The two parties shall cooperate in trial design of prototypes in this contract

 EH EXHIBIT  10.3
b)  10.3  CONTRACT OF ELECTRIC VEHICLE COOPERATION BETWEEN
GUANGDONG EV CO.LTD. AND AMERICAN ELECTRIC AUTOMOBILE COMPANY (ASIA), INC.

CONTRACT OF ELECTRIC VEHICLE COOPERATION

(the Chinese translation shall be used as the final interpretation of this
contract.) The Parties:

GUANGDONG EV CO.. LTD.
of China (hereinafter referred to as GDEV)

and

AMERICAN ELECTRIC AUTOMOBILE COMPANY (ASIA). INC.
of California, USA (hereinafter referred to as AEAC), a subsidiary of American
Electric Automobile Company Inc. of California, USA (hereinafter referred to
as AEAS).

agree on this 25th day of February, 1997 to cooperate to develop and sell
electric vehicles and to carry out related business.

The two parties shall cooperate in trial design of prototypes in this contract
as follows:

Selection Of Vehicle Models: GDEV (together with institutes associated with
GDEV in electric vehicle development) has completed the electric vehicle
conversion of two conventional gasoline-engine vehicle models: the
passenger/goods vehicle model YH6460N from the Guangdong Yuehai Auto Refitting
Factory and a conventional mid-size bus.

New electric vehicle conversion prototypes of the passenger/goods vehicle and
the mid-size bus shall be jointly designed, engineered and assembled by the
two parties together, with AEAC's technical experience providing the main
basis for the design work.

The newly-designed prototype electric vehicle models for the YHG46ON and mid-
size bus shall hereinafter be referred to as the EV64601S1 and EV3230,
respectively.

GDEV shall provide relevant documents and information for each of the two new
prototype electric vehicles' pre-conversion gasoline models.

2.	Design Guidelines: The goal and guidelines for design and production of
the electric vehicles shall be:

     high performance, with low overall cost;
     suitability to the China market;
     utilization of parts from China whenever possible, but parts from the USA
       will be used when deemed more suitable;
     manufacturability;
     minimized cost of vehicle operation;
     minimized cost of vehicle maintenance.

3.     Basic Performance Standards: The economic performance and technical
performance targets for the newly designed electric vehicle models EV6460/S1
and EV3230 shall be as according to the technical contract.

4.     Selection of Parts & ComDonents: Parts and components shall be selected
in such a way as to maximize the technical performance, minimize the overall
cost of the vehicles, and be appropriate for the target markets for which each
vehicle is intended for.

GDEV and AEAC shall jointly discuss the selection of parts and components,
with AEAC taking on the main role in the task of selection. The purchasing
price of parts and components supplied by the two parties shall not be higher
than international market purchasing price.

5.     Design: To assist the designing of the electric vehicle prototypes GDEV
shall supply detailed plans, drawings, specifications and costs of the glider
sub-assemblies, components and parts for each prototype. (The term "glider"
refers here and elsewhere in this agreement to the pre-conversion vehicle
model less any parts associated with the gasoline engine).

6.     Engineering & Assembly: Two model EV6460/S1 prototypes and one model
EV3230 prototype shall be engineered and assembled. AEAC shall send expert
personnel to the Guangdong Yuehai Auto Refitting Factory to work with GDEV on
this task.

7.     Testing & Evaluation: Testing and evaluation of the completed
prototypes shall be performed jointly by GDEV and AEAC. Based on this
evaluation, GDEV shall determine whether or not to proceed with the next step
of forming a joint venture company with AEAC. Upon completion of the testing
and evaluation, one of the model EV6460/S1 electric vehicles will be shipped
to the USA for a period of time to test under USA conditions and to gather
market feedback. Cost of export and shipping will be shared equally by both
parties. After evaluation, any economic liabilities related to vehicle
operation in China shall be the responsibility of GDEV. Any economic
liabilities related to vehicle operation in USA shall be the responsibility of
AEAC.

8.     Division of ExDenses: Costs and expenses incurred in this Section 1
shall be divided as follows

GDEV shall be responsible for:

(i)     Supply of all gliders.

(ii)    Supply of all parts and components from China.

(iii)   The costs of engineering, assembling and testing the prototype
electric vehicles.

AEAC shall be responsible for:

(i)     Supply of all parts and components from the USA and the costs involved

in shipping these to GDEVs factory in China.
(ii)    Costs involved in selection, sourcing and testing of parts and
components from the USA.
(iii) Salaries and travel expenses of AEAC's personnel, including all AEAC

personnel expenses while in China.

Not all of the above expenses shall be included in calculation of investment.

9.     Ownership Of Prototype Electric Vehicles: Prior to commencement of the
joint venture company, each part, component and sub-assembly of the three
prototype electric vehicles shall remain the property of the respective party
that supplied such item.

All intellectual properties relating to the designs of each of the prototype
vehicles shall be jointly owned by GDEV and AEAC. Each party shall not use any
of the designs without obtaining the prior written consent of the other party.

10.    Implementation Plan: Within 60 days of the signing of this agreement,
GDEV and AEAC shall have jointly completed a written implementation plan.

11.    Confidentiality: The parties and each of their respective parent,
affiliate and subsidiary companies shall treat all technical information
pertaining to products produced through the cooperation of the two parties as
confidential and shall not disclose such information to any third parties
without the prior written consent of the other party.

12.    Exclusive Partnership: During the term of this agreement, none of the
parties, their parent, affiliates or subsidiary companies shall cooperate with
any third parties on the development, consultation, manufacture, assembly, or
sale of any products produced through the cooperation of the two parties
without the prior written consent of the other party.

13.    Within 60 days of the date of the signing of this contract by both
parties, the technical contract shall be signed. Otherwise this contract shall
be void.

14.    Both parties shall jointly guarantee that this contract must be
completed within one and a half years. Within 60 days of the completion of
this contract, if both parties agree to form a joint venture company, the
joint venture company shall be organized according to the letter of intent
signed on February 25th, 1997.

15.    This contract shall have four copies, with each party holding two
copies. Each copy shall have equal legal standing. This contract shall become
effective upon signing by the authorized representatives of both parties.

For and on behalf:
Guangdong EV Co. Ltd.

LIU ZHIGANG
-----------
Liu Zhigang

Date Feb. 25, 1997
Mr. Liu Zh'gang General Manager

For and on behalf of:
American Electric Automobile Company (Asia) Inc.

EDWARD F. MYRES
---------------
Edward F. Myers

Date  Feb. 25, 1997
Dr. Edward F. Myers Chairman 

Basic Info X:

Name: The two parties shall cooperate in trial design of prototypes in this contract
Type: in this Contract
Date: Nov. 3, 2000
Company: Silver Dragon Resources Inc.
State: Delaware

Other info:

Date:

  • 25th day of February , 1997
  • a half years
  • February 25th , 1997
  • Feb. 25 , 1997

Organization:

  • American Electric Automobile Company Inc.
  • Parts & ComDonents
  • Guangdong Yuehai Auto Refitting Factory
  • Prototype Electric Vehicles
  • Guangdong EV Co. Ltd.
  • American Electric Automobile Company Asia Inc.

Location:

  • California
  • China

Person:

  • Liu Zhigang
  • Edward F. Myers