Gas
Station Lease Agreement

     

    
      Pursuant
to the Contract Law of the People’s Republic of China, and the relevant laws, on
the basis of equal, mutual benefit, same valuable considerations and volitions
of both parties, through friendly negotiations, in regard to the matters of
leasing gas station, the Xi’an City Baorun Industrial Development Co., Ltd. and
Xinyuan Gas Station hereby reach agreements as below:

      


      Article
1: Parties

      Lessor:
Xinyuan Gas Station (hereinafter “Party A”)

      Registered
Address: Shuian Road, Xi’an City

      Legal
Representative: Ma Yuling

      


      Lessee:
Xi’an City Baorun Industrial Development Co., Ltd. (hereinafter “Party
B”)

      Registered
Address: No. 7, Huoju Road, Xi’an City

      Legal
Representative: Gao Xincheng

      


      Article
2: Content of Lease

      Party A
leases Party B the gas station, which was built by it on Xinhua Village, Dizhai
Town, Baqiao District. The gas station covers 7,000 square meters (including
unused part on the backyard), and includes six computerized fuel dispensers, the
total amount of storage is 210 cubic meters (60m3x3+30) four storage tanks, the
rain-proof shed, which is 500 square meters, and the business room, which is
approximately 140 square meters (Please refer to “Lease Properties Handover
Confirmation” for details of assets.)

      


      Article
3: Term of Lease

      
        
          	
                  1.

                	
                  The
      term of lease of the gas station is 21 years (starts from January 1, 2007
      through December 31, 2027.)

                


        

      

      
        
          	
                  2.

                	
                  The
      agreement becomes effective after being signed and sealed by Party A and
      Party B. After the handover of all of the operation procedures and
      qualification certificates, the term of lease commences from the execution
      date of the agreement.

                


        

      

      


      
        Article
4: Rent and Payment

      

      
        
          	
                  1.

                	
                  The
      yearly rent of the gas station is RMB125,000 (consisting of expenses of
      land use rights and the rent for the business room, RMB10,000, the rent
      for facilities, RMB115,000.)

                


        

      

      
        
          	
                  2.

                	
                  After
      the execution of the agreement, Party A is responsible for completing the
      acceptance check of fire protection and the general acceptance check,
      procedures of the joint construction and operation, plan, and the
      acceptance check procedure of commerce department, and within one week
      after the aforesaid procedures are completed, Party A shall transfer all
      the operation procedures to Party B, then Party B shall pay 50% of the
      three–year rent, which is RMB187,500 to Party A. After Party B officially
      takes possession of the station, Party B shall pay the rest 50% of the
      three-year rent, which is RMB187,500 to Party A. Upon two years of
      performance of the lease, Party B shall pay the rent of the forth year,
      afterward, Party B shall pay its rent annually.
      The basis of yearly rent is RMB125,000, and shall be increased 5% in every
      year.

                


        

      

       

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

       

      
        Article
5: Handover of Leasing Properties

      

      
        
          	
                  1.

                	
                  After
      Party A completes the relevant procedures, both parties conduct the
      handover and execute the Lease Properties Handover Confirmation. Party B
      takes the leasing properties and conducts the image
    package.

                


        

      

      
        
          	
                  2.

                	
                  Party
      A is responsible for rendering the planned temporary construction of the
      gas station, and the procedure of the fire protection and the Operating
      Licenses for Hazardous
Chemicals.

                


        

      

      
        
          	
                  3.

                	
                  Party
      A shall be responsible to Party B for use rights of the leased but unused
      land on the backyard of the gas
station.

                


        

      

      
        
          	
                  4.

                	
                  In
      the event the construction quality has problems within one year, Party A
      shall be responsible for the free repair and
  maintenance.

                


        

      

      


      
        Article
6: Property Rights and Ownerships during Term of Lease

      

      
        
          	
                  1.

                	
                  During
      the term of lease, the ownership of the gas station belongs to Party A.
      The usufructuary right of the gas station belongs to Party
      B.

                


        

      

      
        
          	
                  2.

                	
                  During
      the period that Party B operates the gas station, Party A is responsible
      for negotiating with the neighbors, and guarantees the ordinary supply of
      water and electricity for Party B. Party B is responsible for the water
      and electricity fees.

                


        

      

      
        
          	
                  3.

                	
                  During
      the period that Party B operates the gas station, Party A shall not
      transfer, sublet and mortgage the gas station to the third party. In the
      event that Party B is not able to conduct ordinary operations due to the
      dispute of the leasing properties attributed to Party A, Party A shall
      assume all of the compensation
liabilities.

                


        

      

      
        
          	
                  4.

                	
                  Party
      B shall individually conduct businesses in accordance with laws, be
      responsible for the profit and loss, pay taxes in accordance regulations,
      and assume the civil liabilities of the credits and debts. Party B shall
      not conduct any form of mortgage or pledge of the gas station during the
      term of lease.

                


        

      

      
        
          	
                  5.

                	
                  Party
      A shall provide with the legal procedures of the property rights of the
      gas station. During the period that Party B operates the gas station, in
      the event Party B is not able to conduct the ordinary business due to the
      property right disputes of the gas station, the demolition and
      resettlement of the gas station, or the administrative agencies’
      interference based on the plan and location selecting, Party A shall
      return the paid rent of unused years, and compensate the actual loss
      caused by the aforesaid
events.

                


        

      

      


      
        Article
7: Partial Modification of Gas Station

      

      During
the term of lease, in the event the leasing properties cannot reach the ordinary
use requirements, Party B shall obtain the written consent of Party A and then
conduct necessary partial modifications. The modification expenses shall be
assumed by Party B. Upon the expiration of the term of lease, the properties and
equipments of the leasing gas station shall reach the ordinary use condition.
Upon the expiration of the lease or the early termination of the lease, if both
parties have no intention to renew the lease, Party B shall assist Party A to
transfer all of the alteration procedures that it has done for Party B back to
Party A.


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      Article
8: Adding Facility and Equipment

      
        
          	
                  1.

                	
                  The
      facilities and equipments that are added by Party B during the term of
      lease shall belong to Party B. Upon the expiration of the term of lease,
      Party B shall dispose the aforesaid facilities and equipments by itself
      within the period stipulated by Party
A.

                


        

      

      
        
          	
                  2.

                	
                  In
      the event Party B demolishes the business room built by Party A during its
      operation period, the property rights of newly built buildings shall
      belong to Party A. In the event the coverage of the newly built buildings
      is less than the coverage of the original buildings, Party B shall
      compensate Party A for the decreased coverage on the basis of RMB500 per
      square meter.

                


        

      

      


      Article
9: Covenants of Parties

      
        
          	
                  1.

                	
                  All
      of the claims and debts of the gas station incurred prior to the official
      execution of the lease shall be assumed by Party A. Party B has no
      liabilities to the aforesaid claims and debts. After Party B leases the
      gas station, it shall conduct the tax registration procedure in accordance
      with the relevant
regulations.

                


        

      

      
        
          	
                  2.

                	
                  The
      claims and debts incurred during period of Party B’s ordinary operation of
      the gas station shall be assumed by Party B. Party A has no liabilities to
      the foresaid claims and debts. Party B shall be responsible for the
      security liabilities due to its use of the gas
  station.

                


        

      

      
        
          	
                  3.

                	
                  During
      the term of lease, in the event that after Party A completes the procedure
      of land requisition, and the gas station needs to be improved and sold, in
      the same condition, Party B has the right of first refusal. The paid and
      exceeding part of rents may be set off as the transfer expenses. In the
      event both parties cannot reach agreements, both parties shall continue to
      perform the agreement, Party A shall not sell the whole of the property to
      the third party.

                


        

      

      
        
          	
                  4.

                	
                  During
      the term of lease, in the event the gas station is demolished and
      resettled due to the urban plan and similar reasons, Party A shall return
      the paid rent of the unused period to Party B. The compensation of the
      property demolition and resettlement shall belong to Party
    A

                


        

      

      


      
        Article
10: Breach

      

      Party A
and Party B shall assume the breach liabilities, in the event either party
breaches the agreement to cause the non-performance of the
agreement.

      
        
          	
                  1.

                	
                  Breach
      of Party A: Party A shall return the unexecuted months of paid rent of the
      year to Party B, and shall pay Party B 10% of the total amount of rent of
      the year as the breach
penalty.

                


        

      

      
        
          	
                  2.

                	
                  Breach
      of Party B: Party B has no rights to request Party A to return the paid
      rent of the year, and shall pay Party A 10% of the total amount of rent of
      the year as the breach
penalty.

                


        

      

      
        
          	
                  3.

                	
                  In
      the event the gas station cannot be ordinarily operated due to the
      disputes of the use right of land, Party A shall compensate Party B the
      normal loss during the period of ceasing operations. In the event the
      lease agreement cannot be performed due to the disputes of the use right
      of land, Party B is entitled to rescind the agreement unilaterally, and is
      not responsible for the breach
liability.

                


        

      

       

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      Article
11: Rescission and Termination of Agreement

      
        In the
event the following conditions occur, both parties may negotiate to rescind or
terminate the agreement:

      

      
        
          	
                  1.

                	
                  Within
      three months prior to the expiration of the lease, Party B does not has
      the intention to renew the lease, then both parties shall negotiate to
      rescind the agreement.

                


        

      

      
        
          	
                  2.

                	
                  The
      occurrence of force majeure events causes the agreement unable to be
      continuously performed.

                


        

      

      
        
          	
                  3.

                	
                  The
      national policies change, and the gas station objectively cannot be
      continuously operated. (In the event the occurrence of Item 2 or Item 3,
      either party shall notify the other party in writing, and provide with
      effective evidencing documents.)

                
	 	Upon
      the early termination, Party A shall return the paid rent of the rest
      duration of the lease to Party B. (Except for that either party has no
      compensation liabilities to the other party if the natural disasters,
      earthquakes and wars occur.)


        

      

       

      Article
12: Return of Leasing Properties

      
        Upon the
expiration of the lease, if Party B does not renew the lease, it shall return
the leasing properties within 20 days upon the expiration of the
lease.

      

      


      
        Article
13 Effectiveness of Agreement

      

      
        The
agreement becomes effective after both parties sign and seal the
agreement.

      

      


      
        Article
14: Dispute

      

      During
the term of lease, in the event any dispute is occurred between both parties,
both parties shall based on the friendly and equal spirit to negotiate the
dispute. In case both parties cannot reach agreements through negotiations, the
parties shall submit a lawsuit to the People’s Court.

      


      Article
15: The agreement consists of eight copies, each party holds four
copies.

      


      Article
16: Any matter that is not specified in the agreement shall be negotiated and
amended, its supplemental and amended agreement shall has the same legal
effects.

      


      Lessor:
Xinyuan Gas Station

      Legal
Representative: (signature)

      (with
corporate seal)

      


      


      Xi’an
City Baorun Industrial Development, Co., Ltd.

      Legal
Representative: (signature)

      (with
corporate seal)

      


      Date of
Execution: February 1, 2007

      



      
        
           


        

        
          4