SUBSCRIPTION SERVICE AGREEMENT
1. Governing Terms. The terms of this Agreement, including the service plan and pricing schedule (the “Subscription Plan”) offered by MAGNAR and selected by Subscriber (together the “Agreement”), shall govern the rights and obligations of MAGNAR and Subscriber respecting the provision by MAGNAR of the FortifIDTM subscription service (the “Services”) and shall supersede the terms and conditions in any document, including without limitation any purchase order, issued by Subscriber, unless otherwise expressly agreed to in writing by both MAGNAR and Subscriber. This Agreement constitutes the entire agreement between MAGNAR and Subscriber relating to the subject matter of this Agreement and supersedes all previous communications, representations, understandings and agreements, either oral or written, between the parties with respect to said subject matter. No terms, provisions or conditions of any purchase order, acknowledgement or other business form that either party may use in connection with the transactions contemplated by this Agreement will have any effect on the rights, duties, or obligations of the parties under this Agreement, regardless of any failure of a receiving party to object to such terms, provisions or conditions.
2. Services. (a) This Agreement sets forth the terms and conditions under which MAGNAR will provide the Services to Subscriber. The Services consist of providing Subscriber with the following during the term of the Agreement, as described in the Subscription Plan: (i) one or more units of MAGNAR’s FortifIDTM transportation worker identification credential (TWIC®) reader, including all software therein (each FortifIDTM unit and included software being a “Device”), one or more wireless charging kits and such other hardware that may be provided according to the Subscription Plan (the Device, charging kits and any other hardware provided being the “Equipment”), (ii) a limited, nonexclusive, nonsublicensable, nonassignable, software license for the Device, (iii) software support and in-Subscription Plan software updates, (iv) hardware maintenance and in-Subscription Plan hardware refresh to the model of the Device (in-Subscription Plan updates to the model of the Device do not include upgrading to a different model of Device that performs more functions than the Device provided under the Subscription Plan), and (v) access to the FortifID 360TM online portal (“Portal Access”) from which Subscriber may perform functions as described in the Subscription Plan.
(b) Subscriber acknowledges and agrees that Subscriber shall at no time hold title to the Equipment or software provided by Magnar. Subscriber shall not allow any lien or other security interest to attach to the Equipment or software provided by Magnar.
3. Price. The Services are being provided on a subscription basis consisting of (a) a per-Device lease fee for each Device provided to Subscriber as provided in the Subscription Plan, and (b) a fee, if any, for the Portal Access and add-ons as set forth in the Subscription Plan. The fees stated in the Subscription Plan do not include any transactional expenses, such as credit card or telegraphic or electronic fund transfer processing fees, sales, excise or use taxes that may be applicable; Subscriber shall pay all such transaction fees and all such sales, excise, use or other taxes payable in connection with the Services, other than taxes on MAGNAR’s income. If MAGNAR is required to collect any taxes from Subscriber, Subscriber will pay same to MAGNAR upon payment of the applicable fees, unless Subscriber provides MAGNAR will a valid exemption certificate.
4. Term. The term of this Agreement and the billing cycle shall be for the period set forth in the Subscription Plan.
5. Service System Requirements. (a) MAGNAR shall provide the Equipment. Subscriber shall use each Equipment only in conjunction with the Services during the term of this Agreement, provided that title to the Equipment shall remain at all times with MAGNAR. Subscriber shall not remove or permit the removal of any Equipment from the facility identified in the Subscription Plan (the “Facility”). Subscriber shall further not, nor permit any third party to, disassemble, modify, copy, engineer, reengineer, tamper, damage or otherwise use the Equipment. MAGNAR shall further provide the Portal Access, which Subscriber agrees shall be used solely for purpose of implementing the Services.
(b) In the event that a Facility cannot access the FortifIDTM encrypted cellular network, Subscriber shall be required to provide and maintain at its sole cost and expense secure internet access at the Facility sufficient to allow MAGNAR to provide the Services, which shall include at a minimum, regular updating of the Cancelled Card List on the Device and software updates from time to time. Subscriber shall prevent (i) any unauthorized persons to access or use the Services, (ii) the downloading, use or disclosure of sensitive security information from the Services in violation of applicable laws and regulations, (iii) the introduction of any malware, spyware or other harmful software to the Services and (iv) loss, damage or theft of any of the Equipment. Subscriber shall promptly notify MAGNAR in the event of the occurrence of any of the foregoing or that access to the encrypted cellular network or Portal Access is not in good working order. Except as provided in Section 7, Subscriber shall be responsible for the cost to replace any Equipment that is lost, stolen or damaged, including if occurring during shipping from Subscriber to MAGNAR.
6. Payment Terms. The payments due to MAGNAR and manner of payment shall be as set forth in the Subscription Plan. Subscriber’s obligation to pay MAGNAR such fees and expenses as provided shall survive the expiration or termination of the Agreement. In the event Subscriber reasonably believes any fee, expense or other charge contained in an invoice is improper or erroneous, Subscriber shall, within fifteen (15) days of receipt of the invoice, notify MAGNAR of the disputed charge and the basis of its dispute. Subscriber shall pay all undisputed fees, expenses and other charges as and when due. The parties shall use good faith efforts to resolve any such dispute. No discount for early payment shall be given. Any amounts due to MAGNAR that are not paid by the due date shall bear interest, from the date due until paid in full, at a rate equal to the lesser of one and one-half percent (1.5%) per month, or the highest rate permitted under law.
7. Limited Warranty and Remedies.
(a) Subject to the limitations, terms and conditions herein, MAGNAR warrants that, during the term of this Agreement, the Services will be provided in a professional manner consistent with industry standards, provided that Subscriber utilizes the Services in accordance with MAGNAR’s specifications and instructions using properly qualified and trained staff. In the event that any Equipment is or becomes inoperable due to defects or damage, subject to section 7(b), Subscriber shall return the Equipment for repair or replacement, subject to the terms set forth below.
(b) MAGNAR makes no warranty, and accepts no liability or responsibility for, any Services (including without limitation any Equipment), provided hereunder if the Services (including without limitation any Equipment), (i) have not been used, or operated in strict accordance with MAGNAR’s specifications and instructions, (ii) are used for any purpose prohibited by MAGNAR or in a manner that is unlawful or is recognized by applicable industry standards or practices as inappropriate, (iii) are used in conjunction with, or are combined with, other hardware, software, peripherals, or equipment not specified or intended by MAGNAR, or (iv) are damaged by, or subjected to, improper handling, storage, installation, use, or maintenance, abnormal or undisclosed environmental conditions, tampering, unauthorized repairs or modifications, accidental or intentional damage, or acts of God. MAGNAR makes no warranty against, and accepts no liability or responsibility for, any interruption of the Services (i) as may be reasonably required to update, maintain or repair the Equipment and/or the FortifID 360TM, or (ii) caused by failures of Subscriber’s internet access or other causes beyond MAGNAR’s control, including without limitation, interruptions of internet access provided by MAGNAR’s third party providers.
(c) Advice and Recommendations: MAGNAR assumes no responsibility for the selection of the Services to achieve the results desired by Subscriber, including without limitation, that the number of Devices and other Equipment ordered by Subscriber are sufficient to cover Subscriber’s obligations under applicable law should one or more of the Devices and other Equipment require service or replacement. The Services, and all related advice and recommendations of MAGNAR, if any, are intended for use by persons having skill and at such person’s own risk. MAGNAR assumes no responsibility for, and Subscriber waives all claims against MAGNAR for, any results obtained or damages incurred from the use of MAGNAR’s advice and recommendations.
(d) Limited Remedy: Any breach of the foregoing warranties must be reported to MAGNAR in writing within three (3) business days from the date that any non-conformance or defect is first discovered. If any Equipment fails to operate properly or is damaged, Subscriber shall return the Equipment to MAGNAR according MAGNAR’s return materials instructions and MAGNAR will repair or replace the Device at no cost or expense to Subscriber, except that if the damage was caused by abuse, Subscriber shall be charged a replacement fee. If the Services materially fail to operate properly, other than for reasons described in Section 7(b) above, and MAGNAR is unable to correct such failure within five (5) business days after receipt of the defective Equipment, Subscriber may elect, as its sole and exclusive remedy and as MAGNAR’s entire liability for breach of the foregoing warranties, to terminate the Service prior to the expiration of the term of this Agreement, in which event Subscriber shall not be responsible for any fees for the period after the date of Subscriber’s termination of the Services under this Section; MAGNAR will refund any prepaid fees, if any, for the balance of the term promptly after all of the Equipment is returned to it. Upon such termination, Subscriber shall immediately return the Equipment to MAGNAR at Subscriber’s expense, including insurance.
(e) Disclaimer: TO THE FULLEST EXTENT ALLOWED BY LAW, THE WARRANTIES AND REMEDIES SET FORTH HEREIN ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES, GUARANTIES, REPRESENTATIONS, TERMS, OR CONDITIONS, WHETHER ORAL, WRITTEN, EXPRESSED, IMPLIED, OR OTHERWISE, OR ARISING BY STATUTE, CUSTOM, COURSE OF DEALING OR TRADE USAGE, IN FACT OR BY OPERATION OF LAW, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, SATISFACTION, QUALITY, AND ADHERENCE TO DESCRIPTION, ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED. MAGNAR DOES NOT ASSUME, NOR AUTHORIZES ANY OTHER PARTY TO ASSUME FOR MAGNAR, ANY OTHER OBLIGATIONS OR LIABILITIES IN CONNECTION WITH THIS AGREEMENT.
The terms set forth in this Section 7 shall survive the expiration or termination of this Agreement.
8. Limitation of Liability. (a) To the fullest extent permitted by law, MAGNAR’s aggregate liability for any claims of loss or liability that arise out of or are related to the Services under this Agreement (including, without limitation, loss or liability arising from negligence, warranty, contract, strict liability or operation of law) shall not in any event exceed the fees paid by Subscriber for the Services.
(b) TO THE FULLEST EXTENT PERMITTED BY LAW, IN NO EVENT SHALL MAGNAR BE LIABLE FOR, OR OBLIGATED IN ANY MANNER TO PAY, UNDER ANY THEORY OF LAW, ANY OTHER DAMAGES, INCLUDING WITHOUT LIMITATION, SPECIAL, INCIDENTAL, CONSEQUENTIAL, INDIRECT, OR PUNITIVE DAMAGES OF ANY KIND. MAGNAR SHALL NOT BE LIABLE FOR DAMAGES FOR LOSS OF DATA, LOSS OF BUSINESS, PROFITS, OR PRODUCTION, LOSS OF BUSINESS OPPORTUNITY, FACILITY DOWNTIME, LOSS OF USE OF FACILITIES OR EQUIPMENT, OR GOVERNMENTAL FINES OR PENALTIES, WHETHER SUFFERED BY SUBSCRIBER OR ANY THIRD PARTY, OR WHETHER ARISING OUT OF THE USE OR INABILITY TO USE THE SERVICES OR OTHERWISE, EVEN IF MAGNAR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SUBSCRIBER SHALL HOLD HARMLESS MAGNAR FROM ALL CLAIMS, LIABILITIES, LOSSES OR DAMAGES FOR BODILY INJURY, DEATH OR DAMAGE TO PROPERTY CAUSED BY THIRD PARTIES.
(c) SUBSCRIBER UNDERSTANDS AND AGREES THAT IT: (1) HAS NO CONTRACTUAL RELATIONSHIP WITH THE UNDERLYING WIRELESS SERVICE CARRIER; (2) IS NOT A THIRD PARTY BENEFICIARY OF ANY AGREEMENT BETWEEN MAGNAR AND/OR ITS AFFILIATES AND THE UNDERLYING CARRIER; (3) THAT THE UNDERLYING CARRIER HAS NO LIABILITY OF ANY KIND TO SUBSCRIBER, WHETHER FOR BREACH OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE; (4) THAT DATA TRANSMISSIONS AND MESSAGES MAY BE DELAYED, DELETED OR NOT DELIVERED, AND 911 OR SIMILAR EMERGENCY TRANSMISSIONS MAY NOT BE COMPLETED; AND (5) THE UNDERLYING CARRIER CANNOT GUARANTEE THE SECURITY OF WIRELESS TRANSMISSIONS AND WILL NOT BE LIABLE FOR ANY LACK OF SECURITY RELATING TO THE USE OF THE SERVICES.
The terms set forth in this Section 8 shall survive the expiration or termination of this Agreement.
9. Proprietary Information; Confidentiality. Subscriber acknowledges and agrees that MAGNAR (or MAGNAR’s licensors) owns all right, title, and interest in all of the intellectual property and proprietary information that may be used in producing, or that may be incorporated into, the Services, which shall include, by way of example and not limitation, all software and firmware in the Equipment, all current and future worldwide patents and patent applications (including, without limitation, all reissues, divisions, renewals, extensions, continuations and continuations-in-part), inventions (whether patentable or not), copyrights (including, without limitation, rights in audiovisual works and moral rights), trade secrets, trademarks, service marks, trade names, and all other intellectual property rights and proprietary rights, whether arising under the laws of the United States, or any other country, state or jurisdiction (collectively, “MAGNAR Proprietary Information”). Subscriber acknowledges and agrees that Subscriber shall not acquire any rights to the MAGNAR Proprietary Information, except as may otherwise be expressly agreed to in this Agreement. Subscriber shall have a limited, royalty-free, nonexclusive, nonassignable, nonsublicensable, license to use the MAGNAR Proprietary Information solely for the use of the Services during the term of this Agreement. Subscriber shall not, nor shall it allow any third party to, use any MAGNAR Proprietary Information, or copy, decompile, disassemble, or otherwise reverse engineer any of the components of the Services, including without limitation the Devices, or attempt to do so, without the express written consent of MAGNAR. The restrictions and obligations related to MAGNAR Proprietary Information shall survive the expiration or termination of this Agreement.
Subscriber shall use MAGNAR’s trademarks and service marks (“Marks”) in connection with the Services as directed by MAGNAR and shall not otherwise use the Marks except as MAGNAR may consent in writing.
Any information that MAGNAR discloses to Subscriber pursuant to this Agreement that is identified as confidential, or that Subscriber knows or reasonably should know is confidential, shall not be used or disclosed by Subscriber without the prior written consent of MAGNAR. Subscriber, unless required to do so by operation of law. Without limiting the generality of the foregoing description of MAGNAR’s confidential information, Subscriber expressly acknowledges and agrees that any financial information concerning MAGNAR or its affiliates and any agreements between MAGNAR or its affiliates and any of their respective vendors that may be disclosed to Subscriber are trade secrets and/or confidential information of MAGNAR and shall be protected from disclosure to third-parties to the fullest extent permitted by law. Subscriber has no rights or interests of any kind in such information, except as otherwise expressly agreed to in writing by the parties. The restrictions and obligations related to confidential information shall survive the expiration or termination of this Agreement.
The terms set forth in this Section 9 shall survive the expiration or termination of this Agreement.
10. Patent, Trademark, and Copyright Infringement. Subject to the terms set forth in this Section, MAGNAR shall defend and indemnify Subscriber against any damages finally awarded against Subscriber in any third party suit or proceeding to the extent that such damages are based solely on a claim of direct infringement by the Services of a United States or Canadian patent, trademark or copyright, provided that (a) Subscriber notifies MAGNAR in writing promptly, but in no event later than thirty (30) days of Subscriber’s obtaining knowledge of a potential claim, (b) MAGNAR has sole control of the defense of such claim and all related settlement negotiations, and (c) Subscriber provides to MAGNAR, at MAGNAR’s reasonable expense, all information, assistance, and authority necessary for the defense or settlement of such claim. In the event that the use of any Services is enjoined or restricted as a result of such claim, MAGNAR shall have the option, at its expense, and in full satisfaction of any liability under this Agreement, to (i) procure for Subscriber the right to continue to use the Services, (ii) modify the applicable components of the Services so that the Services, without being materially adversely affected, become non-infringing, or (iii) terminate the Services.
Notwithstanding the foregoing, MAGNAR shall have no liability for any claim of infringement to the extent that such claim is based on Services used for any purposes other than those specified or intended by MAGNAR or in combination with any software, hardware, or data where, in the absence of such combination, the Services would not have been infringing.
The terms set forth in this Section shall survive the expiration or termination of this Agreement.
11. Indemnification. Subscriber shall hold harmless, indemnify and defend, including payment of reasonable attorneys’ fees, MAGNAR and its directors, officers, employees, affiliates, successors and assigns from and against any and all third party claims for losses, bodily injuries, costs, damages, expenses, fines, penalties, liabilities or claims of any kind (collectively “Claims”) (a) that arise out of this Agreement, or out of the use, acts, or omissions of Subscriber in connection with any of the Services, and (b) for bodily injury, death or damage to property caused by third parties.
The obligations set forth in this Section 11 shall survive the expiration or termination of this Agreement.
12. Force Majeure. Neither party shall be liable or responsible for any failure of performance, or for any delay in performance of any obligation hereunder (excepting Subscriber’s obligation to make payments pursuant to the Agreement), if such failure or delay is due to a cause beyond the control of the party relying on this provision, including, without limitation, acts of God or public enemy, war, riot, civil commotion, strike, fire, flood, shortage of labor or materials, strike or labor dispute, governmental law, regulation or ordinance, order of a court of competent jurisdiction, executive decree or order, earthquake, accident, explosion, casualty, or embargo.
(a) If either MAGNAR or Subscriber are in default of their obligations under this Agreement and such default is not cured within twenty (20) days (provided that if the default is the failure of Subscriber to pay any amounts due, the applicable cure period shall be seven (7) days) after written notice of such default is given by the other party, the non-defaulting party may terminate this Agreement. In the event that MAGNAR terminates the Agreement due to a Subscriber default, Subscriber shall be immediately liable for payment of all fees for the entire term of the Agreement. A breach shall be deemed to have occurred if a party materially fails to perform any of the obligations imposed upon it under the terms of this Agreement, becomes insolvent or bankrupt, admits in writing its inability to pay its debts as they mature, makes an assignment for the benefit of creditors, ceases to function as an ongoing concern or to conduct its operations in the normal course of business. In the event that Subscriber terminates the Agreement due to a MAGNAR default, Subscriber’s sole remedy shall be to be refunded any prepaid fees for the balance of the term of this Agreement.
(b) MAGNAR may terminate this Agreement at any time in the event that it is unable to obtain any supplies, materials or services from third parties on commercially reasonable terms, in which event MAGNAR’s sole obligation shall be to refund any prepaid fees for the balance of the term of this Agreement.
(c) Upon the expiration or termination of this Agreement for any reason, Subscriber shall (i) return all of the Equipment, and (ii) cease the use of and return, or destroy at MAGNAR’s request, all MAGNAR Proprietary Information in its possession and shall cease all use of MAGNAR Proprietary Information.
14. Compliance with Laws. Subscriber shall comply with all laws and regulations governing the purchase and use of Services, including, without limitation, obtaining, satisfying, and adhering to the terms of all licenses, permits, and registrations.
15. Assignment. Subscriber’s rights and obligations hereunder may not be assigned, in whole or in part, without the written consent of MAGNAR, and any assignment or attempted assignment shall be void. MAGNAR may assign its rights, liabilities, and obligations hereunder to one or more of its affiliates or to any successor entity.
16. Independent Contractor. MAGNAR and Subscriber each covenant and agree that it is and will remain, notwithstanding this Agreement, an independent contractor, and that this Agreement does not constitute a partnership or joint venture between the parties. MAGNAR and Subscriber each covenant and agree that the present Agreement does not grant to either party the authority to act for or on behalf of the other, nor to bind or commit the other in any way. MAGNAR and Subscriber shall each operate its business as an independent business with the full responsibility for the payment of all related expenses and other obligations of the respective entity.
17. Governing Law. This Agreement shall be governed by and construed under the laws of the State of New Jersey, without giving effect to any choice of law principles that would require the application of the laws of a different jurisdiction. Any proceeding arising out of, or relating to, this Agreement may be brought in the courts of the State of New Jersey, County of Camden, or if it has or can acquire jurisdiction, in the United States District Court for the District of New Jersey, and the parties each irrevocably submits to the exclusive jurisdiction of each such court in any such proceeding, waives any objection it may have to venue, including without limitation, the doctrine of forum non conveniens, agrees that all claims in respect of the proceeding shall be heard and determined only in such court and agrees not to bring any proceeding arising out of this Agreement in any other court.
18. Subcontractors. MAGNAR may, in its sole discretion, use third party contractors to fulfill its obligations under this Agreement.
19. Notices. Any notice required or permitted under the terms of this Agreement or required by law must be in writing and must be delivered (i) in person, or (ii) by first class registered mail, or air mail, as appropriate, posted and fully prepaid. Notices to Subscriber shall be addressed to Subscriber’s billing address; notices to MAGNAR shall be addressed to Magnar, LLC, 11 E. Taylor Ave., Audubon, NJ 08106. Notices will be considered to have been given at the time of actual delivery in person, four (4) business days after deposit in the mail as set forth above, or upon receipt of facsimile confirmation. Either party may change its address for such notice, by notice to the other party given in accordance with this Section.
20. Waiver. Any waiver of the provisions of this Agreement or of a party’s rights or remedies under this Agreement must be in writing to be effective. Failure, neglect, or delay by a party to enforce the provisions of this Agreement or its rights or remedies at any time, will not be construed as a waiver of such party’s rights under this Agreement and will not in any way affect the validity of the whole or any part of this Agreement or prejudice such party’s right to take subsequent action. No exercise or enforcement by either party of any right or remedy under this Agreement will preclude the enforcement by such party of any other right or remedy under this Agreement or that such party is entitled by law to enforce.
21. Construction. This Agreement and any instrument referred to herein or executed and delivered in connection herewith, will not be construed against any party as the principal draftsperson hereof or thereof. The section and paragraph headings used in this Agreement are inserted for convenience only and will not affect the meaning or interpretation of this Agreement. Unless otherwise expressly stated to the contrary herein, all remedies are cumulative, and the exercise of any express remedy by either party herein does not by itself waive such party’s right to exercise its other rights and remedies available at law or in equity.
22. No Third–Party Beneficiaries. The parties hereto expressly agree that there are no third-party beneficiaries of this Agreement.
23. Entire Agreement; Severability. This Agreement constitutes the entire agreement between MAGNAR and Subscriber relating to the subject matter of this Agreement and supersedes all previous communications, representations, understandings and agreements, either oral or written, between the parties with respect to said subject matter. No terms, provisions or conditions of any purchase order, acknowledgement or other business form that either party may use in connection with the transactions contemplated by this Agreement will have any effect on the rights, duties, or obligations of the parties under this Agreement, regardless of any failure of a receiving party to object to such terms, provisions or conditions. The provisions of this Agreement may not be amended, modified, or waived except by a written instrument duly executed by both parties. Each of the terms herein is severable from the others. In the event that any portion of these terms (including without limitation with respect to warranties and limitations of liability) is determined in any suit or proceeding to be invalid or unenforceable, such terms shall be reformed to the extent necessary to be valid and enforceable. Such a determination shall not affect the remaining terms, all of which shall remain valid and enforceable.
TWIC® is a registered trademark of the U.S Department of Homeland Security