S.W. LAM, INC.


                               QUALITY PRINCE LTD.


                               PHENOMENAL LIMITED


                                  LAM SAI WING

                                                                         
                               CHAN YAM FAI, JANE


                        HANG FUNG GOLD TECHNOLOGY LIMITED


                       HANG FUNG JEWELLERY COMPANY LIMITED


                                 SOYCUE LIMITED




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

                                DEED OF AMENDMENT

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







                           Jones, Day, Reavis & Pogue
                       29th Floor, Entertainment Building
                             30 Queen's Road Central
                                    Hong Kong

                           Telephone: (852) 2526-6895
                           Facsimile: (852) 2868-5871



<PAGE>

THIS DEED is made on the              day of June 1998.
                         -------------

AMONG


(1)  S.W. LAM, INC. a company  incorporated in Nevada,  United States of America
     with its registered office at Corporation  Trust Company,  One East Street,
     Reno, Nevada 89501, U.S.A. ("S.W. Lam, Inc.");

(2)  QUALITY  PRINCE  LTD.  a  British  Virgin  Islands   corporation  with  its
     registered  office at P.O. Box 3444,  Road Town,  Tortola,  British  Virgin
     Islands ("Quality Prince");

(3)  PHENOMENAL LIMITED a British Virgin Islands corporation with its registered
     office at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola,
     British Virgin Islands ("Phenomenal");

(4)  LAM SAI WING [HKID:  D526157(1)] at Units 25-32, 2nd Floor,  Block B, Focal
     Industrial  Centre, 21 Man Lok Street,  Hunghom,  Kowloon,  Hong Kong ("Mr.
     Lam");

(5)  CHAN YAM FAI, JANE [HKID:  G293329(1)] at Units 25-32, 2nd Floor,  Block B,
     Focal Industrial  Centre, 21 Man Lok Street,  Hunghom,  Kowloon,  Hong Kong
     ("Mrs Lam"; collectively with Mr. Lam, "the Lams"); and

(6)  HANG FUNG GOLD  TECHNOLOGY  LIMITED a company  incorporated in Bermuda with
     its registered office at Clarendon House, 2 Church Street, Hamilton, HM 11,
     Bermuda ("List Co").

(7)  HANG FUNG JEWELLERY  COMPANY LIMITED,  a company  incorporated in Hong Kong
     with its  registered  office at Units  25-32,  2nd  Floor,  Block B,  Focal
     Industrial Centre, 21 Man Lok Street, Hunghom, Kowloon ("HF Jewellery").

(8)  SOYCUE LIMITED,  a company  incorporated in the British Virgin Islands with
     its  registered  office at P. O. Box 71,  Craigmuir  Chambers,  Road  Town,
     Tortola, British Virgin Islands ("Soycue").


RECITALS


A.   Quality  Prince is the holding  company of the group of companies  known as
     the Hang Fung Group.


B.   HF  Jewellery,  further  details of which are specified in Schedule 6, is a
     wholly owned subsidiary of Quality Prince.

C.   The parties  (apart from HF Jewellery,  Soycue and List Co) entered into an
     agreement  entitled  "Investment   Agreement  for  a  Warrant  to  Purchase
     5,263,158  shares of Common Stock of S.W.  Lam,  Inc. and a US$  10,000,000
     Convertible  Note  Certificate  of Quality  Prince Ltd." on May 20, 1997 in
     Hong Kong (the  "Original  Agreement")  for the  purpose  of  providing  by
     Phenomenal financing in the amount of US$10,000,000 to the Hang Fung Group,
     as that term is defined in the Original  Agreement.  A copy of the Original
     Agreement is attached to this Deed as Schedule 1.



                                       -1-
<PAGE>

D.   Pursuant to Section 6 of the Convertible Note Certificate of Quality Prince
     (the  "Note"),  which was issued  under and formed an integral  part of the
     Original  Agreement,  the amount  due under the Note,  i.e.  the  principal
     amount of  US$10,000,000  and all the interest  accruing,  shall be due and
     repayable on the expiration of ten months from the date of issue, namely on
     March 20, 1998,  unless the holder of the Note has  exercised  its right of
     conversion pursuant to Section 3 of the Note. Phenomenal,  as the holder of
     the Note, has not exercised such right.


E.   To extend the financing provided to the Hang Fung Group by Phenomenal under
     the Original  Agreement,  the parties have agreed that the principal amount
     advanced  by  Phenomenal  pursuant  to the Note shall be  restructured  and
     capitalized  into  redeemable  preference  shares  in  the  capital  of  HF
     Jewellery,  that  Phenomenal  shall waive its right to obtain all  interest
     accrued  under the Note,  and that  certain  modifications  to the Original
     Agreement  shall be  adopted  under  the terms and  conditions  as  further
     described below.


F.   The parties  also wish to document  their  intention  to list the Hang Fung
     Group on The Stock  Exchange of Hong Kong  Limited  and to specify  certain
     circumstances  under which  Phenomenal  or its nominee  may  subscribe  for
     shares in List Co.


G.   The  parties  began   negotiating   the  terms  and   conditions   for  the
     restructuring  before  March  20,  1998 but were not able to  complete  the
     restructuring  as  of  March  20,  1998.  The  parties  executed  extension
     agreements to extend the Original  Agreement  until June ___, 1998 to allow
     time for the  preparation  and  execution  of documents  necessary  for the
     implementation of the restructuring.


H.   Section  9.09 of the  Original  Agreement  provides  that  any  term of the
     Original  Agreement may be amended only by a written  instrument  signed by
     the party against whom enforcement of any such amendment is sought.


I.   The  parties  desire  to amend  the  Original  Agreement  to carry  out the
     purposes of Recitals E and F above by and in accordance with this Deed.


NOW THIS DEED WITNESSES:


ARTICLE 1. GENERAL

Section 1.1  Effectiveness. 

This Deed shall be  effective as of the date hereof ("Effective Date").




                                      -2-
<PAGE>
                                       

Section 1.2 Definitions.

For  purposes  of this Deed,  the  following  words and  phrases  shall have the
following meanings:

(a)  "Aggregate Redemption Amount" has the meaning specified in Section 7.4.

(b)  "Completion" has the meaning specified in Section 6.1.

(c)  "Effective Date" has the meaning specified in Section 1.1.

(d)  "Listing" has the meaning specified in Section 7.1.

(e)  "Prospectus Date" has the meaning specified in Section 7.6.

(f)  "Put Option Agreement" has the meaning specified in Section 2.2.

(g)  "Redeemable Preference Shares" has the meaning specified in Section 2.1.

Any other  words with  initial  capitalization  that are used and not defined in
this Deed shall have the meanings ascribed to them in the Original Agreement.


ARTICLE 2. ISSUANCE OF REDEEMABLE PREFERENCE SHARES

Section 2.1 Issuance of Redeemable Preference Shares.

Before  Completion,  HF  Jewellery  will have duly  authorized  the  issuance of
5,263,788 redeemable  preference shares of US$0.01 each ("Redeemable  Preference
Shares")  at a  premium  of US$  1.8897726  each to  Phenomenal  or its  nominee
(representing a total  subscription  amount of  US$10,000,000),  such redeemable
preference shares having the rights,  restrictions,  privileges, and preferences
of which are set forth in Schedule 2 to this Deed. HF Jewellery shall before the
Completion  amend  its  Memorandum  and  Articles  of  Association  to permit HF
Jewellery to be legally authorized to issue the Redeemable  Preference Shares in
accordance with the terms under Schedule 2.

Section 2.2 Put Option Agreement.

The Lams shall enter into a duly executed put option  agreement (the "Put Option
Agreement")  with Phenomenal  substantially in the form set out in Schedule 3 at
Completion,  enabling Phenomenal to sell the Redeemable Preference Shares to the
Lams in the event HF Jewellery  fails to timely redeem the Redeemable  Agreement
Shares  pursuant to Section 7.2 or 7.3 hereof,  as the case may be, on the terms
specified in the Put Option Agreement.


ARTICLE 3. SATISFACTION OF NOTE AND RELEASE OF SECURITY

Section 3.1 Satisfaction of the Note.

Upon  Completion,  all  obligations  of Quality  Prince  under the Note shall be
deemed fully  satisfied  and  extinguished  and the Note shall cease to have any
force or effect.

Section 3.2 Release of Share Mortgage and Personal Guarantee.



                                       3
<PAGE>


Upon Completion,  the Share Mortgages and the Personal Guarantees referred to in
the Original  Agreement shall be completely  discharged,  and the original share
certificates  in S.W.  Lam,  Inc.  and Good Day  Holdings  Limited and all blank
instruments of transfer held by Phenomenal  under the Share  Mortgages  shall be
returned to the holders of the share certificates.

Section 3.3 Language Made Without Force and Effect.

All  language  in the  Original  Agreement  relating  to the Note  that are made
obsolete or  inconsistent  with the provisions  herein shall be deleted and made
without force and effect upon the Completion.


ARTICLE 4. COMMON STOCK PURCHASE WARRANT TO BE EXTENDED

Section 4.1 Warrant to be Extended.

The Common Stock Purchase Warrant of S.W. Lam, Inc.  executed in connection with
the Original Document (the "Warrant") shall be extended through  mid-night,  May
31, 1999 or until the Listing, whichever date is earlier, by the execution of an
Extension and  Modification  Agreement  substantially  in the form of Schedule 4
hereto by S.W. Lam, Inc. and Phenomenal.

Section 4.2 Number of Common Stock Modified.

The  number of shares in the  Common  Stock of S.W.  Lam,  Inc.  subject  to the
Warrant shall be modified in accordance with the following formula:

5,263,788 shares x [ 1 + (n x 0.1956)/365 x 1.899773/2.15 ]

where
-----

n = number of days  elapsing  between  March  20,  1998 and the day on which the
Warrant is exercised

Section 4.3 Rights as  Redeemable  Preference  Share  Holder and Warrant  Holder
            Mutually Exclusive.

The  redemption  and  subscription  rights of Phenomenal  specified in Article 7
herein are  alternative to and mutually  exclusive with the rights of Phenomenal
as holder of the Warrant. By exercising its right to cause the redemption of the
Redeemable  Preference  Shares and subscribe for ordinary shares in List Co with
the  redemption  proceeds,  Phenomenal  will  forfeit its right to exercise  the
Warrant.  By  exercising  the Warrant,  Phenomenal  will forfeit its right to to
cause the  redemption  of the  Redeemable  Preference  Shares and  subscribe for
ordinary shares in List Co with the redemption proceeds.



                                       -4-
<PAGE>


ARTICLE 5. COVENANTS OF HF JEWELLERY AND SOYCUE

Section 5.1 No New Shares in HF Jewellery.

From the  Effective  Date and prior to  redemption  by HF  Jewellery  of all the
Redeemable  Preference  Shares issued to  Phenomenal  pursuant to Section 7.2 or
7.3, HF Jewellery covenants not to issue additional shares,  whether ordinary or
preference,  to any other party without the written consent of Phenomenal  (such
consent not to be unreasonably withheld).

Section 5.2 No Demand on Inter-Company Loan.

From the Effective Date and prior to the redemption of the Redeemable Preference
Shares by HF Jewellery  pursuant to Section 7.2 or 7.3 hereof,  Soycue covenants
that it shall not  demand  nor  accept any  payment  from HF  Jewellery  for the
repayment  of any interest or  principal  on an  inter-company  loan due from HF
Jewellery to Soycue in the amount of HK$22,791,000  existing as of the Effective
Date without the consent of Phenomenal.


ARTICLE 6. COMPLETION

Section 6.1 Time and Place.

The completion  ("Completion") of the transactions  contemplated under this Deed
shall take place at the offices of Jones,  Day,  Reavis & Pogue ("Jones Day") at
29th Floor,  Entertainment  Building, 30 Queen's Road Central, Hong Kong on June
30, 1998, or such other time and place as may be mutually agreed on.

Section 6.2 Documents to be Delivered.

At  Completion  the Lams will deliver or procure the  delivery of the  following
documents to Phenomenal:

(a)  Share certificates  representing  5,263,788 shares of Redeemable Preference
     Shares  in  HF  Jewellery   issued  to  Phenomenal  or  its  nominee.   The
     certificates  shall be  registered on HF  Jewellery's  books in the name of
     Phenomenal or its nominee.

(b)  Evidence to the reasonable  satisfaction  of Phenomenal that the Memorandum
     and Articles of  Association  of HF Jewellery has been amended  pursuant to
     Section 2.1 herein.

(c)  A Put  Option  Agreement  substantially  in the form of  Schedule  3,  duly
     executed by the Lams.

(d)  An Extension and  Modification  Agreement for the Warrant  substantially in
     the form of Schedule 4 (the "Warrant Extension  Agreement"),  duly executed
     by S.W. Lam, Inc.



                                       -5-
<PAGE>


Section 6.3 Documents to be Delivered by Phenomenal.

At  Completion  Phenomenal  will  deliver the  following  documents to the Lams,
Quality Prince or S.W. Lam, Inc., as the case may be:

(a)  The original Convertible Note Certificate executed by Quality Prince.

(b)  Share  certificates and blank instruments of transfer in S.W. Lam, Inc. and
     in Good Day Holdings Limited.

(c)  The original Personal Guarantees executed by the Lams.

(d)  The original Share Mortgages.

Section 6.4       Procedures at Completion.

At  Completion,  the Lams,  S.W. Lam, Inc. and  Phenomenal,  as the case may be,
shall execute the following documents:

(a)  The Warrant Extension Agreement.

(b)  The Put Option Agreement.


ARTICLE 7. RIGHT TO  SUBSCRIBE  FOR  SHARES IN LIST CO AND  LISTING OF HANG FUNG
           GROUP OF COMPANIES

Section 7.1 Intention of Listing.

The Lams,  S.W. Lam, Inc.,  Quality  Prince and HF Jewellery  hereby jointly and
severally  represent that it is their  intention that the Hang Fung Group should
apply for  listing of the shares in List Co on The Stock  Exchange  of Hong Kong
Limited (the "Listing"),  and that for that purpose the respective  parties have
procured the  incorporation  of List Co, a company  incorporated in Bermuda,  on
December 4, 1997.  Notwithstanding any other provision in the Original Agreement
or this Deed, the Lams, S.W. Lam, Inc.,  Quality  Prince,  List Co, HF Jewellery
and Soycue are not  required to obtain any consent from  Phenomenal  in order to
implement the Listing. The Lams, S.W. Lam Inc and Quality Prince hereby agree to
use their reasonable  endeavors to procure that prior to March 20, 1999 the Hang
Fung Group  will  implement  a  restructuring  so that List Co shall  become the
holding company of the corporations constituting the Hang Fung Group.

Section 7.2 Redemption of Redeemable Preference Shares before March 20, 1999.

The parties hereto agree that except as provided in this  paragraph,  Phenomenal
shall not have the  right to  redeem  any of its  Redeemable  Preference  Shares
before March 20, 1999.  Phenomenal shall be obliged to exercise its right to (i)
cause HF Jewellery to redeem the  Redeemable  Preference  Shares to be issued to
Phenomenal or its nominee  pursuant to this Deed  (notwithstanding  the terms of
issue of such Redeemable  Preference  Shares) and (ii) to apply a minimum of US$
10,000,000  or any  larger  amount up to the  Aggregate  Redemption  Amount  (as
defined in Section  7.4) for the  subscription  of shares in List Co pursuant to
Section 7.5, if at any time before March 20, 1999  reasonable  evidence has been
produced to  Phenomenal in writing of (a) the  completion  of the  restructuring
contemplated  in Section 7.1;  and (b) the approval by the Listing  Committee of
The Stock  Exchange  of Hong Kong  Limited  of the  Listing,  provided  that the
notional  market  capitalization  of List Co disclosed in the  prospectus  to be
issued by List Co shall not be less than the amount  set forth in  Section  7.7.
Within five (5) days of the  occurrence of (a) and (b) above,  Phenomenal  shall
serve a notice in writing to HF Jewellery or the Lams to cause the redemption of
the Redeemable Preference Shares and to subscribe for shares in List Co, in each
case, prior to the date of bulk printing of the prospectus as referred to above.



                                       -6-
<PAGE>


Section 7.3 Redemption of Redeemable Preference Shares after March 19, 1999.

If one or both of the above  conditions  (a) and (b) set out in Section  7.2 are
not  satisfied  by 20 March  1999,  Phenomenal  shall be  required by serving an
irrevocable notice (the "March Notice") to HF Jewellery or the Lams before March
31, 1999 to elect either one of the following options (i) or (ii).

(a)  Under  option  (i),  Phenomenal  shall  cause HF  Jewellery  to redeem  the
     Redeemable Preference Shares in accordance with Section 7.4 without further
     subscribing for any shares in List Co with any of the Aggregate  Redemption
     Amount received from the redemption.

(b)  Under  option  (ii),  Phenomenal  shall  cause HF  Jewellery  to redeem the
     Redeemable  Preference Shares in accordance with Section 7.4, and, provided
     that it is  established  before  March 31, 1999 by HF Jewellery or the Lams
     that  condition  (a) set out in Section  7.2 has been  satisfied,  shall be
     obliged  to  apply  part  or all  of the  Aggregate  Redemption  Amount  to
     subscribe  for shares in List Co pursuant to Section 7.5. If condition  (a)
     set out in  Section  7.2 has not been  satisfied  before  March  31,  1999,
     Phenomenal  shall be obliged to continue to hold the Redeemable  Preference
     Shares and shall not have the right to require HF  Jewellery or the Lams to
     redeem  any of the  Redeemable  Preference  Shares  until  such  time  when
     condition (a) set out in Section 7.2 is  satisfied,  which time in no event
     shall be later than June 30,  1999,  under  which  circumstance  Phenomenal
     shall be obliged to cause the  redemption  and subscribe for shares in List
     Co pursuant to Section 7.5. If the  condition (a) set out in Section 7.2 is
     not satisfied by June 30, 1999, Phenomenal shall have the right but not the
     obligation  by serving an  irrevocable  notice  (the "June  Notice")  to HF
     Jewellery or the Lams to cause a redemption  of the  Redeemable  Preference
     Shares and elect to apply  none,  part or all of the  Aggregate  Redemption
     Amount to  subscribe  for shares in List Co until such time when  condition
     (a) set out in Section 7.2 is satisfied,  at which time Phenomenal shall be
     obliged to serve an  irrevocable  notice to HF Jewellery or the Lams within
     ten (10) days after satisfaction of condition (a) set out in Section 7.2 to
     cause HF Jewellery to redeem the Redeemable  Preference Shares and elect to
     apply none, part or all of the Aggregate Redemption Amount to subscribe for
     shares in List Co pursuant to Section 7.5.



                                       -7-
<PAGE>


Section 7.4 Determination and Payment of Redemption Amount.

The  Aggregate  Redemption  Amount  shall mean and consist of (i)  US$10,000,000
representing a return of capital;  and (ii) a dividend  payable at the same time
with (i), and collectively  shall be calculated in accordance with the following
formula:

ARA = US$10,000,000 x (1 + n x 0.1956/365)

where
-----

ARA = the  aggregate  redemption  amount  (the  "Aggregate  Redemption  Amount")
payable by HF Jewellery to  Phenomenal  for the  redemption of all the 5,263,788
Redeemable Preference Shares held by Phenomenal.

n = number  of days  elapsing  from  March  20,  1998 to the date the  Aggregate
Redemption Amount is paid to Phenomenal,  which in any event will not exceed 365
days.

Only in the event of either (a) a redemption  by HF Jewellery of the  Redeemable
Preference  Shares  held by  Phenomenal  pursuant  to  Section  7.3 (a)  whereby
Phenomenal  has served the March Notice  electing not to subscribe for shares in
List Co; or (b) where  condition (a) set out in Section 7.2 not being  satisfied
by June 30, 1999 pursuant to Section  7.3(b) and  Phenomenal has served the June
Notice to HF Jewellery or the Lams, HF Jewellery shall be required to tender the
payment in lawful U.S.  currency for (i) the Aggregate  Redemption Amount within
90 days of the date of the March Notice or the June Notice,  as the case may be,
served by Phenomenal under Section 7.3; and (ii) a special  dividend  calculated
under the formula below shall accrue and be payable  together with the Aggregate
Redemption Amount on the date the payment for the Aggregate Redemption Amount is
made:

SD = US$10,000,000 x (n x 0.1956/365 )

where
-----

SD = special dividend
n = number  of days  elapsing  from  March  20,  1999 to the date the  Aggregate
Redemption  Amount is paid to Phenomenal.

Section 7.5 Subscription of Shares.

Immediately upon the payment by HF Jewellery of the Aggregate  Redemption Amount
in  respect  of the  Redeemable  Preference  Shares  pursuant  to  Section  7.4,
Phenomenal  shall be obliged to  subscribe  for that number of shares in List Co
using all or part of the  Aggregate  Redemption  Amount paid by HF  Jewellery to
Phenomenal  for the  redemption of all of the 5,263,788  Redeemable  Preferences
Shares held by Phenomenal pursuant to Section 7.2 as follows:

(a)  For an aggregate  subscription of US$10 million,  Phenomenal will subscribe
     for such  number  of  shares  in the List Co  representing  29.14% of total
     number of  outstanding  ordinary  shares in List Co without  taken into any
     shares to be issued and  allotted  under the  Listing.  The per share issue
     price  shall be US$ 10  million  divided  by the  number of  shares  issued
     pursuant to this paragraph.



                                       -8-
<PAGE>


(b)  For any amount in excess of US$  10,000,000,  Phenomenal will subscribe for
     shares  in List Co at a price per share  13.16%  higher  than the price per
     share paid for the first 29.14% shares under Section 7.5(a).

(c)  In the  event a  special  dividend  is paid  pursuant  to the June  Notice,
     Phenomenal  may elect to apply the  proceeds  of such  special  dividend to
     subscribe  for any  additional  shares  in List Co at the per  share  price
     stated in (b) hereinabove.


Section 7.6 Shareholders Agreement.

S.W.  Lam,  Inc. and the Lams shall further  procure,  and Quality  Prince shall
further  agree that upon the  subscription  of the shares by  Phenomenal  or its
nominee as provided in Section 7.3, the shareholders of List Co shall enter into
a shareholders agreement with Phenomenal or its nominee in the form specified in
Schedule 5. It is expressly  agreed and  acknowledged  that such agreement shall
terminate  and  shall  become  void and cease to have any force or effect on the
date being the date of any prospectus (the "Prospectus Date") that may be issued
by  List  Co in  respect  of  the  initial  public  offer  in the  course  of an
application  for listing of the shares of List Co or such earlier date as may be
agreed by the parties.

Section 7.7 Market Capitalization.

Phenomenal hereby agrees and covenants by its execution hereof, that List Co may
seek a listing of the shares on The Stock Exchange of Hong Kong Limited  without
the consent of Phenomenal  (or any affiliated  company of Phenomenal)  under the
Original Agreement,  this Deed or any shareholders agreement to which Phenomenal
is a party, provided that:

(a)  the notional market  capitalization  expressed in Hong Kong dollars of List
     Co immediately prior to the commencement of trading of List Co on The Stock
     Exchange of Hong Kong Limited shall be not less than HK$ 2.5 x 18,063,158 x
     A.

     where
     -----
 
     A = represents the US$/HK$ exchange rate prevailing on the date of issuance
     of the  prospectus,  under  which  an  initial  public  offer  is  made  to
     facilitate the Listing.

(b)  In this Section 7.7 notional  market  capitalisation  shall mean the amount
     calculated as follows:

     MC = N x IP

     where
     -----

     MC - is the notional market capitalisation



                                       -9-
<PAGE>


     N - is the  number of shares  in issue on the first day of  trading  of the
     shares of List Co on The Stock Exchange of Hong Kong Limited

     IP - means the issue price of shares to be issued under the initial  public
     offer prior to such listing.

Section 7.8 Right to Appoint Board Representative.

S. W. Lam,  Inc.,  Quality  Prince,  and the Lams hereby agree and covenant that
they will  procure  that while  Phenomenal  or it nominees  hold twenty per cent
(20%) or greater of the total issued share capital of List Co,  Phenomenal shall
have the right to appoint one Director to the Board of Directors of the List Co.


ARTICLE 8. WARRANTIES AND REPRESENTATIONS

Section 8.1 Representations and Warranties.

Mr. Lam, Mrs. Lam, S.W.  Lam,  Inc.,  Quality  Prince and HF Jewellery do hereby
jointly and severally represent and warrant as follows:

(a)  The  details of HF  Jewellery  specified  in  Schedule 6 are  complete  and
     accurate  in all  respect and  without  limitation,  Quality  Prince is the
     holding  company  of the Hang Fung  Group in the  manner  specified  in the
     organizational chart annexed to Schedule 6.

(b)  The  representations  and  warranties  under  Article  5  in  the  Original
     Agreement were true and accurate when made and,  except as hereby  rendered
     obsolete or  inconsistent  by this Deed,  remain  true and  accurate in all
     material respects as of this date.

(c)  Each of the parties has obtained all consents and authorizations  necessary
     or required for it to meet and perform the  conditions of this Deed and the
     Deed  constitutes a legal,  valid, and binding  obligation,  enforceable in
     accordance with its provisions.


ARTICLE 9. MISCELLANEOUS

Section 9.1 Continued Effect of Original Agreement.

All provisions of the Original Agreement, except as modified by this Deed, shall
remain in full force and effect and are reaffirmed. Each party acknowledges that
it, as its respective  interests  appear, is liable for all damages arising from
nonperformance  under this Deed if all  conditions of this Deed are not met; and
that if this  Deed is  performed  such  performance  shall be  accepted  as full
performance  of its  obligations  under the  Original  Agreement.  Other than as
stated in this Deed, this Deed shall not operate as a waiver of any condition or
obligation   imposed  on  the  parties   under  the  Original   Agreement.   All
representations  and  warranties  under  Article 5 and all the  affirmative  and
negative covenants under Articles 7 and 8 of the Original Agreement attributable
to  Quality  Prince  Limited  shall be  deemed  to also  have  been  made by and
applicable to HF Jewellery.



                                      -10-
<PAGE>


Section 9.2 Further Assurances.

The  parties  shall at their own cost and expense  execute  and deliver  further
documents and instruments and shall take such other actions as may be reasonably
required or appropriate to evidence or carry out the intent and purposes of this
Deed.

Section 9.3 Interpretation of Deed.

In  the  event  of any  conflict,  inconsistency,  or  incongruity  between  any
provision  of this  Deed  and  any  provision  of the  Original  Agreement,  the
provisions of this Deed shall prevail.

Section 9.4 Governing Law and Severability.

This Deed shall be governed by and construed in accordance  with the laws of the
Hong Kong SAR and the parties submit to the  non-exclusive  jurisdiction  of the
courts  of the  Hong  Kong  SAR.  If a court  or  other  tribunal  of  competent
jurisdiction holds any provision of this Deed to be unenforceable, the remaining
portions of this Deed shall remain in full force and effect.

Section 9.5 Entire Agreement.

This  Deed,  together  with  the  Original  Agreement,  constitutes  the  entire
agreement  between the parties  hereto  pertaining to the subject matter of this
Deed,  and any and all other  written or oral  agreements  existing  between the
parties  before the date of this Deed with respect to the subject matter of this
Deed, except pertinent parts of the Original Agreement, are expressly cancelled.



                                      -11-
<PAGE>


EXECUTED as a deed:


THE COMMON SEAL of                       )
PHENOMENAL LIMITED                       )
was hereunto affixed in accordance       )
with its Articles of Association         )
in the presence of:                      )



------------------------------------------                                      
Director


THE COMMON SEAL of                      )
S.W. LAM, INC.                          )
was hereunto affixed in accordance      )
with its Bylaws                         )
in the presence of:                     )



------------------------------------------                                      
Lam Sai Wing, President


------------------------------------------                                      
Chan Yam Fai, Jane, Secretary


THE COMMON SEAL of                      )
QUALITY PRINCE LIMITED                  )
was hereunto affixed in accordance      )
with its Articles of Association        )
in the presence of:                     )



------------------------------------------                                      
Director




                                      -12-

<PAGE>



SIGNED, SEALED and                       )
DELIVERED by LAM SAI WING                )
[HKID:  D526157(1)]                      )
in the presence of:                      )


                                                                  

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


SIGNED, SEALED and                      )
DELIVERED by CHAN YAM FAI, JANE         )
[HKID: G293329(1)]                      )
in the presence of:                     )


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


THE COMMON SEAL of                      )
HANG FUNG GOLD TECHNOLOGY LIMITED       )
was hereunto affixed in accordance      )
with its Bye-laws                       )
in the presence of:                     )



------------------------------------------                                      
Director


THE COMMON SEAL of                      )
HANG FUNG JEWELLERY COMPANY LIMITED     )
was hereunto affixed in accordance      )
with its Articles of Association        )
in the presence of:                     )



------------------------------------------                                      
Director



THE COMMON SEAL of                       )
SOYCUE LIMITED                           )
was hereunto affixed in accordance       )
with its Articles of Association         )
in the presence of:                      )



------------------------------------------                                      
Director



                                       13
<PAGE>


                                   Schedule 1

                              INVESTMENT AGREEMENT




                                       14
<PAGE>

                                   Schedule 2

                RIGHTS, RESTRICTIONS, PRIVILEGES, AND PREFERENCES
                         OF REDEEMABLE PREFERENCE SHARES


The nature and extent of the preferences,  rights,  privileges, and restrictions
granted to or imposed on the holders of the Redeemable  Preference Shares are as
follows:

(a)  Redemption  Right by holder:  holders of the Redeemable  Preference  Shares
     shall  be  entitled  on or  after  March  20,  1999  pursuant  to a Deed of
     Amendment, dated June ________, 1998, to which HF Jewellery is a party (the
     "Deed")  to  deliver  to HF  Jewellery  for  redemption  a  certificate  or
     certificates for the Redeemable  Preference Shares,  properly endorsed,  at
     which  time  HF  Jewellery  shall  redeem  the  shares  represented  by the
     certificate or  certificates  by paying to each  registered  shareholder of
     Redeemable  Preference  Shares, in cash, the value of the shares determined
     in accordance with the following formula:

     The  aggregate   redemption  amount  shall  consist  of  (i)  US$10,000,000
     representing a return of capital;  and (ii) a dividend  payable at the same
     time with (i) , and collectively shall be calculated in accordance with the
     following formula:

     ARA = US$10,000,000 x (1 + n x 0.1956/365)

     where
     -----

     ARA = the aggregate  redemption amount (the "Aggregate  Redemption Amount")
     payable  by HF  Jewellery  to  Phenomenal  for  the  redemption  of all the
     5,263,788 Redeemable Preference Shares held by Phenomenal.

     n = number of days  elapsing  from March 20, 1998 to the date the Aggregate
     Redemption Amount is paid to Phenomenal, which in any event will not exceed
     365 days.

 
(b)  Special Dividend Entitlement: holders of Redeemable Preference Shares shall
     be entitled to a special dividend pursuant to Section 7.4 of the Deed.

(c)  Voting Rights: holders of Redeemable Preference Shares shall have no voting
     rights in respect of any general  meeting of HF Jewellery,  save and except
     for any resolution:

     (i)  under which the rights attaching to Redeemable  Preference  Shares may
          be varied in any manner;

     (ii) any resolution in respect of the winding up of HF Jewellery;

     (iii)any  resolution  to  issue  additional  shares  in the  capital  of HF
          Jewellery or provide mandate to directors to issue the same.



                                      -15-
<PAGE>


(d)  Winding-Up:  holders of Redeemable  Preference Shares shall on a winding up
     of HF Jewellery  rank for priority to holders of ordinary  shares,  so that
     any surplus  assets  proceeds or assets shall be  distributed to holders of
     Redeemable  Preference  Shares,  so as to repay  the  Aggregate  Redemption
     Amount prior to any distribution to ordinary shareholders.




                                      -16-
<PAGE>

                                   Schedule 3

                              PUT OPTION AGREEMENT


                                Date day of 1998



                                  LAM SAI WING

                               CHAN YAM FAI, JANE



                                       and



                               PHENOMENAL LIMITED




                      -----------------------------------
                              PUT OPTION AGREEMENT

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







                           Jones, Day, Reavis & Pogue
                       29th Floor, Entertainment Building
                             30 Queen's Road Central
                                    Hong Kong
                           Telephone: (852) 2526-6895
                           Facsimile: (852) 2868-5871


                                      -17-
<PAGE>


PUT OPTION AGREEMENT made on _______ day of _______, 1998.

BETWEEN

(1)  Lam Sai Wing (Hong Kong Identity Card No.:  D526157 (1)) of Unit 25-32, 2nd
     Floor,  Block B,  Focal  Industrial  Centre,  21 Man Lok  Street,  Hunghom,
     Kowloon,  and Chan Yam Fai, Jane (Hong Kong Identity Card No. G293329(1) of
     the same address (collectively the "Optionor"); and

(2)  Phenomenal  Limited,  a company  incorporated under the laws of the British
     Virgin  Islands and whose  registered  office is at P.O. Box 957,  Offshore
     Incorporations  Centre,  Road Town,  Tortola,  British  Virgin Islands (the
     "Optionee").

RECITALS

A.   At the  request  of the  Optionor  and  pursuant  to the terms of a deed of
     amendment (the "Deed") dated June _______, 1998 between the Optionor,  Hang
     Fung Jewellery  Company Limited,  a company  incorporated in Hong Kong with
     its registered office at Units 25-32, 2nd Floor,  Block B, Focal Industrial
     Centre,  21 Man Lok Street,  Hunghom,  Kowloon,  Hong Kong (the "Company"),
     S.W. Lam, Inc.,  Quality Prince  Limited,  Soycue  Limited,  Hang Fung Gold
     Technology  Limited  ("List Co") and the Optionee,  the Optionee  agrees to
     replace a convertible  note in the sum of  US$10,000,000  issued by Quality
     Prince Limited to Optionee with an investment in the Company in the form of
     Redeemable Preference Shares in the capital of the Company.

B.   The  Company  has  issued  5,263,788  Redeemable  Preference  Shares to the
     Optionee (the "Redeemable Preference Shares") on the terms specified in the
     Deed and the Company's Memorandum and Articles of Association.

C.   It is a condition  of the Deed that the  Optionor  will grant to Optionee a
     put option pursuant to this Put Option Agreement.

NOW IT IS HEREBY AGREED:

1.   PUT OPTION AGREEMENT
     --------------------
     In  consideration  of the  Optionee  entering  into the Deed,  the Optionor
     grants to the Optionee an option to require Optionor to purchase all of the
     5,263,788 Redeemable Preference Shares in the Company (the "Option Shares")
     held by the Optionee under the following terms and conditions.

1.1  Optionee shall have the right to require Optionor to purchase or to procure
     purchasers  for all of the Option Shares from Optionee if the Company shall
     default in redeeming the Option  Shares  pursuant to the Deed and the terms
     of issue of the Option Shares.



                                      -18-
<PAGE>


1.2  Optionee may exercise  this Put Option by giving  written  notice (the "Put
     Option  Notice") to Optionor (or any one of them) at the address  specified
     in Clause 7 herein, stating that the Put Option is thereby exercised.  Such
     Put Option  Notice may be given any time after the  failure of the  Company
     described in Section 2.2 of the Deed has occurred.

1.3  Within  90 days  after  the date of  service  of the Put  Option  Notice on
     Optionor by Optionee,  Optionor shall be obliged to pay to Optionee the Put
     Option  Exercise  Price as defined  below  payable  for the  Option  Shares
     calculated in accordance  with Clause 1.4 and Optionee  shall be obliged to
     deliver  to  Optionor,  or as  Optionor  may  direct,  the  certificate  or
     certificates  relating to the Option Shares  together with an instrument of
     transfer and bought and sold note in respect thereof  executed by Optionee,
     such instrument of transfer to be in a registrable form in all respects.

1.4  The purchase price (the "Put Option Exercise Price") payable by Optionor to
     Optionee in respect of the Option Shares shall be the Aggregate  Redemption
     Amount  calculated  pursuant to Section 7.4 of the Deed,  together  with an
     additional amount representing  interest calculated on a daily basis at the
     rate of  19.56%  per  annum  for the  period  commencing  from the date the
     Aggregate  Redemption  Amount is due under the Deed to the date the payment
     is made by Optionor.

1.5  Optionee warrants that upon the exercise of the Put Option:

     (a)  the Option Shares shall be free from any lien, charge,  encumbrance or
          interest of any kind whatsoever; and

     (b)  the Option  Shares shall be sold  together  with all rights  attaching
          thereto at the date of the exercise of such option.

2.   INDEMNITY
     ---------

     Without  prejudice  to the  provisions  contained in Clause 1, the Optionor
     unconditionally  and irrevocably  undertakes and covenants,  as a separate,
     additional and continuing obligation, to indemnify the Optionee against all
     losses, liabilities,  damages, costs and expenses whatsoever arising out of
     any  failure by the  Company to redeem the Option  Shares  pursuant  to the
     Deed.  This indemnity shall remain in effect  notwithstanding  that the Put
     Option  under  Clause 1 may cease to be valid or  enforceable  against  the
     Optionor for any reason whatsoever.

     (The put  option  in  Clause 1 and the  indemnity  in Clause 2 given by the
     Optionor are hereinafter collectively referred to as the "Put Option".)

3.   SECURITY
     --------          

3.1  Neither the liability of the Optionor nor the validity or enforceability of
     this Put Option shall be prejudiced, diminished, affected or discharged by:



                                      -19-
<PAGE>


     (a)  the granting of any time,  concession  or indulgence to the Company or
          any other person with respect to the redemption of the Option Shares;

     (b)  any variation or  modification of the Deed or any document in relation
          thereto;

     (c)  the invalidity or  unenforceability  of any obligation or liability of
          the Company to the Optionee;

     (d)  any invalidity or  irregularity  in the execution of the Deed or other
          document relating thereto;

     (f)  the  insolvency  or  liquidation  or  any  incapacity,  disability  or
          limitation,  or  any  change  in the  constitution  or  status  of the
          Company.

4.   RECONSTRUCTION OF OPTIONEE
     --------------------------

     This Put Option  Agreement  shall continue to be binding and effective as a
     continuing protection notwithstanding any amalgamation of the Optionee with
     any third party and  notwithstanding  any  reconstruction  of the  Optionee
     involving  the  transfer  of all or any of the assets of the  Optionee to a
     party,  or  notwithstanding  the sale of all or any part of the undertaking
     and assets of the Optionee to a third  party,  whether the third party with
     which the Optionee amalgamates or to whom the Optionee transfers all or any
     of the assets,  either on a reconstruction  or sale as aforesaid,  shall or
     shall not differ in their or in its objects character and construction from
     that of the  Optionee,  it being the intent of the  Optionor  that this Put
     Option  Agreement shall remain valid and effectual in all respects and that
     the benefit of this Put Option  Agreement and all rights conferred upon the
     Optionee  hereby may be  assigned  to and  enforced by such third party and
     enforceable in the same manner to all intents and purposes as if such third
     party had been named herein instead of the Optionee.

5.   WAIVER AND SEVERABILITY
     -----------------------

5.1  No failure  or delay by the  Optionee  in  exercising  any right,  power or
     remedy  hereunder shall impair such right,  power or remedy or operate as a
     waiver  thereof,  nor shall  any  single or  partial  exercise  of the same
     preclude any further  exercise  thereof or the exercise of any other right,
     power or remedy.

5.2  The rights,  powers and remedies  herein provided are cumulative and do not
     exclude any other rights, powers and remedies provided by law.

5.3  Each of the  provisions  in this Put  Option  Agreement  is  severable  and
     distinct  from the  others,  and if at any time any  provision  of this Put
     Option  Agreement is or becomes  illegal,  invalid or  unenforceable in any
     respect  under the law of any  jurisdiction,  the  legality,  validity  and
     enforceability  of such provision under the law of any other  jurisdiction,
     and of the remaining provisions of this Put Option Agreement,  shall not be
     affected or impaired thereby. 



                                      -20-
<PAGE>


6.   ASSIGNMENT
     ----------

     The Optionee  may assign its rights under this Put Option  Agreement or any
     part thereof,  and this Put Option  Agreement shall enure to the benefit of
     the Optionee and its successors and assigns.

7.   NOTICES
     -------

7.1  Delivery

     All notices,  demands or other  communications  which are to be given under
     this Put Option  Agreement  shall be in writing and shall be  addressed  as
     shown below:

     (a)  if to the Optionor or either of them:

          Address:           c/o Units 25-32, 2 nd Floor
                             Block B, Focal Industrial Centre
                             21 Man Lok Street, Hunghom
                             Kowloon
                             Hong Kong

         Facsimile Number:  (852) 2362-3034

     (b)  if to the Optionee:

          Address:          c/o Transpac Group
                            Suite 3322, 33rd Floor
                            Two Pacific Place
                            88 Queensway
                            Hong Kong

          Facsimile Number: (852) 2877-6612

          Attention:        Managing Director, Transpac Group

7.2  Receipt
     -------

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

     (a)  if by delivery in person, when delivered to the addressee;

     (b)  if by facsimile transmission when despatched;

     (c)  if by post:



                                      -21-
<PAGE>


          (i)  on the second  Business Day following day of posting if sent from
               Hong Kong to the  address  of a  recipient  in Hong  Kong  unless
               actually received sooner; or

          (ii) on the seventh  Business Day following the day of posting if sent
               from Hong Kong to the address of an overseas  recipient (and vice
               versa) unless actually received sooner.

7.3  Nothing in this Clause 7 shall preclude the service of communication or the
     proof of such service by any other mode permitted by law.

8.   GENERAL
     -------

8.1  The expressions the "Optionee",  the "Company" and the "Optionor"  whenever
     used here include and extend to their successors, executors, administrator,
     legal representatives and assigns.  Where the context allows the expression
     "security",  the term  shall be deemed to include a  judgement,  specialty,
     guarantee,  indemnity,  negotiable and other  instruments and securities of
     every kind.

8.2  Headings  used in this Put Option  Agreement are for  convenience  only and
     shall not affect its interpretation.

8.3  The  obligations  and  liabilities  of Lam Sai Wing and Chan Yam Fai,  Jane
     under the Put Option Agreement shall be joint and several.

9.   TERMINATION UPON LISTING
     ------------------------

     Notwithstanding  any other  provisions  herein,  this Put Option  Agreement
     shall terminate and shall become void and cease to have any force or effect
     on the date being the date of any prospectus  that may be issued by List Co
     in respect of the listing of the shares of List Co on The Stock Exchange of
     Hong Kong Limited.

10.  GOVERNING LAW AND ARBITRATION
     -----------------------------

     This  Put  Option  Agreement  is  governed  by  and is to be  construed  in
     accordance  with the laws of Hong Kong SAR and the parties hereto submit to
     the non exclusive jurisdiction of the courts of Hong Kong.



                                      -22-
<PAGE>


IN WITNESS whereof the Optionor has duly executed this Put Option Agreement as a
deed.


SIGNED, SEALED AND DELIVERED by     )       Signature
LAM SAI WING                        )
in the presence of:                 )       ------------------------------------


------------------------------------                                            
Name:


SIGNED, SEALED AND DELIVERED by     )       Signature
CHAN YAM FAI, JANE                  )
in the presence of:                 )       ------------------------------------


------------------------------------                                            
Name:


THE COMMON SEAL of                          )
PHENOMENAL LIMITED                          )
was hereunto affixed in accordance with its )
Articles of Association                     )
in the presence of:                         )


------------------------------------                                            
Director



                                      -23-
<PAGE>


                                   Schedule 4

                      EXTENSION AND MODIFICATION AGREEMENT
                 S. W. LAM, INC. - COMMON STOCK PURCHASE WARRANT


     THIS EXTENSION  refers to a Warrant to Purchase  5,263,158 shares of Common
Stock in S.W. Lam, Inc. (the "Common  Stock")granted  to Phenomenal  Limited,  a
British Virgin Islands corporation, on May 20, 1997 (the "Warrant"). The Warrant
will be void after May 31, 1998.

     S.W. Lam, Inc. Phenomenal  Limited,  and all the other parties to a certain
"Investment Agreement for a Warrant to Purchase 5,263,158 Shares of Common Stock
of S.W. Lam, Inc. and a US$10,000,000  Convertible  Note  Certificate of Quality
Prince Ltd." (the "Original Agreement") have agreed to restructure the financing
provided  thereunder by entering into a Deed of Amendment  amending the Original
Agreement  (the  "Deed").  The Deed  contemplates  an  extension  of the Warrant
through May 31, 1999, or the Prospectus Date (as defined in the Deed), whichever
date is earlier,  and to adjust the number of shares of Common Stock  subject to
the Warrant.

     In  consideration  of the mutual  obligations  in the Deed,  S.W. Lam, Inc.
agrees to and hereby  extends  the term of the Warrant to May 31,  1999,  or the
Prospectus  Date (as defined in the Deed),  whichever  date is earlier,  and the
date "May 31, 1998" appearing on the first page and in Sections 3(i) and 5(e) of
the Warrant shall be substituted  with the date "May 31, 1999, or the Prospectus
Date (as defined in the Deed),  whichever date is earlier." The number of shares
of Common  Stock  subject to the Warrant  shall be adjusted in  accordance  with
Section 4.2 under the Deed.

     S.W. Lam, Inc. agrees that except as hereby modified as to the term and the
dates of the  Warrant,  the  Warrant  shall  remain in full  force and effect in
accordance  with all the terms  and  conditions  as  originally  stated  therein
through May 31, 1999, or the Prospectus Date (as defined in the Deed), whichever
date is earlier.

Dated:   April ______________, 1998
                                                S.W. Lam, Inc.

                                                By: 
                                                   -----------------------------
                                                   Lam Sai Wing, President

                                                By:
                                                   -----------------------------
                                                   Chan Yam Fai, Jane, Secretary

HOLDER OF WARRANT:


-----------------------------                                            
Phenomenal Limited
By:                                         
   --------------------------


                                      -24-
<PAGE>

                                   Schedule 5

                        SHAREHOLDERS AGREEMENT (List Co)

THIS   SHAREHOLDERS   AGREEMENT   AND  DEED   (the   "Agreement")   is  made  on
________________, 19________.

BETWEEN

(1)  PHENOMENAL  LIMITED, a company  incorporated in the British Virgin Islands,
     at P.O.  Box 957,  Offshore  Incorporations  Centre,  Road  Town,  Tortola,
     British Virgin Islands ("Phenomenal")

(2)  QUALITY  PRINCE  LIMITED,  a company  incorporated  in the  British  Virgin
     Islands,  at P.O. Box 3444,  Road Town,  Tortola,  British  Virgin  Islands
     ("QPL")

RECITALS

A.   QPL is the holder of __________ Shares in Hang Fung Gold Technology Limited
     (the "List Co"), and Phenomenal is the holder of _______Shares in List Co.

B.   By this  Agreement,  the  undersigned  parties desire to establish  certain
     mutual rights, obligations, and covenants as set forth herein.

NOW IT IS AGREED AS A DEED AS FOLLOWS:

1.   CERTAIN DEFINITIONS
     -------------------

     As used in this  Agreement,  the  following  terms shall have the following
     respective meanings:

     "Associates"      means, with reference to any person, a spouse;  and 
                       relative of that person within  the third degree;  
                       any director, officer, or employee  of that person, 
                       any corporation,  association,  firm, or other entity
                       of which that person is a member,  director, officer,
                       or employee; and any other person directly or indirectly 
                       controlling or controlled by, or under direct of indirect
                       common control with, that person.

      "Board"          means the board of directors of List Co.



      "Control"        means the ownership of 51 percent or more of the  voting
                       power of the corporate entity.



                                      -25-
<PAGE>


      "Deed"           means the Deed of Amendment entered into between 
                       Phenomenal,  QPL, List Co, and certain other parties on 
                       June ____, 1998.

      "Director"       means a director of the board of directors of List Co.

      "Hang Fung Group"means  Hang Fung  Jewellery  Company  Ltd.,  a Hong Kong 
                       corporation,  and Kai Hang Jewellery Company Ltd., a Hong
                       Kong  corporation,  both of which are wholly owned 
                       subsidiaries of QPL.

      "Investment      means the Investment Agreement executed by and among 
       Agreement"      SWL, QPL, Phenomenal  Limited,  Lam Sai Wing and Chan Yam
                       Fai, Jane in Hong Kong on May 20, 1997.

      "List Co"        means Hang Fung Gold Technology Limited

      "Phenomenal"     means Phenomenal Limited, a British Virgin Islands 
                       corporation.
 
      "QPL"            means  Quality  Prince  Limited,  a  company incorporated
                       in the  British Virgin Islands.

      "Shareholder"    means a holder of Shares.

      "Shares"         means all [#] outstanding and issued common or ordinary 
                       shares in List Co.

      "SWL"            means S. W. Lam,  Inc. a  corporation  organized  under 
                       the laws of the State of Nevada.

2.   APPOINTMENT OF DIRECTORS AND MEETINGS OF SHAREHOLDERS AND DIRECTORS
     -------------------------------------------------------------------

2.1  Appointment of Directors
     ------------------------

     Phenomenal shall have the right to appoint, or effectively have the ability
     to elect a minimum of one (1)  Director to the board of  directors  of List
     Co. Such a Director appointed by Phenomenal shall have the right to approve
     or disapprove any major actions of List Co,  including  without  limitation
     those  specified  in Section  3.1 herein.  The parties  hereto may agree to
     increase the number of Directors representing the interest of Phenomenal to
     more  than one (1) to  reflect  any  increase  in the  proportional  equity
     interest of Phenomenal in List Co. If any director(s)  nominated or elected
     directly or indirectly by Phenomenal shall resign or otherwise cease to act
     as a director  any  replacement  or  substitute  shall also be nominated or
     elected by Phenomenal.



                                      -26-
<PAGE>


2.2  Calling of meetings
     -------------------

     Any Shareholder  shall have the right to call a shareholders'  meeting upon
     at least seven days' notice to the other  Shareholders.  Any Director shall
     have the right to call a board of  directors'  meeting  upon at least  five
     days' notice.  All the board meetings and shareholders'  meeting of List Co
     shall be held in Hong Kong, unless otherwise unanimously agreed upon by all
     the Shareholders or Directors.

2.3  Quorum
     ------
          
     The presence of a Director  appointed or elected by Phenomenal at any Board
     meetings   shall  be  a  condition   for  a  quorum.   The  presence  of  a
     representative  of  Phenomenal  at any  Shareholders'  meeting  shall  be a
     condition for a quorum,  except after  adjournment  with notice of at least
     three days.

2.4  Deed of Bylaws, etc.
     -------------------

     The  provisions  under  Sections  2.1  through  2.3 shall be binding on the
     parties  to the  extent  they  are not  inconsistent  with  the laws of the
     jurisdiction of List Co.

3.   APPROVAL FOR MAJOR ACTIONS AND REPORTING REQUIREMENTS
     -----------------------------------------------------

3.1  Actions requiring Approvals
     ---------------------------

     Any of the following actions  undertaken by List Co or any companies within
     the Hang Fung Group shall require Board approval of List Co.

     (a)  amendment to the  bye-laws and  memorandum  of  association,  material
          changes  in  the  business,  winding  up of  List  Co or  any  of  its
          subsidiaries or affiliates,  or mergers or acquisitions of disposal of
          other companies,  otherwise than for the purpose of reorganizing  List
          Co and its  subsidiaries  in preparation for the listing of List Co on
          the Hong Kong Stock Exchange.

     (b)  increase of authorized  capital,  or issuance of new shares or options
          or of any other  interests in shares,  or any capital  reorganization,
          otherwise  than  for  the  purpose  of  reorganizing  List  Co and its
          subsidiaries  in  preparation  for the  listing of List Co on the Hong
          Kong Stock Exchange.

     (c)  approval of annual  budgets and  business  plans,  and any proposed or
          actual  increase of 10 percent or more over the total budgeted  amount
          for capital,  operating and any other  expenditures under the business
          plans approved.

     (d)  capital  expenditures  exceeding  HK$1 million per item,  or any other
          major asset commitments or disposal.

     (e)  any banking  facilities or other  assumptions  of liability out of the
          ordinary course of business, or the granting of any security interest.

     (f)  the  granting of any gifts or the  guaranteeing  of any third  party's
          obligations.



                                       27
<PAGE>


     (g)  any  activities  not in the  ordinary  course  of  business,  and  any
          transactions   that  may  involve  a  conflict  of  interest  for  any
          shareholder or director or that are otherwise  conducted other than at
          arm's length.

     (h)  any declaration of dividends by List Co or its subsidiaries.

     (i)  any change in auditor or financial year end.

3.2  Continuing Reporting Requirements
     ---------------------------------

     All the financial  reporting  requirements  and  obligations  of List Co to
     Phenomenal  as  specified in Sections  7.02 through 7.09 of the  Investment
     Agreement  shall  continue in full force and  effect,  until List Co's or a
     successor  company's  common or  ordinary  shares are  listed and  publicly
     traded on the Hong Kong  Stock  Exchange  or  another  national  securities
     exchange.

3.3  Disposition of Shares in Hang Fung Group
     ----------------------------------------

     The  parties  agree  they  shall  procure  that  there  shall  not  be  any
     disposition  or transfer of any shares in the  companies  constituting  the
     Hang Fung Group,  including without  limitation Hang Fung Jewellery Company
     Limited  and Kai Hang  Jewellery  Company  Limited  by List Co or any other
     party without the written  consent of  Phenomenal,  otherwise  than for the
     purpose of reorganizing List Co and its subsidiaries in preparation for the
     listing of List Co on the Hong Kong Stock Exchange.

4.   TRANSFER OF SHARES
     ------------------

4.1  Restrictions on Transfers
     -------------------------

     Save as provided in Section 4.2, no Shareholders of List Co shall, or shall
     attempt  or  offer  to sell,  transfer,  assign  or  otherwise  dispose  of
     ("Transfer") any of its Shares except for transfer to one of more corporate
     entities which are affiliated or under common control with the Shareholder.
     Any purported  Transfer by such a Shareholder of its shares in violation of
     this Section 4 shall be void and of no force or effect.

4.2  Right of First Refusal
     ----------------------

     Except as provided in Section  4.1 hereof,  if at any time any  Shareholder
     (the "Transferring Shareholder") desires to Transfer any of its Shares (the
     "Offered  Stock"),  such Transfer shall take place only in accordance  with
     the following procedures:

     (a)  The Transferring Shareholder shall give written notice ("Shareholder's
          Notice") to the other  Shareholders of the Shares  (collectively,  the
          "Offerees")  within ten (10) days after receipt of written,  bona fide
          offer (the "Offer") from a third party (the  "Offeror"),  which notice
          is  signed  by the  Transferring  Shareholder  and sets  forth all the
          material  terms  of  the  Offer   (including   (i)  the   Transferring
          Shareholder's  bona fide intention to transfer the Offered Stock; (ii)
          the number of shares of the Offered Stock; (iii) the name, address and
          relationship,  if any, to the Transferring Shareholder of the Offeror;
          and (iv) the bona fide cash  price or,  in  reasonable  detail,  other
          consideration,  per  share  for  which  the  Transferring  Shareholder
          proposes  to  transfer  such  Offered  Stock (the  "Offered  Price")),
          together  with  copies  of any  agreement  or  documents  executed  or
          delivered,  or  to be  executed  or  delivered,  by  the  Transferring
          Shareholder and the Offeror.



                                      -28-
<PAGE>


     (b)  The  Offerees  shall have the  exclusive  right for a period of thirty
          (30)  days  after  receipt  of  the  Shareholder's  Notice  ("Exercise
          Period")  to notify  the  Transferring  Shareholder  of the  Offerees'
          election to purchase the shares of Offered Stock on the same terms and
          conditions  contained  in the Offer  ("Right of First  Refusal").  The
          Offerees'  rights to  purchase  the shares of Offered  Stock  shall be
          prorata to their  respective  holdings of List Co's capital stock on a
          fully diluted basis. An Offeree's prorata share shall be determined by
          dividing  the number of Shares and Common  Stock held by an Offeree by
          the total number of Shares and Common Stock held by all Offerees.  Any
          Offeree  that wishes to exercise the Right of First  Refusal  shall so
          notify List Co and the  Transferring  Shareholder  within the Exercise
          Period.  If any Offeree  does not make such  election to exercise  the
          Right of First  Refusal  within the Exercise  Period,  such  declining
          Offeree  shall  give  written  notice  ("Declining   Notice")  to  the
          remaining Offerees and such remaining Offerees shall have the right to
          purchase any shares of Offered  Stock not  purchased by the  declining
          Offeree or Offerees,  which purchase shall be prorata if more than one
          remaining  Offeree  elects  to make  such  purchase.  An  election  to
          purchase the shares of Offered  Stock not  purchased by the  declining
          Offeree  or  Offerees  shall be made by  written  notice  to the other
          Offerees  and List Co within  fifteen  (15) days after  receipt of the
          Declining  Notice  ("Additional  Exercise  Period").  Within five days
          after expiration of the Additional  Exercise Period, List Co will give
          written  notice  (the   "Expiration   Notice")  to  the   Transferring
          Shareholder and to the Offerees specifying the shares of Offered Stock
          that were subscribed by the Offerees  exercising  their Right of First
          Refusal.

     (c)  In the event that no Offeree  elects to purchase the shares of Offered
          Stock (or if such elections are made with respect to less than all the
          shares of Offered Stock) within the Exercise Period and the Additional
          Exercise  Period,  the Transferring  Shareholder  shall have the right
          during the  ensuing  thirty (30) day period to Transfer to the Offeror
          the shares of Offered  Stock  offered to the Offerees on the terms set
          forth in the Shareholder's Notice. The Offeror shall as a condition to
          each  such  purchase  execute  a  counterpart  of  this  Agreement  or
          otherwise  agree in writing (in such form as shall be  satisfactory to
          the Board of  Directors  of List Co) to be bound by this  Agreement to
          the same extent that the  Transferring  Shareholder was bound. If such
          Transfer is not  completed  within  such  thirty (30) day period,  the
          Transferring  Shareholder shall be required,  before  Transferring its
          shares to any third  party,  to reoffer the shares to the  Offerees in
          the manner set forth in this Section 4.2.

     (d)  The  Transfer  of the  shares  of  Offered  Stock  resulting  from the
          acceptance  of the Offer by one or more  Offerees in  accordance  with
          this Section 4.2 shall take place at a closing on a date designated by
          List Co within ten (10)  business  days  following  acceptance  of the
          Offer  by  such  Offeree  or  Offerees  or  such  other  time  as  the
          Transferring  Shareholder  and the Offerees shall mutually  agree.  At
          such closing, each Offeree shall pay the purchase price for the shares
          of Offered Stock against delivery by the  Transferring  Shareholder of
          (I) documentary evidence reasonably satisfactory to the Offeree of the
          Transfer of all shares to such  Offeree and (ii) a sales  agreement in
          form reasonably  satisfactory to the Offeree  containing,  among other
          things, a representation and warranty by the Transferring  Shareholder
          that the  Transferring  Shareholder  is, and the Offeree shall be, the
          record and  beneficial  owner of such shares with good title  thereto,
          free and clear of all liens and encumbrances.



                                      -29-
<PAGE>


4.3  Tack Along and Repurchase Option
     --------------------------------

     Subject to Section 4.4 below, QPL and any of its Associates  holding Shares
     in  List  Co  (each  an  "Applicable   Shareholder"  and  collectively  the
     "Applicable  Shareholders")  shall jointly and  severally,  before making a
     transfer  or  other  disposal  of  any of  their  Shares  (the  "Applicable
     Shareholders'  Transfer Shares") to a third party,  procure that such third
     party  offers to acquire from  Phenomenal  the same  proportionate  part of
     Phenomenal's Shares as the number of the Applicable  Shareholders' Transfer
     Shares bears to all the Shares held by the Applicable Shareholders, and any
     such offer shall:

     (a)  in relation to the acquisition of Phenomenal's  Shares, be on the same
          terms (subject to Sub-Section  (b) below) as to price per Share,  time
          of  payment  and  sharing  of stamp  duty as those  applicable  to the
          proposed  transfer by the  Applicable  Shareholders  of the Applicable
          Shareholders'  Transfer Shares and be conditional  upon the Applicable
          Shareholders  actually   transferring  the  Applicable   Shareholders'
          Transfer  Shares and  customary  warranties as to title being given by
          Phenomenal; and

     (b)  where the offers extended to the Applicable  Shareholders  are not the
          same as among  them,  the terms to be offered to  Phenomenal  shall be
          those as are,  in the opinion of  Phenomenal,  most  favorable  to the
          offeree.

4.4  Notice to Phenomenal
     --------------------

     Each of the  Applicable  Shareholders  shall,  before a transfer by them of
     Control of List Co to a third party, or a transfer of any Shares to a third
     party which,  when  aggregated  with the Shares held by such third party or
     his  Associates,  would  result  in such  third  party  and his  Associates
     acquiring Control of List Co, give not less than 14 days' notice in writing
     to  Phenomenal,  and  Phenomenal  may at any time  within 14 days after the
     expiry of such 14 day period by a written  notice (the  "Election  Notice")
     served on any of the Applicable  Shareholders require any of the Applicable
     Shareholders either:

     (a)  to  procure  that the  proposed  transferee  offers  to  acquire  from
          Phenomenal  all of its  Shares,  and any such  offer  shall be made in
          accordance with Section 4.5 below; or



                                      -30-
<PAGE>


     (b)  to  purchase  from  Phenomenal  all of its Shares in  accordance  with
          Section 4.6 below.

4.5  Election Notice
     ---------------

     If  Phenomenal  shall by  Election  Notice  require  any of the  Applicable
     Shareholders to procure the proposed  transferee referred to in Section 4.4
     to acquire  from  Phenomenal  all of its Shares,  the offer by the proposed
     transferee must:

     (a)  in relation to the acquisition of Phenomenal's  Shares, be on the same
          terms (subject to Sub-Section  (b) below) as to price per Share,  time
          of  payment  and  sharing  of stamp  duty as those  applicable  to the
          proposed  transfer  by any of the  Applicable  Shareholders  of  their
          Shares and be conditional  upon the Applicable  Shareholders  actually
          transferring  Control of List Co and customary  warranties as to title
          being given by Phenomenal; and

     (b)  where the offers extended to the Applicable  Shareholders  are not the
          same as among  them,  the terms to be offered to  Phenomenal  shall be
          those as are,  in the opinion of  Phenomenal,  most  favorable  to the
          offeree;  and unless such third party then proceeds to acquire Control
          of List Co and Phenomenal's Shares in accordance with the terms of the
          relevant offers,  none of the Applicable  Shareholders  shall transfer
          any of their respective Shares to such third party.

4.6  Repurchase
     ----------

     If Phenomenal  shall elect in its Election Notice to require the Applicable
     Shareholders to purchase all Phenomenal's  Shares, the following provisions
     shall apply:

     (a)  the price (the  "Repurchase  Price") to be paid to Phenomenal  for the
          repurchase  (the  "Repurchase")  of Phenomenal's  Shares  ("Repurchase
          Shares") shall be the offered price of the third party;

     (b)  notwithstanding any provisions in this Section,  the liability of each
          of the Applicable Shareholders to purchase the Repurchase Shares shall
          be joint and several;

     (c)  Phenomenal  shall sell with full title  guarantee  and the  Applicable
          Shareholders  shall  purchase  the  Repurchase  Shares  free  from all
          encumbrance and together with all rights  attaching  thereto as at the
          date of the Election Notice  including all dividends or  distributions
          which may be paid,  declared or made in respect thereof at any time on
          or after the date of the Election Notice;

     (d)  without   prejudice   to   Sub-Section   (b),unless   the   Applicable
          Shareholders agreed otherwise,  each of Applicable  Shareholders shall
          purchase the same  proportionate  part of the Repurchase Shares as the
          number of Shares held by each of the Applicable  Shareholders bears to
          the   aggregate   number  of  Shares   held  by  all  the   Applicable
          Shareholders;



                                       31
<PAGE>


     (e)  completion  shall  take place at 12:00  noon on the  twenty-first  day
          after  the  date  of the  Election  Notice  or,  if that is not a bank
          business  day,  the first bank  business day  thereafter  and, at such
          completion:

     (i)  Phenomenal shall deliver to each of the Applicable  Shareholders  duly
          executed  instruments  of transfer in favor of each of the  Applicable
          Shareholders the number of the Repurchase Shares determined by Section
          4.6(d) above together with the share certificate  therefor in the name
          of Phenomenal or its nominee;

     (ii) Phenomenal shall, so far as it lies within its power to do so, procure
          the  resignation  of  all  Directors  or  directors  on the  board  of
          directors of SWL,  Quality Prince,  List Co or any of its subsidiaries
          nominated by it with effect from completion of the Repurchase and each
          such person shall  acknowledge under seal that he has no claim against
          List Co for whatsoever nature;

     (iii)the Applicable  Shareholders  and Phenomenal (so far as it lies within
          its power to do so) shall  procure that a meeting of the  Directors be
          held at which resolution shall be passed:

          (A)  approving  the transfer of the  Repurchase  Shares to each of the
               Applicable  Shareholders  and the registration by List Co of such
               transfer;

          (B)  the  resignations of all Directors  nominated by Phenomenal being
               accepted; and

          (C)  such persons as the  Applicable  Shareholders  shall be appointed
               Directors with effect from completion of the Repurchase;

     (iv) the Applicable Shareholders shall jointly and severally:

          (A)  pay or procure the payment to Phenomenal of the Repurchase  Price
               payable by the Applicable  Shareholders  by cashier's  order or a
               banker's draft drawn on a duly licensed bank in Hong Kong; and

          (B)  execute an  instrument  of transfer for the  relevant  Repurchase
               Shares;

(f)  Phenomenal shall warrant to the Applicable Shareholders that:

     (i)  Phenomenal is the legal and beneficial owner of the Repurchase  Shares
          free from all  encumbrances  and  together  with all rights  attaching
          thereto as at the date of the  Election  Notice and has the full power
          and authority to sell and transfer the entire beneficial  interests in
          the  Repurchase  Shares to the Applicable  Shareholders  free from all
          encumbrances and together with all rights as aforesaid; and



                                      -32-
<PAGE>


     (ii) all stamp duties and other costs, expenses (including legal costs) and
          charges  payable in connection  with the sale and  re-transfer  of the
          Repurchase  Shares  under  this  Section  4.6  shall  be  borne by the
          Applicable Shareholders and Phenomenal in equal shares.

5.   MISCELLANEOUS
     -------------

5.1  Governing Law
     -------------

     This  Agreement  shall be governed in all respects by the laws of Hong Kong
     SAR, without regard to its conflict of law principles.

5.2  Survival
     --------

     The representations, warranties, covenants and agreements made herein shall
     survive any  investigation  made by any  Shareholder and the closing of the
     transactions contemplated hereby.

5.3  Successors and Assigns
     ----------------------

     Except as otherwise  provided herein,  the provisions hereof shall inure to
     the  benefit  of, and be binding  upon,  the  successors,  assigns,  heirs,
     executors and administrators of the parties hereto.

5.4  Entire Agreement
     ----------------

     This Agreement  constitutes the full and entire understanding and agreement
     between the parties with regard to the subjects hereof,  and no party shall
     be  liable  or bound to any other  party in any  manner by any  warranties,
     representations or covenants except as specifically set forth herein.

5.5  Notices, etc.
     -------------

     All notices and other communications  required or permitted hereunder shall
     be in writing and shall be  delivered  personally,  mailed by  certified or
     registered mail, postage prepaid,  return receipt  requested,  facsimile or
     delivered by courier or overnight delivery, addressed (a) if to Phenomenal,
     at 3322, 33rd Floor,  Two Pacific Place, 88 Queensway,  Hong Kong and if by
     fax, to (852)  2877-6612  (attention:  Mr.  Adrian  Woo),  or at such other
     address or fax number Phenomenal shall have provided to List Co in writing,
     or (b) if to QPL,  at Units  25-32,  2nd Floor,  Block B, Focal  Industrial
     Centre, 21 Man Lok Street,  Hunghom,  Kowloon,  Hong Kong, or if by fax, to
     (852)  2362-3034,  or at such other address or fax number as QPL shall have
     furnished to Phenomenal in writing. Notices that are mailed shall be deemed
     received upon personal delivery or confirmation of facsimile receipt or, if
     earlier, three (3) days after deposit in the mail.



                                       33
<PAGE>


5.6  Delays or Omissions
     -------------------

     Except as expressly  provided herein,  no delay or omission to exercise any
     right, power or remedy accruing to any holder of any party hereto, upon any
     breach or default of any other party under this Agreement, shall impair any
     such right,  power or remedy of such holder nor shall it be construed to be
     a waiver of any such breach or default,  or an acquiescence  therein, or of
     or in any similar  breach or default  thereafter  occurring;  nor shall any
     waiver  of any  single  breach or  default  be deemed a waiver of any other
     breach or default theretofore or thereafter occurring.  Any waiver, permit,
     consent or approval of any kind or  character  on the part of any holder of
     any breach or default  under this  Agreement,  or any waiver on the part of
     any holder of any  provisions or conditions of this  agreement,  must be in
     writing and shall be effective only to the extent specifically set forth in
     such  writing.  All  remedies,  either  under this  Agreement  or by law or
     otherwise afforded to any holder, shall be cumulative and not alternative.

5.7  Counterparts
     ------------

     This Agreement may be executed in any number of counterparts, each of which
     shall  be an  original,  but all of which  together  shall  constitute  one
     instrument.

5.8  Severability
     ------------

     If any provision of this Agreement,  or the application thereof,  shall for
     any reason and to any extent be invalid or  unenforceable  the remainder of
     this   Agreement  and   application   of  such   provision  to  persons  or
     circumstances  shall be  interpreted  so as best to  reasonably  effect the
     intent of the parties  hereto,  the parties  further  agree to replace such
     void  or  unenforceable  provision  of  this  Agreement  with a  valid  and
     enforceable  provision  which  will  achieve to the  extent  possible,  the
     economic,  business  and  other  purposes  of  the  void  or  unenforceable
     provision.

5.9  Titles and Subtitles
     --------------------

     The titles and subtitles  used in this  Agreement are used for  convenience
     only and are not considered in construing or interpreting this Agreement.

6.   TERMINATION UPON LISTING

     Notwithstanding any other provisions herein, this Agreement shall terminate
     and  shall  become  void and  cease to have any force or effect on the date
     being the date of any  prospectus  that may be issued by List Co in respect
     of the listing of the shares of List Co on The Stock  Exchange of Hong Kong
     Limited.

     The foregoing  agreement is hereby  executed as a deed as of the date first
     above written.



                                      -34-
<PAGE>


THE COMMON SEAL of                          )
PHENOMENAL LIMITED                          )
was hereunto affixed in accordance          )
with its Articles of Association            )
in the presence of:                         )



----------------------------------------                                        
Director


THE COMMON SEAL of                         )
QUALITY PRINCE LIMITED                     )
was hereunto affixed in accordance         )
with its Articles of Association           )
in the presence of:                        )



----------------------------------------                                        
Director



                                      -35-

<PAGE>

                                   Schedule 6


                           INFORMATION IN RESPECT OF
                      HANG FUNG JEWELLERY COMPANY LIMITED


                   Name: Hang Fung Jewellery Company Limited

                          Registration Number: 496642

                               Registered Office:
                        Units 25-32, 2nd Floor, Block B,
                  Focal Industrial Centre, 21 Man Lok Street,
                                Hunghom, Kowloon
                                 Hong Kong SAR

            Authorized Capital: HK$500,000 divided into two classes:
                2 Class A non-voting shares of HK$ 1.00 each and
                  499,998 Class B voting shares of HK$1.00 each

                          Directors: Lam Sai Wing, and
                               Chan Yam Fai, Jane

                  Shareholders (and no. held):

                  Class A non-voting shares          No. of shares
                  -------------------------          -------------
                  Lam Sai Wing                                1
                  Chan Yam Fai, Jane                          1

                  Class B voting shares
                  ---------------------
                  Lam Sai Wing (Note 1)                       1
                  Quality Prince Limited                      1

                               Subsidiaries: None



Note 1: Lam Sai Wing holds one Class B voting share on trust for Quality Prince
                                    Limited.