Unassociated Document


    Land
Lease Agreement

     

    
      Lessor:
Northwest Refractory Factory (hereinafter “Party A”)

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

      


      Pursuant
to the Contract Law of the People’s Republic of China, to stipulate the rights
and obligations of both parties, through friendly negotiations, both parties
agree to execute the agreement.

      


      Article
1: Name, Four Boundaries and Usage

      Party B
leases one parcel of land of the refractory materials storage plant of Party A.
The four boundaries: the east end is the east side wall of an original clay rest
room for the first construct group; the west end is the wall on the protection
slope of the materials plant; the south end is at the middle of the road in
front of the door of the corundum shop; the north end is the boundary of the
flood drainage adjacent to the boiler
room.

      Party B
leases the land with the intent to build the accessory facilities of the oil
tank. However, Party B shall not transfer, rent and mortgage the
land.

      


      Article
2: Term of Lease

      The term
of the lease is 10 years. Party A delivers the land to Party B on July 1, 2006,
and takes back the land on June 30, 2016. In the event Party B needs to extend
the use, it shall conduct the renewal procedure within one month prior to the
expiration of the agreement.  In case Party B does not conduct the
aforesaid procedure, Party A is entitled to take back the land and the buildings
on the land without considerations.

      The
property right of the fixtures built by Party B shall belong to it.

      


      Article
3: Rent and Payment

      
        
          	
                  1.

                	
                  The
      yearly rent is RMB150,000, paid on three installations, meaning that Party
      B shall pay RMB50,000 every four months. In consideration of demolitions,
      resettlements and construction phases, the first month that Party B pays
      the rent is on July 2006.

                


        

      

      


      
        Article
4: Obligation of Both Parties

      

      
        Obligation
of Party A:

      

      
        
          	
                  1.

                	
                  Negotiates
      with neighbors to guarantee the fixture on the land Party B leases to be
      demolished smoothly. The expense of demolition and resettlement that Party
      B shall assume refers to Demolition and Resettlement
    Agreement

                


        

      

      
        
          	
                  2.

                	
                  The
      new construction project belongs to the accessory facilities of the oil
      tank. In the event the relevant procedures need to be conducted, Party A
      may assist to conduct the procedures. The expense shall be assumed by
      Party B.

                


        

      

      
        
          	
                  3.

                	
                  Responsible
      for resolving the dispute arising from the internal neighbor’s arguments
      due to the lease of land, and assumes the liabilities incurred by the
      interference of the department of the State-owned
  asset.

                


        

      

      
        
          	
                  4.

                	
                  Guarantees
      the smooth of process water, electricity and the
  road.

                


        

      

      
         

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

         

        Obligation
of Party B:

      

      
        
          	
                  1.

                	
                  Pays
      rents and water and electricity fees on time. (The details refer to Water,
      Electricity Use and Pound Inspection
Agreement)

                


        

      

      
        
          	
                  2.

                	
                  Assumes
      all of the results incurred by the fire security, production security and
      environmental protection.

                


        

      

      
        
          	
                  3.

                	
                  Shall
      not sublet, mortgage and use the land in other
  way.

                


        

      

      
        
          	
                  4.

                	
                  Without
      the written consent of Party A, shall not change the original building on
      the land.

                


        

      

      


      
        Article
5: Covenants of Both Parties

      

      
        
          	
                  1.

                	
                  In
      the event Party B demolishes and removes the original fixtures on the land
      without considerations before the construction starts, the expenses
      incurred shall be assumed by Party
B.

                


        

      

      
        
          	
                  2.

                	
                  Party
      B shall conduct the relevant procedures of the oil product operations on
      the land by itself. The installation and procedure of facilities shall be
      in compliance with the fire security regulations. The relevant liabilities
      arising from the aforesaid shall be individually assumed by Party
      B.

                


        

      

      
        
          	
                  3.

                	
                  The
      transportation, load and unload, and technology of oil products of Party B
      shall meet the requirements of the security, environmental protection and
      health, and shall not exceed the emission standards of “Three Wastes”. The
      environmental pollution liabilities incurred shall be assumed by
      Party B itself.

                


        

      

      
        
          	
                  4.

                	
                  Party
      B shall preferentially employ the unemployed workers of Party A. The
      percentage of unemployed workers of Party A shall exceed 80% of the
      position workers of Party B, and the employment contracts shall be in
      compliance with the relevant rules of the human resource department of
      Party A.

                


        

      

      
        
          	
                  5.

                	
                  During
      the term of lease, in the event the Lessor transfers all of ownerships of
      the leasing properties to the third party, it shall notify the ownership
      transfer of the Lessor. After the ownership is transferred, the acquiror
      becomes the lessor of this agreement, and is entitled to all of rights and
      assumes obligations of the original
lessor.

                


        

      

      
        
          	
                  6.

                	
                  In
      the event Party A or Party B cannot perform or cannot fully perform the
      agreement due to the force majeure, either party shall notify the other
      party within 30 days and negotiates all of the relevant
      issues.

                


        

      

      
        
          	
                  7.

                	
                  In
      the event Party A conducts the policy bankruptcy, in the condition that
      the relevant national regulations and conditions are equal, Party B shall
      be entitled to the first refusal right to purchase the land and the
      relevant preferential
policies.

                


        

      

      


      
        Article
6

      

      In the
event the occurrence of the followings of Party B, Party A has the right to
terminate the agreement and to sue Party B for the breach:

      
        
          	
                  1.

                	
                  Unilaterally
      sublets the land to the third party, or uses the land in the other way,
      without written consent of Party
A.

                


        

      

      
        
          	
                  2.

                	
                  Changes
      the original building on the land at its discretion, without written
      permission.

                


        

      

      
        
          	
                  3.

                	
                  Does
      not pay the full rent and water and electricity fees as set forth in the
      agreement.

                


        

      

      


      Article
7: Any matter that is not specified in the agreement or the dispute arising from
the performance of the agreement shall be negotiated, the agreed agreements
shall be the appendix of the agreement.

      


      The
agreement consists of two copies, each party holds one copy.

       

      
        
          
          

        

        
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      Party A:
Northwest Refractory Factory

      Authorized
Representative:

      (with
corporate seal)

      


      Party B:
Xian City Baorun Industrial Development, Co., Ltd.

      Legal
Representative: (signature)

      (with
corporate seal)

      


      Location
of Execution: Xiaobeibao, Yaozhou District

      Date of
Execution: April 20, 2006


      
        
           


        

        
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