EXHIBIT 8.1.1
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STORED VALUE CARD
DISTRIBUTION AGREEMENT
THIS AGREEMENT is entered into this March day of 4th, 2005, by and between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Inc. ("MBI"), ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, and, CGS FINANCIAL TECHNOLOGIES INC ("Distributor"), ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇.
ARTICLE 1
DISTRIBUTORS
1.1 "Product": MBI Non-Hologram Stored Value Card-ATM Card upgradeable by
the end user to a Hologram Stored Value Card-ATM Card.
1.2 "Product Unit": 1 or 2 card "J Hook" package containing PIN based
non-hologram stored value cards to which cash can be added at retail locations.
1.3 "Stored Value Card System": A tool allowing retail locations to sell,
activate and perform Patriot Act compliance for issuers of the Product and to
load value on the Product.
1.4 "Manufacturer's Suggested Retail Price" ("MSRP"): The price of the
Product Units in United States Dollars, as set forth herein. MBI may change the
MSRP of any Product Unit from time to time. Any change to the MSRP of any
Product Unit will take effect upon 30 days prior written notice to Distributor.
1.5 "Distributor's Retail Network": Retailers of Product Units bound by a
distribution agreement with Distributor and selling to the end user of the
Product.
ARTICLE 2
GRANT OF DISTRIBUTORSHIP
2.1 MBI hereby grants Distributor and Distributor accepts for a term of xxx
year from the date hereof ("Term"), the non-exclusive right to distribute
Products in the United States of America, subject to the terms and conditions of
this Agreement.
2.2 Distributor shall use its best efforts to achieve maximum sales of
products and appears to establish an adequate retail network, consistent with
good business ethics and in a manner that will reflect favorably on MBI and on
the goodwill and reputation of MBI.
2.3 Distributor will maintain sufficient Product inventory to allow
fulfillment of any reasonable order from a retailer in Distributor's Retail
Network within 24 hours of receipt of the order.
ARTICLE 3
DISTRIBUTOR REQUIREMENTS
3.1 Distributor Foresees a Launch no less than 500 point of sale retail
locations.
3.2 Distributor Foresees a Purchase at least 5,000 Product Units within 30
days of the date hereof and an additional 10,000 Product Units annually
throughout the Term.
3.3 Provide retailers with information regarding the Stored Value Card
System and with set up, training and implementation of the Stored Value Card
System at Distributor's cost.
3.4 Shall provide to retailers a purchase or lease program for the hardware
necessary to implement the Stored Value Card System for retailers not having
hardware compatible with the Stored Value Card System.
3.5 Provide reasonable assistance to MBI in the implementation of the
necessary products and services to support the Product.
3.6 Provide advertising materials to the Distributor's Retail Network
promoting the Product.
3.7 Establish specifications for a launch plan for distribution of the
Product and inform MBI of the identity of Distributor's team leader responsible
for the launch of the distribution plan and the implementation of the Stored
Value Card System throughout Distributor's Retail Network.
3.8 Distributor acknowledges that implementation of the Stored Value Card
System throughout Distributor's Retail Network will require significant
involvement by Distributor's technical personnel. To implement the Stored Value
Card System Distributor shall:
(a) Define and implement a plan for the trial testing and loading of
the Product, including a timeline and anticipated dates of implementation.
(b) Provide appropriate information to all Distributors sales agents
and independent representatives sufficient for the sales agents and independent
representatives to market the Product.
ARTICLE 4
MBI REQUIREMENTS
4.1 Deliver Product Units to Distributor as required by Distributor and as
provided herein.
4.2 Provide basic telephone support and customer service to end-users of
the Product. Distributor may request that MBI provide additional technical
support to retailers, with pricing of such additional support to be determined
by MBI based upon the specific nature and time intensity of the support
requested.
4.3 Provide Distributor necessary software tools to load the Stored Value
Card System on compatible hardware owned or leased by the retailer.
4.4 Direct customers of Distributor's Retail Network to local participating
retailers in Distributor's Retail Network.
4.5 Provide Distributor with up to five days of training for Distributor's
sales staff on set up and implementation of the Stored Value Card System.
Training will consist of:
(a) Providing 5 Product Units to Distributor for training and testing
purposes.
(b) Work with Distributor's staff during the Product launch and Stored
Value Card System implementation to assist Distributor's staff in gaining an
adequate understanding of the Product and the Stored Value Card System.
(c) Provide training in the areas of transaction, reporting and other
operating procedures.
4.6 Upon the completion of training, MBI shall test the Product as
purchased through a Distributor's Retail Network retailer to ensure proper
functioning of the Stored Value Card System as implemented in Distributor's
Retail Network.
ARTICLE 5
ORDERS AND PRICING:
5.1 The Price per Product Unit is:
REFER TO EXHIBIT A AND B FOR VOLUME DISCOUNTS
The above pricing is based on a minimum order of 5,000 units. Orders
of less than 5,000 units will be priced per MBI's standard small order pricing,
as adjusted by MBI from time to time. In the event the product is a private
label program, the distributor shall be responsible to pre-pay xx%
(non-refundable) of the total order for the printing of private label cards.
Set-up fee for a private label program is $x,xxx.xx-$x,xxx.xx depending on the
program and specification.
5.2 The Manufacturer's Suggested Retail Price (MSRP) of the 1 Card Product
Unit is $xx.xx. The MSRP for the 2 Card Product Units is $xx.xx.
5.3 MBI will use its best efforts to fill Product orders as quickly as
possible following receipt by MBI of the written order (fax or e-mail shall
constitute a written order).
5.4 All shipments of Product will by F.O.B. ▇▇▇▇▇▇ Beaumont, and shall be
invoiced upon shipment to include all shipping cost. Each Invoice shall be due
and payable to MBI xxx COD and the balance in thirty days.
5.5 Each amount payable to MBI hereunder shall be paid in full, with no
deductions or offsets, and remitted in United States Dollars by check, money
order or deposit in such account at such financial institution as MBI shall from
time to time designate. Delinquent payments shall bear interest at the rate of
1.5% per month of the delinquent amount until paid, or the maximum interest rate
permitted by law, whichever is less.
5.6 In the event that any Product is superseded by a new version of the
Product, MBI shall give Distributor notice of such new version. Distributor may
obtain the new version of said Product on a Product Unit per Product Unit basis
by returning unsold Product Units of the superseded Product within thirty (30)
days of such notice from MBI. Upon return of unsold units, together with an
order for the new version of said superseded Product, MBI shall ship the
requested number of Product Units, subject to the provisions of this Article,
and provided that Distributor shall bear the costs of shipping and handling,
together with any difference between the Price for the superseded Product Unit
and the Product Unit Price for the new version of the Product.
5.7 In the event Distributor desires the assistance of MBI's technical
personnel in implementation of the Stored Value Card System or any upgrade
thereto, including the development of any software to increase the Stored Value
Card System's compatibility with the existing hardware in Distributor's Retail
Network, such assistance shall be provided pursuant to a separate agreement and
at pricing to then be determined by MBI.
ARTICLE 6
COMMISSIONS:
6.1 MBI shall pay the following commissions to Distributor:
REFER TO EXHIBIT A AND B
6.2 No Commission for any load fee shall be deemed earned until 100% of the
cash load and load fee have been paid by the retailer selling the Product load
into the retailer's MBI service account and such funds have been swept into an
account owned and controlled by MBI (the "MBI Sweep"). MBI will not activate any
load on any Product until such time as the MBI Sweep has occurred.
6.3 Commissions shall be paid within 15 days following the end of the month
in which such commissions were earned. MBI shall provide Distributor with a
monthly reconciliation of commissions earned and paid, or more frequently, if
reasonably requested by Distributor.
6.4 Distributor shall be responsible for any commissions or other payments
to retailers in Distributor's Retail Network and MBI shall have no
responsibility for such payments. Distributor shall indemnify and hold harmless
MBI against any claim, cause of action, liability or judgment, including
attorney's fees, arising from any retailer in Distributor's Retail Network for
non-payment of any commission or fee due to the retailer from sales or service
of the Product.
ARTICLE 7
INTELLECTUAL PROPERTY RIGHTS
7.1 MBI represents to Distributor that it owns or has a license to all of
the material contained in the Products and that, to the best of MBI's knowledge,
said Products do not infringe upon any copyright, patent, ▇▇▇▇ work, trademark
or other proprietary right of any third party and that MBI has full authority to
enter into this Agreement.
7.2 Distributor shall have no rights to duplicate, translate, decompile,
reverse engineer, or adapt Products without MBI's prior written consent.
7.3 Distributor shall promptly notify MBI of any unauthorized third party
duplication, distribution, or use of Products which comes to the attention of
Distributor and shall provide MBI with whatever reasonable assistance is
necessary to stop such activities.
7.4 Distributor shall not attempt to register any of MBI's trademarks,
company names, or trade names without MBI's written permission, nor shall
Distributor attempt to develop any products which contain the "look and feel" of
any Products, or of the Stored Value Card System.
ARTICLE 8
CONFIDENTIALITY
8.1 Distributor, on behalf of itself and its employees, shall take all
reasonable steps to safeguard the Products distributed by it from any
unauthorized use, duplication, sublicensing, or distribution.
8.2 Distributor shall further, on behalf of itself and its employees,
retain all Confidential Information furnished by MBI in strictest confidence and
shall not publish or disclose such Confidential Information at any time during
the term of this Agreement or after its termination.
ARTICLE 9
LIMITED WARRANTIES
9.1 MBI does not warrant that the functions contained in Products will meet
the requirements of any end user or that Products are error-free. However, MBI
does warrant that Products will operate substantially in accordance with the
user documentation. MBI shall further make reasonable efforts to correct any
significant reproducible error in Products or in the Stored Value Card System
for which MBI receives written notice promptly after such error comes to the
attention of Distributor, provided such error relates to the proper functioning
of Products and has not been caused by negligence on the part of Distributor or
any third party, hardware malfunction, or other causes external to the Products
in the Stored Value Card System.
9.2 MBI warrants that Products are free from defects in materials and
workmanship under normal use for a period of ninety (90) days from the date of
delivery by Distributor to the retailer. MBI's entire liability and
Distributor's sole and exclusive remedy, as well as that of any retailer and end
user, shall be replacement without charge of any Product Unit which proves
defective within the ninety (90) day period.
9.3 The warranties set forth in paragraphs 9.1 and 9.2 of this Article 9
shall also apply to any new versions of Products which Distributor distributes
in accordance with the terms and conditions of this Agreement.
9.4 THE WARRANTIES CONTAINED IN PARAGRAPHS 9.1, 9.2 AND 9.3 OF THIS ARTICLE
9 ARE IN LIEU OF ALL OTHER WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, THOSE OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. IN NO EVENT SHALL MBI BE LIABLE FOR DAMAGES, DIRECT OR
INDIRECT, INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY DISTRIBUTOR,
ANY RETAILER, END USER OR OTHER THIRD PARTY ARISING FROM BREACH OF WARRANTY OR
BREACH OF CONTRACT, NEGLIGENCE OR ANY OTHER LEGAL GROUND OF ACTION.
9.5 Distributor shall indemnify and hold MBI harmless from and against any
claims, expenses, losses or damages arising out of or in connection with
Distributor's distribution of Products.
ARTICLE 10
COMPLIANCE WITH LAWS
10.1 Distributor shall assure compliance with all applicable federal and
state laws and regulations governing its operations.
ARTICLE 11
RENEWAL OF AGREEMENT AND TERMINATION
11.1 This Agreement shall be automatically renewed for one (1) year periods
after the end of each one year term, unless either party gives written notice of
non-renewal to the other at least 30 days prior to the end of their current
term.
11.2 This Agreement shall be subject to termination at any time upon thirty
(30) days written notice by either party hereto.
11.3 This Agreement shall be subject to immediate termination for good
cause, at the election of MBI, by written notice to Distributor at any time in
the event of any one or more of the following:
(a) Any illegal, unfair or deceptive business practices or unethical
conduct whatsoever by Distributor, whether or not related to Products;
(b) A receiver, liquidator, trustee or like official is appointed for
Distributor or any substantial portion of its property or if Distributor shall
have filed or consented to any petition in bankruptcy or other insolvency
proceedings or shall have made any assignment for the benefit of creditors;
(c) The nonpayment, within fifteen (15) days past the due date, of any
financial obligation due from Distributor pursuant to Article 5 hereof; or
(d) Any default by Distributor in the due observance or performance of
any term or condition of this Agreement, other than that as specified in
subparagraph (b), and such default shall have continued for a period of thirty
(30) days after written notice specifying the same shall have been given by MBI
to Distributor.
11.4 Termination shall not extinguish any of Distributor's obligations
under this Agreement which by their terms continue after the date of
termination, including, but not limited to, the confidentiality obligations
under Article 8 above.
11.5 Termination shall not entitle Distributor to any compensation by MBI
on any grounds whatsoever, including, but not limited to, lost profits, loss of
goodwill, and consequential, direct, indirect, punitive or exemplary damages.
11.6 For a period of six (6) months after termination, Distributor shall
have the right to sell off existing stock of Products for which full payment has
been made.
ARTICLE 12
MISCELLANEOUS
12.1 Severability. If any provision or portion of this Agreement shall
become invalid or unenforceable for any reason, there shall be deemed to be made
such minor changes in such provision or portion as are necessary to make it
valid or enforceable. The invalidity or unenforceability of any provision or
portion hereof shall not affect the validity or enforceability of the other
provisions or portions hereof.
12.2 Entire Agreement. This Agreement, together with the attached
schedules, contains the entire agreement between the parties with respect to the
subject matter contained herein and supersedes any and all prior understandings
or agreements between the parties, whether oral or in writing. Any warranty,
representation, promise, or condition not incorporated herein shall not be
binding upon either party. No modification, renewal, extension, or waiver of
this Agreement or any of its provisions shall be binding unless made in writing
and signed by the parties hereto.
12.3 Independence of Parties. Nothing in this Agreement shall be construed
as creating a partnership or joint venture between the parties or making
Distributor an agent or employee of MBI. In all of its operations hereunder,
Distributor shall be an independent contractor, shall conduct its business at
its own cost and expense, and shall have no authority to make any representation
or warranty on behalf of MBI.
12.4 Governing Law. This Agreement has been negotiated and prepared and
will be performed in the United States, and the validity, construction and
enforcement of, and the remedies under, this Agreement shall be governed in
accordance with the laws of the United States and the state of Florida (except
any choice of law provisions of United States and Florida law shall not apply if
the law of a state or jurisdiction other than Florida would apply thereby),
except as to copyright and trademark matters which shall be governed by the laws
of the United States and any applicable international conventions.
12.5 Venue. Venue of any action brought to interpret or enforce this
agreement shall lie exclusively in the County of Sarasota, Florida, if the
action is brought in the courts of the State of Florida; and if brought in the
courts of the United States of America, in the Middle District of Florida, Tampa
Division.
12.6 Waiver. Failure or delay on the part of MBI or Distributor to exercise
any right, power or privilege hereunder shall not operate as a waiver thereof,
now shall any single or partial exercise of any right, power or privilege
preclude any other or further exercise thereof.
12.7 Notices. All notices, requests, demands, or other communications which
are required or may be given under this Agreement shall be in writing in the
English language and shall be deemed to have been duly delivered if sent by
first class registered or certified airmail, or by telex, facsimile or other
electronic transmission (confirmed by first class registered or certified mail)
and properly addressed to the appropriate party at the address set forth above,
until changed by notice in writing by either party hereto to the other party. If
sent by airmail, notice shall be effective fourteen (14) days from the date of
deposit with the post office. If sent by electronic transmission, notice shall
be effective one day after transmission.
12.8 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other party, nor is this
Agreement intended to confer upon any other person except the parties hereto any
rights or remedies hereunder.
12.9 Attorney's Fees. In any arbitration or litigation brought under this
Agreement or relating to any alleged breach of this Agreement, the prevailing
party shall be entitled to recover, in addition to all damages suffered, its
reasonable attorney's fees and costs.
IN WITNESS WHEREOF, MBI and Distributor each has caused this Agreement to
be executed on its behalf by its duly authorized officer.
MBI, INC.
________________________________ By:_______________________________
As its:___________________________
________________________________ Date:_____________________________
CGS FINANCIAL TECHNOLOGIES INC
________________________________ By:_______________________________
As its:___________________________
________________________________ Date:_____________________________
EXHIBIT A
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CARD COST/ COMMISSION AND FEES
▇▇▇▇▇▇ BEAUMONT PAYROLL PROGRAM
[REDACTED FOR CONFIDENTIALITY]
