Document:

Employment
        Agreement of Huicheng District, Huizhou City

      

      Party
        A (Employer):
        Huizhou
        NIVS Audio & Video Technology Company Limited

      Legal
        Representative:
        Li
        Tianfu

      Address:
        Nos.
        29-31 Huanshi West Road, Shuikou Town

      Form
        of Entity: Limited
        Liability Company

      Contact
        Telephone No.:
        2323888

      

      Party
        B (Employee): 

      ID
        No.: 

      Native: 

      Current
        Residence: 

      Contact
        Telephone No.:

      

      In
        accordance with Labor Law of the People’s Republic of China and relevant
        national, provincial and municipal regulations, Party A and Party B agree
        to
        enter into this Agreement: 

      

      
        	I	
                Employment
                  Term 

              

      

      

      
        	1.	
                Both
                  parties agree that the employment term is as set out in sub-clause
                  (1)
                  below:

              

      

      

      
        	
              	(1)	
                Fixed
                  term: from 1 January 2007 to 31 December 2007

              

      

      

      
        	
              	(2)	
                Permanent
                  term: from______ until Party B reaches the age for retirement as
                  required
                  under statutes or upon the termination condition under this Agreement
                  (the
                  revocation
                  conditions under the law shall not be treated as the termination
                  conditions under this Agreement) 

              

      

      

      
        	
              	(3)	
                Term
                  of completion of certain work: from_____ to the time that ________
                  is
                  completed.

              

      

      

      
        	2.	
                The
                  agreed probationary period by both parties is ____ days (The probationary
                  period shall be included in the employment term, but in any event,
                  not
                  more than 6 months. The probationary period should not be over
                  15 days if
                  the employment term is less than 6 months. The probationary period
                  should
                  not be over 30 days if the employment term is more than 6 months
                  but less
                  than 1 year. The probationary period should not be over 60 days
                  if the
                  employment term is more than 1 year but less than 2 years. All
                  days are
                  inclusive. There should not be a probationary period for any renewal
                  of
                  employment agreement.) 

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	II	
                Work

              

      

      

      
        	1.	
                Department:
                  Production Department

              

      

      

      
        	2.	
                Position:
                  Vice General Manager

              

      

      

      
        	3.	
                This
                  position and department may not (may / may not) expose
                  to an occupational disease hazard. 

              

      

      

      
        	4.	
                Sub-clause
                  (1) below is agreed by both parties:

              

      

      

      
        	
              	(1)	
                As
                  the production and work may require, Party A shall be entitled
                  to second
                  Party B (secondment can be made once only during the employment
                  term) by
                  giving a written notice to Party A, Provided That the position
                  and work
                  location of Party B shall be in same job nature, same level of
                  position
                  and same location (e.g. within the types of work and position such
                  as
                  skillful operator, technician, production management, technology
                  management, administrative management, financial management, security
                  and
                  office etc.). The secondment shall be effective within 3 days after
                  a
                  written notice is served to Party B. Party B shall obtain relevant
                  professional qualification certificate(s) or technological qualification
                  certificate(s) before commencement of his secondment as the job
                  may
                  require, except where a qualification with a certificate is inapplicable.
                  Party A shall give Party B training relating to production safety
                  and an
                  examination before Party B seconds to his new position. Party B
                  shall also
                  be given 10-working-day as adjustment period for his new position.
                  The
                  salary and welfare for the new position shall be decided according
                  to the
                  rules governing the new position (The new salary shall not be less
                  than
                  80% of the previous salary and shall not less than the statutory
                  minimum
                  salary). Party B shall not object to such secondment.
                  

              

      

      

      
        	
              	(2)	
                As
                  the production and work may require, Party A shall be entitled
                  to
                  temporarily (limited to 1 month) second Party B (salary and welfare
                  shall
                  remain unchanged) by a written notice Provided That the position
                  and work
                  location of Party B shall be in same job nature, same level of
                  position
                  and same location (with reference to sub-clause (1) above) And
                  Provided
                  Further that both parties shall mutually agree on such secondment.
                  Party A
                  shall give Party B training relating to production safety and an
                  examination before Party B seconds to his new position. A written
                  notice
                  shall be served to Party B if Party A needs to second Party B according
                  to
                  the requirement of production and work. Party B shall give a written
                  reply
                  within 5 days after the date of such notice is served, failing
                  which,
                  Party B shall be treated as accepting such secondment. If both
                  parties
                  agree on the secondment, this shall be treated as a variation to
                  this
                  Agreement. A secondment agreement shall be signed and sealed by
                  both
                  parties and shall be supplemental to this
                  Agreement.

              

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      
        	5.	
                Should
                  there be sufficient evidence that Party B is not competent in his
                  current
                  position, Party A shall be entitled re-allocate Party B at any
                  time.
                  

              

      

      

      
        	III	
                Labor
                  Protection and Labor
                  Condition

              

      

      

      
        	1.	
                The
                  working hours of Party B is agreed under the terms in
                  sub-clause                                           
                  below:

              

      

      

      
        	
              	(1)	
                Standard
                  Working Hours System (8 hours per day, 5 days per week and at least
                  1 day
                  rest per week). Overtime working shall be carried out in compliance
                  with
                  Labor Law. Should the production or procedures be affected by any
                  change
                  of local water or electricity supply, Party A may rearrange the
                  time of
                  working and rest of Party B. Average daily and weekly working hours
                  of
                  Party B shall not exceed the statutory standard working hours.
                  

              

      

      

      
        	
              	(2)	
                Unfixed
                  Working Hours System (Prior approval from the Labor Protection
                  Bureau of
                  Huicheng District is required). To guarantee the completion of
                  the work
                  assigned by Party A, work or rest in a massive mode, or rest in
                  rotation,
                  or shift rest, or flexible working hours may be arranged. Basically,
                  the
                  aforesaid will be carried out according to the standard working
                  hours (no
                  overtime hours’ salary will be paid).

              

      

      

      
        	
              	(3)	
                The
                  unit of                             
                  (“a year/half a year/quarter of a year”) is used in periodic composite
                  computation of working hours (Prior approval from the Labor Protection
                  Bureau of Huicheng District is required). Average daily and weekly
                  working
                  hours shall not exceed the statutory standard working hours. Accumulated
                  working hours which exceeds the statutory standard working hours
                  shall be
                  treated as overtime working hours, and Party A shall pay Party
                  B the
                  salary of overtime working hours according to the regulations.
                  Working on
                  shifts during statutory holidays or rest days shall be reckoned
                  as normal
                  working and no consent from Party B or trade union is required,
                  however,
                  working on shift during the statutory holidays shall be treated
                  as
                  overtime hours.

              

      

      

      
        	2.	
                Party
                  A shall, in accordance with the national and provincial labor protection
                  rules, provide a working place at a national labor safety and hygiene
                  standard, so as to protect Party B’s safety and health during production
                  or work. Should there be an occupational disease hazard during
                  the working
                  procedures of Party B, Party A shall protect Party B’s health and relevant
                  right of Party B according to the “Law of Prevention and Treatment of
                  Occupational Disease”.

              

      

      

      
        	3.	
                In
                  accordance with the national rules, Party A shall, with reference
                  to the
                  working position of Party B, dispense with necessary labor protection
                  devices. Further, according to the rules of labor protection, Party
                  A
                  shall be responsible for arranging Party B to have a medical examination
                  for every                     
                   (year/quarter/month)
                  and (denote working post exposes to harmful and poisonous materials
                  and
                  occupational disease hazards) before Party B leaves his
                  position.

              

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      
        	IV	
                Salary

              

      

      

      
        	1.	
                The
                  monthly salary of Party B is agreed as set out in
                  sub-clause (1)
                  below
                  (Salary for normal working time of Party B shall not be less than
                  the
                  interim annual minimum salary standard adopted by Huicheng District
                  and
                  Party A shall pay the monthly salary on                                         
                  day of each month): -

              

      

      

      
        	
              	(1)	
                Salary
                  calculated on basic working hours (8 hours per day; 5 days per
                  week; minus
                  10 statutory holidays a year; average 20.92 days per month). During
                  probationary period:  _________
                  RMB/month
                  (                     
                  RMB/day).
                  After completion of probationary period (or further employment
                  agreement
                  renewed): _______RMB/month
                  (_______RMB/day).
                  The overtime working salary is calculated according to the Article
                  44 of
                  “Labor Law”.

              

      

      

      
        	
              	(2)	
                Salary
                  calculated per piece of work. Party A shall, before Party B starts
                  his
                  piece of work, notify Party B in writing (with announcement), the
                  price
                  per piece. After accomplishing the designated labor quota, the
                  overtime
                  payment for pieces of work shall be paid as set out in
                  sub-clause                   below:-
                  

              

      

      

      
        	 	
                (A)

              	
                For
                  overtime working in working days with normal labor force provided
                  to
                  accomplish the labor quota:
                  -
                  Above the salary covering the finished pieces, overtime salary
                  shall be
                  paid by hourly rate based on the interim annual minimum salary
                  adopted by
                  Huicheng District (note: 20.92 days per month). Overtime is counted
                  in
                  hourly rate and hourly rate shall be 50% above the normal hourly
                  rate.

              

      

      

      For
        overtime working in rest days with normal labor force provided to accomplish
        the
        labor quota, but no compensatory leave is arranged:
        - Above
        the salary covering the finished pieces, overtime salary shall be paid by
        hourly
        rate based on the interim annual minimum salary adopted by Huicheng District
        (note: 20.92 days per month). Overtime hourly rate shall be 100% above the
        normal hourly rate.

      

      For
        overtime working in statutory holidays with normal labor force provided to
        accomplish the labor quota:
        - Above
        the salary covering the finished pieces, overtime salary shall be paid by
        hourly
        rate based on the interim annual minimum salary adopted by Huicheng District
        (note: 20.92 days per month). Overtime hourly rate shall be 200% above the
        normal hourly rate.

      

      
        	
              	(B)	
                Based
                  on 150%, 200% and 300% of the unit price per piece of work, pay
                  the salary
                  per piece of work for work produced by Party B during overtime
                  hours in
                  working days, rest
                  days and statutory holidays
                  respectively.

              

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      
        	2.	
                Party
                  A shall pay to Party B, on the basis of basic hourly salary if
                  work is
                  based on an hourly basis salary (for those mainly piece-work worker,
                  on
                  the basis of the standard minimum salary), in accordance with the
                  law, the
                  salary for annual leave, marriage leave, compassionate leave (for
                  lineal
                  relatives), home leave (for state-owned enterprises, institutional
                  units
                  and civil organizations), maternity leave (for those not included
                  in
                  maternity insurance) and accompanying
                  leave.

              

      

      

      
        	V	
                Social
                  Insurance and Welfare

              

      

      

      
        	1.	
                During
                  the employment term of this Agreement, Party A, according to the
                  law,
                  shall provide Party B with the social insurance for pension, unemployment,
                  medical treatment, work-related injury and maternity etc. Further,
                  according to the rules, the monthly insurance installment shall
                  be
                  proportionately borne by Party B and which shall be deducted from
                  its
                  salary monthly.

              

      

      

      
        	2.	
                The
                  welfare put forth by Party A to Party B includes:
                  ______.

              

      

      

      
        	VI	
                Labor
                  Force Disciplines

              

      

      

      
        	1.	
                The
                  regulations stipulated by Party A, through democratic process and
                  according to national and provincial laws and rules, should be
                  publicized
                  to Party B. Party B shall be self-alerted to observe the labor
                  laws,
                  ordinances, rules, policies, regulations stipulated by enterprise.
                  Party B
                  should observe regulations for safety operation, follow the management
                  and
                  accomplish the work timely and up to
                  standard.

              

      

      

      
        	2.	
                Party
                  A has the right to inspect, supervise and examine how Party B has
                  been
                  observing the regulations, so as to evaluate awards or
                  sanctions.

              

      

      

      
        
          
            
              
                	
                        3.

                      	
                        Part
                          B has the obligation to keep commercial secret(s) for Party
                          A, and agrees
                          as stated below (supplement agreement can also be signed
                          and sealed by
                          both parties and annexed to this Agreement)
                                                                                                                                       
                          

                      

              

            

          

        

      

      

      
        	VII	
                Variation
                  of Agreement

              

      

      

      
        	1.	
                Should
                  any party wishes to vary any part of this Agreement, a written
                  notice
                  shall be served to the other party. The party being notified shall
                  give a
                  written reply within 5 days after date of receipt of the said notice,
                  failing which, the party being notified shall be treated as accepting
                  to
                  such variation of this Agreement.

              

      

      

      
        	2.	
                If
                  both parties negotiate and agree mutually, this Agreement can be
                  varied
                  and the parties can proceed with the necessary procedures of varying
                  this
                  Agreement. 

              

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      
        	VIII	
                 Revocation,
                  Termination and Renewal of this
                  Agreement

              

      

      

      
        	1.	
                After
                  negotiation and mutual agreement between the two parties, this
                  Agreement
                  can be revoked. If this Agreement is revoked by Party A, pecuniary
                  compensation shall be paid to Party B according to relevant
                  regulation.

              

      

      

      
        	2.	
                Party
                  A can revoke this Agreement unilaterally under any one of following
                  conditions:

              

      

      

      
        	
              	(1)	
                Party
                  B’s performance is proved to be unsatisfactory during probationary
                  period.

              

      

      

      
        	
              	(2)	
                Party
                  B is in serious breach of the labor disciplines or the regulations
                  of
                  Party A.

              

      

      

      
        	
              	(3)	
                Party
                  B is grossly negligent in carrying out duties, or engaged of malpractices
                  for private interests, and causes significant loss to Party A. 

              

      

      

      
        	
              	(4)	
                Party
                  B is liable for criminal
                  responsibilities.

              

      

      

      
        	
              	(5)	
                Party
                  B is in breach of national or provincial birth control
                  laws.

              

      

      

      
        	
              	(6)	
                Party
                  A discontinues its operation, or suspends its business, or is about
                  to go
                  into liquidation and during the period of finance restructuring,
                  or is in
                  serious difficulties in running production and management of its
                  business.
                  

              

      

      

      
        	
              	(7)	
                Party
                  B encounters a disease or non-work related injuries, however, Party
                  B can
                  neither fulfill his/her original job under this Agreement nor take
                  up any
                  other new job arranged by Party A after
                  treatment.

              

      

      

      
        	
              	(8)	
                Party
                  B is incompetent in work, and after training or adjusting the post,
                  still
                  remains incompetent.

              

      

      

      
        	
              	(9)	
                This
                  Agreement is unenforceable for material change of objective circumstances
                  under this Agreement, and no mutual consensus can be reached between
                  Party
                  A and Party B after negotiation.

              

      

      

      
        	
              	(10)	
                The
                  agreed revocation condition in this Agreement is satisfied.
                  

              

      

      

      Party
        A
        can revoke this Agreement pursuant to above sub-clauses (6), (7), (8), (9)
        and/or (10), by serving a prior 30-day written notice to Party B and shall
        proceed to the procedures for revocation of this Agreement after the notice
        period. Party A shall pay pecuniary compensation to Party B in accordance
        with
        the regulations. Further, should this Agreement be terminated pursuant to
        sub-clause (7), Party A shall also pay the medical subsidy fee to Party
        B.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      
        	3.	
                Party
                  B can revoke this Agreement by serving a prior 30-day written notice
                  to
                  Party A and shall proceed to the procedures for revocation of this
                  Agreement after the notice period. With consent from Party A, procedure
                  can commence at an earlier date. Notwithstanding the foregoing,
                  Party B
                  can revoke this Agreement unilaterally by serving a written notice
                  at any
                  time under any one of following
                  conditions:

              

      

      

      
        	
              	(1)	
                Within
                  the probationary period.

              

      

      

      
        	
              	(2)	
                Party
                  A forces Party B to work through violence, threat or deprival of
                  personal
                  freedom.

              

      

      

      
        	
              	(3)	
                Party
                  A fails pay remuneration to Party B in accordance with this Agreement
                  or
                  there is a deduction and delay in paying the salary without any
                  justification.

              

      

      

      
        	
              	(4)	
                As
                  confirmed by relevant national department, the labor safety and
                  hygiene
                  conditions provided by Party A are seriously damaging the body
                  and health
                  of Party B.

              

      

      

      Whereas
        the pecuniary loss caused to Party A by Party B has not been settled or certain
        legal problem is still under investigation, the revocation procedure of this
        Agreement will be withheld until settlement or completion of investigation
        Provided That which shall not be applicable to revocation pursuant to
        sub-clauses (2), (3) and (4).

      

      
        	4.	
                In
                  any one of the following circumstances, Party A cannot revoke this
                  Agreement pursuant to sub-clauses (6), (7), (8), (9) and/or (10)
                  of Clause
                  VIII, paragraph 2:-

              

      

      

      
        	
              	(1)	
                Party
                  B suffers from illness or non-work related injury and is under
                  prescribed
                  treatment. 

              

      

      

      
        	
              	(2)	
                Party
                  B suffers from occupational disease or work-related injury and
                  is
                  confirmed by Labor Ability Examination Committee as totally or
                  partially
                  lost his labor function.

              

      

      

      
        	
              	(3)	
                A
                  female employee who is in the stage of pregnancy, delivery or nursing
                  by
                  breast feeding.

              

      

      

      
        	
              	(4)	
                Other
                  conditions stipulated by laws and
                  regulations.

              

      

      

      
        	5.	
                In
                  any one of the following circumstances, Party B cannot revoke this
                  Agreement. Otherwise, Party B shall pay pecuniary compensation
                  to the
                  economic loss caused to Party
                  A:-

              

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
        	
              	(1)	
                Training
                  is provided at the expense of Party A (monetary payment receipt
                  to be
                  produced as proof) and the agreed service period for Party A has
                  not been
                  completed after the training.

              

      

      

      
        	
              	(2)	
                Party
                  B is a key technician who is undertaking an unfinished important
                  project
                  of construction, reconstruction or scientific research.
                  

              

      

      

      
        	6.	
                Whoever
                  the party revokes this Agreement for any reason, Party A should
                  issue and
                  deliver a “certificate for termination of employment agreement” to Party B
                  on the day or the next day of the revocation of this Agreement.
                  This
                  Agreement shall not be treated as revoked if Party A fails to issue
                  and
                  deliver such certificate. If Party B could not be located, Party
                  A should
                  make a timely public announce of such
                  revocation.

              

      

      

      
        	7.	
                This
                  Agreement shall be terminated immediately upon expiry date of this
                  Agreement, or when Party B reaches the statutory age for retirement,
                  or
                  upon the termination condition mutually agreed by both Party A
                  and Party
                  B.

              

      

      

      
        	8.	
                If
                  Party A or Party B does not wish to renew this Agreement, such
                  party shall
                  serve a prior 30-day written notice to the other party, notifying
                  such
                  intention. Party A shall on the date or the next day of the termination
                  date of this Agreement, issue and deliver to Party B, a “certificate of
                  termination of employment agreement” and after the termination date of
                  this Agreement discontinue assigning work to Party B. In case Party
                  A
                  requests Party B to end working immediately upon the notice is
                  served on
                  Party B, Party A can issue a “certificate of termination of employment
                  agreement” together with such notice and this Agreement shall be
                  terminated immediately. In such circumstance, Party A should pay
                  Party B
                  1-month salary as payment in lieu (an average monthly salary in
                  the last
                  12 months before Party B leaves Party A). In case where Party B
                  is
                  entitled to any year-end bonus, Party A should also the year-end
                  bonus to
                  Party B additionally.

              

      

      

      
        	9.	
                Upon
                  expiry of this Agreement but Party A fails to process the termination
                  procedure due to his own accord, and no renewal agreement has been
                  entered
                  in time but there is an existing labor relation de
                  facto,
                  this Agreement shall be deemed as renewed and Party A is obliged
                  to renew
                  this Agreement with Party B. If both parties cannot agree on the
                  duration
                  of the renewed agreement after negotiation, the employment period
                  of the
                  renewed agreement shall be not less than 1 year after the expiry
                  date of
                  this Agreement. If Party B has been working for Party A continuously
                  over
                  10 years (calculated up to the expiry date of this Agreement),
                  Party A is
                  obliged to enter into a permanent employment agreement with Party
                  B at
                  Party B’s request. The foresaid de
                  facto
                  employment relationship can be terminated upon mutual agreement
                  and
                  pecuniary compensation shall be paid to Party B. Whereas Party
                  B requests
                  for a termination of the de
                  facto
                  employment relationship, the employment relationship shall be terminated
                  immediately and Party A does not have to pay any pecuniary compensation
                  to
                  Party B. 

              

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      
        	10.	
                If
                  neither of the party serves a prior 30-day written notice before
                  the
                  expiry date to the other party showing its intention of not renewing
                  this
                  Agreement, it shall be deemed that both Party A and Party B agree
                  to the
                  renewal of this Agreement. Both parties should proceed to complete
                  the
                  renewal procedures before the expiry of this Agreement. Any party
                  who
                  refused to enter into a renewal agreement will be treated as a
                  breach to
                  this Agreement. The defaulting party shall pay to the other party
                  1-month
                  salary as defaulting payment (an average monthly salary in the
                  last 12
                  months before Party B leaves Party A). If Party B has been working
                  for
                  Party A continuously over 10 years (calculated up to the expiry
                  date of
                  this Agreement), Party A is obliged to enter into a permanent employment
                  agreement with Party B at Party B’s request.

              

      

      

      
        	11.	
                When
                  this Agreement is revoked or both parties do no renew this Agreement
                  and
                  this Agreement terminates, Party A and Party B should proceed to
                  accomplish the procedure for revocation or termination within 7
                  days after
                  this Agreement is revoked or
                  terminated.

              

      

      

      
        	IX	
                Breach
                  of Agreement and
                  Liabilities

              

      

      

      Clause
        1
        below is
        agreed by both parties (can choose more than one clause):

      

      
        	1.	
                Where
                  it is required to serve a 30-day prior notice to revoke this Agreement,
                  if
                  the party who has the obligation to serve the notice wishes to
                  revoke this
                  Agreement immediately or to be treated as immediate resignation,
                  the party
                  can make a payment of 1-month salary (an average monthly salary
                  in the
                  last 12 months before Party B leaves Party A) in lieu of the notice
                  to
                  revoke this Agreement.

              

      

      

      
        	2.	
                Where
                  Party B revokes this Agreement (including resignation of Party
                  B or
                  consecutive absence for 3 days or accumulative absence for 5 days,
                  except
                  a mutual agreement is reached between Party A and Party B for an
                  earlier
                  termination), Party B shall pay Party A a default payment at the
                  amount of
                  1-month salary (an average monthly salary in the last 12 months
                  before
                  Party B leaves Party A).

              

      

      

      
        	3.	
                Should
                  Party B, owing to a breach of laws, or serious breach of the regulations
                  stipulated by Party A, or gross negligence, causes Party A a direct
                  pecuniary loss, all such loss shall be borne by Party
                  B.

              

      

      

      
        	4.	
                Where
                  Party B revokes this Agreement, and Party B has received training
                  in
                  different technologies and business, then Party B should, according
                  to the
                  laws and the agreed terms, reimburse Party A such training fees
                  (monetary
                  payment receipt to be produced as proof).

              

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      
        	X	
                Mediation
                  and Arbitration

              

      

      

      Any
        dispute arises in connection with the enforcement this Agreement may be settled
        by consultation and negotiation in the first place. If negotiation shall
        be
        rejected, or should there be an unsuccessful negotiation, then the dispute
        may
        be referred to the local “labor dispute mediation committee” of Party A for
        mediation. If no settlement could be reached from the mediation, the dispute
        may
        be referred to Labor Dispute Arbitration Committee of Huicheng District,
        Huizhou
        City for arbitration within 60 days from the date of the dispute (time for
        mediation is excluded). The dispute may also be directly referred to Labor
        Dispute Arbitration Committee of Huicheng District, Huizhou City for arbitration
        without any consultation and/or mediation.

      

      
        	XI	
                Miscellaneous

              

      

      

      
        	1.	
                Party
                  A elects sub-clause     
                  below:

              

      

       

      
        	 	
                (1)

              	
                The
                  regulations of Party A shall be approved by an employee representatives
                  meeting (those with a trade union) or by employees’ general meeting
                  (resolution passed by 2/3 of employees of Party A through anonymous
                  voting
                  and original record should be duly kept) and shall become effective
                  upon
                  promulgation.

              

      

      

      
        	 	
                (2)

              	
                The
                  regulations of Party A shall be approved by respective groups of
                  employees
                  after discussion (agreed by 2/3 of employees of respective groups
                  through
                  anonymous voting and original record should be duly kept), where
                  voting
                  should be supervised and confirmed by the group leader appointed
                  by Party
                  A, and shall become effective upon
                  promulgation.

              

      

      

      
        	2.	
                Party
                  B elects sub-clause  (1) 
                  below:

              

      

      

      
        	
              	(1)	
                Party
                  B has earnestly studied and read the following regulations from
                  Party
                  A                                                                                                                                                
                   and
                  clearly understands the content of the regulations and undertakes
                  to
                  observe and to be bound by such
                  regulations.

              

      

      

      
        	
              	(2)	
                Party
                  B has not studied or read the regulations of Party A and is unclear
                  about
                  its contents.

              

      

      

      
        	3.	
                Both
                  parties agree (contents shall not be against the laws and regulations,
                  and
                  additional pages duly signed and sealed may be added):
                  _____________________________________________________________________

              

      

      

      
        	4.	
                Other
                  issues, which are not included in this Agreement, shall be decided
                  according to relevant national and local laws, regulations and
                  policies.
                  Should there be any inconsistency between any part of this Agreement
                  and
                  any new national and provincial rules for labor administration,
                  the new
                  rules shall prevail.

              

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
        	5.	
                This
                  Agreement shall be signed in two counterparts and each party shall
                  hold
                  one original. Each counterpart shall have equal legal authenticity.
                  This
                  Agreement shall become effective after both parties’ execution and shall
                  be witnessed by Labor Agreement Management Authority of Huicheng
                  District.
                  Any unauthorized alteration or fraudulent signatory shall not be
                  effective. 

              

      

      

      
        	
                Party
                  A (Seal):

              	 	
                Party
                  B (Signature):

              
	 	 	 
	
                Legal
                  Representative (or Authorized Person): 

              	 	 
	 	 	 
	
                [Date]

              	 	
                [Date]
                  __ January 2007

              
	 	 	 
	
                Witness
                  Institution (Seal):

              	 	
                Witness
                  Person:

              
	 	 	 
	 	 	
                [Date]
                  __ January 2007

              

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      [INFORMATION
        FOR PURPOSES OF FILING WITH THE SECURITIES AND

      EXCHANGE
        COMMISSION]

      SCHEDULE
        A 

      EXECUTIVE
        OFFICERS TO ENTER INTO THE AGREEMENT

      
         

        
          	 	
                  ·

                	
                  Ailing
                    Liu, Production Manager, is paid a probationary monthly salary
                    of RMB
                    8,200 and a monthly salary of RMB 8,800, which is approximately
                    US$1,200
                    and US$1,300, respectively.

                

        

        
          	 	
                  ·

                	
                  Gengqiang
                    Yang, Chief Operating Officer, is paid a monthly salary of RMB
                    13,000,
                    which is approximately US$1,900.

                

        

        
          	 	
                  ·

                	
                  Ling
                    Yi, Chief Financial Officer and Corporate Secretary, is paid
                    a
                    probationary monthly salary of RMB 7,500 and a monthly salary
                    of RMB
                    8,000, which is approximately US$1,100 and US$1,200,
                    respectively.

                

        

        
          	 	
                  ·

                	
                  Dongquan
                    Zhang, Chief Technology Officer, is paid a probationary monthly
                    salary of
                    RMB 10,000 and a monthly salary of RMB 12,000, which is approximately
                    US$1,500 and US$1,800,
                    respectively.

                

        

        
          	 	
                  ·

                	
                  Lichun
                    Zhang, Marketing Manager, is paid a monthly salary of RMB 15,000,
                    which is
                    approximately US$2,200.

                

        

        
 

      

      
        
          
          

        

        
          12Contract

    No.:
      (2003) Hao He Zi No.1

    

    The
      three
      parties in this contract are:

    Party
      A:
      Haoran Industrial Company, Huicheng District, Huizhou City

    Legal
      Representative: Zhong Guanbin    Title: Chairman of the board

    Address:
      Xinjian Road No. 52, Huizhou City

     

    Party
      B:
      HuiZhou NIVS AUDIO & VIDEO TECH CO.,LTD

    Legal
      Representative: Li
      Tianfu              
Title: General Manager

    Address:
      NIVS Hi-tech Park, Wushi Industrial area, Huizhou City

     

    Party
      C:
      Shuikou County Real Estate Development Corporation

    Legal
      Representative: Xu
      Zhaofa            Title:
      General Manager

    Address:
      Shuikou County, Huizhou City

     

    In
      accordance with the stipulations in the relevant national laws and regulations,
      on the principles of equality, voluntary willingness, compensation as well
      as
      honest and credit, the three parties concluded this contract through
      negotiations.

     

    Article
      1. Party A transfers the use right of the land that is located in Wei Village,
      Lianhe Ridge, Shuikou County (the part near to the fourth ring) with an area
      of
      184,810 square meters to Party B.

     

    The
      ownership of the land has been identified by Municipal Land and Resources Bureau
      and the certificate has been issued. The original “State-Owned Land Use
      Certificate” No. is Hui Fu Guo Yong (2003) No. 1321161017. The land No. is
      16-02-3255. The land’s map No. is F-50-25-148. Regarding to its detailed
      location and the coordination of the boundary points, please refer to the map
      in
      the appendix. The transfer term for this land is 40 years. The term will expire
      on July 18th,
      2042.
      The land use nature is for industrial use. Upon the completion of the transfer,
      two state-owned land use certificates will be transferred to the name of Party
      B, with the areas of 124,810 square meters and 60,000 square meters
      respectively.

     

    The
      use
      right of the building, auxiliaries as well as the land use right within the
      mentioned land scope are transferred to Party B together. Party B has no any
      objection on the current status of the land. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Upon
      the
      signature of this contract as well as Party B’s payment of the deposit, it will
      indicate that Party A has handed over the land to Party B. No other land
      transfer procedure shall be gone through separately. The state-owned land use
      certificate shall be handed over to Party B on the same day as the guarantee
      procedures are done in accordance with the stipulations in Article 6
      hereof.

     

    Article
      2. The concluded price for the land use transfer is eighteen million, seven
      hundred and ninety-nine thousand, nine hundred and eight-two RMB (amount in
      figures: 18,799,982 RMB). The unit price is 101.726 RMB/square
      meter.

     

    Article
      3. Payment terms. Through the mutual negotiations between Party A and Party
      B,
      they agree that the concluded price will be paid by the following
      installments.

     

    (1) On
      the
      date of concluding this contract, Party B will pay Party A 4,000,000
      RMB whole as the deposit.

     

    (2) The
      remaining part will be paid by installments. The way of payment by
      installment is: the payment will be started as of February 2004 (the month
      of
      February included) until all the transfer price is paid off. At least 1 million
      RMB (amount in figures: 1,000,000 RMB) shall be paid each month. The payment
      date shall be prior to the 15th
      day of
      each month.

     

    In
      case
      that Party B does not pay the transfer fee as stipulated here, Party B shall
      be
      liable for the breach penalty equivalent to 0.021% of the amount of overdue
      payment per overdue day. In case that Party B’s overdue payment accumulatively
      reaches or goes beyond 1,500,000 RMB, the total transfer fee will be due. Party
      A is entitled to demand for all the unpaid transfer fee, to withdraw the land
      use right as well as to ask Party B to undertake liabilities for all the
      economic losses.

     

    Article
      4. Party A is liable for all the taxes related to the transfer of land use
      right
      whatever the amount is. After the land use right has been transferred to the
      name of Party B, Party B shall be liable for the necessary taxes related to
      the
      retransfer, which has nothing to do with Party A.

     

    Article
      5. Upon Party A’s receipt of the deposit, Party A and Party B shall, with all
      the relevant materials, go through transfer registration procedures for the
      land
      use right in Land and Resource Bureau. Party A shall transfer the “Stated-Owned
      Land Use Certificate” to the name of Party B within 30 days as of the receipt of
      deposit.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Article
        6. Warranty

       

    

    (1) Before
      Party B pays off the land transfer fee, use right of the land with
      an
      area of 60,000 square meters in this transfer will be used as a mortgage. After
      going through the transfer procedures of State-Owned Land Use Certificate,
      Party
      A and Party B will conclude “Mortgage and Security Agreement”
separately.

     

    (2) Before
      paying off the entire land transfer fee, Party B agrees to use
      all
      the production equipments as the mortgage. Without Party A’s consent, Party B
      shall not move, sell, lease or mortgage its production equipment to the others.
      Provided that, within the mortgage term, Party B moves
      the
      assets, Party A is entitled to take necessary measures to stop it.

     

    (3) Before
      paying off the entire transfer fee, Party B promises that it will
      not
      change the shareholding structure and the legal representative.

     

    (4) Before
      paying off the entire transfer fee, Party B promises that it will
      not
      transfer the transferred land use right and the auxiliaries on the land
      externally.

     

    (5) Party
      B
      guarantees that it will begin to level the transfer land before
      February 28th,
      2004
      and complete the construction report and start construction before March
      30th,
      2004,
      otherwise, it will be regarded as Party B’s breach of the contract. Party A is
      entitled to terminate the contract and to withdraw the land use
      right.

     

    Article
      7. In case that Party A withholds the fact that such conditions as the ownership
      disputes, co-ownership, lease, mortgage, sealed-up or non-compliance with the
      transfer conditions exists in the land, Party A shall be undertaken the caused
      economic and legal liabilities for Party B. While going through the transfer
      procedures, Party A shall comply with the area stipulated in the contract,
      the
      land nature, the use terms and so on to proceed the title transfer registration
      formalities, and shall not make amendments, otherwise it will be regarded as
      a
      violation of the contract.

     

    Article
      8. Party B shall be responsible for leveling the transferred land and taking
      care of the facilities within the scope of the transferred land.

     

    Article
      9. Party C provides assistance in going through the transfer procedures of
      this
      contract, which guarantees that there is no dispute on the
      ownership.

     

    Article
      10. Party C guarantee that such infrastructures as water, electricity and
      communications will be connected until the border of the land before September
      15th,
      2004.
      Besides, the normal use and application of this mentioned infrastructures should
      be assured. Before March 15th,
      2004,
      it shall be assured that the roadbed will be established till the border of
      this
      land. Party A has a monitoring obligation towards this.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Article
      11. Party A agrees to pay 300,000 RMB to Party C as the administration fee.
      Party C has a duty of supervising the parties to strictly fulfill the
      stipulations herein within the contract’s validity term. In case that any
      dispute rise
      during the fulfillment hereof, Party C shall coordinate and find a
      solution.

     

    Article
      12. As for any other matters that are not stipulated in this contract, Party
      A
      and Party B may conclude agreements as the appendix to this contract that has
      the equal legal force as this contract has.

     

    Article
      13. The transferred area of the land in this contract that belongs to the
      original land division is not in keeping with the red line drawing. Therefore,
      before signing this contract, Party A, Party B and Party C shall mark a new
      red
      line drawing on the original red line drawing and seal it for confirmation.
      The
      new red line drawing shall be consistent with the new State-Owned Land
      Certificate as well as the map of the land. Besides, this new drawing shall
      be
      used as the first appendix to this contract.

     

    Article
      14. The conclusion, validity, interpretation, fulfillment and disputes of this
      contract are all governed by the laws of the People’s Republic of
      China.

     

    Article
      15. In case that any dispute rises due to the execution of this contract, the
      two disputing Parties or the three Parties try to settle them through
      negotiations. Provided that no agreement is reached, a lawsuit may be filed
      to
      the People’s Court in accordance with the law.

     

    Article
      16. This contract has four original copies. Party A, Party B, Party C and
      Shuikou County People’s Government holds one respectively.

     

    Article
      17. Upon the signature and the official seals of the three Parties’ legal
      representatives (or authorized agents), this contract enters into
      force.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Party
      A:
      Haoran Industrial Company, Huicheng District, Huizhou City (Seal)

    Legal
      Representative (signature and seal): /s/ Zhong Guanbin (Seal) 

     

    Date:
      November 24th,
      2003

     

    Party
      B:
      Huizhou NIVS AUDIO & VIDEO TECH CO., LTD (Seal)

    Legal
      Representative (signature and seal): /s/ Li Tianfu (Seal) 

     

    Date:
      November 24th,
      2003

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