REGULAR EXPENSES TURN-KEY CONTRACT
This contract is concluded and signed by the following two parties on 30th day
of October, 1996 at Huizhou, Guangdong province, China.
Party A : Huizhou Highway Property Development Company
Party B : Huizhou Guanghui Highway Development Company
WHEREAS Huizhou Highway Property Development Co. Ltd.(hereinafter "Party
A") and Guanghui Highway Project Co. Ltd. signed "Regarding the establishment of
Guanghui Highway Development Co Ltd. Agreement(hereinafter "Cooperation
Agreement") on the 5th of August, 1996 and Huizhou Guanghui Highway Development
Co. Ltd. (hereinafter "Party B") has been established in Huizhou, Guangdong
province accordingly.
WHEREAS Party A has abundant experience in the operation and management of
highway NOW THEREFORE, in consideration of the foregoing, the parties hereto
covenant and agree as follows
1. DEFINITIONS
1.1 The road section of the first phase investment: Guangdong Huizhou
Jinlong Highway section starts from Longmen Baishashui Bridge to
Gongzhuang through Pingling with the total length 35km.
1.2 Regular Expenses: Regular expenses refer to the regular operation
expenses of the road section of the first phase investment (including
the expenses of road maintenance and damage renovation, management
fee, wages, enterprise development fund, staff incentive fund, welfare
fund, minor renovation, medium renovation , large renovation and so
on.)
1.3 Minor renovation: Minor renovations refer to the projects including
preventive maintenance and the renovation of minor damaged parts of
the highway and all the other engineering facilities.
1.4 Medium renovation: Medium renovations refer to small projects
including regular renovation and reinforcement renovation of the
general wear and partial damage of the engineering facilities of the
highway in order to restore its original state.
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1.5 Large renovation: Large renovations refer to the projects including
periodic comprehensive renovation on those relatively large damages of
the highway facilities or partial improvement within the specification
of the original technical grade and individual extension in order to
raise the traffic capacity gradually. It is necessary to carry out the
work in accordance with an approved annual plan and project budget.
2. REGULAR EXPENSES TURN-KEY ARRANGEMENT AND DURATION
2.1 Party A agrees and accepts the trust given by Party B to assist in the
management and operations of the road section of the first phase
investment. This form of trust does not include Party A's any
operation management authority conferred by Party B. Party A also
accepts and agrees Party B to pay Party A 15% of the total revenue
received from the road section of the first phase investment as the
turn-key expense to pay for the regular expenses of every year. If
there is any surplus, the surplus shall go to the Party A. However, if
there is any deficit, the Party A will make up the shortfall.
2.2 This contract lasts for seventeen years, starting from the date of
incorporation of cooperative company (Party B). From the eighteenth to
the thirtieth year, the turn-key arrangement shall be decided after a
consultation between the Party A and B.
3. THE RESPONSIBILITIES, OBLIGATIONS AND RIGHTS OF THE PARTIES
Party A's responsibilities, obligations and rights
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3.1 After Party A received the turn-key expenses specified in this
contract and compensated the actual regular expenses, any surplus
should go to the Party A. In case there is any shortfall, Party A then
is responsible for this and raises the shortfall on its own.
3.2 Party A shall organize and manage the toll booth in Pingling and any
other toll booths agreed by both parties.
3.3 Party A should do the necessary maintenance work and minor renovations
in accordance with the relevant stipulations of the state for the road
section of the first phase investment and any toll booths agreed by
both parties. Party A shall be liable for the relevant expenses.
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3.4 Party A shall be responsible for the medium and large renovations and
shall pay for the expenses within the cooperation period from the
first year to the seventeenth year.
3.5 Party A should be responsible for the medium and large renovations of
the road section of the first phase investment and can only start to
do these renovations after obtaining Party B's written consent.
Regarding the expenses as well as the starting time of these
renovations, after Party A gives its opinion, and the two parties
shall negotiate according to the situation at that moment.
3.6 To keep accounting reports and records of earnings and expenses
related to the road section of the first phase investment.
3.7 During the effective period of this contract, Party A should be liable
for any expenses incurred due to project or property losses and
injuries arising from the performance of this contract.
3.8 Party A should, on behalf of Party B, pay for all necessary tax
payments in accordance with the stipulations of the state on schedule
and the tax payments are payable by party B.
3.9 Party A shall fully perform all its obligations and responsibilities
stipulated in this contract.
Party B's responsibilities, obligations and rights
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3.10 Party B agrees Party A to advance15% of the total revenue each month
as regular expenses. Party B should pay off the operation expenses
stipulated in the contract within five working days as of the 31st
March, 30th June, 30th September and 31st December every year
3.11 Party B should supervise Party A in executing its responsibilities,
obligations of this contract and all matters related to a medium and
large renovation.
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3.12 Party B should check Party A all financial and accounting records
related to the first phase of investment.
3.13 Party B shall fully perform all its obligations and responsibilities
stipulated in this contract.
4. Both parties shall perform the responsibilities and obligations stipulated
in this contract. Any party who breaches the contract shall be liable for
all or partial responsibilities.
5. Alteration, termination and rescindment of the contract
5.1 When this contract comes into effect, it is binding. Both parties must
not alter and rescind the contract at will. In case the contract be
needed to be altered and rescinded, unanimous agreement must be
obtained from both parties and new written agreement must be reached.
5.2 During the effective period of this contract, if there are any changes
of the state policies or law and so causes any one of the parties'
interest being largely affected, the aggrieved party can request
amendment or rescindment of the contract. However, any changes of the
contract must be agreed by both parties after consultation.
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