License Contract of the Transfer of Technology

LicenseContractoftheTransferofTechnology

FortheManufacturingof

Dateofsigning:April____,1992
Placeofsigning:Beijing,China
ContractNo.:______

InaccordancewithBidNo._____undertheI.B.R.D.LoanNo.____,InternationalTenderingCompanyofChinaNationalTechnicalImportandExportCorporationBeijingPRC(here-inaterreferredtoasthe"Licensee")ontheonehand,and______Company,Germany(hereinaftertoasthe"Licensor")ontheotherhand

WhereastheLicensorhasthetechnicalknow-howfordesign,manufacture,assembly,installation,test,inspection,adjustment,operation,maintenance,managementandsaleofRailway____asrequiredbyLicensee;

WhereastheLicensorhastherightandagreestotransfertheabove-mentionedtechnicalknow-howtotheLicenseeforthemanufactureofRailway____product;

WhereastheLicenseeagreestointroducetheLicensor’stechnicalknow-howfordesign,manufacture,maintenance,saleandex-portoftheRailway____product;
WhereastheLicensoragreestosupplytotheLicenseeandtheLicenseeagreestoobtainfromtheLicensoracertainamountofpartsandcomponentsfortheassemblingandmanufacturingoftheRailway_____productunderothercontract.

Theauthorizedrepresentativesofbothparties,throughfriendlynegotiations,haveagreedtoenterintotheContractunderthetermsandconditionsasstipulatedbelow;

ARTICLE1:DEFINITIONS

1.1"TheLicensee"meansInternationalTenderingCompanyofChinaNationalTechnicalImportandExportCorporation,Beijing,P.R.C.

1.2"TheLicensor"means___Company,Germany.

1.3"TheContract"meanstheagreemententeredbetweentheLicenseeandtheLicensor,asrecordedintheContractsignedbybothpartiesincludingallannexes,attachmentsandap-pendicestheretoandalldocumentsincorporatedbyreferencetherein.

1.4"TheContractPrice"meansthepricepayabletotheLicensorbytheLicenseeundertheContractforthefullandproperperformanceofitscontractualobligations.

1.5"TheContractProducts"meansalltheproductswiththemodelsandspecificationsandperformanceswhicharemanu-facturedbytheContractFactoryasdefinedbelow,inaccor-dancewiththetechnologytransferredbythelicensortotheLicenseeasstipulatedinAnnex2totheContract.

1.6"TheContractFactory"meanstheplacewheretheLicenseemanufacturestheContractProductsbyusingtheTechnologysuppliedbytheLicensor,Thatis____factory.

1.7"TheTechnicalDocumentationandSoftware"meansallthedocumentstobesuppliedtotheLicenseebytheLicensorasstipulatedinAnnex___oftheContract,Itconsistsofthefollowings:

A.Allthetechnicalindices,drawings,design,technicaldoc-umentsandsoftwarerelatingtothedesign,manufacture,calculation,assembly,installation,test,management,in-spection,adjustment,operation,maintenance,acceptancetestandsaleoftheContractProducts;

B.Allthetechnicalindices,drawings,design,technicaldocu-mentsandsoftwarerelatingtotheinspection,installatiom.Commissioning,testing,acceptance,operationandmainte-nanceoftheContractEquipmet;

C.Allthetechnicalindices,drawings,technicaldocumentsandsoftwarerelatingtotheinspection,testing,adjustment,assemblyandmaintenanceoftheSKD/CKDPatrs.

1.8"TheTechnicalService"meansthetechnicalassistance,su-pervision,instruction,trainingandotherservicesundertheContracttoberenderedbytheLicensortotheLicenseeasstipulatedinAnnex____andAnnex____tothecon-tract.

1.9"SINOTRANS’meansChinaNationalForeignTradeTrans-portationCorporation,whichisthepointedagentoftheLi-censeeforreceiptoftheTechnicalDcumentationandSoft-ware,theContractEquipmentandthePartsattheportsofdestination:
A.XingangSeaport:
SINOTRANS,TANGGUBRANCH
44XingangRoad,Tanggu,Tianjin,300450,ChinaTelex:
23187TGFTTCN,FAX:022984757
B.BeijingAirport:
SINOTRANS,BeijingAirFreightCo.
AnjialouLiangmaqiaoRoad,Beijing,100621,China
Telex:210205AIRFTCN

1.10"PRC"meansthepeople’sRepublicofChina.

1.11"PRC"meansFederalRepublicofGermany

1.12"TheWorldBank"meanstheInternationalBankforrecon-structionandDevelopment(I.B.R.D.)andInternationalDevel-opmentAssociation.

ARTICLE2OBJECTOFTHECONTRACT

2.1TheLicensorhasagreedtotransfertotheLicenseeandtheLicenseehasagreedtoobtainfromtheLicensorthetechnicalKnow-howforthedesign,manufacture,assembly,installa-tion,test,inspection,adjustment,operationandmaintenanceandmanagementoftheContractProducts.Thename,model,specificationsandtechnicalinaicesoftheContractProductsaredetailedinAnnex____totheContract.

2.2TheLicensorhasagreedtograntthLicenseethelicenseandrighttodesign,manufacture,use,sellinthePRCtheCon-tractProductsandexporttheContractProducts.Thelicenseandrightarenonexclusiveandnon-transferable.

2.3TheLicensorhasagreedtoprovidetheLicenseewiththeTechnicalDocumentationandSoftwarerelatedtotheCon-tractProducts.Thecontents,copiesandtimeofdeliveryoftheTechnicalDocumentationandSoftwarearedetailedinAnnex____andAnnex___totheCONTRACT.

2.4TheLicensorhasagreedtodispatchhistechnicalpersonneltotheContractFactory,forTechnicalServices.ThespecidiccontenrsandrequirementsfotheTechnicalServicesarede-tailedinAnnex____totheContract.

2.5TheLicensorhasagreedtogivetheLicensee’spersonneltechnicaltraininginLicensor’sfactoriesandattheContractFactory,toensurethattheLicensee’stechnicalpersonnel;shallmastertheabovetechnicalknow-howtransferredtotheLicensee.ThespecificcontentsandrequirementsoftechnicaltrainingaredetailedinAnnex_____totheCon-tract.

2.6TheLicensorhasagreed,upontherequestoftheLicenseeforaperiodof10(ten)yearsafterthedateofvalidityoftheCon-tract,tosupplytheLicenseeatthemostfavorablepricewiththeparts,components,rawmaterialsandaccessorieswhicharenecessaryformanufacturingtheContractProductsunderaseparatecontracttobesignedinduetime.

2.7TheLicensorhasagreed,upontherequestoftheLicenseeforaperiodof10(ten)yearsafterthedateofvalidityoftheContract,tosupplytheLicenseeatthemostfavorablepricewithequipmentandsoftwatewhicharemadeordevelopedbytheLicensorandarenecessaryformanufacturingtheContractProducts,andtoassisttheLicenseeinobtainingtheequipmentandsoftwarewhicharemadeordevelopedbythethirdpartyandarenecessaryformanufacturingtheContractProdcts.

2.8TheLicensorhasagreedtogranttheLicenseethelicenseandrighttouse,ontheContractProductsmanufacturedbytheConrtactFactory,theword"MadeinChinaunderlicenseof"followedbyNameoftheLicensor,attheoptionoftheLi-censee,providedtheContractProductscanmeetthetechni-calandqualityrequirementasspecifiedinAnnex______oftheContract.

ARTICLE3CONTRACTPRICE

3.1ThetotalContractprice,whichisbasedonthecontentsandscopestipulatedinArticle2totheContractandtheLicensor’sfulfilmentofhisopligationsundertheContract,shallbe____DEM,(SAY:______BEUTSCHMARKONLY)detailsasfollows:

3.1.1PriceforTechnicalKnow-how:_____DEM(SAY:______DEUTSCHMARKONLY).Thebreakdownpricesofthetechnicalknow-howareasfollows:
A.
Technologytransferfeeis:

B.Technicaldocumentationandsoftwarefee(CIPBei-jingPort)is_____DEM(SAY:______DEUTSCHMARKONLY).

C.Personneltrainingfeeis_______DEM(SAY:______DEUTSCHMARKONLY).

D.Technicalservicefeeis_______DEM(SAY:______DEUTSCHMARKONLY).

3.2Theabove-mentionedtotalContractPriceshallbefirmandfixedpricefortheLicensor’sobligationundertheContractincludingallexpensesincurredfordeliveryoftheTechnicalDocumentationandSoftwareCIPBeijingAirport,China.

ARTLCLE4TERMSOFPAYMENT

4.1AllthepaymentstipulatedintheContractshallbeeffectedinDEUTSCHMARK(DEM)throughanirrevocableletterofcreditpartialshipmentallowedundertheI.B.R.D.LoanNo.___forthepricefortheTechnicalKnow-how,obtainedfromtheWorldBankopenedinfavouroftheLicensor.

4.2TheLiceenseeshallwithinthirty(30)workingdaysafteref-fectivenessoftheContract,openanirrevocableletterofcreditbytheBankofChina,BeijinginfavouroftheLicen-sor,inabankinhiscountrynominatedbytheLicensorandacceptedbytheLicensor,foranamountequivalenttotheto-talContractprice,theletterofcreditshallpermitpaymentsasstipulatedinArticle4.3.

4.3PaymentforthePricefortheTechnicalKnow-how

4.3.110%(tenpercent)ofthetotalpriceforthetechnicalknow-howunderArticle3,namely----------DEM(SAY:------------DEUTSCHMARKONLY)shallbepaidaftertheLicensorhaspresentedthefollow-ingdocumentsprovidedtheyareinconfirmitywiththestipulationsoftheContract.

A.OnephotostatcopyofvalidexportlicenseissuedbytherelevantauthoritiesoftheLicensorsorLicensor’ssubcontractor’scountry,oronecopyoftheletterissuedbytherelevantauthorityoftheLicensor’scountrystatingthatthevalidexportlicenseisnotrequired.

B.OneoriginalandonecopyoftheirrevocableletterofguaranteeissuedbytheLicensor’sBankforasumof10%ofthetotalpriceforthetechnicalknow-howinfavoroftheLicensee.Thespecimenofthelittleofguaranteeisde-tailedinAnnex________tothecontract.

C.Fourcopiesoftheproformalinvoicecoveringthethetotalpriceforthetechnicalknow-how

D.TwocopiesofthesightdrafttobedrawnoftheLi-censeetotheBankofChina,Beijing.

E.Fourcopiesofcommercialinvoice.
Theabove-mentioneddocumentsshallbepresentednotearlierthan30daysaftereffectivenessoftheContract.

4.3.225%(twentyfivepercent)ofthetotalpriceforthetechni-salknow-howunderArticle3,namely______DEM(SAY:______DEUTSCHMARKONLY)shallbepaidaftertheLicensorhasdeliveredthefirstbatchoftheTechnicalDocumentation/SoftwareasstipulatedinAn-nex____totheContractandagainstpresentationofthefollowingdocumentsprovidedtheyareinconfirmitywiththestipulationsoftheContract:
A.Fivecopiesofthecommercialinvoice.
B.TwocopiesofthesightdrafttobedrawnontheLi-censeetotheBankofChina,Beijing.
C.FivecopiesoftheairwaybillforthefirstbatchoftheTechnicalDocumentationand/orSoftware.
D.FivecopiesofthepackinglistforthefirstbatchoftheTechnicalDocumentationand/orSoftware.
E.TwocopiesoftheletterissuedbytheLicenseecon-firmingthattheLicensorhasdeliveredtotheLicenseethefirstbatchofTechnicallDocumentationand/orSoftwareasstipulatedinAnnex______andAnnex_______

4.3.350%(fiftypercent)ofthetotalpriceforthetechnicalknow-howunderArticle3,namely_______DEM(SAY:_____DEUTSCHMARKONLY)shallbepaidaftertheLicen-sorhasdeliveredthelastbatchoftheTechnicalDocumen-tation/SoftwareasstipulatedinAnnex_______totheCon-tractandagainstpresentationofthefollowingdocumentsprovidedtheyareinconformitywiththestipulationsoftheContract:

A.Fourcopiesofthecommercialinvoice.

B.TwocopiesofthesightdrafttobedrawnontheLi-censeetotheBankofChina,Beijing.

C.FivecopiesoftheairwaybillfordeliveringthelastbatchoftheTechnicalDocumentationand/orSoftware.

D.FivecopiesofthepackinglistfordeliveringthelastbatchoftheTechnicalDocumentationand/orSoftware.

E.TwocopiesoftheletterissuedbytheLicenseeconfirm-ingthattheLicensorhasdeliveredtotheLicenseeallTechnicalDocumentationsasstipulatedinAnnex______

4.3.415%(fifteenpercent)ofthetotalpriceforthetechnicalknow-howunderArticle3,namely______DEM(SAY:______DEUTSCHMARKONLY)shallbepaidafterac-gainstpresentationofthefollowingdocumentsprovidedtheyareinconformitywiththestipulationsoftheCon-tract:

A.Fourcopiesofthecommercialinvoive.

B.TwocoiesofthesightdrafttobedrawnontheLi-censeetotheBankofChina,Beijing.

C.TwocopiesoftheAcceptanceCertificatefortheCon-tractProductsSignedbythebothParties.

4.4TheLicenseeshallhavetherighttodeductfromtheperfor-manceBondorrelevantpaymentundermegotiationthepenaltiesinformofliquidatedamageswhichLicensorshallbayinaccordancewiththestipulationsoftheContract.

4.5ThebankingchargesincurredintheP.R.C.shallbebornebytheLicenseeandthoseincurredoutsidetheP.R.C.shallbebornebytheLicensor.TheLicensorshallbearallinter-estchargesincasetheyoccurinthenegotiationofthebay-ment,unlesstheseinterestchargeshavebeenoccurredbyreasonsofdefaultbytheLicensee.

ARTICLE5DELIVERYOFTHETECHNICALDOCUMEN-TATIONANDSOFTWARE

5.1TheLicensorshalldelivertotheLicenseetheTechnicalDoc-umentationandSoftwareatBeijingAirportinaccordancewiththecontents,copiesandtimestipulatedinAnnex________totheContract.TheriskoftheTechnicalDocumen-tationshallbetransferredfromtheLicensortotheLicenseeafteritsarrvalatBeijingAirport,China.

5.2ThedatastampedbyBeijingAirport,Chinashallbetheactu-aldateofdeliverytheTechnicalDocumentationandSoft-ware.

5.3Thelicensorshall,withintwo(2)workingdays,afterdis-patchingeachbatchoftheTechnicalDocumentationand/orSoftwate,informtheLicenseeandContractFactorybytelexorfaxoftheContractnumber,airwaybillnumder,airwaybilldate,documentationnumber,unmberofbarcels,weight,flightandexpectedarrivaldate.Atthesametim,theLicen-sorshallairmailtotheLicenseeandtheContractFactoryeachtwocopiesoftheairwaybillandthedetailedlistoftheTechnicalDocumentaion/Software.

5.4Incaseofanyloss,damagesorshortagecausedtotheTech-nicalDocumentationandSoftwareduringthetransporta-tion,theLicensorshallmakesupplementaryorreplaceabledeliverytotheLicenseewithin45(forty-five)daysafterre-ceivingtheLicensee’writtennoticewithoutanycharges.

5.5TheTechnicalDocumentationandSoftwareshallbepackedinstrongcasessuitableforlongdistancetransportaionandnumeroushandlingwithprotectivemeasuresagainstmois-tureandrain.

5.6ThefollowingcontentsshallbemarkedonthecoverofeachpackageoftheTechnicalDocumentationandSoftwarewithindeliblepaintinconspicuousEnglishprintedwords:

A.ContractNo.:______.

B.Consignee:InternationalTenderingCompanyofChinaNationalTechnicalImportandExportCorporation

C.ConsigneeCode:_________.

D.DestinationAirport:BeijingAirport.

E.ShippingMark:________.

F.Gross/NetWeight(kg):_______

G.ItemNo./CaseNo.:_______

H.Dimension(L×W×HinCM):______

5.7InsideofeachpackageoftheTechnicalDocumentationandSoftware,thereshallbetwocopiesofthedetailedlisttoI-dentifyeachpart.

5.8ForthedeliveryoftheTechnicalDocumentationandSoft-ware,partialshipmentisallowed.Transshipmentisnotal-lowed.

5.9TheTechnicalDocumentationandSoftware,shallbecarriedflightbelongingtothemembercountriesoftheWorldBankandSwitzerland.

5.10TheLicensorshallefecttheinsurance,withinsurerfromeligiblesourcecountry,foranamountof110%ofthetotalcontractpriceon"allrisks"and"warrisk"basisattheLicensor’sexpenseswiththeLicenseeasthebeneficiary.

5.11AlloftheTechnicalDocumentationandSoftware,andser-vicessuppliedundertheContractshallhavetheirorigininthecountriesandareaseligibleunderthecurrentWorldBankGuidelineforProcurement.

ARTICLE6TECHNICALSERVICEANDPERSONNELTRAINING

6.1TheLicensorshallsendhisskilled,healthyandcompetenttechnicalpersonneltothetheContractFactoryoftheLicenseetoprovideTechnicalServiceonsiteinaccordancewiththestipulationsoftheContract.Thestipulation,thenumberofpersonnel,speciality,task,contentanddurationinPRCaredetailedinAnnex______tothecontract.

6.2TheLicensorshallprovideassistanceforentryanyexitvisa,workandlifeinPRCfortheLicensor’sTechnicalServicepersonnel.ThetreatmentconditionsoftheLicensor’stechni-calpersonnelinPRCaredetailedinAnnex_______totheContract.

6.3TheLicensor’stechnicalpersonnelsenttoPRCfortheTech-nicalServiceshallobservethelawsofthePeople’sRepublicofChinaandrulesandregulationsoftheContractFactoryintheperiodofserviceinPRC.

6.4TheLicenseeshallsendhistechnicalpersonneltotherele-vantfactoriesoftheLicensorfortechnicaltraining.Thenumberofbersonnel,speciality,content,durationandre-quirementoftrainingaredetailedinAnnex______totheContract.

6.5ThelicensorshallprovideassistanceforentryandexitvisaandshallprovidethefacilitiesnecessaryforthetechnicaltrainingfortheLicensee’strainees.Thetreatmentcondi-tionsofthetraineesintheLicensor’scountryaredetailedinAnnex______totheContract.

6.6TheLicensee’spersonnelundertrainingshallobservethelawsoftheLicensor’scountryandtherulesandregulationsoftheLicensor’sfactoriesintheperiodoftraining.

ARTICLE7ACCEPTANCEOFTHECONTRACTPRODUCTS

7.1Inordertoverifythecompleteness,correctnessandreliabili-tyoftheTechnicalDocumentationandSoftwaresuppliedbytheLicensorundertheContract,theLicensorshall,athisownexpensesendhisrepresentativestocarryortacceptancetestonthecontractProductsjointlywiththetechnicalper-sonneloftheLicenseeintheContractFactory.Thespecificprocedureoftheacceptancetestandthestandardoftheac-ceptancearedetailedinAnnex________tothecontract.

7.2IfthetechnicalperformancesoftheContractProductsspesi-fiedinAnnex___totheContractareachievedintheac-ceptancetests,bothparties’authorizedrepresentativeshallsignfourcopiesoftheacceptancecertificatefortheContractProductsand,twocopiesforeachparty.

7.3IfanytechnicalperformanceoftheContractProductsspeci-fiedinAnnex_____totheContractisnotachievedintheacceptancetests,bothpartiesshallhavefriendlyconsulta-tionanddiscussionandjointlyanalysethecausesandtakemeasurestoeliminatethedefect.Thesecondacceptancetestshallbecarriedoutafterthedefectshavebeeneliminated.

7.4IftheresponsibilityforthefailureofthefirstacceptancetestlieswiththeLicensor,theLicensorshall,athisownexpens-es,takemeasurestoeliminatethedefects,againsendhistechnicalpersonneltoparticipateinthesecondacceptancetestandshallbearalltheexpensesincurredinthesecondac-ceptancetestincludingtheexpensesforthematerialsusedinthesecondacceptancetest.Iftheresponsibilityforthefail-ureofthefirstacceptancetestlieswiththeLicensee,theLi-censeeshall,athisownexpenses,takemeasurestoeliminat-edthedefectsandbearalltherelevantexpensesincurredinthesecondacceptancetest.

7.5IfitisduetotheLicensor’sresponsibilitythatanytechnicalperformanceoftheContractProductsspecifiedinAnnex______totheContractisstillnotachievedinthesecondac-ceptancetest,theLicensorshallcompensatetheLicenseeforthedirectexpenseesustainedbytheLicensee,fortheaccep-tancetest,andshallathisownexpenses,takemeasurestoeliminatethedefectsandsendhistechnicalpersonneltopar-ticipateinthethirdacceptancetestincludingtheexpensesforthematerialsusedinthethirdacceptancetest.Ifthere-sponsibilityforthefailureofthesecondacceptancetestlieswiththeLicensee,theLicenseeshall,athisownexpenses,takemeasurestoeliminatethedefectsandbeartherelevantexpensesincurredinthethirdacceptancetest.

7.6IfitisduetotheLicensor’sresponsibilitythatanytechnicalperformanceoftheContractProductsspecifiedinAnnex_____totheContractisstillnotachievedintheabove-mentionedthreeacceptancetests,thestipulationsinClause8.7shallbeapplied.Iftheresponsibilityforthefailureoftheabove-mentionedthreeacceptancetestslieswiththeLicensee,thenbothpartiesshalldiscussandagreeuponfur-therexecutionoftheContract.

ARTICLE8GUARANTEESANDCLAIMS

8.1TheLicensorshallguaranteethattheTechnicalDocumenta-tionandSoftwaresuppliedbytheLicensortotheLicenseeinaccordancewiththeContractshallbeofthelatestandwell-provedTechnicalDocumentationandSoftwatewhichateactuallyusedbytheLicensorandthattheimproved,modifiedanddevelopedTechnicalDocumentationandSoft-wateshallbesuppliedintimebytheLicensortotheLi-censeeinthecourseofimplementationoftheContract,with-outcharge.

8.2TheLicensorshallguaranteethattheTechnicalDocumenta-tionandSoftwaresuppliedbytheLicensortotheLicenseeinaccordancewiththeContractshallbecomplete,correctandlegible,andshallbedeliveredintimeinaccordancewiththestipulationsinAnnex_______totheContract.

8.3IfitisfoundbytheLicenseethattheTechnicalDocumenta-tionandSoftwatesuppliedbytheLicensorisnotinconfor-mitywiththestipulationsinAnnex______totheContractandClause8.2totheContract,theLicensorshallmailtherelatedTechnicalDocumentationtoLicenseefreeofchargewithin30(thirty)daysafterreceivingtheLicensee’swrittennotice.

8.4IftheLicensorfailstodelivertheTechnicalDocumentationandSoftwareinaccordancewiththetimeschedulestipulat-edinAnnex______totheContractandClause8.3,theLi-censorshallpaytotheLicenseepenaltiesforlatedeliveryoftheTechnicalDocumentationandSoftwateatthefollowingrates:
0.5%(pointfivepercent)ofthetotalContractpriceoftheTechnicalDocumentationandSoftwateforeachfullweekofLatedelivery.Theabove-mentionedtotalpenaltiesshallnotexceed5%(fivepercent)ofthetotalContractpriceofthisContract.
ThepenaltypaidshallbeintheformofLiquidatedDam-agesandshallfullyindemnifytheLicenseeforallcostsin-curredasaresultofsuchedlay.

8.5PaymentofpenaltymadebytheLicensortotheLicenseeinaccordancewiththestipulationinClause8.4totheCon-tractshallnotreleasetheLicensorfromhisobligationstocontinuetoedlivertheTechnicalDocumentationandSoft-warewhichissubjecttopenaltiesforlatedelivery.

8.6IftheperiodforlatedeliveryoftheTechnicalDocumentationandSoftwareexceeds6(six)months,theLicenseeshallbeentitledtoterminatetheContract.Insuchcase,theLicensorshallreturntotheLicenseethetotalamountswhichtheLi-censeehasalreadypaidplusinterestattherateof12%perannualthereon.

8.7IfitisduetotheLicensor’sresponsibilitythatanytechnicalperformanceoftheContractProductsisnotachievedintheacceptancetests,thecaseshallbeedaltwithinthefollowingmanner:
IfitisduetotheLicensor’sresponsibilitythatanytechnicalperformanceoftheContractProductsspecifiedinAnnex______totheContractisnotachieved,andtheLicenseecannotputtheContractProductsintoproduction,theLicenseeshallbeentitledtoterminatetheContract.Inthecaseofter-minationoftheContract,theLicensorshallreturntotheLi-censeethetotalamountswhichhavealreadybeenpaidbytheLicenseetotheLicensorplusinterestattherate12%perannualthereonandcompensatetheLicenseefordirectlossesuponmutualagreement.
IfitisduetotheLicensor’sresponsibilitythatonlysomeofthetechnicalperformancesoftheContractProductsspeci-fiedinAnnex______totheContractarenotachieved,buttheLicenseestillcanputtheContractProductsintoproduc-tion,theLicensorshallcompensateLicenseeforthedirectexpensesatanamountof5%-10%(fivetotenpercent)ofcontractpriceaccordingtothesignificantsofthediscrepan-cy.

ARTILCE9INFRINGEMENTSANDCONFIDENTIALITY

9.1TheLicensorshallguaranteethattheLicensorhaslawfulownershipofallthetechnicalknow-how,theTechnicalDocumentationandSoftwaresuppliedbytheLicensortotheLicenseeinaccordancewiththeContract,andthattheLicensorhastherighttotransferthetechnologyandsupplytheContractEquipmentandthePartstotheLicensee.Incaseanythirdpartybringsachargeofinfringement,theLi-censorshalltakeupthematterwiththethirdpartyandbearalllegalandfinancialresponsibilitieswhichmayarise.

9.2BothPartiesshallkeepsecteralltechnicalknow-how,tech-nicaldocumentationandalltheinformationofhydrology,ge-oldgyandproductionoftheContractFactoryregardingthebusinessoftheotherparty,beingeithertechnicalotaom-mercialofnature,duringthevalidityperiodoftheContractaswellasthereafterforaperiodof10years.Ifapartofthewholeofsuchknow-how,informationordocumentationbe-comesorismadepubliclyknown.EitherthePartyknowningsuchKnow-how,informationordocumentaionorthroughathirdparty,theotherPartyshallnolongerbeheldtohissecrecyobligation.

9.3TheLicenseeshallhavetherighttousethetechnicalknow-howandtheTechnicalDocumentationsandSoftwaresuppliedbyLicensortodesign,manufactureandselltheContractProductsaftertheterminationoftheContract.

ARTICLE10TAXESANDDUTIES

10.1ALLtaxesanddutiesinconnectionwithandintheexecu-tionoftheContracttobeleviedbytheGovernmentofthePRContheLicenseeinaccordancewiththeChinesetaxlawsandregulationsineffectshallbepaidbytheLi-censee.

10.2Allthetaxesanddutiesinconnectionwithandintheexe-cutionoftheContracttobeleviedbytheGovernmentofthePRContheLicensorinaccordancewiththetaxlawsineffectandthe"AgreementbetweentheGovernmentofthePeople’sRepublicofChinaandtheGovernmentofFederalRepublicofGermanyfortheReciprocalAvoidanceofDou-bleTaxationandtheProventionofFiscalEvasionwithre-specttoTaxesonIncomeandProperty"shallbebornebytheLicensor.

10.3Allthetaxesanddutiesinconnectionwithandintheeexe-cutionoftheContracttobeleviedoutsidethePRCshallbepaidbytheLicensor.
ARTICLE11PERFORMANCEBOND

11.1TheLicensorshall,withinthirty(30)calendardaysaftersigningoftheContract,furnishaPerformanceBondtotheLicensee,issuedbytheBankofChina,Beijingagainstthecounter-guaranteeissuedbyaforeignbanktotheBankofChina,Bejing;intheamountofthe(10)percentofthetotalContractPrice.ThePerformanceBondshallremainvaliduntiltheacceptanceoftheContractProductsandex-pirationoftheguaranteeperiodoftheContractEquip-ment.

11.2ThePerformanceBondshallbefurnishedbytheLicensorbyaBankGuaranteeintheformasstipulatedinAnnex_______-totheContract.ThecostthereofshallbebornebytheLicensor.

11.3IncasetheLicensorfailstoperformanyofhisobligationsundertheContract,theLicenseeshallhavetherighttohavearecoursefromthePerformanceBond.
ARTICLE12FORCEMAJEURE

12.1Ifeitherofthecontractingpartiesispreventedfromexecut-ingtheContractbysuchcasesofforcemajeureaswar,seri-ousflood,fire,typhoonandearthquakeorothercaseswhichareagreeduponbybothpartiesascasesofforcemajeure,thetimeforperformanceoftheContractshallbeextendedbyaperiodequivalenttotheeffectofsuchcases.

12.2Theaffectedpartyshallnotifytheotherpartyofcasesofforcemajeureoccurredbytelex,cableorfaxassoonaspossibleandshallsendbyregisteredairmail,within14(fourteen)daysthereafter,acertifcateissuedbytheau-thorityordepartmentconcernedtotheotherpartyforcon-firmairon.

12.3Shouldtheeffectoftheforcemajeurecaseslastformorethan120(onehundredandtwenty)days,bothpartiesshallsettletheproblemoffurtherexecutionoftheContractthroughfriendlyconsultationassoonaspossible.

ARTICLE13SETTLEMENTOFDISPUTES

13.1AllthedisputesinconnectionwithorintheexecutionoftheContractshallbesettledbybothPartiesthroughfriendlyconsultations.Incasenosettlementtothedis-putescanbereachedbybothPartiesthroughfriendlycon-sultations,thedisputesshallbesettledthrougharbitra-tion.

13.2ThearbitrationshalltakeplaceinStockholm,Sweden,andbeconductedbytheArbitrationInstituteofChamberofCommerceinStockholmaccordingtotheprovisionalproce-duresandrulesofthesaidArbitrationCommission.

13.3ThearbitrationawardshallbefinalandbindingonbothParties.

13.4Thearbitrationfeeshallbebornebythelosingparty,ex-ceptasotherwiseawardedbythesaidArbitrationCommis-sion.

13.5Incourseofarbitration,bothpartiesshallcontinuetoexe-cutetheContractexceptthepartoftheContractwhichisunderarbitration.

ARTICLE14EFFECTIVENESSOFTHECONTRACTANDMISCELLANEOUS

14.1ThisContractissignedbytheauthorizedrepresentativesofbothpartieson______inBeijing.Bothpartiesshallfileap-plicationswiththeirrespectivegovernmentsforratificationoftheContract,ifrequired.ThedateofeffectivenessoftheContractshallbethedateoflasthappeningofthefollow-ings:

A.RatificationoftheContractfromthelastparty.

B.ApprovaloftheContractbytheWorldBank.

C.TheLicensee’sreceiptofthePerformanceBond.
Bothpartiesshalldotheirutmosttoobtaintheratification,andshalladvisetheotherpartybytelexorfaxandsendaletterforconfirmation.

14.2IftheContractcannotcomeintoforcewithin6(six)monthsafterthedateofsigningtheContract,bothpartiesshallhavetherighttocanceltheContract.

14.3TheContractshallbeinforcefor5yearsfromtheeffectivedateoftheContract.Aftertheexpirationofitstermofva-lidity,theContractshallautomaticallybecomenullandvoid.

14.4Theoutstandingcreditor’srightandedbtsbetweenbothpartiesattheexpirationoftheContractshallnotbeinflu-encedbytheexpirationoftheContract.Thedebtorshallcontinuetopaythecreditortheoutstandingdebts.

14.5ThisContractismadeoutintheEnglishlanguageintwoo-rigingals,oneforeachparty.

14.6TheContractisformedbyArticleItoArticle15andAnnexItoAnnex______.ThetextandAnnexoftheContractshallbeintegralpartsoftheContractandhavethesamele-galforce.

14.7Anychanges,amendment,supplementandsubtractionstothestipulationsoftheContractshallbevalidafterbothparties’authorizedrepresentativeshavesignedwrittendoc-umentswhichshallformintegralpartsoftheContractandshallhavethesamelegalforceastheContract.

14.8InthecourseofimplementationoftheContract,allthecommunicationsbetweenbothpartiesshallbeintheEng-lishlanguage.Formalnoticeshallbeinwrittenformindu-plicateandbesentbyregisteredairmail.

14.9NotwithstandingthestipulationsinClause14.IofthisClauseofthisContract,bothpartiesshallhavetherighttoterminatethisContractwhichhasalreadyormaybecomeeffective,iftheContractNo.______-hasnotcomeintoeffectnotduetotheLicensor’sresponsibilitywithin3monthsaftersigningthisContract.IncasethattheCon-tractNo._______cannotbecomeeffectiveduetotheLicensor’sresponsibilitywithin3monthsafterthesigningofthes,theLicenseeshallhavetherighttodecidewithintwomonthsthereafterwhetherornottoterminatethisontract.Insuchcasesoftermination,bothpartiesshallsettleaccountthroughfriendlyconsultationasregardtocompensationofpaymentandexpensesalreadymadebyeachparty.

ARTICLE15LEGALADDRESSES

15.1TheLicensee:
Name:INTERNATIONALTENDERINGCOMPANYOFCHINANATIONALTECHNICALIMPORT&EXPORTCORPORATION
Address:ImportBuiding,ErLiGou,Xijiao,Beijing,China
Telex:22075CTCTCCN
Fax:018315966

15.2TheLicensor:
Name:______Company,Germany
Address:______Germany
Telex:_______
Fax:________

15.3Signatureofthebothparties’authorizedrepresentatives:

Licensee(signature)Licensor(signature)

OurContractTemplateDatabaseiscompliedinaccordancewithlawsofP.R.China.ThisEnglishdocumentistranslatedaccordingtoitsChineseversion.Incaseofdiscrepancy,theoriginalversioninChineseshallprevail.