Equipment Purchase Contract on June 25, 2018 by and between Heilongjiang Xinda Enterprise Group Co., Ltd. and Hailezi

After many times of equipment demonstration, technical demonstration and process demonstration with internationally renowned manufacturers of production equipment and suppliers of complete design schemes of equipment, Party A finds that the original equipment agreed by Party A and Party B can not meet the requirements of project automation, digitalization and intellectualization.  After friendly consultation, Party A suspends the original purchase plan of production equipment, and Party A promises to give priority to consider Party B on the subsequent cooperation.

Now Party A has completed the production layout and production process demonstration of the project. Party A and Party B have restarted the purchase plan of production equipment of “300,000 tons (bio-based) composite material project”. As the centralized supplier of Party A’s project equipment, Party B must implement the complete set of equipment standards provided by Party A, and ensure the smooth completion of the joint test run of the equipment, and provide the trial machine for Party A without compensation until the equipment is put into operation.

The name, specifications, models and prices of the equipment purchased are detailed in Annex A Production Equipment List (“Annex A”), and the technical requirements are detailed in Annex B Production Equipment Technical Agreement (“Annex B”), and Annex A and B are used as the basis for acceptance of the equipment handed over to Party A by Party B.

 

 

Unless otherwise stipulated in this contract, all the equipment provided must be packed with standard protective equipment, which shall be applicable to ocean and inland transportation, storage and handling, and shall be well protected against moisture, rain, earthquake and rust to ensure the safe arrival of the equipment at Party A’s site. Party B shall bear the responsibility for rust, damage and loss of equipment caused by improper packing.

C. Size

3.2 Where the package weighs two or more tons, Party B shall use appropriate transport marks “center of gravity” and lifting point” on both sides of each package box. According to the characteristic of the equipment and the different requirements for transportation, the packing box should be clearly marked “Handle with Care”, “Keep upright”, “Moisture-proof” and other appropriate signs for handling.

Party B shall notify Party A by telephone and Email at the same time before each batch of equipment is dispatched. The name, quantity, number of packages, gross weight, total volume (cubic meters) and expected arrival date of the equipment shall be notified together with any special requirements and precautions in the warehousing of the equipment.

6.1 Party B and Party A shall each appoint one representative as the project contact (“project contact”) and authorize their respective project contact to handle all technical matters related to the contract equipment and services between the effective date of the contract and the expiration date of the quality assurance period. Party B and Party A shall, through friendly consultation, determine the regular liaison between project contacts and the means of liaison in case of emergency. Project contacts should work together to solve all technical problems that may arise with respect to contracted equipment and services.

6.2 If requested by Party A, Party B shall be obliged to arrange and lead Party A to the equipment production office required by Party A to verify the process of work and the quality of equipment, and the related expenses shall be borne by Party B.

 

7.1 Both parties agree that the final delivery place of all goods is Party A’s factory in No. 9 Hanan Road, Pingfang District, Harbin City, Heilongjiang Province, China. Party B shall transfer the equipment to Party A in accordance with Annex A and Annex B. All the equipment listed in Annex A should be checked, installed, accepted and handed over at the factory of Party A in Harbin, Heilongjiang Province.

7.3 Party B will get all the equipment ready before October 2019 and deliver all the equipment to Party A in batches from October 2019 to December 1^st 2019 according to Party A’s request. Party B shall transfer the equipment to Party A in accordance with Annex A and Annex B. Both parties will make a joint inventory and record of the equipment. If the result of the counting does not conform to the requirements of Annex A of this Contract or during the transport process such equipment is damaged, Party B shall be deemed to have failed to deliver such equipment on time and Party B shall replace the equipment in good condition and in conformity with the requirements unconditionally and as soon as possible (without causing delays in installation progress).

7.4 Party B guarantees to complete the installation, commissioning, linkage test run of a workshop (10 production lines) by December 30, 2019 and pass the final acceptance of Party A, and complete the installation, commissioning, linkage test run of all equipment and pass the final acceptance of Party A by July 31, 2020. Party A and Party B will sign the acceptance report as the certificate of acceptance after the date of the completion of such test. From the date of signing the final acceptance report, the contract equipment will be transferred to the quality assurance period. During the quality assurance period, Party B shall be responsible for solving the problems arising after the final acceptance of the equipment in accordance with the relevant provisions of the quality assurance period of this contract.

7.5 Both parties agree that Party B is responsible for coordinating the installation and commissioning of all equipment by the equipment manufacturer. In the process of installation and commissioning, Party B shall ensure that the manufacturer’s technicians will give necessary explanations and training to Party A’s technicians. The effect of such explanations and training shall reach the degree that Party A’s relevant technicians can operate the equipment independently (including related systems). The customs fee shall be borne by Party B.

 

8.1 Party B shall ensure that the equipment provided under the contract is completely new, unused and undefective. Unless otherwise specified in the contract, the equipment shall contain all the latest improvements in design and materials. Party B guarantees that the software used in the equipment control system has legal copyright, and Party B guarantees that the software used in the equipment control system has legal copyright. And Party B guarantees:

a. All equipment provided by Party B shall not infringe upon any intellectual property rights of any third party; Otherwise Party A shall be compensated for any losses incurred as a result.

b. If Party A is prohibited from using the equipment because the equipment provided by it infringes the intellectual property rights of the third party, Party B shall provide alternative equipment that does not infringe the intellectual property rights of the third party and meet the requirements of Party A, and bear all the expenses and losses incurred in Party A.

Party B shall ensure that the equipment provided under the contract complies with the contract requirements in terms of quality and specifications. At the same time, if there is a national standard, it shall also comply with the national standards and ensure that the contract equipment is satisfactory under the correct installation and operation and maintenance. Performance. The quality guarantee period is six months from the date of signing the acceptance report by both parties.

8.4 Party B shall ensure that the equipment does not have the potential quality defects caused by the manufacturer or Party B. If the equipment has any defects during its operation caused by Party B or the manufacturer (including but not limited to the design and manufacturing defects that the equipment may not find at the time of acceptance), Party B shall be obliged to notify and ensure that the technical personnel of the equipment manufacturer shall repair the equipment on site within 5 days. The repair shall be completed as soon as possible and until the equipment meets the requirements for production and operation. Party B shall ensure that such maintenance fees are not required by Party B. Any expenses, and shall be compensated by Party B for the losses suffered by Party A. If the manufacturer cannot provide repair services or provide repair services, all losses will be borne by Party B.

（c）If it fails to pass the final inspection and acceptance within the acceptance date of the equipment specified in this contract, Party B shall, at its own expense, arrange for the replacement, commissioning or other reasonable measures to be taken as soon as possible, so that the equipment meets the final inspection acceptance requirements and passes the final inspection acceptance, and from the day after the agreed equipment acceptance date, Party B will pay liquidated damages on the basis of three-thousandths of the total price of the equipment. For the delivery acceptance date, if Party B is delayed by 4 weeks from the contractual deadline, Party A will have the right to terminate the contract and ask Party B to return all the payment already paid, pay the above-mentioned daily payment and pay 30% of the total price of the equipment as penalty to Party A.

 

（d）According to the delivery acceptance result, it is found that the quality or specification of the equipment does not conform to the contract or the equipment is flawed, or the equipment is found to have potential defects before the handover. If a claim is filed by Party A during the installation, commissioning, acceptance and quality assurance  period, the claim shall also be settled in accordance with Article 15.2 of this contract. If after the expiration of the quality assurance period, Party A discovers that there is a potential defect before the handover, Party B is obliged to notify and ensure that the technical personnel of the equipment manufacturer will arrive at the site within 5 days in accordance with the provisions of Article 8.4 of this contract. The equipment shall be repaired, and the repair shall be completed as soon as possible and until the equipment meets the requirements for production and operation. Party B shall ensure that such maintenance does not require Party A to bear any expenses, and shall compensate Party A for the losses suffered by Party A.

15.1 If any of the statements, warranties or undertakings in this contract or any other documents delivered by the party under this contract are inaccurate, or if one party violates such representations, warranties or promises, any claims, losses, damages, expenses and expenses (including but not limited to: direct economic losses, indirect economic losses, notary fees, legal fees, legal fees, travel expenses, etc.) suffered by the other party shall be borne by the violating party.

15.2 If Party B is responsible for any of the above-mentioned deviations, guarantees or commitments and Party A files a claim within the inspection, installation, commissioning, acceptance and quality assurance period specified in the contract. Party B shall, in accordance with Party A’s consent to one or more of the following ways to combine to resolve claims.

A. Party B agrees that if Party A rejects the equipment and Party B will return the amount of the rejected equipment to Party A within 10 days from the date of rejection in the same currency as the contract, and Party B shall bear all the transportation expenses necessary for the return and return.

B. According to the deviation of the equipment and the degree of damage, the buyer and the seller agreed to reduce the price of the equipment.

C. By replacing defective parts and/or repairing defective parts with new parts, components and/or equipment that meet the specifications, quality and performance requirements of the contract, Party B shall bear the costs and risks incurred and bear the related direct loss costs. At the same time, Party B shall guarantee the warranty period of the replacement parts at least three months after replacement or repair, but the warranty period shall not be earlier than the quality guarantee period of the contract equipment as stipulated in the contract.

 

All notices, requests, requests, consents and other communications ("Notices") to be sent by one party shall be delivered by post or by fax to the other party. In addition, other addresses or fax numbers may be designated in accordance with the notice given by each party, and the notice shall comply with the provisions of this section regarding the service notice.

（a）Notice delivered by hand or delivered by courier company, deemed to be served on the day of actual delivery;

（b）A notice sent by postage-paid registered mail shall be deemed to have been served three working days after it is sent;

（c）A notice sent by fax is deemed to have been delivered on the date of transmission (as long as the sender has a report confirming the transmission, the fax number sent, the fax number of the recipient, the number of pages transmitted and the date of transmission are displayed) .

In order to protect the rights of both parties and provide remedies, either party has the right to seek property preservation from any court of competent jurisdiction in accordance with the law before the court makes a final decision. During the settlement of the dispute, the parties shall continue to execute this contract in all other respects except for matters of dispute.

If it is unforeseeable by the obstructed party and the obstructed party cannot prevent or avoid the occurrence and consequences of it, such as earthquakes, typhoons, floods (except for fires that are negligent or deliberately caused by one party to the contract, its employees or their guests) and others Natural disasters, wars, riots and similar military operations, civil unrest and strikes, absenteeism, epidemics, government embargoes, expropriation, injunctions or other restrictions and actions ("force majeure events") directly cause one party not to fully or Partially fulfilling its obligations under this contract, the obstructed party shall be deemed not to have violated this contract as long as all of the following conditions are met:

A party that waives the rights stipulated in this contract must sign a written document in order to waive the relevant rights. The failure or delay of a party to exercise any of its rights, powers or remedies under this contract shall not be considered a waiver, and the exercise of any part of the rights, rights or remedies under this contract shall not preclude the further exercise of such rights, rights or remedies. Without limiting the foregoing, a waiver by one party of a breach of a provision by a party shall not be deemed to be a waiver of a breach of that or any other provision.