Exhibit 10.33
Factory Lease Advanced Agreement
This Factory Lease Advanced Agreement (this "Agreement") is entered into among
Sang ▇▇▇▇ ▇▇▇▇ ("SC Park"), Young ▇▇ ▇▇▇ ("▇▇ ▇▇▇"), ▇▇▇▇ ▇▇ Park ("▇▇ ▇▇▇▇")(SC
Park, ▇▇ ▇▇▇ and ▇▇ ▇▇▇▇ shall be referred to collectively as the "Lessors")
▇▇▇▇▇▇ Automation Asia, Ltd. (the "Lessee") and ▇▇▇▇▇▇ Automation Korea, Inc.
("BAK")(collectively, the "Parties").
Article 1. Purpose
The purpose of this Agreement is to set forth the rights and obligations of the
Parties in relation to the performance of the construction by the Lessors as
described in Article 2 below (the "Construction"), the lease agreement to be
entered into between the Lessor and the Lessee for the factory to be made
pursuant to the Construction (the "Factory") and the land upon which the Factory
will be located (the "Lease Agreement"), the amendment of the existing lease
agreement between SC Park and the Lessee, and the existing lease agreement
between SC Park and BAK, and the termination of the existing lease agreement
among SC Park, ▇▇ ▇▇▇ and the Lessee, pursuant to the Lease Agreement.
Article 2. Construction
(1) The Factory shall be constructed upon the land located at 400-2, Gomae-ri,
Kiheung-eup, Yongin, Kyunggi-do (the "Construction Site"), which is owned by SC
Park and ▇▇ ▇▇▇, in order for the Lessors to lease the Factory to the Lessee as
provided in Article 5, and the period for the Construction shall be from April
14 to August 30, 2005 (the "Construction Period").
(2) The detailed matters relating to the Construction shall be in accordance
with the design plan and construction schedule chart separately agreed between
the Lessors and the Lessee, as attached hereto (hereinafter the "DP/CSC"), and
any matters not set forth in the DP/CSC shall be separately agreed between the
Lessors and the Lessee.
Article 3. Performance of Construction By Lessors
(1) In performing the Construction, the Lessors shall faithfully observe the
requirements under the DP/CSC, and shall fully complete the Construction within
the Construction Period provided in Article 2.
(2) In this Agreement, "full completion" of the Construction shall mean that the
Factory has been constructed and has passed inspection by the Lessee as provided
in Article 4, that approval has been granted for use of the Factory by the
relevant governmental authority pursuant to the Construction Act, and that all
governmental permits and licenses have been acquired by the Lessors as required
for land and building owners under relevant laws and regulations.
Article 4. Inspection By Lessee
(1) At any time as deemed necessary in relation to the performance of the
Construction, the Lessee may request the Lessors to confirm whether the
Construction is proceeding in accordance with the DP/CSC, and upon such request,
the Lessors shall forthwith comply with the request in good faith.
(2) In the event the Lessee discovers pursuant to the confirmation under
paragraph (1) above that the Lessors are performing the Construction in a manner
different from that which is set forth in the DP/CSC, and requests correction
thereof, the Lessors shall comply with such request and forthwith take
corrective measures.
(3) The Construction shall be completed in accordance with the details set forth
in the DP/CSC by August 30, 2005, and upon completion, the Lessors shall request
the Lessee in writing to perform inspection of the Construction.
(4) Within 1 week of the date of request made by the Lessors under paragraph 3
above, the Lessee shall perform inspection of the Construction and notify the
Lessors in writing as to the results thereof (inspection passed or supplemental
work necessary).
(5) In the event that the Lessee requests supplemental work on the Construction
to be performed pursuant to paragraph 4 above, the Lessors shall forthwith
perform supplemental work on the Construction as requested, and upon completion
of such supplemental work, the Lessors shall request the Lessee in writing to
re-inspect the Construction. Paragraph 4 shall apply in the same manner in the
case of re-inspection, and if the Lessee shall supplemental work again after
re-inspection, this paragraph 5
shall apply once again.
Article 5. Execution of the Lease Agreement
(1) Forthwith upon full completion of the Construction, the Lessors shall enter
into the Lease Agreement with the Lessee in respect of the Factory and the
Construction Site.
(2) The amount of security deposit under the Lease Agreement shall be 1 billion
Won; provided, however, that 830 million Won of the amount of advanced payment
made pursuant to Articles 6 and 8 shall be applied towards such security deposit
and only the remaining amount of 170 million Won shall be paid at the time of
entering into the Lease Agreement.
(3) The term of lease under the Lease Agreement shall be 10 years.
(4) Prior to the execution of the Lease Agreement, the Lessors shall extinguish
the keun mortgage existing upon the Construction Site, and the building owned by
SC Park and ▇▇ ▇▇▇ which is to be torn down pursuant to Article 8, which was
established on January 9, 2004 up to maximum amount of 1,040,000,000 Won, and
naming Kookmin Bank as the keun mortgage holder and ▇▇ ▇▇▇ as the debtor.
(5) Simultaneously with the execution of the Lease Agreement, the Lessors shall
register chonsekwon upon the Factory and the Construction Site for the
protection of the Lessee's rights under the Lease Agreement, naming the Lessee
as the holder of such chonsekwon, in the amount of 1 billion Won and with an
effective period of 10 years.
(6) The amount of rent and other terms and conditions of the Lease Agreement
shall be agreed at a later time upon discussion between the Lessors and the
Lessee.
Article 6. Advanced Payment
(1) In order that the Lessors may perform the Construction smoothly, the Lessee
shall, subject to Article 9, pay 600 million Won of the security deposit under
the Lease Agreement to the Lessors as advanced payment, of which 300 million Won
shall be paid on May ___, 2005 and 300 million Won shall be paid on July 1,
2005.
(2) The Lessors shall not use the amount of advanced payment under paragraph 1
above for any purpose other than the Construction, and such amount of advanced
payment shall be applied towards the security deposit to be paid under the Lease
Agreement upon execution thereof.
Article 7. Amendment of Existing Lease Agreements Between SC Park and the
Lessee, and BAK
(1) The lease agreement entered into between SC Park and the Lessee with respect
to the 1st, 2nd and 4th floors of the building located at ▇▇▇-▇, ▇▇▇▇▇-▇▇,
▇▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇, Kyunggi-do, and the lease agreement entered into between SC
Park and BAK with respect to the 3rd floor of the same building, shall be
amended simultaneously with the execution of the Lease Agreement.
(2) In amending the lease agreements described in paragraph 1 above, the lease
terms thereunder shall be amended such that they are of the same period as the
lease term under the Lease Agreement. Other detailed provisions to be amended
shall be agreed between SC Park and the Lessee, and BAK, and shall be in
accordance with the Lease Agreement.
Article 8. Termination of Existing Lease Agreement Between ▇▇ ▇▇▇ and the Lessee
(1) Forthwith after the Construction has passed inspection by the Lessee under
Article 4, the Lessors shall tear down the temporary building owned by SC Park
and ▇▇ ▇▇▇ and existing at the Construction Site, and immediately after such
temporary building has been torn down, shall apply for use approval regarding
the Construction with the relevant governmental authority pursuant to the
Construction Act.
(2) Simultaneously with the commencement of tear down work on the temporary
building described in paragraph 1 above, the existing lease agreement entered
into among SC Park, ▇▇ ▇▇▇ and the Lessee in relation to such temporary building
shall be terminated; provided, however, that of the security deposit under such
existing lease agreement, 230 million Won shall be regarded as applied towards
the security deposit under the Lease Agreement instead of being returned to the
Lessee, and simultaneously with the termination of the existing lease agreement
stipulated in this paragraph 2, such
amount shall be regarded as paid in advance to the Lessors.
Article 9. Establishment of Keun Mortgage
(1) For the purpose of securing the rights of the Lessee to the advanced
payments under Articles 6 and 8 and other claims that the Lessee acquires
against the Lessors under this Agreement, the Lessors and the Lessee shall
establish a keun mortgage upon the Factory Site naming the Lessee as creditor,
up to the maximum amount of 900 million Won. All costs and expenses relating to
the establishment of such keun mortgage shall be borne by the Lessee.
(2) The Lessors shall transfer all documents needed by the Lessee to establish
the keun mortgage described in paragraph 1 above, simultaneously with the
initial payment of 300 million Won of the advanced payment to be made under
Article 6.
(3) The keun mortgage described in paragraph 1 above shall extinguish
simultaneously with the establishment of chonsekwon upon the Factory and the
Construction Site in favor of the Lessee pursuant to Article 5 paragraph 5.
Article 10. Prohibition on Transfer and Other Disposition
(1) The Lessors shall not, without the prior written consent of the Lessee,
transfer, lease or otherwise dispose of the Factory Site, or allow a mortgage or
any other security interest to be established upon the Factory Site. Further,
the Lessors shall not transfer or otherwise dispose of any of its rights under
this Agreement, or establish a pledge or any other security interest upon such
rights.
(2) The obligations of the Lessors under paragraph 1 above shall remain
effective even after execution of the Lease Agreement.
Article 11. Termination of Agreement
(1) In any of the following cases, the Lessee may terminate this Agreement
forthwith upon written notice thereof to the Lessors, without demand for cure or
any other prior procedures:
1. In case where a Lessor breaches this Agreement and fails to cure such
breach within 3 days after a request for cure has been made by the Lessee
in writing;
2. In case where either existing lease agreement under Article 7 has not
been amended in breach thereof, or the temporary building under Article 8
has not be torn down in breach thereof;
3. In case where the Construction is not fully completed, or the Lease
Agreement or amendment of the lease agreement under Article 7 is not
executed, by September 30, 2005, regardless of the reasons; and
4. In case where application has been made for attachment, provisional
attachment, provisional disposition, compulsory auction or other actions of
similar legal effect of the Factory Site or the Factory, or work-out,
bankruptcy, commencement of corporate reorganization proceedings or similar
proceedings with respect to a Lessor.
(2) Forthwith upon termination of this Agreement pursuant to paragraph (1)
above, the Lessors shall return the full amount of advanced payment made by the
Lessee pursuant to Articles 6 and 8.
(3) The termination of this Agreement shall have no effect upon the existing
lease agreements described in Articles 7 and 8.
Article 12. Dispute Resolution
The Seoul Central District Court shall have exclusive jurisdiction over any
dispute arising out of or in relation to this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the Parties in 5
original copies, with each Party holding 1 copy.
May ____, 2005
Sang ▇▇▇▇ ▇▇▇▇ [SEAL]
/s/ Sang ▇▇▇▇ ▇▇▇▇
------------------------------------
Resident Registration Number _______
------------------------------------
[Address]
Young ▇▇ ▇▇▇ [SEAL]
/s/ Young ▇▇ ▇▇▇
------------------------------------
Resident Registration Number _______
------------------------------------
[Address]
▇▇▇▇ ▇▇ Park [SEAL]
/s/ ▇▇▇▇ ▇▇ Park
------------------------------------
Resident Registration Number _______
400-2, Gomae-ri, Kiheung-eup, Yongin,
Kyunggi-do
▇▇▇▇▇▇ Automation Asia, Ltd.
Representative Director ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ [SEAL]
▇▇▇-▇, ▇▇▇▇▇-▇▇, ▇▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇, Kyunggi-do
▇▇▇▇▇▇ Automation Korea, Inc.
Representative Director ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ [SEAL]
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇-▇, ▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇: design plan and construction schedule chart
(Unit: Won)
------------------------------------
Remarks
------------------------------------
will be increase 6% annually
Key Money(Refundable Deposit)
------------------------------------
