PACIFICNET COM INC
EX-10.8
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>4
<FILENAME>j1278_ex10d8.htm
<DESCRIPTION>EX-10.8
<TEXT>
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<head>
<title>Prepared by MerrillDirect</title>
</head>

<body link=blue vlink=purple>

<div>

<p align=right><font size=2>Exhibit 10.8</font></p>

<p align=center><b><font size=2>DATED:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; July 28,&nbsp; 2001</font></b></p>

<div align=center>

<table border=0 cellspacing=0 cellpadding=0 width="69%">
 <tr>
  <td  align=right width="29%" valign=top><b><font size=2>(1)</font></b></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td width="67%" colspan=2 valign=top><b><font size=2>HOLLEY GROUP SHARE HOLDING
  CO., LTD.<br>&nbsp;(Parent Company)</font></b></td>
 </tr>
 <tr>
  <td  align=right width="29%" valign=top>&nbsp;</td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td width="67%" colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td  align=right width="29%" valign=top>&nbsp;</td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td width="22%" valign=bottom>&nbsp;</td>
  <td width="45%" valign=bottom><b><font size=2>and</font></b></td>
 </tr>
 <tr>
  <td  align=right width="29%" valign=top>&nbsp;</td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="67%" colspan=2 valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=right width="29%" valign=top><b><font size=2>(2)</font></b></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td width="67%" colspan=2 valign=top><b><font size=2>PACIFICNET.COM, INC.</font></b></td>
 </tr>
</table>

</div>


<div align=center><b><font size=2>

<hr size=1 width="25%" noshade color=black align=center>

</font></b></div>


<p align=center><b><font size=2>AGREEMENT<br>
for the sale and purchase of an equity interest in a Joint Venture to be formed<br>
in the People&#146;s Republic of China<br>
by Holley Group Co., Ltd.</font></b></p>


<div align=center><b><font size=2>

<hr size=1 width="25%" noshade color=black align=center>

</font></b></div>


<p align=center><b><font size=2>
<img src="j1278ex10d8image001.gif" width=178 height=24></font></b></p>

<p align=center><font size=2>SOLICITORS<br><br></font></p>

<p align=center><font size=2>10th Floor,<br>
Hutchison House,<br>
10 Harcourt Road,<br>
Central, Hong Kong.</font></p>

<p align=center><font size=2>Tel: (852) 2230 3500&nbsp; Fax: (852)
2899 2996<br>
Website: www.prestongates.com</font></p>

<p align=center><font size=2>Our ref.: </font><b><font size=2>44036-00006/NKA-KA1L/KA1L</font></b></p>

<page>


<p align=center><b><font size=2>CONTENTS</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="88%">
 <tr>
  <td width="16%" valign=top><b><font size=2>Clause</font></b></td>
  <td width="83%" valign=top><b><font size=2>Heading</font></b></td>
 </tr>
 <tr>
  <td width="16%" valign=top>&nbsp;</td>
  <td width="83%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Interpretation"   title="Click to goto INTERPRETATION">&nbsp;1</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Interpretation"   title="Click to goto INTERPRETATION">Interpretation</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#SaleOfShares"   title="Click to goto SALE OF SHARES">&nbsp;2</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#SaleOfShares"   title="Click to goto SALE OF SHARES">Sale of Shares</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Consideration"   title="Click to goto CONSIDERATION">&nbsp;3</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Consideration"   title="Click to goto CONSIDERATION">Consideration</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Conditions"   title="Click to goto CONDITIONS">&nbsp;4</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Conditions"   title="Click to goto CONDITIONS">Conditions</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Completion"   title="Click to goto COMPLETION">&nbsp;5</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Completion"   title="Click to goto COMPLETION">Completion</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Representations"   title="Click to goto REPRESENTATIONS">&nbsp;6</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Representations"   title="Click to goto REPRESENTATIONS">Representations and warranties</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#SpecialTerms"   title="Click to goto SPECIAL TERMS">&nbsp;7</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#SpecialTerms"   title="Click to goto SPECIAL TERMS">Special Terms</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a
  href="#ConfidentialityAndExclusiveNegotiation"   title="Click to goto CONFIDENTIALITY AND EXCLUSIVE NEGOTIATION">&nbsp;8</a></font></td>
  <td width="83%" valign=top><font size=2><a
  href="#ConfidentialityAndExclusiveNegotiation"   title="Click to goto CONFIDENTIALITY AND EXCLUSIVE NEGOTIATION">Confidentiality
  and Exclusive Negotiation</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Outsourcing"   title="Click to goto OUTSOURCING">&nbsp;9</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Outsourcing"   title="Click to goto OUTSOURCING">Outsourcing</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Release"   title="Click to goto RELEASE">10</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Release"   title="Click to goto RELEASE">Release</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#FurtherAssuranceAndInformation"   title="Click to goto FURTHER ASSURANCE AND INFORMATION">11</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#FurtherAssuranceAndInformation"   title="Click to goto FURTHER ASSURANCE AND INFORMATION">Further Assurance,
  Attorney, Information and Debts</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Costs" title="Click to goto COSTS">12</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Costs" title="Click to goto COSTS">Costs</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Announcements"   title="Click to goto ANNOUNCEMENTS">13</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Announcements"   title="Click to goto ANNOUNCEMENTS">Announcements</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#ReturnOfDocuments"   title="Click to goto RETURN OF DOCUMENTS">14</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#ReturnOfDocuments"   title="Click to goto RETURN OF DOCUMENTS">Return of Documents</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#CompleteAgreement"   title="Click to goto COMPLETE AGREEMENT">15</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#CompleteAgreement"   title="Click to goto COMPLETE AGREEMENT">Complete Agreement</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Assignment"   title="Click to goto ASSIGNMENT">16</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Assignment"   title="Click to goto ASSIGNMENT">Assignment</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Severability"   title="Click to goto SEVERABILITY">17</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Severability"   title="Click to goto SEVERABILITY">Severability</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Counterparts"   title="Click to goto COUNTERPARTS">18</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Counterparts"   title="Click to goto COUNTERPARTS">Counterparts</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#RemainingInForce"   title="Click to goto REMAINING IN FORCE">19</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#RemainingInForce"   title="Click to goto REMAINING IN FORCE">Remaining in Force</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#TimeOfTheEssence"   title="Click to goto TIME OF THE ESSENCE">20</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#TimeOfTheEssence"   title="Click to goto TIME OF THE ESSENCE">Time of the Essence</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#NoWaiver"   title="Click to goto NO WAIVER">21</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#NoWaiver"   title="Click to goto NO WAIVER">No Waiver</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#Notices"   title="Click to goto NOTICES">22</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#Notices"   title="Click to goto NOTICES">Notices</a></font></td>
 </tr>
 <tr>
  <td width="16%" valign=top><font size=2><a href="#GoverningLawAndArbitration"   title="Click to goto GOVERNING LAW AND ARBITRATION">23</a></font></td>
  <td width="83%" valign=top><font size=2><a href="#GoverningLawAndArbitration"   title="Click to goto GOVERNING LAW AND ARBITRATION">Governing Law and
  Jurisdiction</a></font></td>
 </tr>
</table>

</div>

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<div>

<p><b><font size=2>THIS AGREEMENT</font></b><font size=2> is made the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;28<sup>th</sup>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; day of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; July&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2001.</font></p>

<p><b><font size=2>BETWEEN:</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=62 valign=top><b><font size=2>(1)</font></b></td>
  <td width=1049 colspan=3 valign=top><b><font size=2>HOLLEY GROUP SHARE HOLDING CO., LTD</font></b><font   size=2>&nbsp;
  (Parent Company) a company existing under the laws of the People&#146;s
  Republic of China whose principal place of business is at No. 78 Morganshan Road,
  Hangzhou 310005, People&#146;s Republic of China (&#147;<b>Vendor</b>&#148;); and</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=1049 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>(2)</font></b></td>
  <td width=1049 colspan=3 valign=top><b><font size=2>PACIFICNET.COM, Inc.</font></b><font size=2> a company existing under the laws of the
  State of Delaware in the United States of America and having its registered
  office at 7808 Creekridge Circle, Suite 101, Bloomington, MN 55439, United
  States of America (the &#147;<b>Purchaser</b>&#148;)</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=1049 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=623 colspan=3 valign=top><font size=2>WHEREAS:</font></td>
  <td width=488 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=623 colspan=3 valign=top>&nbsp;</td>
  <td width=488 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>A.</font></b></td>
  <td width=1049 colspan=3 valign=top><font size=2>As at the date hereof, the Vendor and its
  Subsidiaries (&#147;<b>the Vendor Group</b>&#148;) are principally engaged in operations
  covering electrical instruments, electronic materials, fine chemicals and
  real estate (&#147;<b>Holley Business</b>&#148;). The Group includes 16 manufacturing
  enterprises and two public companies which are listed on certain stock
  exchanges&nbsp; in the PRC </font><font size=2 color=black>(Holley Holding, Code: 0607; ST Hengtai, Code: 600097).</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=1049 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>B.</font></b></td>
  <td width=1049 colspan=3 valign=top><font size=2>The Vendor and the Purchaser are desirous of
  entering into a joint venture in the PRC such that the Purchaser shall own a
  51% legal and beneficial interest in the Joint Venture (as defined below) and
  the Vendor shall own a 49% legal and beneficial interest in the Joint
  Venture.&nbsp; In order to facilitate the
  joint venture relationship between the parties, it has been agreed that the
  Purchaser shall purchase from the Vendor, either directly or indirectly, the
  said 51% interest in the Joint Venture (&#147;<b>Sale and Purchase</b>&#148;).&nbsp; In order to facilitate such Sale and
  Purchase, it is agreed that the Vendor shall immediately after execution of
  this Agreement either :-</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=1049 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=49 valign=top><font size=2>(a)</font></td>
  <td width=999 colspan=2 valign=top><font size=2>within 45 days of the date of this Agreement
  form (subject to the approval of the Purchaser) the Joint Venture whereby the
  shareholding structure of the Joint Venture shall allow and permit, in
  accordance with all rules, regulations and laws of the PRC (together with all
  legal and government approvals being obtained) for the Purchaser to directly
  purchase and hold an interest in the Joint Venture from the Vendor (&#147;<b>Holley JV
  Structure</b>&#148;); or</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=49 valign=top>&nbsp;</td>
  <td width=999 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=49 valign=top><font size=2>(b)</font></td>
  <td width=999 colspan=2 valign=top><font size=2>in the event the Vendor is unable to form the
  Joint Venture based on the Holley JV Structure or the Purchaser (for any
  reason whatsoever) disapproves of the Holley JV Structure, then the Vendor
  shall procure that there be formed and incorporated in the British Virgin
  Islands a private company limited by shares in accordance with the laws of
  the British Virgin Islands ( the &#147;<b>Company</b>&#148;) for the sole purpose of holding
  and owning 51% of the entire equity interest in the Joint Venture and whereby
  the Vendor shall own 100% of the entire issued share capital of and in the
  Company after the Company&#146;s incorporation and immediately prior to Completion
  and to be transferred and assigned to the Purchaser at Completion (&#147;<b>BVI JV
  Structure</b>&#148;).</font></td>
 </tr>

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<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=62 colspan=2 valign=top><b><font size=2>C.</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>The Vendor shall immediately after the
  execution of this Agreement procure to be formed and established (subject to
  the approval of the Purchaser) a PRC Sino-foreign co-operative joint venture
  enterprise (&#147;<b>Joint Venture</b>&#148;) whereby the Purchaser shall upon Completion
  be the legal and beneficial owner of 51% of the Joint Venture (whether
  directly under the Holley JV Structure or indirectly under the BVI JV
  Structure) and the Vendor has agreed it will become the legal and beneficial
  owner of 49% of the Joint Venture upon incorporation of the Joint
  Venture.&nbsp; The Vendor shall be
  responsible (subject to the approval of the Purchaser) of procuring all
  agreements and documents be entered into by all necessary parties and person
  in order to form the Joint Venture, including the JV Agreement (hereinafter
  defined).</font></td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=1049 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top><b><font size=2>D.</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>The Vendor will transfer to the Joint Venture
  its interest in such portion of its business comprising cash, working capital
  and business assets&nbsp; (&#147;<b>Injected
  Business</b>&#148;) equal to the <b>lesser amount</b> of:</font></td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=1049 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=1049 colspan=2 valign=top><font size=2>USD$1million;</font></td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=1049 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=49 valign=top><font size=2>OR</font></td>
  <td width=999 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=49 valign=top>&nbsp;</td>
  <td width=999 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=1049 colspan=2 valign=top><font size=2>Operating Cash Reserve Requirements of the
  Joint Venture, being the sum of total monthly operating expenses and costs of
  good sold of the Joint Venture (derived from the proforma Joint Venture
  information provided under Clause 4.1.9) divided by 6.</font></td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=49 valign=top>&nbsp;</td>
  <td width=999 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top><b><font size=2>E.</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>In addition to the JV Agreement, the Vendor
  shall, immediately after the signing of this Agreement, enter into the
  Extinguishment Agreement (hereinafter defined) to the effect that the Vendor
  shall upon the transfer of the Injected Business to the Joint Venture,
  extinguish and keep the Purchaser fully indemnified against all debts and
  liabilities attributable to the Injected Business which have arisen prior to
  such transfer.</font></td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=49 valign=top>&nbsp;</td>
  <td width=999 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top><b><font size=2>F.</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>Subject to the above, the Vendor has agreed to
  sell and Purchaser has agreed to purchase from the Vendor the Sale Shares
  subject to and in accordance with the terms and conditions hereinafter set
  out.</font></td>
 </tr>
 <tr>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=1049 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=1111 colspan=4 valign=top><b><font size=2>NOW IT IS HEREBY AGREED</font></b><font size=2> as follows :</font></td>
 </tr>
 <tr>
  <td width=1111 colspan=4 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=57 valign=top><b><font size=2>1.</font></b></td>
  <td width=1054 colspan=3 valign=top><a name=Interpretation><b><font   size=2>INTERPRETATION</font></b></a></td>
 </tr>
 <tr>
  <td width=57 valign=top>&nbsp;</td>
  <td width=1054 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=57 valign=top><b><font size=2>1.1</font></b></td>
  <td width=1054 colspan=3 valign=top><font size=2>The Recitals and Schedules form part of this
  Agreement and shall have the same force and effect as if expressly set out in
  the body of this Agreement and any reference to this Agreement shall include
  the Recitals and Schedules.</font></td>
 </tr>
 <tr>
  <td width=57 valign=top>&nbsp;</td>
  <td width=1054 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=57 valign=top><b><font size=2>1.2</font></b></td>
  <td width=1054 colspan=3 valign=top><font size=2>In this Agreement except where the context
  otherwise requires the following words and expressions shall have the
  following meanings:</font></td>
 </tr>

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<page>


<p><b><font size=2>&nbsp;</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Accounts&quot;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>the audited financial statements (including
  balance sheet and profit and loss account) relating to the Injected Business
  and each of the Joint Venture, the Vendor, the Company (if applicable) and of
  each of their respective Subsidiaries prepared in accordance with generally
  accepted accounting principles in the PRC if in relation to the Vendor and each
  of its Subsidiaries (excluding the Company), and in accordance with generally
  accepted accounting principles of the United States if in relation to the
  Injected Business, the Joint Venture and the Company (if applicable) and each
  of their respective Subsidiaries;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>this &#147;Agreement&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means this agreement, and reference to this
  Agreement shall be construed as references to this Agreement as it may be
  amended or supplemented from time to time by the parties hereto in writing;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Articles of Association&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means the articles of association and the
  terms thereof of the Joint Venture to be negotiated by the Vendor and the
  Purchaser in good faith and the terms of which are to be mutually agreed upon
  by the parties on or before the Conditions Precedent Date subject at all
  times that the final version as executed or to be executed shall be in such
  form and substance satisfactory to the Purchaser</font><font size=2>;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Auditors&quot;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>Auditors mutually approved and agreed by the
  parties hereto on or before the Conditions Precedent Date;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Business Day&quot;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>any day on which banks are open for business
  in Hong Kong and Hangzhou, PRC (excluding Sundays, public holidays in Hong
  Kong, Hangzhou, PRC and days on which the Typhoon Signal No.8 is hoisted or
  the Black Rainstorm warning is signaled and still in effect before 3 p.m. in
  Hong Kong or similar signals are hoisted or in place and still in effect
  before 3 pm in Hangzhou, PRC such that businesses and schools are closed in
  Hangzhou, PRC), provided that each business day shall finish (and then the
  next business day commence) at 4pm except Saturdays which shall so finish at
  12.30pm;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Completion&quot;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>completion of the sale and purchase of the
  Sale Shares in accordance with Clause 5 of this Agreement;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Completion Accounts&quot;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>the consolidated balance sheet relating to the
  Injected Business and to each of the Joint Venture, the Vendor, the Company
  (if applicable) and each of their respective&nbsp;
  Subsidiaries made up to the close of business on the Completion Date
  and the audited consolidated profit and loss account relating to the Injected
  Business and to&nbsp; each of the Joint
  Venture, the Vendor, the Company and each of their respective Subsidiaries
  for the period from the Accounting Date to the Completion Date, prepared in
  accordance with generally accepted accounting principles in the PRC if in
  relation to the Vendor and each of its Subsidiaries (excluding the Company
  (if applicable)), and in accordance with generally accepted accounting
  principles of the United States if in relation to the Injected Business, the
  Joint Venture and the Company (if applicable) and each of their respective
  Subsidiaries; and certified by Auditors.</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Consideration&quot;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>the consideration payable for the sale and
  purchase of the Sale Shares to the Vendor pursuant to Clause 3;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Consideration
  Shares&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means 4,000,000
  PACT Shares to be issued to the Vendor on Completion as the Consideration in
  accordance with the terms and conditions of this Agreement;&nbsp; </font><font size=2>The shares to be issued and allotted to the
  Purchaser pursuant to the terms and condition of this Agreement by the
  Purchaser to the Vendor will not be registered under the Securities and
  Exchange Act of 1933 of the United States and are subject to restrictions on
  transferability;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Control&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means the possession, direct or indirect, of
  the power to direct or cause the direction of the management and policies of
  a Person, whether through the ownership of voting securities, by contract or
  otherwise;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Dispose&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means, to make or to effect any sale,
  assignment, exchange, transfer, or to grant any option, right of first
  refusal or other right or interest whatsoever or to enter into any agreement
  for any of the same and the expression &#147;Disposal&#148; shall be construed
  accordingly;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Distributions&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means </font><font size=2>with respect to any period, such amount of profit
  distributions and allocations given or to be given to the shareholders of the
  Joint Venture in an amount as may be reasonably determined by the board of
  directors of the Joint Venture or required or authorized in accordance with the
  relevant laws of the PRC;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&nbsp;&#147;Employment
  Agreements&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means the Employment Agreements to be entered
  into between the Joint Venture and each of the Key Employees to be negotiated
  by the Vendor and the Purchaser in good faith and the terms of which are to
  be mutually agreed upon by the parties on or before the Conditions Precedent
  Date subject at all times that the final version as executed or to be
  executed shall be in such form and substance satisfactory to the Purchaser;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;EMS Distribution
  Agreement&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means the
  distribution agreement to be entered into between </font><font size=2>the Purchaser</font><font size=2> and the Vendor
  whereby </font><font size=2>the
  Purchaser </font><font size=2>shall grant the Vendor rights to distribute and
  market EMS in such territory agreeable to </font><font size=2>the Purchaser </font><font size=2>and </font><font   size=2>to be negotiated by the Vendor and the
  Purchaser in good faith and the terms of which are to be mutually agreed upon
  by the parties subject at all times that the final version as executed or to
  be executed shall be in such form and substance satisfactory to the Purchaser</font><font   size=2>;</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;EMS Software Agreement&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means the software development agreement to be
  entered into between the Purchaser and the Vendor in respect of the
  development of e-commerce and EMS software and application to be negotiated
  by the Vendor and the Purchaser in good faith and the terms of which are to
  be mutually agreed upon by the parties subject at all times that the final
  version as executed or to be executed shall be in such form and substance
  satisfactory to the Purchaser;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;EMS License&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means the software license to be granted by
  the Purchaser in favour of the Vendor in respect of those software developed
  in accordance with the EMS Software Agreement to be negotiated by the Vendor
  and the Purchaser in good faith and the terms of which are to be mutually
  agreed upon by the parties subject at all times that the final version as
  executed or to be executed shall be in such form and substance satisfactory
  to the Purchaser;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Encumbrance&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means and includes any option, right to
  acquire, right of pre-emption, mortgage, charge, pledge, lien, hypothecation,
  title retention, right of set off, claim or counterclaim, trust arrangement
  or other security or encumbrance or any equity or restriction;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Escrow Agent&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means such person mutually acceptable to the
  Purchaser and the Vendor and to be appointed by the parties hereto to
  facilitate the escrow arrangements set out in this Agreement;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Escrow Agreement&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means the escrow agreement in to be entered
  into between the Vendor, the Purchaser and the Escrow Agent in respect of the
  Consideration Shares pursuant to Clause 7 to be negotiated by the Vendor and
  the Purchaser in good faith and the terms of which are to be mutually agreed
  upon by the parties on or before the Conditions Precedent Date subject at all
  times that the final version as executed or to be executed shall be in such
  form and substance satisfactory to the Purchaser;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Extinguishment Agreement&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means the indemnity agreement to be entered
  into by the Vendor and the Joint Venture in respect of the liabilities and
  debts attributable to the Injected Business being transferred to the Joint
  Venture to be negotiated by the Vendor and the Purchaser in good faith and
  the terms of which are to be mutually agreed upon by the parties on or before
  the Conditions Precedent Date subject at all times that the final version as
  executed or to be executed shall be in such form and substance satisfactory
  to the Purchaser;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Government Contract and Recognition&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means those agreements (to be negotiated by
  the Vendor and the Purchaser in good faith and to be mutually agreed upon by
  the parties on or before the Conditions Precedent Date) entered into between
  the Vendor and/or its Subsidiaries with such PRC government authorities
  concerning the Holley Business which are to be transferred and assigned to
  the Joint Venture by the Vendor;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Hong Kong&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>Hong Kong Special Administrative Region of the
  PRC;</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;HK$&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>Hong Kong dollars;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Intellectual Property&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>patents, trade marks, service marks,
  registered designs, utility models, applications for any of the foregoing and
  the right to apply for any of the foregoing in any part of the world,
  copyright, inventions, confidential information, know&#150;how and business
  names and any similar rights situated in any country; and the benefit
  (subject to the burden) of any and all licenses in connection with any of the
  foregoing;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;JV Agreement&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means the PRC Sino foreign co-operative joint
  venture agreement and the related Memorandum of Association and Articles of
  Association to be entered into (subject to the approval of the Purchaser) on
  or before the Conditions Precedent Date either (i) between the Company and
  the Vendor if in relation to the BVI JV Structure; or (ii) between the Vendor
  and such third party used to form the Joint Venture if in relation to the
  Holley JV Structure</font><font size=2>, including its variation,
  modification and supplement necessitated by the requirements of the PRC
  approving authority and approved by the Purchaser;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Key Employees&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means key employees mutually agreed upon by
  the Purchaser and Vendor on or before the Condition Precedent Date and who
  shall be employed by the Joint Venture;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Memorandum of Association&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means the memorandum of association and the
  terms thereof of the Joint Venture to be negotiated by the Vendor and the
  Purchaser in good faith and the terms of which are to be mutually agreed upon
  by the parties on or before the Conditions Precedent Date subject at all
  times that the final version as executed or to be executed shall be in such
  form and substance satisfactory to the Purchaser;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Net Income&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means, for any period, all revenues and income
  of any kind or description received during such period by the Joint Venture
  minus all costs, expenses and taxes paid (whether income, corporate, sales or
  otherwise to the relevant tax authorities) or incurred during such period by
  the Joint Venture as may be determined in accordance with generally accepted
  accounting principles in the United States;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Net Revenue&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means, for any period, all revenues and income
  of any kind or description received during such period by the Joint Venture
  as may be determined in accordance with generally accepted accounting
  principles in the United States;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;PACT Shares&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>ordinary shares of US$0.0001 each in the
  capital of the Purchaser;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Person&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>means any individual, partnership,
  corporation, trust, unincorporated association, joint venture, limited
  liability company or other entity or any government, governmental agency or
  political subdivision;</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;PRC&#148;</font></b></td>
  <td width=876 colspan=3 valign=top><font size=2>the People&#146;s Republic of China;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 colspan=2 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Purchaser&#146;s Solicitors&#148;</font></b></td>
  <td width=876 colspan=3 valign=top><font size=2>Preston Gates &amp; Ellis, 10<sup>th</sup>
  Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong (Attn : Mr.
  Keith&nbsp; A. Lee);</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 colspan=2 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Release Criteria&#148;</font></b></td>
  <td width=876 colspan=3 valign=top><font size=2>means the basis and conditions by which the
  Escrow Agent shall release the relevant portion of Consideration Shares to
  the Vendor on the Release Date pursuant to the schedule in Clause 7.1;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 colspan=2 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Release Date&#148;</font></b></td>
  <td width=876 colspan=3 valign=top><font size=2>means the relevant date by which the Escrow
  Agent, pursuant to the Escrow Agreement, shall release such portion of
  Consideration Shares to the Vendor in accordance with the schedule in Clause
  7.1 and upon the Release Criteria being satisfied;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=876 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Reserves&#148;</font></b></td>
  <td width=876 colspan=3 valign=top><font size=2>means, with respect to any period, the amount
  of funds set aside, or amounts allocated during such period, for
  (a)&nbsp;funding reserves for contingent liabilities, working capital,
  repairs, replacements, renewals, and (b)&nbsp;paying taxes, insurance, debt
  service, or other costs or expenses incident to the ownership or operation of
  the Joint Venture;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 colspan=2 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Sale Shares&quot;</font></b></td>
  <td width=876 colspan=3 valign=top><font size=2>means either (i) the ordinary shares of&nbsp; the Company (being 100% of the existing
  issued and allotted share capital on a fully diluted basis) such shares being
  beneficially owned by and registered in the name of the Vendor if in relation
  to the BVI JV Structure which may be used as the basis of the Sale and
  Purchase in accordance with the terms of this Agreement; or (ii) 51% of the
  entire legal and equity interest of and in the Joint Venture if in relation
  to the Holley JV Structure which may be used as the basis of the Sale and Purchase
  in accordance with the terms of this Agreement;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=516 colspan=2 valign=top>&nbsp;</td>
  <td width=360 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Subsidiaries&quot;</font></b></td>
  <td width=876 colspan=3 valign=top><font size=2>means in respect of a Person, a subsidiary of
  another company (or shall deemed to be), if :-</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=60 valign=top>&nbsp;</td>
  <td width=816 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=60 valign=top><font size=2>(a)</font></td>
  <td width=816 colspan=2 valign=top><font size=2>that other company (i) controls the
  composition of the board of directors of such Person; or (ii) controls more
  than half of the voting power of such Person; or (iii) holds more than half
  of the issued share capital of such Person (excluding any part of it which
  carries no right to participate beyond a specified amount in a distribution
  of either profits or capital); or</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=60 valign=top>&nbsp;</td>
  <td width=816 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=60 valign=top><font size=2>(b)</font></td>
  <td width=816 colspan=2 valign=top><font size=2>such Person is a subsidiary of any company
  which is that other company's subsidiary;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=60 valign=top>&nbsp;</td>
  <td width=816 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;Supply of Goods and Services Agreement&#148;</font></b></td>
  <td width=876 colspan=3 valign=top><font size=2>means the agreement to be entered into between
  the Joint Venture and the Vendor for the supply of goods and services by the
  Joint Venture to the Vendor in order for the Joint Venture to achieve the Net
  Revenue and Net Income warranted by the Vendor in Clause 7 to be negotiated
  by the Vendor and the Purchaser in good faith and the terms of which are to
  be mutually agreed upon by the parties on or before the Conditions Precedent
  Date subject at all times that the final version as executed or to be
  executed shall be in such form and substance satisfactory to the Purchaser;</font></td>
 </tr>

<!-- DO NOT remove the following table row. It is needed for  .               the proper rendering of tables containing misaligned cells.-->
 <tr height=0>
  <td width=153></td>
  <td width=40></td>
  <td width=295></td>
  <td width=234></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;tax&quot; and &quot;taxation&quot;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>includes all forms of tax, levy, duty, charge,
  fee, contribution, impost or withholding of any nature now or hereafter
  imposed, levied, collected, withheld or assessed by a local, municipal,
  governmental, state, federal or other body or authority in Hong Kong or
  elsewhere (including any fine, penalty, surcharge or interest in relation
  thereto);</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=132 valign=top>&nbsp;</td>
  <td width=744 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;US$&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>United States dollars;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=132 valign=top>&nbsp;</td>
  <td width=744 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&#147;United States&#148;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>United States of America;</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=132 valign=top>&nbsp;</td>
  <td width=744 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=235 valign=top><b><font size=2>&quot;Warranties&quot;</font></b></td>
  <td width=876 colspan=2 valign=top><font size=2>the representations, warranties and
  undertakings contained or referred to in Clause 6.</font></td>
 </tr>
 <tr>
  <td width=235 valign=top>&nbsp;</td>
  <td width=132 valign=top>&nbsp;</td>
  <td width=744 valign=top>&nbsp;</td>
 </tr>
</table>

<p><font size=2>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=62 valign=top><b><font size=2>1.3</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>References in this Agreement to ordinances and
  to statutory provisions shall be construed as references to those ordinances
  or statutory provisions as respectively as modified (on or before the date
  hereof) or re&#150;enacted (whether before or after the date hereof) from
  time to time and to any orders, regulations, instruments or subordinate
  legislation made under the relevant ordinances or provisions thereof and
  shall include references to any repealed ordinance or provisions thereof
  which has been so re&#150;enacted (with or without modifications).</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=1049 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>1.4</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>The headings are for convenience only and
  shall not affect the construction of this Agreement.</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=1049 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>1.5</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>All representations, undertakings, warranties,
  indemnities, covenants, agreements and obligations given or entered into by
  more than one person are given or entered into jointly and severally.</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=525 valign=top>&nbsp;</td>
  <td width=523 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>1.6</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>Any document referred to herein as being
  &quot;in the agreed terms&quot; shall be in a form already agreed between the
  Solicitors acting for the parties hereto.</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=525 valign=top>&nbsp;</td>
  <td width=523 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>1.7</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>Except where the context otherwise requires
  words denoting the singular include the plural and vice versa; words denoting
  any one gender include all genders; words denoting persons include
  incorporations and firms and vice versa.</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=525 valign=top>&nbsp;</td>
  <td width=523 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>1.8</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>Reference to clauses, sub&#150;clauses,
  paragraphs and schedules are (unless the context requires otherwise) to
  clauses, sub&#150;clauses, paragraphs and schedules of this Agreement.</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=525 valign=top>&nbsp;</td>
  <td width=523 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>1.9</font></b></td>
  <td width=1049 colspan=2 valign=top><font size=2>The expressions &quot;the Vendor&quot;, the
  &#147;Company&#148; and &#147;the Purchaser&#148; shall unless the context requires otherwise
  shall include their successors, personal representatives and permitted
  assigns.</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=62 valign=top><b><font size=2>2A.</font></b></td>
  <td width=1049 colspan=3 valign=top><b><font size=2>FORMATION OF JOINT VENTURE AND STRUCTURE</font></b></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=525 colspan=2 valign=top>&nbsp;</td>
  <td width=523 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>2A.1</font></b></td>
  <td width=1049 colspan=3 valign=top><font size=2>The Vendor hereby agrees that it shall within
  45 days from the date hereof (&#147;<b>45 Day Period</b>&#148;) use its best endeavors to
  procure the formation of the Joint Venture under the Holley JV Structure
  (such formation and structure is subject at all times to the approval in
  writing of the Purchaser in its sole discretion) and such that the Purchaser
  shall be able to, on Completion, directly purchase, own and hold 51% of the
  entire legal and beneficial interest of and in the Joint Venture in
  accordance with the terms of this Agreement.&nbsp;
  Such 51% equity interest of and in the Joint Venture shall be the
  subject of the Sale Shares of this Agreement to be sold by Vendor to the
  Purchaser free from all Encumbrances;</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=525 colspan=2 valign=top>&nbsp;</td>
  <td width=523 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>2A.2</font></b></td>
  <td width=1049 colspan=3 valign=top><font size=2>In the event that Vendor is unable to procure
  the formation of the Joint Venture under the Holley JV Structure either
  within the 45 Day Period or with the approval of the Purchaser such that the
  Purchaser shall be able to, on Completion, directly purchase, own and hold
  51% of the entire legal and beneficial interest of and in the Joint Venture,
  then the Vendor agrees that it shall on the expiry of the 45 Day Period or
  disapproval by the Purchaser in writing (whichever is earlier) :-</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=62 valign=top>&nbsp;</td>
  <td width=987 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(a)</font></td>
  <td width=987 colspan=2 valign=top><font size=2>Within 5 days immediately after the 45 Day
  Period shall and/or shall procure to be incorporated the Company in order to
  facilitate the formation of the Joint Venture in accordance with the BVI JV
  Structure;</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(b)</font></td>
  <td width=987 colspan=2 valign=top><font size=2>The primary
  objective of the Company and its Subsidiaries is to carry on the business of
  holding the Sale Shares and participate in the management and affairs of the
  Joint Venture.</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(c)</font></td>
  <td width=987 colspan=2 valign=top><font size=2>The Vendor shall procure that the Company
  shall have an authorized share capital of US$100,000 divided into 10,000,000
  ordinary shares of [US$0.01] each;</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(d)</font></td>
  <td width=987 colspan=2 valign=top><font size=2>The Vendor shall be the first and only
  shareholders and directors of the Company holding one (1) share to be fully
  paid up which shall represent the entire issued share capital of the Company
  on a fully diluted basis before and after Completion;</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(e)</font></td>
  <td width=987 colspan=2 valign=top><font size=2>The terms and conditions of the Company&#146;s
  memorandum and articles of association shall be those as agreed to and
  approved by the Purchaser in writing;</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(f)</font></td>
  <td width=987 colspan=2 valign=top><font size=2>All costs and expenses (including legal costs)
  in respect of the formation and incorporation of the Company shall be borne
  by the Vendor absolutely.</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=62 valign=top>&nbsp;</td>
  <td width=987 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>2A.3</font></b></td>
  <td width=1049 colspan=3 valign=top><font size=2>In the event that Holley JV Structure is not
  agreed upon or adopted to be used by the Purchaser within the 45 Day Period
  to facilitate the Sale and Purchase contemplated herein this Agreement, then
  the BVI JV Structure shall be deemed to be the agreed structure to be used by
  the parties to the facilitate the Joint Venture and sale of the 51% equity
  interest in the Joint Venture to the Purchaser.&nbsp; The entire issued share capital of and in the Company
  representing the 51% beneficial and legal ownership in the Joint Venture shall
  be the subject of the Sale Shares to be sold to and purchased by the
  Purchaser from the Vendor herein.</font></td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=1049 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>2.</font></b></td>
  <td width=525 colspan=2 valign=top><a name=SaleOfShares><b><font size=2>SALE OF SHARES</font></b></a></td>
  <td width=523 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top>&nbsp;</td>
  <td width=525 colspan=2 valign=top>&nbsp;</td>
  <td width=523 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=62 valign=top><b><font size=2>2.1</font></b></td>
  <td width=1049 colspan=3 valign=top><font size=2>Subject to the
  fulfilment of all the conditions in <u>Clause 4.1</u>, the Vendor shall sell
  as beneficial owner and the Purchaser shall purchase the Sale Shares free
  from all liens, charges and encumbrances and together with all rights now or
  hereafter attaching thereto including all dividends and distributions
  declared, made or paid on or after the date of this Agreement in respect of
  the Sale Shares.</font></td>
 </tr>

<!-- DO NOT remove the following table row. It is needed for  .               the proper rendering of tables containing misaligned cells.-->
 <tr height=0>
  <td width=41></td>
  <td width=41></td>
  <td width=300></td>
  <td width=339></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=42 colspan=3 valign=top><b><font size=2>2.2</font></b></td>
  <td width=643 colspan=12 valign=top><font size=2>The Vendor hereby waives and agrees to procure
  before Completion the irrevocable waiver of pre&#150;emption rights and any
  other restrictions whatsoever on the transfer or issue which may exist in
  relation to the Sale Shares howsoever derived.</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=330 colspan=8 valign=top>&nbsp;</td>
  <td width=313 colspan=4 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top><b><font size=2>3.</font></b></td>
  <td width=643 colspan=12 valign=top><a name=Consideration><b><font size=2>CONSIDERATION</font></b></a></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=330 colspan=8 valign=top>&nbsp;</td>
  <td width=313 colspan=4 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top><b><font size=2>3.1</font></b></td>
  <td width=643 colspan=12 valign=top><font size=2>The Consideration for the Sale Shares shall be
  satisfied by the Purchaser upon Completion by the Purchaser issuing and
  allotting to the Vendor the Consideration Shares.</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=330 colspan=8 valign=top>&nbsp;</td>
  <td width=313 colspan=4 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top><b><font size=2>4.</font></b></td>
  <td width=643 colspan=12 valign=top><a name=Conditions><b><font size=2>CONDITIONS</font></b></a></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=643 colspan=12 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top><b><font size=2>4.1</font></b></td>
  <td width=643 colspan=12 valign=top><font size=2>This Agreement is conditional upon:</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.1</font></td>
  <td width=593 colspan=7 valign=top><font size=2>the Purchaser being satisfied with the results
  of financial and legal due diligence review to be conducted by it on the
  Vendor Group, the Company (if applicable) and the Injected Business;</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.2</font></td>
  <td width=593 colspan=7 valign=top><font size=2>the receipt of the Vendor of all necessary
  consents, approvals and authorisations having been obtained from the
  applicable PRC approving state authorities (&#147;<b>Main Approving Authority</b>&#148;) and the State Administration for
  Industry and Commerce and any other approving authority, if necessary (&#147;<b>Other Approving Authorities</b>&#148;) in
  connection with the purchase of the Sale Shares by the Purchaser, the
  establishment and incorporation of the Joint Venture, the implementation of
  all transactions contemplated under the JV Agreement and the Extinguishment
  Agreement and all other matters incidental thereto and their certified copies
  having been provided to the Purchaser and which are all in form and substance
  satisfactory to the Purchaser;</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.3</font></td>
  <td width=593 colspan=7 valign=top><font size=2>the performance in full by the Vendor of its obligations
  contained in <u>Clause 6.2;</u></font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.4</font></td>
  <td width=593 colspan=7 valign=top><font size=2>the formation
  of the Joint Venture based on the Holley JV Structure which is in form and
  substance satisfactory to the Purchaser and as set out it Clause 2A.1 or
  formation of the Joint Venture in accordance with the BVI JV Structure which
  is in form and substance satisfactory to the Purchaser.</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.4A</font></td>
  <td width=593 colspan=7 valign=top><font size=2>If the BVI JV Structure is adopted in
  accordance with Clause 2A, the establishment and incorporation of the Company
  by the Vendor (to the satisfaction of the Purchaser) including the
  fulfillment of all those matters set out in Clause 2A.2.</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.5</font></td>
  <td width=593 colspan=7 valign=top><font size=2>the establishment and incorporation of the
  Joint Venture to the satisfaction (in writing) of the Purchaser, including
  the execution of following documents in the form and based on the terms and
  conditions that have been approved by and are satisfactory to the Purchaser
  and with approval of the directors of the Purchaser at a meeting of
  directors:</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top><font size=2>(a)</font></td>
  <td width=551 colspan=5 valign=top><font size=2>JV Agreement;</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top><font size=2>(b)</font></td>
  <td width=551 colspan=5 valign=top><font size=2>Articles of Association of the Joint Venture</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top><font size=2>(c)</font></td>
  <td width=551 colspan=5 valign=top><font size=2>Memorandum of Association of the Joint
  Venture;</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top><font size=2>(d)</font></td>
  <td width=551 colspan=5 valign=top><font size=2>Extinguishment Agreement</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.6</font></td>
  <td width=593 colspan=7 valign=top><font size=2>save for those matters required to be
  performed by the parties at Completion, all steps and actions required to be
  taken by the Vendor to give effect to the purchase of the Sale Shares by the
  Purchaser and the transfer of the business of the Vendor to the Joint Venture
  in accordance with the JV Agreement and the Extinguishment Agreement having
  been completed;</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.7</font></td>
  <td width=593 colspan=7 valign=top><font size=2>the Purchaser
  having received :-</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top><font size=2>(a)</font></td>
  <td width=551 colspan=5 valign=top><font size=2>a legal opinion
  from a legal adviser in the PRC acceptable and satisfactory to the Purchaser
  confirming, inter alia, (i) the legality, validity and enforceability of the
  JV Agreement, the Extinguishment Agreement, the Employment Agreements, the
  PACT-Holley Agreements (as defined below and to be entered into by the Vendor
  pursuant to Clause 7), Supply of Goods and Services Agreement, and any other
  agreements to be entered into by any of the Vendor or the Joint Venture
  pursuant to or as contemplated under this Agreement; (ii)&nbsp; that the Sale Shares can be transferred to
  and owned by the Purchaser in the manner contemplated herein; (iii) the
  consents, approvals and authorisations referred to in <u>Clause [4.1.2]</u>
  and the matters referred to in <u>Clause [4.1.4] </u>having been obtained,
  performed and completed; and</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=551 colspan=5 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top><font size=2>(b)</font></td>
  <td width=551 colspan=5 valign=top><font size=2>a legal opinion
  (in form and substance satisfactory to it from a legal adviser in each of the
  jurisdictions the Company (if applicable) and the Vendor are incorporated
  confirming, inter alia (i) the legality, validity and enforceability of this
  Agreement and the transactions contemplated herein in its jurisdiction of
  incorporation and (ii) that the Company and the Vendor (as applicable) are
  validly existing and duly incorporated and are of good standing in its
  jurisdiction of incorporation.</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=551 colspan=5 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.8</font></td>
  <td width=593 colspan=7 valign=top><font size=2>the Vendor
  having duly executed, delivered and exchanged (or procured to be executed,
  delivered and exchanged) the following agreements:-</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=593 colspan=7 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top><font size=2>(a)</font></td>
  <td width=551 colspan=5 valign=top><font size=2>The Employment
  Agreement (in such form and upon such terms mutually agreed upon by the
  Purchaser and Vendor) duly executed by the Joint Venture and each of the Key
  Employees;</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top><font size=2>(b)</font></td>
  <td width=551 colspan=5 valign=top><font size=2>The Supply of
  Goods and Services Agreement (in such form and upon such terms mutually
  agreed upon by the Purchaser and Vendor) duly executed by the Vendor and the
  Joint Venture; and</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top><font size=2>(c)</font></td>
  <td width=551 colspan=5 valign=top><font size=2>The Escrow
  Agreement (in such form and upon such terms mutually agreed upon by the
  Escrow Agent, the Purchaser and Vendor) duly executed by the Escrow Agent,
  the Purchaser and the Vendor.</font></td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=551 colspan=5 valign=top>&nbsp;</td>
  <td   width=36>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.9</font></td>
  <td width=630 colspan=8 valign=top><font size=2>The Vendor
  having obtained certification from the Auditors stating that proforma
  financial results of the Joint Venture as set out in Section A(2) (a) (2) of
  the Agreement in Principle dated 11th June 2001 and signed between </font><font   size=2>the Purchaser</font><font   size=2> and the Vendor are suitable and appropriate for inclusion in a Form
  8K filing of </font><font size=2>the
  Purchaser</font><font size=2> with the Securities and Exchange Commission in the
  United States;</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.10</font></td>
  <td width=630 colspan=8 valign=top><font size=2>The Vendor
  having made reasonable efforts to duly directly or indirectly transfer and
  assign the </font><font size=2>Government
  Contracts and Recognition and Operational Contracts (the &#147;<b>Holley Assignments</b>&#148;) </font><font   size=2>to the Joint Venture and obtained all necessary licenses and approvals
  from all relevant authorities in the PRC and in accordance with all PRC rules,
  regulations and laws;</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.11</font></td>
  <td width=630 colspan=8 valign=top><font size=2>All necessary consents, approvals and
  authorisations having been obtained from all applicable authorities in the
  PRC by the Vendor in respect of the establishment and incorporation of the
  Joint Venture and the operation of its business and the Company or the
  Purchaser (as the case may be) becoming the foreign investor in the Joint
  Venture;</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.12</font></td>
  <td width=630 colspan=8 valign=top><font size=2>The Vendor having undertaken in writing to the
  Company (such written undertaking to be in form and substance satisfactory to
  the Purchaser) that it will bear and indemnify the Company and the Joint
  Venture against all losses, damages, claims and liabilities suffered or
  incurred by each or either of them which arises, whether directly or
  indirectly, from any breach or non-compliance by the Joint Venture or the
  Vendor of any applicable laws, rules, regulations, orders, directives or
  policies (whether having the force of law or otherwise) prior to the Company
  effectively acquiring a fifty one per cent (51%) equity interest in the Joint
  Venture (including without limitation any breach or non-compliance in
  connection with the establishment of the Joint Venture, the operation of its
  business and any transfer of interests in the Joint Venture by any existing
  or former shareholders of the Joint Venture);</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.13</font></td>
  <td width=630 colspan=8 valign=top><font size=2>evidence satisfactory to the Purchaser having
  been provided to it showing that the Company or the party owning the Sale
  Shares (as the case may be) and all other shareholders of the Joint Venture
  have made capital contributions to the Joint Venture in the manner provided
  by its Memorandum of Association and Article of Association or by any
  certificates, licenses, consents or permits granted to the Joint Venture in
  respect of its establishment and/or operation;</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.14</font></td>
  <td width=630 colspan=8 valign=top><font size=2>such documents and other evidence as the
  Purchaser may request having been provided to it showing that the Joint
  Venture is legally and properly established and in existence and that the
  Company has effectively acquired a 51 per cent equity interest in the Joint
  Venture in accordance with all applicable laws, rules and regulations;</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.15</font></td>
  <td width=630 colspan=8 valign=top><font size=2>the parties hereby agree that the Vendor shall
  give warranties and representations (in addition to those Warranties set out
  in Clause 6) to the Purchaser concerning the state, affairs, business and
  matters of each of the Vendor, Company (if applicable), Joint Venture.&nbsp; In this regard, it shall be a condition
  precedent to Completion that the Vendor shall make such warranties and
  representations in writing to the Purchaser in form and substance mutually
  acceptable to the Vendor and Purchaser concerning the state, affairs,
  business and matters of each of the Vendor, Company (if applicable), Joint
  Venture as at Completion and deliver the same, duly executed, to the Purchaser.</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.16</font></td>
  <td width=630 colspan=8 valign=top><font size=2>save for Completion, all steps and actions
  required to be taken by the parties hereto and the Company (if applicable) to
  give effect to the sale and purchase of the Sale Shares hereunder and all
  other transactions contemplated hereunder having been taken and completed;</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.17</font></td>
  <td width=630 colspan=8 valign=top><font size=2>if required, the relevant stock exchange,
  government and securities authority and regulator in the United States
  granting listing of and permission to issue and allot the Consideration
  Shares (including the escrow arrangement as stated in Clause 7) which fall to
  be issued in accordance with the terms herein;</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.18</font></td>
  <td width=630 colspan=8 valign=top><font size=2>if required, the shareholders of the Purchaser
  at a meeting of members approving this Agreement, the purchase of the Sale
  Shares, creating and giving authority for the issue of the Consideration
  Shares to the Vendor, the implementation of the transactions contemplated
  hereunder and all other matters incidental hereto in accordance with the
  provisions of the Purchaser&#146;s articles of association and&nbsp; by-laws and such rules, regulations and
  laws in force from time to time in the United States and which apply to the
  Purchaser;</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.19</font></td>
  <td width=630 colspan=8 valign=top><font size=2>if required, a resolution at a meeting of
  Directors of the Purchaser approving this Agreement,&nbsp; the PACT Assignments, the purchase of the
  Sale Shares, creating and giving authority for the issue of the Consideration
  Shares to the Vendor, the implementation of the transactions contemplated
  hereunder and all other matters incidental hereto in accordance with the
  provisions of its articles of association and&nbsp; by-laws and such rules, regulations and laws in force from time
  to time in the United States and which apply to the Purchaser;</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>4.1.20</font></td>
  <td width=630 colspan=8 valign=top><font size=2>all other matters as may be reasonably
  required or may be deemed reasonably necessary by the Purchaser and/or the
  Vendor (as the case may be) in order to complete all of the transactions
  contemplated herein this Agreement.</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top><b><font size=2>4.2</font></b></td>
  <td width=679 colspan=13 valign=top><font size=2>The Vendor and the Purchaser shall use their
  respective endeavors to ensure that the conditions set out in Clause 4.1
  shall be fulfilled by the date set out in Clause 4.3.&nbsp; The Purchaser may in its sole and absolute
  discretion, waive any of the conditions set out in Clauses 4.1.1 to 4.1.16
  prior to Completion.</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=679 colspan=13 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top><b><font size=2>4.3</font></b></td>
  <td width=679 colspan=13 valign=top><font size=2>If the Vendor is unable to comply with and
  fulfill any of the conditions set out in Clauses 4.1.2 to 4.1.16 and 4.1.20
  (save for the event of termination by either party pursuant to Clause 4.4
  below) or has failed to procure, provide, execute, deliver or perform such
  documents, acts or deeds it is obligated to perform in Clauses 4.1.2 to
  4.1.16 and 4.1.20 (save for the event of termination by either party pursuant
  to Clause 4.4 below) to the full satisfaction of the Purchaser and with the
  approval of the directors of the Purchaser at a meeting of directors on or
  before <u>30<sup>th</sup> October 2001</u> (&#147;<b>Conditions Precedent Date</b>&#148;),
  the Purchaser may in its sole discretion:</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>(a)</font></td>
  <td width=630 colspan=8 valign=top><font size=2>defer the
  Conditions Precedent Date and Completion Date to a date not later than
  November 30, 2001 (and so that the provisions of this <u>Clause 4</u> shall
  apply to fulfilment of the Conditions as so deferred and the Completion and
  Completion Date as set out in Clause 5 shall be deferred accordingly); or</font></td>
 </tr>
 <tr>
  <td   width=0>&nbsp;</td>
  <td width=42 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>(b)</font></td>
  <td width=630 colspan=8 valign=top><font size=2>proceed to
  Completion so far as practicable but without prejudice to the rights of the
  Purchaser; or</font></td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>(c)</font></td>
  <td width=630 colspan=8 valign=top><font size=2>rescind this
  Agreement, without prejudice to any rights the Purchaser may have in respect
  of the Vendor&#146;s non-compliance or non-fulfilment of the conditions set out in
  </font><font size=2>Clause 4.1</font><font   size=2>.</font></td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=630 colspan=8 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=679 colspan=13 valign=top><font size=2>In the event
  that this Agreement is rescinded by the Purchaser pursuant to Clause 4.3 (c)
  above, then the Vendor shall pay to the Purchaser the sum of US$500,000
  immediately upon rescission by the Purchaser thereafter payment neither party
  shall have any claim against or liability to the other party. The Vendor and
  Purchaser agree that the payment to the Purchaser for the sum of US$500,000
  shall be waived in the event that the conditions outlined in Clause 4.1.2 and
  Clause 4.1.11 respectively are not fulfilled by the Vendor.</font></td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=679 colspan=13 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top><b><font size=2>4.3A</font></b></td>
  <td width=679 colspan=13 valign=top><font size=2>If the Purchaser is unable to comply with and
  fulfill any of the conditions set out in Clauses 4.1.17 to 4.1.20 (save for
  the default or cause of the Vendor or event of termination by either party
  pursuant to Clause 4.4 below) or has failed to procure, provide, execute,
  deliver or perform such documents, acts or deeds it is obligated to perform
  in Clauses 4.1.17 to 4.1.20 (save for the default or cause of the Vendor) on
  or before the Conditions Precedent Date, the Vendor may in its sole
  discretion:</font></td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=48 colspan=4 valign=top>&nbsp;</td>
  <td width=631 colspan=9 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=48 colspan=4 valign=top><font size=2>(a)</font></td>
  <td width=631 colspan=9 valign=top><font size=2>defer the
  Conditions Precedent Date and Completion Date to a date not later than
  November 30, 2001 (and so that the provisions of this <u>Clause 4</u> shall
  apply to fulfilment of the Conditions as so deferred and the Completion and
  Completion Date as set out in Clause 5 shall be deferred accordingly); or</font></td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=48 colspan=4 valign=top>&nbsp;</td>
  <td width=631 colspan=9 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=48 colspan=4 valign=top><font size=2>(b)</font></td>
  <td width=631 colspan=9 valign=top><font size=2>proceed to
  Completion so far as practicable but without prejudice to the rights of the
  Vendor; or</font></td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=48 colspan=4 valign=top>&nbsp;</td>
  <td width=631 colspan=9 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=48 colspan=4 valign=top><font size=2>(c)</font></td>
  <td width=631 colspan=9 valign=top><font size=2>rescind this
  Agreement, without prejudice to any rights the Vendor may have in respect of
  the Purchaser&#146;s non-compliance or non-fulfilment of the conditions set out in
  </font><font size=2>Clause 4.1</font><font   size=2>.</font></td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=48 colspan=4 valign=top>&nbsp;</td>
  <td width=631 colspan=9 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=679 colspan=13 valign=top><font size=2>In the event
  that this Agreement is rescinded by the Vendor pursuant to Clause 4.3A(c)
  above, then the Purchaser shall pay to the Vendor the sum of US$500,000
  immediately upon rescission by the Vendor and thereafter payment neither
  party shall have any claim against or liability to the other party.</font></td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=339 colspan=9 valign=top>&nbsp;</td>
  <td width=340 colspan=4 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top><b><font size=2>4.4</font></b></td>
  <td width=679 colspan=13 valign=top><font size=2>The parties hereto agree that this Agreement
  may be terminated at any time (by written notice served on the other party)
  on or before <b>30<sup>th </sup>October 2001</b> (with immediate effect and
  thereafter no party to this Agreement shall have any claim against or
  liability to the other party save in respect of any antecedent breaches of
  this Agreement and subject to the payment of such amounts to such party as
  set out below) by either the Vendor or the Purchaser upon the resolution of
  the board of directors at a meeting of directors of either the Vendor or the
  Purchaser (as the case may be).&nbsp; It is
  acknowledged by the parties hereto that the matters set out in this Agreement
  leading up to Completion, including those set out in Clause 4.1 shall incur a
  considerable amount of time, costs and expenses on the part of both parties
  and in this regard it is hereby further agreed by all parties hereto that :-</font></td>
 </tr>
 <tr>
  <td width=42 colspan=3 valign=top>&nbsp;</td>
  <td width=679 colspan=13 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>(i)</font></td>
  <td width=631 colspan=9 valign=top><font size=2>in the event that this Agreement is terminated
  by the board of directors at a meeting of directors of the Purchaser or the
  Vendor (as the case may be), following the approval of this Agreement by the
  board of the Purchaser and by the board of the Vendor, but prior to the
  voting of this Agreement&nbsp; by the
  shareholders of the Purchaser and/or the shareholders of the Vendor on or
  before 30<sup>th</sup> October 2001 (if required), then the terminating party
  shall pay to the other party the sum of US$250,000 within three days of a
  termination notice being served on the other party;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=631 colspan=9 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>(ii)</font></td>
  <td width=631 colspan=9 valign=top><font size=2>In the event the shareholders at a meeting of
  shareholders (if required) of the Purchaser or the Vendor (as the case may
  be) do not approve this Agreement and the transactions contemplated herein,
  the first party whose shareholders at a meeting of shareholders (if required)
  has failed to obtain the relevant approval shall pay to the other party sum
  of US$250,000 within three days of the relevant shareholders meeting.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=631 colspan=9 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top><font size=2>(iii)</font></td>
  <td width=631 colspan=9 valign=top><font size=2>in the event that this Agreement is terminated
  by the board of directors at a meeting of directors of the Purchaser or the
  Vendor (as the case may be), following the approval of this Agreement by the
  board of the Purchaser, and after the approval of this Agreement&nbsp; by the shareholders of&nbsp; the Purchaser on or before 30<sup>th</sup>
  October 2001 (if required), then the terminating party shall pay to the other
  party the sum of US$500,000 within three days of a termination notice being
  served on the other party.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=49 colspan=5 valign=top>&nbsp;</td>
  <td width=631 colspan=9 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top><font size=2>For the purpose of guaranteeing the payment of
  the damages referred to in Clause 4.3 and 5.4 (if any) or break-up fees by
  the Vendor to the Purchaser (if any) as set out above, the Vendor hereby
  agrees to procure that its Subsidiary, Holley Holding (U.S.A.) Ltd&nbsp; (&#147;<b>China Holley USA</b>&#148;), a company
  incorporated in California with registered office address at 131 South Maple
  Avenue, Unit 6, South San Francisco, CA 94080, shall within 3 business days
  from the date of this Agreement, duly execute and deliver a deed of guarantee
  (in form and substance acceptable to the Purchaser) of payment for the
  fulfillment and payment of the amounts set out in and in accordance with this
  Clauses 4.4, 4.3 or 5.4 in favor of the Purchaser and shall procure that China
  Holley USA shall maintain a minimum balance of US$500,000 in a bank account
  in the United States and send such details of bank account and bank
  statements to the Purchaser immediately upon request.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=340 colspan=10 valign=top>&nbsp;</td>
  <td width=340 colspan=4 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>4.5</font></b></td>
  <td width=680 colspan=14 valign=top><font size=2>The Vendor and the Company undertakes to disclose
  in writing to the Purchaser anything which will or may prevent any of the
  conditions from being satisfied at or prior to Completion, as applicable,
  immediately upon the Vendor and/or the Company becoming aware of such a
  situation.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=340 colspan=10 valign=top>&nbsp;</td>
  <td width=340 colspan=4 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>4.6</font></b></td>
  <td width=680 colspan=14 valign=top><font size=2>Until Completion, the Vendor and the Company
  shall procure that the Purchaser, its agents and representatives are given
  reasonable access to such documents relating to the Joint Venture, the
  Injected Business, the Vendor Group, the Company and the Subsidiaries, as the
  Purchaser shall request.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><page>
<b><font size=2>5.</font></b></td>
  <td width=680 colspan=14 valign=top><a name=Completion><b><font size=2>COMPLETION</font></b></a></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=341 colspan=11 valign=top>&nbsp;</td>
  <td width=339 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>5.1</font></b></td>
  <td width=680 colspan=14 valign=top><font size=2>Subject to the terms of this Agreement,
  Completion shall take place pursuant to this clause at such place and
  location to be mutually agreed upon by the Purchaser and the Vendor </font><font   size=2>on or before the 31<sup>st</sup> October 2001 or such later date as
  may be stipulated in accordance with Clause 4.3 (a) or 4.3A (a), as the case
  may be (<b>&#147;the
  Completion Date&#148;</b>).&nbsp; The
  parties shall agree on the place and location where Completion shall take
  place on or before 31<sup>st</sup> October 2001 and failing such agreement
  then the place and location where Completion shall take place shall be in
  Hong Kong at the office of the Purchaser&#146;s Solicitors.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=341 colspan=11 valign=top>&nbsp;</td>
  <td width=339 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>5.2</font></b></td>
  <td width=680 colspan=14 valign=top><font size=2>On Completion the Vendor shall:</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top><b><font size=2>(a)</font></b></td>
  <td width=633 colspan=10 valign=top><font size=2>cause to be delivered to the Purchaser:</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=633 colspan=10 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(i)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if the same
  shall not have been provided prior to Completion, certified copies of all
  consents, approvals and authorisations referred to in <u>Clause 4.1.</u> and
  such other documents and evidence showing the fulfilment of the conditions by
  the Vendor of the applicable conditions set out in <u>Clause 4.1 </u>;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=633 colspan=10 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(ii)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if the same
  shall not have been provided prior to Completion, certified copies of the
  documents referred to in Clauses 4.1;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=633 colspan=10 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(iii)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if the same
  shall not have been provided prior to Completion, certified copies of the
  business licence of the Joint Venture the JV Agreement (in its final form as
  approved by the Main Approving Authority) duly executed by the Company and
  the Vendor and the final version of the Memorandum of Association and
  Articles of Association of the Joint Venture (in the agreed terms and in its
  final form duly approved by the Main Approving Authority) of the Joint
  Venture;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=633 colspan=10 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(iv)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if the same
  shall not have been provided prior to Completion, certified copies of all
  necessary resolutions of the board of directors and the shareholders of the
  Vendor approving the signing of the JV Agreement&nbsp; and the Extinguishment Agreement, all other documents required
  by the Main Approving Authority and all those other agreements set out in
  Clause 4.1;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top>&nbsp;</td>
  <td width=598 colspan=7 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(v)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if required and
  if applicable, the original Certificate of Good Standing of the Company and
  the consent letter (if applicable) issued by the Vendor to the BVI agent for
  release of information to the Purchaser and the registration of the Sale
  Shares in favour of the Purchaser together with the duly executed
  instrument(s) of transfer of the Sale Shares by the registered holder(s)
  thereof in favour of the Purchaser or as it may direct together with the
  relative certificates;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top>&nbsp;</td>
  <td width=598 colspan=7 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(vi)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if required and
  if this transaction is on the basis of the Holley JV Structure, the duly
  executed instrument(s) of transfer of the Sale Shares by the registered
  holder(s) thereof in favour of the Purchaser or as it may direct together
  with the relative certificates together within any other documents or deeds
  which shall prove and render the Purchaser the lawful legal and beneficial
  owner of 51% of the entire equitable interest of and in the Joint Venture;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top>&nbsp;</td>
  <td width=598 colspan=7 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(vii)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if applicable,
  resolutions of the board of directors of the Company approving the transfer
  of the Sale Shares by the Vendor to the Purchaser or as it may direct;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top>&nbsp;</td>
  <td width=598 colspan=7 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(viii)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>such other documents as may be reasonably
  required to give to the Purchaser good title to the Sale Shares free from all
  claims, liens, charges, equities and encumbrances and third party rights of
  any kind and to enable the Purchaser (or as it may nominate) to become the
  registered holder thereof;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top>&nbsp;</td>
  <td width=598 colspan=7 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(ix)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if applicable,
  all statutory and other books and records (including financial records) duly
  written up to date of the Company and its certificate of incorporation,
  common seal and any other papers, records and documents of the Company;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top>&nbsp;</td>
  <td width=598 colspan=7 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(x)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>the Completion
  Accounts;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=633 colspan=10 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(xi)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if applicable,
  a certified copy of the resignation of all existing directors of the Company;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=633 colspan=10 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=34 colspan=3 valign=top><font size=2>(xii)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>The certificate referred to in Clause 4.1.9.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=633 colspan=10 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top><b><font size=2>(b)</font></b></td>
  <td width=633 colspan=10 valign=top><font size=2>if requested by
  the Purchaser, cause such person(s) as the Purchaser may nominate to be
  validly appointed as additional directors of the Company and cause the
  existing directors of the Company to resign with effect from the Completion
  Date.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=47 colspan=4 valign=top>&nbsp;</td>
  <td width=633 colspan=10 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>5.3</font></b></td>
  <td width=680 colspan=14 valign=top><font size=2>On Completion
  and subject to the simultaneous performance of the obligations of the Vendor
  contained in <u>Clause 5.2</u>, the Purchaser shall cause to be delivered to
  the Escrow Agent </font><font size=2>the
  certificate(s) for such number of Consideration Shares issued&nbsp; and credited as fully paid, such shares
  upon issue to rank pari passu (save and subject to any restrictions on sale
  and transfer of the Consideration Shares by the Purchaser as well as those
  restrictions set out in Clause 7 hereof) with the existing Consideration
  Shares registered in the name of the Vendor or Holley Holding (U.S.A.) Ltd<b>.</b></font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=341 colspan=11 valign=top>&nbsp;</td>
  <td width=339 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top><font size=2>In addition, Purchaser should deliver to
  Vendor:</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>a)</font></td>
  <td width=639 colspan=11 valign=top><font size=2>certified copy of Board resolution approving
  this agreement and the issue and allotment of consideration shares and
  certified copy of share holders resolution certified by any director of the
  Purchaser ,</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>b)</font></td>
  <td width=639 colspan=11 valign=top><font size=2>certified copy of the receipt of the escrow
  agent of the consideration shares pursuant to this clause 5.3, and ,</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>c)</font></td>
  <td width=639 colspan=11 valign=top><font size=2>certified copy of Board resolution approving
  the appointment of the three directors named by the Vendor as directors of
  the Board of Purchaser. The total number of directors of the Purchaser as
  outlined in the by laws is 9.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>d) </font></td>
  <td width=639 colspan=11 valign=top><font size=2>If required, the Purchaser should deliver to
  the Vendor certified copy of approvals of the&nbsp; relevant stock exchange, government and securities authority
  and regulator in the United States granting listing of and permission to
  issue and allot the Consideration Shares.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>5.4</font></b></td>
  <td width=680 colspan=14 valign=top><font size=2>If any party
  hereto shall be unable to comply with any of its obligations under this <u>Clause
  5</u> on the Completion Date, the party not in default may :-</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>(a)</font></td>
  <td width=639 colspan=11 valign=top><font size=2>defer
  Completion to a date not more than 28 days after the Completion Date (and so
  that the provisions of this <u>Clause 5</u> shall apply to Completion as so
  deferred); or</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>(b)</font></td>
  <td width=639 colspan=11 valign=top><font size=2>proceed to
  Completion so far as practicable but without prejudice to the rights of the
  non-defaulting party; or</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>(c)</font></td>
  <td width=639 colspan=11 valign=top><font size=2>rescind this
  Agreement, without prejudice to any rights the non-defaulting party may have
  in respect of such default.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top><font size=2>In the event
  that this Agreement is rescinded pursuant to Clause 5.4(c), then the
  defaulting party shall (in addition and without prejudice to any other rights
  or claims for damages the non-defaulting may have against the defaulting
  party) pay to the non-defaulting party the sum of US$500,000 immediately upon
  rescission by the non-defaulting party</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>6.</font></b></td>
  <td width=680 colspan=14 valign=top><a name=Representations><b><font   size=2>REPRESENTATIONS</font></b></a><b><font size=2>, WARRANTIES AND
  UNDERTAKINGS</font></b></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>6.1</font></b></td>
  <td width=680 colspan=14 valign=top><b><font size=2>Representations,
  Warranties and Undertakings of Both the Vendor and&nbsp; Purchaser</font></b></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.1.1.</font></td>
  <td width=639 colspan=11 valign=top><font size=2>Each of the
  Warranties shall be deemed repeated by the Vendor and Purchaser&nbsp;&nbsp; during the period from the date of this
  Agreement up to and including the day of Completion with reference to the
  facts and circumstances then subsisting.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.1.2.</font></td>
  <td width=639 colspan=11 valign=top><font size=2>Each of the
  Warranties is without prejudice to any other Warranty and, except where
  expressly stated otherwise, no provision contained in this Agreement shall
  govern or limit the extent or application of any other provision.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.1.3.</font></td>
  <td width=639 colspan=11 valign=top><font size=2>The Warranties
  shall survive Completion insofar as the same are not fully performed on
  Completion.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.1.4.</font></td>
  <td width=639 colspan=11 valign=top><font size=2>The Vendor and
  the Purchaser hereby undertake to </font><font size=2>indemnify and keep indemnified the other party
  against any loss or liability suffered by the as a result of or in connection
  with any breach of any of the Warranties and against any costs and expenses
  incurred in connection therewith provided that the indemnity contained in
  this Clause shall be without prejudice to any other rights and remedies of
  either party&nbsp; in relation to any such
  breach.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>6.2</font></b></td>
  <td width=680 colspan=14 valign=top><b><font size=2>Representations,
  Warranties and Undertakings of the Vendor:</font></b></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.2.1</font></td>
  <td width=639 colspan=11 valign=top><font size=2>The Vendor
  hereby warrants and represents that:</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(a)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>it has the full power, authority and legal
  right to enter into this Agreement and this Agreement constitutes binding
  obligations on it in accordance with its terms;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(b)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>the execution and delivery of this Agreement
  and the consummation of transactions contemplated hereby will not result in
  the breach and/or cancellation and/or termination of any of the terms or
  conditions of or constitute a default under any agreement, commitment or
  other instrument to which it is a party or by which it or its property&nbsp; or assets may be bound or affected or
  violate any law or any rule or regulation of any administrative agency or
  governmental body or any court order, writ, injunction or decree of any court,
  administrative agency or governmental body affecting it; and</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top>&nbsp;</td>
  <td width=598 colspan=7 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(c)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>there has been no material adverse change in
  the assets, as a whole, or the business, prospects, financial condition or
  result of operations of the Vendor since its last date of audited financial
  statement. For the purpose of this Clause 6.2, &#147;material adverse change&#148;
  shall mean (i) a reduction in cash balance to less than US$5,000,000; or (ii)
  reduction in Net Revenue (for the last 12 months) to less than US$5,000,000</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.2.2</font></td>
  <td width=639 colspan=11 valign=top><font size=2>The Vendor
  hereby warrants, represent and undertakes that it shall procure that, except
  with the prior consent in writing of the Purchaser, the following events and
  matters will not occur, at any time between the date of this Agreement and
  Completion, or if this Agreement is rescinded or terminated earlier, the day
  of termination:-</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(a)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if applicable,
  that the Company will not issue or transfer or agree to issue and allot or
  transfer any securities in respect of any equity (inter alia, the issued and
  unissued shares) or loan capital of the Company or grant any option over or
  right to acquire any equity or loan capital of the Company or increase the
  registered capital of the Company;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(b)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>the Joint
  Venture and the Company (if applicable) will not borrow or otherwise raise
  money or incur any indebtedness or create any security over any of its assets
  and properties;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(c)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>the Joint
  Venture and the Company (if applicable) will not enter into any contract or
  incur any capital commitment, expenditure or contingent liability other than
  as contemplated under the JV Agreement and the Extinguishment Agreement;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(d)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>the Joint
  Venture and the Company (if applicable) will not enter into any other
  agreement with the Vendor or any third party or carry on any business,
  trading or other activities except as contemplated under this Agreement, the
  JV Agreement and the Extinguishment Agreement;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(e)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if applicable,
  propose at its own accord or vote on any resolution in general meeting of the
  Company other than resolutions relating to the business of an annual general
  meeting which is not special business;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(f)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if applicable,
  increase or authorise the increase of or undertake to increase the emoluments
  or benefits payable or granted to any director or employee of the Company
  with immediate, prospective or retrospective effect;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(g)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if applicable,
  appoint any directors of the Company other than the existing directors on the
  date of this Agreement;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top>&nbsp;</td>
  <td width=598 colspan=7 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(h)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if applicable,
  issue any dividends of the Company to any shareholders of the Company and/ or
  allow the Vendor to make any remittance of profits to its holders of equity
  or shares;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(i)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>if applicable,
  it will not sell, transfer, assign, charge, or otherwise dispose of any
  shares beneficially owned by him or any legal or beneficial interest in the
  Company (save for the sale of the Sale Shares pursuant to this Agreement)</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top>&nbsp;</td>
  <td width=598 colspan=7 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.2.3</font></td>
  <td width=639 colspan=11 valign=top><font size=2>The Vendor
  hereby warrants, represents and undertakes it shall procure that:-</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(a)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>at any time prior to Completion, the
  Purchaser, its agent and professional advisers are given, promptly on
  request, all such information regarding the business, assets, liabilities,
  contracts and affairs of the Vendor Group, the Company (if applicable) and
  the Injected Business and of the documents of title and other evidence of
  ownership of assets contemplated in this Agreement and the JV Agreement as
  the Purchaser may require; and</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(b)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>whether before
  or after Completion, </font><font size=2>the
  Purchaser, its agent and professional advisers are given, promptly on
  request, all such other information and documents (including without
  limitation any accounts of the Vendor Group, the Company and accounts
  relating to the Injected Business) relating to the&nbsp; Vendor Group, the Company, the Joint Venture and the Injected
  Business as the Purchaser may require for the purpose of or in connection
  with the performance, observance and compliance by the Purchaser of any
  provision of the such rules, regulations and laws in force from time to time
  in the United States and which apply to the Purchaser or otherwise as may be
  required by the relevant regulatory authorities in the United States or any
  other applicable authorities.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.2.4</font></td>
  <td width=639 colspan=11 valign=top><font size=2>The Vendor </font><font size=2>hereby
  warrants, represents and undertakes it</font><font size=2> shall procure that on or before the day on
  which the Purchaser is obliged to satisfy such part of the Consideration as
  is referred to in Clause 3:-</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(a)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>If applicable, the Vendor and its affiliates
  and the directors of the Company and/or the Joint Venture will each have
  discharged in full any indebtedness of such person to the Company and/or the
  Joint Venture (whether or not then due for payment);</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(b)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>If applicable, the Company and/or the Joint
  Venture shall be released, without payment by or other cost to the Company
  and/or the Joint Venture, from all debts and obligations to, and from all
  guarantees, indemnities, mortgages and surety or security arrangements of any
  kind given by the Company and/or the Joint Venture in favour of the Vendor or
  any affiliates of the Vendor, or any director of the Company and/or the Joint
  Venture; and</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(c)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>If applicable, the accounts of the Company
  and/or the Joint Venture, audited by an independent accountant acceptable to
  the Purchaser, will be provided to the Purchaser reflecting the matters
  referred to in <u>Clauses 6.2.4(a) and (b)</u>.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=39 colspan=2 valign=top>&nbsp;</td>
  <td width=641 colspan=12 valign=top><font size=2>and the Vendor shall, on demand, indemnify the
  Purchaser and keep it indemnified from and against any failure so to procure
  and from any liability pending any such release.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.2.5</font></td>
  <td width=639 colspan=11 valign=top><font size=2>The Vendor shall use its best endeavors to
  procure the Company (if applicable) and to procure all parties in the Joint
  Venture to promptly perform, observe and comply with all its obligations
  under the JV Agreement and the Extinguishment Agreement and take all
  necessary steps and sign and execute all necessary documents to facilitate or
  effect the transactions contemplated under the JV Agreement and the
  Extinguishment Agreement, including without limitation procuring such
  modification to the terms of the JV Agreement, the Extinguishment Agreement and
  other documents ancillary thereto as may be required by the Main Approving
  Authority and Other Approving Authorities.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.2.6</font></td>
  <td width=639 colspan=11 valign=top><font size=2>The Vendor shall
  not (save only as may be necessary to give effect to this Agreement) do or
  allow and shall procure that no act or omission shall occur before Completion
  which would constitute a breach of any of the Warranties if they were given
  at Completion or which would make any of the Warranties inaccurate or
  misleading if they were so given.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>6.3.</font></b></td>
  <td width=680 colspan=14 valign=top><b><font size=2>Representations, Warranties and Undertakings of the
  Purchaser</font></b></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.3.1</font></td>
  <td width=639 colspan=11 valign=top><font size=2>The Purchaser hereby warrants and represents
  that :-</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(a)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>it has the full power, authority and legal
  right to enter into this Agreement and this Agreement constitutes binding
  obligations on it in accordance with its terms;</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(b)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>the execution and delivery of this Agreement
  and the consummation of transactions contemplated hereby will not result in
  the breach and/or cancellation and/or termination of any of the terms or
  conditions of or constitute a default under any agreement, commitment or
  other instrument to which it is a party or by which it or its property or
  assets may be bound or affected or violate any law or any rule or regulation
  of any administrative agency or governmental body or any court order, writ,
  injunction or decree of any court, administrative agency or governmental body
  affecting it; and</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=41 colspan=4 valign=top><font size=2>(c)</font></td>
  <td width=598 colspan=7 valign=top><font size=2>there has been no material adverse change in
  the assets, as a whole, or the business, prospects, financial condition or
  result of operations of the Purchaser since its last date of audited
  financial statement. For the For the purpose of this Clause 6.3.1(c),
  &#147;material adverse change&#148; shall mean (i) a reduction in cash balance to less
  than US$1,500,000; and/or (ii) termination in employment of any of Tony Tong,
  Richard Hui and Chuck Mueller as employees of&nbsp; the Purchaser.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>6.3.2</font></td>
  <td width=639 colspan=11 valign=top><font size=2>Notwithstanding any other terms and conditions
  of this Agreement, it is hereby agreed by the Vendor that in the event of a
  transfer of the Purchaser from the Nasdaq National Market to the Nasdaq Small
  Cap Market, , that such event shall not constitute an event of default,
  breach of warranty, representation or undertaking or any act or event
  whatsoever which would entitle the Vendor to rescind this Agreement and/or
  claim a breach, default or damages against the Purchaser.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>7.</font></b></td>
  <td width=680 colspan=14 valign=top><a name=SpecialTerms><b><font size=2>SPECIAL TERMS</font></b></a></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=341 colspan=12 valign=top>&nbsp;</td>
  <td width=339 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top><b><font size=2>7.1</font></b></td>
  <td width=680 colspan=14 valign=top><b><font size=2>Escrow Arrangement for Consideration Sharesand Adjustment</font></b></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top><font size=2>7.1.1</font></td>
  <td width=639 colspan=11 valign=top><font size=2>The Vendor warrants, represents and undertakes
  that (i) the total Net Revenue of the Joint Venture for the period from 1<sup>st</sup>&nbsp; November 2001&nbsp; to 31<sup>st</sup> December 2001 (&#147;<b>First Year</b>&#148;) will not be less than US$5,000,000, the period
  from 1<sup>st</sup> January 2002 to 31<sup>st</sup> December 2002 (&#147;<b>Second Year</b>&#148;) will not be less than
  US$39,000,000&nbsp; and for the period from
  1<sup>st</sup> January 2003 to 31<sup>st</sup> December 2003 (&#147;<b>Third Year</b>&#148;) will not be less than
  US$50,000,000; and (ii) the total Net Income of the Joint Venture for the
  First Year will not be less than US$250,000,&nbsp;
  the Second Year will not be less than US$1,950,000 and for the Third
  Year will not be less than US$2,500,000. The First Year, Second Year and
  Third Year shall collectively hereinafter be referred to as the &#147;<b>Warranted Years</b>&#148;.</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=41 colspan=3 valign=top>&nbsp;</td>
  <td width=639 colspan=11 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=680 colspan=14 valign=top><font size=2>The Vendor hereby agrees and acknowledges that
  the total Consideration payable by the Purchaser is based on the Vendor&#146;s
  warranty in respect of the Net Revenue and Net Income of the Joint Venture as
  described above.&nbsp; In this regard the
  Vendor hereby agrees to appoint the Escrow Agent upon the terms of the Escrow
  Agreement in the agreed terms to hold all the Consideration Shares to be
  issued in accordance with this Agreement on Completion and the Vendor
  undertakes with the Purchaser that it shall not either </font><font   size=2>sell, transfer, charge, encumber, grant options over or otherwise
  dispose of, or of any legal or beneficial interest in any of the
  Consideration Shares until such part of the Consideration Shares are released
  to by the Escrow Agent to the Vendor in accordance with the following
  schedule but subject to Clause 7.2 below :</font></td>
 </tr>
 <tr>
  <td width=41 colspan=2 valign=top>&nbsp;</td>
  <td width=341 colspan=12 valign=top>&nbsp;</td>
  <td width=339 colspan=2 valign=top>&nbsp;</td>
 </tr>

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<p><font size=2>&nbsp;</font></p>

<dir>
<table border=0 cellspacing=0 cellpadding=0 width="80%">
 <tr>
  <td width="47%" valign=top><b><font size=2>Release Date</font></b></td>
  <td width="2%" valign=top>&nbsp;</td>
  <td width="18%" valign=top><b><font size=2>Number of
  Consideration Shares to be Released</font></b></td>
  <td width="2%" valign=top>&nbsp;</td>
  <td width="28%" valign=top><b><font size=2>Release Criteria</font></b></td>
 </tr>
 <tr>
  <td width="47%" valign=top bgcolor="#cceeff"><font size=2>After the First
  Year, within 10 days of the Auditors certifying (in writing to </font><font   size=2>&nbsp;the Purchaser </font><font size=2>that the audited financial
  statements (including balance sheet and profit and loss account) in accordance
  with generally accepted accounting principles in the United States relating
  to the Joint Venture and its business is acceptable and can be consolidated
  into </font><font size=2>the
  Purchaser</font><font size=2>&#146;s audited accounts, balance sheet and financial
  statements.</font></td>
  <td width="2%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td width="18%" valign=top bgcolor="#cceeff"><font size=2>500,000 PACT
  Shares</font></td>
  <td width="2%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td width="28%" valign=top bgcolor="#cceeff"><font size=2>The Joint
  Venture has achieved (i) Net Revenue for the First Year of not less than
  US$5,000,000; and (ii) Net Income for the First Year of not less than
  US$250,000</font></td>
 </tr>
 <tr>
  <td width="47%" valign=top>&nbsp;</td>
  <td width="2%" valign=top>&nbsp;</td>
  <td width="18%" valign=top>&nbsp;</td>
  <td width="2%" valign=top>&nbsp;</td>
  <td width="28%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="47%" valign=top><font size=2>After the
  Second Year, within 10 days of the Auditors certifying (in writing to </font><font   size=2>the Purchaser </font><font   size=2>that the audited financial statements (including balance sheet and
  profit and loss account) in accordance with generally accepted accounting
  principles in the United States relating to the Joint Venture and its
  business is acceptable and can be consolidated into </font><font   size=2>&nbsp;the Purchaser&#146;s</font><font size=2> audited accounts, balance sheet
  and financial statements.</font></td>
  <td width="2%" valign=top>&nbsp;</td>
  <td width="18%" valign=top><font size=2>1,642,000 PACT
  Shares</font></td>
  <td width="2%" valign=top>&nbsp;</td>
  <td width="28%" valign=top><font size=2>The Joint
  Venture has achieved (i) Net Revenue for the Second Year of not less than
  US$39,000,000; and (ii) Net Income for the Second Year of not less than
  US$1,950,000</font></td>
 </tr>
 <tr>
  <td width="47%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td width="18%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td width="28%" valign=top bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="47%" valign=top bgcolor="#cceeff"><font size=2>After the Third
  Year, within 10 days of the Auditors certifying (in writing to </font><font   size=2>&nbsp;the Purchaser</font><font size=2> that the audited financial
  statements (including balance sheet and profit and loss account) in
  accordance with generally accepted accounting principles in the United States
  relating to the Joint Venture and its business is acceptable and can be
  consolidated into </font><font size=2>&nbsp;the Purchaser</font><font size=2>&#146;s audited
  accounts, balance sheet and financial statements.</font></td>
  <td width="2%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td width="18%" valign=top bgcolor="#cceeff"><font size=2>1,858,000 PACT
  Shares</font></td>
  <td width="2%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td width="28%" valign=top bgcolor="#cceeff"><font size=2>The Joint
  Venture has achieved (i) Net Revenue for the Third Year of not less than
  US$50,000,000; and (ii) Net Income for the Third Year of not less than
  US$2,500,000</font></td>
 </tr>
</table>
</dir>

<p><font size=2>&nbsp;</font></p>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top><font size=2>7.1.2</font></td>
  <td width=983 colspan=2 valign=top><font size=2>The Vendor
  agrees and undertakes not to dismiss nor withdraw its instructions to the
  Escrow Agent pursuant to the Escrow Agreement unless the Escrow Agent has
  voluntarily resigned or ceased to act as escrow agent in accordance with the
  Escrow Agreement, in which case the Vendor agrees and undertakes to appoint
  an escrow agent (as is agreeable to the Purchaser) in its place to act as
  escrow agent on the same terms and conditions of the Escrow Agreement.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top><font size=2>7.1.3</font></td>
  <td width=983 colspan=2 valign=top><font size=2>In the event
  any of the Release Dates referred to above is not a Business Day in Hong
  Kong, then the relevant portion of the Consideration Shares shall be released
  on the immediately following Business Day.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top><font size=2>7.1.4</font></td>
  <td width=983 colspan=2 valign=top><font size=2>It is agreed
  that where reference to US$ is made in this Clause 7.1, it shall also mean
  and include &#147;or its equivalent value in RMB at the mid-price of bid and offer
  of the prevailing exchange rate quoted by the Bank of China in the PRC at
  11.00 am on the last Business Day of the relevant financial year of the Joint
  Venture subject to the Maximum Rate (as defined hereafter), which if exceeded
  shall be deemed to be the Maximum Rate.&nbsp;
  The parties agree that the fluctuation in the prevailing exchange rate
  under this Agreement shall be limited to a maximum of not more than 10% of
  the mid-price of bid and offer of the prevailing exchange rate quoted by the
  Bank of China in the PRC at 11.00 am on the day of Completion (the &quot;<b>Maximum
  Rate</b>&quot;).</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top><font size=2>7.1.5</font></td>
  <td width=983 colspan=2 valign=top><font size=2>The Vendor
  hereby warrants, represents and undertakes that it shall, within 60 days will
  make the best effort in reasonable short period time after Completion enter
  into the following agreements with </font><font size=2>&nbsp;the
  Purchaser</font><font size=2> :-</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=58 valign=top><font size=2>(a)</font></td>
  <td width=925 valign=top><font size=2>The EMS
  Software Agreement;</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=58 valign=top>&nbsp;</td>
  <td width=925 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=58 valign=top><font size=2>(b)</font></td>
  <td width=925 valign=top><font size=2>The EMS
  License;&nbsp; and</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=58 valign=top><font size=2>(c)</font></td>
  <td width=925 valign=top><font size=2>The EMS
  Distribution Agreement.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=58 valign=top>&nbsp;</td>
  <td width=925 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=3 valign=top><font size=2>(the EMS
  Software Agreement, EMS License and EMS Distribution Agreement are all
  collectively herein this Agreement referred to as the &#147;<b>PACT-Holley Agreements</b>&#148;)</font></td>
 </tr>

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 <tr height=0>
  <td width=44></td>
  <td width=38></td>
  <td width=2></td>
  <td width=38></td>
  <td width=599></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top><font size=2>7.1.6</font></td>
  <td width=983 colspan=2 valign=top><font size=2>The Vendor
  hereby agrees and undertakes that after&nbsp;
  Completion and issue and allotment of the Consideration Shares in the
  name of the Vendor that it shall not nominate more than three (3) directors
  to the board of directors of the Purchaser.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top><font size=2>Currently,
  there are 6 directors (including independent directors) that have been
  elected by the shareholders to serve on the board of directors of the
  Purchaser.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>7.2</font></b></td>
  <td width=1044 colspan=4 valign=top><b><font size=2>Adjustments Consideration Shares and the Purchaser Board
  Seats</font></b></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=4 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top><font size=2>7.2.1</font></td>
  <td width=983 colspan=2 valign=top><b><u><font size=2>Adjustment in Consideration Shares</font></u></b><font   size=2> :- In the event that any of the Net
  Revenue or Net Income as warranted by the Vendor in Clause 7.1.1 during any
  of Warranted Years fall below any of the amounts specified in the
  corresponding Release Criteria set out in Clause 7.1.1 above then the Vendor
  shall upon written notice (&#147;<b>Notice</b>&#148;) by the Purchaser, pay to the
  Purchaser an amount in the form of PACT Shares on each of the relevant
  Release Dates which is calculated as follows :</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top><font size=2>Number of PACT Shares to be delivered by
  Vendor to Purchaser (&#147;<b>Adjustment Shares</b>&#148;) <b>=</b> Number of Consideration
  Shares to be released by the Escrow Agent on any relevant Release Date
  multiplied by the greater of either Adjustment Percentage A (as defined
  below) or Adjustment Percentage B (as defined below).</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=925 valign=top><b><font size=2>Adjustment Percentage A</font></b><font size=2>, shall mean the warranted Net Revenue amount
  minus the actual amount of Net Revenue during the relevant term of Warranted
  Years divided by the warranted Net Revenue amount during the relevant term of
  the Warranted Years, of which 5% is then subtracted</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=60 colspan=2 valign=top>&nbsp;</td>
  <td width=983 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=925 valign=top><b><font size=2>Adjustment Percentage B</font></b><font size=2>, shall mean the warranted Net Income amount
  minus the actual amount of Net Income during the relevant term of Warranted
  Years divided by the warranted Net Income amount during the relevant term of
  the Warranted Years</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=62 colspan=2 valign=top>&nbsp;</td>
  <td width=925 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=3 valign=top><font size=2>Notwithstanding the above calculation of
  Adjustment Shares, in the event that either Adjustment Percentage A plus 5%
  or Adjustment Percentage B is greater than 50%, the Vendor hereby agrees it
  shall pay to the Purchaser 100% of the Consideration Shares to be released on
  the applicable Release Date.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=3 valign=top><font size=2>Upon any of the events described above occurs,
  the Purchaser shall provide the Escrow Agent with the Notice, that will
  include the calculation of Adjustment Shares (which shall be deemed final and
  correct upon such delivery save in the event of a manifest error), and the
  Escrow Agent shall immediately thereafter deliver the Adjustment Shares or
  all the Consideration Shares falling to be released on the Relevant Release
  Date (as the case may be) to the Purchaser. In addition, the Vendor shall do
  and execute or procure to be done and executed all other necessary acts,
  deeds, documents and things within its power to transfer and assign the legal
  and beneficial ownership of the Adjustment Shares or all the Consideration
  Shares falling to be released on the Relevant Release Date (as the case may
  be) in the name of the Purchaser.&nbsp; For
  the avoidance of doubt, the balance of the Consideration Shares after
  deducting the Adjustment Shares delivered to the Purchaser (if any) on the
  Relevant Release Date shall be released and delivered by the&nbsp; Escrow Agent to the Vendor.</font></td>
 </tr>

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  <td width=44></td>
  <td width=38></td>
  <td width=2></td>
  <td width=38></td>
  <td width=599></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>7.2.2</font></td>
  <td width=987 colspan=2 valign=top><b><u><font size=2>Adjustment in the Purchaser Board Seats</font></u></b><font   size=2> :&#150; In the event that any of the actual
  Net Revenue or Net Income achieved by the Joint Venture during any of the
  Warranted Years is/are less than 50% of the respective amounts specified in
  the corresponding Release Criteria during the Warranted Years and set out in
  Clause 7.1.1, the Vendor agrees that the number of directors it may be
  entitled to nominate to the board of the Purchaser shall be reduced by one
  (1) director for every year during the Warranted Years it fails to meet the
  warranted Net Revenue or Net Income. In the event that the number of
  directors appointed/nominated by the Vendor to the board of directors of the
  Purchaser exceeds the number the directors the Vendor is entitled to
  appoint/nominate in accordance with the terms of this Agreement, the Vendor
  shall immediately procure such director(s) exceeding the number it is
  entitled to nominate to resign as a director of the Purchaser (and shall keep
  the Purchaser fully indemnified of any claims or proceeding such resigning
  director may have against the Purchaser).</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>7.3</font></b></td>
  <td width=1044 colspan=3 valign=top><b><font size=2>Rights Attached to Consideration Shares while in Escrow</font></b></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>7.3.1</font></td>
  <td width=987 colspan=2 valign=top><font size=2>It is hereby agreed by the parties that the
  Vendor shall be allowed to exercise at any time, any rights (whatsoever) it
  may have as a registered owner of such portion of Consideration Shares
  (including voting rights, rights to appoint directors or rights to attend
  meetings of members) that the Escrow Agent is holding pursuant to Clause 7.1
  and which have not been released on or by the relevant Release Date to the
  Vendor, except for the rights outlined in Clause 7.3.2.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>7.3.2</font></td>
  <td width=987 colspan=2 valign=top><font size=2>It is further agreed by the Vendor that if any
  dividends are declared or any distributions are made to any shareholders of
  PACT Shares, the dividends and such distributions attached to such Consideration
  Shares which are held by the Escrow Agent in the meantime, pursuant to Clause
  7.1, shall be paid to Escrow Agent.&nbsp;
  It is agreed that dividends and distributions attached to each
  Consideration Share and held by the Escrow Agent shall only be released by
  the Escrow Agent, together with any interest thereon, to the Vendor as and
  when such Consideration Shares fall to be released in accordance with Clause
  7.1.&nbsp; All remaining dividends and
  distributions (together with interest thereon) held by the Escrow Agent shall
  be released to the Purchaser on the relevant Release Dates.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>7.4</font></b></td>
  <td width=1044 colspan=3 valign=top><b><font size=2>Right of First Refusal</font></b></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>7.4.1</font></td>
  <td width=987 colspan=2 valign=top><font size=2>Before any shares or interest in the Joint
  Venture be sold or otherwise transferred or Disposed of by the Vendor (&#147;<b>Selling
  Shareholder</b>&#148;), the Purchaser shall have a right of first refusal
  (&#147;<b>Right
  of First Refusal</b>&#148;) to purchase such shares or interest&nbsp; (&#147;<b>Offered Securities</b>&#148;) in accordance with
  Clauses 7.4.2 and 7.4.3 below.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>7.4.2</font></td>
  <td width=987 colspan=2 valign=top><font size=2>Before the transfer or Disposal of any Offered
  Securities, the Selling Shareholders shall deliver to the Purchaser and the
  Company a written notice (&#147;<b>Transfer Notice</b>&#148;) stating :-</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(a)</font></td>
  <td width=925 valign=top><font size=2>the Selling Shareholder&#146;s intention to sell or
  otherwise Dispose of such Offered Securities;</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(b)</font></td>
  <td width=925 valign=top><font size=2>the name of each proposed purchaser or other
  transferee (a &#147;<b>Proposed Transferee</b>&#148;);</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(c)</font></td>
  <td width=925 valign=top><font size=2>the number of Offered Securities to be
  transferred to each Proposed Transferee;</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(d)</font></td>
  <td width=925 valign=top><font size=2>the cash price and/or other consideration for
  which the Selling Shareholder proposes to transfer the Offered Securities to
  the Proposed Transferee (&#147;<b>Offered Price</b>&#148;).</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=59 colspan=2 valign=top>&nbsp;</td>
  <td width=984 colspan=2 valign=top><font size=2>The Transfer Notice shall certify that the
  Selling Shareholder(s) has received a firm offer from the Proposed
  Transferee(s) and in good faith believes a binding agreement for the Disposal
  is obtainable on the terms set forth in the Transfer Notice.&nbsp; The Transfer Notice shall also include a
  copy of any written proposal, term sheet or letter of intent or other
  agreement relating to the proposed Disposal.&nbsp;
  The Transfer Notice shall constitute an irrevocable offer by the
  Selling Shareholder to sell the Offered Securities to the Purchaser.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=59 colspan=2 valign=top>&nbsp;</td>
  <td width=984 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>7.4.3</font></td>
  <td width=987 colspan=3 valign=top><font size=2>The Purchaser shall have a right, upon notice
  to the Selling Shareholder at any time within 30 calendar days after receipt
  of the Transfer Notice, to purchase all, any or a portion of such Offered
  Securities at (a) such price per share of the Offered Securities as (i)
  determined by an independent international appraiser experienced in the
  valuation of such shares and business of the Company as chosen by the
  Purchaser or (ii) the Offered Price, which ever shall be lower (&#147;<b>Purchaser Offer Price</b>&#148;); and (b) upon the
  same terms (or as similar as reasonably possible), upon which the Selling
  Shareholder is proposing or is to Dispose of such Offered Securities, save
  the sale/purchase price shall be the Purchaser Offer Price, and the Selling
  Shareholder shall, upon receipt of the notice of purchase from the Purchaser,
  sell such Offered Securities to the Purchaser pursuant to such terms, with
  such closing to take place within 45 calendar days after delivery of the
  Transfer Notice (&#147;<b>Purchase Right Period</b>&#148;).</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>7.4.4</font></td>
  <td width=987 colspan=3 valign=top><font size=2>If any of the Offered Securities proposed in
  the Transfer Notice to be transferred are not purchased by the Purchaser,
  then after expiry of the Purchase Right Period, the Selling Shareholder may
  sell or otherwise transfer or Dispose of such Offered Securities which have
  not been purchased by the Purchaser at the Offered Price or at a higher
  price, provided that such sale or other transfer shall be completed and
  consummated within 45 days after the expiry of Purchase Right Period, and
  provided further that the Proposed Transferee agrees in writing that the
  provisions of this Agreement and any Shareholder&#146;s Agreement between the
  Purchaser and the Vendors regulating their respective rights within the
  Company (if any) shall continue to apply to the Offered Securities that are
  transferred to the Proposed Transferee. If the Offered Securities described
  in the Transfer Notice are not transferred to the Proposed Transferee within
  such 45 day period, such Selling Shareholder will not transfer or Dispose of
  any Offered Securities unless such securities are first re-offered to the
  Purchaser in accordance with Clauses 7.4.2 and 7.4.3 above.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>7.5</font></b></td>
  <td width=1044 colspan=4 valign=top><b><font size=2>Right of First Offer for Sale Shares</font></b></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=4 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>7.5.1</font></td>
  <td width=987 colspan=3 valign=top><font size=2>If within 24 months from the Completion Date,
  any of the following events shall occur (&#147;<b>Sale Events</b>&#148;),&nbsp; then the Vendor shall have the right to
  purchase all of the Sale Shares (but not part thereof) from the Purchaser in priority
  to any other party or third party at the lower consideration of&nbsp; (i)&nbsp;
  as determined by an independent international appraiser experienced in
  the valuation of such shares and business of the Company as chosen by mutual
  agreement by the Purchaser and the Vendor, based on a willing buyer and a
  willing seller or (ii) as the parties may agree (&#147;<b>JV Share Price</b>&#148;):-</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=62 colspan=2 valign=top><font size=2>(a)</font></td>
  <td width=925 valign=top><font size=2>The Purchaser having sought creditor&#146;s
  protection under Chapter 7 or Chapter 11 of the United States&#146; insolvency or
  bankruptcy laws and regulations; or</font></td>
 </tr>

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 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=62 valign=top><font size=2>(b)</font></td>
  <td width=925 valign=top><font size=2>The departure, retirement or termination of
  employment of Tony Tong, Richard Hui and Chuck Mueller of the Purchaser.&nbsp; For the avoidance of doubt, so long as any
  one of the aforesaid persons are still an employee, independent contractor or
  consultant of the Purchaser then this provision shall not apply.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=62 valign=top>&nbsp;</td>
  <td width=925 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>7.5.2</font></td>
  <td width=987 colspan=2 valign=top><font size=2>If any of the Sale Events occur within 24
  month from the Completion Date, then the Vendor shall within 30 calendar days
  of any of the Sale Events occurring serve such written notice on the
  Purchaser exercising its rights to purchase all the Sale Share at the JV
  Share Price.&nbsp; Completion of the sale
  and purchase of the Sale Shares pursuant to this Clause shall occur within 45
  calendar days from receipt of written notice by the Purchaser and upon such
  completion date, the Vendor shall deliver all of the relevant consideration
  to the Purchaser in cash in exchange for the relevant share certificates and
  other necessary transfer documents for the Sale Shares.&nbsp;&nbsp; If no written notice is served by the
  Vendor on the Purchaser in accordance with this Agreement, then the Purchaser
  shall have the right to dispose of all or any of the Sale Shares as it shall
  deem appropriate without offering the same to the Vendor.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>7.6</font></b></td>
  <td width=1044 colspan=3 valign=top><b><font size=2>Assignment of Reselling and Development Rights of EMS and
  ETS</font></b></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=3 valign=top><font size=2>The Purchaser hereby undertakes that it shall
  use reasonable efforts to procure that such research and development rights
  (as agreed upon by the Purchaser) of certain Energy Management System (&#147;<b>EMS</b>&#148;)
  and Energy Trading System (&#147;<b>ETS</b>&#148;) solutions and applications are
  assigned by the Purchaser to the Vendor as soon as possible after the
  Completion Date.&nbsp; In the event that
  the Purchaser is unable to procure the assignment of such EMS and ETS to the
  Vendor, then the Vendor shall have no rights or claims against the Purchaser
  for failing to do so.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>7.7</font></b></td>
  <td width=1044 colspan=3 valign=top><b><font size=2>Appointment to Board of Joint Venture</font></b></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=3 valign=top><font size=2>The Vendor hereby agrees that it shall and
  shall procure that so long as the Purchaser is a beneficial owner of shares
  or has an equitable interest in the Joint Venture, it shall procure that the
  Purchaser shall have a right to appoint a majority of directors to the Joint
  Venture and in the event that the number of directors to the board of the
  Joint Venture is 5 that the Purchaser shall have the right to nominate at
  least 3 directors.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>8.</font></b></td>
  <td width=1044 colspan=3 valign=top><a name=ConfidentialityAndExclusiveNegotiation><b><font size=2>CONFIDENTIALITY
  AND EXCLUSIVE NEGOTIATION</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>8.1</font></b></td>
  <td width=1044 colspan=3 valign=top><b><font size=2>Confidentiality</font></b></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=3 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><a   name="_Ref430492393"></a><a name="_Ref483025803"></a>&nbsp;</td>

  <td width=1044 colspan=3 valign=top><font   size=2>The parties recognize that, in
  connection with the performance of this Agreement, a party (in such capacity,
  the &#147;<b>Disclosing Party</b>&#148;) may
  disclose Confidential Information to another party (in such capacity the &#147;<b>Receiving Party</b>&#148;). The Receiving Party
  agrees (A)&nbsp;not to use any such Confidential Information for any purpose
  other than in the performance of its obligations under this Agreement and
  (B)&nbsp;not to disclose any such Confidential Information to any Person
  whatsoever, except (1)&nbsp;to its employees who are reasonably required to
  have the Confidential Information in connection herewith; provided, however,
  that the Receiving Party shall remain liable for any breach by its employees
  of any provision of this Clause&nbsp;8.1, (2)&nbsp;to its agents,
  representatives, lawyers and other advisers that have a need to know such
  Confidential Information, subject to the written obligation of any such
  agent, representative, lawyer or other advisor to whom Confidential
  Information is disclosed in accordance with this Clause&nbsp;8.1 to maintain
  the confidentiality thereof, and (3)&nbsp;pursuant to, and to the extent of,
  a request or order by a governmental authority.&nbsp; The Receiving Party agrees to take all reasonable measures to
  protect the secrecy and confidentiality of, and avoid disclosure or
  unauthorized use of, the Disclosing Party&#146;s Confidential Information</font><font size=2>.</font><font   size=2>&nbsp;
  Each party acknowledges and agrees that (i)&nbsp;any violation of
  these provisions could cause irreparable injury to the Disclosing Party for
  which money damages would be inadequate to compensate for such breach, and
  (ii)&nbsp;as a result, the Disclosing Party may, in addition to other remedies,
  seek to immediately obtain and enforce injunctive relief prohibiting the
  breach or threatened breach of the provisions of this Clause&nbsp;8.1 without
  the necessity of proving actual damages or compelling specific performance.</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=67 valign=top><b><font size=2>8.2</font></b></td>
  <td width=1044 colspan=2 valign=top><b><font size=2>Exclusive
  Negotiation</font></b></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>(a)</font></td>
  <td width=987 valign=top><font size=2>The Vendor
  hereby agrees and undertakes that it will not after the date of this
  Agreement enter into any negotiations to form any agreement, understanding or
  joint venture with any third party relating to e-commerce services of a
  similar nature to those services contemplated in this Agreement and to be
  carried on by the Joint Venture without the express written consent of the
  Purchaser. This Clause shall survive Completion or termination of this
  Agreement.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>(b)</font></td>
  <td width=987 valign=top><font size=2>The Purchaser
  hereby undertakes and agrees that it will not after the date of this
  Agreement enter into any negotiations or agreements to merge with or acquire
  any other entity with similar business as the Joint Venture or enter into any
  negotiations or agreements to merge with or acquire any other entity whereby </font><font   size=2>the Purchaser</font><font   size=2> shall issue (in aggregate) more than 5% of its entire issued share
  capital on a fully diluted basis (after issue of such shares to such entity)
  subsequent to the date of this Agreement without the express written consent
  of the Vendor.&nbsp; The Purchaser further
  undertakes and agrees that it shall not to grant any warrants or options
  without written consent of the Vendor.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top><font size=2>(c)</font></td>
  <td width=987 valign=top><font size=2>It is further
  agreed and the Vendor hereby</font><font size=2>
  represents and undertakes that in the event any of the Net Income and Net
  Revenue targets are not satisfied in any of the First Year, Second Year or
  Third Year (as set out in Clause 7.1.1) or the Escrow Agent has not released
  all of the Consideration Shares to the Vendor, the Purchaser shall be
  released from its undertakings, obligations and the terms and conditions
  outlined in 8.2 (b) above.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>9.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=Outsourcing><b><font size=2>OUTSOURCING</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>9.1</font></b></td>
  <td width=1044 colspan=2 valign=top><font size=2>The Vendor hereby agrees that it shall use its
  best endeavors to ensure that all goods, services and technology requirements
  of the Vendor Group, including procurement for electrical devices and
  information technology services shall first be outsourced and/or contracted
  from the Joint Venture and its Subsidiaries upon such terms and conditions
  agreeable to the Purchaser prior to acquiring, licensing or contracting for
  the same from a relevant third party.</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=67 valign=top><b><font size=2>10.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=Release><b><font size=2>RELEASE</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top><font size=2>Both parties agree that neither of them shall
  be released from its obligations hereunder by the granting by the other party
  of any time or other indulgence, or by the taking by the other party of any
  other security in respect of the obligations or liabilities of such party to
  this Agreement or by the termination or variation of any of the provisions of
  this Agreement or of any such other security or the release of any other security.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>11.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=FurtherAssuranceAndInformation><b><font size=2>FURTHER
  ASSURANCE AND INFORMATION</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>11.1</font></b></td>
  <td width=1044 colspan=2 valign=top><font size=2>Upon and after Completion each party shall do
  and execute or procure to be done and executed all other necessary acts,
  deeds, documents and things within their power to give effect to this
  Agreement.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>11.2</font></b></td>
  <td width=1044 colspan=2 valign=top><font size=2>Both parties shall mutually provide or procure
  to be provided all information that&nbsp;
  from time to time may be reasonably requested or required (both before
  and after the Completion Date) from time to time relating to the business and
  affairs of the Joint Venture, the Injected Business, the Vendor Group, the
  Company and each of it Subsidiaries, and the Purchaser.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>12.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=Costs><b><font size=2>COSTS</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>12.1</font></b></td>
  <td width=1044 colspan=2 valign=top><font size=2>Each party to this Agreement shall pay its own
  legal costs and expenses and other incidental costs and disbursements in
  relation to the negotiations leading up to the purchase of the Sale Shares,
  the establishment of the Joint Venture and all other matters and transactions
  contemplated under this Agreement and to the preparation, execution and
  carrying into effect of this Agreement.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>13.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=Announcements><b><font size=2>ANNOUNCEMENTS</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top><font size=2>No party hereto shall except as required by
  law or the rules and regulations in the United States or NASDAQ stock
  exchange or relevant authority in the United States make any announcement or
  communication to the press in connection with the transaction hereby
  contemplated or effected without the written approval of the other
  party.&nbsp; Notwithstanding anything
  contained in this Agreement, the Purchaser shall be permitted to make such
  announcements and disclosure in respect of this Agreement and the matters
  contemplated herein to its shareholders and the relevant government and
  regulatory authority in the United States.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>14.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=ReturnOfDocuments><b><font   size=2>RETURN OF DOCUMENTS</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top><font size=2>If this Agreement ceases to have effect both
  parties shall release and return to the other party all documents concerning
  the other party and provided to such party or its advisors in connection with
  this Agreement.</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=67 valign=top><b><font size=2>15.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=CompleteAgreement><b><font   size=2>COMPLETE AGREEMENT</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top><font size=2>This Agreement represents the entire and
  complete agreement between the parties in relation to the subject matter
  hereof and supersedes any previous agreement whether written or oral in
  relation thereto.&nbsp; No variations to
  this Agreement shall be effective unless made or confirmed in writing and
  signed by all the parties hereto.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>16.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=Assignment><b><font size=2>ASSIGNMENT</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>16.1</font></b></td>
  <td width=1044 colspan=2 valign=top><font size=2>This Agreement shall be binding upon and inure
  for the benefit of each party's successors and assigns [and personal
  representatives] (as the case may be) but, except as expressly provided
  herein, none of the rights of the parties under this Agreement shall be
  assigned or transferred without the agreement in writing of the other party.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>17.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=Severability><b><font size=2>SEVERABILITY</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top><font size=2>In the event that any provision of this
  Agreement is held to be unenforceable, illegal or invalid by any court of
  competent jurisdiction, the validity, legality or enforceability of the
  remaining provisions shall not be affected nor shall any subsequent
  application of such provisions be affected.&nbsp;
  In lieu of any such invalid, illegal or unenforceable provision, the
  parties hereto intend that there shall be added as part of this Agreement a
  provision as similar in terms to such invalid, illegal or unenforceable
  provision as may be possible and be valid, legal and enforceable.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=57 valign=top>&nbsp;</td>
  <td width=987 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>18.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=Counterparts><b><font size=2>COUNTERPARTS</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top><font size=2>This Agreement may be executed in counterparts
  with the same force and effect as if executed on a single document and all
  such counterparts shall constitute one and the same instrument.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>19.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=RemainingInForce><b><font   size=2>REMAINING IN FORCE</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top><font size=2>The provisions of this Agreement insofar as
  the same shall not have been performed at Completion shall remain in full
  force and effect notwithstanding Completion.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>20.</font></b></td>
  <td width=1044 colspan=2 valign=top><a name=TimeOfTheEssence><b><font   size=2>TIME OF THE ESSENCE</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 colspan=2 valign=top><font size=2>Time shall be of the essence of this
  Agreement, both as regards the dates and periods specifically mentioned and
  as to any dates and periods which may be substituted by Agreement in writing
  between or on behalf of the Vendor and the Purchaser.</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=67 valign=top><b><font size=2>21.</font></b></td>
  <td width=1044 valign=top><a name=NoWaiver><b><font size=2>NO WAIVER</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>21.1</font></b></td>
  <td width=1044 valign=top><font size=2>No failure or delay by a party to this
  Agreement in exercising any right, power or remedy under this Agreement shall
  operate as a waiver thereof, nor shall any single or partial exercise of the
  same preclude any further exercise thereof or the exercise of any other
  right, power or remedy.&nbsp; Without
  limiting the foregoing, no waiver by a party to this Agreement of any breach
  by the other party of any provisions of this Agreement shall be deemed to be
  a waiver of any subsequent breach of that or any other provision hereof.</font></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>22.</font></b></td>
  <td width=1044 valign=top><a name=Notices><b><font size=2>NOTICES</font></b></a></td>
 </tr>
 <tr>
  <td width=67 valign=top>&nbsp;</td>
  <td width=1044 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=67 valign=top><b><font size=2>22.1</font></b></td>
  <td width=1044 valign=top><font size=2>Any notice required to be given under this
  Agreement shall be sufficiently given if delivered in person, forwarded by
  registered post or sent by overnight international couriers or facsimile
  transmission to the relevant party at its address, or fax number set out
  below (or such other address as the addressee has by five days prior written
  notice specified to the other parties):</font></td>
 </tr>
</table>

<p><font size=2>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top><font size=2>To the Vendor:</font></td>
  <td width=553 colspan=2 valign=top><font size=2>Holley Group Share Holding Co., Ltd.</font></td>
 </tr>
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top>&nbsp;</td>
  <td width=553 colspan=2 valign=top><font size=2>No. 493 Moganshan Rd., Hangzhou 31005 China</font></td>
 </tr>
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top>&nbsp;</td>
  <td width=112 valign=top>&nbsp;</td>
  <td width=441 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top>&nbsp;</td>
  <td width=112 valign=top><font size=2>Fax Number: </font></td>
  <td width=441 valign=top><font size=2>86-571-88081888</font></td>
 </tr>
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top>&nbsp;</td>
  <td width=112 valign=top><font size=2>Attention: </font></td>
  <td width=441 valign=top><font size=2>Wang Li Cheng</font></td>
 </tr>
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top>&nbsp;</td>
  <td width=112 valign=top>&nbsp;</td>
  <td width=441 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top><font size=2>To the Purchaser:</font></td>
  <td width=553 colspan=2 valign=top><font size=2>PacificNet.com, Inc.</font></td>
 </tr>
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top>&nbsp;</td>
  <td width=553 colspan=2 valign=top><font size=2>29th Floor, 3 Lockhart Road, Wanchai, Hong
  Kong</font></td>
 </tr>
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top>&nbsp;</td>
  <td width=553 colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top>&nbsp;</td>
  <td width=112 valign=top><font size=2>Fax Number:</font></td>
  <td width=441 valign=top><font size=2>852-27930689</font></td>
 </tr>
 <tr>
  <td width=41 valign=top>&nbsp;</td>
  <td width=128 valign=top>&nbsp;</td>
  <td width=112 valign=top><font size=2>Attention:</font></td>
  <td width=441 valign=top><font size=2>Tony Tong</font></td>
 </tr>
</table>

<p><font size=2>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="99%">
 <tr>
  <td width=63 valign=top><b><font size=2>22.2</font></b></td>
  <td width=1047 valign=top><font size=2>Any notice (i) sent by pre&#150;paid
  registered post shall be deemed to have been served [48] hours after the time
  at which it was posted and in proving such service it shall be sufficient to
  prove that the notice was properly addressed and posted by prepaid registered
  letter post; and sent by facsimile transmission shall be deemed to have been
  served on the receipt of a completed transmission without error and answer&#150;back
  advice; and (iii) sent by overnight international courier shall be deemed to
  have been served [48] hours after the time at which it was delivered to such
  courier and in proving such service it shall be sufficient to prove that the
  notice was properly addressed and delivered to the courier; and (iv) if
  delivered in person shall be deemed to have been served at the time of
  delivery at the address of the relevant party.</font></td>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="99%">
 <tr>
  <td width=63 valign=top><b><font size=2>22.3</font></b></td>
  <td width=1047 valign=top><font size=2>The Vendor will appoint an</font><font size=2> agent, within
  5 business days following signature by the parties of this Agreement,&nbsp; to receive and acknowledge on its behalf
  service of any writ, summons, order, judgment or other notice of legal
  process in Hong Kong.&nbsp; If for any
  reason the agent named above (or its successor) no longer serves as agent of
  the Vendor for this purpose, the Vendor shall promptly appoint a successor
  agent and notify the other parties hereto.&nbsp;
  The Vendor agrees that any such legal process shall be sufficiently
  served on it if delivered to such agent for service at its address for the
  time being in Hong Kong whether or not such agent gives notice thereof to the
  Vendor.</font></td>
 </tr>
 <tr>
  <td width=63 valign=top>&nbsp;</td>
  <td width=1047 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=63 valign=top><b><font size=2>22.4</font></b></td>
  <td width=1047 valign=top><font size=2>The Purchaser </font><font   size=2>hereby appoints </font><font   size=2>the Purchaser&#146;s Solicitors </font><font   size=2>as its agent to receive and acknowledge on its behalf service of any
  writ, summons, order, judgment or other notice of legal process in Hong
  Kong.&nbsp; If for any reason the agent
  named above (or its successor) no longer serves as agent of the Purchaser for
  this purpose, the Purchaser shall promptly appoint a successor agent and
  notify the other parties hereto.&nbsp; The
  Purchaser agrees that any such legal process shall be sufficiently served on
  it if delivered to such agent for service at its address for the time being
  in Hong Kong whether or not such agent gives notice thereof to the Purchaser.</font></td>
 </tr>
 <tr>
  <td width=63 valign=top>&nbsp;</td>
  <td width=1047 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=63 valign=top><b><font size=2>23</font></b></td>
  <td width=1047 valign=top><a name=GoverningLawAndArbitration><b><font   size=2>GOVERNING LAW AND
  ARBITRATION</font></b></a></td>
 </tr>
 <tr>
  <td width=63 valign=top>&nbsp;</td>
  <td width=1047 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=63 valign=top><b><font size=2>23.1</font></b></td>
  <td width=1047 valign=top><font size=2>For any disputes arising between the Purchaser
  and the Vendor regarding the establishment and the operation of the Joint
  Venture, the PRC Laws will be the governing law.</font></td>
 </tr>
 <tr>
  <td width=63 valign=top>&nbsp;</td>
  <td width=1047 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=63 valign=top>&nbsp;</td>
  <td width=1047 valign=top><font size=2>For any disputes arising from the allotment of
  the consideration shares, or the appointment of directors to the Purchaser&#146;s
  Board, USA Delaware laws will be the governing laws.</font></td>
 </tr>
 <tr>
  <td width=63 valign=top>&nbsp;</td>
  <td width=1047 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=63 valign=top><b><font size=2>23.2</font></b></td>
  <td width=1047 valign=top><font size=2>Any dispute arising from or in connection with
  this Agreement shall be submitted to China International Economic and Trade
  Arbitration Commission for arbitration which shall be conducted in accordance
  with the Commission&#146;s arbitration rules in effect at the time of applying for
  arbitration. This arbitral award is final and binding upon both parties</font></td>
 </tr>
 <tr>
  <td width=63 valign=top>&nbsp;</td>
  <td width=1047 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=63 valign=top><b><font size=2>24.</font></b></td>
  <td width=1047 valign=top><b><font size=2>CONFLICT OF LANGUAGE</font></b></td>
 </tr>
 <tr>
  <td width=63 valign=top>&nbsp;</td>
  <td width=1047 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=63 valign=top>&nbsp;</td>
  <td width=1047 valign=top><font size=2>This Agreement has been written in the English
  language and the Chinese language.&nbsp;
  The parties hereby agree that in the event of a conflict between the
  English language and the Chinese language of the Agreement, the English
  language and version shall prevail.</font></td>
 </tr>
 <tr>
  <td width=63 valign=top>&nbsp;</td>
  <td width=1047 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=1110 colspan=2 valign=top><b><font size=2>AS WITNESS</font></b><font size=2> the parties hereto have caused this agreement
  to be executed the day and year first above written.</font></td>
 </tr>
</table>

<p><font size=2>&nbsp;</font></p>

<page>


<p align=center><b><u><font size=2>EXECUTION
PAGE</font></u></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="17%" valign=top><font size=2>SIGNED BY</font></td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top><font size=2>./s/ TONY TONG</font></td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top>&nbsp;</td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top>&nbsp;</td>
  <td width="44%" valign=top><font size=2>Chairman and CEO</font></td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top>&nbsp;</td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top>&nbsp;</td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top><font size=2>for and on behalf of</font></td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top><b><font size=2>PACIFICNET.COM, INC</font></b></td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top>&nbsp;</td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top>&nbsp;</td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top>&nbsp;</td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top>&nbsp;</td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top><font size=2>in the presence of :</font></td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top>&nbsp;</td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top>&nbsp;</td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top>&nbsp;</td>
  <td width="44%" valign=top>&nbsp;</td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top>&nbsp;</td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top>&nbsp;</td>
  <td width="44%" valign=top>&nbsp;</td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top><font size=2>SIGNED BY</font></td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top><font size=2>./s/ LICHENG WANG</font></td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top>&nbsp;</td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top><font size=2>Chairman</font></td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top><font size=2>for and on behalf of</font></td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top>&nbsp;</td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top>&nbsp;</td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top><b><font size=2>HOLLEY GROUP SHARE HOLDING CO., LTD.</font></b></td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top>&nbsp;</td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top>&nbsp;</td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top><font size=2>in the presence of :</font></td>
  <td width="23%" valign=top>&nbsp;</td>
  <td width="10%" valign=top><font size=2>)</font></td>
  <td width="44%" valign=top>&nbsp;</td>
  <td width="4%" valign=top>&nbsp;</td>
 </tr>
</table>

<p><font size=2>&nbsp;</font></p>

</div>

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</TEXT>
</DOCUMENT>
