settle incomplete matters. To the extent that either Party has
expressly provided the other Party with authority to use its name or
marks in any manner, the other Party shall stop such use immediately or
within such timeframe otherwise directed by the requesting Party.
6. INTELLECTUAL PROPERTY RIGHTS
6.1 OWNERSHIP OF INTELLECTUAL PROPERTY. Except as specified in Section
6.2 below, no license is granted to any patent, copyright, trademark or
other proprietary right of either Party, and each Party hereto shall
retain ownership of its own intellectual property.
6.2 GRANT OF LICENSE. Home Director hereby grants Sears a
non-exclusive, paid-up, irrevocable, royalty-free license under any
Home Director United States patents, including divisional, continuation
or continuation-in-part patents, that issue from the United States
patent application serial number 09/840,742, filed with the United
States Patent and Trademark Office on April 23, 2001, solely for the
term of this Agreement. Sears agrees that neither it nor its wholly
owned affiliates shall authorize any sublicenses of any Home Director
United States patents that issue from the United States patent
application serial number 09/840,742.
6.3 USE OF PROPRIETARY RIGHTS. Each Party shall submit for review and
receive written authorization prior to copying, distributing and
preparing derivative works of its licensed marketing materials
("MATERIALS") in connection with the subject matter of this Agreement.
6
6.4 PRODUCTS BEARING SEARS' IDENTIFICATION. If Sears directs Home
Director to xxxx or label any Product with a trade name, trademark,
logo or service xxxx owned by or licensed to Sears ("SEARS'
IDENTIFICATION"), such marking or labeling shall be limited to the
Products indicated in the purchase order and shall be done in
accordance with Sears specific instructions. Home Director shall not
sell or otherwise dispose of, nor permit the sale or disposal of, any
Product bearing any Sears Identification (including any rejected
Product) to anyone other than Sears without first obtaining Sears
express written consent (which consent shall not be unreasonable
withheld or delayed). Sears grants to Home Director a limited license
to supply Products bearing Sears' Identification to Sears solely as set
forth in this Agreement. This limited license is revocable in whole or
in part by Sears at any time. Home Director shall have no interest or
rights in any Sears Identification, and this Agreement does not grant
Home Director any rights in any Sears Identification except the limited
license to supply Products bearing such identification to Sears
pursuant to the terms of this Agreement. The provisions of this Section
6 shall survive the expiration or termination of this Agreement.
7. REPORTS AND AUDITS
7.1 REPORTS. Home Director shall promptly prepare and forward to Sears
any and all reports reasonably requested by Sears, related to the
performance under this Agreement including, but not limited to, work
specifications, performance information, tests, complaint logs,
scripts, customer comments and communications, Product sales, shipment
and disbursement of Products, back orders, aged orders and other
information reasonable requested by Sears. All reports furnished to
Sears and all information contained therein shall be used by Sears
solely for its internal purposes.
7.2 AUDITS. All records and reports as it relates to this Agreement,
shall be available for audit by Sears or its agents upon three (3)
business days prior written notice at Home Director's expense during
normal business hours. In addition, Sears shall have the right to
inspect any site used by Home Director or its subcontractors in the
performance of this Agreement. The audit rights provided herein shall
survive the termination of this Agreement and continue for a period of
three (3) calendar years from the date of termination.
8. MUTUAL INDEMNIFICATION
8.1 HOME DIRECTOR INDEMNIFICATION OF SEARS. Home Director shall, at its
sole expense, defend Sears, its subsidiaries, and the officers,
directors, employees, licensees, agents, distributors, independent
contractors of Sears and/or its subsidiaries and Authorized
Integrators, (each an "INDEMNIFIED PARTY") from and against all
allegations (even though such allegations may be false, fraudulent or
groundless) asserted in any claim, action, lawsuit or proceeding
between any Indemnified Party and any third party caused by Home
Directors acts, or breaches of its obligations under this Agreement,
and arising out of any of the following (collectively, the "CLAIMS"),
whether or not Home Director's indemnification and contribution
obligations shall apply: (a) infringement or misappropriation of any
patent, trademark, trade name, trade dress, copyright, trade secret,
right of publicity or other proprietary right in connection with any
Products, or any unfair competition involving Products; (b) death of or
injury to any person, damage to any property, or any other damage or
7
loss, by whomsoever suffered, resulting or claimed to result in whole
or in part from an alleged defect in any Product, whether latent or
patent, including improper construction or design of the Product, or an
alleged failure of the Product to comply with any specifications or
samples or with any express or implied warranties of Home Director, or
any claim of strict liability in tort relating to the Product; (c)
violation by Home Director through the manufacture, possession, use or
sale of the Product or Product parts, of any federal, state or local
laws, regulations, ordinances or administrative orders or rules of the
United States, its territories or any other country in which the
Product or Product parts is produced or delivered; (d) defect involving
the packaging, tagging, labeling, packing, shipping and/or invoicing of
Products; or (e) failure to warn or inadequate warnings and/or
instructions. Home Director shall use counsel reasonably satisfactory
to Sears in the defense of all Claims. Sears may, at its election, take
control of the defense and investigation of any Claim(s) and may employ
and engage attorneys of its own choice to manage and defend such
Claim(s), at Home Director's cost, risk and expense, provided that
Sears and its counsel shall proceed with diligence and good faith with
respect thereto. The provisions of this Section 8.1, shall survive for
a period of two years beyond the expiration or termination of this
Agreement.
8.2 SEARS INDEMNIFICATION OF HOME DIRECTOR. Sears agrees to protect,
defend, hold harmless and indemnify Home Director and its affiliates,
subsidiaries, officers, directors, employees and agents and hold them
harmless, from and against any and all claims, complaints, fines,
penalties, causes of action, liabilities, judgments, losses, costs,
damages of every kind and character, and expenses, including reasonable
attorneys' fees, (collectively, "Sears Claims") to the extent same are
proximately caused by, or proximately arise out of or alleged to have
arisen out of:
(i) a breach of or default under any covenant or provision of this
Agreement by Sears; (ii) the negligent acts or omissions or willful
misconduct of Sears or its officers, employees, or technicians; (iii)
violation by Sears, of any law, statute or ordinance or any
governmental administrative order, rule or regulation in relation to
its obligations under this Agreement. The provisions of this Section
8.2, shall survive for a period of two years beyond the expiration or
termination of this Agreement.
9. WARRANTY
9.1 WARRANTY OF FITNESS AND MERCHANTABILITY. Without in any way
disclaiming implied remedies or limiting remedies for breach thereof,
Home Director represents and warrants that all Products shall: (a)
conform to the specifications for such Products; (b) be merchantable;
(c) be free from defects in workmanship, materials and packaging; (d)
be free from defects in construction and design; (e) be fit and
sufficient for the purpose for which it is intended and/or which is
stated on any packaging or labeling; (f) be equivalent in materials,
quality, fit, finish, workmanship, performance and design to any
samples submitted to and approved by Sears; and (g) conform to any
performance claim that Home Director makes or has made in connection
with the Products. In addition, if Home Director is notified during
such time period of a breach of this warranty, then Home Director will
arrange for the necessary repairs to be made promptly without
additional charges to either the Homeowner, Builder, Sears or
Authorized Integrator. Home Director disclaims all other warranties
including, but not limited to, any responsibility for loss of profit or
other special, consequential or punitive damages for the term of
8
warranty for each product. This warranty does not cover the repair or
exchange of the Product damaged as a result of misuse, accident,
modification, unsuitable physical or operating environment, improper
installation or maintenance, or failure caused by a product for which
Home Director is not responsible. This warranty shall be void by
removal or alteration of the Product or any labels specific to use or
restrictions of use of the Product.
9.2 OUTSTANDING CLAIMS. Home Director represents and warrants that Home
Director has no liability (and there is no basis for any present or
future complaint, action, suit, proceeding, hearing, investigation,
claim or demand against Home Director giving rise to any liability) in
connection with the manufacturing of the Product. No Product
manufactured, sold, or delivered by Home Director is subject to any
guaranty, warranty or other indemnity beyond the applicable standard
terms and conditions of sale.
9.3 PRODUCT LIABILITY. Home Director represents and warrants that Home
Director has no liability (and there is no basis for any present or
future charge, complaint action, suit, proceeding, hearing,
investigation, claim or demand against home Director giving rise to any
liability), whether known or unknown, airing out of any injury to
persons or property as a result of the ownership, possession or use of
any Product manufactured, sold or delivered by Home Director.
9.4 AUTHORITY TO EXECUTE AND PERFORM. Home Director represents and
warrants that Home Director has all requisite power, authority and
approvals required to enter into, execute and deliver this Agreement
and all of the other documents to be delivered by Home Director, and to
perform fully Home Director's obligations hereunder. Furthermore, Home
Director warrants that Home Director has not violated or infringed any
third party's right in proprietary rights or Confidential Information
in performing under this Agreement and has complied with all federal,
state and local laws, rules, regulations and orders pertaining to the
Home Directors performance.
10. INSURANCE
10.1 COMMERCIAL GENERAL LIABILITY INSURANCE. Home Director shall, at
its own expense, obtain and maintain Commercial General Liability
insurance with coverage including, but not limited to,
premises/operations, contractual, personal and advertising injury, and
products/completed operations liabilities, with limits of at least
$1,000,000 per occurrence and $3,000,000 in the aggregate for bodily
injury and property damage combined. Sears shall be named as an
additional insured. Limits of liability requirements may be satisfied
by a combination of Commercial General Liability and Umbrella Excess
Liability policies.
10.2 EVIDENCE OF INSURANCE. Insurance shall be purchased from companies
having a rating of A- VII or better in the current Best's Insurance
Reports published by A.M. Best Company. Policies of insurance shall
provide that they will not be canceled or materially changed without at
least thirty (30) days prior written notice to Sears. Certificates of
insurance evidencing coverage shall be submitted in advance of or
concurrent with the execution of this Agreement, and on each insurance
policy renewal thereafter. Home Director shall, at Sears request,
provide copies of requested insurance policies. If Home Director does
not provide Sears with such certificates of insurance or, in Sears
9
opinion, such policies do not afford adequate protection for Sears,
Sears will so advise Home Director. If Home Director does not furnish
evidence of acceptable coverage within fifteen (15) days after written
notification to Home Director, Sears shall have the right, in its sole
discretion, to (i) withhold payments from the Home Director until
evidence of such acceptable coverage is provided or (ii) immediately
terminate this Agreement. Failure to obtain and maintain required
insurance shall not relieve Home Director of any obligation contained
in this Agreement. Additionally, any approval by Sears of any of Home
Director's insurance policies shall not relieve Home Director of any
obligation contained in this Agreement, including liability for claims
in excess of described limits.
11. RELATIONSHIP OF THE PARTIES
Home Director is acting as an independent contractor under this
Agreement. Nothing contained in or performed pursuant to this Agreement
shall be construed as creating a partnership, agency or joint venture.
Home Director has the full right and the responsibility to determine
the method, manner and control of the work to be performed pursuant to
the responsibilities of Home Director set forth in this Agreement. Home
Director has the sole and exclusive right to hire, direct, supervise
and discharge any workers employed by Home Director. Under no
circumstances shall Home Director or its employees represent themselves
as Sears employees or agents in any manner. Home Director is solely
responsible for all salaries and other compensation of its employees.
Under no circumstances will Home Director make any purchases or incur
any obligation or expense of any kind in the name of Sears; nor shall
Home Director represent to anyone that Sears is in any way responsible
or liable for any obligation, purchase or expense of Home Director.
12. CONFIDENTIALITY AND PUBLICITY
12.1 "CONFIDENTIAL BUSINESS INFORMATION" means any information, whether
disclosed in oral, written, visual, electronic or other form, which
either Party discloses or either Party observes in connection with its
performance of its obligations hereunder. Confidential Business
Information includes, but is not limited to: (a) all information
relating to sales, pricing, cost, inventory, operations, plans and
programs of either Party; (b) all trade secrets of either Party; (c)
patent applications, work subject to copyright protection and other
intellectual property of either Party; (d) any other information that
is not publicly available and that is designated by that Party as
proprietary, confidential or sensitive at the time of first disclosure;
and (e) the terms and existence of this Agreement.
12.2 USE OF CONFIDENTIAL BUSINESS INFORMATION. Each Party shall use the
other Party's Confidential Business Information only as necessary to
perform its obligations under this Agreement. Each Party shall restrict
disclosure of Confidential Business Information to its personnel who
have a need to know such information to perform its obligations
hereunder and who have first agreed to be bound by the terms of this
Section 12. Each Party is liable for any unauthorized disclosure or use
of Confidential Business Information by any of its personnel. Within
ten (10) days after receiving a written request, Each Party shall
destroy in such a manner that it cannot be retrieved or return (as
instructed by the requesting Party) any materials containing
Confidential Business Information of the requesting Party. Each Party
shall certify to the other Party that it has satisfied its obligations
under this Section 12.
10
12.3 CONFIDENTIAL BUSINESS INFORMATION DISCLOSURE EXCEPTIONS. The
obligations under this Section 12, do not apply to any Confidential
Business Information that either Party can demonstrate: (i) is or
becomes publicly available without breach of this Agreement; (ii) is
independently developed by without use of any Confidential Business
Information; or (iii) is received from a third party that does not have
an obligation of confidentiality to Sears. Either Party may disclose
Confidential Business Information to the extent that, in the reasonable
opinion of legal counsel, it is legally required to be disclosed. Such
disclosing Party shall notify the other Party within a reasonable time
prior to disclosure and allow the other Party a reasonable opportunity
to seek appropriate protective measures.
12.4 "CONFIDENTIAL PERSONAL INFORMATION" means names, addresses,
telephone numbers, account numbers, customer lists, and demographic,
financial and transaction information. Home Director agrees that any
Confidential Personal Information about Builders and Homeowners
provided by Sears to Home Director, shall be deemed Confidential
Personal Information belonging to Sears. Home Director shall use
Confidential Personal Information only as necessary to perform its
obligations under this Agreement. Home Director shall not duplicate or
incorporate the Confidential Personal Information into its own records
or databases. Home Director shall restrict disclosure of Confidential
Personal Information to its employees who have a need to know such
information to perform its obligations and who have first agreed to be
bound by the terms of this Section 12. Home Director shall require its
authorized agents and subcontractors to execute a document stating such
agreement. Home Director is liable for any unauthorized disclosure or
use of Confidential Personal Information by any of its personnel.
Unless otherwise prohibited by law, Home Director shall (i) immediately
notify Sears of any legal process served on Home Director for the
purpose of obtaining Confidential Personal Information and (ii) permit
Sears adequate time to exercise its legal options to prohibit or limit
such disclosure.
12.5 ESTABLISHMENT OF PROCEDURES. Home Director shall establish and
maintain written policies and procedures designed to ensure the
confidentiality of the Confidential Personal Information. Copies of
such policies and procedures shall be provided to Sears upon our
request. Home Director shall permit Sears to audit Home Director's
compliance with the provisions of this Section 12, at any time during
Home Director's regular business hours.
12.6 RETURN OF CONFIDENTIAL PERSONAL INFORMATION. Within ten (10) days
following termination of this Agreement or ten (10) days following the
completion of a Project for which the Confidential Personal Information
has been provided, whichever first occurs, Home Director shall, at
Sears discretion, (i) return the Confidential Personal Information to
Sears or (ii) certify in writing to the Sears that such Confidential
Personal Information has been destroyed in such a manner that it cannot
be retrieved.
12.7 REMEDY. In addition to any other rights Sears may have under this
Agreement or in law, since unauthorized use or disclosure of the
Confidential Personal Information may result in immediate and
irreparable injury to Sears for which monetary damages may not be
adequate, in the event Home Director or any officer, director,
employee, agent or subcontractor of Home Director uses or discloses or
in Sears sole opinion, any such Party is likely to use or disclose the
11
Confidential Personal Information in breach of Home Director's
obligations under this Agreement, Sears shall be entitled to equitable
relief, including temporary and permanent injunctive relief and
specific performance. Sears shall also be entitled to the recovery of
any pecuniary gain realized by Home Director from the unauthorized use
or disclosure of the Confidential Personal Information.
13. ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
Parties and their successors and assigns; provided, however, no
assignment with respect to this Agreement, by either Party (except by
Sears to a Sears affiliate or subsidiary) shall be of any force except
with the prior written consent of the other Party, which consent shall
not be unreasonably withheld.
14. NOTICES
All notices required or permitted to be given by one Party to the other
under this Agreement shall be sufficient if sent by either certified
mail, return receipt requested, facsimile or hand delivery to the
Parties at the respective addresses set forth below or to such other
address as the Party to receive the notice has designated by notice to
the other Party:
If to Sears: Sears, Xxxxxxx and Co.
0000 Xxxxxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Executive Vice President/Product Repair
With a copy to: Sears Law Department
0000 Xxxxxxx Xxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Vice President-Deputy General
Counsel/Services
If to Home Director Inc: 0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: President/COO
With a copy to: Xxxxxxx Xxxxxx
Home Director Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
All notices shall be effective (i) when delivered personally, (ii) five
(5) days after deposit in mail, (iii) the business day when delivered
by a nationally recognized courier, or (iv) the business day on which
facsimile transmittal is complete before 4 p.m., provided transmission
is followed by the notice requirements above. Parties may change
address, etc., by giving notice of change, provided that such notice is
effective only on receipt.
12
15. ALTERNATIVE DISPUTE RESOLUTION
(a) No Party shall bring a civil action seeking enforcement of any
other remedy founded on this Agreement without first complying with the
terms set forth in this Section 15 however, any Party may seek
injunctive relief to preserve the status quo pending the completion of
mediation under this Agreement. In the event that a Dispute arises
relating to this Agreement that a Party believes cannot be resolved
through negotiation, with the exception of disputes related to Section
5.1 above, the Parties shall attempt in good faith to resolve any
dispute ("DISPUTE") arising out of or relating to breach, termination
or validity of this Agreement, as follows:
(i) Either Party may demand mediation by notifying the other
Party in writing. Within seven (7) days of receipt of the notification
by the receiving Party, the Parties shall mutually agree upon a
Mediator. The Party demanding the mediation shall notify the Mediator
in writing with a copy to the other Party. The notification will state
with specificity the nature of the Dispute. The parties shall equally
share the fees of the Mediator.
(ii) Upon receipt of the mediation demand, the Mediator will
immediately convene a pre-meditation telephone conference of those
parties it believes are involved in the Dispute. All representatives
shall make themselves available for such a conference within two (2)
business days of being contracted by the Mediator.
(c) During the pre-mediation telephone conference, the Parties will
agree on mediation procedures, or in the event they cannot agree, the
Mediator will set mediation procedures.
(d) The mediation procedures will provide for the mediation to be
completed within thirty (30) business days of the initial demand for
mediation. All interested Parties will participate in good faith in the
mediation, and will make best efforts to reach a resolution within the
30-day time period. In particular, each interested Party will make
available in a timely fashion a representative with authority to
resolve the dispute.
(e) In the event that the dispute has not been resolved within thirty
(30) business days after the mediation, the mediation may continue if
interested Parties so desire.
(f) In the event hat the mediation continues beyond thirty (30) days,
but is not resolved within what the Mediator believes is a reasonable
time thereafter, the Mediator will so notify the Parties, and declare
the mediation terminated.
16. MISCELLANEOUS
16.1 GOVERNING LAW. The rights and duties of the Parties will
be governed by the local law of the State of Illinois, excluding any
choice-of-law rules that would require the application of the laws of
any other jurisdiction.
16.2 SEVERABILITY. If any covenant set forth in this Agreement is
determined by any court to be unenforceable, the invalidity or
unenforceability of any particular provision of this Agreement shall
not affect the other provisions hereof, which shall continue in full
force and effect.
13
16.3 SUBCONTRACTORS. Home Director acknowledges that it is the
commitment of Sears to successfully bring minorities and women into the
American economic system by doing business with qualified minority and
women sources. In furtherance of Sears aforesaid commitment, if Home
Director utilizes the services of subcontractors, Home Director shall
use reasonable efforts to utilize subcontractors that are qualified
minority-owned and/or woman-owned sources.
16.4 AMOUNT OF BUSINESS. No promises or representations whatsoever have
been made as to any potential business that Home Director can expect,
nor the potential number of purchase orders (as defined above), that
may be submitted, at any time during the term of this Agreement. Home
Director represents and warrants that it has not incurred and does not
intend to incur any expense for additional personnel, facilities or
Products in reliance upon or in anticipation of receiving any purchase
orders from Sears in anticipation of Home Directors performance
obligations under this Agreement. Home Director agrees that Sears shall
not be obligated for any expense incurred by Home Director in
connection with any increase in employees or for additional facilities
or Products.
16.5 NO WAIVER; CUMULATIVE REMEDIES. The failure of either Party to
insist, in any one or more instances, upon the performance of any of
the terms, covenants, or conditions of this Agreement or to exercise
any right hereunder, shall not be construed as a waiver or
relinquishment of the future performance of any rights, and the
obligations of the Party with respect to such future performance shall
continue in full force and effect. All remedies provided for in this
Agreement shall be cumulative and in addition to and not in lieu of any
other remedies available to either Party at law, in equity or
otherwise.
16.6 ENTIRE AGREEMENT. This Agreement, together with all Exhibits
attached hereto, constitutes the complete, final and exclusive
statement of the terms of this Agreement among the Parties pertaining
to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions of the Parties. No
modification or rescission of this Agreement shall be binding unless
executed in writing by the Party to be bound thereby. Notwithstanding
the foregoing, if the Parties have executed an agreement of
confidentiality or nondisclosure agreement (the "NDA") prior to or
contemporaneously with this Agreement, the provisions of the NDA shall
remain in force, except to the extent that the terms and conditions of
this Agreement shall impose stricter requirements or standards, in
which case the stricter terms and conditions of this Agreement shall
control each Parties duties and obligations to maintain and protect
their respective Confidential Information.
16.7 INTERPRETATION. The Article and Section headings of this Agreement
are for convenience only and shall not be deemed part of this
Agreement. As used herein, "include" and its derivatives (including,
"e.g.") shall be deemed to mean "including but not limited to".
14
16.8 SURVIVAL. The following provisions shall survive termination of
this Agreement: Parts (Section 2.3); Termination (Section 5);
Intellectual Property Rights (Section 6); Reports and Audits (Section
7); Indemnification (Section 8); Warranty (Section 9); Insurance
(Section 10); Confidentiality and Publicity (Section 12); Alternative
Dispute Resolution (Section 15); and Miscellaneous (Section 16).
IN WITNESS WHEREOF, Sears and Home Director have caused this Agreement to be
executed by persons duly authorized as of the date of first above stated.
SEARS, XXXXXXX AND CO. HOME DIRECTOR INC.
/s/ Xxxx Xxxxxx /s/ Xxxxxx Xxxxxx
By: ________________________ By: ______________________
Xxxx Xxxxxx Xxxxxx Xxxxxx
Name: ______________________ Name: ____________________
Title: _____________________ Title: ___________________
15
EXHIBIT A
DEFINITION OF PRODUCTS
PRODUCTS
(HOME NETWORKING SYSTEMS):
The Home Networking System utilizes several independent systems and dozens of
individual products including the distribution of voice, video, data, audio, and
control signals that link the independent systems and appliances so they can
work together and be controlled from other sources in order to improve comfort,
safety and convenience in a customers home. Examples include structured wiring,
wireless LAN, telephone and intercom systems, alarm systems, home theater and
multi - room music systems, HVAC & lighting control.
Home Networking Systems are divided into these 6 major categories:
o VOICE AND DATA COMMUNICATION
o Wired and wireless Home LAN
o Intercom systems
o Multi-line phone systems
o Door Phones
o AUDIO/VIDEO ENTERTAINMENT
o Home theater
o Whole-house audio/video systems
o Indoor and Outdoor multi-room/multi-zone speakers
o SECURITY AND ACCESS CONTROL
o Alarm systems
o Electronic gates & door locks
o Surveillance camera systems
o HOME CONTROL
>> Environmental Control and Energy Management
o HVAC (Heating, Ventilating and Air Conditioning) control
o Power line conditioning
o Water management
>> Central Vacuum and Attachments
16
>> Lighting and Window Treatments
o Drapery Control
o Lighting Control
>> Control Overlay Systems
o Controller/Processors
o Keypads
o Touch Pads & Touch Panels
o SERVICE & SUBSCRIPTIONS
o Extended Warranties & Service Agreements
o Security Monitoring Services
o Telco Services
o ISP Services
o Cable TV Services
o Satellite Services
o Fixed Wireless Services
o Utility Services
o MISCELLANEOUS
o Rough-in cans
o Model specific trim kits (including but not limited to modules,
routers, modems, hard drives, outlets and plates)
17
EXHIBIT B
HOME NETWORKING AND PROPOSAL AND RELEVANT DEFINITIONS
1. STANDARD INSTALLATION:
The installation of all items identified as "Standard" according to the
specifications listed in the Home Networking Proposal. For example, the items to
be installed in each home as a standard feature.
2. UPGRADE INSTALLATION:
The installation of all items selected by the homeowner or builder as an
"Upgrade" to the standard installation according to the specifications listed in
the builder Home Networking Proposal.
3. CHANGE OF SPECIFICATION ("COS") FORM:
Work requested in addition to or different from the Standard or Upgrade
Installation, which describes the additional work and additional expenses to the
customer including the method.
18
EXHIBIT C
INVOICE EXAMPLE
ABC Builder Date Submitted
for Payment
000 Xxxx Xxxxxx
Xxxxxxx, XXX 00000 Date:__________________
(111) 111-1111 Purchase Order (Lot # )
To: Sears Unit #5556 Deliver To: (Blank)
0000 Xxxxxxx Xxxx Project: (Location in Development) i.e. XXX00 XX 00
Xxxxxx Xxxx, Xx 00000 Lot: (Lot & Block numbers) i.e.; 001/Q8
Attention: Connected Home Payment Specialist Permit No: (Permit # on Master Permit)
Plan: (Name of floor plan) i.e. St. Marks 3/2.5 2 Story Super: (Super's First Name)
Elevation: (Number of correct elevation floor plan) i.e. 1R Rep: (Design Consultant's Name)
Square Footage: (Square footage of home) i.e. 2,135 sf.
-----------------------------------------------------------------------------------------------------------------------------------
APPROVED DRAW
FOR PAYMENT:
COMPLETE: AMOUNT
(Builder (Lot #) i.e. Lot/B1 001 08 LDR10 FL 65
Invoice)
(Description of Installation) i.e. Structured Wiring/Panel
_______ _______ (date w/integrator initials.) ( P.O.#-Draw) i.e. 480387 Draw 1-Rough i.e.$000.00
_______ _______ (date w/integrator initials.) (P.O. # Draw) i.e. 48037 Draw 2 -Final i.e.$000.00
BASE CONTRACT AMOUNT:. sum of rough & final i.e $000.00
---------------------------------------------------------------------------------------------------------------------
COLORS/UPGRADES/CREDITS
(Installation information on standard installation provided by builder and
installation that is considered an upgrade to the standard package. )
----------------------------------------------------------------------------------------------------------------------------
i.e. standard: COMM SOL Starter Package i.e. $000.00
-----------------------------------------------------------------------------------------------------------------------------
i.e custom: Move the counter top electrical and quad to the standard height. i.e. $000.00
----------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL: Sum of Rough, Final, Comm SOL starter Pkg, Custom i.e. $0,000.00
----------------------------------------------------------------------------------------------------------------------------
This purchase order is subject to all terms and conditions of the Subcontract
Agreement by and between Subcontractor and Contractor for this project. A
complete and notarized release of lien form must be attached when submitted for
payment.
* All items, in parentheses, on this page are required to be completed.
19
