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.
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.
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
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
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
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
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
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
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