MANUFACTURING AGREEMENT This Manufacturing Agreement ("Agreement") is made and entered into as of September 16 2003, by and between Electronic Game Card Limited ("EGC"), having its place of business at 32 Haymarket, Piccadilly, London, SW1Y 4TP,...
EXHIBIT 10.1
This Manufacturing Agreement ("Agreement") is made and entered into as of
September 16 2003, by and between Electronic Game Card Limited ("EGC"), having
its place of business at 00 Xxxxxxxxx, Xxxxxxxxxx, Xxxxxx, XX0X 0XX, England,
and Tak Shun (Xxx'x) Macao Offshore Ltd and associated companies having its
place of business at Xxxx 0, 00/X., Cable TV Tower, No. 9 Xxx Xxxxx Rd., Tsuen
Wan, N.T., Hong Kong, collectively the "parties", or singularly "party".
RECITAL
EGC and Tak Shun wish to enter into an agreement pursuant to which Tak Shun will
provide manufacturing services and testing for EGC products, and testing and
delivery of such products to the customers of EGC.
AGREEMENT
SECTION 1.0 AGREEMENT TO MANUFACTURE
1.1 SCOPE OF WORK.
During the term of and subject to this Agreement, Tak Shun shall manufacture,
configure, test and deliver to EGC's customers, and EGC shall purchase from Tak
Shun, and Tak Shun shall sell to EGC, such quantities of units of the products
described on Exhibit A to this Agreement (the "Products") as EGC may order from
time-to-time, at the quoted prices set forth on Exhibit A. Tak Shun's
obligations to manufacture, configure and test Products pursuant to this
Agreement shall commence on receipt of the first Purchase Order from EGC. Each
Product shall be manufactured, configured and tested according to EGC's
specifications for such Product, which are or will be (prior to or at the time
of order) agreed to, in writing, by EGC and Tak Shun (the "Specifications"),
and, as necessary, debugged pursuant to Section 6.0B below in an effort to
ensure that such Product meets the Specifications. EGC shall, upon the effective
date of this Agreement and monthly thereafter during the term of this Agreement,
give Tak Shun a written forecast of the Products, by type, quantity and expected
delivery date, (the "Forecast") for which Tak Shun and EGC reasonably expect to
respectively make and receive delivery during the immediately succeeding thirty
day period. A Forecast will not be deemed to constitute a binding purchase order
with respect to Products. In addition, EGC shall, from time-to-time, issue to
Tak Shun a purchase order,which shall be considered to be binding, subject to
the terms of this Agreement, in the form attached to this Agreement as Exhibit
B, for configured Products, by type, quantity and delivery date, as and when it
desires to order configured Products pursuant to this Agreement.)
SECTION 2.0 PURCHASING AND OTHER MATTERS
2.1 PURCHASE ORDERS.
Purchase orders for configured Products and Forecasts for Products,may be
delivered, duly signed by the Chief Executive Officer of EGC, to Tak Shun by any
reasonable means,
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including but not limited to postal delivery, courier delivery, electronic mail
or facsimile transmission. Receipt of each purchase order will be promptly
confirmed by Tak Shun by similar means. Tak Shun shall not be bound by any term
or condition on a purchase order that is inconsistent with this Agreement or any
of its exhibits except to the extent mutually agreed by the parties. If Tak Shun
believes it will be unable to meet the delivery dates set forth in any purchase
order and notifies EGC of that concern and suggested alternative delivery dates
within two business days of its receipt of such purchase order, Tak Shun and EGC
will negotiate in good faith to agree upon an acceptable delivery date. Tak Shun
shall promptly accept or reject such purchase order; provided, however, except
as provided above, Tak Shun shall be obligated to accept all purchase orders for
Products with respect to which a price has been mutually agreed by the parties.
The parties shall hold weekly meetings either in person at the offices of either
party or by conference phone call, or at some other frequency of meeting to be
mutually agreed, for the purpose of discussing EGC's existing and contemplated
Forecasts and order requirements; provided, however, only written Forecasts and
purchase orders, or written modifications thereto, shall bind EGC pursuant to
the terms of this Agreement or otherwise. The parties, as business requirements
dictate, may mutually agree upon the use of blanket purchase orders for specific
sub-assemblies or components, subject to the terms of this Agreement.
2.2 PURCHASE ORDER RELEASES.
Tak Shun may make purchase commitments to suppliers based upon the Forecasts and
purchase orders received from EGC; provided, however, notwithstanding any such
commitments, EGC shall only have such obligation to purchase units of Products
or components or sub-assemblies thereof as is specifically set forth in this
Agreement. EGC shall only be obligated to Tak Shun for components and
sub-assemblies ordered by Tak Shun, as specifically provided in this Agreement,
including, without limitation, non-cancellable or non-returnable components or
sub-assemblies, in quantities essential to meet a then projected delivery date
for the related Product in the then most recent Forecast ("Permitted
Components"). Tak Shun will give EGC written notice, from time to time, of the
necessary advance order period for any component or sub-assembly that must be
ordered more than forty (40) days prior to receipt thereof by Tak Shun and any
material change in such advance order period.
2.3 PURCHASE ORDER CONTENTS.
Each purchase order shall contain the following information:
A. Quantity and type of units of Product to be shipped.
B. Product unit price.
C. Product model number.
D. Delivery schedule, by date, Product unit and quantity.
E. Packaging process and method.
F. Destination, carrier and other specific instructions.
2.4 RESCHEDULING OF RELEASED ORDERS.
A. EGC may reschedule delivery of units of Products for a later date by
sending Tak Shun a written change order no less than twenty five (25) business
days before the scheduled delivery date. Expediting of delivery of a Product
beyond the limitations
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specified in the schedule below may only be made with the approval of each of
the parties, and only at EGC's written request. Any fees for such expediting,
including resulting premium costs associated with materials, labour or handling
must also be mutually agreed upon, in writing, by the parties.
B. Should Tak Shun in any circumstance advise EGC of a rescheduled
delivery of units of Product after the scheduled delivery date Tak Shun must
send written notice to EGC immediately by e-mail or facsimile.
2.5 IMPACT OF RESCHEDULING
With respect to the rescheduling of any Products, and related components, beyond
the limits described in 2.4(A) above, EGC shall be responsible for accepting the
delivery of Product on the scheduled date, without incurring penalty with
payment terms for the order to apply as described in Section 3 below. Product
shall be delivered to a location identified to Tak Shun by EGC or, at EGC's
direction, disposed of by Tak Shun where EGC is to bear or benefit from any
changes in delivery costs. With respect to the rescheduling of any Products, and
related components, described in 2.4(B) above, Tak Shun shall be charged a fee
commensurate with the rescheduled delivery date, by EGC, measured in the number
of business days according to the following schedule:
Difference, in business days, between
scheduled delivery date and rescheduled
delivery date Fee
Up to 15 days cost of airfreight
Over 15 days 100% of total order value
Should such fees be incurred these shall be deducted from Tak Shun's invoice for
the corresponding purchase order and the letter of credit provided by EGC
reduced accordingly. EGC reserves the right to cancel purchase orders for which
the rescheduled delivery date exceeds fifteen days.
Tak Shun's liabilities in respect of clause 2.5 will commence only when Tak Shun
has accepted a purchase order from EGC by Tak Shun's signed agreement and
returned it to EGC and its appointed agents as designated in Clause 3 below. The
receipt of the purchase order by EGC will release the deposit of 30% to Tak Shun
and any terms of any Letter of Credit given to Tak Shun by EGC as designated in
Clause 3 below.
2.6 ENGINEERING DESIGN CHANGES.
If EGC should request any engineering change order for any Product, Tak Shun
will as soon as is practicable give EGC written notice, by e-mail or facsimile
of the date by which,, such engineering change order could be implemented. EGC
shall be responsible for any overall increase in such costs (net of any savings
of costs), due to an engineering change order, to which it agrees in writing,
but shall not pay for the cost of the engineering change itself which Tak Shun
will provide free of charge.
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2.7 QUALITY PROGRAM.
Tak Shun shall work with quality control advisors designated by EGC [currently
Professional Quality Control Systems Ltd (Pro QC) ] to establish a quality
control program to a standard to be agreed between EGC and Tak Shun and in
accordance with Exhibit C, to be finalised at a later date than this agreement.
2.8 CANCELATIONS.
In the event that EGC wishes to cancel some quantity of units of Products
ordered pursuant to this Agreement, Tak Shun, upon receipt of such written
notice of such cancellation, shall stop work on such units of Products to the
extent specified therein. EGC's termination liability for a cancellation shall
be limited to Payment for all units of Products delivered to EGC, or in the
process of being delivered at the time. Upon payment of the cancellation charges
for any completed Products, work-in-process, or Permitted Components in-house or
on order, such items shall become the property of EGC, F.O.B. Tak Shun (at the
applicable Tak Shun facility), and, at EGC's election and expense, shall be
delivered to a location identified to Tak Shun by EGC or, at EGC's direction,
disposed of by Tak Shun or held to EGC's order at Tak Shun's facility without
cost. In addition to payment of the value of costs incurred by Tak Shun as
described in Clause 2.8 EGC will pay Tak Shun up to 10% of the value of the
costs incurred against any opportunity value lost by Tak Shun as a result of any
cancellation.
2.9 NEW PRODUCTS/COST PERFORMANCE.
A. Quotations by Tak Shun for new products will be developed by use of
the mutually agreed upon pricing model set forth on Exhibit A hereto. Each such
quotation requested by EGC shall be provided to EGC on an expeditious basis.
Each of the parties shall jointly develop a mutually agreeable quality program
for each new product.
B. During each calendar quarter, beginning with the third quarter of
2003, the parties will jointly review overall cost and volume performance of Tak
Shun and EGC, respectively, and other performance parameters to be mutually
agreed upon by the parties. The pricing model referenced in subparagraph A above
shall be jointly reviewed by the parties at an agreed upon frequency and may be
modified by the mutual agreement of the parties.
2.9 APPROVAL OF LOCATION.
EGC agrees that the place of production be Putian Dexin, Wuxing Village,
Jiangkou Town, Putian, Fujian, Peoples Republic of China. EGC shall have the
right to approve any new location at which Tak Shun is providing any of its
services hereunder
SECTION 3.0 PAYMENT AND SHIPPING TERMS
3.1 INVOICES AND PAYMENT.
A. Following a signed purchase order from EGC to Tak Shun and Tak
Shun's signed confirmation of such purchase order EGC will within five days
provide Tak Shun a letter of credit from its bankers the amount of which shall
equal the order value less 30%.
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This letter of credit shall be adjusted to reflect any eventualities
contemplated by paragraph 2.5 above. Tak Shun agrees that this letter of credit
can only be drawn against should EGC fail to meet its payment obligations
described in paragraph B below and that the Product to which the relevant order
refers has been delivered F.O.B to the destination determined by EGC. EGC may
set off any such payment against amounts owed to EGC by Tak Shun pursuant to
this Agreement. 30% of the order value shall be paid by EGC to Tak Shun by bank
telegraphic transfer within ten days of a signed Purchase Order from EGC being
accepted by Tak Shun and received by EGC.
B. Tak Shun shall invoice EGC upon shipment of configured Product.
Payment for such Product is due net thirty (30) days from date of shipment and
may be made by cheque or wire transfer. Should EGC fail to make payment within
thirty (30) days after date of invoice, Tak Shun may, at its option, if it gives
EGC written notice, in reasonable detail, of such failure and EGC does not cure
such failure within five (5) business days of its receipt of such notice, (i)
draw on its letter of credit, adjusted to reflect any eventualities arising that
are contemplated in paragraph 2.5 above, (ii) cease shipments to EGC
C. Representatives of both parties will converse weekly via conference
call, electronic mail or in person, or at some other frequency to be mutually
agreed, to resolve any outstanding shipment or payment disputes in order to
ensure timely resolution of such disputes. Any party disputing a shipment or
payment shall promptly describe such dispute in writing, in reasonable detail,
and provide such description to the other party.
D. Tak Shun assumes all responsibility for Products, and components,
held in inventory without the prior, written authorisation of EGC.
3.2 PACKAGING AND SHIPPING.
Tak Shun shall package each unit of Product to EGC's specifications, or, if not
specified by EGC, to good commercial standards. All shipments made by Tak Shun
to EGC or a customer of EGC shall be F.O.B. Hong Kong (unless otherwise agreed
at time of order by both parties). Title and risk of loss or damage to a Product
shall pass from Tak Shun to EGC upon delivery of such Product to the F.O.B.
shipping point. Shipments to EGC or its customer will be made in accordance with
EGC's specific routing instructions, including method of carrier to be used. Tak
Shun agrees to procure shipper if requested to do so by EGC.
SECTION 4.0 WARRANTY
4.1 WARRANTY.
Tak Shun warrants to EGC that each of the Products manufactured, configured or
tested by Tak Shun will have been manufactured, configured and tested in
conformance with the Specifications therefore and be free from defects in
workmanship under normal use and service for a period as described in Exhibit A,
and in accordance the quality control procedures in Exhibit C, after shipment by
Tak Shun, unless otherwise mutually agreed in writing. Tak Shun shall be
responsible for procurement and selection of components, incoming inspection,
and safe handling of the components while in-house at Tak Shun. Tak Shun are
responsible for ensuring the quality of the vendors and the compatibility of the
components and for producing a product which does not unduly stress the
components
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being used. Tak Shun's obligation under this warranty is limited to refunding or
issuing credit against the purchase order cost of any Products that do not meet
such Specifications or are defective in workmanship. At EGC's election Tak Shun
shall refund or issue credit to EGC for any such Product, having notified Tak
Shun in writing details of the defect and quantities of Product concerned,
within five (5) days of such discovery. Tak Shun shall assign to EGC any
warranties for components or sub-assemblies it purchases under this Agreement
and cooperate with EGC in its efforts to exercise its rights under such
warranties.
NEITHER PARTY IS LIABLE FOR ANY INCIDENTIAL, CONSEQUENTIAL OR SPECIAL DAMAGE OF
ANY KIND WHATSOEVER IT MAY CAUSE, EVEN IF IT IS MADE AWARE OF THE POSSIBLE
OCCURRENCE OF ANY SUCH DAMAGE.
SECTION 5.0 RESPONSIBILITY FOR ADDITIONAL COSTS AND EXCESS INVENTORY
5.1 EXCESS INVENTORY.
Tak Shun purchases or orders all components in order to meet EGC's requirements
as set forth in any Forecast or purchase order, at its own risk. EGC shall not
be required to purchase any unused portions of such components from Tak Shun
should EGC fail to purchase units of Products, including such components, in
accordance with such Forecast or purchase order.
5.2 COST ADJUSTMENTS.
Product pricing shall remain firm for units of Products on EGC purchase orders
received by Tak Shun. Cost adjustments to Product, as described in Exhibit A,
may only occur under the following circumstances:
A. The quoted cost of all components and sub-assemblies in each Product
subject to this Agreement is or will be set forth on Exhibit A or an amendment
thereto. In the event there is an increase or decrease in the cost of a
component or sub-assembly, or the labour content (as normally defined in the
manufacturing industry), of a Product (which has not been ordered as of such
increase or decrease) which affects the purchase price of such Product, Tak Shun
shall document such increase or decrease in costs and provide such information
to EGC in writing, in reasonable detail, within five (5) business days of Tak
Shun becoming aware of such increase or decrease. In the case of an increase,
both parties may mutually pursue alternative pricing in order to retain the
original cost. If such an alternative cannot be attained within a reasonable
period of time, the purchase prices in Exhibit A for units of the affected
Product shall be adjusted to reflect the actual amount of such increase. No
increase or decrease in such costs for a Product shall be passed on to EGC
unless and until the aggregate changed costs for such Product, after taking into
account all increases and decreases in such costs not previously made, exceeds
one percent of the then purchase price of such Product. As appropriate in the
circumstances, as determined by EGC in its sole discretion, EGC will commit such
engineering resources as may be necessary to qualify an alternative source
component if its preliminary review of the engineering specifications for such
alternative source component shows that it provides enhanced management of
supply or cost improvements or adequately addresses any end-of-life issues for a
then utilized component.
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B. EGC will be responsible for no other costs and expenses of Tak Shun
other than those included in the purchase price for Product.
SECTION 6.0 FUNCTIONAL TEST
A. Tak Shun agrees to provide at its expense and for its use
appropriate functional test equipment, as may be mutually agreed upon by EGC and
Tak Shun from time to time, reasonably necessary to allow Tak Shun to meet all
product and production commitments of Tak Shun under this Agreement. Tak Shun
will also provide, at its expense, the technical support and maintenance to
ensure all such functional test equipment is kept in proper working order. Tak
Shun will ensure that adequate physical asset controls for such equipment are
continually maintained and the equipment is used for the purposes contemplated
by this Agreement and in compliance with the manufacturer's specifications for
such usage. If Tak Shun is negligent in the use or care of any of such
equipment, or breaches any of its obligations with respect to such equipment, it
will be responsible for the cost of repair or replacement of such equipment.
B. Tak Shun is responsible for the functional, configuration and
in-circuit testing for each Product. Tak Shun agrees to observe all relevant
national, statutory requirements commensurate to the final shipping address of
the Product in its testing parameters. Any testing carried out by parties
arranged by EGC other than Tak Shun will be be the responsibility of and paid
for by EGC. EGC will give advance notice to Tak Shun in order to achieve
specific requirements of EGC. Tak Shun will engage in best efforts to debug any
failed Product and will run all units of the failed Product through its process
(i.e., rework/test) no less than three times in a thirty (30) day period. EGC
will be promptly notified of the results of each such rework/test. If subsequent
analysis by EGC shows that the failure of a Product was a result of Tak Shun's
manufacturing, including without limitation, configuration process, EGC may
elect Tak Shun to replace, refund or issue credit to EGC for the Products
concerned under the warranty terms as described, in paragraph 4.1 above.
SECTION 7.0 TERM AND TERMINATION
7.1 TERM AND TERMINATION. The initial term of this Agreement shall commence
on the effective date hereof and extend for one (1) years thereafter, with
automatic one year renewals unless terminated according to one or more of the
following provisions:
A. At any time upon the mutual written agreement of both parties;
B. At the end of the first one-year term hereof, or any subsequent
one-year term, by either party upon written notice of termination to the other
party received not less than sixty (60) days prior to the expiration of any such
term;
C. By either party, following a material breach of this Agreement by
the other party and the breaching party's failure to cure such breach within
fifteen (15) days of it receiving written notice of such breach; and
D. By either party upon the other party seeking an order for relief
under the bankruptcy laws of England or similar laws of any other jurisdiction,
a composition with or assignment for the benefit of creditors, or dissolution or
liquidation.
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Notwithstanding any possible implication to the contrary herein or as a result
of the course of conduct or past relationship of the parties, either party may
terminate this Agreement pursuant to subparagraph B above with or without cause
and neither party presently has a right to have this Agreement continue in
effect for any period other than as specified in subparagraph B above, subject
to subparagraphs C and D above.
7.2 EFFECT OF TERMINATION
Upon any such termination by Tak Shun or any such termination by EGC pursuant to
subsection A or B above, EGC shall be liable for any cancellation according to
Section 2.8 above.
SECTION 8.0 INDEMNIFICATION
8. PRODUCT INDEMNIFICATION.
EGC agrees that it will indemnify Tak Shun against any and all claims,
liabilities, damages or causes of action (collectively, a "Claim") hereafter
brought or asserted by any person or entity arising out of the design, or use of
any units of Product(s) manufactured by Tak Shun under this Agreement, except to
the extent such Claim results from such units of Product(s) not meeting their
specifications or being defective in workmanship. Such indemnification
obligation is conditioned upon Tak Shun promptly notifying EGC of any such
claim. Such indemnification shall include reasonable attorneys' fees and other
costs incurred by Tak Shun in the defence of any Claim; provided, however, EGC
shall have the right to defend any Claim with its own counsel.
Tak Shun agrees to comply with all local, federal and national rules and
regulations and laws at the place of manufacture regarding the production of the
units including the manufacturing processes, labour working conditions, health
and safety directives, and waste disposal, also to be in accordance with ISO and
WTO requirements from time to time, and will indemnify EGC against any claims
brought arising from Tak Shun's breach of such regulations.
8.2 PATENTS, COPYRIGHT, TRADE SECRET AND OTHER PROPRIETARY RIGHTS.
Each party (the "indemnifying party") shall defend, indemnify, and hold harmless
the other party from any claims by a third party of infringement of intellectual
properties resulting from the acts of the indemnifying party pursuant to this
Agreement, provided that the other party (i) gives the indemnifying party prompt
notice of any such claims, (ii) renders reasonable assistance to the
indemnifying party thereon, and (iii) permits the indemnifying party to direct
the defence of the settlement of such claims. All design work, additions and
amendments in connection with the Product, including source codes, whether
originated by Tak Shun or its sub contractors in the course of Product
development shall at all times be and remain the exclusive property of EGC in
perpetuity.
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8.3 CONFIDENTIAL INFORMATION
A. Tak Shun and EGC agree to execute, as part of this Agreement, a
Nondisclosure Agreement for the reciprocal protection of confidential
information.
B. Subject to the terms of the Nondisclosure Agreement and the
proprietary rights of the parties, Tak Shun and EGC agree to regularly exchange
relevant process development information and business plans to include market
trends, process technologies, product requirements, new product developments,
available capacity and other information to support technology advancements by
both Tak Shun and EGC.
SECTION 9.0 MISCELLANEOUS
9.1 ENTIRE AGREEMENT. This Agreement shall constitute the entire agreement
between the parties with respect to the transactions contemplated hereby and
supersedes all prior agreements and understandings between the parties relating
to such transactions. The exhibits attached hereto are considered to be a part
of this Agreement; provided, however, to the extent there is a conflict between
any term of this Agreement and any term on the face of a purchase order or any
other document utilized by EGC to order Products hereunder, such term of this
Agreement shall govern. The parties agree that this agreement remain
confidential and can not be disclosed to a third-party without the prior,
written consent of the other party.
9.2 CURRENCY.
All references in this Agreement, and exhibits attached hereto, shall be in
United States Dollars (US $) unless mutually agreed in writing by the parties.
9.3 ASSIGNMENT.
This Agreement shall be binding upon and inure to the benefit of the parties.
Neither party hereto shall in any way sell, transfer, assign, or otherwise
dispose of any of the rights, privileges, duties and obligations granted or
imposed upon it under this Agreement.
9.4 SEVERABILITY.
In case any one or more of the provisions contained in this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect,
except in those instances where removal or elimination of such invalid, illegal,
or unenforceable provision or provisions would result in a failure of
consideration under this Agreement, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never be uncontained herein.
9.5 FORCE MAJEURE.
Neither party shall be liable to the other for any delay in performance or
failure to perform, in whole or in part, due to war or act of war (whether an
actual declaration is made or not), insurrection, riot, civil commotion, act of
public enemy, accident, fire, flood, or other act of God, act of any
governmental authority, judicial action or similar causes beyond the
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reasonable control of such party. If any event of force majeure occurs, the
party affected by such event shall promptly notify the other party of such event
and take all reasonable actions to avoid the effect of such event.
9.6 INDEPENDENT CONTRACTOR.
Tak Shun and EGC are and shall be independent contractors to one another, and
nothing herein shall be deemed to cause this Agreement to create an agency,
partnership, or joint venture between the parties.
9.7 DISPUTES.
In the spirit of continued cooperation, all disputes and controversies of every
kind and nature between the parties arising out of or in connection with the
existence, construction, validity, interpretation, or meaning, performance,
non-performance, enforcement, operation, breach, continuance, or termination of
this Agreement shall be submitted to binding arbitration, pursuant to the
following. It is the intent of the parties that any dispute be resolved
informally and promptly through good faith negotiation between Tak Shun and EGC.
Either party may initiate negotiation proceedings by written notice to the other
party setting forth the particulars of the dispute. The parties agree to meet in
good faith to jointly define the scope and a method to remedy the dispute. If
these proceedings are not productive of a resolution, then senior management of
Tak Shun and EGC are authorized to and will meet personally to confer in a bona
fide attempt to resolve the matter. Should any disputes remain existent between
the parties after completion of the two-step resolution process set forth above,
then the parties shall promptly submit any dispute to mediation with an
independent mediator. In the event mediation is not successful in resolving the
dispute, the parties agree to submit the dispute to binding arbitration as
nominated by the Institute of Insurance Loss Adjustors of England, who shall
select an appropriate arbitrator with experience in manufacturing disputes for
technology products.
9.8 JURISDICTION.
This Agreement shall be governed by, and construed in accordance with the laws
of Hong Kong. In any action to enforce this Agreement, the prevailing party
shall be awarded all court costs and reasonable legal fees incurred.
9.9 EXHIBITS.
Each exhibit hereto is incorporated herein by this reference. The parties may
amend any exhibit from time-to-time by entering into a separate written
agreement, referencing such exhibit and specifying the amendment thereto, signed
by an authorized employee of each of the parties.
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IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their respective authorised representatives.
TAK SHUN TECHNOLOGY GROUP LIMITED ELECTRONIC GAME CARD LIMITED
By: /S/ XXXXX XXXXX LUN By: XXXX XXXXXXX
----------------------------- ------------------------
XXXXX XXXXX LUN XXXX XXXXXXX
--------------------------------- ----------------------------
Name (type or print) Name (type or print)
Sales and Marketing Manager Director
--------------------------------- ----------------------------
Title Title
Date: 16 Sept 2003 Date: 16/9/2003
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EXHIBIT A
GAMECARD BASIC DESIGN
Xxxx Xxxx to send drawing and samples to accompany exhibit A.
The standard GameCard currently comes in an upright portrait format or
horizontal landscape layout. The size of a credit card (85mm x 54 mm) with a
thickness of approximately 3mm depending on security and design requirements.
See figure 1. The unit is lightweight, weighing approximately 14gm (0.49 oz).
[GRAPHIC OMITTED]
The hand held unit consists of a slim moulded plastic shell made of ABS. A
required number of apertures/windows are cut out of the front face which allows
the LCD screen to display the game numbers or icons. The LCD screen is located
within the shell with moulded location ribs. A ribbon cable leads to the
electronic circuit board.
The circuit board is located on small pillars and riveted into position. The
microprocessor chip [tba] is bonded underneath and in the centre of the circuit
board for added protection. On one edge of the circuit board, the ribbon cable
makes pressure contact to communicate with the LCD.
The chip is resin bonded to the circuit board thus making it impossible to
altered or removed without damage to it or the circuit board.
On the front face of the plastic shell there is a thin plastic membrane, heat
welded to the plastic case to create a sealed unit. (Still not yet confirm and
found out the suitable materials to ensure this requirement.) Under this plastic
membrane are touch sensitive game play buttons. When these buttons are pressed
they make contact with the circuit board and activate the game.
The power supply for the game comes from a slim, disposable alkaline manganese
watch type battery placed into the circuit board. The battery is activated by
the consumer's removal of a celluloid tab and will give a life as follows:
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o An initial three (3) month period prior to activation, to
allow for storage and shelf time for the GameCard before it is
sold; plus
o A further period of time to play the GameCard up to 200 games,
plus
o A further six (6) month period to store the winning game in
stand-by mode, and to return the game for verification and
payout.
(All the battery life time criteria will accord to / rely on the performance of
IC, but battery itself is the key component to active you need.)
The GameCard contains proprietary Electronic reset technology to counteract
static electricity discharge problem, a common problem occurring in portable
electronic devices whereby static electricity builds up in the circuitry and
chip causing the microprocessor to freeze and rendering the unit inoperable,
requiring a hard reset.
The ABS plastic case must be able to accept direct ineradicable ink jet printing
with information as required by EGC customers. (To be confirmed)
Standard Specifications
o Construction - Front fascia bonded onto a ABS plastic case
with radius edge all around forming a complete security seal
o Dimension - 85mm X 54mm X 3mm
o Weight - approx. 14gm
o Control Buttons - touch sensitive dual On and Play
o Screen Size - 40mm LCD
o Battery Life - once activated by removal of paper tag - nine
(9) months plus.
o Colour of GameCard case - white
o Packaging - the GameCards are boxed in protective wrapping
suitable for intercontinental transhipment.
ATTACHED SAMPLE GAMECARD
QUOTED PRICES
------------------------------------------ -------------------------------------
Quantity Unit Price
------------------------------------------ -------------------------------------
0- 20,000 $0.540
------------------------------------------ -------------------------------------
0 - 2,000,000 $0.500
------------------------------------------ -------------------------------------
0- 10,000,000 $0.460
------------------------------------------ -------------------------------------
Prices will be adjusted after the final confirmation of the above quality
requirements and materials selection by EGC.
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<PAGE>
EXHIBIT B
[GRAPHIC OMITTED] PURCHASE ORDER
EGC Limited, 00 Xxxxxxxxx, Xxxxxx, XX0 0XX, XX
--------------------------------------------------------------------------------
Sent by: FAX EMAIL (XXXX AS APPROPRIATE)
--------------------------------------------------------------------------------
----------------------------------------------------- --------------------------
Address: T.B.C. P/O Number:
Date:
EGC Contact:
Attn: Xx Xxxxx Xxxxx
Tel: x000 0000 0000 Pages:
Fax: x000 0000 0000
Email xxxxx@xxxxxxx.xxx.xx
---------------- ---------------- -------------- ---------------- -------------
Model No. Description Quantity Unit Price USD Amount USD
---------------- ---------------- -------------- ---------------- -------------
---------------- ---------------- -------------- ---------------- -------------
---------------- ---------------- -------------- ---------------- -------------
----------------------------------------------------------------- -------------
Total
----------------------------------------------------------------- -------------
Price Term:
Payment Terms:
Delivery date:
Shipping Xxxx:
Delivery Address:
Remarks
1.
2.
3.
4.
Placed By: Confirmed By:
----------------------------- --------------------------
Electronic Game Card Ltd Tak Shun
This purchase order is subject to the terms of any Manufacturing Agreement
existing between EGC and Tak Shun (Xxx'x) Macao Offshore Ltd .
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<PAGE>
EXHIBIT C
Both quantity and quality standards of the products as defined in Exhibit A
shall be inspected at the premises of Tak Shun at any time during the production
process or up to and at the point of delivery FOB Hong Kong by Professional
Quality Control Systems Ltd., hereinafter referred to as "Pro QC", of Hong Kong,
Tel. 00852 0000 0000, Fax 00852 0000 0000, an impartial surveyor. EGC reserves
the exclusive right to change the nominated surveyor at any time. Inspection
certification shall be required with all delivered product.
Pro QC System certification will certify that the goods inspected conform to any
contractual specification and/or sample agreed between EGC and Tak Shun. The
provision of a Pro QC System inspection certificate does not release Tak Shun
from their responsibilities for their product. A final random inspection based
on MIL-Standard-105E Level 1 AQL major [tba], minor [tba]will be executed by EGC
quality assurance centre Pro QC. Tak Shun cooperation in respect of this is
required.
Any additions or amendments to the above to be agreed between EGC and Tak Shun
and not to be unreasonably withheld for inclusion at a later date.
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