If it is due to the Licensors responsibility that any technical performance of the Contract Products specified in Annex_________to the Contract is not achieved and the Licensee cannot put the contract Products into production, the Licensee shall be entitled to terminate the Contract. In the case of termination of the Contract, the Licensor shall return to the Licensee the total amounts which have already been paid by the Licensee to the Licensor plus interest at the rate 12% per annual thereon and compensate the licensee for direct losses upon mutual agreement.
If it is due to the Licensors responsibility that only some of the technical performances of the Contract Products specified in Annex_________to the Contract are not achieved, but the Licensee still can put the Contract Products into production, the Licensor shall compensate licensee for the direct expenses at an amount of 5%-10% (five to ten percent) of contract price according to the significants of the discrepancy.
ARTICLE 9 INFRINGEMENTS AND CONFIDENTIALITY
9.1 The Licensor shall guarantee that the Licensor has lawful ownership of all the technical know-how, the Technical Documentation and Software supplied by the Licensor to the Licensee in accordance with the Contract, and that the Licensor has the right to transfer the technology and supply the Contract Equipment and the Parts to the Licensee. In case any third party brings a charge of infringement, the Licensor shall take up the matter with the third party and bear all legal and financial responsibilities, which may arise.
9.2 Both Parties shall keep secret all technical know-how, technical documentation and all the information of hydrology, geology and production of the Contract Factory regarding the business of the other party, being of either technical or commercial nature during the validity period of the Contract as well as thereafter for a period of 10 years. If a part of or the whole of such know-how, information or documentation becomes or is made publicly known, either the Party knowing such Know-how, information or documentation or through a third party, the other Party shall no longer be held to his secrecy obligation.
9.3 The Licensee shall have the right to use the technical know-how and the Technical Documentations and software supplied by the Licensor to design, manufacture and sell the Contract Products after the terminal of the Contract.
ARTICLE 10 TAXES AND DUTIES
10.1 All taxes and duties in connection with and in the execution of the Contract to be levied by the Government of the P.R.C on the Licensee in accordance with the Chinese tax laws and regulations in effect shall be paid by the Licensee.
10.2 All the taxes and duties in connection with and in the execution of the Contract to be levied by the Government of the P.R.C on the Licensor in accordance with the tax laws in effect and the“Agreement between the Government of Federal Republic of Germany for the Reciprocal Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Property”shall be borne by the Licensor.
10.3 All the taxes and duties in connection with and in the execution of the Contract to be levied outside the P.R.C shall be paid by the Licensor.
ARTICLE 11 PERFORMANCE BOND
11.1 The Licensor shall, within thirty (30) calendar days after signing the contract, furnish a Performance Bond to the Licensee, issued by the Bank of China, Beijing against the counter-guarantee issued by a foreign bank to the Bank of China, Beijing in the amount of ten (10) percent of the total Contract Price. The Performance Bond shall remain valid until the acceptance of the Contract Products and expiration of the guarantee period of the Contract Equipment.
11.2 The Performance Bond shall be furnished by the Licensor in the form as stipulated in Annex_________to the Contract. The cost thereof shall be borne by the Licensor.
11.3 In case the Licensor fails to perform any of his obligations under the Contract, the Licensee shall have the right to have a recourse from the Performance Bond.
ARTICLE 12 FORCE MAJEURE
12.1 If either of the contracting parties is prevented from executing the Contract by such cases of force majeure as war, serious flood, fire, typhoon and earthquake or other cases which are agreed upon by both parties as cases of force majeure, the time for performance of the Contract shall be extended by a period equivalent to the effect of such cases.
12.2 The affected party shall notify the other party of cases of force majeure occurred by telex, cable or fax as soon as possible and shall send by registered airmail, within 14 (fourteen) days thereafter, a certificate issued by the authority or department concerned to the other party for confirmation.
12.3 Should the effect of the force majeure cases last for more than 120 (one hundred and twenty) days, both parties shall settle the problem of further execution of the Contract through friendly consultation as soon as possible.
ARTICLE 13 SETTLEMENT OF DISPUTES
13.1 All the disputes in connection with or in the execution of the Contract shall be settled by both Parties through friendly consultations. In case no settlement to the disputes can be reached by both Parties through friendly consultations, the disputes shall be settled through arbitration.
13.2 The arbitration shall take place in Stockholm, Sweden, and be conducted by the Arbitration Institute of Chamber of Commerce in Stockholm according to the provisional procedures and rules of the said Arbitration Commission.
13.3 The arbitration is final and binding to both parties.
13.4 The arbitration fee shall be borne by the losing party, except as otherwise awarded by the said Arbitration Commission.
13.5 In course of arbitration, both parties shall continue to execute the Contract except the part of the Contract which is under arbitration.
