NON-EXCLUSIVE DISTRIBUTION AGREEMENTDistribution Agreement |
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EXHIBIT 10.2
NON-EXCLUSIVE DISTRIBUTION AGREEMENT
This Non-exclusive Distribution Agreement ("Agreement"), dated
June 21, 2006 (the "Effective Date"), is entered into by and
between MICROTRAK GPS, INC. ("Manufacturer"), a Nevada corporation
with an address of 9109 LBJ Frwy, Ste 100, Dallas TX 75230, and
TRIDENT MERCHANT GROUP, INC. ("Distributor"), a Nevada corporation
having an address of P.O. Box 21147, Columbus, OH 43221.
BACKGROUND
Manufacturer is, inter alia, in the business of developing,
manufacturing, distributing, and selling Products (as hereinafter
defined), Distributor desires to market and distribute Products to
manufacturers and sellers of motorcycles and motor scooters in the
United States and elsewhere, and Manufacturer proposes to authorize
Distributor to market and distribute Products upon and subject to
the terms and conditions hereof.
AGREEMENT
Now, therefore, for and in consideration of the mutual
agreements herein and other good, valuable, sufficient, and
received consideration, Manufacturer and Distributor hereby agree
as follows:
1. DEFINITIONS
1.1 "Products" and "Product"
shall mean all of and any one of those global positioning and
related products for installation and/or use on motorcycles and
motor scooters listed in Exhibit A attached hereto, including all
derivatives, next generation models and related accessories, as
such products may be added to or abandoned by Manufacturer in
Manufacturer's sole discretion from time to time during the term of
this Agreement.
1.2 "Manufacturer Marks" shall
mean those copyrights, trademarks, tradenames, and servicemarks
listed in Exhibit B attached hereto, as such copyrights,
trademarks, tradenames, and servicemarks may be added to or removed
by Manufacturer in Manufacturer's sole discretion from time to time
during the term of this Agreement.
1.3 "Sale," "Selling," and
"Purchase" of Products shall mean the sale or selling of physical
Products, including all licenses on which Products are based, and
the purchase of physical Products, including all licenses on which
Products are based.
1.4 "Territory" shall mean the
United States of America, and elsewhere.
1.5 “Term” shall
mean the period beginning May ___, 2006 and ending on May ___,
2009.
2. APPOINTMENT
2.1 Appointment of Distributor.
Conditioned upon Distributor's continued satisfaction of the terms
and conditions of this Agreement, Manufacturer hereby appoints
Distributor, and Distributor hereby accepts appointment, as
Manufacturer's non-exclusive distributor for the Products to
customers in
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the Territory. Distributor shall not reproduce or sell Products, and Distributor shall not license or distribute Products, except as expressly set forth in this Agreement. Distributor shall not offer for sale, sell, license, or otherwise distribute Products acquired from any entity other than directly from Manufacturer without the prior written approval of Manufacturer.
2.2 Distribution outside the Territory. Distributor shall limit its sales activities with respect to Products to customers located in the Territory, and shall refrain from marketing, licensing, or selling Products outside of the Territory without the prior written consent of Manufacturer. In the event that any of Distributor’s customers within the Territory have locations outside the Territory, Distributor shall not be prohibited from selling Products to its customers for shipment to, or who otherwise redistribute the Products, outside the Territory.
2.3 Appointment of Subdistributors. Distributor may appoint subdistributors (any one, "Subdistributor") to act on Distributor's behalf only with the prior written consent of Manufacturer. Any compensation due to any Subdistributor shall be solely the Distributor's responsibility. Any agreement with any Subdistributor with respect to Products shall be coterminous with this Agreement. Manufacturer shall not engage in any business activities with any Subdistributor without the prior written consent of Distributor.
2.4 Independent Contractor Status. The relationship of Manufacturer and Distributor established by this Agreement shall be that of independent contractors, and neither shall be an employee, agent, partner, or joint venturer of or with the other. Distributor shall not be considered an agent or legal representative of Manufacturer for any purpose, and neither Distributor nor any director, officer, agent, or employee of Distributor shall be an agent or employee of Manufacturer. Manufacturer shall not be considered an agent or legal representative of Distributor for any purpose, and neither Manufacturer nor any director, officer, agent, or employee of Manufacturer shall be an agent or employee of Distributor. Distributor is not granted and shall not exercise the right or authority to assume or create any obligation or responsibility on behalf of or in the name of Manufacturer, and Manufacturer is not granted and shall not exercise the right or authority to assume or create any obligation or responsibility on behalf of or in the name of Distributor.
2.5 Operations and Expenses. The detailed operations of Distributor under this Agreement shall be subject to the sole control and management of Distributor. Distributor shall be responsible for all of its own expenses and employees. Distributor shall provide, at its own expense, such office space and facilities, and hire and train such personnel, as may be required to carry out its obligations under this Agreement. Distributor shall incur no expense chargeable to Manufacturer without the prior written consent of Manufacturer.
2.6 No Other Rights. Except as expressly provided in this Agreement, no right, title, or interest is granted by Manufacturer to Distributor. No right, title, or interest is granted by Manufacturer to Distributor relating to products other than the Products and other than as to the Territory. Notwithstanding Section 2.1 above, Manufacturer reserves the right to sell and
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distribute Products directly or indirectly through any distributor or distributors (in addition to Distributor) to any customers within or outside the Territory.
2.7 No Conflicts. Distributor represents and warrants that, as of the Effective Date, Distributor is not involved, directly or indirectly, in any activities ("Competing Activities") involving products which compete or have the potential to compete with Products, including without limitation the distribution of competing product lines. If Distributor becomes involved in any Competing Activities, Distributor shall promptly inform Manufacturer of such involvement, and Manufacturer shall have, in addition to all other remedies to which Manufacturer may be entitled, the right to terminate this Agreement without liability at any time thereafter pursuant to Section 13.2.
2.8 Assignment and Assumption. Distributor may not assign this Agreement without the prior written consent of Manufacturer.
3. LICENSE OF MANUFACTURER MARKS
3.1 License. Subject to the terms and conditions of this Agreement, Manufacturer grants to Distributor a non-transferable, revocable license, without right of sublicense, to use the Manufacturer Marks in the Territory solely in connection with the sale, distribution, and advertisement of Products. Distributor shall not use the Manufacturer Marks except as expressly permitted herein. Notwithstanding the foregoing, in the event that Distributor appoints any Subdistributor in accordance with Section 2.3 hereof, Manufacturer shall be deemed to have consented to and approved the sublicense of the Manufacturer Marks hereunder to such Subdistributors.
3.2 Restrictions. All representations of the Manufacturer Marks that Distributor intends to use shall first be submitted to Manufacturer for written approval of design, color, and other details, or shall be exact copies of those provided by Manufacturer. Distributor shall fully comply with all guidelines communicated by Manufacturer concerning the use of the Manufacturer Marks. Distributor shall not alter or remove the Manufacturer Marks affixed to Products by Manufacturer, nor affix the Manufacturer Marks to any Product. Except as set forth in this Article 3, nothing contained in this Agreement shall grant or shall be deemed to grant to Distributor any right, title, or interest in or to the Manufacturer Marks. All uses of the Manufacturer Marks shall inure solely to the benefit of Manufacturer, and Distributor shall obtain no rights with respect to any of the Manufacturer Marks, and Distributor hereby irrevocably assigns to Manufacturer all right, title, and interest held by Distributor, if any, in or to any of the Manufacturer Marks. At no time during or after the Term shall Distributor challenge or assist others in challenging the Manufacturer Marks or the registration thereof or attempt to register any trademarks, service marks, marks, or trade names confusingly similar to the Manufacturer Marks. Upon any termination of this Agreement, or the election of Manufacturer pursuant to Section 4.2 below, Distributor shall immediately cease to use any and all of the Manufacturer Marks, and any listing by Distributor of any Manufacturer Marks in any telephone book, directory, public record, or elsewhere shall be immediately removed therefrom by Distributor, but in any event not later than the subsequent issue of such publication.
3.3 Infringement. Distributor shall notify Manufacturer of any actual or suspected infringements, imitations, or unauthorized use of the Manufacturer’s Marks, Products or licenses by third parties of which
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Distributor becomes aware. Manufacturer may, at its expense, take actions, including without limitation the commencement of infringement litigation on account of any such infringements, imitations, or unauthorized use in order to protect the Manufacturer Marks, Products, and the licenses to the extent permitted under law. Distributor shall fully and timely cooperate with and assist Manufacturer, as Manufacturer may reasonably request, incident to any such action brought by Manufacturer. Manufacturer shall receive and retain any and all damages, settlement, and/or compensation paid incident to any such action brought by Manufacturer.
3.4 Registered User Agreements. Manufacturer and Distributor shall enter into registered user agreements with respect to the Manufacturer Marks pursuant to applicable trademark law requirements in the Territory, if any. Manufacturer, at Manufacturer's sole discretion, shall be responsible for proper filing of registered user agreements and all such other required registrations relating to the legal protection of the Manufacturer Marks with governmental authorities in the Territory and shall pay all costs or fees associated with such filing(s).
4. OBLIGATIONS OF DISTRIBUTOR
4.1 Diligence. Distributor shall use its best efforts to promote the marketing and distribution of Products.
4.2 Costs and Expenses. Except as expressly set forth herein, Distributor shall be solely responsible for all costs and expenses related to Distributor’s advertising, marketing, promotion, and distribution of Products and for performing its obligations hereunder.
4.3 Promotional Materials. Distributor shall maintain an adequate inventory of Manufacturer's current sales materials and samples (all together, "Sales Materials") and shall use such Sales Materials in an efficient and effective manner to promote the sale of Products in the Territory.
4.4 Reports.
4.4.1 Annual Sales Reports. Distributor shall provide annual sales reports to Manufacturer no later than 2 months after the close of the respective party’s applicable fiscal year, and such reports be treated as Confidential Information pursuant to the terms of Article 11 below.
4.4.2 General Market Information. Manufacturer shall provide to Distributor information regarding general market conditions and competitors on a regular basis, but no less than once per calendar quarter.
4.4.3 Sales Activities. Within 30 days after the end of each calendar quarter during the Term, Distributor shall send to Manufacturer a sales activities report including the names of customers, quantities of Products purchased, dollar amounts invoiced to and received from such customers, and customer backlog and inventory status of Products, and further shall maintain records of the same.
4.5 Relations with Customers. Distributor shall process and ship each customer order in a timely fashion. Distributor shall provide to customers any and all instructions, precautions, and other warnings pertaining to Products provided by Manufacturer to Distributor. Manufacturer shall
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provide to Distributor any such instructions, precautions, and other warnings pertaining to Products, as Manufacturer in its sole discretion deems necessary or desirable.
4.6 Product Representations. Distributor shall not make any representations with respect to Products other than those expressly authorized in writing in Manufacturer's written data sheets.
4.8 Mutual Indemnification. Distributor and Manufacturer each agree to indemnify and hold the other and the other’s officers, directors, employees, successors, and assigns, harmless from and against any and all losses, damages, or expenses of whatever form or nature, including attorneys' fees and other costs of legal defense, whether direct or indirect, that either of them may sustain or incur as a result of any acts or omissions of the other or any of their directors, officers, employees, or agents, including without limitation (a) breach of any of the provisions of this Agreement, (b) negligence or other tortious conduct, (c) representations or statements not specifically authorized by Manufacturer herein or otherwise in writing, or (d) violation by Distributor (or any of its directors, officers, employees, or agents, or by any Subdistributor) of any applicable law, regulation, or order in or of the Territory or otherwise.
5. PRODUCTS
5.1 Product Prices. The prices ("Wholesale Prices") to be paid by Distributor to Manufacturer for Products shall be Manufacturer's wholesale list prices for Products, less the discount(s) set forth in Exhibit D attached hereto. "List Prices" as used herein shall mean the prices set forth in Manufacturer's then-current customer price schedules or bulletins. All prices are stated and shall be payable in U.S. dollars. The difference between Wholesale Prices and List Prices shall be Distributor's sole remuneration from Manufacturer for the distribution and sale of Products hereunder.
5.2 Price Changes. List Prices are subject to change by Manufacturer in its sole discretion upon advance written notice to Distributor of at least 60 days. List Price changes shall be effective immediately after such 60 days notice and shall be applicable to all purchase orders whether or not accepted prior to the effective date of the List Price change.
5.3 Product Changes. Manufacturer shall have the right from time to time in its sole discretion, without incurring any liability to Distributor with respect to any previously placed Purchase Order (as hereinafter defined), to (a) discontinue or to limit its production of any Product, (b) allocate, terminate, or limit deliveries of any Product in time of shortage, (c) alter the design or construction of any Product, (d) add new and additional products to Products, and (e) after reasonable notice to Distributor, to change its sales and distribution policies, not inconsistent with the terms of this Agreement.
5.4 Discontinued Product. In the event Manufacturer discontinues sale of any Product, Manufacturer shall give Distributor prompt notice thereof. Within 60 days following the date of such discontinuation notice, Distributor may elect to return for credit against future purchases by Distributor of Products any of the discontinued Products (including samples) purchased by Distributor during the 3 months prior to the date of
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such discontinuance notice which have not been used or sold and which are in Distributor's inventory as of the date of such discontinuance notice.
6. PURCHASER ORDERS
6.1 Purchase Orders. All orders for Products submitted by Distributor shall be initiated by written purchase order (any one "Purchase Order") in form acceptable to Manufacturer; provided, however, that an order may initially be placed orally or by fax if a confirming Purchase Order is received by Manufacturer within 5 days after reciept by Manufacturer of such oral or fax order. All Purchase Orders are deemed accepted by Manufacturer unless Manufacturer rejects a Purchase Order in writing within 5 business days after the date of Manufacturer’s receipt of a Purchase Order. No partial acceptance of a Purchase Order by Manufacturer shall constitute an acceptance of the entire Purchase Order.
6.2 Agreement Governs. Purchase Orders shall be governed by the terms of this Agreement. Nothing contained in any Purchase Order shall in any way modify the terms and conditions contained herein or add any additional
