EXHIBIT 10.10
KIWA Bio-Tech Products (Shandong) Co., Ltd.
Annual Distribution Contract
Party A: KIWA Bio-Tech Products (Shandong) Co., Ltd.
Party B: Xinjiang Rundi Bio-tech Co., Ltd.
WHEREAS:
To
safeguard the legitimate rights and interests of Party A and Party
B, in
accordance with the
Contract Law of the
People's Republic of China and other
relating laws and administrative regulations, in the principle of
reciprocity,
mutual benefit and
development, for the
subject matter that Party A authorizes
Party B to be the exclusive distributor in Xinjiang Uygur
Autonomous Region for
Party A's products, both parties agree as follows:
1. Appointment and flow direction control
1.1
Party A appoints Party B as the exclusive distributor in Xinjiang
Uygur
Autonomous Region
(hereinafter referred
to as the "Designated
Territory") for
Party A's products. Party A's products include "Yi Mu Ling" water flush
fertilizer, "Pu Guang
Fu" liquid fertilizer for plant's leaves, "Zhi Guang You"
compound microorganism
fertilizer and organic
fertilizer.
Both parties agree
that under the same
conditions for
distribution of Party
A's other
follow-up
fertilizer products in
such territory
Party A shall give
first rank to choose
Party B as the exclusive distributor and this Contract shall
apply.
1.2
Party B's appointment as the exclusive distributor for Party A's
products shall
be effective from Janurary 1, 2007 to December 31, 2009
(hereinafter referred
to as the
"Distribution Year").
If Party B reaches
the
sales objective
provided herein upon expiration of such term,
Party A shall
continue the
appointment
of Party B as the exclusive distributor in the
designated territory,
otherwise Party A may decide at its own
discretion
to
notify Party B in writing of whether to extend the appointment of
Party B as the
exclusive distributor. If Party B accepts this proposal, then the
appointment of
Party B as the exclusive distributor of Party A's products shall be
extended.
1.3
The areas for Party B or its any sub-tier distributor who purchases
the
products directly or
indirectly from Party
B to distribute Party
A's products
shall be limited to the designated territory. Except as otherwise prior
written
consent is acquired from Party A, Party B may not distribute
Party A's products
at the areas other than the designated territory, nor appoint any individual,
company or distributor outside the designated territory for any
reason or in any
manner.
1.4
If Party B or its any sub-tier distributor who purchases the products
directly or indirectly from Party B breaches the stipulations
regarding product
flow control in selling or transferring the products, Party B shall
be deemed as
breach of contract, Party A shall have the right to request Party B
to stop such
noncompliance
immediately, and
Party B shall
pay to Party A the liquidated
damages at 15% of the sales value of the nonconforming sales. If Party B fails
to stop the nonconforming conduct after being informed,
Party A shall have
the
right to unilaterally disqualify Party B as the exclusive
distributor.
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2. Sales objective
2.1
The sales objective shall mean the total value of the products
purchased by Party A in the distribution year calculated at the
actual price for
account settlement
between the parties.
The sales objective of
a distribution
year shall be RMB (pound)*50,000,000.
2.2
Party B shall reach
the annual sales
objective.
If Party B fails
to
reach 80% of the sales objective for such period of time, Party A
shall have the
right to disqualify Party B as the exclusive distributor.
3. Product pricing
3.1
Party B may execute
Party A's price list to its sub-tier distributors
and terminal customers. Party A shall have the right to adjust the
product price
system with a notice to Party B one month in advance.
3.2
Settlement
price between Party A and Party B shall be 75% of the
terminal sales price constituted by Party A.
3.3
Party B cannot
determine at its own discretion the sales price for the
sub-tier distributors,
and the retail prices
in the designated territory shall
not be reduced in any name (including sales promotion or discount) so as to
prevent unjust price competition.
4. Purchase order and delivery
4.1
Both parties agree to
determine the product family, specification,
quantity, delivery
date, arrival place for each batch of goods in purchase
order, and this Contract shall apply for other provisions. Party B shall place
purchase order in
writing ten days in
advance, and the
purchase order shall
become effective
after signed by the
duly authorized
representatives
of the
parties and affixed
with the official
seals or special
stamp dedicated for
contract of both
parties. The purchase
order shall form the
integral part of
this Contract.
4.2
Once the purchase
order is signed, either party may not alter or
rescind the purchase
order unilaterally.
If Party B requests
replacement
of
goods for the reason that different family of products are needed for
different
season, Party A shall
make replacement of
the goods, and the
additional cost
shall be borne by Party B, but no replacement may be made after one year from
the date of delivery.
4.3
Party A acknowledge
that Party A shall
ship the goods within two days
after receiving the
advance payment
specified in Clause 6.1 hereof, and shall
notify in writing Party B of the date of shipment, quantity and way
of shipment.
If for any individual
time the order of Party A's products is more than one ton
(inclusive one ton),
Party A shall be
responsible for
consigning
