Contract

    No.:
      (2003) Hao He Zi No.1

    


    The
      three
      parties in this contract are:

    Party
      A:
      Haoran Industrial Company, Huicheng District, Huizhou City

    Legal
      Representative: Zhong Guanbin    Title: Chairman of the board


    Address:
      Xinjian Road No. 52, Huizhou City

     

    Party
      B:
      HuiZhou NIVS AUDIO & VIDEO TECH CO.,LTD

    Legal
      Representative: Li
      Tianfu              
Title: General Manager

    Address:
      NIVS Hi-tech Park, Wushi Industrial area, Huizhou City

     

    Party
      C:
      Shuikou County Real Estate Development Corporation

    Legal
      Representative: Xu
      Zhaofa            Title:
      General Manager

    Address:
      Shuikou County, Huizhou City

     

    In
      accordance with the stipulations in the relevant national laws and regulations,
      on the principles of equality, voluntary willingness, compensation as well
      as
      honest and credit, the three parties concluded this contract through
      negotiations.

     

    Article
      1. Party A transfers the use right of the land that is located in Wei Village,
      Lianhe Ridge, Shuikou County (the part near to the fourth ring) with an area
      of
      184,810 square meters to Party B.

     

    The
      ownership of the land has been identified by Municipal Land and Resources Bureau
      and the certificate has been issued. The original “State-Owned Land Use
      Certificate” No. is Hui Fu Guo Yong (2003) No. 1321161017. The land No. is
      16-02-3255. The land’s map No. is F-50-25-148. Regarding to its detailed
      location and the coordination of the boundary points, please refer to the map
      in
      the appendix. The transfer term for this land is 40 years. The term will expire
      on July 18th,
      2042.
      The land use nature is for industrial use. Upon the completion of the transfer,
      two state-owned land use certificates will be transferred to the name of Party
      B, with the areas of 124,810 square meters and 60,000 square meters
      respectively.

     

    The
      use
      right of the building, auxiliaries as well as the land use right within the
      mentioned land scope are transferred to Party B together. Party B has no any
      objection on the current status of the land. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Upon
      the
      signature of this contract as well as Party B’s payment of the deposit, it will
      indicate that Party A has handed over the land to Party B. No other land
      transfer procedure shall be gone through separately. The state-owned land use
      certificate shall be handed over to Party B on the same day as the guarantee
      procedures are done in accordance with the stipulations in Article 6
      hereof.

     

    Article
      2. The concluded price for the land use transfer is eighteen million, seven
      hundred and ninety-nine thousand, nine hundred and eight-two RMB (amount in
      figures: 18,799,982 RMB). The unit price is 101.726 RMB/square
      meter.

     

    Article
      3. Payment terms. Through the mutual negotiations between Party A and Party
      B,
      they agree that the concluded price will be paid by the following
      installments.

     

    (1) On
      the
      date of concluding this contract, Party B will pay Party A 4,000,000
      RMB whole as the deposit.

     

    (2) The
      remaining part will be paid by installments. The way of payment by
      installment is: the payment will be started as of February 2004 (the month
      of
      February included) until all the transfer price is paid off. At least 1 million
      RMB (amount in figures: 1,000,000 RMB) shall be paid each month. The payment
      date shall be prior to the 15th
      day of
      each month.

     

    In
      case
      that Party B does not pay the transfer fee as stipulated here, Party B shall
      be
      liable for the breach penalty equivalent to 0.021% of the amount of overdue
      payment per overdue day. In case that Party B’s overdue payment accumulatively
      reaches or goes beyond 1,500,000 RMB, the total transfer fee will be due. Party
      A is entitled to demand for all the unpaid transfer fee, to withdraw the land
      use right as well as to ask Party B to undertake liabilities for all the
      economic losses.

     

    Article
      4. Party A is liable for all the taxes related to the transfer of land use
      right
      whatever the amount is. After the land use right has been transferred to the
      name of Party B, Party B shall be liable for the necessary taxes related to
      the
      retransfer, which has nothing to do with Party A.

     

    Article
      5. Upon Party A’s receipt of the deposit, Party A and Party B shall, with all
      the relevant materials, go through transfer registration procedures for the
      land
      use right in Land and Resource Bureau. Party A shall transfer the “Stated-Owned
      Land Use Certificate” to the name of Party B within 30 days as of the receipt of
      deposit.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Article
        6. Warranty

       

    

    (1) Before
      Party B pays off the land transfer fee, use right of the land with
      an
      area of 60,000 square meters in this transfer will be used as a mortgage. After
      going through the transfer procedures of State-Owned Land Use Certificate,
      Party
      A and Party B will conclude “Mortgage and Security Agreement”
separately.

     

    (2) Before
      paying off the entire land transfer fee, Party B agrees to use
      all
      the production equipments as the mortgage. Without Party A’s consent, Party B
      shall not move, sell, lease or mortgage its production equipment to the others.
      Provided that, within the mortgage term, Party B moves
      the
      assets, Party A is entitled to take necessary measures to stop it.

     

    (3) Before
      paying off the entire transfer fee, Party B promises that it will
      not
      change the shareholding structure and the legal representative.

     

    (4) Before
      paying off the entire transfer fee, Party B promises that it will
      not
      transfer the transferred land use right and the auxiliaries on the land
      externally.

     

    (5) Party
      B
      guarantees that it will begin to level the transfer land before
      February 28th,
      2004
      and complete the construction report and start construction before March
      30th,
      2004,
      otherwise, it will be regarded as Party B’s breach of the contract. Party A is
      entitled to terminate the contract and to withdraw the land use
      right.

     

    Article
      7. In case that Party A withholds the fact that such conditions as the ownership
      disputes, co-ownership, lease, mortgage, sealed-up or non-compliance with the
      transfer conditions exists in the land, Party A shall be undertaken the caused
      economic and legal liabilities for Party B. While going through the transfer
      procedures, Party A shall comply with the area stipulated in the contract,
      the
      land nature, the use terms and so on to proceed the title transfer registration
      formalities, and shall not make amendments, otherwise it will be regarded as
      a
      violation of the contract.

     

    Article
      8. Party B shall be responsible for leveling the transferred land and taking
      care of the facilities within the scope of the transferred land.

     

    Article
      9. Party C provides assistance in going through the transfer procedures of
      this
      contract, which guarantees that there is no dispute on the
      ownership.

     

    Article
      10. Party C guarantee that such infrastructures as water, electricity and
      communications will be connected until the border of the land before September
      15th,
      2004.
      Besides, the normal use and application of this mentioned infrastructures should
      be assured. Before March 15th,
      2004,
      it shall be assured that the roadbed will be established till the border of
      this
      land. Party A has a monitoring obligation towards this.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Article
      11. Party A agrees to pay 300,000 RMB to Party C as the administration fee.
      Party C has a duty of supervising the parties to strictly fulfill the
      stipulations herein within the contract’s validity term. In case that any
      dispute rise
      during the fulfillment hereof, Party C shall coordinate and find a
      solution.

     

    Article
      12. As for any other matters that are not stipulated in this contract, Party
      A
      and Party B may conclude agreements as the appendix to this contract that has
      the equal legal force as this contract has.

     

    Article
      13. The transferred area of the land in this contract that belongs to the
      original land division is not in keeping with the red line drawing. Therefore,
      before signing this contract, Party A, Party B and Party C shall mark a new
      red
      line drawing on the original red line drawing and seal it for confirmation.
      The
      new red line drawing shall be consistent with the new State-Owned Land
      Certificate as well as the map of the land. Besides, this new drawing shall
      be
      used as the first appendix to this contract.

     

    Article
      14. The conclusion, validity, interpretation, fulfillment and disputes of this
      contract are all governed by the laws of the People’s Republic of
      China.

     

    Article
      15. In case that any dispute rises due to the execution of this contract, the
      two disputing Parties or the three Parties try to settle them through
      negotiations. Provided that no agreement is reached, a lawsuit may be filed
      to
      the People’s Court in accordance with the law.

     

    Article
      16. This contract has four original copies. Party A, Party B, Party C and
      Shuikou County People’s Government holds one respectively.

     

    Article
      17. Upon the signature and the official seals of the three Parties’ legal
      representatives (or authorized agents), this contract enters into
      force.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Party
      A:
      Haoran Industrial Company, Huicheng District, Huizhou City (Seal)

    Legal
      Representative (signature and seal): /s/ Zhong Guanbin (Seal) 

     

    Date:
      November 24th,
      2003

     

    Party
      B:
      Huizhou NIVS AUDIO & VIDEO TECH CO., LTD (Seal)

    Legal
      Representative (signature and seal): /s/ Li Tianfu (Seal) 

     

    Date:
      November 24th,
      2003