Sales Commission and Co-Marketing Agreement between DSG TAG Systems, Inc. and E-Z-GO Division of Textron Inc.

 Exhibit 10.3 SALES COMMISSION AND CO-MARKETING AGREEMENT THIS SALES COMMISSION AND CO-MARKETING AGREEMENT ("Agreement"), Is executed in duplicate as of the 19th day of January, 2012 (the "Effective Date"), by and between: DSG TAG SYSTEMS, INC., a Nevada corporation with a registered office in the Province of British Columbia, Canada with its offices situated at ###-###-#### 152" Street Surrey, BC, Canada V3S 5A5, (HEREINAFTER REFERRED TO AS "DSG-TAG"), AND: E-Z-GO DIVISION OF TEXTRON INC., a Delaware corporation, with its E-Z-GO Division having its principal offices at 1451 Marvin Griffin Road, Augusta, GA 30906 (HEREINAFTER REFERRED TO AS "E-Z-GO"), Whereas, DSG-TAG has developed and owns a proprietary fleet management/asset tracking system, specifically designed for golf and turf vehicle fleet management (the "SYSTEM") and is engaged in the production, lease and sale of Systems and other products related to the recreation industry (collectively, the "DSG PRODUCTS") and is desirous of creating and having a sales, distribution and service network for the DSG Products; Whereas E-Z-GO is in the business of manufacturing and/or distributing golf cars, utility vehicles and personal transportation vehicles under the E-Z-GO, Cushman and Bad Boy Buggies brand names (collectively the "E-Z-GO PRODUCTS") and has an extensive network of dealers and distributors in North and South America, Asia, Africa and Australia. Whereas both DSG-TAG and E-Z-GO (hereinafter referred to as "THE PARTIES") have a mutual Interest in assisting each other in promoting sales of their respective products. THEREFORE, it is agreed as follows between the parties: APPOINTMENT OF TERRITORY: DSG-TAG hereby agrees to appoint E-Z-GO as its non-exclusive sales representative for sales of the DSG Products within the territory covering all of the countries in the continents of North America, South America, Australia, Africa and Asia (east of Bangladesh). The territory so described, or as it may be subsequently enlarged, reduced, or otherwise changed in area or in scope in accordance with the terms hereof, is hereinafter referred to as the "TERRITORY". SALES OUTSIDE TERRITORY: If E-Z-GO generates sales from customers outside the Territory these sales will be done on a non-exclusive basis; however they will require the prior written consent of DSG-TAG. DSG-TAG shall not grant any other person or entity the right to sell or distribute the DSG-TAG Product in the named Territory. E-Z-GO also recognizes that DSG-TAG may have contractual obligations to provide DSG Products to certain Golf Course management companies. In such a case, DSG-TAG and E-Z-GO will negotiate in good faith whether such sales or leases will be eligible for Commission. TERM AND TERMINATION: The term of this Agreement shall be for five (5) years (the "TERM"), subject to the terms and conditions of this Agreement. This Agreement may only be renewed in a writing signed by the authorized signatories of both Parties. Either party shall have the right, on six (6) months written notice by certified or registered mail, to terminate this Agreement for convenience. This Agreement may also be terminated for cause upon written notice by certified or registered mail, which shall become effective thirty (30) days after receipt, unless the terminated party cured the breach prior to the end of the notice period. Upon the termination or expiration of this Agreement, E-Z-GO shall cease its marketing activities for the DSG Products, provided, however, that DSG-TAG shall be liable to pay Commission to E-Z-GO for all sales of DSG Products prior to the termination cate for which DSG-TAG is liable to pay Commission pursuant to this Agreement. E-Z-GO DUTIES: E-Z-GO shall use its reasonable best efforts to locate and communicate diligently with potential EZ-GO Product customers about the DSG Products in the Territory, shall promote in all reasonable and proper ways the sale or lease of the DSG Products, and shall in all respects assist to advance DSG-TAG's interests in the Territory. 1 <PAGE> E-Z-GO will issue notifications, subject to technical verification of each DSG Product, to all of its distributors and resellers in the Territory that DSG Products are deemed to be officially approved accessories for E-Z-GO Products and do not void or in any way affect applicable E-Z-GO Product warranties if installed by a certified technician. DSG-TAG DUTIES: SALES COMMISSION -- From every sale, lease or transfer of DSG Product that is installed on an EZ-GO Product in the Territory, DSG-TAG shall pay to E-Z-GO a commission of US$ 50 / unit (the "Commission"). Not later than thirty (30) days following the end of each calendar quarter during the Term of the Agreement, DSG-TAG shall provide to E-Z-GO a sales commission report form, substantially in the form set forth on Exhibit A (the "Sales Commission Report Form"), which shall be signed and certified as accurate and complete by an officer of DSG-TAG. E-Z-GO shall have fifteen (15) days from receipt of the Sales Commission Report Form to review the Sales Commission Report Form and provide any comments to DSG-TAG. DSG-TAG shall pay the Commission to E-Z-GO by wire transfer no later than sixty (60) days following the end of the applicable quarter, provided that if E-Z-GO has comments on the Sales Commission Report Form, DSG-TAG shall pay all unchallenged Commissions within sixty (60) days following the end of the applicable quarter and shall make such additional Commission payments as may result from the Parties' review and discussion of the Sales Commission Report Form. E-Z-GO shall have the right at any time during the Term of the Agreement and for ninety (90) days following the termination or expiration of this Agreement, to review all relevant DSG-TAG books and records to substantiate the accuracy of the Sales Commission Report Form. TRAINING - DSG-TAG shall at its own expense make available to E-Z-GO's employees DSG Product training materials to assist E-Z-GO with the sales and marketing of DSG Product. LITERATURE - DSG-TAG shall make available and provide to E-Z-GO at DSG-TAG's expense reasonable quantities of promotional and technical literature for the DSG Products immediately as they are produced and become available by DSG-TAG and provide ready artwork for printing and translation. DSG-TAG will forward camera ready material so E-Z-GO can print copies of literature in the languages required. SERVICE -- DSG-TAG will provide all necessary warranty and service support for the DSG Products in the Territory and the parties acknowledge that E-Z-GO shall have no obligation to provide any warranty or service support for DSG Products, E-Z-GO AS INDEPENDENT CONTRACTOR: E-Z-GO's personnel are not employees of DSG-TAG, and have no authority to enter into any agreement or contract or to make any promise, affirmation, description or representation on behalf of DSG-TAG. E-Z-GO has no right or authority to create any obligation of any kind, or to incur any liability whatever, on behalf of DSG-TAG. E-Z-GO shall function as an independent contractor only, and shall not have any interest in common with DSGTAG as part of any joint venture, syndicate or pool unless otherwise agreed by the parties. REPRESENTATION: E-Z-GO represents and warrants to DSG-TAG that E-Z-GO currently does not and will not during the term of this Agreement and any renewal thereof, directly or indirectly sell, deal in or otherwise exploit products, which are competitive in the Territory with the DSG Products. INDEMNIFICATION: DSG-TAG shall indemnify, defend and hold harmless E-Z-GO and its affiliates and their respective employees, officers, directors, dealers and distributors from and against all claims, damages, tosses, liabilities, costs and expenses (including, but not limited to, reasonable attorneys' fees, litigation costs and legal expenses) arising from or relating to the installation, use, maintenance or repair of DSG Products. APPLICABLE TAX, VENUE: This Agreement, and the rights and liabilities of the parties hereto, shall in all respects be interpreted, enforced and governed by and under and construed in accordance with the laws of British Columbia, Canada. If at any time any question, dispute or difference whatsoever shall arise between DSG-TAG and E-Z-GO upon, in relation to, or in connection with this Agreement that cannot BE resolved through discussions between the senior management of the Parties either DSG-TAG or E-Z-GO may give to the other notice in writing of the existence of such question, dispute or difference, and the same shall be referred to arbitration by a three person panel which arbitration shall be held in accordance with the Rules of the International Chamber of Commerce. The arbitration will be held in Charlotte, North Carolina, USA. Each party shall appoint one member of the panel and the two so appointed shall appoint the third member. Notwithstanding anything else to the contrary herein, either party will always be entitled to address any court competent with respect to the other party or the DSG Products in respect of obtaining either provisional measures or interim relief and applications for attachments, freezing orders, etc. 2 <PAGE> NOTICES: All notices and other communications hereunder shall be made in writing, and shall be deemed to have been given on the date of personal delivery, facsimile transmission (with confirmation of receipt) or mailing if delivered personally, sent by facsimile or mailed, air mail first-class postage prepaid, to: If to DSG-TAG, to: DSG-TAG Systems Inc. Suite 214, 5455-- 152nd. Street Surrey, B.C. Canada V3S 5A5 Fax: 778 ###-###-#### If to the E-Z-GO, to: E-Z-GO 1451 Marvin Griffin Road Augusta, GA 30906 USA Fax: 706 ###-###-#### THIRD PARTY RIGHTS: The parties to this Agreement do not intend that any of its terms will be enforceable by ANY person not a party to it. ENTIRE AGREEMENT: This Agreement contains all the terms which the parties have agreed in relation to the subject matter of this Agreement and supersedes any prior written or oral agreements, representations or understandings between the parties relating to such subject matter. ASSIGNMENT: Neither this Agreement nor any rights granted hereunder may be assigned In whole or in part by either party without the express written consent of the other party, except that this Agreement may be assigned by E-Z-GO to any Affiliate or any successor to all or substantially all of the business or assets of E-Z-GO. AMENDMENT: No amendment to this Agreement shall be valid unless signed by the authorized signatories of both parties. Executed as of the 19th day of January, 2012. DSG-TAG SYSTEMS INC. E-Z-GO DIVISION OF TESTRON INC. Signature: /s/ Robert Silzer Sr. Signature: /s/ Mike Parkhurst -------------------------- -------------------------- Name: Robert Silzer Sr. Name: Mike Parkhurst ------------------------------- ------------------------------- Title: C.E.O. Title: V.P> Golf Business ------------------------------- ------------------------------- Date: Jan 19 / 2012 Date: 1/19/12 ------------------------------- ------------------------------- 3 <PAGE> SCHEDULE A COMMISSION SALES REPORT FORM 4 <PAGE> DSG PRODUCT SALES COMISSION REPORT FORM __ QUARTER - 201[ ] Type of E-Z-GO # of Customer Address Date of DSG Product Lease Term Units Customer Name (Street, City, State, Country) Installation Product Installed On (Years) Installed ------------- ------------------------------ ------------ ------- ------------ ------- --------- TOTAL # OF UNITS INSTALLED: _______ COMMISSION PAYABLE @ US$50 PER UNIT: $______ I hereby certify that the information set forth on this DSG Product Sales Commission Report Form is a true, accurate and complete list of all DSG Products solid in the territory during the period set forth above: ------------------------------------ SIGNATURE ------------------------------------ NAME AND TITLE ------------------------------------ DATE 5