Sample Business Contracts

2.0

5.1

        Definitions

The documents forming the Contract are to be taken as mutually explanatory of one another. If there is an ambiguity or discrepancy in the documents, the Employer shall issue any necessary clarification or instruction to the Contractor, and the priority of the documents shall be as follows:

a) The Contract Agreement;

b) The Conditions of Contract, Part II;

c) The Conditions of Contract, Part I;

d) The Schedules to the Conditions of Contract;

e) The Employer's Requirements;

f) The Contractor's Proposals and all other documents forming part of the Contract.

Wherever provision is made for a communication to be "written" or "in writing", this means any hand-written, type-written or printed communication, including the agreed systems of electronic transmission stated in Part II.

All certificates, notices or written orders to be given to the Contractor by the Employer or the Employer, and all notices to be given to the Employer or to the Employer by the Contractor, shall either be delivered by hand against written acknowledgement of receipt, or be sent by airmail or one of the agreed systems of electronic transmission. The addresses for the receipt of such communications shall be as stated in the Contract Agreement.

Employer�s

Use of Contractor's Documents

The Contractor shall, in all matters arising in the performance of the Contract, comply with, give all notices under, and pay all fees required by, the provisions of any national or state statute, ordinance or other law, or any regulation of any legally constituted public authority having jurisdiction over the design and construction of the Works including all requirements and works as may be stipulated by the relevant authorities in connection with the issuance of permits and licenses for the use of the completed Works .

The Contractor is not responsible for the application and obtaining permits and licenses pertaining to the use of the completed Works eg. restaurant license, hotel license and gaming license etc.

(a)       may assign the whole or any part of the Contract or any benefit or interest in or under the Contract with the prior agreement of the other Party, such agreement shall be at the sole discretion of the other Party, and

(b)      may, as security in favour of a bank or financial institution, assign its right to any moneys due, or to become due, under the Contract.

(1)    The sub-letting of any portion of the Works shall not relieve the Contractor from any liability or obligation under the Contract. The Contractor shall remain wholly responsible for carrying out and completing the Works in all respects in accordance with the Contract and shall be responsible for the acts, defaults and neglects of all sub-contractors, their servants and agents, or their sub-contractors of any tier as if they were the acts, defaults or neglects of the Contractor.

(2)    It shall be a condition in any sub-letting by the Contractor that :

(a)       the employment of the sub-contractor under the sub-contract shall determine immediately upon the determination (for any reason) of the Contractor's employment under this Contract; and

(b)      the sub-contract shall also provide that

(i)       subject to Clause 7 of these Conditions, unfixed Plant and Materials delivered to, placed on or adjacent to the Works by the sub-contractor and intended therefor shall not be removed except for use on the Works unless the Contractor has consented in writing to such removal, which consent shall not be unreasonably withheld;

(ii)      Where, in accordance with Sub-Clause 13.5 of these Conditions, the value of any such Plant or Materials has been included in the amount due as an Interim Payment and that Interim Payment has been discharged by the Employer in the favour of the Contractor, such Plants or Materials shall be and become the property of the Employer and the sub-contractor shall not deny that such Plants or Materials are and have become the property of the Employer;

(iii)     provided that if the Contractor shall pay the sub-contractor for any such Plant or Materials before the value therefor has, in accordance with Sub-Clause 13.5, been included in the amount due as an Interim Payment and before that Interim Payment has been discharged by the Employer in favour of the Contractor, such Plant or Materials shall upon such payment by the Contractor be and become the property of the Contractor;

(iv)     the operation of Sub-Clauses 1.16 (2) (b) (i) to (iii) hereof shall be without prejudice to any property in any Plants or Materials passing to the Contractor as may be provided in any other provisions in the Contract.

The Employer shall grant the Contractor right of possession of the Site on the Date for Possession stated in the Contract.

If the Contractor suffers delay and/or incurs direct loss and / or expense from failure on the part of the Employer to grant right of possession of the Site by the Date for Possession, the Contractor shall give notice to the Employer. After receipt of such notice the Employer shall proceed in accordance with Sub-Clause 2.7 to agree or determine:

(a)    any extension of time to which the Contractor is entitled under Sub-Clause 8.3, and

(b)    the amount of such direct loss and / or expense, which in his opinion has not been been included in the definition of Prime Cost in Schedule 1, to be included as part of the Prime Cost, plus the Percentage Fee,

and   shall notify the Contractor accordingly.

The Employer shall carry out the duties specified in the Contract. The Employer is empowered to exercise the authorities specified in or necessarily to be implied from the Contract. If the Contractor suffers delay to the regular progress of the Works and/or incur expense as a result of delay, impediment or prevention by the Employer or due to his default in carrying out his duties and/or his authorities properly, the Contractor shall give notice to the Employer. After receipt of such notice the Employer shall proceed in accordance with Sub-Clause 2.7 to agree or determine:

(a)    any extension of time to which the Contractor is entitled under Sub-Clause 8.3, and

(b)    the amount of such direct loss and / or expense, which in his opinion has not been been included in the definition of Prime Cost in Schedule 1, to be included as part of the Prime Cost, plus the Percentage Fee,

and   shall notify the Contractor accordingly.

The Employer may from time to time delegate any of his duties to assistants or other Consultants employed by him, and may at any time revoke any such delegation. Any such delegation or revocation shall be in writing and shall not take effect until a copy has been delivered to the Contractor.

Any determination, instruction, inspection, examination, testing, consent, approval or similar act by any such assistant of the Employer, in accordance with the delegation, shall have the same effect as though it had been an act of the Employer.

When the Employer or his delegate is required to determine value, loss and / or expense, or extension of time, he shall consult with the Contractor in an endeavour to reach agreement. If agreement is not achieved, the matter shall be referred to the Project Executive Committee for resolution.

It is expressly stipulated that the obligations and liabilities of the Employer and the Contractor shall not be affected in any way by reason of the existence of matters being referred to the Project Executive Committee as stipulated in sub-clause 2.8 for resolution.

General

Obligations

The Contractor shall design all of the Works in line with the Employer's Requirements to the satisfaction of the Employer and shall, upon obtaining the approval of the Employer to such design, carry out the procurement of such work on a competitive basis, and to execute the construction and completion of the Works within the Time for Completion. The Contractor shall provide all superintendence, labour, Plant, Materials, Contractor's Equipment, Temporary Works and all other things including all construction documents, whether of a temporary or permanent nature, required in and for such design, execution and completion.

The Contractor shall take full responsibility for the adequacy, stability and safety of all Site operations, of all methods of construction and of all the works, irrespective of any approval or consent by the Employer.

Unless the Contractor's Representative is named in the Contract, the Contractor shall, within 14 days of the Commencement Date, submit to the Employer the name and particulars of the person the Contractor proposes to appoint.

The Contractor's Representative shall give his whole time to directing the preparation of the Construction Documents and the execution of the Works. Except as otherwise stated in the Contract, the Contractor's Representative shall receive (on behalf of the Contractor) all notices, instructions, consents, approvals, certificates, determinations and other communications under the Contract.

Co-ordination of

the Works

The Contractor shall be responsible for the co-ordination and proper execution of the Works, including co-ordination of other contractors and attending upon other contractors and other relevant parties and authorities to the extent specified in the Employer's Requirements. The Contractor shall, afford all reasonable opportunities for the carrying outof the works by:

(a)    any other contractors employed by the Employer and their workmen,

(b)    the workmen or employees of the Employer, and

(c)    the workmen of any legally constituted public authorities who may be employed in the execution on or near the Site of any work not included in the Contract, which the Employer may require, and

(d)    the relevant authorities or utilities companies who may be performing their duties in connection with the Works

The Contractor shall obtain, co-ordinate and submit to the Employer for his information all details (including details of work to be carried out off the Site) from Subcontractors. The Contractor shall be responsible for the locations of their work or materials, in order to ensure that there will be no conflict of the said Subcontractor's work with the work of other Subcontractors, the Contractor or other contractors.

The Contractor shall not subcontract the whole of the Works. Unless otherwise stated in Part II:

(a)    the Contractor shall follow the procedures stipulated in the Contract for the procurement of subcontractors for supply of materials and/or the carrying out of part of the Works;

(b)    the Contractor shall ensure the provisions in clause 1.16 are stipulated in the subcontracts under sub-clause 4.4 (a);

The Contractor shall be responsible for observance by all Subcontractors of all the provisions of the Contract.

Proprietary

Products and materials

Unforeseeable

Ground

Conditions

If during the course of the Works, the Contractor encounters adverse ground conditions which in his opinion could not be reasonably foreseen at the time of his submission of the Contractor's Proposal, he shall give notice in writing to the Employer. The Employer shall, upon receipt of such notice, make due inspection and investigation and proceed to agree or determine in accordance with Sub-clause 2.7

(a)    any extension of time to which the Contractor is entitled under Sub-clause 8.3,

(b)    the amount of such direct loss and/or expense, which in his opinion has not been included in the definition of Prime Cost in Schedule 1, to be included as part of the Prime Cost, plus the Percentage Fee, and notify the Contractor accordingly.

The Contractor shall submit a programme to the Employer, for information, within such period as may be stated in the Contract or, if no period is so stated, within 28 days of the Commencement Date. The programme shall include the following:

(a)    the order in which the Contractor proposes to carry out the Works (including each stage of design, procurement, manufacture, delivery to Site, construction, erection, testing and commissioning),

(b)    all major events and activities in the production of Construction Documents,

(c)    the periods for the pre-construction reviews and for any other submissions, approvals and consents specified in the Employer's Requirements, and

(d)    the sequence of all tests specified in the Contract.

(e)    the timing for all relevant statutory inspections for Occupation Permit of the relevant sections

The Contractor shall, on a regular basis, update the programme for the Works for the Employer's information.

(a)    any extension to the Time for Completion which the Contractor is entitled under Sub-Clause 8.3, and

(b)    the amount of such direct loss and / or expense to be included in the Prime Cost, plus the Percentage Fee ;

Design Review of Construction

Documents

(a)    law in Macau SAR, and

(b)    the documents forming the Contract, as may be altered or modified from time to time by Variations.

Technical

Standards and Regulations

(a)    manufacturer's standard samples of Materials; and

(b)    samples (if any) specified in the Employer's Requirements and/or the Contractor's Proposals for the Employer's approval.

As-Built

Drawings, etc.

(a)    the claim or proceedings arise out of the design, construction, manufacture or use of the Works;

(b)    the infringement (or allegation of infringement) was not the result of part (or all) of the Works being used for a purpose other than that indicated by, or reasonably to be inferred from, the Contract;

(c)    the infringement (or allegation of infringement) was not the result of part (or all) of the Works being used in association or combination with any thing not supplied by the Contractor, unless such association or combination was disclosed to the Contractor prior to the Commencement Date or is stated in the Contract; and

(d)    the infringement (or allegation of infringement) was not the unavoidable result of the Contractor's compliance with the Employer's Requirements.

Except to the extent that the Employer agrees otherwise, the Contractor shall not make any admission which might be prejudicial to the Employer, until the Contractor has given the Employer such reasonable security as the Employer may require. The security shall be for an amount which is an assessment of the compensation, damages, charges and costs for which the Employer may become liable, and to which the indemnity under this Sub-Clause applies.

It is expressly stipulated that all costs incurred by the Contractor under this clause shall not be considered as part of the Prime Cost.

Contractor�s

Error

If errors, omissions, ambiguities, inconsistencies, inadequacies or other defects are found in the Design and/or the Construction Documents and/or the Works, they and the Works shall be rectified, notwithstanding any consent or approval of such by the Employer.

Any additional cost arising from such rectification shall be borne by the Contractor and shall not be considered as part of the Prime Cost. For the purpose of this Sub-clause, additional cost shall mean the cost in excess of that which the Employer has to pay under the Prime Cost had there been no default on the part of the Contractor in the Design and/or the Construction Documents and/or the Works.

The Contractor shall at all times take all reasonable precautions to maintain the health and safety of the Contractor's staff and labour. In collaboration with local health authorities, the Contractor shall ensure that medical staff, first aid facilities, sick bay and ambulance service are available at all times at the Site and at any accommodation for Contractor's and Employer's personnel, and that suitable arrangement are made for all necessary welfare and hygiene requirements and for the prevention of epidemics.

The Contractor shall appoint such relevant qualified and designated Health and Safety Officer at the Site, responsible for maintaining safety and protection against accidents. The said Health and Safety Officer shall be qualified for this responsibility, and shall have the authority to issue instructions and take protective measures to prevent accidents. Throughout the execution of the Works, the Contractor shall provide whatever is required by the Health and Safety Officer in order for him to exercise his responsibilities.

The Contractor shall send to the Employer details of any accident as soon as practicable after its occurrence. The Contractor shall maintain records and make reports concerning health, safety and welfare of persons, and damage to property, as the Employer may reasonably require.

(a)    persists in any misconduct,

(b)    is incompetent or negligent in the performance of his duties,

(c)    fails to conform with any provisions of the Contract, or

(d)      persists in any conduct which is prejudicial to safety, health, or the protection of the environment.

Disorderly

Conduct

All Works under the Contract including all Plant and Materials to be supplied and/or manufactured, shall be executed :

(a)    in the manner set out in the Contract, and.

(b)    In a proper workmanlike and careful manner, in accordance with recognised good practice, and

(c)    With properly equipped facilities and non-hardzardous materials, except as otherwise specified in the Contract.

The Employer shall be entitled to have full access, during manufacture, fabrication and preparation at any places where works are being carried out or where materials including natural materials are being obtained, to inspect, examine and test the materials and workmanship, and to check the progress of manufacture, of all Plant and Materials to be supplied under the Contract.

The Contractor shall give the Employer full opportunity to inspect, examine, measure and test any work on Site or wherever carried out including providing access, facilities, permissions and safety equipment. No such activity shall relieve the Contractor from any obligation or responsibility.

Notwithstanding any previous test or certification, the Employer is empowered to instruct the Contractor to :

(a)    remove from the Site and replace any Plant or Material which is not in accordance with the Contract,

(b)    remove and re-execute any other work which is not in accordance with the Contract, and

(c)    execute any work which is urgently required for the safety of the Works, if such arises because of an accident or unforeseeable event and not due to Contractor's own fault in the design of the Works.

The Contractor shall comply with the instruction within a reasonable time, which shall be the time (if any) specified in the Employer's instruction, or immediately if urgency is specified under sub-paragraph ( c ). It is expressly stipulated that all costs incurred by the Contractor under the above clauses (a) and (b) shall not be considered as part of the Prime Cost.

If the Contractor fails to comply with the instruction, the Employer shall be entitled to employ and pay other persons to carry out the works and all costs and expenses incurred by the Employer shall be deducted from monies payable to the Contractor.

Each item of Plant and Materials shall become the property of the Employer at whichever is the earlier of the following times, free from liens and other encumbrances :

(a)    When it has been incorporated into the Works; or

(b)    when the Contractor has received payment of the value of the Plant and Materials.

The Contractor may apply for an extension of the Time for Completion if he is or will be delayed either before or after the Time for Completion by any of the following causes:

(a)    a variation (unless an adjustment to the Time for Completion is agreed under Sub-Clause 14.2),

(b)    a force majeure event (as defined in Sub-Clause 19.1),

(c)    a cause of delay giving an entitlement to extension of time under a Sub-Clause of these Conditions,

(d)    any delay, impediment or prevention by the Employer,

(e)    any special circumstance of any kind whatsoever

Within 28 days of the first day of such delay (or such other period as may be agreed by the Employer), the Contractor shall submit full supporting details of his application. Except that, if the Contractor cannot submit all relevant details within such period because the cause of delay continued for a period exceeding 7 days, the Contractor shall submit interim details at intervals of not more than 28 days (from the first day of such delay) and full and final supporting details of his application within 21 days of the last day of delay.

The compliance with the above submission requirements by the Contractor are conditions precedent to his application for extension of Time for Completion being considered by the Employer.

(a)    any extension of time to which the Contractor is entitled under Sub-Clause 8.6, and

(b)    the amount of such direct loss and/ or expense to be included in the Prime Cost, plus the Percentage Fee;

(a)    issue a certificate of practical completion stating the date on which, in the Employer's opinion, the Works were practically completed in accordance with the Contract, or

(b)    give instructions in writing to the Contractor specifying all the work which, in the Employer's opinion, is required to be done by the Contractor before such certificate can be issued, in which case the Contractor shall not be permitted to make any further request for a certificate of practical completion and the provisions of Sub-Clause 9.2 shall apply.

Notwithstanding the provisions of Sub-Clause 9.1, as soon as in the opinion of the Employer the Works have been practically completed and satisfactorily passed any final acceptance or commissioning test which may be prescribed by the Contract, the Employer shall issue a certificate of practical completion in respect of the Works and Practical Completion of the Works shall be deemed for all the purposes of this Contract to have taken place on the day named in such certificate.

The Contractor shall carry out any outstanding work as soon as practicable after the issue of the certificate of practical completion or as reasonably directed by the Employer.

The provisions of Sub-Clause 9.1 and 9.2 shall apply equally to any Section.

(a)    The Employer shall give a certificate of practical completion in respect of any part of the Works which has been completed to the satisfaction of the Employer and is required by the Employer for permanent occupation or use before the completion of the Works or any Section.

(b)    The Employer, following a written request from the Contractor, may give a certificate of practical completion in respect of any substantial part of the Works which has been completed to the satisfaction of the Employer before the completion of the Works or any Section and is capable of permanent occupation and/ or permanent use by the Employer.

(c)    When a certificate of practical completion is given in respect of a part of the Works such part shall be considered as completed and the Defects Liability Period for such part shall commence on the day following the date of completion stated in such certificate.

(a)    the part which is used shall be deemed to have been taken over at the date on which it is used,

(b)    the Employer shall, when requested by the Contractor, issue a Practical Completion Certificate accordingly, and

(c)    the Contractor shall cease to be liable for the care of such part from such date, when responsibility shall pass to the Employer.

The Defects Liability Period commences on the date following the date stated in the Employer's certificate of practical completion in sub-clause 9.1 or 9.3 above. Any defects, shrinkages or other faults which shall appear within the Defects Liability Period and which are due to design faults errors or deficiencies or due to materials or workmanship not in accordance with this Contract shall be specified by the Employer in a Schedule of Defects which he shall deliver to the Contractor from time to time as appropriate and the last of such Schedule of Defects by not later than fourteen days after the expiration of the said Defects Liability Period, and within a reasonable time after receipt of each such Schedule, the defects, shrinkages and other faults therein specified shall be made good by the Contractor entirely at his own cost.

Notwithstanding the provisions above, the Employer may whenever he considers it necessary so to do, issue instructions requiring any defect, shrinkage or other fault which shall appear within the Defects Liability Period and which is due to design faults errors or deficiencies or due to materials or workmanship not in accordance with this Contract to be made good within such reasonable time or times specified in the said instruction, and the Contractor shall within such time or times after receipt of such instructions comply with the same entirely at his own cost. Provided that no such instructions shall be issued after delivery of a Schedule of Defects or after fourteen days from the expiration of the said Defects Liability Period.

Failure to Remedy

Defects

(a)    carry out the work himself or by others, in a reasonable manner and at the Contractor's cost, but the Contractor shall have no responsibility for such work: the costs properly incurred by the Employer in remedying the defect or damage shall be recoverable from the Contractor by the Employer; or

(b)    determine in accordance with Sub-Clause 2.7 and certify a reasonable reduction in the Prime Cost of the Works, plus the Percentage Fee.

Certificate

of Making Good Defects

Unfulfilled

Obligations

The Employer may, at his sole discretion, at any time during the Contract and upon the application by the Contractor, make interest-free advance payments to the Contractor for the purpose of the Contractor's mobilization or for other reasons in connection with the Contract. For the purpose of this clause, advance payments shall mean payments of such items of Prime Cost as defined in Schedule 1 of the Contract but which the Contractor could not provide the necessary substantiation at the time of application. The total value of such advance payments, the number and timing of instalments (if more than one) and the method of deductions or set off against subsequent payments by the Employer shall be as stated clearly by the Contractor in his application which are subject to the Employer's acceptance or modification otherwise at the Employer's own discretion.

Any such advance payments being made by the Employer shall be set off as deductions from monies due to the Contractor in subsequent interim payments in the manner agreed between the Employer and the Contractor until the full amount of the advance payments has been set off.

The Employer shall at the times and in the manner hereinafter provided pay to the Contractor :

(a)    The Prime Cost of the Works, and

(b)    The Percentage Fee stated in Schedule 2 hereto.

The Contractor shall ensure that all items of Prime Costs are reasonably incurred, shall check that the amounts as claimed by sub-contractors, suppliers or labour are in accordance with the relevant sub-contracts or contracts of sales or contracts of employment, and shall take all reasonable steps to check the authenticity and reasonable accuracy and appropriateness of the accounts or the extent of work done being claimed. The Employer shall not be obliged to check the accounts, but he may instruct or engage the Quantity Surveyor to check the accounts including the accounts of any sub-contractors and suppliers. Any checking shall not relieve the Contractor of his responsibility and liability herein.

At monthly interval after the Commencement Date, the Contractor shall submit to the Employer (with copy to the Quantity Surveyor) a detailed and up-to-date account of the prime costs (nett of applicable discounts) payable (before retention) in respect of :

(a)    the works properly executed (including design of the Works);

(b)    the materials and goods delivered to or adjacent to the Works for use thereon including formwork and scaffolding;

(c)    any off-site materials or goods provided that :

(i)     Such materials or goods are intended for inclusion in the Works;

(ii)    Such materials or goods are in accordance with this Contract;

(iii)  The Contractor furnishes to the Employer reasonable proof that the premises where the materials or goods have been assembled or stored are owned or leased by the Contractor;

(iv)   Such materials or goods have been and are set apart at the premises where they have been assembled or stored, and have been clearly and visibly marked, individually or in sets, so as to identify the person to whose order they are held, and their destination as being the Works;

(v)    The Contractor furnishes to the Employer evidence that such materials or goods are insured against the perils set out in these Conditions;

(vi)   The Contractor furnishes to the Employer reasonable proof that the property in such materials or goods has been duly vested in the Contractor and that the conditions set out in paragraphs (i) to (v) of this sub-clause have been complied with.

(d)    any deposit payable in respect of materials order for the works.

Interim

Payment

Certificates

Within 21 days after the receipt of the Contractor's monthly account, the Quantity Surveyor shall make a recommendation to the Employer of the amount which he considers to be payable in accordance with the provisions in the Contract, The Employer shall then (within 4 working days of receiving the Quantity Surveyor's recommendation) issue a certificate stating the amount due to the Contractor from the Employer and the Contractor shall on presenting any such certificate to the Employer be entitled to payment therefor within the Period for Honouring Certificates as stated in Part II.

The amount stated as due in a payment certificate shall be the sum of the amounts computed in the following paragraphs :

(a)    the prime costs (before retention) shown in the Contractor's monthly account which complies with the requirements of this Agreements , plus

(b)    the Percentage Fee on prime costs as stated in Schedule 2 of this Agreement; less

(c)    an amount of retention, calculated from the total of (a) and (b) above times the percentage retention and subject to a maximum amount both as stated in Part II ;

The said amount retained by virtue of this sub-clause (c) shall be subject to the following rules :

(i)     Any payment by the Contractor to designers etc. engaged by him and subject to separate stage payment under their respective agreement shall not be subject to retention.

(ii)    The Employer's interest in any amounts to be retained shall be fiduciary as trustee for the Contractor (but without obligation to invest), and the Contractor's beneficial interest therein shall be subject only to the right of the Employer to have recourse thereto from time to time for payment of any amount which he is entitled under the provisions of this Agreement to deduct from any sum due or to become due to the Contractor.

(iii)  On the issue of the Practical Completion Certificate for the Works or Sections, the Employer shall issue a certificate for 50% of the total amounts of retention then so retained for the Works or Sections and the Contractor shall be entitled to payment of the said 50% within the Period for Honouring Certificates as stated in Part II.

(iv)   On the issue of the Certificate of Completion of Making Good Defects for the Works or Sections, the Employer shall issue a certificate for the residue of the amounts then so retained for the Works or Sections and the Contractor shall be entitled to payment of the said residue within the Period for Honouring Certificates as stated in Part II; (plus or minus) as the case may be.

(d)    any amounts to be added or deducted for the advance payments or repayments in accordance with Sub-Clause 13.2; less

(e)    any amounts previously paid under this clause; less

(f)     deductions which the Employer is entitled to make under this Agreement.

The Contractor shall keep full and accurate accounts of, and all original invoices, records and receipts relating to, all payments made and work performed for the purpose of the Contract. The Contractor shall adopt an "Open Book" policy for this Contract and details of the accounts will be made available (via electronic or other means acceptable to the Employer) for inspection by the Employer. The Contractor shall also provide all justifications and explanations on every prime cost items if so requested by the Employer (and/or the Quantity Surveyor).

Before issuing any certificate under clause 13.5 hereinabove, the Employer may request the Contractor to furnish him reasonable proof that all amounts (less due retentions) included in the calculation of the amount stated as due in previous certificates in respect of any of the Subcontractors, and subject to the terms of payment of the said Subcontract, have been duly discharged, and if the Contractor fails to comply with such request and unless he shall produce to the Employer in writing reasonable cause for withholding or refusing to discharge such amounts as are due and also reasonable proof that he has so informed the Subcontractor, then the Employer may at his sole discretion himself pay such amounts to any Subcontractor concerned and deduct the same from any monies due or become due to the Contractor.

Final

Ascertainment of Prime Cost

(a)    the sum of all amounts previously certified; and

(b)    the sum of the Prime Cost of the Works (including any ascertained loss and/ or expense) plus the Percentage Fee stated in Schedule 2 hereto,

        andthe difference (if any) between the two sums shall

(a)    fraud, dishonesty or fraudulent concealment relating to the Works, or any part thereof, or to any matter dealt with in the said certificate; or

(b)    any defect (including any omission) in the Works, or any part thereof which reasonable inspection or examination at any reasonable time during the carrying out of the Works or before the issue of the said certificate would not have disclosed;

         or

(c)    any accidental inclusion or exclusion of any work, materials, goods or figure in any computation or any arithmetical error in any computation.

(a)    a description of the proposed design and/or work to be performed and a programme for its execution,

(b)    the Contractor's proposal for any necessary modifications to the programme according to Sub-Clause 4.18, and

(c)    the Contractor's proposal for adjustment to the Guaranteed Maximum Price, Time for Completion and/or modifications to the Contract.

Payment in

Applicable

Currencies

(a)    work to be executed (including Plant, Materials or services to be supplied) by the Contractor

(b)    Plant, Materials or services to be purchased by the Contractor.

Contractor's Entitlement to

Suspend Work

(a)    any extension of time to which the Contractor is entitled under Sub-Clause 8.3, and

(b)    the amount of such direct loss and / or expense to be included in the Prime Cost, plus the Percentage Fee which shall be payable to the Contractor,

(a)    fails to pay the Contractor the amount due under any certificate of the Employer within 30 days after the expiry of the time stated in Sub-Clause 13.5 within which payment is to be made (except for any deduction that the Employer is entitled to make under the Contract),

(b)    becomes bankrupt or makes a composition or arrangement with his creditors or has a winding up order made or (except for the purposes of reconstruction or amalgamation) a resolution for voluntary winding up passed or has a liquidator or receiver or manager of his business or undertaking duly appointed or has possession taken by or on behalf of the holders of any debentures secured by a floating charge or of any property comprised in or subject to the floating charge,

(c)    consistently fails to meet the Employer's obligations under the Contract, or

(d)    assigns the Contract without the Contractor's consent,

Cessation of Work

and Removal of

Contractor's Equipment

(a)    cease all further work, except for such work as may be necessary and instructed by the Employer for the purpose of making safe or protecting those parts of the Works already executed, and any work required to leave the Site in a clean and safe condition,

(b)    hand over all Construction Documents, Plant and Materials for which the Contractor has received payment

(c)    hand over those other parts of the Works executed by the Contractor up to the date of termination, and

(d)    remove all Contractor's Equipment which is on the Site and repatriate all his staff and labour from the Site.

Payment on

Termination

The Contractor shall indemnify and hold harmless the Employer, the Employer's Representative, their contractors, agents and employees from and against all claims, damages, losses and expenses arising out of or resulting from the Works, including professional services provided by the Contractor.

These indemnification obligations shall be limited to claims, damages, losses and expenses which are attributable to bodily injury, sickness, disease or death, or to injury to or destruction of physical property (other than the Works). Such obligations shall also be limited to the extent that such claims, damages, losses or expenses are caused in whole or in part by a breach of a duty of care, imposed by law on the Contractor or anyone directly or indirectly employed by the Contractor.

The Contractor shall take full responsibility for the care of the Works from the Commencement Date until the date of issue of the Completion Certificate, when responsibility shall pass to the Employer. If the Employer issues a Completion Certificate for any Section or part of the Works, the Contractor shall cease to be responsible for the care of that Section or part from the date of issue of such Completion Certificate, when responsibility shall pass to the Employer.

The Contractor shall take responsibility for the care of any outstanding work which is required to be completed prior to the expiry of the Contract Period, until the Employer confirms in writing that such outstanding work has been completed.

If any loss or damage happens to the Works, arising from any cause other than the Employer's risks listed in Sub-Clause 17.3, during the period for which the Contractor is responsible, the Contractor shall rectify such loss or damage, at his cost, so that the Works conform with the Contract.

The Employer's risks of loss and damage are:

(a)    war, hostilities (whether war be declared or not), invasion, act of foreign enemies,

(b)    rebellion, revolution, insurrection, or military or usurped power, or civil war,

(c)    ionising, radiations, or contamination by radio-activity from any nuclear fuel, or from any nuclear waste from the combustion of nuclear fuel, radio-active toxic explosive, or other hazardous properties of any explosive nuclear assembly or nuclear component of such assembly,

(d)    pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds,

(e)    riot, commotion or disorder, unless solely restricted to employees of the Contractor or of his Subcontractors and arising from the conduct of the Works,

(f)     loss or damage due to the use or occupation by the Employer of any Section or part of the Works, except as may be provided for in the Contract, and

(g)    any operation of the forces of nature against which an experienced contractor could not reasonably have been expected to take precautions.

The Contractor shall give notice, to the Employer of an Employer's risk upon it becoming known to the Contractor. If an Employer's risk results in loss or damage, the Contractor shall rectify such loss or damage. If the Contractor suffer delay and/or incurs loss and/ or expense as a result of any Employer's risk, the Contractor shall give further notice to the Employer. After receipt of such further notice the Employer shall proceed in accordance with Sub-Clause 2.7 to agree or determine

(a)    any extension of time to which the Contractor is entitled under Sub-Clause 8.3, and

(b)    the amount of such loss and/ or expense to be included in the Prime Cost, plus the Percentage Fee, which shall be payable to the Contractor,

and shall notify the Contractor accordingly.

The Contractor shall effect professional indemnity insurance, which shall insure the Contractor's liability by reason of professional negligence in the design of the Works. Such insurance shall be for a limit of not less than the amount specified in Part II .

The Contractor shall use his best endeavours to maintain such professional indemnity insurance in full force and effect throughout the periods of his liability under the Contract.

The Contractor shall insure the Construction Documents, Plant, Materials, and Works in the joint names of the Employer, the Contractor and Subcontractors, against all loss or damage. This insurance shall cover loss or damage from any cause other than the Employer's risks listed in Sub-Clause 17.3 sub-paragraphs (a), (b) (c) and (d) in so far as such insurance is readily obtainable. Such insurance shall be for a limit of not less than the full replacement cost (including profit) and shall also cover the costs of demolition and removal of debris. The coverage shall be no less than that stated in Part II. Such insurance shall be in such a manner that the Employer and the Contractor are covered from the date by which the evidence is to be submitted under Sub-Clause 18.5(a), until one month after the date of issue of the Practical Completion Certificate for the Works. The Contractor shall extend such insurance to provide cover until the date of issue of the Certificate of Making Good Defects, for loss or damage for which the Contractor is liable arising from a cause occurring prior to the issue of the Practical Completion Certificate, and for loss or damage occasioned by the Contractor or Subcontractors in the course of any other operations (including those under Clause 12).

The Contractor shall insure the Contractor's Equipment in the joint names of the Employer, the Contractor and Subcontractors, against all loss or damage. The insurance shall cover loss or damage from any cause other than the Employer's risks listed in Sub-Clause 17.3 sub-paragraphs (a), (b), (c) and (d) in so far as such insurance is readily obtainable. Such insurance shall be for a limit of not less than the full replacement value (including delivery to Site). Such insurance shall be in such a manner that each item of equipment is insured while it is being transported to the Site and throughout the period it is on or near the Site.

Each insurance policy shall be consistent with the general terms agreed in writing prior to the Effective Date, and such agreement shall take precedence over the provisions of this Clause.

The Contractor shall, within 28 days of the Effective Date, submit to the Employer:

(a)    evidence that the insurances described in this Clause have been effected, and

(b)    copies of the policies for the insurances described in Sub-Clauses 18.2 and 18.3

(c)    statements from relevant insurance undertakers that the insurances complies fully with the requirements of the Contract.

When each premium has been paid, the Contractor shall submit copy of receipts to the Employer.

The Contractor shall effect all insurances for which he is responsible with insurers and in terms approved by the Employer. Each policy insuring against loss or damage shall provide for payments to be made in the currencies required to rectify such loss or damage. Payments received from insurers shall be used for the rectification of such loss or damage.

The Contractor (and, if appropriate, the Employer) shall comply with the conditions stipulated in each of the insurance policies. The Contractor shall make no material alteration to the terms of any insurance without the prior approval of the Employer. If an insurer makes (or purports to make) any such alteration, the Contractor shall notify the Employer immediately.

If the Contractor fails to effect and keep in force any of the insurances required under the Contract, or fails to provide satisfactory evidence, policies and receipts in accordance with this Sub-Clause, the Employer may, without prejudice to any other right or remedy, effect insurance for the coverage relevant to such default, and pay the premiums due. Such payments shall be recoverable from the Contractor by the Employer, and may be deducted by the Employer from any monies due, or to become due, to the Contractor.

Nothing in this Clause limits the obligations, liabilities or responsibilities of the Contractor or the Employer, under the other terms of the Contract or otherwise. Any amounts not insured or not recovered from the insurers shall be borne by the Contractor and/or the Employer accordingly.

Warranties and

Guarantees

(1)      The Contractor shall, within seven (7) days of the Effective Date, deliver at no cost to the Employer,

a)      a Direct Warranty in the form appearing in Annex B to these Conditions duly executed by the Contractor; and

b)      a duly executed Contractor's Guarantee from Paul Y.-ITC Construction Holdings Limited (the Contractor's Parent Company) in the form appearing in Annex C to these Conditions

Sub-contractors�

Warranties and

Guarantees

The Contractor shall, if requested by the Employer, deliver to the Employer, at the Sub-Contractor's cost,

a)      a duly executed Sub-Contractor's Warranty in favour of the Employer warranting the due performance of the respective sub-contract or supply contract.

b)      a duly executed Sub-Contractor's Guarantee to the Employer from the Sub-Contractor's Guarantor (the Sub-Contractor's Parent Company, if applicable) guaranteeing the undertakings of such Sub-Contractor contained in his respective Warranty to the Employer.

The Contractor shall

a)      if so requested by the Employer, undertake to submit the Contractor's Performance Bond duly executed by such bank or other institution as the Employer shall have prior approved in writing in the amount equal to 10% of the Initial Contract Price and in the form appearing in Annex A to these Conditions for the due performance of the Contract. The cost of obtaining the bond shall be included in the Prime Cost.

b)      if he considers it necessary or appropriate, or if so requested by the Employer, undertake to procure a Sub-Contractor to submit the Sub-Contractor's Performance Bond duly executed by such bank or other institution as the Employer shall have previously approved in writing to be bound to the Contractor in a sum equal to ten percent (10%) of the respective sub-contract price or supply contract price for the due performance of such sub-contract or supply contract. The cost of obtaining the bond shall be deemed to be borne by the subcontractor if this requirement had already included in the sub-contract or supply contract at the time of procurement of the sub-contractor, or otherwise be included in the Prime Cost.

In this Clause, "force majeure" means an event beyond the control of the Employer and the Contractor, which makes it impossible or illegal for a party to perform, including but not limited to:

(a)    act of God;

(b)    war, hostilities (whether war be declared or not), invasion, act of foreign enemies, mobilization, requisition, or embargo;

(c)    rebellion, terrorism, revolution, insurrection, or military or usurped power, or civil war;

(d)    contamination by radio-activity from any nuclear fuel, or from any nuclear waste from the combustion of nuclear fuel, radio-active toxic explosive, or other hazardous properties of any explosive nuclear assembly or nuclear component of such assembly;

(e)    riot, commotion, disorder, strike or lockout by persons other than the personnel or employees of the Contractor or of his Subcontractors.

(a)    the amounts payable for any work carried out for which a price is stated in the Contract;

(b)    the Cost of Plant and Materials ordered for the Works which have been delivered to the Contractor, or of which the Contractor is liable to accept delivery: such Plant and Materials shall become the property of (and be at the risk of) the Employer when paid for by the Employer, and the Contractor shall place the same at the Employer's disposal;

(c)    any other Cost or liability which in the circumstances was reasonably incurred by the Contractor in the expectation of completing the Works;

(d)    the reasonable Cost of removal of Temporary Works and Contractor's Equipment from the Site and the return of such items to the Contractor's works in his country (or to any other destination at no greater cost;) and

(e)    the reasonable Cost of repatriation of the Contractor's staff and labour employed wholly in connection with the Works at the date of such termination;

The Contractor shall keep such contemporary records as may be necessary to substantiate any claim, either on the Site or at another location acceptable to the Employer. Without admitting the Employer's liability, the Employer shall, on receipt of such notice, inspect such records and may instruct the Contractor to keep further contemporary records. The Contractor shall permit the Employer to inspect all such records, and shall (if instructed) submit copies to the Employer.

Within 28 days of such notice, or such other time as may be agreed by the Employer, the Contractor shall send to the Employer a fully detailed claim which includes full supporting particulars of the basis of the claim and of the extension of time and/or additional payment claimed. Where the event giving rise to the claim has a continuing effect, such detailed claim shall be considered as interim. The Contractor shall then, at such intervals as the Employer may reasonably require, send further interim accounts giving the accumulated amount of the claim and any further particulars. Where interim accounts are sent to the Employer, the Contractor shall send a final account within 28 days of the end of the effects resulting from the event of claim.

Within 42 days after receiving a claim or any further particulars supporting a previous claim, or within such other period as agreed between the Employer and the Contractor, the Employer shall respond with approval, or with disapproval and detailed comments on the principles of the claim and he may also request any necessary further particulars within such time.

The Employer shall proceed in accordance with Sub-clause 2.7 to agree or determine (i) the extension of time if any in accordance with Sub-clause 8.3 and/or (ii) the amount of monetary compensation to the Contractor, and inform the Contractor accordingly.

The requirements of this Sub-clause are in additon to those of any other relevant Sub-clauses. If the Contractor fails to observe the above requirement or the requirements in relation to claims in any other relevant Sub-clauses, the Employer shall be discharged from all liabilities in connection with the claim.

The Hong Kong International Arbitration Centre Domestic Arbitration Rules shall apply to any arbitration instituted in accordance with this Clause unless the parties agree to the contrary. Notwithstanding Article 8.2 and Article 13 of the Arbitration Rules, the place of meetings and hearings in the arbitration shall be Hong Kong unless the parties otherwise agree.

The reference to arbitration under this Clause shall be a domestic arbitration for the purposes of Part II of the Arbitration Ordinance (Cap. 341).

Proposed HOTEL & CASINO DEVELOPMENT

Annex to General Conditions

Proposed HOTEL & CASINO DEVELOPMENT

Annex to General Conditions

Time for submission of programme

(if none is stated here, then within 28 days of the Commencement Date):

Clause

8

9

10

12

13

Unless otherwise agreed by the parties, the provisions of the Contract in regard to :

(a)    Commencement Date,

(b)    Date for Possession,

(c)    Time for Completion,

(d)    Extension of Time for Completion

(e)    Liquidated Damages for Delay,

(f)     Practical Completion Certificate,

(g)    Defects Liability Period,

(h)    Certificate of Making Good Defects,

(i)     Release of Retention,

(j)     Insurances, and

(k)    Final Certificate

shall apply to each Section or Stage with the necessary changes in points of detail as if the Section was subject to a separate and distinct contract between the Employer and the Contractor.

Percentage of retention:

Maximum retention :

10%

An amount which is equal to 5% of the total of the Estimated Prime Cost in Schedule 3 and the Percentage Fee in Schedule 2 to the nearest one thousand dollars

Amount of Professional Indemnity Insurance :

Period of Insurance :

Not less than HK$ 50,000,000.00

10 Years from the Date of Commencement

Not less than;

(a)    the Guaranteed Maximum Price, plus

(b)    HK$ 5,000,000.00 for demolition and removal of debris.

(See also Section 4.1 Employer's Requirements )

Not less than the minimum amount stated in the relevant statute of Macau SAR and the limit stated in the Employer's Requirement whichever is higher

(See also Section 4.1 Employer's Requirements )