ASSET SALE AGREEMENT between SADDINGTON LIMITED (the “Buyer”) and TRUE PRODUCT ID, INC., AND TRUE PRODUCT ID TECHNOLOGY LIMITED (collectively the “Sellers”) Dated as of November 3, 2008
between
SADDINGTON
LIMITED
(the
“Buyer”)
and
AND
TRUE
PRODUCT ID TECHNOLOGY LIMITED
(collectively
the “Sellers”)
Dated
as of November 3, 2008
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THIS
ASSET SALE AGREEMENT is made as of this 3rd day of November, 2008 (the “Effective Date”) by
and between
(1)
SADDINGTON LIMITED, a
corporation organized under the laws of the British Virgin Islands, whose
registered office is at BVI 1499542, P.O. 957, Offshore Incorporations Centre,
Road Town, Tortola, British Virgin Islands (“Buyer”),
--AND--
(2) TRUE PRODUCT ID, INC. (“TPID US”), a
corporation organized under the laws of the state of Delaware with its principal
offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ on behalf of itself and its Affiliates, including
TRUE PRODUCT ID TECHNOLOGY
(BEIJING) LIMITED, a limited liability company and joint venture
organized under the laws of the People’s Republic of China with its principal
offices at 11th Floor,
Office Building of Jade Palace Hotel ▇▇.▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, People’s Republic of China 100086 (“TPID Beijing”);
and
(3) TRUE PRODUCT ID TECHNOLOGY
LIMITED, a limited liability company organized under the laws of Hong
Kong with its registered office at Suite 1005, Allied Kajima ▇▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ (“TPID
HK”).
(Collectively,
TPID
US and TPID HK are referred
hereinafter as “TPID” or “Sellers”.)
BACKGROUND/
RECITALS
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A.
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Sellers and
their Affiliates
(individually and/or collectively) have the rights to certain patented and
unpatented intellectual property, know-how, trade secrets, and other
proprietary and confidential information relating to and associated with
product authentication and anti-counterfeiting technology, including, but
not limited to, synthetic DNA (“S-DNA”) and other elemental taggants;
scanning, marking, detection, safety valve and other devices or apparatus;
KMAC global supply chain and data information collection database,
software, and other systems; authentication services; and other
anti-counterfeiting, security, and other authentication technology, as set
forth in Exhibit “1” attached hereto (collectively the “Subject
Technology”). Included, without limitation, within the term Subject
Technology are all trademarks, patents, marks and logos (whether
registered or not) held or applied by Sellers and their Affiliates
(individually and/or collectively);
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▇.
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▇▇▇▇▇▇▇ and
their Affiliates have
the exclusive rights to manufacture, distribute and otherwise
commercialize the Subject
Technology throughout the world, and have the rights to certain
contracts in the People’s Republic of China and other parts of Asia
related to the Subject
Technology, including, but not limited to, the Chinese National Gas
Tank Contract with the State General Administration for Quality
Supervision, Inspection and Quarantine of the People’s Republic of China
(“AQSIQ”)
(the “AQSIQ
Chinese National Gas Tank Contract”) and other special equipment
contracts with AQSIQ, as set
forth in Exhibit “2” attached hereto (collectively, the “Asian
Contracts”);
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C.
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To
operate, implement and administer the AQSIQ Chinese National
Gas Tank Contract, AQSIQ has
agreed to form a new Chinese joint venture with TPID US of
which TPID
US would own seventy percent (70%) and two entities related to
AQSIQ
would collectively own thirty percent (30%) (the “AQSIQ Gas Tank
JV”). On January 29, 2008, AQSIQ approved
the filing of an “application for the name of foreign investment business
to be pre-approved” with the respect to the AQSIQ Gas Tank
JV, which is to be called “China Inspection True Product Technology
Inc. Ltd.,” of which TPID US is to
own 70%, China Special Equipment Inspection Association (an association
within AQSIQ) 12%, and
Beijing Youhong Technology Development Inc. Ltd. (a AQSIQ-related
entity) 18%. The registration of the AQSIQ Gas Tank
JV and the preparation of the relevant documents must still be
completed;
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▇.
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▇▇▇▇▇▇▇ owns a
sixty percent (60%) ownership interest in TPID
Beijing. Sellers also
control the board of directors of TPID
Beijing.
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▇.
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▇▇▇▇▇▇▇ have
the fixed assets in Asia set forth in Exhibit “3” attached hereto
(collectively the “TPID Asian Fixed
Assets”);
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▇.
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▇▇▇▇▇▇▇ have
the business in Asia, including, but not limited to, computers, data and
equipment, which are set forth in Exhibit “3” attached hereto
(collectively the “TPID Asian
Business”); and
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▇.
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▇▇▇▇▇▇▇ wish to
sell to Buyer, and
Buyer
wishes to buy from Sellers, all
rights and ownership of Sellers and
their Affiliates to
the Subject
Technology, all rights of the Sellers and
their Affiliates to
the AQSIQ Gas
Tank Contract and other Asian
Contracts, all rights and ownership interests of Sellers to the
AQSIQ Gas Tank
JV, all TPID Asian Fixed
Assets, all TPID Asian
Business, all of Sellers’
ownership interest in TPID Beijing,
and the entire share capital of TPID HK,
pursuant to the terms and conditions set forth in this Agreement.
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NOW,
THEREFORE, in consideration of the promises and the mutual covenants, agreements
and representations herein contained, the legal sufficiency of which is
acknowledged, and intending to be legally bound, BUYER and SELLERS agree as
follows:
SECTION
1
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1.1.1
“Affiliate” in
relation to any Person means any Person that controls, is controlled by or is
under common control with that Person. For the purposes of this definition, the
term “control”
means (i) beneficial and/or legal ownership of at least fifty percent (50%) or
more of the outstanding voting securities of a company or other business
organisation with voting securities (or such percentage as required under any
particular jurisdiction to confer controlling powers through ownership of voting
securities broadly equivalent to the controlling powers attendant on ownership
of at least fifty percent (50%) or more of outstanding voting securities in a
United States corporation), (ii) a fifty percent (50%) or greater interest in
the net assets or profits of a partnership or other business organisation without voting
securities, or (iii) the ability, whether directly or indirectly, to
direct the affairs, management or policies of any such Person. TPID Beijing is an
Affiliate of
Sellers.
1.1.2
“Agreement”
means this Asset Sale Agreement, together with the Exhibits attached hereto,
each of which is hereby incorporated by reference herein, and any instrument
amending this Agreement in
accordance with Section 12.5.
1.1.3 “Asia” means the
territories and countries designated as exclusive as set forth in Exhibit 4 to
this Agreement.
1.1.4 “Confidential
Information” means all information delivered by a Party to another
Party in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that
is proprietary in nature provided that such term does not include information
that (a) was publicly known or otherwise known to such receiving Party prior to the
time of such disclosure, (b) subsequently becomes publicly known through no
act or omission by such receiving Party or any Person
acting on such Party’s behalf, or
(c) otherwise becomes known to such receiving Party other than
through disclosure by the delivering Party or any Person
with a duty to keep such information confidential.
1.1.5 “Governmental Body”
means any nation or government or any province or state or any other political
subdivision thereof, any entity, authority or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any government authority, agency, department, board,
commission or instrumentality of Hong Kong and the People’s Republic of China or
any political subdivision thereof; any court, tribunal or arbitrator; and any
self-regulatory organization.
1.1.6 “Gross Receipts” shall
mean the total amount of funds actually
received
and collected by Buyer or TPID US (as the case
maybe) and its respective affiliates from sales of product or service utilizing
the Subject
Technology, including, but not limited to, (x) cash, money orders and
cleared checks less charges imposed by banks for clearing, deposits, redeposits
or returns and (y) cleared credit card charges less the bank discount rate; less
the following amounts actually paid by Buyer or TPID US (as the case
maybe), its respective affiliates, licensees, distributors and manufacturers:
i.) discounts allowed; ii.) returns; iii.) transportation charges or allowances;
iv.) packing and transportation packing material costs; v.) customs and duties
charges; and
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vi.)
sales, transfer and other excise taxes or other governmental charges (including
any tax or government charge, duty or assessment or any tax such as a value
added or similar tax or government charge) levied on or measured by the sales
but no franchise or income tax of any kind whatsoever. The term “Gross Receipts”
shall also include funds actually received and collected by Buyer or TPID US (as the case
maybe) from any sublicensee in connection with the
Sold Technology, including, but not limited to, any licensing
fees received by it from its sublicensees regarding the Subject Technology.
The term “Gross Receipts” shall also include funds actually received and
collected from or as a result of any settlement, judicial, mediation or
arbitration proceedings, or litigation arising from an alleged infringement by a
third party of the Subject Technology.
To the extent possible, the term “Gross Receipts” shall
be interpreted in according with U.S. GAAP principles.
Revenue received from foreign sources shall be at its value in U.S. dollars
when
received.
1.1.7. "NOPBT" means Net
Operating Profit Before Tax and shall mean the
total amount of operating revenues of Buyer or TPID US (as the case
maybe) less the operating expenses including costs of goods or technology
supplied and share costs of distribution and selling and administrative expenses
and headquarters expenses of Buyer or TPID US (as the case
maybe) and prior to applying taxes, as adjusted for interest expense on the
present value of operating leases but excluding interest expense or income on
debt and cash. To the extent possible, the term “NOPBT” shall be
interpreted in accordance with U.S. GAAP principles. Revenue received from
foreign sources shall be at its value in U.S. dollars when
received.
1.1.8 “Party” has the
meaning set forth in the Recitals.
1.1.9 “Person” means any
natural person, firm, partnership, association, corporation, company, trust,
business trust, Governmental Body or other entity.
1.1.10 “Time of Closing”
means 5:00 pm Hong Kong time on the Closing Date as set
forth in Section 6.1.
1.1.11 “Time of Delivery”
means the time for the delivery of the closing documents as set forth in Section
6.2.3.
1.1.12 “Transactions” means
the transactions contemplated under this Agreement.
1.2.1
In this Agreement, where the
context admits or requires, and unless otherwise specifically provided herein
(a) words importing the singular number only shall include the plural and vice
versa, (b) words importing a specific gender shall include the other gender, (c)
references to Persons shall include their heirs, executors, administrators or
assigns as the case may be, (d) references to “including” means “including but
not limited to”, and
“herein”,
“hereof”, and “hereunder” refer to this Agreement as a whole,
and (e) any reference to a number of “days” hereunder shall refer to calendar
days.
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1.2.2
The division of this Agreement into
Sections and the insertion of headings are for convenience of reference only and
shall not affect the interpretation hereof. References to statutory provisions
shall (unless otherwise expressly provided) be construed as references to those
provisions as in effect as at the date of this Agreement.
1.2.3
To the extent that any obligation of Sellers under this
Agreement is
satisfied by any of their Affiliates, such
obligations shall be deemed to have been satisfied by Sellers.
PURCHASED
ASSETS
2.1.1
The Subject
Technology;
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2.1.2
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The
AQSIQ Gas Tank
Contract;
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2.1.3
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The
AQSIQ Gas Tank
JV;
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2.1.4
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All
TPID Asian
Contracts;
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2.1.5
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All
TPID Asian Fixed
Assets;
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2.1.6
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All
TPID Asian
Business (including
the right to use the business name of “True Product”
or “TPID”
(the “Business
Name”) in Asia);
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2.1.7
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All
of Sellers’
ownership interest in TPID
Beijing;
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2.1.8
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The
entire share capital of TPID
HK,
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| 2.1.9 | All rights and claims or causes of action against Third Parties relating to any of the assets listed in the foregoing subsections 2.1.1 through 2.1.8 arising from or based on events or circumstances occurring or existing or omissions to act occurring prior to the Time of Closing. |
Without
prejudice to the provisions of Section 7 and Section 9, Buyer shall be
responsible for (and Sellers and
their Affiliates shall
have no responsibility for) all liabilities after the Time of Closing or the Time of Delivery, as
applicable, related to the Purchased Assets or
the use of the Purchased Assets (the
“Assumed
Liabilities”) including, without limitation, any Losses (as defined in
Section 9.1) arising from or related to (a) events which occurred after the
Time of Closing or (b)
products made or sold by Buyer, its
Affiliates, sublicensees or assignees after the Time of Closing, except where
Sellers are a licensee of Buyer under this
Agreement.
Buyer’s
obligations with respect
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to the
Assumed
Liabilities relating to any specific Purchased Asset or
the use of any specific Purchased Asset shall
apply after the later to occur of the Time of Closing or the Time of Delivery for
that specific Purchased
Asset.
PURCHASE
CONSIDERATION
3.1.1 Revenue Share
Participation. Buyer shall pay TPID US an amount
equal to five percent (5%) of NOPBT of Buyer for the first
thirty (30) months from the month of first revenue receipts and thereafter five
percent (5%) of the Gross Receipts for
the duration of the unexpired sixty (60) month term of the AQSIQ Gas Tank
Contract and the unexpired term of the Chinese contracts/projects listed
on Exhibit “5” attached hereto, which Sellers and their
Affiliates had
entered into or substantially developed prior to the Effective Date, unless
otherwise agreed between Sellers and Buyer (the “Revenue
Share Participation”).
3.1.1.1
The precise manner in which the payments set forth in this
Section
3.1.1 will be agreed upon the parties hereto after Closing in writing
provided that said payments shall be made to TPID US on at least a
semiannual basis and that said payments are in accordance with industry
standards.
3.1.2 The Immediate Infusion of
US$1.75 Million to Commence Rollout of the AQSIQ Gas Tank Contract. As
further consideration for the sale and transfer, in addition to the
consideration set forth in Section 3.1 above of this Agreement, at or
prior to Closing, Buyer shall invest
and/or remit One Million Seven Hundred and Fifty Thousand U.S. Dollars
(US$1,750,000.00) to immediately commence the initial roll-out and operations of
the AQSIQ Gas Tank
Contract, from which, TPID US shall be
entitled to the Revenue Share Participation as set forth in Section 3.1.1. above
of this Agreement.
3.1.3 Additional US$750,000
Payment. Buyer shall remit (a)
Five Hundred Thousand U.S. Dollars (US$500,000.00) to TPID US at or prior
to Closing,
which will be used to help pay for certain accounting, auditing, legal and other
expenses of the TPID
US and (b) as herein directed and confirmed by Sellers, Buyer shall remit Two
Hundred and Fifty Thousand U.S. Dollars (US$250,000) to TPID Beijing, at or
prior to Closing, which shall
be used to help pay for expenses relating to TPID
Beijing.
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3.1.4 License Back of IP to Seller
for Territories Outside Asia. Subject to the terms and conditions in the
parties’ licensing agreement, Buyer shall
exclusively license back the Subject Technology to
TPID US for
territories outside Asia as follows:
3.1.4.1 The United States.
For an initial term of five (5) years from the Closing Date, Buyer shall
exclusively license back on a royalty-free basis to TPID US for total
consideration of US$100 upon Closing, all rights
to the Subject
Technology for and ONLY for the United States.
3.1.4.2 All of Territories Outside
Asia Except the United States.
Buyer shall
exclusively license back to TPID US all rights to
the Subject
Technology for and ONLY for any and all territories outside Asia except
the United
States,
provided however that any agreement entered by TPID US to use the
Subject
Technology (e.g., license, joint venture, or other agreement) for any
territory outside Asia except for the United States (“Approved Territory”)
must be reviewed and approved by Buyer;
3.1.5 License
Royalty. TPID US shall pay
Buyer a royalty
in the amount of five percent (5%) of the NOPBT of TPID US generated
from business associated with the Subject Technology in
the Approved
Territory for the first 30 months from the month of first revenue
receipts and thereafter five percent (5%) of Gross Receipts of
TPID US for the
duration of the unexpired term of any and all of the license or joint venture or
other agreement or contract entered into with TPID US in the Approved
Territory (the “License Royalty”).
3.1.5.1 The
precise manner in which payments set forth in this Section 3.1.5 will be made
will be in accordance with the License Agreement to be
entered into by Buyer and TPID US substantially
in the form of Exhibit
6 upon Closing provided that
Buyer shall be
entitled to set off the required payments payable to TPID US by Buyer in Revenue Share
Participation set forth in Section 3.1.1 against the License Royalty
payable by TPID
US to Buyer.
3.2 Transfer
Taxes. Buyer shall be
responsible for and shall pay all sales taxes, documentary transfer taxes or
other transfer taxes assessed it as Buyer of the Purchased Assets.
Sellers shall
be responsible for and shall pay all sales taxes, documentary transfer taxes or
other transfer taxes assessed them as sellers of the Purchased
Assets.
CONDITIONS
PRECEDENT
4.1 Conditions
Precedent. The
obligation of Buyer to consummate
Closing is
subject to the fulfillment prior to or simultaneously at the Closing Date, of the
following conditions, any of which may be waived by Buyer:
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4.1.1 due
diligence investigations conducted by Buyer on the assets,
liabilities, business, financial and legal matters relating to the Purchased Assets
having been completed and the results being satisfactory to Buyer in its sole
discretion;
4.1.2 all
consents and approvals of, notices to and filings or registration with any Governmental Body or any other
person or shareholders required pursuant to any applicable law or regulation, or
pursuant to any contract binding on Sellers and its Affiliates, or the
Purchased
Assets are subject or bound, or the execution, delivery or performance of
this Agreement
or the consummation of the Transactions having
been obtained or effected;
4.1.3 no
investigation, action, suit or proceedings being pending or threatened before
any court or by any Governmental Body which seeks to
restrain, prohibit or otherwise challenge the sale of the Purchased Assets
pursuant to this Agreement;
4.1.4 the
parties to the AQSIQ
Gas Tank Contract, AQSIQ Gas Tank JV and
TPID Asian
Contracts (other
than Sellers and its Affiliates) having
given their respective consents to assignments or novations of the same in
favour of Buyer;
4.1.5 Buyer being satisfied
that the interest of the minority shareholders in Sellers and US
Securities laws are not violated in a manner as to represent an unacceptable
risk (at Buyer’s absolute
discretion) of adverse claims against Sellers
and Buyer and/or any
other party relating to the Transactions;
4.1.6 The
Securities Exchange Commission in the United States of America granting
approval/consent to the Transactions
contemplated hereunder (if required); and
4.1.7 Sellers’ providing the
necessary legal opinions associated with the Transactions
contemplated in this Agreement and dealing
with all requisitions in relation thereto to the satisfaction of Buyer.
4.2
Sellers shall use
their best endeavours to ensure the satisfaction of the conditions set out in
Section 4.1.
4.3
Buyer may, at any
time, waive in whole or in part any of the conditions set out in Section 4.1 by
written notice to Sellers.
4.4 In the
event that any of the conditions specified in Section 4.1 shall not have been
fulfilled (or waived pursuant Section 4.3 by Buyer) on or before
the Closing
Date, then Buyer shall not be
bound to proceed with the purchase of the Purchased Assets.
Without prejudice to the aforesaid, Buyer may also defer
Closing to a
date not more than 28 days after the Closing Date or
alternatively, proceed to Closing so far as is
practicable and recover from Sellers damages and
compensation arising out of and as a result of non-fulfillment of Section
4.1 and other antecedent breach of this Agreement.
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SECTION
5
CONDITIONS
TO CLOSING
5.1 Sellers undertake
with Buyer that
from the date hereof until the Closing Date they (a)
will carry on their business in the ordinary and normal course with a view to
maintaining the goodwill and trade and trade connections of their business and
(b) shall consult with Buyer in relation to
any matters which may have a material effect upon any of the Purchased Assets and
(c) shall pay, satisfy and discharge all the debts, liabilities and obligations
whatsoever incurred by the Sellers in connection
with the Purchased
Assets up to and including the Closing Date and (d)
shall at all times keep Buyer indemnified
from and against all such debts, liabilities and obligations.
5.2 Sellers shall not at
any time prior to Closing without the
prior written consent of Buyer (not to be
unreasonably withheld or delayed):
5.2.1 sell,
lease, assign or otherwise transfer or dispose of any of the Purchased Assets or
any interest therein or agree to do so; or
5.2.2 create
or agree to create any encumbrance on or over all or any of the Purchased Assets;
or
5.2.3 amend,
terminate or enter into or agree to amend, terminate or enter into any material
contract to which either of the Sellers is a party;
or
5.2.4 vary
or agree to vary the terms and conditions of service (including, without
limitation, the remuneration, bonuses, commissions and other benefits) of any
key employee employed for or in relation to the Purchased Assets;
or
5.2.5 initiate,
settle or agree to settle any legal proceedings in relation to the Purchased Assets save
for the collection of unpaid debts in the ordinary course of
business.
5.3
Sellers shall not and
shall procure that each Affiliate of Sellers shall not
take any action prior to Closing which would
or might reasonably be expected to make any of the warranties and
representations set forth in Section 7 misleading or inaccurate.
5.4
Sellers, shall, on
reasonable notice and during normal business hours, provide to or procure the
provision to Buyer and its
directors, officers, employees, agents and advisers of access to the Purchased
Assets.
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SECTION
6
CLOSING
(1) four (4) originals or
facsimiles (with originals to follow) of this Agreement and the
License Agreement duly
executed by Sellers;
(2) four (4) originals or
facsimiles (with originals to follow) of an Irrevocable ▇▇▇▇ of Sale duly
executed by Sellers substantially
in the form of Exhibit
7
attached hereto and incorporated herein by reference;
(3) four (4) originals or facsimiles
(with originals to follow) of an Assignment of Patent Rights duly executed by
TPID
US, TPID
Beijing, and Li Ning substantially in the form of Exhibit 8 attached hereto and
incorporated herein by reference, regarding all of Sellers’ and their
Affiliates’
(including TPID
Beijing’s) right, title and interest in the patented portions of the
Subject
Technology, in form and substance suitable for filing with, and
acceptance by, the U.S. Patent and Trademark Office and other Assignment(s) of
Patent Rights in such form and substance suitable for filing with all other
applicable patent and trademark offices of other jurisdictions;
(5) all
subsisting licenses certificates and permits in connection with the Purchased Assets and
all books, papers, records and other documents (including financial
records) relating to the Purchased Assets and
a list of customers, suppliers, employees, and other information and documents
in relation to the Purchased Assets as Buyer may
require;
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(6) all
technical information including all designs, drawings, plans, notes,
descriptions, materials, manuals, reports, operating and testing procedures,
application software, source codes, programming elements and software, graphics,
feasibilities, prototypes, operating conditions, images whether in paper
documents, electronic files, videos and DVDs or other format and all
publications, catalogues, brochures and other technical and sales matters
relating to the Subject Technology
and other like material relating thereto;
(7)
Certificate of Approval (批准证书) or
commensurate documentation issued to Buyer (including the
validly renewed business license (where applicable)) from the relevant PRC
authorities in form and substance satisfactory to Buyer for the
transfer of equity interest by Sellers in TPID
Beijing and AQSIQ Gas Tank JV (if
applicable) to Buyer under this
Agreement;
(8)
Written consent or approval by the parties to the AQSIQ Gas Tank
Contract, AQSIQ Gas Tank JV,
TPID Beijing
and TPID Asian
Contracts (other than
Sellers and
their Affiliates) to
assignments or novations of the same in favour of Buyer and such other
certificate(s) of approval as may be required by Buyer to vest in
Buyer the full benefit
of and legal title to the Purchased Assets and
all other rights and assets hereby agreed to be sold and the full benefit of
this Agreement;
(9) a
written confirmation by Sellers that they are
not aware of any matter or thing which is a breach of and inconsistent with any
of the warranties and representations set forth in Section 7;
(10) such
other documents as may be required to give to Buyer good title to
the Purchased
Assets and to enable Buyer or its nominees
to become the registered owner thereof;
(11) a
certified copy of the board of directors of Sellers approving the
sale of the Purchased
Assets on the terms of this Agreement and
authorizing the signatories to execute it for and on behalf of Sellers;
(12)
permit Buyer to
enter into the premises of Sellers and take
possession of the Purchased Assets;
and
(13) in
respect of TPID HK,
(a) duly
executed instruments of transfer and sold notes (in a form suitable for filing
with the Hong Kong Stamp Office) in respect of the transfer of shares
in TPID HK in
favour of Buyer
and/or its nominees together with the relative certificates for such
shares;
(b) its
statutory and minutes books (which shall be written up to but not including the
Closing Date),
share certificate books; common seal, certificate of incorporation, business
registration certificate, together with copies of the memorandum and articles of
association, cheque books, books of account (all complete and written up to
Closing),
copies of all tax return(s) filed and related correspondence (if any), all
current insurance policies, all contracts (if any) to which the TPID HK is a party
and all other documents and records of TPID HK.
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(c) the
Tax Deed substantially in the form of Exhibit 9 duly
executed by TPID
US;
(d) letters
of resignation duly executed by all of the directors and company secretary and
auditors resigning on Closing in each case
acknowledging that they have no outstanding claims whether for compensation for
loss of office or on any other grounds whatsoever; and
(e) a
certified copy of the minutes of the board meetings held to approve the transfer
of shares and the resignation and appointment of the directors, company
secretary and auditors.
6.2.3 Transfer
after Closing Date As soon as reasonably practicable and within
2 working days after the Closing Date, Sellers shall deliver
to Buyer
physical possession of all of the Purchased Assets
capable of passing by delivery and are not comprising in items under Section
6.2.1, with the intent that title to such Purchased Assets
shall pass to Buyer
by and on such delivery. It shall include, without limitation, TPID Asian Fixed
Assets and copies of books and records relating to TPID Asian Business,
binder of documents relating to the Subject Technology,
either in hard copy or such other format as Buyer may reasonably
require (the “Purchased Assets Physical
Transfer”). The Purchased Assets Physical
Transfer shall be effected by Sellers’ delivery of
the foregoing Purchased Assets at
Sellers’
reasonable cost and expense pursuant to written instructions as
to requested timing and delivery location (but not as to format) specified
by Buyer to
Sellers and
reasonably acceptable to Sellers; provided that such
obligations shall be subject to Buyer providing
reasonable cooperation to facilitate receipt of such deliveries. Notwithstanding
that title to the Purchased Assets
transfers to Buyer at the Time of Closing, risk of loss
with respect to the Purchased Assets
transfers to Buyer only at the
time of delivery (the “Time of Delivery”) to
Buyer of the
Purchased
Assets at the delivery location specified by Buyer in its written
instructions to Sellers, and any
failure by Sellers to deliver
the Purchased
Assets to Buyer in accordance
with such written instructions, to the extent such failure results in Losses (as
defined in Section 9.1) to Buyer, shall be
indemnifiable by Sellers to the extent
set forth in Section 9. Export duties and customs clearance with respect to
the transfer of the Purchased Assets
shall be the joint
responsibility of Sellers and Buyer. After the
Closing, Buyer shall be
responsible for all costs related to the recordation and perfection of the sale
and assignment of the Purchased Assets and Buyer shall bear all
costs and fees imposed by applicable laws and regulations and Governmental Bodies
related thereto and all postage costs related thereto.
Page 1 of
13
REPRESENTATIONS
AND WARRANTIES
Page 1 of
14
Page 1 of
15
(1)
Sellers and
their Affiliates are
the sole and exclusive owners of, and have the full right to sell, transfer, and
assign all of the Purchased Assets to
Buyer, and have
good and marketable title thereto and the Purchased Assets are
free and clear of any and all liens, pledges, restrictions or encumbrances.
Sellers are in
possession or control of all of the Purchased
Assets.
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(2) Following the Closing, Buyer will be
the sole and exclusive owner of, and have good and marketable title to,
the Purchased
Assets.
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7.2.6 Business
Contracts
(1) The
AQSIQ Gas Tank
Contract and all TPID Asian Contracts
are in full force and effect and have in all material respects been duly
complied with or validly waived by other contracting parties, and, so far as
Sellers are
aware, nothing has occurred whereby any of them is or could be subject to early
termination, or which has given or may give rise to any material claim under any
of them by any party to them. As the owners of the majority ownership
interest of TPID
Beijing and with their representatives controlling the board of directors
of TPID
Beijing, Sellers shall cause
TPID Beijing to
transfer all rights to any contract in Asia held by TPID Beijing related
to the Subject
Technology.
(2) Neither
Sellers nor, so
far as Sellers
are aware, any Affiliate of Sellers is a party to
any agreement, arrangement or practice which restricts its freedom to carry on
the AQSIQ Gas Tank
Contract and all TPID Asian Contracts
or use or exploit the Purchased Assets or
any of them in any part of the world.
(3) The
Purchased
Assets comprise all of the assets necessary to carry out and perform the
AQSIQ Gas Tank
Contract and all TPID Asian
Contracts.
(4) The
execution, delivery and performance of AQSIQ Gas Tank
Contract and all TPID Asian Contracts
do not (i) conflict with any provision of the corporate charter or by-laws
of Sellers and
any contracting parties thereto (ii) do not contravene, conflict with or result
in a violation of any law, regulation, order, judgment or decree to which any of
the contracting parties or any of its properties is subject, (iii) contravene,
conflict with or result in a violation or breach of, or result in a default
under, any provision of any written, oral, implied or other agreement, contract,
understanding or arrangement to which Sellers or any of
the contracting parties is subject.
Page 1 of
16
7.2.7 Business Name Sellers
have the exclusive right to use the Business Name (and its Chinese equivalent)
in the conduct of the business in Asia.
(1)
Sellers and their
Affiliates own
and hold all right, title and interest in the Subject Technology,
and have the exclusive right to use, sell, license, sublicense, or dispose of,
and have the exclusive right to bring action for the infringement,
misappropriation and other violations of, the Subject
Technology. As the owners of the majority ownership interest of
TPID Beijing
and with their representatives controlling the board of directors of TPID Beijing, Sellers shall cause
TPID Beijing to
transfer all rights to the Subject Technology
held by TPID
Beijing related to the Subject
Technology,
including in the form of an Assignment of Patent Rights duly executed by
TPID
US, TPID
Beijing, and Li Ning substantially in the form of Exhibit 8 attached
hereto.
(2)
All patented intellectual property rights and trademark including within
the Subject
Technology are valid and enforceable.
Page 1 of
17
7.2.13 Fixed Assets All
plant, machinery, equipment, vehicles, material assets comprised within the
Purchased
Assets are in good and safe condition and in working order (fair wear and
tear excepted) in all material respects and have been regularly and properly
maintained and without prejudice to the generality of the foregoing none of the
Sellers has
manufactured, sold or supplied any product which does not comply with all
applicable laws and regulations or which is defective or dangerous or not in
accordance with any representations, warranty or other term (express or implied)
given in respect of such products.
7.2.14 Accounts All
accounts, books, ledgers and financial records required by all applicable laws
to be maintained for and in connection with the Purchased Assets are
in the possession and the control of Sellers and have at
all times been properly kept and completed up to Closing Date. All
books of accounts give a true and fair view of the financial position in respect
of each of TPID Asian
Business, TPID
Beijing, TPID
HK or any of the Purchased Assets at
all material times and have been prepared in accordance with the generally
accepted accounting standards as applicable to Sellers and the
requirements of all applicable legislation. There is not any liability (actual
or potential) which is not or will not be shown or otherwise specifically
provided for in the Accounts.
7.2.15 Licenses and
Consents
(1) All
licenses, consents and other permissions and approvals required for or in
connection with the carrying on of the business now being carried on by Sellers:
(a) have
been granted or issued in favour of and are valid and in full force
and effect; and
(b) Sellers are not in
default and have not received notice that they are in default with respect to
the terms of or that any such license, consent, permission or approval is likely
to be revoked or which constitutes grounds for such revocation.
(2) All
foreign investment and other regulatory guidelines imposed on Sellers in any
jurisdiction have been complied with.
(3) Any
non-compliance by Sellers of any
foreign investment or other statutory or governmental guidelines has been
validly approved by the relevant authority.
7.3 Survival
of Representations and Warranties and Covenants. The
representations and warranties of each Party to this Agreement shall
survive (without limitation) (i) the Closing and the sale
of the Purchased
Assets to Buyer; (ii) any sale
or other disposition of any of the Purchased Assets by
Buyer; and
(iii) the dissolution of any Party to this Agreement. All
of the covenants, agreements and obligations of the Parties contained in this
Agreement shall
survive (i) until fully performed or fulfilled, unless non-compliance with such
covenants, agreements or obligations is waived in writing by the Party entitled to
such performance or (ii) if not fully performed or fulfilled, until the
expiration of the relevant statute of limitations.
Page 1 of
18
CONFIDENTIALITY
AND PUBLIC ANNOUNCEMENTS
Page 1 of
19
shall
have made a reasonable effort to obtain a protective order, or to cooperate with
the Owning
Party’s
efforts, as applicable, to obtain a protective order limiting the extent of such
disclosure and requiring that the Confidential
Information so disclosed be used only for the purposes for which such
order was issued or as required by such law or regulation; (c) to the extent and
to the Persons
required by rules of the National Association of Securities Dealers, and/or (d)
as necessary to prosecute or defend litigation, including without limitation,
litigation between the Parties, or otherwise establish rights or enforce
obligations pursuant to procedures, if any, described in this Agreement, but only
to the extent that any such disclosure is necessary for such purposes.
Notwithstanding the preceding sentence or Section 8.4, either Party shall be free
to disclose, without the other Party’s prior
consent, the existence of this Agreement, the
identity of the other Party and other
information relating to the Transactions that is
required to be disclosed under applicable securities laws and other applicable
laws or regulations of the United States or any securities exchange or NASDAQ.
Any Obligated
Party
(and any employee, representative, or other agent of any Obligated Party) may disclose
to any and all Persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all
materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure; provided however, that no
Obligated Party will be
permitted to disclose such tax treatment or tax structure to the extent that
such disclosure would constitute a violation of federal or state securities
laws. For the purposes of this Section 8.2, (a) the “tax treatment” of a
transaction means the purported or claimed federal income tax treatment of the
transaction, and (b) the “tax structure” of a
transaction means any fact that may be relevant to understanding the purported
or claimed federal income tax treatment of the transaction. Thus, for the
avoidance of doubt, the Obligated Parties
acknowledge and agree that the tax treatment and tax structure of any
transaction does not include the name of any Owning Party to a
transaction or any sensitive business information (including, without
limitation, the name and other specific information about any Owning Party’s intellectual
property or other proprietary assets) unless such information may be related or
relevant to the purported or claimed federal income tax treatment of the
transaction.
Page 1 of
20
INDEMNIFICATION;
HOLD HARMLESS COVENANT AND OTHER POST-CLOSING COVENANTS
9.1.1 liabilities
of Sellers or
its Affiliates
to the extent related to the Purchased Assets
other than the Assumed
Liabilities;
9.1.2 any
tax liability of Sellers or its Affiliates (other
than taxes for which Buyer is expressly
responsible pursuant to Section 3.2 of this Agreement);
9.1.3 any
breach by Sellers, any of its
Affiliates;
and
9.1.4 any
breach of any representation, warranty, covenant, agreement or obligation made
by Sellers
pursuant to this Agreement, provided that, in each case,
Sellers shall
not be obligated to indemnify any Buyer Indemnified Parties
with respect to, and to the extent of, any Claims or Losses for which
Buyer is
obligated to indemnify Sellers Indemnified Parties
pursuant to Section 9.2.
Page 1 of
21
9.2.1 any
of the Assumed
Liabilities;
9.2.2 any
breach of any representation, warranty, covenant, agreement or obligation made
by Buyer
pursuant to this Agreement,
and
9.2.3 any
tax liability of Buyer or its Affiliates (other
than taxes for which Sellers is expressly
responsible pursuant to Section 3.2 of this Agreement); provided that, in each case,
Buyer shall not
be obligated to indemnify any Sellers Indemnified Parties
with respect to, and to the extent of, any Claims or Losses for which
Sellers is
obligated to indemnify Buyer Indemnified
Parties pursuant to Section 9.1.
Page 1 of
22
settlement)
thereof, the indemnified Party shall have the
right to contest, settle or compromise the claim but shall not thereby waive any
right to indemnity therefor pursuant to this Agreement. The
indemnifying Party shall not,
except with the consent of the indemnified Party, enter into any
settlement that does not include as an unconditional term thereof the giving by
the Person or
Persons
asserting such claim to all indemnified Parties (i.e., Sellers Indemnified Parties
or Buyer Indemnified Parties,
as the case may be) an unconditional release from all liability with respect to
such claim.
SECTION
10
DISPUTE
RESOLUTION
Page 1 of
23
resolve
the dispute, the matter shall be escalated to the chief executive officer of
Buyer and that
of Sellers, for
resolution through good faith discussions. In the event that these officers of
Buyer and Sellers cannot
resolve the dispute within 28 days of being requested by a Party to resolve a
dispute, either Party shall be free,
after providing written notice to the other Party, to pursue any
and all legal and proper recourse or remedy at law or in equity.
SURVIVAL
MISCELLANEOUS
12.1.1 In
addition to any other obligations hereunder, each of the Parties hereto upon
the request of the other Party hereto, whether
before or after the Time of Closing and without
further consideration, shall do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged or delivered all such further acts, deeds,
documents, assignments, transfers, instruments, amendments, conveyances, powers
of attorney and assurances as may be reasonably necessary or desirable to effect
complete consummation of the Transactions
contemplated by this Agreement and to give
full and binding effect to the rights expressly granted herein Sellers and Buyer each agree to
execute and deliver such other documents, certificates, agreements, amendments,
instruments and other writings and to take such other actions as may be
reasonably necessary in order to consummate or implement expeditiously the Transactions
contemplated by this Agreement.
Page 1 of
24
12.1.2 Sellers agrees that,
upon reasonable request and without further compensation, but at no expense to
Sellers, Sellers and its legal
representatives, assigns and employees will do all lawful acts, including the
execution of papers and the giving of testimony, that may be necessary or
desirable for obtaining, sustaining, reissuing, or enforcing each of the patents
included in the Subject
Technology in the United States and throughout the world, and for
perfecting, recording, or maintaining the title of Buyer, and Buyer’s successors
and assigns, in and to each of the patents included in the Subject
Technology in the United States and throughout the world. In the
event that Buyer is unable for
any reason to secure any of the Sellers’s signatures
to any document that may be necessary or desirable for obtaining, sustaining,
reissuing, or enforcing each of the patents included in the Subject
Technology in the United States and throughout the world, or for
perfecting, recording, or maintaining the title of Buyer, and Buyer’s successors
and assigns, in and to each of the patents included in the Subject
Technology in the United States and throughout the world, Sellers hereby
irrevocably designates and appoints Buyer and Buyer’s duly
authorized officers and agents as Sellers’s agents and
attorneys-in-fact to act for and on Sellers’s behalf and
instead of Sellers to execute
such document, all with the same legal force and effect as if executed by Sellers. Such actions
shall include assisting in preparing and filing, and then assigning to Buyer, new patent
applications directed to currently unpatented intellectual rights comprised in
the Subject
Technology.
12.1.3 Sellers will do all
lawful acts, at (notwithstanding any provisions in this Agreement to the
contrary) Buyer’s sole cost and
expense, including the prosecution of patents comprised in the Subject Technology,
execution of papers, payment of fees, filing of responses, and the giving of
testimony, that may be reasonably necessary or desirable for obtaining,
sustaining, maintaining, reissuing, or enforcing each of the patents comprised
in the Subject
Technology in the United States and throughout the world, and for
perfecting, recording, or maintaining the title of Buyer, and Buyer’s successors
and assigns, in and to each of the patents comprised in the Subject
Technology in the United States and throughout the world. During
such time Sellers will also
promptly and timely inform Buyer of any such
needed actions and provide copies of communications from and to patent offices
throughout the world.
12.1.4 Notwithstanding
anything to the contrary in Section 12.1.2 and Section 12.1.3, the Parties acknowledge
that Buyer is
primarily responsible for the obligations set forth in Sections 12.1.2 and
Section 12.1.3.
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To:
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16▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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Attn:
CEO or President
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Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
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To:
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True
Product Id Technology Limited
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Suite
1005, Allied Kajima Bu▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇
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Attn:
CEO or President
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Any
notice, direction or other instrument required or permitted to be given to Buyer hereunder shall
be in writing and sent via registered or certified mail, return receipt
requested, or overnight courier, or by delivering the same by fax with the
original sent by one of the foregoing manners, addressed as
follows:
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To:
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Saddington
Limited
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BVI
1499542. P.O. 957
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Offshore
Incorporations Centre
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Road
Town
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Tortola
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British
Virgin Islands
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Copy
to:
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▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Esquire
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ROBERTSONS
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57th
Floor, The Center
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99
▇▇▇▇▇’▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
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Fax:
(▇▇▇) ▇▇▇▇ ▇▇▇▇
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Any
such notice, direction or other instrument, if delivered, shall be deemed to
have been given on the date on which it was delivered and if transmitted by fax
shall be deemed to have been given at the opening of business in the office of
the addressee on the business day next following the transmission thereof, provided that proof of
successful transmission is provided to the intended recipient on request by the
intended recipient. Any Party hereto may
change its address for service from time to time by notice given to the other
Parties hereto
in accordance with the foregoing.
Page 1 of
26
12.4 Applicable
Law. This Agreement shall be
construed and enforced in accordance with, and the rights of the Parties hereto shall
be governed by, the laws of the State of Delaware, without reference to
conflicts of law principles.
Page 1 of
27
12.10.1 In
the event any portion of this Agreement is or is
held by any court or tribunal of competent jurisdiction to be illegal, void or
ineffective, the remaining provisions hereof shall remain in full force and
effect.
12.10.2 If
any of the terms or provisions of this Agreement are in
conflict with any applicable statute or rule of law, then such terms or
provisions shall be deemed inoperative to the extent that they may conflict
therewith and shall be deemed to be modified to the minimum extent necessary to
procure conformity with such statute or rule of law.
Page 1 of
28
12.11.1 Any
legal action or other legal proceeding relating to this Agreement or the
enforcement of this Agreement may be
brought or otherwise commenced in any state or federal court located in the
State of Delaware. Each Party:
(1) expressly
and irrevocably consents and submits to the jurisdiction of each state and
federal court located in the State of Delaware (and each appellate court located
in the State of Delaware), in connection with any such legal
proceeding;
(2) agrees
that service of any process, summons, notice or document by certified or
registered mail addressed to such Party at the address
set forth in Section 12.2 shall constitute effective service of such process,
summons, notice or document for purposes of any such legal
proceeding;
(3) agrees
that each state and federal court located in the State of Delaware, shall be
deemed to be a convenient forum; and
(4) agrees
not to assert (by way of motion, as a defense or otherwise), in any such legal
proceeding commenced in any state or federal court located in the State of
Delaware, any claim by such Party that it is not
subject personally to the jurisdiction of such court, that such legal proceeding
has been brought in an inconvenient forum, that the venue of such proceeding is
improper or that this Agreement or the
subject matter of this Agreement may not be
enforced in or by such court.
[Signature
Page Follows]
Page 1 of
29
IN WITNESS WHEREOF, and
intending to be legally bound hereby, this Asset Sale Agreement has been duly
executed by the authorized representatives of the Parties hereto as of the date
first above written.
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CORPORATE
SEAL:
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SADDINGTON
LIMITED
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By:
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Name:
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Title: Authorised
Signatory
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CORPORATE
SEAL:
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TRUE
PRODUCT ID, INC. on its own behalf and on behalf of its Affiliates,
including TRUE PRODUCT ID TECHNOLOGY (BEIJING) LIMITED
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By:
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Name:
Ke ▇▇ ▇▇▇▇
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Title: President
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COMPANY
SEAL:
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TRUE PRODUCT
ID TECHNOLOGY LIMITED
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By:
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Name:
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Title: Authorised
Signatory
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Page 1 of
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EXHIBIT
“1”
TO
Between
SADDINGTON
LIMITED
And
And
TRUE
PRODUCT ID TECHNOLOGY LIMITED
EXHIBIT
1
TO
TPID-SADDINGTON
ASSET SALE AGREEMENT
SCHEDULE OF SUBJECT
TECHNOLOGY
The term
“Subject Technology,” as used in this Agreement, shall include any and all
technology, know-how, proprietary information, trade secrets and intellectual
property which is licensed to and/or is developed, possessed, used, and/or owned
by and for SELLERS related to anti-counterfeiting, product authentication,
product safety monitoring, supply chain tracking and management, and any and all
applications and improvements, enhancements, or modifications related thereto,
including, but not limited to, taggant, scanners, marking equipment, hardware,
software, other components, algorithms, software, systems, procedures,
protocols, processes, and other technologies, as described in, inter alia, (a) SELLERS’
prior filings and submissions with any regulatory authority; and (b) SELLERS’
prior patent, trademark, copyright, and/or other intellectual property filings
and submissions. Included, without limitation, within the scope of the term
“Subject Technology” are the technologies and all applications and aspects
related thereto known or referred to as Synthetic DNA or SDNA; KMACK; and
any and all technologies related to TPID’s projects in China and other parts of
Asia, including, but not limited to, the project with AQSIQ.
The term,
“Subject Technology,” as used in this Agreement, shall include all trademarks,
patents, marks and logos (whether registered or not) held or applied by Sellers
(individually and/or collectively).
For the
purpose of this Schedule only, Sellers shall mean TPID US, TPID HK and their
Affiliates, including TPID Beijing.
The term
“Subject Technology” shall include all technology arising from the following
patents, patent application, and national phase
applications/documents:
PATENTS
(1) PCT
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(WO/2007/014532) METHOD OF
LABELLING AND DETECTIION OF GOODS AND DEVICE THEREOFPub.
No.:
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WO/2007/014532
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International
Application No.:
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PCT/CN2006/001946
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Publication
Date:
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08.02.2007
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International
Filing Date:
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02.08.2006
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Chapter 2 Demand
Filed: 02.03.2007
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||||||
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(WO/2007/014532) METHOD OF
LABELLING AND DETECTIION OF GOODS AND DEVICE THEREOFPub.
No.:
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WO/2007/014532
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International
Application No.:
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PCT/CN2006/001946
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Publication
Date:
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08.02.2007
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International
Filing Date:
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02.08.2006
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Chapter 2 Demand
Filed: 02.03.2007
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||||||
IPC:
G06K 19/00
(2006.01), B07C 5/34
(2006.01)
Applicants:
TRUE PRODUCT ID TECHNOLOGY (BEIJING)
LIMITED [CN/CN]; 18th Floor West Zone, Pacific International Plaza, No.
106, Zhichun Road, Haidian District, Beijing 100086 (CN) (All Except US).
▇▇, ▇▇▇▇ [CN/CN]; 18th Floor
West Zone, Pacific International Plaza, No. 106, Zhichun Road, Haidian District,
Beijing 100086 (CN) (US
Only).
Inventor:
▇▇, ▇▇▇▇; 18▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇nternational Plaza, No. 106, Zhichun Road, Haidian District,
Beijing 100086 (CN).
Agent:
CCPIT PATENT AND TRADEMARK LAW
OFFICE; 8th Floor, Vantone New World Plaza, 2 Fuchengmenwai Street,
Beijing 100037 (CN).
Priority Data:
200510089020.1 03.08.2005
CN
|
200510089020.1
|
03.08.2005
|
CN
|
|
Title:
|
METHOD
OF LABELLING AND DETECTIION OF GOODS AND DEVICE THEREOF
|
|
Abstract:
|
 The
present invention provides a method of labeling, detecting and managing
the goods and device thereof. The method of present invention includes the
step of defining the label of goods, the label comprises at least one
chemical element in the chemical element inhering in the goods and/or
additional chemical element; the step of providing the database which
contains the labeled data; the step of detecting the signal sent by goods,
generating the detection data and comparing it with data in the database;
the step of determining whether the good to be detected is the labeled
good or not according to the comparing result, and reading at least one
message of the good in the database. The goods labeling and detecting
solution of the present invention can used in many fields of society
economic and administrative management, such as identification, goods
label, preventing the goods replaced with others, physical distribution
management, statistic analysis and so on.
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Designated
States:
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AE,
AG, AL, AM, AT, AU, AZ, BA, BB, BG, BR, BW, BY, BZ, CA, CH, CN, CO, CR,
CU, CZ, DE, DK, DM, DZ, EC, EE, EG, ES, FI, GB, GD, GE, GH, GM, HN, HR,
HU, ID, IL, IN, IS, JP, KE, KG, KM, KN, KP, KR, KZ, LA, LC, LK, LR, LS,
LT, LU, LV, LY, MA, MD, MG, MK, MN, MW, MX, MZ, NA, NG, NI, NO, NZ, OM,
PG, PH, PL, PT, RO, RS, RU, SC, SD, SE, SG, SK, SL, SM, SY, TJ, TM, TN,
TR, TT, TZ, UA, UG, US, UZ, VC, VN, ZA, ZM, ZW.
African
Regional Intellectual Property Org. (ARIPO) (BW, GH, GM, KE, LS, MW, MZ,
NA, SD, SL, SZ, TZ, UG, ZM, ZW)
Eurasian
Patent Organization (EAPO) (AM, AZ, BY, KG, KZ, MD, RU, TJ,
TM)
European
Patent Office (EPO) (AT, BE, BG, CH, CY, CZ, DE, DK, EE, ES, FI, FR, GB,
GR, HU, IE, IS, IT, LT, LU, LV, MC, NL, PL, PT, RO, SE, SI, SK,
TR)
African
Intellectual Property Organization (OAPI) (BF, BJ, CF, CG, CI, CM, GA, GN,
GQ, GW, ML, MR, NE, SN, TD, TG).
|
|
Publication
Language:
|
Chinese
(ZH)
|
|
Filing
Language:
|
Chinese
(ZH)
|
The
Company subsequently requested the commencement of national phase examinations
of its PCT application for the United States, South Korea, Japan, Mexico, India,
Brazil, Indonesia, Canada, the Philippines, and the European Patent
Office.
(2) Chinese
Patents/Patent Applications:
|
|
Title:
“Method and Apparatus Using Chemical Elemental Taggant and the Chemical
Elemental Taggant.”
|
Number:
200510089020.1
Filing Date: 02 August
2005
EXHIBIT
“2”
TO
Between
SADDINGTON
LIMITED
And
And
TRUE
PRODUCT ID TECHNOLOGY LIMITED
EXHIBIT
2
TO
TPID-SADDINGTON
ASSET SALE AGREEMENT
SCHEDULE OF ASIAN
CONTRACTS
The term,
“Asian
Contracts,” shall include any and all agreements, contracts, and/or
projects in the People’s Republic of China, Hong Kong, Macau, and other parts of
Asia arising from the Subject Technology,
which were entered into by any of the Sellers and their
Affiliates,
including TPID Beijing
The term,
“Asian
Contracts,” shall include any and all agreements, contracts, and/or
projects related to the Subject Technology,
which any of the Sellers and/or their
Affiliates entered
with the State General Administration for Quality Supervision, Inspection and
Quarantine of the People’s Republic of China, including, but not limited to, any
and all agreements, contracts, and/or projects related to the Subject Technology
which were referenced in the June 2, 2007 AQSIQ Circular of the Implementation
of “the Standard of the National Special Equipment Security Identification and
the Establishment of Information Management System of National Special Equipment
Around the Country,” the June 2007 “The Standards of Special Equipment Safety
Logo” The Project Cooperation Agreement, Contract Number 0076180, and the
“National Security Special Equipment Identification Standards Project
Cooperation Agreement Supplementary Provisions.”
The term,
“Asian
Contracts,” shall also include the contracts entered with any of the
Sellers and
their Affiliates including
TPID Beijing and:
|
|
a.
|
China
Federation of Industry and Commerce Auto & Motorbike Parts articles
for use Chamber of Commerce;
|
|
|
b.
|
Beijing
Chinese Painting & Calligraphy Collector Association;
and
|
|
|
c.
|
▇▇▇▇▇▇
(Xinyang) Pharmaceuticals Co., Ltd.
|
EXHIBIT
“3”
TO
Between
SADDINGTON
LIMITED
And
And
TRUE
PRODUCT ID TECHNOLOGY LIMITED
EXHIBIT
3
TO
TPID-SADDINGTON
ASSET SALE AGREEMENT
SCHEDULE OF ASIAN FIXED
ASSETS
The term
“Asian Fixed
Assets,” as used in this Agreement, shall
include any and all fixed assets owned or held by any of the Sellers in
Asia.
TPID does not have
any fixed assets in Asia, other than its ownership interest in TPID HK and TPID Beijing and in
any intellectual property of TPID Beijing, both of
which are disclosed in the Agreement and which
are to be sold and transferred to Buyer under this
Agreement.
To the
extent applicable, “Asian Fixed Assets” shall also include the rights to the
Subject
Technology owned by Seller and their Affiliates, including
TPID
Beijing.
The term
“Subject Technology” shall include all technology arising from the following
patents, patent application, and national phase
applications/documents:
PATENTS
(1) PCT
|
(WO/2007/014532) METHOD OF
LABELLING AND DETECTIION OF GOODS AND DEVICE THEREOFPub.
No.:
|
|
WO/2007/014532
|
|
International
Application No.:
|
|
PCT/CN2006/001946
|
|
Publication
Date:
|
08.02.2007
|
International
Filing Date:
|
02.08.2006
|
|||
|
Chapter 2 Demand
Filed: 02.03.2007
|
||||||
|
(WO/2007/014532) METHOD OF
LABELLING AND DETECTIION OF GOODS AND DEVICE THEREOFPub.
No.:
|
|
WO/2007/014532
|
|
International
Application No.:
|
|
PCT/CN2006/001946
|
|
Publication
Date:
|
08.02.2007
|
International
Filing Date:
|
02.08.2006
|
|||
|
Chapter 2 Demand
Filed: 02.03.2007
|
||||||
IPC:
G06K 19/00
(2006.01), B07C 5/34
(2006.01)
Applicants:
TRUE PRODUCT ID TECHNOLOGY (BEIJING)
LIMITED [CN/CN]; 18th Floor West Zone, Pacific International Plaza, No.
106, Zhichun Road, Haidian District, Beijing 100086 (CN) (All Except US).
▇▇, ▇▇▇▇ [CN/CN]; 18th Floor
West Zone, Pacific International Plaza, No. 106, Zhichun Road, Haidian District,
Beijing 100086 (CN) (US
Only).
Inventor:
▇▇, ▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ International Plaza, No. 106, Zhichun Road, Haidian District,
Beijing 100086 (CN).
Agent:
CCPIT PATENT AND TRADEMARK LAW
OFFICE; 8th Floor, Vantone New World Plaza, 2 Fuchengmenwai Street,
Beijing 100037 (CN).
Priority Data:
200510089020.1
03.08.2005 CN
|
200510089020.1
|
03.08.2005
|
CN
|
|
Title:
|
METHOD
OF LABELLING AND DETECTIION OF GOODS AND DEVICE THEREOF
|
|
Abstract:
|
The
present invention provides a method of labeling, detecting and managing
the goods and device thereof. The method of present invention includes the
step of defining the label of goods, the label comprises at least one
chemical element in the chemical element inhering in the goods and/or
additional chemical element; the step of providing the database which
contains the labeled data; the step of detecting the signal sent by goods,
generating the detection data and comparing it with data in the database;
the step of determining whether the good to be detected is the
labeled good or not according to the comparing result, and reading at
least one message of the good in the database. The goods labeling and
detecting solution of the present invention can used in many fields of
society economic and administrative management, such as identification,
goods label, preventing the goods replaced with others, physical
distribution management, statistic analysis and so on.
|
|
Designated
States:
|
AE,
AG, AL, AM, AT, AU, AZ, BA, BB, BG, BR, BW, BY, BZ, CA, CH, CN, CO, CR,
CU, CZ, DE, DK, DM, DZ, EC, EE, EG, ES, FI, GB, GD, GE, GH, GM, HN, HR,
HU, ID, IL, IN, IS, JP, KE, KG, KM, KN, KP, KR, KZ, LA, LC, LK, LR, LS,
LT, LU, LV, LY, MA, MD, MG, MK, MN, MW, MX, MZ, NA, NG, NI, NO, NZ, OM,
PG, PH, PL, PT, RO, RS, RU, SC, SD, SE, SG, SK, SL, SM, SY, TJ, TM, TN,
TR, TT, TZ, UA, UG, US, UZ, VC, VN, ZA, ZM, ZW.
African
Regional Intellectual Property Org. (ARIPO) (BW, GH, GM, KE, LS, MW, MZ,
NA, SD, SL, SZ, TZ, UG, ZM, ZW)
Eurasian
Patent Organization (EAPO) (AM, AZ, BY, KG, KZ, MD, RU, TJ,
TM)
European
Patent Office (EPO) (AT, BE, BG, CH, CY, CZ, DE, DK, EE, ES, FI, FR, GB,
GR, HU, IE, IS, IT, LT, LU, LV, MC, NL, PL, PT, RO, SE, SI, SK,
TR)
African
Intellectual Property Organization (OAPI) (BF, BJ, CF, CG, CI, CM,
GA, GN, GQ, GW, ML, MR, NE, SN, TD,
TG).
|
|
Publication
Language:
|
Chinese
(ZH)
|
|
Filing
Language:
|
Chinese
(ZH)
|
The
Company subsequently requested the commencement of national phase examinations
of its PCT application for the United States, South Korea, Japan, Mexico, India,
Brazil, Indonesia, Canada, the Philippines, and the European Patent
Office.
(2) Chinese
Patents/Patent Applications:
|
|
Title:
“Method and Apparatus Using Chemical Elemental Taggant and the Chemical
Elemental Taggant.”
|
Number:
200510089020.1
Filing Date: 02 August
2005
EXHIBIT
“4”
TO
ASSET
SALE AGREEMENT
Between
SADDINGTON
LIMITED
And
And
TRUE
PRODUCT ID TECHNOLOGY LIMITED
EXHIBIT
4
TO
TPID-SADDINGTON
ASSET SALE AGREEMENT
SCHEDULE OF COUNTRIES IN
ASIA
The term
“Asia,” as used
in this Agreement, shall
mean:
· The
People’s Republic of China, including Hong Kong SAR, Macau SAR, and
Tibet;
· Japan
· North
Korea
· South
Korea
· Mongolia
· Taiwan
· India
· Bhutan
· Bangladesh
· Nepal
· Pakistan
· Sri
Lanka
· Afghanistan
· Cambodia
· Indonesia
· Lao
PDR
· Malaysia
· Myanmar
(Burma)
· Philippines
· Singapore
· Thailand
· Timor-Leste
· Vietnam
EXHIBIT
“5”
TO
ASSET
SALE AGREEMENT
Between
SADDINGTON
LIMITED
And
And
TRUE
PRODUCT ID TECHNOLOGY LIMITED
EXHIBIT
5
TO
TPID-SADDINGTON
ASSET SALE AGREEMENT
SCHEDULE OF ASIAN CONTRACTS
SUBJECT TO NOPBT
The
“Asian
Contracts” for which Buyer shall provide a
Revenue Share
Participation to TPID pursuant to the
Agreement shall
include:
|
·
|
any
and all agreements, contracts, and/or projects, which any of the Sellers and
their Affiliates
including TPID
Beijing, entered with the State General Administration for Quality
Supervision, Inspection and Quarantine of the People’s Republic of China,
including, but not limited to, any and all agreements, contracts, and/or
projects which were referenced in the June 2, 2007 AQSIQ Circular of the
Implementation of “the Standard of the National Special Equipment Security
Identification and the Establishment of Information Management System of
National Special Equipment Around the Country,” the June 2007 “The
Standards of Special Equipment Safety Logo” The Project Cooperation
Agreement, Contract Number 0076180, and the “National Security Special
Equipment Identification Standards Project Cooperation Agreement
Supplementary Provisions;”
|
|
·
|
The
contract entered into by any of the Sellers and
their Affiliates
including TPID
Beijing, with China Federation of Industry and Commerce Auto &
Motorbike Parts articles for use Chamber of
Commerce;
|
|
·
|
The
contract entered into by any of the Sellers and
their Affiliates
including TPID
Beijing with Beijing Chinese Painting & Calligraphy Collector
Association; and
|
|
·
|
The
contract entered into by any of the Sellers and
their Affiliates
including TPID
Beijing with ▇▇▇▇▇▇ (Xinyang) Pharmaceuticals Co.,
Ltd.
|
EXHIBIT
“6”
TO
ASSET
SALE AGREEMENT
Between
SADDINGTON
LIMITED
And
And
TRUE
PRODUCT ID TECHNOLOGY LIMITED
LICENSE
AGREEMENT
THIS LICENSE AGREEMENT
(“Agreement”) is entered into this 3rd day of
November 2008 (the "Effective Date") by and between: (1) SADDINGTON LIMITED , a limited
liability company duly formed and organized in the British Virgin Islands, with
a registered office at BVI 1499542, P.O. 957, Offshore Incorporations Centre,
Road Town, Tortola, British Virgin Islands and its nominees, delegees, and/or
assigns (collectively “LICENSOR”); and (2) TRUE PRODUCT ID, INC., a
Delaware, US corporation, with offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and/or its nominees, delegees, and/or assigns
(collectively “LICENSEE”).
(LICENSOR
and LICENSEE are hereinafter collectively referred to as the “Parties” and
individually referred to as a “Party.”)
W
I T N E S S E T H:
WHEREAS, LICENSOR is the sole
owner and holder of all intellectual property, proprietary rights and know-how,
and all other rights and interests related to and associated with the Patented
and Unpatented Licensed Technology (as those terms are defined below in Section
1 of this Agreement);
WHEREAS, LICENSOR is the sole
owner and holder of the Exclusive Distribution, Development, Manufacturing,
Regulatory and R&D Rights (as those terms are defined below in Section 1 of
this Agreement) related to and associated with the Patented and Unpatented
Licensed Technology;
WHEREAS, to the best of its
information, knowledge and belief, LICENSOR has the power, right, and authority
to grant to LICENSEE an exclusive (even to LICENSOR), sublicensable,
royalty-bearing license to make, have made, use, import, offer for sale, and
sell the Licensed Product (as defined below in Section 1 of this Agreement) and
to grant to LICENSEE the Exclusive Distribution, Development, Manufacturing,
Regulatory and R&D Rights in the Exclusive Territory (as defined in Section
1 of this Agreement);
WHEREAS, LICENSEE wishes
to make all commercially reasonable efforts to: (a) make, have made, use,
import, offer for sale, and sell the Licensed Product in the Territory (as
defined in Section 1 below of this Agreement); and (b) exercise the Exclusive
Distribution, Development, Manufacturing, Regulatory and R&D Rights in the
Exclusive Territory;
WHEREAS, LICENSEE has
strategic government, industry, technology, distribution, marketing, research
& development, design/engineering, manufacturing and other relationships and
contacts throughout the Territory which could assist in the marketing,
distribution, design, engineering, manufacturing, regulatory approval,
development, research and development, and other commercialization or
utilization of the Patented and Unpatented Licensed Technology;
WHEREAS, LICENSEE desires to
obtain from LICENSOR an exclusive (even as to LICENSOR), sublicensable license
with regard to the Patented and Unpatented Licensed Technology in the Exclusive
Territory;
WHEREAS, LICENSEE and LICENSOR
are in agreement with respect to the terms and conditions upon which LICENSOR
shall grant LICENSEE an exclusive license for the Territory with regard to the
Patented and Unpatented Licensed Technology and shall grant LICENSEE the
Exclusive Distribution, Manufacturing, Development, Regulatory, and R&D
Rights for the Exclusive Territory;
NOW, THEREFORE, in
consideration of the promises and agreements set forth herein, the sufficiency
of which is mutually and explicitly acknowledged by the Parties, the Parties,
each intending to be legally bound hereby, do promise and agree as
follows.
1. DEFINITIONS. As used in this
Agreement, the following terms shall have the following respective
meanings:
1.1. “Affiliate”
means any corporation, company, partnership, joint venture and/or firm which
controls, is controlled by, or is under common control of either Party. For
purposes of this definition, control shall mean direct or indirect ownership of
more than fifty percent (50%) of the stock or participating shares entitled to
vote for the election of directors (but only as long as such ownership
exists).
1.2. “TPID
Technology” is defined in Exhibit C to this Agreement.
1.3. “Confidential
Information” shall mean any confidential or proprietary information of a Party
including, without limitation, all specifications, know-how, inventions, trade
secrets, technical information, drawings, software, prototypes, models,
inventions, discoveries, assays, methods, procedures, formulae, protocols,
techniques, data, and unpublished patent applications, customer lists, business
plans, operational methods, pricing policies, marketing plans, sales plans,
identity of suppliers or customers, sales, profits or other financial and
business information, whether disclosed in oral, written, graphic, or other
electronic form. All information exchanged between the Parties in connection
with this Agreement as well as this Agreement itself shall be deemed
Confidential Information under this Agreement.
1.4. “Effective
Date” shall have the meaning ascribed to such term in the opening paragraph
of this Agreement.
1.5. “Exclusive
Development Rights” shall mean any and all rights, on an exclusive basis and
with the right to sublicense, to design, redesign, engineer, reengineer, and/or
otherwise develop (technically, clinically, and otherwise) the Licensed Product
in the Exclusive Territory.
1.6. “Exclusive
Distribution Rights” shall mean any and all rights, on an exclusive basis and
with the right to sublicense, to market, distribute, advertise, sell, have sold,
import, commercialize, and/or otherwise utilize the Licensed Product in the
Exclusive Territory.
1.7. “Exclusive
Manufacturing Rights” shall mean any and all rights, on an exclusive basis and
with the right to sublicense, to make, have made, and manufacture the Licensed
Product in the Exclusive Territory.
1.8. “Exclusive
Territory” shall mean the territories and countries designated as exclusive
as set forth in Exhibit B to this Agreement.
1.9. “Exclusive
Regulatory Rights” shall mean any and all rights, on an exclusive basis and with
the right to sublicense, to seek, handle, coordinate, manage, administer and
secure regulatory approval (technically, clinically, and otherwise) with respect
to the Licensed Product in the Exclusive Territory.
1.10. “Exclusive
R&D Rights” shall mean any and all rights, on an exclusive basis and with
the right to sublicense, to conduct research and development (technically,
clinically, and otherwise) with respect to the Licensed Product in the Exclusive
Territory.
1.11. “Gross
Receipts” shall mean the total amount of funds actually received and collected
by LICENSEE from sales, lease or other commercialization or distribution or use
of the Licensed Product, including, but not limited to, (x) cash, money orders
and cleared checks less charges imposed by banks for clearing, deposits,
redeposits or returns and (y) cleared credit card charges less the bank discount
rate; less the following amounts actually paid by LICENSEE, its affiliates,
licensees, distributors and manufacturers: i.) discounts allowed; ii.) returns;
iii.) transportation charges or allowances; iv.) packing and transportation
packing material costs; v.) customs and duties charges; and vi.)
sales, transfer and other excise taxes or other governmental charges (including
any tax or government charge, duty or assessment or any tax such as a value
added or similar tax or government charge) levied on or measured by the sales
but no franchise or income tax of any kind whatsoever. The term “Gross Receipts”
shall also include funds actually received and collected by LICENSEE from any
sublicensee of LICENSEE in connection with the TPID Technology and Patented and
Unpatented Licensed Technology, including, but not limited to, any licensing
fees received by LICENSEE from sublicensees of LICENSEE regarding the TPID
Technology and the Patented and Unpatented Licensed Technology. The
term “Gross Receipts” shall also include funds actually received and collected
by LICENSEE from or as a result of any settlement, judicial, mediation or
arbitration proceedings, or litigation arising from an alleged infringement by a
third party of the Patented or Unpatented Licensed Technology. To the
extent possible, the term “Gross Receipts” shall be interpreted in according
with U.S. GAAP principles. Revenue received from foreign sources
shall be at its value in U.S. dollars when received.
1.12. “Improvements”
means all additions, developments, modifications, enhancements and adaptations
(i) which directly relate to or are used in connection with the Patented and
Unpatented Licensed Technology, and (ii) which are conceived or reduced to
practice prior to or during the Term.
1.13 “Licensed Product” means any and all
taggants, scanners, marking equipments, devices, sensors, hardware, software,
and other products, components or services incorporating the Patented and
Unpatented Licensed Technology and Improvements.
1.14. "NOPBT"
means Net Operating Profit Before Tax and shall mean the total amount of
operating revenues of LICENSEE less the operating expenses including costs
of goods or technology supplied and share costs of distribution and selling and
administrative expenses and headquarters expenses of LICENSEE and prior to
applying taxes, as adjusted for interest expense on the present value of
operating leases but excluding interest expense or income on debt and cash. To
the extent possible, the term “NOPBT” shall be interpreted in accordance with
U.S. GAAP principles. Revenue received from foreign sources shall be at its
value in U.S. dollars when received.
1.15. “Patented
Licensed Technology” means any and all technologies, including, but not limited
to, devices, sensors, other components, algorithms, software, systems,
procedures, protocols, processes, information, data, methods of use, techniques,
ideas, inventions and other technologies, which is governed by the
Patents. To the extent that the Patent for certain Patented Licensed
Technology expires, lapses, and/or is otherwise terminated or rendered invalid,
such Patented Licensed Technology shall be automatically and immediately deemed
Unpatented Licensed Technology for the balance of the Term for the Unpatented
Licensed Technology, provided that this Agreement is still in effect and has not
been properly terminated.
1.16. “Patents”
means the patent applications and patents listed in Exhibit A hereto and
any and all other patent applications and patents and amendments thereto,
including foreign equivalents, and any and all substitutions, extensions,
additions, reissues,
re-examinations, renewals,
divisions, continuations, continuations-in-part or supplementary protection
certificates owned by or licensed to LICENSOR prior to and during the Term
relating to the TPID Technology or any Improvements.
1.17. “Regulatory
Approval” means all governmental approvals and authorizations necessary for
the manufacture and commercial sale of the Licensed Product and other devices,
sensors, and/or other components or services incorporating the Patented and
Unpatented Licensed Technology in a country of the Territory, including, but not
limited to, marketing authorization, pricing approval and pricing
reimbursement, as applicable.
1.18. “Term”
means the term set forth in Exhibit B to this Agreement.
1.19. “Term
for the Patented Licensed Technology” means the life or duration of each
applicable Patent, as renewed, reinstituted, and/or otherwise
extended.
1.20. “Term
for the Unpatented Licensed Technology” means the Term as defined in subsection
1.18 above and Exhibit B to this Agreement.
1.21. “Territory”
means the Exclusive Territory.
1.22. “Unpatented
Licensed Technology” is defined in Exhibit C to this Agreement and shall also
means any and all components of the TPID Technology other than the Patented
Licensed Technology, including, but not limited to, devices, sensors, other
components, algorithms, software, systems, procedures, protocols, processes,
information, data, methods of use, techniques, ideas, inventions, trade secrets
and any other technical information or proprietary technologies relating to
the development, use or sale of any device, sensor or other product, service, or
manifestation of the TPID Technology, provided that LICENSOR has the right
to license and/or sublicense to Licensee. To the extent that the
Patent for certain Patented Licensed Technology expires, lapses, and/or is
otherwise terminated or rendered invalid, such Patented Licensed Technology
shall be automatically and immediately deemed Unpatented Licensed Technology for
the balance of the Term for the Unpatented Licensed Technology, provided that
this Agreement is still in effect and has not been properly
terminated.
2. EXCLUSIVE SUBLICENSABLE,
ROYALTY-BEARING LICENSE GRANT.
2.1. Exclusive Sublicensable,
Royalty-Bearing License Grant for Patented Licensed
Technology. Subject to the provisions of this Agreement,
LICENSOR hereby grants to LICENSEE for the Term for the Patented Licensed
Technology the exclusive (even as to LICENSOR), sublicensable, royalty-bearing
right and license to make, have made, use, import, offer for sale, and sell the
Licensed Product incorporating the Patented Licensed Technology and Improvements
in the Exclusive Territory, provided however that any agreement entered by
LICENSEE to use the Patented and Unpatented Technology and its Improvements
(e.g., license, joint venture, or other agreement) for any territory outside
Asia except for the United States must be reviewed and approved by
LICENSOR.
2.2. Exclusive Sublicensable,
Royalty-Bearing License Grant for Unpatented Licensed
Technology. Subject to the provisions of this Agreement,
LICENSOR hereby grants to LICENSEE for the Term for the Unpatented Licensed
Technology the exclusive (even as to LICENSOR), sublicensable, royalty-bearing
right and license to make, have made, use, import, offer for sale, and sell the
Licensed Product incorporating the Unpatented Licensed Technology in the
Exclusive Territory, provided however that any agreement entered by
LICENSEE to use the Patented and Unpatented Technology and its Improvements
(e.g., license, joint venture, or other agreement) for any territory outside
Asia except for the United States must be reviewed and approved by
LICENSOR.
2.3. Exclusive Sublicensable,
Grant of Exclusive Development, Distribution, Manufacturing, Regulatory and
R&D Rights Associated with the Patented and Unpatented Licensed
Technology. To the extent not already granted by LICENSOR to
LICENSEE in subsections 2.1 and 2.2 above of this Agreement, subject to the
terms and conditions of this Agreement, LICENSOR grants to LICENSEE, on an
exclusive basis in the Exclusive Territory, the Exclusive Development,
Distribution, Manufacturing, Regulatory, and R&D Rights associated with the
Patented and Unpatented Licensed Technology for the applicable Term for Patented
Technology and Term for Unpatented Technology, provided however that
any agreement entered by LICENSEE to use the Patented and Unpatented Technology
and its Improvements (e.g., license, joint venture, or other agreement) for any
territory outside Asia except for the United States must be reviewed and
approved by LICENSOR.
2.4. LICENSEE
may grant sublicenses to any third party with respect to any of the licenses and
rights granted by LICENSOR to LICENSEE, including, but not limited to, the
licenses and rights granted in subsections 2.1-2.3 above of this Agreement.
provided that LICENSEE shall make all commercially reasonably efforts (a) to
ensure that the sublicensee meets the applicable obligations of LICENSEE under
this Agreement (other than the obligations by the LICENSEE to pay Royalties
under this Agreement) and (b) to ensure that price charged by any sublicensee
for the Licensed Product reasonably comports with market conditions for the
applicable countr(ies) in the Exclusive Territory, provided however
that (a) any agreement entered by LICENSEE to use the Patented and Unpatented
Technology (e.g., license, joint venture, or other agreement) for any territory
outside Asia except for the United States must be reviewed and approved by
LICENSOR.
2.5 LICENSEE
shall not exploit the Patented and Unpatented Technology outside the Exclusive
Territory and shall not establish any branch or maintain any distribution depot
for the sale of the Licensed Product outside the Exclusive Territory and agrees
that throughout the Term, it shall refrain within the Exclusive Territory from
marketing, representing, promoting, distributing, selling or otherwise dealing
in any way, directly or indirectly products which compete with the Licensed
Product.
2.6
APPROVAL. Except
as otherwise provided in this Agreement, LICENSOR shall retain all control and
approval rights over all use of the Patented and Unpatented Technology and its
Improvements. LICENSEE shall adhere to all policies, procedures and
guidelines communicated to LICENSEE by LICENSOR with respect to use of the
Patented and Unpatented Technology and its Improvements. LICENSEE shall submit
to LICENSOR for its prior review and written approval all proposed uses of the
Patented and Unpatented Technology and its Improvements, including but not
limited to all preliminary and proposed re-design or re-engineering of the
technology prior to development or LICENSEE entering into discussions with third
parties for any sublicenses hereunder or all agreements or joint
venture arrangements. In the event of any modification to the approval, LICENSEE
must submit to LICENSOR for approval each modification of any element or item as
if it were a new element or item.
2.7. Rights Reserved by
LICENSOR
2.7.1 During
the Term, subject always to the terms of this Agreement, in Asia only, LICENSOR
may itself or may license others to use the Patented and Unpatented Technology
and its Improvements , licensed in this Agreement in connection with any use,
service or product and may freely exploit (subject to the terms of this
Agreement) such Patented and Unpatented Technology concurrently with and
throughout the Term of this Agreement.
2.7.2 LICENSOR
reserves the right to withdraw any Patented and Unpatented Licensed Technology
and its Improvements or element of it, the use or distribution of which under
this Agreement could reasonably be claimed to infringe the rights of a third
party(s) and any such withdrawal shall not be a breach of this
Agreement.
2.7.3 Subject
to the terms of this Agreement, LICENSOR shall have the right but shall not be
under any obligation to use the Patented and Unpatented Licensed Technology and
its Improvements and/or the name of “True Product” or “TPID” so as to give the
Licensed Product, TPID, “True Product” full and favourable prominence and
publicity.
3. COMPENSATION.
3.1. Subject
to the terms and conditions of this Agreement, in consideration for the licenses
and rights granted hereunder relating to Patented Licensed Technology, LICENSEE
agrees to pay to LICENSOR during the Term for Patented Licensed Technology a
royalty in the amount set forth in Schedule B attached hereto (the
“Royalty”).
3.2. Subject
to the terms and conditions of this Agreement, in consideration for the licenses
and rights granted hereunder relating to Unpatented Licensed Technology,
LICENSEE agrees to pay to LICENSOR during the Term for Unpatented Licensed
Technology a royalty in the amount set forth in Schedule B attached hereto (the
“Royalty”).
3.3. Unless
otherwise agreed by the Parties, the Royalty owed LICENSOR shall be calculated
on a quarterly calendar basis (the "Royalty Period") and shall be payable no
later than thirty (30) days after the end of the preceding full calendar
quarter, i.e., commencing on the first (1st) day of January, April, July, and
October with the exception of the first and last calendar quarters which may be
"short" depending upon the Effective Date of this Agreement. All payments under this
Agreement shall be in United States Dollars. No payments due under
this Agreement may be cross-collateralised or otherwise set off against any
other payment or amount. All payments under this Agreement shall be
made to LICENSEE at the address set out in this Agreement (or subsequently
advised in writing by LICENSOR) by the due date and in the manner specified in
this Agreement, without deduction, set-off or counterclaim. The parties
acknowledge and agree that the time within which LICENSEE is required to make
payment in accordance with this Agreement is of the essence of this Agreement
and any failure to do so by LICENSEE shall constitute a breach of this
Agreement.
3.4.
With each Royalty payment, LICENSEE shall provide LICENSOR with a written
royalty statement in a form acceptable to LICENSOR and consistent with industry
standards, which shall, at a minimum, itemize the Gross Receipts received by
LICENSEE during the Royalty Period, and which shall delineate the nature,
source, and amount of such Gross Receipts. LICENSEE shall make
commercially reasonable efforts to make available to LICENSOR information it
receives from any of LICENSEE’s sublicensees pertaining to gross receipts
received by LICENSEE from such sublicensee.
4. AUDIT.
4.1. LICENSOR
shall have the right, upon thirty (30) days written notice, to inspect
LICENSEE'S books and records and all other documents and material in the
possession of or under the control of LICENSEE with respect to the subject
matter of this Agreement at the place or places where such records are normally
retained by LICENSEE.
4.2. All
books and records relative to LICENSEE'S obligations hereunder shall be
maintained and kept accessible and available to LICENSOR for inspection for at
least five (5) years after the date to which they pertain.
4.3. In
accordance with applicable law, LICENSEE will make commercially reasonable
efforts to make available to LICENSOR all material information it receives from
any of LICENSEE’s sublicensees pertaining to gross receipts received by such
sublicensee with respect to the Patented and Unpatented Licensed
Technology.
5. WARRANTIES &
OBLIGATIONS.
5.1. Licensor’s Warranties &
Obligations.
5.1.1 No warranties
with respect of the Patented and Unpatented
Licensed Technology shall be made by LICENSOR and LICENSEE shall take it on an
“as is” basis.
5.1.2. After the
Effective Date, LICENSOR shall meet with and provide LICENSEE with such
information associated with the Patented and Unpatented Licensed Technology
relating to the installation and operation of hardware, software, machinery,
equipment, materials, object codes, specifications, designs, manufacturing and
processing procedures, methods, layout and the like which LICENSOR believes
LICENSEE may require in order to manufacture, sell, design, engineer, validate,
market, distribute, develop, secure regulatory approval for, commercialize
and/or utilize the Patented and Unpatented Licensed Technology in the
Territory.
5.2. Licensee’s Warranties &
Obligations.
5.2.1. LICENSEE
will make all best efforts to require all manufacturers, distributors, or
sublicensees of the Patented and Unpatented Licensed Technology or any component
thereof, to assure that when manufactured and distributed, they will be in
compliance with all applicable laws and regulations in the applicable countries
in the Territory, the required good manufacturing practices, and with other
necessary technical, engineering, safety or regulatory requirements;
and
5.2.2. LICENSEE
will make all best efforts to utilize and commercialize the Patented and
Unpatented Licensed Technology to perform the duties and obligations it has
assumed hereunder, including, but not limited to, making all commercially
reasonable efforts and bringing resources (financial, personnel, time,
expertise, distribution contacts and networks, government contacts, and other
resources):
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5.2.2.1.
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To
enter into, and secure purchase orders and/or distribution arrangements
for the Territory;
|
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5.2.2.2.
|
To
seek any regulatory approval to commercialize the Patented and Unpatented
Licensed Technology in the
Territory;
|
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5.2.2.3.
|
To
seek government and industry support in the
Territory;
|
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5.2.2.4.
|
To
use reasonable endeavors to promote and expand thesale of the Licensed
Product in the Exclusive Territory;
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5.2.2.5.
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To
comply with all reasonable instructions by
LICENSOR;
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5.2.2.6.
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If
any unauthorised use of the Patented and Unpatented Licensed Technology by
third parties comes to LICENSEE’s attention, to promptly notify LICENSOR
of that unauthorised use and provide to LICENSOR copies of any notices it
receives from third parties regarding any alleged infringement or
misappropriation of third party intellectual property rights. Such notices
shall be provided promptly, but in no event after more than fifteen (15)
days following receipt thereof. LICENSOR shall not settle any such claim
without LICENSEE’s prior written consent;
and
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5.2.2.7.
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On
termination or expiry of this Agreement, to promptly discontinue all use
of the Patented and Unpatented Licensed Technology and to destroy, or
deliver to LICENSOR at its request, all materials bearing the Patented and
Unpatented Licensed Technology.
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5.2.3 All
sale and distribution of the Licensed Product by LICENSEE or its sublicensees
shall:
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5.2.3.1
|
incorporate
and prominently display the trademarks, logos or device comprised within
the relevant Licensed Product as provided to LICENSEE by LICENSOR from
time to time; and
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5.2.3.2
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incorporate
the appropriate legal line or notice, as may be updated by LICENSOR from
time to time throughout the Term, in the form and location prescribed by
LICENSOR.
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LICENSEE shall not associate any other
characters, trademarks, trade names or properties with the Licensed Product,
including in any packaging or on advertising, promotional or display materials,
without LICENSOR’S prior written permission.
6. INTELLECTUAL
PROPERTY
PROTECTION AND RELATED MATTERS
6.1. Ownership.
6.1.2.
If any inventions are conceived or reduced to practice or otherwise developed
jointly by LICENSOR, on the one hand, and LICENSEE or its affiliates, on the
other hand, then such inventions and all intellectual property rights therein
shall be owned by LICENSOR solely.
6.1.3. LICENSEE
recognises and acknowledges the great value of the publicity and goodwill
associated with the Patented and Unpatented Licensed Technology and its
Improvements and that, as between LICENSOR and LICENSEE, LICENSOR
exclusively owns such goodwill. LICENSEE further recognises and
acknowledges that a breach by it of any of its covenants, agreements or
undertakings under this Agreement will cause LICENSOR irreparable harm, which
cannot be readily remedied in damages in an action at
law. Accordingly, such a breach will constitute an infringement of
LICENSOR's rights in and to the Patented and Unpatented Licensed Technology,
entitling LICENSOR to, in addition to any claim or award for damages, injunctive
relief and other equitable remedies, costs and reasonable attorney's
fees.
6.1.4. LICENSEE
agrees that nothing in this Agreement shall provide it with any other rights
whatsoever to the the Patented and Unpatented Licensed Technology and its
Improvement, nor convey, confer, grant, assign or otherwise provide LICENSEE
with intellectual property right, title or any other proprietary or ownership
interest in or to the the Patented and Unpatented Licensed Technology and its
Improvement or any elements of them. LICENSEE irrevocably and
unconditionally assigns to LICENSOR any interest it may have in the Patented and
Unpatented Licensed Technology and its Improvements including any intellectual
property rights in any item
derived
from the Licensed Product which may have been obtained or created by LICENSEE
during the Term pursuant to this Agreement. Where necessary, such
assignment takes effect as a present assignment of future rights. Any
such assignment, transfer or conveyance shall be made without other
consideration than the mutual covenants and considerations of this
Agreement. If any materials bearing any element of the Patented and
Unpatented Licensed Technology and its Improvements utilised by LICENSEE were
not created or owned by LICENSOR, LICENSEE shall do all that is necessary to
ensure that such materials achieve patent protection and that valid title to
such patent is, at the earliest possible moment, transferred to
LICENSOR.
6.2.
Licensor Patent
Rights.
6.2.2.
LICENSOR shall have all right and option to file and prosecute any patent
applications and to maintain any patents related to the Patented Licensed
Technology and any Improvements all at LICENSOR’s expense.
6.2.3.
If LICENSOR declines the option to file and prosecute any such patent
applications or maintain any such patents, it shall give LICENSEE reasonable
notice to this effect, sufficiently in advance to permit LICENSEE to undertake
such filing, prosecution and/or maintenance without a loss of rights, and
thereafter LICENSEE may, upon written notice to LICENSOR, file and prosecute
such patent applications and maintain such patents in the name of LICENSOR, at
LICENSEE’s expense, provided that
LICENSEE shall be entitled to reimbursement for such expenses from LICENSOR to
the extent that such expenses are reasonably necessary in light of the purpose
of this Agreement and the transactions contemplated
hereby.
6.2.4. Notifications of Third Party
Infringement, Each Party agrees to notify the other Party when it becomes
aware of the reasonable probability of infringement of the intellectual property
of the LICENSOR arising from or relating to the making, using, offering for
sale, sale, importation, development or commercialization of any competitive
product, or the copying, modification distribution, execution, performance or
display of any software therein (“Competitive
Infringement”).
6.2.5.
Infringement
Action. Within ninety (90) days of becoming aware of any Competitive
Infringement, LICENSOR shall decide whether to institute an infringement suit or
take other appropriate action that it believes is reasonably required to enforce
the intellectual property of LICENSOR. If LICENSOR fails to institute such
suit or take such action within such ninety (90) day period, then LICENSEE shall
have the right at its sole discretion to institute such suit or take other
appropriate action in the name of either or both Parties.
6.2.6. Costs. Each Party
shall assume and pay all of its own out-of-pocket costs incurred in connection
with any litigation or proceedings described in this Section 6.2.5, including
without limitation the fees and expenses of such Party’s counsel.
7. CONFIDENTIALITY
7.1. Confidentiality.
Except to the extent expressly authorized by this Agreement or otherwise agreed
to in writing by the Parties, each Party agrees that, for the term of this
Agreement and for five (5) years thereafter, it shall keep confidential and
shall not publish or otherwise disclose and shall not use for any purpose other
than as provided for in this Agreement any Confidential Information furnished to
it by the other Party pursuant to this Agreement, except that the foregoing
shall not apply to any information for which the receiving Party can
demonstrate, by competent proof:
7.1.1. Was
already known to the receiving Party, other than under an obligation of
confidentiality, at the time of disclosure by the other Party;
7.1.2. Was
generally available to the public or otherwise part of the public domain at the
time of its disclosure to the receiving Party;
7.1.3. Later
became part of the public domain through no act or omission of the receiving
Party, which is unauthorized by the disclosing Party;
7.1.4. Was
disclosed to the receiving Party, other than under an obligation of
confidentiality to a third party, by a third party who had no obligation to the
disclosing Party not to disclose such information to others.
7.2. Authorized
Disclosure. Each Party may disclose the other Party’s Confidential
Information to the extent such disclosure is reasonably necessary for the
following reasons:
7.2.1. Regulatory
filings, including filings with the U.S. Securities Exchange Commission and
Regulatory Authorities;
7.2.2. Prosecuting
or defending litigation;
7.2.3. Complying
with applicable governmental regulations and legal requirements;
and
7.2.4. Disclosure
to potential sublicensees and potential investors who agree in writing to be
bound by similar terms of confidentiality.
Notwithstanding the foregoing, in the
event a Party is required to make a disclosure of the other Party’s Confidential
Information pursuant to this Section 7.2, it will, except where impracticable,
give reasonable advance notice to the other Party of such disclosure and use
best efforts to secure confidential treatment of such information. In any event,
the Parties agree to take all reasonable actions to avoid any unauthorized use
or disclosure of Confidential Information hereunder.
7.3.
All Confidential Information shall be held in strict confidence by each Party
and shall be protected, at a minimum, in accordance with the same standard of
care that such Party uses in protecting its own confidential information of a
similar nature, but in no event shall such Party use less than a reasonable
standard of care.
7.4.
Employees;
Agents. Each Party shall ensure that each of its affiliates and
sublicensees, and each employee, director, officer, consultant, or other agent
of it, or of its affiliates or sublicensees (collectively “Agents”), who has
access to Confidential Information is bound to obligations of confidentiality
and non-use substantially similar in scope to those set forth in Section 7 and
shall indemnify the other Party for any breach hereunder by any of its Agents.
Each Party agrees that any disclosure or distribution of the other Party’s
Confidential Information within its own organization shall be made only as is
reasonably necessary to carry out the intent of this Agreement.
7.5. Injunctive Relief.
The Parties expressly acknowledge and agree that any breach or threatened breach
of Section 7 may cause immediate and irreparable harm to the disclosing Party
which may not be adequately compensated by damages. Each Party therefore agrees
that in the event of such breach or threatened breach and in addition to any
remedies available at law, the disclosing Party shall have the right to secure
equitable and injunctive relief, without bond, in connection with such a breach
or threatened breach.
7.6. If
it is determined by a court of competent jurisdiction in any state or custody
that any restriction in Section 7 of this Agreement is excessive in duration or
scope or is unreasonable or invalid or unenforceable under the laws of that
state, it is the intention of the parties that such restriction shall not affect
the remainder of the covenant or covenants which shall be given full effect,
without regard to the invalid or unenforceable portions, and that such
restriction may be modified or amended by the court to render it enforceable to
the maximum extent permitted by the law of that state, province, or
country.
7.7. The
obligations contained in Section 7 of this Agreement shall survive the
termination or expiration of this Agreement and shall be fully enforceable
thereafter.
8. EXPORT
CONTROL.
Anything contained in
this Agreement to the contrary
notwithstanding, the obligations of the Parties and of the
subsidiaries, affiliates, sublicensees, and agents of the
Parties shall be subject to all laws, present and future,
and including export control laws and regulations, of any
government having jurisdiction over
the Parties hereto, and to orders,
regulations, directions or requests of any
such government. Each Party shall undertake to comply with
and be solely responsible for complying with such laws applicable to such
Party.
9.
TAXES.
LICENSEE
shall be solely responsible for the payment of any and all taxes, fees, duties
and other payments incurred in relation to the manufacture, use, sale, and/or
commercialization of the Patented and Unpatented Licensed Technology with the
exception that LICENSOR shall be solely responsible for the payment of any and
all taxes, fees, duties or other payments assessed by all relevant authorities
by virtue of LICENSOR being the owner of the intellectual property associated
with the Patented and Unpatented Licensed Technology.
10. NOTICE &
PAYMENT
10.1. Any
notice required to be given pursuant to this Agreement shall be in writing and
delivered personally to the other designated party at the above stated address
or mailed by certified or registered mail, return receipt requested or delivered
by a recognized international overnight courier service.
10.2. Either
Party may change the address to which notice or payment is to be sent by written
notice to the other in accordance with the provisions of this paragraph. All
such notices shall be addressed as follows:
If
to LICENSEE:
TRUE PRODUCT ID, INC.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇
Attention:
President/ CEO
Phone No: ▇▇▇-▇▇▇-▇▇▇▇
Fax No: ▇▇▇-▇▇▇-▇▇▇▇
If
to LICENSOR:
Saddington Limited
BVI 1499542
P.O. Box 957
Offshore Incorporations
Centre
Road Town
Tortola
British Virgin Lands
Attn: CEO/President
Any Party may change the persons and
addresses to which notices, requests or other communications are to be sent by
giving written notice of such change to the other party hereto in the manner
provided herein for giving notice. Notices shall be effective upon receipt in
the case of physical delivery or overnight carrier and three (3) business days
after deposit in the U.S. mails in the case of mailing.
11. TERMINATION.
11.1. This
Agreement may be terminated by LICENSOR upon ninety (90) days written notice to
the LICENSEE in the event of a breach of a material provision of this Agreement
by the LICENSEE, which is not caused by the acts or omissions of LICENSOR,
provided that, during the ninety (90) day period, the LICENSEE fails to cure
such breach. In such event, all moneys paid to LICENSOR shall be
deemed non-refundable and LICENSEE shall be relieved of any further obligations
hereunder, provided that LICENSEE shall pay to LICENSOR any royalties owed under
this Agreement with respect to Gross Receipts received by LICENSEE as of the
date of termination by LICENSEE and with respect to any sale by LICENSEE or
LICENSEE’s sublicensees and Affiliates prior to the date of termination by
LICENSEE.
11.2. Immediate Right of
Termination. Either Party
shall have the right to immediately terminate this Agreement by giving written
notice to the other Party in the event that the other Party files a petition in
bankruptcy or is adjudicated a bankrupt or insolvent, or makes an assignment for
the benefit of creditors or an arrangement pursuant to any bankruptcy law, or if
the other Party discontinues or dissolves its business or if a receiver is
appointed for the other Party or for the other Party’s business and such
receiver is not discharged within 120 days.
12. POST TERMINATION
RIGHTS
12.1. Not
less than thirty (30) days prior to the expiration of this Agreement or
immediately upon termination thereof, LICENSEE shall provide LICENSOR with a
complete schedule of all inventory of devices, sensors, and other products
associated with the Patented and Unpatented Licensed Technology then on-hand as
well as all work in progress (the "Inventory").
12.2. Upon
expiration or termination of this Agreement, except for reason of a breach of
LICENSEE’S duty to comply with any quality control or legal notice marking
requirements, LICENSEE shall be entitled, for an additional period of twelve
(12) months and on a nonexclusive basis, to continue to sell such
Inventory. Such sales shall be made subject to all of the provisions
of this Agreement and to an accounting for and the payment of a Royalty
thereon. Such accounting and payment shall be due and paid within
sixty (60) days after the close of the said twelve (12) month
period.
12.3. Upon
any expiration or termination of this Agreement, each receiving Party shall
return to the disclosing Party the Confidential Information of the disclosing
Party, including all copies and reproductions thereof and will not retain any
copies, extracts, analyses, or other reproductions, in whole or in part, of such
Confidential Information, except that (i) each receiving Party may retain the
disclosing Party’s Confidential Information to the extent necessary to exercise
its licenses which survive termination or expiration, and (ii) one copy may be
retained by the legal counsel of the receiving Party for purposes of complying
with the receiving Party’s obligations hereunder.
12.4. Upon
the expiration or termination of this Agreement, all of the rights of LICENSEE
under this Agreement (except any rights relating to any Improvements developed
by LICENSEE) shall forthwith terminate and immediately revert to
LICENSOR.
12.5. The
Termination rights under this Section 12 shall be in addition to, and shall not
prejudice, any of the Parties’ remedies at law or in equity.
13. INDEMNITY
13.1. Licensee. Licensee
agrees to defend, indemnify and hold harmless Licensor, its affiliates and its
and their respective directors, officers, employees and agents (the “Licensor Indemnified
Parties”) from and against any losses, costs, damages, fees or expenses
arising out of any third party claim to the extent arising out of (a) any breach
by Licensee of any of its representations, warranties, covenants, or obligations
pursuant to this Agreement, or (b) death or personal bodily injury from the
development, commercialization, or use of the Patented or Unpatented Licensed
Technology by Licensee, its affiliates or sublicensees. In the event of any
third party claim against the Licensor Indemnified Parties in respect of which
indemnity may be sought hereunder, Licensor shall promptly notify Licensee in
writing of the claim and Licensee shall manage and control, at its sole expense,
the defense of the claim and its settlement. The Licensor Indemnified Parties
shall cooperate with Licensee and may, at their option and expense, be
represented in any such action or proceeding. Licensee shall not be liable for
any litigation costs or expenses incurred by the Licensor Indemnified Parties
without Licensee’s prior written authorization. In addition, Licensee shall not
be responsible for the indemnification of any Licensor Indemnified Party to the
extent arising from negligence or intentional misconduct by such person, or as
the result of any settlement or compromise by the Licensor Indemnified Parties
without Licensee’s prior written consent.
13.2. Licensor. Licensor
agrees to defend, indemnify and hold harmless Licensee, its affiliates and
sublicensees and its and their respective directors, officers, employees and
agents (the “Licensee
Indemnified Parties”) from and
against any losses, costs, damages, fees or expenses arising out of any third
party claim to the extent arising out of (a) any breach by Licensor of any of
its representations, warranties, covenants, and obligations pursuant to this
Agreement. In the event of any third party claim against the Licensee
Indemnified Parties in respect of which indemnity may be sought hereunder,
Licensee shall promptly notify Licensor in writing of the claim and Licensor
shall manage and control, at its sole expense, the defense of the claim and its
settlement. The Licensee Indemnified Parties shall cooperate with Licensor and
may, at their option and expense, be represented in any such action or
proceeding. Licensor shall not be liable for any litigation costs or expenses
incurred by the Licensee Indemnified Parties without Licensor’s prior written
authorization. In addition, Licensor shall not be responsible for the
indemnification of any Licensee Indemnified Party to the extent arising from
negligence or intentional misconduct by such person, or as the result of any
settlement or compromise by the Licensee Indemnified Parties without Licensor’s
prior written consent.
14. FORCE
MAJEURE.
Neither
Party shall be liable for failure or delay in performance of any obligation
under this Agreement, other than payment of any amount due and payable, if such
failure or delay is caused by circumstances beyond the reasonable control of the
Party concerned, which may include failures resulting from fires, earthquakes,
power surges or failures, accidents, labor stoppages, war, revolution, civil
commotion, acts of public enemies, blockade, embargo, inability to secure
materials or labor, any law, order, proclamation, regulation, ordinance, demand,
or requirement having a legal effect of any government or any judicial authority
or representative of any such government, acts of God, or acts or omissions of
communications carriers, or other causes beyond the reasonable control of the
Party affected, whether or not similar to the foregoing. Any such cause shall
delay the performance of the affected obligation until such cause is removed.
The affected Party shall use commercially reasonable efforts to remove the cause
of such delay.
15. JURISDICTION &
DISPUTES
15.1. This
Agreement shall be governed in accordance with the laws of Hong Kong
Special Administrative Region.
15.2. The
Parties agree that any legal proceeding brought to enforce the provisions of
this Agreement shall be brought only in the jurisdiction of the non-moving
party.
15.3. Conflict Resolution.
The Parties agree that all disputes, claims or controversies between the parties
relating in any way to this Agreement that cannot be resolved, shall first be
submitted to non-binding mediation. The Parties will jointly appoint
a mutually acceptable mediator, and will participate in good faith in the
mediation. If the parties are unable to agree on a mutually
acceptable mediator within thirty (30) days of a request for mediation by either
party, then any dispute, controversy or claim arising out or relating to this
Agreement or any breach thereof shall be settled by arbitration in accordance
with the UNCITRAL Arbitration Rules in effect at the time of such arbitration or
as may be amended by the rest of this Section.
15.3.1 Any
party that initiates an arbitration (“Claimant”) shall appoint its nominated
arbitrator in its notification of such arbitration (“Notice”). The
other party (“Respondent”) shall then have the right to appoint its own
nominated arbitrator within fourteen days of receipt of the Notice by notice in
writing to the Claimant. In the event that the Respondent shall fail
to appoint an arbitrator within such time, an arbitrator appointed by the
secretary general for the time of the Hong Kong International Arbitration Centre
(“HKIAC”) shall be deemed to be the arbitrator appointed by the
Respondent.
15.3.2 The
two arbitrators appointed pursuant to sub-Section (c) must be independent of
their appointors and they will appoint one further arbitrator of similar
qualifications within thirty days of the appointment by or behalf of the
Respondent of its nominated arbitrator, failing which the further arbitrator
shall be appointed by the secretary general for the time being of
HKIAC.
15.3.3 Each
of the parties irrevocably agrees that all claims relating to the interpretation
and enforcement of the provisions of this Agreement and any documents referred
to therein and the transactions contemplated thereby shall be determined by
HKIAC applying the UNCITRAL Arbitration Rules then in effect and that its
jurisdiction shall be exclusive except to the extent that it shall lawfully
decline to exercise such jurisdiction.
15.3.4 The
place of arbitration shall be in Hong Kong at HKIAC and shall be conducted in
the English language. The costs of the arbitration shall be borne by
the parties in equal shares.
15.3.5 Any
arbitration pursuant to this Agreement shall be administered by HKIAC in
accordance with the HKIAC procedures for arbitration in force at the date of
this Agreement including such additions to the UNCITRAL Arbitration Rules as are
therein contained (save as may be amended by the terms of this
Section).
15.3.6 This
entire provision ("Conflict Resolution") of the Agreement shall survive its
termination or expiration of the Agreement for a period of four (4)
years.
16. AGREEMENT BINDING ON
SUCCESSORS.
The
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their heirs, administrators, successors and
assigns.
17. WAIVER.
No waiver
by either Party of any default shall be deemed as a waiver of prior or
subsequent default of the same or other provisions of this
Agreement.
18. SEVERABILITY.
If any
term, clause or provision hereof is held invalid or unenforceable by a court of
competent jurisdiction, such invalidity shall not affect the validity or
operation of any other term, clause or provision and such invalid term, clause
or provision shall be deemed to be severed from the Agreement.
19. NO JOINT
VENTURE.
Nothing
contained herein shall constitute this arrangement to be employment, a joint
venture or a partnership.
20. ASSIGNABILITY.
20.1. LICENSEE
may not assign this Agreement in whole or in part unless with the consent of
LICENSOR. Subject to section 21.2, LICENSOR may assign
this Agreement in whole or in part in its absolute discretion. Any assignment
not in accordance with the foregoing shall be void
20.2. The
licenses granted to LICENSEE under this Agreement are appurtenant to and run
with the intellectual property associated with the Patented and Unpatented
Licensed Technology and shall bind any Transferee (as defined
below). LICENSOR shall (i) ensure that any Person acquiring any
right, title or interest in or to the intellectual property associated with
Patented and Unpatented Licensed Technology, or any intellectual property rights
underlying the licenses granted herein, including any purchaser, assignee or
transferee of such intellectual property rights or any person obtaining a
security interest therein, (collectively, “Transferees”)
shall be bound by the licenses and other rights granted to LICENSEE under this
Agreement.
21. INTEGRATION.
Except as
to matters which are referenced herein as matters which the Parties will
continue to work on and discuss in good faith, this Agreement constitutes the
entire understanding of the parties, and revokes and supersedes all prior
agreements between the parties, including any option agreements which may have
been entered into between the parties, and is intended as a final expression of
their Agreement. It shall not be modified or amended except in
writing signed by the parties hereto and specifically referring to this
Agreement. This Agreement shall take precedence over any other
documents which may be in conflict with said Agreement.
22. EXECUTION IN
COUNTERPARTS.
This
Agreement may be executed in counterparts or via facsimile or electronic means,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original, and all of which counterparts, taken together, shall constitute
one and the same instrument.
23. NO THIRD
PARTY BENEFICIARIES.
No person
or entity other than LICENSOR, LICENSEE, the permitted assignees of LICENSEE and
the Transferees hereunder shall be deemed an intended beneficiary hereunder or
have any right to enforce any obligation of this Agreement.
24. NO STRICT
CONSTRUCTION.
This
Agreement has been prepared jointly and shall not be strictly construed against
any Party.
25. HEADINGS.
The
captions or headings of the sections or other subdivisions hereof are inserted
only as a matter of convenience or for reference and shall have no effect on the
meaning of the provisions hereof.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK. SIGNATURE PAGE TO
FOLLOW]
IN WITNESS WHEREOF, and
intending to be legally bound hereby, this License Agreement has been duly
executed by the authorized representatives of the Parties hereto as of the date
first above written.
LICENSOR:
SADDINGTON
LIMITED
BY:_______________________________
LICENSEE:
TRUE
PRODUCT ID,
INC. CORPORATE
SEAL:
BY:_____________________________
KE
▇▇ ▇▇▇▇
PRESIDENT
EXHIBIT/ SCHEDULE
A
TO LICENSE AGREEMENT BETWEEN
TRUE PRODUCT ID, INC. AND SADDINGTON
MATERIAL PATENTS AND
INTELLECTUAL PROPERTY
PATENTS
(1) PCT
|
(WO/2007/014532) METHOD OF
LABELLING AND DETECTIION OF GOODS AND DEVICE THEREOFPub.
No.:
|
|
WO/2007/014532
|
|
International
Application No.:
|
|
PCT/CN2006/001946
|
|
Publication
Date:
|
08.02.2007
|
International
Filing Date:
|
02.08.2006
|
|||
|
Chapter 2 Demand
Filed: 02.03.2007
|
||||||
|
(WO/2007/014532) METHOD OF
LABELLING AND DETECTIION OF GOODS AND DEVICE THEREOFPub.
No.:
|
|
WO/2007/014532
|
|
International
Application No.:
|
|
PCT/CN2006/001946
|
|
Publication
Date:
|
08.02.2007
|
International
Filing Date:
|
02.08.2006
|
|||
|
Chapter 2 Demand
Filed: 02.03.2007
|
||||||
IPC:
G06K 19/00
(2006.01), B07C 5/34
(2006.01)
Applicants:
TRUE PRODUCT ID TECHNOLOGY (BEIJING)
LIMITED [CN/CN]; 18th Floor West Zone, Pacific International Plaza, No.
106, Zhichun Road, Haidian District, Beijing 100086 (CN) (All Except US).
▇▇, ▇▇▇▇ [CN/CN]; 18th Floor
West Zone, Pacific International Plaza, No. 106, Zhichun Road, Haidian District,
Beijing 100086 (CN) (US
Only).
Inventor:
▇▇, ▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ International Plaza, No. 106, Zhichun Road, Haidian District,
Beijing 100086 (CN).
Agent:
CCPIT PATENT AND TRADEMARK LAW
OFFICE; 8th Floor, Vantone New World Plaza, 2 Fuchengmenwai Street,
Beijing 100037 (CN).
Priority Data:
200510089020.1 03.08.2005 CN
|
Title:
|
METHOD
OF LABELLING AND DETECTIION OF GOODS AND DEVICE THEREOF
|
|
Abstract:
|
The
present invention provides a method of labeling, detecting and managing
the goods and device thereof. The method of present invention includes the
step of defining the label of goods, the label comprises at least one
chemical element in the chemical element inhering in the goods and/or
additional chemical element; the step of providing the database which
contains the labeled data; the step of detecting the signal sent by goods,
generating the detection data and comparing it with data in the database;
the step of determining whether the good to be detected is the labeled
good or not according to the comparing result, and reading at least one
message of the good in the database. The goods labeling and detecting
solution of the present invention can used in many fields of society
economic and administrative management, such as identification, goods
label, preventing the goods replaced with others, physical distribution
management, statistic analysis and so on.
|
|
Designated
States:
|
AE,
AG, AL, AM, AT, AU, AZ, BA, BB, BG, BR, BW, BY, BZ, CA, CH, CN, CO, CR,
CU, CZ, DE, DK, DM, DZ, EC, EE, EG, ES, FI, GB, GD, GE, GH, GM, HN, HR,
HU, ID, IL, IN, IS, JP, KE, KG, KM, KN, KP, KR, KZ, LA, LC, LK, LR, LS,
LT, LU, LV, LY, MA, MD, MG, MK, MN, MW, MX, MZ, NA, NG, NI, NO, NZ, OM,
PG, PH, PL, PT, RO, RS, RU, SC, SD, SE, SG, SK, SL, SM, SY, TJ, TM, TN,
TR, TT, TZ, UA, UG, US, UZ, VC, VN, ZA, ZM, ZW.
African
Regional Intellectual Property Org. (ARIPO) (BW, GH, GM, KE, LS, MW, MZ,
NA, SD, SL, SZ, TZ, UG, ZM, ZW)
Eurasian
Patent Organization (EAPO) (AM, AZ, BY, KG, KZ, MD, RU, TJ,
TM)
European
Patent Office (EPO) (AT, BE, BG, CH, CY, CZ, DE, DK, EE, ES, FI, FR, GB,
GR, HU, IE, IS, IT, LT, LU, LV, MC, NL, PL, PT, RO, SE, SI, SK,
TR)
African
Intellectual Property Organization (OAPI) (BF, BJ, CF, CG, CI, CM, GA, GN,
GQ, GW, ML, MR, NE, SN, TD, TG).
|
|
Publication
Language:
|
Chinese
(ZH)
|
|
Filing
Language:
|
Chinese
(ZH)
|
TPID
subsequently requested the commencement of national phase examinations of its
PCT application for the United States, South Korea, Japan, Mexico, India,
Brazil, Indonesia, Canada, the Philippines, and the European Patent
Office.
(2). Chinese
Patent Application.
|
|
Title:
“Method and Apparatus Using Chemical Elemental Taggant and the Chemical
Elemental Taggant.”
|
Number:
200510089020.1
Filing Date: 02 August
2005
EXHIBIT/ SCHEDULE
B
SB-1. Territory
The term,
“Territory,” as used and referenced in the underlying Agreement, shall mean and
constitute:
All
territories in the world outside and except Asia.
SB-2. Term
The term
“Term”, as used and referenced in the underlying Agreement, shall mean and
constitute:
Ten (10)
years, with automatic renewals for additional ten (10) year terms, unless
properly terminated in accordance with the terms and conditions of the
underlying Agreement.
SB-3. Royalty
Rate
The term,
“Royalty Rate,” as used and referenced in the underlying Agreement shall
mean:
(1). For the United
States:
For the
first five (5) years from the execution of the parties’ subsequent definitive
agreement related to their October 19, 2008 Term Sheet: Zero percent
(0%)
After the
first five (5) years from the execution of the parties’ subsequent definitive
agreement related to their October 19, 2008 Term Sheet: five percent (5%) of
Gross Receipts of LICENSEE for the duration of the unexpired term of any and all
of the license or joint venture or other agreement or contract entered into with
LICENSEE in the United States.
(2), Countries in the Territory
other than the United States:
Five
percent (5%) of the NOPBT of LICENSEE generated from business associated with
the Patented and Unpatented Licensed Technology and its Improvements in
Countries in the Territory other than the United States for the first 30 months
from the month of first revenue receipts and thereafter five percent (5%) of
Gross Receipts of LICENSEE for the duration of the unexpired term of any and all
of the license or joint venture or other agreement or contract entered into with
LICENSEE in Countries in the Territory other than the United
States.
LICENSOR
has been advised by IP counsel that that Royalty Rate for Patented Licensed
Technology should be higher than the Royalty Rate for Unpatented Licensed
Technology. The Parties intend to structure the respective royalty
rates accordingly and intend that the Royalty Rate for Unpatented Licensed
Technology is lower than the Royalty Rate for Patented Licensed Technology, but
as an accommodation to LICENSOR and for the sake of simplicity, notwithstanding
the distinction, LICENSEE has agreed to pay with respect to Unpatented Royalty
Rate the same higher Royalty Rate for Patented Royalty Rate, especially
considering that under the Agreement, upon expiration of the life of the
applicable Patent, Patented Licensed Technology is automatically and immediately
deemed Unpatented Licensed Technology.
EXHIBIT/ SCHEDULE
C
SC-1. The
term “TPID Technology” as used in the Agreement and its schedules and exhibits
shall mean any and all technology which is licensed to and/or is developed,
possessed, used, and/or owned by and for LICENSOR related to
anti-counterfeiting, product authentication, product safety monitoring, supply
chain tracking and management, and any and all applications and improvements,
enhancements, or modifications related thereto, including, but not limited to,
taggant, scanners, marking equipment, hardware, software, other components,
algorithms, software, systems, procedures, protocols, processes, and other
technologies, as described in, inter alia, (a) LICENSOR’s
prior filings and submissions with any regulatory authority; and (b) LICENSOR’s
prior patent, trademark, copyright, and/or other intellectual property filings
and submissions, including those listed in Exhibit A attached hereto.
Included, without limitation, within the scope of the term “TPID
Technology” are the technologies and all applications and aspects related
thereto known or referred to as:
|
Ø
|
Synthetic
DNA or SDNA;
|
|
Ø
|
KMACK;
|
|
Ø
|
Any
and all technologies related to TPID’s projects in China and other parts
of Asia, including, but not limited to, the project with
AQSIQ;
|
|
Ø
|
Any
and all technologies related to TPID’s projects with Biofield
Corp.;
|
|
Ø
|
Any
and all technologies related to TPID’s projects with Versa Card,
Inc.
|
|
Ø
|
technologies
related to TPID’s projects with MacKay Group Limited or MacKay Innotech
Limited;
|
SC-2. The
term “Unpatented Licensed Technology” as used in the Agreement and its schedules
and exhibits shall mean any and all components of the TPID
Technology other than the Patented Licensed Technology, including,
but not limited to, devices, sensors, other components, algorithms, software,
systems, procedures, protocols, processes, information, data, methods of use,
techniques, ideas, inventions, trade secrets and any other technical information
or proprietary technologies relating to the development, use or sale of any
device, sensor or other product, service, or manifestation of the TPID
Technology. To the extent that the Patent for certain Patented
Licensed Technology expires, lapses, and/or is otherwise terminated or
rendered invalid, such Patented Licensed Technology shall be automatically and
immediately deemed Unpatented Licensed Technology for the balance of the Term
for the Unpatented Licensed Technology, provided that this Agreement is still in
effect and has not been properly terminated.
EXHIBIT
“7”
TO
ASSET
SALE AGREEMENT
Between
SADDINGTON
LIMITED
And
TRUE
PRODUCT ID, INC.
And
TRUE
PRODUCT ID TECHNOLOGY LIMITED
IRREVOCABLE ▇▇▇▇ OF
SALE
This
is an Irrevocable ▇▇▇▇ of Sale from TRUE PRODUCT ID, INC. (“TPID US”), a
corporation organized under the laws of the state of Delaware with its principal
offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ on its own behalf and on behalf of its
Affiliates (as defined in the Agreement), including
TRUE PRODUCT ID TECHNOLOGY
(BEIJING) LIMITED, a limited liability company and joint venture
organized under the laws of the People’s Republic of China with its principal
offices at 11th Floor,
Office Building of Jade Palace Hotel ▇▇.▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, People’s Republic of China 100086 (“TPID Beijing”); and
TRUE PRODUCT ID
TECHNOLOGY LIMITED, a limited liability company organized under the laws
of Hong Kong with its registered office at Suite 1005, Allied Kajima ▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ (“TPID HK”) to SADDINGTON LIMITED
(“Saddington”) a corporation organized under the laws of the British Virgin
Islands, whose registered office is at BVI 1499542, P.O. 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands pursuant to a
certain Asset Sale Agreement dated as of November 3, 2008 by and among TPID US
and TPID HK on one hand and Saddington on the other hand (the “Agreement”).
For
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, TPID US and TPID HK on their own behalf and on behalf of their
Affiliates
hereby sell, assign, transfer, convey, deliver and contribute to Saddington, its
successors and assigns, to have and to hold forever, all of their right, title
and interest in and to the Purchased Assets (as
defined in the Agreement), subject to the applicable provisions of the
Agreement.
From
and after the Closing
Date (as defined in the Agreement) upon
request of Saddington, TPID US and TPID HK shall, at Saddington’s expense, duly
execute, acknowledge and deliver all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances as may be required to
convey to and vest the Purchased Assets in Saddington or its permitted assignees
and as may be appropriate to protect Saddington’s rights, title and interest in
and enjoyment of all the Purchased Assets and
as may be appropriate otherwise to carry out the transactions contemplated by
the Agreement
and this Irrevocable ▇▇▇▇ of Sale.
Dated: November
3, 2008
IN
WITNESS WHEREOF, and intending to be legally bound, the undersigneds have duly
executed and delivered this Irrevocable ▇▇▇▇ of Sale as of the date first
written above.
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SADDINGTON
LIMITED
|
||
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|
|||
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By:
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||
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Name:
|
||
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||
|
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Title:
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||
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|
|||
|
CORPORATE
SEAL:
|
|||
|
|
|||
|
TRUE
PRODUCT ID, INC.
|
|||
|
By:
|
|||
|
|
|||
|
Name:
Ke ▇▇ ▇▇▇▇
|
|||
|
|
|||
|
Title: President
|
|||
|
|
|||
|
CORPORATE
SEAL:
|
|||
|
|
|||
|
|
TRUE
PRODUCT ID TECHNOLOGY LIMITED
|
||
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|
|||
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By:
|
||
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Name:
|
||
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||
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Title:
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||
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EXHIBIT
“8”
TO
ASSET
SALE AGREEMENT
Between
SADDINGTON
LIMITED
And
TRUE
PRODUCT ID, INC.
And
TRUE
PRODUCT ID TECHNOLOGY LIMITED
ASSIGNMENT
OF PATENT RIGHT
FOR
VALUE RECEIVED, True
Product ID Technology (Beijing) Limited (“TPID Beijing”), a Chinese
limited liability company having a place of business at 11th Floor, Office
Building of Jade Palace Hotel ▇▇.▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, and Li
Ning, a Chinese citizen with an office address at 11th Floor, Office
Building of Jade Palace Hotel ▇▇.▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, and any of TPID Beijing’s and Li Ning’s affiliates, and True Product ID, Inc. (“TPID
US”), a Delaware corporation with an office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, hereby sell, assign, and transfer to Saddington Limited (“SL”), a
British Virgin Islands limited liability company having a registered office at
BVI 1499542, P.O. 957, Offshore Incorporations Centre, Road Town, Tortola,
British Virgin Islands, and its successors, assigns, and legal representatives,
the entire right, title, and interest, for all countries of the world, in and to
certain inventions described in a PCT Patent Application entitled Method of
Labelling and Detection of Goods and Device Thereof, Application No.
PCT/CN2006/001946, filed on August 2, 2006, and in a Chinese Patent Application
of similar title, Application No. 200510089020.1, filed on August 3, 2005, and
the entire right, title, and interest in and to said applications (including,
but not limited to, any of the technology used in the gas tank/bottle project),
and any and all Letters Patent that may be granted in all countries of the
world, including all rights of priority arising from the aforesaid
applications.
TPID
Beijing, Li Ning, and TPID US hereby consent that a copy of this assignment
shall be deemed a full legal and formal equivalent of any document which may be
required in any country as proof of the right of SL to apply for Letters Patent
or other form of protection for said inventions and to claim the aforesaid
benefit of the right of priority.
TPID
Beijing, Li Ning, and TPID US request that any and all patents for said
inventions be issued to SL in the United States and in all countries foreign to
the United States, or to such nominees as SL may designate.
TPID
Beijing, Li Ning, and TPID US agree that, when requested, shall, without
additional charge to SL, but at its expense, sign all papers, and do all acts
which may be necessary, desirable or convenient in connection with said
applications, patents, or other forms of protection.
[SIGNATURE
PAGE TO FOLLOW]
True Product ID Technology (Beijing)
Limited
By:_____________________________________
LI
NING as CEO and Legal Representative of True
Product ID Technology (Beijing) Limited, and their
Affiliates
Dated:
True Product ID, Inc.
By:_____________________________________
Ke
▇▇ ▇▇▇▇, President
Dated:
LI NING
_________________________________________
Dated:
EXHIBIT
“9”
TO
ASSET
SALE AGREEMENT
Between
SADDINGTON
LIMITED
And
TRUE
PRODUCT ID, INC.
And
TRUE
PRODUCT ID TECHNOLOGY LIMITED
EXHIBIT
9
Dated November 3,
2008
TRUE
PRODUCT ID, INC.,
In
favour of
SADDINGTON
LIMITED
TRUE PRODUCT
ID TECHNOLOGY LIMITED
__________________________________________
DEED
OF INDEMNITY
in
respect of
TAXATION
___________________________________________
|
|
ROBERTSONS
|
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Solicitors
and Notaries
|
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57/F,
The Center
|
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▇▇
▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇
|
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▇▇▇▇▇▇▇
|
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|
▇▇▇▇
▇▇▇▇
|
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|
Tel:
▇▇▇▇ ▇▇▇▇
|
|
|
Fax:
▇▇▇▇ ▇▇▇▇
|
|
Ref:
CDIG/WWY/8652
|
THIS DEED OF INDEMNITY is
dated November 3, 2008 and is made
BETWEEN
|
(1)
|
TRUE PRODUCT ID, INC., a
corporation organized under the laws of the state of Delaware with its
principal offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ (“Seller”);
|
|
|
IN
FAVOUR OF
|
|
(2)
|
SADDINGTON LIMITED, a
corporation organized under the laws of the British Virgin Islands, whose
registered office is at BVI 1499542, P.O. 957, Offshore Incorporations
Centre, Road Town, Tortola, British Virgin Islands (“Buyer”),
|
|
(3)
|
TRUE PRODUCT ID
TECHNOLOGY LIMITED, a limited liability company organized under the
laws of Hong Kong with its registered office at Suite 1005, Allied Kajima
▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ (“Company”).
|
RECITALS
|
(A)
|
By
an agreement (“Agreement”) dated [Date of Asset Sale
Agreement] entered into between, among the others, the Seller and
the Buyer relating to the sale and purchase of, among
others, the entire issued share capital of the Company, the
Buyer has agreed to purchase the Purchased Assets (as defined in the
Agreement) on the terms and conditions therein
contained.
|
|
(B)
|
It
is a condition of completion of the Agreement that the Seller deliver to
the Buyer this Deed of Indemnity (“Deed”).
|
BY WHICH IT IS AGREED as
follows:
1. Definitions
and Interpretation
|
1.1
|
In
this Deed, unless the context requires
otherwise:
|
|
|
“Claim” includes any
assessment, notice, demand or other document issued or action taken by or
on behalf of the Inland Revenue Department of Hong Kong or any other
statutory or central, provincial, regional or local governmental authority
whatsoever in Hong Kong from which it appears that the Company
is liable or is sought to be made liable for any payment of any form of
Taxation or to be deprived of any Relief which Relief would, but for the
Claim, have been available to the
Company;
|
|
|
“Relief” includes any
relief, allowance, set-off or deduction in computing profits or credit or
right to repayment of Taxation available to the Company granted by or
pursuant to any legislation concerning or otherwise relating to
Taxation;
|
|
|
“Taxation” means:
|
|
|
(i)
|
any
liability to any form of taxation whenever created or imposed
by the Hong Kong authorities and without prejudice to the
generality of the foregoing includes profits tax, provisional profits tax,
salaries tax, individual income tax, property tax, capital duty, stamp
duty, payroll tax, withholding tax, franchise tax, business tax, rates,
customs and excise duties, business tax, and generally any tax,
duty, impost, levy or rate or any amount payable to the revenue, customs
or fiscal authorities in Hong Kong ;
and
|
|
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(ii)
|
all
costs, interest, penalties, surcharges, charges, fines and expenses
incidental or relating to the liability to taxation or the deprivation of
Relief or of a right to repayment of taxation which is the subject of the
indemnity given by the Seller pursuant to this Deed to the extent that the
same is/are payable or suffered by the
Company.
|
|
1.2
|
In
addition and without prejudice to Clause 1.1 words and expressions defined
in the Agreement shall, unless the context otherwise requires, have the
same meanings when used herein.
|
|
1.3
|
In
this Deed, unless otherwise stated, references to Clauses are to clauses
of this Deed, words importing the singular include the plural and vice
versa, words importing a gender include any gender and references to
persons include bodies corporate or
unincorporate.
|
|
1.4
|
Headings
are for convenience only and shall not affect the construction of this
Deed.
|
|
1.5
|
In
the event of any deprivation of any Relief, there shall be treated as an
amount of Taxation for which liability has arisen the amount of such
Relief multiplied by the relevant rates of Taxation in force in the period
or periods in respect of which Relief would have applied or (where the
rate has at the relevant time not been fixed) the last known rate and
assuming that such amount of Relief was capable of full utilisation by the
Company.
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2. Indemnity
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2.1
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Subject
as hereinafter provided, the Seller hereby covenants and agrees with the
Company and the Buyer that it will fully and effectually indemnify and at
all times keep fully and effectually indemnified the Company and the Buyer
from and against:
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(a)
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the
amount of any and all Taxation falling on the Company or the Buyer
resulting from or by reference to any income, profits, gains,
transactions, employment of personnel, events, matters or things earned,
accrued, received, entered into or occurring up to the Closing Date,
whether alone or in conjunction with any other circumstances whenever
occurring including without limitation any and all Taxation resulting
from:
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(i)
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the
receipt by the Company or the Buyer of any amounts paid by any of the
Seller under this Deed;
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(ii)
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any
dual/split employment arrangements between the Company and its
employees;
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(iii)
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any
expenses not related to the production of taxable profits (including
personal expenses of the Seller) being erroneously claimed as business
expenditure by the Company;
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(iv)
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any
under-reporting of taxable profits or revenues or business by the
Company;
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(v)
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any
under-reporting or withholding of individual income tax on employees of
the Company (including individual income tax as a result of dual/split
employment arrangements);
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(vi)
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any
under-payment of the social insurance (including but not limited to
insurance for pension, medical, housing, unemployment, workers' injury and
maternity) and housing fund allowance for the employees of the
Company;
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(vii)
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any
underpayment or under-reporting or withholding of the business tax and/or
corporate income tax and/or individual income tax by the Company in Hong
Kong;
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(viii)
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any
arrangements between the Company and other freight forwarders in any other
part of the world other than Hong Kong under which the Company has engaged
such agent or contractor to carry out the Company’s business in any other
part of the world other than Hong
Kong;
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(ix)
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any
penalties imposed on the Company by the relevant taxation authorities in
Hong Kong and the Inland Revenue Department of Hong Kong in relation to
the financial years from their respective date of commencement of business
to the Closing Date;
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(x)
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any
discrepancies or non-disclosure of amounts paid to any person employed by
the Company;
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(xi)
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the
adjustment of the pricing of any transaction between the Company and the
Affiliate of the Seller, including the withdrawal, removal or forfeiture
of any exemption or reduction from Taxation due to such pricing
adjustment;
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(xii)
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the
Company maintaining two sets of invoices or books of accounts (including
in respect of any fines imposed by any regulatory authorities);
and
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(b)
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any
and all costs (including all legal costs), expenses or other liabilities
which the Company or the Buyer may reasonably and properly incur in
connection with:
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(i)
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the
settlement in favour of the Company or the Buyer of any claim under this
Deed;
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(ii)
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any
legal proceedings in which the Buyer or the Company claims under or in
respect of this Deed and in respect of which judgment is given for the
Buyer or the Company; or
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(iii)
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the
enforcement of any such settlement or
judgment.
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2.2
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Any
payments under this Deed for which the Seller is liable shall be so
payable not later than on the following
dates:
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(a)
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if
the Taxation liability giving rise to a claim under this Deed involves an
actual payment of Taxation by the Company or the Buyer, five (5) working
days before the date on which that Taxation becomes due and payable to the
relevant Taxation authorities;
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(b)
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if
the Taxation liability giving rise to a claim under this Deed involves a
denial or loss in whole or in part of a Relief, the date falling five (5)
working days after the date when the Seller has been notified by either
the Company or the Buyer that the auditors for the time being of the
Company or the Buyer (as the case may be) have certified at the request of
the Buyer or the Company (as the case may be) that there has been such a
denial or loss of the whole or part of a Relief;
and
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(c)
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if
any costs become payable by the Company or the Buyer in connection with
any Taxation liability or any of the provisions of this Deed, no more than
five (5) working days before that the Company or the Buyer (as the case
may be) becomes liable to pay such
costs,
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and
the Seller further covenants with the Company and the Buyer
that it will pay (at the direction of the Buyer) to the Company
or the Buyer an amount equal to any loss, cost, expense or liability which
the Company or the Buyer may suffer or incur by reason of payment thereof
later than the date specified in this Clause 2.2 (it being acknowledged by
the Seller that payment of Taxation is not intended to take place until
after receipt of such funds and is to be effected by utilisation of the
same).
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2.3
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This
indemnity does not cover any Claim and the Seller shall be under no
liability under this Deed in respect of
Taxation:
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(a)
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to
the extent that provision is made for such Taxation in the Completion
Accounts; or
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(b)
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for
which the Company is primarily liable as a result of transactions in the
ordinary course of normal day to day trading operations since the Closing
Date; or
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(c)
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to
the extent that such Claim is recoverable under the warranties or under
the Agreement.
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3. Claims
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3.1
|
In
the event of any Claim arising, the Company or the Buyer (as the case may
be) shall, by way of covenant but not as a condition precedent to the
liability of the Seller hereunder, give or procure that notice thereof is
given, as soon as reasonably practicable, to the Seller and, as regards
any Claim, the Company or the Buyer (as the case may be) shall take such
action as the Seller may by notice reasonably require to cause the Claim
to be withdrawn, or to dispute, resist, appeal against, compromise or
defend the Claim and any determination in respect thereof, but subject to
the Company or the Buyer (as the case may be) being indemnified and
secured to its reasonable satisfaction by the Seller from and against any
and all losses, liabilities (including additional Taxation), damages,
interest, penalties, costs, surcharges, charges and expenses which may be
thereby sustained or incurred.
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3.2
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Without
the prior written approval of the Seller, the Buyer shall make no
settlement of any Claim nor agree any matter in the course of disputing
any Claim likely to affect the amount thereof or the future Taxation
liability of the Company.
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4. Payments
Free of Withholding, etc.
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4.1
|
All
payments made by the Seller under this Deed shall be made gross, free of
any right of counterclaim or set-off and without deduction or withholding
of any kind other than any deduction or withholding required by
law.
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4.2
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If
the Seller makes a deduction or withholding required by law from a payment
under this Deed, the sum due from the Seller shall be increased to the
extent necessary to ensure that, after the making of any deduction or
withholding, the recipient receives a sum equal to the sum it would have
received had no deduction or withholding been
made.
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4.3
|
If
a payment under Clause 2 or Clause 3 will be or has been subject to
Taxation, the Seller shall on demand from the recipient pay to the
recipient the amount (after taking into account Taxation payable in
respect of the amount) that will ensure that the recipient receives and
retains a net sum equal to the sum it would have received had the payment
not been subject to Taxation.
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5.
|
Refunds
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|
|
If,
after the Seller has made any payment pursuant to this Deed,
the Company or the Buyer shall receive a refund of all or part of the
relevant Taxation, the Company or the Buyer shall repay to the Seller
within 3 working days of receipt of such refund a sum corresponding to the
balance of the refund remaining after deducting the aggregate of (i) any
costs, charges and expenses of reasonable amount payable or sustained or
incurred by the Company and/or the Buyer in recovering such refund, and
(ii) the amount of any additional Taxation which may be suffered or
incurred by the Company or the Buyer in consequence of such
refund.
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6. Notices
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|
The
provisions of section 12.2 of the Agreement (mutatis mutandis) shall be
incorporated in and be deemed to be part of this
Deed.
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7. Binding
Effect
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This
Deed shall enure to the benefit of and be binding on each party and their
respective successors and assigns.
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8.
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Entirety
of Deed and Severability
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|
8.1
|
The
terms and conditions herein contained constitute the entire agreement
between the parties relating to the subject matter hereof and shall
supersede all previous communications, oral or written, between the
parties with respect to the subject matter hereof which are inconsistent
with the provisions of this Deed.
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8.2
|
Any
provision of this Deed prohibited by or unlawful or unenforceable under
any applicable law actually applied by any court of competent jurisdiction
shall, to the extent required by such law, be severed from this Deed and
rendered ineffective so far as is possible without modifying the remaining
provisions of this Deed. Where, however, the provisions of any
such applicable law may be waived, they are hereby waived by the parties
hereto to the full extent permitted by such law to the end that this Deed
shall be valid, binding and enforceable in accordance with its
terms.
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9.
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Amendment
|
|
|
This
Deed may be varied, amended or modified only by agreement under seal of
all parties.
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10.
|
Release
of Obligations
|
|
|
Any
liability of the Seller under this Deed may, in whole or in part, be
released, compounded or compromised by the Company and/or the Buyer, in
its/their sole and absolute discretion, and time or any other indulgence
may be granted to the Seller by the Company and/or the Buyer, in its/their
sole and absolute discretion, without in any way prejudicing or affecting
any of its/their other rights, powers or remedies against the Seller under
any other liability hereunder.
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11. Law and
Jurisdiction
|
|
This
Deed shall be governed by and construed in all respects in accordance with
the laws of Hong Kong and the parties irrevocably submit to the
non-exclusive jurisdiction of the Hong Kong courts in relation to any
proceedings arising out of or in connection with this Deed, but this Deed
may be enforced in any other courts of competent
jurisdiction.
|
EXECUTED by the parties as a
deed
|
SEALED
with the COMMON SEAL OF TRUE PRODUCT ID,
INC.
and SIGNED
BY
director, for and on its behalf
|
)
)
)
)
|
|
Witnessed/Verified
by
| Name: | |
| Title: |
|
SEALED
with the COMMON SEAL OF
SADDINGTON
LIMITED)
and
SIGNED by
director, for and on its behalf
|
)
)
)
)
|
|
Witnessed/Verified
by
| Name: | |
| Title: |
|
SEALED
with the COMMON SEAL OF
TRUE PRODUCT ID, TECHNOLOGY
LIMITED
and SIGNED
BY
director, for and on its behalf
|
)
)
)
)
)
|
|
Witnessed/Verified
by
| Name: | |
| Title: |