Common use of Profit Distributions Clause in Contracts

Profit Distributions. 1. During the first 12 years, until to August 15, 2017, part of income is to repay the Second Hospital’s debt by Party B. The remaining of the income will go to Party B. 2. From the thirteenth year, Party A starts to take the greater of 1.5% of annual income (including healthcare, medicine and others) or 550,000 RMB for capital improvement fund. If the fund is below 550,000 RMB, Party B should make up the difference. At the end of the contract, the fund should be used for reconstruction of the Second Hospital. Party A is eligible for this fund, and Party B pays the fund to Party A directly. 3. Should Party B successfully operate the business after 10 years, both parties can re-negotiate for new profit distributions.