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Outgoing letter

Beijing, August 11,1998

VANCOUVER TRADING CO., LTD.

Vancouver, Canada

Dear Sirs,

Thank you for your order of August 10 for 1,000 dozen COTTON BATH TOWELS. We are now making you the following offer, subject to your confirmation reaching us not later than August 20: 1,000 dozen of Art. No. G3030 COTTON BATH TOWELS (details as per your telex of August 10) at CAN $ 24 per dozen CFRC2 Vancouver for shipment from any Chinese mainland port in October. Please note that, there is no direct steamer available for Vancouver in October, we find it only possible to ship the goods with transhipment at Hongkong. The goods are to be packed in cartons each containing 5/10 dozen at buyers' option.

We look forward to your early acceptance.

Yours faithfully,

LI DU TEXTILE IMP/EXP CORP.

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Incoming Telex

August 15,1998

TK U FR UR LTR AUG 11. UR OFR 1,000 DZ COTTON BATH TOWELS ACEPTD. V R NOW ARRANGING WITH OUR BK FR RELEVANT LC. AS TO PACKG, V PREFER CTNS CONTAINING 5 DZ. PLS SEND CONTRACT ASAP. RGDS.

CONTRACT

NO.98 - 110

SELLERS:

BUYERS:

This Contract is made by and between the Buyers and the Sellers, whereby the Buyers agree to buy and the Sellers agree to sell the under - mentioned commodity according to the terms and conditions stipulated below:

Commodity:

Specifications:

Quantity:

Unit Price:

Packing:

Shipping Mark:

Insurance:

Time of Shipment:

Port of Shipment:

Port of Destination:

Terms of Payment:

Done and signed in Beijing on this 20th day of August 1998.