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<SEC-DOCUMENT>0001104659-09-002809.txt : 20090319
<SEC-HEADER>0001104659-09-002809.hdr.sgml : 20090319
<ACCEPTANCE-DATETIME>20090116132214
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001104659-09-002809
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20090116

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			UTSTARCOM INC
		CENTRAL INDEX KEY:			0001030471
		STANDARD INDUSTRIAL CLASSIFICATION:	COMMUNICATIONS EQUIPMENT, NEC [3669]
		IRS NUMBER:				521782500
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1275 HARBOR BAY PARKWAY
		STREET 2:		STE 100
		CITY:			ALAMEDA
		STATE:			CA
		ZIP:			94502
		BUSINESS PHONE:		5108648800

	MAIL ADDRESS:	
		STREET 1:		1275 HARBOR BAY PARKWAY
		STREET 2:		STE 100
		CITY:			ALAMEDA
		STATE:			CA
		ZIP:			94502
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>

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<div style="font-family:Times New Roman;">

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">January&nbsp;16, 2009</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">United
States Securities and Exchange Commission</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Division
of Corporation Finance</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mail
Stop 3720</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">100
F Street, NE</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Washington,
D.C. 20549</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Re:</font></b><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>UTStarcom,&nbsp;Inc.<br>
Form&nbsp;10-K for the year ended December&nbsp;31, 2007<br>
File No.&nbsp;000-29661<br>
Filed on March&nbsp;3, 2008</p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dear
Mr.&nbsp;Spirgel:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This
letter responds to the comments of the staff (the &#147;Staff&#148;) of the Securities
and Exchange Commission (the &#147;Commission&#148; or the &#147;SEC&#148;) set forth in its letter
dated December&nbsp;24, 2008 related to the Annual Report on Form&nbsp;10-K for
the year ended December&nbsp;31, 2007 filed by UTStarcom,&nbsp;Inc. (the &#147;Company&#148;)
on March&nbsp;3, 2008 (the &#147;2007 Form&nbsp;10-K&#148;) and the Definitive Proxy
Statement for the year ended December&nbsp;31, 2007 filed by the Company on April&nbsp;29,
2008 (the &#147;Proxy Statement&#148;).&#160; The
following responses are provided to the Staff&#146;s inquiries.&#160; For ease of reference, we have repeated the
text of the Staff&#146;s comments in bold type and followed each comment with the
Company&#146;s response.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:avoid;text-indent:0in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 1. Business</font></u></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:avoid;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">1.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>You list the following six reporting segments
on page&nbsp;7: Broadband Infrastructure, Multimedia Communications, Personal
Communications Division, Handsets, Services, and Other.&#160; Between pages&nbsp;7 and 14, you discuss all
your reporting segments except the Services segment.</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">In future filings, please
disclose the information required by Item 1 of Form&nbsp;10-K with regard to
your Services segment.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response: The Company acknowledges the Staff&#146;s
comment and will include the information required by Item 1 of Form&nbsp;10-K
with respect to the Services segment in the</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
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<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Company&#146;s Annual Report on Form&nbsp;10-K for the
fiscal year ended December&nbsp;31, 2008 (the &#147;2008 Form&nbsp;10-K&#148;).</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:avoid;text-indent:0in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 10. Directors,
Executive Officers, and Corporate Governance</font></u></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:avoid;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">2.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>We note that the internet address to your
Code of Ethics is incorrect.&#160; On page&nbsp;165,
you have written &#147;investorrelations.utstar.com/governance&#148;.</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">In future filings, please provide the correct
Internet address of your Code of Ethics.</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response:&#160; The
Code of Ethics is available at the company&#146;s website at investorrelations.utstar.com/governance.cfm.&#160; The Company will provide the correct Internet
address in future filings.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:avoid;text-indent:0in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Financial Statements</font></u></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:avoid;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">3.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>It is unclear why you do not report the cash
held by your subsidiaries in China as restricted cash on the face of your balance
sheet.&#160; We refer you to 5-02.1 of
Regulation&nbsp;S-X.&#160; Please revise, if
necessary, and advise us.</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response:&#160; In response to the Staff&#146;s comment, we
supplementally advise the Staff that we do not believe the cash held by our
subsidiaries in China is restricted as defined in 5-02.1 of Regulation S-X
(i.e., &#147;Restrictions may include legally restricted deposits held as
compensating balances against short-term borrowing arrangements, contracts
entered into with others, or company statements of intention with regard to
particular deposits&#148;).&#160; All such reported
cash is available for use in the operations of our China domiciled
subsidiaries, which comprise a significant portion of our business, and there
are no compensating balance requirements or limitations on the transfer of cash
among the Company and its subsidiaries by its bank lenders in China.&#160; As more fully discussed in our response to
Comment 4 below, we must comply with the regulations and procedures mandated by
the Chinese government prior to making transfers of cash from our subsidiaries
in China to the Company&#146;s United States parent entity or other entity outside
of China.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, we disclose the amounts of other cash
included in our consolidated balance sheets that is restricted under the
definition in </font>5-02.1 of
Regulation S-X in Note 4 of the Notes to our 2007 consolidated financial
statements.&#160; Based on 5-02.8 and 5-02.17
of Regulation S-X, we do not believe such balances to be of sufficient
materiality as to </p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>

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</div>
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<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">require presentation as separate line items in the
2007 or 2006 consolidated balance sheets.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">4.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>We understand that there are restrictions on
the amount of cash available for transfer from your China subsidiaries.&#160; It appears it may be necessary for you to
provide condensed financial information of the registrant, prepared in
accordance with 12-04 of Regulation&nbsp;S-X.&#160;
Refer to SAB Topic 6:K for additional guidance.&#160; Please revise accordingly or advise us.</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response:&#160; </font>Based on our January&nbsp;8, 2009 telephone
conversation with Mr.&nbsp;Joseph Kempf, Senior Staff Accountant, we understand
the Staff&#146;s primary concern giving rise to this comment is the adequacy of
disclosure of the process and conditions under which cash can be transferred
from the Company&#146;s China subsidiaries to the Company in the United States,
uncertainties inherent in such process, and any other contingencies such as the
need to provide income tax liabilities or recognize other unrecorded
liabilities in connection with cash repatriations from China.&#160; Further, we understand the Staff&#146;s concern
relates to such disclosure both in the notes to the condensed financial information
of the Company (Unconsolidated&#151;Parent Company Basis) in Schedule I and in the
Liquidity section of the Company&#146;s Management&#146;s Discussion and Analysis to be
included in the 2008 Form&nbsp;10-K (the &#147;MD&amp;A&#148;).</p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">In response to the Staff&#146;s
observations, the Company will incorporate additional disclosure in its 2008 Form&nbsp;10-K
regarding its cash balances in China.&#160; We
expect such disclosures to be made in the Liquidity section of the MD&amp;A as
well as in notes to financial statements (although in preparing our financial
statements we may determine that such disclosures would best be in the notes to
consolidated financial statements rather than in the notes to condensed
financial </font>information of the Company (Unconsolidated&#151;Parent Company
Basis<b>)</b></font><b>  </b>in Schedule I).&#160;
Additionally, we will consider whether enhanced disclosures of risks and
uncertainties concerning repatriation of cash from China should be made in the &#147;Risk
Factors&#148; section to be included in the 2008 Form&nbsp;10-K (the &#147;Risk Factors&#148;).</p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On a supplemental basis, we
are providing the Staff with the following summary of our understanding of the
process of transferring cash from a China domiciled subsidiary to the United
States, based on our experience as well as discussions with our China legal
counsel and tax advisors:</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>

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<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The Chinese government imposes currency
exchange controls on all cash transfers out of China;</p>

<p style="margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>A China domiciled
subsidiary can instruct one of a number of banks authorized by the
government to handle outbound foreign exchange transactions in China to make
a cash transfer out of China, and the bank will make such transfer after its receipt and satisfactory review of documents
evidencing compliance with the regulations
and procedures mandated by the Chinese government;</p>

<p style="margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Cash transfers related to product or service purchases, or payments for royalties and related charges do not require pre-approval
but &#160;require the China domiciled subsidiary to
furnish to the bank the following supporting
documents:</p>

<p style="margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a form which describes the amount and type of
the proposed transfer in accordance with China&#146;s currency exchange control
regulations;</p>

<p style="margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 99.0pt;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>documentation
that all required approvals or filings for the product, service or
license to be purchased (where applicable) have been obtained (for
example, if a China domiciled entity desires to purchase imported technology,
the purchase requires approval from the Ministry of Commerce);</p>

<p style="margin:0in 0in .0001pt 99.0pt;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>relevant
agreements or contracts (e.g., sales
contracts, service agreements or license agreements, etc.);</p>

<p style="margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>corresponding invoices or payment
notices; and</p>

<p style="margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>tax
payment receipts.</p>

<p style="margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Cash transfers out of China to a foreign
parent for purposes of profits
repatriation and dividends do not require
pre-approval.&#160; Pursuant to applicable
regulations, foreign-invested enterprises in China may pay dividends only out of their <u>accumulated</u>
profits, if any, determined in accordance with Chinese accounting standards and
regulations.&#160; In calculating accumulated profits, foreign investment
enterprises in China are required to allocate at least 10% of their accumulated
profits each year, if any, to fund certain reserve funds unless these reserves
have reached 50% of the registered capital of the enterprises.&#160; The regulations
require </p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the China domiciled
subsidiary to furnish to the bank the following </font>supporting documents:</p>

<p style="margin:0in 0in .0001pt 1.0in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a form which describes the amount and type of
the proposed transfer in accordance with China&#146;s currency exchange control
regulations;</p>

<p style="margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a foreign-invested
enterprise foreign exchange registration certificate;</p>

<p style="margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a board resolution
or shareholder&#146;s resolution approving the repatriation of profits or dividends;</p>

<p style="margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a copy of its statutory accounts for the most
recently completed fiscal year (financial statements prepared in accordance
with Chinese governmental regulations and audited by an approved independent
auditor); and</p>

<p style="margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>corresponding tax payment receipts.</p>

<p style="margin:0in 0in .0001pt 99.0pt;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">The Company respectfully
advises the Staff that the Company&#146;s China based subsidiaries currently have
sufficient non-cash assets (e.g., receivables, inventory, and property and
equipment) available to meet the above </font>reserved </font>net assets in China restriction; such that
none of their cash balances are legally restricted from transfer.</p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:0in;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">The above described cash transfers out of China are examples of current
account transactions under China&#146;s currency exchange controls.&#160; Other types of transactions, such as </font>repatriations
of investment by or loans to foreign owners, or direct equity investments in a
foreign entity by a China domiciled entity are examples of capital account
transactions under China&#146;s </font>currency
exchange controls.&#160; Capital
account transactions require prior approval from China&#146;s State Administration of Foreign Exchange
(SAFE) or its provincial branch to convert a remittance into a foreign
currency, such as U.S. dollars, and transmit the foreign currency outside of
China. The Company&#146;s China based subsidiaries had no remittances subject to
China&#146;s capital account regulations in the period covered by the Company&#146;s
consolidated financial statements contained in its 2007 Form&nbsp;10-K or in
2008, and none are anticipated to occur in 2009.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Please note that because </font>the legal
framework in China is still evolving, it is always possible for the requirements for a
China domiciled subsidiary to transfer cash out of China to be changed without prior notice or any due
process.&#160; It is also possible that the
Company may experience delays in accomplishing transfers of cash from its China
</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">domiciled subsidiary due to
idiosyncratic causes within the bureaucracies participating</font>, if any, in the process.&#160; However, these are part of the normal risks
and uncertainties arising from doing business in China which the Company will
discuss in its Risk Factors.</p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In 2006 as a result of the
Company&#146;s deteriorating financial position in the U.S. and our understanding
that it was more likely than not that cash transfers from the China domiciled
subsidiaries would be necessary to finance the Company rather than being
indefinitely invested in the foreign subsidiaries, the Company recognized
deferred tax liabilities for the amount of incremental United States income
taxes on all possible earnings repatriations from China consistent with
maintaining its China domiciled subsidiaries as going concerns.&#160; Adjustments to the amount of deferred tax
liabilities are made in each accounting period to recognize the results of
operations of the China domiciled subsidiaries.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">5.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>In your next filing, please provide a
comprehensive discussion of your 2008 fourth quarter results of operations so
that it is transparent to readers how the economic downturn is impacting your
operations and liquidity.&#160; When preparing
your disclosure, please consider the following items:</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><i style="font-weight:bold;">If you have experienced an unusually poor fourth quarter, this fact and
its ramifications should be made clear to investors.</i></b></p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><i style="font-weight:bold;">Discuss any known trends or events likely to impact your results of
operations or liquidity in the upcoming year, including potential reductions in
revenues from any of your significant customers, products or technologies.&#160; Clearly disclose the extent to which your
revenues are concentrated in certain industries or geographic areas and the
impact that this concentration may have on your results of operations and
liquidity, as discussed in SOP 94-6.</i></b></p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><i style="font-weight:bold;">Your discussion should address the operations of your segments and/or
within geographic regions to the extent necessary for a clear understanding of
your circumstances.</i></b></p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><i style="font-weight:bold;">You should explain the impact of tightening credit markets and stock
market turmoil has had and is likely to continue to have on the company.</i></b></p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response:&#160; We
appreciate the Staff providing its views concerning what impacts on the Company
from developments in the fourth quarter of 2008 affecting credit markets, stock
markets, and economic activity (&#147;economic downturn&#148;) should be discussed in the
</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">MD&amp;A.&#160; We
will consider these items when preparing the MD&amp;A in order to enable
readers to understand the effects the economic downturn had on our fourth
quarter financial results and management&#146;s assessment of what the effects the
economic downturn are likely to be in 2009 based on known trends and
developments.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">6.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>In light of the recent economic turmoil and
the significant decrease in the price of your common shares, explain to us the
consideration that you have given to a possible impairment of your long-lived
assets.&#160; In your next filing, include
clear and robust disclosure regarding the facts and circumstances leading to any
recognized impairment.&#160; If no impairment
is required to be recognized despite the presence of impairment indicators,
discuss the possibility of a future impairment and the sensitivity of your
impairment analysis to management&#146;s estimates.&#160;
Describe the assumptions you used, and provide information as to known
trends, uncertainties in your estimates, or other factors that will result in,
or that are reasonably likely to result in, any material impairment charges in
future periods.</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response:&#160; The Company regularly
reviews long-lived assets for possible impairment (the Company has no remaining
goodwill).&#160; Our accounting policies for
such reviews are contained in the Notes to Consolidated Financial Statements
for the year ended December&nbsp;31, 2007 and, as extracted from such notes,
are as follows:</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;Long-lived
assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. If undiscounted
expected future cash flows are less than the carrying value of the assets, an
impairment loss will be recognized based on the excess of the carrying amount
over the fair value of the assets.&#148;</font></p>

<p style="margin:0in .5in .0001pt 1.0in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;In
accordance with SFAS&nbsp;144, &#147;Accounting for the Impairment or Disposal of
Long-Lived Assets,&#148; (&#147;SFAS&nbsp;144&#148;), the Company periodically evaluates the
recoverability and estimated lives of its long-lived assets, including property
and equipment, whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable or the useful life has changed.&#160; For tangible assets, the Company determines
the relative estimated fair value through a comparison of similar assets, and
wherever practical, based on quoted market prices taking into consideration the
asset type, age, condition, and physical location of the asset. The Company&#146;s
intangible assets that are subject to amortization are tested for
recoverability based on undiscounted cash flows, and if </font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in .5in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">impaired, written down to fair value based on either discounted cash
flows or appraised values.&#148;</font></p>

<p style="margin:0in .5in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are conducting a review of the carrying values of our long-lived
assets for potential impairment in connection with the preparation of our
consolidated financial statements for the year ended December&nbsp;31,
2008.&#160; We share the staff&#146;s concern about
the potential impacts of the recent economic downturn and the decrease in the
market price of the Company&#146;s common stock in relation to the recoverability of
the carrying amounts of such assets under US GAAP.&#160; In light of the importance of these determinations,
in our 2008 consolidated financial statements and the MD&amp;A we will provide:</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>expanded disclosures of our impairment
testing approach and significant estimates made in that process;</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the facts and circumstances resulting in any
recognition of asset impairment;</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the possibility of impairment recognition
being required in 2009 pursuant to the disclosure standards of SOP 94-6; and</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the uncertainties inherent in management&#146;s
estimates used in the impairment analysis.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
believe such disclosures will meet the recommendations of the Staff set forth
in this Comment 6.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">7.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Refer to the third paragraph of page&nbsp;43.&#160; Please explain to readers why your available
lines of credit in China are now significantly less than what has been
available to you historically.&#160; Also
disclose how long the $265.1 million of lines of credit that were renewed will
be available to you.&#160; Explain whether you
anticipate additional difficulty renewing lines of credit and describe any
uncertainties surrounding your ability to access such funds when needed.&#160; Please clearly explain any implication from
not being able to access these funds or to obtain timely renewals of your
credit lines.</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">Response:
</font>&#160;&#160;T</font>he most significant factor resulting in the decrease in the Company&#146;s
currently available lines of credit in China is the reduced profitability of
the China domiciled entities.&#160; We will
include in the Liquidity section of the MD&amp;A a robust discussion of the
terms and changes during 2008 in available lines of credit in China and our assessment
of the likelihood of material changes in the terms and amounts of </p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">available
lines of credit in China in 2009 based on known trends and developments. </font>We
will also include a discussion of the implications from not being able to
access funds available under unused lines of credit or obtain timely renewals
of the Company&#146;s credit lines in 2009.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Additionally,
we also will discuss in the MD&amp;A our experience and understanding of the
differences between China and the United States in credit granting and the
significance and usage of lines of credit.&#160;
On a supplemental basis, we are providing the Staff with the following
Capsule summary of our understanding of the line of credit banking practices of
China domiciled banks:</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each borrowing request is subject
to a review of the borrower&#146;s current credit worthiness even if it is being
requested under an outstanding line of credit.&#160;
Therefore the existence of lines of credit in China have less
significance in assessing the Company&#146;s borrowing ability than would a line of
credit in a similar amount issued by a United States bank.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; As a result of the practice of
assessing the current credit worthiness of a borrower prior to each borrowing
under a line of credit, in the past banks in China appeared to issue lines of
credit without regard to the existence of lines of credit outstanding from
other banks and almost as a marketing strategy.&#160;
Therefore the aggregate amount of available lines of credits from China
banks did not necessarily equate to current borrowing ability.</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; In some cases a China bank may not
approve a borrowing even if a current line of credit agreement is in place.
This may occur due to the bank&#146;s internal considerations (i.e., no or limited
current lending capability) or temporary changes in the regulatory practices of
the Chinese government.&#160; Such events can
occur without any deterioration the borrower&#146;s credit worthiness.</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The expiration of a line of credit
with a China bank without a concurrent renewal does not automatically trigger
an obligation to immediately repay outstanding loans made under the expired
line of credit as would be the case in the U.S.&#160;
For example during 2008 the Company received no requests for repayment
of existing borrowings from the lending banks when existing lines of credit expired.&#160; Such borrowings remained outstanding, some
for more than five months, while replacement lines of credit were being
negotiated and processed by the China banks.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9</font></p>

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<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">During
the last couple of years many of China&#146;s major banks have become publicly owned
entities (some of which trade in U. S. markets and are subject to SEC oversight
of their financial reporting) and/or have obtained equity investments from
multinational banks headquartered in the U. S. or Western Europe.&#160; As a result, the granting of lines of credit
by China banks has come closer to the credit underwriting practices of banks in
the U.S., and upon expiration and renewal of existing lines of credit in China,
the amounts available under such lines of credit have been reduced to amounts
closer to those that would be typical if granted by a U.S. bank.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">The page&nbsp;references in Comments 8 through 14 are to the Company</font></u></b><font face="Times New Roman">&#146;</font><b><u style="font-weight:bold;">s
Proxy Statement filed on April&nbsp;29, 2008.</u></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:avoid;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:avoid;text-indent:0in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 11. Executive
Compensation</font></u></b></p>

<p style="margin:0in 0in .0001pt;page-break-after:avoid;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">8.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Item 402(k)(3)&nbsp;of Reg.&nbsp;S-K requires
a narrative description of any material factors necessary to an understanding
of director compensation disclosed in the table required by Item
402(k)(2).&#160; On page&nbsp;17, you write &#147;[f]or
further discussion with respect to the Company&#146;s policy and procedures relating
to equity awards that apply to non-employee directors and other service
providers (emphasis supplied), please see the section entitled &#147;Compensation
Discussion and Analysis&#151;Other Considerations&#151;Equity Grant Practices&#148;&#148;.&#160; However, your disclosure under the referred
section, which can be found on pages&nbsp;32-33, includes no discussion of the
policies and procedures relating to equity awards that apply to non-employee
directors and other service providers.</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">In future filings, please update your disclosure
pursuant to your reference on page&nbsp;17.</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response:&#160; The
Company acknowledges the Staff&#146;s comment and will include a discussion of all
material factors relating to equity awards to non-employee directors, including
established policies and procedures, in its next proxy statement.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><i style="font-weight:bold;">On page&nbsp;23, you disclose
that your compensation consultant, Compensia,&nbsp;Inc. developed &#147;tally sheets&#148;
that your Compensation Committee used for each named executive officer.&#160; Items 402(b)(1)(v)&nbsp;and (vi)&nbsp;require
you to describe how you determine the amount of each compensation element, how
such elements fit into the overall compensation objectives, and how such
elements affect decisions regarding other compensation elements.</i></b></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">In future filings, if a &#147;tally
sheet&#148; is used by the Compensation Committee, please disclose what information
was on the tally sheet and how such information impacted </font></i></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">the Compensation Committee&#146;s
determination of each compensation element.&#160;
For further information, please consult the &#147;Staff Observations in the
Review of Executive Compensation Disclosure,&#148; which can be found at
www.sec.gov/divisions/corpfin/guidance/execcompdisclosure.htm.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response:&#160;
The Company advises the Staff that the &#147;tally sheets&#148; prepared by the
compensation consultant engaged by the Compensation Committee in 2007 provided
a comprehensive summary of each Named Executive Officer&#146;s compensation,
including: (i)&nbsp;an estimate of projected compensation for fiscal 2007,
including total target cash compensation and the total estimated value of
long-term equity incentive awards, to be received by each Named Executive
Officer and (ii)&nbsp;a summary of the intrinsic value of all outstanding
vested and unvested equity awards held by each Named Executive Officer at
current stock prices.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">These &#147;tally sheets&#148; provided the Compensation
Committee with context for the decisions they made concerning total direct
compensation and individual compensation elements.&#160; Although they did not necessarily drive
decision-making with regard to specific elements of the Company&#146;s executive
compensation program, the &#147;tally sheets&#148; enabled the Compensation Committee to
assess total direct compensation and the relationship of various compensation
elements to each other.&#160; These &#147;tally
sheets&#148; may also influence the Compensation Committee&#146;s views on a variety of
issues, such as changes to severance plans and employment contracts, special
equity grants to promote retention, or changes in long-term variable equity
incentives, although no such decisions were made in 2007 based substantially on
the information set forth in the &#147;tally sheets.&#148;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In future filings, the Company will describe the
information that is included in the tally sheets and how such information
influenced compensation decisions if tally sheets are prepared for and used by
the Compensation Committee.&#160; The tally
sheets have not been used as a sole basis for making any compensation
decisions.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">10.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>On page&nbsp;25, you disclose that you will
use a secondary peer group of 115 high technology companies that are reported
in Radford&#146;s High Technology Executive Survey.&#160;
Item 402(b)(2)(xiv) requires you to disclose the component companies
used in any benchmarking.</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">In future filings, please disclose all companies
used in benchmarking.</font></i></b></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response: In future filings, the Company will
disclose all component companies used in any &#147;benchmarking&#148; (as that term is
defined in Question and Answer 118.05 of the </font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Staff&#146;s Compliance and Disclosure Interpretations of
Regulation S-K) of compensation for its Named Executive Officers to the extent
that the Company has access to the identities of these companies.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">11.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>On page&nbsp;28, you disclose that you paid
non-discretionary cash bonuses in 2007 to Messrs.&nbsp;Christopher and
King.&#160; Mr.&nbsp;Christopher&#146;s bonus of
$821,181 was based on 2% of the annual earnings before taxes of the Personal
Communications Division.&#160; Item 402(b)(1)(v)&nbsp;requires
you to describe how you determine the amount of each compensation element.&#160; Footnote (2)&nbsp;to the table on page&nbsp;28
does not disclose the annual earnings before taxes of the Personal
Communication Division.</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">In future filings, if you
continue to use this performance metric for Mr.&nbsp;Christopher, please
disclose the annual earnings before taxes of the Personal Communication
Division.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response: The Company acknowledges the Staff&#146;s
comment and in future filings will describe how the Company determined the amount
of each compensation element to the extent that such information is material to
an understanding of the amount paid to the Named Executive Officers.&#160; Further, although Mr.&nbsp;Christopher is no
longer an employee of the Company, if he qualifies as a Named Executive Officer
for 2008, the Company will disclose the annual earnings before taxes of the
Personal Communications Division to the extent that he received a
nondiscretionary cash bonus based in whole or in part on that performance
metric.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">12.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>On page&nbsp;27, you disclose that the
Compensation Committee considers &#147;MBOs&#148; which include &#147;financial performance
goals&#148; and &#147;other operational goals.&#148;&#160;
You, however, do not disclose those performance goals.&#160; Similarly, on page&nbsp;28, you disclose that
Mr.&nbsp;King had certain sales targets for 2007: a booking target, a
collections target, and a margin target; all such performance targets are not
disclosed.&#160; Also, on pages&nbsp;29-30,
you state performance based equity awards are based on each executive achieving
certain management objectives including &#147;(i)&nbsp;achievement of corporate
financial measures such as bookings, gross margin, revenue, operating profit,
cash flow, inventory turns, contribution margin, cost reduction, and cash
collections.&#148;&#160; You also do not disclose
those performance targets.</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">In future filings, please
disclose all performance goals and targets the Compensation Committee considers
in awarding discretionary and non-discretionary bonuses and the threshold
levels that must be reached for payments to be made.&#160; See Item 402(b)(2)(v).&#160; </font></i></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Please also consult the &#147;Staff
Observations in the Review of Executive Compensation Disclosure.&#148;</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">If the performance goals or
thresholds are not stated in quantitative terms, explain how the Compensation
Committee determines the named executive officers&#146; achievement levels for a
specific performance measure.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">To the extent that you have not
disclosed performance goals or threshold levels because you believe the
disclosure of such goals and levels could result in competitive harm, you may
omit such information.&#160; However, if you
choose to omit such information in future filings, please provide a detailed
analysis in your response letter as to why such goals and levels should be
given confidential treatment in future filings.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Also, if you choose not to
disclose performance goals or threshold levels in future filings, please
discuss in future filings how difficult it would be for the executive or the
company to achieve the undisclosed performance goals or thresholds.&#160; Here, general statements regarding the level
of difficulty or ease associated with achieving the goals or thresholds are not
sufficient.&#160; In discussing how difficult
or easy it will be for an executive or the company to achieve the goals or
thresholds, provide as much detail as necessary without providing information
that would result in competitive harm.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response:&#160; The
Company advises the Staff that, in 2007, each of the Named Executive Officers
had one or more pre-established &#147;management by objective&#148; (&#147;MBO&#148;) goals,
consisting of financial performance and/or operational objectives, that were
considered by the Compensation Committee in determining bonus payouts.&#160; However, in light of the Committee&#146;s decision
that no discretionary bonuses would be paid for the year, the Company concluded
that the disclosure of these goals was not material to an understanding of the
annual bonus program for 2007.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In future filings, the Company will (i)&nbsp;describe
with greater specificity any performance metrics (including any MBO goals)
considered by the Compensation Committee in awarding discretionary and
nondiscretionary bonuses to the Named Executive Officers and, if applicable,
the threshold levels that must be reached for payments to be made, and (ii), if
applicable, disclose any material target levels for such performance metrics to
the extent that such target levels do not involve confidential trade secrets or
confidential commercial or financial information the disclosure of which would
result in competitive harm to the Company (applying the standard described in
Question and Answer 118.04 of the Staff&#146;s Compliance and Disclosure
Interpretations of Regulation S-K).</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">13.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>On page&nbsp;28, you disclose that &#147;no
[discretionary] bonuses would be paid to NEOs for 2007.&#148;</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">In future filings, please
disclose whether such an event occurred because the NEOs did not achieve their
performance goals or whether the Compensation Committee, as mentioned on page&nbsp;27,
applied &#147;negative&nbsp;.&nbsp;.&nbsp;. discretion to adjust the actual award.&#148;</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response:&#160; As
described on pages&nbsp;27-28 of the Compensation Discussion and Analysis, in
2007 the Company&#146;s annual bonus program was a discretionary, variable cash
incentive program designed to reward executives (as well as all employees) for
achieving key operational goals.&#160; In
addition, several of our executive officers have bonus arrangements that are
set forth in employment or other agreements with such executive officers.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In 2007, the executive bonus plan did not include
predetermined quantitative thresholds that had to be achieved prior to payment
of bonuses.&#160; Instead, the Compensation
Committee assessed the performance of each executive officer, including his or
her performance against his or her &#147;management by objective&#148; goals and then
exercised its discretion to determine bonus payouts.&#160; However, in light of the Company&#146;s financial
performance in 2007, the Compensation Committee determined that no
discretionary bonuses would be paid to the executives.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company advises the Staff that, for 2008, the
Compensation Committee has once again determined that, in light of the Company&#146;s
financial performance, no discretionary bonuses will be paid to the Company&#146;s
executives.&#160; To achieve this result, the
Compensation Committee has applied &#147;negative discretion&#148; to reduce the amounts
that would otherwise be payable for 2008 to zero.&#160; The Company will include a discussion of all
material factors necessary to an understanding of the annual bonus program
(including amounts that may otherwise have been paid absent the exercise of any
negative discretion) for the Company&#146;s executives in the Compensation
Discussion and Analysis to be included in its definitive proxy statement for
2008.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In future filings, the Company will disclose with
greater specificity the Compensation Committee&#146;s rationale for the payment or
nonpayment of bonuses under the Company&#146;s annual bonus program.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;font-weight:normal;">14.</font></i></b><font size="1" style="font-size:3.0pt;font-style:normal;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Item 402(j)(1)&nbsp;requires you describe the
specific circumstances that would trigger certain payments upon any termination
of a named executive officer or change-in-control of the company.&#160; On page&nbsp;44, you use the terms &#147;involuntary
termination&#148; and &#147;good reason&#148; and, on page&nbsp;52, you use the term &#147;cause.&#148;</h1>

<h1 style="font-style:italic;font-weight:bold;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></i></b></h1>

<p style="margin:0in 0in .0001pt .5in;text-indent:0in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">In future filings, please describe more
specifically the circumstances that constitute &#147;involuntary termination,&#148; &#147;good
reason,&#148; and &#147;cause.&#148;</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Response:&#160; The
Company acknowledges the Staff&#146;s comment and in future filings will, in connection
with the disclosure required by Item 402(j)(1), describe with greater
specificity the circumstances that would trigger certain payments upon any
termination of a Named Executive Officer or a change in control of the Company,
including, where appropriate, the circumstances that constitute &#147;involuntary
termination,&#148; &#147;good reason,&#148; and &#147;cause.&#148;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">* * * *</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
connection with this letter, the Company hereby acknowledges that:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the
Company is responsible for the adequacy and accuracy of the disclosure in the
filings;</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Staff
comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the
Company may not assert Staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.</p>

<p style="margin:0in 0in .0001pt .75in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Please
call the undersigned at (510) 769-2836 if you should have any further comments
or questions concerning this matter.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.26%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sincerely,</font></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.26%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.26%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.26%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:49.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/Viraj
  Patel</font></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.26%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:49.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Viraj
  Patel</font></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.26%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interim
  Chief Financial Officer</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

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