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Exhibit 10.4
MARKETING AND DISTRIBUTION AGREEMENT
This
Marketing and Distribution Agreement (the "Agreement") is entered
into
as of the 18th day of May, 2006, by and between MedTrak
Technologies, Inc., an
Arizona corporation ("MedTrak"), and AcuNetx, Inc., a Nevada
corporation
("AcuNetx").
RECITALS:
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A.
MedTrak markets and sells video electronystagmography ("VNG")
products
listed on the attached Exhibit A (the "MedTrak VNG Products").
B.
AcuNetx manufactures various medical devices, including the MedTrak
VNG
Products.
C.
AcuNetx intends to create and manufacture an alternate line of
VNG
products that will be marketed and branded by AcuNetx (the "AcuNetx
VNG
Products"). MedTrak VNG Products and AcuNetx VNG Products will
collectively be
referred to as the "Products."
D.
AcuNetx desires that MedTrak be the exclusive company to market and
sell
the MedTrak VNG Products, and MedTrak desires that AcuNetx be the
sole and
exclusive manufacturer of the MedTrak VNG Products.
AGREEMENT:
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1.
Exclusive Dealings for MedTrak VNG Products.
1.1 AcuNetx grants to MedTrak the exclusive right to market and
sell
the MedTrak VNG Products. MedTrak grants to AcuNetx the exclusive
right to
manufacture the MedTrak VNG Products.
1.2
MedTrak may market and distribute the MedTrak VNG Products
itself
or through distributors or sub-distributors (collectively referred
to as
"Distributors"), provided that AcuNetx approves the Distributor's
contract(s)
with MedTrak, such approval(s) not to be unreasonably withheld.
AcuNetx hereby
consents to the current Distributor contracts listed on Exhibit
B.
1.3 MedTrak and its Distributors may market and sell the MedTrak
VNG
Products under a "private label" as they are currently labeled in
Exhibit A,
including the MedTrak brand and sub-brands MobiTrak, ScottTrak and
OtoTrak. No
additional or new naming or branding of MedTrak VNG products
manufactured by
AcuNetx may occur.
2.
MedTrak VNG Product Improvements.
2.1 As AcuNetx creates and develops the AcuNetx VNG Products, it
will
make any improvements that are part of the AcuNetx VNG Products
available to
MedTrak and its Distributors to be incorporated in the MedTrak VNG
Products
under the MedTrak "private label" provisions of Section 1.3. The
price and
commission structure for the improved MedTrak VNG Products will be
separately
negotiated as these product improvements become available. The
parties agree
that the price and commission structure will be comparable with
AcuNetx products
distributed by other AcuNetx distributors.
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2.2 MedTrak agrees to adhere to the AcuNetx marketing and
branding
standards in compliance with applicable FDA labeling regulation
and
requirements.
3.
Exclusive Manufacturer. During the term of this Agreement,
MedTrak
agrees not to distribute or sell any VNG products other than those
manufactured
by AcuNetx.
4.
Purchase Orders. Each sale of any MedTrak VNG Product will be
initiated
by MedTrak's delivery to AcuNetx of a written purchase order
specifying in
reasonable detail the type, quantity, delivery date, and shipping
destination
information for the MedTrak VNG Product ordered (the "Purchase
Order"). No
Purchase Order will be binding on AcuNetx until accepted in writing
by AcuNetx.
If any Purchase Order is not rejected in writing and delivered to
MedTrak by
AcuNetx within three business days of AcuNetx's receipt of the
Purchase Order,
then Purchase Order will be deemed accepted as submitted.
5.
Delivery.
5.1 Type of Delivery. All Products delivered will be FOB
AcuNetx's
plant or other place of shipment. AcuNetx will use its best efforts
to deliver
Products by the applicable delivery date to the destination
specified in each
Purchase Order. All customs duties, costs, taxes, insurance
premiums, and other
expensive expenses relating to such transportation and delivery
will be at the
recipient's expense.
5.2 Packaging. AcuNetx will package the product in its standard
shipping packages.
5.3 Set Up and Compliance. MedTrak will be responsible for
assisting
end- users with setting out and ensuring Product compliance with
Product
specifications at the time of setup.
6.
Price, Commission. and Payment.
6.1 Commission-based Payment to MedTrak. If AcuNetx ships MedTrak
VNG
Products directly to the end user, AcuNetx will book and collect
the end-user
sales price. AcuNetx will then pay MedTrak a commission (the
"Commission"),
which shall be the difference between the wholesale price to
MedTrak for the
MedTrak VNG Products, as provided in writing to MedTrak (the
"MedTrak Wholesale
Price"), and the end-user sales price. AcuNetx shall pay the
Commission to
MedTrak within three business days after AcuNetx's has been paid
for the Product
from the end-user.
6.2 Wholesale Price Payment to AcuNetx. If for any reason
AcuNetx
transfers title of the MedTrak VNG Products to MedTrak, together
with the
responsibilities and liabilities of such title transfer, AcuNetx
will ship
Product directly to MedTrak, and MedTrak shall pay AcuNetx the
wholesale price
for the Product within 15 calendar days of invoice.
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6.3 Payment to MedTrak Distributors. MedTrak will be responsible
for
payment of commissions to all of its Distributors and will
indemnify AcuNetx
from any MedTrak Distributor claims of non-payment.
7.
Term and Termination.
7.1 The Term of this Agreement will be for eight years and will
automatically be renewed for an additional three year term
thereafter
(Additional Terms) unless notice of termination is given in writing
by either
party at least 90 days prior to the end of the Initial Term or any
Additional
Term.
7.2 If either party materially breaches in provision of this
Agreement
and the breach is not cured or steps initiated to remedy the breach
to the other
parties reasonable satisfaction within 30 days after receipt of
notice
specifying the breach, the party not in breach may terminate this
Agreement.
8.
Prior Agreement. The parties had previously signed an Exclusive
Manufacturing, Sales, Licensing and Software Ownership Agreement
dated March 22,
2004, as well as an Addendum signed on October 27, 2004
(collectively referred
to as the "Prior Agreement"). The parties hereby agree to cancel
and terminate
the Prior Agreement, effective as of the date of this Agreement,
except for any
amounts that are owed between the parties for transactions entered
into prior to
the effective date of this Agreement. This Agreement supersedes and
replaces the
Prior Agreement.
9.
Confidential Information.
9.1 AcuNetx Confidential Information. AcuNetx has developed, on
its
own accord and is in possession of certain proprietary and
confidential source
codes, schematics, lists of contractors, proprietary information
and trade
secrets (collectively referred to as "AcuNetx Confidential
Information) related
to the Products that are utilized in the manufacture of the
Products. AcuNetx
has previously delivered the Confidential Information to Anker,
Reed, Hymes &
Schreiber, a Law Corporation (hereafter Anker, Reed) for storage
and
safekeeping.
9.1.1 Access to AcuNetx's Confidential Information. MedTrak
acknowledges that it and its employees will be exposed to and
have
access to the AcuNetx Confidential information during the term of
this
Agreement.
9.1.2 MedTrak agrees to use the AcuNetx Confidential
Information
only to the extent necessary to perform its marketing and sales
obligations under this Agreement and will not disclose, during
the
term of this Agreement, and at all times thereafter, any of the
AcuNetx Confidential Information to any third party without the
prior
written consent of AcuNetx.
9.1.3 MedTrak acknowledges that irreparable injury will result
to
AcuNetx in the event of a breach of this section, and in the event
of
such breach, AcuNetx will be entitled to an injunction to restrain
the
violation by MedTrak, its employees, and all persons acting for
or
with it. Injunctive relief will be in addition to any other
remedies
and damages available.
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9.2 MedTrak Confidential Information. MedTrak has developed, on
its
own accord and is in possession of certain proprietary and
confidential so
