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                                                                    Exhibit 2.09


                         Dated the 25th day of June 2003




                                 (Cao Lianchun)
                                  (Cao Longyin)
                                  (Zhou Jiandi)
                                  (Pan Songju)



                                       and



                             HARTCOURT CAPITAL, INC.
 ------------------------------------------------------------------------------
                       AGREEMENT FOR SALE AND PURCHASE OF
                  CERTAIN INTEREST IN THE REGISTRED CAPITAL OF

                                (ZHONGNAN GROUP)
 ------------------------------------------------------------------------------

                                   Solicitors


                           10th Floor, Hutchison House
                                10 Harcourt Road
                               Central, Hong Kong


                    Tel: (852) 2511 5100 Fax: (852) 2511 9515
                          Website: www.prestongates.com

                          Our ref: 47831-00002/KAL/VTSO













                                       1

<PAGE>




THIS  AGREEMENT  is dated  the 25th of June, 2003.

BETWEEN:

(1)      330302670210403
(2)      330321620126691
(3)      330321711010871
(4)      330321720802872,

           (, , ,)are hereinafter  collectively referred to as the "Vendors" and
           each individually referred to as the "Vendor"); and

(5)        HARTCOURT CAPITAL, INC., a company incorporated in the British Virgin
           Islands with its  registered  office  situate at Akara  Bldg.,  24 De
           Castro  Street,  Wickhams Cay 1, Road Town,  Tortola,  British Virgin
           Islands  and its  principal  office  situate  at  Suite  1310,  China
           VentureTech  Plaza,  819  Nan  Jing  Xi  Road,  Shanghai  China  (the
           "Purchaser").


WHEREAS:

  (A)     (Wenzhou  ZhongNan  Technology  Economic  Development  Co.  Ltd.) (the
          "Company") is a domestic joint venture company with limited  liability
          incorporated  in the PRC and has as at the date  hereof  a  registered
          capital of RMB3,000,000. Brief particulars of the Group are set out in
          Schedule 1.
                (Wenzhou  LianQiang  Network  Co.  Ltd.)  (the  "Company")  is a
               domestic   joint   venture   company   with   limited   liability
               incorporated  in  the  PRC  and  has  as at  the  date  hereof  a
               registered  capital of  RMB3,000,000.  Brief  particulars  of the
               Group are set out in Schedule 1.

(B)      As at the date of this  Agreement,  the  Vendors are  respectively  the
         beneficial owners of certain interests in the registered capital of the
         Company as set out in column 2 of Schedule 2.

(C)      As at the date of this  Agreement,  the  Purchaser  is a  wholly  owned
         subsidiary of The Hartcourt  Companies,  Inc. (the "Holding  Company"),
         the  shares  of which  are  currently  listed  on the  Over-the-Counter
         Bulletin Board ("OTCBB") of the United States (OTCBB Symbol: HRCT).

(D)      The  Vendors  have  agreed  to sell and the  Purchaser  has  agreed  to
         purchase certain interests in the registered  capital of the Company as
         set out in column 3 of Schedule 2, the  aggregate  of which  represents
         51% of the registered  capital of the Company (the "Sale Interests") in
         accordance with the terms and conditions of this Agreement.

NOW IT IS HEREBY AGREED AS FOLLOWS:


1.         INTERPRETATION

1.1        In this Agreement (including the Recitals and Schedules),  unless the
           context otherwise requires, the following words and expressions shall
           have the following meanings ascribed to each of them below:

          "Agreement"               this  agreement for the sale and purchase of
                                    the   Sale    Interest,    as   amended   or
                                    supplemented from time to time;

          "Board"                   the board of  directors  of the Company from
                                    time to time;

          "Business Day"            a day  (other  than  Saturdays  and  days on
                                    which a  tropic  cyclone  warning  No.  8 or
                                    above  or  a  rainstorm  warning  signal  is
                                    hoisted  in Hong  Kong at any  time  between
                                    9:00 a.m.  and 5:00 p.m.) on which  banks in
                                    Hong  Kong  are   generally   open  for  the
                                    transaction of normal banking business;

          "Company"                 has the meaning  ascribed thereto in Recital
                                    (A);

          "Companies Ordinance"     the Companies  Ordinance  (Chapter 32 of the
                                    Laws of Hong Kong);

          "Completion Date"         the date  falling  on the 5th  Business  Day
                                    after the  conditions  set out in Clause 3.1
                                    have  been   fulfilled   or  waived  by  the
                                    Purchaser;

          "Completion"              completion  of the sale and  purchase of the
                                    Sale Interests in accordance  with the terms
                                    and conditions of this Agreement;

          "Consideration"           the  consideration  payable by the Purchaser
                                    pursuant to Clause 4.1 hereof;

          "Consideration Shares"    3,747,397  ordinary shares with par value of
                                    US$0.001  each in the capital of the Holding
                                    Company  to be  allotted  and  issued in the
                                    name  of  the  Vendors  or  their   nominees
                                    pursuant to Clause 4.1;

          "Directors"               directors  of the Company  from time to time
                                    and "Director" shall be construed as any one
                                    of them;

          "Encumbrance"             any   mortgage,    charge,    pledge,   lien
                                    (otherwise   than   arising  by  statute  or
                                    operation of law),  equities,  hypothecation
                                    or other  encumbrance,  priority or security
                                    interest,     deferred    purchase,    title
                                    retention,  leasing,  sale-and-repurchase or
                                    sale-and-leaseback   arrangement  whatsoever
                                    over or in any property, assets or rights of
                                    whatsoever nature and includes any agreement
                                    for any of the same;

          "Group"                   the Company and its subsidiaries and "member
                                    of the Group"  shall be construed as any one
                                    of them;

          "Guaranteed Net Profit"   RMB2,300,000;

          "Guaranteed Turnover      RMB200,000,000
          "HK$"                     Hong Kong dollars;

          "Holding Company"         The  Hartcourt  Companies,  Inc.,  a company
                                    incorporated  under the laws of the State of
                                    Utah,  United States and the  registered and
                                    beneficial  owner of the entire issued share
                                    capital of the Purchaser;

          "Hong Kong"               the Hong Kong Special  Administrative Region
                                    of the PRC;

          "Listing Rules"           the   Rules   Governing   the   Listing   of
                                    Securities on the Stock Exchange;

          "Long Stop Date"          30 September 2003;

          "Net Profit"              in  relation  to the year ending on the date
                                    on which the Restricted Trading Period ends,
                                    the  consolidated  profits  (less losses) of
                                    the  Group as shown by the  Special  Audited
                                    Accounts :

                                                   (a)  after    deducting   all
                                                        expenses  of working and
                                                        management    including,
                                                        without      limitation,
                                                        director's  remuneration
                                                        (whether by way of fees,
                                                        salary  or   commission)
                                                        and depreciation;
                                                   (b)  without    taking   into
                                                        account    profits    or
                                                        losses   of  a   capital
                                                        nature     arising    on
                                                        disposal     of    fixed
                                                        assets,     investments,
                                                        plant   or   any   other
                                                        assets of the Group; and
                                                   (c)  after  making such other
                                                        adjustments    as    the
                                                        auditors  of the Company
                                                        consider appropriate;

          "PRC"                     the  People's  Republic of China,  which for
                                    the purpose of this Agreement, excludes Hong
                                    Kong and Macau;

          "Purchaser's Nominees"    persons to be nominated by the  Purchaser to
                                    acquire  the Sale  Interests  in  accordance
                                    with  the  terms  and   conditions  of  this
                                    Agreement;

          "Relevant Proportion"     the  respective  portion  of Sale  Interests
                                    owned by each of the Vendors  expressed as a
                                    percentage  of the  entire  interest  in the
                                    registered capital of the Company as set out
                                    in column 4 of the Schedule 2;

          "RMB"                     Renminbi, the lawfully currency of PRC;

          "Restricted               Trading  Period"  a period  of  twelve  (12)
                                    months   from   the   date  on   which   the
                                    Consideration   Shares  being  allotted  and
                                    issued to the Vendors or their nominees;

          "Sale Interests"          51% of the entire interest in the registered
                                    capital  of the  Company  to be  sold by the
                                    Vendors to the Purchaser's Nominees;

          "Special Audited
           Accounts"                the  audited  consolidated  profit  and loss
                                    accounts  of the Group for the year ended on
                                    the date on  which  the  Restricted  Trading
                                    Period ends;

          "Tax Indemnity"           the deed of indemnity to be given by each of
                                    the Vendors in favour of the  Purchaser  and
                                    the Group in such form and  substance as may
                                    be   satisfactory   and  acceptable  to  the
                                    Purchaser;

          "Taxation"                all forms of  taxation  whenever  created or
                                    imposed and whether in the PRC or  elsewhere
                                    and without  limiting the  generality of the
                                    foregoing,  includes  all  forms of  profits
                                    tax,  interest tax,  salaries tax,  property
                                    tax, estate duty, stamp duty, sales tax, any
                                    provisional tax, customs and import duty and
                                    any amount equal to any  deprivation  of any
                                    relief,  allowance,  set off,  deduction  in
                                    computing  profits or rights to repayment of
                                    taxation  granted  by  or  pursuant  to  any
                                    legislation concerning or otherwise relating
                                    to  taxation  and also  includes in addition
                                    and without prejudice to the foregoing,  all
                                    fines, penalties,  costs, charges,  expenses
                                    and interests relating thereto;

          "US"                      the United States of America;

          "US$"                     United  States  Dollars,  being  the  lawful
                                    currency of the United States of America;

          "Vendors' Solicitors"     Mr. Jiang Zhoujian
                                    JiaRuiCheng Law Firm
                                    No.10 College Middle Road Wenzhou
                                    Tel:( 0577)88076539
                                    Fax: (0577)88076565

          "Warranties"              the representations and warranties set out
                                    in Schedule 3.
                                       ----------


1.2        The headings of this Agreement are inserted for convenience  only and
           shall be ignored in  construing  this  Agreement.  Unless the context
           otherwise  requires,  references  in this  Agreement  to the singular
           shall be deemed to include  references  to the plural and vice versa;
           references to one gender shall include all genders and  references to
           any person  shall  include an  individual,  firm,  body  corporate or
           unincorporated.

1.3        References in this  Agreement to clauses,  schedules and exhibits are
           references to clauses,  schedules and exhibits of this  Agreement and
           references to sub-clauses and paragraphs are unless otherwise stated,
           references to sub-clauses  and  paragraphs of the clause,  sub-clause
           or,  as  appropriate,  the  schedule  or the  exhibit  in  which  the
           reference appears.

1.4        Reference to a "subsidiary"  or "holding  company" shall be construed
           in accordance with section 2 of the Companies Ordinance.

1.5        Reference to any Ordinance,  regulation or other statutory  provision
           or rules in this  Agreement  includes  reference  to such  Ordinance,
           regulation, provision or rule as modified, consolidated or re-enacted
           from time to time.

2.         SALE AND PURCHASE OF THE SALE INTERESTS

2.1        Subject to the terms and  conditions of this  Agreement,  each of the
           Vendors,  as  beneficial  owners of the  respective  portion  of Sale
           Interests  as set out in  Schedule  2, shall  sell and the  Purchaser
           shall,  relying on the warranties and indemnities  herein  contained,
           purchase or procure its nominee to purchase the Sale Interests,  with
           full title guarantee with effect from the date of this Agreement free
           from all  Encumbrances  together  with all  rights  now or  hereafter
           attaching  thereto  including but not limited to all dividends  paid,
           declared  and/or made in respect thereof on or after the date of this
           Agreement.

2.2        The parties  acknowledge and agree that the Vendors will enter into a
           share transfer agreement with the Purchaser's Nominees as referred to
           in Clause 3.1(b),  pursuant to which the Purchaser's Nominees will be
           registered  as  the  beneficiary  owner  of  the  Sale  Interests  in
           accordance  with  the  instructions  of  the  Purchaser.  That  share
           transfer agreement is the appendix to this agreement.

2.3        The Purchaser and/or the Purchaser's Nominees shall not be obliged to
           purchase any portion of the Sale Interests unless the purchase of all
           the Sale Interests is completed simultaneously.


3.         CONDITIONS

3.1        Completion is conditional upon:

(a)                  the Purchaser having completed its due diligence (including
                     without   limitation,   legal,   financial  and  commercial
                     aspects) in respect of the Group  referred to in Clause 3.3
                     below and the results of which are, in the absolute opinion
                     of  the  Purchaser,  satisfactory  and  acceptable  to  the
                     Purchaser in all respects;

(b)                  the due  execution  of a share  transfer  agreement  by the
                     Vendors and the Purchaser's Nominees;

(c)                  if  so  required,   passing  of  necessary  resolutions  by
                     directors of the Purchaser at a board meeting approving (i)
                     this Agreement and the transactions contemplated herein and
                     (ii) the allotment and issue of the Consideration Shares to
                     the Vendors credited as fully paid;

(d)                  all  necessary   consents  permits  and  approval  (whether
                     governmental,  regulatory  or otherwise) as may be required
                     under  US   securities   laws  or  other   relevant   laws,
                     regulations  and rules in US in respect of this  Agreement,
                     the allotment and issue of the Consideration Shares and the
                     transactions contemplated hereunder having been obtained by
                     the Purchaser;

(e)                  all  necessary   consents  permits  and  approval  (whether
                     governmental,  regulatory  or otherwise) as may be required
                     in respect of the sale and  purchase of the Sale  Interests
                     and/or the change of control  of the  Company  having  been
                     obtained  from the relevant PRC  governmental  authorities,
                     including  but not limited to the new business  license for
                     the Company;

(f)                  the Purchaser  having  obtained a legal opinion issued by a
                     lawyer (acceptable to the Purchaser)  qualified to practice
                     PRC   securities   laws  (which  form  and   contents   are
                     satisfactory   and  acceptable  to  the  Purchaser  at  its
                     absolute discretion) in respect of:

(i)                  the  legality  and  validity  of  this  Agreement  and  the
                     transactions contemplated herein;

(ii)                 the completion of all necessary procedures and obtaining of
                     all necessary  approvals regarding the sale and purchase of
                     the Sale Interests;

(iii)                the  appointment of Director(s)  nominated by the Purchaser
                     become effective;

(iv)                 no change in the  permitted  scope  business of the Company
                     after the transfer of the Sale Interests;

(v)                  all other matters reasonably requested by the Purchaser;



(g)                  the Purchaser  having  obtained a legal opinion issued by a
                     US legal counsel (which form and contents are  satisfactory
                     and acceptable to the Purchaser at its absolute discretion)
                     in respect of:

(i)                  the legality and validity of this Agreement,  allotment and
                     issue  of the  Consideration  Shares  and the  transactions
                     contemplated herein;

(ii)                 the completion of all necessary procedures and obtaining of
                     all necessary  approvals  regarding the  acquisition of the
                     Sale Interests; and

(iii)                all other matters reasonably requested by the Purchaser;



(h)                  the Purchaser  having obtained a consent letter duly signed
                     by all  shareholders  and  person  who  has any  direct  or
                     indirect interest in the registered  capital of the Company
                     waiving their respective rights of pre-emption or any other
                     rights they may have in respect of the Sale Interests;

(i)                  the due execution of a share transfer and pledge  agreement
                     by the Purchaser's Nominees and the Purchaser;

(j)                  the  Warranties and  undertakings  under this Agreement are
                     true and  accurate and are not  misleading  in any material
                     aspects at Completion  as if repeated at Completion  and at
                     all  time  between  the  date  of  this  Agreement  and the
                     Completion.

3.2        The Vendors shall jointly and severally  procure the  fulfillment  of
           the condition  precedents mentioned in Clauses 3.1(e) above and shall
           keep the Purchaser fully informed of all their actions and efforts in
           connection with their obtaining the necessary  consents,  permits and
           approvals from the relevant regulatory authorities, including without
           limitation,  providing  the Purchaser  immediately  with all of their
           correspondence with these relevant regulatory authorities.

3.3        In  relation  to Clause  3.1(a),  the  Vendors  shall  give and shall
           procure that the  Purchaser  and/or any persons  authorized  by it in
           writing  will be given  such  access to the  premises  and all books,
           documents, title deeds, records, returns,  approvals,  correspondence
           and accounts of the Company and all members of the Group and all such
           information  relating to the Group as may be reasonably  requested by
           or on behalf of the  Purchaser  to  undertake  and conduct a full due
           diligence (including but without limitation,  in all legal, financial
           and  commercial  aspects)  against the Group and be permitted to take
           copies  of any  such  books,  documents,  title  deeds,  records  and
           accounts and that the  directors  and employees of all members of the
           Group shall be instructed to give promptly all such  information  and
           explanations  to any such persons as aforesaid as may be requested by
           it or them. For the avoidance of doubt,  such due diligence shall not
           limit or otherwise qualify in any way the obligations and liabilities
           of the Vendors under Clause 10.

3.4        The  Purchaser  may at any time by notice in writing  to the  Vendors
           waive any of the  conditions set out in Clause 3.1. If (a) any of the
           conditions  set out in Clause 3.1 has not been  satisfied  (or as the
           case may be,  waived by the  Purchaser) on or before 5:00 p.m. on the
           Long Stop Date or such later date as the Purchaser may agree;  or (b)
           the Purchaser is not satisfied  with the results of the due diligence
           conducted  according to Clause 3.3 and informs the Vendors in writing
           at any time, this Agreement shall cease and determine and the parties
           to this Agreement shall not have any obligations and liabilities.


4.        CONSIDERATION

4.1       The  consideration  for the sale and  purchase  of the Sale  Interests
          shall be the sum of USD 2.231million  USD*8.25(pound)(C),  which shall
          be satisfied by the Purchaser  procuring the Holding Company to allot,
          issue  and  credit  the  Consideration  Shares to the  Vendors  in the
          Relevant  Proportion  as fully paid at an issue price of  US$0.5955per
          share upon Completion.

4.2       The Vendors  shall  notify the  Purchaser  in writing at least two (2)
          Business  Days  before the  Completion  Date of the  name(s) and other
          particulars of the registered  holder(s) of the  Consideration  Shares
          and the board lot denomination of the share  certificate(s) in respect
          of the  Consideration  Shares to be issued to them or their nominee(s)
          and all necessary information and details as is reasonably required to
          enable  the  share  registrars  of the  Holding  Company  to issue the
          definitive  share  certificates  for such  Consideration  Shares  upon
          Completion.

4.3       The  Vendors  understand  that the  Consideration  Shares  will not be
          registered  under the Securities Act. The Vendors also understand that
          the Consideration  Shares are being allotted and issued pursuant to an
          exemption from  registration  contained in the Securities Act based in
          part upon the Vendors'  representations  contained in this  Agreement.
          The Vendors hereby represent and warrant as follow:

(a)                  Vendors bear economic  risk:  the Vendors have  substantial
                     experience in evaluating and investing in private placement
                     transactions  of  securities  in  companies  similar to the
                     Purchaser  so that it is capable of  evaluating  the merits
                     and risks of its  investments in the Purchaser and have the
                     capacity to protect its own interests. The Vendors are able
                     to bear the economic risk of this investment;

(b)                  Acquisition for own account:  the Vendors are acquiring the
                     Consideration  Shares for their  respective own account for
                     investment   only,  and  not  with  a  view  towards  their
                     distribution;

(c)                  Vendors can protect their interest:  the Vendors  represent
                     that by reason of their  management,  business or financial
                     experience,  the Vendors have the capacity to protect their
                     own   interests  in   connection   with  the   transactions
                     contemplated  in this Agreement.  Further,  the Vendors are
                     aware of no publication of any  advertisement in connection
                     with the transactions contemplated in this Agreement;

(d)                  Company information: the Vendors have had an opportunity to
                     discuss the Purchaser's business,  management and financial
                     affairs  with  directors,  officers and  management  of the
                     Purchaser  and  have  had the  opportunity  to  review  the
                     Purchaser's  operations  and  facilities.  The Vendors have
                     also had the  opportunity  to ask  questions of and receive
                     answers from the Purchaser and its management regarding the
                     terms and  conditions of this  investment;  Purchaser  will
                     provide balance sheet and income statement to Vendors.

(e)                  Rule 144: The Vendors have been advised or are aware of the
                     provisions  of Rule 144  promulgated  under the  Securities
                     Act, which permits limited resale of shares  purchased in a
                     private  placement  subject to the  satisfaction of certain
                     conditions;

(f)                  Legends:   The  Vendors   understand  and  agree  that  the
                     Purchaser will cause the legends set forth below or legends
                     substantially  equivalent  thereto,  to be placed  upon any
                     certificate(s)  evidencing  ownership of the  Consideration
                     Shares,  together  with  any  other  legends  that  may  be
                     required  by state or federal  securities  laws,  or by the
                     Articles of Association and Bye laws of the Company,  or by
                     any other  agreement  between the Vendors and the Purchaser
                     or between the Vendors and any third party:

                     THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
                     UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED (THE "ACT"),
                     OR UNDER  THE  SECURITIES  LAWS OF  CERTAIN  STATES.  THESE
                     SECURITIES ARE SUBJECT TO RESTRICTIONS  ON  TRANSFERABILITY
                     AND RESALE AND MAY NOT BE  TRANSFERRED  OR RESOLD EXCEPT AS
                     PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES
                     LAWS,  PURSUANT TO  REGISTRATION  OR  EXEMPTION  THEREFROM.
                     INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
                     THE FINANCIAL RISKS OF THIS INVESTMENT. THE ISSUER OF THESE
                     SECURITIES  MAY  REQUIRE  AN OPINION OF COUNSEL IN FORM AND
                     SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
                     PROPOSED  TRANSFER OR RESALE IS IN COMPLIANCE  WITH THE ACT
                     AND ANY APPLICABLE STATE SECURITIES LAWS.

(g)                  Refusal to Transfer:  The Purchaser will not be required to
                     (i)  transfer  on its books any  Consideration  Shares that
                     have been sold or otherwise transferred in violation of any
                     of the provisions of this Agreement; or (ii) treat as owner
                     of such Consideration Shares or to accord the right to vote
                     or pay  dividends to any  purchaser or other  transferee to
                     whom such Consideration Shares have been so transferred.

4.4        The  Purchaser  agrees  that upon  expiry of the  Restricted  Trading
           Period  and  upon  presentation  of  the   Consideration   Shares  to
           Purchaser,  Purchaser  will attend to all necessary  formalities  and
           registration  procedures as may be required  under the Securities Act
           and the applicable State  securities law to enable the  Consideration
           Shares becoming freely transferable and resalable.


5.         COMPLETION

5.1        Completion shall take place at the PRC office of the Vendors situated
           at Zhongnan Computer big shop 1st floor , Jiangnan  Building,  Renmin
           road(East),  Wenzhou,  China on the  Completion  Date at 2p.m. (or at
           such other place and time as the parties may agree) when all the acts
           and requirements set out in this Clause 5 shall be complied with.

5.2        On Completion, each of the Vendors shall jointly and/or severally (as
           the case may be) deliver or procure the delivery to the  Purchaser of
           all the following:

(a)                             copies,  certified  as true  and  complete  by a
                                director/  legal  representative  of the Company
                                and its relevant subsidiaries, of resolutions of
                                the  shareholders  /board of  directors  meeting
                                approving  the matters as  stipulated in Clauses
                                5.3, 5.4(c) and 5.4(d);

(b)                             in respect of every member of the Group:

(i)                             all constitutional documents,  statutory records
                                and minute  books  (which shall be written up to
                                date as at Completion);

(ii)                            all common seals and all rubber  stamps,  cheque
                                books, cheque stubs and bank statements, receipt
                                books, all current insurance  policies (if any),
                                books and  accounts and title deeds and evidence
                                of  ownerships  to all  assets  and all  current
                                contracts and all other accounting records;

(iii)                           copies  of  all  tax  returns  and   assessments
                                (receipted  where the due dates for payment fell
                                on or before the Completion Date); and

(iv)                            all other papers,  correspondence  and documents
                                relating   to  the   Group   which  are  in  the
                                possession of or under the control of any of the
                                Vendor;

                     provided that, if the Purchaser so agrees,  delivery of all
                     documents  and records as referred to in this Clause 5.2(b)
                     shall  be  deemed  to have  been  effected  where  they are
                     situated in premises  and shall  continue to be in the sole
                     occupation  of the relevant  member of the Group  following
                     Completion or otherwise in the custody of persons who shall
                     remain  officers  and/or  employees  of such  member of the
                     Group following Completion;

(c) the Tax Indemnity duly executed by each of the Vendors.
5.3        On   Completion,   the  Vendors   shall  procure  a  meeting  of  the
           shareholders of the Company at which such matters shall be dealt with
           and resolved upon as the Purchaser  shall require for the purposes of
           giving effect to the provisions of this Agreement including:

(a)                  approving the sale and purchase of the Sale Interests;

(b)                  appointing  nominee(s) of the  Purchaser to be  Director(s)
                     and of the Company;

(c)                  amending the  memorandum and articles of association of the
                     Company as may be required by the  Purchaser  to effect the
                     transactions contemplated hereunder; and

(d)                  procure the resignation of such existing Director(s) of the
                     Company as the Purchaser shall specify and that each person
                     shall  confirm  under seal that they have no claim  against
                     the  Company  for  compensation  for loss of  office or any
                     other claim.

5.4        On Completion, each of the Vendors shall jointly procure that:

(a)                  all  registration  procedures as may be required  under the
                     PRC law in respect of the transfer of the Sale Interests by
                     the Vendors to the Purchaser's  Nominees shall be completed
                     within reasonable time;

(b)                  a new  articles  of  association  of the  Company  shall be
                     signed  by the  Purchaser's  Nominees  and  filed  with the
                     relevant  local  Administration  of Industry  and  Commerce
                     which shall state that the  Purchaser's  Nominees  hold 51%
                     interest in the registered capital of the Company;

(c)                  a board meeting of each  subsidiary of the Company shall be
                     held at which such matters shall be dealt with and resolved
                     upon as the  Purchaser  shall  require for the  purposes of
                     giving  effect  to  the   provisions  of  this   Agreement,
                     including appointing such persons as the board of directors
                     may determine to be new director(s); and

(d)                  such existing directors, supervisor(s) and the secretary of
                     each  subsidiary  of the  Company  as the  Purchaser  shall
                     specify  shall resign as directors,  supervisor(s)  and the
                     secretary of such  relevant  subsidiary  of the Company and
                     that each such person  shall  confirm  under seal that they
                     have  no  claim   against  the  relevant   subsidiary   for
                     compensation   for  loss  of  office  or  any  other  claim
                     whatsoever.

5.5        Against  performance  of the  obligations  by the Vendors under
           Clauses 5.2, 5.3 and 5.4 above,  the
           ------------------------
           Purchaser shall:

(a)                   procure the allotment and issue to each of the Vendors (or
                      their respective nominees) the Consideration Shares in the
                      Relevant Proportion and immediately thereafter to register
                      each of the Vendors (or their  respective  nominees)  as a
                      member of the Purchaser;

(b)                   cause to be  delivered  to each of the  Vendors  certified
                      copy of instructions to the share registrar of the Holding
                      Company for the issue of definitive share  certificates of
                      title  in  respect  of  the  Consideration  Shares  in the
                      Relevant Proportion in the respective names of the Vendors
                      or their respective nominee(s); and

(c)                   deliver  to each of the  Vendors a  certified  copy of the
                      directors' resolutions of the Purchaser approving:

(i)                   the  acquisition  of the Sale  Interests and the terms and
                      conditions of this Agreement; and

(ii)                  the issue and allotment of the Consideration Shares.

5.6        If the Vendors shall fail to do anything  required to be done by them
           under Clauses 5.2, 5.3 and 5.4, without  prejudice to any other right
           or remedy available to the Purchaser, the Purchaser may:

(a)                  defer  Completion to a day not later than 14 days after the
                     date fixed for  Completion  (and so that the  provisions of
                     this   paragraph  (a)  shall  apply  to  Completion  as  so
                     deferred); or

(b)                  proceed to  Completion  so far as  practicable  but without
                     prejudice to the Purchaser's  rights to the extent that the
                     Vendors  shall not have  complied  with  their  obligations
                     hereunder; or

(c)                  rescind this Agreement without liability on its part.

5.7        Clauses 6 to Clause 17 shall survive the Completion.
           ---------    ---------


6.         MANAGEMENT OF THE COMPANY

6.1        Upon  Completion,  the business and  operations of the Group shall be
           managed by the Board.

6.2        The chairman of the Board and the legal representative of the Company
           shall be nominated  and  appointed by the Board.  The chairman of the
           Board and the legal  representative of the Company shall initially be
           appointed by the Purchaser.

6.3        The Board shall comprise of five Directors.  The Purchaser's Nominees
           shall be entitled to nominate and appoint three Directors at any time
           by written notice addressed to the Company.

6.4        The  quorum for  meetings  of the Board  shall be three,  of whom two
           shall be a Director nominated by the Purchaser's Nominees.

6.5        Unless otherwise unanimously agreed by all Directors, meetings of the
           Board shall be held at least once in each quarter.

6.6        At least 7 days' written notice of each meeting of the Board shall be
           given to each Director and alternate  director  specifying  the date,
           time and  place of the  meeting  and the  business  to be  transacted
           thereat  with all  documents  and  papers to be  distributed  in such
           meeting  attached,  provided  that if Directors  and their  nominated
           alternates  who would  constitute a quorum at any meeting  agree to a
           shorter  period of notice,  then such  meeting  shall be deemed to be
           properly called.

6.7        The financial  controller  and/or the chief financial  officer of the
           Company shall be nominated and appointed by the Purchaser's Nominees.

6.8        Save with the consent of the Purchaser, the Vendors shall not sell or
           otherwise dispose of any of their remaining interests in the Company.

6.8        So far as the Vendors remain as shareholders of the Company,  each of
           the Vendors  undertakes  that  he/she/it  shall  procure and take all
           actions to ensure  that all  obligations  under  Clauses  6.8 be duly
           executed, done and/or performed.


7.         DISPOSAL OF CONSIDERATION SHARES

           Each of the Vendors agrees and  acknowledges  that the  Consideration
           Shares are  subject  to the United  States  Securities  and  Exchange
           Commission  ("SEC") Rule 144 and in  particular,  hereby  jointly and
           severally  undertakes  to and  covenants  with the  Purchaser and the
           Holding  Company  that it will not,  during  the  Restricted  Trading
           Period,  dispose of (including  without limitation by the creation of
           any option,  charge or other Encumbrance or rights over or in respect
           of) any of the Consideration Shares or any interests therein owned by
           it/him/her  or  in  which   it/he/she  is,  directly  or  indirectly,
           interested  immediately  after  Completion  or dispose of  (including
           without  limitation  by the  creation of any option,  charge or other
           encumbrance  or  rights  over or in  respect  of) any  shares  in any
           company  controlled by it/he/she which is the beneficial owner of the
           Consideration Shares.



8.         REPURCHASE OPTION

8.1        If, according to the Special Audited Accounts, the Company either:

           (a)        fails to attain a Net Profit  exceeding the Guaranteed Net
                      Profit or fails to achieve the Guaranteed  Turnover during
                      the Restricted Trading Period; or

           (b)        making  loss  in any  single  quarter  in  the  Restricted
                      Trading Period,

           then the  Purchaser may at its sole and absolute  discretion,  within
           three (3) months from the issue of the Special Audited  Accounts,  by
           notice in writing  ("Purchaser's  Repurchase Notice") to the Vendors,
           request the Vendors to repurchase  the Sale Interests and the Vendors
           shall   transfer  to  the   Purchaser  or  its  nominee  all  of  the
           Consideration  Shares  which have been issued  pursuant to Clause 4.1
           and  Clause  8.3  free  from  Encumbrances  in  consideration  of all
           beneficial and equitable  interest in the  registered  capital of the
           Company then held by the Purchaser  and/or the  Purchaser's  Nominees
           being transferred to the Vendors.

8.2        If, upon expiry of the Restricted  Trading Period, the return accrued
           or derived from the  Consideration  Shares is less than two times the
           return accrued or derived from the Sale  Interests,  then the Vendors
           may at its sole and absolute discretion, within three (3) months from
           the issue of the  Special  Audited  Accounts,  by  notice in  writing
           ("Vendors'   Repurchase  Notice")  to  the  Purchaser,   request  the
           Purchaser to repurchase the Consideration  Shares and transfer to the
           Vendors all  beneficial  and  equitable  interest  in the  registered
           capital  of the  Company  then  held  by  the  Purchaser  and/or  the
           Purchaser's  Nominees in  consideration  of all of the  Consideration
           Shares  which have been issued  pursuant to Clause 4.1 and Clause 8.3
           free from Encumbrances being transferred to the Purchaser.

8.3        The  Vendors  shall,  within 7 days from the date of the  Purchaser's
           Repurchase Notice or the Vendors'  Repurchase Notice (as the case may
           be),  deliver  to or  cause  to be  delivered  to the  Purchaser  the
           following in respect of the relevant Consideration Shares:

(a)                   duly executed  transfer  instruments and contract notes in
                      favour of the Purchaser or its nominees  together with the
                      relevant share certificates; and

(b)                   such other documents as may be reasonably required to give
                      good  title  to  the   Consideration   Shares   free  from
                      Encumbrances  to enable the  Purchaser or its nominees (or
                      as it  may  nominate)  to  become  the  registered  holder
                      thereof,

           against which the Purchaser  shall transfer and assign or procure the
           transfer and assign to the Vendors of all  equitable  and  beneficial
           interest and all  shareholding  in the Company then held by it and/or
           the Purchaser's Nominees.

8.4        For the purposes of this Clause 9, return accrued or derived from the
           Consideration  Shares  or the Sale  Interests  respectively  shall be
           calculated by reference to:

(a)                   the  multiple  of  the  average   closing   price  of  the
                      Consideration Shares for the last thirty (30) trading days
                      including the date on which the Restricted  Trading Period
                      ends and the number of the Consideration Shares; and

(b)                   51% of the net assets  value of the Company as at the date
                      on which the  Restricted  Trading Period ends according to
                      the Special Audited Accounts.


9.                    WARRANTIES

9.1        Each of the Vendors  hereby  jointly  and  severally  represents  and
           warrants to the Purchaser  that the  Warranties are true and accurate
           in all respects as at the date of this Agreement and will continue to
           be so up to and  including  Completion  and agree to use  their  best
           endeavours   (including   taking  such  remedial  action  as  may  be
           necessary)  to ensure  that the  Warranties  have  remained  and will
           remain true and accurate in all respects from date of signing of this
           Agreement  up to the time of  Completion  and  acknowledges  that the
           Purchaser,  in entering  into this  Agreement,  is relying on,  inter
           alia, such  Warranties.  For the avoidance of doubt,  the liabilities
           and obligations of each of the Vendors under the Warranties  shall in
           no circumstances be lessened, modified, relieved or otherwise reduced
           due to any actual or  constructive  knowledge of the Purchaser of any
           facts or events relating to the business,  operations or otherwise of
           the Group,  whether such knowledge is gained in the course of the due
           diligence conducted under Clause 3.3 or otherwise.

9.2        Each of the Vendors agrees that the Purchaser shall treat each of the
           Warranties as a condition of this Agreement. In addition, each of the
           Warranties is without  prejudice to any other  Warranty  and,  except
           where expressly  otherwise stated, no provision in any Warranty shall
           govern or limit the extent or application  of any other  provision in
           any Warranty.

9.3        Each of the Vendors agrees to fully  indemnify and keep the Purchaser
           and its  assignee  fully  indemnified  on demand from and against all
           losses,  liabilities,  damages,  costs and expenses  (including legal
           expenses)  which the  Purchaser and its assignee may incur or sustain
           from or in  consequence of any of the Warranties not being correct or
           fully complied with. This indemnity shall be without prejudice to any
           other  rights and  remedies  of the  Purchaser  and its  assignee  in
           relation  to any such  breach of  Warranties  and all such rights and
           remedies are hereby reserved.

9.4        The Warranties  shall survive  Completion and the rights and remedies
           of the Purchaser in respect of any breach of the Warranties shall not
           be  affected  by  Completion  or by any  investigation  made by or on
           behalf  of the  Purchaser  into the  affairs  of the  Group or by the
           Purchaser  rescinding,  or  failing  to rescind  this  Agreement,  or
           failing to exercise or delaying  the exercise of any right or remedy,
           or by any other  event or matter  whatsoever,  except a specific  and
           duly  authorised  written  waiver or release and no single or partial
           exercise of any right or remedy  shall  preclude any further or other
           exercise.

9.5        The Purchaser  shall be entitled to take action both before and after
           Completion in respect of any breach or  non-fulfillment of any of the
           Warranties and Completion shall not in any way constitute a waiver of
           any right of the Purchaser.

9.6        Each of the Vendors  undertakes  in relation  to any  Warranty  which
           refers to the knowledge, information or belief of each of the Vendors
           that it has  made  full  enquiry  into  the  subject  matter  of that
           Warranty and that they do not have actual or constructive  knowledge,
           information  or belief that the subject  matter of that  Warranty may
           not be correct, complete or accurate.

9.7        If at any time before  Completion  the Vendors or any of them come to
           know of any fact or event which:

(a)               is in any way inconsistent with any of the undertakings  given
                  by the Vendors, and/or

(b)               suggests  that any fact  warranted  may not be as warranted or
                  may be misleading; and/or

(c)               might affect the willingness of a prudent  purchaser for value
                  of the Sale  Interests  to complete its purchase or the amount
                  of the consideration which such purchaser would be prepared to
                  pay for the Sale Interests;

           the  Vendors  shall  give  immediate  written  notice  thereof to the
           Purchaser  in  which  event  the  Purchaser  may  within  14  days of
           receiving  such notice  rescind this  Agreement by written  notice to
           each of the Vendors.

9.8        If at any time before Completion, the Purchaser finds that any of the
           Warranties  is  incorrect  or has not  been or is (in the  reasonable
           opinion of the Purchaser)  incapable of being rectified the Purchaser
           may rescind this Agreement by written notice to each of the Vendors.

9.9        The Purchaser's rights under the above clauses are in addition to and
           without  prejudice to all other  rights and remedies  available to it
           and its  exercise of or its failure to exercise  its rights under any
           of the above  clauses  shall not  constitute a waiver of or prejudice
           any of its other rights under this Agreement.


10.        VENDORS' UNDERTAKINGS

10.1     Each of the Vendors  jointly and severally  undertakes that the Vendors
         will not  directly or  indirectly  either  alone or jointly  with or as
         manager or agent of any person and  whether or not for gain,  carry on,
         engage or in any way be  interested  in any business that is similar to
         and/or in  competition  with the business of the Company  and/or any of
         its  subsidiaries  for a period of three (3) years  commencing from the
         date on which the Restricted Trading Period ends.


10.2     The Vendors covenant and undertake that prior to Completion and without
         the prior written  consent of the Purchaser,  the Vendors shall procure
         that the Company and each member of the Group shall not:

a.                   incur any  expenditure on capital account or enter into any
                     option in respect of any part of its assets;

b.                   dispose  of or agree to  dispose  of or grant any option in
                     respect of any part of its assets;

c.                   borrow any money or make any payments out of or drawings on
                     its bank account(s) other than routine payments;

d.                   enter into any unusual or abnormal contract or commitment;

e.                   make any loan;

f.                   enter into any leasing,  hire,  purchase or other agreement
                     or arrangements for payment on deferred terms;

g.                   declare,  make or pay any dividend or other distribution or
                     do or  suffer  anything  which  may  render  its  financial
                     position  less  favourable  than  as at the  date  of  this
                     Agreement;

h.                   grant or issue  or agree to grant or issue  any  mortgages,
                     charges, debentures or other securities or give or agree to
                     give any guarantees or indemnities;

i.                   make any change in the terms and  conditions  of employment
                     or pension benefits of any of its directors or employees or
                     employ  or  terminate  (other  than  for  good  cause)  the
                     employment of any person;

j.                   create,  issue or grant any  option in respect of any class
                     of share or loan capital or agree so to do;

k.                   in any other way  depart  from the  ordinary  course of its
                     respective day-to-day business either as regards the nature
                     scope or manner of conducting the same;

l.                   voluntarily  contravene or fail to comply with any material
                     obligation, statutory or otherwise; and

m.                   do anything whereby its financial position will be rendered
                     less favourable than at the date hereof.

10.3    Each of the Vendors  agrees to fully  indemnify  and keep each member of
        the Group and/or the Purchaser  and its assignee  fully  indemnified  on
        demand  from and against all  losses,  liabilities,  damages,  costs and
        expenses (including legal expenses) which any member of the Group and/or
        the  Purchaser  and  its  assignee  may  incur  or  sustain  from  or in
        consequence  of  any  liabilities  of  the  Group,   whether  actual  or
        contingent  including  without  limitation,  the diminution of the value
        (including without limitation, the net assets value or expected profits)
        of the Group,  arising from any act or omission or otherwise incurred on
        or before the Completion Date.


11.        ACCESS TO INFORMATION

           Each  of  the  Vendors  shall  assist  the  Purchaser,   its  agents,
           representatives  and professional  advisers in obtaining  promptly on
           request full access to all such facilities and information  regarding
           the business, assets, liabilities, contracts and affairs of the Group
           and other  evidence of  ownership of the assets owned by the Group as
           the Purchaser may require.


12.        FURTHER ASSURANCE

           Each of the Vendors  shall  execute,  do and perform or procure to be
           executed,  done and  performed  by other  necessary  persons all such
           further  acts,  agreements,   assignments,   assurances,   deeds  and
           documents  as the  Purchaser  may  require  effectively  to vest  the
           registered  and  beneficial  ownership  of the Sale  Interests in the
           Purchaser  free from all  Encumbrances  and with all  rights  now and
           hereafter attaching thereto.


13.        CONFIDENTIALITY AND ANNOUNCEMENTS

13.1       Each of the parties undertakes to the others that it will not, at any
           time after the date of this Agreement,  divulge or communicate to any
           person other than to its professional  advisers,  or when required by
           law or any rule of any relevant  stock  exchange  body or  regulatory
           authorities,  or  to  its  respective  officers  or  employees  whose
           province is to know the same any confidential  information concerning
           the business,  accounts, finance or contractual arrangements or other
           dealings,  transactions  or affairs of any of the others which may be
           within  or may  come to its  knowledge  and it  shall  use  its  best
           endeavours  to prevent  the  publication  or  disclosure  of any such
           confidential information concerning such matters.

13.2       No public  announcement or communication of any kind shall be made in
           respect of the subject matter of this Agreement  unless  specifically
           agreed  between  the  parties or unless an  announcement  is required
           pursuant  to  the  applicable   laws  and  the   regulations  or  the
           requirements  of any relevant stock exchange or any other  regulatory
           body or authority.  Any announcement by any party required to be made
           pursuant to any relevant laws or regulation  or the  requirements  of
           the relevant stock exchange or any other regulatory body or authority
           shall be issued  only after such  prior  consultation  with the other
           party as is reasonably practicable in the circumstances.


14.        GENERAL

14.1       This Agreement  constitutes the entire agreement  between the parties
           hereto with respect to the matters  dealt with herein and  supersedes
           all previous agreements, arrangements,  statements, understandings or
           transactions  between the  parties  hereto in relation to the matters
           hereof  and the  parties  acknowledge  that no claim  shall  arise in
           respect of any agreement so superseded.

14.2       Any variation to this Agreement  shall be binding only if recorded in
           a document signed by all the parties hereto.

14.3       Time shall be of the essence of this  Agreement but no failure by any
           party to exercise,  and no delay on its part in exercising  any right
           hereunder will operate as a waiver  thereof,  nor shall any single or
           partial  exercise  of any right  under this  Agreement  (including  a
           settlement with the Vendor) preclude any other or further exercise of
           it or the  exercise  of any right or  prejudice  or affect  any right
           against any person under the same liability whether joint, several or
           otherwise.  The rights and remedies  provided in this  Agreement  are
           cumulative  and not  exclusive of any rights or remedies  provided by
           law.

14.4       The obligations, liabilities (including without limitation, breach of
           Warranties)  and  undertakings  of the  Vendors  shall be  joint  and
           several.

14.5       This  Agreement  shall be binding  upon and ensure for the benefit of
           the successors of the parties but shall not be assignable.

14.6       All  provisions  of this  Agreement,  in so far as the same shall not
           have been  performed  at  Completion,  shall remain in full force and
           effect notwithstanding Completion.

14.7       If any  provision  of this  Agreement  shall be held to be illegal or
           unenforceable,  the enforceability of the remainder of this Agreement
           shall not be affected.

14.8       Time shall be of the essence as regards any date or period  mentioned
           in this Agreement and any date or period  substituted for the same by
           agreement of the parties hereto or otherwise.


15.        NOTICES

15.1       Any  notice,   claim,  demand,  court  process,   document  or  other
           communication   to  be  given  under  this  Agreement   (collectively
           "communication" in this Clause 15) shall be in writing in the English
           language and may be served or given personally or sent to the address
           or facsimile  numbers (if any) stated after the relevant party's name
           in Schedule 4 or to such other address as may have been last notified
           in  writing  by such  party to the party  serving  the  communication
           specifically referring to this Agreement. All communications shall be
           served by the following  means and the  addressee of a  communication
           shall be deemed to have  received  the same  within  the time  stated
           adjacent to the relevant means of dispatch:

           Means of dispatch    Time of deemed receipt

           Local mail or courier          24 hours
           Facsimile                      on  receipt  of a  satisfactory report
                                          of  transmission  printed  out  by the
                                          sending machine
           Air courier/Speedpost          3 days
           Airmail                        5 days

           Provided  that in the case of delivery by hand or by fax which occurs
           after 6:00 p.m.  on a  Business  Day or a day which is not a Business
           Day,  service  thereof  shall be deemed to occur at 9:30 a.m.  on the
           next following Business Day.

15.2       A communication served in accordance with Clause 15.1 shall be deemed
           sufficiently  served  and in  proving  service  and/or  receipt  of a
           communication it shall be sufficient to prove that such communication
           was left at the addressee's  address or that the envelope  containing
           such communication was properly addressed and posted or dispatched to
           the  addressee's  address  or that  the  communication  was  properly
           transmitted by facsimile to the addressee.

15.3       Nothing in this Clause 15 shall preclude the service of communication
           or the proof of such service by any mode permitted by law.


16.        COSTS AND STAMP DUTY

16.1       Each party  shall bear its own costs and  expenses  (including  legal
           fees)  incurred  in  connection  with the  preparation,  negotiation,
           execution  and  performance  of  this  Agreement  and  all  documents
           incidental or relating to Completion.

16.2       All  stamp  duty (if any)  payable  in  connection  with the sale and
           purchase of the Sale Interests  shall be borne by the Vendors and the
           Purchaser in equal shares.


17.        GOVERNING LAW AND JURISDICTION

17.1       This Agreement  shall be governed by and construed in accordance with
           the laws of Hong Kong.

17.2       Any dispute,  controversy or claim arising out of or relating to this
           Agreement,  or the breach termination or invalidity thereof, shall be
           settled by  arbitration in accordance  with the UNCITRAL  Arbitration
           Rules as at  present  in force and as may be  amended  by the rest of
           this   clause.   The   appointing   authority   shall  be  Hong  Kong
           International Arbitration Centre.

17.3       The  place  of  arbitration  shall be in Hong  Kong and at Hong  Kong
           International  Arbitration Centre (HKIAC).  There shall be only [one]
           arbitrator.  Any such  arbitration  shall be administered by HKIAC in
           accordance with HKIAC Procedures for Arbitration in force at the date
           of  this   Agreement   including   such  additions  to  the  UNCITRAL
           Arbitration Rules as are therein contained.

17.4       The language to be used in the arbitral proceedings shall be English.

17.5       Each of the Vendors hereby irrevocably appoints Mr.Chaong Kai of Flat
           H, 27th Floor, Tang Kung Mansion, 31 Taikoo Shing Road, Hong Kong and
           Purchaser  hereby  irrevocably  appoints  Tso  Vincent  of 10th floor
           Hutchison  House, 10 Hartcourt  road,  Central  Hongkong (TEL:  (852)
           25115100,  FAX: (852)25119515) as its process agent to receive on its
           behalf service of any writ, summons,  order, judgment or other notice
           of legal process in Hong Kong. Such service shall be deemed completed
           on delivery to such process agent  (whether or not it is forwarded to
           and received by both  parties).  If for any reason such process agent
           ceases  to be able  to act as  process  agent,  or no  longer  has an
           address  in Hong  Kong,  any party  irrevocably  agrees to  appoint a
           substitute  process agent with an address in Hong Kong and to deliver
           to the other party a copy of the new process  agent's  acceptance  of
           that  appointment  within 30 days.  Nothing  herein  contained  shall
           affect the right to serve  process in any other  manner  permitted by
           law.


18.        LEGAL REPRESENTATION

           Each party confirms and  acknowledges to the other that he/she/it has
           sought  separate  legal  representation  and is  fully  aware  of the
           provisions of this Agreement and the transactions contemplated herein
           before entering into this Agreement.


19.        COUNTERPARTS

           This  Agreement  may be executed in one or more counter parts each of
           which shall be binding on each party by whom or on whose behalf it is
           so executed, but which together shall substitute a single instrument.
           For the avoidance of doubt,  this  Agreement  shall not be binding on
           any party hereto  unless and until it shall have been  executed by or
           on behalf of all persons expressed to be a party hereto.

20.      FURTHER UNDERTAKING OF THE VENDORS

20.1       The Vendors  hereby  jointly and severally  undertake to procure that
           during 30 days after the signing of this Agreement,  all tangible and
           intangible     assets    and    business     currently    owned    by
           (0)1/4OYO-DAIEyAe?AE1/4    1/4O-DI<222>(1)<<E3/4(Hangzhou    Zhongnan
           Digital  Technology  Co.  Ltd)  (the "  Hangzhou  Zhongnan")  will be
           transferred     to      IAOYE-DO-DAI?AE1/4      1/4     3/4-1/4A?(a)o
           (cent)O-DI<<E3/4(Wenzhou    ZhongNan    Technology   Economic
           Development Co. Ltd), and Hangzhou Zhongnan shall be deregistered and
           all  existing  shareholders  (and each of their  respective  ultimate
           beneficial owners) of Hangzhou Zhongnan will consent to such transfer
           and attend to all necessary formalities and procedures to effect such
           transfer.

20.2       For the  avoidance  of  doubt,  this  Clause  20  shall  survive  the
           Completion.







<PAGE>


                                   SCHEDULE 1

                           Particulars of the Company

Wenzhou ZhongNan Technology Economic Development Co. Ltd.
1.       Date of incorporation                     :       8 March 2001

2. Place of incorporation : PRC

3.       Registration No.                          :       3303002200579

4. Registered capital : RMB3,000,000

5. Registered Address : IAOY3/4-1/4A1/4  1/4Eo?(a)o  (cent)C0IA1/4OCAI/3/4-O>>Ao
BP. (degree)108EO

5. Nature : domestic joint venture group with limited liability

6. Legal Representative : (2)UA(0)

7. Directors : (2)UA(0)

                                                           (2)UAuO0







8.       Financial year end                        :       31 December

9.                                                         Auditors            :
                                                     IAOY>>(a)A/>>a1/4AEE|EAInEu

10.                                                        Scope of  Business  :
                                                           Computer    hardware,
                                                           software,  components
                                                           and         services;
                                                           electronic products,






















Wenzhou LianQiang Network Co. Ltd.
1.       Date of incorporation                     :       12 July 2001

2. Place of incorporation : PRC

3.       Registration No.                          :       3303022001580

4. Registered capital : RMB3,000,000

5. Registered Address : IAOYE-DEIP. <184>AA9xeIA33<180>+/-602EO

5. Nature : domestic joint venture group with limited liability

6. Legal Representative : AEEE3/4O

7. Directors : AEEE3/4O

                                                           OU1/4ae|







8.       Financial year end                        :       31 December

9.                                                         Auditors            :
                                                       IAOYO-DO>>a1/4AEE|EAInEu

10.                                                        Scope of  Business  :
                                                           Computer    hardware,
                                                           software,  components
                                                           and         services;
                                                           electronic products.




<PAGE>



                                   SCHEDULE 2


                                   The Vendors


Wenzhou ZhongNan Technology Economic Development Co. Ltd.
Name                      Amount of registered capital  Percentage of Sale
                 paid up by each of the Interests to the entire
                                  Vendors(RMB)     issued share capital of the
                          )                             Group

(2)UA<172><180>(0)                  841,500                              28.05%
(2)UAuO0                    688,500                                  22.95%
                          -----------------------------------------------------

Total(pound)(0)                 1,530,000                                 51%

Wenzhou LianQiang Network Co. Ltd.
Name                      Amount of registered capital  Percentage of Sale
                 paid up by each of the Interests to the entire
                         Vendors(RMB)          issued share capital of the
                          )                             Group

AEEE3/4O                    918,000                                  30.6%
OU1/4ae|                    612,000                                  20.4%
                    -----------------------------------------------------------

Total(pound)(0)                 1,530,000                                 51%


























                                   SCHEDULE 3

                                   Warranties

1.       INTERPRETATION

(A) In this schedule where the context admits:

         "Accounts" means the consolidated balance sheet of the Group made up as
         at the Balance Sheet Date and the consolidated profit and loss accounts
         of the Company and its  subsidiaries  for the year ended on the Balance
         Sheet Date, true copies of which are attached hereto marked "Appendix";

         "Balance Sheet Date" means 30 April 2003;

         "Connected Persons" shall have the meaning ascribed thereto in the
          Listing Rules;

         "Intellectual Property" means patents, trademarks, service marks, trade
         names,  registered  designs,  designs,  copyrights  and other  forms of
         intellectual  or  industrial  property (in each case in any part of the
         world and whether or not  registered  or  registrable  and for the full
         period thereof and all extensions and renewals thereof and applications
         for  registration  of or otherwise in connection  with the  foregoing),
         know-how,  inventions,  formulae,  confidential or secret processes and
         information,  computer  programs and software,  and any other protected
         rights and assets,  and any  licences  and  permissions  in  connection
         therewith;


(B)      All  references in this Schedule 3 to the Company,  other than those in
         paragraphs  3(B),  4(A) and  4(C)  shall  be read  and  construed  as a
         reference to the Company and each of its subsidiaries.


2.       INFORMATION

(A)      Disclosures

         The facts and  information  set out in the recitals  and, the Schedules
         and all documents  attached are true and all information which has been
         provided in writing to the Purchaser or its representatives or advisers
         by the  Vendors or by any  Director,  officer or other  official of the
         Company by its professional advisers or other agents was when given and
         is now true and accurate in all material respects.  There is no fact or
         matter which has not been disclosed which renders any such  information
         untrue,  inaccurate  or  misleading  or the  disclosure  of which might
         reasonably  affect the  willingness of a willing  purchaser to purchase
         the Sale Interests in accordance with the provisions of this Agreement.

(B) Assessment of prospects

         The information  disclosed to the Purchaser or its  representatives  or
         professional  advisers,  by the Vendors and the directors,  officers or
         other  officials  of  the  Company  regarding  its  current  status  or
         prospects   comprises  all  information   which  is  material  for  the
         reasonable  assessment of the  financial  and trading  prospects of the
         Company or the Group as a whole.


3.       COMPLIANCE AND ABILITY TO SELL

(A) Constitution of each member of the Group

         The copy of the  memorandum  and articles of association of the Company
         which have been  provided to the Purchaser are true and complete in all
         respects  and have  embodied in them or annexed to them a copy of every
         such resolution and agreement required by law to be annexed thereto and
         the Company has at all times carried on its business and affairs in all
         respects in accordance  with its respective  memorandum and articles of
         association and all such resolutions and agreements.

(B)      Statutory compliance

         The Company is a domestic joint venture company with limited  liability
         duly established and validly existing under the laws of the PRC and has
         the corporate powers and authorises to carry on the business  presently
         carried on by it and to own and hold the assets used therewith.

         Each  member of the Group are duly  established  and  validly  existing
         under the laws of the place of its  incorporation and has the corporate
         powers and authorises to carry on the business  presently carried on by
         it and to own and hold the assets used therewith.

         Each  member of the  Group  has  complied  with the  provisions  of all
         applicable  laws,  regulations  (and all orders  notices and directions
         made  thereunder) and all applicable  codes or practices.  All returns,
         particulars,  resolutions and other documents required to be filed with
         or  delivered to the  registrar of companies or to any other  authority
         whatsoever by the relevant  member of the Group have been correctly and
         properly prepared and so filed or delivered.

(C) Power to sell

         Each of the  Vendors  has full  power to enter  into and  perform  this
         Agreement and the Tax Indemnity respectively and this Agreement and the
         Tax Indemnity will constitute  binding  obligations on each such party,
         enforceable in accordance with their terms.


4.       CAPITAL STRUCTURE

(A)      Capital of the Company

         The Sale Interests together constitute 51% of the registered capital of
         the  Company  as at the date of this  Agreement  and are fully paid up.
         There  is  no  Encumbrance  or  other  form  of  agreement   (including
         conversion  rights and rights of pre-emption) on, over or affecting the
         Sale  Interests  and there is no  agreement  or  commitment  to give or
         create any of the  foregoing,  and no claim has been made by any person
         to be  entitled  to any of the  foregoing,  and no person has the right
         (whether  exercisable  now or in the future and whether  contingent  or
         not) to call for any portion of the capital of the Company under any of
         the foregoing.

(B)      Ownership

         All the Sale Interests are solely legally and beneficially owned by and
         registered  in the names of the Vendors in the  proportions  set out in
         column 3 of Schedule 2 and are free from any  Encumbrance and there are
         no  arrangements in force or claimed  entitling or allegedly  entitling
         any person to any Encumbrance.

(C)      Connected business

         Save as disclosed, the Company:

         (i)      does  not  have  any  subsidiary  and  there  is  no  company,
                  partnership or unincorporated business or association in which
                  the Company owns or controls  (whether  directly or indirectly
                  through another company) any interests therein;

         (ii)     has not been and has not agreed to become a subsidiary  of any
                  other  company or under the control of any group of  companies
                  or consortium;

         (iii)    has not at any time been and has not agreed to become a member
                  of  any  partnership,   joint  venture,  consortium  or  other
                  unincorporated business or association; and

         (iv)     has no branch, place of business,  permanent  establishment or
                  substantial assets outside the PRC.


5.       ACCOUNTS

(A)      General

         The Accounts:

         (i)      were  prepared  in  accordance  with the  requirements  of all
                  relevant laws, statutes,  with good accounting  principles and
                  practices generally accepted at the date hereof in the PRC for
                  companies carrying on a similar business to that of the Group,
                  comply with all  relevant  statements  of standard  accounting
                  practice  and  accounting  guidelines  issued by the  relevant
                  authorities, are prepared on a basis consistent with preceding
                  accounting  periods of the Group and with the books of account
                  of the  Group  and  are  true  and  accurate  in all  material
                  respects;

         (ii)     disclose a true and fair view of the assets and liabilities of
                  the Group at the Balance Sheet Date and of its profits for the
                  financial year ended on such date;

         (iii)    contain full provision or reserve for bad and doubtful  debts,
                  burdensome contracts or other obligations, obsolescent or slow
                  moving  stocks and for  depreciation  on fixed  assets,  which
                  provision or reserve was when made and is now adequate;

         (iv)     contain  a note of all  capital  commitments  (if  any) of the
                  Company and its  subsidiaries at the Balance Sheet Date, which
                  note  was  when  made  and  is  now  adequate,  fair  and  not
                  misleading; and

         (v)      contain full  provision or reserves (as  appropriate)  for all
                  Taxation.

(B)      Liabilities

         At the Balance Sheet Date, the Group had no liabilities  known,  actual
         or  contingent  (including  contingent  liabilities  to  customers  and
         contingent liabilities for Taxation) which were not disclosed, noted or
         provided for in the Accounts.

(C)      Stock valuation

         The  stock-in-trade  shown in the Accounts has been valued at the lower
         of cost and net realisable value and includes no redundant, obsolete or
         unsaleable  items and no items  which are the  subject  of any  dispute
         (other than minor  disputes in the ordinary  course of business) with a
         supplier or customer.  The basis of valuation of the stock-in-trade has
         remained in all material respects  consistent with that adopted for the
         purpose of the Group's  consolidated  accounts at the beginning and end
         of each of the accounting periods of the Group since its incorporation.

(D) Plant and machinery etc.

         All the fixed and loose  plant  and  machinery,  equipment,  furniture,
         fittings and vehicles  used by the Group at the Balance  Sheet Date are
         reflected in the  Accounts,  were at the Balance Sheet Date and (except
         for such items as have been disposed of or realised by the Group in the
         ordinary  course  of  business)  remain  in  the  absolute   beneficial
         ownership of the Group and are free from any Encumbrance,  hire or hire
         purchase  agreement or leasing  agreement  or agreement  for payment on
         deferred terms and (apart from  depreciation  in the ordinary course of
         business)  their value is not less than at the  Balance  Sheet Date and
         none has been  acquired  for any  consideration  in  excess  of its net
         realisable  value at the date of such  acquisition or otherwise than by
         way of a bargain at arm's length.

(E)      Profits

         The profits of the Group for the two years  ended on the Balance  Sheet
         Date as shown by the Accounts and by the audited  accounts of the Group
         for  previous  periods  delivered  to the  Purchaser  and the  trend of
         profits  shown by them have not  (except  as  disclosed  in them)  been
         affected  to  a  material  extent  by   inconsistencies  of  accounting
         practices,  by the  inclusion  of  non-recurring  items  of  income  or
         expenditure,  by  transactions  entered into  otherwise  than on normal
         commercial terms or by any other factors rendering such profits for all
         or any of such periods exceptionally high or low.

(F)      Depreciation

         Depreciation  of the fixed  assets of the Group has been made at a rate
         sufficient to write down the value of such assets to nil not later than
         the end of their useful working lives and no fixed asset has attributed
         to it a value exceeding the current market value thereof at the Balance
         Sheet Date.

(G) Books of account

         All accounts, books, ledgers,  financial and other necessary records of
         whatsoever kind of the Group  (including all invoices and other records
         required for tax):

         (i)      have been fully,  properly and accurately  maintained,  are in
                  the  possession  of the relevant  company and contain true and
                  accurate records of all matters including those required to be
                  entered in them by applicable laws and no notice or allegation
                  that any of the same is incorrect  or should be rectified  has
                  been received;

         (ii)     do  not  contain  or  reflect  any  material  inaccuracies  or
                  discrepancies;

         (iii)    give and  reflect  a true and fair view of the  matters  which
                  ought to appear in them and in  particular  of the  financial,
                  contractual and trading  position of the relevant  company and
                  of its  plant and  machinery,  fixed and  current  assets  and
                  liabilities (actual and contingent), debtors and creditors and
                  stock-in trade; and

         (iv)     contain  accurate  information  in accordance  with  generally
                  accepted  accounting  principles  in the PRC  relating  to all
                  transactions to which any member of the Group has been a party
                  and the  Accounts do not  overstate  the value of any asset or
                  understate  any  liability  of the Group at the Balance  Sheet
                  Date.


6.       POST BALANCE SHEET DATE EVENTS

         Since the Balance Sheet Date, each member of the Group:

(A)      Business

         has  carried  on its  business  in the  ordinary  and usual  course and
         without entering into any transaction, assuming any liability or making
         any  payment  not  provided  for in the  Accounts  which  is not in the
         ordinary course of business and without any  interruption or alteration
         in the  nature,  scope or manner of its  business  and nothing has been
         done which would be likely to prejudice  the interests of the Purchaser
         as a prospective purchaser of the Sale Interests;

(B) Financial position and prospects

         has not  experienced  any  deterioration  in its  financial  or trading
         position or  prospects or turnover or suffered  any  diminution  of its
         assets  by the  wrongful  act of any  person  and the  value of its net
         assets is not less than the value of its net  assets as at the  Balance
         Sheet Date as shown by the  Accounts  and each  member of the Group has
         not had its business,  profitability or prospects adversely affected by
         the loss of any  important  customer  or  source  of  supply  or by any
         abnormal factor not affecting  similar  businesses to a like extent and
         there are no facts which are likely to give rise to any such effects;

(C) Assets and liabilities

         has not  acquired or disposed of or agreed to acquire or dispose of any
         assets  or  assumed  or  incurred  or  agreed  to  assume  or incur any
         liabilities  (actual  or  contingent)  otherwise  than in the  ordinary
         course of business;

(D) Distributions and loan repayments

         has  not  declared,   made  or  paid  any  dividend,   bonus  or  other
         distribution of capital or income (whether a qualifying distribution or
         otherwise) and (excluding  fluctuations in overdrawn  current  accounts
         with  bankers)  no loan or loan  capital of any member of the Group has
         been  repaid in whole or in part or has  become  due or is liable to be
         declared  due by reason of either  service of a notice or lapse of time
         or otherwise howsoever;

(E) Liability to tax

         has not carried out or entered into any  transaction and no other event
         has occurred in  consequence  of which  (whether alone or together with
         any one or more  transactions or events occurring  before,  on or after
         the date of this  Agreement) any liability of the Group to Taxation has
         arisen or will arise (or would have  arisen or would or might arise but
         for the  availability  of any relief,  allowance,  deduction or credit)
         other than profits tax on the actual  income (not  chargeable  gains or
         deemed  income)  of the  relevant  member  of the  Group  arising  from
         transactions entered into in the ordinary course of business;

(F)      Employees

         has not made  any  change  to the  remuneration,  terms of  employment,
         emoluments  or pension  benefits  of any  present  or former  director,
         officer  or  employee  of the Group who on the  Balance  Sheet Date was
         entitled to  remuneration  in excess of US$10,000 (or its equivalent in
         any other  currency)  per annum and has not  appointed  or employed any
         additional director, officer or employee entitled as aforesaid;

(G)      Debts

         has not  waived or  released  any debts in whole or in part and has not
         written off debts in an amount  exceeding  US$10,000 (or its equivalent
         in any other currency) in the aggregate;

(H)      Contracts

         has not entered into  contracts  involving  capital  expenditure  in an
         amount  exceeding in the aggregate  US$10,000 (or its equivalent in any
         other currency);

(I)      Resolutions

         has not passed any resolution whether in general meeting or otherwise;

(J) Third party rights

         has not become  aware that any event has occurred  which would  entitle
         any third party to terminate any contract or any benefit  enjoyed by it
         or call in any money before the normal due date therefor;

(K) Stock-in-trade

         has not purchased stocks in quantities or at prices materially  greater
         than was its practice prior to the Balance Sheet Date;

(L)      Creditors

         has paid its creditors  within the times agreed with such creditors and
         does not have any debts  outstanding  which are  overdue for payment by
         more than four weeks;

(M)      Borrowings

         has not  borrowed or raised any money or taken any  financial  facility
         (except  such  short  term  borrowings  from  bankers as are within the
         amount of any  overdraft  facility  which was available to the relevant
         member of the Group at the  Balance  Sheet  Date) or since the  Balance
         Sheet Date  renegotiated  or  received  any notice from any banker that
         such banker wishes to renegotiate any overdraft  facility  available to
         the Group at the Balance Sheet Date;

7.       TRANSACTIONS WITH VENDORS, DIRECTORS AND CONNECTED PERSONS

(A) Loans and debts

         There is not outstanding:

         (i)      any  indebtedness  or other  liability  (actual or contingent)
                  owing by the Company to any of the Vendors or any  director or
                  supervisor of the Company or any of its  Connected  Persons or
                  owing to the Company by any of the Vendors or any  director or
                  supervisor of the Company or any of its  respective  Connected
                  Persons; or

         (ii)     any  guarantee  or  security  for  any  such  indebtedness  or
                  liability as aforesaid.

(B) Contracts and arrangements

         (i)      There is not now  outstanding,  any agreement,  arrangement or
                  understanding  (whether  legally  enforceable or not) to which
                  the Company is a party or has an interest  and in which any of
                  the Vendors,  or any director or  supervisor of the Company or
                  any of its Connected Persons is interested whether directly or
                  indirectly.

         (ii)     The Company is not a party to nor has its profits or financial
                  position  during  the  last  3  years  been  affected  by  any
                  agreement  or  arrangement  which is not  entirely of an arm's
                  length nature.

(C)      Competitive interests

         None of the Vendors nor any director or  supervisor  of the Company nor
         any of its Connected Persons intends to acquire, either individually or
         collectively,  or with any other  person or  persons,  has any  estate,
         right or interest,  directly or indirectly,  in any business other than
         that now  carried on by the Group which is or is likely to be or become
         competitive with the business of any member of the Group.

(D)      Intellectual Property

         None of the Vendors nor any director or  supervisor  of the Company nor
         any of its Connected Persons either individually,  collectively or with
         any other person or persons are interested in any way whatsoever in any
         Intellectual Property used and/or not wholly owned by the Group.

(E)      Benefits

         None of the Vendors nor any director or  supervisor  of the Company nor
         any of its Connected Persons, is entitled to or has claimed entitlement
         to any remuneration, compensation or other benefit from the Group.

8.       FINANCE

(A)      Borrowings

         (i)      The amount  borrowed by the Company  from its bankers does not
                  exceed the overdraft facility agreed with such banker.

         (ii)     The total amount  borrowed by the Company from any source does
                  not exceed any  limitation on its  borrowing  contained in its
                  articles  of  association  or in any  debenture  or loan stock
                  trust deed or instrument or any other document executed by it.

         (iii)    No member of the Group has any  outstanding  loan  capital  or
                  loan stock.

         (iv)     Particulars  of all money borrowed by each member of the Group
                  have been disclosed.

(B) Debts owed to each member of the Group

         (i)      No member of the Group owns the  benefit of any debt  (whether
                  present or future)  other than debts which have  accrued to it
                  in the ordinary course of business.

         (ii)     All debts owed to the Company are  collectable in the ordinary
                  course of business and each such debt will realise in full its
                  face value within three months of its due date for payment.

         (iii)    The debts owing to the Company shown in the Accounts  (subject
                  to any  provision  for  bad  and  doubtful  debts  made in the
                  Accounts) were paid in full on their due dates or, if any such
                  debts are not yet due,  each such debt is not now  regarded by
                  the Company or by the Vendors as  irrecoverable in whole or in
                  part.

(C)      Bank accounts

         Particulars of the balances on all bank accounts of the Company as at a
         date not more than seven days  before the date of this  Agreement  have
         been  disclosed and the Company has no other bank  accounts;  since the
         date of such  particulars  there have been no payments  out of any such
         bank accounts except for routine payments and the aggregate  balance on
         all  such  bank  accounts  is  not  substantially  different  from  the
         aggregate balance shown in such particulars.

(D) Working capital requirements

         Having regard to the existing banking and other facilities, the Company
         has sufficient  working  capital for the purpose of continuing to carry
         on its  business  in its  present  form  and at its  present  level  of
         turnover for the foreseeable  future and for the purposes of executing,
         carrying out and fulfilling in accordance  with their terms all orders,
         projects  and  contractual  obligations  which have been placed with or
         undertaken by the Company.

(E)      Financial facilities

         In  relation  to any  Encumbrance  to which  any  asset of the Group is
         subject and in relation to debentures,  acceptance  lines,  overdrafts,
         loans or other  financial  facilities  outstanding  or available to the
         Group:

         (i)      the Vendors have  disclosed  full details of them and true and
                  correct copies of all documents relating to them; and

         (ii)     none of the  Vendors  nor any  member  of the  Group  has done
                  anything  whereby the  continuance of any such  encumbrance or
                  facility  in full  force  and  effect  might  be  affected  or
                  prejudiced.

(F) Options, guarantees etc.

         The  Company  is not  responsible  for the  indebtedness  of any  other
         person,  and in particular  but without  prejudice to the generality of
         the  foregoing is not a party to any option or  pre-emption  right or a
         party to any guarantee or suretyship or any other obligation  (whatever
         called) to pay,  purchase or provide  funds  (whether by the advance of
         money,  the purchase of or subscription  for shares or other securities
         or the purchase of assets or services or otherwise) for the payment of,
         or as an indemnity  against the  consequence  of default in the payment
         of, any indebtedness of any other person.


9.       TAXATION

(A)      General

         (i)      Notices and returns

                  All notices,  returns and  computations of the Company for the
                  purposes of  Taxation  have been made  punctually  on a proper
                  basis and are correct and none of them is, or is likely to be,
                  the subject of any dispute with any fiscal authority.

         (ii)     Payment of tax due

                  All  Taxation  that the  Company  is  liable  to pay  prior to
                  Completion has been or will be so paid prior to Completion.

         (iii) Penalties or interest on tax

                  No member  of the  Group has paid or become  liable to pay any
                  penalty,  fine or interest charged by virtue of the provisions
                  of any Taxation statute, law, rule or regulation.

         (iv) Compliance with tax collection obligations

                  (a)      All tax  deductible  and payable  under any  Taxation
                           statute,  law, rule or  regulation  has, so far as is
                           required  to be  deducted,  been  deducted  from  all
                           payments  made or treated as made by the  Company and
                           all amounts due to be paid to all  relevant  Taxation
                           authorities  prior to the date of this Agreement have
                           been so paid.

                  (b)      All payments by the Company to any person which ought
                           to have been made under deduction of tax have been so
                           made and the relevant  company (if required by law to
                           do so) has accounted to the relevant fiscal authority
                           for the tax so deducted.

                  (c)      Proper records have been maintained in respect of all
                           such  deductions  and  payments  and  all  applicable
                           regulations have been complied with.

         (v) No back duty investigation

                  The  Company has not in the last 3 years been the subject of a
                  discovery,  audit or investigation  by any Taxation  authority
                  and there are no facts which are likely to cause a  discovery,
                  audit or investigation to be made.

         (vi)     Tax provision

                  Full  provision  or reserve has been made in the  Accounts for
                  all Taxation  assessed or liable to be assessed on the Company
                  or for which it is accountable  in respect of income,  profits
                  or gains earned,  accrued or received on or before the Balance
                  Sheet Date, including  distributions made down to such date or
                  provided for in the  Accounts,  and proper  provision has been
                  made in the Accounts for deferred  taxation in accordance with
                  internationally accepted accounting standards.

         (vii) Anti-avoidance provisions

                  The Company has not entered into or been a party to any scheme
                  or arrangement  of which the main purpose,  or one of the main
                  purposes,  was the  avoidance of or the reduction in liability
                  to taxation.

         (viii) Calculation of tax liability

                  The  Company  has  sufficient   records  to  permit   accurate
                  calculation  of the tax  liability or relief which would arise
                  upon a disposal or  realisation  on  completion  of each asset
                  owned by the Company at the Balance  Sheet Date or acquired by
                  the Company before Completion.


         (ix) Sales at under-value or over-value

                  The Company has not been a party to any sale or other disposal
                  of an asset either at an under-value or an over-value.


10.      THE PROPERTIES

         No member of the Group has owned any real properties.


11.      OTHER ASSETS

(A) Assets and charges

         (i)      All assets of the Company  which are  included in the Accounts
                  or have  otherwise  been  represented as being the property of
                  the  Company or which were at the  Balance  Sheet Date used or
                  held for the  purposes  of its  business  were at the  Balance
                  Sheet Date in the absolute beneficial ownership of the Company
                  and (except for assets  disposed of or realised by the Company
                  in  the  ordinary  course  of  business)  the  Company  is the
                  absolute beneficial owner of and has good, marketable title to
                  all such assets and all such assets are in the  possession and
                  control of the Company and are sited within the PRC.

         (ii)     All assets which have been  acquired by the Company  since the
                  Balance  Sheet  Date  are  (except  as  aforesaid)  now in the
                  absolute  beneficial  ownership  of  the  Company  and  in the
                  possession  and control of the Company and none is the subject
                  of any Encumbrance (excepting only liens arising in the normal
                  course of trading)  nor has the  Company  created or agreed to
                  create  any   encumbrance   or  entered  into  any   factoring
                  arrangement,  hire-purchase,  conditional  sale or credit sale
                  agreement  which has not been  disclosed and in respect of any
                  such encumbrance,  arrangement or agreement so disclosed there
                  has been no  default  by the  Company  in the  performance  or
                  observance of any of the provisions thereof.

(B) Condition of assets

         The plant and machinery  (including  fixed plant and machinery) and all
         vehicles  and  office  and  other  equipment  and  assets  shown in the
         Accounts or acquired  since the Balance Sheet Date or otherwise used in
         connection  with  the  business  of the  Company  which  have  not been
         disposed of in the ordinary course of business:

         (i)      do not  contravene any  requirement or restriction  having the
                  force of law;

         (ii)     performs in accordance with its  manufacturers  specifications
                  and  are in  good  repair  and  condition  and  are  regularly
                  maintained, fully serviceable and in good working order;

         (iii)    are each  capable  of  doing  the work  for  which  they  were
                  designed and/or purchased and will each be so capable (subject
                  to fair wear and tear)  during  the  period of time over which
                  the value of such  assets  will be written  down to nil in the
                  accounts of the Company;

         (iv)     are not surplus to the Company's requirements; and

         (v)      are not dangerous, inefficient,  out-of-date, unsuitable or in
                  need of renewal or  replacement  and the vehicles owned by the
                  Company are road-worthy and duly licensed for the purposes for
                  which they are used.

         (vi)     Maintenance  contracts are in full force and effect in respect
                  of the  computer  and all  other  assets  owned or used by the
                  Company  which it is normal or prudent to have  maintained  by
                  outside or specialist contractors.

(C) Condition of stock-in-trade

         The  Company's  stock-in-trade  is  of  merchantable  quality  and  not
         obsolete,  defective  or out of fashion and is capable of being sold by
         the Company in the ordinary  course of business in accordance  with its
         current price list without rebate or allowance to retail purchasers.

(D)      Insurance

         (i)      All the assets of the Company which are of an insurable nature
                  have at all  material  times  been and are at the date  hereof
                  fully insured to their full replacement value against fire and
                  other risks normally insured against by companies  carrying on
                  similar  businesses or owning  property of a similar nature to
                  those of the Company and the Company has at all material times
                  been and is at the date of this Agreement  adequately  covered
                  against all legal liability and risks normally insured against
                  by such companies  (including  liability to employees or third
                  parties  for  personal  injury or loss or damage to  property,
                  product liability and loss of profit).

         (ii)     Particulars of all policies of insurance of the Company now in
                  force have been  disclosed and such  particulars  are true and
                  correct and all premiums due on such  policies  have been duly
                  paid and all such  policies are valid and in force and (so far
                  as the  Company  and  the  Vendors  are  aware)  there  are no
                  circumstances  which  might lead to any  liability  under such
                  insurance  being avoided by the insurers or the premiums being
                  increased and there is no claim  outstanding under such policy
                  nor are the Company and the Vendors aware of any circumstances
                  likely  to give  rise to a claim or cause an  application  for
                  renewal of such policy to be refused.

         (iii)    No insurance company has refused to insure the assets or risks
                  of the Company or has imposed  conditions (by way of increased
                  premiums or otherwise) for such insurance.

(E) Retention of title

         The Company has not acquired or agreed to acquire any material asset on
         terms that title to such asset does not pass to the Company  until full
         payment is made.

(F) Equipment leases etc

         Rentals  payable by the Company  under any  leasing,  hire-purchase  or
         other  similar  agreement  to which it is a party have not been and are
         not likely to be increased and all such rentals are fully deductible by
         the Company for tax purposes.

12.      OPERATION

(A) Licences, permits, consents and authorities

         The Company has all necessary licences (including  statutory licences),
         permits,  consents and authorities  (public and private) for the proper
         and  effective  carrying on of its  business and in the manner in which
         such  business  is now  carried  on and  all  such  licences,  permits,
         consents  and  authorities  are  valid and  subsisting  and none of the
         Vendors  knows  of any  reason  why any of them  should  be  suspended,
         cancelled or revoked  whether in connection with the acquisition of the
         Sale  Interests by the Purchaser or otherwise and so far as the Vendors
         are aware  there are no  factors  that might in any way  prejudice  the
         continuance or renewal of any of those licences,  permits,  consents or
         authorities and the Company is not restricted by contract from carrying
         on any activity in any part of the world.

(B) Litigation and arbitration

         The Company is not engaged in (nor are any of its  director in relation
         to the  affairs  of the  Company  engaged  in)  any  legal  proceedings
         (including litigation, administrative, arbitration and prosecution) and
         no such proceedings are pending or threatened,  nor are there any facts
         likely  to give  rise to such  proceedings  known  or  which  would  on
         reasonable enquiry be known to the Company or its directors.

(C) Delegation of powers

         There are in force no powers of  attorney  given by the Company nor any
         other authority  (express,  implied or ostensible) given by the Company
         to any person to enter into any contract or  commitment  or do anything
         on its  behalf  other than any  authority  of  employees  to enter into
         routine trading contracts in the normal course of their duties.

(D)      Confidentiality

         No  disclosure  has been made of any of the  confidential  information,
         including  financial or trade secrets,  of any member of the Group save
         in the ordinary  course of business and the Company has taken  adequate
         steps to preserve the confidential nature of all such information.

(E)      Business names

         The  Company  does  not use on its  letterhead,  books or  vehicles  or
         otherwise carry on its business under any name other than its corporate
         name.

(F)      Records of the Group

         (i)      All the  accounting  records,  statutory  and other  books and
                  records  (including the register of members),  and other deeds
                  documents records, data and information of the Company and its
                  pension and benefit  schemes (if any) are,  and have since its
                  incorporation been, kept up to date, properly,  accurately and
                  consistently  completed and are a complete and accurate record
                  of all acts and transactions of the Company and of all matters
                  required  by law or best  business  practice to be recorded or
                  registered   therein;   the  Company  has  not   received  any
                  application or request for rectification of any such registers
                  are in the possession of the Company.

         (ii)     The  Company  has  no  records,  systems,  controls,  data  or
                  information   recorded,   stored,   maintained,   operated  or
                  otherwise  wholly or partly  dependent on or held by any means
                  (including any electronic,  mechanical or photographic process
                  whether  computerised  or not) which  (including  all means of
                  access  thereto  and  therefrom)  are not under its  exclusive
                  ownership and direct control.

(G) Winding up, insolvency and receivership

         (i)      No order has been made or  petition  presented  or  resolution
                  passed for the  winding  up of the  Company  and no  distress,
                  execution  or  other  process  has been  levied  on any of its
                  assets.

         (ii)     The  Company is not  insolvent  nor unable to pay its debts as
                  they fall due.

         (iii)    No  administrative or other receiver has been appointed by any
                  person of the  business  or assets of the  Company or any part
                  thereof, nor has any order been made or petition presented for
                  the appointment of an administrator in respect thereof.

(iv)  There has been no delay by the  Company  in the  payment  of any  material
obligation due for payment.

(H) Guarantees, warranties and sureties

         (i)      The  Company has not given any  guarantee  or warranty or made
                  any  representation  in respect of articles  or trading  stock
                  sold  or  contracted  to  be  sold  or  service   provided  or
                  contracted  to be  provided  by it save  for any  warranty  or
                  guarantee  implied  by law and  (save  as  aforesaid)  has not
                  accepted any  liability or  obligation  to service,  maintain,
                  repair,  take  back  or  otherwise  do or not do  anything  in
                  respect of any  articles,  stock or service  that would  apply
                  after any such  article or stock has been  delivered  by it or
                  service performed by it, as the case may be.

         (ii)     No person other than the Company has given any guarantee of or
                  security for any overdraft,  loan or loan facility  granted to
                  the Company.

13.      CONTRACTS

(A)      Onerous contracts

         There are no long term contracts (i.e.  contracts not terminable by the
         Company  without  penalty on six months'  notice or less) or onerous or
         unusual or abnormal contracts (i.e.  contracts for capital  commitments
         or contracts  differing from those  necessitated by the ordinary course
         of business)  binding  upon the Company,  nor is the Company a party to
         any contract which contains any onerous or other provision material for
         disclosure  to an  intending  purchaser  of the Sale  Interests  and no
         expenses or liabilities of a material  amount have been incurred before
         the  date of this  Agreement  by the  Company  otherwise  than  for the
         purpose of the Company's business.

(B)      Material contracts

         Copies of all  material  contracts to which the Company is a party have
         been  disclosed or will be disclosed  to the  Purchaser  during the due
         diligence to be conducted  by the  Purchaser  pursuant to Clause 3.3 of
         the Agreement and, save as those disclosed,  the Company is not a party
         to or subject to any agreement,  transaction,  obligation,  commitment,
         understanding, arrangement or liability which:

         (i)      is incapable of complete  performance  in accordance  with its
                  terms within six months after the date on which it was entered
                  into or undertaken;

         (ii)     is known by any of the Vendors to be likely to be unprofitable
                  or  result  in  a  loss  to  the  Company  on   completion  of
                  performance;

         (iii)    cannot  readily be  fulfilled  or  performed  by the  relevant
                  member  of the  Group on time  and  without  undue or  unusual
                  expenditure of money and effort;

         (iv)     involves  or is likely to involve  obligations,  restrictions,
                  expenditure or receipts of an unusual,  onerous or exceptional
                  nature and not in the ordinary course of business;

         (v)      requires an aggregate  consideration payable by the Company in
                  excess of US$10,000 (or its equivalent in any other currency);

         (vi)     is a contract  for  services  (other  than  contracts  for the
                  supply of electricity or normal office services);

         (viii)   requires  any  member of the  Company  to pay any  commission,
                  finder's fee, royalty or the like; or

         (ix)     is in any way otherwise than in the ordinary and proper course
                  of the Company's business.

(C) Performance of contracts

         (i)      The terms of all  contracts of the Company have been  complied
                  with by the Company and by the other  parties to the contracts
                  in all respects and there are no circumstances  likely to give
                  rise to a default by the Company or by the other parties under
                  any such contract.

         (ii)     All the  contracts  of the Company  except  those  between the
                  Company  and  its  employees  are  assignable  by the  Company
                  without the consent of any other party.

         (iii)    There  are  no  outstanding  claims,   separately  or  in  the
                  aggregate of material amounts, against the Company on the part
                  of customers or other parties in respect of defects in quality
                  or  delays  in  delivery  or   completion   of   contracts  or
                  deficiencies of design or performance or otherwise relating to
                  liability  for  goods  or  services  sold or  supplied  by the
                  Company and no such claims are threatened or  anticipated  and
                  there is no matter or fact in  existence  in relation to goods
                  or services  currently  sold or supplied by the Company  which
                  might give rise to the same.

         (iv)     The Company has no knowledge of the  invalidity  of or grounds
                  for  rescission,  avoidance or repudiation of any agreement or
                  other  transaction  to which it is a party and has received no
                  notice of any  intention to  terminate,  repudiate or disclaim
                  any such agreement or other transaction.

(D)      Restrictive contracts

         There are no agreements in force restricting the freedom of the Company
         to provide  and take goods and  services  by such means and from and to
         such persons as it may from time to time think fit.

(E) Agency and distributorship agreements

         Save as disclosed,  the Company is not a party to any subsisting agency
or distributorship agreement.

14.      EMPLOYEES

(A)      There is no current  contract of service between the Company and any of
         its  directors,  officers or employees  which is not  terminable by the
         Company  without  compensation  by three months notice or less given at
         any time or payment of salary for such period in lieu of notice.

(B)      Save as regards any scheme  which the Company is or may become  obliged
         to join or subscribe under any applicable law or regulations,  there is
         no scheme or fund in respect of retirement,  pension, health insurance,
         housing, bonus, incentive, share option or other benefits to directors,
         officers, staff, employees or any other party to which the Company is a
         party or in respect of which there is any  obligations or  liabilities,
         present or future, actual or contingent.

(C)      The Company is not subject to or involved in any industrial  dispute or
         action whether official or unofficial.

15.      INTELLECTUAL PROPERTY

(A)      Ownership and rights

         (i)      General

                  Full  particulars  of  all  Intellectual   Property  owned  or
                  otherwise  exploited or used by the Company in any part of the
                  world  will  be  disclosed  to the  Purchaser  during  the due
                  diligence to be conducted by the Purchaser.  All  Intellectual
                  Property  exploited  or used by the Company is in the absolute
                  beneficial ownership of the Company or any member of the Group
                  is a 1icensee of the same and the Company  does not own,  use,
                  exploit  or  have  any  other  interest  in  any  Intellectual
                  Property  which  has not been  disclosed.  In  particular  but
                  without prejudice to the generality of the foregoing,  none of
                  the  Intellectual  Property  disclosed is jointly owned by the
                  Company and a third party.

         (ii)     Enforcement

                  All applications for any Intellectual  Property owned, used or
                  otherwise  exploited  by  the  Company  are  being  diligently
                  prosecuted;  patents,  registered  trademarks  and  registered
                  designs and other similar registered or recorded  Intellectual
                  Property  rights  owned,  used or  otherwise  exploited by the
                  Company  have  been  maintained;  nothing  has  been  done  to
                  diminish or otherwise  affect the  reputation of  unregistered
                  trademarks,  trade names, brand names or get up owned, used or
                  otherwise exploited by the Company; no copying or reproduction
                  of the copyright  material owned, used or otherwise  exploited
                  by  the  Company   has  been   permitted   (expressly   or  by
                  implication);  the  technical  information  and other  knowhow
                  owned,  used or  otherwise  exploited  by the Company has been
                  kept  confidential;  and (where  applicable) all  application,
                  registration and renewal fees necessary to procure,  register,
                  record or maintain the Intellectual Property have been paid.

         (iii)    Intellectual Property Agreements

                  All agreements in relation to any  Intellectual  Property used
                  or owned by the Company have been  disclosed and are valid and
                  binding; none has been the subject of any breach or default by
                  any party  thereto or of any event  which with notice or lapse
                  of time or both would constitute a default;  nor are there any
                  disputes,  claims or proceedings arising out of or relating to
                  such  agreements.  No member of the  Group has  authorised  or
                  otherwise  permitted,  expressly  or by  implication,  any use
                  whatsoever  of  the  Intellectual   Property  owned,  used  or
                  otherwise  exploited  by the Group  save  insofar  as any such
                  authority  is  contained in the  appropriate  agreements.  The
                  Company  does not use or  otherwise  exploit any  Intellectual
                  Property  belonging  to a third  party  save  insofar as it is
                  licensed  to do so in the  appropriate  agreements.  All  such
                  agreements  have been duly  recorded  or  registered  with the
                  proper authorities whenever a requirement to do so exists.

16.      CONSEQUENCE OF THE PURCHASE OF THE SALE INTERESTS

         The purchase of the Sale Interests by the Purchaser or compliance  with
         the terms of this Agreement and any change in the current management of
         the Company:

         (i)      will not cause the Company to lose the benefit of any right or
                  privilege it presently enjoys or cause any person who normally
                  does business with the Company not to continue to do so on the
                  same basis as previously;

         (ii)     will not relieve any person of any  obligation  to the Company
                  (whether  contractual  or  otherwise)  or enable any person to
                  determine any such  obligation or any right or benefit enjoyed
                  by the  Company  or to  exercise  any right  whether  under an
                  agreement with or otherwise in respect of the Company;

         (iii)    will  not  conflict  with  or  result  in  the  breach  of  or
                  constitute  a default  under any of the terms,  conditions  or
                  provisions of any agreement or instrument to which the Company
                  is now a party  or any  loan  to or  mortgage  created  by the
                  Company or of its memorandum or articles of association;

         (iv)     will not result in any present or future  indebtedness  of the
                  Company  becoming due and payable or capable of being declared
                  due and payable prior to its stated maturity;

         (v)      will not cause any director,  supervisor or senior employee of
                  the Company to leave employment;

         (vi)     will not conflict  with,  violate or result in a breach of any
                  law,  regulation,  order,  decree  or writ  applicable  to the
                  Company; and

         so far as the Company and the Vendors are aware the attitude or actions
         of clients, customers and suppliers with regard to the Company will not
         be prejudicially affected thereby.





<PAGE>


                                   SCHEDULE 4

                         Addresses and facsimile numbers
                                for communication



<PAGE>


IN WITNESS  whereof this  Agreement has been duly executed by all parties hereto
the day and year first above written.


SIGNED by                                   )
(2)UA<172><180>(0)                                    )
in the presence of:                         )



SIGNED by                                   )
(2)UAuO0                                               )
in the presence of:                         )


SIGNED by                                   )
OU1/4ae|                                               )
in the presence of:                         )



SIGNED by                                   )
AEEE3/4O                                      )
in the presence of:                         )



SIGNED by                                   )
for and on behalf of                        )
HARTCOURT CAPITAL, INC.    )
in the presence of:                         )