Unassociated Document


    
       

      Exhibit
4(j)

      
 

      
        
          

          

        

        


         

         Equity
Interests Transfer Agreement

         

        by
and among

         

        


         

        


         

        NXP
B.V.

         

        NXP
Semiconductors Suzhou Ltd.

         

        


         

        


         

        and

         

        


         

        


         

        J
& R Holding Limited

         

        


         

        


      

      


       

      Dated  August
6, 2007

       

      


      
        


         

        


        
          

          

        

      

      
         

         

        
          Execution
copy August 6, 2007

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Table of Contents

         

        Page

         

        
          	
                  ARTICLE I DEFINITIONS
      AND RULES OF
      CONSTRUCTION 

                	
                  2

                
	 	 
	
                  ARTICLE
      II
      TRANSFER OF EQUITY INTERESTS

                	
                  6

                
	 	 
	
                  ARTICLE
      III
      REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
      THE TRANSFEROR

                	
                  7

                
	 	 
	
                  ARTICLE
      IV
      REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE

                	
                  20

                
	 	 
	
                  ARTICLE
      V
      COVENANTS AND AGREEMENTS

                	
                  21

                
	 	 
	
                  ARTICLE
      VI
      CONDITIONS TO CLOSING

                	
                  27

                
	 	 
	
                  ARTICLE
      VII
      TERMINATION

                	
                  28

                
	 	 
	
                  ARTICLE
      VIII
      INDEMNIFICATION

                	
                  29

                
	 	 
	
                  ARTICLE
      IX
      MISCELLANEOUS

                	
                  30

                
	 	 
	
                  SCHEDULE  3.22
      (a) 

                	
                  36

                


        

         

         

        
          
            
               

              
                	
                        Execution
      copy August 6, 2007

                      	 	 


              

            

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

          

          
            
 

          

        

         

        Equity Interests Transfer Agreement

         

        


         

        THIS
EQUITY INTERESTS TRANSFER AGREEMENT (this “Agreement”), made as of the
6th
day of August, 2007 (the “Signing Date”), by and among:

         

        
          	
                   
      

                	
                  (1)

                	
                  NXP
      B.V., a company duly incorporated and validly existing under the laws of
      the Netherlands and with its legal address at High Tech Campus 60, 5656 AG
      Eindhoven, the Netherlands (the “Transferor”);

                


        

         

        Authorized
Representative of the Transferor:

        
        

         

        
          	 	Name: 	Ajit
  Manocha
	 	Position: 	Executive VP & GM
      Chief Manufacturing Officer
	 	Nationality: 
      	American


        

         

        
          	
                   
      

                	
                  (2)

                	
                  NXP
      Semiconductors Suzhou Ltd., a limited liability company duly incorporated
      and validly existing under the laws of the People’s Republic of China (the
      “PRC”), with its
      legal address at No. 188, Suhong Xi Road, Suzhou Industry Park, Suzhou,
      PRC (the “Company”);

                


        

         

        Legal
Representative of the Transferor:

        
           

          
            	 	Name: 	Mike YEH
	 	Position: 	Chairman of
      Board
	 	Nationality: 
      	Taiwan


          

           

        

        and

         

        
          	
                   
      

                	
                  (3)

                	
                  J
      & R Holding Limited., a company incorporated under the laws of Islands
      of Bermuda, with its legal address at Canon's Court, 22 Victoria Street,
      Hamilton HM12, Bermuda (the “Transferee”).

                


        

         

        Authorized
Representative of the Company:

        
           

          
            	 	Name: 	Tien Yue
  Wu
	 	Position: 	ASE Group Chief
      Operating Officer
	 	Nationality: 
      	America


          

           

        

        Each of
the parties to this Agreement is hereinafter individually referred to as a
“Party” and collectively
referred to as the “Parties”

         

        


         

        W I T N E S S E T H:

         

        WHEREAS, the Company is a wholly foreign
owned limited liability company duly organized and validly existing under the
laws of the People’s Republic of China (the “PRC”).  The
Company’s Existing Business License number is Qi Du Su Zong Zi Di 020610
Hao.  As of the date hereof, the registered capital of the Company and
the total investment amount of the Company are stated in its current and valid
business licence and approval certificate effective at the Signing
Date;

         

        
           

          
            Execution
copy August 6, 2007

          

          
            
              
              

            

            
              1

              
                

              

            

            
              
              

            

          

           

        

         

        WHEREAS,
the Transferor is the sole shareholder of the Company and owns the equity
interests representing 100% of the registered capital in the
Company.  As of the date hereof, the Transferor has already
contributed in cash in the amount of US$
48,672,359.64 (the “Paid-up Registered Capital”) to the registered capital of
the Company and the remaining unpaid registered capital (the “Un-paid Registered
Capital”) of the Company as at the Signing Date is calculated as the Registered
Capital as stated in its current and valid business licence and approval
certificate effective at the Signing Date less the Paid-up Registered
Capital;

         

        WHEREAS,
the Transferor intends to transfer to the Transferee, and the Transferee desires
to acquire from the Transferor, the equity interests representing 60 % of the
ownership interest in the Company upon the terms and subject to the conditions
set forth in this Agreement, and to change the name of the Company into Suzhou
ASEN Semiconductors Co., Ltd. (the “New Company Name”);

         

        WHEREAS,
concurrently with the execution of this Agreement, the Transferor and the
Transferee are entering into a Shareholders’ Agreement (the “Shareholders’
Agreement”) in the form of Exhibit A attached hereto and revised and restated
Articles of Association of the Company (the “New Articles of Association”) in
the form of Exhibit B attached hereto;

         

        WHEREAS, upon the approval by the Approval Authority of this
Agreement, the
Shareholders’ Agreement and the New Articles
of Association, on the Registration Date, the Transferee will become a
new shareholder of the Company ;

         

        NOW,
THEREFORE, in consideration of the premises, and the mutual representations,
warranties, covenants and agreements herein set forth and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto hereby agree as follows:

        


        ARTICLE
I

         

        DEFINITIONS AND RULES OF
CONSTRUCTION

         

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

         

        “Affiliate” means, with respect to any Person, any
other Person that directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with, such
Person.  As used in this definition, the term “control” means the possession, directly or
indirectly, of the power to
direct or cause the direction of management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.

         

        “Agreement” means this Equity Interests Transfer
Agreement (including the Exhibits and Schedules hereto), as amended,
supplemented, modified or restated from time to time.

         

        “Applicable
Law” means, with respect to any Person, any
statute, law, ordinance, rule, regulation, order, judgment, legal process or other
requirement of any Governmental Entity applicable to such Person or any of its
properties or assets.

         

        
          
             

            
              Execution
copy August 6, 2007

            

            
              
                
                

              

              
                2

                
                  

                

              

              
                
                

              

            

             

          

           

        

         

        “Approval
Authority” means the Ministry of Commerce of the
PRC or other relevant Governmental Entity of the PRC authorized to approve the Transaction
Documents.

         

        “Benefit
Plans” has the meaning set forth in Section
3.21.

         

         “Big Four” means any of Deloitte & Touche,
Ernst & Young, KPMG or PricewaterhouseCoopers or their respective associated accounting firms in the
PRC.

         

        “Company” has the meaning set forth in the
recitals hereto.  For the avoidance of doubt, “Company” refers to the Company as a wholly
foreign owned enterprise with the Transferor as its sole shareholder prior to
the approval by the Approval Authority of, and the amendments registration with the
Registration Authority in connection with, the transactions contemplated by
Transactions Documents, and as a wholly foreign owned joint venture with both
the Transferor and the Transferee as its shareholders
thereafter.

         

        “Employees” has the meaning set forth in Section
3.21(a).

         

        “Encumbrance” means a lien, pledge, mortgage, claim,
encumbrance, security interest, option, charge or restriction of any kind and
shall always exclude Permitted Encumbrances.

         

        “Environmental
Claim” means any written or oral notice, claim,
demand, order, action, suit, complaint, proceeding or other communication by any
Person alleging liability or potential liability (including any liability or
potential liability for investigatory costs, cleanup costs, governmental response costs, natural
resource damages, property damage, personal injury, fines or penalties) on the
part of the Company arising out of, relating to, based on or resulting from (a)
the presence, discharge, emission, release or threatened release of any Hazardous Substances at
any location, whether or not owned, leased or operated by the Company, or (b)
circumstances forming the basis of any violation or alleged violation of any
Environmental Law or Environmental Permit, or (c) otherwise relating to obligations or liabilities
under any Environmental Law.

         

        “Environmental
Law” means any and all statutes, laws,
ordinances, rules, regulations, orders, judgments or other requirement of any
Governmental Entity regulating, relating to or imposing liability or standards of conduct
concerning the protection of the environment, including laws relating to
Hazardous Substances.

         

        “Environmental
Permits” means any and all Permits required
under any Environmental Law.

         

         “Existing Articles of
Association” means the articles of association of the
Company as of the date hereof and prior to the conversion of the Company into a
wholly foreign owned limited liability company with the Transferor and the
Transferee as its shareholders.

         

        “Existing Business
License” means the effective Enterprise Legal Person
Business License issued by the Registration Authority to the Company as of the
date hereof and prior to the conversion of the Company into a wholly foreign
owned limited liability company with the Transferor and the
Transferee as its
shareholders.

         

         “Financial
Statements” has the meaning set forth in Section
3.12(a).

         

        
          
             

            
              Execution
copy August 6, 2007

            

            
              
                
                

              

              
                3

                
                  

                

              

              
                
                

              

            

             

          

           

        

         

         “Governmental
Entity” means any governmental authority,
court, commission, tribunal or organization or any regulatory, administrative or
other agency, or any
political or other subdivision, department or branch of any of the
foregoing.

         

        “Hazardous
Substance” means any lead, cadmium, mercury, hexavalent,
chromium, polychlorinated biphenyls, polybrominated, diphenyl, ethers, asbestos,
pollutants,
contaminants, radioactivity
and any other substances of any kind, that are regulated pursuant to or could
give rise to material
liability under any
Environmental Law.

         

         “IFRS” means the body of pronouncements issued
by the International Accounting Standards Board.

         

         “Intellectual
Property” means all intellectual property and
similar proprietary rights in any jurisdiction, whether owned, used or held for
use under license, whether registered or unregistered, including such rights in
and to (a) patents, inventions, discoveries, processes, designs, techniques,
developments, technology and how-how; (b) trademarks, service marks, trade
dress, logos, trade names, domain names, corporate names and other source
indicators, including all goodwill associated therewith, (c)
copyrights and works of authorship in any medium,
including computer programs, hardware, firmware, software, applications, files,
Internet site content, databases and compilations, documentation and related
items and (d) trade secrets, ways of doing business and confidential
information.

         

        “Material Adverse
Effect” means a material adverse effect on the
business, operations or financial condition of the Company taken as a whole,
which would or could reasonably be expected to have an adverse effect on
the ability of the Company to perform or comply with any of its obligations
under this Agreement or to continue as a going concern.

         

        “Material
Contract” has the meaning set forth in Section
3.11(b).

         

         “New Articles of
Association” has the meaning set forth in the
recitals hereto.

         

         “New Approval
Certificates” means the new Certificate of Approval
issued by the relevant Approval Authority as evidence of their approval of the
Transaction Documents, on which the Transferee’s capacity as the shareholder of the
Company and its equity
ownership percentage as specified in the Transaction Documents in the Company,
among others, have been duly recorded.

         

         “New Business
License” means the amended Enterprise Legal
Person Business License issued by the Registration Authority to the
Company after approval by
the Approval Authority of the transactions contemplated by the Transaction
Documents.

         

         “Organizational
Documents” means, with respect to any Person, the
certificate of incorporation, charter, memorandum of association, articles of
association, by-laws,
partnership agreement, operating agreement, limited liability company agreement
or other organizational or constitutional documents of such
Person.

         

         “Payment
Date” has the meaning set forth in Section
2.2.

         

        “Permits” has the meaning set forth in Section 3.10.

         

        
          
             

            
              Execution
copy August 6, 2007

            

            
              
                
                

              

              
                4

                
                  

                

              

              
                
                

              

            

             

          

           

        

         

        “Permitted
Encumbrance” has the meaning set forth in Section
3.19(a).

         

        “Person” means any individual,
partnership, corporation, limited liability company,
joint venture, unincorporated organization or association, trust (including the
trustees thereof, in their
capacity as such), Governmental Entity or other entity.

         

        “PRC” means the People’s Republic of China, other than
the Hong Kong Special Administrative Region, the Macau Special Administrative
Region and Taiwan.

         

        “PRC Business
Day” means any day which is not a Saturday, Sunday
or other day on which banks in the PRC are required or authorized by Applicable
Law to be closed.

         

        “PRC GAAP” means the generally accepted accounting
principles in the People’s Republic of China.

         

        “Properties” has the meaning set forth in Section
3.19(a).

         

        “Purchase Price” shall mean
the purchase price to be paid by the Transferee to the Transferor according to
Section 2.2.

         

        “Registration
Authority” means the State Administration of
Industry and Commerce of the PRC or its authorized local Administration of
Industry and Commerce, which issues the New Business License.

         

         “Registration
Date” means the date on which all the
necessary amendments to the original business registration of the Company, as a
result of the transactions
contemplated by the Transaction Documents, have been duly conducted by the Registration Authority pursuant to
Applicable Law and the Transaction Documents, including the registration of the
New Articles of Association, the Transferee as the new shareholder of the Company and its equity
ownership percentage in the Company, and the new
name of the Company, which shall be evidenced by issuance of the New Business
License on such date.

         

         “Renminbi” or “RMB” means the lawful currency of the
PRC.

         

        “Shareholders’ Agreement” has the meaning set forth in the
recitals hereto.

         

        “Signing
Date” means the date of
6th August, 2007.

         

         “Subsidiary” means, with respect to any Person, any
corporation, limited liability company, partnership, joint venture or any other
entity of which such Person
(either alone or through or together with any other Subsidiary), owns, directly
or indirectly, securities or other interests, the holders of which are generally
entitled to more than 50% of the vote for the election of the board of
directors or other similar governing body of
such entity, or otherwise having the power to direct the business and policies
of that entity.

         

        “Taiwan Business
Day” means any day which is not a Saturday,
Sunday or other day on which banks in Taiwan are required or authorized by Applicable Law to be
closed.

         

        
          
             

            
              Execution
copy August 6, 2007

            

            
              
                
                

              

              
                5

                
                  

                

              

              
                
                

              

            

             

          

           

        

         

        “Tax” or “Taxes” means any tax, levy, impost, duty or
other charge or withholding of a similar nature levied, charged or imposed in
PRC (including any penalty or interest payable in connection with any failure
to pay or any delay in
paying any of the same).

         

        “Tax
Return” means any return, report, information
return, schedule, certificate, statement or other document or amendment thereto
(including any related or supporting information) filed or required to be
filed with a Governmental
Entity in connection with any Tax.

         

        “Transferee” has the meaning set forth in the
recitals hereto.

         

        “Transferor” has the meaning set forth in the
recitals hereto.

         

        “Transaction Documents” means
this Agreement, the Shareholders’ Agreement and the New Articles of
Association.

         

         “U.S. Dollar” or “US$” means the lawful
currency of the United States.

         

        Section 1.2   Rules of
Construction.

         

        (a) Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall
include the singular and
the plural, and pronouns stated in either the masculine or the neuter gender
shall include the masculine, the feminine and the neuter.  The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”

         

        (b) Any reference to any provision of a
statute, rule, regulation, order or similar authority shall be deemed to refer
to any successor or amendment to such provision.

         

        


         

        ARTICLE
II

         

        TRANSFER
OF EQUITY INTERESTS

         

        Section
2.1  Equity Interests
Transfer.
On the
terms and subject to the conditions set forth in this Agreement, the Transferor
hereby agrees to assign and transfer to the Transferee, and the Transferee
hereby agrees to acquire from the Transferor, the equity interests
representing 60 % of the
ownership interest in the Company (the “Equity Interests”), free and clear of any
and all Encumbrances and with all rights
attached or accruing to the Equity Interests, for the consideration specified in
Section 2.2 (the “Equity Interests Transfer”).

         

        Section
2.2      Payment of Purchase
Price.

         

        Upon the
terms and subject to the conditions of this Agreement, within fifteen (15)
Taiwan Business Day following the Registration Date, or on such earlier date as
the Transferor and the Transferee may agree upon in writing (such date of
payment, the “Payment Date”), provided that if such date is not a Taiwan
Business Day, the Payment Date shall be the Taiwan Business Day 

         

        
          
             

            
              Execution
copy August 6, 2007

            

            
              
                
                

              

              
                6

                
                  

                

              

              
                
                

              

            

            
               

              immediately
preceding such date, (i) the Company and the Transferor shall deliver or cause
to be delivered to the Transferee all such other certificates, documents and
instruments as the Transferee shall reasonably request in connection with the
transactions contemplated by this Agreement to be delivered on the Payment Date,
and (ii) the Transferee shall pay or cause to be paid to the Transferor in US
Dollars on the Payment Date by wire transfer of immediately available funds
of  US$ 21,600,000 (the “Purchase Price”) to such account designated
by the Transferor in writing at least three (3) Taiwan Business Days prior to
the Payment Date.

               

              Section
2.3    Resulting
Equity Ownership. Upon (1)
the approval by the Approval Authority of the Transaction Documents, and (2) the
Registration Date and (3) the consummation of the Equity Interests Transfer
contemplated by this Agreement, the Transferee shall become a major shareholder
of the Company and enjoys all right, title and interest in the Equity Interests,
and the Parties’ respective equity interests in the registered capital of the
Company shall be as follows:

               

              
                	
                        Party

                      	
                        Amount
      of Paid-up Registered Capital (USD)

                      	
                        Equity
      Interest (%)

                      
	
                        Transferor

                      	
                        [19,468,943.86]

                      	
                        40%

                      
	
                        Transferee

                      	
                        [29,203,415.78]

                      	
                        60%

                      
	
                        Total

                      	
                        [48,672,359.64]

                      	
                        100%

                      


              

              


              Section
2.4    Contribution of the Un-paid
Registered Capital. After the Payment Date and subject to approval by the
Approval Authority and the other applicable approval authority, the Transferor
and Transferee shall contribute to the Company as registered capital on a
pro-rata basis in accordance with their respective equity interest set forth in
Section 2.3, until the transferor has contributed up to a maximum amount of US
Dollars 21,600,000 (not including any Paid-up Registered Capital). Any further
capital contribution shall be made by the Transferee and shall be conditional on
the approval by the Approval Authority and the other applicable approval
authority of such further capital contribution. The Transferor shall cooperate
with the Transferee and the Company if the Transferee or the Company proposes to
reduce the Registered Capital and/or total investment amount of the Company
below the amount(s) stated in the then valid business licence and approval
certificate.

               

              ARTICLE
III

               

              REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND THE TRANSFEROR

               

              The
Company and the Transferor, jointly and severally, hereby represent and
warrant to the Transferee as follows:

            

          

        

         

        
          
            Section
3.1  Authorization.
On the
Signing Date and the Registration Date, (i) the execution, delivery and
performance by the Transferor and the Company of the Transaction Documents to
which it is a party and the consummation by the Transferor and the Company of
the transactions 

             

            
              Execution
copy August 6, 2007

            

            
              
                
                

              

              
                7

                
                  

                

              

              
                
                

              

            

             

            contemplated
by the Transaction Documents are within the Transferor’s full power and legal
rights and the Company’s power and authority (corporate or other) and, in the
case of the Company, have been duly authorized by all necessary action
(corporate or other) on the part of the Company and (ii) each of the
Transaction Documents to which the Transferor and the Company is a party has
been duly authorized, executed and delivered by the Transferor and the Company,
and constitutes a valid and legally binding obligation of the Transferor and the
Company, enforceable against each of them in accordance with its terms, subject
as to enforceability, to bankruptcy, insolvency, reorganization and similar laws
of general applicability relating to or affecting creditors’ rights and to
general equity principles.

             

            Section
3.2 
No
Conflicts. On the
Signing Date and the Registration Date, the execution, delivery and performance
of the Transaction Documents to which the Transferor or the Company is a party
and the consummation of the transactions contemplated by the Transaction
Documents will not (a) result in a violation of the provisions of the
Organizational Documents of the Transferor and the Company, (b) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute (with or without the giving of notice, the lapse of time or both) a
default under, any agreement or instrument to which the Transferor or the
Company is a party or by which it is bound or to which any of its properties or
assets is subject, (c) result in a violation of any Applicable Law applicable to
the Transferor or the Company (d) result in the imposition or creation of any
Encumbrance on the equity interests of the Company, except in the case of
sub-clauses (b) and (c), to the extent that any such events could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the Transferor and Company to perform their
obligations under the Transaction Documents or consummate the transactions
contemplated thereby.

             

            Section
3.3 
Absence
of Further Requirements. On
the Signing Date and the Registration Date, no other consent, approval,
authorization, order, registration, filing or qualification of or with any third
party or Governmental Entity having jurisdiction over the Transferor or the
Company or any of their properties or assets is required for the consummation by
the Transferor or the Company of the transactions contemplated by the
Transaction Documents, except such consents, approvals, authorizations,
orders, registrations, filings or qualifications (a) identified in Section
6.1.(d) or (b) as have been duly obtained or made by the Transferor and the
Company on the Registration Date and are in full force and effect.

             

            Section
3.4 
Equity
Interests.  On
the Signing Date and the Registration Date, the Transferor is the record and
beneficial owner of the Equity Interests free
and clear of any Encumbrances. Upon the consummation of the transactions
contemplated by this Agreement, the Transferor shall transfer good and valid
title to such Equity Interests, free and clear of any Encumbrances, to the
Transferee.  Except for the transactions otherwise contemplated
hereunder, there is no outstanding option, warrant or other right to purchase or
subscribe to the equity interests of the Company, and no other contract,
commitment, agreement, understanding or arrangement of any kind relating to the
issuance or disposition of equity interests of the Company. 

             

            Section
3.5 
No
Legal Proceedings.  On
the Signing Date and the Registration Date, there is no legal action,
dispute, claim, suit, investigation or other proceeding by or before any
Governmental Entity or arbitration pending, or to the knowledge of the
Transferor or the Company, threatened (a) seeking to restrain or prohibit the
execution, delivery and performance of the Transaction Documents or the
consummation of the transactions contemplated thereby or (b) that could
reasonably be expected to have a material adverse effect on the ability of
the Transferor and the 

             

            
              Execution
copy August 6, 2007

            

            
              
                
                

              

              
                8

                
                  

                

              

              
                
                

              

            

             

            Company to
perform their respective obligations under the Transaction Documents or
consummate the transactions contemplated thereby.

             

            Section
3.6 
No
Brokers’ Fees. On the
Signing Date and the Registration Date ,none of the Company, the Transferor
or any of their directors, officers, employees or Affiliates, has employed any
investment banker, broker or finder or incurred any liability for any investment
banking fees, brokerage fees, commissions or finders’ fees or any other
similar fees or commissions in connection with the transactions
contemplated by the Transaction Documents for which the Company, the Transferee
or their Affiliates has or could have any liability.

             

            Section
3.7 
Organization
and Standing of the Company.  
On the Signing Date and the Registration Date, (i) the Company is a limited
liability company duly organized, validly existing and in good standing under
the laws of the PRC and has the full power and authority (corporate and
otherwise) to carry on its business as it is now being conducted and to own and
lease the properties and assets which it now owns or leases, and (ii) the
Company has passed all annual examinations with the Registration Authority, and
has not received any shut-down or suspension notice or order from any
Governmental Entity.  No event has occurred that may in all likelihood
cause the existence of the Company or its legal person status to be questioned
or cancelled.  The operations of the Company have at all times been
within the scope of its Existing Business License.  To the knowledge
of the Transferor or the Company, neither the Company nor any of its
shareholder, directors, supervisors and senior management personnel has been a
subject of any criminal investigations. The Transferor and the Company have
provided to the Transferee true and complete copies of the Organizational
Documents of the Company.

             

            Section
3.8 
Capitalization
of the Company. 

             

            On the
Signing Date and the Registration Date,

             

            
              	
                      (a)
        

                    	
                      The
      entire registered capital of the Company as of the date hereof is stated
      in its current and valid business licence and approval certificate of
      which the Paid-up Registered Capital has been contributed by the
      Transferor to the Company.

                    


            

            
              	 	 
	
                      (b)
        

                    	
                      Except
      as set forth in Section 3.8(a), there are no equity interests in the
      Company or any warrant or other right to purchase or subscribe to the
      equity interests of the Company.  There are no outstanding
      obligations of the Company to repurchase, redeem or otherwise acquire any
      equity interests in the Company.

                    
	 	 


            

            
              	
                      (c)
        

                    	
                      There
      are no declared or accrued but unpaid dividends or distributions with
      respect to any of the equity interests in the Company.  Each
      dividend or profit distribution of the Company was made in accordance with
      Existing Articles of Association and Applicable Laws.

                    
	 	 


            

            
              	
                      (d)
        

                    	
                      The
      Company is not (or is not taken to be under Applicable Laws) insolvent or
      unable to pay its debts and has not stopped or suspended the payment of
      all or a class of its debts. There are no facts, matters or circumstances
      which give any person the right to apply to liquidate or wind up the
      Company and in all likelihood succeed in such exercise, and no receiver or
      administrator has been 

                    


            

             

            
              Execution
copy August 6, 2007

            

            
              
                
                

              

              
                9

                
                  

                

              

              
                
                

              

            

             

            appointed to the Company or over any part of its
assets and no such appointment has been threatened to the  knowledge
of the Transferor or the Company.  The Company has not entered into
any arrangement, compromise or composition with or assignment for the benefit of
its creditors or a class of them.

             

            Section
3.9       No
Investment. On the
Signing Date and the Registration Date, the Company has no Subsidiaries and it
does not, either directly or indirectly, own legally or beneficially any shares
of or equity interests in, or any notes or bonds of, any company, partnership,
joint venture, trust or other entity.

             

            Section
3.10 
Compliance
with Applicable Laws.  On
the Signing Date and the Registration Date, the Company (a) is in compliance
with the provisions of its Organizational Documents and all Applicable Laws and
(b) has duly obtained and possesses all permits, concessions, grants,
franchises, licenses and other governmental authorizations, agreements and
approvals (collectively “Permits”) necessary for the conduct of its business in
all material respects as currently conducted.  Each Permit is in full
force and effect, there are no proceedings pending or, to the knowledge of any
of the Transferor or the Company, threatened which would in all likelihood
result in the revocation, cancellation, suspension or modification of any
Permit.

             

            Section
3.11       Material
Contracts.

             

            
              	
                      (a)  
        

                    	
                      On
      the Signing Date and the Registration Date, the Company is not a party to
      or not bound by:

                    


            

            
              	 	 
	
                      (i)  
        

                    	
                      any
      agreement for the purchase or lease of materials (except wafer ),
      supplies, goods, services, equipment or other assets that provides for
      annual payments by the Company of US$1,000,000 or more
      ;

                    
	 	 


            

            
              	
                      (ii)  
        

                    	
                      any
      sales, distribution or other similar agreement providing for the sale by
      the Company of materials, supplies, goods, services, equipment or other
      assets that provides for annual payments to the Company of
      US$1,000,000 or more;
      

                    


            

            
              	 	 
	
                      (iii)   
       

                    	
                      any
      collective bargaining agreement;

                    
	 	 


            

            
              	
                      (iv)   
       

                    	
                      any
      partnership, joint venture or other similar
  agreement;

                    


            

            
              	 	 
	
                      (v)   
       

                    	
                      any
      contract relating to (x) the acquisition of any business or a substantial
      portion of the assets of any business or (y) the disposition of all or a
      substantial portion of the assets of the Company (whether by merger, sale
      of equity interests, sale of capital stock, sale of assets or
      otherwise);

                    
	 	 
	(vi)    	
                      any
      agreement relating to indebtedness for borrowed money, including any
      pledge, guarantee, security agreement, mortgage or similar
      Encumbrance;

                    
	 	 
	(vii)   	any
      material license, franchise or other similar agreement relating to
      Intellectual Property (save and except for Technology Transfer and
      Assistance Agreement entered into as of the Signing Date by the Transferor
      and Company );


            

             

             

            Execution
copy August 6, 2007

            
              
                
                

              

              
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              	(viii)   
      	any
      material agency, dealer, sales representative, marketing or other similar
      agreement;
	 	 
	(ix)  
       	any  material
      agreement with any director, officer or key employees of the Company
      except for labor contract; and
	 	 
	(x)
           	any
      material agreement between the Company, on the one hand, and the
      Transferor or any Subsidiary or Affiliate of  the Transferor or
      other Person in which any of the foregoing has a direct or indirect
      interest, on the other hand (except the General Service Agreement between
      the Company and the Transferor, which will be terminated before the
      Registration Date and any agreement otherwise agreed in the Transaction
      Documents, including but not limited to the Technology Transfer and
      Assistance Agreement and the Packaging and Testing Services Agreement to
      be entered by the Company and the Transferor, and any agreement otherwise
      agreed in the Transaction Documents).


            

                

            
                A
Material Contract is any contract that is described in any of the above Section
3.11 (a) (i) to (x).

            

               

            Section
3.12      Financial
Statements. 

             

            
              	
                    	
                      (a) 

                    	
                      The
      Transferor and the Company have delivered to the Transferee prior to
      the Signing Date the audited balance sheet of the Company as at
      December 31, 2006 and the related audited statements of income, cash flows
      and changes in shareholders equity for the fiscal years ended December 31,
      2006 and have showed to the Transferee the reviewed and un-audited balance
      sheet of the Company as at June 30, 2007 and the related reviewed and
      un-audited statements of income, cash flows and changes in shareholders
      equity for the six-month period ended June 30, 2007 (collectively, the
      “Financial Statements”).  Except as
      described in the notes thereto, the Financial Statements (x) were prepared
      in accordance with PRC GAAP consistently applied; (y) present fairly, in
      all material respects, the financial position, results of operation and
      cash flows of the Company as of  the dates thereof; (z) are in
      all material respects consistent with the books and records of the
      Company.  All such books and records have in all material
      respects been maintained accurately and in accordance with PRC GAAP and
      Applicable Law.

                    


            

             

            
              	
                    	
                      (b) 

                    	
                      On
      the Signing Date, the Company maintains a system of internal accounting
      controls that provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific
      authorizations, (ii) transactions are recorded in reasonable detail,
      accurately and fairly reflect the transactions and dispositions of assets
      of the Company as necessary to permit preparation of financial statements
      in conformity with PRC GAAP, (iii) access to and use of assets is
      permitted only in accordance with management’s general or specific
      authorization, (iv) the recorded accountability for assets is compared
      with existing assets at reasonable intervals and appropriate actions are
      taken with respect to any differences, and (v) the Company has made and
      kept books, records and accounts which, in reasonable detail, accurately
      and fairly reflect the transactions and dispositions of assets of the
      Company and provide a sufficient basis for the preparation of financial
      statements of the Company in accordance with PRC
  GAAP.

                    


            

             

            Execution
copy August 6, 2007

            
              
                
                

              

              
                11

                
                  

                

              

              
                
                

              

            

             

            Section
3.13 
Absence
of Undisclosed Liabilities.  On
the Signing Date and the Registration Date, to the best knowledge of the
Transferor, the Company (a) has no indebtedness, claims, commitments,
liabilities or obligations of any nature, whether known or unknown, absolute,
accrued, contingent or otherwise to any third party and Governmental Entity,
including but not limited to China-Singapore Suzhou Industrial Park Development
Co., Ltd., and whether due or to become due, asserted or unasserted, except
(i) to the extent disclosed or reserved against in the Financial Statements,
(ii) for liabilities and obligations that were incurred after December 31, 2006 in the
ordinary course of business consistent (in amount and kind) with past practice
and that in the aggregate are not material, nor (b) is party to any earn-out or
other similar contingent pay-out arrangement or equity claim.

             

            Section
3.14 
Absence
of Changes. During the
period commencing on the Signing Date and ending at the Registration Date,
the Company shall conduct its business in the ordinary course of business
consistent with the past practice and shall not have:

             

            
              	
                      (a)  

                    	
                      suffered
      any Material Adverse Effect;

                    


            

            
              	 	 
	
                      (b)  

                    	
                      incurred,
      assumed, guaranteed or discharged any indebtedness, Encumbrance, claim,
      commitment, obligation or liability, absolute, accrued, contingent or
      otherwise, to any third party and Governmental Entity, including but not
      limited to China-Singapore Suzhou Industrial Park Development Co.,
      Ltd., whether due or to become due, except for (i) current
      liabilities for trade or business obligations incurred in connection with
      the purchase of goods or services in the ordinary course of business
      consistent (in amount and kind) with past practice and (ii) the payment of
      such current liabilities;

                    
	 	 


            

            
              	
                      (c)  

                    	
                      sold,
      transferred, leased or licensed to others or otherwise disposed of, or
      purchased or acquired any material assets, property, business or assets,
      tangible or intangible, except for products sold or acquired in the
      ordinary course of business consistent with past practice, or canceled or
      compromised any debt, claim, commitment, obligation or liability or waived
      or released any right of substantial value, other than in the ordinary
      course of business consistent (in amount and kind) with past practice, and
      not material in the aggregate;

                    


            

            
              	 	 
	
                      (d)  

                    	
                      terminated,
      cancelled, materially modified or received any notice of termination of
      any Material Contract;

                    
	 	 


            

            
              	
                      (e)  

                    	
                      made
      any material loans, advances or capital contributions to, or investments
      in, any Person;

                    


            

            
              	 	 
	
                      (f)  

                    	
                      suffered
      any damage, destruction or loss (which is not covered by
      insurance)  relating to the liabilities and obligations arisen
      out of any products or services provided, manufactured or sold by Company
      before the Registration Date such as warranty obligations and product
      liabilities, due to (i) the Company’s performance of any agreement for the
      purchase or lease of materials, supplies, goods, services, equipment or
      other assets before the Registration Date, and (ii) the Company’s
      performance of any sales, distribution or other similar agreement
      providing for the sale by the Company of materials, supplies, goods,
      services, equipment or other assets before the Registration Date, in any
      case or in the aggregate in excess of
  US$100,000;

                    


            

             

            Execution
copy August 6, 2007

            
              
                
                

              

              
                12

                
                  

                

              

              
                
                

              

            

             

            
            

            
              	
                      (g)  

                    	
                      (i)
      assigned, transferred or granted any rights under, or entered into any
      agreement or settlement regarding the substantial breach,
      misappropriation, infringement or violation of, any Intellectual Property,
      or substantially modified any existing rights with respect thereto or
      (ii) settled or compromised any claim, action, suit, litigation,
      proceeding, arbitration, investigation, audit or controversy relating to
      Intellectual Property, in any case or in the aggregate in excess of
      US$200,000;

                    


            

            
              	 	 
	
                      (h)  

                    	
                      made
      any increase in the rate of compensation, commission, bonus or other
      direct or indirect remuneration payable, or paid or agreed or promised to
      pay (in either case in writing or orally), conditionally or otherwise, any
      bonus, incentive, retention or other compensation, retirement, welfare,
      fringe or severance benefit or vacation pay, to or in respect of any
      present or former director, officer, employee or consultant, of any of the
      Company, except for any increase, payment or agreement or promise to pay
      in the ordinary course of business consistent (in amount and kind) with
      past practice;

                    
	 	 


            

            
              	
                      (i)  

                    	
                      made
      any change in its accounting, auditing or tax methods, practices or
      principles, except to the extent required by PRC GAAP or Applicable
      Laws;

                    


            

            
              	 	 
	
                      (j)  

                    	
                      committed,
      suffered, permitted or incurred any transaction or event which would
      substantially increase its liability relating to Taxes other than in the
      ordinary course of business and consistent with past
    practice;

                    
	 	 


            

            
              	
                      (k)  

                    	
                      paid
      or agreed to pay any substantial legal, accounting, brokerage, finder’s
      fee, Taxes or other expenses in connection with, or incurred any severance
      pay obligations by reason of the Transaction Documents or the transactions
      contemplated thereby that have not been paid or will not be fully paid and
      discharged at or prior to the Registration
  Date;

                    


            

            
              	 	 
	
                      (l)  

                    	
                      deferred
      or agreed to defer payment of any payables or accelerated or agreed to
      accelerate the collection of any receivables in excess of
      US$100,000;

                    
	 	 


            

            
              	
                      (m)  

                    	
                      made
      any grant of credit to any customer or distributor on terms materially
      more favorable than had been extended to that customer or distributor in
      the past;

                    


            

            
              	 	 
	
                      (n)  

                    	
                      amended
      its Organizational Documents or merged with or into or consolidated with
      any other Person, subdivided, combined or changed or agreed to change
      in any manner the character of its business;

                    
	 	 


            

            
              	
                      (o)  

                    	
                      declared,
      promised or made any dividend or other distribution to the Transferor in
      any materially different manner or made any substantial change whatsoever
      in its capital structure other than that in the ordinary course of
      business consistent (in amount and kind) with past
    practice;

                    


            

            
              	 	 
	
                      (p)  

                    	
                      (i)
      loaned or advanced substantial money or other property to any present or
      former director, officer, employee or consultant of the Company, (ii)
      established, adopted, entered into, substantially amended or terminated
      any Benefit Plan, collective labor agreement (other than as may be
      required by the terms of an existing Benefit Plan or collective labor
      agreement, or as may be required by Applicable Law), or (iii) granted
      

                    


            

             

             

            Execution copy August 6, 2007

            
              
                
                

              

              
                13

                
                  

                

              

              
                
                

              

            

             

            any equity or equity-based awards to any present
or former director, officer, employee or consultant of the Company; or

             

            
            

            
              	
                      (q)  

                    	
                      taken
      any action or omitted to take any action that would result in the
      occurrence of any of the foregoing.

                    


            

             

            Section
3.15 
Product
Warranties.  On
the Signing Date and the Registration Date, except for warranties implied by
Applicable Law, there are no warranties furnished by the Company to customers
express or implied, written or oral, with respect to the products sold by the
Company.

             

             Section
3.16  Effect of Transaction

             

            (a)  No
creditor, employee, consultant, customer, supplier or other Person having a
material business relationship with the Company has informed the
Company that such Person intends to change its relationship with the
Company because of the transactions contemplated by Transaction Documents, and
to the knowledge of the Transferor or the Company, no such Person has any such
intent.

             

            (b)  Transferor
will make reasonable efforts (but without guarantee) to help the Company not to
lose any benefits, rights, privileges or and preferential treatment, which the
Company is currently enjoying as of the Signing Date.

             

            Section
3.17  Receivables  On
the Signing Date, the receivables of the Company that are reflected in the
Financial Statements, and all such receivables which have arisen since the date
of the Financial Statements, have arisen only from bona fide transactions in the
ordinary course of business consistent with past practice, and the Transferor
has no reason to believe that such receivables are not collectible in the
ordinary course of business consistent with past practice.  There are
no facts or circumstances generally (other than general economic conditions)
which would result in any material increase in the uncollectability of such
receivables as a class in excess of the reserves therefore set forth in the
Financial Statements. There has not been any material adverse change in the
collectability of such receivables since December 31, 2006.

             

            Section
3.18  Inventories

             

              On the Signing Date, except for net of reserves as reflected in
the Financial
Statements, the inventories of the Company are suitable for filling orders in
the ordinary course of business.

             

            Section
3.19 Title to
Properties.

             

            
              	
                        (a)         

                    	
                      On
      the Signing Date and the Registration Date, the Company has good and
      marketable title to, or a valid and binding leasehold interest in, the
      real property, personal property and assets used by the Company in their
      business (collectively, the “Properties”), free and clear of all
      Encumbrances, except for Permitted Encumbrance. Permitted Encumbrance
      shall mean (i) any Encumbrances which, individually or in the aggregate,
      would not reasonably be expected to have a Material Adverse Effect; (ii)
      any Encumbrances for taxes, assessments and other governmental charges not
      yet due and payable, or due but not delinquent, or due and being contested
      in good faith by appropriate proceedings, during which collection or
      enforcement is stayed so long as 

                    


            

             

            Execution copy August 6, 2007

            
              
                
                

              

              
                14

                
                  

                

              

              
                
                

              

            

             

            adequate security has been posted for the payment of such amounts;
(iii) any mechanics’, workmen’s, repairmen’s, warehousemen’s, carriers’ or other
similar liens and encumbrances arising in the ordinary course of business
consistent with past practice for amounts not yet due and payable; or (iv) any
Encumbrance which arises in the ordinary course of business consistent with past
practice.

             

            
              	
                        (b)         

                    	
                      On
      the Signing Date, the Transferor and the Company have provided the
      Transferee with a true and complete copy of each lease agreement in
      respect of leased real property (a “Lease
      Agreement”), including “CONTRACT FOR CUSTOMER-BUILT LEASE FACTORY”
      dated on Mar 29, 2002, “CONTRACT FOR THE LEASE OF SUPPORTING
      INFRASTRUCTURE” dated on Mar 29, 2002 and “ASSIGNMENT CONTRACT TO
      CONSTRUCT SUPPORTING INFRASTRUCTURES’ dated on Mar 29, 2002. Each Lease
      Agreement is the legal, valid, binding and enforceable obligation of the
      respective parties thereto, and all rent and other material sums and
      charges payable by the Company thereunder are current.  The
      Company is not in default under, nor has received a notice of default with
      respect to, any Lease Agreement under which it is the lessee of real
      property.  The Company has not received any notice from the
      other party to any Lease Agreement of the termination
    thereof.

                    


            

             

            
              	
                        (c)         

                    	
                      On
      the Signing Date and the Registration Date, there is no pending or, to the
      knowledge of any of the Transferor or the Company, threatened,
      condemnation, expropriation, eminent domain or similar proceeding
      affecting all or any part of the Properties, and the Company has not
      received any written or oral notice of any of the
  same.

                    


            

             

            
              	
                        (d)         

                    	
                      On
      the Signing Date and the Registration Date, the buildings and other
      structures on the Properties have been regularly maintained and are fit
      for the purposes for which they are presently used.  The Company
      has rights of egress and ingress with respect to each of the Properties
      that are sufficient for them to conduct their
  business.

                    


            

             

            
              	
                        (e)         

                    	
                      On
      the Signing Date and the Registration Date, all of the personal property
      and assets required for the conduct of the business of the Company are in
      good maintenance, operating condition and repair, other than normal wear
      and tear and any such property and assets which are to be scrapped and/or
      replaced in due course in the ordinary course of the Company’s
      business.

                    


            

             

            
              	
                        (f)         

                    	
                      On
      the Signing Date and the Registration Date, there shall not have
      occurred any material payments or other disbursements to creditors of the
      Company other than in the ordinary course of
  business.

                    


            

             

            Section
3.20 Intellectual
Property.

             

             On the Signing
Date and the Registration Date,

             

            
              	
                      (a)   
        

                    	
                      The
      Company owns all right, title and interest in and to, or possess a valid
      and enforceable right to use, all material Intellectual Property used in
      their respective business, including but not limited to Intellectual
      Property as set 

                    


            

             

             

            Execution copy August 6, 2007

            
              
                
                

              

              
                15

                
                  

                

              

              
                
                

              

               

              forth in the Technology Transfer and Assistance
Agreement during the term of this Technology Transfer and Assistance
Agreement.

            

             

            
              	
                      (b)    
       

                    	
                      The
      Company has not taken any action or failed to take any action that could
      reasonably be expected to result in the abandonment, cancellation,
      forfeiture, relinquishment, invalidation or unenforceability of any of the
      registered Intellectual Property material to their respective business
      (including the failure to pay any filing, examination, issuance, post
      registration and maintenance fees, annuities and the like and the
      failure to disclose any known material prior art in connection with the
      prosecution of patent applications).  The Company has taken all
      reasonable steps in accordance with standard industry practices to protect
      its rights in its Intellectual Property and at all times has maintained
      the confidentiality of all information that constitutes or constituted a
      trade secret of the Company.

                    
	 	 


            

            
              	
                      (c)    
       

                    	
                      (i)
      The Company is not a party to any pending legal proceedings which involve
      a claim of infringement, unauthorized use, or violation of any
      intellectual property right by any Person against the Company or
      challenging the ownership, use, validity or enforceability of, any
      material Intellectual Property, used in their respective business,
      owned by or exclusively or non-exclusively licensed to the Company,
      including but not limited to Intellectual Property as set forth in the
      Technology Transfer and Assistance Agreement, and (ii) the Company has not
      received any notice or claim challenging its ownership of any material
      Intellectual Property owned (in whole or in part), nor to the knowledge of
      the Transferor or the Company is there a reasonable basis for any claim
      that the Company does not so own any of such Intellectual
      Property.  All of rights of any of the Company in and to
      material Intellectual Property owned by the Company are valid and
      enforceable. No material Intellectual Property, used in their
      respective business, owned by or licensed to the Company, including but
      not limited to Intellectual Property as set forth in the Technology
      Transfer and Assistance Agreement, is subject to any outstanding
      order, judgment or decree restricting the use or licensing thereof by the
      Company.

                    


            

             

            Section
3.21 Software

             

            Before and
on the Registration Date, the Company (i) takes all appropriate
actions to protect the confidentiality, integrity and security of their
software, including but not limited to the Software as set forth in the
Technology Transfer and Assistance Agreement, databases, systems, networks, and
Internet sites, all users thereof, and all information (including transactions)
stored or contained therein or transmitted thereby from any unauthorized use,
access, interruption or modification, including by (x) using reliable measures
to ensure the security and integrity of transactions executed through its
software, (y) using reliable methods (including passwords) to ensure the correct
identity of its users and customers and (z) using all reasonable mechanisms to
ensure the enforceability of any transactions executed through its site, all of
the foregoing in the context of a commercially reasonable company doing business
in the PRC.

             

             Section 3.22 Employee and Labor Matters.

             

             

            Execution copy August 6, 2007

            
              
                
                

              

              
                16

                
                  

                

              

              
                
                

              

            

             

             On the Signing Date and
the Registration Date,

             

            
              	(a)   
       	The
      Company has not violated any Applicable Laws relating to labor or labor
      practices.  The Company has at all times complied in every
      material aspect with any Applicable Laws relating to social security
      (including, without limitation, pension insurance, unemployment insurance,
      medical insurance, workers’ compensation insurance, and birth insurance)
      and housing welfare, including obtaining social security registration
      certificates, timely payment of employer contributions and timely
      withholding and payment, on behalf of employees, of employee
      contributions.
	 	 
	(b)   
       	Schedule
      3.22(a) contains a true, complete and accurate list of all employees
      of the Company, indicating their respective employee number, name,
      positions, current salaries as of the Signing Date.
	 	 
	(c)   
       	Except
      for the benefits (“Benefit Plan”) provided in the employee handbook of the
      Company, there is no other benefit plans established in the
    Company.
	 	 
	
                      (d)  
        

                    	
                      With
      respect to any Benefit Plan and any other employment matter: (i) No
      actions, suits, claims or any disputes between the Company, on one hand,
      and any of their employees, on the other hand, are pending or, to the
      knowledge of any of the Transferor or the Company, threatened; (ii) no
      facts or circumstances exist that could give rise to any such actions,
      suits or claims; and (iii) no administrative investigation, audit or other
      administrative proceeding by Governmental Entities are pending, threatened
      or in progress.

                    


            

            
              	 	 
	
                      (e)  
        

                    	
                      The
      execution of the Transaction Documents and the consummation of the
      transactions contemplated thereby shall not result in the material
      increase, acceleration or provision of any payments, benefits or other
      rights, including, but not limited to, any severance pay or payment
      contingent upon a change in control or ownership of the Company to any
      current or former employee or contractor of the
Company.

                    
	 	 


            

            
              	
                      (f)     

                    	
                       Since
      the establishment of the Company, no death or serious bodily injury of any
      person has occurred as a direct result of such person’s employment or
      other relationship with the Company or as a result of any negligent action
      or omission of the Company, its management, its directors or its
      shareholder.  No current or former employee of the Company
      suffered or is suffering from any occupational disease to the knowledge of
      the Company and the Transferor.

                    


            

             

            Section
3.23 Prohibited
Payments.  On
the Signing Date and the Registration Date, neither the Transferor
(with respect to the Company) nor the Company, nor any officer, director,
employee or agent of any of them (or any person acting on behalf of any of the
foregoing) have made or agreed to made, for the Company’s interests: (i) bribes,
rebate, kick backs or any other unlawful payment (in cash, property or
otherwise) to any customer, supplier, Governmental Entity (including any
governmental employee or official) or any other Person who is or may be in a
position to help or hinder any of them 

             

             

            Execution
copy August 6, 2007

            
              
                
                

              

              
                17

                
                  

                

              

              
                
                

              

            

             

            in the
conduct of business; or (ii) any receipts or disbursements in violation
of  any  anti-bribery law in any jurisdiction where the
Company has business dealings.

             

            Section
3.24 Environmental, health and Safety
Matters.

             

            On the
Signing Date and the Registration Date,

             

            
              	
                        (a)    

                    	
                      the
      Company is in compliance with all applicable Environmental Laws and has
      not violated in any material respect any such laws, and possesses and
      complies in all material respects with all Environmental Permits required
      under such laws and has not violated in any material respect any such
      permits; to the knowledge of the Transferor and the Company, there are no
      circumstances, conditions or events that could reasonably be expected to
      prevent any of the Company from (or materially increase the burden on the
      Company) complying with applicable Environmental Laws or obtaining,
      renewing, or complying with all Environmental Permits required under such
      laws;

                    


            

             

            
              	
                        (b)    

                    	
                      (A)
      the Company has not received any Environmental Claim that has not been
      fully and finally resolved; and (B) to the knowledge of the Transferor and
      the  Company, there is not any threatened Environmental Claim, or any
      circumstances, conditions or events that could reasonably be expected to
      result in an Environmental Claim, against the
  Company;

                    


            

             

            
              	
                        (c)    

                    	
                      the
      Company has not entered into any agreement or other arrangement with any
      Governmental Entity under any Environmental Law, and the Company is not
      subject to any outstanding judgment, ruling, order or similar requirement
      relating to compliance with any Environmental Law or to Hazardous
      Substances;

                    


            

             

            
              	
                        (d)    

                    	
                      there
      are and have been no Hazardous Substances, or other conditions, at any
      property currently or formerly owned, leased, operated, or otherwise used
      (including any location used for the storage, disposal, recycling or other
      handling of any Hazardous Substances) by the Company that could reasonably
      be expected to give rise to any material liability of any of the
      Company under any Environmental Law or result in material costs to the
      Company arising out of any Environmental Law;
  and

                    


            

             

            
              	
                        (e)    

                    	
                      (A)
      the Company has not assumed or retained, by agreement, operation of law,
      or otherwise, any obligation under any Environmental Law or concerning any
      Hazardous Substance, that could reasonably be expected to be material to
      the Company; and (B) each of the foregoing representations and warranties
      also applies to any Person for which the Company has assumed or retained
      responsibility, whether by contract, operation of law, or
      otherwise.

                    


            

             

            
              	
                        (f)    

                    	
                      The Company
      has been at all times in compliance with all Applicable Laws
      relating to the protection of health and safety in connection with the
      ownership, lease, operation and condition of its business and
      Properties.  No person has


                    


            

             

             

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            directly suffered impaired health as the result of the negligent
acts or omissions of the Company.

             

            Section
3.25 Taxes.   On
the Signing Date and the Registration Date,

             

            
              	
                        (a)   

                    	
                      The
      Company has (i) timely filed or will timely file (taking into account all
      applicable extensions of time for filing) all Tax Returns required to be
      filed by or with respect to the Company prior to the Registration Date,
      and all such Tax Returns are true, correct and complete in all material
      respects and (ii) paid all Taxes due and payable with respect to any
      taxable period or portion thereof ending on or before the Registration
      Date.

                    


            

             

            
              	
                        (b)   

                    	
                      There
      is no Tax deficiency asserted against the Company, and there is no unpaid
      assessment, proposal for additional Taxes, deficiency or delinquency in
      the payment of any Taxes of the Company.  No audit or
      investigation of any Tax Return is currently underway or pending, or to
      the knowledge of any of the Transferor or the Company, threatened, with
      respect to the Company.

                    


            

             

            
              	
                        (c)   

                    	
                      No
      Encumbrances for Taxes exist with respect to any of the assets or
      properties of the Company.

                    


            

             

            
              	
                        (d)   

                    	
                      The
      Company has withheld or collected and timely paid over to the appropriate
      Governmental Entities (or are properly holding for such payment) all Taxes
      required by Applicable Law to be withheld or
  collected.

                    


            

             

            
              	
                        (e)   

                    	
                      The
      Company has no liability for the Taxes of another Person (other than the
      Company) as a transferee or successor, by contract or
      otherwise.

                    


            

             

            
              	
                        (f)   

                    	
                      The
      Company has, in accordance with Applicable Laws, duly registered with the
      relevant Governmental Entities, has obtained and maintained the validity
      of all national and local tax registration certificates and has complied
      with all requirements imposed by such Governmental
      Entities.   The Company has made and kept up-to-date full
      and accurate records, invoices and documents (i) appropriate or required
      for the purposes of payment of any Taxes or (ii) as otherwise required by
      any Government Entities.

                    
	 	 
	
                       (g)   

                    	
                      The Company is not
      subject to taxation in any jurisdiction other than the PRC, and nor
      claim has been made in any jurisdiction other than the PRC with respect to
      the foregoing.

                    


            

             

             

            Section
3.26  Insurance.  On
the Signing Date and the Registration Date, the Company is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged.  All policies of insurance insuring the Company or its
businesses, assets, employees, officers and directors are in full force and
effect. The Company is in compliance with the terms of such policies and
instruments in all material respects. There are no claims by the Company under
any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause.  The
Company has not been refused any insurance coverage sought or applied for, and
the Transferor has 

             

             

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            no reason
to believe that the Company will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business.

             

            Section
3.27 Litigation. On the
Signing Date and the Registration Date, (i) the Company is not engaged
in, or a party to, or, to the knowledge of the Transferor or the Company,
threatened with, any legal action, dispute, claim, suit, investigation or other
proceeding by or before any Governmental Entity or arbitration, and (ii) there
are no outstanding orders, rulings, judgments, settlements, stipulations or
similar agreements by, with or subject to any Governmental Entity (other than
through general application) binding upon any of the Company or their respective
assets, properties or rights, and for both (i) and (ii), which is likely to have
a Material Adverse Effect.

             

            Section
3.28 Sufficiency.  To
the best knowledge of the Transferor or the Company, the Company’s assets as of
the Registration Date include all the assets of the Company used in and
necessary or advisable for the conduct of their respective business in the same
manner and to the same extent as heretofore conducted by the
Company.

             

            Section
3.29 Disclosure.  The
Transferor and the Company have made their reasonable efforts to provide the
Transferee with the necessary information that the Transferee has requested in
connection with the transactions contemplated by the Transaction Documents and
all information that a reasonable investor would likely deem important in
determining whether to consummate such transactions. No information or materials
provided by the Transferor or the Company to the Transferee in connection with
its due diligence investigation of the Company or the negotiation and execution
of the Transaction Documents knowingly contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statement therein, in light of the
circumstances in which they are made, not misleading. 

             

            


             

            ARTICLE
IV

             

            REPRESENTATIONS
AND WARRANTIES OF THE TRANSFEREE

             

            The
Transferee hereby represents and warrants to the Transferor and the Company as
follows:

             

            Section
4.1 Organization
and Standing. On the
Signing Date and the Registration Date, the Transferee has been
duly organized and is validly existing and in good standing under the laws
of Islands of Bermuda with power and authority (corporate and other) to
execute, deliver and perform the Transaction Documents to which it is a party
and consummate the transactions contemplated thereby.

             

            Section
4.2 Authorization.
On the
Signing Date and the Registration Date, the execution, delivery
and performance by the Transferee of the Transaction Documents to which it is a
party and the consummation by the Transferee of the transactions contemplated by
the Transaction Documents are within its power and authority (corporate or
other) and have been duly authorized by all necessary action (corporate or
other) on the part of the Transferee.  Each of the Transaction
Documents to which the Transferee is a party has been duly authorized, executed
and delivered by the Transferee, and constitutes a valid and legally binding
obligation of the Transferee, enforceable against the Transferee in accordance
with its terms, subject as to enforceability, to bankruptcy, insolvency,


             

             

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            reorganization
and similar laws of general applicability relating to or affecting creditors’
rights and to general equity principles.

             

            Section
4.3 No
Conflicts. On the
Signing Date and the Registration Date, the execution, delivery and
performance by the Transferee with all of the provisions of the Transaction
Documents to which it is a party and the consummation of the transactions
contemplated by the Transaction Documents will not (a) result in a violation of
the provisions of its Organizational Documents, (b) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute (with or
without the giving of notice, the lapse of time or both) a default under, any
agreement or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject, or (c) result in a violation
of any Applicable Law, except in the case of sub-clauses (b) or (c), to the
extent that any such events could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of the
Transferee to perform its obligations under the Transaction Documents or
consummate the transactions contemplated thereby.

             

            Section
4.4 Absence
of Further Requirements. On the
Signing Date and the Registration Date, the Transferee has obtained all the
approvals for the transactions contemplated in the Transaction Documents from
any Person or Governmental Entity required by Applicable Law. No further
consent, approval, authorization, order, registration, filing or qualification
of or with any third party or Governmental Entity having jurisdiction over the
Transferee or any of its properties or assets is required for the consummation
by the Transferee of the transactions contemplated by the Transaction Documents,
except such consents, approvals, authorizations, orders, registrations, filings
or qualifications identified in Section 6.1.(d) as have been duly obtained or
made by the Transferee on or before the Registration Date and are in full force
and effect.

             

            Section
4.5 No
Legal Proceedings.  On
the Signing Date and the Registration Date, there is no legal action,
dispute, claim, suit, investigation or other proceeding by or before any
Governmental Entity or arbitration pending, or to the knowledge of the
Transferee, threatened against the Transferee (a) seeking to restrain or
prohibit the execution, delivery and performance of the Transaction Documents or
the consummation of the transactions contemplated thereby by the Transferee or
(b) that could reasonably be expected to have a material adverse effect on the
ability of the Transferee to perform its obligations under or consummate the
transactions contemplated by the Transaction Documents.

             

            


             

            ARTICLE
V

             

            COVENANTS
AND AGREEMENTS

             

            Section
5.1  Conduct
of Business.

             

            (a) The
Company and the Transferor covenant and agree that, during the period
commencing on the Signing Date and ending at the Registration Date, except
with the prior written consent of the Transferee , or as explicitly
contemplated by the Transaction Documents or required by Applicable Law, the
Company shall not, and the Transferor shall not permit the Company to take any
of the following actions:

             

             

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                      (i)  

                    	
                      Substantially
      amend its Organizational Documents;

                    


            

            
              	 	 
	
                      (ii)  

                    	
                      commence
      a voluntary case or proceeding under any applicable bankruptcy law or
      consent to the entry of judgment, ruling or decision against it in an
      involuntary case or proceeding under any bankruptcy law, or take any
      action to dissolve or liquidate;

                    
	 	 


            

            
              	
                      (iii)  

                    	
                      make
      any material change in any of its
business;

                    


            

            
              	 	 
	
                      (iv)  

                    	
                      sell,
      transfer, lease, license or otherwise dispose of or encumber, purchase or
      acquire any material, assets, property, business or assets, tangible or
      intangible, other than in the ordinary course of business consistent with
      past practice, or cancel or compromise any debt, claim, commitment,
      obligation or liability or waive or release any right of substantial
      value, other than in the ordinary course of business consistent (in amount
      and kind) with past practice;

                    
	 	 


            

            
              	
                      (v)  

                    	
                      enter
      into, amend or modify in any material respect or terminate any Material
      Contract or waive or assign any material right thereunder, in each case,
      other than in the ordinary course of
business;

                    


            

            
              	 	 
	
                      (vi)  

                    	
                      create
      any Subsidiary or enter into any joint venture or partnership with any
      other Person;

                    
	 	 


            

            
              	
                      (vii)  

                    	
                      merge
      with or into, or consolidate with or convert into, another
      Person;

                    


            

            
              	 	 
	
                      (viii)  

                    	
                      terminate,
      amend or modify in any material respect, any material Permit, other than
      (x) as required by any applicable Governmental Entity, (y) in connection
      with the transactions contemplated by the Transaction Documents or (z) in
      the ordinary course of business;

                    
	 	 


            

            
              	
                      (ix)  

                    	
                      make
      any capital expenditures or commitments that will create or result in
      commitments on the Company to make
      capital expenditures other than capital expenditures made in the ordinary
      course of business consistent with past practice and otherwise
      agreed by Transferee in writing;

                    


            

            
              	 	 
	
                      (x)  

                    	
                      commence
      or settle any litigation, arbitration;

                    
	 	 


            

            
              	
                      (xi)  

                    	
                      enter
      into any transaction or series of transactions, including any loan,
      advance or capital contribution to or investments in, with the
      Transferor or any of its Subsidiaries or Affiliates (other than the
      Company), other than in the ordinary course of business or other as
      disclosed herein;

                    


            

            
              	 	 
	
                      (xii)  

                    	
                      make
      any declaration of, or set aside or pay any dividend or other
      distribution
      in any manner with respect to the registered
      capital of the Company, or make
      any  change whatsoever in such registered capital;

                    
	 	 


            

            
              	
                      (xiii)  

                    	
                      unless
      in the ordinary course of business in accordance with its existing
      policies or
      Benefit Plan or as may be required by Applicable Law, (x) grant any
      increases in wages, salaries, benefits
      or
      compensation of any of the employees,


                    


            

             

             

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            consultants, independent contractors or
directors of the Company, (y) establish, amend or terminate any Benefit Plan or
collective bargaining
agreement, and
(z)
unilaterally make any termination of employment of any of the key employees of
the Company;

            
              	 	 
	
                      (xiv)  

                    	
                      materially
      change its policies, procedures, principles or methods of Tax or financial
      accounting, other than as required by a change in PRC GAAP or other
      Applicable Laws;

                    
	 	 


            

            
              	
                      (xv)  

                    	
                      make
      any change in arrangements on bank accounts or any grant of any powers of
      attorney thereof;

                    


            

            
              	 	 
	
                      (xvi)  

                    	
                      fail to pay timely
      and accurately any Taxes due and payable, or fail to file any
      material Tax Return when due or fail to cause such Tax Returns when filed
      to be complete and accurate in all material respects, in all the foregoing
      cases resulting in a Material Adverse Effect;

                    
	 	 


            

            
              	
                      (xvii)  

                    	
                      incur,
      assume or guarantee any material indebtedness other than in the ordinary
      course of business;

                    


            

            
              	 	 
	
                      (xviii)  

                    	
                      transfer
      to any Person ownership of or otherwise grant any Person any exclusive or
      material license to any Intellectual Property which is necessary for the
      conduct of the Company’s business or permit any material Intellectual
      Property to lapse, expire or become abandoned, in each case other than in
      the ordinary course in a manner consistent with past practice, or settle
      or agree any legal action, dispute, claim, suit, investigation or other
      proceeding relating to Intellectual Property;
or

                    


            

            
              	 	 


            

            
              	
                      (xix)  

                    	
                      agree,
      whether in writing or otherwise, to do any of the
    foregoing.

                    


            

             

            (b)  The
Company and the Transferor covenant and agree that, during the period commencing
on the Signing Date and ending at the Registration Date,
except with the prior written consent of the Transferee which shall not be
unreasonably withheld or delayed, or as explicitly contemplated by the
Transaction Documents or required by Applicable Law, the Company shall, and the
Transferor shall cause the Company to, do the following:

             

            
              	
                      (i)  

                    	
                      conduct
      its operations in the ordinary course of business consistent with past
      practice;

                    


            

            
              	 	 
	
                      (ii)  

                    	
                      use
      its best efforts to keep available the services of its present employees,
      contract service providers and other suppliers, customers and others
      having business relationships with it;

                    
	 	 


            

            
              	
                      (iii)  

                    	
                      preserve
      substantially intact the present business organization of the
      Company;
      and

                    


            

            
              	 	 
	
                      (iv)  

                    	
                      maintain
      the operating assets and equipment of the Company, including Intellectual
      Property owned or held under license by the Company, in normal operating
      condition and repair.

                    


            

             

             

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            (c)  The
Company and the Transferor covenant and agree that, during the period commencing
on the Signing Date and ending at the Registration Date,
the Transferee shall have the right to have an observer present at any meeting
of the Company’s board of directors and the Company shall give
seven (7) days
prior written notice of any such meeting to the Transferee.

             

            Section
5.2 
Access
to Information.

             

            
              
                	
                      	
                        (a) 

                      	
                         From
      the Signing Date until the Registration Date, the Company and the
      Transferor shall afford to the Transferee reasonable access at all
      reasonable times to any senior management personnel and any other
      Company-designated employees and advisors of the Company, and to the books
      and records, agreements, assets and properties of the Company, and shall
      furnish the Transferee such financial, operating and other data and
      information as the Transferee may reasonably request. No such review,
      examination or investigation by the Transferee shall affect or in any way
      diminish the representations, warranties or covenants of the Company and
      the Transferor hereunder.

                      


              

               

            

            
              
                	
                      	
                        (b) 

                      	
                         At
      the reasonable request of the Transferee, the Company and the Transferor
      shall furnish, or cause to be furnished, to the Transferee any relevant
      information or copies of any document in their possession or
      control.

                      


              

            

             

            Section
5.3 
Financial
Statements.
The
Transferor and the Company shall have delivered to the Transferee, prior to
Registration Date, the un-audited report, including but not limited to
un-audited balance
sheet of the Company and the related statements of income, cash flows and
changes in shareholders equity for the period commencing from January 1, 2007 to the date
prior to thirty (30) days of Registration Date. The Transferee may conduct the
financial audit on Company after the Signing Date at the Transferee’s own
cost

             

            Section
5.4 
Further
Actions.
Each of
the Parties hereto agrees to cooperate with each other Party and use their best
efforts to facilitate the consummation of the transactions contemplated under
the Transaction Documents as promptly as practicable.  Without
limiting the foregoing, the Parties shall:

             

            
              
                	
                      	
                        (a) 

                      	
                        execute
      or cause to be executed such further documents and take or cause to be
      taken such further actions as may be reasonably necessary or proper to
      carry out effectively the provisions of the Transaction Documents and the
      transactions contemplated thereby;

                      


              

               

            

            
              
                	
                      	
                        (b) 

                      	
                        use
      their best efforts to cause all conditions specified in Article VI to be
      satisfied on or prior to the Registration
      Date;  

                      


              

               

            

            
              
                	
                      	
                        (c) 

                      	
                        obtain
      and cooperate with each other party in good faith in obtaining any
      consent, approval, authorization or order of, or making any registration,
      filing or qualification with, any third party or Governmental Entity, all
      as may be required in connection with the execution, delivery or
      performance of the Transaction Documents and the consummation of the
      transactions contemplated
thereby.

                      


              

            

             

             

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            Section
5.5 PRC
Government Approvals.

             

            
              
                	
                      	
                        (a) 

                      	
                         As
      soon as practicable after the execution of this Agreement, the Company
      shall, and the Transferor shall cause the Company to, submit to the
      Approval Authority the Transaction Documents and any other documents
      necessary to obtain the New Approval
      Certificates issued by such Approval Authority approving the Transaction
      Documents and provide to the Transferee copies of all documents submitted
      to the Approval Authority; provided that all documents submitted to the
      Approval Authority shall first be reviewed by and agreed to in writing
      and/or signed by the Transferee without undue delay, as the case may
      be.  Upon receipt of such New Approval
      Certificates, the Company shall, and the Transferor shall cause the
      Company to, deliver a copy of each such New Approval
      Certificate to the Transferee.

                      


              

               

            

            
              
                	
                      	
                        (b) 

                      	
                        Following receipt of
      the New Approval
      Certificates specified in the above clause (a), the
      Company shall, and the Transferor shall cause the Company to, submit all
      required documents to the Registration Authority for all the
      necessary amendment registration in connection with the transactions
      contemplated by the Transaction Documents and
      the issuance
      of the New Business License to
      the Company, which shall include the proper registration of the
      Transferee as the new shareholder of the Company and its specific equity
      ownership percentage in the Company as prescribed in the Transaction
      Documents.  Upon
      receipt of the New Business License by
      the Company and any other documents issued by the Registration
      authority evidencing the completion of such amendment registration (“Registration
      Documents”), the Company shall,
      and the Transferor shall cause the Company to, deliver a copy of the
      New Business License to
      the Transferee. The New Business License shall indicate the New
      Company Name.

                      


              

            

             

            Section
5.6 No
Encumbrances. The
Transferor shall not create, incur or assume any Encumbrance on the Transferor’s
equity interests in the Company or enter into discussions or negotiations with
any Person in respect of the foregoing without the prior written consent of the
Transferee.

             

            Section
5.7    Non-Solicitation. Both Parties agree that
until the date that is two (2) years after the Registration Date, they will not,
directly or indirectly, (i) employ or attempt to employ or solicit for
employment any existing member of the management of the Company within twelve
(12)  months after the termination of such member’s employment with
the Company or the other party or (ii) entice, induce or attempt to influence
any member of the management of the Company to terminate his or her employment
with the Company or the other party;

             

            Section
5.8  Retention
of Books and Records.

             

            The
Company shall, and the Transferor shall cause the Company to, retain, in accordance with
Applicable Law and existing Company’s policies, all
books, records and other documents pertaining to the Company that relate to the
period prior to the Registration Date
that are required to be retained under retention policies in effect as of or
after the Signing Date and to make the same available for inspection (at the
office of the Company) and copying by the Transferee or its agents at the


             

             

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            Transferee’s
expense upon
reasonable request.  This Section 5.8 shall not limit
the obligation of the Company to, and the Transferor to, cause the Company to
include in its assets at the Registration Date
all books, records and confidential and proprietary information, relating
primarily to the business operations of the Company that are in the
possession of the Company. After the expiration of such period, no such books
and records shall be destroyed by the Company without first advising the
Transferee and Transferor in writing detailing the contents thereof and
providing the Transferee and Transferor with at least thirty (30) days of
reasonable opportunity to obtain possession thereof.  The Transferee
and Transferor agree that such records will be kept strictly confidential. 

             

            Section
5.9 No
Other Transaction.

             

            Prior to
the Registration
Date, either the Company
or the
Transferor shall not, and shall not permit any of its Affiliates, shareholder,
directors, officers, employees, representatives or agents to, and the Transferor
shall cause the Company not to, without the prior written consent of the
Transferee, (i) solicit, initiate, facilitate or encourage any inquiry, proposal
or offer with respect to the purchase or sale of, tender offer for or other
disposal of or investment in any of the registered capital of the Company or any
merger, consolidation or other business consolidation involving the Company
other than the transactions contemplated by the Transaction Documents (an “Alternative Transaction”),
(ii) enter into or participate or engage in any discussions or negotiations
concerning, or furnish or disclose any information with respect to the Company
in connection with, any Alternative Transaction or (iii) enter into any
agreement, arrangement or understanding, whether binding or non-binding, oral or
written, with respect to an Alternative Transaction.

             

            Section
5.10 Notice
of Certain Events.

             

            Each of
the Parties hereto shall promptly notify the other Parties hereto of (a) any
notice or other communication from any Person alleging that the consent,
approval, authorization, order, registration, filing or qualification of or with
such Person is or may be required in connection with the transactions
contemplated by this Agreement, (b) any notice or communication from any
Governmental Entity relating to or in connection with the transactions
contemplated by the Transaction Documents, (c) any legal action, dispute, claim,
suit, investigation or other proceeding by or before any Governmental Entity or
arbitration commenced or, to such Party’s knowledge, threatened relating to or
otherwise affecting the ability of the Transferee, the Company or the Transferor
to perform their respective obligations under the Transaction Documents or the
consummation of the transactions contemplated thereby and (d) any other events
that could reasonably be expected to have a material effect on the transactions
contemplated by the Transaction Documents.

             

            Section
5.11 Sufficiency.

             

            The
Company and the Transferor shall cause the Company’s assets as of the
Registration Date to include all the assets of the Company used in and
necessary or advisable for the conduct of its business in the same manner and to
the same extent as heretofore conducted by the Company, including all books,
records and confidential and proprietary information, relating primarily to the
business operations of the Company that are in the possession of the
Company.

             

            
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            ARTICLE
VI

             

            CONDITIONS
TO CLOSING

             

            Section
6.1 Conditions
to Obligation of the Transferee. The
obligation of the Transferee to pay the Purchase
Price on the Payment Date is subject to the satisfaction or waiver by the
Transferee on and as of the Registration Date of each of the following
conditions:

             

            
              	
                      (a)         
       

                    	
                      Each
      of the representations and warranties made by the Transferor and the
      Company in the Transaction Documents to which it is a party (i) to the
      extent qualified by materiality, shall be true and correct and (ii) to the
      extent not so qualified, shall be true and correct in all material
      respects, in each case on the Signing Date and/or the Registration
      Date as such representations and warranties were made according to relevant clauses
      in this Agreement.

                    


            

            
              	 	 
	
                      (b)        
        

                    	
                      The
      Transferor and the Company shall have performed and complied in all
      material respects with each of the agreements, covenants, conditions and
      obligations required by the Transaction Documents to which it is a party
      to be performed or complied with by it on or prior to the Registration
      Date.

                    
	 	 


            

            
              	
                      (c)         
       

                    	
                      There
      shall be no legal action, dispute, claim, suit, investigation or other
      proceeding by or before any Governmental Entity or arbitration pending, no
      restraining order, injunction, cease and desist order or other legal
      restraint or prohibition (whether temporary, preliminary or permanent) of
      any Governmental Entity in effect, and no statute, rule, regulation or
      order promulgated or enacted by any Governmental Entity, that would
      restrain, prohibit, materially modify or invalidate the transactions
      contemplated by the Transaction
Documents.

                    


            

            
              	 	 
	
                      (d)        
        

                    	
                      Each
      consent, approval, authorization, order, registration, filing or
      qualification of or with any third party or Governmental Entity required
      in connection with the consummation of the transactions contemplated by
      the Transaction Documents shall have been duly obtained or made, as
      applicable, and shall be in full force and effect, including the following
      (copies of which shall have been received by the
    Transferee):

                    
	 	 


            

            
              	
                      (i)          

                    	
                      Each
      of the Transaction Documents shall have been approved by the relevant
      Approval Authority in its entirety without materially varying the terms
      and conditions thereof or imposing any material additional or different
      obligations on the Company or any Party thereto unacceptable to such
      Party, which approval shall be evidenced by the issuance of the approval
      reply and the New Approval Certificates issued by the Approval
      Authority;

                    


            

            
              	 	 
	
                      (ii)         

                    	
                      The
      Transferee shall have been registered as a shareholder of the Company
      owning the equity interests representing 60 % of the ownership interest in
      the Company;

                    


            

             

             

            Execution copy August 6, 2007

            
              
                
                

              

              
                27

                
                  

                

              

              
                
                

              

            

             

            
            

            
              	
                      (iii)        

                    	
                      All
      the necessary amendment registration in connection with the transactions
      contemplated by the Transaction Documents shall
      have been duly conducted with the Registration
  Authority;

                    
	 	 


            

            
              	
                      (iv)        

                    	
                      The
      Company shall have obtained the New Business License
      without  materially varying
      the terms and conditions of the New Articles of Association and stating on
      the face of the New Business License with the New Company
      Name.

                    


            

            
              	 	 
	
                      (e)         
       

                    	
                      The Company
      shall have conducted its business in the ordinary course from the Signing
      Date up to the Registration Date.

                    


            

             

            ARTICLE
VII

             

            TERMINATION

             

            Section
7.1 Termination.  This Agreement
may be terminated at any time prior to the Registration Date:

             

            
              	(a)         	
                      by
      the mutual written consent of the Transferor and the
      Transferee;

                    
	 	 
	
                      (b)         

                    	
                      by
      either the Transferor or the
      Transferee if the conditions set forth in Section 6.1(d) have
      not been satisfied on or before the date that is six (6) months
      after the submission of the Transaction Documents to the Approval
      Authority; provided, however, that
      no Party may request termination pursuant to this Section 7.1(b) if
      such conditions have not been satisfied due to a breach of this Agreement
      by such Party;

                    


            

            
              	 	 
	
                      (c)         

                    	
                      by
      the Transferee if there has been a material misrepresentation or material
      breach on the part of the Transferor or the Company in the
      representations, warranties, covenants or agreements set forth in this
      Agreement that would result in a failure to satisfy the closing conditions
      set forth in Sections 6.1, which is
      not cured within thirty (30)
      PRC Business Days after the Transferor has been notified in writing
      by the Transferee of its intent to terminate this Agreement pursuant to
      this Section 7.1(c);
      or

                    
	 	 


            

            
              	
                      (d)         

                    	
                      by
      either the Transferor or the Transferee if any statute, rule,
      regulation,
      decision or order by any Governmental Entity of competent
      jurisdiction restraining, prohibiting or invalidating the consummation of
      the transactions contemplated by the Transaction Documents has been promulgated
      and become effective,
      final and non-appealable.

                    


            

             

            Section
7.2 Liabilities
in the Event of Termination.  In the event of
any termination of this Agreement in accordance with Section 7.1, this Agreement
(except for the provisions of this Section 

             

             

            Execution
copy August 6, 2007

            
              
                
                

              

              
                28

                
                  

                

              

              
                
                

              

            

             

            7.2 and
Sections 8.1, 9.1, 9.2, 9.6, 9.9, 9.10, 9.11 and 9.12) shall become null and
void and of no further force and effect and there shall be no liability or
obligation hereunder on the part of any Party as a result of such termination;
provided, however, that
notwithstanding any such termination, each Party shall be liable to the other
Parties for any Losses arising from any breach of this Agreement by such Party
prior to such termination.

             

            ARTICLE
VIII

             

            INDEMNIFICATION

             

            Section
8.1 
Survival   The
covenants and agreements set forth in this Agreement that are stated to be
performed or to be complied with on or prior to the Registration Date shall not
survive the Registration Date.  All other covenants and agreements set
forth herein shall survive the Registration Date until fully discharged in
accordance with their terms. The Sections 8.1, 8.2, 8.3, and 8.4 shall survive
the Registration Date and remain in full force and effect.

             

            Section
8.2 
Indemnification
by the Transferor
and the Company.

             

            
              	
                      (a)         

                    	
                      All
      representations, warranties, agreements, covenants and obligations made or
      undertaken by the Company and the Transferor in this Agreement or in any
      document delivered by or on behalf of
      the
      Transferor and the Company in connection with
      the consummation of the transactions contemplated by this Agreement
      are material, have been relied upon by the Transferee, and shall not be
      affected by any performance, event or matter whatsoever (including,
      without limitation, any satisfaction and/or waiver of any condition set
      out in Article VI), unless by a specific and duly authorized written
      release by the Transferee on
indemnification.

                    


            

            
              	 	 
	
                      (b)         

                    	
                      The
      Transferor and the Company shall, jointly and severally, indemnify and
      hold harmless the Transferee, and its successors and permitted assigns
      from, against and in respect of all direct losses, liabilities, taxes,
      damages, judgments, settlements and expenses, including reasonable fees
      and expenses of counsel (collectively, “Losses”), incurred or paid by the
      Transferee in connection with and directly resulting from (a) the breach
      of any representation or warranty of the Transferor or the Company set
      forth in this Agreement, and (b) the breach of any covenant or agreement
      on the part of the Transferor or the Company to be performed set forth in
      this Agreement.

                    
	 	 


            

            
              	
                      (c)         

                    	
                      Because
      after the Registration Date, the Company shall be jointly owned by the
      Transferee and the Transferor, the Parties agree that (i) any claim by the
      Transferee under this Section 8.2 after the Registration Date will be
      solely against the Transferor, who will have no right of reimbursement or
      contribution against the Company, and (ii) any Losses suffered or incurred
      by the Company against which the Transferee is indemnified as provided in
      Section 8.2 (b) above shall be deemed suffered by the Transferee, which
      shall, either independently or jointly with the Company, be entitled to
      enforce such indemnity against the Transferor. 

                    
	 	 


            

             

             
Execution copy August 6, 2007

            
              
                
                

              

              
                29

                
                  

                

              

              
                
                

              

            

             

            
              	
                        (d)        

                    	
                      Any
      examination, inspection, review, or audit by the Transferee or its
      appointed Big Four external auditors of the properties, financial
      condition or other matters of the Company shall in no way limit, affect or
      impair the ability of the Transferee to rely upon the representations,
      warranties, agreements, covenants and obligations of the Company and the
      Transferor made or undertaken in this Agreement or in any document
      executed and delivered pursuant to this
  Agreement.

                    


            

             

            Section
8.3 
Indemnification
by the Transferee.  All representations,
warranties, agreements, covenants and obligations made or undertaken by
Transferee by this Agreement are material, have been relied upon by the Company
and the Transferor, and shall not be affected by any performance, event or matter
whatsoever, unless by a specific and duly authorized written release by the
Transferor and Company upon indemnification.  The
Transferee shall indemnify, defend, protect and hold harmless the Transferor and
the Company and their respective successors and permitted assigns (each a “Transferor Party”) from,
against and in respect of all Losses incurred or paid by any Transferor Party in
connection with, resulting from or arising out of (a) the breach of any
representation or warranty of the Transferee set forth in this Agreement and (b)
the breach of any covenant or agreement on the part of the Transferee to be
performed set forth in this Agreement.

             

            Section
8.4      No Consequential Loss and
Damage.

             

             Notwithstanding any
provisions to the contrary in this Agreement, no Party shall be liable for any
loss of profits, use, savings or business, or for any special, indirect or
consequential losses and damage, whether or not such Party had notice of
the same and regardless how such losses and damage arose, and such Party shall
incur no liabilities other than those specifically agreed herein SAVE AND EXCEPT
THAT such Party’s gross negligence or willful default causing any losses and
damage shall disentitle it to the benefit of this Section 8.4’s limitation of
liability to the extent of such Party’s contribution to the said losses and
damage.

             

            


             

            ARTICLE
IX

             

            MISCELLANEOUS

            Section
9.1 
Expenses,
Fees and Taxes.

             

            
              	
                      (a)        

                    	
                      Whether
      or not the transactions contemplated by this Agreement are consummated,
      all costs and expenses (including fees and expenses of counsel and
      financial advisors, if any) incurred in connection with this Agreement and
      the transactions contemplated hereby shall be paid by the Party incurring
      such costs and expenses.

                    


            

            
              	 	 
	
                      (b)        

                    	
                      Any corporate income
      / withholding tax levied on the gains from the equity transfer, if any,
      shall be borne by Transferor. Each Party shall pay any stamp duty
      required to be paid by such Party with respect to this Agreement. All
      other taxes arising in connection with the transactions contemplated by
      this 

                    
	 	 


            

             

             

            Execution copy August 6, 2007

            
              
                
                

              

              
                30

                
                  

                

              

              
                
                

              

            

             

            Agreement shall be paid by each of the
Transferor and the Transferee in accordance with the
Applicable Law.

             

            
              	
                      (c)     
        

                    	
                      Any
      transfer registration fees with respect to the Equity Interests shall be
      paid by the Company. 

                    


            

            


             

            Section
9.2        Notices.

             

            
              	
                      (a)     
        

                    	
                      All
      notices, demands, requests, consents, waivers and other communications
      required or permitted hereunder shall be in writing (including wire,
      telefax, email or similar writing) and shall be sent, delivered or mailed,
      addressed or telefaxed:

                    


            

             

                                                                 (i)    if to the
Transferee, to:

             

            J&R
Holding Limited.

            Address:
No. 26, Chin 3rd Road,
Nantze Export Processing Zone,

            Kaohsiung,
Taiwan

            Attn:       Mr.
Tien Yue Wu

            Fax:        +
886 7 361 3094

            


            Copy
To:

             

            Address: No.
26, Chin 3rd Road,
Nantze Export Processing Zone,

            Kaohsiung,
Taiwan

            Attn:      
Corporate Legal

            Fax:       
+886 7 361 3094

             

                                                               
(ii)    if to the
Company, to:

             

            NXP
Semiconductors Suzhou Ltd

            Address:
No. 188, Su Hong Xi Road,

             Suzhou
Industry Park, Suzhou, 512021, PRC

            Attn:      General
Manager

            Fax:       +86(0)512
67251895

             

                                                                (iii)  
 if to the
Transferor:

             

            NXP.B.V.

            Address: High Tech
Campus 60, 5656 AG Eindhoven, the  Netherlands

            Attn: Mr Ajit
Manocha

            Fax:  +31(0)
402723621

             

            Copy
To:

             

             

            Execution copy August 6, 2007

            
              
                
                

              

              
                31

                
                  

                

              

              
                
                

              

            

             

            Address: F 30, Tower
1, Kerry Everbright City, No. 218 Tian Mu Xi 

            Road,
Shanghai, 200070, PRC

            Attn: General
Legal Counsel

            Fax: +86 (0)
21 2205 2646

             

            
              	
                      (b)          
       

                    	
                      Each
      such notice, request or other communication shall be given (i) by mail
      (postage prepaid, registered or certified mail, return receipt requested),
      (ii) by hand delivery, (iii) by internationally recognized courier service
      (iv) by telefax, receipt confirmed (with a confirmation copy to be sent by
      first class mail; provided that the failure to send such confirmation copy
      shall not prevent such telefax notice from being effective), or (v) by
      email.

                    


            

            
              	 	 
	
                      (c)            

                    	
                      Each
      such notice, request or communication shall be effective (i) if mailed,
      three days after mailing at the address specified in Section 9.2(a) (or in
      accordance with the latest unrevoked written direction from such party),
      (ii) if delivered by hand or by internationally recognized courier
      service, when delivered at the address specified in Section 9.2(a) (or in
      accordance with the latest unrevoked written direction from such party),
      (iii) if given by telefax, when such telefax is transmitted to the telefax
      number specified in Section 9.2(a) (or in
      accordance with the latest unrevoked written direction from such party),
      and the appropriate confirmation is received, and (iv) if by email, when
      transmitted to the email address specified in Section 9.2(a).

                    


            

             

            Section
9.3 
Amendments
and Waivers This
Agreement may not be amended except by an instrument in writing signed by the
Company, the Transferee and the Transferor.  Any of the Parties hereto
may, by an instrument in writing signed on behalf of such Party, waive
compliance by any other Parties with any term or provision of this Agreement
that such other Parties were or are obligated to comply with or
perform.  No delay or failure on the part of a Party in enforcing any
provision of this Agreement shall be deemed to or shall constitute a waiver of
such provision and no waiver of any of the provisions of this Agreement shall
constitute a waiver of any other provision hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.

             

            Section
9.4  
Successors
and Assigns  None
of the Parties may assign this Agreement or any of its rights or obligations
under this Agreement without the prior written consent of the other
Parties.  Subject to the preceding sentence and save for an assignment
or merger by operation of law or the sale of a Party’s entire business, this
Agreement shall be binding upon and inure to the benefit of the Company, the
Transferor, the Transferee and their respective permitted successors and
assigns.

             

            Section
9.5 
Entire
Agreement This
Agreement and the other Transaction Documents constitute the entire agreement
among the Parties with respect to the subject matter hereof and supersede any
prior agreement or understanding among or between them with respect to such
subject matter.

             

            Section
9.6 
No
Third-Party Beneficiaries Nothing in
this Agreement shall be construed as giving any Person, other than the Parties
hereto, and their successors and permitted assigns, any right, remedy or
claim under or in respect of this Agreement or any provision
hereof.

             

             

            Execution copy August 6, 2007

            
              
                
                

              

              
                32

                
                  

                

              

              
                
                

              

            

             

            Section
9.7 
Currency
All
payments in relation to the Un-paid Registered
Capital to be made hereunder shall be made in U.S. Dollars unless
otherwise required by Applicable Law.

             

            Section
9.8 
Specific
Performance The
Parties agree that irreparable damage would occur in the event that the
provisions of this Agreement were not performed in accordance with their
specific terms.  Accordingly, the Parties agree that each Party shall
be entitled to seek any applicable remedy from any court of competent
jurisdiction to enforce specifically the terms and provisions of this Agreement
in addition to any other remedy to which it is entitled under Applicable
Law.

             

            Section
9.9 
Governing
Law This
Agreement shall be governed by and construed in accordance with the laws of the
Hong Kong Special
Administration Region.

             

            Section
9.10 
Settlement
of Disputes  In
the event that a dispute arises in connection with the interpretation or
implementation of this Agreement, the Parties shall attempt in the first
instance to resolve such dispute through friendly consultations.  If
the dispute is not resolved through consultations within thirty (30) days after
any Party has served a written notice on the other Parties requesting the
commencement of consultations, then any Party may submit the dispute to Hong Kong International
Arbitration Centre (“HKIAC”) for arbitration in accordance with HKIAC rules in
force at the time a particular dispute is submitted for arbitration, which rules
shall be deemed to have been incorporated by reference into this Section
9.10. The English text of this
Agreement shall be referred to in
the arbitration, and all proceedings in any such arbitration shall be conducted
in English. The arbitration award
shall be final, binding and non-appealable on the
Parties. The costs of arbitration
shall be borne by the losing Party or Parties unless otherwise determined by the
arbitration award.  When any dispute occurs and when any
dispute is under arbitration, except for the matters under dispute, the Parties
shall continue to exercise their other respective rights and fulfill their other
respective obligations under this Agreement.

             

            Section
9.11 
Governing
Language This
Agreement shall be executed in English and Chinese, and the both versions shall
have equal validity and legal effect.

             

            Section
9.12 
Confidentiality
Each Party
shall not, and shall cause its Affiliates, shareholders,
directors, officers, employees, representatives and agents not to, directly or
indirectly, disclose any information relating to the existence or subject matter
of the Transaction Documents (including any information obtained by any such
Party in connection with the negotiation and execution of the Transaction
Documents) unless (a) the prior written consent of the disclosing Party is
obtained or (b) such information is required to be disclosed pursuant to
Applicable Law and then only to the extent necessary to comply with such
Applicable Law; provided that the receiving Party shall give prompt written
notice of its need to disclose such that the disclosing party has, if
practicable under the circumstances, a reasonable opportunity to (i) obtain
protection against disclosure and (ii) comment on the language and content of
the disclosure.

             

            Section
9.13 
Severability
Each
provision of this Agreement shall be considered severable and if for any reason
any provision which is not essential to the effectuation of the basic purposes
of this Agreement is determined by a court of competent jurisdiction to be
invalid or unenforceable and contrary to existing or future Applicable Law, such
invalidity shall not impair the operation of or affect those provisions of this
Agreement which 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 

             

             

            Execution
copy August 6, 2007

            
              
                
                

              

              
                33

                
                  

                

              

              
                
                

              

            

             

            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.

             

            Section
9.14 
Headings,
Internal References When a
reference is made in this Agreement to Articles, Sections, Schedules or
Exhibits, such reference shall be to an Article, Section, Schedule or Exhibit to
this Agreement unless otherwise indicated.  The table of contents,
index of defined terms and headings contained in this Agreement are for
convenience and reference purposes only and shall not be deemed to alter or
affect in any way the meaning or interpretation of any provisions of this
Agreement.  The words “hereof”, “herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.

             

            Section
9.15 
Counterparts
This
Agreement may be executed in five (5) originals in both English and Chinese, all
of which shall constitute one and the same instrument, subject always to Section
9.11.  Each Party to the Agreement shall keep one original, the others
shall be submitted to the relevant authorities.

             

             

            
              [signature page
follows]

            

             

             

            Execution copy
August 6, 2007

            
              
                
                

              

              
                34

                
                  

                

              

              
                
                

              

            

            
 

            IN WITNESS
WHEREOF, the Parties hereto have caused this Agreement to be executed as of the
Signing Date.

             

            


             

            
              	
                      NXP
      B.V.

                    	 
	 	 	 
	
                      By:

                    	/s/ Mr. Ajit
      Manocha	 


            

            
              	Name: 	Mr. Ajit
      Manocha
	Title:  	Executive Vice
      President
	Nationality: 	American


            

             

             

             

             

            
              
                	
                        
                          NXP
      Semiconductors Suzhou
      Ltd.

                        

                      	 
	 	 	 
	
                        By:

                      	/s/ Mike
Yeh	 


              

              
                	Name: 	Mike YEH
	Title:  	Chairman of
      Board
	Nationality: 	Taiwan


              

               



            
               

              
                	
                        
                          J
      & R Holding Limited

                        

                      	 
	 	 	 
	
                        By:

                      	/s/ Mr. Tien Yue
      Wu	 


              

              
                
                  	Name: 	Mr.
      Tien Yue Wu
	Title:  	ASE
      Group Chief Operating Officer
	Nationality: 	American


                

                 

              

            

             

             

             

             

            Execution copy
August 6, 2007