Exhibit 4.4
Lease Contract
[CHINESE CHARACTERS]
Lessor: Sichuan Chengdu Export Processing Zone Investment Development Company
Limited (hereafter named as "Party A"), a corporation of the Chengdu Hi-Tech
Zone
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Lessee: PSI Technologies (Chengdu) Company Limited (proposed name) (hereinafter
named as "Party B")
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In accordance with the "Investment & Cooperation Agreement" signed between PSI
Technologies Inc (who invests in Party B through PSi Technologies China Holdings
Co. Ltd.) and the Management Committee of the Chengdu Hi-tech Development Zone
(who is in charge of Party A) on December 7, 2003, based on the principles of
honesty and equality, after friendly discussion, and in accordance with relevant
regulations as stipulated in the "PRC Contract Law", Party A and Party B hereby
sign this Contract regarding the leasing of the standard factory buildings
(Building A and Building B as described in the "Investment & Cooperation
Agreement") of Party A by Party B as follows
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1. Location of the Buildings:
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a) The Buildings refer to the No.4 and No.5 standard factory buildings
(i.e. Building A and Building B as described in the "Investment
Cooperation Agreement") which locate in Sichuan Chengdu Export
Processing Zone, #1, New Century West Road, Tianfu Avenue, Chengdu
City. (Per attached drawing.)
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2. Description of the Buildings:
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a) The total construction area of the Buildings are 5184 square meters,
among which there are 2592 square meters for each of No. 4 and No.5
standard factory building.
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b) The Land on which the Buildings are located totals 8,235 square meters
in area.
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c) If there is any difference between the agreed construction area and
the actual construction area, the actual construction area shall
control. In the event the actual construction area is smaller than the
agreed construction area, the rates payable by Party B to Party A
shall be adjusted correspondingly.
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d) The property has been installed with seven (7) connections such as
water, power, gas, drainage, sewage, telecommunications, Internet and
other accessory facilities.
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3. Period of Leasing:
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a) Period of leasing is 36 months, from January 1st of 2004 to December
31st of 2006.
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b) Should Party B decide to renew the Lease Contract when the lease
period expires, Party B should give a written notice to Party A sixty
(60) days in advance, and Party A should give 1st priority to Party B
to renew the Lease Contract under the same conditions; Should Party B
decide to terminate the Lease Contract before the lease period
expires, Party B may do so without liability provided written notice
is given to Party A sixty (60) days in advance, so that Party A can
arrange for the Buildings to be leased to other parties.
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c) During the term of lease, Party B has the right to purchase the No.4
and No.5 standard factory buildings (i.e. Building A and Building B as
described in the "Investment Cooperation Agreement") with a total area
of 5,184 square
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meters or 2,592 square meters individually, and the land use right of
land parcels with total area of 8,235 square meters.. The purchase
price for either No. 4 or Xx. 0 xxxxxxxx xxxxxxx xxxxxxxx (Xxxxxxxx X
xxx Xxxxxxxx X as described in the Investment Cooperation Agreement)
is RMB880 per square meter and for the land use rights is RMB80 per
square meter. The use right of the land is for a period of not less
than 50 years.
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4. Lease Fee and Payment:
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a) Lease Fee of Xx.0 xxxxxxxx xxxxxxx xxxxxxxx: XXX0 per square meter per
month. Total of RMB20736 per month.
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b) Lease Fee of Xx.0 xxxxxxxx xxxxxxx xxxxxxxx: XXX0 per square meter per
month. Total of RMB20736 per month. However, before Party B finishes
installing equipment in this building (upon written confirmation by
both Party A and Party B), the lease fee of this factory building is
RMB4 per square meter per month, total of RMB10,368 per month.
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c) Time of Paying the Lease Fee: Within the first 5 days of the first
month of each 3 months (which can be either cash or check. If it is
check, it should have been registered with the bank to be payable.)
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d) If Party B delays the payment of lease fee, a fine of 0.05% of the
total amount of the payable lease fee will be charged per day.
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e) If Party B raises an official request to purchase the Buildings at any
time within the 36-month lease period, the lease fee which has been
paid to Party A will be transferred in full as purchase payment.
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5. Deposit System:
a) Party B will pay RMB20,000 as the Lease Deposit to Party A within 5
days upon the signing of this Contract.
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b) The execution of item 5a) is the condition of the effectiveness of
this Contract.
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c) The Lease Deposit will be transferred as Lease Fee when Party B pays
the 1st installment of Lease Fee. The 1st installment of Lease Fee is
RMB73,312 (equivalent to RMB20,736 X 3 lease fee for No. 4 building +
RMB10,368 X 3 lease fee for No. 5 building - RMB20,000 lease deposit)
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6. Delivery of the Buildings
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a) Party A will deliver the Buildings and Land to Party B within 5 days
upon Party B's payment of the Lease Deposit, in a state acceptable to
Party B. Further, the Buildings and Land will be free and clear from
all occupants and garbage at the expense of Party A. Party B should
check the attached facilities of the Buildings, and proceed with a
formal transfer procedure with Party A.
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7. Maintenance and Management of the Buildings
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a) Within the Lease Period, the maintenance of the Buildings will be
jointly managed by both the Xxxxxx and the Lessee. The main structure
of the factory buildings, the building surface, the doors and windows,
and the original facilities and pipes inside the factory buildings
will be maintained and repaired by Party A according to a schedule and
standard acceptable to Party B. If any malfunction occurs, Party B
shall inform Party A to repair without undue delay and in any event no
later than 5 working days, and the total costs and expenses shall be
borne by Party A; however, if the malfunction is caused by Party B's
inappropriate usage or damage, then Party
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B will be responsible to repair and bear the repairing expenses. In
the event Party A fails to repair the malfunction within the specified
time period, Party B may deduct the expenses incurred by it in
repairing the malfunction from the lease fee payable to Party A.
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8. Property Management:
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a) Party B shall follow relevant regulations (per Attachment I) of Party
A, and pay Property Management Fee to Party A. Property Management Fee
will be RMB1 per month per square meter construction area, total of
RMB5,184 per month. Time of paying the Property Management Fee should
be the same as the time and schedule of paying the Lease Fee. However,
before equipment is installed into the No.5 standard factory building
(Building B), Party A shall not charge Party B for its Property
Management Fee. In exchange for the Property Management Fee, Party A
commits to provide garbage disposal and outside factory security
services to Party B.
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b) Party B shall pay water and electricity fees per the actual
consumption to the water and electricity supply companies every month.
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9. Purpose of the Buildings:
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The Buildings are only used for the processing of Party B's products within
the approved scope of business, and its offices.
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10. Warranties:
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a) Party A hereby guarantees that it has full authorizations, power and
rights to
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lease or sell the Buildings and Lands and the use right of the Land to
Party B. In addition, it has full rights and authorizations to
execute, deliver and perform this Contract.
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b) Party A guarantees that no litigation, arbitration, disputes or other
legal administrative procedures is pending or threatening, which is
related to all the pieces of Land or Buildings leased or sold to Party
B. Nor is there any mortgage created in favor of any bank, company or
person, or lease or any other interest held by any third parties
attached to the Buildings and the Lands.
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c) Party A shall assume and pay all taxes and fees with respect to Party
B's acquisition and lease of the use right of every piece of Land.
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d) Unless otherwise expressly provided for herein, Party B may use the
buildings and Land freely and legally without any other additional
charges or taxes, unless in the case of taxes as mandated by relevant
regulations or laws.
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e) Party A, as the legitimate holder and xxxxxx of the Buildings, shall
not unreasonable interfere or exclude the rights of Party B under this
Contract when Party A excises its right to the Buildings and Land,
including but not limited to:
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(i) Without prior written consent from Party B, Party A shall not
transfer or lease to any third party the Buildings and Land.
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(ii) Without written prior consent from Party B, Party A shall not
mortgage all or any part of the Buildings and Land for the
interest of itself or any other third party.
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11. Rights and Responsibilities of both Parties:
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a) Party A has a responsibility to keep confidentiality of the business
secrets of Party B. Before obtaining the prior written consent of
Party B, Party A shall not disclose them to anybody.
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b) Party B has right to establish new buildings, structures and install
facilities equipment on the Land without an increase in the lease fee,
provided that the cost for construction of the new buildings shall be
borne by Party B.
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c) Party A shall handle all legal procedures with respect to
verification, change or extension of the Real Estate Property Right
Certificate and Certificate for Use of State-owned Land during the
lease term.
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d) Party A is responsible for filing the Contract with relevant PRC
authorities at its cost.
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e) Provided that Party B pays the rent and performs and observes the
terms and conditions herein contained, Party B shall peaceably hold
and enjoy the leased Buildings throughout the Lease Period without any
interruption by Party A or any other person except as required by the
law of the People's Republic of China.
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f) Should Party B need to refurnish the Buildings, Party B shall firstly
request to Party A. After sending the Refurnishing Plan and obtaining
the approval from Party A, Party B can refurnish. Party A shall not
refuse such request of Party B if without an appropriate reason. When
the refurnishing team enters the site, the refurbishing team shall pay
RMB5,000 as Guarantee Fee to Party A. This Guarantee Fee will be
refunded in full by Party A to the team if the refurnishing team does
not damage any of Party B's assets and Party A's building structure
and layout. Rubbishes of the refurnishing will be placed in a
designated place as Party A will assign. After the refurnishing
project, Party B shall clean and ship away the rubbishes, or ask Party
A to clean and ship away the rubbishes with a Cleaning and Shipping
Fee.
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[CHINESE CHARACTERS]
g) When Party B returns the Buildings to Party A upon the expiry of the
Lease Period, if Party A requests for returning the Buildings per
their original condition, Party B shall return them per their original
condition, except for normal tear and wear. If Party A requests that
some furnishing facilities are irremovable and belong to Party A,
Party B agrees that no fee will be charged.
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h) Should Party B decide to set up any advertisement board or other
popularizing boards on the Buildings, Party B shall firstly apply to
Party A and obtain Party A's approval.
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i) Party B has the right to deduct from the Lease Fee any subsidy or
rebate (such as the power subsidy fee rebate and the training fee
subsidy) committed by the Management Committee of the Chengdu Hi-Tech
Zone ("CDHT") to PSi Technologies, Inc. ("PSi") in the Investment &
Cooperation Agreement signed between CDHT and PSi on December 7, 2003
and any of its amendments, additions, deletions or subsequent
Contracts as may be agreed between both parties.
[CHINESE CHARACTERS]
12. Renege Responsibility:
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a) Party A shall provide a copy of its Property Management Regulations
and other related regulations to Party B prior to the execution of
this Contract for Party B's review. If Party B finds anything
unreasonable or abnormal in such regulations, the Parties shall agree
to make any amendments thereto before execution of this Contract. Any
amended and restated regulation as agreed upon by the Parties shall
have the binding force upon the Parties. Further, Party A shall inform
Party B of any and all future amendments,
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additions or deletions to the Property Management Regulations
subsequent to the execution and effectiveness of this Contract, at
least 30 days prior to the effectiveness of such amendment, addition
or deletion. If Party B does not follow Party A's Property Management
Regulations which Party A considers a serious violation or causes
negative effect to the management of the whole region, Party A shall
formally inform Party B in writing of its violation and allow Party B
to rectify the violation within 30 days from the receipt of the formal
notice. If after the 30-day period, Party B does not rectify the
violation, then Party A has the right to apply to the Court to dismiss
this Contract and ask for compensation from Party B.
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b) Unless as provided in this Contract, if either Party A or Party B
fails to perform its obligations hereunder, it shall constitute a
breach of this Contract and the defaulting party shall undertake the
liabilities for such breach. The parties agree that the party in
breach shall pay the other party the direct loss and damage. If party
A is in any breach of this Contract and does not rectify within 7
days, then Party B is entitled to withhold or deduct the rent as well
as management fees, or terminate this Contract immediately upon a
written notice to Party A.
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c) If Party A delays to deliver the Buildings for use by Party B
according to this Contract, Party A shall pay a fine of 1% of the
total amount of half-year lease fee and property management fee for
each day of such delay.
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13. Electricity Supply:
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a) Party A shall provide electricity for Party B's office, lighting, and
facilities as agreed to ensure the normal operation of Party B's
business.
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[CHINESE CHARACTERS]
b) Should Party B decide to buy a transformer from power bureau to add
its power supply, Party A shall ensure the completion of the
construction of such transformer within 30 days upon Party B's
obtaining the approval of power bureau.
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c) Party A will provide an electricity capacity of 300 kva with the
necessary cables shall connect it with the red-line border of the land
for the startup period of Party B for 1 year from the date on which
Party B starts its business operating.
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d) Party A will, at Party B's option, provide an additional 200 kva
transformer. However, the cost of necessary cables shall be borne by
Party B.
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e) Party A will be responsible for the coordination of 13% tax refund of
the water and electricity fees for the processing of the exported
products of Party B.
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f) Party A will provide a power subsidy of 10% based on the actual
power consumption expenses (gross amount before tax rebate) to Party B
for the first five (5) years from the date of issuance of Party B's
business license; the rate subsidy will be changed to 5% for the
following five (5) years afterwards. Such subsidy will be payable
within one (1) month from the payment of the xxxx to the power bureau.
In the event the subsidy has not been paid within the one (1) month
period, Party B shall deduct the outstanding subsidy from the lease
payment or purchase price of the land and buildings. Such deduction
shall not form part of the calculation for the purchase amount of the
land and factory, as specified in Article 3C and 4E.
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14. Force Majeure
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If because of any event of force majeure, including without limitation,
explosion, fire lightning strike, earthquake, hurricane, war, riot, civil
disturbance or strike, or the enactment, rescission or amendment of any law,
regulation, rule or decree of any Chinese Government authority, a party is
unable to continue to operate or otherwise perform its obligations hereunder for
a period of more than thirty (30) days, then the other party may terminate this
Contract by thirty (30) days prior written notice to the first party, provided
that the cause for termination has not been remedied within the thirty (30) day
period of notice. Upon such termination, Lessee shall be entitled to a refund of
the rent for the remainder of the then current rental period, for which Lessee
has already paid, and both Xxxxxx and Lessee shall be released from all further
obligations in connection with this Contract, save those in connection with
which amounts were due and owing and not yet paid prior to the event of force
majeure.
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15. Applicable Law
The formation of this Contract, its validity, interpretation, execution and
settlement of any disputes arising hereunder shall be governed by and construed
in accordance with the laws of the People's Republic of China.
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16. Dispute Resolution
In the case of disputes arising over this Contract or any matters related
hereto, the parties shall negotiate in good faith to resolve such disputes. If
such negotiation fails within a 60-day period, the parties shall submit the
dispute to an arbitration panel in Singapore for arbitration in accordance with
the Arbitration Rules of the United Nations Commission on International Trade
Law (UNCITRAL) in effect at the time of the dispute. The decision of the
arbitrage body is final and shall be binding on the parties hereto.
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17. General Provisions
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(a) Effectiveness
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This Contract shall become effective upon seal and signature of both
Parties and payment of the lease deposit.
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(b) Non-Assignability
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This Contract and the rights and obligations hereunder shall not be
assignable by either Party without the prior written consent of the
other Party, except that a party may assign this Contract to the
successor of all or substantially all of its business assets or an
Affiliated Company without such consent.
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For the purposes of this Contract, an Affiliated Company shall mean
any legal entity that either Party may delegate and/or assign all or
part of the performance of its rights and obligations hereunder,
wherein at least fifty one (51) percent of the voting shares (or
similar voting rights), now or hereunder owned or controlled, directly
or indirectly by Party B or Party A, as the case may be, or in which
Party B or Party A, as the case may be, otherwise has the ability to
direct the management, but such legal entity shall be considered to be
an Affiliated Company only for so long as such control exists.
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(c) Most Favorable Treatment
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Party A undertakes to make its best efforts to help Part B to obtain
the most favorable treatment in PRC as a wholly owned foreign
enterprise in Hi-Tech Zone during the term of this Contract, while
realizing that relevant PRC laws and regulations may be amended from
time to time.
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(d) Entire Contract
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This Contract shall constitute the entire Contract between the parties
hereto, with the exception of the Investment & Cooperation Agreement
signed by the Management Committee of the Chengdu Hi-Tech Zone and PSi
Technologies, Inc., and any and all amendments, additions or deletions
as may be agreed by CDHT or PSi, which forms the basis of this lease
contract.
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(e) Validity of the Contract
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If any provisions contained herein become illegal under PRC laws
during the term of this Contract, the parties shall, through friendly
negotiations, reach supplemental Contracts. The invalidity, nullity
and unenforceability of any provision hereof shall not influence or
prejudice the validity, effectiveness and enforceability of other
provisions hereof.
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(f) Termination
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Party B has right to terminate this Contract without liability upon
the provision of a sixty (60) day prior written notice to Party A,
notwithstanding any provision or article in this Contract.
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18. Copies of Contract
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a) There are total four (4) copies of this Contract. Each Party shall
keep two (2) copies, which are equally authentic.
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b) The Attachment of this Contract (after being approved and signed by
both Parties) and Additional Contract are equally authentic as this
Contract.
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Party A (with stamp): Sichuan Chengdu Export Processing Zone Investment
Development Co., Ltd.
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Representative (signature):
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Phone: 0000 0000
[CHINESE CHARACTERS] 8532 1798
Address: Xx.0, Xxx Xxxxxxx Xxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxxx Xxxx
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Date:
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Party B (with stamp): PSI Technologies (Chengdu) Xx.Xxx
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Representative: Xxxxxxx X. Xxxxx (signature):
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Phone: 00000000
[CHINESE CHARACTERS] 85331476
Address: Xx.0, Xxx Xxxxxxx Xxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxxx Xxxx
[CHINESE CHARACTERS]
Date:
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