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Exhibit 10.18
[LOGO]
LETTER OF INTENT
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This Letter of Intent (this "LOI") is made this 20th day of March 2000
("Effective Date") by and between iAsiaWorks (H.K.) Limited ("IAW") whose
principal place of business is at 31st Floor, Shell Tower, Times Square, 1
Matheson Street, Causeway Bay, Hong Kong and iAdvantage Limited a Hong Kong
company whose registered address is at 36/F, Standard Chartered Tower,
Millennium City, 388 Kwun Tong Road, Kwun Tong, Hong Kong ("iAdvantage"). IAW
and iAdvantage are individually referred to as a "party" and collectively as the
"parties".
RECITALS
A. IAW is engaged in the business of Internet services and possesses strategic
and operational capabilities in the development and operation of a broad
variety of Internet businesses.
B. The parties want to explore the most effective and efficient means whereby
IAW can operate a data center at the premises in the building to be erected
on all that piece or parcel of ground registered at the Urban Land Registry
as The Remaining Portion of Chai Wan Inland Lot No.30 intended to be known
as Mega iAdvantage (which premises is more particularly described in
Schedule 1 hereto and is referred to as "the said Premises" and the building
is referred to as "the Building") and iAdvantage is prepared to procure the
fitting out of the said Premises and lease to IAW by the date herein
provided, and to formalize such objective(s) in one or more binding
agreements ("Agreement(s)") to be negotiated as provided for in this
Agreement(s), including not limited to the Lease (as defined in clause 2.1).
[*]-CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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NOW, THEREFORE, in view of the foregoing premises, the parties hereby
mutually agree as follows:
1. Interpretation
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1.1 In this Letter of Intent:-
(a) the following words and expressions shall, save to the extent the context
otherwise requires, have the following meanings:-
"Force Majeure Events" means any event of national emergency war
civil unrest riots labour strikes
prohibitive government regulation Acts of
God natural calamities or other causes as
may be determined by an independent
arbitrator to be beyond the control of the
relevant party.
"Hong Kong" means The Hong Kong Special Administrative
Region
"Substantial Completion" means the event set out in clause 3
hereunder
"Trouble Free Operation" means the availability (details of which are
subject to further negotiation and to be set
out in the Final Agreed Technical Schedule
under Clause 2.3.1 herein, failing agreement
by the parties to be determined by a
Chartered Engineer nominated by either the
Institution of Electrical Engineers or the
Chartered Institute of Building Services
Engineers) of the services to be procured
and constructed by iAdvantage save and
except interruption in services due to
breakdown of supply of utility service out
of the reasonable control of iAdvantage and
misuse of the systems by IAW or its
employees agents or contractors or the
happening of a Force Majeure Event.
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2. General Undertaking.
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2.1 The parties intend that IAW will have the following responsibilities under
this Letter of Intent, namely, IAW shall, subject to the satisfaction of
the obligations of iAdvantage, as specified in clauses 2.2 and
2.3,("Conditions Precedent") enter into a lease with the terms as set out
in Schedule 1 ("the Lease").
2.2 The parties intend that iAdvantage will have the following
responsibilities under this Letter of Intent, namely, iAdvantage shall as
Conditions Precedent to the execution and delivery of the Lease, deliver
to IAW a facilities management capability, sufficient for it to operate as
a full scale commercially acceptable data center at the said Premises on
the Commencement Date (as defined and costed in Schedule 1). iAdvantage
shall be solely responsible (notwithstanding permitted sub-contracting)
for the design, procurement, construction, hand over, training,
negotiation and execution of associated documentation, such documentation
to be reasonably necessary or required by IAW, in accordance with the
attachments to this Letter of Intent. These attachments shall include but
not be limited to Detailed Specifications supplied by iAdvantage and
agreed to by IAW (marked ATTACHMENT I), Cost Formula (marked ATTACHMENT
II) and Proforma Technical Schedule (marked ATTACHMENT III) (herein
collectively referred to as "the Attachments").
2.3 The agreed milestones to be incorporated into the Agreement(s) will be as
follows:
2.3.1 subsequent to the signing of this Letter of Intent the parties will in
good faith negotiate a final cost of the obligations of iAdvantage under
the Agreement(s) ("Obligations"), based on the development of an agreed
detailed design as specified in the Attachments and a final estimate
calculated in good faith and given by iAdvantage ("the Final Agreed
Technical Schedule") on or before the 31st day of May 2000. The said
Premises will be fitted out in accordance with the Final Agreed Technical
Schedule and handed over to IAW by the Commencement Date. IAW shall give
iAdvantage written notice of any defect within 12 months of the
Commencement Date. Following 12 months continuous Trouble Free Operation
subsequent to Substantial Completion and in the absence of any reasonable
cause for objection in writing by IAW, IAW is deemed to have accepted the
performance of the Obligations ("Final Acceptance"). IAW shall be entitled
to withhold as retention money, for the punctual and complete performance
of the Conditions Precedent, an amount equal to 5% of the rent per month
reserved under the Lease which retention money shall be released to
iAdvantage upon Final Acceptance.
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2.3.2 The parties will in good faith negotiate and use their best endeavors to
execute the Agreement(s) on or before the 31st May 2000 to give effect to
the matters contemplated herein and such other matters as they may
mutually agree in writing. iAdvantage shall produce a construction
schedule for the progress of the construction works specified under the
Final Agreed Technical Schedule within 4 weeks from the execution of the
Agreement(s), which is reasonably acceptable to IAW Provided That, unless
otherwise agreed in writing, IAW`s acceptance of the construction
schedule shall not in any event be implied to limit IAW's remedies under
this Letter of Intent.
2.3.3 In addition to the terms and conditions expressly agreed herein, the
Agreement(s) will also contain such terms and conditions as are customary
in agreements of that nature or as may be reasonably required or
necessary to give effect to the intentions of the parties, to avoid and
where necessary, resolve disputes between them. The Attachments shall
constitute the major elements for the terms and conditions in the
Agreement(s), the parties shall not materially deviate from such elements
in their negotiation of the Final Agreed Technical Schedule and the final
terms and conditions of the Agreement(s).
2.3.4 IAW shall appoint an agent, whose particulars shall be submitted to
iAdvantage for record, to act as their nominated agent ("the Nominated
Agent") throughout the design, procurement, construction, hand over and
associated documentation work in accordance with Final Agreed Technical
Schedule. The Nominated Agent shall be empowered to monitor on behalf of
IAW the quality, construction and schedules referred to in this Letter of
Intent. Any deviations from this Letter of Intent and its Attachments
will be transmitted by the Nominated Agent to IAW and iAdvantage as set
forth in the non-conformity procedure agreed to by the parties.
2.4 iAdvantage shall be responsible for the training of IAW staff in respect
of and concerning the installed equipment for the purpose of enabling
IAW's staff to properly operate the equipment installed throughout the
Term (as defined in Schedule 1). iAdvantage will be responsible for
maintaining the systems installed by them at the said Premises, pursuant
to the Obligations, throughout the Term. iAdvantage shall, upon request,
promptly produce to IAW such records in respect of or concerning the
Obligations.
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3. Substantial Completion
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Upon all systems to be provided by iAdvantage has been installed and become
functional in accordance with the Final Agreed Technical Schedule or any
subsequent modification agreed in writing between the parties ("Substantial
Completion"), iAdvantage shall produce a certificate from its qualified
architect ("the Architect") to that effect If IAW shall not give any written
notice of objection (such notice of objection shall not be unreasonably
given or delayed) within fourteen (14) days from the date of the architect's
certificate being delivered to IAW, the date of such certificate shall be
the date of Substantial Completion of the fitting out at the said Premises.
4. Subsequent Adjustments
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In the event of any variation or modification to the Final Agreed Technical
Schedule, the rental and management fee for the lease shall be adjusted to
reflect the increase in costs arising from or relating to the variation or
modification (herein referred to as "Subsequent Adjustment")
5. Confidentiality
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5.1 Each party undertakes to refrain from disclosing (a) the existence, nature
or terms of this Letter of Intent and/or the terms of the transactions
referred to herein or (b) the confidential documents and information
exchanged by the parties in anticipation of or furtherance of the actions
contemplated in this Letter of Intent (hereinafter "Confidential
Information") without prior written consent from the other party, except in
the following circumstances:
(a) in the event that any Confidential Information is known to the party
receiving the same prior to the disclosure thereof by the disclosing
party or becomes known to the party receiving such information from a
third party not involving any breach of this Letter of Intent;
(b) in the event that either of the parties is required to disclose the
Confidential Information in order to comply with any law, rule, order,
administrative or court resolution or arbitration decision;
(c) in the event that the Confidential Information is generally known by
the public or has been publicly disclosed; or
(d) the parties agree in writing that it be disclosed to specified persons,
upon such terms and conditions as the parties may agree and specify.
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5.2 The foregoing obligations regarding Confidential Information shall not
prohibit disclosure to (a) directors, employees or advisors and the other
representatives of either party whose duties require them to know the
Confidential Information (such persons shall be required by the party with
whom they are employed or associated to uphold the confidentiality of
Confidential Information made available to them) and (b) potential sources
of financing, who, in turn, shall be required by the party providing
Confidential Information to it to uphold the confidentiality of the
Confidential Information made available to it.
5.3 Each party undertakes to refrain from making any public announcement on
matters contained in this Letter of Intent without prior written notice to
and approval thereof by the other party. The parties shall mutually agree
upon the content of any such disclosure.
6. Deposit
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An initial deposit equivalent to half (1/2) month's rental ("Initial
Deposit") is payable upon the signing of this Letter of Intent which shall
be applied towards part of the deposit payable under the Agreement(s) and
the Lease respectively. The balance of deposit equivalent to Two and a half
months' Rental is payable upon signing of the Agreement(s) in the following
manner:-. IAW shall produce a bank guarantee for the amount equivalent to
three months' rental issued by a licenced bank in Hong Kong in a form to be
approved by iAdvantage upon the execution of the Agreement(s) whereupon
iAdvantage shall immediately return to IAW the Initial Deposit without
interest whatsoever. The said bank guarantee shall remain valid and shall
not expire until the issuance of a replacement bank guarantee for the same
amount to cover the lease term as required under the Agreement(s) of by the
relevant bank upon the execution of the Lease.
The said deposit or bank guarantees shall be held by iAdvantage free of any
interest subject to the terms and conditions of this Letter of Intent and
the Agreement(s), as the case may be. If IAW shall fail to enter into the
Agreement(s) or the Lease, as the case may be, or fail to observe perform or
complied with any of the terms and conditions of this Letter of Intent or
the Agreement(s) or the Lease, as the case may be, and IAW fails to remedy
such non-observance non-performance or non-compliance within 14 days from a
written notice from iAdvantage or the landlord ,as the case may be,
iAdvantage shall be entitled to forfeit the Deposit paid by IAW or call upon
the bank to pay over the sum guaranteed , as the case may be, as liquidated
damages but not as penalty without prejudice to the alternative right of
iAdvantage to claim any further loss or damages or other remedies to which
it is entitled including but not limited to decree for specific performance
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Provided that the total damages iAdvantage is entitled shall not exceed
[*].
7. Under no circumstance shall either party be liable to the other for, nor
shall either party make claim against the other for, consequential loss or
damage, including but not limited to loss or damage resulting from loss of
use, loss of profits or revenues, costs of capital, loss of goodwill,
claims of customers, or fines and penalties, and iAdvantage shall (and
shall procure the landlord to) release IAW and IAW shall release therefrom
iAdvantage and any relevant landlord which provides equipment, materials or
service for IAW's operation. This release from liability is not intended to
and shall not preclude iAdvantage from seeking damages for construction
costs on claims for work performed.
To the maximum extent permitted by law, but no further, the releases from
liability, limitations and apportionment of liability, and exclusive remedy
provisions expressed herein shall apply even in the event of the fault,
negligence (in whole or part), strict liability, breach of contract or
otherwise of the party released or whose liability is waived, disclaimed,
limited, apportioned or fixed by such exclusive remedy provision,
indemnified or held harmless, and shall extend to such party's related or
affiliated entities and its and their directors, officers employees and
agents.
8. Expenses
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Until the execution and delivery of the Agreement(s), each party will bear
its own expenses incurred in connection with the matters contemplated in
this Letter of Intent.
9. Effect of this Letter of Intent
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9.1 For the avoidance of doubt this Letter of Intent is intended to be legally
binding.
9.2 In the course of negotiating the Agreement(s), the parties acknowledge and
agree that the fundamental terms and conditions will be as specified in
this Letter of Intent and the Attachments, unless agreed to the contrary in
writing.
10. General Terms
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10.1 Neither party may assign any rights to or obligations under this Letter of
Intent or any part hereof to any person or equity, without the prior
written consent of the other party (such consent shall not be unreasonably
withheld).
[*]-CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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10.2 This Letter of Intent represents the full and complete agreement between
the parties with respect to the subject matter hereof and supersedes all
prior agreements (whether written or oral) between the parties herein.
10.3 This Letter of Intent shall be governed by and construed under the laws of
Hong Kong and the parties submit to the non-exclusive jurisdiction of the
courts of Hong Kong.
IN WITNESS WHEREOF, the parties have herein set their hands on the date and
place first above written.
for and on behalf of for and on behalf of
iAsiaWorks (H.K.) Limited iADVANTAGE LIMITED
/s/ Jon Beizer /s/ Eric Tung
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Name Name
Director/authorised person Director/authorised person
Signed in the presence of: Signed in the presence of:
/s/ David Holub /s/ Vitus Cheung
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Schedule 1
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Basic terms of the lease agreed to be procured by iAdvantage
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1. Tenant
iAsiaWorks (H.K.) Limited
2. Premises
The entire 7th, 8th, 9th and 10th Floor of the building to be erected on all
that piece or parcel of ground registered in the Urban Land Registry as The
Remaining Portion of Chai Wan Inland Lot No.30 to be known as "Mega-
iAdvantage" ("the Building") with an approximate gross floor area of [*]
square feet (which shall be subject to final computation in accordance with
the final building plans of the Building, which said floors are referred to
as ("the said Premises") plus part of 6th Floor of Mega-iAdvantage with an
approximate gross floor area of [*] square feet (which shall be subject to
final computation in accordance with the final building plans of the
Building and which portion is referred to as "the Licence Space") which said
Premises and Licence Space are shown as shaded in the attached floor plan
for identification only.
3. Lease Term
[*] from the Commencement Date (herein referred to as "the Term") with rent
as stated under clause 5 of this Schedule Subject to the Government
regulation and lease restrictions required to be complied with by the
landlord to be satisfied together with [*] options for renewal for [*] terms
of [*] each. The monthly rent for the respective renewal terms will be at
open market rent to be determined in accordance with the provisions
hereunder.
4. Commencement Date
The Commencement Date of the Term shall be the 7th day from the date of
Substantial Completion or the date the Tenant agrees in writing to take over
possession of the said Premises after the issuance of the Occupation Permit
of the Building whichever shall be the earlier.
Subject to delay caused by subsequent requests by IAW for modification and
Force Majeure Events (such delay shall be certified by the Architect),
iAdvantage shall use its best endeavors to achieve Substantial Completion by
the 31st day of December 2000 ("Desired Date"), if Substantial Completion is
not achieved by the 14th day of February 2001 (45 days after the 31st day of
December 2000 herein referred to as "the Guaranteed Completion Date"),
[*]-CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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iAdvantage will pay delay damages of [*] per day until Substantial
Completion Provided That the total amount of delay damages shall not exceed
[*] such delay damages shall be full and final settlement for IAW's claim
against iAdvantage.
In the event of delay by Subsequent Adjustments or Force Majeure Events, the
Guaranteed Completion Date shall be postponed by the same number of days due
to such delay. In the event a Force Majeure Event should last more than 6
consecutive months or 180 days, either party shall be entitled to terminate
the Agreement(s).
5. Monthly Rental
Rent for the said Premises:-
<TABLE>
<CAPTION>
Term Rental rate
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<S> <C>
[*] Year to [*] Year at the rate between [*] to [*]
per square foot of gross floor area
per month which rate shall be agreed
before 31 May, 2000 basing on the
costs formula agreed between the
parties and the Final Agreed
Technical Schedule Subject Always to
Subsequent Adjustments.
[*] Year to [*] Year the rate per square foot of gross
floor area per month shall be 110% of
the rate for the [*] Year to [*] Year
of the Term.
[*] Year to [*] Year At open market rent as at the
commencement of the [*] Year to be
determined in accordance with the
provisions hereunder provided that
the rent shall not be reduced by more
than [*] or increased by more than
[*] of the rent reserved for the [*]
Year of the Term
Licence Fee for the Licence
Space:
[*] Year to [*] Year at the rate of [*] per square
foot of gross floor area per month.
[*] Year to [*] Year At open market rent as at the
commencement of the [*] Year to be
determined in accordance with the
provisions hereunder provided that
the rent shall not be reduced by more
than [*] or increased by more than
[*] of the rent reserved for the [*]
Year of the Term
</TABLE>
[*]-CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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<TABLE>
<CAPTION>
<S> <C>
[*] Year to [*] Year At open market rent as at the
commencement of the [*] Year to be
determined in accordance with the
provisions hereunder provided that
the rent shall not be reduced by more
than [*] or increased by more than
[*] of the rent reserved for the [*]
Year of the Term
</TABLE>
All rent and Licence Fees are payable monthly in advance on the first day
of each calendar month without deduction whatsoever.
6. Delivery of Premises
Subject to the payment of the Deposit, the Landlord will deliver the said
Premises to the Tenant on Commencement Date.
7. Monthly Management Fee
(i) The monthly Management Fee in respect of the said Premises for [*] Year
to [*] Year shall be at the rate of [*] per square foot of gross
floor area per month and payable by the Tenant monthly in advance.
(ii) The monthly Management Fee in respect of the said Premises for the [*]
Year to [*] Year shall be at [*] per square foot of gross floor
area and payable by the Tenant monthly in advance and thereafter
subject to review annually which reviewed monthly Management Fee shall
not be increased or decreased by more than [*] of the monthly
Management Fee payable immediately prior to such review.
The monthly Management Fee shall include garbage collection from and
cleaning of the said Premises.
8. Government Rates/Property Tax/Stamp Duty & Legal Fee
The Government Rates, Government Rent and the Property Tax shall be borne by
the Landlord and the Tenant shall be responsible for the taxes appertaining
to its operation at the said Premises as governed by Hong Kong Special
Administrative Region laws and regulations.
Each party shall bear its own legal costs and disbursements. Stamp duty and
adjudication fees, if any, will be borne by both parties in equal shares.
Registration fees shall be paid by the Tenant.
9. Payment Term
[*]-CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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All monthly rental and all other payments (except Electricity Charges) are
payable monthly in advance on the first day of each calendar month without
any deduction whatsoever and will be made to the Landlord's account in Hong
Kong Dollars in Hong Kong.
11. Deposit & Lease Documents
A Deposit equivalent to Three (3) months' Rental is payable by the Tenant.
The Initial deposit equivalent to half (1/2) month's Rental as mentioned in
Clause 6 of this Letter of Intent is paid upon the signing of this Letter
of Intent shall be applied towards part of the deposit payable under the
Agreement(s) and the Lease respectively. The balance of deposit equivalent
to Two and a half months' Rental is payable upon signing of the
Agreement(s) in the following manner:-.
IAW shall produce a bank guarantee for the amount equivalent to three
months' rental issued by a licenced bank in Hong Kong in a form to be
approved by iAdvantage upon the execution of the Agreement(s) whereupon
iAdvantage shall immediately return to IAW the Initial deposit without
interest whatsoever. The said bank guarantee shall remain valid and shall
not expire until the issuance of a replacement bank guarantee for the same
amount to cover the lease term as required under the Agreement(s) or by the
relevant bank upon the execution of the Lease.
Both parties agree to sign an Agreement(s) on or before 31 May, 2000 or
upon all requirements under the Government Lease relating to transactions
affecting the said Premises has been complied whichever shall be the later
which shall incorporate all the terms and conditions herein and the Final
Agreed Technical Schedule and contain the proforma Lease.
The Deposit or bank guarantee shall be held by the Landlord free of any
interest subject to the terms and conditions of this Letter of Intent and
the Agreement(s), as the case may be. If IAW shall fail to enter into the
Agreement(s) or the Lease, as the case may be, or fail to observe perform
or complied with any of the terms and conditions of this Letter of Intent
or the Agreement(s) or the Lease, as the case may be, and IAW fails to
remedy such non-observance non-performance or non-compliance within 14 days
from written notice by iAdvantage or the landlord, as the case may be,
iAdvantage shall be entitled to forfeit the Deposit paid by IAW or call
upon the bank to pay over the amount guarantee, as the case may be, as
liquidated damages but not as penalty without prejudice to the alternative
right of iAdvantage or the landlord, as the case may be, to claim any
further loss or damages or other remedies to which it is entitled including
but not limited to decree for specific
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performance Provided That the total amount of damages iAdvantage is
entitled shall not exceed [*].
12. Renewal Option
Subject to the Government regulation and lease restriction, and if there
shall not at the expiration of the relevant Term be any arrears of rent or
other payments or any subsisting breach by the Tenant of any of the terms
or conditions of the Lease the Tenant shall have an option to renew the
Lease [*] further terms of [*] each such options to be exercised by the
Tenant by giving to the Landlord at least six calendar months' previous
notice in writing prior to the end of the respective terms and the Landlord
shall grant to the Tenant a lease for the further term of [*] subject in
all other respects to the same stipulations as are contained in the Lease
except the rent payable and the clause for renewal. The Tenant shall on the
renewal of the Lease pay to the Landlord an additional sum to make up the
deposit to be equivalent to 3 months' rent payable during the renewal term
("the Renewal Term"). If the Tenant shall fail to serve the notice to renew
as aforesaid the Lease shall terminate and the Tenant shall deliver up
vacant possession of the said Premises to the Landlord in accordance with
the provisions of the Lease at the expiration of the Term.
The Open Market Rent shall be agreed between Landlord and the Tenant at
least three months before the new rent shall become payable and failing
agreement as aforesaid, the question shall be referred to the decision of a
single valuer to be appointed jointly by the parties, failing agreement on
the appointment of the valuer, the valuer shall be appointed by the
President for the time being of the Hong Kong Institute of Surveyors. The
valuer shall act as an expert but not an arbitrator whose decision shall be
final and binding Provided Always that in making its decisions the valuer
shall take into account of the Cost Formula agreed between the parties and
the provisions of facilities by the Landlord in the Final Agreed Technical
Schedule. Prior to the decision of such valuer, the Tenant shall continue
to pay monthly, on account of the rent to be decided, the same rent as
payable on the expiration date of the term immediately preceding the
commencement of the relevant renewal term and adjustment on the rent (if
applicable) shall be made upon the market rent having been determined as
aforesaid. The costs of the valuer shall be borne by the parties hereto in
equal shares.
13. Handover Condition
[*]-CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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The Landlord shall handover the said Premises and Licence Space in
accordance with the Final Agreed Technical Schedule on Commencement Date.
The said Premises and the Licence Space shall be at the risks of the
Landlord prior to Commencement Date and at the risks of the Tenant after
Commencement Date.
14. Sub-letting rights
The Tenant is allowed to sublet or share occupation of the premises with
its subsidiary companies or its affiliate and associated companies, each of
which affiliate or associated companies the Tenant holds not less than 30%
of its shareholding subject to the Landlord's prior written approval on the
terms and conditions of such subletting which approval shall not be
unreasonably withheld Provided Always that such sub-tenants shall be
restricted to carry out business relating to telecommunication and internet
services and in compliance with the permitted user of the Building. The
gross profit rent, if any, derived from any permitted subletting shall be
shared between iAdvantage and IAW. All shortfalls on rent, if any, arising
from such subletting shall be the responsibility of the Tenant
15. User
The said Premises shall be used in accordance with the provisions of the
Government Lease under which the said Premises and the Licence Space are
held.
16. Assignment
The Tenant shall not have the right to assign the rights and obligation in
the Lease except with the prior written approval of the Landlord such
approval not to be unreasonably withheld.
17. Expansion Option
Tenant has the option to take up the 11th Floor of the Building ("the
Expansion Floor") within the first three months of the Term by serving to
iAdvantage notice in writing to that effect ("the Tenant Notice") and the
parties shall negotiate for the detailed design and the rental for the
Expansion Floor on the same framework as the Final Agreed Technical
Schedule and the Cost Formula for the said Premises within two months from
the date of the Tenant's Notice, iAdvantage shall proceed with the
construction in accordance with the agreed schedule. The term for the
Expansion Floor shall commence on the 7th day from the date of Substantial
Completion of the Expansion Floor
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and shall be co-terminus with the Lease. All other terms and conditions for
the lease of the Expansion Floor shall be the same as in the Lease for the
said Premises.
If the Tenant shall not serve the Tenant's Notice within the said three
months, the Tenant's right to take up the 11th Floor shall lapse and be
null and void thereafter.
18. Early Termination
The Tenant shall have the right to terminate the Lease after the first
[*] of the Lease by serving not less than six months' prior written
notice on the Landlord Subject to IAW compensating iAdvantage / the
Landlord with a sum equivalent to the construction costs of the said
Premises amortized over the Term for the residue of the unexpired Term as
follows:
Construction Costs X unexpired Term
--------------
Total Term
such compensation shall be subject to reduction to such extent that the
landlord may recover from any subsequent tenant of the said Premises and
such reduction shall be agreed between the parties failing which to be
determined by a single valuer to be appointed jointly by the parties,
failing agreement on the appointment of the valuer, the valuer shall be
appointed by the President for the time being of the Hong Kong Institute of
Surveyors. The valuer shall act as an expert but not an arbitrator whose
decision shall be final and binding on the parties.
19. Reinstatement
The Landlord will accept to take over the said premises in an "as-is"
condition save and except structural damage caused by the Tenant in which
event the Tenant shall be responsible to make good such damage.
20. Construction
Shall be in accordance with the Final Agreed Technical Schedule
21. Electricity
The electricity loading for the subject premises is 90Watt per square foot,
supply voltage is 380V(+/-10%), 50Hz, 3 phases available for Tenant's
connection at the main switch room on the respective floors. Any
requirement of extra electricity load, technical arrangement will be noted
down and settled in the Final Agreed Technical Schedule.
[*]-CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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IAW will reimburse iAdvantage monthly all electricity charges incurred
according to a separate meter reading at such rate as shall be in line with
the market rates.
22. Parking
Subject to the availability, the Tenant shall be entitled to subscribe 4
car-parking spaces on licence basis at the prevailing carparking charges.
For reserved allocated and floating car-parking space, current charge is
[*] per month per space iAdvantage will endeavour to procure the
Landlord to provide the Tenant with those carparking space that is closest
to the loading, unloading area and industrial lift.
23. Signage
One external signage and one on the lobby on the Ground Floor of the
Building and one in a passenger lift car which size and detailed design
shall be subject to the prior approval of the landlord (which approval
shall not be unreasonably withheld) will be provided at the cost of the
Tenant subject to a licence fee of [*] per month each.
24. Governing Law
The Lease shall be governed by and construed in accordance with the laws of
Hong Kong Special Administrative Region and the parties hereby irrevocably
submit to the non-exclusive jurisdiction of the Courts of the Hong Kong
Special Administrative Region.
[*]-CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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