Schlumberger Associate Program Agreement CONFIDENTIAL Rev 6/98.D
SCLUMBERGER ASSOCIATE PROGRAM AGREEMENT
This Associate Program Agreement including the exhibits and addendum
attached hereto ("the Agreement") is made this 12th day of May, 1999 between
Schlumberger Malco, Inc. ("SCHLUMBERGER"), with offices located in Owings Mills,
Maryland and Accident Prevention Plus, Inc. with offices located in Hauppauge,
New York together with all subsidiary and affiliated companies which it now or
hereafter controls (hereinafter designated "ASSOCIATE").
WHEREAS, SCHLUMBERGER is engaged in the business of designing,
manufacturing, selling and licensing certain Products as defined below;
WHEREAS, ASSOCIATE is engaged in the business of designing, developing,
selling/licensing and supporting Systems which use Products;
WHEREAS, SCHLUMBERGER and ASSOCIATE desire a mutually beneficial
relationship for the sale and/or licensing of Systems and Products to Customers
in the Market as defined below.
In consideration of the foregoing and the mutual promises of the
parties made herein SCHLUMBERGER and ASSOCIATE agree as follows:
1 DEFINITIONS
The following terms will have the meanings set forth herein:
1.1 "Systems" means computer software programs and hardware
designed, developed, licensed, supported or otherwise provided
to Customers by ASSOCIATE which use Products and/or Licensed
Programs.
1.2 "Products" means the SCHLUMBERGER products listed or described
on Exhibit A attached hereto and which may contain or utilize
Licensed Programs.
1.3 "Licensed Programs" means computer software or firmware
developed by or licensed to SCHLUMBERGER for use with
Products.
1.4 "Customers" means the entities listed on Exhibit B attached
hereto to which ASSOCIATE provides Systems that use Products
or Licensed Programs. SCHLUMBERGER will notify ASSOCIATE in
the event Customers contact SCHLUMBERGER directly for the
purpose of purchasing Products or Licensed Programs.
1.5 "Market" means the industry segment(s), application type(s)
and/or geographical area described on Exhibit B, attached
hereto.
1.6 "Strategic Associate", "Preferred Associate" and "Business
Associate" are the three Associate classifications contained
in the Associate Program. Each classification is expected to
purchase or cause the purchase of Products from SCHLUMBERGER
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annually and/or holds a position in the Market or within the
smart card industry at large as described on Exhibit F
attached hereto.
1.7 "Confidential Information" means the valuable confidential and
proprietary information of SCHLUMBERGER or ASSOCIATE.
1.8 "Disclosing Part_ is used to identify SCHLUMBERGER or
ASSOCIATE when either provides Confidential Information to the
other.
1.9 "Receiving Party" is used to identify either SCHLUMBERGER or
ASSOCIATE when either receives Confidential Information from
the other.
2 REPRESENTATIONS AND AGREEMENTS
2.1 ASSOCIATE's beginning classification is "BUSINESS" Associate
which will be reevaluated at least once each year by
SCHLUMBERGER based upon volume, joint activity, and level of
participation and modified, if deemed appropriate, at the sole
discretion of SCHLUMBERGER.
2.2 ASSOCIATE represents that it has the personnel and knowledge
needed to develop magnetic stripe and/or smart card
applications for the Market, including but not limited to
integrating Products into Systems, and/or selling,
distributing and supporting Products and Systems.
2.3 During the term of this Agreement, in consideration of
SCHLUMBERGER's sale/license of Products at discounted prices
and at its sole expense, ASSOCIATE will:
2.3.1 Use reasonable efforts to promote, advertise, market
and solicit the sales/licenses of Products which are
appropriate to the Market;
2.3.2 Use reasonable efforts to sell/sublicense Products to
Customers and provide appropriate levels of support;
2.3.3 Select and cause its appropriate employees to attend
and participate in one or more of the training
sessions which are offered from time to time by
SCHLUMBERGER. Training sessions are for the purpose
of instructing ASSOCIATE's employees in the technical
data and operation of Products plus information
important to the marketing and sale of Products.
ASSOCIATE will pay all transportation, lodging, meals
and other similar miscellaneous expenses of its
employees who attend training sessions, at no cost or
expense to Schlumberger. Schlumberger will provide
ASSOCIATE with advanced notification including a
brief description of the subject(s) covered and the
time and location of training sessions. SCHLUMBERGER
will pay all expenses for instructors, materials and
equipment needed for the training sessions at
SCHLUMBERGER's facility.
2.3.3.1 SCHLUMBERGER will provide ASSOCIATES with
one training coupon per training which can
be used to enroll its employees in
SCHLUMBERGER's training sessions free of
charge. A fee of $200 will be charged for
each additional attendee. Training coupons
are not valid for Cyberflex training. The
fee is subject to change at SCHLUMBERGER's
discretion.
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2.3.4 Meet on a quarterly basis to discuss sales
opportunities and for Products with SCHLUMBERGER.
2.3.5 To the extent that a forecast is available, every [3]
months, provide SCHLUMBERGER with an up-to-date
forecast of Products which are expected to be
purchased or sub-licensed by ASSOCIATE's customers
from SCHLUMBERGER or ASSOCIATE during the subsequent
12-month period of time. Data provided by ASSOCIATE
to meet this requirement will be considered
Confidential Information; Said forecast will not be
considered a commitment to purchase by the ASSOCIATE
but will be used by SCHLUMBERGER for production
planning purposes.
2.3.6 Meet all mutually agreed upon sales goals in the
Market;
2.3.7 Comply with all rules, regulations and laws
applicable to ASSOCIATE and its performance under
this Agreement;
2.3.8 Use reasonable efforts necessary to comply with the
terms of this Agreement.
2.4 During the term of this Agreement, SCHLUMBERGER will:
2.4.1 Provide ASSOCIATE with technical and sales training
sessions from time to time on Products designed and
intended to help ASSOCIATE sell Products to Customers
and to develop or use Products in Systems;
2.4.2 Provide ASSOCIATE with advanced notification on
selected new product releases planned by SCHLUMBERGER
in the Market;
2.4.3 Provide ASSOCIATE with appropriate levels of sales
and marketing support;
2.4.4 Provide Products to ASSOCIATE under the discounting
policy defined in Exhibit C;
2.4.5 Grant ASSOCIATE the right to use SCHLUMBERGER
Trademarks as defined herein and subject to the
provisions of Section 4, below;
2.4.6 Use reasonable efforts necessary to meet the terms of
this Agreement.
2.5 This Agreement is non-exclusive, however:
2.5.1 ASSOCIATE agrees to preferably present and/or propose
SCHLUMBERGER licensed Products to its Customers in
each case where Products meet the specifications,
price, time and delivery requirements of ASSOCIATE
and Customer;
2.5.2 SCHLUMBERGER will refer, without prejudice, potential
Customers to ASSOCIATES in good standing serving
their Market.
2.5.3 SCHLUMBERGER and ASSOCIATE agree that customers
referred by one party to the other will be proposed
exclusively products from SCHLUMBERGER and the
ASSOCIATE unless agreed otherwise.
2.6 ASSOCIATE and SCHLUMBERGER will meet at least once annually
during the term of this Agreement to review and modify the
exhibits attached hereto.
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3 SALES OF PRODUCTS
Two types of sales are covered by this Agreement: Sales of Products to
ASSOCIATE for resale with or without added value to Customers (VAR or
Value Added Reseller Sales) and Sales of Products Directly to Customer
(Direct Sales) on behalf of ASSOCIATE.
3.1 VAR SALES
3.1.1 In a VAR sales transaction (i) ASSOCIATE purchases
Products at a discounted price from SCHLUMBERGER
according to the terms and conditions contained
herein and resells them to Customers (ii) ASSOCIATE's
full and total compensation from SCHLUMBERGER is
contained in the discounted price (iii) ASSOCIATE
assumes liability for any Customer receivable and is
financially responsible to SCHLUMBERGER regardless of
Customer's payment status.
3.1.2 The sale of Products to ASSOCIATE for subsequent
resale to Customers will be made according to the
terms and conditions contained in this Agreement and
will take precedence over any other terms and
conditions which may appear on ASSOCIATE's purchase
order or any other document unless previously
accepted in writing by SCHLUMBERGER. Purchase orders
that were submitted to and accepted by SCHLUMBERGER
prior to this Agreement are excepted.
3.1.3 ASSOCIATE will submit purchase orders for the
purchase of Products to SCHLUMBERGER and SCHLUMBERGER
will not unreasonably withhold its acceptance of said
purchase orders.
3.1.4 SCHLUMBERGER will invoice ASSOCIATE for Products when
they ship provided that ASSOCIATE's creditworthiness
was established by SCHLUMBERGER in advance. If not so
established, payment will be made prior to shipment
or COD as determined by SCHLUMBERGER at the time
ASSOCIATE's purchase order is accepted.
3.1.5 Unless otherwise agreed to in advance, all ASSOCIATE
invoices are due and payable within thirty (30) days
from the date of invoice. For any amounts that are
unpaid after the due date, SCHLUMBERGER may without
prejudice to any other rights, either suspend
delivery to ASSOCIATE, ship Products on future
purchase orders COD, or terminate the contract,
and/or charge ASSOCIATE a finance charge of 1.5% per
month on the unpaid balance.
3.1.6 No payment due to SCHLUMBERGER will in any
circumstances be offset against any sum owed by
SCHLUMBERGER to ASSOCIATE whether in respect of the
present transaction or otherwise. No discount for
early payment is authorized. In the event any
proceeding is brought by or against ASSOCIATE under
any bankruptcy or insolvency laws, SCHLUMBERGER will
be entitled to cancel any purchase order then
outstanding and will receive reimbursement for
reasonable cancellation charges.
3.1.7 All prices are inclusive of United States of America
import duty (including brokerage fees) but exclusive
of any present or future sales, revenue, or excise
taxes, or other tax applicable to the Products or
services covered by ASSOCIATE's purchase order or the
manufacture or sale thereof. Such taxes, when
applicable, will be added to the invoice and will be
paid by ASSOCIATE unless ASSOCIATE provides
SCHLUMBERGER with the proper tax exemption
certificates.
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3.1.8 Unless different terms are agreed to in writing by
SCHLUMBERGER all deliveries of Products to ASSOCIATE,
or to a location specified by ASSOCIATE, will be made
FOB SCHLUMBERGER's designated shipping point, with
freight prepaid. Freight charges will be invoiced to
ASSOCIATE.
3.1.9 Risk of loss will pass to ASSOCIATE at the point of
shipment. SCHLUMBERGER's liability for shipment and
delivery of goods ceases upon delivery of products in
good condition to shipping company or common carrier
designated by ASSOCIATE or ASSOCIATE's representative
or employee. Goods placed in segregated inventory at
the request of ASSOCIATE will be deemed to have been
shipped and invoiced to ASSOCIATE at the time such
goods are placed into segregated inventory and
ASSOCIATE will be responsible for any loss thereto,
except for losses resulting from SCHLUMBERGER's gross
negligence.
3.1.10 All stipulated delivery or shipment dates are
estimates only. SCHLUMBERGER reserves the right to
make deliveries of products in installment.
Reasonable delays in delivery of any installment of
any one or more products will not relieve ASSOCIATE
of its obligation to accept and pay for the remaining
deliveries. The parties will jointly work together to
assume timely delivery schedules for the ultimate
customer, and such a delay and does not represent a
default by either party under this agreement.
3.1.11 Card quantities specified in purchase orders for
custom-manufactured cards are for uninterrupted
production and one shipment to one destination,
unless otherwise specified and agreed to in writing.
Quantity variations of plus or minus 10% will
constitute an acceptable delivery for
custom-manufactured cards and the excess or
deficiency will be billed proportionally.
3.1.12 If materials are furnished by ASSOCIATE to be
incorporated into manufactured products, a supply of
such materials including 10% in excess of the
quantity required to complete the ASSOCIATE's
purchase order will be furnished FOB to a location
designated by SCHLUMBERGER. SCHLUMBERGER accepts no
liability for storage of ASSOCIATE-supplied
materials.
3.1.13 ASSOCIATE will inspect and accept or reject goods
within fourteen (14) days from receipt or thirty (30)
days from shipment thereof, whichever is earlier. If
ASSOCIATE fails to notify SCHLUMBERGER in writing of
its rejection and the reason therefor within such
time period the ASSOCIATE will be deemed to have
accepted such shipment and waived any right to later
reject the goods.
3.1.14 ASSOCIATE's purchase orders may not be canceled,
suspended, changed or returned without written
consent of SCHLUMBERGER. Except for
custom-manufactured cards, Products that have not
been unpacked will be accepted for return handling
charge should be waived completely if product is in
its original packaging with a 15% handling charge, if
SCHLUMBERGER is notified in writing within 10 days
after receipt of shipment by ASSOCIATE.
Custom-manufactured cards cannot be returned.
3.1.15 If ASSOCIATE requests changes to the design,
specification, or quantity of Products after a
purchase order is accepted by SCHLUMBERGER and if
such changes are accepted by SCHLUMBERGER then
SCHLUMBERGER will prepare a revised quotation. If the
revisions are accepted by ASSOCIATE, the purchase
order will, if required, be amended accordingly.
3.1.16 Prices for custom-manufactured cards are based on
electronic delivery of artwork from ASSOCIATE.
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3.1.17 All four-color process designs require press proofs
and ASSOCIATE approval before starting a production
run. Press proofs for other processes are not
required and will not be submitted unless requested.
Charges for proofs are not included in quoted prices
unless specified and will be invoiced separately.
3.1.18 Colors will be matched within reasonable commercial
variations.
3.1.19 Regardless of any disclosure by ASSOCIATE to
SCHLUMBERGER of the contemplated ultimate destination
of the Products, ASSOCIATE will not export, directly
or indirectly, any product acquired hereunder (or the
"direct product" of any Licensed Programs) without
first obtaining an export license from the U.S.
Department of Commerce or other agency of the U.S.
Government, as required.
3.1.20 The prices offered to ASSOCIATE under this Agreement
are based on ASSOCIATE's representation that it will
develop or has developed applications for the Market,
will or has integrated appropriate Products into
Systems, and/or will sell, distribute and support
Products in the Market.
3.1.21 ASSOCIATE's failure to pay in a timely manner for
Products shipped to it and accepted will constitute a
breach of this Agreement.
3.1.22 With thirty (30) days advanced notification,
SCHLUMBERGER has the right from time to time to
change the price, terms and conditions upon which
ASSOCIATE may purchase Products.
3.1.22.1 Prior to the effective date of a price
increase, ASSOCIATE can submit purchase
orders for Products at the price in effect
before the increase if the requested
delivery date is within ninety (90) days
from the effective date of the price
increase and SCHLUMBERGER card manufacturing
capacity can accommodate said delivery.
3.1.22.2 Products shipped under purchase orders
submitted by ASSOCIATE and accepted by
SCHLUMBERGER prior to the notification date
of a price increase will be shipped and
invoiced at the price that was in effect
when the purchase order was accepted,
providing shipment occurs within ninety (90)
days from the effective date of the price
increase otherwise price will be revised to
new price.
3.1.22.3 Products shipped under purchase orders
submitted by ASSOCIATE and accepted by
SCHLUMBERGER prior to the effective date of
a price decrease will be shipped and
invoiced at the price in effect at the time
of shipment.
3.1.22.4 Purchase orders submitted by ASSOCIATE and
accepted by SCHLUMBERGER prior to the
effective date of changes to the terms and
conditions will be shipped under the terms
and conditions in effect when the purchase
orders were accepted.
3.1.23 SCHLUMBERGER, at its sole discretion, has the right
to discontinue the manufacture and/or sale of
Products covered by this Agreement with at least
ninety (90) days advanced written notification to
ASSOCIATE.
3.1.24 SCHLUMBERGER has the right to modify or change
Products and to add new products at any time.
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3.2 DIRECT SALES
3.2.1 In a Direct Sales transaction (i) ASSOCIATE obtains
Customer's purchase order for Products and forwards
it to SCHLUMBERGER according to the terms and
conditions contained herein (ii) ASSOCIATE's full and
total compensation from SCHLUMBERGER is a commission
based on the net sales amount after payment is
received from Customer (iii) SCHLUMBERGER assumes
liability for any Customer receivable. SCHLUMBERGER
and ASSOCIATE agree to put in place a formal referral
and tracking procedure to recognize the party
referring the Customer.
3.2.2 The sale of Products directly to Customers will be
made according to the terms and conditions contained
in this Agreement and will take precedence over any
terms and conditions which may appear on Customer's
purchase order or any other document unless
previously accepted in writing by SCHLUMBERGER.
Purchase orders that were submitted to and accepted
by SCHLUMBERGER prior to this Agreement are
excepted."
3.2.3 All purchase orders obtained by ASSOCIATE will be
promptly forwarded to a designated SCHLUMBERGER sales
office and will be subject to acceptance by
SCHLUMBERGER at designated factory or home offices
upon such terms, warranties, and conditions as will
be acceptable to SCHLUMBERGER in its sole discretion.
Without limiting the foregoing, ASSOCIATE will extend
no warranties or guarantees, orally or in writing,
respecting the performance, design, quality,
merchantability, or fitness for purpose of Products,
except such warranties or guarantees as have received
prior written approval by SCHLUMBERGER, and ASSOCIATE
will not promote, advertise, or offer Products upon
any terms, conditions, or prices except as have
received prior written approval by SCHLUMBERGER.
SCHLUMBERGER will have the right at any time and from
time to time, without notice, to change the terms,
conditions, and prices on which orders will be
accepted.
3.2.4 Prices quoted for Products will be in accordance with
the price lists established from time to time by
SCHLUMBERGER and furnished to ASSOCIATE.
3.2.5 ASSOCIATE will be entitled to receive sales
commissions ("Commissions") based on the cumulative
Net Sales of SCHLUMBERGER Products sold to Customers
during the term of this Agreement in accordance with
the provisions contained herein.
3.2.6 The Commissions payable to ASSOCIATE hereunder will
be calculated in accordance with the schedule set
forth in Exhibit G attached hereto, which schedule
may be changed at any time and from time to time by
SCHLUMBERGER upon thirty (30) days written notice of
such change to ASSOCIATE. Charged commissions shall
only apply to purchases initiated after the effective
date of the new Exhibit G and should be mutually
agreed to.
3.2.7 The term Net Sales as used herein will mean an amount
equal to the product obtained by multiplying the unit
price of each Product as shown on the customer
invoice by the number of such Products actually
shipped as determined from the shipping invoices,
less allowances for trade discounts, returns and
allowances, and charges for packaging, crating,
customs fees and duties, transportation, and
handling. The determination of Net Sales to any
Customer by SCHLUMBERGER will be conclusive.
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3.2.8 Net Sales will be credited to ASSOCIATE's account
only after Products have been shipped and invoiced
and such invoice has been paid by the Customer.
SCHLUMBERGER will have the exclusive right to
determine whether a purchase order or sales contract
will be accepted and, if so, the date on which
Products will be shipped to a Customer.
3.2.9 SCHLUMBERGER will have the right to debit ASSOCIATE's
account with all or any portion of the amount of any
Commissions paid or credited to ASSOCIATE which is
allocable to refunds or allowances given to the
Customer with respect to Products for any reason.
SCHLUMBERGER will have the exclusive right to
determine if and when the account of any Customer is
to be placed with a third party for collection.
3.2.10 All Commissions due and payable to ASSOCIATE
hereunder will be paid on or before the 25th day of
the month following the month in which payment is
received by SCHLUMBERGER for shipments previously
invoiced. At the time an original invoice is mailed
to a Customer, SCHLUMBERGER will provide ASSOCIATE
with a copy thereof.
3.2.11 Payment of all ASSOCIATE's costs and expenses will be
the sole responsibility of ASSOCIATE.
4 CONFIDENTIALITY
4.1 Both SCHLUMBERGER and ASSOCIATE acknowledge that during the
term of this Agreement, each party may become privy to the
Confidential Information of the other party, whether disclosed
in writing or obtained from the other party in any other
manner, which may include but not be limited to inventions,
proprietary developments, trade secrets, price lists, cost
data, marketing information, Customer data, and manufacturing
techniques. Each party acknowledges that all Confidential
Information is and will be the sole, exclusive and valuable
property of the Disclosing Party, and that any use of any of
the Confidential Information by the Receiving Party will be
solely in connection with the performances of its obligations
under this Agreement. The covenants of this Section will
survive any cancellation or termination of this Agreement as
provided herein.
4.2 Receiving Party will maintain in confidence Disclosing Party's
Confidential Information for three (3) years from the date of
disclosure, provided that (a) when the Confidential
Information is disclosed in written form it is clearly marked
with Disclosing Party's name and the words "confidential" or
"proprietary", or substantially equivalent words; or (b), if
the Confidential Information is disclosed orally or visually
it is summarized in writing or corporeal form and is clearly
marked with Disclosing Party's name and the words
"confidential" or "proprietary", or substantially equivalent
words, and delivered to Receiving Party within thirty (30)
days following each such disclosure.
4.3 For the period of time described in Subsection 4.2, the
Receiving Party will make no use of the Confidential
Information except as expressly permitted herein. The
Receiving Party will not make Confidential Information
available to third parties without the Disclosing Party's
prior written consent. Receiving Party may disclose the
Confidential Information only to its employees on a
need-to-know basis, and will maintain adequate internal
procedures to protect the Confidential Information from
unauthorized disclosure and use. Receiving Party will notify
its employees who use the Confidential Information of the
related obligations created by this Agreement and will use the
same degree of care to avoid unauthorized disclosure as it
employs with its own confidential and/or proprietary
information of like nature, but with no less than a reasonable
standard of care.
4.4 Disclosing Party makes no warranties either expressed or
implied as to the accuracy or fitness for a particular purpose
of the Confidential Information and will have no liability for
any damages whatsoever that may result from its use.
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4.5 Receiving Party will have no obligation for Confidential
Information that (a) is known to the Receiving Party prior to
the time of disclosure; (b) is independently developed by
Receiving Party without breaching this Agreement; (c) is
lawfully obtained from a third party without restriction on
use or disclosure; (d) is or becomes part of the public domain
through no fault of Receiving Party; (e) is disclosed with the
disclosing parties written consent; or (f) is disclosed
pursuant to any judicial or governmental requirement or order,
provided that Receiving Party takes reasonable steps to give
the Disclosing Party sufficient prior notice in order to
contest such requirement or order.
4.6 Receiving Party will not be liable for (a) inadvertent
disclosure or use of Confidential Information provided that it
uses at least the same degree of care in safeguarding the
proprietary information as it uses for its own proprietary
information of like importance, and upon discovery of the
inadvertent disclosure or use of the Confidential Information,
it will endeavor to prevent any further inadvertent disclosure
or use; and (b) unauthorized disclosure or use of Confidential
Information by persons who are or who have been in its employ,
unless it fails to safeguard it with at least the same degree
of care as it uses for its own proprietary information of like
importance.
4.7 Title to all tangible forms of the Confidential Information
and any copies thereof will be and remain with the Disclosing
Party. All Confidential Information and copies thereof will be
promptly returned to the Disclosing Party by the Receiving
Party upon written request, or destroyed at the Disclosing
Party's option.
4.8 The Receiving Party will not remove any proprietary copyright,
semiconductor chip protection, trade secret or other legend
("Proprietary Rights Legend") from any form of the
Confidential Information. The Receiving Party, when reasonably
possible and at the Disclosing Party's written request and
expense, will add to the Confidential Information any
Proprietary Rights Legend that Disclosing Party deems
necessary to protect its intellectual property rights.
4.9 Nothing contained in this Agreement will be construed as
granting or conferring by implication or otherwise, any rights
by license or otherwise, to any invention, discovery or
improvement made, conceived, or acquired prior to or after the
date of this Agreement.
5 TRADEMARKS
5.1 As used herein, the term "Trademarks" will mean and include
all trademarks, trade names, logos, and symbols respectively
owned, controlled, or adopted by SCHLUMBERGER or its
Affiliates, or ASSOCIATE or its Affiliates.
5.2 ASSOCIATE hereby grants to SCHLUMBERGER a limited license to
use the ASSOCIATE's Trademarks listed in Exhibit D attached
hereto solely for the purposes of promoting the sale or
license of Systems or Products, and SCHLUMBERGER hereby grants
to ASSOCIATE a limited license to use the SCHLUMBERGER
Trademarks listed in Exhibit D attached hereto solely for the
purposes of promoting the sale or license of Systems or
Products. Each party must submit documentation containing
usage of the other's Trademarks prior to distribution or
publication for approval by the owning party. These licenses
will terminate automatically upon termination or cancellation
of this Agreement.
5.3 Each party expressly acknowledges that the other party's
Trademarks are the exclusive property of the other party or
its Affiliates, and that all right, title, and interest in
such Trademarks remain in the name of the other party or its
Affiliates. Neither party will claim, obtain, or attempt to
obtain, nor be directly interested or concerned in claiming,
or attempting to obtain in any country during the continuance
of this Agreement or any time thereafter any right, title, or
interest by registration, use, or otherwise in or to any of
the other party's Trademarks, or confusingly similar or
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colorable imitations thereof, or by patent, utility model, or
otherwise in any design improvements or inventions embodied in
Products or ASSOCIATE's Systems or by copyright in or to any
copyrightable matter to be supplied under this Agreement. Upon
termination of this Agreement for whatever reason, the parties
will cease immediately use of any and all Trademarks of the
other party or copyrightable material supplied hereunder.
5.4 Each party will identify the other party's Products or Systems
in the advertising, offering for sale, lease or license, or
sale, lease, license thereof only with the trademarks, trade
names, logos, and symbols used by the owning party and will
not otherwise make use of the other party's Trademarks or any
confusingly similar or colorable imitation thereof, except as
may be expressly authorized in writing by the owning party.
5.5 Neither party will use without prior expressed written consent
of the other party any of the other party's Trademarks in its
corporate name or in the name of any subsidiary or related
corporation presently existing or which it may hereafter
organize, or as part of any trade name or business style or in
any other manner except as may be expressly authorized in
writing by the owning party, and in this event, such use will
cease of any such name or business style upon the termination
of this Agreement.
6 LICENSED PROGRAMS
6.1 SCHLUMBERGER hereby grants to ASSOCIATE during the term of
this Agreement a non-exclusive, non-transferable license to
use Licensed Programs (excluding source code) within the
Market for the term of this Agreement and any renewal term, in
accordance with the following terms:
6.1.1 ASSOCIATE will have the right to demonstrate the use
of Licensed Programs to customers interested in
purchasing, licensing or leasing Products from
ASSOCIATE;
6.1.2 ASSOCIATE will also be entitled to use Licensed
Programs to the extent required to fulfill its
maintenance and service responsibilities for Products
under this Agreement;
6.1.3 ASSOCIATE will not remove any copyright or
proprietary notice included in the Licensed Programs
or Confidential Information furnished to ASSOCIATE
and will reproduce all such notices on all copies in
any form, including revised, modified, or translated
versions made by ASSOCIATE, unless otherwise directed
by Schlumberger in writing;
6.1.4 ASSOCIATE will limit use and access of all Licensed
Programs provided by SCHLUMBERGER, and copies
thereof, to such of ASSOCIATE's employees as are
directly involved in the operation and maintenance of
the Products. ASSOCIATE will require its employees to
make no disclosure of Licensed Programs or copies
which are not directly connected with the operation
and maintenance of the Products.
6.2 SCHLUMBERGER may terminate the license granted by giving
ninety-(90) days prior written notice to ASSOCIATE, upon the
failure of ASSOCIATE to perform or observe any covenant,
condition or agreement to be performed or observed by it.
6.3 In the event of the termination of the license for any reason,
or the expiration or termination of this Agreement, and in
addition to any other rights or remedies available to
SCHLUMBERGER, ASSOCIATE will return to SCHLUMBERGER or destroy
at the discretion of SCHLUMBERGER the original and all copies,
including partial copies or modifications, of the Licensed
Programs, Proprietary Data, and related materials furnished by
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Schlumberger Associate Program Agreement CONFIDENTIAL Rev 6/98.D
SCHLUMBERGER and SCHLUMBERGER will return to ASSOCIATE or
destroy at the discretion of ASSOCIATE Proprietary Data, and
related materials furnished by ASSOCIATE.
6.4 SCHLUMBERGER grants to ASSOCIATE during the term of this
Agreement the right to provide sublicenses to Customers for
the purpose of using the Licensed Programs (excluding source
code) applicable to those Products purchased from ASSOCIATE by
such Customers. ASSOCIATE will provide SCHLUMBERGER with a
mutually acceptable sublicense agreement it will use with all
Customers who purchase/use Licensed Programs.
6.5 If software is acquired by or on behalf of a unit or agency of
the U.S. Government, this provision applies.
6.5.1 This software (i) was developed at private expense,
and no part of it was developed with Government
funds; (ii) is a trade secret of SCHLUMBERGER for all
purposes of the Freedom of Information Act; (iii) is
"commercial computer software" subject to limited
utilization as provided in the contract between the
vendor and the governmental entity; and (iv) in all
respects is proprietary data belonging solely to
SCHLUMBERGER. When regulations of the Department of
Defense (DOD) are applicable, this software is sold
only with "Restricted Rights" as that term is defined
in the DOD Supplement to the Federal Acquisition
Regulations, 52.227-7013. Use, duplication or
disclosure is subject to restrictions of the Rights
in Technical Data and Computer Software clause at
52.227-7013, Manufacturer: Schlumberger Malco, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
6.5.2 If this software was acquired under a GSA Schedule,
the Government has agreed to refrain from changing or
removing any insignia or lettering from the software
that is provided or from producing copies of manuals
or disks (except one hard disk copy and one backup or
archival copy) and (i) title to and ownership of this
software and related documentation and any
reproductions thereof will remain with SCHLUMBERGER;
(ii) use of this software and related documentation
will be limited to the facility for which it is
acquired; and (iii) if use of the software is
discontinued at the installation specified in the
purchase order and the Government desires to use it
at another location, it may do so by giving prior
notice to SCHLUMBERGER, specifying the type of
computer and new site's location.
7 WARRANTY
7.1 SCHLUMBERGER warrants that the Products and Licensed Programs
supplied with or incorporated in the Products furnished
hereunder will, under normal and proper use, be free from
defects in material and workmanship and will conform to
SCHLUMBERGER's applicable standard written specifications or,
if appropriate, to specifications accepted in writing by
SCHLUMBERGER, for a period of one (1) year from the date of
shipment to ASSOCIATE for terminals and readers and (180) one
hundred eighty days for cards.
7.2 These obligations apply to Products for which (i) written
notice of non-conformance is received before the expiration of
the warranty period; (ii) after SCHLUMBERGER's authorization,
are returned to SCHLUMBERGER's original U.S. shipping point,
freight charges prepaid; and (iii) after examination are
disclosed, to SCHLUMBERGER's satisfaction, to be
non-conforming. Any such repair or replacement will not extend
the. period within which such warranty can be asserted.
7.3 This warranty will not apply to Products or Licensed Programs
which have been subjected to operating and/or environmental
conditions in excess of the maximum values stated in the
applicable specifications or otherwise have been subjected to
misuse, tampering, neglect, improper installation, abnormal
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Schlumberger Associate Program Agreement CONFIDENTIAL Rev 6/98.D
stress, repair, modification, alteration, or damage. The
Licensed Program warranty is only valid for Products in which
it has been supplied by SCHLUMBERGER and neither the Licensed
Program nor Product has been modified in any way. THIS
WARRANTY MAY BE ASSERTED BY ASSOCIATE ONLY, NOT BY ASSOCIATE's
CUSTOMERS OR USERS OF THE ASSOCIATE'S PRODUCTS AND IS IN LIEU
OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY,
INCLUDING ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE OR MERCHANTABILITY, AND OF ALL OTHER OBLIGATIONS OR
LIABILITIES ON SCHLUMBERGER's PART. SCHLUMBERGER NEITHER
ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME FOR
SCHLUMBERGER ANY OTHER LIABILITIES IN CONNECTION WITH THE
SALES OF SAID PRODUCTS.
8 LIMITATION OF LIABILITY
8.1 Except as defined herein, ASSOCIATE's exclusive remedy and
SCHLUMBERGER's total liability for any and all losses and
damages from any cause whatsoever arising from or related to
this contract (whether such cause be based in contract,
negligence, strict liability, tort, or otherwise) will in no
event exceed the purchase price of the Products and Licensed
Programs in respect to which such cause arises.
8.2 In the event of proven fraudulent use of smart cards, or any
information contained thereon, or any errors resulting from
ASSOCIATE-furnished input data including initialization and
personalization information as a result of careless,
negligent, or felonious acts of an employee or agent of
SCHLUMBERGER, the maximum liability of SCHLUMBERGER will be
$500 per card or account involved, whichever is less, with a
maximum limit of $5000 per year of proven loss per ASSOCIATE.
SCHLUMBERGER will not be held liable for damages resulting
from the use of cards personalized by SCHLUMBERGER according
to inaccurate, incomplete or out-of-date requirements from
ASSOCIATE. IN NO EVENT WILL SCHLUMBERGER OR ASSOCIATE BE
LIABLE FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT OR PUNITIVE
DAMAGES OR DAMAGES FOR LOSS OF REVENUES, LOSS OF PRODUCT OR
LOSS OF DATA RESULTING FROM ANY SUCH CAUSE. SCHLUMBERGER MAY,
AT ITS SOLE OPTION, EITHER REPAIR OR REPLACE DEFECTIVE
PRODUCTS AND LICENSED PROGRAMS OR REFUND THE PURCHASE PRICE
PAID UPON RETURN OF PRODUCTS TO SCHLUMBERGER, AND WILL
THEREAFTER HAVE NO FURTHER OBLIGATION TO ASSOCIATE. THESE
LIMITATIONS WILL APPLY EVEN IF ANY LIMITED REMEDY FAILS IN ITS
ESSENTIAL PURPOSE.
9 FORCE MAJEURE
9.1 SCHLUMBERGER will not be liable to non-performance or delays
caused by acts of God, wars, riots, strikes, fires, shortages
of labor or materials, labor disputes, governmental
restrictions or any other causes beyond its reasonable
control.
9.2 In the event of any such excused delay or failure of
performance, the date of delivery will, at the request of
SCHLUMBERGER, be deferred for a period equal to time lost by
reason of the delay. SCHLUMBERGER will notify ASSOCIATE in
writing of any such event or circumstance within a reasonable
period after it learns of same.
10 PATENTS
10.1 ASSOCIATE will hold SCHLUMBERGER harmless against any expense
or loss resulting from infringement of any patent arising from
compliance with ASSOCIATE's designs, specification, or
instructions.
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Schlumberger Associate Program Agreement CONFIDENTIAL Rev 6/98.D
10.2 Except as provided in the preceding sentence, SCHLUMBERGER
will settle or defend any suit or proceeding brought against
ASSOCIATE insofar as based on a claim that any Product (or
part thereof) manufactured by SCHLUMBERGER and furnished under
this Agreement and not used in combination with other
products, whether or not furnished hereunder, constitutes a
direct infringement of any United States patent if notified
promptly in writing and given authority, information and
assistance (at SCHLUMBERGER's expense) for the settlement of
defense of same, and SCHLUMBERGER will pay the damages and
costs awarded therein against ASSOCIATE or agreed upon in such
settlement.
10.3 SCHLUMBERGER may (at its option and expense) either (i)
procure for ASSOCIATE the right to continue using said Product
or part, or (ii) furnish a non-infringing replacement, or
(iii) modify the Product so it becomes non-infringing or (iv)
refund the purchase price and transportation cost thereof upon
return authorized by SCHLUMBERGER. THE FOREGOING STATES THE
ENTIRE LIABILITY OF SCHLUMBERGER FOR PATENT INFRINGEMENT BY
SAID PRODUCTS OR ANY PART THEREOF.
11 RELATIONSHIP OF THE PARTIES
11.1 Nothing contained in this Agreement will be construed to
constitute that an ASSOCIATE is a partner, employee, agent, or
joint venture partner of SCHLUMBERGER, nor will either party
have any authority to represent or bind the other in any
respect.
11.2 ASSOCIATE acknowledges that it has no authority to accept
orders or any moneys from Customers on behalf of SCHLUMBERGER.
12 INDEMNIFICATION
12.1 ASSOCIATE will make no representations or warranties
concerning the quality, performance or other characteristics
of Products or Licensed Programs other than those which are
consistent in all respects with, and do not expand the scope
of, SCHLUMBERGER's representations and warranties set forth in
this Agreement and the Exhibits attached hereto. ASSOCIATE
will include in each contract of sale or lease for Products
and each license and sublicense for a Licensed Program
appropriate provisions to limit SCHLUMBERGER's warranty
liability as provided herein and will indemnify, defend and
hold SCHLUMBERGER harmless from and against any costs,
expenses (including attorneys' fees), damages or claims
incurred by SCHLUMBERGER by reason of ASSOCIATE's
representations.
12.2 ASSOCIATE agrees to indemnify SCHLUMBERGER for and against any
and all claims, demands and actions arising out of ASSOCIATE's
activities or performance under this Agreement or any breach
of ASSOCIATE's obligations. This indemnity will be conditioned
upon ASSOCIATE receiving:
12.2.1 Prompt written notice of any claims, demands or
actions made against SCHLUMBERGER by another for
which indemnity is sought hereunder by SCHLUMBERGER;
12.2.2 Cooperation in the defense by SCHLUMBERGER;
12.2.3 Control of the defense and/or settlement of such
claim, demand or action as to which indemnity is
sought.
12.3 SCHLUMBERGER agrees to indemnify ASSOCIATE for and against any
and all claims, demands and actions made against ASSOCIATE
arising out of nonconformity of Products or Licensed Programs
with the applicable SCHLUMBERGER specification or any breach
of SCHLUMBERGER's obligations under this Agreement. This
indemnity will be limited to damages awarded to a third party
claimant directly attributable to such non-conformity or
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Schlumberger Associate Program Agreement CONFIDENTIAL Rev 6/98.D
breach, will not include indirect or special damages or
damages for loss of revenues, loss of product or loss of data
and will be conditioned upon SCHLUMBERGER receiving:
12.3.1 Prompt written notice of any claims, demands or
actions made against ASSOCIATE by another for which
indemnity is sought hereunder by ASSOCIATE;
12.3.2 Cooperation in the defense by ASSOCIATE;
12.3.3 Control of the defense and/or settlement of such
claim, demand or action as to which indemnity is
sought.
12.4 Notwithstanding Subsections 12.2 and 12.3 above, neither party
will be liable for and each party will hold the other party
harmless from any liability for incidental, indirect, special
or consequential damages sustained by the other party,
including those arising from or measured by lost revenues or
profits under its contracts with third parties, even if the
other party has been advised of such damages.
13 TERMINATION
13.1 The term of this Agreement will commence on the date first
written above and, unless earlier terminated as hereinafter
provided, will continue until terminated by either party upon
ninety (90) days prior written notice to the other party of
its intent to do so.
13.2 The parties will have the right to terminate this Agreement
immediately by giving written notice to the other party of
such termination, if:
13.2.1 Either party becomes insolvent or makes an assignment
for the benefit of creditors, or if proceedings in
bankruptcy, for an arrangement, or for the
appointment of a receiver are filed by or against
either party;
13.2.2 Any assignment or attempted assignment of this
Agreement or any right or obligation hereunder is
made without the prior written approval of the other
party;
13.2.3 Either party will breach any of the covenants or
agreements herein contained, fail to faithfully
perform any of the services required hereunder, or is
determined by the other party to be guilty of
dishonesty or fraudulent misconduct;
13.2.5 Either party for any reason suspends or ceases its
activities.
13.3 Unless otherwise agreed between the parties, ASSOCIATE agrees
that termination of this Agreement, however caused, may result
in the cancellation of unfulfilled orders placed for Products
by ASSOCIATE with SCHLUMBERGER as of the effective date of the
termination, and that SCHLUMBERGER will be released from any
and all further liability to ASSOCIATE.
13.4 The acceptance of any order from, or the sale of any Products
to, ASSOCIATE after the termination or expiration of this
Agreement will not be construed as a renewal or extension
hereof, nor as a waiver of termination.
13.5 Neither SCHLUMBERGER nor ASSOCIATE will by reason of the
termination of this Agreement, be liable to the other for
compensation, reimbursement or damages due to the loss of
prospective profits or anticipated sales, or expenditures,
investment, leases or commitments in connection with the
business or good will of SCHLUMBERGER or ASSOCIATE, or
otherwise.
13.6 Until one year after the date on which this agreement ceases
to be in effect, neither SCHLUMBERGER nor any of its
affiliates engaged in the same principal businesses will
solicit or entice away any person in the employment of
ASSOCIATE nor any of its affiliates engaged in the same
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Schlumberger Associate Program Agreement CONFIDENTIAL Rev 6/98.D
principal businesses, and neither ASSOCIATE nor any of its
affiliates engaged in the same principal businesses will
solicit or entice away any person in the employment of
SCHLUMBERGER nor any of its affiliates engaged in the same
principal businesses.
14 NOTICES
14.1 Any notice herein will be deemed to have been given 48 hours
after it has been deposited in the United States mails,
registered or certified mail, proper postage prepaid,
addressed to the party for whom it is intended at the address
shown below and/or it has been dispatched using the
alternative method for notification agreed upon and described
on Exhibit E attached hereto.
14.2 If to SCHLUMBERGER, send notices to:
Schlumberger Malco, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇
14.3 If to ASSOCIATE, send notices to:
ADDRESS HERE
15 NON-ASSIGNMENT
15.1 Neither party hereto may assign this Agreement or any rights
or obligations hereunder without the prior written consent of
the other party hereto.
15.2 The provisions of this Agreement will be binding upon the
successors and assigns of the parties hereto.
16 DISPUTE RESOLUTION
16.1 Any disputes or claims arising under this Agreement will be
resolved through alternative dispute resolution means.
16.2 Initially, the parties will engage in non-binding. Mediation
will be in New York City, New York or such other site as is
mutually agreed to by the parties. The mediator will be
jointly appointed by the parties and will have expertise in
commercial dispute resolution.
16.3 In the event the dispute or claim is not satisfactorily
resolved through mediation within 90 days of notice of such
claim or dispute by a party, the parties will submit such
dispute or claim to binding arbitration. Arbitration will be
held in New York City, New York USA or such other site as is
mutually agreed to by the parties. If ASSOCIATE is a foreign
(non-US) corporation and delivery of the goods under this
agreement is to a foreign (non-US) destination, then the
commercial arbitration rules of the International Chamber of
Commerce will apply. In all other instances the commercial
arbitration rules of the American Arbitration Association will
apply. Any judgment, decision or award by the arbitrators will
be final and binding on the parties and may be enforced in any
court having jurisdiction over a party against whom any such
judgment, decision or award is to be enforced. The parties
specifically and knowingly waive any rights under State or
federal constitutions or statutes which grant a party the
right to trial by jury for any claims that might arise under
this agreement or which purports to give a party the right to
appeal an arbitrator's judgment, decision or award.
16.4 The parties will bear their own costs and expenses (including
attorney's fees) for any mediation or arbitration, unless
otherwise directed by the mediator or arbitrator.
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17 ENTIRE AGREEMENT; SEVERABILITY
17.1 The failure of either party to enforce at any time or for any
period of time the provisions of this Agreement will not be
construed as a waiver of such provisions or of the right of
such party thereafter to enforce each and every provision
contained herein.
17.2 If any term, clause, or provision contained in this Agreement
is declared or held invalid by a court of competent
jurisdiction, such declaration or holding will not affect the
validity of any other term, clause or provision herein
contained.
17.3 This Agreement including all Exhibits attached hereto sets
forth the entire understanding of the parties and supersedes
all prior agreements, arrangements, and communications,
whether oral or written, pertaining to the SCHLUMBERGER
Associate Program.
17.4 ASSOCIATE has not relied on any representations, oral or
written, except as are made in or expressly referenced herein
and except as provided herein this Agreement will not be
modified or amended except by the mutual written agreement of
the original signers of SCHLUMBERGER and ASSOCIATE below or by
their duly authorized representatives.
18 INTERPRETATION AND CONSTRUCTION
This Agreement and all questions of its interpretation, performance,
enforcement, and the rights and remedies of the parties hereunder will
be determined in accordance with the laws of the State of New Jersey.
WITNESS the due execution of this Agreement by the parties hereto as of the date
first written above.
Schlumberger Malco, Inc. Accident Prevention Plus, LLC
Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Signature: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------- ----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VP Title: President
Date: 6/11/99 Date: 5/12/99
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Schlumberger Associate Program Agreement CONFIDENTIAL Rev 6/98.D
Smart Cards (Category A)
EE2k 1 EE4k
T2G FE417
VisaCash Disposable
Smart Cards (Category B)
PayFlex 0.3k (Micro PayFlex) PayFlex 1k
PayFlex 4k MultiFlex 3k
MultiFlex 8k CryptoFlex 4k
VisaCash Reloadable Cyberflex 4k
Readers (Category C)
SCT SCR6O/65
Reflex 20 Reflex 60
Licensed Programs, Packaged Products (Category C)
Log ICC (may not be sublicensed) WinPractis
SafePak ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ of Sales Terminals (Category D)
Unattended Point of Sales Terminals (Category E)
EXHIBIT B -- CUSTOMERS AND MARKET
Customers
Market
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EXHIBIT C -- DISCOUNT POLICY
ASSOCIATE may purchase Category A, B and C Products listed on Exhibit A from
SCHLUMBERGER for resale to Customers at a discount off the then current price.
The discount will be based on ASSOCIATE's cumulative dollar value (the
"Cumulative Value") of Category A, B and C Products purchased from SCHLUMBERGER
over the preceding six (6) months plus the current month. Upon signing the
Agreement, ASSOCIATE's Cumulative Value will be established at $150,000 unless a
higher value is warranted by ASSOCIATE's cumulative dollar purchases as
described above.
EXHIBIT D -- TRADEMARKS
ASSOCIATE Trademarks:
SCHLUMBERGER Trademarks:
"Schlumberger" "Delta 21" "Sigma"
"MagIC" "Payflex" "Multiflex"
"SI Mflex" "Cryptoflex" "Reflex xx"
"Cyberflex" "Solo" "Smart Village"
EXHIBIT E -- ALTERNATIVE METHOD FOR NOTIFICATION
EXHIBIT F -- ASSOCIATE CLASSIFICATIONS
A Strategic Associate is expected to purchase or cause the purchase of at least
$900,000 worth of Products from SCHLUMBERGER annually and/or it holds a
strategic position in the Market or within the smart card industry at large.
A Preferred Associate is expected to purchase or cause the purchase of at least
$600,000 worth of Products from SCHLUMBERGER annually and/or it holds a key
position in the Market.
A Business Associate is expected to purchase or cause the purchase of at least
$300,000 worth of Products from SCHLUMBERGER annually and/or it has developed a
business case and is in the process of developing Systems for the Market.
EXHIBIT G -- COMMISSION RATES
ASSOCIATE commission rates for the sale of Products directly to Customers are
defined according to the Product categories in Exhibit A as follows:
Commission Rate Product Category
--------------- ----------------
1% A
2.5% B
5% C
ADDENDUM
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