CONTRACT FOR PROCESSING & ASSEMBLY

6. Method of Payment

Payment of workers' salary and management fee shall be settled once a month by D/P, which shall be conducted through Bank of China _________Branch by Party B's bank in _____ (_____Bank, Account NO.______) in accordance with the invoices issued by Party A and a Trade Company (authorized by the local government to be in charge of affairs of processing and assembly and with foreign trade authority, hereinafter referred to as the Authorized Trade Company). In case Party B's payment is delayed for _____ days, Party B shall be responsible for the interest incurred according to the bank's interest rate; in case payment is not settled for _____ consecutive months, Party A shall have the right to suspend delivery of the finished products or take other measures.

7. Labour Protection & Insurance

(1) The plant shall take safety measures and protect the workers from dirt, smoke and poisonous materials. The factory shall be maintained ventilated and bright, and the surroundings clean and tidy.

(2) The transportation expenses for the machinery, ventilation and lighting equipment, raw materials, indirect materials, packaging materials and the finished products shall be paid for by Party B.

(3) All insurance for the transportation and storage of the above materials, machinery and equipment and coverage of the workers operating the machinery shall be arranged through the _____ Insurance Company of.

8. Technical Exchange

After the arrival of the equipment in the plant, Party B shall dispatch personnel to install such equipment, while Party A shall arrange personnel to assist the installation. When the trial production begins, Party B shall provide technical personnel to carry out the training until the workers have mastered the technology and the production operates normally. Party B shall be responsible for the technical personnel's salary and all related expenses, and Party A shall provide daily necessities.

9. Contract Term

After this contract is signed and approved, Party B shall present to Party A its Commercial Registration and Bank Credit Certificate for Party A to arrange business licence and Customs Registration. The term of this contract shall be three years, e.g. from______ to________. If either party wishes to terminate in advance or extend the contract, the responsible party shall inform the other party three months in advance so that both parties can discuss and settle such a termination or extension. If either party terminates the contact before the term expires, the responsible party shall compensate the other party for the losses in such case, the responsible party shall pay the other party as compensation the amount of _____ times the monthly processing fee. The fee will be based on the average monthly fee of the previous _____ months.

After the contract term expires, the real estate such as the factory building and dormitory building shall return to Party A and the machinery and equipment delivered by Party b shall be returned to Party B. Customs clearance procedures shall be gone through according to relevant regulations.