MARKETING AGREEMENT 1
--------------------------------------------------------------------------------
EXHIBIT 10.13
MARKETING AGREEMENT
This Marketing 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 Channel Marketing Group, Inc., ("CMG"), a Delaware corporation
with its principal place of business located in Houston, Texas, 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 communicate to CTRX's Voice Command Center. 2 CMG 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 marketing activities and the distribution of its
products throughout the United States and Canada.
4 CMG desires to provide CTRX U.S sales and distribution channels for intensive
marketing of CTRX's products through CMG's current and future sales networks to
business customers in the U.S and Canada.
5 CTRX and CMG 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 the U.S and Canada.
--------------------------------------------------------------------------------
STRICTLY CONFIDENTIAL
MARKETING AGREEMENT 2
--------------------------------------------------------------------------------
AGREEMENT
CTRX and CMG (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 MARKETING REPRESENTATIVE
(A) APPOINTMENT. CTRX hereby appoints CMG as a non-exclusive marketing
representative 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 the United States of America and Canada,
("Territory"), with the 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 CMG hereby accepts such appointment as
Marketing Representative.
(B) NO IMPLIED RIGHTS. CMG acknowledges that except as expressly provided
herein, CMG 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) 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.
(B) 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. The Parties will be jointly
responsible for preparing and executing an annual advertising and promotion plan
for the Territory that allocates certain of the Parties' dedicated promotional
spending. CMG will provide and regularly update a schedule (Exhibit "A") of
prospective clients to CTRX. It is agreed by the parties that the scheduled list
of clients will be considered a working list and or list of existing clients and
that CTRX nor any other individual or entity will attempt to market CTRX
products or services directly to the scheduled list of clients out side the
terms of this Agreement.
(C) 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.
(D) TERM. Both Parties agree that, for a period of ten (10) years following the
Effective Date ("Term"), CMG will market and sale CTRX products and service on a
Best Efforts basis and that CTRX shall retain all its rights to grant 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 their terms.
--------------------------------------------------------------------------------
STRICTLY CONFIDENTIAL
MARKETING AGREEMENT 3
--------------------------------------------------------------------------------
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 CMG. CTRX
will be responsible for manufacturing or purchasing directly from manufactures
all Products to be sold by CMG. 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 does not grant, convey or assign any of its rights, titles
and interests in and to assigned 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 CMG shall be maintained at facilities owned, controlled, or
under contract to CTRX.
(D) PRICING. In the first five (5) years of the Term, CTRX shall make available
and deliver its Products to CMG 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$350.00 for CMG, or 25% in excess of the CTRX Cost Basis. As variable
ancillary costs increase the Cost Basis, the Resale Price will be adjusted
accordingly to maintain CMG's Resale Price at 125% of the Cost Basis). In the
second five (5) years of the Term, CTRX shall make available and deliver its
Products to CMG at a Resale Price ("Resale Price") of One Hundred And Twenty
Percent (120%) of the Cost Basis of the respective device or technology. The
underlying Cost Basis shall be reviewed and assessed by an independent auditor
to be identified by both Parties.
(E) SALES FORECAST. Without constituting hereby any guarantee, warranty or any
other form of legally binding forecasts, CMG's management conservatively
estimates to generate total sales for Products in the Territory as follows
(annualized sales based on Market Prices):
Financial Year 1 (e.g. 2003): US$ 1,000,000
Financial Year 2 (e.g. 2004): US$ 5,000,000
Financial Year 3 (e.g. 2005): US$15,000,000
(F) BILLING. CTRX will be responsible for billing and collecting all amounts due
from customers of Products. CTRX shall bear credit risk with respect to amounts
where CTRX failed to collect amounts due from customers of Products. CTRX shall
pay CMG, within twelve (12) business days, all those amounts charged to and paid
by customer without reserve, offset or deduction all those amounts in excess of
that amount due CTRX as set out in "Pricing Terms" (Article 3 paragraph (d)
above.
(G) ORDER PROCESSING. CMG 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;
--------------------------------------------------------------------------------
STRICTLY CONFIDENTIAL
MARKETING AGREEMENT 4
--------------------------------------------------------------------------------
o an itemized list of CTRX products with specific product numbers,
product descriptions, requested features, warranties and
representations and prices charged by CMG. Features may include
Vehicle Locate with Live Track, Starter Disable, Unlock Doors, Geo
Fence, etc. CTRX will provide sample order forms to assist CMG.
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 European 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 CMG 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 ACCEPTED 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
CMG 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 until delivery by CTRX 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 CMG 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 CMG's customer
service. CTRX shall provide the Parties shall mutually agree upon such customer
service to CMG as. Additionally, CTRX shall use commercially reasonable efforts
to satisfy high service level standards with regard to fulfillment and customer
services.
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
--------------------------------------------------------------------------------
STRICTLY CONFIDENTIAL
MARKETING AGREEMENT 5
--------------------------------------------------------------------------------
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. CMG and CTRX 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 property right; or
any other claim where interim relief from the court is sought to prevent
--------------------------------------------------------------------------------
STRICTLY CONFIDENTIAL
MARKETING AGREEMENT 6
--------------------------------------------------------------------------------
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 CMG, 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. CMG 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 CMG that it is duly organized
and in good standing under Nevada 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 not be assigned in whole or in part
without the prior consent of the other party to this Agreement. Any assignment
in whole or in part by CMG 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
MISCELLANEOUS PROVISIONS
(A) NON-CIRCUMVENTION. CTRX, intending to be legally bound, hereby irrevocably
agrees not to circumvent, avoid, bypass, or obviate CMG, directly or indirectly,
to avoid payments or fees, commissions, or any other form of compensations to
CMG 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.
(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
--------------------------------------------------------------------------------
STRICTLY CONFIDENTIAL
MARKETING AGREEMENT 7
--------------------------------------------------------------------------------
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
CHANNEL MARKETING GROUP, INC.
XXXX XXXXXXXXXXX, PRESIDENT
0000 XXXXXXX XXXX
XXXXXXXXX, XXXXX 00000
(000) 000-0000
(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 of 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:
CONCENTRAX, INC. CHANNEL MARKETING GROUP INC.
/s/ Xxxx Xxxxxxx /s/ Xxxx Xxxxxxxxxxx
----------------------------------- ------------------------------------
Xxxx Xxxxxxx, President Xxxx Xxxxxxxxxxx, President
--------------------------------------------------------------------------------
STRICTLY CONFIDENTIAL
