Exhibit 10.7
OEM SUPPLY CONTRACT
Leo Motors Co., Ltd. (hereinafter called "X") and Chulin Home Tech Co., Ltd.
(hereinafter called "Y") execute this contract under the following condition for
OEM production of electric motor cycles (hereinafter called "Products").
Article 1 [Product]
X shall provide Y with product specifications such as size, color, design,
packaging method, etc. of Products to be produced by OEM arrangement, and Y
shall complete Products subject to such specifications and supply the same to X.
Article 2 [Delivery Price]
1. The delivery price of Products shall be the price including transportation
costs to the place designated by X, and shall be decided by separate
consultation between X and Y.
2. The delivery price under the above Paragraph 1 may be changed by agreement
between X and Y if necessary.
Article 3 [Delivery]
1. Y shall deliver Products to the place designated by X and within the
designated delivery time.
2. When Y cannot deliver Products within the delivery time, Y shall immediately
notify such fact to X and shall follow instruction of X.
Article 4 [Products Inspection]
1. Y shall execute in-house inspection before delivery of Products in accordance
with standard separately set by X and Y.
2. X may inspect Products at the factory of Y before delivery, and in such a
case, Y shall cooperate with such inspection by X.
Article 5 [Trademark]
1. Y shall indicate trademark, logo, and other necessary matters of X on
Products and package, etc. as instructed by X.
2. Y may not sell Products attaching trademark of X to a third party other than
X, and use trademark or logo for purposes other than the same of this Contract.
Article 6 [Expected Order Placement Quantity]
X expects to place order of Products exceeding 2,000 units per year to Y, and
quantity to be delivered shall be decided by Order Placement Plan.
Article 7 [Individual Contract]
1. X shall submit Expected Order Placement Plan to Y every 3 months one month
before starting of relevant period during contract period hereof.
2. X shall place individual order on Y in accordance with Expected Order
Placement Plan under the above Paragraph 1, and purchase Products subject to
conditions of individual order consented by Y.
Individual purchase order shall be bound by this Contract.
Article 8 [Defects]
1. Y shall not be held responsible for defects in Products manufactured based
upon products specifications provided by X.
2. Y shall be responsible for defects in Products due to its own default, and
defective Products shall be re-manufactured and delivered in accordance with
instruction of X. All the expense incurred by such re-manufacture shall be borne
by Y.
Article 9 [Payment]
Y shall invoice the price for delivered Products by end of every month, and X
shall pay the same to Y by end of the next month.
Article 10 [Subcontract]
Y may not produce ordered Products by subcontracting to a third party unless
there is a prior written consent by X.
Article 11 [Product Liability]
When a third party including user of Products incurs damage due to Products
delivered to X or in relation therewith, Y shall treat the same at its own total
responsibility and may not impute any responsibility in relation therewith.
Article 12 [Industrial Property Right]
1. When disputes over industrial property right are incurred between Y and a
third party in relation with Products, Y shall settle the same at its own
responsibility, and when X incurs damages due to the same, Y shall indemnify
such damages. Provided however that disputes over industrial property right due
to specifications, design, or trademark designated by X shall be responsibility
of X.
2. This clause shall be effective even after expiration of this Contract.
Article 13 [Confidentiality]
X and Y shall not divulge technology or secrets on the job of the other party
known during performance of this Contract and individual contract for 3 years
after expiration of this Contract as well as during the validity period hereof.
Article 14 [Suspension of Production]
When concluded that Products production by Y outstandingly shows slump or
becomes impossible, Y shall notify to X the cause thereof by 3 months before
suspension of production, and final order placement quantity and measures
thereafter shall be consulted.
Article 15 [Termination]
When the following causes are incurred by X or Y, the other party may terminate
all or part of this Contract and individual contract, and may claim
indemnification of damages incurred thereby.
1. When violating clauses of this Contract and individual contract and failing
to rectify such violation matters even after call notice over considerable
period;
2. When receiving from supervisory authority dispositions such as suspension of
business and
cancellation of business license or business registration;
3. When entering liquidation by becoming subject to auction due to provisional
attachment, temporary injunction, compulsory execution, or exercise of security
right, etc. or becoming subject to bankruptcy, composition, or company
reorganization, etc.; or
4. When causes such as suspension of payment or insolvency, etc.
Article 16 [Contract Period]
The validity period hereof shall be 2 years as from execution date hereof.
Provided however that this Contract shall be automatically renewed for 2 years
unless contract expiration intent is notified in writing to the other party by X
or Y.
Article 17 [Settlement of Disputes]
All disputes arising due to this Contract or in relation therewith shall be
finally settled by arbitration by Korean Commercial Arbitration Board.
In witness whereof, X and Y prepare 2 copies of this Contract and retain one
copy each thereof after respectively signing and affixing seal thereon.
April 23, 2009
"X" Address: 291-1 Hasangok-dong, Hanam-si, Gyeonggi-do
Trade Name: Leo Motors Inc.
Representative Director: Jung Yong Lee (seal)
"Y" Address: Lot 8 Bloc 167, 733-7 Gojan-dong, Namdong-gu, Incheon
Metropolitan City
Trade Name: Chulin Home Tech Co., Ltd.
Representative Director: Inchul Han (seal)