EXHIBIT 10.(P)
Contract for the Leasing of Plant
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PARTY A: Zhuhai City Xiangzhou District Foreign Processing Trade
Services ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Company (this is a translated name, no
official English name being given)
PARTY B: Detection Systems (HK) Limited
Based on the principle of equality and mutual benefits, Party A and Party
B have, through negotiations, agreed on a contract as follows in relation
to the leasing by Party B from Party A of Plant B at Qiansan Meixi
Industrial District, for observance by the parties:-
1. PLANT AREA, RENTAL AND DEPOSIT
(1) Party A shall lease to Party B a 6-storey Plant of an area of
7,030 square metres. For the first year, only the 1-4 storeys
of an area of 4,688 square metres shall be rented at 18
Renminbi per square metre, totalling 84,380 Renminbi, while the
5-6 storeys of an area of 2,344 square metres shall be left
vacant, monthly rental shall be at 4.65 Renminbi per square
metre, totalling 10,900 Renminbi, aggregating a monthly rental
of 95,280 Renminbi for the entire Plant. For the second year,
the entire Plant shall be rented, monthly rental shall be at 18
Renminbi per square metre, totalling 126,540 Renminbi.
Thereafter, the rental rate shall be increased by 1 Renminbi
for each subsequent year, meaning the third year rental shall
be at 19 Renminbi per square metre, and so on.
(2) Upon provisional signing of this Contract, Party B shall
immediately pay to Party A a deposit for the Plant in the
amount of 10,000 Renminbi, which sum shall be repaid to Party B
in one lump sum within 30 days after Party B has cleared and
vacated from the Plant site upon termination of this Contract.
2. WATER, ELECTRICITY AND TELEPHONE CHARGES
(1) Party A shall be responsible for the provision of electricity,
transformers, telephone lines and tap water supplies up to the
Plant wall.
(2) Upon signing of this Contract, Party A shall provide
electricity of a capacity of 500 KW for use by Party B. Party
B shall bear the costs of installing water, electricity and
telephone facilities within the Plant. However, Party B may
use the electrical facilities only after Party A and the
electricity supply bureau have examined and approved the same.
Telephone charges shall follow government rates; electricity
charges shall be at government rates plus 0.10 Renminbi for
each watt, being provision for the depreciation of the
facilities to increase capacity; water charges shall be at
standard rates applicable to industrial districts; and
management fees for security, cleaning, etc. shall be 1,000
Renminbi per month.
3. LEASE PERIOD
(1) Duration of the lease shall be 10 years, from 1 June 1995 to 31
May 2005. Upon expiration of the lease, provided that Party B
has given Party A a written request to renew the lease 6 months
prior to the expiration of this Contract, then, all terms being
equal, Party B shall have priority in continuing with the lease
for another 10 years at a rental to be agreed upon. Otherwise,
the Plant shall be returned to Party A upon expiration of this
Contract.
(2) This Contract shall be formally signed on 1 June, whereupon,
Party A shall give to Party B a 1-month rent free period for
purposes of renovating the Plant. Rental shall begin to accrue
as from 1 July.
4. CHANGES RELATING TO LESSOR AND LESSEE
(1) If Party A (lessor) transfers the ownership of the Plant to a
third party, this Contract shall continue to be valid as
against the new owner of the Plant.
(2) Party A shall notify Party B 3 months prior to selling the
Plant, and all things being equal, Party B shall have the prior
right to purchase the Plant.
(3) Party A agrees that Party B may sublease the 2 unused storeys
to a third party during the first year. The terms and
agreement for the sublease shall be agreed upon between Party B
and the third party, but the terms and agreement for the
sublease must be consistent with this Contract and must not
give rise to conflicts. Rental in excess of 4.65 Renminbi per
square metre shall belong to Party A.
5. Party A shall assist Party B in the management of matters of the
enterprise relating to such matters as personnel, finance, import
and export customs declaration for a monthly management fee of 5,000
Renminbi from the enterprise.
6. Party B shall enjoy autonomy in the administration of the Plant and
the management of its production, financial and labour matters.
7. PAYMENT METHOD
Party B shall pay to Party A before the 5th day of each month the
rental for the Plant, management fee and the previous month's water
and electricity charges. Late payment is subject to a late penalty
payment of 1% for each day. Where payment is late for more than 2
months, Party A shall be entitled to cease to supply water and
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electricity, repossess the Plant and claim for all arrears in rental
and charges, as well as penalty payments. Collection of water,
electricity and telephone charges by Party A from Party B shall be
based on bills, invoices and other related documents and in
accordance with stipulated time.
8. RESPONSIBILITIES OF PARTY A AND PARTY B
(1) For the protection of both parties, Party A shall obtain
insurance coverage for the Plant and Party B shall obtain
insurance coverage for the facilities, production materials and
other items.
(2) Party B may construct a surrounding wall and within the
enclosure build toilet, kitchen, power generator room and other
facilities, and may also make doors at the side and back of the
Plant to facilitate loading and unloading of goods and the
workers' movement. Where alteration of other parts of the
Plant is necessary, Party A's consent should be sought.
(3) Upon expiration of the Contract without renewal (or early
termination of the Contract), all renovation works and other
immovable accessory facilities injected by Party B shall belong
to Party A.
(4) During the term of the Contract, other than damage to the Plant
due to force majeure, Party B shall be responsible for all
outcome arising from its action and due to human factor.
Neither party shall be responsible to the other party in
respect of any damage to the Plant or loss caused to Party A or
Party B due to force majeure.
(5) Repairs and Maintenance during the Term of the Lease: Party B
shall take good care and make proper use of the Plant. Party A
shall provide periodical checks diligently to ensure safety of
accommodation and normal usage. Party A shall be responsible
for repair works to the Plant where these arise from Plant
design or construction problems, but where such problems are
caused by Party B's improper use or are contributory to human
factor, Party B shall be responsible for the repairs. Where it
is Party A's responsibility to do the repairs to the Plant,
Party B shall render all assistance diligently and must not
obstruct the progress of the repair works. If Party A is
genuinely unable to pay for the repair costs, the parties may
mutually agree to attend to the repairs jointly, and repair
costs paid by Party B shall in due course be offset against the
rental or be repaid by instalments by Party A. If due to Party
A's failure to carry out timely repairs to the Plant, Party B's
staff or property suffers damage, Party A shall compensate
Party B for the damage. If damage to the Plant is attributable
to Party B's responsibility, Party B shall compensate Party A
for losses suffered.
(6) Party A declares that the Plant referred to in this Contract
was constructed and operated in accordance with relevant state
policies and regulations. Party A and Party B are entering
into this Contract in accordance with and on the basis of the
current state policies and laws. In the event of new state
policies, laws or regulations being contradictory to this
Contract, hence necessitating in the
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termination of this Contract, compensation to Party B shall be
made in accordance with state policies.
(7) Party A shall assist Party B in the handling and the
importation of requisite machinery and facilities, office
equipment, raw materials, etc.
(8) To facilitate Party B's consideration and decision of plans for
the expansion of the Plant in future, Party A shall inform
Party B six months prior to the implementation of any plan to
construct buildings in the area around or near the Plant.
9. ARBITRATION
(1) If Party B wishes to terminate this Contract unilaterally
during the term of this Contract, it should notify Party A in
writing six months in advance, whereupon the parties shall
negotiate on the arrangement.
(2) Party A and Party B shall strictly observe and perform the
terms of this Contract. Neither party may terminate this
Contract unilaterally, and any breach thereof shall give the
other party the right to pursue against such breach of
responsibility.
10. SETTLEMENT OF DISPUTE
The parties may continue to negotiate and agree on any matter that
has not been dealt with herein. In case of dispute, the parties
shall endeavour to resolve the matter amicably through negotiation,
failing which, the matter may be referred to the people's court for
judgment.
This Contract shall be effective immediately upon signing by the
respective legal representatives of Party A and Party B.
Attachments herewith are:
1. boundary map showing the plane location of the Plant and occupied
area
2. plane map on the internal area of the Plant
Party A: (signed by legal representative, endorsed with company chop)
Party B: (signed by authorised representative, endorsed with company
chop)
June 1, 1995