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EXHIBIT 10.12
SUPPLEMENTAL AGREEMENT BETWEEN ZINDART AND XINXING
FOR THE TERMINATION OF COOPERATIVE JOINT VENTURE CONTRACT
PARTY A: GUANGZHOU XINJIAO HUANGPU ECONOMIC DEVELOPMENT COMPANY
PARTY B: HONG KONG ZINDART ENTERPRISE COMPANY LIMITED
Party A and Party B co-operated to manage Zindart Xinxing Toy Gifts
Company Limited, a cooperative joint venture. During the joint
venture, each party abided by the principles of friendly and mutual
benefits, co-operation has been pleasant and at the same time both
parties have received satisfactory returns. Party B has now
readjusted its operational strategies. Pursuant to a board meeting
held on 10th May 1997, both parties have unanimously agreed to
terminate the cooperative joint venture contract of Xinxing Toys and
Gifts Co. Ltd. by the end of 31st December 1997. All facilities and
raw materials belonging to Party B will be transferred to the Dongguan
Factory from September till the end of December 31st 1997. Upon the
termination of the contract, both Party A and Party B shall comply
with the following provisions:
1. Establish a 6-person Liquidation Committee.
3 persons from Party A:
3 persons from Party B:
This Committee will be responsible for clearing all debts and
obligations incurred during the joint venture period,
including rent, water and electricity bills, telephone bills,
taxes and other expenses which will be paid by Party B before
December 1997 to the relevant departments.
2. The Liquidation Committee will return to the respective party
all production facilities, production tools and equipment,
office products, living facilities, transportation, fire
prevention equipment, etc., which were originally provided by
such party.
3. Finished product, semi-finished products and supplementary
materials wholly owned by Party B in the warehouse shall
belong to Party B.
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4. Party A and Party B shall jointly process the change of
customs clearance of equipment and materials, cancel import
and export contracts, clear industrial and commercial taxes,
etc., and Party B shall be responsible for all relevant
expenses.
5. In the process of clearing and returning the goods, all
immovable fixtures and fittings in the factory, dormitories
and warehouse, including the interior decoration, water and
electrical pipes, wiring, switches, lighting and lamps and
fire prevention piping shall be kept in the original good
condition and shall be returned to Party A without
consideration.
6. During the joint venture, Party B paid for all the
construction work of the factory and dormitories which will be
given to Party A without any consideration.
7. If Party B cannot remove all facilities and materials by 31st
December 1997, the factory and site then cannot be wholly
handed back to Party A. Party B will pay rent and management
fees to Party A in accordance with the contracted fees for
1997 for the period of extension required and the area used.
8. Staff originally seconded to the joint venture company by
Party A who are willing to go to the Dongguan Factory to work
will be welcome by Party B. The original salaries will not
change, but job duties have to be determined according to
factory requirements.
9. Due to the termination of the cooperative joint venture
contract, Party B shall compensate Party A a lump sum of
RMB150,000.00. Such payment shall be made after Liquidation
has been completed.
10. This Agreement and the resolution of the Board of Directors
are unanimous and shall take effect immediately upon signing
by both parties.
Party A Party B
Guangzhou Whampoa Hong Kong Zindart Enterprise Company
Economic Development Company Limited
Representative: Chop Representative: Chop
7th May, 1997
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