Exhibit 10.12
INTERNATIONAL DISTRIBUTORSHIP AGREEMENT
THIS INTERNATIONAL DISTRIBUTORSHIP AGREEMENT ("Agreement") is made as of
the August________ , 2005 (the "Effective Date"), by and between Electronic
Sensor Technology, Inc., a Nevada Corporation, with its principal office at 0000
Xxxxxxxx Xxxxxx Xxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx, X.X.X. 00000 ("Company"), and
Beijing R&D Technology Co., Ltd., a company organized and existing under the
laws and regulations of the People's Republic of China (PRC), with its principal
office at Xx. 0, Xxxxx Xxxxx Xxxx, Xxxxxxxx X, Room 217-218, Xxxxxxxx Xxxxxxxx,
Xxxxxxx 000000, Xxxxx ("Distributor").
R E C I T A L S
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WHEREAS, Company designs, produces, markets, and sells surface acoustic
wave gas chromatograph detection systems and wishes to develop export sales of
such products to China;
WHEREAS, Distributor wishes to act as a distributor of Company's
Product, as defined below in Section 1.1, on an exclusive basis in the Territory
as hereinafter defined; and
WHEREAS, Company wishes to appoint Distributor as Company's stributor on
an exclusive basis of its Product in the Territory as defined in Section 1.2
below.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 THE PRODUCT
"Product" shall mean the Vapor Detector and Analyzer System produced
by Company for sale, which is further described in Exhibit A attached hereto.
1.2 TERRITORY
"Territory" shall mean the country of the People's Republic of
China.
ARTICLE 2
DISTRIBUTORSHIP
2.1 APPOINTMENT
Subject to the terms and conditions of this Agreement, Company
hereby appoints Distributor as Company's exclusive distributor to sell,
distribute, market, and maintain the Product in the Territory and Distributor
hereby accepts such appointment, effective as of the Effective Date.
2.2 TERM
Distributor's appointment as an exclusive distributor for the
Product in the Territory, shall remain in effect for a period of one (1) year
from the Effective Date subject to the performance by Distributor of all of
Distributor's obligations under this Agreement.
2.3 NATURE OF DISTRIBUTION
To the extent that the Product contains or consists of English
version software, Distributor's appointment only grants to Distributor a license
to distribute such software, and does not transfer any right, title or interest
to any such software to Distributor or Distributor's customers. Company shall
sell and transfer title to the Product to Distributor only to the extent that
the Product consists of non-software items on the terms specified herein. Use of
the terms "sell," "license," "purchase," "license fees" and "price" shall be
interpreted in accordance with this Section.
2.4 RELATIONSHIP
The relationship hereby established between Company and Distributor
shall be solely that of seller and buyer. Neither party shall have the right to
hold itself out to third parties as a representative of the other party or to
enter into contracts on behalf of the other party. No agency is to be created by
this Agreement.
ARTICLE 3
SALES PROMOTION
3.1 OBLIGATIONS OF DISTRIBUTOR
Distributor hereby agrees to perform the following covenants during
the term of this Agreement, each of which constitutes a material condition
precedent to Company's obligations to perform its covenants under this
Agreement.
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(a) Distributor shall actively and continually promote the sale
of the Product within the Territory. Distributor shall order from Company a
minimum of thirty (30) units of the Product under this agreement at the current
listed price (Schedule B) upon execution of this agreement. The purchase order
shall specify the delivery schedule but Distributor shall take delivery of the
Product ordered no less than three (3) units per month starting from September,
2005. If Distributor sells more than 50 instruments during the first year under
this agreement, EST will provide the Distributor with a sales incentive payment
equal to 5% of the listed price paid by the Distributor for the instruments
only. This 5% incentive will be calculated based on the total number of base
unit of the instruments sold on the year excluding training, accessories,
consumables and any other type of costs. This incentive payment shall be paid to
the Distributor within 30 days after the sales data has been submitted by
Distributor and properly verified by EST.
(b) Distributor shall maintain a stock of inventory of the
Product sufficient at all times to meet the demand for the Product within the
Territory.
(c) Distributor shall provide, at competitive prices, complete
and prompt installation service and warranty and after-warranty maintenance and
repair service for all units of the Product located in the Territory that were
sold by or for Distributor. Such warranty coverage shall be at least equivalent
to the warranty offered by Company to purchasers of the Product from Company
from time to time.
(d) Distributor shall maintain sufficient facilities and employ
a sufficient number of trained personnel so as to effectively perform
Distributor's obligations set forth in this Agreement. Distributor shall
maintain a level of quality in all aspects of its operations regarding the
Product at least equal to that maintained by Company in Company's operations.
(e) Distributor shall maintain accurate records of all
purchasers of the Product.
(f) Distributor shall: (i) conduct business in a manner that
reflects favorably at all times on Company and the good name, good will and
reputation of Company; (ii) avoid deceptive, misleading or unethical practices
that are or might be detrimental to Company, the Product or the public; (iii)
make no false or misleading representations with regard to Company or the
Product; (iv) not publish or employ, or cooperate in the publication or
employment of, any misleading or deceptive advertising material with regard to
Company or the Product; (v) make no representations, warranties or guarantees to
customers or to the trade with respect to the specifications features or
capabilities of the Product that are inconsistent with the literature
distributed by Company; (vi) not enter into any contract or engage in any
practice detrimental to the interests of Company in the Product; and (vii) sell
and deliver the Product only in the Territory.
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(g) If any approval with respect to this Agreement, or the
notification or registration thereof, shall be required at any time during the
term of this Agreement with respect to giving legal effect to this Agreement in
the Territory, or with respect to compliance with exchange regulations or other
requirements so as to assure the right of remittance abroad of U.S. dollars
pursuant to Section 4.3(a) hereof or otherwise, Distributor shall immediately
take whatever steps may be necessary in this respect, and any charges incurred
in connection therewith will be for the account of Distributor. Distributor
shall keep Company currently informed of its efforts in this connection. Company
shall be under no obligation to ship the Product to Distributor hereunder until
Distributor has provided Company with satisfactory evidence that such approval,
notification or registration is not required or that it has been obtained.
(h) Distributor shall take any and all actions reasonably
necessary to create a local market for the Product, including promoting the
sale, distribution and marketing of the Product and providing services to
customers in the Territory, which shall include maintaining qualified personnel
as may be required to fulfill its responsibilities under this Agreement and
implementing and assisting in promotional and merchandising campaigns.
3.2 OBLIGATIONS OF COMPANY
(a) In addition to Company's obligations set forth in Article
10, upon Distributor's request, Company shall provide Distributor, free of
charge, with a reasonable quantity of samples of data, catalogs, brochures or
other promotional materials, which may be necessary to promote the sale of the
Product in the Territory.
(b) Company shall be responsible for packaging the Product in a
manner appropriate for export to ensure protection from damage caused in
transport to the Territory.
3.3 SALES INCENTIVES
If Distributor sells more than 50 instruments during the first year
under this agreement, EST will provide the Distributor with a sales incentive
payment equal to 5% of the listed price actually paid by the Distributor for the
instruments only. This 5% incentive will be calculated based on the total number
of base unit of the instruments sold on the year excluding training,
accessories, consumables and any other type of costs. This incentive payment
shall be paid to the Distributor within 30 days after the sales data has been
submitted by Distributor and properly verified by EST.
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ARTICLE 4
TERMS AND CONDITIONS OF SALE
4.1 PURCHASE ORDERS
(a) Except for the special terms provided in Section 3.1(c) and
Section 3.2(a), Company shall sell the Product to Distributor, and Distributor
shall purchase the Product from Company pursuant to purchase orders ("Purchase
Order(s)") submitted to Company in accordance with the terms and conditions of
this Agreement. Purchase Orders shall be binding upon the parties unless Company
otherwise notifies Distributor in writing within seven (7) days after Company's
receipt of a Purchase Order. All Purchase Orders shall state the following
terms, which shall be in full conformity with the terms and conditions of this
Agreement:
(i) The Purchase Order number and date;
(ii) The type and quantity of Product ordered;
(iii) The unit and total price of the Product ordered;
(iv) The delivery date or dates; and
(v) All relevant shipping information, including the
destination to which the units of Product are to be shipped.
(b) In the event of any discrepancy between the provisions of
this Agreement and any Purchase Order, the provisions of this Agreement shall
prevail.
(c) Each Purchase Order submitted pursuant to this section shall
be firm and not subject to revocation or modification by Distributor after
Company's receipt of that Purchase Order. Company shall have the right to accept
or reject any Purchase Order in whole or in part. Company may accept a Purchase
Order either by written notice to Distributor or by shipment of the Product;
provided, however, that acceptance by shipment shall only be deemed to be
acceptance of the parts of the Purchase Order to which that shipment relates.
(d) An individual sales contract shall be concluded between the
parties only upon any acceptance of all or part of a Purchase Order by Company
pursuant to this Section. The terms and conditions of that sales contract shall
be limited to the terms contained in the Purchase Order in compliance with
Section 4.1 (to the extent accepted by Company), without regard to any standard
terms and conditions or "boilerplate" appearing on the face or reverse side
thereof, and the terms and conditions set forth in this Agreement. Unless
otherwise expressly agreed in a single writing by both parties, no other terms
and conditions, including, without limitation, any preprinted or other terms and
conditions set forth in the Purchase Order, shall be part of that sales
contract.
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4.2 PRICE AND LICENSE FEES
(a) The unit prices and license fees for the Product shall be
based on the published price list in effect at the time of placing the purchase
order. Company may change any of those prices and license fees from time to
time, by giving a thirty (30) days notice to Distributor, and such changed
prices and license fees shall apply with respect to all Purchase Orders
submitted to Company on or after the effective date of such price or license fee
change.
(b) Company's prices and license fees do not include any
national or local sales, use, value added or other taxes, customs duties, or
similar tariffs and fees which Company may be required to pay or collect upon
the delivery by Company of the Product or upon collection of the prices and
license fees or otherwise. Should any such tax, levy, duty, tariff or fee be
payable, Distributor agrees to pay the same in full and to indemnify Company for
any claim with respect thereto. Distributor will pay any withholding taxes
required by applicable law and will supply Company with evidence of such payment
of withholding tax in a form acceptable to Company.
(c) In the event Company increases or decreases the price or
license fees to Distributor for Product, the increase or decrease shall apply to
any order received by Company after the effective date of the increase or
decrease; and any order or portion thereof to be shipped after the effective
date of the increase or decrease regardless of the date the order was received;
provided, however, that any order or portion thereof transmitted by Distributor
prior to Company's announcement of the increase or decrease and affected
thereby, may be cancelled without penalty by Distributor by written notice to
Company within ten (10) days of such announcement.
4.3 PAYMENT
(a) All payments shall be made in United States Dollars by bank
wire transfer or by irrevocable and confirmed letter of credit at sight issued
by an internationally reputable bank acceptable to the Company.
(b) Under no circumstances shall Distributor be permitted to set
off or deduct from payments owed to Company hereunder any amounts which
Distributor claims that Company owes to Distributor.
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4.4 DELIVERY AND SHIPMENT
(a) All units of the Product shall be shipped F.O.B. Company's
factory using a carrier selected by Company, unless Distributor requests in
writing the use of a particular carrier. Title to and risk of loss of the units
of Product ordered by Distributor shall pass to Distributor upon delivery to a
common carrier for shipment.
(b) Delivery dates committed by Company require prompt receipt
of all necessary shipping information from Distributor. Unless otherwise
instructed in writing by Distributor, Company shall select the carrier and
method of carriage for the Product and ship the Product freight collect. Company
shall have no liability in connection with shipment of the Product.
(c) Unless Distributor clearly advises Company to the contrary
in writing, Company may make partial shipments on account of Distributor's
orders, to be separately invoiced and paid for when due. Delay in delivery of
any installment shall not relieve Distributor of its obligation to accept the
remaining deliveries.
(d) Company shall use reasonable efforts to meet Distributor's
requested delivery schedules for the Product, but Company reserves the right to
refuse, cancel or delay shipment to Distributor when Distributor's credit is
impaired, when Distributor is delinquent in payment or fails to meet other
credit or financial requirements established by Company, or when Distributor has
failed to perform its obligations under this Agreement. Should total orders for
the Product exceed Company's available inventory, Company shall allocate its
available inventory and make deliveries on a basis Company deems equitable, in
its sole discretion, and without liability to Distributor on account of the
method of allocation chosen or its implementation. In any event, Company shall
not be liable for any damages, direct, consequential, special or otherwise, to
Distributor or to any other person for failure to deliver or for any delay or
error in delivery of the Product for any reason whatsoever.
ARTICLE 5
INSPECTION, WARRANTY, AND LIMITS ON LIABILITY
5.1 ACCEPTANCE
Upon receipt of units of the Product by Distributor, Distributor
shall inspect them to determine their conformity to the requirements of this
Agreement. If the Product fails to so conform, Distributor shall deliver notice
thereof to Company within thirty (30) days of receipt, which notice shall
contain an explanation of the nature and details of the nonconformity. In the
absence of such timely and proper notice, Distributor shall be deemed to have
accepted all units of the Product included in such shipment.
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5.2 WARRANTY
(a) Company warrants that the Product, as specified in Exhibit
A, delivered hereunder will be free and clear of defects in materials and
workmanship for a period of one hundred eighty (180) days for parts and labor,
and one (1) year for parts only, from the date of delivery. During the warranty
period, Company shall, at its option, upon examination and testing performed in
accordance with Section 5.2(d) below, either repair or replace units of the
Product that are defective.
(b) Company warrants that the software accompanying the Product,
as specified in Exhibit A, for one hundred eighty (180) days from the date of
delivery will execute its programming instructions when properly installed on
the computer for which it is intended, and that the media upon which the
software is recorded will be free from defects in materials and workmanship.
Distributor's sole remedy for defective software will be to return the diskettes
to Company for replacement.
(c) Company's warranties for the Product do not apply to
expendable components of the Product, or to nonconformities which result in
whole or in part from actions of any party other than Company, from improper or
unauthorized use of the Product or use in a manner contrary to Company's
instructions or for which it was not designed. In particular, no warranties
apply to defects or damage to the Product resulting from improper or inadequate
maintenance by the customer, customer-supplied software or interfacing,
unauthorized modification or misuse, operation outside of the environmental
specifications for the Product, duty cycle abuse, and improper site preparation
or maintenance. Further, Company's warranty does not cover the replacement of
consumable parts, including the Sample Trap, Saw Detector, Column, and Water
Trap, as described in Exhibit A.
(d) Except as otherwise provided in Section 6.1, if any Product
fails to conform to the warranties set forth in Sections 5.2(a) and 5.2(b),
during the applicable warranty period, Distributor shall, no later than thirty
(30) days after Distributor learns or should have learned of such nonconformity
and no later than thirty (30) days after the end of that warranty period, notify
Company of such nonconformity and all details with respect thereto, and shall
promptly return the Product, transportation and insurance prepaid by
Distributor, to Company's designated facility for examination and testing. Any
services and/or repairs will be performed either at Company's headquarters or at
a repair facility designated by Company. Upon verification of that
nonconformity, Company will, at Company's option, either repair or replace the
Product, and promptly return the Product to Distributor during the applicable
warranty period. Company shall pay the costs of shipping the Product back to
Distributor.
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(e) Company makes no warranty concerning the infringement by the
Product of any intellectual property rights arising under the laws of any
jurisdiction.
(f) COMPANY MAKES NO WARRANTY REGARDING CLAIMS OR DAMAGE ARISING
OUT OF ANY FAILURE OF THE PRODUCT TO DETECT THE PRESENCE OF ANY HARMFUL
CHEMICALS, COMPOUNDS OR CONTAMINANTS.
(g) THE WARRANTIES SET FORTH IN THIS SECTION 5 ARE COMPANY'S
SOLE AND EXCLUSIVE WARRANTIES WITH RESPECT TO THE PRODUCT OR THIS AGREEMENT.
COMPANY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS OF THE PRODUCT FOR ANY PARTICULAR
PURPOSE. THE REMEDY FOR BREACH OF WARRANTY PROVIDED IN THIS SECTION 5 REPRESENTS
DISTRIBUTOR'S EXCLUSIVE REMEDY THEREFOR.
5.3 LIMITATION OF LIABILITY
(a) COMPANY'S LIABILITY TO DISTRIBUTOR WITH RESPECT TO ANY UNIT
OF PRODUCT SHALL IN NO EVENT EXCEED THE PURCHASE PRICE OF THAT UNIT. COMPANY'S
TOTAL AGGREGATE LIABILITY TO DISTRIBUTOR ARISING OUT OF OR RELATED TO THIS
AGREEMENT SHALL IN NO EVENT EXCEED THE AMOUNT PAID BY DISTRIBUTOR FOR ALL THE
PRODUCTS PURCHASED BY DISTRIBUTOR FROM COMPANY HEREUNDER. IN NO EVENT SHALL
COMPANY BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS AND SERVICES,
LOSS OF USE OR PROFITS, LOSS OF SAVINGS, OR ANY OTHER SPECIAL, INCIDENTAL,
INDIRECT, OR CONSEQUENTIAL EXEMPLARY OR PUNITIVE DAMAGES, ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE USE OR PERFORMANCE OF THE PRODUCT, HOWEVER
CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN AN ACTION FOR CONTRACT OR TORT
(INCLUDING NEGLIGENCE) OR OTHERWISE, AND WHETHER OR NOT COMPANY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
(b) Each limitation on liability or limited or exclusive remedy
set forth in this Agreement is independent of any other limitation or remedy,
and if any such limitation or remedy fails of its essential purpose or is
otherwise held to be unenforceable, that shall not affect the validity of any
other such limitation or remedy.
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ARTICLE 6
PRODUCT CHANGES AND AVAILABILITY
6.1 PRODUCT MODIFICATIONS
(a) Company may, without notice to Distributor, make changes to
the Product which relate to form, fit or function but which do not affect the
Product's compliance with the specifications set forth in Exhibit A. Company may
change specifications upon notice to Distributor, and such change shall apply to
any units of the Product subsequently ordered by Distributor.
(b) If Company believes that a change is required to previously
delivered units of the Product to permit the compliance of the Product with the
specifications set forth in Exhibit A, attached hereto, or with changed safety
standards or governmental regulations, Company may provide to Distributor, at
Company's cost, a field change order explaining the change and parts required
for the implementation of the field change order, which Distributor shall then,
at Distributor's cost, implement with respect to those units of Product.
6.2 AVAILABILITY OF THE PRODUCT
For a period of five (5) years from the delivery of the first unit
of the Product to Distributor under this Agreement, Company shall make the parts
set forth on Exhibit A, attached hereto, available for purchase by Distributor
on reasonable terms and conditions for the necessary maintenance and support of
the Product. If Company elects to discontinue supply of the Product parts during
such five (5)-year period, Company may, in lieu of continuing the supply of
those parts pursuant to this Article 6, supply to Distributor, at no cost, the
vendor lists as to such discontinued parts, or the plans for their manufacture.
ARTICLE 7
TRADEMARKS, TRADE NAMES, LOGOS, DESIGNATIONS AND COPYRIGHTS
7.1 USE DURING AGREEMENT
During the term of this Agreement, Distributor is authorized by
Company to use the trademarks, trade names, logos and designations that Company
uses for the Product solely to identify the Product in connection with
Distributor's advertisement, promotion, distribution and sale of the Product and
shall use only Company's trademarks, trade names, logos and designations in
connection therewith. Distributor's use of such trademarks, trade names, logos
and designations will be in accordance with Company's policies in effect from
time to time. Distributor will include on each unit of Product that it
distributes, and on all containers and storage media therefor, all patent
markings and trademark, copyright and other notices of proprietary rights placed
by Company on the Product.
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7.2 DISTRIBUTOR DOES NOT ACQUIRE PROPRIETARY RIGHTS
Distributor has paid no consideration for the use of Company's
trademarks, trade names, logos, designations or copyrights, and nothing
contained in this Agreement will give Distributor any right, title or interest
in any of them.
7.3 NO CONTINUING RIGHTS
Upon expiration or termination of this Agreement for any reason,
Distributor shall immediately cease all display, advertising and use of all
Company trademarks, trade names, logos and designations and will not thereafter
use, advertise or display any trademark, trade name, logo or designation which
is, or any part of which is, similar to or confusing with any trademark, trade
name, logo or designation associated with any Product.
ARTICLE 8
TERMINATION
8.1 EVENTS OF TERMINATION
(a) This Agreement shall automatically terminate one (1) year
from the Effective Date, unless renewed by mutual agreement within sixty (60)
days prior to the expiration date of this agreement.
(b) Upon the completion of this first year agreement, BEIJING
R&D may renew this agreement under 7.1 if it has met all its obligations under
the agreement or consider changing its status as a non-exclusive distributor.
(b) Either party may, in addition to any other available
remedies, terminate this Agreement, and any individual sales contracts concluded
pursuant hereto, at any time by delivery of written notice to the other party
stating such decision to terminate, if:
(i) The other party fails to perform any duty or other
obligation required by this Agreement when due and, if that failure is curable,
fails to cure it within thirty (30) calendar days of receipt of notice from the
non-breaching party; provided, however, that if the obligation is one for
payment of money, it must be cured within five (5) calendar days following
receipt of notice;
(ii) The other party files or has filed against it a
voluntary or involuntary bankruptcy proceeding, a receiver or similar official
is appointed for any of the other party's property, the other party become
insolvent or the other party makes an assignment for the benefit of creditors;
or
(iii) The other party sells, assigns or otherwise transfers
a substantial part of its business or assets or otherwise reorganizes, or there
is any change in ownership or control of the other party.
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8.2 DUTIES UPON TERMINATION
(a) If a party has the right to terminate this Agreement
pursuant to Section 8.1 or has demanded cure of a default pursuant to Section
8.1(b), that party may also suspend its own performance under this Agreement and
any individual sales contracts concluded pursuant hereto and cause all amounts
owed to it by the other party which are not yet due to become immediately due
and payable.
(b) Except as otherwise stated herein, the termination or
expiration of this Agreement shall not affect any rights of the parties which
accrued hereunder prior to such termination or expiration.
(c) NEITHER COMPANY NOR DISTRIBUTOR SHALL BE LIABLE TO THE OTHER
FOR DAMAGES OF ANY KIND, INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGES, ON
ACCOUNT OF THE TERMINATION OR EXPIRATION OF THIS AGREEMENT IN ACCORDANCE WITH
THIS SECTION 8. DISTRIBUTOR WAIVES ANY RIGHT IT MAY HAVE TO RECEIVE ANY
COMPENSATION OR REPARATIONS ON TERMINATION OR EXPIRATION OF THIS AGREEMENT UNDER
THE LAW OF THE TERRITORY OR OTHERWISE, OTHER THAN AS EXPRESSLY PROVIDED IN THIS
AGREEMENT. Neither Company nor Distributor shall be liable to the other on
account of termination or expiration of this Agreement for reimbursement or
damages for the loss of goodwill, prospective profits or anticipated income, or
on account of any expenditures, investments, leases or commitments made by
either Company or Distributor or for any other reason whatsoever based upon or
growing out of such termination or expiration. Distributor acknowledges that (i)
Distributor has no expectation and has received no assurances that any
investment by Distributor in the promotion of the Product shall be recovered or
recouped or that Distributor shall obtain any anticipated amount of profits by
virtue of this Agreement, and (ii) Distributor shall not have or acquire by
virtue of this Agreement or otherwise any vested, proprietary or other right in
the promotion of Company, the Product or in "goodwill" created by its efforts
hereunder. THE PARTIES ACKNOWLEDGE THAT THIS SECTION HAS BEEN INCLUDED AS A
MATERIAL INDUCEMENT FOR COMPANY TO ENTER INTO THIS AGREEMENT AND THAT COMPANY
WOULD NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE LIMITATIONS OF LIABILITY
SET FORTH HEREIN.
8.3 EFFECT OF TERMINATION OR EXPIRATION
Upon termination or expiration of this Agreement for cause:
(a) Company, at its option, may reacquire any or all the units
of the Product then in Distributor's inventory at prices and license fees not
greater than seventy five per cent (75%) of the prices and license fees paid by
Distributor for such units (or, if the units of the Product are not in unopened
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factory sealed boxes, fifty percent (50%) of such prices and license fees). Upon
receipt of any units of the Product so reacquired from Distributor, Company
shall issue an appropriate credit to Distributor's account.
(b) The due dates of all outstanding invoices to Distributor for
the Product automatically shall be accelerated so they become due and payable on
the effective date of termination, even if longer terms had been provided
previously. All orders or portions thereof remaining unshipped as of the
effective date of termination shall automatically be cancelled.
ARTICLE 9
COMPLIANCE WITH EXPORT REGULATIONS
Distributor shall comply with all applicable provisions of the
United States Export Administration Regulations with respect to all units of the
Product delivered hereunder and shall provide Company with all requested
documentation and data necessary or desirable for Company to be able to verify
such compliance.
ARTICLE 10
MANUALS, SUPPORT AND TRAINING
10.1 MANUALS
Company shall deliver one reproducible set of the applicable
installation, operation and maintenance manuals for the Product prior to or with
the first units of Product delivered to Distributor. These documents will be
supplied in the English language. During the term of this Agreement, Company
shall provide to Distributor, at no charge, all changes to such manuals within
thirty (30) days after their release by Company. During the term of this
Agreement, Distributor may reproduce such manuals, to the extent required to
supply such manuals to Distributor's customers for the Product. Distributor
shall reproduce any copyright notices appearing on such manuals delivered by
Company. Individual manuals will not be included with the units of Product
delivered by Company, and Company shall have no further obligations or
liabilities regarding such manuals or the contents thereof except as expressly
stated herein.
10.2 SUPPORT AND TRAINING
During the term of this Agreement, Company shall, upon
Distributor's request, make technical support and training regarding the Product
available to Distributor at Company's prevailing rates and at times mutually
acceptable to the parties.
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ARTICLE 11
NOTICES
Any and all notices required or authorized hereunder shall be in
writing and shall be delivered by any reasonable means, including by personal
delivery, registered or certified mail, internationally recognized courier
service or telecopier (with written confirmation of transmission and receipt),
to the following address of the party to which that notice is to be given:
To Company: Electronic Sensor Technology, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000, XXX
Attn: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
To Distributor: Beijing R&D Technology Co., Ltd.
Xx. 0, Xxxxx Xxxxx Xxxx, Xxxx. X,
Room 217-218
Xxxxxxxx Xxxxxxxx
Xxxxxxx 000000, Xxxxx
Attn. Liu Jinzhong
Telecopier: 011-8610-8463-6338
Telephone: 000-0000-0000-0000
or to such other address of which a party may subsequently notify the other
party. All notices shall be deemed to be received at the time they are sent in
accordance with the provisions of this Article 11.
ARTICLE 12
FORCE MAJEURE
12.1 FORCE MAJEURE EVENT
Any delay or failure in the performance of any part or the whole of
this Agreement by either party hereto shall be excused, subject to Article 14
hereof, if and to the extent caused by the earthquake, typhoon, or other natural
disaster, war, warlike condition, revolution, blockade, embargo or governmental
order, rule or restriction, and the affected part of this Agreement shall be
suspended until the force majeure circumstances have ended.
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12.2 NOTICE
Neither delay nor failure of performance by the other party shall
be excused unless the party experiencing the force majeure sends written notice
of such delay or failure and the reason therefore to the other party within
seven (7) days from the time the force majeure situation becomes apparent.
ARTICLE 13
ENTIRE AGREEMENT
This Agreement (including the Exhibits attached hereto) constitutes
the entire agreement between the parties hereto concerning the subject matter
hereof and supersedes all previous negotiations, agreements and commitments
related thereto. Neither this Agreement nor any rights hereunder shall be
released or modified in any manner, except by a written document signed by a
duly authorized officer or representative of each of the parties.
ARTICLE 14
NON-WAIVER
Any delay or failure by either party to enforce at any time any of
its rights under any provision of this Agreement shall not be deemed to be a
waiver of that party's right thereafter to enforce those rights or a waiver of
such provision or of that party's right to resort to any remedy available to it.
A waiver on one occasion shall not be construed as a waiver of any right on any
future occasion.
ARTICLE 15
ARTICLE HEADINGS
The headings to the Articles and Sections of this Agreement are for
reference only and shall not be considered in interpreting this Agreement.
ARTICLE 16
SEVERABILITY
If a court or other governmental entity holds or asserts that any
part of this Agreement is unenforceable or invalid, or requires the modification
of any part of this Agreement, Company may, at its option, either terminate this
Agreement by notice to Distributor, or continue the Agreement with the remaining
part, including any such modification, given full force and effect.
ARTICLE 17
ASSIGNMENT
Distributor shall not assign or delegate any of its rights or
obligations arising under this Agreement, whether voluntarily or by operation of
law, and any such purported assignment or delegation shall be void and without
effect, unless Distributor obtains the consent of Company. Any potential
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assignee must agree to abide by the terms and conditions of the Agreement.
"Assignment" shall be deemed to include the transfer or sale of substantially
all of the assets of, or majority interest in the voting stock of, either party,
or the merger of Distributor with one or more third parties, and "assignee"
shall be deemed not to include subsidiaries or parents of the parties.
ARTICLE 18
CONFIDENTIALITY
18.1 CONFIDENTIAL INFORMATION
Each party shall keep strictly confidential as against any third
parties all confidential information obtained from the other party in connection
with this Agreement, and shall use such information only for the purposes
contemplated hereunder. Confidential information shall be deemed to include,
without limitation, trade secrets, manufacturing processes, design
specifications, software programs, research developments, business activities
and operations, inventions and engineering concepts. All such written
information and any oral confidential information reduced to writing shall be
clearly marked "Confidential." The confidentiality obligations set forth herein
shall not apply to:
(a) disclosures of information required by law;
(b) information known to one party hereto prior to the date
first above-written and not obtained directly from the other party;
(c) information required by Distributor for the purpose of
marketing the Product in the Territory, which may only be used in the sale,
distribution, marketing and maintenance of the Product in the Territory during
the term of this Agreement and for no other purpose or for any other party's
benefit; or
(d) information which now or later becomes available to the
public, provided such occurrence is not the result of an improper act or
omission of either party.
18.2 TERM
The obligation to maintain in confidence all confidential
information learned or disclosed hereunder shall survive termination of this
Agreement, and each party covenants to maintain such confidentiality for a
period for five (5) years after such termination. Upon termination of this
Agreement, all confidential information represented in written form or any other
media, including but not limited to papers, documents, designs, manuals,
specifications, prototypes, schematics, computer software, or any other
materials or models, shall be returned to the party which furnished same,
together with any reproductions or copies thereof.
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ARTICLE 19
GOVERNING LAW
This Agreement and the performance of all obligations hereunder
shall be governed by and construed in accordance with the laws of the State of
California without regard to any principles governing conflicts of laws or the
provisions of the 1980 United Nations Convention on Contracts for the
International Sale of Goods.
ARTICLE 20
ENFORCEMENT OF RIGHTS
20.1 CUMULATIVE REMEDY
The remedies available to each party under this Agreement, at law
or in equity, shall be deemed to be cumulative, and the election by a party of
one remedy shall not be deemed to bar that party from simultaneously or
subsequently pursuing any other remedy.
20.2 PREVAILING PARTY
If a party commences any action or proceeding against the other
party to enforce this Agreement or any rights related thereto, the prevailing
party in such action or proceeding shall be entitled to recover from the other
party the reasonable attorneys' fees and other costs and expenses incurred by
that prevailing party in connection with such action or proceeding and in
connection with enforcing any judgment, award or order thereby obtained.
20.3 JURISDICTION
All disputes arising out of this Agreement shall be subject to the
exclusive jurisdiction and venue of, at Company's option, the California state
courts located in Ventura County, California, or the United States District
Court for the Central District of California, and Distributor consents to the
personal and exclusive jurisdiction and venue of those courts and waives any
other venue to which Distributor may be entitled; provided, however, that
Company may bring an action against Distributor in any other jurisdiction in
which proper jurisdiction over Distributor may otherwise be obtained.
20.4 LIMITATION OF ACTION
No action for breach of this Agreement may be brought by
Distributor against Company more than one (1) year after the cause of action
accrues.
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ARTICLE 21
ASSURANCES
The parties shall each from time to time, at the request of the
other, and without further consideration, execute and deliver such instruments,
and take such actions, as may be reasonably necessary to effect the transactions
contemplated by this Agreement.
ARTICLE 22
ENGLISH LANGUAGE TEXT
The definitive text of this Agreement shall be in the English
language.
ARTICLE 23
COUNTERPARTS
This Agreement may be executed in counterparts and shall have the
same force and effect as if all parties had executed one document.
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SIGNATURE PAGE FOR INTERNATIONAL DISTRIBUTORSHIP AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Agreement as of the Effective Date.
"Company" ELECTRONIC SENSOR TECHNOLOGY, INC.
By:
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Its: President and CEO
Date:
"Distributor" Beijing R&D Technology Co., Ltd.
By:
---------------------------
Name:
Its:
Date:
EXHIBIT A
PRODUCT DESCRIPTION AND
SPECIFICATIONS
(See attached sheets)
o Model 4100 Specification Sheet
o Model 7100 specification Sheet
o Model 3100 Specification Sheet
o Model 3200 Specification Sheet
o Model 3300 Operation Manual
EXHIBIT B
o International Price List No. 214, Effective April 1, 2005 (See
Attached).
o Distributor Price shall be twenty per cent (20%) off the listed
price or in case the training is provided by the Distributor, the
net price after deducting the training cost (currently is $2400).
o Deliveries shall be based on the schedules specified in the
purchase orders placed by the Distributor and accepted and
confirmed by EST.
