Document:

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.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      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

      
        
           

        

        
          3Oil
Storage Service Agreement

      

      Party A:
456 Bureau of Shaanxi Bureau of Material Reserve

      Party B:
Xi’an Baorun Industrial Development Co., Ltd.

      

      Pursuant
to the Contract Law of the People’s Republic of China, based on the volitional,
equal and honesty principles, with regard to the escrow of oil materials,
through negotiations, Party A and Party B hereby reach agreements and executed
this contract.

       

      
        
          	
                  1.

                	
                  Name
      of Escrowed Oil Materials: refined
oil

                

        

        
          	
                  2.

                	
                  Quality
      Inspection upon Entering-into and Delivery-out of Storage and Calculation
      Method of Amount:

                

        

        
          
            	
                  	
                    (1)

                  	
                    Quality

                  

          

        

        
          
            	
                  	
                    (i)

                  	
                    The
      quality of gasoline and diesel upon entering into the storage: Party A
      shall base on the standard provided by Party B to inspect gasoline and
      diesel delivered by Party B by the current examination equipments of Party
      A. Party A shall examine the main indexes and retain samples in accordance
      with regulations. In the event the quality does not reach the standard,
      Party A is entitled to reject to receive and notify Party B. The loss
      incurred accordingly shall be assumed by Party
  B.

                  

          

        

        
          
            	
                  	
                    (ii)

                  	
                    The
      quality of gasoline and diesel upon delivery-out of the storage: when the
      escrowed gasoline and diesel of Party B are delivered out of the storage,
      the samples of them shall be taken from the storage tank and the loaded
      railway vessel car, and the quality inspections shall be
      conducted.

                  

          

        

        
          
            	
                  	
                    (2)

                  	
                    Amount

                  

          

        

        
          
            	
                  	
                    (i)

                  	
                    The
      amount of gasoline and diesel upon entering-into the storage: with regard
      to the oil products delivered by Party B, Party A shall evaluate every car
      (weights automobile tank cars and railway tank cars), and adopt the last
      amount.

                  

          

        

        
          
            	
                  	
                    (ii)

                  	
                    The
      amount of gasoline and diesel upon delivery-out of the storage: Party B
      shall hold the oil withdraw sheet, and oil-distributing personnel of Party
      A shall according to the model, amount and the dense, temperature of the
      day to conduct calculations and distribute accordingly. The automobile
      delivery-out shall use the amount that Party A weights. Both parties book
      the accounting records respectively. After the railway tank car is loaded,
      the amount shall be calculated and lead sealed by both parties. Party A
      shall not be responsible to the quality of oil products after the
      acceptance check and delivery-out of the
  storage.

                  

          

        

        
          
            	
                  	
                    (iii)

                  	
                    In
      the event the amount of delivery-out of storage is not adequate because
      the small amount of last residual oil cannot be fully released due to the
      equipment of Party A, with regard to the amount of difference, Party A
      shall pay Party B the oil payment at the price calculated based on the
      price that Party B receives
oil.

                  

          

        

        
           

           

          
            
               

            

            
               

              
                

              

            

            
               

            

          

           

           

          
            	
                    3.

                  	
                    Exhaust
      of Oil Product

                  

          

        

        Gasoline
Exhaust

        
          
            	
                  	
                    (1)

                  	
                    The
      first month general exhaust is calculated according to
    4.0‰.

                  

          

        

        
          
            	
                  	
                    (2)

                  	
                    Starting
      from the second month, the storage exhaust is calculated according to
      1.2‰

                  

          

        

         

        Diesel
Exhaust

        
          
            	
                  	
                    (1)

                  	
                    The
      first month general exhaust is calculated according to
    2.0‰.

                  

          

        

        
          
            	
                  	
                    (2)

                  	
                    Starting
      from the second month, the storage exhaust is calculated according to
      0.3‰

                  

          

        

         

        The
exhaust within the exhaust standard set for above shall be assumed by Party B,
the exceeding part shall be assumed by Party A.

        
          
            	
                    4.

                  	
                    Right
      and Obligation

                  

          

        

        
          
            	
                  	
                    (1)

                  	
                    Right
      and Obligation of Party A

                  

          

        

        
          
            	
                  	
                    (i)

                  	
                    Strictly
      complies with Enforcement Rule to National Reserved Oil Materials
      Management Guideline to keep the oil
products.

                  

          

        

        
          
            	
                  	
                    (ii)

                  	
                    Assists
      with Party B to handle the relevant matters of railway vessel
      cars.;

                  

          

        

        
          
            	
                  	
                    (iii)

                  	
                    Provides
      with the meal and accommodation service to personnel of Party
      B.

                  

          

        

        
          
            	
                  	
                    (2)

                  	
                    Right
      and Obligation of Party B

                  

          

        

        
          
            	
                  	
                    (i)

                  	
                    Gasoline
      and diesel organization and transportation
work.

                  

          

        

        
          
            	
                  	
                    (ii)

                  	
                    Educates
      its workers and drivers to strictly comply with policies and regulations
      of Party A, and to obey the management from personnel of Party
      A.

                  

          

        

        
          
            	
                  	
                    (iii)

                  	
                    Pays
      the escrow fees on time.

                  

          

        

        
          
            	
                  	
                    (iv)

                  	
                    Strictly
      complies with the relevant provisions set forth in this
      contract.

                  

          

        

        
          
            	
                    5.

                  	
                    Standard
      of Expense and Calculation

                  

          

        

        
          
            	
                  	
                    (1)

                  	
                    The
      escrow fee is RMB800,000
yearly.

                  

          

        

        
          
            	
                  	
                    (2)

                  	
                    Party
      B shall pay the escrow fees on time. In the event Party B does not pay off
      the escrow fee after the expiration of the contract, Party A may entrust
      the qualified business operators to sell the rest of oil products to set
      off the escrow fee.

                  

          

        

        
          
            	
                    6.

                  	
                    Breach

                  

          

        

        
          
            	
                  	
                    (1)

                  	
                    During
      the term of escrow, Party A is only responsible for the obligation of
      escrow; it has no rights to use. In the event Party A uses without consent
      of Party B, and causes failure of delivery of Party B, Party A shall
      assume all of the economic losses
incurred.

                  

          

        

        
          
            	
                  	
                    (2)

                  	
                    During
      the term of the escrow, Party A shall coordinate with Party B to withdraw
      the product. In the event Party B cannot withdraw the product attribute to
      the management of Party A, Party A shall assume relevant economic
      liabilities.

                  

          

        

        
           

           

          
            
               

            

            
               

              
                

              

            

            
               

            

          

           

          
            	
                    7.

                  	
                    Force
      Majeure

                  

          

        

        
          
            	
                  	
                    (1)

                  	
                    In
      the event the occurrence of earthquakes, floods, wars, the material
      adjustments to policies of national or local governments and other force
      majeure factors, either party is not responsible to the other
      party.

                  

          

        

        
          
            	
                  	
                    (2)

                  	
                    Either
      party or both parties that are affected by the force majeure are obliged
      to take actions to mitigate the loss caused by the force majeure to the
      lowest degree.

                  

          

        

        
          
            	
                    8.

                  	
                    Alteration
      and Cancellation

                  

          

        

        
          
            	
                  	
                    (1)

                  	
                    Through
      the negotiations of both parties, the contract may be altered and
      cancelled.

                  

          

        

        
          
            	
                  	
                    (2)

                  	
                    In
      the event Party B does not pay the escrow fee in accordance with the
      contract, Party A is entitled to reject to distribute oil. Party A may
      unilaterally cancel the
contract.

                  

          

        

        
          
            	
                  	
                    (3)

                  	
                    In
      the event the superior police changes, both parties shall cancel the
      contract in accordance with the superior regulation without
      conditions.

                  

          

        

        
          
            	
                    9.

                  	
                    In
      case any matter is not specified in this contract, both parties shall
      negotiate to resolve in accordance with the Economic Contract Law of the
      People’s Republic of China. In the event the contract shall be amended,
      the amendment shall be agreed by both
parties.

                  

          

        

        
          
            	
                    10.

                  	
                    This
      contract becomes effective after both parties execute the contract. The
      effective duration is from January 1, 2009 through December 31,
      2010.

                  

          

        

        
          	
                  12.

                	
                  This
      contract consists of two copies, each party holds on
  copy.

                

        

        
          
            	
                    13.

                  	
                    Any
      dispute occurs and negotiation fails to resolve the dispute, the dispute
      shall be solved at the registration place of Party
  B.

                  

          

        

        

        Party A:
456 Bureau of Shaanxi Bureau of Material Reserve

        Legal
Representative: (signature)

        (with
corporate seal)

        

        

        Party B:
Xi’an Baorun Industrial Development Co., Ltd.

        Legal
Representative: (signature)

        (with
corporate seal)

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