Distribution Agreement
Exhibit
10.12
[Cautionary
Note: This Agreement has been translated into English from the original Chinese
language version.]
Party
A:
Shenzhen New Media Consulting Co., Ltd.
Party
B:
Huadao
Consulting Co., Ltd
Huadao
Consulting Co, Ltd. (“Party B”) is a corporation specialized in consultation and
management of magazine publication and distribution. During the term of this
agreement, if Party B intends to transfer all the rights and obligations under
this agreement to other related party/parties, it must inform Party A in advance
and receive written consent from Party A.
Upon
bilateral agreement, Party A appoints Party B to serve as a sole distribution
agent and consultant in the following-mentioned retail markets/regions. Both
parties shall conduct the distribution according to the following
terms..
I.
Representations
and Warranties
Both
parties have state and guarantee that they have qualification to fulfill the
terms of this agreement and such terms are in accordance with their business
scope. Accordingly, both parties shall provide the following documents for
records.
Party
A:
| 1. |
Copy
of Business License
|
| 2. |
Prove
of the ownership and rights (including the authority to sign this
agreement and fulfill the stated obligations ) related to the magazines
named “China Marketing” and “China Business & Trade” throughout the
term of this agreement
|
Party
B:
Copy
of
business License
II.
Authorized
Distribution Territories
Case
Edition of China
Marketing:
national
Sales
Edition of China
Marketing:
Shanghai, Nanjing and Beijing
Channel
Edition of China
Marketing:
Shanghai, Nanjing and Beijing
China
Business & Trade:
Shanghai
III.
Term:
The
term
of this agreement is from January 2006 to December 2006. The agreement would
be
renewed automatically if there is no opposition raised by either party at least
two months before the expiration of this agreement.
IV. Rules
of Distribution
1.
The
return rate of Case Edition of China
Marketing
is up to
25% (except airports);
2.
In
order to improve the distribution in Beijing, Shanghai and Guangzhou, the return
rates for the distribution in these three cities are flexible. However, Party
B
must guarantee that publications supposed to be distributed within these three
cities would not be delivered to other areas.
3. Domestic
Airports
Party
B
shall explore the market segment of domestic airports on best effort. The
distribution shall be conducted on the commission basis. The return rate at
the
airports counts separately from other distribution channels.
4. Special
channels
Special
channels refer to the approved special sale network (e.g. added distribution
spot or convenience stores that approved by Party A). Party B shall make the
best effort to distribute magazines through this channel.
V. Settlement
Discount
| i |
National
distribution discount (except ii-vi)
58%
|
| ii |
All
domestic airports: 50%
|
| iii |
Carrefour:
50%
|
| iv |
Ming
Jun book store inside of Shanghai subway station:
55%
|
| v |
Case
edition at Beijing Niu Mai and Niu Mai post office:
56%
|
| vi |
Guangzhou
Qian Kun Tai: 55%
|
VI. Settlement
Method, Amount and Payment
| 1. |
Settlement
Method
|
| (1) |
Party
B would be billed on the 30th
day of each month (Starting from the third time issue, the billing
date
would be advances to 24th
according to the advancement of publication date). Bills
include:
|
| · |
70%
of the total amount of delivered magazines by Party A, plus
|
| · |
30%
of the total amount as deposit for the magazines delivered in prior
90
days
|
| · |
Minus,
the total returned amount shown in Party B’s account as of the
30th
day of such month (this amount should be the updated amount of return
between last billing date and current billing
date)
|
| · |
Minus,
other adjustments such as transportation fees paid by Party B on behalf
of
Party A.
|
| (2) |
Upon
the confirmation, Party A’s tax rate is determined to be 13%. Party A
would send out the tax invoice titled “Magazine” or “Edition” value added
tax. Party B shall make the payment within 2 business days of receipt
of
such invoice.
|
VII. Order
and delivering Dates
Orders
shall be made before 26th
of each
month (Starting from the third edition, the order date shall be advanced to
20th
of each
month in correspondent to the advancement of delivering date)
Delivery
should be made before 6th
of each
month. On the date of delivery, Party A shall inform Party B in written of
the
delivery. At the same time, Party A shall provide information such as the
delivery code and the phone number for picking up the magazines. (Starting
from
the third edition, the delivery date would be advanced to 1st
of each
month).
VIII. Sales
Target
Both
parties determined the sales target that stated within this agreement. The
sale
target is only for the references propose and it is nothing related to the
terms
of reward and penalty. Upon bilateral agreement, the sales target for the term
of this agreement should be a 5% increase of sales from the previous
period.
In
order
to protect both parties’ interests, Party A shall promise to continuously
improve the quality of magazines, adopt the effective methods of promotion.
During the term of this agreement, Party A shall inform Party B if it intends
to
adjust the magazine prices and design, publish additional editions and
consolidating editions. Both parties should evaluate the market impacts of
these
changes and reach a bilateral agreement. If there is any substantial impact,
an
adjustment of sales target will be appropriate.
IX. Management
of Delivery
| 1. |
Party
A promises to select a transportation service company with good
reputation. The magazines will be delivered to the places that requested
by Party B according with the delivery documents. In case the delivery
time is changed, Party A shall inform Party B 2 days before the delivery.
If any delay, missing of magazines or damages caused by the transportation
process, Party A shall bear all such financial
losses.
|
| 2. |
Party
A shall bear the transportation expense.
|
| 3. |
Returns
and its related expense: except for Shanghai and Beijing, the expense
caused by return of over 100 copies shall be charged on local distribution
agents by Party B. Party B’s local branches shall be responsible for the
returns under 100 copies. The expense of returns from Beijing and Shanghai
shall be born by Party A.
|
X. Management
of the Return
| 1. |
The
period of return is:
|
For
the
secondary market segment, Party B starts to arrange returns within 45 days
upon
receipt of magazines and returns would be cleared within 90 days. For the
special
channel segment, Party B shall arrange the return within 90 days upon receipt
of
magazines and returns shall be cleared within 150 days.
Party
B
shall be responsible for requesting and monitoring wholesales/ retailers to
count
for
the unsold magazines every month. The deadline for account update for
each
publication shall be no later than 180 days after the delivery. No account
updates for
wholesaler/retailer are allowed any time after the deadline.
Party
B
shall provide detailed return list to Party A. Upon the receipt of such list,
Party
A
shall reply within 2 weeks. Late reply is deemed to be consent of return. The
difference
between actual return and the number of return stated on the list shall be
settled
upon bilateral agreements.
XI. Sale
reporting form
Party
B
should provide the sales reporting form to Party A on a timely basis.
Party
B
should provide the feedback of the market to Party A..
XII. Other
| 1) |
The
settlement on the agreement
termination.
|
| 1.1 |
Both
parties should estimate the return 2 months prior to the termination
of
the agreement.
|
| 1.2 |
Both
parties should adjust the return rate 190 days prior to the date of
the
last delivery.
|
2)
Confidentiality clause
Both
party A and party B promise to keep the trade secrets in connection with the
distribution confidential.
3) Liability
for breach of this agreement
| 3.1 |
This
agreement is legal enforceable after being signed by both party A
and
party B. The conforming party has the right to terminate the agreement
15
days after providing a written notice requesting the breaching party
to
cure the breach and require for compensation for losses suffered
by the
conforming party due the breach of the contract by the breaching
party.
|
| 3.2 |
The
failure to fulfill this agreement of either party due to the act
of god
would not be regarded as breach of agreement. However, such issue
should
be resolved though negotiation by both parties.
|
| 3.3 |
This
agreement is governed by the laws of PRC. All disputes between the
parties
arising out of or in connection with this agreement shall be settled
between the parties by
discussion and mutual accord. If a mutual accord cannot be reached
between
the parties, either party may submit the dispute to Shanghai Arbitral
Committee for arbitration.
|
Party
A: Shenzhen New Media Consulting Co., Ltd. China
Representative
of party A: (signature)
(Corporate
Seal)
Date:
April 3, 2006
Party
B: Huadao Consulting Co., Ltd.
Representative
of party B: (signature)
(Corporate
Seal)
Date:
April 3, 2006
