SALES COOPERATION AGREEMENT
(Translation)
Party A: China Jewellery Import & Export Co.
Party B: Hang Fung Jewellery Co., Ltd.
WHEREAS
(1) Party A has the legitimate right to import, export and sell gold, silver
and karat-gold jewelry in China. It intends to expand its business through
cooperation with Party B.
(2) Party B has well-developed relationship with many jewelry manufacturers,
wholesalers and retailers in China. It has also extensive experience,
technology and customer network in gold, silver and karat-gold jewelry.
(3) Party B has many years' experience in production of gold, silver and
karat-gold jewelry and has many products suitable for selling in the China
market. It intends to expand its market in China through cooperation with
Party A.
(4) Party B hopes to sell its assembled products which are approved to sell in
domestic market through the cooperation with Party A.
(5) Party A and Party B have signed a "Sales Agency Agreement" on November 18,
1994. This Sales Cooperation Agreement further stipulates the rights and
obligations of both parties based on the Sales Agency Agreement.
Through friendly consultation, both parties have worked out the following
agreement regarding the establishment of distribution network for gold, silver,
and karat-gold jewelry in China.
1. Cooperation Project
Party B shall assist Party a to establish distribution network for selling
gold, silver and karat-gold jewelry in China. Party B shall also provide
labor, management and sales techniques to facilitate the selling of the
products.
2. Responsibilities of Both Parties
RESPONSIBILITIES OF PARTY A
(1) Regarding the cooperative project, based on the decision after
consultation between both parties, Party A shall provide all documents
necessary for the establishment of sales outlets and for the selling
of gold, silver and karat-gold jewelry.
(2) To coordinate and assist Party B in handling all necessary procedures.
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(3) To provide invoices and other documents related to tax and commerce
issue regarding the domestic sale of gold, silver and karat-gold
jewelry stipulated in this agreement.
(4) For the activities carried out by Party B which are after consultation
with Party A and as assistance to Party A or acting on behalf of Party
A in accordance with this Cooperation Agreement, Party A shall be
responsible for any civil liabilities incurred. If any loss or damages
incurred due to Party B's fault, Party B shall compensate Party A for
all the losses.
RESPONSIBILITIES OF PARTY B
(1) Through its well-developed business relationship in China and its
extensive experience in gold and silver jewelry, Party B shall
establish a distribution and sales network for Party A selling Party
A's jewelry and the jewelry products it acts as an agent to sell.
(2) After the establishment of the distribution and sales network, Party A
shall assign expertise and recruit local sales people to assist Party
A to sell the jewelry products.
(3) To provide sales, marketing and management techniques for Party A to
assist Party A to sell the jewelry products. Through discussion
between both parties, Party B shall assist Party A to carry out
promotional activities for gold, silver and karat-gold jewelry.
3. Warranties by Party A
For this Cooperation Agreement, Party A hereby warrants that:
(1) Party A is a legal entity incorporated in the People's Republic of
China according to relevant laws.
(2) Party A has the right to conduct import and export business of gold
and silver jewelry in China and has the right to sell these products
in China. Party A also has the right to be entrusted or act as an
agent for the above-mentioned import and export business of gold and
silver jewelry.
(3) Party A has the legal authority to execute this Agreement.
4. Compensation
Both parties agree that, as compensation for Party B's assistance to Party
A in selling the gold, silver and karat-gold jewelry, for Party B's gold,
silver, and karat-gold jewelry products (including those which are approved
to sell in China) which are entrusted to Party A to sell, Party A shall not
charge for additional fees except for the sales agency fees as stipulated
in Clause 5.2(1) of the "Sales Agency Agreement".
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5. Cooperation Tenure
(1) This Cooperation Agreement shall have a tenure of 10 years. Any party
who intends to extend the tenure shall have to propose in writing to
the other party one month prior to the expiry of the cooperation
tenure.
(2) Should either one party ceased its business or declared bankruptcy, or
due to force majeure, this agreement shall be terminated.
6. Governing Laws
The interpretation and execution of this agreement shall be governed by the
laws of the People's Republic of China.
7. Settlement of Disputes
Any disputes arising between Party A and Party B shall be settled through
friendly consultation between the two parties. In case no settlement can be
reached through consultation, either party shall have the right to submit
the dispute to the China Council For Promotion of International Trade for
arbitration. Arbitration shall be carried out in Beijing in Chinese
language. The arbitrage award shall be final and binding upon both parties.
8. This Agreement is written in Chinese and have two copies. Both copies shall
be equally binding.
9. This Agreement shall come into force after signing by both parties.
Signed by Party A and Party B
Date: November 18, 1994
Beijing, China
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