Sinocan International Technologies Co., Ltd.
2nd Floor, T3 Building, Shenzhen High-Tech Park
Shenzhen, China 518057
Date:

THIS AGREEMENT is between SINOCAN INTERNATIONAL TRADE COMPANY, a Hong Kong corporation, with its principal place of business at 1/F, St. George's Building, 2 Ice House Street, Central, Hong Kong, SAR, China (hereinafter referred to as "SINOCAN"), and Account Name_____, Address_________ Key Contact Name_______, Title ________, Telephone Number ____ (hereinafter referred to as "DISTRIBUTOR"). (SINOCAN and DISTRIBUTOR are hereinafter referred to jointly as the "Parties" and Individually as "Party").

1. THE SCOPE OF APPOINTMENT

SINOCAN appoints the DISTRIBUTOR on an exclusive base, to sell and promote the sale of SINOCAN LCD PC products and accessories set forth on the current Sinocan published price pages listed in List Price of Sinocan Product Line (hereinafter referred to as Products") to commercial and consumer end-users.

DISTRIBUTOR recognizes that Sinocan will not sell Products to any new customers, including direct sales to dealers or sales to distributors for resale.

With the exclusive distributorship, SINOCAN will not promote the products in the region and SINOCAN will refer all existed and new clients from the region to the Distributor. Besides, SINOCAN will supply DISTRIBUTOR's logo and other company information to frame of computers, cd-rom of drivers and utilities, labels etc. with a small amount of charge if DISTRIBUTOR requires OEM.

The territory will be _________________

2. THE SUBJECT OF THE CONTRACT

2.1 SINOCAN is obligated to supply the computer parts in parcels, until the maturity date of this Contract, hereafter called “Products”, and the DISTRIBUTOR is obligated to accept Product and pay for them according to the set rules and regulations of the Contract.

2.2 The name, quantity, the price per capita, the general Contract price and specific times and terms of delivery of each parcel, all will be highlighted in the PI set by Sinocan.

2.3 The parcels of Product will be supplied either via courier, air or sea. Before the shipment is to be made, all the terms and conditions of such shipment will be indicated in PI set by Sinocan.

2.4 The general conditions of Contract are to be regulated by the US-China Common Trade Conditions,1990 and UCP500 whenever L/C is involved.

3. THE PRICE

3.1 The price, indicated in the Price List for Distributors is to be specified each time the parcel is to be shipped and is supposed to be highlighted in the Price List for Distributors sent to Distributor by Sinocan.

3.2 In final, prices are included: a) cost of packaging and marking of Product b) all other expense, which the SINOCAN will have to incur in accordance with the conditions of the delivery of Product to the DISTRIBUTOR, as specified in each order with correspondent PI.

3.3 The price, which is indicated in the Price List for Distributors renewed every month is by all means final and is not subject to any changes within the month.

4. THE CONDITIONS OF THE ORDERING OF PRODUCT

4.1 In order to purchase any specific type of Product, the DISTRIBUTOR has to forward a preliminary order form to the SINOCAN. The Order Form layout and content has to be specified and affirmed by both parties and has to be a part of the Contract.

4.2 The SINOCAN is obligated to inform the DISTRIBUTOR of the availability of requested Product during the 3 days period after receiving the Order Form from the DISTRIBUTOR. The Form of the Confirmation of availability has to be affirmed by both parties and has to be a part of this Contract.

4.3 After the DISTRIBUTOR receives the confirmation of possible delivery of Product from SINOCAN, it is considered that the order has been made and it is settled. After the DISTRIBUTOR and SINOCAN agree on and confirm the Product's price and terms of the deal, both parties should sign a Specification on delivery of the agreed type of Product.

5. THE PACKAGING AND MARKING OF PARCEL

5.1 The packaging has to be done according to the regulations (and / or technical requirements) of the SINOCAN and has to guarantee the Product's safety (assuming the proper handling is applied of parcel during shipping) while it is being shipped to the DISTRIBUTOR.

5.2 The SINOCAN is bearing full responsibility for any kind and type of damage of Product while it is en route to the DISTRIBUTOR.

5.3 Every single box, containing shipped Product has to bear on itself (in English and / or Chinese):
a) The name of the destination point and the address of the recipient (the DISTRIBUTOR)
b) The name and address of the SINOCAN (with the indication of the country of origin) if requested by the Distributor
c) The parcel number
d) Gross weight
e) Net weight
f) All other necessary information, which may be given by the DISTRIBUTOR to the SINOCAN before the delivery is to be made.

5.4 All parcels, which require the specific handling, should be properly marked “Handle Carefully”, “The Top”, and / or “Do not Drop”.

5.5 The sign “+” or words “The Center of Gravity” have to be clearly visible on objects, in the case the parcels are either too heavy (over 500 kg), too long (over 1 meter), or simply of irregular size; The marking is to be done with the unwashable paint.

5.6 The SINOCAN is responsible for extra cost, associated with the wrong delivery (which differs from the Distributor's destination) and all storage costs, which might occur as a result of such delivery or a poor Product marking.

5.7 The packaging, in which the Product reaches to the DISTRIBUTOR, should be considered non-returnable.

6. THE PAYMENT TERMS

6.1 All payments will be deducted / transferred to the SINOCAN from the bank account of the DISTRIBUTOR (via T/T or Swift) according to the agreed total price of parcels.

6.2 Only after Sinocan receives the full payment from Distributor, Sinocan will start to ship the products to Distributor. Distributor should permit the delivery for 10-20 working days after Sinocan receives the full payment and to bear the specifications as follows: a) Partial delivery is not permitted b) Overloading is not permitted

6.3 Whenever L/C is involved, the payments to the SINOCAN are to be made from the DISTRIBUTOR's Bank upon the submission of the following documents:
1) Account numbers
2) Original bill from the bank
3) Certificate of Quality of Product from SINOCAN–1 copy.
4) Certificate of Origin (CT-1) whenever necessary – 1 copy
All abovementioned documents are to be submitted to the Bank 7 working days ahead of the delivery commencing date.

6.4 The Distributor will be responsible for all their banking expenses, not for Sinocan banking expenses.

6.5 The SINOCAN should cover all expenses associated with prolonging of the credit account, if the SINOCAN has affected the prolongation of the credit.

6.6 In case of the delay in an account opening by the DISTRIBUTOR, the SINOCAN can change the timing terms of the delivery.

6.7 The DISTRIBUTOR has a right to deny the payment for the supplied Product, in case if there is 5% (five percent) of said Product is damaged and cannot be reinstated to the sellable condition within the time limit, according to the DISTRIBUTOR's convenience and possibilities When denying a payment for the Product, the DISTRIBUTOR has to forward to the SINOCAN a written notice. The SINOCAN is obligated to repay to the DISTRIBUTOR in full for the abovementioned Product during 10 banking days after receiving the DISTRIBUTOR's notice. Both parties have a right to discuss the reimbursement of said repayment back to the SINOCAN during the subsequent shipments.

7. RIGHTS AND RESPONSIBILITIES

7.1 The SINOCAN's responsibilities:
a) To offer DISTRIBUTOR the best discount in the distribution territory (territories) and to forward all purchasing inquires from the distribution territory (territories) to the DISTRIBUTOR.
b) To provide DISTRIBUTOR with Product information,literature and sales materials, to rebate 1% of all purchase value to the DISTRIBUTOR in the end of each quarter if the DISTRIBUTOR has reach
quarterly sales quota.
c) To make available the services of a Sinocan sales representative to provide Product information, merchandising and general sales support.
d) To notify the DISTRIBUTOR regarding the readiness of delivery not later than 30 calendar days before such delivery is to be made via fax or email.
e) To submit the parcel to the exporter on time, specified in the appendix 1.2 of the Contract, in the airport or the seaport, whichever was confirmed and discussed with the DISTRIBUTOR.
f) To provide an appropriate packaging at own expense, as indicated by the Contract
g) To incur all expenses of providing the quality of Product, its scaling and measuring
h) To fully assist the DISTRIBUTOR (upon request, and at the DISTRIBUTOR's expense) in obtaining all necessary documentation which might be necessary for proper exporting and importing of Product
i) Bear all costs associated with the customs and taxes in China (if these taxes and customs duties are applied there)

7.2 The DISTRIBUTOR's responsibilities
a) Purchase a minimum of _________ of assorted Products, net of discounts and returns, as an initial purchase before June 1st, 2006. Every sixty (60) days Sinocan and DISTRIBUTOR agree to review DISTRIBUTOR's performance in reaching its minimum purchase requirements (Starting from June 1st, 2006, the Distributor will have a minimum sales quota as of ________ each month; Starting from September 1, 2006, the Distributor will have a minimum sales quota as of ____________each month) and other obligations under this Agreement. If the Distributor can't fulfill its sales quota in 3 consecutive months (the pre-condition is Sinocan can deliver the products on time as stated in this agreement), SINOCAN will have the right to terminate the exclusive distributorship agreement enclosed in this agreement.
b) To vigorously and enthusiastically promote the sale of the full line of Products and will maintain a well-trained and well-managed sales force capable of and committed to maximize the demand for Products through every proper means.
a) To prepare all marketing materials and all marketing campaigns
b) To maintain an adequate inventory of the full line of Products so that DISTRIBUTOR can promptly fill orders from stock.
c) To work with Sinocan once each quarter to furnish to Sinocan a written non-binding forecast of its requirements for the Product(s) for the ensuing twelve monthes.
d) To hold in confidence and not disclose to others Sinocan's marketing plans, promotional programs and other Sinocan confidential information.
e) To use the name "Sinocan, or any other trademark, trade name, or service mark owned by Sinocan, in strict accordance with the guidelines furnished by Sinocan.
f) To accept the Products in a place and in time, as specified in the present Contract.
g) To pay for Product as specified by the present Contract
h) To bear all responsibility regarding the delivered Product, and all risks to which the Product can be exposed from the moment of when it is at disposal of the DISTRIBUTOR.
i) To bear all charges regarding payment of the customs and taxes in the Distributor's Country. Mutual responsibility of both parties, which is not specified by the present Contract, shall be subject of Jurisdiction of the Trade Code between USA and China of 1990.

8. THE QUALITY OF PRODUCT

8.1 Quality of the delivered Product should correspond to quality of the manufacturer and prove to be true by CE, FCC, CCC.

8.2 In case of the submission by the SINOCAN of the Product of inadequate quality, the DISTRIBUTOR has the right to demand at the choice:
8.2.1 Proportional reduction of the price of the said Product
8.2.2 Elimination of all problems, such as repair, return and / or the reimbursement for their correction by the DISTRIBUTOR or the third party with 90 days after the notice of complaint was served to the SINOCAN.
8.2.3 Replacements of the Product to the similar Product (model, the article)
8.2.4 Replacements of the same Product to the other Product (model, the article) with the appropriate recalculation of a purchasing price.
8.2.5 DISTRIBUTOR's refusal to accept the poor-quality Product and return of said Product back to the SINOCAN at the SINOCAN's own expenseThe DISTRIBUTOR has a full right to demand complete reimbursement from the SINOCAN for all losses, which were incurred by the DISTRIBUTOR as a result of purchasing the unqualified Product from the SINOCAN.

8.3 In case of essential infringement of requirements to quality of the Product (detection of ineradicable problems, problems which can not be eliminated without disproportionate charges or expenses of time, or come to light repeatedly, are shown again after their elimination and other similar problems), the DISTRIBUTOR has the right to choose from the following:
8.3.1 To refuse the entire shipment of the Product and to demand the full reimbursement.
8.3.2 To demand replacement of the Product of inadequate quality with the Product which would be appropriate to the Contract's specifications.

8.4 The SINOCAN is responsible for Product's quality, unless the SINOCAN will prove, beyond the reasonable doubt, that the Product's quality has been damaged or otherwise altered, after the said Product being in the DISTRIBUTOR's possession.

8.5 The DISTRIBUTOR can, only furnish all the complaints in any way connected to the Product's quality, within a warranty period.

9. COMPLETENESS OF PRODUCT

9.1 Under the present Contract the SINOCAN is obligated to transfer the Product, appropriate to a condition about completeness, that is in aggregate with all completing parts, specified in the Contract's specifications

9.2 If the Product is delivered, which is not appropriate to with the completeness's condition, the DISTRIBUTOR has the right to demand from the SINOCAN the proportional reduction of a purchase price or to make the said Product completely appropriate with the appendix 1.2 of Contract within 90 days after the notice of complaint was served to the SINOCAN.

9.3 If the SINOCAN did not comply with the DISTRIBUTOR's complaint notice on time, as specified in appendix 1.2, the DISTRIBUTOR has the right to demand replacement for the incomplete, damaged and poorly delivered Product or to refuse the delivery altogether, and to demand the complete reimbursement for the paid Product.

10. QUANTITY OF PRODUCT

10.1 If the quantity of Product differs in any way from the quantity, which was supposed to be shipped to the DISTRIBUTOR, (as stipulated in each PI sent out by Sinocan , the DISTRIBUTOR has the right to choose any of the following:
10.1.1 To demand the supply of the missing amount of the Product free of charge
10.1.2 To refuse the entire shipment of Product (including the payment for the Product) and to demand the reimbursement of the DISTRIBUTOR's prepayment.

10.2 In case of delivery of Product, which is exceeding the quantity, specified in the PI sent out by Sinocan, the DISTRIBUTOR is obliged to notify the SINOCAN regarding this matter promptly. If, during 30 days after reception of the DISTRIBUTOR's message, the SINOCAN still not makes any comments regarding the extra Product, the DISTRIBUTOR has the right to accept and use all Products according to the DISTRIBUTOR's wish. All the Product of extra quantity should be paid for as specified in PI issued by Sinocan of the present Contract.

11. ACCEPTANCE OF THE PRODUCT BY QUALITY AND QUANTITY / AMOUNT

11.1 The DISTRIBUTOR will make acceptance and evaluation of the quality and / or the amount of the Product at once, after the Product's arrival at the destination point of North Europe(Sweden, Norway, Denmark, Ice Land).

11.2 Acceptance and evaluation of the Product's quality / amount is carried out according to the CE, FCC, CCC (the Certificate of Quality). Hidden defects of the said Product should be cleared out within the warranty period.

11.3 Acceptance and evaluation of the Product's quantity / amount is carried out within 30 days from the clearance date, which is indicated by the Customs of the Distributor's Country; The clearance date should be indicated on the special Cargo Form Declaration, in places, specified in the place list.

11.4 In a case if infringement of quality of the Product or its shortage in terms of quantity / amount shall be established, the DISTRIBUTOR should, together with the representative of a carrier makes the report and, depending on the reasons of infringement of quality of the Product and occurrence of its shortage by quantity / amount, file the appropriate claims.

11.5 The SINOCAN bears full responsibility for all problems with the Product, which had occurred before the delivery of the Product to the DISTRIBUTOR, if the reason for these problems had existed before the delivery and if the DISTRIBUTOR has served the appropriate claim, which was made not later than 30 days from the Product's acceptance date, the SINOCAN must immediately to compensate shortage of the Product and to replace the unqualified / damaged / broken Product.

11.6 The DISTRIBUTOR is obliged to inform the SINOCAN of infringement of treaty provisions regarding quantity / amount, quality, completeness, container problems and (or) about packaging of the Product within 30 days after infringement was or it should be revealed proceeding from character and purpose (assignment) of the Product. In case when a rules and stipulations are not complied with on the part of the DISTRIBUTOR, the SINOCAN has a right to refuse to fully or partially satisfy the DISTRIBUTOR's requirements regarding the furnishing of the Product's part or in whole, exchanging / replacing of Product or packaging of Product, unless the DISTRIBUTOR will prove that non-complying of mentioned rules and stipulations was in fact to the benefit of the SINOCAN, or, was connected to the losses of grand sums of money.

12. LEARING OF THE RESPONSIBILITY / LIABILITY

12.1 The SINOCAN and the DISTRIBUTOR are excused from the responsibility for partial or full default of obligations under the present Contract if it has come as a consequence of “force majeure” circumstances (God's will)

12.2 “Force majeure” is generally considered set of circumstances, which did not exists at the time when the present Contract was drawn, and occurred by themselves, were unrelated to the SINOCAN or DISTRIBUTOR's wills, occurred chaotically, unpredictably, and which are generally can not in any way be controlled by the SINOCAN or DISTRIBUTOR.

12.3 The following events can be considered as “force majeure” events - earthquakes, flooding, a fire, epidemics, failures on transport, military actions, and sudden prohibition by States of the export or import of any Product, which might be the very subject of trade between the SINOCAN and the DISTRIBUTOR.

12.4 Both parties can be exempted from the responsibility for partial or full default of the obligation under the present Contract if they prove, beyond the reasonable doubt, that the said default was caused by an obstacle outside of their control which even the attentive party could not avoid and which has arisen after the conclusion of the present Contract.

12.5 The party, which finds itself a subject of force majeure circumstances shall by all means possible, immediately informs the other party of said circumstances in clearest details possible.

12.6 If above mentioned notice will not be made in written term, the party, which has found itself under the “force majeure” circumstances, loses the right to refer to them in the justification, except for a case if the circumstance or an obstacle did not give an opportunity to send the notice to the other party.

12.7 If “force majeure” circumstances will exist for more than 2 months, the SINOCAN and the DISTRIBUTOR should resolve the destiny of the present Contract. Thus, if the mutual agreement will not be achieved, the party, which was not affected by the mentioned circumstances and an obstacle, has the right to terminate the contract at once without the arbitrary involvement.

13 .PRODUCT'S LIFE AND WARRANTY PERIOD

13.1 The SINOCAN shall indicate the warranty period – the period, during which the SINOCAN can guarantee the good working life of SINOCAN's Product.

13.2 Warranty and service life of the Product is established in one year. The extension of one year warranty coverage is available with a certain amount of charge varied from time to time.

13.3 The SINOCAN is obliged to establish a warranty period for the Product; within that time the SINOCAN must fix and otherwise improve all problems, which might occur with the Product.

13.4 The warranty period for the goods is established abided by the SINOCAN's Warranty Coverage.

13.5 The Product's warranty period and terms and conditions of its use, are estimated from the date of release of the Product in the free circulation on the territory of the Distributor's Country.

13.6 If, during a warranty period the Product appears to be defective, the SINOCAN is obliged to replace or repair of said defective Product or its parts. This shall be performed at the SINOCAN's own expense. The DISTRIBUTOR shall be financially responsible for all transportation expenses, connected with the delivery of the replaced and, or, fixed parts of Product.

13.7 The abovementioned warranty should only be considered in effect, if the following criteria / conditions are met:
a) The Product was held at the proper location and was cared in an appropriate manner.
b) There was not any kind of repairing and altering done to the Product without the written approval of the SINOCAN, and in particular, the sealed parts are not altered, broken or opened.
c) The Product was not a subject to the excessive use or technical negligence.
d) The abovementioned warranty shall not be considered in effect unless items A, B and C are complied with.

13.8 Claims on quality of the goods can be directed to the SINOCAN within the limits of the above mentioned warranty period, but not later than 60 days after its expiration, assumed that the defect was found during the warranty period.

13.9 Out-warranty service and any other kinds of service of the Product, rendering of information and other kinds of services can be made by the SINOCAN on the basis of additional agreements to the present Contract.

14. THE ORDER OF SETTLEMENT OF POSSIBLE DISPUTES

14.1 Both parties will carry out all disputes, which can occur regarding the present Contract or in its reference, during the negotiations.

14.2 Mutual relation of the parties, not settled by the present Contract, is subject to the Convention of the United Nations regarding Contracts of the International Trade and purchase of the goods (Vienna, April, 11, 1980) and the substantive law of China.

14.3 In case if the parties under the present contract will not come to a mutual consent, dispute between them shall be settled in the International Arbitration Court of the Chamber of Commerce of China.

14.4 The parties agree to the provisions of Arbitration Court and that the matter could be settled using other local, state and federal laws.

14.5 The parties agree that in order to reach the decision of their dispute, the substantive law of China will be applied.

14.6 The parties agree to fully comply with and / or execute the arbitration (judicial) decision upon the time of the verdict is announced.

15 .CONTRACT'S LANGUAGE AND THE CORRESPONDENCE

15.1 The present Contract is drawn in English.

15.2 All correspondence concerning the present Contract shall be conducted in English.

16. VALIDITY DATE OF THE CONTRACT

16.1 The present Contract is considered valid thereafter it has been signed by all participating responsible parties.

16.2 The date, indicated in the upper right corner of the Contract, is considered the validity date of the Contract.

16.3 After the validity date of the present Contract, all other previous negotiations, related documents and correspondence shall be considered invalid.

16.4 The present Contract will be renewed on yearly basis unless stated by parties with 60 days written notice

17. CONCESSION OF THE CONTRACT

17.1 The parties agree not transfer / give separate rights and duties, as well as the contract as a whole, to the third parties without receiving of the preliminary consent from other party.

17.2 The above-mentioned preliminary consent to a concession of the Contract should be made out in writing.

17.3 The mediating agent of the parties of the Contract, shall accept all rights and responsibilities of the present Contract.

18. RIGHTS OF THE THIRD PARTIES

18.1 By transfer of the Product burdened with rights of the third parties, the DISTRIBUTOR has the right to demand reduction of the price of the Product or cancellation of the present Contract, unless it is proved, that the DISTRIBUTOR knew or should have known about rights of the third parties to the Product.

18.2 In case of expropriation of the Product from the DISTRIBUTOR by the third parties on the bases which have arisen before the delivery of the Product, the SINOCAN is obliged to compensate the DISTRIBUTOR the losses suffered by latter, including the financial reimbursement, refund on purchase price of the Product from other SINOCAN, compensate for all additional financial losses, etc. The SINOCAN is exempted from this duty if will prove, that the DISTRIBUTOR knew or should have known about presence of the reasons of Product's expropriation.

19. CHANGES AND ADDITIONS TO THE CONTRACT

19.1 Changes and additions of the present contract are made exclusively in writing.

19.2 Valid and obligatory for the SINOCAN and the DISTRIBUTOR are those changes and additions, which were made with the mutual agreement only.

19.3 The written agreement is considered to include the following:
a) These documents, which are made out as a report of direct negotiations
b) The written present Contract
c) Email and Fax documents.

The Present Contract is drawn in English, contains two copies and is signed.

The SINOCAN: Sinocan International Trade Company The DISTRIBUTOR:

SINOCAN's signature_________________ DISTRIBUTOR's signature_________________