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CONTRACT for Contract No.: ………….. ………….. between (hereinafter referred to as “Buyer”) And与 (hereinafter referred to as “Seller“) (both Buyer and Seller are hereinafter referred to as “Parties”) ） Signing Date: June 8， 2010 Signing Place: Zibo， China CONTENTS Article  1    Definitions Article  2    Object of the Contract Article  3    Price Article  4    Terms of Payment Article  5    Delivery and Terms of Delivery Article  6    Packing and Marking Article  7    Layout and Integration Design Liaison Article  8    Standards and Inspection Article  9    Erection, Commissioning and Acceptance Test Article 10    Guarantee, Claim and Liquidated Damages Article 11    Force Majeure Article 12    Taxes Article 13    Confidentiality and Proprietary Rights Article 14    Suspension and Termination Article 15    Arbitration Article 16    Effectiveness of the Contract and Miscellaneous Article 17    Legal Addresses, Signatures ANNEXES: Annex  1    Technical Specification Annex  2    Scope of Supply of Equipment Annex 3    Overall Time Schedule and Erection Time Schedule Annex 4    Scope and Delivery Time ofTechnical Documentation Annex  5    Supervision of Erection & Commissioning; Annex  6    Acceptance Test Specification Annex 7    Spare Parts Annex 8    Standards for Equipment Design, Manufacture and Inspection Annex 9    Specimen of Letter of Guarantee issued by the Seller’s Bank Annex 10    Specimen of Banking Documents issued by the Buyer’s Bank Article 1 Definitions 1.1 "Acceptance" means the acceptance of the Contract Equipment by the Buyer if the result of the Performance Test shows that all guarantee figures specified in Annex No. 6 have been reached, or otherwise as stipulated in Article 9. 1.2 “Acceptance Certificate” means the certificate issued upon Acceptance  in accordance with Article 9. 1.3 "Acceptance Test" or “Performance Test” means the tests for examining the guarantee figures as specified in Annex No. 6 to the present Contract 1.4    “Annex” refers to Annexes Nos. 1 to 10 of this Contract. 1.5 “Buyer" means Shandong Shengli Steel Pipe Co., Ltd.;Zibo City, Shandong Province, P.R. China 1.6    “Buyer′s Bank” means first class Chinese bank such as Bank of China, Industrial and Commercial Bank of China, China Development Bank. However the bank chosen must be acceptable to the Seller. 1.7 “Certificate of Completion of Erection” means the certificate issued by the Seller and signed by both Parties after successful completion of the No-Load Tests as per Article 9.4. 1.8 “Certificate of Completion of Load Test” means the certificate issued by the Seller and signed by both Parties after the Load Tests as per Article 9.5 has been successfully completed. 1.9 “Contract Equipment" means those equipment, component parts, software, consumables, instruments, special material / tools and parts, which are supplied by the Seller  as per Annex No. 1 and 2 1.10 “Commissioning" means the period of preparation of the Contract Equipment and Local Equipment for the Load Test and the Performance Tests and shall start after successful completion of the No-load tests and shall end with Acceptance. 1.11 “Contract Plant” means the Tack/Final Welding SSAW Mill for high grade Petroleum and Natural Gas Line Pipe Mill as specified in Annexes No. 1 and 2. 1.12 “Engineering Services” shall mean the engineering services of Seller, being necessary for the preparation of the technical documentation related to transfer of know how. 1.13 “Erection" means the period of  assembly, connecting and placing the Contract Equipment to its position, at site and ends with the successful completion of the No-Load Test. 1.14 “Local Equipment” means to those equipment,  which are supplied by the Buyer. 1.15 “No-Load Tests" means test to be performed at the end of the Erection of the Contract Equipment and sections thereof to prove the successful erection. 1.16 “Load Tests" means the Function Tests to be executed during Commissioning, prior to  the Acceptance Test. 1.17 “Seller" means PWS GmbH, Dornierstr. 4, 88677 Markdorf, Germany 1.18    “Seller′s Bank means first class German bank to be nominated by Seller such as Deutsche Bank AG, LBBW (Landesbank Baden Württemberg), Commerzbank AG. 1.19    “Site“ means the place where the Contract Equipment will be erected at Zibo City. 1.20 “Supervision Services" means the service to be performed by the Seller's personnel for the technical supervision and instruction during Erection and Commissioning  at site. 1.21 Technical Documentation" means the technical documents, software, design documents and technical information to be provided by the Seller to the Buyer and by the Buyer to the Seller as agreed and stipulated in Annex No. 4. 1.22 “Time Sheet” refers to the record of actual working hour(s) at site for the Technical Personnel of the Seller and signed by the Site Representatives of both parties according to Annex No. 5 . Article 2 Object of the Contract 2.1    The Buyer wishes to install       and for this the Buyer  agrees to buy from the Seller and the Seller agrees to sell to the Buyer, the Contract Equipment, Engineering Services for the preparation of Technical Documentation as well as Technical Services for the Contract Plant as specified in this Contract and the technical Annexes thereto. The Contract Equipment to be supplied by Seller is specified in Annexures No. 1 and 2. 2.2    The contents of Technical Documentation to be supplied by the Seller to the Buyer is specified in Annex No. 4. 2.3    The guarantee figures for the Contract Equipment and the method and procedure of the Performance Tests are specified in Annex No. 6, whereas the standards for design, manufacture and inspection are specified in Annex No. 8 2.4    The time schedule for the execution of the Contract after the date of effectiveness is given in Annex No. 3. 2.5    The Seller shall dispatch his experienced, healthy and competent technical personnel to the site to give technical instructions for the Erection and Commissioning. Extent of Technical Services and terms and conditions are shown in Annex No. 5. 2.6    The Buyer shall provide at his own cost all necessary work, material and performance not included in Seller's scope of supply, as well as the Local Equipment, without defects and in accordance with the requirements of the time schedule, as per Annex. No. 3. Quality and quantity of such Buyer's provision shall be according to the technical requirements as contained in this Contract and its Annexures. 2.7    Spare parts required for the commissioning and later operation of the Contract Equipment are not included in the Contract Price and will be ordered after submission of the Spare Parts List by a separate Contract. 2.8    Annexures 1 to … of the present Contract are integral parts of the present Contract shall have the same force as the Contract itself, however in case of discrepancies between the present document and its Annexures, the provisions of the present document shall prevail. Article 3 Price 3.1    The Total Contract Price of the Contract Equipment, Engineering Services and Technical Services to be provided by the Seller as stipulated in the present Contract amounts to: EUR - (Say: only) The break down prices of the above mentioned Total Contract Price is as follows: 3.1.1    Price for the Contract Equipment as per Annex No. 1 and 2.. EUR -- (Say:       only) 3.1.2    Price for the Spare Parts excluded 3.1.3    Price for the Engineering Services related to Know-how as per Annex No. .4 EUR -- (Say:       EURO only) 3.1.4 Price of Technical Services as defined in Annex No.5 to the Contract for Seller’s Technical Personnel to be dispatched to the Site: EUR - (Say: EURO.only) 3.2    The Prices mentioned under Chapters 3.1. are firm prices based on the delivery CIF Qingdao Seaport (according to INCOTERMS 2000). 3.3    The Price mentioned under Chapter 3.1.3 is a firm price based on the delivery to DDU Buyer′s Site, P.R. China (according to INCOTERMS 2000). Article 4 Terms of Payment 4.1    All payments under Chapter 4, except the down payment which will be made by T/T-remittance, have to be made by the Buyer to the Seller under the present Contract under letters of credit. Payment by the Buyer shall be made through the Buyer’s Bank to Seller’s Bank, to the account indicated by Seller. Payment by Seller if any, shall be made through the Seller’s Bank, to the Buyer′s Bank, to the account indicated by the Buyer. All the negotiation documents shall be presented by the Seller through Seller′s Bank to the Buyer′s Bank. All documents to be presented by the Seller shall include the Contract No. as well as the L/C Number. 4.2    The Total Contract Price specified in Article 3.1 of the Contract shall be paid by Buyer to the Seller according to following conditions and proportions. 4.2.1 10%    (ten percent) of the Prices for Contract Equipment as per Articles 3.1.1 viz. EUR  (say: EURO     only) shall be paid by T/T as down payment by the Buyer to the Seller within 30 (thirty) days after signing of the Contract provided the Buyer has received the following documents from the Seller: A. 1 (one) copy of the effective export license issued by the relevant authorities of the Seller's country or Seller’s statement certifying that no export license is required. B. Irrevocable down payment guarantee issued by the Seller′s Bank in favor of the Buyer for the amount of the down payment in 1 (one) original and 1 (one) copy. For specimen see Annex No. …. C. Signed Pro-Forma invoice covering the price as per Articles 3.1.1 viz. EUR -- (Say: EURO only) in 3 (three) Originals and 3 (three) copies. D. Signed Commercial invoice for the amount of the down payment in 3 (three) Originals and 3 (three) copies. 4.2.2     90%     (ninety percent) of the Price for Contract Equipment as per Articles 3.1.1 viz. EUR   -- (Say: EURO only) shall be paid by the Buyer to the Seller in the following manner: The Buyer shall submit to the Seller an Irrevocable Letter of Credit issued by a prime Chinese Bank acceptable to Seller in conformance with the Contract stipulations for the payments as per Articles 4.2.2.1 and 4.2.2.2 at the latest 30 (thirty) days after effectiveness of the Contract. The Irrevocable Letter of Credit shall be opened for an amount of 90% (ninety percent) of the Price for Contract Equipment as per Article 3.1.1. The Irrevocable Letter of Credit shall allow partial shipments and shall be available by payment at sight against presentation of the stipulated documents at the counters of Seller’s bank. The Letter of Credit shall be subject to Uniform Customs and Practice for the Documentary Credits (2006 Revision) of the International Chamber of Commerce (ICC Publication No. 600). The Irrevocable Letter of Credit shall be valid until 90 (ninety) days after the originally scheduled contractual date for the Acceptance Test. In case execution of the Contract should be not completed in time, the validity of the Irrevocable Letter of Credit shall be extended accordingly upon Seller’s request. Banking and Handling charges of the Irrevocable Letter of Credit outside China shall be born by the Seller while the Buyer will bear the charges for opening of the Irrevocable Letter of Credit. 4.2.2.1 20%     (twenty percent) of the Prices for Contract Equipment as per Articles 3.1.1 viz. EUR …………………. (say: EURO ………………….only) shall be drawn from the Letter of Credit 6 (six) weeks after Effectiveness of the Contract against presentation of the following documents to Seller’s Bank: A.    Signed commercial invoice in 3 (three) originals and 3 (three) copies. 4.2.2.2    30%     (thirty percent) of the Prices for Contract Equipment as per Articles 3.1.1 viz. EUR …………………. (say: EURO ………………….only) shall be drawn from the Letter of Credit 5 (five) months after Effectiveness of the Contract against presentation of the following documents to Seller’s Bank: A.    Signed commercial invoice in 3 (three) originals and 3 (three) copies. 4.2.2.3    30%     (thirty percent) of the Prices for Contract Equipment as per Articles 3.1.1 viz. EUR …………………. (say: EURO ………………….only) shall be drawn from the Letter of Credit pro rata shipment against presentation of the following documents to Seller’s Bank: A.    Full set (3/3) of clean on board bill of lading made out to order and blank endorsed, notifying the Buyer and marked “Freight Prepaid” 3 (three) originals of airway bill, marked “Freight Prepaid” B.    Signed commercial invoice in 3 (three) originals and 3 (three) copies. C. Certificate of origin issued by the relevant authority of the Seller (Chamber of Commerce) in 1 (one) original and 1 (one) copy. D. Detailed packing list in 3 (three) originals and 3 (three) copies. E. Quality certificate issued by the Seller in 3 (three) originals and 3 (three) copies. F.    Insurance Certificate for 110pct of the value of the delivered goods, showing claims payable to the Buyer, covering all risks and war risk during transportation. G.    1 (one) original of Seller's certificate confirming that goods have been packed in wooden cases that have been treated as called for by Chinese Government, if wooden cases have not been used as packaging, 1 (one) original of the non-wooden package certificate issued by the Seller should be presented 4.2.2.4    5%     (five percent) of the Prices for Contract Equipment and Spare Parts  as per Articles 3.1.1 and 3.1.2 viz. EUR …………………. (say: EURO …………………. only) shall be drawn from the Letter of Credit against presentation of the following documents to Seller’s Bank: A. Signed commercial invoice in the above mentioned amount in 3 (three) Originals and 3 (three) copies. B. 1 (one) Original and 1 (one) copy of the Completion of Erection Certificate signed by the representatives of the Buyer and the Seller all as per the stipulations of Articles 8.6, 8.7.3 and 9.10. 4.2.2.5    5%     (five percent) of the Prices for Contract Equipment as per Articles 3.1.1 viz. EUR …………………. (say: EURO …………………. only) shall be drawn from the Letter of Credit against presentation of the following documents to Seller’s Bank: A. Signed commercial invoice in the above mentioned amount in 3 (three) Originals and 3 (three) copies. B. 1 (one) Original and 1 (one) copy of the Acceptance Certificate or Deemed Acceptance Certificate signed by the representatives of the Buyer and the Seller all as per the stipulations of Articles 8.6, 8.7.3 and 9.10. C.    Irrevocable Warranty Guarantee issued by the Seller’s Bank in favor of the Buyer in the amount of 5 % (five percent) of the total Contract Price as per Article 3.1. in 1 (one) original and 1 (one) copy. For specimen see Annex No. …. 4.2.3    100% (one hundred percent) of the Prices for the Engineering Services and Technical Services as per Articles 3.1.3 and 3.1.4 viz. EUR 1.960.000,-- (say: EURO one million nine hundred sixty thousand only) shall be paid by the Buyer to the Seller in the following manner: The Buyer shall submit to the Seller an Irrevocable Letter of Credit issued by a prime Chinese Bank acceptable to Seller in conformance with the Contract stipulation for the payments as per Articles 4.2.3.1 and 4.2.3.2 at the latest 6 (six) months after effectiveness of the Contract. The Irrevocable Letter of Credit shall be opened for an amount of 100% (one hundred percent) of the Prices as per Articles 3.1.3 and 3.1.4. The Irrevocable Letter of Credit shall allow partial shipments and/or drawings and shall be available by payment at sight against presentation of the stipulated documents at the counters of Seller’s bank. The Letter of Credit shall be subject to Uniform Customs and Practice for the Documentary Credits (2006 Revision) of the International Chamber of Commerce (ICC Publication No. 600). The Irrevocable Letter of Credit shall be valid until 90 (ninety) days after the originally scheduled contractual date of the date for the Acceptance Test. In case execution of the Contract should be not completed in time, the validity of the Irrevocable Letter of Credit shall be extended accordingly upon Seller’s request. Banking and Handling charges of the Irrevocable Letter of Credit outside China shall be born by the Seller while the Buyer will bear the charges for opening of the Irrevocable Letter of Credit. 4.2.3.1    100%    (one hundred percent) of the Price for Engineering Services as per Article 3.1.3 viz. EUR 520.000,-- (say: EURO five hundred twenty thousand only) shall be drawn from the Letter of Credit against presentation of the following documents to Seller’s Bank: A. Signed commercial invoice in 3 (three) originals and 3 (three) copies covering 100% (one hundred percent) of Price for Engineering Services as per Article 3.1.3 B. 3 (three) copies of the Airway Bill of delivered technical documentation for the Engineering Services 3 (three) copies of Courier Service Receipt of delivered technical documentation for the Engineering Services. C. 1 (one) copy of Seller’s dispatch note containing the delivery of the preliminary Operation Manual. Remark:    The original of the Tax Paid Certificate for the Technical Services, or the original of the Tax Exemption Certificate will be provided to the Buyer before the payment is due. 4.2.3.2    100%    (one hundred percent) of the Price for Technical Service as per Article 3.1.4 viz. EUR -- (say: EURO only) shall be drawn from the Letter of Credit in 2 (two) installments, the first one at the end of the erection for services rendered by the Seller during the period from start of erection until issuance of the Completion of Erection-Certificate and the second one after Acceptance or Deemed Acceptance for services rendered by the Seller during the period from issuance of the “Completion of Erection”-Certificate until Acceptance or Deemed Acceptance against presentation of the following documents to Seller’s Bank: A. Signed commercial invoice in 3 (three) originals and 3 (three) copies, covering the amount equivalent to l man days worked in the period from start of erection until issuance of the Completion of Erection-Certificate, multiplied EUR 1.000,-- (say: one thousand only) / working day respectively l man days worked in the period from issuance of the “Completion of Erection”-Certificate until Acceptance or Deemed Acceptance, multiplied multiplied EUR 1.000,-- (say: one thousand only)/ working day B.    Time Sheet(s) signed by the General Site Representatives of both parties in 1 (one) original and 2 (two) copies. C. For the first installment, 1 (one) copy of the Certificate of Completion of Erection signed by the representatives of the Buyer and the Seller all as per the stipulations of Article 8.4 shall be presented together with the documents mentioned in A and B. D. For the second instalment, 1 (one) copy of the Acceptance Certificate or Deemed Acceptance Certificate signed by the representatives of the Buyer and the Seller all as per the stipulations of Article ……. shall be presented together with the documents mentioned in A and B. Remark:    The original of the Tax Paid Certificate for the Technical Services, or the original of the Tax Exemption Certificate will be provided to the Buyer before the payment is due. 4.3 In case the Seller is liable for paying to the Buyer any liquidated damages and/or compensation in accordance with the stipulations of the present Contract, such payments shall be made through the Seller’s Bank to the Buyer’s bank account within 30 (thirty) days after receiving Buyer’s written notice. 4.4     The banking charges of both parties incurred in P.R. China for the execution of the Contract shall be borne by the Buyer and those incurred outside P.R. China shall be borne by the Seller. 4.5     Payments shall be deemed to have been effected when and as far as the amounts have been credited fully without restrictions to the Seller’s account. 4.6    Should the Buyer be in default with the opening of the Letters of Credit as per the stipulations mentioned in this Article 4, the Seller shall, within 5 (five) working days after the due date of the opening date of the Letters of Credit, notify the Buyer of the non-opening of the Letters of Credit. Should the Buyer not effect the opening of the Letters of Credit within 10 (ten) working days after receipt of Seller’s notification, the Seller shall be entitled to interrupt the performance of his contractual obligations until such time as the Seller has received in full extent the Letters of Credit. In case of interruption the contractual periods and dates for the performance of Seller′s obligations shall be extended by a proven period of time, at least, equivalent to the period of the interruption and the Buyer shall compensate the Seller for evidenced costs, if any, which will be testified by a public accountant (“Wirtschaftsprüfer”) selected by the Seller. Should the Buyer be in default in opening of Letters of Credit by more than 6 (six) months, the Seller shall be entitled to terminate the Contract. Should the Seller′s costs exceed the payments received from the Buyer, the Buyer shall compensate the Seller according to stipulations as per Article 14. Article 5 Delivery and Terms of Delivery 5.1 The Seller shall complete the FOB delivery of Equipment/Goods within 10.5 (ten and half) months from the date of coming into force of the Contract as per Article 13.1 of the Contract. The delivery term under the present Contract shall be CIF Qingdao Seaport, P.R. China according to INCOTERMS 2000. Transshipments are not allowed. The Seller shall good charter vessel(s) from shipping company(s) with good reputation and vessel(s) shall be of any flag or nationality acceptable to the governments of the two Parties’ countries. The Seller shall deliver the Technical Documentation according to Annex No. 4 within the time as per Annex No. 4 by courier service or airfreight directly to the Buyer. The date of Bill of Lading or the date of Airway Bill of Lading or the date of Courier Receipt shall be the actual delivery date of delivery of the equipment and/or technical documentation. 5.2 Within 3 (three) working days after each shipment is effected the Seller shall inform the Buyer by fax and e-Mail of the Contract number, Number of Bill of lading(s) and its issuing date(s), sailing date(s), name(s) of the carrying vessel, port of destination, estimated time of arrival at the port of destination, name of the Goods, weight, volume and quantity, invoice value. 5.3 The Seller shall before each delivery of Technical Documentation notify the Buyer by fax and e-mail. A. The Contract number B. The name of documentation C. The detailed list of documentation 5.4 The air-cargo of goods under the present Contract shall be CIP delivered to Beijing airport, P.R. China. The Technical documentation under the present Contract shall be delivered DDU Buyer′s works by Courier Service. Should any of the delivered Documentation or airlifted Goods be found missing or in shortage due to the Seller's reason, the Buyer shall advise the Seller not later than 1 (one) week after the Buyer′s receipt of the Technical Documentation concerned and the Seller shall be liable for supplementary airmail/airfreight of the lost free of charge to the Buyer within 10 (ten) days after receiving the advice from the Buyer. Article 6 Packing and Marking 6.1    All the Goods shall be packed in strong wooden cases or other means suitable for Long Distance Ocean and inland transportation or airfreight, numerous handlings, loadings and un-loadings. Protective measures shall be taken by the Seller to prevent damage from moisture, rain, rust and meet with requirements of anti-corrosion, shock and deformation in accordance with the characteristics of the Goods. In case of the wooden case packaging, the bark shall have been removed and the Seller is obliged to arrange all necessary measures to guaranty that heat treatment or fumigation treatment has been carried out. According to the latest IPPC rules a respective marking have to be made together with the shipping marks on each wooden case packing as follows: In case of the no-wooden case packaging, the Seller is obliged to submit to the Buyer a written statement proving that non-wooden materials were used. A statement of the Seller, that wooden boxes have been treated according to the measures approved by State General Administration of Quality Supervision, Inspection and Quarantine of the PRC (AQSIQ) and been labeled with IPPC marks shall be submitted by the Seller to the Buyer immediately after the goods have been delivered on board of the vessel (or flight). If the Seller fails to present or presents the said statement in delay, the Seller shall compensate all the costs, expenses and direct losses of the Buyer thus incurred. In case the local phytosanitary branch of AQSIQ finds through quarantine that the wood packaging does not carry with the required special mark, the mark does not satisfy the requirements or live pests are intercepted, the Seller shall pay for the expenses of treatments against pests, destroy the packing or transport back at the port of unloading. 6.2    The loose accessories in package or bundle shall be labelled by the Seller, indicating contract-no., name of main machine, name of accessories and its position number and accessory no. on assembling drawings. 6.1 The Seller shall conspicuously mark the following on the four adjacent sides of each package of the Goods with indelible paint printed words in English: A. Contract No. : B.      Shipping mark: C.    Destination : D.     Consignee : E.    Name of equipment and Item No. : F.     Case No. : G.     Gross/net        weight        (kg) : H.    Measurement (length x width x height in cm) : Spare parts and tools shall be marked with the words "Spare Parts" or "Tools" besides the above particulars. Should the Goods weigh 2 or more than 2 metric tons, weight, gravity and hoisting position shall be marked in English and with international trade transportation practice marks illustrative marks on the four adjacent sides of each case so as to facilitate loading, unloading and handling. In accordance with the characteristics and different requirements in loading, unloading and shipping different goods. The package shall be conspicuously marked with "Handle with care", "Right side up', "Keep dry", etc. in English and with appropriate international trade practice marks and illustrative marks. 6.4    The following documents shall be enclosed in each shipment of the Goods: A.    Detailed packing list in 2 copies; B. Quality certificate in 2 copies; C.    Seller’s Certificate that wooden packing is treated according to ISPM No.15. 6.5    The Technical Documentation provided by the Seller shall be properly packed to with stand numerous handling, long distance transportation and to protect damages from moisture and rain during transport. The surface of each package shall be marked with the following printed words: A.    Contract No. B. Consignee C.    Destination D.    Shipping mark E.    Gross weight (kg) F. Case No. Two copies of detailed list marking series no. code, names and pages of documentation shall be enclosed in each parcel of the Technical Documentation. 6.6    Should the Goods be damaged or lost due to the Seller's improper packing and / or inadequate protective measures until the time of arrival at site, the Seller shall be responsible for the repair and/or replacement according to the stipulation of Clause 8.8 of the present Contract. 6.7    Buyer shall be responsible for proper handling during domestic transport and storage of the Goods. Article 7 Layout and Integration Design Liaison 7.1    Both parties shall carry out their responsible portion of the design of the layout and integration of the Contract Equipment, and the Local Equipment which shall be supplied by the Buyer, according to this Article and Annex 4 – Technical Documentation and Annex 2.1 – Buyer’s Supply. 7.2 The scope of design undertaken by the Seller shall include the following: a. Layout and arrangement of the Contract Equipment within the production floor, b. Specifications for the utilities and consumables of the Contract Equipment, c. Connection and supply points, and channels for the utilities and consumables of the Contract Equipment, d. Specification of electric power feeders with back-up fuses for Seller’s switchgear cabinets, power sources and electric equipment, e. Operator and welding platforms, over the Contract Equipment, f. Arrangement of the local equipment between and within the Contract Equipment, g. The technical specification of the local equipment, which is required in order that the Contract Equipment be able to achieve its respective performance and functions, The requirements, contents, number of copies and delivery dates of the Technical Documentation are stipulated in Annex 4 – Technical Documentation to the present Contract. 7.3    The scope of design undertaken by the Buyer is specified in Annex 4 – Technical Documentation. The contents of Technical Documentation to be supplied by the Buyer to the Seller are specified in Annex 4 – Technical Documentation to the present Contract. The Seller shall take it as the basis for the design of the Contract Equipment, however the Seller’s design shall be taken as final, in case the Buyer’s design cannot be accommodated without material impact to the Seller’s contractual obligations. 7.4    The design period shall be the period beginning from the start of the 2nd month until the end of the 7th month, after the contract comes into force.  7.5    A kick-off and 1st design liaison meeting will be held in the Seller’s premises in Germany, no later than 2 months after the contract comes into force.  The exact date shall be proposed by the Seller no less than 5 weeks beforehand, and both parties must confirm in writing. 7.6    A 2nd design liaison meeting will be held in the Buyer’s premises in China, no later than 7 months after the contract comes into force. The exact date shall be proposed by the Seller no less than 5 weeks beforehand, and both parties must confirm in writing. 7.7    Within the design period, the Buyer has the right to send his technical personnel to the Seller's relevant designing department to carry out design co-ordination.  The Seller shall assist to arrange entry visas and sojourn formalities and provide free of charge relevant technical documentation of design and facilities for work. 7.8    For visit requests under Article 7.5, the Buyer shall notify the Seller no less than 2 calendar weeks in advance of the intended visit date.  The Seller shall do his best to accommodate the request for the visit, but has the right to propose an alternate period if the visit dates or period requested by the Buyer will interfere with the Seller’s schedule and has the potential to cause delays to the Project Execution Schedule and/or the Seller’s contractual obligations. 7.9    At the end of the relevant design co-ordination meetings a protocol shall be established and signed by both parties. Such protocol shall be the basis for the further design work of Buyer and/or Seller. Article 8 Standards and Inspection 8.1    The Buyer agrees that Contract Equipment will be designed, manufactured and inspected in accordance with the relevant standards and norms as specified in Annex No. 8 prevailing and valid in Seller's country and/or Seller’s works at time of signing the Contract. 8.2    All Contract Equipment supplied by the Seller shall be inspected and tested by the Seller as per Seller's usual procedures. Respective quality certificates as well as inspection and test records issued by the manufacturers or the Seller shall be submitted to the Buyer. All expenses of the Seller incurred due to Seller's inspection and test of the Contract Equipment shall be for the Seller's account. 8.3    The Buyer shall be entitled, at his own cost, to send his inspectors to the Seller's country to join the inspection and testing of the manufacturing and quality of the main Contract Equipment in the manufacturer's workshop together with the Seller's inspectors The Seller shall notify the Buyer of the date of the inspection latest 6 (six) weeks prior to the assembly and inspection of the Contract Equipment. The Buyer shall within 1 (one) week after receiving the Seller's notice, inform the Seller of the list of his appointed inspectors so as to enable the Seller to render assistance in obtaining their entry visas. 8.4    The Buyer's inspectors shall have the right to put forward their opinions in case they find that the Contract Equipment has defects and / or does not comply with the specifications of the present Contract and the Seller shall give full consideration to these opinions and if justified, take necessary measures to remove the defects of the Contract Equipment at his own expense. After the elimination of the defect the Seller shall conduct test and inspection again. The expenses of Seller thus incurred shall be for the Seller's account. In case of any discrepancy between Buyer's and Seller's opinion the Seller shall decide according to his own valuation and under his full responsibility. 8.5    The quality inspection and test done by the Buyer's inspectors in the Seller's country and / or manufacturers shall not substitute the open-package inspection and test of the Contract Equipment after its arrival on site, and shall not release the Seller from the obligation of warranty as specified in Article 10. The Buyer's inspectors shall not sign any certificate. 8.6    The Seller shall provide the Buyer's inspectors free of charge with working facilities such as necessary Technical Documentation, drawings, testing tools and apparatus, etc. 8.7    If the Buyer fails to send personnel to join in the said inspection work despite being informed by Seller about such inspection in due time, the Seller will conduct the inspection independently. 8.8    The open-package inspection and test for all Contract Equipment supplied by the Seller shall be performed on site. The Seller shall be entitled to send his representatives at his own expense to the site to join in the inspection. The Buyer shall inform the Seller of the approx. date of inspection 1 (one) month before the date of open-package inspection. The Buyer shall inform Seller about the final date of inspection latest 1(one) week before expected arrival of the equipment at Site and shall also render assistance to the Seller's inspectors in their inspection work. 8.8.1    Should any shortage, defect or damage be found in the delivered Contract Equipment during open-package inspection by the representatives of both parties, a detailed record shall be made and signed by them. This record shall be taken as an effective evidence for the Buyer to claim replacement, repair or supplement from the Seller in case the Seller is responsible. 8.8.2 If not due to the Buyer's reason, the Seller's inspectors cannot join the open-package inspection, the Buyer shall have the right to open package and conduct the inspection together with the ENTRY-EXIT INSPECTION AND QUARANTINE BUREAU of THE PEOPLE’S REPUBLIC OF CHINA (CIQ). Should any shortage, defect or damage be found, a certificate shall be issued by CIQ as an effective evidence for the Buyer to claim replacement, repair or supplement from the Seller in case the Seller is responsible. In such case the Seller shall then make the replacement and / or repair and / or supplement the missing parts free of charge after receiving the certificate of claim from the Buyer and shall be responsible for the risk and freight arising thereof, to the site. 8.8.3    The Seller may ask for renegotiation within 2 (two) weeks after receiving the Buyer's certificate of claim and both parties shall negotiate again, if there is any different opinion. The claim would be deemed as established after the said period, if Seller has not asked for renegotiation within said period.  The Seller shall replace and / or supplement the Goods in technically shortest possible time after having received the Buyer's justified claim. 8.8.4    If any damage to Contract Equipment is found in or after open-package inspection owing to the reason of the Buyer, the Seller shall supplement, repair or replace it at the Buyer's expense as soon as receiving the Buyer's notification. 8.8.5 The open package inspection will not release the Seller from his responsibility under Article 9 and Article 10. Article 9 Erection, Commissioning and Acceptance Test 9.1 The Erection and Commissioning of the Contract Equipment shall be carried out under the organization for which the Buyer is responsible and under the technical supervision for which the Seller is responsible. During the period of Erection and Commissioning the Buyer shall make available competent erectors, operators and maintenance personnel. The scope of obligation and responsibility of the Seller's technical personnel is detailed in the Contract and Annex No. 5. 9.2 The Erection and Commissioning will be carried out in accordance with the stipulations of Annex No. 5. The Erection of the Contract Equipment shall start after the open package inspection of the first lot at Site. The Buyer shall notify the Seller of the Erection schedule 30 (thirty) days before expected start of the Erection. 9.3 Latest 30 (thirty) days before the beginning of the Erection, each party shall nominate, 1 (one) Site Representative fully authorized to deal with all matters in connection with the Contract during the period from the Erection up to the Acceptance. The representatives of both parties, who should fully co-operate, shall make detailed arrangements through friendly consultation. 9.4 During the Erection the Seller's technical personnel shall give technical instructions of method and requirement to the Erection work and take part in the inspection and no load test of the erection quality of all the Equipment concerned. The Erection of the Contract Equipment shall be conducted under the supervision of the Seller’s Technical Personnel in conformity with the relevant standards and stipulations of the Contract. The General Site Representatives shall sign the “Certificate of Completion of Erection” within 3 (three) days after successful completion of No Load Test. 9.5 After the completion of the Erection the Commissioning shall start. The Site Representatives of both parties shall jointly consult and fix the date of the Load Test. The Load Test shall be carried out in accordance with the stipulations in Annex No. 6. The General Site Representatives shall sign the “Certificate of Completion of Load Test” within 3 (three) days after successful completion of the Load Test. 9.6    During the period of Commissioning until Acceptance of the Contract Equipment, the Seller can use the Buyer's stored spare parts. Should the Buyer's stored spare parts be used by the Seller due to the Seller's responsibility, the Seller shall replenish the stores with the same in time on site. 9.7    The Performance Test shall be carried out in accordance with the stipulations of Annex No. 6 to the present Contract under the instructions of the Seller's technical personnel. The result of each Performance Test shall be recorded and the report shall be confirmed and signed by the representatives of both parties within 3 (three) days after the completion of each Performance Test . 9.8    The contract price includes the delegation of personel based on the terms and conditions as specified in Annex No. 5 to the present Contract. In case overtime becomes necessary, such overtime shall be paid extra as follows: The normal working time (for the dayshift) is 10 hours including 1.5 hours of break per day for weekdays from Monday to Saturday between the hours of 08.00 am to 6.00 pm in the dayshift. For the personnel working during the second shift (nightshift) as per the Erection Time Schedule as per Annex 3 the working time will start at 5:00 PM. Any work put before or after these hours and for more than 8 hours shall be charged as overtime equal to 1.25 times the standard rate. Any work put on Sunday or holidays shall be charged as overtime equal to 1.50 times the standard rate. Supervisors shall observe the weekly off and holidays as observed by Buyer. 9.9    If all the guarantee figures specified in Annex No. 6 to the present Contract are reached, the Acceptance Certificate shall be issued by the Buyer within 3 (three) days in 4 (four) copies. 2 (two) copies for each party. This shall be deemed as acceptance of all obligations of the Seller under this Contract by the Buyer, except Seller’s obligations during warranty period. 9.10    During the Performance Test period, if any or several of the guarantee figures as specified in Annex No. 6 cannot be reached, both parties shall jointly make investigations so as to find out the reason for clarifying the responsibility and to settle it as follows: 9.10.1 If any part of the Performance Test fails due to the Seller's reason, the Seller shall have to make necessary repair, replacement and / or modifications to the Contract Equipment as quick as possible and also bear the relevant cost of its personnel incurred from the delays. The repair, replacement and/or modifications including repetitions of the Performance Test shall have priority over production. After repair, replacement or making modifications, the respective guarantee figure shall be  tested again as soon as possible, however not later than 3 working days, in accordance with Annex No. 6 to the present Contract. The Buyer shall give assistance. If the above mentioned repair, replacement and / or modifications should be carried out on site by Buyer, all direct cost involved (e.g. working hour cost, material cost, etc.) shall be borne by the Seller according to the final calculation made by the representatives authorised by both parties in accordance with the records of the repair, replacement and / or modifications before the Acceptance of the Contract Equipment. The above records shall be counter signed by the representatives of both parties each time after each repair, replacement and / or modifications. Should it be necessary to send any Contract Equipment back outside China due to the Seller's reason for repairing or replacement, all the cost for transportation, repair or replacement shall be borne by the Seller. The Contract Equipment repaired or replaced shall be redelivered by the Seller to the Site.free of charge. However, if after two repetitions of the Performance Tests the guarantee figures as specified in Annex No. 6 are still not reached due to the Seller's reasons, then clause 10.9 of the present Contract shall be applied. 9.10.2    If the non-fulfilment of the guarantee figures is not due to the Seller's reason, the Buyer shall take all necessary measures to remedy such reason. All cost incurred for remedy of such reason shall be borne by the Buyer. Additional man/weeks of the Seller's personnel, if necessary shall be discussed and fixed by both parties. After improvement is made, a Performance Test shall be carried out again as soon as possible in accordance with Annex No. 6 to the present Contract. 9.11 If, due to Buyer's reason, no Performance Test is conducted for the       Contract Equipment and/or the contractual guarantee figures could not be reached for same reason within 19 (nineteen) months after the coming into effect of the present Contract, or the Contract Equipment is under commercial operation by that time, the Contract Equipment shall be accepted by the Buyer at the latest date so defined and the Acceptance Certificate shall be signed by both parties. However, the Seller shall assist the Buyer in taking all necessary measures to make the Contract Equipment reach the normal production figures. All costs thus incurred shall be for the Buyer's account according to an agreement between the parties at that time. If the delivery of the Contract Equipment or Erection or Commissioning is delayed due to the Seller's reason, the above latest date of Acceptance shall be extended accordingly. 9.12    The Acceptance of the Contract Equipment as specified in Clause 9.9, 9.11, and 10.9 of the present Contract shall not set free the Seller from his responsibility for the Contract Equipment during the warranty period. 9.13    If Buyer does not sign an Acceptance Certificate as per 9.9, 9.11 or 10.9 within 10 days after the respective due date,  Seller shall issue a statement of deemed acceptance instead. 9.14 In case that, due to Buyer’s responsibility or on Buyer’s request, the total man-weeks for Supervision services stipulated in Annex No. 3 Erection Time Schedule has to be exceeded, the Seller will execute such additional services on basis of a working daily rate of € 1.270,--     for the Welding Expert / Plasma System Specialist € 1.070,--    for Site Manager / Software Expert / Hydraulic Specialist €    930,--    for Mechanical / Electrical Manager which have to be additionally to the Price  for Technical Services as per Article 3.1.4 by T/T-remittance within 30 (thirty) days after receipt of the respective invoice. Article 10 Guarantee, Claim and Liquidated Damages 10.1    The Seller guarantees that the technical level of manufacture of the Contract Equipment shall be the most up-to-date of the Seller at the time of signing of the Contract and the Contract Equipment supplied by the Seller is of the best quality, complete according to Seller’s contractual scope of supply, completely new and reliable and the type selection complies with the requirements of process technology as well as normal and safe operation. This guarantee shall be fulfilled with Acceptance of the Contract Equipment. 10.2    The Seller guarantees that the Technical Documentation and drawings supplied by the Seller shall be complete, legible and correct in order to meet the requirements of design, erection, operation and maintenance of the Contract Equipment. This guarantee shall be fulfilled with Acceptance of the Contract Equipment. Incomplete, illegible or faulty parts of the Technical Documentation shall be replaced and/or supplemented by Seller without delay. The cost for such replacement and/or supplement delivery shall be borne by Seller if he is responsible. 10.3    In case within the period of Erection and Commissioning any defect of Contract Equipment is found or any damage to the Contract Equipment and/or Local Equipment has occurred owing to mistake of instruction of the Seller's technical personnel and / or faulty Technical Documentation supplied by the Seller for the Erection and Commissioning, the Seller, if responsible, shall immediately repair  and/or make replacement free of charge and shall be responsible for risk and freight arising thereof up to the erection site, and bear the resulting cost for making good such defect or damage up to 30% (thirty percent) of the total price for the Technical Services as per Article 3.1.4. The Seller may ask for renegotiation as per Clause 10.6 if there is any different opinion. 10.4    Should the Seller’s design for equipment being supplied by Buyer under this Contract be found erroneous or being omitted in contents, the Seller shall correct and/or supplement the erroneous or missing design documents. Seller shall be liable in this context for any direct cost incurred to Buyer for the elimination of defects resulting therefrom up to a maximum amount of 30 % (thirty percent) of the price as per Article 3.1.3. 10.5    The warranty period of Contract Equipment shall be 12 months calculated from the date of successful completion of Load Test and shall cover any defects arising due to faulty workmanship or faulty material. The warranty period shall however not be longer than 12 (twelve) months after Acceptance, if the successful completion of Load Test of the Contract Equipment is delayed not due to the Seller's responsibility. This warranty period will be extended for the Equipment listed in Annex 2, Item 6.31 by an addional period of 12 months. Consequently the latest date of expiration of the warranty period for these items will be 24 (twenty four) months after Acceptance.