Premises Lease Agreement

1  

Party A is a duly established limited liabilities company.  It owns the land use right to the land lot located at No. 93, Xin Song Road, Kaifeng City, Henan and the titles to the buildings thereon.  This land lot has been granted by the state for the purpose of industrial use.

2  

Party B is a duly-established wholly foreign owned enterprise.

3  

Now, the Parties have agreed that Party A will lease parts of the premises on the aforesaid land to Party B.

1.1  

Party A hereby leases to Party B the premises and land located at the land lot under the Land Use Right Certificate Bian Fang Di Quan Zheng Zi No. 233733 at No. 93, Xin Song Road, Kaifeng City, Henan , with the exception of the premises listed in Appendix I to this Agreement (the factory premises and land to be leased to Party B by Party A would hereinafter be referred to as the “Factory Premises ”).

1.2  

Party A hereby enters into this lease with Party B as the owner of titles to the Factory Premises.  Before entering into this Agreement, Party A has demonstrated to Party B his Land Use Right Certificate and Building Title Certificates under which Party A obtained titles to The Factory Premises

2.1  

Party A has examined the business license or the contemplated business scope of Party B.  Party B warrants to Party A that Party B will use The Factory Premises strictly in accordance with its approved business scope during Party B’s lease thereof.

2.2  

Party B warrants that Party B will not, unless having been approved in writing by Party A or by competent regulatory authorities (including work safety authority, fire control authority, etc.) according to relevant regulations, conduct in the Factory Premises any production activities other than those set forth in Article 2.1.

3.1  

Party A will deliver The Factory Premises to Party B immediately after the execution of this Agreement.  The term of this lease will start on the date of this Agreement and lasts until the date on which Party B acquires titles to the Factory Premises pursuant to the Agreement for Transfer of Land Use Right and Building Titles   entered into   between Party A and Party B on August 26, 2008.

4.1  

The annual total rental for The Factory Premises will be the RMB equivalent of US$ 450,000 (the applicable conversion rate will be the foreign exchange rate quoted by the People’s Bank of China for Renminbi on the date of the execution of this Agreement).

4.2  

Party B will pay each annual rental prior to December 31 each year.  Party B will wire transfer the payment to a bank account designated by Party A, or pay the amount in other methods as agreed upon in writing by the Parties:

5.1  

At the delivery of The Factory Premises, Party B will pay no earnest money for the lease of The Factory Premises.

5.2  

During the term of this lease, Party B will be responsible for payment of fees relating to tap water, electricity, gas, telecommunication, facilities, property management, etc.

5.3  

During the term of this lease, Party A is responsible to secure property insurance for The Factory Premises, and Party B is responsible to secure property insurance for Party B’s assets in The Factory Premises.

6.1  

During the term of this lease, Party B shall be responsible for reasonable maintenance of the equipment and other assets inside the building; Party A will, at its own cost, be responsible to maintain and repair for damages during ordinary use of The Factory Premises.  Party A will repair within three working days after the receipt of Party B’s notice.  If Party A fails to repair within the aforesaid time limit, Party B could repair such damages itself, and then promptly inform Party A of such repair and present to Party A relevant invoices for the expense incurred, and Party A will bear expenses reasonably incurred in connection with Party B’s repair.

6.2  

During the term of this lease, Party B will reasonably use and take care of The Factory Premises and relevant facilities.  Party B will bear maintenance costs relating to damages to