STRATEGIC ALLIANCE AGREEMENT AND EXCLUSIVE DISTRIBUTION AGREEMENT 1
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EXHIBIT 10.11
STRATEGIC ALLIANCE AGREEMENT
AND
EXCLUSIVE DISTRIBUTION AGREEMENT
This Strategic Alliance Agreement and Exclusive Distribution 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 Concentrax
Europe, Ltd. ("CE"), a company with its principal place of business located in
Zurich, Switzerland, this 19th day of November, 2002 ("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 utilises 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 by using CTRX's Voice Command Centre. 2 CE 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 European market, including but not limited to the European Union
and its member countries.
4 CE desires to provide CTRX European sales and distribution channels for
intensive marketing of CTRX's products through CE's current and future sales
networks to business customers in Europe.
5 CTRX and CE 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 Europe.
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AGREEMENT
CTRX and CE (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
(A) APPOINTMENT. CTRX hereby appoints CE as CTRX's sole and exclusive
distributor 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 Europe, including but not limited to
Switzerland and the European Union with its currently fifteen member countries
("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 CE hereby accepts such
appointment as distributor.
(B) NO IMPLIED RIGHTS. CE acknowledges that except as expressly provided herein,
CE 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 CE as CTRX's distributor
hereunder, CE shall within 180 days from the effective date of this Agreement
pay CTRX a one-time nonrefundable franchise fee of One Million U.S. Dollars
(US$1,000,000.00) ("Fee"). The Fee represents the full, final and complete
consideration payable by CE to CTRX in consideration for the distribution rights
granted hereunder, the Fee shall be payable by CE to CTRX by wire transfer to an
account of CTRX.
(B) APPOINTMENT OF ESCROW AGENT. CTRX and CE hereby appoint and designate ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Esq., with offices at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ as
"ESCROW AGENT" hereunder for the purpose set forth herein and ESCROW AGENT
accepts such appointment.
(C) INTEREST, AND REGISTRATION.
(i) Subject to a separate Stock Purchase Agreement ("SPA") to be
drafted and delivered to CE by CTRX, CTRX hereby agrees to issue Three Million
(3,000,000) new shares of its common stock as "SB2 registered shares," which
shares shall be placed in escrow and subject to performance/release criteria, in
exchange for 50% of CE shares. This issuance of new stock by CTRX shall be
executed in full accordance with any rules or laws imposed by any regulatory
body and those existing under the U.S. Securities Act of 1933 and 1934.
Furthermore the CTRX shares issued under this paragraph will be duly authorized,
validly issued and outstanding, fully paid and non-assessable and will not be
subject to any liens or encumbrances.
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(ii) The Three Million (3,000,000) shares shall immediately issued and
placed in an escrow account with the ESCROW AGENT, and shall be released as
follows:
a. Two Hundred and Fifty Thousand (250,000) shares shall
released immediately upon the execution of this Agreement in exchange for the
expected performance of CE submitting one fourth of the required franchise fee
to CTRX, or $250,000;
b. Seven Hundred Fifty Thousand (750,000) shares releasable in
three (3) 250,000 share increments, each releasable upon the receipt of $250,000
towards the franchise fee;
c. Two Million (2,000,000) shall be broken into twenty (20)
certificates of 100,000 shares each, with each certificate being releasable upon
the meeting of CE of certain performance criteria outlined in the SPA, and such
certificates shall be released upon written notification of CTRX to ESCROW AGENT
over the next twelve months;
d. All Three Million (3,000,000) shares will be registered in
an SB-2 Registration Statement within thirty days of the execution of this
Agreement. (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.
(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. 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. The Parties will also 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 CE. CTRX
will be responsible for manufacturing or purchasing directly from manufactures
all Products to be sold by CE. 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
CE, by execution hereof (or, where appropriate or required, by execution of
separate instruments of assignment), all its (and their) rights, titles and
interests in and to assigned trademarks, together with the goodwill of the
business symbolized by assigned trademarks.
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(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 CE 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, CE'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$5,000,000
Financial Year 2 (e.g. 2004): US$10,000,000
Financial Year 3 (e.g. 2005): US$25,000,000
(F) BILLING. CE will be responsible for billing and collecting all amounts due
from customers of Products. CE shall bear credit risk with respect to amounts
where CE 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 CE by CTRX. This PBA shall, inter alia, provide for proposed
Payment Terms ("Payment Terms"), i.e.: C.O.D., LC, etc.
(G) ORDER PROCESSING. CE 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 CE. Features may include Vehicle
Locate with Live Track, Starter Disable, Unlock Doors, Geo Fence, etc.
CTRX will provide sample order forms to assist CE.
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
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Section (g) above and for which the related Product is available; provided that
such orders to be shipped are shipped at the customer's expense. CTRX reserves
the right to reject any other orders.
(I) ORDER CONFIRMATION. Within 24 hours of CTRX's receipt of an order, CTRX
shall confirm to CE 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
CE 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 still
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 CE 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 CE's customer service. CTRX shall
provide such customer service to CE 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.
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
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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
honoured. 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. CE 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 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 serious and irreparable injury to a
Party. However, the Parties shall make a good faith effort to negotiate 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 honour 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 CE, its agents and employees
from and against any cost, loss, damage, liability, judgement 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. CE agrees to save harmless, indemnify and
defend CTRX, its agents and employees from and against any cost, loss, damage,
liability, judgement and expense whatsoever, including
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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 represent 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 CE that it is duly organised
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
MISCELLANEOUS PROVISIONS
(A) NON-CIRCUMVENTION. CTRX, intending to be legally bound, hereby irrevocably
agrees not to circumvent, avoid, bypass, or obviate CE, directly or indirectly,
to avoid payments or fees, commissions, or any other form of compensations to CE
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 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 which 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.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PHONE: (▇▇▇) ▇▇▇-▇▇▇▇
TOLL FREE: (▇▇▇) ▇▇▇-▇▇▇▇
CONCENTRAX EUROPE LTD.
C/▇ ▇▇▇▇▇▇ & PARTNERS AG
HAUS ZUM ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
(E) GOVERNING LAW. This Agreement shall be governed by the laws of Switzerland
and the federal laws of the U.S. applicable therein, and the Parties hereby
attorn to the jurisdiction of the Courts of Switzerland and of U.S. federal
courts.
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(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., per: CONCENTRAX EUROPE LTD, per:
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Authorised Signatory Authorised Signatory
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