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 disclosure by the Disclosing Party (other than the terms of this Agreement);
(b) is disclosed to the Receiving Party by a third party who had the right to
make such disclosure without any confidentiality restrictions; (c) is, or
through no fault of the Receiving Party has become, generally available to the
public; or (d) is independently developed by the Receiving Party without access
to, or use of, the Disclosing Party’s Confidential Information.

 

7.4.

Return of Confidential Information. The Receiving Party will return to the
Disclosing Party or destroy all Confidential Information of the Disclosing Party
in the Receiving Party’s possession or control promptly upon the written request
of the Disclosing Party or the expiration or termination of this Agreement,
whichever comes first. At the Disclosing Party’s request, the Receiving Party
will certify in writing that it has fully complied with its obligations under
this Article 7.

 

Article 8

Non Solicitation

 

During the Term of this Agreement and for the shorter of twenty four (24) months
or the maximum period permitted by laws following the termination or expiration
of this Agreement, neither Shanghai PCGS nor Guojin shall solicit, encourage or
take any other action which is intended to induce or encourage, or could
reasonably be expected to have the effect of inducing or encouraging, any
employee of the other party or any of its affiliates to terminate his or her
employment with his or her current employer.

 

Article 9

Termination

 

9.1.

In case of any of the following situations, Shanghai PCGS shall have the right
to terminate this Agreement at any time without incurring any liability to
compensate Guojin:

 

 

a)

Guojin materially breaches the obligations provided in Article 5, 6 or 7.

 

9.2.

In case of any of the following situations, Guojin shall have the right to
terminate this Agreement at any time without incurring any liability to
compensate Shanghai PCGS:

 

 

a)

Shanghai PCGS is in breach of Article 2.1, 2.2, 2.3 or 2.4;

 

 

b)

Shanghai PCGS materially breaches the obligations provided in Article 5, 6 or 7.

 

Article 10

Compliance of Law

 

Each party shall be fully and solely responsible for maintaining its legal and
regulatory compliance, including but not limited to proper payments of tax in
the relevant jurisdictions and refraining from bribing officials or business
associates or using deceptive, misleading, unethical practices.

 

Article 11

Assignment

 

The rights and obligations of either Party under this Agreement may not be
assigned or transferred without the prior written consent of the other parties.

 

 
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Article 12

Term and Extension

 

This Agreement shall have a Term of Five (5) years commencing on June 18th,
2016. Upon all parties’ written consent, the Term may be extended for another
Three (3) years. Parties shall begin negotiation of extending the Term within 60
days before the expiration.

 

 

 
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Article 13

Dispute Resolution

 

13.1.

The formation, termination, interpretation, performance of this Agreement and
disputes arising from this Agreement shall be governed by the PRC laws and
regulations.

 

13.2.

Disputes arising from this Agreement should be resolved by good faith
discussions for settlement among parties concerned.

 

13.3.

In case parties fail to reach amicable resolutions within 90 days of one party’s
written notification to other parties on existence of disputes and requesting
settlement discussion, any party may submit the disputes to the Beijing
Arbitration Commission in accordance with the rules applicable at the time. The
arbitration shall take place in Beijing. The arbitration shall be conducted in
Chinese with three arbitrators. Three arbitrators including one Presiding
Arbitrator shall be jointly selected by all parties to the arbitration
proceeding. The arbitration shall be final and binding. The losing party shall
be responsible for the costs of arbitration including the attorney fees, unless
the arbitration award stipulates otherwise.

 

13.4.

While the arbitration is pending, all parties shall continue to perform under
this Agreement except for the clauses which are the subject of the arbitration.

 

Article 14

Notices

 

14.1.

Any notice permitted or required under this Agreement shall be in writing and
shall be deemed given when delivered personally, by postal service or commercial
courier addressed as follows, or to such other address as shall be duly given by
notice meeting the requirements of this provision:

 

14.2.

Addresses of Parties

 

 

Shanghai PCGS:

Suite 7005B, 7006, No. 887 Huaihai Road (M.), Huangpu District, Shanghai, PRC

 

 

Guojin:

20/F, Tower B, Wanda Plaza, No. 58 Xinhua West Street, Tongzhou District,
Beijing, PRC

 

Article 15

Miscellaneous

 

15.1.

No Waiver.

 

No failure by Shanghai PCGS to enforce strictly any provision of this Agreement
shall constitute a waiver of its right to enforce any other provisions of this
Agreement or otherwise or to enforce the provision in question on any subsequent
occasion. The rights, remedies and benefits herein are cumulative and, except as
expressly set forth herein, are not exclusive of any rights, remedies or
benefits which the parties hereto may otherwise have.

 

15.2.

Headings.

 

Headings to Sections herein are inserted for the convenience of reference only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.

 

15.3.

Force Majeure.

 

No party will be responsible for any failure to perform or delay attributable in
whole or in material part to a Force Majeure Event. “Force Majeure Event” shall
be a situation that cannot be forecast, or avoided or overcome and such
situation impedes performance of obligations under this Agreement. If such
failure or delay continues in any material respect for more than 90 days, a
party, other than the party with such failure or delay, will have the right to
terminate this Agreement upon 30 days’ written notice.

 

 
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15.4.

Entire Agreement/Written Amendments.

 

This Agreement represents the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes any and all prior agreements
between Shanghai PCGS and Guojin relating to the service relationship. This
Agreement may be modified only by written instrument signed by both parties
hereto. No waiver of any right hereunder shall be effective unless it is given
in a written document or instrument signed by the party waiving such right.

 

15.5.

Severability.

 

If one or more of the provisions contained in this Agreement shall be invalid,
illegal or unenforceable in any respect in any jurisdiction, and such
invalidity, illegality or unenforceability shall not adversely affect the
respective interests of the parties hereto under this Agreement, then such
invalidity, illegality or unenforceability in such jurisdictions shall not, to
the fullest extent permitted by law, invalidate or render illegal or
unenforceable such provision in any other jurisdiction, nor shall it affect any
of the other terms and provisions of this Agreement.

 

15.6.

Definitions.

 

“Affiliate” means, with respect to any Person, any other Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by or
is under common control with, such Person. For purposes of this definition,
“control,” “controlled by” and “under common control with,” as applied to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that Person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Bank Channels” means bank branches (including their official online business
channels) that i) are licensed to operate as commercial banks in mainland China,
ii) sells collectible coins and medals to the general public; and iii) maintains
ongoing commercial relationship with Guojin from which custom designed and
packaged collectible silver or gold coins and medals are supplied.

 

15.7.

Language and Execution.

 

This Agreement shall be written in both Chinese and English languages and
executed in two original copies of equal force and validity. In case of
discrepancy, the Chinese version shall prevail. This Agreement shall become
effective upon signing by Parties’ authorized representatives and affixing
company chops below.

 

 
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 Signature Page:

 

Collectors Universe (Shanghai) Co., Ltd.

 

Company Seal:

 

Don Willis, President of PCGS. He signed as a Legal Representative of CU
(Shanghai) Ltd as the agreement is with the China subsidiary.

 

/s/    DON WILLIS                              

 Legal Representative

 

Date: June 18, 2016

 

 

 

For Guojin Gold: Liao Feiming. Chairman

 

Guojin Gold Co., Ltd. (国金黄金股份有限公司)

 

Company Seal:

 

/s/   LIAO FEIMING                           

Legal Representative

 

Date: June 18, 2016

 

 
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Schedule A

 

 

 

Company Registration Documents

 

 
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Schedule B

 

Minimum Submissions*

     

Period

Total number of coins placed in the holders      

2016 (6 months)

[***]        

2017 (12 months

[***]  

 

   

2018 (12 months)

[***]        

2019 (12 months)

[***]        

2020 (12 months)

[***]  

 

*Both parties acknowledge that the numbers listed above refer to the numbers of
coins that are graded and placed in the PCGS holders.

 

 
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Schedule C

 

1)

Shanghai PCGS undertakes that it shall strictly fulfill its obligations under
this Agreement with Guojin; and Shanghai PCGS shall ensure its staff to
carefully conduct grading services for Guojin except being prevented from so
doing due to Force Majeure.

 

2)

In products shipment and delivery, a full counting shall be effected by both
Parties, with receipts and statements saved for record.

 

3)

Time and quantity shall be notified one day in advance of taking delivery, with
logistics service ready for taking the delivery in all aspects;

 

4)

As to products to be replaced, greatest efforts shall be made to complete such
replacement on the same day; failing which, such replacement shall be made
within 3 days;

 

5)

For product delivery, the bill of lading shall be in Chinese;

 

6)

PCGS shall implement a set of strict and well developed operating procedures in
respect of and throughout the grading service and delivery, and designate
contact persons in charge of such services.

  

 
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Schedule D

 

A)

Warranty:

 

In the event of appearance of red spot in gold coins after they are sealed and
packed, Shanghai PCGS may provide a cleaning and holder changing service free of
charge. In the event of appearance of white spot in silver coins, Guojin shall
provide new coins while Shanghai PCGS shall provide the holder changing service
free of charge.

 

B)

Service and Support Requirements for coins in the holders or medals of 70 points

 

 

(1)

They should be of perfect production, with no loophole / curled selvedge at
their shaped edges, no dark dot, no bright spot, no scratch, no oxidation stain,
no white patch, no red patch, no dirty spot, no burr, no breakage, no shrinkage,
and no flow mark and welding wire trace, no scratch, no bubble, and gold coins
shall remain clean on surface and with no fingerprint, etc. In the event of any
of the aforesaid conditions after they are sealed and packed, Guojin shall
provide replacement coins and PCGS shall replace the same free of charge.

 

 

(2)

No product with apparent flaw shall be placed in a holder, no matter how many
grading points it has been given.

 

 

(3)

In the event of appearance of red spot in gold coins after they are sealed and
packed, PCGS may provide a cleaning and holder changing service free of charge.
In the event of appearance of white spot in silver coins, Guojin shall provide a
new coin while PCGS shall provide the holder changing service free of charge.

 

 

(4)

Shanghai PCGS needs to provide lead time for development of customized holders
or packaging.

 

 

(5)

The holders provided by PCGS are of quadruple anti-counterfeiting specifications
(for example: with ultrafine anti-counterfeiting security, QR code scanning and
identifying functions), as well as anti-counterfeiting technology not disclosed.
Guojin may choose to add further new anti-counterfeiting technology and to
create its own exclusive label.

 

 

(6)

Holders and Quality (a) Holders shall be heat sealed, with buckles correctly
positioned, no blackening or color changing or being dislocated; (b) At the back
of holders, color labels are edged neatly, with no breakage, no scratch, no
water stain or dirty spot, etc.; (c) Inside holders, marks of PCGS are clear and
legible, edged neatly and properly fixed and lined, with no skewed display; (d)
Coins shall be placed in holders in a neat and proper way, with no skewed
display. (e) No alien items are allowed inside the holders. The inside of the
holder shall be neat and clean.

 

 

(7)

Before launching each project, Guojin and Shanghai PCGS shall jointly determine
the components and specifications of the holder to be used as the standards and
references for acceptance of the delivery.

 

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