STOCK PURCHASE AGREEMENT
 
THIS STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of August 11, 2010
(the “Execution Date”), is made and entered into by and between First Jet
Investments Limited, a company organized under the laws of the British Virgin
Islands (“Seller”), Seller’s wholly-owned subsidiary New Crown Technology
Limited, a company organized under the laws of Hong Kong (“New Crown”), and Jun
Tang, an individual who has been the principal of the Seller and New Crown (the
“Principal”), and China Architectural Engineering, Inc., a Delaware corporation
(“CAE”).
 
WITNESSETH:
 
WHEREAS, Seller owns 100% of the equity interests of New Crown, and New Crown
owns 100%, or RMB 10,000,000, of the equity interest in Shanghai ConnGame
Network Ltd., a company organized under the laws of the People’s Republic of
China with a registered capital of RMB 10,000,000 as of the date of this
Agreement (“ConnGame”), as set forth in Section 3.01(b) of the disclosure
schedule attached hereto as Exhibit A (“Disclosure Schedule”);
 
WHEREAS, New Crown is a holding company that holds 100% of the equity interests
of ConnGame is engaged in the business of developing and operating Massively
Multiplayer Online Role-Playing Games (MMORPGs) (the “Business”); and
 
WHEREAS, CAE desires to acquire from Seller and Seller desires to sell to CAE
60% of the equity interest of New Crown (the “Transferred Equity”) and thereby
becoming a 60% indirect holder of the outstanding equity interest of ConnGame
(the “Acquisition”).
 
NOW, THEREFORE, in consideration of the representations, warranties, covenants
and agreements contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
 
ARTICLE ONE
DEFINITIONS
 
 
1.01
Definitions.

 
In this Agreement, the following terms shall have the meanings set forth below
unless the context provides or requires otherwise:
 
“1933 Act” means the Securities Act of 1933, as amended.
 
“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with such Person.  “Control” for this purpose means
possession, directly or indirectly, of more than fifty percent (50%) of the
voting power of a Person.
 
“Entity” means any sole proprietorship, corporation, partnership of any kind
having a separate legal status, limited liability company, business trust,
unincorporated organization or association, mutual company, joint stock company
or joint venture.

 
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“Environmental Law” means and includes all statutes, regulations, rules, policy,
guidance, ordinances, codes, common law, licenses, permits, orders, approvals,
plans, authorizations, concessions, franchises and similar items, of all
Governmental Authorities and all judicial and administrative and regulatory
writs, injunctions, decrees, judgments and orders to which ConnGame or CAE is a
party or is otherwise directly bound, now or which becomes effective on or
before the Closing Date relating to land use (other than zoning/planning), air,
soil, surface water, groundwater (including the protection, cleanup, removal,
remediation or damage thereof), human health and safety or any other
environmental matter, including the following laws and all corresponding
regulations and their equivalent or similar laws and regulations in any other
jurisdiction, in each case as the same may be amended from time to time: the PRC
Environmental Protection Law, the PRC Law on the Prevention and Control of Water
Pollution and its Implementation Rules, the PRC Law on the Prevention and
Control of Air Pollution and its Implementation Rules, the PRC Law on the
Prevention and Control of Solid Waste Pollution, and the PRC Law on the
Prevention and Control of Noise Pollution; Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 9601 et seq.;
Federal Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq.; Clean
Water Act, 33 U.S.C. §§ 1251 et seq.; Toxic Substances Control Act, 15 U.S.C. §§
2601 et seq.; Refuse Act 33 U.S.C. § 407; Occupational Safety and Health Act, 29
U.S.C. §§ 651 et seq.; Clean Air Act, 42 U.S.C. §§ 7401 et seq.; Environmental
Protection Act 1990 (UK); the Water Resources Act 1990 (UK); and the Health and
Safety at Work etc. Act 1974 (UK) and any federal, state, and local counterparts
and equivalents thereto.
 
“GAAP” means generally accepted accounting principles in the United States.
 
“Governmental Authority” means (i) any federal, state, county, municipal or
other government, domestic or foreign, or any agency, board, bureau, commission,
court, department or other instrumentality of any such government, or (ii) any
Person having the authority under any applicable Governmental Requirement to
administer, assess, collect or impose Taxes.
 
“Governmental Requirement” means at any time (i) any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, writ, edict,
award, authorization or other requirement of any Governmental Authority in
effect at that time or (ii) any obligation included in any certificate,
certification, franchise, permit or license issued by any Governmental Authority
or resulting from binding arbitration, including any requirement under common
law, at that time.
 
“Hazardous Substances” means and include any substance: (i) the presence of
which requires reporting, investigation, removal or remediation under any
Environmental Law; (ii) that is defined as a “hazardous waste,” “hazardous
substance,” “toxic substance,” or “pollutant” or “contaminant” under any
Environmental Law; (iii) the presence of which causes or threatens to cause a
nuisance, trespass or other tortious condition or poses a hazard to the health
or safety of persons; or (iv) that contains gasoline, diesel fuel or other
petroleum hydrocarbons, PCBs, asbestos, silica or urea formaldehyde foam
insulation.
 
“Hong Kong” means the Hong Kong Special Administrative Region of the People’s
Republic of China.

 
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 “Knowledge” means, as it relates to Seller, New Crown, ConnGame, the actual
knowledge of Principal, plus such knowledge as Principal would have acquired
after due investigation of the relevant fact or matter (including making all
necessary enquiries with the respective officers, directors and employees of
ConnGame), regardless of whether such investigation has actually occurred, and
as to any other Person, the actual knowledge of a specified Person of any
particular fact or other matter after due investigation, and the words “aware,”
“known” or similar words, expressions or phrases shall be construed accordingly.
 
“Lease” means any lease, sub-lease, tenancy agreement, sub-tenancy agreement,
licence or any other document (including any option for extension relating
thereto) granted or agreed to be granted to ConnGame or pursuant to which it
holds or occupies any Leased Property, details of which are set forth in Section
3.1(m) of the ConnGame Disclosure Schedule.
 
“Legal Requirement” means any law, regulation, rule, ordinance, decree, order or
other standard imposed by a Governmental Authority applicable to a party or the
conduct or operation of its business or the ownership or use of any of its
assets, including, in the case of ConnGame, all those imposed under the any
laws, rules, regulations or requirements of any other applicable jurisdiction.
 
“License” means any license, certification, permit or other authorization from
any Governmental Authority necessary for ConnGame  to conduct the Business or
any part thereof or own or operate any of its assets and properties.
 
“Material Adverse Effect” means (i) with respect to CAE, a material adverse
effect on the business, operations, affairs, properties, assets or condition
(financial or otherwise) of such party; and (ii) with respect to ConnGame, any
event, circumstance, occurrence, fact, condition, change or effect which,
individually or in the aggregate (a) has or would be reasonably expected to have
a material adverse effect on the business, operations, affairs, properties,
assets or condition (financial or otherwise) of ConnGame, or (b) will or would
be reasonably expected to adversely affect the ability of ConnGame, New Crown,
or Seller to consummate the transactions contemplated under this Agreement or
any other Transaction Document to which it is a party.
 
“Permitted Liens” means, with respect to the property or other assets of
ConnGame  (or any revenues, income or profits of ConnGame  therefrom):  (i)
Liens for Taxes if the same are not at the time due and delinquent; (ii) Liens
of carriers, warehousemen, mechanics, laborers and materialmen for sums not yet
due; (iii) Liens incurred in the ordinary course of the Business in connection
with workers’ compensation, unemployment insurance and other social security
legislation; (iv) Liens incurred in the ordinary course of the Business in
connection with deposit accounts or to secure the performance of bids, tenders,
trade contracts, statutory obligations, surety and appeal bonds, performance and
return of money bonds and other obligations of like nature; (v) easements,
rights-of-way, reservations, restrictions and other similar encumbrances
incurred in the ordinary course of the Business or existing on property and not
interfering in any material respect with the ordinary conduct of the Business or
the use of that property; and (vi) defects or irregularities in ConnGame’s
interest in its real properties which do not materially (A) diminish the value
of the surface estate or (B) interfere with the ordinary conduct of the Business
or the use of any of such properties.

 
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“Person” means any natural person, Entity, estate, trust, union or employee
organization or Governmental Authority.  Person includes any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person. “Control” for this
purpose means possession, directly or indirectly, of more than fifty percent
(50%) of the voting power of a Person.
 
“PRC” means the People’s Republic of China, excluding, for the purposes of this
Agreement, the Macau Special Administrative Region, Hong Kong and Taiwan.
 
“Solvent” means, for any Person on a particular date, that on such date (a) the
fair value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (b) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person does
not intend to, and does not believe it will, incur debts and liabilities beyond
such Person’s ability to pay as such debts and liabilities mature, (d) such
Person is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person’s property would
constitute an unreasonably small capital, and (e) such Person is able to pay its
debts as they become due and payable.
 
“Statutory Plans” means statutory or other benefit plans which ConnGame or any
ConnGame Subsidiary is required to participate in or comply with pursuant to any
applicable statutes, laws, rules, regulations, codes, notices, circulars,
orders, edicts, decrees, practices or promulgations of any Governmental
Authority in any jurisdiction, including plans administered pursuant to
applicable health tax, workplace safety insurance and employment insurance
legislation and, without any limitation to the foregoing, including any
statutorily required employee compensation insurance, and any social insurance,
social security or welfare benefit contributions required under the laws of the
PRC or any other applicable jurisdiction.
 
“Taxes” means and includes all forms of taxes, charges, fees, imposts, duties,
levies, deductions, withholdings or other assessments of any nature imposed,
levied, collected, withheld or assessed by any Governmental Authority or other
taxing or similar authority in any part of the world, including income, gross
receipts, excise, property, sales, use, transfer, payroll, licence, value added,
social security, national insurance (or other similar contributions or
payments), franchise, estimated, severance, customs and stamp taxes (including
any interest, fines, penalties, charges or additions attributable to, claimed,
payable or imposed on or with respect to, any such taxes, charges, fees, levies
or other assessments).
 
“Tax Returns” means any return, statement, declaration, notice, certificate,
report or other document that is or has been filed with or submitted to, or
required to be filed with or submitted to, any Governmental Authority in
connection with the determination, assessment, collection or payment of any Tax
or in connection with the administration, implementation or enforcement of or
compliance with any Legal Requirement or Governmental Requirement related to any
Tax.
 
“Transaction Documents” means this Agreement, and any other agreements,
documents and instruments delivered under or pursuant to any of the foregoing.

 
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ARTICLE TWO
SALE AND PURCHASE; PURCHASE PRICE; CLOSING
 
 
2.01
Purchase and Sale of the Transferred Equity.

 
At the Closing, subject to the terms and conditions of this Agreement, Seller
agrees to sell, transfer, assign, convey and deliver the Transferred Equity to
CAE or its designee(s), free and clear of any liens, encumbrances, pledge,
security interest, restrictive covenant, burden or charge of any kind or nature
whatsoever, legal or equitable, or any item similar or related to the foregoing
(“Liens”), together with all rights attaching thereto including the right to
receive all dividends and distributions declared, made or paid on or after the
date of Closing.
 
 
2.02
Delivery of Certificate of Capital and Proof of Transfer.

 
At the Closing, Seller shall deliver to CAE:
 
 (a) a certificate of capital verifying that CAE or its designee(s) has been
registered as holding the Transferred Equity, including all original
certificates representing such Transferred Equity, which certificates shall be
accompanied by instruments of transfer of the Transferred Equity duly executed
by the Seller in favor of CAE (or such other person(s) as CAE may direct);
 
(b) to the extent any of the same shall not have been provided prior to Closing,
all documents required in Section 7.01 and such other documents as CAE may
require evidencing the fulfilment of the conditions precedent thereunder; and
 
(c) any and all documents related to effecting the transfer of Transferred
Equity to CAE, in addition to such documents, approvals, consents, proof of
notices, and reports from the proper Governmental Authorities or other parties
evidencing that such transfer has taken place.
 
 
2.03
Purchase Price.

 
(a)             CAE shall cause to be issued to Seller, in full consideration
for the sale, assignment, transfer, conveyance and delivery of the Transferred
Equity to CAE, an aggregate of Twenty Five Million (25,000,000) shares of CAE’s
common stock, $0.001 par value per share, at the Closing (“CAE Shares”).
 
 
2.04
Closing.

 
The closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of K&L Gates LLP, 10100 Santa Monica Boulevard,
7th Floor, Los Angeles, California 90067 at 10:00 a.m., Pacific Standard time as
soon as practical after the conditions precedent set forth herein are met or
otherwise waived in accordance with the terms of this Agreement, or such other
place and date as the parties may mutually agree upon (the “Closing Date”).

 
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ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF SELLER AND NEW CROWN
RELATING TO CONNGAME AND THE TRANSFERRED EQUITY
 
 
3.01
Representations and Warranties of Seller, New Crown and Principal relating to
ConnGame and the Transferred Equity.

 
All references in this Section 3.01 to ConnGame, other than those in paragraphs
(b), (c), (d) and (g), shall be read and construed as a reference to
ConnGame.  Seller, New Crown and Principal, jointly and severally, hereby
represent and warrant to CAE as follows:
 
(a)         Corporate Status.  Each of New Crown and ConnGame is a company duly
organized, validly existing and in good standing under the laws of the place of
its incorporation or establishment, with full corporate power and authority to
own its property and to carry on its business as presently conducted.  Each of
New Crown and ConnGame is qualified to do business as a foreign corporation in
any other jurisdiction where the character or location of the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification necessary.  Each of New Crown and ConnGame has made available
to CAE true and complete copies of its Memorandum and Articles of Association or
equivalent constitutional documents, including articles, other organizational
documents and certificates of approval and any related joint venture contracts,
including any amendments thereto.  The articles, other constitutional documents
and certificates of approval and any related joint venture contracts of ConnGame
are valid and have been duly approved and registered (as applicable) by
competent PRC Governmental Authorities.  The minute books of each of New Crown
and ConnGame, as heretofore made available to CAE, are correct and complete in
all material respects.  New Crown is a holding company and has no operations,
assets (other than its ownership interest in ConnGame) or liabilities (other
than as a result of this Agreement and New Crown’s status as the common parent
for the consolidated Tax Returns (and similar status for state, local and
foreign unitary, combined or similar Tax Returns) of the Company and ConnGame).
 
(b)         Capitalization. The registered capital of ConnGame is RMB 10,000,000
and New Crown has 10,000 capital shares authorized with HKD1.00 par value and
10,000 shares issued and outstanding.  Set forth in Section 3.01(b) of the
ConnGame Disclosure Schedule is a complete and correct list of the names,
addresses and beneficial ownership of each of the registered holders of the
registered capital of ConnGame and outstanding shares of New Crown.  The
registered capital of ConnGame and shares of New Crown have been duly authorized
and validly issued in compliance with applicable law (including federal and
state securities laws and their PRC or other equivalents), and is fully paid and
nonassessable, and was not issued in violation of any statutory, contractual or
other preemptive rights, rights of first refusal or similar rights.  There are
no outstanding options, warrants, rights, puts, calls, commitments, conversion
rights, plans or other agreements of any character to which ConnGame, New Crown
or Seller is a party or otherwise bound which provide for the acquisition,
disposition or issuance of any part of the equity capital of or any other
securities exercisable or convertible into or exchangeable for any part of the
capital of ConnGame or New Crown.  There is no personal liability, and there are
no preemptive or similar rights, statutory or otherwise, attached to the
Transferred Equity.  No registered holder of the equity capital of New Crown or
ConnGame or any other holder of any each of the securities of the foregoing has
any rights, “demand,” “piggy-back” or otherwise, to have such securities
registered under the 1933 Act or similar statute under other foreign
jurisdictions.

 
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(c)             Ownership of the Transferred Equity and ConnGame.  Seller is the
record and beneficial owner of the Transferred Equity and New Crown is the 100%
holder of the equity interests of ConnGame.  Seller has good and marketable
title to the Transferred Equity, free and clear of any Liens and New Crown has
good and marketable title to its equity interests in ConnGame, free and clear of
any Liens.  New Crown’s ownership of equity ownership is held through trust
agreements with the Principal and Mr. Xiaolan Zhu (the “Trust Agreements”) that
are fully enforceable against the Principal and Mr. Xialoan Zhu and any other
third Person under PRC laws or the laws of any other applicable
jurisdiction.  The outstanding equity of New Crown and the Transferred Equity
are duly authorized, validly issued, fully paid and nonassessable and Seller has
complete and unrestricted power and the unqualified right to sell, assign,
transfer and deliver the Transferred Equity to CAE, and New Crown has complete
and unrestricted power over the equity of ConnGame.
 
(d)           No Subsidiaries.  Other than ConnGame, New Crown has no
subsidiaries.  ConnGame does not own, or have any interest in any shares or have
any outstanding interest in any other Person.
 
(e)            Corporate Authority; Authorized and Effective Agreement.  Seller
and New Crown has full legal capacity and power to execute and deliver this
Agreement and each of Seller, and New Crown and ConnGame has full legal capacity
and power to execute and deliver the Transaction Documents to which ConnGame or
Seller is a party, which Agreement and Transaction Documents have been or will,
on or prior to Closing, be duly executed and delivered by such parties and
constitute the valid and binding obligation of such parties except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
 
(f)            No Conflict.  The execution, delivery, performance and the
consummation of the transactions contemplated by this Agreement and the
Transaction Documents by ConnGame, Seller, New Crown, and Principal will not,
directly or indirectly, (i) violate any Legal Requirement or any Governmental
Requirement; (ii) violate the Memorandum and Articles of Association or
equivalent organizational documents of New Crown or ConnGame; (iii) violate any
judgment, award or decree to which ConnGame, New Crown or Seller is a party or
by which ConnGame, New Crown or Seller is bound; (iv) violate any provision of
any material indenture, agreement or other instrument to which ConnGame, New
Crown or Seller is a party, or by which ConnGame, New Crown Seller, or any of
their respective properties or assets is bound or affected, or result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any such indenture, agreement or other instrument, except any indenture,
agreement or other instrument that will be satisfied in full at or before
Closing; (v) result in the creation or imposition of any Lien upon any of the
properties or assets of ConnGame; or (vi) result in any suspension, revocation,
impairment, forfeiture or non-renewal of any License of ConnGame.

 
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(g)             Financial Statements of ConnGame.  ConnGame has furnished to CAE
audited financial statements of ConnGame prepared on consisting of balance
sheets as of December 31, 2009 and 2008, and the related statements of income,
changes in shareholders’ equity and cash flows for the two (2) years ended
December 31, 2009 (the “ConnGame Balance Sheet Date”) and the unaudited interim
balance sheet, income statement, changes in shareholders’ equity and cash flows
as of March 31, 2010 (collectively, all of such consolidated financial
statements are referred to as “ConnGame Financial Statements”).  The ConnGame
Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the consolidated
financial position of ConnGame as of the dates thereof and its consolidated
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to the absence of notes and normal year-end audit
adjustments).
 
(h)             Absence of Undisclosed Liabilities.  ConnGame has no liabilities
or obligations (whether accrued, absolute, contingent or otherwise) except: (i)
as set forth in Section 3.01(h) of the ConnGame Disclosure Schedule, (ii) as set
forth on the ConnGame Financial Statements or (iii) as incurred since the
ConnGame Balance Sheet Date in the ordinary course of business and usual and
normal in amount both individually and in the aggregate.
 
(i)             Absence of Changes.  Except as set forth in Section 3.01(i) of
the ConnGame Disclosure Schedule, since the ConnGame Balance Sheet Date,
ConnGame has operated its business in the ordinary course consistent with
ConnGame’s past practice, and there has not been any Material Adverse Effect
with respect to ConnGame.  
 
(j)             Reports and Records.  Each of New Crown and ConnGame and its
employees have filed all reports and maintained all records and licenses
required to be filed or maintained by it.  All such documents and reports
complied in all material respects with applicable requirements of law and rules
and regulations in effect at the time such documents and reports were filed and
contained in all material respects the information required to be stated
therein.
    
(k)            Taxes.
 
    (i)           Each of New Crown and ConnGame has timely filed all Tax
Returns required to be filed on or before the date hereof and will timely file
all Tax Returns required to be filed on or before Closing under any applicable
laws and regulations.  Such Tax Returns are true, correct and complete in all
respects.  All Taxes due and owing by each of New Crown and ConnGame (whether or
not showing on any Tax Return) have been paid.  Neither new Crown nor ConnGame
is currently the beneficiary of any extension of time in which to file any Tax
Return.  No written claim has ever been made by any authority in a jurisdiction
where New Crown and/or ConnGame does not file Tax Returns that ConnGame New
Crown and/or  is or may be subject to taxation by that jurisdiction.  There are
no liens for Taxes (other than for Taxes not yet due and payable) upon any of
the assets of New Crown or ConnGame.  New Crown and ConnGame has not waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.

 
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(ii)           Each of ConnGame and New Crown has withheld and paid all Taxes
required to have been withheld and paid in connection with any amounts paid or
owing to any employee, independent contractor, creditor, stockholder, or other
third party.  Proper records have been maintained in respect of all such
deductions and payments and all applicable laws, rules and regulations have been
complied with.
 
(iii)          Neither of ConnGame, New Crown nor any director or officer (or
employee responsible for Tax matters) thereof expects any authority to assess
any additional Taxes for any period for which Tax Returns have been filed.  No
foreign, federal, state, or local tax audits or administrative or judicial Tax
proceedings are pending or being conducted with respect to each of ConnGame and
New Crown.  Each of ConnGame and New Crown has not received from any
Governmental Authority (including jurisdictions where each of ConnGame and New
Crown does not file Tax Returns) any (1) written notice indicating an intent to
open an audit or other review, (2) request for information related to Tax
matters, or (3) notice of deficiency or proposed adjustment for any amount of
Tax proposed, asserted, or assessed by any taxing authority against ConnGame or
New Crown.
 
(iv)          Neither New Crown nor ConnGame is a party to any agreement,
contract, arrangement or plan that has resulted or could result, separately or
in the aggregate, in payment of (1) any “excess parachute payment” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”) from this transaction (or any corresponding provision of state, local or
foreign Tax law) or (2) any amount that will not be fully deductible as a result
of Code Section 162(m) (or any corresponding provision of state, local or
foreign Tax law).  
 
(v)           Neither New Crown nor ConnGame has been a member of an affiliated
group filing a consolidated federal income Tax Return and ConnGame has never
been a member of any group for Tax purposes (other than the group comprising
solely each other).  Each of ConnGame and New Crown does not have any liability
for the Taxes of any Person or Entity under any applicable Legal Requirement as
a transferee or successor, by contract, or otherwise.  No act or transaction has
been or will, either on or before the Closing, be affected by ConnGame, New
Crown, Seller or any other Person in consequence of which ConnGame or New Crown
is or may be held liable for Taxes primarily chargeable against some other
Person.
 
(vi)          The unpaid Taxes of each of ConnGame and New Crown (1) did not, as
of the date of the most recent balance sheet included in the ConnGame Financial
Statements, exceed the reserve for Tax liability (rather than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) set forth on the face of such balance sheet (rather than in any notes
thereto) and (2) do not and will not exceed such reserve as adjusted for the
passage of time through the date of the Closing in accordance with the past
custom and practice of each of ConnGame and New Crown in filing its Tax
Returns.  Since the date of the most recent balance sheet included in the
ConnGame Financial Statements, each of ConnGame and New Crown has not incurred
any liability for Taxes arising from extraordinary gains or losses, as that term
is used in GAAP, outside the ordinary course of business consistent with past
custom and practice.

 
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(vii)         No power of attorney has been granted by each of ConnGame and New
Crown with respect to any matters relating to Taxes that is currently in effect.
 
(viii)        Each of ConnGame and New Crown has not filed any disclosures under
Code Sections 6662 or 6011 or comparable provisions of state, local or foreign
law to prevent the imposition of penalties with respect to any Tax reporting
position taken on any Tax Return.
 
(ix)          Each of ConnGame and New Crown will not be required to include any
item of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result of
any (A) change in method of accounting for a taxable period ending on or prior
to the Closing Date; (B) “closing agreement” as described in Code Section 7121
(or any corresponding or similar provision of state, local or foreign income Tax
law) executed on or prior to the Closing Date; (C) intercompany transactions or
any excess loss account described in Treasury Regulations under Code Section
1502 (or any corresponding similar provision of state, local or foreign income
Tax law); (D) installment sale or open transaction disposition made on or prior
to the Closing Date; or (E) prepaid amount received on or prior to the Closing
Date.
 
(x)           Each of ConnGame and New Crown does not own an interest in real
property in any jurisdiction in which a Tax is imposed, or the value of the
interest is reassessed, on the transfer of any interest in real property and
which treats the transfer of an interest in an entity that owns an interest in
real property as a transfer of the interest in real property.
 
(xii)         Each of ConnGame and New Crown has not, in the past ten (10)
years, (i) acquired assets from another corporation in a transaction in which
the Tax basis of the acquired assets was determined, in whole or in part, by
reference to the Tax basis of the acquired assets (or any other property) in the
hands of the transferor or (ii) acquired the stock of any corporation which is a
qualified subchapter S subsidiary.

 
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(xiii)           Each of ConnGame and New Crown has not entered into or been
engaged in or been a party to any transaction which is artificial or fictitious
or any transaction or series of transactions or scheme or arrangement of which
the main or dominant purpose or one of the main or dominant purposes was the
avoidance or deferral of or reduction in the liability to Tax of each of
ConnGame and New Crown, to the extent that such arrangement is prohibited under
any Legal Requirement or Governmental Requirement.  No Tax scheme in effect, as
previously applied in the ConnGame Financial Statements, has been or will be
illegal under any Legal Requirement or Governmental Requirement or adversely
affect the financial condition of each of ConnGame and New Crown or the
operation of the Business.  None of the assets and properties of ConnGame has
been purchased at an under value or been given to ConnGame in circumstances
where the gift or element of under value might be subject to or give rise to any
form of Tax, estate duty chargeable or assessable against each of ConnGame and
New Crown or on any of its assets.
 
(xiv)           Each of ConnGame and New Crown has sufficient records to permit
accurate calculation of the Tax liability or relief which would arise upon a
disposal or realisation on completion of each asset owned by each of ConnGame
and New Crown at the ConnGame Balance Sheet Date or acquired by each of ConnGame
and New Crown before Closing and has otherwise maintained accurate and complete
books of account and records with respect to all transactions and other matters
occurring on or before Closing to enable the due and proper preparation and
filing of all Tax Returns required of each of ConnGame and New Crown whether
before or after Closing.  Each of ConnGame and New Crown has duly submitted all
claims and disclaimers the making of which has been assumed for the purposes of
the ConnGame Financial Statements.
 
(l)             Marketable Title; Condition of Assets.  Each of ConnGame and New
Crown owns, and is in rightful possession of, and has good and marketable title
to, all of its assets and properties used (other than the ConnGame Real
Properties, which is addressed in Section 3.01(m)), free and clear of any Lien
or other interest of any persons whatsoever, except for Liens constituting
Permitted Liens.  The assets of ConnGame are all the assets needed to continue
to conduct the Business as it is presently being conducted.  Except for any
incidental repairs required in the ordinary course of business, each item of
tangible personal property owned or used by ConnGame in conducting the Business
is in good operating condition and in a state of good maintenance and repair
(ordinary wear and tear excepted) and is adequate and suitable for the purposes
for which they are presently being used.
 
 
(m)
Real Property.

 
(i)         Section 3.01(m) of the ConnGame Disclosure Schedule lists and
describes any interest in real property held by ConnGame, including all real
properties and premises owned, leased, occupied or otherwise used by ConnGame or
in connection with the Business (the “ConnGame Real Properties”).  The ConnGame
Real Properties constitute all of the interests in real property used in the
Business, including any land use rights granted with respect to any real
property, and all deeds and documents necessary to prove the title of ConnGame
to the ConnGame Real Properties are in the possession of ConnGame.  All of the
buildings, structures and appurtenances situated on the ConnGame Real Properties
are (i) in good operating condition and in a state of good maintenance and
repair (ordinary wear and tear excepted) and (ii) adequate and suitable for the
purposes for which they are presently being used.

 
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(ii)         ConnGame is not the registered or beneficial owner of any ConnGame
Real Properties.
 
(iii)        The ConnGame Real Properties in Section 3.01(m) of the ConnGame
Disclosure Schedule (“Leased Properties”) are all occupied under Leases and the
particulars of all Leases are fully and accurately set out in that Section
3.01(m).  The ConnGame Real Properties in Section 3.01(m) of the ConnGame
Disclosure Schedule are all occupied pursuant to land use rights sold or granted
to ConnGame.  ConnGame possesses good leasehold to its Leased Properties
pursuant to valid and subsisting Leases held by it.  With respect to any land
use rights sold or granted or purported to have been sold or granted to
ConnGame, such land use rights have been validly sold or granted by competent
Governmental Authorities duly authorised so to do and ConnGame has good and
valid title thereto free from Liens (other than Permitted Liens) and enforceable
against any other third Person under PRC laws or the laws of any other
applicable jurisdiction.
 
(iv)        The Leases are head leases, are properly completed and (where
required) stamped and are in the possession and under the control of
ConnGame.  The land use rights to any ConnGame Real Property in the PRC are
owned by ConnGame for a period of not less than fifty (50) years from the
relevant date as shown in Section 3.01(m) of the ConnGame Disclosure Schedule.
 
(v)         All necessary consents, permits, licenses, certificates,
authorisations and approvals for the grant of the Leases and land use rights
pertaining to any ConnGame Real Property were obtained before such grant.  The
landlords named in the Leases were the registered owners of the Leased
Properties at the time of the grant of the relevant Lease and all Leases are
duly registered with the appropriate Governmental Authorities in accordance with
applicable Legal Requirement or Governmental Requirement of the PRC or of any
other applicable jurisdiction.  With respect to the land use rights, ConnGame
has obtained and is in possession of the relevant land use right registration
and other certificates and all other documents of title and such certificates
and documents of title are valid and subsisting and in full force and effect.
 
(vi)        Save for Permitted Liens, the ConnGame Real Properties and the title
deeds and documentation relating thereto are not subject to any debenture
(whether fixed or floating), option, agreement for sale, condition, covenant,
agreement, claim, overriding interest or any other Liens, nor is there any
Person in possession or occupation of or who has or claims any right or easement
of any kind in respect of any such properties adversely to the estate, interest,
right or title therein of ConnGame.

 
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(vii)       There are no rights, interests, covenants, restrictions,
reservations, licenses or easements, nor any disputes or outstanding notices
(whether given by a lessor or any other person) nor in the case of a Leased
Property, rights for the lessor to break the term nor (without prejudice to the
generality of the foregoing) any other matters or things which adversely affect
the value of the ConnGame Real Properties or the proper use and enjoyment
thereof for the purpose of the business now being carried on at such properties.
 
(viii)      The Leases contain no right of termination by the landlord thereof
except on grounds of non-payment of rent, breach of covenant or
insolvency.  There are no circumstances which would entitle or require a lessor
or any other Person to exercise any power of entry upon or of taking possession
of any ConnGame Real Properties or which would otherwise restrict or terminate
the continued possession or occupation thereof.
 
(ix)         The Leased Properties are not subject to any outgoings other than
general and water rates, rent, management charges of a non-capital nature and
utility charges.  All land premiums and other Taxes and all rents, service
charges and other outgoings payable by ConnGame in respect of the Leased
Properties or properties to ConnGame holds land use rights have been duly and
timely paid and will be paid up to the date of Closing and no amount is or will
be due or payable by ConnGame in respect thereof on or prior to Closing.
 
(x)          ConnGame has duly performed, observed and complied with all
covenants, restrictions, reservations, conditions, agreements, statutory
requirements, by-laws, orders, building regulations and other stipulations and
regulations affecting the ConnGame Real Properties and their use, including the
terms of all Leases, and the use of such properties does not contravene the same
and no notice of any alleged breach of any of the terms of any such Lease has
been served on ConnGame.  Without limiting the foregoing, the current use by
ConnGame of the ConnGame Real Properties and all of the buildings, structures
and appurtenances situated thereon is in compliance with all zoning or planning
restrictions applicable thereto.  All necessary certificates of compliance and
other certificates, consents, occupation and other permits, licenses,
authorisations and approvals for the user of any ConnGame Real Properties and
any and all buildings and structures thereon, as they are being used, have been
duly obtained and are in full force, validity and effect and there are no
circumstances known to Seller or New Crown which are likely to result in the
forfeiture, avoidance, withdrawal or non-renewal of or restriction on or
amendment to the same.  All such properties are used by ConnGame for legal
purposes and ConnGame has not violated any Legal Requirement or any Governmental
Requirement of the PRC or elsewhere relating to land or property.  Seller and
New Crown is not aware of any facts, matters or any notice or order served by
any Governmental Authority which may adversely affect the right of ConnGame to
use such properties for the purpose for which they are presently being used or
intended to be used.  None of such properties is subject to any actual or
threatened condemnation or other proceedings, notice or order given by any PRC
or other Governmental Authority which would adversely affect such properties or
any part thereof or preclude or impair the use of any such property by ConnGame
for the purposes for which it is currently used.  None of the ConnGame Real
Properties is adversely affected or likely to be adversely affected by any
planning, highways, transport, utility or other proposals.

 
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(xi)          ConnGame is entitled to and has exclusive vacant possession of the
ConnGame Real Properties and, other than the Leases, no part of the ConnGame
Real Properties is subject to any lease, tenancy or licence or any agreement to
grant such lease, tenancy or licence and no Person other than ConnGame has a
right to occupy or enter upon any of the ConnGame Real Properties, other than
the rights of landlords pursuant to the Leases.  The Leases are not subject to
any options or rights of pre-emption or first refusal in favour of any third
parties.
 
(xii)         There is no outstanding monetary claim or liability, contingent or
otherwise, affecting the ConnGame Real Properties and in the case of a Leased
Property there are no rent reviews in the course of being determined or
exercisable by the lessor from a date prior to the date of Closing.
 
(xiii)        ConnGame has maintained adequate insurance with respect to the
ConnGame Real Properties where the failure so to maintain would or could
reasonably expected to have a Material Adverse Effect on ConnGame.  Where
ConnGame is responsible for maintaining insurance of the Leased Properties, the
policy conforms in all respects with the requirements of the relevant Lease.
 
 
(n)
Legal Proceedings and Insolvency.

 
(i)         Except as set forth in Section 3.01(n) of the ConnGame Disclosure
Schedule, there are no actions, suits, proceedings, claims or investigations
pending or, to the Knowledge of Seller or New Crown, threatened, in any court,
before any governmental agency or instrumentality or other Governmental
Authority or in any arbitration proceeding against or by each of ConnGame and
New Crown or against any of its activities, assets and properties.
 
(ii)         As of the date hereof, immediately prior to and immediately
following Closing, ConnGame, New Crown and Seller is and will be Solvent.  None
of ConnGame, New Crown and Seller is contemplating the filing of any petition by
it under any bankruptcy or insolvency laws or the liquidating of all or a
substantial portion of its property, and each of Seller and New Crown does not
have any knowledge of any third party contemplating the filing of any such
petition against ConnGame, New Crown or Seller.  
 
(o)             Regulatory Matters.  Each of ConnGame and New Crown is not a
party to and neither ConnGame, New Crown, nor any of their properties or assets
is subject to any order, judgment, decree, agreement, memorandum of
understanding or similar arrangement with any Governmental Authority charged
with the supervision or regulation of ConnGame, New Crown or its business
activities.  Each of ConnGame and New Crown has not been advised by any of the
Governmental Authorities that any of such Governmental Authorities are
contemplating issuing or requesting (or are considering the appropriateness of
issuing or requesting) any such order, judgment, decree, agreement, memorandum
of understanding, supervisory letter or similar submission.

 
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(p)             Brokers, Finders and Others.  There are no fees or commissions
claimed by, or payable by ConnGame, New Crown, Seller or Principal to, any
broker, finder, intermediary, or any other similar person in connection with
effecting this Agreement or the transactions contemplated hereby, except for
ordinary and customary legal and accounting fees which shall be paid in full at
Closing.
 
(q)             Employment Agreements.  Except as disclosed in Section 3.01(q)
of the ConnGame Disclosure Schedule, neither New Crown nor ConnGame is not a
party to any employment, change in control, severance, consulting, non-compete,
piracy or nonsolicitation agreement.  Each of ConnGame and New Crown is not a
party to, bound by or negotiating any collective bargaining agreement, nor are
any of its respective employees represented by any labor union or similar
organization. Each of ConnGame and New Crown is in compliance in all material
respects with all its contractual obligations and all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, including those pertaining to welfare funds, social benefits,
social insurance contributions, provident fund or retirement scheme
contributions, medical benefits, insurance, retirement benefits, pensions and
the like, and has maintained current, adequate and suitable records regarding
the same, and each of ConnGame and New Crown has not engaged in any unfair labor
practice.  Each of the employees of ConnGame and New Crown who is by law subject
to immigration control, has been granted appropriate permission to remain in the
PRC or any other applicable jurisdiction and has a valid work permit issued in
relation to his employment with ConnGame and New Crown and has obtained all
necessary extensions to his leave to remain in the PRC or any other applicable
jurisdiction and so far as each of Seller and New Crown is aware there are in
existence no grounds upon which any such leave to remain or work permit might be
curtailed or the employee may be required to leave the PRC or any other
applicable jurisdiction in which his services to each of ConnGame and New Crown
are required to be performed.  Each of ConnGame and New Crown has complied with
all Legal Requirement and Governmental Requirement in the PRC with regard to
employment, labour or labour contracts, staff or labour management or
protection, including without limitation those pertaining to welfare funds,
social benefits, social insurance contributions, medical benefits, insurance,
retirement benefits, pensions and the like.
 
 
(r)
Employee Benefit Plans

 
(i)           Section 3.01(r)(i) of the ConnGame Disclosure Schedule sets forth
a list of all (a) stock option, stock purchase, restricted stock, equity
compensation, deferred compensation, bonus, fringe benefit, sick leave,
vacation, paid or unpaid leave, profit sharing, pension, retirement, deferred
compensation, medical, life, disability, accident, salary continuation,
supplemental retirement, severance, change-of-control and unemployment benefit
plans, programs or agreements (whether or not insured), (b) employment
agreement, and (c) Statutory Plans (collectively, the “Employee Benefit Plans”)
that have been established, maintained, or sponsored by ConnGame, or to which
ConnGame has contributed or into which ConnGame has entered (the “ConnGame
Employee Benefit Plans”). “ConnGame Employee Benefit Plans” shall not include
any Employee Benefit Plan that is maintained under applicable law by a
governmental body.  ConnGame has not announced or otherwise made a commitment to
implement any arrangement that, if implemented, would be a ConnGame Employee
Benefit Plan or to improve or change the benefits provided under any ConnGame
Employee Benefit Plans, unless to the extent required under any applicable Legal
Requirement or Governmental Requirement.

 
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(ii)           ConnGame has made available to CAE, to the extent applicable,
true and complete copies of the following documents with respect to each
ConnGame Employee Benefit Plan, (A) the plan document (or, in the case of any
unwritten ConnGame Employee Benefit Plan, a written summary of the terms of such
ConnGame Employee Benefit Plan), (B) the summary plan description, (C) the trust
agreement, and (D) all related agreements, insurance contracts and other
agreements by which such ConnGame Employee Benefit Plan is established,
operated, administered or funded.
 
(iii)           Each ConnGame Employee Benefit Plan complies in form and has
been maintained and operated in all respects in accordance with the requirements
of all applicable laws, including all applicable laws, rules, regulations, codes
and practices pertaining to any Statutory Plans, and each ConnGame Employee
Benefit Plan has been maintained and operated in accordance with its terms.  
 
(iv)           Neither ConnGame nor any director, officer or employee of
ConnGame, nor any other person who participates in the operation of any ConnGame
Employee Benefit Plan has engaged in any transaction with respect to any
ConnGame Employee Benefit Plan, or breached any applicable fiduciary
responsibility or obligation under any applicable Legal Requirement or
Governmental Requirement that would subject any of them to a tax, penalty or
liability for prohibited transactions or breach of any obligations under any
applicable Legal Requirement or Governmental Requirement or would result in any
claim being made under, by or on behalf of any such ConnGame Employee Benefit
Plan by any party with standing to make such a claim.
 
(v)             There are no actions, suits or claims pending or, to the
Knowledge of Seller or New Crown, threatened verbally or in writing against or
with respect to any ConnGame Employee Benefit Plan or the assets of any ConnGame
Employee Benefit Plan (other than routine claims for benefits and appeals of
denied claims), and no civil or criminal action brought pursuant to the
provisions of any applicable Legal Requirements or Governmental Requirements of
any jurisdiction applicable to ConnGame is pending or threatened verbally or in
writing against ConnGame or any fiduciary of any ConnGame Employee Benefit Plan
with respect to any ConnGame Employee Benefit Plan.  ConnGame has not received
any written notice that any ConnGame Employee Benefit Plan or any fiduciary
thereof is presently the subject of an audit, investigation or examination by
any governmental or quasi-governmental agency, and, to Seller’s Knowledge and
New Crown’s Knowledge, no such action has been threatened.

 
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(xii)          Each of ConnGame and New Crown has in place and maintained all
Statutory Plans in full compliance with the Legal Requirements and Governmental
Requirements of any jurisdiction applicable to ConnGame and New Crown, its
Business or its operations.  All employer and employee payments, contributions
and premiums required to be remitted, paid to or in respect of each such
Statutory Plan have been paid or remitted in a timely fashion in accordance with
its terms and all such Legal Requirements and Governmental Requirements and no
Taxes, penalties, fees, contributions or other payments are owing under or, in
relation to, any such Statutory Plan.  Without limiting the foregoing, all
benefits and contributions payable to any employee of each of ConnGame and New
Crown under any Statutory Plan have been fully satisfied.
 
(s)           Compliance with Laws.  Except as set forth in Section 3.01(s) of
the ConnGame Disclosure Schedule, each of ConnGame and New Crown:
 
(i)             is in compliance, in all material respects, with all applicable
federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders or decrees applicable to ConnGame, New Crown, the
Business, operations and activities, or to the employees conducting such
business;
 
(ii)           Each of ConnGame and New Crown has all business and other
licenses, certificates, permits, licenses, authorizations, consents,
qualifications, orders and approvals of, and has made all filings, applications
and registrations with, all Governmental Authorities, and other authorizations
required from any Governmental Authority under any applicable Legal Requirements
and Governmental Requirements in the PRC, that are required in order to permit
it to own or lease its properties and to conduct its business as presently
conducted; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and no suspension or cancellation of any
of them has been threatened in writing;
 
(iii)           has received no written notification or communication from any
Governmental Authorities since January 1, 2001, (A) asserting that each of
ConnGame and New Crown is not in compliance with any of the statutes,
regulations or ordinances which such Governmental Authorities enforce, or
(B) threatening to revoke any license, franchise, permit or governmental
authorization which has not been resolved to the satisfaction of the
Governmental Authorities which sent such notification or communication.  There
is no event which has occurred that, to the knowledge of each of ConnGame and
New Crown, would reasonably be expected to result in the revocation of any such
license, franchise, permit or governmental authorization.
 
(iv)          Each of ConnGame and New Crown has not received any letter or
notice from any PRC Governmental Authority notifying revocation of any Permits
or Licenses issued to it by any PRC Governmental Authority for non-compliance or
the need for compliance or remedial actions in respect of the activities carried
out by it.

 
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(v)        Each of ConnGame and New Crown has been conducting and will conduct
its business activities within the permitted scope of its business license or is
otherwise operating its business in full compliance with all applicable Legal
Requirements and Governmental Requirements and with all requisite Permits and
Licenses granted by competent PRC Governmental Authorities, as applicable, or
any other Person.
 
(vi)       All Licenses and Permits required for the conduct of any part of the
Business which are subject to periodic renewal have been obtained and there are
no grounds on which such renewals will not be granted by the relevant PRC
Governmental Authorities or other Persons.
 
(vii)      All filings, declarations, exemptions and registrations from or with
all applicable and competent PRC Governmental Authorities required in respect of
ConnGame and its operations including, without limitation, registrations with
Foreign Economic Relations and Trade Commission, State or the relevant local
Administration of Industry and Commerce, State Administration for Foreign
Exchange, tax bureau and customs authorities have been duly completed in
accordance with all applicable Legal Requirements and Governmental Requirements
in the PRC.
 
 
(t)
Environmental Matters.

 
(i)          Except as set forth in Section 3.01(t) of the ConnGame Disclosure
Schedule, neither ConnGame, New Crown, Seller nor any Person acting at its
direction has discharged, released or emitted, or has threatened to discharge,
release or emit Hazardous Substances into the air, water, surface water, ground
water, soil, land surface or subsurface strata or transported Hazardous
Substances to or from property currently owned, leased or used by ConnGame
except in compliance with Environmental Law and except for claims or releases
which have been remediated and for which the appropriate Governmental Authority
has delivered a “no further action” letter or similar written indications that
no additional action is required.
 
(ii)          Except as set forth in Section 3.01(t) of the ConnGame Disclosure
Schedule, neither ConnGame nor Seller has received any written or verbal
notification from a Governmental Authority that there is any violation of any
Environmental Law with respect to the business and properties of ConnGame and
neither ConnGame, New Crown, nor Seller has received any written or verbal
notification from a Governmental Authority pursuant to any Environmental Law,
and with respect to any such matter notified, none of them remain open, active
or require any further action on the part of ConnGame.

 
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(iii)          ConnGame has all licenses, certificates, consents, approvals,
qualifications, filings, declarations, registrations, exemptions, permits and
other authorizations from federal, state, foreign or local Governmental
Authorities that are necessary with respect to the conduct of the Business and
the ownership, use or operation of ConnGame Real Properties and any other assets
and properties of ConnGame (each a “Permit” and collectively, the
“Permits”).  All such Permits and the continuing validity thereof will not be
adversely affected by the consummation of the transactions contemplated hereby
and, to the extent required for the conduct of the Business by ConnGame or the
ownership or use of any of its assets and properties after Closing, all such
Permits may otherwise be transferred or assigned to CAE in accordance with their
terms and with applicable law.  To the extent so required, ConnGame, New Crown,
Seller, and Principal shall use their best efforts to cooperate with and assist
CAE so that the Permits can be conveyed, transferred and/or assigned to
CAE.  The present conduct of the Business is not dependent upon any zoning
variance or non-conforming use exception.  Section 3.01(t) of the ConnGame
Disclosure Schedule contains a list of all Permits.  There is no basis for the
revocation or withdrawal of any Permit or any non-renewal thereof upon its
expiry.  Neither ConnGame, New Crown, nor Seller has received any written or
verbal notification from the federal, state, foreign or local Governmental
Authorities that there is a violation of any Permit with respect to the business
and properties of ConnGame and neither ConnGame, New Crown nor Seller has
received any written or verbal notification from the federal, state, foreign or
local governments regarding any Permit, and with respect to any such matter
notified, none of them remain open, active or require any further action on the
part of ConnGame, New Crown or Seller.
 
(iv)          Except as set forth in Section 3.01(t) of the ConnGame Disclosure
Schedule, there are no underground storage tank systems or facilities on any
portion of the property currently owned, leased or used by ConnGame and any
underground storage tank or facility previously located thereon has either been
removed or closed in place, and ConnGame has completed all applicable
investigations and procedures required to close such tanks or tank systems in
compliance with all applicable Environmental Laws.  Section 3.01(t) of the
ConnGame Disclosure Schedule identifies all storage tanks or facilities that
have been closed in place.
 
(v)         ConnGame has never manufactured, processed, handled or sold asbestos
or products containing asbestos.  ConnGame has never manufactured or sold sand
blasting sand to third parties for use outside of ConnGame’s facilities.  Except
as set forth Section 3.01(t) of the ConnGame Disclosure Schedule, neither
ConnGame nor Seller has received notice of any claim or suit against ConnGame or
Seller for asbestos- or silica-related exposure or injury, whether by current or
former employees or third parties.
 
 
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(u)           Insurance.  Section 3.01(u) of the ConnGame Disclosure Schedule
lists all of the insurance policies of fire, liability, workers’ compensation,
fiduciary liability and other forms of insurance providing insurance coverage to
or for ConnGame in effect for the past five (5) years.  Unless otherwise set
forth in Section 3.01(u) of the ConnGame Disclosure Schedule, (i) ConnGame is
named insured under such policies, (ii) all premiums required to be paid with
respect thereto covering all periods up to and including the Closing Date have
been paid, (iii) except for any directors’ and officers’ liability insurance
policies, all of such insurance policies have been issued on an “occurrence”
basis, (iv) there has been no complete lapse in insurance coverage at any time
within the last ten (10) years, (v) there are not presently, and after the
Closing Date there will not be, any retrospective premiums due under any of such
policies, (vi) no notice of default, cancellation or termination has been
received with respect to any such policy, (vii) and all claims thereunder have
been filed in due and timely fashion.  ConnGame has delivered or caused to be
delivered to CAE true and complete copies of all current insurance policies,
binders or bonds.  Since January 1, 2009, no currently outstanding and unpaid
claims have been made by ConnGame on any of such policies.  There are no claims
outstanding against ConnGame with respect to any period for which any lapse in
insurance coverage occurred.  No claims are being handled by an insurer of
ConnGame under a reservation of rights letter.
 
(v)           Governmental and Third-Party Proceedings.  Except as set forth in
Section 3.01(v) of the ConnGame Disclosure Schedule, no consent, approval,
authorization of, or registration, declaration or filing with, any court,
Governmental Authority or any other third party is required to be made or
obtained by ConnGame, New Crown or Seller in connection with the execution,
delivery or performance by any of them of this Agreement and the Transaction
Documents to which it is a party or the consummation by New Crown and Seller of
the transactions contemplated hereby.
 
(w)           Contracts.  Section 3.01(w) of the ConnGame Disclosure Schedule
sets forth a list of all Contracts (as hereinafter defined) in existence as of
the date of this Agreement (other than those which have been performed
completely):  (A) which involve the payment by or to ConnGame of more than
$10,000 in connection with the purchase of property or goods or the performance
of services and (B) which are not in the ordinary course of its business
consistent with past practice (such contracts referred to herein as
“Contracts”).  Complete copies of all such Contracts have been made available to
CAE.  Neither ConnGame nor, to the Knowledge of Seller and New Crown, any other
party thereto, is in default under any contract listed in Section 3.01(w) of the
ConnGame Disclosure Schedule.
 
(x)             Customer Relations. To the Seller’s, New Crown’s and Principal’s
Knowledge, there exists no consideration or state of facts or circumstances
involving ConnGame’s customers, insurance carriers (the “Carriers”), employees
or sales representatives that could adversely affect ConnGame after the date of
Closing. No controversy or disagreement presently exists or has been threatened
between ConnGame and any customer or Carrier of ConnGame (including but not
limited to any allegations of errors and/or omissions). There has been no change
in the commission structures of such Carriers, and to the Seller’s, New Crown’s
and Principal’s Knowledge, there is no pending change to the commission
structure of such Carriers.
 
(y)            Intellectual Property.  Section 3.01(y) of the ConnGame
Disclosure Schedule sets forth a complete list of all of the registered
trademarks, trademark registrations, applications for trademark registration,
registered trade names, patents and registered copyrights owned by ConnGame, all
of which are owned by ConnGame free and clear of any encumbrances.  ConnGame is
not infringing any patent, copyright or trademark of any third party or
otherwise violating the intellectual property rights of any third party nor has
any claim been made or, threatened verbally or in writing against ConnGame
alleging any such violation, and there has been no violation by others of any
right of ConnGame in any trademark or copyright.  ConnGame is not a party to or
bound by any license or other agreement requiring the payment by it of any
royalty or similar payment in connection with its operations, except for
commercially available software.

 
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(z)           Affiliate Transactions.  Section 3.01(z) of the ConnGame
Disclosure Schedule contains a list of all Contracts, transfers of assets or
liabilities or other commitments or transactions, whether or not entered into in
the ordinary course of business, to or by which ConnGame, on the one hand, and
any of its Affiliates, on the other hand, are or have been a party or otherwise
bound or affected.  Except as disclosed in Section 3.01(z) of the ConnGame
Disclosure Schedule, each Contract, transfer of assets or liabilities or other
commitment or transaction set forth or required to be set forth in Section
3.01(z) of the ConnGame Disclosure Schedule was on terms and conditions as
favorable to ConnGame as would have been obtainable by it at the time in a
comparable arm’s-length transaction with a Person other than ConnGame or any of
its Affiliates.
 
(aa)             Access to CAE Information.  Seller has had the opportunity to
conduct its own independent investigation of CAE and collect and review all
materials made available by CAE to evaluate the Acquisition.  Seller, its
officers and directors and its representatives have been provided the
opportunity to ask questions of, and receive answers from, the directors and
officers of CAE concerning the business of CAE.  Seller acknowledges that it has
had access to sufficient information to understand the merits and risks
associated with the Acquisition.  To the extent that Seller has deemed it
appropriate to do so, he or she has retained, and relied upon, appropriate
professional advice concerning the tax, legal, business and financial merits and
consequences of consummating the transactions contemplated by this Agreement and
the Transaction Documents.
  
(bb)             Foreign Corrupt Practices Act.  None of ConnGame, Seller, New
Crown, any director, officer, agent or employee of any of them, and any other
Person associated with or acting for or on behalf of any of them has directly or
indirectly (1) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or public, regardless
of form, whether in money, property, or services (i) to obtain favourable
treatment in securing business, (ii) to pay for favourable treatment for
business secured, (iii) to obtain special concessions or for special concessions
already obtained, for or in respect of ConnGame (or any Affiliate thereof), in
violation of any law or otherwise constituting an offence under the Foreign
Corrupt Practices Act of 1977 of the United States, as amended (assuming for
these purposes that Seller, New Crown, and ConnGame were subject to that Act),
or (iv) in violation of any law (including without limitation any relevant and
applicable Tax laws or in relation to the payment or non-payment of any Taxes by
ConnGame, New Crown, or Seller), or (2) established or maintained any fund or
asset that has not been recorded in the books and records of ConnGame, or (3)
has violated any anti-corruption or anti-bribery laws or regulations of the PRC
or equivalent laws and regulations promulgated in any other jurisdictions.  None
of the assets and properties of ConnGame were obtained or procured through any
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other
payment to any Person, private or public, regardless of form, whether in money,
property, or services that would have violated the foregoing representations and
warranties.
 
 
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(cc)             Disclosure.  None of the representations or warranties of
Seller, New Crown or Principal contained in this Article Three and none of the
statements and information contained in the ConnGame Disclosure Schedule
referenced in Article Three or in any certificate, document or other instrument
delivered by Seller pursuant to this Agreement is false or misleading in any
material respect or omits to state a fact necessary to make the statements
therein not misleading in any material respect.  None of the representations or
warranties of Seller, New Crown and Principal contained in Article Four and none
of the information contained in the ConnGame Disclosure Schedule referenced in
Article Four is false or misleading in any material respect or omits to state a
fact necessary to make the statements in Article Four or in the ConnGame
Disclosure Schedule referenced in Article Four not misleading in any material
respect.
 
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF SELLER AND PRINCIPAL
 
 
4.01
Representations and Warranties of Seller and Principal regarding Seller.

 
Seller and Principal, jointly and severally, hereby warrant and represent to CAE
that:
 
(a)             Corporate Status.  Seller is a company duly organized and
validly existing under the laws of the British Virgin Islands and has the full
corporate power and authority to own its property, to carry on its business as
presently conducted and to enter into and to perform its obligations under this
Agreement and consummate the transactions contemplated by this
Agreement.  Seller is duly qualified to do business as a foreign corporation in
each other jurisdiction where the character or location of the business
conducted by it makes such qualifications necessary.  Seller has made available
to CAE true and complete copies of its organizational documents, as amended, and
Bylaws, as amended.
 
(b)             Third-Party Proceedings.  Seller is not bound by or subject to
any contract, agreement, law, court order or judgment, administrative ruling,
regulation or any other item which prohibits or restricts it from entering into
and performing this Agreement in accordance with its terms, or requiring the
consent of any third party prior to the entry into or performance of this
Agreement in accordance with its terms by such party.
 
 
(c)
Legal Proceedings; Compliance.

 
(i)         There are no actions, suits, proceedings, or arbitrations or
investigations pending, or to the Knowledge of Seller, threatened in any court
or before any governmental agency or instrumentality or arbitration panel or
otherwise against Seller (1) in which seek to or could restrain, prohibit,
rescind or declare unlawful, or result in substantial damage in respect of, the
transfer of the Transferred Equity as contemplated by this Agreement, or (2) in
which an adverse determination could reasonably be expected, singly or in the
aggregate, to have a materially adverse effect on Seller or its ability to
perform its obligations under this Agreement.
 
 
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(ii)       Seller is not subject to any judgment, order, decree or governmental
restriction which could reasonably be expected to have a materially adverse
effect on the operations of Seller or which would interfere with the sale of the
Transferred Equity contemplated by this Agreement.
 
(d)       Disclosure.  None of the representations or warranties of Seller and
Principal contained in this Article Four and none of the information in respect
of Seller contained in the ConnGame Disclosure Schedule referenced in this
Article Four is false or misleading in any material respect or omits to state a
fact necessary to make the statements in this Article Four or in the ConnGame
Disclosure Schedule to Article Four not misleading in any material respect.
 
4.02       Investment Representations and Warranties of Seller and Principal.
 
Seller and Principal, jointly and severally, hereby warrant and represent to CAE
that:
 
(a)       Seller has received this Agreement and carefully read such Agreement;
the decision to acquire CAE Shares has been taken solely in reliance upon the
information contained in this Agreement, and such other written information
supplied by an authorized representative of CAE as Seller may have
requested.  Seller acknowledges that all documents, records and books pertaining
to this investment have been made available for inspection by Seller, its
attorneys, accountants and purchaser representatives upon request prior to
tendering this Agreement, and that it has been informed by CAE that its books
and records will be available for inspection by Seller or its agents and
representatives at any time, and from time to time, during reasonable business
hours and upon reasonable notice.  Seller further acknowledges that it (or its
advisors, agents and/or representatives) has had a reasonable and adequate
opportunity to ask questions of and receive answers from CAE concerning the
terms and conditions of the acquisition of CAE Shares, the nature of the CAE
Shares and the business and operations of CAE, and to obtain from CAE such
additional information, to the extent possessed or obtainable without
unreasonable effort or expense, as is necessary to verify the accuracy of the
information contained in this Agreement or otherwise provided by CAE; all such
questions have been answered by CAE to the full satisfaction of Seller.  Seller
is not relying upon any oral information furnished by the Company or any other
Person in connection with its investment decision, and in any event, no such
oral information has been furnished to Seller which is in any way inconsistent
with or contradictory to any information contained in this Agreement, or
otherwise provided to Seller by CAE in writing as described above.
 
(b)       Seller meets the criteria established in each of subsections (i) or
(ii) below:
 
(i)         Seller is an “accredited investor” as such term is defined in Rule
501 of Regulation D, promulgated under the 1933 Act.
 
(ii)       Seller is not a U.S. Person, as defined in Rule 901 of Regulation S,
promulgated under the 1933 Act and Seller warrants that:
 
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(1)         Seller is not acquiring CAE Shares as a result of, and Seller
covenants that it will not engage in any “directed selling efforts” (as defined
in Regulation S under the 1933 Act) in the United States in respect of the CAE
Shares which would include any activities undertaken for the purpose of, or that
could reasonably be expected to have the effect of, conditioning the market in
the United States for the resale of any of the CAE Shares;
 
(2)         Seller is not acquiring the CAE Shares for the account or benefit
of, directly or indirectly, any U.S. Person;
 
(3)         Seller is a resident of the jurisdiction in which Seller resides;
 
(4)         the offer and the sale of CAE Shares to Seller as contemplated in
this Agreement complies with or is exempt from the applicable securities
legislation of the jurisdiction in which the Seller resides;
 
(5)         Seller is outside the United States when receiving and executing
this Agreement and that Seller will be outside the United States when acquiring
CAE Shares,
 
(6)         and Seller covenants with CAE that:
 
(A)           offers and sales of any of the CAE Shares prior to the expiration
of a period of six months after the date of original issuance of the CAE Shares
(the six month period hereinafter referred to as the “Distribution Compliance
Period”) shall only be made in compliance with the safe harbor provisions set
forth in Regulation S, pursuant to the registration provisions of the 1933 Act
or an exemption therefrom, and that all offers and sales after the Distribution
Compliance Period shall be made only in compliance with the registration
provisions of the 1933 Act or an exemption therefrom and in each case only in
accordance with applicable state securities laws; and
 
(B)           Seller will not engage in hedging transactions with respect to
Shares until after the expiration of the Distribution Compliance Period.
 
(c)       Seller (1) has adequate net worth and means of providing for current
financial needs and possible personal contingencies, (2) has no need for
liquidity in this investment; and (3) is able to bear the economic risks of an
investment in the CAE Shares for an indefinite period of time, and of losing the
entire amount of such investment.
 
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(d)       Seller understands and acknowledges that an acquirer of the CAE Shares
it must be prepared to bear the economic risk of such investment for an
indefinite period because of: (A) illiquidity of the CAE Shares due to the fact
such stock has not been registered under the 1933 Act or any state securities
act (nor passed upon by the SEC or any state securities commission), and the CAE
Shares have not been registered or qualified by CAE under federal or state
securities laws solely in reliance upon an available exemption from such
registration or qualification, and hence such CAE Shares cannot be sold unless
they is subsequently so registered or qualified (which is not likely), or are
otherwise subject to any applicable exemption from such registration
requirements; and (B) substantial restrictions on the transfer of the CAE
Shares, as set forth in this Agreement and by legend on the face or reverse side
of any certificate evidencing an ownership interest in CAE.
 
(e)       Seller either (i) has a pre-existing personal or business relationship
with CAE, its officers, directors or affiliates; or (ii) alone or with its
representatives, such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
CAE Shares.
 
(f)       Seller understands and acknowledges that an investment in the CAE
Shares is speculative in nature, and involves certain risks.
 
(g)       Seller is a not member of the Financial Industry Regulatory Authority,
or of any other self-regulatory agency which would require approval prior to any
acquisition of the CAE Shares.
 
(h)       Seller is acquiring the CAE Shares for its own investment, and not
with a view toward the subdivision, resale, distribution, or fractionalization
thereof.  Seller has no contract, undertaking, arrangement or obligation with or
to any person to sell, transfer, or otherwise dispose of the CAE Shares (or any
portion thereof hereby acquired), nor has a present intention to enter into any
such contract, undertaking, agreement or arrangement.
 
(i)       The offering of the CAE Shares was made only through direct, personal
communication between Seller (or a representative thereof) and CAE; the
acquisition of the CAE Shares by Seller is not the result of any form of general
solicitation or general advertising including, but not limited to, the
following: (i) any advertisement, article, notice or other communication
published in any newspaper, magazine, or other written communication, or
broadcast over television, radio or any other medium; or (ii)  any seminar or
meeting to which the attendees had been invited by any general solicitation or
general advertising.
 
(j)       Seller has been advised to consult with an attorney regarding legal
matters concerning the acquisition and ownership of the CAE Shares, and with a
tax advisor regarding the tax consequences of acquiring such stock.
 
(k)       Seller has not distributed this Agreement, or any other information
pertaining to the acquisition of the CAE Shares hereunder, to anyone other than
its representative and/or its investment, legal or accounting advisors in
connection with its consideration of an acquisition of the CAE Shares.
 
(l)       Seller was not organized for the specific purpose of acquiring the CAE
Shares subscribed for herein, and has other investments or business activities
besides investing in CAE, unless Seller has indicated the contrary to CAE in
writing.  Seller has specified in writing the number and character (i.e.,
individual, corporate, company, etc.) of the beneficial owners thereof.
 
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(m)       Reliance Upon Purchaser’s Representations. Seller understands that the
sale of the CAE Shares to it will not be registered under the 1933 Act on the
ground that such issuance and sale will be exempt from registration under the
1933 Act, and that CAE’s reliance on such exemption is based on Seller’s
representations set forth herein.
 
(n)       Legends. Seller agrees that the certificates for the CAE Shares shall
bear the following legend:
 
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY APPLICABLE
STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS (I) A
REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE
SECURITIES ACT OR (II) THE TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT AND, IF THE COMPANY REQUESTS, AN OPINION SATISFACTORY TO THE
COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
 
Seller agrees that CAE  may place stop transfer orders with its transfer agent
with respect to such certificates in order to implement the restrictions on
transfer set forth in this Agreement
 
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES OF CAE
 
5.01       Representations and Warranties of CAE.
 
CAE hereby warrants and represents to Seller that:
 
(a)       Corporate Status.  CAE is a corporation duly organized and validly
existing under the laws of the state of Delaware and has the full corporate
power and authority to own its property, to carry on its business as presently
conducted and to enter into and to perform its obligations under this Agreement
and consummate the transactions contemplated by this Agreement.  CAE is duly
qualified to do business as a foreign corporation in each other jurisdiction
where the character or location of the business conducted by it makes such
qualifications necessary.  CAE has made available to Seller true and complete
copies of its Certificate of Incorporation, as amended, and Bylaws, as amended.
 
(b)       Corporate Authority; Authorized and Effective Agreement.  CAE has full
legal capacity and power to execute and deliver this Agreement and the
Transaction Documents to which CAE is a party, which Agreement and Transaction
Documents have been or will, on or prior to Closing, be duly executed and
delivered by CAE and constitute the valid and binding obligation of CAE
enforceable against CAE in accordance with its terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
 
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(c)       Legal Proceedings.  Other than as disclosed in CAE’s public filings
with the United States Securities and Exchange Commission, there are no actions,
suits, proceedings, claims or investigations pending or, to the Knowledge of
CAE, threatened in any court, before any governmental agency or instrumentality
or in any arbitration proceeding against or by CAE which, individually or in the
aggregate, would have a Material Adverse Effect on CAE.
 
(d)       No Conflict.  The execution, delivery and performance of this
Agreement and the Transaction Documents, and the consummation of the
transactions contemplated hereby, by CAE do not and will not (i) conflict with,
or result in a violation of, or result in the breach of or a default (or which
with notice or lapse of time would result in a default) under, any provision
of:  (A) any federal, state or local law, regulation, ordinance, order, rule or
administrative ruling of any Governmental Authorities applicable to CAE or its
properties; (B) the Certificate of Incorporation or Bylaws of CAE; or (C) any
material agreement, material indenture or material instrument to which CAE is a
party or by which it or its properties or assets may be bound; or (D) any order,
judgment, writ, injunction or decree of any court, arbitration panel or any
Governmental Authorities applicable to CAE; (ii) result in the creation or
acceleration of any security interest, mortgage, option, lien, or encumbrance
upon any property of CAE, or (iii) violate the terms or conditions of, or result
in the cancellation, modification, revocation or suspension of, any contract,
agreement, license, approval, certificate, permit or authorization held by CAE.
 
(e)       Valid Issuance of the Shares. The CAE Shares have been duly authorized
and, when issued and delivered to Seller against payment therefor in accordance
with the terms of this Agreement, will be validly issued, fully paid and
non-assessable and will be free and clear from all Liens with respect to the
issuance of such CAE Shares and will not be subject to any pre-emptive rights or
similar rights.
 
(f)       Brokers, Finders and Others.  There are no fees or commissions of any
sort whatsoever claimed by, or payable by CAE to, any broker, finder,
intermediary or any other similar person in connection with effecting this
Agreement or the transactions contemplated hereby, except for ordinary and
customary legal and accounting fees.
 
ARTICLE SIX
FURTHER OBLIGATIONS OF THE PARTIES
 
6.01       Necessary Further Action.
 
Each of CAE, New Crown, Principal and Seller agrees to use its commercially
reasonable efforts to take, or cause to be taken, all necessary actions and
execute all additional documents, agreements and instruments required to
consummate the transactions contemplated in this Agreement including taking all
steps to secure promptly all consents, rulings and approvals of Governmental
Authorities and Carriers which are necessary for the performance by each party
of each of its obligations under this Agreement and the transactions
contemplated hereby.
 
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6.02       Further Covenants.
 
(a)       Seller and Principal covenants to CAE that it will not, without the
prior written consent of CAE, for a period of Three (3) years after the date of
Closing, either solely or jointly with or on behalf of any other Person or
otherwise, whether as a director, Seller, employee, partner, agent or otherwise:
 
(i)       carry on or be engaged or interested directly or indirectly in any
capacity (except as the owner of shares or securities listed or dealt in on an
internationally recognized stock exchange in the PRC or elsewhere held by way of
investment only) in any business which may be in competition within Hong Kong or
PRC with ConnGame in the carrying on of the Business;
 
(ii)       solicit or entice or endeavor to solicit or entice away from ConnGame
any employee, officer, manager, consultant (including employees who are
directors) of ConnGame or any Persons whose services are otherwise made
available to ConnGame on a full-time or substantially full-time basis;
 
(iii)     deal with, canvass, solicit or approach or cause to be dealt with,
canvassed or solicited or approached for business in respect of any trade or
business carried on or service provided by ConnGame any Person who at Closing or
within two (2) years prior to Closing was a customer, supplier, client,
representative, agent of or in the habit of dealing under contract with
ConnGame.
 
(b)       The Seller and Principal further covenants to CAE that:
 
(i)       it will not at any time hereafter make use of or disclose or divulge
to any Person other than to officers or employees of ConnGame whose province it
is to know the same any information relating to ConnGame other than any
information properly available to the public through no breach of its
obligations hereunder or disclosed or divulged pursuant to an order of a court
of competent jurisdiction;
 
(ii)       it will not at any time hereafter in relation to any trade, business
or company use a name including the word or symbol “ConnGame” or any other
trademark listed in Section 3.01(y) or any Chinese equivalent thereof or any
similar word or symbol in such a way as to be capable of or likely to be
confused with such trademarks and shall use all reasonable endeavors to procure
that no such name will be used by any Person with which it is connected;
 
(iii)     it will not do anything which might prejudice the goodwill of
ConnGame;
 
(iv)       it will procure that its Affiliates and their respective employees
will observe the restrictions contained in this Section 6.02.
 
(c)       Each and every obligation under this Section shall be treated as a
separate obligation and shall be severally enforceable as such and in the event
of any obligation or obligations being or becoming unenforceable in whole or in
part such part or parts as are unenforceable shall be deleted from this Section
and any such deletion shall not affect the enforceability of all such parts of
this clause as remain not so deleted.
 
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(d)       Seller and Principal agree that they shall coordinate any and all
required compliance with relevant PRC laws and regulations, particularly the
Circular on Issues Concerning the Administration of Foreign Exchange in
Financing and Round-trip Investment by Domestic Residents Through Offshore
Special Purpose Companies (“Circular 75”) issued by the State Administration of
Foreign Exchange of the PRC on 21 October 2005 and effective as of 1 November
2005, as amended and supplemented from time to time, and that all dividends and
interest that should be enjoyed by CAE as to all of the Transferred Equity will
not be affected or compromised by any Seller, New Crown or Principal violation
of Circular 75 or other relevant laws and registrations.  The foregoing shall
include the preparation and execution of contractual agreements and
arrangements, as soon as commercially possible after requested by CAE, such that
CAE shall enjoy the benefit of ownership of 60% of the results of operations of
ConnGame, including but not limited to any business cooperation agreement,
exclusive equity interest pledge agreement, exclusive option agreement, power of
attorney, and other similar agreements enforceable under PRC laws.
 
(e)       Seller and Mr. Jun Tang agree to comply with the terms, conditions,
and restrictions under that certain Amendment and Waiver Agreement dated July
13, 2010 by and among Seller, Mr. Jun Tang, The Royal Bank of Scotland N.V.,
London Branch (formerly ABN AMRO Bank N.V., London Branch); CITIC Capital China
Mezzanine Fund Limited; ABN AMRO Bank (China) Co., Ltd., Shenzhen Branch; Mr.
Luo Ken Yi; and KGE Group Limited.
 
(f)       The restrictions contained in this Section 6.02 are considered
reasonable by Seller and the other parties hereto, but in the event that any
such restriction shall be found to be void but would be valid if some part
thereof were deleted or the area of operation or the period of application
reduced, such restriction shall apply with such modification as may be necessary
to make it valid and effective.
 
6.03       Legal Opinion
 
Seller shall cause to be delivered to CAE a legal opinion issued by PRC legal
counsel with respect to ConnGame (the “PRC Opinion”).  The PRC Opinion shall
opine as to effectiveness and legality of the transfer of the Transferred Equity
to CAE, subject to the appropriate Governmental Authority’s processing of the
transfer documents and filings, and New Crown’s lawful ownership of 100% of the
equity interest of ConnGame.  In addition, the PRC Opinion shall cover the
incorporation, business operations, share capital, management, litigation,
taxes, and social security of ConnGame and the PRC Opinion shall be in the
substantially the form as previously provided to Seller and its legal counsel.
 
6.04       Additional Covenants and Agreements
 
Seller and New Crown acknowledges and agrees to the following with respect to
the sale of the Transferred Equity hereunder:
 
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(a)       To the extent that any loans of ConnGame become immediately due and
payable in full or in part as a result of the Closing and is required to make
any accelerated payments thereunder where such accelerated payments were caused
by Seller failure to obtain the consent of any lender, Seller shall be liable
for any and all costs incurred by CAE regardless of any surety or guaranty, if
any.
 
(b)       If there are any bank accounts relating to ConnGame on which a
representative of Seller is designated as an authorized signatory, immediately
after the Closing, Seller shall take any and all action necessary to cause
persons designated by CAE to become authorized signatories on such accounts such
that any disbursements made from said accounts can only be made pursuant to
instructions from the authorized signatories as designated by CAE.
 
(c)       Seller acknowledges that to the extent that ConnGame’s payments of
social insurance to PRC Governmental Authorities do not meet the statutory
requirements set forth under PRC law and ConnGame is deemed liable for payments
of social insurance with respect to any employees hired by ConnGame on or prior
to the Closing, Seller shall be liable for any and all such costs incurred by
CAE after the Closing with respect to such payments.
 
(d)       Seller acknowledges that to the extent that ConnGame does not have any
written employment agreements executed with its employees as required under the
PRC Labor Law, Seller shall be jointly and severally liable for any and all
damages incurred by CAE as a result of such employment agreements not being
executed on or before the Closing.
 
ARTICLE SEVEN
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
 
7.01       Conditions to the Obligations of CAE.
 
The obligations of CAE under this Agreement shall be subject to the
satisfaction, or written waiver by CAE prior to the Closing, of each of the
following conditions precedent:
 
(a)       All material authorizations, consents, waivers and approvals required
on the part of Seller, Principal, New Crown or ConnGame in connection with the
execution, delivery and performance of this Agreement or any Transaction
Document to which it is a party shall have been duly obtained and shall be in
form and substance reasonably satisfactory to CAE and its counsel.
 
(b)       No legal action, investigation (whether antitrust or otherwise) or
proceeding (including any petition, action or proceeding for or in relation to
the winding-up, insolvency, liquidation or dissolution of New Crown or ConnGame
or for the appointment of any receiver, trustee or similar officer of New Crown
or ConnGame or any of its assets and properties) shall have been instituted by
or threatened by any Person or Governmental Authority, in either case seeking to
restrain, prohibit, invalidate or otherwise affect the consummation of the
transactions contemplated hereby or which would, if adversely decided,
materially adversely affect New Crown or ConnGame or the Business after the
Closing Date.
 
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(c)       The representations and warranties of Seller, New Crown and Principal
set forth in this Agreement that are qualified with respect to materiality shall
be true and correct as of the date of this Agreement and as of the Closing as
though such representations and warranties were also made as of the Closing,
except that those representations and warranties which by their terms speak as
of a specific date shall be true and correct as of such date.  The
representations and warranties of Seller, New Crown and Principal set forth in
this Agreement that are not qualified with respect to materiality shall be true
and correct in all material respects as of the date of this Agreement and as of
the Closing as though such representations and warranties were also made as of
the Closing, except that those representations and warranties which by their
terms speak as of a specific date shall be true and correct as of such date.
 
(d)       Each of Seller, New Crown and Principal shall have performed in all
material respects all of its covenants and obligations under this Agreement to
be performed by it on or prior to the Closing, including those relating to the
Closing.
 
(e)       The Transaction Documents shall have been duly executed and delivered
by all parties hereto other than CAE.
 
(f)       Instruments of transfer of the Transferred Equity duly executed by the
respective registered holders thereof in favor of CAE (or such other person(s)
as it may direct) and contract notes (in a form complying with all laws, rules
and regulations of all PRC Governmental Authorities) recording the sale and
purchase of the Transferred Equity contemplated hereunder shall have been duly
executed by Seller and delivered to CAE.
 
(g)       No event or circumstance shall have occurred that would constitute a
Material Adverse Effect with respect to ConnGame, Seller, New Crown, or
Principal.
 
(h)       Seller shall have delivered to CAE (i) good standing certificate of
New Crown and (ii) a certificate of continuing registration, dated as of a date
not more than five (5) business days prior to the Closing Date (or such longer
period as may be acceptable to CAE), duly issued by the proper PRC Governmental
Authority and, if required by CAE, any other certificate duly issued by the
appropriate Governmental Authority in each jurisdiction, if any, in which
ConnGame is authorized to do business, showing that ConnGame is in good standing
and authorized to do business.
 
(i)       CAE shall have received the following documents in form and substance
satisfactory to CAE:
 
(i)       a certificate of capital verifying that CAE (or such other person(s)
as it may direct) has been registered as holding the Transferred Equity.
 
(ii)       such waivers or consents as CAE may require to enable CAE (or as it
may nominate) to be registered as the holder of the Transferred Equity, and such
other documents as may be reasonably required to give good title to the
Transferred Equity free from all claims, liens, charges, equities and
encumbrances and third party rights of any kind and to enable CAE (or as it may
nominate) to become the registered holder thereof;
 
(iii)     all title deeds and other documents of title to the Owned Properties
and any other ConnGame Real Properties to which ConnGame holds land use rights,
and all statutory books and records (including, without limitation, register of
members, register of directors, register of secretaries and all minute books),
duly written up to date, of ConnGame, its certificate of registration and
securities and common seals;
 
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(iv)       all books and accounts and other records, including without
limitation, the cheque books and bank records of ConnGame;
 
(v)       to the extent required by CAE, evidence that all guarantees given by
ConnGame in favor of third parties in respect of the performance of the
obligations of Seller or any other Person not being ConnGame have been released;
 
(vi)       powers of attorney, if necessary, on terms acceptable to CAE, under
which any of the documents referred to in this Section 7.01(i) is executed;
 
(vii)     duly executed resolutions of the board of directors of Seller, New
Crown and ConnGame in accordance with its organizational documents evidencing
the following the approval by the board of directors of Seller, New Crown and
ConnGame of the transfer of the Transferred Equity to CAE and CAE’s registration
as a equity holder of New Crown in respect of the Transferred Equity;
 
7.02       Conditions to the Obligations of Seller and Principal.
 
The obligations of Seller and Principal under this Agreement shall be subject to
satisfaction, or written waiver by Seller and Principal prior to the Closing, of
each of the following conditions precedent:
 
(a)       All material authorizations, consents, waivers and approvals required
on the part of CAE in connection with the execution, delivery and performance of
this Agreement shall have been duly obtained and shall be in form and substance
reasonably satisfactory to Seller and Principal and its counsel.
 
(b)       No legal action, investigation (whether antitrust or otherwise) or
proceeding shall have been instituted by or threatened by any Person or
Governmental Authority, in either case seeking to restrain, prohibit, invalidate
or otherwise affect the consummation by CAE of the transactions contemplated
hereby.
 
(c)       The representations and warranties of CAE set forth in this Agreement
that are qualified with respect to materiality shall be true and correct as of
the date of this Agreement and as of the Closing as though such representations
and warranties were also made as of the Closing, except that those
representations and warranties which by their terms speak as of a specific date
shall be true and correct as of such date.  The representations and warranties
of CAE set forth in this Agreement that are not qualified with respect to
materiality shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing as though such representations and
warranties were also made as of the Closing, except that those representations
and warranties which by their terms speak as of a specific date shall be true
and correct as of such date.
 
32

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(d)       CAE shall have performed in all material respects all of its covenants
and obligations under this Agreement to be performed by it on or prior to the
Closing, including those related to the Closing.
 
(e)       The Transaction Documents shall have been duly executed and delivered
by all parties hereto other than CAE.
 
(f)       CAE shall have delivered to Seller a letter of resignation of Luo Ken
Yi as Chairman of the Board of CAE, effective upon the Closing Date.
 
(g)       CAE shall have delivered to Seller resolutions of the Board of
Directors of CAE appointing Principal as Chairman of the Board of CAE, effective
upon the Closing Date.
 
ARTICLE EIGHT
SURVIVAL AND INDEMNIFICATION
 
8.01       Survival of Representations, Warranties and Covenants.
 
Notwithstanding any investigation made on behalf of CAE, Seller or Principal,
all representations and warranties set forth herein shall remain in full force
and effect until the date that is twenty-four (24) months from the Closing Date,
except for the representations and warranties contained in Sections 3.01(a)
(Corporate Status), 3.01(b) (Capitalization), 3.01(c) (Ownership of the
Transferred Equity), 3.01(d) (No Subsidiaries), 3.01(e) (Corporate Authority),
3.01(k) (Taxes), 4.01(a) (Corporate Status); 5.01(a) Corporate Status), and
5.01(b) Corporate Authority), which shall survive for the applicable statute of
limitations.  All covenants requiring performance prior to the Closing shall
expire on the Closing Date.  The covenant provided in Section 18 shall survive
according to its terms.
 
8.02       Seller and Principal’s Indemnification.
 
(a)          Subject to the terms and conditions of Section 8.03, Seller and
Principal, jointly and severally, agree to indemnify CAE and its officers,
directors, employees, Affiliates and agents and, upon and after the Closing, New
Crown and ConnGame (collectively, “CAE Indemnified Parties”) and hold each
harmless from and against any and all losses, damages, actions, proceedings,
causes of action, liabilities, claims, encumbrances, penalties, demands,
assessments, settlements, judgments, costs and expenses including court costs
and reasonable attorneys’ fees and disbursements (collectively, “Losses”)
incurred by CAE Indemnified Parties in connection with, arising out of, or
resulting from any of the following:
 
(i)       any breach or inaccuracy of any representation, warranty or statement
made by Seller or Principal in this Agreement or in any other Transaction
Document to which he/she/it is a party;
 
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(ii)       any failure by Seller or Principal to perform any agreement, covenant
or obligation of the Seller pursuant to this Agreement or any Transaction
Document to which he/she/it is a party;
 
(iii)     any and all (1) Taxes (or the nonpayment thereof) of ConnGame for all
taxable periods ending on or before the date of the Closing and the portion
through the end of the date of the Closing for any taxable period that includes
(but does not end on) the date of the Closing (the “Pre-Closing Tax Period”),
(2) all Taxes of any member of an unaffiliated, consolidated, combined or
unitary group of which ConnGame (or any predecessor of ConnGame) is or was a
member on or prior to the date of the Closing , including pursuant to Treasury
Regulations Section 1.1502-6 or any analogous or similar state, local or foreign
law or regulation, and (3) any and all Taxes of any Person (other than ConnGame)
imposed on ConnGame as a transferee or successor, by contract or pursuant to any
law, rule, or regulation, which Taxes relate to an event or transaction
occurring before or at the Closing; provided, however, that in the case of
clauses (1), (2), and (3) above, Seller and Principal shall be liable only to
the extent that such Taxes exceed the amount, if any, reserved for such Taxes
(excluding any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) as reflected on the face of the most
recent balance sheet included in the ConnGame Financial Statements;
 
(iv)       any and all (1) Environmental Laws applicable or any environmental
liability related in any way to ConnGame or Seller or any of their properties,
including without limitation, the presence, generation, storage, release,
threatened release, use, transport, disposal, arrangement of disposal or
treatment of oil, oil and gas wastes, solid wastes or hazardous substances on
any of their properties, (2) breach or non-compliance by either ConnGame or
Seller with any Environmental Law applicable to ConnGame, New Crown or Seller,
and  (3) actual or alleged presence, use, release, storage, treatment, disposal,
generation, threatened release, transportation, arrangement for transport or
arrangement for disposal of oil, oil and gas wastes, solid wastes or hazardous
substances on or at any of the properties owned or operated by ConnGame, New
Crown or Seller; or
 
(v)       any action, litigation, suit, proceeding, investigation (civil,
criminal, regulatory or otherwise), arbitration, claim, demand, grievance or
inquiry, including any assessment, notice, demand or other document issued or
action taken by or on behalf of any Governmental Authority in any part of the
world, that is pending or threatened against New Crown or ConnGame prior to or
on the date of Closing.
 
(b)          Subject to the terms and conditions of Section 8.03 and without
prejudice to the other provisions of this Section 8.02 or restricting the rights
of CAE Indemnified Parties or the ability of any of them to claim damages on any
basis, in the event of any breach or inaccuracy of any representation, warranty
or statement made by Seller, New Crown or Principal in this Agreement or in any
other Transaction Document to which he/she/it is a party, Seller, New Crown and
Principal hereby covenant to pay to CAE:
 
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(i)       the amount necessary to put ConnGame into the position which would
have existed if such representation, warranty or statement had not been breached
and had been true and not misleading; and
 
(ii)       all costs and expenses incurred by CAE, ConnGame, directly or
indirectly, as a result of such breach.
 
(c)          CAE Indemnification.  Subject to the terms and conditions of
Section 8.03, CAE shall indemnify Seller, and its agents (“Seller’s Indemnified
Parties”) and hold each harmless from and against any and all Losses, incurred
by Seller’s Indemnified Parties in connection with, arising out of, or resulting
from any of the following:
 
(i)       any breach or inaccuracy of any representation or warranty made by CAE
in this Agreement; or
 
(ii)       any failure by CAE to perform any agreement, covenant or obligation
of CAE pursuant to this Agreement.
 
8.03       Procedure for Indemnification Claims.
 
(a)          In order for a CAE Indemnified Party or a Seller Indemnified Party
(collectively referred to as an “Indemnified Party”) to be entitled to any
indemnification provided for under this Agreement in respect of, arising out of
or involving a claim or demand for a Loss made by any Person other than the
parties against the Indemnified Party (a "Third Party Claim"), such Indemnified
Party shall deliver written notice thereof to the party against whom indemnity
is sought (the "Indemnifying Party") promptly after receipt by such Indemnified
Party of notice of the Third Party Claim (and in any event within 15 days after
first becoming aware of the facts giving rise to such Third Party Claim),
describing in reasonable detail the facts giving rise to any claim for
indemnification hereunder, the amount or method of computation of the amount of
such claim (if known) and such other information with respect thereto as the
Indemnifying Party may reasonably request.
 
(b)         The Indemnifying Party shall have the right at any time to assume
the defense thereof at the expense of the Indemnifying Party with counsel
selected by the Indemnifying Party and reasonably satisfactory to the
Indemnified Party.  If the Indemnifying Party assumes the defense of such Third
Party Claim, the Indemnified Party shall have the right to employ separate
counsel and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the Indemnified Party.  If the
Indemnifying Party assumes the defense of any Third Party Claim, the Indemnified
Party shall cooperate with the Indemnifying Party in such defense and make
available to the Indemnifying Party all witnesses, pertinent records, materials
and information in the Indemnified Party's possession or under the Indemnified
Party's control relating thereto as is reasonably required by the Indemnifying
Party.  Whether or not the Indemnifying Party assumes the defense of a Third
Party Claim, if there is a reasonable probability that a claim may materially
and adversely affect the Indemnified Party other than as a result of money
damages or other monetary payments, the Indemnifying Party shall not, without
the written consent of the Indemnified Party (not to be unreasonably withheld),
settle or compromise any claim or consent to the entry of any judgment that (A)
provides for relief other than the payment of monetary damages, (B) does not
include as an unconditional term thereof the giving by the claimant to the
Indemnified Party a release from all Liability in respect to such claim, or (C)
contains an admission of Liability or violation of any applicable law.
 
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(c)          In the event any Indemnified Party should have a claim against any
Indemnifying Party hereunder that does not involve a Third Party Claim being
asserted against or sought to be collected from such Indemnified Party, the
Indemnified Party shall deliver written notice of such claim promptly to the
Indemnifying Party (and in any event within 15 days of first becoming aware of
the facts giving rise to such claim), describing in reasonable detail the facts
giving rise to any claim for indemnification hereunder, the amount or method of
computation of the amount of such claim (if known) and such other information
with respect thereto as the Indemnifying Party may reasonably request.
 
ARTICLE NINE
TAX MATTERS
 
9.01        Responsibility for Filing Tax Returns.
 
Seller shall and shall cause New Crown and ConnGame to properly prepare and file
all Tax Returns required on the part of ConnGame at any time through the date of
Closing in compliance with all applicable laws, rules and regulations.  With
respect to any Tax Return required of ConnGame to be filed after the date of
Closing covering any taxable period ending on or before the date of Closing or
any taxable period that includes (but does not end on) the date of Closing,
Seller shall provide all assistance required by CAE to enable them to prepare or
cause to be prepared and file or cause to be filed all such Tax Returns for
ConnGame, including the provision of any books of account, records and other
information with respect to any transactions and other matters occurring on or
before Closing, in any case so to permit all such Tax Returns to be properly and
accurately prepared and filed in compliance with all applicable laws, rules and
regulations.  CAE shall permit Seller to review and comment on each such Tax
Return described in the preceding sentence prior to filing.
 
9.02       Certain Taxes and Fees.
 
All transfer, including real property, documentary, sales, use, stamp,
registration and other such Taxes, and all conveyance fees, recording charges
and other fees and charges (including any penalties and interest) incurred in
connection with consummation of the transactions contemplated by this
Agreement  shall be paid by one-half by Seller when due, and such parties will
cooperate to file all necessary Tax Returns and other documentation with respect
to all such Taxes, fees and charges, including any and all stamp duty arising
from the transfer of the Transferred Equity payable or assessed.
 
36

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ARTICLE TEN
MISCELLANEOUS
 
10.01      Notices.
 
All notices, requests, demands and other communications required or permitted to
be given under this Agreement shall be given in writing and shall be deemed to
have been duly given (a) on the date of delivery if delivered by hand or by
telecopy, in the case of telecopy upon confirmation of receipt, (b) on the date
of delivery, if delivered by electronic mail, upon confirmation of receipt, or
(c) on the first business day following the date of dispatch if delivered by a
recognized next-day courier service.  All notices thereunder shall be delivered
to the following addresses:
 
 
If to Seller, Principal, or New Crown, to:

First Jet Investment Limited (“First Jet”)
65F, Shanghai World Financial Center, No.100 Century Avenue
PuDong, Shanghai
Attn:  Jun Tang
Tel:  0086-21-68776700

 
with a copy to:

If to CAE, to:
 
China Architectural Engineering, Inc.
China Architectural Engineering, Inc.
105 Baishi Road
Jiuzhou West Avenue
Zhuhai 519070
People’s Republic of China
0086-756-8538908
Attn: Luo Ken Yi
Email: luo@caebuilding.com
 
 
with a copy to:

   
 
K&L Gates LLP

 
10100 Santa Monica Blvd., 7th Floor

Los Angeles, CA 90067
Attention:  Thomas J. Poletti, Esq.
Facsimile:  (310) 552-5001
Email: thomas.poletti@klgates.com

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Any party to this Agreement may, by notice given in accordance with this Section
10.01, designate a new address for notices, requests, demands and other
communications to such party.

 
10.02     Counterparts.

This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be a duplicate original, but all of which taken together shall be
deemed to constitute a single instrument.
 
 
10.03     Entire Agreement; No Third-Party Rights.

 
This Agreement and the ConnGame Disclosure Schedule attached hereto constitute
the entire agreement, and supersede all prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter of
this Agreement, including but not limited to that certain Letter of Intent dated
December 11, 2009.  This Agreement is not intended to confer upon any person
other than the parties hereto (and their respective successors and assigns) any
rights or remedies.
 
 
10.04     Successors and Assigns.

 
This Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted assigns (including successive, as well as immediate,
successors and assigns) of the parties hereto.  This Agreement may not be
assigned by any party hereto without the prior written consent of the other
parties.
 
 
10.05     Captions

 
The captions contained in this Agreement are included only for convenience of
reference and do not define, limit, explain or modify this Agreement or its
interpretation, construction or meaning and are in no way to be construed as
part of this Agreement.
 
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10.06     Governing Law.

 
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of Delaware without giving effect to principles of conflicts or
choice of laws (except to the extent that mandatory provisions of Federal law
are applicable).
 
 
10.07     Payment of Fees and Expenses.

 
Except as otherwise provided in Section 9.02 or otherwise agreed in writing,
each party hereto shall pay its own costs and expenses, including legal and
accounting fees, incurred in connection with the preparation, negotiation and
execution of the Transaction Documents and the consummation of the transactions
contemplated hereby and all expenses relating to its performance of, and
compliance with, its undertakings herein.
 
 
10.08     Amendment.

 
From time to time and at any time prior to the Closing, this Agreement may be
amended only by an agreement in writing executed by the parities.
 
 
10.09     WAIVER OF JURY TRIAL.

 
TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY
HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART
UNDER, RELATED TO, BASED ON OR IN CONNECTION WITH THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN
TORT OR CONTRACT OR OTHERWISE.  ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION 10.09 WITH ANY COURT AS WRITTEN EVIDENCE
OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
 
 
10.10       Waiver.

 
The rights and remedies of the parties to this Agreement are cumulative and not
alternative.  Neither the failure nor any delay by any party in exercising any
right, power or privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power or privilege, and
no single or partial exercise of any such right, power or privilege will
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege.
 
 
10.11       Severability.

 
If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect.  Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
 
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered on
behalf of CAE, Seller, New Crown, and Mr. Jun Tang as of the date set forth in
the first paragraph above.
 

 
CHINA ARCHITECTURAL ENGINEERING, INC.
       
By: 
/s/ Luo Ken Yi
       
Name:  Luo Ken Yi
 
Title:  Chief Executive Officer and Chairman of the Board
       
FIRST JET INVESTMENTS LIMITED
       
By: 
/s/ Jun Tang
       
Name: 
   
Title: 
         
NEW CROWN TECHNOLOGY LIMITED
       
By: 
/s/ Jun Tang
       
Name: 
   
Title: 
         
JUN TANG
        /s/ Jun Tang

 
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EXHIBIT A
DISCLOSURE SCHEDULES
TO THE
STOCK PURCHASE AGREEMENT
DATED AUGUST 11, 2010

Capitalization and Ownership - Section 3.01(b)

Shanghai ConnGame Network Ltd. is a company organized under the laws of the
People’s Republic of China with a registered capital of RMB 10,000,000 and the
registered shareholders of Shanghai ConnGame Network Ltd. is as follows:

Shareholder
 
Jurisdiction of Organization
 
Equity Holding of ConnGame
 
New Crown Technology Limited, through legal, valid, and binding Trust Agreements
with Jun Tang (RMB 8,000,000) and Xiaolan Zhu (RMB 2,000,000)
 
Hong Kong
  RMB 10,000,000                
     Total
      RMB 10,000,000  

New Crown Limited has issued 10,000 capital shares authorized with HKD1.00 par
value and 10,000 shares issued and outstanding, 100% in the name of First Jet.

Undisclosed Liabilities - Section 3.01(h)

Not Used.

Changes in the Financial Statements - Section 3.01(i)

Not Used.

Real Property - Section 3.01(m)

 

       
Monthly
 charge
         
(US Dollars)
             
Landlord:
 
Shanghai Garden Lane Jieneng Co., Ltd
     
Premises:
 
A2-3001-A2-3024, 3/F, A2 Tower, Garden Lane, Shanghai
     
Period:
 
15/12/2009 to 14/12/2012
     
Management fee:
     
$
2,043
 
Rent free period:
 
15/12/2009 to 14/3/2010
       
Rent:
       
22,089
               
Landlord:
 
Shanghai JiaHua Property Development Co. Ltd
       
Premises:
 
Room 502, Tower 6, No 188 ,
Dong Jiang Wan Road, Shanghai
       
Period:
 
10/4/2008 to 30/4/2011
       
Management fee:
       
1,027
 
Rent:
       
5,205
 

Legal Proceedings - Section 3.01(n)

Not Used

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Employment Agreements - Section 3.01(q)

Not Used.
 
Employee Benefit Plans - Section 3.01(r)(i)

Not Used.

Compliance with Laws - Section 3.01(s)

Not Used.

Environmental Permits, Matters, Issues, … - Section 3.01(t)

Not Used.

Insurance - Section 3.01(u)

ConnGame paid all employees with government social security insurance, which
covers retirement, health, and unemployment insurances. No special insurance for
top management team.

Governmental and Third-Party Approvals - Section 3.01(v)

Not Used

Contracts - Section 3.01(w)

A list of all Contracts in existence of the date of this Agreement
1、花园坊租赁合同Garden Square Rental Agreement
2、空间188房屋租赁合同 Space 188 Rental  Agreement
3、上海《无忧工作网》服务合同 Shanghai "worry-free network " service contract
4、           项目外包制作合同 Project Outsourcing Production Contract
5、           智联招聘服务合同 Zhilian Recruitment Service Contract
6、           租用户物业管理合同 Rental property management contract
7、           技术支持服务合同 暨补充协议 Technical Support Services Contract Supplemental
Agreement
8、计算机软件著作权代理委托合同书（涡轮）Computer software copyright agent commission contract
(Turbo)
9、           计算机软件著作权代理委托合同书（天启）
Computer software copyright agent commission contract (Apocalypse)
 
Intellectual Property - Section 3.01(y)

A list of intellectual property right by ConnGame:

 
1.
" Apocalypse" game engine software Production right (Application submitted for
approval), see Annex "Apocalypse engine _ computer software copyright
registration application form"

 
2.
"Turbo-Turbo" game engine software copyright (Application submitted for
approval), see Annex "Turbo engine _ computer software copyright registration
application form"

None infringing nor bound by any license.

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Affiliate Transactions - Section 3.01(z)
 
1.
On December 31, 2009, ConnGame had outstanding short term loan due to Mr. Tang
Jun (唐骏) in the amount of $1,509,390 (RMB 10,320,000).  On January 12, 2010 Mr.
Tang Jun increased his loan to ConnGame in the amount $877,642 (RMB 6,000,000)
leading to an outstanding loan balance of $ 2,387,032 (RMB 16,320,000).  The
additional loan did not bear any interest, covenants, or collateral
requirements.  Subsequently, on January 13, 2010, ConnGame repaid Mr. Tang Jun
$1,345,698 (RMB 9,200,000) leaving an outstanding a balance of $1,041,334 (RMB
7,120,000).  On January 19, 2010, Mr. Tang agreed to convert the remaining
outstanding loan balance of $1,041,334 (RMB 7,120,000) to equity and will
register this capital with the PRC.  ConnGame does not believe that it will be
subject to any income tax consequences resulting from Mr. Tang converting debt
outstanding to him, to registered equity capital.

The loan of $1,509,390 to ConnGame was extended by Mr. Tang Jun.  At December
31, 2009, the loan bore zero interest and was payable on demand. The loan did
not securitize by any collateral.  Subsequent to December 31, 2009 the loan was
increased, and was later partially repaid, and the outstanding balance was
converted to an equity interest.   Refer to Note 8 “Subsequent Events” for
further details.

2.
On January 8, 2010, Ms. Wang Su Ping transferred her entire interest in ConnGame
to Mr. Tang Jun.  Her entire interest represented the registered capital amount
of $48,627 (RMB 400,000) equaling 80% ownership interest in ConnGame.

3.
On January 13, 2010, ConnGame increased its registered capital from $60,334 (RMB
500,000) to $1,449,914 (RMB 10,000,000).  The increase of capital was a result
of an investment made by Mr. Tang Jun and Ms. Zhu in the amounts of $1,111,664
(RMB 7,600,000) and $277,916 (RMB 1,900,000), respectively, totaling $1,389,580
(RMB 9,500,000).  As a result of the above capital transactions, Mr. Tang Jun
and Ms. Zhu own 80% and 20% ownership interest in ConnGame, respectively.

4.
As of March 31, 2010 there was $1,404,084 (RMB 9,600,000) of capital under
ConnGame’s name invested in Shanghai Boke Information Technology Co. Ltd.
(“Boke”).  The investment was made in trust on behalf of Mr. Tang Jun. ConnGame
has agreed to return the shares to Mr. Tang Jun on a future agreed upon
date.  It is probable that Boke will become public listed corporation in the
PRC.  Mr. Tang Jun is responsible for any fees or potential capital gains tax
from the future transfer of the asset back to Mr. Tang Jun.  ConnGame has no
direct benefit or risk for the shares registered in its name.  All risk and
related reward of the investment are borne by Mr. Tang Jun.

 
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