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EXHIBIT 10.2
DISTRIBUTION AGREEMENT
This Agreement is made and entered into this 24th day of November, 1997,
by and between the People's Republic of China, TSINGTAO BREWERY NO.3
CO.,LTD.("BREWER") and CUIDAO (USA) IMPORT CO., INC., a subsidiary of CUIDAO
HOLDING CORP., a Florida U. S. A. corporation, with its principal place of
business at 3120 West Griffin Road, Suite #204, Ft. Lauderdale, Florida
33312-6900, U.S.A ("DISTRIBUTOR").
RECITALS
WHEREAS, BREWER is engaged in the brewing, production and sale of beer
and wishes to expand the distribution of such product by having DISTRIBUTOR sell
such product in the territory described in Paragraph 3 hereof; and
WHEREAS, DISTRIBUTOR desires to market the beer products brewed by
BREWER, and to be designated as the exclusive distributor of BREWER for the
purposes of selling such products in the territory assigned to it.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged by each party, the parties hereto agree as follows:
1. Appointment.
a) BREWER HEREBY APPOINTS DISTRIBUTOR as its exclusive distributor for
the sale and promotion of the Products described in Paragraph 2 below in the
Territory described in Paragraph 3 below and agrees not to appoint other
distributors in the Territory.
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BREWER agrees that while this Agreement is in effect, it will not sell Products
to persons other than DISTRIBUTOR in the Territory or to persons, other than
DISTRIBUTOR, who BREWER has reason to believe will resell Products in the
Territory.
(b) DISTRIBUTOR hereby accepts such appointment subject to the terms and
conditions of this Agreement and agrees that it shall use its best efforts to
promote demand for and sale of the Products in the Territory and that in the
sale and promotion of the Products it shall at all times carry out to the best
of its ability a merchandising policy designed to promote and maintain the
excellence of quality and to preserve the goodwill which is associated with the
name and reputation of BREWER and its products.
(c) Notwithstanding the foregoing, should DISTRIBUTOR, commencing with
the 2000 calendar year, fail to meet the minimum annual purchase requirements
set forth in Section 4(c) of this Agreement, the DISTRIBUTOR shall become a
non-exclusive distributor of the Products.
2. Products.
The term "Products" as used in this Agreement shall mean any and all
beers and beer styles and types brewed and produced by BREWER. BREWER shall have
the right to stop brewing and selling any of the Products without incurring any
obligation or liability to DISTRIBUTOR.
3. Territory.
The term "Territory" as used in this Agreement shall mean the Continent
of North America. The Territory may be subsequently enlarged, reduced or
otherwise changed by agreement in writing of
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the parties hereto
4. Sales Activities
DISTRIBUTOR shall conduct the sales activities contemplated under this
Agreement by purchasing Products from BREWER for resale to DISTRIBUTOR's
customers within the Territory. DISTRIBUTOR shall conduct its sales activities
in a lawful manner consistent with the highest standards of fair trade, fair
competition, and business ethics; shall cause all of its employees to do the
same and use its best efforts to ensure that its agents will do the same; and
in addition shall be bound by the following duties and obligations:
(a) Advertising. DISTRIBUTOR may undertake, at its own expense, such
advertising and promotional efforts as it may deem necessary to achieve a proper
recognition of the products in the Territory. DISTRIBUTOR shall have the right
to use the name "CUIDAO" or any derivation thereof, or any other name or mark
associated with BREWER.
(b) Inventory. DISTRIBUTOR agrees to maintain at all times an
inventory of the products sufficient to fill reasonably anticipated orders from
its customers and to deliver promptly all such orders.
(c) Minimum Purchases. During the calendar year beginning January 1,
1998 DISTRIBUTOR shall make a minimum annual total purchase of products having a
net plant net volume of 21357 cases per year. Commencing with the calendar year
beginning January 1, 1999, DISTRIBUTOR shall make a minimum annual total
purchase of Products having a net plant volume of 27,000 cases. Commencing with
the calendar year beginning January 1, 2000, DISTRIBUTOR shall make a minimum
annual total purchase of Products having a net volume of 106,000 cases.
(d) Orders. DISTRIBUTOR shall in submitting orders describe the
Products in a clear and unambiguous manner and shall include precise
instructions for packaging, invoicing. and shipping. Overall purchase order for
each consecutive year needs to be provided to the Brewery in the month of
December preceding said year, with price
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to be agreed on.
(e) Resale Prices. DISTRIBUTOR shall distribute the Products through all
available means, including restaurant accounts, store and market retail
accounts, or otherwise, which may be commensurate with good development of the
Territory. DISTRIBUTOR shall set resale prices for the Products at its own
discretion.
5 Payments.
(a) All terms of this agreement, (including but not limited to "cost",
"payments", "amounts", "value", "discounts", "price", "credits", "set-off",
"dollars", or "$") shall be calculated and construed in terms of currency of the
United States of America.
(b) In order to secure DISTRIBUTOR's obligation to accept and purchase
any Products ordered under the terms of this Agreement, DISTRIBUTOR shall
establish a confirmed, irrevocable and transferable letter of credit in favor of
BREWER or an affiliate of BREWER at a bank within the United States of America
acceptable to BREWER or the BREWER's bank in China; and the conditions for
payment thereunder shall be satisfied upon the delivery by BREWER of the usual
shipping documents.
6 Confidential Information.
DISTRIBUTOR and BREWER shall not use of disclose to third parties any
confidential information concerning the business, affairs, or the products of
the other party which it may acquire in the course of its activities under this
Agreement and shall take all necessary precautions to prevent any such
disclosure by any of its employees, officers or affiliated persons and entities.
For purposes of this Article, confidential information shall include trade
secrets and other unpatentable information.
7 Sub-Distributors.
DISTRIBUTOR shall have the right to appoint sub-distributors for
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the sale and promotion of the products in the Territory, Additionally,
DISTRIBUTOR shall have the right to enter into alliances and cooperative
arrangements for the sale, promotion and distribution of the product in the
Territory.
8 Product warranty.
BREWER warrants to DISTRIBUTOR that Products shall be of merchantable
quality at the time title thereto passes to DISTRIBUTOR in accordance with this
Agreement. BREWER, at its option, shall replace any products which fail to
comply with such warranty or shall refund the purchase price paid by DISTRIBUTOR
for any claims for liabilities made against DISTRIBUTOR arising out of personal
injuries or death or damage to property caused by defective products, unless
such defect is created by DISTRIBUTOR's handling of the products. The
DISTRIBUTOR should have insurance against the liability Insurance on behalf of
the BREWER
9 Relationship Between Parties.
(a) DISTRIBUTOR agrees that in all matters relating to this Agreement it
is and shall be acting as an independent contractor and shall bear all of its
expenses in connection with this Agreement. It shall not have any authority to
assume or create any obligation, express or implied, on behalf of BREWER.
DISTRIBUTOR shall not make quotations or write letters in the name of BREWER but
in every instance shall use its own name.
(b) At such time, as Distributor ceases to operate as a Distributor for
Brewery herein, distributor shall assign rights of "CUIDAO" to Brewery herein.
10. Effective Date and Duration
(a) This Agreement shall take effect as of the date first above written.
This Agreement shall be effective for five (5) years from the effective date,
unless sooner terminated as hereinafter provided. This Agreement shall be
automatically renewed for additional terms
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of five (5) years each, unless not less than nine(9) months prior to the end of
the initial or any renewal term either party shall give the other written notice
of non-renewal.
(b) This Agreement may be terminated prior to the expiration of the
initial term of this Agreement, or any renewals thereof, by either party if the
other party:
(i) breaches any material provision of this agreement, and breach is
not cured within ninety (90)days written notice thereof;
(ii) insolvency or bankruptcy of either party under applicable law,
and/or the appointment of a trustee or receiver for either party; or
(iii) any inability or prospective failure of either party to perform
its obligations hereunder.
11. Rights and obligations Upon Termination.
Upon expiration or termination of this Agreement for any reason, all
orders received from DISTRIBUTOR but not shipped by BREWER prior to the
effective date of termination shall be shipped by BREWER, and DISTRIBUTOR agrees
to accept shipment of and make payment for any such orders shipped by BREWER.
12. No Assignment.
This Agreement shall not be assigned by either party, either by
operation of law or by contract, without the prior written consent of the other
party hereto, and any attempt to assign without such consent shall be null and
void. Nothing herein contained, however, shall prevent DISTRIBUTOR from
assigning this Agreement to any subsidiary, an affiliate, sister, or parent
corporation of DISTRIBUTOR.
13. Government Regulation.
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(a)DISTRIBUTOR agrees to obtain at its own expense any import license,
foreign exchange permit, or other permit or approval it may need for the
performance of its obligations under this Agreement, and in essence, to comply
at its own expense with all applicable laws, regulations, and orders of the
government(s) of the Territory, the United States or any instrumentality
thereof.
(b)DISTRIBUTOR agrees to furnish to BREWER, by affidavit or other
reasonable means from time to time at BREWER'S request, and to the reasonable
satisfaction of BREWER, assurances that the appointment of DISTRIBUTOR
hereunder, its activities under this Agreement and the payment to BREWER of any
monies or consideration contemplated hereunder are proper and lawful under the
law in force in the Territory and in the United States of America. DISTRIBUTOR
further represents that no person employed by it is an official of any
government agency or a corporation owned by the government(s) of the Territory,
the United States of America, or any state thereof and that no part of any
monies or consideration paid hereunder shall accrue for the benefit of any such
official.
14. Force Majeure
This Agreement and BREWER'S and DISTRIBUTOR'S performances hereunder are
subject to all contingencies beyond their reasonable control, including but not
limited to force majeure; strikes; lockouts; labor disputes; floods; civil
commotion; riot; acts of God; rules; laws; orders; restrictions; embargoes;
quotas or actions of any government; foreign or domestic or any agency or
subdivision thereof; casualties; fires; accidents; shortages of transportation
facilities; detention of the products by custom authorities; or losses of the
products in public or private warehouses. In any such event, the party not
subject to force majeure shall have the right, in its sole discretion and
without any liability to the other party,
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to (a) cancel all or any portion of this Agreement, of (b) require performance
of this Agreement within a reasonable time after the causes for nonperformance
or delay have terminated.
15. Separability.
If any provision of this Agreement is found by any court of competent
jurisdiction to be invalid or unenforceable, the invalidity of such provision
shall not affect the other provisions of this Agreement and all provisions not
affected by such invalidity or unenforceability shall remain in full force and
effect.
16. Waiver.
The waiver by either party hereto of a breach or default in any of the
provisions of this Agreement by the other party shall not be construed as a
waiver of any succeeding breach of the same or other provisions; nor shall any
delay or omission on the part of either party to exercise or avail itself of
any right, power, or privilege that it has or may have hereunder operate as a
waiver of any breach or default by the other party.
17. Language.
This Agreement is written in Chinese and English in two counterparts in
each language. One copy of each language text shall be retained by each party.
Chinese and English texts shall have equal validity and legal effect.
18. Notices.
(a)Unless otherwise specifically provided, all notices, demands, or
requests required or permitted by this Agreement shall be in writing and in
English and sent in a letter form or by telex,
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facsimile (facsimile to be accompanied by a telex notice requesting confirmation
of receipt), telegram or cable to the address of the parties first set forth
hereinabove, or to such other address as may from time to time be designated by
any party through notification to the other party at its address as in effect
from time to time.
The dates on which notices shall be deemed to have been effectively
given shall be determined as follows:
(a) Notices given by personal delivery shall be deemed effectively give
on the date of personal delivery;
(b) Notices given in letter form shall be deemed effectively give on the
tenth day after the date mailed (as indicated by the postmark) by registered
airmail; postage prepaid, or the fourth day after delivery to an internationally
recognized courier service;
(e) Notices given by telex, telegram or cable shall be deemed
effectively given on the second business day following the date of transmission,
as indicated on the document in question; and
(d) Notices given by facsimile shall be deemed effectively give on the
first business day following the date of transmission of a telex notice
requesting confirmation of receipt as indicated on the telex in question.
Nothing contained herein shall justify or excuse failure to give oral
notice for the purpose of informing the other party thereof when notification is
appropriate, but such oral notice shall not satisfy the requirement of written
notice.
19. Governing Law.
The formation, validity, execution, amendment and termination of this
Agreement shall be governed by the United Nation's convention on contracts for
the Internation Sale of Goods and other concerning international legal
principles and practices.
20. Resolution of Disputes.
(a) Any dispute, controversy or claim arising out of or relating
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to this Agreement, or the interpretation, breach, termination or validity
hereof, shall be resolved through friendly consultation. Such consultation shall
begin immediately after one party has delivered to the other party a written
request for such consultation. If within thirty (30) days following the date on
which such notice is given, the dispute cannot be resolved, the dispute shall he
submitted to arbitration upon the request of one party with notice to the other
party.
(b) Any arbitration to be conducted pursuant to the terms of this
Agreement shall be conducted in Stockholm, Sweden under the auspices of the
Arbitration Institute of the Stockholm Chamber of Commerce (the "Institute").
There shall be three arbitrators. Each party shall select on arbitrator within
thirty (30) days after giving or receiving the demand for arbitration. Such
limited in their selection to any prescribed list. The President of the
Institute shall select the third arbitrator. If the other party does not appoint
and arbitrator who has consented to participate within thirty (30) days after
the selection of the first arbitrator, the relevant appointment shall be made by
the President of the Institute.
(e) The arbitration proceedings shall be conducted in English. The
arbitration tribunal shall apply the Arbitration Rules of the United Nations
Commission on International Trade Law in effect at the time of arbitration.
However, if such rules are in conflict with the provisions of this Section 23,
including the provisions concerning the appointment of arbitrators, the
provisions of this Section 23 shall prevail.
(d) Each party shall cooperate with the other in making full disclosure
of and providing complete access to all information and documents requested by
the other party in connection with such proceeding, subject only to any
confidentiality obligations binding on such party.
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The award of the arbitration tribunal shall be final and binding upon
the parties, and either party may apply to a court of competent jurisdiction for
enforcement of such award.
21. Entire Agreement; Modifications and Waivers.
This Agreement is the entire agreement of the parties with respect to
the subject matter described in this Agreement and all oral and written prior
negotiations and agreements and any conflicting prior course of dealing or trade
usage are superseded hereby. The parties hereto agree that no representations
have been made or relied upon except as specifically stated in this Agreement.
This Agreement may be modified only by a writing signed by both parties.
IN WITNESS WHEREOF, and intending to be legally bound hereby,
DISTRIBUTOR and BREWER have each caused this Agreement to be delivered and
executed by their proper and duly authorized officers on this 24th day of
November, 1997.
This agreement supersedes the previous agreement between the parties
hereunder date on August 9th, 1996.
BREWER :
[SIG]
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TISNGTAO BREWERY NO. 3, LTD
Date
DISTRIBUTOR
[SIG]
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CUIDAO HOLDING CORP. Date
BY: C. MICHAEL FISHER, PRESIDENT
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