Exhibit 10.3
Shenyang Brillance Xxxxx Automotive
Purchase Contract
Party A: Shenyang Brillance Xxxxx Automotive
Party B: JingZhou HengLong Automotive Parts CO., Ltd.
The Place of Sign: Shenyang, China
The Date of Sign: Oct. 13th, 2003
PREFACE
Both parties agreed the following items and reach the agreement as follows
based on long-term co-operation relationship:
Clause 1 Purchase Order:
1."The Party A" should purchase the goods from "The Party B" via the purchase
order. The purchase order as a formal contract, it aimed to confirm the name,
price, quantity and destination of contract products. The purchase order will
come into force after signed by authorized person of both parties. The signed
purchase order becomes a part of the contract and have the same legal power as
the contract (referred to Appendix 1). 2.The purchase order is also acting as a
delivery timetable by "The Party A" to "The Party B". The aim of the purchase
order is for "The Party B" to fulfills the order in terms of delivery time and
quantity. The signed purchase order becomes a part of the contract and have the
same legal power as the contract (referred to Appendix 2). Storage : To guaranty
production of part A , Party B should deliver the contract products to the
destination Shenyang. And storage must be at least 1 month supply . 4.The Party
A have the rights to change/cancel the quantity of the purchase order from the
time to time according Party A's market and progress situation. The
above-mentioned change are based on quality, delivery time and after sales
service by Party B.
Party B should supply the contract products to Party A for their production
and after sale products. Party B should follow the specification specified by
Party A and it is not allowed to supply contract products and technical
information owned by Party A to third party by any way without previous agreed
by Party A.
Clause 2 Quality Guaranty
1. All the contract products should meet the specification of government quality
control standard and also meet the current quality control by Party A. The
quality of production process should final proved by Party A.
2. All documentation relevant to delivered products should have been filed at
least 2 years
3. Part A reserve the right to appoint representative to audit all process at
part B manufacturing site when it necessary, process including material
in-coming, manufacturing process and quality system.
4. Components service after-marketing: Part B should supply after-marketing
components during products quality guaranty time. Quality guaranty time should
be 2.5 years or 70,000km.
5. The faulty of vendor's quality refer to "Auto parts supply agreement".
Clause 3 Package of Contract Products
1. The package of contract products used by Party B should proved by Party A and
both parties should sign the agreement of Products Package.
2. Part B should meet the package specifications specified be Party A except
specified otherwise.
3. Part B should meet the package specifications specified be Party A for spare
parts and after sale service parts except specified otherwise.
Clause 4 Delivery
1. Transportation: Truck on landway.
2. Delivery time, quantity and part description must be accord to part A
purchasing planning.
3. Delivery destination: 00xx Xxxxxxxx Xxxx, Xxxxxx Xxxxxxxx, Xxxxxxxx Xxxx.
4. Delivery term: Part B should submit document list below: Products List,
Products Quality Certification, Products All Dimensional Report.
Clause5 Payment
1. Party A should pay the amount equal to products price amount of "purchase
order" to Party B.
2. The period of payment: According the "Table of Inventory", Party A should
make a payment of 90 days via bank. It required Party B issue the invoice. If
Party B delivered the contract products in advance, Party A should make the same
payment period through the bank.
3. Party A have the rights deduct the amount of defect parts, missing parts and
late delivered parts.
4. Party B should offer the real accounts to Party A. unless there is Party A to
agree in writing in advance, Party A does not take the obligation to pays the
third party the payment for goods.
5. Party B should provide the special invoices of increasing taxes with standard
form. Party B should mail by express or send directly the invoices to appointed
purchasing department of Party A and require "invoice receipt". Otherwise cause
payment overdue or lose the invoice, the consequence is undertaken by Party B.
Clause 6 After-marketing parts
1. Part B must supply enough after-marketing parts and xxxx part description.
2. After-marketing parts must delivery to part A appointed warehouse.
Clause 7 Confidentiality & Industrial Property Right
1. Have not been agreed in writing in advance, Party B should not disclose any
technology from Party A to the third party.
2. Party B should get the permission from Party A if there is necessary to offer
the technology of Party to Subordinate supplier who will also take the
confidentiality obligation.
3. Party B should require its worker to take the corresponding confidential
obligation in written form.
4. Party A also should take the confidential obligation with the technology
which relevant to develop parts of contract.
5. The supplier of party B have the right to use the technology that Party A
offered within this contract period, and it will not bring the transformation of
the technological ownership.
6. Party B should bear all the responsibility and claim compensation, if use the
contract parts purchased according to this contract terms infringe the third
party's industrial property with responsibility of Party B
7. Party B should guarantee that Party A and its customer do not bear any
responsibility with above-mentioned industrial properties . The following case
will not belong to the regulation if Party B produce and supply contract
products with the drawing of Party A offered and it is impossible to know that
has already infringed the third party's industrial property. In case of this,
Party A should guarantee that Party B will not get any claim compensation or
loss from the third party.
8. When Party A put forward the request, Party B should inform Party A as to all
the things of industrial property related to contract products, No matter these
industrial properties belong to Party B , or is permitted using, or any
industrial property given special approval to.
9. The trade xxxx of part A should only used for supplying Party A with
production or after sale.
Clause 8 Products Duty
1. If the third party accuse Party A of the defect contract products cause
automobile damaged or personal/property lost, which the products was offered and
installed by Party B, and claim for compensation or prosecute, then Party A
should inform Party B with the fax or the telephone immediately.
2. Party B should participate in the investigation, technical inspection,
technologic arbitrage and offer all essential/necessary information during the
above-mentioned arbitrate. If the lawsuit takes place, the- both sides should
participate in dealing with arbitrate together.
3. Both parties should determine the reason of the claim compensation basis of
information, appeal and judgment (If have).
4. If the product responsibility totally caused by Party B's fault, then Party B
should agree and undertaken that Party A is free of bearing all expenses related
to what the third party put forward claim and lawsuit, Including attorney fee,
court costs, etc.
5. If the product responsibility totally caused by Party A's fault,, then Party
A should agree and undertaken that Party B is free of bearing all expenses
related to what the third party put forward claim and lawsuit, Including
attorney fee, court costs, etc.
6. If the products responsibility imputed to this both sides. Both sides should
consult each other on how to state the claim most effectively.
7. The compensation of the damage of the automobile or its parts; bodily injury
and property loss that the third party suffered; other costs that relevant to
claim compensation and lawsuit, such as: Investigation fee, technical
inspection, technologic arbitrate cost, attorney fee, court cost.
Clause 9 The Responsibility for Breach of Contract
Part B must be responsible to defect listed below:
1. Material, manufacturing process and package default.
2. Design default.
3. Delivery time.
4. Quality problem during quality guaranty time.
5. Any default caused by part B. Either part reserve the right to terminate
contract in case of enter-counter breach the contract.
Clause 10 Force Majeure
1. The either party should bearing any obligation or responsibility, If fail to
fulfill a contract during force majeure occurs, but still comply with the other
clause of the contract. Both party should try their best to solve the matter
properly through the negotiation.
2. The party who suffer from the force majeure should inform another party
immediately by mail or fax or telegram, and have the obligation to prove the
influence from force majeure, duration and the influence of contract.
Clause 11 Contract Expiration
1. The contract will become into force after stamping both parties company
seals. Contract duration is one year. Namely from Oct 13th, 2003 to Oct. 13th,
2004
2. With the Party A cooperate with Party B lasting and stability , This contract
will automatically prolong if the either party has not propose terminate the
contract after expire in three months in this contract.
3. After this contract is terminate, Party B should stop the production of
contract products at the same time , And return all technological files to Party
A .
Clause 12 Arbitration
1. All disputes in connection with the contract or execution thereof shall be
settled friendly through negotiations. In case no settlement can be reached ,
the case may then be submitted for arbitration according to " contract law of
the People's Republic of China". The arbitration shall take place in Shenyang
Arbitration Committee.
2. two original of the contract in Chinese. Each Party one pc.
Party A: Shenyang Brillance Xxxxx Automotive
Representative:
Party B: JingZhou HengLong Automotive Parts CO., Ltd.
Representative:
