Sino-foreign Joint Venture

EXHIBIT 3.5


SINO-FOREIGN JOINT VENTURE


Shenzhen Rayes Electronic System Co., Ltd.


Articles of Association


Shenzhen Neihe Electronic System Co., Ltd. is a joint venture established on 11th December 1997. After its establishment, it is in good position for operation. The board of directors of the JOINT VENTURE made a resolution to agree to alter the stock ownership and relevantly alter the company's name and address; transfer the 40% shares held by the shareholder Shenzhen Zhongzhi Investment Development Co., Ltd. and Hong Kong Hui Yuan Enterprise Co., Ltd 40% shares to XUNYE DEVELOPMENT COMPANY LIMITED, transfer the 10% shares held by Shenzhen Weihai Industrial Development Co., Ltd. respectively to XUNYE DEVELOPMENT COMPANY LIMITED and the other 10% shares to Shenzhen Rayes Group Co., Ltd. Change the name of the company as Shenzhen Rayes Electronic System Co., Ltd. and change the address of the company to F/17, Block A, jinfengcheng building, No. 168, Shennan Road E. Luohu District, Shenzhen. Therefore we revise the alteration items and prepare the new articles of association.


Chapter I. General Provisions


Article 1


According to the Law of the People's Republic of China on the Chinese and Foreign Equity Joint Ventures and other relevant laws and regulations of PRC. Shenzhen Rayes Group Co., Ltd. (hereinafter referred to as Party A) and British Virgin Islands XUNYE DEVELOPMENT COMPANY LIMITED (hereinafter referred to as Party B) signed the contract on organizing the JOINT VENTURE on 11TH May 1999 and especially draw up the articles of association.


Article 2.


The name of the joint venture company is: Shenzhen Rayes Electronic System Co., Ltd.(hereinafter referred to as the JOINT VENTURE). The English name is SHENZHEN RAYES ELECTRONIC SYSTEM CO., LTD. The legal address of the JOINT VENTURE is: F/17 Block 1, Jinfengchen Building, No. 168 Shennan Road E., Luohu District, Shenzhen.


Article 3.


The names, legal addresses, and legal representatives of all parties of the JOINT


VENTURE are respectively:


Party A: (P.R.C.) Shenzhen Rayes Group Co., Ltd.


Legal Address: 9th Floor Jintian Building, No. 1199 Heping Road, Luohu District, Shenzhen Guangdong Province. Legal representative: Wang Xinping; Title:President of the Board; Nationality: P.R.C. Telephone: (0755) 2208256


Party B: XUNYE DEVELOPMENT COMPANY LIMITED


Legal address: No. 957 Coast Union Center, Lord Town, British Virgin Islands. Legal representative: Huang Zhiqiang;Title: President of the Board; Nationality: P.R.C Telephone: (04) 4403740213


Article 4.


The JOINT VENTURE is the company with limited liability.


Article 5


The JOINT VENTURE is the body corporate of P.R.C and shall obey the laws, regulations and relevant regulations of P.R.C. and shall be protected by the laws of P.R.C.


Chapter II Principle, Business Scope


Article 6


The principle of The JOINT VENTURE is: enhancing the quality of the products and developing new products by using the applicable management methods of science and technology, and forming the competition in the international market in the aspect of quality and price, etc.; improving the economic profits and making all the parties gain the satisfied social and economic profits.


Article 7


The business scope of the JOINT VENTURE is: engaged is software, hardware, network system and the research and development of communication equipment.


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Article 8.


The business scale of The JOINT VENTURE is: 10 million RMBY of annual output value.


Article 9.


The home and aboard sales proportion of the JOINT VENTURE is: 50% for export to aboard and 50% for home sales.


Chapter III. Investment Amount and Registered Capital


Article 10.


The investment amount of The JOINT VENTURE is 10 million RMBY. The registered capital of the JOINT VENTURE is 10 million RMBY, of which: Party A invests 1 million RMBY, making up 10%; Party B invests 9 million RMBY, making up 90%.


Article 11.


All the parties will invest in the following form: Party A: Cash: 1 million RMBY Party B: Cash: 9 million RMBY


Article 12.


All the parties shall respectively pay-up their amount of subscribed capital as per the time specified in the contract.


Article 13.


The registered capital of all the parties have been paid up and checked by Shenzhen Donghua Certified Public Accountants and the capital verification report is issued. The accountants issued an investment certificate, which includes: the name of the joint venture, establishment date, the names of the parties of the joint venture, the investment of the parties of the joint venture and the relevant accessories, the investment amount, the investment date, the investment certificate number and the date of inspection and approval. The investment certificate has been reported to the original approval authority and industry and commerce administration for reference.


Article 14.


Within the period of the joint venture, the JOINT VENTURE shall not decrease the registered capital amount.


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Article 15.


Any party of the joint venture will transfer a part or whole of its investment shares, it shall be approved by other parties of The JOINT VENTURE. When a party transfers, other parties have the priority purchasing right.


Article 16.


If the JOINT VENTURE will enlarge the business scope, divide, merge, increase the registered capital, transfer the shares or modify other important items, such act shall be consistently agreed by all the parties of the JOINT VENTURE and consistently passed by the board of The JOINT VENTURE, then reported to the former inspection organization for approval, and it shall handle the relevant registration procedures with Administration of Industry and Commerce, Taxation organization, Customs and other relevant departments within the specified period.


Chapter IV Board of Directors


Article 17.


The JOINT VENTURE will set up the board of directors. The board is the supreme power authority.


Article 18.


The board shall decide all the important affairs of the JOINT VENTURE and its main powers are listed as follows:


1. Prepare and revise the organization chart and personnel plan; 2. Appoint and dismiss general manager, chief engineer, chief accountant,
auditor and other senior officials and decide their rights, responsibilities
and salary; 3. Work out the general policy, development plan, marketing program and
implementation plan of the joint venture, check and approve the important
reports delivered by the general manager or management department; 4. Revise the articles of association of the joint venture; 5. Inspect business conditions, approve the budget and final settlement plans
for a financial year (include the assets balance and loss and gain
statement); 6. Decide the withholding plans for corporate development fund, reserve fund,
staff award and welfare funds; 7. Decide the annual profit distribution program and deficit make-up method; 8. Decide the labor contract and the important regulations of the JOINT
VENTURE; 9. Decide the increase of registered capital, transferring, division,
merging, closing down, prolongation, termination and dissolution of the
JOINT VENTURE; 10. Be responsible for the liquidation in case of expiration or termination of
the JOINT VENTURE; 11. Other important affairs that shall be decided by the board.


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Article 19.


The board consists of five directors; Party A appoints two directors and Party B appoints three directors. The office term of directors is four years. The director can be re-appointed by appointing party.


Article 20.


The board consists of a president, a vice - president and three directors. The president of the board is appointed by Party A and the vice-president of the board is appointed by Party B. When all the parties of The JOINT VENTURE appoints or change the directors, it shall inform the board in written notice.


Article 21.


The annual regular meeting of the board shall be convened at least once a year. If more than one-third of the directors propose, the board can convene the temporary meeting of the board.


Article 22.


The meetings of the board will the principally convened in the location of The JOINT VENTURE.


Article 23.


The meetings of the board shall be called and hosted by the president of the board, and if the president was absent, then the meeting can be called and hosted by the vice-president of the board or other directors.


Article 24.


The president of the board shall send written notices for calling the meeting with the contents, date and place of the meeting indicated in it 15 days prior to the meeting.


Article 25.


If the director can not be present at the meeting for some reasons, he (she) may authorize a proxy to be present by providing the letter of attorney. But one present can not act as the proxy of two or above directors. If a director will neither be present at nor authorize other person to be present at the meeting, then it is considered as relinquishing his rights.


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Article 26.


The legal participator number of the meeting of the board is more than the two thirds of all the directors. If it does not arrive at the number of two-thirds of the directors, the resolutions passed shall be not valid.


Article 27.


For each meeting of the board, a detailed record shall be kept and be signed by all the directors (if the p ...