EXHIBIT 10.8
SUPPLEMENTAL AGREEMENT FOR THE CONSTRUCTION AND DEVELOPMENT
OF "TIENS YIHAI INDUSTRIAL PARK PROJECT"
Party A: Shanghai Xxx Xxx Jiao Industrial Park Economic Development Ltd. Company
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Address: 201 Zhu Feng Road, Xxx Xxx Jiao Town, Qing Pu District,
Shanghai Statutory representative: Pu, Qigang
Contact person: Pu, Qigang
Contact method: (000) 00000000
Party B: Tianshi International Holdings Group Ltd. Company
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Address: British Virgin Island
Statutory representative: Li, Jinyuan
Contact person: Dai, Lunzhang
Contact method: (000) 00000000
Party C: Xxx Xxx Jiao Townhouse, Qing Pu District, Shanghai
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Address: 145 Xxx Xxxx Road, Xxx Xxx Jiao Town, Qing Pu District,
Shanghai
Contact Person: Zhu, Juxing
Contact method: (000) 00000000
Due to the changes in the national land policies, Party A and Party C are facing
financing problems on relocation compensation. In order to smoothly carry
forward Tiens Yihai Industrial Park Project (hereinafter referred to as the
"Project"), through friendly negotiation, and on the basis of "Shanghai Xxx Xxx
Jiao Industrial Park Tianshi Industrial Base Investment Agreement" (hereinafter
referred to as the "Original Investment Agreement"), and "Tiens Yihai Industrial
Park Project Construction and Development Agreement" (hereinafter referred to as
the "Original Construction and Development Agreement", hereinafter the two
agreements are jointly referred to as the "Original Agreement"), Party A, B and
C have reached this agreement, as the supplemental agreement to the original
agreement (hereinafter referred to as the "Agreement").
Article 1. Party A, B and C reaffirm the legality and validity of the Original
Agreement, the Agreement has the same force effect as the Original Agreement. If
there is any conflict between the two agreements, the Agreement shall govern.
For items not included in the Agreement, refer to the Original Agreement.
Article 2. Land area and layout
2.1. Party A and Party C undertake, on the 324,514 square meters (486.8 mu) of
the approved land (HuQingFuTu [2004]400), to carry forward the Project according
to the layout for the production and operation demand of Party B. The land area
for the non-manufacturing establishment shall be at least 15% of the total land
area, and the limitation can be appropriately more flexible. Manufacturing
establishments include, but are not limited to, the building and facilities of
production plants, warehouses, research & development center, training center,
office buildings, and so on, which either directly or indirectly are for the
manufacturing.
2.2. Party A and Party C undertake to reserve the land, of which the area is in
accordance with the area determined in the Original Construction and Development
Agreement, for the use of the continuing development of Party B.
2.3. Due to the decreased construction scale of the Project, the productivity,
production value, sales revenue and investment scale of the Project shall be
scaled down accordingly.
Article 3. Term loan agreement and secured loan agreement
3.1. Party B shall loan XXX 00 million to Party C, for the purpose of relocation
compensation. Party C shall pay interest to Party B at a rate that is equal to
the contemporary interest rate published by the People's Bank of China. Party C
shall make a priority loan repayment with the tax income from the following
resources: a. tax income from the trading company of Party B,; and b. all the
remaining tax income of the town, which is from the Project after it is put into
production; and c. at least 50% of the remaining tax income of the district,
which is from the Project after it is put into production.
The repayment for the principal and interest of the loan shall be calculated
quarterly commencing from the fist month of the loan.
3.2. Party C shall obtain a loan of XXX 00 million from a financial institution,
for the purpose of relocation compensation. Tianshi Group (affiliated company of
"TBV") provides a non-preferential credit guarantee obligation for the loan.
Article 4. Procedures
4.1. Party A and Party C shall be responsible for all of the procedures
regarding land approval and project construction, which are Government
related, the need in respect of construction period Party B shall also be
satisfied by Party C. Party B shall assist Party C on, but not limited to:
a. Approval for the general layout of the approved land;
b. Approval for the extended project
c. Obtaining the license for the construction project layout
d. Obtaining Land-use Rights
e. Obtaining permission for construction
4.2. Party B shall actively speed up the construction, and cause the project to
be built up and put into production.
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Article 5. Payment
5.1 Payment for the land-use right transfer: the price of the approved land of
324,514 square meters (including 17,742 square meters for projected roads,
22,395 square meters for green land, 30,514 square meters for projected river
ways, and 253,863 square meters as transferred land) shall be RBM36,000 per mu
(a Chinese area unit, 1 mu=666.6 square meters) pursuant to the original
agreements. The total price of the whole land shall be RBM17,524,000. The
actually available area of the land shall be subject to the number confirmed by
the Report of the Mapping Bases regarding Buildings and Land, which is issued by
a Governmental Department.
5.2 Payment made by Party B: According to the Original Agreement and relevant
progresses, as of the date when this Agreement is signed Party B has paid
RMB29.7 million to Party A and Party C. Therefore, as of the date when this
agreement is signed Party B has paid off an amount of RMB17,524,000 for the
land-use right transfer. Party A and Party C shall be responsible to return the
excessive payment of RMB12,176,000 to Party B.
5.3 The conditions and timing of the transactions, relating to the loan provided
by Party B to Party C, the loan secured by Tianshi Group for Party C, and
excessive payment returned by Party C and Party A to Party B, shall be as
follows:
5.3.1 Tianshi Group shall provide a loan guarantee procedure for the loan of
RMB50 million provided by a bank to Party C within one week after signing this
Agreement;
5.3.2 Party B shall provide one half of the loan, which is RMB25 million, to
Party C within ten bank working days after signing this Agreement;
5.3.3 Party B shall provide the second half of the loan, which is RMB25 million,
to Party C within ten bank working days after Party A and Party C obtain a
license for the construction layout for this project. Simultaneously, Party A
and Party C shall return Party B the excessive payment of RMB12, 176,000; and
5.3.4 Party B undertakes to submit its layout scheme to Party C prior to 31st
December 2006.
Article 6. Responsibilities of each party
6.1 Responsibilities of Party B:
(1) Party B shall make full payments timely according to the terms of this
Agreement;
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(2) Party B undertakes to strengthen its trading business during the
period of constructions and to ensure an increase to a relative big
extent comparing to the existing basis; and
(3) Party B undertakes that the local authority will receive additional
tax income from this Project after the project is put into production.
6.2 Responsibilities of Party A and Party C:
(1) Party A and party C undertake to disassemble and remove all existing
buildings and facilities on this land no later than 30th June 2007.
The excess of time limit or that disassembly is not in conformity with
the agreements, Party A and Party C shall bear a penalty for breach of
contract, which is 1% of the total price of the land that has been
actually transferred.
(2) Party A and Party C undertake each preferential tax policy and each
other preferential policy stipulated by the State, which has been
granted to Party B under the original agreements, are all unaltered.
Article 7. Responsibility of Breach of Contract
The Agreement will be effective from the date of sealing and signing. Each party
shall abide by the Agreement. The party, which breaches the Agreement, shall
bear all responsibilities and compensate all losses borne by non-breaching
party/parties.
Article 8. Arbitration
During the execution of this Agreement, if any dispute arises and the parties
cannot come into a solution, the dispute shall be submitted to the China
International Economy and Trading Arbitration Committee for arbitration.
Article 9. Other
The parties may conclude supplementary agreements for the matters that are not
certified under the Agreement. The supplementary agreements shall be as valid as
the Agreement.
This Agreement shall be signed in nine counterparts and each party holds three
counterparts. Each counterpart has the same validity.
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Stamped by Party A:
Signed by the statutory representative: /s/ Pu, Qigang November 10, 2006
Stamped by Party B:
Signed by the statutory representative: /s/ Li, Jinyuan
Stamped by Party C:
Signed by the statutory representative: /s/ Zhu, Juxing November 10, 2006
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Power of Attorney
Zhu, Juxing is full authorized to sign the agreement regarding the construction
and Development of Tianshi Health Industrial Park Project.
[Seal] Xxx Xxx Jiao Townhouse, Qing Pu District
November 10, 2006
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