Sample Business Contracts

Automotive Purchase Contract - Shenyang Brillance Hance Automotive and JingZhou HengLong Automotive Parts Co. Ltd.

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                       Shenyang Brillance Hance Automotive
                                Purchase Contract

              Party A: Shenyang Brillance Hance Automotive
              Party B: JingZhou HengLong Automotive Parts CO., Ltd.

The Place of Sign: Shenyang, China
The Date of Sign: Oct. 13th, 2003



     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: 14th Sanzuizi Road, Dadong District, Shenyang City.
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 mark 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  mark 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,
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 Hance Automotive

Party B: JingZhou HengLong Automotive Parts CO., Ltd.