Exhibit 10.3
AGREEMENT
Made and entered into this 25 day of July 2001, by and between:
ISBAK AS. (ISTANBUL BELEDIYELER BAKIM ULASIM SAN. Ve TIC.
AS.), a company registered under the laws of Turkey with offices at 52 Cendere
Yolu, 80360 Kagithane, Istanbul, Turkey.
(hereinafter referred to as "ISBAK')
And
INKSURE Inc. a corporation with offices at 00 Xxxxxxxxxx Xxxxxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000, XXX.
(hereinafter referred to as "InkSure")
And
MTM GUVENLIK Ve HOLOGRAFIK KART SISTEMLERI AS., a company registered
under the laws of Turkey with offices at Teknoloji Gelistrime
Xxxxxxx X.X:00, 00000 Xxxxx-Xxxxxxx, Xxxxxx.
(hereinafter referred to as `MTM")
WHEREAS: InkSure engages in the development, production,
marketing and maintenance of machine readable secured
ink, the DA1000 ticket reader and other related
security printing and detection features and
technology (hereinafter "InkSure's Products"); and
WHEREAS: ISBAK engages in the transportation industry in
Turkey in general and in the city of Istanbul in
particular, including rendering services to the
public transportation markets therein; and
WHEREAS: MTM engages in the hologram industry and security
solutions representation in Turkey in general and in
the city of Istanbul in particular, including
rendering services to the public transportation
markets therein; and
WHEREAS: The municipality of the city of Istanbul via IETT
General Mudurlugu (IETT General Directorate) a
municipal public entity, with offices at Xxxx Xxx.
Metro Han 80050 Beyoglu, Istanbul, Turkey
(hereinafter: "the Customer"), has issued a tender
for the provision of a secured ticket system for
public transportation in the city of Istanbul,
including the provision of ticket readers for the
public buses in Istanbul and secured tickets
(hereinafter: "the Project"); and whereas: ISBAK has
submitted a bid for the tender, wherein it has
included InkSure's Products, and has been declared
winner of the tender and has signed a contract with
the Customer for the execution of the Project
(hereinafter: "the Prime Contract"); and
WHEREAS: ISBAK and Inksure have entered on July 25, 2001 into a
Distribution Agreement attached herewith with as Annex A,
wherein InkSure has the right to terminate the
Distribution Agreement if ISBAK is not awarded the Prime
Contract and/or if InkSure is not awarded the subcontract
in respect of the Project, within six months from the date
of execution of the Distribution Agreement and such
Distribution Agreement shall not apply to, include or
effect the transaction contemplated herein; and
WHEREAS: InkSure and MTM have agreed to provide certain
services and deliverables to ISBAK, for provision by
ISBAK to the Customer as part of the Project, under
the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, it is
hereby agreed as follows:
1. DEFINITIONS
1.1 In this Agreement the following worth and expressions shall have
the meaning hereby assigned to tSn except where the context
otherwise requires:
"Agreement" shall mean this agreement, its preamble and all Annexes to
this agreement.
"Authentication System" shall mean InkSure's DA1000 module of a reader
used for the detection of the Ink Coding Substance.
"Bus Ticket Reader System" shall mean a device manufactured by a
Subcontractor for the purpose of being used by public transportation
vehicles, able to read the Tickets and recognize their authenticity, by
utilizing the Authentication System embedded therein.
"Ink Coding Substance" shall mean InkSure's concentrated ink mixture
that embeds a specific coding substance, to be mixed, diluted and
integrated into the ink used for the printing of Tickets, readable by
the Authentication System.
"Subcontractor" shall mean any service or product provider,
subcontractor or agent, acting in respect of the Project, as
subcontractor to, service or product provider for or on behalf of
ISBAK, in charge of manufacturing, producing and delivering the Bus
Ticket Reader System, including, inter alia, its installation on buses,
future maintenance, service and customer support, instructions in
respect of its operation, production of a manual or user guide,
warranty, customization and adjustments pursuant to specifications by
the Customer.
"Party" shall mean any of ISBAK, InkSure or MTM and "Parties" shall
mean all of ISBAK, InkSure and MFM.
"Printing Process" shall mean the installation of the devices and
equipment used for the printing of the Tickets, the mixing, dilution
and integration of the Ink Coding Substance with the ink used for the
printing of the Tickets and the actual printing of the Tickets.
"Tickets" the bus tickets to be printed as part of the Project, by
using ink that includes the Ink Coding Substance, that can be read by
the Bus Ticket Reader System.
2. SCOPE OF WORK
2.1 ISBAK shall be in charge of the coordination and synchronization of all
parties involved with the Project including without limitation all
Subcontractors, and shall direct, coordinate and supervise all activity
with respect to this Agreement and the Prime Contract Any and all
communications with the Customer, in respect of the Project, shall be
done by ISBAK. If any communications are initiated by the Customer
directly with InkSure and/or MTM, then InkSure and/or MTM,
respectively, shall, if practicable, coordinate with ISBAK prior to
answering such communications.
2.2 ISBAK shall secure, perform, execute and deliver the following
(hereinafter referred to as "ISBAK's Share of the Work"):
2.2.1 ISBAK shall print the Tickets, at its premises, guarantee the
security, safeguard and integrity of the Printing Process
including the setting of procedures on how to secure the Ink
Coding Substance (such procedures shall not fall below the
level and qualities of any of InkSure's specifications in
respect of same), hear and abide MTM's Representative in
respect of the Printing Process and secure, safeguard and
store the Tickets and all Ink Coding Substance that has not
been used, until delivery to the Customer or the usage of all
the Ink Coding Substance respectively. InkSure shall have the
right, at its sole discretion, to participate in all or any
actions taken in respect of the Printing Process.
2.2.2 ISBAK shall carry cut a quality control procedure in respect
of the Tickets, such procedure shall not fall below the level
and qualities of any procedures specified by InkSure,
including, without limitation, the actual verification of each
Ticket and ensuring each Ticket can be recognized and read by
the Bus Ticket Reader System (hereinafter "the QA Procedure").
MTM shall supervise the QA Procedure, and ISBAK shall
implement and follow its instructions on all matters
concerning the QA Procedure.
2.2.3 ISBAK shall secure the diligent performance of any and all of
its Subcontractors or any other party on its behalf in respect
of the Project, including their performance of all duties and
obligations and their signing of a Non Disclosure Agreement.
ISBAK undertakes to secure that its Subcontractor assembles
and manufactures the Bus Ticket Reader System in accordance
with InkSure's specifications and the Electronic and
Mechanical Configuration, as such term is defined in Annex B
to this Agreement.
2.2.4 ISBAK shall import the Authentication System into Turkey and
ensure its safe delivery and storing until its installation in
the Bus Ticket Reader System All costs in respect of importing
the Authentication System shall be borne by ISBAK.
2.3 InkSure shall provide ISBAK, in accordance with the terms and
conditions of this Agreement, the following deliverables
(hereinafter referred to as "InkSure's Share of the Work"):
2.3.1 up to 2700 units of the Authentication System,
supplied according to the schedule and quantities
set forth in Annex C to this Agreement;
2.3.2 a quantity of Ink Coding Substance that shall be
sufficient for the printing of one hundred million
(100,000,000) Tickets, supplied according to the
schedule and quantities set forth in Annex C to this
Agreement.
2.4 MTM shall provide ISBAK, in accordance with the terms and
conditions of this Agreement, the following services
(hereinafter referred to as "MTM's a Share of the Work"):
2.4.1 MTM shall import the Ink Coding Substance into Turkey
and ensure its safe delivery to ISBAK's possession at
the location in which the Printing Process shall take
place. All costs in respect of importing the Ink
Coding Substance shall be borne by MTM. The Parties
hereby acknowledge that ISBAK shall have the right to
import the Ink Coding Substance instead of MTM if
ISBAK and MTM agree in writing to such change, and
ISBAK shall notify InkSure in writing on such change.
In the event ISBAK replaces MTM as aforementioned it
shall be liable to any and all liabilities and
obligations in respect of the importing of the Ink
Coding Substance and shall bare all costs in respect
thereof.
2.4.2 MTM shall coordinate and supervise the Printing
Process, including, inter alia, the notification to
the Parties of any action taken in respect of the
Printing Process a reasonable time before such action
is taken. MTM shall coordinate with all parties
hereto and any other third party needed for the
execution of all or part of the Printing Process. The
Printing Process shall be done, at all times,
according to specific instructions given by MTM, for
the purpose of complying with InkSure's
specifications.
2.4.3 MTM shall provide for a representative, on its
behalf, during all stages of a Printing Process
taking place (hereinafter: "MTM's Representative").
MTM's Representative shall oversee and supervise, in
person, at all times, all the stages of the Printing
Process and shall instruct all parties involved in
the Printing Process, according to InkSure's
specifications, on the manner in which the Ink Coding
Substance should be mixed, diluted and integrated
with the ink used in the process of printing the
Tickets. MTM's Representative shall instruct ISBAK,
and ISBAK shall implement and follow his
instructions, on all matters concerning the security
and safeguard of the Priming Process, including the
safekeeping of the Tickets before they are supplied
to the Customer. MTM's Representative shall verify
that the security procedures taken in respect of the
Printing Process and the safekeeping of the Tickets
do not fall below the level and qualities of any
procedures specified by InkSure.
3. PRINCIPLES OF COOPERATION
3.1 InkSure shall be solely responsible for InkSure's Share of the Work and
shall provide its respective supplies and services according to the
terms and conditions contained herein. MTM shall be solely responsible
for MTM's Share of the Work and shall provide its respective supplies
and services according to the terms and conditions contained herein.
ISBAK shall be responsible for ISBAK's Share of the Work and any work,
service and/or product supplied by any Subcontractor, and shall provide
its respective supplies and services according to the terms and
conditions contained herein.
3.2 The Parties shall cooperate together in good faith to achieve the terms
of this Agreement, in particular, no Party shall act to the detriment
of another Party. The Parties shall assist each other to the best of
their abilities and protect each other's interest in respect of third
parties.
3.3 Each Party shall immediately inform the other Party of any matter of
which it learns, or is aware of, and which may affect the performance
of this Agreement or any Party's Share of the Work.
3.4 Each Party shall appoint a project manager who shall be fully
responsible for coordinating the activities of such Party under this
Agreement. All correspondence between the Parties shall be made, in
addition to any other way, via the project managers.
3.5 All Parties personnel involved in the Project and ISBAK shall ensure
that any and all Subcontractor's personnel, shall be fully qualified
with suitable training, experience and skill to perform their duties.
ISBAK shall secure and guarantee the integrity of all personnel
involved with the Printing Process and the delivery of the Tickets, and
their skill, experience and training. ISBAK shall remove and replace
personnel deemed unacceptable by InkSure upon receiving notice from
InkSure.
3.6 The Parties shall determine, in writing, the form and method that each
respectful Party's trade xxxx and trade name shall be applied to the
Bus Ticket Reader System.
4. FIRST STAGE
The Parties shall coordinate to implement the first stage of
installation of Bus Ticket Reader System, printing of Tickets and the
examination and analyses of results of the first installation, all as
set forth in Annex D to this Agreement.
5. CHANGES
In the event that ISBAK wishes to accept and agree to amendments,
changes or supplements in respect of the Project, requested by the
Customer, which night involve expense, disadvantage, change in status
or effect InkSure in any other manner, ISBAK shall not be entitled to
do so without the prior written consent of InkSure. If ISBAK fails to
comply with this Section 5.1, InkSure, without prejudice to its other
rights, shall not be bound by such amendments, changes or supplements.
6. PAYMENT
6.1 ISBAK shall pay InkSure for InkSure's Share of the Work the prices, and
in the manner, set forth in Annex C to this Agreement.
6.2 InkSure shall submit to ISBAK such invoices or other documents as ISBAK
may reasonably require for the purpose of making payment.
6.3 The prices set forth in this Agreement and in Annex C to this Agreement
to be paid to InkSure are exclusive of any tax, levies or duties. Any
taxes, levies or duties shall be borne by ISBAK, and ISBAK shall
promptly reimburse InkSure for any such taxes, levies or duties it
incurs in connection with its performance of this Agreement. Any
payment made by ISBAK pursuant to this Agreement shall be gross.
6.4 The prices for the Authentication System shall include the earlier of:
(a) a one year warranty from the day the Authentication System was
installed in the Bus Ticket Reader System, or (b) a fifteen (15) month
warranty from the date of delivery of the Authentication System (the
"Warranty Period"), provided by InkSure, according to the terms and
conditions of the warranty set forth in Annex E to this Agreement. In
the event ISBAK shall request from InkSure to extend the Warranty
Period, ISBAK shall pay InkSure a sum of fifteen United States Dollars
($15) per each year exceeding the Warranty Period in respect of one
Authentication System unit.
6.5 ISBAK undertakes to purchase from InkSure, each year, beginning at the
second anniversary from the date of execution of this Agreement, a
quantity of Ink Coding Substance, sufficient for the printing of at
least thirty million (30,000,000) Tickets, and any and all purchase
shall be covered by an irrevocable confirmed documentary credit(i.e. -
letter of credit) to the benefit of InkSure in respect of such purchase
and each purchase order of Ink Coding Substance shall be for a quantity
sufficient for the printing of at least thirty million (30,000,000)
Tickets.
7. LIMITATION OF LIABILITY
7.1 InkSure shall be liable to ISBAK, solely for direct damages which it or
its employees cause to ISBAK in respect of InkSure's Share of Work
subject to the liability limitation set forth hereinafter.
7.2 IN NO EVENT SHALL INKSURE OR ITS RESPECTIVE DIRECTORS, OFFICERS,
SHAREHOLDERS, EMPLOYEES OR AGENTS, BE LIABLE FOR INDIRECT,
CONSEQUENTIAL, INCIDENTAL, SPECIAL PUNITIVE OR EXEMPLARY DAMAGES
HOWSOEVER CAUSED OR ARISING UNDER THIS AGREEMENT. THE TOTAL CUMULATIVE
LIABILITY UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY
DAMAGES, OR INDEMNIFICATIONS OF COSTS AND EXPENSES BORNE BY ISBAK AS A
RESULT OF THIS AGREEMENT SHALL NOT EXCEED THE TOTAL AMOUNT PAID TO
INKSURE UNDER THIS AGREEMENT. THIS LIMITATION AND EXCLUSION OF
LIABILITY SHALL APPLY REGARDLESS OF WHETHER THE LIABILITY CLAIM IS
BASED ON BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT
LIABILITY, TORT OR OTHER LEGAL THEORY AND SHALL ALSO APPLY FOR THE
BENEFIT OF SHAREHOLDERS, EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS OF
INKSURE.
8. SECURITY
8.1 Subject to Section 8.2 hereinafter, and for the purpose of guaranteeing
the performance of the Authentication System and Ink Coding Substance
combined, in respect of their ability to secure the Tickets, for the
period of this Agreement, InkSure hereby provided ISBAK with a
performance bond, in an amount of seven hundred thousand US Dollars
($700,000) (hereafter: "the Performance Bond"). InkSure shall have an
insurance issued in respect of the Performance Bond, the policy of such
insurance shall be in the form attached hereto as Annex F, approved by
LLOYDS (being an insurance group that is rated as set out in Annex G to
this Agreement), or any other insurance policy ISBAK and InkSure agree
upon (hereinafter the "Insurance Bond"). InkSure shall secure that an
Insurance Bond shall stay in effect for the duration of this Agreement.
8.2 The Performance Bond shall be vested, and come to effect, only if and
when all the following terms have been met:
8.2.1 When used in the Project, the Authentication System has
positively verified bus tickets that are not part of the
genuine Tickets (hereinafter: "Unauthorized Tickets"), and the
Parties have replaced, twice, the Authentication System codes
and thereafter the said tickets (the Unauthorized Tickets)
have been tested and verified using the Authentication System
after the codes thereof have been replaced, and the positive
verification of such Unauthorized Tickets reoccurred after
each replacement and in both cases, indicating that InkSure's
Authentication System's technology is inadequate.
8.2.2 The Unauthorized Tickets are not the outcome of any illegal
use of the Bus Ticket Reader System, Authentication System,
the Ink Coding Substance or the Tickets, or the misuse of any
of the foregoing, and not the outcome of a breach of any of
the terms and conditions contained herein.
8.2.3 The Unauthorized Tickets are not the outcome of a statistical
deviation that the Parties acknowledge may occur, and such
Unauthorized Tickets have the quality of being reproduced, so
long as such reproduction has not been made by any entity
whose occupation and/or profession is in the production of
such Unauthorized Tickets and no other apparatus similar to
the Authentication System is able to detect them.
9. CONFIDENTIALITY
In addition to the Reciprocal Confidentiality Agreement dated July 25,
2001, which is made part of this Agreement as Annex H, the following
stipulations shall rule:
9.1 the Parties hereby undertake to keep confidential all information
disclosed by a Party to another Party, including, but not limited to,
technical information, data, writings, Know-how, computer programs and
software code, patents, inventions, procedures, methods, designs,
pricing and marketing plans, information embodied in the Authentication
System and the Ink Coding Substance, any other trade secrets and any
other material that the confidential nature of which can be assumed on
the basis of the circumstances of its disclosure or its contents, in
any media or form whatsoever including on magnetic media, or by oral,
visual or other means ("Confidential Information"). The parties shall
exercise means to protect the Confidential Information and prevent any
unauthorized disclosure thereof, using the same degree of care, but no
less than a reasonable degree of care, as it exercises with its own
Confidential Information. Confidential Information shall not include
information that: (a) is at the time of disclosure, or thereafter
becomes, a part of the public domain without breath of this Agreement
by the Party receiving such information (provided, however, that the
act of copyrighting shall not cause or be construed as causing the
copyrighted materials to be in the public domain); (b) is lawfully in
the possession of the receiving Party prior to disclosure by the
disclosing Party as shown by written records; (c) is lawfully disclosed
to a Party by a third party which did not acquire the same under an
obligation of confidentiality to the disclosing Party; (d) is
independently developed by the receiving Party without use of the
disclosing Party's proprietary or confidential information. This
Section 9 shall survive termination of this Agreement.
9.2 ISBAK shall secure that each Subcontractor signs a Non Disclosure
Agreement similar to the Reciprocal Confidentiality Agreement set forth
in Annex H or a different Non Disclosure Agreement as shall be
determined by InkSure, where the commitment of confidentiality is
toward InkSure. ISBAK shall not involve any Subcontractor in the
Project before such Subcontractor has signed the aforementioned Non
Disclosure Agreement and an original copy of the signed Non Disclosure
Agreement is sent to and received by InkSure.
10. INTELLECTUAL PROPERTY RIGHTS
10.1 The Parties recognize and acknowledge that all proprietary information
regarding the Authentication System and the Ink Coding Substance,
including, without limitation, technical information, product
components, know-how, trade secrets, marketing and manufacturing
rights, software and hardware, all computer programs and documentation
and any other material provided or developed by or for InkSure in
connection with or in the course of this Agreement shall belong to
InkSure alone, unless otherwise is specifically agreed beforehand in
writing.
10.2 Each Party agrees to cooperate with and assist each of the other
Parties at the other party's expense, in the protection of trademarks,
patents, copyrights or other intellectual rights owned by the other
Party and shall inform the other Party immediately of any infringement
or other improper action with respect to such trademarks, patents,
copyrights or other intellectual property that shall come to the
attention of the first Party.
10.3 No Party shall directly or indirectly use any of the other Parties'
trademarks, trade names or part thereof, or any xxxx or name
confusingly similar thereto, as part of its corporate or business name
or in any other manner without the other Party's prior written consent.
11. TERM OF THE AGREEMENT
This Agreement shall become effective from the date of its execution by
all Parties, and shall continue in full force arid effect for a period
of five (5) years, unless earlier terminated as provided in Section 12
below. Nevertheless, the Parties shall commence performance of this
Agreement only ten (10) days from the date hereof
12. TERMINATION
12.1 Upon the occurrence of any of the following events with respect to any
Party the other Parties shall be allowed to terminate the Agreement,
effective immediately, by written notice to the other Parties:
(a) If a Party commits a breach of or fails to perform or observe
any agreement, condition, obligation or duty herein contained
and such breach or failure to perform or observe is not cured
within fifteen (15) days after receipt of notice of such
breach, failure to perform or observe from another Party;
(b) If a Party becomes insolvent or bankrupt, voluntarily or
involuntarily, or makes a general assignment for the benefit
of its creditors or if bankruptcy or insolvency proceedings
are commenced against such Party or a receiver for a
substantial portion of its assets is appointed and such
proceedings are not dismissed or appointment is not discharged
within thirty (30) days thereafter.
12.2 InkSure shall be allowed to terminate this Agreement, effective
immediately, in the event there should occur any change in the control
of ISBAK or if ISBAK merges or otherwise combines with any entity that
manufactures, develops or offers for sale any product that is directly
or indirectly competitive with the Authentication System or the Ink
Coding Substance.
12.3 InkSure shall be allowed to terminate this Agreement, effective
immediately, at its sole discretion, in the event that ISBAK breached
its obligation of purchasing the minimum quota specified in Section 6.5
above or if an irrevocable confirmed documentary credit (i.e. - letter
of credit) to the benefit of InkSure has not been open is respect of
any or all ISBAK's obligations as aforementioned.
12.4 The expiration or termination of this Agreement shall not prejudice any
rights or obligations of any Party accrued up to and including the date
of expiration or termination.
12.5 Termination of this Agreement pursuant to this Section shall not
prejudice other remedies, if any, available to the terminating Party
under this Agreement or applicable law.
12.6 The provisions contained in Sections 7, 9 and 10 shall survive
expiration or termination for whatever reason of this Agreement
13. INABILITY TO PERFORM (FORCE MAJEURE)
Neither Party shall be responsible to the other for loss or damage
caused by the non-delivery, non-acceptance or non-fulfillment of any of
its obligations under this Agreement resulting from circumstances
beyond its control, including, but not limited to, war, invasion, act
of foreign enemy, whether war be declared or not, hostile action, civil
war, rebellion, civil strife, sabotage, strikes, industrial disputes,
plant or installation breakdown of a major nature, breakdown of
equipment, judicial proceedings, act of government or acts of God (any
of all of which are in this Agreement referred to as "Force Majeure");
provided always that neither Party shall be required to settle any
labor dispute on terms contrary to its wishes, nor test the validity of
any law, regulation, decree or order by way of legal proceedings. If
any Party is prevented from carrying out all or any of its obligations,
then upon the occurrence of any such circumstance the Party affected
shall notify the others in writing within seventy two (72) hours of the
occurrence and the likely duration thereof and shall further notify the
other Parties promptly of the cessation of the occurrence. In the event
that the Force Majeure Event remains in respect of one Party in effect
for a period exceeding one hundred days, the other Parties may
terminate this Agreement by a written notice to that effect sent to the
Party incurring the Force Majeure and the other Party. Nothing
contained in this Section shall release a Party from any payment
obligation hereunder.
14. MISCELLANEOUS
14.1 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties pertaining to the subject-matter hereof; embodies
all terms binding upon the Parties in respect thereof and supersedes
all prior agreements, understandings and negotiations, xxxxxx written
or oral. No Party to this Agreement shall be liable or bound in any
manner by prior or contemporaneous, express or implied, representation,
warranty, statement, promise, covenant or agreement pertaining to the
subject-matter hereof made by, or on behalf of, any Party hereto,
unless same is expressly and specifically set forth or referred to
herein.
14.2 Amendments, Waivers, Discharge and Consents. No amendment, consensual
cancellation, change or modification of this Agreement or any of the
provisions, terms or conditions hereof; no waiver of a right, remedy,
privilege or power, or discharge of an obligation or liability,
conferred upon, vested in or imposed on any Party under or pursuant to
this Agreement; and no consent to any act or omission pertaining
hereto, shall come into operation and be effective, unless duly
embodied in a written instrument signed by, or on behalf of, the Party
against whom such amendment, change, modification, waiver, discharge or
consent is asserted or sought.
Failure to exercise, and no delay in exercising, any right, remedy,
privilege or power under or pursuant to this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise of any such
right, remedy, privilege or power preclude any other or failure to
exercise thereof or the exercise of any other right, remedy, privilege
or power; nor shall a waiver in any one instance be deemed or construed
as a waiver in any other, past or future, instance.
14.3 Partial Invalidity or Unenforceability. If any provision of this
Agreement is held to be invalid or unenforceable, such invalidity or
unenforceability shall not invalidate this Agreement as a whole, but
this Agreement shall be construed as though it did not contain the
particular provision held to be invalid or unenforceable, and the
rights and obligations of the parties shall be construed and enforced
only to such extent as shall be permitted by law.
14.4 Non-Assignability. Neither this Agreement as a whole, nor any right or
obligation hereunder, shall be assignable by any Party without the
prior written consent of the other Parties provided, however, that
lnkSure may assign this Agreement to any entity which controls, is
controlled by or is under common control with, directly or indirectly,
InkSure. In the event MTM is no longer a Party to this Agreement, for
whatever reason, or is no longer able to execute its obligations under
this Agreement, InkSure shall have the discretion of replacing MTM by
itself and/or by a third party on its behalf.
14.5 Expenses. Any party shall bear its own expenses in connection with the
negotiation and execution of this Agreement. Stamp tax imposed on this
Agreement, if imposed, shall be borne by the Parties in equal shares.
14.6 Headings; Preamble & Exhibits. This section and other headings
contained in this Agreement are for convenience only and should not
constitute matters to be considered in interpreting this Agreement. The
preamble and Annexes to this Agreement constitute an integral part of
this Agreement and should be construed as an inseparable part hereof.
14.7 Governing Law and Venue. Any rules of choice of law or venue to the
contrary notwithstanding, (a) this Agreement shall be governed by, and
construed in accordance with, the laws of England and (b) any original
suit, action or other legal proceeding by either party against the
other shall be brought before, and only before, a court of competent
jurisdiction sitting in London.
14.8 Independent Entities. It is understood and agreed that no Party is,
shall be considered to be or shall represent itself as, a partner,
agent, employee or joint venturer of another Party for any purpose
whatsoever. Nothing contained in this Agreement shall be construed as
creating an agency, partnership, employment or joint venture
relationship among the Parties No Party has or shall have any authority
to make any agreement or commitment for any respective other Party, nor
to incur any liability or obligation in any other Party's name or on
its behalf.
14.9 Notices. All notices and other communications required or permitted to
be given under this Agreement shall be in the English language, in
writing and shall be deemed to have been duly given and received (a)
seventy two (72) hours after they have been deposited in the mail,
postage prepaid for registered airmail and addressed to the addressee
at its address as hereinafter written, or at such other address as it
shall have specified by written notice to the other Parties, together
with same communication being sent by fax or e-mail and when receipt
acknowledged, or (b) at the time delivered, if delivered by hand
(including by courier).
If to ISBAK
ISBAK A. S.
Cendere Yolu No: 52
80360 Kagithane - ISTANBUL
Turkey
Fax No.: + 00 000 000 0000
Tel. No.: x000000000000
If to INKSURE
InkSure Inc.
00 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
XXX
Fax No.: x0 000 0000000
Tel. No.:+ 0000 0000000
If to MTM
[ADDRESS OF MTM]
14.10 Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be one and the same
instrument.
14.11 Signatory Rights. The Parties respective signatory rights are as set
forth in Annex I to this Agreement.
IN WITNESS WHEREOF, the Parties hereto executed this Agreement as of the day
first above written.
ISBAK A.S. InkSure Inc.
By: /S/ Xxxxx Xxxxx By: /S/Xxx Peer
------------------------- ---------------------
Name: Xxxxx Xxxxx Name: Xxx Peer
Title: General Manager Title: CEO
MTM
By: /S/ Ilfud Sarllmaz
-----------------------------
Name: Ilfud Sarllmaz
Title: Sales Manager
ANNEX A
EXCLUSIVE DISTRIBUTION AGREEMENT
Made and entered into this 25 day of July, 2001
By and Between
InkSure Inc. (hereinafter referred to as "InkSure")
And:
ISBAK A.S. (ISTANBUL BELEDIYELER BAKIM ULASIM SAN. Ve TIC.
A.S., a company registered and incorporated under the laws of Turkey
(hereinafter referred to as "Distributor")
WITNESSES:
Whereas: InkSure has developed the DA1000 ticket reader, DA2000 and RDA
2000 and associate marking/coded ink technology (hereinafter
referred to as "the Products"); and
Whereas: Distributor is desirous of distributing the Products in the
Territory; and
Whereas: Distributor is acquainted with the market for the Products in
the Territory, including the competition therein, has
sufficient facilities, resources and personnel to adequately
market the Products in the Territory and to fulfill its
obligations hereunder and is not precluded by any existing
arrangements, contractual or otherwise, from entering into
this Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Preamble
1.1 The Preamble to this agreement constitutes an integral part hereof.
1.2 Any appendix attached to this Agreement constitutes an integral part
hereof however, in the event of any inconsistency between the
provisions of this Agreement and the provisions of any such appendix,
the former shall govern and prevail.
2. Definitions
In this Agreement the following terms shall have the meaning ascribed
thereto in this Clause 2.
InkSure InkSure Inc.
Distributor ISBAK AS.
Documentation materials in printed form prepared by InkSure
to enable and facilitate the use of the
Products by End Users.
Products I. machine readable ink system based on
coded inks establishing a characteristic
signature, wherein such characteristic
signature of the inks may be verified by
visual observation or machine detection when
excited by an external source., such as
InkSure's DA1000 ticket reader, DA2000 and
RDA2000. 2. "InkSure Proprietary Inks" shall
mean coded inks which when printed exhibit
characteristic visible or Invisible
signatures, wherein such characteristic
signature of the inks may be verified by
visual observation or machine detection when
excited by an external source.
End User A customer who purchased the Products from
the Distributor.
Territory The territory of the country of Turkey,
Iraq, Azarbaijan, Turkedistan, Uzbekistan,
Bulgaria, Slovenia, Croatia, Yugoslavia,
Macedonia, Bosnia, Albania, Kazachstan,
Syria, Russia, Ukraine, Lebanon, Jordan,
Dubai, the United Arab Emirates, Saudi
Arabia, Armenia, Romania, Iran.
3. Grant of Rights
Subject to the terms and conditions contained in this Agreement,
InkSure hereby grants to Distributor, and Distributor hereby accepts,
for the term of this Agreement as specified in Clause 4 below:
An exclusive, non-transferable license to promote and market the
Products for use in the mass/public transportation in the Territory.
4. Term of Agreement
This Agreement shall become effective on the date executed by the
parties hereto (the "Commencement Date") and, unless earlier terminated
pursuant to Clause 11 hereof, shall continue in full force for a period
of 3 years (the "Initial Term") and will be automatically extended for
additional successive one (1) year periods unless either party informed
the other in writing, 30 days prior to the last day of the then current
term of the Agreement that it does not wish to extend the term of the
Agreement.
5. InkSure's Duties
InkSure shall provide (directly or through others) installations,
training, technical support and after sales support of the Products for
all End Users in the Territory, subject to and in according with the
terms and conditions of a valid support agreement between InkSure, or
anyone on its behalf, and the End User.
6. Distributor's Duties
6.1 Distributor shall use its best efforts to market and promote the
Products in the Territory. Such efforts shall include, but not be
limited to, the following:
a. Distributor shall at its own expense establish a fully trained,
adequate and competent sales team, consisting of at least one
(1) professional sales person with substantial experience in
selling products for transportation. Each Sales person will sign
the NDA.
b. Distributor shall advertise the Products at its own expense,
shall exhibit the Products at relevant trade shows and
exhibitions and shall promote the sale of the Products by means
of direct marketing, demonstrations, mailers, seminars, etc., as
deemed appropriate by InkSure from time to time.
c. All promotions and Documentation of the Products shall be
identified by InkSure's name and/or trademark. Distributor is
allowed to add its name alongside that of InkSure, provided that
(i) it will be clearly indicated thereon that Distributor is
only a distributor of the Products, and (ii) the adding of
Distributor name would not be likely to cause confusion as to
the ownership of proprietary rights in the Products.
d. All persons engaged by Distributor in the performance of its
tasks hereunder, including, without limitation, marketing and
sales people, will be reasonably fluent in speaking and writing
English.
6.2 Distributor shall obtain InkSure's prior written approval for proposals
containing changes in the standard Products functional specifications.
6.3 Distributor shall, at its expense, obtain all governmental and/or other
consents and approvals of local authorities required to enable the
distribution, marketing and use of the Products in the Territory.
6.4 Distributor shall:
a. Preserve at all times the proprietary, intellectual and other
legal rights of InkSure in the Products and Documentation as
well as the confidentiality of InkSure's trade secrets,
including, without limitation, the terms of this Agreement -
this duty shall survive the termination of this Agreement and
shall remain valid indefinitely. No information shall be
considered confidential if it is generally available or
becomes known to the public other than through Distributor's
breach of the Agreement.
b. In all correspondence and other dealings relating directly or
indirectly to the licensing or other transactions with respect
to the Products, clearly indicate that it is acting as
Distributor and not as author or developer of the Products.
c. Not incur any liability on behalf of InkSure or in any way
pledge or purport to pledge InkSure's credit or purport to
make any contract binding upon InkSure, unless specifically
authorized in writing by InkSure.
d. Immediately bring to the attention of InkSure improper or
wrongful use of the Products, Documentation, trademarks,
emblems, designs, models or other similar industrial,
intellectual or commercial property rights which come to the
attention of Distributor; use every effort to safeguard the
proprietary rights and interests of InkSure and, at the
request and cost of lnkSure, take all steps required by
InkSure to defend such rights.
6.5 Distributor will not make, or allow any third party to make, any changes
or modifications to the Products, except in accordance with this
Agreement. Distributor shall not be entitled to duplicate the Products,
nor shall it allow any third party to duplicate the Products, without
InkSure's prior written consent. Distributor shall not be entitled to
receive the source code or the master copy of the Products, which shall
remain in lnkSure's possession. All rights and title with respect to the
Products shall remain at all times vested in InkSure.
6.6 Distributor shall not appoint any sub-distributors, representatives or
agents for the marketing or sale of the Products without InkSure's
prior written consent. Without derogating from the foregoing, any
agreement with such sub-distributor, representative or agent shall
reflect the terms of this Agreement.
6.7 Distributor shall refrain from seeking any customers for the Products
outside the Territory and from effecting any arrangement with a
customer in the Territory knowing that such customer intends to
transfer, or otherwise make available the use of, the Product, or any
part thereof, outside the Territory.
6.8 Distributor acknowledges and agrees that InkSure shall have
unrestricted rights to communicate directly with End Users in the
Territory, visit them and refer any customers, potential customers and
any other persons it may deem fit to such End Users.
7. Ordering Procedure
7.1 Distributor shall place with InkSure a written order for each Product
for which Distributor has secured an End User customer with all
pertinent details concerning such customer and the contemplated
transaction (the "Order")
7.2 Each Order shall be secured by a valid letter of credit issued by an
AAA US or Western Europe bank. An Order is subject to acceptance by
InkSure.
7.3 InkSure shall provide Distributor with the Products ordered and
accepted, provided that such products shall not be given to the End User
until a non disclosure agreement (including provisions concerning
lnkSure's right to supervise the printing of documents and/or tickets)
is signed by the End User and InkSure or its duly authorized
representative.
7.4 All sales shall be made C.I.F. ISTANBUL, Turkey (unless mention other
in the quotation)
8. Price and Payments
8.1 For each Product ordered by and delivered to Distributor or its End
User customer, Distributor shall pay to InkSure, against documents, a
sum of to be agreed between the parties, on a case-by-case basis. Such
payment shall be made regardless of the price which is paid or payable
by the End User for the Product.
8.2 The parties hereby agree that neither one of them shall be entitled to
withhold payment of any amounts due to the other on the basis of a
dispute or a counter claim.
8.3 End User prices for the Products will be inform by the distributor
to InkSure.
8.4 Without derogating from any other remedies which may be available to
lnkSure under law and/or under this Agreement, Distributor shall pay
interest to InkSure at the rate of five percent (5%) per annum over the
prime rate prevailing at Chase Manhattan Bank (USA) in respect of all
moneys the payment of which is overdue.
9. Taxes
Distributor shall be solely responsible for the payment of all taxes
payable to authorities in the Territory as a result of or in connection
with this Agreement, including, but not limited to, import duties,
excise taxes, value added taxes, sales taxes and income tax.
10. Force Majeure
A party shall not be held liable for any delay in the execution of its
obligations under this Agreement for reasons beyond its reasonable
control.
11. Termination
11.1 Termination of this Agreement may be effected as follows:
a. by either party effective immediately upon written notice to
the other party, in the event that the other party shall
become insolvent or bankrupt, discontinue business or adopt a
resolution providing for its dissolution or liquidation.
b. by either party upon written notice to the other party, if the
other party shall breach the Agreement and not remedy such
breach, where it is capable of being remedied, within ten (10)
days, in case of a material breach, or within thirty (30) days
in case of any other breach; or
c. by InkSure, upon written notice to the Distributor, if the
Distributor is not awarded the prime contract and/or if
InkSure is not awarded the subcontract in respect of the
Istanbul authentication bus ticket system, within six month
from the date of this Agreement.
11.2 If this Agreement expires or terminates for any reason whatsoever the
following provisions shall apply:
a. Immediately upon expiration or termination of this Agreement,
Distributor shall cease to solicit orders for the Products and
to use in any connection any of the InkSure names trademarks
or logos, whether or not such use was previously authorized by
InkSure.
b. InkSure shall deliver the Products covered by Orders which
shall have been actually received and accepted by InkSure
prior to the effective date of expiration or termination.
c. Distributor shall return all documents and materials and all
copies thereof which are of a confidential nature, including
all copies thereof, in Distributor's possession or control,
within forty-five (45) days after the effective date of
expiration or termination.
d. Distributor shall take any additional actions which may be
required by lnkSure to assure the uninterrupted transition of
the activities relating to the Products in the Territory.
11.3 The expiration or termination of this Agreement for any reason shall
not prejudice any rights or obligations of either of the parties
accrued up to and including the date of expiration or termination;
12. Non-Competition
12.1 Distributor agrees that during the term of this Agreement ("the
Non-Competition Period") it will not promote or offer to any third
party in any manner any product or package in competition with the
Products, nor shall Distributor, without the prior consent in writing
of InkSure, be concerned or interested, either directly or indirectly,
in the production, importation, sale, licensing, marketing or
advertisement of any products which can be developed based on the
Products.
12.2 InkSure agrees that during the term of this Agreement ("the
Non-Competition Period") it will not promote or offer to any third
party, in the territory, in any manner any product or package in
competition with the Products for mass/public transportation.
13. Warranties and Indemnification
13.1 InkSure warrants that it has the right and authority to enter into this
Agreement and to grant the rights herein described.
13.2 InkSure does not warrant that the functions contained in the Products
will meet the requirements of End Users or that the operation of the
Products will be uninterrupted or error free, or that the Products will
interact with application, package or other devices used by the End
Users.
13.3 Any statement, condition or warranty, express or implied, statutory or
otherwise, as to the quality, merchantability, or suitability or
fitness for any particular purpose of the Products is hereby
disclaimed, and InkSure shall not be liable to Distributor or to any
other persons for loss or damage (whether direct or consequential)
arising directly or indirectly in connection with the use or
performance of the Products or any modification, variation or
enhancement thereof, and any documentation, manual or training relating
thereto.
13.4 The total liability of InkSure for any one claim by Distributor or any
End User will be limited to the price actually received by InkSure in
connection with the sale of the Products to the plaintiff and
Distributor shall bear the balance, if any.
THE FOREGOING CONSTITUTES THE SOLE AND EXCLUSIVE REMEDY OF DISTRIBUTOR
AND OR ANY PARTY AND THE EXCLUSIVE LIABILITY OF INKSURE AND IS IN LIEU
OF ANY AND ALL OTHER WARRANTIES, GUARANTEES, PROMISES, OR
REPRESENTAT1ONS, EXPRESS OR IMPLIED, INCLUDING SPECIFICALLY, BUT
WITHOUT LIMIT1NG THE GENERALITY OF THE FOREGOING, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.
13.5 Distributor shall indemnify and hold InkSure harmless against any and
all claims, damages and liabilities whatsoever asserted by any person
or entity resulting directly or indirectly from any breach by
Distributor, or by any of its employees or agents, of this Agreement or
of any warranty or representation of Distributor contained herein or
made in connection herewith. Such indemnification shall include the
payment of all reasonable attorney's fees and other costs incurred by
InkSure in defending such claims.
13.6 Subject to the preceding sub-clauses of this Clause, InkSure shall
indemnify and hold Distributor harmless against any and all claims,
damages and liabilities whatsoever asserted by any person or entity
resulting directly or indirectly from any breach by InkSure, or by any
of its employees or agents, of this Agreement or of any warranty,
representation, covenant or obligation of InkSure contained herein.
Such indemnification shall include the payment of all reasonable
attorney's fees and other costs incurred by Distribution defending such
claims.
14. Copyright, Patent, and Intellectual Property Right
14.1 Distributor acknowledges that any and all of the copyrights, trademarks
and other intellectual property rights used or embodied in or in
connection with the Products, including all Documentation are, and
shall remain, the property of InkSure, and the Distributor shall not
during, or at any time after the expiration or termination of, this
Agreement in any way question or dispute the ownership or any other
such rights of InkSure.
14.2 Distributor also acknowledges that such trademarks, copyrights and
other rights belonging to InkSure are only used by Distributor with the
consent of InkSure and during the term of the Agreement. Upon
expiration or termination hereof Distributor shall forthwith
discontinue such use, without receipt of compensation for such
discontinuation.
14.3 Distributor shalt not during, or after the expiration or termination
of, this Agreement, without the prior written consent of InkSure, use
or adopt any name, trade name, trading style or commercial designation
that includes or is similar to or may be mistaken for the whole or any
part of any trade xxxx, trade name, trading style or commercial
designation used by InkSure.
15. Assignment
This Agreement may not be assigned by either party without the consent
of the other party hereto. Neither party shall merge into, consolidate
with or sell substantially all its assets to a third party unless this
Agreement shall be assigned to, and the obligations hereunder assumed
by, the successor entity of the party that has merged, been
consolidated or sold substantially all of its assets, provided that in
the case of Distributor, the consent of InkSure shall nevertheless be
required in connection therewith. Notwithstanding anything to the
contrary aforementioned, the parties hereto do hereby expressly agree
that InkSure shall be entitled, at any time and at all times during the
course of this Agreement and in its sole discretion, to assign all its
rights, duties and obligations under this Agreement to a company
controlled by InkSure, controlling InkSure or under common control with
lnkSure or to a joint venture company in which InkSure is one of the
joint ventures.
16. Confidentiality
16.1 InkSure has imparted and may from time to time impart to Distributor
certain confidential information relating to the Products,
Documentation, successor or enhanced products or other InkSure products
or marketing or support thereof (including specifications thereof).
Distributor hereby agrees that it will use such confidential
information solely for the purpose of this Agreement and that it shall
not disclose, whether directly or indirectly, to any third party such
information other than as required to carry out the purposes of this
Agreement. In the event of each permitted disclosure to third parties
(including to Distributor's employees and agents, if any) Distributor
will obtain from such third party a duly binding written agreement to
maintain in confidence the information to be disclosed to the same
extent at least as Distributor is so bound hereunder, and such
agreement will specify InkSure as a third party beneficiary thereunder.
16.2 Distributor further undertakes:
a. to instruct all of its staff who have access to the Products
not to copy or duplicate the Products, or any part or parts
thereof, or to make any disclosure relating thereto to any
third party; and
b. to effect and maintain adequate security measures to safeguard
the Products from theft or access by any person other than
employees of Distributor in the normal course of their
employment.
16.3 This Clause 16 shall survive the expiration or termination of this
Agreement for whatever reason and shall be valid indefinitely. A breach
by any employee or agent of Distributor of any of the provisions of
this Clause will be deemed a breach by Distributor of same, and
Distributor shall be liable for any damages caused thereby.
17. Governing; Venue Law
17.1 This Agreement shall be governed by, and construed in accordance with,
the laws of England.
17.2 Any dispute arising out of this Agreement which cannot be amicably
resolved by the parties may be brought only before the courts of
London, who shall have exclusive jurisdiction over any and all
disputes, without regard to the rules of choice of law and venue.
18. Severability
If any term, provision or part hereof (in this Clause called "the
Offending Provision") contained in this Agreement shall be declared or
become unenforceable or illegal for any reason whatsoever, the other
terms, provisions and parts of this Agreement shall remain in full
force and effect as if this Agreement has been executed without the
Offending Provision appearing herein, and the parties shall implement a
provision which is legally valid and enforceable and most closely
reflects the intent of the parties as contained in the Offending
Provision.
19. No Warranties Without Authority
Neither party shall make any statements, representations or claims or
shall give any warranties to an End User on behalf of the other party
hereto, whether in respect of the Products or otherwise, save such as
may have been specifically authorized in writing by the other party.
The party breaching this obligation shall keep the other party fully
indemnified against all claims, demands, losses, expense and costs
which the other party may incur as a result of any breath of this
provision.
20. Miscellaneous
20.1 The relationship of the parties is that of independent contractors.
Except as set out in this Agreement, nothing shall constitute the
parties as partners, joint ventures or co-owners, or constitute
Distributor the agent, employee or representative of InkSure.
20.2 This Agreement constitutes the entire agreement between the parties and
may only be modified by a written instrument.
20.3 No waiver (whether expressed or implied) of any of the provisions of
this Agreement or of any breach thereof, shall constitute a continuing
waiver, and no such waiver shall prevent either party from acting upon
any subsequent breach by the other party under any of the provisions of
this Agreement.
21. Headings
Headings preceding the text, articles and Clauses hereof have been
inserted solely for convenience and reference and shall not be
construed to affect the meaning, construction or effect of this
Agreement.
22. Notices and Communications
Any and all notices, reports or other communications hereunder,
including technical specifications and customer requirements, shall be
given in writing in the English language, and sent by registered mail
or by fax. Such notices shall be addressed to the party at the address
set forth below, unless notice of any change of address is furnished to
the other party in writing.
If to InkSure: InkSure Inc.
00 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
XXX
Fax No.: x0 000 0000000
Tel No.:+ 0000 0000000
If to Distributor: ISBAK A. S.
Cendere Yolu No: 52
80360 Kagithane - ISTANBUL
Turkey
Fax No.: + 00 000 000 0000
TelNo.: x000000000000
IN WITNESS WHEREOF, THE PARTIES HAVE HEREUNTO SET FORTH THEIR HAND AS OF THE
DATE FIRST ABOVE WRITTEN.
InkSure Inc. ISBAK A.S.
By: /s/ Xxx Peer By: /s/ Xxxxx Xxxxx
---------------- -----------------------
Name: Xxx Peer Name: Xxxxx Xxxxx
Title: CEO Title: General Manager
ANNEX B
In this Annex, Electronic and Mechanical Configuration shall mean the following
requirements in respect of the Authentication System and the Ink Coding
Substance:
Authentication System:
1. Electronics:
Reading speed: 50 mm/sec
2. False Positive: 1:3000 (i.e. 0.033%)
3. Environment:
Operating Temperature (Hereinafter "C" shall mean degrees measured by
Celsius): 0(degree)C-50(degree)C
Storage Temperature range: -5(degree)C-55(degree)C
Humidity: maximum 95% Rel. Humidity non-condensing
4. Operating voltage: 6 volt 15O ma.
5. Interface connector:
(a) Connector type: 14 pin ,39-26-7148 Molex connector
with 90 degree bracket
(b) Pin description:
1-6 volt d.c (input to InkSure sensor card).
2-6 volt d.c (input to InkSure sensor card).
3- Warning-Do not use !!!
4- Warning-Do not use !!!
5-Motor Pulses (Input to InkSure sensor card).
6 -Ticket type1 OK (Output from InkSure sensor card).
7-Ticket type2 OK (Output from InkSure sensor card).
8-Ticket counterfeit (Output from InkSure sensor card).
9 -Sensor enable (Input to InkSure sensor card).
10- Warning - Do not use !!! (Option for communication TX)
11- Warning - Do not use !!! (Option for communication RX)
12- Not used (spare -May be used to drive external optical
sensor--active low open collector)
00- Xxxxxx
00- Xxxxxx
0. Integration connector:
Connector type: (RG4S 6*4 -Molex REF number: 52O18MOLEX).
Connector is used for:
1. InkSure Diagnostics.
2. Optional to load new program or Ticket bus "new code" at the field
(Useful, after integration on the bus).
7. General remarks regard electronic interface:
1. All I/O inputs and outputs are "Open collector".
2. If it is an input use 5k ohm resistor, pull up to vcc (5 volt).
3. If it is an output use small senes resistor 100 Ohm.
4. Note that pin 3 and pin 4 should not be used.
5. Note that pin 12- (Not used -spare), May be used to drive external
optical sensor.
6. Note that pin 10 and pin 11 should not be used (Option for
communication).
8. Mechanical:
1. Estimate distance between "bus ticket" and P.C.B 20 mm (final
distance will be finalized during integration).
2. PCB size 65*55 mm. PCB Size along the belts is 55mm.
3. PCB hole distance 49 mm ,59 mm.
9. Maintenance and service:
In case of dirt and or paper debris, the Authentication System optical
head should be cleaned with fine brush or compresses air.
Ink Coding Substance:
1. Features:
Durability: the Ink Coding Substance is stable at any temperature
up to 150(0)C
2. Tickets specification:
After printing the Tickets should be stored and held under the
following conditions:
(a) Temperature: Maximum 55(0)C
(b) Humidity: Maximum 95% Rel. Humidity non-condensing
(c) Storage and safekeeping should be made in a shadowed area.
(d) The Tickets should not be, under any circumstances, folded.
General:
The Electronic and Mechanical Configuration set forth herein may be updated by
InkSure, from time to time, during the lifetime of the Authentication System.
ANNEX C
Authentication System
1. The schedule of orders upon which ISBAK shall purchase from InkSure the
Authentication System and secure that such systems be delivered, the
number of units to be purchased and the price therefore shall be as
follows:
1.1 Twenty five (25) units of the Authentication System shall be
purchased and delivered within fourteen days (14) from the
execution of the Agreement by the Parties.
1.2 Five hundred (500) additional units of the Authentication System
shall be purchased and delivered by November 15, 2001.
1.3 One thousand (1,000) additional units of the Authentication
System shall be purchased and deliver by December 15, 2001.
1.4 All the remaining units of the Authentication System needed for
the completion of the Project; and not less than one thousand
one hundred and seventy five (1,175) additional units shall be
purchased and delivered not later than December 31, 2001.
1.5 The purchase price of each Authentication System unit is one
hundred fifteen US Dollars ($115) CIF Istanbul, Turkey, NET,
excluding any other integration fee or other fees incurred by
InkSure in respect thereof
Ink Coding Substance
The schedule of orders upon which ISBAK shall purchase from InkSure
thee Ink Coding Substance, the quantity to be purchased and the price
therefdr shall as follows:
1.1 A quantity of the Ink Coding Substance, sufficient for the
printing of five hundred thousand (500,000) Tickets, shall be
purchased by the end of fourteen (14) days from the date of
execution of the Agreement by the Parties.
1.2 Au additional quantity of the Ink Coding Substance,. sufficient
for the printing of forty million (50,000,000) Tickets, shall be
purchased and delivered by November 15, 2001.
1.3 An additional quantity of the Ink Coding Substance, sufficient
for the printing of fifty nine million five hundred thousand
(49,500,000) Tickets, shall be purchased and delivered by 15
December, 2001. Each purchase order of Ink Coding Substance
shall be for a quantity sufficient for the printing of at
least thirty million (30,000,000) tickets.
1.4 In the event ISBAK shall require, and wish to purchase, an
additional or alternative or the change of an Ink Coding
Substance, InkSure and ISBAK shall agree upon the price thereof
and the changes, if any, to the prices of the Ink Coding
Substance resulting therefrom and the modification required to
be applied to the Authentication System.
1.5 The table hereunder reflects the price per Ink Coding Substance
according to the number of Tickets that may be printed using
same, prices are CIF Istanbul, Turkey, NET, excluding any other
integration fee or other fees incurred by InkSure in respect
thereof:
--------------------------------------------------------------------------
Number of Tickets Price per Ticket in US Dollars
--------------------------------------------------------------------------
100 million $0.00960
--------------------------------------------------------------------------
101-200 million $O.00730
--------------------------------------------------------------------------
201-300 million $000600
--------------------------------------------------------------------------
--------------------------------------------------------------------------
301 million and above shall be agreed, in writing, by ISBAK
and InkSure.
General Terms
1. All sums to be paid under this Agreement shall be made in United States
Dollars.
2. All purchases made by ISBAK shall be followed by shipment details
placed with InkSure and specifying all pertinent details in respect of
the shipment of the products.
3. ISBAK shall open two irrevocable confirmed documentary credit (i.e. -
letter of credit) to the benefit of InkSure, one confirmed documentary
in respect of the purchase of Authentication System the other in
respect of the purchase of Ink Coding Substance, issued or confirmed by
an American or West European Bank rated triple A (AAA) and approved,
including wording thereof, by InkSure beforehand in writing
(hereinafter "Letters of Credit"). Payment under the Letters of Credit
shall be made against delivery of documents, effective on sight (i.e. -
immediately upon the documents arrival) and partial delivery shall be
allowed under the terms of the Letters of Credit. The Letters of Credit
shall be issued ten days after the execution of the Agreement by the
Parties, for a total amount of seven hundred ninety thousand and five
hundred US Dollars ($790,500). The confirmed documentary credit in
respect of the Ink Coding Substance shall be opened for the a total
amount of four hundred and eighty thousand United States Dollars and
the confirmed documentary credit in respect of the Authentication
System shall be opened for a total amount of three hundred and ten
thousand United States Dollars. The Letters of Credit shall be of force
and effect until sixty (60) days after the last delivery of product to
ISBAK by InkSure is expected and in any event at least until February
31,2002. This Section 3 is considered by the Parties to be material for
the purpose of this Agreement and a breach thereof shall allow InkSure
to terminate the Agreement immediately.
4. In the event ISBAK requires to purchase from InkSure additional
products that have not been specified in this Agreement, InkSure and
ISBAK shall determine, beforehand in writing, the terms and conditions
for such a purchase.
ANNEX D
The Parties shall coordinate to implement the first stage of installation of Bus
Ticket Reader System, printing of Tickets and the examination and analyses of
results of the first installation as follows:
3. In order to conduct the first stage the Parties shall perform the
following stages, in accordance with the following order:
(a) Until July 31,2001, ISBAK will send to InkSure the following:
1. paper used for the printing of Tickets - At least 50
A4 area.
2. graphic layout of the Tickets.
3. bus tickets that have been printed without the use of
the Ink Coding Substance -at least 100 tickets.
4. a Bus Ticket Reader System unit.
(b) InkSure shall integrate the Authentication System in the Bus
Ticket Reader System it received and make preliminary
computability tests at InkSure's premises.
(c) InkSure shall print until August 7, 2001, sample tickets and
test the Authentication System performance and functionality.
(d) On August 8, 2001, InkSure and ISBAK will finalize the
electronics interace synchronization at ISBAK's premises.
(e) On August 9, 2001, InkSure and ISBAK will perform CDR
(Critical Design Review) at ISBAK's premises, regard system
performance and test detailed and acceptance criteria.
(f) InkSure shall send to ISBAK until August 12, 2001, one unit of
Authentication System for further testing and integration.
(g) InkSure shall send to ISBAK until August 18, 2001, twenty five
(25) units of the Authentication System to be integrated in
the busses participating in the test.
(h) InkSure shall supply the Ink Coding Substance to print tickets
for the "First Stage" until August 18,2001.
(i) ISBAK shall print the T.B.D amount of tickets to be used for
the "First Stage" until August 25, 2001.
(j) The systems will be installed by ISBAK on busses and the
testing thereof shall be for a period of one week in which
ISBAK shall perform "live tests" and record the operation done
during this test.
(k) During the test period, InkSure shall provide with full
support in regard to problems that may occur. InkSure and
ISBAK will also finalize the Bus Ticket Reader System
configuration during this period.
(l) InkSure and ISBAK will analyze the test site results and
needed changes. They will also decide on System integration
and installation of full production as well as maintenance
procedure.
(m) Until September 18, 2001 InkSure and ISBAK shall verify the
compliance of the Authentication System to the acceptance
criteria agreed in the CDR Upon approval of the first stage by
ISBAK and InkSure the parties shall start production and
supply according to annex (delivery schedule).
2. ISBAK shall coordinate with the Customer all pertinent actions in
respect of the test.
ANNEX E
Warranty:
1. InkSure hereby warrants that each Authentication System has a life
expectancy of, and shall be able to read and detect the Tickets at
least 100,000 times, provided that no excess debris or dirt lies on the
optical head of the Authentication System and subject to the proper and
correct instillation, maintenance and all other terms and conditions
set forth in the Agreement in general and in Annex A in particular.
2. InkSure hereby warrants that the Ink Coding Substance, after it has
been used for the printing of the Tickets, shall remain on the Tickets
and shall be readable by the Authentication System for a period of
twelve (12) months commencing on the date such Tickets were printed,
provided and subject to the Ink Coding Substance being handled
according to InkSure's instructions and specifications, and correct
usage, maintenance and all other terms and conditions set forth in the
Agreement in general and in Annex A in particular.
General Terms:
Pursuant to the warranties in Section 1 and 2 above, InkSure shall replace any
Authentication Systems that does not stand up to the terms of the warrant.
Service in resnect of the Authentication System:
General:
InkSure will supply ISBAK an additional fifty (50) units of the Authentication
System or parts thereof, upon the delivery of the first 500 units of the
Authentication System in accordance with the Agreement (hereinafter "the Spare
Authentication Systems").
The Spare Authentication Systems shall be used, according to InkSure's
specifications, to replace Authentication Systems incase of malfunction during
the term of the Agreement.
It is acknowledged by the Parties that the Spare Authentication Systems are the
sole property of InkSure and shall be returned to InkSure upon the termination
of or at the end of the term of the Agreement. InkSure shall secure that for the
duration of the warranty the number of Spare Authentication Systems shall not
fall beneath 50 units.
Procedure to be taken when a malfiinction inthe Authentication System is
identified:
1. ISBAK shall secure by itself or by Subcontractor that a Bus Ticket
Reader System in which a malfunction was identified (hereinafter: "the
Malfunctioned Bus Ticket Reader System") shall be replaced with an
alternative Bus Ticket Reader System, so long as such Bus Ticket Reader
System is needed for the normal use of the vehicle in which the
malfunction was identified.
2. The Malfunctioned Bus Ticket Reader System shall be tested and analyzed
by ISBAK, according to InkSure's specifications, and ISBAK shall
identify the source of the malfunction. In the event ISBAK has
determined that the source of the malfunction is the Authentication
System then such System shall be sent to InkSure for further
investigation. If the malfunction is found to be, after the testing as
aforementioned, from a different component other than the Authentication
System ISBAK shall send such Malfunctioned Bus Ticket Reader to ISBAK
for repair.
3. In the event ISBAK has determined that the source of the malfunction is
not the components other than the Authentication System, in the Bus
Ticket Reader System, and after ISBAK has replaced all components other
than the Authentication System in such Malfunctioned Bus Ticket Reader
System, then the Parties shall consult and determine a form of action.
4. If any Authentication Systems are sent to InkSure pursuant to Section 2
above, ISBAK shall ensure that it be sent with all pertinent
information regarding the suspected malfunction, including, inter alia,
the serial number, description of the malfunction, all installation
data. Any shipments in respect of the aforementioned to InkSure and
returned from InkSure shall be borne by the Parties.
ANNEX F
(Insurance Policy)
