KNOW-HOW TRANSFER AND TECHNICAL ASSISTANCE

AGREEMENT

between

and

Table of Content

1. 2. 3. 4. 5. .......................................................... 3 ....................................................................... 3 ................................................................................................................ 4 6. ................................................................................................................ 5 8. .................................................................................................................... 5 9. 10. 11. 12. ................................................................................................ 6 13. .................................................................................................................. 6 14. 15.

THIS KNOW-HOW TRANSFER AND TECHNICAL ASSISTANCE AGREEMENT (the "Agreement") is made on this [__] day of [__], 2006

BETWEEN

(1) , a company established and existing under the laws of Italy whose

legal address is at Via Lago di Albano, 82, 36015 Schio (VI), Italy ("Party A"); and

(2) Co., Ltd., a sino-foreign equity joint venture duly incorporated and

existing under the laws of the People's Republic of China and having its legal address at No. 208 Lang Ya Tai Road, Jiaonan, Qingdao, Shandong Province,, People's Republic of China ("Party B")

(collectively, the "Parties", individually, a "Party").

1.

1.1 Preliminary Statements

Party A and Co., Ltd. (“ ”) have entered into a joint venture contract (the "JV Contract") concerning the establishment of Party B. As one of the principal provisions of the JV Contract, Party A and Over-World agreed that Party A would transfer, as capital contribution, to Party B certain know-how and provide technical assistance as set forth hereunder.

Therefore, Party A and Party B have agreed to enter into this Agreement.

1.2 Definitions

The following terms as used in this Agreement shall have the meanings set forth below:

(a) “Drawings” means the documents containing the design and all the technical

specifications of the Products to be produced by Party B and which must

enable Party B to entirely produce such Products. A sample of the Drawings is

attached to this Agreement as Schedule 1.

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(b) "Improvement" means any and all improvements, modifications or

adaptations to any part of the Know-How which might reasonably be of

interest to Party B or Party A.

"Know-How" means all know-how, technical information, experience and

data relating to the production and manufacturing of the Products which are

owned or under the control of Party A and which Party A is able to make

available to Party B.

"Products" means each machinery listed under Schedule 2, as well as each of

its parts and components, which Party B will be producing and selling based

on the Drawings and Know How provided by Party A.

"PRC" means the People's Republic of China.

“Technical Assistance” means all the training activities and other services

provided by Party A to Party B for the performance of the production activities

in respect of the Products. (c) (d) (f) (g)

1.3

Headings

The headings in this Agreement are for ease of reference only and shall not affect the interpretation of the provisions of this Agreement.

2.

2.1

Know How transfer

Within ninety (90) days after the establishment of Party B, Party A will transfer to Party B, and Party B shall accept, the Know-How in direct connection with the production of the Products in accordance with the terms and provisions contained in this Agreement. Party B shall not license the use of the Know-How to third parties ("Licensees") unless otherwise agreed between Party A and Party B.

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3.

3.1

Know-How Use

Party B hereby agrees that it shall not use the Know-How except in connection with the production of the Products and in accordance with terms and conditions set forth in this Agreement, and the JV Contract.

3.2

Drawings

(1) The Drawings shall be delivered both in electronic format and hardcopy (one

copy of each document), and Party B shall take all reasonable precautions to

safeguard such documents and all copies thereof.

The Drawings shall be in English language.

4.

4.1

(2) Supply of the Know-How

Within twenty (20) days after the establishment of Party B, Party A shall start supplying Party B with the electronic format and the hardcopy of the Drawings to ensure that Party B can utilise the Know-How and manufacture the Products of a quality standard substantially similar to the quality of Party A’s products. The supply of the Know-how shall be completed within ninety (90) days after the establishment of Party B. (The timing of the training to be provided in PRC may be decided in accordance with the actual production status of Party B.)

4. 2 Supply of Technical Assistance

(1) Party A shall also provide in the PRC Party B with the services of suitable

technicians for totally no less than sixty (60) working days and up to a

maximum of eighty (80) working days (each technician’s daily

assistance/training will be accounted as one working day) when required by

Party B (such as when the first production is made), to provide instructions

and training to the employees of Party B involved in the production operations.

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Party A shall bear all local transportation, hotel and living expenses in the

PRC of each Party A’s technician who will be providing the Technical

Assistance. The Technical Assistance shall be provided in English and Party B

shall procure at its own expenses adequate interpreters.

(2) Party A shall also provide in Italy training to no more than three (3) Party B’s

technicians for totally no less than thirty (30) working days and up to a

maximum of forty (40) working days (the working days will be accounted

regardless the actual number of trainers and Party B’s technicians) in the first

ninety (90) days after the establishment of Party B. Party A shall bear all local

transportation, hotel and living expenses in Italy for each Party B’s technician

receiving the Technical Assistance. The Technical Assistance shall be

provided in Italian, and Party A shall procure at its own expenses adequate

interpreters.

When technical problems occur to Party B during the term of the Agreement,

Party A shall provide, free of charge, the relevant technical consultation and

assistance, so as to ensure Party B can produce qualified Products. (3)

5.

Party A and Party B hereby confirm that the value of the Know How and Technical Assistance shall be United States dollars three hundred fifty thousand (US$350,000) of which:

(a) United States dollars two hundred fifty thousand (US$250,000) shall be the consideration for the Drawings; and

(b) United States dollars one hundred thousand (US$100,000) shall be the consideration for the Technical Assistance provided both in the PRC and in Italy; 6. Neither Party B nor Over-World shall pay the consideration for the Know How and the Technical Assistance. As provided in the JV Contract, the Know How and Technical Assistance shall be contributed by Party A as registered capital of Party B.

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Notwithstanding anything to the contrary in this Agreement, Party A shall be responsible for the accuracy and completeness of the Know How and for enabling Party B to manufacture the qualified Products, which are technically competitive. Moreover, Party A agrees to indemnify Party B and defend and hold it harmless from and against any and all causes of action, suits and claims asserted or entered against Party B in relation to the use of the Know How.

8. If any Party makes or acquires any Improvement during the term of this Agreement, such Improvement shall be fully communicated and explained to the other Party in confidence, under the condition that a new agreement is entered into, and the relevant consideration is agreed upon.

9. Each Party shall promptly inform the other Party of any infringement or threatened infringement of the Know-How. Should Party B take action to prevent such infringement, Party A shall, at Party B’s request and expense, render all assistance within its power in connection therewith.

10. Party A warrants that it is the legal owner of the Know How, industrial property and technical documents on the manufacturing of the Products and is not necessary for such transfer to be approved by the government of the country where Party A is registered. Party A warrants also that the Know How transferred to Party B is being used in its own factory and is reliable, advanced, up to date and complete.

11. Party A and Party B shall, during the period of this Agreement, maintain in strict confidence all of the Know-How which is not and has not become public general knowledge and will not disclose any of the same except to Party B’s trusted employees, agents and permitted sub-contractors and permitted licensees, and any disclosure shall be made subject to an express obligation of confidentiality. Party A and Party B shall also procure that such employees, agents and sub-contractors and licensees shall maintain the same in strict confidence and shall not use the same for any purpose except the performance of their duties to Party B or under the licenses.

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Party B shall, if requested by Party A, but at its own expense, take all appropriate steps to enforce any duty of confidence owed to it by any employee, agent or sub-contractor (or ex-employee, ex-agent or ex sub-contractor) or any licensee or ex-licensee in so far as such enforcement appears to Party A to be necessary for the protection of the confidentiality of the Know-How.

12.

12.1 Effectiveness

This Agreement shall become effective upon execution by the duly authorised representatives of both Parties and shall remain in effect as long as the JV Contract is effective, unless terminated early pursuant to the provisions of this Agreement.

12.2 Termination

This Agreement shall be terminated:

(a) upon a Party giving the other Party not less than sixty (60) days notice of

termination in writing in the event of a material breach of this Agreement by

the other Party;

(b) by mutual agreement of the Parties; or

(c) automatically upon the expiration or early termination for whatever reasons of

the Joint Venture Contract.

13. The conclusion, effectiveness, interpretation and performance of, and the resolution of disputes under, this Agreement shall be governed by PRC law. Where there is no applicable provision in PRC law governing a particular matter relating to this Agreement, reference shall be made to applicable international commercial practice.

14.

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14.1 All disputes, controversies or claims between the Parties that arise from this

Agreement or are related to this Agreement (collectively “Dispute”) shall, first of all, be resolved through friendly consultations. If within thirty (30) days after a Party has notified in writing the other Party of the existence of such Dispute, such Dispute is still unable to be resolved through friendly consultations, any Party at any time may submit the Dispute to the China International Economic and Trade Arbitration Commission (“CIETAC”) for arbitration by an arbitration tribunal of three (3) arbitrators (“Arbitration Tribunal”) in accordance with the CIETAC Arbitration Rules in force on the date hereof and shall notify the other Party of such submission in writing. If any Party fails to appoint an arbitrator, such arbitrator shall be appointed by CIETAC. The arbitration proceedings shall be held in Shanghai.

14.2 Any arbitral award made by the Arbitration Tribunal shall be final and binding on the

Parties.

14.3 Except where the Arbitration Tribunal stipulates otherwise, the arbitration costs shall

be borne by the losing Party.

15.

15.1 Notice

All notices and other communications between the Parties with respect to this Agreement and all notices and other communications between the Parties shall be written in English and Chinese unless otherwise agreed between the Parties, and shall be personally delivered, or sent by facsimile or post (postage prepaid, and if it can be sent by air, shall be sent by airmail) to the address or facsimile number set forth below (or any other address or facsimile number that a Party notified the other Party from time to time in accordance with this Article):

For C.M.T. S.r.l.:

Legal address : Via Lago di Albano, 82 Schio (VI), Italy

Facsimile number: +39 0445 577364

For C.M.T. Over-World Machinery (Qingdao) Co., Ltd.:

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Legal address:

Facsimile number: No. 208 Lang Ya Tai Road, Jiaonan, Qingdao, Shandong Province, PRC +86 [__]

If personally delivered (including delivery by a professional courier services company), it shall be deemed effectively delivered on the date it is actually delivered to the other Party. If sent by facsimile, it shall be deemed effectively delivered on the first business day (i.e. a day on which commercial banks generally open for business, excluding Saturday) at the locality of the receiving Party after the date of transmission, so long as the transmission report indicates that the message was completely transmitted to the receiving Party's facsimile number and there is no indication on the transmission report that the message received is illegible. If sent by post, it shall be deemed effectively delivered on the tenth (10th) day after the date of posting (using the postmark as the basis).

15.2 Language

This Agreement is written in the Chinese and English languages. The two language texts have been examined and verified by the Parties to be identical in all material respects. Both language texts shall have equal legal validity.

15.3 Amendments

Any amendment or supplement to this Agreement after its signature shall be made by way of an amending or supplemental agreement signed by the Parties.

15.4 Waiver

Unless otherwise provided for, failure or delay on the part of either Party hereto to exercise any right, power or privilege under this Agreement shall not operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude exercise of any other right, power or privilege.

15.5 Attachments

The attachments to this Agreement constitute a part of this Agreement and have the equal legal force and effect.

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15.6 Signature

This Agreement shall be signed in three (3) originals of each of the Chinese and English language texts. The Parties shall each retain one (1) set of the Chinese and English originals. One (1) set of the Chinese and English originals shall be submitted, if required, to the relevant PRC registration authority for verification and record.

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This Agreement is signed by the duly authorised representative of the Parties on the date first set forth above.

__________________________ _______________________________

Name:

Position: President Name: Position: President

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SCHEDULE 1 (sample of drawing)

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SCHEDULE 2

A.

The Know How shall refer to the following products:

(ii) (i)

B. Technical information and data

General information on the processes and results obtainable with the above equipment and/or machines

Training for the Chinese commercial technicians of Party B

Complete mechanical designs in English for every basic version of the equipment and/or machines mentioned above (Party B will be responsible for the any

modifications requested by the market from time to time. Party A shall provide reference parameters in this respect)

Complete design revision statements in English and commercial mechanical components as they are available in Italy

Complete electrical diagrams in English referring to the above equipment and/or machines

Complete design revision statements in English for the commercial, electrical and electronic components as they are available in Italy

Copies of the “Use and Maintenance” handbook in English for the above equipment and/or machines

Reference Safety Norms according to EU standards

Production criteria according to the standards set by Party A

Technical assistance to Party B in the start up production in order to guarantee the quality standards adopted by Party A in Italy

Training of the Party B’s technicians for the installation of the above equipment and / or machines

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