Seychelle 10-KSB 2-28-06 Amend 1 Ex 10-K Confient Agree


    Exhibit
      10K

    


    Exclusive
      Distribution Rights Agreement

    


    AGREEMENT
      (the
      "Agreement") dated as of January 1 2006, by and between CONFIDENT
      INC. and Its Nominee (DISTRIBUTOR),
      having its principal offices at 30616 Sand Trap Drive, Agoura Hills, CA 91301
      and SEYCHELLE
      ENVIRONMENTAL PRODUCTS JNC.
      ("SEYCHELLE"), having its principal offices at 33012 Calle Perfecto, San Juan
      Capistrano, CA 92675.

    


    WHEREAS,
      DISTRIBUTOR now desires to be designated by SEYCHELLE as the exclusive
      distributor within the Peoples Republic of China, Hong Kong, Singapore and
      Taiwan (Hereinafter referred to as "The Territory") of the water fil1ration
      products manufactured and sold by SEYCHELLE which products are described on
      Exhibit
      "A"
      hereto
      (and are each herein referred to individually as a "Product" and, collectively,
      as the "Products"), and thereby to have and hold the exclusive right to
      distribute and sell each of the Products within The Territory during the time
      periods provided herein; and

    


    WHEREAS,
      SEYCHELLE is willing to designate and empower DISTRIBUTOR as the exclusive
      distributor of the Products in The Territory on the terms and conditions, and
      for the time periods set forth herein.

    


    NOW
      THEREFORE,
      in
      consideration of the mutual covenants herein contained, and for other and good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto, intending to be legally bound hereby, agree
      as
      follows:

    


    1.
      Grant of Exclusive Distribution Rights.

    


    A.
      SEYCHELLE hereby grants to DISTRIBUTOR the exclusive right to distribute and
      sell each of the Products within the The Territory for and during an initial
      period of five (5) years commencing on April 1, 2006, and ending on March 31,
      2011. Details are provided in Section (vi) below. .

    


    B.
      The
      parties hereto understand and agree that the scope of the rights so granted
      (the
      '"Exclusive Distribution Rights") shall mean, include and encompass the
      following:

    


    (i) DISTRIBUTOR
      shall be the only persons or entities who may sell or distribute
      for  resale
      any of the Products within The Territory, and from whom SEYCHELLE shall
accept
      any purchase order for any of the Products for shipment to The Territory
      for  sale
      or
      resale. Exclusive of sales to the Chinese Military and/or its
      respective  Divisions
      (no retail), and the Medical and Pharmaceutical industries. In the event
      that  any
      of
      the above becomes SEYCHELLE customers, DISTRIBUTOR shall act as
      a commissioned
      representative for SEYCHELLE, and handle all sales activities.  Commissions
      are to be mutually agreed upon by both parties.

    


    (ii) In
      the
      event that no Medical or Phannaceutica1 business is developed by March
      31, 2006,
      and
      no sales are ordered by the Chinese Military by June 30,
      2006;
      DISTRJBUTOR shall be granted exclusive rights to SEYCHELLE products
      for these channels of distribution. However, DISTRIBUTOR shall have
      the right
      of
      first refusal for the Medical and Phannaceutica1 channels of distribution
      up to
      March
      31, 2006, if they are able to secure sizable customer orders acceptable
      to SEYCHELLE.

    


    (iii) To
      this
      effect, SEYCHELLE expressly covenants that (i) SEYCHELLE will
      not knowingly
      sell any Product to any other person or entity for which a shipping
      address within
      The Territory is indicated on the purchase order, nor complete any sale of
      any Product
      if advised by DISTRIBUTOR, upon reasonable proof: that the Product
      is intended
      by the purchaser for shipment to and/or sale within The Territory, and
      (ii) SEYCHELLE
      will not deliver any Product to any other person or entity for
      shipment where
      SEYCHELLE after due inquiry is or becomes aware that the Product
      is ultimately
      to be shipped to or sold within The Territory.

    


    (iv) SEYCHELLE
      will take all reasonable action, on DISTRIBUTOR request, to prevent  or
      prohibit any third party purchaser of any Product from circumventing the
      exclusivity of the rights  hereby
      granted to DISTRIBUTOR.

    


    (v) SEYCHELLE
      shall promptly refer to DISTRIBUTOR all inquiries or purchase  orders
      for the purchase of any Product .received by SEYCHELLE from any prospective
      purchaser  whose
      shipping address is within The Territory or whom SEYCHELLE knows or believes
      to
      intend  to
      distribute and sell such Product within The Territory.

    


    (vi) DISTRIBUTOR
      shall have the right to represent itself as the exclusive distributor for
 each
      of
      the Products within The Territory in printed communications, public marketing
      and  promotional
      materials and in any discussions with any private parties or agencies within
      The
 Territory.

    


    (vii) DISTRIBUTOR
      shall also have the first right of refusal for the exclusive distribution
 rights
      in
      other Asian countries subject to the availability.

    


    (viii) The
      exclusive rights are granted under the following
      conditions:

    


    1. Upon
      signing the Agreement, DISTRIBUTOR shall provide SEYCHELLE with
      a
      check for $50.000 USD as initial payment for Products to be purchased.
      in the first quarter of this Agreement. DISTRIBUTOR. will have to
      purchase an additional $200.000 in Products within the time period
      of April,
      2006 to June 30, 2006 (the first quarter of this Agreement) to
      maintain exclusivity.

    


    2. For
      the
      first year, exclusive rights are granted on a quarterly basis based
      upon a
      minimum
      purchase of $250,000 in Products per quarter.

     

                      3. For
      the
      first year, in the event that DISTRIBUTOR fails to purchase
      the $250,000
      minimum order of Products in any given single quarter, DISTRIBUTOR
      shall be allowed to either carry over the excess amounts from
      the
      previous quarters or add the shortfall to the next quarter.
      However, for
      any
      further default, SEYCHELLE have the right to: (a) waive the minimum
      for that quarter, (b) add the shortfall to the next quarter
      purchase requirement,
      or (c) terminate the exclusivity of the Agreement.

    


    4. For
      the
      consecutive years covered by this Agreement; each year a 50% increase
      of the minimum order is required to maintain the exclusivity.  Therefore,
      in year 2, DISTRIBUTOR will have to purchase a minimum of $1.50
      million of product; year 3 -
      $2.25 million;
      year 4 - $3.38 million: and year
      5 -
      $5.00 million.

    


    5. For
      the
      consecutive years, in the event that DISTRIBUTOR fails to
      purchase the
      minimum order of Products in any given single year,
      DISTRIBUTOR shall
      be
      allowed to either carry over the excess amounts from the
      previous years
      or
      add the shortfall to the next year provided period purchases are
      at  least
      50%
      of the annual requirement. If not, SEYCHELLE shall have the.ight
      to
      (a) waive the minimum order for that year, (b) add the shortfall to
      the next
      year
      purchase requirement, or (c) terminate the exclusivity of the Agreement.

    


    2. Obligations
      of as Exclusive Distributor.

    


    A. In
      consideration of the grant of the Exclusive Distribution Rights made to
      DISTRIBUTOR in Section 1. above, DISTRIBUTOR hereby agrees that it will
      undertake, at its own reasonable expense and using reasonable best efforts,
      to
      obtain all necessary governmental licenses, permits and approvals required
      to
      allow the import into and sale of each of the Products within The Territory
      prior in each case to its commencement of distribution and sales activities
      of
      that Product in The Territory.

    


    B.
      DISTRIBUTOR shall be exclusively responsible for all sales, promotion and
      marketing expenses relating to its distribution and sale of Products in The
      Territory.

    


    C.
      DISTRIBUTOR covenants and agrees that it will not distribute or resell any
      Products purchased from SEYCHELLE other than in The Territory without first
      advising SEYCHELLE of its intention and receiving SEYCHELLE's prior written
      approval to do so.

    


    3.
      Products to be Sold

    


    A.
      Price and Terms of Products to:

     

                (i)
      SEYCHELLE hereby
      agrees to sell to DISTRIBUTOR, per attached Exhibit
      "B."

    


    (ii)
      DISTRIBUTOR shall be responsible for all costs of shipping the purchased
      Products from  point
      of
      manufacture.

    


    B. Commitment
      to Supply Products:
      SEYCHELLE represents and agrees that it will use all commercially
      reasonable efforts to manufacture and deliver any Products ordered
      by DISTRIBUTOR
      ou a priority basis, but in all events in a timely fashion.

    


    4.
      Rights Beyond Initial Period.

    


    It
      is the
      intention of the parties that either by meeting the minimum purchase quantities
      in the first 5 years or through its marketing and distribution efforts and
      its
      purchases of Products during the first 5 years that DISTRIBUTOR shall
      demonstrate to SEYCHELLE its capabilities as an effective facilitator for the
      distribution and sale of Products in The Territory, DISTRIBUTOR shall become
      entitled to a mutually agreed upon extension of five (5) years, the period(
      s)
      during which DISTRIBUTOR may continue to hold and exploit the Exclusive
      Distribution Rights. The minimum purchase requirements for any extension will
      be
      on a $5 million per year basis.

    


    5.
      Indemnification.

    


    A.
      SEYCHELLE warrants and represents to DISTRIBUTOR that (i) SEYCHELLE
      has

    full
      power and authority to grant the Exclusive Distribution Rights, (ii) no approval
      or consent of any third party is required to enable SEYCHELLE to make such
      grant
      or for DISTRIBUTOR thereupon to be entitled to exercise the full rights and
      benefits intended thereby, and (ill) the grant thereof will not breach any
      license, patent 'or other right or agreement to which SEYCHELLE is a party
      with
      respect to SEYCHELLE's rights and authority to manufacture and sell each of
      the
Products.

    


    B.
      SEYCHELLE shall defend and indemnify DISTRIBUTOR and hold its members, managers,
      officers,' employees and agents harmless against all claims and losses
      (including reasonable attorney's fees and costs incurred in investigating or
      defending against any such claims) suffered by DISTRIBUTOR in connection with
      or
      as a result of a breach of the representation and warranty made by SEYCHELLE
      in
      subsection A above.

    


    C.
      Conversely, DISTRIBUTOR agrees that it shall defend and indemnify SEYCHELLE
      and
      hold its, managers, officers, employees and agents harmless against all claims
      and losses (including reasonable attorney's fees and costs incurred in
      investigating or defending against any such claims) suffered by SEYCHELLE in
      connection with or as a result of the gross negligence, misrepresentation or
      willful misconduct of DISTRIBUTOR or its personnel in the performance
of
      its
      duties hereunder.

    


    6.
      Miscellaneous Provisions.

     

        A.
      Modification:
      No
      modification, waiver or amendment of any term or condition of this Agreement
      sbaI1 be effective unless arid until it sbaI1 be reduced to writing and
      signed both of the parties hereto or their legal
      representatives.

    


    B.
      Waiver:
      Failure
      by either party at any time to require performance by the other party or to
      claim a breach of any term of this Agreement will not be construed as
      a:
      waiver
      of any right under this Agreement, will not affect any subsequent breach, will
      not affect the effectiveness of this Agreement or any part thereof, and will
      not
      prejudice either party as
      regards
      any subsequent action.

    


    C.
      Severability:
      If any
      term or provision of this Agreement should be declared invalid by a court of
      competent jurisdiction, the rem:lining
      terms
      and
      provisions of this Agreement shall be unimpaired.

    


    D.
      Complete
      Agreement:
      This
      Agreement constitutes the entire Agreement between the parties with respect
      to
      the subject matter hereof and supersedes in all respects all prior proposals,
      negotiations, conversations, discussions and agreements between the parties
      concerning the subject matter hereof

    


    E.
      Assignment:
      This
      Agreement may not be assigned, in whole or :in part, by either party hereto
      without prior written consent shall not be unreasonably withheld.

    


    F.
      Governing
      Law:
      This
      Agreement shall be construed according to the laws of the State of California
      and shall not be subject to any choice of law provisions of such laws. This
      Agreement shall be binding upon DISTRIBUTOR and SEYCHELLE, and their respective
      successors and assigns.

    


    G.
      Compliance
      with Laws:
      The
      parties hereto represent and agree each for itself that they and their
      respective employees, agents and subcontractors will comply with all applicable
      federal, state, county and local laws, ordinances, regulations and codes in
      the
      performance of their respective services, duties and obligations under this
      Agreement.

    


    H.
      Force
      Majeure:
      Either
      party is excused from performance and shall not be liable for any delay in
      performance or delivery or for non-performance or non-delivery, in whole or
      in
      part, caused by the occurrence of any contingency beyond the control of the
      parties including, but not limited to, work stoppages, fires, civil
      disobedience, riots, rebellions, accident, explosion, flood, storm, acts of
      God
      and similar occurrences, Either party may terminate or suspend its obligations
      under this Agreement if such obligations are prevented by any of the above
      events to the extent such events are beyond the reasonable control of the party
      whose reasonable performance is prevented.

    


    I.
      Counterparts:
      This
      Agreement may be executed in counterparts each of which shall be deemed an
      original, but all of which together shall constitute one and the
      same.

    


    J.
      Notices:
      All
      notices to be given and payments to be made to DISTRIBUTOR hereunder shall
      be
      sent to 30616 Sand Trap Drive, Agoura Hills, CA 91301, Attention: Edward Wu.
      All
      notices to SEYCHELLE, to be made hereunder shall be given or made to SEYCHELLE
      at
      33012
      Calle Perfecto, San Juan Capistrano, CA 92675. Attention: Richard Parsons,
      Executive VP. All notices shall be sent by registered or certified mail or
      by a
      nationally recognized overnight delivery service and shall be deemed to have
      been given at the time such notice is received.

    


    7.
      Survival Provisions.

    


    The
      terms
      and provisions of the Agreement that by their sense and context to survive
      the
      performance hereof by either party or by other parties hereto shall so survive
      the completion of performance and termination of this Agreement, including
      without limitation the making of any and all payments due hereunder unless
      otherwise noted.

    


    8.
      Confidentiality.

    


    A.
      The
      information furnished or disclosed by either party to the other in connection
      with this Agreement and the performance of the respective party's services,
      duties and obligations hereunder, may contain or reflect confidential
      information with respect to the business operations and practices of the
      parties, any selling properties and/or buying sponsors ("Confidential
      Information"). Confidential Information furnished by either party to the other
      shall be used exclusively and only in connection with this
      Agreement.

    


    B.
      The
      parties hereto acknowledge and agree that the unauthorized disclosure of use
      of
      any Confidential Information may cause immediate and irreparable injury to
      the
      party which has disclosed that Confidential Information to the -other party,
      injury which can not be adequately compensated by monetary damages. Accordingly,
      each party hereto .authorizes the other party to seek any temporary or permanent
      injunctive relief necessary to prevent such disclosure or use, or threat
      thereof. Further, each party hereto consent to the jurisdiction of any federal
      or state court sitting in the State of California for purposes of any suit
      seeking such injunctive relief: and consents to the service of process therein
      by certified or registered mail, return receipt requested. .

    


    ACCEPTED
      AND AGREED BY:

    


    CONFIDENT
      INC. and Its Nominee

    By:
      /s/
      Edward Wu

    Edward
      Wu, President     Date:
      1/4/06

    


    /s/
      Arnold Chen

    Arnold
      Chen, Exec. VP     Date:
      1/4/06

    


    SEYCHELLE
      ENVIRONMENTAL PRODUCTS INC.

    By: R.
      C.
      Parsons

    Richard
      Parsons, Executive VP    Date:
      1-4-06

    


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    SEYCHELLE
      Products* and Pricing:

    


    - 24oz
      Flip
      Top Bottles    $8.80

    - 30oz
      Bottoms Up Bottles   
      8.80

    - 30oz
      Canteens     
      8.80

    - 24oz
      Emergency Preparedness Bottles  
      6.60

    - Filter
      Replacements for all bottles  
      4.75

    - Pitchers      20.35

    - Filter
      Pack Replacement   11.00

    - Straws-Regular     
      6.60

    - Straws-Advanced    
      7.75

    - Shower
      heads - Royal Wall Mount (White) 25.24

    - Shower
      Replacement Filter   14.24

    - Pure
      Water Pumps    11.93

    - Pure
      Water Bags    13.75

    - Filter
      Replacements -Pump/Bag   
      4.75

    


    	·  	
            Additional
              products may be added by separate Exhibit

          


    	·  	
            Prices
              subject to change with 60 days written
              notice.

          


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    Exhibit
      "B"

    


    1. Pricing
      -
      see Exhibit "A". Prices subject to change with thirty (30) days written
      notice.

    


    2.  For
      the
      first one million dollars purchase -
      Terms
      are
      40% cash (USD) down with order (Wire    transfer)
      & 60% via an Irrevocable Letter of Credit upon shipment.

    


    3.  For
      any
      further purchases - Terms are 30% cash (USD) down with order (Wire transfer)
      & 70% via   an
      Irrevocable Letter of Credit upon shipment.

    


    4. It
      is
      agreed that SEYCHELLE, at its option, may reduce its cash down payment
      requirements in the  event
      that it is able to negotiate more favorable payment terms with its
      suppliers.

    


    5. Shipment:
      FOB our plant in San Juan Capistrano, CA (USA).

    


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