REVENUE SHARING AGREEMENT

 

 

THIS REVENUE SHARING AGREEMENT (this “Agreement”) is made and entered into as of
October 11, 2018 by and between PearTrack Security Systems, Inc., a Nevada
corporation, at 1327 Ocean Avenue Suite B Santa Monica, CA 90401 (the
“Company”), and Intellectual Property Network, Inc. a Florida corporation with
its principal address at 6147-6151 Washington Street, Hollywood Florida 33023
 (“SAFER” or “Revenue Share Recipient”), individually a “Party” and collectively
they are “Parties” to this Agreement.

 

WHEREAS, the Company has entered that certain Intellectual Property Purchase
Agreement for the Sale and Purchase of certain from SAFER (the “Purchase
Agreement”); and 

 

WHEREAS, as part of the Purchase Agreement’s consideration, the Company agreed
to enter a Revenue Sharing Agreement (“Revenue Agreement”) with SAFER, Inc.
whereby the Company will pay SAFER up to One Million Dollars ($1,000,000) from
the Adjusted Gross Revenue generated by the Company on terms and conditions more
particularly set forth herein; and

 

WHEREAS, the Company has been authorized its Board of Directors to enter a
Revenue Agreement with SAFER on the terms and conditions set forth herein
below. 

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and to consummate the terms of the Purchase
Agreement, which the Parties hereby acknowledge this Agreement to be an integral
part thereof, it is hereby agreed as follows:  

 

1.Definitions. 

 

1.1In this Agreement the following words and phrases shall have the following
meanings unless the context requires otherwise: 

 

1.1.1 “Agreement” means this Agreement, and all the exhibits, Schedules and
other documents attached to or referred to in this Agreement, and all amendments
and supplements, if any, to this Agreement. 

 

1.1.2“Adjusted Gross Revenue” means for this Agreement all revenue accounted to
the Company from the Defined Revenue Sources, as defined in Section 1.1.6 below,
less Cost of Goods Sold, as defined herein in Section 1.1.5. 

 

1.1.3“Adjusted Gross Revenue Sharing Percentage” shall mean an amount equal to
three percent (3%) of the Adjusted Gross Revenue. 

 

1.1.4“Business Day” shall mean a day other than a day, which is a Saturday,
Sunday, or Public or bank holiday in Los Angeles, California. 

 

1.1.5“Cost of Goods Sold” (COGS) is defined herein as the direct costs
attributable to the production of the goods sold by each Defined Revenue Source
company. This amount includes the cost of the materials used in creating the
good and excludes direct labor costs used to produce the good. In addition,
“COGS” will include the direct costs associated with commission from sales
representatives, sales agents and sales partnerships, if applicable.  

 

2.Revenue Sharing.  During the Term of this Agreement, the Company shall pay to
SAFER, the Adjusted Gross Revenue Sharing Percentage, in cash or by wire
transfer as directed by SAFER,  calculated based on the Adjusted Gross Revenue
accounted by the Company and its subsidiaries during each calendar quarter
(January through March being the First Quarter, April through June being the
Second Quarter, July through September being the Third Quarter and October
through December being the Fourth Quarter) commencing with the end of the first
calendar quarter after the date of this Agreement.  All payments of the Adjusted
Gross Revenue Sharing Percentage shall be paid within thirty (30) days of the
last day of the calendar quarter during which revenues are accounted, time being
of the essence of this provision.  At the time of payment, the Company shall
also deliver SAFER an accurate and complete written statement setting forth the
Company’s calculations of the Adjusted Gross Revenue Sharing Percentage,
including the basis of the gross revenues from the Defined Revenue Sources, the
Cost of Goods Sold and the Adjusted Gross Revenues during the quarter, certified
as to accuracy by an appropriate representative of the Company.   

 

3.Term.   This Agreement shall continue to be in force until the earliest to
occur of (i) the date on which SAFER has received aggregate payments of the
Adjusted Gross Revenue Sharing Percentage in an amount totaling One Million
Dollars ($1,000,000), or (ii) the date on which SAFER receives payment resulting
from a sale as provided in Section 4 below, or (iii) the date on which the
Parties, by mutual written consent, agree to terminate this Agreement. 

 

4.Payment on Sale of Purchased Assets.  In the event the Company (or any
affiliate or subsidiary of the Company which acquires the Purchased Assets under
the terms of the Purchase Agreement) sells or otherwise transfers (i) any of the
“Purchased Assets” (as that term is defined in the terms of the Purchase
Agreement) or (ii) all or substantially all of its operating assets to a third
party for valuable consideration and the aggregate payments of the Adjusted
Gross Revenue Sharing Percentage paid by Company to SAFER at the time of such
sale or transfer total less than One Million Dollars ($1,000,000) in the
aggregate, then the Company agrees pay SAFER the difference between the total,
aggregate amount of all Adjusted Gross Revenue Sharing Percentage payments made
by the Company  at such time and One Million Dollars ($1,000,000).  Such amount
due under this Section 4 shall be payable by the Company to SAFER in cash or
wired funds (as directed by SAFER) within thirty (30) days of the last day of
the calendar quarter during which the sale or transfer occurs, time being of the
essence of this provision.         

 

6.  Waiver.  The waiver of the breach of any provision of this Agreement will
not operate or be construed as a waiver of any subsequent breach of the same or
other provision hereof. 

 

7.  Notices.  All notices and other communications under this Agreement will be
in writing and will be given by personal or courier delivery, facsimile or first
class mail, certified or registered with return receipt requested, and will be
deemed to have been duly given upon receipt if personally delivered or delivered
by courier, on the date of transmission if transmitted by facsimile, or three
business days after mailing if mailed, to the addresses of the Company and SAFER
contained in the records of the Company at the time of such notice. 

 

To PearTrack Security Systems, Inc.:

 

In care of:Kyle W. Withrow 

Address:1327 Ocean Avenue, Suite B 

Santa Monica, CA 90401 

Tel:(310) 899-4442 

Fax:(888) 899-3966 

Email:kylew@peartracksecuritysystems.com 

 

To SAFER, Inc.:

 

In care of:Nathaniel T. Bradley 

Address:6147-6151 Washington Street 

Hollywood, FL 33023 

Tel:(520) 631-9595 

Fax: 

Email:nate@theipn.com 

 

8.  Headings. The section headings used in this Agreement are intended for
convenience of reference and will not by themselves determine the construction
or interpretation of any provision of this Agreement. 

 

9. Governing Law.  This Agreement will be governed by and construed in
accordance with the laws of the state of Nevada, excluding those laws that
direct the application of the laws of another jurisdiction. 

 

10. Counterparts and Facsimile Signatures.  This Agreement may be executed in
two or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.  This Agreement may
be executed by facsimile signature (including signatures in Adobe PDF or similar
format). 

 

11. Enforcement.  If any portion of this Agreement is determined to be invalid
or unenforceable, such portion will be adjusted, rather than voided, to achieve
the intent of the parties to the extent possible, and the remainder will be
enforced to the maximum extent possible.  In the event the parties engage in
litigation relating to or arising out of this Agreement or the performance
thereof, the parties agree that the Court shall be asked to determine which
party is the prevailing party to the proceeding or proceedings, and the
non-prevailing party or parties shall, jointly and severally, be liable to the
prevailing party in the amount of all reasonable attorney’s fees, court costs,
and all other expenses, incurred by the prevailing party to the proceeding in
addition to any other relief to which the prevailing party may be entitled. 

 

 

IN WITNESS, WHEREOF, the parties hereto have executed this Revenue Sharing
Agreement as of the date set forth in the preamble hereto. 

 

 

 

PEARTRACK SECURITY SYSTEMS, INC.

 

 

 

 

By: /s/ Kyle W. Withrow 

Name:Kyle W. Withrow  

Title:President/CEO  

 

 

 

 

 

SAFER, INC.

 

 

 

 

By: /s/ Nathaniel T. Bradley 

Name:Nathaniel T. Bradley 

Title:President/CEO