Document:

Unassociated Document

    Supplementary
      Agreement 

    to
      Lease Agreement dated on 28th June 2004 —— 0701-01

    

    This
      Supplementary Agreement (hereinafter referred to as "the Supplementary
      Agreement") is entered into on December 31, 2007, in the city of Shanghai,
      by
      and between Shanghai Kai Hong Technology Co., Ltd. (hereinafter referred to
      as
      "Party A") with
      its
      registered office at No.1,
      Lane 18, SanZhuang Road Songjiang
      Export Processing Zone Shanghai, China
      and
      Shanghai Yuan Hao Electronic Co., Ltd. (hereinafter referred to as "Party B")
      with its registered office at No.1,
      Lane 18, SanZhuang Road Songjiang
      Export Processing Zone, Shanghai, China.

    

    Party
      A
      and Party B are collectively referred to as the “Parties” and each as a
“Party”.

    

    WHEREAS,

    

    
      	
              1.

            	
              Party
                A and Party B, on June 28th, 2004, entered into the Lease Agreement
                (hereinafter referred to as “the Lease Agreement”) of the First Floor and
                Second Floor of the building located at No.1
                Lane 18, SanZhuang Road Songjiang Export Processing Zone, Shanghai,
                China
                (“New Building”)
                that Party B is the owner representative and has the legal right
                for
                leasing the New Building and relevant facilities, including Distribution
                building, Power Building, Lobby (hereinafter referred to as “the Original
                Lease Areas”)

            

    

    

    
      	
              2.

            	
              Now
                through amicable discussion, Party B agrees to lease out and Party
                A
                agrees to lease in the Fourth and Fifth Floor of the New Building
                and
                relevant facilities, including Power Building and Lobby (see attachment)
                (hereinafter referred to as “the New Lease Areas”).
                

            

    

    

    The
      Parties enter into the Supplementary Agreement as follows:

    

    1.
      Gross Area of the New Lease Areas

    

    1.1
      The
      gross area of the Fourth Floor of the New Building (“Fourth Floor”)
      is
      3,243.4 square
      meters.

    1.2
      The
      gross area of the Fifth Floor of the New Building (“Fifth Floor”) is
      3,243.4 square
      meters.

    1.3
      The
      gross area of the Lobby of the New Building (“Lobby”) is 128
      square
      meters, and Party A will share 40% of the Lobby, which is 51.2
      square
      meters as a consequence of leasing the new area. The total gross area of the
      lease area (“Total Lease Area”) is 6,538
      square
      meters.

    1.4
      The
      gross area of the three-story Power Building that will be built to support
      the
      Fourth and Fifth Floor of the New Building is 960
      square
      meters with 320 square meters for each story. Party A will lease the three-story
      Power Building with a total area of 960
      square
      meters. 

    1.5
      Party
      B shall locate an empty land lot outside the New Building and appoint a
      construction operator with relevant qualification to build the Power Building
      and shall deliver the said Power Building to Party A for Party A’s use
      subsequent to the completion of such construction.

    1.6
      Party
      B agrees to install a new elevator for the New Building at its own
      expenses.

    

    2.
      Lease Term

    

    For
      the
      above New Lease Areas, the initial lease term is hereby from the date of 1
      March
      2007 to the date of 28 February 2012. The lease term shall be automatically
      renewed for successive five (5) year terms when the initial lease term expires
      unless Party A gives termination notice not less than 30 days before the
      expiration of any lease term. In its operating period, Party A has the priority
      to the New Lease Areas defined in this Supplementary Agreement and Party B
      shall
      not terminate this Supplementary Agreement without reasonable cause and Party
      A's consent in writing.

    

    For
      the
      renewal period, the items relating to the rental stipulated in Section 3 of
      the
      Supplementary Agreement shall be adjusted on the basis of the market price
      at
      that renewal time.

    

    3. Rental
      and Other Fees

    Party
      A
      agrees to pay Party B rental fee, Building Management Fee and Ground Lease
      Fee
      as follows:

    

    3.1
      Rental 

    The
      Parties agree that the monthly rental fee of the above New Lease Areas shall
      be
      as follows:

    
      	
              (1)

            	
              The
                gross area of the Fourth and Fifth floor of the New Building is
                6,486.80
                square meters, monthly rental fee is US$3.15
                per square meter and the total monthly rental fee shall be US$20,433.42.
                

            

    

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    
      	
              (2)

            	
              The
                gross area of the Lobby of the New Building is 128
                square meters, and Party A will share 40% of which is 51.2
                square
                meters as a consequence of leasing the new area, monthly rental fee
                is
                US$3.15
                per square meter and the total monthly rental fee shall be US$
                161.28.

            

    

    
      	(3)   
              	
              The
                gross area of the Power Building of the New Building for the Fourth
                and
                Fifth Floor is
                960 square
                meters, monthly rental fee is US$3.15
                per square meter and the total monthly rental fee shall be US$3,024.

            

    

    
      	(4)   
              	
              The
                total rental fee for the lease area shall be US$23,618.70
                .

            

    

    

    3.2
      Building Management Fee

    Party
      A
      agrees to pay Party B the Building Management Fee based on 5%
      of the
      monthly rental fee (US$23,618.70)
      referred in above Section 3.1. The total monthly Building Management Fee
      is
      US$1,180.94.
      

    Party
      B
      shall provide Party A the management service as below:

    
      	
              (1)

            	
              the
                Guard service for the public area outside of the Original Lease Areas
                and
                the New Lease Areas.

            

    

    
      	
              (2)

            	
              the
                maintenance and repairs of the buildings and facilities of the lease
                area.

            

    

    
      	
              (3)

            	
              the
                maintenance and repairs of the public facilities of the public factory
                area and buildings. 

            

    

    
      	
              (4)

            	
              the
                cleanliness and sanitation of the lease area and public area.
                

            

    

    
      	
              (5)

            	
              the
                landscaping of the lease area and public area, including the planting
                and
                maintenance.

            

    

    
      	
              (6)

            	
              other
                building management service to be provided by Party B.
                

            

    

    

    3.3
      Ground Lease Fee

    As
      the
      ground outside of the New Building is reduced to 5,906.5
      square
      meters due to the construction of the Power Building for the Fourth and Fifth
      Floor as set forth in the Sections 1.4 of this Supplementary Agreement, both
      Parties agree to modify the Section 4.3 of the Lease Agreement regarding the
      Ground Lease Fee upon the execution of this Supplementary Agreement into “Party
      A agrees to pay Ground Lease Fee on the 100%
      of the
      gross area of 5,906.5
      square
      meters as of 1 May 2007 (i.e. calculated at US$0.5
      per
      square meter, Party A shall pay monthly Ground Lease Fee of US$2,953.25,
      for
      Party A pays a monthly Ground Lease Fee of US$ 1,867.95
      under
      the
      Lease Agreement dated 1 March 2006, so the incremental Ground Lease Fee is
      US$
      1,085.30).”
      

    

    3.4
      Subject to the above figures in Section 1 and Section 3, Party A shall pay
      a
      total monthly fee of US$25,884.94
      to Party
      B under this Supplementary Agreement from 1 March 2007.

    

    

    3.5
      Rental-free Period

    

    3.5.1
      In
      consideration of Party A’s decoration projects for the Fourth and Fifth Floor of
      the New Building, Party B hereby grants Party A and Party A is entitled to
      a
      60-days rental-free period subsequent to Party B’s delivery of the Fourth and
      Fifth Floor of the New Building (i.e. from the date of 1 March 2007 to the
      date
      of 30 April 2007). During the above-said period, Party A shall not pay monthly
      rental fee or related Building Management Fee for the Fourth
      and Fifth Floor of the New Building to Party B.
      In case
      that Party B delays in delivery of the Fourth and Fifth Floor of the New
      Building to Party A, the above-said rental-free period shall be put off
      accordingly

    

    3.5.2
      Considering that it takes Party B certain time to build the Power Building
      for
      the Fourth and Fifth Floor of the New Building and Party B shall inspect and
      accept the work at its own expenses upon completion of construction before
      delivery to Party A for inspection and acceptance. The two Parties agree that
      Party B should deliver the Power Building to Party A for inspection and
      acceptance before 30 March 2007. Party B hereby grants Party A and Party A
      is
      entitled to a 30-days rental-free period subsequent to Party B’s delivery of the
      Power Building (i.e. from the date of 1 April 2007 to the date of 30 April
      2007). During the above-said period, Party A shall not pay monthly rental fee
      or
      related Building Management Fee for the Power Building to Party B. Party A
      should pay monthly rental fee or related Building Management Fee for the Power
      Building to Party B commencing from 1 May 2007. In case that Party B delays
      in
      delivery of the Power Building to Party A, the above-mentioned period shall
      be
      put off accordingly.

    

    4.
      Method of Payment

    

    Party
      A
      shall pay the rental fee in RMB to Party B before the first day of every month.
      Each month’s Rental fee in RMB shall be calculated according to the currency
      exchange rate formula as described in Exhibit A, attached hereto and made a
      part
      of this Supplementary Agreement. Monthly Rental fee prior to January 2008 shall
      be calculated based on the currency exchange rate data as described in Exhibit
      B, attached hereto and made a part of this Supplementary Agreement, using the
      currency exchange rate formula as described in Exhibit A.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    5.
      Deposit

    

    For
      the
      lease of the above lease area, Party A shall pay Party B a deposit amounting
      to
      US$24,704 within 10 days of the effective date of the Supplementary
      Agreement. Party A shall pay the Deposit in RMB (Yuan) according to the Median
      Rate of Exchanges published by the Bank of China on the day of payment to the
      RMB account as prescribed by Party B.

    

    6.
      Guarantees

    

    6.1
      Party
      B hereby guarantees that if part of or all of the New Building (including
      Original Lease Areas and New Lease Areas) are sold to any third party during
      the
      lease term period or the period of renewal, Party B shall notify Party A in
      writing 12 months before such sales and Party A shall have the first right
      of
      refusal for such sales subject to the same terms and conditions. If Party A
      has
      received such notice from Party B and Party A does not exercise its first right
      of refusal within 30 days upon receipt of the notice and has so replied to
      Party
      B, Party B may sell part of or all of the New Building (including Original
      Lease
      Areas and New Lease Areas) to the third party after 11 months of notification.
      However, Party B shall guarantee that the third party will continue the
      performance of the Lease Agreement and the Supplementary Agreement. In case
      that
      the third party fails to perform the Lease Agreement and the Supplementary
      Agreement, Party B shall compensate Party A for all of Party A’s losses and
      damages. Compensation should include, but not limited to, relocation fees and
      business operation losses.

    

    6.2
      In
      case that Party B mortgages part of or all of the New Building (including
      Original Lease Areas and New Lease Areas) to a third party, Party B shall notify
      Party A 30 days in advance. Any loss suffered by Party A for such mortgage
      shall
      be indemnified by Party B in full. Compensation should include, but not limited
      to, relocation fees and business operation losses.

    

    6.3
      Party
      B guarantees that before any part of the New Building beyond the Original Lease
      Areas and the New Lease Areas is leased to any third party, Party B shall notify
      Party A 30 days in advance and Party A shall have the first right of refusal
      with respect to such lease subject to the same terms and conditions. If Party
      A
      has received such notice and does not exercise its first right of refusal within
      30 days upon receipt of the notice and has so replied to Party B, Party B should
      disclose related information about the third party and lease such part of the
      New Building to the third party after getting Party A’s consent. If Party A does
      not consent to such a lease, Party B may lease such part of the New Building
      beyond the Original Lease Areas and New Lease Areas to the third party after
      12
      months of notification. However, Party B shall guarantee that such lease will
      not affect Party A’ s proper use of the Original Lease Areas and New Lease
      Areas. Party B shall indemnify Party A for any Party A’s damages or losses
      caused by such lease. Compensation should include but not limited to relocation
      fees and business operation losses.

    

    7.
      Entire
      Agreement

    

    This
      Supplementary Agreement comprises the entire understanding between the Parties
      with respect to its subject matters and supersedes any previous or
      contemporaneous communications, representations, or agreements, whether oral
      or
      written. For purposes of construction, this Supplementary Agreement will be
      deemed to have been drafted by both Parties. No modification of this
      Supplementary Agreement will be binding on either Party unless in writing and
      signed by an authorized representative of each Party.

    

    8.
      The
      Effective Date of the Supplementary Agreement

    

    The
      Supplementary Agreement shall become effective after the legal representatives
      or authorized representatives of both Parties affix their signatures and company
      seals on the Supplementary Agreement. The Supplementary Agreement forms an
      integral part of the Lease Agreement. If there is any discrepancy between the
      Lease Agreement and the Supplementary Agreement, this Supplementary Agreement
      shall prevail.

    

      
        	
                By:
                  Party A

              	
                By:
                  Party B

              
	
                Address:

              	
                Address:

              
	
                Attn.:

              	
                Attn.:

              
	
                Party
                  A:

              	
                Party
                  B:

              
	
                Representative:

              	
                Representative:

              
	
                Date:

              	
                Date:

              

      

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

       

    

    Exhibit
      A

    

    Currency
      Exchange Rate Formula

    

    Each
      month’s Rental fee shall be calculated and converted into an amount of Rental
      fee in RMB (“Rental fee in RMB”) for Party A to pay to Party B.

    

    Beginning
      from March 2007 until the termination month of the Lease Agreement, both Parties
      may each be responsible for fifty percent (50%) of any increase or decrease
      in
      Rental fee in RMB as a result of the fluctuation in the monthly currency
      exchange rate between US Dollars and RMB over a certain percentage as defined
      by
      the currency exchange rate formula below based on the Median Rate of Exchange
      published by the Bank of China (“US/RMB Exchange Rate”) on the first day of each
      month. 

    

    The
      currency exchange rate formula is as follows:

    

    
      	 	
              a)

            	
              “Adjusted
                US/RMB Exchange Rate”
                is defined as the currency exchange rate calculated based on Section
                (c)(i) below that will be used to calculate Party A’s monthly Rental fee
                in RMB to Party B. 

            

    

    

    
      	 	
              b)

            	
              The
                “initial
                US/RMB Exchange Rate”
                is defined as the US/RMB Exchange Rate of 1 U.S. Dollar to 8.277
                RMB.

            

    

    

    
      	 	
              c)

            	
              The
                Adjusted US/RMB Exchange Rate is calculated first by comparing the
                US/RMB
                Exchange Rate on the first day of each month with the Adjusted US/RMB
                Exchange Rate on the first day of the previous month (or the initial
                US/RMB Exchange Rate for calculating the US/RMB Exchange Rate for
                the
                month of March 2007):

            

    

    

    
      	 	
              i)

            	
              If
                the US/RMB Exchange Rate on the first day of a given month (“x”) is at
                least five percent (5%) less or more than the Adjusted US/RMB Exchange
                Rate on the first day of the previous month (or the initial US/RMB
                Exchange Rate for calculating the US/RMB Exchange Rate for the month
                of
                March 2007) (“y”), then both exchange rate numbers, x and y, shall be
                combined together and divided by 2 to produce a new Adjusted US/RMB
                Exchange Rate as the Adjusted US/RMB Exchange Rate that both Parties
                should use that month to calculate the correct Rental fee in
                RMB.

            

    

    

    
      	 	
              ii)

            	
              If
                the US/RMB Exchange Rate on the first day of a given month (“x”) is not at
                least five percent (5%) less or more than the Adjusted US/RMB Exchange
                Rate on the first day of the previous month (or the initial US/RMB
                Exchange Rate for calculating the US/RMB Exchange Rate for the month
                of
                March 2007) (“y”), then the previous month’s Adjusted US/RMB Exchange Rate
                (or the initial US/RMB Exchange Rate for calculating the Rental fee
                for
                March 2007), y, should continue be used to calculate the correct
                Rental
                fee in RMB that Party A should pay to Party B to satisfy that particular
                month’s Rental fee.

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    

    Exhibit
      B

    

    Historical
      Data of the US/RMB Exchange Rate

    from
      April 2007 to December 2007

    

    

      
        	 	 	 	
                
                  USD/RMB

                

              	 	 	
                Adjusted
                  USD/RMB

              	 
	 	
                Rent
                  Fee-USD

              	 	
                1St
                  of Mth

              	 	 	
                Contract
                  Rate

              	
                Exchange
                  % Act vs Contract

              	
                Rent
                  fee - RMB

              
	 	 	 	 	 	 	
                8.277

              	 	 
	
                Mar

              	
                25,884.94
                  

              	 	
                7.7472

              	 	 	
                8.0121

              	 	
                Free
                  of charge

              
	
                Apr

              	
                25,884.94
                  

              	 	
                7.7306

              	 	 	
                8.0121

              	 	
                Free
                  of charge

              
	
                May

              	
                25,884.94
                  

              	 	
                7.7055

              	 	 	
                8.0121

              	 	
                207,392.73
                  

              
	
                Jun

              	
                25,884.94
                  

              	 	
                7.6497

              	 	 	
                8.0121

              	 	
                207,392.73
                  

              
	
                Jul

              	
                25,884.94
                  

              	 	
                7.6075

              	 	 	
                7.8098

              	
                -5.05
                  

              	
                202,156.20
                  

              
	
                Aug

              	
                25,884.94
                  

              	 	
                7.5660

              	 	 	
                7.8098

              	 	
                202,156.20
                  

              
	
                Sep

              	
                25,884.94
                  

              	 	
                7.5546

              	 	 	
                7.8098

              	 	
                202,156.20
                  

              
	
                Oct

              	
                25,884.94
                  

              	 	
                7.5108

              	 	 	
                7.8098

              	 	
                202,156.20
                  

              
	
                Nov

              	
                25,884.94
                  

              	 	
                7.4552

              	 	 	
                7.8098

              	 	
                202,156.20
                  

              
	
                Dec

              	
                25,884.94
                  

              	 	
                7.4143

              	 	 	
                7.6121
                  

              	
                -5.06
                  

              	
                197,037.46
                  

              
	
                Y07
                  Total

              	
                258,849.40
                  

              	 	 	 	 	 	 	
                1,622,603.94
                  

              

      

    

     

     

    
      
        
        

      

      
        -5-Unassociated Document

    Lease
      Agreement - LE0701

    

    This
      Lease Agreement (hereinafter referred to as "the Lease") is entered into as
      of
December
      31, 2007 in
      the
      city of Shanghai, by and between SHANGHAI KAI HONG TECHNOLOGY CO., LTD.
      (hereinafter referred to as "Party A") with its registered office at No.1 Lane
      18 San Zhuang Road, Songjiang Export Processing Zone, Shanghai, P.R.China and
      SHANGHAI DING HONG ELECTRONIC CO., LTD. (hereinafter referred to as "Party
      B")
      with its registered office at No.999 Chenchun Road, Xinqiao Town, Songjiang,
      Shanghai, P.R.China.

    

    Party
      A
      and Party B are collectively referred to as the “Parties” and individually as a
“Party”.

    

    WHEREAS,

    

    The
      Parties agree on the lease of the 5th floor (set forth in Exhibit 1, hereinafter
      referred to as “Area 1”) The Parties also agree on the lease of the 4th floor of
      the Accommodation Building (set forth in Exhibit 2, hereinafter referred to
      as
      "Area 2"). Party B represents that it is the lawful owner of the Accommodation
      Building (as defined below).

    

    1.
      Definitions

    

    Unless
      otherwise defined in this Lease, the terms used herein shall have the following
      meanings:

    

    1.1
      "Accommodation Building" shall mean the six-story dormitory building located
      on
      the lot 375 of Song Jiang, Shanghai.

    

    1.2
      "Area
      1" shall mean the 5th floor of the Accommodation Building (Exhibit 1, 5th Floor
      Layout for the Accommodation Building).

    

    1.3
      "Area
      2" shall mean the 4th floor of the Accommodation Building (Exhibit 2, 4th Floor
      Layout for the Accommodation Building)

    

    1.4
      "Effective Date" shall mean the date on which this Lease will take effect after
      the legal representatives or authorized representatives of the Parties affix
      their signatures and corporate seals on the Lease.

    

    1.5
       "Lease
      Term" shall mean the period of time on which Party A is entitled to use the
      Lease Area and Party B is entitled to receive rent from Party A in accordance
      with the terms and conditions of the Lease.

    

    1.6
      "Lease Area" shall mean Area 1 and Area 2 

    

    1.7
      “Actual Lease Area” shall mean Area 1 and the future possible lease area of Area
      2.

    

    2. The
      Construction and Facilities of the Accommodation Building

    

    2.1 Party
      B
      shall deliver the Accommodation Building in compliance with the requirement
      of
      Exhibit 3 (Exhibit 3 - Decoration and Facilities Requirement of Accommodation
      Building). Party B agrees that decoration and facilities shall be at its own
      expenses.

    

    2.2 Party
      B
      promises that the construction and building quality of the Accommodation
      Building shall be in compliance with all the relevant quality standards. Party
      B
      shall obtain from all necessary government authority checked and accepted
      inspection certificates. Party B guarantees the quality of the facilities of
      the
      Accommodation Building and the quality of the equipments in each room. Party
      B
      further guarantees the quality of the materials used in making the facilities
      in
      the Accommodation Building shall meet Party A's and relevant inspection’s
      requirements. 

    

    3.
      Lease Term

    

    3.1For
      Area 1, the Parties agree that the Lease Term is _5
      (five)_year(s)
      commencing on
      April
      27, 2007.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
3.2
      The
      Parties agree that the Lease Term for Area 1 and Area 2 shall be automatically
      renewed for successive 5 year lease unless Party A gives written notice of
      termination not less than 30 days before the expiration of any Lease Term.
      During the Lease Term or any renewal period, Party B shall not terminate this
      Contract without Party A's written approval. For the renewal period, the items
      relating to the rental set forth in Article 6 of the Lease shall be adjusted
      on
      the basis of the market prices at the time of renewal and after consultation
      between the Parties.

    

    3.3
      If
      during any term of this Lease, Party B receives from a third party a bona fide,
      legally binding offer to lease the portion of Area 1 and/or Area 2 not already
      leased by Party A, Party B shall notify Party A of this fact. The notice shall
      specify all the terms of the bona fide third party offer. Party A shall then
      have thirty (30) days to lease that portion of the Area 1 and/or Area 2
      specified in the third party’s bona fide offer for the rent and related details
      set forth in Articles4 and 5. Party B shall not lease Area 1 and Area 2 to
      any
      third party until the thirty (30) days has expired without Party A exercising
      its right of first refusal. Any other terms not specified in this Lease
      regarding Area 1 and Area 2, both Parties shall negotiate and sign a
      supplemental agreement for these unspecified terms. Such signed supplemental
      agreement shall constitute a aprt of the entire Lease and shall have the same
      effectiveness as the entire Lease.

    

    3.4
      As
      for the future possible lease area in Area 2, Party A has provided the necessary
      size of the lease area in Area 2 (the “Area 2 future lease”), terms for the Area
      2 future lease shall be separately negotiated by the Parties and stated in
      a
      signed supplemental lease agreement to this Lease. Such signed supplemental
      lease agreement shall then constitute a part of the entire Lease and shall
      have
      the same effectiveness as the entire Lease.

    

    4.
      Gross Area of the Rent Area

    

    4.1
      There
      are 18
      dorm
      rooms with area of 824
      square
      meters and a TV room of 32
      square
      meters in Area 1. The gross area of Area 1 is 856
      square
      meters.

    

    4.2
      There
      are 20
      dorm
      rooms with area of 1,150
      square
      meters and a TV room of 32
      square
      meters in Area 2. The gross area of Area 2 is 1,182
      square
      meters.

    

    5.
      Rental

    

    5.1
      The
      Parties agree that the monthly rent for Area 1 shall be RMB29.80 per square
      meter and for a total of RMB25,508.80
      per
      month.

    

    5.2
      The
      Parties agree that the monthly rent for Area 2 shall be RMB 29.80 per square
      meter and for a total of RMB35,223.60
      per
      month.

    

    6.
      Deposit

    

    For
      the
      lease of Actual Lease Area, Party A shall pay Party B a deposit amount of
      RMB25,508.80
      within
      10 days of the effective date of the Lease.

    

    7.
      Method of Payment 

    

    For
      the
      Actual Lease Area, Party A shall pay the Rental in RMB to the RMB bank account
      as designated by Party B before the first day of every month.

    

    8.
      Termination of the Lease

    

    If
      either
      Party terminates the Lease prior to the expiration of the Rent Term without
      the
      consent from the other Party, the Party that terminates the Lease shall pay
      damages to the other Party to compensate for such Party’s actual loss. The
      amount of damages shall include, but not be limited to, the reasonable profits,
      out-of-pocket costs, legal service fees, Court fees, arbitration fees,
      accounting fees and removal or relocation fees.

    

    9.
      Insurance and Repair Costs

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    9.1
      During the term of the Lease, Party B shall purchase and maintain insurance
      coverage to cover any and all casualty damage to the Accommodation Building,
      and
      shall be responsible for repairing all structural damages to the building that
      are not the result of improper use by Party A. Party A shall be responsible
      for
      all repair costs arising from improper Building usage by Party A. If Party
      B
      cannot obtain building insurance, Party A will need to obtain insurance for
      the
      Actual Lease Area, and Party B will reimburse Party A for all costs of such
      insurance coverage.

    

    9.2
      Party
      B shall be entitled to inspect the Accommodation Building at reasonable
      intervals and upon reasonable notice to Party A. Party A shall provide
      assistance to allow such inspections.

    

    10.
      Liability for Breach of the Lease

    

    10.1
      If
      Party A violates Article 5 of the Lease for failing to pay the Rental, then
      Party A shall pay a penalty at the rate of 0.021% of the Rental for each day
      of
      delay.

    

    10.2
      If
      Party B breaches any of its warranties set forth in this Lease, Party B shall
      compensate Party A for all of Party A’s losses and damages including
      consequential, special, punitive and incidental damages.

    

    10.3
      Party A shall not:

    

    
      	 	
              (1)

            	
              sub-lease
                the rent area or exchange the use of the rent area with any third
                party
                without Party B's prior written
                consent.

            

    

    
      	 	
              (2)

            	
              alter
                the structure of the rent area or damage the Building without Party
                B's
                prior written consent.

            

    

    
      	
            	(3)	
              change
                the lease purpose stipulated by the competent authorities without
                Party
                B's consent.

            

    

     

    11.
      Warranties

    

    11.1
      Party B hereby warrants that if the Accommodation Building is sold to any third
      party during the Rent Term or the period of renewal, such third party shall
      be
      required to fulfill all obligations of Party B under the Lease. If said third
      party fails to carry out the Lease, Party B shall compensate Party A for all
      of
      Party A’s losses and damages including consequential, special, punitive and
      incidental damages.

    

    11.2
      In
      case Party B mortgages the Accommodation Building to the third party, any loss
      suffered by Party A shall be paid by Party B.

    

    12.
      Force Majeure

    

    12.1.
      The
      definition of Force Majeure

    

    Force
      Majeure shall mean any event which arises after the Effective Date that is
      beyond the control of the Parties, and is unforeseen, unavoidable and
      insurmountable, and which prevents total or partial performance by either Party.
      Such events shall include earthquakes, typhoons, flood, fire, war, acts of
      government or public agencies, strikes and ay other event which cannot be
      foreseen, prevented and controlled, including events which are recognized as
      Force Majeure in general international commercial practice.

    

    12.2
      Consequences of Force Majeure

    

    a.
      If an
      event of Force Majeure occurs, the contractual obligation of a Party affected
      by
      such an event shall be suspended during the period of delay and the time for
      performing such obligation shall be extended, without penalty, for a period
      equal to such suspension.

    

    b.
      The
      Party claiming Force Majeure shall give prompt notice to the other Party in
      writing and shall furnish, within fifteen (15) days thereafter, sufficient
      proof
      of the occurrence and expected duration of such Force Majeure. The Party
      claiming Force Majeure shall also use all reasonable efforts to mitigate or
      eliminate the effects of the Force Majeure. 

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    c.
      If an
      event of Force Majeure occurs, the Parties shall immediately consult with each
      other in order to find an equitable solution and shall use all reasonable
      efforts to minimize the consequences of such Force Majeure.

    

    13.
      Effective Date of the Lease

    

    The
      Lease
      shall become effective after the legal representatives or authorized
      representatives of both Parties affix their signatures and company seals on
      the
      Lease.

    

    14.
      Language of the Lease

    

    The
      Lease
      is made and executed in Chinese and English, both versions having equal
      validity.

    

    15.
      Settlement of Dispute

    

    15.1
      Friendly consultations

    

    a.
      In the
      event of any dispute, difference, controversy or claim arising out of or related
      to the Lease, including, but not limited to, any breach, termination or validity
      of the Lease, (the "Dispute") then upon one Party giving the other Party notice
      in writing of the Dispute (the "Notice of Dispute"), the Parties shall attempt
      to resolve such Dispute through friendly consultation.

    

    b.
      If the
      Dispute has not been resolved through friendly consultations with thirty (30)
      days from the Notice of Dispute, the Dispute shall be resolved by arbitration
      in
      accordance with Article 15.2 of this Lease. Such arbitration may be initiated
      by
      either Party.

    

    15.2
      Arbitration

    

    The
      arbitration shall be conducted by Shanghai Arbitration Commission in Shanghai,
      China in accordance with its procedure and rules. The arbitration award shall
      be
      final and binding on the Parties. The costs of arbitration shall be borne by
      the
      losing Party except as may be otherwise determined by the arbitration
      tribunal.

    

    15.3
      Continuance of performance

    

    Except
      for the matter in Dispute, the Parties shall continue to perform their
      respective obligations under the Lease during any friendly consultations or
      any
      arbitration pursuant to this Article 15.

    

    15.4
      Separability

    

    The
      provisions of this Article 15 shall be separable from the other terms of the
      Lease. Neither the terminated nor the invalidity of the Lease shall affect
      the
      validity of the provisions of this Article 15.

    

    16.
      Applicable Law

    

    The
      validity, interpretation and implementation of the Lease and the settlement
      of
      Disputes shall be governed by relevant PRC laws and regulations that are
      officially promulgated and publicly available. 

    

    17.
      Miscellaneous

    

    17.1
      Any
      amendment to this Lease shall be in writing and duly signed by both Parties.
      Such Amendment shall constitute a part of the entire Lease.

    

    17.2
      Both
      Parties acknowledge that they are aware of their respective rights, obligations
      and liabilities and will perform their obligations under the Lease in accordance
      with the provisions of the Lease. If one Party violates the Lease, the other
      Party shall be entitled to claim damages in accordance with the
      Lease.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    17.3
      Any
      notice or written communication requited or permitted by this Lease shall be
      made in writing in Chinese and English and sent by courier service. The date
      of
      receipt of a notice or communication shall be deemed to be seven (7) days after
      the letter is deposited with the courier service provided the deposit is
      evidenced by a confirmation receipt. All notice and communications shall be
      sent
      to the appropriate address set forth below, until the same is changed by notice
      given in writing to the other Party.

    

    
      	
              To:
                Party A  

            
	
              Address: No.1
                Lane 18 San Zhuang Road, Songjiang Export Processing Zone, Shanghai,
                P.R.China

            
	
              Attn.:
                Shanghai Kai Hong Technology Co.,
                Ltd.

            

    

    

    
      	
              To:
                Party B

            
	
              Address:
                No.999 Chenchun Road, Xinqiao Town, Songjiang, Shanghai,
                P.R.China

            
	
              Attn.:
                Shanghai Ding Hong
                Electronic Co., Ltd.

            

    

     

    17.4
      This
      Lease comprises the entire understanding between the Parties with respect to
      its
      subject matters and supersedes any previous or contemporaneous communications,
      representations, or agreements, whether oral or written. For purposes of
      construction, this Lease will be deemed to have been drafted by both Parties.
      No
      modification of this Lease will be binding on either Party unless in writing
      and
      signed by an authorized representative of each Party.

     

    
      
        	
                Party
                  A:

              	
                Shanghai
                  Kai Hong Technology Co., Ltd.

              	
                Party
                  B: 

              	
                Shanghai Ding
                  Hong Electronic Co., Ltd.

              
	 	 	 	 
	
                Representative:

              	 	
                Representative:

              	 
	 	 	 	 
	
                Date:

              	 	
                Date:
                  

              	 

      

    
      
        
        

      

      
        5

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