EX-10.7
21
v060112_ex10-7.htm
LICENSE
AND TECHNICAL ASSISTANCE AGREEMENT
between
WUHAN
BLOWER CO., LTD.
and
MITSUBISHI
HEAVY INDUSTRIES, LTD.
INDEX
|
Article
1. Definitions
|
1
|
|
Article
2. Grant of Rights
|
3
|
|
Article
3. Technical Assistance
|
3
|
|
Article
4. Payment
|
5
|
|
Article
5. Property
|
10
|
|
Article
6. Improvement
|
11
|
|
Article
7. Secrecy
|
12
|
|
Article
8. (Intentionally left blank)
|
14
|
|
Article
9. Warranty
|
14
|
|
Article
10. Delivery of documentation
|
15
|
|
Article
11. Assignment
|
16
|
|
Article
12. Trademark and Marking
|
16
|
|
Article
13. Termination
|
17
|
|
Article
14. Force Majeure
|
19
|
|
Article
15. Arbitration
|
19
|
|
Article
16. Governing Law
|
20
|
|
Article
17. Period of Agreement
|
20
|
|
Article
18. Ratification and Effective Date
|
20
|
|
Article
19. Competitive Products
|
20
|
|
Article
20. Subcontract for components
|
20
|
|
Article
21. No agency Relationship
|
23
|
|
Article
22. Entire Agreement and Variations
|
23
|
|
Article
23. Notices
|
23
|
|
Article
24. Attachments
|
24
|
Attachment
1: Content
of Information
Attachment
2: Possible
Collaboration Fields
Attachment
3: Conditions
of WBC personnel Training in Japan
Attachment
4: Conditions
of MHI personnel dispatch
Attachment
5: Scope
& Specification of Components to be supplied by MHI
License
and Technical Assistance Agreement
This
Agreement made and entered into as of July 5, 2005, between Wuhan Blower Co.,
Ltd., a corporation organized and existing under the laws of the People’s
Republic of China, having its principal office at Xxxx Xxxx xxx Science Park
East Lake Technology Development Zone, PRC (hereinafter called “WBC”), and
Mitsubishi Heavy Industries, Ltd., a corporation organized and existing under
the laws of Japan, having its principal office at 00-0, Xxxxx 0-xxxxx,
Xxxxxx-xx, Xxxxx 000-0000 XXXXX (hereinafter called “MHI”).
WITNESSETH:
WHEREAS,
MHI and Wuhan Blower Works made a license agreement for Centrifugal Fans and
Axial Flow Fans in December 1987, and its extension agreement in January 1998.
However, the extension agreement has terminated in 2003, and
WHEREAS,
Wuhan Blower Works managed by the government was dissolved and WBC was newly
established as a private company in April 2004, and
WHEREAS,
MHI has developed certain technologies for Centrifugal Fans and Axial Flow
Fans
from those licensed to Wuhan Blower Works, and
WHEREAS,
for expanding its sales activities in P.R.C., WBC desires to obtain a license
to
design, manufacture and sell Licensed Product (as hereinafter defined) based
on
the technologies further developed by MHI as mention above.
WHEREAS,
MHI is willing to license WBC the rights of the Licensed Product under the
know-how, technical information, owned and controlled by MHI and to furnish
WBC
with technical services therefore.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
Article
1. Definitions
In
this
Agreement, the following expressions have the following meanings:
| 1.1 |
The
term “Licensed Product” means AXIAL FLOW FANS for more than 600MW-class
developed, designed and commercially produced and sold by MHI as
of the
date of execution hereof.
|
| 1) |
The
term “Information” means MHI’s proprietary confidential drawings,
specifications and other technical information necessary for the
design,
sales, assembly, installation, operation and maintenance of the Licensed
product and any other services rendered hereinafter as described
in
Attachment 1 “Content of
Information.”
|
| 1.2 |
The
term “Territory” means the territory of the People’s Republic of China
(hereinafter called “PRC”), excluding Taiwan, Hong Kong and
Macao.
|
| 1.3 |
“Effective
Date” means the date when both parties make signature of this
Agreement.
|
| 1.4 |
“Net
Sales Price” in respect of a Licensed Product means the total selling
price invoiced by WBC to its customers, distributors or dealers in
respect
of the Licensed Product, less only costs for (i) packing, transportation
and shipping insurance, (ii) value added tax and import duty, (iii)
the
subcontract price for components and/or parts supplied by MHI pursuant
to
this Agreement, and (iv) components purchased by WBC with no technical
relation to Information such as motors. In any case in which the
Net Sales
Price is reduced by reason of any subsidies, such subsidies shall
be added
to such Net Sales Price before calculating the Royalty payable to
MHI
pursuant to Article 4.
|
| 1.5 |
“Unusual
Development” shall mean significant development or improvement made by
either party regarding Information or Licensed Products, particularly
the
development or improvement which consumes major expenditure for such
development or improvement, or offers a considerable commercial
advantage.
|
| 1.6 |
“Technical
Collaboration Meeting” means the meeting that shall be held at MHI
Nagasaki Machinery Works between MHI and WBC, for three days term
at most,
once a year maximum, for discussing not about specific projects,
but about
general technical issues and market
strategy.
|
-2-
Article
2. Grant
of
Rights
| 2.1 |
Subject
to the provisions of this Agreement, MHI hereby grants to WBC a
non-exclusive right to make, use and sell the Licensed Product in
the
Territory under the Information owned and controlled by MHI as specified
in the Article 1 hereof and technical assistance rendered to WBC
pursuant
to this Agreement
|
| 2.2 |
WBC
may sell the Licensed Product outside the Territory, on condition
that WBC
shall discuss its conducting sales promotion with MHI in advance
and
obtain the prior written consent on selling the Licensed Product
to
outside the Territory from MHI of each
project.
|
| 2.3 |
No
right to grant a sub-license hereunder to any third parties is granted
to
WBC without the prior written consent of
MHI.
|
| 2.4 |
MHI
agrees to supply WBC, upon the request of WBC, with the parts and/or
components of the Licensed Product under the terms and prices provided
in
Article 20 and WBC agrees to purchase such parts and/or components
of the
Licensed Product from MHI where necessary. The supply of such materials,
parts, equipment, tooling and instruments shall be contracted
separately.
|
| 2.5 |
MHI
shall provide suitable recommended sub-vender list to WBC. Further
WBC can
purchase any components, any parts outside of Territory from MHI’s
recommended sub-vender list with prior consent of
MHI.
|
Article
3. Technical
Assistance
In
accordance with any Article of this Agreement, the following technical
assistances shall be provided by MHI to WBC to the extent considered necessary
by MHI hereunder.
MHI,
whichever later within sixty (60) days after the Effective Date of this
agreement, or within thirty (30) days after MHI’ receipt of 1st
installment of the Initial Fee in accordance with Article 4.2.1 hereof; will
furnish WBC with such Information as the documentation relating to the Licensed
Product listed Attachment 1. Technical Documents means the existing documents
that are used in MHI at the Effective Date.
-3-
At
the
request of WBC, during the term hereof, MHI will accept the one time training
in
Japan at MHI’s factory for technical instruction and training, according to the
terms and conditions in Article 4 and Attachment 3.
Contents
of Training shall be limited to;
-
Maximum
8 trainees per training mission
-
Maximum
30 days per training mission
-
1
training missions
| 3.3.1 |
Engineering
Service in the Territory
|
At
the
request of WBC, even in the case of the request from WBC derived from MHI’s
recommendation, during the term of this Agreement, under the availability of
MHI’s engineer, MHI will provide WBC, in the Territory, with reasonable number
of MHI’s technical personnel to assist WBC in manufacturing and/or producing the
Licensed Product, according to the terms and conditions in Article 4.5 and
Attachment 4.
In
case
WBC requires MHI to dispatch his personnel to promote WBC sales, MHI agree
to
dispatch his technical and/or commercial personnel to the Territory under the
same condition of this Article.
| 3.3.2 |
Engineering
Service at MHI’s office in Japan
|
At
the
request of WBC by way of e-mail or telefax during the terms of this Agreement,
under the availability of MHI’s engineer, MHI will review the works of WBC by
MHI’s engineer at their own office in Japan after the technical documents
provided to WBC, according to the terms and conditions in Article 4.5 and
Attachment 4. In case MHI will accept to render such services, MHI shall inform
WBC of the records of Man-Hours for the required services in weekly basis during
the period of the service. WBC and MHI shall mutually discuss and agree with
the
claimed Man-Hours in good faith.
-4-
| 3.4 |
Personnel
of either MHI or WBC during the period that they are on the premises
of
the other party shall act in accordance with all rules and regulations
prevailing on the premises of such other party. However, such personnel
of
either party shall be considered for any purposes to be an employee
of the
other.
|
| 3.5 |
All
documents, drawings or otherwise assistances delivered or furnished
hereunder will be basically in English or sometimes in Japanese due
to MHI
own reasons as agreed between the parties hereto and contain metrical
system measurements, qualities and standards normally used by MHI
and
giving the necessary standards if necessary, and MHI will not be
required
to provide interpreters or translating services in any case. If any
reasonable doubt appears, MHI agree to clarify it as soon is
possible.
|
| 3.6 |
In
addition to the Information listed in Attachment 1, MHI and WBC may
discuss and conclude further license agreement regarding the technologies
as per Attachment 2.
|
| 3.7 |
Based
on the request from WBC, under MHI’s engineers’ availability, Technical
Collaboration Meeting can be held at Nagasaki, without Engineer Service
Fee as per Article 4.5. All of the expense regarding the Collaboration
Technical Meeting such as accommodation and transportation shall
be born
by WBC.
|
Article
4. Payment
In
consideration of the Licenses granted to Article 2 and of Information provided
under Article 3, WBC shall pay to MHI the following initial fee, royalties
and
charges by T.T. Remitance or Letter of Credit.
-5-
Initial
Fee of JPY 33,000,000 (Thirty Three Million Japanese Yen) shall be paid in
the
two installments by Letter of Credit;
| 4.2.1 |
JPY
13,200,000 shall be paid by WBC to MHI after the Effective Date of
this
Agreement in the following terms and
conditions.
|
WBC
shall
open the irrevocable Letter of Credit issued by a first class bank in favor
of
MHI, covering forty (40) percent of Initial Fee, within 30 days after the
Effective Date. The Credit shall be available against MHI’s draft(s) drawn at
Sight on the opening bank for 100 percent of the invoiced value accompanied
by
the copy of this Agreement with endorsements of both parties. Payment shall
be
effected by the opening bank telegraphic transfer against presentation to them
aforesaid draft(s) and document. The Letter of Credit shall be valid until
the
60 days after the Effective Date.
| 4.2.2 |
JPY
19,800,000 shall be paid by WBC to MHI after WBC receives shipping
advice
of the Technical Document from MHI. WBC shall 30 days prior to the
date of
the delivery, open the irrevocable Letter of Credit issued by a first
class bank in favor of MHI, covering sixty (60) percent of Initial
Fee.
The Credit shall be available against MHI’s draft(s) drawn at Sight on the
opening bank for 100 percent of the invoiced value accompanied by
the copy
of the following documents. Payment shall be effected by the opening
bank
telegraphic transfer against presentation to them aforesaid draft(s)
and
documents, The Letter of Credit shall be valid until the 30 days
after
shipment is effected.
|
| |
-
|
Airway
xxxx and list of the documentation as per Attachment 1 in one (1)
copy
each
|
| |
-
|
A
commercial invoice covering sixty (60) percent of the total Initial
Fee in
five (5) copies
|
| |
-
|
A
sight draft covering sixty (60) percent of the total Initial Fee
in five
(5) copies
|
-6-
The
banking charges of both parties incurred in China in the execution of the
contract shall be borne by WBC and those incurred outside of china shall be
borne by MHI.
Royalties
shall he paid as hereinafter provided in respect of all the Licensed Product
manufactured and used and/or sold by WBC during the continuance of this
Agreement.
a) Licensed
Product sold in Territory
| (i) |
New
project at the rate of 3.0 percent on Net Sale
Price
|
| (ii) |
After
sales service at the rate of 3.0 percent on Net Sales
Price
|
b) Licensed
Product sold outside Territory, according to 2.2 hereof
(i) New
project at
the
rate of 3.5 percent on Net Sale Price
(ii) After
sales service at
the
rate of 3.5 percent on Net Sales Price
| 4.3.2 |
Half
year payment and report
|
Payment
of the royalties specified above in this Article shall be made MHI within sixty
(60) days after the expiration of each half-yearly period, ending on the
30th
day of
June and the 31st
day of
December in each calendar year in respect of the Licensed Product manufactured,
used and/or sold in each half-yearly period.
Each
payment shall be accompanied by a statement in writing certified as correct
by a
responsible officer of WBC and showing the number or quantity itemized by each
type of Licensed Product, name of customer, name of project, and value with
price breakdown into each component covering the purchased components such
as
motors as well as the licensed components of all the Licensed Product
manufactured, used and/or sold by WBC during the relevant half-yearly
period.
-7-
For
the
purpose of calculating the amounts due to MHI in respect of the half-yearly
periods referred to above, any Net Sales Price of WBC expressed in currencies
other than Japanese Yen shall be converted into Japanese Yen based on the
nominal central rate quoted by the Bank of China in the Territory on the day
next after the end of the half-yearly period in respect of which payment is
to
be made.
The
payment hereof shall be made as per Article 4.7. within 30 days after WBC
receives 5 copies of commercial invoice covering the amount of royalty of each
half year term.
Fee
for
Training as per Article 3.2 shall be included in Initial Fee as per Article
4.2.
In case that additional Training would be executed, the compensation shall
be
made as follows;
WBC
shall
pay 350,000 Japanese Yen per day inclusive of trainer, training text and
necessary facilities.
Amount
due pursuant to this provision shall be paid to MHI by WBC within sixty (60)
days after 30th
day of
June and 31st
day of
December in each year for Training rendered by MHI during the six (6) month
period preceding such date. The payment hereof shall be made as per Article
4.7
within 30 days after WBC receives the following documents.
| (a) |
5
copies of invoice covering 100 percent amount to be
paid
|
| (b) |
1
original training record certified by representative of WBC and
MHI
|
| (c) |
1
sight draft covering the above same
amount
|
| 4.5 |
Engineering
Service Fee
|
| 4.5.1 |
Engineering
Service in the Territory
|
For
all
personnel furnished by MHI, including commercial personnel for business support,
in accordance with Article 3.3 hereof, WBC shall pay 120,000 Japanese Yen per
each MHI’s engineer/day.
-8-
Amount
due pursuant to this provision shall be paid to MHI by WBC within sixty (60)
days after 30th
day of
June and 31rd
day of
December in each year for the technical services rendered by MHI during the
six
(6) month period preceding such date.
Personnel
dispatched from MHI shall not stay continuously in the Territory more than
183
days.
| 4.5.2 |
Engineering
Service at MHI’s office in Japan
|
In
case
of the Service of MHI rendered at their own office in Japan, after WBC’s receipt
of Technical Documents provided by MHI as per Article 3.1, the fee for such
services as the above shall be JPY 15,000 per Man-Hour.
| 4.5.3 |
Payment
for Engineering Service
|
The
payment hereof shall be made as per Article 4.7 within 30 days after WBC
receives the following documents.
| (a) |
5
copies of invoice covering 100 percent amount to be
paid
|
| (b) |
1
original working record certified by representative of WBC and
MHI
|
| (c) |
1
sight draft covering the above same
amount
|
| 4.6 |
All
payments under this Agreement shall be inclusive of withholding tax
(income tax) and exclude other taxes imposed on MHI in P.R.C. WBC
may
deduct from payments of royalties to MHI withholding taxes (income
taxes)
imposed by the taxation authorities of PRC under the relevant convention
between Japan and PRC for the avoidance of double taxation with respect
to
income tax, provided that WBC provides to MHI tax receipt issued
by P.R.C.
tax authorities and any other documents if necessary to enable MHI
to
claim a credit for that withholding tax in Japan. If any other taxes
are
imposed on MHI in respect of such amounts by authorities of P.R.C.
in
prevailing laws and regulation, WBC shall compensate MHI for such
taxes.
|
| 4.7 |
All
of the payments due hereunder shall be made in the currency of Japanese
Yen and shall be made by WBC via telegraphic transfer to MHI’s account as
specified hereunder, any bank charges incurred in PRC to be borne
by
WBC:
|
-9-
The
Bank
of Tokyo-Mitsubishi, Limited / Head Office
0-0,
Xxxxxxxxxx 0-xxxxx, Xxxxxxx-xx, Xxxxx, Xxxxx
Current
deposit account No. 0000000
| 4.8 |
WBC
shall keep full separate and accurate books and records showing
particulars of all the Licensed Products manufactured, used and/or
sold.
WBC agrees that MHI at MHI’s expense, may designate a representative to
audit all royalty reports submitted to MHI and shall give such
representative every facility to audit such reports, including opportunity
to inspect the factory, the relevant books and records of WBC to
the
extent necessary for such audit, which books and records shall be
retained
by WBC and available for
inspection.
|
| 4.9 |
Should
WBC fail to make any payment due on or before the date specified
in this
Agreement, then any such payment shall be subject to interest at
an annual
compound rate of eight
percent (8%) from the date such payment is due until the date such
payment
is made.
|
Article
5. Property
| 5.1 |
All
Information communicated to WBC by MHI shall remain the legal and
absolute
property of MHI, and WBC undertakes and agrees to cease using such
Information upon termination of this Agreement for any
reason.
|
| 5.2 |
Upon
termination as stipulated in Article 13 and Article 17 of this Agreement,
WBC shall immediately cease to use any and all Information and shall
immediately return to MHI all documents containing Information furnished
by MHI hereunder (without retaining copies thereof), except those
documents required by WBC to carry out the orders or contracts expressly
referred to in Article 5.2, which documents shall be immediately
returned
to MHI (without the retaining of copies thereof) after completion
of such
orders or contracts. The above obligations of WBC shall not apply
to
Information which WBC can prove:
|
-10-
| |
a)
|
was
in its lawful possession at the time of disclosure to it hereunder
and was
not acquired directly or indirectly from
MHI;
|
| |
b)
|
was
in the public domain at the time of disclosure to it hereunder or
became
publicly available after such disclosure through no fault of
WBC;
|
| |
c)
|
may
lawfully become available to WBC from a source other than MHI after
disclosure to WBC hereunder.
|
|
5.4
|
WBC
shall not file or cause to be filed any application for intellectual
property rights in any country of the world, which application is
directed
to or incorporates any Information.
|
|
5.5
|
WBC
agrees that, in the event of a breach or threatened breach by it
of the
provisions of this Article 5. MHI shall be entitled to an injunction
against such breach and to claim damages and any loss of profit or
any
other indirect or consequential damages that may be suffered as a
result
of the breach by WBC.
|
Article
6. Improvement
| 6.1 |
WBC
shall have the right to modify or improve the Licensed Product. However,
WBC shall have no right to disclose, provide, apply for a patent
of or
license such modification, improvements or merged technology to any
third
party.
|
| 6.2 |
Either
Party hereto agrees to keep the other Party advised of improvements
to the
Licensed Products, made during the term of this Agreement, except
for
Unusual Development, so that each party hereto may, without paying
any
extra charge, benefit from the other Party’s experience and findings, and
pursuant to a non-exclusive royalty-free license to use, manufacture
or
sell during the term of this Agreement subject to Secrecy obligation
stipulated in Article 7 hereof.
|
However,
if either party makes an Unusual developments to Information or Licensed
Product, it may in its sole discretion disclose or license such improvement
to
the other party at an appropriate royalty rate and under other conditions as
separately agreed between the Parties, provided that MHI’s Unusual developments
listed in Attachment 2 shall be discussed about the license conditions based
on
the request from WBC.
-11-
Article
7. Secrecy
| 7.1 |
All
information (including Information) furnished by MHI (hereinafter
referred
to as “Confidential Information”) shall be treated by WBC as confidential,
shall only be disclosed to those employees of WBC who need to know
the
Confidential Information to the extent necessary for the purposes
of this
Agreement and who have given a confidentiality undertaking in accordance
with Article 7.4, and shall not be disclosed to any third
party.
|
| 7.2 |
The
secrecy obligations stipulated herein shall remain in full force
and
effect during and after termination or expiration of this Agreement
for
any reason.
|
| 7.3 |
The
requirements of Article 7.1 shall not apply to any Confidential
Information that WBC demonstrates, promptly after receipt from MHI,
and to
MHI’s satisfaction, is in the public domain or is (at the time of receipt
from MHI) already in the lawful possession of
WBC.
|
| 7.4 |
WBC
shall ensure that it and its successors if any, together with their
respective managers and employees shall keep the secrecy obligations
hereunder. WBC shall ensure that each of its relevant employees and
managers enters into a binding confidentiality agreement with WBC
for the
protection of all Confidential Information. WBC shall establish,
upon
consultation with MHI, the information management rules to prevent
unauthorized disclosure thereof. Such rules may include, without
limitation, limitation of the Person, place and manner for access
to
Confidential Information, management system of Confidential Information,
supervision to implement the rules and penalty in case of
violation.
|
| 7.5 |
WBC
shall not disclose or allow to be disclosed, to any third party (including
subsidiaries and affiliates of WBC), any Confidential Information,
including the existence and details of this Agreement, without MHI’s prior
written approval. Approval will only be given in as far as it is
required
for the fulfillment of this Agreement. If such approval is given,
WBC
shall ensure that the third party involved is bound by and complies
with
the secrecy obligations hereunder.
|
-12-
| 7.6 |
At
any time during the Term of this Agreement or following expiration
or
termination of this Agreement, when MHI reasonably alleges any breach
of
this Article 7, WHI may audit WBC’s technical documents related to
Licensed Products to satisfy itself that WBC has complied with this
Article 7.
|
| 7.7 |
In
case that WBC or MHI finds any unauthorized disclosure of Confidential
Information, the finding Party shall immediately notify the other
Party of
such unauthorized disclosure. Within a week after the above notification,
the Parties shall have a meeting to discuss the countermeasure for
minimizing damages and preventing further disclosure. If there is
damage
caused by WBC’s reason to MHI, WBC shall compensate MHI such
damage.
|
| 7.8 |
If
unauthorized disclosure occurs by any third party, WBC and MHI shall
immediately take action such as suing the party against its
disclosure.
|
| 7.9 |
WBC
shall have the right to reproduce in whole or in part, the manuals,
drawings, sets of procedures, and any documentation containing the
information and furnished hereunder by MHI, regardless of whether
the same
may be copyrighted or otherwise protected as confidential proprietary
property; provided, however, that such reproductions shall be for
the
internal use only to accomplish the purpose of this Agreement by
WBC and
shall be subject to the same restrictions on use and disclosure as
are set
forth herein with respect to the applicable manual, drawing, set
of
procedure or documentation. WBC shall keep accurate records of the
number
and location of all such reproductions and shall make such records
available to MHI for inspection upon reasonable prior written request.
All
such reproduction shall include any copyright or proprietary labels,
legends of notices placed upon or included in the manuals, the Information
and documentation by MHI.
|
-13-
Article
8. (Intentionally
left blank)
Article
9. Warranty
| 9.1 |
MHI
warrants that the documentation to be supplied by MHI shall be for
the
latest version of the Licensed Product and shall be entirely identical
with the documentation MHI uses his current production of the Licensed
Product on the Effective Date of this
Agreement.
|
| 9.2 |
MHI
warrants that the documentation to be supplied by MHI shall be complete,
correct, uniform, legible and dispatched in time according to the
stipulation contained in Article 3.1 and Attachment 1 to the Agreement.
The relevant definitions are as
follows:
|
| 9.2.1 |
The
term “complete” means that the documentation to be supplied by MHI shall
include all documents of the Licensed Product as stipulated in Attachment
1 to the Agreement and shall be exactly the same as the documentation
MHI
uses in his own factories.
|
| 9.2.2 |
The
term “correct” means that the documentation to be supplied by MHI shall be
accurate.
|
| 9.2.3 |
The
term “uniform” means that the documentation to be supplied by MHI shall
have uniform symbols, standards and specifications,
etc.
|
| 9.2.4 |
The
term “legible” means that the drawings, graphs, words, symbols, etc. in
the documentation to be supplied by MHI can be read
easily.
|
| 9.3 |
If
WBC finds that the documentation supplied by MHI is not in conformity
with
the stipulations of Article 9.2 of the Agreement, MHI shall, within
the
shortest possible time, but not later than 30 (thirty) days after
receipt
of WBC’s written notice, dispatch free of charge to WBC the missing, or
correct, or uniform, or legible documentation. However reply to the
request will take more than 30 days due to the reason of its difficulty
such as research, design concept etc., MHI will inform WBC the time
of
reply in writing.
|
-14-
| 9.4 |
If
MHI fails to dispatch the documentation specified in Article 3.1
and
Attachment 1, MHI shall pay penalty to WBC at the following
rates;
|
| |
a)
|
0.1%
(Zero point one percent) of the initial fee which stipulated in Article
4.1 for each full week of delay from 1 to 4
weeks.
|
| |
b)
|
0.15%
(zero point one five percent) of the initial fee which stipulated
in
Article 4.1 for each full week of delay from 5 to 8
weeks.
|
| |
c)
|
0.2%
(zero point two percent) of the initial fee which stipulated in Article
4.1 for each full week of delay exceeding 8
weeks.
|
| 9.5 |
The
penalty (ies) to be paid by MHI to WBC shall not free MHI from his
obligation to continue the delivery of the
documentation.
|
| 9.6 |
If
delay in delivery of any item of the documentation which WBC deems
to be
important exceeds six (6) months, WBC shall have the right to terminate
the Agreement and MHI shall be obliged to refund to WBC all his payments
together with the corresponding interest at the rate of 8% per
annum.
|
| 9.7 |
MHI’s
liability for damages in the performance of these services furnished
to
WBC under this Agreement, regardless of whether said damages arise
as a
breach of warranty, breach of contract, tort, infringement, or otherwise,
shall in no event exceed the amount 5% (Five percent) of the Initial
Fee
paid to MHI by WBC hereunder. In no event will MHI have any liability
of
any nature for any incidental, special, indirect, consequential,
multiplied, exemplary or punitive damages. Except as specified in
Paragraph 9.3 and 9.4 hereof, MHI has no further responsibility for
any
claim with respect to Information and the Licensed Product manufactured
and sold by WBC hereunder.
|
Article
10. Delivery
of documentation
| 10.1 |
MHI
shall provide two (2) separate acts of technical documents of the
technical documents except for reference drawings to
WBC.
|
-15-
| 10.2 |
Within
24 hears after dispatch of each lot of the Technical Information,
MHI
shall notify WBC by fax the detail of the delivery with detailed
packing
list of the Technical Information.
|
| 10.3 |
If
WBC finds that some listed Technical Information is missing, it shall
notify MHI within thirty (30) days after receipt of such Technical
Information (first receipt period) and specify which part of Technical
Information is missing. Promptly after receipt of such notification,
MHI
shall ship the missing document to WBC within thirty (30) days free
of
charge. If no such notification is received by MHI within the first
receipt period, the listed Technical Information shall be deemed
to have
been accepted by WBC in full.
|
| 10.4 |
If
the Technical Information is found lost or damaged during air
transportation, WBC shall request MHI to supply the Technical Information
again; MHI shall ship the lost or damaged Technical Information to
WBC
within the shortest possible time free of charge, but not later than
thirty (30) days after they received the written request from
WBC.
|
Article
11. Assignment
Neither
this Agreement or any of the right and obligation created herein may be
assigned, in whole or in part, by either party hereto without the prior written
consent of the other party.
Article
12. Trademark
and Marking
| 12.1 |
Nothing
contained in this Agreement shall be construed as granting to WBC
any
right or privilege to use, and WBC shall not use, in any manner
whatsoever, the trademark “MITSUBISHI” in logotype or in any other style,
or the symbol trademark known as the “Three Diamonds” (words or device),
or any other trademarks, owned, controlled or used by MHI, or any
other
word or xxxx similar thereto.
|
| 12.2 |
During
the term of this Agreement, WBC, however, shall indicate in its
advertising and the like in connection with its sales of Licensed
Products
manufactured or finished pursuant to this Agreement the legend
“Manufactured under license from Mitsubishi Heavy Industries, Ltd.” in
equally sized lettering on Licensed Products manufactured hereunder
in the
manner and to the extent from time to time approved in writing by
MHI;
provided, however, that Licensed Products bearing such plate shall
conform
in all respects to the designs and quality standards established
by MHI.
If MHI determines that its applicable designs and/or quality standards
for
Licensed Products are not complied with by WBC, MHI shall have the
right
to forbid the use of such nameplate by WBC until such time as MHI
is
satisfied that its applicable designs and quality standards for Licensed
Products are being wholly complied with by
WBC.
|
-16-
| 12.3 |
Upon
expiration or termination for any reason of this Agreement, WBC shall
immediately cease any use of such nameplate and phrase as provided
for in
Paragraph 12.2 above.
|
Article
13. Termination
| 13.1 |
This
Agreement may be terminated:
|
| 2) |
by
either Party upon sixty (60) days written notice if the other Party
shall
violate any of the provisions or conditions of this Agreement and
shall
fail to discontinue or remedy such violation within the said period
of
sixty (60) days;
|
| 3) |
by
either Party immediately if the other Party shall become insolvent
or
unable to pay its debts as they mature, shall institute a bankruptcy
or
insolvency proceeding or have such a proceeding instituted against
it
which is not dismissed within thirty (30) days, shall make an assignment
for the benefit of creditors, or shall commence dissolution or liquidation
proceedings;
|
| 4) |
by
MHI immediately upon written notice being given, in the event that
WBC
shall transfer all or any substantial part of its manufacturing plants
for
Licensed Products or cease its business activities relating to Licensed
Products;
|
| 5) |
by
MHI immediately upon written notice being given, if control of WBC
shall
pass, directly or indirectly, into the hands of a third party handling
products considered by MHI to be competitive with Licensed Products;
or
|
-17-
| 6) |
by
MHI immediately upon written notice being given, if the shareholding
in
WBC shall be substantially modified or if WBC shall come under the
control
of management other than that controlling WBC at the date of this
Agreement, and if MHI’s interest shall be damaged by such modification of
shareholder or change of management
control.
|
| 13.2 |
Expiration
or termination for any reason of this Agreement shall not in any
case
operate to relieve either of the Parties from its responsibility
to
fulfill any obligations under the provisions of this Agreement which
shall
have accrued to such Party prior to the time of such expiration or
termination.
|
| 13.3 |
Upon
expiration or termination for any reason of this Agreement, all licenses
and rights granted under this Agreement shall cease, and WBC shall
discontinue manufacture, use, sale or other disposition of Licensed
Products or any part of Licensed Products in any way (including but
not
limited to obtaining the license from the other Party for the purpose
of
continuing to use MHI’s technology licensed under this Agreement), and
shall return all Confidential Information to MHI subject, however,
to the
following:
|
| 1) |
WBC
may continue to complete the manufacture of, and may sell, Licensed
Products for which orders have been received or contracts executed
by WBC
prior to the date of the expiration or termination of this Agreement,
on
condition that WBC shall, within thirty (30) days following such
expiration or termination of this Agreement, make payments of royalties
and reports as provided in Article 4 in respect of the said orders
or
contracts.
|
To
the
extent of such completion of said orders or contracts, but only to that extent,
all provisions of this Agreement shall survive such expiration or termination
and continue in full force and effect.
| 2) |
If
this Agreement is not terminated prior to the expiry of the Term,
then the
Parties may discuss all the terms and conditions and agree for the
continuation of the license granted under this Agreement for a further
period.
|
-18-
| 13.4 |
Expiration
or termination for any reason of this Agreement shall not affect
WBC’S
obligations with respect to confidential treatment of Information
as
provided in Article 7 and Article 12 and all provisions of this Agreement
pertaining to such confidentiality shall survive such expiration
or
termination and continue in full force and
effect.
|
Article
14. Force
Majeure
| 14.1 |
If
either of the parties to the Contract prevented from executing the
Contract by such cases of force majeure as war, serious fire, flood,
typhoon, earthquake and other cases which will be recognized by both
parties upon agreement as being cases of force majeure, the time
for
implementing of the present Contract shall be extended by a period
equivalent to the effect of the
occurrences.
|
| 14.2 |
The
prevented party shall inform the other party as soon as possible
by cable
or telex and airmail by registered letter a Certificate issued by
competent authorities concerned within 14 days of the occurrence
of force
majeure for the examining and confirmation of the other
party.
|
| 14.3 |
The
prevented party shall inform the other party as soon as possible
by cable
or telex of the termination or elimination of the case of force majeure
and confirmed by registered
airmail.
|
Article
15. Arbitration
Both
parties will settle the differences, if any, through friendly discussion. If
such discussion fails, the difference shall be finally settled by arbitration
in
accordance with the Rules of Conciliation and Arbitration of the International
Chamber of Commerce by three arbitrators (one appointed by each Party and the
third chosen by the first two arbitrators) as amended from time to time. The
place for such arbitration shall be
London, England. The arbitration award
be
final and binding on both party, and both party shall act accordingly. The
arbitration fee shall be borne by the losing party except otherwise shall be
continuously executed by both parties except the part of the Agreement which
is
under arbitration.
-19-
Article
16. Governing
Law
This
Agreement and all questions of construction, validity and performance under
this
Agreement shall be governed by English law.
Article
17. Period
of
Agreement
This
Agreement shall be deemed to come into effort on the Effective Date
defined-hereinafter and unless sooner terminated under any other provision
herein contained shall continue in force for a period of ten (10) years, and
shall continue thereafter for succeeding periods of 5 years unless terminated
by
either party by giving written notice to the other by registered mail stating
the intention to terminate this Agreement not less than three (3) months prior
to the expiration of said ten (10) year period or of any such succeeding
period.
Article
18. Ratification
and Effective Date
| 18.1 |
This
Agreement shall become effective on the date when this Agreement
has been
executed by both parties hereto.
|
| 18.2 |
In
the event that either parties’ government approval is required for the
effectiveness of this Agreement, this Agreement shall become effective
on
the date of such approval. Both parties will be entitled to terminate
this
Agreement unless such government approval is obtained within three
(3)
months after the execution of this
Agreement.
|
Article
19. Competitive
Products
WBC
agrees that it will exert its best effort for promoting the business of the
Licensed Product in the Territory.
Article
20. Subcontract
for components
| 20.1 |
WBC
shall sub-contract to MHI the supply of components for Licensed Products
as itemized below, if orders received or contracts executed by WBC
requires the following components being imported from outside the
Territory;
|
-20-
Price
of
components not mentioned in the followings shall be discussed and agreed,
referring to the following prices.
[Items
& Prices of components to be subcontracted from MHI (For 600MW Class Axial
Flow Fan)]
|
(1)
|
Forced
Draft Fan (Model No. ML-H1-R118/260)
| |
| | | | | |
| |
(A)
|
Rotor,
Hydraulic Cylinder (1) Fan
|
JPY
|
10,697,000-
|
| | |
(Parts/Item
No.: 1, 3, 4, 5, 13(*), 15)
| | |
| | | | | |
| |
(B)
|
Pilot
Valve/Sleeve (1) Fan
|
JPY
|
1,550,000-
|
| | |
(Parts/ItemNo.:13)
| | |
| | | | | |
| |
(C)
|
Others
(1) Fan
|
JPY
|
2,558,000-
|
| | |
(Parts/Item
No.:6-12, 14)
| | |
| | | | | |
| |
(D)
|
Roller
Bearing for one (1) Fan
|
JPY
|
1,650,000-
|
| | | |
|
(2)
|
Induced
Draft Fan (Model No. ML-H1-R155/300
| |
| | | |
| |
(A)
|
Rotor,
Hydraulic Cy1inder (1) Fan
|
JPY
|
18,893,000-
|
| | |
(Parts/Item
No.: 1, 3, 4, 5, 13(*), 18)
| | |
| | | | | |
| |
(B)
|
Moving
Blade (Casting) (1) Fan
|
JPY
|
9,985,000-
|
| | | | | |
| |
(C)
|
Pilot
Valve/Sleeve (1) Fan
|
JPY
|
1,740,000-
|
| | |
(Parts/Item
No.: 13)
| | |
| | | | | |
| |
(D)
|
Others
(1) Fan
|
JPY
|
8,332,000-
|
| | |
(Parts/Item
No.:6-12, 14-17)
| | |
| | | | | |
| |
(E)
|
Roller
Bearing for one (1) Fan
|
JPY
|
1,530,000-
|
| | | | | |
|
(3)
| Primary
Air Fan (Model No. ML-H2-R112/170) | |
| | | | | |
| |
(A)
|
Rotor,
Hydraulic Cylinder (1) Fan
|
JPY
|
13,145,000-
|
| | |
(Parts/Item
No.:2, 0, 0, 0, 0, 0, 0, 00, 00(*), 00)
| | |
| | | | | |
| |
(X)
|
Pilot
Valve/Sleeve (1) Fan
|
JPY
|
1,333,000-
|
| | |
(Parts/Item
No.:15)
| | |
| | | | | |
| |
(C)
|
Others
(1) Fan
|
JPY
|
5,288,000-
|
| | |
(Parts/Item
No.:6, 11-14, 16-20)
| | |
| | | | | |
| |
(D)
|
Roller
Bearing for one (1) Fan
|
JPY
|
2,000,000-
|
| | | |
|
(4)
| Boost
Up Fan (Model No.ML-H1-R236/440) | |
| | | | | |
| |
(A)
|
Rotor,
Hydraulic Cylinder (1) Fan
|
JPY
|
74,551,000-
|
| | |
(Parts/Item
No.: 13, 4, 5, 13(*), 18)
| | |
| | | | | |
| |
(B)
|
Moving
Blade (Casting) (1) Fan
|
JPY
|
28,428,000-
|
| | | | | |
| |
(C)
|
Pilot
Valve/Sleeve (1) Fan.
|
JPY
|
1,594,000-
|
| | |
(Parts/Item
No.: 13)
| | |
| | | | | |
| |
(D)
|
Others
(1) Fan
|
JPY
|
11,627,000-
|
| | |
(Parts/Item
No.; 6-12, 14-17)
| | |
-21-
|
(Note)
|
(1)
|
All
components supplied by MHI shall be delivered CIF Shanghai Port in
accordance with Incoterms 2000 and unloading work at the port of
destination shall be by WBC.
|
| |
(2)
|
When
Roller Bearing alone needs to be sourced from outside of the Territory,
WBC can procure the Roller Bearing from other source than
MHI.
|
| |
(3)
|
Delivery
schedule of subcontracted component shall be agreed in each
subcontract.
|
| |
(4)
|
The
above prices are for the components of the Fan of Model as specified
above. In case that the component which is subcontracted in accordance
with this agreement is for the Fan of different Model from the above;
prices thereof shall be quoted by MHI and agreed by both parties
in each
subcontract.
|
| |
(5)
|
Detail
scope of work of the above components is specified in Attachment
5.
|
| |
(6)
|
The
above prices shall be valid until 31 March, 2007. Thereafter, the
prices
shall be quoted by MHI and agreed by both
parties.
|
| 20.2 |
Payment
Terms for components subcontracted to MHI shall be made by the irrevocable
Letter of Credit, and the detailed terms and conditions of the Letter
of
Credit shall be in accordance with the relevant project
subcontract.
|
| 20.3 |
WBC
shall supply any part of Product, other than the components to be
supplied
by MHI, as required by the project. MHI shall not bear any responsibility
for the quality and performance for those components which are not
supplied by MHI. MHI shall bear liability to WBC for the quality
and
performance for those components supplied by MHI in accordance with
the
relevant project subcontract.
|
-22-
Article
21. No
agency
Relationship
Nothing
contained in this Agreement shall be construed to institute any of agency
relationship between the parties hereto.
Article
22. Entire
Agreement and Variations
This
Agreement constitutes the entire and only agreement between the parties hereto
and no variation, modification or alteration of any of the terms of this
Agreement shall be of any effect unless in writing signed by the authorized
officer or representative on behalf of each of the parties hereto.
Article
23. Notices
All
notices provided for herein shall be in writing and considered given when sent
by registered mail,
|
if
to WBC:
|
Liu
Xxx Xxxx
|
|
|
Vice
General Manager
|
|
|
Advanced
Engineering of Professor Rank
|
|
|
Wuhan
Blower Co., Ltd.
|
|
|
Xxxx
Xxxx dao Science Park East Lake Technology
|
|
|
Development
Zone, Wuhan, P.R.C
|
| | |
|
if
to MHI:
|
Xxxxxx
Xxxxxx
|
|
|
Manager,
Business Development and Strategic Planning Group
|
|
|
Mitsubishi
Heavy Industries, Ltd.
|
|
|
3-1,
Xxxxxxxxxxx 0-Xxxxx, Xxxxx-xx, 000-0000, Xxxxx
|
| | |
|
|
Xxxxx
Xxxxxxxxx
|
|
|
Acting
General Manager, Sales Department
|
|
|
Nagasaki
Shipyard and Machinery Works
|
|
|
0-0,
Xxxxxxxx-xxxxx, Xxxxxxxx, 000-0000,
Xxxxx
|
or
to
such addresses either party shall from time to time, furnished in writing to
other for such purpose.
-23-
Article
24. Attachments
All
the
attachment of this Agreement are integral part of this Agreement and have the
same force as the Train agreement.
NOW
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their duly and legally authorized officers or representatives in two (2)
originals with same force and effect on the day and year first
above.
|
Mitsubishi
Heavy Industries, Ltd.
| |
Wuhan
Blower Co., Ltd.
|
| | | |
|
/s/
Xxxxxx Xxxxx
| |
/s/
Xx Xxx
|
|
Xxxxxx
Xxxxx
| |
Xx
Xxx
|
|
General
Manager, Power Systems
| |
President
|
|
International
Operations Department
| |
General
Manager
|
|
Power
Systems Headquarters
| | |
-24-
