Item 1.01 Entry into a Material Definitive Agreement.
On March 15, 2022, Action Holdings Financial Limited ("AHFL"), a British Virgin
Islands company and wholly-owned subsidiary of China United Insurance Service,
Inc. (the "Company" or "CUIS"), entered into Amendment 4 ("Amendment 4") to the
Strategic Alliance Agreement (the "Alliance Agreement") with AIA International
Limited Taiwan Branch ("AIATW") to further revise certain provisions in the
Alliance Agreement and the previous amendments to the Alliance Agreement.
On June 10, 2013, AHFL entered into the Alliance Agreement with AIATW, which was
later amended by three amendments thereto (the "Former Amendments"). In
accordance with the Alliance Agreement and Former Amendments, AHFL and other
insurance agency companies or insurance brokerage companies affiliated with AHFL
or CUIS have been promoting life insurance products provided by AIATW within the
territory of Taiwan and received execution fees from AIATW subject to certain
terms and conditions set forth therein, including reaching certain performance
targets and threshold 13-month persistency ratios. In accordance with the
Alliance Agreement and Former Amendments, the execution fees may be recalculated
if certain performance targets are not met by AHFL. The original term of the
Alliance Agreement is from April 15, 2013 to August 31, 2018, which was extended
to December 31, 2021 by one of the Former Amendments.
On March 15, 2022, AHFL entered into Amendment 4, which, among other things,
extended the expiration date of the Alliance Agreement to December 31, 2031.
Pursuant to Amendment 4, the sales targets for the remaining contract term under
the Alliance Agreement shall be changed by reference to (i) the amount of the
value of new business ("VONB") and (ii) the 13-month persistency ratio as set
forth therein, provided that to the extent any underlying insurance contract is
revoked, invalidated or terminated and premiums are refunded to such
policyholder, the amount of the related VONB shall be correspondingly reduced.
Amendment 4 provides that AIATW shall pay the strategic alliance business
promotion fee of NTD 50,000,000; however, AHFL shall be required to return
certain portions of or all of the business promotion fees within thirty (30)
days of receipt of notice provided by AIATW if AFHL fails to meet certain goals
set in Table 2 and Table 3 of Amendment 4. The primary factor under formula one
focuses on the annual and/or accumulated achievement rate(s), while the primary
factor under formula two focuses on the 13-month persistency ratio(s), among
others.
An English translation of Amendment 4 is included as Exhibit 10.1 to this
Current Report on Form 8-K. The foregoing description of Amendment 4 does not
purport to be complete and is qualified in its entirety by reference to the
complete translation of Amendment 4, which is filed as Exhibit 10.1 hereto, and
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
10.1 Translation of Amendment 4 to the Strategic Alliance Agreement
between Action Holdings Financial Limited and AIA International
Limited Taiwan Branch dated March 15, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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