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              17/F,
                Tower 2, Yingtai Center, No.28, 

              Finance
                Street, Xicheng District, Beijing 

              100032,
                China

            

    

     

    April
      12,
      2006

    

    

    To:     
      Beijing
      HollySys Co. Ltd.

    No.10,
      Jiancaicheng Zhong Lu, 

    Xisanqi,
      Haidian District 

    Beijing,
      China

    

    Gifted
      Time Holdings Limited 

    British
      Virgin Island

    

    Re
      :
      The
      Stock Consignment Agreements 

    

    Dear
      Sirs,

    

    We
      are
      lawyers qualified in the People’s Republic of China (“PRC”) and are qualified to
      issue an opinion on the laws and regulations of the PRC.

     

    We
      have
      acted as PRC counsel to Beijing HollySys Co., Ltd. in connection with the
      Reverse Merger of Chardan North China Acquisition Corporation (“Chardan”) and
      Gifted Time Holdings Limited (“GT”). We are retained to give advice on the PRC
      legal issues with respect to Beijing HollySys Co., Ltd. (“BJ HLS”) and Hangzhou
      HollySys Automation Co., Ltd. (“HZ HLS”).

     

    We
      have
      been requested to give this legal opinion on the validity and enforceability
      of
      the following Stock Consignment Agreements:

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (i) The
      Stock
      Consignment Agreement entered into by and between Mr. Wang Changli holding
      14.23% of the outstanding capital stock of BJ HLS and Ace Lead Profits Limited,
      a company incorporated in British Virgin Islands with limited liability on
      October 15, 2005.

     

    (ii) The
      Stock
      Consignment Agreement entered into by and between Mr. Luo An holding 9.88%
      of
      the outstanding capital stock of BJ HLS and Plus View Investments Limited,
      a
      company incorporated in British Virgin Islands with limited liability on October
      15,2005.

     

    (iii) The
      Stock
      Consignment Agreement entered into by and between Mr. Cheng Wusi holding 24%
      of
      the outstanding capital stock of BJ HLS and Acclaimed Insight Investments
      Limited, a company incorporated in British Virgin Islands with limited liability
      on October 15, 2005.

     

    (iv) The
      Stock
      Consignment Agreement entered into by and between Mr. Cheng Wusi holding 6%
      of
      the outstanding capital stock of BJ HLS and Pioneer Sun Investments Limited,
      a
      company incorporated in British Virgin Islands with limited liability on October
      15, 2005.

     

    (v) The
      Stock
      Consignment Agreements entered into by and between Shanghai Jinqiaotong
      Enterprise Development Limited holding 20% of the outstanding capital stock
      of
      BJ HLS and Allied Earn Investments Limited, a company incorporated in British
      Virgin Islands with limited liability on October 15, 2005.

     

    In
      such
      capacity, we have examined such documents, as we have considered necessary
      for
      the purpose of giving this opinion. For the purpose of rendering this opinion,
      we have assumed the authenticity of all the documents provided by the parties,
      and the truthfulness and accuracy of all the information provided by all the
      parties.

     

    Based
      on
      the foregoing Stock Consignment Agreements and relevant laws and regulations,
      we
      are of the opinion that:

     

    BJ
      HLS
      was founded in 1996 and reorganized as a joint stock company in 1999 in
      accordance with the Chinese law. BJ HLS has an authorized stock capital of
      RMB
100
      million divided into 100 million shares of RMB 1.00 each. Mr. Wang Changli,
      Mr.
Luo
      An,
      Mr. Cheng Wusi and Shanghai Jinqiaotong Enterprise Developments Limited
      (“Stockholders of BJ HLS”) are the registered owners of the shares of BJ HLS in
      the amounts of 14,230,000; 9,880,000; 30,000,000 and 20,000,000 respectively,
      which shares totally constitute 74.11% of the entire outstanding shares of
      capital stock of BJ HLS as at the date of this Opinion. Among others of the
      Stockholders of BJ HLS, Mr, ChengWusi, being the Trustee, was entrusted by
      Mr.
      Xu Shengheng and Mr. Mei Qinglin (“the Trustors”), the ultimate and beneficiary
      owner of 24,000,000 and 6,000,000 shares in BJ HLS, to be the registered
      shareholders of the aforesaid shares and to exercise the shareholders’ right on
      behalf of the Trustors.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    The
      BVI
      Companies, Ace Lead Profits Limited, Plus View Investments Limited, Acclaimed
      Insight Investments Limited, Pioneer Sun Investments Limited and Allied Earn
      Investments Limited (“BVI Companies”), respectively controlled and owned by Mr.
      Wang Changli, Mr. Luo An, Mr. Xu Shengheng, Mr. Mei Qinglin and Mr. Song Xuesong
      on October 12, 2005, are companies incorporated under the laws of British Virgin
      Islands with limited liability.

     

    Subject
      to the terms and conditions of the Stock Consignment Agreements, the BVI
      Companies have been granted to the rights to control over BJ HLS. The Stock
      Consignment Agreements have given BVI Companies the rights to manage in all
      respects the equity interests held in title by the Stockholders of BJ HLS,
      including all stockholder rights to call meetings of stockholders, to submit
      stockholder proposals, to elect directors and supervisors (to replace and
      increase the number of the directors, supervisors and recommend new director
      and
      supervisor persons ), to vote the stocks on all matters and to exercise all
      other rights of a stockholder in respect of the equity interests consigned.
      More
      specifically, the Stock Consignment Agreements include giving the right to
      enjoy
      the economic benefits and to exercise management rights, controlling rights
      and
      decision-making power over the equities or the subject company.

     

    The
      Stockholders of BJ HLS shall not, without prior written consent of the BVI
      Companies, transfer the ownership interests of BJ HLS they hold to any third
      party. As requested by the BVI Companies, the Stockholders of BJ HLS shall
      promptly transfer the ownership of the consigned equities they hold to the
      BVI
      Companies or any third party designated by the BVI Companies. This provision
      is
      binding on the parties to the agreements as well as their successors and
      assigns.

     

    The
      Stock
      Consignment Agreements between the Stockholders of BJ HLS and the BVI Companies
      are subject to enforceability and limitations of the laws and rules of
      PRC.

     

    Pursuant
      to Clause 147 of the PRC Corporation Law promulgated in 1994, the stocks held
      by
      the directors, the supervisors or the senior managers of a joint stock company
      formed under PRC law may not be transferred during their incumbency period.
      The
      aforesaid clause has been revised to which, the stocks held by the directors,
      the supervisors or the senior managers of a joint stock company may not be
      transferred in amounts in excess of 25% of the person’s holdings annually during
      their incumbency period pursuant to Clause 142 of the amendment of the PRC
      Corporation Law
      which
      became effective from January 1st, 2006. Being the deputy chairman of the
board
      and
      the general manager of BJ HLS, Mr. Wang Changli, who held 14.23% of the
      outstanding stocks of BJ HLS, is subject to this restriction. However there
      are
      no prohibitive regulations to prohibit the registered stockholders who are
      the
      directors, supervisors or the senior managers of a joint stock company from
      disposing the equity interests derived from the stocks they held, including
      but
      not limited to consign to any third party all the equity interests and control
      of their stocks while retaining only title during their incumbency period.
      Therefore, Mr. Wang consigned 14.23% equity interests to Ace Lead Profits
      Limited, a BVI company, by entering the Stock Consignment Agreement set forth
      above.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Except
      for the aforesaid restrictions in PRC Corporation Law, the stockholders of
      a
      joint stock company may transfer the ownership interests of the stocks they
      hold
      to any third party in accordance with Chinese laws and regulations. Accordingly,
      the Stockholders of BJ HLS (other than Mr. Wang Changli) may lawfully transfer
      the ownership interests of the stocks they hold to any third party. Since the
      other Stockholders of BJ HLS have entered into Common Control Agreements with
      Mr. Wang, in which the parties have agreed to jointly act in concert with Mr.
      Wang whenever they exercise their voting rights as the stockholders of BJ HLS,
      they also consigned their equity interests in BJ HLS to their BVI Companies
      by
      entering into the Stock Consignment Agreements set forth above simultaneously
      so
      as to keep consistent with Mr. Wang.

     

    In
      accordance with the PRC Corporation Law, the stockholder of a joint stock
      company has full right and capacity to dispose the equity interests derived
      from
      the equities they hold. Being the direct and registered owner of 74.11% of
      the
      total equity capital of BJ HLS, the Stockholders of BJ HLS have the full power
      and capacity and authority to consign the equity interests they hold, including
      but not limited to the rights to call meetings of stockholders, to submit
      stockholder proposals, to elect directors and supervisors, to vote on all
      matters, to enjoy economic benefits and to exercise all other stockholder
      rights, to the BVI Companies, and enter into and perform the obligations under
      the Stock Consignment Agreements.

     

    In
      accordance with the PRC Contract Law and any other applicable Chinese laws
      and
      regulations, the Stock Consignment Agreements embody the true and consistent
      intentions and decisions of both of the Stockholders of BJ HLS and the BVI
      Companies. There are no prohibitive regulations to prohibit the stockholders
      from consigning the equity interests they hold as at the date of this Opinion.
      The execution and performance of the Stock Consignment Agreements by the
      Stockholders of BJ HLS or the BVI Companies will not, require any consent,
      approval, authorization or other action by, or filing with or notification
      to,
      any Chinese governmental Authority. The Stock Consignment Agreements are valid,
      legal binding, and enforceable against the parties from the execution date.
      The
      powers rights and authorities granted to Parties in the Stock Consignment
      Agreements are guaranteed and protected by PRC laws.

     

    This
      opinion is limited to the relevant matters under the law of the PRC (other
      than
      the laws of the Hong Kong Special Administrative Region and Macau Special
      Administrative Region) in effect on the date hereof, and the matters concerning
      the laws of other jurisdictions are not subject of this opinion.

     

    This
      opinion is given solely for the benefit of the persons to whom it is addressed.
      It may not, except with our prior written permission, be relied upon by anyone
      in connection with this opinion or used for any other purpose.

     

    We
      hereby
      consent to the filing of this opinion as an exhibit to the Registration
      Statement on Form S-4 filed by HLS Systems International Ltd. (the “Registration
      Statement”). We also consent to the references to our firm name in the
      Registration Statement. By giving this consent, we do not admit that we come
      within the category of persons whose consent is required under Section 7 of
      the
      Securities Act or the rules and regulations of the Securities and Exchange
      Commission promulgated thereunder (the “Rules”), nor do we hereby admit that we
      are experts with respect to any part of the Registration Statement within the
      Securities Act or the Rules.

     

    
      	 	 	Yours
              faithfully
	 	
            
	 
 	 
 	 
 
	 	  	Guantao
              Law Firm
	 	
            
	 	 

    

     

    
      
        
        

      

      
        4Unassociated Document

     

    SALE
      AND PURCHASE AGREEMENT

    

    IN
      RELATION TO THE OWNERSHIP INTEREST 

    

    OF

    

    HANGZHOU
      HOLLYSYS AUTOMATION CO., LTD.

    

    BETWEEN

    

    TEAM
      SPIRIT INDUSTRIAL LIMITED

     

    AND

    

    GIFTED
      TIME HOLDINGS LIMITED

    

     

    

    

    

    

    
      
        

      

    

    

    Dated:
      January 12, 2006  

     

      
        

      

    

    

    
      
        
        

      

      
        A3

        
          

        

      

      
        
        

      

    

     

    This
      SALE AND PURCHASE AGREEMENT
      (Hereinafter referred as “this Agreement”) is entered into on the 12th
      day of
      January 2006.

     

    BETWEEN:-

    

    
      	
              (1)

            	
              TEAM
                SPIRIT INDUSTRIAL LIMITED,
                (Hereinafter referred as “Party A”), a company incorporated in the British
                Virgin Islands with limited
                liability;

            

    

    

    
      	
              (2)

            	
              GIFTED
                TIME HOLDINGS LIMITED,
                (Hereinafter referred as “Party B”), a company incorporated in the British
                Virgin Islands with limited
                liability.

            

    

     

    (Party
      A
      and Party B may be called “Party A and B” or “both Parties” together, or “the
      Party” or “each Party” under this Agreement)

     

    WHEREAS:-

    
       

    

    
      	(A)  	
              As
                of the date of this Agreement,
                Party A is the registered owner of Hangzhou HollySys Automation Co.,
                Ltd.
                (Hereinafter referred as "HZ HollySys") holding 30% of the entire
                ownership interest in HZ HollySys;
                and

            

    

    
       

    

    
      	  
              (B)  	
              Party
                A agrees that Party A shall sell 30% ownership interest in HZ HollySys
                to
                Party B in accordance with the conditions set forth in this Agreement.
                Party B agrees that Party B shall purchase the 30% ownership interest
                in
                HZ HollySys.

            

    

    
       

    

    Therefore,
      Party A and Party B enter into this Agreement based on the following
      conditions:-

    

    
      	
              1.

            	
              DEFINITIONS

            

    

    

    
      	
              1.1

            	
              In
                this Agreement, unless otherwise expressed or required by context,
                the
                following words and expressions shall have the respective meanings
                set
                opposite thereto as follows:-

            

    

     

    
      	 	
              Expression

            	
              Meaning

            

    

    
      

      
        	 	
                "Agreement"

              	
                Sales
                  and Purchase Agreement dated [12th January 2006] and its appendix
                  entered
                  into between the Party A and Party
                  B

              

      

      
        

        
          	 	
                  "HZ
                    HollySys"

                	
                  Hangzhou
                    HollySys Automation Co., Ltd. Party A holds 30% of the entire
                    ownership
                    interest in HZ HollySys

                

        

        
          
            

            
              	 	
                      "Transaction"

                    	
                      the
                        transaction with respect to the sale and purchase of the
                        30% ownership
                        interest in HZ HollySys between Party A and Party B in accordance
                        with the
                        conditions set forth in this
                        Agreement

                    

            

            
              
                

                
                  
                    
                    

                  

                  
                    
                    

                    
                      

                    

                  

                  
                    
                    

                  

                   

                

                
                  	 	
                          "Sale
                            Share"

                        	
                          the
                            fully paid share which is legally and beneficially owned
                            by Party A,
                            representing 30% of the entire issued share capital of
                            HZ HollySys as at
                            the date of this Agreement

                        

                

                
                  
                    

                    
                      	 	
                              "Consideration"

                            	
                              the
                                agreed total consideration payable by Party B to
                                Party A for the sale and
                                purchase of the Sale Share in accordance with the
                                condition 3 set forth in
                                this Agreement

                            

                    

                    
                      
                        

                        
                          	 	
                                  "Signature
                                    Date"

                                	
                                  the
                                    official date for signature of this Agreement
                                    stated in this
                                    Agreement

                                

                        

                        
                          
                            

                            
                              	 	
                                      "Effective
                                        Date"

                                    	
                                      the
                                        date upon the fulfillment of all the conditions
                                        specified in this
                                        Agreement 

                                    

                            

                            
                              
                                

                                
                                  	 	
                                          "Business
                                            Day" 

                                        	
                                          a
                                            day on which banks are open for business
                                            other than (i) a Saturday or a
                                            Sunday; or (ii) a "general holiday"

                                        

                                

                                
                                  
                                    

                                    
                                      	 	
                                              "RMB"

                                            	
                                              Renminbi,
                                                the legal currency of the P.R.China

                                            

                                    

                                     

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	
              2.

            	
              SALE
                AND PURCHASE OF THE SALE SHARE

            

    

    

    
      	
              2.1

            	
              Party
                A agrees that Party A shall sell the Sale Share to Party B in accordance
                with the terms and conditions set forth in this Agreement. Party
                B agrees
                that Party B shall purchase the Sale Share in accordance with the
                terms
                and conditions set forth in this
                Agreement.

            

    

     

    
      	
              3.

            	
              CONSIDERATION

            

       

      
        	
                3.1

              	
                Both
                  Parties agree that the total consideration payable by Party B to
                  Party A
                  for the sale of the Sale Share shall be RMB
                  60,474,000.

              

      

       

      
        	
                3.2

              	
                Both
                  Parties agree that Party B shall pay the consideration of the Sale
                  Share
                  to Party A or any third party designated by Party A by issuing
                  common
                  stock with equivalent value of the Sale Share, representing 7,966
                  shares
                  of Party B’s common stock, which take 15.932% of its total outstanding
                  stocks. 

              

      

    

    

    
      	
              4.

            	
              PARTY
                A’S RIGHTS AND OBLIGATIONS

            

    

     

    
      	
              4.1

            	
              Party
                A has the right, power and authority to sell and transfer the Sale
                Share.

            

      

      
        	
                4.2

              	
                Party
                  A is the sole beneficial owner of the Sale Share which shall be
                  transferred and assigned to Party B pursuant to the terms of this
                  Agreement free from all claims, charges, liens, encumbrances, third
                  party
                  rights, disputes, litigations and arbitrations of any kind
                  whatsoever;

              

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  4.3

                	
                  Party
                    A has not entered into any contracts or agreements which may
                    conflict with
                    this Agreement. Party A shall not transfer any rights and obligations
                    under this Agreement to any third party.

                

          

          
            	
                    4.4

                  	
                    Party
                      A agrees to take all and any necessary actions, executes and
                      delivers any
                      legal documents (including any necessary approvals from the
                      government
                      authorities) to complete the transaction
                      hereunder.

                  

          

           

        

      

    

    
      	
              5.

            	
              PARTY
                B’S RIGHTS AND OBLIGATIONS

            

    

    

    
      	
              5.1

            	
              Party
                B is fully capable of entering into this Agreement and performing
                all
                obligations and duties hereunder;

            

    

     

    
      
        	
                5.2

              	
                Party
                  B shall fully pay the consideration to Party A in time pursuant
                  to the
                  terms in this Agreement. 

              

      

      
        

        
          	
                  5.3

                	
                  Party
                    B has not entered into any contracts or agreements which may
                    conflict with
                    this Agreement. The Purchase shall not transfer any rights and
                    obligations
                    under this Agreement to any third
                    party.

                

        

        
          

          
            	
                    5.4

                  	
                    During
                      the period from the signature date of this Agreement to the
                      completion
                      date of the transaction hereunder, Party B agrees that Party
                      B shall not
                      propose or enter into any negotiations or discussions or enter
                      into any
                      letter of intend, agreements or understandings which may conflict
                      with the
                      transaction hereunder.

                  

          

          
             

            
              	
                      6.

                    	
                      DEFAULT 

                    

            

            
               

              
                	
                        6.1

                      	
                        After
                          effective date of this Agreement, it may constitute default,
                          if either
                          Party is in breach, nonperforming, or partly performing
                          terms of this
                          Agreement, or is in breach of any warranties, representations
                          and
                          undertakings of this Agreement. The non-defaulting Party
                          can allow the
                          defaulting Party to cure such default in a reasonable time
                          period. If the
                          defaulting Party does not cure within the reasonable time
                          period, the
                          non-defaulting Party shall be entitled to terminate the
                          Agreement, and
                          hold the defaulting Party liable for all the damages and
                          economic loss
                          resulting from the defaulting Party’s default. The economic loss shall not
                          exceed the amount that defaulting Party could anticipate
                          or should
                          anticipate as of the date of this
                          Agreement.

                      

              

              
                
                   

                  
                    	
                            7.

                          	
                            
                              FORCE
                                MAJEURE 

                            

                          

                  

                  
                    
                       

                      
                        	
                                7.1

                              	
                                Neither
                                  Party shall be liable to the other for any delay
                                  or failure to perform its
                                  obligation under this Agreement, if such failure
                                  or delay is due to force
                                  majeure. 

                              

                      

                      
                        
                           

                          
                            	
                                    8.

                                  	
                                    GOVERNING
                                      LAW AND DISPUTE
                                      RESOLUTION

                                  

                          

                          
                             

                            
                              
                                
                                

                              

                              
                                
                                

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	
              8.1

            	
              Any
                dispute arising out of this Agreement shall be resolved by both Parties
                through mutual negotiation. If both Parties could not reach an agreement,
                either Party may initiate legal action in the competent
                jurisdiction.

            

    

    

    
      	
              8.2

            	
              This
                Agreement shall be governed by and construed in accordance with the
                laws
                of PRC. 

            

    

     

    
      	
              9.

            	
              EFFECTIVE

            

       

      
        	
                9.1

              	
                Upon
                  and after all of the following conditions have been satisfied and
                  fulfilled, this Agreement shall come into
                  effective:

              

      

      
        
           

          
            	
                    9.1.1

                  	
                    This
                      Agreement has been signed by both Parties’ legal representatives or
                      authorized persons;

                  

          

          
            
               

              
                	
                        9.1.2

                      	
                        The
                          transaction in this Agreement has been approved by the
                          Board of HZ
                          HollySys;

                      

              

              
                
                   

                  
                    	
                            9.1.3
                              

                          	
                            This
                              Agreement has been approved by the original government
                              authorities.
                              

                          

                  

                  
                    
                       

                    

                  

                

              

            

          

        

      

    

    
      	
              10.

            	
              CONFIDENTIALITY

            

    

    

    
      	
              10.1
                

            	
              Save
                as required by any applicable law, court order or other regulatory
                requirements, none of the parties hereto shall make, any press or
                other
                announcement or release or disclose any information, document and
                data
                concerning this Agreement or the transaction herein referred to or
                disclose the identity of the other parties hereto (save disclosure
                to
                their respective professional advisers under a duty of confidentiality)
                without the prior written consent of the other parties
                hereto.

            

    

     

    
      	
              11.

            	
              MODIFICATION,
                TERMINATION, SUPPLEMENTARY

            

    

    
      

      
        	
                11.1

              	
                
                  The
                    modification of this Agreement shall not be effective without
                    written
                    agreement through negotiation. If both Parties could not reach
                    an
                    agreement, this Agreement remains effective. Any modification,
                    construction or renunciation to this Agreement shall be invalid
                    if without
                    a written agreement signed by both
                    Parties.

                

              

      

      
        

        
          	
                  11.2 

                	
                  
                    If
                      either party is in breach of this Agreement, non-default party
                      may
                      terminate this Agreement. Both Parties may agree to cancel
                      this Agreement
                      with written agreement. 

                  

                

        

        
          

          
            	
                    11.3

                  	
                    
                      This
                        Agreement may terminate in the following circumstances: (i)
                        Both Parties
                        agree to terminate this Agreement; (ii) Non-default party
                        terminates this
                        Agreement pursuant to the terms and conditions of this Agreement;
                        (iii)
                        the transaction under this Agreement has been
                        completed.

                    

                  

          

          
            

            
              	
                      11.4 

                    	
                      
                        Both
                          Parties may sign supplemental agreement regarding to related
                          matters of
                          this Agreement. Supplemental agreement and this Agreement
                          have the same
                          effect.

                      

                    

            

             

          

        

      

    

    
      	
              12.

            	
              MISCELLANEOUS

            

    

    

    This
      Agreement is executed in four copies, two copies for each Party, and both
      Parties may execute the duplicate.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Parties hereto have caused their duly authorized
      representatives to execute this Agreement.

     

    
      	 	 	 	 
	/s/ Cheng
              Wusi	 	 	 
	
              For and on behalf of

              TEAM SPIRIT INDUSTRIAL
                LIMITED

              
                in the presence of Director

              

            	 	 	
            
	
               

            	 	 	 

       

      
        	 	 	 	 
	/s/ Qiao
                Li 	 	 	 
	
                For and on behalf of 

                GIFTED TIME HOLDINGS
                  LIMITED 

                in the presence of Director

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