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are detailed in Annex _____ to the Contract.

6.3 The Licensor’s technical personnel sent to PRC for the Technical Service shall observe the laws of the People’s Republic of China and rules and regulations of the contract Factory in the period of service in PRC.

6.4 The Licensee shall send his technical personnel to the relevant factories of the Licensor for technical training. The number of personnel, specialty, content, duration and requirement of training are detailed in Annex _____ to the Contract.

6.5 The Licensor shall provide assistance for entry and exit visa and shall provide the facilities necessary for the technical training for the Licensee’s trainees. The treatment conditions of the trainees in the Licensor’s country are detailed in Annex ____ to the Contract.

6.6 The Licensee’s personnel under training shall observe the laws of the Licensor’s country and the rules and regulations of the Licensor’s factories in the period of training.

ARTICLE 7 ACCEPTANCE OF THE

CONTRACT PRODUCTS

7.1 In order to verify the completeness, correctness and reliability of the Technical Documentation and Software supplied by the Licensor under the Contract, the Licensor shall, at his own expense send his representatives to carry out acceptance test on the Contract Products jointly with the technical personnel of the Licensee in the contract

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Factory. The specific procedure of the acceptance test and the standard of the acceptance are detailed in Annex _____ to the Contract.

7.2 If the technical performances of the Contract Products specified in Annex _____ to the Contract are achieved in the acceptance tests, both parties’ authorized representative shall sign four copies of the acceptance certificate for the Contract Products and, two copies for each party.

7.3 If any technical performance of the Contract Products specified in Annex _____ to the Contract is not achieved in the acceptance tests, both parties shall have friendly consultation and discussion and jointly analyze the causes and take measures to eliminate the defect. The second acceptance test shall be carried out after the defects have been eliminated.

7.4 If the responsibility for the failure of the first acceptance test lies with the Licensor, the Licensor shall, at his own expenses, take measures to eliminate the defects, again send his technical personnel to participate in the second acceptance test and shall bear all the expenses incurred in the second acceptance test including the expenses for the materials used in the second acceptance test. If the responsibility for the failure of the first acceptance test lies with the Licensee, the Licensee shall, at his own expenses, take measures to eliminated the defects and bear all the relevant expenses incurred in the second acceptance test.

7.5 If it is due to the Licensor’s responsibility that any technical performance of the Contract Products specified in Annex _____ to the

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Contract is still not achieved in the second acceptance test, the Licensor shall compensate the Licensee for the direct expenses sustained by the Licensee, for the acceptance test, and shall at his own expenses, take measures to eliminate the defects and send his technical personnel to participate in the third acceptance test. If the responsibility for the failure of the second acceptance test lies with the Licensee, the Licensee shall, at his own expenses, take measures to eliminate the defects and bear the relevant expenses incurred in the third acceptance test.

7.6 If it is due to the Licensor’s responsibility that any technical performance of the Contract Products specified in Annex _____ to the Contract is still not achieved in the above-mentioned three acceptance tests lies with the Licensee, then both parties shall discuss and agree upon further execution of the Contract.

ARTICLE 8 GUARANTEES AND CLAIMS

8.1 The Licensor shall guarantee that the Technical Documentation and Software supplied by the Licensor to the Licensee in accordance with the Contract shall be of the latest and well-proved Technical Documentation and Software which are actually used by the Licensor and that the improved, modified and developed Technical Documentation and Software shall be supplied in time by the Licensor to the Licensee in the course of implementation of the Contract, without charge.

8.2 The Licensor shall guarantee that the Technical Documentation and Software supplied by the Licensor to the Licensee in accordance with the Contract shall be complete, correct and legible, and shall be

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delivered in time in accordance with the stipulations in Annex _____ to the Contract.

8.3 IF IT IS FOUND BY THE licensee that the Technical Documentation and Software supplied by the Licensor is not in conformity with the stipulations in Annex _____ to the Contract and Clause 8.2 to the Contract, the Licensor shall mail the related Technical Documentation to Licensee free of charge within 30 (thirty) days after receiving the Licensee’s written notice.

8.4 If the Licensor fails to deliver the Technical documentation and Software in accordance with the time schedule stipulated in Annex _____ to the Contract and Clause 8.3, the Licensor shall pay to the Licensee penalties for late delivery of the Technical Documentation and Software at the following rates:

0.5% (point five percent) of the total Contract price of the Technical Documentation and Software for each full week of late delivery. The above-mentioned total penalties shall not exceed 5% (five percent) of the total Contract price of this contract.

The penalty paid shall be in the form of Liquidated Damages and shall fully indemnify the Licensee for all costs incurred as a result of such delay.

8.5 Payment of penalty made by the Licensor to the Licensee in accordance with the stipulation in Clause 8.4 to the Contract shall not release the Licensor from his obligations to continue to deliver the Technical Documentation and Software, which is subject to penalties for

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late delivery.

8.6 If the period for late delivery of the Technical Documentation and Software exceed 6. (Six) months, the Licensee shall be entitled to terminate the Contract. In such case, the Licensor shall return to the Licensee the total amounts which the Licensee has already paid plus interest at the rate of 12% per annual thereon.

8.7 If it is due to the Licensor’s responsibility that any technical performance of the Contract Products is not achieved in the acceptance tests, the case shall be dealt with in the following manner:

If it is due to the Licensor’s 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 Licensor’s 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.

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