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Unilaw are expertise in dealing with legal issues in the Real Estate Business, Forwarding & Insurance, E-commerce & IT, Franchising & Technology Transfer.
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THIS DEFINITIVE COMTRACT (“Contract”) is made and entered into as _______________ by and between the following parties:
1. Assignor
Name: ______________________________
______________________________
Registered Head Office: _________________
[]province, []
Tel: ([]-211) []2460
Fax: _________________
Represented by: _________________
Position: Director
of the one part, hereinafter referred in this Contract to as Assignor,
and
2. Assignee
Name: ______________________________
Registered Head Office: Lot1, _________________
[]Province, []
Tel: not available on the Signing Date hereof
Fax: not available on the Signing Date hereof
Represented by: _________________
Position: _________________
_______________________________. is a [] of [] (mentioned hereunder), established and operating under the Law on [] in [] in accordance with [] No. [] granted by the [][] Committee on 14 _________________.
of the other part, hereinafter referred in this Contract to as Assignee,
Assignor and Assignee hereinafter collectively referred in this Contract to as Parties, separately referred in this Contract to as Party.
RECITALS
WHEREAS, Assignor owns certain Assets that it uses in the conduct of the Business (as defined below); and
WHEREAS, Assignee desires to purchase from Assignor, and Assignor desires to sell to Assignee, such Assets upon the terms and subject to the conditions of this Contract.
NOW THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereto agree as follows:
1. DEFINTIONS
As used herein, the terms below shall have the following meanings. Any of such terms, unless the context otherwise requires, may be used in the singular or plural, depending upon the reference.
1.01 “FIL” means the Law on [] in [] , as amended at the time of closing of this Contract;
1.02 “Ancillary Agreements” mean the In-principle Contract on Assignment of Assets and Land [] of 27 December [], as amended Addendum of _________________to In-principle Contract on Assignment of Assets and Land [] between [] and Assignor, and the Agreement on Settlement of Loans and Elimination of Mortgage and Pledge of Assets of _________________signed between [], _________________., []Branch of [] of [] and Assignor;
1.03 “Assets” mean all of Assignor’s right, title and interest in and to the Assets, claims, rights of any kind, whether tangible or intangible, real or personal and constituting, or used or useful in connection with, or related to, the Assets set forth on Annex “B” and “C” attached hereto, including Factory, including, without limitation, all of Assignor’s right, title and interest in the followings, as of the Signing Date of this Contract:
(a) all spare parts, accessories, fittings of the Assets;
(b) all Books and Records on the Assets, including, without limitation, all technical specifications, catalogs, operational instruction’s manual, user’s or operational guides, etc.;
(c) all Asset and Factory Rights;
(d) to the extent transferable, all Permits;
(e) all Fixtures, Equipment and Machines, Factory built on Land Site (as defined below);
(f) to the extent transferable or assignable, all rights under or pursuant to all warranties, representations and guarantees made by suppliers in connection with the Assets, furnished to Assignor pertaining to or otherwise affecting the Assets;
(g) any and all of the aforesaid Assets and or Factory built Land Site.
1.04 “Assumed Liabilities” shall mean the obligations and liabilities assumed by Assignor pursuant to Section 4.02 herein;
1.05 “Assumed Contracts” means the Contract as defined in Section 1.13 and or 1.23 hereunder;
1.06 “Books and Records” shall mean the following to the extent pertaining to the Assets: (i) all records and lists of Assignor, (ii) all books, files, reports, drawings and records of every kind maintained by Assignor;
1.07 “Factory” means, including without limitation, all buildings, structural buildings, workshops, offices, ancillary buildings, power stations and outlets, water supply stations and outlets, Assets, which are all built on, attached, affixed, affixed to, constructed, assembled, erected on and within the domain of the Land [] of Assignor as described more fully on Annex “A”, but shall not include the Business of Assignor;
1.08 “Business” mean all garment production and business activities which are permitted to Assignor as described in Assignor’s Business Registration (as defined below), or to Assignee as described in Assignee’s [] (as defined below), including without limitation, any income-making activities which are engaged by Assignor or Assignee respectively;
1.09 “Assignor’s BOM Approval” means written approval of all owners, members of Assignor, whose name is inscribed in Assignor’s Business Registration as of the Signing Date of this Contract, approving the assignment of Assets to Assignee and return the Land [] to [][] Committee, an original copy thereof is attached hereto and marked Annex “D” of this Contract;
1.10 “Assignor’s Legal Representative” mean _________________, whose name in inscribed in Assignor’s Business Registration as Director of Assignor as of the Signing Date of this Contract, and designated by all owners, members of Assignor in writing as described more fully on Annex “E” as of the Signing Date herein;
1.11 “Land []” means all of Assignor’s right, title and interest in and to the piece of land with total areas granted by [][] Committee to Assignor under Land [] [] No. [] dated 15 July [] (entered on Book No. [] []/[]/[] dated 5 November [] on Grant of Land [] []) and under Land Lease No. [] signed on 24 February [] (under Decision No. []/[]dated 5 November [] by [][] committee to lease the land to Assignor) between Assignor and []Department of Natural Resources and Environment, as described and identified more fully on certified copy of Land [] [] and Land Lease attached hereto and marked Annex “F” hereof;
1.12 “Return and Withdrawal of Land []” means all acts undertaken by Assignor to completely return Land [] to and liquidate Land Lease as described in Section 1.11 herein with [][] Committee in accordance with []ese law and actual procedures stipulated by [][] Committee;
1.13 “Contracts” means any agreement, contract, contract right, lease, purchase, note, loan, evidence of indebtedness, letter of credit, franchise agreement, undertaking, covenant not to compete, employment agreement, license, instrument, obligation or commitment to which Assignor is a party or is legally bound and which relates to the Factory or the Assets or the transactions contemplated in this Contract, whether oral or written;
1.14 “Employment Benefits” mean any and all benefits that any employee of Assignor are entitled to receive from Assignor under the []of [] as of termination date of employment contract, including all deferred, outstanding compensations, wages and salaries, allowances and pensions, social and medical insurance, which are all payable by Assignor to all of its employees or to []Social Insurance Fund;
1.15 “Encumbrance” shall mean any claim, lien, pledge, option, charge, security interest, deed of trust, mortgage, encumbrance or other right of third parties, whether voluntarily incurred or arising by operation of law, and includes, without limitation, any agreement to give any of the foregoing in the future, and any contingent sale or other title retention agreement or lease in the nature thereof;
1.16 “Outstanding Loan” means the total outstanding loan amounts owed by Assignor to the Lender (as defined below) as of the Signing Date of this Contract in accordance with written Letter No. []/[]-[].[] issued by Lender on 11 _________________ plus any interest amount incurred against that total outstanding loan amount from 11 _________________ to the Closing Date, which is attached hereto and marked Annex “G” of this Contract;
1.17 “Secured Assets and Land []” mean all Assets and Land [] as defined in this Section, which are mortgaged, pledged, guaranteed by Assignor to Lender as a security for the performance of Assignor’s obligations to repay the Outstanding Loan to Lender under loan contracts signed between Lender and Assignor. The Secured Assets and Land [] are stipulated in [] of Registration of Secured Transactions issued by competent secured transaction agencies in []province;
1.18 “Lender” means the Branch of [] of [] in []province;
1.19 “Deposit Amount” means the Additional Contingent Payment, is an amount of ___________________________to be deposited to the Deposit Account as stipulated in Section 4.06(b) for the purpose of paying the Outstanding Loan for Assignor to Lender as stipulated in Agreement on Settlement of Loans and Elimination of Mortgage and Pledge of Assets and this Contract;
1.20 “Deposit Account” means the bank deposit account opened by and in the name of Assignee at the bank of Lender in []province in accordance with Agreement on Settlement of Loans and Elimination of Mortgage and Pledge of Assets, for the purpose of this Contract;
1.21 “Purchase Price” means the total amounts payable by Assignee for purchase of all Assets and taking over the Land Site as more fully stipulated in Section 4.04 of this Contract;
1.22 “Closing Date” means when Assignee has received all original documents as stipulated in Section 5 of this Contract;
1.23 “Supply Contract” mean all supply contracts signed between Assignor and its suppliers, and all amendments thereof, for the construction and installation of Factory, purchase of the Assets, and under which, Assignor still owes any and such suppliers for any amount stipulated in such supply contracts;
1.24 “Business Registration” means all the [] of Business Registration granted by []Department of Planning and Investment to and in the name of Assignor, a notarised copy of it is attached hereto and marked “Annex E” of this Contract, all amendments thereof, including all other licenses, permits, franchises, approvals, authorizations, consents or orders of, or filings with, any agency or authority of []province or [], necessary for the conduct of, or relating to the operation of the Business;
1.25 “[]” means the [] No. [] granted by [][] Committee to Assignee for establishment and operation of Assignee’s company in Lot 1, [] [], [] town, []province, [], a notarised copy of it is attached hereto and marked “Annex I” of this Contract;
1.26 “Permits” mean all other licenses, permits, franchises, approvals, authorizations, consents or orders of, or filings with by Assignor, any agency or authority of []province or [], necessary for the conduct of, or relating to the operation, usage, and or exploitation of Assets, Factory, and Land [], including without limitation, construction permits, [] of fire distinguishing and prevention, certification of environmental registration, approval of designs of Factory [or the documents as mentioned in Section 5.01(f) for replacement], [] of quality standard of Assets and or Factory;
1.27 “Subsidiary” means (a) any branch, office, partnership, joint venture, company where Assignor hold more than 50% or more of the total voting power in that branch, office, partnership, joint venture, company;
1.28 “Taxes” means any and all taxes imposed upon the sale, assignment, transfer and delivery of Assets or transactions contemplated in this Contract, including without limitation, corporate income tax, import duties, personal income tax, value-added taxes, which are more fully stipulated in Section 11 hereof, except the value-added tax against the Purchase Price as more fully stipulated in Section 4.04 herein;
1.29 “Fees” means any fee imposed against the registration of change in ownership of the Assets and all transactions contemplated in this Contract, including without limitation, registration fees, which are all more fully stipulated in Section 11 hereof;
1.30 “Land Site” means the total land area of [],603 square meters (m2) located at Lot 1, [] [], [] town, []province, [].
2. CONDITIONS PRECEDENT
2.01 Conditions Precedent. Assignor and Assignee do hereby mutually acknowledge and recognize that no rights of any kind or to the Purchase Price shall vest in Assignor and Assignee shall have no obligations to Assignor hereunder, unless and until the following conditions precedent (Conditions Precedent) are satisfied and attached to this Contract by or on _________________:
(a) This Contract has been executed under legitimate corporate seal by Legal Representative of Assignor;
(b) Prior to or latest on the Signing Date of this Contract, Assignee has received Assignor’s BOM Approval in form and contents acceptable to Assignee as described in Section 1.09 of this Contract;
(c) Prior to or latest on the Signing Date of this Contract, Assignee has received an original Statement signed under legitimate corporate seal by Legal Representative of Assignor, in form and contents acceptable to Assignee, declaring that Assignor shall take its own responsibilities for settlement of any and all outstanding amounts under Assumed Contracts with any and all suppliers in respect of any and all Assets, as described in Section 1.05 herein, and that no provision contained in any and all Assumed Contracts requires that proprietorship in any and all Assets still remains in the name of any and all suppliers as of the Signing Date hereof. Even in such a case, Assignor shall take its own responsibilities for dealing with the suppliers and keep Assignee harmless from any claims made by any of such suppliers;
(d) Prior to or latest on the Signing Date hereof, Assignee has received written Affidavit and Declaration made by Assignor and related person(s) in both corporate and personal status, in form and contents acceptable to Assignee, on the performance and fulfillment of this Contract and Ancillary Agreements as described in Section 1.02 herein;
(e) Prior to or latest on the Signing Date of this Contract, Assignee has received a notarized photocopy of Assignor’s Business Registration as described in Section 1.24 herein;
(f) Assignee has received a notarized photocopy of decision on Return and Withdrawal of Land [] as described in Section 1.12 herein, which is duly issued by [][] Committee in the name of Assignor.
2.02 This Contract is deemed to be a proposal by Assignor to acquire an acceptance of Assignee to purchase the Assets and Factory as contemplated herein, which Assignee is not obligated to consider or accept until the above Conditions Precedent are met. It is agreed that the Parties hereto will act in good faith, and that each will diligently seek to satisfy the Conditions Precedent.
2.03 If the Conditions Precedent is not satisfied in full by or on _________________, this Contract shall be null and void and neither Party hereto shall bear any obligation or responsibility to other Party from the Signing Date hereof, except otherwise expansion thereof is specifically decided by Assignee in writing at its sole discretion.
3. CONTRACT NUMBER AND SIGNING DATE
3.01 Contract Number: __________________
3.02 Contract Signing Date: ___________________
4. PURCHASE AND SALE OF ASSETS
4.01 Transfer of Assets. Upon the terms and subject to the conditions contained herein, at the Closing Date, Assignor sells, conveys, transfers, assigns and delivers to Assignee, and Assignee acquires from Assignor, the Assets.
4.02 Assumption of Liabilities. Upon the terms and subject to the conditions contained herein, at the Closing Date, Assignee shall assume all obligations and liabilities accruing, arising out of, or relating to events or occurrences happening after the Closing Date under the Assumed Contracts or with respect to the operation by Assignee of the Business after the Closing Date (“Assumed Liabilities”); PROVIDED, HOWEVER, that Assignee shall not assume or have any liability with respect to any obligation or liability in connection with any such Assumed Contract or with respect to the operation of the Business of Assignor, in each case occurring prior to, at and after the Closing Date.
4.03 Excluded Liabilities. Except as otherwise expressly provided for in this Agreement, Assignee shall not assume, or otherwise be responsible for, any liabilities or obligations of Assignor, whether actual or contingent, matured or unmatured, liquidated or unliquidated, or known or unknown whether arising out of occurrences prior to, at or after the Closing Date (“Excluded Liabilities”), which Excluded Liabilities include, without limitation:
(a) any liability or obligation to or in respect of any employees, including former and or existing employees of Assignor including, without limitation, (i) any employment contract, whether or not written, between Assignor and any person, (ii) any liability under any Employment Benefit Plan at any time maintained, contributed to or required to be contributed to by or with respect to Assignor or under which Assignor may incur liability, or any contributions, benefits or liabilities therefore, or any liability with respect to Assignor’s withdrawal or partial withdrawal from or termination of any Employment Benefit Plan, (iii) any obligation for those employees of Assignor on long-term and short-term disability at the Closing Date and (iv) any claim of an unfair labor practice, or any claim under any group insurance or under any state unemployment compensation or worker’s compensation law or regulation or under employment discrimination law or regulation of [], which shall have been asserted prior to, at and after the Closing Date or is based on acts or omissions which occurred prior to, at and after the Closing Date;
(b) any liability or obligation of Assignor in respect of any Taxes and Fees;
(c) any liability or obligation arising from any injury to or death of any person or damage to or destruction of any property, whether based on negligence, breach of warranty, strict liability, product liability, enterprise liability or any other legal or equitable theory arising from defects or alleged defects in products manufactured and/or sold by or on behalf of Assignor or any other person or entity or from actions or inactions prior to Closing Date under or resulting from any []ese law;
(d) any liability or obligation of Assignor arising out of or related to any action against Assignor or any action which adversely affects the Assets, Factory and which shall have been asserted on or prior to the Closing Date or to the extent the basis of which shall have arisen prior to, at and after the Closing Date;
(e) any liability or obligation of Assignor resulting from entering into, performing its obligations pursuant to or consummating the transactions contemplated by, this Agreement;
(f) any expenses of Assignor incurred in connection with the transactions contemplated by this Agreement; and
(g) any liability or obligation related to any other Contract other than Assumed Contracts.
4.04 Purchase Price. The full consideration for the sale, assignment, transfer, delivery of the Assets and completion of the transactions contemplated herein is _____________________, excluding the value-added tax imposed upon that amount (Purchase Price), subject to the adjustment thereof pursuant to the result of the Due Diligence stipulated in Section 4.09 hereof. The value-added tax shall be paid by Assignee at rates decided in writing by []Tax Authority. The Purchase Price will be paid by telegraphic transfer from Assignee to Assignor at its bank account(s) opened at []Branch of [] of [] on the schedules as stipulated in Section 4.06 hereunder. Apart from the amount of Purchase Price stipulated herein, no additional, extra amount will be accepted by Assignee, except value-added tax against Purchase Price as required by []Tax Authority as mentioned in this Section 4.04.
4.05 Closing Costs: Assignment Taxes and Fees. All applicable taxes and fees which may be applicable to and may be levied on the sale, assignment, transfer or delivery of the Assets or otherwise stipulated herein, including but are not limited to transferring Fees, Taxes and Fees imposed on any income generated by Assignor under the sale, assignment, transfer or delivery of the Assets or transactions contemplated herein whether levied on Assignor or Assignee, shall be borne by Assignor.
4.06 Payment.
(a) Initial Payment. As partial consideration of the sale, assignment, transfer and delivery of the Assets to be sold, assigned, transferred and delivered by Assignor to Assignee pursuant to this Contract, Assignee shall, within one (1) working day from date on which ASSIGEE HAS RECEIVED ALL ORIGINAL DOCUMENTS AS DESCRIBED HEREUNDER in this Section 4.06(a), pay to Assignor the aggregate amount (the “Initial Payment”) of ____________________ by wire transfer to bank account as stipulated herein of Assignor:
(i) the original Agreement on Settlement of Outstanding Loans and Elimination of Mortgage and Pledge of Assets, which has been duly signed between Assignee, []Branch of [] of [] and Assignor;
(ii) this Definitive Contract, which has been duly signed by Assignee and Assignor;
(iii) Assignee has received in full all original documents, and papers on the titles, ownership of and in connection with the Assets, Factory and Land [] as stipulated in the Agreement on Settlement of Loans and Elimination of Mortgage and Pledge of Assets, including but are not limited to the followings: (1) original Land [] [] No. [] []/[]/[] dated 5 November [] and all amendments thereof if any; (2) Decision []/[]dated 5 November [] and all amendments thereof if any; (3) all original vouchers and documents related to Assets and Land [], which are currently kept by []Branch of [] of []; (4) original Affidavit and Declaration made by Assignor and concerned person; and (5) []s of Elimination of Mortgage and Pledge for Assets and Land [], which are issued by competent state registries of secured transactions;
(iv) The amount under Initial Payment will be given priority for payment of all Employment Benefits.
(b) Additional Contingent Payment. As partial additional consideration of the sale, assignment, transfer and delivery of the Assets to be sold, assigned, transferred and delivered by Assignor to Assignee pursuant to this Contract, Assignee shall remit the additional amount (the “Additional Payment”) of __________________________) by wire transfer to Deposit Account of Assignee, which is opened at []Branch of [] of []. The Additional Contingent Payment shall only be made on Closing Date, PROVIDED, HOWEVER ALWAYS, THAT all conditions set forth in Section 4.07 hereunder have been fully satisfied.
(c) Final Payment. As partial additional consideration of the sale, assignment, transfer and delivery of the Assets to be sold, assigned, transferred and delivered by Assignor to Assignee pursuant to this Contract, Assignee shall pay to Assignor the final (the “Final Payment”) of _________________________-), PROVIDED, HOWEVER ALWAYS, THAT all conditions set forth in Section 4.08 hereunder have been fully satisfied.
4.07 Conditions for Additional Contingent Payment. The amount of ______________________ as mentioned in Section 4.06(b) above shall only be paid by Assignee to Assignor or disbursed by Assignee to []Branch of [] in accordance with provisions set forth in Section 7 and other terms and conditions stipulated in the Agreement on Settlement of Outstanding Loans and Elimination of Mortgage and Pledge of Assets signed between Assignee, []Branch of [] and Assignor on 21 _________________.
4.08 Conditions for Final Payment. The amount of _______________________ as mentioned in Section 4.06(c) above shall only be fully paid by Assignee to Assignor within forty-five (45) working days from the Closing Date if neither of the following events occurs:
(a) If there is any claims by third parties against Assignee on any of Assignor’s liabilities, responsibilities, obligations as mentioned in Assumed Liabilities, Assumed Contracts, Excluded Liabilities, Taxes and Fees as mentioned in this Contract and or as a result of execution and performance of this Contract, in whatever the nature and forms of claims and existence as a result of execution and performance of this Contract, Assignee shall notify Assignor in writing of such claims and Assignor shall take its own responsibilities for properly resolving such claims with all payments of Assignor. If Assignor fails to resolve any of such claims and or fails to pay as required by such claims within a duration specified in Assignee’s written notification, and Assignee is sufferred by any of such claims as a result of inaction by Assignor, Assignee will be entitled to deduct amount claimed from the Final Payment and pay same to relevant third parties without prior consent from Assignor;
(b) Assignee shall conduct the check of quality of all Assets sold, assigned, transferred, delivered by Assignor under this Contract, and schedule to complete the check latest on the Closing Date hereof, PROVIDED, HOWEVER ALWAYS, THAT, the Factory must be empty (no employees and officers of Assignor working in the Factory) on the close of business working hour of 27 _________________. If during the check, Assignee discovers any defect of Assets that does not allow Assets workable in normal condition; any missing of accessories, parts, fittings, etc of any Assets; any unusable and or unworkable Assets; any broken-down Assets or spare-part thereof; or the likes, Assignee shall notify Assignor in writing of such things, and Assignor shall be responsible for applying any actions to remedy any and all such Assets in order for them to be workable in normal condition. If Assignor fails to take such actions within a duration specified in Assignee’s written notification, Assignee will take such actions with reimbursement from Assignor by deducting any expenses related to and incurred from taking such actions from Final Payment prior to payment to Assignor and without prior consent from Assignor;
4.09 Due Diligence. The Due Diligence against Assignor for the purpose of this Contract and transactions contemplated herein has been conducting by —————————–, Assignee’s local counsel, since early _________________. The Board of Directors of Assignee shall have the right to, based on result of due diligence reported by Assignee’s local counsel prior to or on the date of making the Final Payment, make final decision as to whether to continue purchasing the Assets and carrying out the transactions contemplated herein.
5. CLOSING
5.01 Closing Date. The closing of the transactions contemplated by this Contract (the “Closing Date”) shall take place at the place agreed to by Assignor and Assignee, commencing at [10:00 a.m.] [] time on the date that is one (1) working day following date on which Assignee has received in full original version of the following documents that are satisfied to Assignee’s requirements at Assignee’s discretion, or such other date as the Parties hereto may mutually determine:
(a) All documents stipulated in Section 2.01 of this Contract;
(b) All documents stipulated in Section 4.06(a) and 4.06(b) of this Contract;
(c) [] for incorporating Assignee, granted by [][] Committee, which is accepted by Assignee;
(d) [] of Elimination of Mortgage and Pledge of Assets and Land [] from []Branch of [] of [];
(e) Construction Permit [] dated 25 December [] and all annexes and amendments thereof if any;
(f) original Minutes on Check of Construction, which is required by Construction Permit [] and signed by []Department of Construction;
(g) Decision to lease the Land Site from [][] Committee to Assignee;
(h) Written notice of []Branch of [] of [], addressed to and in the name of Assignee and Assignor, notifying that Outstanding Loans of Assignor has been fully paid from Deposit Account of Assignee, and that all Assets of Assignor are free for sale, assignment, transfer and delivery to Assignee.
5.02 Ownership of Assets. On the Closing Date, all Assets irrevocably belong to ownership and exclusive right of Assignee without any obstacles, restrictions or interference by Assignor or any third parties, including []ese relevant authorities.
6. REPRESENTATIONS AND WARRANTIES OF ASSIGNOR
Assignor hereby represents and warrants to Assignee as follows, which representations and warranties are, as of the Signing Date of this Contract, and will be, as of the Closing Date, true, complete and correct:
6.01 Organisation of Assignor. Assignor is a company duly established, validly existing and in good standing under the laws of [].
6.02 Subsidiaries. Assignor does not have any Subsidiaries that are used in the conduct of the Business or that own any of the Assets. Assignor has no direct or indirect stock or other equity or ownership interest (whether controlling or not) in any corporation, association, partnership, joint venture or other entity relating to the Business.
6.03 Authorization. Assignor has full power and authority (including full corporate power and authority) to execute and deliver this Contract and to perform its obligations herein, subject to approval of []Branch of [] of [] on release and elimination of any and all Assets and Land [], which are mortgaged and pledged at []Branch of [] under the Agreement on Settlement of Outstanding Loans and Elimination of Mortgage and Pledge of Assets. Without limiting the generality of the foregoing, the Board of Members and Board of Directors of Assignor have duly authorized the execution, delivery, and performance of this Contract by Assignor. This Contract constitutes the valid and legally binding obligation of Assignor, enforceable in accordance with its terms and conditions. Assignor has all requisite power and authority, and has taken all corporate and personal action necessary, to own, lease and operate the Assets, and to conduct the Business as it is presently being conducted.
6.04 Assets. Assignor will obtain and transfer at the Closing Date valid title to the Assets and upon the consummation of the transactions contemplated hereby, Assignee will acquire valid title to all of the Assets, free and clear of any Encumbrances or restrictions on transfer. The tangible Assets are free from defects (latent and patent), have been maintained in accordance with normal industry practice and are in good operating condition and repair (ordinary wear and tear excluded), and ready and useable for the operations as contemplated.
6.05 Contracts and Commitments.
(a) Contracts. Section 6.05(a) sets forth a complete and accurate list of all Contracts of the following categories:
(i) contracts not made in the ordinary course of business;
(ii) employment contracts and severance agreements, including, without limitation, Contracts that will result in the payment by, or the creation of any commitment or obligation (absolute or contingent) to pay on behalf of Assignee or Assignor any severance, termination, or other similar payments to any present or former personnel following termination of employment or otherwise as a result of the consummation of the transactions contemplated by this Contract;
(iii) labor or union contracts;
(iv) contracts related to any of the Asset Rights;
(v) distribution, franchise, license, sales or commission contracts;
(vi) partnership, joint venture or other agreements or arrangements involving sharing of profits, expenses, or assets;
(vii) contracts or commitments to sell, lease or dispose of assets other than in the ordinary course of business;
(viii) contracts containing covenants limiting the freedom of Assignor to engage in any line of business or compete with any person;
(ix) contracts involving expenditures or liabilities, actual or potential, in excess of $[] or otherwise material to the Business or the Assets; and
(x) governmental or regulatory permits required to conduct the Business as presently conducted.
Assignor has delivered to Assignee true, correct and complete copies of all of such Contracts, including without limitation, the Assumed Contracts, including all amendments and supplements thereto.
(b) Absence of Breaches or Defaults. All of the Assumed Contracts are legal, valid, binding, and enforceable in accordance with their terms and are in full force and effect. Assignor has duly performed all of its obligations under the Assumed Contracts to the extent those obligations to perform have accrued, and no violation of, or default or breach under any Assumed Contracts by Assignor or, to the knowledge of Assignor, any other party has occurred and neither Assignor nor, to the knowledge of Assignor, any other party has repudiated any provisions thereof.
6.06 No Conflict or Violation. Neither the execution, delivery or performance of this Contract nor the consummation of the transactions contemplated hereby, nor compliance by Assignor with any of the provisions hereof, will (a) violate or conflict with any provision of the Business Registration or bylaws of Assignor, (b) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, or result in the creation of any Encumbrance upon any of the Assets under, any of the terms, conditions or provisions of any Contracts or Supply Contracts, indebtedness, note, bond, indenture, security or pledge agreement, commitment, license, lease, franchise, Permits, agreement, or other instrument or obligation (i) to which Seller is a party or (ii) by which the Assets are bound, (c) violate any statute, rule, regulation, ordinance, code, order, judgment, ruling, writ, injunction, decree or award, or (d) impose any Encumbrance, restriction or charge on the Assets or the Business except in the case of each of subparagraph (b), (c) and (d) above, for such violations, conflicts, breaches, defaults, terminations, accelerations or creations of Encumbrances which, in the aggregate would not have a material adverse effect on the Assets, the Business or on the ability of Assignor to consummate the transactions contemplated hereby, or (e) require any notice to, declaration, filing or registration with, or authorization, consent or approval of, or permit from, any []ese governmental or regulatory body or authority, or any other person or entity.
6.07 Books and Records. Assignor has made and kept (and given Assignee access to) Books and Records, which, in reasonable detail, accurately and fairly reflect the activities of the Business. Assignee acknowledges that it is not entitled to review or obtain any books and records of the Assignor which do not relate to the Business or transactions contemplated in this Contract.
6.08 Litigation. Assignor represents and warrants that there is no action, order, writ, injunction, judgment or decree outstanding or any claim, suit, litigation, proceeding, labor dispute, arbitral action, governmental audit or investigation (collectively, “Actions”) pending, or to the best of Assignor’s knowledge, threatened or-anticipated (a) against, related to or affecting the Business or the Assets, or, with respect to the Business or the Assets, Assignor or any employees, officers or directors of Assignor as such, (b) seeking to delay, limit or enjoin the transactions contemplated by this Contract or (c) in which Assignor is a plaintiff and related to or affecting the Business or the Assets, including any derivative suits brought by or on behalf of Assignor. Assignor is not in default with respect to or subject to any judgment, order, writ, injunction or decree of any court or governmental agency, and there are no unsatisfied judgments against the Business or the Assets or against Assignor in connection with the Business or the Assets. There is not a reasonable likelihood of an adverse determination of any pending Action which may have a material adverse effect on the Assignor or the Business.
6.09 Labor Matters.
(a) Termination of Labor Contracts. Assignor hereby represents and commits to terminate all labor contracts, including any “actual” employment relationship with Assignor by _________________, and settle all Employment Benefit Plan to those employees, including former employees in accordance with the []of [] prior to or on the date of liquidation of land lease by Assignor with []Department of Natural Resources and Environment. Procedures for termination of labor contracts and “actual” employment relationship between Assignor and employees must be strictly complied with the []of []. Procedures for and announcement of termination must be first reviewed by Assignee beforehand but Assignor agrees that Assignee will not resume or take any responsibilities for that review. Assignor hereby commits not, prior to, during and after any and all steps of processes of and procedures for termination, to make or cause to be understood by employees or any state authorities of [] that Assignee will commit, receive, recruit or employ any of those employees who are or will be terminated by Assignor, prior to, during and after any and all steps of processes of and procedures for termination of employment contracts and “actual” employment relationship with Assignor. All Employment Benefit Plan made to all employees shall be in the sole account of Assignor. Assignor agrees that Assignee may offer employment to any of those employees of Assignor prior to termination by Assignor of employment contracts with its employees.
(b) Labor Recruiting Plan. Assignee would consider giving priority to recruit and employ employees working for Assignor and workforce in []province to work at the Factory of Assignee. Employment of employees of Assignor and workforce in []province shall be considered to be undertaken in accordance with labor recruiting plan (“Labor Recruiting Plan”) which is sole decided by Assignee and shall only be relevant to any employee who passed the examination or test conducted by Assignor. Assignor acknowledges and recognises that Assignee is not obliged to employ any employees of Assignor.
6.10 Liabilities. With respect to the Assets, Assignor shall take its own responsibilities to settle any and all liabilities, obligations or commitments of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether matured or unmatured), including, without limitation, Tax and Fee liabilities due or to become due, except liabilities, obligations or commitments reflected on or reserved against on the Balance Sheet dated _________________ or incurred in the ordinary course of Business since _________________to the Closing Date specified hereof.
6.11 Compliance with [] Law. Assignor hereby represents and warranties to strictly comply with []ese law applicable to the transactions contemplated in this Contract, Agreement on Settlement of Outstanding Loans and Elimination of Mortgage and Pledge of Assets, any Contract, Supply Contracts, employment contracts, loan contracts and all other contracts signed by Assignor prior to the Signing Date of this Contract.
6.12 No Other Agreements to Sell the Assets. Neither Assignor nor any of its officers, directors, shareholders or Subsidiary have any commitment or legal obligation, absolute or contingent, to any other person or firm other than the Assignee to sell, assign, transfer, dispose of or license any of the Assets or to enter into any agreement or cause the entering into of an agreement with respect to any of the foregoing.
6.13 Social and Medical Insurance Funds. Assignor shall be responsible for settling all outstanding social and medical insurance of its employees, which are due and payable by it to its employees and social and medical insurance fund in []province. Assignor does hereby commit that the Purchase Price paid to it under this Contract shall be given priority for payment of all outstanding amounts of social and medical insurance prior to the Closing Date specified herein or within any duration prescribed by []governmental agencies.
7. COVENANTS OF ASSIGNOR AND ASSIGNEE
Assignor and Assignee each covenants with the other as follows:
7.01 Further Assurances. Upon the terms and subject to the conditions contained herein, each of the Parties hereto agrees, both before and after the Closing Date, (i) to take, or cause to be taken, all actions and to do, or cause to be done, all reasonable things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Contract; (ii) to execute any documents, instruments or conveyances of any kind which may be reasonably necessary or advisable to carry out any of the transactions contemplated hereunder, and (iii) to cooperate with each other in connection with the foregoing.
7.02 Notification of Certain Matters. From the Signing Date hereof through the Closing Date, Assignor shall give prompt notice to Assignee of (a) the occurrence, or failure to occur, of any event which occurrence or failure would be likely to cause any representation or warranty contained in this Contract or in any annex hereto to be untrue or inaccurate in any respect and (b) any failure of Assignor or any of its representatives to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under this Contract or any annex hereto; PROVIDED, HOWEVER, that such disclosure shall not be deemed to cure any breach of a representation, warranty, covenant or agreement or to satisfy any condition.
7.03 Conduct of Business. From the Signing Date hereof through the Closing Date, Assignor shall, except as contemplated by this Contract, operate the Business in the ordinary course of the Business and in accordance with past practice and will not take any action inconsistent with this Contract or with the consummation of the Closing Date.
7.04 Release of Security Interest. Assignor shall be responsible for delivering to Assignee a written release by the holders of all security interests or other liens on the Asset rights as soon as possible from the Signing Date hereof but no later than the Closing Date.
7.05 Return of Documents.
(a) Return of Original Value-Added Tax Invoices. As soon as possible within seven (7) working days from the Closing Date, Assignee shall return to Assignor original value-added tax invoices and vouchers related to Assets (not including Land [] []) released by []Branch of [] of []. Assignor shall, not later than four (4) working days from the date its receipt of original value-added tax invoices and vouchers from Assignee, carry out necessary actions to provide Assignee with notarised photocopy of all of such returned original value-added tax invoices and vouchers to Assignee.
(b) Return of Land []. Assignee shall return the original Land [] [] directly to []Department of Natural Resources and Environment for receiving the land [] [] of the Land Site in Assignee’s name. Assignee shall not return the original Land [] [] to Assignor, except otherwise specifically required by []Department of Natural Resources and Environment or other competent authorities in []province.
(c) Return of Other Documents. Any claim for return of any original documents related to Assets other than those mentioned in Section 7.05(a) and 7.05(b) above shall not be accepted by Assignee.
7.06 Waiver. If any document which is required in Annex D and or this Contract to be provided by Assignor to Assignee can not be properly provided by Assignor prior to or on the Closing Date of this Contract, at reasonable explanation and proposal by Assignor in writing, Assignee may consider to waive its requirements on supply of that document, subject to the sole consideration and decision of Assignee, which is not an obligation of Assignee to consider and accept Assignor’s proposal.
8. VIOLATIONS
8.01 Violation of this Contract. Assignor agrees and acknowledges that if any of the following cases of violations stipulated in this Section 8.01 occurs for any reasons and in whatever form of violation under the sole assessment and view of Assignee, Assignee and []Branch of [] of [] shall be fully entitled to deal with the Assets, Factory and Land [] of Assignor in accordance with the relevant provisions set out in Agreement on Settlement of Outstanding Loans and Elimination of Mortgage and Pledge of Assets without written prior consent or consultation with Assignor, to which, Assignee shall have full ownership right over and in connection with all Assets and Factory of Assignor after agreement with []Branch of [] of [], and shall be entitled to land [] to land area and location of Assignor in accordance with decision on withdrawal and grant to lease by [][] Committee.
(a) Assignor is in breach of any term and condition set out in this Contract and or any of the Ancillary Agreements;
(b) Assignor refuses or fails to implement any or all terms and conditions set out in this Contract and or any of the Ancillary Agreements;
(c) Assignor fails to actively cooperate with, or refuse to cooperate with []Bank of [] and or Assignee for fulfillment of this Contract and or any of the Ancillary Agreement;
(d) Assignor is in breach of []ese law, including but is not limited to any violation on tax obligations to the State of [] or benefits and rights of employees of Assignor, which that violation would adversely affect or result in non-performance of this Contract and or any of the Ancillary Agreement;
(e) Assignor declares, announces or file application for dissolution, temporary suspension or suspension of operations of its company named herein;
(f) Assignor declares, announces or file application for bankruptcy of its company named herein or causes its company named herein claimed, sued or faced to request for bankruptcy, which is submitted by any person or entity, which Assignor can not arrange for that request be withdrawn within thirty (30) days from the effective date of that request.
8.02 Settlement of Assets and Land []s. Assignor agrees that if any of the cases of violation as mentioned in Section 8.01 above occurs, Additional Contingent Payment shall be used by Assignee for paying the Outstanding Loans of Assignor to []Branch of [] of [] in accordance with agreement with []Branch of [] of [] without any written prior consent or consultation with Assignor in order to affect the change in possession and right to use over and in connection with Assets, Factory and Land [] from the name of Assignor to the name of Assignee.
8.03 Assignor agrees and commits that if any of the cases of violation as mentioned in Section 8.01 occurs, Assignor shall not claim, prevent Assignee and []Branch of [] of [] from carrying out their rights in accordance with Section 8.01 and 8.02 above and other terms and conditions of this Contract and any of the Ancillary Agreements. Any claim or prevention undertaken by Assignor in such a case shall not be valid to Assignee and []Branch of [] of [] and relevant state authorities of [].
9. RISK OF LOSS
9.01 Risk of Loss. From the Signing Date hereof through the Closing Date, all risk of loss or damage to the Assets shall be borne by Assignor, and thereafter shall be borne by Assignee.
10. ACTIONS BY ASSIGNOR AND ASSIGNEE AFTER THE CLOSING
10.01 Delivery of Assets and Factory. Assignor and Assignee agree that they will fully and actively cooperate with each other for complete delivery of Assets, Land [], Land Site and other documents as specified in this Contract to Assignee after the Closing Date. Assignor further agrees that it will fully and actively cooperate with Assignee for resolving any issues at request of []ese relevant authorities, which relates to the Assets or transactions contemplated in this Contract and which relates to Assignor or requires involvement or participation of Assignor.
10.02 Survival of Representations, etc. All statements contained in this Contract or in any document, papers, [], annex, instrument or conveyance delivered by or on behalf of a Party pursuant to this Contract or in connection with the transactions contemplated hereby shall be deemed to be representations and warranties made by that Party pursuant to this Contract. The representations, warranties, covenants and agreements of Assignor and Assignee contained herein shall survive the consummation of the transactions contemplated hereby and the Closing Date, without regard to any investigation made by any of the Parties hereto.
10.03 Indemnification. Assignor shall indemnify, save and hold harmless Assignee, its affiliates and subsidiaries, and its and their respective representatives, from and against any and all costs, losses (including, without limitation, diminution in value), Tax, Fee, liabilities, obligations, damages, lawsuits, deficiencies, claims, demands, and expenses (whether or not arising out of third-party claims), including, without limitation, interest, penalties, costs of mitigation, losses in connection with []ese law (including, without limitation, any clean-up or remedial action), lost profits and other losses resulting from any shutdown or curtailment of operations, reasonable attorneys’ fees and all amounts paid in investigation, defense or settlement of any of the foregoing (herein, “Damages”), incurred in connection with, arising out of, resulting from or incident to (i) any breach of any representation or warranty or the inaccuracy of any representation, made by Assignor in or pursuant to this Contract; (ii) any breach of any covenant or agreement made by Assignor in or pursuant to this Contract; (iii) any Excluded Liability; or (iv) any and all actions, suits, proceedings, demands, judgments, assessments and reasonable costs and expenses incident to any of the foregoing.
11. TAXES AND FEES
11.01 Assignor’s Tax and Fee Obligations. All Taxes and Fees imposed upon or applicable to the assignment, transfer, sale, delivery of any and all Assets and the transactions contemplated herein, including assignment taxes and fees, import duties, land rentals, corporate income taxes, personal income taxes, contractor’s taxes, registration fees (applicable to any registration fee incurred to any of Assets, Factory, Land [] prior to the execution of this Contract), duties, etc. shall be borne by Assignor. Assignor agrees that apart from the Purchase Price stipulated herein, Assignee shall not be required to pay any additional amount in whatever nature and form. Assignor further agrees that if Assignee receives or is required by []ese relevant authorities for payment of any tax amount related to the assignment, transfer, sale, delivery of any and all Assets and the transaction contemplated herein, Assignee shall notify such []ese relevant authorities of Assignor’s obligations established herein and Assignor shall strictly comply with request of such []ese relevant authorities in accordance with []ese law.
11.02 Tax Imposed on Assignment of Assets. Notwithstanding the provisions set forth in Section 11.01 above, any and all taxes imposed upon the sale, assignment, transfer or delivery and any income generated from that sale, assignment, transfer or delivery of Assets and any transaction contemplated herein will be pay by Assignor (“Transferring Tax”).
11.03 Customs Taxes/Fees. Assignor hereby commits to settle all outstanding customs Taxes, Fees in respect of any Assets as of the Closing Date specified herein.
11.04 Infrastructure Fee. Assignee shall agree to pay infrastructure fee (“Infrastructure Fee”) to []governmental agency or any organisation, company developing the infrastructural areas within which the Land Site is located.
11.05 Commitment to Pay Taxes and Fees. Assignor does hereby commit to use Purchase Price for first settlement of all its outstanding Taxes and Fees to the relevant state authorities in []province.
12. EFFECTIVE DATE AND PRIORITY IN VALIDITY
12.01 Effective Date. This Contract shall become effective in full on either of the following dates whichever comes later and when all of the hereunder conditions have been satisfied:
(a) date on which the [] of Registration of Elimination of Mortgage and Pledge of Assets and Land [] is issued by competent secured transaction registry of [] or in []province;
(b) date on which the Assignor’s BOM Approval is issued;
(c) date on which this Contract is fully signed by Assignor and Assignee;
(d) date on which all Conditions Precedent have been fully satisfied.
12.02 Priority in Validity. In case there is any discrepancy among the terms and conditions of this Contract and any of the Ancillary Agreements as mentioned in Section 1.02 hereof, the terms and conditions of this Contract shall prevail for explanation, interpretation and settlement of any dispute arising out of or in connection with the sale, assignment, transfer, delivery and transactions contemplated in this Contract.
13. MISCELLANEOUS
13.01 Termination. This Contract may be terminated at any time prior to or on the Closing Date when Assignee is not decided by [][] Committee to lease the Land Site, PROVIDED, HOWEVER ALWAYS, THAT Assignor will not have the right to unilaterally terminate this Contract from the moment the amount of Initial Payment as set forth in Section 4.06(a) hereof has been made to it.
13.02 Refund of Amount under Initial Payment. In termination, Assignor is not entitled to any part of the Purchase Price set forth in Section 4.04 herein. Any portion of amount under the Purchase Price, which has been paid to Assignor under this Contract, must be refunded to Assignee no later than ten (10) days from the termination herein.
14. ASSIGNMENT
14.01 Non-Assignability. Neither this Contract nor any of the rights or obligations hereunder may be assigned by Assignor without the prior written consent of Assignee; except that Assignee may, without such consent, assign all such rights and obligations to a direct or indirect wholly-owned subsidiary of (or any partnership controlled by) []; PROVIDED that such assignment shall not relieve Assignor of any of its obligations hereunder. Subject to the foregoing, this Contract shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, and no other person shall have any right, benefit or obligation under this Contract as a third party beneficiary or otherwise.
15. NOTICES
15.01 Notices. All notices, requests, demands and other communications which are required or may be given under this Contract shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic or digital transmission method; the day after it is sent, if sent for next day delivery to a domestic address by recognized overnight delivery service; and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice shall be sent to:
(a) If to Assignor, addressed to:
_________________
_________________
[]province
[]
Fax: _________________
Attention: _________________
Position: Director
(b) If to Assignee, addressed to:
_________________.
_________________
[]Province
[]
Attention: _________________
Position: _________________
With a copy to Assignee’s local counsel at:
—————————–
or to such other place and with such other copies as either Party may designate as to itself by written notice to the others.
16. GOVERNING LAW AND DISPUTE RESOLUTION
16.01 Governing Law. This Contract shall be construed, interpreted in accordance with the laws of [].
16.02 Dispute Resolution. Any dispute arising out of or in connection with this Contract shall first be resolved through conciliation and amicable way among the Parties hereto. Failure to this will entitle any Party hereto to bring the dispute to either of the following body at the sole discretion of the claiming Party:
(a) The court of competent jurisdiction of [];
(b) The []of [] ([]) in accordance with its rules of arbitration. The claiming Party shall be entitled to appoint arbitrator in accordance with rules of [].
17. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS
17.01 Entire Agreement. This Contract and the Ancillary Agreements, together with all annexes hereto and thereto, constitute the entire agreement among the Parties pertaining to the subject matters hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties.
17.02 Amendments and Waivers. This Contract may not be amended except by an instrument in writing signed on behalf of each of the Parties hereto. No amendment, supplement, modification or waiver of this Contract shall be binding unless executed in writing by the Party to be bound thereby. No waiver of any of the provisions of this Contract shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.
18. MULTIPLE COUNTERPARTS
18.01 Multiple Counterparts. This Contract is executed in six (6) original copies each in English and []ese languages. Assignee shall keep four (4) original copies each in English and []ese languages. Assignor shall keep one (1) original copy each in English and []ese languages. []Branch of Bank shall keep one (1) original copy each in English and []ese languages for Investment and Development of []. All versions are of the sale validity. In case there is any discrepancy between the English and []ese versions, the English version shall prevail.
19. INVALIDITY AND TITLES
19.01 Invalidity. In the event that any one or more of the provisions contained in this Contract or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by []ese law, such invalidity, illegality or unenforceability shall not affect any other provision of this Contract or any other such instrument.
19.02 Titles. The titles, captions or headings of the Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Contract.
IN WITNESS WHEREOF, the Parties hereto have caused this Contract to be duly executed, by their respective officers thereunto duly authorized, all as of the Signing Date hereof.
Assignee )
_________________ )
Lot 1, [] []
[] town
[]province, [] )
)
)
) _______________________________
Name: []
Position: _________________
– and –
Assignor )
_________________ )
Lot 1, [] [] )
[] town
[]province, [] )
)
) _______________________________
Name: _________________
Position: Director
THIS CONTRACT is made on July 23, []
BETWEEN
The Transferor: [] Communication [] ([]) Co., Ltd.
(“Party A”)
Place of Registration: No. 9 [] Road
North [], [] Industry Park, []
[], [] Province,
[]
Legal Representative: Name: []
Position: General Manager
AND
The Transferee: [] ([]) Co., Ltd. (“Party B”)
P1ace of Registration: 158, [] Road, []-Park, [], [] Industrial
Park, [], [] Province,
[]
Legal Representative: Name: []
Position: Chairman of Board
RECITALS：
A) Party A agrees to transfer and Party B accepts to take the transfer of the right to use the land parcel No. [] located at the North [], [] Industrial Park, as set out in the Annex 1 hereto (“Land Parcel”);
B) Party A agrees to transfer and Party B accepts to take the transfer of the factory building together with the structures and installations (“Building”) constructed on the Land Parcel, as set out in the Annex 2 hereto, as well as the installations, equipment and office furniture set out in Annex 3 (“Equipment & Furniture”);
THEREFORE, both parties hereto have agreed upon the following terms and conditions:
CHAPTER l LAND PARCEL, BUILDING, FACILITY AND EQUIPMENT BRIEFING
Article 1 As confirmed in the certificates issued by the land and real estate registration authorities of [] INDUSTRIAL PARK, the Land Parcel is for industrial use, and the ending date of the right to use the Land Parcel is May 29, []. The total acreage thereof is [].68 square meters. The total space area of the Building constructed on the Land Parcel is [].84 square meters.
Article 2 Party A and Party B agree to transfer the Building and the right to use the Land Parcel in accordance with this Contract. For the avoidance of doubt, the ownership of the land use rights assigned hereunder vests in the []. Subject to Article 20, 21 and 22, the ownership of underground resources, hidden treasures and the urban infrastructure does not belong to Party A and therefore is not transferred by Party A to Party B hereunder.
Article 3 The Equipment and Furniture meanwhile transferred by Party A to Party B are listed in Annex 3 hereto. Party A shall obtain Party B’s prior written consent if it intends to move out any item listed in Annex 3 hereto.
CHAPTER 2 REPRESENTATIONS AND WARRANTIES
Article 4 Party A hereby represents and warrants to Party B as follows:
4.1 Party A is a wholly-owned foreign enterprise duly organized, validly existing as a legal person under the 1aws of the [];
4.2 Party A has full legal right, power and authority to execute this Contract and to observe and perform its obligations hereunder;
4.3 Party A has taken all appropriate and necessary corporate action to authorize the execution of this Contract and to authorize the performance and observance of the terms and conditions hereunder;
4.4 Party A owes no pending liability to any third party in connection with the Land Parcel, the Building, and the Equipment and Furniture to be transferred to Party B;
4.5 To the time when Party B obtains the title documents of the Land Parcel and Building according to this Contract, Such Land Parcel, Building, and the Equipment and Furniture transferred to Party B will be free of any mortgage, or other encumbrance;
4.6 The land use conditions with respect to the Land Parcel are all contained in the Contract for Assigning the Right to Use State-Owned Land, contract ref. [] ([]) No. 259 between Party A and [] Industrial Park State-Owned Land and Building Bureau (“SIP Land and Building Bureau”). Other than the foregoing contract, Party A is not subject to any land use conditions, nor occurs any violation of the foregoing contract;
4.7 To the best knowledge of Party A and after due inquires, the Building, the facilities and equipment are constructed，installed and owned in a lawful manner, the operation thereof are in normal order without any significant defect. Significant defect herein means any of the following: (i) not in compliance with applicable national standards and industrial standards of []; (ii) not working normally according to relevant designs, specifications, or technical parameters; (iii) for facilities and equipment that Party A does not hand over relevant designs, specifications, or technical parameters, if such facilities and equipment do not have the function that similar facilities and equipment generally have, it is regarded as significant defect. Should a significant defect attributable to the Contractor referenced in Article 4.8 herein occurs, Party B shall follow Article 4.8 herein.
4.8 Party A shall assign to Party B all of its rights and interests that it is entitled to assign in relation to quality warranties of the Buildings under the Design and Construction Management Contract entered into by Party A and [] [], Inc. (“Contractor”) on 30 June [] (“D&C Contract”) with effect from the Delivery Date. For the avoidance of doubt, Party A is not providing a guarantee with respect to the Contractor’s statutory construction quality warranties under [] law and Party B agrees that it shall only make claims for such statutory construction quality warranties against the Contractor and not Party A.
4.9 The actual status of the Land Parcel and the Building is fully in compliance with the information contained in the title certificates. Party A’s use of the Land Parcel, the Building, the facilities and equipment does not in any respect breaking applicable laws including without limitation the environmental protection rules, nor occurs any existing or potential pending governmental investigation, sanctions or third party claims;
4.10 Party A agrees to fully indemnify for and keep Party B harmless from any loss, costs or expenditures of Party B as result of any failure of Party A to perform the representations, warranties, and other obligations contained herein.
The representations and warranties provided by Party A herein shall survive the term of this Contract.
Article 5 Party B hereby represents warrants and undertakes to Party A as follows:
5.1 Party B is an enterprise duly organized, validly existing as a legal person under the laws of the [];
5.2 Party B has full legal right, power and authority to execute this Contract and to observe and perform its obligations hereunder; and
5.3 Party B has taken all appropriate and necessary corporate action to authorize the execution of this Contract and to authorize the performance and observance of the terms and conditions hereof.
The representations and warranties provided by Party B herein shall survive the term of this Contract.
Article 6 Party B’s Additional Obligations
6.1 Party B shall be responsible for carrying out the procedures for registration of the change of the registered owner of the land use right certificate of the Land Parcel contemplated under Chapter 4 below.
6.2 Boundary markers have been placed on the boundary line of the Land Parcel under the direction of the SIP Land and Building Bureau. Party B shall take effective steps to protect the said boundary markers from being moved or damaged. If a boundary marker is moved or damaged after the handover of the Land Parcel, Building and the Equipment and Furniture contemplated under Chapter 4, Party B shall immediately report the same in writing to the SIP Land and Building Bureau and apply for redetermination of the boundary line and replacement of the marker, and all expenses arising therefrom shall be borne by Party B.
6.3 After the completion of the handover of Land Parcel, Building and the Equipment and Furniture under Chapter 4, Party B must use the Land Parcel for the purpose specified in this Contract. If Party B needs to change the purpose of the land or the land use conditions during the land use term of the Land Parcel, it must obtain the consent of the SIP Land and Building Bureau. The land use rights grant fee and the land use term shall be adjusted in accordance with the purpose and state of the Land Parcel following the change, and a new land use rights grant contract shall be signed.
6.4 SIP Land and Building Bureau retains the rezoning rights in respect of the Land Parcel. If the Building is rebuilt during the land use term or if an extension of the land use term is applied for upon expiration, the zoning requirements prevailing at that time must be complied with. If the urban plan needs to be revised due to urban infrastructure requirements and such revision affects the Building and gives rise to other economic loss, compensation shall be provided in accordance with the urban demolition and relocation regulations of the [] Industrial Park Administrative Committee.
6.5 After the completion of the change of the registered owner on the land use right certificate of the Land Parcel and registered owner on the ownership certificate of the Building under Chapter 4 below, Party B may assign, lease or mortgage the use rights to the Land Parcel in accordance with applicable [] law. If it does so, the parties to the agreement for assignment, lease or mortgage must carry out land registration procedures with the SIP Land and Building Bureau;
6.6 If Party B needs to extend the land use term of the Land Parcel beyond its expiration, it must apply for an extension to the SIP Land and Building Bureau one year prior to expiration of the term. After the land grant fee has been re-determined, a grant contract covering the period of the extension shall be signed and registration procedures shall be carried out. If Party B does not apply for an extension within the stipulated period aforementioned, the [] Industrial Park Administrative Committee will recover the Land Parcel without compensation and acquire all the buildings and other attachments within the boundaries of the Land Parcel then, and Party B shall carry out the procedures for deregistration of the land use certificate with the SIP Land and Building Bureau;
6.7 With respect to the Land Parcel, the state and the government have judicial and administrative jurisdiction as specified in the law, such other powers to be exercised by the state as specified in the laws of the [], and such rights and interests as are necessary in the public interest. Party B’s development and use of, and business activities in respect of, the Land Parcel shall comply with the laws and statutes of the [] and the relevant provincial and municipal regulations, and may not be detrimental to the public interest. The land use, building management, urban infrastructure, fire safety, environmental protection, landscaping, etc. relating to the Land Parcel must comply with the relevant regulations of the [] Industrial Park Administrative Committee, and the activities in those respects must satisfy the requirements of the relevant functional agencies;
6.8 During the period of Party B’s use of the Land Parcel, the SIP Land and Building Bureau shall have the right to supervise and inspect the use of land within the boundaries of the Land Parcel, and Party B may not refuse or obstruct such supervision and inspections. If Party B uses the Land Parcel beyond its boundaries or uses the Land Parcel in a manner not in accordance with the stipulated requirements by law, SIP Land and Building Bureau will treat such use as illegal use of land; and
6.9 The payable property tax and land utilization tax for the use of Land Parcel and Building in [] is [][].35 in the aggregate. Party A shall pay in July [] such taxes to the SIP Land and Building Bureau for the entire year of [] and Party B shall reimburse to Party A on the Delivery Date (as defined below) the payable taxes for the period from the Delivery Date to the end of [].
CHAPTER 3 PURCHASE PRICE AND PAYMENT
Article 7 PURCHASE PRICE. Party A and Party B agree that the purchase price for the right to use the Land Parcel, the Building, and the Equipment & Furniture as set out in the Annex 3 shall be [] []-five [] ([]65,[]) (the “Purchase Price”). The purchase price covers:
(1) the price for purchase of the land use rights to the Land Parcel and ownership of the Building: [] []-three [] ([]63,[]); and
(2) the price for purchase of the Equipment & Furniture: [] Two [] ([]2,[]).
If the Contract becomes unable to perform or relevant governmental authorities do not approve Party B to take transfer of the Land Parcel and the Building, provided such circumstance is not attributed to Party B, then Party A shall fully refund the payment including any deposit received from Party B.
Article 8 PAYMENT SCHEDULE. Party A and Party B agree that Party B shall pay the Purchase Price to Party A by installments as follows:
i) Upon the execution day of this Contract, a sum equivalent to 1% of the Purchase Price, i.e. []650,000 shall be paid as Deposit;
ii) Upon the issuance date of the land use right certificate indicating Party B as new land use right owner of the Land Parcel or the property ownership certificate indicating Party B as the new property owner of the Building (whichever date is later), and after Party B is provided with the lawful invoice for the total price hereof, a sum equivalent to 89% of the Purchase Price, i.e., []57,850,000 shall be paid to Party A; and
iii) Upon the Delivery Date, a sum equivalent to 10% of the Purchase Price, i.e., []6,500,000 shall be paid to Party A.
Article 9 PAYMENT ACCOUNT. The installments referred to in Article 8 shall be paid to the following account of Party A:
Bank: Bank of [], 8 [] Road, [], [],
Swift Code: []
Beneficiary: [] Communications [] ([]) Co. Ltd.
Account No. []
The Purchase Price and any sum payable under this Contract shall be paid in [].
Article 10 If Party B delays in paying any of the installments above, penalty on any delayed installment(s) shall be calculated from the day after the due date of such installment and shall continue to be payable by Party B until such time as the delayed installment is paid.
Article 11 The penalty payable shall be calculated from day to day at the daily rate of 0.05%.
Article 12 Prior to the relevant government authorities grant to Party B the land use right certificate and the building ownership certificate, if Party B delays the payment of any installment(s) for [] (60) days after the due date of such installment (including Saturdays, Sundays and Public Holidays), Party A shall be entitled to:
(i) unilaterally terminate this Contract by giving notice in writing to Party B;
(ii) charge from Party B 4% of the Purchase Price as a lump sum compensation, or charge all penalties calculated in accordance with Article 11; and
(iii) if the direct losses of Party A resulting from the breach of Party B are in excess of the foregoing compensation or penalties, Party A shall be entitled to claim against Party B.
CHAPTER 4 REGISTRATION CHANGE AND HAND OVER
Article 13 Within three (3) working days after the issuance date of the land use right certificate indicating Party B as new land use right owner of the Land Parcel or the property ownership certificate indicating Party B as the new property owner of the Building (whichever date is later) (such date within three (3) working days after the said issuance date is referred to herein as the “Delivery Date”), Party A shall deliver possession of the Land Parcel, the Building and the Equipment & Furniture to Party B. With effect from the Delivery Date, all charges relating to the maintenance and use of the Building and the Equipment & Furniture shall be borne by Party B. Such charges include, but are not limited to, all items of Table 1 below:
Table 1:
No. Service Annual charge Estimated monthly charge Method of payment Remarks
1 Cleaning service 104,400.00 8,700.00 Monthly Total of 4 persons
2 Plant area security 375,600.00 31,300.00 Monthly Total of 17 persons
3 Maintenance of door access and monitoring systems 60,000.00 5,000.00 Quarterly
4 Maintenance of fire safety system 100,000.00 8,333.33 Quarterly
5 Removal of non-production garbage 9.600.00 800.00 Monthly
6 Chemical water treatment system for central air-conditioning 56,238.00 4,686.50 Quarterly
7 Plant area gardening 108,000.00 9,000.00 Quarterly
8 Lift maintenance 10,176.00 848.00 Quarterly
9 Refrigerator maintenance 40,000.00 3,333.33 Quarterly
10 Air compressor maintenance 38,000.00 3,166.67 Annually
11 Tap water supply 48,600.00 4,050.00 Monthly Basic charge: 4050/month; 1500 m3
12 Electricity supply 1,200,000.00 100,000.00 Monthly Basic electricity charge: 44800/
month; the amount added depends on the volume consumed
13 Natural gas supply 216,000.00 36,000.00 Monthly Basic charge: 36000/month; 12500 m3; can be suspended for whole months; operated 6 months a year.
2,366,614.00 215,217.83
To avoid doubt, it is acknowledged that Party A’s suppliers providing the services set out in Table 1 may be the candidates when Party B selects suppliers. However, Party B shall have no obligation to take transfer of any contracts between Party A and such suppliers, nor shall Party B directly be bound to any contracts between Party A and such supplier.
Article 14 notwithstanding, the Parties agree that Party A may use the office area, laboratory, warehouse and parking spaces currently used by it (i.e. the areas listed in Table 2), without paying any charges except for the charges to be paid by Party A according to Article 22 herein, for a period of 90 days from the Delivery Date (“Rent-Free Period”).
Table 2:
Area (m2) Remarks
Administration building 1st floor 1,971.18 Building 3 on building ownership certificate
3rd floor 1,724.00 Building 3 on building ownership certificate
Research and development laboratory 400.00 Building 3 on building ownership certificate
Warehouse 511.31 Building 4 on building ownership certificate
Laboratory Approx. 50 Building 4 on building ownership certificate
Parking spaces 27 parking spaces East side of building 3 on building ownership certificate
Article 15 If Party A has not found suitable premises and moved out by the expiration of the Rent-Free Period, it may lease and use the office area, laboratory, warehouse and parking spaces currently used by it (i.e. the areas listed in Table 2) for a monthly rent of [] forty (40) per square meter. The lease period may not exceed 5 months (counted from the expiration date of the Rent-Free Period). The said rent covers all charges payable by Party A during the lease term, including but not limited to the rent for the premises and the charges mentioned in Table 1 payable by Party A on the basis of the area of the premises leased, except for the charges to be paid by Party A according to Article 22 herein. If Party A wishes to continue leasing such premises, the Parties shall separately negotiate and determine the terms of such lease according to the then prevailing market practice.
Article 16 Party A shall assist Party B in:
(i) its submission for notarization and government review (if any) of this Contract;
(ii) its procurement of the land use right certificate of the Land Parcel and the Ownership Certificate of the Building; and
(iii) other registration change formalities in connection with the use of the other properties transferred hereunder.
Article 17 The parties shall respectively bear their liability of the relevant taxes and government charges resulting from the transfer hereof according to applicable laws and local policies. Both parties agree to share evenly the notarization fee, valuation fee, government designated survey fee (if any) as necessary for the transfer. Each party shall pay for its consultants used for the transfer hereunder.
However, if any taxes and fees according to relevant laws and regulations are Party A’s responsibility before the Land Parcel, the Building, and the property transferred is handed over to Party B, Party A shall bear such taxes and fees.
Article 18 Party A and Party B hereby acknowledge and agree that upon the issue of the title certificates, the rights, interests and obligations in the Building and the Land Parcel shall be transferred to and borne by Party B.
Article 19 Within 3 working days prior to handing over the Land Parcel, the Building, facilities and equipment, Party A shall hand over to Party B the technical information, specifications, operation instruction manuals of the Land Parcel, the Building, facilities and equipment.
CHAPTER 5 INFRASTRUCTURE AND UTILITIES
Article 20 Party A has caused the relevant supplier construct or install the following “Public Basic Infrastructure”):
(1) the electric power supply cable to the electricity switching station designated by the Power Bureau, from which Party A has at its own cost and expense 1ay the connection cables to the sub-station for the supply of electricity to the Land Parcel;
(2) the sewer pipe and water pipe with designated points along the pipes, from which Party A has at its own cost and expense constructed or installed connection pipes to the boundary of the Land Parcel; and
(3) the town gas pipe with designated points along the pipes, from which Party B has at its own cost and expenses constructed or installed connection pipes to the Land Parcel.
Article 21 Party A has paid the turning on fees, engineering fees, connection fees, enhanced capacity fees and all such other fees payable to relevant authorities for the supply of all such electricity, water and sewer to the Land Parcel and the Building. If Party B requests for additional supply of electricity, water and other utility supplies to the Land Parcel and the Building, Party B shall pay for all fees, including but not limited to turning on fees, engineering fees, connection fees, enhanced capacity fees and all such other fees payable to relevant authorities for the supply of all such electricity, water and other utility supplies to the Land Parcel and the Building.
Article 22 The charges of water, power, town gas and other utilities to the Delivery Date shall be borne by Party A. If Party B is caused to pay for any of such charges, Party B shall be entitled to offset such charges from the Purchase Price payable to Party A, provided that Party B shall provide the relevant payment proof to Party A. After the Delivery Date, Party A shall pay the charges of water, power, town gas and other utilities for the space leased to Party A. Where the lease space has independent measuring meters, Party A shall pay according to the figures read by such measuring meters. In absence of independent measuring meters, both parties shall negotiate for the portion to be paid by Party A. The proportion for Party A to pay such charges shall not be less than the percentage of the square meters leased to Party A against the total square meters registered on the building ownership certificate.
CHAPTER 6 FORCE MAJEURE
Article 23 No Party shall be liable for any loss or damage caused by delay in the performance or non-performance of any of its obligations under this Contract when the same is occasioned by an “Event of Force Majeure”, that is to say any circumstances whatsoever beyond the reasonable control of the affected Party which directly or indirectly prevent or impede the due performance of this Contract, including but not to be limited to the following matters:
(a) war or hostilities; and/or
(b) earthquake, flood, typhoon, fire or other natural physical disaster.
Article 24 A certificate or confirmation issued by relevant administrative department of [] Municipal Government or non-governmental authoritative organization in the [] shall be accepted by the Parties as final and conclusive proof that the said Event of Force Majeure has occurred.
Article 25 Should any such Event of Force Majeure occur the affected Party shall notify the other Party in writing within fifteen (15) days and shall use its reasonable endeavors to resume prompt performance as soon as such Event of Force Majeure shall have ceased, and the time for any such Party’s performance shall be extended for a period equal to the time lost by reason of the delay which shall be remedied with all due dispatch in the circumstances. A Party shall not be considered to be in breach of an obligation under this Contract if prevented from performing such obligation due to an Event of Force Majeure.
CHAPTER 7 NOTICE
Article 26 Notice to Party A and Party B shall be issued to their respective addresses or facsimile numbers as follows:
Party A:
To: [] Communication [] ([]) Co., Ltd.
Recipient: []
Address No. 9, [] Road
North [], [] Industrial Park, []
[], [] Province, []
Postal Code
Facsimile Number: []ư
Party B:
To: [] ([]) Co., Ltd.
Recipient: []
Address: 158, [] Road, []-Park, [], []
Industrial Park, [], [] Province, []
Postal Code
Facsimile Number: []
Article 27 If Party A or Party B wishes to change the above-mentioned correspondence address or facsimile number, it shall inform the other party of the new correspondence address or facsimile number fifteen (15) days before such change.
Article 28 If the notice is sent out by facsimile, it shall deemed to be received on the date of transmission; if the notice is sent out by hand, it shall be deemed to be received on the date of delivery to the address stipulated; if the notice is sent out by registered post, it shall be deemed to be received on the fifth (5th) day after the date of posting. In each case, if the notice is received on a Saturday, Sunday or public Holiday, it shall be deemed to have been received on the next following working day.
CHAPTER 8 APPLICABLE LAW AND DISPUTE RESOLUTION
Article 29 The execution, validity, interpretation and performance of This Contract and the resolution of any dispute arising from or in relation to this Contract shall be governed by the laws of [].
Article 30 Any question, dispute or difference between Party A and Party B arising from the execution, performance or otherwise in connection with the Contract shall first be resolved through amicable negotiation and friendly consultation between Party A and Party B. If no resolution is reached within ninety (90) days of the notice by any Party requesting for resolution through negotiation and consultation, the question, dispute or difference shall be submitted to the court having jurisdiction thereof over the venue of the Building for resolution by litigation.
CHAPTER 9 VALIDITY OF CONTRACT AND OTHER MATTERS
Article 31 The Contract shall come into effect after signing by Party A and Party B and being notarized.
Article 32 This Contract is written in the [] and English languages and both languages shall have equal validity. If there is any conflict or inconsistency between the [] version and the English version, the [] shall be the governing and prevailing version. Party A and Party B shall, as required by the competent authorities of SIP, submit the [] text for registration. There shall be six originals of the [] version and six originals of the English version. Party A and Party B shall retain one original of both the English and [] version of this Contract, the remaining shall be used for registration and other formality purpose.
Article 33 The headings in this Contract are for convenient reference only and shall not be used to construe or interpret this Contract.
Article 34 In the event that any provision of this Contract is deemed invalid, unlawful or unenforceable under any applicable 1aw, the validity, 1egality or enforceability of the remaining provisions of this Contract shall not be affected or impaired but this Contract shall be construed as if such invalid, unlawful or unenforceable provision had never been contained in this Contract.
Article 35 Party A and Party B hereby represent and warrant that each of them shall carry out their respective obligations under this Contract from the date on which this Contract comes into effect until the full performance thereof.
Article 36 Party A and Party B agree that upon the occurrence of any of the following events which directly or indirectly impedes the due performance of this Contract, namely:
(a) riot of civil commotion;
(b) strike of lockout or any other industrial action by workers;
(c) damage to or destruction of the Building or the Land Parcel and/or the Public Basic infrastructure or any part thereof, caused by a third party; and/or
The respective obligations of the Parties under this Contract shall be suspended during the continuance of any of the aforesaid events and neither Party shall claim from the other Party any damages, compensation or for loss of any kind whatsoever arising from or attributable whether directly or indirectly to the occurrence of any of the aforesaid events. Provided the Parties shall negotiate in good faith as to their rights and obligations inter se under this Contract, if any of the aforesaid events shall continue beyond a period of three (3) months.
Article 37 Unless otherwise expressly stated in writing between Party A and Party B, this Contract constitute the entire rights and obligations between Party A and Party B and shall supersede any prior expression of intent, understanding, discussion, representation, warranty, or promise (whether express or implied, oral or written) made by one Party or its agent to the other Party or its agent with respect to this transaction.
Annexes:
1. Land Use Right Certificate
2. Building Ownership Certificate
3. Equipment & Furniture List
4. Handover
IN WITNESS WHEREOF the legal/authorized representatives of Party A and Party B have executed this Contract on the date first above written.
BETWEEN THE UNDERSIGNED:
The company [[]., limited partnership, of which the head office is in [[]], registered on the commercial register of [] under number [], owner of the building,
Named the “LESSOR” in this deed,
Having as an intermediary “[]”, limited company with capital of [] [], of which the head office is located at [], registered under number [], chaired by [] and represented by Mr [] acting as Deputy Chief Executive Officer.
On the one hand,
AND:
[], simplified stock company with capital of 91 110 [], registered under number [], having its head office at [] in the [], represented by its chairman, [] hereby duly authorised for the purposes described herein.
Named the “LESSEE”, in this deed,
On the other hand,
IT IS AGREED AS FOLLOWS:
The lessor leases to the lessee who accepts the premises for office-use as described hereafter, belonging to an office-block situated [] in the []. The current lease agreed between []and [], is subject to lease-statutes for commercial, industrial or artisanal use governed by articles [] and decree number [] of [] modified along with auxiliary measures of the civil code which relate to real-estate rental leasing.
This lease has also been agreed upon and accepted under the responsibilities, clauses and conditions stated in this deed as well as those that could result from the law, co-ownership regulation, various constraints or use, which the lessee pledges to respect, failure to do so shall risk the immediate termination of this lease, all types of compensation and damages.
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Article 1 DESCRIPTION
Within the property “sis [] des [] – the following premises:
A floor-space of approximately [] m2 comprising as follows:
· Building B 615 m2
(Office-block R+3)
· Ground Floor 60 m2
· 1st Floor 185 m2
· 2nd Floor 185 m2
· 3rd Floor 185 m2
· Building A on the 2nd Floor 219 m2
· A parking space – the location of which shall be determined when conducting the inventory of fixtures upon entry.
Excluding all other premises not mentioned above for which further description would be required, the lessee declares to know the premises well for having seen and visited them. He/she declares that he finds them to correspond exactly to the contractual description and to the use for which they are intended.
It is specified that any difference between the quotations and floor-space and the real dimensions of said premises cannot be grounds for either a reduction or increase of the rent, the contracting parties refer to the components of the building as they are.
The entirety of the lease premises form an indivisible whole, as is the shared intention of the parties.
Article 2 TERM
This lease has been agreed upon for a term of 9 whole and consecutive years which will begin to run from 1st April [] – with the right of the lessee to transfer this lease upon the expiry of each 3 year period, by warning the lessor at least 6 months in advance with an extrajudicial document.
The Lessor will also have the right to transfer this lease upon the expiry of each 3 year period, if he intends to invoke the measures of articles L145-18, L 145-21 and L145-24 of the code of commerce which replace articles 10, 13 and 15 of the decree of 30th September [].
Article 3 PURPOSE
PREMISES EXCLUSIVELY FOR OFFICE-USE
The Lessee will conduct his personal business at his expense, risks and perils of occupancy, with any authorisation which may be necessary to conduct all or part of his activities, as well as the payment of all sums, licences, taxes, other taxes, various duties, pertaining to activities carried out in the leased premises and for the use of the premises.
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The Lessor reserves the right to lease all other premises or shops in the building for the same or any similar activity to that of the lessee.
Article 4 RENT
This lease has been agreed upon and accepted in return for an annual basic rent (non-indexed), excluding taxes and charges of [] 293 1[] ( []), broken down as follows:
· Offices [] 350 excluding taxes and charges/ m2 x 834 m2 [] 291 9[] excluding taxes and charges.
· Parking []12[] excluding taxes and charges/space x 1 space [] 12[] excluding taxes and charges.
The lease shall be paid by the Lessee at the domicile of the Lessor or of his intermediary, in four equal instalments and in advance every 1st January, 1st April, 1st July and 1st October of each year and for the first time 1st September [], the Lessor granting the Lessee an exemption of 5 months’ rent excluding taxes and charges.
It is specified that the Lessor opted for his rents and payments to be subject to VAT, this option exempts the lessee from annual payment of the annual registration fee collected from the total rents in accordance with the article in the Ơ]
he lessee is bound to pay at the same time as he/she pays the rent, the total charges, income tax, other taxes, existing or future, of whatever nature, rateable or not if applicable, the total of necessary fees for proper fulfilment of the contract, notably the fees for collection charges, including ad valorem duty and the duty in article 10 payable to the bailiff.
In the event of non-payment by the deadline of the due sums and if this remains the case after a preliminary formal notice, the tenant formally pledges to pay 10 per cent in addition to the due amount. The Lessor will also have the right to use the cancellation clause inserted into this lease deed.
Article 5 INDEXATION AND REVISION OF RENT
Without the need for any prior notification, the total rent shall be subject to an annual indexation process. It will vary thus every year on the anniversary date of the taking-effect of the lease, through the application of the latest INSEE Index for construction costs – at national level – known at this anniversary date with reference to the index for the same period of the previous year.
The benchmark index for the 3rd quarter of []was that of 1443.
The first annual indexation shall thus intervene on 1st April [].
In the event of modification of the construction cost index publication, the parties agree to refer to the legal replacement index.
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For lack of legal replacement index, the closest index shall be applied from amongst those which exist and are applicable.
If the parties fail to reach an agreement on this closest index within a 3 month period starting from the date that one of the parties suggests such an index to the other, in writing, the index shall be determined by an appointed expert upon the request of the most diligent party, by the High Court in the area in which the office-block is located.
The appointed expert must therefore make the index known within 3 months starting from the date that the index is obtained, and this shall be done via a registered letter addressed to each of the parties herein.
The registered letter with which the expert shall make the new index known shall be appended to the lease contract and to all its subsequent amendments to obtain the agreement of the parties and to comply as such.
The fees of the expert and his/her appointment shall be borne by the lessee.
This indexation clause does not obstruct the application of legal 3 yearly revisions prescribed by articles L145-1 and following of the code of commerce which replace the modified decree – number 53, 960 of 30th September [].
Article 6 PROVISIONS FOR PAYMENTS AND CHARGES
The Lessee is committed to paying the Lessor a provision for charges, payments and expenses for the first year equal to the sum of []41 893.49 ([]), broken down as follows:
· (42 [] excluding tax/m2 x 834 m2) + 6 865.49 of VAT at current rates of 19.6 %.
This provision shall also be settled on a quarterly basis and in advance, at the same time as the rent.
An annual regularisation will be conducted, the lessee pledging to supplement as required the payments which have already been made. Overpayments to the Lessor will benefit from a deduction from the provision for the following year.
Article 7 CHARGES AND EXTRA COSTS
The Lessee must reimburse the lessor or his interim, with the full amount of charges, payments, and expenses irrespective of the proportion of the premises’ floor-space occupied.
He/she will bear all the costs, contributions, of whatever nature they may be, which will or could arise, payable on real-estate which is leased or rented as well as fees for the management, the management agent, the property owners syndicate, and insurance premiums – all so that the rent fixed herein may be collected by the Lessor free from all costs.
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Article 8 TAXES
The Lessee must satisfy all town, police and highway charges by which tenants are usually bound, so that the Lessor is not troubled by this matter, and notably to pay the personal and property tax contributions, rates, business rates, household-refuse tax, sewerage tax, sweeping and other charges which lie with the office-block, the special tax prescribed for the benefit of the Fonds National d’Amélioration de l’Habitat [National Fund for Improvement of Habitat], all new contributions, taxes, tax increasesâ[]¦ including those charged to the Lessor which must be reimbursed to him/her by the lessee – such as the property tax on the offices, which must be vouched for by receipt upon demand.
Article 9 GUARANTEE DEPOSIT
The Lessee pledges upon signing this deed to pay the sum of ơ] [] (SƠ []) as a deposit, corresponding to a rental quarter without taxes and charges.
In the event that the rent varies, the deposit shall be immediately readjusted, so that it always represents a rental quarter without taxes and charges.
This deposit shall remain in the hands of the Lessor for the duration of the lease without earning interest. It will be assigned to guarantee the fulfilment by the lessee of all obligations which fall to him from this lease and its consequences.
It will be reimbursed to the Lessee at the end of occupancy after proof of payment of all taxes and all other taxes, the fulfilment of repairs for which he is responsible and the deduction of any amounts owed to the Lessor by the Lessee or anything else for which the Lessor may hold the Lessee responsible.
In the event that the right to lease is transferred, the transferee will give the deposit which is returned to the transferor at the end of occupancy back to the lessor, in accordance with the previous paragraph.
If this lease is terminated because conditions have not been met or for any cause attributable to the Lessee, the deposit shall remain in the hands of the Lessor as preliminary damages and compensation without prejudicing any further ones.
Article 10 SUBLETTING, LEASE-TRANSFER, CAPITAL INVESTED
a.) Subletting
Any whole or partial subletting of the premises by the Lessee is expressly forbidden, the leased premises form an indivisible whole as is the shared intention of the parties.
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The Lessee shall however, be able to propose to the Lessor without any obligation for the latter to accept, a sublet by one of its [amended] companies other than the [] group.
In the event that a sublease is accepted, the lessee remains the sole party bound to the Lessor in terms of fulfilling the obligations of this lease. The Sublessee cannot have any supplementary deed between him/her and the Lessor in addition to deed for the principal tenant.
Furthermore, in the event of partial subleases, the premises form an indivisible whole as is the shared intention of the parties, whereby the sublets shall not be enforced by the Lessor. The Lessee conducts his business, at his own risks and perils within a sublet situation. The Lessee pledges to bring to the attention of all sublessees and stipulate as in any subletting deed whatever it may be, that the Lessor mentioned herein, does not intend in any event to have any legal ties with the sublessees and the latter shall expressly relinquish any action or deed which runs counter to the Lessor, notably the renewal of the sublease.
Besides, the Lessee is obliged to take on vis-Ã -vis his/her sublessees, the payment of any possible forms of compensation, of whatever their nature, particularly those which could be due to the release of the premises.
Contrary to that which precedes and as an exception, the Lessor authorises the Lessee to sublease his/her premises to the holding company of the [] group as well as its subsidiaries up to a maximum of 30% of the floor-space leased in this lease deed.
b.) Lease-Transfer
The Lessee shall not be able to give up/transfer his right to lease – in entirety or in part, without the express, written consent of the Lessor, except if the lease is transferred with the business assets.
The lessee shall not be able to substitute either persons or institutions for the real-estate which is to let notably via free-takeover of the business assets.
Any transfer that is agreed without regard to this article may bring about the termination of the lease if the Lessor so desires.
Besides, the assigner will act as guarantor conjointly and in solidarity with the transferee and all successive transferees for the payment of rents, extra charges as well as all compensation for occupancy and by and large the fulfilment of all the clauses and conditions of the lease which are not open to discussion or division.
The transfer shall be recorded by notarial deed, save any special dispensation by the Lessor, for which an original of the transfer deed shall be presented without fees to the lessor to serve as a writ of execution for the transferees.
c.) Capital Invested
In the event that the Lessee invests capital in a business asset that he/she makes use of in the leased premises said company shall have a direct commitment to the Lessor for the fulfilment of the conditions of this lease so that the Lessor may exercise all his rights and actions directly in relation to the company, failure to do so would risk the termination of the lease if the Lessor so desires.
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The Lessor can require from each partner, for his benefit, the subscription to a joint and personal pledge or to a security for the fulfilment of the conditions of this lease. The company benefiting from the investment must make the deed known in accordance with article 1690 of the civil code, unless express exemption is granted by a notarial deed.
d.) Right of Option
In the event that the right to lease is to be transferred – the Lessor shall benefit from a right of option, allowing him/her to take back the premises free from occupants, or to substitute the transferee for one of his choice for the transfer deed provided that the transferee chosen by him/her offers to pay the assignor an identical price to that proposed to the other interested candidate. This right shall remain binding for subsequent interested parties.
To allow the Lessor to exercise his/her right of option, the Lessee shall inform the Lessor of his/her intention to transfer the right to lease, by registered letter with recorded delivery.
The notification made by the Lessee must indicate, failure to do so would risk making the notification void, the name and the address of the acquiring candidate, the amount and methods of payment of the price as well as the conditions, place and day of the transfer.
The Lessor must inform the Lessee of his decision within a timeframe of 2 months starting from this notification by registered and recorded letter.
In the event that the Lessor decides to use his right to stand in for or substitute the transferee with any transferee of his choice, the transfer shall be put in order within a month, starting from the date that the Lessor makes his decision known.
Article 11 OCCUPANCY- USE
The Lessee pledges to:
· Always keep the premises filled with furniture, effects and materials of sufficient quantity and value to respond at any moment to the payment of rents, leases and extra costs as well as the fulfilment of clauses and conditions of this lease.
· Not to deposit or leave anything, whatever it may be, even momentarily, outside the rented premises, notably not in any communal area of the office-block.
· Not to affix any plaque, sign or installation for any reason which affects the exterior appearance of the building without the prior and written consent of the Lessor who will seek as required the authorisations prescribed in the regulations for co-ownership for the office-block or any other regulation, specifications or statues by which he/she may be bound – being however specified that the Lessee shall carry out his personal business under the required administrative authorisations and tax payments which could be applicable.
· Ensure equally that all signs placed by him/her are always properly maintained.
· The Lessee alone will remain responsible for accidents, costs, fees, risks or perils that their existence or installation may incur.
· Not to use any slow-fuel heating equipment, or one which produces harmful gases, or where the fuels could plug, tarnish or damage the flues. The flues may also not be used for any other purpose than the one for which they were intended. The Lessee shall take all useful
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steps to ensure that his/her heating, lighting and other installations used within the leased premises do not present any danger and he/she remains responsible for any consequence that may result from the aforementioned installations.
· Not to use any noisy or dangerous devices, not to keep any noisy or dirty animals.
· Not to place any excess load on the ceilings, and if in doubt to contact the architect of the office-block to check what weight is permitted.
· Not to install any machines or engines which create noise pollution without the written consent of the Lessor. Remove without delay those devices which have been installed after authorisation, if their operation provokes justified complaint from tenants or neighbours.
· Grant the Lessor, his representative, his architect or his contractors access to the leased premises, as often as necessary. When notice has been given or if the Lessor wants to sell his office-block, the Lessor will have the right to affix a sign in a place of his choice, and the Lessee shall be obliged to allow visits to the building during all working days and hours, at the risk of damages and compensation. The Lessor pledges, in so far as possible, to warn the Lessee at least 48 hours in advance.
· Comply with the regulations laid down by the Lessor or his intermediary for good conduct and peace in the building, and to comply with the co-ownership regulations.
· Under no circumstances, even in death, receivership or compulsory liquidation would it be possible to conduct a public sale of furniture and other goods within the leased premises.
Article 12 MAINTENANCE AND WORKS
An inventory report shall be carried out by the Lessee and the Lessor on the day that the Lessee enters and the day that the Lessee leaves the leased premises.
The Lessee Pledges to:
· Accept the leased premises in the state in which they are found when they come into use, without being able to require the Lessor to carry out any repair works.
· Carry out, at the start and during this lease all repairs other than the ones prescribed in article 606 of the civil code.
· Maintain the leased premises to a good standard and carry out repairs and maintenance during the entire lease period. Notably, maintain, repair or replace if necessary, all at his/her expense – pipework, guttering, electrical appliances, windows, sanitary-ware etc.
· Not to carry out any changes, demolition, drilling of walls or divisions etc. without the express prior and written consent of the Lessor or of his intermediary. The lessee shall be responsible for authorised works, which shall be carried out by competent contractors and if the Lessor requires, under the supervision of the Lessor’s architect – the costs of which are borne by the Lessee.
· Not to install any canopy, veranda, awning or blind without the prior and written consent of the Lessor and after having obtained the necessary administrative authorisations.
· Upon expiry of this lease any constructions or installations, fittings, improvements and embellishments carried out by the Lessee will remain, without compensation, the property of the Lessor, unless the Lessor requires that all or part of the premises be returned to its/their basic state. The Lessor also reserves the right to choose between actual restoration
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work and a financial sum to cover the cost, a compensation which would constitute an extra debt alongside the rent.
· The restoration works, if they must take place, will be conducted under the supervision of the Lessor’s architect, at the Lessee’s expense.
· Undergo and allow without discussion, or claiming compensation or reduction in rent, all the works of no matter what importance up to a limit of 2 months – with reference to the arrangements of article 1724 of the civil code – that the Lessor deems necessary in the leased premises or in the building of which they are part, or in the neighbouring office-blocks, whether it be improvement works or new constructions, transformation or rising the height.
· Grant access to architects, contractors and workers assigned by the Lessor and who are carrying out work. The Lessor is obliged to warn the Lessee 48 hours in advance in so far as possible.
· Take down at his/her expense and without delay during the work, any fittings, signs etc. which would facilitate the works.
· Immediately notify the Lessor of any repairs for which he must pay. It is also necessary to state that the Lessor will be held responsible for any aggravation resulting from silence or delay. Carry out at his/her own expense instead of and in the place of the Lessor, all works to do with the leased premises and which are required by the sanitation services, police and safety organisations. The Lessee shall be responsible for works to make the building’s installations comply with regulations, but the fees for this work are explicitly payable by the owners and as such shall remain the responsibility of the Lessor. Generally, the Lessee pledges to carry out in the place of and instead of the Lessor, all the repairs (except those which ensue from article 606 of the civil code) which may be necessary in the leased premises and to let the owner and his technicians check the state of the lease premises at any time of year.
· At the end of the occupancy to leave the premises in a good condition and state of repair. Ask at his/her cost the architect to draw up the inventory of fixtures and pay the amount.
If the Lessee fails to carry out the works for which he/she is responsible, the Lessor may undertake the work, if after 30 days since sending a registered letter with recorded delivery nothing is resolved, except in emergencies. The work may be carried out by the Lessor instead of the Lessee and the Lessee pledges to pay back the cost of this including all related fees, within 15 days of the statement being sent to him/her by the Lessor.
Article 13 RECOURSE LIABILITY
The Lessor warrants for the financial consequences resulting from civil responsibility that he/she may incur in his role as owner.
The Lessor warrants himself or in the case of co-ownership if applicable his real estate as well as any fittings, installations of a real-estate nature.
In the event that the leased premises are made up, totally or partially of co-owned lots, the lessor has the capacity to take out any more securities that he deems useful in addition to guarantees
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taken out by the property manager. The corresponding premiums remain the responsibility of the Lessee.
The Lessee is bound to:
· Insure himself for glass breakage, fire, explosions, for his furnishings, materials, goods, information, computer data, as well as for tenants’ risks and the recourse of neighbours – with a reputably solvent insurance company – which may be appointed by the Lessor. Insurance policies must include a waiver for all recourse against the owner and his/her intermediary and warn that their suspension or resolution can only have effect 15 days after notification of the Lessor’s insurers.
The Lessor pledges to himself and to his insurers that he shall waiver in return, any recourse that they may have against the Lessee and his insurers.
· Produce within a fortnight the relevant insurance policy and vouch for the payment of annual premiums on demand. If the activities conducted by the Lessee require extra insurance premiums for the owner, other tenants or neighbours – the Lessee shall be bound to compensate the Lessor for the amount of these extra premiums and any further consequences and to guarantee against any complaints from other tenants or third parties.
· Declare any accidents that occur on the leased premises to the Lessor, irrespective of the scale or importance of the accident and even if there no apparent damage is caused.
· Remove any panels or decorations at his/her expense, as well as any installations which he/she may have installed – that once removed will facilitate the search and repair of all manner of leaks, cracks in flues, ventilation shafts and notably after fire or water seepage.
· Insure for theft – the furnishings, goods and any assets even if they are intangible – which are found in the leased premises. The lessor does not provide cover in the event of theft or burglary inside the leased premises or in the communal areas, in accordance with the measures of article 1725 of the civil code.
· Abstain from anything which might itself be harmful or prove harmful to those who use it, or indeed to other shops or businesses in the building or which may affect the calm and peace of the other tenants. Not to wrap or unwrap goods in the communal parts of the building.
The Lessee waivers any recourse in terms of responsibility against the Lessor:
· In the event that the leased premises come to be damaged or destroyed by neglect, construction faults, or any other cause which do not reflect the wishes of the Lessor. This lease will by rights be terminated without consultation.
· In the event that the Lessee falls victim to burglary, any misdemeanour or criminal act within the leased premises or other parts of the building for whatever reason.
· In the event that the premises or the building come to be expropriated, any actions in this respect can only be undertaken by the Lessee or his legal claimants against the authority responsible – who the Lessee should subpoena directly.
· In the event that disruption to the use of the premises by a third party, in whatever way, the Lessee shall pursue them directly without being able to blame the Lessor or his intermediary.
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· In the event that damp, leaks, water seepage, flooding or any other cause, as well as leaks from communal pipework concealed by panelling installed by the Lessor, the Lessee must always insure himself for these risks.
· In the event of danger no matter what the cause, the Lessee must furthermore protect by his own means and at his own expense real estate fittings during the time necessary for contractors to intervene and carry out repairs.
· In the event of interruption of the water, gas and electricity supply or failure of the heating or lift, even this is prolonged.
· In the event of insufficient ventilation or lighting in the basements, if it occurs, such as in the event of flooding – even from sewage backflow, the Lessor is not at all responsible for damaged goods or other damages.
Article 14 REPORT ON NATURAL AND TECHNOLOGICAL RISKS
Under article L124-5 of the environment code “the purchasers or tenants of real estate situated in zones covered by a prevention plan for technological risks or by a prevention plan for foreseeable natural risks, stipulated or approved, or in earthquake zones defined by the decree from the Council of State, are informed by the vendor or the Lessor of the existence of risks outlined by this plan or decree. For that purpose a risk report on natural and technological risks has been drawn up from the information made available by the prefect (â[]¦)”.
The Lessor informs the Lessee that the premises currently leased find themselves in a zone which falls under the requirement for information on natural and technological risks by prefectural decree and that a prevention plan for risks has been sent to the commune in which the currently leased premises are located.
Thus, a risk report was drawn up by the Lessor on 1st February [] included in the annex (see annex 1).
The Lessor declares, furthermore, that to his/her knowledge, the building – subject of this lease has not undergone any accident give rise to insurance compensations for natural disaster risks (article L125-2 of the insurance code) or technological risks (article L 128-21 of the code of commerce).
Article 15 ENERGY PERFOMANCE TEST
An energy performance test in principle must be included in any lease deed (including commercial leases), starting from 1st July 2[]7.
The application of this measure appears for the moment, to be problematic: The decree describing the energy test model that should be included in each commercial lease has not yet been published. Only the energy test models for the sale of buildings (including commercial and tertiary) as well as the test model for residential leases have been published. We shall note that in residential affairs, the energy test model for the sale of buildings is similar to the energy test model for residential leases.
As soon as a model has been determined, the Lessor pledges to produce the energy test for the Lessee.
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Article 16 CANCELLATION CLAUSE
It has been expressly agreed that in the event of the conditions herein not being met, or if one of them is not met, if one month after a warning has been issued and if it has not proved fruitful, the lease will be rightfully terminated as the Lessor sees fit – without the requirement to complete judicial formalities. The Lessor shall be able to obtain the eviction from the leased premises by a simple order from the presiding judge at the High Court. The Lessor reserves the right to use all rights for due rents, damages, fees without affecting his right to enter at any time, under any circumstances, as the referee of any action that he may find useful to take. In the event of non-payment of one instalment by the deadline, the Lessor will be entitled to evict the tenant via the same means under the same conditions but, in this case, only if after a month the order to pay has proved fruitless.
Any offer of payment or fulfilment after the expiry of the aforementioned period will be seen as null and void and shall not obstruct the termination required by the Lessor.
In the event that, after the termination of the lease, the premises are not restored to the Lessor at the right date, free from any occupancy, occupancy compensation due from the Lessee or his assignees up until the point of restoration will be equal to for each delayed day 2% (two per cent) of the total quarterly rent including tax with the right for the Lessor to claim damages. The aforementioned compensation for occupancy is understood to exclude duties and taxes, duties and taxes in addition to the cost for the debtor of the aforementioned compensation.
Article 17 TOLERANCE
No tolerance on the part of the Lessor, no matter how frequently or for how long, can give special rights in favour of the Lessee. The Lessor and his intermediary can always end this. Any dispensation from obligations which fall to the Lessee in terms of this lease, the law or use can only occur with the prior, express and written consent of the Lessor.
Article 18 FEES
The lessee shall pay all the fees, duties as well as any further consequential costs (see Annex).
The Lessee or his assignees shall reimburse the Lessor with the fees or extrajudicial deeds or other legal fees, caused by a breach of the clauses and conditions herein.
In the event that the Lessor decides to register the lease, stamp duty will be fully payable by the Lessee.
All duties and taxes pertaining to any amounts owed by the Lessee to the Lessor within this period and their consequences will be payable by the Lessee.
Article 19 CHOICE OF RESIDENCE
For the execution of these documents and notably for the signification of all extrajudicial documents or legal proceedings, the Lessee elects his domicile to be at his head office, assigning the jurisdiction of the court in the place where the building is located.
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Signed in: []
On: 10/3/[]
3 Copies
Signatures proceeded by the words “read and approved”.
