Shenzhen Realty Lease Contract

This realty lease contract is entered into by and between Party A and Party B based on “China Contract Law”, “China Real Estate Administrative Law”, “Shenzhen Special Economic Zone House Leasing Act” and their implementing regulations. In consideration of the mutual covenants and agreements herein contained, it is agreed by and between the lessor and the renter as follows:

Article 1 Party A leases the realty No. is    —        , located at Building 3 (Floor 3 -5), Baiwangxin Hi-tech Industrial District 1, Nanshan District, Shenzhen    (hereafter referred to as “leased realty”) to Party B. The total area of the leased realty is 4699.71 m ² in an five-storey building.

    The rights holder of the leased realty is Shenzhen Shekou Yu Er Industrial Co., Ltd. ; No. of property rights certificate or name and number of other valid documents that prove the property rights (or right to uses):         —               .

Article 2   The leasing price is RMB18 (eighteen Yuan) per m ² per month, and a total of RMB84,594.78 ( eighty-four thousand five hundred and ninety-four Yuan and seventy-eight cents) .

Article 3   Party B shall make the first payment of RMB84,594.78 ( eighty-four thousand five hundred and ninety-four Yuan and seventy-eight cents) by November 10, 2008 .

Article 4     Party B shall make rent payments to Party A

(Y) before the 5 ^th of every month;

(  ) before the ___ date of ___ month every quarter;

(  ) before the ___ date of ___ month every half year;

(  ) before ___ date of ___ month every year.

Party A shall provide Party B taxation invoice upon receipt rentals from Party B.

(Please choose from one of the four above items.)

Article 5    The lease term is from January 1, 2009 to December 31, 2013 .

    The above term shall not cover beyond the land use period, otherwise, the period beyond the expiry of the land use period shall be deemed as invalid. Any losses arising from the excessive period shall be handled by the parties’ agreement; if no such agreement exists, the said losses shall be born by Party A.

Article 6    The leased realty is used as workshop .

    Should Party B wish to change the above use of the leased realty, it shall attain written permission of Party A in advance. Party B shall also apply to the property administration department for change the use before hand.

Article 7    Party A shall deliver the leased realty to Party B and go through the transfer process by November 10, 2008 .

Should Party A fails to deliver the leased realty to Party B on time, Party B has the right to request to extend the validity period of the contract accordingly. Both parties shall sign to confirm the revised validity and have it registered at the registration office.

Article 8    When handing over the leased realty, both parties shall confirm its conditions and its ancillary facilities and appliances, and attach a list to the contract.

Article 9  Party A may acquire two-month worth of rent payments as a deposit when delivering the leased realty. This amount is equal to RMB169,189.24 (one hundred sixty-nine thousand, one hundred and eighty-nine Yuan and twenty-four cents) .

    Party A shall provide a receipt to Party B upon receiving a rent deposit from Party B.

Only under all of the following circumstances shall Party A refund the deposit to Party B:

1.at the time when the leased realty is restored to original conditions, and Party A has accepted the restoration. Reasonable natural wear and tear is permitted.

2.at the time when the wages are settled, and the fees and costs due to administrations concerned have been paid off.

3.at the time when this contract expires.

(  ) any one of the above requirements is met;

(Y) all the above requirements shall be met.

(The two parties shall choose one from the above options in their mutual agreement. )

Under the following circumstances, Party A will not refund the deposit to Party B:

1. at the time when the leased realty is not restored to original conditions, and Party A has not accepted the restoration. Reasonable natural wear and tear is permitted.

2.at the time when the wages are not settled, and the fees and costs due to administrations concerned have not been paid off.

3.at the time when this contract does not expires.

Article 10    During the lease period, Party A shall pay the land use fee and taxed, lease management fees arising from the lease of property; while Party B shall pay the water and electricity expenses, sanitation fees, property management fees, elevator use fees and other fees arising from the use of property.

Article 11     Party A shall ensure that the property, its ancillary facilities and appliances meet the requirements of the lease, and shall guarantee the security system in place complies with all relevant laws and regulations.

    Party B has the right to claim for personal injury or property damage in the leased realty due to intentional or negligent act(s) of Party A.

Article 12    Party B shall use the leased realty and ancillary facilities property. No illegal act is allowed in the leased realty . Party A shall not interrupt Party B for the normal and reasonable use of the leased realty.

Article 13     During the lease term, if due to no fault of Party B, there is any natural damage or failure of the leased realty and its ancillary facilities, Party B shall promptly notify Party A of the defects and take appropriate measures to prevent the further expansion; Party A shall repair the realty or authorize Party B to repair it in five days after being notified. If Party B is not able to notify Party A or Party A f