UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): September 15, 2015

 

ID Global Solutions Corporation

(Exact name of registrant as specified in its charter)

 

Delaware 000-54545 46-2069547
(State or Other Jurisdiction of Incorporation) (Commission File Number)  (IRS Employer Identification Number)

 

160 East Lake Brantley Drive, Longwood, Florida 32779

(Address of principal executive offices) (zip code)

 

407-951-8640

(Registrant's telephone number, including area code)

 

Copies to:

Stephen M. Fleming, Esq.

Fleming PLLC

49 Front Street, Suite 206

Rockville Centre, New York 11570

Phone: (516) 833-5034

Fax: (516) 977-1209

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

 

Item 1.01      Entry into a Material Definitive Agreement

 

On September 15, 2015, ID Global Solutions Corporation (the “Company”) entered into a Rental Contract with Purchase Option (the "Rental Contract") with Basetek S.A.S. ("Basetek"), a Colombian company, pursuant to which the Company rented to Basetek 80 unattended payment solution kiosks in consideration of 3.648 billion COP over the ten year period of the Rental Contract.

 

The foregoing information is a summary of each of the agreements involved in the transactions described above, is not complete, and is qualified in its entirety by reference to the full text of those agreements, each of which is attached an exhibit to this Current Report on Form 8-K.  Readers should review those agreements for a complete understanding of the terms and conditions associated with this transaction.

 

Item 9.01      Financial Statements and Exhibits

 

 

Exhibit No. Description
10.1 Rental Contract with Purchase Option by and between ID Global Solutions Corporation and Basetek S.A.S., a Colombian company, dated September 15, 2015

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ID Global Solutions Corporation
   
Date: September 22, 2015 By:  /s/Thomas R. Szoke     
  Name:  Thomas R. Szoke
  Title:  Chief Executive Officer

 

 


Exhibit 10.1

 

CONTRACT FOR R E NTAL OF DCA KIOSKS WITH OPTION TO PURC H ASE

 

Lessor: The Consortium between ID Global Solutions C orp. and Hanco Technologies, S.A.S.
     
  Tax ID Numbers: ID Global Solutions Corp.: 4-2069547
    Hanco Technologies, S.A.S.: 900.326.893-5
     
  Legal Representative: Douglas Solomon
     
  Lessor’s Colombian Address: Calle 109 #19-48, Oficina #302
    Bogotá, Colombia
     
  Subject of the Contract: Provision of 80 DCA units with the technical specifications listed in Annex #2, pursuant to a rental with option to purchase; which units will be installed at the transportation stations managed by Recaudo Bogotá, S.A.S.
     
  Value of the Services/Form of Payment: The price of each DCA unit is COP $45.600.000 plus VAT, which shall be paid in equal monthly installments of COP $380.000, pre-VAT, for each DCA unit. This price includes maintenance of the DCA units throughout the term of the Contract.


 

This contract is a Re n tal Contract with P u rchase Option for the 80 DC A unit s (hereinafter the "Contract"), and includes full m a intenance o f th e units . T he Contrac t i s between:

 

(i)                  BASETE K SA S (hereinafter "BASETEK"), a co m pany with its headquarters in Bogotá, Colo m bia, incorporated under Shareho l ders' Record of March 26, 2014, registered under nu m b e r 0182301 1 o f Boo k I X o f th e Bogot á Ch a m ber of Com m erce, existing and legally constituted under the laws of the Republic of Colo m bia, identified with N IT 900.739.824-1.

 

(ii)                TH E CONSORTIU M identified above (herein afte r "TH E CONSORTIUM"), constituted via a p ri v ate con s o r ti u m agree m ent between ID G loba l Solution s Corporation, identified with EIN 4-2069547, and Hanco Te chnologies , S.A.S. , identifie d wit h NIT 900.326.893-5.

 

BASETEK and THE CONSORTIUM (individu a lly a "Part y " and collecti v ely the "Parties") have agreed to enter into this Con t ract, which shall be governed by the provisions of the ci v il and commercial laws of Colo m bia and the ter m s and conditio n s this Cont ra ct, subj e ct to the f ollowi n g:

 

 

 

CONSID E RATIONS:

 

1.                     -. That on August 11, 2011, a contract was signed between TRANSMILENI O S.A . and RECAUD O BOGOTÁ , S.A.S . ("RBSAS"), the object of which is "the concession of the design, supply, i m ple m entation, operation, m aintenance and i n tegration of the system of fare collection for the TransMilenio Integrated Public T r ansportation System in Bogotá, Colo m bia.

 

2.                     That the o b jecti v es of t h e Inte g rated Pu b lic Tra n s port a tion S y stem established in Decree District 309 2009, a m ong others, are to i m prove service coverage to different parts of the city, provide i m proved access and con n ectivity, and perform the oper a tiona l integratio n an d fare collection associated therewith, esta b lis h ing the principles of progressivity, ti m eliness, acces s ibilit y , efficienc y , financial and environ m ental s ustai n abilit y , safety, quality a n d coordination.

 

3.                     That upon the issuance of Concession Contract 001 2011, RBSAS took over the coll e ction f unction f or the Inte g rated Public Transport Syste m , thereby extending the charging network throughout the city.

 

4.                    BASETEK has the organization, infrast r ucture, personnel, trade agree m ents and appropriate financial resources to facilitate the imple m entation of collection services in Bogotá.

 

5.                     BASETE K an d RBSA S execute d a fr a m ewor k ag ree m ent, ai m ed at "Uniting t h eir efforts to ensure the expansion of the charging network."

 

6.                      Consistent with the afore m entioned Con t ract, B A SETEK c onducted a selection process f or the re n t a l-wit h -opti o n-t o -purchas e o f 8 0 DC A units.

 

7.                    The selection process was awarded to THE CONSORTIUM.

 

8.                    THE CONSORTIUM has been co n stit u ted v i a a private c o nsortium agree m ent dated August 21, 2015, a copy of which was provided to RBSAS and under which an officer of I D Global Solutions Corp. has been designat e d as the Legal Representative of THE CON S ORT I UM.

 

9.                    Therefore, the Parties agree as follows: 

 

 

CLAUS ES

 

FIRST . O BJEC T . The purpose of this Contract is for THE CONSORTIUM to supply 80 DCA units with t h e tech n ic a l s peci f ic a tions li s ted in Anne x # 2 hereto , b y wa y o f a rental-with-option- to-purc h ase, and which will b e i n st a lled on t h e p r e m ises of the transp o rtation st a tio n s m anaged by RBSAS, which for the purposes of this Agree m ent shall be called t h e “End User”. RB S AS will pro v ide THE CONSORTIUM with t h e spe c i f ic inst a ll a tion locations in advance.

 

SECOND . OBLIGATION S O F TH E CON S ORTIUM.

 

a)  Provide the added-value propositions listed in Annex #1 at the request of BaseTek.

 

b) Provision of 80 DCA units with the features listed in Annex #2.

 

c) Provide data on a real-time reporting basis, including information for previous days, detailing recharge transactions, card sales, a log of unit events, cash flow reporting, amount of cash entered into the unit, amounts of recharges and payment rejections.

 

d) Provide maintenance for the DCA units throughout the ten-year Contract term, pursuant to the terms and provisions of Clause #8 of the present Contract, without additional cost to BaseTek.

 

e)  Guarantee and maintain the service levels delineated in Clause #7 of the present Contract.

 

f)  The DCA units must be installed and properly functioning in the places to be designated by BaseTek and/or the End User.

 

g) Assume the cost of all import taxes, as well as transportation costs to the installations sites.

 

h) Ensure the integration of the DCA units with the End User’s collection platform via the available associated systems and mechanisms.

 

i)  Technical personnel must provide reports in relation to technical services provided.

 

j)  Develop the units according to the features that are stated in the API (Application Programming Interface).

 

k)  Employ an LSAM and an OLSAM provided by BaseTek to perform laboratory testing in the event that validation uses are presented in the zonal system with charges generated from the units, which must be paid by THE CONSORTIUM.

 

l)  Guarantee the transmission of payment transactions to the central collection system. In the event that transactions become lost and therefore not transmitted to the central collection system, THE CONSORTIUM shall assume the financial responsibility for such transactions, and such amounts will be deducted from the amounts otherwise invoiced, subject to the correct functioning and performance of the communications platform provided by BASETEK and/or End User.

 

 

 

m) In the event of unit failures that cannot be resolved via the procedures established in Clause Seven, THE CONSORTIUM must replace the respective unit within 24 hours of the failure.

 

n) Provide semester-based training sessions for BASETEK and/or End User personnel related to operation of the DCA units.

 

o) Provide technical and operating manuals for the DCA units, and update them as necessary.

 

p) Deliver detailed operating information from an internal Help Desk and update such information as necessary.

 

q) Constitute the policies listed in Clause #9 of the present Contract.

 

r)  THE CONSORTIUM warrants that it is the owner of the DCA units, title to which it will transfer to BaseTek upon termination of the term of the Contract or upon exercise of the option to purchase.

 

s) At the time of transfer of title to the DCA units, THE CONSORTIUM will provide BaseTek with all related documentation, including importation, license and all other related documentation.

 

t)  THE CONSORTIUM warrants that its property rights in and to the DCA units do not infringe any third-party intellectual property rights.

 

u) Obtain any licenses necessary to provide the DCA units.

 

v) Comply with all legal requirements applicable to this type of contract, which requirements are incorporated herein.

 

w) Provide replacement parts for the DCA units, which such parts shall be guaranteed by THE CONSORTIUM.

 

x) Generate a daily income report for each unit.

 

y) Comply with the delivery schedule set forth in Annex #3.

 

z) Guarantee the availability of the purchase option in favor of BaseTek, pursuant to the terms and condition set forth in the present Contract.

 

aa) Permit BaseTek to sublease the DCA units to RBSAS or other End User that shall use them for the collection of transit fares.

 

bb) Provide BaseTek with the software source code in the event of the dissolution of THE CONSORTIUM.

 

 

 

cc) Perform the necessary steps to procure a Colombian Tax ID Number for THE CONSORTIUM.

 

THIRD. OBLIGATIONS OF BASETEK.

 

a) Ensure that the equipment is permitted to be installed in the designated transportation stations.

 

b) Ensure payment of the monthly rental invoices.

 

c) Report directly or through the End User any developments or changes relating to the functioning or operation of the equipment.

 

d) Ensure directly or through the End User the power supply and communications solution for the DCA units. Nevertheless, BaseTek is not responsible for non-compliance of third parties in conjunction with the provision of such services, and therefore THE CONSORTIUM cannot hold BaseTek responsible for such non-compliance and cannot invoice for units not in service as result of such power/communications failures.

 

e) Provide civil works, directly or through the End User, if necessary, to adapt the facilities for installation of the DCAs, always and as long as the associated costs are reasonable. THE CONSORTIUM shall inform BASETEK of the availability of the DCA units for installation, and if after 15 working days the sites are not available for installation, THE CONSORTIUM may invoice the monthly fee for such DCA units.

 

f) Procure all necessary permits for installation of the DCAs. Nevertheless, if the relevant third-party authority will not issue a permit, BaseTek shall not be responsible therefore, and THE CONSORTIUM cannot invoice for the associated unit.

 

g) Provide and manage the transport debit cards.

 

h) Collect and manage the cash received into the DCA system.

 

i) Ensure the procurement of risk policies for vandalism and damage caused by natural disasters.

 

j) Procure and maintain in effect a compliance policy, guaranteeing payment on a six-month rolling basis.

 

FOURTH . VALU E O F RENTA L PAYMENTS . BASETEK shall r e m it to THE CONSORT I U M th e su m o f th ree hundred and eighty thousand Colo m b ian Pesos plus VAT (COP $380.000 plus VAT) m onthly per device throughout the term of the Contract. Such sum i s subje c t to a p plica b le tax rete n tions u nder Colombian law.

 

Such a m ount will be u p dated annually by appl y ing t h e CPI index from the previous year, as of the m onth of January for each year of the term of the Contract.

 

 

 

 

The rent a l p ay m ent a m ount inclu d es all m ainte na nce, including spare parts for the devices and th e softwar e an d license s require d fo r operation.

 

The failure by BaseTek to m ake t h e monthly rental pay m ents for five straight m onths shall allow TH E C ON S ORTIU M t o re m ov e an y DC A uni t t o whic h such failure of pay m ent is applicable, as well as invoke the penalty provision s i n Claus e #1 2 o f th e presen t Contract.

 

FIFTH . P AYMEN T METHOD . TH E CONSORTIU M shal l sub m it an invoice at the end of each m onth inclu d ing all DCA units that ha v e been installed and acce p ted during that m onth, as well as the prorated working days in the m onth on the basis of $380,000 pesos per month, which total s $12, 6 6 7 peso s p er day . Ther e wil l b e a f o r m al act of acceptance f or each DCA, which act will ena b le the initiation of invoicing for each re s pecti v e unit.

 

Invoices shall be paid within thirty (30) days following presentation, subject to satisfactory delivery and functioning of the DCA units.

 

SIXTH . T ER M AN D PURCHA SE OPTIO N . The te r m of this Contract is ten (10) years. In case of ter m ination for breach, the provis i on s o f Claus e 1 6 shal l b e exhausted.

 

In any case, BASETEK r eserves the right to e x ercise the option to pur chas e th e DCA s unde r the followin g conditions:

 

-. At the end of the term of 10 years, BaseTek sh a ll be p e r m itted to ex e rcise the p u rc h ase option by m aking a pay m ent of COP $10.000 to THE CONSORT I U M fo r eac h DC A unit , fo r a total of COP $800.000.

 

-. In the event that, upon ter m ination of the Con t ract, rental pay m ents re m ain due and payable to THE CONSORTIUM under the term of the Contract, BASETEK will satisfy such pay m ents via a single pay m ent, based on present value an d the n discounte d a t a rat e o f 10%.

 

-. The sa m e fo r m ula above shall a p ply in the eve n t of early ter m inati o n of the Contra c t as the result of any cause, in order for BASTEK to be able to exercise th e purchas e option.

 

First Paragraph: In the event that BaseTek m ust exercise t h e purchase o p tion as a res u lt of a breach of c o ntract by THE CONSORTIUM, and a resulting cancel a tion o f the Contract, the purchase option shall be exercised without prejudice to BaseTek s right to invoke the ter m s and provisions of the penalty cla u se set f orth in Clause #12.

 

Second Paragraph: The purchase option is also available to the End User in the event that BaseTek elects no to exercise the option.

 

SEV E NTH . SERVIC E L E V E L S . THE CONSORTIUM will ens u re a m onthly “upti m e” of 99.5% syste m - w ide. If the percentage of “upti m e” in a given calendar m onth falls below this guaranteed amount, the following penalty s h all apply to that month’s invoice.

 

 

 

The penalty is c a lcul a ted as f ollows:

A = % guaranteed minimum “uptime” (99.5%)

B =% of computed “uptime” for invoiced calendar month

C = ( % penalty) = A-B

The penalty shall apply to the current m onth’s in v oice.

The m onthly “upti m e” of 99.5% is m easured from the arrival of a technician at the physical locatio n o f th e DCA.

Paragrap h : The dealer shall guara n t ee the d eli ve ry dates set forth in A n nex #3, and for each d a y of delay th a t is att r ibuta b le to the a c t or o m ission of THE CONSORTIUM, an a m ount of .5% of the m onthly value of each delivery shall apply.

EIGHTH. MAINTENANC E . THE CONSORTIUM shall provide ongoing m aintenance and support for the DCA units throughout the term of the contract based on the " T er m s of Service" as defined below:

1)    The res p onse ti m e for a m aintenance pro b lem is m easured from the ti m e BASETEK f or m ally noti f ies THE CONSORTIUM of the f ailu r e . T h e noti f ic a tion of the f ailu r e sh a ll b e received by a ser v ice center m aintained by T H E CONSORTIUM , wher e a recor d o f th e reported problem shall be m ade. The oper a tor will provide the Custo m er with a tic k er nu m ber with an associ a ted ti m esta m p. THE CONSORTIUM shall com m itt to have a technician a rrive at t h e DCA site within 45 m inutes under n or m al conditions, and within 90 m inutes during peak traffic or under unusual circu m stances related to traffic flow in the City.

 

2)    The rest o ration ti m e is m easured from t h e time the tech n i cian arrives on-site until the ti m e of the co m pletion of the n e cessar y repairs . Th e m on t hl y “upti m e” of 99.5% is m easured from the arrival of a tec h nician at t h e DCA site.

 

3)   The critical spots are the sites where one (1) DCA is installed.

 

4)   The non-critical sites are locations where more than one (1) DCA is installed.

 

5)     The restoration ti m es relate only to rep a irs m ade to address nor m al wear and tear not associated w ith or resulting from vandalism or natural disasters.

 

6)    Necessary repairs or replace m ents required as a result of vandalism or natural disasters m ay be provided but is not included within the monthly rental pay m ent.

 

7)      “Downti m e” is calculated from the ti m e an iss u e is re g i s tered in t h e THE CONSORTIUM system until t h e ti m e it is res o l v ed and the unit is run n i n g. “Downti m e” does no t includ e operationa l failure s du e t o powe r a nd energy network outa g es or other service interruptions due to strikes or civil unrest. D ownti m e” does not include blockages in the bill and coin a c ceptors, g i v en that t h is is conte m plated in the First Level of servi c e th a t BaseTek or the Final User provides.

 

 

 

 

8)      The upti m e percentage is based on tot a l nu m ber of DCA units inst a lled a n d is calc u lated a s f ollows:

 

X = Total Nu m ber of DCAs Installed

Y = Total nu m ber of hours in a calendar m onth

Z = X * Y, or total “upti m e” available in a calendar m onth.

T = Total number of hours of “downti m e” in a calendar m onth

Upti m e% = [(Z - T) / Z] x 100

9)   Maintenance levels are defined as follows:

 

Level 1 : BASETEK or End User personnel, co o r dinated v ia BASETEK, re m ove bills and c o ins that have beco m e stuck or other w ise lodged, a nd m anage all issues related to currency and shutting d o wn/rest a rti n g of the units on a daily basis. No servi c e tick e t is ass o ci at ed with this process.

 

Level 2: Calibration a n d updates o f bill and c o in acce p t o rs, hoppers, and other peripherals. Regular c le a ning of the m achines, replace m ent of parts t h at m ay be failing and m anage m ent of all operati o nal m atters. In general, these are all ite m s that not covered by Level 1, and shall include calibration and preve n tati v e m ainten ance , recommende d b y th e m anufacturers of the co m ponent parts, inclu d ing the bill accept o rs a n d cyclers, typically occurring bet w een 20,000 and 25,000 transactions. These ite m s will generate a ser v ice ticket.

 

Level 3. Corre c tive and preve n tive m aintenance of the h ar d ware and s o ftware res o lved at the Second Level of service. These inter v ention s wil l generat e a servic e ticket.

 

A f ter co m pletion of the 10-year te r m of the Contra c t, the Consortium will be able to continue to provide the m aintenance ser v ices in the ev e nt t h at t h e Parti e s can agree on the m arket price at that ti m e.

 

NINTH . GUARANT E E S . BASETEK shall p rocure a c o m p liance policy on behalf of THE CONSORT I UM to guarantee payment, and such policy shall operate on a m in i m u m -6 - m onths rolling basis, specifically in the a m ount of COP $211.584.000.

 

The Consortium m ust procure a co m plian c e policy in the amount of COP $126.950.400, which a m ount shall increase on an annual basis in confor m ity with the national CPI index.

 

The Consortium m ust procure a “c i vil responsibility” and “third- p art y liability polic y i n the a m ount of COP $423.168.000.

 

 

 

TENTH . EXCLUS I ON O F EMPLOYMEN T . THE CONSORTIUM is an independent contractor. BASETEK i s not responsible for CONSORTIUM personnel under Colombian labor law . TH E CON S ORT I U M i s responsibl e fo r all costs, including govern m ent- m a ndated costs and contributions, for its personnel.

 

EL E VEN T H . INDEMNITY . THE CONSORTIUM agrees to indemnif y BASETE K an d the End User in connection with any action, clai m , de m and, judg m ent, order, sanction, fine, or civil or cri m inal procee d ing, arising out o f any act attributa b le to THE C ONSORTIUM in conjunction with the deliberate f ail u r e to co m ply with the t er m s of this Contra c t. T H E CONSORTIUM shall be responsible for the expenses and costs incur r ed by BASETEK or t h e End User in relation to any of the e vents spe c i f ied in t h is cl a us e , includin g cour t cost s an d attorneys fees.

 

Also, BASETEK agrees to inde m nify THE C ONSORT I U M i n connectio n wit h an y action, clai m , d e m a nd, judg m ent, order, sa n ction, fine, or civil or cri m inal proceeding, arisi n g out of any ac t attributabl e t o BASETE K o r th e En d Use r i n conjunctio n wi th the perfor m a nce of this Contract. BASETEK shall be responsible f o r the expenses and costs incurred by THE CONSORTIUM in r el a tion to any of the e v ents s pec i f ied in this c lause, i n cludin g cour t cost s and att o rneys’ fees.

 

TWEL F TH . P E NA LY C L AU S E . In the eve n t of a breach of this Contra c t by either of the Parties, it is agreed th a t a penalty e quivale n t to 10% of the tot a l v a lue of this C o ntra c t sh a ll apply . Materia l defaul t b y TH E CONSORTIUM shall be under s tood as follows: Si x consecutive months of monthly u pti m e” of less than 99. 5 % syste m -wide (which will lead to the penalty provision in the Clause 12 of this Agree m ent), plus three (3) m onths (after the afore m entioned six ( 6 ) m onths) to c u re proble m . If the pro b lem per s ists, r e sulting in a n “upti m e” of less t h an 99.5% in the system for nine consecutive m onths, such will be a failure by THE CON S ORT I UM , whic h shal l allo w BAS ETEK t o ter m inate the Contract.

 

Material default by BaseTek and/or the End User shall be constituted by five (5) consecutive months of failure to m ake pay m ent of the i nvoices issued by THE CONSORTIUM, which shall per m it THE CONSORT I UM to cancel the Contract and invoke the afore m entioned 10% penalty, without prejudice to its other available re m edies under this Contract or available at law.

 

The co m plying Party m ay directly discount any su m s due under this penalty clause and no pre- require m ent or notification of doin g s o shal l b e necessary.

 

THIRTEENTH . ENFORCEABILITY . The obligations described in t h is Contract shall b e fully enforceable.

 

FOURTEENTH . AP P LICABL E LEGISLATION . This Contract s h al l b e governe d b y the laws of the Republic of Colo m bia.

 

 

 

 

FIFTE E N T H . CONF I DENTIAL I T Y . All infor m ation exchanged between the Parties, which is is con f id e nti a l or the intellect u al p roperty of a Party, m ay not be used for purposes other than those spe c i f ied in the c o ntra c t and necess a ry to f ul f ill t h e Contra c t, and f urther m ore m ay not be used for the individual inter e sts of a Party outside of the execution of the Contract.

 

For purposes of the Contract, “Confidential Infor m ation” is any info r m ation disclosed in written, graphic, verbal, or m achine-recogniza b le for m , unl e ss it is m arked, designated, labelled o r identifie d a t th e ti m e o f disclosur e a s b e in g non-confidential . Notwithstandin g an y other provision s o f thi s Contract , Con f ide n ti a l In f or m ation sh a ll n o t inclu d e any in f or m ation that: (i) is or beco m es publicly known through no wrongful act of the receiving Party; (ii) is already known to t h e recei v ing Party without restr i ctio n whe n i t i s d i sclose d ; (ii i) is, o r subsequently beco m es, rightfully a n d without b reach of this Contract, in the recei v ing Part y ’s possession without any obligation restricting disclosure; (iv) is independently developed b y th e receivin g P a rt y without breach of t h is Contract; or ( v ) is e x pli c itly approved for release by written a u thori z ation of the disclosing P arty.

 

Each Party will: (i) m aintain the con f ide n tiality of the other Party’s Con f identi a l Infor m ation and not disclose it to any third party, except as authorized by the disclosing Party in writing or as required by a cou r t of c o m petent ju r is d i c tio n ; ( ii) r e st r ict di s closure of Con f identi a l In f or m ation to its su b co n tra c tors, re p resentatives, consultants, legal advisors and e m ployees who hav e a “nee d t o know an d no t c o py or reproduce such Confidential Infor m ation; (iii) take necessary and appropriate preca u t i ons to guard the confi d entiality of Confidential Infor m ation, inclu d ing in f or m ing its e m ployees who handle such Con f identi a l In f or m ation that it is confidential and not to be disclos e d t o others , bu t suc h precaution s s h all rise at lea s t to the sa m e degree of care t h at the recei v ing Party applies to its own Confidential I n fo r m ation and shall n o t be less than reasonable care; and (iv) use such Confidential Info r m ation only in furtherance of the per f or m ance of this Contract. Con f idential In f or m ation is and sh a ll at all ti m es re m ain the property of the disclosing Party, and no gra n t of any proprietary rights in Con f idential Infor m atio n i s hereb y give n o r intended , includin g any express or i m plied license, other than the li m ited rig h t of the recipient to use Con f identi a l In f or m ation in the manner and to the extent per m itted by this Contra c t.

 

Upon co m pletion of the Contract, the Parties will be required to return to the other Party all docu m e ntation that has been provided. These provision shall rema in in effec t fo r an additional five years following co m p letion of the Contract.

 

SIXT E EN T H . ALT E RNAT I V E DISPU TE RESOLU TI ON . The Parties a g r e e th a t in t h e event that disputes arise bet w een them concerning the perfor m ance and execution of this Contract, t h e f ollowing procedures shall appl y : (i) The Parties shall a tte m pt to a m icably and dire c tly r e s o lve the dis p ute, f or which they w ill have a m aximum period of f i f teen (15) calend a r days, counted from the date on which a Party submits a written co m plaint to th e othe r Party . (ii) the Parties shall sub m it to a m utually-selected m e diator . I f th e Partie s canno t agre e o n the selection of a m ediator, one will be appointed p ursuant to t h e rul e s and p rocedures of the Ca m ara de Co m ercio of Bogo t á. The Parties shall h a ve fifteen (15) days following selection or appoint m ent of the m ed i atior to a t tempt to resolve the dispute. If the dispute is not resolved via the above m echanis m , the disp u te shall b e s u b m itted to the arbitral tribunal, which will be responsible for resolvi n g th e dispute . Th e Tribuna l o f Arbitratio n shal l b e governe d b y the f ollowing r u les and co n dition s : ( a ) The Arbitr ati on and Conciliation Division of the C a m ara de Co m ercio of Bogotá; (b) one (1) arbitrator shall be appointed by the Parti e s. If the Parties cannot reach an agree m ent at t h e end of fifteen days fr o m the written reque s t for arbitration, one shall be appointed b y the Ca m ara de Co m ercio of Bo g otá from lists sub m itted by each of the Parties, which shall designate at m ost 5 a r bitrators f r om said chamber. (c) The Tribunal will operate accor d ing to the rules e s tablished by the Di v isi o n o f Arbitratio n an d Co n c iliatio n o f th e Ca m a ra de Co m ercio of Bogotá; (d) The award shall be in law; (e) The Tribunal shall sit in the city of Bogotá. The rules applicable to the arbitration shall be those in force on the subject under the laws of the Republic of Colo m bia; (iii) Fees i n curred by the Tribunal will be shared equally between the Parties.

 

 

 

 

SEV E N TE ENTH . A S SIGNMENT . Neither Party m ay assign t h e C ontract wit h out the prior written consent of the other Party.

 

EIGHTEENTH . TERMINAT I O N . This Contract shall be t e r m inated by t h e occurrence of any of the following events:

 

1.   By m utual agree m ent of the Parties.

 

2.    By early ter m ination of the Contract in the case of a m aterial breach b y either Party of any of the obligations stated herein, subjec t t o th e provision s o f th e Twelft h an d Sixteent h Clauses.

 

NINE T E E NTH . P L AC E O F P ERFOR M ANC E O F TH E CONTRAC T . The place of perfor m ance of the Contract will be in the city of Bogotá, D.C, Colo m bia.

 

TWENTIETH. ADDRESS AND NOTIFICATIO N . For legal and tax purposes, BASETEK shall receive noti f ications at Calle 73 No. 6-30, Bogotá, D.C. , an d TH E CONSORTIU M shall receive notifications at Calle 109 No. 19-48 Oficina 302, Bogotá, D.C.

 

TWENTY - FIRST . CONTRAC T EXPENSES . Al l expense s incurre d in the d e v elop m ent and execution of the Contract shall be borne by the P arties separately and individually.

 

TWENTY - SECOND . DOCUMENT S . Th e followin g docu m e nts , attache d a s exhibits , are dee m ed a part of this C ontra c t: a) the Consortium Agre e m ent; b) Certificate s o f Goo d Standing for ID Global Solutions Corp. and Hanco Te c hnologies, S . A.S.; c) the award letter acce p ting THE CONSORTIUM’s proposal that gives rise to this Cont r act, and w hich it is incorporated herein; d) any other docu m ent e d pre-contractual conditions.

 

TWENTY - THIRD . E NTIR E C O NTRACT . This Contract, including an y exhibit s o r annexes hereto , represen t th e entir e underst a ndin g o f th e Partie s wit h respe c t to the subje c t m a tter hereof an d supersede s al l othe r Contract s an d understandings , bot h writte n and oral, with respect to the subject m atter hereof.

 

 

 

TWENTY - FOURTH . INTELLECTUA L P ROPERTY . THE CONSORTIUM grants non-exclu s ive, transferable author i zation to u s e t h e int e lle c tu a l prop e rty r i g ht ass o ci a t e d with the units and i n corporated s oftware, for the m ax i mum ti m e p e r m itted by the respecti v e countries under whose laws such rights arise, and with a territorial scope enco m p assing the entire world. THE CONSORTIUM represents that it has prop e r l y acquired all r ight and title to the DCA units and their respective co m ponents, an d guarantee s tha t neithe r th e units , no r th e software , violate any third-party intellectual property rights. In the event of a ter m ination of the consortium relationshi p betwee n IDG S an d Hanco , TH E CON S ORT I U M pro m is es to deliv e r the source code to BaseTek.

 

Paragraph: THE CONSORTIUM s hall inde m n i f y BaseTek for any third-party clai m s, d e m ands or lawsuits against Ba se Tek resulti n g from the breach of this Clause.

 

TWENTY - F IFTH. GUARANTEE OF THE UNITS. T H E CONSORTIUM guarantees the units for a m in i m u m of seven years from the d a te of exercise of t h e purchase option, without li m iting in any way the other obligations contained herein.

 

TWENTY - SIXTH . J O IN T AN D SEVERA L RES P ONSIBILITY . The m e mbers of THE CONSORT I UM are jointly and severally respons i ble to BaseTek for the execution and delivery o f th e presen t Contract.

 

TWENTY - SEVENTH . TAXES . Each Party is responsible for its own taxes as applicabl e t o it under Colombian law.

 

 

 

Executed in Bogotá D.C. this 1 5 th da y o f Septembe r 2015.

 

 

 

 

FO R BAS E TE K S.A . S.

 

 

 

 

/s/ PEDRO LUIS CAS T RO RUANO

PEDR O L UI S CAS T R O RUANO.

Legal Repr e sent a tive

 

 

 

 

FO R T H E C ON S ORTIUM

 

 

 

 

/s/ DOUGLA S SOLOMON

DOUGLA S SOLOMON

Legal Repr e sent a tive

 

 

ANNE X #1

ADDED-VALUE S E RVICES

 

THE CONSORTIUM is co m mi t t e d to delive r i n g added-value services for additional compensation, pursuant to independent contr a cts apart from the present Contract, such as:

 

- Creating new or alternative pay m ent ser v ice s an d m e thods , includin g Correspondent Banking, Wire Transfers and Collection. THE CONSORTIUM represents that it possesses its own transactio n al plat f orm switch via its s ubsidiary, MultiPay, S.A.S., which currently operates the platform o f Re d 4-7 2 an d corresponden t bankin g for Colpatria Bank.

 

- Outreach to other recharging networks th roug h a vendin g m ode l associate d wit h THE CONSORT I U M account , whic h includ e charg i n g point s wit h vendin g m a chin e that can perform the rechar g i ng of the TuLlave card ( subje c t to pilot test ap p r oval with t h e vending operator), the scope of which will b e r e lated to the aw a rd of addition a l devices apart from the 80 DCA units that are t h e subje c t of t h e presen t Contract.

 

- Support BASETEK in API development on the Android platform.

 

Ensure that the DCA units h a ve the ability to a c commodate the c u rre n t online payment model operated by Recaudo Bogotá S.A.S., v i a an alliance that BaseTek will create with t h e monetary transportation security comp a ny with which it p r e sently cont r acts.

 

 

 

ANNE X #2

FUNCTIONAL RE Q UIREM EN TS

 

Th e Mean s o f Payment

 

- Sale and dispensing of the physical m ethod of pay m ent (D e bit Cards). The debit card dispensation m odule m u st deliver the card that the custo m er is activating at the ti m e of purchase. Cards available for sale within t h e d evice are i n active.

 

- The recharge m odule must per m it recharg i ng of all card types currently operating with the S ITP syste m . BASETEK m ust ensure the correct charging m odu l e functionality with the ap p lication interface (API) and c o mply with all c u rre n t and future m odifications of the interface application.

 

- Must allow virtual recharges fo r car d activatio n fo r use rs wh o utiliz e subsidies, balance tra n sfers or rel o a d s exec u ted via the Internet.

 

Collec t ion

 

- Reception o f Currency Bill s : Receive Colo m b ian currency bills of all d eno m inations wit h a n initia l configu r ation ranging from the $1.000 pesos deno m ination to the $20.000 pesos denomination. The units must be configurable for receiving new bill denominations that may be introduced in the Colombian currency system. THE CONSORTIUM shall undertake the necessary developments to ensure that the units can accept denominations above $20.000 pesos.

- Reception o f Coins with Escrow Sy s te m : Recei v e all Colo m b ian c o in deno m inations with an initial configurat i on ranging from $50 pesos to $1.000 Pesos. The option of which coins the units will rec e ive s hall be p ar a m eterized o n a m achine-by- m achine basis and updatable to receive new coin deno m inations tha t m ay b e introduce d into the national currency syste m .

 

- Bills must be entered into the units one-at-a-time.

 

- The minimum storage capacity for each DCA is 1,000 bills.

 

- Each unit must come with three bill acceptors, each with a 1,000-bill capacity.

 

- If counterfeit bills are introduced, the units shall ret u rn the bills back to the user, infor m ing the user as to the reason for the r etur n , and then r e soli c it the s u b m ission of the bills into the syste m .

 

- If counterfeit bills are introduced, the units shall ret u rn the bills back to the user, infor m ing the user as to the reason for the r etur n , and then r e soli c it the s u b m ission of the bills into the syste m .

 

- Calibration of the B ill Acceptors. The risk of accept a nce of counterfeit m oney by t h e unit s lie s wit h TH E CONSORTIUM.

 

 

 

- If a car d -c h arging tra n s action can n ot be co mp leted a s a re s ult of a s y stem f ailure, the unit sh a ll r eturn t h e money to the custo m er and inform the custo m er that the trans a ction was not f easible. T h e f ailed t r ansaction s h all re m ain registered in the system but not affect the funct i onality of the unit going forward.

 

- Cross-reference the pay m ent m ethod again s t the current “blacklist” and deny the processing of transactions if the card is b l ocked. The unit m u st update the blacklist at least once a day before 4:00 a.m. B A SETEK shall m ake available to THE CONSORT I UM the API and the up d ated blackli s t.

 

- Allow the custo m er to consult his/her bal a nce on the card, and in the event that the balance is n egati v e, in f orm the clie n t of the a m ount of the recharge th a t is necessary to eli m inate the neg a tive balance.

 

- If a car d -c h arging tra n s action can n ot be co mp leted a s a re s ult of a s y stem f ailure, the unit sh a ll r eturn t h e money to the custo m er and inform the custo m er that the trans a ction was not f easible. T h e f ailed t r ansaction s h all re m ain registered in the syste m .

 

Other Fe a t ures

 

- Inventory Management: Card control and virtual control of cash/currency.

 

- Generation of alerts if there a re bill ja ms , unit failure or unavailability, hardware f ailures, so ft ware f ailu re s and/or co n necti v ity p r o ble m s.

 

- Co m patible for use by disabled persons, per the speci f icati o ns listed in the techni c al annex attac h ed hereto.

 

- The DCA must have the ability to provide the user with info r m ation on how to use the unit, via ani m ation, visual m essages and audio.

 

- An inte g rated m onitori n g and s ecurity ca m e ra , whic h wil l b e loc a te d o n th e fron t of the unit and can take a photo of the user a n d th e bil l acceptor . Vide o acces s shall re m ain available for eight days. Videos shall be reviewable on-site and which shall include date and hour of trans a ction as well as card nu m ber.

 

- Th e DC A mus t hav e a men u offerin g othe r language s fo r operatio n o f th e unit , wit h a m i n i m u m offerin g o f English.

 

- Provide in f or m ation on the display scre e n, such as transportation route finding, changes or updates in the syste m , wh i ch m ust be c onfigured according to the needs of the operation, as well as any other cont i nge n cies in the system that can p rovi d e additional info r m ation to i m p r ove the service ex p erie n ce.

 

 

 

- Provide data on a real-ti m e reporting basis, including infor m ation for previous days, detailing re c harge tran sa ctions, c a rd sales, a log of unit events, cas h flo w reporting, a m ount of c ash entered into the unit, a m ounts of r echarges and pay m ent rejections.

 

Technicalit y an d Structure

 

- A requirement of 5% in spare parts in stock.

 

- The DCAs m ust be designed to operate for the duration Contract under the environ m ental conditions typical in the city of Bogota. The units m ust be able to work outdoors with the respective dusty and humidity/ m oisture conditions inherent in the City. T h e devi c es ar e ce r ti f ied with Int e rnational Pr o te c tion 54 ( IP 5 4), and m ust be waterproof.

 

- Be equipped with an internal battery with a m in i mum capacity of 15 m inutes to m eet contingencies in case of power failure.

 

- Functional software and licenses meeting all legal requirements.

 

- The devel o p m ent of an intuitive, user- f r i endly interface, so custo m ers can execute purchases and recharges quickly, thus e xpediting the ti m e of t he tran s acti o ns.

 

- The interface design must be app r oved by RBSAS, and if required THE CONSORT I UM shall m ake requested adj u st m ents. Further m ore, if new unit functions are incorp o r ated after r eceipt and acceptance of the DCAs, THE CON S ORT I U M m u s t execut e the m .

 

- The units m ust co m e with an online, central m o nitoring solution, which allows for pro m pt attention related to ma intenance and op era tion a l iss u e s .

 

- THE CONSORTIUM must provide a techn i cal m anual with the details of the co m ponent parts, including respective life cycles.

 

- The units shall co m e equipped with a m et a llic cabi n et, w i th a frontal opening and equipped according to the operational nee d s. The cabi n et str u ct u re s hall ensure sturdiness f or place m e nt and location of the co m puter, utili z ing a m ain m etal structure, which m ust be fixed to t h e f loor by at le a st f our ( 4) s c rews or bolts, with a proper r u st tre a t m ent. The DCA must have a suita b le f a s tening sy s t e m so that its height does not allow for vibration or m is a lignment when force is e x erted via use.

 

- The device should be vandalis m -proof, abuse - resistant, and be fo r m atted to absorb shock, scratches, liquids and easy-clea n ing following atte m pts at vandalis m .

 

- Regarding the internal structure of the u n it, access to m on e y should be located in a co m par t m ent independent of the elect r onics or m aintenance co m p onents, and ensuring m echanis m s for secure access.
 
 

 

- The locks must be “security” grade.

 

- The device shall continue to o p erate in o ffline” m ode in t h e e vent of a tel e communications f ailure.

 

- In the event of failure, the units m u st be a b le to account locally for the possibility of recuperatio n o f info r m atio n o f sale s an d recharg e transactions.

 

- THE CONSORTIUM shall incorp o rate a tool f or m onitoring and m anaging the units on a 24/7 basis, which includes:

                 

- A messaging package that allows for the sending of alert messages and cost communication.

 

- Online ability to check the operation of all equi pm ent.

 

- Remote management should allow for the validation of active configurations in the units.

 

- Display devices shall be grouped according to a defined classification (e.g., by portals and station types).

- Must have storage functionality with a n even t lo g o f a t leas t 3 0 days.

 

- Capacity to inform the central control station of intervention events at the site location of the units, via an alarm system.

 

- Capacity to inform the central control station and/or RBSAS of any changes occurring during the execution of operations, including the capacity to inform such via an alarm system.

 

- Systems and inventory reports proving data to management regarding the sales of cards to customers.

 

- Be equipped with alarm system for c ash m anage m ent purposes.

 

- Alar m s related to failures of t h e hardware, software and connectivity.

 

- The system shall conform to existing proto c ols for connection to the central collection syste m .

 

- Access and Monitoring of Units’ Compart m ent s : Must ensure that t h e e q uip m ent has proper compart m ents for access by technical personnel, and that such co m part m ents ca n b e securel y locke d upo n ter m ination of m aintenance a n d installatio n work . I n the event of any change or update in conjunction with the aforementioned, the system shall report an immediate failure designated “high priority”.

 

 

 

Other Fe a t ures

 

- Provide one training session per se m ester for groups of up to twenty peo p le r e lated to technical operation of the DCA units, including for updat e s o r change s t o th e units.

 

- Deliver technical and operational manuals and updates thereto when appropriate.

 

- TH E CONSORTIU M technica l personne l mus t provide reports i n relatio n to technical services provided.

 

- The card recharge module must comply with the following minimum requirements:

 

- Card reader must co m p l y with ISO 14443 Type A.

 

- Supply Voltage: 110 V A C +/- 1 0 % 60 HZ according to Colo m bian electrical regulations.

 

- Must have electrical protection syste m s for the electrical outlets.

 

- Co m e equipped with a MTBF (Mean Ti m e Be t w een Failures) m odule.

 

- Operating T e m perature: 0°C to 50°C.

 

- Hu m idity: 15% to 90% without condensation.

 

- Possibility to incorporate 2 cxt6SAM m odules (Secure Access Module).

 

- Maxi m u m ti m e of f ull (rec h arg e ) transa c tion, f rom which the card is sit u ated facing the reader until t h e t r an s action log is ge n e r ated in the ter m inal: 300 m s.

 

- RTC (Real Ti m e Clock), which must m aintain a pre c isi o n ti m e in e xcess of 500 m s if updated on a daily or less frequent ba si s. It m ust c o m e w ith an exter n al sync com m a nd that ensur e s periodic synchronization.

 

- The deployed units m ust have at lea s t one E t hernet port and communications modem upgradea b le and scala b le accor d ing to the advances in cell u lar communication technology (3G, LTE, e t c.), covering the data su b m ission require m ents of the solution, w hic h allow s th e transfe r o f server data to Recaudo Bogota’s central processing unit.

 

- The transfer of info r m ation m ust be programmed auto m atically via E t hernet, GPRS , 3 G , 4 G LTE , etc.

 

- The deployed units m ust have the ability to operate under t w o contingency IP routing servi c es f or high a v ail a bility, so t h at in the e v ent t h at the pri m ary co n nection f ail s , auto m atic routing to the s econdar y connectio n occurs.

 

 

 

ANNE X #3

DELIVERY SCHEDULE

 

THE CONSORTIUM com m its to c o m ply with the f ollowing deliv e ry sc h edule:

First Delivery: Septe m ber 23, 2015 – 20 DCA un i ts.

Second Delivery: October 28, 2015 20 DCA units.

 

Third Delivery: November 4, 2015 20 DCA units.

 

Fourt h Delivery : Novembe r 11 , 201 5 2 0 DC A units.