Memorandumof Understanding

EX-10.6 2 v182475_ex10-6.htm Unassociated Document

Exhibit 10.6
2010 Gome Home Appliance Co., Ltd. — Deer (brand)
(English Translation)
 
Memorandum of Understanding
 
Time of Negotiations: January 15, 2010 Friday
 
Place of Negotiations: Gome Home Appliance Co. (headquarters) 18th Fl Conference Room No. 31
 
Parties:

 
Party A: Guangdong Deer Consumer Products, Inc.
Party B: Gome Home Appliance Co., Ltd.

Persons in attendance:

Party A: Ying He (CEO), Chuanjing Zheng (Assistant to the President)
Party B: JunTao Li (Vice President), Yansong Xu (Department Chief), Lihai Zhou (Manager)

Contents of the Deer white-colored small appliances/Gome cooperation negotiation Memorandum of Understanding:

In order to increase its competitiveness in the home appliances retail chain-store industry, Gome selects qualified and compatible manufacturers to form in-depth cooperative operations. The specific contents of the cooperative operation are as follows:

 
I.
Cooperative operation model
 
 
1.
Both parties use the one-step pricing model;
 
 
2.
The length of the contract is three (3) years (2010-2012). Both parties then decide whether to renew the contract based on the circumstances of the cooperation;
 
 
3.
Sales are on a commission basis;
 
 
4.
Accounts settlement is centrally conducted by the Parties’ respective headquarters;
 
 
5.
Party A provides sample products. The settlement price of the sample product is 80% of the price of the supplied products;
 
 
6.
Agree to maintain the rate of damaged and faulty products under 2%.
 
 
II.
Division of the main functions and responsibilities of the Parties.
 
 
1.
Guangdong Deer Consumer Products, Inc. is responsible for:
 
i.
  
Product production, the formulation of delivery cycles and the safe execution thereof;
 
ii.
 
Delivery of the products to each of Gome’s distribution depots;
 
iii.
 
Support for the training of sales personnel (methods yet to be determined).
 
 
2.
Gome Home Appliance Co., Ltd. is systematically responsible for:
 
i.
 
Order placement;
 
ii.
 
Sales area layout;
 
iii.
 
Manufacture of display stands;
 
iv.
 
Management of sales personnel (hiring, daily management, training, wages and evaluation);
 
v.
 
Planning and execution of sales promotion events.
 
 
3.
Both Parties are responsible for:
 
i.
 
Product selection;
 
ii.
 
Set product price.
 
 
 
 
 
 
III.
Operation categories
 
In 2010, the primary categories are juicers, food processors and other food processing products; additional categories are separately determined.
 
 
IV.
Product profit margin standard
 
 
1.
Product profit margin for 2010 is no less than **% of consolidated profit;
 
 
2.
Parties will separately determine standards for 2010 [sic] and 2012.
 
 
V.
After-sales service
 
 
1.
Party A is responsible for after-sales service.
 
 
VI.
Implementation schedule of the cooperative operation project
 
Details of the cooperation workflow are to be completed by February 15, 2010; the contract is to be signed at the same time.
 
Party A: Guangdong Deer Consumer Products, Inc.
Party B: Gome Home Appliance Co., Ltd.
Representative: /s/ Ying He
Representative: /s/ JunTao Li
Date: 2010-01-15
Date: 2010-01-15

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