ADVANCED ID CORPORATION
AUTHORIZED EXCLUSIVE DISTRIBUTOR AGREEMENT
This Authorized Exclusive Distributor Agreement, along with any written
purchase orders ("Purchase Orders") executed hereunder (collectively,
the "Agreement") made this 15th September, 2007, by Kit Loong Tyre
Management Sdn Bhd, #9, Xxxxx 000, Xxx Xxxxx Xxxxxxx, 00000 Xxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx (hereinafter called 'Distributor') and
Advanced ID, 0000 0 Xxxxxx, XX #000 Xxx 0., Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0 (hereinafter called 'AID').
WHEREAS AID supplies certain radio frequency identification ("RFID")
products, software (the "Software"), tire inspection equipment and
services (hereinafter collectively called "PRODUCTS" and defined in
Appendix A);
WHEREAS, Distributor desires to partner and team with AID to market,
promote and promulgate said PRODUCTS throughout the TERRITORY (as
defined in Appendix A) for the parties mutual benefit; and
WHEREAS, Distributor proposes and desires to use its best efforts and
resources to actively promote remarket, resell and/or sublicense said
PRODUCTS to end-users in the TERRITORY.
NOW, THEREFORE, in consideration of the terms, mutual promises and
agreements contained herein, the parties to hereby agree as follows:
Distributor License Terms
1.1 AID hereby grants, and DISTRIBUTOR accepts, a limited, exclusive,
non-transferable, revocable license to resell, support and sublicense
the PRODUCTS in accordance with the terms and conditions of this
Agreement and solely within the TERRITORY. The "TERRITORY" shall
consist of the specific geographic area detailed in Appendix A attached
hereto. The TERRITORY may be revised by the agreement of both parties
or by necessity. If by necessity, changes to the definition of
TERRITORY should be effectuated by delivering a written Notice (as
defined) to that effect either by hand delivery or via the mails; such
Notice to be delivered at least sixty (60) days before such revision is
to take affect.
The resale support and/or sublicensing of the PRODUCTS shall only be
done by use of a Software Sublicense and Product Sales Agreement (the
"Sales Agreement") between DISTRIBUTOR and the purchasing entity in the
TERRITORY (the "Purchaser(s)"). Such Sales Agreement to include
substantially similar terms and conditions as those detailed with no
less protection of AID intellectual property than is afforded thereby.
Purchase Commitments, Pricing, Marketing, Sales and Support
-----------------------------------------------------------
Purchase Commitment
The DISTRIBUTOR hereby commits to purchase order and pay for, using
best endeavors, the following amounts of PRODUCTS from AID in
accordance with the corresponding timelines:
- 25,000 tire tags and 20 readers and 50 Pneu-logic kits from AID
during Contract Period One.
- 250,000 tire tags and 120 readers and 100 Pneu-logic kits from
AID during Contract Period Two.
- 1,000,000 tire tags and 300 readers and 200 Pneu-logic kits from
AID during Contract Period Three.
Pricing
-------
The DISTRIBUTOR may purchase PRODUCTS (and any required licenses
thereto) of AID at the prices and upon the terms and conditions
specified in the price lists and bulletins published by AID, which
price lists and bulletins may be revised from time to time by AID upon
notice to DISTRIBUTOR. The DISTRIBUTOR will be accorded such discounts
or terms and conditions as the parties may from time to time mutually
agree upon.
The parties agree that DISTRIBUTOR shall use Purchase Orders to
purchase PRODUCTS (and any required licenses thereto) from AID. A
Purchase Order, when signed by both parties, may contain terms and
conditions mutually agreed upon by the parties that may supersede the
terms and conditions of this Agreement for the specific sale of
PRODUCTS (and any required licenses thereto) that the Purchase Order
covers, however, Purchase Orders shall not amend this Agreement unless
expressly designed to. Unless otherwise specified in a Purchase Order,
payments thereon shall be net thirty (30) days from the invoice date,
with a two percent (2%) discount applied to all payments received
within 10 days of the invoice date.
DISTRIBUTOR shall be solely responsible for the pricing extended to,
the invoicing of and collection of payment from the Purchaser. Nothing
in this Subsection 2.2.3 shall be construed to condition payment to AID
under a Purchase Order on the payment from a Purchaser to DISTRIBUTOR.
Marketing, Sales and Support Provisions
---------------------------------------
The DISTRIBUTOR agrees to use its best efforts to promote, re-market,
resell and/or sublicense the PRODUCTS to the Purchasers in the
TERRITORY, and periodically provide AID with written progress reports
on such efforts in a format that is prescribed by and acceptable to
AID.
The DISTRIBUTOR agrees to pay all of its expenses incurred in the
performance of this Agreement, provided, however, that AID may
reimburse the DISTRIBUTOR, at AID sole discretion, for certain expenses
approved in writing.
AID agrees to cooperate with and assist where it can in DISTRIBUTOR'S
promotions, marketing, sales and sublicensing efforts.
AID agrees to provide DISTRIBUTOR with one English version of the
Operation and Set-up Manual for the PRODUCT (the "Manual"), and
DISTRIBUTOR agrees to provide for and exercise the same intellectual
property protection that AID does for its publications and shall not
remove any copyright, trademark or patent notices affixed to the Manual
by AID.
Confidential Information
------------------------
Each party hereby acknowledges that it may receive confidential
information of the other party including without limitation, software,
computer programs, correspondence, copies of invoices, lists of
customers, specifications, flow charts, marketing plans, financial
information, business plans and procedures, the terms of this
Agreement, employee information, and other sensitive information
relating the other party's business under this Agreement or otherwise
(hereinafter referred to as "Confidential Information"). Confidential
Information does not include (i) information independently developed by
the recipient without reference to the other party's Confidential
Information; (ii) information in the public domain through no wrongful
act of the recipient, or (iii) information received by the recipient
from a third party who was rightfully in possession of such information
and had no obligation to refrain from disclosing it.
With respect to the other party's Confidential Information, and except
as expressly authorized herein or as required by law, the recipient
hereby agrees that during the term hereof, and at all times thereafter,
it shall not use, commercialize or disclose such Confidential
Information to any person or entity, except to its own employees having
a "need to know" and to such other recipients as the other party may
approve in writing. In no event shall either party attempt to
decompile, disassemble or reverse engineer the other party's
Confidential Information and any information discovered thereby shall
also be treated as Confidential Information belonging exclusively to
the other party. Each party shall use at least the same degree of care
in safeguarding the other party's Confidential Information as it uses
in safeguarding its own Confidential Information, but in no event shall
less than reasonable diligence and care be exercised.
Acceptance of Orders
--------------------
AID MAY UPON FIFTEEN (15) DAYS notice and in good faith; decline to
accept any order placed by DISTRIBUTOR. Additionally, AID expressly
reserves the right to discontinue the production, development, sale or
licensing of some, any or all the PRODUCTS, and, in its sole
discretion, to allocate some, any or all its' PRODUCTS during periods
of shortages.
The DISTRIBUTOR anticipates that it may incur certain extraordinary
expenses involved with its efforts to introduce AID and the PRODUCTS in
the TERRITORY. In recognition of this, AID hereby agrees that, for the
duration of this Agreement, and for two (2) years thereafter (unless
otherwise agreed to by the parties), AID will not directly or
indirectly solicit, or offer the PRODUCTS to any Purchaser that
DISTRIBUTOR sold any PRODUCTS to; Purchaser, for purposes of this
Subsection 4.2, shall be limited in definition to include only the
division and/or business group of the entity to which DISTRIBUTOR sold
PRODUCTS.
It is expressly understood and agreed that in its performance
hereunder, the DISTRIBUTOR shall act independently of AID, and, with
the limited exception of the license to subcontract certain of the
PRODUCTS under the Sales Agreement, shall not have the power to bind
AID in any manner, nor enter into any contract by or on behalf of AID.
The DISTRIBUTOR covenants and agrees not to hold itself out as, or
represent itself to be an agent to employee of AID.
5. Representations and Warranties
-----------------------------------
Representations and Warranties of AID
-------------------------------------
AID warrants that it has clear title to the PRODUCTS.
AID warrants that any hardware, as provided with the PRODUCTS, complies
with the regulations of, and has been approved by, the United States
Federal Communications Commission.
All AID rates and fees are exclusive of any applicable sales, uses,
value-added, or other federal, state or local taxes, or any import
duties or tariffs imposed on the subject matter or transactions under
this Agreement, and DISTRIBUTOR shall be responsible for all such
taxes, duties and tariffs, except that AID shall be responsible for any
corporate franchise taxes imposed on AID by law and for any taxes based
on its net income or gross receipts.
THE WARRANTIES AND LIMITATIONS SET FORTH IN THIS SUBSECTION 5.1
CONSTITUTES THE ONLY WARRANTIES OF AID WITH RESPECT TO ANY OF THE
PRODUCTS, THE SOFTWARE OR THEIR SUPPORT. SUCH WARRANTIES ARE IN LIEU
OF, AND AID HEREBY DISCLAIMS, ALL OTHER WARRANTIES, STATUTORY OR
OTHERWISE, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. IN ADDITION, UNDER NO CIRCUMSTANCES SHALL AID BE LIABLE FOR
ANY SPECIAL, INCIDENTIAL, INDIRECT, STATUTORY, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OF ANY KIND WHATSOEVER, OR FOR ANY LOST PROFITS,
BUSINESS OR REVENUE, LOSS OF USE OR GOODWILL, OR OTHER LOST ECONOMIC
ADVANTAGE, ARISING OUT OF OR RELATED TO THE AGREEMENT OR THE BREACH
HEREOF, WHETHER SUCH CLAIMS ARE BASED ON BREACH OF CONTRACT, STRICT
LIABILITY, TORT, ANY FEDERAL OR STATE STATUTORY CLAIM, OR ANY OTHER
LEGAL THEORY, EVEN IF AID KNOW, SHOULD HAVE KNOWN, OR HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING LIMITATION SHALL
SURVIVE AND APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THE AGREEMENT
IS DETERMINED TO HAVE FAILED ITS ESSENTIAL PURPOSE.
Representations and Warranties of DISTRIBUTOR
---------------------------------------------
The DISTRIBUTOR represents and warrants that it is a Malaysian
corporation, in good standing with that Country and has the necessary
governmental approvals to conduct business in the TERRITORY.
The DISTRIBUTOR represents and warranted that it is not in violation of
any order, judgment, injunction, award or decree binding upon it which
violation, individually or in the aggregate, would have a material
adverse effect to any of the terms and conditions of this Agreement.
The DISTRIBUTOR also represents and warrants that it has to the best of
its ability to date, and from hence forth shall comply, and will
continue to comply in all material respects with all international,
federal, state and local and/or foreign laws, ordinances, rules,
regulations and orders (collectively, the "Laws") applicable to the
conduct of its business or the ownership of its assets and properties,
both in the United States and in all of the sovereign nations and
territories of the TERRITORY, if any. DISTRIBUTOR further represents
and warrants that there are no outstanding citations, fines or
penalties that have been imposed or asserted against DISTRIBUTOR for
any violation or alleged violation of the above referenced Laws.
DISTRIBUTOR represents and warrants that it is (and since the date of
its formation has been) and shall continue to be in compliance with and
current in the payment of all required international, federal, state,
county, local, foreign, and other taxes, including, without limitation,
income taxes, estimated taxes, excise taxes, sales taxes, use taxes,
gross receipts taxes, franchise taxes, employment and payroll related
taxes, withholding taxes, property taxes and import and export duties,
whether or not measured in whole or in part by net income and all
deficiencies, or other additions to tax, interest and penalties
(hereinafter, "Taxes" or, individually, a "Tax"). DISTRIBUTOR does not
know of any Tax deficiency or claim for additional Taxes or interest
thereon or penalties in connection therewith, asserted or threatened to
be asserted against DISTRIBUTOR by any taxing authority. Except as
provided for in Subsection 5.1.3 DISTRIBUTOR represents and warrants
that it alone shall be responsible for all such Taxes associated with
this Agreement.
DISTRIBUTOR represents and warrants that it currently has in full force
and effect, will continue to have in full force and effect and shall
obtain when necessary all licenses, permits, franchises, orders or
approvals of any governmental entity that are required for the
operation of DISTRIBUTOR'S business and/or the use, sale and/or
licensing of the PRODUCTS as contemplated by this Agreement, with such
exceptions as would not have, individually or in the aggregate, a
material adverse effect on the terms and conditions hereof. All
personnel of DISTRIBUTOR also have material licenses, permits,
franchises, orders or approvals of any governmental entity and from any
professional organization that are required for the operation of
DISTRIBUTOR'S business and/or the use, sale and/or licensing of the
PRODUCTS as contemplated by this Agreement, with such exceptions as
would not have, individually or in the aggregate, a material adverse
effect on the terms and conditions hereof (collectively, with the items
in the previous sentence, "Permits").
Further, and not in preclusion of any other subsection under this
Subsection 5.2 or elsewhere, DISTRIBUTOR represents and warrants that
it will, at its own expense, comply with all applicable United States
and foreign laws and regulations applicable to DISTRIBUTOR in the
exercise of its rights and obligations under this Agreement. More
specifically, DISTRIBUTOR shall comply fully with any and all
governmental laws, statutes, ordinances, administrative orders, rules
or regulations having any and all relation to its duties under this
Agreement, and shall procure all licenses and pay all fees and other
charges required thereby. DISTRIBUTOR shall not, nor shall DISTRIBUTOR
authorize or permit its employees, agents, or otherwise to, export or
re-export any of the PRODUCTS, any of AID Confidential Information or
any of AID proprietary property in any form, in whole or in part, to
any country specified as a prohibited destination in applicable
international, federal, state and local laws, regulations and
ordinances, including the Regulations of the U.S. Department of
Commerce (including, but not limited to, the rules and regulations
governing exports of encryption technology in software as administered
by the Bureau of Export Administration ("BXA") in the U.S. Department
of Commerce under the Export Administration Regulations and/or the U.S.
State Department, without first obtaining any requisite U.S. government
approvals by application made through AID. This Subsection 5.2.5 shall
remain in effect beyond the termination or expiration of this Agreement
and shall apply to DISTRIBUTOR'S successors and assigns, if any. Any
violation by DISTRIBUTOR of any governmental export, import or any of
the Laws will be considered a material breach of this Agreement.
Indemnifications
----------------
By AID
------
AID will indemnify, defend and hold harmless DISTRIBUTOR from all costs
and expenses (including reasonable attorneys' fees and court costs)
arising from a third party claim against DISTRIBUTOR based on an
actual:
Material breach of AID'S representations and warranties:
- Acts or omissions constituting gross negligence or willful
misconduct, committed by AID.
- Failure by AID to comply with applicable governmental laws and
regulations; or
- Subject to Subsection 5.1.4, infringement by AID of any United
States patent, United States copyright, United States trademark, United
States trade secret or other United States intellectual property right.
This Section 6.1 shall not apply to claims arising as a result of
DISTRIBUTOR'S improper use, sale or sublicensing of AID PRODUCTS.
By DISTRIBUTOR
--------------
DISTRIBUTOR will indemnify, defend and hold harmless AID from all costs
and expenses (including reasonable attorney's fees and court costs)
arising from a third party claim against AID based on an actual or
alleged:
Failure by DISTRIBUTOR to perform its obligations under the Agreement,
unless such failure is a direct result of an action by AID;
Breach of DISTRIBUTOR'S representations and warranties;
Act or omission constituting gross negligence or willful misconduct,
committed by DISTRIBUTOR;
Failure by DISTRIBUTOR to comply with any and all applicable
governmental laws and regulations;
Infringement by DISTRIBUTOR (or any property or data provided by
DISTRIBUTOR with the PRODUCTS) of any patent, copyright, trademark,
trade secret or other intellectual property right of a third party or
parties; OR
Infringement by DISTRIBUTOR of any patent, copyright, trademark, trade
secret or other intellectual property right of a third party or parties
due to the misuse and/or improper sale or licensing of any of the
PRODUCTS.
6.3 If a claim covered under this Section 6 appears likely or is
made, the party against whom the claim is made will promptly provide
the other party with Notice of such claim.
Term of Agreement and Notice of Breach
--------------------------------------
Term of Agreement
-----------------
This initial term of this Agreement shall be for twelve (12) months,
and such term will automatically renew for additional twelve (12) month
periods unless one party gives Notice to the other of its intention not
to renew sixty (60) days before the expiration of the initial term or
any renewal term.
In the event of a breach of the Agreement, the non-breaching party may
terminate this Agreement by written Notice, such termination to take
affect not less than fifteen (15) days from the date of Notice unless
the breaching party cures the breach to the reasonable satisfaction of
the non-breaching party.
This Agreement may be terminated at any time, with or without cause, by
either party hereto, by written Notice given to the other party not
less than sixty (60) days prior to the effective date of such
termination.
Non-Solicitation
----------------
Except as provided under the Agreement, party shall not directly or
indirectly solicit or offer employment to, or directly or indirectly
accept services, by an employee or contractor of the other party,
during the term of the Agreement and for one (1) year thereafter,
without the prior written consent of the other party. For purposes of
the Agreement, use of general employment advertising and independent
employment agencies, if not directed at one or more of the other
party's employees, shall not constitute solicitation.
Miscellaneous
-------------
Notices
-------
Except as separately provided for or required herein, any notice or
other communication required or permitted hereunder ("Notice") shall be
in writing and shall be delivered personally, telegraphed, telexed, and
sent by facsimile transmission with confirmation retained or sent by
certified, registered or express mail, postage prepaid. Any such
Notice shall be deemed given when so delivered personally, telegraphed,
telexed or sent by facsimile transmission with confirmation retained
or, if mailed, three days after the date of deposit with the United
States Postal Service, as follows:
If to AID to: If to a DISTRIBUTOR:
Attention: Xxx Xxxxx-CEO Attention: Xxxxxxx The
Executive Director
Address: 0000 0 Xxxxxx XX Address: #9, Jalan 201
#200 Bay 0 Xxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx, 00000 Xxxxxxxx Xxxx Xxxxxxxx
Xxxxxx X0X 0X0 Xxxxxxxx
Tel: 000-000-0000 Tel: 000-0000-0000
Fax: 000-000-0000 Fax: 000-0000-0000
Entire Agreement
----------------
This Agreement (including the Appendices), any Purchase Orders executed
in connection hereto and any collateral agreements executed in
connection with the consummation of the transaction contemplated
herein, contain the entire agreement among the parties with respect to
subject matter hereof and supersedes all prior agreements, written or
oral, with respect thereto.
Waivers and Amendments:
----------------------
Non-Contractual Remedies; Preservation of Remedies
--------------------------------------------------
This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any waiver on the part of any party of any
such right, power or privilege, nor any single or partial exercise of
any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have
at law or in equity except where this Agreement expressly provides
otherwise.
Force Majeure
-------------
A party shall be relieved from an obligation (other than the obligation
to make payments or an obligation relating to proprietary rights or
confidentiality) while a cause, outside of its reasonable control, and
that it cannot reasonably circumvent, prevents the performance of such
obligation.
Governing Law
-------------
This Agreement shall be governed and construed in accordance with the
international laws, exclusive of its choice of law rules.
Binding Effect: Assignment
---------------------------
This Agreement shall be binding upon and inure to the benefit of the
parties of their respective successors to rights and assets, as well as
any legal representatives. This Agreement is not assignable except (i)
for DISTRIBUTOR, with prior written consent of AID, such consent not to
be unreasonably withheld; (ii) by operation of law, (iii) by AID to any
of its affiliates, or (iv) in connection with the merger, consolidation
or sale of all or substantially all of its business or assets of AID.
Counterparts
------------
This Agreement may be executed by the parties hereto in separate
counterparts; each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and
the same instrument. Each counterpart may consist of a number of
copies hereof each signed by less than all, but together signed by all
of the parties hereto.
Appendices and Exhibits
-----------------------
The Appendices, Exhibits and any future Purchase Orders executed in
connection herewith are a part of this Agreement as if fully set for
the herein. All references herein to Sections, subsections, clauses,
Appendices, Exhibits and/or Purchase Orders shall be deemed references
to such parts of this Agreement, unless the context shall otherwise
require.
Headings and Severability
-------------------------
The headings of this Agreement are for reference only, and shall not
affect the interpretation of this Agreement. If any provision of the
Agreement is held to be unenforceable, all remaining provisions shall
remain in full force and effect.
Media Release and Public Disclosure
-----------------------------------
AID and DISTRIBUTOR agree that any public disclosure of the existence
of this Agreement and the subsequent product launches and major media
events will be made by mutual consent in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date first above written.
ADVANCED ID CORPORATION KIT LOONG TYRE MANAGEMENT SDN BHD
X /s/Xxx Xxxxx X /s/Xxxxxxx Teh
-------------------------- ----------------------------
Name: Xxx Xxxxx Name: Xxxxxxx Teh
Title: President/CEO Title: Executive Director
Appendix A
Products, Territory and Exclusivity
Capitalized terms not defined herein shall have the meaning ascribed to
them in the Agreement between AID and DISTRIBUTOR.
Except as otherwise provided for herein, AID hereby grants, on an
exclusive basis, specifically identified countries below as the
GEOGRAPHIC TERRITORY, the following TERRITORY to DISTRIBUTOR under this
Agreement, provided, however that such exclusivity pertains ONLY to the
sale and/or licensing of the PRODUCTS to the entities and specific uses
identified below. AID acknowledges and agrees that it is the intention
of both parties to preserve the exclusivity granted to DISTRIBUTOR.
AID agrees in good faith to use all reasonable efforts to preserve the
exclusivity granted to DISTRIBUTOR.
GEOGRAPHIC TERRITORY: The Country of Greater China (mainland China,
Hong Kong, Macau and Taiwan), and ASEAN countries (Malaysia, Singapore,
Brunei, Thailand. Indonesia, Philippines, Vietnam, Cambodia, Laos and
Myammar)
The exclusivity granted above shall pertain to the following
applications specifically for tire products.
Tire tags, tire patches, tire tapes and associated UHF RFID readers for
tire identification, track, trace and inventory (supply chain)
applications.
Products included will be tags, patches, tapes, readers, and software.
Pneu-logic hardware, tools, and software.
The exclusivity granted above shall not include
Sale of Pneu-logic hardware, tools, and software by AID's and/or Pneu-
logic's Resellers appointed prior to this agreement to multinational
customers that may have presence in the TERRITORY
Sale of Pneu-logic hardware, tools, tire tags, tire patches, tire
tapes, readers, and software by AID to the top ten global tyre
manufacturers in the TERRITORY
Any notations, clarifications, or changes to the above shall be
designated on a mutually approved basis, shall be in writing and shall
be signed by both parties.
Terms and Conditions for Exclusivity and Contract Periods
DISTRIBUTOR shall maintain annually the exclusivity with respect to the
TERRITORY by meeting the purchase requirements0 as set forth Section
2.1 of the agreement. Specifically:
Contract Period One: DISTRIBUTOR shall have the exclusivity from the
date of this Agreement through December 31, 2008 provided, however,
that the DISTRIBUTOR purchases and pays for the minimum purchased
requirements of Section 2.1.1 of the Agreement.
Contract Period Two: DISTRIBUTOR shall have exclusivity from January
1, 2009 through December 31, 2009 provided, however, that the
DISTRIBUTOR purchases and pays for the minimum purchased requirements
of section 2.1.2 of the Agreement.
Contract Period Three: DISTRIBUTOR shall have exclusivity from January
1, 2010 through December 31, 2010 provided, however, that the
DISTRIBUTOR purchases and pays for the minimum purchased requirements
of section 2.1.3 of the Agreement.
