Regulation of the Minister of Forestry of Indonesia

No. : P.34/MENHUT-II/2009

Procedures and Requirements of The Alienation of License Timber Forest Products Utilization

CHAPTER I GENERAL PROVISIONS Article 1 License timber forest products utilization is given license to utilize wood forest products in the form of natural forests or in forest plantations in the production. Alienation of the business license Timber Forest Product Utilization (IUPHHK) is the alienation of legal actions undertaken by IUPHHK holders, either by sale to another party IUPHHK or takeover by most or all shares in companies that form IUPHHK BUMSI (Private companies Indonesia). Fiduciary is the transfer of ownership of an object on the basis of trust with the stipulation that the object was transferred ownership rights remain in control of the owner of the object. Fiduciary assurance is guaranteed the right to move objects that either tangible or intangible, and it does not move, especially buildings that can not be burdened with liability rights as referred to in Law No. 4 of 1996 on the Rights of dependents who remain in control of fiduciary providers, as collateral for repayment of certain debts, which gives priority status to the recipient other fiduciary of the creditors. CHAPTER II ASSIGNMENT LICENSE Article 2 IUPHHK in production forests may be assigned as follows: a. IUPHHK on natural forests; b. IUPHHK ecosystem restoration; c. IUPHHK in Industrial Forest Plantation (HTI); or d. IUPHHK on the Rehabilitation of Forest Plantations (HTHR). Article 3 IUPHHK holders referred to in Article 2 can transfer his permission, after obtaining written approval from the Minister.

Article 4 IUPHHK Assignment referred to in Article 2, may include: e. f. trading business license Timber Forest Products Utilization of permit holder to another party; acquisition of the majority of the shares if the sale of shares above 50% (fifty percent) of shares purchased; or g. acquisition of all shares in the company's business license holder timber forest products utilization given to BUMSI, which resulted in the shift of control over the company. CHAPTER III REQUIREMENTS AND APPLICATION PROCEDURES Article 5 Request approval IUPHHK alienation referred to in Article 4, submitted by the Board of Directors or the management company IUPHHK to the Minister, with copies to the Director-General and the company or individual who will receive the alienation. Article 6 (1) Application IUPHHK sale referred to in Article 4, point a, equipped with the following requirements: h. AGM decisions made before a Notary that contains the approval of a plan for IUPHHK sales to other parties if the holder is a BUMSI IUPHHK; or Members Meeting which contains the approval of the sales plan IUPHHK known by the relevant local builder / local Cooperative Agency IUPHHK if the holder is Cooperatives; or Letter Statement made before a Notary containing IUPHHK sales plan to another party if the holder is an individual IUPHHK; i. j. IUPHHK has walked at least 5 (five) years from the date of its adoption; Not have arrears PSDH and or DR, as evidenced by a certificate of arrears-free and / or DR PSDH published competent authority; k. Letters statement made before a Notary by legal entities or individuals who would buy IUPHHK, which contains the sale and purchase of IUPHHK: 1. will not hurt the company and employees IUPHHK; 2. does not violate the provisions of Law No. 5 of 1999 on the Prohibition of Unfair Business Competition, which is that IUPHHK trading is not a : a) prohibited agreement; b) prohibited activities; c) dominant position. 3. will use the technical staff of forestry appropriate Forestry Ministerial Regulation No. P.58/Menhut-II/2008 about Competency and Certification of Technical Manpower Production Sustainable Forest Management. 4. able to comply with laws and regulations. 2

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Letters statement made before a Notary by the holders IUPHHK containing the holders IUPHHK: 1. not in the bankruptcy petition filed to the Commercial Court. removal of sanctions IUPHHK. 2. not in giving a warning by the Ministry of Forestry, administrative violations related to the

m. In terms of buying and selling requests made by holders of the HTI IUPHHK who obtained credit facilities, will require approval from the creditors first. n. Copy of certificate of establishment and its amendment of the company that will buy and / or copy of ID card for individuals; o. Photocopy of the decision regarding the provision of IUPHHK. (2) The application IUPHHK sale referred to in paragraph (1), can be 2 (two) times during the license validity period, and can be 2 (two) times when after being given an extension. Article 7 (1) IUPHHK the joint venture plantations that receive loans in accordance DR credit agreement, could sell his IUPHHK requirements: a. AGM decisions IUPHHK joint venture plant in the forest made before a Notary which contains the approval of a plan for the sale of forest plantations IUPHHK on to other parties; b. AGM decisions of state-owned holding companies (Minister for SOEs) which contains the approval of a plan for the sale of forest plantations IUPHHK to others; c. AGM decisions of the private shareholder company that made before Notary containing the approval of a plan for the sale of forest plantations IUPHHK to others; d. Letters statement made before a Notary by legal entities or individuals who would buy IUPHHK in plantation forests, which contains the sale and purchase of IUPHHK: 1. will not hurt the company and employees IUPHHK company. 2. does not violate the provisions of Law No. 5 of 1999 on the Prohibition of Unfair Business Competition, which is that trading IUPHHK is not a: a) prohibited agreement; b) prohibited activities; c) dominant position. 3. will use the technical staff of forestry appropriate Forestry Ministerial Regulation No. P.58/Menhut-II/2008 of Competency and Certification of Technical Manpower Production Sustainable Forest Management. 4. able to comply with laws and regulations. e. Paid off all loans according to credit agreement DR. f. Copy of certificate of establishment and its amendment of the company that will buy and / or copy of ID cards for individuals. g. Photocopy of the decision regarding the provision of IUPHHK.

(2) Part sale of SOEs from the plantations IUPHHK of joint venture referred to in paragraph (1), shall be followed in accordance with the laws and regulations in force. Article 8 Request the acquisition of shares or acquisition of IUPHHK company referred to in Article 4, item b and c, provided the following requirements: a. AGM decisions IUPHHK holding companies, which includes approval of the acquisition of most or all shares in the company IUPHHK. b. Not have arrears PSDH and or DR, as evidenced by a certificate of arrears-free or DR PSDH and published competent authority. c. Letters statement made before a Notary of limited liability companies or individuals who will take over, which includes the acquisition or the acquisition of shares in the company IUPHHK: 1. not adversely affect limited liability companies, minority shareholders, and employees of limited liability IUPHHK company. 2. does not violate the provisions of Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition, namely that the acquisition of shares or the acquisition is not a: a) prohibited agreements; b) prohibited activities; c) dominant position. 3. will use the technical staff of forestry appropriate Forestry Ministerial Regulation No. P.58/Menhut-II/2008 of Competency and Certification of Technical Manpower Production Sustainable Forest Management. 4. able to comply with laws and regulations. d. Letters statement made before a Notary of the holders IUPHHK containing that: 1. IUPHHK company was not in the bankruptcy petition filed to the Commercial Court. 2. IUPHHK company was not in the provision of a warning by the Ministry of Forestry, administrative violations related to the removal of sanctions IUPHHK. 3. shares in companies that filed the petition IUPHHK acquisition or acquisitions are not in debt or used as collateral when it is used as collateral in debt must obtain permission from the relevant creditors. e. Copy of certificate of establishment and its amendment of the company that will take over / acquire and photo copy of identity card or for individuals. f. Photocopy of the decision regarding the provision of IUPHHK. Article 9 (1) Based on the alienation IUPHHK request copies referred to in Article 5, the Director General shall conduct such research paper on the request. 4

(2) If the application referred to in Article 6 or Article 7 does not meet or are not equipped with any or all of the requirements, the Director General shall notify the applicant to complete the requirements that have not been fulfilled within a period of 60 (sixty) working days from receipt of the notice. (3) In case the applicant does not meet or do not complete the requirements after receiving the notice from the Director General referred to in paragraph (2), the Director General on behalf of the Minister issued a letter of rejection. Article 10 If the application IUPHHK sale referred to in Article 6 has been filled / completed all the requirements, the Director General submit the results of the research paper application to the Minister accompanied with a draft Decree of the Minister of the holders of the company renaming IUPHHK. Article 11 If the application acquisition of shares or acquisition referred to in Article 8 has been filled / completed all the requirements, the Director General submit the results of the research paper application to the Minister accompanied by the concept of the acquisition agreement, or acquisition of shares in the company concerned IUPHHK. Article 12 (1) After approval of the Minister of the sale and purchase, the acquisition of shares or the acquisition IUPHHK referred to in Article 10 and Article 11, IUPHHK holder s name can be changed / modified by two causes: a. change the name without changing the legal entity holding a permit; or b. change of name to change / replace the permit holder legal entity. (2) IUPHHK holders who make a change or replacement of the name referred to in paragraph (1), must make a change of name listed in IUPHHK, equipped with the following requirements: a. Deed of sale and purchase, the acquisition of shares or acquisition made before a notary; b. Deed Changes or Replacement Company Name which was ratified by the Minister of Justice and Human Rights. (3) The petition has met the completeness requirements referred to in paragraph (3) The Minister issued Decision on the amendment or replacement Name (Addendum). Article 13 In the case of IUPHHK issued by the Governor or the Regent, alienation IUPHHK petition filed with the Governor or Regent in accordance with the requirements provided in Article 6, Article 7 and Article 8.

Article 14 In terms of future eligibility in mind that buying and selling requests IUPHHK as referred to in Article 6 and eligibility requests acquisition of shares or acquisition referred to in Article 8 be fraudulent or provide information that is untrue, then the holders of appropriate sanctions IUPHHK legislation that applicable. Article 15 (1) Crops planted on HTI IUPHHK holder is a company asset and can be used as collateral through a fiduciary warranty along business license is still valid. (2) Fiduciary assurance referred to in paragraph (1), is a follow-up appointment (acesoir) of a basic agreement or credit agreement, which created an obligation for the parties to fulfill an achievement. (3) The loan terms in the basic agreement or credit agreement as referred to in paragraph (2), adjusted in accordance with the results of the analysis of the current provisions in banking. (4) Fiduciary guarantees in accordance with Law No. 42 of 1999 on Guarantee fiduciary.