1.    INTRODUCTION

The Board of Directors of XDL wishes to inform that XDL has on 16 January 2014 entered into a Malaysia General Agent Framework Agreement (“Agreement”) with Universal Fitness & Leisure Sdn. Bhd. (Company No. 144122-W) (“UFL” or “Party B”) for the granting of exclusive distribution rights of XDL’s brand product series in Malaysia. Through this partnership, XDL will be able to introduce its products to Malaysian consumers via wide distribution network of UFL and which will contribute positively to the Company’s bottomline. 

2.    BACKGROUND INFORMATION OF UFL

UFL is a private limited company incorporated under the Companies Act, 1965 in Malaysia and its principle business is distributor of Sports, Fitness & Outdoor Equipment in Malaysia. UFL holds the executive distributorships of several premier brands of sporting products and possesses an extensive dealer network throughout the country.

3.    VALIDITY PERIOD OF AGREEMENT

This Agreement shall continue to be valid for a period of 24 months from the date of signing of this Agreement by both parties. 

4.    SALIENT TERMS OF THE AGREEMENT

The salient terms of the agreement are as follows:-

4.1 Use of Trademark

(a)  “Xidelang” trademark has been registered in the People’s Republic of China, and has been awarded “Well known trademark in China”. The said trademark has also been submitted to the Malaysian authority for registration. Party B as the “Xidelang” brand agent shall strictly comply with the provisions of the relevant Malaysian trademark authority, and to fully protect the interest of the “Xidelang” trademark.

(b)  Without the prior approval of Party A, Party B shall not make use of the “Xidelang” trademark or brand name for merchandise processing or any other business conduct. If Party B shall need to produce complementary advertising products, Party B shall only produce after having first reported to and obtained the written approval of Party A, and shall mail the sample thereof to Party A for record.

4.2 Limitations of Operating Rights

(a)  During the tenure of this Agreement, Party B shall not assign the distribution right to any third party, failing which this Agreement shall immediately be terminated upon discovery by Party A of the said violation.

(b)  Party B shall make goods payments to Party A within the stipulated time period in accordance with the provisions of this Agreement.

5.    FINANCIAL EFFECTS

The Agreement is expected to contribute positively to the profit after tax of the XDL Group for the financial year ending 31 December 2014. The Agreement does not have any impact on the share capital and/or shareholding structure of the Company.

6.    INTEREST OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

None of the Directors and/or major shareholders of XDL and/or persons connected with them have any interest, direct or indirect, in the said agreement.

7.    DIRECTORS’ STATEMENT

The Board of Directors is of the opinion that the terms of the Agreement are in the best interests of the Company.

This announcement is dated 16 January 2014.