Lease Agreement
 
Lessor (hereinafter referred to as Party A): Liuzhou Taiyuan Steel and Iron
Products Co., Ltd.

Lessee(hereinafter referred to as Party B): Hebei Xinhua Rubber Sealing Group
Liuzhou Sealing Co., Ltd.

Part A and Party B enter into this agreement through friendly consultation in
regards to leasing the workshop, office building and multiple–use building
legally owned by Party A to Party B.

1.
Party A will lease to Party B his standard workshop, office building, and
multiple–use building (correctively “leasehold”) , which are located at No.20,
Xinxing Road, New Industry Park, Liujiang County, Liuzhou City. (auxiliary
facilities are presented in Exhibit A )

 
a)
The area of office building is about 1,002 ㎡ and shall be used for office work.

 
b)
The area of multiple–use building is about 1,000 ㎡ and shall be used as rest
room for employees.

 
c)
The area of No.1 workshop is about 4,090 ㎡ while No.2 workshop is about 2,055 ㎡.
They are used as production workshop.

 
d)
One set of voltage transformation power distribution cabinet of 250 KVA.

 
e)
No.1 workshop: 2 sets of mono bean 10t bridge crane 24 meters span.

 
 
1.
No.2 workshop: 1 set of mono bean 10t bridge crane 24 meters span.

 
f)
Wall of the plant.

2.
Lease term

 
The lease term is two years dated from March 8, 2010 to March 7, 2012. When the
term expires, Party A is entitled to take back the leasehold and auxiliary
facilities. Party B shall return them to Party A in time.
 
If Party B requests to renewal the lease agreement, Party B should provide a
written notice to Party A in three months prior to the expiration. The lease
agreement can be renewal and signed with content of Part A. Party B has priority
right to renew upon expiry if Party A continues to lease its leasehold.

3.
Security deposit and rental

 
 
a)
Security deposit for leasing
 
The security deposit hereunder is RMB100,000 and shall be paid to Party A by
Party B on the date this agreement is entered into. When the lease term is
terminated, upon receipt of all rental and return of leaseholds and auxiliary
facilities from Party B, Party A shall return the security deposit to Party B
without any interest within 5 days.

 
 
b)
Rental
 
Both parties agrees to calculate the rental based on the total area of 8,147 ㎡,
with rental of RMB9/㎡ and RMB73,323 per month.  The annual rental is fixed for
first two years and the rental is paid quarterly. Party B shall pay the rental
quarterly to Party B’s bank account in the Agricultural Bank of China by cash in
a week prior to the end of each quarter. The bank account No. is
6228450850000989917. Party shall provide the invoice to Party B upon receipt of
the payment.

 
 
 

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4.
Party A represents that the ownership of leasehold and land aforesaid is
clarified. The leasehold is used for production of auto parts, office working,
management and backup management of some employees. Party B is not allowed to
change the use of leasehold at his own decision.

 
5.
In the period of lease term, Party B promises:

 
 
a.
The leasehold hereunder is with electricity, water and good transportation.

 
 
b.
to maintain and repair the leasehold, except for damage caused by improper use
of Party B.

 
 
c.
Party A shall notify Party B six months in advance if he sells or pledges the
property hereunder.

 
6.
In the period of lease term, Party B promises:

 
 
a.
No change of the structure of the property. Party B can make change to the
property or add other facilities, provided the written consent of Party A. The
expense incurred shall be responsible by Party B. If Party B infringes this
term, the loss or damage incurred shall be responsible by Party B.

 
 
b.
Party B shall not lease the leasehold to any third party or exchange it for use
with any third party; No pledge or assignment of the leasehold and land
hereunder.

 
 
c.
Party B shall assist Party A in the regular property examination, repair and
maintenance.

 
 
d.
Party B shall undertake all the expenses in associated with water, electricity,
sanitation, and property management etc., during the lease term.

 
 
e.
Party B shall use and maintain the leasehold and auxiliary facilities
appropriately. In case of damage of leasehold and auxiliary facilities caused by
party B, Party B shall make repairs immediately or bear the compensation
accordingly.

 
 
f.
Party B shall not carry on illegal activities or store hazardous materials in
use of the leasehold.

 
 
g.
Party B shall be responsible for the environment protecting and dispose the
waste water, waste gas and garbage properly according the requirements of
related regulations and rules. Any loss caused by infringement of Party B shall
be undertaken by Party B.

 
7.
a. Party B is responsible for the management, proper use and maintenance of the
leasehold and auxiliary facilities as well as the elimination of any potential
risk. Otherwise, Party B shall undertake all the responsibilities and make up
the loss of party A.
 
b. the workshop, office building and multi-use building are installed and
arranged with necessary facilities such as electricity, and water pipe etc.
Party B is not allowed to change it at his own decision. If necessary, he may
change it with written consent of Party A.

 
8.
The expense for installation of anti-theft system in the plant shall be
undertaken by Party B.

 
 
 

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9.
In the period of lease, Party B shall comply with Fire Prevention Law of the
People's Republic of China and related regulations. If Party B fails to comply,
any loss caused herein shall be undertaken by Party B.

 
10.
When the lease agreement expires and Party B decides not to renewal, Party B
shall return the leasehold and auxiliary facilities which are in good condition
to Party A. For any damage or lost of the leasehold, Party B should repair or
make compensation to Party A. Party B shall move out within five days upon
expiration of lease term and clean the property. For the inventory of property
in the plant without consent of Party A, Party A has the right to charge Party B
liquidated damage, which is 5% of monthly rental, and dispose the property in
ten days.

 
11.
This lease agreement terminates upon expiration of lease term.

 
12.
 Liability for breach of this lease agreement:
a. if one party infringes the terms hereunder or rules and regulations in
relation, the other party has the right to terminate this agreement. It is the
responsibility of this party to bear the loss caused.
 
b. If Party B fails to pay the rental in time, Party A has the right to charge
Party B penalty of 5% of monthly rental by day.
 
c. If party B delays payment for two months, Party A has the right to terminate
the agreement and take back the leasehold and auxiliary facilities.

 
13.
Both parties shall not be responsible for any loss or termination of agreement
caused by act of God. Act of God represents unpredictable, unavoidable situation
and incidents.

 
14.
Any disputes arising from the contract shall be solved through consultation. In
case no resolution is reached, either party can bring a lawsuit before the
court.

 
15.
the tax related to lease of leasehold hereunder in the period of lease is
undertaken by Party A, while the tax related to production, operation and other
business activities is undertaken by Party B.

 
16.
Party A’s Property Ownership Certificate regarding the leasehold is in the
process of examination and shall be approved within approximately 6 months.

 
17.
In case of anything not covered here, supplementary clauses will be formed which
have the same effect as those in this agreement.

 
18.
This agreement in four copies. Party A and Party B hold two copies respectively.

 
19.
This agreement comes into effect upon signature or seal of both parties and
receipt of security deposit and first rental by Party A from Party B.

 
Exhibit A: list of auxiliary facilities

Dated this 8th day of March, 2010

Lessor (hereinafter referred to as Party A): Liuzhou Taiyuan Steel and Iron
Products Co., Ltd. (seal and stamp)
Representative: You Zuyang
Title: General Manager
Chinese ID No.: 450205196109200713
Tel: 13807721742
 
 
 

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Lessee(hereinafter referred to as Party B): Hebei Xinhua Rubber Sealing Group
Liuzhou Sealing Co., Ltd. (seal and stamp)
Representative: Ke Zunsheng
Title: General Manager
Chinese ID No.: 422622196610090014
Tel: 13367625688
 
 
 

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Exhibit A: list of auxiliary facilities

This exhibit hereunder is attached to the lease agreement signed between Liuzhou
Taiyuan Steel and Iron Products Co., Ltd. and Hebei Xinhua Rubber Sealing Group
Liuzhou Sealing Co., Ltd.

 
No.
 
Item Name
 
Dimension
 
Unit
 
Quantity
 
Unit Price
(RMB)
 
Amount
(RM B)
01
 
office desk GJU5E321
 
3.2m*1.13m*0.76m
 
set
 
1
 
6900
 
6900
02
 
office chair FQL FA121-H
     
set
 
1
 
1230
 
1230
03
 
office chair FQL FE200
     
set
 
2
 
428
 
856
85604
 
sofa AML083
 
1+1+3
 
set
 
1
 
3670
 
3670
05
 
Bookcase ZTL UAG103
 
1.35m*0.4m*2.08m
 
 
group
 
2
 
2280
 
4560
06
 
Bookcase ZTL UAG202
 
0.9*0.4*2.08 ( 2 doors)
 
group
 
1
 
1520
 
1520
07
 
Tea table
 
Length: 1.3m*0.8m
(table top B-25)
 
set
 
1
 
530
 
530
08
 
JX T-07
 
Width: 0.65m*0.65m
(table top B-25)
 
set
 
1
 
380
 
380
09
 
Tea cabinet ZTLU-096
 
1.2m*0.4m*0.8m
 
group
 
2
 
740
 
1480
10
 
Office desk HJ A 6B221
 
2.2m*10.5m*0.76m
 
set
 
2
 
2175
 
4350
11
 
Office chair MX8205
     
set
 
2
 
720
 
1440
12
 
Office chair YL A919
     
set
 
2
 
275
 
550
13
 
Sofa MX8511
 
Three seats
 
set
 
2
 
1430
 
2860

 
 
 

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14
 
Tea table ZJ H-407
 
1.2m*0.6m*0.45m
 
set
 
2
 
720
 
1440
15
 
Bookcase ZTL UM6905
 
2.26m*0.4m*2.08m
 
set
 
2
 
2750
 
5500
16
 
Sofa WD618
 
1+3
 
set
 
1
 
1100
 
1100
17
 
Tea table WP YT-G07
 
Length+width
 
set
 
1
 
800
 
800
18
 
Swivel chair YGL 222
     
set
 
2
 
560
 
1120
19
 
Filing cabinet WP-15
 
0.85m*0.38m*1.85m
 
group
 
3
 
578
 
1734
20
 
Swivel chair ML 2218A
     
set
 
8
 
250
 
2000
21
 
Tea cabinet ZTL U-05
 
0.8m*0.4m*0.85m
 
group
 
1
 
530
 
530
22
 
Conference desk HD JM207
 
￠900*750H
 
set
 
1
 
450
 
450
23
 
Swivel chair YL 8643
     
set
 
4
 
148
 
592
24
 
Screen 45 (Financial Dep.)
 
1.5m*1.1m
 
group
 
2
 
1072
 
2144
25
 
Screen 45 (Staff room)
 
1.5m*1.1m
 
group
 
8
 
1208
 
9664
26
 
Side panel of screen
     
piece
 
3
 
60
 
180

Note:
 
 
1.
3 sets of mono bean 24 meters span;

 
 
2.
1 set of 250 KVA voltage transformer power cabinet;

 
 
3.
Each washroom of the office building is installed with a faucet and basin;

 
 
4.
Each washroom of the multiple-use building is installed with a basin, faucet and
sprinkler.

 
 
 
5.
Totally 64 extinguishers: 12 in the office building with 4 distributed in each
floor, 12 in the multiple-use building with 4 distributed in each floor, 22 in
No.1 workshop, and 18 in No.2 workshop.

 
 
6.
Each window in the second floor of office building is installed with curtain.

 
 

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