Document:

Exhibit 10.5

 

Real Estate Lease Agreement

 

Lessor (Party A):Zhong Gui

 

House information coding card: 4403030030110100003

 

Correspondence address: Suite 2008, Changhong Building, Sungang Road, Luohu District

 

Postal code: 518008  Contact telephone: 82116121

 

No. of organization code certificate or valid identification: K737013(A), E4025730D

 

Authorized agent: Zhang Miaoxiang

 

Correspondence address: Suite 2008, Changhong Building, Sungang Road, Luohu District

 

Postal code: 518008  Contact telephone: 82116121

 

No. of organization code certificate or valid identification no.: 440527197308191028

 

Lessee (Party B): Shenzhen Pengcheng Hospital Co., Ltd.

 

Correspondence address: B/F, Changhong Building, 3013 Sungang Road East, Luohu District

 

Postal code: 518001  Contact telephone: 25933390

 

No. of organization code certificate or valid identification: 91440300745164966Y

 

Authorized agent:  Fan Shengqi

 

Correspondence address: B/F, Changhong Building, 3013 Sungang Road East, Luohu District

 

Postal code: 518001  Contact telephone: 25933390

 

No. of organization code certificate or valid identification no.: 320721197902153636

 

Party A and Party B hereby enter into this contract by mutual agreement pursuant to the “Contract Law of the People’s Republic of China”, the “Law of the People’s Republic of China on Urban Real Estate Administration”, the “Regulations of Shenzhen Special Economic Zone on Lease of Houses” and its rules for implementation, and the “Decisions of the Standing Committee of Shenzhen Municipal People’s Congress on Strengthening Safety Liabilities of House Leasing”.

 

Article 1 Party A will lease the real property (hereinafter referred to as the “Leased Property”) located in 2/F, Changhong Building, Sungang Road, Luohu District for use by Party B.

 

The Leased Property has an aggregate gross floor area of 2385.72 square meters.

 

1

 

The title owner or legitimate user of the Leased Property is Zhong Gui. The name and number of the real estate title certificate or other valid certificates evidencing its property right (use right): 2000293380.

 

Article 2 The unit rental of the Leased Property shall be calculated based on RMB N/A (In capital letters: N/A) per month per square meter of the area of the real estate. The total monthly rental is RMB150300.36 (In capital letters: One Hundred and Fifty Thousand Three Hundred Yuan and Thirty-six Fen).

 

Article 3 Party B shall pay the first installment of the rental before March 1, 2017 with the amount of RMB150300.36 (In capital letters: One Hundred and Fifty Thousand Three Hundred Yuan and Thirty-six Fen).

 

Article 4 Party B shall pay rental to Party A before:

 

√                 the 1st day of each month;

 

o            the N/A day of the N/A month on a quarterly basis;

 

o            the N/A day of the N/A month on a six-month basis;

 

o            the N/A day of the N/A month on an annual basis;

 

Party A shall issue a taxation invoice to Party B when receiving the rental.

 

(The parties shall jointly choose one of the above four items and put a “√” in the box chosen.)

 

Article 5 The lease term of the Leased Property by Party B shall be effective from March 1, 2017 until February 28, 2025.

 

The term as stipulated in the above paragraph shall not exceed the approved land use term and shall not exceed 20 years, and the exceeded portion shall be invalid.

 

Article 6 Use of the Leased Property: Commercial.

 

Party B shall not use the Leased Property for other purposes without obtaining written consent from Party A.

 

Article 7 Party A shall deliver the Leased Property to Party B for use before March 1, 2017 and complete the relevant delivery formality.

 

In the event that Party A delivers the Leased Property after the time specified in the above paragraph, Party B may request to extend the effective term of this contract. Both parties shall make confirmation by signature and file the record with the contract registration (record filing) authority.

 

2

 

Article 8 When delivering the Leased Property, the parties shall make confirmation in respect of the current condition of the Leased Property and its ancillary facilities and the relevant situation of the ancillary property and give details on the supplementary sheet.

 

Article 9 Party A shall be entitled to receive a rental deposit equivalent to rentals for N/A months (no more than three months) from Party B when delivering the Leased Property, i.e. RMB150300.36 (In capital letters: One Hundred and Fifty Thousand Three Hundred Yuan and Thirty-six Fen).

 

Party A shall issue a receipt to Party B for the rental deposit it receives.

 

Conditions for the refund of the rental deposit from Party A to Party B:

 

1. The lease term expires

 

2. The deposit refund procedure is completed

 

3. N/A

 

o Only one of the conditions is satisfied.

 

√ All conditions are satisfied.

 

(The parties shall jointly choose one of the above two items and put a “√” in the box chosen.)

 

The way and time for refund of lease deposit: Settle all expenses and move out.

 

Party A will not refund the deposit under the following circumstances:

 

1. Party B violates the contract

 

2. N/A

 

3. N/A

 

Article 10 During the lease term, Party A shall be responsible for paying the land use fee in respect of the Leased Property and the tax arising from the leasing of the property, and N/A fee; Party B shall be responsible for paying the water and electricity charges, cleaning fee, house (building) property management fee, and related fees incurred as a result of using the Leased Property.

 

3

 

Article 11 Party A shall ensure the safety of the Leased Property and its ancillary facilities in compliance with the relevant laws, regulations or rules.

 

Article 12 Party B shall make reasonable use of the Leased Property and its ancillary facilities and shall not use the Leased Property to conduct illegal activities. Party A shall not intervene in or hinder the normal, reasonable use of the Leased Property by Party B.

 

Article 13 During the course of using the Leased Property by Party B, if any damage or breakdown not due to mistakes of Party B happens or occurs in the Leased Property or its ancillary facilities which affects the safe and normal use, Party B shall notify Party A in a timely manner and take possible effective measures to prevent the defect from further worsening. Party A shall proceed with the maintenance within ___ days after receiving the notice from Party B or simply entrust Party B to proceed with the maintenance on Party A’s behalf. In the event that Party B is unable to notify Party A or Party A does not perform its maintenance obligations within the time as stipulated above, Party B can proceed with maintenance on Party A’s behalf.

 

In the event that prompt maintenance is required under special urgent circumstances, Party B shall first proceed with the maintenance on Party A’s behalf and notify Party A about the relevant situation in a timely manner.

 

The maintenance expenses incurred under the circumstances as mentioned in the above two paragraphs (including the reasonable expenses incurred by Party B in proceeding with maintenance on Party A’s behalf and preventing the defect from worsening) shall be borne by Party A. In the event that greater losses are incurred due to Party B’s failure in performing obligations as provided in the above two paragraphs or in making timely notification or taking possible effective measures, the maintenance expenses for such (worsened) portion shall be borne by Party B itself.

 

Article 14 In the event that any safety problem, damage or breakdown happens or occurs in the Leased Property or its ancillary facilities due to misuse or unreasonable use by Party B, Party B shall notify Party A in a timely manner and shall be responsible for maintenance or indemnification.

 

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If Party B changes the internal structure and renovation of the property or sets plans that has an impact on the equipment, scale of design, scope, process and materials thereof, written consent of Party A shall be sought in advance before commencement of construction. Upon expiration of the lease or where the lease withdrawal is due to the responsibility of Party B, unless the parties otherwise agree, Party A is entitled to choose one of the following rights:

 

o            The decoration attached to the property belongs to Party A.

 

o            Party B is requested to reinstate the property.

 

o            Party B is charged the actual expenses incurred for reinstatement works.

 

(The parties shall jointly choose one of the above three items and put a “√” in the box chosen.)

 

Article 15

 

o            During the lease term, Party B shall be entitled to lease all or part of the Leased Property to other parties and complete the registration (record filing) procedure with the competent authorities for the leasing of properties. However, the sublease term shall not exceed the lease term as stipulated in this contract;

 

√                 During the lease term and with the written consent of Party A, Party B may complete the registration (record filing) procedure with the competent authorities for the leasing of properties by producing the written proof evidencing such consent to sublease but the sublease term shall not exceed the lease term as stipulated in this contract;

 

o            During the lease term, Party B shall not lease all or part of the Leased Property to other parties.

 

(The parties shall jointly choose one of the above three items and put a “√” in the box chosen.)

 

Article 16 During the term of this contract, if Party A intends to transfer part or all of the property right of the Leased Property, it shall notify Party B in writing one month prior to the transfer. Party B shall give Party A reply within 3 working days upon receipt of written notice from Party A, and Party B shall have the right of first refusal under equivalent conditions.

 

In the event that the Leased Property is transferred to other parties, Party A shall have the responsibility of notifying the transferee to continue to perform this contract when executing the transfer contract.

 

5

 

Article 17 During the term of this contract, this contract can be terminated or changed under one of the following circumstances:

 

(1)         This contract cannot be performed due to the occurrence of force majeure;

 

(2)         The requisition, resumption or dismantlement of the Leased Property by the government;

 

(3)         Party A and Party B reach agreement by negotiation.

 

Article 18 Under one of the following circumstances, Party A shall be entitled to:

 

o            1. request Party B to reinstate the property;

 

o            2. claim damages from Party B;

 

o            3. not refund the rental deposit;

 

o            4. request payment of a default fine by Party B in the amount of RMB150300.36 (In capital letters: One Hundred and Fifty Thousand Three Hundred Yuan and Thirty-six Fen).

 

(The above four items shall be chosen by the parties through negotiation, provided that Item 3 and Item 4 shall not be chosen at the same time, and a “√” shall be put in the box as appropriate.)

 

(1)         Party B defaults payment of the rental for more than 5 days (N/A month);

 

(2)         Expenses for losses which might be incurred by Party A due to default by Party B exceed RMB5,000;

 

(3)         Party B uses the Leased Property to conduct illegal activities, damaging public interest or the interest of other parties;

 

(4)         Party B changes the structure or use of the Leased Property without authorization;

 

(5)         Party B violates Article 14 of this contract by not undertaking maintenance responsibility or paying the maintenance fee, resulting in severe damages of the Leased Property or facilities;

 

(6)         Without the consent of Party A and the approval of the relevant authorities, Party B proceeds with renovation of the Leased Property without authorization;

 

(7)         Party B subleases the Leased Property to a third party without authorization.

 

In addition to affixing Party B’s damage or default responsibilities, Party A shall be entitled to terminate the contract or propose to Party B to change the provisions of the contract in accordance with the above circumstances. Once the notice of termination of contract is served, Party A is entitled to apply for unilateral termination of contract registration (record filing).

 

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Article 19 Under one of the following circumstances, Party B shall be entitled to:

 

o            1. claim damages from Party A;

 

o            2. request Party A to refund the rental deposit in a double amount;

 

o            3. request payment of a default fine by Party A in the amount of RMB N/A (In capital letters N/A Yuan) for losses caused as a result.

 

(The above three items shall be chosen by the parties through negotiation, provided that Item 2 and Item 3 shall not be chosen at the same time, and a “√” shall be put in the box as appropriate.)

 

(1)         Party A delays the delivery of the Leased Property by more than N/A days (N/A month(s));

 

(2)         Party A violates Article 11 of this contract such that the safety of the Lease Property is not incompliance with the provisions of law, regulation or rules;

 

(3)         Party A violates Article 13 of this contract by not undertaking maintenance responsibility or paying the maintenance fee;

 

(4)         Without the consent of Party B or the approval of the relevant authorities, Party A reconstructs, expands or renovates the Leased Property.

 

(5)         Party A unilaterally requests early rescission (termination) of contract without proper reasons

 

Apart from affixing Party A’s damage or default responsibilities, Party B shall be entitled to make suggestions to Party A to change the terms of the contract or terminate the contract in accordance with the above circumstances. Once the notice of termination of contract is served, Party B is entitled to apply for unilateral termination of contract registration (record filing).

 

Article 20 Upon termination of this contract, Party B shall move out of and return the Leased Property within the same day and ensure the integrity of the Leased Property and ancillary facilities (other than normal wear and tear). Meanwhile, it shall settle all expenses which shall be borne by Party B and complete the relevant delivery procedure.

 

If Party B fails to move out of or return the Leased Property within the time limit, Party A is entitled to take back the Leased Property in accordance with law or the stipulations in the contract, and charge double rental from Party B for the portion where the time limit is exceeded as indemnification.

 

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Article 21 If Party B intends to continue to lease the Leased Property upon expiry of the lease term specified in this contract, it shall make requests to Party A for renewal 3 months before the expiry of the lease term. Under equivalent conditions, Party B shall have the priority to lease the Leased Property.

 

If Party A and Party B manage to reach an agreement on renewal, they shall enter into a new contract and proceed with a new registration (record filing) with the competent authorities for the leasing of properties.

 

Article 22 Both Party A and Party B shall sign the “Responsibility Letter for Shenzhen Housing Lease Safety Management”. The Leased Property provided by Party A shall conform to the standards and conditions for safe use and there shall be no potential safety hazards. The construction, fire-fighting equipment, gas facilities, electric power facilities, entrances and exits, etc. of the Leased Property shall comply with the regulations or standards for safe production, fire-fighting, public security, environmental protection and sanitation prescribed by the municipal government. Party B shall use the Leased Property strictly in accordance with the regulations and standards for safety, fire-fighting, public security, environmental protection and sanitation prescribed by government functional departments, and shall be obliged to ensure that there are no potential safety hazards in the use of the Leased Property. Both Party A and Party B shall perform the contract consciously. In the event that one party breaches the contract, it shall take the corresponding responsibility for breaching the contract in accordance with the stipulations in the contract.

 

Article 23 Party A and Party B can agree on other terms in the supplementary sheet for matters not dealt with in this contract. The content of the supplementary sheet is an integral part of this contract and has the same effect with this contract after being signed and sealed by the parties.

 

If Party A and Party B reach an agreement on changing the content of this contract during the lease term, they shall register (file records) with the original competent authorities for the leasing of properties within ten days upon reaching an agreement on the change.

 

Article 24 If there is any dispute between Party A and Party B in respect of this contract, they shall settle the dispute through negotiation. If the dispute is not settled through negotiation, they shall refer the dispute to the competent authorities for the leasing of properties for mediation, or they shall:

 

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o            apply to Shenzhen Arbitration Committee for arbitration;

 

o            apply to Shenzhen Court of International Arbitration for arbitration;

 

o            initiate legal actions at the people’s court where the Leased Property is located.

 

(One of the above items for the settlement of disputes shall be chosen by the parties through negotiation and a “√” shall be put in the box as appropriate.)

 

Article 25 Party A and Party B agree that the following correspondence addresses shall be the addresses for serving the notices or documents of both parties:

 

Party A’s address for service: Suite 2008, Changhong Building, Sungang Road, Luohu District

 

Party B’s address for service: 3/F, Changhong Building, Sungang Road, Luohu District

 

If the above addresses are not agreed upon, the correspondence addresses in the contract signed by both parties shall be used as the addresses for service.

 

The addresses for service shall remain valid without written notice of change. Notices or documents sent by one party to the other party by post at the address for service are deemed to have been served. If a document sent by post to the abovementioned address is returned by the postal department, the date of return shall be deemed to be the date of service.

 

Article 26 This contract shall take effect upon execution.

 

Party A and Party B shall proceed with registration or record filing with the competent authorities for the leasing of properties within 10 days from the execution date of this contract.

 

Article 27 The original of this contract is in Chinese.

 

Article 28 This contract is made in triplicate with Party A holding one copy, Party B holding one copy, the contract registration authority holding one copy, and the relevant authority holding N/A copy.

 

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Signed and   sealed by Party A:

 

Legal   representative:

Contact   telephone: 82116121

Bank account   number:
    	
 
    	
 
    
	
Signed and   sealed by the authorized agent:
    	
/s/ Zhang Miaoxiang
    	
 
    
	
Date: February 28,   2017
    	
 
    	
 
    

 

	
Signed and   sealed by Party B (stamp):

[affix the official   seal of Shenzhen Pengcheng Hospital Co., Ltd.]

 

Legal   representative:

Contact   telephone:

Bank account   number:
    	
 
    	
 
    
	
Signed and   sealed by the authorized agent:
    	
/s/ Fan Shengqi
    	
 
    
	
Date: February 28,   2017
    	
 
    	
 
    

 

10

 

(Supplementary Sheet)

 

Attachment:

 

The rents for 2/F of Changhong Building are collected as per the table below

 

	
 
    	
 
    	
Amount of Monthly Rent (Currency: Renminbi)
    
	
Lease Term
    	
 
    	
In Alphabetical
   Number
    	
 
    	
In Capital Letters
    
	
March 1, 2017 to February 28, 2019
    	
 
    	
150300.36
    	
 
    	
One Hundred and Fifty Thousand Three Hundred Yuan   and Thirty-six Fen
    
	
March 1, 2019 to February 29, 2020
    	
 
    	
156312.37
    	
 
    	
One Hundred and Fifty-six Thousand Three Hundred and   Twelve Yuan and Thirty-seven Fen
    
	
March 1, 2020 to February 28, 2021
    	
 
    	
162564.86
    	
 
    	
One Hundred and Sixty-two Thousand Five Hundred and   Sixty-four Yuan and Eighty-six Fen
    
	
March 1, 2021 to February 28, 2022
    	
 
    	
169067.45
    	
 
    	
One Hundred and Sixty-nine Thousand and Sixty-seven   Yuan and Forty-five Fen
    
	
March 1, 2022 to February 28, 2023
    	
 
    	
177520.82
    	
 
    	
One Hundred and Seventy-seven Thousand Five Hundred   and Twenty Yuan and Eighty-two Fen
    
	
March 1, 2023 to February 29, 2024
    	
 
    	
186396.86
    	
 
    	
One Hundred and Eighty-six Thousand Three Hundred   and Ninety-six Yuan and Eighty-six Fen
    
	
March 1, 2024 to February 28, 2025
    	
 
    	
195716.70
    	
 
    	
One Hundred and Ninety-five Thousand Seven Hundred   and Sixteen Yuan and Seventy Fen
    

 

	
Party A:
    	
/s/ Zhang Miaoxiang
    	
 
    	
Party B:
    	
/s/ Fan Shengqi
    
	
 
    	
 
    	
 
    	
 
    	
[affixed the official seal of Shenzhen Pengcheng   Hospital Co., Ltd.]
    

 

11Exhibit 10.6

 

Real Estate Lease Agreement

 

Shenzhen, China

March 2015

 

1

 

Lease Agreement

 

Lessor (Party A): Feng Lijie

Address: 24C, Block 2, Mont Orchid Riverlet Stage 2, Yanshan Road, Nanshan District, Shenzhen

Postal code:   518000 (notice delivery address)

Contact telephone:  0755-26442688

 

Lessee (Party B): Shenzhen Pengai Aesthetic Medical Hospital Co., Ltd. (the “Pengai Aesthetic Medical Hospital”)

Address: 1122 Nanshan Boulevard, Nanshan District, Shenzhen

Postal code:    518008 (notice delivery address)

Legal representative:    Zhou Pengwu

Contact telephone:  0755-25598065

 

Whereas the lease agreement entered into by both parties dated May 10, 2005 will expire on May 10, 2015, both parties, after full and friendly negotiation, enter into this agreement in relation to the renewal of the aforesaid agreement.

 

Article 1 Leased Premises

 

Party A rents the real estate at the address of 1122 Nanshan Boulevard, Nanshan District, Shenzhen (which is recorded in the real estate title certificate as Floor 1(48), 2,3,4, Block 7, South Oil Fourth Industry Park (hereinafter referred to as the “Leased Property”)) for use by Party B.

 

The title owner of the Leased Property is Feng Lijie. The name and number of the real estate title certificate or other valid certificates evidencing the property right: Shen Fang Di Zi No.4000134098, 4000134099, 4000134100, 4000134101.

 

The building of the Leased Property has 8 floors in total. Both parties confirm that the leased area of each floor are as follow:

 

2

 

	
No.
    	
 
    	
Floors
    	
 
    	
Leased area confirmed by
   both parties (sq.m.)
    	
 
    
	
1
    	
 
    	
1
    	
 
    	
837.79
    	
 
    
	
2
    	
 
    	
2
    	
 
    	
1,601.67
    	
 
    
	
3
    	
 
    	
3
    	
 
    	
1,601.67
    	
 
    
	
4
    	
 
    	
4
    	
 
    	
1,608.87
    	
 
    
	
Total
    	
 
    	
 
    	
 
    	
5,650
    	
 
    

 

Both parties confirm that the above gross floor area is not consistent with the gross floor area recorded in the real estate title certificates. Both parties acknowledge that the rental and management fee shall be calculated based on the gross floor area as confirmed by both parties.

 

Article 2 Lease Term

 

The lease term shall be 2 years, effective from May 10, 2015 to May 9, 2017.

 

The term of use recorded in the real estate title certificate will be expire in 2018. During the lease term of the agreement, Party B shall unconditionally assist Party A to complete the relevant procedures to extend the term of use off the Leased Property. The lease term in this agreement will be extended for an additional 4 years (i.e. until May 9, 2021), provided that, before May 9, 2017, the Leased Property is approved to extend its term of use for an additional 4 years.

 

Article 3 Rental and Payment

 

During the lease term, both parties confirm that the rental shall be as follow:

 

1.              Rental for the first year (May 10, 2015 to May 9, 2016)

 

	
Floors
    	
 
    	
Area
    	
 
    	
Monthly Unit
   Rental (RMB/sqm)
    	
 
    	
Sub-total rental (RMB)
    	
 
    
	
1
    	
 
    	
837.79
    	
 
    	
100
    	
 
    	
83,779
    	
 
    
	
2
    	
 
    	
1,601.67
    	
 
    	
80
    	
 
    	
128,133.60
    	
 
    
	
3
    	
 
    	
1,601.67
    	
 
    	
80
    	
 
    	
128,133.60
    	
 
    
	
4
    	
 
    	
1,608.87
    	
 
    	
80
    	
 
    	
128,709.60
    	
 
    
	
Total monthly   rental (RMB)
    	
 
    	
 
    	
 
    	
468,755.80
    	
 
    

 

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2.              Rental for the second year (May 10, 2016 to May 9, 2017), increased by 5% based on the rental of previous year

 

	
Floors
    	
 
    	
Area
    	
 
    	
Monthly Unit
   Rental (RMB/sqm)
    	
 
    	
Sub-total rental (RMB)
    	
 
    
	
1
    	
 
    	
837.79
    	
 
    	
105
    	
 
    	
87,967.95
    	
 
    
	
2
    	
 
    	
1,601.67
    	
 
    	
84
    	
 
    	
134,540.28
    	
 
    
	
3
    	
 
    	
1,601.67
    	
 
    	
84
    	
 
    	
134,540.28
    	
 
    
	
4
    	
 
    	
1,608.87
    	
 
    	
84
    	
 
    	
135,145.08
    	
 
    
	
Total monthly   rental (RMB)
    	
 
    	
 
    	
 
    	
492,193.59
    	
 
    

 

3.              If the term of use of the Leased Property is successfully extended for an additional 4 years or more, the rental of the extended lease term (May 10, 2017 to May 9, 2021) will increase by 5% every year based on the rental of previous year.

 

4.              Party B shall pay the rental every two months, for example, Party B shall pay the rental for May and June 2015 before May 8, 2015, and pay the rental for July and August 2015 before July 8, 2015, and subsequent rentals shall be paid accordingly.

 

5.              Party A shall issue tax invoices of the rental to Party B. Party B shall bear the taxes and fees incurred thereof in an amount equals to 6% of the rental. Party B shall pay rentals and taxes and fees to Party A within three working days from the date on which Party A issue a tax invoice. (company checks will not be accepted)

 

Article 4 Rental Deposit

 

1.              Party B shall pay a rental deposit equivalent to rentals for 2 months to Party A within three working days from the execution date of this agreement, i.e. RMB937,551.6 (Nine Hundred and Thirty-seven Thousand Five Hundred and Fifty-one Yuan and Six Jiao in capital letters). In the last leasing agreement, Party B had paid a rental deposit of RMB271,200 (Two Hundred and Seventy-One Thousand and Two Hundred in capital letters), and Party B shall only be required to make up the difference of RMB666,351.60 (Six Hundred and Sixty-six Thousand Three Hundred and Fifty-one Yuan and Six Jiao in capital letters).

 

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2.              After Party A receives the rental deposit, Party B shall return to Party A previous receipt for the rental deposit, and Party A shall issue a new receipt to Party B for the rental deposit it receives.

 

3.              Upon expiration of the lease term, Party A shall refund the rental deposit without accrued interest to Party B within three working days, in the event that the following conditions are satisfied:

 

(1)         There has not been any breach of contract by Party B during the lease term;

 

(2)         Party B has settled all rental, property management fee and other fees which Party B shall bear;

 

(3)         Party B has returned the Leased Property to Party A in good condition as agreed.

 

Article 5 Other Fees

 

1.              During the lease term, Party A shall bear and be responsible for paying the land use tax in connection with the Leased Property.

 

2.              During the lease term, Party B shall bear and be responsible for paying any taxes other than the land use tax, including other related fees incurred as a result of using the Leased Property such as body maintenance funds, lease house (building) management fee, lease tax of the Leased Property (6% of the total amount), the water and electricity charges, cleaning fee, property management fee and elevator maintenance fee.

 

3.              During the lease term, Party B shall be responsible for paying the elevator use fee of RMB10,000 per year (paid once every two years), which shall be paid together with the first installment of the rental for every year.

 

Article 6 Property Safety

 

1.              Party B has previously used the Leased Property for ten years, and Party B is well aware of the current status of the Leased Property and agrees to lease and use it in current status.

 

2.              The legal use of the Leased Property is plant and Party B lease the Leased Property for commercial medical purpose. Party B shall make sure that the Leased Property complies with the relevant requirements of laws and regulation in relation to the commercial medical purpose.

 

3.              When Party B intends to change the function of the Leased Property, Party B shall entrust a property identification and inspection authority to prepare relevant report and submit the report to relevant authorities and Party A.

 

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Article 7 Reasonable Use of the Leased Property

 

Party B shall use the Leased Property and its ancillary facilities in a reasonable way, and shall not use the Leased Property to conduct illegal activities. Party A shall not intervene in or hinder the normal, reasonable use of the Leased Property by Party B.

 

Article 8 Building Maintenance Clause

 

1.                      During the lease term, if any damage or breakdown happens or occurs in the main structure of the Leased Property, Party B shall notify Party A in a timely manner and take possibly effective measures to prevent the defects from turning worse. Party A shall proceed with maintenance within 3 days after receiving the notice from Party B or entrust Party B to proceed with maintenance on Party A’s behalf.

 

2.                      During the lease term, Party B shall be responsible for the maintenance other than the main structure of the Leased Property and the maintenance and repair of ancillary facilities.

 

3.                      Party B shall engage specialists to inspect the elevator and fire-fighting devices in accordance with relevant requirements every year, to ensure that the operation status of the above devices complies with the national standards. Party B shall compensate the Party A’s losses incurred due to Party B’s failure to perform its obligations.

 

4.                      In the event that any safety problem, damage or breakdown happens or occurs in the Leased Property or its ancillary facilities due to misuse or unreasonable use on the part of Party B, Party B shall notify Party A in a timely manner and shall be responsible for maintenance or damages. If Party B refuses to repair or compensate for damages, Party A will proceed with maintenance on its behalf and the relevant maintenance fee shall be borne by Party B.

 

Article 9 Reconstruction, Extension and Renovation

 

During the effective term of this agreement, if Party B intends to reconstruct, expand or renovate the Leased Property, it shall deliver a written application to Party A in advance. Upon receiving written consent from Party A, Party B may reconstruct, expand or renovate the Leased Property, but Party B shall not change the main structure of the building and shall comply with relevant safety regulations.

 

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Article 10 Limit on Sublease

 

During the lease term, Party B shall not sublease all or part of the Leased Property to a third party. Party B may only proceed with sublease due to internal work requirement with written consent from Party A.

 

Article 11 Right of First Refusal

 

During the effective term of this agreement, if Party A intends to transfer part or all of the property right of the Leased Property, it shall notify Party B in writing one month in advance, and Party B shall have a right of first refusal with same conditions.

 

Article 12 Termination and Change of the Agreement

 

During the effective term of this agreement, this agreement can be terminated or changed under one of the following circumstances:

 

(1)         This agreement cannot be performed due to the occurrence of force majeure;

 

(2)         The government requisition, acquisition, resumption or dismantlement of the Leased Property;

 

(3)         Party A and Party B reach an agreement by negotiation.

 

Article 13 Delivery of Leased Property

 

Upon termination of this agreement, Party B shall move out of and return the Leased Property within 10 days and ensure good condition of the Leased Property and ancillary facilities (other than normal wear and tear). Meanwhile, Party shall settle all expenses which shall be borne by it and complete the relevant delivery procedure.

 

If Party B fails to move out of the Leased Property within the time limit, Party B shall pay the occupation fee to Party A in an amount equals to twice of the rental pursuant to this agreement. If the overdue period exceeds 30 days, Party B shall be deemed to renounce the ownership of the relevant items in the Leased Property, and Party A is entitled to take any measures as Party A thinks fit to enter the Leased Property and dispose the items in the Leased Property.

 

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Article 14 Renewal Clause

 

If Party B intends to continue to lease the Leased Property upon expiry of the lease term specified in this agreement, it shall make renewal requests to Party A three months prior to the expiry of the lease term. Under same conditions, Party B shall have the pre-emptive right to lease the Leased Property.

 

Party A and Party B shall re-enter into an agreement after reaching agreement for the renewal.

 

Article 15 General Default Clause

 

Under one of the following circumstances, Party B shall be entitled to request Party A to compensate the losses incurred in connection therewith:

 

(1)         Party A is in breach of this agreement, not undertaking maintenance responsibility or not paying the maintenance fee;

 

(2)         Without Party B’s consent or the approval of the relevant authorities, Party A reconstructs, expands or renovates the Leased Property.

 

Under one of the following circumstances, Party A shall be entitled to request Party B to compensate the losses incurred in connection therewith:

 

(1)         Party B defaults in payment of the rental for less than 15 days, daily penalty equals to 5‰ of the defaulted amount;

 

(2)         Party B uses the Leased Property for illegal purposes, damaging public interest or the interest of other parties;

 

(3)         Party B is in breach of this agreement, not undertaking maintenance responsibility or not paying the maintenance fee which result in severe damage of the Leased Property or facilities;

 

Article 16 Fundamental Default Responsibility Clause

 

Party A and Party B shall perform all articles under this agreement consciously. If any party’s action constitutes the following fundamental breach, he shall assume the corresponding liabilities for breach of contract as follows:

 

Breach of contract by Party A may include but is not limited to:

 

(1)         unilaterally terminates the agreement without legal and proper reasons and without the written consent of Party B, in which circumstance Party A shall pay liquidated damages of RMB2.0 million to Party B in the event that Party A.

 

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(2)         Party A enters into any other agreements with respect to the Leased Property agreement with a third party during the effective term of this agreement and as a result that the third party initiates legal actions (or arbitration or compliant) against Party A or Party B, or Party A and Party B, as defendant(s), alleging this agreement and other possible agreements are void, and Party A and Party B are the losing party, in which circumstance Party A shall pay liquidated damages of RMB2.0 million to Party B.

 

Breach of contract by Party B may include but is not limited to:

 

(1)         unilaterally transfers part or all of the Leased Property to a third party without the written consent of Party A, in which circumstance Party B shall pay liquidated damages of RMB2.0 million to Party A in the event that Party B.

 

(2)         unilaterally terminates the agreement without legal and proper reasons and without the written consent of Party A, in which circumstance Party B shall pay liquidated damage of RMB200 million to Party A.

 

(3)         Party B is late in payment of the rental for more than 15 days, in which circumstance Party A will have the right to terminate this agreement and forfeit the deposit paid by Party B.

 

If any party is in breach of the above agreements, the non-breaching party may unilaterally terminate this agreement immediately, and the breaching party shall pay liquidated damages to the non-breaching party as agreed in the above articles. If the liquidated damages is not sufficient for making up the losses incurred by the non-breaching party, the breaching party shall still be entitle to compensation for relevant losses.

 

Article 17 Specific Clause

 

1.              During the lease term, if the Leased Property is relocated, Party A shall have the right to the compensation for relocation of the Leased Property while Party B shall have the right to compensation for operating loss.

 

2.              The contents of this agreement shall prevail over the documents signed by both parties for completing the filing procedures of lease of real estate.

 

3.              During the lease term, Party B undertakes and warrants that Party B will unconditionally comply with the requirements of the relevant government department, including site inspection, plotting, or partial site rectification and suspension, in connection with completing the procedures for extension of the term of use of the Leased Property by Party A.

 

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Article 18 Supplementary Agreement

 

Party A and Party B can agree on other terms in a supplementary agreement for matters not specified in this agreement. The content of the supplementary agreement will become an integral part of this agreement and has the same effect as this agreement after being signed and sealed by the parties. Article 19 of this agreement shall also apply to the supplemental agreement.

 

Article 19 Arbitration Clause

 

Any dispute between Party A and Party B arising from or in respect of this agreement, or resulting from relevant agreements to be executed in the future, shall be submitted to Shenzhen Arbitration Committee for arbitration in accordance with the arbitral rules of the committee. The arbitration decision is final and binding to both parties.

 

Article 20 Party B understands that the legal use of the Leased Property is plant and Party A understands that Party B leases the Leased Property for commercial medical purpose.

 

Article 21 Agreement Effective Date

 

This agreement shall take effect upon signing y both parties.

 

Article 22 Agreement Counterparts

 

This agreement is made in quadruplicate, and Party A and Party B shall have two copies respectively, each with the same legal effect.

 

 

	
Signed and sealed by   Party A:
    	
Signed and sealed by   Party B:
    
	
/s/ Feng Lijie
    	
 
    	
[Seal of Shenzhen   Pengai Aesthetic Medical Hospital Co., Ltd.]
    
	
 
    	
/s/ Zhou Pengwu
    
			

 

 

Signing Date: March 28, 2015

 

Signing Location: Shenzhen, China

 

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