Exhibit 10.19

HENAN SHUNCHENG GROUP COAL COKE CO., LTD
EPC Contract
of 160t/h CDQ Project

CONTRACT NO. : SC20090628              (PARTY A)
CONTRACT NO. : WZ0904                    (PARTY B)
Party A: Henan Shuncheng Group Coal Coke Co., Ltd.
Party B: Ji Gang Group International Engineering Company Limited

Signed in June 2009

 
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CATALOGUE

1.
Sub-Contracts and Appendixes
  3
     
2.
the Project
  3
     
3.
Responsibilities and Project Description
  3
     
4.
Scope of Work
  4
     
5.
Scope of Equipment Supply
  4
     
6.
Schedule of the Project
  4
     
7.
Contract Price
  4
     
8.
Description of Contract Price
  6
     
9.
Responsibilities and Obligations
  6
     
10.
Assessment and Test
  7
     
11.
Test on Completion
  7
     
12.
Liability for Breach of Contract
  7
     
13.
Settlement of Disputes
  7
     
14.
Force Majeure
  8
     
15.
Taking effects and Miscellaneous
  8

 
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Party A: Henan Shuncheng Group Coal Coke Co., Ltd.
Party B: Ji Gang Group International Engineering Company Limited

Henan Shuncheng Group Coal Coke Co., Ltd. (hereinafter referred to as “Party A”)
and Ji Gang Group International Engineering Company Limited (hereinafter
referred to as “Party B”) have reached a consensus on the the 160t/h CDQ Project
through friendly consultation to conclude the EPC contract in accordance with
relevant provisions of Contract Law of the People’s Republic of China.
 
Clause 1 Sub-Contracts and Appendixes
 
1.1
the EPC Contract

 
1.2
the EPC Contract consists of four Sub-Contracts, including:

 
1.2.1
Sub-Contract A: Project Design

1.2.2
Sub-Contract B: Equipment Supply

1.2.3
Sub-Contract C: Erection and Construction

1.2.4
Sub-Contract D: Technical Service

 
1.3
Technical Appendixes

The parties hereby confirm their clear and accurate understanding of the terms
and conditions of the Contract and its appendixes and will commit themselves to
the clauses as stipulated hereunder. All the documents mentioned hereinabove and
the appendixes attached hereto are hereby made an integral part of the Contract.
 
Clause 2 the Project
 
2.1 Project name: 160t/h CDQ Project of Henan Shuncheng Group Coal Coke Co.,
Ltd.
 
2.2 Project site: Tongye Town, Anyang County, Henan Province.
 
Clause 3 Responsibilities and Project Description
 
3.1 Equipments and Erection and Construction Work under the Contract:
CDQ system, initial dust separator, secondary dust separator, heat recovery
boiler, auxiliary equipments of boiler, charging facility of burning coke,
recovery equipments of coke powder, discharging facility of cooling coke,
speed-governing and control system of winding engine, electrical control system
and equipments, PLC control system (including control software), detecting
instrument, dust removal system (the dust separator and its fan and electric
motor shall make use of the exiting equipments), main control building, belt
conveyor of cooling coke, desalted water station, water circulation pump house,
power station and other equipments or construction work as specified in
Technical Appendix-Ⅰand Technical Appendix-Ⅲ.
 
 
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3.2 Fire-fighting: On account of the specificity of the application and approval
and inspection procedure for the fire-fighting system, Party B shall be
responsible for the design, supply and construction of the fire-fighting system
(involving fire-fighting equipments, Fire Alarm System and fire telephone line),
and shall assist Party A in the application and approval procedure in local
authorities. Party A shall take charge of fire water supply and fire
extinguishing material.
 
3.3 Party A shall take the responsibility to obtain the license for construction
planning and the license for construction related to the Project and bear the
cost thereof.
 
3.4 Party A shall take charge of the design and construction of the road
construction and drainage system of the rain water that does not fall into the
scope of the contractor.
 
3.5 As the contractor for the EPC Project, Party B shall be responsible for the
design, civil construction, supply of complete sets of equipment, supply of
material, installation and debugging of the equipments, technical service,
training of operating personnel and warranty service. The technical parameter
and the details relevant to project design, design and supply of complete sets
of equipment and erection and construction could be found in the four
Sub-Contracts and technical appendixes.
 
Clause 4 Scope of Work
 
4.1 Scope of Party B’ s work is specified in Technical Appendix-Ⅲ of the
Contract.
 
4.2 Scope of Party A’ s work is specified in Technical Appendix-Ⅲ of the
Contract..
 
Clause 5
 
Scope of Equipment Supply is specified in Technical Appendix-Ⅲof the Contract.
 
Clause 6 Schedule of the Project
 
6.1 The project shall be completed and start production in 14 months after the
signing of the Contract;
 
6.2 The schedule can be postponed after the negotiation by the parties in case
of the following circumstances in the process of the project.
6.2.1 Work suspension caused by Force Majeure;
6.2.2 Delay of the schedule that is ascribed to Party A.
 
Clause 7 Contract Price
 
Party B shall overall contract the project in the content specified and the
scope defined by the Contract. The Contract Price is RMB  156,000,000 ( ONE
HUNDRED AND FIFTY SIX MILLION YUAN), inclusive of the prices of Sub-Contract of
Project Design, Sub-Contract of Equipment Supply, Sub-Contract of Erection and
Construction and Sub-Contract of Technical Service. The Contract Price hereof is
also the price for general contracting which shall be priced once for ado, in
other words, free of any fluctuation of market price or shall not be affected by
the price-adjusting documents issued by relevant authorities.

 
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7.1 Contract Payment and Settlement
 
The total price of the Contract is 156,000,000, involving:
The Sub-Contract Price for Design: 8,000,000 Yuan;
The Sub-Contract Price for Equipment Supply: 85,000,000 Yuan;
The Sub-Contract Price for Erection and Construction: 57,000,000 Yuan; and
The Sub-Contract Price for Technical Service: 6,000,000 Yuan.
 
7.2 Payment Terms
 
7.2.1 Payment Terms
 
7.2.1.1 Party A shall pay RMB 7,800,000 to Party B as the advance payment
accounting for 5% of the Contract Price in 10 days after the Contract taking
effective;
 
7.2.1.2 Party A shall pay RMB 15,600,000 to Party B accounting for 10% of the
Contract Price as the first progress payment in 10 days after the kick-off of
the Construction;
 
7.2.1.3 Party A shall pay RMB 31,200,000 to Party B accounting for 20% of the
Contract Price as the second progress payment in 10 days after the signing of
the purchase contracts for nitrogen circulation fans, heat recovery boilers and
steam turbine generator sets;
 
7.2.1.4 Party A shall pay RMB 15,600,000 to Party B accounting for 10% of the
Contract Price as the third progress payment in three months after the signing
of the purchase contracts for nitrogen circulation fans, heat recovery boilers
and steam turbine generator sets;
7.2.1.5 Party A shall pay RMB 31,200,000 to Party B accounting for 20% of the
Contract Price as the fourth progress payment in 10 days after the arrival of
the nitrogen circulation fans, heat recovery boilers and steam turbine generator
sets at the construction site;
 
7.2.1.6 Party A shall pay RMB 15,600,000 to Party B accounting for 10% of the
Contract Price as the fifth progress payment in 10 days after the commissioning
of the project;
 
7.2.1.7 Party A shall pay RMB 23,400,000 to Party B accounting for 15% of the
Contract Price as the sixth progress payment in 10 days after the competition of
the project and start of production;
 
7.2.1.8 The remaining 10% of the Contract Price, viz. RMB 15,600,000, shall be
used as quality deposit which shall be paid in a lump sum in 14 days after the
one-year guarantee period (calculated from the date of completion) expires.
 
7.2.2 Payment: By bank draft (including acceptance draft) or T/T. In case of
bank draft, the payment by cash order shall not lower than 50% of each Contract
Payment whereas the payment by acceptance (honored within three months to six
months) shall not exceed 50% of each Contract Payment.

 
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Clause 8 Description of Contract Price
 
8.1 Contract Pricing
 
The Contract price is worked out in accordance with the content and scope
defined by the technical appendixes agreed by the parties and the relevant laws,
regulations, rules and standards in force. The Project quality shall be in
conformity with the current national technical standards and criteria. The
Contract Price includes the cost or expenses for the plant design, equipment
supply, technical service during the erection and construction and system
programming and debugging.
 
The Contract Price excludes expenses for use of land, expenses for geological
exploration, afforesting fees, expenses for supply of electricity, water and
road access as well as ground leveling, expenses for the demolishment and
rebuilding of the existing pipelines and buildings, expenses for piling and
dynamic compaction if any, expenses for dewatering and supporting measures if
any, expenses for non-returnable fillings in the equipment (for example
hydraulic oil) and expenses for access to power distribution system.
Party A shall provide the energy resources free of charge for the Project’s
commissioning.
 
Clause 9 Responsibilities and Obligations
 
9.1
Responsibilities and obligations of Party B

 
9.1.1
Party B shall provide Party A with the qualification certificates that are
necessary to the Project;

9.1.2
Party B shall ensure the Project to be completed on schedule with good quality;

9.1.3
Party B shall provide Party A with design technical materials and drawing as
specified in Technical Appendix-V attached hereto;

9.1.4
Other responsibilities and obligations that shall be assumed by Party B
according to the clauses of the four Sub-Contracts.

 
9.2
Responsibilities and Obligations of Party A

 
9.2.1
Party A shall in a timely manner provide the contractor with the materials
necessary to the Project as specified in Technical Appendix-Ⅳ attached hereto;

9.2.2
Party A shall be responsible for the site preparation work;

9.2.3
Party A shall ensure timely and full payment of the Project funds in accordance
with clauses hereof;

9.2.4
Other responsibilities and obligations that shall be assumed by Party A
according to the clauses of the four Sub-Contracts.

 
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Clause 10 Assessment and Test
 
The overall assessment criteria for the Project is Qualified and the details of
the criteria for the assessment and test of the quality of the design and
equipment and the criteria for the assessment and test of the Project quality
can be found in Technical
 
Appendix-Ⅵ and Technical Appendix-Ⅶ attached hereto.
 
Clause 11 Test on Completion
 
11.1 Party B shall assist Party A in Test on Completion when the Project is
ready for Test on Completion;
 
11.2 Warranty
More details about quality warranty of the Project are given in the
Sub-Contracts.
 
Clause 12 Liability for Breach of Contract
 
12.1 The Project shall be completed and start production on schedule with the
guaranteed performance parameters as provided in the Contract. Party B shall pay
delay damages to Party A in case of any delay attributable to Party B or the
Project fails to conform to the guaranteed performance parameters as provided in
the Technical Appendixes attached hereto. If the Party B suffers delay and/or
incurs cost as a result of delay for which Party A is responsible, Party B shall
be entitled to an extension of time for any such delay or payment of any such
cost in accordance with relevant regulations and standards. Liabilities other
than the liability hereof are specified in Sub-Contracts.
 
12.1.1 The delay damages shall be paid with the amount of 0.1‰ of Contract Price
for every day which shall elapse between the completion date stated in the
Contract and the date when the Project actually starts production;
 
12.1.2 Party B shall pay liquidated damages of 0.2% of the Sub-Contract Price
for Equipment Supply in case of any non-conformity of the guaranteed performance
parameter for the product and equipment, and shall be obligated to improve such
product or equipment to the guaranteed performance parameters as provided in the
Contract;
 
12.1.3 The total amount of liquidated damages due under this Contract shall not
exceed 2% of Sub-Contract Price for Equipment Supply.
 
Clause 13 Settlement of Disputes
 
13.1 Any disputes arising from or in connection with this Contract shall be
settled through friendly negotiation by the parties in a timely manner;
 
13.2 If negotiation fails, the parties agree to summit the disputes to the court
at the Project site.

 
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Clause 14 Force Majeure
 
14.1 In case either party is prevented from performing any of its obligations
under the Contract by Force Majeure, the party shall be entitled to an extension
of time for any such delay. The performance of the obligations shall be excused
for so long as such Force Majeure prevents it from performing them. Force
Majeure hereby means any objective circumstance which is
unforeseeable, unavoidable and insurmountable, such as war, fire, flood, typhoon
and earthquake.
 
14.2 If a party is prevented from performing any of its obligations under the
Contract by Force Majeure, then it shall give notice to the other Party of the
event or circumstances constituting the Force Majeure in writing such as
facsimile, and send by express mail or registered mail a certificate of the
event or circumstances issued by relevant authority to the other party within 14
days after the occurrence of such event or circumstances. An agreement on
further performance of the Contract shall be reached between the parties through
friendly negotiation with a reasonable time if the works in progress is
prevented for a continuous period of more than 120 days by reason of Force
Majeure.
 
Clause 15 Taking effects and Miscellaneous
 
15.1 The Contract shall be effective upon signing by the authorized
representatives designated by the parties and sealing by both parties. The
Contract shall be the guideline of the Sub-Contracts and the Technical
Appendixes attached hereto.
 
All appendixes stated in the Contract and the correspondences, fax, minutes of
meeting and minutes of talks signed by the authorized representatives of the
parties for the performance of the Contract shall have the same effect as the
Contract.
 
15.2 The Contract shall be in two originals, one for each party; in eight copies
and each party shall hold four copies.
 
15.3 Ji Gang Group International Engineering Company Limited is the EPC
Contractor under the Contract and shall be responsible to fulfill the Contract;
 
15.4 All revision, supplementary and amendment to the Contract shall be made in
writing and shall become effective upon signing and sealing by the parties as
one of the appendixes attached to the Contract;
 
15.5 All Sub-Contracts shall enter into force upon signing the Contract if the
clauses of the Technical Appendixes and the terms and conditions of the
Sub-Contracts are negotiated and agreed by the parties in accordance with the
contract principles mentioned hereinabove.
 
15.6 In case of any discrepancy between the Contract and the Sub-Contracts, the
Contract shall prevail.
 
15.7 The Contract is signed at Tongye Town, Anyang County, Henan Province.
 
<No clause in the signature page>

 
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PARTY A:
 
Henan Shuncheng Group Coal Coke Co., Ltd.
 
Legal Representative: /s/ Wang Xinshun
 
or Authorized Representative: [illegible]
 
Address: Tongye Town, Anyang County, Henan Province
 
Postal Code: 455141
 
Tel: (+86) 0372-3206721
 
Fax: (+86) 0372-3206721
 
Opening Bank:
 
Bank Account:
 
PARTY B:
 
Ji Gang Group International Engineering Company Limited
 
Legal Representative: /s/ Man Hai Long
 
or Authorized Representative:
 
Address: No. 21, Gongye North Road, Jinan City, Shandong Province
 
Postal Code: 250101
 
Tel: (+86) 0531-88862850
 
Fax: (+86) 0531-88868084
 
Opening Bank: Dongjiao Sub-Branch, Jinan Branch, Industrial and Commercial Bank
of China.
 
Bank Account:

 
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HENAN SHUNCHENG GROUP

160T/H CDQ Project Sub-Contract A：Project Design

Contract Number：SC20090628               (Party A)
Contract Number：WZ0904                     (Party B）
Party A：Henan Shuncheng Group Coal Coke Co., Ltd.
Party B：Ji Gang Group International Engineering Company Limited
June, 2009
 
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Party A：Henan Shuncheng Group Coal Coke Co., Ltd.
 
Party B：Ji Gang Group International Engineering Company Limited
 
WHEREAS, Party A wishes to entrust Party B to perform design work for 160t / h
CDQ Project of Henan Shuncheng Group, NOW THEREFORE, through friendly
consultation, both Parties agree to reach this Design Sub-Contract in the form
of following provisions and Appendixes.
 
Article 1    Contract Purpose
 
1.1. Party A and Party B agree to carry on design for this project in accordance
with the design scope, technique requirement, etc., as defined in Article 6 of
this Contract.
1.2. The effective date of this Design Contract shall be the date of EPC
Contract.
 
Article 2    Legal Basis
 
2.1. The Contract Law of the People’s Republic of China; The Construction Law of
the People’s Republic of China; Regulation on the Contract of Survey and Design
of Engineering Construction, Regulations on the Administration of the Market for
Survey and Design of Engineering Construction.
2.2. National and local rules and regulations concerning management of
construction survey and design.
2.3. Construction approval documents.
 
Article 3    Design Basis
 
3.1. Technical Appendixes for EPC Contract of this project.
3.2. National technical standards and rules for design.
3.3. Design materials delivered by Party A.
 
Article 4    Documents of this Contract and the Priority Thereof
 
All documents of this Contract shall be deemed as capable of cross-reference to
each other. In case that there exists any ambiguity or inconsistency among the
documents of this Contract, EPC Contract or general principles of applicable
national laws or rules shall prevail. If, after execution hereof by both
Parties, the documents with the same name or the same nature are signed at
different times, the one signed at later time shall have priority in
implementation over one signed at the prior time. Any change, modification or
amendment document hereto during the performance hereunder shall be, upon
signature of both Parties, effective part hereto.
 
 
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Article 5    Responsibilities of Both Parties
 
5.1. Responsibilities of Party A
 
5.1.1. Party A shall pay fees to Party B in accordance with EPC Contract.
5.1.2. Party A is entitled to know the design process and element, examine the
construction design of the project, recommend change and submit request.
5.1.3. Party A is entitled to demand information of equipment supplier’s
factories such as equipment samples.
5.1.4. Party A will regularly organize project coordination meetings.
5.1.5. Party A shall provide to Party B all necessary data and documents for the
design within stipulated time, and shall be responsible for the completeness,
correctness and time limit thereof. In case that Party A fails to provide above
materials, Party B shall have right to postpone the delivery of the design
documents accordingly.
5.1.6. In case of any change of the project, size, or conditions of the
entrusted design by Party A, or any error in, or major modification of the
materials submitted thereby causing rework of Party B, both Parties shall
re-negotiate to sign a supplementary contract and re-specify relevant terms, as
well as Party A’s payment to Party B of rework fees at the same proportion based
on the workload of Party B.
5.1.7. Party A shall protect the copyright of Party B’s design, and shall not,
without the consent of Party B, copy, transfer to any third party, or use in any
other project not contemplated hereof, the design documents delivered by Party
B. Party B is entitled to claim damages against Party A if any of the above
circumstances (except that Party A makes any copy required for the construction)
occurs.
 
5.2. Responsibilities of Party B

5.2.1. Party B shall complete the work hereunder in accordance with national
rules, and the specifications and standards hereunder, and shall be responsible
for the design work thereof.
5.2.2. Party B shall warrant that it has independent intellectual property
rights or licensed intellectual property rights to all design elements covered
hereunder.
5.2.3. Party B shall strictly follow the time period hereunder to deliver design
documents and drawings, responsible for the correctness, completeness and
quality of the design documents delivered thereby.
5.2.4. Party B shall follow the techniques as described in the Appendixes to
perform design work for all specialist design for process, heating power,
electric, civil engineering, and general layout, etc.
5.2.5. Party B shall cause the staff thereof to be equipped with experience and
capability necessary for the design work, and shall guarantee that the same will
provide sufficient on-spot service during construction.
5.2.6. Party B shall be responsible for organizing the staff thereof to
participate in the design liaison meetings, design examination meetings and
other relevant technical negotiation, make adjustment, modification and
supplement to the design and drawings pursuant to the examination results, and
send, in a timely manner, staff to modify and solve problems on the spot,
assuming travel and change of drawings expenses arising therefrom, if on-spot
service technician is unable to do so.

 
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5.2.7.  Party B shall, in principle of energy saving and low pollution, strictly
follow national control rules for water, oil, air and noise pollution, etc., in
performing design and arrangement of process work.
5.2.8. Party B shall provide to Party A the design documents, materials and
drawings relating to this project.
5.2.9. For the purpose of smooth construction of this project and its use
thereafter, Party B shall be responsible for the sufficient explanation, and
solving of technical issues, of this Design Contract.
 
Article 6    Design Elements and Progress
 
6.1. Design Scope of Party B: See Technical Appendix III.
 
6. 2. Scope of Work: See Technical Appendix III.
6.3. Design Progress
6.3.1. Party B shall complete all shop drawing design within 6 months after the
signing of this Design Contract, if the external materials as provided by Party
A satisfy the design needs.
6.3.2. In the event that Party A delays the delivery of any materials, Party B
shall have right to extend the corresponding design period accordingly.

Article 7    Design Drawings and Design Documents

The elements of design drawings and design documents delivered shall be those as
provided in the Appendixes to the EPC Contract, and the delivery procedure shall
be such that Party B delivers the design documents to Party A. Party A is
entitled to examine the design documents. See Technical Appendix V for elements
of design documents delivered by Party B.

The materials shall be in Chinese, and the drawings shall be provided in paper
version. Party B shall be responsible for the integrity and correctness of any
materials delivered thereby.

The final documents and formats: GB and ISO Standards for drawings,
IMS-International Metric System for sizes and units, GB/T14689—1993 Standard for
drawing format specification, and GB/T14690—1993 Standard for drawing scale.
 
Article 8    Design Liaison
 
8.1. The design liaison meeting is for the purpose of guaranteeing better design
quality, and will not release liabilities of any Party.
8.2. After the delivery of shop drawings, Party B shall conduct design
clarification with Party A.
 
 
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Article 9    Change of Design
 
9.1. If, during the performance hereunder, Party A requests modification of this
Contract and the design scope and elements thereof, Party B shall satisfy such
request to the extent possible, and may, when necessary, properly postpone the
time of delivery of drawings.
9.2. In case of any change of the project, size, or conditions, of the entrusted
design by Party A, or any error in, or major modification of, the materials
submitted thereby, causing rework of Party B, both Parties shall re-negotiate to
sign a supplementary contract and re-specify relevant terms, as well as Party
A’s payment to Party B of rework fees at the same proportion based on the
workload of Party B.
 
Article 10    Quality Control and Supervision
 
10.1. Party B shall strictly follow the national quality standards to perform
design work.
10.2. Party B shall guarantee the effectiveness and applicability of the design
standards thereof. If, during the design, Party B considers that any original
standard shall be replaced by a new one, Party B shall promptly notify Party A
concerning the corresponding replacement.
 
Article 11    Contract Price and Payment
 
1. The price of this Design Contract shall be in the amount of RMB
8,000,000.00 Yuan (EIGHT MILLION YUAN).
2. The fees shall be paid to Party B in accordance with EPC Contract.
 
Article 12    Breach of Contract
 
Any default Party shall assume liabilities as provided in EPC Contract.
 
Article 13    Confidentiality (See Confidentiality Agreement)
 
13.1. Both Parties shall protect the intellectual property right of each other,
and any Party shall not, without written consent of the other Party, modify,
copy, disclose to any third Party other than the owner, or use in any other
project not contemplated hereof, the materials and documents of the other Party.
Otherwise, the disclosing Party shall assume all responsibilities, and pay
damages, for any consequences arising therefrom.
13.2. The confidentiality obligations under this Article shall be effective
within 10 years after the expiration of this Agreement.
 
Article 14    Force Majeure

If, during the performance period hereunder, force majeure such as typhoon,
flood, earthquake or any other reason un-attributable to neither Party A or
Party B, causes inability to perform hereunder by one or both Parties, such one
or both Parties shall immediately take measures, mitigating losses arising
therefrom to the extent possible.

 
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Article 15    Governing Law, Mediation and Arbitration
 
The rights and obligations of both Parties arising from this Design Contract,
and the formation, validity, interpretation and dispute settlement thereof,
shall be governed by Chinese law.

Any matters uncovered by this Design Contract shall be settled by both Parties
through friendly negotiation. Any difference during the performance hereunder
shall be settled by both Parties in the spirit of compromise and cooperation,
or, in the event of failure of negotiation, may be referred, by filing a suit,
to People’s Court where the project locates.
 
Article 16    Miscellaneous
 
16.1. Any Appendix listed in the Design Contract shall have equal legal effect
with the same.
16.2. Any modification or supplementation may be made to relevant provisions
hereunder subject to consent of both Parties, as an integral part of this Design
Contract.
16.3. This Design Contract shall be written in two original, with each Party
holding one, and in eight copies, with each Party holding four.
16.4. Any matters uncovered by this Design Contract may be supplemented by
agreements of both Parties. Any following Appendix, any relevant agreement and
any telegraph, fax and minute as approved by both Parties, etc., shall be the
integral part hereof, with the same legal effect as this Design Contract.
 
Article 17    Appendices
 
17.1. Confidentiality Agreement

 
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Confidentiality Agreement on
 
160t/h CDQ Project of Henan Shuncheng Group

Party A: Henan Shuncheng Group Coal Coke Co., Ltd.
Party B: Ji Gang Group International Engineering Company Limited

The Confidentiality Agreement is concluded and signed on the basis of 160t/h CDQ
Project of Henan Shuncheng Group (hereinafter referred to as “the Project”).

1.
Definitions

In the Agreement, “Party A’s Confidential Information” shall refer to the
confidential information disclosed directly or indirectly by Party A to Party B.
It includes, but is not limited to Party A’s business information and other
intellectual property information provided by Party A to Party B or received by
Party B resulting from signature of the Agreement, no matter in what forms or
manners the information is disclosed, and no matter whether the information is
marked confidential or not.  The copyrights of the aforesaid documents or
information are and shall remain in Party A’s sole and exclusive property all
the while.
In the Agreement, “Party B’s Confidential Information” shall refer to the
confidential information disclosed by Party B to Party A. It includes Party B’s
business information and the intellectual property right acquired by Party B
before Party B’s undertaking of the Project; it also includes the project
drawings design documents, purchase, technology secrets and know-how generated
by Party B in the construction of the Project, as well as other design documents
required by the Project, no matter in what forms or manners the information is
disclosed, and no matter whether the information is marked confidential or not.
The copyrights of the aforesaid documents or information are and shall remain in
Party B’s sole and exclusive property all the while.
Disclosing Party: the party who discloses (the confidential information) to the
other party;
Receiving Party: the party who receives the confidential information;
Disclosed Party: the party whose confidential information is disclosed.

2.
Confidential Obligations

Either party to the Confidentiality Agreement, if as the receiving party of the
confidential information, shall promise:
2.1
It agrees not to use any confidential information disclosed by the other party
for any purpose other than the Project under the Agreement.

2.2
The receiving party agrees to keep strictly confidential the confidential
information of the disclosing party and without written consent of the
disclosing party, the receiving party may not disclose, divulge, sell, transact,
reproduce or use the confidential information in any form, or in other projects
(including the bidding documents) refer to the parameters in the documents (such
as furnace profile) of the disclosing party.

 
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2.3
If disclosing the confidential information with written consent of the
disclosing party, the receiving party shall adopt all the necessary measures to
strictly control the confidential information within the disclosure scope as
required by the Project.

2.4
If the receiving party needs to disclose the confidential information to a third
party for the purpose of the Project, it shall conclude and sign a
confidentiality agreement with the third party in advance under the terms no
less favorable than the requirements in the Agreement, and it shall file an
application to and obtain written consent of the disclosed party before the
disclosure of the confidential information.

2.5
The term of confidential obligations undertaken by the receiving party herein
shall be ten (10) years after the termination of the Agreement, effective
continuously from the date on which the disclosing party discloses the
confidential information.

2.6
The receiving party agrees to return all the originals and copies of the
confidential information to the disclosing party or to destroy the same
immediately upon the request of the disclosing party.

3.
Liabilities for Breach of Confidential Obligations

If the receiving party breaches its confidential obligation as stipulated in the
Agreement, it shall be responsible for all the consequences, compensate the
disclosing party for all its losses caused therefrom and eliminate adverse
effects caused therefrom.

4.
Miscellaneous

4.1
The Agreement shall be governed by and construed in accordance with the laws of
the People’s Republic of China.

4.2
Any disputes arising from or in connection with the Agreement shall be settled
by negotiation of both parties; in case no agreement can be reached, both
parties agree to submit the disputes to the people’s court at Party A’s place of
domicile.

4.3
The Agreement shall be implemented upon signature by the representatives of both
parties.

 
 
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HENAN SHUNCHENG GROUP COAL COKE CO., LTD
160t/h CDQ Project
Sub-Contract B: Equipment Supply

CONTRACT NO. : SC20090628              (PARTY A)
CONTRACT NO. : WZ0904                   (PARTY B)
Party A: Henan Shuncheng Group Coal Coke Co., Ltd.
Party B: Ji Gang Group International Engineering Company Limited

Signed in June 2009
(Signatures)

 
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Party A: Henan Shuncheng Group Coal Coke Co., Ltd.
Party B: Ji Gang Group International Engineering Company Limited
 
Article 1 General Provisions
 
1.1 Party B shall be responsible for the manufacture, supply and transportation
of the equipments under the Sub-Contract, and shall assume the full
responsibility for the technical performance and quality of the equipments under
the Sub-Contract.
1.2 Party B shall supply the equipments in accordance with the articles of the
Technical Appendixes attached to the EPC Contract and relevant technical
materials provided by Party A.
1.3 All expenses for Party A’s personnel at the site during the execution of the
Sub-Contract shall be borne by Party A. Party B shall provide Party A’s
personnel with necessary work convenience.
1.4 Party B shall be responsible for the bidding and bid negotiation of the
equipment procurement and Party A can participate in the whole process of the
evaluation for technical part of the tender and confirm the technical appendixes
attached to the EPC Contract along with Party B; The evaluation for commercial
part of the tender shall be carried out by Party B. The comprehensive evaluation
comments hereof shall be put on file after the negotiation between the parties.
1.5 The special equipments and installation services hereof (such as pressure
vessel, partial pressure piping and environmental protection equipment) supplied
by Party B shall be inspected by Anyang Bureau of Quality and Technical
Supervision pursuant to relevant national industry standard at Party A’s
expense. Party A shall assume the responsibility to obtain the documents or
other materials required by the inspection mentioned hereinabove and to provide
the support personnel for assistance if required by inspection or the appliance
and instrument necessary for the inspection. Party B shall assist Party A in the
procedure or activities stated hereinabove and provide the certificates of use
or licenses for the above-mentioned equipments.
 
Article 2 Quantity and Main Technical Parameters of the Equipments
 
Please refer to the Technical Appendix-Ⅱand Technical Appendix-Ⅲ of the EPC
Contract.
 
Article 3 Sub-Contract Price
 
3.1 The Sub-Contract price hereof is RMB 85,000,000 (FOR EIGHTY FIVE MILLION
YUAN ONLY).
3.2 The Sub-Contract price is a lump sum price, inclusive of equipment costs,
packing charge, transportation expenses, VAT, etc.

 
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Article 4 payment Terms
 
Please refer to the payment terms as stated in the EPC Contract.
 
Article 5 Delivery and Terms of Delivery
 
5.1 Schedule of Delivery: as specified in Technical Appendix- Ⅸ attached to the
EPC Contract.
5.2 Place of Delivery: Project site.
5.3 Party B shall be responsible for transportation of the equipments from
manufacturing plant to the Project site, and all expenses incurred and the
insurance expenses hereof have been included in the Contract Price. Party B
shall be liable to charge and discharge the equipments. Party B shall fulfill
the duties as required except the responsibility for storage of the equipments
which shall fall on Party A after the arrival of the equipments at the site.
5.4 The attached documentation such as packing list, drawings (as specified in
Technical Appendixes attached), Manufacturer’s Certificate of Quality and
Instruction Book shall be complete and normative. Party B shall provide all the
completion materials in one month after it passed the Test on Completion.
5.5 Conditions of Delivery: considering the transportation condition, the
equipments will be delivered in parts and Party B shall be responsible for the
installation at the site and the expenses for installation works will be borne
by Party B.
 
Article 6 Quality Standard, Test and Trial Operation
 
6.1 The quality standard and test of the equipments under the Sub-Contract shall
be in conformity with relevant national standards in force and the Technical
Appendix-VI attached to the EPC Contract.
6.2 Party B shall give notice to Party A as of requiring Party A to send
relevant personnel for supervision in 5 days before the assembly integration of
major components in the process of equipment manufacture.
6.3 Party B shall give notice to Party A for Party A’s participation in
inspection 5 days before the combined trial operation of main equipments of
steam turbine generator.
 
Article 7 Performance Test Run and Taking-Over Certificate
 
7.1 The performance test run shall be jointly carried out by Party A and Party B
during the installation of the equipments under the Sub-Contract.
7.2 The performance test run of the equipments shall conform with relevant
national standards and the guaranteed performance parameters provided by
Technical Appendix-Ⅶ of the EPC Contract. The Taking-Over Certificate shall be
issued to Party B in 7 days after the pass of the performance test run and shall
be in six originals. Each Party shall hold three originals. Thus, the contract
equipments are accepted.

 
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7.3 The quality warranty period for the equipments under the Sub-Contract shall
be twelve months from the date when the equipments start operation after taking
over.
7.4 Party B shall assume the responsibility as an escort of the equipment system
for three months after the system is put into production.
 
Article 8 Liability for Breach of Contract
 
As specified in the EPC Contract.
 
Article 9 Force Majeure
 
The relevant provisions of Contract Law of the People’s Republic of China shall
apply in case of Force Majeure during the performance of the Sub-Contract.
 
Article 10 Settlement of Disputes
 
10.1 Any disputes arising from or in connection with this Sub-Contract shall be
settled through friendly negotiation by the parties in a timely manner; if
negotiation fails, the parties agree to summit the disputes to the court at the
Project site.
10.2 During the settlement of dispute, other Articles in the Sub-Contract that
may not be affected and shall be performed continuously.
 
Article 11 Taking effects and Miscellaneous
 
11.1 The Sub-Contract shall be effective upon signing by the authorized
representatives designated by the parties and sealing by both parties.
11.2 Other matters not contained in the Sub-Contract shall be settled friendly
by negotiation.
11.3 The Sub-Contract shall come into effect upon signing and sealing by the
parties and is to be terminated after both parties fulfill their
responsibilities as provided in the Sub-Contract. The Sub-Contract shall be in
two originals, respectively held by each party; in eight copies and each party
shall hold four copies.

 
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Henan Shuncheng Group 160t/h CDQ Project

Sub-Contract C: Erection and Construction

Contract No. SC 20090628 (Party A)
Contract No. WZ0904 (Party B)
Party A: Henan Shuncheng Group Coal Coke Co., Ltd.
Party B: Ji Gang Group International Engineering Company Limited

Date: June 2009

(Signatures by hand)

 
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Part One Agreement

Party A (Full Name): Henan Shuncheng Group Coal Coke Co., Ltd.

Party B (Full Name): Ji Gang Group International Engineering Company Limited

According to the Contract Law of the People’s Republic of China, the
Construction Law of the People’s Republic of China, and other relevant laws and
regulations, following the principles of equality, free will, fairness and good
faith, and based on the EPC Contract (“Primary Contract”), the two Parties
hereby reach and enter into this Contract in respect to the installation and
construction engineering of this Project herein.

1.
General Situation of the Project

Project Name: Henan Shuncheng Group 160t/h CDQ Project

Place of the Project: Anyang City of Henan Province

Work Content of the Project: Installation and Construction of Henan Shuncheng
Group 160t/h CDQ Project

2.
Work Scope of the Installation and Construction Project

Work Work scope: The installation, construction and maintenance of Henan
Shuncheng Group 160t/h CDQ Project, which including the construction,
installation, debugging, cooling-load commissioning, thermal-load commissioning
and maintenance within the scope of EPC project and including assisting in the
trial operation and meeting the required standard (the details of the work scope
are as prescribed in Annex- “Technical Specification” of the Primary Contract of
this Project).

3.
Construction Period

Construction Date: 14 months

Commencement Date: from the Engineer issues the commencement order

Completion Date: 14 months after signing this Contract

4.
Quality Standard

Quality Standard for the Project: Up to Required Standard

 
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5.
Contract Price

5.1
The Contract Price for this Installation and Construction Contract is 57 million
RMB (Amount in Words: Fifty Seven Million Only Yuan).

5.2
Party B’s Expenses shall be paid in accordance with the provisions of the EPC
Contract.

6.
Integral Documents of the Contract

The following documents shall be the integral parts of this Contract:

6.1
The written agreement of this Contract

6.2
The General Terms and Conditions of this Contract

6.3
The Special Terms and Conditions of this Contract

6.4
Standard, Specification and Relevant Technical Document 

6.5
Drawings

7.
Relevant terms or terminologies in this Agreement shall have the same meanings
as those defined in Part Two-General Terms and Conditions of this Contract.

8.
Party B covenants to Party A that the construction and completion of the works
shall be conducted strictly according to the Provisions of this Contract and
that Party B shall assume the quality warranty liabilities for the Project
within the quality warranty period.

9.
Party A covenants to Party B that Party A shall pay the Contract Price as well
as other payables according to the time schedule and the method as prescribed in
this Contract.

Part Two General Terms and Conditions

Section One Definitions and Contract Documents

1.
Definitions

Unless otherwise specifically defined in the Special Terms and Conditions, the
following terms shall have the following meanings as defined below:

1.1
General Terms and Conditions: shall mean the terms and conditions which shall be
generally applied to the construction of the Project and which are concluded in
accordance with the laws, regulations and the requirements of the construction
of the works.

 
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1.2
Special Terms and Conditions: shall mean the terms and conditions reached and
concluded by Party A and Party B through negotiations by taking into account the
actual project and based on the laws and regulations, which are the further
elaborations or supplements or modifications to the General Terms and
Conditions.

1.3
Party A: shall mean the Party who has the qualification to be the employer of
the Project and who has the capability to pay the project price and its legal
successor who is qualified to be such Party of this Contract.

1.4
Party B: shall mean the Party who has the qualification to be the contractor of
the construction works and who is admitted by Party A as prescribed in the
Agreement as well as its legal successor who is qualified to be such Party of
this Contract.

1.5
Project Manager: shall mean the representative designated by Party B in the
Special Terms and Conditions to be responsible for the construction management
and the performance of this Contract.

1.6
Designer: shall mean the entity engaged by Party A to be responsible for the
design of this Project and who has already obtained the corresponding
engineering-design graded qualification certificate.

1.7
Supervisor: shall mean the entity engaged by Party A to be responsible for the
supervision of this Project and who has already obtained the corresponding
engineering-supervision rating qualification certificate.

1.8
Engineer: shall mean the chief supervision engineer appointed by the Supervisor
of this Project or the representative designated by Party A to perform this
Contract, whose identity and powers & duties are further elaborated and provided
in the Special Terms and Conditions by Party A and Party B.

1.9
Construction-cost Administrative Department: shall mean relevant department of
the state council, the construction administrative department of the people’s
government at or above the county-level or their entrusted construction-cost
administrative institutes.

1.10
Project: shall mean the project within the Work Scope as agreed in the Agreement
by Party A and Party B.

1.11
Contract Price: shall mean the price agreed by Party A and Party B in the
Agreement as the consideration to Party B’s completion of all the works within
the Work scope and Party B’s assumption of the quality warranty liabilities in
accordance with the provisions of this Contract.

 
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1.12
Additional Contract Price: shall mean the additional contract price figured out
according to the calculation formula of the Contract Price, which is confirmed
by Party A under the situation that requires increasing the contract price
during the performance of the Contract.

1.13
Expenses: shall mean the expenditures which are not covered by the Contract
Price and which shall be borne by Party A or Party B.

1.14
Construction Period: shall mean the total calendar days (including the official
holidays) of the contracting period as agreed in the Agreement by Party A and
Party B.

1.15
Commencement Date: shall mean the absolute or relative date when Party B
commences the construction, as agreed in the Agreement by Party A and Party B.

1.16
Completion Date: shall mean the absolute or relative date when Party B completes
the works within the Work scope, as agreed in the Agreement by Party A and Party
B.

1.17
Drawings: shall mean all the Drawings (including the supporting instructions and
relevant documents) which meet Party B’s construction demand, provided by Party
A or Party B and approved by Party A.

1.18
Construction Site: shall mean the site provided by Party A for construction and
any other sites specifically designated by Party A for construction in the
Drawings.

1.19
Written Form or in Writing: shall mean the written contract, letter, data
message (including telegram, telex, fax, electronic data interchange and e-mail)
and other similar forms which can display its content tangibly.

1.20
Liability for Breach of Contract: shall mean the liabilities which shall be
assumed by the Party who fails to perform its obligations under the Contract, or
whose performance fails to satisfy the requirements of the Contract

1.21
Claim: shall mean the claim for economic compensation and/or extension of the
Construction Period against the counter Party in respect to the actual losses
arising from the performance of the Contract which are not caused by self fault
but under which the counter party shall be held liable for.

 
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1.22
Force Majeure: shall mean any objective circumstances which are unforeseeable,
unavoidable and insurmountable.

1.23
Hour or Day: For the time calculated based on hours in this Contract, the time
shall be calculated starting from the effective commencement of the event
(without deducting the break time).  For the time calculated based on days in
this Contract, the day of the commencement shall not be counted, the time shall
be calculated starting from the next day.  If the last day of the time period
falls into the rest days or other official holidays, the next day following the
rest days or holidays shall be the last day of the time period, however except
for the Completion Date.  The deadline of the last day shall be 24:00 of that
day.

2.
Contract Documents of this Contract and the Interpretation Order

2.1
The contract documents of this Contract shall be interpreted and explained
mutually.  Unless otherwise specifically agreed in the Special Terms and
Conditions, the integral documents of this Contract are listed as follows and
the interpretations shall be conducted according to the following orders of the
documents below:

(1)
The Agreement of this Contract;

(2)
Notification of Award

(3)
Tender Book and its Annexes

(4)
The Special Terms and Conditions of this Contract

(5)
The General Terms and Conditions of this Contract

(6)
Standard, Specification and Relevant Technical Documents

(7)
Drawings

(8)
Bill of Quantities  

(9)
Quotation of Bill of Quantities or Budget Document

The consultations, modifications or other written agreements or documents
concluded during the performance of the Contract by Party A and Party B in
respect to the Project shall be deemed as the integral parts of this Contract.
  
2.2
If the meanings of the terms and conditions in the Contract Documents are
ambiguous or inconsistent, without prejudice to the normal progress of the
Project, Party A and Party B shall settle it through negotiations.  The two
Parties may also require the Engineer who is responsible for the supervision to
make relevant interpretations.  If the two Parties fails to settle it through
negotiations or disagree to let the Engineer who is responsible for the
supervision to make the interpretations, such issue shall be handled and settled
according to Article 37 of the General Terms and Conditions.

 
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3.
Language and Applicable Laws, Standard and Specification

3.1
Language

  
The Contract Documents are written, interpreted and explained in Chinese.  If
two or more than two languages are required to use by the Special Terms and
Conditions, the Chinese shall prevail in respect to the interpretation and
explanation of this Contract.

3.2
Applicable Laws and Regulations

National laws and regulations shall be applied to the Contract Documents.  Other
laws and regulations required for explicit indication shall be agreed by the two
Parties in the Special Terms and Conditions of this Contract.

3.3
Applicable Standard and Specification

The two Parties shall specify the names of the applicable national standards and
specifications in the Special Terms and Conditions; if there are no national
standards and specifications but there are industrial standards and
specifications, the names of the applicable industrial standards and
specifications shall be specified; if there are no national standards and
specifications as well as also the industrial standards and specifications, the
names of the applicable standards and specifications in the local place where
the Project is located shall be specified.  Party A shall provide the agreed
standards and specifications in duplicate to Party B according to the time
schedule as agreed in the Special Terms and Conditions thereof.

If there are no corresponding standards and specification inside China, Party A
shall provide the construction technical requirements to Party B according to
the time schedule as agreed in the Special Terms and Conditions, and Party B
shall bring forward the construction technology according to the agreed time
schedule and requirements which can be implemented after being approved by Party
A.  If Party A requires using the overseas standards and specifications, Party A
shall be responsible to provide Chinese translation versions.

Party A shall bear the Expenses in respect to the purchase, the translation of
the standards and specification and the formulation of the construction
technology arising from this Article.

4.
Drawings

4.1
Party B shall provide the Drawings to Party A according to the date and number
of sets as agreed in the Special Terms and Conditions.  If Party A requires
increasing the number of sets of the Drawings, Party B shall reproduce the
Drawings for Party A and relevant copy Expenses shall be borne by Party A.  If
Party B has any confidentiality requirement on the Project, Party B shall raise
such confidentiality requirement in the Special Terms and Conditions and Party A
shall perform the confidentiality obligations within the agreed effective term
of the confidentiality.

 
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4.2
Without Party B’s permission, Party A shall not transfer the Drawings of this
Project to any third party.

4.3
Party B shall retain a complete set of the Drawings on the Construction Site for
the Engineer and other relevant staff to use when conducting the project
inspection.

Section Two General Rights and Obligations of the Two Parties

5.
Engineer

5.1
To carry out the supervision on the Project, Party A shall notify Party B in
Written Form of the name of the supervisor who it engages, the supervision scope
and supervision authority before implementing the supervision.

5.2
The chief supervision engineer appointed by the Supervisor is named as “the
Engineer” under this Contract, whose name, duties and authorities shall be
specified in the Special Terms and Conditions by Party A and Party B.  The
Engineer shall exercise its authorities according to the provisions of the
Contract, if Party A requires that the Engineer shall obtain Party A’s approval
before it exercises certain authorities, the Engineer shall report to Party A
for approval in such situations.

5.3
The representative dispatched by Party A to perform the Contract on the
Construction Site is also named as “the Engineer”, whose name, duties and
authorities shall be specified in the Special Terms and Conditions by Party A,
however, whose authorities shall not be crossed or overlapped with authorities
of the chief supervision engineer appointed by the Supervisor.  If the
authorities of the Engineers from the two Parties overlap or ambiguous, Party A
shall make clarifications on it and notify Party B in Written Form.

5.4
If there is any event which will affect the rights or obligations of Party A and
Party B arising from the performance of the Contract, the Engineer responsible
for the supervision shall handle it objectively and fairly within its
authorities according to the Contract.  If any Party has any objection to the
Engineer’s disposal, such issue shall be settled according to Article 37 of the
General Terms and Conditions.

5.5
Unless otherwise explicitly agreed in the Contract or agreed by Party A, the
Engineer responsible for the supervision has no right to terminate any rights or
obligations of Party B under this Contract.

 
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5.6
If not to carry out the supervision on the Project, the Engineer under this
Contract shall refer in particular to the representative dispatched by Party A
to perform the Contract on the Construction Site, whose specific authorities
shall be specified in the Special Terms and Conditions by Party A.

6.
Engineer’s Appointment and Order

6.1
The Engineer may appoint its representative to exercise its authorities under
the Contract on its behalf, and may dismiss its representative as it deems
necessary.  The appointment and dismissal shall be notified to Party B by a
7-day prior notice in Written Form, and the Engineer responsible for the
supervision shall also notify Party A such appointment and dismissal.  The
appointment and dismissal notices shall be the annex of this Contract.

The letters issued by the representative of the Engineer to Party B in any
Written Form and within the Engineer’s authorization shall have the same legal
effect with the letters issued by the Engineer.  If Party B has any doubt on the
letters issued by the representative of the Engineer in any Written Form, Party
B may submit such letters to the Engineer for its confirmation.  If there is any
error in the orders issued by the representative of the Engineer, the Engineer
shall correct it.

Except the Engineer or the representative of the Engineer, other staff
dispatched by Party A to the Construction Site shall have no right to issue any
orders to Party B.

6.2
The Engineer’s orders or notices shall be delivered to the Project Manager in
Written Form after being signed by the Engineer, and shall come into effect
after the Project Manager signs its name and marks the time of receipt on the
return receipt.  Party A may issue an oral order and make a written confirmation
within 48 hours where it is necessary to do so, and Party B shall implement such
Engineer’s order.  If the Engineer is unable to make a timely written
confirmation, Party B shall ask for the written confirmation within 7 days after
the Engineer issued the oral orders.  If the Engineer fails to give any response
within 48 hours upon Party B’s request for written confirmation, such oral
orders shall be deemed to be confirmed.

If Party B regards the Engineer’s order is unreasonable, it shall provide to the
Engineer a written report on modifying the orders within 24 hours upon receiving
such orders, the Engineer shall decides to modify the orders or to continue to
implement the original orders within 24 hours upon receiving Party B’s written
report and shall notify Party B in Written Form of its decisions.  If the
Engineer requires Party B to immediately implement the orders under certain
emergencies, or if the Engineer still decides to implement the orders
notwithstanding any doubts raised by Party B, Party B shall implement such
orders.  Party A shall bear the Additional Contract Price and any losses
incurred to Party B arising out of the incorrect orders and the delayed
Construction Period shall be extended accordingly.

 
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This Article shall be also applied to the orders and notices issued by the
representative of the Engineer.

6.3
The Engineer shall provide Party B the required orders and approvals timely
according to the provisions of the Contract and perform other obligations as
agreed by the two Parties.  If the Construction Period is delayed caused by the
Engineer’s failure to perform its obligations according to the Contract, Party A
shall bear the Additional Contract Price caused by such delay, compensate for
Party B’s relevant losses, and shall extend the delayed Construction Period.

6.4
If requiring replacing the Engineer, Party A shall notify Party B in Written
Form by a 7-day prior notice, the successor shall continue to exercise the
authorities of the predecessor and shall continue to perform the obligations of
the predecessor as provided in the Contract Documents.

7.
Project Manager

7.1
The name and positions of the Project Manager shall be specified in the Special
Terms and Conditions.

7.2
In respect to the notice issued by Party B according to the Contract, it shall
be delivered to the Engineer in Written Form after being signed by the Project
Manager and it shall become effective after the Engineer signs its name and
marks the time of receipt on the return receipt thereof.

7.3
The Project Manager shall organize the construction according to the
construction management plan (construction plan) according to the construction
recognized by Party A and the Engineer shall organize the construction according
to the orders issued by the Engineering based on the Contract.  Under any
emergencies under which the Engineer is not reachable, the Project Manager shall
take the emergency measures for ensuring the human life and the security of the
Project and the property, and shall deliver a report to the Engineer within 48
hours after taking such measures.  If Party A or any third party shall be held
liable in such situation, Party A shall bear the Additional Contract Price
arising therefrom and extend the Construction Period accordingly; however, if
Party B shall be held liable, Party B shall bear relevant Expenses and the
Construction Period can not extended.

 
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7.4
If Party B requires replacing the Project Manager, it shall notify Party A in
Written Form at least by a 7-day prior notice and shall obtain Party A’s
approval.  The successor shall continue to exercise the authorities of the
predecessor and shall continue to perform the obligations of the predecessor as
provided in the Contract Documents.

7.5
Party A may negotiate with Party B to suggest replacing the incompetent Project
Manager that Party A regards.

8.
Party A’s Work

8.1
Party A shall complete the following work according to the provisions and time
schedule as specified in the Special Terms and Conditions:

(1)
The work of land expropriation, compensation for demolition, leveling the
Construction Site, etc., to procure the Construction Site bear the conditions
for the construction and continue to settle the left-over problems on the
aforementioned work after the construction commences;

(2)
connect the water, electricity, telecommunication line outside of the
Construction Site to the place agreed in the Special Terms and Conditions, to
meet the requirements during the Construction Period;

(3)
To open the passage connecting the Construction Site and the public urban and
rural roads, and the main passages within the Construction Site as agreed in the
Special Terms and Conditions, to meet the requirements of construction
transportation and to ensure the smooth passages during the Construction Period.

(4)
To provide the materials related to the underground utilities of the
Construction Site to Party B and responsible for the authenticity and accuracy
of such materials;

(5)
To handle the construction permit and other certificates and approvals required
for the construction, and handling the formalities of application and approval
for the temporary site, water supply cut-off, power cut, interruption of
traffic, blasting operation, etc.(excluding Party B’s qualification
certificates);

(6)
To determine the bench mark and the coordinate control point and submit them to
Party B in Written Form, to conduct the on-site delivery and check;

(7)
To organize Party B and the Designer to conduct a join checkup on the Drawings
and a clarification on the design;

 
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(8)
To coordinate to protect the underground utilities surround the Construction
Site, as well as the adjacent buildings, structures (including the architectural
conservation) and the ancient and famous trees, and bear relevant Expenses;

(9)
Other work which Party A shall fulfill and shall be specified in the Special
Terms and Conditions by the two parties.

8.2
Party A may trust part of work listed in Article 8.1 to Party B, which shall be
specified in the Special Terms and Conditions; and relevant Expenses shall be
borne by Party A.

8.3
If Party A fails to perform any obligations under Article 8.1 which results in
delay of the Construction Period or causes any losses incurred to Party B, Party
A shall compensate relevant losses suffered by Party B and shall extend the
delayed Construction Period.

9.
Party B’s Work

9.1
Party B shall complete the following work according to the provisions and time
schedule as specified in the Special Terms and Conditions:

(1)
As entrusted by Party A, to complete the construction drawing design or
auxiliary project design within its design qualification rating and business
scope, to implement such designs after being confirmed by the Engineer, Party A
shall bear relevant Expenses arising from;

(2)
To provide the Engineer the annual, quarterly and monthly project schedule and
the corresponding progress statistical reports;

(3)
As required by the project, provide and maintain the non-night-construction
illumination and fencing, and to be responsible for the security and safeguards;

(4)
Abide by the administrative regulations on Construction Site traffic,
construction noises, environmental protection and safety production issued by
the competent authorities, to handle relevant formalities as required, and to
inform Party A in Written Form;  Party A shall bear relevant Expenses arising
therefrom, except the fines which Party B shall be liable for;

(5)
Before the completed Project is delivered to Party A, Party B shall be
responsible to protect the completed construction works according to the
provisions of the Special Terms and Conditions and Party B shall repair and
restore the impaired parts within the protection duration at its own cost; if
Party A requires Party B to take special measures to protect part of the works,
such requirement and the corresponding Additional Contract Price shall be
specified in the Special Terms and Conditions by the two Parties;

 
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(6)
To protect underground utilities surround the Construction Site, as well as the
adjacent buildings, structures (including the architectural conservation) and
the ancient and famous trees according to the provisions of the Special Terms
and Conditions;

(7)
To ensure the sanitation status of the Construction Site conforms to relevant
environmental and sanitation administrative regulations, to clean the
Construction Site to meet the requirements as specified in the Special Terms and
Conditions before the work delivery, to bear relevant losses and fines caused by
its violations of relevant regulations and rules;

(8)
Other work which Party B shall fulfill and shall be specified in the Special
Terms and Conditions by the two Parties.

9.2
If Party B fails to perform any obligations under Article 9.1 which causes any
losses incurred to Party A, Party B shall compensate relevant losses suffered by
Party A.

Section Three Construction Management Plan and Construction Period

10.
Construction Schedule

10.1
Party B provide the construction management plan and the construction schedule
to the Engineer according to the time schedule as specified in the Special Terms
and Conditions; the Engineer shall give confirmation or raise any modifications
according to the time schedule as specified in the Special Terms and Conditions,
if no confirmation or written comment is provided within the time limit, it
shall been deemed as “agreed”.

10.2
If the single project among the group projects shall be constructed by stages,
single project construction schedule shall be formulated which shall be
specified in the Special Terms and Conditions by the two Parties.

10.3
Party B must organize the construction according to the construction schedule
which is confirmed by the Engineer and must accept the Engineer’s check and
supervision on the construction progress.  If the actual construction progress
does not comply with the confirmed construction schedule, Party B shall bring
forward the improvement measures according to the Engineer’s requirement and
shall implement such measures after being confirmed by the Engineer.  If the
actual progress’s incompliance with the construction schedule is caused by Party
B’s reason, Party B has no right to require Additional Contract Price in respect
to the improvement measures.

 
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11.
Construction Commencement and Delay of the Construction Commencement

11.1
Party B shall commence the construction on the Commence Date as agreed in the
Agreement.  If Party B fails to commence the construction timely, it shall apply
with the Engineer for postponing the construction commencement in Written Form
no less than 7 days prior to the agreed Commencement Date as agreed in the
Agreement, by providing relevant reasons and detailed requirements.  The
Engineer shall response to Party B in Written Form within 48 hours after
receiving such application for postponement.  If the Engineer fails to give any
response within 48 hours after receiving such application for postponement, it
shall be deemed that the Engineer consented to Party B’s requirement, and the
Construction Period shall be extended accordingly.  If the Engineer dissents to
the requirement for postponement or if Party B fails to raise its requirement on
postponement within the scheduled time, the Construction Period shall not be
extended.

11.2
If the construction can not be commenced according to the Commencement Date as
agreed in the Agreement which is due to Party A’s reason, the Engineer shall
notify Party B in Written Form, to delay the Commencement Date.  Party A shall
compensate any losses incurred to Party B arising from the delay of construction
and the Construction Period shall be extended accordingly.

12.
Suspension of the Construction

If the Engineer regards it is necessary to suspend the Construction, it shall
require Party B to suspend the construction in Written Form and it shall provide
a written approach within 48 hours after raising such requirement.  Party B
shall stop the construction as required by the Engineer and well protect the
completed works.  After Party B implements the approaches provided by the
Engineer, it may apply for resuming the work in Written Form and the Engineer
shall give a response within 48 hours.  If the Engineer fails to provide the
written approach within the scheduled time or fails to give a response within 48
hours after receiving Party B’s application for resumption of work, Party B may
resume the work at its own discretion.  If the construction suspension is caused
by Party A’s reason, Party A shall bear the Additional Contract Price and
compensate any losses incurred to Party B arising therefrom and the delayed
Construction Period shall be extended accordingly; if the construction
suspension is caused by Party B’s reason, Party B shall bear relevant Expenses
and the Construction Period shall not be extended.

 
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13.
Delay of Construction Period

13.1
The Construction Period shall be extended accordingly subject to the Engineer’s
confirmation, provided that the Construction Period is delayed due to the
following reasons:

 
(1)
Party A fails to provide the conditions for the commencement of the construction
according to the provisions of the Special Terms and Conditions;

(2)
Party A fails to pay the prepayment and progress payment of the Project
according to the agreed time schedule, which causes the construction can not be
normally conducted;

(3)
The Engineer fails to provide the required orders, approvals as agreed in the
Contract, which causes the construction can not be normally conducted;

(4)
The design changes and the quantity of works increases;

(5)
The suspension of construction takes more than 8 hours accumulatively within 1
week which is caused by the supplies cut-off of water, power and gas not due to
Party B’s reason;

(6)
Forece Majeure;

(7)
Under other circumstances that the Construction Period is extended as specified
in the Special Terms and Conditions or agreed by the Engineer.

13.2
Party B shall report to the Engineer in respect to the delayed Construction
Period in Written Form within 14 days after the events listed in Article 13.1
happen.  Party A shall give confirmation within 14 days after receiving such
report, if no confirmation or modification is brought forward within the time
limit, it shall be deemed that the Construction Period is agreed to be extended.

14.
Completion of Project

14.1
Party B shall complete the Project in compliance with the Completion Date as
agreed in the Agreement or in compliance with the extended construction schedule
agreed by the Engineer.

14.2
If the construction cannot be completed in compliance with the Completion Date
as agreed in the Agreement or in compliance with the extended construction
schedule agreed by the Engineer, which is caused by Party B’s reason, Party B
shall be liable for breach of contract.

14.3
During the construction, if Party A requires early completing the construction,
the two Parties shall enter into an early construction completion agreement
after mutual consultations, which shall be an integral part of the Contract
Documents. The early construction completion agreement shall specify the
measures adopted by Party B to ensure the quality and safety of the Project, the
conditions provided by Party A for the early completion and the Additional
Contract Price required for such early completion, etc.

 
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Section Four Quality and Inspection

15.
Quality of the Project

15.1
The quality of the Project shall reach the quality standard as agreed in the
Agreement and the evaluation of the quality standard shall be based on the
national or industrial evaluation standard of the quality inspection.  If the
quality of the Project can not reach the agreed quality standard which is caused
by Party B’s reason, Party B shall be liable for breach of contract.

15.2
If the two Parties have any dispute over the quality of the Project, such
dispute shall be identified by the engineering quality test institute agreed by
the two Parties, and relevant Expenses and the losses incurred therefrom shall
be borne by the responsible Party.  If two Parties are both liable in the said
situation, the two Parties shall share the liabilities based on their respective
liability

16.
Check and Rework

16.1
Party B shall conduct the construction strictly according to the requirements of
the standard, specification and design Drawings as well as the orders issued by
the Engineer in accordance with the Contract, shall accept the Engineer’s check
and inspection from time to time, and shall provide conveniences for such check
and inspection.

16.2
If the quality of the Project can not reach the agreed standard, once discovered
by the Engineer, the Engineer shall require Party B to demolish and reconstruct,
and Party B shall conduct the demolishment and reconstruction according to the
Engineer’s requirement until the quality reaches the agreed standard.  If the
substandard is caused by Party B’s reason, Party B shall bear the Expenses of
the demolishment and reconstruction and the Construction Period can not
extended.

16.3
The Engineer’s check and inspection shall not affect the normal
construction.  If it affects the normal construction and the result of the check
and inspection is unqualified, the Expenses arising from the impact on the
normal construction shall be borne by Party B.  Otherwise, the Additional
Contract Price arising from impact on the normal construction shall be borne by
Party A and the Construction Period shall be extended accordingly.

16.4
Party A shall bear the Additional Contract Price arising from the incorrect
orders issued by the Engineer or the reasons other than Party B’s.

 
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17.
Concealed Work and Intermediate Acceptance

17.1
When the Project bear the concealed conditions or reach the stage of
intermediate acceptance as specified in the Special Terms and Conditions, Party
B shall conduct self-inspection and shall notify the Engineer to inspect and
accept in Written Form 48 hours prior to the concealment or the intermediate
acceptance.  The notification shall include the content, and the inspection time
and place of the concealment and the intermediate acceptance.  Party B prepare
the inspection and acceptance records.  If it’s accepted, the Engineer shall
sign on the inspection and acceptance records, and then Party B may conduct the
concealment and continue to construct.  If it’s not accepted, Party B shall
correct it within the time period determined by the Engineer and then conduct
the re-inspection.

17.2
If the Engineer fails to conduct the inspection and acceptance timely, it shall
raise a delay requirement to Party B in Written Form 24 hours prior to the
inspection and acceptance, and such delay shall not exceed 48 hours.  If the
Engineer fails to raise the delay requirement within the aforementioned time
limit and fails to conduct the inspection and acceptance, Party B may organize
its own inspection and acceptance and the Engineer shall recognize such
inspection and acceptance records.

17.3
Upon the Engineer’s inspection, if the quality of the Project conforms to the
requirements of the standard, specification and design Drawings, however, the
Engineer does not sign on the inspection and acceptance records within 24 hours
after it is accepted, it shall be deemed that the Engineer has already
recognized the inspection and acceptance records and Party B may conduct the
concealment or continue to construct.

18.
Re-inspection

No matter whether the Engineer conducts the inspection and acceptance or not,
when the Engineer requires re-inspecting the concealed work, Party B shall strip
or punch holes according to the requirements, and shall recover or restore it
after the re-inspection.  If it is accepted, Party A shall bear all the
Additional Contract Price arising therefrom, compensate Party B’s losses and
extend the Construction Period accordingly.  If it is not accepted, Party B
shall bear all the Expenses arising therefrom and the Construction Period can
not be extended.

19.
Project Commissioning

19.1
If the two Parties require the commissioning, the commissioning items shall be
consistent with Party B’s installation scope.

 
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19.2
If the equipment installation project bear the single-machine and no-load
commissioning conditions, Party B shall organize the commissioning and shall
notify the Engineer 48 hours prior to the commissioning in Written Form.  The
notification shall include the items, time and place of the
commissioning.  Party B shall prepare the commissioning records, and Party A
shall provide necessary conditions for the commissioning according to Party B’s
requirement.  If the commissioning is qualified, the Engineer shall sign on the
commissioning records.

19.3
If the Engineer fails to take part in the commissioning, it shall raise a delay
requirement to Party B 24 hours prior to the commissioning in Written Form; if
the Engineer does not take part in the commissioning, it shall recognize the
commissioning records.

19.4
If the equipment installation project bear the no-load and linkage commissioning
conditions, Party A shall organize the commissioning and shall notify Party B 48
hours prior to the commissioning in Written Form.  The notification shall
include the contents, time and place of the commissioning as well as the
requirements to Party B, and Party B shall be well prepared according to the
requirements.  If the commissioning is qualified, the two Parties shall sign on
the commissioning records.

19.5
The two Parties’ Responsibilities

(1)
If the commissioning cannot reach the acceptance requirement which is due to the
design reason, Party A shall require the Designer to modify the design, and
Party B shall re-install according to the modified design.  Party B shall bear
all the Expenses arising from the design modification, demolishment and
re-installation, and the Construction Period cannot be extended.

(2)
If the commissioning cannot reach the acceptance requirement which is due to the
equipment manufacturing, the equipment purchaser shall be responsible for the
re-purchase or the repair, and Party B shall be responsible for the demolishment
and re-installation.  If such equipment is purchased by Party B, Party B shall
bear the Expenses arising from the repair or re-purchase, demolishment and
re-installation, and the Construction Period cannot be extended.  If such
equipment is purchased by Party A, Party A shall bear the Additional Contract
Price for the foregoing items and the Construction Period shall be extended
accordingly.

(3)
If the commissioning cannot reach the acceptance requirement which is due to the
Party B’s construction, Party B shall conduction the re-installation and
re-commissioning according to the Engineer’s requirements, shall bear the
Expenses arising from the re-installation and re-commissioning, and the
Construction Period cannot be extended.

 
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(4)
Except what is already covered by the Contract Price or unless otherwise agreed
in the Special Terms and Conditions, the commissioning Expenses shall be borne
by Party A.

(5)
If the Engineer fails to sign on the commissioning records after the
commissioning is qualified and  24 hours elapse after completing the
commissioning, it shall be deemed that the Engineer has already recognized the
commissioning records, and Party B may continue to construct or handle the
completion formalities.

19.6
The commissioning with feeds shall be conducted by Party A after the Project is
completed and accepted, if Party A requires to conduct it before the Project is
completed and accepted or if Party A requires Party B’s assistance, it shall
obtain Party B’s consent and sign a supplementary agreement separately.

Section Five Safety in Construction

20.
Safety in Construction and Check

20.1
Party B shall abide by relevant administrative regulations on safety in
production of construction engineering, strictly organize the construction
according to the safety standards, accept the law-based supervision and check
from the industrial safety inspector, adopt necessary safety precaution measures
and eliminate the accident threats.  Party B shall be liable for the accidents
resulting from Party B’s inadequate safety precaution measures and shall bear
the Expenses arising therefrom.

20.2
Party B shall conduct a safety education to its working staff on the
Construction Site and shall be responsible for the safety of such working
staff.  Party A shall not require Party B to conduct the construction against
the safety management rules.  Party A shall be liable for the accidents caused
by Party A’s reason and shall bear the Expenses arising therefrom.

21.
Safety Precaution

21.1
If Party B conducts the construction to the power equipment, electric
transmission line, underground utilities, or in the air-tight and
shock-resistance workshop, flammable and combustible place, and the place
adjacent to the frontage vital communication line, it shall bring forward the
safety precaution measures to the Engineer, which can be implemented after being
recognized by the Engineer, and relevant safety precaution Expenses shall be
borne by Party A.

 
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21.2
When conducting the blasting operation, the construction in the radiant and
poisonous environment (including storage, transportation and usage), as well as
using the poisonous and caustic instruments to construct, Party B shall notify
the Engineer 14 days prior to the construction in Written Form and put forward
corresponding safety precaution measures, which can be implemented after being
recognized by the Engineer, and relevant safety precaution Expenses shall be
borne by Party A.

22.
Accident Management

22.1
If serious casualties and other safety accidents happen, Party B shall
immediately report to the competent departments according to relevant rules and
notify the Engineer, in the mean time, Party B shall deal with the accident
according to the requirements of the competent governmental authorities, and the
responsible party for the accident shall bear the Expenses arising therefrom.

22.2
If Party A and Party B have any dispute over the responsibility for accident, it
shall be dealt with according to the competent governmental authorities’
determination.

  
Section Six Contract Price and Payment

23.
Contract Price and Adjustment

23.1
The Contract Price of the bidding project shall be specified in the Agreement by
Party A and Party B based on the tender price in the notification of award.  The
Contract Price of the non-bidding project shall be specified in the Agreement by
Party A and Party B based on the project budget statement.

23.2
After the Contract Price is agreed in the Agreement, any Party shall not modify
it discretionally. The two Parties may adopt one of the following there methods
in the Special Terms and Conditions to determine the Contract Price:

(1)
Fixed-price Contract: in the Special Terms and Conditions, the two Parties shall
specify the calculation method of the Contract Price taking into consideration
of the risk scope and risk Expenses, and the Contract Price shall not be
adjusted within the agreed risk scope.  The adjustment method of the Contract
Price beyond the agreed risk scope shall be specified in the Special Terms and
Conditions.

 
(2)
Adjustable-price Contract: the Contract Price may be adjusted according to the
two Parties’ agreement and the two Parties shall specify the adjustment method
of the Contract Price in the Special Terms and Conditions.

 
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(3)
Cost-plus- commission Contract: The Contract Price is composed of the cost and
the commission, and the two Parties shall specify the cost structure and the
calculation method of commission in the Special Terms and Conditions.

23.3
The adjustment factors affecting the Contract Price under the Adjustable-price
Contract shall include:

 
(1)
The change of the laws, regulations and relevant national policies which will
affect the Contract Price;

(2)
The price adjustment published by the Construction-cost Administrative
Department;

(3)
The suspension of construction takes more than 8 hours accumulatively within 1
week which is caused by the supplies cut-off of water, power and gas not due to
Party B’s reason;

(4)
Other factors agreed by the two Parties.

23.4
Party B shall notify the adjustment reason and amount to the Engineer in Written
Form within 14 days after the events listed in Article 23.3 happen, and the
adjusted amount after being confirmed by the Engineer shall be the Additional
Contract Price after being confirmed by the Engineer which shall be paid
together with project price.  If the Engineer fails to make any confirmation or
provide modification comments within 14 days after receiving Party B’s notice,
it shall been deemed that such adjustment has been approved.

24.
Project Prepayment

If implement the project prepayment, the two Parties shall specify in the
Special Terms and Conditions the payment schedule and amount of the project
price that Party A shall prepay to Party B, and such prepayment shall be
deducted according to the agreed time schedule and proportion after the
commencement of the construction.  The prepayment time shall not be later than 7
days prior to the agreed Commencement Date.  If Party A fails to prepay the
payment according to the agreement, Party B shall notify Party A to prepay 7
days after the agreed prepayment deadline; if Party A fails to prepay timely as
required after receiving the notice, Party B may suspend the construction 7 days
after issuing the notice, and Party A shall pay to Party B the loan interest on
the payables as of the due payment date and shall be liable for breach of
contract.

 
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25.
Confirmation to Quantity of Works

25.1
Party B shall submit a report on the completed quantities of works to the
Engineer according to the time schedule as specified in the Special Terms and
Conditions.  The Engineer shall verify the completed quantities (hereinafter
referred as “Quantity Verification”) of works according to the design Drawings
within 7 days after receiving such report and shall notify Party B 24 hours
prior to the Quantity Verification, Party B shall provide conveniences for the
Quantity Verification and dispatch staff to take part in.  If Party B does not
take part in the Quantity Verification after receiving the notice, the result of
the Quantity Verification shall be effective, which shall serve as the basis for
the payment of the project price.

25.2
If the Engineer fails to conduct the Quantity Verification within 7 days after
receiving Party B’s report, the quantity of works listed in Party B’s report
shall be deemed as “confirmed” from the 8th day which serve as the basis for the
payment of the project price.  If the Engineer fails to notify Party B according
to the agreed time schedule which results in Party B’s failure in taking part in
the Quantity Verification, the result of the Quantity Verification shall be
invalid.

25.3
The Engineer shall not conduct the Quantity Verification on Party B’s quantities
of rework beyond the scope of the design Drawings or due to Party B’s reason.

26.
Payment of the Project Price (Progress Payment)

26.1
Party A shall pay the project price (progress payment) to Party B within 14 days
after the result of the Quantity Verification is confirmed.

26.2
The adjusted Contract Price in Article 23, the contract price for project
modification and adjustment in Article 31 of the General Terms and Conditions,
as well as the Additional Contract Price in other provisions shall be paid
together with the payment of the project price (progress payment).

26.3
If Party A fails to pay the project price (progress payment) before the agreed
payment deadline, Party B may notify Party A to make the payment; if Party A
still fails to make the payment as required after receiving Party B’s notice, it
may negotiate with Party B to enter into a deferred payment agreement.  Upon
agreed by Party B, the payment may be deferred.  The agreement shall specify the
time schedule of the deferred payment and the loan interest rate accrued on the
payables as of the 15th day after the result of the Quantity Verification is
confirmed.

26.4
If Party A fails to pay the project price (progress payment) according to the
Contract and the two Parties fail to reach any deferred payment agreement which
cause the construction cannot be conducted, Party B may suspend the construction
and Party A shall be liable for the breach of contract.

 
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Section Seven Supply of Materials and Equipment

27.
The Materials and Equipment Supplied by Party A

27.1
If the materials and equipment is supplied by Party A, the Parties shall agree
on a List of Materials and Equipment Supplied by Party A (as Annex 2) attached
to this Contract.  Such List shall specify the name, specification, type,
quantity, unit price and quality rating, as well as the time and place of the
supply.

27.2
Party A shall provide the conformity certifications of the products according to
the provisions agreed in such list and shall be responsible for the quality
thereof.  Party A shall notify Party B 24 hours prior to the supply of the
materials and equipment in Written Form and Party B shall dispatch staff to
check jointly with Party A.

27.3
After Party B’s check, Party B shall well keep the materials and equipment
supplied by Party A, and Party A shall pay relevant keeping Expenses.  If any
loss or damage happens due to Party B’s reason, Party B shall be liable for such
compensation.

27.4
If the actual materials and equipment supplied by Party A do not conform to the
list, Party A shall assume relevant liabilities, which shall be elaborated in
the Special Terms and Conditions according to the following situations:

(1)
If the unit price of the materials and equipment does not conform to the list,
Party A shall bear the price differences;

(2)
If the name, specification, type and quality rating do not conform to the list,
Party B may refuse to accept and keep, and Party A shall transport it out of the
Construction Site and repurchase;

(3)
If the specification and type of the materials supplied by Party A do not
conform to the list, upon Party A’s consent, Party B may adjust and replace them
for Party A, and Party A shall bear relevant Expenses;

(4)
If the delivery place does not conform to the list, Party A shall be responsible
for transporting the goods to the place designated in the list;

(5)
If the supply quantity is less than the agreed quantity in the list, Party A
shall make a full complement; if the supply quantity is more than the agreed
quantity in the list, Party A shall be responsible to transport the excessive
parts out of the Construction Site.

(6)
If the delivery time is earlier than the agreed time in the list, Party A shall
bear the keeping Expenses arising therefrom; if delivery time is later than the
agreed supply time in the list, Party A shall compensate the losses incurred to
Party B arising therefrom, and the Construction Period shall be extended
accordingly if it is delayed.

 
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27.5
Before using the materials and equipment supplied by Party A, Party B shall be
responsible for inspection or test, such materials and equipment cannot be used
if they are unqualified, and relevant inspection or test Expenses shall be borne
by Party A.

27.6
The settlement method for the materials and equipment supplied by Party A shall
be specified in the Special Terms and Conditions by the two Parties.

28.
The Materials and Equipment Supplied by Party B

28.1
If Party B is responsible for purchasing the materials and equipment, such
purchase shall be conducted by Party B according to the provisions of the
Special Terms and Conditions, the design and relevant requirements, Party B
shall provide the conformity certification of the product and shall be
responsible for the quality of the materials and equipment.  Party B shall
notify the Engineer to check 24 hours prior to the supply of the materials and
equipment in Written Form.

28.2
If the materials and equipment purchased by Party B do not conform to the design
or the standard requirement, Party B shall transport them out of the
Construction Site within the time limit as require by the Engineer, shall
repurchase the products which are in compliance with requirements, shall bear
relevant Expenses arising therefrom, and the delayed Construction Period cannot
be extended.

28.3
Before using the materials and equipment supplied by Party B, Party B shall
conduct the inspection or test as required by the Engineer, such materials and
equipment cannot be used if they are unqualified and relevant inspection or test
Expenses shall be borne by Party B.

28.4
If the Engineer discovers that Party B’s purchase and usage of the materials and
equipment do not conform to the design or the standard requirement, it shall
require Party B to repair, demolish or repurchase, Party B shall bear relevant
Expenses arising therefrom and the delayed Construction Period cannot be
extended.

28.5
If Party B requires using the alternate materials, such materials can be used
only subject to the Engineer’s recognition.

28.6
For the materials and equipment to be purchased by Party B, Party A shall not
designate the manufacturer or the supplier.

 
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Section Eight Project Modification

29.
Design Modification of the Project

29.1
If Party A requires modifying the original project design, it shall notify Party
B in Written Form by 14-day prior notice.  If the modification is beyond the
original design standard or the approved construction scale, Party A shall
report the planning administrative department and other competent authorities
for re-check and re-approval, and the original Designer shall provide
corresponding Drawings and explanations in relation to the modification.  Party
B shall conduct the following required modifications according to the
modification notice and other relevant requirements issued by the Engineer:

(1)
Modify the elevation, baseline, position and size of part of the Project;

(2)
Increase or decrease the quantity of works agreed in the Contract;

(3)
Modify the construction time schedule and sequence of relevant works;

(4)
Other auxiliary work in relation to and required by the Project modification.

Party A shall bear the increase and decrease of the Contract Price as well as
Party B’s losses arising from the modifications, and the delayed Construction
Period shall be extended accordingly.

29.2
During the construction, Party B shall not conduct any modification to the
original project design. Party B shall bear the Expenses and Party A’ s direct
losses arising from the its unauthorized modifications to the design, and the
delayed Construction Period cannot be extended.

29.3
During the construction, if Party B brings forward any rational suggestion which
involves the modifications to the design Drawings or the construction management
plan, as well as the replacement to the materials and equipment, it shall report
to the Engineer for approval.  Party B shall bear relevant Expenses arising from
unauthorized modifications or replacement, shall compensate Party A’s relevant
losses and the delayed Construction Period cannot be extended.

If the Engineer agrees to adopt Party B’s rational suggestion, the incurred
Expenses and the acquirable proceeds shall be shared by Party A and Party B as
separately agreed by the two Parties.

30.
Other Modifications

During the performance of the Contract, if Party A requires modifying the
project quality standard or raises any other material modifications, it shall be
settled by the two Parties through mutual consultations.

 
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31.
Price Adjustment

31.1
Party B shall provide a project price adjustment report within 14 days after the
project modification is confirmed, and Contract Price can be adjusted only
subject to the Engineer’s confirmation.  The Contract Price adjustment shall be
conducted according to the following methods:

(1)
If there is applicable price to the project modification under the Contract, the
Contract Price shall adjusted based on the price already agreed in the Contract;

(2)
If there is only similar price to the project modification under the Contract,
the Contract Price may adjusted by taking reference to such similar price;

(3)
If there is no applicable price or similar price to the project modification
under the Contract, Party B shall propose a proper price adjustment which can be
implemented after being confirmed by the Engineer.

31.2
If Party B fails to provide the project price adjustment report to the Engineer
within 14 days after the modification is confirmed by the two Parties, it shall
be deemed that the modification does not involve in any adjustment to the
Contract Price.

31.3
The Engineer shall give its confirmation within 14 days after receiving the
project price adjustment report, if the Engineer refuses to confirm without any
justified reasons, it shall be deemed that the project price adjustment report
has already been confirmed 14 days after the project price adjustment report is
delivered.

31.4
If the Engineer disagrees to the price adjustment proposed by Party B, it shall
be settled according to Article 37 of the General Terms and Conditions.

31.5
The increased price for the project modification which is confirmed by the
Engineer shall serve as the Additional Contract Price, which shall be paid
together with the project price.

31.6
If the project modification is caused by Party B’s own reason, Party B has no
right to require the Additional Contract Price.

 
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Section Nine Completion, Acceptance and Settlement

32.
Completion and Acceptance

32.1
When the project reach the conditions of completion and acceptance, Party B
shall provide Party A a complete as-built documents and a completion and
acceptance report according to relevant national construction completion and
acceptance regulations.  If the two Parties stipulate Party B shall provide an
as-built Drawing, the providing time and copies of such as-built Drawings shall
be specified in the Special Terms and Conditions.

32.2
Party A shall organize relevant departments to conduct the inspection and
acceptance within 28 days after receiving the completion and acceptance report,
and shall give a confirmation or modification comment within 14 days after the
inspection.  Party B shall correct it as required and shall bear the correction
Expenses caused by its own reasons.

32.3
If Party A fails to organize the inspection and acceptance within 28 days after
receiving the completion and acceptance report submitted by Party B, or fails to
give the modification comment within 14 days after the inspection, it shall be
deemed that the completion and acceptance report has already been recognized.

32.4
If the Project is accepted, the date when Party B submits the completion and
acceptance report shall be the actual Completion Date.  If the Project is
accepted after being corrected according to Party A’s requirement, the date when
Party B applies for Party A’s inspection after making the corrections shall be
the actual Completion Date.

32.5
If Party A fails to organize the inspection and acceptance within 28 days after
receiving the completion and acceptance report submitted by Party B, Party A
shall assume the liabilities for the project keeping and all the accidents as of
the 29th day.

32.6
The scope and completion date for the intermediate works shall be specified in
the Special Terms and Conditions by the two Parties, and the inspection and
acceptance procedures thereof shall be handled according to the provisions from
Article 32.1 to 32.4 of the General Terms and Conditions herein.

32.7
Under certain special occasions, if Party A requires the Project generally
completed while leaving certain single works or part of the Project in progress,
the two Parties shall conclude a separate agreement to specify the two Parties’
responsibilities and the payment terms of the project price under such
situation.

32.8
If the Project is not inspected or is not accepted, Party A shall not put the
Project into operation.  If Party A forcibly puts the Project into operation,
Party A shall be liable for all the quality problems and other problems arising
therefrom.

 
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33.
Final Settlement

33.1
Party B shall deliver a final settlement report and a complete set of settlement
documents to Party A within 28 days after Party A recognizes the final
settlement report on the project completion and acceptance, and the two Parties
shall make relevant adjustment according to the Contract Price stipulated in the
Agreement and the Contract Price stipulated in the Special Terms and Conditions
to conduct the final settlement on the Project.

33.2
Party A shall verify the documents, give a confirmation or modification comment
within 28 days after Party A receives the final settlement report and the
settlement documents on the project completion and acceptance submitted by Party
B.   After confirming the final settlement report, Party A shall notify the
administering bank to pay the settlement price for the project completion to
Party B.  Party B shall deliver the completed Project to Party A within 14 days
after receiving the settlement price for the completion.

33.3
If Party A fails to pay the settlement price for the project completion without
justified reasons within 28 days after receiving the final settlement report and
the settlement documents on the project completion, Party A shall pay the
interest for the overdue project price owed to Party B based on Party B’s loan
rate of the same term toward the bank from the 29th day and shall be liable for
the breach of contract.

33.4
If Party A fails to pay the settlement price for the project completion within
28 days after receiving the final settlement report and the settlement documents
on the project completion, Party B may demand payment of the settlement price
from Party A.  If Party A still fails to pay within 56 days after receiving the
settlement report and the settlement documents, Party B may consult with Party A
to liquidate the project, or may also petition the People’s Court to auction the
Project, and Party B shall be paid in priority out of the proceeds from such
liquidation or auction of the Project.

33.5
If Party B fails to deliver the final settlement report and a complete set of
settlement documents to Party A within 28 days after the final settlement report
being recognized by Party A, which causes the final settlement of the Project
cannot be normally conducted or causes the settlement price for the project
completion cannot be paid timely, Party B shall deliver the Project as so
required by Party A. If Party A does not require the delivery of Project, Party
B shall be liable for keeping the Project.

33.6
If Party A and Party B have any dispute over the settlement price for the
project completion, such dispute shall be settled according to Article 37 of the
General Terms and Conditions.

 
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34.
Quality Warranty

34.1
Party B shall assume the quality warranty liabilities for the Project delivered
to Party A for use within the quality warranty period according to the laws,
regulations or other national rules in respect to the project quality warranty.

34.2
Implementation on the Quality Warranty Work. Before the inspection and
acceptance of the Project, Party B shall sign with Party A a quality warranty
agreement which shall be an annex attached hereto.

34.3
The quality warranty agreement shall cover the following items:

 
(1)
The content, items and scope of the quality warranty;

 
(2)
The quality warranty period;

 
(3)
The quality warranty liabilities; and

 
(4)
The payment schedule of the quality warranty bond.

Section Ten Breach of Contract, Claims and Dispute

35.
Breach of Contract

35.1
The following events shall constitute Party A’s breach of contract:

(1)
Party A fails to pay the prepayment timely as prescribed in Article 24 of the
General Terms and Conditions;

(2)
Party A fails to pay the project price according to the Contract as prescribed
in Article 26.4 of the General Terms and Conditions, which causes the
construction cannot be conducted;

(3)
Party A fails to pay the settlement price for the project completion without
justified reasons as prescribed in Article 33.3 of the General Terms and
Conditions; and

(4)
Other events under which Party A fails to perform the obligations under the
Contract or its performance fails to satisfy the terms of the Contract.

Party A shall be liable for the breach of contract, compensate Party B’s losses
incurred therefrom, and the Construction Period shall be extended
accordingly.  The calculation method of the damages compensation borne by Party
A toward Party B or the amount or calculation method of the liquidated damages
which shall be paid by Party A, shall be specified in the Special Terms and
Conditions by the two Parties.

 
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35.2
The following events shall constitute Party B’s breach of contract:

(1)
Due to Party B’s reason, the construction cannot be completed in compliance with
the Completion Date as agreed in the Agreement or in compliance with the
extended construction schedule agreed by the Engineer, as prescribed in Article
14.2 of the General Terms and Conditions;

(2)
Due to Party B’s reason, the Project cannot reach the agreed quality standard,
as prescribed in Article 15.1 of the General Terms and Conditions;

(3)
Other events under which Party B fails to perform the obligations under the
Contract or its performance fails to satisfy the terms of the Contract.

Party B shall be liable for the breach of contract, compensate Party A’s losses
incurred therefrom.  The calculation method of the damages compensation borne by
Party B toward Party A or the amount or calculation method of the liquidated
damages which shall be paid by Party B, shall be specified in the Special Terms
and Conditions by the two Parties.

35.3
Where one Party has any breach of contract and the counter Party require the
breaching Party to continue performing the Contract, the breaching Party shall
continue to perform the Contract as well after assuming the abovementioned
liabilities for breach of contract.

36.
Claims

36.1
When one Party raises any claim against the counter party, it shall have
justified grounds for the claim and effective evidences at time of raising the
claim.

36.2
If Party A fails to perform any obligations in accordance with the Contract or
makes any mistakes or other events happen under which Party A shall be liable
for, which results in the delay of the Construction Period, and/or causes Party
B cannot obtain the Contract Price timely and causes Party B to suffer other
losses, Party B may claim against Party A in Written Form according to the
following procedures:

(1)
It shall issue a notice of claim intention to the Engineer within 28 days after
the claim event happens;

(2)
It shall apply to extend the Construction Period with the Engineer and/or
provide a claim report on economical compensations as well as other relevant
materials to the Engineer within 28 days after issuing the notice of claim
intention;

(3)
The Engineer shall give response or require Party B to further complement the
grounds for claim and evidences within 28 days after receiving the claim report
and other relevant materials delivered by Party B;

 
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(4)
If the Engineer fails to give any response or fails to make any further
requirement on Party B within 28 days after receiving the claim report and other
relevant materials delivered by Party B, such claim shall be deemed to have been
recognized;

(5)
When the claim event keeps going on, Party B shall provide the claim reports by
stage, and shall deliver relevant materials of the claim and the final claim
report to the Engineer within 28 days after the claim event ends.  The response
procedures of the claim shall be the same with the procedures prescribed in with
above (3) and (4).

36.3
If Party B fails to perform any obligations in accordance with the Contract or
makes any mistakes, which causes any losses to Party A, Party A may claim
against Party B within the time limit prescribed in Article 36.2.

37.
Dispute

37.1
If any dispute arises from Party A and Party B’s performance of the Contract,
such dispute shall be settled by mutual negotiations or the Parties may require
the competent authority to mediate.  If the two Parties are not willing to seek
the reconciliation and mediation, or if the reconciliation and mediation fail,
the two Parties may choose one of the following methods to settle the dispute
which shall be specified in the Special Terms and Conditions:

First Option: the two Parties reach an arbitration agreement to apply for
arbitration with the agreed arbitration committee;

Second Option: To file a law suit with the competent People’s Court.

37.2
If any dispute arises, the two Parties shall continue to perform the Contract,
keep the construction and well protect the completed works, except under the
following situations:

(1)
One Party’s unilateral breach of contract which lead the Contract cannot be
performed, and the two Parties agrees to suspend the construction;

(2)
The construction suspension is required by the mediation and is accepted by the
two Parties;

(3)
The arbitration committee requires the construction suspension; and

(4)
The court requires the construction suspension.

 
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Section Eleven Miscellaneous

38.
Subcontracting of the Project

38.1
Party B shall subcontract part of the Project according to the provisions of the
Special Terms and Conditions and shall sign a subcontracting agreement with the
subcontractor.

38.2
Party B shall not assign the whole Project to any others.

38.3
The subcontracting of the Project shall not terminate Party B’s any liabilities
and obligations.  Party B shall dispatch relevant managers to the site of the
subcontracting project to ensure the performance of this Contract.  Party B
shall bear joint liabilities for the subcontractor’s any breach of contract or
negligence which results in the damage to the Project or causes other losses to
Party A.

38.4
The price of the subcontracting project shall be settled between Party B and its
subcontractors.  Party A shall not pay any project price to the subcontractor in
any form without Party B’s permission.

39.
Force Majeure

39.1
The events of Force Majeure shall include the war, turmoil, the fall of the
flying object or the explosion and fire which Party A and Party B shall not be
liable for, and the wind, rain, snow, flood, quake and other natural disasters
as agreed in the Special Terms and Conditions.

39.2
After any event of Force Majeure occurs, Party B shall notify the Engineer at
once and shall promptly take measures to the full extent of its capability to
reduce the losses as much as possible, Party A shall assist Party B to take such
measures.  If the Engineer regards the construction shall be suspended, Party B
shall suspend the construction. Party B shall report the impairment and the
damage, the estimated clearing and recovery Expenses to Engineer within 48 hours
after the force majeure vanishes.  If the force majeure keeps going on, Party B
shall report the impairment and the damage to the Engineer every 7 days, and
Party B shall submit a formal report and relevant materials on the estimated
clearing and recovery Expenses to the Engineer within 14 days after the force
majeure vanishes.

39.3
The Expenses and the delayed Construction Period arising from the force majeure
shall be assumed or handled respectively by the two Parties according to the
following methods:

 
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(1)
Party A shall be responsible for the damage to the Project itself, the third
party’s casualties and property losses which are caused by the damage to the
Project, and the damage to the materials and equipment transported to the
Construction Site for construction or installation;

(2)
Party A and Party B shall be respectively responsible for their own casualties
and respectively bear correspondingly Expenses;

(3)
Party B shall be responsible for the damage to its machinery and equipment, as
well as the Expenses for suspension of work;

(4)
During the suspension of the Construction, Party A shall be responsible for the
Expenses of necessary managers and security guards left by Party B to the
Construction Site according to the Engineer’s requirement;

(5)
Party A shall be responsible for the clearing and recovery Expenses required for
the Project; and

(6)
The delayed Construction Period shall be extended accordingly.

39.4
If an event of force majeure occurs after the Party’s delay in performance of
the Contract, it shall not be exempted from such liability.

40.
Insurance

40.1
Before the construction commences, Party B shall be responsible for purchasing
the insurance for the life and property of its own staff and the third party’s
staff for the construction engineering and within the Construction Site, and
Party B shall pay the insurance premium.

40.2
Party B shall be responsible for purchasing the insurance for the materials and
equipment transported to the Construction Site for construction and
installation, and Party B shall pay the insurance premium.

40.3
Party B may entrust Party A to handle relevant insurance matters, and Party B
shall bear relevant Expenses.

40.4
Party B must purchase the accident insurance for the staff engaging in dangerous
work, and purchase insurance for the life and property of its own staff on the
Construction Site as well as for the machinery and equipment for construction,
and Party B shall pay the insurance premium.

40.5
When an insured incident occurs, Party A and Party B shall endeavor to to take
necessary measures to prevent or reduce the losses.

 
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40.6
The details of the insurance and relevant liabilities shall be specified in the
Special Terms and Conditions by the two Parties.

41.
Security

41.1
The following securities shall be mutually provided by Party A and Party B to
ensure the full performance of the Contract:

(1)
Party A shall provide a performance bond to Party B, to pay the project price
according to the Contract and to perform its other obligations under the
Contract.

(2)
Party B shall provide a performance bond to Party A, to perform its obligations
under the Contract.

41.2
Where using the patent and knowhow without any authorization which infringes
other party’s patent right, the responsible Party shall assume the corresponding
liabilities.

42.
(no wording)

43.
Cultural Relics and Underground Obstacle

43.1
If any ancient tomb, ancient architecture relics, cultural relics, fossil, and
other articles worthy of archaeological study and geological study is discovered
during the construction, Party B shall keep the scene intact at once and report
to the Engineer within 4 hours in Written Form; the Engineer shall report to the
local competent department for cultural relics administration within 24 hours
after receiving the written notice and Party A and Party B shall take
appropriate protection measures according to the requirement of the competent
department for cultural relics administration; and Party A shall bear the
Expenses arising therefrom and the delayed Construction Period shall be extended
accordingly.

If concealed and unreported after the discovery which results the damage to the
cultural relics, the responsible Party shall assume corresponding liabilities
according to the law.

43.2
If any underground obstacle which affects the construction is discovered during
the construction, Party B shall notify the Engineer within 8 hours in Written
Form and shall bring forward a disposal method at the same time; the Engineer
shall confirm or provide any modifications within 24 hours after receiving the
disposal method.  Party A shall bear the Expenses arising therefrom and the
delayed Construction Period shall be extended accordingly.

 
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If the underground obstacle discovered belongs to certain unit, Party A shall
report to relevant department for coordination and disposal.

44.
Termination of Contract

44.1
Party A and Party B may reach a consensus through consultation to terminate this
Contract.

44.2
Under the event as prescribed in Article 26.4 of the General Terms and
Conditions, Party A still fails to pay the project price (progress payment) when
the suspension of construction exceeds 56 days, Party B is entitled to terminate
this Contract.

44.3
If the forbidden event prescribed in Article 38.2 of the General Terms and
Conditions occurs, Party B assigns the total Project to the other party or Party
B divides the whole Project into several parts and separately subcontracts each
part to the other Party under the guise of sub-contracting, Party A is entitled
to terminate this Contract.

44.4
Party A or Party B may terminate this Contract under the following situations;

(1)
It is unable to perform the Contract due to the force majeure; and

(2)
It is unable to perform the Contract due to one Party’s breach of contract
(including the suspension or delay of the construction due to Party A’s reason).

44.5
If one Party requires terminating the Contract according to Article 44.2, 44.3
and 44.4, it shall issue a termination notice to the counter Party in Written
Form and shall inform the counter Party 7 days prior to issuing such notice; and
the Contract shall be terminated upon the receipt of the notice by the counter
Party.  If there is any objection to the termination of the Contract, it shall
be settled according to Article 37 of the General Terms and Conditions.

44.6
After the Contract is terminated, Party B shall properly protect and deliver the
completed works and the purchased materials and equipment, and shall remove its
own machinery, machinery and staff from the Construction Site according to Party
A’s requirement.  Party A shall provide necessary conditions for Party B’s
withdrawal out of the project site, shall pay relevant Expenses arising
therefrom and shall pay the price for the completed works according to the
Contract.  For the materials and equipment already ordered, the ordering party
shall be responsible for cancelling the orders or terminate the order contract,
Party A shall bear the un-refundable payments for goods and the Expenses arising
from the termination of the order contract, the responsible party shall bear the
losses arising from the untimely cancellation of the orders.  In addition, the
Party at fault shall compensate the losses incurred therefrom to the counter
party.

 
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44.7
After the Contract is terminated, the validity of provisions that related to the
final settlement and winding-up shall not be affected.

45.
Effeteness and Termination

45.1
The two Parties shall stipulate the conditions to make the Contract effective in
the Agreement.

45.2
Except Article 34 of the General Terms and Conditions, this Contract shall be
terminated upon Party A and Party B fulfill all the obligations under the
Contract, the settlement price for the completion is paid off and Party B
delivers the completed Project to Party A.

45.3
After the termination of the rights and obligations under the contract, Party A
and Party B shall observe the principle of honesty and good faith and shall
perform the obligations of notification, assistance and confidentiality, etc.

46.
Counterpart of the Contract

46.1
This Contract has two original copies which shall have the same legal effect,
for Party A and Party B each to keep one original.

46.2
The number of duplicates of this Contract shall be specified in the Special
Terms and Conditions by the two Parties.

47.
Supplementary Provision

After mutual negotiations, the two Parties may further elaborate, supplement or
modify this General Terms and Conditions based on relevant laws and regulations
and by taking into account the actual works, which shall be specified in the
Special Terms and Conditions.

 
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Part Three Particular Terms
 
Section 1 Word Definitions and Contract Documents
 
1.
Contract Documents

1.1
Composition of Contract Documents

1.1.1
The Contract Agreement

1.1.2
The Special Terms and Conditions of this Contract

1.1.3
The General Terms and Conditions of this Contract

1.1.4
Standard, Specification and Relevant Technical Documents

1.1.5
Drawings

2.
Explanation Order for the Contract Documents

(1).
EPC Contract

(2).
The Contract Agreement

(3).
Particular Terms of Contract

(4).
General Terms of Contract

(5).
Technology Appendixes of EPC Contract

(6).
Design Documents of the Project

(7).
Equipment Supply of the Project

(8).
Other Charges of the Project

(9).
Standards, norms and related technical documents

(10).
Drawings

(11).
Works in the List

(12).
During the performance of Contract, the negotiation, modification and other
written agreements or documents in respect of the project shall be deemed as
part of this Contract.

3.
Language and the Application of Laws, Standards and Norms

3.1 If any other languages used in this Contract except Chinese: NONE.
3.2 Applicable Laws and Regulations
Need explicit laws, administrative regulations: NONE.
3.3 Applicable Standards and Norms
Name of the applicable standards and norms: the relevant Technical Appendixes,
the existing national standards and norms, acceptance standards, the industry
technical regulations and acceptance standards, see more details about the other
technical requirements and standards on the construction Drawings.
Standards and norms offered by Party A: the standards, norms and acceptance
standards in the place of Party A shall be offered free of charge.

4.
Drawings

4.1 The date of delivery for Drawings and the number of copies: The date of
delivery for Drawings and the number of copies are prescribed in the Technical
Appendixes of EPC Contract.

 
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Party B’s confidential requirements for the Drawings: This project is designed
by Party A, so the Drawings shall not be transferred, copied or used in other
items.
Requirements for using foreign Drawings and the charges: NONE.
 
Section Two General Rights and Obligations of Both Parties
 
5.
Engineer

5.1 Engineers assigned by construction supervising units
Name: entrusted by Party A Position: entrusted by Party A
The functions and powers entrusted by Party A: project supervision during the
construction and warranty period within the scope of construction, including
construction quality, safety, construction work period, construction investment
control, and fulfillment of Contract and construction coordination, etc.
The functions and powers that shall be approved by Party A: the signature of
documents in relation with the payment of construction charges, extension of
time for completion, design alteration and increase of investment.
5.2 Engineers assigned by Party A
Name: entrusted by Party A Position: entrusted by Party A
The functions and powers: exercise of power on behalf of Party A.
5.3 Without construction supervision, the functions and powers of engineer:
NONE.

6.
Project manager

Name: appointed by Party B Position: appointed by Party B

7.
Work to be done by Party A

7.1 Party A shall complete the following works according to the agreed time and
requirements:
(1) The construction conditions that the construction site shall meet and the
completion time: The construction site shall be connected to water and electric
power supplies and roads, and that the ground is leveled 7 days before the
project is begun.
(2) The time, place and supply requirements for connecting the lines for supply
of water, electricity and telecommunication necessary to the construction work
into the Site: Party A shall connect the lines for supply of water, electricity
from the place near the Site according to the construction requirements of Party
B 7 days before the project is begun.
(3) The time and requirements for making available the roadways from the Site to
the public roads: The roadways shall be made available 7 days before the project
is begun to ensure the construction and traffic conditions.
(4) The time for providing the geologic and underground pipeline information of
the Site: Party A shall provide such information in written form 7 days before
the project is begun, and be responsible for the truthfulness and accuracy of
such information.
(5) Names of the approvals and permits necessary to the construction works that
should be conducted by Party A and the completion time: Such approvals and
permits shall be conducted before the project is begun in accordance with the
section (5) of article 8.1 in the general terms of this Contract.

 
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(6) The requirements for the delivery and examination of the benchmark and
Cartesian point of control: Such requirements shall be submitted in Written Form
7 days before Party B begin to work for an on-the-spot delivery and examination.
(7) The time for examining the Drawings and delivering the design
classification: Such examination and delivery shall be done 7 days before the
project is begun.
(8) Coordinate the work with respect to the protection of the underground
pipelines near the Site, the adjacent buildings and structures (including
preserved cultural relics) and ancient or precious trees: According to the real
situation on the spot, Party A may make a consultation with Party B if the
protection work shall be done, and the charges shall be borne by Party A.
(9) Other works to be done by Party A agreed by both parties: Party A shall
offer temporary office to Party B without being paid.
7.2 The works entrusted by Party A to Party B: NONE.

8.
Work to be done by Party B

8.1 Party B shall complete the following works according to the agreed time and
requirements:
(1) The time for the delivery of design documents completed by Party B who has
obtained the relevant qualification certificate and the eligible business scope:
In accordance with the construction schedule, Party B shall provide the
construction Drawings (see more details in the Sub-contract of Project Design)
to Party A 7 days before the project is begun. The Drawings shall be examined
and the design shall be delivered according to section 7.1 in this Contract.
(2) The time for submitting the schedule and statistics and their names: It
shall be implemented according to the relevant stipulations of Supervisor. The
completed progress statistics of the current month and the progress schedule of
the next month shall be submitted to the construction supervision unit in 3
copies before the 23rd of every month, and the fund using plan of the next month
also shall be submitted before the 18th of every month.
(3) The responsibilities and requirements for bearing safety guard and the
lighting or other facilities used in daytime: It shall be implemented according
to Article 9.1(3) in the General Terms of this Contract. The safety guard and
protection shall be carried out in accordance with the construction organization
design approved by Party A which is examined by general supervisor.
(4) The requirements for the office and living house provided by Party A: NONE.
(5) The relevant formalities of transportation, noise, environmental protection
and safety of construction on the Site that shall be completed by Party B: It
shall be completed after the move-in according to the relevant specific
requirements for the formalities through both parties’ consultation.
(6) The special requirements for the finished parts of the completed project and
its charges: It shall be implemented according to Article 9.1(6) in the General
Terms of this Contract. Party A shall be responsible for the protection work of
the finished parts after the delivery, if any damages occurred, it shall be
repaired by Party B, however, the charges shall be borne by Party A.

 
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(7) The protection requirements for the underground pipelines near the Site, the
adjacent buildings and structures (including preserved cultural relics) and
ancient or precious trees and the charges: According to the real situation on
the spot, Party B shall prepare the protection measures if the protection work
shall be done, after the approval of general supervisor, the protection work
shall be implemented by Party B and the charges shall be borne by Party A.
 
Section 3 Construction Organization Design and Project Period
 
9.
Progress Schedule

9.1 The time for Party B providing the construction organization design
(Construction Plan) and the progress schedule: 5 days before the project is
begun.
The time for engineer confirming: Reply within 5 days after receiving the
construction organization design and the progress schedule submitted by Party B.
9.2 The requirements for the progress schedule of mass construction project:
NONE.

10.
Delay in Project Period

10.1 Other terms for the delay in project period agreed by both parties: NONE.
 
Section 4 Quality and Inspection
 
11. 
Concealed Work and Intermediate Inspection

11.1
The point for intermediate inspection agreed by both parties: It shall be
implemented according to Article 17 of the general terms hereof, the inspection
point shall be determined by the supervisor.

12.
Trial Run

12.1 The charges for trial run: The trial run shall be organized by Party A with
the coordination of Party B. See more details in the Technical Appendixes of EPC
Contract.
 
Section 5 Contract Price and Payment
 
13.
Contract Price and Adjustment

13.1 The contract price is determined in the form of a fixed price.
(1) The Contract is a fixed price contract. The contract price covers the
following risk aspects: Including the acquisition and supply of engineering
materials, construction equipments, working measures, labor services,
administration, maintenance, insurance, profits, taxes, design changes caused by
Party B’s reason and the changes of real work quantities.
14.
The computing method for risk charges: NONE.

The adjustment method for the contract price without the risk scope: No
adjustments.
15.
Payment of construction costs (progress payment)

The payment shall be performed according to the stipulations of EPC Contract.

 
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Section 6 Supply of Materials and Equipments
 
16. Materials and equipments supplied by Party A: NONE.
17. Settlement method for the materials and equipments supplied by Party A:
NONE.
18. Materials and Equipments purchased by Party B
18.1 Agreements for Party B purchasing materials and equipments: The agreements
for the supply of equipments are prescribed in Equipments Supply Contract, the
relevant instructions, technical guidance for installation and other technical
documents of the equipments purchased by Party B shall be provided, all the
materials shall be supplied by Party B, the requirements for the supply shall be
implemented according to the Article 28 of general terms.
 
Section 7 Changes of the Project
 
19. Modification of the Design
19.1 Agreements for Party A changing the original design of the Project in the
course of construction: consultation between the two parties.
19.2 Agreements for Party B changing the original design of the Project in the
course of construction: consultation between the two parties.

20. Confirmation of Changes in the Contract Price
20.1 Confirmation of changes in the contract price and agreements for the
methods: If the changes are caused by Party A’s reason within the contract
scope, Party B shall provide a report on changing the Contract Price within 14
days after the changes of the Project are decided, and after confirmation by the
Engineers, adjustment shall be made to the Contract Price.
 
Section 8 Inspection for Completion and Settlement
 
21. Test on Completion
21.1 Agreements for Party B providing as-built Drawings: See Technical
Appendixes of EPC Contract.
21.2 The scope of mid-way delivered project and its completion date: NONE.
 
Section 9 Breach and Compensation
 
22. Breach
22.1 The specific liability for Party A’s breach of contract in this Contract is
as follows:
The liability for breach of contract shall be borne by Party A agreed in 26.4
section of general terms in this Contract: It shall be implemented according to
26.4 section of general terms in this Contract.
Party A’s other liability for breach of contract agreed by both parties: It
shall be implemented according to the EPC Contract.
22.2 The specific liability for Party B’s breach of contract in this Contract is
as follows:
The liability for breach of contract shall be borne by Party B agreed in 14.2
section of general terms in this Contract: It shall be implemented according to
EPC Contract.

 
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The liability for breach of contract shall be borne by Party B agreed in 15.1
section of general terms in this Contract: It shall be implemented according to
the EPC Contract.

23. Disputes
23.1 Both parties agree as follows, when disputes arise during the performance
of Contract:

 ( 1 ) After the consultation between both parties, the disputes may be mediated
by supervising engineer.

 ( 2 ) Agree to initiate a lawsuit to the People’s Court of competent
jurisdiction where the Project hereunder is located.
 
Section 10 Other Terms
 
24.
Sub-Contractor

24.1
Part of the Project that Party A approves to sub-contract: If the Project is
really necessary to be sub-contracted, the subcontractor shall be determined by
tender.

25.
Force Majeure

25.1
Agreements for force majeure: Force majeure includes earthquake, strong wind,
heavy rain, hot weather, sub-zero weather and flood that cause disaster and
affect construction, which are affirmed by the relevant department of local
government.

26.
Insurance

26.1 The insurance coverage agreed by both parties is as follows:

 ( 1 ) Insurance coverage of Party A: It is effected by Party A.
        
         Insurance items that Party A entrusts Party B to effect: NONE.

 ( 2 ) Insurance coverage of Party B: It is effected by Party B.

27.
Guarantee

27.1 The guarantee items agreed by both parties are as follows:

 ( 1 ) Party A offers performance guarantee to Party B, the guarantee mode is as
follows:
 
No Contract of guaranty as the attachment of this Contract

 ( 2 ) Party B offers performance guarantee to Party A, the guarantee mode is as
follows:
 
No Contract of guaranty as the attachment of this Contract
 
 ( 3 ) Other guarantee items agreed by both parties: NONE.

 
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28.
Counterparts of this Contract

28.1
The counterparts agreed by both parties: The Contract has 2 original
counterparts, one for each party. There are totally 8 copies, four for each
party.

29.
Supplementary Provisions

29.1 Party B shall be responsible for providing the labor and materials of this
Project, and the construction is contracted in total price including fees for
installation.
29.2 If any staff, equipment accident occurred in the course of construction,
distinguishing right from wrong, the responsible party shall be liable for the
damages; Party A may provide convenience in respect of medical assistance.
29.3 Party B shall make safety education to the move-in personals, and be
responsible for their safety.
29.4 Other matters not covered in this Contract shall be settled through
consultation of both parties.

 
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Attachment：
Construction Quality Warranty Agreement

Party A (full name): Henan Shuncheng Group Coal Coke Co., Ltd
Party B (full name): Ji Gang Group International Engineering Company Limited

To ensure the normal operation of 160T/H CDQ Project of Henan Shuncheng Group
(Project Name) within a reasonable period of time, both parties hereby sign this
Construction Quality Warranty Agreement through consultation. Party B shall bear
the responsibilities for construction quality warranty within the quality
warranty period in accordance with the relevant administrative provisions and
the terms and conditions agreed by both parties.
 
Article 1 Scope and Content of Warranty
 
Covered damages under warranty shall include ground base and foundation
engineering, framework, roofing waterproof work, other civil engineering works
agreed by parties, installation electrical pipe system and water pipe and drain
system, and heating and cooling system. The specific warranty scope agreed by
both parties is as follows:
The scope and content of warranty is in line with the scope and content of
construction contracting.
 
Article 2 Length of Warranty
 
The warranty period shall commence from the date that the construction project
passes the trial run with load. In case the final acceptance of each project is
carried out individually, then accordingly, the warranty period shall be
calculated individually.

Both parties agree on the following warranty period in respect to the specific
project referring to the provisions of the relevant regulations issued by the
State.
1.
For civil engineering works, the quality warranty period shall be 2 years,

2.
For installation of electrical pipe system, water pipe and drain system and
equipments, the quality warranty period shall be 2 years,

3.
For heating and cooling system, the quality warranty period shall be 2 heating
periods and 2 air-conditioning periods,

4.
For the outside water-wastewater system, common roads construction work and
other municipal public projects, the quality warranty period shall be 2 years,

5.
For the roofing waterproof works, and leak prevention of the toilets, rooms and
outside walls that should be waterproofed, the quality warranty period shall be
2 years.

6.
Other terms:

 
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For framework and ground base and foundation engineering, the quality warranty
period shall be the number of years of reasonable use of the project.
 
Article 3 Liabilities of Quality Warranty
 
1.
For the items which belonging to warranty scope, Party A shall send maintenance
worker to repair within 7 days after receiving such repair notice.

2.
In case any emergency repair happens (such as water escape of the water pipe
system, water and gas leakage of the heating system, gas leakage of fuel gas
system), Party B shall arrive the scene of accident within 24 hours after
receiving notice. If the accident is not caused by Party B's construction
quality, the repair fees shall be borne by Party A.

3.
Within the reasonable period of use stipulated by the state, Party B shall
ensure the quality of ground base and foundation engineering and framework.
Party B shall bear liabilities for compensation of personal injuries or property
damage caused by the construction and attributed to Party B’ fault within the
reasonable period of use.

 
Article 4 Return of Warranty Deposit
 
Party A shall return the warranty deposit to Party B in a lump sum without any
interests within 14 days after the construction has been completed and put into
production for one year.
 
Article 5 Others
 
Other items related with construction quality warranty: NONE.

 
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160T/H CDQ Project of Henan Shuncheng Group

Sub-Contract D: Technical Service

Contract No.: SC20090628               (Party A)
Contract No.: WZ0904                      (Party B)
Party A: Henan Shuncheng Group Coal Coke Co., Ltd
Party B: Ji Gang Group International Engineering Company Limited
 
Date: June, 2009

 
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Party A: Henan Shuncheng Group Coal Coke Co., Ltd
Party B: Ji Gang Group International Engineering Company Limited

Party A entrusts Party B to undertake the technical service for the 160T/H CDQ
Project of Henan Shuncheng Group and the location for the Project is in Anyang
City, Henan. After friendly consultation, the Parties hereby sign this contract
as follows.
 
Article 1 Basis for the Conclusion of This Contract
 
1. The Contract Law of the People’s Republic of China; The Construction Law of
the People’s Republic of China; Regulations on the Administration of the Market
for Survey and Design of Engineering Construction.
2. National and local rules and regulations on the administration of the market
for survey and design of engineering construction.
3. Approval documents of the engineering construction.
 
Article 2 Priority of the Contractual Documents
 
The several documents forming the Contract are to be taken as mutually
explanatory of one another, but in case of ambiguities or discrepancies, the EPC
Contract and general principles of the related state laws and regulations shall
prevail. After the signature of both parties, in case any time discrepancy
between this Contract and the documents with the same name or nature, it shall
be determined by the signing time of such documents, the priority shall be given
to the latest one. During the performance of this Contract, the alteration,
revision and amendment of this Contract shall be the integral part of this
Contract after its being signed by the parties.
 
Article 3 Name of this project and content of technical services
 
1.
Name: 160T/H CDQ of Henan Shuncheng Group

2.
Content: See the Technical Appendix VIII of EPC Contract

 
Article 4 Contract Price and Payment
 
1.
The contract price for the services hereunder shall be RMB 6,000,000 Yuan (SIX
MILLION YUAN ONLY).

2.
The charges shall be paid to Party B according to the stipulations of EPC
Contract.

 
Article 5 Responsibilities of the Parties
 
1.
Responsibilities of Party A

1.1
Party A shall submit the design materials stipulated herein to Party B within
the time limit and ensure the completeness and accuracy of such materials.

 
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1.2
Party A shall ensure that the project funds should be put in the right place
timely according to the requirements of EPC Contract.

1.3
Party A shall arrange qualified personnel to be trained in accordance with the
requirements for trainees proposed by Party B.

2.
Responsibilities of Party B

2.1
Party B shall offer the technical guidance and services to Party A according to
the content prescribed in the Technical Appendix of EPC Contract and shall be
responsible for the quality and completeness of the services.

2.2
Party A shall offer conveniences in aspects of working, living and traffic to
the onsite personnel arranged by Party B. However, the charges for such
conveniences shall be borne by Party B.

 
Article 6 Confidentiality
 
Both Parties shall protect each other’s intellectual property rights. Without
prior consent, neither party can unilaterally revise, reproduce or transfer to a
third party or use for the project other than the Project of this Contract any
materials and documents of the other party. Under such circumstances, the
disclosing party shall be responsible for all the any consequence resulting
therefrom and shall bear the relevant compensation.
 
Article 7 Miscellaneous
 
1.
Service provided by Party A for the Project in this Contract will be concluded
until the final acceptance after test on construction completion.

2.
Any other service, which Party A entrusts Party B to provide, however, out of
the scope of the Contract, shall be paid correspondingly.

3.
During the quality guarantee period, Party B shall dispatch its personnel to
handle the onsite technical failures within 48 hours upon receiving the request
of Party A.

4.
For any failure to perform any term or condition of this Contract due to the
force majeure, both parties shall, in good faith, attempt to settle it amicably
and by mutual agreement.

5.
If any disputes arise during the performance of this Contract, it shall be
settled by friendly consultation of the parties. In case the disputes can not be
settled by consultation, both parties agree to bring the disputes to the
people's court at the place of their implementation.

6.
As for matters not covered in this Contract, it shall be determined through
consultation, and written agreement shall be concluded and shall be implemented
as the attachment of this Contract.

7.
The Contract is effective once after both parties stamped and signed. And the
Contract shall be terminated after both parties have performed all the
obligations prescribed in this Contract. The Contract is in four (4) originals.
One for each party. There are totally 8 copies of the Contract, four for each
party.

 
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