English Translation) Real Estate Lease Agreement
Exhibit
10.31
(English
Translation)
Date:
Jan. 1, 2005
Lessee:
People’s Committee of Heijuzi Village, Xingfu Township, Nanguan
District
Lessors:
Changchun Yongxin Dirui Pharmaceuticals Co., Ltd.; Jilin Yongxin Pharmacy Chain
Co., Ltd.
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1.
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This
agreement describes the location, size, quality, and facilities of the
premises to be leased.
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1.1.
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Location:
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. Areas newly constructed by Lessee
and total leased premises cover 24 and 337 square meters,
respectively.
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1.2.
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Other
locations Lessors lease from Lessee cover a combined 42,000 square
meters.
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1.3.
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Leased
location is 3-stories tall and equipped with basic utilities and
telecommunications connectivity.
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2.
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Lease
period
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2.1.
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15
years, from July 1, 2005 to June 30,
2020.
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3.
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Lease
purpose
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3.1.
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Lessor
shall use leased premise for pharmaceutical wholesale and
distribution
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4.
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Leasing
price, payment method, and payment
schedule
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4.1.
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First
phase of the lease shall be a 4-year period from July 1, 2005 to June 30,
2009, at RMB 1.677 million per year. Second phase shall be for 2 years
from July 1, 2009 to June 30, 2011, at RMB 6.708 million per year. Third
phase shall be for 4 years from July 1, 2011 to June 30, 2015, at RMB
8.256 million per year. Fourth phase shall be for 5 years from July 1,
2015 to June 30, 2020, at RMB 9.288 million per year. The total amount of
the lease shall be RMB 99.588
million.
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4.2.
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Lease
payments shall be prepaid prior to the start of each lease year. Thus
payments shall be as follow: 1) from July 1, 2005 to June 30, 2009, a
one-time payment of RMB 1.677 million is due by June 30 of each year prior
to the start of the next lease year; 2) starting from the lease period
beginning July 1, 2009, a one-time quarterly lease payment is due one
month before the start of the quarter. For example, for the lease quarter
from July 1, 2009 to Sept. 30, 2009, payment is due by June 1, 2009; for
the lease quarter from Oct. 1, 2009 to Dec. 30, 2009, payment is due by
Sept. 1, 2009, and so forth. Lessors are responsible for utilities and
repair fees from July 1, 2005 to June 30,
2008.
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5.
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Lessors’
legal matters and payment
responsibility
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5.1.
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All
leasing parties have the duty to timely make payments
due.
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6.
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Repairs
and maintenance of leased property
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6.1.
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Standard
repairs and maintenance shall be Lessors’
responsibility
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6.2.
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After
July 1, 2008, each year Lessee shall refund ▇ ▇▇▇ per square meter to
Lessors out of the lease payments for repair fees, totaling 42 and ▇▇▇ ▇▇▇
respectively.
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6.3.
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During
the lease period, Lessee shall replace heating pipelines and components
once, and be responsible for water facility
issues.
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7.
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Lease
tax responsibility
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7.1.
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Lessor
and Lessee are each responsible for 50% of the property
tax.
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8.
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Changes
in Lessor-Lessee relationship
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8.1.
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If
Lessee transfers the lease to a third party, it must give Lessor 3-months
notice, which gives Lessor the purchasing rights listed below. If Lessor
gives up the purchasing rights, the party acquiring the leased property
then becomes the bona fide lessor and obtains all the accompanying rights
and duties.
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8.2.
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If
Lessor for business needs to assign the lease to a third party, it must
notify Lessee in writing. After obtaining approval from Lessee in writing,
the party acquiring the leased property then becomes the bona fide lessor
and obtains all the accompanying rights and
duties.
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9.
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Lessee’s
rights and duties
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9.1.
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Provide
the leased premises in accordance with this
contract.
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9.2.
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Pay
50% of the property taxes for the leased
premises.
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9.3.
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Be
responsible for leasing procedure and guarantee its
legality.
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9.4.
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Starting
from Nov. 1, 2008, provide heating to the leased premises when required
under Changchun City regulations for
heating.
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10.
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Lessor’s
rights and duties
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10.1.
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Make
timely lease payments.
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10.2.
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Register
with Nanguan District National and Local Tax
Bureau
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10.3.
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Be
responsible for heating bills from July 1, 2005 to June 30,
2008.
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10.4.
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In
order to change the purpose of the leased premises, notify Lessee in
writing with 3-months notice and receive Lessee’s
approval.
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10.5.
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In
order to assign the lease to a third party, notify Lessee in writing with
3-months notice and receive Lessee’s
approval.
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10.6.
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During
the lease, make efforts to limit man-made property damage to the leased
and pay compensation for damage that
occurs.
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10.7.
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Timely
pay water, electrical, and telecommunication expenses incurred during
operation of the leased premises.
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10.8.
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When
hiring employees, to give consideration to people from Lessee’s village
under nondiscriminatory hiring
standards.
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11.
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Responsibility
for violations
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11.1.
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Lessee’s
responsibility for violations
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11.1.1.
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During
the lease period, guarantee Lessor’s absolute right of use of the leased
premises
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11.1.2.
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Assure
that utilities providers do not without cause cease water or electricity
service or otherwise impact Lessor’s standard business operations, and
compensate Lessor for consequent losses
incurred.
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11.2.
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Lessor’s
responsibility for violations
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11.2.1.
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Failure
to timely make lease payments shall result in late fee penalties of RMB
500 per day late. If outstanding lease payments accumulate for over one
month, Lessee shall have the right to terminate this contract and
repossess the leased premises.
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11.2.2.
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Failure
to adhere to the lease payment schedule under 4.1 shall grant Lessee the
right to terminate this contract and repossess the leased
premises.
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11.2.3.
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Assigning
or transferring the lease without Lessee’s agreement shall grant Lessee
the right to terminate this
contract.
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11.2.4.
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If
Lessor causes property damage to the leased premises, Lessor shall restore
the premises to its original condition, or if restoration is impossible,
assume the responsibility to compensate
Lessee.
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11.2.5.
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Upon
lease expiration on June 30, 2020, Lessor shall have fully paid any
outstanding balance with Lessee, or incur ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ per day for
amounts overdue.
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11.2.6.
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If
Lessor terminates the contract during the lease period, any amounts it has
prepaid for the next leasing period are not refundable, and Lessor shall
additionally pay the lease amount for the next annual
quarter.
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12.
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Dispute
resolution
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12.1.
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If
the parties have a dispute and negotiation is ineffective, the dispute may
be brought before the local People’s Court for
resolution.
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13.
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Conditions
for relief
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13.1.
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If
for unavoidable reasons the leased premises is damaged or destroyed,
causing a loss for both Lessee and Lessor, and is verified by experts,
neither party shall assume responsibility for the
loss.
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14.
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Other
matters
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14.1.
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Upon
lease expiration, responsibility for expenses from repairs, improvements,
etc. for the premises shall be determined through negotiation by the
parties.
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14.2.
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Upon
lease expiration, if Lessor wishes to extend the lease, it shall have
priority rights to continue leasing the
premises.
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14.3.
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Neither
party shall unilaterally alter or abrogate this
contract.
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14.4.
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For
matters not established in this contract, the parties shall negotiate
supplementary, legally-enforceable
terms.
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14.5.
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This
contract supplants previous agreements between the
parties.
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14.6.
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Copy
requirements.
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