LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Agreement") is made on this 10th day of May, 1998.
Lessor: Beijing Industrial School of Posts and Telecommunications
Legal address: #2 Xxxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx 000000 PRC
Legal representative: Xx. Xxxx Xxxx
Title: President
Nationality: Chinese
(hereinafter referred to as "Party A")
Lessee: Beijing United Family Health Center
Legal address: #2 Xxxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx 000000 PRC
Legal representative: Xx. Xxxxxxx Xxxxxx
Title: Chairman of the Board
Nationality: USA
(hereinafter referred to as "Party B")
Party A and Party B hereinafter may be individually referred to as a "Party"
and collectively referred to as the "Parties".
Whereas:
1. Party A is the owner of a building located on the campus of the Beijing
Industrial School of Posts and Telecommunication at #0 Xxxxxxxx Xxxx,
Xxxxxxxx Xxxxxxxx, Xxxxxxx, consisting of an entire gatehouse, the
specific area to be rented for Party B's use is fully described in
Schedule A attached hereto (the "Premises").
2. Party B desires to rent the Premises and Party A has agreed to rent the
Premises to Party B under the terms and conditions herein.
NOW THEREFORE, the Parties hereby agree as follows:
Article 1 - Lease of Premises
Party A agrees to lease the Premises to Party B and Party B agrees to lease
the Premises and accepts the terms and conditions in this Agreement. During
the Term, Party B will possess the exclusive use of 780 square meters of
Premises (the entire Premises, except Party A's using area) the use designated
by Party B, including representative office, and other lawful activities.
Article 2 - Rental Term
2.1 The rental period shall be for an initial term of five years, commence on
July 1, 1998 and end on June 30, 2003 ("Initial Term").
2.2 Party A and Party B agree that after the expiration of the Initial Term,
Party B will have the right to extend the rental period of Premises ("the
Extended Term"). The Extended Term shall end on December 24, 2010. The Parties
will enter into an agreement for this Extended Term one year prior to the
expiration of the Initial Term. The basic terms and conditions applicable to
the Extended Term will be the same as the terms and conditions applicable to
the Initial Term, Party A and Party B shall discuss the adjustment of the
annual rent ; however, if increasing, it shall not be adjusted in an amount
greater than 50% of the annual rent. If Party A fails to enter into an
agreement for an Extended Term, Party A shall return 66% of the total
renovation expenses paid by Party B for the renovation of Premises to Party B
before the expiration of this Agreement. Party B shall deduct such expenses
from its rental payment stipulated in "Lease Agreement" made by two Parties on
November 8, 1995 and its Amendments made by both Parties. If Party B fails to
extend the rental period of Premises, Party B shall pay the 50% of an annual
rent separately before the expiration of this Agreement.
2.3 After expiration of the Extended Term, Party B will have the right of
first refusal prior to Party A renting the Premises to another party. For
purposes of this provision, Party B's right of first refusal means that if
Party B offers the same amount of total payment as another genuine offer from
another party, Party A will accept the rental offer from Party B.
Article 3 - Deposit and Rent
3.1 Within ten working days after the effective date of this Agreement, Party
B will pay Party A Two Hundred Thousand Renminbi Yuan (RMB200,000.00) deposit.
The Two Hundred Thousand Renminbi Yuan (RMB200,000.00 ) deposit shall be
applied against the first six month's rent for the Premises.
3.2 During the Term, the annual rent for the Premises shall be Eight Hundred
and Fifty Thousand Renminbi Yuan (RMB850,000.00). Rental payments will be made
once every six (6) months in two equal installments. Party B will make payments
equivalent to 50% of the rental payment to an account designated by Party A
before January 10 and July 10 per year respectively.
3.3 The rent specified in this article covers all security services, parking,
heating, waste discharge, trash disposal, exterior cleaning of the Premises
and line/pipe equipment maintenance, and any fees that may occur linked to
increases in the supply of water, electricity and waste discharge.
Notwithstanding the foregoing, Party B agrees that it will be responsible for
arranging for the disposal of medical waste, including any medical water waste
which is required to be disposed of separately under Chinese regulations. When
the availability of electricity and water to the Premises is limited through
the use of quotas assigned by the relevant local government departments. Party
A agrees to use its best efforts to see that such quotas are increased if
necessary to ensure that there is adequate electricity and water for use by
Party B.
3.4 The rent specified in this article also includes the amount of annual
usage of electricity by Party B. The annual quota of electricity to Party B is
ten thousand KWH. The annual quota of water to Party B is the same as the
"Amendment Number Three To The Lease Agreement" made by two Parties on
November 26, 1996. Party B shall install independent water and electricity
meters to measure the amount of annual usage of water and electricity by the
Premises. If the annual usage of water and electricity by Party B exceeds the
agreed quotas, Party B shall pay for amounts in real excess of these quotas.
However, the rate at which Party B pays for water and electricity shall be
the same rate which Party A pays for water and electricity. If the price for
water and electricity rises due to a government adjustment, the two Parties
will consult separately the adjustment of the quotas of water and electricity.
Article 4 - Warranties and Responsibilities of Party A
4.1 Party A hereby represents and warrants to Party B
4.1.1 Party A has the right to lawfully lease the Premises to Party B, and
has all necessary legal authority to enter into this Agreement with Party B
and carry out its obligations stipulated herein. In addition, Party A shall
provide to Party B copy of Party A's "Real Property Ownership Certificate"
which shall be attached hereto as Schedule B.
4.1.2 The Premises and the site on which the Premises are located are in
good repair and sound structural condition and in compliance with all relevant
building, fire and safety, public security and other regulatory standards and
shall be maintained as such during the Term. Party B shall have no obligations
under this Agreement until Party A has supplied evidence of compliance with all
such regulatory (all approval documents to the Premises) of the Premises and
certificates to the Premises.
4.1.3 The Premises (and the site on which the Premises are located) are not
subject to any lease, mortgage, charge or any other encumbrance and Party A
will not during the Term create or grant any lease, mortgage or charge or other
encumbrance over the Premises that could have any unfavorable impact on Party B.
4.1.4 During the Term, Party A shall guarantee that the Premises are connected
to the public water, drainage, electricity and winter heating systems.
4.1.5 During the Term, should there be any other construction within the
campus, Party A shall not interfere with Party B's convenient vehicle passage.
4.2 In addition to its responsibilities stated elsewhere in this Agreement,
Party A shall have the following responsibilities:
4.2.1 Within 5 days of the Effective Date, Party A shall deliver actual
possession of the Premises to Party B for its use. During the Term, Party A
agrees to Party B's quiet enjoyment of the Premises.
4.2.2 Party A shall secure all required government permits for the use of
the Premises and its land for the activities as set forth in this Agreement.
4.2.3 Party A agrees to directly and continuously supply electricity, water,
and winter heating to the Premises. Upon notification by Party B of defects,
Party A shall promptly repair the defects.
4.2.4 If Party B is unable to carry on its normal business activities for a
period of five consecutive days because of lack of a sufficient supply of
electricity, water or heat (under the condition of maintaining 16 degrees
Celsius room temperature and above), during the specified period, or for any
reason which is the responsibility of Party A, Party B shall not be
responsible for payment of rent for the period beginning on the sixth day
Party B is unable to carry on its normal business activities, and continuing
until the electricity, water or heating has been restored to normal operation
or the problem has been resolved. Party B may deduct the rent payable for such
period from its next rental payment.
4.2.5 Party A shall be responsible for repairs to both original interior
fixtures and to the exterior of the Premises throughout the Term. Should
Party A be unable or unwilling to effect such repairs, Party B may arrange for
such repairs itself and may deduct the costs of such repairs from its next
rental payment.
4.2.6 So as not to interfere with Party B's business activities, Party A
must adhere to the stipulations of the concerned Chinese laws and regulations
in handling the relevant procedures.
4.2.7 Party A shall be responsible for the payment of all taxes, fees and
charges which may be levied by the Chinese laws and regulations in respect of
the Premises.
4.2.8 Party A shall provide Party B with copies of detailed technical
drawings for the Premises (including the Premises' structural drawing, floor
plan, pipeline drawings, etc.)
4.2.9 Party A shall maintain the tranquility of the surrounding of Premises
and will not permit others to use the non-rented part of the Premises and the
surrounding of the Premises for commercial activities such as selling food or
commodities.
4.2.10 Party B and Party B's employees, customers and invitees shall have
convenient, continuous and unhindered 24-hour access to the Party A's School
at all times for the full Term. Party B and its subtenants may erect a sign
on the exterior gate of the campus and may also erect a sign at each entrance
to the Premises.
4.2.11 Party A shall maintain during the entire Term adequate property and
liability insurance to cover the Premises. All such insurance policies shall
name Party B as an additional insured and provide that Party B shall be given
written notice not less than sixty (60) days prior to any termination,
amendment, cancellation or modification thereof. Party A shall within thirty
(30) days of the Effective Date purchase insurance and provide to Party B
copies of the relevant certificates of such insurance coverages. If Party A
has applied for insurance but is unable to complete the purchase of insurance
by the deadline due to issues related to the renovations or activities of
Party B, the deadline will be waived and the parties will establish a new
timetable by mutual agreement. Both parties agree that the purchase of
insurance shall be on the renovated building. Party B will pay for the
increased cost of insurance caused by any increase in the value of the
building attributable to Party B's renovations. For purposes of this provision,
the parties agree that the issue of increased cost will be determined by a
comparison of insurance cost quotations for the building, one insurance cost
quotation without the renovations, and one insurance cost quotation with the
renovations.
Article 5 - Warranties and Responsibilities of Party B
5.1 Party B hereby represents and warrants to Party A:
5.1.1 During the Term, Party B shall not engage in illegal activities on the
Premises, shall not permit any subtenants to engage in illegal activities on
the Premises.
5.1.2 Party B shall avoid engaging in dangerous activities on the Premises.
5.1.3 During the Term, Party B shall take good care of the Premises and
facilities. Should Party B intentionally or accidentally cause damage to the
Premises and facilities, it should be responsible for repair or compensation.
5.1.4 Party B shall not arbitrarily demolish and rebuild or damage the basic
structure of the Premises.
5.1.5 Party B shall not engage in activities on the Premises which would
damage Party A's reputation.
5.2 In addition to responsibilities stated elsewhere in this Agreement,
Party B shall have the following responsibilities:
5.2.1 Party B shall pay rent in accordance with the terms of this Agreement.
Should Party B fail to pay the rent without justification, Party B shall pay
a delayed payment fee based on the number of days. The daily delayed payment
fee shall be 0.5% of the corresponding fee.
5.2.2 During the Term, Party B shall take all reasonable precautions to
protect the Premises from damage and shall report any damage to Party A upon
discovery of such damage.
5.2.3 After renovations to the interior of the Premises, Party B shall
provide copies of the remodelling and renovation construction drawings and
relevant information.
5.2.4 During business activities or other activities, Party B shall preserve
the peacefulness of the environment and must not interfere with the teaching
activities of Party A and the normal rest of the surrounding residents.
5.2.5 During the Term, Party B's employees, customers and invitees shall
abide by security regulations as agreed to by both Parties and shall respect
the employees of Party A.
5.2.6 Party B shall bear responsibility for the handling of medical waste
and medical water waste discharge as well as consequences created by the
improper handling of such waste.
5.2.7 Party B shall equip the interior of the Premises with the required
fire prevention equipment, formulate fire prevention measures and carry out
fire safety drills in accordance with the requirements of the relevant fire
department.
5.2.8 After the expiration of this Agreement, Party B shall without question
give to Party A all fixtures within the Premises that cannot be moved.
Article 6 - Renovation
6.1 Party A ensure that the Premises rented to Party B is a finished building
which is up to the standard; and Party A agrees that as of the Effective Date,
Party B can freely remodel and renovate the Premises, provided that such
remodelling and renovation shall not damage the basic structure of the
Premises. Party A agrees to cooperate fully in such remodelling and
renovation work, and to assist Party B in obtaining any required government
permits or approvals. (The structural safety of such renovations shall be
verified by a Beijing architectural firm.)
6.2 Party B shall pay design fees and renovation fees for those renovation and
remodelling requested by Party B.
6.3 Party A and Party B agree that either Party shall consult with the other
Party and get the consent of the other Party before remodelling and
construction on the roof of the Premises, or utilizing the roof of the Promises
for the expansion of its using area.
Article 7 - Quiet Enjoyment
Party A agrees that, if it shall decide to undertake construction
activities on the grounds, it will consult with Party B first and will do its
best to reduce the impact of construction activities that effect Party B.
Article 8 - Assignment
Party A agrees that Party B shall be entitled to assign its rights and
obligations under this Agreement to a third party. In addition, Party A agrees
to cooperate fully with Party B in obtaining any necessary government approvals
of such assignment. Party B shall be responsible for the costs of any such
assignment, and shall notify Party A of any such assignment within 10 days of
executing an assignment agreement.
Article 9 - Sublease
Party A agrees that Party B, under the condition of carrying out all the
stipulations as set forth in article 5 of this Agreement, shall be entitled
to sublease the Premises or a part of the Premises provided that it shall
notify Party A within 5 days of the effective date of such sublease.
Article 10 - Surrender of the Premises
Party B within 30 days of the expiration of the Term shall vacate the
Premises and redeliver the Premises in a clean and sound condition to Party A.
Party B shall not be required to rebuild any walls removed by Party A or
Party B, or undo remodelling or renovation undertaken pursuant to Article 6.
Party B may remove any equipment, machinery, furnishings and other structures
and installations which were not provided by Party A. If the Premises have not
been surrended by the assigned date, Party B shall pay per day 110% of the
average daily rental fee.
Article 11 - Inspection
11.1 Upon the Effective Date, Party A shall provide Party B with the copy
of Party A's "Real Property Ownership Certificate".
11.2 Upon the Effective Date, Party B shall conduct an inspection of the
Premises with a representative of Party A.
11.3 Within 30 days of the expiration of the Term, a representative of
Party B will accompany a representative of Party A to inspect the condition of
the Premises and return the usage right of the Premises to Party A. The
Premises shall be handed back to Party A without any change to the basic
structural features of the Premises.
ARTICLE 12 - Termination Of This Agreement
12.1 Should any of the following situations occur, Party B may terminate
this Agreement:
12.1.1 If after three months from the date this Agreement becomes effective,
Party A has still not provided evidence of the Real Property Ownership
Certificate;
12.1.2 If the Premises are defective or damaged through no fault of Party B,
such that Party B is unable to use the Premises for its intended purpose, and
Party A fails to remedy the situation within thirty (30) days following
receipt of written notice from Party B; or
12.1.3 If Party A otherwise breaches this Agreement, which breach remains
uncured ninety (90) days after Party B has provided Party A with written
notice of the breach.
12.2 Should any of the following situations occur, Party A may terminate
the Agreement:
12.2.1 If Party B uses the Premises in violation of the terms of this
Agreement substantially damaging the interests of Party A, and such situation
is not remedied within sixty (60) days after Party A has provided Party B with
written notice of the breach.
12.2.2 If Party B fails to make payments of the Rent within sixty (60) days of
the due date for such rental payment.
12.3 Should any of the following situations occur, either Party may
terminate this Agreement:
If the conditions or consequences of Force Majeure prevail for a period in
excess of three (3) consecutive complete calendar months and the Parties have
been unable to find an equitable solution.
Article 13 - Force Majeure
13.1 "Force Majeure" shall mean all events which are beyond the control of
the Parties to this Agreement, and which are unforeseen, or if foreseen,
unavoidable, and which prevent total or partial performance by either Party
13.2 If an event of Force Majeure occurs, to the extent that the contractual
obligations of the Parties to this Agreement cannot be performed as a result of
such event, such contractual obligations shall be suspended during the period
of delay caused by the Force Majeure and shall be automatically extended,
without penalty, for a period equal to such suspension.
13.3 The Party claiming Force Majeure shall promptly inform the other Party
in writing and shall furnish appropriate proof of the occurrence and duration
of such Force Majeure. The Party claiming Force Majeure shall also use all
reasonable efforts to minimize the consequences of such Force Majeure.
13.4 In the event of Force Majeure, the Parties shall immediately consult
with each other in order to find an equitable solution and shall use all
reasonable endeavours to minimize the consequences of such Force Majeure.
ARTICLE 14 - Governing Law; Dispute Resolution
14.1 The formation, validity, interpretation, execution, amendment and
termination of this Agreement shall be governed by the published laws and
regulations of the PRC.
14.2 Any dispute arising from, out of or in connection with this Agreement
shall be settled by friendly consultation between the Parties. In the event
that either Party determines that the dispute is unable to be resolved by
consultation, either Party may, at any time, refer the dispute to the Beijing
Arbitration Commission in Beijing for arbitration according to its arbitration
procedural rules then in effect. The result of the arbitration is final and
binding to both Parties.
14.3 During arbitration, except for the area of disagreement under
arbitration, all other provisions of this Agreement are still valid.
Article 15- Miscellaneous
15.1 Languages
This Agreement is written in both Chinese and English. The two language
versions shall have equal validity and effect.
15.2 Waiver
Failure, waiver or delay on the part of either Party hereto to exercise
any right, power or privilege under this Agreement shall not operate as a
waiver thereof; nor shall any single or partial exercise of any right, power
or privilege preclude any other future exercise thereof.
15.3 Severability
The invalidity of any provision of this Agreement shall not affect the
validity of any other provision of this Agreement provided that, had the
Parties known of the invalidity of such provision, they would have presumably
concluded this Agreement without such provision.
15.4 Entire Agreement
This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof and supersedes all prior discussions,
negotiations and agreements between them.
15.5 Amendments
Any amendment to this Agreement shall require both Parties to sign a
written agreement. Such amendment shall become effective only upon approval
by the Government authorities which will have originally approved this
Agreement.
15.6 Registration
Party A and Party B shall handle the registration and filing procedures
with the real estate housing authority in accordance with the relevant
regulations. All necessary fees shall be equally borne by both Parties.
15.7 Costs
Each party shall bear its own costs in the preparation and execution of
this Agreement. Any stamp duty payable on the execution of this Agreement
shall be equally borne by the parties in equal shares.
15.8 Implementing Guidelines
Written guidelines for the further detailed implementation of this
Agreement must obtain the written approval of both Parties. Such agreed upon
guidelines will have the same force and effect as the Agreement.
15.9 Effectiveness
This Agreement is duplicated in four copies, with each Party holding two.
The Agreement shall become effective after duly authorized representatives of
both Parties attach their signatures and add their seals.
IN WITNESS WHEREOF, this Agreement is signed on the date first written above
by the duly authorized representatives of the Parties.
Beijing Industrial School of Posts and Telecommunications
By: /s/ Xx. Xxxx Xxxx
Beijing United Family Health Center
By: /s/ Xxxxxxx Xxxxxx
