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Supplemental Agreement to the Natural Executive Agreement

THIS SUPPLEMENTAL AGREEMENT is made on the day and year stated in Item Error! Reference
source not found. of Schedule 1

BETWEEN
Cuckoo International (MAL) Sdn Bhd (Company No. 1102894-H), a company incorporated in
Malaysia and having its place of business at 16th Floor, Menara Bangkok Bank, Laman Sentral
Berjaya, No.105,Jalan Ampang, 50450 Kuala Lumpur (“Cuckoo”);
AND

The Party whose name and description is stated in Item 2 of Schedule 1 (“Natural Executive”).

(collectively, the “Parties” and individually, a “Party”)

WHEREAS
a) The Parties have entered into the natural executive agreement, the date of which is stated in
Item 3 of Schedule 1 (“Natural Executive Agreement”).

b) The Parties are now desirous of varying the terms and conditions of the Natural Executive
Agreement upon the terms and conditions herein contained.

NOW THIS SUPPLEMENTAL AGREEMENT HEREBY WITNESSETH as follows:

1. Interpretation

1.1 This Supplemental Agreement is supplemental to the Natural Executive Agreement and the
phrase “this Agreement” wherever it appears in the Natural Executive Agreement shall, with
effect from the date of this Supplemental Agreement, be construed as a reference to the
Natural Executive Agreement as amended by this Supplemental Agreement.

1.2 Save as otherwise expressly defined or provided herein or the context otherwise requires, the
terms and expressions used in this Supplemental Agreement shall bear the same meanings
as the terms and expressions defined in the Natural Executive Agreement.

1.3 Reference to statutes, statutory provisions, regulations or directives or any particular statute,
statutory provision, regulation, directive or treaty shall include any amendment, modification,
consolidation or re-enactment in force from time to time and any statutory instrument or
regulations made under it.

2. Purpose of this Supplemental Agreement

The Parties hereby agree to enter into this Supplemental Agreement to record their
agreement to amend the Natural Executive Agreement.

3. Effective Date
st
This Supplemental Agreement shall come into force on 1 Jan 2018 irrespective of the
diverse dates upon which the Parties may have each executed this Supplemental Agreement
respectively.

4. Conflict

In the event of conflict or inconsistency between the terms of this Supplemental Agreement and
the terms of the Natural Executive Agreement, the terms of this Supplemental Agreement shall
prevail.

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5. Saving Effect

Save and except to the extent that the Natural Executive Agreement is varied and amended as
hereinbefore provided, all the other terms, conditions, agreements, stipulations and provisions
in the Natural Executive Agreement shall remain in full force and effect.

6. Amendment to the Natural Executive Agreement

The Parties hereby agree that, with effect from the date of this Supplemental Agreement, the
Natural Executive Agreement shall be amended in the following manner:

6.1 Promotion of Natural Executive to Natural Manager, Natural Chief Manager or Natural Chief
Officer

6.1.1 Cuckoo shall be entitled to promote the Natural Executive to a Natural Manager
(“NM”), Natural Chief Manager (“NCM”) or Natural Chief Officer (“NCO”) or such
other position or designation as may be determined by Cuckoo from time to time
based on policies, rules and regulations determined by Cuckoo from time to time
and at its absolute discretion.

6.1.2 The following shall be conditions for the Natural Executive‟s promotion to a NM,
NCM or NCM (as the case may be) or such other position or designation as may be
determined by Cuckoo from time to time:

6.1.2.1 The NM, NCM or NCO (as the case may be) shall incorporate a private
company limited by shares (“Company”) under the Companies Act
2016 and shall provide Cuckoo with a certified true copy (certified as
true by the company secretary of the Company) of the certificate of
incorporation of the Company and such other details or documents in
respect of the Company as may be required by Cuckoo in accordance
with the time frame as prescribed by Cuckoo in its absolute discretion;

6.1.2.2 The NM, NCM or NCO (as the case may be) shall open and maintain a
current account with a licensed bank in Malaysia (“Bank Account”) for
so long as the Natural Executive remains a NM, NCM or NCO (as the
case may be); and

6.1.2.3 The NM, NCM or NCO (as the case may be) shall execute and provide
the letter of authorisation in form and substance as prescribed in
Annexure 1 of this Supplemental Agreement to Cuckoo authorising
Cuckoo to remit all amounts owing to the NM, NCM or NCO (as the
case may be) to the Bank Account.

6.1.3 Cuckoo shall be entitled to suspend of terminate the Natural Executive‟s promotion
to NM, NCM or NCO (as the case may be) if the Natural Executive fails to comply
with any or all the conditions as stipulated in Clause 6.1.1 above.

6.1.4 Upon being promoted to NM, NCM or NCO (as the case may be), references to
Natural Executive in the Natural Executive Agreement shall be replaced with NM,
NCM or NCO (as the case may be).

6.2 Restrictions in respect of the Company

During the Term of this Agreement, the NM, NCM or NCO (as the case may be) shall comply
and undertakes to comply with the following:

6.2.1 The name of the Company shall not be similar or identical (including phonetically
similar or identical) to the name of the NM, NCM or NCM (as the case may be);

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6.2.2 No person shall be the director and shareholder of the Company save for the
relevant NM, NCM or NCO (as the case may be) (“Relevant Person”) and the
Relevant Person‟s lawful wife or husband (as the case may be). The Relevant
Person shall be the key contact person and authorised signatory for the Company
and shall be duly authorised by the Company to deal with Cuckoo on all matters
arising between Cuckoo and the Company from time to time.

6.2.3 Not to permit any of Cuckoo‟s employees, staff or workmen (including the Natural
Doctor, Natural Doctress or Natural Service Division or such other designation as
may be included by Cuckoo at its sole discretion) to hold any position in the
Company, including as shareholder or director of the Company; and

6.2.4 Not to enter into any profit sharing, partnership, consortium, joint venture, trust or
any arrangement which will entitle any of Cuckoo‟s employees, staff or workmen
(including the Natural Doctor, Natural Doctress or Natural Service Division or such
other designation as may be included by Cuckoo at its sole discretion) to be entitled
to any revenue of the Company, the Natural Executive, NM, NCM or NCO (as the
case may be).

6.3 Non-competition and Non-solicitation

6.3.1 The Natural Executive, NM, NCM or NCO (as the case may be) shall not, during
the Term, engage or procure any other party to engage in the following activities:

6.3.1.1 either on his/her own account or for any other person, directly or
indirectly solicit, interfere with, or persuade any person who is or was a
customer, distributor or agent of Cuckoo or in the habit of dealing with
Cuckoo to cease doing business with Cuckoo or reduce the amount of
business which the customer would normally do with Cuckoo;

6.3.1.2 either on his/her own account or for any other person, directly or
indirectly solicit the services of or endeavour to encourage any person
who is an employee or officer of Cuckoo to leave the employment of
Cuckoo;

6.3.1.3 either on his/her own account or for any other person, directly or
indirectly carry on or be engaged or concerned or interested (whether
as a consultant, employee, director, partner, adviser, agent, trustee,
unit holder shareholder or in any other capacity) in any business similar
or substantially similar to the business of Cuckoo, including but not
limited to the businesses operated by the Competitors (as defined in
Clause 6.3.4 below). This includes but is not limited to recommending,
advertising or selling the products of Competitors to any existing or
potential customers of Cuckoo; and/or

6.3.1.4 in relation to any trade, business or company, use (or cause or permit
to be used) any name in such a way as to be capable of or likely to be
confused with the name of Cuckoo.

6.3.2 Each and every obligation under Clause 6.3.1 shall be treated as a separate
obligation and shall be severally enforceable as such and in the event of any
obligation or obligations being or becoming unenforceable in whole or in part, such
part or parts as are unenforceable shall be deleted from Clause 6.3.1 or amended
to make the same be effective (if possible) and any such deletion shall not affect
the enforceability of all such parts of Clause 6.3.1 which remain not deleted.

6.3.3 While the restrictions contained in Clause 6.3.1 are considered by the Parties to be
reasonable in all the circumstances to protect the legitimate proprietary interests of
Cuckoo, it is recognised that restrictions of the nature in question may fail for
technical reasons unforeseen and accordingly, it is hereby agreed and declared

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that if any of such restrictions shall be adjudged to be void as going beyond what is
reasonable in all the circumstances for the protection of the interests of Cuckoo but
would be valid if part of the wording thereof were deleted or the periods thereof
reduced or the range of activities or area dealt with thereby reduced in scope, the
said restriction shall apply with such modifications as may be necessary to make it
valid and effective.

6.3.4 The term “Competitors” in Clause 6.3.1.3 shall include but is not limited to the
following brands: (a) Coway; (b) Nesh; (c) Diamond; (d) Korea Rental; (e) VWA and
(f) Kangen Water. Cuckoo shall be entitled to vary or add to the said list of
competitors at any time and in its absolute discretion without obtaining the prior
agreement of the Natural Executive, NM, NCM or NCO (as the case may be).

6.4 Transfer of Sales

6.4.1 The Natural Executive, NM, NCM or NCO (as the case may be) shall not pass,
transfer or assign any potential, actual or prospective sales of the Products
(including leads in respect of such Sales) (collectively, the “Sales”) during the Term,
during and after termination of this Agreement to any person or organisation
including but not limited to any natural executive or NM or NCM or NCO within or
without the organisation in which the Natural Executive, NM, NCM or NCO (as the
case may be) is based save as permitted by Cuckoo.

6.4.2 If the Natural Executive or NM or NCM or NCO (as the case may be) shall be
suspected to be in breach of Clause 6.4.1, Cuckoo shall be entitled to conduct a
sales disciplinary inquiry (“Sales Disciplinary Inquiry”) to determine whether there
was a breach wherein the breaching Natural Executive or NM or NCM or NCO (as
the case may be) shall be required to provide such information and documents that
Cuckoo may require for purposes of the Sales Disciplinary Inquiry. For the
avoidance of doubt, Cuckoo does not have the obligation to hold a Sales
Disciplinary Inquiry in respect of a suspected or purported breach of Clause 6.4.1.

6.4.3 In the event the Natural Executive or NM or NCM or NCO (as the case may be)
shall be in breach of Clause 6.4.1, Cuckoo shall be entitled to take any or all of the
following action in its absolute discretion:

6.4.3.1 issue a warning letter to the Natural Executive or NM or NCM or NCO


(as the case may be); and

6.4.3.2 terminate this Agreement wherein the provisions in respect of


termination of this Agreement shall apply.

6.5 Irregular Sales

6.5.1 The Natural Executive or NM or NCM or NCO shall not engage in irregular sale
activities in respect the Products which may include but are not limited to fraudulent
sale of Products, signing contracts to be entered with Cuckoo on behalf of
customers, forging or generating fraudulent or fake documents, faking or
manipulating the Natural Executive or NM or NCM or NCO„s sales figure/collection
or the sales figure/collection of other natural executives appointed by Cuckoo.

6.5.2 If the Natural Executive or NM or NCM or NCO (as the case may be) shall be
suspected to be in breach of Clause 6.5.1, Cuckoo shall be entitled to conduct a
Sales Disciplinary Inquiry to determine whether there was a breach wherein the
breaching Natural Executive or NM or NCM or NCO (as the case may be) shall be
required to provide such information and documents that Cuckoo may require for
purposes of the Sales Disciplinary Inquiry. For the avoidance of doubt, Cuckoo
does not have the obligation to hold a Sales Disciplinary Inquiry in respect of a
suspected or purported breach of Clause 6.5.1.

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6.5.3 The following shall ensue in an event of a breach and subsequent breaches of
Clause 6.5.1 by the Natural Executive or NM or NCM or NCO (as the case may be):
st
6.5.3.1 1 breach – deduction of fifty per centum (50%) of the total
Commission payable to the Natural Executive or NM or NCM or NCO
(as the case may be) for the month in which the breach occurred.
nd
6.5.3.2 2 breach - deduction of seventy per centum (70%) of the total
Commission payable to the Natural Executive or NM or NCM or NCO
(as the case may be) for the month in which the breach occurred.
rd
6.5.3.3 3 breach - deduction of one hundred per centum (100%) of the total
Commission payable to the Natural Executive or NM or NCM or NCO
(as the case may be) for the month in which the breach occurred.
th
6.5.3.4 4 breach – termination of this Agreement wherein the provisions in
respect of termination of this Agreement shall apply.

6.5.4 The term “Commission” in Clause 6.5.3 means any and all of the commissions,
incentives or entitlements including Alliance, Alliance (rental), brand store Alliance
profit sharing, brand store promotion fee, first rental sales fees, first rental sales
fees (group), monthly rental fees (group), performance reward, personal sales fee,
personal sales incentive, team award and team award (RC) which the Natural
Executive or NM or NCM or NCO (as the case may be) shall be entitled to based
on Cuckoo‟s prevailing rules and policies and shall be subject to modification or
variation by Cuckoo from time to time and in Cuckoo‟s sole discretion.

6.6 Determination of NM, NCM or NCO‟s Appointment

6.6.1 In the event the NM, NCM or NCO (as the case may be) (“Determining Party”)
shall at his/her discretion opt to terminate this Agreement, the following shall ensue:

6.6.1.1 The Determining Party shall provide one (1) months‟ notice in writing to
Cuckoo notifying Cuckoo of his/her decision to terminate this
Agreement. The said one (1) month notice shall commence from the
date Cuckoo receives such notice from the Determining Party.

6.6.1.2 An exit meeting shall be held between the Determining Party and
Cuckoo to ensure a smooth handover and determination of this
Agreement.

6.6.1.3 If the Determining Party operates a brand store (“Brandstore”)


pursuant to the manager with brandstore agreement entered with
Cuckoo (“Manager with Brandstore Agreement”), the Determining
Party shall pay the following to Cuckoo:

(i) all outstanding amounts owing to Cuckoo pursuant to the


Manager with Brandstore Agreement;

(ii) all amounts owing to the landlord, lessor or licensor of the


Brandstore and such utility providers providing utilities to the
Brandstore up until the date of determination of this Agreement;

and further that Cuckoo shall be entitled to deduct such amounts from
the Determining Party‟s Commissions (as defined in Clause 6.5.4
above) towards settlement of the aforesaid amounts.

6.6.1.4 Cuckoo shall designate the person who shall be given the first right of
refusal to takeover the Brandstore and such right shall be valid for two
(2) weeks, upon the expiry of which Cuckoo shall be entitled to grant

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the offer to takeover the Brandstore to such other persons as it may
determine. Pending such takeover of the Brandstore, Cuckoo shall be
entitled to approve road shows within the Location (as defined in the
Manager with Brandstore Agreement). The takeover of the Brandstore
shall be documented by a an agreement to novate the Manager with
Brandstore Agreement to be entered between Cuckoo, the Determining
Party and the party taking over the Brandstore and shall be in such
form and substance to the satisfaction of Cuckoo.

6.6.1.5 Such persons that fall within the ambit of the organisation of the
Determining Party as determined based on the rules, regulations,
policies and directives of Cuckoo (“Organisation”) shall be transferred
to such person in accordance with the rules, regulations, policies and
directives of Cuckoo at that point in time.

6.6.1.6 The Determining Party‟s entitlement to the Alliance (rental) and


monthly rental fees (group) and such other categories of fees and
income as may be determined by Cuckoo from time to time (collectively,
the “Passive Income”) post determination of this Agreement shall be
determined based on the rules, regulations, policies and directives of
Cuckoo at that point in time.

6.6.2 In the event this Agreement is terminated for any reason whatsoever save in
accordance with Clause 6.6.1 and Clause 6.6.3, the following shall ensue:

6.6.2.1 The NM, NCM or NCO (as the case may be) shall not be entitled to any
Passive Income post determination of this Agreement.

6.6.2.2 Clauses 6.6.1.2, 6.6.1.3 and 6.6.1.4 shall apply.

6.6.3 In the event of death or insanity of the NM, NCM or NCO (as the case may be),
such NM, NCM or NCO‟s (as the case may be) entitlement to the Passive Income
shall be distributed, suspended or terminated in accordance with the prevailing
rules, regulations, policies and directives of Cuckoo as determined by Cuckoo from
time to time at the time of death or insanity of the relevant NM, NCM or NCO (as
the case may be).

6.6.4 For the avoidance of doubt, Clause 6.6 shall only be applicable to a person in a NM,
NCM or NCO position.

6.7 Rules and Regulations

The Natural Executive shall at all times observe and conform to the rules regulations
restrictions and instructions as imposed or may be imposed from time to time by Cuckoo at its
absolute discretion governing the conduct, activities, entitlements, operations, the relationship
between Cuckoo, its customers and the Natural Executive vis-à-vis each other. These rules,
regulations, restrictions and instructions may be imposed and varied from time to time at the
absolute discretion of Cuckoo without necessitating written agreement by the Natural
Executive. A breach of any one or more of the provisions of such rules, regulations,
restrictions and instructions shall be a breach of condition of this Agreement.

6.8 Cuckoo Friends

The Natural Executive shall adhere to Cuckoo‟s rules regulations restrictions and instructions
in respect of usage of “Cuckoo friends” in the Natural Executive‟s promotional and advertising
activities and shall not be entitled to appoint its own Cuckoo brand ambassadors.

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6.9 Business Day

Reference to “business day” in this Supplemental Agreement and the Natural Executive
Agreement means a day (other than a Saturday, Sunday or gazetted public holiday in Kuala
Lumpur) when banks are open for banking business in Kuala Lumpur.

6.10 Absenteeism

Should the NCM (“Relevant NCM”) be absent from attending or performing his/her duties
within the organisation in which the Relevant NCM is based for such period (whether in
continuity or in aggregate) which Cuckoo deems to be unsatisfactory or unreasonable in its
sole discretion, Cuckoo shall be entitled to appoint such person (“Replacement”) to take over
the duties and functions of the Relevant NCM. During such period where the Replacement
has taken over the duties and functions of the Relevant NCM, the Relevant NCM shall not be
entitled to any or all of the Commission (as defined in Clause 6.5.4 above).

6.11 Dispute

Any dispute between the Natural Executive or NM or NCM or NCO (as the case may be) and
any other Natural Executive, NM, NCM or NCO engaged by Cuckoo shall be resolved
between such parties without involving Cuckoo subject always that any resolution shall be in
accordance with the terms of the Natural Executive Agreement (as amended and
supplemented from time to time) and the rules regulations restrictions and instructions as
imposed or may be imposed from time to time by Cuckoo at its absolute discretion.

6.12 Passive Income

6.12.1 The Passive Income shall be subject to modification and amendments by Cuckoo
from time to time in its absolute discretion. Such modifications and amendments
shall include but are not limited to the following:

6.12.1.1 The NM or NCM or NCO‟s (as the case may be) entitlement to the
Passive Income;

6.12.1.2 The elements and categories of income and fees that constitutes the
Passive Income; and

6.12.1.3 The formula and calculations for determining the Passive Income
amount.

6.13 Sales Disciplinary Inquiry

6.13.1 The procedure for a Sales Disciplinary Inquiry shall be determined by Cuckoo in its
absolute discretion. The following forms part of the procedure for a Sales
Disciplinary Inquiry which shall be subject to modification by Cuckoo from time to
time and in its absolute discretion:

6.13.1.1 Cuckoo shall set out the purported or suspected breaches by the
Natural Executive or NM or NCM or NCO (as the case may be)
(“Infringing Party”) together with the time, date and venue of the Sales
Disciplinary Inquiry and the Infringing Party shall provide a written
response to Cuckoo within three (3) business days together with the
relevant supporting documents.

6.13.1.2 If the Infringing Party shall fail to turn up for the Sales Disciplinary
Inquiry, Cuckoo shall send the Infringing Party a notice by way of email
notifying the Infringing Party of the date, time and venue of the

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adjourned Sales Disciplinary Inquiry (“Adjourned Sales Disciplinary
Inquiry”).

6.13.1.3 Should the Infringing Party fail to attend the Adjourned Sales
Disciplinary Inquiry, Cuckoo shall be entitled to either issue a warning
letter to the Infringing Party or to terminate this Natural Executive
Agreement.

7. Costs

Cuckoo shall bear all costs and expenses in connection with and incidental to the preparation,
execution, delivery and completion of this Supplemental Agreement.

8. Amendment and/or Variation

Save in accordance with the provisions of this Supplemental Agreement, any modification,
amendment, variation or waiver of any provisions of this Supplemental Agreement shall not
be effective unless made by mutual consent and made in writing and duly signed by the
Parties.

9. Counterparts

This Supplemental Agreement may be signed in any number of counterparts, all of which
taken together shall constitute one and the same instrument. Either Party may enter into this
Supplemental Agreement by signing any such counterpart and each counterpart shall be as
valid and effectual as if executed as an original.

10. Time

Time shall be of the essence in this Supplemental Agreement.

11. Binding Effect

This Supplemental Agreement shall be binding on and shall enure for the benefit of the
successors of each Party.

12. Governing Law

This Supplemental Agreement shall be governed by and construed in accordance with the
laws of Malaysia. The Parties agree to submit to the non-exclusive jurisdiction of the courts of
Malaysia.

13. Further Assurances

The Parties shall execute and do and take steps as may be in their power to procure that all
other necessary persons, if any, execute and do all such further documents, agreements,
deeds, acts and things as may be required so that full effect may be given to the provisions of
this Supplemental Agreement.

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