Document:

Unassociated Document

     

    
      SUPPLEMENT
        TO LEASE AGREEMENT-LE0604

       

      THIS
        SUPPLEMENT TO LEASE AGREEMENT is made and effective as of January 1st, 2007,
        by
        and between Shanghai Ding Hong Electronic Co., Ltd. (“Landlord”) and Shanghai
        Kai Hong Electronic Co., Ltd. (“Tenant”).

       

      RECITALS

       

      A. Pursuant
        to a Lease Agreement (the “Lease”) dated as of January 31, 2001, Landlord has
        leased to Tenant certain premises located at No. 999 Xinqiao Town, Songjiang
        District, Shanghai, China (the “Premises”).

       

      B. Landlord
        and Tenant each desires to amend the Lease to provide for the safe and lawful
        disposal of all waste and scraps resulting from Tenant’s business conducted on
        the Premises, all on the terms and conditions contained in this
        Supplement.

       

      NOW,
        THEREFORE, in consideration of the premises and of the mutual covenants
        contained in this Supplement, the parties agree as follows:

       

      1. Disposal
        of Waste and Scraps.

       

      (a) Landlord
        shall collect, store, safeguard, transport and dispose of, in a safe and
        lawful
        manner, all waste and scraps, whether or not hazardous, of every kind and
        description, which result from or are produced by or arise in connection
        with
        Tenant’s business operations conducted on the Premises, including, but not
        limited to, those types of waste and scraps set forth on Exhibit
        A
        hereto,
        as the same may be amended from time to time by Tenant upon written notice
        to
        Landlord.

       

      (b) Landlord
        shall have the right to retain such persons (collectively, the ”Agents” and
        individually, an “Agent”) as it may select to assist it in rendering its
        services under this Supplement; provided,
        however, that each such person shall be engaged in the rendering of such
        services as its principal business; provided,
        further, that the selection of each Agent shall be subject to Tenant’s approval,
        which approval shall not be unreasonably withheld. Landlord shall cause each
        Agent to deliver to Tenant a writing agreeing to be bound by the provisions
        of
        this Supplement. Notwithstanding anything to the contrary in this Supplement,
        Landlord shall remain responsible for the rendering of services by the Agents
        in
        accordance with the terms of this Supplement. Landlord shall provide to Tenant
        a
        copy of each agreement with an Agent regarding the rendering of services
        in
        accordance with this Supplement.

       

      (c) Landlord
        shall hold and maintain, and shall cause each Agent to hold and maintain,
        during
        the Term (as defined below) all governmental permits, licenses or approvals
        required to legally perform its duties under this Supplement and to comply
        with
        all laws, rules and regulations of all governmental authorities relating
        to the
        performance of its duties under this Supplement.

       

      2. Books
        and Records.

       

      (a) Landlord
        shall establish and maintain, and shall cause each Agent to establish and
        maintain, during the Term complete and accurate records relating to the services
        rendered by it under this Supplement.

       

      (b) During
        the Term, and for five (5) years thereafter, Tenant and its representatives,
        accountants and attorneys shall have the right, during normal business hours,
        on
        twenty-four (24) hours prior written notice, to inspect, copy and make extracts
        from all such records, at the offices of Landlord set forth in Section 5(e),
        in
        order to verify compliance by Landlord and the Agents of their obligations
        under
        this Supplement.

       

      (c) During
        the Term, Tenant shall have the right, at any time and without notice, to
        enter
        into and to inspect the premises of Landlord or any Agent in order to verify
        compliance by Landlord and the Agents of their obligations under this
        Supplement.

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      3. Term
        and Termination.

       

      (a) Unless
        sooner terminated as provided below, the term (the "Term") of the Landlord’s
        rights and duties under Section 1 shall commence on the date hereof and end
        on December 31, 2007 and shall be renewed automatically thereafter for
        successive one (1) year terms unless written notice of termination is given
        by either party to the other not less than thirty (30) days before the end
        of the initial term or any subsequent one (1) year renewal term.
        Notwithstanding anything to the contrary in this Section 3(a), the Term shall
        end no later than June 28, 2009.

       

      (b) The
        Term
        shall terminate prior to the expiration of its stated term at the option
        of
        either party, if the other party shall fail to perform in any material respect
        any material obligation to be performed by it under this Supplement and such
        failure is not cured within ten (10) days after written notice of such failure
        is given by the terminating party to the defaulting party.

       

      4. Fees.

       

      (a) Tenant
        shall pay to Landlord a management fee equal to two percent (2%) of any amounts
        actually paid to Agents or received from by Landlord in connection with the
        disposal of waste and scraps under this Supplement.

       

      (b) Tenant
        shall reimburse Landlord for all fees actually paid by Landlord to Agents
        in
        connection with the disposal of waste and scraps under this Supplement, less
        any
        amounts received by Landlord in connection therewith with the disposal thereof;
        provided,
        however, that such fees shall not exceed the amounts set forth on Exhibit A
        hereto
        without Tenant’s written consent. Landlord and Tenant shall review such fees in
        light of the market prices for such services on a quarterly basis; provided,
        however, that neither party shall be required to agree to an increase or
        decrease in the amount of such fees.

       

      (c) Tenant
        shall pay all amounts due under this Section 4 within thirty (30) days after
        receipt of a written invoice therefore, together with such information
        (including invoices of the Agents) as Tenant reasonably requires to verify
        the
        amount due.

       

      5. Miscellaneous.

       

      (a) Landlord
        acknowledges that (i) it will obtain knowledge of confidential information
        of Tenant during the Term, including, but not limited to, designs and other
        data
        and information of a proprietary nature which is not generally known to the
        public ("Confidential Information"), and that (ii) maintenance of the
        proprietary character of the Confidential Information is important to Tenant
        and
        its business operations. Landlord shall keep secret all Confidential
        Information, shall not use Confidential Information for any purpose other
        than
        as expressly authorized hereunder and shall not disclose Confidential
        Information to anyone except to the extent required in performing services
        hereunder or the Confidential Information becomes publicly available through
        no
        fault of Landlord.

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      (b) Landlord
        shall indemnify Tenant and hold it harmless against and in respect of any
        and
        all payments, damages, demands, claims, losses, expenses, costs, obligations
        and
        liabilities (including, but not limited to, reasonable attorneys' fees and
        costs) which arise or result from or are related to any breach or failure
        by
        Landlord or any Agent to perform any of its obligations hereunder. Landlord
        shall reimburse Tenant on demand for any payment made or loss suffered by
        it at
        any time after the date hereof, based upon the judgment of any court of
        competent jurisdiction or pursuant to a bona fide compromise or settlement
        (which shall be approved by Landlord, which approval shall not be unreasonably
        withheld) of claims, demands or actions in respect of any damages to which
        the
        foregoing indemnity relates. Consummation of the transactions contemplated
        hereby shall not be deemed or construed to be a waiver of any right or remedy
        of
        the indemnified party nor shall this section or any other provision of this
        Supplement be deemed or construed to be a waiver of any ground of defense
        by the
        indemnified party.

       

      (c) Tenant
        shall promptly notify Landlord of the existence of any claim, demand or other
        matter involving liabilities to third parties to which Landlord’s
        indemnification obligations would apply and shall give Landlord a reasonable
        opportunity to defend the same at its own expense and with counsel of its
        own
        selection (who shall be approved by Tenant, which approval shall not be
        unreasonably withheld); provided,
        however, that Tenant at all times also shall have the right to fully participate
        in the defense at its own expense. If Landlord within a reasonable time after
        such notice fails to defend such claim, or fails to pursue such defense
        vigorously once commenced, Tenant shall have the right, but not the obligation,
        to undertake the defense of, and to compromise or settle (exercising reasonable
        business judgment), the claim or other matter on behalf, for the account
        and at
        the risk and expense of Landlord. Except as provided in the preceding sentence,
        Tenant shall not compromise or settle the claim or other matter without the
        prior written consent of Landlord in each instance. If the claim is one that
        cannot by its nature be defended solely by Landlord, Tenant shall make available
        all information and assistance that Landlord reasonably may request; provided,
        however, that any associated expenses shall be paid by Landlord.

       

      (d) This
        Supplement constitutes the entire agreement between the parties hereto
        pertaining to the subject matter hereof, and supersedes all prior agreements,
        under-standings, negotiations and discussions, whether oral or written, relating
        to the subject matter of this Supplement. No supplement, modification, waiver
        or
        termination of this Supplement shall be valid unless executed by the party
        to be
        bound thereby.

       

      (e) Any
        notice or other communication required or permitted hereunder shall be in
        writing and shall be deemed to have been given (i) if personally delivered,
        when so delivered to the party to whom it is directed at the address set
        forth
        on the signature page hereof or (ii) if given by telecopier, when such
        notice or other communication is transmitted to the telecopier number specified
        on the signature page hereof and the appropriate answer back or telephonic
        confirmation is received. Either party may change its address hereunder by
        giving written notice thereof to the other party.

       

      (f) The
        rights and duties of each party under this Supplement are personal, and neither
        party shall assign or otherwise transfer any of its rights or delegate any
        of
        its duties hereunder (whether voluntarily or involuntarily) without the prior
        written consent of the other party in each instance. Subject to the foregoing,
        all of the terms, provi-sions and obligations of this Supplement shall inure
        to
        the benefit of and shall be binding upon the parties hereto and their
        respec-tive permitted successors and assigns.

       

      (g) Any
        controversy arising out of or relating to this Supplement or the transactions
        contemplated hereby shall be referred to arbitration before the strictly
        in accordance with the terms of this Supplement. The board of arbitrators
        shall
        convene at a place mutually acceptable to the parties in.
        The
        parties hereto agree to accept the decision of the board of arbitrators,
        and
        judgment upon any award rendered here-under may be entered in any court having
        jurisdiction thereof. Neither party shall institute a proceeding hereunder
        until
        that party has furnished to the other party at least thirty (30) days prior
        written notice of its intent to do so.

       

      (h) Each
        party hereby acknowledges and agrees that it would be difficult to fully
        compensate the other party for damages resulting from the breach or threatened
        breach of any provision of this Supplement and, accordingly, that each party
        shall be entitled to temporary and injunctive relief, including temporary
        restraining orders, preliminary injunctions and permanent injunctions, to
        enforce such provisions without the necessity of proving actual damages or
        being
        required to post any bond or undertaking in connection with any such action.
        This provision with respect to injunctive relief shall not diminish, however,
        the right of either party to any other relief or to claim and recover
        damages.

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      (i) No
        failure to exercise, and no delay in exercising, any right, power or remedy
        hereunder shall impair any right, power or remedy which any party may have,
        nor
        shall any such delay be construed as a waiver of any such rights, powers
        or
        remedies or an acquiescence in any breach or default under this Supplement.
        The
        rights and remedies herein specified are cumulative and not exhaustive of
        any
        rights or remedies that any party would have. No waiver of any of the provisions
        of this Supplement shall be deemed or shall constitute a waiver of any other
        provisions hereof (whether or not similar), nor shall such waiver constitute
        a
        continuing waiver unless otherwise expressly provided.

       

      (j) Landlord
        shall maintain at its sole expense policies of insurance in forms and with
        coverages that are customary for persons and entities participating in the
        collection, storage, safeguarding, transport and disposal of waste and scraps,
        but in no less an amount as may be necessary to hold Tenant harmless from
        any
        failure by Landlord or any Agent to fulfill its obligations under this
        Supplement. Landlord shall provide Tenant with a certificate of insurance
        or
        other written evidence of the coverage described herein as of the commencement
        of the Term and as of the annual renewal of such insurance policies. The
        policies shall provide that insurance coverage may not be canceled or be
        subject
        to a reduction of coverage or other material modification unless at least
        thirty (30) days' prior written notice is given to Tenant by the insurance
        carrier.

       

      (k) Each
        party shall be responsible to ensure that the level of noise resulting from
        its
        activities under this Supplement complies with all applicable governmental
        laws,
        rules or regulations.

       

       

       

      

       

      

       

      

       

      

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Supplement to be executed
        as of the date and year first set forth below.

       

      
        	
                TENANT:

              	
                SHANGHAI
                  KAI HONG ELECTRONIC CO., LTD.

                 

                 

                 

                By _________________________________________

                No.
                  999 Xinqiao Town

                Songjiang
                  District

                Shanghai,
                  China

              
	 	 
	
                LANDLORD:

              	
                SHANGHAI
                  DING HONG ELECTRONIC CO., LTD.

                 

                 

                By _________________________________________

                No.
                  999 Xinqiao Town

                Songjiang
                  District

                Shanghai,
                  China

              

      

      

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

      Exhibit
        A: Price for Disposal of Scraps

       

      
        	
                SKE
                  Income

              	
                No.

              	
                Scraps

              	
                Unit
                  Price

              	
                Company

              
	
                1

              	
                Carton

              	
                RMB0.80/kg

              	
                Shanghai
                  Golden Material Recycle & Utilize Co., Ltd

              
	
                2

              	
                Lead
                  Frame

              	
                RMB17.00/kg

              
	
                3

              	
                Carrier/Tape

              	
                RMB0.10/kg

              
	
                4

              	
                SUS316
                  steel

              	
                RMB10.50/kg

              
	
                5

              	
                Scrapped
                  semi finished goods and finished goods

              	
                RMB40.00/kg

              
	
                6

              	
                Scrap

                -blue
                  tape

                -epoxy
                  solder

                -capillary

                -saw
                  blade cut

                -saw
                  blade arm

              	
                RMB90.00/kg

                RMB150.00/kg

                RMB12.00/kg

                RMB10.00/kg

                RMB2.00/kg

              	
                Shaoxin
                  Hua Ting Mental Products Co., Ltd.

              
	
                SKE

                Expenses

              	
                7

              	
                Compound

              	
                RMB1.60/kg

              	
                Shanghai
                  Hong Teng Environmental Engineering Co., Ltd.

              
	
                8

              	
                Waste
                  Oil

              	
                RMB0.80/kg

              
	
                9

              	
                Garbage

              	
                RMB7,500/month

              	
                Shanghai
                  Jing Li Recycle and Transportation Service Co., Ltd

              
	
                10

              	
                Organic
                  solvent (HW06)

              	
                RMB1,200/ton

              	
                Shanghai
                  Lu Zou Environmental Engineering Co., Ltd.

              
	
                11

              	
                Plating
                  waste (HW17)

              	
                RMB
                  450/ton

              

      

      

      
        	
                Party
                  A: Shanghai Ding Hong Electronic Co., Ltd

                 

                Authorized
                  Signature:

                 

                _______________________

                Dated:
                  

                 

                At
                  the place of:

              	
                Party
                  B: Shanghai Kai Hong Electronic Co., Ltd

                 

                Authorized
                  Signature: 

                 

                _______________________

                Dated:
                  

                 

                At
                  the place of:

              

      

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      Exhibit
        B: Schedule of Contracts and Qualification Certificates

      
        	
                1.

              	
                Schedule
                  of contracts to be
                  supplied

              

      

      
        	
                No.

              	
                Parties
                  to the Contracts

              
	
                1

              	
                · Shanghai
                  Golden Material Recycle & Utilize Co., Ltd; and

                · Shanghai
                  Ding Hong Electronic Co., Ltd.

              
	
                2

              	
                · Shanghai
                  Hong Teng Environmental Engineering Co., Ltd; and

                · Shanghai
                  Ding Hong Electronic Co., Ltd.

              
	
                3

              	
                · Shaoxin
                  Hua Ting Mental Products Co., Ltd.

                · Shanghai
                  Ding Hong Electronic Co., Ltd.

              
	
                4

              	
                · Shanghai
                  Lu Zou Environmental Engineering Co., Ltd.

                · Shanghai
                  Ding Hong Electronic Co., Ltd.

              
	
                5

              	
                · Shanghai
                  Jing Li Recycle and Transportation Service Co., Ltd; and

                · Shanghai
                  Ding Hong Electronic Co., Ltd.

              

      

      

      
        	
                2.

              	
                Schedule
                  of qualification certificates to be
                  supplied

              

      

      
        	
                No.

              	
                Company

              	
                Certificate
                  

              
	
                1

              	
                Shanghai
                  Golden Material Recycle & Utilize Co., Ltd.

              	
                Business
                  License

              
	
                2

              	
                Shanghai
                  Hong Teng Environmental Engineering Co., Ltd.

              	
                Business
                  License

              
	
                3

              	
                Shaoxin
                  Hua Ting Mental Products Co., Ltd.

              	
                Business
                  License

              
	
                4

              	
                Shanghai
                  Lu Zou Environmental Engineering Co., Ltd.

              	
                Business
                  License

              
	
                5

              	
                Shanghai
                  Jing Li Recycle and Transportation Service Co., Ltd.

              	
                Business
                  License

              

      

       

      
        	
                Party
                  A: Shanghai Ding Hong Electronic Co., Ltd

                 

                Authorized
                  Signature:

                 

                _______________________

                Dated:
                  

                At
                  the place of:

              	
                Party
                  B: Shanghai Kai Hong Electronic Co., Ltd

                 

                Authorized
                  Signature: 

                 

                _______________________

                Dated:
                  

                At
                  the place of:

              

      

       

      
        
          
          

        

        
          -6-Unassociated Document

    PLATING
      PROCESSING AGREEMENT

    

    This
      PLATING PROCESSING AGREEMENT (this "Agreement”) is made as of December
      31, 2007,
      by and
      among Shanghai Ding Hong Electronic Co., Ltd. (Party A- the
      licensed subcontractor), with its registered address at No.999 Chenchun Road,
      Xinqiao Town, Songjiang, Shanghai, P.R.China;
      Shanghai Micro-Surface Co., Ltd. (Party B- the licensed
      subcontractor), with its registered address at No.1 Lane 18 San Zhuang Road,
      Songjiang Export Processing Zone, Shanghai, China; Shanghai Kai Hong Electronic
      Co., Ltd. (Party C- the customer), with its registered address No.999 Chenchun
      Road, Xinqiao Town, Songjiang, Shanghai, P.R.China; and Shanghai Kai Hong
      Technology Co., Ltd. (Party D- the customer), with its registered address at
      No.1 Lane 18 San Zhuang Road, Songjiang Export Processing Zone, Shanghai, China.
      Party A, Party B, Party C and Party D are collectively refer to as “all parties”
hereinafter.

    

    Recital

    

    WHEREAS,
      Party A and Party B have an electric plating license to conduct plating for
      certain products and sophisticated equipments for such plating processing,
      and;

    

    WHEREAS,
      Party C and Party D have advanced technology in their possession,
      and;

    

    WHEREAS,
      Party C wishes to contract with Party A to utilize Party A’s license capacity
      and equipment for electric plating processing and they have already signed
      the
      relevant plating processing agreement on January
      1, 2007;
      Party D
      wishes to contract with Party B to utilize Party B’s license capacity and
      equipment for plating processing and they have already signed the plating
      processing agreement on January
      1, 2007;
      the
      nature of the service in the abovementioned two agreements is identical;
      and;

    

    WHEREAS,
      Party A hereby agree to cooperate with Party C for the electric plating of
      certain semiconductor products; Party B hereby agree to cooperate with Party
      D
      for the electric plating of certain semiconductor products. (Party A is the
      relative party to Party C and vice versa, Party B is the relative party to
      Party
      D and vice versa) Because Party A and Party B were established by the same
      investor, while Party C and Party D belong to the same Group, all parties agree
      to enhance the cooperation among them, make full use of resource, and improve
      the efficiency.

    

    NOW,
      THEREFORE, in consideration of the terms and conditions of this Agreement,
      the
      receipt and sufficiency of which is hereby mutual acknowledged, all parties
      hereby unanimously agree to the following:

    

    

    1. 
      Party A (Subcontractor) to Party C, Party B (Subcontractor) to Party D
      Obligations and Responsibilities

    

    1.1
      Party
      A and Party B shall provide the following as cooperation
      conditions:

    

    (a)
      Party
      A and Party B shall provide the necessary workshop and office (including
      associated supporting area) within
      Party A and Party B;

    

    (b)
      Party
      A and Party B shall provide the electric plating capacity and all necessary
      equipments for the plating process;
      

    

    (c)
      Party
      A and Party B shall provide all necessary labor and material for the plating
      process;

    

    (d)
      Party
      A and Party B shall, provide all the necessary utilities, including water,
      electricity supply and relevant facilities
      for plating of the Products and for the convenience of the daily operation
      of
      all parties;

    

    (e)
      Party
      A and Party B shall provide respectively qualified employees to insure the
      technical standards provided by Party
      C
      and Party D are met;

    

    (f)
      Party
      A and Party B shall be responsible for the compliance of the technology, labor,
      waste treatment and environment
      protection requirements in connection with plating of the Products;

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (g)
      Party
      A shall be responsible for the compliance of the processing procedure stipulated
      by Party C and without Party
      C’s
      previous written notice, Party A shall not make any change to such processing
      procedure during the term
      of
      this Agreement; Party B shall be responsible for the compliance of the
      processing procedure stipulated by
      Party
      D and without Party D’s previous written notice, Party B shall not make any
      change to such processing procedure
      during the term of this Agreement;

    

    (h)
      In
      the event that additional equipment for increased production is needed, Party
      A
      and Party B shall provide necessary
      premises and employees in response to that addition.

     

    (i)
      Party
      A and Party B are responsible for all aspects of managing it’s plant facility
      and operations, including supervision
      of employees, managing the equipment operations and performance, facility and
      equipment maintenance,
      proper waste treatment, and respective implementation of recommendations
      resulting from technical
      audits by Party C and Party D or any other audit requiring quality
      improvements.

    

    1.2 Party
      C (Customer) to Party A’s and Party D (Customer) to Party B’s Obligations and
      Responsibilities

    (a)
      Party
      C and Party D shall be responsible for providing technology specifications
      to
      assure quality;

    

    (b)
      Party
      C and Party D shall be responsible for quality examination and technical audit
      of plating processes;

    

    (c)
      Party
      C and Party D shall pay the processing fees according to the provisions in
      the
      Appendix, attached hereto and made a part of this Agreement. However, either
      party shall have the right to require in written form for adjustment of the
      processing fee in the event that significant changes occur in the market
      situation, processing procedure and raw material costs. After all parties'
      negotiation and agreement upon such adjustment and according to the subsequent
      written amendment executed by all parties, the processing fee can be increased
      or decreased as the case may be.

    

    2.
      Agreement Term

    

    The
      term
      of the agreement is 17 years, commencing on January 1, 2007 and terminating
      on
      January 17, 2024. The term of this Agreement shall be of the same term with
      the
      operation term of Party C and Party D. In the event that the terms of Party
      C
      and Party D’s operation are extended beyond January 17, 2024, the term of this
      Agreement shall be extended accordingly.

    

    3.
      Payment

    

    For
      the
      plating under this Agreement, Party C shall make the payment to Party A and
      Party D shall make the payment to Party B. And the calculation of the payment
      shall be based on the aggregate volume of qualified plated products provided
      by
      Party A and Party B to determine the unit price in accordance with the way
      set
      forth in the Appendix. 

    

    
      	
              3.1

            	
              The
                payment shall be made according to the way as set forth
                below:

            

    

     

    Party
      A
      and Party B shall deliver respectively to Party C and Party D within three
      (3)
      working days after the end of each calendar month a written report setting
      forth
      in reasonable detail, the calculation of the monthly qualified volume of the
      plated Products for such calendar month, after the confirmation in three (3)
      working days of Party C and Party D, the aggregate monthly qualified volume
      confirmed shall be used as the basis to determine the unit price for calculation
      of the payment. The Parties agree that the monthly payment shall be made within
      ninety (90) days as of Party A and Party B’ s issuance of invoice. All payments
      due hereunder shall be made in U.S. dollars, and shall be made through
      Telegraphic Transfer (T/T). In the event that any payments that are not paid
      without cause on the day such payments are due under this Agreement, Party
      C and
      Party D shall bear interest at a rate of one-half percent (0.5%) per month
      respectively, calculated on the number of days commencing from the 15th day
      after such payments are delinquent.

    

    
      	
              3.2   

            	
              All
                parties agree that the unit price listed in the Appendix, attached
                hereto
                and made a part of this Agreement, shall be reviewed by all Parties
                

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    every
      year during the term of this Agreement. In the event all Parties cannot reach
      a
      new unit price
      for
      the subsequent year, the unit price which is in effect in the current year
      shall
      still be applicable in the subsequent year.

    

    4.
      Daily Management and Quality Control

    

    Party
      A
      and Party B shall be responsible for the overall management of the operations
      under this Agreement.

    

    The
      quality control of the plating shall follow the rules and standards as set
      forth
      by Party C and Party D respectively. Party A and Party B shall not change the
      rules and standards of the quality control without Party C and Party D’s
      respective prior written consent.

    

    5.
      Party A and Party B' s Representation and Warranty

    

    5.1   Party
      A
      and Party B have lawful and full rights and authority to provide all of the
      conditions (workshop, plating license, equipments, employees and necessary
      utilities) under this Agreement.

    

    5.2   The
      aforementioned rights and authority of Party A and Party B to all the agreement
      conditions are, at present, free and clear of any mortgages, liens, security
      interests, or other encumbrances that would nullify this Agreement.

    

    5.3   There
      shall be no order or decision by a judicial or administrative body to seal
      up or
      to limit the rights to Party A and Party B' s agreement terms and conditions
      in
      any way.

    

    5.4   All
      operational conditions are in accordance with the safety standard set by the
      government.

    

    5.5   The
      execution of this Agreement will not (i) violate any constitution, statute,
      regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
      restriction of any government, governmental agency, or court to which such
      Party
      A or Party B is subject or any provision of the articles of association of
      Party
      A or Party B, or (ii) conflict with, result in a breach of; constitute a default
      under, result in the acceleration of, or create in any party the right to
      accelerate, terminate, modify, or cancel, or require any notice under any
      material agreement, contract, lease, license, permit, authorization, approval,
      consent, instrument, or other arrangement to which Party A or Party B is a
      party
      or by which it is bound or to which any of its conditions under this agreement
      are subject.

    

    5.6   Party
      A
      and Party B have full right and authority to operate all of their equipments
      and
      facilities and processing conditions and to carry on their business as they
      are
      presently being conducted and have all necessary government approval to carry
      on
      their business. There is no order, action, investigation or proceeding pending
      against Party A or Party B that may reasonably be expected to adversely affect
      such licenses, permits, authorizations, approvals and consents, and Party A
      and
      Party B have not received notice of any such investigation or pending
      proceeding.

    

    5.7   Party
      A
      and Party B have duly complied in all material respects with, and all of their
      facilities, business assets, property, leaseholds and equipment used in the
      conduct of their business are in compliance with, the provisions of all
      applicable environmental laws and all rules and regulations thereunder, as
      well
      as all similar local laws, rules and regulations. Party A and Party B have
      all
      of the required environmental permits and are not in default thereunder and
      there have been no outstanding citations, notices or orders of non-compliance
      issued to Party A or Party B relating to their business under any such laws,
      rules or regulations.

    

    
      
        5.8   Party
          A
          or Party B has not received any notice of expropriation of all or any of
          its
          operating conditions. And Party
          A
          or Party B is not aware of any expropriation proceedings pending or threatening
          against or affecting any
          of
          Party A or Party B's conditions and terms of this
          agreement.

      

    

    

    6.
      Responsibility of Party A and Party B

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    6.1   Party
      A
      and Party B shall provide all the workshops, equipments and their accessory
      facilities in reasonably good condition and with all systems in good working
      order. In the event that an overhaul to the workshops, equipments and the
      related accessory facilities by Party A and/or Party B are necessary to keep
      a
      proper working condition, Party A and/or Party B shall inform Party C and/or
      Party D respectively of the overhaul plan in reasonable detail forty-five (45)
      days prior to the proposed overhaul to allow Party C and/or Party D to make
      necessary arrangement and to provide Party C and/or Party D necessary assistance
      respectively if requested. 

    

    6.2   Party
      A
      and Party B shall maintain necessary electric plating capacity for the
      performance of this Agreement during the term of this Agreement. Unless
      otherwise agreed by Party C and/or Party D’s previous written consent, Party A
      and/or Party B shall not use the plating specifications, know-how or other
      similar technical and/or trade secrets provided by Party C and/or Party D during
      the term of this Agreement for the purposes that may be beyond the purposes
      of
      this Agreement.

    

    6.3   Party
      A
      and Party B shall be responsible for real estate taxes and insurance associated
      with the buildings.

    

    6.4   Party
      A
      and Party B shall be solely responsible to deal with waste materials and other
      environmental issues at their own sole expense, in accordance with all
      applicable laws and regulations. However, during the term of this Agreement,
      should the environmental expenses substantially increase due to the compliance
      with new People’s Republic of China laws governing waste management and
      regulations or the special requirement by Party C and/or Party D, relative
      parties shall negotiate in good faith for adjustment of the unit price of the
      plated products for the increased expenses subject to Section 3.2.

    

    
      	
              6.5

            	
              Party
                A and Party B shall be responsible for providing repairs and maintenance
                at their expense for all equipments and facilities under normal
                usage.

            

    

    

    
      	
              6.6

            	
              Party
                A and Party B shall follow the ISO-9000 requirements for Party A
                and Party
                B' s quality control system. And Party A and Party B further agree
                that in
                the event there exists higher technical requirements than the aforesaid
                ISO-9000, they will make all efforts required to follow the higher
                requirements.

            

    

    

    6.7   Party
      A
      and/or Party B shall compensate Party C and/or Party D respectively for actual
      damages suffered due to unqualified and defective products as a result of the
      mistakes or mis-operation by Party A and/or Party B's staff during the process
      of production.

    

    6.8   Party
      A
      and Party B hereby promise that if during the term of this Agreement there
      is
      any transfer of any kinds in all or partial shares or assets of Party A or
      Party
      B, this Agreement shall be binding to the assignee and the assignee shall
      continue to perform this Agreement. 

    

    7.
      Responsibility of Party C and Party D

    

    7.1   Party
      C
      and Party D shall make the payment set forth in Section 3 of this
      Agreement.

    

    8.
      Termination and Cancellation

    

    8.1   Party
      C
      and Party D shall inform Party A and Party B respectively of the intention
      to
      renew this Agreement three (3) months before the expiration of this Agreement.
      Party C and Party D have the right of first refusal to renew this agreement
      under the same terms and conditions.

    

    

    8.2   In
      the
      event that one party wants to terminate this Agreement during the term for
      special reasons, the terminating party shall notify the other relevant parties
      by written notice six (6) months before the proposed termination date. Unless
      based on all parties' multilateral written agreement or because of an event
      of
      Force Majeure, any sooner termination by any party shall consist a breach of
      this Agreement.

    

    9.
      Breach of Agreement and Compensation

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    9.1   Party
      A
      and Party B agree to indemnify Party C and Party D respectively all their
      losses, including but without limitation, any and all reasonable profits,
      out-of-pocket costs, legal fees, accounting fees and removal or relocation
      fees,
      in relation to, arising from or in connection with the following matters:

    

    (a) any
      breach of any representation or warranty of such Party A or Party B as contained
      herein; and

    

    (b) any
      failure by such Party A or Party B to comply with any of its obligations
      herein.

    

    Party
      A
      and/or Party B shall also pay punitive damages equivalent to 10% of the
      above-mentioned costs and fees; however, the damages shall not be lower than
      ten
      thousand RMB (RMB 10,000).

    

    9.2   Should
      Party C and/or Party D breach this Agreement during the term of this Agreement,
      Party C and Party D shall compensate Party A and Party B respectively for their
      actual losses and also pay punitive damages equivalent to 10% of the actual
      losses. The punitive damages amount shall not be lower than ten thousand RMB
      (RMB 10,000).

    

    9.3   The
      provisions of
      Section 9 herein are valid only between relative parties.

    

    10. Force
      Majeure

    

    Neither
      party shall be liable for any failure of performance of this Agreement caused
      by
      Force Majeure. Each party shall bear the respective economic losses caused
      by
      the Force Majeure during this Agreement. Party A and/or Party B, except for
      a
      re-construction of the premises, shall repair the damaged part of the premises
      and facilities to a usable condition to Party C and/or Party D's satisfaction
      within thirty (30) days after the event of Force Majeure occurs, otherwise
      Party
      C and/or Party D may suspend the performance of this Agreement or terminate
      this
      Agreement.

    

    All
      parties hereby acknowledge and agree that any expropriation by any government
      authority of the cooperation condition shall not be regarded as a Force Majeure
      event under this Agreement.

    

    11.
      Disputes

    

    In
      the
      event that any disputes arise concerning the performance of this Agreement,
      all
      parties may settle the disputes through friendly negotiation. Should no
      settlement be reached within thirty (30) working days from the commencing date
      of such negotiation, the dispute shall be submitted to the competent People's
      Court to be settled by litigation.

    

    12.
      Miscellaneous

    

    
      	12.1    	
              The
                provisions related to liability contained herein only bind on relative
                parties, which means they are only valid between relative parties.
                There
                will not be joint liability between Party A and Party B, nor will
                there be
                any joint liability between Party C and Party
                D.

            

    

    

    
      	12.2    	
              This
                Agreement comes into effect upon being jointly signed by all parties.
                This
                Agreement shall not be modified, amended, canceled or altered in
                any way,
                except by an instrument in writing signed by all
                parties.

            

    

    

    
      	12.3    	
              In
                connection with matters that are not set forth in this Agreement,
                all
                parties may reach a supplementary agreement through friendly negotiation,
                in accordance with the relevant regulations the People' s Republic
                of
                China.

            

    

    

    
      	12.4    	
              Severability.
                Should any term, clause or provision of this Agreement be judged
                to be
                invalid for any reason whatsoever, such invalidity shall not affect
                the
                validity or operation of any other term, clause or provision, and
                such
                invalid term, clause or provision shall be deemed to have been deleted
                from this Agreement.

            

    

    

    
      	12.5    	
              Governing
                Law. This Agreement is governed by, and shall be construed in accordance
                with, the law of the People’s Republic of
                China.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    
      	12.6    	
              Integrity.
                This Agreement and all of the attachments, amendments, and modifications
                hereunder constitutes the complete and only contract among all parties
                on
                the subject matter of this Agreement. This Agreement and all of the
                attachments, amendments, and modifications replace all previous oral
                or
                written agreements, contracts, understandings, and communications
                of all
                parties in respect to the subject matter of this Agreement and all
                of the
                attachments, amendments, and
                modifications.

            

    

    

    
      	12.7    	
              No
                Partnership or Agency. No party shall have the right, power or authority
                to create or assume any obligation or duty, expressly or implied,
                on
                behalf of any other parties.

            

    

    

    
      	12.8    	
              This
                Agreement is written in Chinese and English and has four originals
                for
                each language. Each party shall keep one Chinese version and one
                English
                version and both languages are equally
                authentic.

            

    

     

    

     

    
      	Party A: Shanghai Dinghong
              Electronic
              Co., Ltd.	 	Party B: Shanghai Micro-Surface
              Co.,
              Ltd.
	 	 	 
	Signature:_________________  	 	Signature:___________________
	Date:_____________________	 	Date:_______________________

    

     

    
      
        	Party C: Shanghai Kaihong
                Electronic
                Co., Ltd.	 	Party D: Shanghai Kai Hong
                Technology
                Co., Ltd.
	 	 	 
	Signature:_________________  	 	Signature:___________________
	Date:_____________________	 	Date:_______________________

      

       

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    APPENDIX

    

    All
      parties unanimously agreed that the unit price is as
      follows:

    

    From
      January 1st, 2007

    

    Normal
      products: The output volume is less than 700 million pcs/month, the unit price
      should be ü0.5281/Kpcs;

    The
      output volume exceeds 700 million pcs/month, the unit price should be
      $0.4693/Kpcs

    

    Special
      products: The output volume is less than 100 million pcs/month, the unit price
      should be ü0.3786/Kpcs;

    The
      output volume is between 100 and 300 million pcs/month, the unit price should
      beü0.3522/Kpcs;
      

    

    From
      July
      1st, 2007

    

    Normal
      products: The output volume is less than 700 million pcs/month, the unit price
      should be ü0.5202/Kpcs;

    The
      output volume exceeds 700 million pcs/month, the unit price should be
      $0.4623/Kpcs

    

    Special
      products: The output volume is less than 100 million pcs/month, the unit price
      should be ü0.3786/Kpcs;

    The
      output volume is between 100 and 300 million pcs/month, the unit price should
      beü0.3522/Kpcs;

    

    From
      January 1st, 2007

    

    Products
      other than above: 

    TO-220
      Unit price should be ü4.09/Kpcs

    TO-252
      Unit price should beü0.86/Kpcs

    TO-223
      Unit price should beü0.81/Kpcs

    SIP4
      Unit
      price should beü1.27/Kpcs

    PM3
      Unit
      price should be $2.30/ Kpcs

    PD5
      Unit
      price should be $0.85/ Kpcs

    SO8
      Unit
      price should be $0.69/ Kpcs

    

    
       

       

      
        	Party A: Shanghai Dinghong
                Electronic
                Co., Ltd.	 	Party B: Shanghai Micro-Surface
                Co.,
                Ltd.
	 	 	 
	Signature:_________________  	 	Signature:___________________
	Date:_____________________	 	Date:_______________________

      

      
         

        
          
            	Party C: Shanghai Kaihong
                    Electronic
                    Co., Ltd.	 	Party D: Shanghai Kai
                    Hong Technology
                    Co., Ltd.
	 	 	 
	Signature:_________________  	 	Signature:___________________
	Date:_____________________	 	Date:_______________________

          

           

        

      

    

    
      
        
        

      

      
        7

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