AGREEMENT FOR JEWELLERY ASSEMBLING
(TRANSLATION)
Party A: China Jewellery Import & Export Co.
Party B: Hang Fung Jewellery Co., Ltd.
Since 1992, both parties had successful cooperation in assembling of gold,
silver and karat-gold jewelry. Through friendly consultation, both parties have
renewed their original agreement and have worked out the following agreement.
1. Responsibilities of Both Parties
1.1 Party A
Provide factory premises, water & electricity supply, labor and other
supporting facilities, transportation and declaration for import &
export of equipment, machinery, materials and products; assist Party B
in applying for required legal documents.
1.2 Party B
Provide the equipment, tools, and materials to the assembling and
processing plant, Yi Lan Jewellery Factory, in Beijing for jewellery
assembling. The total value of the equipment and material contributed
shall be HK$25,000,000. Party B shall have the ownership right of all
the equipment and material it provided and has the right to
re-allocate, use or withdraw these equipment and material.
1.3 Party B shall send its technical staff to Yi Lan Jewellery Factory to
give advice in aspects of technology, production and management.
2. Scope of Operations
2.1 Assembling of imported materials which are provided by Party B.
2.2 Provided it does not interfere the normal operations of Yi Lan
Jewellery Factory, Party A may be subcontracted by other local
customers to assemble jewellery using domestic materials.
3. Assembling of Imported Material for Re-export
3.1 Party B shall have the ownership right for the material it provided
for assembling. Party B shall also have the ownership right for the
assembled semi-product and final products.
3.2 Assembling fees
Party B shall pay to Party A assembling fees based on the following
schedule:
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Fine gold jewellery HK$1.00/gram
Karat-gold jewellery HK$3.00/gram
Silver jewellery (gem assembling) HK$0.60/gram
3.3 Incoming material and delivery date
- Party B will provide sufficient material to Party A for
assembling based on the quantity specified in this agreement.
- Party A guarantees to deliver the assembled goods according to
the terms of each individual order.
3.4 Payment of assembling fees
(1) Format of payment - Telegraphic transfer
(2) Time of payment - Within one month from the date of statement
3.5 Assembling With Imported Material
Party A may appoint Yi Lan Jewellery Factory to assemble the gold and
silver it imports. If the final products are exported through Party B,
jewelry made with 10% of the imported material may be sold in the
domestic market.
4. Assembling of Domestic Material
4.1 Party B agreed that Party A may perform assembling work with domestic
material for other local customers provided that it does not interfere
the normal operations of Yi Lan Jewellery Factory.
4.2 (1) Party B agrees that Party A may perform assembling work of
gold, silver and karat-gold jewelry for other customers in China.
(2) Party B shall assist Party A in business negotiation with
customers. Party B may negotiate with customers in the name of
Party A regarding product price, quantity and style and other
issues.
(3) Party A shall be responsible for the civil liabilities, if any,
regarding the above-mentioned business. If any loss or damages
incurred due to Party B's fault, Party B shall compensate Party A
for all the losses.
4.3 Regarding the jewelry assembled as subcontracted by other customers,
Party A may also be act as their agent to sell the products in
domestic market.
4.4 Payment of Fees
(1) For the assembling work subcontracted to Party A by other local
customers, Party A agrees to pay fees to Party B as the fees for
using Party B's equipment and technology. The actual fees
standard shall be determined by both parties later.
(2) For the assembling work secured by Party B on behalf of Party A,
the assembling fees to be charged shall be determined by both
parties depending on the terms of each particular order.
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5. Guaranteed Assembling Income
5.1 Party B guarantees that it shall provide sufficient material for Party
A to assemble so that Party A can get at least HK$2 million of
assembling fees in 1992 and at least HK$4 million in the following
year. From the third year onwards, the total assembling fees Party A
would earn shall increase by 10% every year.
6. Warranties by Party A
6.1 For the purpose of the assembling work stipulated in this agreement,
Party A hereby warrants that:-
(1) Party A is a legal entity incorporated in the People's Republic
of China according to relevant laws.
(2) Party A has the right to conduct import and export business of
gold and silver jewelry in China and has the right to carry out
assembling work for gold and silver jewelry with imported
material.
7. Tenure
7.1 This agreement shall have a tenure of 10 years. Upon expiry of the
tenure, unless one party proposes in writing to discharge this
agreement, this agreement shall continue to be valid and binding upon
both parties.
7.2 Termination of tenure before expiry
Should either one party ceased its business or declared bankruptcy, or
due to force majeure, this agreement shall be terminated.
8. Governing Laws
The interpretation and execution of this agreement shall be governed by the
laws of the People's Republic of China.
9. Settlement of Disputes
Any disputes arising between Party A and Party B shall be settled through
friendly consultation between the two parties. In case no settlement can be
reached through consultation, either party shall have the right to submit
the dispute to the China Council For Promotion of International Trade for
arbitration. Arbitration shall be carried out in Beijing. The arbitrage
award shall be final and binding upon both parties.
10. This Agreement is written in Chinese and have two copies. Both copies shall
be equally binding.
11. This Agreement shall come into force after signing by both parties. Should
any registration or approval process be required, Party A shall be
responsible for handling these matters.
Signed by Party A and Party B November 18, 1994
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