Original Equipment Manufacturer (OEM) Agreement between Befut Electric (Dalian) Co., Ltd. and Dalian Befut Wire & Cable Manufacturing Co., Ltd. Dated February 16, 2009
Original
Equipment Manufacturer (OEM) Agreement
between
Befut
Electric (Dalian) Co., Ltd.
and
Dalian
Befut Wire & Cable Manufacturing Co., Ltd.
Dated
February 16, 2009
1
This OEM
agreement (“Agreement”) is made as of February 16, 2009 in Dalian by and
between
Befut
Electric (Dalian)Co., Ltd. as the assignor
Principal
place of business:Lingang Industrial District of Changxing Island,
Dalian
Legal
representative: Xxxxxx Xxx Hereinafter referred to as “Party A”.
and
Dalian
Befut Wire & Cable Manufacturing Co., Ltd. as the assignee
Principal
place of business: 00-0 Xxxxxx Xxxxxx, Xxxxxx Xxxxxxxx, Dalian
Legal
representative: Xxxxxx Xxx
Hereinafter
referred to as “Party B”.
Whereas:
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1.
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Party
A is a wholly foreign owned enterprise that is duly incorporated, validly
existing and, among other things, engaged in the business of developing,
manufacturing and selling cable
wires;
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2.
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Party
B is a limited liability company that is duly incorporated and validly
existing under the laws of the People’s Republic of China and capable of
and experienced in manufacture and sales of wires and cables; machining;
wholesale and retail of mechanical and electrical equipment (automobiles
excluded) and building materials; and import and export of goods and
technologies;
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3.
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For
the purposes of its manufacture and operation, Party A desires to
authorize Party B, and Party B agrees, to manufacture and supply OEM
Products; and
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2
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4.
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The
boards of directors of both parties hereto have adopted
resolutions approving the execution and performance of this
Agreement;
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NOW,
THEREFORE, in consideration of the mutual agreements and undertakings set forth
below, and for other good and valuable consideration, the parties agree as
follows:
I.
Definition
1.1
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Unless
otherwise specified herein, the following phrases shall bear the meanings
as defined below in this Agreement:
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(1)
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“OEM
Products” means products listed in Annex I of this
Agreement.
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(2)
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“China”
means the mainland of the People’s Republic of China, excluding Hong Kong
Special Administrative Region, Macao Special Administrative Region and
Taiwan.
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(3)
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“Intellectual
Property Rights” means, collectively, patents, trademarks, copyrights,
designs and all other intellectual property rights related to all the OEM
Products and their applications in the worldwide, whether registered or
not.
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(4)
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“OEM
Fees” means the price charged as per Section 8 of this Agreement in
consideration of the OEM services provided by Party B under this
Agreement.
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II.
Contractual Arrangements and Services
2.1
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Under
this Agreement, Party B shall provide Party A with OEM services, i.e.
manufacturing and processing OEM Products, on an exclusive basis. Such OEM
services shall be provided in accordance with the terms and conditions
contained in the orders submitted by Party A to Party
B.
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2.2
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Party
A shall, on a monthly basis, submit the orders for OEM Products to be
supplied in the coming month, indicating the quantities and scheduled
delivery dates, etc., and its detailed contents shall be mutually
determined by the actual performance of the
Agreement.
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2.3
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Party
B shall not assign the OEM services under this Agreement, in whole or in
part, to any third party without Party A’s prior written
consent.
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3
2.4
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The
OEM services under this Agreement shall be provided on an exclusive basis
and without Party A’s prior written consent, Party B shall not accept any
orders for OEM services from any third party other than Party A, nor
use Party A’s production capacity of wires and cables for the
manufacture of Party B’s own
products.
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III.
OEM Products
3.1
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Party
B shall, under this Agreement, manufacture OEM Products in accordance with
Party A’s specifications and requirements. Party B is not responsible for
the design of the OEM Products.
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3.2
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Raw
materials required for manufacturing OEM Products shall be provided by
Party A and purchased, shipped and delivered to Party B at Party A’s cost.
Risk of loss or damage of the raw materials shall be passed to Party B
upon delivery.
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3.3
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Party
A shall provide Party B with the design drawings and samples of OEM
Products, as well as other documents that Party B may reasonably require
for manufacturing OEM Products, within 30 days after execution of this
Agreement. Party B shall manufacture OEM Products in accordance with the
above-mentioned design drawings and
samples.
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3.4
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Party
A shall give Party B advance notices in writing of any change or
modification to the design drawings or samples of OEM
Products.
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IV.
Delivery and Acceptance of OEM Products
4.1
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Party
B shall deliver, before the 5th
the day of each month, Party A’s monthly order for OEM Products at such
location(s) as Party A may
designate.
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4.2
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Risk
of loss or damage of OEM Products shall be passed to Party A upon delivery
to Party A at such location(s) as Party A may
designate.
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4.3
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Party
A shall inspect and test OEM Products within 2 days after delivery thereof
by Party B. Should any dispute arise between the parties hereto with
respect to Party A’s acceptance criteria on OEM Products, such dispute may
be submitted to a competent quality supervision authority for
investigation. The findings of such investigation shall be
final.
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V.
Responsibilities and Obligations
5.1
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Party
A’s Obligations
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(1)
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Party
A shall exercise its rights, fulfill its obligations and cooperate with
Party B in good faith during the term of this
Agreement;
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(2)
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Party
A shall, upon Party B’s request, provide Party B with the information (in
writing or other forms) required for manufacturing OEM Products and
necessary technical instruction and support as well;
and
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(3)
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Party
A shall pay OEM Fees in a timely
manner.
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5.2
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Party
B’s Obligations
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During
the term of this Agreement, Party B shall:
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(1)
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manufacture
OEM Products in accordance with the terms and conditions contained
herein;
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(2)
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deliver
OEM Products to Party A in a timely manner in accordance with the terms
and conditions contained herein;
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(3)
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ship
OEM Products to the location of delivery stipulated herein and assume any
expenses and risk of loss or damage thus
incurred;
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(4)
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in
no case use the arrangements hereunder for commercial or noncommercial
marketing or promotional activities in any
form;
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(5)
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use
its best efforts to protect Party A’s interests and in no case take any
action that may result in the conflict between its own interests and its
obligations hereunder;
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(6)
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upon
Party A’s reasonable request, give Party A reports in a periodic manner on
the performance of this Agreement;
and
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(7)
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obtain
certificates, licenses and approvals that are required to perform this
Agreement from the competent governmental agencies in China, and bear the
costs and expenses incurred for maintaining the valid status of such
certificates, licenses and
approvals.
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VI.
Representations and Warrants
6.1
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Party
A’s representations and warrants
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(1)
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Party
A is a wholly foreign owned enterprise that is duly incorporated and
validly existing under the laws of the People’s Republic of China;
and
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5
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(2)
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The
execution and performance of this Agreement is not found in breach of
Party A’s Articles of Association or any legal instrument to which it is a
party or by which it is bound. This Agreement, as executed, will
constitute legal and binding obligations of Party
A.
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6.2
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Party
B’s representations and warrants
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(1)
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Party
B is a limited liability company that is duly incorporated and validly
existing under the laws of the People’s Republic of China;
and
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(2)
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The
execution and performance of this Agreement is not found in beach of Party
B’s Articles of Association or any legal instrument to which it is a party
or by which it is bound. This Agreement, as executed, will constitute
legal and binding obligations of Party
B.
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(3)
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Party
B has obtained certificates, licenses and approvals that are required to
perform this Agreement from the competent governmental agencies in
China.
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VII.
Intellectual Property Rights
7.1
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Party
B shall not
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(1)
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acquire
or infringe Party A’s intellectual property rights, including but not
limited to using or disclosing Party A’s intellectual property rights to
any third party except for the purpose specifically set forth
herein;
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(2)
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reproduce
or duplicate any part of any OEM Products, or manufacture or sell any
products similar to OEM Products in China, whether such products will
result in confusion or fraud or
not;
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(3)
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claim
any interest, ownership or right in any intellectual property right or
register or seek registration of such interest, title or right in any
place in the world in the name of Party B or on behalf of any third
party;
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(4)
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commit
or authorize any third party to commit any act or omission that will or
will be likely to result in invalidity of or impairment to any
intellectual property right.
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7.2
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Nothing
contained herein shall constitute a grant of any proprietary right of any
kind with respect to any intellectual property to Party
B.
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7.3
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If
this Agreement is terminated for any reason, Party B shall immediately
cease all use of any intellectual property and, as per Party A’s
instructions, destroy or return all materials to Party A, including but
not limited to any electronic copies
thereof.
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7.4
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It
is agreed that the provisions of Section 7 will survive any modification,
cancellation or termination of this
Agreement.
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VIII.
OEM Fees
8.1
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During
the term of this Agreement, Party B shall be entitled to OEM Fees
stipulated herein for OEM services provided under this
Agreement.
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8.2
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OEM
Fees shall be determined by the parties hereto separately but in no case
shall such OEM Fees exceed the actual costs of the same products
manufactured by Party A.
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8.3
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Party
A shall pay OEM Fees incurred within the previous month to Party B before
the 26th day of each month.
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IX.
Confidentiality
9.1
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Unless
otherwise stated, Party B shall not disclose any proprietary information
or trade secret in or relating to OEM Products coming to its knowledge
without Party A’s prior written
consent.
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9.2
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Party
B shall, only with Party A’s prior written consent, disclose any
proprietary information or trade secret
to:
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(1)
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any
governmental agency that has the authority to demand such disclosure;
or
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(2)
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any
officer, employee or professional adviser of Party B on a “need to know”
basis.
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9.3
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It
is agreed that the provisions of Section 9 will survive any modification,
cancellation or termination of this
Agreement.
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X.
Force Majeure
10.1
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Should
either party affected by any Force Majeure event fail to perform all or
any part of its obligations under this Agreement, the performance of such
obligations shall be suspended throughout the duration of the force
majeure event.
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10.2
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The
Party claiming to be affected by a Force Majeure event shall notify
the other Party in writing of the occurrence of such event as soon as
possible, and shall, within 2 days after the occurrence of such
event, provide the other Party by courier service or registered mail
with appropriate evidence in support of the occurrence of the event
of Force Majeure and the period of its occurrence. The Party claiming
that its performance of the Agreement has become impossible or
impracticable due to a Force Majeure event shall make all reasonable
efforts to eliminate or minimize the effects of such event of Force
Majeure.
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10.3
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When a
Force Majeure event occurs, both Parties shall immediately consult with
each other regarding the performance of this Agreement, and shall
immediately resume their respective obligations under this Agreement upon
the termination or elimination of the Force Majeure event. This Agreement
may be terminated if the duration of such Force Majeure event and its
effects shall continue for more than 2 months without being
terminated or eliminated.
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XI.
Breach
11.1
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Party
B’s liabilities for breach of this
Agreement
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(1)
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In
the event that Party B fails to deliver OEM Products as per the quality
criteria stipulated herein, Party A shall have the right to require Party
B to repair, rework or replace the OEM Products concerned. Party B shall
meet such requirements within 5 days of receiving Party A’s notice at its
own expenses thus incurred and be liable for breach of the Agreement for
delayed delivery. If OEM Products, after repair, rework or replacement,
still fail to conform to the quality criteria stipulated herein, Party A
may at its discretion reject all or any part of OEM Products. In this
case, Party A shall be liable to a sum of penalty amounting to 0.5% of OEM
Fees, in addition to refunding OEM Fees already paid by Party A and paying
the liquidated damages stipulated herein. If the aforesaid amount is not
enough to compensate Party A for the losses incurred (whether direct or
indirect), Party B shall compensate Party A for the balance
amount.
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(2)
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In
the event of delayed delivery by Party B, Party B shall be liable to the
penalty at 0.5% of OEM Fees for each day of delay. If Party B fails to
deliver OEM Products stipulated herein within 10 days after the scheduled
delivery date, then without prejudice to other remedies available under
this Agreement including but not limited to penalties and damages, Party A
reserves the right to terminate this Agreement, be refunded of OEM Fees
already paid by Party A to Party B and compensated by Party B for any and
all losses thus incurred (whether direct or
indirect).
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(3)
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In
the event of Party B’s breach of other obligations hereunder, Party A may
at its discretion terminate this Agreement immediately and/or ask Party B
to cease such breaching activities and take remedial actions as required
by Party A to correct them and compensate Party A for any and all losses
thus incurred (whether direct or
indirect).
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11.2
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In
the event of delayed payment by Party A, Party A shall be liable to the
penalty at 1% of the OEM Fees due and unpaid to Party B for each day of
delay.
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11.3
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Unless
otherwise provided herein, failure of either party to perform its
obligations hereunder and take effective remedial actions within 3 days of
receiving the non-breaching party’s written notice, which requires
the breaching party to correct its activities in limited days, shall allow
the non-breaching party to terminate this Agreement and claim for
compensation for losses thus incurred from the breaching
party.
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XII.
Governing Law and Dispute Settlement
12.1
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This
Agreement shall be governed by and construed in accordance with the laws
of the People's Republic of China.
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12.2
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Any
disputes arising from or in connection with this Agreement shall be
resolved by the parties hereto through consultation. If the dispute cannot
be settled in the aforesaid manner, either Party shall have the right to
submit the dispute to the China International Economic and Trade
Arbitration Commission for arbitration in accordance with the Commission's
arbitration rules then effective at the time of the submission of the
arbitration in Beijing, the seat of arbitration. The arbitration award
shall be final and binding upon both
parties.
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XIII.
Notice
13.1
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Notices
and communications required to be given by any Party pursuant to this
Agreement may be delivered by email, courier service or registered mail to
the address of the other Party or sent by facsimile transmission to the
number of the other Party set forth
below.
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The
addresses, fax numbers and emails of the parties are as follows:
9
Befut
Electric (Dalian) Co., Ltd.
Address:
Lingang Industrial District of Changxing Island, Dalian
Zip code:
116011
Fax:
Email:
Contact
person: Xxxxxxx Xx
Dalian
Befut Wire & Cable Manufacturing Co., Ltd.
Address:
00-0 Xxxxxx Xxxxxx, Xxxxxx Xxxxxxxx, Dalian
Zip code:
116001
Fax:
Email:
Contact
person: Xxx Xx
If either
Party changes its address or fax number, it shall promptly notify the other
Party in writing of such change pursuant to this Section.
XIV.
Miscellaneous
14.1
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This
Agreement shall become effective upon signature and seal by the
legal/authorized representatives of the parties hereto. This Agreement
shall remain effective unless and until terminated by Party A with a
written notice and, in this case, this Agreement shall cease to be in
force upon delivery of such written notice by Party A to Party B. It is
acknowledged that the parties hereto shall not terminate or cancel this
Agreement within 180 days after the day of signature, nor alter
or modify the provisions of this
Section.
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14.2
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As
a part of this Agreement, Party B hereby grants Party A or one or more
persons designated by Party A (a “Assignee”) irrevocably an exclusive
right (“Preemption Right”) to purchase, as per the procedure in Party A’s
sole discretion and at the price mutually agreed, Party B’s assets or any
part of them to the extent as permitted under the laws of the
People’s Republic of China then applicable; Party B warrants, to the
extent as permitted under the laws of the People’s Republic of China then
applicable, it will cause the shareholders of Party B to grant Party A or
its Assignee irrevocably an exclusive right (“Right of First Refusal”) to
purchase, all or in part, shares in Party B held by such shareholders.
Such Preemption Right or Right of First Refusal shall not be made
available to any third party other than Party A or its
Assignee.
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14.3
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Matters
not covered herein shall be resolved by the parties hereto through
consultation.
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14.4
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Neither party
should assign all or any part of its rights or obligations under this
Agreement without the written consent of the other
party.
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14.5
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This
Agreement and the Annex attached hereto constitute the entire agreement,
and supersede all previous oral and written agreements, contracts,
understandings and communications of the parties with respect to the
subject matter set forth herein.
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14.6
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Any
provision hereof that becomes illegal, invalid or unenforceable will not
affect the validity and enforceability of the remaining provisions of this
Agreement.
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14.7
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Any
amendment to this Agreement or its annex may be made and valid only
pursuant to a written agreement executed by the authorized representatives
of the parties hereto.
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14.8
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Unless
otherwise provided in this Agreement, any delay or failure on the part of
any Party hereto to exercise any right, power or privilege under this
Agreement shall not constitute a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege preclude the exercise of
any other right, power or
privilege.
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(The next
page is the signature page of the OEM Agreement.)
11
(This is
the signature page of the OEM Agreement.)
Party
A:Dalian Befut Wire & Cable Manufacturing Co., Ltd.(official
seal)
Authorized
Representative: /s/ Xxxxxx
Xxx
Date: February 16,
2009
Party B: Befut Electric (Dalian) Co.,
Ltd. (official
seal)
Authorized
Representative: /s/Xxxxxxx
Xx
Date: February 16,
2009
12
Annex
I
List of
OEM Products
Electric
Cable
Marine
Cable
Mine
Cable
Nuclear
Cable
Petrochemical
Cable
Submarine
Cable
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