ex4-23.htm


    
      CONFIDENTIAL
        TREATMENT REQUESTED BY NINETOWNS INTERNET TECHNOLOGY GROUP
        COMPANY LIMITED. THIS EXHIBIT HAS BEEN REDACTED. REDACTED MATERIAL IS MARKED
        WITH “*” AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
        COMMISSION.

       

      Exhibit
        4.23

       

      FRANCHISE
        AGREEMENT

       

      Beijing
        Ninetowns Network and Software Co., Ltd. (hereinafter referred to
        as “Party A”) and Beijing Ninetowns Xin He Software Technology Co., Ltd.
        (hereinafter referred to as “Party B”) have made the following agreement in
        respect of the establishment of a strategic cooperative partnership relationship
        between two parties and Party B becoming Party A’s franchisee:

       

      
        	
                I.

                 

              	
                Company
                  Briefs

                 

              


      

      
        	
                Party
                  A:

                 

              	
                Beijing
                  Ninetowns Network and Software Co., Ltd.

                 

              


      

      
        	
                Address:

                 

              	
                5th
                  Floor, Building No.14, 7th Block, 188 South 4th Ring Road West,
                  Fengtai District, Beijing 

                 

              


      

      
        	
                Zip
                  code: 100070

                 

              	
                Telephone:
                  010-58056688

                 

              


      

       

      
        	
                Party
                  B:

                 

              	
                Beijing
                  Ninetowns Xin He Software Technology Co., Ltd.

                 

              


      

      
        	
                Address:

                 

              	
                Room
                  A-536, 10 Xinghuo Road, Science City, Fengtai District,
                  Beijing

                 

              


      

      
        	
                Zip
                  code: 100070

                 

              	
                Telephone:
                  010-58056555

                 

              


      

       

      
        	
                II.

                 

              	
                Franchise
                  Products:

                 

              


      

      The
“Ninetowns
        Network Quality Supervision Software v1.0” enterprise
        software that was developed independently by Party A and obtained the software
        products certificate, including a number of functions such as electronic
        certification of Origin Certificate and electronic inspection
        application.

       

      
        	
                III.

                 

              	
                Franchise
                  Requirements:

                 

              


      

      In
        order to increase Party B’s reputation, and in consideration of the
        degree of acceptance of software sales companies by import/export enterprises
        in
        Hua Nan Region, Party A consents to Party B’s use of the Ninetowns business name
        in its company name, but it is agreed that Party B shall not use the said
        business name to engage in business activities that are unrelated to the
        import/export business.

       

      
        	
                IV.

                 

              	
                Franchise
                  Scope:

                 

              


      

      
        	
                 

                 

              	
                Hua
                  Bei District, PRC

                 

              


      

       

      
        	
                 

                 

              	
                1

                 

              


      


      


       

       

    

    
      
        	
                V.

                 

              	
                Franchise
                  Period:

                 

              


      

      
        	
                 

                 

              	
                Within
                  two years from January 1, 2007.

                 

              


      

      
        	
                VI.

                 

              	
                External
                  Uniform Selling Price:

                 

              


      

      The
        standard price of the product is RMB3, 000 per set. The first year
        standard service price is RMB1, 500 per year.

       

      
        	
                VII.

                 

              	
                Obligations
                  of Both Parties:

                 

              


      

      
        	
                 

                 

              	
                Obligations
                  of Party A:

                 

              


      

      
        	
                 

                 

              	
                1.

                 

              	
                Party
                  A guarantees that the products that it provides have
                  undergone the administrative authorization of the General Administration
                  of Quality Supervision, Inspection and Quarantine of the PRC.

                 

              


      

      
        	
                 

                 

              	
                2.

                 

              	
                In
                  consideration of the fact that the poorer degree of acceptance
                  of Party B by import/export enterprise customers in Hua Bei Region
                  in the
                  initial period of Party B’s agency business is adverse to the start of the
                  work, and in order to increase Party B’s reputation, Party A consents to
                  Party B’s use of the Ninetowns business name in its company name, but
                  Party B promises not to use the said business name to engage in
                  business
                  activities that are unrelated to the import/export business.

                 

              


      

      
        	
                 

                 

              	
                3.

                 

              	
                Party
                  A guarantees that during the effective period of this
                  agreement, it will obtain Party B’s prior consent before developing other
                  agencies within the franchise region.

                 

              


      

      
        	
                 

                 

              	
                4.

                 

              	
                Party
                  A is responsible for providing qualified products promptly in
                  accordance with Party B’s ordering program.

                 

              


      

      
        	
                 

                 

              	
                5.

                 

              	
                Party
                  A is responsible for applying for inspection and quarantine
                  electronic service platform communication account numbers for users
                  developed by Party B.

                 

              


      

      
        	
                 

                 

              	
                6.

                 

              	
                Party
                  A is responsible for providing all product-related marketing
                  and training materials.

                 

              


      

      
        	
                 

                 

              	
                7.

                 

              	
                Party
                  A is responsible for providing the corresponding product and
                  technical training to Party B.

                 

              


      

      
        	
                 

                 

              	
                8.

                 

              	
                Telephone
                  technical support service.

                 

              


      

      
        	
                 

                 

              	
                Obligations
                  of Party B:

                 

              


      

      
        	
                 

                 

              	
                9.

                 

              	
                Party
                  B is responsible for works such as sales, service, and
                  technical support of Party A’s products in Hua Bei Region.

                 

              


      

      
        	
                 

                 

              	
                10.

                 

              	
                Party
                  B guarantees that it will observe the relevant state laws and
                  regulations and those relevant to the industry in the process of
                  product
                  sales.

                 

              


      

       

      
        	
                 

                 

              	
                2

                 

              


      


      


       

       

    

    
      CONFIDENTIAL
        TREATMENT HAS BEEN REQUESTED AND CONFIDENTIAL TERMS HAVE
        BEEN OMITTED

       

      
        	
                 

                 

              	
                11.

                 

              	
                Party
                  B guarantees that it will not be the franchisee for any other
                  products that have a competitive relationship with Party A in Hua
                  Bei
                  Region during the effective period of this agreement.

                 

              


      

      
        	
                 

                 

              	
                12.

                 

              	
                Party
                  B guarantees that the products that it sells are the official
                  versions of Party A’s products, and Party B guarantees that it will not
                  engage in any form of pirating activities.

                 

              


      

      
        	
                 

                 

              	
                13.

                 

              	
                Party
                  B guarantees that it will provide users with after-sales
                  service and technical support in accordance with Party A’s service
                  standards and service contents.

                 

              


      

      
        	
                 

                 

              	
                14.

                 

              	
                Party
                  B guarantees that it will make the product payments to Party
                  A within prescribed time limit.

                 

              


      

      
        	
                VIII.

                 

              	
                Product
                  Settlement Price:

                 

              


      

      
        	
                 

                 

              	
                The
                  specific settlement price is as follows:

                 

              


      

      
        	
                 

                 

              	
                1.

                 

              	
                The
                  fixed sales price of Party A’s product (software only) saleable
                  to Party B shall be **********.

                 

              


      

      
        	
                 

                 

              	
                2.

                 

              	
                Party
                  B will continue to provide service to Party A’s old
                  customers. It will charge an annual service fee of ***********,
                  of which
                  Party A and Party B will each receive *********.

                 

              


      

      
        	
                Note:

                 

              	
                The
                  settlement prices of both parties are provisional prices, which
                  may be revised in future by supplementary agreements depending
                  on the
                  circumstances.

                 

              


      

      
        	
                IX.

                 

              	
                Settlement
                  Period:

                 

              


      

      Both
        parties agree that the settlement period is three
        months.

       

      
        	
                X.

                 

              	
                Agreement
                  Modification

                 

              


      

      When
        either party to the agreement requests to modify the agreement, it
        should notify the other party in writing, and the other party should respond
        within one week. All modifications of the agreement must be approved in writing
        by both parties, and they will be regarded as inseverable parts of this
        agreement.

       

      
        	
                XI.

                 

              	
                Rights
                  of Both Parties To Terminate the Agreement
                  Unilaterally

                 

              


      

       

      In
        the occurrence of any of the below listed circumstances, Party A is
        entitled to terminate this agreement unilaterally without assuming any liability
        for breach of agreement:

       

      
        	
                 

                 

              	
                3

                 

              


      


      


       

       

    

    
      
        	
                 

                 

              	
                1.

                 

              	
                Without
                  Party A’s consent, Party B is the franchisee for any other
                  products that have a competitive relationship with Party A in the
                  abovementioned sales region during the effective period of this
                  agreement.

                 

              


      

      
        	
                 

                 

              	
                2.

                 

              	
                Party
                  B fails to settle with Party A within prescribed time limit
                  and is in default of product payments for more than 30 days in
                  arrears.

                 

              


      

      
        	
                 

                 

              	
                3.

                 

              	
                Party
                  B fails to observe the relevant state laws and regulations
                  and those relevant to the industry, which damages Party A’s products and
                  reputation.

                 

              


      

      
        	
                 

                 

              	
                4.

                 

              	
                Party
                  B engages in any form of pirating activities in respect of
                  Party A’s products.

                 

              


      

      
        	
                 

                 

              	
                5.

                 

              	
                Party
                  B fails to provide after-sales service and technical support
                  to product users in accordance with Party A’s service standards and
                  service contents, which results in complaints by a large number
                  of
                  users.

                 

              


      

      In
        the occurrence of any of the below listed circumstances, Party B is
        entitled to terminate this agreement unilaterally without assuming any liability
        for breach of agreement:

       

      
        	
                 

                 

              	
                1.

                 

              	
                Party
                  A, without Party B’s consent, develops new franchisee within
                  the Hua Bei Region during the effective period of the
                  agreement.

                 

              


      

      
        	
                 

                 

              	
                2.

                 

              	
                Party
                  A fails to provide qualified products to Party B on schedule
                  in accordance with Party B’s ordering program, and the delay is more than
                  30 days after the agreed delivery time.

                 

              


      

      
        	
                 

                 

              	
                3.

                 

              	
                Party
                  A fails to promptly apply for inspection and quarantine
                  electronic service platform communication account numbers for users
                  developed by Party B as agreed in the agreement, and the account
                  opening
                  time is more than 20 days after Party B’s application time.

                 

              


      

      
        	
                 

                 

              	
                4.

                 

              	
                Party
                  A refuses to provide all product-related marketing and
                  training materials and the corresponding product and technical
                  training to
                  Party B.

                 

              


      

      
        	
                XII.

                 

              	
                Termination
                  of the Agreement

                 

              


      

      
        	
                 

                 

              	
                This
                  agreement is automatically terminated if the following
                  circumstances occur:

                 

              


      

      
        	
                 

                 

              	
                1.

                 

              	
                Expiration
                  of the agreement.

                 

              


      

      
        	
                 

                 

              	
                2.

                 

              	
                During
                  the effective period of the agreement, with the unanimous
                  consent of both parties through consultation.

                 

              


      

      
        	
                 

                 

              	
                3.

                 

              	
                Both
                  parties fail to reach consensus on a request by either party
                  to modify the agreement, which makes the continued performance
                  of this
                  agreement impossible.

                 

              


      

      
        	
                XIII.

                 

              	
                Renewal
                  of the Agreement

                 

              


      

       

      120
        days before the expiration of the agreement, either party to the
        agreement should notify the other party in writing whether they wish to renew
        this agreement. If both parties reach unanimity through consultation, this
        agreement will be renewed. The failure of either party to notify the other
        party
        within the prescribed time limit will be 

       

      
        	
                 

                 

              	
                4

                 

              


      


      


       

    

    
      regarded
        as its termination of this agreement, and the other party is
        entitled to take any measures without assuming any liability for breach of
        agreement.

       

      
        	
                XIV.

                 

              	
                Force
                  Majeure

                 

              


      

      Force
        majeure refers to events that both parties could not foresee when
        they made the agreement, and for which they cannot prevent the occurrence
        and
        cannot overcome the consequences.

       

      If
        it is impossible for one party to perform this agreement due to force
        majeure, it should promptly notify the other party of the reasons why it
        is
        impossible to perform or needs to delay the performance or perform part of
        this
        agreement, and it should provide legally valid supporting documents. Through
        consultation by both parties, the delay of the performance or the performance
        of
        part of the agreement or the non-performance of this agreement is permitted,
        and
        part or all of the liability for breach of agreement may be exempted in
        accordance with the particular circumstances. If a force majeure event occurs
        after the party concerned has delayed the performance, it may not be exempted
        from all liability for breach of agreement.

       

      
        	
                XV.

                 

              	
                Liability
                  for Breach of Agreement

                 

              


      

      
        	
                 

                 

              	
                1.

                 

              	
                If
                  the continued performance of this agreement is impossible due to
                  the fault of either party under this agreement, the defaulting
                  party
                  should pay a corresponding breach penalty to the other party. The
                  amount
                  of the breach penalty will be 10 percent of the amount of the
                  agreement.

                 

              


      

      
        	
                 

                 

              	
                2.

                 

              	
                If
                  Party B fails to settle with Party A within prescribed time
                  limit, Party B should pay a delay charge to Party A at a rate calculated
                  in accordance with the bank lending interest rate for the corresponding
                  period. The calculation basis is the amount of the products payments
                  arrears and the time period.

                 

              


      

      
        	
                 

                 

              	
                3.

                 

              	
                If
                  Party A fails to provide qualified products to Party B within
                  prescribed time limit, Party A should pay a delay charge to Party
                  B at a
                  rate calculated in accordance with the bank lending interest rate
                  for the
                  corresponding period. The calculation basis is the amount of the
                  goods
                  settlement arrears and the delayed delivery period.

                 

              


      

      
        	
                XVI.

                 

              	
                Resolution
                  of Disputes

                 

              


      

      If
        a dispute arises in the course of the performance of this agreement,
        both parties should engage in friendly consultation. If it is impossible
        for
        both parties to reach unanimity through consultation, they may apply for
        arbitration, and either party who is not satisfied with the arbitral awards
        may
        appeal to the People’s Court.

       

      
        	
                 

                 

              	
                5

                 

              


      


      


       

    

    
      
        	
                 

                 

              	
                XVII.

                 

              


      

      Matters
        not covered by this agreement will be settled through
        consultation by both parties and confirmed in the form of attachments to
        the
        agreement signed by both parties. The attachments are inseverable parts of
        this
        agreement, and they have same legal effect as the agreement.

       

      The
        original of this agreement and its attachments consist of four
        identical copies, and each party keeps two copies. This agreement takes effect
        after being signed and sealed by both parties.

       

      
        	
                Party
                  A

                 

              	
                :

                 

              	
                Beijing
                  Ninetowns Network and Software Co., Ltd.

                 

              	
                 

                 

              	
                Party
                  B

                 

              	
                :

                 

              	
                Beijing
                  Ninetowns Xin He Software Technology Co., Ltd.

                 

              
	
                 

                 

              	
                 

                 

              	
                 

                 

              	
                 

                 

              	
                 

                 

              	
                 

                 

              	
                 

                 

              
	
                 

                 

              	
                 

                 

              	
                [Seal]

                 

              	
                 

                 

              	
                 

                 

              	
                 

                 

              	
                [Seal]

                 

              
	
                 

                 

              	
                 

                 

              	
                 

                 

              	
                 

                 

              	
                 

                 

              	
                 

                 

              	
                 

                 

              
	
                Party
                  A’s Representative (Seal):

                 

              	
                 

                 

              	
                Party
                  B’s Representative (Seal):

                 

              
	
                 

                 

              	
                 

                 

              	
                 

                 

              
	
                Date:
                  December 26, 2006

                 

              	
                 

                 

              	
                Date:
                  December 26, 2006

                 

              


      

       

      
        	
                 

                 

              	
                6