EX-10.13 2 a2227617zex-10_13.htm EX-10.13

Exhibit 10.13

Lease Agreement

Contract No.: BD [2015] 241

This lease agreement is made in Suzhou Industrial Park on 12 th (day) November (month) 2015 (year) between the following parties:

Landlord: Suzhou Industrial Park Biotech Development Co., Ltd

a company established under the laws of the People’s Republic of China and having its office at 5F, North Block, A1 Building, 218 Xinghu Street, Suzhou Industrial Park, China, 215123 (hereinafter referred as “Party A”)

Tenant: Nortech Systems (Suzhou) Ltd

a company established under the laws of the People’s Republic of China and having its office at Room 101, 201, No. 3 Building, 218 Sangtian Street, Suzhou Imdustrial Park, China, 215000 (hereinafter referred as “Party B”)

Hereinafter the two parties are collectively referred to as the “Parties”.

After friendly consultation and negotiation, both Parties agree to sign this Lease Agreement on the fact the Landlord leases and the Tenant rents the premises in BioBAY Sangtian Island No.3 building for research, manufacture and office use as below in accordance of PRC Contract Law and related regulations.

1. Lease of Premises

1.1 The premises refers to the place having its address at Suite 101, 201 of No.3 Building of BioBAY Sangtian Island, containing a build-up area of 2780 square meters. See Attachment 1 of layout of the premises.

1.2 The build-up area in this clause is subject to final survey by the Authorities in SIP.

1.3 The premises shall only be used for research, manufacture and office use. The tenant shall not vary the use of the premises unless obtain the prior written consent of the Landlord.

1.4 The Landlord has already notified the Tenant that the premises is only for research, manufacture and office use, and shall not guarantee any other special uses of the premises. The Tenant hereby confirms that there is no further requirement to the environment and agrees not to raise any requirement or to terminate this Agreement during the Lease Term upon this.

1.5 Tenant shall obtain all the permission, license or other related permit by its own to start operation in the premises.

1.6 See Attachment 3 of the fitting out and utility status in the premises. Unless otherwise be agreed by both parties, this Attachment 3 shall be the standard of original state of the premises from Landlord to Tenant upon commence of the Lease and Tenant to Landlord upon termination of this Lease.

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2. Payment of Rent, Service Charge and other fee

2.1 The amount and payment schedule of rent and service charge of the premises are listed in Attachment 2.

2.2 The rent and service charge of the premises is calculated on the build-up area listed in Clause 1.1 of this Lease.

2.3 Landlord or the Property Management Enterprises appointed by Landlord has the rights to adjust the Service Charge of the premises according to the change of exact cost of managing the building during the Lease Term. However, the Service Charge shall remain unchanged for the first three years and the increasing range thereafter shall not exceed 5% of previous yearly Service Charge.

2.4 Rent and Service Charge shall be payable without advanced notice from the Landlord. Tenant shall make the first payment of rent and service charge upon signing this Lease. See Attachment 2 of the first payment of rent and service charge.

2.5 Tenant shall pay rent and service charge of the current month on or before the first day of the month according to this Lease, except for the first payment of rent and service charge.

2.6 If any of the payment day falls on a Non-Working Day, the Tenant shall be liable to pay the relevant rent and service charge due on such date only on the first Working Day immediately following such date. The Working Day in the Clause refers the day when Bank of China is open for business.

2.7 Landlord shall be liable to provide Invoice to Tenant within fifteen days after the whole amount of rent and service charge is received.

2.8 The Tenant shall pay all the public service bills including but not limited to water, electricity. (hereinafter referred to as “Other Fees”) according to the independent meters of the premises and/or the bills from public utilities provided by the Tenant. The Tenant shall pay Other Fees according to the payment method and payment schedule listed on the notice issued by the Landlord or the Property Management Enterprises appointed by Landlord when receiving the reading of independent meters or bills. It shall be considered as breach of this Agreement if the Tenant fails to do so.

2.9 The Tenant shall pay the rent, Security Deposit and Fitting Out Deposit to the following account of Landlord:
Name of Account: Suzhou Industrial Park Biotech Development Co., Ltd
Account No.: 10551101040011339
Name of Bank: Agricultural Bank of China SIP Technology Branch

2.10 The Tenant shall pay service charge and Other Fees to the following account of Landlord or the Property Management Enterprises appointed by Landlord.
Name of Account: China-Singapore Suzhou Heqiao Property Service Co., Ltd
Account No.: 831-4135306436
Name of Bank: Shanghai Pudong Development Bank Suzhou Industrial Park Branch

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2.11 Other fees or taxes which arise from using of the premises shall be borne according to the laws and regulations.

2.12 During the Lease Term, where Party B and Party B’s employees or visitors need to park their motor vehicles in the parking lots of BioBAY Sangtian Island, Party B shall comply with Party A’s charge rules for parking which may be amended from time to time, and shall pay the charges timely as required by Party A.

3. Lease Term and Hand over issue

3.1 See Attachment 2 and Attachment 3 of Lease term and hand over date.

3.2 Tenant shall conduct hand over procedure and pay related fees at the property management office of the building on the hand over date. Landlord or its appointed property management company shall hand over the premises to the Tenant, and the Landlord’s obligation to hand over the premises shall be considered fully fulfilled upon signing of the hand over form by both Parties. Where Party B fails to conduct hand over procedure in accordance with this Article, or Party B refuses to hand over the premises without justifiable reasons, the premises shall be considered to be handed over to Party B on the hand over date successfully.

3.3 If the Tenant fails to conduct the hand over procedure at the property management office after fifteen days from the hand over date, the Landlord shall be entitled to early terminate this Agreement and forfeit the Security Deposit.

3.4 Upon signing this Lease, Tenant has already known that the premises fail to comply with the hand over standard. If the premises still fail to comply with the hand over standard when it comes to the hand over date, the hand over date will be extended accordingly, and Landlord is not liable for such breach of contract, but such extension shall not exceed 2 months.

3.5 The Landlord has the rights to take back the premises upon termination of this Agreement and the Tenant shall hand over the premises to the Landlord in accordance with related Clauses.

3.6 The Tenant has the priority to renew the Lease of the premises. However, the Tenant shall serve written notice to Landlord in order to extend the Lease Term at least three (3) months before the expiration of the Lease Term. The Landlord may discuss and coordinate with the Tenant on the renewal of the Lease after receiving the written notice. In line with the principle of good faith, based on the Rent herein and with reference to the then market conditions, both Parties shall negotiate on the Rent and Lease Term of the renewal lease based on the Rent of this Lease through friendly consultation and sign renewal lease at least two (2) months before the expiration of the Lease Term. If no renewal of the Lease is reached two months before the expiration date of this Agreement, the Landlord shall be entitled to rent out the premises to other parties upon the expiration date.

4. Security Deposit

4.1 Security Deposit is the deposit placed by the Tenant as security for the due performance of the Tenant’s obligations.

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4.2 Security Deposit hereunder shall be equal to the amount of rents of three months, see Attachment 2 for specific total amount of Security Deposit. The Tenant shall place all the Security Deposit within 20 days after signing this Agreement. The Landlord shall not pay the interest of the Security Deposit during the whole Lease.

4.3 Without prejudice to Party A’s rights, the Landlord shall return the Security Deposit (without interest) within thirty (30) days from the day that Tenant payoff all due amount and hand over the premises to the Landlord according to this Agreement.

4.4 The Security Deposit shall be maintained full amount throughout the Lease Term. Under the circumstance that the Tenant breaches this Agreement, the Landlord shall issue a written notice to the Tenant. If the Tenant refuses to amend, the Landlord shall be entitled to deduct the Security Deposit to compensate all losses including but not limit to due Rent, Service Charge and other Fees. In such case, the Tenant shall make up the amount of deducted Security Deposit and pay it to the Landlord upon the Landlord’s notice. Otherwise the Landlord shall have the rights to take back the premises immediately and the Tenant shall be considered severe violation of the Agreement. If the amount of Security Deposit is not enough for the deduction, the Landlord shall be entitled to recover the compensation and the Tenant shall pay the balance to the Landlord.

4.5 Security Deposit shall be wire transferred to the Bank Account of the Landlord listed in Clause 2.9.

4.6 The Security Deposit shall not be deemed or treated as payment of Rent, Service Charge or other Fees by the Tenant, nor be used as a guarantee to any other entity or as a creditor transfer.

5. Fitting out, partition, installation of equipment rebuild

5.1 The Tenant shall obey the rules established by the Landlord to partition, carry out the fitting out activities, install equipment or rebuild the premises, including but not limited to obtain the approval from the Landlord or the Property Management Enterprises and related Authorities (if applicable) on the fitting out plan and drawings and to place a Fitting Out Deposit.

5.2 Party B or Party B ensures that its contractor shall place the Fitting Out Deposit before starting fitting out the premises. The standard for calculating the Fitting Out Deposit shall be as below:

X stands for Lease Area(square meter) |  | Fitting Out Deposit(RMB)
X 300 |  | 3000
300<X 1000 |  | 7000
1000<X 2000 |  | 10000
X>2000 |  | 20000

5.3 Where the fitting out activities are completed and the fitting out has passed the examination of Party A, the Property Management Enterprises and relevant

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governmental administration such as the fire department (if applicable), the Fitting Out Deposit without interests may be returned to Party B within 30 working days after receiving Party B’s application for refund.

5.4 If any property loss is brought to Party A or any third party due to Party B’s or its contractor’s violation of the approved fitting out plan or violation of the laws and regulations, Party A is entitled to deduct compensation accordingly from the Fitting Out Deposit; if the amount of compensation exceeds the amount of the Fitting Out Deposit, Party A shall have the right to pursue recovery.

5.5 The Tenant shall not do any rebuild, partition or fitting out activities that may cause damage to the original construction of the building, especially the structure, loading, exterior appearance and public space.

5.6 In consideration of different commencing period of all the tenants in the building, to ensure the working environment of the in-operation tenants, the fitting out hour is specified by the Landlord or its appointed property management company. Any special requirement, the Tenant and its contractor shall apply case by case. The Tenant shall carry out the fitting out activities pursuant to this Agreement and related regulations of property management and shall not place any construction materials or tools on the public space or anywhere outside the premises unless otherwise agreed by the Landlord.

5.7 At any time when Party A or Property Management Enterprise finds that Party B’s fitting out plan, drawings or conducts have violated the above mentioned approval or rules, Party A and Property Management Enterprise will be entitled to demand suspension and correction of Party B’s fitting-out activities.

6. Maintenance and Repair

6.1 During the Lease Term, the Landlord shall conduct maintenance of the building and its attached facilities regularly and keep the appearance and inner public space clean and tidy.

6.2 Landlord’s responsibility of maintenance is limited to the original structure of the premises, the power connection which hasn’t be amended by the Tenant and public space. Landlord shall repair the parts within its responsibility while any damage to the premises or its attached facilities occurred or within 24 hours of the Tenant’s notice. If the Landlord fails to respond to the Tenant’s request of maintenance within 24 hours after receiving the Tenant’s notice, the Tenant can repair the parts by itself, but the Tenant shall submit the maintenance plan and get the Landlord’s approval before implementation, the Landlord agrees to reply to the Tenant within two working days after receiving the Tenant’s maintenance plan. If the Landlord fails to reply within the aforesaid period, the Tenant can repair it by itself, and the Landlord shall fully compensate the Tenant for reasonable maintenance fee which have been actually paid by the Tenant.

6.3 The Tenant shall make reasonable use and take care of the premises and its facilities, and keep it and its inner part rentable and in good condition. When there is any destruction or accident, or any damage or defect in facilities such as water system,

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wire, installation and other facilities, the Tenant should inform the Landlord or property management company in both oral and written form.

6.4 In case of any deliberate, accidental or improper damage or malfunction on the building or its facilities by the Tenant or its employees or visitors, or any damage to the landlord or a third party, the Tenant should be responsible for immediate fixation and proper compensation which includes but is not limited to fixation, maintenance and all expenses and fees caused by compensation for other parties. If the Tenant fail to do the fixation within three days since the Landlord’s information, the Landlord has the right to do it for him and send the maintenance expenses to the Tenant together with 20% of managerial fee.

6.5 If Landlord installs air-con or any other important equipment or machinery in the premises, the Tenant shall carry out reasonable maintenance and shall not place any covers, seal or fitting out which may cause difficulty to repair the Landlord’s installation.

6.6 Unless defined in this Agreement, the Tenant shall obtain the written consent from the Landlord and obtain relative Authorities’ approval if required to move in any additional instruments and equipment. The Tenant is responsible for the maintenance and repair of the instruments and equipment.

7. Property Management and related issues

7.1 The building is managed by the Landlord and the Landlord also has the right to appoint certified property management enterprises to execute the property management work.

7.2 The Tenant shall strictly obey the rules and regulation made by the Landlord or its appointed property management enterprises in order to manage the properties. These rules and regulations shall be considered as an indivisible part of this Agreement.

7.3 Landlord or its appointed property management enterprises reserve the right to make, modify, adopt or replace any management rules and regulations necessary to manage and maintain the building to be an top-ranking R&D and office building. However, a written notice shall be sent to the Tenant thirty (30) days in advance.

8. Entry to the Premises and Inspection of Work

8.1 The Tenant agrees that Landlord or its appointed property management enterprises enter the premises for maintenance, cleaning service, theft preventing, disaster preventing, rescue, other management needs or repair for the premises next door. Usually, Landlord shall notify the Tenant of the entry twenty-four (24) hours in advance.

8.2 In case of any emergency, Landlord or its appointed property management enterprises shall enter the premises with accompany of Tenant’s representative during the office hour. Landlord or its appointed property management enterprises have the right to enter the premises without advanced notice while it happens in non-office hour and Tenant is unable to contact.

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8.3 If such situation mentioned in Clause 8.2 occurs, the Tenant shall support and corporate with Landlord or its appointed property management enterprises. Landlord or its appointed property management enterprises shall reduce the influence to the Tenant to the best of their abilities.

9. Relationship with Neighbor

9.1 The Tenant shall not do or let others do any activities that may cause interference to neighbors or the Landlord.

9.2 The Landlord only bears the responsibility of coordination where the dispute arises between the Tenant and its neighbors. If the dispute cannot be resolved by such coordination, the Tenant may negotiate with the neighbors or go to the court directly. Under any circumstance, the Tenant shall not list the Landlord as the defendant or third person, unless otherwise regulated in the law.

9.3 If there is any dispute arising between the Tenant and neighbors caused by the Tenant and the neighbors take legal action against the Tenant and list the Landlord as the third person, the Landlord shall have the rights of recourse the fees including but not limit to attorney fees, lawsuit cost and etc. The Landlord shall be entitled to deduct such fees from the Security Deposit.

10. Insurance

10.1 The Tenant shall not do or let others do anything that may cause the partial or total invalidation of the insurance of the premises or the building or increase the cost of insurance. The Tenant shall be responsible for any renewal or extra cost of insurance or other related fees caused by Tenant’s breach of the Lease, in the event that the Landlord have to re-insurance or increase the total amount of the insurance, and shall pay back to the Landlord all the extra amount in time.

10.2 The Tenant promises to carry on the personnel and property insurance and respective Third Party Insurance (if any) of the employees and properties inside the building (including but not limited to office instruments, computers, vehicles, important documents, etc). The liabilities for any personal loss or property loss of Party B, Party B’ employees or any third party occurred in the building shall be borne by Party B.

10.3 The Tenant shall provide and show the insurance slip or payment sheet of such insurance when the Landlord makes reasonable request.

11. Assignment, Sub-letting and Sale

11.1 The Tenant shall not transfer, sub-let, assign, let the premises or give any other rights to any other third parties (hereinafter referred as “Party C”) without the written consent from the Landlord.

11.2 In the event that the Landlord gives the Tenant the written consent described in Clause 11.1, the Tenant shall make Party C agrees and implement all the clauses and obligation in this Agreement and bear the responsibility while Party C breach any clause in the Agreement or regulation of the building. For the convenience of

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managing the building, the Tenant shall submit the Agreement between Tenant and Party C to the Landlord for recording.

11.3 The Landlord has the right to sale the premises, the whole building or any part of the building at any time during the Lease. However the Landlord shall insure to carry the obligation as Landlord according to this Agreement.

11.4 The Tenant shall not claim the preemption of the premises under the circumstance that Landlord sales the whole or parts of building, unless the Landlord sales the Premises separately.

12. Yield up of the Premises

12.1 Unless otherwise agreed in writing by both Parties, Tenant shall yield up the premises which is already in their original state as of the hand over date (except for natural losses) or in a state as accepted by Party A in writing to Party A upon termination of this Agreement, the Tenant shall serve written notice to the Landlord in advance for inspection and acceptance of the premises, both Parties shall examine the premises according to the standard herein. Upon Party A’s receiving of all the keys of the premises and signing of the Hand over Form by both parties, the Tenant’s obligation to yield up the premises is considered to be fulfilled.

12.2 The Landlord reserves the right to require the Tenant reinstate, remove or tear down any rebuild, attachments, installations and bear all the cost of such action, through such rebuild or installation is approved by the Landlord. The installation or equipment shall be kept if approved by the Landlord. However the Tenant shall not ask for compensation in such case.

12.3 Under the circumstance that the Tenant fails to fulfill the obligation of yielding up the premises pursuant to Clause 12.1, the Landlord shall be entitled to charge the Tenant at 200% of the daily Rent (the standard of such rent shall be the rent at the time of termination of this Agreement) as occupancy fee from the next day of termination of the Agreement or expiration of the Lease Term to the day both parties sign on the hand over form, and the Landlord shall be entitled to deduct it from the Security Deposit. However, such payment of occupancy fee shall not form the renewal or extension of the Lease Term. The Landlord shall have the right to request the Tenant to move out immediately.

12.4 Under the circumstance that the Tenant fails to fulfill the obligation of yielding up the premises over thirty (30) days (including public holidays) pursuant to Clause 12.1, Anything (including but not limited to office supplies or equipment) left in the premises shall be deemed as disposal and the Landlord is entitled to enter the premises to handle it (if any) without witness of any third party or notarization. The Tenant agrees not to ask for compensation in such case and afford all service cost and cost of reinstating the premises.

12.5 Upon termination of this Agreement or expiration of the Lease Term, the Tenant shall not require the Landlord to purchase or compensate the fitting-out and instrument in the premises at any reason.

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13. Breach of the Agreement

13.1 If the Tenant fails to pay the Rent, Service Charge or other Fees including but not limited to water fees, electricity fees in accordance with this Agreement, the Tenant shall pay a penalty of 0.05% of the total amount of due payment each day from the date of due dates to the date that the Tenant clears all the due payment. If such delay of payment exceeds thirty days, it shall be considered the Tenant’s breach of the Agreement and the Landlord shall be entitled to claim the Tenant’s responsibility pursuant to Clause 13.2.

13.2 The following situation will be considered severe violation of the Agreement by Tenant, the Landlord shall be entitled to terminate the Agreement. The lease termination date shall be the date when the Landlord’s written notice is received by the Tenant:

13.2.1 the full amount of Rent, Service Charge or other Fees hasn’t been paid for over thirty (30) days;

13.2.2 breach of this Agreement (including the Clauses in this Agreement and the regulation established by the Landlord) and fails to remedy after thirty (30) days of written notice issued by the Landlord;

13.2.3 the Tenant faces financial crisis, reckoning, or revoke of Business License;

13.2.4 any Tenant’s property in the premises is sealed up or kept in custody;

13.2.5 the Tenant sub-let or let the premises without permission;

13.2.6 the Tenant does not use the premises in accordance with agreed purpose, or conduct illegal activities in the premises; or

13.2.7 the Tenant terminates the Lease early without grounds in law or in this Agreement.

13.2.8 other circumstance in this Agreement defined as severe violation of the Agreement.

13.3 The Tenant hereby explicitly agrees and declares, where the Landlord terminates this Agreement due to Tenant’s above breaches or other breaches according to the law where the Landlord is entitled to terminate this Agreement, the Landlord shall be entitled to forfeit all Security Deposit and take back the premises. In addition to the liability of paying off all due payment, the Tenant shall bear all the following liabilities:

13.3.1 paying liquidated damages which equal to sum total of six months’ rents (the standard of such rent shall be the rent at the time of termination of this Agreement) (including the Security Deposit placed by the Tenant);

13.3.2 paying liquidated damages at 0.05% of the total amount of due payment each day;

13.3.3 compensating the rest of the losses if the above liquidated damages cannot make up for all losses.

13.4 Since the Rent, Service Charge and other Fees on water and electricity at the expense of Party B are necessary in managing and running the building, the Landlord holds the right to cut off all these supplies until the Tenant pays them off in the case of delayed payment. And any economic losses due to this shall be borne by the Tenant;

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and the expenses on restoring these supplies shall be the Tenant’s responsibility.

13.5 Any behavior, negligence, non-performance or violation against this Agreement from the employees, agents, contractors, invitees, customers or visitors from the Tenant shall be regarded as behavior, negligence, non-performance, or violation against this Agreement from the Tenant and the Tenant shall undertake the related responsibilities.

13.6 Relevant regulations on violation in the contract can be executed together with the item above-mentioned simultaneously.

14. Exemption of Liability of the Landlord

14.1 The Tenant hereby explicitly agrees and declares, unless the following condition is directly caused by the Landlord’s intent activities, the Landlord shall not be liable to the Tenant or any other personnel;

14.1.1 Any defect or malfunction from facilities in the building, such as elevator, staircase, fire fight, security or air-conditioning; or failure, malfunction or suspension of provision of services like electricity, running water, gas or telephone etc.

14.1.2 Any overflow, leakage of water, smoke or fire, or infiltration of rain or water into the building.

14.1.3 any propagate of mouse, termite, cockroach or any other vermin, or any personnel or property loss or damage to the Tenant or other personnel caused by blast of the premises or building, theft or robbery;

14.1.3 natural disaster, force majeure or any communicable diseases like SARS;

14.1.4 any damage caused by other tenants in this building.

14.2 The Landlord shall provide security guard, managing personnel, any mechanical or electronic security system (if any) to the property or the premises. However this will not constitute the Landlord’s liability of the secure of the premises, the Tenant, its employees or visitors, and their belonging etc.

15. Confidentiality

15.1 The Parties agrees to keep confidential of the other party’s related documents and files before or during this Agreement.

15.2 The other Party shall return or destroy by melting or burning all the confidential documents and files (including photocopies) while the Agreement terminates (or requested by one Party at any time).

15.3 The Parties promise to never leak out any rental price of this Lease or information during the negotiation.

16. Dispute Resolution

16.1 In the event any dispute arises between the Parties in relation to this Lease, the Parties shall attempt in the first instance to resolve such dispute through friendly consultations.

16.2 If the dispute has not been resolved through friendly consultations within thirty (30) days, then the dispute shall be settled by proceeding in the local courts of the

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Premises.

17. Miscellaneous

17.1 Any amendment on the Lease shall have written consent from both Parties.

17.2 Non-Waiver

17.2.1 The case that the Landlord learn of the Tenant’s violation of the contract while accepting his payment doesn’t mean that the Landlord has given up the right to investigate for his responsibility. If the Landlord tends to give up any right in this contract a written signature should be provided. In case of insufficient payment from the Tenant, that is, the Landlord accepts the remaining part from the Tenant the landlord still holds the right to pursue the overdraft and the right to investigate for relevant responsibilities and take measures according to the contract or the laws.

17.2.2 Any forgiveness or exemption from the Landlord about the Tenant’s violating, not obeying or executing his responsibilities doesn’t mean the landlord’s approval or toleration to such behavior, or exemption from the responsibility of violating the contract unless there is a written permission.

17.2.3 Any approval from the Landlord to the Tenant means only an approval on a certain event. It won’t entitle the Tenant with the freedom from any responsibility or execution of any item in the contract. And it doesn’t mean the Landlord will give consent to the Tenant on the same kind of event unless there is a written permission.

17.3 The Tenant shall allow the Landlord or its representative to accompany other interested parties to view the premises with advanced appointment with the Tenant, within the ninety (90) days before lease expiration or termination, unless the Landlord and the Tenant has already agreed to renew this Lease.

17.4 The Tenant shall notify the Landlord in writing within forty-eight (48) hours after receives any kind of notice, services, summons related to the premises by Authorities.

17.5 The Landlord has the right to change the name of the building at anytime, but shall notify the Tenant ninety (90) days in advance. The Landlord shall not bear any other responsible or compensation to the Tenant.

17.6 The Tenant hereby agrees the Landlord or its’ appointed property managing company has the right to use the Company Name and logo only at the promotion of the building. If the Landlord needs any related materials and sample, the Tenant shall be corporate.

17.7 All the display, introduction or promotion carried out by the Landlord or its’ appointed property managing company to other tenants are only offers for reference. If there is any discrepancy against this Agreement, this Agreement shall prevail.

17.8 Notices:

Any notice issued according to this Agreement or relevant documents shall be in writing form and sent via post, express, facsimile transmission or other means, the written notice is deemed to have been received when:

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1) upon five days after sending if sent by post or express;

2) upon that the fax machine shows successful transmission if sent by fax;

3) if sent by other means, namely, if the notice is handed over by Party A to Party B directly in the Premises and when it is signed by Party B’s employees, such notice shall be deemed to have been received; if the notice is handed over by Party B to Party A directly in the Premises, such notice shall be deemed to have been received when it is signed by Party A; when Party A or the Property Management Enterprise releases its management rules or notices, which can be posted at an eye-catching position of the building or the entrance of the Premises, such management rules or notices shall be deemed to have been received.

One Party shall notify the other Party with written notice in time when it changes the Business Licence, the following mailing address(including but not limited to addressee, address, telephone number, fax number) during Lease Term, otherwise, the Party who fails to timely notify shall bear all the liability of delivery delay or unable to deliver.

The Mailing address of Party A:

Name of the Company: Suzhou Industrial Park Biotech Development Co., Ltd

Addressee: Junyong Pang

Address: Floor 5, North Block, A1 Building, No.218 Xinghu Street, SIP

Postal code: 215123

Tel: 86-512-62956666

Fax: 86-512-62986633

The Mailing address of Party B:

Name of the Company: Nortech Systems (Suzhou) Ltd

Addressee: Grace Zhao

Address: Room 101, 201, No. 3 Building, 218 Sangtian Street, Suzhou Industrial Park, China

Postal code: 215000

Tel: 86-13701360312

Fax:

17.9 Any unsettled matters in this Agreement shall form a Supplementary Agreement while agreed by both Parties. The Supplementary Agreement shall also be an indivisible part of this Agreement. In the event of any discrepancy between this Agreement and the Supplementary Agreement, the Supplementary Agreement shall be considered as supplement to the original Agreement and shall prevail.

17.10 This Agreement shall be effective when duly executed by both parties. This Agreement is made in six copies with Party A holding 3 copies and Party B holding 1 copy, the other 2 backup copies will be kept by Party A for submitting to department of commerce and department of tax administration for registration if necessary. This Agreement is written in Chinese and is translated to English, in

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the event of any discrepancy between English version and Chinese version, the Chinese version shall prevail.

17.11 If Party B is in preparation of set-up when signing this Lease, this Lease shall also be considered effective with the signature and seal of Party A and signature of authorized representative for and on behalf of Party B. All the obligation and rights shall be borne and carried out by the authorized representative for and on behalf of Party B before the Business License of Party B is issued by Authorities. After the entity set up, whether the former name of the Party B is consistent with the name used in this Lease, this Lease shall have the same effect. Party B shall seal on the Lease within fifteen (15) days after obtain the Business Licence and Company Stamp.

17.12 In Party B’s production and operational activities during the Lease Term, Party B shall comply with all the applicable national laws, regulations, rules and standards concerning environment, health and safety (including security assurance) as well as all related regulations adopted in Jiangsu Province and Suzhou City, and shall bear the social responsibility for enterprise on environment, health and safety. Party B has read Attachment 4: BioBAY Sangtian Island Enterprise’s Safety Liability Statement (hereinafter referred to as Safety Liability Statement)and fully understand and accept the requirements thereof.

Where Party B’s business operation dose not confirm to the national or local standards, or the Safety Liability Statement, leading to an incident or a hidden danger of security and environment, Party B shall suspend its operation immediately and start to rectify till to regain the acceptance of Party A or related governmental administrations. If anyone is dead in the incident or there is any other serious situation which may affect the normal operation environment or may lead to major safety incident, or Party B fails to perform its obligations of declaring environment test, fitting out, standardized administration of labs and other environmental requirements and rectification obligations, Party B shall be considered as having seriously breached this Agreement, Party A is entitled to terminate this Agreement immediately and Party B shall bear the liabilities for breaches. Meanwhile, if any personal loss or property loss caused to Party A or any third party, compensation for such losses shall be borne by Party B.

(No text below)

Party A: |  | Party B:
Suzhou Industrial Park Biotech |  | Nortech Systems (Suzhou) Ltd
Development Co., Ltd |  |
Signature and Stamp |  | Signature and Stamp

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Attachment 1. Layout Plan of the Premises

This layout plan is only used to confirm the location of the premises by both parties. Tenant shall not use this plan for any other purpose.

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Attachment 2. Particulars of the Lease and Payments of Rent, Service Charge and other Fees

1.1 As agreed by both parties, the Term of this Lease is a total period of 60 months commencing from 10th (date) January (month) 2016 (year) and ending on 9th (date) January (month) 2021 (year).

1.2 The rent-free period is from 10th (date) January (month) 2016 (year) to 9th (date) July (month) 2016 (year). During the rent-free period, Party B may pay no rent to Party A, but shall pay the Service Charge and other fees(including but not limited to costs arising from use of the Premises, such as water costs, electricity charges)(hereinafter referred to as the Other Fees) according to Clause 1.4, 1.5, and 1.6 of this Attachment. The rent-free period is a special preference given by Party A to Party B, if this Agreement is terminated early due to Party B’s reason, Party B shall pay the rent for such rent-free period on the standard stipulated in Clause 1.3 of this Attachment, apart from other liabilities for breaching this Agreement.

1.3 As agreed by both parties, from 10th (date) July (month) 2016 (year) to 9th (date) January (month) 2021 (year), the monthly Rent of the Premises shall be 111200 RMB in total calculated at the rate of 40 RMB per square meter. The first payment of Rent at an amount of RMB 111200 (for the Rent Period from 10th (date) July (month) 2016 (year) to 31st (date) July (month) 2016 (year)) shall be payable on the signing date of this Agreement. All other payments of Rent shall be payable monthly on or before the first day of the current month. Rent shall be calculated by the portion of numbers of rental days to exact number of the current month while the payment period is less than one month.

1.4 As agreed by both parties, the monthly Service Charge of the Premises shall be 19460 RMB in total calculated at the rate of 7 RMB per square meter. The first payment of Service Charge at an amount of RMB 19460 (for the Period from 10th (date) January (month) 2016 (year) to 31st (date) January (month)) shall be payable on the signing date of this Agreement. All other payments of Service Charge shall be payable monthly on or before the first day of the current month. Service Charge shall be calculated by the portion of number of rental days to exact number of days in the current month while the payment period is less than one month.

1.5 Security Deposit of this Lease shall be RMB 333600 in total.

1.6 Tenant shall pay other fees according to the payment notice each month after receiving it.

1.7 As agreed and acknowledged by both parties, where there are arrears needs to be paid by Party B but Party B enjoys a sum of rental subsidy which is granted by Suzhou Industrial Park governmental authority when this Agreements is terminated, Party A may offset such arrears by Party B’s rental subsidy directly without giving any other notice to Party B.

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Attachment 3. Hand over date and Standard

1.1 The hand over date of the premises mentioned in this lease agreement shall be at 10th (date) January (month) 2016 (year). Lease commencement day and the hand over date shall be the same.

1.2 Standard of the premises to hand over and to return:

Type | 4 floors on the ground, basement as garage and equipment room
Function | Class C plant
Total construction area | 5,639 m 2; shared basement area;12,807 m2
Building area of each floor 1 st 2nd 3rd 4th others(generator room etc.) | 1390 m 2 1390 m2 1428 m2 1428 m2 131.2 m2
Structure type | reinforced concrete
Floor height 1 st~4th | 1 st/2nd:5.4 m; 3rd /4th:4.5 m
Floor / roof load capacity 1st 2nd~4th roof | approximately 1,000 kg/m 2 approximately 500 kg/m 2 approximately 200 kg/m 2
Column spacing | 8.4 m
Exterior wall | ALC block, elastic coatings brushed; sheet metal facades
Exterior doors and windows | aluminum alloy; hollow glass
Roof | reinforced concrete (waterproof and thermal insulation )
Interior decoration | entrance hall, bathroom, staircase, etc. have been decorated, other production workshops are rough
Sanitary equipment male bathroom female bathroom | the total number of each floor 1 1
Elevators freight elevator passenger elevator | 1 (load;2t) 1 (load;1.05t)
Utility equipment power supply fire protection system air condition system water supply drainage | the electric power capacity of each floor is reserved by approximately 170W/m 2 equipped with fire hydrant, spray, automatic fire alarm mechanical ventilation exhaust system reserved air condition room etc. providing water supply points reserved industrial sewage treatment room in the basement

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Attachment 4. BioBAY Sangtian Island Enterprise’s Safety Liability Statement

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Attachment 5. Reservation of Premises

1.1 The Landlord agrees to reserve the rest part of the building where premises are located (No.3 building of Suzhou BioBAY Sangtian Island) for Tenant’s need of expansion of production. The reservation period lasts two years since the premises herein are handed over, tentatively from 1st (date) November (month) 2015 (year) to 31st (date) October (month) 2017 (year); the actual hand over date shall prevail for calculation of such period. Tenant shall inform Landlord in writing 3 months in advance, that is before 31st (date) July (month), 2017 (year) whether Tenant will rent the reserving part Where Tenant intends to rent the reserving part, Tenant shall sign a formal lease or contract with Landlord no later than the expiration date of the reserving period.

1.2 Where Tenant fails to sign the formal lease or contract with Party B before the expiration date of the reserving period, if Landlord rents the reserving part out to a third party (Landlord ensures that it will not rent it out to other pharmaceutical ingredients manufacturing enterprises), Landlord will inform Tenant in writing and Landlord has to inform the third party that it shall not affect Tenant’s production of GMP, declaration and normal operation.

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