Exclusive Product Purchase And Distribution Agrmnt

Exhibit 10.08


EXECUTION COPY


AGREEMENT NO. PA-011008


ISECURETRAC(TM) CORPORATION
5022 South 114th Street
Omaha, NE 68137


EXCLUSIVE PRODUCT PURCHASE AND DISTRIBUTION AGREEMENT


THIS AGREEMENT is effective as of the ____ day of October, 2001 (the "Effective Date"), by and between iSecureTrac Corporation, a Delaware corporation, having its principal offices at 5022 South 114th Street, Omaha, NE 68137 ("iSecureTrac"), and ADT Security Services, Inc., a Delaware corporation with its headquarters at One Town Center Road., P.O. Box 5035, Boca Raton, FL 33431-0835, successor in interest to SecurityLink, Inc., an Illinois Corporation ("DISTRIBUTOR").


iSecureTrac has designed and developed and manufactures the iTracker(TM) mobile tracking device utilizing GPS and advanced communications technologies to enable accurate tracking and real time or scheduled mapping of individuals, mobile equipment and transportation vehicles.


DISTRIBUTOR is, to the extent provided in Section 2.9, capable of monitoring the movement of iTracker units, and desires to purchase from iSecureTrac, from time to time, iTracker units and associated products on the terms and conditions described in this Agreement for resale, lease or other distribution to its customers and/or "Service Providers" (as defined herein) in the criminal justice marketplace in North America ("Target Market").


NOW THEREFORE, iSecureTrac and DISTRIBUTOR agree as follows:


1.0 DEFINITIONS


1.1 "Products" shall mean iTracker-ET PTUs and other specific products
available for purchase by DISTRIBUTOR under this Agreement, and any
replacements or substitutes therefor, as more fully described on
Attachment 1 hereto.


1.2 "Services" shall mean the Product support services to be provided by
iSecureTrac to DISTRIBUTOR hereunder, including, but not limited to,
training, extended warranty service and product repair services, as
more fully described on Attachment 2 hereto.


1.3 "Service Providers" shall mean third parties not affiliated with
DISTRIBUTOR that (i) provide monitoring services and products to End
Users and (ii) are selected, appointed, and authorized by DISTRIBUTOR,
with the prior written


consent of iSecureTrac (which consent shall not be unreasonably
withheld, denied, or delayed by iSecureTrac), to market, resell, and
otherwise distribute Products to End Users.


1.4 "End User" shall mean a prospective or actual user of Products or
products similar thereto within the Target Market.


1.5 This Agreement consists of the terms and conditions stated herein and
in the Attachments which are incorporated herein by reference and
consist of:


Attachment 1: Product Pricing
Attachment 2: Support Services
Exhibit A: P.O. Number SL-IST0001
Exhibit B: P.O. Number SL-IST0002


2.0 PURCHASER AND RESELLER


2.1 PRODUCT PURCHASES. During the Term of this Agreement, DISTRIBUTOR may
purchase from iSecureTrac the Products listed on Attachment 1 at the
Prices indicated thereon, PROVIDED that DISTRIBUTOR's initial purchase
order submitted to iSecureTrac, P.O. number SL-IST0001, dated June 25,
2001, a copy of which is attached hereto as "Exhibit A" and
incorporated herein by this reference, shall state and govern the
Prices for the quantities listed thereon, and DISTRIBUTOR's Purchase
Order number SL-IST0002 dated June 25, 2001 for [confidential
treatment requested] "iTracker-ET PTUs" (as defined herein) in the
amount of [confidential treatment requested], a copy of which is
attached hereto as "Exhibit B" ("PO SL-IST0002") and incorporated
herein by this reference, shall state and govern the Prices for the
quantities of Products listed thereon. Subject to the terms and
conditions of this Agreement, DISTRIBUTOR hereby agrees and commits to
purchase a minimum of [confidential treatment requested] iTracker-ET
PTUs during the [confidential treatment requested] period from the
date of DISTRIBUTOR's receipt of the first functional iTracker-ET PTU
that conforms to its "Specifications" (as defined herein) as
reasonably determined and acknowledged by DISTRIBUTOR in writing (the
"[confidential treatment requested]Commitment" and "[confidential
treatment requested] Commitment Period", respectively); provided,
however, that: (i) the [confidential treatment requested] iTracker-ET
PTUs ordered by DISTRIBUTOR under P.O. SL-IST0002 shall be applied
against and count towards satisfaction of the [confidential treatment
requested]Commitment, notwithstanding the fact that PO SL-IST0002 was
issued on June 25, 2001, prior to the Effective Date and the
[confidential treatment requested]Commitment Period, (ii) all
iTracker-ET PTUs ordered by DISTRIBUTOR hereunder constituting
"Cancelled Products" or "Deficient Products" (each, as defined herein)
shall be applied against and count towards satisfaction of the
[confidential treatment requested]Commitment, even if


2


DISTRIBUTOR rejects such Products and/or cancels or terminates its
purchase order therefor as provided herein; provided, further,
however, that if DISTRIBUTOR ultimately purchases any Cancelled
Product or Deficient Product which, at the time of such purchase, has
already been applied against the [confidential treatment
requested]Commitment ("Previously Applied Products"), then
iSecureTrac's purchase of such Previously Applied Products shall not
be applied against the [confidential treatment requested]Commitment a
second time (the "Double Counting Prohibition"), and (iii)
iSecureTrac's sole and exclusive remedy and recourse against
DISTRIBUTOR (and DISTRIBUTOR's sole and exclusive liability to
iSecureTrac) in contract, tort, or under any other legal or equitable
theory for any breach, default, or other failure by DISTRIBUTOR to
comply with or satisfy the [confidential treatment
requested]Commitment in violation of the terms hereof (each, a
"Purchasing Volume Default") shall be to recoup any "Unearned
Discount" previously granted to DISTRIBUTOR on the iTracker-ET PTUs
actually purchased and paid for by DISTRIBUTOR hereunder during the
[confidential treatment requested]Commitment Period applicable to the
[confidential treatment requested]Commitment (or portion thereof in
the event of early termination of this Agreement during such period)
("Purchased Units") in accordance with Attachment 1.


2.2 RESELLER AUTHORIZATION. iSecureTrac hereby specifically authorizes
DISTRIBUTOR to (i) resell, lease, rent or otherwise distribute
Products to End Users and Service Providers, including the exclusive
distribution of those specific Products described in Section 2.4
below, and (ii), with iSecureTrac's prior written consent (which
consent shall not be unreasonably withheld, denied, or delayed by
iSecureTrac), appoint and authorize Service Providers to resell,
lease, rent or otherwise distribute Products to End Users.


2.3 PURCHASE ORDERS. Products and Services purchased by DISTRIBUTOR
hereunder shall be ordered for delivery only through the execution or
electronic release of applicable written or electronic purchase orders
issued by DISTRIBUTOR which shall state quantity, Product
identification numbers and/or Product name, unit "Price" (as defined
herein), point of delivery ("Delivery Destination"), delivery dates,
accessories to be shipped with the Products, delivery instructions and
any other special information and shall refer to this Agreement by
agreement number. During the Term of this Agreement (including any
extension thereof) (collectively, the "Term"), iSecureTrac shall
accept, honor, and fill each purchase order issued by DISTRIBUTOR
hereunder in accordance with its terms by manufacturing, performing,
selling, providing, and supplying the ordered Products and Services to
and for DISTRIBUTOR at and for the Prices, and in compliance with all
terms, warranties, and other requirements established hereunder
therefor (collectively, "Conforming Products").


3


2.4 EXCLUSIVE PRODUCTS PURCHASER AND DISTRIBUTOR. iSecureTrac is
authorized to resell 533 EMS2000I House Arrest transmitter bracelets
manufactured by Elmo Tech Ltd., Israel (the "Elmo Tech Transmitters").
iSecureTrac has configured a version of its iTracker product to
receive signals from the Elmo Tech Transmitters and, together with an
Elmo Tech Transmitter, operate as a single Personal Tracking Unit
(PTU), known as the iTracker-ET PTUs ("iTracker-ET PTUs"). iSecureTrac
hereby agrees to sell iTracker-ET PTUs ONLY to DISTRIBUTOR in the
Target Market during the Term of this Agreement and any extension
thereof. iSecureTrac and its affiliates will not, during the Term of
this Agreement and any extension thereof, directly or indirectly,
sell, lease, rent or make available in any manner, any iTracker-ET
PTUs to any person or entity in the Target Market. iSecureTrac hereby
appoints DISTRIBUTOR as the exclusive distributor in the Target Market
of iTracker-ET PTUs and related documentation and materials during the
Term, and hereby grants DISTRIBUTOR the sole and exclusive, royalty
free right and license to market, promote, offer for sale, sell,
supply, and otherwise distribute (by way of lease, rental, loan,
bailment, or otherwise), and support iTracker-ET PTUs to and for
End-Users and Service Providers in the Target Market during the Term
(the "Distribution License"). DISTRIBUTOR may sublicense any of its
rights under the Distribution License to the Service Providers, and,
may exercise all such sublicensed rights concurrently with such
Service Providers. Without limiting the foregoing, DISTRIBUTOR may
resell, lease, rent or otherwise distribute Products directly and/or
indirectly to End-Users using DISTRIBUTOR's own employees and internal
resources and/or by and through one (1) more layers of Service
Providers appointed by DISTRIBUTOR. Notwithstanding the foregoing,
iSecureTrac agrees and acknowledges that during the Term, DISTRIBUTOR
may, at its option and sole discretion, on its own and/or in
conjunction with Service Providers, promote, market, offer, sell, and
otherwise distribute to End Users in the Target Market DISTRIBUTOR's
own and third party products that compete against the Products
(including, but not limited to, the iTracker-ET PTUs) in the Target
Market, and that nothing in this Agreement shall prohibit, limit,
diminish, qualify, or otherwise affect DISTRIBUTOR's ability to do so,
nor shall anything herein impose any duty of exclusivity upon
DISTRIBUTOR.


2.5 PRICING. Products and Services are priced for sale by iSecureTrac to
DISTRIBUTOR during the Term as specified on Attachments 1 and 2
(collectively, the "Prices"). The Prices shall be fixed and firm
during the [confidential treatment requested] Prices shall not
increase during the Term except for Approved Price Increases
implemented in accordance with this Section 2.5. The "Price" for all
iTracker-ET PTUs hereunder shall be the "Contract Unit Price"
specified on Attachment 1.


2.6 INCONSISTENCIES IN P.O. TERMS. In the event of any inconsistencies
between the terms of this Agreement and any terms contained on any
purchase order


4


delivered to iSecureTrac hereunder, the terms of this Agreement shall
govern and take priority unless such inconsistent purchase order terms
have otherwise been previously agreed to by the parties.


2.7 LICENSE. iTracker contains firmware developed and owned by
iSecureTrac. A limited, non-exclusive, irrevocable, fully paid,
royalty free, transferable license is hereby granted to DISTRIBUTOR,
in perpetuity, for distribution and use of said software on the
specific iTracker device in which said software was placed, and for no
other; provided, however, that DISTRIBUTOR may, without limitation,
distribute and sublicense any or all of its rights under such software
license to End Users and Service Providers as part of such
Distribution License. iSecureTrac shall retain all ownership of all
proprietary rights to said software. The software license granted
herein shall be deemed to be in effect upon delivery of each iTracker
unit and shall be included in its Price.


2.8 INDEPENDENT CONTRACTORS. Neither the above nor any other part of this
Agreement shall be construed as agency, legal representation,
partnership, joint venture, or any other relationship between the
parties other than being separate entities which remain independent
contractors.


2.9 DISTRIBUTOR REPRESENTATION. DISTRIBUTOR hereby represents that it is
capable or will use its reasonable best efforts to obtain the
capability to provide 7x24 monitoring of the movement of any and all
specific iTracker units (including iTracker-ET PTUs) sold to
DISTRIBUTOR under this Agreement and that, furthermore, it believes
that it has the capability to support End Users in their use of the
Products through training and other services which are designed to
ensure proper Product usage; provided, however, that each
representation and covenant made by DISTRIBUTOR as stated above shall
be conditioned upon iSecureTrac's performance of its obligations under
this Agreement and the Hosting Services Agreement. DISTRIBUTOR further
represents that it is the exclusive distributor in North America for
certain products made by Elmo Tech, Ltd. ("Elmo Tech") and that it
intends to maintain such exclusivity during the Term of this
Agreement. DISTRIBUTOR further represents that if its exclusive
distributorship of such Elmo Tech products is not maintained, then
DISTRIBUTOR will, at its option, either (i) make a volume commitment
purchase of iTracker-ET PTU's from iSecureTrac in order to maintain
the exclusivity of this Agreement pursuant to a written amendment
hereto complying with Section 14.2, or (ii) become a non-exclusive
DISTRIBUTOR of the iTracker-ET PTU's. In the event DISTRIBUTOR loses
its ability to provide iSecureTrac with the Elmo Tech components, for
any reason, either party may terminate this Agreement on sixty (60)
days prior notice to the other party without penalty or further
liability or obligation to such other party.


5


3.0 PRODUCT SUBSTITUTION


3.1 NOTIFICATION. iSecureTrac shall use its best efforts to notify
DISTRIBUTOR in writing of plans and intentions to modify form, fit or
function of iTracker-ET PTUs, as soon as such plans have been
finalized by iSecureTrac.


3.2 SUBSTITUTION. iSecureTrac may develop and manufacture new versions of
the Products purchased hereunder and substitute the same for Products
then being purchased by DISTRIBUTOR at the same Price as the replaced
Products, provided that, the functionality, performance, useful life,
value, and efficiency of such substitutions equals or exceeds that of
the Products being replaced. In the event such replacement Products
replace iTracker-ET PTUs, iSecureTrac shall ensure that such
replacement Products remain compatible with standard Elmo Tech
Transmitters.


3.3 DISCONTINUANCE. In the event that iSecureTrac intends to discontinue
the manufacturing of specific types of Products (other than
iTracker-ET PTU(s)), without substitution, it shall notify DISTRIBUTOR
thereof in writing at least ninety (90) days in advance so as to
enable DISTRIBUTOR to liquidate its inventory of discontinued Products
and procure similar products elsewhere, if desired. iSecureTrac shall
not cease manufacturing any iTracker-ET PTU at any time during the
Term this Agreement, PROVIDED that it has received and accepted a
purchase order from DISTRIBUTOR for any iTracker-ET PTUs at any time
within the prior six (6) months.


3.4 COMPATIBILITY WARRANTY. Notwithstanding anything in this Agreement
(including, but not limited to, Section 3) to the contrary,
iSecureTrac represents and warrants to DISTRIBUTOR that all
iTracker-ET PTUs shall operate compatibly with standard Elmo Tech
Transmitters.


4.0 SHIPMENT


4.1. CARRIER. iSecureTrac shall select and pay for the method of shipment
and the carrier, consistent with the nature of the Products and the
hazards of transportation, as instructed in DISTRIBUTOR's purchase
order.


4.2. F.O.B./DELIVERY ADDRESS. All deliveries of Products made pursuant to
this Agreement shall be made [confidential treatment requested],
whichever made be specified by Distributor on the purchase order.


4.3. CONFIRMED DELIVERY DATE. DISTRIBUTOR will use its best efforts to
place purchase orders with iSecureTrac at least
[confidential treatment requested] prior to delivery dates. The
delivery date on each such purchase order for iTracker-ET PTU(s) in
quantities of [confidential treatment requested] shall
automatically be deemed a


6


"Confirmed Delivery Date" hereunder, and iSecureTrac shall accept
and timely fill each such purchase order issued by SERVICE PROVIDER
in accordance with its terms. Upon receipt of any purchase order
issued [confidential treatment requested] prior to the delivery
date specified thereon or for iTracker-ET PTU(s) in quantities of
more than 500 units, iSecureTrac shall promptly confirm the
delivery date designated thereon with DISTRIBUTOR, or arrange for a
mutually agreeable alternative delivery date with DISTRIBUTOR
(each, a "Confirmed Delivery Date") and shall fill each such
purchase order on its Confirmed Delivery Date in accordance with
its terms; provided, however, that if the parties fail to agree
upon an alternative delivery date for any such purchase order
within five (5) business days after iSecureTrac's receipt thereof,
DISTRIBUTOR may cancel such purchase order free of charge,
cancellation fee, or penalty, and all iTracker-ET PTUs listed on
any such cancelled purchase order ("Cancelled Products") shall
nevertheless be applied against and count towards satisfaction of
the [confidential treatment requested]Commitment, subject to the
Double Counting Prohibition applicable to any Previously Applied
Products subsequently purchased by DISTRIBUTOR. If iSecureTrac does
not confirm any delivery date to DISTRIBUTOR in writing within
fifteen (15) calendar days of its receipt of the applicable
purchase order, the delivery date stated thereon shall be deemed
the Confirmed Delivery Date. iSecureTrac understands and agrees
that all Products purchased by DISTRIBUTOR from iSecureTrac
hereunder shall be purchased for the purpose of resale and other
distribution by DISTRIBUTOR to third parties, and that DISTRIBUTOR
may make resale and delivery commitments to its customers based on
the terms of this Agreement.


4.4. TRANSFER OF TITLE AND RISK OF LOSS. Title to Products shall pass to
DISTRIBUTOR, and all risk of loss, damage or destruction of Products
shall be assumed by DISTRIBUTOR upon receipt of the Products at the
Chicago, IL warehouse designated by DISTRIBUTOR on its purchase order
therefor.


4.5. SHIPPING DELAY. iSecureTrac shall ship Products in a sufficiently
timely manner as to meet Confirmed Delivery Dates. In the event
iSecureTrac fails to ship Products as specified in DISTRIBUTOR's
purchase orders within fifteen (15) calendar days after the Confirmed
Delivery Date for any reason, DISTRIBUTOR may cancel such shipment
without penalty, fee, or charge, in addition to all of its other
rights and remedies under this Agreement. Notwithstanding the above,
iSecureTrac reserves the right to temporarily suspend shipments not
yet paid for by DISTRIBUTOR in the event DISTRIBUTOR has not paid
overdue invoices to iSecureTrac [confidential treatment requested]
("Past Due Invoices") by providing written notice of such suspension
to DISTRIBUTOR, in which event


7


shipping delays, for purpose of this paragraph, shall be deemed
tolled. Such suspended shipments shall be immediately resumed upon
iSecureTrac's receipt of payment for such Past Due Invoices.


4.6. CANCELLATION. DISTRIBUTOR may cancel part or all of any purchase
order(s) for convenience without cost or penalty, provided that such
cancellation is received by iSecureTrac more than ninety (90) days
prior to the Confirmed Delivery Date for the applicable shipment. If
iSecureTrac receives such cancellation order for convenience within
ninety (90) days of the Confirmed Delivery Date, such cancellation
shall still be effective, but iSecureTrac may charge DISTRIBUTOR
cancellation fees therefor, consisting of a percentage of the Price of
the Products so cancelled on such purchase order, in accordance with
the following schedule:


CANCELLATION RECEIVED BY ISECURETRAC CANCELLATION FEE


60 to 90 days before Confirmed Delivery Date [confidential
treatment requested]30 to 59 days before Confirmed Delivery Date
[confidential treatment requested]0 to 29 days before Confirmed
Delivery Date
[confidential treatment requested]
Cancellation fees shall accrue only for (i) purchase orders
cancelled by DISTRIBUTOR for its convenience under this Section
4.6 during the time periods listed above, and (ii) "Delayed
Shipments" cancelled by iSecureTrac under Section 4.7.


4.7. RESCHEDULING. DISTRIBUTOR may, once for each shipment ordered from
iSecureTrac, reschedule shipments of all or any portion of any firm
purchase order at any ...