Distribution Agreement - Beijing Ninetowns Ports Software and Technology Co. Ltd. and Guangzhou Panyu Chengchang Trade Development Co. Ltd.
CONFIDENTIAL TREATMENT REQUESTED BY NINETOWNS DIGITAL WORLD TRADE HOLDINGS
LIMITED. THIS EXHIBIT HAS BEEN REDACTED. REDACTED MATERIAL IS MARKED WITH "*"
AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
DISTRIBUTION AGREEMENT
PARTY A: BEIJING NINETOWNS PORTS SOFTWARE AND TECHNOLOGY CO., LTD.
ADDRESS: 5TH FLOOR, UNION PLAZA, 20 CHAOWAI STREET, CHAOYANG DISTRICT,
BEIJING 100020, THE PEOPLE'S REPUBLIC OF CHINA
POSTAL CODE: 100020 TEL: 010-65887788
PARTY B: GUANGZHOU PANYU CHENGCHANG TRADE DEVELOPMENT CO., LTD.
ADDRESS: 21ST FLOOR, FRIENDSHIP CENTRE, NO. 1 FANHUA ROAD, SHIQIAO, PANYU
DISTRICT, GUANGZHOU
POSTAL CODE: 511400 TEL: 020-84818122
Pursuant to the "Contract Law of the People's Republic of China" and
related regulations and following amicable negotiations, Party A and Party B
agree that Party A shall appoint Party B to act as its distributor for sales and
related services of "iDeclare.CIQ" enterprise software (hereinafter referred to
as the "Product") in accordance with the following terms:
1) DISTRIBUTION PRODUCT: The Product was developed independently by Party A
and passed evaluation and testing by the State Administration for Quality
Supervision and Inspection and Quarantine of the PRC (the "PRC Inspections
Administration"). It includes electronic Origin Certificate processing and
electronic declaration functions.
2) DISTRIBUTION TERRITORY: Southern China Region.
3) DISTRIBUTION DURATION 2 years from the date of execution of this
agreement.
4) UNIFIED EXTERNAL MARKET PRICE: The standard price of the Product is
RMB3,000 per set. The first year standard service fee is RMB1,500 per
year.
5) OBLIGATIONS OF PARTY A
i) Party A warrants that the Product provided to Party B does have
administrative authorization from the PRC Inspections
Administration.
1
<PAGE>
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE BEEN
OMITTED
ii) Party A warrants that it shall not engage other distributors for the
Product within the distribution territory during the term of this
agreement.
iii) Party A is responsible for providing acceptable Products on time in
accordance with Party B's ordering plan.
iv) Party A has the responsibility to apply for communications accounts
for an electronic commerce platform for inspection and quarantine on
behalf of the customers of Party B.
v) Party A is responsible for providing various kinds of promotion and
training information relating to the Product.
vi) Party A is responsible for providing corresponding product and
technical training to Party B.
vii) Telephone technical support service.
6) OBLIGATIONS OF PARTY B
i) Party B is responsible for the sales, service and technical support
with respect to Party A's Product in Southern China Region.
ii) Party B warrants that, in the process of selling the Product, the
relevant state and industry laws shall be observed.
iii) Party B warrants that it shall not act as a distributor for any
other product in competition with Party A's Product in Southern
China Region during the term of this agreement.
iv) Party B warrants that all Products sold are original versions of
Party B's Products and warrants that it shall not engage in any form
of copyright piracy.
v) Party B warrants that it shall provide after-sales service and
technical support to users of the Product in accordance with the
service standards and service scope of Party A.
vi) Party B warrants that it shall pay for the Products by the
stipulated deadline.
7) PRODUCT QUOTA
Party B warrants, within two years after the execution date of this
agreement, that sales volume of the Product and related services shall be
not less than RMB50 million.
8) PRODUCT SETTLEMENT PRICE
Specific settlement prices are as follows:
i) Party B collects a one-time software and service fee of ******** for
each new customer that it develops, of which Party A receives
software fee of ******** and Party B receives service fee of
********.
ii) If Party B continues to provide service to existing customers of
Party A, it shall collect an annual service fee of ********, of
which Party A and Party B shall each receive ********** of such
service fee.
2
<PAGE>
9) SETTLEMENT PERIOD
Party A and Party B agree that the settlement period shall be three
months. In other words, by the 15th day of the fourth month after Products are
picked up or a customer executes a contract, the Product payment or service fee
for Products picked up during that month shall be transferred into the account
of Party A. The basis of the settlement shall be the number of Products
(determined by the "signed receipt") actually purchased from Party A during the
month in which the Products are picked up.
10) AMENDMENT OF AGREEMENT
When one party to the agreement requests an amendment to the agreement, it
shall inform the other party in writing. The other party should respond to the
notice within one week. Any amendment to the agreement must be in writing and
confirmed by both parties, and the amendments shall become an inseparable part
of this agreement.
11) PARTY A'S RIGHT TO UNILATERAL TERMINATION OF THE AGREEMENT
Under the following circumstances, Party A has the right to terminate this
agreement unilaterally and without assuming any liability for breach of
agreement.
i) When, during the term of the agreement and without the consent of
Party A, Party B acts as a distributor for any product that is in
competition with Party A, within the above-mentioned distribution
region.
ii) When Party B fails to settle with Party A by the stipulated deadline
and payment for the Products is overdued for more than 30 days.
iii) When Party B fails to achieve the sales volume quota for the period
specified in the agreement.
iv) When Party B, by failing to observe the relevant state and industry
laws, harms Party A's Product and reputation.
v) When Party B engages in any form of copyright piracy with respect to
Party A's Product.
vi) When Party B fails to provide after-sales service and technical
support to the customers of the Product in accordance with Party A's
service standards and service scope, which resulted in receiving
complaints by a large number of customers.
12) PARTY B'S RIGHT TO UNILATERAL TERMINATION OF THE AGREEMENT
Under the following circumstances, Party B has the right to terminate this
agreement unilaterally and without assuming any liability for breach of
agreement:
i) When, during the term of the agreement and without consent from
Party B, Party A engages a new distributor in Southern China Region.
ii) When Party A fails to provide acceptable Products in a timely manner
to Party B in accordance with Party B's ordering plan, and the
delivery time exceeds the agreed upon delivery time by more than 30
days.
3
<PAGE>
iii) When Party A fails, in accordance with stipulations of the
agreement, to apply promptly for inspection and quarantine
electronic business service platform accounts for subscribers
recruited by Party B, and it takes more than 20 days to open the
accounts after Party B applies for same.
iv) When Party A refuses to provide various kinds of Product-related
promotion and training information and corresponding product and
technical training to Party B.
13) TERMINATION OF THE AGREEMENT
This agreement shall be terminated automatically under the following
circumstances:
i) The agreement expires.
ii) When, during the term of the agreement, both parties reach a
consensus after negotiation.
iii) When one party to the agreement requests an amendment to the
agreement, but both parties fail to reach a consensus, with the
result that the agreement can no longer be performed.
14) RENEWAL OF THE AGREEMENT
Both parties hereto shall notify each other in writing 120 days prior to
the expiration of the agreement of its intention to renew. If both parties reach
a consensus, they may renew this agreement. If either party fails to notify the
other party by the deadline, such failure shall be construed as termination of
this agreement. The other party has the right to take any measures and without
assuming any liability for breach of agreement.
15) FORCE MAJEURE
Force Majeure: an event which neither party to the agreement could foresee
when the agreement was made, nor they can avoid its occurrence and overcome its
consequences.
When either party to the agreement is unable to perform the agreement as a
result of force majeure, it shall promptly notify the other party of the reasons
for its inability to perform, its need for postponed performance or for partial
performance and provide legally valid documentary proof. After the negotiations
between both parties, permit postponed performance, partial performance or
non-performance of the agreement and grant partial or full exemption from
liability of breach of agreement based on the specific circumstances. A full
exemption from liability shall not be granted if force majeure occurs after the
party concerned has delayed its performance.
16) LIABILITY FOR BREACH OF AGREEMENT
i) If this agreement can no longer be performed because of either party
to the agreement, the defaulting party shall pay a corresponding
penalty to the non-defaulting party. The amount of the penalty shall
be 10% of the contract amount.
ii) If Party B fails to settle with Party A in accordance with the
specified deadline, Party B shall pay a late penalty to Party A
based on the bank loan interest rate during the same
4
<PAGE>
period. The basis for the calculation shall be the amount of the
overdue payment and the length of time.
iii) If Party A fails to provide acceptable Products to Party B is
accordance with the specified deadline, Party A shall pay a late
penalty to Party B based on the bank loan interest rate during the
same period. The basis for the calculation shall be the settlement
amount of the past due goods and the duration of the delay.
17) DISPUTE RESOLUTION
Should a dispute arise during the performance of this agreement, both
parties should negotiate amicably. If both parties fail to reach a consensus
through negotiations, they may apply for arbitration. If one party does not
accept the result of arbitration, it may appeal to a People's Court.
18) BOTH PARTIES NEGOTIATE TO SEEK SOLUTIONS CONCERNING MATTERS NOT COVERED
HEREUNDER. SUCH SOLUTIONS SHALL TAKE THE FORM OF ATTACHMENTS TO THE
AGREEMENT, AND SHALL BE SIGNED AND CONFIRMED BY BOTH PARTIES. ATTACHMENTS
ARE INSEPARABLE PART OF THIS AGREEMENT AND HAVE THE SAME LEGAL EFFECT AS
THE AGREEMENT.
There are four identical copies of this agreement and its attachments, of
which each of the parties hereto shall keep two copies. This agreement takes
effect after being signed and sealed by both parties.
Party A : Beijing Ninetowns Ports Software Party B : Guangzhou Panyu
and Technology Co., Ltd. Chengchang Trade
Development Co., Ltd.
[Seal] [Seal]
Representative of Party A (Seal) Representative of Party B (Seal):
Date: August 15, 2003 Date: September 3, 2003
5