Exhibit 10.3
MANUFACTURING SUB-LICENSE AGREEMENT
(On Using the Registered Trademarks of Pabst Blue Ribbon for Beer Production)
THIS SUB-LICENSE AGREEMENT dated the __ day of ____________ 2003
BETWEEN:
INNO UP LIMITED, A BRITISH VIRGIN ISLANDS CORPORATION
having offices at
23/F., Hang Seng Causeway Bay Building
00 Xxx Xx Xxxxxx, Xxxxxxxx Xxx
Xxxx Xxxx
(hereinafter referred to as "Sub-Licensor")
AND
ZHAOQING BLUE RIBBON BREWERY HIGH WORTH LIMITED, A COMPANY INCORPORATED IN THE
PEOPLE'S REPUBLIC OF CHINA
having offices at
Duanzhou Xx Xx
Zhaoqing, Guangdong 526020
People's Republic of China
(hereinafter referred to as "Sub-Licensee")
ARTICLE 1. RECITALS
1.1 Sub-Licensor has been granted the sole, exclusive, irrevocable right
and license to produce, market and distribute the Beverage in the Territory from
the Sub-Licensor's breweries located in the Territory, and to enter into
manufacturing sublicense agreements and/or marketing and distribution agreements
with other entities to produce and/or distribute the Beverage in any part of or
all of the Territory, under the Trademarks and using the Know-how and Trade
Secret but always subject to the terms of the Manufacturing License Agreement
signed between Pabst Brewing Company (hereinafter referred to as "License
Holder") and Sub-Licensor dated September 5, 2003;
1.2 Sub-Licensor has been granted the right to use the registered the
trademarks "PABST BLUE RIBBON", "B and HOPLEAF Design", "COMBINATION OF PABST
(in Chinese characters) BLUE RIBBON and Design & HOP LEAF Design" and "PABST
BLUE RIBBON and Design" under registration numbers 559292, 559293, 559294 and
596190 in the Trade-marks Office in the People's Republic of China in
association with said Beverage; and
1.3 Sub-Licensor has also been granted by License Holder the right to use
the Trade Secret essential to the production of said Beverage and valuable
information and Know-how of importance to the production of said Beverage;
1.4 The market and valuable reputation of said Beverage and goodwill for
said Trademarks has been established in the Territory;
1.5 Sub-Licensor and Sub-Licensee wish to enter into this
Manufacturing Sub-License Agreement (hereinafter referred to as the "Sub-License
Agreement") in order to facilitate the manufacturing and production of said
Beverage in the Territory.
NOW THEREFORE THIS SUB-LICENSE AGREEMENT WITNESSETH that in
consideration of the promises and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged) the parties hereto
agree as follows:
ARTICLE 2. DEFINITIONS
When used herein (or in any schedules or amendments hereto), the
following terms shall have the following meanings, respectively:
2.1 "SUB-LICENSE AGREEMENT" means this manufacturing sub-license
agreement, the recitals set forth in the preamble and all schedules and
amendments hereto, and "herein", "hereunder" or "hereof" means all and every
part of this Sub-License Agreement, unless the context clearly indicates
otherwise.
2.2 "BEVERAGE" means PABST BLUE RIBBON BEER, PABST GENUINE DRAFT BEER and
PABST ICE BEER and any other beverage that is an extension thereof or is
reasonably related to the trade name or trade dress of the Trademarks brewed
from barley malt and hops and other grains according to a secret process
originated, owned and possessed by License Holder.
2.3 "EFFECTIVE DATE" means November 7, 2003.
2.4 "MINIMUM GUARANTEED ANNUAL TONNAGE (MGAT)" shall mean the total amount
of production of Beverage using the Trademarks, as specified in Section 10.1
(1), required to be produced and shipped each Yearly Period.
2.5 "MINIMUM GUARANTEED ANNUAL ROYALTY PAYMENT (MGARP)" shall mean the
aggregated annual minimum royalty payment required to be paid by Sub-Licensee to
License Holder or Sub-Licensor each Yearly Period, as set forth in Section 10.1
(2).
2.6 "KNOW-HOW" means the confidential internal industrial experience of
License Holder gained in the production and bottling of said Beverage and
includes, without limitation, the recipes, parameters required for optimal
working conditions of said secret process, information as to the types and
brands of essential or preferred raw materials, and information on
essential or preferred equipment for carrying out said secret process; any
extensions and/or renewals thereof and any marks and logos.
2.7 "CONTRACTUAL TERM" means each ten year term under this Sub-License
Agreement.
2.8 "TERM OF THIS SUB-LICENSE AGREEMENT" means the period from the
Effective Date to the "TERMINATION DATE", which for the purposes hereof shall
mean November 6, 2013 (the "FIRST CONTRACTUAL TERM").
2.9 "TERRITORY" means the People's Republic of China; excluding therefrom
Hong Kong.
2.10 "TRADEMARKS" means the trademarks "PABST BLUE RIBBON", "B and HOP LEAF
Design", "COMBINATION OF PABST (in Chinese characters) BLUE RIBBON and Design &
HOP LEAF Design" and "PABST BLUE RIBBON and Design" for mineral water registered
in the Trade-marks Office in the People's Republic of China, under registration
numbers 559292, 559293, 559294 and 596190 and any extensions and renewals
thereof and any similar marks or logos.
2.11 "TRADE SECRET" means the secret process employed for the production
and bottling of said Beverage owned and possessed by License Holder.
2.12 "YEARLY PERIOD" means a twelve month period commencing on the
Effective Date of this Agreement.
2.13 "SUB-LICENSEE", for purposes of calculating royalties and volumes,
shall mean Zhaoqing Blue Ribbon Brewery High Worth Limited (including its
subsidiary, Hubei Blue Ribbon Brewery High Worth Limited ("Hubei Brewery")) and
any and all other breweries permitted and sub-licensed to produce and
manufacture the Beverage, provided that there shall be no duplication in
calculating the volumes and royalties. Otherwise, "SUB-LICENSEE" shall refer to
Zhaoqing Blue Ribbon Brewery High Worth Limited, including Hubei Brewery.
ARTICLE 3. MANUFACTURING SUB-LICENSE
3.1 Subject to the terms and conditions of this Sub-License Agreement,
Sub-Licensor hereby grants to Sub-Licensee, for and during the first Contractual
Term of this Sub-License Agreement, the non-exclusive, irrevocable right and
license to produce the Beverage in the Territory from Sub-Licensee's breweries
located in the Territory, under the Trademarks and using the Know-how and Trade
Secret but always subject to the term of this Sub-License Agreement.
3.2 Sub-Licensee shall produce a quantity of the Beverage in accordance
with the monthly indications and instructions given by Blue Ribbon Beer
Marketing Company Limited (hereinafter referred to as the "Marketing Company"),
a company appointed and authorized by Sub-Licensor for coordination and
unification of the sales of the Beverage in the Territory.
3.3 Subject to the terms of this Sub-License Agreement, Sub-Licensee
covenants and agrees that it shall, during the currency of this Sub-License
Agreement and any extensions thereof, sell all of the Beverage produced from its
breweries located in the Territory to the Marketing Company, subject to
settlement prices to be regulated by the Blue Ribbon Beer
Committee (hereinafter referred to as the "Committee"). The details of the
composition and functions of the Committee are set forth in Exhibit A.
ARTICLE 4. TECHNICAL ASSISTANCE
4.1 Sub-Licensor agrees to continually provide to Sub-Licensee, and
Sub-Licensee agrees to obtain from Sub-Licensor, the necessary Trade Secret and
Know-how as required or recommended in connection with Sub-Licensee's
manufacturing of the Beverage at no cost to Sub-Licensee.
4.2 From time to time, for assurance and maintenance of the quality of the
Beverage, Sub-Licensee may request by reasonable notice and Sub-Licensor at its
discretion may arrange to provide, the services and personal attendance of one
or more of License Holder's experts. Nothing herein shall preclude Sub-Licensor
or License Holder from having one of their representatives at all times in
personal attendance at Sub-Licensee's various brewing facilities during the term
of the Sub-License Agreement.
ARTICLE 5. DISTRIBUTION
5.1 Sub-Licensee agrees that all of the Beverage produced by its breweries
located in the Territory should only be sold to the market through the Marketing
Company for the purpose of unifying the sales of the Beverage in the Territory.
5.2 Sub-Licensee is required to appoint one representative as a committee
member to the Committee as organized by the Sub-Licensor in order to coordinate
the manufacturing, production and distribution of the Beverage in the Territory,
including the determination of ex-factory and market selling prices for the
Beverage.
ARTICLE 6. QUALITY CONTROL
6.1 All Beverages produced, bottled, stored and/or shipped by Sub-Licensee
pursuant to this Sub-License Agreement shall be of the same kind,
characteristics, and quality as the Beverage produced and sold under said
Trademarks by License Holder, and Sub-Licensee shall make use of the technical
assistance provided by Sub-Licensor and License Holder under Article 4 hereof.
Sub-Licensee shall not deviate in any manner from Sub-Licensor's and License
Holder's reasonable directions or otherwise effect any material changes to said
Beverage without having obtained Sub-Licensor's and License Holders' prior
written consent, upon full written disclosure of all proposed changes by
Sub-Licensee, which consent shall not be unreasonably withheld or delayed.
6.2 Sub-Licensor and License Holder shall have the right to inspect
Sub-Licensee's brewing facilities where the Beverage is being brewed in the
Territory upon reasonable prior notice to ensure Sub-Licensee has adequate
capacity, excellent hygiene and cleanliness, a pure source of adequate clean
water and adequate equipment sufficient to meet Sub-Licensee's obligations
hereunder and in accordance with the food processing ordinances of the People's
Republic of China. Should said facility not meet Sub-Licensor's standards, which
standards are to be agreed upon in good faith by Sub-Licensor and Sub-Licensee
within thirty (30) days following the execution of this agreement, Sub-Licensor
shall instruct Sub-Licensee in writing as to necessary remedial measures and
Sub-Licensee shall have sixty (60) days to complete such remedial measures,
unless it is clear that the Sub-Licensee, through no fault of its own, will be
unable to complete such remedial measures within such sixty (60) day period, in
which case the Sub-Licensee shall have such additional time as is reasonably
required in order to complete same but in no event longer than 180 days
following the written notice calling for remedial measures. Further,
Sub-Licensor, from time to time, shall have the right upon reasonable prior
notice to analyze and inspect brewing activities to ensure quality control and
conformity of the Beverage are being maintained.
6.3 Any acquisition of additional production or bottling facilities at
additional locations for the Beverage by Sub-Licensee shall be subject to notice
to Sub-Licensor. In particular, Sub-Licensee shall give Sub-Licensor
sufficient written notice of any intended acquisition of a production or
bottling facility for the Beverage so as to give Sub-Licensor's representatives,
experts and designees sufficient time to inspect the premises and facilities and
to analyze samples of the newly produced or bottled Beverage prior to any
commercial production or bottling.
6.4 The purpose of the provisions of this Article and of any other
provision of this Sub-License Agreement subjecting Sub-Licensee to any control
or supervision by Sub-Licensor and/or License Holder is to assure the
establishment and maintenance of the quality and intended characteristics of the
produced and bottled Beverage for the protection of the general public and
License Holder's goodwill in its Trademarks and reputation.
6.5 (a) On a semiannual basis, Sub-Licensee shall submit all packaging,
labels, carton, containers, packing, wrapping and similar materials to be used
on or in connection with the Beverage ("Packaging Materials") as soon as
reasonably practicable in advance of the use thereof by Sub-Licensee, and, in
any case, in order to provide sufficient time for Sub-Licensor or License Holder
to complete their review and for Sub-Licensee to implement requested
modifications, if any. Sub-Licensee shall submit to Sub-Licensor one production
sample of each new line extension of the Beverage prior to the initial
production thereof. Production samples shall be submitted together with
associated Packaging Materials for such Beverage. Sub-Licensor shall have the
right to require Sub-Licensee to make modifications to Packaging Materials to
the extent that Sub-Licensor, in the exercise of its reasonable business
judgment, concludes that such Packaging Materials may have a material adverse
effect on License Holder's goodwill in Trademarks and reputation. Sub-Licensor
shall advise Sub-Licensee of the reasons for such disapproval and the actions,
if any, which Sub-Licensee may take to obtain Sub-Licensor's approval.
If Sub-Licensee produces any Beverage that does not meet the quality
standards of the Beverage, Sub-Licensor may, together with other remedies
available to it, by written notice require production of such Beverage to be
immediately suspended. Any modification of the Beverage must be submitted in
advance for Sub-Licensor's written approval, which approval shall not be
unreasonably withheld.
(b) Sub-Licensee agrees to make available at no charge to Sub-Licensor, as
and when requested by Sub-Licensor, one production sample of the Beverage from
time to time for the purpose of comparison with earlier samples or to test for
compliance with applicable laws and standards and to permit Sub-Licensor or
License Holder upon reasonable request to inspect Sub-Licensee's manufacturing
operations and testing records for the Beverage. Sub-Licensor's approval
hereunder shall not be construed as Sub-Licensor's agreement that the Beverage
complies with applicable laws and standards. Such determination is solely the
responsibility of Sub-Licensee.
(c) The Beverage manufactured by Sub-Licensee must conform in all respects
to production samples approved by Sub-Licensor. If in Sub-Licensor's reasonable
judgment the quality of the Beverage originally approved has deteriorated in
later production runs, or if the Beverage has otherwise been altered,
Sub-Licensor may, in addition to other remedies available to it, by written
notice to Sub-Licensee, require production of such Beverage to be immediately
suspended.
(d) On every carton, label, can, keg, bottle or other container for said
Beverage produced and bottled pursuant to this Sub-License Agreement,
Sub-Licensee will use or cause others to use the Trademarks "Pabst", "Blue
Ribbon" or "Pabst Blue Ribbon" accompanied by the (R) symbol, as appropriate, or
such other notice as reasonably required by Sub-Licensor and such carton,
label, can, keg, bottle or other container of said Beverage shall contain the
following wording in English or Chinese: "BREWED UNDER LICENSE FROM PABST
BREWING COMPANY, USA" or similar labeling that complies with Chinese trademark
labeling laws.
(e) Sub-Licensee shall not alter or modify the Licensed Trademarks in any
manner.
6.6 Sub-Licensor and Sub-Licensee, together with other permitted
manufacturers of the Beverage, as well as the Marketing Company, shall meet
regularly at mutually acceptable times at a venue mutually convenient to them
for Committee meetings, at which time Sub-Licensee, other permitted
manufacturers and the Marketing Company, shall provide Sub-Licensor with their
reports on (i) consumer acceptance and reaction with respect to the various
Beverages manufactured and sold; (ii) current market conditions for sales of the
Beverage; (iii) competition and current activity of competitors; (iv) pricing
strategy; and (v) any other information which may be reasonably requested by
Sub-Licensor related to the manufacturing, advertising, and distribution of the
Beverage in the Territory.
6.7 Sub-Licensee will use its commercially reasonable efforts to produce
the Beverage in the Territory during the term of this Sub-License Agreement,
including, without limitation, Sub-Licensee shall refrain from any unfair trade
practices or other activities detrimental to License Holder's goodwill or
reputation. In addition, Sub-Licensee agrees that it will not do any act to
contravene Sub-Licensor's rights or take any action which would in any way
defeat or diminish the commercial value of the License Holder's Trademarks in
the Territory.
6.8 The submissions required to be made by Sub-Licensee pursuant to the
provisions of this Article 6 shall be sent to Sub-Licensor twenty (20) days
prior to the anticipated date(s) of commercial production. If Sub-Licensor
fails to respond within the five (5) days of receipt of the submitted items,
then Sub-Licensee shall give Sub-Licensor an additional five (5) days notice
within which to respond. If Sub-Licensor fails to respond then the artwork and
other submissions shall be deemed approved.
ARTICLE 7. TRADEMARKS
7.1 Sub-Licensor represents to Sub-Licensee that Sub-Licensor, as a
grantee or licensee, has obtained the right to use the said Trademarks and the
said Trademarks, as possessed and registered by License Holder, are valid and
enforceable, and Sub-Licensor has the sole right to use them in the Territory.
Sub-Licensee covenants to refrain from infringing or diluting said Trademarks,
using trademarks that are confusingly similar to the trade dress of Trademarks
for the production of other malt beverages or taking any action which would
challenge License
Holder's registrations or Sub-Licensor's rights to use said Trademarks in the
Territory. If Sub-Licensor in its reasonable opinion determines that
Sub-Licensee is engaging in such activity, Sub-Licensor shall instruct
Sub-Licensee in writing as to necessary remedial measures and Sub-Licensee shall
have thirty (30) days to cease its infringement or dilution of License Holder's
Trademarks, Trade Secrets or trade dress. If Sub-Licensee fails to complete
such remedial measures within such thirty (30) days Sub-Licensor may terminate
this Sub-License Agreement effective upon thirty (30) days written notice.
7.2 Sub-Licensor represents to Sub-Licensee and Sub-Licensee recognizes
that License Holder or its grantees or licensees possess registrations or other
protection of said Trademarks in jurisdictions other than within the
Territory and that none of such registrations or other trademarks and rights in
other jurisdictions are sub-licensed to Sub-Licensee under this Sub-License
Agreement or otherwise.
7.3 Unless terminated earlier under any other provision of this
Sub-License Agreement, the sub-license granted to Sub-Licensee herein to use
said Trademarks for manufacturing shall terminate upon final expiration of
Sub-Licensor's rights in and to said Trademarks in the Territory.
Notwithstanding the preceding sentence, Sub-Licensor covenants and agrees that
it shall take all reasonable and necessary efforts to preserve its rights in and
to the said Trademarks (it being acknowledged and agreed by Sub-Licensor that
the sub-license granted to Sub-Licensee hereunder to use the Trademarks is
intended to exist for the Term of this Sub-License Agreement, subject to the
terms and conditions as stipulated in the Manufacturing License Agreement signed
between Sub-Licensor and License Holder), including, without limitation, urging
License Holder to preserve the registrations in and to the Trademarks in the
Territory if any, including attending to the renewal of the registration of each
of said Trademarks in the Trade-marks Offices in China.
7.4 The Trademarks have been registered by License Holder with the Chinese
Trade-marks Office. Sub-Licensee will use its commercially reasonable efforts
to refrain from any acts, conduct or omissions which would jeopardize the
maintenance of such registrations in full force and effect during the term of
this Sub-License Agreement, or so long as protected by applicable law, whichever
is shorter.
7.5 Neither Sub-Licensee, its parent nor any subsidiary or affiliate of
Sub-Licensee, will register or attempt in any country to register copyrights in,
or to register as a trademark, service xxxx, design patent or industrial design
any of the Trademarks or derivations or adaptations thereof, or any word, symbol
or design which is so similar thereto as to suggest association with or
sponsorship by License Holder or any affiliate of License Holder or
Sub-Licensor. In the event of breach of the foregoing, Sub-Licensee agrees, at
Sub-Licensee's expense and at License Holder's or Sub-Licensor's request,
immediately to terminate the unauthorized registration activity and promptly to
execute and deliver, or cause to be delivered, to License Holder such
assignments and other documents as License Holder may require, to transfer to
License Holder all rights to the registrations, patents or applications
involved.
7.6 Sub-Licensee agrees that it will not use either the Trademarks, the
Know-how, the Trade Secrets, or the trade dress of License Holder or any other
material which is owned by License Holder or Sub-Licensor in any way other than
as herein authorized. In addition to any other remedies License Holder or
Sub-Licensor may have, Sub-Licensee agrees that the profits from any use thereof
on products other than the Beverage (unless authorized by Sub-Licensor in
writing,) and all profits from the use of any other copyrighted material of
License Holder without written authorization, shall be payable to License Holder
or Sub-Licensor.
7.7 Sub-Licensee agrees not to use any Trademarks or any trademark
incorporating all or any part of the Trademarks on any business sign, business
cards, stationery, or forms (except as licensed herein in connection with the
manufacture of the Beverage) or to use any Trademark or any parts thereof as the
name of its business or any division thereof which may in any way dilute License
Holder's Trademarks, unless otherwise agreed by License Holder or Sub-Licensor
in writing. Sub-Licensee may submit business cards, signs, stationary, or forms
for License Holder or Sub-Licensor's review. If License Holder or Sub-Licensor
fails to respond within five (5) days of the receipt of these items,
Sub-Licensee shall give License Holder or Sub-Licensor an additional five (5)
days within which to respond. If License Holder or Sub-Licensor fails to
respond within this additional time, the submitted items shall be deemed
approved.
ARTICLE 8. SECRECY
8.1 Sub-Licensor hereby represents and warrants to Sub-Licensee and
Sub-Licensee recognizes that License Holder is the owner of the Trade Secret and
Know-how, and that said Trade Secret exists and is secret and that said Know-how
is valuable and confidential. Sub-Licensee covenants to refrain from, and to
use its commercially reasonable efforts to prevent any disclosure of any part or
aspect of said Trade Secret and of said Know-how to any other person in any
manner which could impair its secrecy and confidentiality, and the commercial
value of said Trade Secret and Know-how.
8.2 Without restricting the generality of the foregoing Sub-Licensee
shall:
(a) Limit any disclosure of said Trade Secret and said Know-how to only
those of its employees and or consultants who have an actual need to know such
Trade Secret or Know-how in the performance of their duties and of this
Sub-License Agreement;
(b) Keep all data and records concerning said Trade Secret and Know-how
and all yeast embodying the Trade Secret secure against access by unauthorized
personnel or third persons.
(c) Return to License Holder or Sub-Licensor all data and records
concerning said Trade Secret and Know how in such a manner as to preserve their
secrecy upon termination of this Sub-License Agreement.
(d) If required by License Holder or Sub-Licensor, Sub-Licensee shall
obtain from each of its employees, agents, suppliers or contractors exposed to
said Trade Secret and Know-how execution of a secrecy agreement, and shall
diligently inform License Holder or Sub-Licensor of any breach of such secrecy
agreement, of which it becomes aware, by any employee, agent, supplier or
contractor.
8.3 Sub-Licensee recognizes that License Holder or its grantees or
licensees possess valuable rights in said Trade Secret and Know-how in
jurisdictions other than the Territory and that none of such rights in such
other jurisdictions are sub-licensed to Sub-Licensee under this Sub-License
Agreement or otherwise. In particular, Sub-Licensee covenants that it will
refrain from infringing any Trade Secret or Know- how right in any such other
jurisdiction.
8.4 To preserve the integrity of License Holder's name and product,
Sub-Licensee covenants that it will refrain from using said Trade Secret or any
of said Know-how in the
production or bottling of any beverage or other product which is not a Beverage
within the definition of this Sub-License Agreement and which is not under said
Trademark.
8.5 Sub-Licensee's duty hereunder to preserve the secrecy and
confidentiality of all material elements of said Trade Secret and Know-how and
Sub- Licensee's duties and Sub-Licensor's rights under Section 8.2(d) shall
survive any cessation of any sub-license herein granted and any termination of
this Sub-License Agreement and shall endure until said Trade Secret has become a
matter of general knowledge in the brewing trade, through no fault of
Sub-Licensee.
8.6 Sub-Licensee's obligations of secrecy hereunder shall not include or
apply to any information which Sub-Licensee can demonstrate was published in
open literature or otherwise publicly known without Sub-Licensee's knowledge or
which was known to it prior to disclosure by License Holder or which becomes
published or enters into the public domain through no act, omission or fault of
Sub-Licensee or is disclosed to Sub-Licensee by a third party having a right to
make such disclosure without an obligation of confidence.
8.7 Sub-Licensee shall refrain from continuing to use or using said Trade
Secret or any of said Know-how in the production, bottling, canning or kegging
of any Beverage or other product after expiration of this Sub-License Agreement.
ARTICLE 9. LEGAL REQUIREMENTS
9.1 Sub-Licensee shall strictly observe and comply with all relevant laws
and regulations to which it is subject concerning the Beverage and its raw
materials, production, bottling, storage, transport, labeling, designation
and/or the disposition of used bottles or other containers. In the event that
the Beverage or any direction issued, or requirement made, in respect thereto by
Sub-Licensor, or any label, designation or other information should fail to
comply with or should be contrary to any relevant law or regulation,
Sub-Licensee shall so inform Sub-Licensor, giving to Sub-Licensor, so far as
Sub-Licensee is able to under applicable law or regulation, an opportunity to
assist Sub-Licensee in bringing about compliance prior to exposure to damage,
liability or penalty.
9.2 Sub-Licensee shall have no claim against License Holder or
Sub-Licensor for any loss, cost or expense including, without limitation, injury
to or death of any person or persons arising in any manner out of any product
liability claims which may be filed against Sub-Licensee or Sub-Licensor
alleging any defect in the Beverage of any nature arising directly from
Sub-Licensee's production of such Beverage.
9.3 In the event Sub-Licensor is served with a notice of legal process or
claims are made against it related to or arising from matters which are the
subject matter of this Sub-License Agreement, Sub-Licensor shall notify
Sub-Licensee of any such claims as soon as practicable but in no event later
than fifteen (15) business days of receiving notification thereof and shall
allow Sub-Licensee or its insurer, if any, the opportunity to assume direction
and control of the defense and/or settlement of any such suit or claim, using
counsel of Sub-Licensee's or its insurer's selection, which counsel shall be
reasonably satisfactory to Sub-Licensor. Sub-Licensor shall use all reasonable
efforts to cooperate with Sub-Licensee and its insurer in the disposition of any
such claim or suit defended by Sub-Licensee or its insurer, if any, upon request
and Sub-Licensee agrees to pay all reasonable and necessary fees and costs
including attorneys fees reasonably incurred by Sub-Licensor in connection with
the service of
process and related litigation. In the event Sub-Licensor experiences any
increases in its general liability insurance premiums by reason of activities
arising from or related to the subject matter of this Sub-License Agreement,
Sub-Licensee shall, upon thirty (30) days written notice, pay the incremental
difference of the License Holder's or Sub-Licensor's insurance premiums
attributable to any claims arising from this Sub-License Agreement.
ARTICLE 10. REMUNERATION
10.1 In consideration of Sub-Licensor's granting Sub-Licensee the rights
and sub-licenses hereunder, Sub-Licensee agrees to pay to Sub-Licensor, at the
request of Sub-Licensor, an annual royalty fee as follows:
------------------
(3) On a proportional basis, for the respective share of the first
100,000 tonnes of the Beverage aggregately produced by
Sub-Licensee and other permitted manufacturers in the Territory
during a Yearly Period, Sub-Licensee shall pay Sub-Licensor a
royalty of US$16.00 per tonne. The percentage of volume shared by
Sub-Licensee in the annual production shall be regulated and
allocated by the Marketing Company under the supervision and
coordination of the Committee. For aggregate annual production of
Beverage over 100,000 tonnes in a Yearly Period, Sub-Licensee
shall pay, based on its proportional share in the total volume, a
royalty of US$14.00 per tonne for all tonnes over 100,000.
AND
(4) (2) As and for additional consideration for the grant of the
Sub-License hereunder, Sub-Licensee, together with other
permitted manufacturers in the Territory, shall produce, on an
aggregated basis, the minimum guaranteed tonnage and pay, on a
proportional sharing basis, Sub-Licensor a minimum guaranteed
annual royalty payment during the First Contractual Term of this
Sub-License Agreement or on the Second and Third Contractual
Terms as outlined below, in U.S. dollars. Sub-licensee represents
and agrees that it will produce (together with other permitted
manufacturers in the Territory) in accordance with the
instruction and coordination of the Marketing Company and the
Committee in order to achieve collectively, on an aggregated
basis, the following annual minimum tonnages of the Beverage
during the First Contractual Term hereof and each Contract Term:
--------------------------------------------------------------
Contract Term Minimum Minimum
------------- ------- -------
On a proportional sharing Guaranteed Guaranteed
-------------------------- ---------- ----------
basis in accordance with the Annual Royalty Annual Tonnage
---------------------------- -------------- --------------
actual tonnages assigned by Payment (MGAT)
---------------------------- ------- ------
the Marketing Company (MGARP)
--------------------- -------
--------------------------------------------------------------
Years 1 to and including 10 US $1,780,000 110,000
First Contractual Term
--------------------------------------------------------------
Years 11 to and including 20 US $1,920,000 120,000
--------------------------------------------------------------
--------------------------------------------------------------
Contract Term Minimum Minimum
------------- ------- -------
On a proportional sharing Guaranteed Guaranteed
-------------------------- ---------- ----------
basis in accordance with the Annual Royalty Annual Tonnage
---------------------------- -------------- --------------
actual tonnages assigned by Payment (MGAT)
---------------------------- ------- ------
the Marketing Company (MGARP)
--------------------- -------
--------------------------------------------------------------
Second Contractual Term
--------------------------------------------------------------
Years 21 to and including 30 US $2,060,000 130,000
Third Contractual Term
--------------------------------------------------------------
10.2 All royalties payable by Sub-Licensee hereunder shall be in U.S.
Dollars (less any sums collected by Sub-Licensee for and on behalf of any duly
constituted governmental authority on account of taxes imposed on royalties
generated by the activities contemplated by this Sub-License Agreement, provided
that said taxes are imposed similarly on all other licensors similarly situated)
and shall be payable quarterly, in arrears, within 30 days of the end of each
calendar quarter in respect to which the payment is being made. Sub-Licensee
shall pay collectively with other permitted manufacturers in the Territory, and
on a proportional sharing basis, the balance of the Minimum Guaranteed Annual
Royalty Payment in the fourth quarter of each calendar year in the event that
the total actual royalty payments in the preceding three quarters when added to
the fourth quarter of actual royalties paid to Sub-Licensor are less than the
total Minimum Guaranteed Annual Royalty Payment (The True-up Quarter). If
Sub-Licensee shall fail to pay any royalty deem to be shared by it when due and
payable hereunder, Sub-Licensor shall be entitled to (i) a late fee payable upon
demand equal to ten (10) percent of the amount due plus (ii) interest at the
rate of 3 % over the LIBOR rate for the previous six (6) months on all amounts
more than fifteen (15) days past due.
ARTICLE 11. REPORTING
----------------------
11.1 Sub-Licensee shall communicate its quarterly production figures of the
Beverage to Sub-Licensor irrespective of where the Beverage is manufactured, so
as to be received by Sub-Licensor no later than prior to the end of the month
following the quarter to which the figures pertain.
11.2 Sub-Licensee shall furnish whatever additional information
Sub-Licensor may reasonably request or prescribe from time to time to enable
Sub-Licensor to ascertain compliance by Sub-Licensee of all material provisions
of this Sub-License Agreement.
11.3 Sub-Licensee shall keep complete and accurate records with respect to
any and all Beverages produced, including any and all Beverages bottled, canned
or kegged, and any and all Beverages sold to the Marketing Company. Sub-Licensor
or License Holder shall have the right through its representatives to examine
and audit, at reasonable times and intervals during business hours upon
reasonable notice, all such records and such other records and accounts as
may under recognized international accounting practices containing information
bearing upon the amount of the royalty payable by Sub-Licensee, and to make
proper inspections or investigations in this respect. Sub-Licensee shall retain
such records for a period of four (4) years from the date the record was first
generated.
ARTICLE 12. TERM
12.1 Provided that Sub-Licensee together with other permitted manufacturers
in the Territory, (i) has collectively manufactured during the first nine (9)
years of the First Contractual Term 110,000 tonnes annually, and has paid
aggregately the minimum guaranteed annual royalties of US$1,780,00, (ii) has
paid all royalty payments when due, and (iii) as of the date that Sub-Licensee
provides written notice to Sub-Licensor of its intent to renew the Sub-License
Agreement, Sub-Licensee is not in breach of any of the provisions of this
Sub-License Agreement, this Sub-License Agreement and the licenses granted
hereunder shall be renewed for an additional term of ten (10) years (the "Second
Contractual Term"), unless Sub-Licensee shall have delivered to Sub-Licensor
written notice of intent to terminate not less than twelve (12) months prior
to the expiration of the First Contractual Term.
12.2 Provided that Sub-Licensee together with other permitted manufacturers
in the Territory, (i) has collectively manufactured during the first nine (9)
years of the Second Contractual Term 120,000 tonnes annually, and has paid
aggregately the minimum guaranteed annual royalties of US$1,920,000, (ii) has
paid all royalty payments when due and (iii) as of the date that Sub-Licensee
provides written notice to Sub-Licensor of its intent to renew the Sub-License
Agreement for another ten (10) year term, Sub-Licensee is not in breach of any
of the provisions of this Sub-License Agreement, this Sub-License Agreement and
the licenses granted hereunder shall be renewed for an additional term of ten
(10) years (the "Third Contractual Term") unless Sub-Licensee shall have
delivered to Sub-Licensor written notice of intent to terminate not less than
twelve (12) months prior to the expiration of the Second Contractual Term.
12.3 Sub-Licensee may exercise the rights granted to it under Sections 12.1
and 12.2 above if at the time of the exercise of the rights it has cured all of
the outstanding breaches, if any, under this Sub-License Agreement.
12.4 Notwithstanding the provisions as set forth in Sections 12.1 to 12.3
above, renewal of this Sub-License Agreement will rest with the fact that
Sub-Licensor is successful in renewing its Manufacturing License Agreement with
the License Holder with no material changes to any of the terms and conditions.
ARTICLE 13. TERMINATION
13.1 Sub-Licensor has the right to terminate or elect not to renew this
Sub-License Agreement, but shall not be obligated to terminate this Sub-License
Agreement or elect not to renew this Sub-License Agreement, if Sub-Licensee
together with other permitted manufacturers in the Territory fail to produce
collectively (and the Marketing Company fails to sell) the Minimum Guaranteed
Annual Tonnage (MGAT), as specified in Section 10.1 (1) above in any two (2)
consecutive years, commencing with Year 1 of the First Contractual Term. If
License Holder elects to terminate the Manufacturing License Agreement with
Sub-Licensor because of failure to produce and sell MGAT, then Sub-Licensor will
have no choice but to terminate this Sub-License Agreement because of the same
reason. Sub-Licensor, upon receipt of written notice from License Holder, shall
give the same written notice of termination to Sub-Licensee together with other
licensed manufacturers in the Territory, and Sub-Licensee shall pay the MGARP
prorated to the date of notice of termination.
13.2 If either party to this Sub-License Agreement shall fail to fulfill
one or more of its material obligations under this Sub-License Agreement,
including Sub-Licensee's failure to pay the royalties when due, the other party,
if not itself in default or on notice regarding breach of a material obligation,
in addition to and/or independently of any other remedies that it may have, may
at any time terminate this Sub-License Agreement, by not less than sixty (60)
days written notice ("Cure Notice") in any case specifying the breach, unless
within such sixty (60) day cure period all breaches specified in the notice
shall have been remedied. This Sub-License Agreement shall terminate upon the
expiration of the cure period if the party as to whom the Cure Notice was
addressed failed to cure the defaults specified in the Cure Notice.
13.3 In the event Sub-Licensee is adjudicated a bankrupt, or a receiver of
Sub-Licensee is appointed and qualifies, or Sub-Licensee is admitted to the
benefits of any other court procedure for the settlement of debts, Sub-Licensor
may (in addition to all other rights and remedies it may have) terminate this
Sub-License Agreement and all of its further obligations hereunder, by giving
ten (10) days advance notice in writing to Sub-Licensee or its representative.
13.4 In the event of the direct or indirect acquisition of more than fifty
percent (50%) of the voting rights in Sub-Licensee ("Voting Rights Acquisition")
by any person, company, partnership or entity unaffiliated with Sub-Licensee
without the prior written approval of Sub-Licensor, which approval shall not be
unreasonably withheld or delayed, Sub-Licensor shall have the right to terminate
this Sub-License Agreement by giving (60) days advance notice in writing to
Sub-Licensee. Sub-Licensee shall give written notice to Sub-Licensor of any such
proposed Voting Rights Acquisition, providing sufficient details so that
Sub-Licensor may satisfy itself that the rights of Sub-Licensor hereunder,
specifically that the payment of royalties by Sub-Licensee to Sub-Licensor
hereunder, will not be materially jeopardized as a consequence thereof. For the
purposes of this Section 13.4, it shall be reasonable for Sub-Licensor to
withhold its approval to such Voting Rights Acquisition if, and only if,
following its review of any such Voting Rights Acquisition, Sub-Licensor, acting
reasonably and in good faith, reaches a conclusion, as shown by documentation or
other evidence sufficient to establish or support such a conclusion, that the
payment of royalties by Sub-Licensee, following any such acquisition, will be
materially jeopardized and prevent it from meeting its obligations under this
Sub-License Agreement.
13.5 In the event Sub-Licensee shall collude with another to infringe any
Trademark, Trade Secret, or trade dress, licensed herein or shall knowingly
derive any benefit from another's infringement or dilution of any Trademark,
Trade Secret, or trade dress licensed herein or from another's act of unfair
competition with respect to the Beverage, Sub-Licensor, in addition to any other
legal remedies, shall have the option to terminate this Sub-License Agreement
upon thirty (30) days written notice.
13.6 Sub-Licensee's breach of any of the provisions of Article 6 of this
Sub-License Agreement shall constitute grounds for termination of the
Sub-License Agreement upon sixty (60) days written notice.
13.7 The early termination of this Sub-License Agreement pursuant to this
Article 13 shall not affect any accrued rights or obligations of the parties
hereto as of the effective date of such termination, including any accrued MGARP
owed by Sub-Licensee to Sub-Licensor hereunder, nor shall it affect any rights
or obligations of the parties under this Sub-License
Agreement which are intended by the parties and agreed herein by them to survive
any such termination, especially the secrecy provisions of Article 8 above.
13.8 In the event that License Holder terminates the Manufacturing License
Agreement with Sub-Licensor due to any legitimate or other reasons pursuant to
the clause of the said Agreement, Sub-Licensor shall have the same right to
terminate Sub-License Agreement with Sub-Licensee, although Sub-Licensor will do
its utmost to prevent such event from happening. In any case, Sub-Licensee shall
have no right of claim against Sub-Licensor for any possible losses caused by
such termination.
ARTICLE 14. SUB-LICENSOR UNDERTAKINGS
14.1 Sub-Licensor represents and warrants as follows:
(a) Sub-Licensor is the exclusive licensee of the Trademarks, the Trade
Secret, the Know- how, and all rights related to any of them in the Territory;
Sub-Licensor possesses protection of said registered Trademarks, Trade Secret,
Know how and said Trademarks, Trade Secret and Know-how are valid and
enforceable and in good standing, and Sub-Licensor has the sole right to use the
Trademarks, Trade Secret and Know-how in the Territory, subject to the licenses,
sub-licenses or other rights granted to others to use same in areas outside the
Territory;
(b) Sub-Licensor has the right, power and authority to enter into this
Sub-License Agreement and to grant to Sub-Licensee the licenses and rights
purported to be granted to Sub-Licensee hereunder and Sub-Licensee, except as
otherwise limited hereunder, shall be vested with all right and authority to
enjoy the unfettered use of the Trademarks, the Trade Secret and the Know-how.
Sub-Licensor shall take all necessary action to preserve and maintain its rights
in the Trademarks, the Trade Secret and the Know-how as granted by the License
Holder;
(c) The Trademarks have been registered by License Holder with the Chinese
Trade-marks Office. Sub-Licensor will refrain from any acts, conduct or
omissions which would jeopardize the maintenance of such registrations in full
force and effect during the term of this Sub-License Agreement or so long as
permitted by applicable law, whichever is shorter;
(d) Sub-Licensor has no present knowledge of any patent, copyright,
trademark, trade secret or license of other property right of any other person
or firm, which would be infringed by the grant of this sub-license.
Sub-Licensor has the representations and warranties given by License Holder
hereunder that the Trademarks or any ideas, designs or suggestions given to
Sub-Licensor and hereby sub-licensed to Sub-Licensee, will not infringe the
commercial or industrial property rights of third parties in the Territory; and
(e) Sub-Licensee shall promptly send written notice to Sub-Licensor of any
trademark infringements which come to its attention. Such notice shall specify
the facts available to Sub-Licensee of the alleged infringement or other unfair
competition and such other evidence as Sub-Licensee is able to supply.
14.2 Subject to Sub-Licensor's prior written notice, Sub-Licensee shall
have the right, in its discretion, to commence proceedings or undertake any
action to challenge, oppose and litigate all unauthorized uses or attempted uses
by others, or any uses which constitute passing off or infringement of the
Trademarks or the Trade Secret, the Know-how or any and all licenses granted
hereunder to Sub-Licensee, or to take such other steps or proceedings as may be
considered necessary by it in order to terminate any such unauthorized,
infringing or improper use of the Trademarks, the Trade Secret and/or the
Know-how by others. In the event that Sub-Licensee does commence proceedings or
undertake any action to challenge, oppose or litigate, as aforesaid,
Sub-Licensor, at no cost to Sub-Licensor, shall fully cooperate with
Sub-Licensee and execute any and all documents and do such acts and things as in
the reasonable opinion of Sub-Licensee may be necessary. Notwithstanding the
foregoing, at the request of Sub-Licensee, Sub-Licensor shall at Sub-Licensee's
expense diligently challenge, oppose or prosecute any person or firm who
unlawfully or improperly makes or attempts to make such unauthorized use of the
Trademarks, Trade Secret or Know-how, in the event Sub-Licensee's production of
the Beverage is materially impaired by that unauthorized use.
ARTICLE 15. CONFIDENTIALITY AND PUBLIC NOTICES
Except as may be required by applicable law (including, without limitation,
applicable securities laws and regulations and the rules and regulations of any
stock exchange or market on which either Sub-Licensor's or Sub-Licensee's
securities are listed directly or indirectly), the parties shall keep the
existence and contents of this Sub-License Agreement strictly confidential. All
public notices to third parties, including the press and employees of
Sub-Licensor and Sub-Licensee, and all other publicity concerning the
transactions contemplated by this Sub-License Agreement shall be jointly
planned, coordinated and agreed upon in advance by Sub-Licensor and
Sub-Licensee.
ARTICLE 16. MISCELLANEOUS
16.1 In the event that any provision, term, condition or object of this
Sub-License Agreement may be in conflict with any law, measure, ruling, court
judgment (by consent or otherwise), or regulation of the government of China or
of any political subdivision thereof, and the legal counsel of either party
shall advise that in their considered opinion such conflict, or a reasonable
possibility of such conflict exists, then either party may propose to the other
appropriate modifications of the allegedly offending provision, term, condition
or object to avoid such conflict. In such case, if an agreement or modification
is not reached within sixty (60) days, the offending provision, term, condition
or object shall be cancelled, but the remaining part of this Sub-License
Agreement shall be preserved to the fullest possible extent, if this can be done
without frustration of the purpose of this Sub-License Agreement, giving due
consideration to all lawful provisions, terms conditions and objects of this
Sub-License Agreement.
16.2 It is the intent of the parties that the preceding Section 16.1 and
any other part of this Sub-License Agreement shall be governed by the principle
of severability permitting invalidation of any provision, term, clause or
section for illegality without impairment of the lawful remainder of this
Sub-License Agreement which shall remain in full force and effect.
16.3 Nothing in this Sub-License Agreement shall be construed to permit or
entitle Sub-Licensee to use said Trademarks, any subsisting Trade Secret, any
confidential Know-how, any trade dress, any get-up or any notice referring to
Sub-Licensor or License Holder, beyond the termination of this Sub-License
Agreement or of the particular Trademark or Trade Secret license. Sub-Licensee
shall cease production of the Beverage promptly after such termination or notice
of termination.
16.4 The waiver by either party of any right or the failure by either party
to exercise any power hereunder shall not be deemed as a waiver of any other
right or power of such party hereunder whether of a similar nature or otherwise.
16.5 Sub-Licensor and Sub-Licensee have no intent to establish by this
Sub-License Agreement or otherwise any agency, partnership, joint-ventureship,
or other affiliation. Neither party shall make any representation or engage in
any conduct contrary to this fact.
16.6 This Sub-License Agreement sets forth the entire understanding of the
parties as to the subject matter of this Sub-License Agreement and merges all
prior discussions between them. Neither of the parties shall be bound by any
condition, definition, warranty or representation with respect to the subject
matter of this Sub-License Agreement, other than as expressly provided in this
Sub-License Agreement or as duly set forth subsequent to the date hereof in
a writing signed by a duly authorized representative of the party to be bound
thereby.
16.7 Each party shall on such terms as are compatible with the tenor and
provisions of this Sub-License Agreement be excused for temporary interruptions
in its performance due to strikes, or other labor difficulties, fire, explosion,
similar casualty, riots, civil disturbances, acts of terrorism, or an act of
God, or any other event or occurrence not enumerated herein which is beyond the
control of the party seeking to be excused, provided the excused party shall in
writing notify the other party immediately of the particular interruption and
its cause and shall immediately and continuously exercise best efforts to remedy
the interruption as promptly as possible.
16.8 Unless otherwise provided herein, all notices required hereunder to be
given by either party to the other shall be in writing and shall be given by
telecopier and regular mail, postage prepaid, or overnight delivery addressed to
the party upon which such notice is directed at the addresses set forth below,
or to such changed address as may be specified from time to time in writing by
either party. Notices sent via registered mail shall be deemed received ten (10)
business days after mailing and if via overnight delivery, shall be deemed
received on the second business day after mailing.
Sub-Licensor: INNO UP LIMITED
Attn: President and CEO
23/F, Hang Seng Causeway Bay Building
00 Xxx Xx Xxxxxx
Xxxxxxxx Xxx, Xxxx Xxxx
Telecopier No. 000- 0000 0000
Sub-Licensee: Zhaoqing Blue Ribbon Brewery High Worth Limited
Duanzhou Xx Xx
Zhaoqing, Guangdong 526020
People's Republic of China
16.9 Any provision to this Sub-License Agreement to the contrary
notwithstanding, it is expressly acknowledged and agreed by both Sub-Licensee
and Sub-Licensor that this Sub-License Agreement may not be assigned by
Sub-Licensee without the prior written consent of the Sub-Licensor, which
consent shall not be unreasonably withheld. Subject to the foregoing,
this Sub-License Agreement shall be binding upon the parties hereto and their
respective successors and assigns.
16.10 The parties hereto shall execute and deliver such further documents
and assurances and do such further acts and things as may be required to give
full effect to the provisions of this Sub-License Agreement.
16.11 This Sub-License Agreement sets forth the entire agreement between
the parties with respect to the subject matter hereof, and may not be modified
or amended except by written agreement executed by the parties hereto.
16.12 In any interpretation of this Sub-License Agreement, it shall be
deemed that the Sub-License Agreement has been made jointly by the parties, and
no ambiguities shall be construed or resolved against either party on the
premise or presumption that such party was responsible for drafting this
Sub-License Agreement.
16.13 The general representations and warranties made hereto by the parties
shall survive the execution date of this Sub-License Agreement, and the secrecy
provisions shall survive the termination or expiration of this Sub-License
Agreement.
16.14 Sub-Licensee acknowledges and agrees that an infringement or misuse
of the Trademark, Tradename, Know-how or trade dress in violation of this
Sub-License Agreement would cause irreparable harm to Sub-Licensee that could
not be adequately redressed by payment of monetary damages. Accordingly,
Sub-Licensee hereby agrees that, in the event of such violation, injunctive
relief may be obtained against it in order to accomplish certain affirmative
actions or cease and desist from certain actions.
16.15 All disputes arising in connection with this Sub-License Agreement
shall be finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by a single arbitrator. The place of
arbitration shall be Guangzhou, People's Republic of China. The English
language or a Chinese translation can be used for all proceedings and documents
presented during arbitration.
ARTICLE 17. APPLICABLE LAW
The making, interpretation, construction, performance and enforcement of
this Sub-License Agreement shall be governed by the substantive and procedural
internal law of the People's Republic of China.
ARTICLE 18. MATTERS RELATING TO RIGHTS OF FIRST DISCUSSION
18.1 Right of First Discussion-Expanded Territory. During the term of this
Sub-License Agreement and any extensions thereof, Sub-Licensor, if granted by
the License Holder to introduce the Beverage in the Expanded Territory, may
engage in a discussion with Sub-Licensee regarding manufacturing rights for
Beverage in Indonesia, Singapore, Malaysia, North Korea, Thailand, Cambodia,
Burma, Taiwan, Vietnam and the Philippines (the "Expanded Territory") but
Sub-Licensor will participate in such a discussion only if Sub-Licensee is not
otherwise in breach of this Sub-License Agreement and is current in the payment
of the MGARP at the time such discussions may occur, it being understood that
Sub-Licensor has no obligation to engage in such discussions nor to grant such
Expanded Territory to Sub-Licensee.
18.2 Right of First Discussion-Expanded Beverages. In the event that
Sub-Licensor is granted the distribution and manufacturing rights to the Olympia
label in the Territory, Sub-Licensor and Sub-Licensee may engage in such
discussions if Sub-Licensee is not otherwise in breach of this Sub-License
Agreement and is current in the payment of the MGARP at the time such
discussions may occur.
18.3 Right of First Discussion-Extended Term. If, not less than 12 months
prior to the expiration of the Third Contractual Term, Sub-Licensee provides
written notice to Sub-Licensor that Sub-Licensee is interested in extending the
term of this Sub-License Agreement and if Sub-Licensor is granted the same
extended term by License Holder, and Sub-Licensee is otherwise in compliance
with the terms of the Sub-License Agreement, then Sub-Licensor and Sub-Licensee
shall engage in discussions to extend this Sub-License Agreement beyond the
Third Contractual Term, it being understood that Sub-Licensor has no obligation
to grant an extension to Sub-Licensee beyond the Third Contractual Term.
ARTICLE 19. CONDITION TO EFFECTIVENESS
This Sub-License Agreement shall not become effective until the
Manufacturing License Agreement signed between Sub-Licensor and License Holder
becomes effective.
IN WITNESS WHEREOF the parties have executed this Sub-License Agreement.
FOR SUB-LICENSOR:
INNO UP LIMITED
By: ___________________________________
Xxxxxxx Xxxx XXXXX
Director
FOR SUB-LICENSEE:
ZHAOQING BLUE RIBBON BREWERY HIGH WORTH LIMITED
By: __________________________________
Xxxx-xxxxx XXX
Director
EXHIBIT A
---------
BLUE RIBBON BEER COMMITTEE (THE "COMMITTEE")
1. COMPOSITION
1.1 The Committee shall consist of the followings:
Position Appointed By
-------- ------------
Chairman Sub-Licensor - Inno Up Limited
Vice-Chairman Sub-Licensor - Inno Up Limited
Member Sub-Licensee - Blue Ribbon Beer Marketing Company Ltd
Member Sub-Licensee - Zhaoqing Blue Ribbon Brewery Limited
Member Sub-Licensee - Zhaoqing Blue Ribbon Brewery High Worth Limited
1.2 The composition of the Committee shall be adjusted in accordance with the
change in number of Sub-Licensees and as when necessary.
1.3 The Chairman's decision shall be final for any unresolved disputes.
1.4 A Secretary shall be appointed by the Chairman. Committee meetings shall be
held monthly or at any other interval deemed appropriate.
1.5 Proper minutes and records of meetings shall be kept by the Secretary.
2. FUNCTIONS
2.1 The Committee shall discuss and fix the ex-factory and market selling price
of the Beverage. All members shall adhere to the decision made by the
Committee for the purpose of protecting the interests of all parties.
2.2 The Committee shall also regulate the proportion of tonnage of the Beverage
to be produced by breweries of all Sub-Licensees in order to fulfill the
minimum guaranteed annual tonnage; and to coordinate the payment of the
annual royalty to the License Holder as well as the fulfillment of the
minimum guaranteed annual royalty payment.
2.3 The Committee is given the authorities to monitor and supervise all
Sub-Licensees to comply with the terms and conditions stipulated in any
Sub-License Agreements and to apply cautiously the Trade Secret and
Know-how governing the production of the Beverage.
2.4 The Committee will also discuss any other matters related to the business
of the Beverage for common interests.
2.5 Members shall pay to Sub-Licensor an initial joining fee of RMB2 million as
a sub-license administrative levy.
2.6 Members shall also contribute an annual fee of HK$500,000 to the Committee
for supporting the ongoing activities of the Committee, including the
annual meeting with
License Holder. The annual fee shall be managed by Sub-Licensor on behalf
of the Committee.
3. OTHERS
3.1 When the Minimum Guaranteed Annual Tonnage and Annual Royalty Payment are
not met, the Committee shall decide on the portion of the shortfall to be
borne by each of the Sub-Licensees
