Exhibit 10.1
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement (this "Agreement") is dated
November 1, 2005,
and is entered into in Zhejiang between Capital Future Development Limited,
incorporated under law
of British Virgin Islands ("Party A") and Zhejiang Yong
Xin Digital
Technology
Co., Ltd., duly established under law of People's
Republic of China,
with a registered
address at No. 315 Hu Shu Nan Rd, Gong Ye
District, Hangzhou,
China ("Party B"). Party A and Party B are
referred to
collectively in this Agreement as the "Parties."
RECITALS
(1)
Party A, a company
duly incorporated under law of British Islands, has
the expertise in the business of digital products;
(1)
Party B is a limited
company incorporated
in China, and is engaged in
the selling,
circulation
and modern logistics of 3C products
(communication
products, information
technology ("IT")
products and
digital products) in China (the "Business");
(2)
The Parties desire
that Party A provide technology consulting services
and relevant services to Party B;
(3)
The Parties are
entering into this Agreement to set forth the
terms
and conditions under which Party A shall provide consulting services
to Party B.
NOW THEREFORE, the Parties agree as follows:
1. DEFINITIONS
1.1 In this Agreement the following terms shall have the following
meanings:
"Affiliate," with
respect to any Person, shall mean any other Person that
directly or
indirectly
controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" shall mean
possession, directly or indirectly, of power to direct or cause the
direction of
<PAGE>
management or policies (whether ownership of securities or
partnership or other
ownership interests, by contract or otherwise);
"Consulting Services Fee" shall be as defined in Clause 3.1;
"Indebtedness" shall
mean, as to any Person, without duplication, (i) all
indebtedness
(including principal,
interest, fees and
charges) of such Person
for borrowed money for the deferred purchase price of property or
services, (ii)
the face amount of all
letters of credit
issued for the amount
of such Person
and all drafts drawn
thereunder, (iii) all
liabilities secured by
any Lien on
any property owned by
such person, whether
or not such
liabilities have
been
assumed by such Person, (iv) the aggregate amount required to be capitalized
under leases
under which such Person is the lessee and (v) all contingent
obligations (including, without limitation, all guarantees
to third parties) of
such Person;
"Lien" shall mean any
mortgage, pledge, hypothecation, assignment, deposit
arrangement,
encumbrance, lien
(statutory or other),
preference, priority
or
other security
agreement of any kind or nature whatsoever (including. without
limitation, any
conditional
sale or other title retention agreement, any
financing or
similar statement or notice filed under recording or notice
statute, and any
lease having substantially the same effect as any of the
foregoing);
"Person" shall mean any individual, corporation, company, voluntary
association,
partnership, joint venture, trust, unincorporated organization,
entity or other
organization or any government body;
"PRC" means the People's Republic of China;
"Services" means the
services to be provided under the Agreement by Party A
to
Party B, as more
specifically
described in Clause 2; In this Agreement a
reference to a Clause,
unless the context otherwise requires, is a reference to
a clause of this Agreement.
1.2 The headings in this Agreement shall not affect the
interpretation
of this
Agreement.
2. RETENTION AND SCOPE OF SERVICES
2.1 Party B hereby agrees to retain the services of Party A, and
Party A accepts
such appointment, to
provide to Party B services in relation to the current and
proposed operations
of Party B's business in the PRC upon the terms and
conditions of this
Agreement.
The services
subject to this
Agreement shall
include, without limitation:
(a)
General Business Operation. Advice and assistance relating to
development of technology and provision of consultancy services,
particularly as
related to travel services.
2
<PAGE>
(b)
Human Resources.
(i) Advice and
assistance in
relation to the staffing of Party B,
including assistance
in the recruitment, employment and secondment of
management personnel, administrative personnel and staff of Party
B;
(ii) Training of management, staff and administrative
personnel;
(iii) Assistance in
the development of
sound payroll
administrative
controls in Party B;
(iv) Advice and
assistance in the
relocation of management and staff
of
Party B;
(c)
Research and Development
(i) Advice and
assistance in relation to research and development of
Party B;
(ii) Advice and assistance in industry development; and
(d)
Other. Such other
advice and assistance
as may be agreed upon
by the
Parties.
2.2 Exclusive Services
Provider. During the term of this
Agreement,
Party A
shall be the exclusive
provider of the Services. Party B shall not seek or
accept similar
services from other providers unless the prior written
approval
is obtained from Party A.
2.3 Intellectual
Properties
Related to the Services. Party A shall own all
intellectual property
rights developed or discovered through research and
development, in the
course of providing Services, or derived from the provision
of the Services.
Such intellectual property rights shall include patents,
trademarks, trade
names, copyrights,
patent application
rights, copyright and
trademark application
rights, research and technical documents
and materials,
and other related intellectual property rights including the right
to license or
transfer such intellectual properties. If Party B must utilize any
intellectual
property, Party A agrees to grant an appropriate license to Party B
on terms and
conditions to be set forth in a separate agreement.
2.4 Pledge. Party B
shall permit and cause Party B's shareholders to pledge the
equity interests of
Party B to Party A for securing the Fee that should be paid
by Party B pursuant to this Agreement.
3
<PAGE>
3. PAYMENT
3.1 General.
(a)
In consideration of the Services provided by Party A hereunder,
Party B
shall pay to Party A during the term of this Agreement a consulting
services fee
(the "Consulting
Services Fee"),
payable in RMB each quarter, equal to all of
its revenue
for such quarter based on the quarterly financial statements
provided under Clause 5.1 below. Such quarterly payment shall be
made within 15
days after receipt by Party A of the financial statements
referenced above.
(b)
Party B will permit, from time to time during regular business
hours as
reasonably requested
by Party A, or its
agents or
representatives
(including
independent public
accountants,
which may be Party B's independent public
accountants), (i) to
conduct periodic
audits of books and
records of Party B,
(ii) to examine and make copies of and abstracts from all books, records and
documents (including,
without limitation, computer tapes and disks) in the
possession or under
the control of Party B (iii) to visit
the offices and
properties of Party B for the purpose of examining such
materials described in
clause (ii) above, and
(iv) to discuss
matters relating to
the performance by
Party B hereunder
with any of the officers or employees of Party B having
knowledge of such matters. Party A may exercise the audit rights
provided in the
preceding sentence at any time, provided that Party A provides ten
days written
notice to Party B specifying the scope, purpose and duration of such
audit. All
such audits shall be
conducted in such a manner as not to interfere with Party
B's normal operations.
3.2 Party B shall not be entitled to set off any amount it
may claim is owed to
it by Party A against any Consulting Services Fee payable by Party B to
Party A
unless Party B first obtains Party A's written consent.
3.3 The Consulting Services Fee shall be paid in RMB by telegraphic
transfer to
Party an Account
No______________, to
such other account or accounts as may be
specified in writing from time to time by Party A.
3.4 Should Party B fail to pay all or any part of the Consulting Service's Fee
due to Party A in RMB under this Clause 3 Within the time
limits stipulated,
Party B shall pay to Party A interest in RMB on the amount
overdue based on
the
three (3) month lending rate for RMB announced by the Bank of China on the
relevant due date.
3.5 All payments to be made by Party B hereunder shall be made free
and clear of
and without deduction
for or on account of
tax, unless Party B is
required to
make such payment subject to the deduction or withholding of
tax.
4. FURTHER TERMS OF COOPERATION
4.1 All business
revenue of Party B shall be directed in full by Party B into a
bank account(s) nominated by Party A.
4
<PAGE>
5. UNDERTAKINGS OF PARTY A
Party B hereby agrees that, during the term of the Agreement:
5.1 Information
Covenants. Party B
will furnish to Party A:
5.1.1 Preliminary Monthly Reports. Within five (5) days of the end of
each
calendar month the preliminary income statements and balance sheets of
Party B
made up to and as at the end of such calendar month, in each case prepared in
accordance with the PRC generally accepted accounting principles, consistently
applied;
5.1.2 Final
Monthly Reports. Within ten (10) days after the end
of each
calendar month,
a final report from Party B on the financial position and
results of
operations
and affairs of Party B made up to and
as at the end of
such calendar month and for the elapsed portion of the relevant
financial year,
setting forth in each
case in comparative
form figures for the
corresponding
period in the preceding financial year, in each case prepared in
accordance with
the PRC generally accepted accounting principles, consistently
applied;
5.1.3 Quarterly
Reports. As soon as available and in any event within
forty-five (45) days
after each Quarterly
Date (as defined
below), unaudited
consolidated and
consolidating
statements
of income,
retained earnings and
changes in financial
position of the Party B and its subsidiaries, if any, for
such quarterly
period and for the
period from the
beginning of the
relevant
fiscal year
to such Quarterly Date and the related consolidated and
consolidating balance
sheets as at the end
of such quarterly
period, setting
forth in each case actual versus budgeted comparisons and in comparative form
the corresponding
consolidated and consolidating figures for the corresponding
period in the preceding fiscal year, accompanied by a certificate of
the chief
financial officer
of the Party B,
which certificate shall state that said
financial statements fairly present the consolidated and
consolidating financial
condition and results of operations, as the case may be, of the Party B
and its
subsidiaries, if any,
in accordance with PRC general accepted accounting
principles applied on
a consistent basis as at the end of, and for, such period
(subject to normal
year-end audit
adjustments and the preparation of notes for
the audited financial statements);
5.1.4 Annual
Audited Accounts. Within six (6) months of the end of
the
financial year,
the annual
audited accounts of Party B to which they
relate
(setting forth in each case in comparative form the corresponding figures for
the preceding
financial year), in
each case prepared in accordance with, among
others, the PRC generally accepted accounting principles,
consistently applied;
5.1.5 Budgets. At least 90 days before the first day of each
financial year
of Party B, a
budget in form satisfactory to Party A (including budgeted
statements of income and sources and uses of cash and balance
sheets) prepared
by Party B for each of
the four financial quarters of such financial year
accompanied by the
statement of the chief
financial officer
