Territorial Sub-Distributor Agreement
EXHIBIT
10.10
This
Agreement entered into as of the 14th
day of
December, 2005, between Power Quality Holdings, Inc. which, with its successors
and assigns, is hereafter called PQH, having its principal place of business
at
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and NUCON, Inc. having
its
principal place of business in the United States at ▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
(hereafter called “Sub-Distributor”).
PQH
and Sub-Distributor agree as follows:
| 1. |
Definitions
|
|
(a)
|
Products:
Environmental
Potentials (EP) brand products sold to NUCON by PQH as listed in
Attachment “A”.
|
|
(b)
|
Sales
Market & Territory:
The territory of the Russian Federation as listed in Attachment
“B”
|
|
(c)
|
Sales
Quota:
The periodic sales quota for products for the territory initially
set
forth in Attachment “C” and each subsequent sales quota of which PQH shall
notify Sub-Distributor and which Sub-Distributor either accepts
or does
not object to in writing within 30 days of PQH’s
notification.
|
|
(d)
|
Territorial
Sub-Distributor:
The Sub-Distributor for a specific territory in which all other
Sub-Distributors in that region receive technical support, sales
training,
and customer service.
|
| 2. |
Appointment
|
PQH
hereby appoints Sub-Distributor and Sub-Distributor accepts appointment as
PQH’s
Territorial Sub-Distributor (hereafter called Sub-Distributor) for the resale
of
products to customers in the sales market located in the Territory of the
Russian Federation and for the servicing of EP Accounts in the Territory
of the
Russian Federation.
| 3. |
Sales
|
Sub-Distributor
agrees to promote the goodwill and name of EP and to do everything in its
capacity to further the interest of EP. Sub-Distributor undertakes and agrees
to
purchase and sell to customers situated within the Territory (attachment
“B”),
products having a total quantity (determined by the amount invoiced to
Sub-Distributor by PQH) of Sub-Distributor’s Sales Quota (attachment “C”). In
determining whether Sub-Distributor meets its sales quota, PQH shall review
the
net amount of products invoiced by PQH purchased by Sub-Distributor and sold
by
Sub-Distributor to customers located within the Territory. Sub-Distributor
will
not sell products to anyone other than a customer located within the Territory
whose vertical market characteristics are within the sales market.
| 4. |
Responsibilities
of Sub-Distributor
|
| (a) |
Sub-Distributor
agrees to promote the goodwill and name of EP and PQH and do everything
in
its capacity to further the interest of EP and PQH.
|
| (b) |
Sub-Distributor
will provide sales support services as reasonably requested by
PQH to
sales leads provided by PQH. Services will be provided in a timely
and
workmanlike manner so as to promote the goodwill of PQH, sales
of the
Products, and to further the interest of PQH.
|
| (c) |
Products
sold by Sub-Distributor will be invoiced for remittance prior to
shipping.
Upon receipt of invoice, it is Sub-Distributor’s responsibility to remit
20% of the cost of products FOB Utah EP warehouse and to identify
the
specific shipping date, and to adhere to the Net 30 Days terms
extended by
PQH from the date of shipment for the remaining and final payment.
|
| (d) |
Sub-Distributor
agrees to maintain product liability insurance, and shall provide
PQH with
current certificates of “Proof of Liability Insurance”.
|
| (e) |
Sub-Distributor
may appoint qualified agents to support its sales efforts in different
locations within its territory.
|
| (f) |
Installation
of Products is the responsibility of Sub-Distributor in conjunction
with
their prospective end user client or Sub-Distributor’s agent. PQH will
give installation instructions to a certified, licensed resource
to
provide these services, but any interruption in end user or agent
process
is the sole liability to be determined in the proposal between
Sub-Distributor and end user or agent.
|
| (g) |
Sub-Distributor
agrees to provide PQH with current copies of their resale tax certificate
and agrees to be responsible for all local and state & Federal sales
taxes.
|
| (h) |
Sub-Distributor
will compile a monthly forecast of sales opportunities containing
end user
contact information, critical business issue to be addressed with
Products
from PQH, description of phase in the sales process, estimated
project
value, timeframe to close, and percentage weight of opportunity
closure.
PQH will supply a template for this monthly update. Sub-Distributor
may
repurpose the format, but must include all of the components identified
above.
|
| (i) |
Sub-Distributor
will provide PQH with a business plan for the first 24 months of
business
within 60 days hereinafter.
|
| 5. |
Responsibilities
of PQH
|
| (a) |
PQH
will provide Sub-Distributor with reasonable quantities of product
brochures, marketing tools, and website updates as required. Environmental
Potentials, Inc (hereafter called EP) produces all materials in
house, and
retains the rights on all logos, Intellectual Property, patents,
trademarks, and copyrights. Reproduction of this material is strictly
prohibited without the written consent of
EP.
|
| (b) |
PQH
agrees to provide field training and sales assistance. This training
may
occur via conference call, training trips for Sub-Distributor
representatives to EP led training seminars in the United States
and/or
in-country (The Russian Federation) training by certified EP
representatives.
|
| (c) |
PQH
agrees to provide, maintain, and enforce a warranty from EP to
protect the
end user customers and prospects of Sub-Distributor.
|
| 6. |
General
Terms and Conditions
|
| A) |
Pricing
|
Except
as
otherwise provided in published programs issued by EP, all prices for Products
are F.O.B. the EP distribution facility as designated by EP. Sub-Distributor
shall bear all costs, insurance premiums, freight, and all other charges
and
expenses incurred after EP has placed the Products in the custody of a carrier
at the place of shipment to destination. See Attachment “A” for Product schedule
and Pricing. All
prices and discounts are subject to change upon 30 days notice of said price
change.
| (B) |
Delivery,
Risk of Loss, and Inspection:
|
| (a) |
PQH
shall not be liable in any respect for failure to ship or for delay
in
shipment of Products pursuant to accepted orders where such failure
or
delay has been due wholly or in part to shortage or curtailment
of
material, labor, transportation, or utility services, or to labor
or
production difficulty in EP’s plants or those of its suppliers, or to any
cause beyond EP’s control or without EP’s fault or negligence.
|
| (b) |
Title
to and risk of loss of the Products shall pass to Sub-Distributor
end user
upon EP placing such Products in the custody of a carrier for shipment
to
Sub-Distributor end user.
|
| (c) |
Within
ten (10) days following the date of receipt by the Sub-Distributor
end
user, end user shall inspect the Products and shall immediately
notify PQH
of any defects in the Products. Failure of Sub-Distributor or end
user to
notify PQH in writing of any defects in the Products within 10
days
following receipt shall be conclusive proof that the Products have
been
received without defects.
|
| (d) |
PQH
shall in no event have any responsibility for any damage caused
to the
Products during shipment. It shall be the sole responsibility of
the
Sub-Distributor or end user to file any appropriate claims for
reimbursement with the carrier.
|
| 7. |
Warranties
|
| (a) |
PQH
shall from time to time advise Sub-Distributor in writing of the
warranty
or warranties applicable to the Products. Sub-Distributor is expressly
prohibited from extending any warranty or warranties on behalf
of PQH or
EP to any person.
|
| (b) |
THERE
SHALL BE NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY
IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS OR ANY OTHER OBLIGATION
ON THE PART
OF PQH or EP WITH RESPECT TO ANY OF THE PRODUCTS EXCEPT THE WARRANTY
OR
WARRANTIES EXTENDED PURSUANT TO THIS PARAGRAPH.
|
| (c) |
In
any event and not withstanding anything herein to the contrary,
PQH’s
liability under any warranties shall be discharged by repairing
or
replacing any part or parts which may prove defective under normal
and
proper use, within the effective period of the warranty, if shown
to be
defective by proper evidence submitted to EP. PQH shall have no
liability
whatsoever for any incidental or consequential damages.
|
| (d) |
It
is expressly agreed that any and all warranties and/or guarantees
as
stated shall immediately cease and terminate, notwithstanding anything
herein to the contrary, in the event that any parts and/or structural
components or appurtenances thereto are altered or modified without
the
express written consent of EP.
|
| 8. |
Relationship
between Parties
|
This
agreement does not in any way create the relationship of principal and agent,
or
employer and employee between PQH and Sub-Distributor, and under no
circumstances shall Sub-Distributor be considered to be the agent or employee
of
PQH. Sub-Distributor shall not act, or attempt to act, or represent itself
directly or by implication, as agent or employee of PQH, or in any manner
assure
or create, or attempt to assume or create, any obligation on behalf of or
in the
name of PQH and will not make any representations, guarantees, or warranties
on
behalf of or in the name of PQH with respect to the Products. Sub-Distributor
shall not use PQH or EP’s name, service ▇▇▇▇, or trademark without PQH’s and
EP’s written consent, except in connection with the sale of genuine EP Products.
| 9. |
Duration
of Agreement
|
The
term
of this Agreement shall be one year from the date hereof and may be renewed
for
additional one-year periods by each party hereto giving written notice of
such
intent to the other party. If after the expiration of the term hereof or
any
renewal period, the Agreement has not been renewed as above provided, then
the
Agreement shall continue in effect, except that it shall be terminable by
either
party, with or without cause, upon 30 days written notice to the other
party.
| 10. |
Termination
|
PQH
may
terminate this agreement by giving Sub-Distributor written notice, effective
60
days after delivery of written notice for any reason. In the event a termination
notice is issued to the Sub-Distributor, PQH will not accept purchase orders
for
any new business that was not listed on the Sub-Distributor’s previously
submitted pipeline report. The Sub-Distributor or end user will receive shipment
of equipment for any deal closed where the account was listed and discussed
with
PQH on previous pipeline report submittal for a period of 60 days after delivery
of written notice of termination. Following the 60 day period after the
termination notice is issued, PQH reserves the right to extend this time
frame
if necessary.
| 11. |
EP
Certified Training Provider
Qualification
|
Sub-Distributor
agrees to qualify as an EP Certified Training Center and will abide by the
terms
substantially as set out in Attachment “D” to this agreement.
| 12. |
Governing
Law and Arbitration
|
The
laws
of the State of Nevada hereunder, shall in respects govern this agreement
and
performance. Any controversy or claim arising out of or relating to this
Agreement or a breach thereof, shall be settled by arbitration in Carson
City,
Nevada, in accordance with the rules of the American Arbitration Association,
and judgment upon the award rendered by the Arbitrator(s) may be entered
in any
court having jurisdiction hereof.
| 13. |
Entire
Agreement
|
This
agreement supersedes and cancels any and all prior agreements between the
parties hereto, express or implied, with respect to the purchase and sale
of any
of the Products. This Agreement sets forth the entire agreement between the
parties hereto; it may not be changed, altered, or amended except in writing
signed by both parties hereto.
| 14. |
Acceptance
|
Both
parties have executed this Agreement and initialed the appendices of this
Agreement, the day and year first written above and said date shall be deemed
the effective date of this Agreement.
In
witness whereof Power Quality Holdings, Inc., has made this Agreement and
affixed its Corporate Seal hereto in the presence of its duly authorized
officer
in that behalf on the 16th day of November, 2005.
| Power Quality Holdings, Inc. |
(affix
corporate seal here)
|
/s/
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
President,
Managing Director
Power
Quality Holdings, Inc.
Federal
ID Number: ▇▇-▇▇▇▇▇▇▇
| NUCON, Inc. |
(affix
corporate seal here)
|
/s/
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Chief
Operating Officer
NUCON,
Inc.
Federal
ID Number: ▇▇-▇▇▇▇▇▇▇
/s/
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
Secretary
NUCON,
Inc.
Federal
ID Number: ▇▇-▇▇▇▇▇▇▇
Attachment
“A”
Products
schedule and Pricing
|
a.
EP-2500 $1,280.00
|
|
b.
EP-2000 $840.00
|
|
c.
EP-2050 $ Price not available at this
time.
|
|
d.
EP-2550 $ Price
not available at this time.
|
|
e.
EP-2700-A $750.00 (300VAC or below and single phase)
|
|
f.
EP-2700-B $850.00 (300VAC or below and three phase)
|
|
g.
EP-2700-C $950.00 (300VAC to 600VAC single phase)
|
|
h.
EP-2700-E $1,150.00 (300VAC to 600VAC three phase)
|
|
i.
EP-2750 $350.00 (Ground
Filter)
|
|
j.
EP-2200 $ Price not available at this
time.
|
|
k.
EP-2225 $ Price not available at this
time.
|
|
l.
EP-2250 $ Price not available at this time.
|
|
m.
EP-2275 $ Price not available at this
time.
|
|
n.
EP-2400 $ 850
|
|
o.
EP-2450 $475
|
|
p.
EP-2300 $ Price not available at this time.
|
|
q.
EP-2900 $ Price not available at this time.
|
|
r.
EP-2100
$ Price not available at this time.
|
*Discount
for Telephone, DSL, Cable, and Ethernet products is 10% at 50 units
*Prices
are good for first 50 units
*Orders
in excess of 50 units (entire order, not product specific) receive 10% discount
on gross order value
*No
discount applies to EP-2500 product line
All
prices are FOB Utah, USA in US currency
Prices
are subject to change upon 30 days notice of said price change.
Attachment
“B”
Territory
and Sales Market
Residences,
corporations, companies, and government agencies, comprising the territory
of
The Russian Federation, to include the Sales and Marketing Rights
to:
The
Russian Federation and all of its provinces contained therein. This is the
exclusive right to sell the EP products listed in Attachment “A” based on
maintaining sales quotas listed in Attachment “C” in the Russian Federation.
New
products may be added as available by EP based on Sub-Distributor’s ability to
sell new products.
Attachment
“C”
Minimum
Purchase Quotas
EP-2000
=
1 unit
EP-2500
=
1.5 unit
EP-2700
=
.5 unit
Monthly
sales volume with increases based on 3-month sales cycles
The
parties agree that PQH will ship 151 units to NuCon in December, 2005 and
that
NuCon shall sell said units and remit that portion of the proceeds there
from to
PQH pursuant to Attachment “A” hereto. Upon completion of the sales of said
units the parties agree to negotiate, in good faith, a purchase quota for
the
remainder of 2006 which purchase quota shall not be less than the purchase
quota
established by EP with PQH.
Attachment
“D”
EP
Certified Training Provider Qualification
This
schedule sets forth the terms for becoming an EP Certified Training
Provider.
|
1.
|
The
PQH Sub-Distributorship Agreement requires all Sub-Distributors
to qualify
as an EP Certified Training Provider. The Sub-Distributor must
qualify not
less than 3 individuals (hereafter referred to as Candidates) as
EP
Certified Trainers.
|
|
2.
|
Qualification
as an EP Certified Training Provider must be achieved within 6
months of
becoming a Sub-Distributor.
|
|
3.
|
To
qualify, each Candidate should attend training courses which will
take
place in Reno, NV at times to be
published.
|
|
4.
|
The
Manufacturer will provide the training for each Candidate. PQH
will pay
for the travel expenses of its Sub-Distributor’s
Candidates.
|
|
5.
|
PQH
will provide ongoing training support as required by Sub-Distributor.
|
|
6.
|
Sub-Distributor
agrees that no training on the use of EP Products will occur in
the
Sub-Distributor’s territory except by an EP Certified
Trainer.
|
|
7.
|
EP
quality assurance procedures will include the following:
|
|
·
|
Evaluation
of workshop content and instructor
performance.
|
|
·
|
Standard
EP workshop evaluation forms will be distributed and collected
at
workshops. The forms will be mailed to Environmental Potentials
Inc., ▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, together with
a list
of workshop participants and their contact
information.
|
|
·
|
Telephone
surveys will be conducted by EP at random to collect information
regarding
effectiveness of learning materials used and trainer instructional
practices.
|
|
·
|
Site
based visits may be made by EP Educational Staff on a regular basis
or
where concerns have been expressed by Sub-Distributors
.
|
Sub-Distributor
agrees that all curriculum materials are the property of EP and may not be
reproduced without the written consent of EP. Sub-Distributor will be entitled
to acquire curriculum material for resale to customers.