EXHIBIT 10(iii)
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ NEW CITY CENTRE LOT #PI
AGREEMENT
Based on the principle of mutual benefits and by means of friendly consultation,
Shilong Town House and Properties Corporation (referred to as Party A hereafter)
and Honpar (Huangzhou) Properties Ltd. of Hong Kong (referred to as Party B
hereafter) have agreed to invest jointly in the Shilong Town New City Centre Lot
#PI. This agreement is established to this end:
Article One
Party A and Party B have agreed to develop the Shilong Town New City Centre Lot
#PI in Shilong Town, Dongguan, Guangdong and to operate the development therein.
Article Two
The scope of this project is to develop, construct, sell, rent and operate the
following items in the core of the Dongguan Shilong Town New City Centre Lot
#PI: single family dwelling units, offices, commercial/ residential dual purpose
building, service-style residential units, Chinese and Western style restaurant,
Karaoke bar, night club, tennis court, swimming pool, bowling alley, gym,
laundry mat, integrated shopping mall, supermarket, product showroom and
integrated service facilities. The scope of operation in the second phase shall
include these additional items: guest rooms, sauna, etc
The purpose of this project is to provide residential units, service-style
residential guess rooms, offices, restaurant service, shopping and integrated
service facilities to foreign personnel in China, business travelers, overseas
Chinese visitors, Chinese from Hong Kong and Macao and other visitors and
businesses from abroad.
Article Three
The location of this project is the Dongguan Shilong Town New City Centre Lot
#PI. This project is to be implemented in phases in accordance with an overall
master plan. Applications for the pertinent approval documents and operation
permits shall be filed on a phase by phase and item by item basis. (The company
with the required operation permit shall be referred to as "The Joint Venture
Company" hereafter.)
The lot area involved in the multipurpose building component of this project is
appropriate 4,130 square meters (AM2") . The building area is approximately
16,000 M2. (The final measurement shall be based on the building plan and the
design papers approved by the administrative authorities of Dongguan.)
The lot area involved in the entertainment centre component of this project is
approximately 3,600 M2 . The building area is approximately 10,000 M2 . The
first phase of construction is targeted for completion in approximately two
years.
The lot area required for other buildings in this project is approximately
48,000M2, of which 2,100 M2 is for the first phase. The building area is
approximately 40,000 M2 to 62,000 M2, (the final measurement to be based on the
building plan and the design papers approved by the administrative authorities
of Dongguan), of which 5,000 M2 is for the first phase. The first phase is
targeted for completion in approximately two years. When 70% of the first phase
has been rented and/or sold, the second phase is to begin. The entire project
is targeted for completion in approximately ten years.
The Joint Venture Company has the status of a corporation in the People's
Republic of China, and is under the protection and jurisdiction of the law of
the People's Republic of China. It also enjoys the favorable treatments granted
to Chinese-Foreign joint venture companies (and Three Capital Enterprises).
Article Four
The total investment in this project is approximately two hundred and fifty
million RMB (V250,000,000.00), of which sixteen million and eight hundred
thousand RMB (Y 16,800,000.00) is for the entertainment centre component in the
phase.
Party A's share of investment shall be in the form of the Shilong City Centre
Lot #PI, which has an area of 57,500 M2 , valued at fifty million RMB,
equivalent to a 20% share. Party B shall put in two hundred million RMB and
shall have an 80% share. Both parties shall put in their respective share of
investment in phases. In the first phase, Party A shall put in 3,864 M2 of
land, valued at three million three hundred and sixty thousand RMB, which is
equivalent to a 20% share. Party B shall put in thirteen million four hundred
and forty thousand RMB, which is equivalent to 80% share.
Article Five
The registered capital for the first phase of this project shall be eleven
million seven hundred and sixty thousand RMB (V11,760,000.00). Party A shall put
in its share of investment in the form of 2,705 M2 of land, valued at two
million three hundred and fifty thousand RMB (Y2,350,000.00). During the first
phase, Party A shall, according to the needs of the development project, put in
an additional 159 M2 of land, valued at one million and ten thousand RMB
(YI,010,000.00). Party B shall put in nine million four hundred and ten thousand
RMB (y9,410,000.00), of which the first installment of one million and one
hundred and forty thousand RMB (VI, 140,000.00) shall be put in by Party B
within three months after obtaining the operation permit. Party B is
responsible for raising an additional four million and thirty thousand RMB
(Y4,030,000.00), over and above the registered capital, as additional funds to
be put in according to the needs of the project.
Article Six
In this project, Party A shall provide the Shilong Town New City Centre Lot #PI,
the area of which is approximately 57,500 M2 (of which the first phase shall
have an area of 3,864 M2); the land use right shall be for 50 years (70 years).
In addition, Party A shall be responsible for the requisition of the land, the
land requisition cost(s), and for the costs of hook up/installation for three
utility services and land levelling to the building line. In the project, Party
B shall be responsible for raising and putting in the entire amount required for
construction (including the fees for obtaining the certificate of land use right
for state-owned land, municipal coordination fees and the administration fees
collected by the city government and the township government). For this
project, Party A shall not be reimbursed for the price of the land, and Party B
shall not be reimbursed for the construction fees.
2. The land use term for the multipurpose building and entertainment
centre is 50 years; the land use term for other buildings is 70 years.
3. Both parties have agreed that the initial phase of this project shall
include a multipurpose building, a hotel, service-style residential units,
single family dwelling units, and a commercial/residential dual purpose
building, etc(subject to modification due to market demands upon the approval of
the Board of Directors).
4. As to the multipurpose building and the entertainment centre, Party B
shall be responsible for the costs of the elevator(s), fire safety costs, and
the costs for furnishing the outside wails as well as the public areas of the
buildings. (Party B shall not be reimbursed for these costs.) The remainder of
the furnishing costs shall be paid for by the Joint Venture Company. The
various components failing within this venture may be leased, in part or in
whole, to one or more third party operators (in which case the leasees shall in
turn assume the costs of furnishing).
5 . For all other buildings (including service-style residential units,
single family dwelling units and the commercial/residential dual purpose
building), a separate portfolio file for each phase shall be prepared to reflect
the market demands. Once Party B has ascertained and confirmed that a portfolio
file reflects the standard rent and selling price, any amounts in excess of the
standard furnishing costs (including capital portion and interest) may be
recouped by Party B in stages.
6. As to the portion of each phase of this project to be rented and sold and
the prices thereof, the General Manager shall, based on market demands, prepare
a proposal for execution upon the approval of the Board of Directors.
7. The profit generated by this project (i.e. for the multipurpose building,
entertainment centre and rental buildings: revenue minus operating costs; for
the remainder of the project: revenue minus costs incurred in sales) shall first
be used to repay the following: the principal of and interest on the bank loan
for running capital (not including construction costs), the principal and
interest on the government administration fee(s) which Party B put in (including
the fees for obtaining the certificate of land use right for state- owned land,
municipal coordination fees and the administration fees collected by the city
government and the township government), the capital put in by Party B for the
business operation (from the time of the signing of the contract to the
completion of the first phase). After the above repayments, taxes shall be paid
according to the pertinent regulations on the remaining amount. The after tax
profit shall be distributed between Party A and Party B, whereby Party A shall
have 20%, and Party B shall have 80%.
8. In the event of pre-selling while the project is still in the
construction phase, Party A and Party B have agreed to abide by the following
provision:
While pre-selling abroad (in such areas as Hong Kong, Macao and Taiwan), Party B
shall deposit the pre-sale amount in the bank account at a bank designated by
Party A and Party B upon mutual agreement. The bank account shall be located in
Hong Kong and shall be in the name of the Joint Venture Company. Two
signatures-one from an appointed representative from Party A and one from an
appointed representative from Party B-are required for withdrawal. While
pre-selling in the People's Republic of China, the pre-sale amount shall be
deposited in the Joint Venture Company account in a bank in China. ln the event
that the Joint Venture Company has to utilize the pre-sale amount, both parties
have agreed that payments be made according to the following principles (neither
side may refuse to pay):
0.1 Construction costs and furnishing costs: including design fees, building
project fees, costs of materials, costs of facilities, facility installation
charges, costs of enhancing the hydro and electricity capacity, supervision
fees, furnishing fees, Party B's administration fees, the various construction
related fees charged by the authorities, and so on.
0.2 Sales and Marketing Costs: advertising and agency fees, etc
0.3 Other Costs: including legal fees, bank charges and insurance premium,
etc
0.4 The remaining amount shall be distributed according to the stipulation
in point 7) of this article.
Article Seven
The term for the entire joint venture project is 70 years, in that the joint
venture term for the component involving the multipurpose building and
entertainment centre is 50 years and the joint venture term for the other
buildings is 70 years. The joint venture term commences on the date on which
the Joint Venture Operation Permit is issued.
Article Eight
In addition to the stipulations in the other provisions of this agreement, the
joint venture parties shall fulfill the following obligations:
Party A:
1) shall be responsible, on behalf of the Joint Venture Company for filing
the required applications to the pertinent Dongguan authorities, obtaining
approvals for contracts and company bylaws, obtaining registration and business
licenses, etc. for the different phases of the project.
2) shall be responsible for reporting to the pertinent Dongguan authorities
regarding the construction projects and for obtaining the engineering/
construction project permit, building permit, and construction permit, etc.
3) shall be responsible for providing the land use right for the 4,130
M2 of land located at the Dongguan Shilong Town New City Centre Lot #PI and for
the 3,864 M2 of land for the entertainment centre. In addition, Party A shall
also be responsible for obtaining other certificates and documentation papers,
and shall obtain the certificate of land use right for state-owned land within
three months after the Joint Venture Company has obtained its operation permit.
The remainder of the land for other buildings shall be subdivided in eight
phases; Party A shall provide the land use right for each phase as the project
progresses and shall obtain for each phase the certificate of land use right for
state-owned land.
4) shall complete the hook up/installation of the three utility services
and the land leveling work within one month after Party B has put in its first
installment of funds. As to the land for other buildings, Party A shall be
responsible for completing the hook up/installation of the three utility
services and the land leveling work for each phase within one month after
obtaining the land use certificate for that phase.
5) shall assist the Joint Venture Company in the purchase, in China, of
materials and supplies required for the construction work of this project.
6) shall assist the Joint Venture Company in handling and making proper
contacts for the hook up/installation of the five utility services (hydro,
plumbing, electricity, communications, and public antenna) and municipal
infrastructure.
7) shall assist the Joint Venture Company in handling the custom declaration
and custom exemption application procedures for the import of required
materials, equipment, machines etc. and in obtaining the required import
permits.
8) shall assist in the arrangement of entry visas, work permit and travel
papers for personnel from Hong Kong.
9) shall assist in other matters as entrusted by the Joint Venture Company.
Party B:
1) shall be responsible for putting in the first installment of
registered capital according to the stipulated time frame in this contract, and
for putting in the rest of the registered capital according to the needs of the
development and the progress of the construction project(s).
2) shall produce preliminary plan(s) as per the requirements of the Dongguan
planning authorities.
3) shall assist the Joint Venture Company in such matters as the handling of
construction project approval application.
4) shall be responsible for the purchase of materials and equipment,
etcfrom abroad.
5) shall be responsible for the planning, development and operation of
this project.
Article Nine
The Board of Director for this project shall consist of seven members. Party A
shall appoint two members; Party B, five members.
Article Ten
The Joint Venture Company shall establish an entity for the operation and
administration of this project. This operational and administrative entity is
responsible for the planning and day to day operation of the construction
project(s), and shall have a General Manager. Party B shall recommend a
candidate for the General Manager position, and the Board of Direct shall carry
out the hiring. The term for the position is four years.
Article Eleven
In the event that either party fails to fulfill any of the obligations in this
contract, such that this contract may not be realized in part or in whole, such
eventuality shall constitute a breach of contract. The party in breach of
contract shall assume the responsible for the breach, and shall compensate the
other party for financial losses resulted from the breach both directly and
indirectly.
Article Twelve
Both parties may, at any time, consult with each other on any outstanding
matters concerning the project, and may, at any time, provide amendment and
elaboration to this agreement. Amendment may be made in writing with signatures
from both parties.
Article Thirteen
Six exact duplicate copies of this agreement will be made, three copies for
Party A and three copies for Party B. The six duplicate copies shall be equally
valid.
Party A: Party B:
Shilong Town House and Properties Honpar (Huangzhou) Properties Limited of
Corporation of Dongguan Hong Kong
Name of Representative: Name of Representative:
CHEN, Jiannng ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
Position: Manager Position: President
Signature: Jiannng Chen Signature: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
Witnesses:
Government of Shilong Town, Dongguan
Secretary: Town Mayor:
YUAN, Houzhi ▇▇▇▇▇, Zhuoxi
November 29, 1995 November 29, 1995