RAE SYSTEMS INC
LEASE AGREEMENT
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<DESCRIPTION>LEASE AGREEMENT
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<TITLE>Prepared by R.R. Donnelley Financial -- Lease Agreement</TITLE>
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 <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.10 </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>LEASE EXPANSION AGREEMENT </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="18%"><DIV><FONT FACE="Times New Roman" SIZE="2">The First Party: </FONT></DIV> </TD>
<TD><DIV STYLE="margin-left:4px"><FONT FACE="Times New Roman" SIZE="2">Shanghai Institute of Metallurgy Research, Chinese Academy of Sciences (&#147;SIM&#148;) </FONT></DIV> </TD></TR></TABLE><DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="18%"><DIV><FONT FACE="Times New Roman" SIZE="2">The Second Party: </FONT></DIV> </TD>
<TD><DIV STYLE="margin-left:4px"><FONT FACE="Times New Roman" SIZE="2">WARAE Instrument (Shanghai) Incorporated (&#147;WARAE&#148;) </FONT></DIV> </TD></TR></TABLE><DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman"
SIZE="2">WARAE is in need of additional floor space in order to expand its production capability; SIM recognizes WARAE&#146;s need and has agreed to lease the first floor North Hall of Building 0319 to WARAE. The two parties have entered into the
following agreement: </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">1.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">The total additional floor space covered by this agreement is: 15m*9m&nbsp;=&nbsp;135 m</FONT><FONT FACE="Times New Roman" SIZE="1"><SUP>2</SUP></FONT><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000"><SUP></SUP>. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">2.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">The agreed upon monthly rental is RMB 20/m</FONT><FONT FACE="Times New Roman" SIZE="1"><SUP>2</SUP></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><SUP></SUP>,
totaling RMB 2,700/month, effective on and starting from May 1, 1999. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">3.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">Other lease related and relevant matters are governed by the Lease Agreement signed by the two parties on January 8, 1999. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2">There are two (2) original copies of the Lease Expansion Agreement. Each party (SIM and WARAE) holds one original copy of this agreement. </FONT></DIV> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="44%"><DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">The First Party:&nbsp;&nbsp;&nbsp;&nbsp;/s/&nbsp;&nbsp;&nbsp;&nbsp;L<SMALL>IU</SMALL> </FONT></DIV> </TD>
<TD><DIV STYLE="margin-left:16px"><FONT FACE="Times New Roman" SIZE="2">The Second Party:&nbsp;&nbsp;&nbsp;&nbsp;/s/&nbsp;&nbsp;&nbsp;&nbsp;J<SMALL>AMES</SMALL> C<SMALL>HENG</SMALL> </FONT></DIV> </TD></TR></TABLE><DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2">SHANGHAI INSTITUTE OF METALLURGY RESEARCH, CHINESE ACADEMY OF SCIENCES </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman"
SIZE="2">Representative: </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2">Name and Seal </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2">April 29, 1999
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 <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>PROPERTY LEASE EXPANSION AGREEMENT </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH=" 7%"><DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">Leaser: </FONT></DIV> </TD>
<TD><DIV STYLE="margin-left:16px"><FONT FACE="Times New Roman" SIZE="2">Shanghai Institute of Metallurgy Research, Chinese Academy of Sciences (&#147;SIM&#148;) </FONT></DIV> </TD></TR></TABLE><DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH=" 7%"><DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">Leasee: </FONT></DIV> </TD>
<TD><DIV STYLE="margin-left:16px"><FONT FACE="Times New Roman" SIZE="2">WARAE Instrument (Shanghai) Incorporated (&#147;WARAE&#148;) </FONT></DIV> </TD></TR></TABLE><DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman"
SIZE="2">WARAE is in need of additional floor space in order to expand its production capability; SIM recognizes WARAE&#146;s need and has agreed to lease the south portion of the first floor of Building&nbsp;0319, specified as Section&nbsp;1, to
WARAE. The two parties have entered into the following agreement: </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">4.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">This expansion covers 10 additional rooms, with a total area of 310 m</FONT><FONT FACE="Times New Roman" SIZE="1"><SUP>2</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><SUP></SUP>. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">5.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">The agreed upon monthly rental is RMB 25/ m</FONT><FONT FACE="Times New Roman" SIZE="1"><SUP>2</SUP></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><SUP></SUP>,
totaling RMB 7,750/month. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">6.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">The effective period of this lease expansion is between March 15, 2001 and March 14, 2006. This agreement shall terminate if a major re-planning occurs to the high-tech park in
which the property resides, and the property is physically impacted (e.g., demolition or partial modification to the property). SIM shall notify WARAE of such events and make the appropriate arrangements for WARAE in advance. </FONT></DIV>
</TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">7.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">After this agreement takes effect, the maximum electric current for WARAE&#146;s use in the entire leased property shall increase to 250A. </FONT></DIV> </TD></TR></TABLE>
<DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2">There are two (2) copies of this lease expansion agreement. Each party (SIM and WARAE) holds one original copy of this agreement. </FONT></DIV>

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 <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>LEASE AGREEMENT </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="18%"><DIV><FONT FACE="Times New Roman" SIZE="2">The First Party: </FONT></DIV> </TD>
<TD><DIV STYLE="margin-left:4px"><FONT FACE="Times New Roman" SIZE="2">Shanghai Institute of Metallurgy Research, Chinese Academy of Sciences (&#147;SIM&#148;) </FONT></DIV> </TD></TR></TABLE><DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="18%"><DIV><FONT FACE="Times New Roman" SIZE="2">The Second Party: </FONT></DIV> </TD>
<TD><DIV STYLE="margin-left:4px"><FONT FACE="Times New Roman" SIZE="2">WARAE Instrument (Shanghai) Incorporated (&#147;WARAE&#148;) </FONT></DIV> </TD></TR></TABLE><DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman"
SIZE="2">WARAE is in need of additional floor space in order to expand its production capability; SIM recognizes WARAE&#146;s need and has agreed to lease a portion of the first floor of Building 0319, specified as Section 1, to WARAE. The two
parties have entered into the following agreement: </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2">1. </FONT></DIV>
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<TD WIDTH="020" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">1.1.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">The area of the mass spectrometer room is: 6m*8m&nbsp;=&nbsp;48&nbsp;m</FONT><FONT FACE="Times New Roman" SIZE="1"><SUP>2</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><SUP></SUP>. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="020" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">1.2.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">The area of the hallway is: 12.8m*2m&nbsp;=&nbsp;25.6&nbsp;m</FONT><FONT FACE="Times New Roman" SIZE="1"><SUP>2</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><SUP></SUP>. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="027"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="020" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">1.3.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">The area of the lobby is: 9.15m*6m&nbsp;=&nbsp;54.9&nbsp;m</FONT><FONT FACE="Times New Roman" SIZE="1"><SUP>2</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><SUP></SUP>. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="027"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="020" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">1.4.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">The area of the staircases and hall is: (8.7m*6m)&nbsp;&#150;&nbsp;(6.5m*1.5m)&nbsp;=&nbsp;42.45&nbsp;m</FONT><FONT FACE="Times New Roman" SIZE="1"><SUP>2</SUP></FONT><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000"><SUP></SUP>. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">2.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">The total area of the leasing space covered by this agreement is: (1.1)+(1.2)+(1.3)+(1.4)&nbsp;=&nbsp;170.95&nbsp;m</FONT><FONT FACE="Times New Roman"
SIZE="1"><SUP>2</SUP></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><SUP></SUP>. The agreed upon monthly rental is RMB 20/m</FONT><FONT FACE="Times New Roman" SIZE="1"><SUP>2</SUP></FONT><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><SUP></SUP>, totaling RMB 3,419/month. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">3.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">Effective on and starting from January 1, 1999, the total rental WARAE shall pay to SIM is RMB&nbsp;21,263.20&nbsp;&#150;&nbsp;500 (temporary lobby rental of RMB&nbsp;500
deducted) + 3,419&nbsp;=&nbsp;RMB&nbsp;24,182.20. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">4.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">WARAE shall reimburse SIM for the utility charges based upon the actual usage of water, electricity, and gas on a monthly basis. The maximum electric current for WARAE&#146;s
use in the leased property is 165A. If the actual usage of electricity exceeds the maximum electric current, the lessor and lessee shall negotiate and come to a mutually agreed upon position. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">5.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">WARAE shall be responsible for the retrofitting of the leased property. If the retrofitting affects the usability of the property, WARAE shall be solely responsible for the
repair. WARAE shall also be responsible for securing safety and security measures for the leased property, including fire prevention and protection, burglary prevention, and explosion prevention. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV>

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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">6.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">SIM shall be responsible for property water leakage prevention and repair, sewage and plumbing, lavatory equipment and drainage, electricity supply, electricity system
maintenance, and water supply. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
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<TD WIDTH="013" VALIGN="top" ALIGN="left"><DIV><FONT FACE="Times New Roman" SIZE="2">7.</FONT></DIV></TD>
<TD WIDTH="006" VALIGN="top"><DIV>&nbsp;</DIV></TD>
<TD ALIGN="left" VALIGN="top"><DIV><FONT FACE="Times New Roman" SIZE="2">This agreement shall become effective on the day of signing by both parties, and shall be in effect for six (6) years. </FONT></DIV> </TD></TR></TABLE> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2">There are four (4) original copies of this lease agreement. Each party (SIM and WARAE) holds two (2) original copies of this agreement. </FONT></DIV> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV>
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<TD VALIGN="top" WIDTH="50%"> <DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">The First Party:</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="50%"> <DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">The Second Party:</FONT></DIV> </TD> </TR>
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<TD VALIGN="top" WIDTH="50%"> <DIV><FONT FACE="Times New Roman" SIZE="2">SHANGHAI INSTITUTE OF METALLURGY RESEARCH, CHINESE ACADEMY OF SCIENCES</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="50%"> <DIV><FONT FACE="Times New Roman" SIZE="2">WARAE SCIENCE INSTRUMENT (SHANGHAI) INCORPORATED</FONT></DIV> </TD> </TR>
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<TD HEIGHT="16"> </TD> </TR>
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<TD VALIGN="top" WIDTH="50%"> <DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">Representative:&nbsp;&nbsp;&nbsp;&nbsp;/s/&nbsp;&nbsp;&nbsp;&nbsp;L<SMALL>IU</SMALL></FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="50%"> <DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">Representative:&nbsp;&nbsp;&nbsp;&nbsp;/s/&nbsp;&nbsp;&nbsp;&nbsp;J<SMALL>AMES</SMALL> C<SMALL>HENG</SMALL></FONT></DIV> </TD> </TR>

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<TD HEIGHT="16"> </TD> </TR>
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<TD VALIGN="top" WIDTH="50%"> <DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">Name and Seal</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="50%"> <DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">Name and Seal</FONT></DIV> </TD> </TR>
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<TD HEIGHT="16"> </TD> </TR>
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<TD VALIGN="top" WIDTH="50%"> <DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">January 8, 1999</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="50%"> <DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">January 8, 1999</FONT></DIV> </TD> </TR>
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