|   | 1. | Description      of Facility: the facility is located at No. 1 South Tong Yuan Road, Ningbo      Camel Machinery & Electronics Industrial  Park. |
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|   | 2. | Term: |
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|  | a.  | the      term of this lease agreement is 10 years, from September 1, 2004 to August      31, 2013 |
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|  | b.  | upon      the expiration of this lease agreement, Party A has rights to take back      the facility. If Party B desires to renew the lease agreement, Party B      shall provide a written notice at least three months prior to the      expiration of the lease agreement. Upon approval by Party A, the parties      will enter into a new lease agreement based on the terms of this lease      agreement. |
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|   | 3. | Rent      and Payment Method: |
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|  | a.  | the      rent is RMB 80,000 per month and RMB 960,000 per  year. |
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|  | b.  | upon      the execution of this lease agreement, Party B shall make a deposit equals      to one month’s rent. Party B shall make a prepayment of three-month’s      rent. |
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|   | 4. | Maintenance      of the Facility: during the term of this lease agreement, if Party B      discovers any damage or problems with the facility or its ancillary      equipment, Party B shall notify Party A; Party A shall make the necessary      repair within 3 days after receipt of such notice; If Party A fails to      provide timely repair, Party B can make the repair and the related costs      shall be borne by Party A; During the term of this lease agreement, Party      B shall take reasonable care of the facility and its ancillary equipments.      Any damage to the facility caused by Party B’s unreasonable use shall be      repaired by Party B. |
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|   | 5. | Sublease      and Return of the Facility: Party B shall not sublease the facility to any      third party without prior written consent of Party A. If Party B subleases      the facility without Party A’s prior approval, Party A has no obligation      to return the deposit or rent. The facility shall be at workable condition      when Party B returns the facility to PartyA. |
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|   | 6. | Other      Agreements: during the term of this lease agreement, the parties shall      comply with the applicable laws and regulations; Party A shall have right      to urge and assist Party B in fire, safety and health related matter;      Party B can decorate the facility at its own expenses, provided that such      decoration does not affect the structure of the facility; If Party B fails      to make its rent payment for one month, Party A has right to a liquidated      damage of 5% of the due and unpaid rent and has right to terminate this      lease agreement; upon the expiration of this lease agreement, Party B has      right of first refusal. |
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|   | 7. | Miscellaneous:      during the term of  this lease agreement, if Party A terminates      the lease agreement in breach of this lease agreement, it shall pay Party      B a liquidated damage equals to 3-month’s rent; if Party B terminates the      lease in breach of this lease agreement, Party B shall pay Party A a      liquidated damage equals to 3-month’s rent. This lease agreement becomes      effective upon execution by bothparties. |
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| Party      A: Ningbo Huaye Steel Processing Co., Ltd. | Party      B: Ningbo Zhehua Heavy Steel PipeManufacturing      Co., Ltd. |
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| (Seal)                                                | (Seal)                                                                   |

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