SHANGHAI  MUNICIPALITY

HOUSE LEASE/COMMODITY HOUSE ADVANCE LEASE

CONTRACT

SPECIAL NOTICE

1.       This Contract is applicable, within the administrative area of shanghai, to the advance lease of houses and the lease of houses whose rents are determined, through consultation, on the basis of marker-oriented principle, exclusive of the lease of the public houses to let according to the rent criteria regulated by Shanghai Municipality, of the non-residential welfare houses to let by means of administrative allocations, and of the houses constructed through government investments, as well as the lease of the private residential house to let according to the rent criteria regulated by the Municipal Government before the implementation of the ‘Regulations’.

2.       The houses for advance rent are limited only to those that are constructed with the investment by real estate developers and that are granted Permit for Advance Sale of Commodity Housing. But the houses that have been placed for advance sale by the real estate developers are not allowed to be placed under advanced lease, the purchaser of an advance sale commodity house shall not advance-lease the advance-purchased commodity house.

3.       The <lease> or <advance lease> that appears in a provision of this Contract is a prompting sign indicating that the provision so marked is applicable to the act of leasing or the act of advance-leasing. When this Contract is used as a lease contract, only the content marked with <lease> can be applied; when this Contract is used as a contract on advance lease of commodity housing, only those provisions marked with <advanced lease> or those under ‘Matters Related to Advance Lease’ can be applied. The other provisions without a <> mark are universal provisions applicable to either advance lease or lease

4.       If this Contract is intended for advance lease of commodity housing, then both parties involved in the advanced lease shall sign a letter of hand-over of the use right of the commodity housing in question, once the said commodity housing is constructed and the related real estate developer has completed the initial house registration procedure and acquired the Ownership Certificate of the Real Estate. The Contract shall then be converted to the House Lease Contract, and the validity of all the provisions related to the advance lease shall thus be terminated.

5.       The text of this Contract has been formulated as a sample  (for tentative use) by Shanghai Real Estate Resources Bureau and Shanghai Administration for Industry and Commerce in accordance with the ‘Regulations of Shanghai Municipality on House Leasing’. All the provisions in this Contract are exemplary once intended for reference by the parties concerned. Matters that are not included in this Contract can be specified in a Supplementary Provisions as agreed on by both Party A and Party B after their bilateral consultation.

6.       Prior to the signing of this Contract, the lessor shall present to the lease the Ownership Certificate of Real Estate or other certificates that verify the former’s ownership right, and the real estate developer shall present to the lessee the Permit for Advance Sale. The two parties shall cross-examine their respective identification certificates. If the house is to let to a non-permanent-resident immigrated from outside Shanghai, the lessor shall also present to the lessee the ‘Permit on Security in House Leasing’ as issued by the public security authority.

7.       The parties concerned shall complete the filling procedure in connection with the Contract registration in 15 days following the signing of this Contract. In case of a house lease, the said parties shall go through the procedure with the related real estate transaction center or the related farm authority near where the house to let is located, and obtain a certificate verifying that the registration of the house contract has been officially filed, and in case of an advance lease of a commodity house, the registration of the house contract for overseas sale shall be recorded for file with Shanghai Real Estate Transaction Center, while that for domestic sale ,with the related real estate transaction center near where the said house is located. When the construction of the commodity house for advance lease is completed and the Ownership Certificate of the Real Estate obtained, both parties, after the signing of the letter of hand-over of the commodity house for advance lease, shall proceed, according to the relevant regulations, to the registration procedure for file with the related real estate transaction center or the related farm authority near where the house to let is located, and shall pick up the certificate for the registration of the lease contract. After the lease contract has been registered, actions may be taken against the third party, in case that the advance lease of the house and lease of the house are overlapped or the house is transferred during the lease period, of penalty is given after the settlement of mortgage.

8.       If one of the parties intends to have the lease contract registered and the other party is not cooperative in this respect, the former may take along this Contract, has valid identification certificate and other relevant documents to have the lease contract registered.

SHANGHAI MUNICIPALITY

HOUSE LEASE/COMMODITY HOUSE ADVANCE LEASE    CONTRACT

(Contract No:      )

Parties To This Contract

Lessor (hereinafter referred to as ‘Party A’) : Fu qiaofang

   <Lease>

         and

 Lessee (hereinafter referred to as ‘Party B’) : Demag Cranes & Componnents (Shanghai) Co.,Ltd

 Advance Lessor (hereinafter referred to as ‘Party A’)

 <Lease>

         and

 Advance Lessee (hereinafter referred to as ‘Party B’)

Whereas

   Pursuant to the ‘Contract Law of the People’s Republic of China’ and the ‘Regulations of Shanghai Municipality on House Leasing’ (hereinafter referred to as ‘Regulations’), and on the basis of equality, willingness, fairness and sincerity, Party A and Party B have hereby entered into this Contract, after their bilateral Consultation, regarding the lawful__ lease (lease/advance lease) of Party A’s commodity house (house/commodity house) to Party B.

Article    Ⅰ      About the House for Lease or Advance Lease

Ⅱ  Party  A  is to __ lease _    (lease/advance-lease) its house at this city  Room808   

No.218 Tianmu (west) Road, _________(Lane/Xin Cun)__Zhabei__(District/County), Shanghai (hereinafter referred to as the ‘House’) to Party B for use

The said house <lease>measures (<lease>measures/estimates at)____91______square meters, the land for use of_office___, the house type being_ synthesis, and the structure being Frame structure .For the plan of the house, please refer to Appendix Ⅰ of this Contract Party A has presented to Party B the following.

       1. <lease>Certificate of the Real Property Right/Ownership Certificate of the House_________________(Certificate No:_____________________________)

       2. <advance lease> Permit for Advance Sale(Permit No:_______________________)

1.2   Party A, as the_owner of the real property right _(owner of the real property right/agency/other right owner as defined by law), has hereby established the lease relation with Party B. Party A has informed Party B that the house has not yet been (has been/has not yet been) settled for mortgage before signing this Contract with Party B

1.3   The range, conditions and requirements of the common or shared space of the said house ,the conditions of the current fitments, accessory facilities and equipment of the said property, and the accessory facilities Party A has allowed Party B to install or add, their criteria and other related matters that demand agreement to by Party A shall all be specified by Party A and Party B respectively in Appendix Ⅱ and Appendix Ⅲ of this Contract. Both Party A and Party B have agreed that these appendices shall serve as basis in the inspection-and-acceptance procedure upon the hand-over of the said house by Party A to Party B and upon the return of the said house by Party B to Party A at the termination of the Contract.

Article 2    Purpose of Use

2.1   Party B has pledged to Party A to use the leased house for the purpose of__office_, and to observe the related regulations by the State and Shanghai Municipality on the use of the house and the administration of the real property.

2.2   Party B has promised that Party B shall not alter, within the period of lease, the purpose of use as agreed on, without a written permit from Party A and an official approval as required, by a related competent authority.

Article  3     Date of Hand-over and Term of Lease

3.1   Both Party A and Party B have agreed that Party A shall hand over the said house to Party B prior to __________(mm/dd/yy). <lease> The lease period begins on _____________and ends on____________<advance lease> The article lease period shall be decided upon the signing of the letter of hand-over of the use right of the commodity house, as a agreed on by Party A and Party B in this Contract.

3.2   Party A shall have the right to take back, upon the termination of the lease, the said house which Party B shall hand over as due. For a request for a renewal of this lease, Party B must give, prior to the conclusion of the current lease, Party A a ________-month notice in writing to that effect, before the signing of a new lease contract, with the consent by Party A, can be proceeded.

Article  4      Rent ,Payment of Rent and Deadline of Payment

4.1   Party A and Party B have agreed that the daily rent per each architectural square meter for the aforesaid house is (_RMB _USD/RMB)__1.92__. <lease> The monthly rent totals(RMB_USD/RMB)_5300_(inword:__five thousand and three hundred only).<advance lease> The monthly rent shall be determined according to the actual floorage measured, which is to be specified by Party A and Party B in the letter of hand-over of the commodity house for advance lease.

      This rent shall stay unchanged for three_<year(s)/month(s)>. Beginning from the _four_(year/month), both parties may make adjustment over the rent through bilateral consultation. Party A and Party B shall reach a separate agreement in the Supplementary Provisions regarding the said adjustments.

4.2   Payment of rent shall be made to Party A each month by Party B on the ___one_day of the month. A delay in the payment of the rent due will result in a contractual fine of__0.05% of the daily rent for each day delayed

4.3   Payment of rent shall be made in the following manner Party B shall pay to Party A in check or cash. If Party B is to pay in RMB, the exchange rate between RMB and USD shall be based on the mid-price of the exchange price between RMB and USD as published by the People’s Band of China on the day of the payment of the rent

Article  5      Deposit and Other Fees

5.1   Party A and Party B have agreed that Party B shall pay to Party A, upon the hand-over of the house, a deposit for the lease of the house, the amount worth a _two_month rent, that is RMB _(RMB/USD)_10600_. For more details, refer to ‘Supplementary Provisions’

     Party A shall issue to Party B a voucher upon the reception of the deposit

     On the conclusion of the lease relation, Party A shall return to Party B the remaining portion of the deposit of the deposit with no interest added, except the portion that is to be borne by the latter as agreed on is the Contract.

5.2   During the period of lease___ Party B __(Party A/Party B) shall undertake the payment for water, electricity, gas, telecommunication, and equipment as well as the real property administration fee, while __ Party A __(Party A/Party B) shall be responsible for the payment of all the other fees involved

5.3   The method of calculation or allocation of and the method and time of payment by which _Party B _(Party A/Party B) undertake are as follows: the electricity expense is to be paid each month by Party B to Party A according to the actual meter reading multiplied by 0.9(RMB) yuan/kw. Should there be an adjustment in the electricity change corresponding adjustments shall be made accordingly

Article  6     Use Requirements and Repair Responsibilities over the House

6.1   During the lease period, Party B should notify Party A, in time, of the repair of the damage or defect found in the house or any accessory facility. Party A shall arrange for the repair in___three_ days following the receipt of the notification by Party B. Should there be a delay in the repair, Party B may have the damage or defect fixed. All the expenses   involved shall be covered by Party A.

6.2   During the lease period, Party B should take good care of and make proper use of the said house and the facilities within. Should any damage or defect be caused due to the improper use, Party B should be responsible for a prompt repair arrangement. If Party B refuses to do so. Party A may have the damage or defect repaired, and Party B shall pay for the repairs involved

6.3   During the lease period, Party A should ensure that the house and its accessory facilities are in normal and safe conditions for use . Party A shall be responsible for the maintenance and repair of the said house. Party A should send Party B a __five_-day notice in writing prior to its maintenance and repair work, in which Party B should readily assist and cooperate. Party A should try as much as possible to avoid unnecessary inconveniences caused to Party B.

6.4   Party B, who intends to redecorate the said house or add facilities and/or equipment to the said house, should obtain a written consent from Party A and if the plan is to be examined and approved by the relevant authority in accordance with the related regulations, then_Party B authorized by Party A (Party B/Party B authorized by Party A) should submit it to the relevant authority for approval before proceeding to the actual redecoration and addition project. The ownership of and the maintenance responsibility for the added facility/facilities and equipment are to be agreed on in writing by both Party A and Party B.

Article  7  Condition of the House When Returned

7.1   Unless a renewal of the lease is permitted by Party A, Party B shall return the leased house in _day __day/days upon the termination of the lease period, otherwise Party B shall pay to Party A for the occupancy of the house__ RMB 3.84__(RMB yuan/USD) per square meter for each day the return of the leased house is delayed.

7.2   The house, when retur, ned by Party B, shall be in a state in conformity with the condition after the normal use. When the house, upon its return, is inspected and accepted by Party A, both parties should proceed to the clearing up of their respective accounts undertaken.

Article  8  Sublet, Transfer and Exchange

8.1   Except for the case described in the Supplementary Provisions of this Contract, where Party A has allowed Party B to sublet the said house, Party B shall not during the lease period, sublet part or all of the leased house to any third party without the written permission by Party A beforehand Party B is not to sublet a single room to two or more sub-lessees in part of simultaneously.

8.2   Party B, who intends to sublet the said house shall sign, in accordance with the relevant regulations, a sublease contract with the sub-lessee. In addition, Party B shall have the related registration procedure proceeded with the district/county real estate transaction center or the related farm authority near where the said house is located.

8.3   During the period of lease, Party B, who sublets the said house to a third party or trades the said house with the house leased by a third party must obtain permit in advance from Party A. After the subletting, transferring or exchanging, sub-lease or the exchanger of the said house shall sign with Party A an alteration contract of the lease subject and this Contract shall continue to be executed.

8.4   During the period of lease, Party A, who intends to sell the said house, shall give Party B a three-month notice to the effect. Party B shall have the priority to purchase the said house under the same conditions.

Article  9    Conditions for Dissolution of the Contract

9.1   Within the period of lease, the Contract may be dissolved if any one of the following applies, and neither party shall undertake any responsibility for that:

1.       The use right of the land that the said house occupies is prematurely taken back under law.

2.       The said house is expropriated under law due to the demand of social, public interests or city construction

3.       The said house is damaged, destroyed or proved to be hazardous

4.       Party A has informed Party B that the said house had been settled for mortgage before its lease, and is under penalty.

9.2   Both Party A and Party B have agreed that either party may give the other party a written notice as to the dissolution of this Contract, if any of the following applies. The breaching party should pay a contractual fine that amounts to three times of the monthly rent for the said house. If the fine is not sufficient to cover the loss caused to the other party, the breaching party should also compensate for the difference incurred.

1.       Party A fails to hand over the said house as due, and this failure continues for five days after the urge by Party B upon Party A

2.       The said house handed over by Party A has proved to be not in conformity with the conditions as agreed on in this Contract, so that the purpose of the lease is not achieved; or the said house handed over by Party A has proved to be defective and hazardous to Party B

3.       Party B has altered, without the permit by Party A in advance that purpose of the said house, resulting in a damage to the said house

4.       The damage is caused by Party B to the principal structure of the house

5.       Party B has arbitrarily subleased the said house, transfer the leasing right of the said house or trade the leased house with the leased house by a third leases

6.       The delay in payment of the rent by Party B has exceeded accumulatively half a month

7.       The delay in payment by Party B of the real estate administration fee, electricity bill, the expenses for his permanent parking space, and the administration fee for the parking space exceeds accumulatively half a month.

Article  10    Liabilities for Breach of Contract

10.1  If the house upon its hand-over is found to be defective, Party A shall be responsible for the repair in_three_ days after the day the said house is handed over. Party A has agreed that the rent shall be reduced and the relevant previsions regarding the rent modified, if there occurs a delay in the said repair.

10.2  Party A shall be responsible for the corresponding compensation for the loss caused to Party B if the former has failed to inform the latter in this Contract that the said house has been placed under mortgage or the property right of the said house has been restricted even before the lease.

10.3  During the lease period, Party A, who is unable to be responsible for the regular maintenance and repair as agreed on in the Contract, resulting in the property loss or physical harm to Party B, shall undertake the corresponding liabilities.

10.4  During the period of lease, Party A shall pay to Party B a contractual fine worth__two_ time(s) the rent for the days after the premature take-back of the said house if Party A arbitrarily dissolves the Contract and claims back the said house for a reason beyond those specified in the Contract. Should such a contractual fine be insufficient to cover the loss caused to Party B, Party A shall undertake the corresponding compensations.

10.5  Party A may demand that Party B restore the house to its original state (restore the house to its original state/compensate for the loss), if the latter has the said house decorated or has new facilities installed in the said house without a written permission by the former in advance or beyond the range and requirement of the written permission by the former.

10.6   During the period of lease, Party A may forfeit, Party B’s deposit if Party B arbitrarily dissolves the Contract prematurely for a reason beyond those specified in the Contract. Should the deposit be insufficient to cover the loss caused to Party A, Party B shall undertake the corresponding compensation

Article  11    Miscellaneous

11.1   Party A, who needs to place the said house under mortgage during the period of lease, shall inform Party B in writing to that effect, and shall promise to Party B to consult in writing with the latter over his purchase of the said house in__sixty___ days before the parties involved, after the house is put under mortgage, have reached an agreement through their consultation as to the disposal of the house by means of a discount or a disposition.

11.2  Both Party A and Party B have agreed that in 15 days after the signature of this Contract, Party A shall be responsible for the registration procedure, in according with the relevant regulations, with the district/county real estate transaction center near where the said house is located or with the related farm authority, and then proceed to pick up the registration certificate for the lease of the house. Once the Contract is registered for file.  Party A (Party A/Party B) shall go through the change or the cancellation procedure with the original registration authority in 15days following the change in or the cancellation of this Contract if such change or cancellation is found necessary. Party A shall assume the corresponding responsibility for the legal dispute resulting from his failure to complete the above-said procedure.

      This Contract comes into effect following the___ signature___(signature/registration). Refer to Supplementary Provisions for more information.

11.3  Matters that are not included in this Contract shall be settled by Party A and Party B through consultation or formulation of supplementary provisions. The Supplementary Provisions and the Appendices form an inseparable part of this Contract. The hand-written and printed words in the blanks in this Contract the Supplementary Provisions and the Appendices are of the equal validity.

11.4  At the time of signing this Contract, both Party A and Party B are well aware of their respective rights, obligations and responsibilities, and are prepared to strictly abide by the provisions of this Contract. Should one party violate this Contract, the other party shall have the right to claim indemnity according the provisions specified in this Contract.

11.5  Any dispute arising from the execution of this Contract shall be settled by Party A and Party B through consultation. Should such effort fail, any one of the two options might be selected as a solution (to be selected jointly by Party A and Party B:

1.       Submit to __________________________Arbitration Commission for an arbitral settlement.

2.       Resort to legal proceedings at a People’s Court.

11.6   This Contract together with the appendices is made in _______________copies to be held one copy each by Party A , Party B, (Shanghai _________________district/County) real estate transaction center or the related farm authority, and _________________.All these copies are of equal validity.