2007 Ermapao Products Retail Agreement
Party A: Songyuan City Ermapao Green Rice Limited
Party B: Songyuan City Tongda Grain and Oil Company
This agreement is to outline the rights and responsibilities of both
parties, the contents are as below.
1. Authorized Distribution Area
B will be A's Retailer in the Songyuan region for A's products. B's
authorized area to sell A's products is Songyuan region. Agreement is
effective December 6th 2007 to December 5th 2010.
B will be selling A's Ermapao series products. Product packaging and price
are in the following table.
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Product Packaging Unit Price tax included (Yuan/KG)
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25 KG/Bag 3.60
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10KG/ Bag 3.90
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5KG/Bag 4.10
Green Rice ----------------------------------- -----------------------------------
10KG/Box 8.40
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8KG/Box 6.80
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7.5KG/Box 9.90
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5KG/Box 14.80
Organic Rice ----------------------------------- -----------------------------------
7.5KG/Box 14.80
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o Unit Price does not include transportation fees
B must establish and maintain a distribution point in Songyuan for Ermapao
products, and accept A's marketing and goods.
2. B's Rights and Responsibilities
2.1
B will be A's retailer of Ermapao products in the area mentioned in this
agreement, A will guarantee the rights of B as its retailer and the price
of the purchased products will remain consistent.
2.2
A will provide all necessary training and information services at no
charge.
2.3
B will officially be A's authorized retailer once agreement is signed.
2.4
B is only authorized to sell Ermapao products in the designated area, B
will not be allowed to distribute Ermapao products to other regions.
2.5
If market changes dictate a change in the cost of Ermapao products and
thus create changes in the selling price of the products, B will have to
sell the products within reasonable market price. If B does not comply
with the selling price, A will issue a warning and B should immediately
make a price adjustment. If the same conflict occurs again, A will stop
all distribution activities with B and the agreement will be terminated.
2.6
B will have to maintain the image of Ermapao products and keep them clean
and visible at all time when selling them.
3. A's Rights and Responsibilities
3.1
A has the right to adjust its selling price to B if there is a change of
price in raw material.
3.2
During the period of agreement, A has the right to monitor B's selling
center and operations related to Ermapao products. B has to comply with
A's reasonable suggestions and corrections.
3.3
A has the right to give B a sales plan according to market change and
time, A is also responsible to protect B's rights as A's retailer in the
region stated in the agreement.
A will be responsible for providing B with marketing plans and retailer
design marketing plans.
4. Product Supply and Payment Details
4.1
A will distribute Ermapao products to B according an assessment of the
actual sales ability of B before distributing any products to B according
to B's orders.
4.2
Transportation fees will be paid by B.
4.3
B will not have to make an immediate payment to A when receiving products
from A. B will have to clear all outstanding invoices for previous
shipments before or on the day of receiving the new products.
4.4
B will have to pay off all payments once the agreement is terminated.
5. Product Quality Guarantee
5.1
A will provide B with products that meet quality standard criteria. These
standards should meet national and industry standards, if not, it must
meet business standards.
5.2
B is prohibited to alter any of A's product contents. If such an instance
occurs, B must take on any and all responsibility for any consequences
which may arise from such action.
5.3
B will be responsible to give directions to customers on how to use A's
products. If a problem arises and the reason is because of the quality of
the product itself, A will have to be responsible for all damages. If the
consumer is at fault in using A's products, A will not be responsible.
5.4
If consumers have any conflicts with A and B regarding product quality,
the problem will be given to the national level quality control department
for further investigation.
6. Retailer Sales Details
6.1
B guarantees to reach 22.5 million Yuan in sales from December 6th 2007 to
December 31st 2007. Starting 2008, additional sales targets will be
reevaluated and incorporated into another agreement. If sales reach the
target number, B will be rewarded with a 0.2% of the sales revenue as
bonus. B will have to pay a 0.1% penalty fee if it does not reach the
sales target.
7. Product Return Policies
7.1
If A should find issues with the quality of their products, B will have to
return all questionable products to A within one month starting from the
day B receives the notice of same from A. A will have to pay all
transportation costs. Any products past the due date will not be accepted
by A and B will bear responsibility for all losses.
7.2
If the products are returned for reasons which are not quality related, B
will have to return the products three months before the quality
expiration date. The amount of returned products cannot be more than 10%
of recent shipment of products from A. B will have to pay for all
transportation fees for returned goods (unless A made a shipment mistake
initially).
7.3
When B is requesting to return orders, B will have to provide A with a
return order stating why the products are to be returned, which products,
quantity, size (packaging), and shipment number. A will assess fees
associated with the returns. If B complies, B can then return the
products. All calculations based on quantity of returned products will be
based on what A has physically received.
7.4
If B does not submit a written request to A for product returns, A will
not be obliged to accept any returns from B
8. Cross Region Sales Policies
8.1
If B is to sell Ermapao products outside of its designated region, the
matter will be further investigated, If B is to be found guilty of selling
outside of designated region; A will stop the process of shipments of
products to B
8.2
B will have to give A a written agreement guaranteeing that cross region
sales will never happen again. After a resolution of the problem, B will
then continue on with shipments of products to A.
8.3
If b does not comply with the Cross region sales policies, or if the
problem persists, A have the rights to terminate the contract and B will
have to pay A all losses.
9. Breach of Contract
Breach of a contract may terminate the obligations of the contract. Either one
party or both parties have failed to perform an obligation as expected under the
contract. A breach may occur when a party
o Refuses to perform the contract
o Does something that the contract prohibits, or
o Prevents the other party from performing its obligations
o Party B can not perform the targeted goal stated in the contract
o Party B fails to make payment on time
9.1
If Party B breaches the contract, notice of the termination of a contract
may be given according to the terms of the contract. In 30 days, Party
shall return all products and marketing materials as well as accounts
receivable and overdue. Party B will be solely responsible for shipping
and handling fees for return products and marketing materials. Over 30
days of notice period, if the accounts receivable and overdue have not
been paid in full, Party B will be charged 3% of overdue daily.
10. Other
10.1
This agreement will be effective once signed by both parties; both parties
will receive a copy of the contact. Should any conflicts arise which
cannot be resolved by the contract, the case will be taken to the local
court where A is situated.
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A: B:
Name: Songyuan City Ermapao Green Name: Songyuan City Tongda Grain
Rice Limited and Oil Company
Representative: Huizhi Xiao Representative: Zhongwu Gao Date:
Date: December 6th 2007 December 6th 2007
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