Exhibit 10.1
CONFIDENTIAL TREATMENT REQUESTED
Portions of this exhibits indicated by "[**]" have been omitted pursuant to a
request for confidential treatment and such omitted portions have been filed
separately with the Securities and Exchange Commission.
SUPPLY AGREEMENT
This Supply Agreement (this "Agreement") is entered into as of
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October 27, 2007 by and between Secured Digital Applications, Inc., a Delaware
corporation ("Supplier"), having its principal place of business at No. 11,
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Xxxxx 00X/000, 00000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx (telecopy no. (603)
79578310; email address: xxxxxxx.xxxx@xxxxxxxxxxx.xxx) and Xxxxxxx Consulting
Inc., a Tennessee corporation ("Buyer"), having its principal place of business
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at 0000 Xxxxxxxxx Xxxx, Xxxxxxx XX 00000, XXX (telecopy no. 901-373 4280; email
address: xxxxx00000@xxx.xxx).
RECITALS
WHEREAS, Supplier desires to sell and Buyer desires to purchase [**]
units of Supplier's EYSTAR-SOS-01 personal and vehicle tracker with the
technical specifications set forth in Attachment 1 (the "Product") on the terms
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and conditions as set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Supplier and Buyer agree as
follows:
TERMS
1. Product; Product Quantity
1.1 Supplier agrees to sell to Buyer, and Buyer agrees to buy from
Supplier, up to [**] units of the Product upon the terms set forth in
this Agreement. Within 30 days of this Agreement, Buyer will order a
minimum of [**] units of the Product from Supplier. Thereafter, the
remaining [**] units will be purchased over a period of 10 months
following the date hereof upon a mutually agreeable timeframe
determined within 30 days following the date hereof.
2. Purchase Orders; Pricing and Minimum Orders; Payment Terms; Security
Interest
2.1 Purchase Orders. Purchases of the Product hereunder shall be made by
delivery to Supplier of Buyer's written purchase order by fax or email
signed by an authorized agent of Buyer specifying in reasonable detail
the quantity and delivery date of the number of units of the Product
ordered. Subject to the terms of Section 2.3, Supplier shall
acknowledge a purchase order within five business days of receipt of
the same and shall use reasonable efforts to ship the number of units
of the Product ordered to Buyer within 30 days of the Supplier's
acknowledgment of Buyer's order. Partial shipment of reasonable
quantities is agreed to by both parties. If the ordered quantity
exceeds Supplier's inventory, Supplier shall allocate available
inventory among its customers, on a basis Supplier deems equitable in
its reasonable discretion.
2.2 Pricing. The price for the Product is shown in Attachment 2.
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2.3 Payment Terms. The purchase price shall be paid in U.S. dollars by
irrevocable letter of credit with the HSBC Bank USA, 000 Xxxxx Xxxxxx,
Xxx Xxxx, XX 00000, which letter of credit shall be in form and
substance satisfactory to Supplier. The letter of credit shall be
established (and supplemented from time to time as necessary) in the
amount of the total purchase price for orders placed with Supplier in
accordance with Sections 1.1 and 2.2. Prior to making any valid
purchase order with Supplier, the amount of the letter of credit must
cover the full amount of such purchase order and any outstanding but
unpaid purchase orders. Supplier shall have the sole right and
authority to apply the letter of credit and make deductions therefrom
for the payment of the purchase price for the Product simultaneous
with Supplier's instructions to its manufacturer to commence the
manufacture of such Product. The making of any deductions from
payments by Buyer to Supplier without Supplier's prior authorization
for such deduction as evidenced by a valid credit memorandum shall be
grounds for immediate cessation of further shipments to Buyer and/or
termination of this Agreement by Supplier without liability to
Supplier therefor.
3. Shipment Term; Acceptance and Rejection; Credits; Loss of Shipment
3.1 Shipment Term. Supplier shall ship the Product via the shipping
method, freight carrier and to the designated delivery point as
designated in Buyer's purchase order. All products will be shipped
Free On Board, (INCOTERMS 0000), Xxxx xx Xxxxxxxxx, Xxxxxx.
3.2 Acceptance and Rejection. Buyer shall inspect all units of the Product
promptly upon receipt thereof to determine if any unit fails in any
material respect to meet the specifications set forth in Attachment 1.
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Buyer shall notify Supplier in writing within five days after receipt
of any defective or damaged unit (a "Defective Unit"). Defective Units
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not rejected by Buyer within five business days after receipt by
Buyer, shall be deemed accepted by Buyer. Upon notification of
rejection of any Defective Unit, Supplier will replace defective or
nonfunctional parts. Supplier shall issue to Buyer a Return Material
Authorization number (a "RMA") for any Defective Unit properly
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rejected pursuant to the terms of this Section 3.2 (a "Rightfully
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Rejected Unit") within five days of receiving a request therefor.
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Supplier shall pay all shipping and handling costs for shipment of any
Rightfully Rejected Unit and any replacement thereof. This Section 3.2
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does not apply to products damaged by the freight carrier, accident,
alteration or abuse. The title and risk of loss for any Rightfully
Rejected Unit or replacement thereof shall pass upon receipt thereof
of a party at such party's business location. If Buyer refuses or
rejects units of the Products that meet the specifications set forth
in Attachment 1 and that are not defective or damaged ("Conforming
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Units"), then Buyer shall pay all shipping and handling costs for
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shipment of any Conforming Units from Buyer to Supplier and shall
immediately pay to Supplier a sum equal to 20% of the purchase order
price as a restocking fee. All Rightfully Rejected Units and
Conforming Units returned by Buyer to Supplier shall be returned in
the original packaging or in packaging adequate to protect such units.
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3.3 Credits. The amount of the credit for any returned unit of the Product
shall be equal to the original purchase price charged to Buyer less
any credit granted pursuant to this Agreement. Any approved credits
shall first be applied by Supplier to any amounts Buyer owes to
Supplier. In the event that any amount of credit remains thereafter,
Supplier shall, upon Buyer's request, promptly pay to Buyer the amount
of the remaining credit. Supplier shall not accept any debit memos
issued to Supplier by Buyer unless expressly authorized in writing by
Supplier. Buyer shall not be entitled to any credit taken pursuant to
any unauthorized debit memo issued by Buyer.
3.4 Loss of Shipment. Supplier and Buyer shall cooperate to recover lost
shipment and/or insurance proceeds from carrier where applicable.
4. Limitation of Liability and Warranty
4.1 Limitation of Liability. The warranty set forth in this Section 4 and
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the obligations and liabilities hereunder are in lieu of any other
expressed or implied warranties, whether written or oral, including
warranties of merchantability and fitness for a particular purpose.
The warranty set forth in this Section 4 shall be the sole and
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exclusive remedy of Buyer. SUPPLIER SHALL NOT BE LIABLE TO BUYER, TO
ITS CUSTOMERS OR ANY OTHER PERSON FOR ANY INJURY OR DAMAGE TO PERSONS
OR PROPERTY, OR FOR ANY LOSS OF OR INJURY TO BUSINESS, EARNINGS,
PROFITS OR GOODWILL SUFFERED BY ANY PERSON, INCLUDING BUYER AND ITS
CUSTOMERS, CAUSED DIRECTLY OR INDIRECTLY BY ANY UNITS OF THE PRODUCT
PURCHASED PURSUANT TO THIS AGREEMENT. IN NO EVENT SHALL SUPPLIER BE
LIABLE FOR ANY CONSEQUENTIAL, INDIRECT (INCLUDING LOST PROFITS) OR
PUNITIVE DAMAGES SUFFERED BY BUYER, ITS CUSTOMERS OR ANY OTHER PARTY,
EVEN IF SUPPLIER SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF THE
SAME.
4.2 Warranty. The only warranty made by Supplier with respect to the units
of the Product supplied is a warranty that such units shall be in full
working order and free from material defects in material, workmanship
and design under normal use and service for a period of 12 months
measured from the date of receipt by Buyer or its designated addressee
at Buyer's or such addressee's business location as specified in a
purchase order. Supplier's obligation under this warranty shall be
limited to the repair or exchange at Supplier's plant of any defective
parts or whole unit of the Product which, after Supplier's examination
and to its satisfaction, is found to be materially defective. This
warranty shall not apply to any unit of the Product which has been
subject to accident, alteration or abuse or if damage is due to the
acts or omissions of Buyer or any party to whom Buyer has sold or
delivered such unit. The warranty does not cover expendable component
parts such as media and the like. On the terms set forth in this
Section 4.2, Supplier warrants any repair or exchange made pursuant to
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this Section 4.2 for the longer of three months following the date
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Supplier shipped the repaired or exchanged unit to Buyer or the party
to whom Buyer has sold or delivered such unit, or the balance of the
original 12-month warranty period. Buyer shall be responsible for all
costs associated with de-installing defective units and installing
repaired or replacement units.
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4.3 Out of Warranty. Out of warranty, defective units of the Product
returned by Buyer to Supplier must be returned in the same manner
described above and are subject to Supplier standard out-of-warranty
terms, conditions and pricing in effect at the time of return.
4.4 Indemnification by Buyer. Buyer shall not make any representation
about the Product not authorized by Supplier. Buyer agrees to
indemnify and hold Supplier and its officers, directors, employees and
agents harmless from any losses, damages, costs and expenses
(including attorney's fees and costs) or other liability arising from
claims by any other party resulting from Buyer' representation of the
Products in a manner inconsistent with Supplier Product descriptions
and warranties.
5. Sales Efforts; Technical Support and Training; Integration Services;
Sales Data
5.1 Sales Efforts. Buyer agrees to use its commercially reasonable efforts
to sell and support the Product. Supplier will, at its own cost,
provide personnel to assist Buyer to promote the Product at road shows
and tradeshows that Buyer will be participating, including the
National Automotive Dealers Association Convention and Expo in San
Francisco, CA scheduled on February 8, 2008.
5.2 Technical Support and Training. Supplier shall promptly answer
questions and provide remote assistance (via telephone or email) to
Buyer in connection with the installation, operation, maintenance and
troubleshooting of the Product. Any personnel or other on-site
training requested by Buyer shall be conducted at Buyer's business
location in Memphis, Tennessee, USA. Supplier shall arrange to send
its engineer to Memphis to assist in the installation, training and
troubleshooting of the Product up to a maximum of 45 calendar days
provided that such visits to Memphis shall be limited to two (2) trips
per year from Supplier's home office in Malaysia. Buyer shall, at its
own cost, provide local transportation and assistance to Supplier's
engineer. Supplier shall bear the costs and expenses associated with
such personnel and on-site training, such as salaries, airfare, living
and other expenses excluding local transportation cost.
5.3 Integration Services. Supplier shall provide to Buyer such integration
service as Buyer requests. Buyer shall pay any and all costs for such
services or any equipment needed therefor. In addition, Buyer shall
promptly reimburse Supplier for all of Supplier's costs and expenses
associated with Supplier's personnel providing such services, such as
salaries and transportation, living and other expenses.
6. Governmental Approvals
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6.1 Notification of Necessary Governmental Approvals. Buyer shall notify
Supplier in writing about any franchise, consent, license, marketing
right, permit, authorization, approval or other operating authority
("Governmental Approval") that from time to time may be required by
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any Governmental Authority. For purposes of this Section 6.1,
"Governmental Authority" means any (i) state, commonwealth, province,
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territory, county, municipality, district or other jurisdiction of any
nature, or any political subdivision thereof, (ii) federal, state,
local, municipal or other government, or (iii) governmental or
quasi-governmental authority of any nature (including any governmental
division, department, bureau, agency, commission, instrumentality,
official, organization, body or other entity and any court, arbitrator
or other tribunal).
6.2 Supplier Cooperation. Supplier shall assist Buyer, at Buyer's
expenses, to obtain any required Governmental Approval and shall
provide such assistance within 10 business days of receiving a written
request therefor from Buyer. All costs and expenses associated with
obtaining Governmental Approvals shall be borne by Buyer.
7. General Provisions.
7.1 Notices. Notices under this Agreement shall be sufficient only if
personally delivered, delivered by telecopy, email, delivered by a
major commercial rapid delivery courier service or mailed by certified
or registered mail, return receipt requested to a party at its address
and telecopy number first set forth herein or as amended by notice
pursuant to this subsection. If not received sooner, notice by mail
shall be deemed received five days after deposit in the U.S. mail.
Notice by telecopy and by a major commercial rapid delivery courier
service shall be deemed received on the next business day. All
telecopy and email notices must be followed by written notice, sent
within three business days.
7.2 Non-Solicitation of Personnel. Buyer agrees not to engage in any
attempt whatsoever, to hire, or to engage as independent contractors,
Supplier's employees or independent contractors during the term of
this Agreement and for a period of two years following expiration or
termination of this Agreement except as may be mutually agreed in
writing.
7.3 Taxes, Duties and Import and Licenses. All prices described herein are
exclusive of federal, state and local excise, sales, use and similar
taxes. Buyer shall be solely responsible for paying any applicable
federal, state, municipal or other government taxes, all custom
duties, imports and similar charges and all personal property taxes
assessable on the shipped products and any other taxes of any sort
Buyer may be liable for. Buyer shall provide to Supplier copies of all
applicable sales tax exception certificates that apply to Buyer. Buyer
shall obtain, at Buyer's cost, all necessary import licenses and
permits.
7.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the U.S. State of Colorado,
without giving effect to any choice of law or conflict of law
provision or rule (whether of the U.S. State of Colorado or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the U.S. State of Colorado.
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7.5 Additional Covenants. Buyer will: (i) conduct business in a manner
that will enhance the image and reputation of Supplier and the
Product; (ii) comply with applicable laws and regulations and avoid
deceptive, misleading, unethical or other illegal practices; (iii)
make no representations, warranties or guarantees to anyone with
respect to the Products that are inconsistent with those made by
Supplier; and (iv) not sell the Product to any individual,
corporation, entity, agency or other party residing outside the USA or
to any individual, corporation, entity, agency or other party for
sale, distribution, transfer, export or other disposition outside the
USA.
7.6 Publicity. The terms of this Agreement shall be treated by Buyer and
by Supplier as each treats its own confidential information and no
press release or other like publicity regarding this Agreement may be
made without the other party's approval, which approval will not be
unreasonably withheld or delayed, except as required by law or legal
process.
7.7 Proprietary Rights. Supplier shall retain all of its rights or title
to and ownership of all copyrights, trademarks, trace secrets,
patents, mask works and all other intellectual property embodied in
the Product including any improvements or enhancements to the Product.
Buyer has no right, title or interest in the Product or any
intellectual property relating to the Product and shall not copy,
reproduce, reverse engineer, decompile, disassemble or otherwise use,
in whole or in part, the Product. All units of the Product sold by
Buyer shall be distributed only in the form shipped by Supplier, and
Buyer shall not alter, modify or change the Product. Notwithstanding
the foregoing, solely for purposes of carrying out its rights and
obligations under this Agreement, Supplier grants to Buyer a limited,
non-exclusive, non-transferable, revocable license to sell the
Product, including all intellectual property contained therein.
7.8 Force Majeure. Supplier shall not be liable to Buyer for Supplier's
failure to perform any of its obligations hereunder during any period
in which such performance is delayed by circumstances beyond its
reasonable control, including, but not limited to earthquake, fire,
flood, war, embargo, strike, riot, inability to secure materials or
transportation facilities, or the intervention of any Government
Authority.
7.9 Severability. In the event that any provision of this Agreement, or
the application of such provision to any party hereto or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to any party hereto or circumstances
other than those as to which it is determined to be invalid, unlawful,
void or unenforceable, shall not be affected and shall continue to be
valid and enforceable to the fullest extent permitted by law.
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7.10 Entire Agreement. This Agreement constitutes the entire Agreement
between the parties and supersedes any and all prior contemporaneous
oral or written understandings and agreements as to the subject matter
thereof. This Agreement may be amended only by written amendment fully
signed by authorized representatives of both parties. All terms,
conditions, or provisions, which may appear as pre-printed language or
otherwise be inserted within any purchase order, for any products
shall be of no force and effect.
7.11 No Agency, No Joint Venture - Independent Contractors. Both parties
shall act as independent contractors under the terms of this
Agreement. Neither party is, nor shall be deemed to be, an employee,
agent, co-venturer or legal representative of the other party for any
purpose. Neither party shall be entitled to enter into any contract in
the name of or on behalf of the other party, nor shall either party be
entitled to pledge the credit of the other party in any way or hold
itself out as having authority to do so.
7.12 Assignment. Except for assignments and delegations to the acquiring
company or entity in connection with a disposition of substantially
all the assets or business of a party (whether by merger, sale or
otherwise), any attempted assignment of the rights or delegation of
the duties under this Agreement will be void without the prior written
consent of the non-assigning or non-delegating party.
7.13 Interpretation. Each party hereto acknowledges that it has
participated in the drafting of this Agreement, and any applicable
rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be applied in connection with the
construction or interpretation of this Agreement.
7.14 Confidential Information. The parties acknowledge and agree that the
terms of the Non-Disclosure Agreement dated August 21, 2007 between
the parties applies to all confidential information, including all
trade secrets, proprietary data or other confidential material,
learned or received by the parties in connection with the transactions
contemplated by this Agreement.
7.15 Counterpart. This Agreement may be executed in any number of
counterpart originals, each of which shall be deemed an original
instrument for all purposes, but all of which shall comprise one and
the same instrument. This Agreement may be delivered by facsimile and
a facsimile of this Agreement shall be binding as an original.
SECURED DIGITAL APPLICATIONS, INC. XXXXXXX CONSULTING INC.
By: /s/ Xxxxxxx Soon-Xxxx Xxx By: /s/ Xxx Xxxxxxx
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Title: Chairman & Chief Executive Title: Vice President
Officer
Date: October 27, 2007 Date: October 27, 2007
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ATTACHMENT 1
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EYSTAR SOS-01 Technical Specifications
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Weight 80 grams (battery included)
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Dimensions 79.50 x 47.50 x 25.00 (mm)
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EGSM900: TX880-915MHz, RX 925-960MHz
DCS1800: TX 1710-1785MHz, RX 1805-1880MHz
Bandwidth GSM850: TX824-849MHz, RX 869-894MHz
GSM1900: TX1850-1910MHz, RX 1930-1990MHz
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Maximum EGSM900, GSM850: 33 dBm(2W)
RF Output Power GSM1800, GSM1900: 30 dBm(1W)
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Resistance 50_
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Transmission Speed Circuit switched 4.8/ 9.6 kbps
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GPS Module SiRF Star III
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Frequency L1, 1575.42mhz
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Channels 20
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Position Accuracy 10 meters CEP without SA
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Speed Accuracy 0.1 meters/second, without SA
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Coordinate System WGS-84
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Hot Start < 6 Seconds average
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Warm Start < 38 Seconds average
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Cold Start < 60 Seconds average
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Speed Max. 515meters / second _1000 knots_
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Buttons 6 Buttons: Answer, Quick Dial * 2, Park, SOS, Power
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LED 5 LED: Charging, GPS, GSM, Park, SOS
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USB Mini USB PORT for charge and connect to PC.
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Working Voltage Rechargeable Li-ion battery3.7V 1000mAh ,5 V Input
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Standby Mode 12 hours
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Operating Mode 8 hours
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Housing Plastic
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Operation Temperature -20(degree)C to +55(degree)C
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Storage Temperature -30(degree)C to +70(degree)C
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Humidity 0~95%, non-condensing
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ATTACHMENT 2
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Price
Unit Price : US$[**]
Total Purchase Price for [**] Units : US$16,000,000.00
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