<PAGE> 1
Exhibit 10.13
Dated the 30th day of May 2000
&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&
L E A S E
&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&
SIMON C.W. YUNG & CO.,
Solicitors &c.,
21st Floor, Hing
Yip Commercial Centre,
Nos.272-284 Des
Voeux Road Central,
HONG KONG SAR.
Ref. : CON/PKH/991727
<PAGE> 2
Factory
THIS LEASE is made the 30th day of May 2000
BETWEEN the Lessor whose name address registered office and description are more
particularly described in the First Schedule hereto (hereinafter called "THE
LESSOR" which expression shall where the context so admits include the
person/company for the time being entitled to the reversion immediately
expectant upon the term hereby created) of the one part and the Lessee whose
name address registered office and description are more particularly described
in the First Schedule hereto (hereinafter called "THE LESSEE" which expression
shall where the context so admits include his successors in title) of the other
part.
WITNESSETH as follows :
1. DEMISED PREMISES/TERM/RENT
1.01 The Lessor demises unto the Lessee All That the Demised Premises more
particularly described and set out in the Second Schedule hereto ("THE DEMISED
PREMISES") And Together with right to use two car parking spaces as designated
from time to time by the Lessor ("THE CAR PARKING SPACES") free of payment of
rent save and except the rates and management fees (if any) And Together with
the use in common with the Lessor and all others having the like right of the
entrance staircases passages landings and lavatories (if any) of the building of
which the Demised Premises form part more particularly described in the said
Second Schedule ("THE BUILDING") in so far as the same are necessary for the
proper use and enjoyment of the Demised Premises and the Car Parking Spaces (and
except in so far as the Lessor may from time to time restrict such use) and
together with the use in common with others of the lifts escalators and central
air-conditioning, if any, (whenever the same shall be operating) TO HOLD the
same unto the Lessee for the term of years as set out in the Third Schedule
hereto Subject to the payment of the rent ("THE RENT") and in manner more
particularly described and set out in the Third Schedule hereto And Subject to
and with the benefit of the Deed of Mutual Covenant and the Management Agreement
(if any) of the Building.
2. LESSEE`S COVENANTS
2.01 The Lessee hereby covenants with the Lessor as follows :-
(a) TO PAY RENT
To pay the Rent on the days and in manner described and set out in the
said Third Schedule.
(b) TO PAY AIR-CONDITIONING AND OTHER CHARGES
To pay or discharge all air-conditioning (if any), maintenance or
management fee or charges in respect of the Demised Premises and the Car
Parking Spaces duly and in accordance with the provisions of the Deed of
Mutual Covenant and Management Agreement (if any) of the Building.
(c) TO PAY RATES TAXES, ETC.
To pay and discharge all rates taxes assessments duties charges
impositions and outgoings of an annual or recurring nature now or
hereafter to be assessed imposed or charged by the
2
<PAGE> 3
Government of Hong Kong or other lawful authority upon the Demised
Premises and the Car Parking Spaces or upon the owner or occupier
thereof (Government rent and Property Tax (if any) and outgoings of a
capital or non-recurring nature only (if any) excepted) Provided That
all charges and outgoings in relation to the Lessee`s own installations
shall be borne by the Lessee solely.
(d) TO PAY GAS, WATER AND ELECTRICITY CHARGES
To pay and discharge all charges for gas water electricity and telephone
rental and other outgoings now or at any time hereafter consumed by the
Lessee and chargeable in respect of the Demised Premises and to make all
necessary deposits therefor.
(e) USER
Not to use the Demised Premises for any purpose other than for the
purpose and under the name as described and set out in the said Third
Schedule and not to use the Car Parking Spaces for other purposes except
for parking of vehicles belonged to the Lessee.
(f) NOT TO USE DEMISED PREMISES AS SLEEPING QUARTERS OR DOMESTIC PREMISES
Not to use or permit or suffer the Demised Premises or any part thereof
to be used as sleeping quarters or as domestic premises within the
meaning of the Landlord and Tenant (Consolidation) Ordinance or similar
legislation for the time being in force.
(g) NOT TO PERMIT ILLEGAL OR IMMORAL USE
Not to use or permit or suffer the Demised Premises to be used for any
illegal or immoral purpose or for any purpose which is in contravention
of the covenants terms and conditions contained in the Government Lease
or Conditions under which the Demised Premises are held from the
Government and not to carry on any trade or business thereon which is
now or may hereafter be declared to be an offensive trade under the
Public Health & Urban Services Ordinance or any other Ordinances or
Regulations and any enactment amending or substituting the same.
(h) TO KEEP INTERIOR ETC. IN REPAIR
To keep all the interior of the Demised Premises including the flooring
and interior plaster or other finishes or rendering to walls floors and
ceilings and the Lessor`s fixtures therein including all doors windows
installations/wiring/pipes/drains in the Demised Premises for the supply
of water gas electricity and for sanitation (inclusive of basins sinks
baths and sanitary conveniences) in good clean and tenantable repair and
condition and properly preserved and painted and so to maintain the same
at the expense of the Lessee and to deliver up the same to the Lessor at
the expiration or sooner determination of the said term in like
condition (fair wear and tear excepted).
(i) TO PROTECT INTERIOR FROM APPROACHING TYPHOONS
To take all reasonable precautions to protect the interior of the
Demised Premises against damage by storm or typhoon or the like.
3
<PAGE> 4
(j) TO REPAIR AND REPLACE ELECTRICAL WIRING ETC. WITHIN THE DEMISED PREMISES
To repair or replace if so required by the appropriate supply company
statutory undertaker or authority (as the case may be) under the terms
of any Electricity Supply or similar Ordinance for the time being in
force or any Orders in Council or Regulations made thereunder all
electrical wiring installations and fittings within the Demised Premises
from the Lessee`s meter or meters to and within the same.
(k) TO KEEP SANITARY AND WATER APPARATUS USED EXCLUSIVELY IN GOOD REPAIR
To keep the sanitary and water apparatus used exclusively by the Lessee
and his servants agents and licensees in good clean and tenantable
repair and condition (fair wear and tear excepted) to the satisfaction
of the Lessor and in accordance with the Regulations or by-laws of all
Public Health and other Government Authorities concerned.
(l) TO PERMIT LESSOR TO ENTER AND VIEW TO REPAIR, ETC.
To permit the Lessor and all persons authorised by him at all reasonable
times upon prior appointment except in case of emergency to enter and :-
(i) view the state of repair of the Demised Premises, to take inventories of
the fixtures therein, to carry out any works or repairs which may be
required to be done, and during the last three months of the said term
to show the Demised Premises to prospective tenants or purchasers
Provided That the Lessor shall cause as little interference to the
Lessee as reasonably possible; and
(ii) carry out any works or repairs in respect of the Demised Premises in the
Building Provided That in this connection the Lessor shall be
responsible to make good all damage done to the Demised Premises.
(m) TO EXECUTE REPAIR ON RECEIPT OF NOTICE
On receipt of any reasonable notice from the Lessor or his authorised
representatives specifying any works or repairs which they require to be
done and which are the responsibility of the Lessee within a reasonable
times to put in hand and execute the same with all possible despatch and
without any delay.
(n) NOT TO ERECT INSTALL OR ALTER PARTITIONING FIXTURES ETC. WITHOUT
LESSOR`S CONSENT
Not without the previous written consent of the Lessor (which consent
shall not be unreasonably withheld) to erect install or alter any
fixtures partitioning or other erection or installation in the Demised
Premises or any part thereof.
(o) TO REMOVE ILLEGAL STRUCTURES
To remove at the cost of the Lessee any structure erections partitions
and other alterations put up by the Lessee at any time during the said
term if required by the Building Authority or other competent Government
Departments where the same were or have been put up by
4
<PAGE> 5
the Lessee with or without the consent of the Lessor to make good all
damage caused by such removal. The Lessor shall not be responsible to
the Lessee for any loss suffered by the Lessee in any way as a result of
such renewal.
(p) NOT TO CUT INJURE OR MAIM WALLS, ETC.
Not to cut maim injure drill into mark or deface or permit or suffer to
be cut maimed injured drilled into marked or defaced any doors windows
walls beams structural members or any part of the fabric of the Demised
Premises nor any of the plumbing or sanitary apparatus or installations
included therein without the previous consent of the Lessor which
consent shall not be unreasonably withheld.
(q) NOT TO DRIVE NAILS ETC. INTO CEILINGS WALLS OR FLOORS
Not to drive or insert or permit or suffer to be driven or inserted any
nails screws hooks brackets or similar articles into the ceilings walls
or floors of the Demised Premises without the previous consent of the
Lessor which shall not be unreasonably withheld nor without the like
consent to lay or use any floor covering which may damage the existing
flooring.
(r) NOT TO DISPLAY SIGNS EXCEPT NAME ETC. IN PLACES PROVIDED
Not to affix or display or permit or suffer to be affixed or displayed
outside the Demised Premises any signboard sign decoration or other
device whether illuminated or not which may be visible from outside the
Demised Premises save that :-
(i) the Lessee shall be entitled at his own expense in display his name
exhibited in English and Chinese in such form or lettering or characters
to be approved by the Lessor on the Directory Boards (if the same are
provided in the Building).
(ii) the Lessee shall be entitled at his own expense to have his name painted
or affixed in plain lettering and characters to be approved by the
Lessor on the Lessee`s entrance door or doors.
If the Lessee carries on business under a name other than his own name,
he shall notify the Lessor of the name under which his business is
carried on and shall be entitled to have that name displayed painted or
affixed as aforesaid but the Lessee shall not be entitled to change the
business name without the previous written consent of the Lessor which
the Lessor may give or withhold at his discretion and without prejudice
to the foregoing, the Lessor may, in connection with any application for
consent under this Clause, require the Lessee to produce such evidence
as he may think fit to show that no breach of Clause 2(al) has taken
place or is about to take place.
(s) NO HANGING IN COMMON PARTS
Not to use or cause or permit the use of the corridors staircases or
other common passages of the Building for the purpose of drying laundry
or hanging or placing or storing any article or thing thereon or therein
and not to permit the Lessee`s agents servants employees guests invitees
to use the same for loitering or eating.
(t) NOT TO ENCUMBER OR OBSTRUCT PASSAGES AND COMMON AREAS, ETC.
5
<PAGE> 6
Not to encumber or obstruct or permit to be encumbered or obstructed
with any box packaging or other obstruction of any kind or nature any of
the entrance staircases landings passages lifts lobbies or other parts
of the Building in common use and not to leave rubbish or any other
article or thing in any part of the Building not in the exclusive
occupation of the Lessee.
(u) NOT TO LAY WIRING OR CABLES ETC. IN THE PUBLIC AREAS
Not to lay install affix or attach any wiring cables or other articles
or things in or upon any of the entrances staircases landings
passageways lobbies or public area.
(v) NO SUPPORTS ETC. ERECTED ON EXTERIOR WALLS
Not to install or affix or erect any supports or any iron brackets or
venetian blinds or sun blinds of any description to or on any part of
the exterior walls of the Building for any purpose including the
installation of air-conditioners without prior written approval of the
Lessor.
(w) NO OPENINGS ON EXTERIOR WALL
Not to make any openings on any part of the exterior walls of the
Building.
(x) NO SHELTERS ON FLAT ROOFS, ETC.
Not to erect any shelters or coverings on any part of the flat-roofs or
roof of the Building.
(y) NO WIRING FROM WINDOW
Not to erect or hang any wire or aerial wiring from the windows or
outside the exterior walls of the Building.
(z) NOT TO OVERLOAD
Not to store or place any goods machinery or other things on or in any
part of the Demised Premises which impose a loading exceeding 150 lbs.
per square foot.
(aa) COMPLYING WITH GOVERNMENT REGULATIONS
All machinery placed on or affixed to the Demised Premises must be
cushioned and the number of workers working or staying in the Demised
Premises must be restricted in accordance with Government Regulations.
(ab) NOT TO INSTALL FURNITURE, ETC. WITHOUT PRIOR GOVERNMENT PERMISSION
Not to install any furnace boiler or other plant or equipment in the
Demised Premises or use any fuel that might in any circumstances produce
smoke without first obtaining permission in writing from the
Commissioner of Labour Provided That such installation or user shall not
amount to a breach of any covenants terms and conditions in the
Government Lease or Conditions or the Deed of Mutual Covenant and the
Management Agreement (if any) of the Building.
6
<PAGE> 7
(ac) FIRE-FIGHTING EQUIPMENT
All fire-fighting equipment (if any) installed in the Demised Premises
shall be and remain the property of the Lessor and the Lessee shall take
due care thereof and in particular the Lessee shall not allow such
equipment to be moved to any other position. The Lessee shall further
pay the annual charge or fees of all the fire-fighting equipment
installed in the Demised Premises.
(ad) TO ELIMINATE AND REDUCE VIBRATION AND DUMPING PRODUCED BY MACHINERIES
The Lessee shall mount and equip his machinery particularly machinery
with horizontal reciprocating action and every part thereof with
anti-vibration absorbers and anti-dumping absorbers of such types and
designs as first approved of in writing by the Lessor`s architect and
shall comply with all directions or orders of the Lessor for eliminating
and reducing vibrations and dumping produced by the operation and
running of any of the machinery installed at the Demised Premises.
(ae) NOT TO ALTER SMOKE LOBBY DOORS
Not to alter the position of the smoke lobby doors or to make any
additions to such doors.
(af) NOT TO OVERLOAD LIFTS
Not to overload the lifts in the Building in excess of their maximum
capacity and to be responsible for any damage caused by any breach
hereof.
(ag) NOT TO PREPARE FOOD OR PERMIT ODOURS
Not to prepare or permit or suffer to be prepared any food in the
Demised Premises or to cause or permit any offensive or unusual odours
to be produced upon permeate through or emanate from the Demised
Premises.
(ah) NOT TO PRODUCE MUSIC OR NOISE AUDIBLE OUTSIDE
Not to produce or permit or suffer to be produced any music or noise
(including sound produced by broadcasting or any apparatus or equipment
capable of producing reproducing receiving or recording sound) so as to
cause a nuisance to other users of the Building and where music is to be
regularly played to install at the Lessee`s cost or expense and to the
satisfaction of the Lessor adequate sound proving or insulation devices
in the Demised Premises.
(ai) NOT TO PERMIT ANY NUISANCE OR ANNOYANCE
Not to do or permit or suffer to be done any act or thing which may be
or become a nuisance or annoyance to the Lessor or to the tenants or
occupiers of the other premises in the Building or in any adjoining or
neighbouring building.
(aj) NOT TO KEEP ITEMS OF COMBUSTIBLE OR HAZARDOUS GOODS
7
<PAGE> 8
Not to keep or store or permit or suffer to be kept or stored in the
Demised Premises any arms ammunition gun-powder salt-petre kerosene or
other explosive or combustible substance or otherwise unlawful or
dangerous or hazardous goods.
(ak) NOT TO KEEP ANIMALS OR PETS AND TO PREVENT INFECTION
Not to keep or permit or suffer to be kept any animals or pets inside
the Demised Premises and to take all such steps and precautions to the
satisfaction of the Lessor to prevent the Demised Premises or any part
thereof from becoming infested by termites rates mice roaches or any
other pests or vermin.
(al) NOT TO ASSIGN UNDERLET, ETC.
Not to assign underlet part with possession of or transfer the Demised
Premises and/or the Car Parking Spaces or any part thereof or any
interest therein nor permit or suffer any arrangement or transaction
whereby any person who is not a party to this Lease obtains the use
possession occupation or enjoyment of the Demised Premises and/or the
Car Parking Spaces or any part thereof irrespective of whether any
rental or other consideration is given therefor. The demise shall be
personal to the Lessee named in this Lease and without in any way
limiting the generality of the foregoing, the following acts and events
shall, unless approved in writing be deemed to be breaches of this
Clause :-
(i) in the case of a Lessee which is a partnership, the taking in of one or
more new partners whether on the death or retirement of an existing
partner or otherwise.
(ii) in the case of a Lessee who is an individual (including a sole surviving
partner or a partnership Lessee) the death insanity or other disability
of that individual to the intent that no right to use possess occupy or
enjoy the Demised Premises or any part thereof shall vest in the
executors administrators personal representatives next of kin trustee or
committee of any such individual.
(iii) in the case of a corporation any reconstruction amalgamation merger or
voluntary liquidation or any change in shareholding or in the control of
ultimate beneficial ownership.
(iv) the giving by the Lessee of a Power of Attorney or similar authority
whereby the donee of the power obtains the right to use possess occupy
or enjoy the Demised Premises or any part thereof or does in fact use
possess occupy or enjoy the same.
(am) NOT TO BREACH GOVERNMENT LEASE OR CAUSE INSURANCE TO BE VOIDED OR
PREMIUM INCREASED
Not to do or permit or suffer to be done any act deed matter or thing
whatsoever which amounts to a breach of any of the covenants terms and
conditions under which the land on which the Building stands is held
from the Government or whereby any insurance on the Building against
loss or damage by fire and/or claims by third parties for the time being
in force may be rendered void or voidable or whereby the premium thereon
may be increased Provided That if as the result of any act deed matter
or thing done permitted or suffered by the Lessee the premium on any
such policy of insurance shall be increased the Lessor shall be entitled
at his option either to terminate this demise or to continue the same
upon payment by the Lessee of the additional premium and upon such other
terms and conditions as the Lessor may at his discretion think fit to
impose.
8
<PAGE> 9
(an) TO COMPLY WITH DEED OF MUTUAL COVENANT AND ORDINANCES, ETC.
To obey and comply with and to indemnify the Lessor against the breach
of the Deed of Mutual Covenant and Management Agreement (if any) of the
Building and all ordinances regulations by-laws rules and requirements
of any Governmental or other competent authority relating to the conduct
and carrying on of the Lessee`s business on the Demised Premises or to
any other acts deeds matters or things done permitted suffered or
omitted therein or thereon by the Lessee or any employee agent or
licensee of the Lessee.
(ao) TO MAKE GOOD DAMAGE TO BUILDING
To make good at the expenses of the Lessee any portion of the Building
which may be damaged through any omission act or default of the Lessee
or of any of his servants visitors or through the escape of water fire
smoke or fumes from or explosion in the Demised Premises.
(ap) TO REIMBURSE LESSOR FOR WORK DONE
To reimburse the Lessor for the costs of any work which the Lessee is
liable to perform hereunder and has defaulted in performing the same
including but not limited to all reasonable costs incurred by the Lessor
in cleansing or clearing any of the drains pipes or sanitary or plumbing
apparatus choked or stopped up owing to the careless or improper use or
neglect by the Lessee or any employee agent or licensee of the Lessee.
(aq) TO BE RESPONSIBLE FOR LOSS OR DAMAGE CAUSED BY INTERIOR DEFECTS
To be wholly responsible for any loss damage or injury caused to any
other person whom-soever directly or indirectly through the defective or
damaged condition of any part of the interior of the Demised Premises
save and except where such loss damage or injury arises through the
breach or non-observance or non-performance by the Lessor of the
Lessor`s covenants or through the neglect or lack of proper skill on the
part of the Lessor or any employee contractor or agent of the Lessor and
Subject as aforesaid to make good the same by payment or otherwise and
to indemnify the Lessor against all actions proceedings claims and
demands made upon the Lessor in respect of any such loss damage or
injury and all costs and expenses incidental thereto.
(ar) TO BE RESPONSIBLE FOR CONTRACTORS SERVANTS AGENTS AND LICENSEES
To be responsible to the Lessor for the acts neglects and defaults of
all contractors servants agents and licensees of the Lessee as if they
were the acts neglects and defaults of the Lessee himself and for the
purposes of this Lease "LICENSEE" shall include any person present in
using or visiting the Demised Premises with the consent of the Lessee
express or implied.
(as) TO NOTIFY LESSOR OF ACCIDENTS AND DEFECTS IN FITTINGS AND FIXTURES
To notify the Lessor of any accidents to or defects in the water pipes
gas pipes electrical
9
<PAGE> 10
wire or fittings or other facilities provided by the Lessor in the
Demised Premises whether or not the Lessee is liable hereunder for the
repair of the same upon the same coming to the knowledge of the Lessee.
(at) TO REMOVE REFUSE TO A PLACE SPECIFIED BY LESSOR
To remove each day from the Demised Premises all refuse and rubbish to
such spot as shall be specified by the Lessor from time to time and
subject to such reasonable rules and regulations as the Lessor may from
time to time determine.
(au) RE-INSTATE DEMISED PREMISES
Unless the Lessor otherwise agrees in writing to re-instate and restore
the Demised Premises to their original condition and to make good all
damage caused or occasioned by the erection and removal of alterations
partitions or other erections.
(av) TO YIELD UP AT THE END OF THE TERM
Quietly to yield up the Demised Premises together with all fixtures
fittings and additions therein and thereto which the Lessor agrees to
retain and the Car Parking Spaces at the expiration or sooner
determination of this demise in good clean and tenantable repair and
condition (fair wear and tear excepted).
3. LESSOR`S COVENANTS
3.01 The Lessor hereby covenants with the Lessee as follows :-
(a) TO PAY GOVERNMENT RENT ETC.
That the Lessor will pay the Government rent payable in respect of the
Demised Premises and the Car Parking Spaces and the Property Tax (if
any) payable in respect of the Demised Premises and any expenses of a
capital or non-recurring nature Provided That all charges and outgoings
in relation to the Lessee`s own installations shall be borne by the
Lessee solely.
(b) THE LESSEE SHALL HAVE QUIET ENJOYMENT
That the Lessee paying the Rent and management fees and maintenance
charges hereby agreed to be paid on the days and in manner herein
provided for payment of the same and observing and performing the
covenants agreements stipulations and conditions herein contained and on
the Lessee`s part to be observed and performed shall peaceably hold and
enjoy the Demised Premises and the Car Parking Spaces during the said
term without any interruption by the Lessor or any person lawfully
claiming under or in trust for the Lessor.
(c) TO KEEP IN REPAIR THE OUTSIDE MAIN WALLS AND ROOF, ETC.
To keep the outside main walls structure foundations and roof of the
Building and the lift entrance hall corridor passages staircases and the
convenience (if any) intended for the common use of the occupants at all
times in complete repair (including drains gutters and external pipes)
in accordance with the relevant provisions of the Deed of Mutual
Covenant and/or the Management Agreement (if any).
10
<PAGE> 11
4. It is hereby further expressly agreed and declared as follows :-
(a) OTHER PROVISIONS LESSOR`S RIGHT OF RE-ENTRY
If the Rent and/or air-conditioning charges and/or management fees and
maintenance charges and/or rates and/or other charges hereby covenanted
to be paid or any part thereof shall be unpaid for seven days after the
same shall become payable (whether legally or formally demanded or not)
or if the Lessee shall fail or neglect to observe or perform any of the
covenants agreements stipulations or conditions herein contained and on
the Lessee`s part to be observed and performed or if the Lessee shall
become bankrupt or being a corporation shall go into liquidation (save
for the purposes of amalgamation or reconstruction) or if any petition
shall be filed for winding up of the Lessee or if the Lessee otherwise
becomes insolvent or makes any composition or arrangement with creditors
or shall suffer any execution to be levied on the Demised Premises and
the Car Parking Spaces or otherwise on the Lessee's goods then and in
any such case it shall be lawful for the Lessor at any time thereafter
to re-enter the Demised Premises and the Car Parking Spaces or any part
thereof in the name of the whole whereupon this demise shall absolutely
cease and determine but without prejudice to any right of action by the
Lessor in respect of any outstanding breach or non-observance or
non-performance of any of the covenants agreements stipulations and
conditions herein contained and on the Lessee`s part to be observed and
performed and to the Lessor's right to deduct all loss and damage
thereby incurred from the deposit paid by the Lessee in accordance with
Clause 5 hereof.
(b) WRITTEN NOTICE SUFFICIENT EXERCISE OF RIGHT
A written notice served by the Lessor on the Lessee in manner
hereinafter mentioned to the effect that the Lessor thereby exercises
the power of re-entry herein contained shall be full and sufficient
exercise of such power without actual entry on the part of the Lessor.
(c) ACCEPTANCE OF RENT NOT WAIVER OF BREACH OF COVENANT
Acceptance of Rent (or management fees) by the Lessor shall not be
deemed to operate as waiver by the Lessor of any right to proceed
against the Lessee in respect of any breach non-observance or
non-performance by the Lessee of any of the covenants agreements
stipulations and conditions herein contained and on the Lessee`s part to
be observed and performed.
(d) LESSOR NOT LIABLE FOR OVERFLOW OF WATER/LESSEE TO INDEMNIFY LESSOR
AGAINST CERTAIN CLAIMS
The Lessor shall not be under any liability to the Lessee or to any
other person whomsoever in respect of any loss or damage to person or
property sustained by the Lessee or any such other person caused by or
through or in any way owing to the overflow of water from any where
within the Building save and except where such loss or damage to person
or property arises through the breach or non-observance or
non-performance by the Lessor of the Lessor`s covenants or through the
neglect or lack of proper skill on the part of the Lessor or any
employee contractor or agent of the Lessor. Subject as aforesaid, the
Lessee shall fully and effectually indemnify the Lessor from and against
all claims and demands made against the Lessor by any person in respect
of any loss damage or injury caused by or through or in any way owing to
the overflow of water from the Demised Premises or to the neglect or
11
<PAGE> 12
default of the Lessee his servants or agents or interior of the Demised
Premises or any fixtures or fittings for the repair of which the Lessee
is responsible hereunder and against all costs and expenses incurred by
the Lessor in respect of any such claim or demand.
(e) NO ADVANCE PAYMENT OF RENT
No advance payment of Rent has been paid to the Lessor except in
pursuance to Clause 1 hereof.
(f) LESSOR NOT LIABLE FOR BREAKDOWN IN AIR-CONDITIONING OR LIFTS
The Lessor shall not in any circumstances be liable to the Lessee for
any defect in or failure or breakdown of electricity gas or water supply
lifts services or air-conditioning system nor shall the Rent or
management fees and maintenance charges abate or cease to be payable on
account thereof.
(g) SUSPENSION OR ABATEMENT OF RENT IN CASE OF FIRE, ETC.
If the Demised Premises and the Car Parking Spaces or the Building or
any part thereof shall at any time during the demise rendered be
inaccessible or so destroyed or damaged owing to fire water storm wind
typhoon defective construction white ants earthquake subsidence of the
ground or any calamity beyond the control of the Lessor as to render the
Demised Premises and the Car Parking Spaces unfit for habitation and use
and the policy or policies of insurance effected by the Lessor shall not
have been vitiated or payment of the policy moneys refused in whole or
in part in consequence of any act or default of the Lessee or if at any
time during the continuance of this demise the Demised Premises and the
Car Parking Spaces or the Building shall be condemned as a dangerous
structure or a demolition order or closing order shall become operative
in respect of the Demised Premises and the Car Parking Spaces or the
Building then the Rent hereby reserved or a fair proportion thereof
according to the nature and extent of the damage sustained or order made
shall after the expiration of the then current month be suspended and
ceased until the Demised Premises and the Car Parking Spaces or the
Building shall again be rendered accessible or fit for habitation and
use (as the case may be) Provided That should the Demised Premises and
the Car Parking Spaces or the Building not have been reinstated in the
meantime either the Lessor or the Lessee may at any time after three
months from the occurrence of such damage or destruction or order give
to the other of them notice in writing to determine this present demise
and thereupon the same and everything herein contained shall determine
as from the date of the occurrence of such destruction or damage or
order of the Demised Premises and the Car Parking Spaces or of the
Building becoming inaccessible but without prejudice to the rights and
remedies of either party against the other in respect of any antecedent
claim or breach of the covenants agreements stipulations terms and
conditions herein contained or of the Lessor in respect of the Rent and
management fees and other charges payable hereunder prior to the coming
into effect of the suspension.
(h) FOR THE PURPOSE OF DISTRAINT RENT IN ARREARS IF NOT PAID IN ADVANCE ON
DUE DATE
For the purposes of Part III of the Landlord and Tenant (Consolidation)
Ordinance Cap.7 and of these presents the Rent and management fees and
other charges payable in respect of the Demised Premises and the Car
Parking Spaces shall be and be deemed to be in arrears if
12
<PAGE> 13
not paid in advance at the times and in manner hereinbefore provided for
payment thereof. All costs and expenses for and incidental to any
distraint shall be paid by the Lessee and is recoverable from him as a
debt on a full indemnity basis. For the purpose of distraint and these
presents, any outstanding management fees payable in respect of the
Demised Premises and the Car Parking Spaces shall be deemed to be
arrears of rent.
(i) NO WAIVER BY LESSOR
No condoning excusing or waiving by the Lessor of any default breach or
non-observance or non-performance by the Lessee at any time or times of
any of the Lessee`s obligations herein contained shall operate as a
waiver of the Lessor's rights hereunder in respect of any continuing or
subsequent default breach or non-performance or non-observance or so as
to defeat or affect in any way the rights and remedies of the Lessor
hereunder in respect of any such continuing or subsequent default or
breach and no waiver by the Lessor shall be inferred from or implied by
anything done or omitted by the Lessor unless expressed in writing and
signed by the Lessor. Any consent given by the Lessor shall operate as a
consent only for the particular matter to which it relates and in no way
shall be considered as a waiver or release of any of the provisions
hereof nor shall it be construed as dispensing with the necessity or
obtaining the specific written consent of the Lessor in the future
unless expressly so provided.
(j) LESSOR CAN EXHIBIT LETTING NOTICES DURING LAST THREE MONTHS OF TERM
During the three months immediately preceding the expiration of the said
term, the Lessor shall be at liberty to affix and maintain without
interference upon any external part of the Demised Premises and/or the
Car Parking Spaces a notice stating that the Demised Premises and/or the
Car Parking Spaces are to be let and such other information in
connection therewith as the Lessor shall reasonably require and the
Lessor shall be at liberty with prior arrangement with the Lessee to
show the Demised Premises to prospective tenants.
(k) LESSOR IS ENTITLED TO CHANGE THE NAME OF THE BUILDING
The Lessor shall at any time during the said term be entitled to change
the name of the Building on giving reasonable notice to the Lessee and
in respect thereof the Lessor shall not be liable in damages to the
Lessee or be made a party to any other proceedings or for costs of
expenses of whatsoever nature incurred by the Lessee as a result of such
change.
(l) NO WARRANTY AS TO USER
The Lessor does not warrant that the Demised Premises and the Car
Parking Spaces are suitable for any particular purpose.
(m) SERVICE OF NOTICE
Any notice required to be served hereunder shall if to be served on the
Lessee be sufficiently served if addressed to the Lessee and sent by
prepaid post to or delivered at the Demised Premises or the Lessee`s
registered office or last known place of business or residence in Hong
Kong and if to be served on the Lessor shall be sufficiently served if
addressed to the Lessor and sent by prepaid post to or delivered to the
Lessor's registered
13
<PAGE> 14
office or address as shown in this Agreement.
(n) STAMP DUTY AND COSTS
All the costs of and incidental to the preparation completion and
registration of this Lease and the stamp duty, registration fee and
other disbursements on this Lease shall be borne by the parties herein
in equal shares.
5. (a) LESSEE`S DEPOSIT
The Lessee shall on the execution hereof deposit and maintain with the
Lessor a deposit of the amount as set out in the Third Schedule hereto
(HK$156,406.00 being part of the deposit deposited under a Tenancy
Agreement in respect of the Demised Premises dated the 28th July 1997
and made between the parties hereto shall be transferred to this Lease
as a deposit and the balance thereof in the sum of HK$17,379.00 shall be
refunded by the Lessor to the Lessee upon the signing hereof) to secure
the due observance and performance by the Lessee of the covenants
agreements stipulations and conditions herein contained and on the
Lessee`s part to be observed and performed. The said deposit shall be
retained by the Lessor throughout the said term free of any interest to
the Lessee and in the event of any breach or non-observance or
non-performance by the Lessee of any of the said covenants agreements
stipulations or conditions aforesaid, the Lessor shall be entitled to
terminate this demise and to forfeit the said deposit by way of
liquidated damages without prejudice to the Lessor's right to claim
against the Lessee for further damages suffered by the Lessor as a
result of the Lessee`s breach of this Lease. Notwithstanding the
foregoing, the Lessor may in any such event at his option elect nor to
terminate this demise and forfeit the deposit but to deduct therefrom
the amount of any monetary loss incurred by the Lessor in consequence of
the breach non-observance or non-performance by the Lessee in which
event the Lessee shall as a condition precedent to the continuation of
the demise deposit with the Lessor the amount so deducted and if the
Lessee shall fail so to do the Lessor shall forthwith be entitled to
re-enter the Demised Premises and the Car Parking Spaces and to
determine this demise and forfeit the deposit as hereinbefore provided.
(b) REPAYMENT OF DEPOSIT
Subject as aforesaid, the said deposit shall be refunded to the Lessee
by the Lessor without interest within thirty days after the expiration
or sooner determination of this demise and the delivery of vacant
possession to the Lessor or within thirty days of the settlement of the
last outstanding claim by the Lessor against the Lessee in respect of
any breach non-observance or non-performance of any of the covenants
agreements stipulations or conditions herein contained and on the part
of the Lessee to be observed and performed whichever is the later.
(c) TRANSFER OF DEPOSIT
In the event that the Lessor shall assign its reversionary interest in
the Demised Premises, the Lessee shall agree to the Lessor transferring
the said deposit to the assignee and shall waive its right to recover
the said deposit from the Lessor upon receipt of a written notice from
the Lessor that such transfer has been effected.
6. COOLING TOWERS
14
<PAGE> 15
6.01 It is hereby agreed by and between the parties hereto that in the event
of any competent authorities of the Government of Hong Kong serving notice on
the Lessor or the Lessee ordering to remove the cooling tower(s) which was/were
erected by the Lessee at the external walls of the Building, the Lessee shall
forthwith remove the same at its own costs and expenses and at the like expenses
reinstate the external walls to the condition as at the date(s) of the said
cooling tower(s) was/were erected and the Lessee shall indemnify the Lessor for
all loss and damages which the Lessor has suffered or may suffer as a result of
such removal and reinstatement. The Lessor will in such event grant a licence to
the Lessee to use 2 areas of 11' x 11' each on the roof of the Building to
install 2-100 tons (RT) cooling tower(s) (weight 1500 kg. each) such areas shall
be designated by the Lessor Provided That subject to compliance by the Lessor
with Clause 6.02 :-
(a) the Lessee shall ensure that the installation of the said cooling towers
shall not cause damage to the Building.
(b) the Lessee shall be responsible for all expenses for the repair and
maintenance of the said cooling towers and the said areas to the
satisfaction of the Lessor.
(c) such installation shall not be in breach of any ordinances or
regulations of Hong Kong; and
(d) at the expiration or sooner determination of the demise the Lessee shall
at its own cost and expense remove the said cooling towers and at like
cost and expense reinstate the said areas to their original condition to
the satisfaction of the Lessor.
6.02 The Lessor shall ensure that the Building is at all times constructed
and/or reinforced so as to be able safely to carry the said cooling towers and
to be in compliance with all loading requirements of any ordinances or
regulations of Hong Kong in relation to the installation of the cooling towers.
7. LAWS
7.01 This Lease shall be construed and take effect in accordance with Hong
Kong Law.
8. HEADING NOTES
8.01 The heading notes are intended for guidance only and do not form part of
this Lease nor shall any of the provisions in this Lease be construed or
interpreted by reference thereto or in any way affected or limited thereby.
THE FIRST SCHEDULE ABOVE REFERRED TO
LESSOR : JING WAH GARMENTS MANUFACTORY COMPANY LIMITED () whose
registered office is situate at 8th Floor, Jing Wah
Building, 10 Sam Chuk Street, San Po Kong, Kowloon,
Hong Kong.
LESSEE : TELCOM SEMICONDUCTOR HONG KONG LIMITED () whose
registered office is situate at Ground Floor, Jing Wah
Industrial Building, 10 Sam Chuk Street, Sanpokong,
Kowloon, Hong Kong.
15
<PAGE> 16
THE SECOND SCHEDULE ABOVE REFERRED TO
DEMISED PREMISES : ALL THOSE UNITS B and C on the GROUND FLOOR, the whole
of the FIRST FLOOR, the whole of the SECOND FLOOR, UNIT
A on the FIFTH FLOOR and UNIT A on the SEVENTH FLOOR of
NO.10 SAM CHUK STREET Kowloon Hong Kong erected on NEW
KOWLOON INLAND LOT NO.4437.
THE THIRD SCHEDULE ABOVE ABOVE REFERRED TO
TERM : For the term of FIVE YEARS commencing on the 11th day
of July 2000 and expiring on 10th day of July 2005
(both days inclusive).
RENT : HK$156,406.00 (apportionment of which is set out
hereunder) per calendar month (exclusive of rates)
payable in advance clear of all deductions on the 11th
day of each and every calendar month. The first payment
to be made on the 11th day of July 2000.
<TABLE>
<CAPTION>
Premises Area Monthly Rent
-------- ---- ------------
<S> <C> <C>
Unit B on Ground Floor 3,600 sq. ft. HK$30,780.00
Unit C on Ground Floor 50 sq. ft. HK$ 4,050.00
The whole of 1st Floor 10,000 sq. ft. HK$40,500.00
The whole of 2nd Floor 10,000 sq. ft. HK$40,500.00
Unit A on 5th Floor 5,769 sq. ft. HK$23,364.00
Unit A on 7th Floor 4,250 sq. ft. HK$17,212.00
</TABLE>
USER : As factory use under the name of Lessee.
DEPOSIT : HK$156,406.00.
IN WITNESS the parties hereto have duly executed this Lease the day and year
first above written.
SEALED with the Common Seal of )
the Lessor and SIGNED by ) Chan Jing & Chan Kwok Wing, two of
) its directors
in the presence of :- )
Herny T.T. Chiu
Solicitor Hong Kong SAR
Messrs. Simon C.W. Yung & Co.
SEALED with the Common Seal of )
the Lessee and SIGNED by ) Wang Shi Hsiong
) Vice President Asia Operations
)
in the presence of :- )
16
<PAGE> 17
Louis Wong, Financial Controller
RECEIVED on the day and year first above written of and from the
Lessor being refund of balance of deposit in the sum of HK$17,379.00.
----------------------------------------
the Lessee
17