REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION  RIGHTS AGREEMENT (this "Agreement") dated as of November
5, 2002 and entered  into by and between  Lucas  Educational  Systems,  Inc.,  a
Delaware  corporation (the "Company"),  on the one hand, and Fang Delou, Li Ming
and Lio  Lingxiao  (the  "Sellers"),  on the other hand,  with  reference to the
following:

     A. In  order to  induce  the  Sellers,  to enter  into the  Share  Exchange
Agreement (as defined  below) and to consummate  the  transactions  contemplated
thereby,  the Company has agreed to provide the registration rights set forth in
this  Agreement.  The execution and delivery of this Agreement is a condition to
the closing under the Share Exchange Agreement (the "Closing").

         The parties to this  Agreement,  intending to be legally  bound hereby,
agree as follows:

         1.  Definitions.  As used in this Agreement,  the following terms shall
have the following meanings:

         "Affiliate" has the meaning  ascribed to that term in Rule 12b-2 of the
General Rules and Regulations promulgated under the Exchange Act.

         "Common Stock" means the common stock,  par value $0.001 per share,  of
the Company.

         "Demand  Holders" means the Sellers  holding at least 50% of the shares
of Common  Stock  issued at the  Closing to the  Sellers  pursuant  to the Share
Exchange Agreement and the Sock Purchase Agreement.

         "Demand Request" has the meaning ascribed to that term in Section 3.1.

         "Demand  Registration" has the meaning ascribed to that term in Section
3.1.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Holder" means the Sellers and their Affiliates.

         "Person"  means  an  individual,  partnership,  corporation,  trust  or
unincorporated organization,  or a government or agency or political subdivision
thereof.

         "Piggyback  Registration"  has the  meaning  ascribed  to that  term in
Section 3.2.

         "Prospectus"   means  the  Prospectus   included  in  any  Registration
Statement,  as amended or supplemented  by any Prospectus  supplement and by all
other amendments,  and supplements to such Prospectus,  including post-effective
amendments, and all information incorporated by reference in such Prospectus.

<PAGE>

         "Registrable  Securities"  means any shares of Common Stock acquired by
the Sellers by virtue of the Share  Exchange  Agreement  and the Stock  Purchase
Agreement, or any stock split or combination, stock dividend or similar event in
respect of any of such shares;  provided,  however,  that shares of Common Stock
that are Registrable  Securities  shall cease to be Registrable  Securities upon
the sale thereof pursuant to an effective  Registration Statement or pursuant to
Rule 144 (or successor  rule) under the  Securities  Act; and provided,  further
that shares of Common Stock that are Registrable Securities shall continue to be
Registrable  Securities upon their transfer in a private transaction exempt from
the registration requirements of the Securities Act to a person who is already a
party to this  Agreement  (or an affiliate of any party to this  Agreement) or a
transfer of Registrable  Securities in accordance with Section 11 to a party who
becomes a party to this  Agreement  by  agreeing  in  writing to be bound by the
terms of this Agreement,  such agreement to be in form and substance  reasonably
satisfactory to the Company.

         "Registration  Expenses" means all  registration  and filing fees, fees
with  respect to filings  required to be made with the National  Association  of
Securities  Dealers,  Inc.  (the "NASD"),  fees and expenses of compliance  with
securities or blue sky laws (including  reasonable fees and disbursements of one
counsel for the underwriters or sellers of Registrable  Securities in connection
with blue sky  qualifications  of the Registrable  Securities  under the laws of
such jurisdictions as the managing  underwriters or holders of a majority of the
Registrable Securities being sold may reasonably  designate),  printing expenses
and  distribution  expenses  associated with the preparation and distribution of
any  Registration  Statement,  any  Prospectus,  and  amendments or  supplements
thereto,  all fees and expenses  associated  with the listing of any Registrable
Securities on any securities  exchange or exchanges,  and fees and disbursements
of counsel for the Company and its  independent  certified  public  accountants,
out-of-pocket  expenses of  underwriters  customarily  paid by the issuer to the
extent provided for in any underwriting  agreement (but  specifically  excluding
any Selling Expenses).

         "Registration  Statement"  means  any  Registration  Statement  of  the
Company  filed  under  the  Securities  Act  (including  pursuant  to  Rule  415
thereunder),  including the  Prospectus  forming a part thereof,  amendments and
supplements to such Registration Statement, including post-effective amendments,
and all  exhibits  to and all  information  incorporated  by  reference  in such
Registration Statement.

         "SEC" means the Securities and Exchange Commission.

         "Securities  Act" means the Securities Act of 1933, as amended,  or any
similar  federal statute and the rules and  regulations  thereunder,  all as the
same shall be in effect at the time.

         "Selling  Expenses" means, with respect to the Holder, all underwriting
discounts, selling commissions and stock transfer or documentary stamp taxes, if
any, applicable to any Registrable Securities registered and sold by the Holder,
and all fees and  disbursements  of any counsel  for the Holder  (other than any
counsel fees expressly  constituting  a Registration  Expense as defined in this
Agreement).


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<PAGE>

         "Share Exchange  Agreement" means the Share Exchange Agreement dated as
of the date hereof,  entered into by the Company,  Halter  Capital  Corporation,
Kevin Halter and the Sellers.

         "Stock Purchase  Agreement" means the Stock Purchase Agreement dated as
of the date  hereof  among  Halter  Capital  Corporation,  Kevin  Halter and the
Sellers.

         "Underwritten   Offering"  means  an  offering   registered  under  the
Securities  Act in which  securities  are sold to an  underwriter,  whether on a
"firm  commitment",  "best efforts" or other basis,  for reoffering or resale to
the public.

         2. Securities Subject to this Agreement.  The only securities  entitled
to the benefits of this Agreement are the Registrable Securities.

         3. Registration of Registrable Securities.

         3.1 Demand Registration.

         (a) Demand.  Subject to the other  provisions  of this  Agreement,  the
Demand Holders shall have the right,  exercisable by making a written request (a
"Demand  Request") to the Company  (which  request  shall  specify the aggregate
number of shares of  Registrable  Securities  requested  to be  registered),  to
require  that  the  Company  effect  the  registration  in  accordance  with the
provisions  of the  Securities  Act with  respect  to the  resale  of any of the
Registrable  Securities held by the Demand  Holders.  Upon receipt of the Demand
Request,  the  Company  shall use its best  efforts to effect,  at the  earliest
practicable  date,  the  registration  (a  "Demand   Registration")   under  the
Securities  Act of the  Registrable  Securities  that  the  Company  has been so
required to register by the Demand Holders to provide for public resale thereof.

         (b) Effective Registration Statement. A registration requested pursuant
to this  Section  3.1  shall  not be  deemed  to have  been  effected  unless  a
Registration  Statement  with respect  thereto has become  effective;  provided,
however,  that if, after a Demand  Registration  has become  effective,  (i) the
offering of Registrable Securities pursuant thereto is suspended, blocked by any
stop order,  injunction or other order of the SEC or any governmental  agency or
court, or withdrawn (except a Demand Registration withdrawn under Section 6(a)),
or (ii) the  Registrable  Securities are not sold to the public  thereunder as a
result of the  conditions  to closing  specified  in the  purchase  agreement or
underwriting  agreement entered into in connection with such Demand Registration
not being satisfied  other than by act of omission of the Demand  Holders,  such
Demand Registration will be deemed not to have been effected.

         (c) Selection of  Underwriters.  The Demand Holders shall have the sole
right to  select,  after  consultation  with the  Company,  the  underwriter  or
underwriters, if any, of the Registrable Securities so to be registered.

         (d) Priority in Requested Registration. If the managing underwriter, if
any, of the Demand  Registration  advises the  Company in writing  that,  in its
opinion, the number of shares of Registrable  Securities and other securities of
the Company  requested to be included in such  offering  exceeds the number that
can be sold in such  offering at the  offering  price  acceptable  to the Demand
Holders,  the  Company  shall  include  in  such  registration  (1)  first,  the


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<PAGE>

Registrable  Securities  requested  by the Demand  Holders to be included in the
Demand  Registration  pursuant to Section 3.1(a);  and (2) second, to the extent
that such  securities  of the  Company  may be included  without  affecting  the
offering price of the Registrable  Securities  referred to in clause (1), in the
opinion of such managing  underwriter,  any other securities of the Company held
by persons  having rights to participate  in such Demand  Registration  that are
non-preferential  to the Demand Holders in accordance with their agreements with
respect thereto.


         (e) Limitations on Demand Registration.  Notwithstanding the foregoing,
the Company shall not be required to file a Registration  Statement for a Demand
Registration  under any of the  following  circumstances:  ( i) within  180 days
after the effectiveness (within the meaning of Section 3.1(b)) of a Registration
Statement filed in connection with an underwritten public offering of securities
of the Company;

         (ii) if the Company has effected two Demand  Registrations  pursuant to
this Section 3.1;

         (iii) the Company promptly delivers written notice ("Prior Registration
Notice") to the Demand  Holders  making the Demand Request that it has filed and
is  using  reasonable  efforts  to have  declared  effective,  or at the time of
receipt of the Demand  Request is required to file, or has delivered a Piggyback
Notice (as defined in Section  3.2) with  respect to, a  Registration  Statement
pursuant to Section 3.2 ("Prior Registration Rights");  provided,  however, that
the Company may postpone the filing of a  Registration  Statement  pursuant to a
Demand  Request for a period of no longer than (1) 180 days after the  effective
date of the  Registration  Statement  filed  pursuant to the Prior  Registration
Rights, if such Registration  Statement was filed before the date of delivery of
the Prior Registration  Notice or within 60 days thereafter and, in either case,
becomes  effective  within  120 days  after  the date of  delivery  of the Prior
Registration  Notice;  (2) 120 days  after  the date of  delivery  of the  Prior
Registration Notice, if such Registration Statement was filed before the date of
delivery of the Prior  Registration  Notice or within 60 days thereafter but, in
either case, does not become  effective  within such 120-day  period;  or (3) 60
days  after the date of  delivery  of the  Prior  Registration  Notice,  if such
Registration  Statement  was not filed  before the date of delivery of the Prior
Registration Notice and is not filed within 60 days thereafter; or

         (iv) if there  exists  at the  time,  material  non-public  information
relating  to  a  merger,  acquisition,   disposition  or  financing  transaction
involving  the  Company,  which,  in the  reasonable  opinion  of the  Board  of
Directors,  should not be disclosed,  any other  provisions of this Agreement to
the contrary  notwithstanding,  the Company's  obligation to file a Registration
Statement,  or cause such Registration  Statement to become and remain effective
(whether under this Section 3.1 or under any other provision of this Agreement),
shall be  suspended  for a period  not to exceed  90 days (and for a period  not
exceeding, in the aggregate, 180 days in any 12-month period);

         (v) the Company  has  effected a Demand  Registration  pursuant to this
Section 3.1 within the previous (6) months.


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<PAGE>

3.2      Piggyback Registration.

         (a) Right to Include Registrable Securities. If the Company at any time
proposes to register  the  offering and sale of shares of Common Stock under the
Securities Act by  registration  on any form other than Forms S-4 or S-8 (or any
successor forms thereto)  whether or not for sale for its own account,  it shall
each such time give prompt written notice ("Piggyback Notice") to the Holders of
its  intention to do so and of the Holders'  rights under this Section 3.2. Upon
the written request of the Holders  received by the Company within 30 days after
the giving of any Piggyback  Notice (which request shall specify the Registrable
Securities  intended to be disposed of by the Holders and the intended method of
such  disposition),  the Company shall use all reasonable  efforts to include in
such registration ("Piggyback Registration") all Registrable Securities that the
Holders have so requested be included in such Piggyback  Registration  to permit
the disposition by the Holders of such Registrable Securities; provided that (i)
if such registration involves an underwritten public offering,  the Holders must
sell Registrable  Securities to the underwriters  selected by the Company on the
same  terms and  conditions  as apply to the  Company;  and (ii) if, at any time
after giving notice of its intention to register any securities pursuant to this
Section  3.2(a) and prior to the effective  date of the  Registration  Statement
filed in connection with such registration,  the Company shall determine for any
reason not to register such securities, the Company shall give written notice to
the Holders and, thereupon,  shall be relieved of its obligation to register any
Registrable  Securities  in  connection  with  such  registration  (but  not its
obligation to pay Registration  Expenses pursuant to Section 7). No registration
effected under this Section 3.2 shall relieve the Company of its  obligations to
effect registrations upon request under Section 3.1.

         (b) Priority in Piggyback Registrations. If a Piggyback Registration is
an  Underwritten  Offering  and the  managing  underwriter  thereof  advises the
Company in writing  that,  in its opinion,  the number of shares of  Registrable
Securities  requested  or proposed to be included in such  offering  exceeds the
number  that  can be sold in such  offering  without  materially  affecting  the
offering  price  of any such  securities,  the  Company  shall  include  in such
registration (1) first, if such  registration is initiated by the Company or the
Demand  Holder  proposing  to register  any of its Common  Stock or  Registrable
Securities,  such Common Stock or Registrable  Securities proposed to be sold by
the  Company or the  Demand  Holder;  and (2)  second,  to the extent  that such
Registrable Securities and other securities may be included in such registration
without materially affecting the offering price of the securities referred to in
clause  (1),  in the  opinion  of such  managing  underwriter,  the  Registrable
Securities  requested  by the  Holders  (other  than the  Demand  Holder)  to be
included  in such  Piggyback  Registration  pursuant  to Section 3.2 (a) and any
other  securities of the Company held by persons having rights to participate in
such Piggyback  Registration that are  non-preferential  to the Holders pro rata
among  all  such  holders  on the  basis  of the  total  number  of  Registrable
Securities  and other  securities,  requested by each such holder to be included
therein.

         4. Other Agreements.

         (a) During the term of this  Agreement,  the Holders shall if requested
by the managing  underwriter or  underwriters  in an  Underwritten  Offering and
provided  the Company is then in  compliance  with the terms of this  Agreement,
agree not to effect any public sale or distribution of securities of the Company
of the same class as the  securities  included in such  Registration  Statement,


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<PAGE>

including a sale pursuant to Rule 144 under the Securities  Act,  except as part
of such underwritten registration,  during the 7-day period prior to, and during
a period of up to 120 days  beginning on, the closing date of each  Underwritten
Offering  made  pursuant to such  Registration  Statement,  to the extent timely
notified in writing by the Company or the managing underwriter or underwriters.

5.       Registration Procedures.

         In  connection  with the  Company's  obligations  under  Section 3, the
Company  shall use its best  efforts to effect such  registration  to permit the
sale of such  Registrable  Securities in accordance  with the intended method or
methods of  distribution  thereof,  and  pursuant  thereto the Company  shall as
expeditiously as practicable:

         (a)  prepare  and  file  with  the  SEC  under  the  Securities  Act  a
Registration  Statement with respect to such Registrable  Securities which shall
state that the  Registrable  Securities  are covered  thereby,  and use its best
efforts to cause such  Registration  Statement to become effective and to remain
effective;  provided, however, that the Company may discontinue any registration
of Registrable  Securities  being  effected  pursuant to Section 3.2 at any time
before the effective date of the Registration Statement relating thereto;

         (b) prepare and file with the SEC such amendments and  supplements,  if
any,  to such  Registration  Statement  and the  Prospectus  used in  connection
therewith as may be necessary to (1) keep such Registration  Statement effective
until the  earlier  of (a) 180 days after the  effectiveness  thereof or (b) the
completion of the distribution under such Registration Statement, and (2) comply
with the  provisions of the  Securities Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement during such
period in accordance  with the intended  methods of  disposition  by the sellers
thereof set forth in such Registration Statement;

         (c) furnish to the Holders and each underwriter (if any) such number of
copies of such Registration  Statement (including exhibits),  each amendment and
supplement thereto,  the Prospectus  included in such Registration  Statement or
filed with the SEC (including each preliminary  Prospectus),  and each amendment
and supplement  thereto as the Holder and underwriter may reasonably  request to
facilitate the disposition of the Registrable Securities owned by the Holder and
covered by such Registration Statement;

         (d) use its best efforts to (1)  register or qualify  such  Registrable
Securities under the securities or "blue sky" laws of such  jurisdictions as the
Holder or the managing  underwriter  (if any) may reasonably  request;  (2) keep
such  registrations or qualifications in effect for so long as such Registration
Statement is in effect;  and (3) take any and all other reasonable  actions that
may be necessary or appropriate to enable the Holders or other securities of the
Company covered by such Registration  Statement and each underwriter (if any) to
consummate the  disposition in such  jurisdictions  of the relevant  Registrable
Securities  and other  securities of the Company;  provided,  however,  that the
Company shall not be required to (a) qualify generally to transact business as a
foreign corporation in any jurisdiction where it would not otherwise be required
to qualify but for the  requirements  of this  Section 5, (b) subject  itself to
taxation in any such jurisdiction;  or (c) consent to general service of process
in any jurisdiction;


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<PAGE>

         (e) (1) at any time when a Prospectus  relating  thereto is required to
be delivered  under the Securities Act, notify the Holders when it becomes aware
of the  occurrence  of any event as a result of which  the  Prospectus  (as then
amended or  supplemented)  contains any untrue  statement of a material  fact or
omits  any  fact  necessary  to make the  statements  therein,  in the  light of
circumstances under which they were made, not misleading; and (2) at the request
of the Holders,  as promptly as  practicable  thereafter,  prepare in sufficient
quantities and furnish to the Holders and each underwriter (if any) a reasonable
number of copies of a Prospectus  supplemented or amended so that, as thereafter
delivered to the offerees or purchasers  of such  Registrable  Securities,  such
Prospectus  will not contain any untrue  statement of a material fact or omit to
state any fact  necessary to make the  statements  therein,  in the light of the
circumstances then existing, not misleading;

         (f) use its best  efforts  to cause  all  such  Registrable  Securities
covered by such  Registration  Statement to be listed or approved for trading on
any  securities  exchange or  inter-dealer  quotation  system,  if any, on which
similar  securities  of the Company are then listed or approved for trading,  if
the listing of such Registrable  Securities is then permitted under the rules of
such exchange or inter-dealer quotation system;

         (g) enter into and perform its obligations  under customary  agreements
relating to the registration,  including an underwriting  agreement in customary
form;

         (h) subject to the execution of  confidentiality  agreements  customary
for  transactions  of this  type,  in form  and  substance  satisfactory  to the
Company,  (1) make  reasonably  available  for  inspection  by the Holders,  any
underwriter  (if any) and any legal counsel,  accountant or other agent retained
by the Holders or any  underwriter,  all financial and other  records,  relevant
corporate  documents,  and  properties  of the Company,  (2) cause the Company's
directors,  officers,  employees,  counsel and independent public accountants to
supply all  information  reasonably  requested  by, and to respond to  inquiries
from, the Holders or any such underwriter,  legal counsel, attorney,  accountant
or agent in connection with such Registration Statement, in each instance to the
extent that such  information  is  reasonably  necessary  in the opinion of such
person  to  conduct  a  reasonable  investigation  within  the  meaning  of  the
Securities Act, and (3) give such person a reasonable opportunity to participate
in the preparation of the Registration Statement and any amendment thereto;

         (i) with  respect to  Underwritten  Offerings,  use its best efforts to
obtain an appropriate  opinion from counsel for the Company and a "cold comfort"
letter from then Company's  independent  public  accountants,  each in customary
form and covering  such matters of the type  customarily  covered by opinions of
counsel and cold comfort letters in similar registrations;

         (j) promptly notify the Holders and each managing  underwriter (if any)
and, upon request by any such person,  confirm such advice in writing,  (1) when
such  Registration  Statement,  the Prospectus or any  Prospectus  supplement or
post-effective  amendment has been filed, and, with respect to such Registration
Statement  or any  post-effective  amendment  thereto,  when the same has become
effective,  (2) of the  issuance  by the SEC of any stop  order  suspending  the
effectiveness of such Registration Statement or the initiation of any proceeding
for such purpose,  or (3) of the receipt by the Company of any notification with
respect  to  the  suspension  of  the  registration  or  qualification  of  such
Registrable  Securities  for sale in any  jurisdiction  or the initiation of any
proceeding for such purpose; and


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<PAGE>

         (k)  use its  best  efforts  to  obtain  the  withdrawal  of any  order
suspending   the   effectiveness   of  such   Registration   Statement   or  any
post-effective amendment thereto.

         The Company  may  require  the  Holders to furnish to the Company  such
information  regarding the  distribution  of such  securities as the Company may
from time to time reasonably request in writing;  provided,  however,  that such
information  shall be used by the Company only to the extent  necessary for, and
in connection with, such registration.

         The Holders agree that,  upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 5(e)(1) hereof,  the
Holders shall forthwith discontinue  disposition of such Registrable  Securities
until  the  Holders'  receipt  of the  copies  of the  supplemented  or  amended
Prospectus  contemplated by Section  5(e)(2),  or until it is advised in writing
(the "Advice") by the Company that the use of the Prospectus may be resumed, and
has  received  copies  of any  additional  or  supplemental  filings  which  are
incorporated by reference in the Prospectus, and, if so directed by the Company,
the Holders shall deliver to the Company (at the Company's  expense) all copies,
other  than  permanent  file  copies  then in the  Holders'  possession,  of the
Prospectus  covering such Registrable  Securities current at the time of receipt
of such notice.  In the event the Company  shall give any such notice,  the time
periods regarding the maintenance of the Registration  Statement in Section 5(b)
shall be extended by the number of days during the period from and including the
date of the giving of such notice  pursuant to Section  5(e)(1) to and including
the date when the Holders shall have received the copies of the  supplemented or
amended Prospectus contemplated by Section 5(e)(2) or the Advice.

         6. Withdrawal.

         (a) If any Holder  disapproves  of the terms of any offering,  the sole
remedy of such Holder shall be, in its  discretion,  to withdraw  such  Holder's
Registrable  Securities and other securities of the Company  therefrom by giving
written  notice to the  Company  and any  managing  underwriter  (if  any).  The
Holder's Registrable Securities and other securities of the Company so withdrawn
from the  offering  also shall be  withdrawn  from  registration.  If the Holder
withdraws all Registrable Securities from the offering, the Company may withdraw
the registration,  and if such  registration was commenced  pursuant to a Demand
Request,   such  registration   shall   nevertheless  be  counted  as  a  Demand
Registration effected hereunder; provided, however, that such registration shall
not be so counted if (a) the  withdrawal  was based on the Company's  failure to
comply in any material respect with its obligations hereunder,  or (b) the price
at  which  the  Registrable  Securities  may be  sold  pursuant  to  the  Demand
Registration is not acceptable to the Holder.

         (b) If as a result of the priority  provisions  of Sections  3.1(d) and
3.2(b),  any Holder is not entitled to include all of the  Holder's  Registrable
Securities in a registration that the Holder has requested to be included,  then
after the delivery to the Holder of notice thereof from the Company,  the Holder
may elect to withdraw his request to include the Holder's Registrable Securities
in  such  registration  ("Withdrawal  Election");   provided,  however,  that  a


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<PAGE>

Withdrawal  Election  shall  be  irrevocable  and,  after  making  a  Withdrawal
Election,  the Holder  shall no longer  have any right to include  the  Holder's
Registrable  Securities in the registration as to which such Withdrawal Election
was made.

         7. Expenses of  Registration.  All  Registration  Expenses  incurred in
connection with any  registration  of Registrable  Securities held by the Demand
Holders in accordance with Section 3.1 shall be borne by the Demand Holder.  All
Registration Expenses incurred in connection with any registration of securities
initiated  by the Company in  accordance  with Section 3.2 shall be borne by the
Company.  All other  Registration  Expenses  incurred  other than the  foregoing
(including in connection with any Piggyback  Registration exercised with respect
to a Demand  Registration)  shall be borne pro rata by holders of the respective
securities being registered. All Selling Expenses relating to Registrable Shares
registered on behalf of any person shall be borne by such person.

         8. Indemnification.

         (a)  Indemnification  by the Company.  The Company shall  indemnify and
hold harmless,  with respect to any  Registration  Statement filed by it, to the
fullest  extent  permitted  by  law,  each  Holder,  its  officers,   directors,
employees,  agents and general or limited  partners,  and each other person,  if
any,  who  controls  the  Holder  within  the  meaning  of  the  Securities  Act
(collectively,   "Holder  Indemnified  Parties")  against  all  losses,  claims,
damages,  liabilities and expenses, joint or several, (including reasonable fees
of counsel  and any  amounts  paid in  settlement  effected  with the  Company's
consent,  which  consent shall not be  unreasonably  withheld) to which any such
Holder  Indemnified Party may become subject under the Securities Act, at common
law or  otherwise,  insofar as such  losses,  claims,  damages,  liabilities  or
expenses (or actions or  proceedings  in respect  thereof) are caused by (1) any
untrue statement or alleged untrue statement of a material fact contained in any
Registration  Statement in which such  Registrable  Securities  were included as
contemplated  hereby or the  omission  or alleged  omission  to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein not misleading,  (2) any untrue statement or alleged untrue statement of
a material  fact  contained in any,  preliminary,  final or summary  Prospectus,
together with the  documents  incorporated  by reference  therein (as amended or
supplemented if the Company shall have filed with the SEC any amendment  thereof
or supplement  thereto),  or the omission or alleged omission to state therein a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in the light of the  circumstances  under  which they were
made,  not  misleading,  or (3) any  violation  by the Company of any federal or
state law, rule or regulation applicable to the Company relating to action of or
inaction by the Company in connection  with any such  registration;  and in each
such case, the Company shall  reimburse each such Holder  Indemnified  Party for
any reasonable legal or any other expenses incurred by any of them in connection
with  investigating  or  defending  any such  loss,  claim,  damage,  liability,
expense, action or proceeding;  provided, however, that the Company shall not be
liable to any such Holder  Indemnified Party in any such case to the extent that
any such loss,  claim,  damage,  liability or expense (or action or  proceeding,
whether  commenced or threatened,  in respect thereof) arises out of or is based
upon any untrue  statement  or alleged  untrue  statement or omission or alleged
omission made in such Registration  Statement or amendment thereof or supplement
thereto or in any such preliminary, final or summary Prospectus in reliance upon
and in  conformity  with written  information  furnished to the Company by or on
behalf of any such Holder  Indemnified Party relating to such Holder Indemnified


                                       9
<PAGE>

Party expressly for use in the preparation thereof, and provided,  further, that
the  Company  shall not be  liable to any such  Holder  Indemnified  Party  with
respect to any preliminary  Prospectus to the extent that any such loss,  claim,
damage,  liability or expense of such Holder  Indemnified Party results from the
fact that such Holder Indemnified Party sold Registrable  Securities to a person
to whom there was not sent or given,  at or before the written  confirmation  of
such  sale,  a copy  of the  Prospectus  (excluding  documents  incorporated  by
reference)  or of the  Prospectus  as then  amended or  supplemented  (excluding
documents   incorporated  by  reference)  if  the  Company  has,  prior  to  the
confirmation or completion of such sale, furnished copies thereof to such Holder
Indemnified  Party in  compliance  with Section 5 and the loss,  claim,  damage,
liability  or expense of such Holder  Indemnified  Party  results from an untrue
statement  or  omission  of  a  material  fact  contained  in  such  preliminary
Prospectus  which was corrected in the  Prospectus (or the Prospectus as amended
or supplemented). Such indemnity and reimbursement of expenses obligations shall
remain in full force and effect  regardless of any  investigation  made by or on
behalf of the Holder Indemnified  Parties and shall survive the transfer of such
securities by such holder.

         (b)   Indemnification  by  the  Holders.   The  Holder  of  Registrable
Securities  participating in any registration  hereunder shall severally and not
jointly indemnify and hold harmless, to the fullest extent permitted by law, the
Company,  its  directors,  officers,  employees and agents,  and each person who
controls the Company (within the meaning of the Securities  Act)  (collectively,
"Company Indemnified Parties") against all losses, claims, damages,  liabilities
and expenses,  joint or several  (including  reasonable  fees of counsel and any
amounts paid in settlement  effected with such holder's  consent,  which consent
shall not be unreasonably  withheld) to which any Company  Indemnified Party may
become subject under the Securities Act, at common law or otherwise,  insofar as
such losses, claims, damages, liabilities or expenses (or actions or proceedings
in respect  thereof) are caused by (1) any untrue  statement  or alleged  untrue
statement of a material fact  contained in any  Registration  Statement in which
the Holder's  Registrable  Securities  were  included or the omission or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary  to make  the  statements  therein  not  misleading,  (2)  any  untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
preliminary,   final  or  summary   Prospectus,   together  with  the  documents
incorporated  by reference  therein (as amended or  supplemented  if the Company
shall  have filed  with the  Commission  any  amendment  thereof  or  supplement
thereto),  or the omission or alleged  omission to state therein a material fact
required  to be stated  therein  or  necessary  in order to make the  statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading  to the extent,  but only to the extent,  in the cases  described  in
clauses (1) and (2), that such untrue  statement or omission is contained in any
information  furnished in writing by the Holder to the Company expressly for use
in the preparation thereof,  provided,  however, that the aggregate amount which
the Holder  shall be required  to pay  pursuant  to this  Section  8(b) shall be
limited to the dollar  amount of proceeds  received - less  expenses  associated
with the sale of Registrable  Securities and other  securities of the Company by
the Holder upon the sale of the Registrable  Securities and other  securities of
the Company - pursuant to the Registration  Statement giving rise to such claim.
Such indemnity  obligation  shall remain in full force and effect  regardless of
any  investigation  made by or on  behalf  of the  Company  Indemnified  Parties
(except as provided  above) and shall survive the transfer of such securities by
the Holder.


                                       10
<PAGE>

         (c) Conduct of Indemnification  Proceedings.  Promptly after receipt by
an  indemnified   party  under  Section  8(a)  or  8(b)  of  written  notice  of
commencement of any action,  suit,  proceeding,  investigation or threat thereof
made in writing  with respect to which a claim for  indemnification  may be made
pursuant to this Section 8, such indemnified  party shall, if a claim in respect
thereto is to be made against an indemnifying  party, give written notice to the
indemnifying  party of the threat or commencement  thereof;  provided,  however,
that the failure to so notify the  indemnifying  party shall not relieve it from
any liability  which it may have to any  indemnified  party except to the extent
that the  indemnifying  party is  actually  prejudiced  by such  failure to give
notice.  If any such claim or action  referred to under  Section 8(a) or 8(b) is
brought  against any  indemnified  party and it then  notifies the  indemnifying
party of the threat or commencement  thereof,  the  indemnifying  party shall be
entitled to participate therein and, to the extent that it wishes,  jointly with
any other indemnifying party similarly  notified,  to assume the defense thereof
with counsel  reasonably  satisfactory to such indemnified  party.  After notice
from the  indemnifying  party to such  indemnified  party of its  election so to
assume the defense of any such claim or action, the indemnifying party shall not
be liable to such indemnified  party under this Section 8 for any legal expenses
of counsel or any other expenses subsequently incurred by such indemnified party
in  connection  with  the  defense  thereof  other  than  reasonable   costs  of
investigation unless (i) the indemnifying party has failed to assume the defense
of such claim or action or to employ  counsel  reasonably  satisfactory  to such
indemnified party or (ii) in the reasonable  judgment of any indemnified party a
conflict  of  interest  is likely  to exist,  based on the  written  opinion  of
counsel,  between such indemnified party and the indemnifying party or any other
of such  indemnified  parties  with  respect to such  claim,  in which event the
indemnifying  party shall be  obligated to pay  reasonable  fees and expenses of
such  additional  counsel.  The  indemnifying  party  shall not be  required  to
indemnify the  indemnified  party with respect to any amounts paid in settlement
of any action,  proceeding  or  investigation  entered  into without the written
consent of the  indemnifying  party,  which  consent  shall not be  unreasonably
withheld.  No  indemnifying  party shall consent to the entry of any judgment or
enter into any settlement  without the consent of the  indemnified  party unless
(1) such judgment or settlement does not impose any obligation or liability upon
the indemnified  party other than the execution,  delivery or approval  thereof,
and (2) such judgment or settlement  includes as an  unconditional  term thereof
the giving by the  claimant or  plaintiff  to such  indemnified  party of a full
release  and  discharge  from all  liability  in  respect  of such claim for all
persons  that may be  entitled to or  obligated  to provide  indemnification  or
contribution under this Section 8.

         (d) Contribution. If the indemnification provided for in this Section 8
is unavailable to or  insufficient  to hold harmless an indemnified  party under
Section  8(a) or 8(b),  then each  indemnifying  party shall  contribute  to the
amount  paid or payable  by such  indemnified  party as a result of the  losses,
claims,  damages,  liabilities or expenses (or actions or proceedings in respect
thereof)  referred  to  in  Section  8(a)  or  8(b)  in  such  proportion  as is
appropriate to reflect the relative fault of the  indemnifying  party on the one
hand and the  indemnified  party on the other in connection with the statements,
omissions,  actions or inactions which resulted in such losses, claims, damages,
liabilities or expenses.  The relative fault of the  indemnifying  party and the
indemnified  party shall be  determined  by reference  to,  among other  things,
whether  the  untrue or  alleged  untrue  statement  of a  material  fact or the
omission or alleged  omission to state a material  fact  relates to  information
supplied  by the  indemnifying  party or the  indemnified  party,  any action or
inaction by any such party, and the parties' relative intent, knowledge,  access
to information and  opportunity to correct or prevent such statement,  omission,


                                       11
<PAGE>

action or  inaction.  The amount  paid or payable by an  indemnified  party as a
result of the losses,  claims,  damages,  liabilities or expenses (or actions or
proceedings in respect thereof) pursuant to this Section 8(d) shall be deemed to
include any  reasonable  legal or other  expenses  incurred by such  indemnified
party in  connection  with  investigating  or defending any such action or claim
(which  shall be limited as provided in Section 8(c) if the  indemnifying  party
has assumed the defense of any such  action in  accordance  with the  provisions
thereof)  which is the  subject  of this  Section  8(d).  No  person  guilty  of
fraudulent  misrepresentation  (within  the  meaning  of  Section  11(f)  of the
Securities  Act) shall be entitled to  contribution  from any person who was not
guilty  of such  fraudulent  misrepresentation.  Promptly  after  receipt  by an
indemnified  party under this Section 8(d) of written notice of the commencement
of any action, suit, proceeding, investigation or threat thereof made in writing
with  respect  to  which  a  claim  for  contribution  may be  made  against  an
indemnifying  party under this Section 8(d), such indemnified  party shall, if a
claim for  contribution in respect thereto is to be made against an indemnifying
party,  give  written  notice  to  the  indemnifying  party  in  writing  of the
commencement thereof (if the notice specified in Section 8(c) has not been given
with respect to such action);  provided,  however, that the failure to so notify
the  indemnifying  party  shall not  relieve it from any  obligation  to provide
contribution  which it may have to any indemnified party under this Section 8(d)
except to the extent that the indemnifying  party is actually  prejudiced by the
failure to give  notice.  Notwithstanding  anything in this  Section 8(d) to the
contrary,  the Holder  shall not be required  pursuant to this  Section  8(d) to
contribute any amount which exceeds the dollar amount of the proceeds received -
less  expenses  associated  with the sale of  Registrable  Securities  and other
securities  of  the  Company  - by the  Holder  from  the  sale  of  Registrable
Securities  and other  securities  of the  Company in the  offering to which the
losses,  claims,  damages,  liabilities or expenses of the  indemnified  parties
relate.

         The parties  hereto  agree that it would not be just and  equitable  if
contribution  pursuant  to  this  Section  8(d)  were  determined  by  pro  rata
allocation or by any other method of  allocation  which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.

         If  indemnification is available under this Section 8, the indemnifying
parties shall indemnify each indemnified party to the fullest extent provided in
Sections  8(a)  and  8(b),   without  regard  to  the  relative  fault  of  said
indemnifying  party or indemnified  party or any other  equitable  consideration
provided for in this Section 8(d).  The provisions of this Section 8(d) shall be
in addition to any other rights to  indemnification  or  contribution  which any
indemnified  party may have  pursuant to law or  contract,  shall remain in full
force and effect  regardless  of any  investigation  made by or on behalf of any
indemnified  party,  and shall  survive the transfer of  securities  by any such
party.

         (e)  Indemnification  and Contribution of  Underwriters.  In connection
with any  Underwritten  Offering  contemplated  by this Agreement which includes
Registrable  Securities,  the  Company and the Holder  shall agree to  customary
provisions  for  indemnification  and  contribution  (consistent  with the other
provisions of this Section 8) in respect of losses, claims, damages, liabilities
and expenses of the underwriters of such offering.


                                       12
<PAGE>

         9. Current  Public  Information.  With a view to making  available  the
benefits of certain rules and  regulations  of the SEC which may permit the sale
of Registrable Securities to the public without registration, the Company agrees
to use its best efforts to:

         (a)  file  with  the SEC in a  timely  manner  all  reports  and  other
documents  required  of the  Company  under the  Exchange  Act after the Company
becomes subject to the reporting requirements of such act; and

         (b)  furnish  to each  Holder,  during  the  term  of  this  Agreement,
forthwith  upon request (i) if true, a written  statement by the Company that it
has complied with the current public  information and reporting  requirements of
Rule 144 under the  Securities  Act and the  Exchange Act to which it is subject
and (ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company.

         10.  Participation  in Underwritten  Registrations.  In the case of any
underwritten  registration  under Section 3.1, or in the case of a  registration
under  Section  3.2, if the  Company  determines  to enter into an  underwriting
agreement in connection therewith,  (1) all shares of Registrable  Securities or
other  Securities  of the Company to be included in such  registration  shall be
subject  to such  underwriting  agreement,  which  shall  be in  customary  form
(including  representations and warranties of the Holders solely with respect to
the  identity of the  Holders,  the shares to be sold and the  intended  form of
disposition),  and (2) no person may participate in any such registration unless
such person (a) agrees to sell such person's securities on the basis provided in
such underwriting arrangement and (b) completes and executes all questionnaires,
powers-of-attorney,  indemnities,  underwriting  agreements and other  documents
reasonably required under the terms of such underwriting arrangements.

         11. Transfer of Registration Rights. The rights to cause the Company to
register  Registrable  Securities of the Holders and keep information  available
granted to the  Holders by the Company  hereunder  may be assigned by any Holder
(i) to any partner or shareholder of the Holder or (ii) to other  transferees or
assignees;  provided,  that the Company is given written notice by the Holder at
any time of or within a reasonable  time after said  transfer,  stating the name
and address of said  transferee or assignee and  identifying the securities with
respect to which such registration  rights are being assigned and the transferee
or assignee agrees in writing to be bound by the terms of this  Agreement,  such
agreement to be in form and substance reasonably satisfactory to the Company.


                                       13
<PAGE>

         12. Nominees for Beneficial Owners. If Registrable  Securities are held
by a nominee for the beneficial owner thereof, the beneficial owner thereof may,
at its election,  be treated as the holder of such  Registrable  Securities  for
purposes of (i) any action by holders of Registrable Securities pursuant to this
Agreement and (ii) any determination of number of Registrable Securities held by
any holders of Registrable  Securities  contemplated by this  Agreement.  If the
beneficial  owner of any  Registrable  Securities  so elects,  the  Company  may
require  reasonable  assurances  of such  beneficial  owner's  ownership of such
Registrable Securities.

         13. Representations and Warranties. The Company represents and warrants
to the other parties as follows:

         (a) The execution,  delivery and performance of the Agreement have been
duly authorized by the Company.

         (b) This  Agreement  constitutes a valid and binding  obligation of the
Company  enforceable  in  accordance  with the terms,  except as  enforceability
thereof may be limited by  applicable  bankruptcy,  insolvency  or similar  laws
affecting creditor's rights and by general principles of equity.

         (c) The  execution,  delivery  and  performance  by the Company of this
Agreement  do not and will not require  the  authorization,  consent,  permit or
approval of, or declaration  to or filing with, any court,  regulatory or public
body or  governmental  authority not already  obtained or made, or result in the
creation of any lien, security interest,  change or encumbrance upon the capital
stock of the Company.

         14. Miscellaneous.

         (a) Amendments and Waivers.  Except as otherwise  provided  herein,  no
alteration,  modification,  amendment, change or waiver of any provision of this
Agreement  shall be effective or binding on any party hereto  unless the same is
in writing and is executed by the Company and the Holders  representing at least
50% of the Registrable Securities then remaining;  provided,  however, that with
respect to a particular  Registration  Statement  filed pursuant to Section 3, a
waiver or consent to departure from the  provisions of this Agreement  regarding
only such  Registration  Statement and the offering covered thereby may be given
by the Holder,  except that no such  waiver or consent  shall  operate to affect
adversely the rights hereunder of any other holder of Registrable Securities.

         (b)  Notices.  All notices  and other  communications  provided  for or
permitted  hereunder  shall  be made in  writing  by  hand-delivery,  registered
first-class mail, telex, telecopier, or courier guaranteeing overnight delivery:

         (i) if to the Holder as set forth on the  signature  page hereto or, at
the most current address given by
such holder to the Company; and


                                       14
<PAGE>

         (ii) if to the Company:

              Intsys Shares Ltd.
              Flat K 12/F International Industrial Centre
              2-8 Kwei Tei Street
              Fo Tan Shatin
              Hong Kong
              Attention: President

         All such notices and  communications  shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered;  three days after
being  deposited  in  the  mail,  postage  prepaid,   if  mailed;  when  receipt
acknowledged, if telecopied; and on the next business day if timely delivered to
a courier guaranteeing overnight delivery.

         (c) Term. This Agreement shall terminate and cease to be of any further
force  or  effect  on the  fifth  anniversary  of the  date of  this  Agreement;
provided,   however,  that  the  indemnification  and  contribution  rights  and
obligations  shall not  terminate  and shall  continue  forever;  and  provided,
further,  that with  respect to any  particular  party to this  Agreement,  this
Agreement  shall terminate and cease to be of any further force or effect on the
first date which that party ceases to hold any Registrable Securities.

         (d)  Successors and Assigns.  The provisions  hereof shall inure to the
benefit of, and be binding  upon,  the  successors,  permitted  assigns,  heirs,
executors  and  administrators  of the parties  hereto,  provided  that any such
successors,  permitted assign,  heirs,  executors and administrators  shall have
agreed in writing to be bound by the terms and conditions of this Agreement.

         (e) Remedies.  Each party hereto  acknowledges that in the event of any
breach of this  Agreement by such party,  the other parties  hereto (1) would be
irreparably and immediately  harmed by such breach,  (2) could not be made whole
by  monetary  damages,  and (3) shall be  entitled to  temporary  and  permanent
injunctions (or their functional  equivalents) to prevent any such breach and/or
to compel specific  performance  with this  Agreement,  in addition to all other
remedies to which such parties may be entitled at law or in equity.

         (f)  Counterparts.  This  Agreement  may be  executed  in any number of
counterparts and by the parties hereto in separate  counterparts,  each of which
when so  executed  shall be  deemed  to be an  original  and all of which  taken
together shall  constitute one and the same  agreement.  (g) Governing Law. This
Agreement  shall be governed by and construed in accordance with the laws of the
State  of  California  applicable  to  agreements  made and to be  performed  in
California without regard to principles of conflicts of laws.

         (h) Severability.  Each provision of this Agreement shall be considered
severable,  and if for any reason any  provision  that is not  essential  to the
effectuation  of the basic purposes of the Agreement is determined by a court of
competent  jurisdiction to be invalid or unenforceable  under existing or future
applicable  law,  such  invalidity  shall not impair the  operation of or affect


                                       15
<PAGE>

those  provisions of this Agreement that are valid. In that case, this Agreement
shall  be  construed  so as to  limit  any  term or  provision  so as to make it
enforceable or valid within the  requirements  of any applicable law, and in the
event such term or  provision  cannot be so  limited,  this  Agreement  shall be
construed to omit such invalid or unenforceable provisions.

         (i) Entire  Agreement.  This  Agreement is intended by the parties as a
final  expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained  herein.  There are no  representations,  promises,
warranties  or  undertakings,  other than those set forth or  referred to herein
with respect to the  registration  rights  granted by the Company  hereby.  This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter and cannot be changed or terminated orally.

         (j)  Construction.  As used  in  this  Agreement,  unless  the  context
otherwise  requires  (i)  references  to  "Sections"  are to  sections  of  this
Agreement,  (ii) "hereof',  "herein",  "hereunder" and comparable terms refer to
this Agreement in its entirety and not to any particular part of this Agreement,
(iii) the singular  includes the plural and the masculine,  feminine and neutral
gender includes the other,  (iv) "including" or "Includes" shall be deemed to be
followed by the phrase  "without  limitation",  and (v)  headings of the various
Sections and  subsections are for convenience of reference only and shall not be
given any effect for purposes of interpreting this Agreement.












                                       16
<PAGE>


         This  Agreement is executed and  delivered by the parties  hereto to be
effective as of the date first above written.

                                               LUCAS EDUCATIONAL SYSTEMS, INC.


                                               By:
                                                  ------------------------------
                                                  Name:
                                                  Title:  President and Director





                                               SELLERS:


                                               ---------------------------------
                                               Fang Dehou




                                               ---------------------------------
                                               Li Ming





                                               ---------------------------------
                                               Lio Lingxiao