EXHIBIT 10.2

 

Fifth Supplemental Agreement to the

Factory Building Lease Agreement

 

This Fifth Supplemental Agreement to the Factory Building Lease Agreement (the
“Fifth Supplemental Agreement") is entered into as of February 1, 2015
(“Effective Date”) in the city of Shanghai, by and between SHANGHAI KAI HONG
TECHNOLOGY CO., LTD. (hereinafter referred to as "DSH") with its registered
office at No.1 Lane 18 San Zhuang Road, Songjiang Export Processing Zone,
Shanghai, P.R.China and SHANGHAI YUAN HAO ELECTRONIC CO., LTD. (hereinafter
referred to as "Yuan Hao") with its registered office at No.8 Lane 18 San Zhuang
Road, Songjiang Export Processing Zone, Shanghai, P.R.China.  DSH and Yuan Hao
are collectively referred to as the “Parties” and individually as a “Party”.

 

RECITALS

 

WHEREAS, both Parties signed a Factory Building Lease Agreement on March 1, 2008
to temporary lease a factory building from Yuan Hao to temporary support and
expand DSH’s manufacturing operations until the completion of the DSH #2
Building;

 

WHEREAS, both Parties further signed a Supplemental Agreement to the Factory
Building Lease Agreement on September 1, 2008 to have Yuan Hao temporary provide
additional electricity to DSH;

 

WHEREAS, both Parties further signed a Second Supplemental Agreement to the
Factory Building Lease Agreement on August 18, 2009 to have Yuan Hao continue to
provide additional electricity to DSH;

 

WHEREAS, both Parties further signed a Third Supplemental Agreement to the
Factory Building Lease Agreement on May 16, 2011 to have Yuan Hao continue to
provide additional electricity to DSH;

 

WHEREAS, both Parties further signed a Fourth Supplemental Agreement to the
Factory Building Lease Agreement on April 23, 2014 to have Yuan Hao continue to
provide additional electricity to DSH;

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WHEREAS, DSH continues to require Yuan Hao to provide additional electricity for
DSH’s DSH #1 Building and DSH #2 Building, and DSH cannot stop its planned
manufacturing operations within DSH #1 Building and DSH #2 Building;

 

WHEREAS, both Parties, based on relevant laws of the People’s Republic of China
and the city of Shanghai, now desire to enter into this Fifth Supplemental
Agreement with detail terms and conditions to continue to have Yuan Hao provide
additional electricity for DSH’s planned manufacturing operations within DSH #1
Building and DSH #2 Building (as defined in the Factory Building Lease
Agreement); and

 

NOW THEREFORE, in consideration of the premises and of the mutual covenants
contained in this Fifth Supplemental Agreement, the Parties agree as follows:

 

1. Both Parties acknowledge that DSH has already returned the previously leased
500 KVA power transformer to Yuan Hao, and Yuan Hao does not have any problem.

 

2. Yuan Hao promises to provide DSH two transformers and provide two matching
facilities for DSH to lease, including a 2,000 KVA power transformer and its
power facility and a 2,500 KVA and its power facility, to provide for DSH’s
manufacturing operations in DSH #1 Building and DSH #2 Building.

 

3. Both Parties agree that the lease period for the power facility of 2,000 KVA
power transformer shall commence from February 1, 2015 until the date when DSH
decides to terminate the 2,000 KVA power facility lease (“2,000KVA Power
Facility Lease Period”).  DSH should provide a one month written notice to Yuan
Hao prior to the termination.

 

4. Both Parties agree that the lease period for the power facility of 2,500 KVA
power transformer shall commence from February 1, 2015 until the date when DSH
decides to terminate the 2,500 KVA power facility lease (“2,500KVA Power
Facility Lease Period”).  DSH should provide a one month written notice to Yuan
Hao prior to the termination.

 

5. Both Parties agree that the total cost for the 2,000 KVA Power Facility Lease
Period and the total cost for the 2,500 KVA Power Facility Lease Period include
a 12% property tax cost, power transfer management fee, and all other
miscellaneous costs.

 

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6. For both 2,000 KVA Power Facility Lease Period and 2,500 KVA Power Facility
Lease Period, DSH agrees to pay Yuan Hao RMB 36 per square meter, and the total
leased square area is 588.8 square meters.  Each month the lease cost shall be
RMB 21,197 (“4,500 KVA Power Facilities Monthly Lease Cost”), and the attached
facility description shall be part of this Fifth Supplemental Agreement.

 

7. DSH agrees to pay Yuan Hao an operation management fee, equals to 4% of the
4,500 KVA Power Facilities Monthly Lease Cost, which shall be RMB 1,582.69 per
month (“Monthly Operation Management Fee”).  Yuan Hao shall provide operation
management services, including maintenance, cleanliness, repairment of both
2,000 KVA and 2,500 KVA transformer power facilities, green plants and
environmental maintenance.

 

8. DSH agrees to pay Yuan Hao a location usage fee for the square footage of 307
square meters based on the calculation of RMB 4.63 per square meter, which shall
be RMB 1,421.41 (“Monthly Location Usage Fee”).

 

9. Both Parties agree that DSH should pay Yuan Hao a month worth of 4,500 KVA
Power Facilities Monthly Lease Cost as security deposit, which shall be RMB
21,197.00 (“Power Facilities Lease Security Deposit”).  Yua Hao upon receiving
the Power Facilities Lease Security Deposit shall provide a receipt to
DSH.  Upon termination of both 2,000KVA Power Facility Lease Period and 2,500KVA
Power Facility Lease Period, the Power Facilities Lease Security Deposit shall
be returned without interest to DSH.

 

10. Both Parties agree that DSH shall pay Yuan Hao a guarantee fee in the amount
of RMB 1,200,000 for leasing the 2,000 KVA power transformer and the 2,500 KVA
power transformer (the “Power Transformer Guarantee Cost”).

 

11. Yuan Hao shall provide DSH a payment receipt upon receiving the Power
Transformer Guarantee Cost.  Upon termination of the lease of 2,000 KVA power
transformer and 2,500 power transformer, Yuan Hao shall return the Power
Transformer Guarantee Cost without interest, minus any setoffs as to be charged
to DSH under this Fifth Supplemental Agreement, to DSH.  If only one of the
power transformers’ leases is terminated, Yuan Hao agrees to return one-half of
the Power Transformer Guarantee Cost (RMB 6,000,000) to DSH.  The other half of
the Power Transformer Guarantee Cost (RMB 6,000,000) shall be returned by Yuan
Hao without interest to DSH upon

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termination of the lease of the other power transformer.

 

12. Yuan Hao shall provide invoices of DSH’s per month electricity usage based
on the results shown from 2,000 KVA power transformer and 2,500 KVA power
transformer to DSH.  DSH, upon review without any issue, shall pay such invoices
to a RMB account designated by Yuan Hao.  If DSH has any issue upon review of
the invoices, both Parties shall promptly resolve DSH’s issues.

 

13. Each month on a day designated by Yuan Hao, DSH shall pay the 4,500 KVA
Power Facilities Monthly Lease Cost, the Monthly Operation Management Fee, and
Monthly Location Usage Fee to a RMB account designated by Yuan Hao.

 

 

14. If one Party, prior to the expiration of the 2,000KVA Power Facility Lease
Period and/or 2,500KVA Power Facility Lease Period, unilaterally terminates this
Fifth Supplemental Agreement without the other Party’s consent, the Party that
terminates this Fifth Supplemental Agreement shall pay damages to the other
Party to compensate for such Party’s actual financial losses.  The amount of
damages shall include, but not be limited to, the reasonable profits,
out-of-pocket costs, legal service fees, court fees, arbitration fees,
accounting fees and removal or relocation fees.

 

15. Yuan Hao hereby warrants that if for some special reason that Yuan Hao
cannot continue to fulfill its obligations under this Fifth Supplemental
Agreement and causes financial losses to DSH, Yuan Hao shall compensate DSH for
DSH’s financial losses.  In case Yuan Hao mortgages the 2,000 KVA power
transformer and/or the 2,500 KVA power transformer leased to DSH to a third
party and the mortgage transaction causes financial losses to DSH, Yuan Hao
shall compensate DSH for DSH’s financial losses.  However, if power transformers
cannot be used under normal condition as a result of power supply department’s
cause and not caused by Yuan Hao, then Yuan Hao shall not be responsible, and
under such situation, both Parties shall promptly work with power supply
department to return the usage under normal condition.  If 2,000 KVA power
transformer and/or 2,500 KVA power transformer or power facilities are damaged
due to DSH’s improper use, DSH shall be responsible for the repair fee.

 

16. This Fifth Supplemental Agreement shall become effective after the legal
representatives or authorized representatives of both Parties affix their
signatures and

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company seals on this Fifth Supplemental Agreement.

 

17. The Fifth Supplemental Agreement is made and executed in Chinese and
English, both versions having equal validity except as prohibited by law.

 

18. In the event of any dispute, difference, controversy or claim arising out of
or related to this Fifth Supplemental Agreement, including, but not limited to,
any breach, termination or validity of this Fifth Supplemental Agreement (the
"Dispute"), both Parties shall resolve the Dispute based on Article 18 of the
Factory Building Lease Agreement.  The provisions of this Article 18 shall be
separable from the other terms of the Fifth Supplemental Agreement.  Neither the
terminated nor the invalidity of the Fifth Supplemental Agreement shall affect
the validity of the provisions of this Article 18.

 

19. The validity, interpretation and implementation of this Fifth Supplemental
Agreement and the settlement of Disputes shall be governed by relevant laws of
the People’s Republic of China and regulations that are officially promulgated
and publicly available.

 

20. Any amendment to this Fifth Supplemental Agreement shall be in writing and
duly signed by both Parties. Such amendment shall constitute a part of this
entire Fifth Supplemental Agreement.  This Fifth Supplemental Agreement and any
amendment to this Fifth Supplemental Agreement shall constitute a part of the
Factory Building Lease Agreement.  Both Parties acknowledge that they are aware
of their respective rights, obligations and liabilities and will perform their
obligations under this Fifth Supplemental Agreement in accordance with the
provisions of this Fifth Supplemental Agreement.  If any Article or provision of
this Fifth Supplement Agreement is in conflict with any Article or provision of
the Factory Building Lease Agreement, the Article or provision of the Factory
Building Lease Agreement shall trump and replace any conflicting Article or
provision in this Fifth Supplemental Agreement.

 

21. Any notice or written communication requited or permitted by this Fifth
Supplemental Agreement shall be made in writing in Chinese and English and sent
by courier service.  The date of receipt of a notice or communication shall be
deemed to be seven (7) days after the letter is deposited with the courier
service provided the deposit is evidenced by a confirmation receipt.  All notice
and communications shall be sent to

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the appropriate address set forth below, until the same is changed by notice
given in writing to the other Party.

 

To: DSH

Address:No.1 Lane 18 San Zhuang Road, Songjiang Export Processing Zone,
Shanghai, P.R.China

Attn.: Shanghai Kai Hong Technology Co., Ltd.

 

To: Yuan Hao

Address: No.8 Lane 18 San Zhuang Road, Songjiang Export Processing Zone,
Shanghai, P.R.China

Attn.: Shanghai Yuan Hao Electronic Co., Ltd.

 

22. This Fifth Supplemental Agreement comprises the entire understanding between
the Parties with respect to its subject matters and supersedes any previous or
contemporaneous communications, representations, or agreements, whether oral or
written. For purposes of construction, this Fifth Supplemental Agreement will be
deemed to have been drafted by both Parties. No modification of this Fifth
Supplemental Agreement will be binding on either Party unless in writing and
signed by an authorized representative of each Party.

 

Shanghai Kai Hong Technology Co., Ltd.

Shanghai Yuan Hao Electronic Co., Ltd.

 

 

 

 

 

 

By_Justin Kong__________________

By__ Jian Ya Xing________________

Authorized Representative

Authorized Representative

Date:

Date:

 

 

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