Mortgage Agreement
  
                             Number: Shen Dan(2009)Nian Wei Dai Bao Zi (265-2)

Mortagee (Party A): Shenzhen Branch of Industrial Bank Co., Ltd.
Address:___________________________________________   

Mortagor (Party B):
 
Party B -1: Bu Falin  （ID card No.:）

Borrower (Party C): Feigeda Electronic (SZ) Co., Ltd.
Address:
Floor 3, Building C6, Fuyuan Industrial Park, No.111, Zhoushi Road, Xixiang
Subdistrict, Bao’an District, Shenzhen

Entrustor of the Entrust Loan (Party D):  
Shenzhen Small & Medium Enterprises Credit Guarantee Centre Co., Ltd

Address: 
Floor 16, Pingan Bank Building, No.1099, Shennan Zhong Road, Futian District,
Shenzhen

Party A, Party C and Party D entered into the Entrusted Loan Agreement numbered
“Shen Dan (2009) Nian Wei Jie Zi (265)” pursuant to which, Party D entrusted
Party A to release a loan to Party C.

Per Party C’s request, Party B hereby agrees to provide to Party A and Party D
the property of which Party B is entitled to dispose to serve as a mortgage
guarantee. Party A, Party B, Party C and Party D enter into this Agreement after
reaching a consensus through negotiations.

Article 1 Collateral
Party B mortgaged the property of which Party B is legally entitled to the
ownership or disposal rights. See the relevant information of the collateral
mortgage in Article 21 regarding the list of collateral: √Schedule 1 / Schedule
2 (the option marked ‘√’is chosen)

Article 2 Scope Covered by the Mortgage
1.
The Parties agree, that the total mortgage amount of the collateral mortgage is
the principal of the loan under the Entrusted Loan Agreement with the amount of
RMB1,400,000.00, and interest, liquidated damages, delayed repayment interest,
and all the cost for realization of the creditor’s rights (including but not
limited to insurance fee, attorney fee, litigation fee, auction fee, execution
fee and assessment fee), including but not limited to all the other amounts
Party A and Party D is entitled to claim against Party C. The said amount as
agreed shall not be deemed as the basis for value appraisal in the event of
disposal of the collateral mortgage by Party A and Party C or restriction on the
exercise of the mortgage rights by Party A and Party D. The mortgage amount
shall be the value actually realized by the collateral. Party A and Party D
shall be entitled to a priority repayment from the value actually realized by
the collateral.

 
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2.
In the event of Party C’s failure of performance of the obligations under the
Entrusted Loan Agreement which has caused damages to Party A and Party D, both
Party A and Party D shall be entitled to immediately convert the value of the
collateral into cash by auction or sale of the collateral or directly offset the
debts owed to Party A and Party D.

Article 3 Mortgage Term
The mortgage term is starting from the effective date hereof until the expiry of
the statute of limitation of the creditor’s right under the Entrusted Loan
Agreement.

Article 4 Validity
1.
In the event of Party B’s (including its successor and devisees) being a natural
person, the validity hereof shall not be affected by Party B’s material body or
property accident (such as death, being declared as death, missing, being
declared as missing, loss of civil capacity for acts and suffering from natural
disasters). In the event of Party B’s being a legal person or in the form of
other organization, the validity hereof shall not be affected by Party B’s
merger, division, reconstruction, transformation with the stock system and
change of the affiliation relationship.

2.
Both Party A and Party D are entitled to directly exercise the mortgage right
within the scope covered the mortgage hereunder, whether Party A and Party D’s
creditor’s rights are secured by any other guarantees.

Article 5 Insurance
1.
Party B shall take out the insurance product designated by Party A and Party D
on the collateral. In the event of an existing insurance on the collateral, the
principal beneficiary shall be changed to Party D. The insured amount shall not
be less than the abovementioned net appraisal value and the insurance term shall
not be shorter than the mortgage term (the initial term of the insurance term
shall be starting from the effective date of the mortgage agreement until the
second month after the due date of repayment). The insurance policy shall
specify Party D as the principal beneficiary of the insurance compensation and
shall not contain any restrictive provision damaging Party D’s rights or
interest.

2.
In the event of Party C’s failure of performance of due repayment obligation,
Party B shall promptly renew the insurance policy; and in the event of Party B’s
failure to do so, Party D shall be entitled to conduct the insurance renewal
instead and the insurance premium shall be paid by Party C.

 
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3.
The insurance policy and other insurance certificates shall be under the custody
of Party D during the mortgage term.

4.
During the mortgage term, Party B shall not suspend the insurance for any
reasons; if so, Party D shall be entitled to take out the insurance instead and
the insurance premium shall be paid by Party D.

5.
In the event of loss of the collateral mortgage covered by the insurance or
value decrease of the collateral mortgage due to the third party, the insurance
money or the damages shall be served as collateral mortgage and deposited into
the accounts designated by Party A and Party D. Party B shall not use the said
amounts throughout the insurance term.

6.
The remaining insurance money after deducing the amounts payable to Party A and
Party D by Party B will be returned to other beneficiaries.

7.
This article is also applicable to insurance formalities under the circumstance
where Party B increases relevant mortgage or provides a new mortgage per Party A
and Party D’s request.

Article 6 Obligations of Party B
1.
Party B is responsible to preserve the collateral mortgage throughout the
mortgage term. During the said term, Party B shall well preserve the collateral
mortgage and have the obligation to guarantee security and completeness of
collateral mortgage including repair and maintenance thereof and assist and
cooperate with Party D’s examination on the collateral mortgage in any time. In
the event of damage due to improper management, Party B shall restore the
original status of the collateral mortgage or provide other collateral mortgage
per the requests of Party A and Party D.

2.
Party B shall transfer to Party D the original of ownership certificate of the
collateral mortgage or the original of the right voucher of the mortgage upon
the effective date hereof. The original of ownership certificate of the
collateral mortgage or the original of the right voucher of the mortgage shall
be under the custody of Party D throughout the mortgage term.

3.
Under the circumstance where Party B disposes of the collateral mortgage by
means of transfer, donation, contracting, investment in equity and in other
ways, written consent of Party A and Party D is required and Party B shall
provide according guarantee and/or repay to Party A in advance the debts within
guarantee scope with the amounts from disposal of the collateral mortgage or
submit such amounts to the third party as designated by Party D for escrow.

4.
Under the circumstance where the price of the transfer of the collateral
mortgage by Party B is so apparently lower than its value that it is not
sufficient to fulfill the mortgage, Party A and Party D are entitled to require
Party B to provide according supplementary mortgage to offset the value gap
between the said price and the loan mortgaged; if Party B fails to or is
unwilling to provide the supplementary mortgage, the said transfer transaction
shall not be conducted.

 
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5.
In the event of such an apparent value decrease of the collateral mortgage that
it is sufficient to threaten Party A and Party D’s rights and interest, Party B
shall restore the value of the collateral mortgage or provide supplementary
mortgage with the value equivalent to the decrease value within 30 days upon the
request of Party A or Party D.

6.
In the event of an objection to ownership, disposal rights of the collateral
mortgage or the right of priority repayment hereunder as raised by the third
party during the mortgage term, Party B shall be responsible for any and all the
results and liability and to indemnify and hold harmless Party A and Party D
from and against the loss resulting therefrom.

7.
Party B shall proactively take remedy measures and notify Party A, Party D and
the insurer in writing promptly under any one of the following circumstances:

 
1)
There is a ownership dispute regarding the collateral;

 
2)
Damages or loss of the collateral mortgage or other events resulting in apparent
value decrease of the collateral mortgage has occurred or is to occur;

8.
Party B shall provide to Party A the written material proving the consent of
other co-owners of the collateral mortgage on the mortgage matter hereunder;

9.
If the collateral mortgage has been leased prior to the establishment of the
mortgage, Party B shall notify Party A and Party D of the lease in writing and
provide the leasing contract. In the meanwhile, Party B shall notify the tenant
of the mortgage matters and request the tenant to issue a confirmation letter.

10.
Party B confirms, that any change of relevant articles under the Entrusted
Agreement for Loan Release, the Entrust Loan Agreement and the Guarantee
Agreement shall not be subject to Party B’s consent and Party B’s guarantee
obligation shall not be alleviated therefore.

11.
Party B authorizes Party A to consult Party B’s credit with the basic credit
database of People’s Bank of China, credit database approved to establish by the
authorities responsible for loan credit information collection or relevant
units, departments and persons. Party B agrees to provide its credit information
to the basic credit database of People’s Bank of China and the credit database
approved to establish by relevant authorities.

Article 7 Representations and Warranties of Party B
1.
Party B agrees and confirms that as the entrustor under the Entrusted Loan
Agreement, Party D is entitled to directly and independently exercise all the
rights under the principal agreement and this Agreement in the name of its own.
Party D is entitled to initiate a legal action, arbitration proceeding or other
legal measures independently or jointly with Party A against Party B and Party C
according to this Agreement and relevant contracts

 
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2.
The ownership certificates and evidencing materials provided by Party B to Party
A and Party D are true, complete, legal and valid; there is no conceal of the
condition of the collateral mortgage like co-ownership, dispute, sealing-up,
seizure or having been mortgaged.

3.
Party B has the legal disposal rights of the collateral.

4.
Party B is aware of Party C’s business scope, credit and the actual purpose of
the loan.

5.
In the event of Party B’s being a legal person or in the form of other
organization, the mortgage provided by Party B hereunder has been authorized by
its board of directors or the relevant highest organ of power and is in
accordance with the laws, regulations, policies and the articles of association
as applicable to Party B. In the event of Party’s execution hereof being in
breach of its articles of association and other internal regulations, Party B
shall be responsible to the liabilities and shall not refuse to perform the
guarantee obligation hereunder for its execution hereof being in breach of its
articles of association and other internal regulations.

Article 8 Realization of the Mortgage Rights
1.
In the event of Party C’s failure to fulfill the contractual repayment
obligation to Party A and Party D, Party A and Party D shall be entitled to
dispose of the collateral mortgage hereunder. Party A and Party D may exercise
the mortgage right in the means of directly owning the collateral by converting
the value of the collateral mortgage into cash to offset the debts as agreed
with Party C or apply for auction and sale of the collateral mortgage by the
court after application to the notarization authorities for notarization
documents with compulsory execution force.

2.
Party A and Party D may exercise the mortgage rights in advance and offset the
debts with the price obtained therefrom in advance:

 
1)
Party B is in breach of this Agreement, which threatens the mortgage rights of
Party A and Party D;

 
2)
Party B is dissolved, bankrupt, suspended, ordered to suspend the business for
rectification, revoked or the business license thereof is revoked, or Party B as
a natural person is dead and its successors are absent to fulfill his obligation
or the successors refuse to do so.

 
3)
Party C suffers from deteriorating business and loss of business reputation;
Party C is involved with disputes or litigation with the third party or other
events deemed by Party A and Party D as threatening or unfavorable to their
rights and interests.

 
4)
Party C is in breach of any relevant agreement with Party A and Party D which
will threaten the creditor rights of Party A and Party D.

 
5)
Other circumstances that are deemed by Party A and Party D to be sufficient to
threaten the creditor rights.

 
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3.
The Parties hereby agrees in particular, that in the event of occurrence of the
said events resulting in satisfaction of the requirements of exercising the
mortgage rights, Party B hereby irrevocably authorizes Party A and Party D to
possess and dispose of the collateral mortgage or obtain the interest thereof
like the rentals. The amounts obtained therefrom shall be used to repay the
debts within the scope covered by the mortgage hereunder in priority.

4.
Unless otherwise provided hereunder, any amounts obtained from the disposal of
the collateral mortgage shall be subject to the following sequences of
repayment:

 
1)
Costs for realization of the creditor’s rights;

 
2)
Interest, delayed repayment interest and liquidated damages;

 
3)
The principal of the principal creditor’s rights;

 
4)
Other amounts unpaid by Party C

5.
In the event of the collateral mortgage being a real estate located in the high
and new technology industrial park of Special Economic Zone of Shenzhen, the
settlement of the collateral mortgage shall be subject to relevant regulations
of the high and new technology industrial park of Special Economic Zone of
Shenzhen.

Article 9 Default and Settlement
In the event of any one of the following acts of Party B, Party A and Party D
are entitled to require Party B to rectify the default within a specific time
limit, provide a new mortgage, increase according mortgage, compensate the loss
and dispose of the collateral mortgage in advance.
1.
conceal of the situation of the collateral mortgage of co-ownership, dispute,
sealing-up, seizure, leasing or having been mortgaged;

2.
failure to provide complete materials or true documents about the collateral
mortgage as required by Party A and Party D;

3.
disposal of the collateral mortgage without authorization of Party A and Party
D;

4.
any actions or inactions impeding realization of the creditor’s rights and
mortgage rights by Party A and Party D;

5.
invalid mortgage caused by Party B;

6.
Party B or Party C’s breach of the articles of relevant contracts.

Article 10 Registration and De-registration of the Collateral
1.
Party B is obliged to take this Agreement and relevant documents to complete the
mortgage registration formalities promptly upon execution hereof and the right
vouchers of the collateral mortgage will be under the custody of Party D instead
during the mortgage term.

2.
Materials for mortgage deregistration shall not be issued until Party A’s
confirmation of full repayment of all the principal and interest of the loan by
Party C or Party B. Party B agrees that Party C may obtain the abovementioned
original of the ownership certificate of the collateral mortgage and conduct the
mortgage deregistration matters instead.

 
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Article 11 Relevant Costs
1.
Party C shall assume the costs of storage fee, assessment fee, verification fee,
insurance fee and notarization fee hereunder.

2.
Party C shall repay the amounts that Party A and Party D has paid in advance due
to Party C’s failure to pay off its payable amounts hereunder. Party A and Party
D are entitled to claim interest calculated by the interest rate for current
flow loan for the same level as regulated by People’s Bank of China starting
from the date when Party A and Party D pay the said amounts in advance.

3.
Party C authorizes Party A and Party D to deduct the said amounts and interest
from any accounts thereof.

Article 12 Reservation of Rights
Party B’s delayed performance or any tolerance or grace period granted by Party
A or Party D on Party B’s any default or delayed performance during the
performance term hereof shall not impair, affect or restrict any and all the
rights enjoyed by Party A or Party D under this Agreement and relevant laws, or
deemed as Party A or Party D’s permission or tacit acceptance to any default, or
deemed as a waiver of the rights of Party A or Party D to take actions against
the current or future breach of Party B.

Article 13 Notarization
Party A, Party B, Party C and Party D agree and confirm, that in the event of
this Agreement being notarized as a exercisable loan document, both Party A or
Party D are entitled to independently or jointly apply to the People’s Court for
execution by auction or sale of the collateral mortgage hereunder and use the
price therefrom for priority repayment if the Borrower fails to duly repay the
principal and interest of the loan or other payable amounts or breaches the
obligations hereunder. Party B agrees to accept the execution and waivers any
defense without any condition.

Article 14 Supplement and Modification
Any modification or supplement hereto shall be conducted in writing.

Article 15 Applicable Laws and Dispute Settlement
This Agreement is governed by the Laws of People’s Republic of China. The
Parties may negotiate to resolve the disputes arising out of the performance
hereof; provided negotiation fails to resolve the dispute, it may be resolved by
1st means of followings:
1.
Litigation: initiate a legal action with the People’s Court of Shenzhen with
jurisdiction;

2.
Arbitration: initiate an arbitration proceeding with the  arbitration
organization of the followings and the effective arbitration rule of the
arbitration organization when the application is filed is applicable:

 
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(1)
South China Sub-commission of China International Economic and Trade Arbitration
Commission;

 
(2)
Shenzhen Arbitration Commission

Article 16 Effectiveness
This Agreement becomes effective upon execution and stamping by the authorized
signatories of the Parties (If the Party is a natural person, the Agreement
becomes effective upon execution.).

Article 17 Schedules
The list of collateral, evidencing materials of the ownership of the collateral,
notarization documents, insurance policies are schedules of this Agreement
hereto.

Article 18 Originals
This Agreement has five originals with the same effect and force, and each of
Parties and registration authority hold one.

Article 19 Declaration
Upon execution hereof, each party has no doubt on all the articles hereto and
has fully understood and comprehended the legal connotations of the articles
regarding rights, obligations and liabilities and the according legal
consequence.

Article 20 Other Articles

_________________________________________
_________________________________________
_________________________________________

Article 21 List of Collateral
Schedule 1 (Real Estate)

   
Owner of the Real Estate
 
Number of the Real Estate
Certificate
 
Name, Building Number and
Room Number of the Real Estate
1
 
Bu Falin
 
Shen Fang Di Zi
No.5000200379
 
17D, Unit B, Building 1,
Happiness Seashore, Block N15,
Center Area, Bao’an District,
Shenzhen

Party A: Shenzhen Branch of Industrial Bank Co., Ltd.   （Official Stamp）
Responsible Person or Authorized Agent:  /s/ [illegible
signature]           (Signature)
Signature Date:                  Year                  Month                 
Day

 
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Party B1: Bu Falin          （Official Stamp）
Signatory with Authorization:  /s/ Bu Falin            (Signature)
Signature Date:                      Year                     
Month                      Day

Party C: Feigeda Electronic (SZ) Co., Ltd.   （Official Stamp）
Signatory with Authorization:  /s/ [illegible signature]        (Signature)
Signature Date:                      Year                     
Month                      Day

Party D:  Shenzhen Small & Medium Enterprises Credit Guarantee Centre Co.,
Ltd.（Official Stamp)
Signatory with Authorization: /s/ [illegible signature]    (Signature)
Signature Date:                      Year                     
Month                      Day

 
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