exhibit1013.htm


    
      
         


      

      
         


        
          

        

      

      EXHIBIT 10.13

    


    Agreement
No.: DS200802ZL001(A)

     

    Factory
Premises and Dormitories Lease Agreement

     

    Party A:
Desai (Huizhou) Group Co., Ltd.

     

    Party B:
Merik Circuits (Huizhou) Co., Ltd.

     

    In
accordance with relevant laws and regulations of the People’s Republic of China,
this agreement is made as follows by both parties through friendly consultation.
Party A agrees to lease the following factory premises, dormitories, and open
space with fences to Party B.

     

    I
Premise Name, Venue, Area, Unit Price, Total Rent, and Purpose of
Use

     

    
      	
               Premise

            	
              Venue

            	 
      	 
      	
              Area

            	 
      	
              Unit
      Price

            	
              Total
      Rent

            	
              Purpose

            	 
      	 
      	
              Note

            	 
      
	
               Name

            	 
      	 
      	 
      	
              (M2)

            	 
      	
              (RMB/M2/Month)

            	
              (RMB)

            	
              of  Use

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
               Factory
      premise

            	
              Gutangao

            	 
      	 
      	
              13,929.28

            	 
      	
              8.5

            	
              118,398.88

            	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
               Dormitory

            	
              Gutangao

            	 
      	 
      	
              5,198.59

            	 
      	
              7.5

            	
              38,989.43

            	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
               Open
      space

            	
              Gutangao

            	 
      	 
      	
              1,1095.37

            	 
      	
              2.82

            	
              31,207.22

            	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
               Total

            	 
      	 
      	 
      	 
      	 
      	 
      	
              188,595.53

            	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      


    

    (Note:
The data listed in the above table is for 2008).

     

    II
Lease Term

     

    
      	
               
      

            	
              1.

            	
              The
      lease term is 3 years, which
      shall be from January 1, 2008 to December 31, 2010.

            


    

     

    
      	
               
      

            	
              2.

            	
              During
      this lease term, the rent shall be adjusted based on previous year’s rent.
      The adjustment shall begin on January 1, 2008. The
      adjustment rate for both year 2009 and 2010 is temporarily set to 6% (Next
      year’s rent shall be determined by both parties in
    October).

            


    

     

    III
Rent, Payment Method, and Term

     

    Party B
shall pay to Party A a monthly rent of RMB 188,595.53. Party B
shall deposit the monthly rent in full to the bank account designated by Party A
before the 10th day
every month. Upon expiration date of this contract, if party B intends to
continue to rent, he shall inform party A one month in advance. After
confirmation by Party A, the agreement can be renewed through
consultation.

     

    IV
Payment Method for Utilities

     

    Party B
shall pay for the power and water used in the aforementioned factory premises
and dormitories on time every month. The amount of the utilities shall be
determined based on the actual usage, and be in accordance with the relevant
agreements set by the property management company.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    V
Water and Power Supply

     

    
      	
               
      

            	
              1.

            	
              Party
      B shall be responsible for the installation of the 1 KVA power
      supply equipments. Upon the expiration or termination of this agreement,
      Party B can take away the aforementioned equipments, or offer a price to
      sell them to Party A.

            


    

     

    
      	
               
      

            	
              2.

            	
              Party
      B shall not alter the power wires, or the water pipelines without Party
      A’s approval. Party B shall not overuse the power of water, and he shall
      undertake all the responsibilities and make up the loss of Party A which
      is caused by such overuse of power and
water.

            


    

     

    
      	
               
      

            	
              3.

            	
              Party
      A shall be responsible for the water and power supply for the
      aforementioned factory premises and dormitories (except for the failures
      due to power or water service providers’ problems, or other unexpected
      events).

            


    

     

    VI
Security and Hygiene Management

     

    
      	
               
      

            	
              1.

            	
              Party
      A shall be responsible for the security and hygiene management in the
      industrial area. Party B shall pay to Party A a monthly fee based on the
      actual total areas of the leasing premises. The security fee is RMB
      l/m2/month,
      and the hygiene maintenance fee is RMB l/m2/month.
      The security fee and the hygiene maintenance fee shall be paid to the
      property management company before the 10th
      day every month.

            


    

     

    
      	
               
      

            	
              2.

            	
              The
      security and hygiene management within the aforementioned leasing
      properties, such as factory premises, dormitories, and open space, shall
      be Party B’s responsibility.

            


    

     

    VII
Production Safety

     

    
      	
               
      

            	
              1.

            	
              Party
      B shall be responsible for the production safety and management, and shall
      undertake all the responsibilities and make up the loss of Party A or
      third parties which is caused by accidents during
    production.

            


    

     

    
      	
               
      

            	
              2.

            	
              Party
      A shall have the right to enter the leasing factory premises, dormitories,
      and open space periodically or randomly to conduct safety inspections.
      Party B shall cooperate with Party A with such inspections. Shall any
      safety risks be identified, Party B shall take immediate
      actions.

            


    

     

    VIII
Responsibilities

     

    
      	
               
      

            	
              1.

            	
              During
      the lease term, if Party B needs to make modifications to the factory
      premises or dormitories, Party B shall send a proposal to Party A before
      such modifications take place. Party B shall not change the usage and
      construction of the leasing items until Party B receives the approval from
      Party A. If permitted, all expenses of the reformation or improvement
      shall be undertaken by party B.

            


    

     

    
      	
               
      

            	
              2.

            	
              Before
      Party A delivers the leasing premises to Party B, Party A shall make sure
      that all premises and related facilities operate as expected. During the
      lease term, Party B shall use the factory premises, dormitories, and other
      related facilities with care, and be responsible for routine maintenance
      and cleaning. In case of leaking or damage of the leasing premises due to
      Party B’s inappropriate use or reformation, Party B shall make repairs
      immediately.

            


    

     

    
      	
               
      

            	
              3.

            	
              If
      Party B’s production is seriously affected due to the defects of the
      factory premises or dormitories, Party A shall take immediate action to
      make repairs, and undertake all expenses of such
  repairs.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


     

    IX
Responsibilities upon Expiration of this Agreement

     

    
      	
               
      

            	
              1.

            	
              Upon
      expiration of this agreement, if Party A accepts the improvements or
      reformations made by Party B, Party B shall hand over such improvements or
      reformations to Party A free of charge. If Party A doesn’t accept them,
      party B shall be responsible for restoring the premises to their original
      state.

            


    

     

    
      	
               
      

            	
              2.

            	
              Within
      one month after the expiration date, Party B shall move its equipments and
      resources out of the factory premises. All Party B’s workers shall not
      enter the factory premises. Party B shall make repairs to damaged
      premises, and deliver the leasing premises to Party A after both parties
      finish the inspection.

            


    

     

    X
Liabilities for Breach of Agreement

     

    
      	
               
      

            	
              1.

            	
              During
      the lease term, in case the rent is 7 working days overdue, Party B shall
      pay to Party A a penalty fee of 0.05% of the total overdue rent every day
      (excluding the seven working day grace period). If Party B fails to make
      payment of the rent in full for more than two consecutive months, Party A
      has the right to unilaterally terminate this agreement, to order Party B
      to pay all outstanding rent and/or other fees, and to ask Party B to pay a
      penalty fee that is equivalent to three months’ rent. After Party A
      notifies Party B, Party A has the right to cut the supply of water and
      power. Party B shall be responsible for its own loss due to such water or
      power outage. Party A also has the right to ask Party B to move all its
      equipments and resources out of the factory premises and the open space,
      and to give the factory premises, dormitories, and open space back to
      Party A. If Party B fails to move its equipments and resources from the
      factory premises, dormitories, and open space after one month, Party A has
      the right to posses the aforementioned equipments and
      resources.

            


    

     

    
      	
               
      

            	
              2.

            	
              Party
      B shall pay the utility fee on time. In case the utility fee is 7 working
      days overdue, Party B shall pay to Party A a penalty fee of 0.05% of the
      total overdue utility fee every day (excluding the seven working day grace
      period). Party A has the right to cut the supply of power and/or water
      shall Party B fail to pay the utility fee for more than 1 consecutive
      month, and has the right to unilaterally terminate this agreement shall
      Party B fail to pay the utility fee for more than 2 consecutive
      months.

            


    

     

    
      	
               
      

            	
              3.

            	
              During
      the lease term, any party who unilaterally terminates the agreement, the
      breaching party shall pay to the other party a penalty fee that is
      equivalent to three month’s rent.

            


    

     

    
      	
               
      

            	
              4.

            	
              All
      leasing premises, including the factory premises, dormitories, and open
      space, shall be used only for the purposes in accordance with this
      agreement. Party B shall not change the purpose of use, or sublease them
      to a third party. Otherwise, Party A has the right to unilaterally
      terminate the agreement.

            


    

     

    
      	
               
      

            	
              5.

            	
              Party
      A shall be responsible for Party B’s loss due to the defects of the body
      and/or structure of the leasing
premises.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    XI
Miscellaneous

     

    
      	
               
      

            	
              1.

            	
              During
      the lease term, both parties shall be responsible for its own loss due to
      force majeure.

            


    

     

    
      	
               
      

            	
              2.

            	
              Party
      B should cover insurance for the leasing factory premises and dormitories.
      Otherwise, Party B shall undertake the loss to Party A, if Party B fails
      to cover the insurance.

            


    

     

    
      	
               
      

            	
              3.

            	
              In
      case of anything not covered here, it shall be settled by both parties
      through consultation.

            


    

     

    
      	
               
      

            	
              4.

            	
              This
      agreement shall be written in two originals. Each party shall hold one of
      them. This agreement shall be effective as of the date of
      signature.

            


    

    
      	 
      	 
      	 
      
	
              Party
      A: Desai (Huizhou) Group Co., Ltd

            	 
      	
              Party
      B: Merik Circuits (Huizhou) Co., Ltd.

            
	 
      	 
      	 
      
	
              Represented
      by:

            	 
      	
              Represented
      by: (SIGNATURE)

            
	 
      	 
      	 
      
	 
      	 
      	
              [Official
      seal of Merik

              Circuits
      (Huizhou) Co., Ltd]

            


    

     

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year____ month ____ day