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EXHIBIT 10.16
AGREEMENT FOR LEASE OF DORMITORY
PARTY A: GUSHU ECONOMIC DEVELOPMENT COMPANY, XIXIANG TOWN
PARTY B: HUAXUAN PRINTING COMPANY LIMITED
After the friendly negotiations between Parties A and B, due to Party B's wish
to expand the business and increase the number of employees, and because the
present dormitories of Party B cannot house the increased number of employees,
it is hereby agreed that Party A shall invest in the building of a new block of
dormitories and lease same to Party B, and the relevant rental clauses are set
out as follows:
(1) Party A shall lease to Party B a newly-built dormitory situated at the
back of Debaoli Company, Zhu-ao Shan, Gushu. After a survey conducted
by both parties, the area of the dormitory is determined to be 5,120
M2.
(2) Based on a calculation of RMB10/ m2, Party B shall pay a monthly rent
of RMB51,200 before the 15th day of each month as rent for the
previous month.
(3) The term of this Agreement is ten years from 1st September 1997 until
31st August 2007. Rent for the first to the fifth years shall be
unchanged. Rent for the sixth to tenth years shall be increased by
15% of the original base rent, i.e., RMB56,320 per month. Party B
shall not terminate this lease within the first five years after
execution of this Agreement, but may assign the lease to third
parties. After five years, Party B may negotiate for termination
where there has been a definite change in business. Party B shall
compensate Party A two months' rental if Party B proposes to terminate
the lease.
(4) Facilities for the dormitories shall include the "three basic
infrastructures", including roads, walls, and water supplies. Party A
shall be responsible for the increase of water supply up to 150 tons
per day, and Party B shall be responsible for any requirements in
excess of this amount.
(5) Party A shall be responsible for any maintenance and repairs due to
the quality of construction after the delivery of the dormitory to
Party B. However, Party B shall be responsible for the non-inherent
problems. Damages to the plastic doors in the rooms shall be repaired
and changed to wooden doors by Party A once only.
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(6) Party A shall be responsible for the application procedures for the
construction of the dormitory. Any legal disputes arising therefrom
shall be borne wholly by Party A. Party B shall not have any
responsibilities whatsoever.
(7) If Party B intends to continue this lease after expiry of this
Agreement, both parties shall negotiate for the execution of another
contract two months prior to the expiry date. Under the same
conditions, Party B shall have priority rights to lease.
(8) When Party B terminates this lease, the dormitory shall be delivered
to Party A in its original condition. Both parties shall deal with
the procedures of delivery and acceptance.
(9) This Agreement shall be effective from the date of its execution by
both parties. The agreement originally signed for the purpose of
constituting heads of agreement before the construction foundation
work is hereby voided. This Agreement has three counterparts, of
which Party B has two sets, and all sets have the same legal effect.
Party A Party B
(chop of Gushu Economic Development (chop of Shenzhen Huaxuan Printing
Company, Xixiang Town, Baoan District, Company Limited)
Shenzhen City)
Signature: Jiang Run Shen Signature: (illegible)
Dated August 1997
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