exv10w3






Exhibit 10.3




Contract for Grant of State-owned Land Use Right




Contract No.:




Made by

Ministry of Land and Resources



and

State Administration of Industry and Commerce



Section 1 General Guidelines




Article 1 Parties to the Contract



Grantor: Gongqing City Bureau of Land, Environmental Protection and Construction, Jiujiang
City, Jiangxi Province, People’s Republic of China



Grantee: Jiangxi Nobao Electro Co., Ltd.




     Pursuant to the Land Management Law of the People’s Republic of China, the Real Estate
Management Law for Urban Areas of the People’s Republic of China, and the Contract Law of the
People’s Republic of China, and other relevant laws, administrative regulations and local
regulations, the parties enter into this contract in the principles of equality, free will,
consideration and good faith.



Article 2



The Grantor is authorized by law to grant the land use right hereunder, and the land to be granted
hereunder is owned by the People’s Republic of China. The State, under the Constitution and the
law, has judicial and administrative jurisdiction over the land; under the law of the People’s
Republic of China, has other state powers in connection therewith; and in consideration of the
public welfare, has other rights and interests in connection therewith. Subterranean resources,
buried things and municipal public utility facilities are not within the scope of the grant
hereunder.




Section 2 Delivery of Land, Payment of Land Premium




Article 3



The land plot in connection with this grant is located at 1, Dongcheng Avenue, Gongqing
City. The plot number is ___/____. The area of the land in the plot is Two Hundred and
Thirteen Thousand Three Hundred and Thirty-Three Point Three (in words) square meters and
213,333.3 (in figures) square meters, of which ___/___ square meters (___/___ square meters)
will be granted






 









 







hereunder. The boundaries of the plot and the coordinates of its location are as indicated in the
attachment [Boundaries of the Plot].




Article 4



The land to be granted hereunder will be used for industrial purposes.




Article 5



The Grantor agrees to deliver the land to the Grantee before July 30, 2005. The Grantor
also agrees that on the delivery date, the land in question shall meet the conditions set forth in
clause (3) hereunder.





	(1)	 	The land shall be leveled out and accessible to the ___ utilities facilities, i.e.,
                                                            /                    
                                        .
	 
	(2)	 	The land hereunder is accessible to the utilities facilities, i.e.,
                                                            /                    
                                        , but buildings on the site have not been
demolished and the site has not been leveled out. The buildings and the structures on the
land are in the following conditions:
	 
	(3)	 	“as is” conditions.





Article 6



The term of the granted land use right hereunder shall be fifty years, starting from the
date of the actual delivery of the land by the Grantor to the Grantee. If the land in question is
allocated land for which allocation formalities need to be completed for its use, the term of the
allocation shall start from the execution date of this Contract.




Article 7



The land premium of the land use right to be granted hereunder shall be RMB Fifty-Six (in
words) per square meter and RMB56 (in figures) per square meter. The total price of the
grant is RMB Eleven Million Nine Hundred and Forty Thousand (in words) andRMB
11,940,000 (in figures).




Article 8



Within ____/___ days after the parties hereto execute this Contract, the Grantee shall pay
the Grantor RMB___/___ (in words) RMB ___/___ (in figures) as security deposit for its performance
hereunder. The deposit may be used to set off the land premium.




Article 9








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The Grantee agrees to pay the Grantor the said land premium in accordance with clause (2)
below:





	(1)	 	Within ___/___ days after the execution of this Contract, the Grantee shall make full payment
of the land premium in a lump sum.
	 
	(2)	 	The Grantee shall pay the land premium in multiple installments, in amounts and at
times set forth below. The specific payment terms are to be agreed upon and implemented upon
the consultation between the Grantee and the local government.





	 	 	 	 	 
	First Installment

	 	Amount

RMB                     /                     (in words)

RMB                     /                     (in figures)
	 	Time of Payment:

Before ___/___
	Second Installment

	 	Amount

RMB                     /                     (in words)

RMB                     /                     (in figures)
	 	Time of Payment:

Before ___/___
	___/___ Installment

	 	Amount

RMB                     /                     (in words)

RMB                     /                     (in figures)
	 	Time of Payment:

Before ___/___
	___/___ Installment

	 	Amount

RMB                     /                     (in words)

RMB                     /                     (in figures)
	 	Time of Payment:

Before ___/___





If the land premium is paid by installment, the Grantee shall pay interest to the Grantor for the
second installment and those thereafter at the rate of bank loans of the same term.




Section 3 Land Development, Construction and Use




Article 10



Within 30 days after the execution of this Contract, the parties hereto shall inspect on
the spot the land posts at the various points as indicated by the Boundaries of the Plot attached
hereto. The Grantee shall take proper measures to protect the land posts and shall not remove such
posts without prior approval. If the land posts are damaged or removed, the Grantee shall promptly
serve a written request on the Grantor for a resurvey of the land and restoration of the land
posts.




Article 11



If the Grantee intends to build new structures within the land to be granted hereunder, the
following conditions shall be met:



The main building shall be a                                                             /   
                                                          type of building.






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The supporting buildings shall be a                                                             /  
                                                           type of building.

The plot ratio shall be                                                             /            
                                                .




Building density shall be                                                             /       
                                                     .

Building height may not exceed                                                             /           
                                                 .




The ratio of foliage to non-foliage shall be                                         /                     
                   .

Conditions for land use shall be in compliance with the construction requirements of the State

for land of industrial purposes.




Article 12



The Grantee agrees to build the following structures on the land to be granted hereunder, to be
gratuitously handed over to the government after the completion of these structures:



(1)     /



(2)     /



(3)     /




Article 13



The Grantee agrees to start the construction before ___/___.



If it is unable to start the construction as planned, it shall submit to the Grantor a request for
postponement 30 days in advance. However, no postponement shall exceed one year.




Article 14



When the Grantee carries on construction activities on the land to be granted hereunder, the
connection of water pipes, gas pipes, sewage pipes and other facilities with the main pipes, lines
and power stations outside the land, as well as projects to reach out to such outside facilities,
shall be handled according to relevant provisions.



The Grantee agrees that the government shall have the right to enter into, pass and cross the land
to be granted hereunder for purpose of laying various pipes and lines for public utilities
facilities.




Article 15



Within 30 days after the Grantee makes full payment of the land premium in accordance with this
Contract, it shall, bringing this Contract and documentation of payment of the land premium, apply
to the Grantor for land registration in accordance with relevant regulations, procure a Land Use
Right Certificate for State-owned Land, and obtain the land use right in connection with the land
to be granted.





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Within 30 days after the filing of the land registration application, the Grantor shall
complete the registration of the land use right for the Grantee in accordance with the law, and
issue the Land Use Right Certificate for State-owned Land.




Article 16



The Grantee shall use the land in a reasonable manner in accordance with the law. Its activities
on the land to be granted hereunder shall in no way damage the environment or destroy the
facilities in the surrounding area. If its activities cause damages or losses to the State or to
any individual, the Grantee shall be held liable for damages.




Article 17



During the term of the grant, the Grantee shall use the land only in manners provided for hereunder
with respect to land use and conditions of land use. When it is necessary to change the land use
and conditions of land use herein, the Grantee shall complete relevant formalities for approval in
accordance with the law, apply to the Grantor for approval, execute an amendment to this Contract
or enter into a new grant of land use rights contract, adjust the land premium, and complete the
registration for change of land use.




Article 18



The government shall reserve its right to adjust the zoning plan with respect to the land
hereunder. If the existing plan for land use is modified, the buildings on the land in question
shall not be affected. However, upon the expiration of the term of land use, the renovation and
reconstruction of the buildings and supporting facilities that are completed on the land during the
term, and renewal of this Contract upon its expiration, shall be subject to the then effective
zoning plan.




Article 19



Before the expiration of the term, the Grantor shall not take back the land use right that the
Grantee lawfully acquired. When, under special circumstances and in the public’s interest, it
becomes necessary to take back the land use right prior to the expiration of this Contract, the
Grantor shall submit its application for approval in accordance with the procedural required by
law, and compensate the Grantee on the basis of the value of the buildings and other supporting
facilities on the land, as well as the land premium for the remaining years of the term.




Section 4 Transfer, Lease and Mortgage of Land Use Right




Article 20



After the Grantee has made full payment of the land premium in accordance with this Contract,
procured the Land Use Right Certificate for State-owned Land, and obtained the land use right in
connection with the land to be granted, it shall have the right to transfer, lease, or mortgage the






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whole or part of the land use right hereunder. However, for the first transfer (including sale,
exchange or donation) of the land use right for the years remaining in the term, the Grantor must
confirm that the following conditions under clause ___/___below are met:





	(1)	 	The Grantee has conducted its investment and development activities in accordance with the
provisions herein, and has completed the development of a part constituting 25% of the total
investment.






	(2)	 	The Grantee has conducted its investment and development activities in accordance with the
provisions herein, and the land in question has been suitable for industrial or other
development purposes.





Article 21



For transfer or mortgage of the land use right hereunder, the parties to such transfer or mortgage
shall enter into a written contract for such transfer or mortgage. For lease of the land use right
hereunder for more than 6 months, the parties to such lease shall enter into a written lease
contract.



Contracts for transfer, mortgage or lease of the land use right hereunder shall not violate the
laws and regulations of the State and the provisions of this Contract.




Article 22



The rights and obligations set forth in this Contract and in the registration document shall pass
to the new party when the land use right is transferred. The transferred land use right shall have
a term that is the term hereunder less the years within the term that have already elapsed. Upon
the lease of the whole or a part of the land use right hereunder, the rights and obligations set
forth in this Contract and in the registration document shall continue to be assumed by the
Grantee.




Article 23



When the land use right is transferred, leased, or mortgaged, the buildings on the land as well as
other supporting facilities are also transferred, leased or mortgaged. When the buildings on the
land as well as other supporting facilities are transferred, leased, or mortgaged, the land use
right in connection therewith is also transferred, leased or mortgaged.




Article 24



When the land use right is transferred, leased, or mortgaged, the parties thereto shall apply for
land registration with the land administration department within 30 days after the execution of the
relevant contract, bringing this Contract, relevant transfer contract, lease or mortgage, and the
Land Use Right Certificate for State-owned Land.








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Section 5 Expiration of Term




Article 25



When the land user needs to continue its use of the land hereunder upon expiration of the term
agreed upon hereunder, it shall submit an application for renewal of the term at least one year
prior to the expiration of the term. The Grantor shall approve such application unless it will
take back the land for public interest.



When the Grantor agrees to such renewal, the Grantee shall complete relevant formalities for use of
land for consideration in accordance with the law, enter into a contract with the Grantor for the
use of the land for consideration and pay a land use fee.




Article 26



When the Grantee does not apply for renewal upon the expiration of the term, or when the Grantee
applies for renewal but the renewal is not approved as provided for in Article 25 hereunder, the
Grantee shall return the Land Use Right Certificate for State-owned Land, and the Grantor shall
take back the land use right on behalf of the State, and complete the registration for cancellation
of land use right in accordance with relevant provisions.




Article 27



When the Grantee does not apply for renewal upon the expiration of the term, the land use right
hereunder as well as the buildings and other supporting facilities on the land shall be taken back
free of charge by the Grantor on behalf of the State. The Grantee shall keep the buildings and
other supporting facilities on the land fit for normal use, and shall not intentionally damage or
destroy the buildings or other supporting facilities. If the buildings or other supporting
facilities on the land are unfit for normal use, the Grantor may request that the Grantee remove or
demolish such buildings and facilities and level the site.




Article 28



When the Grantee applies for renewal upon expiration of the term but the renewal is not approved as
provided for in Article 25 hereunder, the Land Use Right Certificate for State-owned Land shall be
taken back by the Grantor on behalf of the State. But the Grantor shall compensate the Grantee for
the buildings on the land and other supporting facilities on the basis of their residue value.




Section 6 Force Majeure




Article 29



Neither party shall be held liable for failure to perform part or all of its obligations hereunder
due to force majeure. However, such party shall take all necessary remedial steps to mitigate the






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losses caused by force majeure to the extent permitted by circumstances. If a force majeure event
occurs after a party has delayed its performance, such party shall not be excused from liability.




Article 30



The party hindered by a force majeure event shall notify the other party in writing, by mail,
telegram, cable or fax regarding the force majeure event within
24 hours after the
occurrence of such event, and shall send to the other party a report
within 3 days
explaining the reasons for its failure to perform in full, or in part as the case may be, its
obligations hereunder, or the need for a delay of its performance hereunder.




Section 7 Liabilities for Breach




Article 31



The Grantee shall pay the land premium as provided for in this Contract. For failure to make
timely payment of the land premium, the Grantee shall pay to Grantor a penalty of ___/___‰ of the
amount due for each day of delay. When the delay is over 6 months, the Grantor shall have the
right to terminate the Contract, take back the land use right grant, and the Grantee shall forfeit
its right to the deposit. The Grantor may also seek damages from the Grantee for its losses
resulting from such breach.




Article 32



When the Grantee has paid the land premium in accordance with the Contract, the Grantor shall
deliver the land hereunder in accordance herewith. If failure on the part of the Grantor to timely
deliver the land has delayed the Grantee’s possession of such land, the Grantor shall pay as
damages ___/___‰ of the land premium already paid by the Grantor for each day of the delay. When
the delay is over 6 months, the Grantor shall have the right to terminate this Contract, and the
Grantor shall return to the Grantee a sum that is twice as much as the deposit, as well as the
(remaining) part of the land premium already paid. The Grantee may also seek damages from the
Grantor for losses resulting from such breach.




Article 33



The Grantee shall develop the land in accordance with the Contract. If one year after the date of
commencing such development set forth hereunder, the Grantee has still not started developing the
land, the Grantor may seek a land idle fee, up to 20% of the land premium, from the Grantee for
leaving the land unused. If two years after the date of commencing such development set forth
hereunder the Grantee has still not started developing the land, except for delays caused by events
of force majeure, government acts, or the preparative work prior to commencement of such
development, the Grantor may take back the land without any compensation to the Grantee.




Article 34







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If the land delivered by the Grantor fails to meet the conditions hereunder, the Grantor shall be
deemed to be in breach. The Grantee shall have the right to demand that the Grantor perform its
obligations hereunder in accordance with the Contract, and compensate the Grantee for its losses
directly resulting from such delay in performance.




Section 8 Notices and Statements




Article 35



Notices and other communications required or permitted hereunder shall be deemed effective on the
day of their actual receipt, no matter how they are transmitted.




Article 36



When either party changes its address for service of notices and other communications, or its bank
or bank account, it shall notify the other party of the new address, the new bank or the new bank
account within 15 days after the changes. If one party’s delay in serving such notices causes
losses to the other party, the party that delayed service notice shall be liable for the other
party’s losses.




Article 37



When this Contract is being executed, the Grantor has the obligation to answer questions raised by
the Grantee in connection with the Contract.




Section 9 Applicable Law and Dispute Resolution




Article 38



The execution, validity, interpretation, and performance of this Contract as well as settlement of
disputes arising herefrom shall be governed by the law of the People’s Republic of China.




Article 39



Any dispute arising out of the performance of this Contract shall be resolved by the parties
through negotiation. If the parties are unable to settle such dispute through negotiation, the
dispute shall be resolved in a manner prescribed in clause (1) hereunder.





	(1)	 	referring the dispute to the Arbitration Commission of Gongqing City Development Zone
for arbitration; or
	 
	(2)	 	filing a lawsuit with a People’s Court in accordance with the law.





Section 10 Other Provisions






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Article 40



This Contract will become effective in accordance with clause (2) hereunder:





	(1)	 	If the plan for granting the land hereunder has been approved by the People’s Government of
___/___, the Contract will become effective upon its execution by both parties.






	(2)	 	If the plan for granting the land hereunder has yet to be approved by the People’s Government
of Gongqing City Development Zone, the Contract will become effective upon approval by
the People’s Government of Gongqing City Development Zone.





Article 41



This Contract shall have two counterparts of equal legal force. The Grantor and the
Grantee shall each hold one counterpart.




Article 42



This Contract and its attachment, totaling 13 pages, are prepared in Chinese and the
Chinese version shall prevail.




Article 43



Amounts and area numbers shall be indicated both with words and with figures. Words and figures
indicating the same amount or number shall be identical. If they are different, the words shall
control.




Article 44



This Contract is executed as of July 4, 2005 in Gongqing City, Jiangxi Province,
People’s Republic of China.




Article 45



Matters not covered in this Contract shall be included in attached agreements between the parties,
and such attached agreements shall be of the same validity as this Contract.








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	Grantor (Seal):

	 	Grantee (Seal):
	 
	 	 
	Gongqing City Bureau of Land,
Environmental Protection and
Construction

	 	Jiangxi Nobao Electro Co., Ltd.
	 
	 	 
	Domicile:

	 	Domicile:
	 
	 	 
	Legal Representative (Authorized 

Representative):

	 	Legal Representative (Authorized

Representative):
	 
	 	 
	          Signature: Zou Jianguo

	 	          Signature: Kwok Ping Sun
	 
	 	 
	Tel:

	 	Tel:
	 
	 	 
	Fax:

	 	Fax:
	 
	 	 
	Telegram:

	 	Telegram:
	 
	 	 
	Opening Bank:

	 	Opening Bank:
	 
	 	 
	Account No.:

	 	Account No.:
	 
	 	 
	Postal Code:

	 	Postal Code:






Date: July 4, 2005







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Attachment: Boundaries of the Land Plot (length of each side: ____ meters)




Land Plot Layout of Jiangxi Nobao Electro Co., Ltd.



Jiangxi Nobao Electro Co., Ltd.

Surveyed by: Gongqing City Bureau of Land, Environmental Protection and Construction

Legend: 1:3000

Date: April 25, 2005




(Map)
Land Area: 213,333.3 sqm (320 mu)






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Supplementary Agreement





			
	Party A:	 	Management Committee of Gongqing City Development Zone, Jiangxi

Legal Representative: Li Xiaogang






			
	Party B:	 	Jiangxi Nobao Electro Co., Ltd.

Legal Representative: Kwok Ping Sun


To facilitate the construction of Jiangxi Nobao project, it is further agreed that:




1. Party B will expand its scope of business. To support the development of Jiangxi Nobao,
Shanghai Nobao will arrange its import business to be conducted by Jiangxi Nobao and Party A will
assist Party B in coordinating customs and foreign trade procedures by forming a coordination team.



2. Party B’s project is of an energy-saving and environmental-friendly nature. To support Party
B’s project development, pursuant to the preferential investment policies of the development zone
in 2005 and the current price of land and plant buildings, the parties agree that the reasonable
price of the land and the plant buildings shall be RMB6 million.



3. As the project construction is in progress, to support Party B’s project, Party A allows Party B
to pay the foresaid price in four annual installment payments. The first annual installment will be
paid between September 2007 and September 2008 and the subsequent installments will be paid at same
intervals. Agreements on payment by installment may be established in a legally effective manner.
Party B may pay up the price ahead of the agreed schedule according to the status of its operating
capital.



4. Upon the start-up of Party B’s production, the scope of Party A’s urban management duties will
extend to the gate of Party B’s facility; the road lamps, cleaning and garbage collecting
facilities will be in place as those in the urban area.



5. Due to the remote location of Party B’s project, Party A will provide security service to Party
B by setting up a security guard’s room on the premises provided by Party B.



6. This agreement is made in duplicate and each party shall hold one copy.




          Party A:     Xia Xing (signature)

          Official Seal: Management Committee of Gongqing City Development Zone, Jiangxi




          Party B:     Sun Guoping (signature)

          Official Seal: Jiangxi Nobao Electro Co., Ltd.




November 3, 2007





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