2010 ** --- Deer (brand)
(English Translation)
 
Memorandum of Understanding
 
Time of Negotiations: January 15, 2010 Friday
 
Place of Negotiations: **
 
Parties:
 
Party A: Guangdong Deer Consumer Products, Inc.
 
Party B: **
 
Persons in attendance:
 
Party A: Ying He (CEO), Chuanjing Zheng (Assistant to the President)
 
Party B: **
 
Contents of the Deer white-colored small appliances/** cooperation negotiation
Memorandum of Understanding:
 
In order to increase its competitiveness in the home appliances retail
chain-store industry, ** selects qualified and compatible manufacturers to form
in-depth cooperative operations. The specific contents of the cooperative
operation are as follows:
 
 
I.
Cooperative operation model

 
 
1.
Both parties use the one-step pricing model;

 
 
2.
The length of the contract is three (3) years (2010-2012). Both parties then
decide whether to renew the contract based on the circumstances of the
cooperation;

 
 
3.
Sales are on a commission basis;

 
 
4.
Accounts settlement is centrally conducted by the Parties’ respective
headquarters;

 
 
5.
Party A provides sample products. The settlement price of the sample product is
80% of the price of the supplied products;

 
 
6.
Agree to maintain the rate of damaged and faulty products under 2%.

 
 
II.
Division of the main functions and responsibilities of the Parties.

 
 
1.
Guangdong Deer Consumer Products, Inc. is responsible for:

 
i.
 
Product production, the formulation of delivery cycles and the safe execution
thereof;

 
ii.
 
Delivery of the products to each of ** distribution depots;

 
iii.
 
Support for the training of sales personnel (methods yet to be determined).

 
** Portions of this page have been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission.
 

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2.
** is systematically responsible for:

 
i.
 
Order placement;

 
ii.
 
Sales area layout;

 
iii.
 
Manufacture of display stands;

 
iv.
 
Management of sales personnel (hiring, daily management, training, wages and
evaluation);

 
v.
 
Planning and execution of sales promotion events.

 
 
3.
Both Parties are responsible for:

 
i.
 
Product selection;

 
ii.
 
Set product price.

 
 
III.
Operation categories

 
 
In 2010, the primary categories are juicers, food processors and other food
processing products; additional categories are separately determined.

 
 
IV.
Product profit margin standard

 
 
1.
Product profit margin for 2010 is no less than **% of consolidated profit;

 
 
2.
Parties will separately determine standards for 2010 [sic] and 2012.

 
 
V.
After-sales service

 
 
1.
Party A is responsible for after-sales service.

 
 
VI.
Implementation schedule of the cooperative operation project

 
Details of the cooperation workflow are to be completed by February 15, 2010;
the contract is to be signed at the same time.
 
 
Party A: Guangdong Deer Consumer Products, Inc.
Party B: **
 
Representative: /s/ Ying He
Representative: **
 
Date: 2010-01-15
Date: 2010-01-15

 
** Portions of this page have been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission.
 

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