Exhibit 10.1
 
Equity Transfer Agreement
 
 
Date: October 1, 2008
 
Beijing
 

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This Agreement is made and entered into on October 1, 2008 in Beijing by and
between the following parties:

Transferee: Beijing PKU Chinafront High Technology Co., Ltd., a company duly
organized and validly existing under the laws of the People’s Republic of China
( “Party A or Transferee”), having its legal domicile at 7th Floor, Tower B,
E-wing Center, No. 113 of Zhichunlu, Haidian District, Beijing, PRC.

Transferors: Qing Lu, Xiaohong Chen, Hangfei Lin, Gang Li, Jianzhong Zhang and
Jieqing Guo (collectively “Party B or Transferers”)

Recitals

WHEREAS on Feb 6th, 2007, the Transferors jointly formed Shanghai Yootu
Information Technology Co., Ltd. (the “Target Company”), a company duly
organized and validly existing under the laws of the People’s Republic of China
and mainly engaged in the business of processing and releasing of real-time
traffic information, having its key technologies in the system for receiving,
processing and releasing floating car data.

WHEREAS the Registered Capital of the Target Company is RMB two million (RMB
2,000,000), and the Transferors are the all existing shareholders of the Target
Company, holding one hundred percent (100%) of the equity interest in the Target
Company as of the date herein. The Transferors agree to transfer the one hundred
percent (100%) of the equity interest they hold in the Target Company to the
Transferee, with the consideration specified in Section 2.2 and in accordance
with other terms and conditions contained herein, and the Transferee agrees to
purchase all the equity interest and rights pertaining thereto under the
aforesaid transfer pursuant to the terms and conditions herein.

NOW THEREFORE the Parties to this Agreement, through amicable consultation based
on the principle of equality, willingness and mutual benefit, hereby agree as
the follows in accordance with the terms and conditions herein:

Article 1 Definitions

1.1 In this Agreement, unless the context otherwise states, the following terms
shall have the following meanings:

(1) “China” shall mean the People’s Republic of China (excluding Hong Kong SAR,
Macau SAR and Taiwan);

(2) “RMB” shall mean the statutory currency of the People’s Republic of China;

(3) “Shares” shall mean the shareholder’s equity right enjoyed by the current
shareholders in proportion to their respective paid-up and actually invested
registered capital pursuant to the relevant legal documents as percentage of the
registered capital in the Target Company. Generally the shares can be
represented by share certificates or equity interests. In this Agreement the
shares are to be represented in the form percentage;
 
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(4) “Equity Transfer” shall mean the Transferors’ transfer of the one hundred
percent (100%) of the equity interest they hold in the Target Company in
accordance with the terms and conditions and the agreements herein;

(5) “Transfer Price” shall mean the price specified in Sections 2.2 and 2.3;

(6) “Transfer Completion Date”, shall mean the definition as given in Section
5.1;

(7) “Current shareholders” shall mean the shareholders of the Target Company as
specified in the Commercial Registration and the Articles of Association of the
Target Company, which shall include all the current shareholders of the Target
Company, before the Agreement is executed and becomes effective;

(8) “Option” shall mean the consideration obtained by the Target Company as a
result of transferring the equity interest upon satisfying the provisions set
forth in Sections 3.2 and 3.3 herein, the consideration for the 5% shares as
granted to the key personnel who have mastered the key technologies; the key
personnel and percentages of distribution among them will be described in
Exhibit 5 of this Agreement;

(9) “Key technologies” shall mean the technologies as set forth in Exhibit 6
attached hereto;

(10) “Sales revenue” shall mean the revenue that the Target Company actually
generates from its main business in relation to its key technologies, i.e. real
time traffic information service (not including regular project revenue) that
has actually been recognized on the book; such sum shall be calculated on an
accrual basis under the US GAAP;

(11) “Net Income” shall mean the net income that the Target Company actually
generates from its main business in relation to its key technologies, i.e. real
time traffic information service (not including regular project revenue) less
the annual cost of the year that has actually been recognized on the book; such
sum shall be calculated on an accrual basis under the US GAAP; and

(12) the “Agreement” shall mean the entire agreement, all exhibits and other
documents agreed by both Party A and Party B to be attached hereto as exhibits;

1.2 Articles, sections, subsections and exhibits shall respectively refer to the
articles, sections, subsections and exhibits contained herein;

1.3 The headings contained herein are made for convenience and shall in no case
affect the interpretation and understanding of the Agreement.
 
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Article 2 Equity Transfer

2.1 Both Party A and Party B agree that the Transferee shall pay the
Transferorssuch amount of cash and shares defined in Section 2.2 as
consideration for purchasing the transferred equity interest pursuant to the
terms and conditions under Article 4 of the Agreement.

2.2 The Transfer Price with which Party A acquires the one hundred percent
(100%) of the equity interest shall be: maximum RMB 8.8 million and the
consideration as represented by the net income of Party B for fiscal years 2009
and 2010, respectively as set forth in Article 3 of the Agreement.

2.3 The Transfer Price shall mean the purchase price to acquire the transferred
equity interest, including all shareholders’ interests pertaining to the equity
interest transferred. Such shareholder’s interests shall mean all existing and
prospective interests as pertaining to the equity transferred, including all
interests as represented by one hundred percent (100%) of the movable property,
fixed assets and tangible/intangible assets. The Transfer Price shall exclude
the following: (a) any debt or amount payable of the Target Company not
explicitly specified in Exhibits 2 attached hereto (the “Undisclosed Debt”), and
(b) the depreciation, damage, reduction or loss of use value of the Target
Company’s exiting property as compared with the lists in Exhibits 4, 5 and 6
(collectively the “Impairment Loss”)

2.4 If any Undisclosed Debt exists, then Party B shall assume the liability of
paying off such debts to the extent of one hundred percent (100%) of the amount
in debt.

2.5 Party B agrees that upon execution of the Agreement it shall prepare all
documents necessary for registering the equity transfer under the Agreement and
shall engage the persons as appointed by the parties to complete all necessary
registration regarding the equity transfer with the Administration of Industry
and Commerce. The parties to the Agreement shall, with their utmost effort
including but not limited to sign all necessary legal documents as required by
relevant commercial departments and administration of industry and commerce ,
cause the registration of the equity transfer to be completed as soon as
possible.

Article 3 Payment and Delivery

3.1 Party A shall pay the initial transfer price of RMB 8.8 million (RMB
8,800,000) to Party B within five (5) business days following the date of this
Agreement. Upon the satisfaction of all the terms and conditions set forth in
Sections 3.2, 3.3 and 3.4 herein, Party A shall pay the second and the third
installment of the transfer price according to the following payment terms set
forth in Sections 3.2 and 3.3.
 
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3.2 Party A shall on the later of (1) January 1 2010 and (2) the completion of
the audit of financial statements of Party B as of and for the fiscal year
ending December 31, 2009 pay the following consideration to Party B:
 
Consideration of 2009 = the audited net income of the Target Company of fiscal
year ending December 31, 2009 * 2.
 
Payment Terms: 50% in cash plus the number of shares of China TransInfo
Technology Corp. in value equivalent to the remaining 50% of the consideration.
The per share price of such shares shall be the 30-day average of the closing
priceimmediately before the end of 2009 and the exchange rate being the 30-day
average of the closing price of RMB against USD immediately before the end of
2009 shall apply. The paid shares shall be locked up for one year from their
issuance date. If the Target Company experiences losses in 2009 then no
consideration shall be paid. If on July 1 2010 there is any bad debt or
outstanding receivable recorded in the recognized income of 2009, such bad debt
or outstanding receivable shall be charged into the expenses of 2010.
 
3.3 Party A shall on the later of (1) January 1 2011 and (2) the completion of
the audit of financial statements of Party B as of and for the fiscal year
ending December 31, 2010 pay the following consideration to Party B:
 
Consideration of 2010 = the audited net income of the Target Company of fiscal
year ending December 31, 2010 * 3.
 
Payment Terms: 50% in cash plus the number of shares of China TransInfo
Technology Corp. in value equivalent to the remaining 50% of the consideration.
The per share price of such shares shall be the 30-day average of the closing
price immediately before the end of 2010 and the exchange rate being the 30-day
average of the closing price of RMB against USD immediately before the end of
2010 shall apply. The paid shares shall be locked up for one year from their
issuance date. If the Target Company experiences losses in 2010 then no
consideration shall be paid. To ensure that the net income of 2010 is
represented truthfully and validly in the financial statements, Party A may
withhold any cash consideration in the amount of any outstanding receivable
however recognized as income from January 1 2010 to December 31 2010, i.e. the
amount of any outstanding receivable recognized as income multiplied by 3. If
the amount withheld is greater than the aggregate cash consideration of 2010,
Party A may withhold the amount of the share consideration in a value equivalent
to the difference. Such withholding shall be released upon repayment of all
outstanding receivables recognized as income and the whole receivable of related
contracts in 2010.
 
3.3.1 For the definitions of Net Income and Sales Revenue refer to Sections
1.1.10 and 1.1.11 of the Agreement. The amount of the net income and sales
revenue shall be calculated on the accrual basis under US GAAP and shall be
verified and confirmed by the accounting firm designated by the Transferee.
 
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3.4 The initial transfer price paid by the Transferee to the Transferors
pursuant to Section 3.1 hereunder shall be deposited into a bank account as
designated by the Transferors, and the Transferors agree to pay off all the
debts as set forth in Exhibit 2 hereto within 5 days after the receipt of the
aforesaid payment. Any payment left over from satisfying the debts may be
distributed among: (a) the Transferors of the Target Company in proportion to
their percentage of ownership; or (b) the Transferors according to the
proportion of distribution as determined and agreed by the Transferors.
 
3.5 The Transferors shall reserve the shares of China TransInfo Technology Corp.
for the key technical personnel according to the proportion as set forth in
Exhibit 5. Such key technical personnel may waive the right for the above
options; however no such options shall be transferred, used as guarantee or for
paying debts by the technical personnel. The Transferee shall also pay the
transfer price to the technical personnel of the Target Company in proportion as
set forth in Exhibit 5
 
3.6 If before the payment of the remaining consideration of 2009 and 2010, the
Transferee discovers any Undisclosed Debts and/or Impairment Loss in its
property, then the Transferee shall have the right of deducting such amount of
the Undisclosed Debts and/or devaluation of property as percentage of the
aggregate Transfer Price from the remaining amount payable to the Transferors .
If such Undisclosed Debts and/or devaluation of property is discovered after the
whole amount of the Transfer Price has been paid by the Transferee to the
Transferors , then the Transferors shall refund such amount of Transfer Price
equal to the Undisclosed Debts and/or devaluation of property as percentage of
the aggregate Transfer Price to the Transferee.
 
3.7 Party B shall complete the registration of the business alteration within 15
business days after its receipt of the initial transfer price under Section 3.1.
 
3.8 Relevant tax and other charges arising out of the equity transfer under the
Agreement shall be paid by the Transferee and the Transferors respectively in
accordance with the relevant laws and regulations.
 
Article 4 Preconditions for Share transfer
 
4.1 Only when the following precondition are fulfilled within 30 days from the
date the Agreement shall the Transferee perform its obligations of the payment
of the Transfer Price as set forth in Article 3 of the Agreement.
 
(1) The Transferors have completed all legal procedures as necessary for
transferring its equity interest in the Target Company to the Transferee;
 
(2) Party B has provided the resolution of the shareholders of the Target
Company approving the equity transfer;
 
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(3) The Transferors should have singed a declaration for possible tax arising
from the equity transfer before the Transfer Completion Date;
 
(4) The Target Company should have acquired the ownership of the key
technologies as set forth in Exhibit 5 attached hereto and should have had the
full control over such technologies;
 
(5) The key technical personnel should have transferred all source code and
documents as set forth in Exhibit 6 to the Target Company and the personnel
designated by the Transferee; and
 
(6) The Target Company should have entered into the Confidentiality &
Non-Competition Agreement attached hereto as Exhibit 7 with the key technical
personnel who control the key technologies.
 
4.2 The Transferee shall have the right in its discretion to waive any and all
preconditions as set forth in Section 4.1. Such decision of waiver shall be made
in writing.
 
4.3 If any of the preconditions as set forth in Section 4.1 is not fulfilled
within the specified time and such precondition is not waived by the Transferee,
then the Agreement shall be terminated automatically; and any right, obligation
and responsibility under the Agreement shall become invalid and no longer
binding on both parties, and the Transferors shall not claim any Transfer Price
against the Transferee under the Agreement, and shall, no later than 7 business
days after the termination of the Agreement, refund in full amount of the
Transfer Price the Transferee has already paid to the Transferor pursuant to
Section 3.1 herein together with any interest accrued from the payment during
such period.
 
4.4 If the Agreement is terminated pursuant to Section 4.3 and the equity
transfer has been registered, then the parties agree that they shall work
together with necessary efforts to cause such equity interest to be transferred
from the Transferee back to the Transferors.
 
Article 5 Equity Transfer Completion Date
 
5.1 The Agreement shall come into force when signed by the authorized
representatives of both parties and the Transferee shall be entitled to the
transferred equity interest and become the only shareholder of the Target
Company upon completion of all legal procedures for alteration and registration
required for transferring the equity interest. However, the rights and
obligations shall not be finally fulfilled until the preconditions set forth in
Article 4 are satisfied within the specified time period under Section 4.1 and
the Transfer Price has actually been paid to the transferors by the Transferee.
 
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Article 6 Structure of Corporate Governance
 
6.1 Upon the execution of the Agreement, the Transferee has the right to appoint
a financial controller to the Target Company. The common seal, special seal for
contact, and the special financial seal shall be kept by the relevant person
designated by the financial controller appointed by the Transferee and the
private seal of the legal representative shall be kept by the current person in
charge of finance of the Target Company .
 
6.2 Upon the completion of the equity transfer, the Board of Directors of the
Target Company shall consist of 5 members, 4 of whom are recommended by the
Transferee with the remaining 1 recommended by the Transferors.
 
6.3 Upon the completion of the equity transfer, the structure of corporate
governance is subject to the Company Law and relevant regulations of the
Transferee’s parent company.
 
Article 7 Representation and Warranties of the Transferee
 
7.1. Representation and Warranties of the Transferee shall be true, complete and
accurate.
 
7.2 The Transferee has the full power, rights and capacities for execution,
delivery and performance of the Agreement, and can act as the subject of
litigation. Party A's execution and performance of the Agreement shall not
violate any relevant laws and regulations or government order, nor breach any
contract or agreement binding upon Party A or its assets thereof.
 
7.3 Legality of the Share Transfer payments. Beijing Zhangcheng hereby warrants
that its Share Transfer payments for subscription for transferers' shares of the
Company are legal, and it has full power and capacity to make the Share Transfer
payment to the transferers subject to the terms and conditions of the agreement.
 

Article 8 Representation and Warranties of the Transferors

8.1 The Transferors hereby represent and warrant as follows to the Transferee:

8.1.1 Authorization. Authorized representative of the Transferors has all the
necessary rights and authorization for execution and performance of the
Agreement and fulfillment of the transactions contemplated by the Agreement. The
Agreement shall be binding upon the Transferors and the Target Company.

8.1.2 No Conflict. The execution and performance of the Agreement does not
breach, conflict with the articles of association or bylaws of the Target
Company, nor violate any mandatory stipulations of Chinese laws and regulations;
the Transferors and the Target Company have acquired all necessary consent or
authorization from a third party in respect of the transactions hereunder.
 
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8.1.3 Duly existing. The Target Company is a limited liability company duly
incorporated and existing under relevant laws.

8.1.4 Investment. The Target Company does not as of the date of this Agreement,
invest in or operate, including but not limited to, its subsidiaries, branch
companies, representative offices or branches; or any other entity controlled
directly or indirectly by the Target Company or any other entity in which the
Target Company holds shares.

8.1.5 Financial statements. The financial statements (including balance sheets,
profit & loss statement and cash flow statement) for the period ended September
30, 2008 (“Balance Sheets Date”) in Exhibit 2 represents the real, complete and
accurate operation state and financial position of the Target Company in related
periods and on related base day. All the Target Company's audit accounts and
management accounts (including transfer accounts) have been kept in compliance
with relevant Chinese finance and accounting system in conjunction with the real
condition of the Target Company, which represent the real and fair financial
position and operation state of the Target Company during the period of relevant
accounts. The Target Company's financial records and data are in full compliance
with Chinese laws and regulations and the principles of Chinese Accounting
Standard.

8.1.6 Undisclosed liabilities. The normal liabilities of the Target Company
shall not have any material and adverse effect on the Target Company or its
shareholders. In addition, the Target Company does not have any other
liabilities not represented in the balance sheets nor has the Target Company
ever furnished other parties with security of guaranty or any pledge, mortgage
or any other security interests with respect to any of its material assets.

8.1.7 Capital structure. The capital structure of registered capital of the
Target Company in its articles of association and its amendment with filing and
registration with the Administration for Industry and Commerce is consistent
with that in the articles of association and its amendment provided by the
Transferors to the Transferee, which represents the complete and accurate
capital structure of the Target Company prior to the date of this Agreement.
Except as set forth above, no shares of capital stock or other voting securities
of the Target Company are issued, reserved for issuance or outstanding.

8.1.8 Absence of Certain Changes or Events. From the Balance Sheet Date to the
date of this Agreement, unless otherwise specified in the Agreement and approved
by the Transferee in written form, during such period there has not been:

(a) any prepayment of the liabilities by the Target Company;
 
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(b) any security of guaranty or any mortgage, pledge or any other security
interest created by the Target Company;

(c) any exemption of its creditor’s rights upon other s or wavier of its rights
of claim;

(d) any amendment to any existing contracts or agreements;

(e) any bonus granted to any executive officers, directors, employees, sales
representatives, agents or advisors or any increase of their income in any other
form, or the salaries of the five persons with the highest salary in the Target
Company, CEO, President, COO and CFO by ann aggregate of 10% within any period
of twelve months;

(f) any incurrence of loss (whether or not the insurance has bought), or
deterioration of relationship with the Target Company’s suppliers, customers or
employees, which may lead to materially adverse impact on the Target Company;

(g) any change of the method of accounting calculation, accounting policy or
principles, or rules and regulations of financial accounting of the Target
Company;

(h) any transfer, or any license granted to others for the use of the
intellectual property of the Target Company except for the normal business of
the Target Company;

(i) any material change with respect to regular sales or accounting method,
employment policy, or related rules and regulations;

(j) have materially adverse change with respect to the Target Company's
financial position; or any other transactions rather than the regular business
incurring responsibilities;

(k) any resolutions at shareholders' meeting or board resolutions of the Target
Company which are different from those approved at annual general meeting with
respect to the Target Company’s routine business, except for those made
particularly for the performance of the Agreement;

(l) any declaration, payment, or causing the payment of any dividend, bonus or
distributions in other forms;

(m) (i) any sale, mortgage, pledge, lease, transfer or disposition of assets out
of its normal business scope of which the underlying transaction value reaches
over RMB 30,000, (ii) any disposition of any fixed asset or approval of the
disposal of its fixed asset by others, giving up the control over the assets of
the Target Company, entry into any contract which may result in the fixed assets
expenditure, or incurrence of any other responsibilities, except for those
incurred in the ordinary course of business of the Target Company; (iii) any
expenditure over RMB 30,000 that is out of the Target Company’s ordinary course
of business, or purchase of any tangible or intangible assets (including the
equity interest in any company);
 
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(n) any transaction or action that is not within the ordinary course of the
Target Company’s business; or

(o) any action or inaction which may lead to the above events.

8.1.9 Tax. The Target Company has filed all the tax returns required by the laws
and regulations of China, and has paid all the tax payables.

8.1.10 Asset. The Target Company has the full power and right to own and use all
their assets as set forth in Exhibit 8.

8.1.11 Fixed assets. The Target Company has clear and legal property rights over
its fixed assets, and has furnished the Transferee with relevant supporting
documents in respect of the title and use right of the Target Company’s fixed
assets. There is no mortgage, security of guaranty or any third party’s claim
over such fixed assets.

8.1.12 The Transferors hereby warrant that all the duplicated documents of the
existing, effective written contracts of the Target Company have been furnished
to the Transferee, which are true copies of the originals, and that such
contracts are valid and duly operative. In addition, the Target Company does not
have any of the following contracts, agreements or documents binding upon the
Target Company or to which the Target Company is a party, or violation of the
terms and conditions or obligations of such contracts, agreements or documents,
which:

(a) are not made in the ordinary course of business;
 
(b) are not made on a fair base;
 
(c) result in the Target Company's loss or prejudice to the Company's interests;
 
(d) can not be implemented with adequate efforts and expenditure; or
 
(e) limit the Target Company's free operation.
 
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8.1.13 Intellectual property. Unless otherwise disclosed in the Disclosure List,
the Target Company has the legal title of or rights to use all the intellectual
properties being used by the Target Company (including but not limited to
patent, trademark, copyright, know-how, domain name and business secret), and
the Target Company has acquired all the necessary authorization or license of
the intellectual property with regard to a third party's intellectual property
during its operation (including but not limited to the intellectual property
license for the services with regard to providing value-added services). The
Target Company does not infringe upon any others' intellectual property rights,
business secret, know-how or similar rights, and is not involved in any claim,
dispute or proceedings, which remain unresolved or may occur, against the
Company due to the infringement upon any third party's intellectual property
rights, business secret, know-how or similar rights. The Target Company has
officially registered its trademark, patent, software copyright and domain name
with relevant authorities.

8.1.14 Litigation. There is no any of the following events which may have
materially adverse impact on the Target Company, or have adverse impact on the
execution, validness and enforceability of the Agreement and the Equity Transfer
thereof, whether it is implemented, remain unresolved or may occur:

(a) penalty, ban or order against the Target Company from any government
authorities;
 
(b) proceedings or dispute against the Target Company such as civil, criminal
and administrative actions and arbitration

8.1.15 Compliance. The Target Company's current operation is in full compliance
with the existing laws and regulations, rules and other provisions issued by
relevant administrations of China, and the code of telecom operators
(collectively “Laws and Regulations”), and the Target Company does not violate
any of such Laws and Regulations which may lead to material and adverse impact
on the Target Company's operation or its assets.

8.1.16 Employees.

(a) All the employees of the Target Company abide by relevant applicable labor
laws;

(b) There are not any labor disputes or potential labor disputes between the
Target Company and its employees and former employees;
 
(c) The Target Company does not have any economic compensation, payable but not
paid, to pay due to termination of the labor contracts, or similar obligation to
pay the indemnity or compensation costs with regard to employment;
 
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(d) The Target Company has fully paid and/or withheld employees' social
insurance fund or welfares in accordance with relevant laws and regulations,
including endowment insurance, housing fund, medical insurance, unemployment
insurance and other payable insurance or welfare as per relevant laws and the
agreements, and therefore does not have any existing or potential disputes
concerning such social insurance and welfares.

8.2 Special representation and warranties. Besides the general representation
and warranties set forth above, the Transferors and the Target Company further
represent and warrant as follows:

8.2.1 all the documents including account books, records of equity changes,
financial statement and other records of the Target Company have been kept
subject to business rules and controlled by the Target Company, and all the
principal transactions in connection with the Target Company's operation have
been recorded in an accurate and regular way;

8.2.2 as of the date of this Agreement, all the documents of the Company
including the minutes of board meetings and meetings of shareholders' conference
and shareholder list have been kept safely, in which all necessary events
required by such documents are recorded well and truly;

8.2.3 ever since the Balance Sheet Date, (1) except for the normal operation,
there are not any events giving rise to advanced debt maturity; (2) except for
the normal operation, there are not any assets of the Target Company disposed or
out of the Target Company's control, and the Target Company has not reached any
agreement which might give rise to additional financial expenditure, nor have
any responsibility thereof;

8.2.4 the Target Company has submitted to tax authorities all required
information; and up to the date of this Agreement, the Target Company does not
have any disputes with tax authorities regarding tax responsibility or potential
tax responsibility or tax incentives;

8.2.5 the Target Company has the financial documents for normal taxing and tax
payment, and all the necessary supporting documents for tax incentives with the
approval by relevant government departments;

8.2.6 except for the employee benefit, social and endowment insurance in
accordance with the Labor Law of the People's Republic of China and relevant
provisions, the Target Company does not provide any other incumbent, retire or
elderly welfares or insurance.
 
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8.3 Good Title. The Transferors are the record owners of the equity interest of
the Target Company, and upon the execution of the Agreement, there is no
mortgage, pledge, security interest, lien, impediment or other limits in any
form on such equity interest, , and the Transferors hold the equity interest
only for its own account rather than proxy holding for any other third party.

8.4 Information disclosure. All the documents, material facts and information,
provided to the Transferee by the Transferors and the Target Company prior and
after the execution of the Agreement, are true, accurate, without omission and
not misleading.

8.5 The Transferors shall take all necessary measures to demand the trade
receivables listed in Exhibit 2 be paid as soon as possible.

8.6 Shares lock-up. The shares that the Transferors acquire from the
Transferee’s parent company listed on a U.S. stock market shall be locked up for
one year following the date of issuance.

8.7 Further Promises of the Target Company and the Transferors.

8.7.1  Company operation. During the period from the execution of the Agreement
up to the alternation registration with the Administration for Industry and
Commerce accepted by the Parties, unless as is specified in the Agreement and
the Exhibits to the Agreement or approved by the Transferee in written form, the
Transferors and the Target Company promise that they shall:

(a) be operating in an ordinary course of business. They will continue to
develop its relationship with customers so that the Target Company's reputation
and operation will not experience materially adverse influence after the capital
increase and transfer of equity;

(b) pay the due payables and other liabilities in the ordinary course of
business, and shall not make any unusual transactions thereby incurring unusual
liabilities. Except for the ordinary course of business, the Target Company
shall not repay the loan, or disburse trade payables in advance or delay;

(c) perform the contracts, agreements, or other documents in respect of the
Target Company's assets and business in a timely manner;
 
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(d) not reconcile or waive, alter its request or other rights without the
written approval by the Transferee, except for the ordinary course of business;

(e) make their best efforts to maintain the legal operation of the Target
Company, and shall not separate, nor merger with any third party or acquire the
assets or business of a third party;

(f) not breach the representation and warranties in the Agreement through action
or inaction;

(g) inform the Transferee in writing of relevant events, facts, conditions,
changes or other information which have had or might have materially adverse
impact on the Target Company in a timely manner; and

(h) handle the tax affairs of the Target Company as usual in full compliance
with relevant laws and regulations.

8.7.2  Information collection. During the period from the execution of the
Agreement up to the alternation registration with the Administration for
Industry and Commerce, the Transferors shall provide, at the reasonable request
of the Transferee and its representatives, all relevant documents of the Target
Company to the Transferee and its representatives during business hours,
including but not limited to all necessary accounts, records, contracts,
technical documentation, personnel information, management situation and other
documents to the lawyer, accountant and other representatives appointed by the
Transferee; in order to assist the Transferee in reviewing the documents in
respect of the Target Company's properties, assets and business and those
mentioned in the Agreement, the Transferors shall permit the Transferee to meet
or contact the customers and creditors of the Target Company. The Transferors
agree that the Transferee has the full rights to conduct detailed due diligence
investigations in respect of the Target Company's financial position, asset
conditions and operation status at any time prior to the equity transfer.

Article 9 Liability for Breach of Agreement

9.1  Any breach of or failure to perform its representation, warranties,
obligations or responsibilities by one party shall constitute the default.

9.2  Unless otherwise specified in the Agreement, in case of any other
additional expenses, responsibilities or loss incurred to the other party due to
the default of one party, the defaulting party shall indemnify the innocent
party for such expenses, responsibilities or losses (including but not limited
to interests and counsel fees, paid or lost due to the default). The total
amount of the indemnification the defaulting party has to pay to the innocent
party shall be equal to the loss due to such default activity and in addition,
the defaulting party shall pay the innocent party 20% of such loss due to the
default above as penalty.
 
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Article 10 Information Disclosure and Confidentiality

10.1  Unless otherwise specified in the Agreement, the terms and conditions
hereunder in respect of Equity Transfer (including all terms and conditions
hereunder, the Exhibits and any other relevant documents relating to investment)
are confidential and shall not be disclosed to any third party. If required by
relevant laws, the disclosing party shall discuss with the other party the
disclosure and submission of relevant information within reasonable time prior
to the disclosure and submission.

10.2  Unless otherwise specified in the Agreement, the Parties shall make their
best efforts to keep confidential any business information, material facts and
relevant documents in any form, which are related to the Parties hereto due to
the performance of the Agreement.

10.3  The Parties shall cause their respective directors, executive officers and
other employees, and the directors, executive officers and other employees of
affiliated companies to perform the confidentiality obligation set forth in this
Article.

10.4  In case the Agreement is terminated for any reason, the provisions in this
Article shall maintain their original validity.

Article 11 Supplement, Modification, Amendment and Termination

11.1  After the execution of the Agreement, the Parties may enter into any
written supplemental agreements upon mutual consultation, which shall take
effect upon due execution of the Parties hereto.

11.2  The Agreement may be modified or amended upon mutual consultation. Any
modification or amendment to the Agreement shall be in writing, which shall take
effect upon due execution of the Parties hereto.
 
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11.3  Termination. The Agreement may be terminated as follows:

11.3.1  The Parties make written agreement to terminate the Agreement and define
the effective date of termination;

11.3.2  One party shall inform the other party in writing of the termination of
the Agreement within ten (10) business days prior to the effective date of the
termination which shall be contained in the notification, in the event that:

(a) the other party’s representation or warranties are found not true or have
material omission when made or on the date of this Agreement;

(b) the other party fails to comply with the terms, promises and obligations
under the Agreement, and fails to take effective remedial actions within ten
(10) days upon receipt of written notification from the party.

11.3.3  Where the Equity Transfer set forth in Article 3 hereunder can not be
closed within one (1) month as of the date of this Agreement, Party A shall have
the right to terminate the Agreement.

11.4 Validity of termination.

11.4.1  In the event that the Agreement is terminated as per any clause
aforementioned, the Agreement shall be null and void;

11.4.2  Upon the termination of the Agreement, the Parties shall adhere to the
principles of equity, fairness and credit and return to the other party the
considerations obtained pursuant to the Agreement, making their best efforts to
seek restitution in integrum;

11.4.3  Upon the termination of the Agreement, all rights and obligations of the
Parties under the Agreement shall be terminated, and one party shall not demand
any claim against the other party in respect of the Agreement and its
termination, except the responsibilities set forth in Article 9 of the
Agreement.

Article 12 Force Majeure

12.1  Any delay in or failure of performance by either party of all or any of
their obligations under this Agreement shall not constitute a breach hereunder
if, and to the extent that such delays or failures are caused by Force Majeure,
provided that necessary remedial measures shall be taken to reduce the damage
under proper condition.
 
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12.2  The affected party shall inform the other party(ies) of the occurrence of
Force Majeure in writing within three (3) business days after the occurrence of
Force Majeure, and furnish the other party(ies) with descriptions of Force
Majeure and proving documents issued by local competent notaries for such
failure of or delay in performance of all or any of its obligations within
fifteen (15) business days after the occurrence of the Force Majeure. The
Parties may determine whether to terminate the Agreement, or partially exempt
the performance of the Agreement, or prolong the performance of the Agreement.
In the event that the Parties can not reach an agreement within sixty (60) days
after the occurrence of Force Majeure or events, the party affected by Force
Majeure or events has the full right to terminate the Agreement, and any party
shall not be liable for the loss caused to other party(ies) thereof.

12.3  The Force Majeure means objective events or circumstances, unpredictable,
unavoidable and uncontrollable, which includes earthquake, typhoon, flood, fire,
war and other unpredictable, unavoidable and uncontrollable Acts of Gods, and
change of any laws, rules and regulations, promulgation of new laws, rules and
regulations, or any government act leading to direct influence on the
performance of the Agreement or failure to perform the terms and conditions
hereunder.

Article 13 Applicable Laws and Dispute Settlement

13.1  The execution, validity, interpretation, performance and dispute
settlement hereunder shall be governed by and construed in accordance with the
laws of China. In case of certain items in respect of the Agreement not
stipulated in promulgated laws and regulations of China, such items shall be
construed and performed as per generally accepted international business
practice complying with the laws and regulations of China.

13.2  Any disputes arising out of the performance of the Agreement or in
connection with the Agreement shall be settled via friendly consultation; either
party may submit any dispute failing friendly settlement to competent courts of
China for judgment.

Article 14 Notice and Delivery

14.1  Any effective notice or other communications relating to the Agreement
between the Parties (“Notice”) shall be in writing (including fax and e-mail)
and posted, sent by a courier or addressed to that notified party at the address
or telephone number hereunder with the name of attention on the Notice.
 
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To the Transferee: Beijing PKU Chinafront High Technology Co., Ltd.
Attn.: Shudong Xia
Address: Room 717, Tower B, E-wing Center, No. 113 of Zhichun Road, Haidian
District, Beijing, PRC
Post Code: 10086
Tel: 010-82671299, 13501215622

To the Target Company and its shareholders
Attn.: Qing Lu
Address: Tower A Room 1305, Fudan Science Building, No. 11 Guotai Road,
Shanghai, PRC
Post Code: 200433
Tel:021-65111115

14.2  The service time for the Notice shall be determined by the following:

14.2.1  The Notice shall be deemed to have been received if it is personally
delivered or sent by courier and the notified party issues the receipt; those
without the notified party's receipt shall not be deemed to have been duly
served on;

14.2.2  Notices, which can be sent by post and shall be delivered through
registered express or EMS, shall be deemed to have been received by the notified
party on the seventh day after the date of dispatch;

14.2.3  The Notice sent by fax or e-mail is deemed as given upon the date on the
receipt of fax notice or e-mail, and the confirmation date by the notified party
is the delivery date.

14.3  In case of any change of the above address or telephone number of either
party (the “Change Party”), the Change Party shall notify other parties within
seven (7) days after the change. Where the Change Party fails to notify other
parties of such change in a timely way, it shall bear any loss or damages
incurred to other parties thereof.

Article 15 Miscellaneous

15.1. The supplementary Exhibits to the Agreement are integral part of the
Agreement, and shall have the same legal binding force with the Agreement; in
case of discrepancy between the Exhibits and the text of the Agreement, the text
of the Agreement shall prevail.
 
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15.2 In case any provision under the Agreement and the Exhibits is found invalid
or not enforceable in accordance with applicable laws, such provision shall be
deemed as non-existence from the beginning and the remaining provisions maintain
effective; the Parties may define new provisions through consultation to bring
about the original intention of such provision to the great extent.

15.3  The Agreement shall also be binding upon the successors and transferees of
the Parties, and such successors and transferees may have and hold the shares
hereunder.

15.4  Party A may assign and transfer its rights, shares and obligations
hereunder to its affiliated companies, wholly-owned subsidiaries and holding
company's wholly-owned subsidiaries.

15.5 Except the aforesaid provisions in Section 15.3 and 15.4, any party shall
not assign or transfer any of its rights or obligations hereunder.

15.6  Unless otherwise specified in the Agreement, the failure of one party to
exercise of its rights, power and privilege does not constitute its waiver of
such rights, power and privilege, and single or partial exercise of such rights,
power and privilege shall not prevent its exercise of any other rights, power
and privilege.

15.7  The Agreement shall be effective with the official seals and the signature
by the legal representatives or duly authorized representatives of the Parties.

15.8  The Agreement is made in five copies of equal validity with 2 copies for
Beijing Zhangcheng, one for each shareholder of Yootu, one to be kept by Yootu
for filing and one copy for competent Administration for Industry and Commerce.

[Signature page follows]

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by duly authorized representatives of the Parties on the date first written
above.
 
Transferor: Shareholders (Seal)
 
Authorized representative:
/s/ Qing Lu
   
Qing Lu
 

 
Transferee: Party A: Beijing PKU Chinafront High Technology Co., Ltd. (seal)

Authorized representative:
/s/ Shudong Xia
 
 
Shudong Xia
 

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