Document:

EX-10.5 FRAMEWORK AGREEMENT WITH LEGEND

 

Exhibit 10.5

Framework
Agreement with Legend (Beijing) Limited dated March 14, 2003

(Translated version)

PURCHASE CONTRACT

(Framework Agreement)

	 	 	 
	Purchaser:

	 	Legend (Beijing) Limited
	 
	 	 
	Supplier:

	 	Beijing BHL Networks Technology Co. Ltd.
	 
	 	 
	Contract No.:

	 	20030325001
	 
	 	 
	Tenure of Contract:

	 	March 14, 2003 to March 14, 2006
	 
	 	 
	Place of signing Contract:

	 	Beijing
	 
	 	 
	Date of contract:

	 	March 14, 2003

 

 

INDEX

	1.	 	Definition
	 
	2.	 	Preliminary
	 
	3.	 	Consideration
	 
	4.	 	Terms on Price
	 
	5.	 	Orders
	 
	6.	 	Delivery
	 
	7.	 	Receipt and Inspection
	 
	8.	 	Payment
	 
	9.	 	Training and Services
	 
	10.	 	Packing
	 
	11.	 	Terms on Quality
	 
	12.	 	Terms of Guarantee
	 
	13.	 	Use of Trademarks
	 
	14.	 	Intellectual Property
	 
	15.	 	Confidentiality
	 
	16.	 	Rescission of Agreement
	 
	17.	 	Defense
	 
	18.	 	Force Majeure
	 
	19.	 	Breach
	 
	20.	 	General
	 
	21.	 	Jurisdiction
	 
	22.	 	Disputes
	 
	23.	 	Tenure of Agreement

 

 

Purchase Contract Framework Agreement

This Purchase Contract Framework Agreement (the “Agreement”) is entered into between Legend
(Beijing) Limited (the “Purchaser”) and Beijing BHL Networks Technology Co. Ltd. (the “Supplier”)
in Beijing whereas the Purchaser will purchase the Products and Services from the Supplier in
accordance with the terms and conditions of the Agreement and the Supplier will in accordance with
the terms and conditions of the Agreement sell the Products and Services to the Purchaser.

This Agreement is entered into in Beijing and became effective.

1. Definition

	1.1	 	“The Sale and Purchase Agreement” means all the documents in writing as defined in Clause 2
of the Definition of the Agreement
	 
	1.2	 	“Price” means the price as agreed between both parties
	 
	1.3	 	“Products” means the Products specified in the Business Contract of the Sales and Purchase
Agreement and Purchase Orders, etc.
	 
	1.4	 	“Services” means the services specified in the Business Contract of the Sales and Purchase
Agreement and Purchase Orders, etc.
	 
	1.5	 	“Business Contract” means the specifications of the Products and Services including quality,
price, overall obligation of maintenance, technical criteria and various prescribed forms,
etc., for the Products. Business Contract is an integral part of the Sales and Purchase
Agreement
	 
	1.6	 	“Orders” means the official purchase notification given by the Purchaser in respect of the
product model, quantity, price, terms of delivery, payment terms, etc., which authorizes the
Supplier to perform delivery obligation
	 
	1.7	 	“Order validation” means the written acceptance of the Orders by the Supplier
	 
	1.8	 	“Trademarks of the Purchaser” means the trademarks “(CHINESE CHARACTER) Legend” , “(CHINESE CHARACTOR)”, “ ”, “LEGEND” or
any of the combinations of the latter two and the trademarks now owned, being applied for
registration or to be owned in the future by the Purchaser
	 
	1.9	 	“Associated Companies of the Purchaser” means the entities on which the Purchaser is capable
to exercise control directly or indirectly or which is capable to exercise control directly or
indirectly on the Purchaser, or which together with the Purchaser jointly control or
materially influence an entity, or such entity together with the Purchaser being directly or
indirectly controlled by a party, including but not limited to the Purchaser’s parent company,
subsidiary companies, the subsidiary together with the Purchaser being controlled by the same
parent company, the Purchaser’s associated companies and associated companies
	 
	1.10	 	“Product Supporting Documents” means the ultimate user’s authorization, product’s
specification, drawings, circuit plans, manual, marketing materials, pass certificate,
maintenance warranty and certificate and similar documentary materials

2. Preliminary

	2.1	 	The Purchase Contract means all written documents including this contract, business agreement
and related orders in force, annexure to agreements and supplements and project Contracts,
plans, notices on modifications, etc.
	 
	2.2	 	The Business Contract, orders in force and supplemental contracts, related amendments made
pursuant to the Agreement, form integral parts of the Agreement and shall have same binding
effect as of the Agreement.
	 
	2.3	 	Terms in the Agreement is applicable to the Business Contract, orders in force and

 

 

	 	 	supplemental contracts, related amendments made pursuant to the Agreement, and in the
event of any inconsistency between the Agreement and the Business Contract, the terms of
the Business Contract shall prevail and subsequent documents entered into as
modifications, substitution, elaboration of the Agreement, supplements or definitions
shall not be treated as inconsistency.

3. Consideration

          The consideration shall be the Products and Services provided by the Supplier to the Purchaser
in accordance to the Purchase Contract. During the tenure of the Agreement, the Supplier shall be
obliged to supply the Products and/or Services to the Purchaser according to the orders.

4. Terms on Price

	4.1	 	The Supplier shall supply the Products and services according to the agreed terms of price.
	 
	4.2	 	Competitive pricing:If the Supplier supplies the same Products and
Services to Products parties in the same period of time and under
similar contract terms, the Supplier shall forthwith notify the
Purchaser in writing.
	 
	4.3	 	Quotation: The Supplier warrants that the quotations
given to the Purchaser shall be the best
prices. When sale volume increases
significantly, the Purchaser shall have the
right to request the Supplier to adjust the
prices accordingly. The Supplier shall
quote prices of the Products and Services to
the Purchaser honestly and shall not
dishonestly quote a lower price to its
research and development department and
quote a higher price to its purchasing
department.

5. Orders

	5.1	 	Contract of orders: The Supplier shall in writing Contract to Purchaser’s orders at the
Purchaser’s requirements. Contract signed by the authorized representative of the Supplier
with the same stamp of the Supplier as stamped on this Agreement or stamped or with its
specific stamp for contracts and communicated to the Purchaser by Fax shall be accepted. The
Supplier shall fully perform its obligations in price, delivery time, quantity, destination,
etc. as it confirms in the order.
	 
	5.2	 	The Purchaser has the right to treat the order having been confirmed by the Supplier if the
Supplier does not deliver its written accepted Contract of order to the Purchaser within the
time limit to confirm the order as specified by the Purchaser.
	 
	5.3	 	Termination of orders: For the reasons of change of market conditions or because of
unforeseen circumstances which lead to the change of the Purchaser’s demand for the Products
and Services, the Purchaser has the right to terminate the order and as a result of the
termination, the Purchaser shall bear the responsibility to compensate the damage and loss
suffered by Supplier. However, the Supplier shall, on the day of its receipt of the notice
from the Purchaser to terminate the order, take immediate and effective measures (including
but not limited to halt the manufacturing the Products, notify related factories to stop
supplying raw materials for the Products, disposal of the manufactured Products to other
parties at market price, etc.) in order to minimize the damage. The Purchaser shall not be
responsible to compensate the Supplier for its damage if the Supplier has not taken effective
measures to minimize the damage. Related matters shall be settled by negotiation of both
parties.

 

 

6. Delivery

	6.1	 	Service of Delivery: Delivery of Products means the transportation of the Products by the
Supplier in accordance with the terms of the effective order to the specified destination, the
Supplier clears all procedures with the Purchaser’s designated recipient and provides
certificates and informational materials of the Products and bears all related expenses. With
prior notification to the Supplier, the Purchaser has the right to cancel or change the
delivery date, delivery destination and recipient in the orders, which notification shall be
given by a relevant supplemental contract to be agreed by the parties.
	 
	6.2	 	The Supplier shall notify the Purchaser prior to delivery of details of the delivery.
	 
	6.3	 	The Supplier shall fully perform its obligations of delivery as specified in the effective
orders and honor deliveries timely. When the Purchaser requested for early delivery, the
Supplier shall take all necessary measures to perform the delivery obligation and in the event
that it is unable to fulfill the Purchaser’s request for early delivery, it shall notify the
Purchaser in writing of the earliest time and quantity of delivery.
	 
	6.4	 	Inventory: The Supplier shall maintain appropriate inventory in order to satisfy the
Purchaser’s requirements.
	 
	6.5	 	Unless at the request and with the consent in writing of the Purchaser, the Supplier shall
not procure early delivery otherwise the delivery shall be treated as the delivery not made in
accordance with the time as specified for delivery and the Purchaser has the following
options:
	 
	6.5.1	 	Rejection of the delivery
	 
	6.5.2	 	If the Purchaser has accepted early delivery, the Supplier shall bear expenses on storage
incurred by the Purchaser for the period after the delivery until the time of delivery
specified in the contracts.

7. Receipt and Inspection

     The Supplier shall conduct product counting for the Products specified in the contract, check
names, quantity, packing, etc. of the product and acknowledge receipt in writing.

     The Purchaser shall be responsible for the loss and damage of the Products after the receipt
thereof is acknowledged. However, the Supplier shall be fully responsible for the loss or damage
caused as a result of the Product’s defects per se. The Supplier shall be responsible for any loss
and damage incurred prior to this. The Purchaser shall have the right of ownership of the Products
after the receipt thereof is acknowledged and the rights of ownership prior to this shall belong to
the Purchaser.

     It is not the recognition by the Purchaser that the Products or Services are accepted for the
sake of having paid the invoiced amount and recorded in the storage voucher. This only denotes the
Products or Services are in the progress of being inspected, tested or rejected until the stage
when it is successfully fitted into the Purchaser’s products. If the quality of the Products does
not match with that as in the Business Contract orders within the warranty period or terms of
inspection, the Purchaser shall have the right to return the Product which does not satisfy the
technical criteria and requirement and require the Supplier to compensate its expense for
inspection, testing and transportation, etc. or require the Supplier to repair or substitute the
Products at the written request of the Purchaser, or return the entire lot of the Products to the
Supplier.

8. Payment

 

 

     Both parties shall take steps to effect payments if the contracted Products have been
delivered to the Purchaser and pass the inspection thereof (as recognized by the Purchaser in
writing). If there is a subsequent related agreement, payments will be effected in accordance with
the subsequently agreed terms.

9. Training and Services

	9.1	 	Training:In order to help the Purchaser to provide satisfactory
Services to its customers, the Supplier shall undertake to provide
free of charge to the relevant personnel of the Purchaser with
technical training and support which are of absolute necessity until
the personnel of the Purchaser has acquired the related technique
prior to, during or after the sale of the contracted Products.
	 
	9.2	 	Maintenance period:The Supplier shall undertake within the warranty
period to provide free of charge maintenance services to the
contracted Products.
	 
	9.3	 	Services after the maintenance service: Upon expiry of the
maintenance period, the
Supplier shall in
accordance with the terms
of the Business Contract
/ order, provide
maintenance services or
designate a contractor to
provide such services and
the Supplier shall only
charge reasonable fees
for materials and labor.
When the contractor or
the Purchaser has to
proceed for the services,
the Supplier shall
provide with the
designated contractor or
the Purchaser the
necessary materials,
spare parts and technical
support in order to
ensure the contractor or
the Purchaser being able
to provide such services
and when the contractor
is carrying out the
Services, the Supplier
shall provide relevant
certification to ensure
the contractor being able
to carrying out the
services. If the
contractor is not capable
to provide the services,
the Supplier shall
indemnify the Purchaser
for the loss suffered by
the Purchaser.

10. Packing

     Product packing shall be in accordance with the standard as agreed by both parties or required
by the Purchaser. Unless as agreed otherwise, packing materials shall be provided by the Supplier
at its own expenses. The marks of delivery on the packing materials shall be made in accordance
with the requirements of the Purchaser and the Supplier shall guarantee to the Purchaser on the
transportation and product safety requirements.

     The Supplier shall take appropriate safety measures to pack the goods properly to prevent
moist, wetting, shock and dust and shall be responsible for any loss for its not having adequately
taken such appropriate measures.

11. Terms on Quality

11.1 Technical criteria: The Supplier shall in accordance with the requirements of the Business
Contract and/or orders provide the Purchaser with technical criteria (including general technical
criteria, technical type and category of technical criteria), quality warranty, standard of
delivery inspection, etc. The Products shall be passed by the Purchaser or an agreed inspection
authority or entity so as to become the quality passed Products in accordance with the agreed
inspection standard.

11.2 Treatment to defective Products: The Supplier shall in accordance with the requirement of the
Purchaser, repair, substitute, compensate for or return the defective Products which have been
inspected by the Purchaser or the agreed inspection authority or entity and determined the Products
being defective. On return of the Products, the amount paid for the

 

 

Products shall be returned to the Purchaser simultaneously or offset with the payables owing to the
Supplier. The Supplier shall take the above measures within 5 days upon receipt of the Purchaser’s
notification on defective Products and expenses including related expenses for defect
identification, product repair, product selection and substitution shall be borne by the Supplier.

11.3 Products supplied by the Supplier shall pass testing and inspection with a pass certificate.

12. Terms of Guarantee

The Supplier hereby represents and guarantees as follows:

	(1)	 	The Supplier has the rights of ownership and use of the Products it supplied to the Purchaser
free from demand, encumbrances or other action or threats against the Purchaser which would
affect the rights of the Purchaser on the Products.
	 
	(2)	 	Execution by the Supplier of the Agreement will not breach any of the conditions,
obligations, law, regulations or orders in respect of any related contracts.
	 
	(3)	 	There is no defect in the Products’ design (other than written designs not entirely based on
the technical criteria of the Supplier supplied by the Purchaser), materials and manufacturing
techniques and the warranties under this Agreement, technical standard and criteria
requirements are fulfilled and the product in use is safe under such requirement.
	 
	(4)	 	The Products are able to process, provide, receive and display date data correctly and shall
be capable to exchange date data correctly with all other Products.
	 
	(5)	 	The Products are brand new without spare parts which are used or repaired and they are
imported normally.
	 
	(6)	 	The Products do not infringe intellectual property rights of Products parties.
	 
	(7)	 	The storage time limit of the Products delivered to the Purchaser has not expired.
	 
	(8)	 	The Supplier shall abide by the “Terms on price” and shall not quote prices fraudulently.
	 
	(9)	 	The Supplier shall abide by other agreed terms of standards.

13. Use of Trademarks

          Unless written consent is obtained from the other party, none of the parties hereto shall use
directly or indirectly, entirely or partially the trademarks or mark signs and shall not use its
own trademarks or mark signs together with those of the counter party or combine any part thereof
with its own trademarks or used in any of its business activities. If the trademarks and mark
signs are used with the consent of the other party, the party shall stop use and clear usage of the
trademarks and mark signs and shall bear any responsibility for loss of the other party as a result
of infringement of intellectual rights or breach of contacts.

          At the request of the Purchaser, the Supplier shall apply the Purchaser’s trademarks and mark
signs on the Products, such as on OEM products, and packing of the Products in the manner as agreed
by both parties. Other than this, the Supplier shall not use the trademarks of the Purchaser for
any purpose.

          Unless agreed otherwise or with the consent of the Purchaser, the Purchaser shall not use the
trademarks of the Supplier for any purpose.

14. Intellectual Property

 

 

14.1 Permission to Use: To enable the Purchaser to use and sell the Products with intellectual
property rights, the Supplier shall grant the Permission to Use to the Purchaser in accordance with
the terms hereto.

14.2 Spare parts provided by the Purchaser: The Supplier shall be entitled to use the spare parts
supplied by the Purchaser only for the purpose of this Agreement.

14.3 For the purpose of this Agreement, the techniques or functional designs provided by the
Purchaser for the use of the Supplier shall be restricted to be only transplanted to the contracted
Products and the ownership and intellectual property rights thereof shall belong to the Purchaser
absolutely.

15. Confidentiality

     Without the written consent of the Purchaser, the Supplier shall not disclose in
advertisements or other channels the facts that it supplies the Products to the Purchaser pursuant
to the Agreement.

     Save as the information which is obtainable through the public channel or from any Products
party, the Supplier at any time even after expiry of the Agreement, shall not disclose to any party
information from the Purchaser in relation to confidential message in connection with the Agreement
and the Purchaser’s operation and techniques information and confidential business information
during the course of the negotiation of the Agreement. The Supplier shall return all documents and
materials regarding the information to the Purchaser at the Purchaser’s request.

     There shall be no restriction for the Purchaser to disclose the information, including
brochures, plans and documents from the Supplier, unless the Supplier has requested for
non-disclosure and also attached signs of confidentiality thereto.

     The fact of the disclosure of the information as above to third parties pursuant to a
government order or legal proceeding shall be notified to the other party as soon as practicable.

     This clause shall be binding to each party despite the Agreement is modified, rescinded or
terminated.

16. Rescission of Agreement

     The Purchaser shall have the right to rescind the Agreement under the following circumstances:

	(1)	 	The Supplier delays in performing its obligations under the Agreement resulting incapability
of carrying out the Agreement by the Purchaser, or the Supplier delays in performing its
obligations under the Agreement within 10 days despite the Purchaser had urged the Supplier to
perform its obligations.
	 
	(2)	 	The court has accepted hearing of bankruptcy pursuant to the application of the Supplier or
petition by other parties.
	 
	(3)	 	The Supplier’s operating condition becomes seriously deteriorated.
	 
	(4)	 	The Supplier committed acts of distracting assets, taking away of funds and evading payments
of debts.
	 
	(5)	 	The Supplier has lost its business reputation.

 

 

     Rescission of the Agreement by the Purchaser shall not deprive the Purchaser’s right to seek
redress from the Supplier for its loss.

17. Defense

     In order to protect the interest of the Purchaser, the Supplier shall on behalf of the
Purchaser defend at the costs of the Supplier, accusation or claim for compensation against the
Purchaser for the reason that the Supplier and its staff members have breached the terms of the
Agreement resulting third parties’ accusation or claim for compensation and the Supplier shall be
responsible to compensate the Purchaser including litigation costs.

     To ensure protection of the interest of the Purchaser, the Supplier shall on behalf of the
Purchaser defend or jointly defend at the costs of the Supplier, claim for compensation against the
Purchaser for the reason that the Products of the Supplier have infringed the ownership,
intellectual and other rights of third parties and the Supplier shall be responsible for all
compensation, fines, legal fees and damage. When such kind of litigation or claim for compensation
is likely to happen and known to the Purchaser, the Purchaser shall notify the Supplier and when
such kind of litigation or claim for compensation has happened, the Supplier shall at its own
expense take the following steps to carry out remedy measures: (1) to ensure the Purchaser being
capable to continue using and selling the products pursuant to the Agreement; (2) to modify the
Products for the purpose of the Agreement so as not to infringe the rights of others; (3) to
substitute the rights infringing products with others which will not infringe the rights of others;
(4) the Purchaser may return the rights infringing products to the Supplier at its desire and on
return by the Purchaser the rights infringing products, the Supplier shall refund the Purchaser the
sale proceed of the Products and compensate the Purchaser for damage suffered by the Purchaser.

18. Force Majeure

     Force majeure means under subjective circumstances, the happening of incidents which at the
time of entering into the Agreement, is not foreseeable and its occurrence and consequence cannot
be overcome and avoided. For reason of force majeure, a party which is unable to perform the
contract or unable to fully perform the contract, may fully or partially be exempted from the
obligation to perform the contract. However, the party not being able to perform shall, as soon as
the occurrence of such event, notify the other party by telegraph or fax and within 15 days of such
event inform the other party of the place of event by speed courier, certifications from the
relevant government, notary office or business association, of the occurrence of the force majeure
event. When the force majeure event vanished, the event party, if it is still being able to
continue performing the contract, shall notify the other party of the force majeure event having
been vanished and it shall continue to perform the contract if the other party agrees to
continuance of the contract.

19. Breach

19.1 Guaranteed obligation: In the event that the Products provided by the Supplier do not meet
with the terms as guaranteed under the Agreement, the Purchaser may opt to require the Supplier at
the Supplier’s expense to repair, substitute, redo, accept return of, reduce or refund payment for
the Products and as a result hereof the Supplier shall compensate the Purchaser for loss. The
Purchaser has the right to offset the loss from payables owing to the Supplier.

 

 

     The Supplier shall within the time limit as notified by the Purchaser take back the
unqualified, excessive and cancelled Products (i.e. the returnable Products by the Purchaser),
failing which, the Purchaser may at the expense of the Supplier return the Products, entrust
keeping or sell off the Products to offset storage charges. The Supplier shall be responsible for
losses because of drop, damage, decrease or transformation of the Products.

     As the Supplier is aware of the Products will be used as spare parts for the manufacturing of
the Purchaser’s products, the Supplier shall be obliged to repair, substitute or compensate
Purchaser’s damage if the Products do not meet with the agreed terms of the Agreement in quality or
functionally, no matter the defects emerge at the time of the Purchaser’s products being
manufactured, in the course of being sold or when used by the ultimate user. The Purchaser has the
right to demand compensation from the Supplier if because of such defects of the Purchaser’s
products, the Purchaser has to compensate third parties for its breach of contract or infringement
of intellectual rights, the Supplier has the right to demand the Supplier to bear the
responsibility of the Purchaser’s compensation to third parties and compensate the Supplier for the
loss.

19.2 Incapability and delayed delivery: In the event of the Supplier being incapable to deliver or
has to delay delivery of the Products, it has to notify the Purchaser forthwith the facts of its
incapability to deliver or the delayed date of delivery and quantity and undertake to bear the
responsibility to the Purchaser for breach of contract.

19.3 The Supplier shall undertake to bear the responsibility to the Purchaser for breach of
contract if, in the course of its providing service to the Purchaser, it does not deliver the
repaired Products to the Purchaser’s specified destination on time.

19.4 The Supplier shall be repair or redo packing at its expense in respect of the Products’
packing specification being not as agreed. In the case that the Purchaser demands compensation for
losses instead of requests for repair or redo packing, the Supplier shall compensate the Purchaser
for the unqualified packing and the Supplier shall compensate the Purchaser for the Purchaser’s
loss as a result thereof.

19.5 If the Purchaser fails to settle the payment of purchase, the Purchaser shall pay a penalty as
agreed.

19.6 The penalty or compensation made in accordance with the terms of the Agreement shall be
settled within 10 days by offsetting directly from the contracted amount failing which the
settlement shall be treated as late payment.

20. General

20.1 Modification: Any modification to this Agreement shall be made in writing, signified and
stamped by the authorized stamp of the parties and form an integral part of the Agreement.

20.2 Assignment: Without the written consent of the other party, none of the parties shall
partially or wholly assign the Agreement to its subsidiary or any of the third parties.

20.3 Copies of Agreement: This Agreement shall be executed in quadruplicates and each party shall
keep two copies and each has the same binding effect.

20.4 The Supplier shall ensure its staff to abide by the relevant regulations of the Purchaser

 

 

while they have to perform their services in the Purchaser’s premises.

20.5 Any commercial bribery: The Supplier shall not provide monetary rewards, gifts or other
tangible or intangible benefits to practically or latently related persons or their relatives.
These acts shall be treated as commercial bribery and once discovered, other than that the
Purchaser may rescind the Agreement, it may demand the Supplier for a penalty of RMB 100,000.
However, small promotion items as gifts as a business custom in business transactions are exempted.

20.6 Partial invalidation: If any of the terms of the Agreement is adjudicated non-enforceable has
no practically adverse impact to the rights of the parties under the Agreement, other terms of the
Agreement shall continue binding.

20.7 Waiver: Any waiver under this Agreement shall be signified in writing and waiver by a party
its right to seek redress in respect of the non-performance of the responsibility or obligation of
the other party does not imply it will waive its right to seek redress in respect of other
non-performance of the responsibility or obligation of the other party.

20.8 Clauses regarding the Terms of guarantee, Breach of Agreement, Intellectual Property and
Confidentiality, Defense, Jurisdiction and Arbitration, shall continue in force even after the
termination of the Agreement.

20.9 Notification of messages: The parties shall forthwith notify the counter part in respect of
any basic changes, such as changes of address, account number and authorized persons, etc, which
will affect the co-operation of the parties and the notification of such messages shall be in
writing and transmitted by telegraph, electronic transmission, fax or email.

20.10 Successor: The Agreement is entered into for the interests of their respective successor or
assignee and shall be binding upon their respective successor or assignee.

20.11 The Agreement is for the legal base of the co-operation of the parties and whilst the
Supplier and Purchaser are individual legal persons, they shall continue their respective business
operations in jurisdictions as authorized by their respective governments and under this Agreement,
there is no creation of partnership, association, agency or trusteeship between the Supplier and
Purchaser and they do not intend to create such relationship.

20.12 According to the mode of business of the Purchaser, the business of the Purchaser mentioned
in the Agreement including execution of Business Contracts, issuing orders, payments and demand for
compensation, etc., may be carry out by the Purchaser’s associated company. The terms of this
Agreement and supplements thereto shall be applicable to the business activities of the Supplier
and the associated company of the Purchaser.

20.13 The associated company of the Purchaser may pursuant to the purchase contracts and
supplemental documents deal with the Supplier and the Supplier shall directly accept and undertake
the purchase orders from the associated company of the Purchaser. The Supplier and the associated
company of the Purchaser shall have individually have the rights and obligations derived from
Business Contracts entered into pursuant to the Agreement, between the Supplier and the associated
company of the Purchaser and the Purchaser shall not be liable for the liability of its associated
company.

20.14 This Agreement shall become effective on execution by the parties’ authorized

 

 

representative and duly stamped with the respective company’s stamp.

21. Jurisdiction

     This Agreement shall be governed by the laws of the People’s Republic of China.

22. Disputes

     If disputes arise under this Agreement, disputes shall be settled initially by friendly
negotiation failing which the disputes may be adjudicated in the law court of the place where the
Purchaser is located.

23. Tenure of Agreement

     This Agreement shall stand valid for three years from March 14, 2003 to March 14, 2006, the
commencement date of which shall be decided by both parties in writing pursuant to this framework
agreement and after execution of the Business Contract.

	 	 	 
	Purchaser:

	 	Legend (Beijing) Limited
	 

	 	(With Company’ contract stamp)
	 
	 	 
	Authorized representative:

	 	/signed/
	 
	 	 
	Registered address:

	 	No. 6, Chuang Ye Road, Xinxi Zhuan Ye Ji
Di, Haidan District, Beijing, China
	 
	 	 
	Date:

	 	March 14, 2003
	 
	 	 
	Supplier:

	 	Beijing BHL Networks Technology Co. Limited
	 

	 	(With Company’ contract stamp)
	 
	 	 
	Authorized

representative:

	 	/signed/
	 
	 	 
	Registered address:

	 	Room 214-216, Tai Li Min Yuan Office Building,
No. 1, Wai Guan Xie Street, Chaoyang District,
Beijing, 100011, China
	 
	 	 
	Date:

	 	March 14, 2003EX-10.6 FRAMEWORK AGREEMENT WITH LEGENDSEC

 

Exhibit 10.6

Framework
Agreement with Legendsec (Beijing) Limited dated February 10, 2006

(Translated version)

PURCHASE CONTRACT

(Framework Agreement)

	 	 	 
	Purchaser:

	 	Legendsec (Beijing) Limited
	 
	 	 
	Supplier:

	 	Beijing BHL Networks Technology Co. Ltd.
	 
	 	 
	Contract No.:

	 	20030325001
	 
	 	 
	Tenure of Contract:

	 	February 10, 2006 to February 10,
2008
	 
	 	 
	Place of signing Contract:

	 	Beijing
	 
	 	 
	Date of contract:

	 	February 10, 2006

 

 

INDEX

	1.	 	Definition
	 
	2.	 	Preliminary
	 
	3.	 	Consideration
	 
	4.	 	Terms on Price
	 
	5.	 	Orders
	 
	6.	 	Delivery
	 
	7.	 	Receipt and Inspection
	 
	8.	 	Payment
	 
	9.	 	Training and Services
	 
	10.	 	Packing
	 
	11.	 	Terms on Quality
	 
	12.	 	Terms of Guarantee
	 
	13.	 	Use of Trademarks
	 
	14.	 	Intellectual Property
	 
	15.	 	Confidentiality
	 
	16.	 	Rescission of Agreement
	 
	17.	 	Defense
	 
	18.	 	Force Majeure
	 
	19.	 	Breach
	 
	20.	 	General
	 
	21.	 	Jurisdiction
	 
	22.	 	Disputes
	 
	23.	 	Tenure of Agreement

 

 

Purchase Contract Framework Agreement

This
Purchase Contract Framework Agreement (the “Agreement”) is
entered into between Legendsec
(Beijing) Limited (the “Purchaser”) and Beijing BHL Networks Technology Co. Ltd. (the “Supplier”)
in Beijing whereas the Purchaser will purchase the Products and Services from the Supplier in
accordance with the terms and conditions of the Agreement and the Supplier will in accordance with
the terms and conditions of the Agreement sell the Products and Services to the Purchaser.

This Agreement is entered into in Beijing and became effective.

1. Definition

	1.1	 	“The Sale and Purchase Agreement” means all the documents in writing as defined in Clause 2
of the Definition of the Agreement
	 
	1.2	 	“Price” means the price as agreed between both parties
	 
	1.3	 	“Products” means the Products specified in the Business Contract of the Sales and Purchase
Agreement and Purchase Orders, etc.
	 
	1.4	 	“Services” means the services specified in the Business Contract of the Sales and Purchase
Agreement and Purchase Orders, etc.
	 
	1.5	 	“Business Contract” means the specifications of the Products and Services including quality,
price, overall obligation of maintenance, technical criteria and various prescribed forms,
etc., for the Products. Business Contract is an integral part of the Sales and Purchase
Agreement
	 
	1.6	 	“Orders” means the official purchase notification given by the Purchaser in respect of the
product model, quantity, price, terms of delivery, payment terms, etc., which authorizes the
Supplier to perform delivery obligation
	 
	1.7	 	“Order validation” means the written acceptance of the Orders by the Supplier
	 
	1.8	 	“Trademarks of the Purchaser” means the trademarks
“(CHINESE CHARACTER) Legendsec” , “LEGENDSEC” or
any of the combinations of the latter two and the trademarks now owned, being applied for
registration or to be owned in the future by the Purchaser
	 
	1.9	 	“Associated Companies of the Purchaser” means the entities on which the Purchaser is capable
to exercise control directly or indirectly or which is capable to exercise control directly or
indirectly on the Purchaser, or which together with the Purchaser jointly control or
materially influence an entity, or such entity together with the Purchaser being directly or
indirectly controlled by a party, including but not limited to the Purchaser’s parent company,
subsidiary companies, the subsidiary together with the Purchaser being controlled by the same
parent company, the Purchaser’s associated companies and associated companies
	 
	1.10	 	“Product Supporting Documents” means the ultimate user’s authorization, product’s
specification, drawings, circuit plans, manual, marketing materials, pass certificate,
maintenance warranty and certificate and similar documentary materials

2. Preliminary

	2.1	 	The Purchase Contract means all written documents including this contract, business agreement
and related orders in force, annexure to agreements and supplements and project Contracts,
plans, notices on modifications, etc.
	 
	2.2	 	The Business Contract, orders in force and supplemental contracts, related amendments made
pursuant to the Agreement, form integral parts of the Agreement and shall have same binding
effect as of the Agreement.
	 
	2.3	 	Terms in the Agreement is applicable to the Business Contract, orders in force and

 

 

	 	 	supplemental contracts, related amendments made pursuant to the Agreement, and in the
event of any inconsistency between the Agreement and the Business Contract, the terms of
the Business Contract shall prevail and subsequent documents entered into as
modifications, substitution, elaboration of the Agreement, supplements or definitions
shall not be treated as inconsistency.

3. Consideration

          The consideration shall be the Products and Services provided by the Supplier to the Purchaser
in accordance to the Purchase Contract. During the tenure of the Agreement, the Supplier shall be
obliged to supply the Products and/or Services to the Purchaser according to the orders.

4. Terms on Price

	4.1	 	The Supplier shall supply the Products and services according to the agreed terms of price.
	 
	4.2	 	Competitive pricing:If the Supplier supplies the same Products and
Services to Products parties in the same period of time and under
similar contract terms, the Supplier shall forthwith notify the
Purchaser in writing.
	 
	4.3	 	Quotation: The Supplier warrants that the quotations
given to the Purchaser shall be the best
prices. When sale volume increases
significantly, the Purchaser shall have the
right to request the Supplier to adjust the
prices accordingly. The Supplier shall
quote prices of the Products and Services to
the Purchaser honestly and shall not
dishonestly quote a lower price to its
research and development department and
quote a higher price to its purchasing
department.

5. Orders

	5.1	 	Contract of orders: The Supplier shall in writing Contract to Purchaser’s orders at the
Purchaser’s requirements. Contract signed by the authorized representative of the Supplier
with the same stamp of the Supplier as stamped on this Agreement or stamped or with its
specific stamp for contracts and communicated to the Purchaser by Fax shall be accepted. The
Supplier shall fully perform its obligations in price, delivery time, quantity, destination,
etc. as it confirms in the order.
	 
	5.2	 	The Purchaser has the right to treat the order having been confirmed by the Supplier if the
Supplier does not deliver its written accepted Contract of order to the Purchaser within the
time limit to confirm the order as specified by the Purchaser.
	 
	5.3	 	Termination of orders: For the reasons of change of market conditions or because of
unforeseen circumstances which lead to the change of the Purchaser’s demand for the Products
and Services, the Purchaser has the right to terminate the order and as a result of the
termination, the Purchaser shall bear the responsibility to compensate the damage and loss
suffered by Supplier. However, the Supplier shall, on the day of its receipt of the notice
from the Purchaser to terminate the order, take immediate and effective measures (including
but not limited to halt the manufacturing the Products, notify related factories to stop
supplying raw materials for the Products, disposal of the manufactured Products to other
parties at market price, etc.) in order to minimize the damage. The Purchaser shall not be
responsible to compensate the Supplier for its damage if the Supplier has not taken effective
measures to minimize the damage. Related matters shall be settled by negotiation of both
parties.

 

 

6. Delivery

	6.1	 	Service of Delivery: Delivery of Products means the transportation of the Products by the
Supplier in accordance with the terms of the effective order to the specified destination, the
Supplier clears all procedures with the Purchaser’s designated recipient and provides
certificates and informational materials of the Products and bears all related expenses. With
prior notification to the Supplier, the Purchaser has the right to cancel or change the
delivery date, delivery destination and recipient in the orders, which notification shall be
given by a relevant supplemental contract to be agreed by the parties.
	 
	6.2	 	The Supplier shall notify the Purchaser prior to delivery of details of the delivery.
	 
	6.3	 	The Supplier shall fully perform its obligations of delivery as specified in the effective
orders and honor deliveries timely. When the Purchaser requested for early delivery, the
Supplier shall take all necessary measures to perform the delivery obligation and in the event
that it is unable to fulfill the Purchaser’s request for early delivery, it shall notify the
Purchaser in writing of the earliest time and quantity of delivery.
	 
	6.4	 	Inventory: The Supplier shall maintain appropriate inventory in order to satisfy the
Purchaser’s requirements.
	 
	6.5	 	Unless at the request and with the consent in writing of the Purchaser, the Supplier shall
not procure early delivery otherwise the delivery shall be treated as the delivery not made in
accordance with the time as specified for delivery and the Purchaser has the following
options:
	 
	6.5.1	 	Rejection of the delivery
	 
	6.5.2	 	If the Purchaser has accepted early delivery, the Supplier shall bear expenses on storage
incurred by the Purchaser for the period after the delivery until the time of delivery
specified in the contracts.

7. Receipt and Inspection

     The Supplier shall conduct product counting for the Products specified in the contract, check
names, quantity, packing, etc. of the product and acknowledge receipt in writing.

     The Purchaser shall be responsible for the loss and damage of the Products after the receipt
thereof is acknowledged. However, the Supplier shall be fully responsible for the loss or damage
caused as a result of the Product’s defects per se. The Supplier shall be responsible for any loss
and damage incurred prior to this. The Purchaser shall have the right of ownership of the Products
after the receipt thereof is acknowledged and the rights of ownership prior to this shall belong to
the Purchaser.

     It is not the recognition by the Purchaser that the Products or Services are accepted for the
sake of having paid the invoiced amount and recorded in the storage voucher. This only denotes the
Products or Services are in the progress of being inspected, tested or rejected until the stage
when it is successfully fitted into the Purchaser’s products. If the quality of the Products does
not match with that as in the Business Contract orders within the warranty period or terms of
inspection, the Purchaser shall have the right to return the Product which does not satisfy the
technical criteria and requirement and require the Supplier to compensate its expense for
inspection, testing and transportation, etc. or require the Supplier to repair or substitute the
Products at the written request of the Purchaser, or return the entire lot of the Products to the
Supplier.

8. Payment

 

 

     Both parties shall take steps to effect payments if the contracted Products have been
delivered to the Purchaser and pass the inspection thereof (as recognized by the Purchaser in
writing). If there is a subsequent related agreement, payments will be effected in accordance with
the subsequently agreed terms.

9. Training and Services

	9.1	 	Training:In order to help the Purchaser to provide satisfactory
Services to its customers, the Supplier shall undertake to provide
free of charge to the relevant personnel of the Purchaser with
technical training and support which are of absolute necessity until
the personnel of the Purchaser has acquired the related technique
prior to, during or after the sale of the contracted Products.
	 
	9.2	 	Maintenance period:The Supplier shall undertake within the warranty
period to provide free of charge maintenance services to the
contracted Products.
	 
	9.3	 	Services after the maintenance service: Upon expiry of the
maintenance period, the
Supplier shall in
accordance with the terms
of the Business Contract
/ order, provide
maintenance services or
designate a contractor to
provide such services and
the Supplier shall only
charge reasonable fees
for materials and labor.
When the contractor or
the Purchaser has to
proceed for the services,
the Supplier shall
provide with the
designated contractor or
the Purchaser the
necessary materials,
spare parts and technical
support in order to
ensure the contractor or
the Purchaser being able
to provide such services
and when the contractor
is carrying out the
Services, the Supplier
shall provide relevant
certification to ensure
the contractor being able
to carrying out the
services. If the
contractor is not capable
to provide the services,
the Supplier shall
indemnify the Purchaser
for the loss suffered by
the Purchaser.

10. Packing

     Product packing shall be in accordance with the standard as agreed by both parties or required
by the Purchaser. Unless as agreed otherwise, packing materials shall be provided by the Supplier
at its own expenses. The marks of delivery on the packing materials shall be made in accordance
with the requirements of the Purchaser and the Supplier shall guarantee to the Purchaser on the
transportation and product safety requirements.

     The Supplier shall take appropriate safety measures to pack the goods properly to prevent
moist, wetting, shock and dust and shall be responsible for any loss for its not having adequately
taken such appropriate measures.

11. Terms on Quality

11.1 Technical criteria: The Supplier shall in accordance with the requirements of the Business
Contract and/or orders provide the Purchaser with technical criteria (including general technical
criteria, technical type and category of technical criteria), quality warranty, standard of
delivery inspection, etc. The Products shall be passed by the Purchaser or an agreed inspection
authority or entity so as to become the quality passed Products in accordance with the agreed
inspection standard.

11.2 Treatment to defective Products: The Supplier shall in accordance with the requirement of the
Purchaser, repair, substitute, compensate for or return the defective Products which have been
inspected by the Purchaser or the agreed inspection authority or entity and determined the Products
being defective. On return of the Products, the amount paid for the

 

 

Products shall be returned to the Purchaser simultaneously or offset with the payables owing to the
Supplier. The Supplier shall take the above measures within 5 days upon receipt of the Purchaser’s
notification on defective Products and expenses including related expenses for defect
identification, product repair, product selection and substitution shall be borne by the Supplier.

11.3 Products supplied by the Supplier shall pass testing and inspection with a pass certificate.

12. Terms of Guarantee

The Supplier hereby represents and guarantees as follows:

	(1)	 	The Supplier has the rights of ownership and use of the Products it supplied to the Purchaser
free from demand, encumbrances or other action or threats against the Purchaser which would
affect the rights of the Purchaser on the Products.
	 
	(2)	 	Execution by the Supplier of the Agreement will not breach any of the conditions,
obligations, law, regulations or orders in respect of any related contracts.
	 
	(3)	 	There is no defect in the Products’ design (other than written designs not entirely based on
the technical criteria of the Supplier supplied by the Purchaser), materials and manufacturing
techniques and the warranties under this Agreement, technical standard and criteria
requirements are fulfilled and the product in use is safe under such requirement.
	 
	(4)	 	The Products are able to process, provide, receive and display date data correctly and shall
be capable to exchange date data correctly with all other Products.
	 
	(5)	 	The Products are brand new without spare parts which are used or repaired and they are
imported normally.
	 
	(6)	 	The Products do not infringe intellectual property rights of Products parties.
	 
	(7)	 	The storage time limit of the Products delivered to the Purchaser has not expired.
	 
	(8)	 	The Supplier shall abide by the “Terms on price” and shall not quote prices fraudulently.
	 
	(9)	 	The Supplier shall abide by other agreed terms of standards.

13. Use of Trademarks

          Unless written consent is obtained from the other party, none of the parties hereto shall use
directly or indirectly, entirely or partially the trademarks or mark signs and shall not use its
own trademarks or mark signs together with those of the counter party or combine any part thereof
with its own trademarks or used in any of its business activities. If the trademarks and mark
signs are used with the consent of the other party, the party shall stop use and clear usage of the
trademarks and mark signs and shall bear any responsibility for loss of the other party as a result
of infringement of intellectual rights or breach of contacts.

          At the request of the Purchaser, the Supplier shall apply the Purchaser’s trademarks and mark
signs on the Products, such as on OEM products, and packing of the Products in the manner as agreed
by both parties. Other than this, the Supplier shall not use the trademarks of the Purchaser for
any purpose.

          Unless agreed otherwise or with the consent of the Purchaser, the Purchaser shall not use the
trademarks of the Supplier for any purpose.

14. Intellectual Property

 

 

14.1 Permission to Use: To enable the Purchaser to use and sell the Products with intellectual
property rights, the Supplier shall grant the Permission to Use to the Purchaser in accordance with
the terms hereto.

14.2 Spare parts provided by the Purchaser: The Supplier shall be entitled to use the spare parts
supplied by the Purchaser only for the purpose of this Agreement.

14.3 For the purpose of this Agreement, the techniques or functional designs provided by the
Purchaser for the use of the Supplier shall be restricted to be only transplanted to the contracted
Products and the ownership and intellectual property rights thereof shall belong to the Purchaser
absolutely.

15. Confidentiality

     Without the written consent of the Purchaser, the Supplier shall not disclose in
advertisements or other channels the facts that it supplies the Products to the Purchaser pursuant
to the Agreement.

     Save as the information which is obtainable through the public channel or from any Products
party, the Supplier at any time even after expiry of the Agreement, shall not disclose to any party
information from the Purchaser in relation to confidential message in connection with the Agreement
and the Purchaser’s operation and techniques information and confidential business information
during the course of the negotiation of the Agreement. The Supplier shall return all documents and
materials regarding the information to the Purchaser at the Purchaser’s request.

     There shall be no restriction for the Purchaser to disclose the information, including
brochures, plans and documents from the Supplier, unless the Supplier has requested for
non-disclosure and also attached signs of confidentiality thereto.

     The fact of the disclosure of the information as above to third parties pursuant to a
government order or legal proceeding shall be notified to the other party as soon as practicable.

     This clause shall be binding to each party despite the Agreement is modified, rescinded or
terminated.

16. Rescission of Agreement

     The Purchaser shall have the right to rescind the Agreement under the following circumstances:

	(1)	 	The Supplier delays in performing its obligations under the Agreement resulting incapability
of carrying out the Agreement by the Purchaser, or the Supplier delays in performing its
obligations under the Agreement within 10 days despite the Purchaser had urged the Supplier to
perform its obligations.
	 
	(2)	 	The court has accepted hearing of bankruptcy pursuant to the application of the Supplier or
petition by other parties.
	 
	(3)	 	The Supplier’s operating condition becomes seriously deteriorated.
	 
	(4)	 	The Supplier committed acts of distracting assets, taking away of funds and evading payments
of debts.
	 
	(5)	 	The Supplier has lost its business reputation.

 

 

     Rescission of the Agreement by the Purchaser shall not deprive the Purchaser’s right to seek
redress from the Supplier for its loss.

17. Defense

     In order to protect the interest of the Purchaser, the Supplier shall on behalf of the
Purchaser defend at the costs of the Supplier, accusation or claim for compensation against the
Purchaser for the reason that the Supplier and its staff members have breached the terms of the
Agreement resulting third parties’ accusation or claim for compensation and the Supplier shall be
responsible to compensate the Purchaser including litigation costs.

     To ensure protection of the interest of the Purchaser, the Supplier shall on behalf of the
Purchaser defend or jointly defend at the costs of the Supplier, claim for compensation against the
Purchaser for the reason that the Products of the Supplier have infringed the ownership,
intellectual and other rights of third parties and the Supplier shall be responsible for all
compensation, fines, legal fees and damage. When such kind of litigation or claim for compensation
is likely to happen and known to the Purchaser, the Purchaser shall notify the Supplier and when
such kind of litigation or claim for compensation has happened, the Supplier shall at its own
expense take the following steps to carry out remedy measures: (1) to ensure the Purchaser being
capable to continue using and selling the products pursuant to the Agreement; (2) to modify the
Products for the purpose of the Agreement so as not to infringe the rights of others; (3) to
substitute the rights infringing products with others which will not infringe the rights of others;
(4) the Purchaser may return the rights infringing products to the Supplier at its desire and on
return by the Purchaser the rights infringing products, the Supplier shall refund the Purchaser the
sale proceed of the Products and compensate the Purchaser for damage suffered by the Purchaser.

18. Force Majeure

     Force majeure means under subjective circumstances, the happening of incidents which at the
time of entering into the Agreement, is not foreseeable and its occurrence and consequence cannot
be overcome and avoided. For reason of force majeure, a party which is unable to perform the
contract or unable to fully perform the contract, may fully or partially be exempted from the
obligation to perform the contract. However, the party not being able to perform shall, as soon as
the occurrence of such event, notify the other party by telegraph or fax and within 15 days of such
event inform the other party of the place of event by speed courier, certifications from the
relevant government, notary office or business association, of the occurrence of the force majeure
event. When the force majeure event vanished, the event party, if it is still being able to
continue performing the contract, shall notify the other party of the force majeure event having
been vanished and it shall continue to perform the contract if the other party agrees to
continuance of the contract.

19. Breach

19.1 Guaranteed obligation: In the event that the Products provided by the Supplier do not meet
with the terms as guaranteed under the Agreement, the Purchaser may opt to require the Supplier at
the Supplier’s expense to repair, substitute, redo, accept return of, reduce or refund payment for
the Products and as a result hereof the Supplier shall compensate the Purchaser for loss. The
Purchaser has the right to offset the loss from payables owing to the Supplier.

 

 

     The Supplier shall within the time limit as notified by the Purchaser take back the
unqualified, excessive and cancelled Products (i.e. the returnable Products by the Purchaser),
failing which, the Purchaser may at the expense of the Supplier return the Products, entrust
keeping or sell off the Products to offset storage charges. The Supplier shall be responsible for
losses because of drop, damage, decrease or transformation of the Products.

     As the Supplier is aware of the Products will be used as spare parts for the manufacturing of
the Purchaser’s products, the Supplier shall be obliged to repair, substitute or compensate
Purchaser’s damage if the Products do not meet with the agreed terms of the Agreement in quality or
functionally, no matter the defects emerge at the time of the Purchaser’s products being
manufactured, in the course of being sold or when used by the ultimate user. The Purchaser has the
right to demand compensation from the Supplier if because of such defects of the Purchaser’s
products, the Purchaser has to compensate third parties for its breach of contract or infringement
of intellectual rights, the Supplier has the right to demand the Supplier to bear the
responsibility of the Purchaser’s compensation to third parties and compensate the Supplier for the
loss.

19.2 Incapability and delayed delivery: In the event of the Supplier being incapable to deliver or
has to delay delivery of the Products, it has to notify the Purchaser forthwith the facts of its
incapability to deliver or the delayed date of delivery and quantity and undertake to bear the
responsibility to the Purchaser for breach of contract.

19.3 The Supplier shall undertake to bear the responsibility to the Purchaser for breach of
contract if, in the course of its providing service to the Purchaser, it does not deliver the
repaired Products to the Purchaser’s specified destination on time.

19.4 The Supplier shall be repair or redo packing at its expense in respect of the Products’
packing specification being not as agreed. In the case that the Purchaser demands compensation for
losses instead of requests for repair or redo packing, the Supplier shall compensate the Purchaser
for the unqualified packing and the Supplier shall compensate the Purchaser for the Purchaser’s
loss as a result thereof.

19.5 If the Purchaser fails to settle the payment of purchase, the Purchaser shall pay a penalty as
agreed.

19.6 The penalty or compensation made in accordance with the terms of the Agreement shall be
settled within 10 days by offsetting directly from the contracted amount failing which the
settlement shall be treated as late payment.

20. General

20.1 Modification: Any modification to this Agreement shall be made in writing, signified and
stamped by the authorized stamp of the parties and form an integral part of the Agreement.

20.2 Assignment: Without the written consent of the other party, none of the parties shall
partially or wholly assign the Agreement to its subsidiary or any of the third parties.

20.3 Copies of Agreement: This Agreement shall be executed in quadruplicates and each party shall
keep two copies and each has the same binding effect.

20.4 The Supplier shall ensure its staff to abide by the relevant regulations of the Purchaser

 

 

while they have to perform their services in the Purchaser’s premises.

20.5 Any commercial bribery: The Supplier shall not provide monetary rewards, gifts or other
tangible or intangible benefits to practically or latently related persons or their relatives.
These acts shall be treated as commercial bribery and once discovered, other than that the
Purchaser may rescind the Agreement, it may demand the Supplier for a penalty of RMB 100,000.
However, small promotion items as gifts as a business custom in business transactions are exempted.

20.6 Partial invalidation: If any of the terms of the Agreement is adjudicated non-enforceable has
no practically adverse impact to the rights of the parties under the Agreement, other terms of the
Agreement shall continue binding.

20.7 Waiver: Any waiver under this Agreement shall be signified in writing and waiver by a party
its right to seek redress in respect of the non-performance of the responsibility or obligation of
the other party does not imply it will waive its right to seek redress in respect of other
non-performance of the responsibility or obligation of the other party.

20.8 Clauses regarding the Terms of guarantee, Breach of Agreement, Intellectual Property and
Confidentiality, Defense, Jurisdiction and Arbitration, shall continue in force even after the
termination of the Agreement.

20.9 Notification of messages: The parties shall forthwith notify the counter part in respect of
any basic changes, such as changes of address, account number and authorized persons, etc, which
will affect the co-operation of the parties and the notification of such messages shall be in
writing and transmitted by telegraph, electronic transmission, fax or email.

20.10 Successor: The Agreement is entered into for the interests of their respective successor or
assignee and shall be binding upon their respective successor or assignee.

20.11 The Agreement is for the legal base of the co-operation of the parties and whilst the
Supplier and Purchaser are individual legal persons, they shall continue their respective business
operations in jurisdictions as authorized by their respective governments and under this Agreement,
there is no creation of partnership, association, agency or trusteeship between the Supplier and
Purchaser and they do not intend to create such relationship.

20.12 According to the mode of business of the Purchaser, the business of the Purchaser mentioned
in the Agreement including execution of Business Contracts, issuing orders, payments and demand for
compensation, etc., may be carry out by the Purchaser’s associated company. The terms of this
Agreement and supplements thereto shall be applicable to the business activities of the Supplier
and the associated company of the Purchaser.

20.13 The associated company of the Purchaser may pursuant to the purchase contracts and
supplemental documents deal with the Supplier and the Supplier shall directly accept and undertake
the purchase orders from the associated company of the Purchaser. The Supplier and the associated
company of the Purchaser shall have individually have the rights and obligations derived from
Business Contracts entered into pursuant to the Agreement, between the Supplier and the associated
company of the Purchaser and the Purchaser shall not be liable for the liability of its associated
company.

20.14 This Agreement shall become effective on execution by the parties’ authorized

 

 

representative and duly stamped with the respective company’s stamp.

21. Jurisdiction

     This Agreement shall be governed by the laws of the People’s Republic of China.

22. Disputes

     If disputes arise under this Agreement, disputes shall be settled initially by friendly
negotiation failing which the disputes may be adjudicated in the law court of the place where the
Purchaser is located.

23. Tenure of Agreement

     This
Agreement shall stand valid for two years from February 10, 2006 to
February 10, 2008, the
commencement date of which shall be decided by both parties in writing pursuant to this framework
agreement and after execution of the Business Contract.

	 	 	 
	Purchaser:

	 	Legendsec (Beijing) Limited
	 

	 	(With Company’ contract stamp)
	 
	 	 
	Authorized representative:

	 	/signed/
	 
	 	 
	Registered address:

	 	 
	 
	 	 
	Date:

	 	February 10, 2006
	 
	 	 
	Supplier:

	 	Beijing BHL Networks Technology Co. Limited
	 

	 	(With Company’ contract stamp)
	 
	 	 
	Authorized

representative:

	 	/signed/
	 
	 	 
	Registered address:

	 	Room 214-216, Tai Li Min Yuan Office Building,
No. 1, Wai Guan Xie Street, Chaoyang District,
Beijing, 100011, China
	 
	 	 
	Date:

	 	February 10, 2006

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