DISTRIBUTION AGREEMENT
BY AND BETWEEN
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SUCCESS POS
AND
Q COMM INTERNATIONAL, INC.
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Executed on: 3/27/03
WHEREAS, Success POS a Florida-based Corporation, with its principal
offices located at 0000 XX 00xx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000 is a
Independent Sales Organization (ISO) maintaining point-of-sale distribution
channels (hereinafter referred to as "Success POS").
WHEREAS Q COMM International, Inc. a Utah corporation with principal
offices located at 0000 Xxxxx 0000 Xxxx Xxxx, XX 00000-0000 (hereinafter
referred to as " Q COMM ") holds ownership and trademark of a comprehensive
prepaid management system through its Qxpress(TM) Point-of-Sale activation
terminal ("Qxpress(TM)") and the Q COMM telecommunications network ("Qxpress
Services"); and
WHEREAS Q COMM desires to distribute Qxpress(TM) terminals in
conjunction with Qxpress Services to the point of sale vendors available to
Success POS through its distribution channels, and, mutually Success POS desires
to market and activate Qxpress(TM) terminals and Qxpress Services through its
available prepaid point-of-sale vendors.
NOW, WHEREFORE, IN CONSIDERATION OF MUTUAL COVENANTS AND PROMISES SET
FORTH HEREIN AND FOR OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND
ADEQUACY OF WHICH ARE HEREBY ACKNOWLEDGED, THE SIGNATORIES OF THIS DOCUMENT DO
HEREBY IRREVOCABLY UNDERSTAND AND AGREE AS FOLLOWS:
1.) After a series of initial negotiations, both parties have agreed
to all final drafts of Distribution Agreement for distribution of
Qxpress(TM) terminals and Qxpress Services to Success POS
point-of-sale vendors (hereafter called "Distribution Agreement")
if deemed necessary. This time period shall begin on the execution
day of this Agreement.
2.) Success POS shall undertake an immediate offering and placement of
Qxpress(TM) terminals and Qxpress Services (see Addendum "A" for a
copy of the Services & Rental Agreement and ACH Agreement). This
period shall commence on the executed day of this Agreement and
shall continue until this Agreement expires.
3.) All Qxpress(TM) terminals placed by Success POS are the sole
property of Success POS.. Any and all warranties either express or
implied or claims of merchantability on the Qxpress(TM) terminals
are the sole responsibility of Q COMM. All liability for
non-payment or non-sufficient funds for the Merchant account
remain the sole responsibility of Success POS.
4.) Success POS shall make no representations outside of those
provided by Q COMM regarding the Qxpress(TM) unit or Qxpress
Services during this test period.
5.) Q COMM shall receive as compensation from Success POS for all
Qxpress(TM) terminals purchased for delivery $495.00 per unit
(F.O.B. Utah. Success POS is responsible for all Qxpress terminals
and condition.
6.) Q Comm will receive 3% of the gross sale revenue through
Qxpress(TM) terminals for services rendered (see Schedule A). Q
Comm will conduct a weekly / daily ACH on all parties. This
percentage will be paid through that ACH process.
7.) Success POS requested an on site location programming process. To
accommodate the remote load, Q Comm will charge a $5.85 Account
Set-up fee per terminal. This fee will cover the software load,
account set-up; processing and product download to the on
location-installed terminal.
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8.) Products from the Q Comm Product Library (see Schedule B) are
available for use by ISO. Each wireless product provided on
consignment (from the Product Library) must generate $200.00 per
month per location in gross revenue. If this revenue level is not
met, Q Comm reserves the right to remove the product from the
Merchant's terminal. If the Merchant wishes to continue to have
that product on their Qxpress(TM)terminal, they will be
responsible for purchasing the inventory in advance for that
product. Success POS may bring carrier relationships and PINs for
Q Comm to manage exclusively for Success POS. Q Comm has a library
of products from which Success POS may select at his discretion.
9.) Q Comm will be charging $1.35 to any terminal that does not sell
at least $100 per week in retail sales. This weekly fee can be
charged to Success POS and or the retailer where the terminal is
located. It will be the responsibility of Success POS to notify Q
Comm who will be charged the weekly fee.
10.) Q COMM will grant Success POS exclusive marketing rights for
business-to-business infomercials, marketing a business
opportunity program and Success POS will grant Q Comm as the
exclusive terminal and processor used for Success POS terminal
needs. To receive the exclusive opportunity, Success OS must
purchase a minimum of 500 Qxpress terminals per month. If Success
POS does not meet the 500 per month terminal requirement, Q Comm
has the right to discontinue the exclusive business opportunity
offer. To ramp up for the first two (2) months of this agreement,
Success POS must purchase the first 500 terminals as outlined
below; thereafter Success POS must purchase 500 terminals per
month in order to maintain the exclusive grant.
o 150 terminals by April 14th, 2003
o 150 terminals by April 28th, 2003
o 200 terminals by May 26th, 2003
11.) Success POS will be responsible for customer service calls dealing
with all products offered on the Success POS Qxpress terminals.
All terminals shipped for Success POS will have the Success POS
overlay and customer service number. Q Comm will be responsible
for handling all customer service calls dealing with the
operations and installation of the Qxpress terminal. All customer
service calls will come into Success POS customer service
department, and if needing assistance from Q Comm for terminals
operations, the call will be forwarded to Q Comm where a Q Comm
customer service representative will handle the call.
12.) This Agreement shall be governed by International law and the
governing law of the state of Utah, without any regard to conflict
of law principals, The Parties further agree that any and all
controversies arising from this Agreement shall be submitted
binding arbitration pursuant to the rules of the American
Arbitration Association and be settled with finality through
arbitration by the American Arbitration Association.
13.) Except as otherwise set forth herein, no express or implied
license or other right of any kind are granted to Success POS
regarding the POS terminals or the POS System and Success POS
acknowledges that the POS Systems and all right, title and
interest therein, including without limitation any copyright,
patent, trade secret or other intellectual property right in and
to the POS System are the sole property of Q Comm. Except as
otherwise set forth herein, Success POS may not (i) modify, adapt,
translate, reverse engineer, decompile or disassemble the POS
System Software (except to the extent applicable law specifically
permits such activity); (ii) create derivative works based on the
POS System Software; (iii) except as otherwise agreed by Q Comm,
reproduce or make copies of the POS System Software or any part
thereof except for backup for archival purposes; (iv) market,
sell, distribute or transfer the Terminal Software or any part
thereof to any third party except Retail Dealers, or permit any
third party to use the POS Software without Q Comm's prior written
consent; (v) sublicense or otherwise transfer the POS System
Software to any other distributors, sub-distributors or resellers;
(vi) transfer the POS System Software or POS Terminals to any
Retail Dealers which Success POS knows or reasonably ought to know
is purchasing it for export from the Territory; or (vii) rent or
timeshare the POS System Software. Q Comm reserves all rights not
expressly granted herein. Success POS agrees not to reverse
engineer, disassemble, decompile or otherwise attempt to derive
source code, trade secrets, programming concepts or methods or
Confidential Information from the POS System Software. Any breach
of this Section shall be deemed a material breach of this
Agreement.
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14.) Each party represents and warrants to the other party that it is
under no current obligation or restriction, nor will it knowingly
assume any such obligation or restriction that does or would in
any way interfere or conflict with, or that does or would present
a conflict of interest concerning the performance to be rendered
hereunder or the rights and licenses granted herein.
15.) This Agreement may be dissolved only by written consent of both
Parties under this Distribution Agreement or any similarly
constructed written Agreement between the Parties that
specifically incorporates and dissolves this Agreement in its
recitals.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seal on
this 27th day of March, 2003 and that this date shall be the Executed Date of
this Agreement.
Q COMM International, Inc. Success POS
Signature /s/ Xxxxxxx Xxxxxxxx Signature: /s/ Xxxxx Xxxx
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Print: Xxxxxxx Xxxxxxxx Print: Xxxxx Xxxx
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Title: President Title: CEO
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Schedules
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A = Fees & Services
B = Q Comm Product Library
C = Services & Rental Agreement (Merchant)
D = ACH Agreement (ISO & Merchant)
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Schedule A
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Fees & Services
Executive Summary - Fees
1. Data Center Fee 3% (If purchasing terminals)
2. Programming Fee $5.85 per terminal, includes remote downloads
3. Performance Minimum Required $100.00 / terminal / week, if not $1.35
weekly fee
4. Agreement Term 2 years, with an automatic renewal.
5. Qxpress(TM)200 Sale price per unit - $495.00*
*Must be an order over 500 terminals to receive quoted price
Service Overview
1. Q Comm Data Center will support all Qxpress(TM) terminal hardware in
the delivery of prepaid services. Q Comm will receive 3% of all gross
revenue. This feel will include the following Support Services:
(a) Data Base Administration & Management, Terminal Customer Service
New account set-up, updating / maintenance of all accounts,
current to the day, programming terminals.
(b) Billing / ACH
Electronic fund collection from all parties per contract with
disbursement to all participants in the distribution channel. ACH
is schedule on a weekly or daily basis per contract. ACH must be
daily if supporting prepaid MasterCard and/or if daily gross
revenue exceeds $500.00.
(c) Reporting
Web & electronic reporting of all transactions for each member of
the distribution channel. Custom reporting is available.
(d) Product Management
Create new products, edit existing products, adding to existing
products, removing existing products.
(e) Pin Management
Add PINs to new products, add PINs to existing products, provide
PIN status reports by product, alert Distributor / ISO when PINs
are low.
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Schedule B
Q Comm Product Library
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Product Margin to ISO Price Notes
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Calling Card - 1.0(cent)/ Min U.S. 42% 1.0(cent)/ min U.S. 59(cent) connect fee / 50(cent)
Monthly Mtc.
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Calling Card - 5.9(cent)/ Min U.S. 40% 5.9(cent)/ min U.S. Flat rate, no connect fee /
No mtc. fee
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Calling Card - 10.8(cent)/ Min Mexico 42% 10.8(cent)/ min Mexico No connect fee / 99(cent)
Monthly Mtc.
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AT&T Prepaid Long Distance 33% $4.00 - 30 min No expiration period
$7.00 - 60 min
$25.00-300 min
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Pennies Rule - AT&T Long Distance 38% 1.9(cent)/ min U.S. 79(cent) connect fee / 12(cent)
Weekly Mtc.
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Verizon Airtime 20% $30 - 35(cent) Additional Fee for roaming
$50 - 30(cent)
$75 - 28(cent)
$150 - 25(cent)
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Cingular Airtime 25 1/2% $10 - 50(cent) Additional fee for roaming
$20 - 40(cent)
$30 - 35(cent)
$50 - 30(cent)
$100 - 25(cent)
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AT&T Airtime 22% Local Plan National Plan
$25 - 35(cent) $25 - 65(cent)
$50 - 30(cent) $50 - 50(cent)
$100 - 25(cent) $100 - 35(cent)
$200 - 15(cent) $200 - 25(cent)
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T-Mobile Airtime 15% $10 - 30 min. Additional fee for roaming
$25 - 100 min.
$50 - 250 min.
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Home Dial Tone - Reconex 22% $52.99 Monthly fee $39 Activation fee
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PrePaid MasterCard 40% - Activation fee $9.95 - Activation $4.95 - Refresh fee
fee
80% - Refresh fee Minimum initial Denominations
purchase-$20 (plus $20-$50-$100-$200-$400
activation fee)
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Sprint PCS "PreCash" Payment Loading fee Options Loading Fees Each store can choose what
$3.00 fee $.75 comm. $3.00 $4.00 the load fee charged to
$4.00 fee $1.50 comm. $5.00 the consumer
$5.00 fee $2.00 comm.
To be split with retailer
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*Margin to ISO is the total percentage available to ISO less any commission
percentage(s) set forth in this Memo of Agreement and the Merchant's "SERVICES
AND RENTAL AGREEMENT".
*The price and terms of this Agreement are good for 30 days without a signature.
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Schedule C "Sample"
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Services & Rental Agreement and ACH Agreement
This Agreement is made this _____day of__________ ,2003 by and
between_____________ (the "Merchant") and Q COMM, Inc. Q COMM Inc. is a wholly
owned subsidiary of Q COMM International, Inc. Qxpress Management System
("Qxpress(TM)") is a point-of-sale printing device for prepaid service. The
Merchant wishes to utilize the Qxpress(TM) Device for their phone card,
wireless, and any additional prepaid services as available for sales at their
designated location(s). A list of the locations is attached to this Agreement
and incorporated herein by reference.
IN THE EVENT OF A DISPUTE, THIS AGREEMENT IS SUBJECT TO ARBITRATION
AND MEDIATION.
1. The term of this agreement is two (2) years during which Q COMM, Inc. will
provide Qxpress(TM) to the Merchant at a weekly rental fee of $______. The
Merchant is required to produce a weekly minimum of $300.00 in gross prepaid
card revenue. If this minimum is not met, a service fee of $8.95 will apply.
This service fee will be included in the ACH accounting each week that
performance falls below the minimum. The service fee will commence the second
Monday following the shipment of the Qxpress(TM) terminal. Optional ACH reports
are available to the Merchant upon request for a $2.00 charge. Blank cards will
be provided by Q Comm at a cost of $0.10 per card ($25 per box of 250 cards).
Product shipment is F.O.B. Utah.
2. Q Comm will collect funds from Merchants on a _______ basis through an ACH.
If a client is placed on a weekly ACH initially and their daily sales exceed
$500/day in gross revenue for an individual unit, the client will be
automatically switched to a daily ACH.
3. Compensation: Q COMM, Inc. will compensate the Business for prepaid telecom
revenues as per the following:
Product Description Percentage Product Description Percentage
------------------- ---------- ------------------- ----------
---------- -------% --------- -------%
---------- -------% --------- -------%
--------- -------% --------- -------%
4. Qxpress(TM) is and shall remain the sole property of Q COMM, Inc., and shall
be surrendered on demand if the terms of this agreement are violated.
5. Q COMM, Inc. reserves the right to remove a Qxpress(TM) from a location if
sales in that location do not warrant the Qxpress(TM) placement.
6. The Merchant shall provide the following: 1) a safe and secure place for the
Qxpress(TM) to be located, 2) a grounded power outlet, 3) phone line access, and
4) a point-of-sale material location.
Merchant:
The Merchant's store name: ____________________________________________________
The Merchant's store address: _________________________________________________
City/State/Zip: Success:______________________________________________________
The Merchant's store telephone number: _________________________________________
The Merchant's store fax number: _______________________________________________
The phone number the terminal will be set-up on:________________________________
The Merchant's store Email address:_____________________________________________
Owner/Officer: (print):_________________________________________________________
Owner/Officer: (signature):_____________________________________________________
Q COMM, Inc.
Representative:_________________________________________________________________
ORIGINALS MUST BE SENT TO Q COMM, INC.
7. Q COMM, Inc. will provide standard point-of-sale materials at it's own
expense. Private labeled point of sale material can be provided by Q COMM, Inc.
at the Merchant's expense. The Merchant can provide their own point of sale
materials subject to approval by Q COMM, Inc. (Q COMM, Inc. must assure that any
advertising meets FCC or Public Service or Utility Commission Guide lines).
8. Qxpress(TM) shall remain at the location it is initially located in and shall
not be moved without prior approval from Q COMM, Inc. (a fax or E-mail with
receipt confirmed shall also serve as notice).
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9. PAYMENT: Weekly or daily, an agreed upon account will be debited by Automated
ClearingHouse (ACH) or Electronic Funds Transfer (EFT) (herein after referred to
as the "debit"). The debit will be initiated by Q COMM, Inc. If debit is refused
by The Merchant's bank, Qxpress(TM) will be turned off until the debit is
honored and a service fee of $25.00 for insufficient funds will be assessed
before Qxpress(TM) is reactivated. Two refused debits will cause this Agreement
to be terminated immediately without notice. Any fees incurred by Q Comm in
order to collect unpaid debits, including but not limited to collection agency
fees, attorney's fees and court costs, will be added to the amount Q Comm is
entitled to receive from The Merchant. Interest at 18% per annum will also be
added to unpaid debits.
10. In the event Qxpress(TM) malfunctions, the store clerk or manager will call
Qxpress Client Services at (000) 000-0000. If the Qxpress cannot be repaired
with instructions over the phone or by phone updates, Q COMM, Inc. will send a
replacement unit via overnight delivery.
11. Any disputes between The Merchant and Q COMM, Inc. that cannot be resolved
will be submitted to arbitration under the rules and regulations of the American
Arbitration Association. Either party may invoke this paragraph after providing
10 days written notice to the other party. All cost of arbitration shall be
divided equally between the parties. Any award may be enforced by a court of
law. Dispute mediation, or arbitration will be handled at the specific court
located in the county of Utah, State of Utah.
12. ENTIRE AGREEMENT: This is our entire agreement and cannot be changed unless
agreed to in writing by both parties.
13. FORCE MAJEURE: If any part of this agreement is invalidated by local,
county, state or federal rules or regulations, or a court of law, the balance of
this agreement will remain valid.
14. TAXES: Q COMM, Inc.'s carriers are responsible for collection and payment of
Federal excise and applicable State taxes unless the local, county or State
laws, rules, and regulations require that the taxes be collected at the time of
sale and reported to the taxing authorities by the Merchant. Taxes may be
collected from the card user on a per call or per minute basis. There may be
taxes that Q COMM, Inc. will collect and pass through to The Merchant. Any
additional taxes levied by Federal, State, or local entities will be passed on
to The Merchant. Any taxes collected by The Merchant will be their sole
responsibility to remit to proper taxing authorities. This statement is not
advice on the collection or reporting of taxes and we suggest that each Merchant
contact their CPA, Accountant or taxing authority in their states for the
correct taxes or reporting of same from the sale of any Prepaid
Telecommunication Product.
15. DIAL AROUND: The FCC in October 1997 mandated that all 800 or 888 calls from
a pay phone be compensated to the pay phone owner. A surcharge ($.49) may be
added to each call for toll free access from a pay phone. The Merchant is not
responsible for collecting and paying these dial around charges.
16. RETURN GOODS POLICY: All returned goods must be authorized by Q Comm, Inc.
using a Return Goods Authorization "RGA" form. All returned goods commissions,
Broker and Merchant, will be charged back to the appropriate commissioned party
on the next ACH cycle. The Broker will be responsible for the Merchant interface
on all claims. This policy does not apply to phone cards or airtime cards, as
there is a no refund-no return policy on all cards generated by Qxpress(TM). A
restocking fee of 15% will be applied to all returned goods. This fee will be
deducted from the ACH credit on the cycle following the receipt of goods. The
RGA # must be visible on all returned good shipments in order to be accepted.
17. TRANSFER OF RIGHTS OR ASSIGNMENT: 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 is obtained.
18. WARRANTIES: Neither party makes any warranties with respect to the use of
Qxpress(TM) by either party or by any third party. In no event will Q COMM, Inc.
be liable for direct, indirect, incidental, or consequential damaged, that are
in any way related to Qxpress(TM) or its carriers.
19. TERMINATION: This Agreement can be terminated by Q COMM, Inc. by providing a
thirty (30) day advance written notice. The Merchant can terminate with 30 days
advance written notice if the terms of this agreement are not being met.
20. GOVERNING LAWS: This Agreement is governed by the laws, rules and
regulations of the State of Utah.
21. EXCLUSIVITY: The Merchant agrees that during the term of this agreement Q
COMM, Inc. shall be the sole provider of phone cards and Prepaid Wireless to all
their retail locations.
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[Q COMM LOGO]
Schedule D "Sample"
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ACH AGREEMENT
Authorization and Agreement for Automated Clearing House (ACH) Debits and
Credits
Company Name:___________________________________________________________________
Company Address:________________________________________________________________
I (we) authorize: Q COMM International, Inc. herein after called "Company", to
initiate credit and/or debit entries and adjustments for any credit entries in
error to my (our) checking account indicated below and the depository named
below, herein after called "Depositor", and to credit and/or debit the same such
account.
Depositor name (Bank name):_____________________________________________________
Bank Address: Success:__________________________________________________________
City, State and Zip or Postal Code:_____________________________________________
Bank Phone Number: ___________________________ Fax Number: _____________________
Bank Service Representative: ___________________________________________________
ACH Routing/Transit/ABA # (9 digits): __________________________________________
Account Number:_________________________________________________________________
This authority is to remain in full force and effect until Company has received
written notification from me (us). In consideration of personal benefits flowing
unto me, I hereby do guarantee payment for Success POS_____ (Name of Business)
to Company in accordance with the terms stipulated herein.
By: _______________________________ By: Q COMM Inc.
(Please Print)
Its: ______________________________ Client Mgr: ____________________________
(Title)
Signed: ___________________________ H O: ___________________________________
Date: _____________________________ Date: __________________________________
PLEASE VERIFY YOUR ACCOUNT NUMBER AND ACH ROUTING NUMBER WITH YOUR BANK. ATTACH
A VOIDED CHECK TO THIS FORM. NO DEPOSIT SLIP.
Any errors and/or disputes must be corrected within two banking days of the
initiating transaction. Thank you for your confidence and trust.
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