EXHIBIT 10.3
Xxxxxxxx Brands Distribution Agreement
Party A: Xxxxxxxx Citrus Sales of Florida
X.X. Xxx 0000
Xxxxxx, Xxxxxxx, XXX
Tel: 000-000-0000
Fax: 000-000-0000
Party B: Qinhuangdao Ruthersoft
000 Xxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxxxxxx
Qinhuangdao, Hebei Province, 066001, P.R. China
Tel: 00-00-00000000
Fax: 00-00-00000000
On May 16, 2000, Party A and Party B reached mutual agreement regarding
the terms and conditions for developing the Chinese citrus market for Xxxxxxxx
Brands Fresh Citrus Fruits (the "Products") and hereby confirm the contents of
their Agreement as follows:
I. Distribution and Sales Rights
1) Party A hereby confirms that Party B, on an independent contractor basis,
is the sole Exclusive Distributor for the Products in the designated sales
district of the People's Republic of China (the "Designated Sales
District"). This Designated Sales District is limited to the provinces of
Shanxi, Henan, Heilongjiang, Lianoning, Shaanxi, Hubei, Aihui, Sichuan,
Hunan and Hebei as well as the municipalities of Beijing and Shanghai.
2) Party B may, at its own costs, develop customers, build branch offices, and
establish sales locations to sell the Products within the Designated Sales
District.
3) Without Party A's written authorization, Party B shall not sell any other
brands of frozen concentrated orange juice, any other brands of fresh
cirtus fruits or any other citrus-related concentrated products.
4) Without Party's A written authorization, Party B shall not sell the
Products outside of the Designated Sales District.
II. Purchase of Golden Phoenix Brand Frozen Concentrated Orange Juice
1) Party A agrees to sell and Party B agrees to purchase such quantities of
the Products at such prices as may be mutually agreed upon by the Parties
using the Purchase Order Method.
2) Unless Party A agree, the size of each Purchase Order placed by Party B
shall be at least one 40-foot standard shipping container of the Products.
III. Payment Method and Time Limit
1) Except as provided in Section IX.(2)(a) below, Party A agrees that party B
shall make payment for the Products within a time limit of sixty (60) days
in the form of an irrevocable Letter of Credit or by confirmed bank wire
transfer.
2) Party A agrees to dispatch the ordered Products within fourteen (14) days
upon receipt of the Letter of Credit or confirmed bank wire transfer.
3) During the term of this Agreement, any other methods of payment must be
mutually discussed by Parties A and B and confirmed in writing.
IV. Product Specifications and Quality Control
1) All Product shipments from Party A must meet the product specifications set
out in Attachment A to this Agreement. Attachment A is defined as the
minimum fresh citrus fruit import requirements of the national government
of the People's Republic of China. Attachment A may be amended by the
Parties in writing from time to time.
2) Party B agrees that the product specifications set our in Attachment A meet
or exceed the relevant Chinese Governmental requirements governing imported
fresh citrus fruits as of the date of the Agreement. Party B undertakes to
promptly notify Party A in writing of any changes in the relevant Chines
Governmental requirements for the Products.
3) Party A shall provide documents, requirements and training relating to
Product storage, transportation and quality assurance so that Party B may
be in strict compliance and to guarantee Product quality.
V. Sales and Market Management
1) Party B shall use its best efforts to expand the sales of the Products
within the Designated Sales District.
2) On a regular basis, Party B shall provide inventory records, pricing, sales
and promotions situation reports to Party A.
3) Party B shall develop a complete record for Party A, of any Xxxxxxxx
Products retailers and secondary distributor customers in the Designated
Sales District.
4) On a regular basis, Party B shall provide promotion plans and marketing
expense plans to Party A for review.
5) Without additional cost, Party A shall be responsible for providing to
Party B training relating to the business of selling the Products.
6) Party B shall coordinate with party A in the area of market management.
7) Party A has the responsibility and obligation to provide to Party B, at no
additional cost, information about any customers and potential customers
for the Products developed by Party A within the Designated Sales District.
VI. Products, Packaging and Transportation
Citrus Fruits, Fresh by Thirty (3)) day refrigerated shipping container (via sea
freight).
A. Grapefruit" 34-50 Lb. in net weight in Export Standard Paper Carton
B. Oranges: 30-50 Lb. in net weight in Export Standard Paper Carton.
VII. Pricing terms and Promotion
1) Pricing will be based on CIF Qinhuangdao, China.
2) Part A shall provide to Party B for reference, at no additional cost, a
reasonable amount of samples and examples of appropriate advertising and
promotion items and related information currently used in the U.S. market.
3) Part y A will deduct 5% off the invoiced price (excluding insurance and
freight) i.e., 5% off the FOB Florida Value, of each order of the Products
placed by Party B as a special promotional credit to party B. This
deducts/credit is effective before Party B arranges for an irrevocable
Letter of Credit or wire transfer the necessary payment to Party A for each
order.
VIII. Customs Clearance
1) Part B is responsible for clearance of any goods through Chinese Customs
and the payment of any applicable taxes, fees or expenses associated with
any importation.
2) In the event that nay products have been rejected for entry into China by
Chinese Customs, Party B shall promptly notify Party A of the rejection as
the reasons for the rejection. This includes providing Party A with copies
of the relevant inspection certificates and/or government notices relating
to the rejection. Both Parties shall promptly develop a mutually acceptable
approach to handle the situation and to mitigate damages. However, if the
circumstances surrounding the rejection are caused by Party A for reasons
of shipping the Products in a manner that does not meet the Product
specification as set out in Attachment A, Party A shall be responsible for
it's own damages. Addition ally, bot Parties agree that Party A's liability
for any damages experienced by Party B shall be limited to the actual
purchase price paid by Party B (after discounts) for the rejected products.
IX. Sales Goal
1) Minimum Purchase Quantities: During the one year period from the date of
the Agreement to May 16, 2001, Party B agrees to order a minimum of Twelve
(12) 40-foot standard shipping containers of the Products supplied by Party
A in accordance with the Pricing and Promotion terms set out in Section VII
above and the Order Schedule set out in this Section IX (2) below;
2) Order Schedule:
(a) Notwithstanding the provisions of Section III.(1), Party B shall order
and pay by L//c at 60 days for the first Two (2) 40-foot standard
shipping containers of the Products within Thirty (30) days of the
execution of this Agreement; and
(b) Within ten (10) days after the first Two (2) containers of the
products have been cleared for entry to China by Chinese Customs,
Party B shall order another Two (2) 40-foot standard shipping
containers of the products. Part B shall have Sixty (60) days to make
payment for these two conatiners as set out in Section III. (1) above.
Items (1) and (2) of this Section together constituted the "Sales Goal".
Party B agrees that if it breaches any of its obligations under this
Section or any other section/subsection of this Agreement, Party A may at
it owns discretion, terminate Party B's status as the sole Exclusive
Distributor of the Products in the Designated Sales District under Section
I.(1) of the Agreement even though Party A may still do business with Party
B according to the other applicable terms of this Agreement.
X. Terms of Agreement
1) This Agreement is valid from the date of this Agreement to May 16, 2001
(the "Initial Period").
2) During the initial Period, Party A has the right to terminate this
Agreement, including but not limited to Party B's Exclusive Distributor
status in the Designated Sales District, after giving Party B thirty (30)
days notice in writing unless the Sales Goal has already been met.
3) If the Sales Goal has been met prior to any termination of the Agreement
Xxxxx both Parties have reached mutual agreement on a new sales goal for
the following year, this Agreement shall remain in full force until May 16,
2004. (the "Extension").
4) Both Parties agree that during the Extension period, either Party may, for
whatever, reason, unilaterally terminate this Agreement and the rights and
obligations of the Parties towards each other by paying the other Party the
amount of Fifty Thousand U.S. Dollars (US$50,000) as liquidates damages.
The terminating Party's obligation to pay the liquidated damages will be
triggered by its written notice of termination to the other Party. Both
Parties agree that it may difficult to calcualte the exact damages caused
by an early termination and the pre- determined amount of US$50,000 is an
adequate and reasonable compensation.
XI. Force Majeure
Both Parties agree that in the event that a force Majeure (any circumstance
reasonably beyond the control of the affected Party) prevents a Party from
performing all or part of its obligation as set out in this Agreement, that
Party shall be relived of all or part of its liability under this Agreement upon
written consent by the other Party.
XII. Dispute Resolution
1) Both Parties agree to resolve any dispute relating to this Agreement
through friendly discussions. In the event that a mutually satisfactory
resolution cannot be reached within thirty (30) days after a dispute has
arisen, both Parties agree that the dispute shall be resolved through final
and binding arbitration by the China International Economic and Trade
Arbitration Commission ("CIETAC"). The arbitration shall be conducted in
accordance with CIETAC to form the three-persons arbitration panel. The
arbitration shall be conducted in accordance with CIETAC's arbitration
rules in effect at the time of applying for arbitration.
2) Both Parties agree to choose a mutually agreed upon Hong Kong arbitrator as
the presiding arbitrator and each Party shall choose an arbitrator from
among the panel of Arbitrators of CIETAC to from the three-persons
arbitration panel. The arbitration shall be conducted in English.
XIII. Others
1) Any provision of this Agreement shall not be interpreted as partnership,
joint venture or agency relationship.
2) This Agreement, together with Attachment A, constitutes the entire
agreement between the Parties relating to the subject matter hereof and
supercedes all prior, written or oral negotiations, representations or
agreements.
3) Any changes to this Agreement shall be approved by mutual consent of both
Parties and confirmed in writing.
4) This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Parties hereof. Furthermore, each Party shall
not transfer or assign this Agreement without prior written consent of the
other Party.
5) Both Parties reaffirm that they will act in full compliance of all
applicable laws and regulations, including but not limited to the United
States Foreign Corrupt Practices Act.
6) Both Parties agree that the subject matter and the rights and obligations
set out in this Agreement relate to private commercial activities. Each
Party hereby irrevocably waives to the fullest extent possible and shall
not claim in any jurisdiction any immunity (including but not limited to
"Sovereign Immunity") from any action relating to this Agreement taken by
one Party against the Other Party.
7) This Agreement is written both in Chinese and English Languages and the two
versions shall have the equal effect.
Party A: Party B:
XXXXXXXX CITRUS SALES OF FLORIDA QINHUANGDAO RUTHERSOFT
Signature and Seal: Signature and Seal:
/s/ Xxxxxx Xxxxxxx for /s/ (illegible - Chinese Script)
Representative: Xxxxx X. Xxxxxxxx, Xx. Representative: Ling, Xiao
Date: 16 May 2000 Date: 16 May 2000
Witnessed by: Witnessed by:
