EXHIBIT 4.20
TRANSLATION
TENANCY AGREEMENT OF XXX XXXX BUILDING
Party A: Kwanasia Electronics Co. Ltd.
Legal representative: Tam Man Chi
Address: Xxxx 00-00, 00/X., Xxxxx Xxxx Xxxx Xxxxxx, 151-153 Hoi Bun Road,
Xxxx Xxxx, Kowloon, Hong Kong.
Party B: Dongguan Xxxxxx On Xxx Xxxx Electronics Development Co.
Legal representative: Xxxx Xxx Chun
Address : Xxx Xxxx Building, Siu Pin Second Industrial Zone, Xxxxxx On,
Dongguan.
Upon five years co-operations of Party A and Party B and the build up of mutual
confidence and interest of both parties, the Parties agree to the following:
Party A will lease from Party B all the premises in the Siu Pin Second
Industrial Zone, Xxxxxx On, Dongguan of Party B (except those for Party B's own
usage) for the manufacturing, office and dormitory uses. In order to clearly
clarify the rights and obligations of both parties during the tenancy period,
both parties agree to sign this agreement with terms as follows: -
1. TERMS OF TENANCY
1. The construction standards of the leased premises: factory, office
and dormitories are of steel and xxxxxxx building structure; factory and
office are of water-polished stone, aluminium windows, outside wall of
tiles, lift of 2 tons capacity,: dormitories are with lavatories, steel &
wood windows, floors with tiles, provision of water, electricity, fire
alarm and canteen facilities.
2. The rental areas of the leased premises are as follows:
(1) Factory: The floor areas of 1/F to 6/F is 993.62 square meters per
floor. The total area is 5,961.72 square meters.
(2) Office: The floor areas of 2/F to 6/F is 574.10 square meters for
2/F and 564.31 square meters for 3/F to 6/F. The total area is
2,831.34 square meters. Party A can use the office premises as
dormitories if the change in usage will not affect the external
appearance of the building.
(3) Dormitory: The floor areas of 1/F, 2/F-7/F is 569.71 square meters
for 1/F, 589.71 square meters for 2/F-7/F. The total area is
4,107.97 square meters.
(4) Guard Room and Lobby: the floor area is 126.60 square meters, the
area of the electrical meter room of the office building is 60.16
square meters, deducting 80 square meters for Party B's usage, the
total area is 106.76 square meters.
Total aggregate floor areas is 13,007.79 square meters.
2. TENANCY PERIOD AND TERMINATION
1. The tenancy period is for three years, commencing from 15 February
2000 to 14 February 2003. The rental will remain unchanged for these
three years.
2. Before the expiry of the tenancy and without the agreement of both
parties, any one of the parties cannot terminate the agreement
before the expiry date.
3. Upon the expiry of the tenancy, Party A can under the equal
conditions have priority to renew for a further 3 years period. The
rental will be according to local market conditions. The renewal
agreement must be negotiated two months in advance of the expiry
date and must be signed 15 days in advance of the expiry date.
3. RENTAL AND PAYMENT METHOD
1. The rental charge is fixed with reference to the 1999 4th quarter
market price of factory, office, dormitory of Dongguan Xxxxxx On
District and after giving special discount. The agreed rental is
RMB8.50 per square meter. Party A must pay Party B the rental charge
of RMB110,560.00 on or before 5th of each month.
2. Party A should pay the water and electricity charges for previous
month on or before 5th of each month. The amount should be paid with
reference to the actual consumption and the fee schedule of the
local government.
4. GUARANTEE DEPOSIT AND PAYMENT
1. According to normal practice and to protect the property safety,
unity and rights of Party B, Party A has to pay rental guarantee
deposit. The amount is one month's rental amount. Both parties agree
that the Party A shall pay Party B the guarantee amount of
RMB110,560.00 in one payment and within five days after signing the
agreement.
2. Upon expiry of the tenancy agreement, if Party A do not lease the
premises from Party B and after Party B's satisfactory examination
and receipt of the leased premises, the guarantee amount will be
refunded to Party A free of interest. If Party A caused any damage
to the premises, Party B is entitled to deduct from the guarantee
amount the loss amount and if the guarantee amount is insufficient
to compensate the loss, Party B is entitled to claim the
insufficient amount from Party A.
5. RIGHTS AND OBLIGATIONS OF PARTY A
1. Party A has the rights of usage of the premises during the tenancy
period, he can run his business according to laws. Also, he has the
rights of requesting and supervising Party A to supply water and
electricity services to guarantee normal manufacturing conditions of
Party A.
2. Party A has to comply with the agreed usage of the premises and
protect the premises and both parties' images. Party A cannot alter
the usage and construction structure of the premises. If Party A has
intentionally made any losses to the premises and facilities to
Party B, Party A shall restore the premises and facilities to normal
conditions and compensate Party B any economic losses resulted.
3. Party A can decorate or alter the structure of the premises or can
change the usage according to its operation needs. However, all
these must obtain the prior approval from Party B in writing. In
order to guarantee the safety and unity of the building, all
alteration projects shall be under the supervision of the
construction team of Party B and the charges incurred shall be borne
by Party A.
4. Party A manufactures electronics products in the premises and
guarantee the production will not have poisonous chemical release
and cause serious noise to the environment.
5. Party A shall comply with government fire regulations, have set up
fire team responsible for fire safety and prevention works, have
bought necessary fire prevention and protection facilities and
co-operate with Party B is this respect.
6. Party A is responsible for the guard of security, safety and hygiene
work inner the building.
6. RIGHTS AND OBLIGATIONS OF PARTY B
1. Party B is responsible for the repairs of the building. Party B
shall inspect and maintain the building and facilities half-yearly
in order to protect the production, living safety and normal
operation of Party A.
2. Party B shall approve the water and electricity demands of Party A.
Party A has preliminary confirm the electricity power supply unit of
315kv and water supply of 6000 tons. The above the supplies shall be
charged according to Dongguan Xxxxxx On government units' standard
tariff. Party A is required to pay any charge for the extra
electricity capacity. If the water and electricity demand exceed the
approved amount, Party A has to pay for the excess capacity. Party B
is responsible for the expenses of future fire facilities purchase
and installation.
3. Party B has to assist Party A for the registration and related
external co-ordination work.
7. SURRENDER RESPONSIBILITY
1. During the tenancy period, if any party terminates the agreement
before the expiry, the party has to pay the full rental compensation
up to the expiry date to the other party.
2. If Party B does not repair the premises upon request or on schedule
according to this agreement, Party B has to pay an amount of 50% of
the monthly rental as surrender money. If Party A has suffered from
any body injury or property damages accordingly, then Party B is
obliged to compensate for these losses.
3. Under the following the conditions, Party B is entitled to terminate
this agreement and request surrender of the property by Party A and
to receive compensation by deducting the losses from the guarantee
amount. If the guarantee amount is insufficient, Party B is entitled
to claim the insufficient amount from Party A:
(a) Without the approval from Party B, Party A sub-lets, transfers
or lends the premises to third party;
(b) Party A causes serious noise or chemical pollution to the
environment exceeding government limits.
(c) Party A carries out illegal activities in the said premises,
and it causes harm to the public or third party,
(d) Party A does not pay monthly rental for over 1 month.
8. NO RESPONSIBILITY
If the premises were destroyed by any uncontrollable reasons or if Party A
or Party B has suffered any losses caused by such uncontrollable reasons,
neither Party is responsible for this.
9. SETTLEMENT OF ARGUMENT
If there shall be any dispute arising through fulfillment, it should be
solved by the discussions and negotiation of the parties. If there shall
be no agreement made in negotiation, mediation can be made through the
Management Department of the property or prosecution can be made in the
Peoples' Court.
10. CO-OPERATION
1. Except those agreed in this agreement, both parties shall base on
friendly, mutual benefit principles, to discuss the co-operations in
other matters.
2. As Party B is now in preliminary stage of its business development
and is in a strict financial status, Party A agrees, under the same
conditions, to assist and support Party B, so that Party B can
become a small real manufacturer.
11. SUPPLEMENTS
1. If there shall be anything that is not provided for by this
Agreement, the parties can make any supplement after negotiation and
according to the "The People's Republic of China Economic Agreement
Law" and related rules, and the supplement shall have the same
validity as this Agreement.
2. This Agreement shall be effective from the date of payment of the
guarantee amount by Party A to Party B.
3. This agreement is in quadruplicate. Party A and B shall each have
two copies, all of these having equal validity.
Party A: Kwanasia Electronics Party B: Xxx Xxxx Electronics
Company Limited Development Co. Ltd.
Company Chop of Kwanasia Electronics Company Chop of Xxx Xxxx
Company Limited Electronics Development Co. Ltd.
Legal Representative: Legal Representative:
Tam Man Xxx Xxxx Xxx Xxxx
(Signed) (Signed)
Date: 18 January 2000 Date: 18 January 2000
SUPPLEMENTARY AGREEMENT FOR LEASING
Both parties, through negotiations, agree the following supplementary agreement:
1. Deduction from aggregate floor areas: 2/F of office building (574.10
square meters) (already rented out) 3/F of office building (564.31
square meters) (afforded by Xxx Xxxx)
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The new rented area is: 13,007.79 - 574.10 - 564.31 = 11,869.38 square
meters The new monthly rental is: 11,869.38 x 8.5 = 100,889.73 DOLLARS
All other terms will be executed according to the original contract.
2. Having considered that the factory has been used for more than 6 years,
there are many damages, Xxx Xxxx Co. requests the decoration company to
provide quotation. The basic maintenance charge is DOLLARS THREE HUNDRED
THOUSAND. Both parties have the responsibility to maintain and take care
the factory, therefore, they reached the following agreement: Xxx Xxxx
Company will pay DOLLARS TWO HUNDRED THOUSAND and Kwanasia Company will
pay the 2002 rental for one time, the interest thereon will be around
DOLLARS ONE HUNDRED THOUSAND, then Xxx Xxxx Company will be responsible to
maintain the factory, any insufficient amount will be borne by Xxx Xxxx
Company.
3. This supplementary agreement will takes effect from January 1, 2002.
Xxx Xxxx Electronics Kwanasia Electronics Co. Ltd.
Development Co. Ltd.
Company Chop of Xxx Xxxx Company Chop of Kwanasia
Electronics Development Co. Ltd. Electronics Co. Ltd.
Legal Representative: Legal Representative:
Xxxx Xxx Xxxx Xxx Man Chi
(Signed) (Signed)
Date: 30 December 2001 Date: 31 December 2001
