Exhibit 10.18
Shen (Nan) C No. 0603880
HOUSE LEASE CONTRACT
Formulated by the Shenzhen Urban Planning & Land & Resources Bureau
HOUSE LEASE CONTRACT
Lesser (Party A): China Great Wall Computer Shenzhen Co., Ltd,
Great Wall Technology Limited
Address: 2 Kefa Road, Technology Industrial Park, Nanshan
District, Shenzhen City
House lease permit No.: Not Applicable
Authorized agent: Not Applicable
Address: Not Applicable
Lessee (Party B): Advance Energy Industries (Shenzhen) Co., Ltd
Address: 000, Xxxxx Xxxxxxxx, Xx. 0000, Xxxxxxx Xxxx,
Xxxxxxxx Xxxx
Business license or ID number:
This contract is made in accordance with stipulations of the Regulations of
Shenzhen Special Economic Zone on House Lease and the implementation rules
thereof by and between Party A and Party B through consultation. The parties
agree as follows:
Article 1. Party A will lease to Party B for the latter's use the premises
located on the 3rd floor (four stories in total), Factory Building #1 of the
Great Wall Technology Building, Sci-tech Industrial Park, Nanshan District,
Shenzhen City. The total leased construction area is 8135.36 square meters.
Article 2. The lease period of the premises of Party B shall be 5 year(s) and
month(s), starting on the 16th day of April, 2003 and ending on the 15th day of
April, 2008.
Article 3. The premises leased by Party A to Party B shall be used for
manufacturing and general office purpose.
If Party B intends to use the rented premises for other purpose, written
approval shall be first obtained from Party A and Party B shall in addition
complete approval formalities in connection with the alteration of premises use
as per relevant laws and regulations and ensure that relevant State regulations
on fire safety are complied.
Article 4. Party A shall guarantee that the purpose of the premises as listed in
article 3 conform to the stipulations of relevant laws, regulations and rules.
Party B undertakes that his actions during the use of the leased premises will
conform to the stipulations of relevant laws, regulations and rules.
Article 5. The unit rent of the leased premises shall be ________ RMB Yuan (in
words) per square meter per month, and the total monthly rent shall be
_________________________________________________ RMB Yuan (in words), where
rent payable to Great Wall Technology is ________ RMB Yuan, and rent to Great
Wall Computer is _________ RMB Yuan.
Party B shall pay the rent to Party A before the ____ day of every and each
month (the ____ day of the _____ month of each quarter).
( LEFT BLANK FOR ARTICLE 5. TO REFER TO ADDITIONAL CLAUSES 4 AND 5.)
Article 6. Party A shall deliver the leased premises to Party B before the day
of the 16th day of January, 2003.
Should Party A fail to deliver the leased premises by the above-mentioned date,
Party B shall be entitled to request extension of the contract period which
shall be confirmed by signatures of both parties.
Article 7. During the term of the lease, house property tax, land use fees of
the leasehold, premises lease administration fee and other taxes shall be borne
by Party A; expenses for water, power, cleaning, management fee of the premises
(building) and communication fees shall be borne by Party B.
Article 8 (deleted)
Article 9. A guarantee money is permitted under this contract. Upon delivery of
the leased premises, Party A may demand from Party B a payment amounting to 1.5
months' rent, that is four hundred twenty-seven thousand eight hundred
ninety-four RMB Yuan (in words) as guarantee money.
Party A shall issue a receipt to Party B for the guarantee money paid by
Party B.
Both parties shall perform the articles agreed upon under this contract; and the
Party in default shall bear liability for breach of contract in accordance of
the law.
Article 10. Party A shall ensure for the safety of the premises and the interior
facilities and the conformity with requirements of relevant laws, regulations
and rules. Party B shall use the facilities within the premises in a normal way,
protect and safeguard them against damages from unusual application. Upon
termination of this contract, Party B shall immediately return the premises and
ensure for the intactness of the premises and the internal facilities (except
for normal wear and tear), and pay up all charges and fees borne by Party B.
Article 11. During the utilization of the leasehold, upon damage or failure of
or occurring to the leased premises or/and their internal facilities which may
affect safety or the normal use thereof, Party B shall immediately notify Party
A and take effective measures; Party A shall carry out maintenance thereof
within 1 day(s) after receipt of Party B's notice; If Party B can in no way
notify Party A or if Party A refuses to undertake maintenance, Party B may,
after examination and certification by the registry organ of this contract,
carry out repair and maintenance on behalf of Party A.
The maintenance and repair costs (including those for maintenance carried out by
Party B on behalf of Party A) shall be borne by Party A.
Article 12. Party B shall be responsible for the repair and maintenance of
damages, of the premises or the failure or faults of their internal facilities
caused by the improper or unreasonable use of Party B. In case Party B refuses
to repair or compensate, Party A shall, after examination and certification by
the registry organ of this contract, conduct maintenance on behalf of Party B;
the expenses incurred thereby shall be borne by Party B.
Article 13. During the term of this contract, rebuilding, expansion, or
decorating of the leased premises by Party A, if reasonably necessitated, may be
carried out by Party A with approval from Party B and after obtaining permit
from relevant governmental departments, on which an extra agreement in writing
shall be signed by both parties.
Article 14. Without prior written consent from Party A, Party B shall not
sublease the leased premises, whether in whole or in part, to any third Party.
Sublease with approval from Party A shall be registered with the administrative
department for leased houses, but the sublease shall not expire later than the
original expiry date of this Contract. Party B shall warrant that the leased
premises will not be further subleased by his sublessee.
Article 15. During the term of this contract, if Party A needs to sell any or
all parts of the leased premises, Party A shall notify Party B one month in
advance, and Party B shall have a preemptive to buy the leased premises under
the same conditions.
Should the premises be sold to others, Party A shall assure continued
performance of this contract by the purchaser.
Article 16. During its term, this contract will automatically terminate in any
of the following events:
(1) Non-performance of contract caused by force majeure or accidental events;
(2) Leased premises must be demolished because governmental decision of
requisition of the land on which the premises are built.
Article 17. Party A may terminate this contract under the following events;
Party B shall compensate Party A for any loss caused to Party A thereof:
(1) Party B has not paid rent for more than one month(s);
(2) All aggregate outstanding payment of Party B amounts to more than thirty
thousand Yuan;
(3) Party B uses the leased premises for other purposes without neither consent
from Party A nor approval from relevant department;
(4) The leased premises or facilities have been seriously damaged as a result of
Party B's default of maintenance responsibility or payment of repair fees in
violation of article 12 hereunder;
(5) Renovation of the leased premises by Party B without prior written consent
or approval from relevant department; and
(6) Party B has subleased the leased premises to others without written consent
from Party A.
If under above circumstances, this contract is dissolved by Party A on its part,
a written notice shall be issued to Party B, who shall vacate and return the
leased premises to Party A; any balance of advanced payments of Party B shall be
refunded to Party B; notwithstanding the foregoing, the guarantee money may be
withheld by Party A.
Article 18. Party B may terminate this contract under the following events and
be compensated by Party A for any loss caused to Party B thereof:
(1) Party A has delayed delivering the leased premises to Party B for more than
one month(s);
(2) Party A's violation of article 4 herein makes it impossible for Party B's
continuous use of the leased premises for the intended purpose;
(3) Party A's non-performance of the maintenance responsibility or payment of
repair charges in breach of article 11 herein makes it impossible for Party
B to continue the lease of the premises;
(4) Party A has rebuilt, expanded or renovated the leased premises by without
consent from Party B or approval from relevant department.
If for any of the above reasons, Party B unilaterally terminates this contract,
a written notice shall be issued to Party A immediately; Party B shall vacate
the leased premises without delay and shall have the right to demand payment of
double guarantee money, the amount of eight hundred fifty-five thousand seven
hundred eighty-eight RMB Yuan (in words) as liquidated damages, as well as
refunding of any balance of advanced payments.
Article 19. Upon the expiry of the contract term, if Party B needs to further
rent the houses, Party B shall propose to Party A his wish of renewal within one
month before the expiry; if Party A intends to continue leasing the premises,
Party B shall have preemptive right to rent the premises under the same
conditions.
When agreement is reached on renewal of lease, a new contract shall be entered
by both parties, to be registered again with contract registry organ.
Article 20. After expiry of this contract, Party B shall vacate and return to
Party A the leased premises within 10 days after termination. Party B fails to
vacate and return the leased premises, Party A can bring legal actions against
Party B with the people's court.
Article 21. Party B shall pay Party A for any overdue rent a late payment fee at
a daily rate of 3% of the monthly rent for the overdue amount.
Article 22. If Party B subleases any or all parts of the leased premises without
Party A's approval, Party B shall pay Party A a penalty fee of seventy RMB Yuan
(in words) for every square meter subleased per month (day).
Article 23. Either party in default of the obligations hereunder, which leads to
loss to the other party, shall compensate the other party for any actual loss
and predictable gains.
Article 24. Any addition or deletion to this form contract by the parties can be
listed in the annex, which is as equally authentic as this contract.
Any matter not covered by this contract can be consulted by and between both
parties and dealt with in supplementary agreement, which shall be registered
with the original contract registry organ and shall be equally effective as this
contract.
Article 25. Any disputes between the parties arising out of the performance of
this contract shall be resolved through consultation, or upon failure of such
effort, be submitted to the registry organ of this contract for conciliation or
(X) submitted to Shenzhen Arbitration Commission for arbitration; or
( ) litigation with the people's court. (The parties shall choose either one of
the above two methods and tick in the square where appropriate).
Article 26. This contract shall be rendered in Chinese text, with copies in
English language.
Article 27. This contract is in quadruplicate, one copy (copies) to be held by
Party A, one copy (copies) to be held by Party B, one copy (copies) for the
contract registry organ, and one copy (copies) for the relevant departments.
Article 28. This contract is effective upon the date of signing.
Party A (seal or signature):
Legal representative:
Contact telephone:
Bank A/C:
Authorized agent (seal or signature):
Party B (seal or signature):
Legal representative:
Contact telephone:
Bank A/C:
Authorized agent (seal or signature): on
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Registered by (seal or signature): on
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On behalf of contract registry organ (seal or signature): on
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Additional Clauses
1. The Real Property Ownership Certificate
(1) (Shenzhen Xxx Xxxx District Science and Technology Industry Park Great
Wall Science and Technology Development and Production Base #1 Plant) (1#
Plant") was built and owned by Great Wall Science and Technology Stock
Company ("Great Wall Technology") and China Great Wall Computer Shenzhen
Stock Company ("Great Wall Computer"). Great Wall Technology has entrusted
Great Wall Computer as its agent to "lease, operate and manage" its share
in the 1# Plant (The Power of Attorney is attached herewith)
(2) The Real Property Ownership Certificate has not been granted yet. Party A
promises that it will be responsible for all the losses caused to Party B
during the term of this Lease Contract in connection with the title of the
Leased Premises.
2. Real Property Leasing Contract Registration
(1) Upon the execution of this Lease Contract, the parties should apply to the
Real Property Leasing Administration Authority of Nanshan District for
registration of the Lease as soon as possible. The rent, water and power
charges and management fee payable by Party B under this Lease shall be
paid only after this Lease Contract has been registered with the Real
Property Leasing Administration Authority of Nanshan District (or the Real
Property Leasing Certificate has been granted).
(2) If the Nanshan District Real Property Leasing Administration Authority
refuses to register this Lease Contract (or issue the Real Property
Leasing Certificate) due to Party A's fault, Party B may rescind the Lease
and Party A shall be responsible for any losses suffered by Party B there
of.
3. Management of the Premises
Party A shall be responsible for the safety, environment hygiene and the
maintenance of the public area and facilities while Party B shall be
responsible for the safety, hygiene and other matters within the Leased
Premises.
4. Rent, Utility Charge and Management Fee
(1) Party B will rent 8,150.36 m(2) construction areas (including corridors,
site for the Nitrogen tank, the "Leased Premises"), and the rent and
management fee (which shall be RMB5.5 m(2)/month) payable shall be as
follows:
The Lease Period Rent Per m(2)(RMB) Monthly Rent (RMB) Mngt. Fee (RMB)
---------------- ------------------ ------------------ ---------------
03/4/16--03/4/30 35 142,631.3 22,413.5
03/5/01--06/4/30 35 285,262.6 44,827
06/5/01--08/3/31 36.75 299,525.7 44,827
08/4/01--08/4/15 36.75 149,762.9 22,413.5
(2) Utility charge shall be paid at the government rate accordance with the
actual amount of consumption.
(3) At any point during the term of the lease, Party A should not charge any
rental increment should Party B make any improvement to the building.
Party B will need to get pre-approval from Party A and all improvement
charges will be bear by Party B.
5. Payment
(1) Rent shall be paid to Great Wall Technology and Great Wall Computer at the
ratio of 66:34 as set out in the following chart. Both Great Wall
Technology and Great Wall Computer shall issue tax invoice separately to
Part B for the payments.
Great Wall Great Wall
The Lease Period Monthly Rent (RMB) Technology Computer
---------------- ------------------ ---------------- ----------------
03/4/16--03/4/30 142,631.3 94,136.7 48,494.6
03/5/01--06/4/30 285,262.6 188,273.3 96,989.3
06/5/01--08/3/31 299,525.7 197,687 101,838.7
08/4/01--08/4/15 149,762.9 98,843.5 50,919.4
(2) Utility charge and management fee shall be paid to Great Wall Computer in
accordance with the invoice.
6. Renovation
(1) Party A shall build the partition between the Leased Premises and the rest
area of the third floor in accordance with Party B's design.
(2) Party B shall be responsible for the renovation within the Leased
Premises. Before Party B starts the renovation, it must obtain Party A's
consent, which may not be unreasonably with held, and necessary government
approvals (if any).
(3) If Party B's renovation of the Leased Area requires technical support,
such as structure renovation, from Party A, the parties shall deal with
such issues in a separate contract.
(4) Party A shall grant Party B 3 month rent-free renovation period, from 16
January 2003 to 15 April 2003. Party B shall be responsible for the
utility charge and management fee incurred in the period. Party B shall
pay Party A the 3 month management fee in the amount of RMB134,233 with 5
days from the date when this Lease Contract has been registered with the
Real Property Leasing Administration Authority of Nanshan District (or the
Real Property Leasing Registration Certificate has been granted). Party B
shall pay party A RMB142,631.3 as the rent for the period of 16 April 2003
to 30 April 2003. From 1 May 2003, Party B shall pay Party A the monthly
rent within the first 10 days of the month. The rent for April 2003 and
May 2003 shall be paid together in May 2003.
7. During the term of the lease, Party B will be granted un-obstructed access
to the Leased Premises 24 hours a day, seven days a week for all 52 weeks
of each year by Party A
8. Cargo Lift and Public Passages
Party A agrees to allocate and provide the exclusive use of one cargo lift
(the number of the lift is ). Party A shall be responsible for the
maintenance of the cargo lift while Party B shall be responsible for the
operation of the lift. Party A shall undertake and ensure that the
allocated cargo lift is in good working condition at all times. Party B
shall undertake and ensure proper usage of the cargo lift.
9. Site for Nitrogen Tank
Party A agrees to provide a site of about 15 m(2) at appropriate location
outside of the 1 # Plant to Party B for the its nitrogen tank. The rent
and management fee for this site shall be at the same rates as applied to
the Leased Premises.
10. Parking Space
Party A shall provide Party B allocated free of charge parking space for 4
automobiles at the parking xxx xx 0 # Xxxxxxx Xxxxxxxx.
00. Environment Protection
(1) Party B shall have the right to conduct radioactive and environmental
pollution survey and testing of the inner and outer Leased Premises prior
to initiating its Initial Interior Improvements and to inform Party A of
all results of the survey and testing. In case that the radioactive and
other environmental pollution levels do not conform to the relevant
National and local standards of the PRC, Party A shall be responsible for
eliminating the environmental pollution, and shall deliver Party B with
the Leased Premises that comply with the National and local standards of
the PRC. In this event, the 3 month rent-free period as mentioned in
Additional Clause 6 (4) herein shall start from the date of delivery of
the Leased Premises which comply with the National and local standards,
and the term of the lease shall also be postponed accordingly.
(2) Party A shall undertake and ensure to hold Party B harmless against any
damages arising out of or in connection with any environmental pollution
caused by or in connection with Party A or other tenants of the Great Wall
Technology Building. IF the pollution is caused by Party A, Party A shall
promptly eliminate the pollution. If the pollution is caused by other
tenants, Party A shall undertake procure that such tenants promptly
eliminate the pollution. If such tenant fails to do so within a reasonable
period of time, Party A shall be responsible for eliminating the
pollution.
(3) Party B shall comply with the National and local standards in the PRC in
relation to the pollution levels using the Leased Premises. Party B shall
undertake and ensure to hold Party A harmless against any damages arising
out of or in connection with any environmental pollution caused by or in
connection with Party B's activities.
(4) If Party A or Party B is in breach of the aforesaid obligations, it shall
compensate the other party for any and all direct losses ( including but
without limitation the losses due to its employees or any third party's
claim ), but excluding any indirect losses and losses which are
unforeseeable at the time when both parties sign this contract, provided
always that written documents evidencing the environmental pollution
certified by relevant governmental authorities shall have been provided to
such party by the party making claims.
12. Right of First Refusal
Party A agrees to reserve the rest area of the third floor of 1 # Plant
for Party B until 31 December 2003. Party B may lease part or the whole of
that area at the same price as applied to the Leased Area before 31
December 2003. After that date, Party B shall have first refusal right for
the leasing of that area.
13. Renewal Option
The term of this Lease is 5 years. Party B may choose to renew the Lease
for another 5 years. The rent for the renewal shall be agreed by the
parties but shall not be higher than the average rent for similar factory
buildings in the same area.
14. Vacating Premises
On vacating the Leased Premises, Party B will be allowed to remove all
equipment belonging to them.
15. Company Registration
If Party B's company registration has been rejected by the industry and
commerce administration department, Party B may terminate this Lease
Contract. Party B should in such case restore the Leased Premises to its
original state, and reimburse Party A the costs incurred for the execution
of this Lease Contract.
Party A:
Great Wall Science and Technology Stock Company
Signature and Chop:
China Great Wall Computer Shenzhen Stock Company
Signature and Chop
Party B:
Advanced Energy
Signature and Chop
