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Key Services Agreement

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 This Consulting Services Agreement involves

COLLECTORS UNIVERSE INC | Collectors Universe (Hong Kong) Limited | Collectors Universe (Shanghai) Co, Ltd | Collectors Universe, Inc | Guojin Gold Co, Ltd

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Title: KEY SERVICES AGREEMENT
Date: 8/30/2016
Industry: Business Services     Sector: Services

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Exhibit 10.55

 

KEY SERVICES AGREEMENT

 

THIS Key Service Agreement (“Agreement”) is entered by and between:

 

Collectors Universe (Shanghai) Co., Ltd. ( 上海品吉 伟仕商务服务有限公司 ) , a company duly incorporated and existing under the laws of the People’s Republic of China (“PRC” or “China”) with its registered address at Suite 7005B, 7006, No. 887 Huaihai Road (M.), Huangpu District, Shanghai, PRC (“Shanghai PCGS”);

 

And

 

Guojin Gold Co., Ltd. (国金黄金股份有限公司) , a company duly incorporated and existing under the laws of the PRC with its registered address at 20/F, Tower B, WanDa Plaza, No. 58 Xinhua West Street, Tongzhou District, Beijing, PRC (“Guojin”).

 

Shanghai PCGS and Guojin shall be referred to individually as “a Party”, and collectively as “both Parties”.

 

WHEREAS

 

1.

Shanghai PCGS, a wholly owned subsidiary of Collectors Universe (Hong Kong) Limited (“PCGS”) is ultimately owned by Collectors Universe, Inc. a Nasdaq listed company and the world leader in coin grading service;

 

2.

Guojin is a major Chinese enterprise with market leading capacities in precious metal research, design, manufacturing and sales;

 

Shanghai PCGS and Guojin intend to form the Key Service Relationship, and upon good faith negotiation, both Parties agree as follows:

 

Article 1     Definition of Key Service Relationship

 

1.1

Shanghai PCGS and Guojin shall form the Key Service Relationship subject to this Agreement.

 

1.2

The Key Service Relationship is based on good faith cooperation, close communication in designing and launching products tailored to the “Bank Channels”, volume submissions and preferred pricings.

 

1.3

The coin grading service under this Agreement shall be limited to grading of coins by Shanghai PCGS in mainland China.

 

1.4

Neither party shall represent the Key Service Relationship as a joint venture, and neither Party shall be an agent of the other Party.

 

Article 2.     Non-compete Covenant and Exclusivity

 

2.1

Guojin represents and warrants that Guojin, its affiliate or any director or officer of Guojin or its affiliate is not engaged in coin grading service at the time of signing this Agreement. For the avoidance of doubt, Guojin’s commercially engaging non-affiliate third party coin grading service providers is not deemed as breach of the restrictions in the preceding sentence.

 

2.2

Guojin further agrees not to engage in any form of coin grading business within mainland China that may be reasonably perceived to be in competition with Shanghai PCGS while this Agreement is in force and for the two years after the expiration or termination of this Agreement. For the avoidance of doubt, Guojin’s commercially engaging non-affiliate third party coin grading service providers is not deemed as breach of the restrictions in the preceding sentence.

 

 

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2.3

Shanghai PCGS represents and warrants that its sole shareholder Collectors Universe (Hong Kong) Limited is a wholly owned subsidiary of Collectors Universe, Inc., a California-based company listed on Nasdaq. (See Schedule A for copies of relevant company registration certificates.)

 

2.4

Shanghai PCGS acknowledges that Guojin distributes PCGS graded coins through Bank Channels in mainland China. Shanghai PCGS shall refrain from providing coin grading service to third parties which also use the same Bank Channels for wholesale distribution of custom designed and packaged coin products in direct competition with Guojin, provided that Guojin meets the Minimum Quantities of submission as detailed in Article 3 of this Agreement and Guojin is otherwise in good standing under this Agreement.

 

Article 3

Minimum Quantities and Preferred Pricings

 

3.1

Guojin shall be obligated to submit substantial amount of coins (hereinafter “Minimum Quantities” as detailed in Schedule B) on yearly basis in order to qualify for the Preferred Pricings at the rate of RMB [***] for each coin, medal or gold/silver bar graded and placed in the PCGS holder; RMB [***] for each coin, medal or gold/silver bar placed in the PCGS holder without grading service; RMB [***] for each coin, medal or gold/silver bar not placed in the PCGS holder after being subject to PCGS grading. For the avoidance of doubt, in order to qualify for being placed in the PCGS holder after being graded, the coin, medal or gold/silver bar must be MS65 or higher. Guojin acknowledges that from 2019 on, PCGS, with consultations from Guojin, shall be entitled to increase its pricings to account for inflation, RMB depreciation against USD and increased costs of business, provided that the increased price is only to offset the financial burden resulting from the said inflation, RMB depreciation against USD and increased costs of business. All pricings quoted above are VAT inclusive.

 

3.2.

In the event Guojin fails to submit the Minimum Quantities as required by Schedule B and is unable to cure the failure within 60 days of written notice from Shanghai PCGS, Shanghai PCGS shall have the right to terminate this Agreement with a 10-day written notice. Shanghai PCGS may in good faith choose not to exercise the aforementioned termination right, which shall not be deemed as waiver of the termination right.

 

Article 4

Product Development, Submission Protocol and Service

 

4.1.

Guojin commits to obtain Shanghai PCGS’ advice and consent in designing and launching customized coin packages. Further, Shanghai PCGS is given a 60-day lead time for product development from the date of signing off the new product design by both Parties.

 

4.2

For multi-coin holders, Guojin shall provide a 30-day written notice to Shanghai PCGS in the event actual orders vary from forecast by 20% or more.

 

4.3

Shanghai PCGS commits to that it shall have the grading service capacity in accordance with the following schedule:

 

 

2016 (effective upon execution of this Agreement):

[***] coins/month

 

 

2017: 

[***] coins/month

 

 

2018: 

[***] coins/month

 

 

2019:

[***] coins/month

 

 

2020:

[***] coins/month

  

 

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4.4

Shanghai PCGS and Guojin agrees to the submission protocol as detailed in Schedule C.

 

4.5

Shanghai PCGS commits to the service quality and post-sales support as detailed in Schedule D.

 

Article 5

Payment

 

5.1

PCGS will provide a detailed invoice for each shipment picked up by Guojin.

 

5.2

PCGS will provide a monthly invoice statement to Guojin at the end of each month. Payment will be due by the 20th of the month following the statement, except when both parties fail to reach consensus on the invoice statement. In case Guojin disagrees with the invoice statement, Guojin shall issue Shanghai PCGS a written notice of disagreement within 5 business days of receiving the invoice statement and provide specific grounds for disagreements, otherwise Guojin shall be deemed to have consented to the invoice statement. In case of disputing the invoice statement, parties shall resolve the dispute and settle the payment within 15 days of issuance of the notice of disagreement.

 

Article 6

Intellectual Property

 

6.1.

Each party reserves all rights to its intellectual property in trademarks, patents, copyrights and trade secrets not expressly granted in this Agreement.

 

6.2.

Shanghai PCGS and Guojin provide or disclose to each other and affiliates certain documents and devices (including but not limited to PCGS logo, service documents, solutions, business and other documents) for the purpose of achieving the objectives of brand promotion and business development, the intellectual property of such documents and devices shall remain to be owned by the party who provides the same, and such provision shall be licensed use with the license revocable at any time by the provider.

 

6.3.

Guojin commits to strictly adhere to the guidelines set by Shanghai PCGS in using the PCGS trademark(s); to refrain from improperly using the PCGS trademark(s); to refrain from misleading the public in understanding the PCGS trademark’s ownership by expression or actions; to not register any trademark or domain name similar to that of PCGS’.

 

6.4

In order to facilitate Guojin’s compliance with Bank Channels’ requirement on non-infringement of Intellectual Property Rights, PCGS shall provide Guojin copies of trade mark licensing agreements evidencing its lawful right to use PCGS trademark. PCGS may further grant Guojin and the concerned Bank Channels’ licenses to use the PCGS trademark and other PCGS logos relevant to promotion of PCGS graded coins and medals. Such licenses shall be revoked upon termination or expiration of this Agreement without the need of any written notices to the relevant licensees.

 

6.5

During the effective Term of this Agreement, Shanghai PCGS shall grant Guojin the exclusive right to use PCGS trademarks and relevant PCGS logos within Bank Channels for the purpose of commercial promotion and advertising. For the avoidance of doubt, during the term of this Agreement, Shanghai PCGS shall not grant licenses to any other third party to use PCGS trademarks or relevant PCGS logos within Bank Channels for the purpose of commercial promotion and advertising. Parties shall enter into a separate trademark licensing agreement within 30 days of executing this Agreement.

 

Article 7

Confidential Information

 

7.1.

Confidential Information ” means all of the trade secrets, product designs, business and financial information, methods, procedures, know-how and other confidential or proprietary information regarding the business of any party (including the terms of this Agreement).

  

 

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7.2.

The party receiving Confidential Information (“Receiving Party”) from another party (“Disclosing Party”) will use Confidential Information of the Disclosing Party only to fulfill its obligations under this Agreement, and will disclose the Confidential Information of the Disclosing Party only to the employees or contractors of the Receiving Party who have a need to know such Confidential Information for purposes of this Agreement and who are bound by the confidentiality restrictions contained in this Agreement. The Receiving Party will protect the Disclosing Party’s Confidential Information from use, access or disclosure in the same manner as the Receiving Party protects its own information of a similar nature and with no less than reasonable care.

 

7.3.

Exceptions . The Receiving Party’s obligations under this Article 6 will not apply to any information to the extent the Receiving Party can show that such information: (a) was already lawfully known to the Receiving Party at the time of


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