Document:

exv10w1

 

EXHIBIT 10.1

FACTORY PREMISES AND QUARTERS LEASE AGREEMENT

Party A: Xin He Economic Development Company, Fu Yong Town, Bao An District,

               Shenzhen City;

               Xin He Village, No. 5 Villagers Team, No. 6 Villagers Team

Agents: Chen Huo Ming, Fan Jia Fu     Tel: 13509682933, 13808852255

Party B: Hypercom Electronics Manufacturing (Shenzhen) Co., Ltd.

	 	 	 
	Agents:

	 	Tel:

After friendly negotiation and under the principle of equality and mutual
benefits, Party A and Party B have reached the following agreement in respect
of the lease of factory premises and quarters:

	1)	 	Lease address and area:

Party A agrees to lease to Party B the following denominations of the Xin
Qing Industrial Complex (district 2) situated at Xin He Village, Fu Hai
Road (please refer to the drawings for details):

	 	A)	 	Block A3 (4 floors) of the factory premises with an area of 6,800
sq. m. approximately;
	 
	 	B)	 	Block B5 (5 floors) of quarters with an area of 1,420 sq. m.
approximately
	 
	 	C)	 	Fifth floor of Block B2 quarters with an area of 800 sq. m.
approximately

The total area of the factory premises and quarters is approximately 9,020
sq. m.
(the actual area shall be subject to the projected area of the buildings)
and the structure shall be framework.. The leased premises shall be for
Party B’s use.

	2)	 	Contractual Period:

The contractual period for this agreement shall be six years, i.e. from
October 1, 2004 to September 30, 2010.

	3)	 	Delivery of the factory premises for use and period of decoration:

	(I)	 	The delivery date of the factory premises shall be the
date on which the decoration of the main structural body and of
the internal/external walls have been completed and the water,
electricity (transformer),

 

 

	 	 	doors and windows have been installed.
	 
	(II)	 	Date of delivery: The factory premises and quarters
shall be delivered on August 30 for use and the period of
decoration shall be one month (the decoration period shall be
rent-free)
	 
	(III)	 	Upon completion of the decoration work, Party A shall
notify Party B in writing, and if there is no response from Party
B within five days, it shall be deemed that the delivery is
satisfactorily passed.
	 
	(IV)	 	Commencement of rent: Rent shall commence to count with
effect from October 1, 2004.

	4)	 	The unit rental price of the factory premises and the amplitude of
increase:

	(I)	 	The rental unit in respect of the factory premises and
quarters shall be Renminbi Twelve Dollars per square meter per
month (Party B shall be responsible for payment of rental tax,
and management fee ).
	 
	(II)	 	Since the delivery date of each block of factory
premises and quarters, the rent shall remain unchanged for the
first five years and thereafter, be increased once every five
years and the amplitude of increase shall be 5%. If both parties
renews the contract upon the maturity, the rent shall be further
increased by 5% every five years.

	5)	 	Terms of Payment:

	(I)	 	Upon signing of this agreement, Party B shall pay Party
A a deposit of Renminbi Two Hundred Thousand Yuan, and upon
satisfactory inspection of delivery by Party A, Party B shall pay
Party A the first monthly rent of RMB108240.
	 
	(II)	 	The date of payment shall be before the 10th of every
month. Payment by Party B shall be settled in cash or by check.
Party A shall issue the tax invoices and Party B shall be
responsible for payment of tax accordingly. Overdue rent shall
be subject to a penalty payment of 3% per day.

	6)	 	Party A’s responsibilities:

	(I)	 	Party A shall be responsible for the installation of a
315KVA transformer (including a low voltage power distributing
cabinet), and one water main meter, one electricity main meter
shall be installed in

2

 

	 	 	the factory premises and quarter.
	 
	(II)	 	Party A shall be responsible for the expenses for water
supply equipment in the factory premises and quarter.
	 
	(III)	 	Party A shall provide for one set of two-ton cargo
lift for Party B’s use. During the contractual period, Party B
shall be responsible for the maintenance/repair expenses and
payment of relevant expenses.
	 
	(IV)	 	Party A shall register the Contract with the house
lease registration management authority and obtain the lease
registration certificate.
	 
	(V)	 	After the expiry of the contractual period and under
equality conditions, Party B shall have the priority to renew
this agreement and sign a new agreement.
	 
	(VI)	 	Party A shall be responsible for building up
surrounding walls and the satisfactory compliance of fire
prevention inspection of the premises.
	 
	(VII)	 	In case of any of the following circumstances, Party B
shall have the right to terminate the Contract at any time and
Party A shall return to Party B the deposit RMB 200,000 already
paid by Party B.

	1)	 	Party A cannot hand over to Party B the
decorated factory building and quarters before October 1
2004.
	 
	2)	 	Party A is involved in any dispute over the
ownership of the factory building and the use right of the
land under the factory building, or Party A cannot legally
lease the factory building for industrial purposes.
	 
	3)	 	The factory building and quarters or related
facilities provided by Party A are damaged not because of
Party B’s fault and Party A cannot recover the damages within
the acceptable time period (excluding force majeure).
	 
	4)	 	Party A cannot provide Building Project
Completion Acceptance Report.

	7)	 	Party B’s responsibilities:

	(I)	 	Party B shall effect on-time payment of rent,
water/electricity charges, cleaning expenses, etc. to relevant
authorities.
	 
	(II)	 	Party B shall maintain Party A’s property and the
public equipment in good order. Party B shall be responsible for
management of public security with Party A’s assistance. If
there is damage to the property caused by Party B, Party B shall
be responsible for the repair.
	 
	(III)	 	Party B shall be responsible for the compensation if
there is damage

3

 

	 	 	to the building structure due to the improper use by Party B.
	 
	(IV)	 	Party B shall not sublet the factory premises or
quarters to a third party or other organization and shall not
alter the original structure of the factory premises. If
alteration is required for production, , Party B shall seek
consent from Party A, provided that the general structure of the
building remain intact. If Party B deliberately makes
alteration, thereby causing problems to the structure of the
factory premises, Party B shall assume all the responsibility and
bear all the expenses incurred.
	 
	(V)	 	Party B shall strictly comply with the relevant fire
prevention regulations of the state, and shall carry out the
production safety work for fire prevention and electricity
consumption. In case of disasters caused by Party B, all
responsibility and economic losses shall be borne by Party B.
	 
	(VI)	 	Party B shall carry out production and discharge of
sewage in accordance with the standards set up by the local
environmental protection bureau to which Party B shall pay a
sewage fee.
	 
	(VII)	 	Party B shall be responsible to pay the rental tax and
management fee within the lease period.
	 
	(VIII)	 	Party B shall effect on-time payment of salary to the employees
in accordance with the requirements of the Labor Ordinance. If
payment of rent and salary be delayed for more than two months,
Party A shall be entitled to notify the Labor Management
Department to carry out inspection of wages and to stop the
delivery of goods from the factory until the employers’ salaries
and rent have been fully paid.
	 
	(IX)	 	If Party B withdraws from this agreement during the
term of this Agreement, all the remaining rent, whether or not
Party B continues to rent the premise, shall be paid, and the
deposit shall not be refunded.
	 
	(X)	 	Party B shall be responsible for building the security
room and the main door.
	 
	(XI)	 	Party B shall pay a monthly management fee of RMB1800
to the Management Office.

	8)	 	Other terms and conditions:

	(I)	 	Upon the expiry of this agreement and under equal
conditions, Party

4

 

	 	 	B shall have the priority to renew the agreement. If Party B
does not continue to rent the factory premises, two months’
notice shall be served to Party A in advance. The fixture
inside the factory premises invested by Party B shall belong to
Party A, and Party B shall in accordance with Party A’s
requirement repair damaged facilities inside or outside the
premises, but excluding natural losses and wearing. Upon the
satisfaction inspection thereof by Party A, formalities for
terminating this agreement shall be arranged, and the deposit
of RMB 200,000 shall be returned to Party B.
	 
	(II)	 	Under the equal conditions, the recycling of Party B’s
industrial waste shall be managed by Party A.

	9)	 	If during the contractual period of this agreement any one of the
following circumstances happens, this agreement shall be automatically
terminated:

	(I)	 	Occurrence of force majeure or accidents which prevent
the performance of this agreement.
	 
	(II)	 	Dismantlement of the leased premises due to
repossession of land by the government.

	10)	 	All matters not accounted for herein may be incorporated by negotiation
of both parties. After signing this agreement, neither party herein shall
be in breach and both parties are required to abide thereby.

	11)	 	This agreement is executed in quadruplicate with Party A and Party B
holding one copy each which shall have equal legal effect. This agreement
shall become effective upon signing by the representative of both parties
herein.

Party A:

Xin He Village Economic Development Company, Fu Yong Town, Bao An District,

Shenzhen City

(Xin He Village, No. 5 Villagers Team, No. 6 Villagers Team)

                
        (seal affixed)

Representative: (signature affixed)

Party B:

5

 

Hypercom Electronics Manufacturing (Shenzhen) Co., Ltd.

Representative: (signature affixed)

Date: September 1, 2004

6<PAGE>

                                                                   EXHIBIT 10.38

                    SUMMARY OF 2004 SHORT-TERM INCENTIVE PLAN

Under the 2004 Short-Term Incentive Plan (the "Plan"), all employees of the
Company and its subsidiaries are entitled to a cash bonus based upon the
Company's consolidated net income for the 2004 calendar year. The amount of the
bonus will be a percentage, ranging from 35% to 150%, of a pre-determined target
bonus amount, based upon the level of net income achieved in relation to the
targeted level of net income for the year. The target bonus amount is a
percentage of the employee's base salary and is determined based upon the
employee's position. Employees must be employed by the Company at the time the
bonus is issued in 2005, in order to be eligible to receive payment.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}]]