EXHIBIT 10.1

 

Cooperation Agreement between MERION INC and

HONG KONG ENCAID LIMITED

 

Party A: Merion, Inc.

Address: 100N. Barranca St.#1000. West Covina,CA91791.USA.

Tel: 626-331-7570 & 626-332-1557

Fax: 626-332-2081

E-mail: info@merionus.com

www.dailynu.com

 

Part B: HONG KONG ENCAID LIMITED

Address (English): Room 1508, 15/F., Office Tower Two, Grand Plaza, 625 Nathan
Road,

Kowloon, Hong Kong.

Tel: 00852-3076 6658 & 131-7508-0111

Fax: 00852-3062 6606

E-mail:

 

In order to rapidly expand the market share of Merion Inc’s products in China
and Asia, Party A agrees to authorize HONG KONG ENCAID LIMITED (Party B) to
promote and sell products of Party A in China and Asia. The key points of
cooperation are as follows:

 

I. Party A: Merion Inc.

 

1.As the manufacturer and distributor of Merion brand products, Party A shall
set up a "Merion Inc Beijing representative office" in Beijing, China to assist
Party B in selling Party A's products in China and Asia.The representative
office is located on the 7th floor of foreign trade building, no. 12 Jianguomen
Street, Beijing, China.

 

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2.Authorizes Party B to promote and sell Merion’s Products in China and Asia.

 

 

3.Party A shall be responsible for the costs of preparation and opening of
Beijing office and early stage product promotion, including the internet
promotion of early stage market development for the products, sales channel,
customer consultation and reception, representative office and product show room
decoration, and office equipment expenses. Party B shall raise RMB 3 million by
itself to be used for the promotion of Party A’s product. Party A agrees to
provide RMB 1 million equivalent products to support Party B. Party A may deduct
such promotion support fee from promotion service fee payable to Party B after
Party B starts to get the market in operation. When the overall sales amount in
Asia market reaches RMB 50 million, Party A agrees the RMB 1 million receivable
of early stage supporting amount can be granted to Party B as a compensation for
its marketing cost. Party A may also pay RMB 1 million to Party B when Party B’s
promotion of Party A’s products generate the actual sales of RMB 10 million.

 

 

4.Party A shall be responsible for providing company brochures, products
information, photos of factory production, office building, product R&D team,
scientific research laboratory and new products preview, etc., as well as
advertising materials and promotional videos of Merion’s products on China CCTV.

 

 

5.If Party B makes any marketing and products promotion requests, Party A shall
consider Party B’s request and may update the product information on the
company's website (including pictures, texts, quotations, advertisements, etc.)
based upon its own discretion.

 

 

6.Party A agrees that the price of products sold in China shall be proposed by
Party B based upon Asian market product sale index according to the actual
situation in the Asian market. The pricing policy for products sold in the Asian
market shall be implemented after full consultation with Party A based on the
reality for the market cultivation and expansion purpose.

 

 

7.Party A will consider allocating a total of 20 million equity shares to Party
B based on its assessment of its performance. The exercise price of the warrant
shares is US$1 per share. The specific circumstances of the warrant share and
the percentage of the promotional service fee are determined by the parties
through a separate agreement. Both parties agree that when Party B's sales of
Party A's products reach US$5 million, the warrant shares will be exercisable
and the term of warrants will be three years. The parties will sign a separate
agreement on the number and grant of warrants. If Party B's product promotion
activities result in Party A's actual sales amount of US$5 million in the
previous year (calendar year), Party A agrees to pay Party B a fixed product
promotion and service fee of US$1 million in cash or Party A's form. A common
stock within 7 working days of the first month of the following year (calendar
year). Party A has the right to determine whether US$1 million is paid in cash
or in the form of Party A's common stock. If Party A decides to pay with its
common shares, the price per share should be US$1. If Party B's product
promotion activities result in Party A's product sales reaching US$5 million in
advance in the middle of any calendar year, Party A will consider paying US$1
million in promotion and service fees this year in cash or equivalent within
seven working days. The date to achieve US$5 million in sales.

 

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II. Part B: HONG KONG ENCAID LIMITED

 

1.Party B shall be responsible for the promotion of Party A's products in the
Asian market, and cooperate with Merion to develop the Asian market.

 

 

2.Party B shall, in accordance with relevant laws and regulations of Asia and
China, be responsible for providing information, market development and customer
consulting services for Merion’s products. Party B will be responsible for
product consultation, arranging company visits and business discussion with
Asian customers, mainly Chinese customers.

 

 

3.Party B shall be responsible for providing service for Asian customers to
purchase products from Merion Inc website and China internet shopping malls
through cross border e-commerce platforms and China bonded zone channels in
accordance with the law.

 

 

4.Party B shall be responsible to integrate the cross-border internet resources,
web celebrity resources, wechat business resources, store sales agency system
and other alliance resources as well as blockchain technology application
resources, and make market sales plan and incentive mechanism in compliance with
relevant Chinese laws and regulations to rapidly expand product sales channels
and clients orders.

 

 

5.Party B shall be responsible for product information consultation, online
shopping guidance and cross-border e-commerce services. All purchase orders of
customers shall be completed directly on the online shopping websites, and all
sales funds shall be settled directly with Merion Inc. Party B and Party A's
Beijing representative office do not charge customers for sales of products and
any other fees.

 

 

6.Party B's remuneration shall be linked to the product marketing and actual
sales generated, and the incentives shall be agreed by both parties, so that
Party B can effectively achieve the sales target of Merion Inc in Asia.

 

 

7.Marketing layout of Party B:The markets that Party B has connections are as
follows: Taobao health care products flagship store with a channel reaching to
300,000 potential customers; Three-level distribution alliance with a channel
reaching to 160,000 potential customers; Pinpingou is estimated to have a
channel reaching to 50,000 potential customers; JD.com, pinduoduo, T-mall and
other customer groups are estimated to be able to reach to 200,000 potential
customers. Party B plans to provide Party A each year a sales platform with an
annual flow of no less than 100,000 customers to cooperate.

 

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8.According to the current market layout and plan, Party B's three-year
performance plan is as follows: in 2019, to achieve the sales of US$ 5 million
in Asia market; in 2020, to achieve the sales of US$50 million in Asia market;
in 2021, strive to achieve the sales of US$100 million in Asia market.

 

 

9.Party B shall be responsible for coordinating the publicity and image of Party
A, related qualification and filings, and building logistics channels for
further expansion of business of Merion Inc in Asia.

 

 

10.Party B shall be responsible for its own human resources and allocation, as
well as office operation and management expenses (by itself).

 

 

11.Anything that is unclear under this agreement shall be subject to the
supplementary agreement which shall have the same legal effect as this
agreement.

 

III. Force majeure

 

Neither party hereto shall be liable for any loss caused by failure or delay in
performance of all or part of its obligations under this contract due to any
force majeure, government orders or restrictions, or any unforeseeable or
uncontrollable or unavoidable event at the time of signing this agreement.
However, the Party affected by the force majeure event shall notify the other
Party as soon as possible.

 

Iv. Termination clause

 

1.After Party A confirms the sales of Party A's products caused by Party B's
promotion and services, the payment of promotion service fees shall be made
strictly in accordance with the agreement between the parties, except for
natural or man-made disasters, wars and trade sanctions. If no payment is made
for more than one month past due, Party B shall have the right to terminate the
agreement and demand Party A to compensate 15% of the overdue fees.

 

2.If Party B’s promotion activities seriously violate the laws and regulations
of China, Party B shall be responsible for such violations and Party A shall
only be responsible for the quality of the products and supplying the products
on time. If necessary, Party A may unilaterally terminate the agreement and
require Party B to compensate 15% of the cost of the products ordered and
produced and other losses incurred by Party A. If Party B fails to promote the
sales of Party A's products for RMB 50 million within one year after the signing
of this agreement (as the sales actually completed through Party B's promotion
and introduction), Party A shall have the right to unilaterally terminate this
agreement.

 

3.If either party fails to perform and/or breaches the terms and conditions of
this agreement during the term of this agreement, the parties shall try their
best to solve the relevant issues through friendly negotiation to each other's
satisfaction. Unless the parties can reach a settlement within thirty (30) days
after one party notifies the other party, the notifying party shall have the
right to terminate this agreement and the loss and damage caused thereby shall
be borne by the party who fails to perform its responsibilities or breaches the
agreement. In addition, either party may terminate this agreement in the event
of that the other party is in bankruptcy, liquidation or reorganization.

 

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V. Arbitration and applicable law

 

All disputes arising from the performance of this agreement shall be settled
through friendly negotiation. If no settlement can be reached through
negotiation, the case shall be submitted to China international economic and
trade arbitration commission (Beijing) for arbitration, and the rules of the
commission shall apply. The arbitration award shall be final and binding upon
both parties. Unless otherwise awarded by the arbitrators, the arbitration fee
shall be borne by the losing party. This agreement shall be governed by the laws
of the People's Republic of China.

 

Vi. Term of cooperation

 

1. Party A (including Beijing representative office) and Party B agree the
tentative term of the agreement is for five years.

 

2. This agreement is made in triplicate and shall be effective as the date of
signature.

 

Party A: Merion, Inc.

 

Representative: Danies Wang                                        

 

Signature:________________________________

 

Company Seal:____________________________

 

Date: 06/27/2019

 

Part B: HONG KONG ENCAID LIMITED

 

Representative: Jiansheng Qian                                   

 

Signature:________________________________

 

Company Seal:____________________________

 

Date: 06/27/2019

 

 

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