Exhibit 10.17

 

THIS AGREEMENT is made on the 30th day of August 2022

 

BETWEEN:-

 

(1) BOXASONE LIMITED, a limited liability company incorporated in Hong Kong whose registered office is at Unit C, 19/F, World Tech Centre, 95 How Ming Street, Kwun Tong, Hong Kong (the “BAO”); AND
   
(2) FLEXSTREAM ASIA LIMITED, a limited liability company incorporated in Hong Kong whose registered office is at Room 1005 Technology Plaza, 651 King’s Road, North Point, Hong Kong (the “FLX”).

 

WHEREAS:

 

BAO agrees to engage FLX and FLX agrees to provide to BAO the services as described in Schedule 1 (the “Services”), subject to the terms and conditions set out in this Agreement.

 

NOW IT IS HEREBY AGREED as follows:

 

1.DEFINITIONS

 

1.1In this Agreement, unless explicitly stated as otherwise, the expressions listed below shall have the following meanings:

 

  (a) “Fees” means the fees as specified in Schedule 1 payable by BAO from time to time to FLX for provision of the Services;
     
  (b) “HKIAC” is as defined in Clause 17.2;
     
  (c)  “Services” means the services as detailed in Schedule 1; and
     
  (d) “Term” means the term as specified in Schedule 1;

 

1.2Where the context permits, words in the singular shall include the plural and vice versa and words importing the masculine gender shall include the feminine and neuter genders and vice versa.

 

1.3The headings to the provisions of this Agreement are for ease of reference only and shall not affect the interpretation or construction of them.

 

1.4References to clauses, schedules and annexes are, unless otherwise stated, to clauses, schedules and annexes of and to this Agreement which together form an integral part of this Agreement.

 

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2.PROVISION OF SERVICES

 

2.1In consideration of BAO paying the Fees to FLX in the manner described in Clause 3, FLX agrees to provide the Services to BAO subject to the terms and conditions herein and in Schedule 1.

 

2.2BAO and FLX shall cooperate in good faith in all matters relating to the provision of Services including but not limited to obtaining all consents, licences or approvals necessary for FLX to fulfil its obligations hereunder.

 

2.3BAO shall respect independent performance of the Services by FLX and shall communicate with FLX for any suggestions and FLX may assign, subcontract or delegate any rights, duties, obligations or liabilities under this Agreement to any third parties with the consent of BAO.

 

2.4FLX shall be entitled to deploy resources of all forms or manners as necessary for the performance of the Services under this Agreement. BAO is required to provide all necessary actions and assistance, including but not limited to furnishing documents, preparing & signing agreements & documents, providing confirmation, acceptance & endorsement of all relevant matters, to be performed and completed by BAO within a reasonable period of time as requested by FLX for FLX to fulfil its obligations under this Agreement.

 

2.5FLX shall perform system integration in accordance to the specifications in Schedule 2 and to enable the network connectivity and interoperability between the system, smart vending devices and the server.

 

2.6The deployment of the System shall be subjected to the satisfaction of the Testing and Commissioning procedures as reasonably required by BAO. Commissioning tests shall be performed to assess the overall functionality of the system as per the standards and design specifications. Each components of the System must be individually tested to ensure that it install correctly. Any comments regarding abnormal operation to failed tests shall be recorded in the comments section of the commissioning schedule.

 

2.7As soon as reasonably possible after the satisfactory completion of the Testing and Commissioning, BAO shall provide a written notification to certify that the platform has passed the Testing and Commissioning.

 

3.PAYMENT

 

3.1BAO shall pay the Fees to FLX for provision of the Services in the manner set out in Schedule 1A. 1B, and 1C. FLX shall not be responsible for all unforeseeable costs, tax, charges, and expenses incurred for and in connection with the provision of the Services by FLX except as expressly provided otherwise in this Agreement or approved in advance in writing by FLX.

 

3.2All payment shall be made within thirty (60) days from the date of invoices issued by FLX to BAO.

 

3.3Any delay in payment shall entitle FLX for the costs and expenses incurred in connection with the collection of overdue payments, whether made in or out of court, without prejudice to any rights or remedies legally available to FLX.

 

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4.TERMINATION

 

4.1This Agreement shall terminate upon the expiry of the Term specified in Schedule 1 unless extended by mutual agreement by the parties in writing or terminated earlier pursuant to the terms of this Agreement.

 

4.2This Agreement may be terminated by either party with a 30 days’ notice without cause.

 

4.3The expiration or termination of this Agreement for whatever cause shall be without prejudice to any pre-existing and/or accrued rights and obligations of the parties hereunder.

 

4.4Clauses 5, 6, 7, 11, 12, 13, 14 and 17 and those terms which by their nature should survive termination shall continue to apply after expiration or termination of this Agreement for whatever reason.

 

5.REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

 

5.1Each party represents and warrants that it has the authority necessary to enter into this Agreement and to do all things necessary to procure the fulfilment of its obligations in terms of this Agreement.

 

5.2FLX represents, warrants and undertakes that the services will be duly performed and completed in a diligent, professional and business-like manner.

 

6.LIMITATION OF LIABILITY

 

NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY, FOR ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES. THIS LIMITATION OF LIABILITY WILL APPLY REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT OR TORT, INCLUDING NEGLIGENCE, OR FOR ANY LOSS OF REVENUE, DATA, OR PROFITS, AND INDEPENDENT OF ANY FAILURE OF ESSENTIAL PURPOSE OF THE WARRANTIES AND REMEDIES PROVIDED HEREUNDER. THIS LIMITATION OF LIABILITY WILL APPLY WHETHER OR NOT THE OTHER PARTY HAS BEEN APPRISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

7.CONFIDENTIALITY

 

7.1The parties agree to keep and procure to be kept secret and confidential any and all written and/or oral information of any kind relating to the terms of this Agreement and the business of the other party obtained from the other party pursuant to this Agreement or prior to it and to disclose the same only to those of its employees or contractors directly involved with the services and only to the extent necessary for each of them to perform his duties under this Agreement. The parties shall impose the above obligation on these persons.

 

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7.2The foregoing obligations shall not apply, however, to any part of such information which:

 

a)was already in the public domain or which becomes so through no fault of the receiving party;
   
 b)was already known to the receiving party prior to receipt thereof; or

 

c)was disclosed to the receiving party by a third party owing no duty of confidentiality towards the disclosing party in respect thereof.

 

7.3Subject to the provisions in Clause 7.2 above, these obligations of confidentiality shall survive the expiration or termination of this Agreement.

 

8.GENERAL PROVISIONS RELATING TO THE SYSTEM

 

8.1FLX warrants that for the period of 3 years from the date of completion of Testing and Commissioning, FLX is obliged to repair and fix the Smart Devices for the benefit of BAO upon any defects and systems errors. In any event that BAO require any system upgrade, FLX will provide support to BAO for the period of 3 years from the date of completion of Testing and Commissioning.

 

9.ASSIGNMENT

 

9.1Neither party shall assign or otherwise transfer its interest in this Agreement or its rights and obligations hereunder whether in whole or in part without the prior written consent of the other, except in circumstances of corporate succession by merger, consolidation, or other corporate reorganisation in relation to either party’s business.

 

10.ENTIRE AGREEMENT

 

10.1The parties hereto declare that this Agreement comprises the complete and exclusive agreement between them which supersedes all previous understandings, negotiations and proposals, whether oral or in writing. In case of any inconsistency, conflict with or ambiguity of any terms and conditions which are incorporated by reference, the terms and conditions of this Agreement shall prevail.

 

10.2Save as expressly provided, no alteration, modification, amendment, waiver, consent or discharge shall be binding upon either party unless in writing and signed by both parties.

 

11.NOTICES

 

11.1Any notice required to be given under this Agreement shall be in writing and shall be sent to the address of the party as specified in this Agreement or such other address as that party shall designate by notice given in accordance with the provisions of this Clause from time to time. Any such notice shall be delivered by hand or by registered prepaid post and shall be deemed to have been served if delivered by hand upon signed receipt by the appointed representative of either party for the time being or if by post 48 hours after the day of posting.

 

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12.LEGAL RELATIONSHIP

 

12.1Nothing herein shall create or imply any employment, principal-agent, joint venture or partnership relationship between BAO on the one hand, and FLX on the other.

 

12.2Either party acknowledges that it is not part of the other party’s organisation and shall have no authority to commit or to bind the other party in any way in connection with the business, affairs or otherwise of the other party.

 

13.SEVERABILITY

 

13.1In the event that any provision contained in this Agreement should, for any reason, be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement. Instead this Agreement shall be construed as if such invalid or unenforceable provision had not been contained herein.

 

14.WAIVER

 

14.1No failure or delay on the part of any party to exercise any right, power or remedy under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise by a party of any right, power or remedy. The rights, powers and remedies provided herein are cumulative and are not exclusive of any rights, powers or remedies at law.

 

15.Force Majeure

 

15.1Neither party shall be liable for any delays or failures attributable to its being affected by an Event of Force Majeure, but the party so affected shall use best endeavours to resume performance as quickly as possible and shall promptly give the other party full particulars of the failure or delay and consult with the other party concerning the failure or delay from time to time as appropriate. If any such delay or failure on the part of the FLX continues for a period of three (3) months, BAO shall be entitled to terminate this Agreement and/or any services provided under this Agreement immediately on giving written notice to FLX.

 

16.CONTRACTS (RIGHTS OF THIRD PARTIES) ORDINANCE

 

16.1The parties do not intend any term of this Agreement to be enforceable by any person who is not a party to this Agreement pursuant to the Contracts (Rights of Third Parties) Ordinance (Cap 623), and the parties agree that this Agreement shall be excluded from the application of the Contracts (Rights of Third Parties) Ordinance (Cap 623).

 

17.APPLICABLE LAW AND DISPUTE RESOLUTION

 

17.1This Agreement shall be governed by, construed and enforced in accordance with the laws of Hong Kong SAR and the parties hereto agree to be subject to the non-exclusive jurisdiction of the courts of Hong Kong SAR.

 

17.2Notwithstanding Clause 17.1, a complaining party shall have the option to refer any dispute, controversy or claim arising out of or relating to this Agreement or the breach, termination or invalidity thereof, to arbitration in Hong Kong at the Hong Kong International Arbitration Centre (“HKIAC”) with three (3) arbitrators in accordance with the HKIAC Rules in force. Each party shall select one (1) arbitrator and the two (2) arbitrators shall select the third neutral arbitrator who shall be the Chairman of the arbitration panel. The language to be used in the arbitral proceedings shall be English.

 

- END -

 

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IN WITNESS WHEREOF this Agreement has been executed in accordance with the constitution of the respective party on the day and year first above written.

 

SIGNED BY )  
FOR AND ON BEHALF OF )  
BOXASONE LIMITED )  
in the presence of:- )  
  )  
  )  
  )  
__________________________ )  
  )  
  )  
     
     
SIGNED BY )  
FOR AND ON BEHALF OF )  
FLEXSTREAM ASIA LIMITED )  
in the presence of:- )  
  )  
  )  
  )  
  )  
_________________________ )  
  )  
  )  

 

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SCHEDULE 1A

 

Part 1 - The Services

 

FLX shall provide the following services to BAO for the Smart Vending Solution:

 

1.Proof of Concept, Development, Customization, and System Upgrade
2.Smart Vending Solution – Design and Build
3.Smart Vending Solution Cloud Platform
4.Testing and Commissioning Procedure

 

The Technical Specifications are stated in SCHEDULE 2A.

 

The User Terms & Conditions are stated in SCHEDULE 3A.

 

Part 2 – Term, Fees and Timeline

 

1. Term:   From date of this Agreement to 30 November 2023 (both days inclusive) (the “Initial Term”) unless terminated early pursuant to the terms and conditions of this Agreement.
       
2. Fees:  

BAO shall pay the Solution Design, Build, Customization and Setup fees totalling HK$625,000.

 

BAO shall further pay the User License Charges totalling HK$2,850,000 for a Minimum Ordering Quantity (MOQ) of 1,500 Facility Units (@HK$1,900 per Facility Unit) covering the right to use the license for the period from 1 December 2022 to 30 November 2025. The User License Charges is subject to review for the fourth year onwards.

 

BAO shall pay a fee totalling HK$3,475,000, which shall be invoiced upon satisfactory completion of the Testing and Commissioning.

 

For the avoidance of doubt, any services performed by FLX not within the specified scope of areas set out in Part 1 of Schedule 1A to this Agreement shall incur extra fees and costs payable by BAO in the manner as determined by FLX.

 

Item

  

Service

   Estimated Timeline
1  

Proof of Concept, Development, Customization, System Upgrade

  

During November 2022

         
2  

Smart Vending Solution – Design and Build

    
         
3  

Smart Vending Solution Cloud Platform – Customization and Setup

    
         
4   Testing and Commissioning and trial run   1 December 2022

 

 

 

 

SCHEDULE 2A

 

Technical Details

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE 3A

 

User Terms & Conditions

 

1.Service level

 

FLX will provide the tier-2 technical support as followings:

 

1.Provide remote technical support and troubleshooting if any for the client side equipment

 

2.Technical support by email and phone for the Hardware and Software in the business hours (Monday to Friday 09:30 – 17:30 and Saturday 09:30 – 12:30 Sundays and public holidays excluded), with next business day for on-site maintenance after receiving call.

 

3.A hotline number agreed among the contractual parties will be provided. Time to Response on fault call is 4 hours from receiving call during office hours or next business day after office hours.

 

4.After the 1st round remote diagnosis over the phone, an engineer will be dispatched to the site on the next business day for repair or replacement. If the fault is not covered under the warranty, an on-site checking fee of HK$500 will be payable per on-site visit.

 

5.For parts that are not available during the first on-site visit, stock delivery or temporary loan units will be provided on the following business day on a best efforts basis.

 

FLX will provide the tier-3 technical support as followings:

 

1.Technical support and troubleshooting if any for the Cloud Platform

 

2.Technical support by email and phone for the Hardware and Software in the business hours (Monday to Friday 09:30 – 17:30 and Saturday 09:30 – 12:30 Sundays and public holidays excluded), with next business day for on-site maintenance after receiving call.

 

3.Response Time: Within 4 hours or next Business Day, during Business Day

 

 

 

 

Severity definitions

 

FLX shall observe the severity definitions below. Any change of the severity during the Term is subject to mutual agreement.

 

Severity   Definition
       
Catastrophic   ● Service unavailable;
       
    ● All End Users have no access to service;
       
    ● Entire Cloud Platforms down;
       
    ● Critical impact;
       
    ● No alternative available
       
High   ● Service unavailable or partially not available;
       
    ● Individual cloud platform failed;
       
    ● Single point of failure and / or performance issues;
       
    ● Part of End Users have no access to Cloud Platforms or Services;
       
    ● Critical impact, alternative and bypass available
       
Medium   ● Service unavailable or difficult to use;
       
    ● Major functions are not affected;
       
    ● Not critical but restricted function and some operational impact
       
Low   ● Component or service unusable;
       
    ● Bypass or workaround possible, no operational impact;
       
    ● Not critical, deferred maintenance acceptable;
       
    ● Incorrect system report;
       
    ● Documentation fault;
       
    ● Operation queries

 

Service Credit

 

FLX agrees that the payment of Service Credits is not a penalty and is a genuine pre-estimate of loss likely to be suffered by BAO in respect of a failure of Support Services to comply with any Service Level.

 

BAO will be entitled to a Service Credit for breach by FLX of the Service Levels. The Service Credit due for any such breach will be calculated as a percentage of the total Service Fees paid or payable under this Agreement for the affected End Users for the month in which the breach occurred. The applicable percentages are set out in the Service Level Agreement. The total Service Credits due under this Agreement for any month shall not exceed 100% of the total Service Fees payable by BAO to FLX under this Agreement for that month.

 

FLX will process Service Credit claims from BAO during the subsequent month and within forty-five (45) days of receipt.

 

 

 

 

Service Level Agreement (SLA)

 

The table below sets out the Service Level of Support Services.

 

Description   Severity   Response Time  

Target Service Level

(measure monthly)

   Service Credit as a % of Service Fees for affected End Users
Incident Response Time   Catastrophic   1 hour   100%   8%
  High   1 hour   100%   8%
  Medium   6 hours   100%   8%
  Low   2 days   100%   8%
               
Incident Report   Catastrophic   2 working days   100%   20%
  High   2 working days   100%   10%
               
Repetition of Incidents   —   —   Zero   5%
                 
Problem Resolution   Catastrophic   —  

1 week (90%)

4 weeks (100%)

   50%
  High   —  

3 week (90%)

6 weeks (100%)

   40%
  Medium   —  

4 weeks (90%)

10 weeks (100%)

   30%
  Low   —  

6 weeks (90%)

15 weeks (100%)

   20%
               
System / Service Availability   Catastrophic   —   99.5%   50%
  High   —   99%   40%
  Medium   —   98.5%   30%
  Low   —   98%   20%
               
Regular Performance Review Meeting   —   —   100%   Not Applicable
                 
Preventive Maintenance   —   —   100%   Not Applicable

 

FLX shall also maintain the following service levels:

 

    Parameters of Standard Offer   Support Services   Service Credit as a % of Service Fees for affected End Users
Service Provisioning Lead Time
 
New Provision   Lead Time of Inventory Assignment, End User Account Creation, and Storage Quota Update   2 business days   10%
             
RMA   Lead time of RMA Confirmation, and Inventory Assignment   4 weeks   10%
             
 

Lead time to Repair or Replace Faulty Units

(Upon receiving faulty units from BAO)

   30 days   Not Applicable
Suspension   Lead time to suspend Services   8 hours   5%
             
  Lead time to resume Services   8 hours   10%
Termination   Lead time to terminate Services   8 hours   5%
             
Lead Time and Frequency to provide reports
 
    License Activation and Usage Report   Monthly report   Not Applicable
    Storage Usage Report   Monthly report   Not Applicable
    SLA Report   Monthly report   Not Applicable

 

 

 

 

The flow chart below describes the support escalation procedure of the Support Services.

 

 

 

 

 

SCHEDULE 1B

 

Part 1 - The Services

 

FLX shall provide the following services to BAO for the Smart Logistic Solution:

 

1.Proof of Concept, Development, Customization, and System Upgrade
2.Smart Logistic Solution – Design and Build
3.Smart Logistic Solution Cloud Platform
4.Testing and Commissioning Procedure

 

The Technical Specifications are stated in SCHEDULE 2B.

 

The User Terms & Conditions are stated in SCHEDULE 3C.

 

Part 2 – Term, Fees and Timeline

 

1. Term: From date of this Agreement to 30 November 2023 (both days inclusive) (the “Initial Term”) unless terminated early pursuant to the terms and conditions of this Agreement.
     
2. Fees:

BAO shall pay the Solution Design, Build, Customization and Setup fees totalling HK$625,000.

 

BAO shall further pay the User License Charges totalling HK$2,850,000 for a Minimum Ordering Quantity (MOQ) of 1,500 Facility Units (@HK$1,900 per Facility Unit) covering the right to use the license for the period from 1 December 2022 to 30 November 2025. The User License Charges is subject to review for the fourth year onwards.

 

BAO shall pay a fee totalling HK$3,475,000, which shall be invoiced upon satisfactory completion of the Testing and Commissioning.

 

For the avoidance of doubt, any services performed by FLX not within the specified scope of areas set out in Part 1 of Schedule 1B to this Agreement shall incur extra fees and costs payable by BAO in the manner as determined by FLX.

 

Item   Service   Estimated Timeline
1  

Proof of Concept, Development, Customization, System Upgrade

  

During

November 2022

         
2  

Smart Logistics Solution – Design and Build

    
         
3  

Smart Logistics Solution Cloud Platform – Customization and Setup

    
         
4   Testing and Commissioning and trial run   1 December 2022

 

 

 

 

SCHEDULE 2B

 

Technical Details

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE 3B

 

User Terms & Conditions

 

2.Service level

 

FLX will provide the tier-2 technical support as followings:

 

6.Provide remote technical support and troubleshooting if any for the client side equipment
  
7.Technical support by email and phone for the Hardware and Software in the business hours (Monday to Friday 09:30 – 17:30 and Saturday 09:30 – 12:30 Sundays and public holidays excluded), with next business day for on-site maintenance after receiving call.
  
8.A hotline number agreed among the contractual parties will be provided. Time to Response on fault call is 4 hours from receiving call during office hours or next business day after office hours.
  
9.After the 1st round remote diagnosis over the phone, an engineer will be dispatched to the site on the next business day for repair or replacement. If the fault is not covered under the warranty, an on-site checking fee of HK$500 will be payable per on-site visit.
  
10.For parts that are not available during the first on-site visit, stock delivery or temporary loan units will be provided on the following business day on a best efforts basis.

 

FLX will provide the tier-3 technical support as followings:

 

4.Technical support and troubleshooting if any for the Cloud Platform
  
5.Technical support by email and phone for the Hardware and Software in the business hours (Monday to Friday 09:30 – 17:30 and Saturday 09:30 – 12:30 Sundays and public holidays excluded), with next business day for on-site maintenance after receiving call.
  
6.Response Time: Within 4 hours or next Business Day, during Business Day

 

 

 

 

Severity definitions

 

FLX shall observe the severity definitions below. Any change of the severity during the Term is subject to mutual agreement.

 

Severity   Definition
Catastrophic   ● Service unavailable;
       
    ● All End Users have no access to service;
       
    ● Entire Cloud Platforms down;
       
    ● Critical impact;
       
    ● No alternative available
       
High   ●

Service unavailable or partially not available;

       
    ● Individual cloud platform failed;
       
    ● Single point of failure and / or performance issues;
       
    ● Part of End Users have no access to Cloud Platforms or Services;
       
    ● Critical impact, alternative and bypass available
       
Medium   ●

Service unavailable or difficult to use;

       
    ● Major functions are not affected;
       
    ● Not critical but restricted function and some operational impact
       
Low   ●

Component or service unusable;

       
    ● Bypass or workaround possible, no operational impact;
       
    ● Not critical, deferred maintenance acceptable;
       
    ● Incorrect system report;
       
    ● Documentation fault;
       
    ● Operation queries

 

Service Credit

 

FLX agrees that the payment of Service Credits is not a penalty and is a genuine pre-estimate of loss likely to be suffered by BAO in respect of a failure of Support Services to comply with any Service Level.

 

BAO will be entitled to a Service Credit for breach by FLX of the Service Levels. The Service Credit due for any such breach will be calculated as a percentage of the total Service Fees paid or payable under this Agreement for the affected End Users for the month in which the breach occurred. The applicable percentages are set out in the Service Level Agreement. The total Service Credits due under this Agreement for any month shall not exceed 100% of the total Service Fees payable by BAO to FLX under this Agreement for that month.

 

FLX will process Service Credit claims from BAO during the subsequent month and within forty-five (45) days of receipt.

 

 

 

 

Service Level Agreement (SLA)

 

The table below sets out the Service Level of Support Services.

 

Description   Severity   Response Time   Target Service Level (measure monthly)   Service Credit as a % of Service Fees for affected End Users
Incident Response Time   Catastrophic   1 hour   100%   8%
    High   1 hour   100%   8%
    Medium   6 hours   100%   8%
    Low   2 days   100%   8%
                 
Incident Report   Catastrophic   2 working days   100%   20%
    High   2 working days   100%   10%
                 
Repetition of Incidents   —   —   Zero   5%
                 
Problem Resolution   Catastrophic   —  

1 week (90%)

4 weeks (100%)

   50%
    High   —  

3 week (90%)

6 weeks (100%)

   40%
    Medium   —  

4 weeks (90%)

10 weeks (100%)

   30%
    Low   —  

6 weeks (90%)

15 weeks (100%)

   20%
                 
System / Service Availability   Catastrophic   —   99.5%   50%
    High   —   99%   40%
    Medium   —   98.5%   30%
    Low   —   98%   20%
                 
Regular Performance Review Meeting   —   —   100%   Not Applicable
                 
Preventive Maintenance   —   —   100%   Not Applicable

 

FLX shall also maintain the following service levels:

 

    Parameters of Standard Offer   Support Services   Service Credit as a % of Service Fees for affected End Users
Service Provisioning Lead Time
 
New Provision   Lead Time of Inventory Assignment, End User Account Creation, and Storage Quota Update   2 business days   10%
             
RMA   Lead time of RMA Confirmation, and Inventory Assignment   4 weeks   10%
   

Lead time to Repair or Replace Faulty Units

(Upon receiving faulty units from BAO)

   30 days   Not Applicable
             
Suspension   Lead time to suspend Services   8 hours   5%
    Lead time to resume Services   8 hours   10%
             
Termination   Lead time to terminate Services   8 hours   5%
             
Lead Time and Frequency to provide reports
 
    License Activation and Usage Report   Monthly report   Not Applicable
    Storage Usage Report   Monthly report   Not Applicable
    SLA Report   Monthly report   Not Applicable

 

 

 

 

The flow chart below describes the support escalation procedure of the Support Services.

 

 

 

 

 

SCHEDULE 1C

 

Part 1 - The Services

 

FLX shall provide the following services to BAO for the Smart Kiosk Solution:

 

1.Proof of Concept, Development, Customization, and System Upgrade
2.Smart Kiosk Solution – Design and Build
3.Smart Kiosk Solution Cloud Platform
4.Testing and Commissioning Procedure

 

The Technical Specifications are stated in SCHEDULE 2C.

 

The User Terms & Conditions are stated in SCHEDULE 3C.

 

Part 2 – Term, Fees and Timeline

 

1. Term: From date of this Agreement to 30 November 2023 (both days inclusive) (the “Initial Term”) unless terminated early pursuant to the terms and conditions of this Agreement.
     
2. Fees:

BAO shall pay the Solution Design, Build, Customization and Setup fees totalling HK$625,000.

 

BAO shall further pay the User License Charges totalling HK$2,850,000 for a Minimum Ordering Quantity (MOQ) of 1,500 Facility Units (@HK$1,900 per Facility Unit) covering the right to use the license for the period from 1 December 2022 to 30 November 2025. The User License Charges is subject to review for the fourth year onwards.

 

BAO shall pay a fee totalling HK$3,475,000, which shall be invoiced upon satisfactory completion of the Testing and Commissioning.

 

For the avoidance of doubt, any services performed by FLX not within the specified scope of areas set out in Part 1 of Schedule 1C to this Agreement shall incur extra fees and costs payable by BAO in the manner as determined by FLX.

 

Item

  

Service

   Estimated Timeline
1  

Proof of Concept, Development, Customization, System Upgrade

  

During

November 2022

         
2  

Smart Kiosk Solution – Design and Build

    
         
3  

Smart Kiosk Solution Cloud Platform – Customization and Setup

    
         
4   Testing and Commissioning and trial run   1 December 2022

 

 

 

 

SCHEDULE 2C

 

Technical Details

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE 3C

 

User Terms & Conditions

 

3.Service level

 

FLX will provide the tier-2 technical support as followings:

 

11.Provide remote technical support and troubleshooting if any for the client side equipment
  
12.Technical support by email and phone for the Hardware and Software in the business hours (Monday to Friday 09:30 – 17:30 and Saturday 09:30 – 12:30 Sundays and public holidays excluded), with next business day for on-site maintenance after receiving call.
  
13.A hotline number agreed among the contractual parties will be provided. Time to Response on fault call is 4 hours from receiving call during office hours or next business day after office hours.
  
14.After the 1st round remote diagnosis over the phone, an engineer will be dispatched to the site on the next business day for repair or replacement. If the fault is not covered under the warranty, an on-site checking fee of HK$500 will be payable per on-site visit.
  
15.For parts that are not available during the first on-site visit, stock delivery or temporary loan units will be provided on the following business day on a best efforts basis.

 

FLX will provide the tier-3 technical support as followings:

 

7.Technical support and troubleshooting if any for the Cloud Platform
  
8.Technical support by email and phone for the Hardware and Software in the business hours (Monday to Friday 09:30 – 17:30 and Saturday 09:30 – 12:30 Sundays and public holidays excluded), with next business day for on-site maintenance after receiving call.
  
9.Response Time: Within 4 hours or next Business Day, during Business Day

 

 

 

 

Severity definitions

 

FLX shall observe the severity definitions below. Any change of the severity during the Term is subject to mutual agreement.

 

Severity   Definition
Catastrophic   ●

Service unavailable;

       
    ● All End Users have no access to service;
       
    ● Entire Cloud Platforms down;
       
    ● Critical impact;
       
    ● No alternative available
       
High   ●

Service unavailable or partially not available;

       
    ● Individual cloud platform failed;
       
    ● Single point of failure and / or performance issues;
       
    ● Part of End Users have no access to Cloud Platforms or Services;
       
    ● Critical impact, alternative and bypass available
       
Medium   ●

Service unavailable or difficult to use;

       
    ● Major functions are not affected;
       
    ● Not critical but restricted function and some operational impact
       
Low   ●

Component or service unusable;

       
    ● Bypass or workaround possible, no operational impact;
       
    ● Not critical, deferred maintenance acceptable;
       
    ● Incorrect system report;
       
    ● Documentation fault;
       
    ● Operation queries

 

Service Credit

 

FLX agrees that the payment of Service Credits is not a penalty and is a genuine pre-estimate of loss likely to be suffered by BAO in respect of a failure of Support Services to comply with any Service Level.

 

BAO will be entitled to a Service Credit for breach by FLX of the Service Levels. The Service Credit due for any such breach will be calculated as a percentage of the total Service Fees paid or payable under this Agreement for the affected End Users for the month in which the breach occurred. The applicable percentages are set out in the Service Level Agreement. The total Service Credits due under this Agreement for any month shall not exceed 100% of the total Service Fees payable by BAO to FLX under this Agreement for that month.

 

FLX will process Service Credit claims from BAO during the subsequent month and within forty-five (45) days of receipt.

 

 

 

 

Service Level Agreement (SLA)

 

The table below sets out the Service Level of Support Services.

 

Description   Severity   Response Time   Target Service Level (measure monthly)   Service Credit as a % of Service Fees for affected End Users
Incident Response Time   Catastrophic   1 hour   100%   8%
    High   1 hour   100%   8%
    Medium   6 hours   100%   8%
    Low   2 days   100%   8%
                 
Incident Report   Catastrophic   2 working days   100%   20%
    High   2 working days   100%   10%
                 
Repetition of Incidents   —   —   Zero   5%
                 
Problem Resolution   Catastrophic   —   1 week (90%) 4 weeks (100%)   50%
    High   —   3 week (90%) 6 weeks (100%)   40%
    Medium   —   4 weeks (90%) 10 weeks (100%)   30%
    Low   —   6 weeks (90%) 15 weeks (100%)   20%
                 
System / Service Availability   Catastrophic   —   99.5%   50%
    High   —   99%   40%
    Medium   —   98.5%   30%
    Low   —   98%   20%
                 
Regular Performance Review Meeting   —   —   100%   Not Applicable
                 
Preventive Maintenance   —   —   100%   Not Applicable

 

FLX shall also maintain the following service levels:

 

    Parameters of Standard Offer   Support Services   Service Credit as a % of Service Fees for affected End Users
Service Provisioning Lead Time
 
New Provision   Lead Time of Inventory Assignment, End User Account Creation, and Storage Quota Update   2 business days   10%
             
RMA   Lead time of RMA Confirmation, and Inventory Assignment   4 weeks   10%
   

Lead time to Repair or Replace Faulty Units

(Upon receiving faulty units from BAO)

   30 days   Not Applicable
             
Suspension   Lead time to suspend Services   8 hours   5%
    Lead time to resume Services   8 hours   10%
             
Termination   Lead time to terminate Services   8 hours   5%
             
Lead Time and Frequency to provide reports
 
    License Activation and Usage Report   Monthly report   Not Applicable
    Storage Usage Report   Monthly report   Not Applicable
    SLA Report   Monthly report   Not Applicable

 

 

 

 

The flow chart below describes the support escalation procedure of the Support Services.