EXHIBIT 10.12
                LEASE AGREEMENT WITH SICHUAN DONGFU GROUP COMPANY

                                 LEASE CONTRACT


A.   Sichuan DongFu Group Company

B.   Sichuan CathayOnline Technologies Co. Ltd.
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Party A agrees to lease office space located at 9/F, DongFu Mansion, No. 3 YuLin
Road,  Chengdu to Party B. According to this  understanding  Party A and Party B
reach the following agreement:



1)   Construction Area of the DongFu Mansion, No. 3 YuLin Road is 11 00m2. Party
     A agrees to lease  this space to Party B. Party B agrees to pay Party A RMB
     Y60,000/month, and RMB Y720,000/year in total.

2)   Otherpublic expenses like water supply, sewer processing,  cleaning,  plant
     decoration,  security, and postal services will be charged separately based
     on the ratio of construction areas of the whole building.  Electricity will
     be charged on a basis of the real usage.

3)   Leaseduration  is five years from September 1, 1999 to August 30, 2004. The
     lease can be renewed based on a mutual  agreement.  Party B should  provide
     Party A written  notice three months in advance of the expiry date if Party
     B does not wish to renew,  otherwise  Party A will  charge  Party B another
     three months rental.

4)   Party B agrees to pay Party A rental on a  quarterly  basis,  and agrees to
     pay other expenses  monthly  according to Points 2 and 3. Party B agrees to
     pay a daily  fine of I % of the total  expenses  owed to Party A if Party B
     does not pay Party A on time.

5)   This Agreement has four copies. Party A and Party B each have two of them.

Party A:          Sichuan DongFu Group Company
(stamp)


                  ----------------------------
Representative:   Tang FuQuan (signature)


Party B:          Sichuan CathayOnline Technologies Co. Ltd.


                  ----------------------------
Representative:   Owen Li (signature)


August 9, 1999