party a :_________
the patent right which said in the contract os owned by party b.
party b has the right and agreed to grant paryt a the rights to use，manufac-ture and sell the contract products of the ppatented technology;whereas party a hope to use the patented technology of party b to manufacture and sellthecontract products;
both parties au thorized representatives， through friendly negotiation， have agreeto en-ter into this contract under the ertms as stipulated below;article 1definitions
for the purpose of this contract， the following terms have the following meanings;
1.1patented technologymeans those letters patent， and applications thereforpresently owned or hereafter acquired by party b and/or which party bhas or may have therigt to control or grant license thereof during the term hereof in any or all countriesof the world and which are applicable to or may be used in the manufacture of cotract products.
1.2contract productsmians the products described in appendis2 annexed hereto，to-gether with all improvements and modifications thereof or developments with respectthere-to.
1.3patty ameans_________. or his legal representative， agent and inhetitorto theproperty of the company.
1.4party b means_________，or his legal representative，agent and inheritor，to the property of the company.
1.5the contraet factory means the place which party party a manufactures thecontract products. that is_________.
1.6spare p`menas replacement parts for contract products or for any part there-of.
1.7componentsmeans those components and parts of contruct produets which par-tyb has agreed or may from time to time agree in writing to permit party a to manufactureor sell.
1.8technical documentsmeane engineering， manufacturing and originatinginforna-tion relatiog to the manufacture and servicing of contract products， includingdrawings， blueprints，design sheets， material specifications， photographs， photostats and general da-ta， and designs and pecifications relating to manufacturing contract producdts， tools and fix-tures， but includes，however， onlysuch information as is available to party b and applicable to the operations of party aunder this contract which detaile as per appendis 1 to the con-tract.
1.9net selling price menans remaining amount of invoice value of thecontractprod-ucts， after deduction of packahing， installation and freight charges，trade and discount，commission，insurance and taxes and duties. if any， directlyapplicable to the prdduct.
1.10the date of coming into effect of the contractmeans the date of raificationofthe contract by the managing constructure of the parties or by the competentauthorities ofboth parties， whichever comes later.article 2scope of the contract
2.1party a agrees to acquire from party b and party b agrees to transfer to party athe patented technology for contract products. such patented technology shall be in exactaccordance with the technologyof party bs latest products.
2.2party b grants party a the non-exclusive right to design and manufacturecontractproducts in china and to markdt the said products in china and abroad.
2.3party b shall be responsible& nbsp;to provide party a with documents relevant to thesaidpaptents and with special fittings of the samplemachine their concrete details andschedule ofdelivary being set out in appendix 2 to the contract.
2.4the contract does not cover the patented technology for the parts from othercoun-tres.but party b shall provide party a with the specimens and the tecincal specifications andthe name of the manufacturers of the parts.
2.5party b shall be responsible for the training of party as technicl personnelin party bs relevant facilities and also do its best to enable party as technicalpersonnel to masterthe patented technplogy of the aforesaid contract product (details asper appendix 5 to the contract).
2.6party b is obliged to send at its own expense technical personnel to party asfacto-ry for technical service (details as per appendix 6 to the contract).
2.7if it is required by party a. pafrty b shall be under an obligation to provideparty aat the most favourable price wity parts， accessories， raw materials， fittings，etc. for con-trade mark the two parties.
2.8party b grants party a the rignt to use party bs trade mark， and use thecombinedtrade，mark of both parties or mark the wouding production according tolicensors licenceon the contract produets.article 3price of the contract
3.1price of the contract shall be calculated on royalty in accordance with thecontent and scope sipulated in artice 2 to the contract and shall be paid in_________.
3.2royalty under the contract shall be paid from_________months after the the dateofcoming into effect of the contract in terms of calendar year. the date of settlingaccountsshallbe 31，december of each year.
3.3royalty at the rate of_________% (_________percent ) shall be calcuated interms ofnet selling price after the contract products are sold in this year，the contractproducts which not soldshall not be included.
3.4the report of the selling quantity， net selling amount of the contract productsandroyalty which should be paid in last year shall be submitted to party b in writtenform by party a within 10(ten) days after the date of settling accounts to royalty. thespecific methods which calculatenet selling amountand royalty are detailed in appendix 3to the contract.
3.5the contract products sold by party a pursuant to the patent license hereingranted shall be deemed to have been sold when paid for.
3.6if the contract products are returned or allowances made thereon after the royaltythereon hasbeen paid party a shall be entitled to take ppropriate erdit for suchoverpay-mentagainst royalties thereafter accruing.
3.7if party b demand to audit the accounts of party a，it shall no tice party a withinl0(ten) days after receiving the written notice of party a in accordance with article
3.4of the contract.the speeific content and procedure of auditing accounts aredetailed in appendix 4 tothe contract.article 4couditions of payment
4.1royalty stipulated in section 3 to the contract shall be effected by party a toarty bthrough the bank_________(here it is the business bank of party a， and the bank_________(here it is the busines bank of party b)， payrnent shall be settled in_________.
4.2party b shall immediately issue the related documents ofter receiving the writtennotieesubmitted by party a in accordance with artiele 3.4 of the contract， the royaltyshall be paid by party a to party b within 30(thirty) days after party a has received thefol-lowing documents whichare provided by party b and found them in confoumity with thestipulations of thcontract.
（1）four copies of the statement on calculation of the royalty;
（2）four copies of the commercial invoice;
（3）two copies of the sight draft.
4.3party a shall have the right to deduct from any of the above mentioned payment theppenalties and/or compensations which party b shall pay in accordance with thestipulations ofthe contract.article 5technical service and training
（1）during the validity period of the contract， party b shall send a specialist topartya`s factory to explain the drawings and technical documents and to provide teehnicalservise indesigning.manufacturing， adjustment，inspection and maintenance of thecontracted pro-duet so to eheble party a to use， as fast as possible， home materialsand raw components without affeeting the properties of the products so manufactured.
（2）party b shall twice send its specialists to party as factory to provldetechnicalservice for a total of 30 working days man.
（3）the first technical service sha1l start in the sixth month after the contraytcomesinto effect. party b shall send a specialist to party as factory to providetechnical service for 12 working days/man.
（4）the second technical service shall start during the verification of thecortractedproduets.parth b shall send a specialist to party as factory to providetechnical servicefor18 working days/man.
（5）party b shall， for its specialists， bear their travelling expensee. parthashall be responsible for boarding and lodging and affording the means of conveyance fromthe lodgingplace to the factoty.
（1）party b shall train party as technical personnel so as to enable them tomasterparty bs design， performance test and technology in machining， erection andinspection of the contracted products， so that party a can use the technical documentsand know-how supplied by p arty b toproducethe same products in the contract factory. party b shall do its best to arrange for party as personnel to visit the majorusersand the manufacturing process of the components from other countries of the contractedproducts.
（2）party a shall send twice its technical personnel to party bs factory fortraining， andthe total number of the participants shall not exceed 320 days/man (excluding the inter-preter).
（3）the first training shall be from the third to the fourth month after thecontract comes into effect. there shall be 4 technical persons and an interpreterto besent to party b for training for 16o working days/man (5 days week). the training shallcover the design of the contracted products and manufacturing technology.
（4）the second training shall be from the eighth to the nineth month. party a shallsent 4 technical persons and an interpreter to party bs factory for training for 160working days/man(5 days per week). the training shall cover the designing， themanufacturing technology，erection and adjustment of the contracted products.
（5）party a shall bear the travelling expenses of its trainees; party b shallprovide party as trainees free of charge with boarding， lodging and means ofconveyance for travel- ling between the lodging place and the factory.article 6technical documents
6.1party b shall， according to the delivery schedule and details stpulated inappendix 2to the contract， deliver the documents at_________.
6.2the date stamped by the air transportation ageney at_________，shll be takenas the actual date of delivery paryt a shall send to party b a photostat copy of theairconsignment note shwing the stampde date of arrival.
6.3within twenty-four hours after the despatch of each lot of the technical documente，party b shal1 notify party a by cable or telex of the contract number， number and dateof the air consignment note， items of the documents， number of pieces， airmail toparty a two copies of each of the air consignment note and detaikled list of thetechnical documents.
6.4if the technical documents are foumd lost， damaged or mutilated during airtrans-portation， party b shall supply party a free of charge with a second lot ofdocuments within thechortest possible time but not later than thirty days after it hasreceived from party a the writtennotice. within sixty days after party a has receivedthe documents from party b，if party a does not declare the shortage and request tocover the same， it is considered asa-cepted.
6.5the technical documents shall be in english and based on metric system ofmeasure-ments.article 7verification and acceptance
7.1the verification test on the first samplemachine of the contracted&nbs p;product shallbe carried out by the joint group consisting of party as and party bs representativesaccordingto the schedule and contents stipulated in appendix 7 to the contract. lf theperformance of the contracted product is in conformity with the technical specificationsstipulated in ap-pendix 1， such testshall be considersd as qualified and therepresentatives of both parties shll sign the inspection and testing certificate for theproper performance of the contracted product in quadruplicate， 2copies for each party.
7.2if the verification test demonstrates that the performance of the contractedprod-uct isnot in conformity with prescribed technical specifications， both partiesshall， throughamicable negotiations，make a joint study of and analyse the cause andtake measures to e-liminate the defects and carry out asecond test. when the second testdemonstuates tha the performance is qualified， both parties shall sign a testingcertificate for the proper perfot- mance
7.3if party b is responsible for the failure of the first test， party b shall sendat ist own expense technical ersonnel for the second test.
7.4if the second test fails again and the failure is attributed to party b， party bshallindemnify party a for any losses sustained and shall take effective measures toeliminate thedefects and carry out a third test.
7.5if the third test again fails， and if party b is responsible for the failure，party a has the right to terminate the contract at its discretion and lodge claims asstipulated ih article9.if the responsibility for the failure lies with party a， the twoparties shall negotiate as tohow to further implement the contract.article 8technical improvements
8.1if the technical documents provided by party b are not applicable to party asactualproduction condidions (such as design standards， raw materials， purchased partsfor the ma-chine， production facilitie)， party b is obliged to assist party a inmodifying the technicaldocuments and confirm the same. upon the condition that theproperties of the contracted products are not affected， raw materials， fittings andequipmint of chinese origin may be used.
8.2during the currency of the contract. if eithet of the two parties effets improve-ments on or developments of the products within the xcope stipulated in the contract，thd said party shall submit， free of charge， to the other party the technologicalinformation con-cernign such improvements or developments.
8.3the ownership of such improvements on or developments of the ontracted productshall belong to the party who has effected such improvements or develpments. the otheparyt shall not apply for patent ortransfer the same to any third arty.article 9guarantees and claims
9.1party b guarantees that the technical& nbsp;documents to be supplied by party b are thelatest technical information which has been put into practical use by party b. party balso undertakesto supply to party a in time the technical information relevant to anydevelop-ment of or improvement on the contracted product.
9.2party b guarantees that the technical documents to be supplied by party b arecom-plete，correct，legible and are to be despatched in time.
9.3if the documents suppied by party b are not in conformity with the stipulationin article 6， party b shall， within the shortext possible time but not later than 3odays after re-ceipt of party as written notice， despatch free of charge to party athe missing or the cor- rcet and legible technical socuments.
9.4if party b fails to despatch the said documents within the stipulated period asper appendix 2 party b shall pay penalty to party a in the following proportions:
（1）percent of the total contract price for delay from 1 to 4 weeks.
（2）percent of the total contract price for delay form 5 to 8 weeks.
（3）percent of the total contract price for delay exceeding weeks;
9.5the payment of penalties by party b to party a as stipulated in article 9 shllnot releve party b of its obligation to deliver the said documents.
9.6whenever the delay in delivering the said documents exceeds 6 months， party ashall be entitled to terminate the contract at its discretion and party b shall beobliged to re- fund party a all its payments together with the corresponding ingerestat the rate of... per-cent per annum.
9.7if the verification tests fail with the responsibility lying with party b andif，as theresult，party a cannot start normal production with the contract having to beterminated， party b shall erfund all the payments previously made by party a to party btogether with the interest at the rate of... percent per annum.
9.8if only some aspects of the properties of the product are not up to the standardsasstipulated in the contract and the responsibility lies with party b， party b shallcompensate party a with ... percent of the total contract price according to concredtcircumstances. ifthe responsibility lies with party a， party a shall pay the totalcontract price in accordancewith the stipulations.article 10confidentiality
10.all drawings， designs， specifications and all other technical informationmade available under this contract by party b shall be kept strictly confidential byparty a who.shall not sell， transfer or divulge it in any manner to anyone exceptthose of its own employ-ees who will be using it in the manufacture of the products，without prior written consent ofparty b. party a may. however，supply such technicalinformation to its subcontractor to the extent necessary for such subcontractor tomanufacture parts of contract products，pro-vidingthat party a shall have suchsubcontractor agree， in writing， to hold suchnical information strictly in confidence.
10.2ln case any part (s) or all of the above-mentioned technical information havebeen madepublic by party b or any third party. party a shall be thus released form theresponsi-bilityfor keeping secret the part(s) or all of the technology already published.
10.3after the termination of the contract， party a shall have the rigbt to usetheatents supplide by b， i. e. paryt a shall still have the right to design，manufacture，use，and export contract products.article 11infringement
11.1party b guarantees that it is the legitimate owner of the patent to thestipulations of the contract， and that it is lawfully in a position to transfer thepatent to party a. of accusation of infringing the rights of a third party occurs，party b shall be responsible for the matter and fully the legal andeconomicresponsibilities trising therefrom
11.2a complete list of party bs patents and patent applications relevant tocontrarct product are specified in appendixl to the contract. within one month after thecontract has comeinto force party b shall despatch to party a two photostat copies ofthe letters patentsand patent application(s).article 12taxes and duties
12.1ail taxes， customs duties and other excises arising in connection with theperfor-mance of the contract outside the territory of party as country shall be borneby partyb.
12.2in the execution of the contract， any income made by party b within theterritory of china shall be subject to taxation according to the tax laws of the people`srepublic of china.article 13force majeure
13.1if either of the contracting parties is prevented from executing the contractby forcer majeure events such as war， serious flood， fire， typhoon and earthquake，or other events agreed upon between both parties， the term for the execution of thecontract may be extenede by a period equal to that affected by the event(s).