EXHIBIT 10.2
INVESTMENT MANAGEMENT CONTRACT
PARTY A: THE PEOPLE'S GOVERNMENT OF WUQING DISTRICT, TIANJIN CITY
PARTY B: GUANGDONG XINXINGMEI ENVIRONMENT PROTECTION SCIENCE AND TECHNOLOGY
INVESTMENT CO., LTD
According to The Contract Law of the People's Republic of China and other
related laws and regulations, Party A and Party B promised to manage Wuqing
First Sewage Disposal Factory via the way of BOT. In order to clarify rights and
obligations of two parties, it concludes the contract for mutual observance
after negotiation of two parties.
1. CONSTRUCTION OF PROJECT OF SEWAGE DISPOSAL FACTORY
1.1 The name of project is Wuqing First Sewage Disposal Factory. (It is
called the Sewage Disposal Factory).
1.2 The construction site is located in Tinan Road in the Wuqing
Development District
1.3 The design capacity of disposal sewage of the project amounts to
10,000 tons/day.
1.4 The total sum of project pricing is assumed to RMB 8-9 million.
1.5 According to the stipulation on article 1.3 in the contract, Party B
is responsible for project design, investment (financing),
construction, debug and management.
1.6 Party B selects "MHA Sewage Disposal Techniques"(See attachment 1)
as the applicable art for the project. In terms of project design,
it shall take the bases of "Report of Evaluation on Environment
Influence" and "Official Response of Evaluation on Environment
Influence" in order to design the standard for water quality. The
subject and index involved in "Report of Evaluation on Environment
Influence" and "Official Response of Evaluation on Environment
Influence" shall be taken as the design parameter.
Chart 1.1
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Subject Index of Water Access Index of Water Exceeding implements the
first standard of GB8978-96
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CODcr mg/L =<460 =<60
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BOD5 mg/L =<180 =<20
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SS mg/L =<260 =<20
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Ammoniacal nitrogen mg/L =<35 =<15
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Chroma diluted multiple =<128 =<20
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phosphate mg/L =<4.0 =<1
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PH 6-9 6-9
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1.7 Party B is responsible for the following duties
1) The primary design, the construction drawing design and the
construction design within the extent of the Sewage Disposal
Factory(pound)>>
2) The bidding for civil construction(pound)>>
3) The earthwork digging and backfilling within the bound of the
sewage disposal factory(pound)>>
4) The civil construction project (including indoor fitment, road
and fence in the factory), the electric power project, the
project of water supply and drainage, the craftwork equipment
and the installation project, the virescence project, the fire
control, the flood prevention and etc within the bound of the
sewage disposal factory.
5) The design and construction on the road, water and electricity
between the bound of the sewage disposal factory and the
construction red line.
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6) The debugging on all the projects within the bound of the
sewage disposal factory(pound)>>
7) The uncompleted matters that are promised by related laws,
regulations, policies and the contract.
1.8 Party A is responsible for construction on architecture
establishment out of water access and exceeding mouths of the sewage
disposal factory, which ensures the smooth delivery of the sewage
and the smooth discharging of the rinsing water.
1.9 Party A assists Party B to contact a local bank and apply for loans
on construction of the sewage disposal factory. Party B is
responsible for negotiating with the bank for the detailed sum and
the form of the loans.
1.10 Party A is responsible for providing the land for the project
covering 8 Mu for free, and meeting requirements for weight bearing
of 9 tons per square meters on the base. The deadline of the land
using right from Party B shall be the same with the deadline of the
sewage disposal factory managed by Party B.
1.11 Party B is responsible for connecting road, water and electricity to
the red line on the land before construction, and ensuring the
flattening of the construction field
1.12 Party A assists Party B to transact businesses which are under the
administration of sectors of Party A, such as project establishment,
transferring of land using right and other related procedures on
declaring response and establishment
1.13 Party A delivers the design and construction invitation for Party B,
meanwhile, Party A provides basic design parameters such as red
construction blueprint and underground construction within the range
of land use, elevation of pipelines of water access and exceeding of
the sewage disposal factory, points of water use and electricity
use. After receiving the invitation from Party A, Party B shall
complete the primary design blueprint within 30 working days. After
agreement from Party A within 90 days since the next day, Party B
shall complete construction design and deliver it to be checked by
Party A. After qualification, Party A will sign in the checking
contract.
1.14 When designing the project of the sewage disposal factory, Party B
is responsible for design a calculation establishment each for both
parties in the sewage factory for the sake of transportation
undertaken by Party A for establishment of the sludge storage
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1.15 After complete all declaring procedures and blueprint checking, and
items promised on Article 1.11, Party A shall deliver the
construction notice to Party B, and Party B shall start
establishment within 7 days after it receives the notice. If the
consecutive construction period for the project of the sewage
disposal factory lasts for 300 days, the construction period shall
be calculated right from the construction day.
l.16 In the construction period of the project of the sewage disposal
factory, Party A shall assist Party B to apply for related derating
policies within the range of national policies, laws and
regulations. And Party A shall coordinate in solving conflicts and
problems found in local sites that influence the construction of
Party B.
1.17 The debugging period for Party B lasts for 90 days after the
completion of the project. Party A shall deliver the expenditure for
the sewage disposal to Party B according to the amount of sewage
disposed in practice and the standard of 0.40% RMB per ton. (When
the sewage amount provided from Party A is lower than the minimal
sewage amount promised on Article 2.5 in the contract, Party A will
pay the expenditure for the sewage disposal to Party B according to
the minimal sewage amount promised on Article 2.5 and the stand of
0.40% RMB per ton.
1.18 After completion of the project and qualification of the debugging,
Party B will inform Party A for acceptance of the project. After
receiving the notice of project acceptance within 7 days, according
to the blueprint and the signature of both Parties, Party A shall
complete acceptance for the project within 10 working days. If Party
A can't complete the acceptance within the time, it is considered
for qualification.
1.19 The acceptance and supervision unit for the water quality from the
sewage project is Wuqing District Environment Supervision Station.
Provided the supervision result meet the guideline listed in the
chart of 1.1 in the contract sheet, it is considered as qualified
acceptance. Party B can consign the national station to take the
business of supervision if necessary, and take the supervised data
from the national center station as the norm. The daily disposal
scale for the acceptance of the sewage shall be based on the design
scale. If Party A can't provide the amount of sewage for the sewage
design, it doesn't influence the acceptance of the project.
2. MANAGEMENT OF THE SEWAGE DISPOSAL FACTORY
2.1 The confirmation on the period of management for Party B shall start
from the qualification day of the project. The contract terminates
on the same day 20 years later. Within the period, Party B shall
manage the sewage disposal factory independently with the agreement.
as the return for investment, Party B shall possess the profit made
in the factory.
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2.2 Within the management period, Party B is not allowed to transfer the
right agreed in the contract independently. If needed, Party B shall
consult from Party A for permission.
2.3 Within the management period, Party A confirms the undertaking unit
for balancing the sewage disposal expenditure. After the
authorization from Party B, Party A can make a formal document for
attachment of the contract, which has the same legality with the
contract. The sewage disposal factory will direct balance with the
undertaken unit confirmed by Party A.
2.4 The pricing standards for the sewage disposal expenditure:
[omitted].
2.5 During the normal operation for the project, Party A ensures to
provide the sewage disposal amount for 7000 tons per day in the
first year; 8000 tons per day in the second year; 9000 tons per day
in the third year; 1,0000 tons per day in the fourth year agreed on
the article 1.3 in the contract. If Party A provides the sewage
amount less than the agreement on the contract in the years above,
it shall pay for the sewage disposal expenditure in real practice;
If Party B provides the sewage amount more than the agreement on the
contract in the years above, it also shall pay for the sewage
disposal expenditure in real practice. Within 3 years on normal
operation of the project, Party A shall pay the balance with 0.28
RMB per ton between the real amount of sewage in disposal (It shall
be no less than the agreed minimal sewage amount) and the amount of
sewage on design as the compensation for investment and construction
from Party B. During the management period of Party B, if the sewage
amount needed for disposal exceeds the design scale of the project,
the two parties shall negotiate for spreading the sewage disposal
factory.
2.6 The checking time for the sewage disposal is 4:00 pm on 28th every
month. The balance unit of Party A and the sewage disposal factory
will control each of the calculation meters, and check two records
at 6:00 pm on the day before the validity of the signature. If the
error for the recorded water amount between two meters is no more
than 1,000 ton per month, it shall be calculated on the average
point of data between two parties. Otherwise if the error is more
than 1,000 ton per month, it shall check the meters of two parties.
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2.7 It shall take the total number of the checking sheets approved by
two parties as the payment credential for the sewage disposal
expenditure. Party A shall deposit the expenditure for the sewage
disposal on the agreed account. Before 5th every month, Party A
shall transfer the balance into the account of Party B for the
expenditure last month. (It shall postpone for 5 days at most in
case of holidays).
2.8 Within the management period of Party B, in the case of large rise
and fall for comprehensive INP published by the country, two parties
can negotiate for adjusting the standard for the balance price. The
year for concluding the contract shall be taken as the basis.
According to the calculation of national statistics, if the rise and
fall of comprehensive INP is no more than 15%, it will not adjust
the standard for price; if it exceeds over 15%, the comprehensive
INP will make corresponding adjustment accordingly.
2.9 After normal operation of the sewage disposal factory, Party B can
make fixed checking for at least once every year according to the
operation state. The checking time lasts for 30 days every time
(including the debugging period). Party B shall inform Party A 7
days before the check and repair. When water quality exiting from
the sewage disposal factory during the checking and debugging period
meets the second standard, namely, GB 8978-96, Party A shall pay
Party B with 0.40 RMB per ton for the real amount of disposal in
practice.
2.10 Under the temperature of 8iae, the efficiency for the sewage
disposal is distinctively reduced, therefore, when the sewage
disposal factory finds the temperature of sewage is lower than 7iae,
it shall inform Party A immediately to check the temperature of
water. When two parties jointly confirm the water temperature access
is lower than 7iae, and it dues to the natural reason for the
guideline doesn't meet the agreed standard on the chart 1.1 of the
contract. In that case, the sewage disposal factory will not take
the responsibility, but Party A pays the expenditure for the amount
in practice from the sewage disposal factory.
2.11 If the term of power cut is over 2 days due to the reason beyond the
control of the sewage disposal factory (Party A will pay nothing to
Party B within 2 days), which causes paralysis of the sewage
disposal system, leads to the guideline for the water exceeding from
the sewage disposal factory that can't meet the agreed standard on
the chart 1.1 of the contract, Party A shall pay Party B for the
expenditure of the sewage disposal according to the water amount
agreed on the article 2.5 and the price standard agreed on the
article 2.4 in the power period and the debugging period after power
is on. (The debugging period lasts for 20 days).
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2.12 Party A is responsible for transporting out dehydrated sewage
produced from the sewage disposal. The sewage disposal factory is
responsible for the expenditure engaged in qualification for sewage
and the management expenditure applied in the dehydrated course of
mud.
3. HANDOVER OF THE SEWAGE DISPOSAL FACTORY
After the expiration of the management for Party B, it shall hand over the
sewage disposal factory to Party A with establishments in good conditions,
smooth operation without any dissension on property. 90 days before the
formal handover, Party B shall deliver the handover notice to Party A.
meanwhile, Party B shall provide all the craftwork and technology the
sewage disposal to Party A, and takes responsibility for training
technicians for Party A. After the handover, on the transferring period
when Party A has yet to confirm other management units, Party B will keep
management until the time when Party A confirms the management unit. (The
time shall be no more than 60 days). If Party B tends to keep management,
the two parties can negotiate for concluding the contract additionally.
4. OTHER ARTICLES(POUND)(0)
4.1 Party A shall publish the measures on imposition of the expenditure
management on the sewage disposal.
4.2 Party A shall negotiate the water accessing index according to the
chart 1:1 in the contract in order to control water quality of the
industrial liquid water which is ejected into the administrative
sewage network. If the water quality of the water ejected exceeds
over the guideline listed in the chart 1.1 of the contract, which
causes that the disposed sewage can't meet the guideline. In this
case, Party B and the sewage disposal industry will take no
responsibility. Party A shall pay the disposal expenditure for the
sewage disposal industry agreed in the article 2.5. Party is
responsible for the sewage disposal expenditure beyond the
guideline.
4.3 During the administration of Party B. The price for the sewage
disposal industry shall implement the municipal standard in Tianjin
City.
4.4 Party B shall pay the expenditure of acceptance and supervision for
the sewage disposal factory. The unit that requires supervision will
pay the expenditure of supervision after being checked for approval.
Party A is responsible for organizing the acceptance meeting and
Party B is responsible for the expenditure.
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4.5 Notice
In the course of implementing the contract and any notice, it shall
take the written form vie sending or registering for post,
teleprinting or faxing. The address is stated as followings:
Address of Party A: ▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇
Post code: 301700
Telephone: (▇▇▇) ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇▇▇▇▇▇
Address of Party B: The 6th Building, Guowei Mansion, ▇▇. ▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Province
Post code: 510095
Telephone: (▇▇▇) ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇▇▇▇▇▇
Any party that changes any item in the address above shall inform
the other party 7 days in advance. The change is valid after the
notice is confirmed.
4.6 If the compulsory criterions and standards for national sewage
disposal factory changes, the new technology adopts for Party B
shall meet the new standard regulated by the country. Two parties
shall negotiate for compensating the investment from Party B with
the delay of the management period.
5. RESPONSIBILITY OF BREACHING THE CONTRACT
5.1 Before the acceptance of the project, if Party A can't provide
conditions agreed in the contract, which causes loss from Party B,
hereby Party A shall be responsible for the real loss from Party B.
After the sewage disposal factory is checked for approval and
operated formally, if Party B stops production due to the reason
from Party A, Party A shall pay for the sewage disposal expenditure
during the period of stopping production according to the amount of
sewage disposal regulated in the article 2.5 and the price regulated
in the article 2.4.
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5.2 If Party A doesn't pay the sewage disposal expenditure, right from
the second day after 5 valid working days overdue, the defaulted sum
of breaching contract shall be paid in the loan interest overdue.
Meanwhile, Party A shall pay RMB 1,000 to Party B for the penal sum
overdue for each day delayed.
5.3 If Party B can't complete the project or the project completed
doesn't meet the design criterion or the construction quality is
unqualified, Party B shall pay RMB 1,000 to Party A for the penal
sum for each day delayed.
5.4 After the normal operation of the sewage disposal factory, if Party
B breaches the following agreements due to the reason of Party B and
the sewage disposal factory, Party B shall pay the sewage ejection
expenditure to related sectors, additionally, it shall pay RMB 1,000
to Party A for the penal sum for each day delayed.
1) When Party provides the agreed amount of sewage to meet the
contract, but the amount of sewage from the sewage disposal
factory can't meet the amount agreed in the contract.
2) When the index for water accession exceeds over the chart 1.1
in the contract, and when the water quality disposed in Party
B and the sewage disposal factory can't meet the index agreed
in the contract. (Except the case that water quality leads the
paralysis of the sewage disposal system).
5.5 After the termination of debugging, if water quality from the sewage
disposal factory still can't meet the exiting guideline agreed in
the chart 1.1 of the contract, Party A will not pay Party B the
expenditure for the sewage disposal. After the termination of
debugging, if the guideline for water accession can't exceed over
the standard agreed in the chart 1.1 of the contract in the
consecutive four months, and the disposed water quality still can't
meet the standard agreed in the contract, the contract will be
relieved independently.
5.6 Within the management period of Party B, if Party B transfers the
right of management on the sewage disposal industry without
permission from Party A, the contract will be suspended;
consequently, Party B will be responsible for all the loss. If there
are such unsolvable cases as bankruptcy close-down and etc from
Party B, the right of management on the sewage disposal industry
will be transferred to Party A, and Party B will be responsible for
the original liability for the sewage disposal industry.
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6. FORCE MAJEURE
If the loss is caused by force majeure, neither of parties will take
responsibility.
7. VALIDITY OF CONTRACT
The contract has ten copies with the same validity. Party A and B hold 5
copies respectively. It is valid after the seal and signature of two
parties.
8. DISPUTE SETTLEMENT
Provided dispute occurs in the course when Party A and Party B carry out
the contract, two parties shall negotiate for friendly solution. If
otherwise, it shall be solved vie lawsuit in the People's Government that
has the right of domination.
The items that are not regulated in the contract shall be solved vie
negotiation of two parties. The additional complementary articles signed
are components of the contract, which has the same legal validity.
The contract is signed in Yongyang Hotel in Wuqing District, Tianjin City.
The contract has ten pages in all.
PARTY A: THE PEOPLE'S GOVERNMENT OF PARTY B: GUANGDONG XINXINGMEI ENVIRONMENT
WUQING DISTRICT, TIANJIN CITY PROTECTION SCIENCE AND TECHNOLOGY
INVESTMENT CO., LTD
LEGAL REPRESENTATIVE: LEGAL REPRESENTATIVE:
AUGUST 14, 2002 AUGUST 14, 2002
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