Components Purchase Contract
Contract
No. XRGFP-2008-02-0002
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Party
A (Buyer):
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Jiansu
Xinri Electric Bicycle Co., Ltd.
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Party
B (Supplier):
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Changxing
Chisen Electric Co., Ltd.
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Place
of Signing:
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Wuxi,
Jiangsu
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Time
of Signing:
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20-Mar-08
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Party
A
(Buyer): Jiansu Xinri Electric Bicycle Co., Ltd.
Party
B
(Supplier): Changxing Chisen Electric Co., Ltd.
After
friendly consultation, the both Parties agree to come into and strictly abide
by
this Contract on components purchase.
1. Representations
and Warranties
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1.1
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Party
A hereby represents and warrants that it is a legal person established
approved by the state, with complete legal status and good reputation,
and
has full authority to sign this Contract and to perform its obligations
hereunder.
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1.2
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Party
B hereby represents and warrants that it is a legal person established
approved by the state, with complete legal status and good reputation,
and
has full authority to sign this Contract and to perform its obligations
hereunder.
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1.3
Each
Party warrants that its signing and execution of this Contract will not violate
any provision of laws, regulations, agreements and policies in China and its
articles of association, and will not in collision with any contract or
agreement (including but not limited to warranty contract or agreement). Each
Party further represents and warrants to the other Party that it is in good
financial status without negative assets and does not acknowledge that its
creditor is entitled to appoint receiver or to file bankruptcy or exercising
other rights.
1.4
Each
Party agrees that: during the validity period of this Contract, each Party
shall
indemnify the other Party against any loss or damages due to its inaccuracy
in
representations and warranties hereinabove
2.
Definition
of Terminology
2.1
The
term “Component” means to the commodity that provided by Party B and can meet
the requirement for operation of Party A (including but not limited to
components, accessories, fittings, and specification). Party B warrants that
the
components it provides are qualified products meeting the requirement of state
law, regulation, standards and agreement and without violation of legal rights
to any third party.
2.2
The
term “unqualified product” means component provided by Party B that is found not
meet the requirement of state law, regulation, standards or Party B’s warrants
or Party A’s requirement during the operation of Party A(including but not
limited to production, assembling, sale and after-sales
service)
2.3
The
term “reputation loss” of Party A herein means having negative effect on Party
A’s reputation, trademark, business name, business credit, including but not
limited to the c herein under:
(a)
There
has negative publicity of Party A on media (including but not limited to TV,
radio, newspaper, magazine, network)due to Party B’s fault(including but not
limited to quality problem, fake products, false propaganda, infringing
intellectual property right, after-sales service or other problems) ,or being
listed on public notice by related administrative department or
organization(including but not limited to consumer association, administration
for quality supervision, third party laboratory, notary public
office)
(b)
Negative publicity does not exist, but many people consider or acknowledge
that
Party A’s component has quality problems or service problems.
(c)other
issues that has negative effect on Party A’s reputation, trademark, business
name, business credit.
3.
General Rules
3.1
Party
A and Party B conduct business in accordance with this Contract under the
principle of equality and mutual
benefit,
honesty and faithfulness.
3.2
In
accordance with the Contract, Party B, the seller, shall sell continually the
components, materials and auxiliary materials to party A, the
buyer.
3.3
The
group that Party A represents owns large consumer group and considerable social
influence. Party A is engaged in providing best goods and service to improve
the
consumer satisfaction and to establish the brand
connotation
in order to provide a high-effective platform to Party A. Party B ensure best
price of components to Part A, ie. providing the price lower than the price
on
the same components it provide to any third party and adjust the price in
accordance with the market to maintain the market competition capacity of the
both parties.
3.4
Desiring to protect the interest of the both parties, under any condition during
the validity period of this Contract, Party B shall ensure the priority of
supply of components to Party A to meet the requirements of operation and
market. Stable and continual supply is the base to the cooperation and mutual
benefits of the both parties but not the precondition of any dispute
settlement.
3.5.
The
annexes to this Contract, including Quality Guarantee Agreement, After Sales
Service Agreement, have equal legal force with this Contract.
3.6.
Supplementary Contract will be made on uncovered matters of this Contract if
necessary, and shall have equal legal force with this Contract.
4
Business
4.1
Price
4.1.1
Party B shall fill the appointed quotation with component name, specification,
expected price and detailed quotation, and provide the quotation to Party A
after signing and stamping. The price of components will be set after
negotiation of both parties with written consent.
4.1.2
Unless
the terms or context of the contract otherwise provided, the unit price, packing
charge, transport expense from Party B to Party A, storing, insurance are
include in the price of the component.
4.1.3
Party B shall be responsible for the test
charge
of any third party, including the charge for periodic test of the component
and
the authorized test.
4.1.4
Packing Standard: Party B shall apply circulation box, paper box or wood box
for
packing and to meet the requirement for sturdy package, no chip
and
no scratch, reasonable
setup, separating the components with expanded plastic or paper board. The
mark
in the outside packing box shall meet the requirement of Party A, ie, having
clear signs for supplier, component name, specification, quantity of each box,
etc. Party B will not responsible for the recycling of package except the
circulation boxes. If Party B requires the recycling for package, the recycling
mode shall be set by additional contract. Any special requirement for the
package shall be specified by additional contract.
4.2
Delivery
4.2.1
Party A will inform Party B of the delivery plan (including component name,
specification, quantity, technical standard, special requirement, delivery
time
hereinafter referred to as the “Plan”)in accordance with the requirement in
writing through fax, email, etc.
4.2.2Party
A shall inform Party B of any adjustment to the Plan in the way specified in
provision of 3.2.1
4.2.3
Party B shall appoint special person for receiving and handling the Plan of
Party A. If Party B holds different opinions towards the Plan of Party A, it
shall notify Party A in writing within 24 hours. Otherwise, it shall be deemed
as acceptance of the Plan.
4.2.4
Party B shall deliver in time the qualified components with the delivery list
recording the name, code, specification, quantity of the components. Party
A
shall sign in acknowledgement of receipt for actual quantity
received.
4.2.5
Where Party B could not deliver the goods complying with the requirements
hereinabove, it shall notify Party A in writing within the time the Parties
agree separately and inform Party B of the reason, delivery time on
schedule
and
solutions
complying with the requirement of Party A.
4.2.6
Party B shall indemnify Party A for losses and damages caused by Party’s
nonfulfillment of obligations under Privisions 4.2.3, Privisions 4.2.4 or
Privisions 4.2.5.
4.2.7
In
case the quantity of goods delivered by Party B exceeds that prescribed on
the
Plan, Party A is entitled to reject
the goods.
4.2.9
Party B shall guarantee the inventory of raw materials, semi-finished products
and finished product for the normal continuous supply of
components.
4.2.10
Party B shall warrant steady and continuous production conditions. If Party
B
plans to stop supply, it shall notify Party A in writing one month in advance
when it stops supply temporarily and there months in advance for a long period.
Otherwise, Party A reserves the right to stop the payment temporarily, and
Party
B shall be responsible for the losses and damages of Party A.
4.3
Acceptance Standard and Method
4.3.1
The
quality and technical standard shall completely comply with the requirement
of
drawing, specification and sample confirmed by Party A. Party A shall confirm
the standard by signing and sealing on the materials hereinabove. Except with
the written approval by Party A, Party B could not change the production
technology, equipment, materials, specification, and factory of the components.
Party B shall make delivery of the components to the appointed place of Party
A
and Party A shall make sample inspection on the goods within 48 hours. In case
of any quantity or quality discrepancy, Party A shall notify Party B in writing.
If Party B has an objection, it shall apply for re—inspection or send special
person to Party A’s side for confirmation. If Party B does not file an objection
within 120 hours after the arrival of goods, it shall be deemed that the
components pass the acceptance inspection.
4.3.2
The
ownership of components is transferred from Party B to Party A since Party
A
uses them.
4.4
Payment Method and Term
4.4.1
The
payment shall be clear off every N/A_days,
each
month,
(each
batch or each month). ( in accordance with the price agreement)
4.4.2
Payment shall be made in 1
subject to the contract.
1.
cheque
or telegraphic transfer
2.
___months Bank’s Acceptance Bill without interest clause
3.
___months Trader’s Acceptance ▇▇▇▇ without interest clause
4.4.3
From the 1st to the 10th day of each month, Party A will check the account;
from
the 11th to the19th day of each month, the Parties shall confirm the account
reconciliation; from 20th
day
to
24th day of each month, Party B will replace the defective products and
after-sales components at sight for Party A; from 10th to 15th day of each
month, Party B shall issue VAT invoice to Party A, whereafter Party A shall
clear off the payment two months before. Where the components have quality
problem in batch, Party A is entitled to suspend the payment.
4.5
The
components stop the production; Party B shall ensure the supply of after-sales
components.
5
Breach
Liabilities
5.1
For
the purpose of stable quality of components, Party A shall deduct in part the
payment of Party B for performance bond
(performance bond is set in accordance with delivery quantity and value, and
shall be deducted from the goods payment of each batch, the Parties shall make
adjustment to the performance bond if the return & repair rate is larger
than the proportion agreed by both parties or the supply is increasing.), and
refund it to Party B within two months after the
expiration date
of
warranty period for the components.
5.2
Where
Party B could not make delivery at time and quantity prescribed in the Plan,
in
case of short delivery of the goods those Party needs, Party B shall make
delivery
of the balance
and
indemnify Party A against all losses and damages thereby; in case of delivery
over
required quantity, Party A is entitled to return the goods; in case of late
delivery, Party B shall indemnify
Party A against all losses caused thereby. Once delivery one hour later, Party
B
shall indemnify Party A 5‰
of
the
aggregate amount of payment, late deliver less than one hour shall be calculated
as one hour. Other indemnification shall be made in accordance with the damage
to Party A.
5.3
Where
the components Party B provides cannot meet the provision 4.3.1, provided that
Party A accepts the components after analyzing and judging, Party A shall notify
Party B the price in accordance with the quality in writing (or through E-mail),
and Party B shall reply within 8 hours, otherwise, it shall be deemed as consent
from Party B. Where the goods are judged as defective ones, Party B shall bear
the transportation charge for returning the goods and indemnify
Party B against all losses caused thereby.
5.4
In
case the components which Party A requires to return exceeds returning period,
Party A shall keep them with Party B bearing the storage
charge,
the storage
charge
is subject to Party
A’s
charging standard.
5.5
In
case of wrong delivery of the components. Party B shall make delivery to the
appointed place or person in accordance with the Contract and be responsible
for
the transportation expense and indemnification against the damage to Party
A
caused by late delivery.
5.6
Party
B shall keep secret Party’s special requirements for supply and the components
with independent
intellectual property rights. In case of any disclosure
due to
Party B’s fault, Party B shall be liable for the losses caused thereby. The
indemnification will be 4 to 20 times of the sales value of the products
provided to other factories or companies (not less than RMB 100,000
yuan)
5.7
Any
economical loss or damage to brand caused to Party A or Customer during the
production, sale or in use due to the quality problem of Party B’s components,
Party B shall confirm within 24 hours after receipt of Party A’s written notice
and indemnify Party A and Customer against any damage, or it shall be deemed
that Party B accepts Party A’s notice and processing results with the
compensation deducted directly from the payment or
performance bond.
5.8
Where
quantity of the defective products is found larger the agreed proportion of
the
components after Party A ’s inspection, Party A is entitled to reject the batch
of components or use them with discount equaling to 1%-10% of the aggregate
payment for the batch; where the quantity of the defective products exceeds
the
agreed proportion of the components for three times in sequence, Party A is
entitled to Cancel the contract with Party B bearing the economic losses
hereof.
5.9
During the validity period of the Contract, in case of reputation damage to
Party A caused by Party B (including Party B’s employees and related personnel
authorized by Party B) Party B bear responsibility for breach of the contract
from 100,000 yuan to 500,000 yuan. The compensation will be determined by Party
A independently. Party B shall make the indemnification within 10 days after
receipt of the claim on reputation damage from Party A (the damage claim shall
include the reality in detail and related materials).In case of late payment,
Party A will deduct directly from the unpaid payment.
6
Intellectual Property Protection
6.1
Where
Party B’s components are in connection with infringement of intellectual
property right of any third party or fake components or false publicity, Party
B
shall be responsible for the damage to Party A caused thereby. Party B shall
suspend the payment and notify Party B in writing once finding the breach to
the
Contract hereinabove. Since the date of delivering the notice:
6.1.1
Party B shall make compensation of 100,000 yuan within 3 days, and indemnify
Party A against all losses ( direct or indirect losses).
6.1.2
Where Party B’s components are in connection with infringement of intellectual
property right of any third party or fake components or false publicity, in
addition to Provision 6.1.1, Party B shall indemnify Party A against reputation
damage in an amount of 200,000 yuan within 5 days.
6.1.3
Where Party B does not indemnify Party B against losses or reputation damage
at
time prescribed herein, Party A is entitled to deduct directly from the payment
payable.
6.1.4
Party B shall responsible for unconditional
retune and related expense for the unsold tort components, fake components
or
the components in connection with false publicity.
6.1.5
Party A shall charge Party B damage reserve in an amount of 300%
of
the aggregate sales value (subject to Party A’s financial data) as security
deposit for the tort components provided by Party B. (after
the
expiry of prescription and the warranty period, Party A shall refund for any
overpayment or a supplemental payment for any deficiency.)
6.2
Party
B shall bear the transportation expense for change or return of the goods under
the condition
provided by this section.
6.3
Party
B cannot provide to any third party the components (including but not limited
to
test, sale, donation) in connection with Party A’s intellectual property
(including but not limited to trademark, patent, copyright, etc.) unless with
Party A’s written approval.
7.
Commercial Bribery Prohibition
7.1
The
Parties agree the prohibition of extorted or accepted bribes and other illegal
commercial behavior:. In case that Party B offer commercial bribery to Party
A’s
employee, employee’s relatives in any form(including but not limited to
backhander, entertainment, house property, employment, domestic or abroad
travelling, gift, discount shopping, loan to the Party A’s purchaser
),
Party A
is entitled to cancel the contract, and Party B agrees to make compensation
in
an amount of not less than 100 times of the bribe(no less than RMB
N/A
yuan
).
Serious cases can be submitted before the judiciary.
8.
Alteration , Cancellation, Termination and Expiry
8.1
Unless otherwise provided herein, Party A is entitled to cancel this Contract
under the condition as follows:
8.1.1
Party B stops supply to Party A without justified reason or Party fails to
supply to Party A exceeding 5 days of the agreed date after receipt of the
order.
8.1.2
Party B fails to make the payment unpaid subject to this Contract exceeding
one
month.
8.1.3
The
following conditions may occur to Party B, including but not limited
to:
Operation
risk arising out of negative news, significant changes in equity, significant
litigation, any other circumstance which will or may cause it to lose its
ability to perform obligation.
Party
A
can judge the above-mentioned conditions independently.
8.1.4
Party B breaches the Contract and does not rectify within 7 days after receipt
of the Party’s written notice.
9.
Force
Majeure
Where
one
party fails to perform the Contract due to force majeure, the liability for
the
losses due to force majeure shall be partially eliminated accordingly. The
Nonperforming party shall immediately notify the other party of the occurrence
of a Force Majeure within 48 hours, and furnish a written certification
describing the particulars of the occurrence and impact, otherwise the liability
of the nonperforming party shall not be eliminated; in case of delayed
performance of the Contract, the liability of the nonperforming Party shall
not
be eliminated notwithstanding occurrence of Force Majeure.
9.2
In
case of a Force Majeure event, the nonperforming party shall exercise effects
to
reduce the losses of the other party, otherwise it shall be responsible for
the
additional damage arising out of that the nonperforming party takes no
countermeasure or unsuitable countermeasures,.
9.3
Where
the Force Majeure event ends and will have impact on the performance under
this
Contract, the Parties shall exercise reasonable efforts to resume
performance.
10
Others.
10.1
Quality bond: N/A
10.2
Any
delete, alternation to the printing character without consent with signature,
seal of the parties herein shall be invalid.
10.3
The
Contract is made in triplicate, with Party A holding two originals and Party
B
holding one original, and shall come into effect after being signed and sealed
by the Parties.
10.4
The
Contract shall have same legal effect on successors or assignees to the
Parties.
11
Dispute Settlement.
Any
dispute shall be solved through negotiation. If no settlement can be reached,
the case in dispute shall be subjected to local People’s Court at the signing
place of this Contract.
12.
The
Contract shall take effect once being entered into and be strictly abided by
both parties.
13.
The
validity period of this Contract is from January 1st
of 2008
to December 31st,
2008.
If the parties have no objection, the Contract and its annexes shall be
automatically renewed for one year term within 10days prior to the expiry of
this Contract
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Supplier:
Jiangsu Xinri Electric Bicycle Co., Ltd.
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Buyer:
Changxing Chisen Electric Co., Ltd.
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(seal)
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(seal)
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Address:▇▇.
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▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇
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Address:
Jingyi Road, Changxing
Economic
Development Zone
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Legal
Representative: /s/ Authorized Representative
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Legal
Representative: /s/ Authorized Representative
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Entrusted
Agent: (signature)
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Entrusted
Agent:
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Opening
Bank:
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Opening
Bank
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Account
No.:
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Account
No.:
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Postal
Code:214104
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Postal
Code:
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