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EXHIBIT 2.6
ENGLISH TRANSLATION
CONSTRUCTION AGREEMENT
Namtai Electronic (Shenzhen) Co. Ltd.
Additional Construction of Equipment Work for the New Factory
AND the Interior Decoration of Office
May 19,1995
Namtai Electronic (Shenzhen) Co. Ltd.
Shimizu Corporation
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ENGLISH TRANSLATION
AGREEMENT
Pursuant to the additional equipment work for the new factory and the interior
decoration of office of Namtai Electronic (Shenzhen) Co. Ltd. ("hereinafter
referred to as the "Work"), Namtai Electronic (Shenzhen) Co. Ltd. (hereinafter
referred to as the "Company") and Shimizu Corporation (hereinafter referred to
as the "Contractor") have entered into this Agreement in accordance with the
terms and conditions as stipulated below
(1) Name and Site of the Work
1. Name of the Work; Additional equipment work and interior
decoration work of office of the Shenzhen factory of Namtai
Electronic (Shenzhen) Co. Ltd.
2. Site: Gusu Industrial Estate, Xinan, Baoan, Shenzhen, PRC.
(2) The Work Content
1. Additional equipment work and office's interior decoration of
Shenzhen factory.
(3) Work period
1. Commencing Date : May 22, 1995
2. Completion Date: November 30, 1995
(4) Contract sum
The Company shall pay to the Contractor a total sum of HK$32,687,000,
details as set forth in the list attached hereto.
(5) Payment Schedule
The Company shall pay to the Contractor in accordance with the following
payment schedule
Upon signing of this Agreement 20% HK$6,537,400
(May 31, 1995)
July 31, 1995 20% HK$6,537,400
September 30, 1995 25% HK$8,171,750
November 30, 1995 25% HK$8,171,750
December 31, 1995 10% HK$3,268,700
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The Contractor shall pay to the Company a 5% retention for guarantee
of repair as soon as it receives the 10% balance contract sum.
(6) Payment term
1. The Company shall telex transfer to the following designated
account of the Contractor in HK$
Bank of Tokyo, Shenzhen Branch
Shimizu Corporation Shenzhen office
HK$ Account No. 500000775
2. Charges on such telex transfer shall be borne by the Company
(7) Purchase of imported equipment
Pursuant to the provisions of this Agreement, the equipments,
machineries, appliances, tools, etc. shall be solely arranged by the
Contractor. Nevertheless, if such goods have to be imported, after the
Company has confirmed the quantity and price, with the approval of the
Foreign Economic and Trade Committee, it will submit the list of
equipments to the Contractor who shall act as its agent to purchase the
designated equipments outside China. The Company shall be responsible
for its importation and the price of such equipments shall be included
in the contract sum.
(8) Miscellaneous
1. The terms and conditions of this Agreement is formulated on
the basis of the terms of agreement of Japan's "Four United
Committee" with supplemental terms that [when there is changes
in the laws, regulations of Shenzhen city and China and the
instructions from government department relating to the design
policy and drawings which affect the Work period and Contract
sum, the Work period and Contract sum shall be revised
accordingly.]
(9) Enforceability of Agreement
This Agreement shall become effective upon its signing and shall remain
in full force and effect until both the Company and the Contractor have
executed their responsibility. Provided however, if the Company or the
Contractor have not obtained China government department's approval for
implementing this Agreement, this Agreement shall become void.
Each of the Company and the Contractor shall keep a set of this Agreement.
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ENGLISH TRANSLATION
May 19,1995
Company:
Gusu Industrial Estate, Xinan, Baoan,
Shenzhen, PRC.
Namtai Electronic (Shenzhen) Co. Ltd.
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Director/General Manager Y. Inagawa
Contractor:
Shibaura 1-2-3, Minato-ku, Tokyo, Japan
Shimzu Corporation
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Manager
cons-agt
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TERMS AND CONDITIONS
(1) General
1. The Company (hereinafter referred to as "Party A") and the
Contractor (hereinafter referred to as "Party B") shall mutually
and equally execute this Agreement.
2. Party B shall comply with the terms & conditions ("the Terms")
of this Agreement and the design drawings and details of work
(hereinafter referred to as "the Design Drawing Book" and
incorporating the site specification and explanation items) to
complete and deliver the Work and Party A shall settle all the
Contract sum to Party B.
(2) Work Site etc.
1. Party A shall provide all necessary site, building ("the Work
Site") to Party B in accordance with provision of the Design
Drawing Book and ensure that the same shall be provided to Party
B prior to the required date. (if the Design Drawing Book has
specified such date, the date shall follow that date)
2. In the event of problems relating to the boundary or its
adjoining site, Party A shall settle with the assistance of
Party B.
(3) Details of Contract sum and Work schedule Party B shall submit details
of contract sum and Work schedule to Party A upon signing of this
Agreement. (hereinafter referred to as "the Contract Breakdown")
(4) Assignment and Appointment
Party B shall not assign or appoint the whole or the majority part of
the Work to any third party.
(5) Rights & Obligations on Assignment
1. Neither party shall assign any rights and obligations of this
Agreement to any third party unless with the written consent of
the other party.
2. Neither party shall assign, lent or pledge the target object and
materials to any third party unless with the written consent of
the other party.
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(6) Site responsible person
1. Party B shall designate a site responsible person and notify
Party A in writing.
2. The site responsible person shall be fully in charge of all
the Works provided that he should notify Party A on such
significant matters relating to the Site's operation as the
site management, safety measures, disaster prevention and
commencing date of Work, etc.
(7) Differences relating to the Work
Party A shall notify Party B in writing specifying the reason when it
considers that the act of the site responsible person and his workers
are not appropriate for Party B to take necessary action.
(8) Materials and machineries of the Work
1. Party B shall use the designated materials and equipment
machineries as contained in the Design Drawing Book.
Otherwise, it should use the product in accordance with the
standard of the People's Republic of China. Party A shall
request Party B to change (if it considers the same not
appropriate).
2. Party B shall test the materials and machineries if the Design
Drawing Book has specified such testing.
3. All direct cost for the above testing shall be borne by Party
B. However, all cost for testing not specified in the Design
Drawing Book shall be borne by Party A.
4. Party B shall arrange its own machineries, equipments,
tooling, etc. to facilitate the Work. Party A shall support
in the imported formalities if necessary.
(9) Payment of materials and leasing of goods
1. The goods or materials shall be inspected or duly passed by
Party B when making payment of materials or leasing of goods.
2. After Party B has paid for the materials or goods, if it
discovered any hidden defects in accordance with the aforesaid
inspection or test, it shall notify Party A for instruction.
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3. The date of delivery of goods and the payment of materials
shall be based on the Work Schedule submitted by Party B. If
the place of delivery has not been specified in the Design
Drawing Book, it shall be deemed the Site.
4. Party B shall carefully safe-keep and use all paid materials
and leased goods.
5. Unless specifically provided in the Design Drawing Book, all
usage of paid materials and residue materials shall be treated
according to the instruction of Party A.
6. lf not designated in the Design Drawing Book, the place for
returning materials not necessary to pay or used goods shall
be the Site.
(10) Prevention of damage
1. Party B shall at its own expenses protect all target object,
materials and prevent any damage to the neighboring object or
third party before yielding up the completed Work and take
necessary measures in accordance with the Design Drawing Book
and related regulations.
2. Upon confirmed by both Party A and Party B that the measures in
respect of the protection of the object attached to the Work
Site should not be responsible by Party B, such expenses shall
be borne by Party A.
3. Party B shall seek for advice of Party A in the prevention of
damage if it thinks fit. In emergency cases, Party B can take
action before liaising with Party A.
4. Party B shall comply with the requirements of Party A in taking
temporary measures.
5. The cost for the aforesaid measures shall be mutually
determined by both parties.
(11) Third Party Injury
1. Party B shall compensate for the injury of third party during
the course of Work. Nevertheless, if it is apparent that the
responsibility rests with Party A, Party A shall be liable.
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2. If Party B has taken all appropriate course of prevention of
noises, the sinking of foundations, stoppage of underground
water, etc. without success and caused injury of third party,
Party A shall be liable regardless of the aforesaid provision.
3. Any disputes with third party regarding the aforesaid provision
and other matters of the Work shall be mutually managed by both
parties.
4. The damage caused by the provision to third Party of sun
shelter, wind damage, obstruction of electronic wave, etc.
which are the responsibility of Party A shall be managed &
settled by Party A. If necessary, Party B shall assist
Party A. Compensation to third party shall be borne by
Party A.
5. Due to the aforesaid, Party A shall follow the request of Party
B to postpone the Work Period, if necessary, which date shall
be mutually determined by both parties.
(12) General damage to the Work
1. Party B shall take responsibility on all damage to the object
of this Agreement, materials or other general damage in the
course of work prior to its completion & the Work Period shall
not be delayed.
2. If the aforesaid damage falls within the following
circumstances, Party A shall be liable. If necessary, Party B
can request for postponement of Work Period.
(a) problem of Party A and hindered the Commencement Date
or Party A delayed or stopped the Work
(b) the delay in the payment of material or leased goods
and caused the waiting or suspension of the Work of
Party B
(c) the delay in payment of the deposit or installment
and result in the suspension of the Work of Party B
(d) Because of the China government, such as apparent
delay in the permission of Work import or custom
formalities and affect the Work
(e) Force Majeure as stipulated in Clause (13)
(f) other causes due to Party A's responsibility
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(13) Force Majeure
Party B shall not be responsible for the following damage as a result
of Force Majeure but shall be entitled to extend the Work Period which
cost shall be mutually determined by both parties.
(a) Significant change in international situation or war;
(b) riots or strikes;
(c) orders from governmental authorities for execution, demolition
or forbidden of transportation, etc.;
(d) the change of laws or regulations in China, Japan or Hong
Kong;
(e) natural disaster, such as earthquake, burst of volcano,
typhoon, rainstorm that caused flooding;
(f) the influence by the damage of neighbouring site;
(g) the prolonged time for unloading of imported goods;
(h) the problems of Party A on the lease of the land of the Site.
(14) Damage Insurance
Party B shall arrange for their own insurance on its responsibility
and third party insurance, etc. and notify details to Party A.
However, the overall insurance of the building shall be insured by
Party A or the owner of such building.
(15) Completion inspection
1. After the completion of the Work by Party B in accordance with
the Design Drawing Book, it shall be passed by the relevant
China departments and then request for inspection by Party A.
Party A shall accompany with Party B for inspection and
deliver up the target object.
2. If it is found that Party B has not complied with all the
necessary requirements, Party B shall rectify within the Work
Period or within the designated time stipulated by Party A for
re-inspection by Party A and relevant departments.
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3. Party B shall liaise with Party A to clear up the Site within a
designated time after completion of the Work.
4. If the clearing up of the Site as aforesaid is delayed without
reason. Party A shall take action and charge the cost to
Party B.
(16) Partly use
1. Although the Work is still in progress, if necessary, Party A
can begin using a part with the written consent of Party B and
the confirmation of relevant departments. The part that used
by Party A shall be managed by Party A.
2. Party A shall be responsible for the damages caused to the
aforesaid part used by it.
(17) Request, Payment & Settlement
1. Following the passing of the inspection as provided in clause
(15) above, Party B shall yield up the object to Party A who
shall settle all the payment in this Agreement.
2. Party A shall be entitled to settle part of the Contract sum
for the portion of object that passed the inspection.
(18) Protection of Defects
1. Party A shall request Party B to rectify the defects occurred
in the Work within the required time or to compensate the
loss in lieu thereof. Provided however, if such defect is
immaterial and the cost for making good the same is
excessively high, Party A and Party B shall negotiate mutually.
2. The guarantee of the aforesaid defects shall be calculated for
6 months from the delivery date as stipulated in sub-clause 1.
and 2. of Clause (17).
3. Regarding defects on the interior decoration and furnitures, if
Party A has requested for rectification or replacement upon the
inspection of Party A, Party B shall have no responsibility
thereof. However, hidden defects shall still remain 6 months
guarantee (wear and tear excepted)
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4. Party A shall immediately notify Party B for the defect
mentioned in 1. above upon the yielding up of the object.
Otherwise, it shall not request for rectification or
compensation notwithstanding the provision of 1. above save
and except the knowledge of Party B.
5. If Party A has not submitted the claims, within the period
provided in sub-clause 2. above for the damage or defects
affected by sub-clause 1. above within 3 months, all such
rights shall become invalid.
(19) Alteration of Work and Work Period
1. Party A shall make additional or alter the Work, if necessary.
2. Party A shall request to Party B for alteration of the Work
Period.
3. Party B shall claim for compensation for loss to Party B due to
the aforesaid sub-clauses.
4. Party B shall with reason request for extension of the Work
Period due to additional work, alteration of work, suspension
of work due to sub-clause 1 of clause 22. force majeure, etc.
Extension of time shall be mutually agreed upon.
(20) Alteration of Contract sum
1. Either party shall request for the other party to alter the
Contract sum for the following:
(a) alteration or addition of Work
(b) change of Work Period
(c) during the term of this Agreement, there is
significant consequence to this Agreement due to the
changes of laws, regulations, economic situations,
etc. that make the Contract sum becomes unreasonable.
(d) the Contract sum becomes unreasonable subsequent
to the suspension of Work or recommencement of Work
after damage.
(e) changes to the type, quantity, place of delivery of
materials or goods.
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2. The Contract sum with regards the reduction of Work shall be
completed by reference to the provision of the details or Work.
Additional work shall be calculated by reference to the
prevailing market price to be determined by both parties.
(21) Delay and Default fine
1. if Party B fails to deliver the target object due to its own
responsibility, Party A shall be entitled to a daily default
fine at 0.1% of the balance Contract sum after deducting the
completed portion, the part used by Party A pursuant to Clause
(16) and the completed inspection work material.
2. If Party A fails to comply with the provision of sub-clause 1
or 2 of Clause (17) hereof for the payment of Contract sum or
the sum equivalent to the Work, Party B shall be entitled
to the daily default fine of 0.1%.
3 . The aforesaid provision applies to the delay in settling the
deposit or installment by Party A.
4. Party B shall be entitled to reject the delivery of target
object if Party A fails to comply with the provision of 2.
above. Party B shall not be liable for any damage to the
target object if it has taken reasonable care to manage.
The cost of such management by Party B shall be borne by
Party A.
(22) Rights of termination by Party A
1. If necessary, Party A shall terminate the Work and cancel this
Agreement but shall compensate for loss to Party B.
2. Party A shall be entitled to terminate this Agreement and
claim for damages against Party B for the following
circumstances
(a) Party B fails to start the Work on the Commencement
Date without reasonable excuse.
(b) if fails to complete the Work within the Work Period
or forecast the completion in accordance with the
Work Schedule.
(c) Party B fails to comply with the provision of
Clause (4).
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(d) Party B fails to comply with the provision of
sub-clause 2 of Clause (20) without reason and fails
to settle despite the pushing of Party A.
(e) Other than the 4 items mentioned above, Party B fails
to comply with the terms and conditions of this
Agreement and which caused the failure to achieve
this Agreement.
(f) Party B fails to request for termination pursuant to
any reason provided in sub-clause 2. of Clause (23).
(23) Rights of termination by Party B
1. Party B shall be entitled to terminate this Agreement
on the following circumstances and claim for damages
against Party A despite repeated reminder
(a) Party A fails to settle deposit or installment.
(b) Party A without reason fails to observe sub-clause 4
of Clause (19) or sub-clause 2. of Clause (20).
(c) Party A fails to provide the Site as stipulated
in Clause (2), or due to force Majeure.
(d) Party A's responsibility that cause significant
delay in the Work other than 3 above items.
2. Party B shall be entitled to cancel this Agreement due to
the following:
(a) the aforesaid day or suspension of Work for
exceeding 1/4 of the Work Period.
(b) Significant reduction of Work by Party A for more
than 1/2 of the Contract sum.
(c) the non-fulfillment by Party A of the terms of this
Agreement that make it impossible to execute by
Party B.
(d) failure to pay for the Contract sum.
3. Party B can request for damages for the aforesaid
circumstances.
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(24) Method of termination
1. Party A shall accept for the completed part and the materials
and equipments purchased by party B and settle mutually
2. Pursuant to the provision of sub-clause 2. of Clause (22), all
Contract sum excessively paid by Party A shall be refunded to
Party A with interest calculated at the same rate as the short
term loan in China.
3. Both Party A and Party B shall clear up their goods on the
Site within the time agreed by both parties upon its
termination.
4. If either party fails to deal with the aforesaid despite
reminders, the other party shall take action on its behalf and
change the necessary cost.
(25 Settlement of dispute
Any disputes arising from the execution of this Agreement, the Design
Drawing Book, the Terms, etc. shall be settled pursuant to the
International Trade Laws Arbitration Rules by means of one or more
arbitrators selected therein.
(26) Other matters
1. Any terms not stipulated in this Agreement and the Terms
shall be mutually negotiated.
2. The interpretation of this Agreement applies to Japanese
version.
(27) Supplement
1. This Agreement shall become effective upon its execution.
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