Equipment Supply & Installation Contract For Visual Intercom System of Shenzhen St. Moritz C Zone

1.

Project Items

1.1

Project name: Equipment Supply and Installation Project of Visual Intercom System for St. Moritz C Zone of Shenzhen Longhua 2nd Line Extension Zone

1.2

Construction field: C Zone, St. Moritz Garden, West side of Yulong Road, Extension Zone, 2nd Line, Longhua Town, Shenzhen City

1.3

Construction scope and task

1.3.1

The construction scope under this contract is the supply and installation task of visual Intercom system for Party A’s St. Moritz C Zone, whose specific scope includes all the equipment, facilities, material and matched software & hardware needed by the system. The concrete content for implementation should be based on the bidding document (refer to details in the attachment--quote document that approved by Party A) and technical proposal of Party B that approved by Party A, which include the interior terminal equipment, outdoor terminal equipment and the central management system that has already been specified in quote list and all software and hardware hidden in the project.

1.3.2

Party B is responsible for the deeper design, working drawing, technical proposal and implementation planning of the above project according to the operational scheme and technical disclosure approved by Party A, related standards and criterion of the country and the business line, and related regulation and requirement of the department in charge for this project.

1.3.3

Based on designing drawing of Party A and related approval proposal, and complying with related requirement of the confirmed technical proposal (refer to details in the attachment--technical proposal for the construction), Party B should finish the designing for the above project, apply and organize for the acceptance of the project from the department in charge of the government, apply for the permit certificate and all the document and go through all the legal procedures needed by the government before the payment to ensure regular, stable and safe operation of all the construction work (include but not limited to equipment supply, installation and disassembly of the equipment, installation of the management software, debugging of the whole system, opening of equipment and all the work that ensure the quality and function of the equipment etc.) and finally to meet all the need required by Party A, pass the acceptance, perform the payment and apply for use.

1.3.4

Party B should offer free after-sale services such as installation, debugging, training for operation guidance, periodical maintenance, and failure recovery of the management applying software according to agreement in the contract (including content of the attachment).

1.4

Payment under the contract

1.4.1

The total payment in this contract is 3,289,774.24 RMB (that is three million, two hundred and eighty nine thousand, and seven hundred and seventy four, point two four RMB). Refer to details of payment items and terms in the quote list of the quote file. Unless Party A has specified change of design and modification of the function of use, no payment should be added in this contract. If Party B makes modification to the design and configuration of the equipment because of technical reasons, no payment should be added, but Party A has the right to adjust the total amount if the cost is reduced. And the modification of Party B should be approved by the engineering department of party A in a written way.

1.4.2

The lump price includes expenses for labor, material, machinery, equipment purchase, quality control, safety guarantee, time limit for the project, water proof and lighting protection system and grounding system of the equipment, installation and debugging of equipment, acceptance, after-sales service and all the other expenses that are needed for the fulfilling of obligations of this contract (include but not limit to direct expenses, indirect expenses, expense for construction technology, safety, overtime working, evening working, working on raining seasons, effluent cost, contract service cost (not higher than 1.5% of the total contract price), expense for new technology developing, insurance, enterprise management, profit and tax etc.) The price has taken the condition of the construction site, price fluctuation during the contract period, change of supply-demand relation, currency devaluation, change of exchange rate, policies and laws & regulations, risks showed or indicated in this contract, responsibility and functional expenses etc. into consideration. Therefore, price under this contract will not be modified unless Party A asks to change the function of use or technical proposal or there are other agreements by two parties.

1.5

Quality grade of the project: qualification should be assessed according to requirement of the contract and the existing construction criterion and quality acceptance standard. Should the quality of the project fail to meet the requirement, Party B should pay a penalty of 20% of the total price to Party A and afford for all the expense for reconstruction till the quality is up to the standard.

1.6

Project time limit under this contract

1.6.1

Starting date of the project: The day when this contract comes into effect and Party A’ s payment is performed.

1.6.2

Completion date of the project: The concrete starting date would be based on Party A’s notice (Party A is required to inform Party B 2 months in advance). The completion date would be based on installation plan approved and issued by Party A, requiring Party B to accomplish all the installation and debugging that is up to the standard for acceptance (including legal festivals and holidays).

1.6.3

Should there be any delay of the time limit, it should not be Party A’s responsibility. Party B promises to pay penalty to Party A according to the calculating standard of “contract price 5% delaying days” and pay for economic loss of Party A and the third party caused by the delay.

1.6.4

Should the delay is not caused by Party B, it should be handled according to the clause for change.

1.7

Supply of material and equipment for the project and technical requirement

1.7.1

For material and equipment needed by the project (collectively called product) Party B should purchase and take care of them according to the attachment Technical Proposal of Visual Intercom System for St. Moritz C Zone and product brand, manufacturers and producing place, model, technical specifics, quantities, quality grade that are listed in the bidding file of Party B. All the products should meet the agreement and requirement under this contract (including but not limit to designing drawing, technical disclosure, operating requirement, product drawing) and can only be put into use after the approval of Party A. Party B should also be ready for supervision and check from Party A or the entrusting party from time to time.

1.7.2

Material and equipment supplied by Party B should be in line with the specification, standard or ISO quality system and 3C quality control of the country and the industry. The products should be brand new and quality goods without any defect, failure and hidden trouble and should also be in line with laws and regulation of Law on Product Quality of People’s Republic of China. Or else, all the disputes and responsibility caused by this should be assumed by Party B. Party B should pay penalty for economic loss of Party A and the third party as well.

1.7.3

All the above products should be packed with original binding and soft material, with attachment of specification, model, quantity, technical specifics, all the written materials for the equipment (including but not limit to product specification and model, performance parameter, work certificate, quality grade, certificate of origin, customs declaration, quality qualification report from the quality control dept. etc. ) and all the other related technical materials needed by Party A.

1.7.4

Within 24 hours after Party B unloads the goods on the appointed place in a sorted and orderly manner, Party B should offer the whole set of written material and the consignment invoice (it should have signature of the operator and people in charge and the seal of Party B, and blank space for Party A’s signature for accepting the goods) that has specified unit price, quantity, arrival time and place to unload etc. for the products (accessories included). Party A should organize for the acceptance within 24 hours after receiving written materials and the consignment invoice and verifying that all the content is in line with the contract. If the acceptance exceeds the time limit, it can be regarded as passing the acceptance. The field acceptance should be carried out with both parties participating. After the acceptance, Party A should accept in a written way. The acceptance record will be regarded as the foundation for contract settlement.

1.7.5

If the material and equipment supplied by Party B fails to pass the acceptance, but Party B enforced to use them or use them unauthorized, Party A will not make the contract settlement and has the right to end the contract. For all the bad results and the economic loss caused by this, Party B should be responsible.

1.7.6

Party B should strictly comply with the agreement in the contract in purchasing and supplying the goods. Should there be any defect of the products, or any destroy during the delivery, or any condition that goes against the contract, Party A has the right to refuse to accept the goods. Party B should take the goods back and change for good ones. All the expenses and related responsibility of breaking the contract will be borne by party B and the time limit for the project will not be delayed.

1.7.7

Party B should be supportive of the acceptance, assisting Party A in checking brands, manufacturer, manufacturing place, models, performance parameter and quantity of every product. Should Party A has any question about the quality, Party B should do the random sampling and send to the quality control dept. for inspection and appraisal. If the product is not qualified, apart from the violation responsibility, Party B should pay for all the expenses during the process of inspection. If the product is qualified, Party A should pay for the expenses.

1.7.8

During the process of carrying out the contract, if Party B go against the contract and ask for raise of unit price of products listed in the quote and pay for installation and debugging, apart from keep carrying out the contract unconditionally, Party B should pay 25% of the contract price for items that have increased price. Or else, Party A has the right to freeze or cancel the unpaid payment and reserve the right to end the contract and ask for compensation from party B.

1.7.9

During the process of supplying, if Party B replaces the good quality products with bad ones, uses adulterated products or low-quality products, Party A has the right to reject and Party B should take back the goods, change for good ones, pay for all the economic loss caused by this (compensation for third parties included) and the time limit for supplying should not be delayed. Meanwhile, Party B has to pay for a penalty of 25% of the contract price.

1.7.10

If part of the products is not up to the standards of Party A and getting rejected, Party B should arrange for storing and exchange. Party B should bear all the expenses caused by that and be responsible for any unfavorable results for improper storing.

1.7.11

Party B should respond to Party A within 3 days after it receives the written protest for the acceptance. If Party B fails to deal with it on time, it will be regarded that Party B permits it and Party B would pay for all the economic loss and bear the compensation responsibility.

1.8

Certification and operation instruction of the material and equipment: Party B should offer Party A the related certificates, operation instruction or installation manual, maintenance guidance and other materials that Party A needs and make sure that all the materials are comprehensive, reliable, legal, adaptable and timely. Or else, all the results should be borne by Party B. Should it causes economic loss to Party A, Party B should be responsible.

2.

Work of Party A

2.1

Party A is responsible of procedures for applying the project, claim for the construction permit and pay for expenses required by construction administration dept.

2.2

Representative Wang Tao from Party A is appointed to offer related five sets of drawing (including 2.3 sets of drawing needed for the completion of project) for the week current intelligentized project 3 days before the starting date of the project, and Party B should take good care of the drawings, (if for some special conditions, Party B asks for extra drawings, it should pay for all expenses). Party A should confirm and approve implementation proposal or operation instruction that is drawn up by Party B.

2.3

Three days before the starting of the project, Party A should organize for the approval of drawings and arrange for designers to do the design disclosure and technical disclosure with Party B.

2.4

Three days before the starting of the project, Party A should cooperate with related dept., offer interchange station of water and electricity pipes to Party B and make clear the matters that need attention. Party A should clear the barrier in the construction field and protect those facilities and objects that can not be cleared.

2.5

Entrust the supervisory authority to organize and make record of the meeting for the approval of drawing that Party A, B, designing company, supervisory unit and other contractors should attend. The record should be given to Party B on time. Party A is also responsible for coordinating work between the general contractor and the supervisory party and other relationships between the construction units in the sites that may have cross-operation with Party B so that Party B can have the construction goes smoothly.

2.6

Party A should supervise and check the project quality and speed, deal with drawing problems, approval of change of design, settlement of the progress payment and in charge of the final account for the completed project.

2.7

If Party B fails to construct according to the contract, Party A can command Party B to stop the construction. And Party B can only resume working after rectifying and improvement that accepted by Party A. All the loss caused by this will be borne by Party B.

2.8

Party A should offer he general construction progress of the general contract unit to Party B 15 days before the starting date of the project.

2.9

Party A promises to perform the payment of the contract price and other due expense to Party B as agreed in the contract.

3.1

Basic responsibility

3.1.1

Party B should follow all the reasonable command from Party A to complete the project as regulated in the contract. Party B should have a full understanding of the contract and carry it out and participate in the designing, approval of working scheme and technical disclosure organized by Party A. The working scheme and schedule of construction should be drafted, sent to Party A, and carried out only after the approval of Party A.

3.1.2

From the day that the project starts to the day that the project is transferred to Party A, Party B should be responsible for the whole project, including temporary works, machinery, materials and other objects that are sent to or placed in the construction field or that are related or useful for the project and should perform the management obligations for all the items.

3.1.3

Apart from the above clauses, Party B should also be responsible for the unfinished work that should be carried out during the warranty until the work is done. Besides, Party B should be responsible for any damages caused during the period when it carries out the warranty responsibility.

3.1.4

Should Party B find any difference of the contracts between two parties or within the same contract, it should inform Party A in a written way, explain the difference and Party A should give out instructions.

3.2

Quality responsibility: (refer to details in the quality agreement clauses of the contract)

3.3

Carrying out of Party A’s command: Party A can carry out the following rights in whole or give out part authorizations.

3.3.1

Carry out the command related to the project from Party A which is authorized by this contract. Should Party B fails to carry out the command of Party A within the reasonable time, and fails to carry out 3 days after receiving Party A’s written notice for urging it, Party A has the right to employ other people to carry out the command and demand the payment from Party B or deduct the expense from the contract price that Party A has to pay for Party B.

3.3.2

If Party B thinks the command from Party A is not authorized by the contract, it can ask for explanation from Party A before carrying it out and Party A should give a prompt reply. If there is still dispute on that, a lawsuit can be initiated according to clauses in Article 16. If Party B has no objection or has no requirement of initiating a lawsuit and carries out the command, the command would be regarded as valid.

3.3.3

All the command from Party A should be made in written way. If there is necessity, the general representative or other authorized people could give out oral command and Party B has to carry it out and submit the written apply within 3 days.

3.3.4

If the behavior of Party B is not in line with the contract or the command of Party A, Party A or the general engineer has the right to stop the whole project or part of the project.

3.3.5

Party B has to comply with and carry out the command within the range of the contract. As long as the command related to Party B, Party B has to cooperate fully.

3.3.6

This construction is one part of the whole project, which should be coordinated with other projects in all aspects. Party By should be aware of this item, and ensure to coordinate with related parts comprehensively in accordance with Party A’s order.

3.4

Statutory Duty:

3.4.1

Party B cannot transfer the whole or partial contract (this project) to others without the permission of Party A.

3.4.2

Related rights and duties of Party B during the enforcement of this contract, and Party B should complete the construction of this project according to the requirement of quality and time limit in the contract.

3.4.3

Comply with relevant law and regulation, accept the order of Party A and supervisor, and carry out the construction as per construction drawings, design change notice, summary of the drawing joint trial, and the specification of construction and acceptance.

3.4.4

Comply with other duties belonging to Party B which are regulated by law, regulation, and standard that are not listed in this contract.

3.5

Party B should hand in detailed construction and organization arrangement, schedule, construction methods, procedures and the estimated period for every stage in duplicate for the approval of Party A and supervisor within 15 days after the reception of written standing order of contracting construction from Party A. Hand in related construction data and files such as schedule plan, related statistical returns, construction accident report, etc. as per the requirement of Party A.

3.6

Party B should verify all of the measurements and grades. Party B must bear the loss originated from the uncertainty or non-verification of the measurements and grades. Before starting a job or ordering any raw material, Party B must verify all measurements of the drawings and construction fields, and check whether the drawing are in accordance with the construction specifications and orders regulated by Party A. If any discrepancy is detected, Party B should inform Party A instantly, and wait for the order. Party A will not be responsible for any loss of raw material, job and delay due to the insufficient verification of Party B. Party B should bear all responsibilities originated from quality problems of the above issues, which are all imputed to Party B for negligence of verification and report duty of the above issues.

3.7

Materials and construction quality of Party B should not only apply to the requirement of this contract but also apply to the county’s minimum standards of related construction and acceptance. Relevant expenses have been included in the contract price.

3.8

Access construction water and electricity from the interchange station specified by general contract unit. Measures should be adopted to avoid of damage to underground utilities around redlines, surrounding buildings and public facilities which all should be at the account of Party B.

3.9

If the drawings and data provided by Party A are incomplete, Party B should hand in the schedule for supplementary drawings and data to Party A within 15 days after the contract is signed. In the schedule, Party B should specify the types and deadline for supplementary drawings and data which Party A should provide. During execution of the construction, Party B should inform Party A timely with written notice. If Party B fails to express the above requirements which leads into the delay of construction, all the loss related to the delay should be at the account of Party B.

3.10

If Party B refuses or cannot complete the work on request which should be completed or coordinated by Party B as per the contract, Party A can arrange the third party to complete the work, whose expense should be deducted from the progress payment of Party B. And Party B should be responsible for any influence of project time limit.

3.11

Party B has to act in accordance with the arrangement of Party A and supervisor, adopt effective measures, and assign managerial staff to carry out management of safe and civilized construction. People who are without permission should not be allowed to enter construction field, otherwise penalty of more than RMB 500 every time will be fined.

3.12

Party B bears all the responsibility of the safety precautions such as lighting, guards, stop raising livestock, antitheft, securities, personal injury.

3.13

When carrying out the interfaces between this construction and other constructions, all the work, including combination of the interfaces and restoration should be completed by Party B if the work is not specified that other contractors are responsible for the interfaces. The work which is not specified that other contractors are responsible or excluded in the contract is part of the construction. The work has to satisfy all the technically required standards of this construction.

3.14

For the material provided by Party B, Party B must entrust relevant supply company of material and equipment to handle all the certificate of origin and customs declaration for the imported material. And all the expenses are at the account of Party B.

3.15

Party B has to adopt measures to control the construction field's pollution and danger to environment, protect the normal life, work and personal safety of the residents and obey all the regulations and requirements ordered by Shenzhen City Government and relevant departments. Party B should bear all the loss and fines caused by the breach of the relevant regulation out of self reason.

3.16

During the execution of construction, Party B should clear all the garbage, additional equipment and material in time as per the instruction of Party A on clearing garbage or arranging fields. If Party A considers that Party B does not clear the garbage timely or thoroughly, Party A can directly entrust other departments to carry out the clearance. And the expenses are at the account of Party B.

3.17

After completion Party B bears the responsibility to protect the end items until Party A accept them. Party B should be responsible to restore the end items at Party B’s own expense if any damage occurred in the protection period; if the damage is caused by the third party, Party A should coordinate all the relevant part, requiring the responsible party to restore the end items. If Party A uses the end items before the completion and acceptance, the restoration expenses are at the account of Party A when damages occurred.

3.18

Before handing over this construction to property, Party B should carry out an overall clearance, including clearing all the sections of this construction, particularly all the items should be cleaned and sorted out, removing all the irrelevant signs, marks, prints, and other oil stain or dirt. Clear and sort out all the painting and finishing construction, realizing a neat filed after the construction.

3.19

Under the involvement and arrangement of Party A, Party B has to sign a coordination agreement of general subcontracting construction operation with general contract unit which specifies the contents of the general subcontracting coordination work and carries out the comprehensive communication and cooperation with general contract unit on the issues of usages of water, electricity of construction and other temporary structures. During execution of construction, Party B has to obey the direct coordination of Party A and the comprehensive coordination of general contract unit, and actively coordinate with the general contract unit and other subcontracting construction organizations to ensure the cross-operation of construction field and schedule arrangement. All Party Bs should be also responsible for the protection of one’s own end items. If the execution of construction schedule and quality are affected due to the responsible cause such as non-intensive coordination, Party B should bear all the responsibility, which can be considered as breach of the contract.

3.20

Party B has to be responsible for the arrangement and filing of his own construction. Before the final acceptance of construction, Party B must sort out a complete and perfect final acceptance data in triplicate to Party A as per the acceptance requirement of relevant industrial department. And Party B should actively coordinate with Party A to examine the filing standards and sort out filing data. Otherwise, Party A will not settle up the construction debt.

3.21

If Party B does not conduct the written procedures of payment request (Party B should ask Party A for the format) at term, then Party B is regarded as voluntary surrender of payment request. Payment period regulated in the contract ceases to be in force automatically.

4.

Construction Field Management

4.1

On the temporary facilities of construction field: the temporary facilities of construction field are arranged as the changes of the development progress of this area. Party B has to relocate unconditionally in 15 days upon receiving the notice of Party A. related expenses are at the account of Party B, which is considered in the unit price of lump sums for bill of quantities.

4.2

For the construction management, Party B should strictly comply with the safety and civilized construction standards, regulation of country, local governments as well as the construction field management regulation made by Party A.

4.3

Before execution under hazardous environment, Party B should make perfect protective measures to ensure safety which can be carried out upon receiving the approval of Party A or supervisor.

4.4

Party B is responsible to handle the issues of water and electricity suspension during the execution of construction. The time limit for the construction should not prolong because of the suspension.

4.5

During construction, Party B should sort out and arrange all the machines, tools materials and construction waste in time to ensure the cleanliness and tidiness of the construction field. Party B is responsible to clear the waste, spent material, excess stock in time. If Party B fails to satisfy the above requirements, Party B should pay penalties of RMB 500 every time to Party A. construction waste, spent material, excess stock, etc. have to be cleared and transported to the location specified by Party A. if the clearance is carried out by other department arranged by Party A, then the expanses will be shared by all related parts.

4.6

Party B should improve the measures of civilized construction. All the conflicts and disputes resulted from the inaction or nonfeasance of Party B, the related expenses and duties are at the account of Party B.

4.7

During the process of construction and within one year of construction hand-over, if issues of quality, safety accidents and other reasons of the construction resulted from Party B, are exposed by the media such as, newspaper, television, etc. or circulated a notice of criticism or administrative penalty by relevant responsible departments of the government, which will cause a loss to this construction and Party A’s social reputation, then Party B should pay penalties of RMB 8000 every time to Party A which will be deducted from progress payment or guarantee payment.

4.8

Except that the accident is caused directly by Party A, Party B should be responsible for all the safety accidents which are caused by Party B during the construction.

4.9

Fees of water and electricity management at construction field are at the account of Party B. Payment agreement of water and electricity usage and fees should be signed between Party B and general contractor. General contractor should provide coordinated service and management as per requirements of the agreement. If the fees of water and electricity supply are paid by Party A instead of Party B, then the payment will be deducted from the current progress payment.

4.10

Without the permission of Party A, the staff which does not belong to Party B is not allowed to enter the construction filed, and meanwhile Party B should also reject such entrance request.

4.11

Party B should plan for the entire construction to manage and organize the construction field, strength the education of workers, and strictly prohibit scuffle and group fighting between workers and groups under any circumstances. If fighting occurs in Party B during the execution of construction (including living quarters), Party B has to pay penalties of 1000-10000 every time which will be deducted from the construction debt dispense with the approval of Party B.

4.12

Party B should not only perform the construction field management duties regulated in this contract, but also coordinate with the general contractors and subcontractors on the usage and settings of general construction layout, field road, construction field, water and electricity supply, and various facilities. Otherwise, Party A will consider Party B as breach of the contraction.

5.

Supply of Material and Equipment

5.1

Party B should order the material and equipment as per the requirements of design and standards, provide product certification, and inform Party A representatives to check and accept the material and equipment upon the arrival of goods. For the products which are not in conformity with the design and standards or yet accepted by Party A, Party B cannot use such product in the construction. Party B has to reorder qualified products as per the design and standards, and bear all the related expenses. If Party A does not accept the products in time, and the products are found to be unqualified according to the design and standards, then Party B should carry out dismantlement, restoration and reorder, and the