| 1. | The Leased Land and Its Size: The leased woodland plot is located on a hill between Hongta Village on the south, Yanshan Town on the west and Dalu Villagers’ contracted field on the north. It is about 500 mu in size (see the actual measurement in the Woodland Use Certificate) and covered by protection forest (mainly Lodgepole pine). |
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| 2. | The said woodland plot will be leased to the Lessee for a term of 70 years, starting on 20 November 2008 to 20 November 2078. The Lessor shall assist in changing the user’s name of the Woodland Use Certificate to be the Lessee within 30 days after the signature of contract. |
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| 3. | The yearly rent totals RMB twenty thousand yuan only, which shall be paid on an annual basis and increased by 10 percent every 10 years. |
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| 4. | In managing and using the woodland plot, the Lessee shall abide by all state policies and regulations related to land, agriculture and forest. |
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| 5. | Care and use of the woodland plot: |
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| 6.  | Events of Termination |
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| 7. | The Lessor and the Lessee shall decide through negotiation whether to extend the Contract six months before the expiration of the lease specified in this Contract. Where a third party wishes to lease the said woodland plot or the Lessor intends to reclaim it, the third party or the Lessor shall be liable to compensate the Lessee for the invested assets left on the woodland plot, based on the assets’ assessed value of the time. |
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| 8. | The Lessee shall maintain proper vigilance aimed at preventing fires or theft, and assume responsibility for any damage to any person or property from such causes as fires or wood theft, for which the Lessor shall not undertake any financial or legal responsibility. |
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| 9. | The Lessor owns the living trees on the said woodland plot (see the attached list). The Lessee only holds them in trust and shall see that they are left as originally found till the expiration of the lease. If any of the living trees is damaged by the Lessee, the Lessee shall assume the compensation responsibility. If it is damaged by a third party, the third party shall assume the compensation responsibility. If the Lessee has to fell trees for the reason of construction, the Lessor shall react favorably. If the felling has to go through due applying procedure, it must be done accordingly, and the relevant applying fees shall be undertaken by the Lessee. |
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| 10.   | Both parties shall fulfil the Contract when it comes into force. In case of the breach of the Contract by either party without cause, the breaching party shall pay the observant party a penalty of RMB 10,000 and compensate the financial loss suffered by the observant party as the result of the breach. Furthermore, the observant party has the right to terminate this Contract unilaterally. |
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| 11.   | Any disputes arising from or in connection with the Contract shall be settled by both parties through amicable consultations or mediations. Where such consultations or mediations fail, either party may file a lawsuit with the local people’s court. |
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| 12. | The Contract shall come into force as of the date of its official signature by both parties. The Contract is done in quintuplicate, with two for each party and one for Lilou township government as a record. Both parties shall abide by the Contract strictly. |
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