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1 Joint ventures must implement the principle of economizingon land in their use of sites.A joint venture shall submit an application for the use of a siteto the local land administration authority at municipal(county) level and shall, upon approval from the saidauthority, obtain the right to use the site through theconclusion of a contract.The contract shall specify the area, location and purpose ofthe site, the term of the contract, the fee for the right to usethe site (hereinafter referred to as the site use fee), the rightsand obligations of the parties to the contract, and the penaltyfor breach of contract.If the right to use the site needed by a joint venture is alreadyowned by the Chinese party, it may contribute such right asits investment in the joint venture.The amount appraised for such right shall be equivalent tothe site use fee payable for obtaining the right to the use of asite of the same kind.The rate for the use of a site shall be determined by thepeoples government of the province, autonomous region ormunicipality directly under the Central Government wherethe site is located in consideration of such factors as the 2 purpose and geographical and environmental conditions ofthe site, expenses for land requisition, demolishing of thehouses on the site and relocation of the residents, and thejoint ventures requirements in respect of the infrastructure,which shall be filed with the Ministry of Foreign Trade andEconomic Cooperation and the State Land administrationauthority for the record.5The site use fee shall not be adjusted within the first five (5)years of the commencement of land use.3Thereafter, when adjustment is necessitated by economicdevelopment and changes in supply and demand and ingeographical and environmental conditions, the interval inbetween such adjustment shall not be less than three years.The site use fee contributed by the Chinese party as itsinvestment may not be adjusted during the term of contract.If its right to the use of a site is obtained pursuant to Article 1above, the joint venture shall pay the site use fee per annumfrom the commencement of the use of the site during theterm of site use as specified in the contract.For the first calendar year, a half-year fee shall be paid if thesite has been in use for more than six months the site use fee shall be exempted if the use of the site is less 3 than six months.During the term of the contract, if the site use fee is adjusted,it shall be paid at the new rate beginning from the year ofadjustment.In addition to obtaining the site use right pursuant to theprovisions of this chapter, joint ventures may acquire suchright in accordance with the relevant stipulations of the State.Land to be used by a wholly foreign-owned enterprise shallbe arranged by the local peoples government at county levelor above in the light of the local conditions after it has beenverified by the said government.30A wholly foreign-owned enterprise shall, within thirty (30)days of the issuance of its business license, present theapproval certificate and the business license to the landadministration authority of the local peoples government atcounty level or above, go through the land use proceduresand collect the land use certificate.The land use certificate shall be the legal proof for a whollyforeign-owned enterprise to use the land.During the term of operation, the wholly foreign-ownedenterprise may not assign its land use right without approval.When collecting the land use certificate, a wholly 4 foreign-owned enterprise shall pay the land use fee to thelocal land administration authority.If a land to be used by a wholly foreign-owned enterprise hasbeen developed, it shall pay the land development fee.The land development fee mentioned in the precedingparagraph includes the expenses for land requisition,demolishing of the houses on the land and relocation of theresidents and the expenses involved in the building of theinfrastructure for the wholly foreign-owned enterprise.The land development fee may be collected by the landdevelopment unit in one lump sum or by yearly installments.Where the land used by the wholly foreign-owned isundeveloped, the wholly foreign-owned enterprise maydevelop the land by itself or commission relevant Chineseunits to develop it.The land use and land development rates to be collectedfrom wholly foreign-owned enterprises shall be inaccordance with the relevant regulations of China.The term for land use by a wholly foreign-owned enterpriseshall coincide with the approved term of its operation.In addition to obtaining the land use right pursuant to theprovisions of this chapter, wholly foreign-owned enterprises 5 may acquire such right pursuant to other regulations ofChina.535151501. Party A hereby grants to Party B a parcel of land, LotNo.535 located to the north of Xin Cun Road and to the westof Dong Feng Road, Jiading District, Shanghai and coveringan area of 15,150 square meters.The exact area, location and four boundaries of the Land areshown on the map attached to this Contract as Appendix I,which map has been affirmed through signature of bothparties.20303,00050Party B shall pay Party A a Land Use Rights grant fee (theLand Grant Fee) of US $ 20 per square meter for a total ofThree Hundred and Three Thousand U.S.Dollars (US$303,000) to obtain the Land Use Rights to the Land for aterm of fifty (50) years (the Land Use Term), whichcommences from the 60th day of the execution of thiscontract.20303,00050Party B shall pay 20 US Dollars for every square meters ofland to Party A as the transference price on the land use right(land transference price), the total of which shall be303,000 US Dollars, to obtain the right to use such land for50 years (land use term). 6 However, the total amount of the Land Grant Fee shall beadjusted according to the actual area of the Land measuredand confirmed by Party A.1In addition, Party B shall pay Party A a land use fee (theLand Use Fee) for the Land of RMB 1.00 per square meterper year during the Land Use Term.6301231The Land Use Fee shall be payable in two (2) semi-annualinstallments, with the first installment due by June 30 and thesecond installment due by December 31 each year.71Party B shall pay Party A, within seven (7) days after theexecution of this contract, Ten Thousand U.S.Dollars (US$ 10,000) as a deposit (the Land Grant Fee), which shallconstitute part of the payment of the Land Grant Fee payableby Party B under this contract.60293,000Party B shall pay Party A, within sixty (60) days after theexecution of the contract, the remaining amount of the LandGrand Fee of Two Hundred and Ninety Three Thousand USDollars (US $293,000) in full.1The Land Grant Fee shall cover all payments (other than theLand Use Fee of RMB 1.00 per square meter per year as setforth in Article 3 above) that Party B will be required to pay inorder to use the Land. 7 If Party B fails to pay the Land Grant Fee on time, Party Ashall have the right to terminate this contract and claimdamages from Party B for breach of contract30provided that prior to the termination of this contract andclaim for damages, Party A shall provide Party B with awritten notice of Party Bs failure to pay the Land Grant Feeand Party B shall have thirty days from the receipt of Party As notice to cure such failure.If Party B intends to postpone the payment of the Land GrantFee, a written application shall be made to Party A beforesuch payment is due.0.3%Where Party A consents to such delay, a 0.3% per day latepayment penalty shall be charged.7Party B shall file an application with the Shanghai MunicipalReal Estate Registration Office (the Registration Office) forinitial registration of the Land Use Rights within seven (7)days after having paid the Land Grant Fee in full and beingissued a receipt in respect thereof.30The Registration Office shall issue to Party B a ShanghaiMunicipal Real Estate Title Certificate within thirty (30) daysafter its acceptance of Party Bs filing of the said registration.The ownership of the Land, for which the Land Use Rights 8 are granted, still belongs to the State.The State shall retain, over the Land, its judicial power, theadministrative power and other powers granted by law, aswell as other rights and interests which are necessitated bypublic interest.The Shanghai Municipal Peoples Government retains thepower of urban planning and design in respect of the Land.When the Land Use Term is due for renewal, the theneffective urban planning must be complied with.The government shall not compensate Party B forconsequences b
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