Exhibit
10.9


 


LEASE AGREEMENT


 


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


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


 


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


 


I.                                         Party A
agrees to lease to Party B, for Party B’s use, a factory building with a
construction 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 manage
its business and bear all civil, economic and legal liabilities arising from
its operation.


 


II.                                     Lease Term

The initial term of the lease will be five years.  Lessor will deliver the leased buildings on
February 1, 2005 to Lessee for use. 
Party B has the option to renew for another five years on the same terms
as provided in this Lease.  To exercise
this option, Party B will notify Party A of its intention to renew for another
five years not less than thirty days prior to the expiration of the original
lease term.


 


III.                                 Rent
Computations and Payments


 


1.                                       Rent:  The rent will be RMB 14 per square meters per
month, starting from the effective date of this Agreement.  This price may be readjusted three years
thereafter in accordance with the rise of the then market leasing price.  Any rise or fall of the new rental shall not
exceed 10% of the previous rental.


 


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


 


IV.                                 Rights and
Obligations for the Parties during the Term


 


1.                                       Party A
shall deliver the said buildings to Party B as agreed herein, and, prior to the
delivery, shall provide conditions for electricity and water supply, green
space, paving and repair of roads and floors, and laying of network cables in
respect of Party B’s use.  Party A shall
also ensure that electricity supply to Party B shall be sufficient to meet the
daily production activities unless such 


 





















 


shortages are due to power
rationing imposed by the local government or any power failure beyond Party B’s
control.


 


2.                                       Any
renovations made to the buildings by Party B shall not change the designated
use of the building or its structure and also shall be subject to Party A’s
consent, which will not be unreasonably withheld.  Expenses for any renovations shall be borne
by Party B.


 


3.                                       Upon
expiration of this Agreement, Party B shall not seek from Party A any expenses
for such renovations, and shall ensure the intactness of the functionality of
the original equipment and facilities to the same extent as when the building
was delivered to Party B, ordinary wear and tear excepted.


 


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


 


V.                                     Liabilities
for Breach of Contract


 


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


 


2.                                       If either
Party terminates the Agreement during the lease without obtaining the consent
of the other Party, such Party shall be regarded as having breached the
contract, and shall bear liabilities for such breach.  All actual losses incurred as a result by
either Party shall be borne by the defaulting Party.


 


3.                                       If Party A
desires to continue to lease the buildings upon the expiration of the lease and
extension, Party B shall, under equal conditions, have the right of first
refusal in respect of the lease, and new terms and conditions shall be entered
into between the Parties upon mutual agreement through consultation.


 


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


 


VI.                                 Any matters
unspecified herein shall be supplemented upon mutual agreement through
consultation.  Such supplementary
provisions, if 


 


2





















 


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


 


VII.                             Any
disputes arising from the performance of this Agreement shall be settled
through consultation between the Parties. 
Where such consultation fails, the disputes shall be submitted for
arbitration at the place where Party A is located or for a lawsuit at a People’s
Court in accordance with the principles of territorial jurisdiction.


 


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


 


IX.                                The
Agreement shall be made in triplicate, with each Party holding a copy
respectively and the Surveyor holding the remaining copy.


 


	
  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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