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article 1 _________.(hereinafter referred to as part a)and _________.(hereinafter referred to as part b) have agreed, after friendly discussion, to run a medium speed marine main engine factory in the form of a joint - venture company. since the conditions for the joint - venture are not yet ready, both parties shall start up a joint - production with compensation trade as the first step of co - operation with the following conditions: 1.1 part b shall transfer the technical know - how and the complete technical documentation to part a for manufacturing medium speed marine main engines (hereinafter called contracted products) of the following types: 12v- 400zc medium speed marine main engine; 12v- 600zc medium speed marine main engine. 1.2 definition, scope and delivery of technical documentation: the definition of technical documentation (hereinafter referred to as documentation) in article 1.1 of this contract means that the contracted products supplied by part b are composed of three parts: general technical documentation, products design drawings and manufacturing technical documentation, as used by part b. all of them should contain the technical know - how details. (1)general technical documentation includes: a. the technical specifications of the medium speed marine main engine of type 12v- 600zc (including sub - assembly, assembly, test run, delivery tests, etc. ); b. the technical specifications of the main components of the medium speed marine main engine of type 12v - 400zc; c. overall dimensions, installation dimensions, and performance data of the accessories used by the contracted products. (2)products design drawing: products design drawings of the contract products supplied by part b, shall inclued: a. a complete set of production drawings of the contracted products (including the final assembly drawings, components drawings, system diagram, principle diagram, and detailed drawings of all components); b. the calculating data and calculation manual of the contracted products; c. drawings, calculating manual and other data given to the classification societies and certificate issued by the classification societies; d. test platform design drawings and its technical documents. (3)manufacturing technical documentation: manufacturing technical documentation of the contracted products provided by part b shall include: the whole detailed instructive documentation and main components for the manufacturing of the contracted products, which shall include: requirements of quality inspection means, processes and technical conditions of acceptance test to the raw materials and components of the contracted products during and after the manufacturing processes. (4)modification of documentation: if the documentation to be supplied is modified by site as a result of using new technology to improve the products, processes and reduce the cost, the detailed information shall be submitted to part a in written form. (5)mode of providing documentation: a. for general technical documentation, three prints of three legible copies should be provided; b. for design drawings, one manufacturing transparency and two prints shall be provided; c. for manufacturing technical documentation, two prints shall be provided; d. the duplicated documentation, which had been supplied before, can be exemped, but must be noted in the list. (6)delivery schedule of documentation: a. according to the definition of documentation, in order to facilitate the manufacturer of medium speed marine main engine of type 12v - 400zc, part b shall deliver the whole technical documentation and drawing of contracted products to part a within 30 days after the signing of the contract; b. according to the definition of documentation in order to manufacture the medium speed maline main engine of type 12v - 600zc, site shall submit to part a the whole technical documentation and drawings of the contracted products before_________$$$after the signing of the contract. 1.3 the products manufactured by part a shall be resold to part b as follows: medium speed marine engine of type 12v - 400zc_________sets per year; medium speed marine engine of type 12v- 600zc_________sets per year; 1.4 the period of joint - production with compensation trade is two years. should the conditions for establishing a joint - venture be still not ready after the said period, the said period can be extended, but in no circumstances shall it be extended for more than five years.article 2 transfer of technical know- how and technical documentation 2.1 the complete technical documentation of designs, calculations, drawings, manufacturing processes, quality control, tests, installation, adjustment, operation and maintenance shall be provided by part b to part a concerning the contracted products and must be the same as those being currently used by part b. 2.2 checking and verifying the documentation of the contracted products: part b shall be responsible for the completeness, correctness and legibility of the product design drawings and manufacturing technical documentation sent to part a. in case any part of the said drawings and documentation are missing, part b shall make supplementary delivery of correction immediately upon notification by part b. 2.3 during the joint- production period, part b shall, at most favoured prices, supply part a with spare parts of the contracted products which are not available in the market of part a's side. these supplies are subject to separate agreements in due course. 2.4 part b guarantees that the transfer of the technical knowhow and technical documentation hereof will not involve any accusation from any third party.article 3 prices and termsof payment 3.1 part a shall pay part b for the transfer of technical knowhow and technical documentation of the medium speed marine main engine of type 12v- 400zc stipulated in clause 2.1 as follows: _________us _________(say: _________u.s.d. only) _________us _________(say: _________u.s.d. only) during the 2 years'period commencing from 19 ,the yearly fee shall be taken as _________% of the net annual production value (total annual production value minus the value of the imported parts and tax expenses). 3.2 the first payment is us $ _________(say: _________u.s.d.only) constituting % of total payment and shall be made within 30(thirty) days after the contract is signed and comes into force, upon receipt of the following documents from part b through the bank_________: (1)supply air- freight bill of the first batch of documentation according to the requirement of appendix_________; (2)irrevocable letter of guarantee in duplicate(one original,one copy)issued by_________band and confirmed by part a. (3)part b commercial invoice in duplicate; (4)part b sight draft in duplicate. 3.3 the second payment shall amount to _________% of the total payment due in _________, i.e. _________u.s.d. (say: _________u.s.d. only) and shall be paid to part b on _________, _________. upon the receipt by part a from part b of the following documents: (1)air - freightbillof thesecondbatchof documentationdeliveredbypart bon_________, _________,pursuant to stipulations in appendix_________; (2)part b commercial invoice in duplicate; (3)part b sight draft in duplicate. 3.4 both parties agree to settle in cash in _________while the settlement in _________will be_________% in cash and the remaining _________% shall be made through compensation of resale from part a. 3.5 the payment of _________ will be due on_________ th _________of the year upon receipt of the commercial invoices in duplicate from part b. 3.6 the yearly payments from 19 onward as per clause 3.1. are due on _________, _________, of each year upon receipt of 2 copies of the commercial invoice from part b. 3.7 part of the know - how transferring fee would be paid to part b by part a as per clause 3.1. during the joint - production period, and the unpaid part would be converted as the investment of part b to the joint - venture when the joint-venture comes to realisation. should the joint - venture miscarry and the joint- production be forced to terminate within 5 (five) years, part a shall confirm that the unpaid part of the know - how transferring fee shall fully be remitted to part b by part a. in each of the above - mentioned cases, evaluating the mode of payment of the know - how transferring fee shall be agreed upon by both parties through consultation in due course.article 4 joint- production andcompensation trade 4.1 for the purpose of balancing part a' s foreign exchange, part b agrees to buy - back the medium speed marine main engines of type 12v- 400zc and 12v- 600zc produced by part a. 4.2 the total value of the above mentioned orders shall not be less than _________% of the expenses for purchasing components by part a from part b. part b agrees that under the prerequisite of increased compensation capability of part a and increased demand of part b the percentage of payments compensated through the back - sale of pite's products can be increased without limitation. 4.3 products supplied to part b by part a shall be at favourable prices, types, quantity, and delivery time of the products shall be agreed in the contract for every order by both pareties. quality of part a's products has to meet part b's standard. 4.4 part b shall require part a to start the trial production of medium speed marine main engine of type 12v - 400zc immediately upon receiving their drawings. the first products, one for each party, shall be tested separately by both parties and part b shall, on the basis of satisfactory tests, require part a to deliver_________( _________)sets of medium speed marine main engine of type 12v- 400zc within 19 _________. the prices and delivery periods shall be agreed upon when the contract is concluded.article 5 guarantee 5.1 part b guarantees that the documentation supplied shall be of the latest technological achievement within the valid period of the contract and shall be exactly identical with the documentation currently used by part b. 5.2 part b guarantees that the documentation supplied shall be complete, correct and legible.article 6 tax and duty 6.1 all taxes, customs and other duties in connection with the performance of the contract arising outside the part a side shall be borne by part b. 6.2 all taxes, customs and other duties in connection with the performance of the contract arising inside the part a side shall be borne by part a.article 7 trademark 7.1 part a shall have the right to use the part b trademark and serial number of contracted products. part a shall label the trademark smith - portla co, ltd. on the contracted products so produced. 7.2 nameplates, quotations, technical specifications, advertisement, instruction manuals, samples of the contracted products manufactured by part a shall all be labelled with the name of part a.article 8 packing 8.1 packing shall be in the form of strong wooden case (s) suitable for long voyage and well protected against dampness, moisture, shock, rust and rough handling. the seller shall be liable for any damage to the goods and extra expenses due to improper packing, inadequate or improper protective measures. 8.2 the package number, measurements, gross weight, net weight, the words "keep away from moisture"and the following shipping marks shall be printed with fadeless paint on each package: (1)part b/part a 12v - 400zc (2)part b/part a12v- 600zc 8.3 packing list in duplicate indicating gross and net weight,measurements and quantity of each item is included.article 9 force majeure 9.1 should either party of the contract be prevented from implementing the contract by such cases of force majeure as war, serious fire, flood, typhoon and earthquake, or other events confirmed by both parties, the time for implementing the contract shall be extended by a period equal to the effect of such force majeure. 9.2 the party concerned shall notify the other party by cable within the shortest possible time after occurrence of the force majeure and send by registered airmail within 14 (fourteen) days to the other party a certificate issued by relevant authorities for confirmation. 9.3 should the effects of force majeure continue for more than 120 (one hundred twenty) consecutive days, both parties shall settle further execution of the contract through friendly negotiations as soon as possible.article10 arbitration 10.1 all disputes relating to the contractor arising from the execution of the contract shall be setfled through friendly consultations between both parties. should no settlemnt be reached, the disputes shall be submitted to arbitration. 10.2 the arbitration shall take place in stockholm, sweden, and be conducted by the arbitration institute of the stockholm chamber of commerce. 10.3 the arbitration award shall be final and binding on both parties. 10.4 the arbitration fee shall be borne by the losing party except otherwise awarded by the arbitration institute. 10.5 in the course of arbi. tration, the contract shall continuously be executed by both parties except for the part which is under arbitration.article 11 effectivenessof the contract and miscellaneous 11.1 this contract is formally signed by the representatives of both parties in_________/ (place) on _________, and shall be approved by the relevant authorities within one week to become effective. 11.2 this contract shall be written in english in four copies. each party shall keep two copies. 11.3 the duration of the contract is stipulated in art. 11. 11.4 appendix to the contract shall form an integral part of the contract and shall have the same binding force as the contract itseff. 11.5 all documents, letters, telegrams and telexes interexchanged between both parties before the signing of the contract shall become null and void automatically from the date on which the contract comes into force. 11.6 this contract can only be altered, amended and supplemented in accordance with the documents which have been signed or stamped by the authorised representatives of both parties. 11.7 letters, telegrams and telexes shall be used for communication between both parties during the contracted period. letters shall be in duplicates.article 12 legal addresses parta(address):_________ partb(address):_________
party a(signature):_________ party b(signature):_________
date:_________ date:_________