EXHIBIT 10.22
Agreement on Termination of Tangible Assets Leasing Agreement
Party A: Liuzhou Construction Machinery General Factory (the "Factory")
Party B: Liuzhou OVM Construction Machinery Co., Ltd.
Upon friendly negotiation, both parties hereby reach the following agreement on
the termination of the tangible asset leasing agreement:
1. Party A and Party B agree that the (LJ102-4) "Agreement on the Leasing of
Land, Buildings and Motor Vehicles" signed by both parties on June 5,
1995 shall be early terminated on March 1, 2000. Party B shall hand over
the tangible assets related with such Agreement to Party A on March 1,
2000. If some of the tangible assets that could not be handed over to
Party A in time, both parties shall negotiate to extend the period for
handing over.
2. As for the (LJ102-1/3) "Agreement on Leasing of Production Plant, Office
Building and Equipment" entered into between Party B and Orient Prestress
Co., Ltd. ("Orient") on December 5, 1997, the legal formalities of Orient
Prestress Co., Ltd. for terminating such Agreement shall be handled by
Party A, one of the shareholders of Orient. Shall the legal formalities
fail to be completed before February 29, 2000, Party A could, for and on
behalf of Orient, negotiate with Party B to find a way to terminate this
(LJ102-1/3) Agreement and return the tangible assets.
3. The transition period is from January 1, 2000 to February 29, 2000,
during which Party A shall still be responsible for the overall
production and management work. While relocating the equipment, Party B
shall ensure a good linking in handing over the leased assets specified
in above Clauses 1 and 2 to Party A. All the management personnel in
production and manufacturing departments who promised to remain to work
in Factory shall work under the commanding of Xxxx Xxxx Gui, with the
assistance and coordination of Wang Liu Ping, secretary of the Communist
Party Committee of Factory, so as to ensure the normal operation of the
production commanding system.
4. During this transition period, Party A shall not collect leasing charges
on the assets specified in above Clauses 1 and 2. The salaries and other
welfare of those persons who promised to remain to work in Factory shall
be paid by Party A.
5. During this transition period, for the execution of the contract signed
by both parties, Party B guarantees to finish the orders placed with it
on the basis of the quantity, delivery time and quality required by Party
A according to the normal production cycle evaluated. One third of the
inventories as at December 31, 1999 is reserved for Party A at agreed
prices, but not restrict to those under special contracts upon
presentation of the contracts signed with the customers. It shall be
coordinated and arranged through mutual negotiation. The prices are
agreed and to be settled with Party A based on 83% of the ex-factory
prices of Party B in 1999. In case Party A takes delivery of the products
processed and manufactured during the transition period, it shall be on
cash-on-delivery basis. The consideration for one third of the
inventories as at December 31, 1999 shall be settled through offsetting
the current accounts between both parties.
6. Party A and Party B shall comply the above-said clauses strictly. If
either party does not abide by the above clauses strictly or even violate
these clauses, the relation coordination group of the City Committee of
Communist Party and City People's Government shall be responsible for the
coordination and arbitration. If either party breaches the Agreement
seriously, the
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breaching party shall bear related responsibilities for its breaching of
the agreement.
Party A Party B:
Liuzhou Construction Machinery Liuzhou OVM Construction Machinery
General Factory Co., Ltd.
/s/ Xxxx Xxxx /s/ Ching Lung Po
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Xxxx Xxxx Ching Lung Po
January 6, 2000
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