Ginseng-growing Land Lease Agreement
Heilongjiang
Province Muling Forestry Bureau
Yanbian
Huaxing Ginseng Industry Co., Ltd.
June 12,
2005
To expand
the area of ginseng-growing land according to the Green Ginseng Growing and
Processing Program approved by the state of Yanbian, Heilongjiang Province
Muling Forestry Bureau (the “Bureau”) and Yanbian Huaxing Ginseng Industry Co.,
Ltd. (the “Company”) have agreed that the Bureau will lease a total of 700
square hectares of natural forest land with low soil quality and wasteland to
the Company for 20 years from 2005 to 2025 for growing ginseng. The details of
this Agreement are as follows:
|
A.
|
Area of Land to Be Leased for
Growing Ginseng and Duration of Use. The duration of the use of
assigned land is from 1 to 5 years. The Bureau will provide the Company
approximately 700 square hectares of forest land to grow ginseng for 20
years from 2005 to 2025. The Bureau agrees to provide the Company at least
30 square hectares of forest land each
year.
|
|
B.
|
Authority
and Responsibility
|
|
a).
|
The Power and Responsibility of
the Bureau
|
|
|
1.
|
The
Bureau will handle the application for using the land for the Company. The
Company will pay the land rental fee before the application. The amount of
rental fee will be based on the lease or agreement signed by both parties
each time.
|
|
|
2.
|
The
land approved to be leased to the Company can only be used for growing
ginseng and nothing else, otherwise the Bureau would be entitled to cancel
the Agreement, and the Company would have to indemnify for the Bureau’s
loss. If the Bureau could not provide the land on time in accordance with
the Agreement and hinder the Company’s ginseng business, the Bureau would
have to indemnify for the Company’s
loss.
|
|
|
3.
|
The
land has to be restored the second year after it has been used for growing
ginseng. The Bureau will provide the nursling trees, and the Company will
pay for the labor of planting and maintenance. When the land is returned
to the Bureau, the newly planted trees on it have to reach a 90% survival
rate. If a 90% survival rate cannot be reached, the Company will be
charged CNY$3 for every tree that
dies.
|
|
|
4.
|
When
the land is in use by the Company, the Bureau will provide necessities,
such as accommodation, water, electricity, and communication services. The
Company will pay for these necessities by its
own.
|
|
|
5.
|
During
effective period of the Agreement, the Bureau will cooperate with and
support the Company’s security staff. The Bureau will not charge the
Company for the temporary stay of its management and recruitment staff.
The Company shall report the staff information to the local police
department as soon as they arrive to maintain the security of the
area.
|
|
b).
|
The Power and Responsibility of
the Company
|
|
|
1.
|
The
Company will pay the rent to the Bureau as specified in the
Agreement.
|
|
|
2.
|
The
Bureau will provide the area of land the Company needs every year. If the
Bureau could not provide the land on time, the Bureau would have to
indemnify for the Company’s loss, which will be deducted from the
rent.
|
|
|
3.
|
The
Bureau will ▇▇▇▇▇▇▇▇ the approved land by the end of March each year and
give it to the Company after the timber delivery is completed. The Bureau
will give the wood, trunks and branches less than 10-cm diameter to the
Company to be used as the ginseng fertilizer. If more wood fertilizer is
needed, the Company can purchase it at the local area. The Bureau will
help the Company handle the
purchasing.
|
|
|
4.
|
Base
on the need of the Company, the Bureau will sell the Company a limited
quantity of wood for building lodges for
accommodation.
|
|
|
5.
|
The
Company must comply with the fire-preventing regulations, forestry
policies, and the national laws.
|
|
|
6.
|
The
Company is entitled to grow ginsengs and build lodges for accommodation in
the approved land as it plans.
|
|
C.
|
Miscellaneous
Issues
|
|
a).
|
The
Agreement is effective for 20 years from March, 2005 to the end of 2025.
If there is any change in national policy that is related to the content
of this Agreement, the Agreement shall make necessary change in accordance
with the new national policy.
|
|
b).
|
The
percentage of arable area the Bureau assigns to the Company has to be at
least 90%. If less than 90%, the Bureau must add the shortage along with
the yearly quota to the Company the next
year.
|
|
c).
|
The
Agreement can be updated or revised with the consent from both parties.
The revised agreement has the same legal power as this
Agreement.
|
|
d).
|
Four
copies of the Agreement are provided. Two copies are given to each
party.
|
|
Heilongjiang
Province Muling Forestry Bureau
|
Yanbian
Huaxing Ginseng Industry Co., Ltd.
|
|
(With
Official Chop)
|
Liu
Changzhen (With Signature)
|