DISTRIBUTORSHIP
AGREEMENT
BETWEEN
COLLAGE INTERNATIONAL HEALTH PTY LTD
AND
C.B. & P. PTY LTD
DATED
NOVEMBER 15, 1996
DISTRIBUTORSHIP AGREEMENT
This Agreement dated November 15, 1996
BETWEEN: COLLAGE INTERNATIONAL HEALTH PTY LIMITED
ACN 072 383 101
Of Building 4, 43-45 Egerton Street, Silverwater NSW 2128
AND: C.B. & P. PTY LIMITED
ACN 055 581 229
of: 458-468 Wattle Street, Ultimo NSW 2000
THE PARTIES AGREE AS FOLLOWS:
1. Definitions
In this Agreement except where the context otherwise requires, the
following terms and expressions shall be understood to have the
precise meaning as follows:
1.1 Contract Products shall mean the Collage International Health Pty Ltd
supplied products bearing the Trademark as set out in Appendix A to
this Agreement.
1.2 Collage International Health Pty Ltd reserves the right to modify the
design and/or type of the Contract Products or parts thereof or may
discontinue any Contract products in its sole discretion.
1.3 "Territory" shall mean People's Republic of China. C.B. & P Pty Ltd
shall not sell the Contract Products to areas other than to the
People's Republic of China without the prior written consent of Collage
International Health Pty Ltd, nor shall C.B. & P. Pty Ltd sell to
Contract Products to persons or businesses that may resell them outside
the Territory. The parties may reconsider the Contract Products or the
Territory.
2. Appointment and Acceptance
2.1 During the term and subject to the conditions hereinafter set forth,
Collage International Health Pty Ltd hereby appoints C.B. & P. Pty Ltd
as its exclusive distributor for the Contract Products in the
Territory, and C.B. & P. Ltd accepts such appointment. During the term
of this Agreement Collage International Health Pty Ltd agrees not to
sell the Contract Products, either directly or indirectly, into the
Territory except as outlined in Clause 2.2.
2.2 During the term of this Agreement, Collage International Health Pty
Ltd may, either directly or indirectly, supply Products within the
duty free market in the Territory with the exception of the Contract
Products as set out in Appendix A of this Agreement.
2.3 C.B. & P. Pty Ltd shall not be concerned or interested either directly
or indirectly in the manufacture, production, importation, sale,
purchase, exportation, distribution, or advertisement of any goods in
the Territory which are like or similar to or which, either alone or in
conjunction with some other product, perform, or are designed to
perform, the same or a similar function to, or which might otherwise
compete or interfere with the sale of any of the Contract Products
during the term of this Agreement and for a period of twelve (12)
months after the expiry of this Agreement. The parties agree that if
C.B. & P. Pty Ltd breaches the provisions of this Sub-clause it will be
liable to pay to Collage International Health Pty Ltd the liquidated
and ascertained sum of USD2,064,000 which the parties acknowledge
represents a genuine pre-estimate of the loss likely to be suffered by
Collage International Health Pty Ltd including, but not limited to,
loss in connection with termination of this Agreement, the appointment
of a new distributor and the loss of sales of the Contract Products in
the interim period.
3. Orders and Shipments
3.1 All orders are to be placed by Sales Contract as set out in Appendix B
attached and are subject to the terms and conditions contained
therein.
3.2 In placing orders with Collage International Health Pty Ltd C.B. & P.
Pty Ltd shall clearly describe the Contract Products and quantity
required in writing, and shall include precise instructions for
packaging, invoicing and shipping. The orders shall not be binding
unless and until they are accepted by Collate International Health Pty
Ltd agrees to supply C.B. & P. Pty Ltd with Contract Products to
enable fulfillment of the minimum purchases as set forth in Clause 5
herein.
3.3 Collage International Health Pty Ltd shall use its best endeavors
consistent with its other demands and business to meet orders placed by
C.B. & P. Pty Ltd. Collage International Health Pty Ltd guarantees to
fulfill all orders placed by C.B. & P. Pty Ltd and accepted by Collage
International Health Pty Ltd under Clause 3.1 and Clause 3.2 above.
However in the event of any strikes, lockouts, fire, explosion or
accident, natural disaster, or of any stoppage of business or work
beyond the control of Collage International Health Pty Ltd which may
prevent or hinder Collage International Health Pty Ltd in fulfilling
orders placed by C.B. & P. Pty Ltd, Collage International Health Pty
Ltd may suspend or postpone the delivery of the Contract Products.
C.B. & P. Pty Ltd recognizes that this does not constitute a breach of
the provisions of this Agreement.
4. Price and Payment
4.1 The prices of the Contract Products, as set out in Appendix A of this
Agreement, are set for a period of fifteen (15) months. Sixty (60) days
prior to the expiry of this Agreement the parties agree to enter into
good faith price negotiations to determine the prices of the Contract
Products for the next contract year, or agreed to contract term.
4.2 Within thirty (30) days prior to the shipment date as outlined in
Collage International Health Pty Ltd's confirmation of order, C.B. & P
Pty Ltd shall open an irrevocable
Letter of Credit "45 days from sight" in favor of Collage
International Health Pty Ltd, issued by a first class international
bank satisfactory to Collage International Health Pty Ltd.
4.3 Currency of payment shall be in United States Dollars.
4.4 C.B. & P. Pty Ltd shall be liable for and shall pay any tax imposed
upon Collage International Health Pty Ltd or C.B. & P. Pty Ltd by the
laws of the jurisdiction of the Territory.
5. Minimum Purchase
5.1 C.B. & P. Pty Ltd shall guarantee a minimum purchase of the Contract
Products from Collage International Health Pty Ltd in the following
amount:
(a) First Contract Period
USD$3,750,000.00 per period.
(b) Second Contract Period
To Be Negotiated
(c) Third Contract Period
To Be Negotiated
5.2 For the purpose of this Clause, the Contract Products shall be
considered to be purchased when shipped by Collage International
Health Pty Ltd, excluding any sales returned to Collage International
Health Pty Ltd.
6. Inspection and Warranty
6.1 C.B. & P. Pty Ltd shall inspect or shall cause its qualified agent to
inspect the Contract Products in Sydney at .B. & P. Pty Ltd's cost
prior to shipments, to ensure that the quality standards have been met
as agreed to in writing by the parties. If, upon receipt of the
Contract Products they are found not to be in compliance with the
quality standards, Collage International Health Pty Ltd shall replace
the Contract Products or the part of a Contract Product not meeting
the quality standards.
6.2 Collage International Health Pty Ltd warrants that the Contact
Products shall be free from defects in material and workmanship. This
warranty does not extend to any of the said Contract Products that
have been
- subjected to misuse, neglect, accident or abuse,
- altered or modified in any way
- used or stored in violation of instructions furnished by
Collage International Health Pty Ltd.
6.3 Claims by C.B. & P. Pty Ltd in regard to any defect in the Contract
Products shall be in writing and be dispatched by C.B. & P. Pty Ltd
with full particulars within fourteen (14) days after the receipt of
the Contract Products in the Territory.
7. Distributor's Responsibility
7.1 C.B. & P. Pty Ltd shall maintain adequate stocks of the Contracts
Products throughout the Territory to meet its customer's demand in
time. C.B. & P. Pty Ltd shall maintain adequate stocks of facilities
and qualified personnel throughout the Territory and shall provide
reasonable After-Sales Service to its customers.
7.2 C.B. & P. Pty Ltd shall arrange, advertisement and sales promotion of
the Contract Products and devote its best efforts toward obtaining the
largest sales volume of the Contract Products in the Territory.
7.3 C.B. & P. Pty Ltd agrees to arrange agreed advertising and promotional
activities of the Contract Products in the Territory with such
expenditure to e not less than RMB3,000,000.00 within the first twelve
(12) months of the date of execution of this Agreement.
7.4 Whenever Collage International Health Pty Ltd shall indicate to C.B. &
P. Pty Ltd any complaint concerning the activities of C.B. & P. Pty
Ltd hereunder C.B. & P. Pty Ltd shall immediately make investigation
and take proper action to remedy the complain.
8. Request for Information
C.B. & P. Pty Ltd shall cooperate with Collage International Health
Pty Ltd's request to supply information on the sale of the Contract
Products, the inventory of the Contract Products, conditions relating
to advertising, promotion and the provision of After-Sales Service,
general market conditions and other information as may be requested
from time to time.
9. Trademark
9.1 During the term of this Agreement, Collage International Health Pty
Ltd hereby grants to C.B. & P. Pty Ltd, a non-exclusive license to use
the Trademark (whether or not registered in the Territory by Collage
International Health Pty Ltd) for the purpose of sales and promotion
within the Territory. When C.B. & P. Pty Ltd uses the Trademark, it
shall indicate clearly that the Trademark is registered in the name of
Collage International Health Pty Ltd.
9.2 When C.B. & P. Pty Ltd intends to use the Trademark under Paragraph 9.1
above, prior to use, C.B. & P. Pty Ltd shall inform Collage
International Health Pty Ltd of the
manner of such use and submit a sample of the materials (catalogues,
leaflets, posters, newspapers) bearing the Trademark for inspection
and approval by Collage International Health Pty Ltd. When C.B. & P.
Pty Ltd wishes to change the approved use of the Trademark, prior to
change, C.B. & P. Pty Ltd shall inform Collage International Health
Pty Ltd of the desired change and submit a sample of the materials
bearing the altered use of the Trademark for inspection and approval
by Collage International Health Pty Ltd. In any event the manner of
use of the Trademark or any change thereof shall be subject to Collage
International Health Pty Ltd's approval and C.B. & P. Pty Ltd shall
not use the Trademark in any other manner than that approved in
advance by Collage International Health Pty Ltd.
9.3 C.B. & P. Pty Ltd recognizes that any of the Trademark, trade names,
designs, copyrights and other proprietary rights, used on or embodied
in the Contract Products ("Proprietary Rights") shall remain the
exclusive property of Collage International Health Pty Ltd. C.B. & P.
Pty Ltd shall not have or acquire any right, title or interest in
Proprietary Rights.
9.4 During the terms of this Agreement or even after termination, C.B. & P.
Pty Ltd shall not:
(i) Use the Trademark or similar trademarks on any other
companies products than Collage International Health Pty
Ltd's nor let other companies use the Trademark.
(ii) Directly nor indirectly apply for the registration of
the Trademark or any other trademarks similar thereto with
respect to the Contract Products or any other materials in
any country of the world.
9.5 C.B. & P. Pty Ltd shall not directly or indirectly apply for the
registration of any tradename or business name including the words
"Mother Nature" or "M&N" or its translation into any language.
9.6 C.B. & P. Pty Ltd may, with the prior written consent of Collage
International Health Pty Ltd, indicate that it is an authorized
distributor of the Contract Products.
9.7 When C.B. & P. Pty Ltd finds that a third party infringes or impairs
the Trademark or Collage International Health Pty Ltd's or Mother
Nature's goodwill involved therein, or when a third party brings a
claim, suit or action against Collage International Health Pty Ltd or
C.B. & P. Pty Ltd on the grounds that C.B. & P. Pty Ltd's use of the
Trademark may infringe on the third party's rights, C.B. & P. Pty Ltd
shall promptly inform Collage International Health Pty Ltd thereof and
cooperate with Collage International Health Pty Ltd to settle the
problem.
9.8 Upon termination of this Agreement for any cause, C.B. & P. Pty Ltd
shall cease holding itself out as a distributor of the Contract
Products and cease using, in any way, Collage International Health Pty
Ltd's name, or its Proprietary Rights or any material
similar thereto.
9.9 Collage International Health Pty Ltd, at its discretion, shall have the
right to record the existence of the license hereunder, or require C.B.
7 P. Pty Ltd to register as a registered user in the Territory at C.B.
& P. Pty Ltd's expense.
9.10 C.B. & P. Pty Ltd shall not alter, deface, remove, cover or mutilate
in any manner the Trademark, batch number or expiry date, brand, or
Collage International Health Pty Ltd's name attached of affixed to any
of the Contract Products, without the prior written consent of Collage
International Health Pty Ltd.
10. Status of Distributor
10.1 This Agreement does not in any way create the relationship of principal
and agent between Collage International Health Pty Ltd and C.B. & P.
Pty Ltd and under no circumstances shall C.B. & P. Pty Ltd be
considered to be the agent of Collage International Health Pty Ltd. C.
B. & P. Pty Ltd shall not act or attempt to act, or represent itself,
directly or by implication, as an agent of Collage International Health
Pty Ltd or in any manner assume or create, or attempt to assume or
create any obligation, liability, representation, warranty or guarantee
on behalf of, or in the name of Collage International Health Pty Ltd.
10.2 C.B. & P. Pty Ltd shall, at all times, comply with all applicable laws,
regulations, and orders of any government of the Territory or political
subdivisions thereof, relating to or in any way affecting this
Agreement and C.B. & P. Pty Ltd's performance hereunder, including the
obtaining of any required licenses, permits or approvals.
10.3 C.B. & P. Pty Ltd shall not disclose to any third party, without the
prior written consent of Collage International Health Pty Ltd, or use
for any purpose other than the performance of its obligations under
this Agreement, any confidential information concerning the Contract
Products or business affairs of Collage International Health Pty Ltd
(including, but not limited to, prices, discounts, terms and conditions
of sale, customer,s business affairs, Contract Products or Contract
Product specifications) which it receives directly or indirectly form
Collage International Health Pty Ltd, or which it acquires or develops
in the course of its transactions with Collage International Health Pty
Ltd.
11. Term
11.1 This Agreement shall become effective upon signing, and shall continue
in full force and effect for a period of fifteen (15) months from the
date hereof, unless earlier terminated pursuant to Clause 12, and
shall thereafter be automatically extended for one (1) year, unless
three (3) month prior to the expiration of the term or any extension
thereof, a notice of intention to finally terminate is given in
writing by one party to the other.
11.2 Upon the extension of this Agreement in accordance with Paragraph 11.1,
the minimum
purchase amount for each period shall be reviewed and a new minimum
purchase shall be mutually agreed upon in writing by the parties
within thirty (30) days before commencement of each new period.
12. Termination
12.1 This Agreement may be terminated, at the option of either party, by
giving to either party thirty (30) days written notice of its
intention so to terminate in each case of the following events:
(a) Should either party become bankrupt or insolvent, or have its
business placed in the hand of a receiver, assignee or trustee,
whether by voluntary act or otherwise;
(b) Should either party fail to meet promptly any of its obligations
pursuant to this Agreement and that failure has not been rectified
within thirty (30) days subsequent to the receipt of written notice of
such failure;
(c) Should C.B. & P. Pty Ltd be acquired by, or should itself acquire,
in whole or in part, a manufacturer of products which in the reasonable
judgement of Collage International Health Pty Ltd competes to a
material extent with the Contract Products;
(d) Should C.B. & P. Pty Ltd attempt to assign this Agreement or any
rights hereunder to a third party without Collage International Health
Pty Ltd's prior written consent; or
(e) If either party cease to function as a going concern or t conduct
its operations in the normal course of business.
12.2 In the case where C.B. & P. Pty Ltd fails to achieve the minimum
purchase target as set out in Clause 5 herein, for any reason unless
solely and apparently attributable to Collage International Health Pty
Ltd, Collage International Health Pty Ltd is entitled to terminate
this Agreement and in such case Collage International Health Pty Ltd
may, i it wishes, sell the Contract Products directly or indirectly to
any third party in the Territory.
12.3 All payments owed to Collage International Health Pty Ltd upon
termination shall become immediately due and payable and no
cancellation or termination of this Agreement shall serve to release
either party or its successors or assigns from any obligations under
this Agreement.
12.4 In case of termination of this Agreement by either party for any
reason, Collage International Health Pty Ltd may at is sole option
repurchase from C.B. & P. Pty Ltd at the net price paid by C.B. & P.
Pty Ltd to Collage International Health Pty Ltd any or all of the
Contract Products or part thereof in the possession of C.B. & P. Pty
Ltd.
13. Indemnities
13.1 Except as may otherwise be provided herein, upon expiration or
termination of this
Agreement, neither party shall be required to pay any indemnity to the
other for any loss of profit, goodwill, creation of clientele nor
other like items, advertising costs, costs of samples, termination of
employees, employees' salaries, or the like. Collage International
Health Pty Ltd shall be free, as of the date of expiration or
termination of this Agreement, to appoint another exclusive
distributor for the Contract products in the Territory.
13.2 If for any reason apparently attributable to Collage International
Health Pty Ltd this Agreement is terminated pursuant to Clause 12.1
C.B & P. Pty Ltd shall be freed from the provisions of Clause 2.3 from
the date of termination.
14. Governing Law
14.1 This Agreement shall be interpreted and governed by the laws of the
Commonwealth of Australia and the State of New South Wales.
14.2 If any action or arbitration or other proceeding shall be commenced to
enforce this Agreement, the prevailing party in such action or
proceeding shall be entitled to recover from the other party
reasonable attorney's fees, arbitration costs and out-of-pocket
expenses incurred by such prevailing party in connection with such
action or proceeding.
15. Miscellaneous Provisions
15.1 Any notice required or permitted to be given hereunder shall be in
writing, and may be given by personal service, registered airmail,
with postage prepaid to the following addresses:
To Collage International Health Pty Ltd at:
Collage International Health Pty Ltd
Building 4, 43-45 Egerton Street
Silverwater NSW 219 Australia
To C.B. & P. Pty Ltd at:
C.B. & P. Pty Limited
458-468 Wattle Street
Ultimo NSW 2007 Australia
15.2 This Agreement constitutes the entire understanding of Collage
International Health Pty Ltd and C.B. & P. Pty Ltd with respect to the
subject matter hereof. No amendment, modification or alteration of any
term of this Agreement shall be binding on either party unless the
same shall be made in writing, dated subsequent to the date hereof and
executed by or on behalf of the parties hereto.
15.3 Neither party may assign its rights under this Agreement without the
written consent of
the other party, such written consent will not be unreasonably
withheld by either party.
15.4 All waivers hereunder shall be in writing, and the failure of any
party at any time to require the other party's performance of any
obligations under this Agreement shall not affect the right
subsequently to require performance of the obligation. Any waiver of
any breach of any provision of this Agreement shall not be construed
as a waiver of any continuing or succeeding breach of such provision
or a waiver or modification of the provision.
15.5 If any one or more of the provisions contained in this Agreement shall
be declared invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected
or impaired, and in such case the parties hereto oblige themselves to
reach the purpose of the invalid provision by a new, valid and legal
stipulation.
15.6 The section headings herein are included for purposes of convenience
only and shall not affect the construction or interpretation of any of
the provision or this Agreement.
15.7 For the purposes of communication, this Agreement may be translated
into another language, but this Agreement, which is executed in the
English language, shall be the only binding version.
15.8 This Agreement becomes effective on signing subject to C.B. & P. Pty
Ltd obtaining government import approvals to import the Contract
Products into the Territory. Both parties recognize that two (2)
months is a reasonable period for this to occur and Collage
International Health Pty Ltd reserves the right to withdraw this
Agreement if C.B. & P have not obtained government import approvals in
this time frame.
EXECUTED AS AN AGREEMENT
Signed for and on behalf of
Collage International Health Pty Ltd by
Mr. Tom Gaines - Managing Director
- ----------------------------------
Signed by
- ----------------------------------
Witness
Signed for and on behalf of
C.B. & P. Pty Limited by
Bill B. Z. Gao - Managing Director
- ----------------------------------
Signed by
- ----------------------------------
Witness