Document:

f10k2011a3ex10xix_china.htm

Exhibit 10.19

 

Development Agreement by and between

The People’s Government of Yongtai County and Hong Kong Yi Tat 

International Limited Relative to the Development Known as 

Yunding Park Scenic Area

Whereas:

1. The People’s Government of Yongtai County is a local people’s government entitled to dispose of the tourist resources related to the Agreement.

2. Hong Kong Yi Tat International Limited is an integrated group company, which has full operating power and capital advantage in developing, planning, integration, promoting and marketing tourist resources.

3. The Agreement aims to take advantage of the local tourist resources and speed up the development of local tourist industry.

4. The Agreement represents the policy of “strict protection, centralized administration, reasonable development and sustainable utilization” on the development of the Scenic Area.

Whereas the above cooperation aim and principle, in accordance with the relevant Chinese laws, regulations and rules, and on the principles of mutual benefit and common development, through amicable consultation, it is agreed in Fuzhou city as follows:

Article I Parties to the Agreement

 

	
1.

	
Party A: The People’s Government of Yongtai County

Responsible person: Linqiang (Deputy County Magistrate)

	
2.

	
Party B: Hong Kong Yi Tat International Limited

Legal Representative: Chen Minhua (Director of Board)

 

Article II the Project Zone for Cooperative Development

1. Development Zone:the development project zone of Yunding Park Scenic Area. The approximate expanse of the project is based on the expanse referred to in the Investigation Report on the Tourist Resources of Yongtai from Norh Creek to Yunshan Meadow jointly finished in April, 2008 by Yongtai Tourism Administration and Fuzhou Foreign Language and Foreign Trade Vocational College.

2. Priority Development Zone (referring to the zone where Party B shall enjoy the developing priority):the development project zone of Jiezhukou Reservoir Lake and the Scenic Area along the shores of the Lake.

 

  

 

  

 

Article III the Investment Scale

1. The development project of Yunding Park Scenic Area.

1.1 The total investment on such projects as the integrated infrastructure, the tourist attraction and landscape construction, sightseeing bus and the Scenic Area guidance facilities is $25,000,000. The registration capital is $10,000,000, which shall be in place by installments within 3 years after the signature of the Agreement.

1.2 The investment on the supporting items of the Scenic Area such as leisure facilities, resort facilities, a MICE hotel with unique feature, cable car (cableway) totals $60,000,000, which shall be in place by installments according to the actual proceeding of each establishment.

2. Jiezhukou Reservoir Lake and the Scenic Area along the shores of the Lake: whereas Jiezhukou Reservoir Lake is still not formed, the Parties agree that Party B shall obtain the legal development right within one year after the formation of Jiezhukou Reservoir Water-storage Lake.

2.1 If Party B obtains the development right, the planned investment by Party B will total $10,000,000 or the amount of RMB of the same value, which shall be invested on the integrated infrastructure, pleasure boats, the Scenic Area guidance facilities, etc.

2.2 If within one year after the formation of Jiezhukou Reservoir Water-storage Lake Party B has not expressed clearly its intention to develop this Project or has expressed his decision to give up this Project, Party A shall have the right to engage in other development of the Project or invite other investments.

Article IV Cooperation Details

1. The development of the Scenic Area: Party A shall provide the tourist resources within the Scenic Area and Party B shall be in charge of the provision of the Project construction capital and the operation of the Project. Both parties shall responsible for their liabilities and share profit in accordance with the terms of the agreement.Tourism franchise item development: to develop the supporting tourism franchise items such as the transportation, cableway, cable car and pleasure boat, Party A shall grant the franchise to Party B. Party B shall be in charge of the provision of the construction capital and the operation of the items, and Party A shall charge Party B for use of the Scenic Area resources according to this Agreement.

2. Other items of operation: Party B shall operate independently other items of operation and Party A shall provide the corresponding support in policy.

3. The construction land plot of the Scenic Area development: in terms of the construction land for such fixed establishments as the entrance of the Scenic Area, the tourists center, the ticket office, the management house and the parking lot and the land for other operating items, Party A shall first report to the authorized state organs for approval and then publicize the nominal quotation of the land use right for transferring according to the fees for land expropriation (demolition) and application, etc., while Party B shall cooperate and assist in the transfer.

 

  

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Article V Cooperation Duration

The cooperation duration of the Scenic Area development and the operation duration of the franchise item are the same, that is, 40 years beginning from the day when the Agreement is signed. The duration of other independent operation projects of Party B shall be decided according to relevant laws and regulations.

Article VI Rights and Obligations for Both Parties

 

1. Party A’s Rights and Obligations

1.1 Party A has the right to exercise supervision according to law over Party B’s tourist business within the cooperation zone and its enforcement of environmental protection. Party A shall enjoy the right to the charge for use of resources.

1.2 Party A shall guarantee that the tourist resources jointly developed by the Parties and the relevant franchise items are monopolistic and exclusive, and without the consent of Party B shall not be granted to any other party in any other way for development, use or operation.

1.3 Party A shall be in charge of harmonizing the relationship between villages, residents and work units within the Project zone and the relevant interest allocations.

1.4 Party A shall handle well the work of land expropriation (demolition) and report for approval involved in the project construction of the Scenic Area in accordance with the general plan of the Scenic Area and relevant laws.

1.5 Party A shall regard the road construction within the project zone of Yunding Park Scenic Area as part of the infrastructure project of the tourist development.

1.6 Party A shall be in charge of terminating the enforcement of all original agreements and documents related to the tourism development and operation within the Project zone(if there are), and handle well the after-care work.

1.7 Party A shall support Party B to operate independently according to law and protect Party B’s legal rights and interests based on this Agreement.

1.8 Party A shall play an active role in harmonizing the relationship between Party B and the local people living around the Scenic Area.

1.9 Within the Scenic Area, the original farmers shall be allowed to engage in farming or aquaculture in their original scale or in the planned zone.

1.10 During the term of the Agreement, unless the development of the Scenic Area has to be terminated due to a great change in the law or the state policy, Party A shall not unilaterally dissolve the Agreement.

2. Party B’s Rights and Obligations

2.1 Party B has the right to operate the Scenic Area independently according to law and decide independently the development models for the Scenic Area, the various franchise items and other tourist service items within the Scenic Area.

2.2 After the formation of Jiezhukou Reservoir Water-storage Lake, Party B shall enjoy the developing priority to the tourist resources in Jiezhukou Reservoir zone.

2.3 Party B shall pay to Party A the charge for the use of the Scenic Area resources and other relevant fees according to the covenants of the Agreement, and shall pay tax according to law, but the other operation income shall be enjoyed and disposed of by Party B.

 

  

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2.4 Party B has the right to mortgage and pledge its rights and interests under the Agreement.

2.5 Party B shall submit the pre-application of the project land use to Party A according to the general plan of the Scenic Area. After bidding for and gaining the land, Party B shall bear the relevant fees according to regulations.

2.6 Party B has the right to spend all of the project capital gained in the process of project application on the development and construction of the Project according to the actual situation of the Project.

2.7 Party B shall accept the administration and supervision of the state administration sector and industry sector according to relevant laws and regulations.

2.8 Party B shall engage a qualified planning and designing institution to make the general plan of the Scenic Area in accordance with the General Plan of Yongtai Tourism General Plan.

2.9 According to the relevant laws and regulations, Party B shall engage a qualified institution to prepare an Environmental Impact Report and go through the formalities of the inspection and approval in environmental protection.

2.10 Party B shall act in accordance with the relevant standard of scenic area development and the General Plan of Yongtai Tourism General Plan.

2.11 Party B shall conduct its development, operation and management activities in accordance with the laws, rules and regulations on “the Scenic Area” approved by the state government or Fujian People’s Government, and protect the natural tourist resources within the Scenic Area from possible damages.

2.12 When the Agreement has expired, under the same conditions, Party B shall have the priority to renew the Agreement.

2.13. Party B shall ensure the safety of tourists and their property according to the relevant regulations on production safety and operation safety.

2.14 Party B shall fulfill the investment scale on schedule according to the covenants in Article 3 of this Agreement.

2.15 If Party A organizes activities to increase the value of Yongtai tourist resources, such as applying for Qingyun Mountain as Geopark, and it involves the Scenic Area jointly developed by the Parties, Party B shall actively respond and give support.

Article VII  Management of Scenic Area and Distribution of Profits

1. Party A or its subordinate functional department shall exercise such administrative management as planning, management and supervision toward the Scenic Area according to law.

2. According to Article 3 and Article 4 of the Agreement, Party A shall not take part in the profit-making business operations within the Scenic Area.

3. According to Article 4 of the Agreement, Party B shall enjoy the investment income right.

3.1 According to the Agreement, Party B shall invest on the development of the Scenic Area and at the same time enjoy the investment income right.

 

  

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3.2 Party B shall enjoy the right to the following investment income: the remaining income after RMB 5,000,000 of the actual yearly admission fee income has been deducted during the first ten years; the remaining income after 5% of the actual yearly admission fee income has been deducted during the second ten years; the remaining income after 6% of the actual yearly admission fee income has been deducted during the third ten years; the remaining income after 7% of the actual yearly admission fee income has been deducted during the fourth ten years. All the above incomes shall be paid in a lump within two months after each fiscal year.

4. According to Article 4 of the Agreement, Party B shall pay Party A the charge for use of the Scenic Area franchise item resources.

The charge for use of the Scenic Area franchise item resources includes: not less than 3% of the actual yearly business income of the Scenic Area franchise items during the first ten years; not less than 4% of the actual yearly business income of the Scenic Area franchise items during the second ten years; not less than 5% of the actual yearly business income of the Scenic Area franchise items during the remaining years. All the above charges shall be paid in a lump within two months after each fiscal year.

 

Article VIII Ticket Price and Its Report for Approval

1. In terms of the examination, approval and adjustment of the ticket prices for the franchise items, Party B shall propose a plan and Party A shall promptly examine and approve it or report it for approval.

2. Party A shall be in charge of the business of the Scenic Area admission fee, which Party A can entrust Party B to charge and manage according to the actual situation.

3. Party B can propose a constructive plan on the ticket price of the Scenic Area, which Party A shall promptly study, examine, approve or report for approval.

 

Article IX Termination of the Agreement and Disposal of Assets

1. If the Agreement has to be terminated in advance due to a big change in the state laws or policies, Party A shall reimburse Party B for the termination in the following way: Party A pay Party B the Scenic Area resource fee and the charge for use of the resource gained by Party A in the year before the termination of the Agreement as an reimbursement for the assets formed by the actual investment of Party B and the intangible assets such as the brand formed by Party B’s operation and management.

2. When the Agreement has expired and the Parties have not renewed the Agreement, the Parties shall engage qualified evaluation institution to evaluate the fixed assets invested by Party B (the required fee shall be born by Party B). Party A shall pay Party B according to the evaluated value within one month after Party A has succeeded in disposing of the fixed assets legally or decided to operate by itself. Before the auction is successful, Party A shall not transfer the operating right to any third Party. At the same time, Party A shall reward Party B with the Scenic Area resource fee and the charge for use of the resource gained by Party A in the year before the expiration of the Agreement for the intangible assets such as the brand formed by Party B’s operation and management.

 

  

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Article X  Assignment of Rights and Obligations

 

1. To implement the Project development of the Agreement, Party B shall found and register a new company in Yongtai after the Agreement has come into force. The Parties agree that the new company founded by Party B shall succeed to and enjoy the rights and obligations regulated in the Agreement.

2. The Agreement has the same binding force to the modified entity, successor, assignee or the merged or split company, if any event including but not limited to the following may happen: change of name, change of legal representative, merger and split of company, adjustment of administrative division.

Article XI  Representations and Warranties

1. The Parties are civil subjects with equal status when they are signing the Agreement. The Parties sign the Agreement of their own will and have a full understanding of the terms and conditions of the Agreement.

2. There exists not any unfinished lawsuits or other legal procedures that is related to the Agreement or may be related to the Agreement and that may influence the execution of the Agreement or the future management or operation of Party B. There exists no danger or threat from such lawsuits or other legal procedures.

Article XII  Settlement of Disputes over the Agreement

1. If any disputes arise from or in connection with the present Contract, and the Parties cannot reach an agreement through consultation, either Party may file a lawsuit with Yongtai people’s court or Fuzhou intermediate people’s court according to the requirement of jurisdiction.

2. If such disputes or lawsuits over certain rights and liabilities arise, the fulfillment of other rights and liabilities prescribed in the Agreement shall not be influenced.

3. The making and fulfilling of the Agreement shall be in accordance with Chinese laws.

 

Article XIII  Liabilities for Breach of Contract

1. In case of breach of contract by Party A’s retrieving of the operating right of the Scenic Area, Party A shall assume the following liabilities:

1.1 to pay 150% of the evaluated value of the assets formed by the actual investment of Party B as penalty;

1.2 to compensate Party B for its direct financial loss.

2. If Party B has not paid the resource fee and the franchise fee on schedule according to the Agreement, it shall bear the penalty fee for overdue payment calculated by doubling the corresponding interest rates on bank loans.

 

  

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3. If either Party has broken the agreement by failure to fulfill all or part of its liabilities prescribed by the Agreement and caused loss to the other Party, the breaching Party shall bear the responsibility of loss compensation. If breach of contract has led to invalidity of the Agreement, the breaching Party shall bear the responsibility in the following way:

3.1 If it is Party B’s breach of contract that has led to invalidity of the Agreement, Party A shall have the right to terminate the Agreement in advance and retrieve the operating right of the Scenic Area, and Party B shall bear the compensation responsibility for Party A’s loss.

3.2 If it is Party A’s breach of contract that has led to invalidity of the Agreement, Party B shall have the right to demand Party A to promptly correct its wrong doings so as to continue its fulfillment of the Agreement. If Party A has failed to do that, Party B shall have the right to terminate the Agreement in advance, and Party A shall bear the same liabilities for breach of contract prescribed in Section 1 of this Article.

4. If for breach of contract by Party B the registered capital has not come in place in the time prescribed by the state, or Party B has failed to complete the development of and operate formally the construction project within five years according to the plan, which is prescribed in Point 1 of Section 1 of Article 3, Party A shall have the right to demand that Party B start the construction promptly, or Party A shall have the right to terminate the Agreement in advance and retrieve the operating right of the Scenic Area.

Article XIV  Supplementary Provisions

1. That either Party does not exercise or only partly exercises its rights prescribed in the Agreement does not mean that it abandons the rights.

2. If parts of the terms in the Agreement become invalid, it shall not influence the validity of the other terms in the Agreement.

3. Any supplement or amendment to the Agreement shall be made in written form and shall come into force once it is signed and chopped by the legal representatives of the Parties. Matters that are not covered by the present Agreement shall be worked out by both parties through consultations and provided for in supplementary agreements. All the above mentioned supplement, amendment and supplementary agreement shall be equally binding as the present Agreement.

4. The Agreement shall come into force once it is signed and chopped by the legal representatives of the Parties.

5. The present Agreement is done in sextuplicate originals, with three for each party, all originals being equally authentic.

IN WITNESS WHEREOF the parties hereto have hereunder set their hands on November 27, 2008 in Xiamen.

Party A: The People’s Government of Yongtai County

Address: 1 Xianfu Street Zhangcheng Towship Yongtai County Fujian Province

Legal Representative:

Party B: Hong Kong Yi Tat International Limited

Address:

Legal Representative:

 

 

7f10k2011a3ex10xx_china.htm

Exhibit 10.20

 

Development Agreement by and between

the People’s Government of Hua’an County and Hong Kong Yi Tat 

International Limited Relative to the Development of the Tourist 

Resource of Hua’an Tulou Cluster

Party A: The People’s Government of Hua’an County

 

Party B: Hong Kong Yi Tat International Limited

To promote the development of regional economy and speed up the exploitation of tourist resources in Hua’an County, in accordance with the Investment Intention Agreement signed on September 6, 2008, and on the principles of equality and mutual benefit, through amicable consultation, the Parties have made the Agreement on the cooperative development of the tourist resource of the world cultural heritage Hua’an Tulou Cluster.

Chapter I General Provisions

Article 1. The Agreement is signed on the principle of “Party A in charge of preservation of cultural relics and harmonization of the relationship with the third party including villagers within the Scenic Area, Party B in charge of the investment and management of the Scenic Area, and sincere cooperation and mutual benefit of both Parties”.

Article 2. The Project of Cooperative Development: Party A grants Party B the right to operate and manage the tourist resource of Hua’an Tulou Cluster and its core region. The cooperation duration of the Scenic Area development and the operation duration of the franchise item are the same, which is, 40 years beginning from the day when the Agreement is signed.

 

Article 3. Party A grants Party B the priority to operate and manage the tourist resource of Hua’an Xianzi Pool.

Article 4. The Parties shall work together to win the support of the relevant price administration department and re-appraise and re-fix admission fees of Hua’an Tulou Cluster and other scenic spots.

 

Article 5. The maintenance of the heritage shall be in strict accordance with the relevant procedure under the operational guidance of the world heritage protection.

 

  

  

  

 

Chapter II Party A’s Rights and Obligations

Article 6. Party A shall entrust Party B to collect the admission fees of Hua’an Tulou Cluster and other scenic spots which Party B enjoys the priority to develop.

Article 7. Party A shall use the fund won from the higher authorities in the name of the Scenic Area Project on especially for the Project and in accordance with the Project conditions.

Article 8. Party A shall establish an administration institution of Hua’an Tulou Cluster Scenic Area to be in charge of harmonizing various relationships.

Article 9. Party A shall be responsible to terminate all the original agreements and documents related to tourism development and operation within the Project zone and handle well the after-care work. Party A shall Protect Party B’s legal rights and interests against any violation.

Article 10. According to Party B’s investment plan and actual operation requirement, Party A shall provide land to Party B for construction of the supporting tourist facilities.

Article 11. During the cooperation period, Party A shall grant Party B the right to use the various infrastructures within the Scenic Area.

Article 12. If someone organizes abnormal farming or fishing activities in the existing or planned orchards, gardens, farmlands, or aqua farms within the Scenic Area so that the tourist landscape is damaged or the tourist operation is interrupted, Party A shall come forward promptly to stop them.

Article 13. Party A shall take effective measures to restore gradually the vegetation of the surrounding area of the Scenic Area and the lean-to mountain along the provincial roads to the Scenic Area.

Article 14. Within the Agreement term, unless the Agreement has to be terminated in advance for the reason of the national law or policy, Party A shall not cancel the Agreement unilaterally and take back the operating right.

Chapter III Party B’s Rights and Obligations

Article 15. Party B has the right to operate the Scenic Area independently according to law and decide independently the development models for the Scenic Area, the various operating items and other tourist service items within the Scenic Area. According to the covenants of the Agreement, Party B shall be in charge of the further investment, construction, planning and promotion of the Scenic Area. Party B shall operate independently at its own risk, be responsible for its own profits and losses and handle its own creditor's right and debt.

 

  

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Article 16. Party B shall give a prompt notice to Party A when it mortgages and pledges its rights and interests under the Agreement.

Article 17. When the Agreement has expired, if Party A intends to continue managing the Scenic Area in the form of management by entrustment, under the same conditions, Party B shall have the priority to renew the Agreement.

Article 18. Party B shall accept the authorization and entrustment of Party A to operate and manage the business of the admission fee of the Scenic Area.

Article 19. Within the three years starting from the day of the signature of the Agreement, without the consent of Party B, Party A shall not grant the tourist resources which Party A has according to the Agreement granted Party B the priority to develop to a third party for development.

Article 20. Party A has the right to supervise Party B to use the appropriated fund won through the Project application especially for the Project.

Article 21. Party B shall be in charge of sanitary service and environmental protection of the Scenic Area.

Article 22. Party B shall construct public facilities, supporting facilities, scenic spot facilities and supporting tourist business facilities within the Scenic Area according to the demands of tourism development.

Article 23. Within the one month starting from the day of the signature of the Agreement, Party B shall take over the running of the Scenic Area all-sidedly.

Article 24. Within two months after taking over the running of the Scenic Area, Party B shall make a phase-I investment plan of the Project. When taking over the running of the Scenic Area, Party B shall purchase from Party A the tourist service center, the parking lot and other assets at the entrance of the Scenic Area. The minimum price of the purchase shall be the construction cost price of RMB 8,000,000 even agreed on by both Parties.

Article IV Disposal of Assets

Article 25. When the Agreement has expired or both Paries have agreed to terminate the Agreement in advance, if it is required by Party A, the Parties shall make an inventory of the supporting Scenic-Area-based business assets invested on and operated independently by Party B during the operating period, and engage a qualified evaluation institution to evaluate the assets. Party A shall purchase to own the assets according to the evaluated value.

Article 26. When the Agreement has expired or both Parties have agreed to terminate the Agreement in advance, Party A shall purchase all the assets invested on and constructed by Party B for the development and operation of the Scenic Area.

 

  

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Article 27. If the Agreement has to be terminated in advance due to a great change in national laws or policies, Party A shall reimburse Party B in the following way: in terms of all the fixed assets and other supporting operating assets constructed by Party B for the development and operation of the Scenic Area, Party A shall own the assets after paying Party B according to the evaluated value of the assets.

Chapter V Liabilities for Breach of Contract

Article 28. If Party A breaks the Agreement unilaterally and takes back the cooperative management right of the Scenic Area, Party A shall pay 500% of evaluated value of the assets formed by the actual investment of Party B as penalty

Article 29. If Party B fails to pay Party A the payables on schedule according to the covenants of the Agreement, Party B shall bear the penalty fee for overdue payment calculated by doubling the corresponding interest rates on bank loans.

Article 30. If either Party has broken the agreement by failure to fulfill all or part of its liabilities prescribed by the Agreement, it shall be promptly corrected. If it has caused loss to the other Party, the breaching Party shall bear the reimbursement responsibility.

Article 31. If Party A fails to harmonize the relationship between villages, residents and work units within the Project zone and the relevant interest allocations so that their behavior has led to the loss in Party B’s operation, Party A shall compensate Party B for its direct loss.

Chapter VI Other Provisions

Article 32. Party A shall rearrange the work of the staff in its original tourism development company by itself.

Article 33. After Party B has established a Project company according to Article 23 of the Agreement, the new company shall succeed to the rights and obligations regulated in the Agreement. The behavior of the new company shall be regarded as Party B’s behavior.

Article 34. The Agreement has the same binding force to the modified entity, successor, assignee or the merged or split company, if any event including but not limited to the following may happen: change of name, change of legal representative, merger and split of company, adjustment of administrative division.

Article 35. That either Party does not exercise or only partly exercises its rights prescribed in the Agreement (except the priority right) does not mean that it abandons the rights.

 

Article 36. If part of the terms in the Agreement becomes invalid, it shall not influence the validity of the other terms in the Agreement.

 

  

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Chapter VII Supplementary Provisions

Article 37. The Parties are civil subjects with equal status when they are signing the Agreement. The Parties sign the Agreement of their own will and have a full understanding of the terms and conditions of the Agreement.

Article 38. If any disputes arise from or in connection with the present Contract, and the Parties cannot reach an agreement through consultation, either Party may file a lawsuit with the people’s court of Gulou District, Fuzhou or the people’s Court of Hua’an County, Zhangzhou according to the requirement of jurisdiction.

Article 39. Matters that are not covered by the present Agreement shall be worked out by both parties through consultations and provided for in supplementary agreements. All the supplement, amendment and supplementary agreement shall be equally binding as the present Agreement.

Article 40. The Agreement shall come into force once it is signed and chopped by the legal representatives of the Parties.

 

Article 41. The present Agreement is done in sextuplicate originals, with three for each party, all originals being equally authentic.

Party A: The People’s Government of Hua’an County

Legal Representative:

Party B: Hong Kong Yi Tat International Limited

Legal Representative:

Time: 12/26/2008

Place: Hua’an County, Fujian Province

  

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Supplementary Agreement (I)

 

Party A: The People’s Government of Huaan County

 

Party B: Hong Kong Yi Tat International Limited

According to Article 6, Article 18, Article 27 and Article 39 of Development Agreement by and between the People’s Government of Hua’an County and Hong Kong Yi Tat International Limited Relative to the Development of the Tourist Resource of Hua’an Tulou Cluster, through amicable consultations, both parties agree to supplement the following articles:

 

Article 1. Party B shall turn in part of the admission fee income of the last month to Party A before the 10th of each month in the following proportion:

 

1. When the admission fee of Hua’an Tulou Cluster Scenic Area is not less than RMB 60 per person (including RMB 60 per person), Party B shall pay Party A in the following proportions: 16% for the first five years, 20% for the second five years, 23% for the third five years, 25% for the fourth five years, 28% for the fifth five years and 30% for the years beginning from the twenty-sixth year.

2. When the admission fee of Hua’an Tulou Cluster Scenic Area is less than RMB 60 per person, the proportions mentioned above shall be decreased by 2% respectively, that is, 14% for the first five years, 18% for the second five years, and so on.

3. During the Agreement term, in case of the adjustment of the admission fee of the Scenic Area, the income proportion of Party A shall be adjusted according to the above covenants since the adjustment day of the admission fee of the Scenic Area.

Article 2. In terms of the scenic spot developed independently by Party B within the Scenic Area, Party A shall share part of its income as the resource use fee of the Scenic Area in the following proportion: 5% for the first five years, which shall be increased by 1% every two years after that, till it has come to 10%, the highest proportion not to be increased any more.

Article 3. The taxes and fees related to the admission fee shall be paid by Party B as a whole, and then both Parties shall bear them together according to the proportion of sharing the income.

Article 4. Except the income belonging to Party A according to the above covenants, the rest of the income shall be enjoyed by Party B.

Article 5. Party A has the right to supervise the management of the admission fee.

Article 6. In case of the situation mentioned in Article 27 of Development Agreement by and between the People’s Government of Hua’an County and Hong Kong Yi Tat International Limited Relative to the Development of the Tourist Resource of Hua’an Tulou Cluster, Party A shall reimburse Party B for its expenses in market planning, promotion and publication.

Article 7. Starting from the day when Party B takes over the operation and management of the Scenic Area, it shall give Party A 3,000 admission tickets for free each year for the visitor reception of Party A (including its subordinate units and departments).

Party A: The People’s Government of Hua’an County

Legal Representative:

Party B: Hong Kong Yi Tat International Limited

Legal Representative:

 

Time: 12/26/2008

Place: Hua’an County, Fujian Province

 

  

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Supplementary Agreement (II)

Party A: The People’s Government of Hua’an County

 

Party B: Hong Kong Yi Tat International Limited

According to Article 3 and Article 19 of Development Agreement by and between the People’s Government of Hua’an County and Hong Kong Yi Tat International Limited Relative to the Development of the Tourist Resource of Hua’an Tulou Cluster, whereas Party B intends to develop Zhuzhong Garden and Wanlisan Building at the same time of taking over the running of the Scenic Area of Hua’an Tulou Cluster, through amicable consultations, both parties agree to supplement the following articles:

 

Article 1. According to the itinerary confirmed by both Parties and the requirement for the improvement of the environment around Wanlisan Building, Party A shall be responsible to improve the environment around Wanlisan Building and that of the itinerary within the three months after Party B has taken over Hua’an Tulou Cluster Scenic Area.

 

  

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Article 2. Party B shall develop Zhuzhong Garden and Wanlisan Building within the year of 2009 and be responsible for the tourist construction and management of Zhuzhong Garden and Wanlisan Building. Party A shall be responsible to examine and approve and play a supporting role.

Article 3. Party A shall share the admission fee income of Zhuzhong Garden and Wanlisan Building in the following proportion: 10% for the first 5 years, which shall be increased by 1% every two years after that, till it has come to 15%, the highest proportion not to be increased any more (e.g., 11% for the seventh year, 12% for the ninth year, and 15% for the fifteenth year and the years later on).

 

Party A: The People’s Government of Hua’an County

Legal Representative:

Party B: Hong Kong Yi Tat International Limited

Legal Representative:

Time: 12/26/2008

Place: Hua’an County, Fujian Province

 

 

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