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"RIVED

JUN 27 2013
. AGREEMENT BETWEEN THE TOWN OF PARADISE VALLEY, ARIZONA
AND REDFLEX TRAFFIC SYSTEMS, INC.
FOR PHOTO RED LIGHT AND SPEED ENFORCEMENT
PROGRAM GOODS AND SERVICES

This Agreement ("Agreement") is made as of this 1st day of July, 2013, (the "Execution
Date") by and between Redflex Traffic Systems, Inc. with offices at 23751 N. 23 rd
Avenue, Phoenix, AZ 85085 ("Redflex"), and the Town of Paradise Valley, an Arizona
municipal corporation, with offices at 6401 E. Lincoln Drive, Paradise Valley, AZ 85253
(the "Town").
RECITALS
WHEREAS, Redflex has exclusive knowledge, possession and ownership of certain
equipment, licenses, applications, and citation processes related to digital photo red light
and speed enforcement systems; and

WHEREAS, the Town desires to engage the services of Redflex to provide certain
equipment, processes and back office services so that Authorized Employees ofthe Town
are able to monitor, identify and enforce automotive traffic intersection red light and
speed violations; and
WHEREAS, it is a mutual objective of both Redflex and the Town to reduce the
incidence of vehicle collisions at the traffic intersections and Town streets that will be
monitored pursuant to the terms of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained herein, and for
other valuable consideration received, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

1.

AGREEMENT
DEFINITIONS. In this Agreement, the words and phrases below shall have the
following meanings:
1.1
"Authorized Employee(s)" means the Town Project MjUlager or such other
individual(s) as the Town shall designate to make day-to-day decisions on
behalf of the Town on the operation of the Photo Enforcement System.
1.2
"Authorized Violation" means each Potential Violation in the Violation
Data for which a Citation or Notice of Violation shall be issued using the
Redflex System.
1.3
"Awareness Strategy" means materials used in and for the education of the
Town's driving public as to why the Photo Enforcement Program is being
implemented, how it functions and the locations of the Photo Enforcement
Systems.
"Citation(s)" refers to those documents which are mailed or otherwise
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directed to be delivered by Redflex to the violator using the appropriate
Enforcement Documentation with respect to each Authorized Violation and
filed with the Paradise Valley Municipal Court.

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"Confidential or Private Infonnation" means, with respect to any Person,


any infonnation, matter or thing of a secret, confidential or private nature,
whether or not so labeled, which is connected with such Person's business
or methods of operation or concerning any of such Person's suppliers,
licensors, licensees, customers or others with whom such Person has a
business relationship, and which has current or potential value to such
Person or the unauthorized disclosure of which could be detrimental to such
Person, including but not limited to:
1.5.1 Matters of a business nature, including but not limited to infonnation
relating to development plans, costs, finances, marketing plans, data,
procedures, business opportunities, marketing methods, plans and
strategies, the costs of construction, installation, materials or
components, the prices such Person obtains or has obtained from its
clients or customers, or at which such Person sells or has sold its
services; and
1.5.2 Matters of a technical nature, including but not limited to product
infonnation, trade secrets, know-how, fonnulae, innovations,
inventions, devices, discoveries, techniques, fonnats, processes,
methods, specifications, designs, patterns, schematics, data, access or
security codes, compilations of infonnation, test results and research
and development projects. For purposes of this Agreement, the tenn
"trade secrets" shall mean the broadest and most inclusive
interpretation of trade secrets.
1.5.3 Notwithstanding the foregoing, Confidential Infonnation will not
include infonnation that: (i) was generally available to the public or
otherwise part of the public domain at the time of its disclosure,
(ii) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or
omission by any party hereto in breach of this Agreement, (iii) was
subsequently lawfully disclosed to the disclosing party by a person
other than a party hereto, (iv) was required by a court of competent
jurisdiction to be disclosed, or (v) was required by applicable state
law to be disclosed.
"Designated Intersection Approaches" means the Intersection Approaches
identified by the Town as current and future locations at which a system
shall be or is installed by Redflex and/or the Town as a Photo Red Light and
Speed Enforcement installation, as further provided for herein. See Exhibit
"A" for the list of current and potential future Designated Intersection
Approaches.
"Electronic Signature" means the method through which the Authorized
Agent indicates his or her approval of the issuance of a Citation or Notice of
Violation in respect of a Potential Violation using the Redflex System, when
and if the Town chooses to implement Town approval for Redflex to issue
Citations and Notices of Violation.
"Enforcement Documentation" means the necessary and appropriate
documentation related to the Photo Red Light and Speed Enforcement

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Program, including but not limited to: warning letters, Notices of Violation,
citation notices (using the specifications of the Town), a numbering
sequence for use on all citation notices (in accordance with applicable
rules), instructions to accompany each issued Citation (including in such
instructions a description of basic procedures, payment options and
information regarding the viewing of images and data collected by the
Redflex System), chain of custody records, criteria regarding operational
policies for processing Citations (including with respect to coordinating with
the applicable vehicle registry), and technical support documentation for
applicable judicial and hearing officers.
"Equipped Motor Vehicles" means motor vehicles and/or trailers that have
been obtained by Redflex, or, as the case may be, by the Town, from a
manufacturer and which are modified and equipped by Redflex to be part of
the Redflex Photo Enforcement System.
"Equipment" means any and all vehicles, approach cameras, sensors,
equipment, components, products, software, and other tangible and
intangible property relating to the Redflex Photo Enforcement System(s),
whether owned by the Town or Redflex.
"Governmental Authority" means any domestic or foreign government,
governmental authority, court, tribunal, agency or other regulatory,
administrative, or judicial agency, commission or organization, and any
subdivision, branch or department of any of the foregoing.
"Installation Date" means the date on which Redflex completes the
construction and installation of each Intersection Approach or the
modification and preparedness of each Equipped Motor Vehicle in
accordance with the terms of this Agreement so that each such Intersection
Approach or Equipped Motor Vehicle is operational for the purposes of
functioning with the Photo Red Light and Speed Enforcement Program.
"Intellectual Property" means, with respect to any Person, any and all now
known or hereafter known tangible and intangible (i) rights associated with
works of authorship throughout the world, including, but not limited to,
copyrights, moral rights and mask-works, (ii) trademark and trade name
rights and similar rights, (iii) trade secrets rights, (iv) patents, designs,
algorithms and other industrial property rights, (v) all other intellectual and
industrial property rights (of every kind and nature throughout the universe
and however designated), whether arising by operation of law, contract,
license, or otherwise, and (vi) all registrations, initial applications, renewals,
extensions, continuations, divisions or reissues thereof now or hereafter in
force (including any rights in any of the foregoing), of such Person.
"Intersection Approach" means a conduit of travel with up to four (4)
contiguous lanes from the curb (e.g., northbound, southbound, eastbound or
westbound) on which at least one (1) system has been installed by Redflex
for the purposes of facilitating Photo Red Light and Speed Enforcement by
the Town.
"License Plate Reader" or "LPR" means an all-in-one device that captures
license plate images and processes the images to extract the license plate

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number. The software enables the LPR system to read license plates from
all fifty states. The system can be configured to compare license plate
numbers with those on a "hot list" (Amber and Silver alerts, local vehicles
of interest, NCIC list, etc.) and trigger an alarm if a match is detected.
"Notice of Violation" refers to those documents which are marked or
otherwise directed to be delivered by Redflex to the registered owner of a
vehicle for which a violation has been detected, but which does not meet the
criteria for issuance of a Citation. Notices of Violations are not filed with
the Paradise Valley Municipal Court.
"Operational Period" means the period of time during the Term,
commencing on the Execution Date, during which the Photo Red Light and
Speed Enforcement Program is functional in order to permit the issuance of
Citations and Notices of Violations using the Redflex System.
"Person" means a natural individual, company, Governmental Authority,
partnership, firm, corporation, legal entity, or other business association.
"Photo Enforcement Program," "Photo Enforcement System," "Photo Red
Light and Speed Enforcement" or "Photo Red Light and Speed Enforcement
Program" means the process by which the monitoring, identification and
enforcement of Violations is facilitated by the use of certain equipment
which may include, but is not limited to, Intersection Approaches or
Equipped Motor Vehicles, SMARTcam System, Saius System,
REDFLEXred System, REDFLEXspeed System, REDFLEXstop
System,
REDFLEXslimline
System,
SMARTopsTM
System,
SMARTscene System applications, and back office processes of Redflex
such as cameras, flashes, central processing units, signal controller
interfaces and sensor arrays which, collectively, are capable of measuring
Violations and recording such Violation data in the form of photographic
and digital video evidence.
"Potential Violation" means, with respect to any motor vehicle passing
through a Designated Intersection Approach or through a portion of a
roadway monitored by an Equipped Motor Vehicle, the data collected by the
Redflex System with respect to such motor vehicle prior to review of such
data and determination whether a Violation has occurred.
"Proprietary Property" means, with respect to any Person, any written or
tangible property owned or used by such Person in connection with such
Person's business, whether or not such property is copyrightable or also
qualifies as Confidential Information, including, without limitation,
products, samples, equipment, files, lists, books, notebooks, records,
documents, memoranda, reports, patterns, schematics, compilations,
designs, drawings, data, test results, contracts, agreements, literature,
correspondence, spread sheets, computer programs and software, computer
print outs, other written and graphic records and the like, whether originals,
copies, duplicates or summaries thereof, affecting or relating to the business
of such Person, financial statements, budgets, projections and invoices.
"Redflex Marks" means all trademarks registered in the name of Redflex or
any of its affiliates, such other trademarks as are used by Redflex or any of

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its affiliates on or in relation to Photo Red Light and Speed Enforcement at


any time during the Term this Agreement, service marks, trade names, logos,
brands and other marks owned by Redflex, and all modifications or
adaptations of any of the foregoing.
"Redflex Project Manager" means the project manager appointed by
Redflex in accordance with this Agreement, who shall be responsible for
overseeing the construction and installation of the Designated Intersection
Approaches, the Equipped Motor Vehicles, and the implementation the
Photo Red Light and Speed Enforcement Program, and who shall have the
power and authority to make management decisions relating to Redflex's
obligations pursuant to this Agreement, including, but not limited to,
change-order authorizations.
"Redflex Report System" means the proprietary portion of the
SMARTopSTM System that allows the Town to generate reports pertaining to
the operation and performance of the Photo Enforcement System. Reports
include, but are not limited to, incident lookups, management, dismissal,
court scattergram, red-light offender, speed offender and traffic statistics.
"Redflex System" means, collectively, the Saius and/or SMARTcam
System, the SMARTscene System, and all of the other equipment,
applications, cameras, sensors, components, motor vehicles and other
tangible and intangible property relating thereto, to enable Redflex to
enforce a minimum of one lane of travel at a designated location, the
SMARTopSTM System, the Photo Enforcement Program, and all of the other
equipment, applications, back office processes, servers, off-site backup
systems, software and other tangible and intangible property relating thereto.
"REDFLEXred HALOTM" means an intelligent collision prevention
system designed to help prevent "T -bone" (90) crashes. When the system
detects that a vehicle will run a red light and be in the intersection during the
green phase of the cross-traffic, it will maintain the cross-traffic light as red
to prevent that flow of traffic from entering the intersection.
''REDFLEXred System" means the proprietary digital red light photo
enforcement system of Redflex relating to the Photo Red Light Enforcement
Program.
''REDFLEXslimline System" means the proprietary ultra compact photo
enforcement system of Redflex relating to the Photo Enforcement Program.
''REDFLEXspeed System" means the proprietary digital speed photo
enforcement system of Redflex relating to the Photo Speed Enforcement
Program.
"Red Light Violation Criteria" and "Speed Violation Criteria" mean the
standards and criteria by which Potential Violations will be evaluated, which
standards and criteria shall include, but are not limited to, the duration of
time that a traffic light must remain red prior to a Violation being deemed to
have occurred, and the location(s) in an intersection which a motor vehicle
must pass during a red light signal prior to being deemed to have committed
a Violation, and speeds that constitute a Violation, all of which shall be in
compliance with all applicable laws, rules and regulations of Governmental

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2.

Authorities. More specific violation criteria may also be established in the


business rules to be mutually developed and approved by the Town and
Redflex.
''Salus System" means the proprietary software system that controls the
photo enforcement system of Redflex relating to the Photo Enforcement
Program.
''SMARTcam System" means the proprietary software system that
controls the photo enforcement system of Redflex relating to the Photo
Enforcement Program.
"SMARTopsTM System" means the proprietary back-office processes of
Redflex relating to the Photo Red Light Enforcement Program.
''SMARTscene System" means the proprietary digital video camera unit,
hardware and software required for providing supplemental violation data.
"Town Project Manager" means the project manager appointed by the Town
in accordance with this Agreement, who shall be an Authorized Employee
and shall be responsible for overseeing the installation of the Intersection
Approaches, the Equipped Motor Vehicles, and the implementation of the
Photo Red Light and Speed Enforcement Program; who shall have the
power and authority to make management decisions relating to the Town's
obligations pursuant to this Agreement, including, but not limited to, change
order authorizations, subject to any limitations set by the Town Councilor
by law.
"Traffic Signal Controller Boxes" means the signal controller interface and
vehicle detection equipment owned and operated by the Town, including,
but not limited to, the Town's traffic signal controller, Town's vehicle
detection equipment, Town's communication equipment, Town's controller
cabinet, etc.
"Vehicle Code" means any federal, state, or local traffic laws, statutes or
regulations pertaining to the lawful operation of a motor vehicle.
"ViolationCs)" means any traffic violation authorized for photo enforcement
when prohibited by the Vehicle Code or any applicable rule, ordinance,
regulation or law of any other Governmental Authority, including, but not
limited to, operating a motor vehicle contrary to traffic signals, and
operating a motor vehicle without displaying a valid license plate or
registration.
"Violations Data" means the images and other Violations data gathered by
the Redflex System at the Designated Intersection Approaches and by the
Equipped Motor Vehicles.
"Warning Period" means a period after each Installation Date of a new
Intersection Approach, wherein, based on the determination of the Town
Project Manager, in hislher sole discretion, only warning notices shall be
issued, commencing within three (3) days after the system has been
installed, tested and found to be fully operational.

TERM. The initial term of this Agreement shall commence as of the Execution
Date and shall continue for a period of five (5) years after the Execution Date

(the "Initial Term"). The Town shall have the right, but not the obligation, to extend
the term of this Agreement for up to three (3) additional consecutive five (5) year
periods following the expiration of the Initial Term (each, a "Renewal Term" and
collectively with the Initial Term, the "Term"). Upon the expiration of the Initial
Term or a Renewal Term renewal shall be automatic unless the Town exercises its
right not to renew. The Town may exercise, with or without cause, the right not to
extend the term of this Agreement for a Renewal Term by providing written notice
to Redflex not less than thirty (30) days prior to the last day of the Initial Term or
any subsequent Renewal Term, as the case may be.

3.

SERVICES. Redflex shall provide the Photo Red Light and Speed Enforcement
Program to the Town, in each case in accordance with the terms and provisions set
forth in this Agreement.
3.1
Existing Installations. Redflex shall continue to operate all five (5)
existing Intersection Approaches (the "Existing Intersection Approaches")
and two (2) existing Equipped Motor Vehicles (the "Existing Equipped
Motor Vehicles") that which were in service through a prior agreement with
Redflex (the descriptions of which are contained in Exhibit "A" hereto, such
Existing Intersection Approaches and Existing Equipped Motor Vehicles to
be collectively described as the "Existing Installations"). Redflex shall
update the existing installations with the most current Redflex System
within ninety (90) days of the date of notification in writing by the Town to
Redflex approving the installation of the new technology.
3.2
New Installations. With respect to the construction and installation of new
Designated Intersection Approaches (including the installation of the
Redflex System at such Designated Intersection Approaches) and the
acquisition of new Equipped Motor Vehicles (collectively, "New
Installations"), Redflex shall install such New Installations in the manner
and upon the timing specified in a Change OrderlPurchase Order approved
by the Town.
3.3
Operation, Maintenance, Repair, Replacement and Upgrade. With respect
to the operation, maintenance, repair, replacement and upgrade of the
Redflex System at the Designated Intersection Approaches, the Town and
Redflex shall have the respective rights and obligations set forth on Exhibit
"c" attached hereto.
3.4
Violation Processing. During the Operational Period, Violations shall be
processed as follows:
3.4.1 All Violations Data shall be stored on the Redflex System, but shall
be the property of the Town.
3.4.2 The Redflex System shall process Violations Data gathered from the
Existing Installations and the New Installations into a format capable
of review by the Town's Authorized Employees via the Redflex
System should the Town elect to do so.
3.4.3 The Photo Enforcement System will be accessible by the Authorized
Employees through a secure and encrypted connection by use of a

3.5

confidential user account on a computer equipped with a high-speed


Internet connection and an approved web browser.
3.4.4 Redflex shall provide the Authorized Employees with access to the
Redflex System for the purposes of generating necessary reports,
reviewing Violations Data, and other purposes (including review and
approval of Citations and Notices of Violations should the Town
decide to do so) within seven (7) days of the gathering of the
Violation Data from the Existing Installations and the New
Installations.
3.4.5 The Town shall designate Redflex as its agent to review the
Violations Data and to determine whether a Citation or Notice of
Violation shall be issued with respect to each Potential Violation
captured within such Violation Data, and may, at the Town's sole
option, elect to designate Authorized Employees of the Town to
review Potential Violations to determine whether to issue a Citation
or Notice of Violation. The Town shall make this election in
writing, with a mutually agreed upon effective date, notifying
Redflex of the Town's election to commence review of all Potential
Violations to determine whether to issue a Citation or Notice of
Violation. If and when the Town elects to review Potential
Violations to determine whether to issue a Citation or Notice of
Violation, the Town's notification to Redflex to issue a Citation or
Notice of Violation shall be in the form of an Electronic Signature
using the software or other applications or procedures provided by
Redflex on the Redflex System for such purpose.
3.4.6 With respect to each Authorized Violation, Redflex shall print and
mail a Citation or Notice of Violation within seven (7) days after
each Violation is detected; provided, however, during the Warning
Period, warning notices shall be issued, at Redflex' s expense, for all
Violations detected.
3.4.7 Redflex shall provide a toll-free telephone number for the purposes
of answering citizen and Citation and Notice of Violation recipient
mqumes.
3.4.8 Upon Redflex's receipt of a written request from the Town it shall
provide expert witnesses, as necessary, to testify as to the accuracy,
calibration, maintenance, repair records, technical operation and
effectiveness of the Redflex camera system. Redflex shall provide
expert witnesses for use by the Town in prosecuting speed or red
light violations; however, the Town shall use reasonable efforts to
seek judicial notice in lieu of requiring Redflex to provide such
expert witnesses. Town will make all efforts to give Redflex at least
fourteen (14) calendar days advanced notice of court proceedings.
Reports.
3.5.1 Redflex shall permit the Authorized Employees to generate reports
using the Redflex Report System.

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Redflex shall provide regular reports, and other reports as needed by


the Town, for management and accounting purposes.
The
frequency, content, format and manner of delivery of these reports
shall be included in the business rules for processing violations
agreed to by the Town and Redflex. Redflex shall provide requested
data and information related to the Town's automated photo
enforcement program upon request of the Town.
3.5.3 Upon Redflex's receipt of a written request from the Town, Redflex
shall provide,. without cost to the Town, reports regarding the
processing and issuance of Citations and Notice of Violations, the
maintenance and downtime records of the Existing Installations and
the New Installations and the functionality of the Photo Enforcement
System with respect thereto to the Town in such format and for such
periods as the Town may reasonably request.
Records Retention.
Redflex will retain Violations Data, including
photographic evidence and data associated with the Photo Enforcement
Program for a period of at least twenty-four (24) months, or as required by
state law, whichever period is longer.
3.6.1 Redflex shall also maintain sufficient records to comply with A.R.S.
28-1060.
3.6.2 Upon written request by the Paradise Valley Police Department,
Redflex shall, at no expense to the Town, provide a digital image of
specific time periods of a
given camera suitable for long-term
retention by the police department.
Prosecution Compensation.
The Town shall diligently prosecute
Citations and Redflex shall have the right to receive, and the Town shall be
obligated to pay, the compensation set forth on Exhibit D attached hereto,
(as determined by the Town's choice, in its sole discretion, of which of the
Purchase Options shown in Exhibit "D." it chooses to require Redflex to
utilize).
Other Rights and Obligations. During the Term, in addition to all of the
other rights and obligations set forth in this Agreement, Redflex and the
Town shall have the respective rights and obligations set forth on Exhibit
"E" attached hereto.
New Technology or Services. On or before December 31 of each year,
Redflex may propose additional technology and services not otherwise
specified or available in this Agreement, with Redflex's associated pricing
for such additions for use by the Town in the following Town fiscal year.
The Town may accept or reject such proposed additional technology and
services, and may choose to negotiate the prices of such if and when the
Town decides to add such new technology or services.)
Change OrderslPurchase Orders.
The Town may from time to time
request changes to the work required to be performed or the addition of
products or services (such as the Town exercising its option to add New
Installations or New Technology or Services) by providing written notice
thereof to Redflex, setting forth in reasonable detail the proposed changes

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4.

(each a "Change OrderlPurchase Order Notice"). Upon Redflex's receipt of


a Change OrderlPurchase Order Notice, Redflex shall deliver a written
statement describing the related costs, if any (each a "Change Order
Proposal"). The Change Order Proposal shall include (i) a detailed
breakdown of the charge and schedule effects, (ii) a description of any
resulting changes to the specifications and obligations of the parties, (iii) a
schedule for the delivery and other performance obligations, and (iv) any
other information relating to the proposed changes reasonably requested by
the Town. Following the Town's receipt of the Change Order Proposal, the
parties shall negotiate in good faith and agree to a plan and schedule for
implementation of the proposed changes, the time, manner and amount of
payment or price increases or decreases, as the case may be, and any other
matters relating to the proposed changes; provided, however, in the event
that any proposed change involves only the addition of equipment or
services to the Existing Installations and the New Installations, to the
maximum extent applicable, the pricing terms set forth in Exhibit "D" shall
govern. Any failure of the parties to reach agreement with respect to any of
the foregoing as a result of any proposed changes shall not be deemed to be
a breach of this Agreement, and any disagreement shall be resolved in
accordance with Section 10.
SampleslExpress Warranty.
Upon request by the Town in wntmg,
including by electronic mail, Redflex shall furnish a sample of any goods,
materials, and services to be supplied. Such samples submitted shall create
an express warranty that the whole of the goods, materials or services shall
equal or exceed the sample submitted.
Project Oversight and Management. Redflex shall provide and maintain
an up-to-date list of its executive management team (said team to always
identify the president, all vice-presidents, and the Redflex Project Manager),
including name, mailing address, direct office telephone, 24-hour telephone
for emergencies, and email address.

LICENSE; RESERVATION OF RIGHTS.


4.1
License. Subject to the terms and conditions of this Agreement, Redflex
hereby grants the Town, and the Town hereby accepts from Redflex upon
the terms and conditions herein specified, a non-exclusive, non-transferable
license during the Term of this Agreement to: (i) solely within the Town of
Paradise Valley, access and use the Redflex System for necessary purposes,
and to print copies of any content posted on the Redflex System in
connection therewith, (ii) disclose to the public (including outside of the
Town of Paradise Valley) that Redflex is providing services to the Town in
connection with Photo Red Light and Speed Enforcement Program pursuant
to the terms of this Agreement, and (iii) use and display the Redflex Marks
on or in marketing, public awareness or education, or other publications or
materials relating to the Photo Red Light and Speed Enforcement Program,
so long as any and all such publications or materials are approved in
advance by Redflex.

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4.2

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5.

Reservation of Rights. The Town hereby acknowledges and agrees that: (i)
Redflex is the sole and exclusive owner of the Redflex System software, the
Redflex Marks, all Intellectual Property arising from or relating to the
Redflex System, and any and all related Equipment, (ii) the Town neither
has nor makes any claim to any right, title or interest in any of the foregoing,
except as specifically granted or authorized under this Agreement, and (iii)
by reason of the exercise of any such rights or interests of the Town
pursuant to this Agreement, the Town shall gain no additional right, title or
interest therein.
Restricted Use. The Town hereby covenants and agrees that it shall not (i)
make any modifications to the Redflex System, including but not limited to
any Equipment, (ii) alter, remove or tamper with any Redflex Marks, (iii)
use any of the Redflex Marks in any way which might prejudice their
distinctiveness, validity or the goodwill of Redflex therein, (iv) use any
trademarks or other marks other than the Redflex Marks in connection with
the Town's use of the Redflex System pursuant to the terms of this
Agreement without first obtaining the prior consent of Redflex, or (v)
disassemble, de-compile or otherwise perform any type of reverse
engineering to the Redflex System, including, but not limited to, any
Equipment, or to any Intellectual Property or Proprietary Property of
Redflex, or cause or allow any other Person to do any of the foregoing.
Protection of Rights. Redflex shall have the right to take whatever action it
deems necessary or desirable to remedy or prevent the infringement of any
Intellectual Property of Redflex, including without limitation the filing of
applications to register as trademarks in any jurisdiction any of the Redflex
Marks, the filing of patent application for any of the Intellectual Property of
Redflex, and making any other applications or filings with appropriate
Governmental Authorities. The Town shall not take any action to remedy or
prevent such activities, and shall not in its own name make any registrations
or filings with respect to any of the Redflex Marks or the Intellectual
Property of Redflex without the prior written consent of Redflex.

REPRESENTATIONS AND WARRANTIES.


5.1
Redflex Representations and Warranties.
5.1.1 Authority. Redflex hereby warrants and represents that it has all
right, power and authority to execute and deliver this Agreement and
perform its obligations hereunder.
5.1.2 Intellectual Property. Redflex hereby warrants and represents that it
has the right to use any and all intellectual property pursuant to this
Agreement and that there are no third party rights, including without
limitation, existing and future patents, copyrights, trade secrets, or
other proprietary rights ("Intellectual Property Rights"); and that
should the Town be sued by any third party claiming that the Town's
use of the Redflex System violates a third party's Intellectual
Property Rights, Redflex shall defend, indemnify, and hold harmless
the Town, its officers, employees, and agents form and against all

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5.1.3

5.2

Town
5.2.1

5.2.2

5.2.3

6.

damages, losses, and costs incurred by the Town by reason of such


third party actions.
Professional Services. Redflex hereby warrants and represents that
any and all services provided by Redflex pursuant to this Agreement
shall be performed in a professional and workmanlike manner and,
with respect to the installation of the Redflex System, subject to
applicable law, in compliance with all specifications provided to
Redflex by the Town.
Representations and Warranties.
Authority. The Town hereby warrants and represents that it has all
right, power and authority to execute and deliver this Agreement and
perform its obligations hereunder.
Professional Services. The Town hereby warrants and represents
that any and all services provided by the Town pursuant to this
Agreement shall be performed in a professional and workmanlike
manner.
Equipped Motor Vehicles. In the event that future changes to the
business rules contemplate that Town employees will drive or
operate the Equipped Motor Vehicles, Redflex and the Town shall
meet to adopt modifications to the business rules to provide for
standards for such and conditions relating thereto.

TERMINATION.
6.1
Termination for Cause. Either party shall have the right to terminate this
Agreement immediately by written notice to the other if (i) state statutes are
amended to prohibit or substantially change the operation of the Photo
Enforcement Program; (ii) any appellate court having jurisdiction over
Town rules, or state or federal statute declares, that results from the Redflex
System of photo red light and speed enforcement are inadmissible in
evidence; (iii) an appellate court having jurisdiction determines that the
program is unconstitutional or illegal or that this Agreement is void; (iv) the
other party commits any material breach of any of the provisions of this
Agreement. In the event of a termination due to Section 6.1 (i), 6.1 (ii), or
6.1 (iii) above, Town shall be relieved of any further obligations for payment
to Redflex other than as specified in Exhibit "D." Either party shall have the
right to remedy a cause for termination pursuant to Section 6.1 (iv) within
forty-five (45) calendar days (or within such other time period as the Town
and Redflex shall mutually agree, which agreement shall not be
unreasonably withheld or delayed) after written notice from the non-causing
party setting forth in reasonable detail the events of the cause for
termination. If challenges to the hearing procedure become so numerous or
onerous as to result in operating costs above the current aggregate retained
fines by the Town, both parties shall meet and confer to develop and
implement a mutually agreeable remedy. If no such remedy is effective in
reducing Town costs associated with the Photo Enforcement Program, the

12

6.2

6.3

6.4

Town may terminate this Agreement with no further obligation except as


otherwise provided in Exhibit "D" and section 6.S of this agreement.
Default. The Town reserves the right to terminate any part or all of this
Agreement if Redflex:
6.2.1 Fails to carry out any term, promise or condition of the Agreement.
The Town may issue a written ten day Notice of Default to Redflex
if, in the opinion of the Town, Redflex provided materials and/or
services that do not meet the requirements specified in this
Agreement, or if Redflex attempts to impose products, services or
workmanship that are of unacceptable quality by industry standards;
6.2.2 Fails to complete the required work or fails to perform required
services within the time frames provided under this Agreement;
6.2.3 Fails to obtain or maintain required insurance coverage; or
6.2.4 Fails to make progress to perform the requirements of this
Agreement pursuant to the schedule specified herein, or if no
schedule is applicable, in a timely manner, and/or gives the Town an
indication that Redflex will not or cannot perform the requirements
of this Agreement.
Other Town Remedies in Event of Default.
6.3.1 In case of default and/or termination, the Town reserves the right to
purchase equipment, software and software licenses from other
vendors, or to complete the required work itself or have it completed
by others at the expense of Redflex.
6.3.2 The Town may recover any actual excess costs by deduction from or
offset to an unpaid balance due, or by other remedies as provided by
law.
Vendor Ethics. Redflex agrees that it will comply with all applicable laws
relating to its performance under this Agreement, including any applicable
federal, state, or local law governing or relating to: a) conflicts of interest; b)
providing of gifts or hospitality to government officials or government
employees; and c) providing political and charitable contributions, or
governing or relating to the ethical conduct of business with government
agencIes.
6.4.1 Redflex Representation and Warranty Period: Redflex represents and
warrants that its performance in connection with this Agreement will
be in compliance with Redflex's internal Anti-Bribery and AntiCorruption Policy and Procedures, a copy of which has been
designated as Exhibit "F". Failure by Reflex to comply with the
Anti-Bribery and Anti-Corruption Policy and Procedures shall
permit to the Town, in its sole discretion, to immediately terminate
this Agreement.
6.4.2 From time to time, Redflex may choose to modify its own internal
Anti-Bribery and Anti-Corruption Policy and Procedures. In each
case where the Redflex Anti-Bribery and Anti-Corruption Policy and
Procedures are modified, Redflex shall cause a copy of the revised
Anti-Bribery and Anti-Corruption Policy and Procedures to be

13

6.5

6.6

6.7

6.8

delivered to the Town's Project Manager within ten (10) business


days, and shall obtain a receipt in writing with the date and time of
delivery. The Town, in its sole discretion, may elect to reject any
and all modifications, other than modifications required by changes
in applicable law, made within thirty (30) business days, and shall
notify Redflex in writing specifying all modifications rejected. The
affected specific provisions in Exhibit "H", or in a successor AntiBribery and Anti-Corruption Policy and Procedures document that
has not been rejected by the Town, shall remain in effect. However,
Redflex and the Town may negotiate in a timely manner and
mutually approve in writing a joint document with alternate language
of the specific provision which the Town has rejected.
Suspension or Debarment.
Town may, by written notice to Redflex,
immediately terminate this Agreement if Town determines, in its sole
discretion, that Redflex has been debarred, suspended, or otherwise lawfully
prohibited from participating in any public procurement activity, including
but not limited to, being disapproved as a Contractor or Subcontractor by
any public procurement unit or other governmental body, in Arizona or any
one of the United States based upon conduct of Redflex occurring after the
Execution Date. If Redflex becomes suspended or debarred, Redflex shall
immediately notify Town. Redflex will be liable for all costs arising out of
the Town's termination of the Agreement based on Redflex's breach of
section 6.4 in connection with the procurement of this Agreement.
Termination At Will. The Town may terminate this Agreement at will at any
time following a one (1) year period after the Execution Date by giving
Redflex sixty (60) calendar days advance written notice of the Town's
termination at will. If the Town terminates this Agreement at will, the Town
shall be obligated to pay Redflex for all services satisfactorily performed in
accordance with this Agreement through and including the termination date
in accordance with the fees specified in Exhibit "D." In addition, the Town
shall pay Redflex the cost recovery reimbursement specified in Exhibit "D;"
Section 2, if any.
The rights to terminate this Agreement given in Section 6.1 shall be without
prejudice to any other right or remedy of either party in respect of the breach
concerned (if any) or any other breach of this Agreement.
Procedures Upon Termination. The termination of this Agreement shall not
relieve either party of any liability that accrued prior to such termination.
Except as set forth in this Section 6.5, upon the termination of this
Agreement, all of the provisions of this Agreement shall terminate, and:
6.8.1 Redflex shall (i) immediately cease to provide services, including,
but not limited to, work in connection with the construction or
installation activities and services in connection with the Photo Red
Light and Speed Enforcement Program, (ii) promptly deliver to the
Town any and all property of the Town provided to Redflex pursuant
to this Agreement, (iii) promptly deliver to the Town a final report to
the Town regarding the collection of data and the issuance of

14

6.9

Citations in such fonnat and for such periods as the Town may
reasonably request, and which final report Redflex shall update or
supplement from time to time when and if additional data or
infonnation becomes available, (iv) promptly deliver to Town a final
invoice stating all fees and charges properly owed by Town to
Redflex for work perfonned and Citations issued by Redflex prior to
the tennination, and (v) provide such assistance as the Town may
reasonably request from time to time in connection with prosecuting
and enforcing Citations issued prior to the tennination of this
Agreement. Upon tennination of this Agreement, Redflex shall
transfer to the Town all Violations Data by such reasonable method
as the Town shall designate.
6.8.2 The Town shall (i) immediately cease using the Photo Red Light and
Speed Enforcement Program, accessing the Redflex System and
using any other Intellectual Property of Redflex, (ii) promptly
deliver to Redflex any and all Property owned by Redflex provided
to the Town pursuant to this Agreement, and (iii) promptly pay any
and all fees, charges and amounts properly owed by the Town to
Redflex for work perfonned and Citations issued prior to the
tennination.
6.8.3 Unless the Town and Redflex have agreed to enter into a new
agreement relating to the Photo Red Light and Speed Enforcement
Program or have agreed to extend the Tenn of this Agreement,
Redflex shall remove, at its own expense, any and all Equipment or
other materials owned by Redflex installed in connection with
Redflex's perfonnance of its obligations under this Agreement,
including, but not limited to, housings, poles and camera systems,
and Redflex shall restore the Designated Intersection Approaches to
substantially the same condition such Designated Intersection
Approaches were in immediately prior to this Agreement, except
conduits, control box bases, and pole bases shall remain if requested
by the Town, in its sole discretio"n.
Survival. Notwithstanding the foregoing, the definitions and each of the
following shall survive the tennination of this Agreement: Sections 4.2
(Reservation of Rights), 5.1 (Redflex Representations and Warranties), 5.2
(Town Representations and Warranties), 7 (Confidentiality), 8
(Indemnification and Liability), 10 (Dispute Resolution), 11.1 (Assignment),
11.15 (Notices), 11.17 (Applicable Law), and 11.20 (Jurisdiction and
Venue), and those provisions, and the rights and obligations therein, set
forth in this Agreement which either by their tenns state, or evidence the
intent of the parties, that the provisions survive the expiration or tennination
of the Agreement, or must survive to give effect to the provisions of this
Agreement.

7.
CONFIDENTIALITY. During the tenn of this Agreement and for a period of
three (3) years thereafter, neither party shall disclose to any third person, or use for itself

15

in any way for pecuniary gain, any Confidential Information learned from the other party
during the course of the negotiations for this Agreement or during the Term of this
Agreement, except as provided by Arizona law. Upon termination of this Agreement,
each party shall return to the other all tangible Confidential Information of such party.
Each party shall retain in confidence and not disclose to any third party any Confidential
Information without the other party's express written consent, except (i) to its employees
who are reasonably required to have the Confidential Information, (ii) to its agents,
representatives, attorneys and other professional advisors that have a need to know such
Confidential Information, provided that such parties undertake in writing (or are
otherwise bound by rules of professional conduct) to keep such information strictly
confidential, and (iii) pursuant to, and to the extent of, a request or order by any
Governmental Authority or laws relating to public records requiring such disclosure.

8.

INDEMNIFICATION, LIABILITY, AND DAMAGE TO PROPERTY.


8.1
Indemnification by Redflex. Redflex hereby agrees to defend and indemnify
the Town and its affiliates, or other interest holders, managers, officers,
directors, employees, agents, representatives and successors, permitted
assignees and each of their affiliates, and all persons acting by, through,
under or in concert with them, or any of them (individually a "Town Party"
and collectively, the "Town Parties") against, and to protect, save and keep
harmless the Town Parties from, and to pay on behalf of or reimburse the
Town Parties as and when incurred for, any and all liabilities, obligations,
losses, damages, penalties, demands, claims, actions, suits, judgments,
settlements, costs, expenses and disbursements (including reasonable
attorneys', accountants' and expert witnesses' fees) of whatever kind and
nature (collectively, "Losses"), which may be imposed on or incurred by
any Town Party arising out of or related to (i) any material
misrepresentation, inaccuracy or breach of any covenant, warranty or
representation of Redflex contained in this Agreement, (ii) the willful
misconduct of Redflex, its employees or agents which result in death or
bodily injury to any natural person (including third parties) or any damage
to any real or tangible personal property (including the personal property of
third parties), except to the extent caused by the willful misconduct of any
Town Party, (iii) the negligent conduct on the part of Redflex, its employees
or agents.
8.2
Mutual Non-Liability. Neither party shall be responsible for liability
incurred as a result of the other party's acts or omissions in connection with
this Agreement.
8.3
Damages. Redflex shall be responsible for repairing, or reimbursing the
Town for, any damages whatsoever to Town property when such Town
property is the responsibility of or in the custody of Redflex or its
employees or subcontractors, except when such has been caused by the
Town, its employees or agents.

9.
INSURANCE. During the Term, Redflex shall procure and maintain at Redflex's
sole cost and expense the following insurance coverage with respect to claims for injuries

16

to persons or damages to property which may arise from or in connection with the
performance of work or services pursuant to this Agreement by Redflex, and each of
Redflex's subcontractors, agents, representatives and employees:
9.1
Commercial General Liability Insurance. Commercial General Liability
Insurance with coverage limits of not less than One Million Dollars
($1,000,000) combined single limit per occurrence for bodily injury and
property damage, Two Million Dollars ($2,000,000) Products-Completed
Operations Aggregate and Two Million Dollars ($2,000,000) General
Aggregate;
9.2
Commercial Automobile Liability Insurance. Commercial Automobile
Liability Insurance with coverage of not less than One Million Dollars
($1,000,000) combined single limit per accident for bodily injury or
property damage, including but not limited to coverage for all automobiles
owned, non-owned and hired by Redflex;
9.3
Professional Liability (Errors and Omissions) Insurance. Redflex will use its
commercial best efforts to procure and maintain Professional Liability
(Errors and Omissions) Insurance with coverage of not less than Two
Million Dollars ($2,000,000) each and every claim and in the Aggregate;
and
9.4
Workers' Compensation and Employer's Liability Insurance. Workers'
Compensation Insurance with coverage of not less than that required by the
Labor Code of the State of (insert name), and Employer's Liability
Insurance with coverage of not less than One Million Dollars ($1,000,000)
per occurrence.
9.5
With respect to the Commercial General Liability Insurance the following
additional provisions shall apply:
9.5.1 The Town shall be named as an additional insured with respect to the
Commercial General Liability insurance; and
9.5.2 The insurance coverage procured by Redflex and described above
shall be the primary insurance with respect to the Town in
connection with this Agreement, and any insurance or self-insurance
maintained by any of the Town shall be in excess, and not in
contribution to, such insurance; and
9.5.3 Any failure to comply with the reporting provisions of the various
insurance policies described above shall not affect the coverage
provided to the Town, and such insurance policies shall state the
such insurance coverage shall apply separately with respect to each
additional insured against whom any claim is made or suit is
brought, except with respect to the limits set forth in such insurance
policies.
9.6
With respect to the insurance described in the foregoing Section, if any of
the Redflex Parties are notified by any insurer that any insurance coverage
will be cancelled, Redflex shall immediately provide 30 days written notice
thereof to the Town and shall take all necessary actions to correct such
cancellation in coverage limits, and shall provide written notice to the Town
of the date and nature of such correction. If Redflex, for any reason, fails to

17

9.7

maintain the insurance coverage required pursuant to this Agreement, such


failure shall be deemed a material breach of this Agreement, and the Town
shall have the right, but not the obligation and exercisable in its sole
discretion, to either (i) terminate this Agreement and seek damages from
Redflex for such breach, or (ii) purchase such required insurance, and
without further notice to Redflex, deduct from any amounts due to Redflex
pursuant to this Agreement, any premium costs advance by the Town for
such insurance. If the premium costs advanced by the Town for such
insurance exceed any amounts due to Redflex pursuant to this Agreement,
Redflex shall promptly remit such excess amount to the Town upon receipt
of written notice thereof.
Redflex shall provide certificates of insurance evidencing the insurance
required pursuant to the terms of this Agreement, which certificates shall be
executed by an authorized representative of the applicable insurer, and
which certificates shall be delivered to the Town prior to Redflex
commencing any work pursuant to the terms of this Agreement.

10.

DISPUTE RESOLUTION. Upon the occurrence of any dispute or disagreement


between the parties hereto arising out of or in connection with any term or provision
of this Agreement, the subject matter hereof, or the interpretation or enforcement
hereof (the "Dispute"), the parties shall engage in informal, good faith discussions
and attempt to resolve the Dispute. In connection therewith, upon written notice of
either party, each of the parties will appoint a designated officer whose task it shall
be to meet for the purpose of attempting to resolve such Dispute. The designated
officers shall meet as often as the parties shall deem to be reasonably necessary.
Such officers will discuss the Dispute. If the parties are unable to resolve the
Dispute in accordance with this Section 10, and in the event that either of the parties
concludes in good faith that amicable resolution through continued negotiation with
respect to the Dispute is not reasonably likely, then the parties may mutually agree
to submit to mediation.

11.

MISCELLANEOUS.
11.1 Assignment/Subcontractors. Other than process service, Redflex may not
assign or subcontract work to be performed by Redflex under the terms of
this Agreement, either in whole or in part, without first receiving written
consent of the Town. Any other attempted assignment, either in whole or in
part, without written consent by the Town shall be null and void, represent
material breach, and in such event the Town shall have the right, at its sole
discretion, to terminate this Agreement. In the event the Town approves of
a proposed subcontractor to be utilized by Redflex, including those utilized
for process service, said subcontractors shall comply with, and be subject to,
the provisions specified in this Agreement.
11.2 Relationship Between Redflex and the Town. Nothing in this Agreement
shall create, or be deemed to create, a partnership, joint venture or the
relationship of principal and agent (other than the Town's designation of
Redflex as the Town's agent to review Potential violations and determine

18

11.3

11.4

11.5

11.6

whether to issue Citations or Notices of Violation) or employer and


employee between the parties. The relationship between the parties shall be
that of independent contractors, and nothing contained in this Agreement shall
create the relationship of principal and agent (except as specified in this
Section 11.2) or otherwise permit either party to incur any debts or liabilities or
obligations on behalf of the other party (except as specifically provided
herein).
Audit Rights. Each of parties hereto shall have the right to audit the books
and records of the other party hereto (the "Audited Party") solely for the
purpose of verifying the payments, if any, payable pursuant to this
Agreement. Any such audit shall be conducted upon not less than two (2)
business days' prior notice to the Audited party, at mutually convenient
times and during the Audited Party's normal business hours. Except as
otherwise provided in this Agreement, the cost of any such audit shall be
borne by the non-Audited Party. In the event any such audit establishes any
underpayment of any payment payable by the Audited Party to the nonAudited Party pursuant to this Agreement, the Audited Party shall promptly
pay the amount of the shortfall, and in the event that any such audit
establishes that the Audited Party has underpaid any payment by more than
twenty five percent (25%) of the amount of actually owing, the cost of such
audit shall be borne by the Audited Party. In the event any such audit
establishes any overpayment by the Audited Party of any payment made
pursuant to this Agreement, non-Audited Party shall promptly refund to the
Audited Party the amount of the excess.
Force Majeure. Neither party will be liable to the other or be deemed to be
in breach of this Agreement for any failure or delay in rendering
performance arising out of causes beyond its reasonable control and without
its fault or negligence. Such causes may include but are not limited to, acts
of God or the public enemy, terrorism, significant fires, floods, earthquakes,
epidemics, quarantine restnctIOns, strikes, freight embargoes, or
Governmental Authorities approval delays which are not caused by any act
or omission by Redflex, and unusually severe weather. The party whose
performance is affected agrees to notify the other promptly of the existence
and nature of any delay.
Entire Agreement. This Agreement represents the entire Agreement
between the parties, and there are no other agreements (other than invoices,
change orders and purchase orders, and business rules to be mutually
developed and approved by the Town and Redflex from time to time),
whether written or oral, which affect its terms. This Agreement may be
amended only by a subsequent written agreement signed by both parties.
Severability. If any provision of this Agreement is held by any court or
other competent authority to be void or unenforceable in whole or part, this
Agreement shall continue to be valid as to the other provisions thereof and
the remainder of the affected provision. Notwithstanding the foregoing
court decision declaring the program illegal or unconstitutional shall void
this contract.

19

11.7

11.8

11.9

11.10

11.11

11.12

11.13

11.14

11.15

Waiver. Any waiver by either party of a breach of any provision of this


Agreement shall not be considered as a waiver of any subsequent breach of
the same or any other provision thereof.
Construction. Except as expressly otherwise provided in this Agreement,
this Agreement shall be construed as having been fully and completely
negotiated and neither the Agreement nor any provision thereof shall be
construed more strictly against either party.
Headings. The headings of the sections contained in this Agreement are
included herein for reference purposes only, solely for the convenience of
the parties hereto, and shall not in any way be deemed to affect the meaning,
interpretation or applicability of this Agreement or any term, condition or
provision hereof.
Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall
be deemed an original, and such counterparts together shall constitute only
one instrument. Anyone of such counterparts shall be sufficient for the
purpose of proving the existence and terms of this Agreement and no party
shall be required to produce an original or all of such counterparts in making
such proof.
Covenant of Further Assurances. All parties to this Agreement shall, upon
request, perform any and all acts and execute and deliver any and all
certificates, instruments and other documents that may be necessary or
appropriate to carry out any of the terms, conditions and provisions hereof
or to carry out the intent of this Agreement.
Remedies Cumulative. Each and all of the several rights and remedies
provided for in this Agreement shall be construed as being cumulative and
no one of them shall be deemed to be exclusive of the others or of any right
or remedy allowed by law or equity, and pursuit of anyone remedy shall not
be deemed to be an election of such remedy, or a waiver of any other
remedy.
Binding Effect. This Agreement shall inure to the benefit of and be binding
upon all of the parties hereto and their respective executors, administrators,
successors and permitted assigns.
Compliance with Laws. Nothing contained in this Agreement shall be
construed to require the commission of any act contrary to law, and
whenever there is a conflict between any term, condition or provision of this
Agreement and any present or future statute, law, ordinance or regulation
contrary to which the parties have no legal right to contract, the latter shall
prevail, but in such event the term, condition or provision of this Agreement
affected shall be curtailed and limited only to the extent necessary to bring it
within the requirement of the law, provided that such construction is
consistent with the intent of the Parties as expressed in this Agreement.
Notices. Any notices to be given hereunder shall be in writing, and shall be
deemed to have been given (a) upon delivery, if delivered by hand, (b) three
(3) business days after being mailed first class, certified mail, return receipt
requested, postage and registry fees prepaid, or (c) one (1) business day after

20

being delivered to a reputable overnight courier service, excluding the u.s.


Postal Service, prepaid, marked for next day delivery, if the courier service
obtains a signature acknowledging receipt, in each case addressed or sent to
such party as follows:
Notices to Redflex:
Redflex Traffic Systems, Inc.
23751 N. 23 rd Ave, Ste 150
Phoenix, AZ 85085
Attention: PROGRAM MANAGEMENT
Facsimile: ((623) 207-2000
Notices to the Town:
Chief of Police
Paradise Valley Police Department
6433 E. Lincoln Drive
Paradise Valley, AZ 85253
11.16 No Third Party Benefit. Nothing contained in this Agreement shall be
deemed to confer any right or benefit on any Person who is not a party to
this Agreement.
11.17 Applicable Law. This Agreement shall be governed by and construed in all
respects solely in accordance with the laws of the State of Arizona, United
States. Redflex shall remain fully informed of existing and future federal,
state and Town laws, ordinances and regulations that in any manner affect
the fulfillment of the contract resulting from this RFP and shall comply with
the same.
1l.18 Immigration Compliance. Under the provisions of A.R.S. 41-4401,
Redflex hereby warrants to the Town that Redflex and each of its
subcontractors will comply with, and are contractually obligated to comply
with, all Federal Immigration laws and regulations that relate to their
employees and A.R.S. 23-214(A) (hereinafter "Redflex Immigration
Warranty"). A breach of the Redflex Immigration Warranty shall constitute
a material breach of this Contract and shall subject Redflex to penalties up
to and including termination of this Contract at the sole discretion of the
Town. Both Parties retain the legal right to inspect the papers of any
Redflex or subcontractors' employee who works on this Contract to ensure
compliance with the Redflex Immigration Warranty. Redflex agrees to
assist the Town in regard to any such inspections. The Town may, at its sole
discretion, conduct random verification of the employment records of
Redflex and any of subcontractors to ensure compliance with Redflex's
Immigration Warranty. Redflex agrees to assist the Town in regard to any
random verifications performed, and to keep papers and records open for
said inspection during normal business hours, and waives any right to keep
such papers and records confidential. Neither Redflex nor any subcontractor
of Redflex shall be deemed to have materially breached Redflex

21

Immigration Warranty if Redflex or subcontractor establishes that it has


complied with the employment verification provision prescribed by sections
274A and 274B of the Federal Immigration and Nationality Act and the EVerify requirements prescribed by A.R.S. 23-214(A).
Voluntary
compliance may be available through the Arizona Attorney General's
Voluntary Employer Enhanced Compliance Program.
11.19 Iran and Sudan Investments. In accordance with Ariz. Rev. Stat. 35393.06, Redflex hereby certifies that Redflex does not have scrutinized
business operations in Iran or Sudan.
11.20 Jurisdiction and Venue. Any dispute arising out of or in connection with this
Agreement shall be submitted to the exclusive jurisdiction and venue of the
Federal and State courts located in the County Maricopa, Arizona and both
Parties specifically agree to be bound by the jurisdiction and venue thereof.
11.21 Conflicts of Interest. This Agreement is subject to cancellation pursuant to
A.R.S. 38-511, pertaining to conflicts of interests.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first set forth above.

"Town"

"Redflex"

Town of Paradise Valley, Arizona

RED

B~.~.

J ~on,Jr.
Town Manager

FFIC SYSTEMS, INC.,

eVincenzi
President and CEO

ATTEST:
By:~~~~~~~~~~_

Duncan Miller,
APPROVED AS TO FORM:
By:

/--Andrew Miller, Town Attorney

22

EXHIBIT" A"
Designated Intersection Approaches, Designated Zones
And Designated Equipment Locations
1.

Existing Installations. As of the Execution Date, the five (5) existing Designated
Intersection Approaches and two (2) existing Equipped Motor Vehicles~
Priority 1 Group: Existing Designated Intersection Approaches
2
Lincoln Dr. and Tatum Blvd., eastbound and westbound (dual direction)
2
McDonald Dr. and Tatum Blvd., northeastbound and southwestbound
(dual direction)
1
Mockingbird Lane and Lincoln Dr., westbound
TOTAL
5
Priority 1 Group: Existing Equipped Motor Vehicles
1
Equipped Motor Vehicle (Ford Escape Hybrid)
1
Equipped Motor Vehicle (Ford Escape Hybrid)
2
TOTAL

2.

New Combo Red LightlFixed Speed, Fixed Speed or Mobile Enforcement


Program. The contract allows for the implementation of up to twenty (20) new
Designated Intersection Approaches and four (4) new Equipped Motor Vehicles.
Future Designated Intersection Approaches shall be based on the following list of
locations, provided, however, new or different locations may be added to this list
based on mutual agreement between Redflex and the Town:
Priority 2 Group: New - Remaining Entries to Town Plus Major Intersection
1
Tatum Blvd. and Mockingbird Lane, southbound
1
Lincoln Dr. and 36 th St., eastbound
_1_
Lincoln Dr. and Tatum Blvd., southbound
3
Priority Group 2 Total
Priority 3 Group: New - Middle of Long Stretches on Major Arterials
2
Lincoln Dr. and 56 th St., eastbound and westbound (dual direction)
2
Tatum Blvd. and Clearwater Pkwy, northbound and southbound (dual
direction)
Tatum Blvd. and northbound and southbound (dual direction)
2
Priority Group 3 Total
6
Priority 4 Group: New - Remaining Signalized Intersections
2
Tatum Blvd. and northbound and southbound (dual direction)
2
Lincoln Dr. and Invergordon Rd., eastbound and westbound (dual
direction)
Tatum Blvd. and northbound and southbound (dual direction)
2
Priority Group 4 Total
6
Grand Total
20

23

EXHIBIT "B"
Construction and Installation Obligations
1.

2.

3.

For each new red light/speed camera system to be installed, the Town shall bear
the direct cost of site preparation construction (conduits, concrete bases for poles
and red light/speed system controller boxes, etc.) for Redflex's equipment to be
installed. Engineering! detailed plans, wiring necessary to connect parts of the
system, painting to match traffic signal stanchions, etc., shall be provided by
Redflex at its expense. Town, at its sole option, shall elect to have any needed
site preparation construction first required to install Redflex' s equipment, by one
of the following methods:
a. The Town shall contract for the required site preparation construction and
shall, upon completion, provide control over the site to Redflex to proceed
with installation.
b. The Town shall authorize Redflex to perform or contract for the site
preparation construction. The cost of the site preparation construction shall be
borne by the Town, and included in the purchase order for the new red
light/speed camera system to be installed. This necessitates Redflex to
provide firm cost figures for the construction to the Town prior to Town staff
submitting Change OrderslPurchase Orders for the installation of new red
light/speed camera systems to the Town Council for approval.
In order to provide the Town with timely completion of the photo enforcement
project, Redflex Traffic. Systems requires that the Town assist with obtaining
timely approval of permit requests. The Town acknowledges the importance of
the safety program and undertakes that the Town will provide engineering
review(s) of Redflex permit requests and all documentation in a timely manner.
Redflex Obligations. Redflex shall do or cause to be done each of the following
(in each case, unless otherwise stated below, at Redflex's sole expense):
a. Appoint a project implementation team.
b. Request current "as-built" electronic engineering drawings for the Designated
Intersection Approaches (the "Drawings") from the Town engineer.
c. Develop and submit to the Town for approval construction and installation
specifications in reasonable detail for the Designated Intersection Approaches,
including but not limited to specifications for all sensors, conduit and cables,
electrical connections and traffic controller connections, as required.
d. Seek approval from the Town for the Designated Intersection Approaches
(collectively, the "Approvals"), which will include compliance with Town
permit applications.
e. Finalize the acquisition of the Approvals.
f. Assist the Town in developing a public awareness strategy, which may
include media and educational materials.
g. Complete the installation and testing of all necessary Equipment, including
hardware and software, at the Designated Intersection Approaches.

24

h. Complete all reasonably necessary electrical work at the Designated


Intersection Approaches, including but not limited to the installation of all
related Equipment and other detection sensors, poles, cabling,
telecommunications equipment and wiring, which work shall be performed in
compliance with all applicable local, state and federal laws and regulations
(this shall include familiarity and compliance with Town building and
electrical codes, and Town Public Works Department specifications).
1.
Install and test the functionality of the Designated Intersection Approaches
with the Redflex System and establish fully operational Violation processing
capability with the Redflex System.
J. Implement the use of the Redflex System at each of the Designated
Intersection Approaches.
k. Town will provide and install any required enforcement signage.
4.

Town Obligations. The Town shall do or cause to be done each of the following
(in each case, unless otherwise stated below, at Town's sole expense):
a. Assist Redflex in obtaining the Drawings from the Town.
b. Notify Redflex of any specific requirements relating to the construction and
installation of any Intersection Approaches.
c. Provide reasonable access to the Town's properties and facilities in order to
permit Redflex to install and test the functionality of the Designated
Intersection Approaches and the Photo Red Light and Speed Enforcement
Program.
d. Provide reasonable access to the personnel of the Town and reasonable
information about the specific operational requirements of such personnel for
the purposes of performing training.
e. Provide written notice to Redflex with respect to the quantity of media and
program materials that the Town will require in order to implement the
Awareness Strategy during the period commencing on the date on which
Redflex begins the installation of each of the Designated Intersection
Approaches and ending one (1) month after each Signaled Intersection
Approach becomes fully operational.
f. The Town shall provide, on an agreed upon frequency, without cost to
Redflex, reports regarding the prosecution of Citations, the collection of fines,
fees and other monies and available collision data, in such format and for such
periods as Redflex may reasonably request.
g. Yellow Light Timing Review: The Town shall be responsible to ensure that
the yellow or amber light phase timing at all photo enforced intersections
meets minimum standards according to federal, state, and local laws,
guidelines, and/or rules.
h. To the extent within Town's control, provide on-going adequate electrical
power in order to operate the systems. The Town will allow Redflex to use
existing conduit space as available.
1.
To the extent that the Town desires access to the Redflex System at the
Town's public safety building and facilities, the Town is responsible for all
computer hardware, web browsers and high speed Internet access necessary to

25

J.

5.

operate the systems on the Town's computers (at the current time there is no
special equipment necessary other than a computer with internet access).
Town is responsible for all computer hardware, web browsers and high speed
Internet access necessary to operate the systems.

Mobile Speed Enforcement Obligations. In connection with the mobile speed


enforcement program, Redflex and the Town shall have the following obligations
as set foith below.
a. Redflex Obligations. Redflex shall:
1) Deploy each Equipped Vehicle and/or trailer substantially around
the clock.
2) Complete the installation and testing of all necessary Equipment,
including hardware and software.
3) Install and test the functionality of the Equipped Vehicle (s) with
the Redflex System.
b. Town Obligations. Town shall:
I) Coordinate a vehicle deployment strategy to maximize education,
awareness and speed violation reduction.
2) Assist in scheduling the deployment and relocation of the Equipped
Vehicle(s) and/or trailer(s).
3) Coordinate with Redflex in the deployment of each Equipped
Vehicle(s) and/or trailer(s).Town is responsible for all computer
hardware, web browsers and high speed Internet access necessary to
operate the systems (no special equipment necessary other than a PC
with internet access).

26

EXHIBIT "C"

Operation, Maintenance, Repair, Replacement and Upgrades


1.

2.
3.

4.

5.
6.

7.

8.

9.
10.

All operation, maintenance, repair and upgrades of Photo Red Light and Speed
Enforcement systems and related equipment, whether owned by the Town or by
Redflex, shall be the sole responsibility of Redflex and at the sole expense of
Redflex, including but not limited to maintaining the casings of the cameras
included in the Redflex System and all other Equipment in reasonably clean,
operable, and graffiti-free condition.
Redflex shall not open the Traffic Signal Controller Boxes without a
representative of Town present.
In the event that images of a useable quality to identify Violators or Violations
cannot be reasonably obtained without the use of flash units, Redflex shall, at the
sole discretion of the Town's Project Manager, provide, install, and maintain such
flash units. This cost shall be borne by Redflex.
Redflex shall assign specific personnel to provide follow up assistance to the
Town in the form of the HELPDESK, a designated Town Service Representative,
and a Director of Accounts.
Redflex shall respond within 24 hours to maintenance requests.
Redflex shall update all software and hardware, whether currently or subsequently
installed when new software or hardware is made available to its other customers,
in a timely fashion at Redflex's sole expense.
Redflex is responsible for all operating costs, including maintenance, fuel,
washing, etc. for all vehicles, and for registration fees, insurances, repairs, etc., for
all Equipped Vehicles, regardless of ownership.
Any and all computer/information management system programming costs
associated with electronically submitting and managing citation processing data to
the Town's court shall be at the sole cost of Redflex.
Programming and software costs for the police department to access and manage
Notices of Violation and Citations shall be at the cost of Redflex.
Redflex shall use the utmost care in the operation, management, maintenance,
upgrade and control of all automated photo enforcement equipment and software
owned by the Town, and treat it in all manners as if it is owned by Redflex. Costs
of repairing damage, other than normal wear and tear, caused by the Town or its
agents, and recurring costs for cable access to transmit data to Redflex from fixed
red light/speed camera systems and mobile speed camera vehicle download
terminal shall be at the expense of the Town.

27

EXHIBIT "D"

PRICING AND PAYMENT OPTIONS


Commencing on the Date of this Agreement, the Town shall be obligated to pay to
Redflex a purchase price and/or a fee based on each adjudicated violation, depending on
which of the following Purchase Options the Town requests:

Red Light/Speed Detection Systems Purchase Options:


A. Immediate Purchase:

1. Town to pay $73,000.00 for the immediate purchase of each fixed Red light/speed
detection system. 1
2. Town pays Redflex $32.75 per adjudicated violation. 1,2
B. Purchase through increased fees for set period:

1. Town pays Redflex $38.00 per adjudicated violation for the first eighty-four (84)
months after the Installation Date. 1,2
2. After 84 months the Town pays Redflex $32.75 per adjudicated violation. 1,2
C. Purchase through increased fees until specified additional amount is received/cap is
reached:
1. Town pays Redflex $38.00 per adjudicated violation; with $4.00 of each such
adjudicated violation payment being considered a partial payment of a purchase
price of $73,000.00 for the purchase by the Town of such fixed Red light/speed
system. 12
'
detectlOn
2. Redflex shall be paid $38.00 until such time as the accumulated partial payments
of $4.00 each total $73,000.00, the Town payment then being reduced to $32.75
for each adjudicated violation. 1,2

Notes:
1. Prices for equipment to remain constant for initial five year term, thereafter to be adjusted pursuant to the CPI
adjustment provisions stated below (See Business Assumptions for All Pricing Options).
2. Fees to be paid for each violation adjudicated as "responsible" for civil violations and "guilty" for criminal
violations, and for attendance at traffic school. No fee is paid for "not responsible" or "not guilty" adjudications.

28

Mobile Speed Detection Systems


A. Town Purchases Immediately:
1. Vehicle Only Purchased by Town:
Town separately purchases a marked police vehicle for mobile speed detection
system, and Redflex is paid $75,000.00 (per vehicle) to install a mobile speed
detection system in such vehicle - Redflex is paid $32.75 per adjudicated
violation. 1,2,3
2. Vehicle and Mobile Speed Detection System Purchased by Town:
Town pays Redflex $105,000.00 and Redflex supplies a new marked police
vehicle with a mobile speed detection system installed in such vehicle - Redflex is
paid $32.75 per adjudicated violation. 1,2,3
B. Redflex Owns the Vehicle and the Installed Mobile Speed Detection System:
1. Redflex is paid $38.00 per adjudicated violation.

1,2,3

Notes:
I. Prices for equipment, and fees per adjudicated violation, to remain constant for initial five year term, thereafter to be
adjusted pursuant to the CPI adjustment provisions stated below (See Business Assumptions for All Pricing Options).
2. Fees to be paid for each violation adjudicated as "responsible" for civil violations and "guilty" for criminal
violations, and for attendance at traffic school. No fee is paid for "not responsible" or "not guilty" adjudications.
3. Redflex is responsible for all operating costs, including maintenance, fuel, washing, etc. for all vehicles, and for
registration fees, insurances, repairs, etc., for vendor-owned vehicles.

29

License Plate Reader (LPR) Systems


A. Fixed LPR Equipment:
1. Option #1 - Town may purchase fixed LPRs for $34,000 and pay an annual fee of
$1,000.00 per fixed site. I
2. Option #2 - Town may lease fixed LPRs for $7,500.00 per year per site, with no
additional annual cost. I
B. Vehicle Mounted LPR Equipment by Town: Once mobile data computers are
installed in Town's vehicles, Town may elect to exercise either:
1. Option #1 - Town may purchase vehicle mounted LPRs for $22,000 and an
annual fee of $1 ,000.00 per vehicle. I
2. Option #2 - Town may lease vehicle mounted LPRs for $7,500.00 per year per
LPR, with no additional annual cost. I

Note:
I. Prices for equipment, and fees per adjudicated violation, to remain constant for initial five year term, thereafter to be
adjusted pursuant to the CPI adjustment provisions stated below (See Business Assumptions for All Pricing Options).

30

HALO Systems
1. Option #1 - Town may elect to purchase a HALO System for $15,000.00 and an
annual fee of $250.00 per installed location. I
2. Option #2 - Town may lease the HALO System for $3000.00 per installed location
per year, with no additional annual fee. I

Note:
I. Prices for equipment, and fees per adjudicated violation, to remain constant for initial five year term, thereafter to be
adjusted pursuant to the CPI adjustment provisions stated below (See Business Assumptions for All Pricing Options).

31

PRICING AND PAYMENT TERMS


1.

Payment.
a. The Parties hereto specifically agree that the amounts collected as
compensation pursuant to this Exhibit are full remuneration for Redflex
performing all of the services contemplated by this Agreement and there
is no additional compensation unless otherwise provided for this
Agreement.
b. Redflex shall invoice the Town monthly for compensation due for
previous month, and shall include supporting documentation for
amounts calculated in conjunction with the Town.
c. The Town agrees to pay Redflex within thirty (30) days after the invoice
is received. Town shall be obligated to pay the cumulative balance
invoiced by Redflex, in accordance with terms set forth above.

2. Cost Recovery Reimbursement under Termination for Convenience.


In the event the Town terminates this Agreement for Convenience under Section
6.1, Redflex shall be entitled to a cost recovery reimbursement for the costs
associated with the Equipment installed at each Designated Intersection Approach
prior to the Redflex receiving the termination notice.
3. Business Assumptions. The following business options shall govern all pricing
options:
a. Redflex construction will be able to utilize existing conduit for installation
where space is available.
b. Commencing on the fifth anniversary date of this Agreement, and for each
year thereafter, on the anniversary date of the Agreement, the pricing will
increase by the CPI. CPI will be derived from the publication of the U.S.
Department of Labor Consumer Price Index for U.S. City average.
c. Town agrees to pay Redflex for each adjudicated violation within forty-five
(45) days after the invoice is received. A monthly late fee of 1.5% is payable
for amounts remaining unpaid sixty (60) days from date of invoice.
d. The provision of all necessary communication, broadband and telephone
services to the Designated Intersection Approaches will be the sole
responsibility of Redflex.
e. The on-going provision of any and all necessary electrical power to the
Designated Intersection Approaches will be the sole responsibility of the
Town.
f. The Town shall require any and all employees who may operate or occupy the
Equipped Motor Vehicles to complete a mandatory training program to insure
that (i) the Equipped Motor Vehicles are operated in a safe manner and (ii) all
warnings and instructions that accompany the Equipped Motor Vehicles are
understood and heeded.
g. Redflex shall be solely responsible for installing required signage. Redflex
shall be solely responsible for the fabrication of any signage, notices or other

32

postings required pursuant to any law, rule or regulation of any Governmental


Authority, including but not limited to the Vehicle Code, and Town shall
assist in determining the placement of such signage. Redflex shall submit
signage design drawings to the appropriate local authority for approval. Any
changes or modifications to signage requirements will be the responsibility of
the Town.
h. RoadwaylIntersection improvement projects: Town shall reimburse Redflex
the costs of replacing and or modification of operational system approaches, if
the replacement and/or modification are due solely to Town's request.
(The remainder of this page is left intentionally blank)

33

EXHIBIT "E"
Additional Rights and Obligations
Redflex and the Town shall respectively have the additional rights and obligations set
forth below:
1.
Redflex shall assist the Town in public information and education efforts,
including but not limited to the development of artwork for utility bill inserts,
press releases, and schedules for any public launch of the Photo Red Light and
Speed Enforcement Program (actual print and production costs are the sole
responsibility of the Town).
2.
The Town shall not access the Redflex System or use the Photo Red Light and
Speed Enforcement Program in any manner other than as prescribed by law, or in
any manner which restricts or inhibits Redflex from accessing any part of the
Redflex Photo Enforcement Program which is monitored or maintained by
Redflex. The Town shall not attempt to gain unauthorized access by means of
hacking, password mining or any other method whatsoever to (i) any account of
any other Person, (ii) any computer systems or networks connected to the Redflex
System, or (iii) any materials or information not intentionally made available by
Redflex to the Town, nor shall the Town cause any other Person to do any of the
foregoing.
3.
The Town shall maintain the confidentiality of any usemame, password or other
process or device for accessing the Redflex System or using the Photo Red Light
and Speed Enforcement Program.
4.
Redflex and the Town shall advise each other in writing with respect to any
applicable rules or regulations governing the conduct of the other on or with
respect to the property of such other party, including but not limited to rules and
regulations relating to the safeguarding of confidential or proprietary information,
and when so advised, Redflex and the Town shall obey any and all such rules and
regulations.
5.
The Town shall promptly reimburse Redflex for the reasonable cost of repairing
or replacing any portion of the Redflex System, or any property or equipment
related thereto, damaged directly or indirectly by the Town, or any of its
employees, contractors or agents.
6.
The term of an installed camera shall be temporarily suspended as a result of any
Town authorized road repairs, street improvements, or stop work orders that
interrupts, impedes, obstructs, or interferes with the successful performance of the
installed camera and no fees shall be assessed to the Town by Redflex based on
this occurrence.
7.
Redflex shall contract for, manage and/or otherwise operate, the process service
of photo enforcement citations, and pass through the costs per photo enforcement
citation served without markup, or any other cost, to the Town. Upon successful
service of process ofa citation, the Town's sole obligation shall be to pay Redflex
the actual fee for each validly and lawfully served citation.

34

8.

9.

10.

11.

12.

13.

14.

15.

Redflex Automated Complaint Processing Center. Redflex shall maintain an


automated complaint processing center in Arizona, and shall continue to operate it
for as long as the contract with the Town or any extension thereof is in effect.
Complaints and Inquiries. Redflex shall make every effort, in partnership with
the Town, to resolve complaints or inquiries related to the equipment and services
provided, and Redflex shall assist the Town in establishing a clear protocol for
handling complaints and inquiries.
Complaint Processing Costs. Redflex shall bear all costs for the printing and
assembling, mailing and otherwise processing and accounting for citations and
Notices of Violations, except for process service costs related to Citations.
Vehicle Registration Information. Redflex shall maintain the ability to access
Arizona Motor Vehicle Division (MVD) databases to provide the required
information to issue citations and Notices of Violations, and to access out-of-state
information.
Training. Redflex shall provide training, at a site acceptable to the Town at its
sole discretion, and at Redflex's expense, for:
a. Municipal court and police department personnel on overall management of
their portions of the equipment and software to which they have access, and
specifically in the capabilities, operation and limitations of data base.
b. Public works personnel on interfaces between the fixed red light/speed camera
controllers and the traffic signal controllers, and on construction requirements
for installation of new fixed red light/speed camera equipment.
Electronic Transfer of Data Required. Redflex shall electronically transfer
citation data to the Town's Municipal Court's "Full Court" information
management system, or any successor information management systems, in a
manner approved by the Town in a timely manner and in compliance with laws
and court rules. All programming and other expenses to electronically transfer
Citation data to the Town Municipal Court information management system, and
to successor information management systems, shall be at the sole expense of
Redflex.
Documents Accompanying Citations and Notices of Violations. Documents
mailed, served or otherwise provided with Citations and Notices of Violations
shall contain images of the vehicle operator, license plate and general scene
("context") information necessary for the person receiving the Citation or Notice
of Violation to identify the driver.
Images.
a. Clarity. Redflex shall not cause a citation to be issued unless there is a
reasonably clear and unobstructed image of the vehicle operator and the
vehicle license plate. Images shall clearly show, at minimum, the following:
1) The motor vehicle at the time of the violation.
2) Unobstructed operator's face.
3) Unobstructed vehicle license plate.
4) View of the physical location where the suspected violation occurred.
b. Use. Images produced by Redflex shall be used solely for the purposes of
enabling the recipient of a Citation or Notice of Violation to identify the
vehicle driver, and for prosecution purposes.

35

c. Gender Match. To the degree possible, Redflex shall assure that the gender of
the driver depicted in the image matches that of the registered owner, or one
of the owners, of the vehicle depicted.
d. Additional Data on Image. Redflex shall superimpose on images a data line,
in a manner so as not to obscure portions of the images necessary to identify
the operator of the vehicle and vehicle license plate, or provide such data line
immediately adjacent to each image containing:
1) Time and date (day of the month, month and year).
2) Speed of the vehicle.
3) Traffic signal phase for red light violations and speed violations at
intersections controlled by traffic signals.
4) Posted speed limit for speed violations.
5) Direction of travel of the vehicle.
6) Location code.
7) Frame sequence number or other number specifically linked to the
image(s) of the violation.
e. Storage of Still and Video Images. Redflex shall maintain all still and video
images related to Citations issued and Notices of Violations mailed for a
period which shall be included in the business rules for processing violations
agreed to by the Town and Redflex. Retention period for images and video
images of Violations for which Citations were not issued nor a Notice of
Violation mailed shall be thirty (30) days, provided, however, that if the
Town requires, the Town may request during this thirty (30) day period that
some portion of the live video be saved and sent to the Town in a format
acceptable to the Town, which the Town can then store on its own computer
or other video storage system.
f. Images Property of Town. Images shall become the property of the Town.

36

EXHIBIT "F"

Redflex's Internal Anti- Bribery and Anti-Corruption Policy and Procedures

COPY IS ATTACHED AND INCORPORTED

(The remainder of this page is left intentionally blank:)

G:\Drafts\Redflex Contract 06112013 Final

37

REDFLEX
TRAFFIC SYSTJMS:

RTSI Anti-Bribery Compliance

Procedures
Executive Summary and Detailed

Procedures

Exhibit "F"

NOTE: REDFLEX EMPLOYEE AND DIRECTOR OBLIGATIONS


All Redflex employees, directors, and others, such as Commercial Intermediaries, to whom this Policy
applies by written agreement, are responsible for reading and complying with the Redflex Global AntiBribery and Anti-Corruption Policy and the RTSI Anti-Bribery Compliance Procedures relating to
Commercial Intermediaries, Gifts and Hospitality, Charitable and Political Contributions, and Financial
and Accounting Policies (hereinafter "RTSI Anti-Bribery Compliance Procedures").
This Executive Summary is designed to provide a brief overview of the RTSI Anti-Bribery Compliance
Procedures-it is not a substitute for reading the complete RTSI Anti-Bribery Compliance Procedures.
Failure to read and comply with the all Redflex Anti-Bribery Policies and Procedures may result in
severe disciplinary action, up to and including termination.

DUTY TO REPORT
All Redflex employees, directors and Commercial Intermediaries are required to report any violations or
potential violations of this procedure or the Applicable Anti-Bribery Laws to:

Redflex's confidential, anonymous HOTLINE: 1-866-494-3161 (Access Code 4009)

Redflex Compliance Department: (ktomena@redflex.com) or (623-207-2313).

Redflex Traffic Systems, Inc.

Confidential

Page 2

Procedures for the Retention of Commercial Intermediaries


I.

General: These procedures detail the due diligence procedures that must be followe~ when
Redflex is interested in retaining a Commercial Intermediary to perform work for or on behalf of
Redflex. Particular caution shall be exercised in the selection and retention of Commercial
Intermediaries to confirm the professional qualifications and reputation of a Commercial
Intermediary and to ensure there is no legal impediment to doing business with a particular
Commercial Intermediary.

II.

Commercial Intermediary: This definition includes distributors, consultants, lobbyists, sales


agents, joint venture partners, construction subcontractors and other third party intermediaries
that provide services to or on behalf of Redflex.

III.

Timing: Redflex shall conduct anti-bribery due diligence on all Commercial Intermediaries in a
new engagement and upon contract renewal (or at least every three years).

IV.

Due Diligence: No Redflex employee or director shall enter into an agreement with a
Commercial Intermediary without completing the forms, documentation and due diligence
procedures required by Section 3, and obtaining the advanced, written approval of the
Compliance Department and General Counsel.

V.

Red Flags: The list of "Red Flags" located in Appendix F shall be reviewed and, if applicable to
the particular Commercial Intermediary, addressed through additional investigation and due
diligence.

VI.

Written Agreement: Once approved in writing, a written agreement shall be drafted that
includes representations and warranties regarding the Commercial Intermediary's business
practices and anti-bribery compliance. No payments will be made to, and no work for Redflex
will be conducted until a written agreement has been executed by both parties.

VII.

VIII.

IX.

Scope: No Redflex employee may take action during the performance of the agreement to
increase the scope of the Commercial Intermediary's obligations and duties.
Disbursement: No payment shall be made to any Commercial Intermediary ifthere is reason to
believe that all or any portion ofthat payment has been offered, given or promised, directly or
indirectly, for any unlawful purpose or in violation of Redflex Anti-Bribery policies and
procedures.
Documentation: All required forms relating to the Commercial Intermediary approval process
are located in the Appendices to the procedures.

Redflex Traffic Systems, Inc.

Confidential

Page 3

Gift & Hospitality Procedures


I.

General: The purpose of this document is to define the procedures that Redflex directors,
employees and Commercial Intermediaries must follow when providing/receiving gifts or
services to/from Interested Persons, Government employees and Foreign Government Officials

II.

Policy: No Gift or Hospitality will be provided directly or indirectly unless it is: (i) legal and
appropriate under u.s. federal, state, and local government laws and the laws ofthe country in
which the recipient resides, (ii) compliant with the policies of Redflex and the recipient's
organization, (iii) not provided so frequently to the same Interested Person so as to raise an
appearance of impropriety, and (iv) recorded fairly and accurately in Redflex's books and
records. All Redflex employees, directors and Commercial Intermediaries must review and
comply with Section 4.

III.

Strictly Prohibited: The following are NEVER permitted: (i) cash or cash equivalents; (ii) per
diem payments, extensions of credit or the forgiveness of debt; (iii) Gifts or Hospitality provided
in secret; (iv) Gifts or Hospitality that have the appearance of illegality; or (v) Gifts or Hospitality
that violate the local laws or policies ofthe Interested Person's employer/agency.

IV.

Approval: No Gifts or Hospitality may be provided to Government employees or Foreign


Government Officials without the advanced, written approval of the Compliance Department.

V.

Payment or Reimbursement: Payment or Reimbursement shall be provided to a Redflex


employee, director or Commercial Intermediary that has incurred expenses in connection with
providing Gifts or Hospitality only if supported by itemized receipts and a copy of the approval
documentation.

VI.

Gift Registry: All Gifts and Hospitality shall be recorded fairly and accurately in the books,
records and accounts of Redflex in accordance with this procedure.

VII.

Receiving Gifts or Hospitality: Redflex employees and directors and their immediate family are
prohibited from accepting Gifts or Hospitality over $100, or any special discounts from any
person or firm doing, or seeking to do business with Redflex without the Director of
Compliance's approval.

Redflex Traffic Systems, Inc.

Confidential

Page 4

Charitable & Political Contribution Procedures


I.

General: Any Redflex employee or director seeking to make a Charitable or Political contribution
must follow these procedures.

II.

Political Contributions: No Redflex employee or director may make a Political donation, for or
on behalf of Redflex, to a political party or any candidate for political office, without the prior,
written approval of the Compliance Department.

III.

Charitable Contributions: No Redflex employee or director may make a Charitable contribution,


for or on behalf of Redflex, to organizations or associations for the personal, financial, or
political benefit of a Government Employee or Foreign Government Official or his/her family.

IV.

No Cash Contributions: Under no circumstances shall a Redflex employee or director provide a


Political or Charitable contribution in cash.

V.

No Foreign Political Contributions: Under no circumstances shall a Redflex employee or director


make a political contribution to political parties or candidates in foreign countries even if the
contribution is legal under the laws of the foreign country.

VI.

Commercial Intermediaries: Commercial Intermediaries are expressly prohibited from offering


or providing Charitable contributions or Political donations, by or on behalf of Redflex.

VII.

Forms: Any Redflex employee or director seeking to make a Charitable or Political contribution
must complete and sign the "Request to Make a Charitable or Political Contribution" form.

VIII.

Documentation: All Political and Charitable contributions must be supported by a legitimate,


detailed and contemporaneous receipt from the recipient that fully and accurately describes the
contribution, and must be recorded fairly and accurately in the Redflex books and records. 1ft he
recipient refuses to provide a receipt containing this information, a contribution may not be
provided.

IX.

Approval: No Political or Charitable contributions may be provided without the advanced,


written approval of the Compliance Department.

X.

Payment: Payment shall only be made via Corporate check request. Payment shall be provided
only if supported by the documentation required by this procedure. Contribution expenses
CANNOT be submitted for reimbursement on expense reports.

Redflex Traffic Systems, Inc.

Confidential

Page S

Financial & Accounting Procedures


I.

General: Redflex shall establish and maintain a system of internal controls that ensures that all
transactions and dispositions of assets occur only with appropriate authorizations, and that all
such transactions are recorded fairly and accurately and in reasonable detail in Redflex's
accounts, books and records.

II.

Uability: The recordkeeping requirements apply to all aspects of the Company's business
activities and are not limited to bribes or other improper payments. The mischaracterization or
omission of any transaction in Redflex's books and records, or the failure to maintain proper
internal controls may result in significant liability for Redflex and the Redflex employees that
have caused the inaccurate books and records.

III.

Duty to Report: All Redflex directors and employees with financial and accounting duties have
an obligation to be alert to a possible violation of the following financial and accounting
requirements and will report suspected violations to the Compliance Department. Failure to do
so may result in severe disciplinary action.

IV.

Internal Controls: Redflex shall maintain a system of internal financial and accounting controls
sufficient to provide a reasonable assurance that (1) all transactions are authorized in
accordance with management's general or specific authorization, (2) all transactions are
recorded in a manner that allows the proper preparation of financial statements in conformity
with International Financial Reporting Standards ("IFRS") or generally accepted accounting
principles ("GAApll) as applicable, (3) access to assets is limited and permitted only with the
appropriate authorization, and (4) existing assets are compared with recorded balances, and
appropriate action is taken with respect to any differences.

V.

Strictly Prohibited: False or misleading entries in Redflex books and records are strictly
prohibited, such as: (1) false invoices, over-invoices or other misleading documentation; (2)
false entities, sales, purchases, services, loans or financial arrangements, (3) failing to record
transactions (off-book accounts/slush funds), (4) submitting false or inaccurate expense reports,
(5) creating records that mischaracterize the true nature of a transaction or recipient of
payment, (6) vague or non-specific descriptions for payments made in entries, (7) payment
descriptions that do not correspond to the appropriate account, (8) Gift or Hospitality expense
forms with incomplete information.

VI.

Compliance: All Redflex employees and directors shall strictly comply with the policies and
procedures required by this procedure.

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PROCEDURES FOR THE RETENTION OF COMMERCIAL INTERMEDIARIES

1.

PURPOSE

The purpose of this document is to define the due diligence procedures to be followed when Redflex
retains a Commercial Intermediary to perform work for or on behalf of Redflex. The procedures are
designed to ensure that the Commercial Intermediary, and anyone acting on its behalf, complies with
the laws, rules and regulations of the countries, states, cities and municipalities in which it operates,
including, without limitation, state and local anti-bribery laws, the Australian Criminal Code Act of 1995,
the U.S. Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act (Bribery Act), and the international
standards embodied in the Organisation for Economic Co-operation and Development's Convention on
Combating Bribery of Foreign Public Officials in International Business Transactions and the United
Nations Convention Against Corruption (collectively, the "Applicable Anti-Bribery Laws"), as well as
Redflex's anti-bribery policies and procedures.

2.

SCOPE

The procedures are designed to ensure that the Commercial Intermediary, and anyone acting on its
behalf, complies with the Applicable Anti-Bribery Laws and Redflex's anti-bribery policies and
procedures.
12.10 ~ TERMINOlOGY

"Commercial Intermediaries" include distributors, consultants, lobbyists, sales agents, joint venture
partners, construction subcontractors and other third party intermediaries that provide services to or on
behalf of Redflex.
A "Public Official" is:

(1) Any U.S. federal, state, or local government employee, including consultants acting on behalf of
the entity;
(2) Any officer or employee of a foreign government or member of its armed forces or any
department, agency, or instrumentality thereof;
(3) Any person acting in an official capacity for or on behalf of any such government or department,
agency or instrumentality;
(4) Any foreign political party or official thereof or any candidate for foreign political office; or
(5) Any nominee of any person described above.

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12.2

DUTY TO REPORT

All Redflex employees, directors and Commercial Intermediaries are required to report any violations or
potential violations of this procedure or the Applicable Anti-Bribery Laws to:

Redflex's confidential, anonymous HOTLINE: 1-866-494-3161 (Access Code 4009); or


Redflex Compliance Department: (ktomena@redflex.com) or (623-207-2313).

3.

PROCESS FLOW

Commercial intermediaries shall be retained on a selective, as-needed basis, and only after determining
that the special expertise needed is not available within Redflex.
Redflex shall conduct anti-bribery due diligence on all Commercial Intermediaries in a new engagement
and upon contract renewal or at least every three years. The purpose of the anti-bribery due diligence is
to confirm the professional qualifications and reputation of a Commercial Intermediary, to ensure there
is no legal impediment to doing business with a particular Commercial Intermediary and to ascertain
whether there are either historical corruption issues or negative media reports that could reflect
negatively on Redflex or put Redflex on notice of the likelihood of future wrongdoing.
[3;1

DOCUMENT PURPOSE FOR RETAINING INTERMEDIARY

Employees or directors seeking to engage a Commercial Intermediary must submit a data sheet to the
Compliance Department documenting the following:

The purpose for which the Commercial Intermediary is being retained

Why that particular Commercial Intermediary was selected

The services the Commercial Intermediary is expected to render

The Commercial Intermediary's proposed compensation

See Appendix A for Commercial Intermediary Data Sheet to be completed by employee or director.

13.2"

PREUMINARY RISK ANALYSIS TO DETERMINE EITHER BASIC OR ENHANCED LEVEL OF LEGAL REVIEW

The Commercial Intermediary Data Sheet will be reviewed to determine the level of risk associated with
the proposed intermediary. This review will determine the amount of due diligence necessary prior to
contract approval.
The Director Compliance will complete the preliminary risk analysis checklist and determine and
document whether a basic or enhanced level of review is required.
Results and conclusions shall be reviewed with General Counsel.

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See Appendix B for Preliminary Risk Analysis Questionnaire to be completed by Director of Compliance
and reviewed by General Counsel.

!3.3

ENHANCED DUE DILIGENCE REVIEW ~

Ifthe initial analysis indicates a high bribery risk, the proposed Commercial Intermediary shall undergo
an enhanced due diligence review.
General Counsel must complete the review and reference the "Enhanced Due Diligence Review"
guideline in Appendix C. All findings and observations must be documented.
Results and conclusions shall be reviewed and approved in writing by the Compliance Department.
See Appendix C for Enhanced Due Diligence Risk Procedures.

13.4

BASICDUE DlUGENCE REVIEW

Commercial Intermediaries that pose a lower bribery risk shall be processed through a basic due
diligence review.
Director of Legislative Affairs must reference the "Basic Due Diligence Review" guideline in Appendix D
and document all findings and observations.
Results and conclusions shall be reviewed, documented and approved in writing by the Compliance
Department
See Appendix D for Basic Due Diligence Risk Procedures.

13.5

DRAFT CONTRACT WITH COMMERCIAL INTERMEDIARY

Written Agreements with Commercial Intermediaries: Once risk has been reviewed and the
Compliance Department has provided a written approval regarding the use of a particular Commercial
Intermediary, a written agreement shall be drafted. In addition to documenting the general rights and
obligations of the parties, Redflex shall include representations and warranties in its written agreements
with Commercial Intermediaries regarding their business practices and anti-bribery compliance. Redflex
will also seek covenants in its written agreements with Commercial Intermediaries governing future
conduct as it relates to anti-bribery compliance.
Out of Scope Actions Prohibited: No Redflex employee or director may take action during the
performance of the agreement to increase the scope of the Commercial Intermediary's obligations and
duties. Any offer or attempt by the Commercial Intermediary to take action beyond the scope of the
agreement shall be immediately rejected and under no circumstances shall any employee or director act
in a manner indicating Redflex approval of the Commercial Intermediary's "out of scope" actions. The
failure to act in accordance with this instruction may result in severe disciplinary action, including
termination of employment.
Representations and Warranties: All written agreements with commercial intermediaries shall also
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contain the following representations and warranties. No payments will be made to, and no work for
Redflex will be conducted by a Commercial Intermediary until a written agreement containing the
following representations and warranties has been executed by both parties.

All Commercial Intermediaries shall be required to comply with the laws, rules and regulations
of the countries, states, cities and municipalities in which they operate (except to the extent
inconsistent with U.S. law), including, without limitation, the Applicable Anti-Bribery Laws, the
laws and regulations of the United States, and Redflex anti-bribery policies and procedures.

In all undertakings the Commercial Intermediary will not pay, offer, authorize, or agree to pay,
directly or indirectly, anything of value, on behalf of Redflex, to a Public Official or any other
person, while knowing or having reason to know that all or a portion of the thing of value may
be offered, given or promised, directly or indirectly, for the purpose of securing any improper
advantage.

The Commercial Intermediary warrants that all records, information and representations that it
has provided to Redflex before the signing of the contract and will provide to Redflex in the
future, are and will be complete and accurate.

The Commercial Intermediary will maintain accurate books and records regarding the
transactions conducted on behalf of Redflex

The Commercial Intermediary shall permit Redflex to conduct internal and independent audits
of its books and records to ensure compliance with the Applicable Anti-Bribery Laws.

The contract will automatically be rendered void ab initio and the Commercial Intermediary will
automatically surrender any claim for payment under the contract even for sales previously
concluded or sales previously rendered under the following circumstances:
o
o
o
o
o
o

The Commercial Intermediary has violated the Applicable Anti-Bribery Laws or Redflex
anti-bribery policies and procedures;
A material breach of contract;
Any failure to comply with the contract's representations and warranties;
Any refusal to timely comply with Redflex's right to audit the Commercial Intermediary's
books and records;
Taking action outside the scope of the contract without the prior, written approval of
Redflex;
Any failure by the Commercial Intermediary to notify Redflex of a material change in a
representation or warranty within 30 days.

Redflex will have the right, when required, to disclose the agreement, alleged improper activity,
and amount of payments made to the Commercial Intermediary under the contract to relevant
government authorities.

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The Commercial Intermediary will be solely responsible for all of its costs and expenses incurred
in connection with its representation of Redflex, unless responsibility is assumed in writing in
advance with a detailed itemization of expenses.

The Commercial Intermediary must maintain adequate controls over reimbursable expenses.

Payments must be made directly to the Commercial Intermediary's bank account in the country
in which it is incorporated, resides or provides services or by check payable to the Commercial
Intermediary for delivery where the Consultant is incorporated, resides or provides services.

Neither the Commercial Intermediary nor any of its company representatives is a Public Official,
a consultant to a Public Official, or affiliated with a Public Official, nor will any of them become a
Public Official during the term of the contract.

The Commercial Intermediary's duties and scope of its authority to act on behalf of Redflex will
be clearly defined. Any actions taken beyond the scope ofthis authority will be without Redflex
consent and could result in the termination of the contract.

The Commercial Intermediary shall agree that the contract is lawful in the jurisdiction in which it
is to be performed.

The Commercial Intermediary shall be prohibited from assigning or novating the agreement
without Redflex's prior written consent.

The Commercial Intermediary will fully indemnify Redflex for any violation of the laws in which
the commercial intermediary operates and the United States, including but not limited to, the
Applicable Anti-Bribery Laws.

All Commercial Intermediaries shall receive a copy of the Redflex anti-bribery policies and
procedures and will agree to be bound by its provisions.

The Commercial Intermediary shall be prohibited from hiring any sub-commercial


intermediaries (such as an agent, subcontractor or consultant) without Redflex's prior written
consent.

The Commercial Intermediary shall provide prompt notice of any change of ownership.

The Commercial Intermediary shall certify that it has not been convicted of or pleaded guilty to
a criminal offense, including one involving fraud or corruption, and that it is not now, to the best
of its knowledge, the subject of any government investigation for such offenses, and that it is
not now listed by any government agency or nongovernmental organization as debarred,
suspended, proposed for debarment, or otherwise sanctioned or ineligible for government
programs, privileges, contracts, or licenses.

A written commitment by the Commercial Intermediary to report any requests for improper
payments to:

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o
o

Redflex's confidential, anonymous HOTLINE: 1-866-494-3161 (Access Code 4009); or


Redflex Compliance Department: (ktomena@redflex.com) or (623-207-2313).

13.6 DISBURSEMENT TO COMMERCIAL INTERMEDIARIES


No payment shall be made to any Commercial Intermediary if there is reason to believe that all or any
portion of that payment has been or will be offered, given or promised, directly or indirectly, to any
individual or Public Official on behalf of Redflex for any unlawful purpose.
When auditing the Commercial Intermediary's compensation and expense reimbursements, Redflex
should consider (1) the amount paid in relation to the total payments under the agreement; (2) the
nature of the expenses; (3) the Commercial Intermediary's services rendered during the period; (4) the
customers with whom the Commercial Intermediary had contact.
Payments may only be made directly to the Commercial Intermediary's bank account in the country in
which it is incorporated, resides or provides services or by check payable to the Commercial
Intermediary for delivery where the Consultant is incorporated, resides or provides services.
Under no circumstances shall payments be made in cash or to unknown third parties.
Invoices for key Commercial Intermediaries shall contain the following certification:

By accepting payment hereof, [the Commerciollntermediary] hereby certifies that no portion of


the sum invoiced herein has been paid to any government official or any person or entity for any
unlawful purpose and al/ lawful payments to government entities for services, licenses, permits,
etc. are supported by itemized receipts and/or appropriate documentation.

13.7 MAINTAIN CONTRACT AND SUPPORT DOCUMENTATION


The Compliance Department and General Counsel's office will jointly maintain the following:

A register of all active Commercial Intermediaries (General Counsel's Office) ;


All documentation relating to the Commercial Intermediary due diligence review, including but
not limited to: risk review questionnaires, analyses, and supporting documentation (Compliance
Department);
Any written agreements, and all amendments thereto, between Redflex and the Commercial
Intermediary (General Counsel's Office).

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Authorization and Change History

Authorization

This document is authorized by:

Name:

R. DeVincenzi

Title:

CEO

Approval Date:

May 2013

Change History Log

Date

Ver. #

Change Description

Author

4/23/2012

Initial Draft

Kim Tomena

11/5/2012

4/12/2013

Updated procedures with reference to Compliance


Department. Due diligence reviews to be
coordinated together in a joint effort by Legal,
Legislative Affairs, and Compliance.

Kim Tomena

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APPENDIX A
COMMERCIAL INTERMEDIARY DATA SHEET
NOTE: To be Completed by Employee or Director Seeking to Engage
Intermediary
1).

Name of the person/firm you want to engage as a Commercial Intermediary for Redflex?

2).

What is the purpose for retaining the Commercial Intermediary?

3).

Why was this particular Commercial Intermediary selected?

4).

What are the services the Commercial Intermediary is expected to render?

5).

What is the Commercial intermediary's proposed compensation?

Date

Employee/Director Signature
(Attesting that above is true)

Date

Reviewed by
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APPENDIX B
PRELIMINARY RISK ANALYSIS QUESTIONNAIRE (To determine Basic or
Enhanced Review)
NOTE: To be completed by Director of Compliance
1).

What is the purpose for which the Commercial Intermediary is being retained (e.g.
marketing, distribution, business development, taxation or legal services, lobbying, local
representative, service provider)?

2).

Is the Commercial Intermediary likely to have contact with Public Officials on behalf of
Redflex?

3).

If so, what would be the nature and frequency of contact that the Commercial
Intermediary is likely to have with Public Officials?

4).

Will the Commercial Intermediary sell or market Redflex products and/or services to
commercial customers or government customers?

5).

What is the amount of revenue Redflex generates over the course of a calendar year in
the territory in which the Commercial Intermediary operates?

6).

Would the Commercial Intermediary have exclusive rights to sell or market Redflex
products and/or services in a specific territory?

7).

What is the amount and type of compensation that the Commercial Intermediary would
receive?

8).

What would be the Commercial Intermediary's total compensation under all contracts
that Redflex has entered into with the Commercial Intermediary, worldwide?

9.).

Is the Commercial Intermediary a publicly-traded company listed on a recognized stock


exchange?

10).

Are the Public Officials or their close relatives major shareholders in or hold key
management positions with the Commercial Intermediary?

11) .

Why has this particular Commercial Intermediary been selected? Please describe the
evaluation criteria utilized in making this selection.

12).

Conclusion and Results?

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Based on review of data, document whether a basic or enhanced review of proposed


Commercial Intermediary is required.

Completed by

Date

Reviewed by

Date

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APPENDIX C
ENHANCED DUE DILIGENCE REVIEW
NOTE: To be Completed by the General Counsel's Office
If it is determined that an enhanced due diligence review of a Commercial Intermediary is appropriate,
the following shall be performed, requested, and information gathered and documented (subject to
changes by General Cou nsel as they have discretion over the scope of the information that is ultimately
collected):

Conduct an in-person or telephone interview with the Commercial Intermediary, including


owners, directors, senior management, legal and compliance staff, business personnel, and
employees charged with regulatory compliance and approvals, to assess the Commercial
Intermediary's qualifications and its knowledge of its anti-bribery compliance obligations.

Conduct a review of local laws relating to the retention of commercial intermediaries in the
subject jurisdiction.

Require the Commercial Intermediary to complete a background questionnaire (See Appendix E)


containing the following information, as applicable:
o

The Commercial Intermediary's full legal name, main point of contact, address, corporate
registration documents, date of organization, number of employees, primary services
provided, territory where services are to be provided, payment arrangements, government
registrations, and a list of its subsidiaries and the locations of its facilities.

List of the Commercial Intermediary's owners, together with their ownership percentage
and citizenship.

List of the members of the board of directors or other governing body of the Commercial
Intermediary, including their citizenship.

List of all key employees of the Commercial Intermediary who are likely to act on behalf of
Redflex, including their titles and citizenship.

List of the Commercial Intermediary's owners/directors/key employees' outside ownership


interests, directorships or employment, including their titles and the names of the outside
organizations.

List of any positions currently or recently held by the Commercial Intermediary's


owners/directors/key employees with respect to political parties or campaigns, and a list of
any of the owners, directors or key employees who currently hold, or have recently held,
political office.

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List of current or previous government employment of any owners, directors or key


employees, including the name of the government agency, their title or rank, and the date
the government employment was terminated.

List of close family members of owners/directors/key employees who currently serve in the
government or military, or who have duties for a political party or campaign, or who hold
political office.

List of government agencies that the Commercial Intermediary will interact with on behalf
of Redflex.

Standard compliance questionnaire to assess past violations of law relating to fraud, bribery,
corruption, anti-trust or tax evasion and inclusion on any denied parties, sanctions, or
debarment lists.

Request that Commercial Intermediary provide up to five business references.

Request that access to the Commercial Intermediary's books and records, a copy of recent
audited financial statements, and a financial reference from a bank, accountant or supplier.

Review the Commercial Intermediary's internal controls.

Obtain a credit report on the Commercial Intermediary

Obtain a copy of the Commercial Intermediary's compliance policies and procedures, including
its code of conduct, and its procedures regarding gifts, hospitality, travel, charitable
contributions and commercial intermediaries.

Review the reasonableness ofthe Commercial Intermediary's price or compensation.

Ask that Commercial Intermediary provide copies of resumes for all significant owners, directors
and key employees.

Conduct media and internet searches on the Commercial Intermediary and any significant
owners, directors and key employees.

Conduct public record and database searches of denied parties lists and politically exposed
persons lists on the Commercial Intermediary and its significant owners, directors and key
employees.

Summarize Results and Conclusions

Completed by

Date

Reviewed and Approved by

Date

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APPENDIX D
BASIC DUE DILIGENCE REVIEW
NOTE: To be Completed by Director of Legislative Affairs
If it is determined that a basic due diligence review of a Commercial Intermediary is appropriate, the
following information will be collected and documented (subject to changes by the General Counsel's
office as they have discretion over the scope of the information that is ultimately collected).
The Director of Legislative Affairs shall be required the Commercial Intermediary to complete a
background questionnaire (See Appendix E) containing the following information, as applicable:

The Commercial Intermediary's full legal name, main point of contact, address, date of
organization, number of employees, primary services provided, territory where services are to
be provided, payment arrangements, government registrations, and a list of its subsidiaries or
locations of facilities.

List of the Commercial Intermediary's owners, together with their ownership percentage and
citizenship.

List of the members of the board of directors or other governing body of the Commercial
Intermediary, including their citizenship.

List of all key employees of the Commercial Intermediary who are likely to act on behalf of
Redflex, including their titles and citizenship.

Current government employment of the Commercial Intermediary's owners, directors and key
employees.

Government employment of the Commercial Intermediary's owners, directors and key


employees within the previous two years.

Standard compliance questionnaire to assess past violations of law relating to fraud, bribery,
corruption, anti-trust or tax evasion and inclusion on any denied parties, sanctions, or
debarment lists.

The Commercial Intermediary shall be asked to certify its financial stability.

The Commercial Intermediary shall be asked to certify that it maintains its books and records in
accordance with internationally accepted accounting standards.

The Commercial Intermediary shall be asked to certify compliance with the Applicable AntiBribery Laws.

The Commercial Intermediary shall be asked to provide a business reference.

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Media and internet searches shall be conducted on the Commercial Intermediary and any
significant owners, directors and key employees.

Database searches of denied parties lists and politically exposed persons lists shall be conducted
on the Commercial Intermediary and its significant owners, directors and key employees.

Summarize Results and Conclusions

Completed by

Date

Reviewed and Approved by

Date

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APPENDIX E
COMMERCIAL INTERMEDIARY BACKGROUND QUESTIONNAIRE

1. Applicant is

D Corporation D Individual

2. Applicant's Primary Contact (for this


agreement)
Name
Title
Address

Name
Address

Phone
Fax
Email

Phone
Fax
Email

D Main Office or a D Branch/Subsidiary office.

3.

The applicant's address in Item 1 is the

4.

Ust main office/all branches/subsidiaries of the applicant. (Attach additional page if


necessary.)

Name
Address

Name
Title
Address

Phone
Fax
Email

Phone
Fax
Email

D Proprietorship D

5.

Type of Business:
Company

6.

County/State of Incorporation

7.

Registration Number (if applicable)

8.

Social Security Number or TIN (if applicable)

9.

Date of Establishment

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Individual

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10.

Ust of all owners below. (Use attachment if necessary.)

Owner (s)

11.

Citizenship

% Ownership

Ust of members of Board of Directors or other governing body. (Use attachment if necessary.)

Director(s)

Citizenship

Has there been any change in the ownership during the last two years?
''Yes'', please explain.

13.

Does any government department, agency or instrumentality, or any official or employee


thereof, have any ownership or other financial interest in applicant's organization, or an
affiliate thereof, directly or indirectly?
Yes
No If "Yes", please explain

14.

No If

Principal Officers. (Use separate sheet, if necessary.)


Name/Title

15.

Yes

12.

Education

Employment Background

Is the applicant, any owner, or any employee of the applicant, or any principal officer an
employee, elected or appointed official, or a former elected or appointed official of any
government department including military agency or instrumentality?
Yes
No. If
''Yes'', list names, titles and government positions.

For each "Yes" answer, provide name of government department, agency or instrumentality,
position or office held or sought, military rank where applicable, etc. and termination date.

16.

Does the applicant, any owner, any employee of the applicant, or any present or former
principal officer have any family relationships with current members of a government
department, agency or instrumentality, or any official or employee thereof?
Yes
No
For each "Yes", please provide complete details.

17.

Is the applicant, any owner, any employee ofthe applicant, or any present or former principal
officer an official of any political party or candidate for political office in the U.S. or any
Yes
No. For each ''Yes'', please provide complete details.
foreign country?

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18.

Does the applicant employ any former employees, civilian or military, of the u.s. Government,
or of the government(s) in which the services contemplated by the proposed agreement will
be performed? DYes D No. If "Yes", please explain.

19.

Does applicant have any current or past professional or personal relationship with Public
Official in the country, state, city or municipality in which it will perform services? (For
purposes of this question, applicant includes any principal, staff member, key employee,
officer, director or shareholder of applicant. Personal or professional affiliations include
family relationships, and past or present official positions. Government officials include
political officials or candidates for political office.) DYes D No. If "Yes", please explain.

20.

Do any of the principals of your organization have an ownership interest above 5% in any
other organization? DYes D No
If "Yes", identify each such other organization, its address, its business activities, the role played
in it by any principal of the applicant's organization, and any other relationship between the
applicant and such other organization(s}.

21.

Has the applicant, any associated organization, any prior organization, any prior associated
organization, any present or former principal officer, director, employee, or shareholder been
convicted of or pleaded guilty to a criminal offense, including but not limited to, allegations of
fraud, misrepresentation, bribery, corruption or other related activities in the U.S. or any
other country? DYes D No
If the answer is anything other than an unequivocal"No", please provide complete details. (Use
a separate attachment if necessary.)

22.

Are there any legal, arbitral, or regulatory proceedings pending against the applicant, which, if
adversely determined, could have a material adverse effect on the ability of the applicant to
perform the services contemplated by the proposed agreement? DYes D No. If ''Yes'',
please explain.

23.

Is the applicant now, to the best of its knowledge, the subject of any government
investigation for offenses, including but not limited to, allegations of fraud,
misrepresentation, bribery, corruption or other related activities, or listed by any government
agency or nongovernmental organization as debarred, suspended, proposed for debarment or
otherwise sanctioned or ineligible for government programs, privileges, contracts or licenses?
DYes D No. If ''Yes'', please explain.

24.

Principal individual(s) who will provide services in support of Redflex.

Name/Title

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Employment Background

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25.

List previous or current agreements, if any, with Redflex or any of its affiliates.

26.

Which Redflex products or services does applicant wish to act as a Commercial Intermediary?

27.

Briefly describe the nature and history of applicant's business.


If applicant is an individual, please provide resume. If applicant is a company, please provide
copies of company brochures, annual reports and any other documentation deemed
appropriate. Also, please attach latest fiscal balance sheet and operating statement hereto.

28.

Estimate the total available market in the territory for Redflex products or services for which
the applicant wishes to act as a Commercial Intermediary.

29.

Estimate the potential sales in your territory for Redflex.

30.

Provide other relevant market information.

31.

List the names and titles of any Public OfficiC)ls and Government Agencies that applicant will
interact with on behalf of Redflex.

32.

Provide a copy of those laws, regulations and policies which relate specifically to your conduct
as a Commercial Intermediary including but not limited to those covering reporting and
payment of commissions and fees, and those covering your conduct in dealing with Public
Officials.

33.

List other firms represented (currently or within the last 12 months) where the activities
performed are similar to those contemplated under the proposed agreement. (Attach
additional page if necessary).

34.

List five General References. (Persons/Firms familiar with applicant's organization.)

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Name
Address

Name
Address

Phone
Fax
Email

Phone
Fax
Email

Name
Address

Name
Address

Phone
Fax
Email

Phone
Fax
Email

Name
Address

Name
Address

Phone
Fax
Email

Phone
Fax
Email

Name
Address

Name
Address

Phone
Fax
Email

Phone
Fax
Email

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35.

Financial References. (Indicate banks, principal suppliers, etc.)

Name
Address

Name
Address

Phone
Fax
Email

Phone
Fax
Email

Name
Address

Name
Address

Phone
Fax
Email

Phone
Fax
Email

36.

The name and contact information for the bank in which bank wire transfers shall be sent or
address where checks made payable to Commercial Intermediary shall be delivered.

Name
Address

Name
Address

Phone
Fax
Email

Phone
Fax
Email

37.

Other pertinent comments in support ofthis application.

38.

Applicant agrees to allow Redflex to review to its books and records and internal controls, and
provide Redflex with a copy of recent audited financial statements? DYes D No. If "No",
please explain.

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I certify that the information provided in each of the Items is true and correct to the best of my
knowledge. I understand that Redflex will rely on the above information in determining whether to
enter into any contractual agreement with the applicant, and that any false or misleading information
provided by the applicant would be grounds for the immediate termination of any such contractual
agreement.

Signature: _ _ _ _ _ _ _ _ _ _ _ __

Name

Title

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APPENDIX F
COMMERCIAL INTERMEDIARY /IRED FLAGS"
In selecting a commercial intermediary, Redflex must be able to demonstrate that it has identified and
fully investigated /Ired flags" -generally defined as circumstance which could place a reasonable person
on notice that illegal or improper conduct has or may occur. The discovery of a /Ired flag" during due
diligence shall, at a minimum, require additional investigation.
Additional due diligence and investigation shall be conducted ifthe Commercial Intermediary:

Requests payment in cash or to a numbered account or the account of a third party;

Request's payment in a country other than the Commercial Intermediary's country of residence
or the territory of the sa-Ies activity (especially if it is a country with little banking transparency);

Wire transfers do not disclose the identity of the sender or recipient;

Requests payment or partial-payment in advance or immediately prior to a procurement


decision;

Requests payment for extraordinary, ill-defined or last-minute expenses;

Does not have adequate resources or staff to perform the work required under the agreement;

Has an employee who simultaneously holds a government position;

Has a family member in a government position, especially if the family member works in a
procurement or decision-making position or is a high-ranking official in the department that is
the target of the intermediary's efforts;

Refuses to disclose owners, partners or principals;

Refuses to agree to representations and warranties in the contract that requires compliance
with Applicable Anti-Bribery Laws or Redflex Anti-Bribery Policies and Procedures;

Is owned by a government entity;

Uses shell or holding companies or other unusual corporate structures that obscure ownership;
Is specifically requested by a Public Official ofthe particular government customer;

Has undisclosed agents or subagents who assist with its work;

Commissions are outside the range that is typical or customary within the region or is unusually
high without a corresponding level of service;

Seeks to reserve the right to assign rights or obligations to a third party;

Is ignorant or indifferent to local laws and regulations governing the region in question and the
intermediary's proposed activities in particular;

Identifies a business reference who declines to respond to questions or who provides an evasive
response;

Is the subject of credible rumors or media reports of inappropriate payments;

Is currently under investigation or has been convicted of previous violations of law;

Refuses to provide Redflex with audit rights;

Reluctant to participate in the Redflex commercial intermediary due diligence process;

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Suggests that unethical or illegal conduct is acceptable because it is the norm in the country in
which the contract will be performed.

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GIFTS AND HOSPITALITY PROCEDURES

PURPOSE

The purpose of this document is to define the procedures that Redflex directors, employees and
Commercial Intermediaries must follow when providing/receiving gifts or services to/from Interested
Persons, Government employees and Foreign Government Officials.
Redflex employees, directors and Commercial Intermediaries shall not, directly or indirectly, give, offer
or promise Gifts or Hospitality to any Government Employees or Foreign Government Officials without
the prior, written approval of the Compliance Department.

SCOPE

This procedure relates to the rules governing the offer and acceptance of Gifts and Hospitality to
Interested Persons, Government Employees and Foreign Government Officials. All Redflex directors,
employees and Commercial Intermediaries must be particularly careful in determining whether a Gift or
Hospitality is legal, reasonable and justifiable under the particular circumstance before the Gift or
Hospitality is offered or accepted. No Gift or Hospitality will be provided directly or indirectly unless it is
(i) legal and appropriate under U.S. federal, state, and local government laws and the laws of the
country in which the recipient resides, (ii) compliant with the policies of Redflex and the recipient's
organization, and (iii) designed to specifically advance Redflex business.
These procedures shall apply to all of Redflex's activities and transactions, both within and outside the
United States. The procedures will control even though local law or custom may permit business
standards that are less exacting than the procedures. Any circumstances not specifically addressed by
this procedure shall be addressed on a case-by-case basis in consultation with the Compliance
Department.

12.1

DUTY TO REPORT

All Redflex employees, directors and Commercial Intermediaries are required to report any violations or
potential violations of this procedure or the Applicable Anti-Bribery Laws to:

Redflex's confidential, anonymous HOTLINE: 1-866-494-3161 (Access Code 4009); or


Redflex Compliance Department: (ktomena@redflex.com) or (623-207-2313).

TERMINOLOGY

"Commercial Intermediaries" include distributors, consultants, lobbyists, sales agents, joint venture
partners, construction subcontractors and other third party intermediaries that provide services to or on
behalf of Redflex.
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A "Gift" includes, but is not limited to:


Any gratuity, favor, discount, benefit, commiSSion, loan, special pricing arrangements, favorable
payment terms forbearance, training, services, employment, internships or contributions of time,
materials, equipment, or facilities, or other tangible or intangible items having monetary value, for
which fair market value is not paid by the recipient.
"Hospitality" Includes, but is not limited to:
Any form of entertainment, including meals (whether hosted at a Redflex facility or elsewhere), social
events (including sporting events, parties, golf outings, plays, receptions) and travel or related expenses
(including transportation, local travel, lodgings and meals, whether provided in-kind, by purchase of a
ticket, or reimbursement after the expense has been incurred).
A "Government Employee" is:
Any U.S. federal, state, or local government employee, including consultants acting on behalf of the
entity.
A "Foreign Government Official" is:
(1) any officer or employee of a foreign government or member of its armed forces or any department,
agency, or instrumentality thereof; (2) any person acting in an official capacity for or on behalf of any
such government or department, agency or instrumentality; (3) any official of a public international
organization (e.g., International Monetary Fund, The World Bank, the Red Cross); (4) any foreign political
party or official thereof or any candidate for foreign political office; or (5) or a nominee of any person
described above.
An "Interested Person" includes:

Government Employees or Foreign Government Officials,

Any person or firm doing or seeking to do business with Redflex, including vendors suppliers and
Commercial Intermediaries, or

A financial institution.
POLICY REQUIREMENTS FOR PROVIDING GIFTS AND/OR HOSPITALITY TO INTERESTED PERSONS

The following are gift and/or hospitality policy requirements:

General Policy: All Redflex directors, employees and Commercial Intermediaries who offer or
provide Gifts or Hospitality to an Interested Person must ensure that it is ethical and legal and
cannot reasonably be interpreted as an attempt to obtain or retain an improper business
advantage for Redflex or otherwise reflects negatively on the reputation of Redflex or the
recipient. Any Gift or Hospitality provided to an Interested Person shall be done openly and

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transparently and shall be recorded fairly and accurately and Redflex's books and records. Any
Gifts or Hospitality over $100 requires approval from the Compliance Department.

Business-Appropriate: Any Gift or Hospitality provided to an Interested Person shall be


business-appropriate. A Gift or Hospitality is never business-appropriate if it: (1) would
embarrass the Interested Person or Redflex if it were publicly disclosed, (2) is excessive or
provided so frequently that it could be interpreted as an attempt to influence the Interested
Person, or (3) is disproportionate to the annual income of the Interested Person.

Business Purpose: Hospitality offered on behalf of Redflex must be directly related to Redflex
business. Hospitality must be reasonable and bona fide and must be offered only in connection
with the promotion, demonstration or explanation of company products or services or the
execution or performance of a contract with an Interested Person (or their
agency/organization). The costs associated with such Hospitality will be only those necessary
and reasonable to educate the Interested Person about Redflex operations.

Strictly Prohibited: Under no circumstances shall Redflex employees, directors or Commercial


Intermediaries give to Interested Persons: (1) Gifts or Hospitality in the form of legal currency
and cash equivalents such as travelers' checks, gift cards, bearer instruments, notes and similar
instruments or equity or debt instruments of any kind issued by Redflex or any of its affiliates or
subsidiaries, or any other business entity; (2) per diem payments, extensions of credit or the
forgiveness of debt; (3) Gifts or Hospitality provided in secret; (4) Gifts or Hospitality that have
the appearance of illegality; or (5) Gifts or Hospitality that violate the local laws or policies of the
Interested Person's employer/agency.

legal Under local laws and Policies: The Redflex employee, director or Commercial
Intermediary proposing the Gift or Hospitality shall consult the local laws and customs governing
Gifts and Hospitality for the country, state or locality, in which the Interested Person is based, as
well as the Interested Person's policy on Gifts and Hospitality, to determine that the Gift or
Hospitality conforms to local law or local custom and individual policy. In the event that the
value of the Gift or Hospitality exceeds the limits permitted by local laws or custom or violates
the Interested Person's policy, then the Gift or Hospitality shall not be extended.
o

Special Note Regarding Government Employees and Foreign Government Officials: The
laws and regulations governing the offering of Gifts and Hospitality to Government
Employees and Foreign Government Officials are complex and it is the policy of Redflex
to strictly comply with such laws and regulations. In all cases, it is against Redflex policy
to offer, promise or give Gifts or Hospitality to Government Employees or Foreign
Government Officials unless the laws and regulations applicable to that Government
Employee or Foreign Government Official expressly permit the acceptance of such Gifts
and Hospitality.
In addition, Redflex employees, directors and Commercial
Intermediaries shall not, directly or indirectly, give, offer or promise Gifts or Hospitality
to any Government Employees or Foreign Government Officials without the prior,
written approval ofthe Compliance Department.

Transparency and Documentation: All Gifts and Hospitality extended by Redflex directors,
employees and Commercial Intermediaries to Interested Persons, regardless of the value, shall

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be accurately reflected in the books, records and accounts of Redflex, and shall in all
circumstances record the following in reasonable detail:

The date, names, titles and company, government or agency of the Interested Persons.

The names and titles of the Redflex employees involved.

A description of the Gift or Hospitality and the precise value of the Gift or Hospitality. If
a precise value cannot be assigned, then a reasonable estimate of its value shall be
provided.

The business purpose of the Gift or Hospitality.

Spouses and Significant Others: Under no circumstances shall the spouses, significant others or
relatives of Interested Persons be given any Gift or invited to, or participate, in any Hospitality
without the prior written approval of the Compliance Department, regardless of the value
thereof.

Personal Funds: No employees, directors or Commercial I ntermediaries shall use personal


funds, whether or not reimbursed by Redflex, to provide Gifts or Hospitality to Interested
Persons in a manner inconsistent with the Anti-Bribery Policy & Procedures. In other words,
Redflex employees and directors shall comply with the provisions of these procedures even if
personal funds are used.

Frequency of Gifts-Non-Government Interested Persons: Frequency of Gifts and Hospitality must be


carefully monitored, as the cumulative effect may give rise to the appearance of improper conduct. In
the event that a Non-Government Interested Person receives Gifts or Hospitality valued at US$100 or
less three times in a single twelve-month period, then any additional Gifts and Hospitality thereafter
during the next twelve months shall be treated as valued at more than US$100 for purposes of these
procedures, and shall require the prior written approval ofthe Compliance Department.
Frequency of Gifts-Government Employees and Foreign Government Officials: Under no
circumstances should Redflex employees, directors or Commercial Intermediaries provide Gifts or
Hospitality (even of nominal value) to Government Employees or Foreign Government Officials without
prior written approval of the Compliance Department irrespective of whether a prior gift has been
approved.
Widely Attended Gatherings: Hospitality provided at, in conjunction with, or during widely-attended
events such as trade shows shall not require prior approval, provided that all of the following are
satisfied:

The Hospitality must be of reasonable value, conforms strictly to the requirements set
forth in these procedures, and may not be offered to improperly influence any Interested
Person.

The widely-attended event in question has at least forty attendees and the Redflexsponsored Hospitality will have at least fifteen attendees.

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The Hospitality is approved in writing by the Compliance Department prior to the widely
attended gathering.

The Hospitality shall be fully documented and submitted to the Compliance Department
not less than seven business days prior to the provision of the Hospitality.

The Redflex employee, director or Commercial Intermediary proposing Hospitality at or


in conjunction with a widely-attended event shall consult the local laws and customs
governing Gifts and Hospitality for the country, state or locality in which the Interested
Person is based, as well as the Interested Person's policy on Gifts and Hospitality, to
determine that the provision of Hospitality conforms to local laws or local custom and
individual policy. In the event that the value of the Logo Item exceeds the limits
permitted by local laws or custom or violates the Interested Person's policy, then the Gift
or Hospitality shall not be extended.

The Value of Gifts and Hospitality at a Widely-Attended Gathering: In the case of Hospitality, the
value of Hospitality under these procedures shall be the total actual cost of the event, in U.S. dollars,
divided by the number of participants or attendees reasonably expected to attend or that will be
invited to the event. In the case of Gifts, the value of the Gift under these procedures shall be the
greater of: (i) the actual cost to Redflex of the Gift; (ii) the fair market value (if any) of the Gift; and
(iii) the face value (if any) of the Gift. All caps and limits set forth in these procedures are in U.S.
dollars but also apply to the equivalent amount of converted into a foreign currency.
4.1 TRAVEL, LODGING AND HOSPITAUlY EXPENSES FOR GOVERNMENT EMPLOYEES OR FOREIGN
GOVERNMENT OFFICIALS

Travel and lodging may not be provided to Government Employees or Foreign Government Officials
unless prior written authorization is obtained from the Compliance Department, and provided that all of
the following are satisfied:

Directly Related to Redflex Business: Travel, Lodging and Related Hospitality Expenses must be
completely and directly related to Redflex business, and must be offered only in connection with
the promotion, demonstration or explanation of Redflex products or services or the execution
or performance of a contract with a foreign government customer. The costs associated with
such Travel, Lodging and Related Hospitality Expenses will be only those necessary and
reasonable to educate the Government Employee or Foreign Government Official about Redflex
operations. Redflex may not select the particular Government Employee or Foreign Government
Official who may travel. This decision may be made only by the relevant Government agency.

Transparency and Documentation: All Travel, Lodging and Related Hospitality Expenses,
regardless of value, must be fairly and accurately recorded in Redflex's books and records in
accordance with the recording procedures outlined in this Procedure.

Legal and Appropriate Under Local Laws: All Travel, Lodging and Related Hospitality Expenses
must be reasonable, appropriate to the circumstances, tasteful, permitted under the U.S.
federal, state, and local government laws and the laws of the country in which the recipient

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resides, and guidelines of the Official's employer/agency.


Hospitality Expenses may not be lavish.

Prior Approval from Supervisor: If Redflex will pay airfare or lodging expenses for a Government
Employee or Foreign Government Official in connection with the Government Employee or
Foreign Government Official's visit to a Redflex office or facility, Redflex must obtain prior
written approval from the Government Employee or Foreign Government Official's supervisor
that the visit and proposed hospitality are permissible.

The Travel, Lodging and Related

If the terms of a contract with a Government customer specifically require a


Government Employee or Foreign Government Official's to visit Redflex's office or
facilities, prior written approval or confirmation from the Government Employee or
Foreign Government Official's supervisor is not required, but all travel and lodging
expenses related to any such visit shall be subject to the Requirements in Section 4 of
these Procedures.

Payment Directly to Vendors: Travel, Lodging and Related Hospitality Expenses shall be paid
directly to vendors (e.g., hotels, travel agencies, airlines). If direct payment is not pOSSible,
Redflex will reimburse the Government Employee or Foreign Government Official only up to a
modest amount and upon the presentation of itemized receipts. Any reimbursement paid will
be directly to the Government Employee or Foreign Government Official's employer/agencyRedflex will never directly reimburse a Government Employee or Foreign Government Official
for his/her expenses.

No Advancement: Advancement of Travel, Lodging and Related Hospitality Expenses is


strictly prohibited.

Economy Class Travel Required: All commercial airfare for Government Employees or Foreign
Government Officials paid for by Redflex will be economy class.

Business Class Lodging Required: All lodging for Government Employees or Foreign Government
Officials paid for by Redflex will be in business-class hotels. First-class hotels are not permitted.

No Compensation for Travel: Redflex may not compensate the Government Employee, Foreign
Government Official, or foreign Government customer for the visit to a Redflex office or facility.

No Spouses or Significant Others: Redflex may not provide Travel, Lodging and Related
Hospitality Expenses to a Government Employee or Foreign Government Official's spouse,
significant other or relative.

Business Travel Must be Necessary: No Travel, Lodging and Related Hospitality Expenses shall
be offered to a Government Employee or Foreign Government Official if the business reason
underlying the trip does not require travel.

No Entertainment, Side Trips or Spending Money: Redflex shall not fund, organize or host
entertainment, side trips or leisure activities for the Government Employee or Foreign

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Government Official, nor provide the Government Employee or Foreign Government Official
with a stipend or spending money.

Meals and Refreshments: Expenses for meals and refreshments for Government Employees and
Foreign Government Officials must comply with the laws, regulations and policies applicable to
the Government Employee, and must receive the advanced, written approval of the Compliance
Department.

PROCESS FLOW FOR PROVIDING GIFTS AND lOR HOSPITALITY TO NON-GOVERNMENT INTERESTED
PERSONS

5;1 ,tOMPlETE "REQUEST TO PROVIDE GIFTS AND/OR HOSPITALITY TO NON-GOVERNMENT INTERESTED


PERSONS"F'ORM -APPENDIX A

Employee, director, or commercial intermediary must complete "Request to Provide Gifts and/or
Hospitality to Non-Government Interested Persons" form. The Gift(s) and Hospitality must comply with
the requirements for Gifts and Hospitality set forth in the Requirements section above.
logo Items: The provision of any Gifts or tangible object bearing a Redflex name or logo, or the name or
logo of any Redflex business unit or product ("Logo Items") to Non-Government Interested Persons,
shall not require review or approval, provided that all of the above requirements in Section 4 are
satisfied.

15;2 .. REVIEW AND APPROVE REQUEST FORM


If the Gift and/or Hospitality is US$100 or less and does not follow 3 such Gifts/Hospitality provided to
the same Non-Government Interested Person, Department Head must review the "Request to Provide
Gifts and/or Hospitality to Non-Government Interested Persons" form and complete the review and
approval section in strict compliance with the Gift and Hospitality Policy Requirements outlined in
Section 4. Ifthe Gift and/or Hospitality complies with the Requirements, then the Department Head can
approve the form. If the gift/hospitality does not comply with the requirements, the form shall be
forwarded to Compliance Department for review.
If the Gift and/or Hospitality is greater than $100 OR follows 3 such Gifts/Hospitality provided to the
same Non-Government Interested Person, then the request must be reviewed and approved by
Compliance Department.
See Appendix A for "Request to Provide Gifts and/or Hospitality to Non-Government Interested
Persons" form.

15.3 . SUBMIT EXPENSE FOR PAYMENT OR REIMBURSEMENT


In the case where an employee, director or Commercial Intermediary incurs expenses in connection with
providing Gifts or Hospitality, the employee, director or Commercial Intermediary shall submit an

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expense report and attach original, itemized receipts to Department Head to approve within fifteen
business days following the provision of the Gift or Hospitality.
In the case where a Gift or Hospitality is paid for using Redflex funds, the Gift or Hospitality shall be fully
documented, including itemized receipts, and attached to a Payment Request or Invoice in a timely
manner. The Payment Request or Invoice shall be approved by Department Head.
In both cases above, a copy of the pre-approved "Request to Provide Gifts and/or Hospitality to NonGovernment Interested Persons" form shall be attached to the documents. Neither payment nor
reimbursement shall be provided without this form documenting that the Gift or Hospitality has been
approved in accordance with these procedures outlined in 5.2.
15.4

RECORD EXPENSE IN DETAIL (ACCOUNTING DEPARTMENT)

All Gifts and Hospitality extended by Redflex employees to Interested Persons shall be fairly and
accurately reflected in the books, records and accounts of Redflex, and shall in all circumstances record
the following in reasonable detail:

The date, names, titles and company of the Interested Persons.

The names and titles ofthe Redflex employees involved.

A description of the Gift or Hospitality and the precise value of the Gift or Hospitality. If a
precise value cannot be assigned, then a reasonable estimate of its value shall be provided.

15.5

The business purpose ofthe Gift or Hospitality.

FORWARD COpy 01: FORM TO THE COMPLIANCE DEPARTMENT FOR FlUNG PURPOSES

A copy of all "Request to Provide Gifts and/or Hospitality to Non-Government Interested Persons" forms
approved by the Department Head must be forwarded to the Compliance Department for filing
purposes.

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PROCESS FLOW FOR PROVIDING GIFTS AND/OR HOSPITALITY TO GOVERNMENT EMPLOYEES OR


FOREIGN GOVERNMENT OFFICIALS

6.1 COMPLETE "REQUEST TO PROVIDE GIFTS AND/OR HOSPITALITY TO GOVERNMENT EMPLOYEES OR FOREIGN GOVERNMENT OFFICIALS" FORM - ARPENDIX B .,
Employee, director, or commercial intermediary must complete "Request to Provide Gifts and/or
Hospitality to Government Employees or Foreign Government Officials" form. The gift(s) must comply
with the requirements for gifts and hospitality set forth in the Requirements Section 4 above.

16:2

SUBMITFORM

Requests to provide Gifts and Hospitality to Government Employees or Foreign Government Officials
must be submitted to the Compliance Department no less than ten business days prior to the date on
which the Gift or Hospitality is proposed to be conveyed.

16.3

REVIEW~AND APPROVE REQUEST FORM

The Compliance Department must review the "Request to Provide Gifts and/or Hospitality to
Government Employees or Foreign Government Officials" form and complete the review and approval
section in writing considering the gift requirements set forth above.
Ifthe gift/hospitality complies with the requirements, then the Compliance Department can approve the
form. If the gift/hospitality does not comply with the requirements, the gift will be denied by the
Compliance Department.
See Appendix B for "Request to Provide Gifts and/or Hospitality to Government Employees or Foreign
Government Officials" form.

16.4

SUBMITEXPENSE FORPAYMENT OR.REIMBURSEMENT

In the case where an employee, director or Commercial Intermediary incurs expenses in connection with
providing Gifts or Hospitality, the employee, director or Commercial Intermediary shall submit an
expense report and attach original, itemized receipts to the Department Head to approve within fifteen
business days following the provision of the Gift or Hospitality.
In the case where a Gift or Hospitality is paid for using Redflex funds, the Gift or Hospitality shall be fully
documented, including itemized receipts, and attached to a Payment Request or Invoice in a timely
manner. The Payment Request or Invoice shall be approved by the Compliance Department.
In both cases above, a copy of the "Request to Provide Gifts and/or Hospitality to Government
Employees or Foreign Government Officials" form shall be attached to the documents and the packet
submitted to Accounting in a timely manner. Neither payment nor reimbursement shall be provided
without this form documenting that the Gift or Hospitality has been approved in accordance with these
procedures.

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[6;5

RECORD EXPENSE IN DETAIL (ACCOUNTING DEPARTMENT)

All Gifts and Hospitality extended by Redflex employees or commercial intermediaries to Interested
Persons shall be accurately reflected in the books, records and accounts of Redflex, and shall in all
circumstances record the following in reasonable detail:

The date, names, titles and company, government or agency of the Interested Persons.

The names and titles of the Redflex employees involved.

A description of the Gift or Hospitality and the precise value of the Gift or Hospitality. If a
precise value cannot be assigned, then a reasonable estimate of its value shall be provided.

The business purpose of the Gift or Hospitality.

16.6~ 'fILHORMS IN COMPLIANCE DEPARTMENT

The Compliance Department shall file the approved "Request to Provide Gifts and/or Hospitality to
Government Employees or Foreign Government Officials" form and supporting documentation.
7

POLICY REQUIREMENTS FOR RECEIVING GIFTS AND/OR HOSPITALITY

General Policy: Any Gifts or Hospitality over $100, or any special discounts from any person or firm
doing, or seeking to do business with Redflex requires approval from the Compliance Department.
No Quid Pro Quo: It is the policy of Redflex to never solicit or coerce the offering of a Gift or Hospitality,
or accept a Gift or Hospitality in return for being influenced or where a reasonable person might believe
that the acceptance ofthe Gift or Hospitality has influenced the Redflex employee in the performance of
his or her duties.
Frequency of Gift/Hospitality Acceptance: The frequency of the receipt of Gifts and Hospitality must be
carefully monitored, as the cumulative effect may give rise to the appearance of improper conduct. In
the event that a Redflex employee or director receives Gifts or Hospitality from the same person or firm
valued at US$100 or less three times in a single twelve-month period, then any additional Gifts and
Hospitality thereafter during the next twelve months shall be treated as valued at more than US$100 for
purposes of these procedures, and shall require the prior written approval of the Compliance
Department.
Commercial Intermediaries: Commercial Intermediaries are strictly prohibited from accepting, directly
or indirectly, any Gifts and Hospitality (even of nominal value), from any person or firm doing, or seeking
to do business with Redflex.
Strictly Prohibited: Receipt of these types of Gifts or Hospitality is simply wrong and may result in severe

disciplinary action, up to and including termination. They are never permissible, and no one can approve
them. All Redflex Employees and Directors are strictly prohibited from soliciting or accepting the
following:

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Any Gift of cash or cash equivalent (such as gifts cards, travelers' checks, bearer instruments,
notes and similar instruments), or loans of any kind.
Any gift or entertainment that is a "quid pro quo" (offered for something in return) or where a
reasonable person might believe that the acceptance of the gift has influenced the employee or
director in the performance of his or her duties.
Any entertainment that is indecent, sexually oriented, or might otherwise adversely affect
Redflex's reputation.
A gift or entertainment an employee or director would be embarrassed to disclose or seek
approval for.

Note Regarding Redflex Employees Assigned to Procurement Functions: Redflex employees performing
procurement-related functions may not accept any Gifts or Hospitality from suppliers, subcontractors or
vendors, except Logo items of nominal value (e.g., keychain, water bottle, glass, pen) EXCEPT with
advance written approval from the Director of Compliance.
8
18.1

PROCESS FLOW FOR RECEIVING GIFTS AND/OR HOSPITALITY


COMPLETE "REQUEST TO RECEIVE GIFTS AND/OR HOSPITAUTY" FORM- APPENDIX C

Employee, Director, or Commercial Intermediary must complete "Request to Receive Gifts and/or
Hospitality" form. The gift(s) must comply with the requirements for gifts and hospitality set forth in the
Requirements Section 7 above.
18.2

REVIEW AND APPROVE REQUEST FORM

If the Gifts or Hospitality is valued at US$100 or less, does NOT follow 3 such Gifts/Hospitality provided
by the same person or firm in the prior 12 months, OR the recipient does NOT have procurement
responsibilities, it may be approved by the Department Head.
If this Gift or Hospitality is greater than US$100, follows 3 such Gifts/Hospitality provided by the same
person or firm in the prior 12 months, OR the recipient DOES have procurement responsibilities, it must
be approved by the Director of Compliance. The Director of Compliance must review the form, ensure
that the gift and/or hospitality is reasonable and appropriate and does not conflict with any policy
requirements.
18.3

FORWARD COPY OF FORM TO THE COMPLIANCE DEPARTMENT FOR FIUNG"PURPOSES

A copy of the "Request to Receive Gifts and/or Hospitality" forms approved by the Department Head
must be forwarded to the Compliance Department for filing purposes.

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AUTHORIZATION AND CHANGE HISTORY

Authorization

This document is authorized by:

Name:

R. DeVincenzi

Title:

CEO

Approval Date:

May 2013

Change History Log

Date

Ver. #

Change Description

Author

5/2/2012

Initial Draft

Kim Tomena

11/5/2012

Finalize Draft

Jessica
Tillipman/Virginia
O'Malley

12/17/2012

p. 10 - Redflex employees assigned to procurement


functions may accept reasonable gifts and
hospitality upon written approval from the General
Counsel's office.

Jessica
Tillipman/Virginia
O'Malley

1/30/2013

Corrected section numbers; added "commercial


intermediaries" to Appendices A, B & C to comport
with the procedures; added "government
affiliation"to Appendix B and "government
affiliation and city/state (as applicable" to
Appendices A & B.

Virginia O'Malley

3/29/2013

Changed General Counsel's office to Compliance


Department for all independent review and
approvals; clarified wording for extending gifts at
Widely Attended Events as well as receipt of gifts
by employees; Clarified Appendix A should be
reviewed and approved by Compliance Department
if over $100 or more than 3 times to same
person/entity; Deleted $100 from title of Appendix
C - "Request to Receive Gifts and/or Hospitality";
Clarified all appendices in conjunction with changes
in procedures

Kim Tomena

Redflex Traffic Systems, Inc.

Confidential

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APPENDIX A

REQUEST TO PROVIDE GIFTS AND/OR HOSPITALITY TO NONGOVERNMENT INTERESTED PERSONS


NOTE: Request must be completed by employee, director, or commercial
intermediary and approved by Department Head (only if US$100 or less OR does
not follow 3 such Gifts/Hospitality provided to the same Non-Government
Interested Person) and submitted to the Compliance Department for
maintenance and filing.
If this Gift or Hospitality is greater than $100 OR follows 3 such Gifts/Hospitality
provided to the same Non-Government Interested Person, then this request
must be approved by the Compliance Director. Do NOT complete this form if the
Interested Person is a Government Employee or Foreign Government Official
(see Appendix B).

Part I - To be completed by Employee or Director, or Commercial Intermediary


1.} What is the name or names ofthe Interested Person(s} to whom the Gift or Hospitality is to be
given?

2.} What is the title(s} of the Interested Person(s} to whom the Gift or Hospitality is to be given?

3.} What is the authority level of the person and what level of influence over the Redflex relationship do
they have?

4.} What Company does the Interested Person(s} to whom the Gift or Hospitality is to be given work
for?

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5.) The name(s) and title(s) of the Redflex employee(s) or Commercial Intermediary providing the Gifts
or attending the Hospitality?

6.) Describe the Gift or Hospitality:

7.) What is the calculated value of the gift or hospitality?

8.) What is the business purpose and justification for the Gift or Hospitality?

9.) When will the gift be given or hospitality take place?

10.) Does the Gift or Hospitality conform to local law or local custom and individual policy? (A citation

to and brief description of the specific law and individual policy governing the provision of gifts to this
particular Interested Person is required).

11.) Does this Gift or Hospitality follow 3 such Gifts/Hospitality provided to this particular Interested
Person in the prior 12 months?

12.) Does Redflex have any current or anticipated busjness with, or decisions coming before, the
Interested Person or the Interested Person's organization or agency? If so, please describe.

13.) Does this Interested Person have the power to assist or hinder Redflex's business? If so, please
describe.

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14.) Is there any additional (relevant) information relating to the proposed Gifts or Hospitality that has
not been addressed in this form?

Employee/Director /Commerciallntermediary Signature


(Attesting that above is true)

Date

Print Name

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Part 1/ - To be completed by Department Head OR Director of Compliance


The provision of Gifts and Hospitality to a Non-Government Interested Person valued at US$100 or less
may be approved by the Department Head if it does not follow 3 such Gifts/Hospitality provided to the
same Non-Government Interested Person.
If this Gift or Hospitality is greater than $100 OR follows 3 such Gifts/Hospitality provided to the same
Non-Government Interested Person, then this request must be approved by the Director of Compliance.
The following requirements must be met:

Business Purpose: Hospitality offered on behalf of Redflex must be directly related to Redflex
business. The costs associated with such Hospitality will be only those necessary and reasonable
to educate the Interested Person about Redflex operations.

Strictly Prohibited: Under no circumstances shall Redflex employees, directors or Commercial


Intermediaries give to Non-Government Interested Persons: (1) Gifts or Hospitality in the form
of legal currency and cash equivalents such as travelers' checks, gift cards, bearer instruments,
notes and similar instruments or equity or debt instruments of any kind issued by Redflex or any
of its affiliates or subsidiaries, or any other business entity; (2) per diem payments, extensions of
credit or the forgiveness of debt; (2) Gifts or Hospitality provided in secret; (3) Gifts or
Hospitality that have the appearance of illegality; or (4) Gifts or Hospitality that violate the local
laws or policies of the Interested Person's employer.

Permitted Under Law & Policy: Under no circumstances maya Redflex employee, director or
Commercial Intermediary offer, promise or give Gifts or Hospitality unless the laws and policies
applicable to that Interested Person expressly permit the acceptance of such Gifts and
Hospitality.

Spouses/Significant Others: Under no circumstances shall the spouses, significant others or


relatives of Interested Persons be given any Gift or invited to, or participate, in any Hospitality
without the prior written approval of the Compliance Department, regardless of the value
thereof.

Personal Funds: No Redflex employees, directors or Commercial Intermediaries shall use


personal funds, whether or not reimbursed by Redflex, to provide Gifts or Hospitality to
Interested Persons in a manner inconsistent with the Anti-Bribery Policy & Procedures. In other
words, Redflex employees, directors and Commercial Intermediaries shall comply with the
provisions of these procedures even if personal funds are used.

Anticipated or Pending Business: If the Interested Person has direct or indirect decision-making
responsibility over an anticipated or pending decision that will affect Redflex's interest, no Gift
or Hospitality may be provided to the Interested Person without the prior, written approval of
the Compliance Department.

Note regarding the value of Gifts and Hospitality: In the case of Hospitality, the value of Hospitality
under these procedures shall be the total actual cost of the event, in U.S. dollars, divided by the number
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of participants or attendees reasonably expected to attend or that will be invited to the event. In the
case of Gifts, the value of the Gift under these procedures shall be the greater of: (i) the actual cost to
Redflex of the Gift; (ii) the fair market value (if any) of the Gift; and (iii) the face value (if any) of the Gift.
All caps and limits set forth in these procedures are in U.S. dollars but also apply to the equivalent
amount converted into a foreign currency
1.) Are the Gift and/or Hospitality requirements outlined above and in Section 4 met?

2.)ls the Gift and/or Hospitality permissible under local laws, customs or policies governing the provision
of Gifts and/or Hospitality to the Interested Person?
NOTE: In the event that the value of the Gift or Hospitality exceeds the limits permitted by local laws
or custom, or violates the Interested Person's organization policy relating to Gifts and Hospitality,
then the Gift or Hospitality shall not be provided to the Interested Person.

3.) Has the Interested Person received Gifts or Hospitality valued at US$100 or less three times in a
single twelve-month period?
NOTE: If so, then any additional Gifts and Hospitality thereafter during the next twelve months shall
be treated as valued at more than US$100 for purposes of these procedures, and shall require prior,
written approval from the Compliance Department.

Request for Gifts or Hospitality provided to Non-Government Interested Persons approved by


Department Head (Attesting that above is true):

Date

Signature

Print Name
Request for Gifts or Hospitality provided to Non-Government Interested Persons approved by Director
of Compliance (if gift is greater than US$100 OR 4th time in a 12 month period):

Date

Signature

Print Name
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APPENDIX B
REQUEST TO PROVIDE GIFTS AND/OR HOSPITALITY TO GOVERNMENT
EMPLOYEES OR FOREIGN GOVERNMENT OFFICIALS
NOTE: To be Completed by Employee, Director, or Commercial
Intermediary and Approved by the Compliance Department
Part I - To be completed by Employee, Director, or Commercial Intermediary

1.) What is the name or names ofthe Government Employee or Foreign Government Official to whom
the Gift or Hospitality is to be given?

2.) What is the title(s) of the Government Employee or Foreign Government Official to whom the Gift or
Hospitality is to be given?

3.) What is the authority level of the Government Employee or Foreign Government Official and what
level of influence do they have over our program?

4.) What is the name ofthe city/state affiliation and Government agency/organization?

5.) The name(s) and title(s) of the Redflex employee(s) providing the Gifts or attending the Hospitality?

6.) Describe the Gift or Hospitality:

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7.) What is its calculated value?

8.) What is the business purpose and justification for the Gift or Hospitality?

9.) When will the gift be given or hospitality take place?

10.) Does the Gift or Hospitality conform to local law or local custom and individual policy? (A citation
to and brief description of the specific law and individual policy governing the provision of gifts to this
particular Interested Person is required).

11.) Does this Gift or Hospitality follow other Gifts/Hospitality provided to this particular Government
Employee or Foreign Government Official in the prior 12 months?

12.) Does Redflex have any current or anticipated business with, or decisions coming before, the
organization or agency of the Government Employee or Foreign Government Official? If so, please
describe.

13.) Does this Government Employee or Foreign Government Official have the power to assist or hinder
Redflex's business? If so, please describe.

14.) Has the Government Employee or Foreign Government Official's supervisor approved the
acceptance of the Gift and/or Hospitality?

15.) If the Hospitality requires travel, are there any stopovers en route (other than those less than a day
for transportation connections)?

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16.} Is there any additional (relevant) information relating to the proposed Gifts or Hospitality that has
not been addressed in this form?

Employee/Director /Commerciallntermediary Signature


(Attesting that above is true)

Date

Print Name

Redflex Traffic Systems, Inc.

Confidential

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Part II - To be completed by the Compliance Department


The provision of Gifts and Hospitality to Government Employees or Foreign Government Officials require
review and approval by the Compliance Department, provided that all of the following are satisfied:

Business Purpose: Hospitality offered on behalf of Redflex must be directly related to Redflex
business. Hospitality must be reasonable and bona fide and must be offered only in connection
with the promotion, demonstration or explanation of company products or services or the
execution or performance of a contract with an Interested Person (or their
agency/organization). The costs associated with such Hospitality will be only those necessary
and reasonable to educate the Interested Person about Redflex operations.

Strictly Prohibited: Under no circumstances shall Redflex employees, directors or Commercial


Intermediaries give to Interested Persons: (1) Gifts or Hospitality in the form of legal currency
and cash equivalents such as travelers' checks, gift cards, bearer instruments, notes and similar
instruments or equity or debt instruments of any kind issued by Redflex or any of its affiliates or
subsidiaries, or any other business entity; (2) per diem payments, extensions of credit or the
forgiveness of debt; (3) Gifts or Hospitality provided in secret; (4) Gifts or Hospitality that have
the appearance of illegality; or (5) Gifts or Hospitality that violate the local laws or policies of the
Interested Person's employer/agency.

Spouses/Significant Others: Under no circumstances shall the spouses, significant others or


relatives of Interested Persons be given any Gift or invited to, or participate, in any Hospitality
without the prior written approval of the Director of Compliance, regardless of the value
thereof.

Personal Funds: No Redflex employees, directors or Commercial Intermediaries shall use


personal funds, whether or not reimbursed by Redflex, to provide Gifts or Hospitality to
Interested Persons in a manner inconsistent with the Anti-Bribery Policy & Procedures. In other
words, Redflex employees, directors and Commercial Intermediaries shall comply with the
provisions of these procedures even if personal funds are used.

Permitted Under Law and Policy: Under no circumstances maya Redflex employee, director or
Commercial Intermediary offer, promise or give Gifts or Hospitality to Government Employees
or Foreign Government Officials unless the laws and regulations applicable to that Government
Employee or Foreign Government Official expressly permit the acceptance of such Gifts and
Hospitality.

Anticipated or Pending Business: If the Interested Person has direct or indirect decision-making
responsibility over an anticipated or pending decision that will affect Redflex's interests, no Gift
or Hospitality may be provided to the Interested Person without the prior, written approval of
the Director of Compliance.

Travel and Lodging: If the Gift or Hospitality involves travel, lodging or entertainment, it must
comply with the travel and lodging requirements outlined in Section 4 of these Procedures.

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Note regarding the value of Gifts and Hospitality: In the case of Hospitality, the value of Hospitality
under these procedures shall be the total actual cost of the event, in U.S. dollars, divided by the number
of participants or attendees reasonably expected to attend or that will be invited to the event. In the
case of Gifts, the value of the Gift under these procedures shall be the greater of: (i) the actual cost to
Redflex of the Gift; (ii) the fair market value (if any) of the Gift; and (iii) the face value (if any) of the Gift.
All caps and limits set forth in these procedures are in U.S. dollars but also apply to the equivalent
amount converted into a foreign currency.
1.) Are the above gift and/or hospitality requirements met?

2.) Is there a conflict with local laws and customs governing Gifts and Hospitality consulted or
the Government Employee or Foreign Government Official's policy on Gifts and Hospitality?
NOTE: In the event that the value of the Gift or Hospitality exceeds the limits permitted by
local laws or custom, violates the laws applicable to the Government Employee or Foreign
Government Official, or violates the Government Employee or Foreign Government Official's
agency or organization policy, then the Gift or Hospitality shall not be extended.

3.) Has the Government Employee or Foreign Government Official received Gifts or Hospitality
more than once in a single twelve-month period?

Request Approved by Compliance Department

Date

Print Name

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APPENDIX C
REQUEST TO RECEIVE GIFTS AND/OR HOSPITALITY
NOTE: Request must be completed by Employee, Director, or Commercial
Intermediary.
If the Gifts or Hospitality is valued at US$100 or less, does NOT follow 3 such
Gifts/Hospitality provided by the same person or firm in the prior 12 months, OR
the recipient does NOT have procurement responsibilities, it may be approved
by the Department Head. The form must be submitted to the Compliance
Department for maintenance and filing.
If this Gift or Hospitality is greater than US$100, follows 3 such Gifts/Hospitality
provided by the same person or firm in the prior 12 months, OR the recipient
DOES have procurement responsibilities, it must be approved by the Director of
Compliance.

Part I - To be completed by Employee, Director, or Commercial Intermediary


1.) What is the name or names ofthe person giving the Gift or Hospitality?

2.) What is the title{s) of the person giving the Gift or Hospitality?

3.) What is the authority level of the person and what level of influence over the Redflex relationship do
they have?

4.) What Company does the Person(s) giving the Gift or Hospitality work for?

5.) The name(s) and title{s) of the Redflex employee(s) receiving the Gifts or attending the Hospitality?

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6.} What is the Gift or Hospitality?

7.} What is the calculated value?

8.} What is the business purpose ofthe Gift or Hospitality?

9.} When will the Gift be received or Hospitality take place?

10.} Does this Gift or Hospitality follow 3 such Gifts/Hospitality provided by this particular person or
firm in the prior 12 months?

11.} Does the Gift or Hospitality conform to Redflex company policy?

Employee/Director /Commerciallntermediary Signature


(Attesting that above is true)

Date

Print Name

Redflex Traffic Systems, Inc.

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Part II - To be completed by Department Head OR Director of Compliance


If the Gifts or Hospitality is valued at US$100 or less, does NOT follow 3 such Gifts/Hospitality provided
by the same person or firm in the prior 12 months, OR the recipient does NOT have procurement
responsibilities, it may be approved by the Department Head and shall not require approval by the
Director of Compliance. Form should be forwarded to the Compliance Department for filing and
maintenance.
If the Gifts or Hospitality is valued at more than US$100, follows 3 such Gifts/Hospitality provided by the
same person or firm in the prior 12 months, OR the recipient DOES have procurement responsibilities, it
must be approved by the Director of Compliance.
The receipt of Gifts and Hospitality may be approved, provided that they do NOT meet any of the
following unacceptable criteria:

No Cash or Cash Equivalents: Under no circumstances shall Redflex employees or directors


receive any Gift of cash or cash equivalent (such as gifts cards, travelers' checks, bearer
instruments, notes and similar instruments), or loans of any kind.

Procurement Function Restriction: Under no circumstances shall Redflex employees performing


procurement functions accept any Gifts or Hospitality from suppliers, subcontractors or
vendors, except Logo items of nominal value (e.g., keychain, water bottle, glass, pen) EXCEPT
with advance written approval from the Director of Compliance.

No Solicitation or Coercion: Under no circumstances shall Redflex employees solicit or coerce


the offering of a gift, or accept a gift in return for being influenced or where a reasonable person
might believe that the acceptance of the gift has influenced the employee in the performance of
his or her duties.

No Quid Pro Quo: Always unacceptable is any gift or entertainment that is a "quid pro quo"
(offered for something in return) or where a reasonable person might believe that the
acceptance of the gift has influenced the employee in the performance of his or her duties.

Indecent Gifts or Hospitality: Always unacceptable is any entertainment that is indecent,


sexually oriented or might otherwise adversely affect Redflex's reputation.

Gifts or Hospitality that Cause Embarrassment: Always unacceptable is any gift or


entertainment an employee would be embarrassed to disclose or seek approval for.

Frequency of Gifts or Hospitality: Employees and directors shall not accept Gifts or Hospitality
from the same person or firm so frequently that it gives rise to the appearance of improper
conduct.

Note regarding the value of Gifts and Hospitality: In the case of Hospitality, the value of Hospitality
under these procedures shall be the estimated total cost of the event, in U.S. dollars, divided by the
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number of participants or attendees reasonably expected to attend or that will be invited to the event.
In the case of Gifts, the value of the Gift under these procedures shall be the greater of: (i) the actual
cost (ii) the fair market value (if any) of the Gift; and (iii) the face value (if any) of the Gift. All caps and
limits set forth in these procedures are in U.S. dollars but also apply to the equivalent amount converted
into a foreign currency.

1.) Is the Gift and/or Hospitality acceptable under the policies listed above?

2.) Is there a conflict with Redflex's policy on Gifts and Hospitality?

3.) Does this Gift or Hospitality follow 3 such Gifts/Hospitality provided by this particular person or firm
in the prior 12 months?

Request to receive Gifts or Hospitality approved by Department Head (Attesting that above is true):

Signature

Date

Print Name

Request to receive Gifts or Hospitality approved by Director of Compliance (if gift is greater than
US$100, 4th time in a 12 month period, or recipient has procurement responsibilities):

Date

Signature

Print Name

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CHARITABLE OR POLITICAL CONTRIBUTIONS PROCEDURES

PURPOSE

The purpose of this document is to define the procedures for making Charitable or Political
contributions.
Political Contributions: No Redflex employee or director may make a Political donation, for or on behalf
of Redflex, to a political party or candidate for political office, without the prior, written approval of the
Compliance Department.
Charitable Contributions: No Redflex employee or director may make a Charitable contribution, for or
on behalf of Redflex, to organizations or associations for the personal, financial, or political benefit of a
Government Employee or Foreign Government Official or his/her family.
Commercial Intermediaries: Commercial Intermediaries are expressly prohibited from offering or
providing Charitable contributions or Political donations, by or on behalf of Redflex. No Redflex
employee or director may approve a Commercial Intermediaries request to make a Charitable or
Politica I contribution.

SCOPE

This procedure relates to political and charitable contributions by or on behalf of Redflex.

12.1

TERMINOLOGY

A "Government Employee" is:


Any U.S. federal, state, or local government employee, including consultants acting on behalf of the
entity.
A "Foreign Government Official" is:
(1) any officer or employee of a foreign government or member of its armed forces or any department,
agency, or instrumentality thereof; (2) any person acting in an official capacity for or on behalf of any
such government or department, agency or instrumentality; (3) any official of a public international
organization (e.g., International Monetary Fund, The World Bank, the Red Cross); (4) any foreign political
party or official thereof or any candidate for foreign political office; or (5) a nominee of any person
described above.
"Commercial Intermediaries" include distributors, consultants, lobbyists, sales agents, joint venture
partners, construction subcontractors and other third party intermediaries that provide services to or on
behalf of Redflex
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12.2

DUTY TO REPORT"

All Redflex employees and directors are required to report any violations or potential violations of this
procedure or the Applicable Anti-Bribery Laws to:

Redflex's confidential, anonymous HOTLINE: 1-866-494-3161 (Access Code 4009); or


Redflex Compliance Department: (ktomena@redflex.com) or (623-207-2313).

PROCESS FLOW FOR MAKING CHARITABLE OR POLITICAL CONTRIBUTIONS

13.1

COMPLETE "REQUEST TO MAKE A CHARITABLE OR POLITICAL CONTRIBUTION FORM

.I

Required Form: Redflex employees and directors must complete and sign the "Request to Make a
Charitable or Political Contribution" form. The form will ask for the following:

The purpose of the contribution;

The business justification for the contribution;

The identity of the recipient of the contribution and the intended beneficiary;

A statement of whether the donation was requested or suggested by a Government Employee,


Foreign Government Official, candidate for political office or political party;

A statement of whether the business unit is engaged in or intends to engage in business with
the recipient or intended beneficiary, either directly or indirectly and whether the recipient has
the authority or ability to award business to Redflex, retain business for Redflex or to otherwise
influence a regulatory approval process (e.g., licenses, taxes, customs duties);

A statement verifying that the timing ofthe contribution will not coincide with any pending or
forthcoming contract or award that the recipient may directly or indirectly influence;

A statement and supporting documentation indicating that the contribution is legal under local
laws;

A statement indicating whether the contribution will be recorded publicly;

A statement indicating whether this particular recipient has received contributions from Redflex
(or a Redflex employee or director) in the past; and

The value of the donation and whether it is financial or in the nature of goods and services.

No Cash Contributions: Under no circumstances shall a Redflex employee or director provide a Political
or Charitable contribution in cash.
No Foreign Political Contributions: Under no circumstances shall a Redflex employee or director make a
political contribution to political parties or candidates in foreign countries even if the contribution is
legal under the laws of the foreign country.

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Required Documentation: All political and charitable contributions must be supported by a legitimate,
detailed and contemporaneous receipt from the recipient that fully and accurately describes the
contribution. If the recipient refuses to provide a receipt containing this information, a contribution
may not be provided.
Fair and Accurate Recordation: All political or charitable contributions must be recorded fairly and
accurately (and with sufficient detail) in the Redflex books and records.

!3.2- . SUBMmREQUEST FORM


Any employee or director seeking to provide a Political or Charitable contribution must complete the
"Request to Make a Charitable or Political Contribution" form and submit it to the Compliance
Department for review and written approval. No Political or Charitable contributions may be provided
without the advanced, written approval of the Compliance Department.
If the contribution complies with the requirements, then donation can be approved. Otherwise the
donation will be rejected.
The Compliance Department has discretion over the scope ofthe information that is ultimately
collected.
See Appendix A for "Request to Make a Charitable or Political Contribution" form.

'.'j
For charitable contributions, the Director of Legislative Affairs in conjunction with the Compliance
Department will review the "Request to Make a Charitable or Political Contribution" form and complete
the review and approval section in writing in advance of the contribution.
If the donation complies with the requirements, then donation may be approved.
donation will be rejected.

Otherwise the

For political contributions, the General Counsel's office in conjunction with the Compliance Department
shall review the "Request to Make a Charitable or Political Contribution" form and complete the review
and approval section in writing in advance of the contribution.
See Appendix A for "Request to Make a Charitable or Political Contribution" form.

.c.j
All contributions can only be made via Corporate check request using Redflex funds. The contribution
shall be fully documented and attached to a Payment Request or Invoice in a timely manner. The
Payment Request or Invoice shall be approved by the Department Head.
Once approved, the payment request and copy of the approved "Request to Make a Charitable or
Political Contribution" form should be forwarded to Accounting in a timely manner. Payment shall not
be provided without this form documenting that the contribution has been approved in accordance with
these procedures.

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NOTE: Contribution expenses CANNOT be submitted for reimbursement on expense reports. The only
way a contribution can be made (if approved) is via corporate check request.

13.5

RECORD EXPENSE IN DETAIL (ACCOUNTING DEPARTMENT)

All charitable or political contributions extended by Redflex employees and directors shall be accurately
reflected in the books, records and accounts of Redflex, and shall in all circumstances record the
following in reasonable detail:

13;6

The names, titles and company of the recipient.

The names and titles ofthe Redflex employees or directors involved.

A description of the contribution and its precise value. If a precise value cannot be assigned,
then a reasonable estimate of its value shall be provided.

The business purpose of the contribution.


FILE FORMS IN COMPLIANCE DEPARTMENT

All "Request to Make a Charitable or Political Contribution" forms will be filed in the Compliance
Department for maintenance and tracking.

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AUTHORIZATION AND CHANGE HISTORY

Authorization

This document is authorized by:

Name:

R. DeVincenzi

Title:

CEO

Approval Date:

May 2013

Change History log

Date

Ver. #

Change Description

Author

4/27/2012

Initial Draft

Kim Tomena

11/5/2012

Various wording updates

Gini O'Malley

3/29/2013

Changed General Counsel's office to Compliance


Department for all independent review and
approvals; Forms to be routed to Compliance;
Contributions can only be paid through Corporate
check request and not expense reimbursement

Kim Tomena

Redflex Traffic Systems, Inc.

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APPENDIX A
REQUEST TO MAKE A CHARITABLE OR POLITICAL CONTRIBUTION
NOTE: To be Completed by Employee or Director and Approved by
Compliance Department
Part I - To be completed by Employee or Director
1.) What is the purpose ofthe donation?

2.) What is the business justification for the donation?

3.) Who is the recipient of the donation and the intended beneficiary?

4.) Was the donation requested or suggested by a Government Employee, Foreign Government Official,
candidate for political office, or political party?

5.) Did you or your Business Unit engage in or intend to engage in business with the recipient or
intended beneficiary, either directly or indirectly?

6.) Does the recipient have the authority or ability to award business to Redflex, retain business for
Redflex, or to otherwise influence a regulatory approval process?

7.) What is the value of the donation?

8.) Is it financial or in the nature of goods and services?

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9.) Are there any pending or forthcoming contracts or awards that the intended beneficiary or recipient
may directly or indirectly influence?

10.) Is the contribution legal under local laws (supporting documentation and citation to the relevant
law is required)?

11.) Will the contribution be recorded publicly?

12.) Has this particular recipient received contributions from Redflex (or a Redflex employee or director)
in the past?

13.) Is the recipient willing and able to provide you with a legitimate, detailed and contemporaneous
receipt that fully and accurately .describes the contribution?

Date

Employee/Director Signature
(Attesting that above is true)

Print Name

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Part II - To be completed by the Compliance Department


The following due diligence shall be conducted, it being recognized that the Compliance Department has
discretion over the scope of the information that is ultimately collected:

No Cash Donation: Under no circumstances shall Redflex approve Political or Charitable


contributions made in cash.

Contemporaneous Receipts Required: All political and charitable contributions must be


supported by a legitimate, detailed and contemporaneous receipt from the recipient that fully
and accurately describes the contribution. If the recipient refuses to provide a receipt
containing this information, a contribution may not be provided.

Beneficiary Screening: Screening to ensure that any recipient or intended beneficiary:

Is a legitimate organization that holds a government charity license, registration, or


other evidence of its charitable status;

Does not support terrorism and is not listed on any international watch lists; and

That there is a proper purpose for the donation.

Frequency of Contribution: A review to verify whether any Redflex employee or director has
provided repeat contributions to a particular recipient. If contributions have been made in the
past, the request to make a contribution must address the pattern of donations to the particular
recipient.

Government Connection: A review to verify that no recipient or intended beneficiary has any

connection to a government contract decision-maker or any other Government Employee or


Foreign Government Official (or their agent or spouse) capable of providing Redflex with any
unfair competitive advantage or influence a regulatory approval; the charity was not suggested
or referred by a government contract decision-maker or other Government Employee or Foreign
Government Official.

legal Opinion Required: When necessary, a legal opinion shall be provided by a local lawyer

confirming that the donation is lawful under the laws and regulations ofthe country, state or
local Government in which the donation is intended to be made and that the recipient or
intended beneficiary is a bona fide organization.

Foreign Contributions Strictly Prohibited: Under no circumstances shall a Redflex employee or


director make a political contribution to political parties or candidates in foreign countries even
if the contribution is legal under the laws of the foreign country.

Books and Records: A detailed and accurate description of the donation shall be recorded in the

Redflex books and records.

legal Confirmation: A legal analysis analyzing the facts and circumstances and confirming the

propriety of a particular contribution.


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Commercial Intermediaries: Commercial Intermediaries are expressly prohibited from offering


or providing Charitable contributions or Political donations, by or on behalf of Redflex. No
Redflex employee or director may approve a Commercial Intermediary's request to make a
Charitable or Political contribution.

Results and Conclusions

Request Approved

by

Date

Signature

Print Name

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FINANCIAL AND ACCOUNTING POLICIES AND PROCEDURES

PURPOSE

Redflex shall establish and maintain a system of internal controls that ensures that all transactions and
dispositions of assets occur only with appropriate authorizations within set authorization limits as
verified by the Finance Department, and that all such transactions are recorded fairly and accurately and
in reasonable detail in Redflex's accounts, books and records. This requirement applies to all original
documents (including invoices, receipts, and expense reports), regardless of the dollar amount involved
in a particular transaction.
The recordkeeping requirements apply to all aspects of Redflex's business activities. The
mischaracterization or omission of any transaction in Redflex's books and records, or the failure to
maintain proper internal controls may result in significant liability for Redflex and the Redflex employees
or directors that have caused the inaccurate books and records. Accordingly, no false or misleading
entries may be made in Redflex's books or records. Employees and directors are prohibited from
engaging in any arrangements that would result in such entries. No undisclosed or unrecorded funds or
assets may be established.
All Redflex directors and employees with financial and accounting duties have an obligation to be alert
to a possible violation of the following financial and accounting requirements and will report suspected
violations to the Compliance Department. Failure to do so may result in severe disciplinary action.

11.1

DUTY TO REPORT

All Redflex employees and directors are required to report any violations or potential violations of this
procedure or the Applicable Anti-Bribery Laws to:

Redflex's confidential, anonymous HOTLINE: 1-866-494-3161 (Access Code 4009); or


Redflex Compliance Department: (ktomena@redflex.com) or (623-207-2313).

PROCESS FLOW FOR FINANCIAL AND ACCOUNTING PROCEDURES

Internal Controls: The Redflex directors and employees with financial and accounting duties shall
maintain a system of internal financial and accounting controls sufficient to provide Redflex reasonable
assurance that (1) all transactions are authorized in accordance with Redflex management's specific
authorization, (2) all transactions are recorded in a manner that allows the proper preparation of
financial statements in conformity with International Financial Reporting Standards ("IFRS") or generally
accepted accounting principles ("GMP"), as applicable and maintains accountability for assets, (3)
access to assets is limited and permitted only with the appropriate authorization, and (4) existing assets
are compared with recorded balances, and appropriate action is taken with respect to any differences.

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Redflex Policy: Redflex directors and employees must also strictly adhere to the following guidelines:

Fair and Accurate Recording: All cash, bank accounts, investments and other assets of Redflex
must always be recorded fairly and accurately in Redflex's official books and records and in
accordance with IFRS or GAAP as applicable.

Verification: Prior to paying or authorizing a payment, responsible employees shall verify that
no part of such payment is to be made for any purpose other than that which is fully and
accurately described in Redflex's books and records.

Opening Bank Accounts: Bank accounts shall be opened or closed only upon the prior written
approval of the Chief Financial Officer. Undisclosed, unreported or anonymous (e.g.,
"numbered") accounts are not permitted.

Account Verification: Payments shall not be made to anonymous bank accounts or other
accounts not in the name of the payee or of an entity known to be controlled by the payee.

Cash prohibited: Payments will not be made in cash. Checks will not be drawn to the order of
"cash," "bearer," or similar designations.

No False or Misleading Entries: False or misleading entries in Redflex books and records are
strictly prohibited, such as: (1) false invoices, over-invoices or other misleading documentation;
(2) false entities, sales, purchases, services, loans or financial arrangements, (3) failing to record
transactions (off-book accounts/slush funds), (4) submitting false or inaccurate expense reports,
(5) creating records that mischaracterize the true nature of a transaction or recipient of
payment, (6) vague or non-specific descriptions for payments made in entries, (7) payment
descriptions that do not correspond to the appropriate account, (8) Gift or Hospitality expense
forms with incomplete information.

Personal Funds: An employee or director's personal funds shall not be used to accomplish what
is otherwise prohibited by this Policy.

Check Requests: Check requests will be in writing and contain a complete explanation of the
purpose and authority for the payment. The explanation will accompany all documents
submitted in the course of the issuing process. The explanation must be kept on file at the
paying location.

Commercial Intermediary Reimbursement: No expenses relating to Government business will


be reimbursed to Commercial Intermediaries assisting Redflex in obtaining or retaining such
business unless such expenses (1) comply with Redflex anti-bribery policies and procedures, (2)
are supported by reasonable written documentation including, but not limited to, itemized
receipts, and (3) have received the prior, written approval ofthe Compliance Department. No
payment to any Commercial Intermediary will be made outside of the country in which the
Commercial Intermediary is incorporated, resides or provides services.

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Duty to Report: Any officer, director or employee who suspects the possibility that a bribe,
kickback or over-invoice is associated with a particular receipt or thatan understanding exists
that all or a portion of a receipt will be paid in contravention of the laws of any jurisdiction, will
immediately report that suspicion to:
o Redflex's confidential, anonymous HOTLINE: 1-866-494-3161 (Access Code 4009); or
o Redflex Compliance Department: (ktomena@redflex.com) or (623-207-2313).
AUTHORIZATION AND CHANGE HISTORY

Authorization
This document is authorized by:

Name:

R. DeVincenzi

Title:

CEO

Approval Date:

May 2013

Change History Log


"

Date

Ver.#

Change Description

Author

4/27/2012

Initial Draft

Kim Tomena

11/5/2012

Various wording updates

Gini O'Malley

3/29/2013

Changed General Counsel's office to Compliance


Department for Duty to Report and all independent
review and approvals

Kim Tomena

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