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                                                                    EXHIBIT 2.15



                                                                (EXECUTION COPY)



                              DATE June 29th, 2004
                              --------------------




                  (1)   HARTCOURT CHINA INC AND MR. LEE LU PING


                        (as Vendors)

                                       AND

                  (2)   FIRST INFORMATION TECHNOLOGY LIMITED

                        (as Purchaser)


               --------------------------------------------------

                                A G R E E M E N T

                       FOR SALE AND PURCHASE OF SHARES IN

                      HOPEFUL INTERNET TECHNOLOGIES LIMITED

               --------------------------------------------------


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This AGREEMENT is entered into on June 29th, 2004

AMONG:

(l)   HARTCOURT CHINA INC, a company incorporated in the British Virgin Islands
      and whose registered address is P O Box 957, Offshore Incorporations
      Centre, Road Town, Tortola, British Virgin Islands and whose business
      address is Suite B, 19/F., Ritz Plaza, 122 Austin Road, Tsimshatsui, Hong
      Kong ("HARTCOURT"); and

(2)   MR. LEE LU PING (PERSONAL IDENTITY CARD NO.          ) WHOSE RESIDENTIAL
      ADDRESS IS SITUATED AT

      ("Mr Lee", together with Hartcourt the "Vendors"); and

(2)   FIRST INFORMATION TECHNOLOGY LIMITED, a company incorporated in the
      British Virgin Islands and whose registered address is P O Box 957,
      Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
      and business address is 19/F., Wing On House, No. 71 Des Voeux Road
      Central, Hong Kong (the "PURCHASER").


RECITALS:

A.    The Company is established under the laws of the British Virgin Islands
      whose particulars are set out in Schedule 1.

B.    The Vendors are the legal and beneficial owners of the Company.

C.    The Vendors are desirous to sell and the Purchaser is desirous to purchase
      the entire equity capital of the Company on the terms and conditions set
      out in this Agreement.


NOW IT IS AGREED as follows:

1.    DEFINITIONS AND INTERPRETATION

1.1   Definitions

      In this Agreement, unless the context otherwise requires, the following
      words and expressions shall have the following meanings:

      "Accounting Date"                 means 31st December, 2003;

      "Accounts"                        means the audited consolidated accounts
                                        of the Company comprising the balance
                                        sheet of the Company and the
                                        consolidated balance sheet of the
                                        Company as at the Accounting Date, the
                                        profit and loss account of the Company
                                        and the consolidated profit and loss
                                        account of the Company for the financial
                                        year ended on the Accounting Date, the
                                        notes thereto and the directors' and
                                        auditors' reports thereon;


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      "Business Day"                    means a day on which banks in Hong Kong
                                        are open for business (except Saturdays,
                                        Sundays, public holidays in Hong Kong
                                        and a day when the typhoon signal number
                                        8 is raised or black rain storm warning
                                        is issued and is not lowered before 2
                                        p.m. of such alert);

      "BVI"                             means the British Virgin Islands;

      "Company"                         means Hopeful Internet Technologies
                                        Limited, a company established under the
                                        laws of the BVI;

      "Companies Ordinance"             means the Companies Ordinance (Cap. 32
                                        of the Laws of Hong Kong);

      "Completion"                      means the completion of the sale and
                                        purchase of the Sale Shares pursuant to
                                        Clause 6;

      "Completion Date"                 means the seventh (7th) Business Day
                                        after the conditions set out in Clause
                                        4.1 are fulfilled (or such other date as
                                        the Vendors and the Purchaser may agree
                                        in writing prior to Completion);

      "Consideration"                   means HK$3,622,881, the consideration
                                        for the Sale Shares which is to be
                                        settled in the manner set out in Clause
                                        5;

      "Consideration Shares"            means 2,179 ordinary shares of US$0.01
                                        each in the share capital of the
                                        Purchaser to be issued to the Vendors on
                                        Completion, pursuant to Clause 5;

      "Director"                        means a director from time to time
                                        appointed by the Company;

      "Disclosure Letter"               means the letter of even date issued by
                                        the Vendors to the Purchaser in the
                                        agreed form;

      "Encumbrances"                    means and includes any option, right to
                                        acquire, right of pre-emption, mortgage,
                                        charge, pledge, lien, hypothecation,
                                        title retention, right of set off,
                                        counterclaim, trust arrangement or other
                                        security or any equity or restriction;


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      "HK$"                             means Hong Kong dollars, the lawful
                                        currency of Hong Kong;

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

      "Intellectual Property Rights"    means the rights in respect of any
                                        patents, trade marks, service marks,
                                        applications for any of the foregoing,
                                        copyright, design rights, know-how,
                                        confidential information, trade secrets,
                                        trade and business names and any other
                                        similar protected rights owned by or
                                        belonging to the Company and its
                                        subsidiaries from time to time in any
                                        country;

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

      "PRC" or "China"                  means the People's Republic of China,
                                        for the purpose of this Agreement,
                                        excluding Hong Kong, Macau and Taiwan;

      "US$"                             means United States dollars, the lawful
                                        currency of the United States of
                                        America;

      "Sale Shares"                     means all the equity capital of the
                                        Company;

      "Stock Exchange"                  means The Stock Exchange of Hong Kong
                                        Limited;

      "Taxation"                        means and includes all forms of tax,
                                        rate, levy, duty, charge, impost, fee,
                                        deduction or withholding of any nature
                                        now or hereafter imposed, levied,
                                        collected, withheld or assessed by any
                                        taxing or other authority in the PRC and
                                        includes any interest, additional tax,
                                        penalty or other charge payable or
                                        claimed in respect thereof;

      "Warranties"                      means the warranties, representations
                                        and undertakings given by the Vendors
                                        pursuant to Clause 7 and set out in
                                        Schedule 2 and any other
                                        representations, warranties and
                                        indemnities made by or on behalf of the
                                        Vendors in this Agreement.


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1.2   Interpretation

      In this Agreement unless the context otherwise requires:

      (a)   reference to any statute or statutory provision includes a reference
            to that statute or statutory provision as from time to time amended,
            extended or re-enacted;

      (b)   words and phrases the definitions of which are contained or referred
            to in the Companies Ordinance shall be construed as having the
            meaning thereby attributed to them but excluding any statutory
            modification thereof not in force on the date of this Agreement;

      (c)   words importing the singular include the plural, words importing any
            gender include every gender, and words importing persons include
            bodies corporate and unincorporated; and (in each case) vice versa;

      (d)   all warranties, representations, indemnities, covenants, agreements
            and undertakings given or entered into by more than one person are
            given or entered into jointly and severally, unless otherwise
            specified;

      (e)   where any Warranty is qualified by being given or made to the best
            of the knowledge, information or belief of any person giving or
            making the same or so far as that person is aware or is qualified in
            any similar way such qualification shall be deemed to be followed by
            the words "having made due and careful enquiry";

      (f)   references to the Parties, Recitals, Clauses and Schedules refer to
            the parties, the recitals, clauses of and schedules to this
            Agreement;

      (g)   references to a document being in the "agreed form" or "agreed
            terms", means a document the terms of which have been approved by or
            on behalf of the Vendors and the Purchaser and a copy of which has
            been signed for the purpose of identification by or on behalf of the
            Vendors and the Purchaser;

      (h)   headings used in this Agreement are for convenience only and shall
            not affect its interpretation.

1.3   This Agreement include the Recitals, all Clauses and Schedules as may be
      amended, varied or revised from time to time.

1.4   Time shall be of the essence in this Agreement.


2.    SALE AND PURCHASE OF SALE SHARES


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2.1   Subject to the terms of this Agreement, the Vendors as legal and
      beneficial owner shall sell and transfer or procure the transfer of the
      Sale Shares free from Encumbrances and the Purchaser shall purchase the
      Sale Shares upon Completion.

2.2   The Sale Shares are sold together with all rights attached or accruing
      thereto and together with all dividends declared and paid in respect of
      periods commencing on or after the Completion Date.

2.3   The Purchaser shall not be obliged to purchase any of the Sale Shares
      unless the sale of all the Sale Shares is completed simultaneously.

2.4   Subject to the terms of this Agreement, the Vendors covenant to do and
      execute all such acts and things as may be reasonably necessary to vest
      the Sale Shares in the Purchaser and to place the Purchaser in full
      control of the Sale Shares as from the Completion Date.


3.    TRANSFER OF METASTOCK

3.1   Subject to the terms of this Agreement, upon Completion (or as soon as
      reasonably practicable thereafter), the Vendors shall make effective
      transfer to the Purchaser all its Intellectual Property Rights of the
      Chinese translation of the software "Metastock" and its distribution right
      in the PRC. Consideration for the Metastock Project has been included in
      the total number of Consideration Shares to be issued by the Purchaser to
      the Vendors on Completion.


4.    CONDITIONS PRECEDENT

4.1   Completion is conditional upon:

      (a)   the passing of a resolution by the board of directors of Hartcourt
            China Inc approving the sale of the Sale Shares to the Purchaser and
            all terms in this Agreement and the implementation thereof;

      (b)   the passing of resolutions by the board of directors and
            shareholders of the Purchaser approving the purchase of the Sale
            Shares, the issue and allotment of the Consideration Shares and all
            terms in this Agreement and the implementation thereof;

      (c)   all necessary authorizations, orders, grants, consents, permissions
            and approvals for all transactions contemplated by this Agreement
            (including transfer of the Sale Shares to the Purchaser) having been
            obtained from, and all filings and registrations having been
            performed with, all applicable authorities, departments and bodies
            in the PRC, including without the limitation to the government
            approval, consent and permissions required in the PRC in respect of
            the Company, from appropriate governments, governmental,
            supranational or trade agencies and regulatory bodies and all such
            authorizations, and such authorizations, orders, grants, consents,
            permissions and approvals remaining in full force and effect.


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4.2   The parties shall use their respective best endeavours to ensure that the
      conditions set out in Clause 4.1 are fulfilled by 5:00 p.m. (Hong Kong
      time) on or before the date referred to in Clause 4.3.

4.3   If the conditions set out in Clause 4.1 have not been fulfilled by 5:00
      p.m. (Hong Kong time) on 15th July, 2004 or such later date as the parties
      may agree in writing, this Agreement and everything herein contained
      shall, subject to the liability of any party to the other in respect of
      any antecedent breaches of the terms hereof, be null and void and of no
      effect.


5.    CONSIDERATION

5.l   The Consideration shall be settled by the Purchaser by the issue of the
      Consideration Shares to the Vendors. The Consideration Shares shall be
      issued and allotted, credited as fully paid and free from Encumbrances to
      the Vendors in the following ratio: (Hartcourt 51%, Mr. Lee 49%.) Upon
      Completion, the Consideration Shares issued to the Vendors shall
      constitute 21.79% of the entire issued share capital of the Purchaser as
      enlarged by the issue of the Consideration Shares.

5.2   The Consideration Shares issued to the Vendors shall rank pari passu in
      all respects with the all other existing issued and allotted shares of the
      Purchaser and the Vendors shall be entitled to all rights attached or
      accruing thereto including all dividends declared and paid on or after
      Completion.


6.    COMPLETION

6.1   Completion of the sale and purchase of the Sale Shares shall take place on
      the Completion Date at the offices of the Purchaser in accordance with
      Schedule 3.

6.2   No party shall be obliged to complete the sale and purchase of the Sale
      Shares unless the other party complies fully with the requirements set out
      in Schedule 3 applicable to them respectively.

6.3   Without prejudice to any other remedies available to any party, if in
      respect of the provisions of this Agreement and in particular Schedule 3
      are not complied with by either the Vendors on the one part or by the
      Purchaser on the other part on or before the Completion Date, the party
      not in default may:

      (a)   defer Completion to a date not more than 28 days following the
            Completion Date (and so that the provisions of this Clause 6.3 (a)
            shall apply to Completion as so deferred);

      (b)   proceed to Completion so far as practicable (but without prejudice
            to its rights hereunder); or


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      (c)   rescind this Agreement without prejudice to any of its other rights
            in respect of such default.


7.    WARRANTIES, REPRESENTATIONS, AND UNDERTAKINGS

7.1   Save as disclosed in the Disclosure Letter, each of the Vendors hereby
      warrant, represent and undertake to the Purchaser the Warranties and
      acknowledges that the Purchaser is entering into this Agreement in
      reliance on the Warranties and that the Purchaser may treat them as
      conditions of this Agreement.

7.2   Save as except in this Agreement, the Vendors agree to indemnify and keep
      indemnified the Purchaser (for itself and as trustee for the Company)
      against all losses, damages, costs, actions, proceedings, claims, demands
      and expenses suffered by the Purchaser or the Company or its subsidiaries
      as a result of or in connection with any breach of any of the Warranties.

7.3   Each of the Warranties is without prejudice to each and every other
      Warranty.

7.4   The Vendors undertake to the Purchaser that it will forthwith notify the
      Purchaser in writing of any matter or thing which may arise or become
      known to them after the date of this Agreement and prior to Completion
      which is a breach of or inconsistent with any of the Warranties or other
      provisions contained in this Agreement.

7.5   In the event of the aforesaid notice is given to the Purchaser or the
      Purchaser otherwise becoming aware or it becoming apparent on or before
      Completion that any of the Warranties or any other term of this Agreement
      is incorrect or breached in any material respect, the Purchaser may
      rescind this Agreement by notice in writing to the Vendors without
      prejudice to any rights it may have in respect of the alleged breach or
      rescission hereof.

7.6   The Warranties shall remain in full force and effect after and
      notwithstanding Completion.

7.7   The Warranties are given subject to the matters disclosed in the
      Disclosure Letter, no other information relating to the Company which the
      Purchaser has knowledge whether actual or constructive shall prejudice any
      claim made by the Purchaser under the Warranties or operate to reduce any
      amount recoverable.

7.8   It is agreed between the parties that (without limitation or prejudice to
      any rights accruing to the Purchaser pursuant to any of the provisions of
      this Agreement) in the event of there being discovered a breach of any
      Warranty which was not disclosed in the Disclosure Letter, any damages or
      compensation to which the Purchaser may be entitled may, if the Purchaser
      so elects, be calculated on the following basis, that is to say there
      shall be paid to the Purchaser such sum as shall represent the diminution
      in the value of the Sale Shares as a result of such breach, plus any and
      all expenses and costs, including without limitation attorney's fees and
      expenses, to enforce this provision and to collect such sum.


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7.9   The Purchaser may take action for any breach or non-fulfillment of any of
      the same before or after Completion and in the event of action taken after
      Completion. Completion shall not in any way constitute a waiver of the
      Purchaser's rights notwithstanding that such rights may have been arisen
      or known to the Purchaser before Completion.

7.10  Notwithstanding anything contained in this Clause 7 or any other provision
      of this Agreement:

      (a)   no liability shall in any event arise in respect of any claim under
            the Warranties unless:

            (i)   the amount of a single claim exceeds HK$100,000; or

            (ii)  the amount of a single claim (when aggregated with the amount
                  of any other claim then or previously made hereunder against
                  the Vendors) exceed HKD$100,000 in which event the whole of
                  such claim and all previous claims shall be recovered in full
                  within one year.

      (b)   the aggregate liability of the Vendors in respect of all breaches
            under the Warranties shall not exceed the amount of the
            Consideration; and

      (c)   (i)   the Vendors shall not be liable for any breaches of the
                  Warranties unless on or before 3 months from the date of this
                  Agreement, the Purchaser shall have given written notice to
                  that Vendors of any claim, such notice to comply with the
                  provisions of Clause 7.10 (c) (ii);

            (ii)  Any notice of a claim for any breach of the Warranties given
                  by the Purchaser to the Vendors shall specify (in reasonable
                  detail) the matters which give rise to the breach, the nature
                  of the breach and an estimate of the amount claimed in respect
                  thereof ;

7.11  Purchaser's warranties

      The Purchaser represents and warrants to the Vendors that:

      (a)   it is a company duly incorporated and subsisting under the laws of
            BVI and has the corporate power and, subject to the fulfillment of
            the conditions in Clause 4.1, has obtained all necessary approvals,
            authorizations and consents to enter into and perform its
            obligations under this Agreement and has taken all necessary
            corporate and other action to authorize the entering into and
            performance of this Agreement;

      (b)   this Agreement constitutes the legal, valid and legally binding
            obligations of the Purchaser and are and will be fully enforceable
            against the Purchaser in accordance with their respective terms;

      (c)   the execution and delivery of ,and the performance by the Purchaser
            of its obligations under this Agreement will not:


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            (i)   result in a breach of any provision of the memorandum and
                  articles of association or bye-laws of the Purchaser; or

            (ii)  result in a breach of, or constitute a default under, any
                  instrument or agreement or contract or deed to which the
                  Purchaser is a party or by which the Purchaser is bound
                  (including any shareholder's agreement between its members in
                  respect of the Purchaser);or

            (iii) result in a breach of any law, rule or regulation or any
                  order, judgment or decree of any court or governmental,
                  regulatory, judicial or administrative body to which the
                  Purchaser is a party or by which the Purchaser is bound;

      (d)   the Purchaser through its wholly owned subsidiaries holds
            219,999,999 shares (ie.78.57% equity interest) in GTI Financial
            Information Limited ("GTI");

      (e)   subject to the fulfillment of the conditions in Clause 4.1, the
            Consideration Shares to be issued pursuant to the terms of the
            Agreement and have been duly authorized by the Purchaser and will be
            validly issued, credited as fully-paid and unencumbered and free and
            clear of any security interests, claims (including pre-emptive
            rights and other restrictions on disposals of the Consideration
            Shares), liens or encumbrances and will be freely transferable and
            will rank PARI passu in all respects with all other issued shares in
            the capital of the Purchaser then in issue;

      (f)   save for the matters and transactions contemplated in this
            Agreement, there are no ( and there will be none up to and on the
            Completion Date) outstanding options, warrants, rights (including
            conversion or preemptive rights) or agreements for the purchase,
            subscription, issue and allotment or acquisition from the Purchaser
            of any of its capital shares. Except for the existing memorandum and
            articles of association of the Purchaser as at the date hereof, the
            existing shareholder's agreement dated 3rd January 2000 between Hu
            Qing Shan, Hu Ying, Gong Hui and Huang Tong Feng as Party A,
            Illumination International Limited as Party B, Twin Tiger Limited as
            Party C, Shenzhen Genius Information Technologies Limited as Party
            D, GTI as Party E and Shenzhen Ju Lie Information Consulting Limited
            as Party F respectively and the matters and transactions
            contemplated in this Agreement, the Purchaser and/or any existing
            shareholder of the Purchaser is not a party or subject to any
            agreement or understanding which affects or relates to the voting or
            giving of written consents with respect to any shares of the
            Purchaser or by a director of the Purchaser (and will not be a party
            or subject to any of the aforesaid up to and on the Completion
            Date). Except the matters and transactions contemplated in this
            Agreement, there is no other agreement or understanding (and there
            will be none up to and on the Completion) between any persons and/or
            entities, which affects or relates to the voting or giving of
            written consents with respect to any shares of the Purchaser or by a
            director of the Purchaser;

      (g)   the particulars of the Purchaser contained in Schedule 5 are true
            and accurate in all respects;


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<PAGE>

      (h)   all returns particulars resolutions and other documents required to
            be filed with the relevant authorities in Hong Kong by the Purchaser
            have been duly filed and the Purchaser has complied with all legal
            requirements in connection with its formation and with all issues of
            its shares;

      (i)

7.12  The Purchaser shall not do or allow and shall procure that no act or
      omission shall occur before Completion which would constitute a breach of
      any of the Warranties, representations and undertakings given by the
      Purchaser in this Agreement if they were given at Completion or which
      would make any of such warranties inaccurate or misleading if they were so
      given.

7.13  In the event of it being found prior to Completion that any of the
      warranties, representations and undertakings given by the Purchaser in
      this Agreement are untrue or incorrect, or in the event of any matter or
      thing arising or becoming known or being notified to the Vendors which is
      inconsistent with any of such warranties, representations and
      undertakings, the Vendors shall not be bound to complete the sale and
      purchase of the Sale Shares and may by written notice rescind this
      Agreement without liability on its part. The right conferred upon the
      Vendors by this Clause is in addition to and without prejudice to any
      other rights of the Vendors (including any rights to claim damages or
      compensation from the Purchaser by reason of any such breach or
      non-fulfilment) and failure to exercise it shall not constitute a waiver
      of any such rights.

7.14  The Purchaser hereby undertakes to indemnify and keep indemnified the
      Vendors against any loss or liability suffered by the Vendors as a result
      of or in connection with any breach of any of the warranties,
      representations and undertakings given by the Purchaser in this Agreement
      and against any costs and expenses incurred in connection therewith
      provided that the indemnity contained in this Clause shall be without
      prejudice to any other rights and remedies of the Vendors in relation to
      any such breach. The aggregate liability of the Purchaser in respect of
      all breaches under the Warranties shall not exceed the amount of the
      Consideration, and the Purchaser shall not be liable for any breach of the
      Warranties unless on or before 3 months from the date of this Agreement,
      the Vendors shall have given written notice to that Purchaser of any
      claim, such notice shall specify (in reasonable detail) the matters which
      give rise to the breach, the nature of the breach and an estimate of the
      amount claimed in respect thereof.

7.15  The rights conferred upon the Purchaser by this Clause 7 are in addition
      to and without prejudice to any other rights of the Purchaser and failure
      to exercise it shall not constitute a waiver of any such rights
      notwithstanding that such breach or non-fulfillment may have been known to
      or discoverable by the Purchaser before Completion.

7.16  The Vendors hereby waive any and all claims against the Company and all
      its subsidiaries and their respective officers, employees, servants,
      agents and representatives in respect of any information supplied by any
      of them to the Vendors on or before the date hereof in connection with any
      of the Warranties or any matters which have been disclosed to the
      Purchaser or otherwise howsoever in relation to the business or affairs of
      the Company or any of its subsidiaries.


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<PAGE>

8.    CONFIDENTIALITY

8.1   Subject to the fulfilment of Clause 4.1, the Vendors undertake at all
      reasonable times, notwithstanding Completion, it will at the request of
      the Purchaser promptly give to the Purchaser such Information (defined in
      Clause 8.3) in its possession.

8.2   Subject to the fulfilment of Clause 4.1, the Vendors further undertake to
      the Purchaser that they will not and will procure all their respective
      officers, employees, servants, agents and representatives will not at any
      time after Completion for their own benefit or on behalf of any other
      person take away, make use of or disclose to any person (except as may be
      necessary to comply with any statutory obligation or order of any court or
      statutory tribunal of competent jurisdiction) any Information are
      confidential in any way relating to the business or affairs of the or to
      any customer, client, agent, supplier or any other person who has or has
      had any dealings with the Company.

8.3   In this Clause 8, "Information" refers to all information in the
      possession of or within the control of the Vendors or their respect
      officers, employees, servants, agents and representatives concerning the
      business, dealings, transactions or affairs of the Company and all claims
      made or threatened against the Company.

8.4   The Purchaser hereby undertakes with the Vendors that it will not, prior
      to Completion and save as required by law, make use of or disclose or
      divulge any confidential information relating to the Company obtained by
      it or its representatives pursuant to this Agreement and the transactions
      contemplated thereby to any person other than its own officers, employees
      or professional advisors.

9.    NON-COMPETITION AND NON-SOLICITATION

9.1   Subject to the fulfilment of Clause 4.1, the Vendors undertake from the
      Completion Date to the expiry of 12 months after the Completion Date, it
      will not and will procure all its respective officers, employees,
      servants, agents, associates and representatives will not for their own
      benefit or on behalf of any other person without the prior written consent
      of the Purchaser:

      (a)   carry on (whether alone or in partnership or joint venture with
            anyone else) or be concerned with or interested any business carried
            by the Company in the PRC at any time within 12 months prior to the
            Completion Date or directly or indirectly competitive with such
            business of the Company in the PRC save and except as a shareholder
            (for investment purposes only) holding not more than 5% directly or
            indirectly of the securities of a company listed on a recognized
            stock exchange;

      (b)   whether as principal, agent or servant canvass or solicit business
            from any person who was a customer, client, agent or supplier of the
            Company in the PRC during the period of 12 months immediately prior
            to Completion;


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<PAGE>

            (iii) offer employment to any person who at the date of this
                  Agreement or within 12 months prior to the Completion Date, is
                  or had been an employee of the Company in the PRC and for so
                  long thereafter as such employee shall remain in the
                  employment of the Company in the PRC or for a period of 6
                  months after leaving such employment; or

            (iv)  offer any inducement or encouragement to any such employee to
                  cease to be so employed or to seek employment with any other
                  employer or to become self-employed or to go into any
                  partnership or business on his own account in the PRC.

9.2   Each of the restrictions contained in Clause 9.l is separate and distinct
      and is to be construed separately from the other restrictions. The Vendors
      hereby acknowledge that he/it considers such restrictions to be reasonable
      both individually and in aggregate and that the duration, extent and
      application of each of such restrictions are no greater than is necessary
      for the protection of the legitimate interests of the Purchaser and that
      the Consideration paid by the Purchaser under the terms of this Agreement
      takes into account and adequately compensates them for any restriction or
      restraint imposed hereby. However, in the event that any such restriction
      shall be found to be void or unenforceable but would be valid or
      enforceable if some part or parts thereof were deleted or the period or
      area of application reduced, the Vendors hereby agree that such
      restriction shall apply with such modification as may be necessary to make
      it valid.


10.   CONDUCT OF THE COMPANY UP TO COMPLETION

10.1  Pending Completion, the Vendors undertake with the Purchaser to procure
      that the Company and its subsidiaries will NOT:

      (a)   enter into any commitment, contract or arrangement other than in the
            ordinary and proper course of its business;

      (b)   dispose of or create or permit any Encumbrances over any of its
            assets or agree so to do, other than a disposal of its stock in
            trade in the ordinary and proper course of its business;

      (c)   incur any material liabilities other than in the ordinary and proper
            course of its business;

      (d)   hire any new employee other than those general staff, alter the
            remuneration or conditions of employment or superannuation of any
            employee (except under the requirements of any award, industrial
            agreement, service contract or law) or terminate the employment of
            any employee (except for fraud or misconduct);


                                       13
<PAGE>

      (e)   allot or issue or agree to allot or issue any shares or any loan
            capital or any security convertible into share capital;

      (f)   declare or pay any dividend or make any other distribution of its
            profits;

      (g)   alter its memorandum or articles of association other than for the
            purpose of transferring the Sale Shares to the Purchaser and in the
            agreed terms; or

      (h)   change its name.

10.2  Up to Completion the Vendors shall cause the Company, at all reasonable
      times, to make all premises, plant, stock, Accounts and records available
      for the Purchaser's inspection for the purposes of this Agreement and
      allow copies of such records to be taken.


11.   INDEMNITY

11.1  The Vendors shall indemnify and hold harmless the Purchaser against each
      proceeding, judgment, loss, damage, cost, expense or liability suffered,
      incurred by or brought or made or recorded against the Purchaser, as a
      direct or indirect consequence of:

      (a)   any breach by the Vendors or any other person of any of the
            Warranties;

      (b)   any Warranty not being true and correct or being misleading as at
            the Completion Date; or

      (c)   any failure by the Vendors to duly perform any of the obligations
            imposed upon them by this Agreement.

11.2  The Vendors further acknowledge that the aforesaid indemnity:

      (a)   extends to all costs, expenses and other amounts incurred or paid by
            the Purchaser in the enforcement or purported or attempted
            enforcement of such indemnity or for the preservation of or in any
            manner in reference to the rights conferred upon the Purchaser by
            this Agreement, including legal costs as between solicitor and
            client;

      (b)   will not be abrogated, modified, prejudiced, affected or considered
            as wholly or partially discharged by any one or more of:

            (i)   any time, credit, indulgence or concession extended by the
                  Purchaser or the Company to the Vendors or any other person;

            (ii)  any compounding, compromise, release, abandonment, waiver,
                  variation, relinquishment or renewal of any rights of the
                  Purchaser or the Company against the Vendors or any other
                  person;


                                       14
<PAGE>

            (iii) the neglect or omission of the Purchaser or the Company to
                  enforce any of those rights or any delay in the enforcement of
                  any of those rights; and

            (iv)  the winding up, bankruptcy or death of any of the Vendors.

      (c)   is continuing and irrevocable and the obligations of the Vendors
            will be absolute and unconditional in all circumstances; and

      (d)   will be in addition to and not in substitution for any other
            indemnity provided under this Agreement or any other rights which
            the Purchaser or the Company may have against the Vendors from time
            to time and will not merge on Completion.


11.3  The Purchaser shall indemnify and hold harmless at all times the Vendors
      against each proceeding, judgment, loss, damage, cost, expense or
      liability suffered, incurred by or brought or made or recorded against the
      Vendors, whether before or after Completion or in respect of any period
      before or after Completion, as a direct or indirect consequence of:

      (a)   any breach by the Purchaser of any of the Warranties;

      (b)   any Warranty given by the Purchaser not being true and correct or
            being misleading as at the Completion Date; or

      (c)   any failure by the Purchaser to duly perform any of the obligations
            imposed upon them by this Agreement.

11.4  The Purchaser further acknowledges that the aforesaid indemnity:

      (a)   extends to all costs, expenses and other amounts incurred or paid by
            the Vendors in the enforcement or purported or attempted enforcement
            of such indemnity or for the preservation of or in any manner in
            reference to the rights conferred upon the Vendors by this
            Agreement, including legal costs as between solicitor and client;

      (b)   will not be abrogated, modified, prejudiced, affected or considered
            as wholly or partially discharged by any one or more of:

            (i)   any time, credit, indulgence or concession extended by the
                  Vendors or the Company to the Purchaser or any other person;

            (ii)  any compounding, compromise, release, abandonment, waiver,
                  variation, relinquishment or renewal of any rights of the
                  Vendors or the Company against the Purchaser or any other
                  person;

            (iii) the neglect or omission of the Vendors or the Company to
                  enforce any of those rights or any delay in the enforcement of
                  any of those rights; and


                                       15
<PAGE>

            (iv)  the winding up, bankruptcy or death of any of the Purchaser.

      (c)   is continuing and irrevocable and the obligations of the Purchaser
            will be absolute and unconditional in all circumstances; and

      (d)   will be in addition to and not in substitution for any other
            indemnity provided under this Agreement or any other rights which
            the Vendors or the Company may have against the Purchaser from time
            to time and will not merge on Completion.


12.   CONTINUING OBLIGATIONS

12.1  The Vendors must do nothing to discourage the Company's or its
      subsidiaries' current clients and new clients to utilize the goods and
      service of the Company's or its subsidiaries' business.

12.2  The Vendors must provide all reasonable assistance including access to any
      documents in their possession or under their power or control in relation
      to any dispute between the Company or its subsidiaries and any person.

12.3  Each obligation and warranty of a party to this Agreement (except an
      obligation fully performed at Completion) continues in force despite
      Completion.

12.4  Default

      (a)   No party to this Agreement shall be entitled to enforce any rights
            or remedies under this Agreement or at common law arising out of the
            default of any other party in performing or observing any of the
            terms and conditions of this Agreement (other than the right of any
            party to sue for any moneys already due) UNLESS the non defaulting
            party has given to the party in default ("DEFAULTING PARTY") a
            written notice specifying the default and stating his intention to
            enforce his rights and remedies unless the default is made good
            within 14 days and the Defaulting Party fails within that period to
            remedy the default. If the default is not so rectified then the
            non-defaulting party may:

            (i)   demand immediate payment to it of all moneys to be paid to it
                  by the defaulting Party pursuant to this Agreement;

            (ii)  suspend compliance with its obligations under this Agreement
                  until the default is so rectified; and

            (iii) sue for damages or seek specific performance of this Agreement
                  or any other remedy to which it might be entitled.


                                       16
<PAGE>

13.   COSTS

13.1  Each party shall bear its own legal and other costs and expenses arising
      directly or indirectly with respect to the preparation, execution,
      completion and performance of this Agreement or any other related
      documentation.

13.2  Notwithstanding the foregoing, the Vendors and the Purchaser shall bear
      any stamp duty payable in respect of the transfer of the Sale Shares in
      equal shares.

14.   NOTICE

14.1  Delivery

      All notices, demands or other communications which are required to be
      given under this Agreement shall be in writing in English and sent to:

      (a)   in the case of the Vendors:

            Vendors' Address  :       Suite 1310 China VentureTech Plaza,
                                      819 Nan Jing Xi Road, Shanghai,
                                      PRC, 200041
            Facsimile number  :       in PRC :- 86 21 5213 0664
            Attention         :       Mr David Chen

      (b)   in the case of the Purchaser:

            Address           :       19/F., Wing On House, 71 Des Voeux
                                      Road Central, Hong Kong
            Facsimile number  :       852-28106070
            Attention         :       Mr Rankine Yeung

      or to such other address or facsimile number or marked for the attention
      of such other person as the recipient may designate by notice given in
      accordance with the provisions of this Clause 14.

14.2  Receipt

      Any such notice may be delivered personally or by prepaid post or sent by
      facsimile transmission and shall be deemed to have been effectively
      served:

      (a)   on the day of receipt, where any personally delivered letter or
            facsimile message is received on any Business Day before or during
            normal working hours;

      (b)   on the following Business Day, where any personally delivered letter
            or facsimile message is received either on any Business Day after
            normal working hours or on any day which is not a Business Day;

      (c)   on the third Business Day following the day of posting, upon
            despatch from within Hong Kong of any posted letter to the address
            of a recipient in Hong Kong, unless actually received sooner; or


                                       17
<PAGE>

      (d)   on the seventh Business Day following the day of posting, upon
            despatch from within Hong Kong of any posted letter to the address
            of an overseas recipient (and vice-versa), unless actually received
            sooner.

15.   GENERAL

15.1. Assignment

      The Parties shall not be permitted to assign or transfer or purport to
      assign or transfer any of their rights or obligations under this Agreement
      without the prior written consent of the other party.

15.2. Waiver

      (a)   A failure or delay in exercising or the partial exercise of any
            provision of, or right, election or discretion under, this Agreement
            is not a waiver of that provision, right, election or discretion.

      (b)   A waiver of any such provision, right, election or discretion or of
            any breach or default under this Agreement must be in writing and
            signed by the party granting the waiver.

15.3  Variation

      A variation of any term of this Agreement must be in writing and signed by
      all Parties.

15.4  Cumulative rights

      The rights or remedies conferred on any party by this Agreement are in
      addition to all rights and remedies of that party at law or in equity.

15.5  Further assurance

      Each party will sign execute and complete all further documents necessary
      to effect, perfect or complete the provisions of and the transactions
      contemplated by this Agreement.

15.6  Severability

      If any part of this Agreement is or becomes illegal, invalid or
      unenforceable in a jurisdiction, the legality, validity or enforceability
      of the remainder of this Agreement will not be affected and this Agreement
      will be read as if that part had been deleted.

15.7  Entire understanding

      This Agreement contains the entire understanding and agreement between the
      Parties as to the subject matter of this Agreement.


                                       18
<PAGE>

15.8  Survival

      All agreements, obligations covenants and representations contained in
      this Agreement which have not been fulfilled shall unless otherwise
      expressly stated survive the execution and consummation of this Agreement
      and the transactions in relation thereto.

16.   GOVERNING LAW AND JURISDICTION

      This Agreement shall be governed by and construed in accordance with the
      laws of Hong Kong and each party shall submit to the non-exclusive
      jurisdiction of the courts of Hong Kong.

IN WITNESS whereof this Agreement has been duly executed the day and year first
before written.


The Vendors
-----------

SIGNED by                                     )
for and on behalf of Hartcourt China Inc.     )
                                              )
in the presence of :                          )

SIGNED by                                     )
Mr. Lee Luping                                )
                                              )
in the presence of :                          )



The Purchaser
-------------

SIGNED by                                     )
for and on behalf of                          )
First Information Technology Limited          )
in the presence of:                           )


                                       19
<PAGE>

                                   SCHEDULE 1

                           PARTICULARS OF THE COMPANY


A.    THE COMPANY

1.    Name                    :    Hopeful Internet Technologies Limited

2.    Registered Office       :    P.O. Box 957, Offshore Incorporations Center,
                                   Road Town, Tortola, BVI

3.    Date of Incorporation   :    January 11, 2000

4.    Place of Incorporation  :    BVI

5.    Directors               :    Stephen Tang

6.    Authorised  Capital     :    US$50,000
      Issued Capital          :    US$

7.    Shareholders            :    Hartcourt China Inc  51%
                                   Lee Lu Ping          49%

8.    Nature of business      :    The holding of 100% equity interest in
                                   Shanghai Sinobull Information
                                   Corporation Limited [CHINESE TEXT OMITTED]
                                   which is a wholly foreign owned
                                   enterprises incorporated in Shanghai,
                                   PRC and its business is economic
                                   information and data distribution,
                                   computer information and data
                                   collection, network technical services,
                                   transfer of technology, technical
                                   supports, software development and
                                   consultation, sales of self developed
                                   products.


                                       20
<PAGE>

                                   SCHEDULE 2

                  WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS


The Vendors hereby represent, warrant and undertake to and with the Purchaser in
title in the following terms:-

l.       CAPACITY

1.1      The Vendors have full power and capacity to enter into and perform this
         Agreement and this Agreement will, when executed, constitute binding
         obligations on each Vendor in accordance with their terms.

1.2      All necessary authorization for the Vendors to enter into this
         Agreement has been duly obtained.

2.       ACCOUNTS AND RECORDS

2.l      Books and Records

2.l.l    The Company and its subsidiaries have at all times fully, properly and
         accurately maintained all books, accounts and records required by law
         to be maintained all of which books, accounts and records are in its
         possession.

2.l.2    The books, accounts and records of the Company and its subsidiaries
         duly and accurately record all matters required by law to be entered
         therein and accurately present and reflect in accordance with generally
         accepted accounting principles and standards the assets and liabilities
         (actual and contingent) of the Company and its subsidiaries and all
         transactions to which it is or has been a party.

2.2      Accounting Matters

2.2.l    The Accounts were prepared in accordance with the historical cost
         convention and the bases and policies of accounting adopted for the
         purpose of preparing the Accounts are the same as those adopted in
         preparing the audited accounts of the Company and its subsidiaries in
         respect of the last three preceding accounting periods of the Company
         and its subsidiaries.

2.2.2    The Accounts:-

         2.2.2.l  give a true and fair view of the assets and liabilities of the
                  Company and its subsidiaries at the Accounting Date and its
                  profits for the twelve months period ended on that date;

         2.2.2.2  comply with the requirements of the relevant regulations and
                  legislation;

         2.2.2.3  have been prepared in accordance with good accounting practice
                  in the PRC and comply with all current standard accounting
                  practices applicable to a PRC company;

         2.2.2.4  are not affected by any extraordinary, exceptional or
                  non-recurring item;


                                       21
<PAGE>

         2.2.2.5  properly reflect the financial position of the Company and its
                  subsidiaries as at their date;

         2.2.2.6  fully disclose all the assets and liabilities of the Company
                  and its subsidiaries as at their date;

         2.2.2.7  make full provision or reserve in accordance with good
                  accounting practice in PRC for all liabilities and capital
                  commitments of the Company and its subsidiaries outstanding at
                  the Accounting Date including contingent, unquantified or
                  disputed liabilities;

         2.2.2.8  make full and proper provision or reserve in accordance with
                  the principles set out in the notes included in the Accounts
                  for all Taxation liability to be assessed on the Company and
                  its subsidiaries or for which it may be accountable in respect
                  of the twelve months period ended on the Accounting Date and
                  such provision shall be sufficient to cover all Taxation
                  assessed or liable to be assessed on the Company and its
                  subsidiaries or for which the Company is or may become
                  accountable in respect of profits, income, earnings, receipts,
                  transfers, events and transactions up to and including the
                  Accounting Date.

2.2.3    No amount included in the Accounts in respect of any fixed or current
         asset exceeds its purchase price or production cost at the Accounting
         Date.

2.2.4    No amount included in the Accounts in respect of any current assets
         exceeds its net realisable value at the Accounting Date.

2.3      Stock-in-trade and work in progress

2.3.l    In the Accounts the stock-in-trade and work in progress of the Company
         and its subsidiaries have been treated strictly in accordance with
         standard accounting practices applicable to a PRC company.

2.3.2    In the Accounts all redundant, obsolete and slow moving stock-in-trade
         has been written off or written down as appropriate.

2.4      Depreciation

         In the Accounts the fixed assets of the Company and its subsidiaries
         have been depreciated in accordance with standard accounting practices
         applicable to a PRC company.

2.5      Deferred taxation

         Where provision for deferred Taxation is not made in the Accounts full
         details of the amounts of such deferred Taxation must be disclosed in
         the Disclosure Letter.

2.6      Book debts

2.6.l    No part of the amounts included in the Accounts or subsequently
         recorded in the books of the Company as owing by any debtor is or shall
         at the Completion Date be overdue by more than 12 weeks or has been
         released on terms that any debtor pays less than the full book value of
         his debt or has been written off or has proved to any extent to be
         irrecoverable or is now regarded by the Company and its subsidiaries as
         irrecoverable in whole or in part.


                                       22
<PAGE>

2.6.2     All amounts due to the Company and its subsidiaries from debtors as at
          the Completion Date (less the amount of any provision or reserve
          determined on the same basis as that applied in the Accounts and
          disclosed in writing to the Purchasers) shall be recoverable in full
          in the ordinary course of business (and in any event not later than 12
          weeks after the Completion Date) and none of such debts is or shall at
          the Completion Date be subject to any counter-claim or set off except
          to the extent of any such provision or reserve.

2.7       Treatment in the Accounts

          There are no material differences between the accounting and taxation
          treatment of any item in the Accounts.

2.8       Memorandum and articles of association and statutory books

2.8.1     The copy of the memorandum and articles of association of the Company
          provided by the Vendors to the Purchaser is accurate and complete in
          all respects

2.9       Documents filed

2.9.l     All returns, particulars, resolutions and documents required by the
          relevant legislation to be filed with the relevant government
          authority in respect of the Company and its subsidiaries have been
          duly filed and were correct and due compliance has been made with all
          the provisions of the relevant regulations and legislation and other
          legal requirements in connection with the formation of the Company and
          its subsidiaries.

2.9.2     All charges created by the Company and its subsidiaries have (if
          appropriate) been registered in accordance with the provisions of the
          relevant legislation

3.        MATTERS SINCE THE ACCOUNTING DATE

3.l       Since the Accounting Date:-

          3.l.l     no distribution of capital or income has been declared, made
                    or paid or agreed or resolved to be declared, made or paid;

          3.l.2     no loans have been made by the Company and its subsidiaries
                    and no loan capital or loan has been or become liable to be
                    repaid by the Company and its subsidiaries in whole or in
                    part;

          3.l.3     the Company and its subsidiaries have not borrowed, raised
                    or taken any money or any financial facility;

          3.l.4     the business of the Company and its subsidiaries have been
                    carried on in the ordinary and usual course both as regards
                    the nature, scope and manner of conducting the same and so
                    as to maintain the same as a going concern;

          3.l.5     the Company and its subsidiaries have not entered into any
                    capital commitments or any transaction or agreement for the
                    disposal of any asset (including all forms of intellectual
                    and industrial property rights) or under which it has
                    incurred or shall incur (otherwise than in the ordinary and
                    usual course of carrying on its business) any liabilities
                    (including contingent liabilities) nor has it disposed of or
                    realised any material assets or any interest therein;


                                       23
<PAGE>

          3.l.6     no resolutions have been (whether in general meeting or
                    otherwise) passed by the Company and its subsidiaries or any
                    class of their respective members;

          3.l.7     nothing has been done in the conduct or management of the
                    affairs of the Company and its subsidiaries which would be
                    likely to prejudice the interests of the Purchaser as a
                    prospective purchaser of the Shares; and

          3.l.8     no sum has been paid or voted to any director or employee
                    (or ex-director or ex-employee) of the Company and its
                    subsidiaries by way of remuneration or otherwise in excess
                    of the rates paid to him by the Company and its subsidiaries
                    at the Accounting Date and no new services agreements have
                    been made by the Company and its subsidiaries.

3.2       Since the Accounting Date the business of the Company and its
          subsidiaries has not been adversely affected by the loss of or
          material reduction in orders from any important customer or the loss
          of or material reduction in any source of supply or by any abnormal
          factor affecting similar businesses to a like extent and after making
          due and careful enquiries none of the Vendors is aware of any facts
          which are likely to give rise to any such adverse effect.

3.3       Since the Accounting Date there has been no material adverse change in
          the financial position or trading prospects of the Company and its
          subsidiaries nor is any such material change expected.

4.        FINANCE

4.l       Bank and other borrowings

4.l.l     Full details of all limits on the Company's and its subsidiaries' bank
          overdraft facilities have been accurately disclosed in the Disclosure
          Letter to the Purchaser.

4.l.2     The total amount borrowed by the Company and its subsidiaries from its
          bankers does not exceed its overdraft facilities.

4.l.3     The total amount borrowed by the Company and its subsidiaries (as
          determined in accordance with the provisions of the relevant
          instrument) does not exceed any limitation on its borrowing power
          contained in its articles of association or in any debenture or other
          deed or document binding upon it.

4.l.4     The Company and its subsidiaries have no outstanding loan capital, nor
          has it agreed to create or issue any, or factored any of its debts nor
          borrowed any money which it has not repaid save for borrowings not
          exceeding the amounts shown in the Accounts.

4.l.5     The Company and its subsidiaries have not since the Accounting Date
          repaid or become liable to repay any loan or indebtedness in advance
          of its stated maturity.

4.2       Loans by and debts due to the Company and its subsidiaries


                                       24
<PAGE>

          The Company and its subsidiaries have not lent any money (including
          shareholders' loan) which has not been repaid to it, nor owns the
          benefit of any debt (whether or not due for payment) other than debts
          owing to it in the ordinary course of its business, and the Company
          and its subsidiaries have not made any loan or quasi-loan contrary to
          the relevant legislation.

4.3       Liabilities

          There are no liabilities (including contingent liabilities) which are
          outstanding on the part of the Company and its subsidiaries other than
          those liabilities disclosed in the Accounts or incurred in the
          ordinary and proper course of business since the Accounting Date.

4.4       Bank accounts

4.4.l     A statement of the bank accounts of the Company and its subsidiaries
          and of the credit or debit balances thereon as at a date not more than
          seven days before the date of Completion has been supplied to the
          Purchaser.

4.4.2     Since such statement there have been no payments out of any such
          accounts except of payments in the ordinary course of business and the
          balance on current accounts at the Completion Date shall not be
          substantially different from the balances shown on such statement.

4.5       Working capital

          Having regard to existing bank and other facilities the Company and
          its subsidiaries have sufficient working capital for the purposes of
          continuing to carry on its business in its present form and at the
          increased levels of turnover contemplated herein following the
          Completion Date and for the purposes of executing, carrying out and
          fulfilling in accordance with their terms all orders, projects and
          contractual obligations which are binding upon the Company and its
          subsidiaries and remain outstanding.

4.6       Continuance of facilities

4.6.l     In relation to debentures, acceptances, credits, overdrafts, loans or
          other financial facilities outstanding or available to the Company and
          its subsidiaries:-

          4.6.l.l   full details thereof and true and accurate copies of all
                    documents relating to such facilities have been disclosed in
                    the Disclosure Letter and the enclosures thereof; and

          4.6.l.2   there has been no contravention of or non-compliance with
                    any provision of any such document.

4.7       Grants

4.7.l     Full particulars have been disclosed of all grants, allowances, loans
          or financial aids of any kind applied for or received or receivable by
          the Company and its subsidiaries from any governmental department,
          board, body or agency or any other supranational or national or local
          authority body or agency.

4.7.2     No act or transaction has been effected or omitted in consequence of
          which:-


                                       25
<PAGE>

          4.7.2.l   the Company or its subsidiaries is or may become liable to
                    refund wholly or partly any of the grants, allowances, loans
                    or aids referred to in clause 4.7.l; or

          4.7.2.2   any application made by the Company and its subsidiaries for
                    the aforesaid grants, allowance, loans or aids shall be
                    rejected, deferred or not accepted in full.

5.        TAXATION

5.l       Provision for Taxation

          The provision for Taxation in the Accounts shall be sufficient (on the
          basis of the law as presently existing) to cover all Taxation assessed
          or liable to be assessed on the Company and its subsidiaries or for
          which the Company is, may be or may become accountable in respect of
          profits, income, earnings, receipts, transfers, events and
          transactions up to the Accounting Date.

5.2       Obligation to account

          The Company and its subsidiaries has duly complied with its
          obligations to account to the Commissioner of Inland Revenue and all
          other authorities for all amounts for which it is or may become
          accountable in respect of Taxation.

5.3       Returns and clearances

          All returns in connection with Taxation that should have been made by
          the Company and its subsidiaries have been made and have been made
          correctly and on a proper basis making full disclosure of all matters
          relevant to the assessment of the Company's and its subsidiaries'
          liability to Taxation. No such return is likely to be disputed and
          there are no facts known or which would on reasonable enquiry be known
          to the Company and its subsidiaries, its Directors or the Vendors
          which may give rise to any dispute or to any claim for any Taxation or
          the deprivation of any relief or advantage that might have been
          available to the Company and its subsidiaries under any relevant
          legislation.

5.4       Disclosure

          There are no assessments or charges to Taxation against the Company
          and its subsidiaries which are the subject of any present dispute with
          the relevant government tax authority or any relevant statutory
          authority whether such amounts of Taxation have been paid or not and
          regardless of which form such dispute is being or is to be heard.

6.        ASSETS

6.l       Ownership of Assets

6.l.l     The Company and its subsidiaries were at the Accounting Date the owner
          with good and marketable title of all the assets included in the
          Accounts and now so owns and has in its possession and under its
          control all such assets (save for current assets subsequently disposed
          of in the ordinary course of its business). Save as disclosed in the
          Disclosure Letter, all the existing assets and assets acquired by the
          Company and its subsidiaries after the Accounting Date are free from
          any charge, lien, encumbrance or equity and no other person has or
          claims any rights in relation to any of such assets.


                                       26
<PAGE>

6.l.2     The fixed and loose plant, machinery, furniture, fixtures, fittings
          and equipment, vehicles and other movable assets used in connection
          with the business of the Company and its subsidiaries are in the
          possession and control and are the sole and absolute property of the
          Company and its subsidiaries free from any charge, lien, encumbrance,
          hire purchase, leasing or rental agreement or agreement for payment on
          deferred terms or bill of sale and are in good repair and condition
          and satisfactory working order and comprise all assets necessary for
          the continuation of the business of the Company and its subsidiaries
          as carried on at the Completion Date.

6.2       Stocks

6.2.l     The stocks of raw materials, packaging materials and finished goods
          now held are not excessive and are adequate in relation to the current
          business requirements of the business of the Company and its
          subsidiaries and none of such stock is obsolete, unusable,
          unmarketable or inappropriate or of limited value in relation to the
          current business of the Company and its subsidiaries and no contracts
          are outstanding which are likely to result in the foregoing not being
          true.

6.2.2     The stock-in-trade of the Company and its subsidiaries are in good
          condition and is capable of being sold by the Company and its
          subsidiaries in the ordinary course of its business in accordance with
          the current price list without rebate or allowance to a purchaser.

6.3       Retention of title

          The Company and its subsidiaries have not purchased or agreed to
          purchase any stock, goods, materials or assets on terms that property
          therein does not pass until full payment is made or all indebtedness
          discharged.

6.5       Insurance

6.5.1     The Company and its subsidiaries is fully covered by valid insurances
          against all risks normally insured against by persons carrying on the
          same business as that carried on by the Company and its subsidiaries
          and in particular all assets are and have at all material times been
          insured to the full replacement or reinstatement value thereof against
          fire and such other risks as aforesaid and the Company is and has at
          all material times been adequately covered against accident, damage,
          injury, third party loss (including product liability), loss of
          profits and other risks normally insured against by persons carrying
          on the same business as that carried on by the Company and its
          subsidiaries.

6.5.2     Full particulars have been disclosed of all such insurances and there
          are no outstanding claims or circumstances likely to give rise to a
          claim thereunder and nothing has been done or omitted to be done which
          has made or could make any policy of insurance void or voidable or
          whereby the premium is likely to be increased.

6.5.3     None of the policies are subject to any special or unusual terms or
          restrictions or to the payment of any premium in excess of the normal
          rate.


                                       27
<PAGE>

7.        INTELLECTUAL PROPERTY

7.1       The Company and its subsidiaries are entitled to carry on its present
          business in the manner in which it is presently carried on and such
          business does not and is not likely to infringe or conflict with any
          right (and in particular any industrial or intellectual property
          right) of any other person.

7.2       All trademarks, patents, designs, business names, trade names,
          copyright, know-how and other similar industrial, commercial or
          intellectual rights used by the Company and its subsidiaries in
          connection with its business have been disclosed in the Disclosure
          Letter and are in the sole beneficial ownership of the Company and its
          subsidiaries and to the extent to which the same are capable of
          registration are registered in the name of the Company and its
          subsidiaries as sole proprietor and are valid and enforceable and none
          of them is being used, claimed, opposed or attacked by any other
          person nor has anything been done or omitted whereby they or any of
          them might cease to be valid and enforceable or used, claimed, opposed
          or attacked as aforesaid.

7.3       No licence or other authority has been granted or agreed to be granted
          by the Company and its subsidiaries to any person to use in any manner
          or to do anything which would or might otherwise infringe any of the
          rights referred to (specifically or in general terms) in clause 7.2
          and the Company and its subsidiaries have not permitted to be
          disclosed or agreed to disclose to any person other the Purchaser any
          of its know-how, trade secrets, confidential information, technical
          processes or lists of customers or suppliers.

7.4       All licences and authorities from any other person under which any of
          the rights referred to (specifically or in general terms) in clause
          7.2 are used by the Company and its subsidiaries and are in full force
          and effect and the Vendors are not aware of any breach by the Company
          and its subsidiaries of the terms and conditions of any such licence
          or authority or of any circumstances whereby the same may be
          prematurely terminated or rescinded.

7.5       There is no infringement of any Intellectual Property Rights in the
          operation of any business of the Company and its subsidiaries and all
          products and properties of the Company and its subsidiaries are not
          subject to any third party's Intellectual Properties Rights.

8.        COMMITMENTS AND CONTRACTS

8.1       The Company and its subsidiaries are not a party to or subject to any
          liability (existing or contingent) under any contract or arrangement
          not entered into in the ordinary and usual course of business or any
          contract or arrangement of an unusual, onerous or long term nature or
          which is not of an arms' length nature.

8.2       All contracts for the purchase by the Company and its subsidiaries of
          raw materials, goods or services or for the supply of goods or
          services by the Company and its subsidiaries are on a formal arms'
          length basis.

8.3       All obligations of the Company and its subsidiaries to buy foreign
          exchange are against known commitments to pay for stock to be imported
          and paid for in foreign currency and any forward sales of foreign
          currency by the Company are against known receipts of the currency to
          be sold and the Company has no commitments in foreign exchange which
          are not covered by a forward purchase or sale as appropriate of the
          relevant currency.

8.4       The Company and its subsidiaries are not and have not agreed to become
          bound by any debenture, guarantee or contract of indemnity or
          suretyship and there is not now outstanding any guarantee or contract
          for indemnity or suretyship given for the accommodation of or in
          respect of any obligation on the part of the Company and its
          subsidiaries.


                                       28
<PAGE>

8.5       The Company and its subsidiaries have not given any power of attorney
          which remains in force.

8.6       The Company and its subsidiaries have not entered into or agreed to
          enter not any selling, purchasing, manufacturing or licensing
          agreement or arrangement or any agreement or arrangement which in any
          way restricts the freedom of the Company and its subsidiaries to carry
          on its business or any part thereof in any part of the world in such
          manner as it thinks fit.

8.7       The Company and its subsidiaries do not owe any debts or other monies
          to the Vendors or any of the Directors or any person connected with
          the Vendors or the Directors or any of them respectively.


9.        EMPLOYMENT

9.1       Employment and terms of employment

9.1.1     Full particulars of the identities, dates of commencement of
          employment or appointments to office and terms and conditions of
          employment of all the employees and officers of the Company and its
          subsidiaries including without limitation profit sharing schemes or
          commission or discretionary bonus arrangements have been fully and
          accurately disclosed in the Disclosure Letter to the Purchaser.

9.1.2     There are no agreements or other arrangements whether or not legally
          binding between the Company and its subsidiaries and any trade union
          or other body representing its employees.

9.2       Bonus schemes

          Save as disclose in the Disclosure Letter, there are no schemes in
          operation by or in relation to the Company and its subsidiaries
          whereunder any employee of the Company and its subsidiaries is
          entitled to a commission or remuneration of any sort calculated by
          reference to the whole or part of the turnover profits or sales of the
          Company and its subsidiaries.

9.3       Changes in remuneration

9.3.1     Since the date of the Disclosure Letter:-

          9.3.1.1   no change has been made in the rate of remuneration or the
                    emoluments or pension benefits of any officer, ex-officer or
                    senior executive of the Company and its subsidiaries (a
                    senior executive being a person in receipt of remuneration
                    in excess of HK$5,000.00 per annum);

          9.3.1.2   no change has been made in the terms of employment of any
                    such officer or senior executive; and


                                       29
<PAGE>

          9.3.1.3   no additional officers or senior executives have been
                    appointed.

9.3.2     The Company and its subsidiaries are not bound or accustomed to pay
          any monies other than in respect of remuneration or emoluments of
          employment or pension benefits to or for the benefit of any officer or
          employee of the Company and its subsidiaries.

9.4       Termination of contracts of employment

9.4.1     All subsisting contracts of service to which the Company or its
          subsidiaries is a party are determinable on 12 months' notice or less
          without compensation.

9.4.2     No senior executive of the Company and its subsidiaries and no officer
          of the Company and its subsidiaries has given or received notice
          terminating his employment except as expressly contemplated in this
          Agreement and no such executive or officer will be entitled to give
          such notice as a result of the provisions of this Agreement.

9.5       Industrial disputes and employee claims

9.5.1     Neither the Company and its subsidiaries nor its employees are
          involved in any industrial dispute and there are no facts known or
          which should on reasonable enquiry be known to the Company, its
          Directors or the Vendors which might suggest that there may be any
          such industrial dispute or that any of the provisions of this
          Agreement may lead to any such industrial dispute.

9.5.2     There is no outstanding claim against the Company and its subsidiaries
          by any person who is now or has been an officer or employee of the
          Company and its subsidiaries or any dispute between the Company and
          its subsidiaries and a material number or class of its employees.

9.6       Redundancies

          No employee of the Company and its subsidiaries shall become redundant
          and be entitled to a redundancy payment as a result of any provision
          of this Agreement.

9.7       Pensions

9.7.1     Other than required by the relevant legislations the Company and its
          subsidiaries are not under any legal or moral liability or obligation
          or a party to any ex-gratia arrangement or promise to pay pensions,
          gratuities, superannuation allowances or the like to any of its past
          or present officers or employees or their dependents.

9.7.2     Full particulars of the Company's and its subsidiaries' retirement
          benefits scheme ("Scheme") have been disclosed in the Disclosure
          Letter including without limitation true copies of the trust deeds and
          the latest actuarial report and full and accurate particulars of the
          assets funding arrangements, rules and current membership.

9.7.3     The assets, investments or policies held by the trustees of the Scheme
          are sufficient to satisfy the liabilities and obligations (both
          current and contingent) which the Scheme owes to its members at the
          date hereof.


                                       30
<PAGE>

10.       LITIGATION, DISPUTES AND WINDING-UP

10.1      Claims

          There are no outstanding claims against the Company and its
          subsidiaries in respect of defects in quality or delays in delivery or
          completion of contracts or deficiencies design or performance of
          equipment or otherwise relating to liability for goods or services
          supplied or to be supplied by the Company and its subsidiaries and no
          such claims are threatened or anticipated and the Company and its
          subsidiaries have not given otherwise than in the ordinary course of
          business any guarantee or warranty in relation to any goods or
          services supplied or to be supplied by the Company and its
          subsidiaries.

10.2      Litigation

10.2.1    The Company and its subsidiaries are not engaged in any litigation or
          arbitration proceedings as plaintiff or defendant; there are no
          proceedings pending or threatened either by or against the Company and
          its subsidiaries and there are no circumstances which are or may be
          likely to give rise to any litigation or arbitration.

10.2.2    There is no dispute with any revenue or other official department in
          Shanghai or elsewhere in relation to the affairs of the Company and
          its subsidiaries and there are no facts which may give rise to any
          dispute.

10.2.3    No order has been made or petition presented or resolution passed for
          the winding up of the Company and its subsidiaries nor has any
          distress, execution or other process been levied in respect of the
          Company and its subsidiaries which remains undischarged nor is there
          any unfulfilled or unsatisfied judgement or court order outstanding
          against the Company and its subsidiaries.

10.3      Compliance with legislation

10.3.1    Neither the Company nor its subsidiaries nor its officers, agents or
          employees (during the course of their duties to the Company and its
          subsidiaries) has committed or omitted to do any act or thing the
          commission or omission of which is or could be in contravention of any
          applicable laws and regulations (whether of Shanghai or elsewhere)
          giving rise to any fine, penalty, default proceedings or other
          liability on its part.

10.3.2    The Company and its subsidiaries has conducted and is conducting its
          business in all respects in accordance with all applicable laws and
          regulations whether of Shanghai or elsewhere.

10.4      Documents stamped

          All documents which in any way affect the right, title or interest of
          the Company and its subsidiaries in or to any of its property,
          undertaking or assets or to which the Company or its subsidiaries is a
          party and which attract stamp duty have been duly stamped within the
          requisite period for stamping.

10.5      Business names

          The Company and its subsidiaries do not use a name for any purpose
          other than its full corporate name.

10.8      Powers of attorney and authorities


                                       31
<PAGE>

10.8.1    There are not in force any powers of attorney given by the Company and
          its subsidiaries.

10.8.2    There are not outstanding any authorities whether express or implied
          by which any person may enter into any contract (other than the
          Agreement) or commitment to do anything on behalf of the Company and
          its subsidiaries.

10.9      Licences and consents

10.9.1    The Company and its subsidiaries have obtained all necessary licences
          and consents from any person, authority or body for the proper
          operation of its business.

10.9.2    The Company and its subsidiaries are not in breach of any of the terms
          or conditions of any such licences or consents which are all valid and
          subsisting and there are no factors that might in any way prejudice
          the continuation or renewal of any of them.

11.       CAPITAL OF THE COMPANY

11.1      The authorised and issued share capital of the Company is as set out
          in Schedule 1.

11.2      The issued capital has been fully paid.

11.3      There is not now any loan capital of the Company nor any agreement,
          arrangement or option under which any person may now or at any time
          hereafter call for the creation, allotment, issue, sale or transfer of
          any loan or share capital of the Company or require to be put under
          option any loan or share capital of the Company.

11.4      The Company:-

          11.4.1    is not the holder or beneficial owner of and has not agreed
                    to acquire any share or loan capital of any other company or
                    corporation (whether incorporated in Shanghai or elsewhere);
                    and

          11.4.2    has neither a branch outside Shanghai nor any permanent
                    establishment outside Shanghai.

12.       OTHER OPERATIONS

12.1      The Company and its subsidiaries do not have and has never had any
          interest in or agreed to enter into any partnership, consortium, joint
          venture or similar arrangement with any other entity save as disclosed
          in this Agreement.

13.       RECITALS, SCHEDULES AND DISCLOSURES

          The information and circumstances relating to the Company and its
          subsidiaries which are known or ought on reasonable enquiry to be
          known to the Vendors and which are material to be known by the
          Purchaser have been accurately and completely disclosed in [the
          Disclosure Letter and] the recitals to the Agreement the contents of
          all the schedules and all matters disclosed in the Disclosure Letter
          and other information relating to the Company given by the Vendors or
          their accountants to the Purchaser are accurate and complete in every
          respect and there is no fact or matter undisclosed which renders any
          such matters or information untrue, incomplete or misleading.


                                       32
<PAGE>

14.       EFFECT OF AGREEMENT

14.1      No person is entitled to receive from the Company and its subsidiaries
          any finder's fee, brokerage or commission in connection with the sale
          of the Shares to the Purchaser.

14.2      There are no contracts or arrangements (whether written or oral) to
          which the Company and its subsidiaries are a party which shall by
          their terms be determinable as a result of the provisions of this
          Agreement or which shall or may be determined by performance or
          Completion of this Agreement.

14.3      The execution and delivery of this Agreement and the fulfilment and
          performance of the compliance with the terms thereof by the Vendors do
          not and shall not:-

          14.3.1    conflict with, violate or result in a breach by the Company
                    and its subsidiaries or the Vendors of the terms, provisions
                    or conditions of:-

                    14.3.1.1  any agreement,

                    14.3.1.2  any law, undertaking to or judgement order,
                              injunction or decree of any court, or

                    14.3.1.3  the memorandum and articles of association of the
                              Company and its subsidiaries;

          14.3.2    relieve any person of any contractual or other obligation to
                    the Company and its subsidiaries or entitle any person to
                    terminate any such obligation;

          14.3.3    terminate or make subject to termination or adversely affect
                    from the Company's and its subsidiaries' point of view the
                    enjoyment of any present or future benefit or privilege;

          14.3.4    result in any customer or supplier of the Company and its
                    subsidiaries ceasing to deal or substantially reducing the
                    level of his dealings with the Company and its subsidiaries;

          14.3.5    result in any indebtedness present or future of the Company
                    and its subsidiaries becoming due or capable of being
                    declared due and payable prior to the stated maturity date;
                    or

          14.3.6    give rise to any contractual or other obligation of the
                    Company and its subsidiaries to any person or entitle any
                    person to require the performance of or compliance with any
                    existing contractual or other obligation of the Company and
                    its subsidiaries.


                                       33
<PAGE>

                                   SCHEDULE 3

                             COMPLETION REQUIREMENTS

On the Completion Date, the Vendors and the Purchaser shall have the following
obligations:


1.    Tax Deed of Indemnity

      Each party to this Agreement shall cause to be executed the Tax Indemnity
      Deed in substantially the form specified in Schedule 4.

2.    Obligations of the Vendors

2.1   The Vendors shall hand to or to the order of the Purchaser the following:

      (a)   the statutory books and record duly made up to the Completion Date
            and common seal(s) and chops of the Company and all its
            subsidiaries;

      (b)   the written resignations of all the directors of the Company in
            which the relevant director shall acknowledge that he/she has no
            claim or right of action against the Company or any of it
            subsidiaries for compensation for loss of office, termination of
            employment or otherwise;

      (c)   the share certificates in respect of the Sales Shares and documents
            to the reasonable satisfaction of the Purchaser evidencing that the
            Company has been duly established under the BVI law and is wholly
            owned by the Vendors;

      (d)   an assignment or other document in the agreed form duly signed by
            the Vendors transferring the Intellectual Property Rights of the
            Metastock Project to the Purchaser;

2.2   The Vendors shall procure that a board meeting of the Company be held at
      which:

      (a)   it shall be resolved that the transfer of Sale Shares be approved as
            the Purchaser may direct;

      (b)   nominees of the Purchaser be appointed as directors of the Company.


3.    Obligations of the Purchaser

3.1   The Purchaser shall procure that a board meeting of the Purchaser be held
      at which a resolution approving the allotment of the Consideration Shares
      to the Vendors pursuant to the terms of this Agreement be passed.

3.2   The Purchaser shall deliver or cause to be delivered to the Vendors:


                                       34
<PAGE>

      (a)   the share certificates in respect of the Consideration Shares,
            issued in the name of the Vendors or as it may direct in writing
            prior to Completion and a certified true copy of the register of
            members of the Purchaser showing the Vendors' ownership of the
            Consideration Shares; and

      (b)   certified true copy of the written resolutions of the board of
            directors and shareholders of the Purchaser (i) approving the
            purchase of the Sale Shares, (ii) the issue and allotment of the
            Consideration Shares and all terms in this Agreement and the
            implementation thereof; and (iii) the appointment of one director
            nominated by the Vendors to the board of directors of the Purchaser.



                                       35
<PAGE>

                                   SCHEDULE 4

                               TAX INDEMNITY DEED



THIS DEED is made the 30th day of June, 2004.


BETWEEN

(l)   HARTCOURT CHINA INC AND MR LEE LU PING (the "VENDORS"); and

(2)   FIRST INFORMATION TECHNOLOGY LIMITED, a company incorporated in the
      British Virgin Islands and whose registered office is P O Box 957,
      Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
      and business address is 19/F., Wing On House, No. 71 Des Voeux Road
      Central, Hong Kong (the "PURCHASER"); and

(3)   Hopeful Internet Technologies Limited, a company incorporated in the
      British Virgin Islands whose registered office is P O Box 957, Offshore
      Incorporations Centre, Road Town, Tortola, British Virgin Islands and
      business address is Suite B, 19/F., Ritz Plaza, 122 Austin Road,
      Tsimshatsui, Hong Kong (the "COMPANY").


WHEREAS pursuant to an agreement for the sale and purchase of shares in the
      Company dated June 29th, 2004, the Vendors and the Purchaser have today
      completed the sale and purchase of all the issued shares of the Company in
      reliance (inter alia) upon the undertaking of the Vendors to enter into
      this deed and upon the indemnities by the Vendors hereinafter contained.


NOW THIS DEED made in pursuance of the aforesaid undertaking and in
      consideration of the aforesaid purchase of shares WITNESSETH as follows:-


1.    DEFINITIONS AND INTERPRETATION

1.1   Definitions

      "Accounts"                        means the audited management accounts of
                                        the Company and its subsidiaries
                                        comprising the balance sheet as at the
                                        Management Accounting Date, the profit
                                        and loss account for the twelve-month
                                        period ended on the Management
                                        Accounting Date and the notes thereto;


                                       36
<PAGE>

      "Agreement"                       means the agreement for the sale and
                                        purchase of the Sale Shares dated June
                                        29th, 2004 under which the Vendors
                                        agreed to sell and the Purchaser agreed
                                        to purchase the entire share capital of
                                        the Company;

      "Claim for Taxation"              includes:-

                                        (1)   any notice, demand, assessment
                                              letter or other document issued or
                                              action taken by or on behalf of
                                              the relevant tax authorities in
                                              the PRC or any other statutory or
                                              governmental authority or body
                                              whatsoever in any part of the
                                              world whereby it appears that the
                                              Company or its subsidiaries is or
                                              may be liable to make any payment
                                              of any Taxation whether or not the
                                              same is primarily payable by the
                                              Company or its subsidiaries and
                                              whether or not the Company or its
                                              subsidiaries has or may have any
                                              right of reimbursement;

                                        (2)   the loss or counteracting or
                                              clawing back of any Relief which
                                              would otherwise have been
                                              available to the Company or its
                                              subsidiaries; and

                                        (3)   the nullifying or cancellation or
                                              set-off of a right to repayment of
                                              Taxation which would have been
                                              available to the Company or its
                                              subsidiaries;

      "Completion"                      means the completion of the sale and
                                        purchase of the Sale Shares pursuant to
                                        the Agreement;

      "Final Determination"             in relation to a Claim for Taxation
                                        where there is an appeal against that
                                        assessment, means:-

                                        (1)   an agreement under section 64(3)
                                              of the Inland Revenue Ordinance
                                              (Cap. 112 of the Laws of Hong
                                              Kong) or any legislative provision
                                              corresponding to that section; or

                                        (2)   a decision of a court or tribunal
                                              from which either no appeal lies
                                              or in respect of which no appeal
                                              is made within the prescribed time
                                              limit;

      "Indemnified Person"              means the Purchaser and the Company, and
                                        their respective successors and assigns;

      "Liability to Taxation"           means any liability to make a payment in
                                        respect of Taxation;


                                       37
<PAGE>

      "Management Accounting Date"      Means 31st December 2003;

      "Relief"                          includes any relief, allowance,
                                        exemption, set-off or deduction in
                                        computing or against profits, income or
                                        gains of any description or from any
                                        source or credit against Taxation;

      "Sale Shares"                     means 2,179 shares of the Company
                                        registered in the name of and legal and
                                        beneficially owned by the Vendors which
                                        have been or are to be sold to the
                                        Purchaser pursuant to the Agreement; and

      "Taxation"                        means and includes all forms of tax,
                                        rate, levy, duty, charge, impost, fee,
                                        deduction or withholding of any nature
                                        now or hereafter imposed, levied,
                                        collected, withheld or assessed by any
                                        taxing or other authority in any part of
                                        the world / the PRC and includes any
                                        interest, additional tax, penalty or
                                        other charge payable or claimed in
                                        respect thereof.

1.2   Interpretation

      In this Deed unless the context otherwise requires all expressions used in
      the Agreement shall have the same meanings in this Deed and the
      definitions and interpretation contained in the Agreement shall be deemed
      to be incorporated herein.

1.3   Headings

      The headings contained in this Deed are for convenience only and shall
      have no legal effect nor shall they affect the construction and
      interpretation of this Deed.


2.    INDEMNITY

2.1   Subject as hereinafter provided the Vendors hereby jointly and severally
      covenant with the Purchaser (for itself and for its successors and
      assigns) and the Company (for itself and for its successors and assignors)
      and as a separate covenant with the each of them that the Vendors and
      their respective representatives will indemnify the Purchaser and the
      Company and keep the Purchaser and the Company indemnified against any
      loss arising from time to time from a Claim for Taxation which imposes or
      seeks to impose on the Company or its subsidiaries and/or the Purchaser a
      Liability to Taxation as a consequence of any one or more events occurring
      on or before Completion and (without prejudice to the generality of the
      foregoing) against:-

(a)   the amount of any settlement of a Claim for Taxation;


                                       38
<PAGE>

(b)   any depletion of or diminution in the net tangible assets or any increase
      in the amount of the net liabilities of the Company or its subsidiaries or
      any loss by the Company or its subsidiaries of any benefit or advantage
      subsisting or which might reasonably have been supposed to subsist at
      Completion and arising by reason of or in consequence of or in connection
      with any Liability to Taxation;

(c)   the costs and expenses from time to time reasonably and properly incurred
      by the Company or its subsidiaries in relation to any demands, actions,
      proceedings and claims in respect of Liability to Taxation or Claim for
      Taxation; and

(d)   estate duty in respect of the death (whether before or after) of any
      person whereby a liability in respect of estate duty may fall on the
      Company or its subsidiaries by reason of any transfer of property or other
      circumstances occurring prior to or at Completion.

2.2   No delay or omission on the part of an Indemnified Person in the exercise
      of any right, power or privilege hereunder shall impair such right, power
      or privilege or be construed as a waiver thereof and any single or partial
      exercise of any such right, power or privilege shall not preclude the
      further exercise of that or any other right, power or privilege.

2.3   All sums payable by the Vendors to the Purchaser and/or the Company or its
      subsidiaries and/or any of their respective successors or assigns
      hereunder shall be paid insofar as is lawful free and clear of all
      deductions and withholdings whatsoever and in the event that a deduction
      or withholding is lawfully made the Vendors shall pay such greater sum
      which after any lawful deduction or withholding therefrom results in a net
      payment equal to the amount due under the indemnity provided for in Clause
      2.1.

2.4   If a sum payable by the Vendors hereunder attracts a Liability to Taxation
      (or would have done so but for the availability of some Relief) then the
      Vendors shall pay such further amount so that the net receipts of the
      Company or its subsidiaries after Taxation in respect of the payment shall
      be as if the payment were not subject to Taxation in the hands of the
      Company or its subsidiaries.

2.5   The Vendors shall be liable under the indemnity in Clause 2.1
      notwithstanding any Reliefs, rights or repayment or other rights or claims
      of a similar nature which may be available to any person entitled to the
      benefit of such indemnity to set against or otherwise mitigate any
      liability arising from any Claim for Taxation so that the indemnity in
      Clause 2.1 shall take effect as though no such Reliefs, rights or
      repayment or other rights or claims were available.


3.    LIMITATION OF LIABILITY

3.1   The Vendors shall not incur liability under the indemnities hereinbefore
      contained by reason of a Liability to Taxation or Claim for Taxation
      imposed on the Company or its subsidiaries and/or the Purchaser:-


                                       39
<PAGE>

(a)   to the extent that full provision or reserve in respect thereof was
      specifically made in the Accounts;

(b)   to the extent that the Liability to Taxation or Claim for Taxation arises
      or is increased as a result only of any increase in rates of Taxation made
      after Completion with retrospective effect;

(c)   to the extent that the liability to make such payment would not have
      arisen but for a voluntary act, transaction or omission carried out (other
      than pursuant to a legally binding commitment created on or before
      Completion) by the Company or its subsidiaries after Completion and
      otherwise than in the ordinary course of business; and

(d)   to the extent that the liability to make such payment is in respect of
      Taxation for which the Company or its subsidiaries is primarily liable
      arising as a result of transactions carried out by them in the ordinary
      course of business after Completion.


4.    NOTICE OF CLAIMS

      If the Purchaser and/or the Company or its subsidiaries shall become aware
      of any Claim for Taxation relevant for the purposes of this Deed it shall
      as soon as reasonable and practicable give written notice thereof to the
      Vendors and shall (if the Vendors shall indemnify and secure the Purchaser
      and/or the Company or its subsidiaries as the case may be to their
      reasonable satisfaction against all losses, costs, damages, charges and
      expenses including interest, fines, penalties and interest on overdue tax
      which may be incurred hereby) take such action and give such information
      and assistance in connection with the affairs of the Company or its
      subsidiaries as the Vendors may reasonably and promptly by written notice
      request to avoid, resist, appeal or compromise such Claim for Taxation
      PROVIDED THAT the Purchaser and the Company or its subsidiaries shall not
      be obliged to appeal against any Claim for Taxation made on them if after
      the Vendors have been given written notice of such claim pursuant hereto
      they have not within 15 days thereafter received from the Vendors
      instructions in writing to do so and PROVIDED FURTHER THAT in the final
      event any action taken shall be at the discretion of the Purchaser or the
      Company or its subsidiaries (as the case may be) and shall not interfere
      with the ordinary course of their businesses and/or which in their
      opinions is likely to prejudice their businesses and/or their
      relationships with the relevant taxing, fiscal or other appropriate
      authority.


5.    ASSIGNMENT

      The whole of or any part of the benefit of this Deed may be assigned by
      the Purchaser or the Company to the extent that the indemnities given by
      this Deed shall ensure to the benefit of such party's successors and
      assigns.


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<PAGE>

6.    NOTICES

6.1   Delivery

      All notices, demands or other communications which are required to be
      given under this Deed shall be in writing in English and sent to:

      (a)   in the case of the Vendors:

            Address           :    Suite B, 19/F, Ritz Plaza,122 Austin
                                   Road Tsimshatsui, Hong Kong
            Facsimile number  :    8621-52138870
            Attention         :    Mr. David Chen

      (b)   in the case of the Purchaser:

            First Information Technology Limited
            Address           :    19/F., Wing On House, 71 Des Voeux Road
                                   Central Hong Kong
            Facsimile number  :    (852) 2810-6070
            Attention         :    Mr. Rankine Yeung

      (c)   in the case of the Company:

            Address           :    19/F., Wing On House, 71 Des Voeux Road
                                   Central Hong Kong
            Facsimile number  :    (852) 2810-6070
            Attention         :    Mr. Rankine Yeung

      or to such other address or facsimile number or marked for the attention
      of such other person as the recipient may designate by notice given in
      accordance with the provisions of this Clause 6.

6.2   Receipt

      Any such notice may be delivered personally or by prepaid post or sent by
      facsimile transmission and shall be deemed to have been effectively
      served:

      (a)   on the day of receipt, where any personally delivered letter or
            facsimile message is received on any Business Day before or during
            normal working hours;

      (b)   on the following Business Day, where any personally delivered letter
            or facsimile message is received either on any Business Day after
            normal working hours or on any day which is not a Business Day;

      (c)   on the third Business Day following the day of posting, upon
            despatch from within Hong Kong of any posted letter to the address
            of a recipient in Hong Kong, unless actually received sooner; or


                                       41
<PAGE>

      (d)   on the seventh Business Day following the day of posting, upon
            despatch from within Hong Kong of any posted letter to the address
            of an overseas recipient (and vice-versa), unless actually received
            sooner.

6.4   Nothing in this Clause 6 shall preclude the service of communication or
      the proof of such service by any other mode permitted by law.


7.    GOVERNING LAW

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

7.2   Each party irrevocably and unconditionally submits to the non-exclusive
      jurisdiction of the courts of Hong Kong and courts of appeal from them.
      Each party waives any right it has to object to an action being brought in
      those courts, to claim that the action has been brought in an inconvenient
      forum, or to claim that those courts do not have jurisdiction.


8.    PROCESS AGENT

8.1   The Vendors hereby irrevocably appoint First Shanghai Management Services
      Limited of 19/F, Wing On House, 71 Des Voeux Road Central, Hong Kong as
      its/his process agent to receive on its/his behalf service of process in
      any proceedings in Hong Kong with respect to this Agreement. Service shall
      be deemed completed on delivery to such process agent for Vendors (whether
      or not such service is forwarded to or received by the Vendors).

8.2   The Company hereby irrevocably appoints First Shanghai Management Services
      Limited of 19/F, Wing On House, 71 Des Voeux Road Central, Hong Kong as
      its process agent to receive on its behalf service of process in any
      proceedings in Hong Kong with respect to this Agreement. Service shall be
      deemed completed on delivery to such process agent for the Company
      (whether or not such service is forwarded to or received by the Company).

8.3   If for any reason the process agent for Vendors or the process agent for
      the Company ceases or fails to act as process agent, the Vendors or the
      Company (as the case may be) agree to appoint their respective substitute
      process agent acceptable to other parties and to deliver to other parties
      proof of the newly appointed process agent's acceptance of such
      appointment within 7 calendar days.

IN WITNESS whereof this Deed has been duly executed the day and year first
before written.



                                       42
<PAGE>

The Vendors
-----------

SIGNED under seal by                         )
                                             )
and SIGNED by                                )
for and on behalf of                         )
HARTCOURT CHINA INC                          )
in the presence of:                          )

Mr Lee Lu Ping                               )
Passport No:                                 )
SIGNED by                                    )
in the presence of :                         )



The Purchaser
-------------

SIGNED by                                    )
for and on behalf of                         )
FIRST INFORMATION TECHNOLOGY LIMITED         )
in the presence of:                          )




The Company
-----------

SIGNED by                                    )
for and on behalf of                         )
HOPEFUL INTERNET TECHNOLOGIES LIMITED        )
in the presence of:                          )


                                       43
<PAGE>

SCHEDULE 5
----------

                         (PARTICULARS OF THE PURCHASER)
                         ------------------------------


1.   Name                     :   First Information Technology Limited

2.   Place of Incorporation   :   British Virgin Islands

3.   Company Incorporation No :   324414

4.   Date of Incorporation    :   12th May 1999

5.   Authorized Share Capital :   US$50,000.00 divided
                                  into 5,000,000 ordinary shares of US$0.01 each

6.   Number of Issued Shares  :   7,821 ordinary shares of US$0.01 each

7.   Shareholder and number of Shares held  :  First Shanghai Investments
                                               Limited held 7,821 ordinary
                                               shares of US$0.01 each



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