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Exhibit 10.1
 
SUPPLIER AGREEMENT
 
This Supplier Agreement ("Agreement") between Xiamen Xinyi Xiang Modern
Agriculture Development Co., Ltd and Wal-Mart (China) Investment Co., Ltd.
("Company") sets forth Supplier's qualifications and the general terms of the
business relationship between Company and Supplier. The parties agree that all
sales and deliveries of all Merchandise (as defined below) by Supplier to
Company and all Orders (as defined below) by Company will be covered by and
subject to the terms of this Agreement, the Standards for Suppliers (which is
attached and incorporated by reference) and any Order signed or initiated
(electronically or otherwise) by an Authorized Buyer (as defined below) for
Company. The execution and submission of this Agreement by the Company does not
impose upon Company any obligation to purchase Merchandise from Supplier.

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General Supplier Information

Enter the State Tax Registration Number or Business Registration Certificate
Number of the Supplier:
 
Type of Supplier (þ  if appropriate)
 
o Corporation
o Individual
o Partnership

 
þ Foreign Invested Enterprise
o State Owned Enterprise
o Other (Pls. specify)

Taxpayer category of Supplier (þ if appropriate):

þ General VAT Taxpayer
o Small Scale VAT Taxpayer
o Farm Product Producer
oIndividual

Category of Invoice issued by Supplier (þ if appropriate):
þ VAT Invoice
o General Goods Sale Invoice
o Farm Product Collection Invoice
o Freight Invoice

o Other (Pls. specify)

Note: Farm Product Collection Invoice is issued by Company.

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Supplier's Bank Account Information

/Bank Name of Supplier (Full Name): ______________________

/Bank Account Number of Supplier: __________________________

/Bank Address of Supplier: __________________________
 

 
 
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Please specify the address for the exchange of payment documents:
 
Payment documents will be returned to Supplier at Supplier's expense if
necessary:

/Mail Address of Supplier: __________________________
 
/Attn: _________________________
 
/Contact: ______________________

 
E-mail Address of Supplier:
 
Has Supplier or any of its related entities previously conducted or is
conducting business with Company? Yes _No_. If so, under which name(s) and
Supplier Number? ________________.
 
Supplier has verified that any and all of Supplier's information-specified above
and set forth in Appendix 2 are correct. If any change of such Supplier's
information occurs, Supplier shall notify Company immediately, or otherwise,
Supplier shall be responsible for all the damages, losses and costs and expenses
caused by such change of any of such Supplier's information.
 
STANDARD TERMS AND CONDITIONS

1. DEFINITIONS. As used in this Agreement or any Company issued Order, the
following capitalized words shall have the following meanings:
 
(a) "Account" shall mean any right to receive payments arising under this
Agreement.

(b) "Anticipation" shall mean the payment of obligations prior to the due date
which results in a monetary adjustment in amounts payable to Supplier.

(c) "Authorized Buyer" shall mean any General Merchandise Manager/Director,
Divisional Merchandise Manager, Buyer 1, 2 or 3 or replenishment manager
assigned to the Company category/department corresponding to the purchased
Merchandise.

(d) "Merchandise" shall mean all products, goods, materials, equipment,
articles, and tangible items supplied by Supplier to Company and all packaging,
instructions, warnings, warranties, advertising and other services included
therewith.

(e) "Electronic Data Interchange" ("EDI") shall mean the moving of information
regarding specific business processes (ordering, co-op, reporting, notice, etc.)
electronically between two or, more businesses. The information is transmitted
electronically structured according to standards mandated by Company.
 

 
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(f) "End of Month Dating" shall mean payment terms beginning at the 24th day of
the following month rather than from the receipt of merchandise, if the
merchandise is received on or after the 24th day of the month provided that the
payment day will not exceed 60 days following the date when the merchandise is
received.
 
(g) "High Risk Supplier" shall mean a Supplier identified as such by Company in
view of the nature of the Supplier's products, the severity of claims made
against Supplier's products, the frequency of claims made, past litigation
involving the Supplier's products and other factors deemed relevant by Company.
 
(h) "Order" shall mean any written or electronic purchase order issued by
Company.
 
(i) "Recall" shall mean any removal of Merchandise from the stream of commerce
initiated by Supplier, a government entity or Company.
 
(j) "Standards" shall mean the Standards for Suppliers of Wal-Mart (China)
Investment Co. Ltd. and its affiliates attached hereto as Appendix 1.

2. ORDERS; CANCELLATION. Supplier's failure to notify Company in writing of
refusing in full or partly to accept the Order three (3) days prior to the
cancellation date specified on the Order shall be deemed as Supplier's implied
acceptance in full to all the contents of the Order. Supplier may ship only
after receipt of an Order. The Purchase Order may be placed, cancelled and
accepted through fax, telefax, EDI, email and other forms which sufficiently
represent the content specified in the Purchase Order. Acceptance of an Order
may be made only by shipment of the Merchandise in accordance herewith. If
necessary, Company may at its sole discretion require Supplier to confirm the
Order in writing. Acceptance is expressly limited to all of the terms and
conditions of such Order, including, all shipping, routing and billing
instructions and all attachments and supplemental instructions delivered
therewith. Supplier's invoice, confirmation memorandum or other writing may not
vary the terms of any Order. Supplier's failure to comply with one or more terms
of an Order shall constitute an event of default and shall be grounds for the
exercise by Company of any of the remedies provided for in this Agreement or by
applicable law. Projections, past purchasing history and representations about
quantities to be purchased are not binding, and Company shall not be liable for
any act or expenditure (including but not limited to expenditures for equipment,
materials, packaging or other capital expenditures) by Supplier in reliance on
them. Company may cancel all or any part of an Order at any time prior to
shipment.
 
 
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3. SUPPLIER FINANCIAL INFORMATION AND OTHER INFORMATION; SALES TO COMPANY. If
needed and requested by Company at its sole discretion, Supplier shall submit to
Company with this Agreement one of the following: (1) a complete set of audited
current financial statements, or (2) if publicly held, Supplier's most recent
annual report to shareholders and management proxy information. If Company's
purchases from Supplier are anticipated by Supplier to constitute twenty percent
(20%) or more of Supplier's gross annual sales on a calendar year basis,
Supplier agrees to notify Company of this fact, in writing, within thirty (30)
days of Supplier becoming aware of such possibility. Upon the request of
Company, Supplier shall provide Company with a certified copy of its business
license issued by the State Administration of Industry and Commerce, the credit
good standing certificate issued by the depository bank of Supplier, and the
power of attorney or certificate of legal representative in the form accepted by
Company to authorize the signatory person to sign this Agreement on behalf of
Supplier, and the copy of tax registration certificate issued by competent tax
bureau, certificate of Supplier's general VAT payer (if applicable) and other
permits or, licenses issued by relevant competent governmental authorities. If
such materials mentioned above have expired or renewed, Supplier shall submit
the latest ones to Company within thirty (30) days upon occurrence of such
expiration or renewal. Failing that, Supplier commits a material breach, and
Company is entitled to full compensation from-Supplier subject to Article 16 and
Article 5 hereof or take other reasonable remedies.

During the term of this Agreement, Supplier shall give prior written notice to
Company upon occurrence of merger, division, or reconstruction of Supplier or of
any event to that effect. Supplier is obligated to provide Company with the
relevant documents in a timely manner regarding newly founded or surviving
company after merger, division, or reconstruction as stated, in this article. If
Supplier's delay or failing to provide such documents to Company causes Company
any losses or damages, Supplier or its successors who undertake its rights and
obligations hereunder shall compensate Company for such losses or damages.
 
4. PAYMENT TERMS; COD; CBD; ANTICIPATION. Payment terms shall date from
Company's receipt of the Merchandise at the place designated by the Order.
Invoices shall be delivered by post or by hand to Company within one business
day following the shipment of Merchandise. If Supplier fails to deliver the
invoices to Company timely within the time limit above, Supplier shall bear all
the consequences arising from the delay in payment to Supplier. Supplier agrees
to the payment terms set forth in Appendix 2. If Supplier selects End of Month
Dating on Appendix 2 hereto, Merchandise received after the twenty-fourth (24th)
of any month shall be payable as if received on the first day of the following
month provided that the payment day will not exceed sixty (60) days following
the date when the merchandise is received by Company. Any handling charges by
banks arising out of the payment made by Company to Supplier may be directly
deducted or offset by Company pursuant to Section 5 hereof or directly deduct
from payment of goods by a bank entrusted by Company when such payment is paid.
COD (Cash on Delivery) means that Company makes payment upon delivery of
Merchandise from the vendor. CBD (Cash before Delivery) means that Company makes
payment before delivery -of Merchandise from the vendor. Anticipation may be
taken upon the mutual consent of the parties.
 
Supplier agrees to provide original certificates of receipt along with valid
invoices. In the event that original certificates of receipt are lost, Company
shall be entitled to suspend temporarily any payment due under the Order and
original certificates of receipt until the date where both parties re-confirm
the Order and original certificates of receipt in writing. Upon the said
re-confirmation, Company will make payments to Supplier according to Company's
finance arrangement on the payment day specified in the section of Payment Terms
of Appendix 2 here to after the parties' reconfirmation of the Order and
original certificates of receipt in writing. Supplier agrees that all invoices
or certificates of receipt short of requirements specified in this Agreement
will be returned to Supplier and Supplier shall bear all losses incurred thereof
to Company.
 
 
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5. SETOFF; RESERVATION OF ACCOUNT; CREDIT BALANCE; PAYMENT ERRORS. Company may
set off against amounts payable under any Order all present and future
indebtedness of Supplier to Company arising from this or any other transaction
whether or not related hereto with prior notice, and may also, for the benefit
of and on behalf of its affiliates, with prior notice to Supplier, set off
against amounts payable under any Order all present and future indebtedness of
Supplier to Company's affiliates arising from this or any other transaction
whether or not related hereto. If Company determines that Supplier's performance
under an Order and/or this Agreement is likely to be impaired, Company may
establish a reserve on Supplier's Account to satisfy Supplier's actual or
anticipated obligations to Company arising from any such Order or this
Agreement, by withholding payment of Supplier's invoices. Supplier agrees that
any credit balance of Company will be paid by check or bank transfer to Company
within fourteen (14) days upon written request. If Supplier fails to make full
payment of the credit balance of Company to Company within the fourteen (14)
days following such request, Company shall have the right to charge an interest
on such unpaid credit balance at an annual rate equal to a rate that is three
hundred base points above the saving account interest rate of Bank of China
starting from the fifteenth (15th) day following such request until the full
payment of credit balance and interests to Company. Company may also deduct any
and all credit balance of Company from Company's next and/or future payments to
Supplier. Supplier agrees that, if Company incorrectly pays an invoice which
results in the Supplier having received undue funds, Supplier will promptly
notify Company. Company, upon receipt of proper notification, can at its sole
discretion determine if the amount owed to Company will be deducted from the
next remittance(s) (including the remittance under any posterior Orders) or
request Supplier to pay such undue funds back to Company by check or by bank
transfer.

6. SHIPPING TERMS. (a) Subject to Company's written consent, Supplier may make
different arrangement on shipment and freight. (b) Supplier agrees to pay
freight for all Merchandises which are either returned or mis-ships, or
defective in quality or right. (c) All freights occurred prior to delivery to
designated location specified in the Order shall be borne by Supplier.

Each Order will show a routing, which is determined by Company. Supplier is
liable for the excess transportation cost if the designated routing is not
followed. If Supplier has a question concerning the routing selected, Supplier
must call Company's Logistics Department before releasing the shipment Under any
circumstance, even if certain shipping instructions in some respects are not
specified on the Order, Supplier shall conduct the shipping pursuant to, at
least, the normal and appropriate shipping standards on such aspects in the
relevant industry instead of in any way at Supplier's will. Any additional
addresses added by Company for acceptance of Merchandise shall become effective
upon notice in writing by Company to Supplier.

Supplier shall deliver merchandise at the time and place set forth in the Order.
Merchandise shall be deemed as delivered when it arrives at the destination
specified in the Order and accepted by Company by signature. Any risk incurred
in the course of transportation, loading and unloading shall be borne by
Supplier. No freight charges are to be added to invoices.

If Supplier appoints to deliver merchandise to Distribution Center but fails to
deliver merchandise at the time of appointment, and Company does not cancel
relevant Order, Supplier shall pay to Company a penalty of RMB500.00 per
occurrence. The exercise of the foresaid remedy does not tamper with Company's
right to claim to Supplier for other liabilities according to other provisions
hereof.
 
In the event that Supplier entrusts a third party to deliver merchandise with
the freight to be borne by Company, Supplier shall warrant that such third party
can provide legal and valid freight invoice. Otherwise, Supplier shall bear the
joint and separate liability together with the third party for the damages
suffered by the Company herefrom, and Company may, at its discretion, deduct the
compensation for the damages of the Company from the payment due to Company
according to Article 5 hereof.
 
 
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The personnel of Supplier and the people who deliver merchandise on behalf of
Supplier shall fully comply with the relevant laws and regulations in the
process of their delivery. Supplier shall be jointly liable for any personal
injuries, property damages, disputes, losses, fines or other legal liabilities
caused to Company or Company's personnel, Company's affiliates or personnel of
such affiliates or any third parties by any action of the personnel of Supplier
or by the people who delivers merchandise on behalf of Supplier. In the event
that any personnel of Supplier or any person who delivers merchandise on behalf
of Supplier commits any improper acts, including but not limited to any of the
following acts, at Company, Company's affiliate or any store owned by Company or
Company's affiliates during the process of delivery, Supplier shall immediately
remove such person or such delivery worker from the assignment of delivery to
Company and shall pay a breach fee in the amount of RMB 5,000 Yuan per
occurrence to Company and shall compensate the party who suffered damages for
all losses suffered:
 
(1) Steal properties of Wal-Mart stores such as cash, commodities, gifts and
self-use articles;
 
(2) Steal properties of customers, colleagues or employees of Wal-Mart;
 
(3) Eat foodstuff of Wal-Mart stores without permission;
 
(4) Use, eat or distribute merchandise of WAL-Mart stores as sales promotion
goods;
 
(5) Throw away any merchandise of Wal-Mart stores that can be returned or
exchanged;
 
(6) Replace the bar code or price labels of merchandise of Wal-Mart stores
without proper authorization in order to gain the price difference; or, in
collusion with the deliverymen, modify Orders, or delivery documents or commit
other kind of frauds.
 
7. NOTICE REGARDING ASSIGNMENT OF ACCOUNTS; ACCOUNT DISPUTES. Supplier shall not
assign, transfer or factor its any part or whole Account under the Agreement to
any third party without the prior written consent of Company affixed with the
official seal of Company. Any assignment, transfer or factoring not in
compliance with the stipulation in the immediately preceding sentence is
invalid. Even if Supplier assigns, transfers or factors its Account under this
Agreement with the prior written consent of Company under the official seal of
Company such assignment, transfer or factoring of any Account hereunder shall
not affect Company's rights set forth in Section 5 of this Agreement. Supplier
shall defend, indemnify and hold Company harmless from any and all lawsuits,
claims, demands, actions, damages (including reasonable attorney fees, court
costs, obligations, liabilities or liens) arising from or related to the
assignment, transfer or factoring of its Account.

Notwithstanding any assignment, transfer or factoring by Supplier of its any
part to whole Account under this Agreement, any dispute or any other
circumstance, Company reserves the right to remit payment to Supplier. The
parties agree that Company shall not be liable for any damages or losses
incurred by Supplier and/or the assignee, transferee and/or factoring bank of
Supplier in connection with any such remittance of the payments by Company to
Supplier.
 
 
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Supplier agrees to provide Company with written notice of an assignment,
factoring, or other transfer of its Account to receive payments arising under
this Agreement thirty (30) days prior to such assignment, factoring or other
transfer taking legal effect. Such written notice shall include the name and
address of assignee/ transferee, name of bank, bank account number, the date the
assignment is begin, and terms of the assignment, and shall be considered
delivered upon receipt of such written notice by Company. During the term of
this Agreement, Supplier may have only one assignment, transfer or factoring of
its Account. No multiple assignments by the Supplier shall be allowed unless
Company specifically agrees so in writing.
 
Company's obligation to pay Supplier the relevant Account shall be released upon
its payments to the assignee designed by Supplier. Supplier also releases and
waives any right, claim or action against Company for amounts due and owing
Under this Agreement where Supplier has not compiled with the above requirements
of this section, and Supplier shall also compensate Company for any damage
caused by Supplier's incompliance with the above requirements of this section.
 
8. TAXES. The prices set forth in any Order are deemed to include all taxes
exclusive of VAT.
 
In the event that Supplier fails to provide proper invoices to Company in
accordance with the requirements hereunder in a timely manner or any invoices
provided to Company by Supplier are invalid, Company shall have the right to
suspend payment and to require Supplier to continue to provide legal, effective
and proper invoices. In the event that Supplier fails to provide proper invoice
again, or that any improper and/or invalid invoices issued by Supplier cause
Company any damages and losses, Company shall be entitled to be compensated by
Supplier and to resort to any other remedies available under this Agreement or
the applicable law. Supplier further agrees and acknowledges that Company is
entitled at its own discretion, to deduct said value according to Section 5
hereof.
 
 
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9. PRICE PROTECTION; PRICE GUARANTEE AND NOTICE OF PRICE INCREASES. Supplier
guarantees that it shall offer the best prices and most favorable terms to
Company for its Merchandise and it further guarantees its prices against
manufacturer's or Supplier's own price decline. If Supplier reduces its price on
any Merchandise sold to Company; which Merchandise has not yet been delivered to
Company by Supplier or, if consistent with Supplier's practice, which
Merchandise is currently in Company's inventory (including Merchandise on hand,
in warehouses and in transit), Supplier shall offer such reduced prices to
Company for such Merchandise and, if Company has paid for such Merchandise,
Supplier shall at Company's discretion either refund an amount or give Company a
credit equal to the price difference for such Merchandise, multiplied by the
units of such Merchandise to be delivered by Supplier and/or currently in
Company's inventory. For all Merchandise not yet shipped to Company, Supplier
agrees to meet the price of any of its competitors selling comparable
merchandise. If a court, regulatory agency or other government entity with
jurisdiction finds that the prices on an Order are in excess of that allowed by
any law or regulation of any governmental agency, the prices shall be
automatically revised to equal a price which is not in violation of said law or
regulation. If Company shall have made payment before it is determined that
there has been a violation of this section, Supplier shall promptly refund an
amount of money equal to the difference between the price paid for the
Merchandise and-the price which is not in violation of this section. If
contemporaneously with Supplier's sale of Merchandise to the Company, Supplier
sells or offers to any competitor of Company any merchandise of like grade and
quality at lower prices and/or on terms more favorable than those stated on the
Order, the prices and/or terms of the Order shall be deemed automatically
'revised to equal the lowest prices and most favorable terms at which Supplier
shall have sold or shall have offered such merchandise and payment shall be made
accordingly, If Company shall become entitled to such lower prices, but shall
have made payment at any prices in excess thereof, Supplier shall promptly
refund the difference in price to Company. If there is a price increase,
Supplier shall give Company written notice of any such increase at least thirty
(30) days prior to the effective date of the increase. For fresh food and other
merchandises liable to decay or deterioration, Supplier agrees to provide
Company, at least seven (7) days written notice prior to any price increase. Any
price increase shall be effective after it is verified and consented in writing
by Company in advance.

10. MERCHANDISE RETURNED AND SAMPLE. Company may unconditionally return any
Merchandise with defect in quality or right (including the defects of UPC/EAN),
or unsatisfactory sale records (i.e. non-sale item within five (5) weeks). For
Merchandise returned by customers .or Company or its Subsidiaries or Affiliates,
Supplier agrees its choices in and applicable terms and conditions of Appendix 2
hereunder. Company has no obligation to pay for any sample merchandises.
However, any sample merchandise provided by Supplier and placed at any premises
of Company or its Subsidiaries or Affiliates is the property of Company except
if Supplier reserves the proprietary right of the sample merchandise prior to
providing it to Company. If Supplier reserves the proprietary right of the
sample merchandises, Supplier shall pick up these sample merchandises at the
premises of Company or its Subsidiaries or Affiliates where such merchandises
are plated within ninety (90) days following the provision to Company.
 
Notwithstanding the foregoing, in the event of defect/return discount,
maintenance service or goods exchange offered by Supplier to Company, Company
will not file a claim for returning Merchandise.
 
11. SUPPLIER EDI RESPONSIBILITIES.
 
(a) Supplier shall electronically receive Orders and/or other trade documents
via EDI unless otherwise agreed to by Company in writing.
 
(b) Supplier shall assure that access by its employees to the EDI interchange is
restricted by password to those persons-authorized to contractually bind
Supplier.

(c) Supplier's use of the EDI interchange acknowledges Supplier's review and
acceptance of the terms, requirements and operational procedures for using the
EDI system to trade documents electronically.

(d) Supplier will establish a user. I.D. to identify itself, and the presence of
this user I.D. in the EDI interchange will be sufficient to verify the source of
the data and the authenticity of the document.
 
 
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(e) Documents containing the user I.D. will constitute a signed writing, and
neither party shall contest the validity or enforceability of the document on
the basis of lack of a signature or sufficient identification of the parties.
 
(f) EDI documents or printouts thereof shall constitute originals.
 
(g) EDI documents will be retained by both Company and Supplier in a form that
is accessible and reproducible.
 
(h) If Company agrees to waive the EDI requirements of this section of this
Agreement, Orders may be sent via overnight mail at Supplier's expense.
 
In accordance with the Retail Link Sub-licensing Agreement between the parties
hereto, Supplier will appoint one person as a Technical Site Administrator
("TSA"). The TSA will be responsible to terminate a password in the event of an
employee of Supplier with Retail Link® access leaving Supplier's employment, or
in the event of a breach or potential breach of Retail Link's® access and/or
confidentiality. TSA will also notify Company immediately in those instances.
Supplier will not permit any third party to use RETAIL LINK®.

Supplier is voluntarily bound by this provision and willingly agrees to assume
all risks involving a breach of RETAIL LINK'S® accessibility and/or
confidentiality. TSA will be responsible for maintaining site contact
information within the RETAIL LINK® system as required by Company. This will
include, but not be limited to name, address, phone number, E-mail address of
the Chief Financial Officer, Chief Logistic Manager, Chief Executive Officer,
and TSA. Supplier will ensure that its employees-with authorization to access
the RETAIL LINK will not share passwords with any other person, whether
employees of Supplier or not TSA will immediately notify Company if an employee
with authorization to access the RETAIL LINK is sharing their password and will
terminate that person's password.
 
12. PURCHASE COSTS AND CONDITIONS. Supplier is responsible for verifying the
accuracy of costs, discounts, allowances and all other terms of sale on all
Orders. If incorrect information exists, Supplier shall notify Company not less
than twenty-four (24) hours prior to shipment. If a change is necessary in order
to correct the incorrect information, no shipment is to commence without written
confirmation of the change from an authorized member of Company's merchandising
department If Merchandise ships prior to discovery of an error on the Order, the
parties shall confer within forty-eight (48) hours of such discovery to
determine the actions to be taken regarding the erroneous Order.

13. SHIPPER LOAD AND COUNT RESPONSIBILITIES. Supplier who is shipping a full
truckload collect, or full truckload under Company contra to Company will be
responsible for monitoring its shipping process. Supplier is required to count,
close the trailer, seal it with a Supplier-provided seal, and document the seal
number on all copies of the Bill of Lading/Consignment Note. If Supplier fails
to count, or fails to seal the trailer, or fails to reference and identify the
seal on all copies of the Bill of Lading/Consignment Note, and shortages occur,
Supplier shall be liable for such shortage. The Shipper expressly agrees that
the contractual. provision herein shall supersede any contrary Bill of
Lading/Consignment Note term, clause, notation, other provision, or any other
writing.
 

 
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14. DELIVERY TIME. The time specified in an order for shipment of merchandise is
of the essence of this agreement and if such merchandise is not shipped within
the delivery time specified in and order, Company reserves the right, at its
option and without limitation, to cancel the order and/or reject and any
merchandise delivered after the time specified, and/or to hold Supplier liable
for a breach fee and calculated at __ % of the total price for the merchandise
to be delivered under the order. If the damage sustained by company is a result
of Supplier's willful or negligent failure to perform, and the actual damages
exceed the breach fee above calculated, Supplier shall be required to pay the
actual damages in lieu of the breach fee. In addition to the aforementioned
remedy, Company may exercise any other remedies provided for in this Agreement
or provided by applicable law. Notwithstanding Company's right to cancel
shipment, or to reject or revoke acceptance of Merchandise Supplier failed to
ship according to the delivery time in an Order, Supplier agrees to inform
Company immediately of any actual or anticipated failure to ship all or any part
of an Order or the exact Merchandise called for in an Order on the shipment date
specified and inform Company of the name and specifications of the undeliverable
Merchandise. Acceptance of any Merchandise shipped after the specified shipment
date shall not be construed as a waiver of any of Company's rights or remedies
resulting from the late shipment or delivery of Supplier.
 
15. REPRESENTATIONS, WARRANTIES AND GUARANTEES. By acceptance of an Order,
Supplier represents, warrants and guarantees that:
 
(a) The Merchandise will be new .and not used,. remanufactured, reconditioned
or. refurbished, and will comply with all specifications contained in such Order
and will be of equal or better quality as all samples delivered to Company;
 
(b) The Merchandise is genuine and is not counterfeit, adulterated, misbranded,
falsely labeled or advertised or falsely invoiced within the meaning of any
applicable laws or regulations;
 
(c) The Merchandise has been labeled, advertised and invoiced in accordance with
the requirements of all applicable laws or regulations, and the sale of the
Merchandise by Company does not and will not violate any such laws;
 
(d) Reasonable and representative tests made in accordance with the requirements
of all applicable laws, regulations, statutes and industrial standards show that
the Merchandise is not so highly, flammable as to be dangerous when worn by
individuals;
 
(e) The content of the label and the way of fixing the label for Merchandise
meet the requirements of all applicable laws, rules and regulations;
 
(f) The Merchandise shall be delivered in good and undamaged condition and
shall, when delivered, be merchantable and fit and safe for the purposes for
which the same are intended to be used, including but not limited to consumer
use;
 
(g) The Merchandise does not infringe upon or violate any patent, copyright,
trademark, trade name, trade dress, trade secret or, without limitation, any
other rights belonging to others, and all royalties owed by Supplier, if any,
have been paid to the appropriate licensor;
 
 
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(h) All weights, measures, sizes, legends or descriptions printed, stamped,
attached or otherwise indicated with regard to the Merchandise are true and
correct, and conform and comply with all applicable laws, rules, regulations,
ordinances, codes and/or standards relating to said Merchandise;
 
(i) The Merchandise is not in violation of any other laws, ordinances, statutes,
rules or regulations of the People's Republic of China or any of its local
government or any subdivision or agency thereof, including but not limited to
all laws and regulations relating to health, safety, environment, serial and
identification numbers, labeling and country of origin designation, toxic
substances, and such Merchandise or the sale thereof by Company do not and will
not violate any such laws;
 
(j) All Merchandise shall have a Supplier-.assigned ENA/UPC number that complies
with Company's ENA/UPC requirements, as amended from time to time;
 
(k) There is no other impediment or restriction, legal or otherwise, that
limits, prohibits or prevents Supplier from selling and delivering the
Merchandise to Company or limits, prohibits or prevents Company from reselling
the Merchandise to its customers;
 
(l) The Merchandise is mined, produced, manufactured, assembled, packaged and
changed for place of manufacture in compliance with the Order, Standards and all
applicable laws and regulations;
 
(m)The Merchandise is not transshipped for the purpose of mislabeling, evading
quota or country of origin restrictions or avoiding compliance with the Order,
Standards and applicable laws and regulations;
 
(n) the Merchandises conform to and are manufactured or produced in accordance
with the Merchandise Presentation Sheet submitted to and accepted by Company;
and
 
(o) Supplier's sale of Merchandises to Company pursuant to this Agreement and
the Order will not be cancelled by any third party.

It shall be within the sole discretion of Company to determine if Supplier has
breached the above-mentioned representations, warranties and guarantees. In
addition to the representations, warranties and guarantees contained in this
paragraph, all other representations, warranties and guarantees provided by law,
including but not limited to any warranties provided by the Contract Law and the
Law for Security Interest of the People's Republic of China, are specifically
incorporated herein. Nothing contained in this Agreement or an Order shall be
deemed a waiver of any representations, warranties or guarantees implied by law.

16. INDEMNIFICATION. Supplier shall protect, defend, hold harmless and indemnify
Company, including its officers, directors, employees and agents, from and
against any and all lawsuits, claims, demands, actions, liabilities, losses,
damages, costs and expenses (including attorneys' fees and court costs),
regardless of the cause or alleged cause thereof, and regardless of whether such
matters are groundless, fraudulent or false, arising out of any actual or
alleged:
 
 
 
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(a) Misappropriation or infringement of any patent, trademark, trade dress,
trade secret, copyright or other right relating to any Merchandise;
 
(b) Death of or injury to any person, damage to any property, or any other
damage or loss, by whomsoever suffered, resulting or claimed to result in whole
or in part from any actual or alleged use of or latent or patent defect in, such
Merchandise, including but not limited to (i) any actual or alleged failure to
provide adequate warnings, labeling or instructions, (ii).any actual or alleged
improper construction or design of said Merchandise, or (iii) any actual or
alleged failure of said merchandise to comply with specifications or with any
express or implied warranties of Supplier;
 
(c) Violation of any law, statute, ordinance, governmental administrative order,
rule or regulation relating to the Merchandise, or to any of its components or
ingredients, or to its manufacture, shipment, labeling, use or sale, or to any
failure to provide necessary certification;
 
(d) Act, activity or omission of Supplier or any of its employees,
representatives or agents, including but not limited to activities on Company's
premises and the use of any vehicle, equipment, fixture or material of Supplier
in connection with any sale to or service for the Company;
 
(e) Any installation by Supplier of Merchandise covered by this Agreement; and
 
(f) Supervision and inspection taken by competent governmental agencies and
their authorized organizations over Supplier or the Merchandise.
 
Supplier shall promptly notify Company of the assertion, filing or service of
any lawsuit, claim, demand, action, liability or other matter that is or may be
covered by this indemnity, and. shall immediately take such action as may be
necessary or appropriate to protect the interests of Company, its officers,
directors, employees and agents. Any and all counsel selected or provided by
Supplier to represent or defend Company or any of its officers, directors,
employees or agents shall accept and acknowledge receipt of Company's Indemnity
Counsel Guidelines, and shall conduct such representation or defense strictly in
accordance with such Guidelines. If Company in its sole discretion shall
determine that such counsel has not done so, or appears unwilling or unable to.
do so, Company may replace such counsel with other-counsel of Company's own
choosing. In such event, any and all fees and expenses of Company's new counsel,
together with any and all expenses or costs incurred on account of the change of
counsel, shall be paid or reimbursed by Supplier as part of its indemnity
obligation hereunder. Company shall at all times have the right to direct the
defense of, and to accept or reject any offer to compromise or settle, any
lawsuit, claim, demand or liability asserted against Company or any of its
officers, directors, employees or agents. The duties and obligations of Supplier
created hereby shall not be affected or limited in any way by Company's
extension of express or implied warranties to its customers and shall also
survive acceptance of the Merchandise and payment by Company.
 
17. RECALLS. If Merchandise is the subject of a Recall, whether initiated by
Supplier, Company or a government entity (including the issuance of safety
notices), Supplier shall be responsible for all matters and costs associated
with the Recall, including but not limited to:
 
 
 
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(a) Consumer notification and contact;

(b) All expenses and losses incurred by Company in connection with such Recall
(and where applicable, any products with which the Recalled Merchandise has been
packaged, consolidated or commingled), including but not limited to refunds to
customers, lost profits, transportation costs and all other costs associated
therewith; and

(c) Initial contact and reporting of the Recall to any government agency having
jurisdiction over the affected Merchandise.

If a government agency initiates any inquiry or investigation relating to the
Merchandise or similar goods manufactured or supplied by Supplier, Supplier
shall notify Company immediately thereof and take reasonable steps to resolve
the matter without exposing Company to any liability or risk.

18. LIMITATION OF DAMAGES. In no event shall Company be liable for any punitive,
special, incidental or consequential damages of any kind (including but not
limited to loss of profits, business revenues, business interruption and the
like), arising from or relating to the relationship between Supplier and
Company, including all prior dealings and agreements, or the conduct of business
under or breach of this Agreement or any Order, Company's cancellation of any
Order or Orders or the termination of -business relations with Supplier,
regardless of whether the claim under which such damages are sought is based
upon breach of warranty, breach of contract, negligence, tort, strict liability,
statute, regulation or any other legal theory or law, even if Company has been
advised by Supplier of the possibility of such damages.

19. REMEDIES. Supplier's. failure to comply with any of the terms and conditions
of this Agreement or any Order or any guaranty or warranty herein shall be
grounds for the exercise by Company of any one or more of the following
remedies:
 
(a) Cancellation of all or any part of any undelivered Order without notice,
including but not limited to the balance of any remaining installments on a
multiple shipment Order;

(b) Rejection (or revocation of acceptance) of all or any part of any delivered
shipment. Upon rejection or revocation of acceptance of any part of or all of a
shipment, Company may return the Merchandise or hold it at Supplier's risk and
expense. Payment of any invoice shall not limit Company's • right to reject or
revoke acceptance. Company's right to reject and return or hold Merchandise at
Supplier's expense and risk shall also extend to Merchandise which is returned
by Company's customers. Company may, at its option; require Supplier to grant a
full refund or credit to Company of the price in the P.O. for any such item in
lieu of replacement with respect to any item. Company shall be under no duty to
inspect the Merchandise, and notice to Supplier of rejection shall be deemed
given within a reasonable time if given within a reasonable time after notice of
defects or deficiencies has been given to Company by its customers. In respect
of any Merchandise rejected (or acceptance revoked) by Company, there shall be
charged to Supplier all expenses incurred by Company in (i) unpacking,
examining, repacking and storing such Merchandise (it being agreed that in the
absence of proof of a higher expense that the  Company shall claim an allowance
for each rejection or revocation of acceptance at the rate of 10% of the price
for each rejection or revocation of acceptance made by Company) and (ii) landing
and reshipping such Merchandise. Unless Company otherwise agrees in writing,
Supplier shall not have the right to make a conforming delivery within the
contract time after such rejection or revocation of acceptance;
 

 
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(c) Termination of all current and future business relationships;

(d) Request by Company for Supplier to pay a breach fee at twenty percent (20%)
of the price in the Order. For payment of the breaching fee, Company can choose
from the following choices and notify Supplier: (1) Supplier shall pay Company
the total amount of the breach fee immediately upon its receipt of notice from
Company, or (2) Company can deduct the amount of the breach fee from any amount
due and payable to Supplier. Where the losses and damages caused to Company by
Supplier's Default exceeds the amount of the breaching fee calculated according
to the above provision, Supplier shall pay Company the full amount of the losses
and damages so suffered by Company in lieu of the breach fee.
 
(e) Recovery from Supplier of any damages sustained by Company as a result of
Supplier's breach or default; and
 
(f) Buyer's remedies under all applicable law.
 
These remedies are not exclusive and are in addition to all other remedies
available to Company at law.
 
20. INSURANCE REQUIREMENTS. Supplier is required to obtain and maintain the
following insurance coverage from an insurance company acceptable to Company in
the amounts and with the conditions listed below:
 
a) Product Liability and Public Liability (occurrence, not claims-made form),
with Company named as Additional Insured as evidenced by attached endorsement or
blanket additional insured coverage provided by the policy (waiver of
subrogation where permitted by laws). Policy shall be occurrence based with
limits of no less than RMB 8,000,000 per occurrence, without any aggregate
limits or RMB 40,000,000 in the aggregate during the policy term. High Risk
Suppliers (as defined by Company) shall maintain policy limits of not less than
RMB 20,000,0000 per occurrence without any aggregate limits or RMB 80,000,000 in
the aggregate during the policy term.
 
b) Social Insurance (including but not limited to pension insurance, medical
insurance, occupational insurance and unemployment insurance) or Employer's
Liability Insurance (a waiver of subrogation where permitted by law) for a
Supplier whose employees will be entering Company's premises, with RMB 8,000,000
in employers' liability coverage and a waiver of subrogation where Permitted By
Law.
 
c) Automobile Coverage, with Company named as Additional Insured as evidenced by
attached endorsement or blanket additional insured coverage provided by the
policy, for a Supplier whose employees or agents will be driving on Company's
premises or making delivery to Company's premises shall be occurrence based with
limits of no less than RMB 200,000 per occurrence.
 
 
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d) Supplier shall provide at least sixty (60) days written notice to the Company
prior to any cancellation of and/or any change to any policy of insurance
maintained hereunder, and each such policy shall obligate the insurer to provide
at least sixty (60) days' written notice to Company in advance of any
contemplated cancellation or termination thereof or any change hereto.
 
e) Supplier's insurance shall be considered primary, non-contributory and not
excess coverage.

 
·
The Certificate of Insurance must be valid at the time of shipment. Company
reserves the right to require the complete documents of all required insurance
policies from Supplier at any time.

 
·
Please direct any questions regarding your insurance to Government Affairs
Department at 0755-21511159.

 
Supplier contact for product liability claims:
 
Name:
 
Address:
 
Carrier:
 
 
21. Confidentiality. Supplier hereto acknowledges that during the term of this
Agreement it may receive certain Company's Confidential Information. Except as
expressly set forth herein, Supplier agrees that it will keep confidential and
will not use or disclose (or permit any third Party to use or disclose) to any
third party any or all Company's Confidential Information. Supplier shall use
its best efforts to protect the secrecy of and avoid the discloSure and
unauthorized use of Company's Confidential Information. In preserving the
confidence of Company's Confidential Information, Supplier shall use the same
standard of care that it would use to secure and safeguard its own Confidential
Information, but in no event less than reasonable care. Company shall, at its
own expense, (a) immediately notify Company of any unauthorized possession, use
or knowledge, or attempt thereof, of Company's Confidential Information by any
third party; (b) promptly furnish to Company full details of the unauthorized
possession, use or knowledge or attempt thereof, and use reasonable-efforts to
assist Company in investigating or preventing the recurrence of any unauthorized
possession, use or knowledge or attempt thereof, of Company's Confidential
Information; and (c) promptly use all reasonable efforts to prevent a recurrence
of any unauthorized possession, use or knowledge of Company's Confidential
Information.
 
 
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For the purpose of this Agreement, "Confidential Information" shall mean (i)
information from Company received by Supplier or Supplier's employees or agents
that that (A) derives independent economic value, actual or potential, from not
being generally known to the public or to any other third party who can obtain
economic value from its disclosure or use, and (B) is the subject of efforts by
Company that are reasonable under the circumstances to maintain its secrecy;
(ii) any information (A) unique to Company that has a significant business
purpose and is not known or generally available from sources outside of Company
or typical of industry practice, or (B) the disclosure of which would have a
material adverse effect on any of the businesses of Company; (iii) any
Information that is designated in writing to be confidential or proprietary, or
if given orally, is designated at the time of disclosure as being disclosed as
confidential or proprietary, or that reasonably could be considered of a
proprietary or confidential nature; or (iv) any Information that is required by
law or by Company's internal policies to be kept confidential. Company's failure
to mark any Confidential Information as confidential, proprietary or otherwise
shall not affect its status as Confidential Information hereunder. The foregoing
Confidential Information includes any and all information relating to the
information systems, financial, marketing, merchandising and selling. To the
extent that prior Company's Confidential Information received by the Supplier
has not been disclosed to third parties, such information shall be covered by
this Agreement. Company's failure to mark any Confidential Information as
confidential or otherwise shall not affect its status as Confidential
Information hereunder. It is expressly understood by Supplier that the existence
of this Agreement and its entire contents are confidential. Supplier
acknowledges and agrees that Company shall own all right, title and interest in
and to any requirements, specifications, documentation or other materials
provided to Supplier by Company and such requirements, specifications,
documentation or other materials shall be deemed as Company's Confidential
Information.
 
Except as expressly set forth herein, Supplier agrees (w) not to use any
Confidential Information for any purpose except as otherwise expressly permitted
hereunder; and (x) to disclose such. Confidential Information only to employees
who have a need to know such Confidential Information for purposes of this
Agreement and who are under a duty of confidentiality no less restrictive than
that set forth herein. Notwithstanding the foregoing, Confidential Information
does not include Information that (y) is shown by written record to be in the
public domain at the time of disclosure or becomes available thereafter to the
public without restriction and not as a result of any act or omission of
Supplier; or (z) is approved for disclosure by Company's written authorization.
 
This Section shall survive any termination of this Agreement for a period equal
to the lesser of (a) five (5) years from the termination date of this Agreement
or (b) so long as any Confidential Information obtained by Supplier remains
Confidential Information. Upon termination, cancellation or expiration of this
Agreement or upon request by Company, Supplier shall return to Company any and
all of Company's Confidential Information and copies thereof in its possession
or control.
 
22.  PROPRIETARY INTEREST. Nothing in this Agreement shall be construed to grant
Supplier a license to any of the Confidential Information disclosed by Company
under Section 21 or to any patents, patent applications or copyrights derived
from the Confidential Information disclosed by Company under Section 21.
Supplier specifically agrees and understands that all products of and the ideas
and expressions related thereto, and all physical embodiments thereof and
material developed in relation thereto by Supplier or Company are and shall
remain the property of Company.
 
23.  FORCE MAJEURE. If any place of business or other premises of Company and/or
its Subsidiaries or Affiliates shall be affected by lockouts, strikes, riots,
war, acts of terrorism, fire, civil insurrection, flood, earthquake or any other
casualty or cause beyond Company's and/or its Subsidiaries' or Affiliates'
control, which might reasonably tend to impede or delay the reception, handling,
inspecting, processing or marketing of the Merchandise covered by this
Agreement, Company may, at its option, cancel all or any part of the undelivered
Order hereunder by giving written notice to Supplier which notice shall be
effective upon mailing. Company shall not be subject to any liability or
obligation due to exercising the right of cancellation under this section.
 
24. ASSIGNMENT. No part of this Agreement or of any Order shall be assignable by
Supplier without the prior written consent of Company, and Company shall not be
obligated to accept a tender of performance by any assignee, unless Company
shall have previously expressly consented in writing to such an assignment.
 
25.PUBLICITY; USE OF NAME AND INTELLECTUAL PROPERTY. Supplier shall not refer to
Company in any advertising or published communication without the prior written
approval of Company. Supplier shall not use, or allow to be used, Company's
name, logo, trademarks, service marks, patents, copyrights or trade dress
without the prior written approval of Company. Company may use Supplier's name,
logo, trademarks, service marks, patents, copyrights and trade dress in
connection with Company's marketing of the Merchandise.

 
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,
26. COMPLIANCE WITH STANDARDS FOR SUPPLIER. Supplier warrants that it has read
and understands and will comply with the requirements set forth in the Standards
(Appendix 1), as may be reasonably amended from time to time by Company. Company
reserves the right to cancel any outstanding Order, refuse any shipments, revoke
acceptance of Merchandise, and otherwise cease to do business with Supplier,
require the Supplier to pay Company damages for breach of this Agreement with an
amount of not less than RMB100,000, if Supplier fails to comply with any terms
of the Standards or if Company reasonably believes Supplier has failed to do so.
If the •damages paid to Company are not sufficient to compensate Company in
full, Company still has the right to require Supplier to make any additional
compensation to Company necessary to fully indemnify Company.
 
27. SEVERABILITY; WAIVER. If any term, covenant or condition of this Agreement
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term, covenant or condition to persons or circumstances other than those
as to which it is held invalid or unenforceable, shall not be affected thereby;
and each and every remaining term, covenant or condition of this Agreement shall
be valid and enforced to the fullest extent permitted by law. Company's failure
to enforce at any time any provision of this Agreement will not be construed as
a waiver of such provision or of any rights thereafter to enforce such
provision. Any waiver by Company of any of the terms and conditions of this
Agreement or any Order must be in writing signed by an authorized representative
of Company and affixed with the corporate seal of Company.
 
28.  FORUM SELECTION; CHOICE OF LAW. This Agreement, any and all Orders, and any
and all disputes arising thereunder or relating thereto, whether sounding in
contract or tort, shall be governed by and construed in accordance with the laws
of the People's Republic of China without regard to the rules of conflicts of
law, and the competent People's Court of Shenzhen City shall have exclusive
jurisdiction over any actions or suits in connection with this Agreement and/or
any Orders and/or any transactions under this Agreement or any Order. The
parties mutually acknowledge and agree that they shall not raise, and hereby
waive, any defenses based upon venue, inconvenience of forum or lack of personal
jurisdiction in any action or suit brought in accordance with the foregoing. The
parties acknowledge that they have read and understand this clause and agree
willingly to its terms.
 
29. ATTORNEY FEES AND INTEREST OBLIGATIONS. Company reserves the right to charge
Supplier interest at the annual rate equal to a rate that is three hundred base
points above the saving account interest rate of Bank of China for all amounts
owed by Supplier to Company, including debit balances not paid within thirty
(30) days after due, until such amounts are paid in full, and Company will be
entitled to recover from Supplier its attorneys' fees and costs incurred in
collecting any past-due obligation.
 
 
 
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30. NOTICES. Unless otherwise specifically provided for herein, any notice or
demand which under the terms of this Agreement or under any statute must or may
be given or made shall be in writing and shall be given or made by registered
mail or by Express Mail Service, or reputable overnight express service or EDI
addressed as follows: if to Company: Wal-Mart (China) Investment co. Ltd., Attn:
General Merchandise Manager/Director (identify department or category), 2-5/F,
Tower 2 and 1-12/F, Tower 3, SZITIC Square, 69 Nonglin Road, Futian District,
Shenzhen, Guangdong Province, P.R. China 518040. If to Supplier: to Supplier's
address set forth above. Postage arising hereof shall be borne by Supplier d
shall be deducted directly by Company according to Section 5. The above
addresses may be changed at any time by giv g prior written notice as provided
above.
 
31. EFFECTIVENESS AND TERM OF AGREEMENT. This Agreement shall become effective
upon its execution by the legal representatives or authorized representatives of
Company and Supplier affixed with the corporate seals of both parties. The term
of this Agreement shall be one (1) year following the execution date of the
Agreement and will automatically renew for extension for one (1) year each time
upon the expiration of the term (the term of the Agreement can renew for
consecutive extension periods upon the expiration of the prior term) if neither
Company nor Supplier notifies the other party in writing before thirty (30) days
prior to the end of the term of its intent not to renew this Agreement. Company
has the right to terminate this Agreement at any time subject to one-month prior
written notice to Supplier.
 
32.  INFORMATION SECURITY. Supplier represents that it currently follows
industry best practices as a means to prevent any compromise of its information
systems, computer networks, or data files ("Systems") by unauthorized users,
viruses, or malicious computer programs which could in turn be propagated via
computer networks, email, magnetic media or other means to Company. Supplier
agrees to immediately give Company notice if the security of its Systems are
breached or compromised in any way.
 
Supplier agrees to apply appropriate internal information security practices,
including, but not limited to, using • appropriate firewall and anti-virus
software; maintaining said countermeasures, operating systems, and other
applications with up-to-date virus definitions and security patches; installing
and operation security mechanisms in the manner in which they were intended
sufficient to ensure the Company will not be impacted nor operations disrupted;
and permitting only authorized users access to computer systems, applications,
and Retail Link.
 
Supplier specifically agrees to: use up-to-date anti-virus tools to remove known
viruses and malware from any email message or data transmitted to Company;
prevent the transmission of attacks on Company via the network connections
between Company and the Supplier; and prevent unauthorized access to Company
systems via the Supplier's networks and access codes.
 
In accordance with all applicable laws of the People's Republic of China on
protection of personal information or privacy of individuals, Supplier agrees to
safeguard confidential protected individually identifiable personal information
(health, financial, identity) which are received, transmitted, managed,
processed, etc. by Supplier and to require subcontractor or agent to meet these
same security agreements.
 
33. SURVIVAL OF PROVISIONS. The provisions of this Agreement which by their
nature are intended to survive termination of this Agreement (including but not
limited to representations, warranties, guarantees, indemnifications, payment of
obligations, remedies, confidentiality, choice of law, forum selection and
statute of limitations)• shall survive its termination.
 

 
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34.      ENTIRE AGREEMENT. The parties hereto agree that this Agreement, the
Standards and any Order constitute the full understanding of the parties, a
complete allocation of risks between them and a complete and exclusive statement
of the terms and conditions of their agreement for the transaction under the
relevant Order. All prior agreements, negotiations, dealings and understandings,
whether written (including any electronic record) or oral, regarding the subject
matter hereof, are superseded by this Agreement Any changes in this Agreement
shall be in writing and executed by both parties and affixed with the corporate
seals of the parties. Furthermore, if there is a conflict of terms between this
Agreement and an Order, this Agreement shall be the controlling document.
 
35. NO ASSUMPTION OF ORDERS. Company will never assume that Supplier will be
willing to accept any specific volume of Orders. Conversely, Company urges
Supplier never to assume that Company will issue Orders for any volume of
Merchandise, even if Supplier's impression is based on discussions Supplier may
have had with Company representatives. No Company representative has authority
to order Merchandise except an Authorized Buyer through an Order issued pursuant
to and subject to the terms of this Agreement.
 
36. NO PARTNERSHIP/JOINT VENTURE RELATIONSHIP. This Agreement does not create or
engender any obligation or relationship such as partnership, joint venture,
affiliation or other similar legal relationship under the laws of the People's
Republic of China. Any correspondence or other references to "partners" or other
similar terms will not be deemed to alter, amend or change the relationship
between the parties hereto unless there is a formal written agreement
specifically detailing the rights, liabilities and obligations of the parties as
to a new specifically defined legal relationship.
 
37. MISCELLANEOUS. If is mutually understood and specifically agreed that this
Agreement is binding upon the respective heirs, successors, and assignees of the
parties hereto.
 
38. This Agreement is written in English and Chinese. Each version shall be
equally valid. In the event of discrepancy between such two versions, the
Chinese version shall prevail. This Agreement and its Appendices shall be
executed in three (3) sets of originals; Company holds two (2) sets of originals
and Supplier holds one (1) set of originals.
 
39. The original Certificate of Legal Representative or the original Power of
Attorney of the Authorized Representative shall be attached hereto as an
integral part of this Agreement.
 
/Supplier:
 
/Legal Representative/Authorized Representative: /s/ signature
 
/Date: 5/5/10
 
Company: Wal-Mart (China) Investment Co:, Ltd.
 
/Authorized Buyer: /s/ signature
 
/Date:  7/29/10
 
 
 
 
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APPENDIX 1
 
STANDARDS FOR SUPPLIERS
OF WAL-MART (CHINA) INVESTMENT CO, LTD AND ITS AFFILIATES
 
 
Wal-Mart (China) Investment Co Ltd. and its current or future affiliates
("Wal-Mart") have enjoyed success by adhering to three basic principles since
their establishment. The fast principle is-to carry through the concept of
providing quality merchandise at low prices every day. Wal-Mart has built good
relationship with its clients on this basis, and we believe it is the
fundamental reason for Wal-Mart's rapid growth and success. The second principle
is wholehearted dedication to a partnership relationship between Wal-Mart's
associates (employees) and the management. This concept is extended to
Wal-Mart's Suppliers (including merchandise suppliers and service suppliers)
("Suppliers") who have developed their business as Wal-Mart grows. The third
principle is a commitment by Wal-Mart to the communities in which Wal-Mart
stores and distribution centers are located.

 
Wal-Mart strives to conduct its business in a manner that reflects these three
basic principles and the fundamental values incorporated. Each of our Suppliers
is expected to conform to those principles and values and to assure compliance
in all contracting, subcontracting or other business relationships.

 
Since Wal-Mart believes that the conduct of its Suppliers will involve Wal-Mart
and affect its reputation, Wal-Mart requires that its Suppliers conform to
standards of business operation which are-Consistent with the three basic
principles described above. More specifically, Wal-Mart requires conformity from
its Suppliers with the following standards, and hereby reserves the right to
make periodic inspections without prior notice of Suppliers' business premises
to ascertain Suppliers' implementation of these standards.
 
1.
COMPLIANCE WITH APPLICABLE LAWS

 
All Suppliers shall comply with the legal requirements and standards of their
industry under the laws of the countries in which the Suppliers are doing
business, including the labor and employment laws of those countries. Should the
legal requirements and standards of the industry conflict, Suppliers shall at
least be in compliance with the legal requirements of the country in which the_
products or services are manufactured or provided. If, however, the industry
standards exceed the country's legal requirements, Wal-Mart will favor Suppliers
who meet such industry standards. Suppliers. shall comply with all requirements
of all applicable government agencies. Necessary invoices and .required
documentation must be provided in compliance with applicable law. Suppliers
shall warrant to Wal-Mart that no merchandise sold or service provided to
Wal-Mart infringes any such intellectual property rights as patents, trademarks
or copyrights belonging to others and shall provide to Wal-Mart all necessary
licenses for selling merchandise or providing services to Wal-Mart under license
from a third party. For all merchandise Suppliers, all merchandises shall be
accurately marked or labeled with its country of origin in compliance with
applicable laws of the country of manufacture and other applicable laws. All
shipments of merchandise will be accompanied by the requisite documentation
issued by the proper governmental authorities, including but not limited to
import licenses, quota allocations and visas and shall comply with orderly
marketing agreements, voluntary restraint agreements and other such agreements
in accordance with applicable law. The commercial invoice shall, either in
English or in Chinese, accurately describe all the merchandises contained in the
shipment (identify the country of origin of each article contained in the
shipment) or services provided, and shall list all direct and indirect
constituents of price of the merchandise or service, including but not limited
to any assistance, selling commissions or royalty payments. Suppliers shall
provide backup documents and any changes to original documents required by
Wal-Mart in a timely manner. Failure to supply complete and accurate information
will result in Wal-Mart's cancellation or rejection of the merchandise or the
service provided by Suppliers.

 
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2.
EMPLOYMENT

 
Wal-Mart achieves great success because its staffs are considered "partners" and
a high level of teamwork spirit has developed within the Company. Wal-Mart
expects the spirit of commitment to be reflected by its Suppliers with respect
to their employees. Wal-Mart expects its Suppliers to meet at least the
following terms and conditions of employment.
 
Suppliers shall comply with all employment and related local laws, ordinances,
statutes, rules, and regulations, sign the employment contracts with their
employees (including their promoters in Wal-Mart's stores and/or their employees
in Wal-Mart's business premises), go through the employment formalities, e.g.
obtain the Work Permits, Position Certificates or other certificates required by
the labor administrative department, and purchase employment injury insurance
for their employees etc.. Wal-Mart shall have no responsibility for
compensation, welfares or other obligations to Suppliers' employees.
 
3.
INSPECTION-ON-EMPLOYMENT

 
Wal-Mart may at any time investigate the identities and work-permit status of
any employee of Suppliers or third person under the control of Suppliers.
Suppliers shall cooperate with any such inquiry by Wal-Mart by providing all
necessary documentation and, if requested by Wal-Mart, an available for direct
questioning by Wal-Mart any individual whom Wal-Mart reasonably suspects may be
an illegal sojourner in any countries in which the Suppliers are doing business
or may otherwise lack proper employment status Wal-Mart, at its sole discretion,
shall have the right to refuse any individual whom Suppliers proposes to provide
merchandises or perform services under this Agreement; and may at any time
request Suppliers to replace or-change any person Wal-Mart believes or
reasonably suspects him or her in violation of the laws of any countries in
which the Suppliers are doing business, including but not limited to labor law.
 
4.
COMPENSATION

 
Suppliers shall fairly compensate their employees by providing wages and
benefits which are in compliance with the national laws of the countries in
which the Suppliers are doing business or which are consistent with the
prevailing 2 local standards in the countries in which the Suppliers are doing
business, if the prevailing local standards are higher. Suppliers shall fully
comply with the requirements regarding wage and hour set forth in labor laws and
regulations of any countries in which the Suppliers are doing business and shall
cooperate only with subcontractors who comply with this laws and regulations, if
applicable.
 
5.
WORKING HOURS

 
Suppliers shall maintain reasonable employee working hours in compliance with
local standards and applicable national laws of the countries in which the
Suppliers are doing business. Employees' working hours per week shall not excess
working hours permitted by the applicable- law, and shall by rewarded
accordingly for overtime work under applicable law. Wal-Mart favors Suppliers
who comply with, the statutory requirements for working hours for employees and
will not use Suppliers who, on a regularly scheduled basis, require employees to
work in excess of forty-hour per week without proper compensation as required
under applicable law Employees shall be permitted reasonable days off (which,
Wal-Mart deems as at least one day off for every seven-day period in the event
that the applicable law does not have clear stipulations on the subject of day
off .) and leave.
 
6.
FORCED LABOR, PRISONER LABOR

 
Suppliers shall maintain employment on a voluntary basis. Forced or prisoner
labor will in no case be tolerated by Wal-Mart. Wal-Mart refuses to accept
products or services or service results from Suppliers who utilize in any manner
forced or prisoner labor or products or services from their contractors;
subcontractors or other business relationships who utilize in any manner forced
or prisoner labor.
 

 
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7.
CHILD LABOR

 
Wal-Mart will in no case tolerate the use of child labor in the manufacture of
products sold by Suppliers or in the provision of services. Wal-Mart will not
accept products or services from Suppliers that utilize in any manner child
labor by themselves or in their contractors, subcontractors or other business
relationships for the manufacture of their products or the provision of
services. No person shall be employed at an age younger than 16(or the youngest
age for employees in the manufacture or service industry allowed under the local
laws) or younger than the age for completing compulsory education in the country
where such age is higher than 16 years of age.
 
8.
DISCRIMINATION

 
Wal-Mart recognizes that cultural differences exist and different standards
apply in various countries; Wal-Mart believes that all terms and conditions of
employment should be based on individuals' ability to do the job instead of
personal characteristics or beliefs. Wal-Mart favors Suppliers who have social
commitment and who do not discriminate against their employees in the employment
process or any other term or condition of work on the basis of their race,
color, nationality, gender, religion, disability, or other similar factors.
 
9. 
WORK PLACE ENVIRONMENT

 
Wal-Mart maintains a safe, clean, healthy and efficient environment for its
associates and expects the same from its Suppliers. Wal-Mart also expects that
Suppliers shall furnish employees with safe and healthy working conditions.
Factories working on Wal-Mart merchandise shall provide adequate medical
facilities, emergency exits and safety equipment, well-lighted and comfortable
work stations, clean rest-rooms, and adequate living zones where necessary.
Workers should be adequately trained to perform their jobs safely. Wal-Mart
reserves the right not to do business with any Supplier who provides an
unhealthy or hazardous work environment or applies mental or physical penalties
to the employees.
 
10.
Penalty

 
If Supplier breaches any stipulations in these Standards for Suppliers, it shall
compensate Wal-Mart for all losses suffered by Wal-Mart due to Supplier's such
breach, including but not limited to damages of the reputation and credit and
financial losses of Wal-Mart, e.g. attorney fee, fines levied by governmental
authority. If Suppliers breaches any stipulations in these Standards for
Suppliers, Wal-Mart may also immediately terminate any agreements and business
relationship in its sole discretion.
 
11.
CONCERN FOR THE ENVIRONMENT

 
Wal-Mart believes that the Company shall take the lead in protecting our
environment. Wal-Mart encourages our clients and associates to always Reduce,
Re-use, and Recycle. Wal-Mart also encourages our Suppliers to reduce excess
packaging and to use recycled and non-toxic materials whenever possible.
Wal-Mart will favor Supplier who shares our commitment to the environment.
 
12.
REGULAR INSPECTION AND CERTIFICATION BY SUPPLIER

 
Suppliers shall inspect each of their facilities in which produce merchandise
sold or service provided to Wal-Mart. Such inspections shall be conducted at
least on a quarterly basis to ensure compliance with the standards, terms and
conditions set forth herein. All charges related to the inspection and
certification of such facilities shall be paid fully by the Supplier. Supplier
shall maintain the complete and accurate records and shall make such documents
readily accessible to Wal-Mart, its agents or employees when requested. Any
Supplier who fails or refuses to comply with these standards is subject to
immediate cancellation of any and all outstanding orders, refusal or return of
any shipment, and termination of business relationship with Wal-Mart. Such
cancellation, refusal or return and termination of business relationship shall
not cause any liabilities to Wal-Mart.

 
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13.
RIGHT OF INSPECTION

 
To further ensure proper implementation of and compliance with the standards set
forth herein, Wal-Mart or a third party designated by Wal-Mart will take
affirmative measures, such as on-site inspection of business facilities, to
implement and monitor the standards. Any Supplier who fails or refuses to comply
with these standards is subject to immediate cancellation of any and all
outstanding orders or agreements, refusal or return of any shipment and
termination of business relationship with Wal-Mart. Such cancellation, refusal
or return and termination of business relationship shall not cause any
liabilities to Wal-Mart.
 
14.
CONFIDENTIALITY

 
Supplier shall not, at any time during or after the term of this Agreement,
disclose to others and will not take or use for its own purposes or the purpose
of others any Wal-Mart's trade secrets, confidential information, knowledge,
designs, data, know-how, or any other information considered by Wal-Mart as
"confidential" Supplier recognizes that this obligation applies not only to
Wal-Mart's technical information, designs and marketing, but also to any
business information that Wal-Mart treats as confidential. Any information that
is not readily available to public shall be considered to be a trade secret and
confidential. Upon termination of the business relationship for any cause,
Supplier shall return to Wal-Mart all items belonging to Wal-Mart and all copies
of documents containing Wal-Mart's trade secrets, confidential information,
knowledge, data or know-how in Supplier's possession or under Supplier's
control. Such obligation of confidentiality shall survive the termination of the
aforesaid business relationship elapsed.
 
15.
WAL-MART GIFT AND GRATUITY POLICY

 
Wal-Mart has a very strict policy which forbids and prohibits the solicitation,
offering or acceptance of any gifts, gratuities or any form of "kick-back" or
facilitation fee as a condition of doing business, as a form of "appreciation",
or as an attempt to gain favor or accept merchandise and/or services at a lower
degree than agreed. Wal-Mart firmly believes in delivering and receiving
merchandise and/or services of the agreed quantity and quality.
 
 
·
Any Supplier who violates such policy by offering any form of gift or gratuity
to any staff, employee, agent or affiliate of Wal-Mart will be subject to loss
of all existing and future business, regardless of whether the gift or gratuity
was accepted. In addition, Wal-Mart reserves the right to report the Supplier
who violates such policy to the competent governmental authorities of the
Suppliers' respective and relevant countries.

 
 
·
Any Supplier that receives a request or demand from any Wal-Mart associates,
employees, agent or affiliated companies for a gift or gratuity in any form
should immediately report to the Assets Protection Dept. of Wal-Mart (China)
Investment Co., Ltd. (0755-21511111): Failure to report such information will
result in severe action against such Su ding company or factory, including but
not limited. to termination of all existing and future business request for
monetary compensation.

 
As an officer of ________________ (Company Name), a Supplier of Wal-Mart, I have
read the principles and terms described in this document and understand my
company’s business relationship with Wal-Mart is based on my company being in
full compliance with the principles and terms set out herein.  I further
understand that failure by a Supplier to abide by any of the terms and
conditions stated herein may result in the immediate cancellation by Wal-Mart of
any and all outstanding orders/agreements with that Supplier and refusal by
Wal-Mart to continue to do business in any manner with said supplier, I am
signing this statement, as corporate representative of Xiamen Xongixiang Modern
Agriculture Development Co., Ltd., (Company Name), to acknowledge, accept and
agree to abide by standards, terms and conditions set forth herein between my
company Xiamen Xongixiang Modern Agriculture Development Co., Ltd., (Company
Name) and Wal-Mart.  I hereby confirm that all actions, legal and corporate, to
make this Agreement binding and enforceable against Xiamen Xongixiang Modern
Agriculture Development Co.,, Ltd., (Company Name) have been completed.
 
Supplier Name:  ________________________
 
Legal Representative Signature:  ________________
 
Address, Telephone and Fax Number:  ________________
 
Typed Name:  ___________________
 
Title:  ________________________
 
Date:  ____________________

 
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Appendix 2
 
 
This Appendix constitutes and is part and parcel of the Supplier Agreement. The
terms of the Supplier Agreement are binding and enforceable as to this Appendix.
The conditions and terms set forth in this Appendix 2 shall apply only to the
transactions of the type of merchandise listed below between the Company and the
Supplier. In the event of transactions of different type of merchandise, the
parties shall sign another Appendix 2, and these Appendices 2 shall be
independent of each other and cover the transactions corresponding to each type
of merchandise.
 
x
 New Supplier

o
Department Information Update of Existing Supplier

o
New Department or serial number of Existing Supplier

 
Type of Merchandise  __________________ Department No. _______________ Buyer
________________
 
 
Payment Terms
 
Payment Term (Choose only one)
 
1. x  
Payment Days ____ after merchandise delivery

2. o
Days

3. o
COD

4 .o
CBD

 
In order for Supplier to reduce its market risks and expedite the fund
circulation, Supplier may apply in writing to Company for the payment before the
deadline. The parties may determine the different payment day and different
payment terms following Company's written consent.
 
Methods of Sending Orders to Suppliers
 
Select one of the following methods for sending orders:
 
by fax/ Fax Number
by EDI
Other (Please specify):_________________________
 
Place for Delivery of Merchandise
 
Select one of the following place for delivery of merchandise:
 
1. x
Deliver merchandise to Wal-Mart stores directly
 

2. o
Deliver merchandise to Distribution Center
The selection of this clause should be subject to Freight Service Compensation
Allowance of Distribution Center listed in Section 2.1, Handling Service
Compensation Allowance listed in Section 2.3, and Warehousing Service
Compensation Allowance listed in Section 2.1, 2.3, 2.4.)

 
3. o
Pick up merchandise at Supplier's location
The selection of this clause should be subject to Pick-up Freight Service
Compensation Allowance listed in Section 2.2.)

 
 
For any destination other than above place, it shall be subject to the agreement
of both parties.
 
Allowances and Rebates
 
Supplier agrees to pay Company the following allowances and rebates, and unless
the Company and the Supplier agree in writing otherwise, the following allowance
standard is applicable to any and all transactions under the Supplier Agreement
and its Appendix entered into by both parties. Supplier "agrees that Company may
collect allowances through offset under orders, deduction from unsettled payment
for merchandise of Supplier, or requesting Supplier to make payment by
check/bank transfer.

 
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For allowances and rebates that Company doesn't receive or has received less for
any reasons, Company reserves the right to collect afterwards, and can deduct
from unsettled payment for merchandise of Supplier at its own discretion, or
request Supplier to pay in check or by bank transfer.
 
For any type of allowances and rebates not covered in this Agreement, it shall
be subject to confirmation by both parties.
 
1.
Rebates of Sales

 
In order to encourage Company to actively increase the volume of merchandise
purchased and expand economic benefit of scale-purchasing, Supplier agrees to
pay to Company the rebates of sales in accordance with the following conditions
and standards (select one of the following two items):
 
x
Monthly Rebates of Sales

 
According to one of the following sub-clauses that corresponds to the purchase
amount with VAT of Company from Supplier for each month, Supplier shall pay
Company the rebates of sales with the rate specified in the relevant sub-clause.
 
 
·
When the purchase amount with VAT from Company to Supplier for any month is
above _____ RMB but less than _____RMB, Supplier shall pay Company the rebates
of sales equating to ____% of net purchase amount of that month;

 
 
·
When the purchase amount with VAT of from Company to Supplier for any month is
above _____ RMB but less than ____ RMB Supplier will pay Company the rebates of
sales equating to _____% of net purchase amount of that month;

 
 
·
When the purchase amount with VAT from Company to Supplier for any month is ___
RMB or above, Supplier shall pay Company the rebates of sales to _____% of net
purchase amount of that month.

 
According to one of the following sub-clauses that corresponds to the purchase
amount with VAT of Company from Supplier for every year, Supplier shall pay
Company the rebates of sales with the rate specified in the relevant sub-clause.
 
 
·
When the purchase amount with VAT from Company to Supplier for a year is above
_____RMB but less than _____ RMB, Supplier shall pay Company the rebates of
sales equating to _____% of net purchase amount of that year;

 
 
·
When the purchase amount with VAT from Company to Supplier for a year is above
____RMB but less than ____RMB, Supplier shall pay Company the rebates of sales
equating to ___% of net purchase amount of that year;

 
 
·
When the purchase amount with VAT from Company to Supplier for a year is
_____RMB or above, Supplier shall pay Company the rebates of sales equating to
_____% of net purchase amount of that year.

 
Both parties agree that, net purchase amount of any month and of any year shall
be defined as the monthly total amount of orders/the annual total amount of
orders from Company to Supplier minus order allowance and returned merchandise
amount.
 
2.
Transportation and Delivery Service Allowance

 
2.1
Freight Service Compensation Allowance of Distribution Center •

 
Supplier acknowledges that Company orders merchandise from Supplier for the
retail purpose at Wal-Mart stores. Therefore, the merchandise ordered-by Company
shall in principle, be directly delivered by Supplier to Wal-Mart stores.
However, to save cost and expense for Supplier, Company agrees to provide the
freight service from Distribution Center to Wal-Mart stores and designate
Distribution Center of Company as the delivery place in purchase orders.  Under
such circumstance, Supplier shall pay freight service compensation to Company
for such service,  Therefore, Supplier specifically agrees hereby that if the
delivery place specified in an order is Distribution Center of Company, then
Supplier shall provide Company with Freight Service Compensation Allowance of
Distribution Center of % for the service of transporting merchandise. The
Freight Service Compensation Allowance of Distribution Center shall be
calculated as follows: all purchase amounts with VAT in all the orders
designating Distribution Center of Company as the delivery place multiplied by
the above. percentage.

 
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2.2 
Pick-up Freight Service Compensation Allowance

 
Supplier acknowledges that Company orders merchandise from Supplier for the
retail purpose at Wal-Mart stores. Therefore, the merchandise ordered by Company
shall, in principle, be directly delivered by Supplier to Wal-Mart stores.. In
order to help Supplier reduce operation cost, Supplier hereby engages Company to
pick up merchandise. from Supplier's location to the relevant stores or
Distribution Center of Wal-Mart. Under such circumstance, Supplier agrees to pay
Pick-up Freight Service Compensation Allowance to Company for the pick-up
freight service. For this reason, Supplier specially agrees hereby that if an
Order specifies the place of Supplier as the place of delivery, Supplier will
provide Company with the Pick-up Transportation Service Compensation Allowance
Rate of ___% for the transportation services for the Merchandise under that
Order from Supplier to the relevant stores or Distribution Center. The Pick-up
Freight Service Compensation Allowance shall be calculated as follows: all the
purchase amounts with VAT in all the orders designating Supplier's place as the
delivery place multiplied by the above percentage.
 
2.3
Handling Service Compensation Allowance

 
Supplier acknowledges that Company orders merchandise from Supplier for the
retail purpose at Wal-Mart stores. Therefore, the merchandise ordered by Company
shall, in principle, be directly delivered by Supplier to Wal-Mart stores.
However, to save cost and expense for Supplier, Company agrees to provide
handling service to Supplier for the merchandise and designate Distribution
Center of Company as delivery place in purchase orders. Handling service
includes but is not limited, to: packaging and processing of merchandise,
sorting of merchandise, sticking checkpoint label, etc. Under such circumstance,
Supplier shall pay handling service compensation to Company for such service.
Therefore, Supplier specifically agrees hereby that if the delivery place
designated in an order is Distribution Center of Company, then Supplier shall
pay  % Service Compensation Allowance for the service of distributing
merchandise. The Handling Service Compensation Allowance shall be calculated as:
all purchase amounts with VAT in all orders designating Distribution Center of
Company as delivery place multiplied by the above percentage.
 
2.4
Warehousing Service Compensation Allowance

 
Supplier acknowledges that Company orders merchandise from Supplier for the
retail purpose at Wal-Mart stores. Therefore, merchandise ordered by Company
shall, in principle, be directly delivered by Supplier to Wal-Mart stores.
However, to save cost and expense for Supplier, Company agrees to provide
warehousing service to Supplier for the merchandise and designate Distribution
Center of Company as the delivery place in purchase orders. Under such
circumstance, Supplier shall pay warehousing service compensation to Company for
such service. Therefore, Supplier specifically agrees hereby that if the
delivery place designated in an order is Distribution Center of Company, then
Supplier shall pay ____% Warehousing Service Compensation Allowance. The
Warehousing Service Compensation Allowance shall be calculated as: all purchase
amounts with VAT in all orders designating Distribution Center of Company as
delivery place multiplied by the above percentage.
 
3. 
Advertisement and Promotion Allowance

 
Both Company and Supplier agree that it is necessary to do some advertisement
sales promotion for Supplier's merchandise by various ways such as circular,
newspapers, magazine, shopping bag, keepsake, TV, radio broadcasting etc., in
order to maintain and/or increase the market recognition of Supplier's
merchandise. To control advertisement cost, and maintain and increase the price
competitiveness of Supplier's merchandise, Supplier wishes to participate in the
centralized advertisement activities organized by Company and/or its affiliates
from time to time. Supplier agrees to provide Advertisement Allowance to Company
in accordance with the following conditions and standards for its participation
in the centralized advertisement activities of Company and/or its affiliates:
 
Supplier shall provide Company with Advertisement Allowance in an amount of yuan
each year. Company shall provide the advertisement promotion activities as
below:
 
 
·
Circular

 
 
·
Shopping bag with Supplier’s symbol

 
 
·
keepsake with Supplier’s symbol

 
 
·
media with Supplier’s symbol

 
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For any advertisement and promotion not covered above, it shall be subject to
confirmation by both parties.
 
 
 
Merchandise Return Terms
 
Company purchases merchandise from Supplier by entering into the Supplier
Agreement with Supplier and issuing purchase orders to Supplier, Company agrees
to return merchandise according to both parties' agreement. In case that the
parties have agreed for Company to return merchandise, Supplier selects  2 of
the following ways to dispose of the returned merchandise in order to help
Supplier reduce operation cost and better arrange production.
 
1. 
Supplier doesn'taccept returned merchandise

 
As compensation for returned merchandise from Supplier to Company, Supplier
agrees to provide Company with allowance (Defect/Returned Merchandise Allowance)
equating to  __% of merchandise amount specified in purchase orders, and agrees
that Company may dispose of the returned merchandise at its own discretion,
rather than return such returned merchandise to Supplier, without reporting the
disposal result to Supplier.
 
2. 
Supplier agrees to accept returnedmerchandise and selects one of the following
ways to dispose of returned merchandise:

 
I. 
Ways of handing over the returned merchandise (must specify)

 

 
o
Returned merchandise shall be disposed of by Wal-Mart stores or Distribution
Center at their discretion. Supplier does not require Company to bear the
procurement price of the returned merchandise.

 

 
x
Returned merchandise shall be picked up by Supplier itself. The place and time
for picking up the returned merchandise shall be subject to the notice issued by
Company. Supplier does not require Company to bear the procurement price of the
returned merchandise, and shall pay Company processing fee of the returned
merchandise equating to 0 % of procurement price of the returned merchandise. If
Supplier fails to pick up the returned merchandise within the time limit as
specified in the notice issued by Company, Company is entitled to charge a
default payment equating to 2% of the procurement price of the returned
merchandise for each day delayed; if Supplier fails to pick up returned
merchandise for 50 days or longer, Company may dispose of the returned
merchandise at its own discretion.

 

 
o
Returned merchandise shall be delivered by Company to the place designated by
Supplier.  Suppler agrees to bear the relevant transportation expenses from
Company to the delivered place and agrees for Company to deduct directly from
unsettled merchandise payment.

 
Place designated by Supplier for returned merchandise:  ZC:  _____
Tel:_____  Fax:____  Attention:____
 
 
II. 
According to the preceding provisions, if returned merchandise are disposed of
by Wal-Mart stores or Distribution Center at their own discretion, Wal-Mart
stores or Distribution Center may dispose of the returned merchandise in the
following ways at their own discretion, and the expense arising therefrom shall
be paid with the income from disposing of the returned merchandise. Any surplus
of income remaining after paying the expenses shall belong to Company; if the
income is insufficient to cover the expenses, Supplier shall pay the shortage to
Company.

 
Merchandise Return Terms
 
Company purchases merchandise from Supplier by entering into the Supplier
Agreement with Supplier and issuing purchase orders to Supplier, Company agrees
to return merchandise according to both parties' agreement. In case that the
parties have agreed for Company to return merchandise, Supplier selects  2 of
the following ways to dispose of the returned merchandise in order to help
Supplier reduce operation cost and better arrange production:
 
1. 
Supplier doesn't accept returned merchandise

 
As compensation for returned merchandise from Supplier to Company, Supplier
agrees to provide Company with allowance (Defect/Returned Merchandise Allowance)
equating to  % of merchandise amount specified in purchase orders, and agrees
that Company may dispose of the returned merchandise at its own discretion,
rather than return such retuned merchandise to Supplier, without reporting the
disposal result to Supplier.
 
2. 
Supplier agrees to accept returned merchandise and selects one of the following
ways to dispose of returned merchandise:

 
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I. 
Ways of handing over the returned merchandise (must specify)

 

 
o
 Returned merchandise shall be disposed of by Wal-Mart  Stores or Distribution
Center at their discretion. Supplier does not require Company to bear the
procurement price of the returned merchandise.

 

 
x
 Returned merchandise shall be picked up by Supplier itself. The place and time
for picking up the returned merchandise shall be subject to the notice issued by
Company. Supplier does not require Company to bear the procurement price of the
returned merchandise, and shall pay Company processing fee of the returned
merchandise equating to 0% of procurement price of the returned merchandise. If
Supplier fails to pick up the returned merchandise within the time limit as
specified in the notice issued by Company, Company is entitled to charge a
default payment equating to 2% of the procurement price of the returned
merchandise for each day delayed; if Supplier fails to pick up returned
merchandise for 50 days or longer, Company may dispose of the returned
merchandise at its own discretion

 

 
o
 Returned merchandise shall be delivered by Company to a place designated by
Supplier.  Supplier agrees to bear the relevant transportation expenses from
Company to the described place and agrees to Company to deduct directly from
unsettled merchandise payment.

 
Place designated by Supplier for returned merchandise:    ZC:  ____________
Tel:  _________  Fax:  _____________ Attention:  ______________
 
II. 
According to the preceding provisions, if returned merchandise are disposed of
by Wal-Mart stores or. Distribution Center at their own discretion, Wal-Mart
stores or Distribution Center may dispose of the returned merchandise in the
following ways at their own discretion, and the expense arising therefrom shall
be paid with the income from disposing of the returned merchandise. Any surplus
of income remaining after paying the expenses shall belong to Company; if the
income is insufficient to cover the expenses, Supplier shall pay the shortage to
Company.

 
 
 
 
 
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