Exhibit 10.2
AGREEMENT FOR CONTRACT PROCESSING
This Agreement for Contract Processing ("AGREEMENT") is made among the following
parties on July 11, 2006.
SHENZHEN HENGGANG INVESTMENT CO. LTD.
("INVESTMENT COMPANY")
Legal Representative: Wei Zhaoyuan
Address: 2nd Floor, Lian Jian Building, Henggang, Longgang District, Shenzhen
Postal Code: 518115
Contact person: Wei Zhaoyuan Telephone number: 28689268
SHENZHEN LONGGANG HENGGANG XIETIAO ELECTRONICS FACTORY
("FACTORY")
Legal Representative: Xu Junfang
Address: 189 Industrial Area, Henggang, Longgang District, Shenzhen
Postal Code: 518115
Contact person: Xu Junfang Telephone number: 28630150-3202
CONCORD CAMERA HK LIMITED
("CONCORD")
Authorized Representative: Paul Wong
Address: 14th Floor, ADP Pentagon Centre, 98 Texaco Road, Tsuen Wan, Hong Kong
Contact person: Paul Wong Telephone number: 852 2257 4000
Investment Company and Factory are collectively referred to as "HENGGANG
FACTORY," Henggang Factory and Concord are collectively referred to as the
"PARTIES" or individually as a "PARTY".
WHEREAS the Parties wish to enter into an arrangement for contract processing in
accordance with the relevant laws and regulations of the People's Republic of
China;
NOW THEREFORE, upon mutual negotiation, the Parties agree as follows.
1. HENGGANG FACTORY'S RESPONSIBILITIES. Henggang Factory agrees to (a) provide
all necessary assistance in the import and export customs declaration and
clearance for process manufacturing, (b) take all necessary measures and comply
with all regulatory requirements in order to maintain valid and legal operating
permits and licenses for it to perform its obligations hereunder, and (c) take
all other actions necessary for it to engage in contract processing for Concord
and perform its obligations according to the terms contained herein.
2. CONCORD'S RESPONSIBILITIES. Concord agrees to provide to Henggang Factory at
no cost the equipment, spare parts, replacement parts, components, fitting
parts, production materials, packing materials, other auxiliary and accessories
that are necessary for processing and manufacturing purposes (collectively
called "MATERIALS AND EQUIPMENT") pursuant to this Agreement.
1
3. ORDER AND DELIVERY. During the term of this Agreement, Concord agrees to
place orders with Henggang Factory from time to time, and Henggang Factory
agrees to manufacture and deliver such goods in such quantity, quality as
specified in Concord's orders.
4. VENUE OF PROCESSING AND MANUFACTURING. All manufacturing procedures specified
in this Agreement will be carried out at the Factory's premises where the
Materials and Equipment will be located. Materials and Equipment may not be
removed from the Factory's premises at any time.
5. FEES AND CHARGES.
5.1 Concord shall pay to Henggang Factory the following amounts during the
term of this Agreement:
(a) "San Lai Yi Bu" labor processing fee in monthly amount of
HK$490,000 (subject to 53.76% rebate), subject to adjustment
according to the number of employees approved by the government;
(b) management fee in monthly amount of RMB41,667, subject to
adjustment according to the amount approved by the government;
c) state land management fee in monthly amount of RMB7,933;
(d) management fee for China staff in monthly amount of RMB5,000;
and
(e) sanitation and security fee in monthly amount of RMB1,000.
Concord will pay the above amounts on a monthly basis to an account
specified by Henggang Factory. The Investment Company shall make its best effort
to assist in obtaining the final approval and confirmation for the above amounts
from the relevant government authorities.
5.2 Concord shall be solely responsible to pay for:
(a) electricity, water, gas, heat and other utilities at the
Factory;
(b) wages including overtime payment, social insurance benefits
and other employment benefits for Factory's workers; and
(c) insurance for risk of loss and damage of the Materials and
Equipment while on Henggang Factory's premises, insurance and
freight of the processed goods being delivered to Concord.
6. TERM OF AGREEMENT. This Agreement shall be for a term of ten (10) years, from
October 29, 2006 until October 28, 2016. Upon mutual consent and execution
of a renewal contract, this Agreement may be extended after approval by relevant
government authorities.
2
7. PRE-CONTRACT LIABILITIES.
The Investment Company hereby agrees and confirms that Concord has fully
discharged all its obligations and responsibilities for contract processing at
Henggang Factory which arise prior to this Agreement. The Investment Company
hereby covenants not to make any claim for Concord's obligations and
responsibilities which arise prior to this Agreement, including, without
limitation, any claim for payments or benefits under contracts prior to this
Agreement.
8. TERMINATION.
8.1 Concord may terminate this Agreement by twelve (12) months prior written
notice to Henggang Factory.
8.2 Concord may terminate this Agreement immediately by written notice to the
other Party if (a) the Factory's operation license or permit is revoked,
suspended or cancelled making it impossible for the Factory to continue
operation and performance of its obligations hereunder, or (b) a Force Majeure
event makes it impossible for the Parties to continue to perform this Agreement
for a continuous six (6) months' period, Concord shall be entitled to terminate
this Agreement without incurring liability on either Party.
8.3 If either Party terminates this Agreement pursuant to the provisions hereof,
payment shall be made only to the extent of a Party's performance to and
including the date of termination. Nothing in this Article shall restrict the
right of one Party to claim against the other Party for compensation and
indemnification pursuant to other provisions in this Agreement.
8.4 Termination of this Agreement for any reason provided herein shall not
relieve either Party from its obligation to perform up to the effective date of
such termination or to perform such obligations as may survive termination.
8.5 Upon termination pursuant to this Clause 8, Concord shall be entitled to,
and Henggang Factory shall assist in, repossess the Materials and Equipment and
other materials provided by Concord to Henggang Factory.
9. REPRESENTATIONS AND WARRANTIES.
Each Party represents and warrants to the other as follows:
9.1 that the execution, delivery and performance by either Party of this
Agreement (a) is within its power, capacity and authority, (b) does not and will
not violate any applicable law or regulation, or any order or decree of any PRC
court or any instrumentality of any PRC governmental authority, (c) does not and
will not conflict with, result in the breach or termination of, or constitute a
default under any contract, agreement or other instrument to which either Party
is a party; and
9.2 that this Agreement has been duly authorised, executed and delivered by each
Party and constitutes legal, valid and binding obligations of either Party,
enforceable against it in accordance with its terms.
10. FORCE MAJEURE. If a Party to this Agreement cannot perform its duties and
obligations under this Agreement due to an event of force majeure ("FORCE
MAJEURE") such as war, natural disasters or other event which is unforeseeable
and uncontrollable, the Party affected by the Force Majeure event shall promptly
notify the other Party of the nature and extent of the circumstances giving rise
to Force Majeure and negotiate with the other Party for purpose of mitigating
the effect of the Force Majeure. Neither Party shall be liable for damages due
to delay or non-performance during the course of the Force Majeure.
3
11. DISPUTE RESOLUTION. This Agreement is governed by and construed in
accordance with the laws of the People's Republic of China. In the event of
dispute arising from or in connection with the interpretation or performance of
this Agreement, the Parties agree to submit any dispute to People's Court with
proper jurisdiction in Shenzhen municipality.
12. NO ASSIGNMENT. Neither Party shall assign its rights and/or obligations or
delegate its duties under this Agreement without the prior written approval of
the other Party. This Agreement and all of the terms and provisions hereof will
be binding upon, and will inure to the benefit of, the parties hereto, and their
respective successors and approved assigns. In no event shall any permitted
assignment hereunder release the assignor from its obligations hereunder.
13. CONFIDENTIALITY.
13.1 All confidential information provided by Concord to Henggang Factory for
the purpose of contract processing under this Agreement, including but not
limited to specifications, external design, technical design and engineering,
work processes and technology, testing procedure, packing design and processes,
Concord's customers, production cost, business plans, and all other information
relating to Concord and Concord's products, (i) shall be treated in strict
confidence; (ii) are the sole property of Concord; (iii) shall be used by
Henggang Factory for the purpose of performing its obligations under this
Agreement only; (iv) shall not be used by Henggang Factory for any other
purposes; and (v) shall not be disclosed to any third party unless required by
law or with prior written consent of Concord.
13.2 The obligations of this Clause shall survive this Agreement.
14. TRADEMARKS. Concord's trademarks, patents, label designs, product
identification, artwork, advertising, marketing and promotional concepts
(collectively "TRADEMARKS") shall remain the property of Concord. Any and all
rights in the above under trademark or copyright law or other property rights
shall inure to the benefit of and be the exclusive property of Concord. Concord
grants the Henggang Factory a limited right to use the Trademarks but only for
the purpose of the performance of its obligations hereunder, provided further
that such right is nonexclusive, non-assignable and non-transferable.
15. AMENDMENT. This Agreement cannot be modified except by an agreement in
writing signed by authorized representatives of both parties.
16. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
between the Parties with respect to its subject matter and supersedes all prior
or contemporaneous agreements in regard thereto.
17. EFFECTIVENESS. This Agreement shall become effective upon execution by
authorized representatives of the Parties on the date first written above.
4
18. SEVERABILITY. In the event that any provision of this Agreement is deemed to
be invalid or unenforceable by any court of competent jurisdiction, the
remaining provisions of this Agreement shall remain enforceable and binding upon
the parties.
19. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each
constituting one and the same document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their legal representatives or authorized representatives as of the date
first above written.
SHENZHEN HENGGANG INVESTMENT CO. LTD.
/s/ Wei Zhaoyuan
- ---------------------------
Authorized representative
Name: Wei Zhaoyuan
Title: Legal Representative
SHENZHEN LONGGANG HENGGANG XIETIAO ELECTRONICS FACTORY
/s/ Xu Junfang
- ---------------------------
Authorized representative
Name: Xu Junfang
Title: Legal Representative
CONCORD CAMERA HK LIMITED
/s/ Paul Wong
- ---------------------------
Authorized representative
Name: Paul Wong
Title: Managing Director
5