Document:

Exhibit 10.6

 

English Translation

 

REAL ESTATE LEASE AGREEMENT

 

Lessor: Fujian Aidu Garment Manufacturing Co., Ltd. (“AIDU”)

 

Lessee: ZUOAN Dress Co., Ltd., Shishi (“ZUOAN”)

 

This Lease is made by and between AIDU and ZUOAN for leasing of the right to use the land, buildings and other appurtenances attached thereto upon principles of equality, voluntariness and legality in accordance with 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 Law of the People’s Republic of China on Land Administration and other applicable laws and regulations.

 

	
I.
  	
 
  	
AIDU has acquired, in the form of allotment, the property located at Dingkekeng, Yushan, Jinjing Town, Jinjiang of Fujian Province (Fujian Aidu Garment Manufacturing Co., Ltd.), Land-use Right Certificate [JG]Zi No. 2004-00482, covering an area of 5,800 sqm, 1st Certificate of Title JFQZ[JJ]Zi No.04-200066 for a building area of 5,813.70 sqm and 2nd Certificate of Title JFQZ[JJ]Zi No.04-200067 for a building area of 6,943.09 sqm, with the total leased area amounting to 12,756.79 sqm; 3rd and 4th Certificates of Title JFQZ[JJ]Zi                  (application pending), Land-use Right Certificate [JG]Zi No. 2006-01235, for a building area of 7,135.71 sqm. This Lease covers a total area of 19,892.05 sqm for industrial uses during a term of two years commencing on January 01, 2005 and terminating on December 31, 2006.
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
The location and four corners of the land to be leased are indicated in the enclosed map which has already been mutually confirmed.
  
	
 
  	
 
  	
 
  
	
II.
  	
 
  	
AIDU desires to grant ZUOAN the right to use the land, buildings and other appurtenances attached thereto for industrial uses at a rent of RMB 3,600,000/year for a term of two years commencing on January 01, 2005 and terminating on December 31, 2006. The total rent payment shall amount to RMB 7,200,000.
  
	
 
  	
 
  	
 
  
	
III.
  	
 
  	
The rent payment shall be settled on a quarterly basis, i.e. RMB 900,000/quarter. ZUOAN shall pay the rent for the first quarter within the first month after the above-mentioned property is transferred to ZUOAN.
  
	
 
  	
 
  	
 
  
	
IV.
  	
 
  	
ZUOAN shall return the land, buildings and other appurtenances attached thereto upon expiry of the lease term, which may be renewed, provided that a one-month notice is given and that a new lease is signed with AIDU.
  
	
 
  	
 
  	
 
  
	
V.
  	
 
  	
ZUOAN shall ensure reasonable use and necessary maintenance of the land, buildings and other appurtenances attached thereto, which shall be used only for the above-mentioned purpose. AIDU may, at its discretion, terminate the Lease and withhold the use of such leased property if ZUOAN is found to have used it for any purpose other than that specified herein or for any illegal purpose.
  
	
 
  	
 
  	
 
  
	
VI.
  	
 
  	
AIDU shall give ZUOAN prior notice if it intends to transfer the land, buildings and other appurtenances attached thereto during the lease term and, in such case, ZUOAN shall have the right of first refusal under the same terms.
  

 

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VII.
  	
 
  	
Any dispute arising out of or in relation to this Lease shall be settled through mutual consultation. If no settlement can be reached, the dispute shall be submitted to the competent People’s Court.
  
	
 
  	
 
  	
 
  
	
VIII.
  	
 
  	
This Lease is made in two counterparts, AIDU and ZUOAN each holding one copy.
  
	
 
  	
 
  	
 
  
	
IX.
  	
 
  	
This Lease is made this 20th day of December, 2004 in Jinjiang, Fujian Province, China.
  
	
 
  	
 
  	
 
  
	
X.
  	
 
  	
A supplementary agreement may be entered into separately for any matter that is not addressed herein, and such supplementary agreement, once signed by the parties hereto, shall form an integral part of this Lease and be equally binding.
  
	
 
  	
 
  	
 
  
	
XI.
  	
 
  	
This Lease shall come into effect after due execution by the legal representatives (authorized representatives) of the parties hereto.
  

 

 

	
On behalf of AIDU (signature/seal)
  	
 
  	
On behalf of ZUOAN (signature/seal)
  
	
Legal / authorized representative:
  	
/s/ Chaojie Hong
  	
 
  	
Legal / authorized representative:
  	
/s/ James Jinshan Hong
  
	
[SEAL]
  	
 
  	
[SEAL]
  
	
 
  	
 
  	
 
  
	
Date: December 20, 2004
  	
 
  	
 
  
					

 

2Exhibit 10.7

 

English Translation

 

REAL ESTATE TRANSFER AGREEMENT

 

Transferor: Fujian Aidu Garment Manufacturing Co., Ltd. (“AIDU”)

 

Transferee: ZUOAN Dress Co., Ltd., Shishi (“ZUOAN”)

 

This Agreement is made by and between AIDU and ZUOAN for transfer of real estate upon principles of equality, voluntariness and legality in accordance with the Law of the People’s Republic of China on Urban Real Estate Administration.

 

I.                                         The Property

 

1.                                       AIDU has acquired, in the form of allotment, the property located at Dingkekeng, Yushan, Jinjing Town, Jinjiang of Fujian Province (Fujian Aidu Garment Manufacturing Co., Ltd.), Land-use Right Certificate [JG]Zi No. 2004-00482, covering an area of 5,800sqm, 1st Certificate of Title JFQZ[JJ]Zi No.04-200066 for a building area of 5,813.70sqm and 2nd Certificate of Title JFQZ[JJ]Zi No.04-200067 for a building area of 6,943.09sqm, with the total leased area amounting to 12,756.79sqm; 3rd and 4th Certificates of Title JFQZ[JJ]Zi                  (application pending), Land-use Right Certificate [JG]Zi No. 2006-01235, for a building area of 7,135.71sqm. The proposed transfer covers a total area of 19,892.05 sqm for industrial uses; (property to be transferred: production building, warehousing building, two apartment buildings for employees, auxiliary facilities and green space).

 

The location and four corners of the land to be transferred are indicated in the enclosed map which has already been mutually confirmed.

 

Origin of Property Ownership: Private Construction

 

Origin of Land-use Right: Allotment

 

2.                                       AIDU shall obtain an extension of the land-use right until the year 2055 and the relevant Certificate of Title before December 31, 2007.

 

II.                                     Consideration: Forty two million eight hundred and eighty six thousand eight hundred and sixty five yuan and twenty eight cents (RMB 42,886,865.28)

 

III.                                 This Agreement shall come into effect after due execution by the authorized representatives of the parties hereto.

 

IV.                                 Terms of Payment and Delivery of Property

 

1.                                       ZUOAN shall make payment to AIDU after execution of this Agreement as follows:

 

A.                                   RMB 7,000,000, before June 30, 2006, as an advance for purchase of the property; upon payment thereof, the property and appurtenances specified herein shall be transferred to ZUOAN;

 

B.                                     RMB 7,000,000, before December 31, 2006;

 

 

C.                                     RMB 7,000,000, before June 30, 2007;

 

D.                                    RMB 7,000,000, before December 31, 2007;

 

E.                                      RMB 7,000,000, before June 30, 2008; and

 

F.                                      RMB 7,886,865.28, before December 31, 2008;

 

2.                                       After ZUOAN has paid the installment of RMB 7,000,000 for December 2007, as scheduled (with the amount already paid to AIDU totaling RMB 28,000,000), AIDU shall obtain the aforesaid Certificate of Title prior to the next succeeding payment deadline, i.e. June 30, 2008, and shall transfer its title to the property sold to ZUOAN while assisting ZUOAN in obtaining a new Certificate of Title from the local property registration authority; otherwise, ZUOAN may suspend payment of the remaining amount unless and until the transfer of title has been completed and the new Certificate of Title is issued to ZUOAN.

 

V.                                     The parties hereto shall observe the real estate policies, laws and regulations of the People’s Republic of China, and AIDU is responsible for payment of any applicable taxes or fees.

 

VI.                                 This Agreement is made in three counterparts, AIDU and ZUOAN each holding one copy and the third copy to be lodged with the applicable real estate authority.

 

VII.                             The parties hereto shall perform their obligations hereunder. In case of failure of performance for reason, any dispute shall be settled through mutual consultation. If no settlement can be reached, the issue shall be submitted to the People’s Court of Jinjiang. A supplementary agreement may be entered into separately for any matter that is not addressed herein, and such supplementary agreement, once signed by the parties hereto, shall be equally binding. (Note: This Agreement shall supersede the Real Estate Lease dated December 20, 2004.)

 

	
On behalf of
 Fujian Aidu Garment Manufacturing Co., Ltd.
  	
 
  	
On behalf of
 ZUOAN Clothing Co., Ltd.
  
	
 
  	
 
  	
 
  
	
Authorized representative:
  	
Hong Chaojie
  	
 
  	
Authorized representative:
  	
James Jinshan Hong
  
	
 
  	
/s/ Hong Chaojie
  	
 
  	
 
  	
/s/ James Jinshan Hong
  
	
 
  	
 
  	
 
  
	
Date: June 25, 2006
  	
 
  	
 
  

 

2Exhibit 10.8

 

English Translation

 

SUPPLEMENTAL AGREEMENT TO REAL ESTATE
 TRANSFER AGREEMENT DATED JUNE 25, 2006

 

Party A: Fujian Aidu Garment Manufacturing Co., Ltd. (“AIDU”)

 

Party B: ZUOAN Dress Co., Ltd., Shishi (“ZUOAN”)

 

This Supplementary Agreement is entered into by and between AIDU and ZUOAN in place of the Real Estate Transfer Agreement, dated June 1, 2006, which was terminated on June 30, 2008 after mutual consultation as a result of certain provisions thereof rendered unenforceable due to the transfer of AIDU’s Land-use Right Certificate and Certificate of Title to a bank as security.

 

I.                                         As a result of AIDU’s breach, it shall be liable for, as mutually agreed, liquidated damages amounting to 5%, i.e. RMB 1,400,000, of the amount already paid by ZUOAN.

 

II.                                     In view of its production needs, ZUOAN shall continue to use AIDU’s buildings and appurtenances thereto, as defined in the Real Estate Transfer Agreement, dated June 25, 2006, under a 5-year lease commencing on July 1, 2008 and expiring on June 30, 2013. The annual rent shall be RMB 4,300,000.

 

III.                                 The rent payment shall be settled on a quarterly basis, i.e. RMB 1,075,000/quarter. ZUOAN shall pay the rent for the first quarter within the first month.

 

IV.                                 ZUOAN shall return the land, buildings and other appurtenances attached thereto upon expiry of the lease term, which may be renewed, provided that a one-month notice is given and that a new lease is signed with AIDU. ZUOAN shall have the right of first refusal for use of the leased property for another five years at the prevailing market price under a new lease substantially in the form of this Supplementary Agreement.

 

V.                                     ZUOAN shall ensure reasonable use and necessary maintenance of the land, buildings and other appurtenances attached thereto, which shall be used only for the above-mentioned purpose. AIDU may, at its discretion, terminate the Lease and withhold the use of such leased property if ZUOAN is found to have used it for any purpose other than that specified herein or for any illegal purpose.

 

VI.                                 AIDU shall give ZUOAN prior notice if it intends to transfer the land, buildings and other appurtenances attached thereto during the lease term and, in this case, ZUOAN shall have the right of first refusal under the same terms; in addition, in the event of transfer of land during the lease term, AIDU shall cause a lease to be entered into between the transferee and ZUOAN substantially in the form of this Supplementary Agreement.

 

VII.                             In the event of AIDU’s land being seized by a bank or the government for any reason, rendering it impossible for ZUOAN to use it any longer, AIDU shall indemnify ZUOAN from any and all expenses incurred in relocating its production facilities.

 

VIII.                         As mutually agreed, the rent for the period from July 1, 2006 to June 30, 2008 shall remain RMB 3,600,000/year and thus total RMB 7,200,000. AIDU shall return to ZUOAN before August 30, 2008 a sum of RMB 21,125,000, including RMB 19,725,000 

 

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(after deducting the two-year rent RMB 7,200,000 and the quarterly rent RMB 1,075,000 for 2008 Q3) and RMB 1,400,000 (liquidated damages).

 

IX.                                Any dispute arising out of or in relation to this Supplementary Agreement shall be settled through mutual consultation. If no settlement can be reached, the dispute shall be submitted to the competent People’s Court.

 

X.                                    This Supplementary Agreement is made this 1st day of July, 2008 in two counterparts in Jinjiang, Fujian Province, China, AIDU and ZUOAN each holding one copy. A supplementary agreement may be entered into separately for any matter that is not addressed herein, and such supplementary agreement, once signed by the parties hereto, shall form an integral part of this Supplementary Agreement and be equally binding.

 

	
On behalf of AIDU (signature/seal)
  	
 
  	
On behalf of ZUOAN (signature/seal)
  
	
Authorized representative:
  	
/s/ Chaojie Hong
  	
 
  	
Authorized representative:
  	
/s/ James Jinshan Hong
  
	
[SEAL]
  	
 
  	
[SEAL]
  
	
 
  	
 
  	
 
  
	
Date: July 1, 2008
  	
 
  	
 
  
					

 

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