EXCLUSIVE DISTRIBUTION AND MASTER FRANCHISE AGREEMENT 1
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EXHIBIT 10.10
EXCLUSIVE DISTRIBUTION
AND
MASTER FRANCHISE AGREEMENT
This Exclusive Distribution and Master Franchise Agreement ("Agreement") is made
by and among Concentrax, Inc., ("CTRX") a U.S. corporation with its principal
place of business located in Texas, USA, and Xxxxxxx Americas, SA ("MA"), a
corporation with its principal place of business located in Bogota, Columbia
this 2nd day of January, 2003 ("Effective Date").
RECITALS
1 CTRX is in the business of, inter alia, developing vehicle-monitoring services
and technologies. CTRX's signature product, Track-Down, provides accurate,
reliable, real-time data on asset use and location. Track-Down utilizes the
advanced Global Positioning System to track vehicles and to communicate data to
an automated central facility. Customers can then access the information 24
hours a day from their desktop using a secure Internet connection or from their
cell phones to a device contained in CTRX's Voice Command centre.
2 MA is in the business of, inter alia, developing existing and establishing
additional new sales and distribution networks, especially focusing on business
customers in the following market segments: rental vehicles & equipment, service
& sales fleet, commercial fleet, public private transit fleet and auto &
equipment dealer.
3 CTRX desires to expand its business activities and the distribution of its
products to the Latin American markets, including but not limited to the South
America, Central America, Mexico, Dominican Republic and Puerto Rico.
4 MA desires to provide CTRX Latin American sales and distribution channels for
intensive marketing of CTRX's products through MA's current and future sales
networks to business customers in Latin America.
5 CTRX and MA desire to enter into this Agreement in order to set forth their
respective rights and obligations with respect to the distribution and marketing
of CTRX's products in Latin America.
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EXCLUSIVE DISTRIBUTION AND MASTER FRANCHISE AGREEMENT 2
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AGREEMENT
CTRX and MA (each a "Party" and collectively, the "Parties"), in consideration
of the mutual promises contained herein, and intending to be legally bound,
agree as follows.
ARTICLE 1
APPOINTMENT AS DISTRIBUTOR AND MASTER FRANCHISEE
(A) APPOINTMENT. CTRX hereby appoints MA as CTRX's sole and exclusive
distributor and Master Franchisee of its Products, including but not limited to
Track-Down, Voice Command Center, Patriot Track and any other current or
potential or future CTRX application or device ("Products"), in Latin America,
("Territory") See: Exhibit "A" Territory, with the sole and exclusive right to
promote, distribute, market and sell Products in the Territory during the Term
of this Agreement. Such appointment shall be effective on the Effective Date,
and MA hereby accepts such appointment as distributor.
(B) NO IMPLIED RIGHTS. MA acknowledges that except as expressly provided herein,
MA shall not have or acquire by virtue of this Agreement any right, title,
interest or license in, to or under any intellectual property rights, and in no
event shall this Agreement be deemed to be a license or sublicense of any rights
with respect to any patents or technical production information or any other
intellectual property rights.
(C) RELATIONSHIP OF THE PARTIES. Nothing in this Agreement shall be deemed to
create a partnership, joint venture or relationship of principal and agent
between the Parties hereto. Nothing in this Agreement shall be deemed to
authorize either Party hereto to make any representations or warranties on
behalf of or otherwise to act for, represent or bind the other Party hereto or
any of its respective affiliates in any manner whatsoever.
ARTICLE 2
FEES AND TERM
(A) FEES. In connection with the appointment of MA as CTRX's Exclusive
Distributor and Master Franchisee for the territories covered hereunder, MA
agrees to a first year (365 days) sales "Quota" of Two Million Dollars
($2,000,000) CTRX products and services.
(B) QUOTA SCHEDULE. MA will place C.O.D Purchase Orders with CTRX for not less
than Five Hundred Thousand Dollars ($500,000) within the first one hundred
and eighty days (180) from the effective date of this Agreement with the
balance of not less than One Million Five Hundred Thousand Dollars of
additional C.O.D Purchase Orders to be place within the first 365 days of
the Term of this Agreement. Should MA not meet the full Quota of $2,000,000
of C.O.D Purchase Orders for CTRX products and services for delivery in the
Territories covered herein within the Quota term, then MA shall pay CTRX a
one time nonrefundable franchise fee of ("Fee") of Two Hundred and Fifty
Thousand U.S. Dollars (US$250,000.00) within 30 days from the expiration of
the Quota term. Fulfillment of the Quota or the payment of the Fee
represents the full, final and complete consideration payable by MA to CTRX
in consideration for the Exclusive Distribution and Master Franchise rights
granted hereunder, the Fee shall be payable by MA to CTRX by wire transfer
to an account of CTRX designation.
(C) COSTS. Except as set forth in this Agreement, each Party shall bear all of
its respective costs in connection with its performance of the Agreement.
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EXCLUSIVE DISTRIBUTION AND MASTER FRANCHISE AGREEMENT 3
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(D) JOINT MARKETING EFFORTS. The Parties will collaborate to identify the most
efficient venues for their dedicated promotional spending and enhance the impact
of their promotions in appropriate media. MA will be solely responsible for
preparing and executing any advertising and promotion plan for the Territories
covered herein. The Parties will from time to time cooperate to develop, fund
and execute joint marketing programs in the Territory on a mutually agreeable
basis.
(E) TAXES. The Parties shall each pay any sales, use or similar tax related to
the Parties' performance of their obligations or exercise of their rights under
this Agreement for which they are responsible.
(F) TERM. Both Parties agree that, for a period of twenty (20) years following
the Effective Date ("Term"), CTRX shall not grant to any other company or
individual or organization or entity any license, right, option or similar
permission with respect to the distribution or marketing of CTRX's products in
the Territory. The provisions in this Agreement that, by their nature, are
intended to survive the termination or the expiration of this Agreement will
survive in accordance with there terms.
ARTICLE 3
PRICING AND SUPPLY
(A) EXCLUSIVE SOURCE OF PRODUCTS. Subject to the exceptions in this Agreement,
CTRX shall be the exclusive source of CTRX's Products for sale through MA. CTRX
will be responsible for manufacturing or purchasing directly from manufactures
all Products to be sold by MA. CTRX will use commercially reasonable efforts to
(i) maintain the level of products currently available, and (ii) ensure that the
availability of Products covers any demand in the Territory.
(B) BRAND NAMES. CTRX hereby grants, conveys and assigns (and agrees to cause
its appropriate subsidiaries to grant, convey and assign) for the Territory to
MA, by execution hereof (or, where appropriate or required, by execution of
separate instruments of assignment), exclusive right to the use of all (and
their) rights, titles and interests in and to trademarks, together with the
goodwill of the business symbolized by assigned trademarks.
(C) INVENTORY AND WAREHOUSING. CTRX will arrange for all sales in the Territory
a sufficient inventory. CTRX's inventories and warehouses of Products to be
provided for sale by MA shall be maintained at facilities owned, controlled, or
under contract to CTRX.
(D) PRICING. In the first ten (10) years of the Term, CTRX shall make available
and deliver its Products to MA at a Resale Price ("Resale Price") of One Hundred
And Twenty Five Percent (125%) of the Cost Basis ("Cost Basis") of the
respective device or technology (e.g. currently the Cost Basis for a Track Down
unit is US$280.00 and therefore the initial Resale Price for a Track Down unit
shall be US$350.00 for MA). In the second ten (10) years of the Term, CTRX shall
make available and deliver its Products to MA at a Resale Price ("Resale Price")
of One Hundred And Twenty Percent (120%) of the Cost Basis of the respective
device or technology. The underlying Cost Basis shall be reviewed and assessed
by an independent auditor to be identified by both Parties.
(E) SALES FORECAST. Without constituting hereby any guarantee, warranty or any
other form of legally binding forecasts, MA's management conservatively
estimates to generate total sales for Products in the Territory as follows
(annualized sales based on Market Prices):
Financial Year 1 (e.g. 2003): US$2,000,000
Financial Year 2 (e.g. 2004): US$5,000,000
Financial Year 3 (e.g. 2005): US$15,000,000
(F) BILLING. MA will be responsible for billing and collecting all amounts due
from customers of Products. MA shall bear credit risk with respect to amounts
where MA failed to collect amounts due from customers of Products and CTRX will
expect to be paid upon delivery. Further details shall be agreed between the
Parties in a separate Pricing and Billing Agreement ("PBA") to be drafted and
delivered to MA by CTRX. This PBA shall, inter alia, provide for proposed
Payment Terms ("Payment Terms"), i.e.: C.O.D., LC, etc.
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EXCLUSIVE DISTRIBUTION AND MASTER FRANCHISE AGREEMENT 4
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(G) ORDER PROCESSING. MA shall transmit business customers' orders to CTRX for
further processing. Each Order shall include: o the customer's name (corporation
or business entity):
o the contact person with his or her title;
o the recipient's name if different from the customer's name;
o an itemized list of CTRX products with specific product numbers,
product descriptions, requested features, warranties and
representations and prices charged by MA. Features may include Vehicle
Locate with Live Track, Starter Disable, Unlock Doors, Geo Fence, etc.
CTRX will provide sample order forms to assist MA.
o the customer's or recipient's special requests regarding shipping,
delivery and/or installation;
o the complete physical shipping address for deliveries, which address
shall be a street address and not be a post office box or similar
address;
o the customer's telephone number and facsimile number;
o the customer's email address;
(H) ACCEPTANCE OR REJECTION OF ORDERS. CTRX shall accept orders for shipment to
addresses in the Latin American Union and Switzerland that include the
information required by Section (g) above and for which the related Product is
available; provided that such orders to be shipped by courier are shipped on the
customer's shipping account. CTRX reserves the right to reject all other orders.
(I) ORDER CONFIRMATION. Within 4 hours of CTRX's receipt of an order, CTRX shall
confirm to MA CTRX's receipt of such orders which confirmation shall state
whether the order was accepted, rejected due to incomplete information, or
rejected due to unavailable Products.
ARTICLE 4
FULFILLMENT OF ACMAPTED ORDERS AND RETURNS
(A) ASSEMBLY AND PACKAGING. CTRX shall assemble and package for shipping all
accepted orders in accordance with procedures to be agreed between both Parties
in a separate Order Fulfillment Agreement ("OFA") to be drafted and delivered to
MA by CTRX. Orders will be packaged under the "Concentrax" name and, whenever
practicable, CTRX will package and ship different orders by same customers in a
single order together.
(B) RISK OF LOSS. As between the Parties, title and risk of loss shall remain
with CTRX upon CTRX's delivery of the Product to the common carrier at the point
of shipment.
(C) ORDER PRIORITY. All accepted orders, without limitation, shall be processed
in accordance with the priority structure as set forth in the OFA.
(D) CUSTOMER SERVICE. CTRX shall provide to MA order and shipping confirmations,
order shipping tracking information as made available to CTRX by the common
carrier, and such other order information that is commercially reasonably
available to CTRX and reasonably necessary for MA's customer service. CTRX shall
provide such customer service to MA as shall be mutually agreed upon by the
Parties. Additionally, CTRX shall use commercially reasonable efforts to satisfy
high service level standards with regard to fulfillment and customer services.
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EXCLUSIVE DISTRIBUTION AND MASTER FRANCHISE AGREEMENT 5
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ARTICLE 5
CONFIDENTIALITY
The Parties acknowledge and agree that confidential and valuable information
proprietary to either one Party and obtained during its business relationship
with either one Party, shall not be, directly or indirectly, disclosed without
the prior express written consent of the other Party, unless and until such
information is otherwise known to the public generally or is not otherwise
secret and confidential. All such confidential information provided to either
one Party by the other shall be clearly and conspicuously marked with the word
"Confidential."
ARTICLE 6
NO TERMINATION
Each Party acknowledges and agrees that its remedy for breach by the other Party
of any provision hereof shall be, subject to the requirements of Article 6, to
bring a claim to recover damages subject to the limits set forth in this
Agreement and to seek any other appropriate equitable relief, other than
termination of this Agreement. For the avoidance of doubt, the Parties intend
that this Agreement continue in perpetuity.
ARTICLE 7
DISPUTE RESOLUTION
Resolution of any and all Disputes ("Dispute" or "Disputes") arising from or in
connection with this Agreement shall be exclusively governed by and settled in
accordance with the provisions of this Article.
(A) NEGOTIATIONS. The Parties shall make a good faith attempt to resolve any
Dispute arising out of or relating to this Agreement through informal
negotiation between appropriate representatives from each of the Parties. If at
any time either Party feels that such negotiations are not leading to a
resolution of the Dispute, such Party may send a notice to the other Party
describing the Dispute and requesting a meeting of the senior executives from
each Party. Within ten (10) business days after such notice of a Dispute is
given, each Party shall select appropriate senior executives (e.g., director or
V.P. level) of each Party who shall have the authority to resolve the matter and
shall meet to attempt in good faith to negotiate a resolution of the Dispute
prior to pursuing other available remedies. During the course of negotiations
under this section, all reasonable requests made by one Party to the other for
information, including requests for copies of relevant documents, will be
honored. The specific format for such negotiations will be left to the
discretion of the designated negotiating senior executives but may include the
preparation of agreed upon statements of fact or written statements of position
furnished to the other Party. In the event that any Dispute arising out of or
related to this Agreement is not settled by the Parties within thirty (30) days
after the first meeting of the negotiating senior executives, either Party may
commence litigation with respect to the Dispute. However, except as provided
below, neither Party shall commence litigation against the other to resolve the
Dispute (i) until the Parties try in good faith to settle the Dispute by
negotiation for at least thirty (30) days after the first meeting of the
negotiating senior executives or (ii) until forty (40) days after notice of a
Dispute is given by either Party to the other Party, whichever occurs first.
(B) ARBITRATION. CTRX and MA hereby agree to bring any matter not resolved in
good faith negotiations before an arbitrator in the State of Texas. The parties
shall select an arbitrator from a list provided by the American Arbitration
Association.
(C) PROCEEDINGS. Any Dispute regarding the following is not required to be
negotiated or resolved in arbitration prior to seeking relief from a court of
competent jurisdiction: breach of any obligation of confidentiality;
infringement, misappropriation, or misuse of any intellectual
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EXCLUSIVE DISTRIBUTION AND MASTER FRANCHISE AGREEMENT 6
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property right; or any other claim where interim relief from the court is sought
to prevent serious and irreparable injury to a Party. However, the Parties shall
make a good faith effort to negotiate or arbitrate such Dispute, according to
this Article, while such court action is pending.
(D) CONTINUITY OF SERVICES AND PERFORMANCE. Unless otherwise agreed in writing,
the Parties will continue to provide service and honor all other commitments
under this Agreement and each ancillary agreement during the course of dispute
resolution pursuant to the provisions of this Article with respect to all
matters not subject to such dispute, controversy or claim.
ARTICLE 8
INDEMNIFICATION
CTRX agrees to save harmless, indemnify and defend MA, its agents and employees
from and against any cost, loss, damage, liability, judgment and expense
whatsoever, including attorney's fees, suffered or incurred by it by reason of,
or on account of, any misrepresentation made to it or its status or activities
as distributor under this Agreement. MA agrees to save harmless, indemnify and
defend CTRX, its agents and employees from and against any cost, loss, damage,
liability, judgment and expense whatsoever, including attorney's fees, suffered
or incurred by it by reason of, or on account of, any misrepresentation made to
it or its status or activities as distributor under this Agreement.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants that as of the Effective Date it has the full
legal right, power and authority to enter into and perform this Agreement.
Furthermore, CTRX hereby represents and warrants to MA that it is duly organized
and in good standing under State Law and under U.S. Federal Law, is current in
its filings and disclosures with the appropriate regulatory bodies and has all
requisite power and authority to carry on business as now conducted and as
contemplated herein.
ARTICLE 10
ASSIGNMENT
The parties' interest in this Agreement may be assigned in whole or in part
without the prior consent of the other party to this Agreement. MA will have the
right to assigned and convey exclusive distribution rights to sub-distributors
covered under the territory. Any assignment in whole or in part by MA or
delegation of its rights or obligations under this Agreement will be subject to
and bound by all provisions, terms and conditions of this Agreement and made in
conformity with this Agreement.
ARTICLE 11
MISMALLANEOUS PROVISIONS
(A) NON-CIRCUMVENTION. CTRX, intending to be legally bound, hereby irrevocably
agrees not to circumvent, avoid, bypass, or obviate MA, directly or indirectly,
to avoid payments or fees, commissions, or any other form of compensations to MA
in any transaction with any corporation, partnership, or individual, revealed by
either party to the other, in connection with any projects, or currency
exchanges, or any loans or collateral's, or any findings, or any financing's, or
any other transactions involving products, commodities, services, additions,
renewals, extensions, rollovers, amendments, new contracts, re-negotiations,
parallel contracts or agreements or third party assignments hereof.
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EXCLUSIVE DISTRIBUTION AND MASTER FRANCHISE AGREEMENT 7
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(B) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the Parties with respect to the subject matter hereof and shall supersede all
prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof. This Agreement shall
prevail in the event of any conflicting terms or legends that may appear.
(C) CONFLICTING AGREEMENTS. In the event of a conflict between this Agreement
and any future agreements executed in connection herewith, the provisions of
this Agreement shall generally prevail.
(D) NOTICES. Any notice, demand, offer, request or other communication of any
kind whatsoever to be given under this Agreement shall be in writing and shall
be delivered by hand, e-mail or by fax to the Parties at:
CONCENTRAX, INC.
0000 XXXXXXX XXXXX XXXXX 000
XXXXXXX, XX 00000
PHONE: (000) 000-0000
TOLL FREE: (000) 000-0000
XXXXXXX AMERICAS, SA
TO BE INCLUDED
BOGOTA, COLUMBIA
(E) GOVERNING LAW. This Agreement shall be governed by the federal laws of the
U.S. applicable therein, and the Parties hereby attorn to the jurisdiction of
the U.S. federal courts.
(F) EXECUTION. This Agreement may be signed by fax and in counterpart.
IN WITNESS WHEREOF the Parties have hereunto set their hands and seals effective
as of the Effective Date first above written.
SIGNED, SEALED AND DELIVERED BY: SIGNED, SEALED AND DELIVERED BY:
CONMANTRAX, INC., per: XXXXXXX AMERICAS, SA per:
/s/ Xxxx Xxxxxxx /s/ Xxxx Xxxxxx xx Xxxxx
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Xxxx Xxxxxxx, President Xxxx Xxxxxx xx Xxxxx, President
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EXCLUSIVE DISTRIBUTION AND MASTER FRANCHISE AGREEMENT 8
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EXHIBIT "A" TERRITORY
MADE A PART OF THAT CERTAIN EXCLUSIVE DISTRIBUTION AND MASTER FRANCHISE
AGREEMENT BETWEEN CONCENTRAX, INC., AND XXXXXXX AMERICAS, SA.,
DATED _____ JANUARY, 2003
1) Argentina
2) Belize
3) Bolivia
4) Brazil
5) Chile
6) Colombia
7) Costa Rica
8) Dominican Republic
9) Guatemala
10) Honduras
11) Mexico
12) Xxxxxxxxx
00) Xxxxxx
00) Xxxxxxxx
00) Xxxxxx Xxxx
00) Xxxxxxx
17) Venezuela
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