Factory Building Lease
Agreement
This Factory
Building Lease Agreement (the “Lease Agreement”) is
entered into as of March 1, 2008 (“Effective
Date”) in the city of Shanghai, by and between SHANGHAI KAI
HONG TECHNOLOGY CO., LTD. (hereinafter referred to as
“DSH”) with its registered office at No.1 Lane 18 San
Zhuang Road, Songjiang Export Processing Zone, Shanghai, P.R.China
and SHANGHAI YUAN HAO ELECTRONIC CO., LTD. (hereinafter referred to
as “Yuan Hao”) with its registered office at No.8 Lane
18 San Zhuang Road, Songjiang Export Processing Zone, Shanghai,
P.R.China
DSH and Yuan
Hao are collectively referred to as the “Parties” and
individually as a “Party”.
The Parties
agree on the lease of a portion of the first floor of the Factory
Building (as defined below) and a portion of the second floor of
the Factory Building. Yuan Hao represents that it is the lawful
owner of the Factory Building.
Unless
otherwise defined in this Lease Agreement, the terms used herein
shall have the following meanings:
1.1
“Factory Building” shall mean the three-story building
located at No.8 Lane 18 San Zhuang Road, Songjiang Export
Processing Zone, Shanghai, P.R.China.
1.2
“First Floor” shall mean the portion of the first floor
of the Factory Building that is to be leased (Exhibit 1, first
floor layout of the Factory Building).
1.3
“Second Floor” shall mean the portion of the second
floor of the Factory Building that is to be leased (Exhibit 1,
second floor layout of the Factory Building).
1.4
“Lease Floors” shall mean First Floor and Second Floor
of the Factory Building.
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1.5
“Lease Term” shall mean the period of time in which DSH
is entitled to use the Lease Floors, and Yuan Hao is entitled to
receive rent from DSH in accordance with the terms and conditions
of the Lease Agreement.
1.6 “DSH
#2 Building” shall mean the building in construction located
at No.2 Lane 18 San Zhuang Road, Songjiang Export Processing Zone,
Shanghai, P.R.China.
2. The
Standard of the Factory Building
2.1 Yuan Hao
shall provide minimum quality standards for the Factory Building
and shall guarantee that ancillary facilities of the Factory
Building and supports for the Lease Floors (such as the Factory
Building elevators) are in compliance with all the relevant quality
standards and meet DSH’s demands and requirements.
3.1For the
Lease Floors, the Parties agree that the Lease Term shall begin on
March 1, 2008 until the time when DSH #2 Building is
leased by DSH.
3.2 DSH shall
decide the initial lease date of DSH #2 Building and shall notify
such initial lease date of DSH #2 Building not less than thirty
(30) days before the expiration of the Lease Term.
3.3 The Parties
agree that the Lease Term for the Lease Floors shall be terminated
without further extension unless DSH gives written notice of a
request to extend such Lease Term not less than thirty
(30) days before the expiration of the Lease Term. Yuan Hao
shall not terminate this Lease Agreement without DSH’s
written approval. During the Lease Term extension period, the items
relating to the rental set forth in Article 5 of the Lease
Agreement shall be adjusted on the basis of the market prices at
the time of the Lease Term extension and after consultation between
the Parties.
3.4 If during
the Lease Term or the Lease Term extension period, Yuan Hao
receives from a third party a bona fide, legally binding offer to
lease the portion of the Fourth Floor not already leased by DSH,
Yuan Hao shall notify DSH of this fact. The notice shall specify
all the terms of the bona fide third party offer. DSH shall then
have thirty (30) days to lease that portion of the Lease
Floors specified in the third party’s bona fide
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offer for the
rent and related details set forth in Articles 4 and 5. Yuan Hao
shall not lease any portion of the Lease Floors to any third party
until the thirty (30) days has expired without DSH exercising
its right of first refusal. Any other terms not specified in this
Lease Agreement regarding the Lease Floors, both Parties shall
negotiate and sign a supplemental agreement for these unspecified
terms. Such signed supplemental agreement shall constitute a part
of the entire Lease Agreement and shall have the same effectiveness
as the entire Lease Agreement.
4. Total
Lease Area of the Lease Floors
4.1 First Floor
has a total lease area of 998 square meters.
4.2 Second
Floor has a total lease area of 1,292 square
meters.
4.3 Lease
Floors has a total lease area of 2,280 square
meters.
5.1 The Parties
agree that the monthly rent per square meter for the First Floor
shall be Renminbi (“RMB”) 26.07 per square
meter. The total monthly rent for the First Floor shall be RMB
25,757.16 .
5.2 The Parties
agree that the monthly rent per square meter for the Second Floor
shall be RMB 26.07 per square meter. The total monthly rent
for the Second Floor shall be RMB 33,682.44 .
5.3 The Parties
agree that the total monthly rent for the Lease Floors shall be RMB
59,439.60 .
DSH shall pay
Yuan Hao a deposit amount of RMB 59,439.60 within ninty
(90) days of the Effective Date of the Lease
Agreement.
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For the Fourth
Floor, DSH shall pay the Rental in RMB to the RMB bank account as
designated by Yuan Hao before the first day of every
month.
8.
Termination of the Lease Agreement
If either Party
terminates the Lease Agreement prior to the expiration of the Lease
Term without the consent from the other Party, the Party that
terminates the Lease Agreement shall pay damages to the other Party
to compensate for such Party’s actual loss. The amount of
damages shall include, but not be limited to, the reasonable
profits, out-of-pocket costs, legal service fees, Court fees,
arbitration fees, accounting fees
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