EXHIBIT 10.6
------------
AGENCY AGREEMENT
This Agreement is made this 1st day of February, 2002,
By and Between
1. Esstec, inc., having its address at Santa Monica, California, U.S.A,
represented by Tariq Khan, an American National, holder of passport # VNO71659
(hereinafter referred to as the 'PRINCIPAL').
2. Elegant Set Up General Trading (Elegant Technologies Division), having
its address at P. O. Box No. 53144 Dubai, UAE, an establishment duly licensed
with the Dubai Economic Development Department with license No. 233229
represented by Mr. Faysal AIZarooni, UAE national, holder of passport # AO244042
(hereinafter referred to as the AGENT).
PREAMBLE:
- ---------
WHEREAS the PRINCIPAL is in the business of marketing various products and
services including but not limited to Trading and Information Technology
(hereinafter referred to as the PRODUCTS) and is desirous of appointing an AGENT
in the United Arab Emirates (Hereinafter referred to as the TERRITORY) to
promote the business development, sales, marketing, and distribution of its
products and has accepted to appoint Elegant Set Up General Trading Est.
(Elegant Technologies Division), as its AGENT within the said TERRITORY.
WHEREAS the AGENT willingly agrees and expresses its willingness to be the AGENT
for the PRINCIPAL to promote and market the products and assist the later to
promote the business subject to the terms and conditions appearing hereinafter.
The parties agree to the following
CLAUSE 1
- ---------
The preamble is considered as an integral part of this Agreement.
CLAUSE2 - APPOINTMENT
- -----------------------
The PRINCIPAL hereby appoints Elegant Set Up General Trading Est. (Elegant
Technologies Division), as its AGENT and DISTRIBUTOR for its various products
produced under the trade name Elegant Technologies including but not limited to
Esstec, inc.
CLAUSE 3 - TERRITORY
- -----------------------
The scope and territory of the Agreement shall be the United Arab Emirates. Both
parties may decide to extend the scope and territory of this agreement to cover
other territory by their mutual consent in writing.
CLAUSE 4 - EFFECT AND TERM OF THE AGREEMENT
- ---------------------------------------------------
This Agreement shall take effect as from the 1st day of February, 2002, and
shall continue thereafter for a period of 5 years. This Agreement shall be
deemed renewed automatically for a similar period or periods unless Agent
advises the Principal in writing by registered mail, facsimile transmission or
by first class international courier service of its intention to cancel or annul
this Agreement six months prior to its expiry date.
CLAUSE 5 - OBLIGATIONS OF THE PRINCIPAL
- ---------------------------------------------
The Principal shall to the best of its abilities:
a) At all times ensure and guarantee that the products supplied to the agent are
according to that produced under normal standard. The Principal shall also
guarantee that such products are free from any manufacturing defects and
undertake to replace any defective items when requested to do so by the agent.
The Principal shall be responsible for completion and delivery of product in a
timely manner as agreed in the contract with customers of Agent.
b) Provide the AGENT with such sales and marketing assistance as PRINCIPAL may
in its discretion consider necessary to assist the agent with the promotion of
the products, pursuant to its obligations under this Agreement.
c) The principal shall ensure the punctual supply of the products to the agents
territory except for reason of force majeur, act of God or act of State.
d) During the continuance of this Agreement, the PRINCIPAL shall refrain from
appointing any other Agent I Representative or Distributor for the same or
similar products within the territory without prior written disclosure of such
appointment.
2
e) The principal shall use his best endeavour to safeguard the rights hereby
granted to the agent and protect the later against any unlawful competition
occurring either by the willful act of any affiliated manufacturer of the same
or similar product or by other agents of the Principal in other territories.
f) Any contracts concerning the sale of any other products of the Principal
should be made by the agent as per the terms of this agreement.
g) For any project/contract entered by the Principal within the agents territory
and not within the scope of this agency, the Principal shall provide full
disclosure to the Agent in writing.
CLAUSE 6 - OBLIGATIONS OF THE AGENT
- -----------------------------------------
The AGENT shall:
(a) Use its best endeavours to promote the business of the Principal throughout
the TERRITORY and provide the Principal with all necessary advise and
assistance.
(b) The agent shall be in-charge of the sales within the Territory.
(c) The agent shall be responsible for clearing the goods from the customs and
ensure its safe distribution within the territory.
(d) The present rates, prices and mode of payment has been agreed upon as per
the annexed schedule which shall be considered as an integral part of this
agreement.
CLAUSE 7 - SALES TARGETS
- ----------------------------
The parties shall endeavour to agree on sales targets for Agent and these
suggested targets shall be entered on the schedule to this agreement. See
Exhibit A.
CLAUSE 8 - ADVERTISEMENTS
- ----------------------------
- - The principal shall, during the continuance of this agreement, furnish all
advertising materials to assist the agent promoting and marketing the products
subject to this agreement.
- - Expenses involved in advertising and promoting the Principal's products
shall be incurred by the Principal only with prior written approval of the
Principal.
CLAUSE 9 - TRADEMARKS
- -----------------------
The agent shall have the right to use the trademark/logo [E] or ESSTEC, INC. on
its stationery for representing and promoting the Principal's products.
CLAUSE 10 - TERMINATION
- --------------------------
Elegant Set Up shall have the right at any time, giving notice to the other to
terminate this agreement in any of the following events:
3
(a) If the other party commits a breach of any of the terms, conditions or
stipulations of this agreement. Having had thirty days (30) notice thereof and
having failed to remedy such breach.
(b) If the other party becomes insolvent or bankrupt or enter into any
arrangement with its creditors, or take or suffer any similar action in
consequence of debt.
CLAUSE 11 - ARBITRATION
- --------------------------
- - All disputes in relation to the interpretation or application of or any
matter relating to this agreement shall be referred to a single arbitrator to be
agreed upon by the parties.
- - If the parties are unable to agree as to the appointment of the arbitrator
within 15 days of either party giving to the other written notice of reference
to arbitration, each party shall within 15 days appoint one arbitrator and the
two arbitrators thus appointed shall agree upon a third arbitrator. If agreement
between the two arbitrators cannot be reached within 25 days from the date upon
which the last arbitrator is appointed, such third arbitrator shall be appointed
on application of either part to the Dubai Chamber of Commerce Industry.
- - The award made by the single arbitrator, all three arbitrators or a
majority thereof, as the case may be, shall be final and binding on the parties
and shall not be subject to appeal.
CLAUSE 12 - ASSIGNMENT
- -------------------------
Neither party shall sell, assign, subject or otherwise transfer its interest in
or any of its obligations or rights arising under this Agreement without
obtaining the prior written consent of the other party.
CLAUSE 13 - NOTICES
- ----------------------
Any notice to be given under this agreement shall be sent by facsimile
transmission or first class international courier service to the last known
address of each party and shall be effective on the date upon which it is
delivered at the address of the addressee.
CLAUSE 14 - AMENDMENT
- ------------------------
This Agreement may be amended only in writing by a document signed by both the
parties.
4
EXHIBIT A
Services rendered by Elegant Set Up (Elegant Technologies Division), hereinafter
referred to as Elegant, to Esstec, inc are as outlined below:
BUSINESS DEVELOPMENT
1. Elegant will obtain 3 Contracts from well reputed "Name Clients" for
IT development by Esstec.
Esstec, inc will submit the actual cost of the project and a 20% mark
up for profit. The actual contract price will be submitted to the
client by Elegant only after Esstec has submitted its cost and
expected profits in writing to Elegant.
2. Elegant will ensure that minimally 5 well reputed parties considered
to be "high profile" investors in the UAE community will purchase
Esstec stock when the company has its initial public offering.
3. Elegant will ensure that within 60 days of this agreement, 4 well
reputed parties considered to be "high profile" in the UAE community
will be shareholders when the company has its initial public offering.
COMPENSATION
300,000 stock options at $5.00 when Business Development Requirements 1-3 above
are met.
Additional maximal 300,000 stock options are to be given at the $5.00 value for
obtaining IT contracts for Esstec, inc. with the following formula:
The Dollar amount reached in contracts from Elegant to Esstec, inc. is to be
multiplied by 0.30 (30%) and the resulting value will be the number of stock
options at $5.00. Upon reaching $1,000,000 in Esstec contracts no additional
Stock options will be awarded for acquiring further contracts.
ESSTEC
Esstec - Provides technical know how and personnel to present the
product upon request from Elegant Technologies.
$8,500/month - Salary for 2 employees and peripheral expenses.
5
Two Board of Director Seats will be occupied -by members of the Board of
Directors of Elegant including the possibility of being the Chairman of the
Board.
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement the day
and year first above written.
SIGNED BY
PRINCIPAL ____________________________
MR. TARIQ KHAN
ESSTEC, INC
SIGNED BY
AGENT _____________________________
MR. FAYSAL ALZAROONI
ELEGANT SET UP GENERAL TRADING ESTB.
(ELEGANT TECHNOLOGIES DIVISION)
WITNESS ______________________________
MR. NASIR ZAFAR
6