CONTRACT FOR PROCESSING & ASSEMBLY

CONTRACTFORPROCESSING&ASSEMBLY

ContractNo:________________
ConclusionDate:____________
ConclusionPlace:___________
PartyA:__________Company(PartyofProcessingorAssembling)
LegalAddress:________________________________
Tel:_______________Fax:______________E-mail:___________

PartyB:___________Ltd.(PartyofSupplyingMaterialsandParts)
LegalAddress:________________________________
Tel:_______________;Fax:______________;E-mail:__________

PartyAandPartyB,accordingtothelawsandpoliciesofthePeople’sRepublicofChinaandtherelevantregulationsandtheprinciplesofequalityandmutualbenefit,havehelddiscussionsrelatingtotheprocessingandassemblingof(plastictoyproducts)andhavereachedagreementonthefollowingcontractualclauses:

1.Responsibilities

(1)ResponsibilitiesofPartyA
1)PartyAshallprovidefactoryspaceconsistingof_____squaremetres,fieldof_____squaremetreswithoutcovering,_____factorymanagementpersonand_____workersforthefirstphase.Thenumberofworkersshallbeincreasedto_____twelvemonthsafteroperation.WithintheContractterm,PartyAshallprocesstheproductsforpartyBwhichshallbere-exprotedto_____.

2)ThewatersupplyandutilityequipmentrequiredforprocessingshallbeprovidedbyPartyA.Ifadditionalinstallationsofwaterandelectricfacilitiesarerequired,theexpensesthereofshallbebornebyPartyB.
3)PartyAshallarrangeallthenecessaryimportandexportapprovalsrequiredforprocessingandassemblyandprovideadministrationandaccountingmanagementfortheprocessingplant.PartyAcannotassignPartyA’sresponsibilitiestoanyotherpartyorindividualinanyway.

(2)ResponsibilitiesofPartyB
1)Toprovidetheequipmentwiththetotalvalueof_____.
2)Toprovidetherawmaterials,indirectmaterialsandpackagingmaterialsforprocessingtheproducts.Quantitiesandspecificationsaretobespecifiedinseparateprocessingcontracts.
3)Intheeventanypersonnel,includingmanagementshowssubstandardperformanceandmakesnoimprovementafterretraining,PartyBshallhavetherighttorequestPartyAtoreplacesuchpersons.However,anyphysicalsearchoftheworkersshallberegardedasillegalandprohibited.

2.QuantityofProducts

Duringthefirstyear,thetotalprocessingfeeshallamountto_____.Fromthesecondyear,thequantityshallbeincreased.Detailsshallbespecifiedinseparateprocessingcontracts.

3.Price&Salary

(1)Thetrialproduction(includingtraining)periodshallbe_____.Duringsuchperiod,theworkersshallbepaid_____permonthonthebasisof_____workingdayspermonthand_____workinghoursperday.
(2)Afterthetrialproductionperiod,theworker’spaymentshallbecalculatedaccordingtoactualproductionquantities.Onthebasisofmutualbenefit,bothpartiesshallconsidertheprocessingfee,whichshallbespecifiedinseparateprocessingcontracts,accordingtodifferentkindsofproducts,specifications,stylesandengineeringprocedures.Inordertoensurethereasonableincomeoftheworkers,theworker’smonthlysalaryshallbemaintainednolowerthan_____.Ifovertimeworkisrequired,paymentshallbecalculatedseparately.However,overtimeshallnotexceed_____hoursaday.
(3)ExpensesforwaterandelectricityinPartyA’splantshallbebornebyPartyB.
(4)EverymonthPartyBshallpay_____toPartyAformanagementexpenses.

4.ProportionProductsDamaged

(1)Duringthetrialproductionperiod,PartyBshallabsorbthecostofproductsdamaged.
(2)Afterthetrialproductionperiod,theproportionofdamagedproductsshallbemutuallyconsideredanddecidedbybothpartiesandspecifiedinseparateprocessingcontracts.

5.ShipmentofRawMaterials&FinishedProducts

(1)Everymonth,PartyBshallprovidesufficientrawmaterialsandpackagingmaterialsaccordingtothecontractedprocessingvolume.ToensurethenormalproductionofPartyA’splant,PartyBshallshipsuchmaterialstotheplant_____daysbeforetheproductionofeachlotofproducts.Exceptforreasonofforcemajeure,theplantshalloperateformorethan_____daysinamonth.Incaseproductionisheldupfor_____daystoinsufficientsupplyofrawmaterials,PartyBshallcalculatetheactualdayswhenproductionisshutdownandpaytoPartyAtheworkers’livingexpensesattherateof_____perpersonperday.
(2)ToensurethenormaloperationofPartyB’sbusinessactivities,PartyAshalldeliverthefinishedproductstoPartyBinaccordancewiththetimeofdelivery,qualityandquantity.Exceptforreasonofforcemajeure,incaselossestoPartyBarecausedduetoPartyA’sfailuretomakedeliveryasmentionedabove,PartyAshallberesponsibleforthecompensation.Detailsofsuchcompensationshallbemutuallyagreeduponinseparateprocessingcontracts.
(3)BothpartiesshallmutuallyinspectanddocumenttheequipmentandmaterialsprovidedbyPartyB,suchasmachinery,ventilationandlightingequipmentandrawmaterials.AfterthefinishedproductsareinspectedandshippedfromtheplantbyPartyB,PartyAshallbefreeofanyresponsibilityinregardtospecifications,qualityandquantity,etc.

6.MethodofPayment

Paymentofworkers’salaryandmanagementfeeshallbesettledonceamonthbyD/P,whichshallbeconductedthroughBankofChina_________BranchbyPartyB’sbankin_____(_____Bank,AccountNO.______)inaccordancewiththeinvoicesissuedbyPartyAandaTradeCompany(authorizedbythelocalgovernmenttobeinchargeofaffairsofprocessingandassemblyandwithforeigntradeauthority,hereinafterreferredtoastheAuthorizedTradeCompany).IncasePartyB’spaymentisdelayedfor_____days,PartyBshallberesponsiblefortheinterestincurredaccordingtothebank’sinterestrate;incasepaymentisnotsettledfor_____consecutivemonths,PartyAshallhavetherighttosuspenddeliveryofthefinishedproductsortakeothermeasures.

7.LabourProtection&Insurance

(1)Theplantshalltakesafetymeasuresandprotecttheworkersfromdirt,smokeandpoisonousmaterials.Thefactoryshallbemaintainedventilatedandbright,andthesurroundingscleanandtidy.
(2)Thetransportationexpensesforthemachinery,ventilationandlightingequipment,rawmaterials,indirectmaterials,packagingmaterialsandthefinishedproductsshallbepaidforbyPartyB.
(3)Allinsuranceforthetransportationandstorageoftheabovematerials,machineryandequipmentandcoverageoftheworkersoperatingthemachineryshallbearrangedthroughthe_____InsuranceCompanyof.

8.TechnicalExchange

Afterthearrivaloftheequipmentintheplant,PartyBshalldispatchpersonneltoinstallsuchequipment,whilePartyAshallarrangepersonneltoassisttheinstallation.Whenthetrialproductionbegins,PartyBshallprovidetechnicalpersonneltocarryoutthetraininguntiltheworkershavemasteredthetechnologyandtheproductionoperatesnormally.PartyBshallberesponsibleforthetechnicalpersonnel’ssalaryandallrelatedexpenses,andPartyAshallprovidedailynecessities.

9.ContractTerm

Afterthiscontractissignedandapproved,PartyBshallpresenttoPartyAitsCommercialRegistrationandBankCreditCertificateforPartyAtoarrangebusinesslicenceandCustomsRegistration.Thetermofthiscontractshallbethreeyears,e.g.from______to________.Ifeitherpartywishestoterminateinadvanceorextendthecontract,theresponsiblepartyshallinformtheotherpartythreemonthsinadvancesothatbothpartiescandiscussandsettlesuchaterminationorextension.Ifeitherpartyterminatesthecontactbeforethetermexpires,theresponsiblepartyshallcompensatetheotherpartyforthelossesinsuchcase,theresponsiblepartyshallpaytheotherpartyascompensationtheamountof_____timesthemonthlyprocessingfee.Thefeewillbebasedontheaveragemonthlyfeeoftheprevious_____months.
Afterthecontracttermexpires,therealestatesuchasthefactorybuildinganddormitorybuildingshallreturntoPartyAandthemachineryandequipmentdeliveredbyPartybshallbereturnedtoPartyB.Customsclearanceproceduresshallbegonethroughaccordingtorelevantregulations.
Bothpartiesagreethat,within_____daysafterthecontractissignedandapproved,PartyBshallpayPartyAtheamountof_____asitsguaranteetocarryoutthecontract.If,within_____monthsafterPartyA’sreceiptofsuchamount,PartyBstillcannotarrangetostartproduction,theamountshallbeforfeitedtoPartyAunconditionallyandPartyAshallhavetherighttocancelthecontract.IfPartyBcanstartproductionontime,theamountwillbedeductedfromtheprocessingfee.

10.Arbitration

AnydisputearisingfromorinconnectionwiththisContract(andincludingalltheseparateprocessingcontracts)shallbesettledthroughamicablenegotiation.Shouldnosettlementbereachedthroughnegotiation,thecaseshallthenbesubmittedtotheChinaInternationalEconomicandTradeArbitrationCommission(CIETAC),ShenzhenCommissionforarbitrationthatshallbeconductedinShenzheninaccordancewiththeCIETAC’sarbitrationrulesineffectatthetimeofapplyingforarbitration.Thearbitralawardisfinalandbindinguponparties.

11.Language

ThepresentcontractisdrawninChineseandEnglishaswell,bothtextsbeingequallyauthentic.Incaseofanydivergenceofinterpretation,theChinesetextshallprevail.

12.AmendmentandCopies

Thiscontactismadeoutin_____copiesrespectivelyheldbytheParties,theCustoms,VehicleAuthorityandtheAuthorizedTradeCompany.Theyshallhavethesameforce.
Ifthereareotherissuesnotcoveredinthecontract,bothpartiescandiscusstosupplementoramendthecontractandsubmittheresultstorelevantdepartmentsforapproval.

PartyA:_____________________
PartyB:________________________
AuthorizedRepresentative:____
AuthorizedRepresentative:________
TheAuthorizedTradeCompany:_____________________