Processing Contract
Exhibit
10.26
The
English Translation is for reference only.
Processing
Contract
Contract
No.: QDCC-SDTD2008
Party
A:
Qingdao Coca-cola Beverages Co., Ltd.
Address:
Xx. 000, Xxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx
Tel:
(000) 00000000
Fax:
(000) 00000000
Party
B:
Shandong Taoda Olympic Forward Drink Co., Ltd.
Address:
Zhudi, Shangye Town, Fei County, Linyi, Shandong
Tel:
(000) 0000000
Fax:
(000) 0000000
Party
A
and Party B have entered into this contract with the agreement of details
as
follows in regard of processing “Binglu” Purified Water (hereinafter the
“Products”).
1.
|
Names
and specifications for the Products
|
1.1
|
The
Products to be manufactured and corresponding packing specifications
designated by Party are as follows, which are in compliance with
the most
updated technology and quality requirements published by Coca-cola
(China)
Beverages Co., Ltd.
|
Products
|
Packing
Specifications
|
350ML
PET Bottle
Binglu
Purified Water
|
24
bottles/box, packing with PEC shrink films,
56
boxes per board (8*7), wrapping and
packing
by films
|
600ML
PET Bottle
Binglu
Purified Water
|
24
bottles/box, packing with PEC shrink films,
48
boxes per board (8*6), wrapping and
packing
by films
|
1.5L
PET Bottle
Binglu
Purified Water
|
12
bottles/box, packing with PEC shrink films,
32
boxes per board (8*4), wrapping and
packing
by films
|
1.2
|
Processing
site, equipment, craftwork procedure, packing materials and manufacturing
control shall be in compliance with legal requirements proposed by
local
competent authorities (including but not limited with Quality and
Technical Supervision Bureau and Sanitation and Disease Prevention
Authorities) and recognized by Coca-cola (China) Beverages Co., Ltd.
The
quality of the Products shall be in compliance with the most updated
standards published by Coca-cola (China) Beverages Co., Ltd., including
certain new standard guidance published by Coca-cola and/or Coca-cola
(China) Beverages Co., Ltd., from time to time. Party B hereby expressly
knows the most updated product quality standards published by Coca-cola
(China) Beverages Co., Ltd.
|
1.3
|
Quantity
- Party A and Party B will negotiate and specify the processing quantity,
the specific quantity shall be decided in the purchase order provided
by
Party A.
|
1.4
|
Party
B shall obtain effective Sanitary Certificate issued by local Sanitation
and Disease Prevention Authorities, Food Production Certificate (QS)
for
bottle water issued by local Quality and Technology Supervision Bureau
and
Food Sanitary Creditworthiness A Certificate, abide by legal requirements
and pass the recognition review for processing factory by Coca-cola
(China) Beverages Co., Ltd. Party B shall provide the photocopies
of
aforementioned certificates with the company chop to Party
A.
|
2.
|
Product
Price and Best Terms
|
2.1
|
The
processing price for such products:
|
Products
|
Price
(factory price)
|
350ML
PET Bottle
Binglu
Purified Water
|
(Omitted
and Filed Separately with the SEC)
|
600ML
PET Bottle
Binglu
Purified Water
|
(Omitted
and Filed Separately with the SEC)
|
1.5L
PET Bottle
Binglu
Purified Water
|
(Omitted
and Filed Separately with the
SEC)
|
The price stipulated herein includes
but
not limited with the fees and expenses of water, power, steam, employee
salaries, equipment depreciation, raw materials and ancillary materials,
packing materials, upload and download, storage and various government
tax
payment and other expenses incurred from the
processing.
|
2.2
|
The
price aforementioned is valid within one year and the following price
shall be negotiated by the parties.
|
2.3
|
Based
on the principle that Party B entitles Party A as the client with
the best
term, Party B hereby confirms that the conditions and price stipulated
herein are the best and promises that it will treat Party A with
the same
or better conditions under the same principle should Party B or its
affiliated parties provide other clients with better conditions or
price
within the valid term hereof.
|
2
3.
|
Offer
and Confirmation of the Purchase
Order
|
3.1
|
Party
B shall manufacture and deliver such Products in complete compliance
with
the Purchase Order or written mail issued by Party
A.
|
3.2
|
Party
B shall execute the Purchase Order or written mail issued by Party
A
within 48 hours as of the receipt for confirmation and return such
notice
to Party A.
|
3.3
|
Should
Party A fail to receive the response that Party B is unable to
manufacture
and deliver such Products as per Party A’s requirements within 48 hours,
the Purchase Order shall be deemed as
valid.
|
4.
|
Supply
of the Materials and the Product Quality
Standards
|
4.1
|
Party
B will manufacture PET bottles by using the materials and data
designated
by Party A. Party B shall also review and inspect PET bottles as
per
Coca-cola (China) Beverages Co., Ltd. during the process of
manufacturing.
|
4.2
|
Party
B shall provide the packing materials (PET slice, bottles, labels,
shrink
films and bottle caps etc.) for the Products, which shall be recognized
by
Coca-cola (China) Beverages Co., Ltd. Party B will inspect and
accept the
packing materials when such materials income the factory and Party
A will
provide Party B with the inspection method for relevant packing
materials
which is attached as Exhibit I Incoming Inspection Standards for
Packing
Materials: A. Bottle Germ; B. PET Bottles; C. Bottle Caps; D. Labels;
E.
Shrink Films and F. Sampling Tables. Party B shall conduct the
inspection
in complete compliance with the standards and keep the relevant
inspection
records for at least three years to make sure the packing materials
used
for manufacturing in accordance with the quality requirements.
Should
there be any quality flaw Party B shall promptly notify Party A
to deal
with such issue. Party B takes full legal liabilities for the sanitary
and
safe storage of the packing materials and Party A is entitled with
the
supervision of such storage and usage by Party
B.
|
4.3
|
Party
B shall manufacture the product and conduct quality control according
to
the most recently released standard (see the attached Exhibit II
Bottle
Drinking Pure Water Quality Control Standard Handbook re detail
of the
standard) by Coca-Cola (China) Beverages Co. Ltd., and Party A
will
conduct supervision from time to time. Besides, at the request
of the
Coca-Cola Company, Party B shall provide crude water, filtered
water, RO
water, bottle water to Coca-Cola (China) Beverages Co. Ltd. for
bromate
test, bromide test or THM test. Party B shall submit the product
sample
for inspection and test at the request of local quality and technology
supervision authority or at least two times annually, with all
the cost
incurred born by Party B. The duplicates of test reports should
be sent to
quality control department of Party A for filing. Party A specially
request that the concentration of ozone in the product shall be
0.4mg-1.0mg/1 three minutes after the water is bottled, and where
there is
a increase trend of the amount of water microorganism of water
treatment
carbon filter, the original activated carbon must be replaced with
new one
or be disinfected with steam. Party B must bear all the expenses
incurred
relating to complains on the quality of the sold Products processed
by
Party B (including but not limited to the compensation claim raised
by
Party A’s customers against Party
A).
|
3
4.4
|
Where
Party B inspect and accept the materials, Party B shall check whether
the
package is sealed or there is any contamination or breakage; whether
the
anti-stolen function normally works, whether packaging xxxx, amount
of the
products is in line with the xxxx of lading; whether import reports
are
complete; whether the described items, including shipping document,
stated
amount unit, analysis certifying documents, are in line with in-kind
products. In case of discovering any abnormal items, Party B shall
notify
manager of quality control department of Party A and preserve the
on-site
evidence for further negotiation by Party A and Party
B.
|
4.5
|
Party
B shall ensure the products is preserved in a dust-proof,
rabbit-protected, insect-protected, moist-proof, and sunscreen
place.
Consignment of the products shall be strictly in line with the
principle
of “products firstly put into the warehouse should be firstly consigned”
and “products with the guarantee period firstly expired should be firstly
consigned”. Damages to Party A incurred due to Party B’s failure to breach
the principle should be born by Party
B.
|
4.6
|
The
packaging materials carrying the product brand can only be used
on Party
A’s product. The remaining packaging materials that are not used
on the
products shall be preserved in good order and shall not used without
Party
A’s permission, otherwise Party B shall be responsible for relevant
economic losses and other legal
liabilities.
|
4.7
|
Without
Party A’s prior written consent, Party B shall not disclose any
information related to the products processing and quality control
to any
third party, including but not limited to the public, government
authority, or any person, organization or unit outside Party B’s
business.
|
4.8
|
4.8
Party B must use the packaging materials approved by Party A, including
lids, labels, and boxes, and may not use the materials or permit
the use
of the materials for any purpose not approved by Party A. Where
Party B
orders for label from label producing company, Party B shall copy
the
order for label to Party A. The label can be manufactured only
in the
label producing companies recognized by Coca-Cola (China) Beverages
Co.
Ltd.
|
4.9
|
Party
B shall preserve accurate record of stock of the products, materials,
and
packaging materials, and provide an stock report regarding the
finished
products, materials, and packaging materials every week. Party
A is
entitled to check the stock of finished products, materials, and
packaging
materials and the corresponding report at any working
time.
|
4
4.10
|
The
products with the same manufacturing date are deemed as one batch,
Water
Product Supervision and Control Record of which shall be send in
48 hours
after the production by Party B to quality control department of
Party A.
COA report for this batch should be faxed to quality control department
of
Party A after all the test results for this batch are finished. Quality
control department of Party A makes a random inspection of the products
provided by Party B every month, and certifies COA provided by Party
B to
make sure the accuracy of Party B’s test data. Party B must stop the
consignment of the products and notify quality control department
of Party
A when Party B finds any item not in conformity with the standard
during
the microorganism tests and taste tests, and disposes the products
according to the opinion by quality control department of Party A.
Party B
shall email to purchase department, quality department, and logistics
department of Party A the batch number, amount, and destination of
the
products to be delivered three days before the delivery according
to Party
A’s order.
|
5.
|
Trade/Intellectual
Property
|
5.1
|
The
trade xxxx, enterprise trade name, product design are all owned by
Party A
and Coca-Cola (China) Beverages Co. Ltd.. Under no circumstances,
Party
may act or assist others to engage in any act violating Party A’s above
mentioned interests. Otherwise, Party B shall be held for the compensation
liability for tort or joint compensation liability, and Party A can
determine to cease the agreement in advance depending on the
situation.
|
5.2
|
The
agreement does not authorize Party B to sell the Products. Party
B shall
process the Products according to amount Party A designated, and
Party A
is entitled to check and certify Party B’s production statement. Without
Party A’s written consent, Party B’s sales of Products(combined products
and half-products), such items specialized for the Products as bottles,
label, lids, PE film, and packaging materials carrying Party A’s trade
name or brand. Party B shall be held for compensation liability or
other
legal liability for Party A’s above acts, and Party A can determine to
cease the agreement in advance depending on the
situation.
|
5.3
|
Party
B shall preserve the Products and materials carrying Party A’s brand and
trade name in good order. The items failing to meet the standard
(including Products, finished Products of raw materials, half-products)
found during the manufacturing and inspection should be destroyed
to
prevent any damage to Party B’s business credit when these items entering
the market. If these items enter the market and damage the interests
of
Party A’s intellectual property due to Party B’s failure to perform its
obligations of safeguarding, Party B shall be held for joint compensation
liability or other legal liability, and Party A can determine to
cease the
agreement in advance depending on the
situation.
|
5
5.4
|
Party
B shall make a statistical report on the order amount, warehouse-in
amount, deterioration amount, deterioration rate, destroying method,
the
person supervising the destroying, and destroying date every quarter.
The
report shall be emailed to quality control department of Party A
in five
days following the end of each quarter, and the combined annual reports
based on each quarter reports shall be emailed to quality control
department of Party A.
|
6.
|
Others
Agreed by the Parties
|
6.1
|
Party
A can dispatch staff to Party B if necessary to supervise the quality
of
the Products and manufacturing situation of Party B. Party B shall
provide
the board and lodging for these dispatching staff with cost born
by Party
A. Party A shall pay the salaries for the dispatched staff and pay
the
bills for phone calls and fax
expenses.
|
6.2
|
Party
B must have the warehouse qualified for the preservation of the crude
materials, packaging materials for the Products, and the finished
Products. The warehouse should have the capacity of 15 days turnover
for
crude materials and packaging materials, and 10 days turnover for
finished
Products.
|
6.3
|
In
case any market change that affecting Party B’s demand for the Products,
Party B is entitled to cease the agreement by written notice 30 days
in
advance.
|
6.4
|
In
case of ceasing the agreement in advance, Party A and Party B shall
dispose the Products as the following:
|
- Party A purchases the Products manufactured by Party B under the Article 3 of the agreement at a price agreed by the parties; |
- Party A purchase the materials
ordered
by the Party B for Party A (including but not limited specialized
bottles,
lids, labels, and shrinking film) and agreed by the Party A, at a
price
agreed by the parties;
|
- All the materials purchased
by Party B
with Party A’s consent and carrying Party A’s brand shall be disposed at
Party A’s request with the cost born by Party B. Party B shall compensate
the losses born by Party A due to Party B’s improper disposal of the above
materials.
|
6.5
|
Except
the Article 4.2, under any circumstance, Party B shall not, with
any
cause, keep such Products and any raw material and package material
branched Party A’s trademark and
logo.
|
6.6
|
Party
B shall give the preference to ensure the normal production of Party
A.
|
6.7
|
If
Party A requires Party B to process other pure water products in
the
future, the processing expenses will be negotiated and determined
by Party
A and Party B, and such agreement will be attached to this contract
with
the same legal effectiveness.
|
6
6.8
|
Upon
the date of execution of this contract, both parties hereby confirm
that
Party B, currently, exclusively processes bottle pure water and
mineral
water for Coca-cola packaging factories in China (“Cola Packaging
Factories”). If Party B processes the products set forth above for other
packaging factories besides Cola Packaging Factories in the future,
Party
B shall notify Party A in writing
promptly.
|
6.9
|
For
any complaint arising out of the bottle water’s quality manufactured by
Party B, Party B shall compensate Party A all the cost incurred
by quality
complaints settlement, and Party B consents that Party B will pay
Party A
¥2000.00
as
penalty for each quality complaint which is attribute to Party
B.
|
7.
|
Delivery
Methods and Place
|
The delivery place of such Products shall be designated by Party A, and shall be determined subject to Party A’s email and the written notice. |
8.
|
Settlement
Methods
|
Party
B shall attach the inspection report to each batch of Products,
and issue
the VAT invoice according to the quantity of actual storage
agreed by both
parties and inspected and accepted by Party A at the end of
the month.
Party A will pay all the amount of such Products to Party B
within thirty
(30) working days upon the receipt of the
invoice.
|
9.
|
Term
of the Processing Contract
|
The
effective term of the contract is from March 1st, 2008 to February
28th,
2010. When the contract expires, the contract will be extended
for
additional one year period through the negotiation between
Party A and
Party B.
|
10.
|
Breach
Responsibility
|
10.1
|
If
Party B fails to deliver the products in accurate quality and
quantity
according to the manufacture schedule which is not attribute
to force
majeure, Party B shall take breach responsibility of delay
in delivery and
compensate the economic losses to Party A. If Party B fails
to deliver the
products over seven (7) days, Party A has the right to require
Party B’s
affiliate company (but it shall be the processing factory of
Coca-cola
(China) Beverages Co., Ltd.) to supply the products with same
price to
Party A; or Party A is entitled to purchase the products from
other
processing factories which are recognized by Coca-cola (China)
Beverages
Co., Ltd., and Party B shall pay the incurred additional amount
for Party
A. If Party A can not acquire the replacement products immediately
due to
Party B’s nonperformance, Party B shall compensate all the losses to
Party
A, including but not limited to, extra losses and benefit losses
incurred
by the supply interruption. If Party B fails to deliver the
products over
fifteen (15) days, Party A is entitled to terminate this contract,
and
Party B shall compensate the actual losses arising out of this
contact’s
termination to Party A.
|
7
10.2
|
If
the products delivered by Party B are inconsistent with any
specification
required by Coca-cola (China) Beverages Co., Ltd. or any condition
specified in Party A’s inspection standards through sampling acceptance or
sampling acceptance in market (including sampling by governmental
department or Coca-cola (China) Beverages Co., Ltd.), through
both
parties’ confirmation, Party B will recall such inconsistent products
which are attributed to Party B immediately and destroy such
products
under Party A’s supervision and bear the incurred
losses.
|
11.
|
Dispute
Settlement
|
The
disputes of this contact will be settled by both parties’ consultation. If
there is no agreement is reached through the consultation,
the dispute
will be filed to the People’s Count where the Party A’s
located.
|
12.
|
General
Provisions
|
12.1
|
The
exhibits hereto are the part of this contact and have the same
legal
effectiveness.
|
12.2
|
Party
B shall complete the following tables (as the exhibits hereto)
according
to Party A’s requirements: Clean and Sterilization Records, Net Content
of
PET Bottle Products Testing Records, Water System Testing Records,
Microorganism on Production Line Testing Records, Daily Report
of Finished
Stock and Daily Report of Raw Material and Package
Material.
|
12.3
|
Any
issue not covered in this contract will be concluded a supplementary
agreement between both parties. This contract is made in two
original set
with Party A and Party B each having one original set, and
each set has
the same legal effectiveness.
|
This
contract will become effective upon the date it is executed by each party’s
authorized representative.
Party
A: Qingdao Coca-cola Beverages Co., Ltd.
|
Party
B: Shandong Olympic Forward Drink Co., Ltd
|
Authorized
representative:
|
Authorized
representative:
|
Chop:
|
Chop:
|
Date:
|
Date:
|
8