Exhibit (10.7)
EQUIPMENT LEASE CONTRACT
Party A : Beijing TIC Electronics Co. Ltd.
Party B : Beijing Hwa Yue Advertisement Co. Ltd.
1.
The following matters regarding part of the post-production
equipment that Party B will lease from Party A are confirmed
1.1
Contents : Party B will lease from Party A part of the
post-production equipment, and Party A will provide Party B
with part of the office space.
1.2 Leasing Period : From August 8, 2000 to September 8, 2001.
August 8, 2000 to September 8, 2000 will be the equipment
tuning / testing period for both Parties. On expiration of this
lease, both Parties can consult with each other to extend the
lease.
1.3 Lease Amount and Method of Payment : The total lease amount is
RMB S 1,270,000. The first month is the equipment tuning /
testing period and Party B shall pay Party A RMB S 70,000;
after which Party B shall pay Party A RMB $ 100,000 per month.
Rent is paid on a monthly basis and shall be paid in the
beginning of each month. After this contract has been signed by
both Parties, Party B shall pay the equipment rent of RMB $
70,000 to Party A before August 7, 2000. Thereafter, Party B
shall pay the equipment rent of RMB $ 100,000 for the following
month to Party A before the seventh day of each month, if the
payment date falls on a holiday, Party B shall make the payment
before the holiday.
1.4 Risk Guarantee Fund for Leasing of Equipment : Before the
implementation of this contract, Party B shall pay Party A RMB
$180,000 at one time as the Risk Guarantee Fund for leasing the
equipment. Upon expiration of the lease and within 10 days
after the leased equipment has passed the handover inspection
conducted by Party A, Party A shall return the fund to Party B
at one time. Should any equipment fail the inspection, the
situation shall be handled in accordance with items 2.2.3 and
2.2.5 of this contract or relevant regulations.
1.5 Equipment maintenance during the lease-period shall be
responsible by both Parties. Party A and Party B shall
undertake to pay the equipment maintenance fees in the ratio of
3 : 7 respectively according to the following stipulations
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1.5.1 Any faulty equipment shall be sent to the relevant special
contract maintenance companies for repair. For those faulty
equipment which does not have any contract-maintenance
companies, they shall be sent to those agents accredited by the
associated sales agents for repair. After the maintenance
company has confirmed the equipment fault(s) and charges, Party
A and Party B shall make the payment according to the agreed
ratio. The maintenance company shall issue separate invoices to
both parties.
1.5.2 Party A shall not be responsible for all the losses incurred by
Party B during the equipment maintenance period.
2. Rights and Responsibilities of Parties A and B daring the lease-
Period
2.1 Responsibilities of Party A
2.1.1 Party A shall guarantee that the leased-equipment handed over
to Party B is in good condition, complete with accessories, and
meets the various utilization requirements.
2.1.2 During the lease-period, Party A shall guarantee that relevant
equipment covered by the lease shall not be leased in any form
to any other third party; otherwise, Party B has the right to
treat this as an infringement of agreement by Party A and
terminate the contract.
2.1.3 Apart from collecting the equipment rent and safeguarding their
safety, Party A has no right to interfere with Party B's normal
and legal operations ( including business, administration,
personnel, finance, etc. ).
2.1.4 Party A shall provide part of the administration office space
to Party B without any extra charges-
2.1.5 Party A shall not carry out any business activities in the name
of Party B. Should any legal disputes, which has no connection
with Party B at all, arise due to such acts, Party B has the
right to terminate the contract and demand Party A to indemnify
a contract infringement fee of RMB $ 100,000.
2.1.6 If Party A wishes to terminate the lease contract for any
special reasons before it matures, it shall give a two-month
notice in writing to Party B. Also, within 30 days after the
equipment handover, Party A shall indemnify Party B a contract
infringement fee of RMB $ 100,000 at one time.
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2.1.7 Personnel from Party A shall not operate any of the leased
equipment without permission beyond the mutually agreed
scheduled equipment inspection / testing period or without
informing Party B in the first place; otherwise Party B will
not bear any financial indemnification and legal
responsibilities for any equipment faults and damages due to
such acts. All responsibilities shall be born by Party A.
2.2 Rights of Party A
2.2.1 Within the contract period, Party B shall pay the equipment
rent for the following month before the seventh day of each
month. If the payment is overdue, Party A has the right to
charge Party B a late-payment fee, at 1% of the monthly rental
( RMB $ 100,000 ) per day, i.e. an additional RMB $ 1,000 will
be charged for each day of delayed payment. If the overdue is
more than 15 days, Party A can treat this as a contract
infringement by Party B and has the right to terminate the
contract, and take back all the equipment from Party B.
According to items 2.2.2 and 2.2.5 of this contract and other
related regulations, Party A has the right to demand Party B to
indemnify a contract-infringement fee of RMB $ 100,000 and this
can be deducted from the Risk Guarantee Fund-
2.2.2 Party A has the right to request Party B to mutually maintain
all the leased equipment in good condition, and to guarantee
that deliberate equipment damage and losses will not happen.
Should such situations really take place, Party A can detain
the entire Risk Guarantee Fund and terminate the contract.
Also, Party A has the right to demand Party B to indemnify a
sum that is equivalent to the purchase cost of the equipment or
equipment with the same model(s) and functions. Party A can
also treat Party B as having infringed the contract and demand
the latter Party to pay an infringement fee of RMB $ 100,000
within 30 days. If the payment is overdue, Party A can collect
from Party B a late-payment fee, which is 1% of the total
infringement fee per day. Should Party B refuses, Party A has
the right to demand for compensation for losses from Party B
through legal means.
2.2.3 Upon termination of the contract, Party A has the right to
supervise Party B while they are moving out from the leased
premises; and equipment returned will be checked against the
inventory list. Should any equipment found damaged or unable to
function properly, Party B has the responsibility to repair the
faulty items and the maintenance charges shall be born by both
Parties, in the ratio as stipulated in item 1.5 of this
contract. Party B also has the right to indemnify Party A with
equipment of the same models and with the same functions. After
all the leased equipment has passed the hand-over inspection,
Party A shall reimburse the entire Risk Guarantee Fund to Party
B within 10 days; otherwise Party A can detain the entire Fund
and demand for
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compensation which will exceed the same Fund. Indemnification
shall be paid by Party B to Party A within 30 days; otherwise a
1 % late-payment fee will be charged for each overdue day.
Should Party B refuses, Party A will demand the indemnification
through legal means.
2.2.4 Should Party A discover any illegal operation undertaken by
Party B, the former Party has the right to terminate the lease
contract and this situation will be dealt with according to
item 3.1 of this contract.
2.2.5 During the lease-period or equipment-handover-period upon
termination of this contract, Party B shall not take any leased
equipment out of the Company premises. Should Party A discover
any equipment missing, it has the right to demand Party B to
return those items in good condition immediately. Should Party
B fail to comply, Party A can detain the entire Risk Guarantee
Fund and demand Party B to make indemnification which is
equivalent to the purchase cost of the equipment, or with
equipment of the same model(s) and with the same functions.
Party A also has the right to demand Party B to pay a contract
infringement fee of RMB $ 100,000 within 30 days. A 1% late
payment fee will be charged for each overdue day. Should Patty
B refuse, Party A has the right to demand the indemnification
from Party B through legal means.
2.2.6 Party A has the right to request Patty B not to engage in any
business activities in the name of the former Party under any
circumstances. Should any legal disputes arise due to these
acts, Party A will not bear any responsibilities and has the
right to terminate the contract and demand Party B to pay a
contract-infringement fee of RMB $ 100,000 within 30 days. A 1%
late-payment fee will be charged for every overdue day. Should
Party B refuse, Party A has the right to demand the
indemnification from Party B through legal means.
2.2.7 During the lease period, all faulty equipment shall be sent to
maintenance agents for repair. Party A will not be responsible
for all the losses incurred by Party B during the maintenance
period.
2.2.8 Parties A and B are only having an equipment leasing
relationship. All leased equipment is fixed assets of Party A
and Party A will not bear any legal responsibilities for Party
B.
2.3 Responsibilities of Party B
2.3.1 After the contract has been signed, Party B shall guarantee to
pay the Equipment Risk Guarantee Fund of RMB $ 180,000 on time.
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2.3.2 Party B shall guarantee to pay the monthly equipment rental of
RMB $ 100,000 on time. If the payment is overdue, Party A will
settle this in accordance with item 2.2.1 of this contract.
2.3.3 Party B and Party A shall both have the responsibility of
maintaining the leased equipment in good condition, and shall
guarantee that there shall be no deliberate equipment damages
and losses; otherwise, such events shall be dealt with
according to items 2.2.2 and 2.2.5 of this contract.
2.3.4 Upon termination of the contract, Party B shall return the
leased equipment to Party A After all the leased equipment has
passed the hand- over inspection, Party A shall reimburse the
entire Equipment Risk Guarantee Fund to Party B within 10 days;
otherwise Party A has the right to handle the situation
according to item 2.2.3 of this contract and other related
terms.
2.3.5 Party B shall not carry out any business activities in the name
of Party A. Should any legal disputes arise due to such acts,
Party A can treat this as a contract infringement committed by
Party B, and therefore has the right to terminate the contract
and demand Party B to indemnify a contract infringement fee of
RMB $ 100,000.
2.3.6 If Party B for any special reasons wishes to terminate the
lease contract before it matures, it shall give a two-month
notice in writing to Party A - Upon termination of the
contract, the leased equipment will be returned. Should any
problems arise, they will be dealt with according to the
relevant stipulations. When the equipment handover is cleared,
Party B shall indemnify Party A a contract infringement fee of
RMB $ 100,000 at one time.
2.4 Rights of Party B
2.4.1 Party B has the right to request Party A to furnish detailed
information on the leased equipment and that the
leased-equipment handed over to the former Party is in good
condition, complete with accessories, and complies with the
various operating requirements; otherwise, Party B has the
right to refuse to implement the contract.
2.4.2 During the lease-period, Party B has the right to request Party
A to guarantee that relevant equipment covered by the lease
shall not be leased in any form to any other third party;
otherwise, Party B has the right to treat this as an
infringement of agreement by Party A and terminate the
contract.
2.4.3 Apart from collecting the equipment rent, safeguarding
equipment safety and maintaining normal office disciplines,
Party A has no right to interfere with Party B's normal and
legal operations (including business, administration,
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personnel, finance. etc ); otherwise, Party B can treat this as
a contract infringement by Party A and has the right to
terminate the contract.
2.4.4 Party A shall provide administration office space to Party B
without any extra charges.
2.4.5 Party B has the right to request Party A not to carry out any
business activities in the name of Party B. Should any legal
disputes, which has no connection with Party B at all, arise
due to such acts, Party B has the right to terminate the
contract and demand Party A to indemnity a contract
infringement fee of RMB $ 100,000 within 30 days. Party B has
the right to charge Party A a 1% late-payment fee, based on the
total indemnification, for each overdue day. Should Party A
refuse, Party B has the right to demand indemnification from
the former Party through legal means.
2.4.6 Personnel from Party A shall not operate any leased equipment
without permission beyond the mutually agreed scheduled
equipment inspection / testing period or without informing
Party B in the first place; otherwise Party B will not bear any
financial indemnification and legal responsibilities for any
equipment faults and damages due to such acts. All
responsibilities shall be born by Party A.
3.
Contract Infringement Responsibilities
3.1 Regardless of whether Party A or Party B infringes the
contract, thus leading to the termination of the contract, the
infringing Party shall indemnify the opposite Party a contract
infringement fee of RMB $ 100,000 within 30 days. If the
payment is overdue, the opposite Party has the right to charge
the infringing Party a late payment fee of 1% of the total
indemnification for each overdue day. Should the infringing
Party refuse, the Opposite Party has the right to demand
indemnification from the former Party through legal means.
3.2 Should Party A infringe the agreements stated in items 2.1.1 to
2.1.7 of this contract, thus creating losses to Party B, the
former Party shall be responsible to indemnify the latter Party
according to the actual losses after the latter Party has
produced relevant evidence.
3.3 Should Party B infringe item 2.3.1 of this contract and does
not pay the Equipment Risk Guarantee Fund, Party A has the
right to terminate the contract.
3.4 Should Party B infringe item 2.3.5 of this contract, thus
creating losses to Party A, the former Party shall be
responsible to indemnify the losses.
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3.5 All legal responsibilities incurred by individual operations of
Party A or Party B shall be born by the individual party
concerned.
3.6 Should Party A or Party B infringe any part of the contract,
the event will be dealt with by the relevant terms.
Party A Representative : Party B Representative
Seal : Beijing TIC Electronics Co. Ltd. Seal : Beijing Hwa Yue
Advertisement Co. Ltd.
Date : August 5, 2000 Date : August 5, 2000
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