AGENCY AGREEMENT
FUNNOODLE INC.,
FUNNOODLE (H.K.) LIMITED
AND
TAI NAM INDUSTRIAL COMPANY LIMITED
This Agency Agreement dated 1st April, 2000 entered into between Tai Nam
Industrial Company Limited (hereinafter referred to as "the Agent") of Units
A&B, 3rd Floor, CDW Building, 388 Castle Peak Road, Tsuen Wan, N.T., Hong Kong
and Funnoodle Inc. and Funnoodle (H.K.) Limited (hereinafter collectively
referred to as "the Company") whose registered address is at 000 Xxxx Xxxxxxxx
Xxxx, Xxxxxxxxx, Xxx Xxxx 00000, X.X.X. and Units A&B, 3rd Floor, CDW Building,
388 Castle Peak Road, Tsuen Wan, N.T., Hong Kong, respectively.
Both parties agree to the following terms and conditions of the Agreement: -
WHEREAS, the Company and the Agent entered into this Agency Agreement pursuant
to which the Agent, among other things, agreed to (i) handle all of the
Company's purchase orders for its products within the Far East; (ii) handle all
of the Company's shipping documents; (iii) clear all of the Company's letters of
credit, bills and payments; (iv) serve as a liaison between the Company and its
manufacturers and vendors; and (v) ensure the quality of goods purchased for the
Company.
NOW, THEREFORE, in consideration of the following and other goods and valuable
consideration received to date, the Parties hereby agree as follows:
1. The Agent shall employ and maintain sufficient staff and purchasing
personnel who will devote an adequate portion of their time to the
purchase of the Company's products within the Territory and to the
performance of all the Agent's duties and obligations to be performed
hereunder. In this connection, the Agent shall appoint a dedicated Account
Executive to handle all matters for the Company, on a daily basis. The
"Territory" shall be limited to the Far East and such other territories
the Company requests that the Agent purchase the Company's products.
2. The Agent shall use commercially reasonable efforts to conduct its duties
pursuant to the terms of this Agreement. In furtherance thereof, the Agent
agrees to use its best efforts to obtain the best available pricing for
all purchase orders and insure that the products maintain the quality
control standards that are substantially equivalent to those standards
approved by the Company.
3. The Agent shall furnish the Company from time to time, as the Company may
reasonably request, with such statements, reports or other documents
pertaining to its activities hereunder.
4. The Agent shall provide manpower for the co-ordination work of the
business including the handling of purchase orders planned for merchandise
by the Company.
5. The Agent shall provide manpower for the handling of all shipping
documents.
6. The Agent shall provide manpower for the handling and clearance of letter
of credits, bills and payments, where applicable.
7. The Agent shall provide the manpower for the liaison work with
manufacturers and vendors.
8. The Agent shall control the quality of the goods by engaging Q.C. staff to
carry out quality control inspections in the production line and on the
finished goods to ensure quality is in accordance with the agreed
specifications and that the product is complying with the required
specifications. The Agent shall be reimbursed by the Company for all
reasonable travel expenses (as evidenced by paid receipts) incurred by
Agent on behalf of the Company for travel outside the Guangdong Province.
9. In consideration of the aforementioned agency service, the Agent shall
receive, for products purchased on behalf of the Company, a fee equal to
7% of the gross invoiced value of products purchased by the Company (the
"Agency Fee"). The
Agency Fee shall be computed on the basis of the following formula:
Factory purchase price of the merchandise x (1/0.93) = Price quote to the
Company with Agency fee inclusive
For all existing items manufactured by Kam Toy & Novelty Manufacturing
Limited, no agency fee will be charged by the Agent in the performance of
the order management role in these manufacturing entrustments unless the
Agent is able to source a better price on the existing item rendering a
reduction and savings from the existing price paid by the Company. As and
when a saving is realized, an agency fee, equal to the amount of the
savings but no more than 7% as computed on the basis of the aforementioned
paragraph, will be remunerated to the Agent. Any savings in excess of the
7% would be completely passed on to the Company such that the Company
would under no circumstances be paying a higher cost as a result of the
agency arrangement with the Agent.
10. The Company is to buy at FOB HK prices submitted by the vendors or
factories. Shipment processing charges will be responsible by the vendors
or factories for LCL handling including CFS charges (container freight
station charges in respect of inland & HK Transportation), and THC
(terminal handling charges) and document charges. Shipment consolidation
will be done in HK and is the responsibility of the vendors or factories.
11. In general, all other expenses on the development, testing, purchasing and
selling and all other expenses in the maintenance of matters in
association with this arrangement shall be responsible and paid for by the
Company.
12. The Company shall be responsible for the charges in making of molds on new
products and all related charges to complete the molds for manufacturing.
The molds shall be the assets of the Company. The Agent agrees to act in a
commercially reasonable and prudent manner in its handling and maintenance
of the molds (normal wear and tear excepted) so as to minimize any loss or
damage thereto. The Agent shall use best efforts to obtain appropriate
indemnifications from entities using the molds, so as to adequately
protect the Company from losses, damages, costs, expenses or liabilities
(including reasonable attorneys fees and costs) incurred by the Company
due to any act or omission, negligent or otherwise of the entity using a
mold (normal wear and tear excepted). Additionally, Agent shall use best
efforts to obtain on behalf of the Company from each entity, which uses a
Company mold, a Trust Receipt in substantially the form attached hereto as
Exhibit "A."
13. The Agency Fee to the Agent shall be due and payable when the invoice is
due as and when the goods are being shipped when shipment. Calculation
will be done on individual invoice basis and be included as part of the
cost of goods purchased by the Company.
14. The Company shall be responsible to ensure compliance with all legal and
statutory requirements imposed on the business being conducted.
15. No party shall have the right to assign this Agreement or any of its
rights and
privileges hereunder to any other person, firm or corporation without the
prior written consent of the other party, and any assignment without such
consent shall be null and void.
16. The Agent acknowledges and agrees that during the term of this Agreement
it will receive information developed by or on behalf of the Company
relating to the Company's products and the Company's business. The Agent
acknowledges and agrees that such information, together with all
information developed by or on behalf of the Company either separately or
in cooperation or consultation with the Agent hereunder, including without
limitation, customer lists and related materials, and all of the foregoing
shall be and remain the sole and exclusive property of the Company and is
to be protected as confidential information (all such information being
hereafter referred to collectively as the "Confidential Information");
except that Confidential Information shall not include information:
(a) which is known to the recipient prior to disclosure (except for
non-public information concerning existing Company products or
products under development by or for the Company) or is generally
available to the public;
(b) which was not acquired, directly or indirectly and/or in any manner,
from the disclosing party and which the recipient lawfully had in
its possession prior to the date of this Agreement;
(c) which, hereafter, through no act or omission on the part of the
recipient, becomes information generally available to the public;
(d) which corresponds in substance to information furnished to the
recipient on a non-confidential basis by any third party having a
legal right to do so ; or
(e) which is required in response to legal process, or to the extent a
party is advised that such action is required to comply with
foreign, federal or state laws or regulations.
The provisions of this Section shall not apply to any disclosure by Xxxxx
Ki Xxxx Xxx in his capacity as Chairman or as a member of the Board of
Directors of Toymax International, Inc. or any of its subsidiaries if such
disclosure is not in violation of his fiduciary duties to Toymax
International, Inc. or any of its subsidiaries. During the term of this
Agreement and for a period of two years thereafter, the Agent agrees to
keep confidential and disclose or permit to be disclosed to any third
party any such Confidential Information except to the extent previously
agreed in writing by the Company or as is required to be disclosed
pursuant to applicable law. The Agent acknowledges and agrees that the
Company would suffer great loss and irreparable damage if the Agent were
to disclose Confidential Information other than as contemplated herein,
and the Agent therefore acknowledges and agrees that the Company, in
addition to any right or remedy it may have at law or in equity hereunder,
shall be entitled to an injunction, without the posting of any bond or
other security, enjoining or restraining the Agent, its officers,
employees or representatives from any violation or threatened violation of
this.
17. The Agent agrees not to sell, assign or transfer any products or property
of the Company without the prior written consent of the Company.
18. This Agreement is to be construed in accordance with the laws of the Hong
Kong
Special Administrative Region without giving effect to conflict of laws
principles.
19. Neither this Agreement nor any provision thereof may be modified, waived,
discharged or terminated orally, but only by a writing signed by the party
to be charged. A waiver of any provision by any party to this Agreement
shall be valid only in the instance for which given and shall not be
deemed continuing, and any such waiver shall not be construed as a waiver
of any other provision of this Agreement.
20. Each party to this Agreement represents, agrees and warrants that it will
perform all other acts and execute and deliver all other documents that
may be necessary or appropriate to carry out the intent and purposes of
this Agreement.
21. This Agreement shall be valid for a period to 31st March 2002 from the
date herein above referred. This Agreement shall automatically extend
until termination. Each party shall have the right to terminate this
Agreement by giving the other party three months' written notice in
advance.
22. Nothing contained in this Agreement shall be construed as requiring the
commission of any act contrary to the law. Whenever there is any conflict
between any provision of this Agreement and any present or future statute,
ordinance or regulation contrary to which the parties have no legal right
to contract, the latter shall prevail, but in such event the provision of
this Agreement thus affected shall be curtailed and limited only to the
extent necessary to bring it within the requirements of the law. In the
event that any part, article, paragraph, sentence or clause of this
Agreement shall be held to be indefinite, invalid or otherwise
unenforceable, the entire Agreement shall not fail on account thereof and
the balance of the Agreement shall continue in full force and effect. If
any arbitration tribunal or court of competent jurisdiction deems any
provision thereof (other than for the payment of money) unreasonable
modification thereof and this Agreement shall be valid and enforceable and
the parties hereto agree to be bound by and perform the same as thus
modified.
23. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the
date and year first above written.
ABOVE AGREED TO AND ACCEPTED:
FUNNOODLE INC.
By:
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Name:
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Title:
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Date:
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FUNNOODLE (H.K.) LIMITED
By:
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Name:
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Title:
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Date:
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TAI NAM INDUSTRIAL COMPANY LIMITED
By:
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Name:
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Title:
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Date:
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EXHIBIT A
FORM OF TRUST RECEIPT
