First China Pharmaceutical Group, Inc.: Exhibit 10.4 - Filed by newsfilecorp.com






Lease Agreement of Exhibition Room, WarePremises and Office
Room of Yunnan
 Lixiang Pharmaceutical Distribution Center 

(Contract No. ) 

The Lessor (Party A): Yunnan Lixiang WarePremises Co., Ltd.

The Lessee (Party B): Kunming Xinyuantang Pharmaceutical Co., Ltd. 

Pursuant to the provisions of the Contract Law of People’s
Republic of China and Regulations on Premises Leasing of Kunming City
(hereinafter referred to as the “Regulations”) and based on the equality,
voluntary, fairness and good faith, The Parties hereby conclude this Agreement
on Party B leasing the exhibition room, warePremises and office room owned by
Party A upon consensus through negotiations (this “Agreement”). 

	Article 1. 	Lease Purpose 



	1.1 	
      Party B hereby promises to Party A that the Premises
      leased by it (the “Premises”) shall be used as its exhibition room,
      warehouse and office room and undertakes that it will comply with the
      relevant State and Kunming City’s provisions on Premises using and
      property management.

	 	 
	1.2 	
      Party B undertakes that it will not take the liberty of
      changing the use purpose agreed aforesaid without obtaining the written
      consent of Party A and any approval required by the relevant departments
      for the lease duration.




	Article 2. 	Delivery Date and Duration




	2.1 	
      The Parties agree that Party A shall deliver the
      Premises, with 6 floors and an area of 4,391.74 m2 before
      August 30, 2012. The lease duration shall start from September 1, 2012 and
      end at August 30, 2013.

	 	 
	2.2 	
      Upon the expiry of the lease duration, Party A may be
      entitled to take back the Premises and Party B shall return the Premises
      on time. In the case that Party B needs to continue to lease the Premises,
      it shall submit a written request on extending the lease duration to Party
      A before 1 month of the expiry of the lease duration and re-conclude the
      lease agreement upon the consent of Party A. The lease conditions such as
      the rental shall make the corresponding adjustments as the case may be
      then.








 

	Article 3. 	Rental, Payment Pattern and Time Limit 




	3.1 	
      The Parties agree that the rental for the Premises shall
      be RMB 74,659.00 (in words: RMB Seventy Four Thousand, Six Hundred and
      Fifty Nine) per month and the annual rental shall be RMB 895,908.00 (in
      words: RMB Eight Hundred and Ninety Five Thousand, Nine Hundred and
      Eight).

	 	 
		
      The rental for the Premises shall keep the same within 1
      year and since [ ], 2012, the Parties agree to make adjustments on rental
      standard. Specific details shall be settled by the Parties through
      negotiations as the case may be then and the Parties agree that the
      adjustment range shall be within [ ]%. After the expiry of lease duration,
      if Party B wants to extend the lease duration and Party A agrees on that,
      the Parties may make adjustments on rental through negotiations. The
      relevant adjustment matters shall be provided by the Parties in the
      supplementary agreement.

	 	 
	3.2 	
      Party B shall pay the rental to Party A before [ ]
      annually and if Party B fails to pay such rental on time, then an overdue
      fine shall be paid by Party B at an amount of [ ] in 1000 of the daily
      rental per day.

	 	 
	3.3 	
      The payment pattern for Party B paying the rental shall
      be as follows: Party B may pay the rental either with check or in
    cash.




	Article 4. 	Deposit and other Fees




	4.1 	
      The Parties agree that upon the delivery of the Premises
      by Party A, Party B shall pay a deposit on Premises leasing to it and the
      amount of such deposit shall be one month rental, i.e. RMB 100,000. Party
      A shall issue a certificate of receipts to Party B after it receives such
      deposit.

	 	 
	4.2 	
      Upon the termination of the lease, the remainder of the
      deposit on Premises leasing shall be returned to Party B interest-freely
      after deducting the fees borne by Party B according to the provisions of
      this Agreement

	 	 
	4.3 	
      For the lease duration, Party B shall bear the fees of
      water, electricity and telecommunication occurred during the use of the
      Premises as well as the daily maintenance fees of the Premises and the
      equipments. Party A shall bear the maintenance fees of the Premises and
      the equipments, the property management fees and the other relevant fees.
      (Daily maintenance fees of the Premises herein refers to the maintenance
      fees arising from the daily small damage, including the lamps, doors,
      water and electrical system as well as other facilities owned by Party A.
      Maintenance fees for repairing the serious damage which is not caused by Party B’s use,
      including wall crack, land foundation subsidence or leakage of rain and
etc. shall be borne by Party A.)








	4.4 	
      The Parties agree that Party B shall be responsible for
      conducting accident insurance of the Premises and bear the fees occurred
      therefrom. The insurance beneficiary shall be both Party A and Party B.
      The insurance coverage shall include: the Premises, facilities, furniture,
      and electrical equipments of which Party A owns the property right and
      furniture and electrical equipments owned by Party B. In case that the
      Parties suffered a loss from a fortuitous event such as fire, both Parties
      shall claim for compensation jointly. The compensation acquired shall be
      shared by the Parties according to the insured properties provided in the
      insurance contract.





	Article 5. 	Requirements on Using the Premises and
      Maintenance Responsibility 



	5.1 	
      For the lease duration, where Party B finds out any
      damage or breakdown of the Premises and its affiliated facilities, it
      shall notify Party A to repair the Premises or the facilities in a timely
      manner and Party A shall conduct the repair within 15 days upon it
      receives Party B’s notification. Party B may repair the Premises or the
      facilities on Party A’s behalf if Party A fails to do so in time and the
      fees occurred therefrom shall be borne by Party A. Moreover, if the
      operation of Party B is greatly influenced in a long time or even stopped
      completely by the maintenance activities conducted by Party A which fall
      into its maintenance coverage, Party A agrees to decrease or exempt Party
      B’s rental accordingly during the term in which Party B is influenced by
      such maintenance activities. The specific proportion of decrease and
      exemption shall be settled by the Parties through negotiations based on
      the existing time and extent of such influence. Influences caused by
      maintenance of public works, roads and facilities or the public area shall
      not belong to the aforesaid circumstance but the Parties agree to deal
      with it properly through negotiations as the case may be.

	 	 
	5.2 	
      For the lease duration, Party B shall use the Premises
      and its affiliated facilities in a proper way and take care of them. Any
      damage or breakdown of the Premises and its affiliated facilities due to
      inappropriate or unreasonable use of Party B, it shall be liable for the
      maintenance. If Party B refuses to conduct such maintenance, Party A may
      do so on Party B’s behalf and the fees occurred therefrom shall be borne
      by Party B.

	 	 
	5.3 	
      For the lease duration, Party A undertakes that the
      Premises and its affiliated facilities stay in workable normality and
      safety. Party A shall notify Party B 15 days in advance where it conducts
      inspection and maintenance of the Premises and Party B shall cooperate
      when such inspection and maintenance is carried out. Party A shall reduce
  the influence on Party B’s use of the Premises.








	5.4 	
      Otherwise provided in Annex 3 of this Agreement, Party B
      shall acquire Party A’s written consent in advance where Party B wants to
      conduct additional decoration or furnish the Premises with more affiliated
      facilities and equipments. In case any approval is required by the
      relevant departments pursuant to the relevant provisions, such decoration
      or furnishing may be carried out only after Party B, authorized by Party
      A, submitting application for approval and approved by the relevant
      departments. Party B shall be liable for the affiliated facilities and
      equipments and the maintenance responsibility thereof it
  furnishes.

	 	 
	5.5 	
      Party B undertakes to use the Premises in accordance with
      this Agreement and not take the liberty of changing the use nature of the
      Premises.

	 	 
	5.6 	
      Party B undertakes that it will not store any dangerous
      substance in the Premises, otherwise Party B shall take all the liability
      for the damage of the Premises and its affiliated facilities caused by
      such dangerous substance.





	Article 6. 	Conditions of the Premises upon Return
    



	6.1 	
      Unless Party A agrees that Party B may extend the lease
      duration, Party B shall return the Premises upon the date of the of the
      lease duration provided in this Agreement. Without Party A’s consent, if
      Party B returns the Premises exceeding the due time, then it shall pay an
      occupation royalties to Party A at an amount of 1.5 times of the rental
      standard provided in this Agreement per day.

	 	 
	6.2 	
      The Premises shall stay in the conditions after normal
      use when Party B returns it. Party A may inspect and then accept the
      Premises upon the return and settle up with each other on the fees borne
      by the Parties respectively.

	 	 
	6.3 	
      Party B shall be responsible for moving out the
      furniture, electrical equipments and etc. which belong to it. Party B
      shall not remove its furnished decoration (including new fixed partition
      walls, windows, lamps, doors and any other substance that will cause
      damage to the indoors conditions if it is removed) in avoidance of causing
      damage to the indoors decoration conditions. (Or the Parties may settle it
      down through negotiations as the case may be.)






      
        


      	Article 7. 	Sublease, Assignment and Exchange 


      

	7.1 	
      For the lease duration, Party B may sublease part or all
      of the Premises to another party only after it obtains the written consent
      of Party A in advance.

	 	 
	7.2 	
      Where Party B subleases the Premises, a written contract
      between the sub-lessee and it according to the provisions is
  needed.

	 	 
	7.3 	
      For the lease duration, Party B may assign the Premises
      to another party or exchange the Premises leased by any other party only
      after it obtains the written consent of Party A in advance. After such
      assignment or exchange, the assignee of right to lease this Premises or
      the exchanging party shall conclude a contract of modification of the
      contractual party with Party A and continue to carry out this
      Agreement.

	 	 
	7.4 	
      For the lease duration, where Party A wants to sell the
      Premises, it shall notify Party B 2 months in advance and Party A may be
      entitled to enjoy a right of preemption under the same conditions. In
      accordance with the State laws, this Agreement shall be still in
      effectiveness after Party A sells this Premises to a third
  party.




	Article 8. 	Events to Triggering Dissolution of this
      Agreement 



	8.1 	
      The Parties agrees that, for the lease duration, this
      Agreement shall be terminated and no Party shall undertake any
      responsibility to the other Party in case any of the following event
      occurs:

	 	 	 
		(1) 	
      the land use right within the scope of this Premises is
      withdrew ahead of the due time in accordance with the laws;

	 	 	 
		(2) 	
      the Premises is requisitioned for the sake of public
      interest in accordance with the laws;

	 	 	 
		(3) 	
      the Premises is listed on the demolition permit for the
      purpose of city contribution in accordance with the laws;

	 	 	 
		(4) 	
      In case that Party B is a natural person, Party B dies in
      an accident for the lease duration. According to the State laws,
      considering the humanitarianism, Party B’s family or legal successor may
      either request to continue to fulfill this Agreement or terminate this
      Agreement without bearing any liability for breach of this
    Agreement.

	 	 	 
		(5) 	
      this Premises is destroyed, destruction or appraised as
      “dangerous Premises”.

	 	 	 
	8.2 	
      The Parties agree that one Party may send a written
      notification to the other Party to terminate this Agreement in case any of
      the following event occurs. The breaching Party shall pay the liquidated
      damages to the other Party at an amount of 2 times of the monthly rental;
      where such liquidated damages fails to cover the loss suffered by
    the non-breaching Party, the balance
between the loss and the liquidated damages shall be made up by the breaching
Party. 








	 	(1) 	
      Party A fails to deliver the Premises on time and still
      fails to do so within 30 days after Party B demands Party A to deliver the
      Premises.

	 	 	 
	 	(2) 	
      the Premises delivered by Party A is not in accordance
      with the provisions of this Agreement, thus making it impossible to
      realize the lease purpose; or there are defects in the Premises delivered
      by Party A, endangering Party B’s safety.

	 	 	 
	 	(3) 	
      title disputes of the Premises occur for the lease
      duration, resulting in failure to continue to fulfill this Agreement. In
      this case, Party A shall undertake the responsibility of breaching the
      contract and making compensation;

	 	 	 
	 	(4) 	
      Party B change the use purpose of the Premises without
      Party A’s consent, resulting in damage to the Premises;

	 	 	 
	 	(5) 	
      damage to main structure of the Premises caused by Party
      B;

	 	 	 
	 	(6) 	
      Party B take the liberty of subleasing the Premises,
      assigning the leasing right or exchanging the Premises to another
      party;

	 	 	 
	 	(7) 	
      Party B fails to pay the rental on time for over 30
      days.




	Article 9. 	Liability for Breach of Contracts
  



	9.1 	
      Where there is defect in the Premises upon its delivery,
      Party A shall conduct maintenance within 15 days from the delivery date.
      If Party A fails to conduct such maintenance in a timely manner, it agrees
      to reduce the rental and modify the relevant provisions on
  rental.

	 	 
	9.2 	
      Party A shall be liable to compensate for the loss
      suffered by Party B for not being notified by Party A in this Agreement
      that the Premises has been mortgaged or the transfer of property rights
      has been restrained before the Premises leases to Party B.

	 	 
	9.3 	
      For the lease duration, in case that Party A fails to
      fulfill its obligation of maintenance and conservation under this
      Agreement in a timely manner, resulting in damage of property or personal
      injury of Party B, Party A shall bear the liability to
  compensate.

	 	 
	9.4 	
      For the lease duration, in case that Party A takes the
      liberty of terminating this Agreement not in accordance with the
      provisions of this Agreement and take backs the Premises ahead of the
      expiry of this Agreement, it shall pay a compensation to Party B at an
      amount of one month rental.

	 	 
	9.5 	
      In case that Party B decorates the Premises or furnishes
      the Premises with more affiliated facilities without obtaining a written consent of Party A
      or exceeding the scope and requirements agreed in the written consent of
      Party A, Party A may be entitled to request Party B to restore the
  Premises to original status.








	9.6 	
      For the lease duration, in case that Party B takes the
      liberty of withdrawing the lease, not in accordance with the provisions of
      this Agreement, it shall pay a compensation to Party B at an amount of one
      month rental. Party A may deduct such compensation from the deposit on
      Premises leasing and if the amount of the deposit fails to cover the
      compensation, Party B shall pay the balance
separately.





	Article 10. 	Miscellaneous 



	10.1 	
      For the lease duration, if Party A wants to mortgage the
      Premises, it shall send a written notification to Party B and promise to
      Party B that it will ask for Party B’s opinion on purchasing the Premises
      in a written form 30 days in advance before disposal of the Premises in
      the way of converting into money or being sold off through negotiations
      after the Premises is mortgaged. Party A also promises that disposal of
      the Premises will keep in accordance with the relevant State’s
      regulations.

	 	 
	10.2 	
      If the Premises is demolished because of the adjustment
      of governmental plan, the Parties agree to negotiate to deal with the
      aftermath in accordance with the relevant governmental provisions on
      demolition.

	 	 
	10.3 	
      Party A shall be responsible to conclude a Guarantee
      Letter of Security Responsibility with the local police substation within
      [ ] working days after filing this Agreement in accordance with the
      relevant provisions of the State and Kunming City. Party B shall make its
      best endeavor to cooperate to deal with the relevant matters. Party A may
      also issue a power of attorney to authorize Party B to carry out the
      relevant procedures.

	 	 
	10.4 	
      Party B undertakes that it will operate lawfully in
      accordance with the relevant provisions of the State and Kunming City and
      not conduct any activity which violates the State’s laws and regulations
      within the Premises; Party B’s Premises will keep in accordance with the
      Regulations on Fire Protection Safety; if Party B is punished by the
      governmental department for its violation of the State’s laws and
      regulations, it will undertake all the liability and loss
  therefrom.

	 	 
	10.5 	
      Party A may be entitled to terminate this Agreement early
      if Party B is punished by the governmental department for its illegal
      activity conducted in the Premises.








	10.6 	
      Any matters not provided in this Agreement may be entered
      into supplementary provisions upon consensus through negotiations by the
      Parties. The supplementary provisions as well as the annex of this
      Agreement shall be as an inseparable part hereof. This Agreement and its
      supplementary provisions as well as the words and print words filled in
      the blank of the its annex shall be all equally authentic.

	 	 
	10.7 	
      Upon the conclusion of this Agreement, the Parties
      acknowledge their respective the rights, obligations and liabilities and
      are willing to carry out this Agreement strictly in accordance with its
      provisions. If any Party violates this Agreement, the other Party may be
      entitled to claim for the compensation in accordance with this
      Agreement.

	 	 
	10.8 	
      If there is dispute arising from the fulfillment of this
      Agreement, the Parties shall settle such dispute through negotiations and
      conclude supplementary agreement, which shall be equally authentic with
      this Agreement. In case such dispute fails to be settled through
      negotiations, the Parties agree to submit a suit to the people’s court in
      accordance with the laws to settle down such dispute.

	 	 
	10.9 	
      This Agreement is made into 2 originals. Each Party will
      hold 1 original and each of them shall be equally
  authentic.




	The Lessor (Party A): Yunnan Lixiang WarePremises Co., Ltd.
    
	Nationality: 
	Legal Representative: 
	Registration Certificate/ID No.: 43252213641001489X 
	  
	The Lessee (Party B): Kunming Xinyuantang Pharmaceutical
      Co., Ltd. 
	Nationality: 
	Legal Representative: 
	Registration Certificate/ID No.:
      13290219570620459/13888111167