**Exhibit10.9**

 

**LEASE AGREEMENT**

 

**Lessor (“Party A”)**:  Ningbo Longxing Group Co., Ltd.

**Lessee: (“Party B”)**:  Ningbo Fulida Gas Equipment Co. Ltd.

 

Party A will lease thebuildings it owns to Party B, and Party B needs to rent the same and is willingto pay relevant expenses thereof.  Inorder to specify the rights and obligations for each of the Lessor and Lessee,the Parties have reached the following agreement (the “Agreement”) uponconsultation and in accordance with the “Contract Law of the People’s Republicof China”:

 

# I.                                         Party Aagrees to lease to Party B, for Party B’s use, a factory building with aconstruction space of 8,969m2 and a guard house of 59.5m2,both located at Renmin Road, Hengxi Town, Yinzhou District, Ningbo City.  Party B will independently operate and manageits business and bear all civil, economic and legal liabilities arising fromits operation.

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# II.                                     Lease TermThe initial term of the lease will be five years.  Lessor will deliver the leased buildings onFebruary 1, 2005 to Lessee for use. Party B has the option to renew for another five years on the same termsas provided in this Lease.  To exercisethis option, Party B will notify Party A of its intention to renew for anotherfive years not less than thirty days prior to the expiration of the originallease term.

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# III.                                 RentComputations and Payments

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## 1.                                       Rent:  The rent will be RMB 14 per square meters permonth, starting from the effective date of this Agreement.  This price may be readjusted three yearsthereafter in accordance with the rise of the then market leasing price.  Any rise or fall of the new rental shall notexceed 10% of the previous rental.

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## 2.                                       Rent shallbe paid on the effective date of this Agreement, pro rated for the balance ofthe month in which this Agreement becomes effective.  Thereafter, payments will be made on thefirst day of each month.

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# IV.                                 Rights andObligations for the Parties during the Term

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## 1.                                       Party Ashall deliver the said buildings to Party B as agreed herein, and, prior to thedelivery, shall provide conditions for electricity and water supply, greenspace, paving and repair of roads and floors, and laying of network cables inrespect of Party B’s use.  Party A shallalso ensure that electricity supply to Party B shall be sufficient to meet thedaily production activities unless such 

 

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## shortages are due to powerrationing imposed by the local government or any power failure beyond Party B’scontrol.

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## 2.                                       Anyrenovations made to the buildings by Party B shall not change the designateduse of the building or its structure and also shall be subject to Party A’sconsent, which will not be unreasonably withheld.  Expenses for any renovations shall be borneby Party B.

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## 3.                                       Uponexpiration of this Agreement, Party B shall not seek from Party A any expensesfor such renovations, and shall ensure the intactness of the functionality ofthe original equipment and facilities to the same extent as when the buildingwas delivered to Party B, ordinary wear and tear excepted.

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## 4.                                       Anyoperational costs and expenses, such as taxes, water and electricity charges,telephone charges, social security fees, hygiene fees, waste disposal chargesand other operational expenses, incurred by Party B through use of thebuildings during the lease term shall be borne by Party B.  Party A shall not be responsible for anycreditor’s rights and liabilities.

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# V.                                     Liabilitiesfor Breach of Contract

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## 1.                                       If eitherParty fails to perform in accordance with the terms and conditions under theAgreement, the other Party shall have the right to terminate the Agreement.

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## 2.                                       If eitherParty terminates the Agreement during the lease without obtaining the consentof the other Party, such Party shall be regarded as having breached thecontract, and shall bear liabilities for such breach.  All actual losses incurred as a result byeither Party shall be borne by the defaulting Party.

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## 3.                                       If Party Adesires to continue to lease the buildings upon the expiration of the lease andextension, Party B shall, under equal conditions, have the right of firstrefusal in respect of the lease, and new terms and conditions shall be enteredinto between the Parties upon mutual agreement through consultation.

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## 4.                                       In theevent that the Agreement is unilaterally terminated during the lease term dueto Party A’s taking back of the buildings or due to Party B’s change of itsintent regarding the lease, the other Party shall be given six (6) months’prior notice, and shall be compensated by the defaulting Party in an amountequal to three months’ rent.

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# VI.                                 Any mattersunspecified herein shall be supplemented upon mutual agreement throughconsultation.  Such supplementaryprovisions, if 

 

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# written andsigned by the Parties, shall have equal force and effect with this Agreement.

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# VII.                             Anydisputes arising from the performance of this Agreement shall be settledthrough consultation between the Parties. Where such consultation fails, the disputes shall be submitted forarbitration at the place where Party A is located or for a lawsuit at a People’sCourt in accordance with the principles of territorial jurisdiction.

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# VIII.                         TheAgreement shall become effective upon execution by the Parties and only uponthe approval of the Parties’ application submitted to Foreign Trade &Economic Cooperation Bureau of Yinzhou District, Ningbo, PRC for the formationof a Sino-foreign equity joint venture. (“EJV Application”).  The Partiesacknowledge that the approval of the EJV Application is a condition precedentto this Agreement.  If Party B’s EJVApplication is not approved, then this Agreement is void.

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# IX.                                TheAgreement shall be made in triplicate, with each Party holding a copyrespectively and the Surveyor holding the remaining copy.

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| Party A (Seal):           |                 | Party B (Seal):                                          |
|---------------------------|----------------------|----------------------------------------------------------|
|                      |                 |                                                     |
|                      |                 |                                                     |
| Legal Representative:     | \s\ Chen Ding  Long  |                                                     |   | Legal  Representative: | \s\ Paul D.  Melnuk |   |
| Chen Ding Long

President |                 | Paul D. Melnuk

President &  Chief Executive Officer |
|                      | (Signature and Seal) |                                                     | (Signature and  seal) |
| Date: 1/19/2005           |                 |                                                     | Date: 1/19/2005 |
|                           |                      |                                                          |  |  |  |  |

 

 

Surveyor (Seal): 

Date of Survey:

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