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Exhibit 10.1
SUPPLY AGREEMENT
This Supply
Agreement (this “ Agreement ”) is made and
entered into as of May 30, 2007 (the “ Effective Date
”), by and between [Confidential treatment requested —
the omitted information has been filed separately with the
Securities and Exchange Commission], with offices at [Confidential
treatment requested — the omitted information has been filed
separately with the Securities and Exchange Commission] (“
Seller ”), and Security With Advanced Technology,
Inc., a Colorado corporation, with offices at 10855 Dover Street,
Suite 1000, Westminster, Colorado 80021-3936 (“ Buyer
”).
Recitals
Whereas , Buyer wishes to purchase from Seller, and
Seller wishes to sell to Buyer, certain [Confidential treatment
requested — the omitted information has been filed separately
with the Securities and Exchange Commission], such sales and
purchases to be implemented on the terms and conditions set forth
in this Agreement.
Now,
Therefore , Seller and Buyer agree as follows:
| a) |
This Agreement shall commence on the Effective Date and shall
remain in force and effect (the “ Term ”) until
the earlier of (i) the fourth anniversary of the Effective Date,
(ii) [Confidential treatment requested — the omitted
information has been filed separately with the Securities and
Exchange Commission], and (iii) the earlier termination of this
Agreement pursuant to Section 1.b). |
| b) |
Either party may terminate this Agreement upon giving the other
party notice of an event of default (“ Event of
Default ”), which will exist with respect to a party
if: |
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(i) |
a decree or order is made by a court having jurisdiction over
such party adjudging it to be a bankrupt under applicable
law; |
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(ii) |
a decree or order is made by a court having jurisdiction over
such party appointing a receiver, or receiver-manager, who is not
bound by the terms of this Agreement, or a liquidator or trustee or
assignee in bankruptcy of such party or of its property, or
directing the winding-up or liquidation of its affairs; |
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(iii) |
any other decree or order has been made by a court of competent
jurisdiction by which such party is deprived of the right to manage
its undertakings and has remained in force undischarged and
unstayed for 45 business days; |
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A. |
institutes proceedings to be adjudicated a voluntary
bankrupt; |
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B. |
consents to the filing of a bankruptcy proceeding against
it; |
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C. |
consents to the appointment of a receiver, liquidator or
trustee or assignee in bankruptcy or insolvency of itself or its
property; or |
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D. |
makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts generally as they become
due. |
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(v) |
such party has committed a material default in the performance
of its obligations under this Agreement, written notice has been
given to such party specifying such default and declaring the
intention of the other party to exercise its right to terminate
this Agreement if the default is not duly remedied, and |
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A. |
more than 15 business days have elapsed since the expiration of
such period following the giving of such notice and such default
remains unremedied, or |
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B. |
in case of a default that is not capable of being remedied, by
the exercise of reasonable diligence within the period described in
Section 1.(b.)(v)A., the earlier of |
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I) |
the day on which the party fails or refuses to act diligently
to remedy the default, and |
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II) |
the day on which it becomes evident to the other party, acting
reasonably, that such default could not be remedied in a reasonably
timely manner regardless of the actions to be taken by such
party. |
| c) |
In the event this Agreement is terminated by Buyer due to an
Event of Default caused by Seller, the remaining Escrow Amount (as
defined herein), if any, shall be returned to Buyer in accordance
with the terms of the Escrow Agreement (as defined herein). In the
event this Agreement is terminated by Seller due to an Event of
Default caused by Buyer, the remaining Escrow Amount (as defined
herein), if any, shall be paid to Seller as liquidated damages in
accordance with the terms of the Escrow Agreement (as defined
herein). |
The product
covered by this Agreement shall be [Confidential treatment
requested — the omitted information has been filed separately
with the Securities and Exchange Commission] (“
Product ”). Parties agree that Buyer [Confidential
treatment requested — the omitted information has been filed
separately with the Securities and Exchange Commission].
Buyer shall
maintain at least a [Confidential treatment requested — the
omitted information has been filed separately with the Securities
and Exchange Commission] supply of [Confidential treatment
requested — the omitted information has been filed separately
with the Securities and Exchange Commission] at Seller’s
plant. Seller shall notify Buyer at least monthly as to the
quantity of [Confidential treatment requested — the omitted
information has been filed separately with the Securities and
Exchange Commission] in inventory at Seller’s
plant.
| 3. |
PRODUCT QUANTITY FORECASTING; PRICING; EXCLUSIVE
ARRANGEMENT |
| a) |
During the Term, Seller agrees to sell to Buyer, and Buyer
agrees to buy from Seller, Product upon the terms set forth in this
Agreement. |
| b) |
During the Term, Buyer will provide Seller with purchase orders
for Product [Confidential treatment requested — the omitted
information has been filed separately with the Securities and
Exchange Commission] in advance, with the initial [Confidential
treatment requested — the omitted information has been filed
separately with the Securities and Exchange Commission] purchase
orders and pricing of Product set forth on Exhibit A
attached hereto. The purchase orders shall be issued every 60 days,
beginning 10 days from the Effective Date. All purchase orders of
Buyer shall be deemed to incorporate the terms of this Agreement.
The purchase orders issued by Buyer shall not modify or alter the
terms of this Agreement [Confidential treatment requested —
the omitted information has been filed separately with the
Securities and Exchange Commission] without the written consent of
Seller. Purchase orders also shall not be cancelled, revoked,
delayed or reduced by Buyer unless consented to in writing by
Seller; provided, however, that all unfilled purchase orders shall
be cancelled on the date of termination of this Agreement pursuant
to Section 1(a). Purchase orders shall not exceed [Confidential
treatment requested — the omitted information has been filed
separately with the Securities and Exchange Commission], without
Seller’s written consent. [Confidential treatment requested
— the omitted information has been filed separately with the
Securities and Exchange Commission] |
| c) |
[Confidential treatment requested — the omitted
information has been filed separately with the Securities and
Exchange Commission]. If Seller fails to fulfill any purchase order
within ninety (90) days of its requested delivery date, Seller
shall be deemed to have materially breached this Agreement (and
such default shall not be entitled to any cure period by Seller
under Section 1(b)). |
[Confidential treatment requested — the omitted
information has been filed separately with the Securities and
Exchange Commission]. Notice pursuant to this paragraph may be
served by Seller via email or fax as provided to in Exhibit C (or
at such other email address as is provided by Buyer to Seller from
time to time) and not otherwise subject to the terms of paragraph
15.
Taxes,
duties or other charges of any nature imposed by any governmental
authority that become payable by reason of a sale or delivery of
Product under this Agreement will be paid by Buyer.
| a) |
Seller warrants that Product purchased hereunder [Confidential
treatment requested — the omitted information has been filed
separately with the Securities and Exchange Commission] shall
conform to the specifications set forth on Exhibit B
. |
| b) |
In the event that 2% or more of any Product shipment received
by Buyer at any time fails to conform to the specifications set
forth on Exhibit B , Buyer shall promptly notify Seller and
Seller shall replace or credit Buyer for any and all defective
Product. If Seller fails to cure material defects within 60 days of
such notice, Seller shall be deemed to have materially breached
this Agreement (and such default shall not be entitled to any cure
period by Seller under Section 1.(b.)). |
| c) |
Notwithstanding any provision of this Agreement to the
contrary, the Seller warranty contained in Section 6(a) is the only
warranty extended by Seller in connection with the Products and
such warr |
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