Labor
      Contract

    


    


    Party
      A:
      Taian Ruitai Cellulose Co., Ltd

    Authorized
      Representative: Lu Xingfu

    


    Party
      B:
      Lu Xingfu

    

      
        	
              	Sex:	
                 Male            
                  Education Level:
                  Undergraduate            
                  Birth Date: December 30, 1955

              


      

    

    ID
      Card
      Number: 370922551230693

    Address:
      Family Member Courtyard, Taian Ruitai Cellulose Co., Ltd

    


    1. This
      Contract is executed in accordance with the Labour Law of People's Republic
      of
      China and Labour Contract Regulation of Shandong Province.

    


    In
      the
      principle of mutual equality and voluntary basis, and through friendly
      negotiation, both Party A and Party B agree to sign the labor contract subject
      to the following terms and conditions: 

    


    2. Term
      of
      the Contract

    


    The
      term
      of this contract is for ten years and shall commence on October 6, 2000, and
      shall continue until October 6, 2010.

    


    3. Job
      Description and Working Conditions

    


    1) Party
      B
      agrees to act as the President of Party A according to the requirements of
      Party
      A and fulfill the working task, quality and quantity index as required by Party
      A.

     

    2) Party
      A
      shall, according to the specific requirements of the post, provide Party B
      with
      proper labor security and sanitary conditions and necessary labor protection
      articles in conformity with the stipulation of the country, reasonable equip
      Party B with necessary working instruments, and offer secure and healthful
      working environment to Party B.

    


    The
      working hours of Party B shall be subject to the provisions set forth by Party
      A.

    


    4. Rights
      and Obligations of Party A

    


    
      	1)	
              Obligations
                of Party A

            


    

     

    a) Abide
      by
      the laws, rules, regulations and policies of the country, respect the staff’s
      spirit of ownership, and develop an enterprise environment benefit to give
      full
      play to staff’s initiativeness and creativity.

     

    b) Take
      the
      responsibility to offer Party B with education and training services in respects
      of politics and ideology, professional ethics, business technology, secure
      production, law and discipline compliance and Company’s bylaws.

     

    c) Establish
      and improve the staff representative conference and other democratic
      administration system, ensure and give incentive to the participation of staffs
      in democratic administration of Company, supervise the administrative work
      of
      the Company, and protect the legal rights and benefits of all
      staffs.

     

    
      
         

      

      
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    d) Party
      A
      shall pay a monthly remuneration to Party A in full and on time and shall also
      provide Party B with relevant insurance and welfarisim treatment. Furthermore,
      Party A shall strictly follow the lowest salary insurance system as stipulated
      by the country and the government. Matters regarding to employee's pension
      insurance shall be governed in accordance with the current applicable provisions
      of the country.

     

    e) Party
      A
      shall strictly abide by the working hours system carried out by the country.
      In
      case of the production requirements, the working hours may be extended with
      the
      prior approval of labor union and Party B, but it shall not violate any
      applicable provision of the country and additional salary shall be paid to
      Party
      B for his overtime work.

     

    f) Party
      A
      shall not terminate the labor contract herein in case that Party B suffers
      from
      any of the following circumstances:

     

    i. This
      labor contract has not expired and Party B is not subject to the satisfaction
      of
      terms and conditions for the termination of the labor contract as set forth
      in
      Article 4, 2) c) herein; 

     

    ii. Party
      B
      has had an occupational disease or injured when working for Party A and has
      been
      identified as disabled or partially disabled;

     

    iii. Party
      B
      becomes sick or suffers injuries, which is within a prescribed medical treatment
      period;

     

    iv. Female
      staff is on pregnancy, maternity or nursing leave;

     

    v. Other
      circumstance as may specified by laws, rules and regulations.

    


    1) Rights
      of
      Party A

    


    Party
      A
      will perform the management work and carry out the system of reward and
      penalties in accordance with the relevant provisions of the country and bylaws
      legally prepared and implemented by the Company. During the term of this labor
      contract, Party A may, as it may be required by the production demand and agreed
      by both parties, reasonably adjust the working post of Party B or designate
      Party B to be engaged in other temporary and special works.

    


    Party
      A
      may terminate the labor contract herein if Party B is subject to any of the
      following circumstances:

    


    a) Party
      B
      is proved to have not met the hiring conditions during the probation
      period;

     

    b) Materially
      violate relevant labor disciplines or bylaws of Party A;

     

    c) Party
      B
      neglects his duty and is engaged in malpractice for personal gains, causing
      substantial loss to Party A;

     

    d) Party
      B
      is held criminally liable or under reeducation through labor in accordance
      with
      law;

     

    e) In
      the
      event that Party B becomes sick or suffers non-work related injuries, after
      Party B's medical leave has ended, Party B still has not recovered, or although
      Party B has recovered, Party B cannot perform the work on the original duty
      post
      or any other work arranged by Party A;

     

    
      
         

      

      
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    f) In
      the
      event that Party B is not competent for his/her work, after being trained or
      adjusted to change for another working post, Party B still can not be competent
      for such new work;

     

    g) There
      have been major changes to in objective circumstances used as the basis for the
      execution of this Contract, rendering it impossible to perform the original
      Contract, and the parties are still not able to reach an agreement on changes
      to
      this Labor Contract after their consultations;

     

    h) Party
      A
      is under the process of bankruptcy and reorganization or Party A confronts
      with
      business operation difficulty and staff cut-off is actually needed.

    


    Party
      A
      shall give 30 day’s prior notice to Party B if Party A intends to terminate the
      contract herein according to the stipulation of e), f), g) or h) of this Article
      above

    


    5. Rights
      and Obligations of Party B

    


    1) Abide
      by
      the laws, rules, regulations and policies of the country, cultivate the staff’s
      spirit of ownership, and protect the benefits of the country and Party
      A;

     

    2) Exert
      great efforts to participate in the educational and training program offered
      by
      Party A with regard to politics and ideology and professional ethics, etc.,
      follow the labor security and sanitation rules and procedure, and abide by
      labor
      disciplines and professional ethics;

     

    3) Accept
      and use great efforts to complete the production and working task designated
      by
      Party A, reach the relevant indexes set forth by Party A, and constantly upgrade
      the business technologies;

     

    4) Abide
      by
      various rules and bylaws as stipulated by Party A and be subject to the
      leadership and management of Party A;

     

    5) Perform
      other obligations as described by laws, rules and regulations;

     

    6) Party
      B
      shall not bring forward the termination of this contract under any of the
      following circumstances:

     

    a) Party
      B
      has received the training programs sponsored by Party A and has not fulfilled
      the service term as described herein;

     

    b) Party
      B
      is responsible for important tasks in connection with production, business
      operation, and scientific and research work, which has not been
      completed;

     

    c) Party
      B
      is subject to economic indemnification claim, economic penalty or law and
      discipline punishment, which has not been settled up.

    


    2) Rights
      of
      Party B

    


    a) Right
      of
      being legally paid for labor services rendered;

     

    b) Right
      of
      rest;

     

    c) Right
      of
      acquirement of insurance and welfarism treatment, promotion reward, labor
      security and sanitation protection, and professional technology and skill
      training. 

     

    d) Right
      of
      submission of labor disputes for settlement;

     

    e) In
      case
      that relevant authorities has confirmed that the labor security and sanitary
      conditions are so bad as to do harms to the health of staffs, and Party A dose
      not adopt any necessary measure to make improvement in this regard, Party B
      has
      the right to refuse the works arranged and offered by Party A.

     

    
      
         

      

      
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    f) In
      case
      that this labor contract is terminated in accordance with the laws, rules or
      regulations, Party B shall be entitled to be provided with a lump sum economic
      compensation and other indemnifications for medical expenses, etc.

     

    g) Other
      rights as may be described by laws, rules and regulations;

     

    h) Subject
      to any of the following circumstances, Party B may notify Party A of the
      termination of this contract: 

     

    i. Within
      the probation period;

     

    ii. Party
      A
      forces Party B to perform labor through force, threat or illegal restriction
      on
      Party B's personal freedom;

     

    iii. Party
      A
      fails to pay labor compensation or provide work conditions as set forth
      herein;

    Except
      for the provision h) of Article 2) of this Article 5, Party B shall give 30
      day’s prior notice to Party A in writing in case that Party B intends to
      terminate this contract pursuant to relevant provisions herein.

    


    6. Upon
      the
      expiry of this labor contract, the employment relationship between Party A
      and
      Party B shall terminate, and a corresponding procedure for this termination
      shall go through. The labor contract of the two parties hereto may also be
      extended as agreed by both parties, and in case that any party intends to extend
      the labor contract, it shall notify the other party in writing 30 days prior
      to
      the expiry of this contract.

    


    7. Both
      Party A and Party B shall strictly perform their respective obligations herein
      upon the execution of this contract. Any party who arbitrarily quits the job
      shall bear the responsibility and be subject to pay RMB for
      breach of contract herein. In case that any party has breached the contract
      and
      caused any economic loss to the other party, such party shall compensate the
      other party in accordance with the relevant laws and regulations of
      PRC.

    


    8. Where
      a
      labor dispute between the parties takes place during the performance of this
      Contract, the parties may apply to the labor dispute mediation committee of
      their unit for mediation; if the mediation fails, any party hereto may directly
      apply to the municipal labor dispute arbitration committee for arbitration
      within 60 days starting from the date of the occurrence of a labor dispute.
      If
      any of the two parties is not satisfied with the adjudication of arbitration,
      such party may bring the case to a people's court within 15 days of the date
      of
      receiving the ruling of arbitration.

    


    9. Any
      matter not covered herein shall be governed or executed in accordance with
      the
      laws, rules and regulations of the country. In case that there are any new
      provisions or regulations to be enacted, such new provisions or regulations
      shall prevail.

    


    10. All
      other
      matters as agreed by both parties here to for compliance and execution are
      set
      forth in appendices herein.

    


    11. This
      contract is made in duplicate and each party holds one.

     

    
      
         

      

      
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    12. This
      contract shall take effect as from the date of execution on October 6,
      2000.

    


    13. Appendix

    


    After
      the
      execution of this contract by both Party A and Party B, in case that Party
      B is
      a professional technician or kind of staffs who shall sign another
      confidentiality contract, he/she shall also sign with Party A confidentiality
      contract and security agreement, which will be deemed as the appendices of
      this
      contract and have the same legal effects.

     

    IN
      WITNESS WHEREOF, the two parties hereto have caused this Agreement to be
      executed by their respective duly authorized officers as from the date
      hereinblow.

     

     

    Party
      A:
      Taian Ruitai Cellulose Co., Ltd

     

    Authorized
      Representative: _______________________________

    Lu
      Xingfu

    


    Date:
      October 6, 2000

     

     

    Party
      B:
      Lu Xingfu

    


    Authorized
      Representative: _______________________________

     

    Date:
      October 6, 2000

     

    
      
         

      

      
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