FACTORY BUILDING LEASE AGREEMENT
June 19, 2006
FACTORY BUILDING LEASE AGREEMENT
Party A: WUXI LONGHUA STEEL PIPES COMPANY LIMITED (lessor)
Party B: WUXI SEAMLESS OIL PIPES COMPANY LIMITED (lessee)
After friendly consultation about the lease of land, factory building and
auxiliary equipment, the Parties hereby agree as follows:
I LOCATION, AREA, STRUCTURE AND APPLICATION OF LAND, FACTORY BUILDING AND
AUXILIARY FACILITIES
1. Location of land and factory building
The factory building located at #25 Plot, Development Zone, Xinqu, Wuxi,
Jiangsu.
2. Area, structure and application of land and factory building
The land area is about 24 mu; the area of construction of the leased factory
building is 8,911.86 square meters and the area of construction of the
three-storey office building is 592.4 square meters (thus the aggregate area of
construction is 9,504.26 square meters).
The workshop is a steel structure and the office building is a frame structure.
They shall be used as the production factory of Party B.
II RENTAL FEE, USE TERM AND PAYMENT TERMS FOR THE LAND, FACTORY BUILDING AND
AUXILIARY FACILITIES
1. Party A agrees to lease the land, factory building and auxiliary
facilities to Party B and Party B agrees to accept the lease.
2. Rental fee
The rental fees for the factory building and auxiliary facilities is RMB 15 per
square meter per month (including the land use fees) and the total amount per
month is RMB 142,563.9 (RMB ONE HUNDRED AND FORTY-TWO THOUSAND FIVE HUNDRED AND
SIXTY-THREE YUAN AND NINETY CENTS).
The lease period of the factory building is two years (from September 1, 2006 to
August 31, 2008). Upon the expiry of this lease agreement, Party B shall return
the factory building to Party A. If Party B intends to renew the lease, Party B
shall contact Party A for consultation 2 months prior to the expiry date and
sign another agreement with Party B. In that case, Party B has priority to lease
the factory building.
3. Payment terms of rental fee
Both Parties agree that the first payment date of the rental fee is September 1,
2006. To reduce the capital pressure on Party A, Party B shall pay the rental
fee at the beginning of each half year by check.
III INFRASTRUCTURES OF LEASED FACTORY BUILDING
Party A undertakes to provide the following infrastructure to the leased factory
building (they shall be connected to the factory building).
1. Electricity: electricity for living. Party A shall be responsible for
applying for the industrial electricity and Party B shall assist Party A
in the application.
2. Water supply: water for living and fire control. 500 tons per month.
3. Telephone line: Party B shall be responsible for the application.
In case the capacities of the above equipment need to be increased, the various
construction expenses and equipment expenses for the increase shall be borne by
Party B.
IV. OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES DURING THE LEASE PERIOD
1. Obligations and responsibilities of Party A during the lease period:
1.1 Within 3 days from the payment date of the down payment by Party B, Party
A shall deliver the factory building to Party B for its normal use.
1.2 During the lease period, Party A shall keep the factory building in good
condition and ensure normal use by Party B.
1.3 Party A shall assist Party B in handling the application formalities
necessary for company incorporation and normal production and operation.
2. Obligations and responsibilities of Party B during the lease period:
2.1 Party B shall pay the rental fees within the agreed time limit of this
Agreement.
2.2 In case Party B intends to modify and decorate of the factory building or
add facilities, it shall first obtain the written approval of Party A and
[complete] the relevant approval formalities, with the expenses to be
borne by Party B.
2.3 In case Party B intends to transfer the lease to a third party or exchange
the factory building with a third party, Party B shall obtain the prior
approval of Party A.
2.4 In case Party B damages the factory building due to improper use or other
causes, it shall be responsible for the compensation or repair.
2.5 Party B shall assist Party A in performing reasonable inspection and
repair of the factory building
3. Default Liabilities: in case either Party fails to perform the obligations
under this agreement or violates the relevant national and local
provisions on real estate contracts, the other Party may cancel this
Agreement in advance and the Party violating this Agreement shall be the
responsible for all incurred losses. In case Party B fails to pay the
rental fees for more than ten days, Party A shall charge Party B 1% of the
annual rental fee as a penalty for each day overdue.
VI FORCE MAJEURE
In case the leased factory building and facilities are damaged due to force
majeure (such as an earthquake, typhoon or flood), neither Party shall bear
responsibility to the other.
VII. MISCELLANEOUS
1. Any disputes arising from or in connection with this Agreement shall be
settled by both Parties through friendly consultations.
2. During the lease period, in case new taxes are levied due to changes in
national policies, they shall be borne by the Parties as stipulated.
3. The Parties hereto may have additional consultations about affairs not
mentioned herein; supplemental agreements to this Agreement shall be of
equal force with this Agreement after the application of seals by both
parties.
4. This Agreement is made in four copies with each Party holding one copy and
the other two copies submitted to relevant authorities.
5. The Parties hereto have caused this Agreement to be executed by their
legal representatives or authorized representatives; after that, Party A
shall handle the registration formalities regarding lease contracts with
the local competent authorities.
This page is for the signature of the lease for land, factory building and
auxiliary facilities for Wuxi Seamless Oil Pipes Company Limited.
Party A: WUXI LONGHUA STEEL PIPES Party B: WUXI SEAMLESS OIL PIPES
COMPANY LIMITED COMPANY LIMITED
(Seal) (Seal)
------------------- -------------------
Authorized Representative: /s/ Authorized Representative: /s/
-------- ---------
Date: June 19, 2006
(The special seal for the registration of
real estate lease in Wuxi New Development
Zone Real Estate Management Bureau)