Exhibit 10.26
Land-Use Right and Building Lease Agreement
This agreement is entered into on this twenty-second day of
February, 2005 in Tai'an City, Shangdong Province, China by and
between the following two parties:
Party A: Shandong Bangsheng Chemical Co., Ltd.
Registered Address: ▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇'▇▇ ▇▇▇▇
Party B: Shangdong Shengda Technology Co., Ltd.
Registered Address: North Tip of the Economy & Trade Corridor, Xintai City
WHEREAS:
In accordance with relevant stipulations of real estate laws and regulations of
China, the two parties, after friendly negotiation, hereby conclude the
following agreement with regard to matters concerning to Party B's leasing
land-use right and building to Party A:
Article 1 Area and Use of Lease
1. Party B agrees to lease its land-use right of the following land (" the
Land ") to Party A; Party A agrees to rent the Land and to pay the
corresponding consideration pursuant to relevant provisions of this
Agreement. Party B has obtained the land-use right as of March 26, 2004
with a 50-year tenure of use. Party A agrees to abide by the stipulations
in the State Land Use Right Granting Contract entered into by and between
Party B and relevant land administrative authority in Tai'an City.
Location of the Land: ▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇: [63,935.58] sq.m. [Note: If the actual leasing area is smaller
than the area described in the following land-use right certificate,
please describe the leased land in detail]
Land-use Right Certificate No.: Dai Yue ▇▇▇ ▇▇▇▇ (2004) Zi No. 0175
Use of the Land: For Industrial Purpose
2. Party B agrees to lease the following building of its ("the Building") to
Party A; Party A agrees to rent the Building and pay corresponding
consideration pursuant to relevant provisions of this Agreement.
Location of the Building: ▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇'▇▇ ▇▇▇▇
Building Area of the Leased Building: [18,896.56] sq.m. in total. [Note:
If the actual leasing area is smaller than the area described in the
following building ownership certificate, please describe the leased land
in detail.]
Building Ownership Certificate No.: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Zi No.120985 -
120992
Structure of the Building: [Brick and Concrete]
Use of the Building: [Office] [Note: Please be in accordance with the use
of the Building listed in the above-mentioned Building Ownership
Certificate]
3. The production and operation activities carried out by Party A within the
boundaries of the leased land and building shall be confined to the
registered use set forth in the Land-Use Right Certificate as well as the
Building Ownership Certificate. Should the use need to be changed, the
consent shall be required from the lessor before any revision is done to
this Agreement, in addition to the approval of relevant authorities of
land and housing administration.
Article 2 Leasing Term
1. Unless both parties decide or one party decides to terminate this
Agreement pursuant to other provisions of this Agreement, the leasing term
of land-use right and the building shall both be three (3) years,
commencing from December 15, 2004 and ending on December 14, 2007. Both
parties irrevocably agree that, after the expiration date of the leasing
term, Party B has the right to choose to extend the leasing term for 3
more years, within which the rental shall be determined by the two parties
according to the Real Estate Rent Evaluation Report provided by an
independent certified public accountants' firm entrusted by the two
parties. However, the rental during the extended leasing term shall be
maximumly 5% higher than that during the previous 3-year leasing term.
2. When the leasing term extended pursuant to the previous provision expires,
Party B has the right to extend the leasing term yet again (the rental
shall be determined according to the method stipulated in the previous
provision). The same shall be applied indefinitely and the lease shall not
be subject to a fixed number of years.
3. Be that as it may otherwise stipulated, the two parties irrevocably agree
that Party B has the right to terminate this Agreement at any time;
however, Party B should notify Party A in writing with a three-month
advanced notice.
4. Party A irrevocably grants party B the right to decide to purchase the
leased equipment on its own during the term of this Agreement. In the
determination of the price of the leased equipment, the two parties shall
jointly entrust an independent certified public accountants' firm to
evaluate the market value of the leased equipment and the result of the
evaluation shall be the price of the leased equipment.
5. After the execution of this Agreement, Party A shall record this lease
with relevant authorities of land and housing administration.
6. Party B can terminate this Agreement immediately in the event of any of
the following:
1) Without getting consent from Party B, Party A subleases or transfer
the land use right or building to others (with the exception of
subleasing or transferring to the subsidiaries or affiliate
companies of Party A);
2) Party A fails to use the land or building in the manner agreed to by
the two parties, or use the Land to engage in illegal activities to
the detriment of the interests of Party B or public interests.
In the occurrence of any of the abovementioned cases, if Party B decides
to terminate the agreement, it shall give Party A a reasonable period of
time to handle moving or other matters.
Article 3 Rental and Mode of Payment
1. Party A shall pay Party B rental. The monthly rental is RMB 162,300 yuan.
Party B shall be responsible for paying all the land holding taxes and
real estate use taxes associated with the land use right and building
ownership of the Land.
2. If the two parties agree, after negotiation, the abovementioned rental can
be appropriately adjusted.
Article 4 Maintenance of the Building During the Lease Term
The maintenance of the Building during the lease term is one of Party A's
obligations and the related costs shall be paid by Party A. Except as otherwise
provided in this Agreement, if Party A has to do necessary decoration or
construction to the Building, and should the main structure of the Building be
altered, Party A should solicit Party B's opinion, and the decoration or
construction can only be started after a written agreement has been reached.
Unless Party B has good reasons, Party B shall not reject or delay Party A's
request of altering the main structure of the building. If any renovation,
modification and addition to the Building do not change the main structure of
the Building, Party A has the right to do it without notifying Party B and there
is no need to get Party B's consent.
Article 5 Change of the Lessor
1. During the lease term, unless a written consent is obtained from Party A,
Party B must not transfer its land-use right of the Land or the ownership
of the Building to any third party.
2. If Party B desires to transfer the land-use right of the Land or the
ownership of the Building, it needs only to transfer it to Party B.
However, if Party A agrees in a separate written form, Party B can
transfer the land-use right of the Land or the ownership of the Building
to a third party.
3. If Party B needs to pledge or mortgage the real estate, there is no need
to get a written consent from Party A in advance.
Article 6 Representations and Warranties of the Two Parties
1. Party B hereby represents and warrants to Party A as follows: the two
parties are companies duly organized, registered and validly existing
under the law of the People's Republic of China and have the full powers
and authorizations (including the powers and authorizations given by law,
the powers and authorizations given by internal regulations of the company
and other powers and authorizations):
1) Party B is the sole legal owner of the land-use right of the Land
and the ownership of the Building and has the power to lease the
Land and the Building pursuant to the stipulations in this Agreement
to Party A with compensation on its own;
2) Party B shall establish and perform this Agreement.
2. If Party A fails to abide by the above warranties, Party A has the right
to terminate this Agreement at any time and has the right to demand Party
B compensate it for all the economic losses arising from this.
3. Party A confirms with Party B that, the Land-Use Right and Building Lease
Agreement entered into by and between Party A and Party B dated on the
first day of December 2004 has not been practically performed and has been
void from the very beginning and it will have no legal effect or practical
effect from the very beginning.
Article 7 Force Majeure
Should either of the parties to this Agreement be prevented from performing the
Agreement by Force majeure, the prevented party shall notify the other party
without any delay, and within 15 days thereafter provide detailed information of
the events and a valid document for evidence issued by the relevant public
notary organization explaining the reason of its inability to execute or delay
the execution of all or part of the Agreement. Both parties shall, through
consultations, decide whether to terminate the contract or to exempt part of the
obligations for implementation of the contract or whether to delay the
performance of the contract to by weighing the effects of the events on the
performance of the contract.
Article 8 Liability for Breach of Agreement
Any failure of either party to perform any of the obligations hereunder shall be
deemed as breaching this Agreement. The party in breach shall, within five days
after receiving a notice from the other party explaining the circumstances of
the breach, get the breach cured. If the breach fails to be cured within five
days, the party in breach shall be responsible for compensating the other party
for all the direct or foreseeable losses.
Article 9 Applicable Law and Settlement of Disputes
1. The formation, validity, interpretation, execution and settlement of
disputes in respect of this Agreement shall be governed by the relevant
laws of the PRC.
2. Any disputes arising from the performance of, or in connection with this
Agreement shall be settled through friendly negotiation between both
parties hereto. In case no settlement to disputes can be reached through
friendly negotiation, the disputes shall be submitted to the competent
People's Court with jurisdiction by any party.
Article 10 Effectiveness and Others
1. This Agreement shall become effective upon the signature and seal of the
two parties' legal representatives or authorized representatives.
2. The supplemental documents entered into pursuant to the stipulations of
this Agreement shall form effective parts of this Agreement. This
Agreement can be modified, amended or supplemented upon mutual consent of
the two parties. All modifications, amendments or supplementations shall
become effective after being signed by the two parties in a written form,
and become inseparable parts of this Agreement.
3. There are three original copies of this Agreement, each party shall hold
one copy, and the third copy shall be filed with the relevant real estate
administrative department for records.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands to this
Agreement as of the day and year first above written.
Party A: Shandong Bangsheng Chemical Co., Ltd.
Authorized Representative: /s/ ▇▇ ▇▇▇▇▇▇
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Party B: Shangdong Shengda Technology Co., Ltd
Authorized Representative: /s/ Chen Xiangzhi
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