Exhibit 16.1
AUTOMOTIVE REFINISH
DISTRIBUTOR AGREEMENT
(P.R.China)
THIS AGREEMENT, made as of the 1st day of December, (the "Effective Date") by
and between:
PPG Paints Trading (Shanghai) Co Ltd hereinafter referred to as ("PPG Shanghai")
Address : Xxxxx 0000, 0xx Xxxxx
Xx. 0 Xxx Xxxx Building, 28 Xxx Xxxx Road
Xxx Xxx Qiao Free Trade Zone
Shanghai, P. R. China
Tel. : (00-00) 0000 0000
Fax : (00-00) 0000 0000
Business liscence no. : 0537762
Legal representative : Xxxxxxxx X. Sekmakas
and
NeoMedia Micro Paint Repair hereinafter referred to as ("DISTRIBUTOR")
Address : 0000 Xxxxxx Xxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxx, 00000
Tel. : 000-000-0000
Fax : 000-000-0000
Business licence no. : 2648151
Legal representative : Xxxxxxx X. Xxxxxx
WITNESSETH:
WHEREAS:
A. PPG SHANGHAI desires DISTRIBUTOR to market and sell PPG's "Deltron" and
"ACS" brand products, as hereinafter defined in Section 2 (the
"Products"), to the repair chain shops in P.R.China as listed on
Appendix 4 (the "Territory");
B. DISTRIBUTOR has the means to market Products in the Territory. As soon
as Distributor's China subsidary, NeoMeida Micro Paint Repair China, a
Xxxxxxx Foreign Owned Enterprise ("WFOE") registered under the Chinese
laws and regulations, will be established, this title of Distributor
will be automatically switched to the WFOE.
C. PPG SHANGHAI desires to appoint DISTRIBUTOR as a PPG SHANGHAI
distributor in the Territory and DISTRIBUTOR desires to be such
distributor; and
D. Accordingly, PPG SHANGHAI and DISTRIBUTOR have reached an agreement as
hereinafter set forth.
In consideration of the mutual covenants and agreements herein contained, the
parties hereto, intending to be legally bound hereby, covenant and agree as
follows:
1. APPOINTMENT
1.1 PPG SHANGHAI does hereby appoint DISTRIBUTOR to distribute in the
Territory the Products (as defined in paragraph 2, below) upon the
terms and conditions hereinafter set forth. DISTRIBUTOR does hereby
accept such appointment.
1.2 It is agreed that such appointment is nonexclusive and PPG SHANGHAI
may, without obligation to pay DISTRIBUTOR any commission or other
compensation, make direct sales of Products to other customers in the
Territory and/or appoint additional distributors of Products in the
Territory. During the term of this Agreement, DISTRIBUTOR shall have
the exclusive right for selling the Products to Beijing Sino-US Jinche
Yingang Auto Technological Services Limited (the "Auto Center"). PPG
Shanghai or any of its direct or indirect affiliates shall not sell any
of its products directly to the Auto Center or to any of the Auto
Center's affiliates in China or throughout the world, unless PPG
Shanghai obtains Distributor's written approval. It is understood and
agreed that as used herein the term "PPG" shall mean PPG Industries
Inc. and/or one or more affiliated companies of PPG Industries Inc. as
the context may require.
1.3 Notwithstanding anything to the contrary in this Section 1, PPG
SHANGHAI may also sell Products to any person or entity located outside
the Territory without being obligated to consider whether such Products
may be resold in the Territory. DISTRIBUTOR shall not be entitled to
any commission or other compensation in such event.
1.4 Deleted.
1.5 DISTRIBUTOR warrants that it will not handle any counterfeit,
passing-off products or products other than those purchased directly
from PPG SHANGHAI.
1.6 DISTRIBUTOR warrants and represents that it is a corporation duly
organized, validly existing, and in good standing under the applicable
laws, that it has full legal right, power, and authority to enter into
this Agreement and to consummate or cause to be consummated all of the
transactions contemplated hereby, and that the execution, delivery,
and/or performance of this Agreement do not or will not conflict with
or result in a breach of any provision of any articles of incorporation
or by-laws, or any written undertaking to which it is a party or by
which it, or any of its assets, may be bound or affected, or result in
a violation of any law, regulation, order, or award of any authority or
body having jurisdiction over the assets and operations of it.
2. PRODUCTS
2.1 The Products and subject matter of this Agreement shall be the products
listed below manufactured and sold by PPG SHANGHAI or affiliated companies of
PPG SHANGHAI. Additional Products may be added to or deleted from the list at
the sole discretion of PPG SHANGHAI:
(a) Global Deltron Refinish Products.
(b) ACS Products.
(c) Ancilliaries confirmed in writing for distribution by PPG SHANGHAI.
(d) Mixing equipment and related accessories as approved and supplied by
PPG SHANGHAI.
(e) Any other products as PPG SHANGHAI may launch from time to time, at its
absolute discretion.
2.2 Specific product codes for above category a, b, c, d, and e shall
reference PPG SHANGHAI Price List in effect as of January 1, 2005 on
Appendix 5.
3. REPRESENTATIONS AND WARRANTIES BY DISTRIBUTOR
DISTRIBUTOR represents and warrants to PPG SHANGHAI that(pound)(0)
(a) it is a business entity duly incorporated and registered and validly
existing under the relevant PRC laws and regulations;
(b) it has been issued a valid business licence in its name by the relevant
local branch of the State Administration of Industry and Commerce, and
that business licence shall be valid within the duration of this
Agreement;
(c) it is permitted to distribute chemical products pursuant to this
Agreement under its approved business scope;
(d) it has a Dangerous Goods Business Permit Licence issued by the
appropriate local government;
(e) it has the qualification of a general taxpayer and is able to issue
value added tax invoices;
(f) it shall comply with all the relevant laws, regulations and permits,
which have jurisdiction over its business, in relation to the sale of
Products,
4. DISTRIBUTOR'S RESPONSIBILITY
4.1 DISTRIBUTOR shall promote the sale of the Products in the Territory.
DISTRIBUTOR will conduct its operations in the Territory through
offices or agencies to be maintained by DISTRIBUTOR at its sole cost
and expense.
4.2 If DISTRIBUTOR sells or distributes the Products outside the Territory,
whether directly or indirectly through DISTRIBUTOR's cooperation or in
conjunction with other third parties, or to customers outside the
Territory without the prior knowledge and consent of PPG SHANGHAI, PPG
SHANGHAI shall have the right to terminate with immediate effect this
Agreement and any existing incentive arrangements between PPG SHANGHAI
and DISTRIBUTOR, whether entered into before or after the commencement
of the Agreement.
4.3 DISTRIBUTOR agrees to satisfy the annual and quarterly sale targets for
the Products set forth in Appendix 3 herein as mutually agreed to by
the parties hereof.
4.4 DISTRIBUTOR and PPG Shanghai shall be responsible for providing
technical support and after sale services to the Territory. PPG
Shanghai's responsibility under this Section 4.4 is defined in Section
8.
5. PRICES AND TERMS
5.1 PPG SHANGHAI agrees that PPG SHANGHAI will sell and DISTRIBUTOR agrees
to buy the Products at the prices agreed to by the parties from time to
time and subject to the terms and conditions stated herein. The prices
in effect as of the Effective Date of the Agreement are set forth on
Appendix 5. The prices for the Products must be agreed upon by PPG
SHANGHAI at the time of PPG SHANGHAI's written acceptance of an order
hereunder. Unless otherwise agreed by PPG SHANGHAI in writing,
DISTRIBUTOR shall prepay all the invoiced amount in the currency and
manner as indicated by PPG Shanghai. DISTRIBUTOR shall be deemed to
complete its payment obligation upon full payment of the invoiced sum,
and such amount has been allocated into the account as directed by PPG
SHANGHAI. PPG SHANGHAI shall only have the obligation to deliver the
Products upon full and due payment.
5.2 PPG SHANGHAI reserves the right to adjust its selling prices based on
local market situation.
5.3 PPG SHANGHAI shall bear the cost of transportation from overseas to its
own warehouse, insurance and export / import duty for any Products to
be sold to Distributor hereunder. DISTRIBUTOR shall pick up the ordered
Products from PPG SHANGHAI by its own transport agency to its own
places at its own expenses.
6. INTENT
It is the intent of this Agreement, and PPG SHANGHAI and DISTRIBUTOR agree,
that:
(a) no consignment shipments shall be made to DISTRIBUTOR;
(b) DISTRIBUTOR is not authorized to sell the Products in any area outside
the Territory or to establish or operate a "permanent establishment" in
any country on behalf of PPG SHANGHAI;
(c) DISTRIBUTOR shall take no action which would cause PPG SHANGHAI to be
classified or to be considered as doing business in any country under
the laws of any country, or which would cause PPG SHANGHAI to become
subject to the income tax, excess profits tax, corporation receipts
tax, or any other tax of any country;
(d) DISTRIBUTOR has no authority to conclude contracts on behalf of or in
the name of PPG SHANGHAI;
(e) DISTRIBUTOR shall hold PPG SHANGHAI harmless from any taxes or other
liability of any type, kind or nature, assessed against PPG SHANGHAI
because of DISTRIBUTOR taking any action prohibited by subparagraphs
(b), (c) and (d) above;
(f) DISTRIBUTOR distributes the Products solely as an independent
contractor and is not a franchisee, employee, partner or agent of PPG
SHANGHAI and agrees not to represent the relationship as otherwise;
(g) No fee or other mandatory consideration has been paid by DISTRIBUTOR to
PPG SHANGHAI for issuance of this Agreement.
8. PPG SHANGHAI'S RESPONSIBILITIES
(a) PPG SHANGHAI shall use reasonable commercial efforts to support
DISTRIBUTOR in its sale and marketing. PPG SHANGHAI shall provide its
assistance in sale by providing DISTRIBUTOR with its usual and newly
developed sale materials, samples and sale items from time to time
through its sale/technical representatives.
(b) Upon request by DISTRIBUTOR, PPG SHANGHAI shall provide DISTRIBUTOR
with extra support by generally providing the relevant technique and
other manner of consultation in relation to sale and use of Products.
(c) In pursuance to the reasonable request of DISTRIBUTOR, PPG SHANGHAI
shall arrange training for DISTRIBUTOR in accordance with the product
training generally provided by PPG SHANGHAI at its Training Centers or
other pre-agreed venues.
(d) PPG SHANGHAI shall use reasonable commercial efforts to provide
forthwith DISTRIBUTOR with the quantity of Products ordered by it and
accepted by PPG SHANGHAI. The supplying responsibility of PPG SHANGHAI
shall be subject to the stock of the ordered products at the time when
DISTRIBUTOR's order is made with PPG SHANGHAI.
(e) PPG SHANGHAI shall provide DISTRIBUTOR Quarterly and Annual Rebate as
listed in Appendix 3 if agreed targets are achieved on time.
9. DISTRIBUTOR'S RESPONSIBILITIES
DISTRIBUTOR agrees that DISTRIBUTOR shall, use all reasonable efforts , do the
following:
(a) provide its customers with services regarding the Products, including
the safety and toxicological aspects of Products handling and ensure
that delivery to customers is made of technical information provided by
PPG SHANGHAI regarding Products, including the safety precautions and
toxicological aspects of Products handling;
(b) maintain an adequate supply of Products to expedite customer deliveries
and give prompt and efficient service to its customers in the
Territory;
(c) maintain knowledge of the market in the Territory and regularly
communicate such knowledge to PPG SHANGHAI;
(d) be responsible that the labels for the Products meet all governmental
and all applicable laws of the Territory regulatory requirements and
comply with all applicable laws of the Territory;
(e) provide to its customers, Product technical support and training and
ensure its customers maintain technical support and training to
end-users.
(f) plan and develop promotional and advertising strategies to enhance PPG
SHANGHAI's image and sales value in the region.
(g) Achieve agreed and signed sales target (Appendix 3).
10. PPG SHANGHAI TRADEMARKS
10.1 PPG SHANGHAI represents that it has rights and interests in the
trademarks used on the Products, including, without limitation, the PPG
logo listed on Appendix 2 hereto which shall herein be collectively
referred to as the "PPG Trademarks." PPG SHANGHAI hereby grants to
DISTRIBUTOR during the Term, subject to the terms and conditions
hereinafter specified, a limited, nonexclusive, nonassignable and
nontransferable right to use the PPG Trademarks in the Territory for or
in connection with its advertisement, promotion, sale and distribution
of Products. In connection with any use of the PPG Trademarks,
DISTRIBUTOR shall prominently indicate that DISTRIBUTOR is an
independent distributor for PPG SHANGHAI. DISTRIBUTOR's use shall be
subject to PPG SHANGHAI's approval and shall be limited to labels and
advertisements of the Products in the Territory and shall be at the
expense of DISTRIBUTOR. DISTRIBUTOR agrees to submit proposed uses of
the PPG Trademarks on labels to the Director of Automotive Refinish
(Asia Pacific region), or such other person as PPG SHANGHAI may
designate from time to time, for review and approval. DISTRIBUTOR
agrees that if it uses the PPG Trademarks on its labels and in its
advertisements, it shall only be in the form approved in writing by PPG
SHANGHAI. PPG SHANGHAI agrees that it will not unreasonably withhold
approval of any labels or advertising material submitted to it by
DISTRIBUTOR for approval and use pursuant to the provisions hereof.
DISTRIBUTOR will not seek to obtain any registration of any of the PPG
Trademarks. Upon termination of this Agreement, DISTRIBUTOR shall
forthwith cease all further use of the PPG Trademarks and shall destroy
all unused labels and advertisements containing the PPG Trademarks.
Thereafter, DISTRIBUTOR shall not use any PPG Trademarks or trade or
corporate names similar thereto.
10.2 DISTRIBUTOR acknowledges PPG SHANGHAI's exclusive right and interests
in relation to the PPG Trademarks and further acknowledges that all
copyrights, patent, utility model rights and all other industrial
property rights of whatever kind used in or in connection with the
Products are the sole and exclusive property of PPG SHANGHAI or PPG and
that DISTRIBUTOR will not, whether during the Term of this appointment
or after its expiry or termination, knowingly do or cause to be done
any act or thing directly or indirectly, contest or in any way impair
or attempting to impair PPG SHANGHAI or PPG's rights, titles or
interests in the PPG Trademarks.
10.3 DISTRIBUTOR shall not apply for registration of the PPG Trademarks in
the People's Republic of China or in any other countries.
11. WARRANTY AND LIMITATION
11.1 PPG SHANGHAI warrants only its title to the Products and that the
Products will be as set forth in the warranty statement, if any, on the
Products' labeling or in the absence of any such warranty statement
that the Products will conform to PPG SHANGHAI's standard warranty when
they are taken from PPG SHANGHAI's warehouse by DISTRIUTOR or its
transport agent. DISTRIBUTOR is not authorized to make warranties or
representations on behalf of PPG SHANGHAI and shall make no such
warranties or representations. THESE ARE THE ONLY REPRESENTATIONS OR
WARRANTIES THAT PPG SHANGHAI MAKES, AND ALL OTHER EXPRESS OR IMPLIED
WARRANTIES UNDER STATUTE OR ARISING OTHERWISE IN LAW FROM A COURSE OF
DEALING OR USAGE OF TRADE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, ARE
DISCLAIMED BY PPG SHANGHAI. In the event that the Product fails to
conform to the warranties herein given, DISTRIBUTOR's exclusive remedy
and PPG SHANGHAI's sole responsibility is, at PPG SHANGHAI's option,
limited to the replacement of such nonconforming Product at PPG
SHANGHAI's expense or the refund of the purchase price attributable to
a specific delivery as to which a claim is made. For the avoidance of
doubt, PPG SHANGHAI hereby declares and represents that PPG SHANGHAI is
not responsible for any damage to the Products after they have been
taken away from PPG SHANGHAI's warehouse and caused by DISTRIBUTOR or
its transport agent.
11.2 It is PPG SHANGHAI's responsibility to ensure that mis-delivery of
Product is kept to the minimum. DISTRIBUTOR shall inspect the Products
within 48 hours upon delivery. In case of discrepancy found in Products
delivered, DISTRIBUTOR shall report to PPG SHANGHAI in writing,
detailing all the discrepancies within 48 hours after delivery. PPG
SHANGHAI will not accept any claims for discrepancy in delivery beyond
the 48 hours period. If Products are found damaged upon delivery,
DISTRIBUTOR or its customers who directly receive the delivery shall
report to PPG SHANGHAI in writing within 48 hours. The necessary and
sufficient evidence (and photos) required for insurance claim must be
submitted altogether. None of the damaged Products shall be disposed of
until the claim is settled by the insurance company or PPG SHANGHAI.
11.3 DISTRIBUTOR assumes all responsibility, risk and liability arising from
(i) the unloading, discharge, storage, handling and use of the
Products, including use thereof alone or in combination with other
substances; (ii) the improper functioning or failure of unloading,
discharge, transportation or storage systems equipment used by
DISTRIBUTOR, whether furnished or recommended by PPG SHANGHAI or not;
and (iii) the failure to comply with laws, rules and regulations
governing unloading, discharge, storage, handling and use of the
Products.
12. FORCE MAJEURE
PPG SHANGHAI's failure or inability to make, or DISTRIBUTOR's failure or
inability to take, any delivery or deliveries when due, or the failure or
inability of either party to effect timely performance of any other obligation
required of it hereunder, if caused by "force majeure" as hereinafter defined,
shall not constitute a default hereunder or subject the party affected by force
majeure to any liability to the other; provided, however, that the party so
affected shall promptly notify the other of the existence thereof and of its
expected duration and the estimated effect thereof upon its ability to perform
its obligations hereunder. Such party shall promptly notify the other party when
such force majeure circumstance has ceased to affect its ability to perform its
obligations hereunder. The quantity to be delivered hereunder shall be reduced
to the extent of the deliveries omitted for such cause or causes, unless both
parties agree that the total quantity to be delivered hereunder shall remain
unchanged. For so long as its ability to perform hereunder is affected by such
force majeure circumstance, PPG SHANGHAI may, at its option, elect to allocate
its total production of Product among its various requirements therefor (e.g.,
manufacturing and sales) in such manner as PPG SHANGHAI deems practicable and
which, in the opinion of PPG SHANGHAI, is fair and reasonable. During the time
that PPG SHANGHAI is unable to make deliveries or otherwise perform, it shall
not be obligated to procure, or to use its best efforts to procure, any quantity
of Product sold hereunder from any alternate producer or supplier. As used
herein, the term "force majeure" shall mean and include any act of God, nature
or the public enemy, accident, explosion, operation malfunction or interruption,
fire, storm, earthquake, flood, drought, perils of the sea, strikes, lockouts,
labor disputes, riots, sabotage, embargo, war (whether or not declared and
whether or not the United States of America is a participant), federal, state or
municipal legal restriction or limitation or compliance therewith, inability to
obtain export licenses, failure or delay of transportation, shortage of, or
inability to obtain, raw materials, supplies, equipment, fuel, power, labor, or
other operational necessity, interruption, or curtailment of power supply, or
any other circumstance of a similar or different nature beyond the reasonable
control of the party affected thereby. In this connection, a party shall not be
required to resolve labor disputes or disputes with suppliers of raw materials,
supplies, equipment, fuel or power, except in accordance with such party's
business judgment as to its best interest.
13. PRODUCT HANDLING
DISTRIBUTOR acknowledges that it has experience and expertise in handling and
storing the Products, and that DISTRIBUTOR has the obligation to handle, store
and distribute the Products safely and properly.
14. PRODUCT SAFETY
PPG SHANGHAI and DISTRIBUTOR recognize the importance of product safety
considerations and the need to protect persons and property against unsafe
conditions that could occur from the improper use, transportation, storage,
handling, distribution or disposal of the Products sold hereunder. PPG SHANGHAI
and DISTRIBUTOR will follow PPG's Responsible Care(R) Distributor Guidelines as
set forth in the attached Appendix I (Responsible Care(R) is a registered
trademark in the United States of the American Chemistry Council ). Accordingly,
PPG SHANGHAI will furnish certain information to DISTRIBUTOR regarding product
safety and handling aspects of the Products, and DISTRIBUTOR, in addition to its
independent responsibility to obtain and implement a product safety program
regarding the Products, will implement and conform to PPG SHANGHAI's product
safety recommendations and Responsible Care(R) Distributor Guidelines,
DISTRIBUTOR will also provide its customers, employees and other third parties
foreseeably exposed to the Products with appropriate warnings, advice and other
material regarding the Products, including all product safety and handling
material provided by PPG SHANGHAI, and will ensure that the Products are used,
stored, handled, distributed, transported and disposed of in a manner consistent
with all of the above recommendations.
15. PRODUCT DISCONTINUANCE
DISTRIBUTOR acknowledges that it has express notice that PPG or PPG SHANGHAI may
at any time discontinue the production and/or sale of any of the Products. If
PPG or PPG SHANGHAI does discontinue the production and/or sale of any of the
Products, this Agreement shall automatically terminate with respect to such
discontinued Product, and DISTRIBUTOR shall not be entitled to claim or receive
from PPG or PPG SHANGHAI any compensation, reimbursement or damages of any
nature as a result (direct or indirect) of PPG or PPG SHANGHAI's discontinuance
of the production and/or sale of the affected Product.
16. LIMITATION OF DAMAGES
Notwithstanding the provisions of any law, rule, or regulation to the contrary,
on the termination of this Agreement for any cause whatsoever, DISTRIBUTOR shall
not be entitled to claim or receive from PPG SHANGHAI any compensation,
reimbursement, or damages on account of any expenditure or commitment of any
kind in connection with its business or on account of goodwill or on account of
loss of prospective profits or otherwise. In no event shall PPG SHANGHAI be
liable for consequential damages.
17. BUSINESS CONDUCT
17.1 In the performance of its responsibilities pursuant to this Agreement,
DISTRIBUTOR agrees to make every effort to operate as a good,
responsible and ethical corporate entity in the Territory and will
comply with the laws of the Territory, the applicable laws of the
United States of America and the countries of origin of the Products.
DISTRIBUTOR further agrees that it will not, in connection with this
Agreement or its performance hereunder, directly or indirectly offer,
pay, promise to pay or authorize the payment of any money or thing of
value to any employee of a customer or to any government official or to
any person,
(a) to improperly or unlawfully influence any act or decision of
such customer employee or governmental official, including a
decision to fail to perform his/her official functions, or
(b) to induce such customer employee or government official to use
his/her influence with the customer or the government (or
instrumentality thereof), respectively, to affect or influence
any act or decision of such customer or government (or
instrumentality), in order to assist PPG SHANGHAI or
DISTRIBUTOR in obtaining or retaining business or directing
business to any other party. As used in this Section, the term
"government official" means any officer or employee of any
government or any department, agency, instrumentality or
wholly-owned corporation thereof, or any person acting in an
official capacity for or on behalf of any such government or
department, agency, instrumentality or wholly-owned
corporation thereof, or any candidate for political office.
17.2 DISTRIBUTOR agrees to notify PPG SHANGHAI immediately of any
solicitation, demand or other request for anything of value, by or on
behalf of any employee of a customer, government official or employee
of any government which is directed to itself or to PPG SHANGHAI
related to the sale and/or service of the Products.
17.3 DISTRIBUTOR agrees to require any sub-distributor or other person which
it hires or engages to assist in the performance of this Agreement to
comply with the provisions of this Section 17.
18. TERM OF AGREEMENT
18.1 The term of this Agreement (the "Term") shall commence on the date
first above written and shall terminate on 31 December 2006, unless
sooner terminated in accordance with the provisions hereof.
18.2 The parties hereof intend to form a long-term relationship. To this
end, if both parties wish to renew this Agreement, the parties shall
agree on such intention in writing at least thirty(30) days before the
expiry of the current Term of the Agreement. The parties shall agree on
the terms and conditions of the renewal, and enter into a new agreement
within sixty(60) days from the expiry of this Agreement. During this
sixty(60) days period, both parties shall continue to perform their
respective obligation under the same terms and conditions of this
Agreement.
18.3 In the event that there is no written notice issued by either party to
show the intention to renew this Agreement in the said thirty(30) days
before the expiry of the current Term of the Agreement, the Agreement
shall terminate at the end of the said thirty(30) days. In the event
that such a notice of intention to renew is issued, but the parties are
not able to enter into a new agreement within that sixty(60) days from
the expiry of this Agreement, this Agreement shall terminate at the end
of the said sixty(60) days.
19. DEFAULT AND TERMINATION
19.1 If either party be in default with respect to any of the terms or
conditions of this Agreement, including, without limitation,
DISTRIBUTOR's failure to pay any invoice of PPG SHANGHAI in accordance
with its terms, and if it fails to correct such default or failure
within ten (10) business days following written notice thereof from the
other, the party serving such notice may, without prejudice to any
other right or remedy, defer further performance hereunder until such
default be remedied or terminate this Agreement by written notice to
the other, and the same shall terminate immediately upon the giving of
such notice.
19.2 PPG SHANGHAI shall have the right to terminate this Agreement and/or
suspend its performance hereunder immediately upon giving notice to
DISTRIBUTOR, which termination shall be effective upon receipt of
notice, if any one of the following occurs: (i) DISTRIBUTOR engages in
fraudulent conduct in its dealings with PPG SHANGHAI or the Products;
(ii) DISTRIBUTOR, or any principal owner of DISTRIBUTOR, is convicted
of a crime which, in PPG SHANGHAI's reasonable judgment, may adversely
affect the goodwill or interest of DISTRIBUTOR or of PPG SHANGHAI;
(iii) DISTRIBUTOR becomes insolvent, assigns or attempts to assign its
business assets for the benefit of creditors, institutes or has
instituted against it proceedings in bankruptcy, or dissolves or
liquidates the business of DISTRIBUTOR; or (iv) the business licence of
DISTRIBUTOR is cancelled by the State Administration of Industry and
Commerce.
20. DISPUTE RESOLUTION
20.1 All disputes, controversies and claims arising from or incidental to
this Agreement shall be resolved by both parties through friendly
consultation. If no resolution can be reached within thirty (30) days
following the date on which one party informed the other party his
intention to refer the disputes, controversies and claims for
arbitration, such disputes, controversies and claims shall be referred
to the China International Economic and Trade Arbitration Committee
("Arbitration Committee") for a final and binding arbitration in
pursuance to the arbitration rules which is effective on the date
hereof.
20.2 The venue of arbitration shall be in Shanghai or Beijing, China (to be
decided by PPG SHANGHAI).
20.3 The arbitration shall be conducted in English and Chinese.
20.4 There shall be three arbitrators. Each of PPG SHANGHAI and DISTRIBUTOR
shall select one; the chief arbitrator shall be selected by the first
two arbitrators, provided that where the first two arbitrators are not
able to agree on the appointment of the chief arbitrator within ten
(10) days of the later of their appointments, the chief arbitrator
shall be selected by the chairman of the Arbitration Committee.
20.5 The chief arbitrator shall not be a PRC national or a national of the
United States.
20.6 The arbitration award shall be final and binding on both parties. Each
party agree to be bound by the arbitration award. The arbitration fees
and enforcement costs (including witness fees and reasonable legal
fees) shall be borne by the losing party unless provided otherwise in
the arbitration award.
20.7 During the occurrence of the dispute and the arbitration, other than
the issues in dispute, each party shall continuously exercise its
undisturbed rights and discharge its undisturbed obligations under this
agreement.
21. GOVERNING LAW
The validity, construction, and performance of this Agreement shall be governed
by and interpreted in accordance with the laws of the People's Republic of
China.
22. LANGUAGE AND COUNTERPART
This Agreement shall be executed in two (2) counterparts of the Chinese
language text.
23. ENTIRE AGREEMENT
This writing, including all documents attached to and/or referenced herein,
constitutes the entire agreement between PPG SHANGHAI and DISTRIBUTOR regarding
the subject matter hereof, terminating and superseding any prior agreements
relating to the subject matter hereof, and there are no understandings,
representations, or warranties of any kind except as expressly set forth herein.
No modification, amendment or change in this Agreement or addition hereto shall
be effective or binding on either of the parties hereto unless set forth in a
writing which specifically references this Agreement and is executed by the
respective duly authorized representatives of PPG SHANGHAI and DISTRIBUTOR and,
if required, upon approval by competent governmental authorities, and no
modifications shall be effected by any DISTRIBUTOR purchase order forms or other
documents containing terms or conditions at variance with or in addition to
those in this Agreement.
IN WITNESS WHEREOF, PPG SHANGHAI and DISTRIBUTOR have executed this Distributor
Agreement effective the day, month, and year first above written.
Witness: PPG Paints Trading (Shanghai) Co., Ltd.
/s/ Xx xxxx By: /s/ Xxxx Kit Yeg, Xxxxxxx
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Name: Xxxx Kit Yeg, Xxxxxxx
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Title: General Manager
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Witness: [DISTRIBUTOR]
/s/ Xxxx Xxxxxxxxxxxx By /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: CEO
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