Dragon Acquisition Corporation - Exhibit 10.17 - Filed by newsfilecorp.com






Exhibit 10.17 

(English Translation) 

 

Construction contract of construction project 

(GF——1999——0201) 

 

 

 

Longhai International 




Part One 
Agreement 

	Employers (full name): 	Weihai Economic & Technology
      Development Zone Longhai Properties Co., Ltd. 
	Contractor (full name): 	Shanghai Baogang Construction
      Engineering Corporation (Group) 


Both parties agreed on the project terms and signed a contract,
which is according to “Contract Law of the People’s Republic of China”,
“CONSTRUCTION LAW OF THE PEOPLES REPUBLIC OF CHINA” and Other relevant laws and
administrative regulations. 

On the basis of keeping to principle of equality, voluntary and
good faith: 

1. Project Overview 

	Name: 	Longhai International 
	Address: 	West of Qingdao Road and South of Bohai Road
  
	  	Economic & Technological Development Zone,
      Weihai City 
	Content: 	Crop Frame structures and building area is
      about 55,333 Square Meters 


The form of additional contractor business of the group
projection: (Annex 1) 
Approve Number: Wei NDRC audited No. 11 (2009)

Source of fund: Funds raising 

2. Scope of Construction 

Scope of Construction: Civil work, installation (drainage &
heavy-current engineering) and other projections received in the course.
Employers have the opportunity of bidding works, such as fire protection, Air
Conditioning and Intelligentization. Contractors have priority. 

3. Contract duration 

Commencement date: 3 days after contract date 
Completion
date: 
Total days: 450 days 

Control points of construction projects: Qualified Pile
Foundation should be finished within 2 months when the projects stated. Basement
should be finished within 2 months when Pile Foundation finished. Three-layer
cap should be finished within 45 days when Basement was finished. All the
projects should be finished before 14th Feb 2010. 

4. Quality Standards 

Construction Quality Standards: Qualified 

5. Contact Price 

	Amount (Capital): 	provisional estimate RMB 70 million Yuan 
	  	Subject to settling construction cost
  






6. Related files of contacts: 

This includes: 

	1) 	
      LOA

	2) 	
      Notification of award

	3) 	
      Form of Tender and its attachments

	4) 	
      Special terms and conditions of the contact

	5) 	
      General terms and conditions of the contact

	6) 	
      Standard specifications and relative files

	7) 	
      Blueprint

	8) 	
      Bill of Quantities

	9) 	
      Priced BOQ or Budget document



Some agreements or files are regarded as parts of the contract.
Such as, Contract in relation to the building project negotiations and
alterations and alterations, etc. 

7. Some words of the agreements are given the same definition
in the “General terms and Conditions” Part two. 

8. Contractors promise Employers that they will work and finish
the project in accordance with the terms of the contract. And they will also
assume the obligations still under guaranty. 

9. Contractors promise Employers that they will pay the price
and other sums based on the contract rate and payment within contract date. 

10. Execution of contract 

Time: 11th April 2009 
Address: Weihai Citiy 

The contract will take effect immediately after both parties’
sign which is defined by employers and contractors. 

	Employer: Weihai Economic & Technology 	Contactor: Shanghai Baogang Construction
      Engineering 
	Development Zone Longhai Properties Co., Ltd. 	Corporation (Group) (common seal) 
	(common seal) 	 
	  	 
	Legal Representative: 	Legal Representative: 
	Authorized person: 	Authorized person: 
	Tel: 	Tel: 
	Fax: 	Fax: 
	Deposit bank: 	Deposit bank: 
	Account Number: 	Account Number: 
	Postcode: 	Postcode: 


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Part Two 
General Conditions 


Definition of Terms and Contract Documents 

1) Definition of terms 

Following words should be given particular definitions based on
the types of the agreement. As well as some particular definitions in special
terms and conditions. 

1.1 General Conditions: It was set out on the basis of Laws and
Administrative Regulations and construction needs. 

1.2 Special terms and conditions: The clause is an addition to
or expansion of General Conditions and also is a consensus agreement on the
basis of Laws and Administrative Regulations, which is set out by employers and
contractors. 

1.3 Employer: Employer is a person who has the Right of
contract work and payment of the price. What's more, employer also means the
person named as such in this contract and the legal successors in title to such
person. 

1.4 Contractor: Contractor is a person who is accepted by
employer has the Right of contract work and also means the person named as such
in this contract and the legal successors in title to such person. 

1.5 Project Manager: Project manager is on behalf of
Construction Management and Contract Execution, which is set out according to
special terms and conditions. 

1.6 Design unit: It is a unit commissioned by employer which is
in charge of designing and also receiving certificates of Design. 

1.7 Surveillance unit: It is a unit commissioned by contractor
which is in charge of project supervision and receiving some certifications of
supervision project. 

1.8 Engineer: Engineer is a General supervision engineer
appointed by Surveillance Unit or a representation to fulfill a contract who is
appointed by employer. The identity and authority of him is appointed in the
agreement which is set out by employer and contractor. 

1.9 Project cost management department: It is the relevant
responsible department of the State Council, the department of construction
administration under the relevant people's governments at or above the country
level and its appointed cost management organization. 

1.10 Project: It means the project is within the scope of
agreement which is set out by employer and contractor. 

1.11 Contract Rate: According to agreement, employer should
give agreed payment to contractor when they have finished the project in time
and in good quality. 

1.12 Additional contract rate: If have some special situation
to add contract rate, when the employer confirm it, they will add rate in
according to Calculation Method of contract rate. 

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1.13 Rate: It means without contract rate, but it still should
be afford by employer or contractor. 

1.14 Duration: The total number of contract days includes legal
holidays on the basis of consensus agreement. 

1.15 Starting-date: The absolute or relative date when start to
construct on the basis of consensus agreement. 

1.16 Date of completion: The absolute or relative date when
contractor finish the project on the basis of consensus agreement. 

1.17 Blueprint: provided by employer or by contractor which is
approved by employer. It should fully satisfy the requirements for direct
construction (include all instructions and relevant files). 

1.18 Construction plant: It is a plant provided by employer
which is intended to be used as construction plant. Or other plant appointed in
the blueprint which is provided by employer. 

1.19 Written Form: "Written form" refers to a form such as a
written contractual agreement, letter, electronic data text (including a
telegram, telex, fax, electronic data exchange and e-mail) that can tangibly
express the contents contained therein. 

1.20 Default Responsibility: It means a party who fails to
perform his contractual obligations, or performs them in a manner which is not
in conformity with the agreed terms shall assume the responsibility. 

1.21 Claim: In the course of implementing this contract, if not
our own faults, the actual loss should be assumed by opponent. In addition, it
still have rights to get economic compensation and (or) postponed the project.


1.22 Force Majeure: Force Majeure as referred to in this
contract means unforeseeable, unavoidable and insurmountable objective
conditions. 

1.23 Hour or day: The time will be counted as hours according
to contract. We should begin computation from valid beginning (include rest
time). The time will be counted as days according to contract. It will be
counted from the next day not intraday. If the last day of the deadline is legal
holidays, the next day will be the actual last day except completion date. The
cut off time of the deadline is 24:00. 

2) Contract files and Explanation order for the contract
document 

2.1 Contract files should have mutual entailment and
Description. The sequence of composition and explanation is as follows but
special terms and conditions. 

	(1) 	
      Agreement of contract

	(2) 	
      Notification of award

	(3) 	
      Form of Tender and its attachments

	(4) 	
      Special terms and conditions

	(5) 	
      General Conditions

	(6) 	
      Standard Specifications and relevant technology
      documents

	(7) 	
      Blueprint

	(8) 	
      Bill of quantities



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Quotation sheet or budget statement 

In the performance of the contract, agreements or documents of
discussion and amendment under the contract is a part of the contract. 

2.2 When the contract is ambiguous or nonconformity, the
difficulty without any great influence should be resolved by consultation among
employer and contractor. Both sides still have rights to appoint supervising
engineer to show the explanation. If both sides do not agree with the
explanation or get the consensus agreement, we should resolve the difficulty
according to Article 37 of General Terms. 

3) Language & applicable legal, standard and norm


3.1 Language 

The contract is explained and written in Chinese. If Special
terms and conditions ask for using two more (include two) languages, Chinese is
the standard language for explaining the contract. In the minority district,
minority language can be used for explanation under negotiation by both sides.


3.2 Applicable laws and regulations 

The contract is apply to the state laws and administrative
regulations. Some need express and implied laws and administrative regulations
that should have to reach an agreement with both sides. 

3.3 Applicable standard & norm 

Some Names apply to state Standard and Norm under Special Terms
and Conditions. Some names without state Standard and Norm but apply to the laws
and regulations of the construction trade. Some names without state Standard and
Norm but apply to the laws and regulations of construction worksite. Employer
should provide a bipartite appointed Standard and Norm to Contractor in promised
time that is appointed in Special Terms and Conditions. 

If there are no relevant home Standard and Norm, Employer
should make requests of construction technique in promised time that is
appointed in Special Terms and Conditions. Contractor should offer the
construction technology in promised time. It could carry out once admitted by
employer. If employer asks for using aboard Standard and Norm, the Chinese
Translation also should be provided by employer. 

The cost of buying translation standard or installing
construction technology should be assumed by employer. 

4) Blueprint 

4.1 Employer should provide the blueprint to contractor
according to provided date and number sets. If the contractor is in need of
increasing the number sets of blueprint, employer should provide the copies to
contractor. The cost of copies should be assumed by employer. If employer has
confidentiality requirement, the requirement should be put forward in Special
Terms and Conditions and also the cost of it should be assumed by employer.
Contractor should fulfill an obligation of secrecy within a certain time. 

4.2 Contractor should not give the blueprint to the
3rd person without employer’s agreement. When contractor complete the warranty of engineering quality, all the blueprint should
return to employer except some blueprints for record-keeping.


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4.3 Employer should reserve a complete blueprint in job site
which is used for inspecting by engineer and concerned person. 

The Rights and Duties of both sides 

5) Engineer 

5.1 If it needs to carry out construction inspection, the
employer should provide the name, content and permissions of surveillance unit
to contractor in written form. 

5.2 The general supervision engineer which is appointed by
surveillance unit is called engineer in the contract. His name, duties and
rights are specified by both sides in Special Terms and Conditions. The engineer
should use the rights according to the agreed upon in the contract. The
requirements of engineer in the Special Terms and Conditions and the engineer
should be admitted by employer. 

5.3 The representation which is appointed by employer to
fulfill the contract in construction site is also called engineer. His name,
duties and rights are specified by employer in Special Terms and Conditions. But
the rights of him should not the same as the rights of supervision engineer. If
the rights of both sides are not clear, employer should make them clear and
notice contractor in written form. 

5.4 If something about influencing rights and obligations are
happened during the course of performance, the supervising engineer should treat
these matters with candor according to appointed rights in contract. If one side
has disagreement to it, both sides have to act according to the Article 37 of
the General Terms. 

5.5 The supervising engineer has no rights to relieve the
rights and obligations of contractor appointed in the contract. As well as there
are some explicit agreements in the contract and employer’s agreements. 

5.6 If it needs not to carry out construction inspection, the
engineer in the contract is the representation who is appointed by employer to
perform the contract in the construction site. The actual duties of him are
specified in the Special Terms and Conditions provided by employer in written
form. 

6) Appointment & Instruction of engineer 

6.1 The engineer has the right to appoint his representative to
exercise his rights and retract the appointment if necessary. No matter
appointment or revocation should notice contractor ahead of 7 days in written
form. The supervising engineer should give notice of the appointment or
revocation to contractor. Appointed Letter and withdrawal are regarded as
contract attachments. 

Any letters in written form sent by the representation of
engineer under a duty as authorized and by the engineer have the same effect. If
contractor disagree with his letters, the contractor have the rights to give
them to the engineer. And the engineer should make a confirmation. When there is
some wrong commands give by representative, the engineer should correct them.


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The other person appointed by employer has no rights to make
any commands, as well as engineer and his representative. 

6.2 The commands and information of engineer should be signed
by himself and submitted to project manager in written form. It will put into
effect when the manager signs his name on the feedback. If necessary, engineer
should give oral commands and confirm in written form within 48 hours.
Contractor should carry out the commands given by engineer. If the engineer
can’t give the written confirmation in time, contractor should ask for written
confirmation after 7 days when they get the oral commands. If the engineer
didn’t give the confirmation to contractor within 48 hours, contractor can think
that it has already be established. 

If contractor thinks the engineer’s commands aren’t reasonable,
the contractor should provide modifier written form to engineer within 24 hours.
The engineer should make a decision on amendment or carrying out primary
commands and inform contractor in written form. In urgent, if the engineer ask
for carrying out primary commands, the contractor should carry out without any
disagreement. The cost for increasing rate and loss which is by reason of wrong
commands should be assumed by employer. The delayed schedule will be postponed.


This rule is also applicable to the commands given by
representative of engineer. 

6.3 The engineer should provide instructions and perform the
obligations. If the delayed schedule were caused by engineer, the loss of
increasing rate and delay should be assumed by employer. And the employer should
compensate for the loss to contractor. The delayed schedule will be postponed.


6.4 Employer should provide written form notice to contractor
ahead of 7 days, if they ask for changing the engineer. The new engineer should
fulfill the obligation and powers of the former’s. 

7) Project Manager 

7.1 Name and duties of project manager will be specified in
Special Terms and Conditions. 

7.2 The notice according to contract given by contractor should
give to engineer when the project manager signs his name on it. It will be took
effect when the engineer receive it and sign his name on the feedback. 

7.3 Project manager and the engineer give instructions and
organize the construction according to planning and programming of project
construction (Scheme) admitted by employer and contract. In case of an emergency
or the engineer is out of reach, the project manager should take emergency
measures which are guarantee the safety of people, project and property. If it
is Employer’s or the third person’s responsibility, the loss should be assumed
by Employer. The delayed schedule will be postponed. If it is contractor’s
responsibility, the loss should assumed by contractor. The delayed schedule will
not be postponed. 

7.4 Contractor should provide written form notice to Employer
for the approval ahead of 7 days, if they ask for changing the project manager.
The new project manager should fulfill the obligation and powers of the
former’s. 

7.5 Employer has the rights to negotiate with contractor to
change the inefficient manager. 

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8) Job of Employer 

8.1 Employer should finish the following work within certain
time according to Special Terms and Conditions. 

(1) Tasks such as Land Acquisition. compensation for demolition
and field flat, etc. Employer should make the field have qualifications for
construction. Employer also is in charge of settling the remaining problems of
the above items. 

(2) The available of water, electricity and telecommunications
shall be connected to the appointed place to guarantee the need of construction.


(3) Opening an passage between project sites and rural public
road and main road appointed in the Special Terms and Conditions to ensure
safety and traffic smoothness. 

(4) Providing files about engineering geological and
underground pipelines of project site and answer for the accuracy. 

(5) Handling the license of construction and other construction
document requirements. And some approval procedures of ground temporarily,
suspension of water and electricity supplies, street up and blast work, etc.
(except qualifications certificates of contractor. 

(6) Ensuring the bench marks and control points and providing
to contractor in written form. They should accept inspection in working site.


(7) Organizing contractor and design unit to inspect the
blueprint and the designing. 

(8) Coordinating the underground pipelines and neighboring
constructions, structures (includes architectural conservation), protecting Old
and Famous Trees and assuming relevant cost. 

(9) Other jobs which should finished by employer are appointed
in the Special Terms and Conditions by both sides. 

8.2 Employer has opportunity to delegate part of jobs in
article 8.1 to contractor. Both sides shall reach an agreement in Special Terms
and Conditions. The cost of it should be assumed by employer. 

8.3 If Employer doesn’t fulfill obligations of article 8.1 that
results in losses and delayed schedule, the losses shall be assumed by employer.
The delayed schedule will not be postponed. 

9) Job of contractor 

9.1 Contractor should finish the following work within certain
time according to Special Terms and Conditions. 

(1) Contractor design construction document or matching
construction according to delegation of employer in the scope of his design
certification. Employer should assume the cost of it, when it is confirmed by
engineer. 

(2) Providing year’s, quarter of a year’s and month’s Scheduled
Plan and relevant progress reports. 

(3) Providing and servicing lighting which is not used at night
and fences according to the requirement of project, and also take charge of
security guard. 

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(4) Providing offices and houses in project sites to contractor
according to the quantity and requirements which are appointed in the General
Terms. The cost of it should be assumed by employer. 

(5) Keeping the government regulations on the traffic, noise,
environment protection and safe production of worksite. Contractor also need
comply with formalities and inform employer in written form. The employer should
assume the cost, except the fines caused by contractor. 

(6) Before turning in a project, the work plan of protection is
completed by the contractor. Employer should repair it and assume the cost. The
Special protection for part of project which is given by contractor and
requested by employer, and relevant increase rate .They are negotiated in
Special Terms and Conditions by both sides. 

(7) Protecting the underground pipelines and neighboring
construction, structures (includes architectural conservation) and Old and
Famous Trees according to Special Terms and Conditions. 

(8) Keeping project sites tidy and clean which is observed the
environmental hygiene management. Contractors should make the sites clean up
according to Terms and assume the losses and fines. 

(9) Other jobs which should finished by contractor are
appointed in the Special Terms and Conditions by both sides. 

Construction organization design & Duration 

10) Timing plan 

10.1 Employer should provide Construction organization design
and Timing plan to engineer according to the dated appointed in the Special
Terms. Engineer should give confirmation or amendment in time. If not. it will
be read as an agreement. 

10.2 When the projects are executed by some other
units. contractors should comply with employer’s blueprints and relevant files,
unit project’s timing plan and other contents appointed in the Special Terms.


10.3 Contractors should organize the projects according to the
timing plan and accept engineer’s supervisory inspection. If the actual plan is
not same as the timing plan, Contractors should give improvement approach which
is confirmed by the engineer. Contractors have no rights to increase project
price when the difference is caused by Contractors. 

11) Start & deferred start 

11.1 Contractors should start the work in the date appointed in
the agreement. If contractors couldn’t start on time, it couldn’t later than the
7th days after start-date and also should offer the reasons and
requirements of deferring start. Engineer should give his answer to contractors
within 48 hours when he got the application. If not, it will be regarded as an
agreement. The delayed schedule will be postponed. The delayed schedule will not
be postponed if the engineer doesn’t agree with the extension or no applications
about extension are given by contractors. 

11.2 The engineer should inform the contractors in written form
that it can’t start on time. It is caused by some reasons of employer. The
start-date will be postponed. Employer should compensate for the loss to
contractors and the delayed schedule will be postponed. 

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12) Suspension of construction 

If necessary, the engineer should ask for suspending the
project in written form and provide solutions in written within 48 hours. If
not, contractors have rights to return to work. If the stoppage is caused by
employer, the loss and cost should be assumed by him. The delayed schedule will
be postponed. If the stoppage is caused by contractors, the loss and cost should
be assumed by him, but the delayed schedule will not be postponed. 

13) Delayed schedule 

13.1 The delayed schedule will be postponed which are caused by
the reasons confirmed by engineer as following. 

(1) Blueprints and Conditions of the project start aren’t
provided by employer according to Special Terms and Conditions. 

(2) Contractors couldn’t provide payment and progress
payment. so that normal construction cannot be carried on. 

(3) Engineer couldn’t provide instructions and approval. so
that normal construction cannot be carried on. 

(4) Design change & increase the quantity of the project


(5) Suspension of water .electricity and gas supplies more than
8 hours not caused by Contractors within one week. (6) Force Majeure (7) Some
other situations which are confirmed by Engineer or appointed in the Special
Terms 

13.2 Contractors should provide the delayed schedule report to
Engineer within the 14 days when the situation about article 13.1 was carried
out. The Engineer should give confirmation within 14 days. If not, it will be
read as an agreement. 

14) Construction completion 

14.1 Contractors should complete the project on the date which
is appointed in the agreement or confirmed by the engineer. 

14.2 Contractors shall be liable for breach of contract, if
contractors couldn’t complete the project in time because of their own reasons.


14.3 If the project has been completed ahead of schedule, both
sides should negotiate the special agreement about completing ahead of schedule
which is as a part of contract document. This agreement includes some
measurements which are play a very important role for quality and safety. It is
also includes some conditions and additional contract price of completing ahead
of schedule. 

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Quality & Inspection 

15) Quality of project 

15.1 Quality of project should reach the standardized appointed
in the agreement. Evaluation of Quality Standards should be in accordance with
state or trade Quality Standard. Contractors shall be liable for breach of
contract in accordance with the law, if it is caused by contractors. 

15.2 If there are some issues between both sides, it should be
appraised by TQC confirmed by both sides. The costs and losses of it should be
assumed by responsible party. If they all have responsibility, the costs and
losses should be assumed by both sides. 

16) Inspection & Rework 

16.1 Contractor should carry out according to standard
specifications. blueprints and engineer’s instructions and accept engineer’s
inspection at all times. In addition, they should provide accommodations for
inspection. 

16.2 The part which doesn’t reach the standard, the contractor
should removal and rebuilt when it is discovered by the engineer. Contractors
should removal and rebuilt them according to requirements till reach the
standard. The cost of rebuilt should be assumed by contractor. The delayed
schedule will be postponed. 

16.3 The inspection given by engineer should not influence the
normal project. If not, the loss shall be assumed by contractor when it is
unqualified. Besides, the other cost of additional contract price should be
assumed by employer. 

The delayed schedule will be postponed. 

16.4 The additional contract price which is caused by
engineer’s fault instructions or non-contractor should be assumed by employer.


17) Concealed works and intermediate acceptance 

17.1 Contractor can make self-criticism when the project have
concealed conditions or finish the part of intermediate acceptance according to
Special Terms and Conditions. They should inform engineer to inspect in written
48hours before concealed or intermediate acceptance. The concealment, the
contents, place and time of intermediate acceptance should be informed.
Contractor prepares the record of inspection. When it is qualified and signed by
engineer, the concealment and continuing operation should be carried out by
contractor. If not qualified, it should be inspected again when contractor have
amend it within appointed time according to mission time given by engineer. 

17.2 If the engineer couldn’t inspect in time, he shall inform
contractor in written 24hours before inspection. But the deferred time can’t be
more than 48 hours. If not, the inspection couldn’t be held. What’s more, the
inspection can be held by contractor and the record should be accepted by
engineer. 

17.3 After inspection and the quality of project is reach the
requirements of standards, specifications and blueprints. 24 hours later, if
there is no signature of engineer on the record, it will be read as a
recognition. The concealment and continuing operation should be carried out by
contractor. 

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18) Recheck 

No matter the inspection is held or not, when the engineer asks
for recheck the concealed project. The contractor should strip it off and make a
hole. When the inspection complete, contractor should cover or repair them. When
it is qualified, the additional contract price and losses of it should be
assumed by employer. The delayed schedule will be postponed. If not qualified,
the cost should be assumed by contractor, but the delayed schedule will not be
postponed. 

19) Project startup 

19.1 When both sides promised startup, the contents of it
should be same as the scope of installation contracted by contractor. 

19.2 Equipment Installation are under conditions of No-load of
Single Machine.contractor organize the startup, and inform the engineer in
written 48 hours before startup. The information includes contents, time and
address of the startup. Contractors prepare the record of the startup and
employer provides necessary conditions for startup. When it qualified, engineer
should sign the record. 

19.3 If the engineer couldn’t participate in testing, he should
ask for extension in written 24 hours before the startup beginning. But the
extension couldn’t more than 48 hours. If not, the engineer should accept the
testing record. 

19.4 Equipment Installation are under conditions of No-load of
linkage, employer organize the startup, and inform the Contractors in written 48
hours before startup. The information includes contents, time, address of the
startup and requirements of contractors. Contractors make a good preparation
according to requirements. When it qualified, both sides should sign the record.


19.5 Obligations of Both sides 

(1) If the testing did not reach the requirements of the
inspection, employer should demand design unit to amend the design and
contractor should reinstall the design according to revised design. The cost of
them should be assumed by employer. The delayed schedule will be postponed. 

(2) If it did not reach the requirements of the inspection
caused by equipment, Equipment Procurement should take responsibility for buying
a new one or repairing it. Contractors take responsibility for removing and
reinstalling. All the cost should be assumed by contractors who is bought the
equipment and the delayed schedule will not be postponed. If the equipments were
bought by employer, all the cost should be assumed by him and the delayed
schedule will be postponed. 

(3) If the testing is not reach the requirements of the
inspection which is caused by contractors. Contractors should reinstall and test
it according to engineer’s requirements. And the cost of it should be assumed by
Contractors, but the delayed schedule will not be postponed. 

(4) The cost of testing (except the cost of the contract price
or appointed in the Special Terms) should be assumed by employer. 

(5) If the engineer didn’t sign the testing record, it will be
read as an agreement 24 hours after testing. Contractors can go on constructing
or Handling procedures on completed. 

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19.6 Employer takes responsible for testing for batch charging
when the project completed. If employer demands testing before completed or
combination of contractors, it should be approved by contractors. Supplemental
Agreements should be signed. 

Construction safety 

20) Construction safety & Inspection 

20.1 Contractors should comply with relevant regulations and
organize construction according to Safety Standard. And get ready to be
inspected in all time. Take measures against hidden danger of accident. The
losses which are caused by contractors should be assumed by himself. 

20.2 Employer should make safe education among the workers in
the sites and also are responsible for their safety. Employer couldn’t demand
contractors to carry out the construction in the criminal way. The losses should
be assumed by employer, if the losses are caused by himself. 

21) Security Protection 

21.1 When contractors carried out construction near the
following place, including power equipments, Power transmission lines,
underground pipelines, sealed shockproof workshop, highly flammable, explosive
places and main communication lines nearing street. Contractors should provide
Safety protection measures to engineer before the project and get the
permission. The cost of it should be assumed by employer. 

21.2 When they perform Blasting or work under such conditions
as radiation, toxic risk and corrosive, contractor should inform the engineer 14
days before project in written form and provide the projection measures. When
they get the permission, the cost will be assumed by employer. 

22) Accident Management 

22.1 When the big accident was happen, contractor should inform
the engineer and relevant department. The cost will be assumed by accident
responsible party according to the requirements of relevant state department.


22.2 Take measures to resolve disputes according to the
relevant requirements of state departments. 

Contract Price and Payment 

23) Contract price and adjustment 

23.1 The Contract price of public bidding for construction
projects is appointed in the negotiated bidding agreement. The other
non-contract price is appointed in the budgetary agreements. 

23.2 When the price is come to conclusion, both sides have no
rights to change it. When they have to confirm the price, take one of the three
measurements as following is ok. 

(1) Fixed price or lump sum contracts. Contract price and
Computational Method of risk cost are appointed in the ST (Special Terms and
Conditions), no adjustment should be make on contract price. The adjustment of
other contract price should be made according to ST. 

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(2) Adjustable price contract. The adjustment should be made
according to appointed adjustment measures. 

(3) Cost plus award fee contract. Contract price includes cost
and award fee, both sides appointed its computational methods. 

23.3 The adjustable factors of adjustable contract price
including: (1) The influence of laws, administrative regulations and National
policy. (2) Price-setting which is brought out by project cost management 

(3) Suspension of water, electricity and gas supplies more than
8 hours which is not caused by contractor within one week 

(4) Other appointed factors 

23.4 Contractor should provide reason and amount to engineer in
written within 14 days after the accident of article 23.3 happened. When it is
confirmed by engineer, the cost of it should also be paid by him at the same
time with other cost. If not, it will be read as an agreement. 

24) Advance payment for the project 

When carry out Advance payment for the project, employer should
appointed the time and amount of payment to contractor according to ST. The
payments will be deducted according to appointed time and proportion after
operation. Time of pay in advance should not be late 7 days after start-date. If
the employer do not give payment as appointed, contractors have rights to demand
him to give payment 7 days after appointed date. When the employer got the
information but still don’t give payment, contractors have rights to stop
constructing 7 days after giving the information. Employer should pay interests
to contractor from the appointed date. He shall be liable for breach of contract
in accordance with the law. 

25) Acknowledgement of work amount 

25.1 Contractors should provide report on work amount to
engineer at the appointed time. The engineer should check the finished work
amount (called computation) according to blueprints within 7 days. And they are
also need to inform Contractor 24 hours before computing. Contractors should
give a lot of convenience and send staff to take part in. If contractor do not
take part in, the result will be read as an agreement. 

25.2 If the contractor does not compute it within 7 days when
he got the information, from the 8th day, the work amount of the
report will be regarded as identified and as a basis for the payment of price of
work amount. If the engineer could not inform the contractor at appointed date,
the result will be regarded as invalid. 

25.3 The work amount which is out of the scope of blueprints
and caused of contractor should not be computed by the engineer. 

14 




26) The payment of Project Funds (progress payment) 

26.1 Employer should pay the Project Funds (progress payment)
to contractor 14 days after results confirmation. The prepayment which is the
same as the Project Funds (progress payment) should be remained by employer at
appointed date. 

26.2 The adjustable contract price appointed in the article 23
and 31 of General Terms and other terms should be paid and adjusted at the same
time with the Project funds (progress payment). 

26.3 If the employers do not pay the Project funds (progress
payment) in time, contractor should provide information about the payment to
him. If employer still not pay the funds when he got the information, he could
negotiate with contractor to make agreement on deferred payment. He could defer
the payment when it is admitted by the contractor. The agreement should identify
the time of payment. And he also should pay the interests from the
15th day when they got the computing results. 

26.4 The losses should be assumed by employer because the
employer couldn’t give the payment at appointed time and both sides to reach an
agreement on deferred payment. 

Supply of equipment and materials 

27) Employer supply the equipment and materials 

27.1 If the equipment and materials are supplied by employer,
the list of supply of equipment and materials should be appointed by both sides,
and the list also should be regarded as a attachment of the contract (attachment
2). The list includes the varieties, size, type, amount, unit price, quality,
supply time and supply address of the Supply of equipment and materials. 

27.2 Employer supplies the equipment and materials according to
the list and the qualifications of them. Employer should be responsible for the
quality. Employer should inform the contractor to count the goods with them 24
hours before the goods were arrived. 

27.3 Contractor should be assumed the cost of safekeeping when
the materials supplied by employer have been counted them. The contractor should
assume the loss when the loss is caused by contractor. If the employer do not
inform the contractor to count the materials, contractor isn’t responsible for
protecting the materials. The losses will be assumed by employer. 

27.4 If the equipment and materials supplied by employer are
not same as the list, the employer should bear relevant responsibility. Both
sides should reach an agreement according to ST as following: 

(1) When the unit price is not matching the list, the spread
should be assumed by employer. 

(2) When the varieties, size, type, amount and quality of them
are not matching the list, contractor has rights to refuse to keep them. In this
case, employer should delivery them out of the sites and buy some new ones. 

(3) When the type, size of them aren’t matching the list, once
admitted by employer, contractor could make up a prescription. The losses should
be assumed by employer. 

15 




(4) When the address is not matching the list, employer is
responsible for delivering them to the appointed place. 

(5) If the supply of amount is less than appointed amount, the
absent should be attended by employer. If the supply of amount is more, the
redundant goods should be sent out by employer. 

(6) If the equipments and materials are arrived earlier, the
cost of protection should be assumed by employer. If late, the losses should be
assumed by employer. The delayed schedule should be postponed. 

27.5 Before using the equipment and materials supplied by
employer, contractor is responsible for checking test. If not qualified, the
cost of checking test should be assumed by employer. 

27.6 The settlement methods of equipment and materials should
be supplied by employer and appointed in the ST by both sides. 

28) The contractors purchase the equipment and materials.


28.1 If the contractor is responsible for purchasing, they
should purchase them according to appointed design and standard in the ST and
supply the qualifications. The contractor also should take charge of the
quality. The engineer should be informed to count by contractor 24 hours before
the goods arrived. 

28.2 If the materials aren’t matching the design standard,
contractor should sent them out according to engineer’s requirements and buy the
new goods according to the requirements. The cost will be assumed by contractor.
The delayed schedule will not be postponed. 

28.3 Before using the equipment and materials supplied by
contractor, the inspection should be taken according to engineer’s requirements.
If not qualified, it could not be used. The cost will be assumed by contractor.


28.4 If the engineer spotted that the contractor bought and
used the equipment and materials which are not qualified, they have rights to
demand contractor to repair and demolish them or to purchase the new ones. The
cost will be assumed by contractor and the delayed schedule will not be
postponed. 

28.5 If the substitute materials should be used, the contractor
should get the confirmation of the engineer. The increase or decrease of
contract price should be appointed by both sides in written form. 

28.6 The equipment and materials supplied by contractor, the
manufacturer and suppliers could not be appointed by employer. 

Engineer Change 

29) Engineer design change 

29.1 If the employer demands to change the engineer design, he
should inform the contractor the alterations 14 days in advanced in written
form. The alteration excesses the standard of appointed construction scale. It
should be inspected by planning management and relevant department. The modified
blueprints and instructions should be provided by employer. The alterations
should be taken according to appointed information and requirements. 

16 




(1) The elevation, baseline, position and dimensions of the
project should be changed. (2) To add or detract the project amount according to
contract (3) The time and sequence of the project should be changed (4) The
other jobs which are good at changing the project 

The losses should be assumed by employer, because that the
losses are caused of the alterations. The delayed time should be postponed. 

29.2 The contractor has no rights to change the project design.
The direct losses which are caused by contractor’s alterations should be assumed
by contractors. The delayed time should not be postponed. 

29.3 The rationalization proposal on design change and
equipment and materials change which are provided by contractors should be
admitted by engineer. If not, the losses should be assumed by contractor.
Contractor also has obligation of compensation for losses. The delayed schedule
will not be postponed. If the rationalization proposal was admitted by the
engineer, the costs and benefits should be negotiated by both sides. 

30) Other Modifications 

If the contractor demands to change the quality of project or
other materially alter, it should be resolve by negotiated with both sides. 

31) To determine the modification of price 

31.1 Contractor should provide the report on changing the
project price within 14 days when the change of project was confirmed. The price
will be revised when it is confirmed by engineer. The methods of change contract
price should be taken as following: 

(1) If there is appointed price of engineering change, they
could change the contract price according to the contract. 

(2) If there is similar price of engineering change, they could
change the contract price according to it. 

(3) If there is no appointed and similar price of engineering
change, contractor should provide a reasonable price. The price will be adopted
when it is confirmed by the engineer. 

31.2 If contractor provides the no report on changing the
project price within 14 days when the change of project was confirmed. The
change will be regarded as a change irrelevant with contract price. 

31.3 The engineer should confirm the report on Payment Change
in Engineering Project within 14 days when he got it. If the engineer doesn’t
confirm it without reasonable causes, the report will be confirmed from the
15th day when the report arrives. 

31.4 If the engineer is disagree with the Payment Change in
Engineering Project, it will be solved according to article 37 of the General Terms. 

17 




31.5 The additional Payment Change in Engineering Project is
regarded as additional contract price. The Payment Change in Engineering Project
and Project Funds will be paid at one time. 

31.6 If the change of engineering was caused by contractor,
contractor has no rights to demand to add the contract price. 

Inspections and settlements of completion 

32) Inspections of completion 

32.1 If the conditions of inspection that the Project had,
contractor should provide complete completion materials and reports according to
relevant state provisions of Construction completion. If the both sides promised
that the as built drawing should be provided by contractor, the contractor
should provide the date and quantities of it according to Special Terms and
Conditions. 

32.2 Employer should organize the inspection within 28 days
when the completion report was received. The Contactor should give confirmation
or suggestions within 14 days after the inspection. The contractor should repair
it according to the suggestions and assume the cost. 

32.3 If the Owner fails to organize acceptance within 28 days
after receipt of the completion acceptance report delivered by the Contactor, or
fails to offer amendment opinions within 14 days after acceptance, the
completion acceptance report shall be deemed to have been recognized. 

32.4 When the completion inspection is fulfilled, the actual
date of completion is the date when the contractor sent the contract. 

32.5 If the employer do not organize the inspection within 28
days when the completion report was received, from the 29th, the
contractor should take responsibility for protecting the Project and all the
accidents. 

32.6 The completion scope of middle term and completion time
are appointed in the Special Terms and Conditions. The inspection procedures
should be executed according to article 32.1 and 32.4 of the General Terms. 

32.7 Due to special reasons, employer demand some units to
complete the Project without parts of project. The agreement of completing the
project without parts of project should be signed in order to confirm the
responsibility of both sides and methods of payment. 

32.8 If the project without going through the acceptance check
or considered unqualified after the acceptance check shall not be put into use.


33) Settlement of Completed Projects 

33.1 When the Owner organizes acceptance within 28 days after
receipt of the settlement of completion acceptance report and settlement
documents delivered by the Contactor. Contractor should provide settlement of
completion acceptance report and complete settlement data. 

18 




33.2 The Owner makes confirmation or gives suggestions within
28 days after receipt of the completion acceptance report delivered by the
Contactor. The employer confirms the report and informs the administering bank
to pay the Accounts Settled. The contractor gives the complete project to
engineer within14 days after Accounts Settled acceptance. 

33.3 If the Owner fails to give the Accounts Settled without
reasonable causes within 28 days after receipt of the completion acceptance
report and settlement documents delivered by the Contactor, from the
29th day, employer should pay interests to contractor according to
the prime bank interest for loans of the time. He shall be liable for breach of
contract in accordance with the law. 

33.4 If the Owner fails to give the Accounts Settled within 28
days after receipt of the completion acceptance report and settlement documents
delivered by the Contactor, from the 29th day, the contractor has
rights to remind him to give the payment. If the Owner fails to give the
Accounts Settled within 56 days after receipt of the completion acceptance
report and settlement documents delivered by the Contactor, contractor has
rights to negotiate with employer to make a discount. And contractor also should
apply the people’s court to sale the project by auction according to the law.
Contractor has priority rights on the remuneration of discount and auction. 

33.5 If the contractor fails to supply the completion
settlement report and complete settlement documents within 28 days after the
confirmation is given by employer. If the normal project settlement could not be
carried out or the payment cannot be paid in time, contractor should complete
the project when employer demanded and also should protect the project when
employer didn’t demand. 

33.6 If there are arguments on Accounts Settled between both
sides, the arguments should be solved according to article 37 of General Terms.


34) Quality Warranty 

34.1 The contractor assumes the responsibility of quality
warranty during warranty time according to relevant laws. regulations and rules.


34.2 The implement of quality warranty. Contractor should sign
the warranty certification before completing the project. The certification is
regarded as the contract attachment. (attachment 3) 

34.3 The main contents of Warranty Certification (1) The items,
contents and scopes of quality warranty (2) The warranty time (3) The
responsibility of warranty (4) The methods of warranty payment 

19 




Default, Claims and Disputes 

35) Default 

35.1 The employer breaches the contract when the following
situations were happened. 

(1) Employer cannot give the prepayments in time which is
referred to article 24 of General Terms. 

(2) Employer cannot give the project payment according to
contract which is referred to article 26.4 of General Terms. That causes the
construction can’t be carried out normally. 

(3) Employer cannot give the Accounts Settled without
reasonable causes which is referred to 33.3 of General Terms. 

(4) The other situation that employer fails to perform his
contractual obligations, or performs them in a manner which is not in conformity
with the agreed terms. 

The employer should be held responsible for the breach of the
contract and compensate the losses with money. 

35.2 The contractor breaches the contract when the following
situations were happened. 

(1) The project cannot be completed in time because of
contractor’s reasons or the delayed schedule could be postponed confirmed by
engineer, which are referred to article 14.2 of General Terms. 

(2) The quality of project can not be up to the appointed
standard because of contractor’s reasons which is referred to article 15.1 of
General Terms. 

(3) The other situation that contractor fails to perform his
contractual obligations, or performs them in a manner which is not in conformity
with the agreed terms. 

The contractor should be held responsible for the breach of the
contract and compensate the losses with money. The computational methods of
losses and penalty and the amount of penalty should be appointed in the General
Terms. 

35.3 The parties to a contract may agree that one party shall,
when violating the contract, accept responsibility and continue to fulfill the
contract. 

36) Claims 

36.1 When there are reasonable causes and evidence, the one
party to a contract has rights to take a claim against the other party. 

36.2 The situations such as the employer could not fulfill the
obligations or the error occurred caused by employer are caused some losses. The
losses include that the project was delayed and (or) the contract price cannot
get in time or other economic losses. Contractor could claim for indemnity in
written form according to procedures as following. 

(1) The claim information has been provided to the engineer
within 28 days after the claim was occurred. 

20 




(2) Providing long-term and (or) compensation report and
relevant data on economic loss. 

(3) The engineer should reply the claim report and relevant
data within 28 days or demands replenish the claim causes and evidence. 

(4) If the engineer fails to reply the report and data within
28 days after receipt of the compensation report delivered by the Contactor, the
compensation will be regarded as confirmed. 

(5) When the claim is in the progress, contractor should send
intention to claim to engineer staged. Contractor provides claim data and the
final claim report within 28 days when the claim is finished. The procedures of
claiming are the same as the rules of (3) and (4). 

36.3 If the contractor fails to fulfill the responsibility of
contract and leads to economic losses. Employer has rights to enter a claim
against contractor according to article 36.2. 

37) Disputes 

37.1 If there is any dissension when employer and contractor
execute contract, they two can compromise or command relative responsible
departments to mediate. If one party disagree with the above methods, the
dissension could be solved by appointed methods as following. 

The first solution: in accordance with the arbitration clause
of contract, or a written arbitration agreement concluded after the contract has
been signed, be submitted to a copyright arbitration body for arbitration. 

The second solution: to directly file a suit in a people's
court. 

37.2 Both sides are responsible for keeping constructing and
protecting the completed project even the dissension has occurred. Excepting the
following situations: 

(1) Fails to perform the contract because of Unilaterally broke
the contract. The both sides reach an agreement to stop the construction. 

(2) Mediating the dissension and stop the construction are
confirmed by the both sides (3) Arbitration agency ask for stop construction (4)
Lower Court ask for stop construction 

Others 

38) Engineering Subcontract 

38.1 Contractor jobs out part of the contract according to the
Special Terms and Conditions and signs agreements with subcontractors.
Contractor cannot job out any part of contract to subcontractors without
employer’s permission. 

38.2 Contractor should not job out all the project to the
other, also should not dismember the project and subcontract them in the name of subcontracting. 

21 




38.3 Construction subcontracting can not relive any
Accountability and Liability of the contractor. The contractor should make the
management personnel to let the contract to be fulfilled. Any noncompliance or
neglect of the subcontracting enterprise causes losses to contractor, contractor
need to undertake join and several liability. 

38.4 The subcontract project cost should be settled with the
contractor and the sub contractor. Contract letting party have no right to pay
the cost for the project without the consent of contractor. 

39) Non –resistance Action 

39.1 Non –resistance action involves exploding, fire, Natural
Hazards or war, unrest, or flyer droping. 

39.2 After the Non –resistance action, the contractor must
inform engineer immediately, and take measures to decrease the loss as much as
possible. If the engineer think it must be stopped, the contractor must stop
here. 48 hours After the Non –resistance action, the contractor need to inform
the disaster situation to engineer and estimate the repair fee. If the Non
–resistance action lasts, the contractor must inform engineer every 7 days. 14
days after the Non –resistance action, the contractor needs to inform the
disaster situation to engineer and estimate the repair fee. 

39.3 The fee and delay due to the Non –resistance action , two
parties will be treated according to the rules below: 

(1) The subcontractor undertake the casualties, property
damage, material of construction and damage control equipment due to the
project. 

(2) The casualties which is due to the subcontractor is
undertaken by the contractor. 

(3) The contractor must undertake the equipment damage stand-by
loss 

(4) During the lockout term, the employer undertakes the
expense which engineer requires management personnel and guards to cost. 

(5) The project needs to be cleared and restored. 

(6) The delay prolongs according to time. 

39.4 The responsibility cannot be exempt from the party delays


40) Insurance 

40.1 The employer need give the workers insurance before the
beginning of the project. 40.2 The employer must cover the insurance for the
material and equipment of the project. 40.3 The employer can entrust the
contractor to cover the insurance and pay for the fee. 

40.4 The employer must cover the insurance for the workers who
do hazardous operation and the material and equipment of the project . 

22 




40.5 Both the contractor and employer must take measures to
decrease the losses when happens to accidents. 

40.6 The content and the responsibility of the insurance is
provided by the special terms and conditions. 

41) Assurance 

41.1 Both the contractor and employer should offer the
assurance below in order to make sure to fulfill the contract: (1) The employer
offers the assurance for the contractor and pay for the fee of the project
according to the contract. (2) The contractor offers the assurance to the
employer and fulfills the responsibility. 

41.2 If one party Breach of Contract, the other can require the
third party undertake the responsibility. 

41.3 The content, ways and responsibility should be ruled in
the special terms and conditions. 

42) The patented technology and Special Technology 

42.1 If the employer requests to have the patented technology
and Special Technology, they should have the procedures and pay for the fee for
apply for, also, they should get the agreement of engineer. 

42.3 Unauthorized use of patented technology and the patent
infringement will bear the legal liability and responsibility. 

43) Cultural Relics and Obstacles Underground 

43.1 If find barrow, ruins of ancient buildings, Cultural
Relics and other valuables ,the employer should protect scene immediately and
inform engineer in written form in 4 hours, the engineer should inform the
Bureau of Cultural Relics in 24 hours, the employer take measures to protect the
scene according to the request. And this make the delay should be prolonged the
due time. 

43.2 The obstacle underground should be informed engineer in
written form in 8 hours in written forms and in the meantime get the solutions,
the engineer should revise the schedule in 24 hours, and this makes the delay
should be prolonged the due time. 

44) The Termination of Contract 

44.1 If the employer and the contractor agree with each other,
the contract can be terminated. 

44.2 If happens to the case No.26.4, and the contractor does
not pay the fee for stopping over 56 days, the employer have right to terminate
the contract. 

44.3 If happens to the case No.38.2, the employer make all or
some project subcontract, the employer have right to terminate the contract.


23 




44.4 If happens to the case below, the employer has right to
terminate the contract: 

(1) The Force Majeure make the contract failed to fulfill 

(2) The contract cannot be fulfilled due to default and breach
of one party (including the employer causing the delay) 

44.5 If one party want to terminate the contract according to
NO.44.2 44.3 44.4, you need to inform the partner in written form in 7 days .If
there is dispute about the contract , we deal with this according to No.37 .


44.6 While the contract is discharged, the contractor should
make the protection and removal of the completed construction and bought
material and equipment well, and pull engine equipment and workers out as
required. The employer should supply the essential conditions to the contractor
for pulling out, and pay for the cost and the completed construction according
to the contract. The booked material and equipment should be canceled or
discharged by the booking person. The payment which fails to get discharged or
the cost for discharging the booking contract should be paid by the employer.
The cost that comes from the delay of returning the goods should be taken the
responsible party. Besides, the mistaken party should pay for the cost caused by
the discharging the contract. 

44.7 The termination of contract does not influence the
validity about the liquidation. 

45) The taking effect and termination of the contract


45.1 Both parties set reasonable ways for the contract to taken
effect. 

45.2 Except for No.34, the employer and the contractor
undertake all the obligations of contract, after finishing the project and
paying for all the fees, the contract terminated. 

45.3 Please observe principle of honesty and fulfill the
obligation of help and confidentiality after the termination of contract 

46) Quantity of Contract 

46.1 There are 2 contracts, and they have the same legal effect
of law. 

46.2 The quantity of duplicated ones is determined by the
request of both parties. 

47. Supplemental Terms 

Both parties can make reification and modification about the
contract according to the law, administrative regulations and specify in the
special terms and conditions on agreement. 

24 




Part Three 
Special Terms and Conditions



Definition of terms and contract documents 

2) Contract documents and Explanation order for the contract
documents 

The composing and order of contract documents: executing
article 2 of General Terms 

3) Languages and applicable Laws, standard and criterions.


3.1 The available languages are not only Chinese but also
________ language. 

3.2 Applicable laws and regulations 

Laws and administrative regulations should be expressed. There
are “Contract Law of the People’s Republic of China”, “Law of the people’s
republic of china on bid invitation and bidding”, “CONSTRUCTION LAW OF THE
PEOPLES REPUBLIC OF CHINA”, ”Regulations on Administration of the Quality of
Construction Projects”, “Interim measure of the settlement of accounts”
(Construction documents [2004]No.369) and the relevant state provisions. 

3.3 Make use of applicable standards and criterion 

The name of applicable criterions: “Unified standard for
constructional quality acceptance of building engineering” (GB50300-2001) and
other relevant regulations of professional acceptance of quality, and also
according to standards of a local government. 

The contractor provides the standard and formal time:
_______________

There is no relevant standard and formal time at home:
______________

The general rights and obligations of both sides 

5) Engineer 

5.2 The engineer who is appointed by surveillance unit 

Name: Position: Director 

The duties appointed by employer: executing the surveillance
contract or to grant authority according to appointed Proxy 

The authorities should be executed when they are confirmed by
employer: the engineering order of starting of restarting the project, stop-work
order, economic vise, claim vise and other authorities not appointed in the
authorization. 

25 




5.3 The engineer stationed by employer. 

Name: Jiangde
Yu          
           Position: Director

Authority: full-fledged member 

5.6 Executing no authorities of supervision and engineer:
_______________

7) Project Manager 

Name: Yuanwei Cheng Position: Project Manager 

8) Employer’s job 

8.1 Contractor should complete the project according to
appointed time and claims. 

(1) The construction sites are required conditions of execution
and the completed time: There are “three supplies and one leveling” (supply of
water, electricity and road and leveled), that is to say the sites are filled
all requirements for construction. 

(2) The time, address and supply request for linking the water,
electric and communications to the work sites. Linking public pipeline of water,
electric to work sites within 7 days before the project started. They should
within the central building of 50m. The contractor should guarantee the Joins
according to the design. 

(3) Time and requirements of work sites and cut-over of public
roads. When he has filled all requirements, contractor should provide temporary
construction sites and assumed for the losses. 

(4) The supply time of engineering geology and data of
underground pipelines. Employer should provide a copy of it to contractor in
written before construction start. He also should be responsible for its
accuracy and authenticity. 

(5) The name and complete time of job implementation
certification and approved documents which are transacted by employer. Providing
a copy of notification of award, Construction Works Planning Permit to the
employer. 

(6) The inspection requirements of leveling points and
control-point coordinate. Providing written formal 5 days before starting and
field acceptance test (field acceptance test by Planning and Zoning). 

(7) Drawing inspection and time of design clarification: 10
days before project 

(8) Coordinating the underground pipelines, neighboring
constructions and structures (includes protection of historical relics) and
protection of old tree and famous wood species: They are executed according to
the 8th of article 8.1 of General Terms. 

(9) Other jobs should be completed by the employer. That is
coordinating the jobs of every aspect. 

8.2 The job of contractor should be completed what is appointed
by employer: ________________


26 




9) Contractor’s job 

9.1 Contractor should complete the following tasks according to
appointed time and requirements. 

(1) The time of submission of design should be provided by the
Contractor who is filled with good design qualifications and trade confirmation.


(2) The name and time of planning and report. Providing 2
copies of planning and materials report on the 20th of every month,
and one copy should be returned when signed by employer. 

(3) Be responsible for construction safety and a non-night
light: according to the 3rd of article 9.1 of General Terms. 

(4) The requirements of office and houses: Providing the supervisor
  an office

(5) Some procedures of work sites traffic, sanitation and noise
management should be transacted by the contractor. According to the
5th of article 9.1 of General Terms 

(6) The special requirements for completed project and fee
assumption: If the employer uses it in advance or asks for special protection,
the cost should be assumed by employer according to General Terms. 

(7) The protection of underground pipelines, neighboring
constructions and structures (includes protection of historical relics), old
tree and famous wood species and fee assumption. 

The employer should provide the graph of underground pipelines,
floor plan of neighboring constructions and base plan according to the General
Terms. The protection methods should be confirmed by both sides. And the cost
will be assumed by the employer. 

(8) The sanitary requirements of work sites: They are according
to the 8th of article 9.1 of General Terms. 

(9) The other jobs for the contractor appointed by the both
sides. 

Planning and programming of project construction and
construction period 

10) Planning 

10.1 The contractor provides construction management plan and
time of Planning. Within 20 days when the drawing inspection was completed. 

The time for the engineer confirmation: within 7 days when it
is arrived, the time limit for making response is not met, the application
should be regarded as confirmed. 

10.2 Requirements on Planning of project complex: 

13) Delayed schedule 

13.1 Other situations on delayed schedule appointed by the both
sides: delayed schedule according to General Terms. 

27 




Quality and Inspection 

17) Concealed works and intermediate inspection 

17.1 The part of appointed intermediate inspection: except
according to regulations of Weihai Quality department, the employer and
supervising engineer have rights to inspect any part of the project according to
the2.2th of article 17.1 of General Terms. 

19) Test run 

19.5 Pick up the tab for test run: according to article 19 of
General Conditions 

Constructing Safety 

According to article 20, 21, 22. 

Contract Price and Payment 

23) Contract Price and adjustment 

23.2 The Contract Price is confirmed according to the method of
(2) 

(1) Adopting the fixed Contract Price, the risk of it
includes:

 The computational method of risk
charge: 

The adjustment method of Contract Price
out of the risk scope: 

(2) Adopting adjustable Price Contract and the adjustment
method of Contract Price: 

(1) According to the principle of budget settlement of
Drawings. The settle basis: as-build drawing, relevant changes, field visas,
construction management plan, technology authorization and Minutes of Meeting.
The following documents are referenced: “Consumption of fixed construction in
Shandong Province 2003”, “Consumption of installation works in Shandong Province
2003”, edition 2006 of “The installation costs and calculation rules in Shandong
Province” and relevant documents of Shandong Province and Weihai City. 

(2) The norm unit price of one person per M/D is 32 Yuan per
M/D of civil engineering, installation and decoration. If there is scattered
workers are needed, the visa should be signed by both sides and the integrated
price is 50Yuan per M/D. 

(3) The price of adjustable materials is appointed in the
regulations, the contractor should inform the price to employer. The employer
should confirmed it within 7 days, if not, it will be read as an agreement. 

(4) Within the limit of turnkey job, the buyer should be
appointed by the employer. The project which is constructed by professional
construction team is regarded as specialist subcontracting. The subcontract
project is according to a fixed settlement and added into directly fee,
the total contractor should not charge the implementation fee. If the
subcontractor signed the agreement of integration unit price, the 2% of
implementation fee should be paid. Before taking interests, it should be settled
according to subcontract construction. 

28 




(5) The measure cost and regulations fee should be paid
according to relevant documents. 

(3) Adopting cost plus fee contract, there are some engagements
about cost and fee: 

23.3 The other adjustable factors of appointed contract price:


23.3.1 Adjusting the design change, filed visa and working
contact list according to the actual situations. 

23.3.2 The settlement is accounted according to time period,
and the time node is divided into 3 times, they are calculated as follows: 

(1) The first time: from the start time of Construction Permit
to +0.000 
(2) The second time: from +0.000 till the main structure has been
finished 
(3) The third time: from the main structure finished till the total
construction has been finished 
(4) The contractor should settled it
according to the above nodes and divided into 3 times, the total section settled
at last. The price of factor price should be paid according to above nodes. 

24) Advance payment for the project 

The time and amounts of advance payment for project percentage
of the total amount of contract price: 

The time and percentage of project funds rebate: 

25) The confirmation of work amount 

25.1 The provided time of the report on work amount this is
supplied by contractor to engineer. Providing the report on work amount the
23rd per month, a copy should be back when employer signed them. 

26) The payment of project funds (progress payment) 

The time and method of the appointed payment of project funds
(progress payment): 

After the completion of 4 floors on the ground, contractor
should provide the finished work amount and cost. Employer should complete the
appraisal within 14 days and pay 35% of work amount. Contractor should provide
the finished work amount of that month on the 23rd of per month. The
employer should inspect them within 7 days. The payment of 70% of the work
amount of the very month and 5% of 2 floors underground and 4 floors on the
ground should be paid by contractor within 7 days after the inspection. The 85%
of the total payment should be paid when the construction was completed. The 95%
of engineering final accounts will be paid within 28 days. The balance will be
regarded as the margin and will be paid within 2 years from the date of
completion of the construction. Other situations should solute according to the
General Terms. Employer should ensure that 75% of cost of labor will be paid
before the Spring festival of 2010. 

29 




Supply of equipment and materials 

27) Supplied by employer 

27.4 If the equipment and materials supplied by employer are
not same as the list, the responsibility of both sides are as following: 

(1) The unit price is not same as the list: it should be
resolved according to1st of article 27.4 of the General Terms. 

(2) The varieties, size, model and quality are not same as the
list: it should be resolved according to the 2nd of article 27.4 of
the General Terms. 

(3) The materials that the contractor has rights to make up a
prescription: it should be resolved according to the 3rd of article
27.4 of the General Terms. 

(4) The arrived address is not same as the list: it should be
resolved according to the 4th of article 27.4 of the General Terms.


(5) The amount of supply is not same as the list: it should be
resolved according to the 5th of article 27.4 of the General Terms.


(6) The arrived time is not same as the list: it should be
resolved according to the 6th of article 27.4 of the General Terms.


27.6 The settled methods of equipment and materials should be
provided by the contractor. It should be resolved according to the relevant
city’s regulations. 

28) Supplied by contractor 

28.1 The appointments of equipment and materials which are
supplied by the contractor. When the materials are bought by the contractor, the
construction materials should meet the National construction standard. The
materials that the price are adjustable, the contractor should purchase by
inviting bid on the conditions of the same payment term with employer. The
producer, brand and price should be confirmed by the employer. The employer has
rights to prohibited for use when it isn’t confirmed by the employer. The price
of materials should be confirmed within 7 days when the contractor provided the
visa of price of materials. If there is no confirmation and suggestions are
provided, it will be read as an agreement. 

Engineer Change 

According to article 29, 30, 31, the Engineer change should be
settled every month or put forward and hand in. 

Inspection of Completion and Settlement 

The Inspection of Completion is executed according to General
Terms. 

The contractor should make and provide the final settlement
documents to the employer within 56 days when the construction was completed. The contractor should delegate the
approving budget department to audit it when the contractor received the
settlement documents. The audit should be completed within 90 days. If they
impede the audit and cause the prolongation, it will be regarded as an
agreement. They are settled by stages according to above regulations. The other
situations should be resolved according to General Terms. 

30 




32) Inspection of completion 

32.1 The appointment of providing as-build drawing: Providing
one copy with one month. If no inspection materials was provided by the
contractor, part A has rights to refuse pay the project funds. If the payment is
overdue, one day’s last fee is 1‰ of the total contract sum. 

32.6 The scope and complete time of interim completion
construction: an execution clause 

Default, Claim and Disputes 

35) Default 

35.1 The responsibility for default of employer as following:


If the employer breaches of contract that he should accept
responsibility according to article 24 of General Terms: an execution clause


If the employer breaches of contract that he should accept
responsibility according to article 26.4 of General Terms. The responsibility as
following: If within 2 months, it will be calculated according to the interest
payment. If more than 2 months, it will be calculated according to 120% of the
interests payment. The losses will be assumed by the employer. 

If the employer breaches of contract that he should accept
responsibility according to article 33.3 of General Terms. The responsibility as
following: If within 2 months, it will be calculated according to the interest
payment. If more than 2 months, it will be calculated according to 120% of the
interests payment. The losses will be assumed by the employer. 

Any other responsibilities of breach the
contract      -----

35.2 The responsibility of breach the contract of contractor is
appointed in the contract. 

If the contractor breaches of contract that he should accept
responsibility according to article 14.2 of General Terms: If there is the
possibility to accomplish the project one day ahead or one day delayed, the
reward or penalty for everyday is one ten-thousandth of the total project funds.
Award and punishment approaches of stage control points are ahead or delayed one
day. The award and punishment of everyday is one ten-thousandth of the total
project funds, and executing according to progress payment. 

If the contractor breaches of contract that he should accept
responsibility according to article 15.1 of General Terms: The contractor should
carry out construction strictly in accordance with design drawing, state
regulations and reasonable requirements of employer. The economic losses should
be assumed by contractor if the losses are caused of quality of project. What’s
more, the contractor should pay the late fee to employer. The amount of late fee
is 50% of the economic losses. 

31 




Any other responsibilities of breach the
contract      -----

37) Contention 

37.1 If there are contentions during the performance of
contract, the both sides appointed as follows: 

(1) Providing conciliation by 

(2) Adopting the 2nd solution methods and
arbitrating to  ------ committee applies for the arbitration lawfully or to
institute legal proceedings in the Intermediate people’s court of Weihai city.


Others 

38) Subcontract engineering 

38.1 The subcontract engineering which is permitted by
employer: If no permission in written is provided by employer, the contractor
has no rights to subcontract the construction. Subcontract units
are:     ------


39) Force Majeure 

39.1 Some appointments of Force Majeure: Ms 6 or over
earthquake, execution of main structure in the conditions of Ms 6 gale lasting
more than one days or execution of other structures in the conditions of Ms 8
gale lasting more than one days, more than 200mm precipitation in the conditions
of heavy rain and snow lasting more than one days. Others executed according to
the General Terms. 

40) Insurance 

40.6 The contents of Insurance are appointed as follows: 

	(1) 	
      The contents of Insurance of the
      employer:    --------

		
      The Insurance projects that the employer delegates to the
      contractor.    -----

	 	 
	(2) 	
      The contents of Insurance of the contractor: executing
      the article 40.4 of General Terms



41) Assurance 

41.3 The assurance projects appointed by the both sides are as
follows: 

(1) The employer provides performance of contract Insurance.
  The methods of assurance are: . Assurance contract will be regarded as the attachment
  of the contract. 

(2) The contractor provides performance of contract Insurance.
  The methods of assurance are: . Assurance contract will be regarded as the attachment
  of the contract. 

32 




(3) Any other assurance projects: --- 

46) The copies of contract 

46.1 The appointed copies of the contract. 6 copies and giving
each 3 copies 

47) Supplementary Items 

47.1. The foundation and waterproof professional separately
project, the employer may make the professional separately contract according to
actual conditions according, and the employer takes the responsibility to fully
manage the project. 

47.2. The project which is contracted separately by employer,
the construction workers must have matching qualifications and ability. The
contractor takes the responsibility to coordinate the construction rate and
construction quality. The contractor takes the responsibility to the epibolic
project. The overhead expenses are discussed. 

47.3. The visa and technical information should be verified by
the employer in 28 days and get the acknowledgement. What is out of time to be
verified or come up with any suggestions means it is accepted by the employer.


47.4. The contractor should take the responsibility to collect
the technical information of the epibolic project, ensure the middle check and
completed check. 

47.5. The concrete which is made in the major project is
commercial concrete. 

47.6. The material and equipment supplied by the employer, the
contractor should offer the material supply plan in 30 days before constructing.
The employer should provide the material as the plan, not to return the
overcharge and demand payment of the shortage. At the time of settling accounts,
the over 5% part of the overcharge return according to the price multiply 110%
to the Party A, the shortage returns to the Party B. 

47.7 If there are uncomplicated work after inspections of
completion, the employer has right to request them finish project in due time
and pay for that. 

47.8 The employer must pay for the workers unconditional
priority, if labor dispute leads to the strike, and after investigating, that is
the contractor’s obligations, they must pay 50,000 RMB to employer every time,
and the default fee can be deducted from the project fee. And this may cause
delaying should not be prolonged. 

47.9 The contractor can not subcontract the project to others
without the agreement of employer, and employer has right to terminate the
contract (the loss will be undertaken by the contractor) and charge 5% of the
project fee as punishment. 

47.10 If the employer has difficulty in paying, building
materials can offset and both parties can use supplement to negotiate. 

47.11 Unless the employer can not afford the project fee, the
contractor should not stop working, or the contractor must pay at 5% of the
project expense as default fee, the employer can make the fee offset. 

33 




47.12 The employer sends out the workers who have worked in Bao
Gang Company for 5 years. And the project manager also the technical leader must
have experience for 10 years, such requests must have certifications unless the
contractor have the right to replace. 

47.13 The employer must make filing procedures in time when the
contract has been signed in 2 months. If this is over inspection period, Party A
have the right to cancel the contract and charge Party B 100,000. The contractor
must undertake the default responsibility due to the lack of procedure and cause
delaying. 

34 




Attachment 1 

The Contractor Contracting Items Sheet 


	Construction 
name 	Scale 
	Area 
	Structure 
	Levels 
	Span 
	Content 
	Cost 
	Starting 
date 	Completion 
date 
	Longhai 
International 
Mansion 	

	60 
thousand 
	Frame 

	

	

	

	About 
70 
million 	

	


	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 



35 




Attachment 2 

The Employer Supplying Material and Equipment Sheet 


	ID 
	Kind 
	Type 
	Unit 
	Amount 
	Price 
	Levels of 
Quality 	Supply Time 
	Service 
Address 	Remark 

	  	  	  	  	According 
to the 
Employer
      
material 
plan sheet 
	  	According to 
Design,
      
requisition and 
the Employer 
material plan 
sheet 	According 
to the 
Employer
      
material 
plan sheet 
	Employer 
Factory or
      
Working-yard 


	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 



36 




Attachment 3 
Quality Guarantee Contract of Housing
Construction Project 


	Employers (full name): 	Weihai Economic & Technology
      Development Zone Longhai Properties Co., Ltd. 
	Contractor (full name): 	Shanghai Baogang Construction
      Engineering Corporation (Group) 


In order to guarantee Longhai International Project
(Construction Name) to use normally in useful life, the Employers and Contractor
sign the Quality Guarantee Contract through the consultation. The Contractor
takes the responsibility of quality in quality guarantee time according to the
relational regulations and the agreement of both parties. 

No. 1 Range and Content of Quality Guarantee Contract


The range of quality guarantee includes the foundation project,
major structure project, waterproof project and other appointed construction, as
well as electric wire project, water pipe project and heating project. The
detailed quality guarantee is appointed by the both parties as follows: In the
project range of the construction and installation project of the contractor.
The epiboly project is out of the range. 

No.2 Quality Guarantee Period 

The Quality Guarantee Period is counted since the construction
is completed. The monomial completed project should count the quality guarantee
period separately. 

According to the relational national regulations, considering
the detailed project, the both parties agree the quality guarantee time as
follows: 

	1. 	
      The construction is designing service life years, and the
      waterproof project is 5 years.

	2. 	
      The electric wire project and the water pipe project are
      2 years.

	3. 	
      The heating project is 2 period.

	4. 	
      The public construction of open-air sewers project and
      Interior roads are --- years.

	5. 	
      Other agreement : 
----------



No.3 Responsibility of Quality Guarantee 

1. The items of guarantee range, the contractor should send for
repairing in 7 days after receiving repairing message. If the contractor did not
send for repairing in appointed period, the employer may ask for others to
repair, and the repair cost deducts from the quality guarantee funds. 

2. Urgent first-aid repairing accident. The contractor should
send for repairing at once after receiving the accident message. The accident
which is not the quality from the contractor, the cost should be paid by the
employer. 

3. In the reasonable useful period of the national regulations,
the contractor should ensure the quality of foundation project and major
structure project. The contractor should take the responsibility to pay for the
injury of the person or property in the reasonable useful period of the
construction because of the contractor. 

37 




No.4 Payment of Quality Guarantee Funds 

The appointed quality guarantee funds of the construction are
5% of the contract. 

The both parties come to an agreement that the quality
guarantee funds which the contractor pays to the employer is
-------------------- (in capital). The interest rate of bank of the quality
guarantee funds is -----------. 

No.5 Returning of Quality Guarantee Funds 

In 2 years since the construction is completed. 

No.6 Others 

Other appointed quality guarantee items :------------. 

The Quality Guarantee Contract as the appendix of the
construction contract should be signed by both contractor and employer. 

38