Disposal Agreement of Defect Material and Defect Products
为保证甲方库存呆坏料得以及时处理，加快甲方资金周转，双方本着公平合理、对等互利的原则，达成如下坏料处理协议。
To ensure a timely disposal of spoiled material in stock of Party A and speed up
turnover of funds of Party A, following the principle of fairness, equity and mutual
benefit, Party A and Party B hereof enter this agreement:
1、 批量不良品的处理Disposal of defect product in batch
批量不良品是指乙方所送货物经甲方品质部门检验整批不合格，无法办理入库的批量性坏品，或甲方已办理入库，但经甲方使用、实验评估确实存在品质隐患的产品。批量不良品甲方全部退回给乙方，若甲方已办理入库，则所退物料的货款在乙方未付货款中扣除。
Defect products in batch means the whole batch of products delivered by Party B
that fail to pass the inspection conducted by quality department of Party A, defect products in batch that fail to be released for warehouse, or the products warehoused
by Party A proving to be troubled with hidden quality risk when used or tested by
Party A. Party A shall return all the defect products in batch to Party B. If the
products have been warehoused by Party A, the payment for the returned materials
shall be deducted from the unpaid balance of Party B.
2、“来料坏”不良品的处理： Disposal of “bad incoming material”:
“来料坏”是指经甲方检验合格入库后，在甲方生产过程中经甲乙双方确认是乙方来料不良的坏品。“来料坏”不良品甲方全部退还乙方。所退物料的货款在乙方未付货款中扣除，退货单价取最近一次供货月份当月收货最高单价。退货产生的运费及其他一切费用由乙方全额承担。
“Bad incoming material” indicates the defect incoming material from Party B which
is confirmed by Party A and Party B hereof during production of Party A after passing
inspection of Party A to release for warehouse. Party A shall return all “Bad
incoming material” to Party B. The payment for the returned materials shall be
deducted from the unpaid balance. Unit price of the returned material shall be
subject to the highest unit price of the product provided in the month. The freight
charges and all other expenses for returning the materials shall be undertaken by
Party B.
3、“生产坏”不良品的处理 Disposal of product “spoiled in production” “生产坏”是指甲方在生产加工中因生产工艺不成熟或操作不当等原因造成的坏品。对于“生产坏”不良品甲乙双方约定处理方式如下（如下内容必填）：
“Bad production” indicates the defect products produced due to immature
production technology or mis-operation during production of Party A. For the “Bad
production” defect products, the two parties agree on the following method as
disposal (The following content is required.):
4、“保修坏”不良品的处理 Disposal of product “spoiled in maintenance”
“保修坏”是指甲方保修机翻修过程中产生的坏品。对于“保修坏”不良品甲乙双方约定处理方式如下（如下内容必填）：
“Bad repair” indicates the defect products produced in maintenance and repair
works of Party A. For the “Bad repair” defect products, the two parties come the
following method as disposal (The following content is
required.):
5、“呆滞料”的处理 Disposal of “excess material”
“呆滞料”是指因甲方生产计划变更等原因造成的甲方库存无使用需求的好料。对于呆滞料甲乙双方约定处理方式如下：如呆滞料属市场通用物料，则乙方有义务协助甲方处理，具体处理价格双方协商。如呆滞料属甲方专有物料，则（如下内容必填）
“Excess material” indicates the material free of defect and warehoused by Party A
which kept idle for use due to change of production plan of Party A. For the
“spoiled material”, the two parties come to the following method as disposal (The
following content is required.): if the spoiled material are universally used in the
market, Party B has the obligations to assist Party A in dealing with it. The actual
price shall be negotiated by the two parties. If the spoiled material is special for
Party A, it shall be (The following content is required.):
6、“特采料”的处理 Disposal of “specially purchased material”
“特采料”是指乙方送货的物料经甲方品质检验不合格，但甲方因生产紧急而挑选使用的物料。甲方使用“特采料”产生的额外费用由乙方承担，包括挑选的人工费用、管理费用以及因效率降低多出的人工成本、动力成本等。单位人工成本按￥12.00/小时计，单位动力成本按￥20.00/小时计，管理费用按￥500.00/批计。
“Specially purchased material” indicates the material supplied by Party B that fails
to pass inspection of Party A but is used selectively for emergent production of Party
A. The extra expenses for using “specially purchased material” of Party A shall be
undertaken by Party B including labor cost for selecting the material, management
expenses and extra labor cost and drive cost due to reduced efficiency. Labor cost
shall be calculated at ￥12.00/H, company drive cost shall be calculated at￥20.00/H,
and management charge shall be calculated at ￥500.00/batch.
若塑胶件/按键类/五金/镜片因尺寸或性能测试问题需特采、电子料或辅料因超期需特采(超期限收值见下表)，则乙方需按特采批次货款总额的20%支付违约金给甲方，违约金最低限额人民币伍佰圆。
In case of special purchase of plastic part/key/hardware/lens due to dimensions or
performance test, special purchase of electronics or auxiliary material due to overdue
delivery (Refer to the table below for overdue term), Party B is required to pay Party
A 20% of the total amount of the specially purchased material of this batch as
compensation for breach of contract. The minimum amount of compensation for
breach of contract is RMB500.
7、坏料退货方式 Method of returning defect material
7.1乙方每次送货时，必须先到甲方坏料仓库对甲方库存的乙方坏料进行清理。若乙方送货周期或每次送货间隔时间较长，而甲方库存的乙方坏料较多时，由甲方采购部人员将坏料库存清单传真给乙方，乙方须接到传真通知后3个工作日内到达甲方坏料仓办理退货业务。若乙方接通知后15个工作日仍未及时处理，甲方有权单方办理乙方坏料的退货业务，坏料实物由甲方自行处理，相关责任和损失由乙方全部承担。
At each delivery of Party B, Party B is required to firstly go to the warehouse of Party
A for disposal of spoiled materials in stock of Party A. In case of a long circle of
delivery of Party B and long interval of delivery, and if there are plenty of spoiled
materials of Party B in the warehouse of Party A, purchase personnel of Party A shall
fax an inventory list of spoiled materials to Party B, and Party B is required to arrive
at the warehouse of Party A within 3 working days after receiving the fax for disposal
of the defect material. In case Party B fails in disposal of the defect material within
15 working days after receiving the fax, Party A has the right to unilaterally return
the defect material. The actual defect material shall be disposed by Party A, while
Party B shall undertake all the related responsibilities and losses.