DISTRIBUTION AND MANUFACTURING AGREEMENT
Exhibit
10.1
DISTRIBUTION
AND MANUFACTURING AGREEMENT
This
Distribution Agreement (the "Agreement") is made by and between Sequiam
Biometrics, Inc. (“Sequiam”) , a Florida Corporation with offices at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, hereinafter referred to as "Manufacturer"),and
Quasar Group, Inc. (“Quasar”) a Colorado Corporation, with offices at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
Whereas,
the parties hereto enter into an agreement on an exclusive basis to set out
the
terms and conditions of the distribution of the Manufacturer's products and
services as listed in Exhibit
A (hereinafter
called "Products”.)
The
parties agree that Sequiam and Quasar will form a new corporation in Switzerland
with the shares divided 51% to Sequiam and 49% to the Quasar. Sequiam must
approve the form of corporate charter and bylaws prior to incorporation of
the
new company. The new corporation formed will hereinafter be referred to as
“Distributor”.
As
a
prerequisite of the Swiss Bonny system, the parties will bring to the Swiss
company capital a minimum of 1.5 Million US Dollars in invisible assets. Based
on that, the Distributor will make it’s best effort to secure funding via the
Swiss Bonny program equal to 3 million CHF utilizing the efforts of Quasar
Group. The funding will comprise a loan with an annual interest rate
corresponding to the standard commercial credit interest rate in Switzerland
and
amortized over a period no longer than 10 years. The funding should have a
grace
period of no less than 2 years.
Now
therefore, in consideration of the mutual covenants, conditions and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree, as
follows:
Article
1 - Appointment
| 1.1 |
Manufacturer
Appointment:
|
Manufacturer
hereby appoints Distributor for the term of this Agreement as referred to in
paragraph 2.1. The Distributor hereby accepts such appointment and agrees to
purchase from Manufacturer all of its requirements as needed for the Products
for sale in the Territory in the terms of this Agreement. The Territory is
defined to include the following region: Europe,
Middle East
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Distributor
Appointment:
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Distributor
hereby appoints Manufacturer, as its exclusive biometric design and manufacture
partner to design and manufacture the Products. Manufacturer hereby accepts
such
appointment and agrees to provide biometric products for the distributor
beginning with the products listed in Exhibit A.
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1.2
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Distributor
agrees not to modify or alter the Products without the prior written
consent of the Manufacturer.
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Article
2 - Term,
Performance, Default and Payment
2.1 The
term
of this Agreement shall be from July 6th, 2006 until July 6th,
2016.
Thereafter,
this agreement shall be renewed for an additional term of twenty-four (24)
consecutive months, unless one party provides the other written notice of
termination at least 12 months prior to the expiration of the then current
term.
Any expiration or termination shall not modify or alter any of the rights or
obligations of the parties, which arose prior to such expiration or
termination.
| 2.2 |
Distributor
shall pay to the Manufacturer, development costs for custom designs
which
shall be determined by the Manufacturer and approved by the Distributor.
Actual hardware, software, and installation will incur separate charges
as
outlined in the distributor price list.
|
1
| 2.3 |
The
distributor may incur future development costs for any project additions
that are not within the scope of Exhibit A based on a quote made
by the
Manufacturer and accepted by the Distributor.
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| 2.4 |
Distributor
shall be authorized to perform the following functions at it’s own
expense:
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A)
Final
Product Assembly
B)
Sales
and Marketing
C)
Tier 1
Technical Support
D)
Quality Assurance
E)
Service and Repair
| 2.5 |
The
Distributor is authorized to integrate by itself the Manufacturer
technology to answer specific customer needs when authorized in writing
by
manufacturer to do so. Such authorization will not be unreasonably
withheld.
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| 2.6 |
Distributor
is authorized to offer products on an OEM basis only when approved
in
writing by the manufacturer and a case by case basis. Such approval
will
not be unreasonably withheld
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| 2.7 |
All
new available Manufacturer products or solutions must be offered
to the
Distributor as long as they do not violate any agreements to do
so.
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Article
3 - Default
3.1 Events
of Default.
Either
party may terminate this Agreement if:
| 3.1.1 |
The
other party breaches any material term or condition of this Agreement
and
fails to cure such breach within sixty (60) days after the due date
(with
respect to any payment default) or within ninety (90) days after
receipt
of written notice for any other
breach.
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| 3.1.2 |
The
other party files a voluntary petition or is subject to an involuntary
petition in bankruptcy or commences a liquidation and dissolution
or
voluntarily assigns its assets for the benefit of creditors. In the
event
Manufacturer becomes insolvent technical documentation will be provided
to
Distributor, such documentation will only be sufficient to provide
technical support not to build compatible or similar hardware
units.
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3.2
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All
material provided by the Manufacturer and in possession by Distributor
shall be returned to the Manufacturer within fourteen (14) days of
the
termination and expiration or default of this contract, including
but not
limited to computer equipment, design documents and drawings, tests
and
diagnostic equipment that was agreed to be developed or otherwise
produced
or supplied by the manufacturer. Distributor can retain any inventory
that
has been paid for in full on or before the date of
termination.
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.
2
Article
4 - Distributor’s
Duties
4.1 Delivery.
Manufacturer will use all commercially reasonable efforts to deliver the
Products in accordance with any purchase order. Manufacturer will make all
reasonable efforts to package product to prevent damage during shipping. After
the shipment delivery, the products will be controlled by the Distributor who
will sign the carrier receipt for acceptation. Risk of loss or damage to the
Products is the Manufacturer responsibility until the products are accepted
by
the Distributor. In case of loss or damage of the goods by the carrier, the
Manufacturer will work in concert with the Distributor on the Manufacturer
compensation due by the carrier.
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4.2
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Price.
The price to be paid by Distributor for any Product purchased from
Manufacturer is outlined in Distributor price list attached hereto
as
Exhibit
A. Unless otherwise stated and agreed to, prices are listed
and
are payable in United States Dollars. Prices are inclusive of those
items
specifically identified on Exhibit A and exclusive
of any item not so specified or described in Exhibit
A. In addition to the purchase price, Distributor will
pay
any and all costs which Manufacturer may incur or pre-pay (without
any
obligation on Manufacturer to do so) on behalf of or for the benefit
of
Distributor, including, but without limitation, shipping and handling
fees. All the "extra charges" must be clearly defined by the manufacturer
with at least 90 days advance notice.
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4.3 Price
Changes. Except
as
otherwise agreed, the prices are subject
to change from time to time. Any price change will be effective thirty (30)
days
after written notice from Manufacturer and will apply to all
Products ordered by Distributor after the effective date of the change. If
Manufacturer reduces any product price or offers increased discounts,
Manufacturer will credit Distributor within thirty (30) days the difference
between the original product price
and
the reduced product price for Distributor's product inventory, including but
not
limited to: (i) any Manufacturers product in transit to Distributor, (ii) any
product in Distributor inventory that was purchased within the previous thirty
(30) day period. In the event that Manufacturer increases the price of the
product to Distributor, Manufacturer has the right to limit the purchase
quantities.
| 4.3.1 |
Pricing
not specifically specified within Exhibit A shall be calculated according
to the following formula: (Product cost of manufacture + 19% burden
rate)*1.15)+ shipping)
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4.4 Payment.
4.4.1 Distributor
must pay for and must accept all of the Products shipped by Manufacturer
pursuant to Distributors purchase orders.
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4.4.2
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Payment
of any sums due to Manufacturer hereunder must be made by wire transfer
or
check in United States Dollars. Unless otherwise agreed to in writing,
Distributor must pay the Manufacturer the applicable purchase price
plus
all additional costs (including such items as duties, tax, freight,
etc.).
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4.5
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Promotion.
Distributor will actively promote the sale of the Manufacturer’s Products
in the Territory as aforementioned in Paragraph 1.1, including information
and advice to promote the sale of the Products. The Distributor shall
provide a schedule of planned events (for the duration of this Agreement)
to the Manufacturer within sixty (60) days of the date hereof. The
Manufacturer will coordinate with the Distributor for joint participation
at certain events as deemed necessary by the
Distributor.
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4.6
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Reporting.
Distributor shall keep Manufacturer informed of Distributor activities
and
of market
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|
conditions
within the Territory through monthly sales reports that provide Customer
identity and location.
|
3
| 4.7 |
Support
Services.
Distributor shall provide and maintain, at its own expense, adequate
customer service facilities and properly trained and necessary staff
to
carry out first line support of the Products, including but not limited
to, reasonable telephone support to Customers, including diagnosing
problems with the Products purchased by the Customer. Distributor
will
also implement all support programs and upgrade procedures for the
Products as required by Manufacturer from time to time. Manufacturer
will
provide hardware support as described in the warranty section of
this
agreement.
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| 4.8 |
Customers
generated by the Distributor activity are the property of the
Distributor.
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| 4.9 |
The
Manufacturer shall provide products that are matching the local
certification regulations where financially feasible.
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Article
5 - Manufacturer's
Rights
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5.1
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Right
of Inspection.
Manufacturer shall have the right, at reasonable times during business
hours, to inspect the sales and customer records of Distributor with
two
(2) working days prior written
notice.
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5.2
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Change
of Design.
Manufacturer may, at any time and without liability to Distributor,
improve, modify or discontinue any Product or feature of any Product.
Manufacturer will not be obliged to make any change or upgrade to
any
Product shipped to Distributor prior to the official introduction
of
any change to same. Manufacturer may in writing, without liability
to
Distributor, fill any order placed by Distributor for any given
Product by
substituting therefore a modified or changed version of the same,
so long
as there is no significant loss of performance and/or
functionality.
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5.3
Distributor will have no access to the Manufacturer’s confidential information
contained in the server.
5.4
All
customer lists related to the Product in the territory will be shared by
the
Manufacturer and the Distributor. Both parties will be granted reasonable
access
to this information at their discretion.
Article
6 -Returns
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6.1
|
Defective
Product.
Distributor may return any Product to Manufacturer that Distributor
or its
customer finds defective. If Distributor has insufficient inventory
to
replace customer’s defective merchandise, Distributor shall immediately
place an offsetting purchase order greater or equal to the return
amount.
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Article
7 -Trademarks,
Copyrights and Trade Secrets
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7.1
|
Use.
All of the Products that are sold by Distributor directly or indirectly
must bear an authorized trademark of the Manufacturer. Distributor
may
place its private label on Products (or OEM labels approved by
manufacturer in writing) at Distributors own expense so long as
the
Manufacturer’s trademark is still denoted on the product.
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7.2Copying
Prohibited.
Distributor may not modify, copy or otherwise reproduce in any way any Product
Software or Hardware (including materials and any other documentation) supplied
with any Product sold hereunder. Distributor shall, maintain the integrity
of
all copyright and trademarks of Manufacturer as depicted on the
Products.
| 7.3 |
Survival.
Distributor's obligations under the terms of this agreement shall
survive
the termination of this Agreement, regardless of the cause of said
termination.
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7.4
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Copyright
Protection.
Distributor acknowledges that the product firmware is entitled
to
protection under the Copyright Laws of the United States of America
(collectively, the "Copyright
Laws").
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4
7.5 Confidentiality.
Each
party shall keep all proprietary and confidential information of the
delivering
party, including, without limitation, its business, prospects, clients,
technical know-how,
methods, procedures, data, specifications, designs, software code, and formulas
not previously
disclosed to the public (the "Information") or received by it or its agents,
affiliates, representatives
or employees confidentially and shall not, without the delivering party's prior
written
consent, disclose, or permit the use of or the disclosure or use by its agents,
affiliates, representatives
or employees of, any such Information, other than in connection with its duties
under
this Agreement. Moreover, each party agrees to reveal the Information to its
agents, affiliates, representatives and employees solely for the purpose of
performing this Agreement and to inform such persons of the confidential nature
of the Information and obtain the agreement of such persons to act in accordance
with the terms and conditions of this Section. This provision shall
survive the termination of this agreement. This provision shall be governed
by
Florida Statute 812.081.
Article
8 - Intellectual
Property Infringement
|
8.1
|
Notice.
Each party will promptly notify the other in writing if the party
becomes
aware of:
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8.1.1
|
Any
infringement of any patent, trademark, copyright, trade secret or
other
intellectual property rights vested in the Manufacturer (the "Intellectual
Property Rights") related to the Products; and/or any actual or potential
claim involving the use of the Products that may infringe on the
actual or
alleged Intellectual Property Rights of any other person or
entity.
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8.2
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Indemnity.
Manufacturer shall not be liable for any and all alleged infringement
where the Product sold by Distributor has been used in a manner for
which
it was not intended by Manufacturer or where any alleged infringement
as a
result of modification of the Product, or parts thereof, after its
sale by
Manufacturer to Distributor.
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Article
9 - Manufacturer's Warranties
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9.1
|
Manufacturer's
Warranties.
Manufacturer warrants to Distributor, its customers, end users, agents
and
representatives, that the Products will perform in accordance with
Manufacturer's Warranty Policy as in effect from time to time. The
current
version of such Warranty Policy is shown in Exhibit
B hereto
and shall be the only warranty under this Agreement, if not contrary
to
the laws of the United States, until a new warranty is provided to
Distributor in writing signed by an authorized officer of Manufacturer.
Any replacement warranty will be provided in advance to Distributor
in
writing and approved by the parties. Said approval will not be
unreasonably withheld. Distributor will provide notice in writing
within 3
business days.
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5
Article
10- Manufacturer's
Liability
| 10.1.1 |
Manufacturer
shall not have any liability to Distributor or any Customer, in tort,
contract or otherwise, for claims, losses, damages or injuries arising
out
of the design, manufacture, sale, use, licensing or performance of
any of
the Products or in connection with any matter of any nature arising
out of
or in connection with this
Agreement.
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NOTWITHSTANDING
THE FOREGOING, MANUFACTURER SHALL NOT BE LIABLE TO DISTRIBUTOR OR CUSTOMERS,
FOR
ANY INDIRECT, CONSEQUENTIAL, OR SPECIAL DAMAGES WHATSOEVER WHICH ARISE OUT
OF OR
IN CONNECTION WITH THIS AGREEMENT, THE DESIGN, MANUFACTURE, SALE, USE, LICENSING
OR PERFORMANCE OF ANY OF THE PRODUCTS, INCLUDING, WITHOUT LIMITATION, DAMAGES
ARISING FROM DELAY OF DELIVERY OR FROM LOSS OF PROFITS, DATA, BUSINESS OR
GOODWILL, EVEN IF MANUFACTURER IS ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
Article
11 - Distributor's
Warranties
11.1 Warranties
to Manufacturer.
Distributor represents and warrants to Manufacturer that:
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11.1.1
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Distributor
is to be legally incorporated under the laws of Switzerland with
all
requisite power to perform under this agreement. Distributor is qualified
to do business in every jurisdiction where such qualification is
required.
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11.2
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Indemnity.
Distributor shall, at its sole expense, indemnify, defend and hold
Manufacturer harmless against any representations or warranties made
by
Distributor, which representations or warranties were not expressly
made
under Manufacturer's Warranty Policy; and such indemnification shall
extend to any and all actions, suits or proceedings incidental to
any such
claims, losses or damages.
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| 11.3 |
Remedies.
The only rights and remedies conferred by this Agreement shall be
each
party's cause of action for breach of
contract.
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Article
12 - Import/Export
Restrictions
12.1
Compliance.
Distributor shall comply, at its sole cost, with the laws of the defined
Territory, in performing its obligations and duties hereunder and in any of
its
dealings with or relating to Manufacturer and/or any Product.
Distributor
will use its best efforts to ensure that Customers will similarly comply with
said laws and export licenses.
Article
13 - Taxes
and Other Deductions
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13.1
|
No
Withholding.
No deductions of any kind shall be made from any payment of monies
to
Manufacturer by Distributor under this Agreement, including the deduction
or withholding of any taxes imposed by the government(s) or tax
authorities in the Territory.
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13.2
Adjustments.
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13.2.1
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If
Distributor is required by the government or taxing authority of
the
Territory to deduct or withhold any taxes or duties from the monies
payable to Manufacturer by Distributor, then Distributor shall pay
Manufacturer the gross amount of such monies, so that the net amount
received by Manufacturer (after withholding or deducting the required
amount) is equal to the amount originally owed or
invoiced.
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6
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13.3
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Taxes.
Except as otherwise expressly provided in this Agreement, Distributor
shall pay directly, and indemnify Manufacturer against and repay
Manufacturer on demand for any and all income, franchise, sales,
use,
personal property, ad valorem, value-added, stamps or other taxes,
levies,
or other fees, together with any loss, liability, claim, costs or
expenses, interest and penalties incurred by Manufacturer as a result
of
Distributor's failure to pay any such taxes when
due.
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Article
14 - Mediation
and/or Litigation
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14.
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Mediation.
The parties shall endeavor to resolve any dispute arising out of
or
relating to this Agreement by mediation. Unless otherwise agreed,
the
parties will each select a mediator and the 2 mediators will select
a
third. Jurisdiction for said mediation shall be the State of
Florida.
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Article
15 - Entire
Agreement
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15.
|
Entire
Agreement.
This Agreement, together with its attached Exhibits, all of which
are
incorporated herein by this reference and made a part hereof, contains
the
entire agreement between the parties hereto, and supersedes any and
all
other oral or written representations, statements, promises, agreements
and letters or other expressions of intent of any kind with respect
to the
subject matter hereof. This Agreement may not be modified or amended
without the prior written consent of the parties. However, the foregoing
shall not limit the right of Manufacturer to amend, from time to
time in
its sole discretion, the Prices or the Warranty
Policy.
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7
Article
16 - Force
Majeure
| 16. |
Force
Majeure.
Neither party hereto shall have any liability for delay or non-fulfillment
of any terms of this Agreement caused by the party's direct or indirect
control (but excluding financial inability) such as act of God, force
Majeure, war, riots or civil disturbance, strikes, accident, fire,
transportation conditions, labor and/or material shortages, governmental
controls, regulations and permits and/or
embargoes.
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ACCEPTED
BY THE UNDERSIGNED FULLY AUTHORIZED AGENTS OF BOTH PARTIES.
/s/
▇▇▇▇▇ ▇. Allen__________________
For
and
on behalf of: Quasar Group, Inc.
(Who
warrants her/his authority hereto)
DATE
_July
6, 2006________________
/s/
▇▇▇▇▇ Henderson____________
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
President
For
and
on behalf of: Sequiam Biometrics, Inc.
(Who
warrants his/her authority hereto)
DATE
_July
6, 2006________________
8
Product
Description & Product Pricing
EXHIBIT
A
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Components
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Distributors
cost per unit
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Any
Sequiam Products whose availability for distribution or assembly
in Europe
is not restricted or prohibited by any contract or agreement that
pre-dates this agreement; and, any Sequiam product that is not now
or in
the future subject to exclusive rights granted to a Sequiam OEM client
where such client purchases contractual exclusive rights to that
product
by paying its development costs.
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As
described in Article 2
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9
EXHIBIT
B
Manufacturer's
Warranty
I. Limited
Warranty.
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(A)
|
Manufacturer
warrants to Distributor that it has right, title, and interest in
Product(s) to rightfully transfer to the Distributor free of any
liens and
that Product(s) furnished will be new, merchantable, free from defects
in
material and workmanship, and will conform to and perform in accordance
with respective Product specifications for one (1) year from the
date of
delivery. Should the Products not perform according to applicable
Product
specifications Manufacturer shall repair or replace the Product,
at
Manufacturer's sole cost and
expense.
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(B)
|
Disclaimer
of Warranties.
EXCEPT FOR THE LIMITED WARRANTIES SET FORTH IN SECTION 10.1.1 AND
IN THIS
EXHIBIT B, MANUFACTURER MAKES NO WARRANTIES OR REPRESENTATIONS TO
DISTRIBUTOR OR TO ITS END-USER CUSTOMERS WITH RESPECT TO THE PRODUCTS,
THE
PERFORMANCE OF THE PRODUCTS, THE DOCUMENTATION PROVIDED WITH RESPECT
TO
THE PRODUCTS, OR ANY SERVICES PROVIDED HEREUNDER. MANUFACTURER EXPRESSLY
DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND, CONCERNING THE
PRODUCTS, DOCUMENTATION AND SERVICES, WHETHER EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR ANY OTHER EXPRESS OR IMPLIED WARRANTY,
WHETHER
ARISING IN LAW, CUSTOM, CONDUCT OR
OTHERWISE.
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(C) Neither
Distributor nor its sales representatives, agents or third party Distributors
or
Marketers
has the authority to make or bind Manufacturer to any affirmation, warranty,
guarantee,
or representation, whether written or oral, concerning the
Products.
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(D)
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Defective
Product(s) in warranty will be returned to Distributor for Tier 1
repair
or replacement, Distributor may choose to charge reasonable fees
for this
service to the end user. The Distributor shall notify the Manufacturer's
Customer Service Organization to describe the nature of the defective
product for technical support. Manufacturer will provide electronic
or
telephonic technical support for troubleshooting defective product
at no
charge. If repair expense to the distributor exceeds 25% of the amount
distributor paid manufacturer for the product the Manufacturer will
assess
the problem and provide shipping instructions including assigning
a return
goods authorization number (RGA) to facilitate the shipment of the
defective Product back to the Manufacturer. Unless otherwise agreed
by the
Manufacturer and the Distributor, Manufacturer shall complete repairs
and
ship repaired Product(s), or replace Product(s), within fifteen (15)
business days of receipt of defective Product(s) at Manufacturer
factory
location in the Continental United States. The Distributor shall
bear the
risk of in-transit loss or damage up to the point the Product(s)
is placed
in the possession of the carrier and Manufacturer shall bear the
cost of
transportation charges for shipment to Manufacturer of the Product(s)
to
be repaired or replaced. For return shipments from Manufacturer to
Distributor, Manufacturer shall bear the risk of in-transit loss
or damage
and shall prepay and bear the cost of transportation charges for
shipment
of the Product(s) which has been repaired or replaced. If the Product(s)
returned is not defective or is not in warranty, Manufacturer shall
promptly advise Distributor in writing of this. In such cases,
Manufacturer shall either (1) return the Product(s) to Distributor
at
Distributor's expense and risk in its "as-received" condition or
(2)
repair the Product(s) if so instructed by Distributor in writing
and
charge Distributor for labor, parts, and shipping in accordance with
Article II "Repairs Not Covered under
Warranty."
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10
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(E)
|
Any
replacement, repair, modification, installation, or other service
performed by Manufacturer shall be warranted, commencing with the
date
upon which repaired Product(s) is returned to Distributor for the
remainder of the unexpired period of the warranty or ninety (90)
days,
whichever is greater.
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(F) The
warranties herein do not extend to Product(s) to the extent that such Product(s)
have
(1) been
subject to misuse, neglect, accident, or abuse not caused by
Manufacturer;
| (2) |
been
wired, repaired, or altered by anyone other than Manufacturer without
Manufacturer's approval;
|
(3) been
improperly used by any personnel, including Distributor and
Customer;
|
(4)
|
been
used in violation of the appropriate written instructions furnished
to
Distributor; or
|
| (5) |
been
subjected to improper temperature, humidity, or other environmental
conditions, and such action is the cause of the damage or
malfunction.
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| II. |
Repairs
Not Covered under Warranty
|
(A)
Any
defect that requires less than 25% of the distributor cost to purchase the
product to repair.
(B) In
addition to repairs provided for under the "Warranty" section of this
policy.
(C) Repair
pursuant to this Article II shall be performed and billed at Manufacturer's
prevailing repair charge rates.
11