Chartered Right Agreement on Pingdingshan-Linru Expressway Project Party A: Bureau of Communications of Pingdingshan City Party B: Pingdingshan Pinglin Toll Road Company Ltd. April, 2003
Pingdingshan-Linru
Expressway Project
Party
A:
Bureau of Communications of Pingdingshan City
Party
B:
Pingdingshan Pinglin Toll Road Company Ltd.
April,
2003
This
agreement is signed by the following two parties in Pingdingshan City, Henan
Province, China.
Party
A:
Bureau of Communications of Pingdingshan City (authorized by the People’s
Government of Pingdingshan City)
Party
B:
Pingdingshan Pinglin Toll Road Company Ltd.
In
regard
to the matters as follows:
I.
Party A is the competent department of communications of the People’s Government
of Pingdingshan City, signing the agreement with Party B through the
authorization of the People’s Government of Pingdingshan City.
II.
Party B is a limited liability company established in accordance with law,
mainly engaging in the investment, construction, operation, management and
maintenance of communications infrastructure projects, such as operational
highway, etc.
III.
The
People’s Government of Pingdingshan City agrees to grant Party B the chartered
right stipulated in the agreement, in order to ensure the rights of Party B
given by the People’s Government of Pingdingshan City and the departments under
its jurisdiction and guarantee the rights and interests of project investment
subject and all shareholders of Party B.
The
following agreements are made upon the consensus of two parties:
Article
I
Chartered Right Authorization and Basic Contents
I.
Party
A grants Party B the chartered right
1.
Authorization of Business Chartered right
Under
the
preconditions of the agreement complying with the obligations to Party B and
other articles, herein Party A grants the chartered right to Party B and the
chartered right is valid in the whole period of authorization.
2.
Exclusiveness
The
chartered right granted to Party B in accordance with the agreement is exclusive
to Party B in the period of authorization. Party A shall guarantee that any
part
of the chartered right will not be granted to any other party in the period
of
authorization.
3.
Chartered right Period
(1)
The
chartered right period is from the date when the agreement is signed to the
expiration date of tolling operation period of Pingdingshan-Linru Expressway.
(2)The
tolling operation period mentioned above is acquired by Pingdingshan-Linru
Expressway in accordance with the stipulations of laws and regulations, such
as
Highway Law of the People’s Republic of China,
etc.
(3)The
extension of chartered right period shall be approved upon written approval
of
two parties in accordance with the stipulations of current laws and regulations
or those issued in the future.
II.
Basic
contents of chartered right
The
chartered right mainly includes the rights as follows:
(1)Management
right of construction;
(2)Management
right of operation and toll collection right.
Article
II Management Right of Construction
Party
A
grants the management right of construction of Pingdingshan Pinglin Expressway
Project to Party B, which includes the rights of design, construction,
reconstruction, extension and conservation of the Expressway project and
relevant auxiliary facilities. Party B shall select a third party with
appropriate qualification level for design and construction during its
enforcement of rights.
Meanwhile,
Party B is also responsible for the early-stage works of Pingdingshan-Linru
Expressway Project, such as design, construction, quality control and
corresponding obligations during the engineering construction.
During
the construction of Pingdingshan-Linru Expressway, the rights and obligations
of
both parties mainly include the aspects as follows:
I.
Early-stage works of the project and acquisition of construction land use right
1.
Party
A shall assist Party B in the preparation of Project
Feasibility Study Report
and
design document in accordance with relevant regulations and technical
specifications, which shall be submitted to examination and approval authority
after being checked by Party A.
2.
Party
A shall assist Party B in the acquisition of connect section use right of the
Pingdingshan-Linru Expressway.
3.
Party
A shall assist Party B in the acquisition of construction land use rights and
Certificate of Land Use Right of Pingdingshan-Linru Expressway.
II.
Engineering construction
Party
B
shall finish the engineering construction in accordance with design
specifications, all other applicable specifications and construction plan,
and
undertake the expense and risk. Party B has the right to select qualified
contractor and sign construction contract for completing the construction
projects in accordance with the procedures stipulated by the country.
Party
B
shall submit the construction plan of Pingdingshan-Linru Expressway to Party
A
for its approval within 30 days since the date when the engineering design
document is approved. Party B can submit the amended proposal for construction
plan to Party A, and cannot make changes to the plan without the prior written
approval of Party A, who cannot delay in replying to the proposal of Party
B
without any reason.
Before
the construction completion date, Party B shall report to Party A about the
schedule of design and construction progress of Pingdingshan-Linru Expressway.
The report shall give detailed description to finished projects and projects
under construction according to project plan and other issues reasonably
required by Party A. After completing the construction, Party B shall provide
all drawing papers, other technical and design data of finished projects,
completion records and the copies of other data possibly needed by Party A.
III.
Engineering quality control, acceptance and completion
1.
Supervision and Inspection
(1)
Party
A or the representative appointed by it has the right to carry on supervision
and inspection on the construction of Pingdingshan-Linru Expressway, but shall
avoid the interference to the construction progress as much as possible.
(2)
Party
B has the right to appoint representatives to take part in the inspection and
acceptance of Pingdingshan-Linru Expressway.
(3)
All
expenses of supervision and inspection shall be undertaken by Party B.
(4)
Party
B shall provide assistance and some temporary required equipment for Party
A in
accordance with relevant stipulations for holding corresponding supervision
and
inspection on the project construction.
2.
Engineering Completion Acceptance
The
acceptance of construction completion and final acceptance shall be implemented
in accordance with relevant state stipulations.
Article
III Management Right of Operation and Toll Collection Right
I.
Operation, conservation and maintenance
1.
Obligations of Party B
(1)
Within 90 days before the estimated completion date of the project, Party B
shall prepare to submit the management methods used for its operation,
conservation and maintenance of Pingdingshan-Linru Expressway in accordance
with
technical standards issued by Ministry of Communications and other relevant
authorities to Party A.
(2)
Party
B shall conduct the operation, conservation and maintenance to
Pingdingshan-Linru Expressway in accordance with above management methods and
all applicable laws and regulations.
(3)
During the period from completion date to the expiration of chartered right
period, Party B shall guarantee the use of operated highway and its security
and
smoothness under such conditions as transporting important strategic materials
and equipments, military operations and rescue and relief work, etc., and bear
all expenses arising from them unconditionally (including the expenses of
consolidating and maintaining the devices, etc.).
(4)
Party
B has the right to select and entrust qualified highway maintenance company
or
other agencies to conduct the operation, conservation and maintenance of
Pingdingshan-Linru Expressway.
2.
Reporting Procedure
Party
B
shall keep the following records and report to Party A monthly:
(1)
Detailed records of daily traffic volume and records of providing emergency
services of Pingdingshan-Linru Expressway;
(2)
Reports on any conservation and maintenance to Pingdingshan-Linru
Expressway;
(3)
Any
other data on the operation, conservation and maintenance of Pingdingshan-Linru
Expressway reasonably required by Party A.
4.
Security and Emergency
Party
B
shall:
(1)
Provide all necessary security measures for Pingdingshan-Linru
Expressway;
(2)
Prepare emergency response plans related to Pingdingshan-Linru Expressway
through consultation with Party A.
5.
Expressway Closing
(1)
For
security considerations or the purposes of scheduled or urgent conservation
and
cleanliness, Party B can apply to Party A for closing the whole or any part
of
Pingdingshan-Linru Expressway. Party A shall give timely reply after conference
with relevant departments of the government.
(2)
Party
A can demand to temporarily close Pingdingshan-Linru Expressway for the reasons
of public security, emergent situations or state security, and Party B shall
carry out immediately.
II.
Toll
1.
Party
B can set toll station on Pingdingshan-Linru Expressway upon approval in
accordance with relevant state laws and regulations, and Party A has the right
to supervise the setup of toll station of Party B in accordance with relevant
state regulations.
2.
Toll
Collection
Party
B
has the right to collect tolls from the users of the Expressway during the
term
of chartered right. (Exemption regulated by relevant departments of State and
Provincial People’s Government are exclusive)
3.
Determination of Toll Collection Standard
Toll
collection standard of Pingdingshan-Linru Expressway shall be proposed by Party
B and carried out upon approval of Henan Development and Reform Commission
and
Henan Provincial Communications Department reported by Party A and relevant
departments according to stipulated procedures.
III.
Financial management, financial statement and report
1.
Obligations of Party B
Party
B
shall raise all necessary funds for design, construction, operation,
conservation and maintenance of Pingdingshan-Linru Expressway in accordance
with
the stipulations of the agreement.
2.
Financial Statement
Party
B
shall take responsibility for its own business operations, work out financial
statement according to the laws and regulations and submit it to Party A with
other information related to the financial condition of Party B requested by
Party A, mainly including:
(1)
Annual financial statement audited by qualified independent auditor, including:
(2)
Balance sheet;
(3)
Income statement;
(4)
Statement of Cash Flow.
(5)
Quarterly summary of cash receipts and disbursements of Party B.
3.
Memorandum Account
Party
B
shall keep:
(1)Relevant
account books;
(2)All
other records related to the operation, conservation and maintenance of
Pingdingshan-Linru
Expressway, which shall be kept at fixed place of Party B within borders of
the
People’s Republic of China. Party A shall be informed if there is any change of
Party B’s residence.
Article
IV Adjustment of Toll Charging Standard
Party
B
can present an application on adjustment of charging standard to both the
Development and Reform Commission and Communications
Department
of Henan Province according to the state and local price indexes during the
same
period, or particular cases that those factors like reasonable operation item
cost changes to a certain extent.
Article
V
General Obligation of Party A
I.
Comply
with laws and regulations
Party
A
shall comply with relevant laws and regulations when enjoying rights and
fulfilling obligations of the agreement.
II.
Approval and help with getting approved
In
its
rights and administration area, Party A shall support Party B with necessary
approvals of project construction, operation, maintenance and management by
hard
work according to laws and regulations, and help Party B to get other necessary
approvals under the agreement.
III.
Noninterference
According
to the agreement, construction, operation, maintenance, and management of Party
B can not be interfered by Party A, unless the interference is necessary for
the
protection of public interest and security or required by laws or
regulations.
IV.
Good
technology and operation of Pingdingshan-Linru
Expressway and other equipments shall be insured in good condition by Party
A to
ensure that the traffic of Pingdingshan-Linru Expressway is effective and
safe.
Article
VI General Obligation of Party B
I.
Comply
with laws and regulations
Party
B
shall comply with all the laws and regulations acceptable for the project and
operate legally according to the laws and regulations issued by state and
Ministry of Communication.
II.
Construction, operation and maintenance
Party
B
shall implement the project in accordance with contract and be responsible
for
its own risks, making investment, development, design, financing, construction,
check and acceptance, operation, maintenance and management to the
Pingdingshan-Linru Expressway within chartered right period according to the
agreement.
III.
Party B shall maintain the road issues operated and managed by itself and other
attached equipments to ensure that they are in good condition according to
the
technical specification and operation specification issued by Ministry of
Communication.
IV.
Party
B shall accept the management and supervision of Party A according to applicable
laws, regulations and normative documents.
V.
The
design and construction of Expressway shall conform to the relevant rules and
regulations provisions such as state environment protection, protection of
historical relics, cultivated land protection, soil erosion preventing,
etc.
VII.
Party B shall take responsible for the behavior and faults of contractors and
employees of Pingdingshan-Linru Expressway.
Article
VII Promise of Party A
I.
Party
A shall promise that the chartered right of Party B shall not be damaged or
interfered in any way according to the agreement.
II.
Party
A shall promise that Party B has the independent legal entity property ownership
and autonomy in management by law.
III.
If
there is any new, rebuilt and expanded road with the equal scale and technology
standard, paralleling or going the same direction with Pingdingshan-Linru
Expressway in its 30 kilometers range, Party A shall fully ask advice from
Party
B, but Party A does not promise that advice from Party B shall be fully or
partly adopted.
IV.
Party
A promise that it is responsible for the coordination of not charging any other
fees from Party B except the taxation expenses payable regulated by state law,
decrees and provincial government announced provisions.
Article
VIII Previous Rights
Party
A
ensures that there is no other third party enjoying the same chartered rights
as
Party B in the agreement from the date of signing the agreement.
Article
Ⅸ
Rights
Guarantee of Party B
I.
Party
A will try best to ensure that the chartered right and priority to Party
B would
not be damaged or interfered in any way according to the agreement.
II.
Party
A will try best to make the rules and regulations issued by departments of
the
government do not conflict with the agreement or have no unfavorable influence
to the performance of agreement.
Article
X
Force Majeure Factor
I.
Termination of agreement led by Force Majeure
l.
Each
party has rights to terminate the performance of its obligations under the
agreement when blocked by uncontrolled situation which is Force Majeure
including but not limit to natural disaster, wars or laws changing.
2.
The
party who declares to be influenced by Force Majeure can only terminate its
performance of obligation according to the required situations in last article
when the party could not foresee the condition when signing the agreement or
could not avoid or overcome the situation or consequence even taking all the
measures.
II.
The
following conditions could not be taken as Force Majeure by Party
B:
▇.
▇▇▇▇▇
during the obligation performance by contractors, operators or other
sub-contractors
2.
Fault
or natural damage of materials, equipments, machineries or other project
components.
3.
During
the periods of construction and operation, strike by employees of Party B,
contractors, operators and any unit who takes part in the construction,
operation and maintenance of the Pingdingshan-Linru Expressway.
III.
Relevant procedures
The
party, who suffers from or feel the Force Majeure will be coming, shall inform
the other party on paper in 24 hours. The report shall make the details of
Force
Majeure influence including the starting time, influence on obligation
performance of the influenced party. The influenced party shall inform the
other
party in time when the Force Majeure is about to stop.
IV.
Expense and time change to relevant contract performance
l.
Each
of party shall undertake the Force Majeure fees unless there are other
regulations of the agreement.
2.
The
time limit of obligation performance can make reasonable extending, which shall
be the same as the Force Majeure affect on the obligation time if the influenced
party have informed the other party in advance according to the previous
provisions and meet the Force Majeure relevant provisions of this article.
Article
XI Agreement Termination
I.
The
chartered right endowed by this agreement shall be finished until chartered
right period expires, in addition the chartered right period is extended or
terminated in advance in accordance with this agreement.
II.
Party
A unilaterally terminates this agreement because of the default of party
B.
(I)
If
any event or condition listed below (any item below will cause “breach of party
B”) happens, party A can terminate this agreement at any time by sending a
written notice to party B.
1.
Party
B has liquidation or bankruptcy, and cannot pay the due debts, or prevailingly
stops paying for creditor;
2.
During
the periods of construction and operation, Party B has the serious problems
of
construction or conservation quality, and cannot implement rectification
measures within the prescribed time limit after pointing out by Party A, or
still cannot come up to the standard after rectification;
3.
Party
B leads to the serious lag of construction speed owning to subjective factors,
and it cannot complete construction projects within specified construction
period;
4.
Party
B cannot ensure the construction is fully funded, or the fund differential
is
substantial, which severely influences the project schedule;
5.
During
the periods of construction and operation, Party B cannot implement the
management function stipulated by relating policy and laws, and has serious
violations of laws and discipline, which cause baneful social
influence.
6.
During
the periods of construction and operation, Party B cannot ensure safety
production and causes serious safety accidents because of not implementing
the
provisions of Safety
Production Law.
7.
During
the periods of construction and operation, Party B seriously violates the
Environment
Protection Law,
and is
sternly punished by government departments;
8.
Party
B violates other main obligations stipulated by this agreement, and cannot
corrects its default actions within 30 days since Party A sends a written notice
requiring Party B to correct its actions.
(II).
Compensation of termination
If
Party
B violates the main obligations undertaking in this agreement, it shall
compensate Party A for any loss in accordance with Contract
Law,
and its
performance bond cannot be returned.
III
Party
B unilaterally terminates this agreement because of default event of party
A
If
Party
A violates the main obligations undertaking in this agreement, and cannot
corrects its default actions within 30 days since Party B releases a written
notice requiring Party A to corrects its actions, Party B can terminates this
agreement at any time by releasing a written notice to party A according to
the
provisions stipulated by this agreement.
Ⅳ.
Termination related with Force Majeure
According
to the relevant regulations of Force Majeure, either party can terminate the
duration of chartered right and this agreement.
Ⅴ.
Conditions cannot be terminated
1.
Party
A cannot terminate this agreement if relevant event or situation happens owning
to party A violates or neglects any action.
2.
Party
B cannot terminate this agreement if relevant event or situation happens owning
to party B violates or neglects any action.
Article
XII Project Handover after Chartered right Period Expires
Ⅰ.
Handover range
1.
After
the chartered right period expires, Party B shall handover Pingdingshan-Linru
Toll Rroad to Party A for free (without any debt). This highway cannot be
attached with a third party rights and benefits in any form. Party A does not
undertake any debt and responsibility of Party B. Pingdingshan-Linru Expressway
after hand-over shall keep good operation and technical condition. Party B
shall
submit all necessary documents, manuals and records to Party A for smooth
handing over Pingdingshan-Linru Expressway and going on the operation,
conservation and maintenance of this Expressway; in the form can be accepted
by
Party A, Party B shall transfer, handover, permit Party A to get all the
above-mentioned relevant technology and intellectual property rights on
Pingdingshan-Linru Expressway operation and maintenance, or help Party A with
getting the transfer, hand over and permits; Party B shall transfer its other
rights and interests relating relevant assets to Party A .
2.
If
Party A thinks that the facilities condition of Pingdingshan-linru Expressway
isn’t in line with relevant technical standards which are agreed upon by both
parties, Party B shall, at its own expense, carry out necessary maintenance
and
renewal. This work must be completed at least one year or at most five years
before the chartered right period expires. If Party B doesn’t agree it, it must
be decided the necessity of the work according to dispute resolution process
under this agreement.
Ⅱ.
Guarantee of Party B
When
the
chartered right period expires, Party B shall guarantee that Pingdingshan-Linru
Expressway is in a good operation state; corresponding with the agreement
requirements, the Expressway remains in a sound technical state and meet all
safety and environmental standards required by this agreement.
Article
XIII Assignment
Act
of
assignment for Pingdingshan-Linru Expressway in this agreement shall be in
conformity with relevant provisions of the current or later laws and regulations
on assignment of highway management right issued by the State.
Ⅰ.
Assignment act of Party B
Party
B
cannot transfer this agreement or any right and obligation under this agreement
without the prior written consent of Party A.
Ⅱ.
Assignment act of Party A
1.
Party
A cannot transfer this agreement or any right and obligation under this
agreement without the prior written consent of Party B.
2.
but
When merger of Party A with any government agency, administration authority
appears or Party A assigns some powers concerning toll highway administration,
Party A can transfer its rights and obligations under this agreement on
condition that transferee takes full responsibility and obligation of Party
A in
this agreement.
Ⅲ.
Guarantee setting
Without
prior written consent of Party A, Party B cannot set the rights and interests
guarantee of charging operation for Pingdingshan-linru Expressway or the
interest of third party in any from.
Article
XIV Amendments of Agreement
The
two
parties may make revisions or amendments to this agreement based on consensus
through negotiation, and shall sign a supplementary agreement separately.
Article
XV Resolution and Management of Disputes
I.
Both
parties shall perform their obligations under this agreement, and try best
to
solve any dispute, controversy or claim (here-in-after called as "dispute")
arising out of or relating to this agreement because of explanation or
implementation through friendly negotiations.
II.
If
the above disputes cannot be resolved by negotiation, either party has the
right
to submit it to China International Economic and Trade Arbitration Commission
in
Beijing and carry out arbitration in accordance with its procedure rule. The
arbitration award is final and binding upon both parties.
Article
XVI Effectiveness of Agreement
The
agreement will come into effect since legal representatives or authorized
representatives of both parties sign and seal on it.
Article
XVII Others
I.
This
agreement shall be made out seven original parts and both party A and party
B
hold two originals, respectively submit to the Pingdingshan Municipal People’s
Government, Communications Department of Henan Province, Development and Reform
Commission of Henan Province with one copy for the record, which have the same
effect in law.
Ⅱ.
Letter
of attorney by Pingdingshan Municipal People’s Government is taken as attachment
of this agreement.
Bureau
of
Communications of Pingdingshan City
Legal
representative (or authorized representative): /s/ Authorized
Person
Date:
April 2003
Pingdingshan
Pinglin Toll road Company Ltd.
Legal
representative (or authorized representative): /s/ Authorized Person
Date:
April 2003