Exhibit 10.59
Nan’an City E-commerce Construction
Project
Main Contract
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Contract No.:
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Appointer (Party A):
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Nan’an City Administrative Electronic Information Management
Company Limited
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Appointee (Party B):
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Expert Network (Shenzhen) Company Limited
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Execution time:
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MAY 15, 2007
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Execution Place:
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Nan’an City, Fujian Province
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Based on the good cooperative
relation established between Party A and Party B during the
construction of E-government project of Nan’an City, as
well as to continue the development of Nan’an City
E-government project, Party A formally entrusts Party B to
undertake the Project of Nan’an City E-commerce
Construction. According to the Contract Law of the
People’s Republic of China and the other relevant laws,
regulations and rules, following the principals of equality,
voluntariness, fairness and sincerity, upon consultation, both
Party A and Party B have reached the following terms for both
Parties to obey.
Clause One Definitions, Enactment and
Regulations
1.
Definitions
The following words and expressions shall have
the meaning hereby assigned to them unless stated
otherwise:-
1.
“Project” means the Nan’an
City E-commerce Construction Project that Party A entrusted to
Party B as the main contractor.
2.
“Party A” means the body designated
by the City government of Nan’an to undertake the direct
investment responsibility and to appoint main contractor for the
Project. i.e. Nan’an City Administrative Electronic
Information Management Company Limited.
3.
“Party B” means the main contractor
of the Project, i.e. Expert Network (Shenzhen) Company
Limited
4.
“Sub-contractors” means the
sub-contractors who execute the individual items of the
Project.
2.
Laws and Regulations:
This Contract is governed by the “Contract Law of
the People’s Republic of China” and current laws and
regulations of China.
3.
The Applicable Regulations, Standard and
Stipulates
1.
The People’s Republic of China Computer
Information Network International Networking Management
Temporary Stipulates (Ministry of National Affairs PRC
10/7/1999)
2.
The Computer Information Network International
Networking Security Management Stipulates (Ministry of Public
Security PRC 12/30/1997)
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3.
Computer Information Network International
Networking Safe Protection Policing Method
4.
Guide to Computer Software Requirements
Specifications GB/T9385-1988
5.
Computer Software Test Reference System Standard
GB/T9386/1988
6.
Computer Software Product Development reference
System Guide GB/T8567-1988
7.
Information Technology Software Production
Evaluation ISO/IEC14598
8.
Standard for Software Project Management Plans
IEEE/1058-1998
9.
Standard for Software Safety Plans
IEEE/1228-1994
10.
The People’s Republic of China Country
Standard GB17895-1999, Computer Information System Safe
Protection Rank Division Criterion
11.
The People’s Republic of China Country
Standard GB4943-1995, Safety of Information Technology
Equipment.
Clause Two Specifications of Project
The Project that Party A entrusted to Party B includes
hardware platform, E-commerce application platform software,
E-commerce security system, E-commerce application system (includes
E-commerce mall, corporate ERP system). Party B assumes the duties
of purchasing, installing, integrating, testing, maintaining and
developing of related materials and equipment (including hardware
and software) as well as training and other works that are
necessary for the normal implementation, testing and operation of
the system, albeit not explicitly stated in this Contract. Detail
specifications of the Project are listed in the Addendum in this
Contract.
Clause Three Status Quo of the Project
1.
The Project is situated in Nan’an City,
Fujian Province.
2.
Before the Project starts, B shall have full
understanding of the condition of Party A, and shall have taken
into considerations those factors that might affect the
construction of the Project and prepared corresponding
solutions.
3.
Party B shall make all necessary preparations
before the construction starts,
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including organizing
construction workers, setting up Project items implementation
plans with suppliers, and providing basic working and living
conditions for its workers.
Clause Four Time for Completion Progress
Management and
Modification of Project Schedule
1.
This Contract is scheduled to commence on June
1, 2007 and completes before January 31, 2008. The overall
construction period shall last for 8 months, which starts from
the commencement date until the completion of all the items of
the Project. The construction period is the total length
of time for the completion of the whole Project.
2.
Party B shall adopt system construction
management method for the Project, observe Party A’s
construction schedule and shall not delay or make additional
requirement unreasonably so as to assure that the Project will
be completed as scheduled.
3.
The overall construction period encompasses the
total time for construction preparation, selection of suppliers,
system installation, development and testing, and acceptance
check of the whole Project upon completion.
4.
Once the implementation plan and Project
schedule are agreed by Party A, they shall be strictly observed
by Party B and shall not be altered at will.
5.
If the Project is delayed without Party
B’s default, Party A shall coordinate actively with Party
B under the actual conditions so as to ensure that the Project
is completed as scheduled. For the works in each phase of
construction, Party B shall provide detailed work plan and
implement such plan under the integrated coordination from Party
A.
6.
If Party B is unable to complete the works as
scheduled for the current month due to its own reason, then it
shall take effective measures to ensure that the remaining works
are finished together with those works of next month; otherwise,
Party B shall assume full liability and compensate Party A for
the resulting economic loss.
7.
The Project schedule can be adjusted after it is
approved by Party A under any of the following
circumstances:
(1)
Major design alterations (i.e. system function
alterations, increase or decrease in numbers of major
equipments, Project items adjustment or alterations taking place
in key circuits as are requested by A)
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(2)
Force majeure
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(3)
Other circumstances as are stated in this
Contract.
Party B shall report in writing to Party A about the detail of
delay within three days of the occurrence of the above
circumstances. Party A shall then reply within five days after it
has received the reports.
8.
Party B shall bear full responsibility for
inability to complete the Project as scheduled if it is due to
Party B’s default.
9.
Party A shall bear responsibility for the
Project’s delay caused by its own default.
Clause Five Delay of Commencement Date and
Construction Suspension
1.
If Party A proposes to postpone the
commencement of works before the certificate for the
commencement of works is issued by Party A, then it shall notify
Party B in writing, extend the construction period accordingly
and assume corresponding responsibilities.
2.
If Party B is unable to start the Project
as scheduled before the certificate for the commencement of
works is issued by Party A, it shall submit 5 days written
notice in advance to Party A for its approval of such delay and
shall assume corresponding responsibilities.
3.
Party A’s representative can request
B to suspend the construction if he/she deems necessary and
provide opinion for further handling the Project within 48
hours. Party B shall suspend the construction as requested by
Party A and safeguard the already completed portion of the
Project. If the suspension is not caused by the default of Party
A nor Party B, then the defaulting party shall assume the
relevant liability.
4.
If the Project is suspended due to default of
Party B, then Party B shall assume the responsibility. If the
Project is suspended due to default of Party A, then Party A
shall assume the responsibilities.
Clause Six Rights and Obligations of Party A and
Party B
1.
Party A has the right to select the Supervisor
and to sign supervising contract with it.
2.
Party A has the right to examines and approves
the construction reports, design alteration, alteration of the
Project and construction schedule adjustments submitted by Party
B and handle the matter regarding payment of the construction
money.
3.
Party A has the right to demand Party B to
provide quarterly working report and other specific reports
concerning the Project’s construction.
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4.
In case Party A finds that Party B‘s
employees are unable to fulfill their corresponding
responsibilities, Party A has the right to request Party B to
replace them until the end of this Contract and to request Party
B to assume the relevant liability for damages.
5.
Party A shall make the down payment to Party B
before the commencement of the Project’s construction
works and shall make payment according to the progress of the
Project.
6.
Party A shall be responsible for external
liaison and coordination works during the construction period of
the Project so as to provide a good environment for the
Project’s construction. In the event that part or the
entire coordination works need to be entrusted to Party B, then
additional provision shall be added in this Contract to
expressly state the exact works assigned and the corresponding
remuneration.
7.
Party A shall provide Party B with the documents
related to the Project free of charge within the time agreed
upon by both Parties.
8.
Party A shall provide all decisions in writing
within the time agreed upon by both Parties whenever such
decision is required in writing by Party B.
9.
Party A shall authorize a representative who is
familiar with the Project and able to make decision on behalf of
Party A within the scheduled time to communicate with Party B.
Notice shall be given to Party B prior to the replacement of the
representative.
10.
Party A shall fulfill all the obligations stated
in this Contract and is liable to compensate Party B’s
economic loss when in default. During the process of the
construction of the Project, Party B shall has the right to seek
compensation from Party A for all damages that is not caused by
the default of Party B.
11.
If Party A’s claim to Party B for
compensation is dismissed, then Party A shall indemnify Party B
for the costs and expenses incurred due to such claim.
12.
Party A shall observe other rights and
obligations stipulated in this Contract.
B.
Rights and obligations of Party B
1.
Party B confirms that it has full understanding
of the conditions and circumstances of the construction site of
the Project and guarantees to complete the Project within
pre-set time and meet the pre-set quality standards
simultaneously without additional expenditure, unless otherwise
stated in this Contract.
2.
Party B shall propose construction
implementation plan of the Project and implement
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such plan upon the approval
of Party A.
3.
Party B shall work out construction
implementation and design plans and construction schedule, and
execute such plans after the submitted written reports have been
approved by Party A.
4.
Party B shall select superb suppliers to provide
software and hardware systems required by the construction of
the Project
5.
Party B shall be responsible for the
organization, construction, management、coordination and
implementation of the entire Project.
6.
Party B shall designate a site manager to be
responsible for the overall work of the construction site, and
to handle events arising on the construction site in accordance
with this Contract. The site manager or his/her authorized
representative shall participate in the Project’s
coordination meeting convened by Party A, and shall make
decisions on behalf of Party B and follow instructions from
Party A.
7.
Party B shall perform self-inspection and cable
layout covering work. The commencement of the cable layout
covering work, its acceptance check and final covering shall be
reported to Party A in advance. Records of the original
construction work, collection and arrangement of the cable
layout covering work must be taken in order to ensure the
Project’s quality. All liabilities and the corresponding
additional expenses that are caused by Party B’s default
shall be borne by Party B.
8.
Party B shall manage construction safety
according to the requirements of the construction safety norms,
set up on-site lighting and fencing as is needed to prevent
accidents and to safeguard lives and properties of the on-site
personnel. When accidents take place, they have to be handled
actively (Party B bears all the expenses so arise) and be
reported in writing to Party A.
9.
Party B shall submit monthly construction
schedules and monthly progress reports of the Project to Party
A.
10.
Party B shall accept monitoring and inspection
of Party A’s on-site management personnel and facilitate
for such daily inspection.
11.
Starting from the time when the whole Project is
completed, acceptance check is passed, and the completed Project
is delivered to Party A, Party B shall be responsible for the
maintenance of the Project pursuant to the relevant requirement.
During this warranty period, if any quality issue arises, Party
B shall be responsible for the resulting expenses. If the need
for repair is caused by Party A’s usage or management,
then Party A shall be responsible for the expenses.
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12.
Upon the request of Party A, Party B shall
submit technical information within the scope of the Project to
Party A during the construction period of the Project. Such
information shall be arranged as required and be used for the
compilation of information about Project’s completion.
13.
Party B shall clean the construction site for
trash (including inside of building) and dismantles all
temporary facilities (follow Party A’s instructions) and
transports them to a place designated by Party A so that they
will be moved out of the site together.
14.
Party B shall prepare well for the coordination
with other professional sub-contractors.
15.
Party B shall complete all formalities and
certificates in relation to the Project and bears all the
related costs.
16.
Party B shall be held liable for all quality
problems, construction delay, damage to personnel and properties
and economic losses caused by Party B’s failure to fulfill
the above obligations and shall compensate Party A for the
resulting economic losses.
17.
Party B shall have the responsibility and
obligation to safeguard the technical confidentiality of the
Project and shall not provide any materials or documents
relating to the Project to any other party without the consent
of Party A.
18.
Party B shall maintain the system during its
trial run and warranty period.
19.
Party B shall provide the entire set of
documents mentioned in this Contract.
20.
Party B shall provide adequate professional
training in relation to the Project.
21.
Party B shall provide the completed system that
satisfy Party A’s requirements.
22.
Party B shall observe other rights and
obligations stipulated in this Contract
Clause Seven Contract Price, Contracting
Method, and Price Adjustment
1.
The total price of this Contract (including
hardware, software, installation, testing and trainings, etc.)
is RMB Ninety Four Million and Five Hundred Thousand Only.
(￥94,500,000.00). Pricing for each individual item
is stated in the Addendum. The above price includes the
construction site price in Nan’an City, and encompasses
all fees and taxes required by the China and all local
government authorities.
2.
Contracting method: main contracting, with
guarantees of quality and works to be completed within the
specified construction period. Project alterations are to be
handled according to relevant provisions of this Contract.
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3.
If changing needs of Party A result in the
increase in the number of hardware equipments and increase in
software expenditures, a supplementary contract will be signed
between Party A and Party B after mutual consultation to deal
with the increased cost and the increased cost shall be borne by
Party A.
4.
Party B has considered and agreed to assume the
risks resulted from the fluctuation of salary, Project
management costs and equipment prices during the Project
construction period and shall not make any new demand.
5.
Unless otherwise agreed, all direct costs
resulting from the Project and other costs related to the
Project are regarded as being included in the Project price of
this Contract.
Clause Eight Payment and
Settlement Methods
1.
5% of the total Contract price shall be reserved
as deposit for the Project’s warranty.
2.
Payment for the Contract Price
(1)
Party A shall pay Party B 50% of the total
Contract Price, i.e. RMB Forty Seven Million Two Hundred and
Fifty Thousand Only (￥47,250,000.00) within 5 business
days after the Contract has been signed.
(2)
Party A shall pay Party B 45% of the total
Contract Price, i.e. RMB Forty Two Million Five Hundred and
Twenty Five Thousand Only (￥42,525,000.00) within 5
business days after the passing of the complete trial run and
acceptance check of the Project.
(3)
Payment for the Deposit of the Project
After-sales Service
Party A shall pay Party B the 5% after sales service deposit, i.e.
RMB Four Million Seven Hundred and Twenty Five Thousand Only
(￥4,725,000.00) within 10 business days after the date of
the warranty period has been expired.
Clause Nine Project
Modifications
1.
If Party A needs to modify the contents of the
Project, a written notice shall be sent to Party B 5 days in
advance and Party B shall implement the modification according
to the modification notice send by Party A.
2.
If Party B finds that there is a need to modify
the Project (design, equipment,
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construction implementation
organization, or personnel change) during the course of
construction, or finds any errors or un-clarified issues about
the technical information, then Party B shall deliver a written
notice to Party A. Then Party A shall make decision accordingly
within 5 business days.
Clause Ten Project Progress
Confirmation
Party B shall submit quarterly reports on the amount of
the completed works of the Project to the Party A at the end of
each quarter for Party A’s confirmation.
Clause Eleven Construction
Safety
1.
Party B shall conduct safety education and make
safety protection (including equippi
