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EXHIBIT 10.6



Factory Building Lease Agreement




This Factory Building Lease Agreement (the “Lease Agreement”) is entered into as of March 1,
2008 (“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”.



WHEREAS,




The Parties agree on the lease of a portion of the first floor of the Factory Building (as defined
below) and a portion of the second floor of the Factory Building. Yuan Hao represents that it is
the lawful owner of the Factory Building.



1. Definitions




Unless otherwise defined in this Lease Agreement, the terms used herein shall have the following
meanings:



1.1 “Factory Building” shall mean the three-story building located at No.8 Lane 18 San Zhuang Road,
Songjiang Export Processing Zone, Shanghai, P.R.China.



1.2 “First Floor” shall mean the portion of the first floor of the Factory Building that is to be
leased (Exhibit 1, first floor layout of the Factory Building).



1.3 “Second Floor” shall mean the portion of the second floor of the Factory Building that is to be
leased (Exhibit 1, second floor layout of the Factory Building).



1.4 “Lease Floors” shall mean First Floor and Second Floor of the Factory Building.



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1.5 “Lease Term” shall mean the period of time in which DSH is entitled to use the Lease Floors,
and Yuan Hao is entitled to receive rent from DSH in accordance with the terms and conditions of
the Lease Agreement.



1.6 “DSH #2 Building” shall mean the building in construction located at No.2 Lane 18 San Zhuang
Road, Songjiang Export Processing Zone, Shanghai, P.R.China.



2. The Standard of the Factory Building




2.1 Yuan Hao shall provide minimum quality standards for the Factory Building and shall guarantee
that ancillary facilities of the Factory Building and supports for the Lease Floors (such as the
Factory Building elevators) are in compliance with all the relevant quality standards and meet
DSH’s demands and requirements.



3. Lease Term




3.1For the Lease Floors, the Parties agree that the Lease Term shall begin on March 1, 2008
until the time when DSH #2 Building is leased by DSH.



3.2 DSH shall decide the initial lease date of DSH #2 Building and shall notify such initial lease
date of DSH #2 Building not less than thirty (30) days before the expiration of the Lease Term.



3.3 The Parties agree that the Lease Term for the Lease Floors shall be terminated without further
extension unless DSH gives written notice of a request to extend such Lease Term not less than
thirty (30) days before the expiration of the Lease Term. Yuan Hao shall not terminate this Lease
Agreement without DSH’s written approval. During the Lease Term extension period, the items
relating to the rental set forth in Article 5 of the Lease Agreement shall be adjusted on the basis
of the market prices at the time of the Lease Term extension and after consultation between the
Parties.



3.4 If during the Lease Term or the Lease Term extension period, Yuan Hao receives from a third
party a bona fide, legally binding offer to lease the portion of the Fourth Floor not already
leased by DSH, Yuan Hao shall notify DSH of this fact. The notice shall specify all the terms of
the bona fide third party offer. DSH shall then have thirty (30) days to lease that portion of the
Lease Floors specified in the third party’s bona fide



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offer for the rent and related details set forth in Articles 4 and 5. Yuan Hao shall not lease any
portion of the Lease Floors to any third party until the thirty (30) days has expired without DSH
exercising its right of first refusal. Any other terms not specified in this Lease Agreement
regarding the Lease Floors, both Parties shall negotiate and sign a supplemental agreement for
these unspecified terms. Such signed supplemental agreement shall constitute a part of the entire
Lease Agreement and shall have the same effectiveness as the entire Lease Agreement.



4. Total Lease Area of the Lease Floors




4.1 First Floor has a total lease area of 998 square meters.



4.2 Second Floor has a total lease area of 1,292 square meters.



4.3 Lease Floors has a total lease area of 2,280 square meters.



5. Rental




5.1 The Parties agree that the monthly rent per square meter for the First Floor shall be Renminbi
(“RMB”) 26.07 per square meter. The total monthly rent for the First Floor shall be RMB
25,757.16.



5.2 The Parties agree that the monthly rent per square meter for the Second Floor shall be RMB
26.07 per square meter. The total monthly rent for the Second Floor shall be RMB
33,682.44.



5.3 The Parties agree that the total monthly rent for the Lease Floors shall be RMB
59,439.60.



6. Deposit




DSH shall pay Yuan Hao a deposit amount of RMB 59,439.60 within ninty (90) days of the
Effective Date of the Lease Agreement.



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7. Method of Payment




For the Fourth Floor, DSH shall pay the Rental in RMB to the RMB bank account as designated by Yuan
Hao before the first day of every month.



8. Termination of the Lease Agreement




If either Party terminates the Lease Agreement prior to the expiration of the Lease Term without
the consent from the other Party, the Party that terminates the Lease Agreement shall pay damages
to the other Party to compensate for such Party’s actual loss. 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.



9. Insurance and Repair Costs




9.1 During the term of the Lease Agreement, Yuan Hao shall purchase and maintain insurance coverage
to cover any and all casualty damage to the Factory Building, and shall be responsible for
repairing all structural damages to the Factory Building that are not the result of improper use by
DSH. DSH shall be responsible for all repair costs arising from improper building usage by DSH.
If Yuan Hao cannot obtain building insurance, DSH will need to obtain insurance for the Fourth
Floor, and Yuan Hao will reimburse DSH for all costs of such insurance coverage.



9.2 Yuan Hao shall be entitled to inspect the Factory Building at reasonable intervals and upon
reasonable notice to DSH. DSH shall provide assistance to allow such inspections.



10. Liability for Breach of the Lease Agreement




10.1 If DSH violates Article 5 of the Lease Agreement for failing to pay the Rental, then DSH shall
pay a penalty at the rate of 0.011% of the Rental for each day of delay.



10.2 If Yuan Hao breaches Articles 2, 3, 11 and any of its warranties set forth in this Lease
Agreement, Yuan Hao shall compensate DSH for all of DSH’s losses and damages including
consequential, special, punitive and incidental damages.



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10.3 DSH shall not:




	 	(1)	 	sub-lease the Lease Floors or exchange the use of the Lease Floors with any third
party without Yuan Hao’s prior written consent.

	 
	 	(2)	 	alter the structure of the Lease Floors or damage the Factory Building without Yuan
Hao’s prior written consent.

	 
	 	(3)	 	change the lease purpose stipulated by the competent authorities without Yuan Hao’s
consent.






11. Warranties




11.1 Yuan Hao hereby warrants that if the Factory Building is sold to any third party during the
Lease Term or the period of renewal, such third party shall be required to fulfill all obligations
of Yuan Hao under the Lease Agreement. If said third party fails to carry out the Lease Agreement,
Yuan Hao shall compensate DSH for all of DSH’s losses and damages including consequential, special,
punitive and incidental damages.



11.2 In case Yuan Hao mortgages the Factory Building to the third party, any loss suffered by DSH
shall be paid by Yuan Hao.



12. Force Majeure




12.1. The definition of Force Majeure




Force Majeure shall mean any event which arises after the Effective Date that is beyond the control
of the Parties, and is unforeseen, unavoidable and insurmountable, and which prevents total or
partial performance by either Party. Such events shall include earthquakes, typhoons, flood, fire,
war, acts of government or public agencies, strikes and ay other event which cannot be foreseen,
prevented and controlled, including events which are recognized as Force Majeure in general
international commercial practice.



12.2 Consequences of Force Majeure




a. If an event of Force Majeure occurs, the contractual obligation of a Party affected by such an
event shall be suspended during the period of delay and the time for performing such obligation
shall be extended, without penalty, for a period equal to such suspension.



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b. The Party claiming Force Majeure shall give prompt notice to the other Party in writing and
shall furnish, within fifteen (15) days thereafter, sufficient proof of the occurrence and expected
duration of such Force Majeure. The Party claiming Force Majeure shall also use all reasonable
efforts to mitigate or eliminate the effects of the Force Majeure.



c. If an event of Force Majeure occurs, the Parties shall immediately consult with each other in
order to find an equitable solution and shall use all reasonable efforts to minimize the
consequences of such Force Majeure.



13. Effective Date of the Lease Agreement




The Lease Agreement shall become effective after the legal representatives or authorized
representatives of both Parties affix their signatures and company seals on the Lease Agreement.



14. Language of the Lease Agreement




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



15. Settlement of Dispute




15.1 Friendly consultations




a. In the event of any dispute, difference, controversy or claim arising out of or related to the
Lease Agreement, including, but not limited to, any breach, termination or validity of the Lease
Agreement, (the “Dispute”) then upon one Party giving the other Party notice in writing of the
Dispute (the “Notice of Dispute”), the Parties shall attempt to resolve such Dispute through
friendly consultation.



b. If the Dispute has not been resolved through friendly consultations with thirty (30) days from
the Notice of Dispute, the Dispute shall be resolved by arbitration in accordance with Article 15.2
of this Lease Agreement. Such arbitration may be initiated by either Party.



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15.2 Arbitration




The arbitration shall be conducted by Shanghai Arbitration Commission in Shanghai, China in
accordance with its procedure and rules. The arbitration award shall be final and binding on the
Parties. The costs of arbitration shall be borne by the losing Party except as may be otherwise
determined by the arbitration tribunal.



15.3 Continuance of performance




Except for the matter in Dispute, the Parties shall continue to perform their respective
obligations under the Lease Agreement during any friendly consultations or any arbitration pursuant
to this Article 15.



15.4 Separability




The provisions of this Article 15 shall be separable from the other terms of the Lease Agreement.
Neither the terminated nor the invalidity of the Lease Agreement shall affect the validity of the
provisions of this Article 15.



16. Applicable Law




The validity, interpretation and implementation of the Lease 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.



17. Compliance with the Foreign Corrupt Practices Act




17.1 Yuan Hao acknowledges that DSH is a corporation with substantial presence and affiliation in
the United States and, as such, is subject to the provisions of the Foreign Corrupt Practices Act
of 1977 of the United States of America, 15 U.S.C. §§ 78dd-1, et seq., which prohibits the making
of corrupt payments (the “FCPA”). Under the FCPA, it is unlawful to pay or to offer to pay anything
of value to foreign government officials, or employees, or political parties or candidates, or to
persons or entities who will offer or give such payments to any of the foregoing in order to obtain
or retain business or to secure an improper commercial advantage.



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17.2 Yuan Hao further acknowledges that it is familiar with the provisions of the FCPA
and hereby agrees that Yuan Hao shall take or permit no action which will either constitute a
violation under, or cause DSH to be in violation of, the provisions of the FCPA.



18. Miscellaneous




18.1 Any amendment to this Lease Agreement shall be in writing and duly signed by both Parties.
Such amendment shall constitute a part of the entire Lease Agreement.



18.2 Both Parties acknowledge that they are aware of their respective rights, obligations and
liabilities and will perform their obligations under the Lease Agreement in accordance with the
provisions of the Lease Agreement. If one Party violates the Lease Agreement, the other Party
shall be entitled to claim damages in accordance with the Lease Agreement.



18.3 Any notice or written communication requited or permitted by this Lease 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 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.




18.4 This Lease Agreement comprises the entire understanding between the Parties with respect to
its subject matters and supersedes any previous or contemporaneous



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communications, representations, or agreements, whether oral or written. For purposes of
construction, this Lease Agreement will be deemed to have been drafted by both Parties. No
modification of this Lease 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.

 	 	 
	By  	 	 	 
	 	Authorized Representative 	 	 
	 	Date: 	 	 
	 
	Shanghai Yuan Hao Electronic Co., Ltd.

 	 	 
	By  	 	 	 
	 	Authorized Representative 	 	 
	 	Date: 	 	 
	 




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