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EXHIBIT 10.6
DISTRIBUTION AGREEMENT
OF
FUJIAN JINJIANG PACIFIC SHOES CO., LTD.
(English Translation)
Party A: Fujian Jinjiang Pacific Shoes Co., Ltd.
Party B: Wang Qinghe, Guangxi Province
For the purpose of promoting the sale of products with Bepure brand ("Products")
in the territory agreed by the Parties hereto, expanding the share of products
in such territory and deepening the cooperation of the Parties, subject to the
Contract Laws of the People's Republic of China, Party A and Party B shall,
under the principles of free will and co-benefit, enter into the following
agreement upon amiable negotiation:
1 RECONDITIONS OF PARTY B
1.1 Party B shall provide its I.D. card or business license and the copies
thereof, and shall be liable for the truthful of such materials;
1.2 Party B shall pay RMB1.05 million as prepayment within 5 to 25 days upon the
signature or seal on this Agreement, Party A may terminate this Agreement if
Party B fails to observe the said provisions;
1.3 Funds used by Party B for the distribution of Party A's products shall not
be less than RMB1.8 million;
1.4 Party B shall provide at least 85 outlets with terminal images for the
distribution of products with Baopiao brand; and
1.5 The dimensions of distribution office of Party B shall not be less than 30
m2, which shall exhibit the products hereto.
2 TERRITORY
2.1 Party A authorizes Party B distribute the products and Party B shall make
wholesale or retails in the territory of Guangxi Province ("Territory ") as
referred below:
Territory
The blank in such form shall be completed correspondingly.
2.2 Party A represents that Party B shall be the exclusive distributor in such
territory and may not authorize any other individual or entity as the
distributor of the products.
2.3 Party B shall carry out marketing progress in the territory within 3 months
upon the date of this Agreement; otherwise, Party A may authorize any other
individual or entity to market the territory un-marketed by Party B.
3 TERM
3.1 The term of this Agreement ("Term") shall be one years commencing from April
30, 2009 to April 30, 2010.
4 SALES TARGET
4.1 The sales target should be fulfilled by Party B within the term shall be
RMB7.1 million, which shall be calculated as the payment made to Party A to
Party B for the products purchased.
4.2 Any or all preferential policies of Party A shall be applied to Party B if
such sales target has been fulfilled.
5 EXPENSES AND PAYMENT TERM
5.1 All products distributed by Party B shall be purchased from Party A at
factory prices.
5.2 Party B shall be obligated to fulfill the annual sales target and shall
guarantee that at least 95% of the payment for the products sold shall be made
prior to April 30, 2010, if fails, (i) no award referred herein shall be granted
to Party B; and (ii) Party A may terminate this Agreement and require the
compensation there from.
5.3 Transport. All expenses arising from the transport of products and
ancillaries, including the insurance expenses, handling fees or the costs for
the return of products, shall be borne by Party B. Party B shall designate the
freight terminal within Jinjiang City as carrier and as consignee. All risks and
liabilities arising from such transport shall be transferred to Party B upon the
products provided by Party A have been delivered to such freight terminal as
designated by Party B.
6 CREDIT LINE AND PREFERENTIAL POLICY
6.1 Credit Line. For the purpose of assisting the marketing program conducted by
Party B, Party A establishes a credit line for Party B subject to the market
conditions.
6.2 The credit line thereof shall be RMB0.85 million. Any order issued by Party
B shall not be accepted and Party A may suspend the delivery to Party B if such
credit line is overdrawn, Party A may accept such order and affirm the
corresponding quantity and delivery date only upon the breach of Party B thereof
has been rectified.
6.3 Party A may make annual registration and review on the credit of Party B,
Party A may adjust or terminate the credit line provided to Party B if the
credit of Party B fails to satisfy the requirements of Party A, in such event,
any annual preferential support may not be enjoyed by Party B.
7 STATEMENT OF ACCOUNT
7.1 The Parties may establish the Account-checking System. Party A shall fax the
invoice list indicating the amounts outstanding of yesterday to Party B for
review and if correct upon such review, Party B shall affirm such invoice list
with signature and fax the same in the same day and mail the original copy to
Party A thereafter.
7.2 Party A shall, prior to the 6th day of each month, fax or mail the statement
of account to Party B and Party B shall, prior to the 8th day of the same month,
fax the signed and affirmed statement of account or all evidences supporting its
demur to such statement of account to Party A and mail the original copies to
Party A thereafter, if Party B fails to fulfill the same, it shall constitute
the acceptance of such statement of account by Party B.
8 ORDER, RETURN OR REPLACEMENT OF PRODUCT
A. PURCHASE ORDER
8.1 Party A shall deliver the products to Party B in accordance with the
purchase order issued and signed by Party B.
8.2 Party A shall notify Party B within 3 days upon the receipt of purchase
order issued by Party B if the same fails to be fulfilled by Party A, then such
purchase order shall be amended correspondingly upon the negotiation of the
Parties.
8.3 Party B may not cancel any order issued to Party A without the consent of
Party A.
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B. SUPPLEMENTARY ORDER
8.4 Any products or its delivery date under the supplementary order shall be
agreed by the Parties. Any such supplementary order faxed shall prevail if there
is any dispute.
C. RETURN OF PRODUCT
8.5 No product supplied by Party A may be returned except those with substantial
quality defect or imperfection.
8.6 Party A may refuse to accept any product returned by Party B by violating
the said stipulations and all expenses arising therefrom shall be borne by Party
B, provided, however, Party A may provide assistances to the transfer of
products between or among different territories.
8.7 Party A shall accept any product returned by Party B and assume the
corresponding expenses if the same is defective, provided
a. Party B has made the list for such defective products collected from
points of sale and completed the Application for the Return of
Defective Products indicating the number, color, ex-factory date,
defects and return time of such products, in such event, the said
product shall be returned upon the acceptance of such Application;
b. Party B has kept the box, package, invoice, certificate of quality and
the said approval of such products returned for the review by Party
A,if fails, Party A may refuse to accept such products returned; and
c. Party A shall, upon receipt of such products, confirm its defects and
determine the reasons. Party A shall notify Party B if such defects
are due to the negligence of Party A or refuse such return if such
defects are due to the reason of Party B or any formalities necessary
is not fulfilled by Party B.
9 ADVERTISING AND SUPPORT POLICY
A. ADVERTISING POLICY
9.1 Party A shall provide all necessary advertising materials including the
guideline for the decoration of franchised store, stop board or business feature
film, shall support the promotion programs carried out by Party B within the
territory and assume certain expenses for such promotion as agreed by the
Parties.
9.2 Any billboard, car card or outdoor advertising carried out by Party B shall
be subject to the submission of Application of Advertising by Party B and
approval made on the same by Party A.
9.3 If any expense arising from such advertising is required to be indemnified
by Party A, Party B shall provide the formal invoice, contract, photograph and
sample of such advertisements to be checked, if fails, Party A may refuse such
indemnification.
B. TERMINAL EXPENSES
9.4 The shelves and cash desks of Party B's franchise stores shall be provided
by Party A and all expenses arising there from shall be borne by Party B;and
9.5 The decoration of terminal shops of Party B shall be carried out by Party B
in accordance with the requirements listed in the materials and disks provided
by Party A.
10 INCENTIVE POLICY
Party B shall be obligated to provide the feedback information, the information
concerning the hot sale of competitors' products and the samples, and assist
Party A to develop the right products. Party A shall make awards to Party B if
any information provided is accepted and market profit has been acquired
therefore.
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11 MANAGEMENT RULES
11.1 Party B shall carry out its business operations within the territory.
1.2 Party B may not distribute the products outside the territory; otherwise, it
shall constitute the CROSS REGION SALE of Party B.
11.3 Party B shall enforce the market rules provided by Party A and implement
the appropriate measures to prevent the Cross Region Sale by its
sub-distributors.
11.4 Party B may submit complaint to Party A if any Cross Region Sale is made by
any other distributor and shall designate personnel to assist Party A for the
investigation of the products related and its source.
11.5 Party B shall repurchase all products under any Cross Region Sale conducted
by Party B within 7 days, if Party B fails to observe the said provisions, Party
A shall designate its personnel to handle the same, all expenses arising
therefrom, including but not limited to the expenses for travel or repurchase of
Products, shall be borne by Party B which shall be deducted from the payment due
to Party B, in addition, all products repurchased by Party A shall be owned by
Party A.
11.6 Party A may suspend one week's supply if the second Cross Region Sale is
made by Party B, while at the third Cross Region Sale by Party B, Party A may
suspend two weeks' supply, claim the damages as CNY 5,000 and terminate the
exclusive distributor rights within the territory.
12 RIGHTS AND OBLIGATIONS
A. RIGHTS AND OBLIGATIONS OF PARTY A
12.1 Party A shall provide the marketable products with good qualities and
continually develop new products to satisfy the market requirements and
safeguard the interests of distributor.
12.2 Party A shall, at its best efforts, to provide the advertising materials
quarterly for the products;
12.3 Party A may check and supervise the pricings of Party B, in any event,
Party B shall sell the products at the prices suggested by Party A and may not
make any authorized increasing or decreasing.
B. RIGHTS AND OBLIGATIONS OF PARTY B
12.4 During the term and any other time thereafter, Party B is obligated to
inform Party A if any counterfeit products or the infringement of Bepure brand
is found and provide the necessary assistances. 12.5 Party A may not transfer or
assign the distribution rights hereunder to any third party without the prior
written consent of Party A, the Parties are the independent contractors, all
businesses or transactions carried out by Party B shall be the independent acts
of Party B, which shall not incur any legal or economic liabilities to Party A.
12.6 Any formalities or expenses of Party B arising from the fulfillment of tax
obligations shall be the sole obligation of Party B.
12.7 Any related materials or certificates provided by Party A shall not be used
by Party B for any other purposes except the distribution hereunder, if Party B
fails to observe the said provisions, all legal or economic liabilities arising
therefrom shall be borne by Party B. In no event Party B may provide any
guarantee on behalf of Party A.
12.8 During the term and any other time thereafter, Party B shall keep the
secret of all confidential information acquired from Party A, including but not
limited to the trade secrets related to the product development, market program
and distribution strategies etc.
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13 LIABILITY
Either Party ("Innocent Party") may terminate this Agreement and require the
other Party ("Breaching Party") to pay RMB 0.3million as damages if
13.1 Party B, as Breaching Party, fails to accept the products ordered with the
time limit agreed upon the conclusion of Purchase Contract;
13.2 The Breaching Party terminate this Agreement unilaterally during the term;
13.3 Party B, as Breaching Party, violates the pricing or any other market
policies which disorder the distribution market of Party A;
13.4 Party B, as Breaching Party, fails to return the logos, adverting
materials, handbooks, bill of sale, special stamp or any other instruments or
samples upon the expiration of term hereof;
13.5 Party B, as Breaching Party, fails to observe the state policies, laws or
regulations and is adjudicated to shut off or suspend business operations;
13.6 For the purpose of illegal benefits, Party B, as Breaching Party,
distribute the counterfeit products or use the trademark of Party A without the
prior written consent of Party A; or
13.7 Party B fails to observe the obligations hereunder, in such event, Party A
may suspend the delivery of products or terminate this Agreement.
14 EXPIRATION OR TERMINATION
14.1 Either Party shall make written notice at least 1 month prior to the
expiration hereof to the other Party if it is intended to renew this Agreement.
14.2 Upon the expiration or termination hereof for any causes
a. Party B shall return all materials, certificates, stamps, instruments,
advertising materials, bill of sale and any other information provided
by Party A;
b. Party B shall cease the use of all trademarks, logos, promotion
materials, shelves and materials; and
c. Party B shall inspect the accounts with Party A within 5 days
thereafter and pay all amounts outstanding within 60 days, if fails,
damages shall be paid to Party A calculated as 1% of the amounts
unpaid per each day delayed.
15 MISCELLANEOUS
15.1 The corresponding market management rules provided by Party A during the
term hereof shall be the Schedule of this Agreement and shall be observed by
Party B.
15.2 Without the written authorization of Party A, no employee may not borrow or
collect of any amounts from or require the transfer of products from Party B or
its sub-distributor or terminal operators, if fails, all losses suffered
therefrom shall be borne by Party B solely.
15.3 Any change to the name and number of bank account of Party A shall be
subject to the written notice issued by the General Manager of Party A.
15.4 As a form contract, except the blank may be completed in handwriting, all
other contents shall be printed, any amendment thereof shall be null and void
without the affirmations of Party A and Party B with signatures or common seal.
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15.5 Any dispute between the Parties hereto shall be settled through amiable
negotiation, if fails, either Party may bring a lawsuit before the People's
Court where Party A is located.
15.6 Any issues unmentioned herein shall be subject to the separate negotiation
of the Parties and supplementary agreement.
This Agreement shall be executed in duplicate; each Party shall have one, which
shall come into effect upon the signatures or seals by the Parties hereto.
Party A Party B
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Name: Jujian Jinjing Pacific Name: /s/ Wang Qinghe
Shoes Co., Ltd. (seal) ------------------------------
Address: Address: Guangxi Nanning
Legal Representative: Legal Representative:
/s/ Li Haiting
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