UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-SB12G/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS Under Section 12(b) or (g) of the Securities Exchange Act of 1934
PRETORY USA, INC.
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(Name of Small Business Issuer in its Charter)
NEVADA 33-0780055
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(State or Other Jurisdiction of Incorporation) (IRS Employer Identification No.)
161 WEST 54 TH STREET, SUITE 602, NEW YORK NY 10019
------------------------------------------ --------
(Address of Principal Executive Offices) (Zip Code)
212-707-8661
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(Issuer's telephone number)
Securities Registered under Section 12 (b) of the Exchange Act:
Title of each class Name of each exchange on which
to be registered each class is to be registered
------------------- ------------------------------
NONE NONE
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.001
-----------------------------
(Title of class)
Page 1 of 64
Table of Content
PART III
Page No.
Item 1. Index to Exhibits 2
Item 2. Description of Exhibits 3
Signatures 64
FDS 65
ITEM 1. INDEX TO EXHIBITS
- -------------------------
The exhibits listed and described below in ITEM 2 are filed herein as the part
of the Registration Statement.
ITEM 2. DESCRIPTION OF EXHIBITS
- -------------------------------
Exhibit No. Description Page
3.1 Articles of Incorporation of Pretory USA, Inc. 3-7
3.2 By-Laws of Pretory USA, Inc. 8-14
10.1 Agreement of Transfer dated August 15, 1997
with Pretory, SARL, et al. 15-19
10.2 Share Exchange Agreement dated as of September 12, 1997
by and between Pretory, S.A. and Pretory USA, Inc. 20-32
10.3 Distribution Agreement with Cortez 33-34
10.4 Distribution Agreement with Securetec 35-50
10.5 Distribution Agreement with ITI 51-61
10.8 Demining Agreement: NPA 62-63
Ex-27 FDS 65
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
JUN 27 1997
No. 13866-97
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
ARTICLES OF INCORPORATION
OF
PRETORY USA, INC.
FIRST. The name of the corporation is:
PRETORY USA, INC.
SECOND. Its registered office in the State of Nevada is located
at 2533 North Carson Street, Carson City, Nevada 89706 that this
Corporation may maintain an office, or offices, in such other place
within or without the State of Nevada as may be from time to time
designated by the Board of Directors, or by the By-Laws of said
Corporation, and that this Corporation may conduct all Corporation
business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as
well as within the State of Nevada
THIRD. The objects for which this Corporation is formed are: To
engage in any lawful activity, including, but not limited to the
following:
(A) Shall have such rights, privileges and powers as may be
conferred upon corporations by any existing law.
(B) May at any time exercise such rights, privileges and powers,
when not inconsistent with the purposes and objects for which this
corporation is organized.
(C) Shall have power to have succession by its corporate name for
the period limited in its certificate or articles of incorporation,
and when no period is limited, perpetually, or until dissolved and its
affairs wound up according to law.
Page 3
(D) Shall have power to sue and be sued in any court of law or
equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and
personal estate and to mortgage or lease any such real and personal
estate with its franchises. The power to hold real and personal estate
shall include the power to take the same by devise or bequest in the
State of Nevada, or in any other state, territory or country.
(G) Shall have power to appoint such officers and agents as the
affairs of the corporation shall require, and to allow them suitable
compensation.
(H) Sha ll have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada,
for the management, regulation and government of its affairs and
property, the transfer of its stock, the transaction of its business,
and the calling and holding of meetings of its stockholders.
(I) Shall have power to wind up and dissolve itself, or be wound
up or dissolved.
(J) Shall have power to adopt and use a common seal or stamp, and
alter the same at pleasure. The use of a seal or stamp by the
corporation on any corporate documents is not necessary. The
corporation may use a seal or stamp, if it desires, but such use or
nonuse shall not in any way affect the legality of the document.
(K) Shall have power to borrow money and contract debts when
necessary for the transaction of its business, or for the exercise of
its corporate rights, privileges or franchises, or for any other
lawful purpose of its incorporation; to issue bonds, promissory notes,
bills of exchange, debentures, and other obligations and evidences of
indebtedness, payable at a specified time or times, or payable upon
the happening of a specified event or events, whether secured by
mortgage, pledge or otherwise, or unsecured, for money borrowed, or in
payment for property purchased, or acquired, or for any other lawful
object.
(L) Shall have power to guarantee, purchase, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of the shares of the
capital stock of, or any bonds, securities or evidences of the
indebtedness created by, any other corporation or corporations of the
State of Nevada, or any other state or government, and, while owners
of such stock, bonds, securities or evidences of indebtedness, to
exercise all the rights, powers and privileges of ownership, including
the right to vote, if any.
Page 4
(M) Shall have power to purchase, hold, sell and transfer shares
of its own capital stock, and use therefor its capital, capital
surplus, surplus, or other property or fund.
(N) Shall have power to conduct business, have one or more
offices, and hold, purchase, mortgage and convey real and personal
property in the State of Nevada, and in any of the several states,
territories, possessions and dependencies of the United States, the
District of Columbia, and any foreign countries.
(O) Shall have power to do all and everything necessary and
proper for the accomplishment of the objects enumerated in its
certificate or articles of incorporation, or any amendment thereof, or
necessary or incidental to the protection and benefit of the
corporation, and, in general, to carry on any lawful business
necessary or incidental to the attainment of the objects of the
corporation, whether or not such business is similar in nature to the
objects set forth in the certificate or articles of incorporation of
the corporation, or any amendment thereof.
(P) Shall have power to make donations for the public welfare or
for charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or
limited, or joint ventures, in connection with any lawful activities,
as may be allowed by law.
FOURTH. That the total number of common stock authorized that may
be issued by the Corporation is ONE HUNDRED MILLION (100,000,000)
shares of stock @ $.001 par value. Said shares may be issued by the
corporation from time to time for such considerations as may be fixed
by the Board of Directors.
Preferred Stock may also be issued by the Corporation from time
to time in one or more series and in such amounts as may be determined
by the Board of Directors. The designations, voting rights, amounts of
preference upon distribution of assets, rates of dividends, premiums
of redemption, conversion rights and other variations, if any, the
qualifications, limitations or restrictions thereof, shall be such as
are fixed by the Board of Directors, authority so to do being hereby
expressly granted, and as are stated and expressed in a resolution or
resolutions adopted by the Board of Directors providing for the issue
of such series of Preferred Stock.
FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be
increased or decreased in such manner as shall be provided by the
By-Laws of this Corporation, providing that the number of directors
shall not be reduced to fewer than one (1).
The name and post office address of the first board of Directors
shall be one (1) in number and listed as follows:
Name Post Office Address
Brent Buscay 2533 North Carson Street
Carson City, Nevada 89706
SIXTH. The capital stock, after the amount of the subscription
price, or par value, has been paid in, shall not be subject to
assessment to pay the debts of the corporation.
SEVENTH. The name and post office address of the Incorporator
signing the Articles of Incorporation is as follows:
Name Post Office Address
Brent Buscay 2533 North Carson Street
Carson City, Nevada 89706
Page 5
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the registered or statutory address of
this corporation in the state of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to
make, alter or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and
above its capital stock paid in; to authorize and cause to be
executed, mortgages and liens upon the real and personal property of
this Corporation.
By resolution passed by a majority of the whole Board, to
designate one (1) or more committees, each committee to consist of one
or more of the Directors of the Corporation, which, to the extent
provided in the resolution, or in the By-Laws of the Corporation,
shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation. Such
committee, or committees, shall have such name, or names, as may be
stated in the By-Laws of the Corporation, or as may be determined from
time to time by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the
Stockholders holding stock entitling them to exercise at least a
majority of the voting power given at a Stockholders meeting called
for that purpose, or when authorized by the written consent of the
holders of at least a majority of the voting stock issued and
outstanding, the Board of Directors shall have power and authority at
any meeting to sell, lease or exchange all of the property and assets
of the Corporation, including its good will and its corporate
franchises, upon such terms and conditions as its board of Directors
deems expedient and for the best interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right
to subscribe for or receive additional shares of any class of stock of
the Corporation, whether now or hereafter authorized, or any bonds,
debentures or securities convertible into stock, but such additional
shares of stock or other securities convertible into stock may be
issued or disposed of by the Board of Directors to such persons and on
such terms as in its discretion it shall deem advisable.
Page 6
TWELFTH. No director or officer of the Corporation shall be
personally liable to the Corporation or any of its stockholders for
damages for breach of fiduciary duty as a director or officer
involving any act or omission of any such director or officer;
provided, however, that the foregoing provision shall not eliminate or
limit the liability of a director or officer (i) for acts or omissions
which involve intentional misconduct, fraud or a knowing violation of
law, or (ii) the payment of dividends in violation of Section 78.300
of the Nevada Revised Statutes. Any repeal or modification of this
Article by the stockholders of the Corporation shall be prospective
only, and shall not adversely affect any limitation on the personal
liability of a director or officer of the Corporation for acts or
omissions prior to such repeal or modification.
THIRTEENTH. This Corporation reserves the right to amend, alter,
change or repeal any provision contained in the Articles of
Incorporation, in the manner now or hereafter prescribed by statute,
or by the Articles of Incorporation, and all rights conferred upon
Stockholders herein are granted subject to this reservation.
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for
the purpose of forming a Corporation pursuant to the General
Corporation Law of the State of Nevada, do make and file these
Articles of Incorporation, hereby declaring and certifying that the
facts herein stated are true, and accordingly have hereunto set my
hand this 27th day of June, 1997.
/s/ Brent Buscay
Brent Buscay
STATE OF NEVADA)
) SS:
CARSON CITY )
On this 27th day of June, 1997 in Carson City, Nevada, before me, the
undersigned, a Notary Public in and for Carson City, State of Nevada,
personally appeared:
Brent Buscay
Known to me to be the person whose name is subscribed to the foregoing
document and acknowledged to me that he executed the same.
[SEAL] MARK SHATAS
NOTARY PUBLIC - NEVADA /s/ Mark Shatas
Appt. Recorded in CARSON CITY
My Appt. Exp. March 12, 2000 Notary Public
I, Laughlin Associates, Inc. hereby accept as Resident Agent for the
previously named Corporation.
June 27, 1997 /s/ [ILLEGIBLE]
Date Assistant Vice President
Page 7
PRETORY USA, INC.
BY-LAWS
ARTICLE I MEETINGS OF SHAREHOLDERS
1. Shareholders' Meetings shall be held in the office of the corporation,
at Carson City, NV, or at such other place or places as the Directors
shall, from time to time, determine.
2. The annual meeting of the shareholders of this corporation shall be held
at 11:00 a.m., on the 27th day of June of each year beginning in 1998, at
which time there shall be elected by the shareholders of the corporation a
Board of Directors for the ensuing year, and the shareholders shall
transact such other business as shall properly come before them. If the day
fixed for the annual meeting shall be a legal holiday such meeting shall be
held on the next succeeding business day.
3. A notice signed by any Officer of the corporation or by any person
designated by the Board of Directors, which sets forth the place of the
annual meeting, shall be personally delivered to each of the shareholders
of record, or mailed postage prepaid, at the address as appears on the
stock book of the corporation, or if no such address appears in the stock
book of the corporation, to his last known address, at least ten (10) days
prior to the annual meeting.
Whenever any notice whatever is required to be given under any article of
these By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to the notice, whether before or after the time of the meeting of
the shareholders, shall be deemed equivalent to proper notice.
4. A majority of the shares issued and outstanding, either in person or by
proxy, shall constitute a quorum for the transaction of business at any
meeting of the shareholders.
5. If a quorum is not present at the annual meeting, the shareholders
present, in person or by proxy, may adjourn to such future time as shall be
agreed upon by them, and notice of such adjournment shall be mailed,
postage prepaid, to each shareholder of record at least ten (10) days
before such date to which the meeting was adjourned; but if a quorum is
present, they may adjourn from day to day as they see fit, and no notice of
such adjournment need be given.
Page 8
6. Special meetings of the shareholders may be called at anytime by the
President; by all of the Directors provided there are no more than three,
or if more than three, by any three Directors; or by the holder of a
majority share of the capital stock of the corporation. The Secretary shall
send a notice of such called meeting to each shareholder of record at least
ten (10) days before such meeting, and such notice shall state the time and
place of the meeting, and the object thereof. No business shall be
transacted at a special meeting except as stated in the notice to the
shareholders, unless by unanimous consent of all shareholders present,
either in person or by proxy.
7. Each shareholder shall be entitled to one vote for each share of stock
in his own name on the books of the corporation, whether represented in
person or by proxy.
8. At all meetings of shareholders, a shareholder may vote by proxy
executed in writing by the shareholder or by his duly authorized attorney-
in-fact. Such proxy shall be filed with the Secretary of the corporation
before or at the time of the meeting.
9. The following order of business shall be observed at all meetings of the
shareholders so far as is practicable:
a. Call the roll;
b. Reading, correcting, and approving of the minutes of the previous
meeting;
c. Reports of Officers;
d. Reports of Committees;
e. Election of Directors;
f. Unfinished business; and
g. New business.
10. Unless otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action to be taken, shall be signed by all of
the shareholders entitled to vote with respect to the subject matter
thereof.
Page 9
ARTICLE II STOCK
1. Certificates of stock shall be in a form adopted by the Board of
Directors and shall be signed by the President and Secretary of the
corporation.
2. All certificates shall be consecutively numbered; the name of the person
owning the shares represented thereby, with the number of such shares and
the date of issue shall be entered on the company's books.
3. All certificates of stock transferred by endorsement thereon shall be
surrendered by cancellation and new certificates issued to the purchaser or
assignee.
4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it
shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, and cancel the old certificate;
every such transfer shall be entered on the transfer book of the
corporation.
5. The corporation shall be entitled to treat the holder of record of any
share as the holder in fact thereof, and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share on
the part of any other person whether or not it shall have express or other
notice thereof, except as expressly provided by the laws of this state.
ARTICLE III DIRECTORS
1. A Board of Directors, consisting of at least one (1) person shall be
chosen annually by the shareholders at their meeting to manage the affairs
of the corporation. The Directors' term of office shall be one (1) year,
and Directors may be re-elected for successive annual terms.
2. Vacancies on the Board of Directors by reason of death, resignation or
other causes shall be filled by the remaining Director or Directors
choosing a Director or Directors to fill the unexpired term.
3. Regular meetings of the Board of Directors shall be held at 1:00 p.m.,
on the 27th day of June of each year beginning in 1998 at the office of the
company at Carson City, NV, or at such other time or place as the Board of
Directors shall by resolution appoint; special meetings may be called by
the President or any Director giving ten (10) days notice to each Director.
Special meetings may also be called by execution of the appropriate waiver
of notice and called when executed by a majority of the Directors of the
company. A majority of the Directors shall constitute a quorum.
Page 10
4. The Directors shall have the general management and control of the
business and affairs of the corporation and shall exercise all the powers
that may be exercised or performed by the corporation, under the statutes,
the Articles of Incorporation, and the By-Laws. Such management will be by
equal vote of each member of the Board of Directors with each Board member
having an equal vote.
5. The act of the majority of the Directors present at a meeting at which a
quorum is present shall be the act of the Directors.
6. A resolution, in writing, signed by all or a majority of the members of
the Board of Directors, shall constitute action by the Board of Directors
to effect therein expressed, with the same force and effect as though such
resolution had been passed at a duly convened meeting; and it shall be the
duty of the Secretary to record every such resolution in the Minute Book of
the corporation under its proper date.
7. Any or all of the Directors may be removed for cause by vote of the
shareholders or by action of the Board. Directors may be removed without
cause only by vote of the shareholders.
8. A Director may resign at any time by giving written notice to the Board,
the President or the Secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt
thereof by the Board or such Officer, and the acceptance of the resignation
shall not be necessary to make it effective.
9. A Director of the corporation who is present at a meeting of the
Directors at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his dissent shall be
entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the Secretary of the
meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
ARTICLE IV OFFICERS
1. The Officers of this company shall consist of: a President, one or more
Vice Presidents, Secretary, Treasurer, and such other officers as shall,
from time to time, be elected or appointed by the Board of Directors.
2. The PRESIDENT shall preside at all meetings of the Directors and the
shareholders and shall have general charge and control over the affairs of
the corporation subject to the Board of Directors. He shall sign or
countersign all certificates, contracts and other instruments of the
corporation as authorized by the Board of Directors and shall perform all
such other duties as are incident to his office or are required by him by
the Board of Directors.
Page 11
3. The VICE PRESIDENT shall exercise the functions of the President during
the absence or disability of the President and shall have such powers and
such duties as may be assigned to him, from time to time, by the Board of
Directors.
4. The SECRETARY shall issue notices for all meetings as required by the By-
Laws, shall keep a record of the minutes of the proceedings of the meetings
of the shareholders and Directors, shall have charge of the corporate
books, and shall make such reports and perform such other duties as are
incident to his office, or properly required of him by the Board of
Directors. He shall be responsible that the corporation complies with
Section 78.105 of the Nevada Revised Statutes and supplies to the Nevada
Resident Agent or Registered Office in Nevada, any and all amendments to
the corporation's Articles of Incorporation and any and all amendments or
changes to the By-Laws of the corporation. In compliance with Section
78.105, he will also supply to the Nevada Resident Agent or Registered
Office in Nevada, and maintain, a current statement setting out the name of
the custodian of the stock ledger or duplicate stock
ledger, and the present and complete Post Office address, including street
and number, if any, where such stock ledger or duplicate stock ledger is
kept.
5. The TREASURER shall have the custody of all monies and securities of the
corporation and shall keep regular books of account. He shall disburse the
funds of the corporation in payment of the just demands against the
corporation, or as may be ordered by the Board of Directors, making proper
vouchers for such disbursements and shall render to the Board of Directors,
from time to time, as may be required of him, an account of all his
transactions as Treasurer and of the financial condition of the
corporation. He shall perform all duties incident to his office or which
are properly required of him by the Board of Directors.
6. The RESIDENT AGENT shall be in charge of the corporation's registered
office in the State of Nevada, upon whom process against the corporation
may be served and shall perform all duties required of him by statute.
7. The salaries of all Officers shall be fixed by the Board of Directors
and may be changed, from time to time, by a majority vote of the Board.
8. Each of such Officers shall serve for a term of one (1) year or until
their successors are chosen and qualified. Officers may be re-elected or
appointed for successive annual terms.
9. The Board of Directors may appoint such other Officers and Agents, as it
shall deem necessary or expedient, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined, from time to time, by the Board of Directors.
Page 12
10. Any Officer or Agent elected or appointed by the Directors may be
removed by the Directors whenever in their judgment the best interests of
the corporation would be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
11. A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the Directors for the
unexpired portion of the term.
ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS
The corporation shall indemnify any and all of its Directors and Officers,
and its former Directors and Officers, or any person who may have served at
the corporation's request as a Director or Officer of another corporation
in which it owns shares of capital stock or of which it is a creditor,
against expenses actually and necessarily incurred by them in connection
with the defense of any action, suit or proceeding in which they, or any of
them, are made parties, or a party, by reason of being or having been
Director(s) or Officer(s) of the corporation, or of such other corporation,
except, in relation to matters as to which any such Director or Officer or
former Director or Officer or person shall be adjudged in such action, suit
or proceeding to be liable for negligence or misconduct in the performance
of duty. Such indemnification shall not be deemed exclusive of any other
rights to which those indemnified may be entitled, under By-Law, agreement,
vote of shareholders or otherwise.
ARTICLE VI DIVIDENDS
The Directors may, from time to time, declare, and the corporation may pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE VII WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any shareholder or Director of the corporation under the
provisions of these By-Laws or under the provisions of the Articles of
Incorporation, a waiver thereof in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of such notice.
Page 13
ARTICLE VIII AMENDMENTS
1. Any of these By-Laws may be amended by a majority vote of the
shareholders at any annual meeting or at any special meeting called for
that purpose.
2. The Board of Directors may amend the By-Laws or adopt additional By-
Laws, but shall not alter or repeal any By-Laws adopted by the shareholders
of the company.
CERTIFIED TO BE THE BY-LAWS OF:
PRETORY USA, INC.
BY: /s/ [ILLEGIBLE]
Assistant Secretary
Page 14
(ENGLISH TRANSLATION OF "CONTRACT DE CESSION")
AGREEMENT OF TRANSFER
BETWEEN
Mr. Sarge MARENDAZ, Date of Birth: July 4, 1946, LAUSANNE (SUISSE),
Address: 26 rue de La Gare, 22250 BROONS.
Mrs. Marie-Jose SAUVAGE, Date of Birth October 3, 1957, Address: 12, rue
des Gouttes d'Or, 77410 CLAYES SOUILLY.
(To be known as the "assignors")
of one party
AND
PRETORY, SARL, of capital of 250,200 Francs and a registered company
operating at 182, rue de Pyrenees, 75020 Paris, with the registered
commercial number of B 399 378 041, represented by Mr. Jacques Gaussens,
the President.
(To be known as the "Assignee")
of the other party
WE ARE IN AGREEMENT THAT:
1. The assignors are the investors of a technology that detects odors in the
ambiant air with gas sensors, below named as the Invention.
Page 15
<PAGE>
This technology has resulted in two products at this point known as the
PIF and the Ethypol. Nevertheless, there are many applications to be made
with this technology.
A precise definition of this technology and of the products are found in
the attached Exhibit, the "Cahier des charges".
The Assignors are not entitled to any French or foreign patents of this
technology or have requested such.
2. Pretory is interested in acquiring the total rights of the technology and
derivative inventions.
IT IS AGREED IN FINALITY THE FOLLOWING:
Article 1 - OBJECT OF THE AGREEMENT
1.1 The Assignor gives to the Assignee, who accepts, the total rights to the
technology without any exemption or any reservation.
1.2 The transfer is agreed and accepted without any guarantee other than those
disclosed in Article 2 of this Agreement.
Article 2 - GUARANTEES AND DECLARATIONS
2.1 The Assignor declare that the inventions are patentable and that the
inventions have never been patented in FRANCE or in any foreign country
and no such effort has been undertaken. Such action could be detrimental
to the Assignee.
2.2 The Assignor will not file for any demand of patent in FRANCE or any
foreign country that could disturb in any way the Assignee in the
exploitation or the use, or the use of others, the rights attached to the
technology, the Assignor gives up with out exception any rights at the
time of the demand for patent by the assignee in FRANCE or in any foreign
country.
Page 16
<PAGE>
2.3 The Assignor will insure the development of the technology of the products
and other derivatives against payment.
It is expressly agreed that all rights, without any exception or any
restriction that come from the development or the improvement or
perfection of the technology and all derivative applications will become
completely and exclusively the property of the Assignee.
The Assignors will inform the Assignee on the result of their research and
further development of the technology to discover derivatives and new
applications.
2.4 The Assignors declare that they will help and give all assistance at the
time of the deposit by the assignee of the deposit by the Assignee of a
demand of patent to the National Register of Patents and that if any
objection is made by the organization or a third party that the Assignor
will assist with any effort in defending the registration.
If there are any difficulties with obtaining said patent or patents the
Assignor will indemnify and compensate the Assignee for loss.
2.5 In the case of the eviction of the Assignee in any of the rights assigned
by the Assignor in any case, the Assignor will have to compensate the
Assignee for the losses suffered.
Article 3 - PRICE OF THE ASSIGNMENT
The assignment is agreed to and accepted by the following conditions. The
awarding of 510,000 shares of Pretory USA to Marendaz and 100 shares of
Pretory USA to Sauvage. Pretory USA is incorporated in Nevada of the
United States of America and intends to be quoted publicly on the NASDAQ.
The Assignor completely assign the technology with this Agreement.
Page 17
<PAGE>
Article 4 - CONSEQUENCE OF THE ASSIGNMENT
4.1 As a result of the assignment, the assignee obtains all rights in any form
of the Assignors attached to the technology on the day this Agreement is
signed in final.
4.2 The rights of the Assignee are assignable to third parties as designated
by the Assignee as they may determine.
Article 5 - RIGHTS APPLICABLE - LITIGATION
5.1 The present Agreement (this Agreement) is submissive to the Law of FRANCE.
5.2 Any disagreement between both parties by their interpretation and/or their
execution of the Agreement will be subject to the decision of the Tribunal
of Commerce of Paris.
Article 6 - CONFIDENTIALITY
6.1 The Assignor will keep confidential all information relative to the
technology and will not communicate or divulge to any party for any
reason, directly or indirectly without the full authorization in writing
by the Assignee.
6.2 The Assignor will not use the information related to the technology,
initiate our copy in any way the technology without the authorization in
writing by the Assignee.
Article 7 - ETHICS
Due to the unique and specific nature of the technology, the Assignee
agrees not to conduct any business with any administration or company that
is linked in anyway to the Security Industry (as Pretory).
Page 18
<PAGE>
Article 8 - "ENTITLE LAW"
The Agreement and the sections of the Agreement have a character and are
presented in a way that are not intended to limit the scope or
interpretation of the Agreement.
Article 9 - ANNEXES
Both parties recognize expressly that the annexes of this agreement are
completely included as part of this Agreement.
- ----------------------- --------------------------
SERGE MARENDAZ MARIE-JOSE SAUVAGE
---------------------
PRETORY S.A.R.L.
Page 19
<PAGE>
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is entered into and
effective as of September 12, 1997, by and between those undersigned parties
(collectively the "SHAREHOLDERS"), PRETORY, S.A., a French corporation ("PSA")
and PRETORY USA, INC., a Nevada corporation ("PUI" or the "COMPANY").
1. RECITALS
This Agreement is entered into with reference to and in contemplation of
the following facts, circumstances and representations:
1. The SHAREHOLDERS are the owners of 2,332 shares of the 2,336 issued
and outstanding shares of common stock of PSA (the "PSA Shares").
2. PUI desires to issue a total of 4,720,000 shares of its common stock
(the "PUI Shares") to the SHAREHOLDERS in exchange for the PSA
Shares.
3. The SHAREHOLDERS desire to exchange the PSA Shares for the PUI
Shares in accordance with the terms and conditions of this
Agreement.
4. PSA desires that this transaction be consummated.
2. EXCHANGE AND ISSUANCE OF SHARES
2.1 Exchange of PUI Shares: PUI shall exchange and deliver to the
SHAREHOLDERS, a total of 4,720,000 restricted shares of PUI restricted common
stock in accordance with the allocation set forth in the attached Schedule "A".
Page 20
<PAGE>
2.2 Exchange of PSA Shares: At the closing, the SHAREHOLDERS shall
exchange and deliver to PUI, a total of 2,329 shares of PSA common stock which
represents ninety-nine and seven tenths percent (99.7%) of the issued and
outstanding shares of PSA.
2.3 Nature of PUI Shares: The SHAREHOLDERS shall be issued the PUI Shares,
which unless otherwise contractually restricted, shall be subject to a one (1)
year holding period before the PUI Shares are eligible for sale in the U.S.
public market. The sale of the PUI Shares will be further limited by the resale
provisions of SEC Rule 144.
2.4 Restricted Nature of PUI Shares: Notwithstanding the one (1) year
holding period for the PUI Shares, each of the SHAREHOLDERS who become
"affiliates" or "control persons" of PUI will be subject to certain limitations
with respect to the sale of their respective PUI Shares. Accordingly, as a
result of such a designation, the sale of the PUI Shares will be limited by SEC
Rule 144.
2.5 Private Sale Acknowledgment: The parties acknowledge and agree that
the exchange and issuance of the PUI Shares is being undertaken as a private
sale pursuant to Section 4 of the Securities Act of 1933, as amended, and Nevada
Revised Statutes Chapters 78 and 90, and is not being transacted via a
broker-dealer and/or in the public market place.
2.6 issuance of Additional Shares by PUI: The parties hereto acknowledge
and agree that in addition to the issuance of the 4,720,000 PUI Shares, that PUI
will be issuing concurrently an additional 1,780,000 shares to the below listed
persons which will result in a total of 6,500,000 shares being issued and
outstanding at the completion of the subject transaction:
<TABLE>
<CAPTION>
Name No. Shares
---- ----------
<S> <C>
1. SERGE MERANDEZ and
YVONICK MERANDEZ 510,000
2. YOUSEF OMAIR BIN YOUSEF 270,000
3. MICHEL COLSON 100,000
</TABLE>
Page 21
<PAGE>
<TABLE>
<S> <C>
4. INVESTMENT GROUP 900,000
---------
TOTAL 1,780,000
=========
</TABLE>
3. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The COMPANY represents and warrants to the SHAREHOLDERS and PSA as
follows:
3.1 Organization: PUI is a corporation duly incorporated and validly
existing under the laws of Nevada and is in good standing with respect to all of
its regulatory filings.
3.2 Capitalization: The authorized capital of PUI consists of 100,000,000
common shares with a par value $.001 and of which no shares have been issued at
this time.
3.3 Financial Statements: PUI has furnished to the SHAREHOLDERS and PSA
audited financial statements for the period ending September 30, 1997. That at
the Closing the financial affairs of PUI will be materially the same as
represented in the financial statements for the period ending September 30,
1997.
3.4 Books and Records: All material transactions of PUI have been promptly
and properly recorded or filed in or with its books and records and the Minute
Book of PUI contains records of all meetings and proceedings of the SHAREHOLDERS
and directors thereof.
3.5 Legal Compliance: To the best of its knowledge, PUI is not in breach
of any laws, ordinances, statutes, regulations, by-laws, orders or decrees to
which PUI is subject or which apply to it or any of its assets.
3.6 Tax Returns: All tax returns and reports of PUI required by law to be
filed prior to the date hereof have been filed and are substantially true,
complete and correct and all taxes and governmental charges have been paid.
Page 23
<PAGE>
3.7 Adverse Financial Events: PUI has not experienced nor is it aware of
any occurrence or event which has had or might reasonably be expected to have a
material adverse effect on its financial condition.
3.8 Disputes, Claims and Investigations: There are no disputes, claims,
actions, suits, judgments, investigations or proceedings outstanding or pending
or to the knowledge of PUI threatened against or affecting PUI at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau or agency.
3.9 Employee Liabilities: PUI has no liability to former employees or any
liability to any governmental authorities with respect to current or former
employees.
3.10 No Conflicts or Agreement Violations: The execution, delivery and
performance of this Agreement will not conflict with or be in violation of the
articles or by-laws of PUI or of any agreement to which PUI is a party and will
not give any person or company a right to terminate or cancel any agreement or
right enjoyed by PUI and will not result in the creation or imposition of any
lien, encumbrances or restriction of any nature whatsoever in favor of a third
party upon or against the assets of PUI.
3.11 Validly Issued and Authorized Shares: That the PUI Shares will be
validly authorized and issued by the COMPANY, they will be fully paid and
non-assessable and that they will be issued in full compliance with all federal
and state securities laws.
3.12 Restrictive Legend: That the PUI Shares will have a restrictive
legend imposed thereon identifying them as "Restricted Shares" which are subject
to the conditions and limitations of SEC Rule 144 with respect to their sale in
the U.S. public market place.
3.13 Corporate Authority: The officers or representatives of the COMPANY
executing this Agreement represent that they have been authorized to execute
this Agreement pursuant to a resolution of the Board of Directors of the
COMPANY.
Page 24
<PAGE>
4.9 Legal Compliance: PSA is not in breach of any laws, ordinances,
statutes, regulations, by-laws, orders or decrees to which PSA is subject or
which apply to it or any of its assets.
4.10 Tax Returns: All tax returns and reports of PSA required by law to be
filed prior to the date hereof have been filed and are subsequently true,
complete and correct and all taxes and governmental charges have been paid.
4.11 Adverse Financial Events: PSA has not experienced nor is it aware of
any occurrence or event which has had or might reasonably be expected to have a
material adverse effect on its financial condition.
4.12 Disputes, Claims and Investigations: There are no disputes, claims,
actions, suits, judgments, investigations or proceedings outstanding or pending
or to the knowledge of PSA threatened against or affecting PSA at law or in
equity or before or by any federal, provincial, municipal or other governmental
department, commission, board, bureau or agency.
4.13 Employee Liabilities: PSA has no liability to former employees or any
liability to any government authorities with respect to current or former
employees.
4.14 No Conflicts or Agreement Violations: The execution, delivery and
performance of this Agreement will not conflict with or be in violation of the
articles or by-laws of PSA or of any agreement to which PSA is a party and will
not give any person or company a right to terminate or cancel any agreement or
right enjoyed by PSA and will not result in the creation or imposition of any
lien, encumbrances or restriction of any nature whatsoever in favor of a third
party upon or against the assets of PSA.
4.15 No Liens: That PSA has not received a notice of any assignment, lien,
encumbrance, claim or charge against the PSA Shares.
4.16 Corporate Authority: The officers or representatives of PSA executing
this Agreement represent that they have been authorized to execute this
Agreement pursuant to a resolution of the Boards of Directors of PSA.
Page 26
<PAGE>
5. REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDERS ALONE
The SHAREHOLDERS alone further represent and warrant to PUI as follows
with respect to the PUI Shares:
5.1 Financially Responsible: That they are financially responsible and
able to meet their obligations and acknowledge that this investment will be
speculative.
5.2 Investment Experience: That they have had experience in the business
of investments in one or more of the following: (i) investment experience with
securities such as stock and bonds; (ii) ownership of interests in partnerships,
new ventures and start-up companies; (iii) experience in business and financial
dealings; and that they can protect their own interests in an investment of this
nature and they do not have an "Investor Representative", as that term is
defined in Regulation D of the Securities Act of 1933 and do not need such an
Investor Representative.
5.3 Investment Risk: That they are capable of bearing the high degree of
economic risks and burdens of this investment, including but not limited to the
possibility of complete loss of all its investment capital and the lack of a
liquid market, such that it may not be able to liquidate readily the investment
whenever desired or at the then current asking price.
5.4 Access to Information: That they have had access to the information
regarding the financial condition of the COMPANY and they were able to request
copies of such information, ask questions of and receive answers from the
COMPANY regarding such information and any other information they desire
concerning the PUI Shares, and all such questions have been answered to their
full satisfaction.
5.5 Private Transaction: That at no time were they presented with or
solicited by any leaflet, public promotional meeting, circular, newspaper or
magazine article, radio or television advertisement or any other form of general
advertising.
5.6 Investment Intent: The PUI Shares are not being purchased with a view
to or for the resale or distribution thereof and they have no present plans to
enter into any contract, undertaking, agreement or arrangement for such resale
or distribution.
Page 26
<PAGE>
5.7 Due Diligence: That the SHAREHOLDERS shall have completed a due
diligence review of the affairs of PUI and are satisfied with the results of
that review.
6. CLOSING, ESCROW HOLDER AND
CONDITIONS TO CLOSING
6.1 Exchange Closing: The closing of the share exchange as contemplated by
this Agreement (the "Closing") shall take place in San Diego, California, at
such time and place as may be agreed among by the parties, but in no event later
than November 15, 1997, unless otherwise extended in writing by the parties.
6.2 Appointment of Escrow Holder: The parties hereby appoint CARMINE J.
BUA, III, ESQ. of San Diego, California as the Escrow Holder pursuant to this
Agreement.
6.3 Opinion of Counsel for PUI: The SHAREHOLDERS and PSA shall have
received an opinion from the legal counsel for PUI, in form and substance
reasonably satisfactory to the SHAREHOLDERS and PSA, to the effect that:
1. PUI is a corporation duly organized and legally existing under
the laws of the State of Nevada and is in good standing with
respect to all of its regulatory filings, and
2. This Agreement when duly executed and delivered by PUI,
constitutes a legal, valid and binding obligation of PUI
enforceable against it in accordance with its terms, and
3. The PUI Shares delivered pursuant to the Agreement have been
validly issued, are fully paid and non-assessable, and
4. The PUI Shares have been legally and validly issued and are in
compliance with
Page 27
<PAGE>
all federal and state securities laws including but not
limited to Section 4 of the Securities Act of 1933, as
amended, and Nevada Revised Statutes Chapters 78 and 90.
6.4 Opinion of Counsel For SHAREHOLDERS and PSA: PUI shall have received
an opinion from the legal counsel for the SHAREHOLDERS and PSA, in form and
substance reasonably satisfactory to PUI, to the effect that:
1. PSA is a corporation duly organized and legally existing under
the laws of France and is in good standing with respect to all
of its regulatory filings, and
2. The PSA Shares delivered pursuant to this Agreement have been
validly issued, fully paid, non-assessable, and have been
originally issued in full compliance with all applicable
securities laws of France.
3. The SHAREHOLDERS have the full power to transfer the PSA
Shares to PUI without obtaining the consent or approval of any
other person or governmental agency.
4. That PUI is legally capable of owning and is permitted to own
a controlling Interest in PSA under the applicable laws of
France.
5. That PSA is required to have a minimum of seven (7)
shareholders who must be citizens of France.
6.5 Escrow Conditions and Closing: Prior to the Closing the following will
be required:
Page 28
<PAGE>
1. Delivery of PSA Shares: The SHAREHOLDERS shall deliver to the
Escrow Holder the certificate or certificates representing the
2,329 PSA Shares registered in the name of PUI, duly endorsed
for transfer accompanied by a duly executed assignment of the
PSA Shares to PUI.
2. Delivery of PUI Shares: PUI shall deliver to the Escrow Holder
a total of 4,720,000 of the PUI of the Shares registered in
the names of the SHAREHOLDERS as set forth in Schedule "A".
3. Legal Opinion and Documents: Both parties shall deliver to the
Escrow Holder such legal opinions and other documents as are
required by the terms and conditions of the Agreement.
4. Requisite Corporate Resolutions: Each party shall deliver to
the Escrow Holder certified copies of resolutions from their
respective Boards of Directors authorizing the subject
transaction.
5. Shareholder or Board of Directors Approval: PUI shall deliver
to the Escrow Holder documentation evidencing the PUI
shareholder approval of the subject transaction. In the event
no shares have been issued by PUI prior to the subject
transaction, PUI shall deliver a certified copy of the
resolution of the PUI Board of Directors authorizing the
subject transaction.
6.6 Close of Transaction: The subject transaction shall "close" upon the
satisfaction of the above conditions.
Page 29
<PAGE>
7. COOPERATION, ARBITRATION, INTERPRETATION,
MODIFICATION AND ATTORNEY FEES
7.1 Cooperation of Parties: The parties further agree that they will do
all things necessary to accomplish and facilitate the purpose of this Agreement
and that they will sign and execute any and all documents necessary to bring
about and perfect the purposes of this Agreement.
7.2 Arbitration: The parties hereby submit all controversies, claims and
matters of difference arising out of this Agreement to arbitration in San Diego,
California according to the rules and practices of the American Arbitration
Association from time to time in force. This submission and agreement to
arbitrate shall be specifically enforceable. The Agreement shall further be
governed by the laws of the State of Nevada.
7.3 Interpretation of Agreement: The parties agree that should any
provision of this Agreement be found to be ambiguous in any way, such ambiguity
shall not be resolved by construing such provisions or any part of or the entire
Agreement in favor of or against any party herein, but rather by construing the
terms of this Agreement fairly and reasonable in accordance with their generally
accepted meaning.
7.4 Modification of Agreement: This Agreement may be amended or modified
in any way at any time by an instrument in writing stating the manner in which
it is amended or modified and signed by each of the parties hereto. Any such
writing amending or modifying this Agreement shall be attached to and kept with
this Agreement.
7.5 Attorney Fees: If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of the Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it may be
entitled.
7.6 Entire Agreement: This Agreement constitutes the entire Agreement and
understanding of the parties hereto with respect to the matters herein set
forth, and all prior negotiations, writings and understandings relating to the
subject matter of this Agreement are merged herein and are superseded and
canceled by this Agreement.
Page 30
<PAGE>
7.7 Counterparts: This Agreement may be signed in one or more
counterparts.
7.8 Facsimile Transmission Signatures: A signature received pursuant to a
facsimile transmission shall be sufficient to bind a party to this Agreement
SHAREHOLDERS
DATED: 12/09/, 1997 /s/ Jacques Gaussens
------- ---------------------------------------
JACQUES GAUSSENS
DATED: 12/09/, 1997 /s/ Arcole Investment Trust
------- ---------------------------------------
ARCOLE INVESTMENT TRUST
DATED: 12/09/, 1997 /s/ Raquel Velasco
------- ---------------------------------------
RAQUEL VELASCO
PRETORY S.A.
Societe PRETORY
182, rue des Pyrenees
75620 PARIS
Tel: 01 43 66 26-64 : [ILLEGIBLE]
[ILLEGIBLE]
DATED: 12/09/, 1997 BY: /s/ Jacques Gaussens
------- ---------------------------------------
JACQUES GAUSSENS
President
PRETORY USA, INC.
DATED: 12/09/, 1997 BY: /s/ Raquel Velasco
------- ---------------------------------------
RAQUEL VELASCO
President
Page 31
<PAGE>
SCHEDULE "A"
<TABLE>
<CAPTION>
NAME NO. PUI SHARES
---- --------------
<S> <C>
1. JACQUES GAUSSENS 1,125,000
2. ARCOLE INVESTMENT TRUST 2,250,000
3. RAQUEL VELASCO 1,345,000
---------
TOTAL SHARES 4,720,000
=========
</TABLE>
Page 32
January 6, 1999
[Coverletter of Cortez Diagnostics, Inc]
Pretory
182 Rue de Pyranees BP12
Paris Cedex 20, 75965
France
Distributor Agreement
We, Cortrez Diagnostics, Inc., hereafter referred to as Cortez, hereby certify
that Pretory, or the above mentioned address, is our exclusive distributor of
the Drugs of Abuse Rapid tests in France. The exclusivity right will remain in
place for six months from the date of this contract and after six months the
distributor's activities will be evaluated. If the sales volume for the first
six months is satisfactory the contract will be renewed for a period of six
months. The distributor's activities will be evaluated at the beginning of each
subsequent six-month periods and the parties will agree in writing for the
volume of sales for the following six-month period and renew the contract
accordingly.
Pretory is authorized with the right to sell and register the products, supply
technical services on behalf of Cortez, exporting outside of the United States.
Pretory agrees not to distribute similar rapid tests from Cortez's competitors
during the period specified by this agreement, except for tests that are not
available from the Cortez product list. Pretory is authorized to use our
business and brand name to advertise our products via mass media.
In cases where individual buyers demand to buy directly from Cortez, Cortez will
inform Pretory about such a proposal. Cortez will allow Pretory to negotiate the
selling price - this is in order to keep a consistent pricing policy - and the
margin between Pretory's cost and the selling price will be split 50-50 with
Cortez. Cortez will not sell and ship Cortez Drugs of Abuse test directly to any
other customer located in France. However, Cortez will not be held responsible
for any OEM buyers and distributors worldwide who might intend to sell the same
products under their own company name in France.
Cortez accepts to carry out the supply of tests for Pretory for upcoming orders.
Pretory will be fully supported and promptly supplied by Cortez for as long as
the signed contract is valid. The prices quoted to Pretory will remain for 6
months from the above date.
SAMPLE POLICY; Pretory is expected to pay for the samples (20% discount) and pay
for the freight. PAYMENT POLICY: Payment terms will be cash in advance by wire
transfer, check or confirmed, irrevocable, and sight letter of credit. Pretory
must pay the L/C fees for their bank and Cortez's bank. The quoted prices are
based on the payment method of wire transfer and do not include L/C costs. These
agreements must be determined before any upcoming order pro forma will be
prepared.
Initials /s/ P.SH /s/ JG
------------ ----------------
Paul Shaw Jacques Gaussens
Page 33
SHIPMENT: Approximately two days to 2 weeks after receipt of firm order
depending upon the diversity and the volume of the order. This also depends on
the payment plan. If the delivery time needed is longer than 2 weeks, then
Cortez will inform the distributor about the expected delivery date.
WARRANTY: Cortez warrants that diagnostics supplied to the distributor are free
from defects In material, design and workmanship. All diagnostics shall show
their expiration date on the label. The stated warranty does not apply in the
event of improper storage and/or handling of diagnostics or in other
circumstances beyond the control of Cortez. In the event that a shipment of such
diagnostics from Cortez is confirmed by Pretory as defective with respect to
workmanship or quality and if written notice thereof is duly given to Cortez,
Pretory shall at Cortez's request and cost return or destroy the products in
question, whereupon Cortez shall at its discretion, either reimburse any amounts
paid to Cortez as purchase price for the products in question or deliver an
equivalent amount of such products to Pretory. Any further warranties or
remedies whether express or implied, including without limitation - any warranty
of merchantability or fitness for any particular purpose with respect to
products or any claim for loss of profit or other damages resulting from
defective products are expressly excluded. The risk of expiry shall be borne
exclusively by the distributor.
LIABILITY: Cortez shall be liable for only the cost of the defective products
paid to Cortez. The distributor will accept any other liability. The distributor
will indemnify and hold Cortez harmless against any and all claims, Lawsuits,
proceedings, recoveries, and damages arising out of, based on, or caused by
defects in material or workmanship of the products.
The faxed copy of this document is legitimate and legal. It can be renewed
before the expiration date.
Signed by:
/s/ Paul Shaw /s/ Jacques Gaussens
- --------------------- -------------------------
Paul Shaw Jacques Gaussens
Marketing Manager President
This certificate expires 12 months from the date notarized.
State of California/County of Los Angeles
Subscribed and sworn to before me this ____ day of __________ month ________year
_____________________________
Page 34
Distribution-Contract
between
SECURETEC GMBH
Rosenheimer Landstr. 129
85521 Ottobrunn
Germany
hereinafter referred to as ,,SECURETEC"
and
SOCIETE PRETORY
182, Rue des Pyrenees
75020 Paris
France
hereinafter referred to as ,,PRETORY"
hereinafter jointly referred to as ,,parties"
Version 24.06.1997
Page 35
/s/ [ILLEGIBLE]
PREAMBLE
SECURETEC LTD. develops, maufactures, distributes and markets products in the
field of security and hazardous and/or illegal substance detection.
PRETORY is distributor in the same field with personnel experienced in the
promotion distribution and sale of similar products and services.
Both parties desire to cooperate in the marketing sales and distribution of
Securetec's products as defined in Annex A (products).
1 CONDITIONS OF THIS AGREEMENT
(products, territories, prices)
1.1 The parties conclude this agreement for a term of 24 months as of the date
of its signature.
1.2 During this period of time, pretory shall have exclusive rights for the
marketing, sale and distribution of Securetec's products (Annex A) in the
territories and market segments enumerated in Annex B.
1.3 Securetec shall sell to Pretory the ,,products" according to the price
list in Annex C (pricing).
1.4 Pretory's sales projections for the first two half year periods and the
second year of cooperation, starting with the date of signature of this
contract, are described in Annex D Pretory will provide Securetec at least
4 weeks before the end of each year of cooperation with an update of these
sales projections for the next two half-year periods.
1.5 This agreement shall remain in force for a period of 12 months after the
expiration of the current contract, provided that sales are in accordance
with the sales projections agreed upon every 12 months. Such renewal shall
have to be made in writing at least thirty (30) days prior to the
expiration of this agreement.
1.6 Sales are reviewed on a half-year basis. Securetec shall have the right to
either cancel the exclusivity provision of this contract or terminate this
agreement within a 3 months period at each half year review if sales for
any given half year period are more than 25% below the projected sales in
Annex D.
1.7 Securetec will not be authorized to sell directly the ,,products" in the
,,territories" given to Pretory for the duration of the agreement, if
sales activities of pretory are obvious and successfull according to
clause 1.6.
3
/s/ [ILLEGIBLE]
1.8 Price adjustments in the delivery price due to changes in market demands
or variation in production costs shall be implemented by mutual agreement
within the first month of each year based on contract anniversary date.
1.9 Securetec has the right to vary/change products according to demands of
its production.
1.10 Pretory is neither allowed to manufacture or distribute competitive
products not to let competitive products be manufactured or distributed by
other parties nor support or contribute to the manufacturing or
distribution process.
Page 36
2 BUSINESS PLAN
2.1 Pretory will supply Securetec before the date of signature of this
contract with its sales projections (Annex D) as well as a detailed
business plan (Annex E), being both part of this agreement.
2.2 This business plan shall include:
* marketing strategies for the private and the official market.
* a reasonable market price for different market segments
* a list of sub-agents and dealers including a status report on each
of them.
2.3 Securetec accept both; the Annexes D (sales projection) and E (marketing
plan) as starting points for further marketing activities. Securetec and
Pretory continues to work on them in the following business meetings;
which should be every 3 months.
2.5 Before each quarter of the calendar year Securetec actualises its
production dates and numbers for the following quarter. Therefore Pretory
shall transmit every three months which amounts of products they will need
for the next quarter. Pretory is oblidged to purchase the prognosed
quantity for the immediate following quarter. Especially for quantities
exceeding 5000 pieces Securetec has to know this at least four (4) weeks
before the end of each quarter, which means before the end of November,
Februar, May and August. Otherwise the terms of delivery agreed in Annex C
can not be hold.
3 PROMOTION OF PRODUCTS
3.1 Pretory shall bear all costs of its own personnel, marketing, canvassing
and expenditures for advertising.
3.2 Pretory shall provide information on its market development activities to
Securetec. Any kind of information about competitors and their products,
new products, market trends, important exhibitions and congresses. Vice
versa Securetec shall act the same way.
4
/s/ [ILLEGIBLE]
Page 37
3.3 Pretory shall promote develoment including the establishment of customer
contacts, major end users as per the Marketing plan.
3.4 All marketing material shall have to be approved by Securetec prior to its
distribution.
3.5 Pretory shall be entitled to conclude and execute sales contracts with end
users, resale agents and commissioned sales agents.
3.6 Pretory will pass all potential agent contracts to Securetec for review
and approval.
3.7 Pretory will establish freely its resale prices, keeping them within a
competitive way.
3.8 SECURETEC will, upon Pretory's request supply free a reasonable quantity
of all documentation material available in english or preferably in French
and will actualize material when printed for its own use.
3.9 Pretory will translate such material at its own cost it necessary and
submit it to the approval of Securetec.
3.10 Securetec will facilitate the marketing of its products by Pretory in
making available all pertinent information concerning the training of
personell using the products, the marketing, the promotional material
used, local sales strategies and relevant sales statistics and local
specific usage of the products as well as market segments in Germany and
other countries where SECURETEC products are marketed. Any and all
informations which will facilitate the sale of Securetec supplied
products. Press reviews, public relations and advertising activities and
material available as well as support for exhibitions.
4 DELIVERY CONDITIONS
4.1 Product orders shall be placed for a minimum quantity per order as
mentioned in Annex C as well, large quantities orders, will be transmitted
according to a schedule agreed upon in the same Annex C.
4.2 Product specifications are described in Annex F. If product specifications
are outside the specified range, Securetec shall provide free (CIF Paris)
replacement within 60 days. If Securetec is unable to deliver products
according to the specifications as mentioned above and/or the guarantees
and schedules of deliveries agreed by Securetec in the confirmation of the
specific order from Pretory to Securetec, Pretory shall have the right to
terminate the agreement within 60 days.
5
/s/ [ILLEGIBLE]
Page 38
5 GUARANTEES
5.1 Securetec guarantees, that product qualities are within the specified
range described in Annex F (Specifications).
5.2 Pretory will not be authorized to supply any other guarantee besides the
ones described herein nor engage the responsibility of Securetec with
regards to technical specifities not written on the printed material
approved by Securetec.
5.3 Pretory will not be authorized to accept any order which is combined with
a penalty for non-fulfilment of a contract if the delivery is in delay,
without the consent of Securetec.
5.4 Pretory shall not assume any liability, obligation or responsibility with
respect to any failure due to the manufacturing of the product.
5.5 Securetec and Pretory shall be responsible itselves for any claim for
damage and/or litigation proceedings raised against it due to the use or
the misuse of the product. Each party shall pay for and maintain insurance
policies covering the risks.
6 STOCK
Pretory shall ensure stock levels sufficient to meet market requirements.
7 TERMINATION OF AGREEMENT
After the regular expiry or a premature termination of this agreement by
Pretory, a full and complete list of Pretory's customers for Securetec's
products will be supplied to Securetec to enable continuation of business
activities in the territory concerned.
8 CONFIDENTIALLY AGREEMENT
In addition to this agreement a non-disclosure contract between the above
parties has been concluded and will remain in force an additional 5 years beyond
the termination or expiration of this agreement.
9 PLACE OF JURISDICTION
Place of jurisdiction shall be Zurich. This agreement shall be governed by
German law.
Page 39
/s/ [ILLEGIBLE]
10 FINAL AGREEMENTS
10.1 Any supplement and/or amendment to this agreement shall only be valid if
made in writing and signed by both parties.
10.2 This agreement does not establish a joint venture or an agency or legal
representation relationship between the parties and does not give either
party any right or authority to assume or create any express or implied
obligation and/or responsibility on behalf of the other party nor may this
agreement be construed in such a way except as provided for in item 3.5.
10.3 If any provision of this agreement is or is held to be illegal or to have
become illegal, invalid, unenforceable or voidable for any reason, that
provision will not affect the legality, validity or enforceability of the
other provisions ot this agreement, and will be seperated from this
agreement so that the remaining provisions remain in full force and
effect.
10.4 Pretory is authorized to mention on its letterhead or the products and on
promotional material that it is the exclusive distributor of Securetec's
products (Annex A) in the territories and market segments agreed upon in
Annex B.
10.5 The following Annexes, signed by both parties are integral parts of this
agreement:
* Annex A: Securetec's products
* Annex B: Territories and market segments for exclusivity
* Annex C: Pricing and delivery conditions
* Annex D: Sales projections
* Annex E: Marketing plan
* Annex F: Product-specifications, Demands for transport and stocking.
* Annex G: General terms and conditions
* Annex H: Frontline
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth below.
/s/ [ILLEGIBLE]
- ------------------------------ ---------------------------------
PRETORY SECURETEC
SECURITE - COMMUNICATION "SECURITY TECHNOLOGY
HAZARDOUS SUBSTANCE DETECTION
LTD.
Date: Societe PRETORY Date: 25.6.97
182, rue des Pyrenees
75020 PARIS
Tel: 01 43 66 28 54 : Lignes Groupees
Fax: 01-43 66 28 55
By Mr. By Mr. Rudolf Zimmermann
Its President /s/ [ILLEGIBLE] Its Managing Director
7
/s/ [ILLEGIBLE]
Page 40
SECURETEC
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Annex A
Securetec products
- --------------------------------------------------------------------------------
o The main product, produced by Securetec itself is the drug detection kit
,,Drugwipe". Its specifications are mentioned in Annex F.
o The drug-test ,,ESA" is manufactured by the Test Technology Company
Eisenach. Securetec has the right to sell this test in the countries in
request, if the quantities (minimum 1.500 packages per year) are
sufficient.
Page 41
/s/ [ILLEGIBLE]
SECURETEC
[GRAPHIC OMITTED] Sicherheitstechnologie und
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Annex B(1)
Territories and market segments
- --------------------------------------------------------------------------------
Territories for exclusivity:
Pretory shall have exclusive rights for the marketing, sale and distribution of
Securetec's product Drugwipe in the following countries:
o France
o Argentina
Territories for non-exclusivity:
Pretory is allowed to sell Securetec products non-exclusively in the following
countries. They have to inform Securetec about the marketing progress.
o Switzerland
o Belgium (except for traffic control)
o Portugal
o Saudi -Arabia
o United Arab Emirates
o Qatar
o Oman
o Syria
o Jordania
o Irak
o Lebanon
In these countries (non-exclusive) ,once Pretory advices Securetec of a specific
market contact, Securitec will protect Pretory to the best of their ability by
not giving a price immediately to a direct demand from that country without
consulting Pretory.
Page 42
/s/ [ILLEGIBLE]
SECURETEC
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Annex B(2)
Territories and market segments
- --------------------------------------------------------------------------------
Market segments:
The exclusivity will be given for different market segments:
1. Private market, this means:
o pharmacies
o parents
o schools
o hospitals (drug-therapy, rehabilitation)
o companies (working-security)
2. Governement market
o customs
o police
o prisons
o army (sea, air and earth)
Page 43
/s/ [ILLEGIBLE]
SECURETEC
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Annex C
Pricing and delivery conditions
- --------------------------------------------------------------------------------
1. Drugwipe:
Pricing:
<TABLE>
<CAPTION>
----------------------------------
Pieces Price
----------------------------------
<S> <C>
1.000 Pcs. DM 10,50
----------------------------------
5.000 Pcs. DM 9,50
----------------------------------
10.000 Pcs. DM 8,90
----------------------------------
50.000 Pcs. DM 8,50
----------------------------------
</TABLE>
o For actual sellings more than 50.000 per year it will be negiciated
separately.
o All prices are net prices without taxes ex works Securetec.
o Securetec provides full warranty for Drugwipe: one year, until the date
printed on each cover foil
Terms of delivery:
o Shipment costs are fully charged to the customer. We are pleased to
announce shipment costs for your individual order on request. Support to
your own logistics can be supplied be Securetec.
o Schedule: <= 10.000 within 6 weeks
> 10.000 within 3 months (part shipments are possible)
Terms of payment:
o 100 percent of the total value including transport costs within 45 days
after shipment of the goods.
If once the term of payment isn't kept, it will be reduced to 14 days for the
following order.
2) ESA-CHEMICAL TEST
<TABLE>
<CAPTION>
------------------------------------------------------------------
Product Name Description
------------------------------------------------------------------
<S> <C>
ESATest ,,Cocaine" Quick test for the determination of Cocaine
------------------------------------------------------------------
ESATest ,,Opiates/ Quick test for the determination of Opiates
Amphetamines" (Heroin, Morphines) and Amphetamines
------------------------------------------------------------------
ESATest ,,Cannabis" Quick test for the determination of Cannabis
products (THC, Marihuana, Hashish)
------------------------------------------------------------------
ESATest ,,LSD" Quck test for the determination of
halucinogene substances, especially LSD
------------------------------------------------------------------
</TABLE>
Pricing: 1 - 100 packages: 36,00 DM One package contents 10 test kits,
101 - 500 packages 34,00 DM minimum order quantity: 10 packages
> 500 packages 32,00 DM
Minimum orders per year: 1.500 packages
Page 44
/s/ [ILLEGIBLE]
SECURETEC
[GRAPHIC OMITTED] Sicherheitstechnologie und
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Annex D
Sales projections
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
o With signing the contract 5.000 pieces are ordered
o End of 1997 15.000 pieces
o End of 12 months, End of June 1998 50.000 pieces
</TABLE>
If the orders are below the amount of 50.000 pieces at the end of June 1998,
Pretory has to pay the difference between the price for 50.000 Pieces and the
price of the really reached selling amount. If the amount of sold Drugwipes at
the end of 1997 is less than 10.000 pieces, there will be the same conditions as
written in the first sentence.
ESA: Selling-prognose
If Pretory is selling less than 1.500 packages/Year, the difference value
to the actual selling price-level has to be payed to Securetec
Page 45
/s/ [ILLEGIBLE]
SECURETEC
[GRAPHIC OMITTED] Sicherheitstechnologie und
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Annex F (1)
Product-specifications, Demands for transport and stocking
- --------------------------------------------------------------------------------
1 Drugwipe:
Specifications:
Detectable Analytes: - Cannabinoides
- Opiates
- Cocaine
- Amphetamines
Fields of Application: - Identification of controlled drugs
- Examination of various kinds of surfaces for the
presence of cannabis, cocaine, opiates or
amphetamines (search and detection for illegal
narcotics)
Analysis time: 1 minute (2 minutes with sampling)
Dimensions: 13 cm x 2 cm x 0,9 cm
Weight: 11 g
Test principle: Test stripe based immunochemical detection (biosensor)
Sensitivity:
<TABLE>
<CAPTION>
------------------------------------------------------------
Drugwipe type Analyte positive result
with an amount of
------------------------------------------------------------
<S> <C> <C>
,,Opiates" Heroin-HCL >= 25 ng
------------------------------------------------------------
,,Cocaine" Cocaine-HCL >= 10 ng
------------------------------------------------------------
,,Cannabis" (delta)9-THC >= 25 ng
------------------------------------------------------------
,,Amphetamines" Methamphetamine-HCL >= 10 ng
------------------------------------------------------------
</TABLE>
Test procedure: To check sensitivity an anodized aluminium
plate is coated with the respective amounts of
analyte. To cover the aluminium plate with the said
analyte amounts, aqueous solutions of the respective
analyte are applied and dried. The amount of analyte
is determined by volume and concentration of the
applied analyte solutions. Examination of the
respective Drugwipe has to be performed at room
temperature (20(degree)C - 25(degree)C) in
accordance with the instruction sheet. A positive
result is indicated by a red colour developing within
one (!) minute in the detection zone. In dependance of
the concentration present the colour changes between
cream white and red.
Page 46
/s/ [ILLEGIBLE]
SECURETEC
[GRAPHIC OMITTED] Sicherheitstechnologie und
Gefahrstoffdetektion GmBH
Annex F2
Product-specifications, Demands for transport and stocking
- --------------------------------------------------------------------------------
Storage conditions:
Each Drugwipe kit is packed individually to ensure maximum stability and
performance.
Performance of Drugwipe can only be guaranteed up to the date for
best usage printed on each pack,
- - if each Drugwipe kit is stored in the original packaging,
- - at a temperature between +15(degree)C and +25(degree)C (between +59(degree)F
and +77(degree)F)
Transportation:
The temperature during carriage must range below +25(degree)C (+77(degree)F).
This temperature range must not be exceeded for more than +10(degree)C for
longer than 3 days. For storage and transportation each Drugwipe kit must remain
in the original packaging. The approval of not exceeding these conditions shall
be done with a documenting device.
2. ESA-TEST
Specifications:
Detectable Analytes: Opiates and amphetamine; cocaine; LSD and Cannabis.
Field of application: Identification of unknown substances
Test principle: Opiates = Marquis-reagent, Colour changes from white to
red-violett-blue
Cocaine = Scott-reagent, Colour changes from white to pale pink,
then turquoise to bright blue
LSD = Ehrlich's reagent, Colour change from bright yellow to
pink-violett
Cannabis = Fast blue B salt, colour change from whitish grey
to red
Sensitivity (all are depending on the puritiy of the sample):
Opiates = 1 mg
Cocaine = 1 mg
LSD = 10-20 mg
Cannabis = 1 mg
Storage life: Opiates = 1 year at storage temperatures <= 25(degree)C. If
stocked at temperatures <= 10(degree)C (refridgerator), then the
storage time will be 2 years
Cocaine: = 2 years at storage temperature <= 25(degree)C.
LSD = 2 years at storage temperatures <= 25(degree)C.
Cannabis = 2 years at storage temperatures <= 25(degree)C.
Page 47
SECURETEC
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Annex G
- --------------------------------------------------------------------------------
* In the following, the term "contract" doesn't mean the distribution contract,
just single orders.
General Terms and Conditions
1 Validity
1.1 The following Terms and Conditions shall be an integral part of any offer of
SECURETEC and shall apply to all contracts, supplies and services with and by
SECURETEC. The following Terms and Conditions shall apply to all future business
relations between SECURETEC and Customer as well.
1.2 Changes to or exceptions from the Terms and Conditions shall only be
effective if made in writing and signed by the director or a duly authorized
representative of SECURETEC.
1.3 Customer's terms and conditions inconsistent with the terms set forth herein
shall only be valid if confirmed in writing by the director of SECURETEC.
2 Offers
2.1 All offers of SECURETEC shall be without engagement unless confirmed as
binding in writing.
2.2. All indicated prices shall be net prices for export Germany, excluding
value added tax (VAT) of the country which receive the products.
2.3. Other taxes and public charges, including excise taxes, charges for
inspection or examination which might be charged by public authorities of the
country for which the product is delivered, shall therefore not be included in
these prices.
2.4 SECURETEC shall not be obligated to draw Customer's attention to any taxes
and public charges set forth in above paragraph 2.3 All offers submitted by
SECURETEC shall be so construed that Customer shall bear such taxes and public
charges without a special agreement being necessary in this respect.
2.5 The contract shall be concluded by SECURETEC'S written confirmation of
Customer's order or by delivery of the goods according to Customer's order.
3 Passage of Risk, Place of Performance
If the customer organises and pays the transport by himself, all the deliveries
shall be made ex works. The place of performance for all delivery obligations
shall be Riemerling. Shipping of the goods ordered shall be at Customers risk,
i.e. damage and losses suffered and caused by the goods during transport shall
be borne exclusively by Customer.
4 Terms of Delivery
4.1 Unless agreed upon otherwise by the parties, the shipping mode shall be at
SECURETEC's discretion after client's approval of cost and delivery delay.
Securetec shall therefore be free to ship the goods ordered either by plane, or
by railway, ship, or truck. The shipping expenses shall be charged to Customer
at cost price. In this case the shipping of the goods ordered shall be at
SECURETEC'S risk, i.e. damage and losses suffered and caused by the goods during
transport shall be covered by SECURETEC.
4.2 Unless expressly agreed upon otherwise in writing, delays in delivery or the
non-observance of delivery deadlines shall not entitle customer to cancel the
contract or to claim damages.
5 Part Shipments
SECURETEC shall be entitled to fulfil its supply obligation towards Customer by
part shipments, unless such part shipments are not in Customer's interest and
this has been mentioned in the specific command in question.
6 Time Limit for Lodging a Complaint
6.1 Customer shall check immediately all goods received and notify any visible
defect to SECURETEC without any delay, however within 5 days as from receipt of
goods, at the latest. In case the complaint has been received in due time,
SECURETEC shall notify Customer how these goods shall be dealt with. In such an
event, Customer shall store the goods for a reasonable period of time at his own
cost. The reshipping to Securetec will be at Securetecs cost.
6.2 Complaints shall be made in writing and shall specify the defect(s) in a
precise manner.
7 Terms of Payment
7.1 Unless otherwise specified on the invoice, invoices shall fall due and be
payable within 45 days from the date of the invoice without any deduction. This
shall also apply to invoices for part shipments to which SECURETEC is entitled
pursuant hereto, if this way of delivery is specified in the command of the
customer or if the two parties agree to accept part shipments in one command.
7.2 In case of delayed payment, SECURETEC shall be entitled to invoice a penalty
interest on arrears at a rate which is at least 11% per year.
7.3 If SECURETEC is informed about circumstances indicating that payment of the
purchase price may be endangered, it shall be entitled to demand advance
payment. In particular, this shall be the case if Customer is in default of
payment of other due invoices.
7.4 Customer may only setoff against SECURETEC's claims for the payment of the
purchase price if and to the extent that his counterclaim is undisputed or has
become final and absolute.
8 Rescission of Contract by SECURETEC
8.1 SECURETEC shall be entitled to rescind the contract if delivery of the goods
ordered by Customer has become impossible as a result of the fact that
SECURETEC's own suppliers fail to deliver the
Page 48
SECURETEC
[GRAPHIC OMITTED] Sicherheitstechnologie und
Gefahrstoffdetektion GmBH
- --------------------------------------------------------------------------------
reasonable efforts of SECURETEC.
8.2 SECURETEC shall be entitled to rescind the contract if the execution of its
contractual obligations becomes impossible as a result of circumstances for
which it is not responsible, even if such circumstances fall in SECURETEC's
orbit of influence. This shall apply in particular to Acts of God, strikes,
material shortages, illnesses and other disturbances of SECURETEC's operation,
transport delays etc.
9 Rescission of Contract/Cancellation of Order by Customer
If Customer unilaterally cancels the contract, an order or a part order, he
shall indemnify SECURETEC for all costs incurred as a result of the rescission
of the contract or the cancellation of the order; this shall apply in particular
to all cancellation expenses invoiced to SECURETEC by its suppliers, the cost of
materials which cannot be returned to the supplier as well as all other cost
incurred by SECURETEC for the performance and the cancellation of the order such
as costs for transport, lawyers etc.
10 Delayed performance/delivery
If SECURETEC is in delay more than 60 days, Customer shall be entitled to
rescind the contract and shall be entitled to claim possible penalties for
non-fulfilment of a contract, if Securetec has agreed with such a contract (see
point 5.3, guarantees).
11 Warranty
11.1 SECURETEC warrants that its products correspond to the descriptions
contained in catalogues, technical data sheets or other documents made available
to Customer. But SECURETEC does not guarantee that the supplied products meet
any Customer's expectations extending the contractual purpose and use.
11.2 In any case, Customer's warranty claims for defects of the purchased goods
shall be limited to the right to remedy the defects and the right to substitute
delivery. However, if remedy or substitute delivery fail, Customer shall be
entitled to demand a reduction of purchase price or to rescind the contract.
11.3 The remedy of the defects or the substitute delivery shall be made at
SECURETEC's cost.
12 Warranted Qualities
12.1 Unless expressly agreed upon otherwise, SECURETEC's products may not be
used for other purposes than those mentioned in its documents.
13 Technical Advice
Upon request, SECURETEC advise Customer to its knowledge and within
possibilities on the use of products, however without liability.
14 Retention of Title
14.1 SECURETEC reserves the ownership of all delivered goods until full payment
of purchase price.
14.2 As long as the retention of title remains effective, Customer shall not be
entitled to pledge or to transfer by way of security the ownership of the goods
under retention of title.
14.3 If the goods under retention of title are processed or converted by
Customer, SECURETEC shall be considered as the manufacturer of the final
products resulting from such processing or converting and therefore as their
owner.
14.4 Customer herewith assigns by way of security all claims resulting from the
- - justified or unjustified - sale or utilization of the goods under retention of
title to SECURETEC, who accepts. However, Customer shall be entitled to collect
such claims on his own behalf and for SECURETEC's account.
14.5 In case of seizure of the goods under retention of title by third
parties, in particular in case of levy upon property or other compulsory
execution actions concerning Customer's assets, Customer shall point out to
SECURETEC's ownership, inform SECURETEC immediately and provide all documents
required for an intervention. The cost for such intervention shall be borne by
Customer.
15 Proprietary Rights and Rights of Use
15.1 SECURETEC shall not be liable for any violation of national or
international proprietary rights resulting from the sale and use by Customer of
the products delivered by SECURETEC. Therefore, the Customer shall ensure that
resale and use of the product do not violate any third party right. In case of
such a violation, claims for damages against SECURETEC shall be excluded.
Securetec will inform the customer about the measures, which are taken for
protecting the international proprietary rights, especially in the countries for
which the customer have the exclusive selling rights. The customer will inform
Securetec about the suppositions for permission in the country for which the
goods are intended. Every changing of the product name has to be communicated.
15.2 Customer undertakes to indemnify and hold SECURETEC harmless from all
claims for damages raised by third parties on the violation by Customer of any
proprietary rights and rights of use of third parties.
16 Place of Jurisdiction, Choice of Law
The contracts, deliveries and services of SECURETEC are governed by German law.
The place of jurisdiction for all litigations resulting therefrom shall be
Zurich, Switzerland.
Riemerling, April 1997
Page 49
SECURETEC
[GRAPHIC OMITTED] Sicherheitstechnologie und
Gefahrstoffdetektion GmBH
Annex H
Frontline
- --------------------------------------------------------------------------------
Securetec is able to offer Frontline, made by Securetec's partner Bohringer
Mannheim.
Securetec can't give the exclusive selling-rights for Frontline to Pretory,
because Bohringer Mannheim has his own company in France, for example.
Frontline has the following specifications:
o Detectable analytes are the same as Drugwipe's (annex F).
o Field of application is the urine-test.
o Analysis-time is 1-2 minutes.
o Small stripe, about 10 cm x 0.5 cm, packed in a box with 10 or 30
stripes.
o Test principle is the same immunochemical biosensor as Drugwipe
o Sensitivity: opiates > 200ng/ml; cocaine > 300 ng/ml; cannabis > 5Ong/ml
Prices:
Pieces Price
1.000 Pcs. DM 8,50
5.000 Pcs. DM 8,00
10.000 Pcs. DM 7,70
50.000 Pcs. DM 7,60
100.000 Pcs. DM 7,40
(packed in units of ten strips, subdivision not possible)
Page 50
Ion Track Instruments Distributorship Contract
(Importer-Distributor)
Between Ion Track Instruments, Inc.
Whose registered office is at
340 Fordham Road
Wilmington, MA 01887
Tel: 508-658-3767 Fax: 508-657-5954
(hereinafter called "the supplier")
and
Pretory S.A. Pretory USA Inc.
Whose registered office is at 3838 Camino Del Rio North
182 Rue Des Pyrenees Suite 333
75020, Paris San Diego, CA 92108-1789
France
Tel: 011-33-01-43 66 25 54 Fax: 011-33-01-43-66-28-55
(hereinafter called "the Distributor")
It is agreed as follows:
Article 1 Territory and Products
1.1 The supplier grants and the Distributor accepts the right to market and
sell the products listed in Annex I, ss.1 (hereinafter called "the
Products") in the territory defined in Annex, I ss.2 (hereinafter called
the Territory") on a non-exclusive basis.
1.2 If the supplier decides to market any other products in the Territory, it
shall so inform the Distributor in order to discuss the possibility of
including such other products within the Products defined under Article
1.1. However, the above obligation to inform the Distributor does not
apply it in consideration of the characteristics of the new products and
the specialization of the Distributor, it is not to be expected that such
products may be marketed by the Distributor (e.g. products of a completely
different range).
1.3 Distributor is the exclusive Distributor in France and its territories. If
Distributor does not sell at least three ITEMISER(R)'s within the first
three months after the signing of this agreement, Distributor agrees to
purchase three ITEMISER(R)s for its own account. For other countries,
Supplier and Distributor will agree to review this agreement for possible
amendment of exclusivity in that country after three units are sold in
that country.
Article 2 Good faith and fair dealing
2.1 In carrying out their obligations under this contract, the parties will
act in accordance with good faith and fair dealing.
2.2 The provisions of this contract, as well as any statements made by the
parties in connection with this distributorship relationship, shall be
interpreted in good faith.
Page 51
Article 3 Distributor's functions
3.1 The Distributor sells in its own name and for its own account, in the
Territory, the Products supplied by the Supplier.
3.2 The Distributor agrees to use its best efforts to promote the sale of the
Products in the Territory in accordance with the Supplier's policy and
shall protect the Supplier's interests with the diligence of a responsible
businessman.
3.3 The Distributor is not entitled to act in the name or on behalf of the
Supplier, unless previously and specifically authorized to do so by the
latter.
3.4 The Distributor, solely at its discretion, may, in cases in which it does
not want to buy and resell, refer such business to the Supplier for a
direct sale to the customer. For such activity as intermediary the
Distributor will receive a commission as set out in Annex II, ss.1 (if
completed) or otherwise to be agreed upon case by case, to be calculated
and paid according to Annex II, ss.3. It is expressly agreed that activity
as intermediary, to the extent it remains of an accessory character, does
not modify the legal status of the Distributor as a trader acting in its
own name and for its own account.
Article 4 Undertaking not to compete
4.1 The Distributor may not represent, manufacture, market or sell in the
exclusive Territory any products which are in competition with the
Products.
4.2 The Distributor declares that it represents (and/or manufactures, markets
or sells, directly or indirectly), as of the date on which this contract
is signed, the products listed in Annex III.
Article 5 Sales organization
5.1 The Distributor shall set up and maintain an adequate organization for
sales, and, where appropriate, after-sales service, with all means and
personnel as are reasonably necessary in order to ensure the fulfillment
of its obligations under this contract for all Products and throughout the
Territory.
Article 6 Advertising and Fairs
6.1 The parties shall discuss in advance the advertising program for each
year. All advertising should be in accordance with the Supplier's image
and marketing policies, and the content must be approved by the Supplier.
The costs of agreed advertising may be shared between the parties if
agreed in advance; other-wise, each party will bear the advertising
expenses it has incurred.
6.2 The parties shall agree on their participation in fairs or exhibitions
within the Territory. The costs of the Distributor's participation in such
fairs and exhibitions may be shared between the parties if agreed in
advance.
Article 7 Conditions of supply Prices
7.1 The Supplier shall in principle supply all Products ordered, subject to
their availability, and provided payment of the Products is adequately
warranted. The Supplier may not unreasonably reject orders received from
the Distributor; in particular, a repeated refusal of orders contrary to
good faith (e.g. if made for the purpose of hindering the Distributor's
activity) shall be considered as a breach of contract by the Supplier.
7.2 The Supplier agrees to make its best efforts to fulfill the orders it has
accepted.
7.3 Sales of the Products to the Distributor shall be governed by the
Supplier's general conditions of sale, the currently applicable version of
which is attached to this Contract (Annex IV, ss.1), and by the United
Nations Convention on contracts for the international sale of goods
(Vienna 1980). In
Page 52
case of conflict between such general conditions and the terms of this
Contract, the latter shall prevail.
7.4 The prices payable by the Distributor shall be those set forth in the
Supplier's price-list in force at the time the order is received by the
Supplier with the discount indicated in Annex IV, ss.2. Unless otherwise
agreed, such prices are subject to change with one month's notice.
7.5 The Distributor agrees to comply, with the utmost care, with the terms of
payment agreed upon between the parties.
7.6 It is agreed that the Products delivered remain the Supplier's property
until the Supplier has received payment in full.
Article 8 Sales targets
8.1 The parties may agree annually on the sales targets for the forthcoming
year.
8.2 The parties shall make their best efforts to attain the targets agreed
upon, but the non-attainment shall not be considered as a breach of the
contract by a party, unless that party is clearly at fault.
Article 9 Sub-distributors or agents
9.1 The Distributor may appoint sub-distributors or agents for the sale of the
Products in the Territory, provided the Distributor informs the Supplier
before the engagement.
9.2 The Distributor shall be responsible for its sub-distributors or agents.
Article 10 Supplier to be kept informed
10.1 The Distributor shall exercise due diligence to keep the Supplier informed
about the Distributors activities, market conditions and the state of
competition within the Territory. The Distributor shall answer any
reasonable request for information made by the Supplier.
10.2 The Distributor shall exercise due diligence to keep the Supplier informed
about: (i) the laws and regulations which are applicable in the Territory
and relate to the Products (e.g. import regulations, labeling, technical
specifications, safety requirements, etc.), and (ii), as far as they are
relevant for the Supplier, the laws, and regulations concerning the
Distributors activity.
Article 11 Resale prices
11.1 The Distributor is free to fix the resale prices of the Products. The
Distributor shall avoid such pricing policies as would clearly adversely
affect the image of the Products. The Supplier is free to quote its
current list prices in accordance with 7.4 directly to customers within
the Territory.
Article 12 Sales outside the Territory
12.1 The Distributor agrees not to advertise the Products or establish any
branch or maintain any distribution depot for distribution of the Products
outside the Territory.
Article 13 Suppliers trademarks and symbols
13.1 The Distributor shall use the Supplier's trademarks, trade names or any
other symbols. However, the Distributor may do so only for the purpose of
identifying and advertising the Products within the scope of this contract
and in the Supplier's sole interest.
13.2 The Distributor agrees neither to register, nor to have registered, any
trademarks, trade names or symbols of the Supplier (or which are
confusingly similar to the Supplier's), in the Territory or elsewhere.
Page 53
13.3 The Distributor's right to use the Supplier's trademarks, trade names or
symbols, as provided for under the first paragraph of this Article, shall
cease immediately upon the expiration or termination, for any reason, of
the present contract. This does not preclude the Distributor's right to
sell the Products in stock at the date of expiration of the contract which
bear the Supplier's trademarks.
13.4 The distributor shall notify the Supplier of any infringement in the
Territory of the Supplier's trademarks, trade names or symbols, or other
industrial property rights, that comes to the Distributor's attention.
Article 14 After-sales service
14.1 The Distributor agrees to provide after-sales service according to the
terms and conditions set out in Annex V. This clause is applicable only if
Annex V is signed by the parties.
Article 15 Not Applicaple
Article 16 Direct Sales
16.1 The Supplier shall be entitled to deal directly with any customers who
wish to deal directly with the Supplier; in respect of the sales to such
customers, the Distributor shall be entitled to the commission provided
for in Annex II, ss.2.
16.2 Whenever a commission is due to the Distributor, it shall be calculated
and paid according to Annex II, ss.3. In the event of termination of this
contract, commissions will be paid on any documented outstanding
quotations for a period of six months.
Article 17 Distributor to be kept informed
17.1 The Supplier shall provide the Distributor free of charge with all
documentation relating to the Products (brochures, etc.) reasonably needed
by the Distributor for carrying out its obligations under the contract.
The Distributor shall return to the Supplier, at the end of this contract,
all documents which have been made available to it by the Supplier and
which remain in its possession.
17.2 The Supplier shall provide the Distributor with all other information
reasonably needed by the Distributor for carrying out its obligations
under the contract, including without limitation any information regarding
a material decrease in its supply capacity.
17.3 The Supplier shall keep the Distributor informed of any relevant
communication with customers in the Territory.
Article 18 Term of the Contract
18.1 This contract is concluded for an indefinite period and enters into force
when signed by both parties.
18.2 This contract may be terminated by either party at any time by notice
given in writing by means of communication ensuring evidence and date of
receipt (e.g. registered mail with return receipt, courier service, or fax
transmission), not less than two months in advance. The end of the period
of notice must coincide with the end of a calendar month.
Article 19 Earlier Termination
19.1 Each party may terminate this contract with immediate effect, by notice
given by means of communication ensuring evidence and date of receipt
(e.g. registered mail with return receipt,
Page 54
courier service, or fax transmission), in case of substantial breach by
the other party of the obligations arising out of the contract, or in case
of exceptional circumstances justifying the earlier termination.
19.2 Any failure by a party to carry out all or part of its obligations under
the contract resulting in such detriment to the other party as to
substantially deprive such other party of what it is entitled to expect
under the contract, shall be considered a substantial breach for the
purpose of Article 19.1 above. Circumstances in which it would be
unreasonable to require the terminating party to continue to be bound by
this contract shall be considered as exceptional circumstances for the
purpose of Article 19.1 above.
19.3 The parties hereby agree that the violation of the provisions under
Articles 4 and 7 of the present contract is to be considered a prima facie
evidence of a substantial breach of the contract. Moreover, any violation
of the contractual obligations may be considered a substantial breach if
such violation is repeated notwithstanding a request by the other to
fulfill the contract obligations.
19.4 The parties agree that the following situations shall be inter alia
considered as exceptional circumstances which justify the earlier
termination by the other party: bankruptcy, moratorium, receivership,
liquidation or any kind of arrangement between debtor and creditors, or
any other circumstances which are likely to affect substantially that
party's ability to carry out its obligations under this contract.
19.5 The parties agree that the contract may also be terminated by the Supplier
with immediate effect in case of change of control, ownership and or
management of the Distributor.
19.6 If a party terminates the contract invoking this Article, but the reasons
(if any) put forward by that party do not justify the earlier termination,
the termination will be effective, but the other party will be entitled to
damages for the unjustified earlier, termination. Such damages will be
equal to the average profits of the sales of the Products for the period
of the contract would have lasted in case of normal termination, based on
the turnover of the preceding year, unless the damaged part proves that
the actual damage is higher (or, respectively, the party having terminated
the contract proves that the actual damage is lower).
Article 20 Indemnity in case of termination
20.1 The Distributor shall not be entitled to an indemnity for goodwill or
similar compensation ("indemnity") in case of termination of the contract.
20.2 The above provision does not affect the Distributor's right to claim
damages for breach of contract insofar as the termination by the Supplier
amounts to such a breach, and is not already covered by Article 19.6.
Article 21 Return of documents and products in stock
21.1 Upon expiry of this contract, the Distributor shall return to the Supplier
all promotional material and other documents and samples with have been
supplied to it by the Supplier and are in the Distributor's possession.
21.2 At the Distributor's option, the Supplier will buy from the Distributor
all Products the latter has in stock, provided they are still currently
sold by the Supplier and are in new condition and in original packaging,
at the price originally paid by the Distributor. Products not so purchased
by the Supplier must be sold by the Distributor in accordance with the
contract on usual terms.
Article 22 Arbitration - Applicable law
22.1 Any dispute arising out of or in connection with the present contract
shall be finally settled in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce by one or more
arbitrators appointed in accordance with said Rules.
Page 55
22.2 Any questions relating to this contact which are not expressly or
implicitly settled by the provisions contained in this contract shall be
governed by the principles of law generally recognized in international
distribution contracts, with the exclusion - subject to Article 22.3
hereunder - of national laws.
22.3 In any event, consideration shall be given to mandatory provisions of the
law of the country where the Distnbutor is established which would be
applicable even if the contract is governed by a foreign law. Any such
provisions will be taken into account to the extent they embody principles
which are universally recognized and provided their application appears
reasonable in the context of international trade.
Article 23 Automatic inclusion under the present contract
23.1 The Annexes attached to this contract form an integral part of the
contract.
Article 24 Previous Agreements - Modifications - Nullity - Assignment
24.1 This contract replaces any other preceding agreement between the parties
on the subject.
24.2 No addition or modification to this contract shall be valid unless made in
writing. However, a party may be precluded by its conduct from asserting
the invalidity of additions or modifications made in writing to the extent
that the other party has relied on such conduct.
24.3 If any provision or clause of this contract is found to be null or
unenforceable, the contract will be construed as a whole to effect as
closely as practicable the original intent of the parties; however, if for
good cause, either party would not have entered into the contract knowing
the interpretation of the contract resulting from the foregoing, the
contract itself shall be null.
24.4 The present contract cannot be assigned without the prior written consent
of the parties.
Article 25 Authentic text
25.1 The English test of this contract is the only authentic text.
The Supplier The Distributor
PRETORY S.A.
182, rue des Pyrenees
B.P. 12
75965 PARIS CEDEX 2O
Tel. 01.43.66.28.54: Lignes Groupees
/s/ [Illegible] Fax 01.43.66.28.55
- ---------------------------- ----------------------------------------
Made in on the
Paris 01 Fevrier 1998
- ---------------------------- ----------------------------------------
Page 56
Annex I
Products and Territory
ss.1. Products
All Products manufactured by Ion Track Instruments
All Third Party (Factored) Products on Ion Track Instruments Price List
All Spare Parts and Consumable Supplies sold by Ion Track Instruments
ss.2. Territory
France and its territories; all African countries except Egypt, South
Africa and Zimbabwe, all Persian Gulf countries, except Iran and Iraq, other
countries as agreed in advance on a case by case basis.
Annex II
Commission on Direct Sale
1. Normal Commission
1.1. When acting as an intermediary, according to Article 3.4, the
Distributor is entitled to a commission of 25 % on Products
manufactured by the Supplier, 20 % on Third Party (Factored)
Products sold by the Supplier, and 10 % on Spare Parts and
Consumable Supplies sold by the Supplier.
2. Calculation and Payment of Commissions
2.1. The commission shall be calculated on the net amount of the
invoices, e.g. on the effective sales price (any discount other than
cash discounts being deducted) clear of any additional charges (such
as packing, transportation, insurance) and clear of all duties or
taxes (including value-added tax) of any kind, provided that such
additional charges, duties and taxes are separately stated in the
invoice.
2.2. The Distributor shall acquire the right to commission after full
payment by the customers of the invoiced price. In case of partial
payment made in compliance with the sales contract, the Distributor
shall be entitled to a proportional advance payment.
2.3. Should any governmental authorization (e.g. due to exchange control
regulations in the Supplier's country) be necessary for the Supplier
to transfer abroad the commission (or of any other sum the
Distributor may be entitled to receive), then the payment of the
amount shall be made after such authorization has been given. The
Supplier shall take in due time all necessary steps for obtaining
the above authorizations.
2.4. Except as otherwise agreed, the commission shall be calculated in
the currency of the sales contract in respect of which the
commission is due.
2.5. Any taxes imposed on the Distributor's commission in the Territory
are for the Distributor's account.
Page 57
Annex III
Products and Suppliers Represented by the Distributor
The Distributor hereby declares that it represents (and/or manufactures, markets
or sells, directly or indirectly) on the date which this contract is signed, the
following products for the following suppliers:
SUPPLIER PRODUCTS
Securetec Drugwipe, ESA Test
Heimann Systems / Europscan All Products
Adams All Products
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Page 58
Annex IV
Conditions of Sale - Discounts
ss.1. Suppliers general conditions of sale are attached to this annex.
ss.2. Discounts and/or prices granted to the Distributor:
The Distributor is granted a discount of 25 % on the list prices of
Products manufactured by Ion Track Instruments referred to in Article 7.4.
The Distributor is granted a discount of 20 % on the list prices of Third
Party (Factored) Products sold by Ion Track Instruments referred to in
Article 7.4.
The Distributor is granted a discount of 10 % on the current prices of
Spare Parts and Consumable Supplies sold by Ion Track Instruments.
ss.3. As an incentive to the Distributor, for every five units sold in any
calendar year, an additional 1% commission will be paid retroactive to the
first unit sold and added to the existing commission level to a maximum of
30%
Annex IV ss.1. Cont. Suppliers General Conditions of Sale
ACCEPTANCE: Ion Track Instruments, Incorporated ("ITI") offers for sale the
items of equipment listed on the face hereof ("Items") on the express condition
that the purchaser named on the face hereof ("Purchaser") agrees to accept and
be bound by all the terms and conditions set forth herein. Acceptance by the
Purchaser shall be evidenced by any of the following: (a) written, telephonic or
telegraphic acceptance received by ITI within 30 days from the date hereof
(including receipt of Purchaser's purchase order form); (b) shipment by ITI and
acceptance of delivery by Purchaser of or payment for all or any of the items.
AGREEMENT: The agreement between ITI and Purchaser ("Sales Contract") with
respect to the items shall consist of the terms and conditions contained herein
together with any additions to or revisions agreed to in writing by ITI and
Purchaser. ITI shall not be bound by, and hereby objects to and rejects any
additional or different terms, whether printed or otherwise, in Purchaser's
purchase order or in any communication between Purchaser and ITI, unless
specifically agreed to by ITI in writing. Prior courses of dealing, usage's of
the trade, and verbal agreements shall not be binding on ITI, and ITI hereby
objects to and rejects any additional or different terms, not so agreed to in
writing.
TERMS: Net 30 days from invoice date subject to the approval at the time of
shipment. Payments will be due on partial deliveries to Purchaser.
DELIVERY: ITI will make reasonable efforts to effect shipment on or before the
estimated delivery dates set forth on ITI's quotation and acknowledgment. ITI
shall not be liable for delays in shipment or delivery.
SHIPMENT: All prices are F.C.A. place of shipment. In the absence of specific
instructions, ITI will package and ship by the most appropriate method, in its
sole discretion.
TITLE: Title to all items shall pass from ITI to Purchaser at the place and time
of shipment. If Purchaser should fail to pay any amount due to ITI hereunder,
ITI shall have, in addition to any other rights, the right to repossess such
items. In addition, until Purchaser has paid such amount due to ITI, ITI shall
retain a security interest in such items in the amount of the full purchase
price, and shall retain all rights and remedies of a secured party under the
Uniform Commercial Code. A copy of ITI's invoice may be filed with the
appropriate authorities as a financing statement or chattel mortgage to perfect
ITI's security interest. Upon the request of ITI, Purchaser will execute
financing statements and other documents for ITI to perfect its security
interest.
INSPECTION BY PURCHASER: Purchaser shall inspect all deliveries upon receipt and
report to ITI within 5 working days of the date of delivery any alleged error,
shortage, defect or non-conformity. Failure by Purchaser so to inspect and
report shall constitute a waiver of any claim or right of Purchaser against ITI
arising from any error, shortage, defect or non-conformity reasonably
discoverable by such an inspection.
INSURANCE: The risk of loss, damage to or destruction of the items shall be
assumed by the Purchaser upon passage of title to Purchaser. Transportation and
insurance costs shall be paid by the Purchaser. Claims for damage, loss or
delays in transit shall be against the carrier, and ITI shall have no
responsibility or obligations thereof.
CANCELLATION CHARGE: Purchaser is subject to a cancellation charge of 15% of the
total Sales Contract price for orders canceled at no fault of ITI. In addition,
Purchaser shall pay ITI the full amount of any quantity discount obtained by
Purchaser with respect to other items of equipment which was attributable to the
items included in the canceled order.
LIMITED WARRANTY: ITI warrants that the items will be free from defects in
material and workmanship for a period of twelve (12) months from date of
shipment. ITI will repair or replace, at its option, Items which prove to be
defective during this warranty period only if (a) the defective item is returned
to ITI, transportation charges prepaid, and (b) examination of the item
discloses the defects in the product have not been caused by misuse, neglect,
improper installation, repair, alteration, or accident. Items supplied
Page 59
by ITI but manufactured by others, such as TV components, computers, or
software, are excluded from ITI's warranty but may be covered by the
manufacturer's warranty (if any). Consumable items supplied by ITI are excluded
from this warranty, such as filters, membranes, seals, and other identified
items.
THE ABOVE WARRANTY IS EXCLUSIVE. ITI MAKES NO OTHER WARRANTIES, EITHER EXPRESS
OR IMPLIED. NO IMPLIED WARRANTY OF MERCHANTABILITY, NO IMPLIED WARRANTY OF
FITNESS FOR ANY PARTICULAR PURPOSE, AND NO IMPLIED WARRANTY ARISING BY USAGE OF
TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE IS GIVEN BY ITI OR SHALL ARISE
BY OR IN CONNECTION WITH THIS SALE AND/OR PURCHASER'S AND/OR IT'S CONDUCT IN
RELATION THERETO OR TO EACH OTHER, AND IN NO EVENT SHALL ITI BE LIABLE ON ANY
SUCH WARRANTY WITH RESPECT TO ANY ITEM. IF ANY MODEL OR SAMPLE WAS SHOWN TO
PURCHASER, SUCH MODEL OR SAMPLE WAS USED MERELY TO ILLUSTRATE THE ITEMS AND NOT
TO REPRESENT THAT ITEMS DELIVERED HEREUNDER WOULD CONFORM TO THE MODEL OR
SAMPLE. NO REPRESENTATIVE OF ITI IS AUTHORIZED TO GIVE OR MAKE ANY OTHER
REPRESENTATION OR WARRANTY OR MODIFY IT'S WARRANT IN ANY WAY.
TAXES: Purchaser shall be responsible for and pay any and all state and local
use, sales and similar taxes.
LIMITATION ON LIABILITY: The obligations of ITI and the remedies provided to
Purchaser under "WARRANTY" above shall constitute the exclusive liabilities of
ITI and remedies of Purchaser under or in connection with the items or the use
or transfer thereof. Except as specifically provided therein. ITI shall not be
responsible or liable for any costs, expenses or damages.
IN NO EVENT SHALL ITI BE RESPONSIBLE OR LIABLE FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES ARISING IN ANY WAY IN CONNECTION
WITH THIS SALE, EVEN IF ITI HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
PURCHASER AGREES TO TAKE NO ACTION, AND NOT ASSIST ANY OTHER PERSON IN TAKING
ACTION, THE RESULT OR PURPOSE OF WHICH IS TO DEROGATE IN ANY MANNER ANY
PROVISION OF THIS SECTION. PURCHASER FURTHER AGREES TO INDEMNIFY AND HOLD
HARMLESS ITI (AND TO DEFEND IT) FROM ANY AND ALL EXPENSES AND CLAIMS WHICH MAY
ARISE FROM OR IN ANY MANNER RELATED TO THE USE, DESIGN, INSTALLATION OR
MAINTENANCE OR THE TERMS.
LIMITATION OF ACTION: No action may be brought by either party more than one
year after the cause of action arose, or in the case of non-payment, more than
two years from the date of last payment.
CONTROLLING LAW: The Sales Contract shall be construed in accordance with the
Laws of the Commonwealth of Massachusetts.
Page 60
Annex V
After Sales Service, Repairs, Warranty
This annex shall be applicable only if signed by the parties
ss.1. The Distributor agrees to provide, at its expense and with its own
personnel and technical means, suitable after-sales service which shall
extend to all the Products in respect of which such assistance may be
required in the Territory. Such after-sales service shall be provided in
accordance with the standards indicated by the Supplier.
ss.2. The Supplier shall provide the Distributor with the training necessary to
enable the latter's personnel to provide the above services. The
Distributor agrees that, at its own expense, its technical and sales
personnel will participate in such relevant training and updating courses
as the Supplier may decide to organize.
ss.3. The Distributor shall carry out free of charge all repairs and
replacements provided for in the warranty conditions of the Supplier and
shall bear all the expenses of such service. The Supplier shall supply the
Distributor with the items or parts needed to replace defective items or
parts under the warranty conditions.
ss.4. After expiration for whatever reason of this contract, the Distributor
shall discontinue any after sale or warranty service, unless otherwise
agreed in writing between the parties. Any request from the customers
shall be transmitted by the Distributor to the persons indicated by the
Supplier.
The Supplier The Distributor
PRETORY S.A.
182, rue des Pyrenees
B.P. 12
75965 PARIS CEDEX 2O
Tel. 01.43.66.28.54: Lignes Groupees
/s/ [Illegible] Fax 01.43.66.28.55
- ---------------------------- ----------------------------------------
Page 61
Agreement
The purpose of this Agreement is to firmly establish the relationship between
the necessary parties to advance in the Bosnia-Herzagovia NPA Humanitarian
Demining Project.
Step #1
Internal Parties: IADE, CHI Companies, MLC, Pretory
External Parties: NPA, B-H MAC, UNMAS, IOHD, news media, etc.
Here are the responsible parties and the associated requirements:
1. Pretory
o Prepare the operational plan.
o Develop and execute the marketing plan.
o Coordinate necessary support requirements from external parties.
o Manage the execution of the project.
o Fund the successful result once proper documentation is provided within
30 days of the conclusion of the project. There is no funding without
success.
o With a successful result manage the development of new business.
2. MLC
o Manage and coordinate requirements in accordance with the operational
plan for MLC, CHI and IADE.
o Insure that all assets are available to execute operational plan in the
time frame and manner specified and agreed to by all parties.
o Fund effort as required until technology is proven to be successful.
o Document all expenses required by MLC, CHI, or IADE to enable the
project through its successful conclusion. Documentation will be
reviewed and approved by all parties and reviewed by a mutually
selected third party.
o Develop a list of all monthly, quarterly, and annual business costs so
that a proper business plan can be developed to continue the business
into the future if the effort is successful.
o Support the Project Manager as required.
3. CHI Companies
o Support the coordination of all administrative, logistical, support,
and technical requirements in accordance with the operational plan
with all internal parties.
o Fund effort as required until technology is proven to be successful.
o Support the Project Manager as required.
4. IADE
Page 62
o Provide technology, know-how and support to insure the success of the
Project.
o Provide clear documentation of the capabibilties, the support
requirements, and the license to use the intellectual property of the
thermal imaging complex exclusively internationally.
o Analysis and presentation of results.
o Support the Project Manager as required.
Definition of success of the NPA Project:
1. All personnel and equipment are present as agreed between all internal
parties and function properly so that the test can be detected.
2. a) The IADE thermal imaging complex positively identifies the location of
mines in the NPA Training Minefield, Sarajevo with an accuracy of 99.7%
(United Nations definition of successful humanitarian demining) and must
identify the known locations of the mines within 25 cm. The thermal map
created by IADE will be compared to the documented location of the mines
by NPA.
b) The IADE thermal imaging complex positively identifies the location of
mines in seven confirmed or suspected minefields with mines in unknown
locations around Sarajevo. To be judged a success, two minefields randomly
selected from the seven can be successfully demined using the IADE
produced result.
c) In all cases IADE will produce the results in a format that can be
understood by all Project participants, but most importantly by the NPA
deminers.
Sequence of Events and Requirements with proiect Success
All internal parties agree that if the Project is successful that Pretory will
have the right to purchase the rights to the technology, sign employment
agreements with all necessary support personnel, and assume any lease or
purchase agreements in place and necessary to continue to the next project. All
internal parties will work together to put these agreements in place with
mutually agreeable terms as soon as possible after the project is deemed
successful.
Signed and Agreed in Paris, 30 July 1999:
/s/ [Illegible] /s/ [Illegible] /s/ [Illegible] /s/ [Illegible]
for MLC for IADE for Pretory for CHI
Page 63
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934 Pretory
USA Inc. caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
PRETORY USA, INC.
By:_____________________
Raquel Velasco
Chairman of the Board and President
Dated: January 3, 2000
Page 64
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This schedule contains summary financial information extracted from the
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<INCOME-CONTINUING> 293,729 (271,192)
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