NOVA INTERNATIONAL FILMS INC
JOINT-VENTURE CONTRACT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>5
<FILENAME>nova8kex101022803.txt
<DESCRIPTION>JOINT-VENTURE CONTRACT
<TEXT>

                                                                    Exhibit 10.1




                             Joint-venture Contract

                                       Of

                      Baoding Pascali Broadcasting Cable TV
                       Integrated Information Networking
                                Company Limited







                                     between

          Baoding Pascali Multi-media Transmission Networking Co., Ltd.

                                       and

                               Solar Touch Limited





                                   July, 1999
                      Baoding City, Heibei Province, China

<PAGE>



                                     CONTENT

CHAPTER 1     GENERAL PROVISIONS                                           4

CHAPTER 2     THE PARTIES TO THE JOINT VENTURE                             4

CHAPTER 3     THE COMPANY                                                  5
              3.1      Incorporation
              3.2      Joint Venture Information
              3.3      Obedience of Law
              3.4      Form of Organization

CHAPTER 4     OBJECTIVE, SCOPE AND SCALE OF BUSINESS                       6
              4.1      Objective of Business
              4.2      Scope of Business
              4.3      Scale of Business

CHAPTER 5     TOTAL AMOUNT OF INVESTMENT AND                               6
              REGISTERED CAPITAL
              5.1      Total Investment
              5.2      Registered Capital
              5.3      Methods of Contribution
              5.4      Schedule of Contribution
              5.5      Alteration of Registered Capital


CHAPTER 6     RESPONSIBILITIES OF EACH PARTY TO                            8
              THE JOINT VENTURE
              6.1      Responsibilities of Party A
              6.2      Responsibilities of Party B


CHAPTER 7     BOARD OF DIRECTORS                                           9
              7.1      Establishment
              7.2      Composition, Appointment and Replacement
                       of Directors
              7.3      Approval of Resolution

<PAGE>

              7.4      Legal Representative
              7.5      Meeting of the Board
              7.6      Annual General Meeting
              7.7      Authorized Representative
              7.8      Notice of Meeting
              7.9      Reminder of Meeting
              7.10     Director's Fees and Expenses of Meeting

CHAPTER 8     OPERATION AND MANAGEMENT                                     12
              8.1      Reporting System of General Manager
              8.2      General Manager and Departments
              8.3      Dismissal

CHAPTER 9     PREPARATORY ISSUES                                           13
              9.1      Amortization
              9.2      Asset Evaluation
              9.3      Profit Distribution

CHAPTER 10    LABOR MANAGEMENT                                             13
              10.1     Employment Contract
              10.2     Remuneration Package

CHAPTER 11    TAXATION, FINANCE AND ACCOUNTING                             13
              11.1     Tax Payment by Company
              11.2     Tax Payment by Personnel
              11.3     Reserve
              11.4     Accounting Year
              11.5     Audit
              11.6     Financial Report

CHAPTER 12    TERM OF JOINT VENTURE                                        15

CHAPTER 13    PROPERTIES UPON EXPIRY                                       15
              OF JOINT VENTURE

CHAPTER 14    INSURANCE                                                    15






                                                                               2
<PAGE>

CHAPTER 15    CONFIDENTIALITY                                              15
              15.1     Definition
              15.2     Scope of Confidentiality

CHAPTER 16    AMENDMENT & TERMINATION                                      16
              OF THE CONTRACT
              16.1     Amendment
              16.2     Termination
              16.3     Compensation

CHAPTER 17    LIABILITIES FOR BREACH OF THE CONTRACT                       17
              17.1     Breaching Events
              17.2     Liabilities

CHAPTER 18    FORCE MAJEURE                                                17

CHAPTER 19    APPLICABLE LAW                                               18

CHAPTER 20    SETTLEMENT OF DISPUTES                                       18
              20.1     Arbitration
              20.2     Continuance of the Contract

CHAPTER 21    LANGUAGE OF THE CONTRACT                                     18

CHAPTER 22    EFFECTIVENESS AND MISCELLANEOUS                              18
              22.1     Effectiveness
              22.2     Approval
              22.3     Notices
              22.4     Signing







                                                                               3
<PAGE>

                          CHAPTER 1 GENERAL PROVISIONS

In accordance with the "Law of the People's Republic of China on Chinese-Foreign
Equity Joint  Venture"  (the "Equity Joint Venture Law") and the "Company Law of
the People's  Republic of China" (the "Company Law") and other relevant  Chinese
laws (the  "Chinese  laws") and  regulations  of the People's  Republic of China
("China"),  Baoding Pascali  Multi-media  Transmission  Networking Co., Ltd. and
Solar Touch  Limited,  adopting the  principle of equality and mutual  benefits,
through  friendly  consultation  and discussion,  have entered into an agreement
("the Contract") for the  establishment of a joint venture named Baoding Pascali
Broadcasting Cable TV Integrated Information Networking Co. Ltd. ("the Company")
in Baoding City, Hebei Province, China.


                   CHAPTER 2 THE PARTIES TO THE JOINT VENTURE

2.1      THE PARTIES TO THE JOINT VENTURE

         The  parties to the joint  venture and their  legal  representative  or
         company representative are as follows:

        (1)   Party A:                 Baoding Pascali Multi-media Transmission
                                       Networking Co., Ltd..
              Registration Place:      Baoding City, Hebei Province, China
              Legal Representative:    TAN Zu-ping
              Nationality:             China
              Position:                Chairman
              Legal Address:           Block D, Chuang Ye Centre, State Gaoxin
                                       District, Baoding, Heibei Province, China

         (2) Party B:                  Solar Touch Limited
              Registration Place:      British Virgin Island
              Legal Representative:    ZHAO Bing
              Nationality:             China
              Position:                Chairman
              Legal Address:           Suite 1101-02 Asia Pacific Finance Tower,
                                       Citibank Plaza, 3 Garden Road, Central,
                                       Hong Kong




                                                                               4
<PAGE>

                              CHAPTER 3 THE COMPANY

3.1      INCORPORATION

         Party A and  Party B agrees to  establish  the  joint  venture  Baoding
         Pascali  Broadcasting  Cable TV and Integrated  Information  Networking
         Co.,  Ltd. in  accordance  with the Equity Joint  Venture Law and other
         relevant  company laws of the People `s Republic of China.  The date of
         issue of the business license shall be the date of the establishment of
         the Company (the "Establishment Day").

3.2      JOINT VENTURE INFORMATION

         The legal name and address of the joint venture are:
         Name in Chinese:
         Name in English:      Baoding Pascali Broadcasting Cable TV Integrated
                               Information Networking Co. Ltd.
         Legal Address:        High and New Technology Development Zone, Baoding
                               City, Hebei Province, China

3.3      OBEDIENCE OF LAWS

         All  activities of the Company in China shall follow the published laws
         and regulations of China (generally called "Chinese laws").  All rights
         and interests of the Company are protected by the Chinese laws.

3.4      FORM OF ORGANIZATION

         The  Company  is a  limited  liability  company.  When  one  party  has
         completely  contributed  its own  amount  of the  Company's  registered
         capital stipulated in the Contract,  the party shall not be demanded to
         further provide any fund by funding,  loans,  guarantees or other kinds
         of financing to the Company or for the  Company.  The Company  shall be
         responsible for its own liabilities or other  obligations  with its own
         assets.  Both parties do not take any responsibility for any individual
         or  entity  for  the  reason  of  the  Company's  own   liabilities  or
         obligations.  The profit and interest of the Company are distributed in
         proportion  to the  respective  capital  contribution  from the parties
         ("contributing  proportion").  The  parties  take the loss  risk of the
         Company with the limitation of the respective  capital  contribution of
         each party.




                                                                               5
<PAGE>

                CHAPTER 4 OBJECTIVE, SCOPE AND SCALE OF BUSINESS

4.1      OBJECTIVE OF BUSINESS

         The  objective  of the  Company  is to  implement  advanced  scientific
         management   skills  with  the   advantage   of  advanced   multi-media
         transmission network as well as assure the shareholders of a reasonable
         return  from the  social  and  economic  benefit  through  first  class
         services.


4.2      SCOPE OF BUSINESS

         The  Business   scope  of  the  Company   includes:   development   and
         construction of broadband interactive  multimedia  information network,
         telecom network products, audio transmission,  image transmission, data
         transmission;   and  development  of  repair  techniques  of  cable  TV
         equipment  and  electric  appliances.  Foreign  party is not allowed to
         touch on  broadcasting  which shall be  operated  solely by the Chinese
         party.

4.3      SCALE OF BUSINESS

         The scale is the  construction  of an  interactive  optical fiber cable
         network   eventually   linked  to  the   distribution   system  of  the
         subscribers.  Backbone  ring-network's  length  is about  700 km whilst
         village  cables  linked  from  county  to  village  (or  with  over 500
         subscribers) are about 3000 km.


                      CHAPTER 5 TOTAL AMOUNT OF INVESTMENT
                             AND REGISTERED CAPITAL

5.1      TOTAL AMOUNT OF INVESTMENT

         The total  amount of  investment  of the joint  venture is One  Hundred
         Twenty Two Million  Forty  Hundred and Twenty Five Thousand in Renminbi
         (RMB122,425,000; equals to USD14,800,000).



                                                                               6
<PAGE>

5.2      REGISTERED CAPITAL

         The registered  capital is Seventy Million in Renminbi  (RMB70,000,000;
         equals to USD8,460,000). In the registered capital:

         (1)      The  contribution  of Party A is Thirty Five Million and Seven
                  Hundred  Thousand  in  Renminbi   (RMB35,700,000;   equals  to
                  USD4,310,000), being 51% of the registered capital.

         (2)      The  contribution  of Party B is Thirty Four Million and Three
                  Hundred  Thousand  in  Renminbi   (RMB34,300,000;   equals  to
                  USD4,145,000), being 49% of the registered capital.

5.3      METHODS OF CONTRIBUTION

         (1)      The parties shall make the  contribution to the Company in the
                  following methods:
                  (a)      Party A: Network and related  equipment  worth Twenty
                           One  Million and Seven  Hundred  Thousand in Renminbi
                           (RMB21,700,000;  equals to USD2,622,600);  intangible
                           asset (franchise, goodwill) worth Fourteen Million in
                           Renminbi (RMB14,000,000; equals to USD1,692000);

                  (b)      Party B: In cash of Four  Million and One Hundred and
                           Fourteen Thousand in US Dollars (USD4,140,000; equals
                           to RMB500,350)

         (2)      The difference between the total investment and the registered
                  capital will be loaned by the shareholders  (RMB30,000,000  in
                  proportion  to the  investment  of  Party A and B) and bank or
                  other financial institutes (RMB22,420,000);

5.4      SCHEDULE OF CONTRIBUTION

         (1)      RMB70m  will be paid by two  instalments  by both  parties  in
                  proportion  to  their   contributions   one  month  after  the
                  establishment of the joint venture.

5.5      ALTERATION OF REGISTERED CAPITAL




                                                                               7
<PAGE>

         The registered  capital of the Company can be altered or transferred by
         either party only after ALL of the following conditions are met:

         (1)      Each has  consented to the  alteration or transfer in writing;
         (2)      The Board has  unanimously  passed the alteration or transfer;
                  and
         (3)      The  approving  authorities  has  approved the  alteration  or
                  transfer in writing.

         Either party has the priority in purchasing the capital  contributed by
         the other party.


                  CHAPTER 6 RESPONSIBILITIES OF EACH PARTY TO
                                THE JOINT VENTURE

6.1      RESPONSIBILITIES OF PARTY A

         Beside  the  obligations  under  the  Contract,  Party A still  has the
         following responsibilities:

         (1)      Responsible  for  the  establishment  of  the  joint  venture,
                  getting   all   the   official   approvals   related   to  the
                  establishment   of  the  joint   venture  from  the  concerned
                  authorities in China, and transact all  registrations  related
                  to  the  establishment  of the  joint  venture.  Party  A also
                  obtains all licenses,  permits,  approvals and  cooperation of
                  the concerned authorities in China, all of those are necessary
                  for operating the joint venture;

         (2)      Assist Party B in registering foreign exchange of RMB;

         (3)      Make  contribution  in full on schedule in terms of  unsecured
                  capital without any liabilities or contingent liabilities;

         (4)      Ensure the Company of the right of operation,  development and
                  profit gain, as well as obtaining government approvals.

         (5)      Assist with the  implementation of the favorable terms and the
                  approval  of  documents  by  the  approving   authorities   in
                  accordance  with the  favorable  terms of Hebei  Province  and
                  Baoding  State High and New  Technology  Industry  Development
                  Zone of the State.



                                                                               8
<PAGE>

         (6)      Party A should not engage in  businesses  that are similar and
                  competitive to that of the Company.

6.2      RESPONSIBILITIES OF PARTY B

         Beside  the  obligations  under  the  Contract,  Party B still  has the
         following responsibilities:

         (1)      Make  the   contribution  in  full  in  cash  on  schedule  in
                  accordance with clause 5.2 to 5.4;

         (2)      Provide on schedule all credentials and relevant documents for
                  the establishment of the Company;

         (3)      Conduct  seriously joint venture  documents like the Contract,
                  Articles of association, assets evaluation,


                          CHAPTER 7 BOARD OF DIRECTORS

7.1      ESTABLISHMENT

         The Board is established on the date of the Establishment Day.

7.2      COMPOSITION, APPOINTMENT AND REPLACEMENT OF DIRECTORS

         (1)      The Board comprises 7 directors.  Party A appoints 4 directors
                  and  Party  B  appoints  3  directors.  Party A  appoints  the
                  Chairman   of  the  Board   whilst   Party  B   appoints   the
                  Vice-Chairman.

         (2)      The term of the  member  of the Board is four (4)  years.  The
                  directors  appointed by the respective  party can be appointed
                  for the next term.



                                                                               9
<PAGE>

7.3      APPROVAL OF RESOLUTION

         The Board is the highest  authority of the Company.  The Board executes
         the authority of making policy and leading the Company  through passing
         the resolutions.  Following  resolutions must be passed  unanimously by
         the Board:-

         1.       Amendment of Article of Association;
         2.       Winding-up of the Company;
         3.       Allocation of registered capital;
         4.       Transfer of the shares of the Company by one or more parties;
         5.       Transfer  of the shares of the  Company as  security by one or
                  more parties;
         6.       Mergers or divestitures;
         7.       Transfer of assets to the Creditor as security

7.4      LEGAL REPRESENTATIVE

         The Chairman of the Board is the legal  representative  of the Company.
         Should the  Chairman be unable to exercise  his  responsibilities,  the
         Vice-Chairman   shall  act  on  the  Chairman's   behalf.   Should  the
         Vice-Chairman  also be unable to  exercise  his  responsibilities,  one
         director shall be elected by the Board to take the duties.

7.5      MEETING OF THE BOARD

         (1)      The Board shall convene at least one meeting every year at the
                  registered  office or a designated  venue.  The Chairman shall
                  chair the meeting of the Board. Should three or more directors
                  submit  the   written   proposal   to  the   Chairman  or  the
                  Vice-Chairman of the Board asking for discussing the described
                  matters,  the Chairman or the  Vice-Chairman  who received the
                  proposal  shall  convene a  temporary  meeting of the Board to
                  discuss such matters.

         (2)      Written  notice of  meeting  stating  place,  time and  agenda
                  should be dispatched to the Board members at least twenty (20)
                  days before the date of meeting.

         (3)      Minutes of meeting should be filed.





                                                                              10
<PAGE>

7.6      ANNUAL GENERAL MEETING

         (1)      For officially convening,  the quorum for Annual Board meeting
                  or  Temporary  meeting  shall  be at least  five  (5)  members
                  present  in  person  or  by  authorized  representative.  Each
                  director has one vote.

7.7      AUTHORIZED REPRESENTATIVE

         Should any  director  be unable to attend  the  meeting of the Board to
         exercise his right or perform his duty,  the  director can  authorize a
         representative in writing to attend, vote and perform his duty.

7.8      NOTICE OF MEETING

         Should the Board fails to pass any major  resolutions  regarding  legal
         proceedings, regulations or significant terms of this Contract owing to
         the fact that neither are the  directors of one or more parties able to
         attend the meeting nor do they authorize a  representative,  then other
         parties shall send reminder of meeting to the absent  directors and the
         parties who authorize  the absent  directors to ensure that they attend
         the meeting on schedule.

7.9      REMINDER OF MEETING

         The  reminder  stated  in 7.8  should be sent out by  courier  at least
         thirty (30) days before the date of meeting  stating  clearly  that the
         director  should reply in writing within twenty (20) days from the date
         of  receipt  of the  reminder  whether  he/she  is able to  attend  the
         meeting.  If the director fails to reply,  then he/she is considered as
         abandoning.  The  directors  authorized  by both  parties can convene a
         Special  Board  meeting.   Even  if  there  is   insufficient   quorum,
         resolutions  can still be passed  through a  unanimous  consent  of the
         Special Board meeting.

7.10     DIRECTOR'S FEES AND EXPENSES OF MEETING

         Directors  not  engaged in the  management  of the  Company  should not
         receive any Director's  fees from the Company except with prior consent
         of the Board.  The decision as to the  remuneration  for  non-executive
         directors  will be made by the Board.  The Company shall be responsible
         for all  expenditure  of  transportation,  staying,  living  and  local
         transportation of the directors who attend the meeting of the Board.




                                                                              11
<PAGE>

                       CHAPTER 8 OPERATION AND MANAGEMENT

8.1      REPORTING SYSTEM OF GENERAL MANAGER

         The Company shall establish a joint managerial  institution which shall
         be  responsible  for its  daily  operation  and  management.  A General
         Manager  proposed by Party A shall be in charge of the joint managerial
         institution.

         There will be also two (2) Assistant  General Manager proposed by Party
         A and B  respectively.  Both  general  manager  and  assistant  general
         managers are appointed by the Board on a 3-year renewable term.

8.2      GENERAL MANAGER AND DEPARTMENTS

         The major responsibilities of general manager are as follows:
         (1)      Besides  carrying out the decisions of the Board,  the general
                  manager also organizes and be in charge of the Company's daily
                  operation and management. Documents of major issues have to be
                  signed  jointly by the general  manager and assistant  general
                  managers.   Other  issues  will  also  be  signed  jointly  in
                  accordance  with  the  decision  passed  by 5/7  of the  Board
                  members.

         (2)      Department  heads will be  recruited  to assist  both  general
                  manager and assistant general managers in management.

         (3)      Besides  the  department  heads,  there  will  also  be  Chief
                  Engineer,  Chief  Accountant  and Auditor.  Chief Engineer and
                  Auditor  will be proposed by Party A whilst  Chief  Accountant
                  will be proposed by Party B. The  appointment and dismissal of
                  these posts will be decided by the Board.

8.3      DISMISSAL

         The Board can dismiss the general manager or assistant general managers
         should they be charged of serious frauds or misconducts.



                                                                              12
<PAGE>

                          CHAPTER 9 PREPARATORY ISSUES

9.1      AMORTIZATION

         The  scope and  amount  of the  preparatory  expenses  incurred  by the
         Company can be amortized by 5 years before the  expiration of the joint
         venture.

9.2      ASSET EVALUATION

         Both  parties  agree to fix the date of  asset  evaluation  on June 30,
         1999.

9.3      PROFIT DISTRIBUTION

         Both  parties  work  out  their  own  profit   distribution   upon  the
         contribution of capital to the Company.


                           CHAPTER 10 LABOR MANAGEMENT

10.1     EMPLOYMENT CONTRACT

         The  Company  shall  have  its  own  right  of  employment,  dismissal,
         determining  remuneration  package,  insurance,  welfare  benefits  and
         gratuities  in  China  in  accordance   with  the  Chinese  laws.   For
         recruitment  purpose, the Board shall enact recruitment rules while the
         Company and its labor union shall draft up  employment  contract  which
         should finally be filed with the labor authority.

10.2     REMUNERATION PACKAGE

         The Board shall  decide the wages and  remuneration  of the  management
         proposed by both parties in accordance with the Chinese laws.


                   CHAPTER 11 TAXATION, FINANCE AND ACCOUNTING

11.1     TAX PAYMENT BY THE COMPANY




                                                                              13
<PAGE>

         The  Company  shall  pay  taxes and  enjoy  preferential  treatment  in
         accordance with the stipulations of the Chinese laws.

11.2     TAX PAYMENT BY PERSONNEL

         All personnel shall pay individual  income taxes in accordance with the
         Chinese laws.

11.3     RESERVE

         The  Company  is  entitled   annually  to  reserve   fund,   enterprise
         development  fund and  staff  welfare  fund.  The  entitlement  will be
         determined by the Board according to the Company's financial status.

11.4     ACCOUNTING YEAR

         The Company shall adopt the calendar year as its accounting  year, from
         January 1st to December  31st of the  calendar  year as one  accounting
         year. All account evidences, invoices and accounts shall be recorded in
         Chinese.

11.5     AUDIT

         (1)      The  Company  shall   appoint  an  accounting   firm  that  is
                  registered  in China to conduct  annual audit to the Company's
                  accounts  and  statements.   Upon  completion  of  audit,  the
                  domestic  registered  accounting  firm shall submit the fiscal
                  reports to the Board,  general  manager and assistant  general
                  managers.

         (2)      Party  B has  the  right  at any  time  appoint  international
                  accounting  firm to audit the Company's  accounts and records,
                  or other  documents  related to the  Company's  accounts.  The
                  related fees shall be borne by Party B.

11.6     FINANCIAL REPORTS

         The Company shall  (starting from the first complete  calendar  quarter
         since the  Establishment  Day) prepare and submit the un-audited annual
         financial statements and fiscal reports (balance sheet, profit and loss
         account, and profit distribution proposal) to the Board for review.



                                                                              14
<PAGE>

                      CHAPTER 12 TERM OF THE JOINT VENTURE

         (1)      The  operation  term of the joint venture is twenty (20) years
                  starting from the Establishment Day.

         (2)      Should both parties intend to extend the operation term of the
                  Company,  an  application  shall be submitted at least six (6)
                  months before the expiration.


               CHAPTER 13 PROPERTIES UPON EXPIRY OF JOINT VENTURE

The properties  left through  disposal upon the expiration or termination of the
joint  venture  should be shared  between  Party A and B in  proportion to their
respective contributions.


                              CHAPTER 14 INSURANCE

The Company shall arrange and maintain the full and sufficient insurance for the
Company's assets and liabilities.  Various kinds of insurance  coverage shall be
furnished by insurance  institutions  within the territory of China. The general
manager shall decide the extension,  value,  kind, and duration of the insurance
policies in  accordance  with the Chinese  laws.  The selection of the insurance
company shall be discussed and passed by the Board.


                           CHAPTER 15 CONFIDENTIALITY

15.1     DEFINITION

         Confidentiality  here  applies  to  all  technologies  and  information
         (software,  proprietary technologies,  trade secrets, original design),
         which are considered as the properties of the Company

15.2     SCOPE OF CONFIDENTIALITY

         To all  information  related  to the  Company,  the  Contract  and  any
         relevant  documents which are disclosed  between two parties or between
         one party and the Company,  if one party that discloses the information
         has expressed  clearly in writing while  disclosing  that the disclosed


                                                                              15
<PAGE>

         information is confidential,  or indicates while orally disclosing that
         the   information   is   confidential   and  then  confirm  in  writing
         immediately,   such  information   shall  be  viewed  as  "confidential
         information".  The party that  receives  the  confidential  information
         shall take the responsibility, and let its director(s),  supervisor(s),
         employees   or   agent(s)  to  take  the   responsibility   by  signing
         non-disclosure agreement. Without the written and definite consent from
         the party (the Board) that  provides  the  information,  the party that
         receives  the  information  shall  not  disclose  to  the  third  party
         (including  the  staff  of its own  party  who do not  need to know the
         information)  but not limited to the loan provider,  financial  advisor
         and legal consultant of its own party for whatever  purposes  including
         personal  ones).  The described  obligation of  confidentiality  is not
         applicable  to  the  information   that  is  required  to  disclose  in
         accordance  with the Chinese laws,  regulations  and any documents with
         legal effect or court order.


                       CHAPTER 16 AMENDMENT & TERMINATION
                                 OF THE CONTRACT

16.1     AMENDMENT

         After  signing the Contract,  only after the amendment  contract or the
         supplement  contract  has been  duly  signed  by both  parties  can any
         amendment or supplement to the Contract be effective.

16.2     TERMINATION

         The  Contract  can be  terminated  by the Board  with the  approval  of
         authorities in charge of examination  and approval if the Company faces
         force majeure, continuous losses or financial problems.

16.3     COMPENSATION

         Should  either  party fail to fully  conduct the  Contract,  Article of
         Association  or  seriously  breach the  Contract  which  results in the
         mal-operation of the Company, then the other party can claim losses and
         appeal to the approving  authorities  for  termination of the Contract.
         Should both  parties  reconcile  to  continue  the joint  venture,  the
         breaching party should bear all losses caused to the Company.



                                                                              16
<PAGE>

                  CHAPTER 17 LIABILITIES FOR BREACH OF CONTRACT

17.1     BREACHING EVENTS

         (1)      Should  either  party  fail  to  make  full   contribution  on
                  schedule, that party shall be viewed as breaching Chapter 5 of
                  the Contract.  The  breaching  party shall pay an indemnity to
                  the other  party  according  to the  "Supplementary  Contracts
                  Involving  Capital   Contribution  by  Shareholders  of  Joint
                  Ventures".  The  indemnity  constituting  0.03%  of the  total
                  contribution  by the breaching party will start from the first
                  month  since  the  due  date  of  the  contribution.   If  the
                  contribution  becomes  overdue for 3 consecutive  months,  not
                  only  should  the  breaching  party  pay a  total  of  0.09%'s
                  indemnity,   the  other  party  also  reserves  the  right  to
                  terminate the Contract in  accordance  with clause 16.3 of the
                  Contract.  In this case, the breaching party has to compensate
                  the other party for all losses.

17.2     LIABILITIES

         Should  either party breach the Contract,  the  breaching  party should
         bear all  liabilities  whilst both parties will be held  responsible if
         both breach the Contract.


                            CHAPTER 18 FORCE MAJEURE

Should either party delay in or be prevented from executing its responsibilities
under the Contract due to earthquake,  typhoon,  fire, war or other events,  and
their  occurrence  and  consequences  are  unpreventable  or  unavoidable to the
affected  party  (hereinafter  collectively  referred  to  as  "event  of  force
majeure"),  the delay or failure of  execution  shall not be viewed as breach to
the Contract. But the affected party shall notify immediately the other party of
the  event  and  within  fifteen  (15)  days  thereafter  provide  the  detailed
information  of the event and the reason of its inability to execute or delay in
execution,  as well as the notary  documents of evidence  provided by the notary
organization of the place where the event of force majeure  occurred.  Depending
on the extent  affected by the event of force  majeure to the  execution  of the
Contract, both parties shall decide whether or not to terminate or waive some of
the terms or delay the execution of the Contract.




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                            CHAPTER 19 APPLICABLE LAW

The  formation of the  Contract,  its  validity,  interpretation,  execution and
settlement of disputes shall be governed by the Chinese laws.


                        CHAPTER 20 SETTLEMENT OF DISPUTES

20.1     ARBITRATION

         All  disputes,  controversies,  and right of claims  arising from or in
         connection with the Contract  (generally  called  "disputes")  shall be
         settled through friendly  consultation between both parties. In case no
         settlement can be reached through consultation, either party can submit
         the  dispute  at any time to China  International  Economic  and  Trade
         Arbitration  Commission  (CIETAC) for  arbitration.  Any arbitral award
         made by the  arbitration  court is final and binding upon both parties.
         The defeated party shall bear the arbitration fee.

20.2     CONTINUANCE OF THE CONTRACT

         During the  arbitration  process,  the Company  shall  proceed with the
         terms of the Contract except those in arbitration.


                       CHAPTER 21 LANGUAGE OF THE CONTRACT

The  Contract  is  written in both  Chinese  and  English.  Both  languages  are
equivalent in effect.  In case of discrepancy,  the original  version in Chinese
shall prevail.


                   CHAPTER 22 EFFECTIVENESS AND MISCELLANEOUS

22.1     EFFECTIVENESS



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         As the  supplement  to  the  Contract,  auxiliary  documents  like  the
         Articles  of  association,  Appendix  I are  attached.  The  government
         approval  in  relation  to the  Contract  becomes  the  basis  for  the
         interpretation of the Contract.

22.2     APROVAL

         The  Contract  and its  appendix  involved  will come into  force  upon
         approval  granted  by the  Department  of  Foreign  Trade and  Economic
         Cooperation, China.

22.3     NOTICES

         All notices and other  communicated  documents in  connection  with the
         Contract,  the  articles of  association  and the  Company  between two
         parties,  as well  as all  notices  and  other  communicated  documents
         between the Company and both parties or among the  directors,  shall be
         sent to the other party by message  delivery  or fax  followed by mail.
         The  registered  offices of both  parties  are  treated as the  mailing
         addresses.

22.4     SIGNING

         The Contract was signed by legal  representatives  or their  authorized
         representatives of both parties on July 23, 1999 in Baoding City, Hebei
         Province, China.


         Party A:                       Baoding Pascali Multi-media Transmission
                                        Networking Co., Ltd..(signed & sealed)
         Authorized Representative:     TAN Zu-ping



         Party B:                       Solar Touch Limited (signed & sealed)
         Authorized Representative:     ZHAO Bing







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