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Bermuda
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77-0553536
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number)
|
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
|
|
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(Do not check if a smaller reporting company)
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|
Smaller reporting company
o
|
Emerging growth company
o
|
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Page
|
|
Part I.
|
FINANCIAL INFORMATION
|
|
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Item 1.
|
||
|
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||
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||
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|
||
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|
||
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
|
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Item 3.
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Item 4.
|
||
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Part II.
|
OTHER INFORMATION
|
|
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Item 1.
|
||
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Item 1A.
|
Risk Factors
|
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
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Item 3.
|
Defaults Upon Senior Securities
|
|
|
Item 4.
|
Mine Safety Disclosures
|
|
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Item 5.
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Other Information
|
|
|
Item 6.
|
Exhibits
|
|
|
|
||
|
ALPHA AND OMEGA SEMICONDUCTOR LIMITED
|
|||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||
|
(Unaudited, in thousands except par value per share)
|
|||||||
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
|
ASSETS
|
|
|
|
||||
|
Current assets:
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
116,150
|
|
|
$
|
87,774
|
|
|
Restricted cash
|
181
|
|
|
188
|
|
||
|
Accounts receivable, net
|
22,452
|
|
|
26,594
|
|
||
|
Inventories
|
73,349
|
|
|
68,848
|
|
||
|
Other current assets
|
4,948
|
|
|
4,526
|
|
||
|
Total current assets
|
217,080
|
|
|
187,930
|
|
||
|
Property, plant and equipment, net
|
117,335
|
|
|
116,084
|
|
||
|
Land use rights, net
|
8,737
|
|
|
—
|
|
||
|
Deferred income tax assets - long term
|
5,539
|
|
|
12,132
|
|
||
|
Other long term assets
|
21,522
|
|
|
2,359
|
|
||
|
Total assets
|
$
|
370,213
|
|
|
$
|
318,505
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
|
Current liabilities:
|
|
|
|
||||
|
Accounts payable
|
$
|
44,990
|
|
|
$
|
42,718
|
|
|
Accrued liabilities
|
23,673
|
|
|
22,590
|
|
||
|
Income taxes payable
|
2,879
|
|
|
2,356
|
|
||
|
Deferred margin
|
713
|
|
|
997
|
|
||
|
Capital leases
|
820
|
|
|
819
|
|
||
|
Total current liabilities
|
73,075
|
|
|
69,480
|
|
||
|
Income taxes payable - long term
|
985
|
|
|
1,577
|
|
||
|
Deferred income tax liabilities
|
2,938
|
|
|
2,973
|
|
||
|
Capital leases - long term
|
1,071
|
|
|
1,695
|
|
||
|
Other long term liabilities
|
567
|
|
|
741
|
|
||
|
Total liabilities
|
78,636
|
|
|
76,466
|
|
||
|
Commitments and contingencies (Note 9)
|
|
|
|
||||
|
Equity:
|
|
|
|
||||
|
Preferred shares, par value $0.002 per share:
|
|
|
|
||||
|
Authorized: 10,000 shares, issued and outstanding: none at March 31, 2017 and June 30, 2016
|
—
|
|
|
—
|
|
||
|
Common shares, par value $0.002 per share:
|
|
|
|
||||
|
Authorized: 50,000 shares, issued and outstanding: 29,391 shares and 23,778 shares, respectively at March 31, 2017 and 28,405 shares and 22,754 shares, respectively at June 30, 2016
|
59
|
|
|
57
|
|
||
|
Treasury shares at cost, 5,613 shares at March 31, 2017 and 5,651 shares at June 30, 2016
|
(49,876
|
)
|
|
(50,199
|
)
|
||
|
Additional paid-in capital
|
202,739
|
|
|
191,444
|
|
||
|
Accumulated other comprehensive income
|
39
|
|
|
769
|
|
||
|
Retained earnings
|
109,788
|
|
|
100,071
|
|
||
|
Total Alpha and Omega Semiconductor Limited shareholder's equity
|
262,749
|
|
|
242,142
|
|
||
|
Noncontrolling interest
|
28,828
|
|
|
(103
|
)
|
||
|
Total equity
|
291,577
|
|
|
242,039
|
|
||
|
Total liabilities and equity
|
$
|
370,213
|
|
|
$
|
318,505
|
|
|
|
|||||||||||||||
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
Revenue
|
$
|
93,281
|
|
|
$
|
82,987
|
|
|
$
|
285,330
|
|
|
$
|
244,251
|
|
|
Cost of goods sold
|
70,584
|
|
|
66,668
|
|
|
218,595
|
|
|
197,899
|
|
||||
|
Gross profit
|
22,697
|
|
|
16,319
|
|
|
66,735
|
|
|
46,352
|
|
||||
|
Operating expenses
|
|
|
|
|
|
|
|
||||||||
|
Research and development
|
7,625
|
|
|
6,924
|
|
|
21,928
|
|
|
19,029
|
|
||||
|
Selling, general and administrative
|
12,067
|
|
|
9,566
|
|
|
35,224
|
|
|
27,935
|
|
||||
|
Impairment of long-lived assets
|
—
|
|
|
—
|
|
|
—
|
|
|
432
|
|
||||
|
Total operating expenses
|
19,692
|
|
|
16,490
|
|
|
57,152
|
|
|
47,396
|
|
||||
|
Operating income (loss)
|
3,005
|
|
|
(171
|
)
|
|
9,583
|
|
|
(1,044
|
)
|
||||
|
Interest income and other income (loss), net
|
(74
|
)
|
|
132
|
|
|
(193
|
)
|
|
(335
|
)
|
||||
|
Interest expense
|
(22
|
)
|
|
(5
|
)
|
|
(72
|
)
|
|
(22
|
)
|
||||
|
Net income (loss) before income taxes
|
2,909
|
|
|
(44
|
)
|
|
9,318
|
|
|
(1,401
|
)
|
||||
|
Income tax expense
|
523
|
|
|
1,219
|
|
|
2,845
|
|
|
3,448
|
|
||||
|
Net income (loss) including noncontrolling interest
|
2,386
|
|
|
(1,263
|
)
|
|
6,473
|
|
|
(4,849
|
)
|
||||
|
Net loss attributable to noncontrolling interest
|
(1,170
|
)
|
|
—
|
|
|
(3,237
|
)
|
|
—
|
|
||||
|
Net income (loss) attributable to Alpha and Omega Semiconductor Limited
|
$
|
3,556
|
|
|
$
|
(1,263
|
)
|
|
$
|
9,710
|
|
|
$
|
(4,849
|
)
|
|
Net income (loss) per common share attributable to Alpha and Omega Semiconductor Limited
|
|
|
|
|
|
|
|
||||||||
|
Basic
|
$
|
0.15
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.42
|
|
|
$
|
(0.22
|
)
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.39
|
|
|
$
|
(0.22
|
)
|
|
Weighted average number of common shares attributable to Alpha and Omega Semiconductor Limited used to compute net income (loss) per share
|
|
|
|
|
|
|
|
||||||||
|
Basic
|
23,675
|
|
|
22,232
|
|
|
23,396
|
|
|
22,400
|
|
||||
|
Diluted
|
24,951
|
|
|
22,232
|
|
|
24,781
|
|
|
22,400
|
|
||||
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
Net income (loss) including noncontrolling interest
|
$
|
2,386
|
|
|
$
|
(1,263
|
)
|
|
$
|
6,473
|
|
|
$
|
(4,849
|
)
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency translation adjustment
|
693
|
|
|
22
|
|
|
(1,563
|
)
|
|
(133
|
)
|
||||
|
Comprehensive income (loss)
|
3,079
|
|
|
(1,241
|
)
|
|
4,910
|
|
|
(4,982
|
)
|
||||
|
Noncontrolling interest
|
(937
|
)
|
|
—
|
|
|
(4,069
|
)
|
|
—
|
|
||||
|
Comprehensive income (loss) attributable to Alpha and Omega Semiconductor Limited
|
$
|
4,016
|
|
|
$
|
(1,241
|
)
|
|
$
|
8,979
|
|
|
$
|
(4,982
|
)
|
|
|
Nine Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
Cash flows from operating activities
|
|
|
|
||||
|
Net income (loss)
|
$
|
6,473
|
|
|
$
|
(4,849
|
)
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
|
Depreciation and amortization
|
20,148
|
|
|
20,705
|
|
||
|
Share-based compensation expense
|
4,585
|
|
|
3,047
|
|
||
|
Deferred income taxes, net
|
6,558
|
|
|
791
|
|
||
|
Gain on disposal of property and equipment
|
(444
|
)
|
|
—
|
|
||
|
Impairment of long-lived assets
|
—
|
|
|
432
|
|
||
|
Changes in assets and liabilities:
|
|
|
|
||||
|
Accounts receivable, net
|
4,142
|
|
|
6,745
|
|
||
|
Inventories
|
(4,501
|
)
|
|
(3,736
|
)
|
||
|
Other current and long-term assets
|
(6,134
|
)
|
|
(2,453
|
)
|
||
|
Accounts payable
|
(1,711
|
)
|
|
2,285
|
|
||
|
Income taxes payable
|
(68
|
)
|
|
327
|
|
||
|
Accrued and other liabilities
|
52
|
|
|
3,067
|
|
||
|
Net cash provided by operating activities
|
29,100
|
|
|
26,361
|
|
||
|
Cash flows from investing activities
|
|
|
|
||||
|
Purchases of property and equipment excluding JV Company
|
(16,163
|
)
|
|
(13,777
|
)
|
||
|
Purchases of property and equipment in JV Company
|
(15,857
|
)
|
|
—
|
|
||
|
Purchases of land use rights in JV Company
|
(8,737
|
)
|
|
—
|
|
||
|
Proceeds from sale of property and equipment
|
602
|
|
|
—
|
|
||
|
Decrease in restricted cash
|
7
|
|
|
22
|
|
||
|
Net cash used in investing activities
|
(40,148
|
)
|
|
(13,755
|
)
|
||
|
Cash flows from financing activities
|
|
|
|
||||
|
Proceeds from investment by noncontrolling interest
|
33,000
|
|
|
—
|
|
||
|
Withholding tax on restricted stock units
|
(1,915
|
)
|
|
(948
|
)
|
||
|
Proceeds from exercise of stock options and ESPP
|
8,958
|
|
|
4,050
|
|
||
|
Payment for repurchases of common shares
|
—
|
|
|
(42,080
|
)
|
||
|
Principal payments on capital leases
|
(622
|
)
|
|
(706
|
)
|
||
|
Net cash provided by (used in) financing activities
|
39,421
|
|
|
(39,684
|
)
|
||
|
Effect of exchange rate changes on cash and cash equivalents
|
3
|
|
|
(84
|
)
|
||
|
Net increase (decrease) in cash and cash equivalents
|
28,376
|
|
|
(27,162
|
)
|
||
|
Cash and cash equivalents at beginning of period
|
87,774
|
|
|
106,085
|
|
||
|
Cash and cash equivalents at end of period
|
$
|
116,150
|
|
|
$
|
78,923
|
|
|
|
|
|
|
||||
|
Supplemental disclosures of non-cash investing and financing information:
|
|
|
|
||||
|
Property and equipment purchased but not yet paid
|
$
|
9,620
|
|
|
$
|
5,326
|
|
|
Re-issuance of treasury stock
|
$
|
7
|
|
|
$
|
164
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands, except per share data)
|
||||||||||||||
|
Numerator:
|
|
|
|
|
|
|
|
||||||||
|
Net income (loss) attributable to Alpha and Omega Semiconductor Limited
|
$
|
3,556
|
|
|
$
|
(1,263
|
)
|
|
$
|
9,710
|
|
|
$
|
(4,849
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
|
Basic:
|
|
|
|
|
|
|
|
||||||||
|
Weighted average number of common shares used to compute basic net income (loss) per share
|
23,675
|
|
|
22,232
|
|
|
23,396
|
|
|
22,400
|
|
||||
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
|
Weighted average number of common shares used to compute basic net income (loss) per share
|
23,675
|
|
|
22,232
|
|
|
23,396
|
|
|
22,400
|
|
||||
|
Effect of potentially dilutive securities:
|
|
|
|
|
|
|
|
||||||||
|
Stock options, RSUs and ESPP shares
|
1,276
|
|
|
—
|
|
|
1,385
|
|
|
—
|
|
||||
|
Weighted average number of common shares used to compute diluted net income (loss) per share
|
24,951
|
|
|
22,232
|
|
|
24,781
|
|
|
22,400
|
|
||||
|
Net income (loss) per share attributable to Alpha and Omega Semiconductor Limited:
|
|
|
|
|
|
|
|
||||||||
|
Basic
|
$
|
0.15
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.42
|
|
|
$
|
(0.22
|
)
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.39
|
|
|
$
|
(0.22
|
)
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
|
(in thousands)
|
||||||||
|
Employee stock options and RSUs
|
3
|
|
|
3,003
|
|
|
83
|
|
|
3,307
|
|
|
ESPP
|
20
|
|
|
416
|
|
|
12
|
|
|
385
|
|
|
Total potential dilutive securities
|
23
|
|
|
3,419
|
|
|
95
|
|
|
3,692
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||
|
Percentage of revenue
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
|
Customer A
|
27.3
|
%
|
|
24.8
|
%
|
|
26.2
|
%
|
|
24.0
|
%
|
|
Customer B
|
36.6
|
%
|
|
36.0
|
%
|
|
36.3
|
%
|
|
37.2
|
%
|
|
Customer C
|
10.5
|
%
|
|
12.9
|
%
|
|
11.7
|
%
|
|
12.7
|
%
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||
|
Percentage of accounts receivable
|
|
||||
|
Customer A
|
28.5
|
%
|
|
21.3
|
%
|
|
Customer B
|
10.1
|
%
|
|
16.7
|
%
|
|
Customer C
|
27.0
|
%
|
|
27.2
|
%
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
|
|
(in thousands)
|
||||||
|
Accounts receivable
|
$
|
41,163
|
|
|
$
|
43,324
|
|
|
Less: Allowance for price adjustments
|
(18,681
|
)
|
|
(16,700
|
)
|
||
|
Less: Allowance for doubtful accounts
|
(30
|
)
|
|
(30
|
)
|
||
|
Accounts receivable, net
|
$
|
22,452
|
|
|
$
|
26,594
|
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
|
|
(in thousands)
|
||||||
|
Raw materials
|
$
|
29,022
|
|
|
$
|
23,982
|
|
|
Work in-process
|
35,699
|
|
|
32,446
|
|
||
|
Finished goods
|
8,628
|
|
|
12,420
|
|
||
|
|
$
|
73,349
|
|
|
$
|
68,848
|
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
|
|
(in thousands)
|
||||||
|
Land
|
$
|
4,877
|
|
|
$
|
4,877
|
|
|
Building
|
4,325
|
|
|
4,323
|
|
||
|
Manufacturing machinery and equipment
|
207,745
|
|
|
193,164
|
|
||
|
Equipment and tooling
|
13,364
|
|
|
12,289
|
|
||
|
Computer equipment and software
|
24,113
|
|
|
23,448
|
|
||
|
Office furniture and equipment
|
1,979
|
|
|
1,822
|
|
||
|
Leasehold improvements
|
29,043
|
|
|
28,660
|
|
||
|
|
285,446
|
|
|
268,583
|
|
||
|
Less: Accumulated depreciation
|
(187,144
|
)
|
|
(168,687
|
)
|
||
|
|
98,302
|
|
|
99,896
|
|
||
|
Equipment and construction in progress
|
19,033
|
|
|
16,188
|
|
||
|
Property, plant and equipment, net
|
$
|
117,335
|
|
|
$
|
116,084
|
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
|
|
(in thousands)
|
||||||
|
Land use rights
|
$
|
8,737
|
|
|
$
|
—
|
|
|
Less: Accumulated depreciation
|
—
|
|
|
—
|
|
||
|
Land use rights, net
|
$
|
8,737
|
|
|
$
|
—
|
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
|
|
(in thousands)
|
||||||
|
Prepayments for property and equipment
|
$
|
13,453
|
|
|
$
|
506
|
|
|
Prepayment for others
|
216
|
|
|
42
|
|
||
|
Prepaid income tax
|
4,687
|
|
|
—
|
|
||
|
Investment in a privately held company
|
100
|
|
|
100
|
|
||
|
Office leases deposits
|
527
|
|
|
388
|
|
||
|
Custom deposits
|
2,256
|
|
|
1,039
|
|
||
|
Intangible assets
|
14
|
|
|
15
|
|
||
|
Goodwill
|
269
|
|
|
269
|
|
||
|
|
$
|
21,522
|
|
|
$
|
2,359
|
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
|
|
(in thousands)
|
||||||
|
Accrued compensation and benefit
|
$
|
9,940
|
|
|
$
|
10,211
|
|
|
Warranty accrual
|
1,872
|
|
|
1,495
|
|
||
|
Stock rotation accrual
|
1,712
|
|
|
1,988
|
|
||
|
Accrued professional fees
|
1,783
|
|
|
1,867
|
|
||
|
Accrued inventory
|
716
|
|
|
918
|
|
||
|
Accrued facilities related expenses
|
1,598
|
|
|
1,544
|
|
||
|
Other accrued expenses
|
6,052
|
|
|
4,567
|
|
||
|
|
$
|
23,673
|
|
|
$
|
22,590
|
|
|
|
Nine Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
|
Beginning balance
|
$
|
1,988
|
|
|
$
|
1,894
|
|
|
Additions
|
3,986
|
|
|
4,643
|
|
||
|
Utilization
|
(4,262
|
)
|
|
(4,481
|
)
|
||
|
Ending balance
|
$
|
1,712
|
|
|
$
|
2,056
|
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
|
|
(in thousands)
|
||||||
|
Deferred rent
|
$
|
567
|
|
|
$
|
741
|
|
|
|
|
Total AOS Stockholders' Equity
|
|
Noncontrolling Interest
|
|
Total Equity
|
||||||
|
Balance, June 30, 2016
|
|
$
|
242,142
|
|
|
$
|
(103
|
)
|
|
$
|
242,039
|
|
|
Contributions from noncontrolling interest
|
|
—
|
|
|
33,000
|
|
|
33,000
|
|
|||
|
Exercise of common stock options and release of RSUs
|
|
7,462
|
|
|
—
|
|
|
7,462
|
|
|||
|
Issuance of shares under ESPP
|
|
1,166
|
|
|
—
|
|
|
1,166
|
|
|||
|
Reissuance of treasury stock upon exercise of common stock options and release of RSUs
|
|
330
|
|
|
—
|
|
|
330
|
|
|||
|
Withholding tax on restricted stock units
|
|
(1,915
|
)
|
|
—
|
|
|
(1,915
|
)
|
|||
|
Stock-based compensation expense
|
|
4,585
|
|
|
—
|
|
|
4,585
|
|
|||
|
Net income (loss)
|
|
9,710
|
|
|
(3,237
|
)
|
|
6,473
|
|
|||
|
Cumulative translation adjustment
|
|
(731
|
)
|
|
(832
|
)
|
|
(1,563
|
)
|
|||
|
Balance, March 31, 2017
|
|
$
|
262,749
|
|
|
$
|
28,828
|
|
|
$
|
291,577
|
|
|
|
|
|
|
|
Weighted
|
|
|
|||||
|
|
|
|
Weighted
|
|
Average
|
|
|
|||||
|
|
|
|
Average
|
|
Remaining
|
|
|
|||||
|
|
Number of
|
|
Exercise Price
|
|
Contractual
|
|
Aggregate
|
|||||
|
|
Shares
|
|
Per Share
|
|
Term (in years)
|
|
Intrinsic Value
|
|||||
|
Outstanding at June 30, 2016
|
1,859,260
|
|
|
$
|
11.37
|
|
|
4.71
|
|
$
|
5,959,720
|
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
|
Exercised
|
(657,469
|
)
|
|
$
|
11.85
|
|
|
|
|
$
|
5,382,647
|
|
|
Canceled or forfeited
|
(112,500
|
)
|
|
$
|
12.72
|
|
|
|
|
|
||
|
Outstanding at March 31, 2017
|
1,089,291
|
|
|
$
|
10.95
|
|
|
4.63
|
|
$
|
6,932,190
|
|
|
Options vested and expected to vest
|
1,082,604
|
|
|
$
|
10.97
|
|
|
4.62
|
|
$
|
6,868,038
|
|
|
Exercisable at March 31, 2017
|
948,874
|
|
|
$
|
11.45
|
|
|
4.33
|
|
$
|
5,580,467
|
|
|
|
Number of Restricted Stock
Units
|
|
Weighted Average
Grant Date Fair
Value Per Share
|
|
Weighted Average
Remaining
Recognition
Period (Years)
|
|
Aggregate Intrinsic Value
|
|||||
|
Nonvested at June 30, 2016
|
933,063
|
|
|
$
|
9.18
|
|
|
1.73
|
|
$
|
12,997,568
|
|
|
Granted
|
605,043
|
|
|
$
|
18.10
|
|
|
|
|
|
||
|
Vested
|
(328,226
|
)
|
|
$
|
7.84
|
|
|
|
|
|
||
|
Forfeited
|
(21,725
|
)
|
|
$
|
12.38
|
|
|
|
|
|
||
|
Nonvested at March 31, 2017
|
1,188,155
|
|
|
$
|
14.04
|
|
|
1.95
|
|
$
|
20,424,384
|
|
|
RSUs vested and expected to vest
|
988,787
|
|
|
|
|
1.84
|
|
$
|
16,997,248
|
|
||
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
|
Cost of goods sold
|
$
|
222
|
|
|
$
|
187
|
|
|
$
|
622
|
|
|
$
|
475
|
|
|
Research and development
|
395
|
|
|
309
|
|
|
1,138
|
|
|
766
|
|
||||
|
Selling, general and administrative
|
1,098
|
|
|
677
|
|
|
2,825
|
|
|
1,806
|
|
||||
|
|
$
|
1,715
|
|
|
$
|
1,173
|
|
|
$
|
4,585
|
|
|
$
|
3,047
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
|
Hong Kong
|
$
|
75,785
|
|
|
$
|
71,684
|
|
|
$
|
236,873
|
|
|
$
|
212,041
|
|
|
China
|
15,334
|
|
|
9,520
|
|
|
42,159
|
|
|
26,458
|
|
||||
|
South Korea
|
294
|
|
|
504
|
|
|
1,053
|
|
|
1,604
|
|
||||
|
United States
|
1,075
|
|
|
726
|
|
|
2,767
|
|
|
2,227
|
|
||||
|
Other Countries
|
793
|
|
|
553
|
|
|
2,478
|
|
|
1,921
|
|
||||
|
|
$
|
93,281
|
|
|
$
|
82,987
|
|
|
$
|
285,330
|
|
|
$
|
244,251
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
|
Power discrete
|
$
|
70,794
|
|
|
$
|
63,464
|
|
|
$
|
212,044
|
|
|
$
|
182,769
|
|
|
Power IC
|
19,309
|
|
|
16,251
|
|
|
64,166
|
|
|
50,164
|
|
||||
|
Packaging and testing services
|
3,178
|
|
|
3,272
|
|
|
9,120
|
|
|
11,318
|
|
||||
|
|
$
|
93,281
|
|
|
$
|
82,987
|
|
|
$
|
285,330
|
|
|
$
|
244,251
|
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
|
|
(in thousands)
|
||||||
|
China
|
$
|
68,528
|
|
|
$
|
64,272
|
|
|
United States
|
56,875
|
|
|
51,214
|
|
||
|
Other Countries
|
669
|
|
|
598
|
|
||
|
|
$
|
126,072
|
|
|
$
|
116,084
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
|
|
(in thousands)
|
|
(% of revenue)
|
|
(in thousands)
|
|
(% of revenue)
|
||||||||||||||||||||
|
Cost of goods sold
|
$
|
222
|
|
|
$
|
187
|
|
|
0.2
|
%
|
|
0.2
|
%
|
|
$
|
622
|
|
|
$
|
475
|
|
|
0.2
|
%
|
|
0.2
|
%
|
|
Research and development
|
395
|
|
|
309
|
|
|
0.4
|
%
|
|
0.4
|
%
|
|
1,138
|
|
|
766
|
|
|
0.4
|
%
|
|
0.3
|
%
|
||||
|
Selling, general and administrative
|
1,098
|
|
|
677
|
|
|
1.2
|
%
|
|
0.8
|
%
|
|
2,825
|
|
|
1,806
|
|
|
1.0
|
%
|
|
0.7
|
%
|
||||
|
Total
|
$
|
1,715
|
|
|
$
|
1,173
|
|
|
1.8
|
%
|
|
1.4
|
%
|
|
$
|
4,585
|
|
|
$
|
3,047
|
|
|
1.6
|
%
|
|
1.2
|
%
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||||||||||
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
||||||||||||||||||
|
Power discrete
|
$
|
70,794
|
|
|
$
|
63,464
|
|
|
$
|
7,330
|
|
|
11.5
|
%
|
|
$
|
212,044
|
|
|
$
|
182,769
|
|
|
$
|
29,275
|
|
|
16.0
|
%
|
|
Power IC
|
19,309
|
|
|
16,251
|
|
|
3,058
|
|
|
18.8
|
%
|
|
64,166
|
|
|
50,164
|
|
|
14,002
|
|
|
27.9
|
%
|
||||||
|
Packaging and testing services
|
3,178
|
|
|
3,272
|
|
|
(94
|
)
|
|
(2.9
|
)%
|
|
9,120
|
|
|
11,318
|
|
|
(2,198
|
)
|
|
(19.4
|
)%
|
||||||
|
|
$
|
93,281
|
|
|
$
|
82,987
|
|
|
$
|
10,294
|
|
|
12.4
|
%
|
|
$
|
285,330
|
|
|
$
|
244,251
|
|
|
$
|
41,079
|
|
|
16.8
|
%
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||||||||||
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
||||||||||||||||||
|
Cost of goods sold
|
$
|
70,584
|
|
|
$
|
66,668
|
|
|
$
|
3,916
|
|
|
5.9
|
%
|
|
$
|
218,595
|
|
|
$
|
197,899
|
|
|
$
|
20,696
|
|
|
10.5
|
%
|
|
Percentage of revenue
|
75.7
|
%
|
|
80.3
|
%
|
|
|
|
|
|
|
76.6
|
%
|
|
81.0
|
%
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Gross profit
|
$
|
22,697
|
|
|
$
|
16,319
|
|
|
$
|
6,378
|
|
|
39.1
|
%
|
|
$
|
66,735
|
|
|
$
|
46,352
|
|
|
$
|
20,383
|
|
|
44.0
|
%
|
|
Percentage of revenue
|
24.3
|
%
|
|
19.7
|
%
|
|
|
|
|
|
|
23.4
|
%
|
|
19.0
|
%
|
|
|
|
|
|||||||||
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||||||||||
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
||||||||||||||||||
|
Research and development
|
$
|
7,625
|
|
|
$
|
6,924
|
|
|
$
|
701
|
|
|
10.1
|
%
|
|
$
|
21,928
|
|
|
$
|
19,029
|
|
|
$
|
2,899
|
|
|
15.2
|
%
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||||||||||
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
||||||||||||||||||
|
Selling, general and administrative
|
$
|
12,067
|
|
|
$
|
9,566
|
|
|
$
|
2,501
|
|
|
26.1
|
%
|
|
$
|
35,224
|
|
|
$
|
27,935
|
|
|
$
|
7,289
|
|
|
26.1
|
%
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||||||||||
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
||||||||||||||||||
|
Impairment of long-lived assets
|
$
|
—
|
|
|
$
|
432
|
|
|
$
|
(432
|
)
|
|
(100.0
|
)%
|
|
$
|
—
|
|
|
$
|
432
|
|
|
$
|
(432
|
)
|
|
(100.0
|
)%
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||||||||||
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
||||||||||||||||||
|
Interest income and other income (loss), net
|
$
|
(74
|
)
|
|
$
|
132
|
|
|
$
|
(206
|
)
|
|
(156.1
|
)%
|
|
$
|
(193
|
)
|
|
$
|
(335
|
)
|
|
$
|
142
|
|
|
(42.4
|
)%
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||||||||||
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
|
(in thousands)
|
|
(in thousands)
|
|
(in percentage)
|
||||||||||||||||||
|
Income tax expense
|
$
|
523
|
|
|
$
|
1,219
|
|
|
$
|
(696
|
)
|
|
(57.1
|
)%
|
|
$
|
2,845
|
|
|
$
|
3,448
|
|
|
$
|
(603
|
)
|
|
(17.5
|
)%
|
|
|
Nine Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
|
Net cash provided by operating activities
|
$
|
29,100
|
|
|
$
|
26,361
|
|
|
Net cash used in investing activities
|
(40,148
|
)
|
|
(13,755
|
)
|
||
|
Net cash provided by (used in) financing activities
|
39,421
|
|
|
(39,684
|
)
|
||
|
Effect of exchange rate changes on cash and cash equivalents
|
3
|
|
|
(84
|
)
|
||
|
|
|
|
|
||||
|
Net increase (decrease) in cash and cash equivalents
|
$
|
28,376
|
|
|
$
|
(27,162
|
)
|
|
|
|
|
|
||||
|
•
|
Inability to gain or sustain sufficient new customers and market shares to offset the additional costs of building and operating a new facility;
|
|
•
|
Lack of sufficient control over the operation and finances of the joint venture;
|
|
•
|
Insufficient personnel with requisite expertise and experiences to operate a 12-in fabrication facility;
|
|
•
|
Inability to fully integrate the joint venture with our existing fabrication facility in Oregon, and inability to fully utilize both fabrication facilities;
|
|
•
|
Failure of Chongqing Funds to meet its obligations under the JV Agreement;
|
|
•
|
Difficulties in protecting and enforcing our intellectual property rights;
|
|
•
|
Difficulties in maintaining international communications and coordination between our locations in the U.S. and China;
|
|
•
|
Inability to take advantage of the expected tax savings;
|
|
•
|
Changes or uncertainties in economic, legal, regulatory, social and political conditions in China, and lack of transparency and certainty in the Chinese regulatory process;
|
|
•
|
Labor disputes and difficulties in recruiting new employees; and
|
|
•
|
Additional costs and complexity with compliance of local and state regulations of Chongqing.
|
|
10.1 +
|
Alpha and Omega Semiconductor Limited 2017 Executive Incentive Cash Bonus Plan
|
|
10.2 †
|
Engineering, Procurement and Construction Contract effective as of January 10, 2017 between Chongqing Alpha and Omega Semiconductor Limited and IT Electronics Eleventh Design & Research Institute Scientific and Technological Engineering Corporation Limited (English Translation) (EPC Contract)
|
|
10.3 †
|
Amendment No. 1 to EPC Contract effective as of January 10, 2017 (English Translation)
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation
|
|
101.DEF
|
XBRL Taxonomy Extension Definition
|
|
101.LAB
|
XBRL Taxonomy Extension Labels
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation
|
|
|
|
|
†
|
Confidential treatment has been requested for certain information contained in this document. Such information has been omitted and filed separately with the Securities and Exchange Commission.
|
|
+
|
Indicates management contract or compensatory plan or arrangement.
|
|
ALPHA AND OMEGA SEMICONDUCTOR LIMITED
|
|
|
|
|
|
By:
|
/s/ YIFAN LIANG
|
|
|
Yifan Liang
|
|
|
Chief Financial Officer and Corporate Secretary
|
|
|
(Principal Financial Officer)
|
|
Name
|
Title
|
Minimum Bonus
|
Target Bonus
|
Maximum Bonus
|
|
Mike F. Chang
|
Chief Executive Officer
|
20%
|
100%
|
220%
|
|
Yifan Liang
|
Chief Financial Officer and Corporate Secretary
|
12%
|
60%
|
132%
|
|
Yueh-Se Ho
|
Chief Operating Officer
|
12%
|
60%
|
132%
|
|
Daniel Chang
|
Senior Vice President of Marketing
|
12%
|
60%
|
132%
|
|
◦
|
Reviewing the Employer’s project requirements and basic documents (including but not limited to production technique, technical process, technical data and parameters, and technique conditions, completion of construction plan and design plan, including the overall layout, functional division, architectural modeling and main structure
|
|
◦
|
Coordinating the relationships between the parties (including but not limited to the relationship with competent governmental authorities, the relationship with surrounding residents or entities, the relationships with each subcontractors, the relationships with materials suppliers, and the relationships with migrant laborer dispute and other crowd events etc.);
|
|
◦
|
Supervising each participant of the Project, coordinating their relationships, and properly resolving any disputes, if any;
|
|
◦
|
responsible for the conceptual design, initial design, construction drawing design and optimization, and submitting written drafts to the Employer for examination and confirmation;
|
|
◦
|
Construction;
|
|
◦
|
Procurement service etc.
|
|
1.
|
Completion date for a single project:
|
|
(1)
|
The completion date of packaging and testing plant (“AT”):
the dust-free room of the packaging and testing plant (“AT”) will be verified before [***], and the installation conditions for the process equipment of the Employer shall be met (“Move in”);
|
|
(2)
|
The completion date of FAB: the dust-free room of the FAB will be verified before
[***], and the installation conditions for the process equipment of the Employer shall be met (“Move in”).
|
|
2.
|
Completion date of whole project:
the time when the Employer signs off the completion acceptance certificate.
|
|
1.
|
General Provisions
|
|
1.1
|
Definitions and Interpretations
|
|
1.1.1
|
“Contract” means the entire agreement composed of the documents set forth in Subparagraph 1.2.1.
|
|
1.1.2
|
“General Terms” mean the general provisions to be complied with by the parties during performance of the EPC Contract, which are composed of Articles 1 to 20 hereof.
|
|
1.1.3
|
“Special Terms” mean the provisions which are to detail, complete, supplement, amend or otherwise provide for the General Terms based on the specific situations of the EPC Project, and are agreed by the parties to jointly comply with.
|
|
1.1.4
|
“EPC” means that the Contractor, upon entrustment of the Employer, contracts the full stages or several stages of the Project, including the design, procurement, construction (including the completion test), and commissioning etc. according to the contract.
|
|
1.1.5
|
“Employer” means the party to the Agreement who is qualified as an employer of the Project and able to pay the Project price, or its qualified legal successors.
|
|
1.1.6
|
“Contractor” means the party to the Agreement who is accepted by the Employer and is qualified as a contractor for EPC project, or its legal successors.
|
|
1.1.7
|
“Consortium” means a temporary association accepted by the Employer to act as the contractor of the Project, which is composed of two or more corporations or other organizations. The parties composing the consortium shall be liable to the Employer jointly and severally. The consortium shall designate any of its composing parties to act as the leader.
|
|
1.1.8
|
“Subcontractor” means a corporation or other organization which is qualified to accept any part of work or service subcontracted by the Contractor according to this contract.
|
|
1.1.9
|
“Employer’s Representative” means the representative designated by the Employer to perform this contract.
|
|
1.1.10
|
“Supervisor” means the qualified engineering supervisory entity engaged by the employer.
|
|
1.1.11
|
“Engineering Director” means the general engineer who is authorized by the Supervisor to perform the supervision contract.
|
|
1.1.12
|
“Project Manager” means the representative appointed by the Contractor according to this contract to perform this contract.
|
|
1.1.13
|
“Work” means permanent work and/or temporary work.
|
|
1.1.14
|
“Permanent Work” means the work designed, constructed, tested for completion, tested after completion, and commissioned and examined by the Contractor, and delivered to the Employer for production, operation or use, according to this contract.
|
|
1.1.15
|
“Single Work” means the project unit specified in the Special Terms which has a single independent function, and is a part of the permanent work.
|
|
1.1.16
|
“Temporary Work” means any temporary building or work established on the site for implementing or completing the permanent work or rectifying any quality defects, and other temporary facilities that do not constitute permanent work.
|
|
1.1.17
|
“Site” means any place provided by the Employer according to this contract for the Contractor’s onsite office, or for storage of project materials, and equipment and facilities, and for implementing project work.
|
|
1.1.18
|
“Basic Project Information” means the documents, reports (including report on selecting plants, resources report, and exploration report etc.), data (e.g., meteorological and hydrogeological data), agreements (for raw materials, fuels, water, power, gas, transportation etc.) and relevant data provided by the Employer to the Contractor for project approval or verification by relevant authorities, as well as other basic information required for design.
|
|
1.1.19
|
“Onsite Obstacles Information” means the coordinate, data and other related information of the existing ground and underground buildings, structures, cables, pipelines, protected heritage buildings and trees etc. which are to be provided by the Employer to the Contractor and are necessary for engineering design and onsite construction.
|
|
1.1.20
|
“Design Stage” means the stage composed of conceptual design, overall design, initial design, technical design and construction drawing design, as applicable.
|
|
1.1.21
|
“Project Materials” mean the equipment, materials and parts which will form part of the permanent work as specified in the design documents, as well as the materials required for completion test and post-completion test.
|
|
1.1.22
|
“Construction” means the process that the Contractor converts the design documents into the permanent work, including civil engineering, installation, and completion test etc.
|
|
1.1.23
|
“Completion Test” means the performance test of machinery, equipment, parts, cable, and pipelines to be carried out by the Contractor before the Employer accepts the Project and/or any single work.
|
|
1.1.24
|
“Modification” means any change to the Project notified or approved by the Employer in writing, without changing the project function and scale.
|
|
1.1.25
|
“Completion” means the civil engineering and installation of the Project have been completed according to this contract and the design requirements, and the completion test has been passed.
|
|
1.1.26
|
“Project Acceptance” means the process during which the Contractor and the Employer hand over the Project to allow the Employer’s operators and users to enter their positions to carry out post-completion test and prepare for commission after the Project and/or single work pass the completion test, and the Employer issues the acceptance certificate.
|
|
1.1.27
|
“Post-Completion Test” means the test of production and/or use of the Project carried out by the Employer, or by the Contractor under the organization and leading of the Employer, according to this contract, after the Employers accepts the Project.
|
|
1.1.28
|
“Commissioning Assessment” means all tests, including the contract target assessment, carried out by the Employer, or by the Contractor under the organization and leading of the Employer, according to this contract, after the completion test is finished.
|
|
1.1.29
|
“Assessment Acceptance Certificate” means the certificate issued by the Employer when all tests of the commission assessment are passed.
|
|
1.1.30
|
“Completion Inspection” means the settlement and inspection organized by the Employer after the Contract receives the assessment acceptance certificate, completes the wind-up work and rectification of defects, and submits the completion inspection report, completion documents, and completion settlement documents according to this contract.
|
|
1.1.31
|
“Contract Term” means the period starting from the effective date hereof and ending when the obligations of both parties hereunder are performed and discharged.
|
|
1.1.32
|
“Reference Date” means 30 days before the deadline for submitting bidding documents.
|
|
1.1.33
|
“Project Progress Plan” refers to the schedules for all the engineering implementation stages (including design, procurement, construction, completion test, engineering acceptance, post-completion test and commissioning assessment etc.) or schedules for several implementation stages under the Contract upon the effective date.
|
|
1.1.34
|
“Construction Starting Date” refers to the absolute date or relative date when the Contractor begins construction activities on site under this contract.
|
|
1.1.35
|
“Completion Date” refers to the absolute date or relative date when the Contractor completes the engineering construction (including the completion test), including any extensions hereunder.
|
|
1.1.36
|
“Absolute Date” means a specific time expressed by calendar year, month or day.
|
|
1.1.37
|
“Relative Date” means a specific time expressed by calendar days.
|
|
1.1.38
|
“Critical Path” means the scheduled timeline during the Project schedule which directly affects the completion date, and which will be determined by both parties upon discussion of the Project schedule.
|
|
1.1.39
|
“Day”, “Month” and “Year” mean the calendar day, month and year. Any starting day of any period in this contract means the day following the date when the corresponding event occurs. If any time starts when a period expires, the starting date will be the day
|
|
1.1.40
|
“Working Day” means any calendar day other than the statutory holidays of China.
|
|
1.1.41
|
“Contract Price” means the cost for design, procurement, construction, completion test, post-completion test, commissioning assessment and services provided by the Contractor hereunder.
|
|
1.1.42
|
“Adjustment to Contract Price” means adjustment of the Contract Price accordingly by increasing or decreasing the cost under the law or this contract.
|
|
1.1.43
|
“Total Contract Price” means the contract settlement price after adjustment under this contract.
|
|
1.1.44
|
“Prepayment” means the money paid by the Employer to the Contractor in advance under the Contract.
|
|
1.1.45
|
“Progress Payment” means the money paid for design, procurement, construction, and completion test in installments as well as service charges paid for the post-completion test and commissioning assessment, and the EPC management fee paid by the Employer to the Contractor as per the payment terms hereunder.
|
|
1.1.46
|
“Quality Warranty Liability Certificate” means the agreement regarding relevant issues of quality warranty signed by the Employer and the Contractor according to relevant quality warranty laws and regulations.
|
|
1.1.47
|
“Defect Liability Warranty Money” means the money retained by the Employer from the Progress Payment according to the Contract, as the warranty money for any performance defect during the construction and defect warranty liability period.
|
|
1.1.48
|
“Defect Liability Period” means the period during which the Contractor assumes the defect warranty liability, which is generally 12 months, and will not exceed 24 months due to extension of defect liability. The specific period will be specified in the Special Terms.
|
|
1.1.49
|
“Writing” means the contents expressed in a visible form such as the Contract, correspondence, and data messages (including telex, fax, electronic data exchange, and electronic mail).
|
|
1.1.50
|
“Defaulting Liability” means the liability to be taken by either party who fails to fulfill the contractual obligations, or whose performance of the contractual obligations does not conform to the terms hereunder.
|
|
1.1.51
|
“Force Majeure” means objective circumstances unforeseen, unavoidable, and insuperable, as is specifically provided for in the Special Terms by both parties.
|
|
1.1.52
|
Other definitions shall be added to the Contract according to the engineering characteristics and set forth in the Special Terms.
|
|
1.2
|
Contract Documents
|
|
1.2.1
|
The composition of the contract documents. The contract document shall be taken as mutually explanatory and interpretable of one another, unless otherwise specified in Special Terms, the composition of the Contract documents and interpretation priority shall be as follows:
|
|
(1)
|
Agreement
|
|
(2)
|
Special Terms
|
|
(3)
|
Bidding award notice
|
|
(4)
|
Tendering documents and its attachment
|
|
(5)
|
General Terms
|
|
(6)
|
Contract annexes
|
|
(7)
|
Standards, codes and related technical documents
|
|
(8)
|
Design documents, data and drawings
|
|
(9)
|
Other documents agreed by both parties to form part of the Contract.
|
|
1.2.2
|
When the contents of the Contract documents are ambiguous and vague, or inconsistent, and cannot be explained clearly as per the interpretation priority hereunder, both parties shall settle the disputes through negotiation on the premises that the project schedule is not affected. In the event that both pparties fail to resolve through negotiation, the dispute shall be settled according to the provisions of Article 16.3 relating to dispute and resolution.
|
|
1.2.3
|
The headings in the Contract are for convenience of reading only, and shall not serve as the basis for interpreting any Contract provisions.
|
|
1.3
|
Language
|
|
1.4
|
Applicable Law
|
|
1.5
|
Standards and Codes
|
|
1.5.1
|
Names (or numbers) of the national standards and codes, and/or industry standards and codes, and/or local standards and codes, and/or the enterprise standards and codes applicable to the Project shall be specified in the Specific Terms.
|
|
1.5.2
|
If the Employer uses any foreign standards or codes, it shall provide the original version and the Chinese version, and specify in the Special Terms the name, copies and time of providing such standards and codes.
|
|
1.5.3
|
In the event that there are no corresponding written standards or codes, the Employer shall state the technical requirements during the time set in the Special Terms and then the Contractor shall put forward the implementation plan according to the technical requirements within specific time. After accepted by the Employer, the plan shall be carried out. Where the Contractor needs to carry out R&D test on the implementation plan, or needs to train the implementation persons, the parties shall sign a separate agreement attached to the Contract as an annex at the cost of the Employer, except that the contract price has included such cost.
|
|
1.5.4
|
After the reference date, if the state promulgates new statutory rules and standards and thus causes the increase in the costs of the Contractor, the Employer shall increase the contract price reasonably. If the critical path is thus delayed, the Employer shall extend reasonably.
|
|
1.6
|
Confidentiality
|
|
2.
|
The Employer
|
|
2.1
|
The Employer’s Main Rights and Obligations
|
|
2.1.1
|
Responsible to go through approval, verification or record formalities of the Project, obtain the land use right of the Project, complete the dismantling and relocation compensation, make the project qualified for the commencement conditions provided for by laws and the Contract, and provide the Project approval documents.
|
|
2.1.2
|
Perform the obligations agreed in the Contract with respect to contract price adjustment, payment and completion settlement.
|
|
2.1.3
|
Present advice, amendment and modification to the design, purchase, construction, completion test and other implementing work carried out by the Contractor, according to the Contract and the compulsory standards and codes of applicable laws relating to safety, quality, environmental protection and occupational health etc.
|
|
2.1.4
|
Claim damages for any loss and injury incurred by the Employer due to the Contractor’s reason, according to the provisions of the Contract.
|
|
2.1.5
|
The Employer is entitled to issue a written notice of suspension when it deems necessary. If the suspension is caused by the Employer, the Employer shall be liable for any increase in the costs of the Contractor; if the critical path is delayed, the completion date shall be postponed accordingly.
|
|
2.2
|
The Employer’s Representative
|
|
2.3
|
Supervisor
|
|
2.3.1
|
Where the Employer supervises the project construction, the name of the supervisor, the project director, the supervisory scope, content, and authority will be set forth in the Special Terms.
|
|
2.3.2
|
Where the function of the project director overlaps with that of the Employer’s representative or is unclear, the Employer will coordinate and clarify, and will notify the Contractor in writing.
|
|
2.3.3
|
Except as expressly stipulated in the Special Terms, the project director has no right to change any rights and obligations of the parties hereunder.
|
|
2.3.4
|
Where the Employer changes the project director, it must give the Contractor 5-day written notice in advance, and notify the Contractor of the successor’s name, title, power, authority and appointment time.
|
|
2.4
|
Safety Assurance
|
|
2.4.1
|
Except as stipulated in the Special Terms, the Employer will be responsible to coordinate and handle the safety and protection work of any underground or above-ground facilities around the construction site and any adjacent building, structure, ancient or precious trees, cultural relics and tombs, maintain the normal order around the project site and bear relevant cost.
|
|
2.4.2
|
Except as stipulated in the Special Terms, the Employer shall be responsible to set up separation facilities for the building, structure, production device, equipment and facilities in use, operation or production by the Employer around the construction site, establish an obvious sign prohibiting entry and fire, and notify in writing the Contractor to comply with the safety rules and location scope. Any loss or damage incurred by the Contractor due to any reason of the Employer shall be borne by the Employer.
|
|
2.4.3
|
Where the Contract fails to provide for, after the completion of the main structure of the project of the main device of the project, if the Employer requests to change the building main structure and the bearing structure, or carry out any decoration work that
|
|
2.4.4
|
The Employer will be responsible to conduct safety education on its representative, employee, supervisor and other persons it entrusted, and will comply with the safety rules of the contractor on the project site. The Contractor shall present relevant safety rules on the Project site by signs, or send the safety rules to the Employer. If any personal injury or accident occurs due to the above persons failing to comply with the safety rules of the contractor on the project site, the Employer will bear responsibility.
|
|
2.4.5
|
The Employer, its representative, employee, supervisor and entrusted other persons will comply with the provisions of Article 7.8 relating to health, safety and environment protection.
|
|
2.5
|
Security Liability
|
|
2.5.1
|
The party responsible for the security on the site will be provided for by the Special Terms, and will be responsible to contact, communicate and coordinate with relevant local security department of the place of the Project, and bear relevant costs.
|
|
2.5.2
|
The Employer and the Contractor will negotiate and decide jointly the security liability division at the project implementation stage and the area, and formulate respective security system, responsibility system and reporting system as the appendices to the Contract.
|
|
2.5.3
|
As for the area, single work and project occupied by the Employer according to the Contract, the Employer will bear relevant security work and any cost, damage and liabilities arising therefrom.
|
|
3.
|
The Contractor
|
|
3.1
|
The Contractor’s Main Rights and Obligations
|
|
3.1.1
|
The Contractor is obligated to complete design, procurement, construction, completion test and post-completion test according to the standards, rules, engineering functions, size, assessment aim and completion date agreed in the Contract, and shall not violate any compulsory standards and codes of the State.
|
|
3.1.2
|
The Contractor is obligated to repair at its own cost any defects in the design, documents, equipment, materials, parts or construction caused due to the contractor’s reason, or any defects identified during completion test and post-completion test, pursuant to the Contract.
|
|
3.1.3
|
The Contractor is obligated to submit relevant reports and forms according to this Contract and the requirements of the Employer. The type, name, content and reporting period, submission time and copies of such reports and forms will be provided for in the Special Terms.
|
|
3.1.4
|
The Contractor is entitled to send the Employer suspension notices in writing according to the provisions of Article 4.6.4 relating to the requirements for resumption of work, Article 14.9 relating to delay in payment, and Article 17 relating to force majeure. Except for the above, if any suspension by the Contractor causes any increase in the costs of the Contractor, the Contractor shall assume such increase by itself, and will make up any delay in the critical path, if any, thus caused.
|
|
3.1.5
|
If the Contractor suffers any cost or delay in the critical path due to the Employer’s reason, the Contractor is entitled to claim for damages and/or postpone the completion date.
|
|
3.2
|
Project Manager
|
|
3.2.1
|
A project manager should be a person selected and confirmed by both parties. The project manager is authorized to perform this Contract on the behalf of the Contractor. The name, duties and authorities of the project manager are set forth in the Special Terms.
|
|
3.2.2
|
The project manager will organize the implementation of the project according to the agreed project progress plan and the orders issued by the representative of the Employer and/or the project director. In emergency, if no contact can be made to the representative of the Employer and/or the project director, the project manager is entitled to take necessary measures to ensure the safety of person, project and property, provided that he/she must submit a written report to the representative of the Employer and/or the project director within 48 hours thereafter.
|
|
3.2.3
|
Where the Contractor needs to replace the project manager, it must give the Employer 15-day written notice in advance, and obtain the Employer’s consent. The successor must continue to perform the functions and authorities under Article 3.2.1. The Contractor shall not replace the project manager without the Employer’s consent. If the Contractor so replaces, the Contractor will bear liability for breach according to the Special Terms.
|
|
3.2.4
|
The Employer is entitled to replace any project manager it deems incompetent by written notice, stating the reasons for replacement, and the Contractor will submit a written improvement report to the Employer within 15 days after receipt of such notice. Thereafter, if the Employer still insists to replace through written notice upon receipt of the improvement report, the Contractor will replace the project manager within 30 days after receipt of such second replacement notice, and notify in writing the Employer of the name and resume of the new project manager. The new project manager will continue to exercise the duties and authorities under Article 3.2.1.
|
|
3.3
|
Quality Warranty of the Project
|
|
3.4
|
Safety Warranty
|
|
3.4.1
|
Safety of the Project
|
|
3.4.2
|
Safety of Construction
|
|
3.4.3
|
The Contractor shall be liable for any loss or injury caused by its failure to comply with the safety rules and the location scope limitations notified by the Employer according to Article 2.4.2.
|
|
3.4.4
|
The Contractor shall be fully responsible for the safety management of its construction site, and ensure the safety of all persons entering the construction site. The Contractor shall be responsible for any personal injury or safety accidents occurred due to its reasons.
|
|
3.5
|
Warranty of Occupational Health and Environment Protection
|
|
3.5.1
|
Engineering Design
|
|
3.5.2
|
Occupational Health and Environment Protection
|
|
3.6
|
Warranty of Progress
|
|
3.7
|
Onsite Security
|
|
3.8
|
Subcontracting
|
|
3.8.1
|
Provisions on Subcontracting
|
|
3.8.2
|
Qualification of Subcontractors
|
|
3.8.3
|
The Contractor may neither transfer the whole Project, nor subcontract the whole Project in a dismembered way.
|
|
3.8.4
|
The subcontractors of design, construction and engineering materials shall strictly conform to the regulations of the State relating to subcontracting.
|
|
3.8.5
|
Payment to the Subcontractors
|
|
3.8.6
|
The Contractor will be responsible for the subcontractors.
|
|
4.
|
Schedule, Delay and Suspension
|
|
4.1
|
Project Schedule
|
|
4.1.1
|
Project Schedule
|
|
4.1.2
|
Catch up with the Progress Plan at Its Own Cost.
|
|
4.1.3
|
Adjustment to the Project Schedule
|
|
(1)
|
Where the basic project data and site obstacle information provided by the Employer according to Article 5.2.1 are incorrect, inaccurate, incomplete or delayed, payment is not made according to the prepayment amount specified in Article 14.3.1, and according to the payment time specified in Article 14.3.2, and thus causes the design commencement date delayed under Article 4.2.2, or the procurement commencement date delayed under Article 4.4.2, or causes the construction commencement date delayed.
|
|
(2)
|
According to Article 4.2.4 (2), due to the Employer’s reason, the review meeting time for certain design stage is delayed.
|
|
(3)
|
According to Article 4.2.4 (3), the approval time for relevant design review authority is longer than the agreed time.
|
|
(4)
|
Other circumstances for postponing the completion date according to the Contract.
|
|
4.1.4
|
Escalation Requirement of the Employer
|
|
4.2
|
Design Schedule
|
|
4.2.1
|
Design Schedule
|
|
4.2.2
|
Design Commencement Date
|
|
4.2.3
|
Delay of Design Commencement Date
|
|
4.2.4
|
Delay of Review Date at Design Stage
|
|
(1)
|
Where due to the Contractor’s reason relevant design documents fail to be submitted according to the design review stage and the meeting time of the review meeting under the Contract, or the submitted design documents do not meet the design depth requirements of relevant review stage, and thus cause the design review meeting delayed, the Contractor will catch up with the progress at its own cost according to Article 4.1.2. Where the critical path is delayed, and economic loss is caused to the Employer (costs for preparation of review meeting), the Contractor will bear responsibilities.
|
|
(2)
|
If due to the Employer’s reasons the arrangement of review meeting at design stage under the Contract is not followed, and thus causes review meeting for certain design stage delayed, the completion date will be postponed accordingly, and any loss of idleness of labor force will be borne by the Employer.
|
|
(3)
|
If relevant approval time required by the governmental design review department is longer than the agreed time, the completion date will be postponed. The parties will bear respective cost thus caused.
|
|
4.3
|
Procurement Schedule
|
|
4.3.1
|
Procurement Schedule
|
|
4.3.2
|
Procurement Commencement Date
|
|
4.3.3
|
Delay of Procurement Schedule
|
|
4.4
|
Construction Schedule
|
|
4.4.1
|
Construction Schedule
|
|
4.4.2
|
Delay of Construction Commencement Date
|
|
(1)
|
If the Contractor fails to commence construction due to the Employer’s reason, the completion date will be postponed accordingly. If any economic loss is thus caused to the Contractor, the Employer shall pay corresponding amount.
|
|
(2)
|
If the Contractor fails to commence construction due to its own reason, it must explain reasons, and take measures to commence construction as soon as possible at its own cost, and the completion date will not be postponed.
|
|
(3)
|
If the commencement date of construction is delayed due to force majeure, the completion date will be postponed accordingly.
|
|
4.4.3
|
Completion Date
|
|
(1)
|
Where the implementation stage of the contracted project includes the completion test, the planned completion date and actual completion date will be determined as follows:
|
|
1)
|
the single work completion date agreed in Clause 9.1 (Take-Over of the Project) of the Special Terms is the planned completion date of such single work; the planned completion date of the last single work is the planned completion date of the Project;
|
|
2)
|
the passing date of the last completion test of the single work is the actual completion date of such single work;
|
|
3)
|
The passing date of the completion test of the last single work is the actual completion date of the Project.
|
|
(2)
|
Where the implementation stage of the contracted project does not include the completion test, the planned completion date and actual completion date will be determined as follows:
|
|
1)
|
the single work completion date agreed in Clause 9.1 (Take-Over of the Project) of the Special Terms is the planned completion date of such single work; the planned completion date of the last single work is the planned completion date of the Project;
|
|
2)
|
When the Contractor finishes all the construction work of a single work specified in the construction drawings according to the Contract, and complies with the agreed quality standards, such date will be the actual completion date of the single work;
|
|
3)
|
When the Contractor finishes all the construction work of the last single work specified in the construction drawings according to the Contract, and complies with the agreed quality standards under the Contract, such date will be the actual completion date of the Project.
|
|
(3)
|
The construction part reserved by the Contractor for completion test or post-completion test, or the construction reserved part requested by the Employer, and the outstanding little work and defect repair that will not materially affect the operation and use by the Employer, will not affect the determination of the completion date.
|
|
4.5
|
Compensation for Delay
|
|
4.6
|
Suspension
|
|
4.6.1
|
Suspension due to the Employer
|
|
4.6.2
|
Suspension due to Force Majeure
|
|
4.6.3
|
The Contractor’s Work during Suspension
|
|
4.6.4
|
The Contractor’s Requirement to Resume Work
|
|
4.6.5
|
The Employer’s Resumption of Work
|
|
4.6.6
|
Suspension due to the Contractor
|
|
4.6.7
|
Payment during Work Suspension
|
|
5.
|
Technology and Design
|
|
5.1
|
Production Technology and Architectural Design Schemes
|
|
5.1.1
|
Production Technology and (or) Architectural Design Schemes Provided by the Contractor.
|
|
5.1.2
|
Technologies and/or Architectural Design Schemes Provided by the Employer
|
|
5.2
|
Design
|
|
5.2.1
|
Obligations of the Employer
|
|
(1)
|
To provide fundamental materials of the project. The Employer shall provide fundamental materials of the project for the Contractor according to the Contract, laws or industrial regulations, and shall be responsible for their authenticity, correctness, completion and punctuality. If there is any unauthentic, incorrect or
|
|
(2)
|
To provide the materials of obstacles at site. Except as otherwise provided in the Special Terms, the Employer shall provide before design the materials of on-site obstacles regarding constructions and structures on the ground and underground related to design and construction, and shall be responsible for their authenticity, correctness, completion and punctuality. Where any suspension, re-working or revision of the design of the Contractor occurs due to unauthentic, incorrect, incomplete or unpunctual materials, the Employer shall compensate the Contractor’s loss on the basis of the increased extra work in design. If the critical path of the project is delayed, the completion date of the project shall be postponed. The category, contents, number of copies and time of the materials of the obstacles provided shall be agreed in the Special Terms.
|
|
(3)
|
If the Contractor is incapable of verifying the data, conditions and materials in the fundamental materials of the project provided by the Employer, the Employer shall be obligated to make further confirmation.
|
|
5.2.2
|
Obligations of the Contractor
|
|
(1)
|
The Contractor and the Employer (and its patent merchants as well as third-party design units) shall hand over and take over fundamental materials regarding design of the project which are provided by the Employer according to Item 1 of Article 5.2.1 and materials of on-site obstacles regarding design provided according to Item 2 of Article 5.2.1 in writing. If there is any shortage, omission, error and doubt in the materials, the Contractor shall raise further requirements to the Contractor within 15 days after receipt of the above materials provided by the Contractor. Any loss caused due to the Contractor’s failure to raise further requirements within the above time limit shall be borne by the Contractor; where any critical path of the project delays thereupon, the completion date of the project will not be postponed. The Contractor is obliged to agree on the time of actual measurement and re-inspection and correct relevant errors (if any) for the reference coordinate data (including the reference control point, reference control level and reference coordinate control line) of the project site. The Contractor shall bear any increase in costs and delay in the critical route due to any delay of such work.
|
|
(2)
|
The Contractor is obliged to carry out engineering design according to the fundamental materials and on-site obstacle materials provided by the Employer as well as the design depth prescribed by national authorities and industrial construction standards and norms, and shall be responsible for the technologies and/or architectural features of the design as well as standards of safety, environment protection and occupational health of the project, quality of equipment and materials, quality of the project and time of completion. The increase of expense and delay of completion date due to the design of the Contractor shall be borne by the Contractor.
|
|
5.2.3
|
Observation of Standards and Rules
|
|
(1)
|
The standards and regulations agreed in Article 1.5 apply to acceptance of single works and/or the project by the Employer.
|
|
(2)
|
If new standard or regulation is issued by the state during application of the Contract, the Contractor shall submit proposals about new standards or regulations to the Employer and shall strictly conform to the mandatory standards or regulations therein. The Employer shall be responsible for relevant modification; the Employer is entitled to decide to adopt or not to adopt non-mandatory standards or regulations. Where it determines to adopt any non-mandatory standards or regulations, is shall make relevant modification.
|
|
(3)
|
Technical data and specifications in the drawings and documents of design completed according to applicable laws as well as standards and regulations agreed in the Contract shall be the basis for quality of the purchased materials, construction, and completion tests.
|
|
5.2.4
|
Operation Maintenance Manual
|
|
5.2.5
|
Number of Copies and Time of Submission of Design Documents
|
|
5.2.6
|
Self-Funded Repair of Defects and Self-Funded Catch-Up with Schedule
|
|
5.3
|
Examination in Design Stage
|
|
5.3.1
|
Design stage, organization and time arrangement of examination meetings in the design stage of the project shall be agreed in the Special Terms. The Employer is responsible for organizing examination meetings in the design stage and bear expenses for the examination meetings and for the higher-level units and relevant government departments to attend the examination meetings.
|
|
5.3.2
|
The Contractor shall submit design documents of relevant design examination stages to the Employer according to Article 5.3.1. Such design documents shall conform to the regulations of relevant national authorities and industrial construction standards and norms on depth of design documents, drawings and materials of relevant design stages. The Contractor is obliged to attend on its own expense the design examination meetings organized by the Employer, and introduce, give answers and explain to the
|
|
5.3.3
|
The Employer is obliged to provide the approval documents and summary of the design examination meeting to the Contractor. The Contractor is obliged to make revision, complement and completion of the relevant design according to the approval documents and summary in relevant design examination stage on the basis of the agreement in the Contract and relevant design regulations.
|
|
5.3.4
|
If the complete design documents, drawings and materials of the relevant design examination stage cannot be provided to the Employer at the time agreed in Article 5.2.5 due to the Contractor’s reason, causing the failure or the meeting in relevant design examination stage to be held or to be held on time, the Contractor shall bear the losses due to delay of the completion date and idleness of labor force and the increased expenses due to organization of meetings by the Employer.
|
|
5.3.5
|
The Employer is entitled to suggest, pre-exam and confirm the design documents, drawings and materials of relevant design stages before the design examination stages agreed in Article 5.3.1. Any suggestion, pre-examination or confirmation will not relieve or exempt any contracted responsibility or obligation of the Contractor.
|
|
5.4
|
Training of Operation and Maintenance Personnel
|
|
5.5
|
Intellectual Property
|
|
6.
|
Project Materials
|
|
6.1
|
Provision of Project Materials
|
|
6.1.1
|
Project Materials Provided by the Employer
|
|
(1)
|
The Employer shall be responsible for organizing the procurement of project materials (including their spare parts, special tools and technical paper provided by the manufacturer) according to the technical parameters, specifications, performance requirements, application requirements and quantity specified in the
|
|
(2)
|
Where the project materials (including building components) procured and provided by the Employer fail to conform to the provisions of national mandatory standards and norms, have any quality defect or any delay of delivery, causing idleness of the labor force, project suspension or delay in critical path, the agreement on revision and adjustment of the contracted prices in Article 13 shall be implemented.
|
|
(3)
|
Where the Employer invites the Contractor to participate in overseas procurement, the costs arising therefrom shall be borne by the Employer.
|
|
6.1.2
|
Project Materials Provided by the Contractor
|
|
(1)
|
The Contractor shall be responsible for organizing the procurement of project materials (including their spare parts, special tools and technical paper provided by the manufacturer) according to the technical parameters, specifications, performance requirements, application requirements and quantity specified in the design documents mentioned in Article 5.2.3 (3). The Employer shall also be responsible for delivery of the project materials to the project site and for the consumption, quality inspection results and performance. The categories and quantity of project materials provided by the Contractor shall be listed in the Special Terms.
|
|
(2)
|
Where the project materials (including building components) procured and provided by the Contractor fail to conform to the provisions of national mandatory standards and norms or the standards and norms agreed herein, the Contractor shall repair the quality defects arising therefrom on its own expense. The completion date will not be prolonged.
|
|
(3)
|
The categories and/or lists of the production materials for testing after completion of the project and provided by the Contractor shall be listed in the Special Terms.
|
|
6.1.3
|
Selection of Suppliers by the Contractor
|
|
6.1.4
|
Property rights for project materials
|
|
6.2
|
Inspection
|
|
6.2.1
|
Factory Inspection and Report
|
|
(1)
|
The Contractor shall obey relevant laws and regulations, be responsible for the mandatory examination, inspection, monitoring and test on equipment, materials, parts and spare parts for permanent work provided according to Article 6.1.2 as well as the testing goods and materials after completion of the project, and provide relevant reports to the Employer. The contents, time and number of copies of the reports shall be agreed in the Special Terms.
|
|
(2)
|
When the Contractor invites the Employer to participate in inspection, it shall notice the Employer in writing the contents, place and time of the inspection before the examination, inspection, monitoring and test on relevant processing and manufacture stages. The Employer shall notice the Contractor whether to participate in the inspection within 5 days after receipt of the invitation in writing.
|
|
(3)
|
The Employer shall bear the wages, allowances, travel and commodity of its staff in taking part in the inspection. The Contractor shall be responsible for obtaining the permit to enter relevant manufacturers and providing corresponding convenience.
|
|
(4)
|
If the Employer entrusts a third party with competence and experience to participate in the inspection on its own expense, the Employer shall notice in writing the Contractor within 5 days after receiving the invitation letter from the Contractor, describing the name and authorization of the entrusted unit or person(s).
|
|
(5)
|
The participation of the Employer or its entrusted representative in the inspection shall not relieve the responsibility of the Contractor for the quality of its procured project materials.
|
|
6.2.2
|
Consequence of Coverage and Package
|
|
6.2.3
|
Failure of Participation in the Inspection on Time
|
|
6.2.4
|
On-Site Check and Inspection
|
|
(1)
|
The Employer shall notice the Contractor five days before it delivers the project materials provided by it according to Article 6.1.1 to the site. The Employer (or including the suppliers providing project materials for the Employer) and the
|
|
(2)
|
The Contractor shall notice the Contractor five days before it delivers the project materials provided by it according to Article 6.1.2 to the site. The Contractor (or including the suppliers providing project materials for the Contractor or the subcontractors) and the Employer (including its representatives or supervisors) shall check the number of packages according to the bill of lading of each shipment and conduct appearance inspection, and also check the quantity, ex-factory certificate, drawings, documents and materials inside the package according to the packing list and conduct appearance inspection. The personnel of the parties shall sign the unpacking inspection certificate.
|
|
6.2.5
|
Inspection by Departments regarding Quality Supervision, Fire Control and Environment Protection
|
|
6.3
|
Procurement, Customs Declaration, Customs Clearance and Commodity Inspection of Imported Project Materials
|
|
6.3.1
|
The party responsible for procuring imported project materials and procurement way shall be agreed in the Special Terms. The party responsible for procurement shall be responsible for customs declaration, customs clearance and commodity inspection. The other party is obliged to give assistance.
|
|
6.3.2
|
When the critical path of the project delays due to any delay in customs declaration, customs clearance and commodity inspection of the imported project materials, the completion date of the project shall not be prolonged, if the Contractor is responsible for the import procurement. The increased expense therefrom shall be borne by the Contractor; the completion date of the project shall be postponed if the Employer is responsible for the import procurement. Any increased expense caused therefrom to the Contractor shall be borne by Employer.
|
|
6.4
|
Transport and Transport of Out-Of-Gauge Materials
|
|
6.5
|
Reorder and Consequences
|
|
6.5.1
|
In accordance with Article 6.1.1 and Article 6.3.1, where the project materials provided by the Employer have any defect and are unqualified after the Employer conducts repair, the Employer shall be responsible for reordering the project materials and delivering them to the project site. Where any working suspension or idleness of labor force of
|
|
6.5.2
|
In accordance with Article 6.1.2 and Article 6.3.1, where permanent engineering equipment, materials and components provided by Contractor have any defect and are unqualified after the Contractor conducts repair, the Contractor shall be responsible for reordering such permanent engineering equipment, materials and components and delivering them to the project site. The Contractor shall be responsible for any expense increase or any delay of the completion date of the project caused therefrom.
|
|
6.6
|
Storage and Surplus of Project Materials
|
|
6.6.1
|
Storage of Project Materials
|
|
6.6.2
|
Handover of Surplus Project Materials
|
|
7.
|
Construction
|
|
7.1
|
Obligations of the Employer
|
|
7.1.1
|
Reference Coordinate Data
|
|
7.1.2
|
Examine the Design of Overall Construction Organization
|
|
7.1.3
|
Entry Conditions and Date
|
|
7.1.4
|
Provision of Temporary Water, Power etc. and Laying of Pitch Points
|
|
7.1.5
|
Completion of such Approval Formalities as Starting Construction
|
|
7.1.6
|
Approvals to be Obtained by the Employer during Construction
|
|
7.1.7
|
Provision of Construction Obstacle Data
|
|
7.1.8
|
New Construction Obstacles Found by the Contractor
|
|
7.1.9
|
Confirmation of Management Plan for Occupational Health, Safety and Environmental Protection
|
|
7.1.10
|
Other Obligations
|
|
7.2
|
Obligations of the Contractor
|
|
7.2.1
|
Line Marking
|
|
7.2.2
|
Design of Construction Organization
|
|
7.2.3
|
Submission of Documents for Temporary Land Occupation
|
|
(1)
|
According to the coordinate position, area, occupation time, and purpose explanations of warehouse, storage yard and land for roads required for storage of project materials specified in Article 6.6.1, the Contractor shall separately list the coordinate position, area, occupation time, and purpose explanation of the land required to be rent by the Employer;
|
|
(2)
|
the coordinate position, area, occupation time and explanation of purpose of the construction land, and the coordinate position, area, occupation time and explanation of purpose of the leased land by the Employer separately;
|
|
(3)
|
The entrance coordinate position of the road through which to enter the construction site. Specify the direction, length, road width, grade, bridge load, turn radius and time requirements of the roads required the Contractor to lay and connected with the urban and rural public roads.
|
|
7.2.4
|
Temporary Use of Water and Power etc
|
|
7.2.5
|
Assistance for the Employer to Obtain Such Approvals as Construction Commencement
|
|
7.2.6
|
Approvals Notified to Obtain during Construction
|
|
7.2.7
|
Provision of Construction Obstacle Data
|
|
7.2.8
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Construction Obstacle Newly Found
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7.2.9
|
Construction Resources
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7.2.10
|
Description and Explanation of Design Documents
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7.2.11
|
Protection and Maintenance of the Project
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7.2.12
|
Site Clearing
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7.2.13
|
Other Obligations
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7.3
|
Construction Techniques and Methods
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|
7.4
|
Human Resources and Machine Resources
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|
7.4.1
|
The Contractor shall submit to the Employer the list of human resources for construction according to the format, content, copies and time agreed in the Special Terms. The list of human resources for construction shall meet the needs of the construction progress plan. The Contractor will provide the Employer with the information of the human resources actually entering the site, according to the format, content, copies and time agreed in the Special Terms.
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7.4.2
|
The Contractor shall submit to the Employer the list of main machines for construction according to the format, content, copies and time agreed in the Special Terms. The list of main machines for construction will meet the needs of the construction progress plan. The Contractor will provide the Employer with the information of the main machines actually entering the site, according to the format, content, copies and time agreed in the Special Terms.
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7.5
|
Quality and Inspection
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|
7.5.1
|
Quality and Inspection
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|
(1)
|
The Contractor and its subcontractors will accept at any time the supervision and inspection relating to safety and quality conducted by the Employer and supervisor. The Contractor shall provide convenience for such supervision and inspection.
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(2)
|
Where the Employer entrusts a third party to inspect, check, examine and test the construction quality, it shall notify the Contractor in writing. The inspection result of such third party will be deemed the inspection result of the Employer.
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(3)
|
The Contractor shall comply with relevant rules relating to construction quality management, and is responsible for training and examining its operators and disclosing completely to its operators the drawing, technology, operating rules, safety procedure and quality standards, and eliminating accident potential.
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(4)
|
According to the provisions of the design documents and construction standards and the Contract, the Contractor shall be responsible for preparing programs for construction tests and detection, and conducting inspection, examining, check and test on project materials (including construction components). The Contractor shall not use any substandard equipment, materials, and parts. The Contractor is also obligated to repair and (or) replace the substandard project materials at its own cost, and will be responsible for any delay of the completion date. If the construction materials provided by the Employer are not proved to be unqualified after check, inspection, detection and test by the Contractor, the Employer shall repair and (or) replace it at its own expense. Where the critical path delays therefore, the completion date shall be postponed accordingly. The Employer shall bear the additional costs incurred by the Contractor.
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(5)
|
The construction by the Contractor shall comply with the quality standards agreed by the Contract. The evaluation of construction quality will be subject to the quality test evaluation standards agreed in the contract. As for the construction part that does not comply with the quality standards, the Contractor shall carry out repair, reworking or replacement etc. at its own cost, and will be responsible for any delay of the completion date.
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7.5.2
|
Quality inspection part and inspection participant. The quality inspection part includes the part inspected by the Employer, supervisor and the Contractor; the part inspected by the supervisor and the Contractor; the part inspected by a third party and (or) the Contractor. The part, inspection standards and inspection form relating to the construction quality are set forth in the Special Terms.
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7.5.3
|
Notify the participating units to inspect. When the Contractor inspects, checks, examines and tests by itself and finds it qualified, it will notify relevant participating units to participate in inspection within 24 hours, according to the inspection part and participating units specified in Article 7.5.2 of the Special Terms. If the participants fail to timely participate in the inspection, the Contractor shall send the self-inspected result to the Employer and (or) supervisor for signature within 24 hours after the inspection. The failure of signature after 24 hours shall be deemed that the QC result
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7.5.4
|
Right to inspect quality. The Employer and its authorized supervisor or third party, without affecting the Contractor’s normal operation, is entitled to supervise, inspect, check, examine and test any construction area. The Contractor shall provide convenience for such quality inspections. If the Employer finds any quality defects caused due to the Contractor’s reason upon quality inspection, it is entitled to request the Contractor to repair, suspend, dismantle, rework, reconstruct, or replace. The Contractor will bear any expenses thus added, and will not be granted any extension for the completion date.
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|
7.5.5
|
Re-inspect the quality. According to the provisions of Article 7.5.3, as for any project part qualified for the quality inspection, the Employer is entitled to conduct re-inspection, without affecting the normal construction of the project. If the Employer’s result of inspection, examination, check and test is disqualified, the cost incurred thus will be borne by the Contractor, and the completion date will not be extended in case of key project access delayed. If the result of inspection, examination, check and test is qualified, increased costs of the Contractor shall be borne by the Employer. Where the critical path of the project is delayed, the completion date shall be postponed accordingly.
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|
7.5.6
|
The Employer shall be responsible for any additional construction costs incurred due to any instruction error of the Employer 's representative and (or) supervisor or any other cause irrelevant to the Contractor. Where the critical path of the project delays, the completion date shall correspondingly postponed.
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|
7.6
|
Concealed Work and Intermediate Acceptance
|
|
7.6.1
|
Concealed work and intermediate acceptance. The type, part, inspection content, quality inspection standards, form and participants relating to the concealed work and intermediate inspection to be inspected are agreed in the Special Terms.
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|
7.6.2
|
Acceptance notice and acceptance. As for the concealed work and intermediate acceptance part qualified upon its own inspection, the Contractor shall notify in writing the Employer and (or) supervisor to accept 48 hours before the acceptance of the concealed work or intermediate acceptance. The notice shall include the contents of the concealed and intermediate acceptance and time and place of acceptance. For qualified acceptance, the parties shall sign in the acceptance record and may cover and carry out follow-up work, and prepare and submit information of and concealed works and relevant information required by the Employer or supervisor.
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|
7.6.3
|
Fail to participate in the inspection timely. If the Employer and (or) supervisor fail to participate in the inspection of the concealed work or intermediate inspection of parts, they shall submit an extension request to the Contractor in writing within 24 hours after they receive the inspection notice, and the extension will not exceed 48 hours. If the Employer fails to request extension of inspection according to the above period, and fails to participant in the inspection, the Contractor may inspect by itself, and its inspection record will be deemed accepted by the Employer and supervisor.
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|
7.6.4
|
Re-inspection. The Employer and (or) supervisor may at any time are entitled to request re-inspection on any accepted concealed work. The Contractor shall remove the cover, server or drill as requested, and will cover or repair after the inspection. If the concealed work is disqualified upon inspection, the cost thus incurred will be borne by the Contractor. The completion date will not be extended. Upon the passing of the inspection, the Employer shall bear the additional costs incurred by the Contractor. For any delay in the critical path of the project, the completion date shall be extended accordingly.
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|
7.7
|
Dispute over Construction Quality Result
|
|
7.7.1
|
Any dispute over construction quality result between the parties will be first resolved through negotiation. If the parties fail to reach an agreement upon negotiation, they may entrust a qualified project quality testing organization agreed by them to conduct detection.
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|
7.7.2
|
If both parties are responsible according to the appraisal result of the testing organization, the cost will be shared by the parties upon negotiation according to their
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7.8
|
Occupational Health, Safety, and Environment Protection
|
|
7.8.1
|
Management of Occupational Health, Safety, and Environment Protection
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|
(1)
|
The parties are obliged to conform to relevant laws relating to health, safety and environment protection.
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|
(2)
|
Management implementation plan for occupational health, safety and environment protection. The Contractor shall submit the management implementation plan for occupational health, safety and environment protection to the Employer before commencement of on-site construction or other time agreed. The management and implementing fee for such plan is included in the contract price. The Employer shall submit any advice within 15 days after it receives such plan and confirm such plan. The Contractor shall carry out amendment according to the Employer’s advice at its own cost. The number of copies and submission time of the management implementation plan for occupational health, safety and environment protection are agreed in the Special Terms.
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|
(3)
|
During the process when the Contractor implements the management implementation plan for occupational health, safety and environment protection, if the Employer needs to take any special measure outside of such plan, it will be taken as a change according to the provisions relating to change and contract price adjustment under Article 13.
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|
(4)
|
The Contractor shall ensure all its employees on the site and all its subcontractor’s employees have sufficient training and experience, and are capable of the management of occupational health, safety and environment protection.
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|
(5)
|
The Contractor shall comply with all laws and regulations relating to on-site occupational health, safety and environmental protection with respect to implementation of this project and use of the construction facilities, and complete relevant formalities according to the provisions.
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|
(6)
|
The Contractor shall, for the part starting construction on the site, set up occupational health protection conditions and safety facilities, adopt environmental protection measures etc., and provide conditions for the Employer to obtain construction permit. Where the approval for construction permit is delayed due to the
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|
(7)
|
The Contractor shall equip with professional engineers or managers who are responsible for managing, supervising and directing employees’ occupational health, safety protection and environmental protection. The Contractor shall be responsible for the conducts of its subcontractor.
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|
(8)
|
The Contractor shall accept at any time the supervision and inspection relating to occupational health, safety and environmental protection by inspectors of relevant administrative department, industrial organization, the Employer, supervisor, and will provide convenience therefor.
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|
7.8.2
|
Occupational Health Management on Site
|
|
(1)
|
The Contractor shall comply with applicable laws relating to occupational health and the contract (including provisions relating to employment, occupational health, safety, benefit etc.), and be responsible for the occupational health and protection of is personnel during the construction on the site.
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|
(2)
|
The Contractor shall comply with applicable labor regulations, protect the lawful rights and interest of its employees, including the right to rest, and provide its employees on site with the labor protection articles, protective appliance, heatstroke protection articles, necessary accommodation conditions and safe production facilities.
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|
(3)
|
The Contractor shall provide its construction employees with occupational health knowledge training relating to work, disclose completely to such employees the dangerous factors, safety operation rules, take efficient measures, and provide protective appliance for personal injury according to relevant provisions.
|
|
(4)
|
The Contractor shall set up signs and instructions on poisonous and hazardous area. The Employer shall bear the liabilities and expenses for any damage caused by the reason that the Employer and its entrusted personnel enter the operation area without the permission of the Contractor and without relevant protective equipment.
|
|
(5)
|
The Contractor shall carry out prevention inspection over poisonous and hazardous positions, and correct the disqualified protective facilities, appliance, and set-ups, to eliminate any potential factors endangering occupational health.
|
|
(6)
|
The Contractor shall take healthy and anti-epidemic measures, equip with medical staff and emergency facilities, keep the dietetic hygiene of dining room, keep the healthy environment of its living area and around, and protect the construction person’s health.
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|
7.8.3
|
Safety Management on Site
|
|
(1)
|
The Employer and supervisor shall provide safety education on their personnel on the site, provide necessary personal safety articles, and take responsibility for the accidents caused by their personnel. The Employer and supervisor may not order the Contractor to violate relevant safety regulations relating to safe construction, safe operation and completion test and (or) after-completion test. Where any personal injury and property damage occur due to the reasons of the Contractor, supervisor and on-site personnel, the Employer shall bear relevant liabilities and the costs incurred. When the critical path of the project is delayed, the completion date shall be extended.
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|
(2)
|
The personnel of the parties shall follow the instructions relating to prohibition of passing, including prohibiting entering working site and the special areas of temporary working site. If either party fails to follow such provisions and thus causes any injury, damage or loss, it will bear the responsibility.
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|
(3)
|
The Contractor shall be responsible for the site safety work according to the provisions of the contract, including its subcontractor’s site. The site that has conditions will be closed. According to the project characters, relevant safety technology measures shall be formulated in the construction organization design documents, and special safety construction organization design will be prepared with respect to any project part that has high professionalism, including protect safety, prevent danger and prevent fire etc.
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|
(4)
|
The Contractor (including the Contractor’s subcontractor, supplier and transporter) shall take preventive measures to ensure the roads, bridges and underground facilities etc. on the site and accessing to the site from any damage, except as otherwise agreed in the Special Terms. If the Contractor fails to take any preventive measures and thus cause damage and (or) delay of completion date, it will take responsibility therefor.
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|
(5)
|
The Contractor shall provide its construction personnel with safe operation training, disclose completely to their personnel safe operation rules, take safe protective measures, set up safety alerting signs and instructions, carry out safety inspection, and eliminate accidental potentials.
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|
(6)
|
When the Contractor works at the area and site of power plant, electrical lines, underground pipes, sealed shockproof workshop, high temperature high pressure, explosive or inflammable area and site, and adjacent to street and traffic road, it shall take protective measures for any damage that may cause to the construction site and adjacent building, structure and the special working environment. Before starting construction, the Contractor must submit the protective measures plan to the Employer and (or) supervisor, and will implement such plan upon approval. The recognition of the Employer and (or) supervisor will not mitigate or exempt the Contractor’s liability.
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|
(7)
|
When the Contractor carries out blasting, radioactive, electrifying, poisonous and explosive and inflammable, poisonous and corrosive work (including transportation, storage and keeping), it shall give written notice to the Employer and (or) supervisor 10 days before construction, and submit corresponding safety protective measures plan, and implement such plan after approval. The recognition of the Employer and (or) supervisor will not mitigate or exempt the Contractor’s liability.
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|
(8)
|
Inspection of safety protection. Before starting work, the Contractor shall notify the representative of the Employer and (or) supervisor to inspect the safety protective measures plan submitted by it, and the setup of safety measures around the site, safety channels, safety appliances and fire-protection appliances, and the hidden danger that may be caused to the environment, and will correct at its own cost according to the correction advice raised by the Employer and (or) supervisor. The inspection and advice of the Employer and (or) supervisor will not mitigate or exempt the Contractor’s contractual liability.
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|
7.8.4
|
On-Site Management of Environmental Protection
|
|
(1)
|
During the construction on the site, the Contractor will be responsible to protect the building, structure, historical and cultural relics, ancient trees, precious trees, underground pipes, cables, facilities and underground relics, fossils and tombs. If any damage, loss or compensation is increased and (or) the completion date is delayed due to the Contractor fails to send notice to the Employer and fail to obtain further direction from the Employer, the Contractor will bear corresponding liability.
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|
(2)
|
The Contractor shall take measures, and be responsible to control and (or) dispose of the pollution and damage to environment by dust, waste gas, waste water, solid waste and noise, and will be responsible for any increased damage, compensation and penalty and (or) delayed completion date arising therefrom.
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|
(3)
|
The Contractor will timely or periodically transport the remnant or waste on the construction site to the location designated by the Employer or the local administrative departments, to avoid pollution to the environment around or to the work. The Contractor will be responsible for any penalty imposed by the local administrative departments and compensation increased due to its failure to comply with the foregoing provisions.
|
|
7.8.5
|
Accident Handling
|
|
(1)
|
When the personnel of the Contractor (including its subcontractor) dies or is damaged during operation process on site, the Contractor shall immediately take care measures, and immediately report to the Employer and (or) rescue organization, and the Employer is obligated to provide necessary conditions for such rescue. The Contractor shall protect the site and take measure to prevent the expansion of the accident.
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|
(2)
|
The Contractor shall immediately report the significant injury, significant property and environmental damage and other safety accident to relevant department, and immediately notify the Employer’s representative and supervisor. Meanwhile, the requirements of relevant governmental department will be followed.
|
|
(3)
|
Any dispute over accident liability between the parties shall be resolved in accordance with the dispute and arbitration procedure agreed in Article 16.3.
|
|
(4)
|
If the construction project causes personal injury or property damage during the reasonable use period or equipment warranty period due to the Contractor’s reason, the Contractor will bear liability for damages.
|
|
(5)
|
If any employee suffers food poisoning and occupational healthy accidents due to the Contractor’s reason, the Contractor will take relevant responsibility.
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|
8.
|
Completion Tests
|
|
8.1
|
Obligations of the Completion Tests
|
|
8.1.1
|
The Contractor’s Obligations
|
|
(1)
|
Before the commencement of the completion tests of a single work and (or) the project, the Contractor shall complete the construction (excluding the working position left for the completion tests and after completion and defect remedy and a little ending works which will not affect the completion tests) for the single works and (or) the project and shall also complete the inspection, test, detection and experiment on the construction parts under the Contract.
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|
(2)
|
Before the completion tests, the Contractor shall submit to the Employer the related quality check data and as-built data according to Article 7.6 Covered Works and Intermediate Acceptance Position.
|
|
(3)
|
According to Article 10 Post-Completion Test, if the Contractor shall instruct the Employer to carry out the post-completion tests, the Contractor shall compete the maintenance personnel training stated in Article 5.4, and shall submit the operation and maintenance manual in Article 5.2.4 before the completion tests.
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|
(4)
|
The Contractor shall submit the testing program to the Employer at least 20 days prior to the date when the works is ready for the completion tests. The Employer shall respond to the program with its opinion and suggestion within 10 days. Then the Contractor shall revise at its own cost the program according to the Employer’s reasonable advice and comments. The program confirmed by the Employer shall become an appendix to the contract, and shall be carried out by the Contractor. The Employer's confirmation will not relieve or exempt the Contractor’s contractual obligations. The completion test program shall cover:
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|
1）
|
the basis and principle for preparing the testing program;
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|
2）
|
organization structure and post appointment;
|
|
3）
|
testing procedure and testing conditions for single works completion tests;
|
|
4）
|
testing procedure and testing conditions for one piece, monomer, and linkage tests;
|
|
5）
|
the types and performance standard of equipment, materials, and components for the tests and the format of the tests and acceptance;
|
|
6）
|
quality and consumption requirement for water, electricity, and power and etc.;
|
|
7）
|
safety procedure, safety measures and protection facilities;
|
|
8）
|
progress plan, measures, labor and machinery arrangement for the completion tests
|
|
9）
|
Others.
|
|
(5)
|
The completion tests for the Contractor shall include the completion tests for project materials provided by the Contractor in accordance with Article 6.1.2 and completion tests conducted the Contractor for project materials with the entrustment of the Employer under Article 8.1.2 (3).
|
|
(6)
|
The Contractor shall complete the completion tests in accordance with the testing conditions, testing procedure and the standards, specification and data according to Article 5.2.3 (3).
|
|
8.1.2
|
Employer’s Obligations
|
|
(1)
|
The Employer shall supply electricity, water, and power and consumption materials supplied by the Employer and so on according to the testing program confirmed by the Employer. All those supplied shall satisfy the need of the completion tests for quality, time, and consumption quantity.
|
|
(2)
|
When the consumables and spare parts for completed tests to be provided by the Contractor based on the Contract are exhausted or insufficient, the Employer is obliged to supply the stock consumption materials and spare parts for the completion tests. For damage caused by the Contractor or insufficient consumables and spare parts provided by the Contractor, the Employer may deduct the corresponding costs from the contract price; for those reasonably consumed or damaged by the Employer, the Employer shall supply them free of charge.
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|
(3)
|
The contract price includes the service charge for the completion tests to be done by Contractor for the project materials supplied by Employer under Article 6.1.1. The entrustment of the Employer to the Contractor for completion tests during the performance herein shall be handled as a change in accordance with Article 13 Modification and Contract Price Adjustment.
|
|
(4)
|
The Contractor shall conduct completion tests entrusted by the Employer for project materials in accordance with Item (3) of this Paragraph based on the testing conditions and testing procedure provided by Employer. The testing result shall conform to the standards, specification, and data under Article 5.2.3 (3), and the Employer shall be responsible for the testing result of the part.
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|
8.1.3
|
Leader’s Organization of Completion Tests. The leader’s organization is in charge of leading, organizing, and coordinating the tests. The Contractor shall supply the labor and equipment, and complete the tests. The Employer shall organize, coordinate, and furnish the related conditions of the testing program and check and accept the completion tests.
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|
8.2
|
Acceptance Check of the Completion Tests
|
|
8.2.1
|
The Contractor shall carry out acceptance check in accordance with the standards, specification, and data under Article 5.2.3 (3) and completion test program under subparagraph 5) of Article 8.1.1 (4).
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|
8.2.2
|
The Contractor shall check the conditions supplied by the parties before the completion tests according to Article 8.1.1. Where the conditions are met, the personnel of the parties shall sign for confirmation. The Employer shall be liable for any suffered by the Contractor from idleness of labor force due to delay of completion test conditions provided by the Employer. Where the completion test schedule delays, the completion date shall be postponed correspondingly; where the Contractor fails to fulfill the conditions for completion tests and causes any delay of the progress of the completion tests, it shall, at its own expense, catch up with the schedule according to Article 4.1.2.
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|
8.2.3
|
The Contractor shall, at least 36 hours prior to the start of each test, send notice to the Employer and (or) supervisor about the name, content, place, and acceptance time of the test. The Employer and (or) supervisor shall, within 24 hours after receiving the notice, reply the Contractor in written form. The parties shall sign the test data sheet and the acceptance form after the test is passed.
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|
8.2.4
|
If the Employer and (or) supervisor fails to attend the test and acceptance, they shall, within 24 hours after receiving the notice, they shall advise the Contractor in writing to delay the test but the delayed period shall not exceed 24 hours. If the Employer and (or) supervisor fails to attend the test without advising the delayed test within the previous time limit, the Contractor may carry out the test by itself and the test result shall be deemed to have been accepted by Employer and (or) supervisor.
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|
8.2.5
|
No matter whether the Employer and (or) supervisor attends the completion test and acceptance, the Employer is entitled to order a retest. When the retest is not passed due the reasons of the Contractor, the Contractor shall bear the additional cost and the completion time shall not be extended if the completion test progress delays thereupon; If the re-test passes, the additional cost of the Contractor and / or the extension of the completion date shall be processed as a change in accordance with the provisions of changes and the contract price adjustment under Article 13.
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|
8.2.6
|
Agreement of the Date for Acceptance of Completion Tests
|
|
(1)
|
Date and Time for acceptance of a certain completion test: the date and time of passing such completion test shall be taken as the date and time of acceptance of such completion test;
|
|
(2)
|
Date and Time for acceptance of the completion test of a single work: the date and time of passing the last completion test therein shall be taken as the date and time of acceptance of the completion test of such single work;
|
|
(3)
|
Date and Time for acceptance of the completion test of the project: the date and time of passing the completion test of the last single work shall be taken as the date and time of acceptance of the completion test of the overall project.
|
|
8.3
|
Safety and Check of Completion Tests
|
|
8.3.1
|
The Contractor shall establish a safe operation proposal including safety procedure, safety system, fire prevention measures, accident report system and accident handling program for electric shock hazard, flammable and combustible hazard, high temperature and pressure, pressure test and operation of mechanical equipment etc. in accordance with Article 7.8 Occupational Health, Safety, and Environment Protection and in combination of the characteristics of electricity supply, water supply, supply of natural gas, pressure test, leakage check, purge and rotation etc. It shall also submit the proposal to the Employer for confirmation. The Contractor shall correct the proposal at its own cost according to the Employer’s reasonable suggestion, advice and requirements and shall execute it after approval by the Employer. The Employer’s such approval shall not release the Contractor’s contractual obligations. The expenditure incurred by the Contractor for supplying the safety protection measures and tools has been included in the contract price.
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|
8.3.2
|
The Contractor shall train its employees for safety operation of the completion tests and shall make them clear about the safety operation procedure, site environment, operation system, emergency treatment and etc. of the completion tests.
|
|
8.3.3
|
The Employer and (or) supervisor shall educate their managerial personnel and operation and maintenance personnel for safety operation of the completion tests in accordance with the safety regulation, safety system, safety measures, and etc. of the confirmed safety program of the completion tests, and shall supply the protection facilities for their supervising and checking personnel at its own cost.
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|
8.3.4
|
The Employer and (or) supervisor is entitled to supervise and check the Contractor’s work listed in the safety program of the completion tests and to order the Contractor to correct the faults found, and the Contractor shall correct it according to the order and the additional cost incurred shall be borne by the Contractor. Where the completion tests delay therefore, the Contractor shall catch up with the schedule at its own cost according to Article 4.1.2.
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|
8.3.5
|
In accordance with the decisions made by the leading organ of completion tests under Article 8.1.3, the parties shall closely cooperate with each other to carry out
|
|
8.4
|
Delayed Completion Tests
|
|
8.4.1
|
The Contractor shall catch up with at its own cost the progress plan for the completion tests delayed by the Contractor according to Article 4.1.2.
|
|
8.4.2
|
The Contractor shall bear the delay damages according to Article 4.5 Delay Damages if the completion time of the project agreed herein delays due to the completion tests delayed by the Contractor.
|
|
8.4.3
|
Where the Contractor fails to carry out a certain completion test according to the test schedule decided by the leading organ of completion tests without reasonable reason, and also fails to carry out the test within 10 days after receiving the notice sent by the leading organ, the Contractor shall bear the delay damages if it causes delay of the completion time. Also, the Employer is entitled to organize the completion test. The cost arising therefrom shall be borne by the Contractor.
|
|
8.4.4
|
Where the Employer fails to perform its obligations under Article 8.1.2 and causes delay of the Contractor’s completion tests, the Employer shall bear the reasonable expenses therefore incurred by the Contractor. Where the completion test schedule is delayed, the completion date shall be postponed accordingly.
|
|
8.5
|
Retest and Acceptance
|
|
8.5.1
|
If the Contractor fails to pass the related completion test, the test shall be repeated according to (6) of Article 8.1.1 and shall be checked and accepted according to Article 8.2.
|
|
8.5.2
|
No matter whether the Employer and (or) supervisor attends the completion tests and acceptance, the Employer is entitled to inform the Contractor to repeat the completion test the Contractor has not passed according to (6) of Article 8.1.1 and the works shall also be checked and accepted according to Article 8.2.
|
|
8.6
|
Failure to Pass Completion Tests
|
|
8.6.1
|
If the failure to pass the completion test is due to the following reasons by the Employer, the cost incurred by the Contractor for carrying out the test shall be borne by the Employer and the time for completion shall be extended for the period by which the completion test is delayed:
|
|
(1)
|
The Employer fails to supply the testing conditions such as electricity, water, and power according to the technical data in the confirmed testing program, which has resulted in the failure to pass the test;
|
|
(2)
|
The Employer instructs the Contractor to carry out the completion test according to the Employer’s testing conditions, testing procedure, and testing method, resulting in the failure to pass the test;
|
|
(3)
|
The Employer disturbs the completion test carried out by the Contractor, resulting in the failure to pass the test;
|
|
(4)
|
Other Employer’s responsibilities resulting in the failure to pass the test.
|
|
8.6.2
|
If the failure to pass the test is due to the Contractor’s responsibility, the test may be redone for at most twice. If the acceptance standards are still not reached after the two redone tests, related costs, completion date and related matters shall be handled as follows.
|
|
(1)
|
If the failure to pass the test does not substantially affect the works operation and usage, the Contractor may repair it by itself. If it cannot be repaired, the Employer is entitled to deduct the corresponding contract price for the failure and then the test is deemed to be passed;
|
|
(2)
|
If the failure to pass the completion test does not substantially affect the operation and use of a single work, the Employer may deduct the contract price of such work accordingly, and the test is deemed passed; if the completion date is delayed, the Contractor shall be liable for delay damages.
|
|
(3)
|
If the failure to pass the test does substantially affect the operation and use of the works, the Employer is entitled to require the Contractor to replace the related part and carry out a further completion test. The additional cost incurred by the Employer shall be borne by the Contractor. The Contractor shall also bear the delay damages for the delayed time for completion;
|
|
(4)
|
If the failure to pass the test makes any main part of the single works lose the function of production and use, the Employer is entitled to require the Contractor to replace the related part. The Contractor shall bear the additional cost incurred therefore; if the completion time delays, the Contractor shall bear delay damages. The Contractor shall bear the additional cost incurred therefore to the Employer;
|
|
(5)
|
If the failure to pass the test makes the whole project lose the production and (or) use function, the Employer is entitled to require the Contractor to redesign and replace the related part. The Contractor shall bear the additional cost (including the cost of the Employer) therefore incurred; if the completion date delays, the Contractor shall bear delay damages. The Employer is entitled to claim against the Contractor for damages according to the compensation agreement of the Employer under Article 16.2.1 or terminate the Contract according to Article 18.1.2 (7).
|
|
8.7
|
Dispute on Results of Completion Tests
|
|
8.7.1
|
Resolution through negotiation: any dispute of the parties on any completion test result shall first be settled through negotiation.
|
|
8.7.2
|
Authentication entrustment: Where the parties fail to resolve the dispute after negotiation, they may jointly entrust a qualified authentication agency for authentication. After authentication, the dispute shall be settled according to the following:
|
|
(1)
|
if the Contractor is responsible, the Contractor shall bear the authentication fee and the additional reasonable cost therefore incurred by the Employer and the time for completion shall not be extended;
|
|
(2)
|
if the Employer is responsible, the Employer shall bear the authentication fee and the additional reasonable cost therefore incurred by the Contractor and the time for completion shall be extended accordingly;
|
|
(3)
|
If the parties are responsible, the fee shall be shared by the parties accordingly with the proportion of the responsibility of each party. They shall also negotiate the extension of the completion date according to the delay of the completion test schedule.
|
|
8.7.3
|
If the parties have any dispute on the authentication result given by the authentication agency, the dispute shall be resolved in accordance with the provisions of disputes and rulings under Article 16.3.
|
|
9.
|
Take-Over of the Project
|
|
9.1
|
Take-Over of the Project
|
|
9.1.1
|
Take-over of single works and (or) the project. According to specific circumstances and characteristics, take-over of single works and (or) the project shall be agreed in the Special Terms.
|
|
(1)
|
In accordance with the agreement of post-completion tests under Article 10, if the Contractor shall instruct the Employer to carry out post-completion tests for single
|
|
(2)
|
For single works and (or) the project without completion tests and post-completion tests, the Contractor shall complete the outstanding work and defect remedying work and make the works conform to the contract requirement and acceptance standards, and then do the hand-over and acceptance work in accordance with the contract.
|
|
9.1.2
|
Data submitted by the Contractor for take-over of the project: besides the data already submitted under Article 8.1.1 (1) to Article 8.1.1 (3), the Special Terms shall state the type, content, and number of copies and submission time of the acceptance data completed by completion tests.
|
|
9.2
|
Take-Over Certificate
|
|
9.2.1
|
The Contractor shall submit to the Employer an application for the take-over certificate within 10 days after single works and (or) the project become ready for acceptance. The Employer shall organize the acceptance within 10 days after receiving the application and issue the take-over certificate for the project and (or) single works.
|
|
9.2.2
|
Outstanding work and defect remedying work: for the works and (or) single works, the outstanding work and defects which will not substantially affect the use of the works shall not be the reason for the Employer to reject the works. The reasonable time limit agreed upon by the Employer and Contractor for completion of such outstanding work and remedying of the defect can be an appendix to the take-over certificate.
|
|
9.3
|
Responsibilities after Taking Over the Project
|
|
9.3.1
|
Security responsibility: the Employer shall be responsible for the security of the works after single works and (or) the project is taken over.
|
|
9.3.2
|
Custody responsibility: the Employer shall be responsible for the custody of single works and (or) the project after they are taken over, and for maintenance and repair
|
|
9.3.3
|
Insuring responsibility. If the Contractor is the insuring party for the construction period under the Contract, it shall be responsible for insuring the project and retain the insurance valid until the date of the Employer’s take-over of the project according to Article 9.2.1. The Employer shall be the insuring party thereafter.
|
|
9.4
|
Failure to Take Over the Project
|
|
9.4.1
|
Failure to take over the project. If the Employer fails to organize take-over within 15 days after receiving the Contractor’s application for take-over certificate for single works and (or) the project, the application shall be deemed to be accepted by the Employer. The Employer shall undertake related responsibilities under Article 9.3 after the 16
th
day of receiving the previous application.
|
|
9.4.2
|
Failure to take over the project as agreed. If the Contractor fails to submit an application for take-over certificate for single works and (or) the project or fails to meet take-over conditions for single works or the project, the Employer is entitled to refuse to take over single works and (or) the project.
|
|
10.
|
Post-Completion Test
|
|
10.1
|
Rights and Obligations
|
|
10.1.1
|
Rights and Obligations of the Employer
|
|
(1)
|
The Employer is entitled to review and approve the proposal of post-completion tests prepared by it with the assistance of the Contractor under Article 10.1.2 (2). The approval by the Employer shall not release the Contractor’s contractual obligations.
|
|
(2)
|
The Employer shall organize a joint coordination and leading organ for post-completion tests. The organ shall be organized and led by the Employer and guided by the Contractor, in order to divide work, organize preparation work for post-completion tests, and complete the post-completion tests and commissioning assessment in accordance with the approved proposal for post-completion tests.
|
|
(3)
|
The Employer is entitled to accept or reject by notification the advice suggested by the Contractor according to Article 10.1.2 (4). In case the above advice is not accepted by the Employer, the Contractor shall still act according to the organization and arrangement under Item (2) of this Paragraph. The Employer shall be responsible for any accident, personal injury or damage arising from the Contractor’s implementation of the Employer’s arrangement.
|
|
(4)
|
The organization, arrangement, order, and notice sent by the Employer to the Contractor during the period of post-completion tests shall be in writing and sent to the project manager of the Contractor. The project manager shall sign on the receipt with receiving date, time and signature.
|
|
(5)
|
The Employer is entitled to give oral instruction to the Contractor in emergency and the Contractor shall carry it out immediately. If the Contractor fails to do so, it shall be responsible for any accident, personal injury, and damage to the works arising therefrom. The Employer shall send the instruction in written form to the project manager of the Contractor within 12 hours after the oral instruction is given.
|
|
(6)
|
Other obligations and work of the Employer during the period of post-completion tests shall be agreed in the Special Terms.
|
|
10.1.2
|
Obligations and Responsibilities of the Contractor
|
|
(1)
|
The Contractor shall send the personnel with relevant qualification and experience to guide the post-completion tests under the arrangement of the above-mentioned joint coordination and leading organ for post-completion tests formed by the Employer. The driving manager and instructors sent by the Contractor shall not leave the site without prior approval of the Employer during the period of post-completion tests.
|
|
(2)
|
The Contractor shall assist the Employer in preparing a program for post-completion tests according to the contract and characteristics of post-completion tests and completing the preparation before post-completion tests. The program shall include operation and testing procedure, resource conditions, testing conditions, operation instruction, safety instruction, accident treatment procedure and progress schedule etc. for the project, single works and their relevant parts. The program shall be implemented after it is reviewed and approved by the Employer. The number of copies and time of the program for post-completion tests shall be agreed in the Special Terms.
|
|
(3)
|
Where the Contractor fails to execute the Employer’s arrangement, instruction, and notice, the Employer shall be responsible for any accident, personal injury, and damage to the project thereupon caused.
|
|
(4)
|
The Contractor is obliged to give advice for the Employer’s arrangement, instruction, and notice and state reasons therefore.
|
|
(5)
|
The Contractor shall carry out immediately operation, work and task according to the Employer’s oral instruction in emergency. The Contractor shall make notes of such instruction and the implementation thereof. The Employer shall send the instruction in written form to the Contractor within 12 hours after the oral instruction is given.
|
|
(6)
|
Liabilities of defects in the operation and maintenance manual. The Contractor shall be responsible for any accident, personal injury and damage to the project caused by the defects of the operation and maintenance manual furnished by the Contractor. Where the operating instructions provided by the Employer (including its patentee) have any defect and cause defects in the Contractor's operation manual, Therefore, the Employer shall be liable for any accident, personal injury, damage to the Project, and increase of the Contractor’s costs arising therefrom.
|
|
(7)
|
Other obligations and work of the Contractor during the period of post-completion tests according to the contract and (or) relevant industry shall be agreed in the Special Terms.
|
|
10.2
|
Procedure of Post-Completion Tests
|
|
10.2.1
|
The Employer shall supply all electricity, water, fuel, power, auxiliary materials, consumables, and other testing conditions as required by the program for post-
|
|
10.2.2
|
The Contractor shall supply other temporary auxiliary equipment, facilities, tools, and appliance necessary for post-completion tests according to the program for post-completion tests and shall complete other preparation work required.
|
|
10.2.3
|
The Employer shall organize post-completion tests according to the approved program for post-completion tests and testing procedure and testing conditions of any part within the single works, the single works, between the single works, and (or) the project.
|
|
10.2.4
|
The joint coordination and leading organ shall organize the overall check and implement resource conditions, testing conditions, and safety facility conditions, fire prevention facility conditions, conditions of emergency accident treatment facility and (or) relevant measures required for the project, single works and any part of the project, and shall ensure that the recording apparatus and dedicated record forms are complete and sufficient.
|
|
10.2.5
|
Notification of the date of post-completion tests. Unless otherwise stated in the Special Terms, the Employer shall notify the Contractor of the date of commencing the post-completion tests within 15 days after the date of taking over single works and (or) the project.
|
|
10.3
|
Post-Completion Tests and Commissioning Assessment
|
|
10.3.1
|
The test shall be carried out in accordance with the testing procedure, testing conditions and operation procedure of the approved program for post-completion tests to reach the production function and (or) operation function of the project and (or) single works as required by the contract.
|
|
10.3.2
|
During the test, the operation personnel of the Employer and the instructors of the Contractor on the same post shall fill in the data, conditions, circumstances, time, name and other agreed content on the testing conditions record, testing record and the forms.
|
|
10.3.3
|
Commissioning Assessment
|
|
(1)
|
According to Article 5.1.1, if the Contractor provides the production technique or architectural design scheme, it shall guarantee that the project achieve the assessment guarantee value or operation function stated in Article 5.1.1 of the Special Terms during the period of commissioning assessment.
|
|
(2)
|
According to Article 5.1.2, if the Employer provides the production technique or architectural design scheme, the Contractor shall guarantee that the parts of the project undertaken by it reach the assessment guarantee value and (or) operation function as stated in Article 5.1.2 during the period of commissioning assessment.
|
|
(3)
|
The parties shall agree on the period of commissioning assessment in the Special Terms according to the regulations for the period of commissioning assessment of relevant industry.
|
|
(4)
|
After the commissioning assessment or operation function assessment is passed, the parties shall jointly sort out the results of post-completion tests and commissioning assessment and prepare an evaluation report. The report shall be made in duplicate and with each party holding one after signed and stamped by the parties, as a constituent part of the contract. The Employer shall issue the assessment and acceptance certificate under Article 10.7.
|
|
10.3.4
|
Ownership of product and (or) service revenue. Any product revenue and (or) service revenue of single works and (or) the project during the period of post-completion tests and commissioning assessment shall belong to the Employer.
|
|
10.4
|
Delay of Post-Completion Tests
|
|
10.4.1
|
According to the notification of the date of post-completion tests set forth in Article 10.2.5, if the Employer fails to start post-completion tests within 90 days after the notice of post-completion tests is issued, irrelevant to the Contractor, post-completion tests and commissioning assessment for the project and (or) single works shall be deemed to be passed, except as otherwise provided in the Special Terms
|
|
10.4.2
|
If post-completion tests delay due to the Contractor’s reason, the Contractor shall take measures to organize and coordinate with the Employer to start and pass the post-completion tests as early as possible. If the Employer incurs additional cost for the delay, it is entitled to claim against the Contractor for compensation under Article 16.2.1.
|
|
10.4.3
|
According to the provisions of the period of commissioning assessment set forth in Article 10.3.3 (3), if the commissioning is stopped or suspended due to the Employer’s reason during the period of commissioning assessment, and the accumulated number of days of the stop or suspension exceeds the period of the commissioning assessment stated in the Special Terms under Article 10.3.3 (3), the commissioning assessment
|
|
10.5
|
Retest after Completion
|
|
10.5.1
|
As per Article 5.1.1 or Article 5.1.2 and the Special Terms, if any part of the project or single works fails to pass any post-completion test due to the Contractor’s reason, the Contractor shall repair the defect at its own cost. Also, the Employer shall re-organize such post-completion test according to the testing procedure and testing conditions stated in Article 10.2.3.
|
|
10.5.2
|
If the Contractor still fails to pass the retest according to Article 10.5.1, it shall continue to repair the defect at its own cost. The Employer shall re-organize such post-completion test according to the testing procedure and testing conditions stated in Article 10.2.3.
|
|
10.5.3
|
If the any retest after completion causes the Employer to incur additional cost, the Employer is entitled to claim against the Contractor for compensation as per Article 16.2.1.
|
|
10.6
|
Failure to Pass the Assessment
|
|
(1)
|
Compensation for failure to pass commissioning assessment
|
|
1)
|
The production technique or architecture design scheme supplied by the Contractor fails to pass the commissioning assessment
|
|
2)
|
The production technique or architecture design scheme supplied by the Employer fails to pass the commissioning assessment
|
|
(2)
|
Where the Contractor proposes to investigate, adjust and correct the project and (or) single works which fail to pass the commissioning assessment at its own cost, the parties shall negotiate and agree on an appropriate period for investigation, adjustment and test. The Employer shall provide corresponding convenience. The Employer may not claim compensation according to Article 10.6 (1) before the commissioning assessment is passed.
|
|
(3)
|
Where the Employer accepts item (2) of this Article, but fails to provide convenience for the Contractor during the agreed time limit, which cause the Contractor unable to complete its investigation, adjustment and correction, the commissioning assessment shall be deemed to have passed.
|
|
10.7
|
Acceptance Certificate for Post-Completion Tests and Commissioning Assessment
|
|
10.7.1
|
Issuance of the acceptance certificate for post-completion tests and commissioning assessment for the project and (or) single works shall be agreed in the Special Terms.
|
|
10.7.2
|
The Employer shall be issued with the acceptance certificate for post-completion tests and commissioning assessment as per Article 10.7.1 after it passes or it is deemed to have passed post-completion tests and (or) commissioning assessment in accordance with Article 10.3, Article 10.4, Article 10.5.1, Article 10.5.2 and Article 10.6. The date and time of passing the commissioning assessment indicated on the certificate shall be the same date and time on which the commissioning assessment is actually completed and passed or deemed passed.
|
|
10.8
|
Loss of Production Value and Operation Value
|
|
11.
|
Liability for Quality Warranty
|
|
11.1
|
Certificate for Quality Warranty Liability
|
|
11.1.1
|
Certificate for Quality Warranty Liability
|
|
11.1.2
|
Fail to Provide the Certificate for Quality Warranty Liability.
|
|
11.2
|
Warranty Money for Defect Liability
|
|
11.2.1
|
Amount of Warranty Money for Defect Liability
|
|
11.2.2
|
Retaining the Warranty Money
|
|
11.2.3
|
Payment of the Warranty money
|
|
12.
|
Inspection and Acceptance of Project Completion
|
|
12.1
|
Acceptance Report and Complete As-Built Data
|
|
12.1.1
|
The works conforms to the provisions of Article 9.1 relating to work taking-over, and/or the post-completion test certificate and assessment acceptance certificate have been issued as per Article 10.7, and the outstanding work and defect remedying work have been completed as per Article 9.2.2, and accepted by the Employer or supervisor, the Contractor shall submit the completion inspection report, and complete as-built data required by (1), (2), (3) of Article 8.1.1 and the provisions of Article 8.2 relating to the inspection and acceptance of completion test, and the provisions of (4) of Article 10.3.3 relating to the post-completion test and commissioning assessment result data. The Special Terms shall state the format, content and number of copies of the final project inspection report and complete as-built data.
|
|
12.1.2
|
The Employer shall respond with revising advice or confirmation within 25 days after receiving those inspection report and complete as-built data, for which the Contractor shall revise them according to the Employer’s advice at its own cost. If the Employer does not give the revising advice within 25 days the as-built data and acceptance report shall be deemed confirmed.
|
|
12.1.3
|
Articles 12.1.1 and 12.1.2 shall apply for the works stage constructed, being put into production by stages, and being used by stages.
|
|
12.2
|
Completion Inspection and Acceptance
|
|
12.2.1
|
Organization of Completion Inspection and Acceptance
|
|
12.2.2
|
Postponed Organization of Completion Inspection and Acceptance
|
|
12.2.3
|
Completion Inspection and Acceptance by Stages
|
|
13.
|
Modification and Adjustment of Contract Price
|
|
13.1
|
Right of Modification
|
|
13.1.1
|
Right of Modification
|
|
13.1.2
|
Modification
|
|
13.1.3
|
Right to Propose Modification
|
|
13.2
|
Scope of Modification
|
|
13.2.1
|
Scope of Modification to the Design
|
|
(1)
|
The adjustment of the production process, without increase or reduction of the production roadmap and scale approved in the initial design or provided in the Contract;
|
|
(2)
|
The adjustment of the layout, vertical layout and partial features, without increase of the scale of construction approved in the initial design, without change of the
|
|
(3)
|
The adjustment of the process and features of supporting project system;
|
|
(4)
|
The adjustment of the benchmark control points, benchmark elevation and baseline;
|
|
(5)
|
The adjustment of the performance, specification and quantity of the equipment, materials and components;
|
|
(6)
|
The modification due to the implementation of any laws, standards or regulations issued after the reference date;
|
|
(7)
|
Other matters of design not agreed in the Contract;
|
|
(8)
|
Additional work required for the above modification.
|
|
13.2.2
|
Scope of Modification to Procurement
|
|
(1)
|
The Contractor has executed a procurement agreement with relevant supplier as the list approved by the Employer, or has carried out the manufacture, supply or transport, and the Employer notify the Contractor to choose another supplier from the list;
|
|
(2)
|
The modification due to the implementation of any laws, standards or regulations issued after the reference date;
|
|
(3)
|
The change of place of examination, inspection, test and experimentation, as well as any additional test request by the Employer;
|
|
(4)
|
The increase or reduction of spare parts, special tools, materials for test after completion requested by the Employer;
|
|
(5)
|
Additional work required for the above modification.
|
|
13.2.3
|
Modification of Scope of Construction
|
|
(1)
|
The modification of construction method, or the increase or reduction of quantity of equipment, materials, components, labor and work, due to the modification to design under Article 13.2.1;
|
|
(2)
|
Any additional test or the change of place of test required by the Employer;
|
|
(3)
|
New-increased construction obstacles treatment other than the ones provided in Article 5.2.1(1) and Article 5.2.1(2);
|
|
(4)
|
The notice from the Employer for re-test of completion with respect of projects, of which the completion test have been accepted, or have been approved by municipal government;
|
|
(5)
|
The modification due to the implementation of any laws, standards or regulations issued after the reference date;
|
|
(6)
|
Other onsite certificates;
|
|
(7)
|
Additional work required for the above modification.
|
|
13.2.4
|
Employer's Instruction of Acceleration. When the Contractor accepts the Employer's instruction in writing so as to accelerate the schedule of design, construction and other part of work in such way as deemed necessary by the Employer, the Contractor shall adjust the project schedule so as to implement such instruction of acceleration, and shall estimate the increased measures and resources, and such adjustment shall be a modification after approved by the Employer. If the Employer fails to approve such modification, the Contractor has the right to implement it in accordance with the schedule of relevant phases as agreed in the Contract.
|
|
13.2.5
|
Adjustment and Reduction of Partial Work. If the work is suspended by the Employer for more than 45 days, and the Contractor cannot resume work when requesting, or the construction cannot be resumed due to Force Majeure, both parties may request by means of a modification so as to adjust and reduce partial work under the influence of such suspension according to the Contract.
|
|
13.2.6
|
Other Modification. Other modification shall be set forth in the Special Terms in accordance with the features of the work.
|
|
13.3
|
Procedure of Modification
|
|
13.3.1
|
Notice of Modification. The Employer shall give the Contractor a notice in writing with respect to the matter to be modified.
|
|
13.3.2
|
Proposal of Notice of Modification. The Contractor shall have the obligation to submit a proposal of notice of modification within 10 days upon the receipt of the notice of modification from the Employer, including:
|
|
(1)
|
If the Contractor accepts the modification in the notice of modification from the Employer, the proposal shall include: the reason for supporting such modification,
|
|
(2)
|
If the Contractor does not accept such modification in the notice of modification, the proposal shall contain the reason for not supporting such modification, including the following:
|
|
1)
|
such modification is not in conformity with relevant laws and regulations;
|
|
2)
|
the special equipment, materials or components are difficult to obtain by the Contractor;
|
|
3)
|
the Contractor is hard to obtain the process or technology to make modification;
|
|
4)
|
such modification will reduce the security, stability and applicability of the work;
|
|
5)
|
Such modification will have adverse impact on the realization of the guaranteed value of production performance and the guarantee of functions, and etc.
|
|
13.3.3
|
Examination and Approval by the Employer. Within 10 days upon the receipt of a written proposal from the Contractor under Article 13.3.2, the Employer shall examine such proposal, and give notice of approval, cancellation, amendment or further requirement. The Contractor shall not cease or delay any work when waiting for the Employer's reply.
|
|
(1)
|
After the receipt of the proposal from the Contractor in accordance with Article 13.3.2(1), and after the examination and approval of the reason, estimate, and/or the extension of completion date, the Employer shall give the instruction of modification in writing.
|
|
(2)
|
After the examination of the reason in the proposal from the Contractor which not accept such modification under Article 13.3.2(2), and if the Employer give written notice of continuation, change or request for further supplementary information, the Contractor shall implement such notice.
|
|
13.3.4
|
If the Contractor submits the proposal of modification under Article 13.1.3, the procedure of modification shall be based on this Procedure of Modification.
|
|
13.4
|
Urgent Procedure of Modification
|
|
13.4.1
|
The Employer has the right to give urgent instruction of modification in writing or orally, and urge the Contractor to perform such modification immediately. Upon the receipt of such instruction, the Contractor shall perform it immediately. If the Employer gives any oral urgent instruction of modification, it shall confirm in writing the modification within 48 hours, and deliver the written confirmation to the project manager of the Contractor.
|
|
13.4.2
|
Within 10 days upon the completion of performance of urgent procedure of modification, the Contractor shall submit the work for performing such modification, and the resources consumption and estimate. If the performance of such modification causes the delay of key timeline of the work, and the Contractor may require an extension of completion date, provided that the Contractor shall give explanation and submit corresponding schedule.
|
|
13.4.3
|
Within 10 days upon the receipt of the written materials submitted by the Contractor in accordance with Article 13.4.2, the Employer shall give notice in writing to the Contractor for the approved reasonable estimate and/or reasonable extension of the completion date.
|
|
13.5
|
Determination of Modification of Price
|
|
13.5.1
|
Where the Contract provides for the unit prices (including charges) for labor, machinery and work volume, the modification of price shall be made according to such unit prices;
|
|
13.5.2
|
Where the Contract does not provide for the unit prices (including charges) for labor, machinery and work volume, the modification of price shall be determined according to the similar price for modification of work;
|
|
13.5.3
|
Where the Contract does not provide for the unit prices (including charges) for labor, machinery and work volume, nor provide for any similar price for modification of work, both parties will determine the modification of price through negotiation.
|
|
13.5.4
|
Other methods provided for in the Special Terms.
|
|
13.6
|
Benefit Sharing of Modification Proposal
|
|
13.7
|
Adjustment of Contract Price
|
|
(1)
|
After the execution of the Contract, the Contract Price is increased or reduced by the change of laws, national policy and industrial regulations which need to complied with;
|
|
(2)
|
During the performance of the Contract, the adjustment of price, which is announced by the project price administration authority, is involved in the increase or reduction of the cost of the Contractor;
|
|
(3)
|
The accumulated duration of suspension of work on site exceeds more than 8 hours within a week, due to the cut-off of water, electricity, gas or transport which is not caused by the Contractor (the Contractor must submit a report and provide verifiable proof and estimates);
|
|
(4)
|
The increase and reduction of estimate which is approved by the Employer in accordance with the modification procedure of Article 13.3 to Article 13.5;
|
|
(5)
|
The increase or reduction of other payment under this Contract
|
|
13.8
|
Dispute on Adjustment of Contract Price
|
|
14.
|
Total Contract Price and Payment
|
|
14.1
|
Total Contract Price and Payment
|
|
14.1.1
|
Total Contract Price
|
|
14.1.2
|
Payment
|
|
(1)
|
The currency for the payment of the Contract shall be Renminbi, which shall be paid by the Employer to the Contractor within the territory of PRC.
|
|
(2)
|
The Employer shall pay the Contractor the Contract Price in accordance with the type of account payable and the arrangement for the time of payment as agreed in the Contract. The bank account designated by the Contractor is specified in the Special Terms.
|
|
14.2
|
Guarantee
|
|
14.2.1
|
Performance Guarantee
|
|
14.2.2
|
Payment Guarantee
|
|
14.2.3
|
Prepayment Guarantee
|
|
14.3
|
Advanced payment
|
|
14.3.1
|
Amount of Advanced Payment
|
|
14.3.2
|
Payment of Advanced Payment
|
|
14.3.3
|
Deduction of Advanced Payment
|
|
(1)
|
The method, deduction percentage and time of the advanced payment will be set forth in the Special Terms.
|
|
(2)
|
When the Employer issues the project acceptance certificate or when the Contract is terminated, and the advanced payment has not been deducted fully, the Employer is entitled to require the Contractor to pay the advanced payment not deducted. If the Contractor fails to pay, the Employer will be entitled to deduct the balance of the advanced payment according to the following procedures:
|
|
1)
|
Deduct from the amount payable to or owned by the Contractor for once or several times;
|
|
2)
|
When the amount payable to or owned by the Contractor is insufficient to deduct, the Employer will be entitled to deduct the advanced payment not offset from the advanced payment guarantee (if agreed);
|
|
3)
|
When the amount payable to or owned by the Contractor is insufficient to deduct, and the Contract does not provide the Contractor shall submit the advanced payment guarantee, the Contractor and the Employer shall sign a payment schedule arrangement for the payment of the advanced payment not offset;
|
|
4)
|
If the Contractor fails to perform according the above arrangement, the Employer is entitled to deduct the advanced payment not offset from the performance guarantee (if any).
|
|
14.4
|
Progress Payment of the Work
|
|
14.4.1
|
Progress Payment. The method, condition and time of the payment of progress payment shall be agreed in the Special Terms.
|
|
14.4.2
|
Other progress payment which is payable in accordance with the specific circumstances of the work shall be agreed in the Special Terms.
|
|
14.5
|
Deduction and Payment of Defect Liability Warranty Money
|
|
14.5.1
|
Deduction of Defect Liability Warranty Money. The Employer may deduct the defect liability warranty money according to the provisions of Article 11.2.1 relating to the amount of defect liability warranty money, and the provisions of Article 11.2.2 relating to the deduction of the defect liability warranty money.
|
|
14.5.2
|
Payment of Defect Liability Warranty Money
|
|
(1)
|
When the Employer carries out the project completion inspection and settlement, it shall pay half of the full amount of the defect liability warranty money deducted by it according to Article 14.5.1 to the Contractor, unless the Special Terms provides otherwise. Thereafter, if the Contractor fails to remedy any defect occurred during the period of defect warranty period notified by the Employer, or entrusts the Employer to remedy such defect, the costs therefor shall be deducted from the
|
|
(2)
|
Where the Special Terms provide that the Contractor may submit guarantee for defect liability warranty money, at the time of conducting the completion inspection and settlement, the Employer shall refund the balance to the Contractor after it receives the guarantee, if the Contractor requests to provide guarantee in lieu of the balance of the defect liability warranty money. Thereafter, if the Contractor fails to remedy any defect occurred during the period of defect warranty period notified by the Employer, or entrusts the Employer to remedy such defect, the costs therefor will be deducted from the guarantee. The Employer shall return the guarantee within 15 days after the defect liability period expires. The form, amount and submission time of the guarantee will be provided for in the Special Terms.
|
|
14.6
|
Application for Progress Payment on Monthly Basis
|
|
14.6.1
|
Application for Monthly Payment. If applying for payment on a monthly basis, the payment shall be based on the Contract Price agreed in the Contract. The application for payment shall be made to the Employer or Supervisor based on the contract price of the monthly actual completed work (including design, procurement, construction, completion test and test after completion, etc.). The format, content, copies and time of the application for payment submitted by the Contractor shall be agreed in the Special Terms.
|
|
(1)
|
The category of amount agreed under Article 14.4 (Work Progress Payment);
|
|
(2)
|
The increased and reduced amount agreed under Article 13.7 (Adjustment of Contract Price);
|
|
(3)
|
The paid and deducted amount agreed under Article 14.3 (Advanced Payment);
|
|
(4)
|
The retained and paid amount agreed under Article 14.5 (Defect Liability Warranty Money);
|
|
(5)
|
The increased and reduced amount in accordance with the result of claims under Article 16.2;
|
|
(6)
|
The increased and reduced amount agreed in the supplementary agreement of the Contract, which is executed by both parties separately.
|
|
14.6.2
|
If both parties have agreed on the application for monthly payment of the work progress payment under Article 14.6.1, both parties shall not agree on the application for payment in accordance with the payment schedule under Article 14.7.
|
|
14.7
|
Application for Payment by Payment Schedule
|
|
14.7.1
|
Application for Payment by Payment Schedule
|
|
(1)
|
The amount in the application for the scheduled payment of the current period as agreed in the Special Terms;
|
|
(2)
|
The increased and reduced amount agreed under Article 13.7 (Adjustment of Contract Price);
|
|
(3)
|
The paid and deducted amount agreed under Article 14.3 (Advanced Payment);
|
|
(4)
|
The retained and paid amount agreed under Article 14.5 (Defect Liability Warranty Money);
|
|
(5)
|
The increased and reduced amount in accordance with the result of claims under Article 16.2;
|
|
(6)
|
The increased and reduced amount agreed in the supplementary agreement of the Contract, which is executed by both parties separately.
|
|
14.7.2
|
If the Employment makes the payment according to the payment schedule, and the Contractor's actual work and/or actual progress significantly falls behind the tasks of the key timeline for 30 days or more, then the Employer has the right, after the negotiation with the Contractor, to reduce the amount of the current payment, and to adjust the payment schedule. The application for payment of each period henceforth by the Contractor, as well as the payment of the Employer, shall be on the basis of the adjusted payment schedule.
|
|
14.7.3
|
If both parties have agreed on the application for payment in accordance with the payment schedule under Article 14.7, both parties shall not agree on the application for monthly payment of the work progress payment under Article 14.6.
|
|
14.8
|
Payment Condition and Schedule
|
|
14.8.1
|
Payment Condition
|
|
14.8.2
|
Payment of the Advanced Payment
|
|
14.8.3
|
Work Progress Payment.
|
|
(1)
|
Application and Payment of Work Progress Payment on a Monthly Basis. When it is agreed that the application for payment of work progress payment is on a monthly basis under Article 14.6.1, the Employer shall review and make payment within 25 days upon the date of application for payment of each period submitted by the Contractor under Article 14.6.1.
|
|
(2)
|
Application and Payment on the Basis of the Payment Schedule. When it is agreed that the application for payment is on the basis of the payment schedule under Article 14.7.1, the Employer shall review and make payment within 25 days upon the date of application for payment of each period submitted by the Contractor under Article 14.7.1.
|
|
14.9
|
Delay of Payment
|
|
14.9.1
|
If the work progress payment is not paid as agreed in Article 14.8.3 due to the reason of the Employer, then from the 26th day after the Employer receives the payment application report, the Employer shall pay the interest of the delayed payment as the liquidated damages, on the basis of the lending rate of the same period and kind promulgated by the People's Bank of China.
|
|
14.9.2
|
If the Employer's delay of payment exceeds more than 15 days, the Contractor shall have the right to give the Employer a notice to request payment. If the Employer still does not make the payment, the Contractor may cease partial work, which will be
|
|
14.9.3
|
If the Employer's delay in payment exceeds more 60 days, and affects the performance of the whole work, the Contractor shall have the right to give notice to the Employer to terminate the Contract in accordance with Article 18.2, and shall have the right to recover any costs increased thereby.
|
|
14.10
|
Taxes and Duties
|
|
14.11
|
Payment of Amount of Claim
|
|
14.11.1
|
The amount of claim receivable by the Employer which is determined by negotiation, mediation, arbitration award or court's judgment, such amount may be deducted by the Employer from the amount of payment for the current month or according to the payment schedule for the current period, which is payable to the Contractor. If the work progress payment for all periods payable to the Employer is not enough to cover the amount of claim, the Contractor shall pay otherwise. If the Contractor fails to pay, an agreement on payment may be negotiate. If payment is still not made, then such amount may be recovered from the performance guarantee, if any. If the performance guarantee is not enough to cover the amount of claim, the Contractor shall otherwise pay such amount of claim, or pay according to the period agreed by both parties in the above agreement on payment.
|
|
14.11.2
|
The amount of claim receivable by the Contractor which is determined by negotiation, mediation, arbitration award or court's judgment, such amount may be separately listed
|
|
14.12
|
Settlement of Completion
|
|
(1)
|
If the Employer fails to pay off the balance of the payment of settlement of completion as agreed in Article 14.12.3, the Contractor shall have the right to deduct such balance from the payment guarantee submitted by the Employer in accordance with Article 14.2.2.
|
|
(2)
|
If the Employer fails to make any suggestions on revision or response to the material of settlement of completion within the agreed 30 days in accordance with Article 14.12.4, or fails to make the payment of the balance of the settlement of completion, then the Employer shall, from the 31st day after the Contractor's submission of the report, pay the outstanding balance of the settlement amount, and pay the corresponding interest according to the lending rate for the same period and same kind of loans published by the People's Bank of China.
|
|
(1)
|
If the Contractor fails to pay off the balance of the amount of settlement of completion as agreed in Article 14.12.3, then the Employer shall have the right to deduct such amount from the performance guarantee in accordance with Article 14.2.1.
|
|
(2)
|
If the Contract does not provide for the performance guarantee, then from the 31st day after the submission of the final documents of settlement of completion, the Contractor shall pay the outstanding balance of the settlement amount, and pay the corresponding interest according to the lending rate for the same period and same kind of loans published by the People's Bank of China. If the Contractor fails to pay within 90 days from the Contractor's submission of final documents of settlement of completion, the Employer may request to resolve the dispute in accordance with Article 16.3 (Dispute and resolution).
|
|
15.
|
Insurance
|
|
15.1
|
Contractor’s Maintenance of Insurance
|
|
15.1.1
|
The Contractor's insurance shall be in accordance with applicable laws and the category of insurance as agreed in the Special Terms. The insurance premium of Contractor's insurance shall be included in the Contract Price. The category of insurance, insurance
|
|
(1)
|
If the Contractor is responsible for insurance as provided in applicable laws and in the Special Terms of this Contract, then such insurance shall be purchased by the Contractor in accordance with the requirement of implementation of the project;
|
|
(2)
|
During the performance of this Contract, if the Contractor is responsible to purchase mandatory insurance due to the implementation of new applicable laws or regulations, the Contract Price shall be adjusted in accordance with Article 13 (Modification and Adjustment of Contract Price).
|
|
15.1.2
|
If the insurance policy is purchased for the joint insured, insurance proceeds shall be applied to each joint insured. On behalf of its own insured, the Contractor undertakes that its insured shall comply with the condition and proceeds agreed in the insurance policy.
|
|
15.1.3
|
The insurance proceeds received by the Contractor from the insurer shall be used for the loss, damage, restore of damage, purchase, re-construction and compensation as agreed in the insurance policy.
|
|
15.1.4
|
During the period of the project insured and the duration of the insurance, the Contractor shall provide the Employer with a counterpart of the insurance policy, the copy of the invoice of the premium paid, and evidence of the effectiveness of the insurance policy.
|
|
15.2
|
All-Risks Insurance and Third Party Liability Insurance
|
|
15.3
|
Other Provisions of Insurance
|
|
15.3.1
|
The insurance for the transportation of equipment, materials, and components, which shall be procured and transported by the Contractor, shall be purchased by the Contractor. Except as otherwise agreed in the Special Terms, the insurance premium has been included in the Contract Price.
|
|
15.3.2
|
If any emergency in the insured matters occurs, either party on site shall have the responsibility to take necessary measures, to prevent the increase of loss and damage.
|
|
15.3.3
|
Any insurance not covered in this Contract shall be purchased by each party separately for its own needs, and the insurance premium shall be borne respectively.
|
|
16.
|
Breach of Contract, Claim and Dispute
|
|
16.1
|
Liability for Breach of Contract
|
|
16.1.1
|
Employer’s Liability for Breach of Contract.
|
|
(1)
|
The Employer fails to provide on time the true, accurate and completed technology and/or architectural design plan, fundamental materials of the project and information of on-site obstacles, as agreed in Article 5.1.2, Article 5.2.1(1) and (2);
|
|
(2)
|
The Employer fails to adjust the Contract Price according to Article 13, and make relevant payments in accordance with the provisions of category of payment, the amount, the account designated by the Contractor and the time of payment in relation to the advance, progress payment, and completion settlement, as agreed in Article 14;
|
|
(3)
|
The Employer fails to perform other liabilities and obligations in the Contract,
|
|
16.1.2
|
Contractor’s Liability for Breach of Contract.
|
|
(1)
|
The Contractor fails to conduct inspection for the project materials provided by the Contractor under Article 6.2, or fails to repair any defects under Article 7.5 (Construction Quality and Inspection);
|
|
(2)
|
The Contractor fails to pass the completion test for three times, or fails to pass the test after completion for three times, and thus any major part of the Project, or the whole Project loses its the value of use, the value of production or the use interest;
|
|
(3)
|
Without the consent of the Contractor, or without any necessary permit, or if any applicable laws do not allow any subcontract, the Contractor subcontracts the Project to any third party;
|
|
(4)
|
The Contractor fails to perform other liabilities and obligations under the Contract.
|
|
16.2
|
Claim
|
|
16.2.1
|
Employer’s Claim
|
|
(1)
|
Within 30 days upon the occurrence of the claim, the Employer shall give the notice of claim to the Contractor. If the Employer fails to give the claim notice within 30 days, the Contractor shall not assume any liability, unless the law provides for otherwise;
|
|
(2)
|
Within 30 days upon the issuance of the notice of claim, the Employer shall give a good cause for the claim, the ground of the claim under the Contract, effective and provable evidence, the estimate of the claim and other relevant materials in writing form to Contractor;
|
|
(3)
|
Within 30 days upon the receipt of the materials of claim from the Employer, the Contractor shall resolve the problem by negotiation with the Employer, or give a reply, or request the Employer to further provide supplementary ground and evidence of the claim;
|
|
(4)
|
If the Contractor, within 30 days upon the receipt of the materials of claims sent by the Employer, fails to negotiate with the Employer or give a reply, or request the Employer to further provide supplementary ground and evidence of the claim, then such failure shall be deemed that the claim has been accepted by the Contractor.
|
|
(5)
|
If the event for Employer’s claim has continuous effect, the Employer shall give a notice every week with respect to the continuous impact of the event of claim. Within 30 days after the end of the continuous impact of the event of claim, the Employer shall send Contractor the final claim report and the final claim estimates. The procedure of claim is the same as Article 16.2.1(1) to (4);
|
|
16.2.2
|
Contractor’s Claim
|
|
(1)
|
Within 30 days upon the occurrence of the claim, the Contractor shall give the notice of claim to the Employer. If the notice has not been given within 30 days, the Employer shall not be reliable, unless otherwise provided by law;
|
|
(2)
|
Within 30 days upon the issuance of the notice of claim, the Contractor shall give good cause for the claim, the ground of the claim under the Contract, effective and provable evidence, the estimate of the claim and other relevant materials in written form to Employer;
|
|
(3)
|
Within 30 days upon the receipt of the materials of claim from the Contractor, the Employer shall resolve the problem by negotiation with the Contractor, or give a reply, or request the Contractor to further provide supplementary ground and evidence of the claim;
|
|
(4)
|
If the Employer, within 30 days upon the receipt of the materials of claims sent by the Contractor in accordant with the Article 16.2.2(3), fails to negotiate with the Contractor, or give a reply, or request the Contractor to further provide supplementary ground and evidence of the claim, then such failure shall be deemed that the claim has been accepted by the Employer;
|
|
(5)
|
If the event of the Contractor’s claim has continuous impact, the Contractor shall give a notice to Employer every week with respect to the continuous impact of the event of claim. Within 30 days after the end of the continuous impact of the event of claim, the Contractor shall send the Employer the final claim report and the final claim estimates. The procedure of claim is the same as Article 16.2.2(1) to (4).
|
|
16.3
|
Dispute and Resolution
|
|
16.3.1
|
Dispute Resolution Process
|
|
16.3.2
|
Dispute shall not Affect Performance of Contract.
|
|
(1)
|
The Contract is unable to perform due to the breach of Contract by one party, and both parties cease the implementation through negotiation;
|
|
(2)
|
The arbitration institution or the court orders to cease the implementation.
|
|
16.3.3
|
Protection of Project after the Cease of Implementation
|
|
17.
|
Force Majeure
|
|
17.1
|
Obligations at the Occurrence of Force Majeure
|
|
17.1.1
|
Obligation of Notice
|
|
17.1.2
|
Obligation of Reporting
|
|
17.2
|
Consequence of Force Majeure
|
|
(1)
|
loss and damage to permanent project and its materials will be borne by the Employer;
|
|
(2)
|
Injury to employees will be handled according to their respective employment contracts;
|
|
(3)
|
Loss and damage to the machines, equipment, property and temporary work will be borne by the Contractor;
|
|
(4)
|
Loss of stop of work of the contractor will be borne by the Contractor;
|
|
(5)
|
The consequential loss and damage caused due to either party’s failure to perform the protective obligation hereunder after the force majeure event occurs will be borne by such party;
|
|
(6)
|
When the Employer notifies to resume the construction, the Contractor will submit the plan for clearing and repair and the estimate as well as the data and report of progression plan and schedule within 20 days after receipt of such notice or within other time limit agreed by the parties based on the specific situation. Upon the Employer’s confirmation, all costs for clearing and repair will be borne by the Employer. The completion date after resuming construction will be delayed accordingly.
|
|
18.
|
Termination
|
|
18.1
|
Termination by the Employer
|
|
18.1.1
|
Notice to Correct
|
|
18.1.2
|
Termination by the Employer
|
|
(1)
|
The Contractor fails to comply with the performance guarantee under Article 14.2.1;
|
|
(2)
|
The Contractor fails to perform the provisions of notice to correct under Article 18.1.1;
|
|
(3)
|
The Contractor fails to comply with the provisions relating to subcontracting and transfer of contracting under Article 3.8.1 to Article3.8.4;
|
|
(4)
|
The Contractor’s actual progress falls obviously behind the schedule, and fails to take measures and make correction when the Employer direct the Contractor to do so;
|
|
(5)
|
The project has severe quality defect, and the Contractor delays the repair starting date for no less than 30 days for no reasonable reason;
|
|
(6)
|
The Contractor expressly states or indicates through its act that it will not perform the contract, or fails to perform the contract after the Employer notify it of performance of the contract in writing, or perform the contract in a manifestly inappropriate manner;
|
|
(7)
|
According to Article 8.6.2 (4) and Article 10.8, the project fails to pass completion tests or fails to pass post-completion tests, and thus cause any part or whole of the project to lose main operation function or production function;
|
|
(8)
|
The Contractor goes into bankruptcy, winding up, or liquidation, or there is situation indicates that the Contractor will go into bankruptcy and (or) liquidation.
|
|
18.1.3
|
Work to be Ceased and Carried Out after Notice of Contract Termination
|
|
(1)
|
Stop all works notified to be terminated, except for protecting life, property or project safety and clearing and the work required to be performed;
|
|
(2)
|
Hand over all the information provided by the Employer and the design documents, technical documents and other documents prepared by the Contractor for the project to the Employer. With respect to the documents retained by the Contractor, the data and backup relating to all information provided by the Employer shall be destroyed;
|
|
(3)
|
Hand over all the completed permanent work and be responsible for the permanent project materials transported to the site. Before handing over, take care of maintain and preserve the permanent project materials of the completed work and that are transported to the site;
|
|
(4)
|
Hand over the design documents, drawings, materials, operating manuals, construction organization design, quality inspection data and completion data etc.
|
|
(5)
|
Submit to the Employer all the subcontracts and explanations of their performance, including project materials provided by the Contractor (including those stored on the site, ordered, being processed, being transported, arrived at the site and to be handed over), and the amount agreed in the contract occurred before the contract termination date and assumed by the Employer. The Contractor is obliged to assist and coordinate to handle the relationship with the subcontractors who have relationship with the Contractor;
|
|
(6)
|
Upon the approval by the Employer, the Contractor shall transfer the subcontracts being performed and relevant liabilities and obligations relating to the terminated contract or part of the works within the terminated contract to the Employer and (or) the person designated by the Employer, including permanent work and project materials, as well as relevant work;
|
|
(7)
|
The Contractor will continue to perform the works under the contract that are not terminated;
|
|
(8)
|
Before the settlement relating to termination of contract is completed, the Contractor shall not evacuate and (or) remove its machines, equipment, facilities, revolving materials and other materials from the site, unless the Employer agrees.
|
|
18.1.4
|
Settlement on Termination Date
|
|
18.1.5
|
Settlement after Termination
|
|
(1)
|
According to the settlement data on termination date under Article 18.1.4, the parties shall settle the balance of receivables and payables. Thereafter, the Employer shall return the performance guarantee submitted by the Contractor according to Article 14.2.1 to the Contractor. Also, the Contractor shall return the payment guarantee submitted according to Article 14.2.2 to the Employer.
|
|
(2)
|
If there is any prepayment not yet deducted when the contract is terminated, the Employer shall make relevant deduction according to the provisions of deduction of prepayments under Article 14.3.3., and thereafter return the prepayment guarantee submitted according to the contract to the Contractor.
|
|
(3)
|
The Employer is entitled to deduct any remaining receivables balance from the performance guarantee submitted by the Contractor under Article 14.2.1, and will return the performance guarantee to the Contractor thereafter.
|
|
(4)
|
If there is any uncollected amount after the Employer make the above deduction according to the above provisions, or any remaining receivables balance when the contract does not agree submission of any performance guarantee and prepayment guarantee, the Employer may retain the machines, equipment, facilities and revolving materials etc. of the Contractor in an amount equivalent to the receivables to offset the above amounts.
|
|
18.1.6
|
Evacuation of the Contractor
|
|
(1)
|
Evacuation in case of termination of the entire contract. According to Article 18.1.5 (4), the Contractor is entitled to remove the machines by itself, equipment and facilities from the site, which are not used for offset. The Contractor shall bear the costs for removing or dismantling the temporary facilities. The Employer will provide necessary conditions therefor.
|
|
(2)
|
Evacuation in case of partial termination of the contract. When the Contractor receives the notice of the Employer to evacuate from the site, it shall dismantle and remove such excess machines, equipment and facilities from the site at its own cost (excluding the machines etc. for offset under Article 18.1.5 (4)). The Employer will provide necessary conditions therefor.
|
|
18.1.7
|
Right to continue to construct the project after termination. The Employer may continue to complete the project or entrust other contractors to continue to complete the project. The Employer and other contractors are entitled to use the handed-over permanent project materials, and the design documents, implementation documents and data prepared for the project by the Contractor, and use the facilities, machines and equipment retained for offset under Article 18.1.5 (4).
|
|
18.2
|
Termination by the Contractor
|
|
18.2.1
|
Termination by Contractor. Based on the following reasons, the Contractor is entitled to give written notice to the Employer and terminate the contract, provided that it will notify the Employer of termination 15 days before terminating the contract:
|
|
(1)
|
the Employer delays payment for no less than 60 days, or the Employer fails to notify resumption of work within 180 day after the Contractor requests for resumption of work under Article 4.6.4;
|
|
(2)
|
the Employer materially fails to perform its obligations under the contract and thus cause the Contractor to suspend working for no less than 30 days;
|
|
(3)
|
The Employer fails to submit the payment guarantee as stipulated in Article 14.2.2;
|
|
(4)
|
Force majeure events under Article 17 occur, and cause the performance of contract main obligations hereunder impossible or unnecessary;
|
|
(5)
|
The Employer goes into bankruptcy, winding up or liquidation, or there is any circumstance indicates that the Employer will go into bankruptcy and (or) liquidation, or the Employer is unable to pay the contract price.
|
|
18.2.2
|
The Contractor is entitled to cease and must carry out the following works after it issues the termination notice:
|
|
(1)
|
Stop all further works, except those for protecting life, property, project safety, clearing and necessary works;
|
|
(2)
|
Hand over the completed permanent works and project materials provided by the Contractor (including those stored on the site, ordered, being processed, being transported, arrived at the site and to be handed over on site). Before such hand-over, the Contractor is obliged to take care of, maintain and preserve the completed works and project materials purchased;
|
|
(3)
|
Hand over design documents, drawings, documents, operating manuals, construction organization design, quality inspection data and completion data etc. that are paid, completed and to be completed. Upon request by the Employer, the Contractor shall hand over to the Employer relevant design documents, drawings and materials completed and unpaid at the agreed time after it makes payment at agreed price.
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(4)
|
Submit to the Employer all the subcontracts and explanations of their performance at the cost of the Employer.
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(5)
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Upon request by the Employer, the Contractor shall transfer the subcontract to the Employer and (or) the person designated by the Employer, including permanent works and project materials, as well as relevant works;
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(6)
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Destroy all information and backup of relevant data and materials provided by Employer within the documents retained by the Contractor.
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18.2.3
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Settlement Documents on Termination Date
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18.2.4
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Settlement after Termination
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(1)
|
According to the settlement data on termination date under Article 18.2.3, the parties shall settle the balance of receivables and payables when terminating the contract. Thereafter, the Contractor shall return the payment guarantee submitted by the Employer according to Article 14.2.2 to the Employer. Also, the Employer shall return the performance guarantee submitted by the Contractor according to Article 14.2.1 to the Contractor.
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(2)
|
If there is any prepayment not yet deducted when the contract is terminated, the Employer may make deduction according to the provisions regarding deduction of prepayment under Article 14.3.3. Thereafter the Employer shall return the prepayment guarantee submitted by the Contractor according to the contract to the Contractor.
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(3)
|
If the Contractor has other uncollected receivables when the contract is terminated, it may deduct relevant receivables balance from the payment guarantee submitted
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(4)
|
If the Contractor has other uncollected receivables when the contract is terminated, and the contract did not agree to provide that the Employer shall submit payment guarantee according to Article 14.2.2, the Employer shall pay the outstanding amount and interest at the rate of similar loan for the same period issued by the People’s Bank of China, as from the next day after the settlement documents on termination date agreed by the parties according to Article 18.2.3. If the Employer fails to pay within 60 days thereafter, the Contractor is entitled to resolve such matter according to the provisions of Article 16.3 relating to dispute and arbitration.
|
|
(5)
|
If the Contractor has a balance of payment that is unable to pay to the Employer when the contract is terminated, the Employer is entitled to settle according to Article 18.1.5 (2) to 18.1.5 (4) relating to settlement after termination.
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|
18.2.5
|
Evacuation of the Contractor. After termination, the Contractor shall evacuate all other materials, machines, equipment and facilities from the site, except for those for safety.
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|
18.3
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Matters after Termination
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|
18.3.1
|
Payment agreement remains valid
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|
18.3.2
|
Dispute over Termination
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|
19.
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Effectiveness and Termination
|
|
19.1
|
Effectiveness
|
|
19.2
|
Copies of Contract
|
|
19.3
|
Post-Contract Obligations
|
|
20.
|
Supplementary Provisions
|
|
1.
|
Contract Part I Agreement :VIII Effectiveness;
|
|
2.
|
Contract Part III Special Terms: 3.1.12.1 Form and Amount of Performance Guarantee;
|
|
3.
|
Contract Part III Special Terms: 14.3.2 Payment of advance;
|
|
4.
|
Contract Part I Agreement: III. Key Milestones;
|
|
5.
|
Contract Part IV Annexes: Annex II Overall Progress Schedule of Chongqing Chip Construction Project;
|
|
6.
|
Contract Part IV Annexes: Annex III Payment Schedule
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Alpha and Omega Semiconductor Limited (the "registrant");
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Mike F. Chang
|
|
Mike F. Chang
Chief Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Alpha and Omega Semiconductor Limited (the "registrant");
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Yifan Liang
|
|
Yifan Liang
Chief Financial Officer and Corporate Secretary
|
|
a.
|
the Quarterly Report of the Company on Form 10-Q for the fiscal quarter ended
March 31, 2017
(the "Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
b.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Mike F. Chang
|
|
Mike F. Chang
Chief Executive Officer
|
|
a.
|
the Quarterly Report of the Company on Form 10-Q for the fiscal quarter ended
March 31, 2017
(the "Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
b.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Yifan Liang
|
|
Yifan Liang
Chief Financial Officer and Corporate Secretary
|