AMENDMENT NO. 1

AMENDED AND RESTATED BUYING AGENCY AND SUPPLY AGREEMENT

This Agreement, made as of the 11th day of March, 2014, by and between FORWARD
INDUSTRIES, INC. a New York corporation, having an address at 477 Rosemary Ave.,
West Palm Beach, FL 33410 (hereafter referred to as “Principal”), and FORWARD
INDUSTRIES (ASIA-PACIFIC) CORPORATION (formerly known as Seaton Global
Corporation), a BVI registered corporation, having an address at 10F-5 No.16,
Lane 609, Chung Shin Road, Section 5, San Chung District, New Taipei City,
Taiwan, Republic of China (hereinafter referred to as “Agent”).

W I T N E S S E T H:

WHEREAS, Agent and Principal entered into an Amended and Restated Buying Agency
and Supply Agreement, dated as of December 20, 2012 (the “Agreement”); and

WHEREAS, the parties desire to amend the Agreement on and subject to all of the
terms and conditions set forth herein.

NOW, THEREFORE, the parties hereto, in consideration of the foregoing and of the
mutual covenants contained herein, and intending to be legally bound hereby,
agree as follows:

1.         THE CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE
MEANINGS ASCRIBED TO SUCH TERMS IN THE AGREEMENT.

2.         SECTION 2B OF THE AGREEMENT IS HEREBY AMENDED BY DELETING THE FIRST
SENTENCE THEREOF AND REPLACING IT WITH THE FOLLOWING:  “IN CONSIDERATION OF THE
SERVICES RENDERED BY AGENT UNDER THIS AGREEMENT, PRINCIPAL SHALL PAY TO AGENT
THE SUM OF $[*] PER MONTH PLUS [*] PERCENT ([*]%) OF THE ADJUSTED GROSS PROFIT
(HEREINAFTER DEFINED) OF ALL PRODUCTS ORDERED AND SHIPPED PURSUANT TO THIS
AGREEMENT (THE “SERVICE FEE”).  FOR THE PURPOSE OF COMPUTING THE SERVICE FEE DUE
HEREUNDER, THE FOLLOWING DEFINITIONS SHALL APPLY:

(A)       "ADJUSTED GROSS PROFIT" SHALL MEAN THE AMOUNT WHICH IS EQUAL TO NET
SALES LESS MATERIAL COGS.

(B)       “GROSS SALES” SHALL MEAN ALL REVENUES RECEIVED BY PRINCIPAL FROM THE
SALE OF PRODUCTS.

(C)        "MATERIAL COGS" SHALL MEAN THE AMOUNT WHICH IS EQUAL TO THE COST OF
ALL MATERIALS, TOOLING, PACKAGING, AND INBOUND FREIGHT, CUSTOMS AND DUTIES
INCURRED BY AGENT TO DELIVER PRODUCTS TO PRINCIPAL AT THE AGREED UPON SHIPPING
POINT (E.G. PORT OF HONG KONG OR PORT OF SHEN ZHEN). SUCH "MATERIAL COGS" SHALL
BE EQUAL TO THE AMOUNTS REFERENCED IN PRINCIPAL’S APPROVED PURCHASE ORDERS TO
AGENT AND TO THE AMOUNTS REFERENCED ON AGENT’S INVOICES TO PRINCIPAL. SUCH
MATERIAL COGS SHALL EXCLUDE AGENT’S SERVICE FEES AND SHALL BE EQUAL TO AGENT’S
ACTUAL COST BASIS AS SUPPORTED BY THE LOCAL SUPPLIER INVOICES.

*Confidential portion has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested with respect
to the omitted portion.

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

(D)       "NET SALES" SHOULD BE DEFINED AS BEING EQUAL TO GROSS SALES LESS
RETURNS, DISCOUNTS, AND ALLOWANCES" AND SHOULD BE RECORDED AND RECOGNIZED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPALS IN THE UNITED STATES.

3.          SECTION 3A OF THE AGREEMENT IS HEREBY AMENDED TO INSERT THE
FOLLOWING AT THE END THEREOF:  “ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING,
PRINCIPAL SHALL NOT BE REQUIRED TO PAY THE SERVICE FEE ON LESS FAVORABLE TERMS
THAN AGENT RECEIVED FROM ITS SUPPLIERS.  FOR EXAMPLE, IF AGENT IS AFFORDED NET
60 DAY TERMS FROM ITS SUPPLIERS, THE SAME TERMS SHALL APPLY TO THE PAYMENT OF
SERVICE FEES HEREUNDER.

4.          SECTION 6E OF THE AGREEMENT IS HEREBY AMENDED BY INSERTING THE
FOLLOWING AT THE END THEREOF:  “ ANYTHING HEREIN TO THE CONTRARY
NOTWITHSTANDING, PRINCIPAL ACKNOWLEDGES THAT AGENT MAY DO BUSINESS WITH KITREX
CORPORATION, AN AFFILIATE OF TERRY WISE, IN THE PRODUCTION OF THE PRODUCTS.

5.          SECTION 8 OF THE AGREEMENT IS HEREBY AMENDED BY EXTENDING THE TERM
TO EXPIRE ON MARCH 11, 2015.

6.          EXCEPT AS SPECIFICALLY AMENDED HEREIN, THE LICENSE SHALL REMAIN IN
FULL FORCE AND EFFECT WITHOUT AMENDMENT.

IN WITNESS WHEREOF, the parties have executed this amendment as of the day and
date first above written.

 

 

FORWARD INDUSTRIES, INC.

 

 

 

 

By:

/s/ James O. McKenna III

 

Name:

James O. McKenna III

 

Title:

Vice President and Chief Financial Officer

 

 

 

FORWARD INDUSTRIES (ASIA-PACIFIC) CORPORATION

 

 

By:

/s/ Terence Wise

 

Name:

Terence Wise

 

Title:

Principal

 

 

 

 

2

 

 

 

--------------------------------------------------------------------------------