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EXHIBIT 10.4
CONFIDENTIAL
AGREEMENT
This Agreement ("Agreement") is made effective as of March 10,
1999 between Elite Logistics Services, Inc., of 1201 North Avenue
H, Freeport, Texas 77541-1938, and DATA TRACK 2000. com, Inc., 1060
Park Avenue, New York N. Y. 10129.
In the Agreement, the party who is granting the right to sell
its merchandise and services will be referred to as "ELSI and/or
Seller", and the other party who is receiving the right to sell its
merchandise and services will be referred to as "DT2000 and/or
Purchaser".
The parties agree as follows:
I. RIGHTS TO SELL. ELSI owns the asset tracking system
("PageTrack(TM)") and has contracted with SkyTel Communications,
Inc. for supporting the two way pager service requirements,
a. The paging communications coverage area supporting the
PageTrack(TM) systems will be the same two way paging
communications coverage area as offered by SkyTel
Communications, Inc.
b. In accordance with this Agreement,, ELSI grants
"DT2000" an exclusive right to sell PageTrack(TM) and its
supporting services during the term of this Agreement with the
following limitations to the market area. the states of New
York, Pennsylvania, New Jersey, Connecticut, Rhode Island,
Massachusetts, 'New Hampshire, Maine and Vermont. "DT2000"
will have exclusive rights to sell PageTrack(TM) and its
supporting services to all transportation markets. All
Transportation Markets, is determined to include the tracking,
command, and control of 'any privately owned, government or
commercial operations vehicle. This includes the ability to
disable, and enable vehicles if stolen as well as completing:
other data transmissions, ELSI agrees not to enter into any
agreement with any other individual or company to allow the
see of the PageTrack(TM) system or its supporting services for
use as defined in this agreement in market area defined above.
c. ELSI agrees to offer new or improved products to
DT2000 under the terms of this agreement. ELSI does not
represent that we will continue to manufacture any particular
item of Equipment indefinitely or for any specific period. In
fact, we specifically reserve the right to remove, any product
from the market, and or to cease manufacturing or supporting
it. Any decision to discontinue the product will require
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written notification six (6) months prior to the cancellation
date and offer a "life time buy" in any requested volumes to
be delivered prior to the cancellation date. ELSI also
reserves the right to modify any of the specifications or
characteristics of ELSI's products. We will use reasonable
efforts to provide you with advance notification of
modifications, updates, new releases, and improvements in
functionality and performance.
d. "DT2000" agrees to devote its best efforts to the sale
of the PageTrack(TM) system; and supporting services but at a
minimum these efforts should support the amounts identified in
Exhibit "A."
e. All sales prices and terms of the sale shall be
determined by ELSI ELSI agrees to sell the PageTrack(TM)
system to DT2000 at 5% above ELSI's manufacturing cost plus
shipping and handling. Current estimated manufacturing cost
for the PageTrack(TM) I and PageTrack(TM) II are outlined in
Exhibit "B." ELSI and DT2000 shall be entitled to a reasonable
profit but both shall acknowledge that the market prices of
these types of products are being lowered as manufacturing
costs decrease. Both parties agree to make every effort to
keep the market price of said products at the lowest possible
point yet at the same time permit reasonable profit to both
companies. Both parties acknowledge that in order to remain
competitive and keep an increased market share it will be
necessary to maintain competitive prices. ELSI warrants that
it will establish and maintain a uniform price point: with
DT2000 and all other dealerships, distributorships or other
distributors of any kind including ELSI, who distributes the
PageTrack(TM) system, ELSI warrants that it will promptly
correct any pricing anomalies or revoke the right of any such
dealership or other distribution channel authorized by ELSI to
distribute the PageTrack(TM) system which sells the
PageTrack(TM) system under the agreed upon price point. The
express purpose of this clause is to prevent either ELSI or
any other distributor from "underselling" the other and
thereby undermining the ability of the other dealer of the
PageTrack(TM) and related systems to sell its product
competitively
f. ELSI agrees to refer all potential PageTrack(TM)
system customer contacts, from the DT2000 service area as
identified in this Agreement in Section I paragraph b., to
DT2000 as soon as possible after receiving same.
II. PROCEEDS OF SELLS. "DT2000" agrees to pay to ELSI the
amounts within the installment terms as identified in the
following:
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a. "DT2000" will pay to ELSI an initial cost fee which
shall be calculated as follows: $100,000.00 to be paid at the
time of signing of the Agreement. These funds will be held in
escrow by ELSI for a period of 14 days from the date of this
agreement to allow DT2000 the opportunity to test the
PageTrack(TM) system within the SkyTel Communications, Inc.
two-way pager coverage, area within the state of New York to
the satisfaction of DT2000.
b. The intent of this Agreement is to offer DT2000 a low
cost quality product based upon the amount of Equipment you
purchase during the term of this agreement. This is contingent
on DT2000 making an accurate forecast by quarter of
anticipated purchases and making prompt payment for an
shipments made. At the signing of this Agreement DT2000 will
submit to ELSI a valid, good-faith forecast of the total unit
volume of PageTrack(TM) systems DT2000 anticipate buying from
ELSI during each three-month period of the term of this
Agreement. That forecast will be summarized on Schedule "A" to
this Agreement, If at the end of each three months of the term
in Schedule "A", DT2000 has not purchased and taken delivery
of the unit volume forecasted, then ELSI shall have the right
to revise DT2000's discount distributors purchase price for
PageTrack(TM) systems as identified in this Agreement. This
adjustment will reflect the volume level which ELSI believes
DT2000 can realistically achieve for the term of this
Agreement. ELSI will notify DT2000 in writing of this
adjustment, which shall become effective immediately and will
then apply to all future orders as well as any order to be
shipped more than 30 days after the dote of the adjustment
(the Revised PageTrack(TM) Systems Cost). "DT2000" will assure
that payment for all invoiced merchandise is received by ELSI
within 30 days of invoice date.
c. ELSI will pay to DT2000 an amount equal to 20% of the
total Net Per Unit In Service Monthly or Annual Recurring
Airtime Charger, received from PageTrack(TM) system service
customers, which have acquired a service contract through
DT2000. Net Per Unit In Service Monthly or Annual Recurring
Airtime Charges identified in the previous sentence is
determined to be the monthly or annual recurring airtime
charges minus a 10% administration cost. The amount determined
in the previous sentence shall be paid to DT2000 in a single
monthly payment within 30 days of the closing period for the
previous month. With each net proceeds payment, ELSI will
submit to DT2000 a written report that sets forth the
calculation of the amount of the net proceeds payment.
III. RECORDS. Each party shall have the right to inspect the
other parties' records upon reasonable notice. Such inspection
shall not be more than twice a year unless good cause is shown.
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IV. TITLE TO DESIGN AND FIRMWARE. The "PageTrack(TM)" design
and software (referred to as "firmware") shall remain the property
of ELSI. Purchaser will not have the right to sell or make
available to any other party the "PageTrack(TM)" design and/or
firmware. Purchaser will not have the right to change or alter the
"PageTrack(TM)" design and/or firmware without Prior written
permission of ELSI Purchaser shall use the same degree of care, but
no less than a reasonable degree of care, as the Seller uses to
protect its own confidential information of a like nature. to
prevent disclosure of information received hereunder to third
parties. DT2000 acknowledges that ELSI owns all rights, title and
interest in the Elite Logistics Services, Inc. name and logotype;
ELSI is the owner of certain other trademarks and trade names which
are used by each company in connection with certain product lines
and DT2000 will not acquire any interest in any of these trademarks
or trade names by virtue of this Agreement, DT2000 activities under
it, or any relationship DT2000 may have with ELSI. During the terms
of this Agreement DT2000 may indicate to the public and the trade
that DT2000 sells equipment from Elite Logistics Services, Inc.
that is manufactured utilizing OEM equipment from Motorola. With
ELSI's prior written approval, you may also use the Elite Logistics
Services, Inc. trademarks and trade names to promote and solicit
sales of the equipment if DT2000 strictly comply with ELSI
instructions regarding that use. But you will not adopt or use
those trademarks or trade names-or any confusingly similar word or
symbol-as part of DT2000's company name or (to the extent, that
DT2000 has power to prevent such use) allow others to use such
names or marks.
V. PAYROLL TAXES. Purchaser shall be exclusively liable for,
and shall indemnify ELSI against such liability for, a employee
payroll taxes and insurance arising out of wages payable to persons
employed by Purchaser in connection with the performance of this
Agreement.
VI. DEFAULTS. If "DT2000" fails to abide by the obligations of
this Agreement, including the obligation to remit payment to ELSI
when due, ELSI shall have the option to cancel this Agreement by
providing thirty days written notice to "DT2000" "DT2000" shall
have the option of preventing the termination of this Agreement by
taking corrective action that cures the default, if such corrective
action is taken prior to the end of the time period stated in the
previous sentence, and if there are no other defaults during such
time period. In the case that "DT2000" is in default of the
Agreement, "DT2000" will return to ELSI all copies of the PageTrack
design and firmware in "DT2000" possession and account for all
copies of the PageTrack design and firmware that has been furnished
to "DT2000" by ELSI under the Agreement, "DT2000" will be required
to pay all outstanding dollar amounts owed to ELSI at such time
that this agreement is terminated due to default. ELSI will be
required to pay all outstanding dollar amounts less all outstanding
balances owed to ELSI by DT2000 then ELSI will pay balance owed to
DT2000 at such time that this agreement is terminated due to
default,
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VII. ARBITRATION. All disputes under this Agreement that
cannot be resolved by the parties of the Agreement shall be
submitted to arbitration under the rules and regulations of the
American Arbitration Association. Either party may invoke this
paragraph after providing 30 days' written notice to the other
party. All costs of arbitration shall be divided equally between
the parties. Any award may be enforced by a court of law.
VIII. WARRANTIES. Neither party makes any warranties with
respect to the use, sell or other transfer of the PageTrack(TM)
system by the other party or by any third party. In no event will
ELSI or DT2000 be liable for direct, indirect, special, incidental,
or consequential damages, that are in any way related to the
PageTrack(TM) design or firmware. ELSI warrants that PageTrack(TM)
systems have been fully tested and meet all federal and state
requirements and criteria. ELSI warrants that the PageTrack(TM)
systems have been tested and certified to function as advertised.
ELSI will warrant the PageTrack(TM) product for 1 year including
parts and labor.
IX. TRANSFER OF RIGHTS. This Agreement shall be binding on any
successors of the parties- Neither party shall have the right to
assign its interests in this Agreement to any other party, unless
the prior written consent of the other party is obtained. Should
ELSI or DT2000 decide to sell a majority share of its corporation
then the other party shall have the right of first refusal and
shall have a reasonable opportunity to purchase said shares from
the selling corporation.
X. SUPPORT SERVICES, PARTS AND DOCUMENTATION. From time to
time at DT2000 request, ELSI will assist you in training DT2000
employees in the use, operation, sale, service and support of the
PageTrack(TM) system. But those services are subject to their
availability at the time, and DT2000 will pay to ELSI, the standard
charges for those services and reimburse reasonable travel expenses
for ELSI employees where applicable, At DT2000's request and
subject to the availability of parts, ELSI will repair
out-of-warranty PageTrack(TM) system at ELSI's standard cost for
such services.
XI. TAXES AND OTHER ADDITIONAL CHARGES. DT2000 will pay all
sales, use, excise taxes on the PageTrack(TM) systems and services
(except those on our net income or net worth) unless DT2000
furnishes ELSI with a valid resale or exemption certificate.
XII. TERMINATION. This Agreement may be terminated, for good
cause, by either party by providing thirty days' written notice to
the other party by certified mail return receipt requested.
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XIII. ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties and there are no other promises or
conditions in any other agreement, whether oral or written, This
Agreement supersedes any prior written or oral agreements between
the parties,
XIV. AMENDMENT. The Agreement or any part of the Agreement may
be extended, modified or amended, if the amendment is made in
writing and is signed by both parties.
XV. SEVERABILITY. If any provision of this Agreement shall be
held to be invalid or unenforceable for any reason, the remaining
provisions shall continue to be valid and enforceable. If a court
finds that any provision of this Agreement is invalid or
unenforceable, but that by limiting such provision it would become
valid or enforceable, then such provision shall be deemed to be
written, construed, and enforced as so limited.
XVI. WAIVER OF CONTRACTUAL RIGHT. The failure of either party
to enforce any provision of this Agreement shall not be construed
as a waiver or limitation of that pasty's fight to subsequently
enforce and compel strict compliance with every provision of this
Agreement.
XVII. APPLICABLE LAW. This Agreement shall be governed by the
laws of the State of Texas.
Seller:
Joseph D. Smith
By: /s/ Joseph D. Smith
President
Purchaser:
James T. Moriarty
By: /s/ James T. Moriarty
President
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ELITE LOGISTICS SERVICES. INC.
1201 North Avenue H
FREEPORT, TEXAS 77541-1938
January 10, 2000
AMENDMENT/EXTENSION OF AGREEMENT
Whereas a sales authorization Agreement ("Agreement") dated
02/27/99 currently exists between Elite Logistics Services, Inc, of
1201 North Avenue H., Freeport, Texas 77541-1938 ("ELSI and/or
Seller') and DATA TRACK 2000, LLC of 1060 Park Ave., New York, N.
Y. 10128 ("DT2000 and/or Purchaser') and
Whereas said Agreement is dated February 27, 1999 and is to be
in effect for an unspecified period of time so long as both Seller
and Purchaser meet the criteria identified in the Agreement.
Due to circumstances beyond the control of either ELSI or
DT2000, Purchaser has not been capable of meeting the minimum sales
amounts as identified and agreed to in Appendix A to the Agreement
and
Whereas ELSI. after review of DT2000's marketing plan and
current establishment of a satisfactory sells and distribution
channel, agrees to amend and extend the Agreement with the
following stipulations:
In accordance with the Agreement, at the signing of this
Amendment/Extension, DT2000 will submit to ELSI a valid, good-faith
by month forecast of the volume of product that DT2000 anticipates
purchasing from ELSI over the next 12 months starting February 2000
through January 2001. This forecast will be attached to the
Agreement as Appendix A.
At the signing of this Amendment/Extension DT2000 will submit
to ELSI valid purchase orders for the first three months of
forecasted product requirements identified in the 12 month forecast
identified in this Amendment/Extension to. be attached to the
Agreement as Appendix A.
ELSI and DT2000 agree that, subject to the satisfactory
completion of the requirements outlined in this
Amendment/Extension, the Agreement shall continue in effect as
written and previously agreed to by ELSI and DT2000.
ELSI and DT2000 hereby agree that the Agreement shall remain
in effect as written and agreed to by ELSI and DT2000 unless said
Agreement is in conflict with this Amendment/Extension in which
case this Amendment/Extension of the Agreement shall control.
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Seller: Purchaser
Elite Logistics Services, Inc. DATA TRACK 2000
BY: /s/ Joseph D. Smith BY: /s/ James T. Moriaty
President President
