Document:

Exhibit 10.1  Contract of Joint Venture

                     RUILI GROUP RUIAN AUTO PARTS CO., LTD.

                          ____________________________

                          CONTRACT OF THE JOINT VENTURE

                          ____________________________

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                                   ARTICLE 1
                               GENERAL PROVISIONS

      1.1.  This  contract is made and entered into on the basis of equality and
mutual benefit, through friendly consultations,  by and between RUILI GROUP CO.,
LTD. and FAIRFORD HOLDINGS LIMITED,  who agree to jointly set up and run a JOINT
VENTURE  in  Wenzhou  city,   Zhejiang  province  in  China  under  the  Act  of
Sino-foreign   Joint   Ventures  of  the   People's   Republic  of  China,   its
implementation  statutes,  the other  related laws and  regulations  made by the
People's Republic of China as well as the stipulations in this contract.

                                    ARTICLE 2
                         THE TWO PARTIES OF THE CONTRACT

      2.1. The parties of this contract are as follows:

            a.  RUILI  GROUP  CO.,  LTD.  (hereinafter  referred  as party A), a
corporation  registered  in Wenzhou  city,  China,  with its legal  address  as:
1169Yumeng Road, the Economy Development Zone, Ruian City Legal  representative:
ZHANG Xiaoping Post: Board Chairman Nationality: Chinese.

            b. FAIRFORD HOLDINGS LIMITED  (hereinafter  referred as party B ), a
company  registered  in Hong Kong.  The legal  address is: 12 Zhong Huan Xia Que
Road,  Hong Kong Special  Administration  District Legal  representative:  Zhang
Ronggang Post: General Manager Nationality: Taiwan China.

                                    ARTICLE 3
                                   DEFINITIONS

      3.1. Otherwise stipulated, the words and phrases used in the contract have
the meanings as follows:

      3.2.  "Related  company"  refers to any  company  controlled  by any party
directly or indirectly,  controlled  together with any other party by or control
any party;  the word "control" means  possession of stock or registered  capital
allowing the right to vote by over 50%. "Article of Associations"  refers to the
constitution  of joint ventures  subscribed by both parties in this contract and
authorized by the examining and approving institution.

      3.3.  "The Board of  Directors"  shall mean the  directorate  of the joint
ventures.  "Business  License" shall mean the business license of joint ventures
issued by the State  Administrative  department  for  Industry  and  Commerce or
authorized  local  Administration  department  Industry and Commerce.  "Contract
Duration" refers to the contract term stated in Article 19.

      3.4.  "Effective  Date" shall mean the date on which the  contract and the
article of  associations  becomes  effective,  viz.  the date of approval by the
examining and approving authorities.

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      3.5.  "Examining  and  approving  Authorities"  shall mean the  government
authorities that are entitled with the right to examine and approve the contract
according to the stipulations on the examination of overseas invested projects.

      3.6. "Force Majeure" refers to all the contingencies  which happened after
the  subscription of the contract and can not be anticipated at the moment,  the
occurrence  and  aftermath of which can not be avoided or  conquered,  and which
hinder the full or partial  performance  of the  contract.  The above  mentioned
contingencies  include  earthquake,   typhoon,  flood,  wars,  international  or
domestic  conveyance  breakdown,  act  of  government  or  public  institutions,
epidemic,  civil  commotions,  strike as well as other  contingencies  generally
considered force majeure by the international business conventions.

      3.7. "Joint Ventures  Company" shall mean the Sino-foreign  joint ventures
established according to the stipulations in the contract.

      3.8. "Joint  Ventures  Product" shall mean the products made in the ranges
stated in the Article5.2.

      3.9. "Joint Ventures Regulations" refers to The Implementation Regulations
of Sino-foreign Joint Ventures Law of People's Republic of China.

      3.10. "Labor Law" refers to The Labor Law of People's Republic of China as
well as relevant laws and regulations of China.

      3.11. "Administrative Staff (executives)" refers to the general manager of
the joint ventures, as well as other administrative staff who report directly to
the general manager.

      3.12. "A Party" refers to any party stated in Article2.1 in this contract.

      3.13.  "The Third Party" refers to any natural man,  legal  person,  other
organization or entity other than the two parties of this contract.

      3.14.  "The Three Funds" refers to the reserve funds,  development  funds,
employee bonus and welfare funds of the joint  ventures  stipulated in the joint
venture regulations.

                                    ARTICLE 4
                    FOUNDATION OF THE JOINT VENTURES COMPANY

      4.1.  Both  parties  agree to establish a joint  venture in Wenzhou  city,
Zhejiang province,  China according to the laws and regulations of China as well
as the stipulations in this contract.  Upon the subscription of this contract by
both parties,  party A shall transact  promptly  Feasibility  Study of the joint
venture,  the examination  procedures of the contract and its  constitutions  as
well  as the  registration  procedures  of the  joint  venture.  Party  B  shall
cooperate  with party A and  provide  the  documents  and  information  that are
requested.

      4.2. The Chinese name of the joint venture is "[Chinese Name of Company]",
the English name is RUILI GROUP RUIAN AUTO PARTS CO., LTD.

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      4.3. The legal  address of the joint  venture is: Ruili  Industry  Garden,
1169Yumeng Road, Ruian Economy Development, Zhejiang Province, PRC.

      4.4.  With the agreement of the board of directors as well as the approval
by the relevant Chinese government department,  the joint venture is entitled to
establish branches setup both in and out of the China territory.

      4.5. The joint venture is an enterprise  legal person  stipulated by China
laws.  All the  activities  of the  joint  venture  shall  conform  to the laws,
provisions and rules & regulations of PRC.

      4.6.  The  joint  venture  is  a  company  with  limited  liability.   The
responsibility  one party carries is confined with the registered capital turned
over to the  joint  venture  according  to the  stipulations  in  Article6.  The
creditors of the joint venture have  recourses  only for the assets of the joint
venture,  and they have no right for  indemnification,  damage  compensation  or
other remediation from any party. On the premise that the above stipulations are
observed,  both parties  share in the profits and losses as well as the risks of
the joint venture  according to the  respective  investment  proportions  in the
registered capital of the joint venture.

                                    ARTICLE 5
                          SCOPE AND SCALE OF MANAGEMENT

      5.1. The purposes of joint ventures are: to manufacture  and sell products
by joint  venture  through  adaptation  of advanced  technology  and  scientific
administration; to exploit and introduce new products and new services, so as to
obtain satisfactory economic benefits for both parties.

      5.2.  The  management  scope of the joint  venture is: to produce and sell
automobile parts.

      5.3. The management  scale of the currently  planned joint venture by each
party is: annual production of 3 million  automobile gas brake valve, with total
annual output value of 40 million US Dollars (USD40,000,000).

                                    ARTICLE 6
              TOTAL AMOUNT OF INVESTMENT AND THE REGISTERED CAPITAL

      6.1. The total amount of  investment of the joint venture is 14 million US
Dollars (USD14,  000,000),  say fourteen million only and the registered capital
is 7.1 million US Dollars (USD 7,100,000).say seven million and one hundred.

      6.2. The  subscribed  investment  amount by each party for the  registered
capital is:

            a. Party A: 710 thousand US Dollars (USD  710,000) say seven hundred
and ten thousand only which  accounts for 10% of the  registered  capital of the
joint venture.

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            b. Party B: 6.39  million US Dollars  (USD6,390,000),  six  million,
three hundred and ninety  thousand only which accounts for 90% of the registered
capital of the joint venture.

      6.3. The contribution  modes for the registered  capital by each party are
as follows:

            a. Party A shall  invest by assets,  which is evaluated by qualified
Asset   Assessment   Institution   and  converted   into  money  as  710,000  US
Dollars (USD 710,000).

            b. Party B shall invest by assets,  which are evaluated by qualified
Asset  Assessment  Institute and converted into money as USD 6,390,000,  say six
million, three hundred and ninety thousand US Dollars only.

            c.  Party B shall pay 60% of the total  purchase  amount  within six
months as from the date on which the business license is issued,  and shall make
all the purchase  payment within one year. Party A shall change the ownership of
the assets  investment  to the name of the joint  venture  company  within three
months as from the date on which the business license is issued.

      6.4. If one party hasn't  contributed  the contracted  investment upon the
due date, she shall pay to the joint venture  interests  calculated from the due
date to the actual  contributions  date of the  investment  with  respect to the
unpaid amount (or the value of tangible materials investment), the interest rate
shall be  calculated  on the basis of benchmark  rate of RMB loan for six months
issued daily during the default time.  Moreover,  the observant party may inform
in written  notice to the  defaulting  party  demanding  her to  contribute  the
investment in one (1) month as from the receipt date. If the default party fails
to contribute within the time limit, the observant party shall have the right to
contribute  the  investment   according  to  the  proportion  and  acquires  the
corresponding equity of registered capital accordingly.  Or, the observant party
may  choose  a third  party  to  contribute  the  investment  and  acquires  the
corresponding equity of registered capital accordingly.  The observant party may
also terminate the contract according to the Article20.1 in the contract.  Under
each circumstance in this article,  the observation party may claim damages from
the defaulting  party. The provisions in the Article6.5  herein shall not affect
any other rights enjoyed by observant  party as for the failure of investment by
the  defaulting   party  under  this  contract  or  other  applicable  laws  and
regulations.

      6.5. After the contribution of investment to the registered capital of the
joint venture by each of the two parties, it shall be verified  immediately by a
Chinese Certified Public Accountant (CPA) engaged by the Board of Directors, and
shall submit the Capital Verification Report to the joint venture company within
sixty (60) days after the investment  date.  Within thirty (30) days as from the
receipt of the  Capital  Verification  Report,  according  to style and  content
prescribed  in the joint  venture  codes,  the joint venture shall submit to the
party an investment  certificate signed by the Board Chair with the stamp of the
joint  venture  on it,  as well  as a copy  as a  record  in the  Examining  and
approving  authorities,  the General Manager shall put on file all the copies of
Capital Verification Report and investment  certificates which have been granted
to the parties.

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      6.6. In despite of any other  provisions in this  contract,  if any of the
following conditions fail to be implemented,  and both parties have not given up
the  condition  in  writing,  then both  parties  shall have no  obligations  to
contribute any investment to the registered capital of the joint venture:

            a. After the capital  contribution  of the  contract  and article of
association  by both  parties,  they have been  approved  by the  examining  and
approving authorities, and neither of the terms and conditions has been altered,
nor has any  extra  obligation  been  added to one  party or the  joint  venture
company;  but if the  alterations  herein  or the  extra  obligations  have been
informed to each party in writing,  and each party  agrees with them in writing,
then it shall be excluded.

            b. The business  license has been issued with no  alteration  to the
scope of business of the joint  venture  stipulated in  Article5.2;  but if each
party has been  informed of the  alterations  herein in writing,  and each party
agrees with them in writing, then it shall be excluded.  Both parties agree, (i)
within three (3) months after the issue of the business license,  or (ii) within
five (5) months after the signing of this  contract by both parties (the earlier
shall  prevail),  or within any extended term decided in writing by both parties
through  consultation,  any of the  above-mentioned  prerequisites  has not been
realized,  nor has any party given them up, then either  party shall be entitled
to inform the other party in writing so as to terminate the contract,  while any
party shall have no obligation to contribute  any  investment to the  registered
capital of the joint venture.

      6.7. The increase of or adjustment to the registered  capital of the joint
venture  company shall be approved by both parties in writing with the unanimous
agreement  through  the  board  of  directors  as  well as the  approval  by the
examining and approving authorities.  After approval from the above authorities,
the  joint  venture  company  shall  proceed  registration  procedures  for  the
registered capital alteration in relevant administrative department for Industry
and Commerce.

      6.8.  The   provisions   in  Article  6.9  herein  are  suitable  for  the
transferring of the registered  capital of the joint venture company.  According
to the following stipulations, each party enjoys priority right to purchase full
or partial  assignment or transfer of equity the other party's in the registered
capital of the joint venture company.

            a. The party that wishes to transfer  the full or partial  interests
in the  registered  capital of the joint  venture  company  ("assigning  party")
should inform the other party in writing  ("transfer  notice"),  stating clearly
the identity of the intended assignee ("the intended assignee"), equity intended
to transfer  ("transferred  rights and interests"),  the transferring  price and
other terms and conditions.  The transfer  notice  constitutes as an irrevocable
offer,  that is to say, to transfer  all the rights and  interests  to the other
party according to the price as well as other terms and conditions.

            b. The other party shall be entitled to inform the  assigning  party
in writing  ("purchase  notice") within sixty (60) days as from the receipt date
of the  transfer  notice,  so as to purchase  the full or partial  shares in the
assigner's  transferred rights and interests at priority.  Within the sixty days
herein, the assigner shall provide promptly the information on the conditions of
business  and finance of the  intended  assignee to the party  according  to its
reasonable requirements,  so as to make the party decide whether to exercise the
purchase right at priority.

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            c. If the other  party  fails to  purchase  within  sixty  (60) days
stipulated in item (b), then the assigning  party may transfer all the equity to
the  intended  assignee,  with price no lower than the price  stipulated  in the
transfer  notice,  while the other terms and conditions  offered to the intended
assignee  shall not be more  preferential  than what are stated in the  transfer
notice.

            d. The  assigner  should  inform  the other  party in writing of the
final terms and conditions of transferring  within two (2) days as from the date
of signing of the transfer contract by the assignee. If the transfer made to the
assignee fails to be reported to the examining and approving  authorities within
thirty (30) days after the signing of the transfer  contract for approval,  then
the assigner shall follow once again the provisions prescribed in article (1).

            e. Within the term of this  contract,  each party may  transfer  the
full or partial  right or  interest  (equity) in the  registered  capital of the
joint  venture to a related  (interested)  company.  After the  approval  of the
original  examining and approving  authorities,  the registration  procedures of
company  alteration  should be  proceeded.  One party  shall  hereby give up the
preferential purchase right for such transfer to the other party.

            f.  The  party  that  transfers  the  rights  and  interests  of the
registered  capital of the joint  venture  shall  confirm  that the assignee has
signed a document with legal  binding which makes him a party of this  contract,
and shall be restricted by the terms and  conditions  under this contract as the
assigner himself.

            g. Pursuant to Article 6.9, each party shall consent any transfer of
registered  capital  and the Board of  Directors  shall be deemed as consent the
transfer.  Each party shall agree to take  immediate  action  required under the
law,  execute all documents  under the law and urge its  appointed  directors to
immediately  take the action and execute  all the  documents  hereinbefore.  The
transfer of the  registered  capital  shall be subject to  application  with and
approval by the  examining  and  approval  authority.  Upon  receipt of the said
approval,  the  Joint  Venture  shall  check  in the  transfer  to  the  related
administrative department for industry and commerce.

      6.9. The Joint Venture may get banking loan from finance  institutes in or
out of China and the  shareholder  loan from the two parties,  financing for the
balance between the total investment of the Company and her registered  capital.
If the  shareholders  of the two parties  shall provide the loan, it is based on
its  proportional  percentage  of  investment  of each  party in the  registered
capital.  The two parties shall determine their willingness and in what way they
shall provide guarantee if required by the loaner.

      6.10.  Save as lien of general  nature (the lien of general  nature herein
refers to the lien  established on the entity held by share by any party hereto,
such as lien out of tax,  duty and  exercise,  or the lien made  under  security
documents  secured  with  all  assets  where  the  assets  are not  particularly
identified),  each party  shall not be allowed to mortgage or pledge part or all
of its  share in the  registered  capital  of the Joint  venture,  or to set any
credit in other whatsoever forms.

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                                    ARTICLE 7
                      THE RESPONSIBILITIES OF BOTH PARTIES

      7.1 In addition to the other responsibilities stipulated in this contract,
the parties shall fulfill their respective responsibilities as follows:

            a. Responsibilities of party A:

                  (1) Assist the joint  venture in applying for all the licenses
      and  permission  required for the running of business of the joint venture
      company.

                  (2) Assist the joint  venture in  coordinating  with the local
      government,  so as to make water, electricity and road. Available near the
      joint venture company

                  (3) Assist the joint  venture in all the  procedures to assign
      the ownership of asset of both parties to the joint venture company.

                  (4) Assist the joint venture in applying for the  preferential
      tax  treatments and other  investment  encouragement  available  under the
      relevant China laws, administrative statutes and local regulations.

                  (5) Assist the joint  venture in obtaining  all the  machinery
      equipment,  instrument,  raw  materials,  office  appliance  and facility,
      vehicles  as  well  as  other  materials  needed  in  the  manufacture  or
      management of the joint venture company  through buying,  leasing or other
      ways in the China territory.

                  (6) Assist the joint  venture in applying  for import  license
      for the machinery equipment,  instrument, raw materials, office appliances
      and  facility,   vehicles  as  well  as  other  materials  needed  in  the
      manufacturing  or  administration  of the joint  venture  company,  and to
      assist in  transacting  all the relevant  procedures  and  formalities  to
      declare customs.

                  (7)  Assist  the joint  venture in  recruiting  local  Chinese
      personnel,  and to assist the joint venture in obtaining visas,  residence
      permits, work permit and housings for its foreign personnel.

                  (8) Assist the joint venture in obtaining and  ecommending the
      Foreign Exchange Registration Certificate as well as other approval needed
      to adopt the various  methods of foreign  exchange  balance  permitted  by
      Chinese laws and statutes.

                  (9) Assist the joint venture in arranging  reliable  supply of
      water, electricity,  heating, gas, steam,  telecommunication and transport
      needed in the production.

                  (10)  Assist  the  joint  venture  company  in  other  matters
      consigned by the Board of Directors.

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            b. Responsibilities of party B:

                  (1) Assist the joint  venture  company in obtaining  machinery
      equipment,  raw  material  etc.  by  purchase  or lease or other ways from
      abroad.

                  (2)  Assist the joint  venture  company  in  distributing  its
      products in the international market.

                  (3) Training the administrative  staff and technical personnel
      of the joint venture company.

                  (4) Assist the joint venture in other matters consigned by the
      Board of Directors.

      Both parties agree to perform their respective responsibilities stipulated
in Article7 herein without any condition.

                                    ARTICLE 8
                       MUTUAL DECLARATIONS AND WARRANTIES

      8.1 Each party  hereto  claims and  warrants to the other party that as of
the execution date and the validity date of the contract:

            a.  This  party is formed  under  laws of  establishment  or that of
registered place, legally existing in accordance with all rules and regulations;

            b. This party has gone  through  all the  necessary  procedures  and
obtained all the necessary  approvals under relevant laws and  regulations  with
which it shall comply, and it has all necessary rights, power and capacity under
such laws to execute this Contract and to perform all the obligations under this
Contract;

            c. This  party has taken all the  necessary  internal  measures  and
actions to obtain authorization to execute this Contract,  her representative(s)
who have signed this  Contract has been fully  authorized  to make this Contract
binding on its/their party;

            d. This  Contract  shall be  binding on each party as of the date of
validity;

            e. Execution  hereof or the  performance of obligation  hereunder by
this party shall not conflict with each/all  provision(s) herein below or result
in breach of such provision(s) or non-performance of either such provision(s) or
this  party's  article  of  association  or  internal  by-laws,   or  any  laws,
regulations,  or  authorization,  or approvals by any government  authorities or
organs,  or any  contract  or  agreement  to which this party is one party or is
binding to any party;

            f. There has not any  jurisdiction or arbitration or any other legal
or administrative  proceedings or government investigations against or threat to
against  this party,  which shall affect her capacity to execute or perform this
Contract;

            g. This party has disclosed all the materials held by it, in respect
of  establishment  of the Joint  Venture or the future  operations  of the Joint
Venture, which may have virtually unfavorable effect on this party's capacity to
fully perform all the obligations hereunder,  or, which may virtually affect the

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intention of the party hereto to execute the  Contract.  In case it is disclosed
to  other  party  hereto,  there  exists  no  furthermore  virtually  untrue  or
misguiding statements by this party to the other party hereto;

            h.  Provided  that each party hereto is in breach of any  statements
and  warrants as provided  in 8.1, it shall  indemnify  the other party from all
losses,  damages  and claims  suffered  from  (including  but not limited to any
interests accrued thereof and reasonable lawyer fee).

                                    ARTICLE 9
                                   TECHNOLOGY

      9.1.  Both  parties  agree that the Joint  Venture  company  shall use the
advanced  technology  and equipment for  manufacturing  of spare parts of car to
realize the production scale under article 5.

                                    ARTICLE 10
                        SALES OF THE JOINT VENTURE PRODUCTS

      10.1.  The products of the Joint  Venture may be sold in China and abroad.
Under the condition of meeting internationally  recognized quality standard, the
joint venture company shall try to export part of the product  overseas,  taking
into consideration of the market demands in accordance the economic interests of
the joint venture company.

      10.1. The joint venture  company shall be  responsible  for the selling of
the  products,  and the two parties  shall assist the joint  venture  company in
sales.  Any party has the  priority to purchase the products at the usual market
price. The two parties shall buy, according to the percentage of their equity in
the joint venture company in case of lacking in enough products.

      10.3. The joint venture  company may set up branches in China and overseas
appointing sales agents and distributors for sales and after-sales service after
relevant government  authorization.  The Board of Directors also can appoint any
party thereby as the sales agent or the distributor.

                                    ARTICLE 11
                                BOARD OF DIRECTORS

      11.1.  The Board of Directors of the Joint  Venture  shall be  established
upon the date that  business  license is issued.  The Board of  Directors is the
supreme power authority of the joint venture company.

      11.2.  The Board of Directors  shall  consist of three (3)  directors,  of
whom,  one (1) shall be appointed by Party A and two (2) by Party B.  Respective
parties  appoint  directors  in written  form with a term of office for four (4)
years. The appointing party may dismiss the appointed director any time, in case
that an  immediate  written  notice is sent to other  shareholders.  The related
party that nominates them may renew the  appointment of the directors.  If there
is  any  vacancy  on  the  Board  of  Directors  arising  from  the  retirement,
resignation,  dismissal,  lack of civil ability or the death of a director,  the
originally nominated party shall appoint a successor to continue the term of the
director with a written form to other shareholders.

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      11.3. The Board of Directors shall be one Chairman whom shall be appointed
by Party B. The Chairman shall be the legal  representative of the joint venture
company.  If, for any reason,  the  Chairman is unable to perform his duty,  any
other  director  shall be  authorized  by the  Chairman to perform his duties by
proxy.

      11.4.  Any  delegation,  dismissal,  appointment  or the  replacement of a
Chairman  or a director  shall be effected  pursuant to written  notice to other
shareholders  on receiving  the written  notice by the  shareholders.  The above
delegation,  dismissal,  appointment  or  the  replacement  therefore  shall  be
reported to and filed with examining and approving authority and registered with
related Administrative Department for Commerce and Industry.

      11.5. The Joint Venture  company shall  compensate all the indemnity claim
and responsibility for any director, in case that the indemnity is occurred when
the director  performs his duty of the Joint  Venture  company on the  condition
that the claim and responsibility is not incurred by the deliberate misdemeanor,
major negligence and intentional breach of the criminal law by that director.

      11.6. The first meeting of the Board of Directors shall be held within one
(1) month since the date that business license is issued.  Thereafter, the Board
of  Directors  shall  conduct at least a meeting  once a year.  Upon the written
request of more than one director  specifying  the matters to be discussed,  the
Chairman shall within thirty (30) days,  after  receiving the request  therefore
summon an ad hoc meeting of the Board of Directors.

      11.7. Written notice of the time, place, and agenda of each meeting of the
Board of Directors shall be sent by the Chairman to all the directors,  at least
fifteen (15) days before such  meeting.  The Chairman  shall put all the written
request of any director in the agenda to be discussed.  The summoned  meeting of
the Board of Directors  shall be deemed as invalid unless all the directors have
been  properly  notified  except  the  director  hand in the  written  notice of
voluntary  forfeiture before or after the meeting. The Boarding meeting shall be
conducted in the registration  place the Joint Venture or other places in or out
of China, which is determined by the Chairman.  The Chairman shall determine the
agenda of the  meeting,  convene  and  preside  over the meeting of the Board of
Directors.

      11.8. A quorum for the meeting of the Board of Directors shall exist if at
least two (2)  directors are present in person or by proxy.  The Chairman  shall
notice all the Board members for another  meeting  thirty (30) days prior to the
date of that  meeting if the quorum for the meeting of the Board of Directors is
less than two (2) of the  directors  present  in person or by proxy.  Each party
shall  make sure the  appointed  directors  present  all the  properly  summoned
meetings of the Board of Directors in person or by proxy.

      11.9. In the event a director is unable to attend a Board meeting,  he may
appoint  by notice in  writing a proxy to attend on his  behalf.  The  appointed
proxy may act as a director to represent  more than one  director if  authorized
and the appointed proxy shall be entitled the same rights as whom he represents.

      11.10.  Detailed  written  minutes  shall  be  recorded  in all the  Board
meetings. The resolution of the Boarding meeting shall be written in Chinese for
the signing of  directors  who are in approval  of the  resolution.  The minutes

                                       11
<PAGE>

shall be sent to all the directors  within  fifteen (15) days of the meeting and
the  directors  who hope to amend or  supplement  the minutes  shall hand in the
amendment and supplementary proposal to the Chairman in writing within seven (7)
days after  receiving the minutes (The signed written  resolution of the meeting
shall not be amended or supplemented).  The Chairman shall complete and sign the
minutes  (These  minutes  shall be deemed as ultimate)  and send one copy of the
minutes to all the  directors  and  parties  within  thirty  (30) days after the
meeting.  The Joint Venture shall file all the minutes for the free reference of
the two parties and their authorized representatives.

      11.11.  The  resolution and the  ratification  of the Board meetings shall
determine (but not limited to) the following major matters:

            a. Any amendment to the Article;

            b. Formulating plans for merger with another economic organization;

            c.   Disbanding  the  Joint  Venture  or  terminating  any  business
operation of the Joint Venture;

            d. Increasing,  transferring or decreasing the registered capital of
the Joint Venture;

            e. The  investment  of the Joint  Venture to any other  companies or
corporations;

            f. Setting up any branches or other operating places;

            g. Signing any  contract,  the contract  value of which exceeds four
million  U.S.  Dollars  (USD4,  000,000)  between  the  Joint  Venture  and  any
shareholder or the related  company as well as the amendment and  termination of
the contract;

            h. Subject to Article 16.12 thereafter, formulating after-tax profit
distribution plans of any fiscal year;

            i. The collected total amount of the three funds and the spending of
the money;

            j. The sale or  purchase  of any fixed  asset or real  estate  which
exceeds one hundred  thousand  U.S.  Dollars  (USD100,  000) as well as in other
currencies of the same value;

            k. The annual or the long-term  production plan, sales and promotion
plan, basic  construction plan,  research and development plan,  financing plan,
financial budget,  tax report as well as the audited financial  statement of the
Joint Venture;

            l. Signing any other commercial contract without the normal business
line of the Joint Venture,  the contract value of which exceeds two million U.S.
Dollars (USD2, 000,000) as well as in other currencies of the same value;

                                       12
<PAGE>

            m.  Receiving  any loan which  exceed  five  hundred  thousand  U.S.
Dollars (USD500, 000) as well as in other currencies of the same value;

            n. Providing any guarantee or loan for others by the Joint Venture;

            o. Deciding the basic  departmental  structure of the Joint Venture,
including setting positions for management  personnel which is not stipulated in
this Contract;

            p. The  internal  policy and the major  regulations  and Articles of
Association;

            q. The appointment,  dismissal,  remuneration and the welfare of the
management personnel;

            r. The  employment  of  external  accountant,  auditor and the legal
advisor;

            s. Opening bank account and appointing the signer;

            t. Any litigation or arbitration  claim of the Joint Venture and the
settlement of any legal claim related to the Joint Venture.

      11.12.  The following issues shall require approval from all the directors
of the Board with the presentation of the directors in person or by proxy in the
Board meeting summoned according to the stipulations herein.

            a. Any amendment to the Article;

            b. Formulating plans for merger with another economic organization;

            c.   Disbanding  the  Joint  Venture  or  terminating  any  business
operation of the Joint Venture company;

            d. Increasing,  transferring or decreasing the registered capital of
the Joint Venture company;

            e. Approval and termination of any service management contract.

      11.13. The resolution of other issues shall require the approval of a/half
directors  who  present  in  person or by proxy in the  Board  meeting  summoned
according to the stipulations herein.

      11.14.   The  Board  of  Directors   may  ratify  a   resolution   through
teleconference or with no meeting,  if all the incumbent  directors may sign the
resolution in written form. The  resolution  herein shall be filed with minutes,
bearing the same validity as those resolutions ratified in the Board meeting.

      11.15. Directors shall not be paid a salary except the reasonable expenses
(including but not limited to transportation and accommodations) incurred by the
directors as per the performance of their duties.

                                       13
<PAGE>

                                   ARTICLE 12
                              MANAGEMENT STRUCTURE

      12.1.  The  Joint  Venture  company  shall  set  up  operation  management
structure and stipulate  clauses and conditions of offering  management  service
thereof as well as the regulations employed by the management.

      12.2. The Joint Venture shall one General Manager as leader,  who shall be
appointed by and responsible to the Board of Directors.  The Joint Venture shall
have one Deputy Manager, one accountant and departmental  managers,  all of whom
are appointed by the Board of Directors and responsible to the General Manager.

      12.3 The duty of the General  Manager  shall be to organize and  supervise
the  day-to-day  management  of the Joint  Venture  company and to carry out the
resolutions of the Board of Directors.

      12.4  Unless  approved  by the Board of  Directors  of the  Joint  Venture
company,  the General Manager and all the other  management  personnel shall not
work as the  managers  in other  companies  or  corporations,  nor shall they be
allowed  to  work  as  directors,  consultant  or be  involved  in any  economic
interests  in  other  companies  and   corporations   which  are  in  commercial
competition with the Joint Venture.

      12.5.  The basic  organization  structure,  including  the  positions  for
management  personnel who are not  stipulated in the Contract shall be set up by
the  Joint  Venture.  The  details  of  the  organizational  structure  and  the
establishment of other positions  except those of management  personnel shall be
determined by the Board of Directors.

                                   ARTICLE 13
                       PURCHASE OF MATERIAL AND EQUIPMENT

      13.1. The Joint Venture may purchase the necessary machinery, instruments,
vehicles,  spare parts, and goods and materials for the operation the company in
or out of  China  and  obtain  the  necessary  service  for the  production  and
operation  of the  company.  The  necessary  raw  material,  fuel,  spare parts,
equipment,  etc, shall be bought within China if the condition,  price, quality,
and other aspects of terms are the same as those from aboard.

                                   ARTICLE 14
                    PREPARATION OF THE JOINT VENTURE COMPANY

      14.1.  During  preparation  of the joint  venture  company,  a preparation
office  shall be set up for  preparation  of Company  establishment.  The office
consists of one representative from each party.

      14.2. Work Scope of Preparation Office.

      14.3.  Purchase and check before  acceptance  goods such as equipment  and
materials.

      14.4. Formulate relevant administrative method.

                                       14
<PAGE>

      14.5.  Well organize  protection  and  classification  of relevant  files,
drawings, archives and data.

      14.6.  Salary of  Preparation  Office  staff and expenses  concerning  the
preparation  shall be  included  in the Set-up  Cost  (Organization  cost) after
approval of Board of Directors.

      14.7. After completion of the preparation, the preparation office shall be
cancelled by the board.

                                   ARTICLE 15
                                LABOR MANAGEMENT

      15.1. Labor matters  concerning the staff and workers of the joint venture
company such as the recruitment,  dismissal,  resignation salaries welfare shall
be in accordance with Labor Law. Its labor policy and implementation rules shall
be  approved  by the  board  and put into  force  by  General  Manager  or under
supervision of General Manager.

      15.2. Except executives,  the joint venture company shall recruit staff in
accordance  with  rules  of  individual  labor  contracts.   For  administrative
personnel   (executives),   the  joint  venture  company  abides  by  individual
appointment contracts approved by the board.

      15.3.  Employees  shall be selected  based on their major  qualifications,
characteristics  and working  experience.  For  specific  staff number and their
qualifications,  General  Manager  shall  decide by as per the  joint  venture's
actual  requirements.  Common staff  (non-executives)  shall be interviewed  and
selected by General  Manager or his  appointed  proxy.  Before  becoming  formal
employees of the joint venture,  all the staff shall  satisfactorily  pass three
months' probation.

      15.4.  Social  insurance  (such as pension,  unemployment,  medical,  work
injury,  maternity  leave) of every employee  during his employment  term in the
joint venture  company shall be borne by Company in accordance with relevant law
and  provisions,  but not include that before the date of  recruitment.  (As per
effective date of Labour Contract  entered into by the joint venture company and
Employee.)

      15.5.  The joint  venture  company shall abide by Country  provisions  and
rules & regulations  concerning  labor protection to ensure safety and civilized
production.  Social  insurance  of the joint  venture  company  employees  shall
confirm to "Labour Law".

                                   ARTICLE 16
                ACCOUNTING, AUDITING AND OTHER FINANCIAL AFFAIRS

      16.1 Chief accountant of the joint venture  company,  under the leadership
of General Manager, shall be responsible for the its financial administration.

      16.2. General Manager and Chief accountant shall draw up accounting system
and  procedures  in  accordance  with  "Accounting  System  of  Foreign-invested
Enterprises of People's Republic China" and other law provisions and regulations
for approval of the board.  These accounting systems and procedures shall be put
into record in Supervision  authorities of the joint venture  company,  relevant
local finance bureaus and taxation bureaus.

                                       15
<PAGE>

      16.3. The joint venture company shall adopt Renminbi as recording currency
used in  book-keeping.  Meanwhile,  it can  adopt U.S  Dollar  or other  foreign
currency as an auxiliary accounting currency.

      16.4. All vouchers,  receipts,  accounts books,  financial  statements and
reports shall be written in Chinese.

      16.5. Foreign currency will be converted to Renminbi at the middle rate of
buying and  selling  rate issued on current  day by the  People's  Bank of China
based on actual receipts and expenditure transactions.

      16.6. The fiscal year of the joint venture company shall coincide with the
calendar year. The first fiscal year of the joint venture company shall be up to
December  31 on the  Gregorian  calendar  as from the date of  getting  Business
License.

      16.7.  Both  parties  shall  have  ample and equal  opportunity  to review
accounts of the joint  venture  company,  which shall be properly  kept in legal
address of the joint venture  company.  The joint venture  company shall monthly
and quarterly provide the two parties with unaudited finance statements for them
to  continuously  get  acquaintance  about the  financial  results  of the joint
venture company. In addition, under the premise of charging her own expenses and
pre-notice to the joint venture  company in advance,  either party may invite an
accountant  registered in China or abroad to audit the joint venture  company on
behalf of  herself.  The joint  venture  company  shall  allow the auditor to be
responsible  for checking of all  financial  and  accounting  records  under the
condition  that  the  auditor  shall  keep  all  the  above  documents  strictly
confidential.

      16.8.  The joint  venture  company  shall invite a China Public  Certified
Accountant (CPA), which is independent from either party to audit accounts, make
fiscal financial statements and reports. The draft work sheet of audited finance
statements  and  reports  shall be  submitted  to the two  parties  and board of
directors for  examining  and verifying  within (two) months as from the date of
the end of every  fiscal year.  The final work sheet shall be  completed  within
(four) months as from the date of the end of every fiscal year.

      16.9.  The joint  venture  company  shall open  foreign  exchange  deposit
accounts  and  Renminbi  account  respectively  in China,  which are allowed for
foreign exchange  transactions.  After approval of the State  Administration  of
Foreign  Exchange,  the joint  venture  company can also open  foreign  exchange
account abroad.

      16.10.  Through  sales and  other  methods  approved  by  China's  Law and
provisions  (including  foreign  exchange  in banks and  foreign  exchange  swap
centers according to foreign exchange  administration  rules), the joint venture
company  shall,  on her own,  maintain a balance  between its  foreign  exchange
receipts and expenditures.

      16.11.  After prior year's loss  making-up,  the board of directors  shall
decide the percentage of allocations  for three reserve funds from profits after
tax.  Except for  additional  resolution  of the board of  directors,  the total
proportion  of three funds  withdrawn in any fiscal year shall not exceed 15% of
profits after tax.

                                       16
<PAGE>

      16.12.  Joint Venture  Company shall abide by the following  provisions to
distribute profits to both parties.

      16.13. The board of directors shall, within (four) months as from the date
of the end of every fiscal year,  decide the remaining  profits (after withdrawn
of three reserves) for production and operation and the profit to be distributed
proportionately to each party's investment in the joint venture company.

      16.14.  Profits may not be  distributed  before the losses of the previous
year have been made up.  Remaining  profits from previous year (or years) may be
distributed together with those of the current year.

      16.15. Profits for distribution shall be calculated in Renminbi. But Party
B enjoys first priority to be paid by foreign  exchange of Joint Company for her
part in shared  profits.  (Renminbi  shall be  converted  to U.S.  Dollar at the
middle rate of buying and selling rate issued by the  People's  Bank of China on
the date of resolution on profit  distribution  by the board of  directors.)  If
foreign  currency  fails to pay off Party B's entire  profit share by sufficient
foreign  exchange.  The joint venture company shall,  after receipt of Party A's
notice,  for the party B, immediately  convert the remaining Renminbi to foreign
currency in banks or foreign  exchange  swap center to Party B. Upon  failure of
exchange,  the joint venture  company shall,  after receipt of Party A's notice,
deposit  the  remaining   Renminbi   profit  into  an  interest  saving  account
individually  bank account in name of the joint  venture  company and  moreover,
keep  the  Renminbi  deposit  and  accrued  interests  for  Party B for  further
notification from Party B. As long as Party B requires to dispose the above-said
account in a way which  doesn't  conflict with China's Law and  provisions,  the
joint venture company shall immediately follow Party B's instructions.

      16.16.  As for profits and other payment from the joint venture company to
Part B abroad,  the joint  venture  company  shall,  under premise of abiding by
China's  foreign  exchange  administration  provisions,  remit the payment  into
banks' account abroad designated by Party B.

                                   ARTICLE 17
                                      TAXES

      17.1. The joint venture company shall pay all taxes and tariff  prescribed
by China local laws and relevant provisions.  Chinese and foreign Staff employed
by the  joint  venture  shall  pay  individual  income  tax  according  to  "the
Individual Income Tax Law of the People's Republic of China".

                                   ARTICLE 18
                                 CONFIDENTIALITY

      18.1.  Before or within  contract  period,  one  party  has  disclosed  or
probably may disclose his business,  financial position,  know how, research and
development and other confidential information or documents to other parties. In
addition,  the two parties may get confidential and private documents of the two

                                       17
<PAGE>

parties  and  vice  versa,  With  the  exception  of  other  Confidentiality  or
non-disclosure  agreements  or  provisions,  either Party and the joint  venture
company who accept all above documents  (with inclusion of written  documents or
non-written documents,  hereinafter referred as "secret documents" shall, within
the validity period of the contract and following two years.

            a. Keep them under secret conditions

            b. Except for her own employees who need to get  acquaintance of the
above  secret  documents  to fulfill  duties and will not  disclose to any other
person or Entity.

      18.2. The above  regulation  Article 18.1 shall not apply to the following
secret documents:

            a. Any  written  record can verify  that  these  documents  from the
disclosure party has been known to the other party before;

            b. Not due to the  receiver's  breach  of this  contract  but  those
documents are or have been published;

            c.  Secret  data  received  from  another  third  party  without any
non-disclosure liability; and

            d.  Data  required  to  be  disclosed  as  per  order  of  court  of
jurisdiction or government departments.

      18.3. As per required by one party,  the joint venture company should sign
another Non-disclosure agreement on the secret documents obtained from the party
or its related companies,  provisions of which shall be similar with those under
Article 18.

      18.4. Rule & regulations  shall be formulated by every party and the joint
venture company to ensure every party herself, related companies, Board members,
high-ranking  executives  and other  employees  can  equally  abide by the above
non-disclosure  liability  stipulated in Article 18. All directors,  manager and
other employees of the joint venture company shall sign a non-disclosure  letter
of guarantee with an acceptable style and contents.

      18.5. Rules and regulations  under this Article 18 are stipulated  without
prejudice to any possible  occurred rights or obligations of either Party or the
joint venture company under relevant Law or relevant provisions.

      18.6.  For any natural  person or legal  person of either party under this
contract,  after his transferred registered capital and correspondent rights and
obligations  no more belongs to his possession  alone,  article 18 keeps binding
upon  either  party.  In  addition,  even upon the  contract  expiration  of the
Duration or  termination  before the date of expiration or  dissolutions  of the
joint  venture,  rights  and  obligations  under  article 18 shall be kept valid
within prescribed period.

                                       18
<PAGE>

                                   ARTICLE 19
                     THE DURATION OF A JOINT VENTURE COMPANY

      19.1.  The  duration of a joint  venture  company  shall be 15 years.  The
duration  begins  from the date when the  joint  venture  is  issued a  business
license.

      19.2.  When both parties agree to extend the  duration,  the joint venture
shall file an  application  for  extending  the duration by the parties with the
examining and approving  authorities not less than (6) months before the date of
expiration  of the  duration.  Duration of contract  can only be extended  after
approval of the examining and approving authorities.

                                   ARTICLE 20
                 TERMINATION, BUSINESS ACQUISITION, LIQUIDATION

      20.1.   Except  extension  under  Article  19.2,  the  contract  shall  be
terminated  upon  expiration  of the joint  venture.  This  contract can also be
terminated through consultation in written. Either party shall have the right to
terminate the joint venture in case one of the  following  situations  occurs by
issuing a (30)  days  written  pre-notice  to other  parties  to  terminate  the
contract before the date of expiration.

      20.2.  The Joint Venture  company  stops  operation or can't pay off debts
due;

      20.3.  Any  jurisdiction  authorities  for  either  party  require to make
amendments to this contract or any article of the article of associations, which
will cause major unfavorable results to the joint venture company.

      20.4.  Have the right to terminate  this contract in  accordance  with the
articles of 6.7, 23.1, 24.3, 25.2.

      20.5.  All or part of the  joint  venture  company  is  confiscated,  thus
affecting major favorable results for the joint venture company.

      20.6. Either party violates the provisions prescribed under this contract,
assign or  transfer  all or part of shares in  registered  capital  of the joint
venture  company,  under which only  non-ceder  party has the right to terminate
this contract.

      20.7.  Either  party  virtually   violates  this  contract  or  rules  and
regulations of article of association and his such violating  activities are not
adjusted within (60) days as from the date of written notification of violation.

      20.8.  Either  party is declared  bankruptcy  or enters  into  bankruptcy,
dissolution  or  liquidation  procedures or is unable to pay off debts due, only
other unaffected party can terminate this contract.

      20.9. If either party issues notice  expression  willingness  to terminate
this contract under article 20.1 ,both parties shall go through  consultation to
try to cancel the causes of termination  within (two) months as from the date of
the notice.  If the problems keep unsolved  after  expiration of the above (two)
months, either party shall have rights to buy out the other party's equity under

                                       19
<PAGE>

the article 20.3 in the joint venture company.  But the condition shall be if it
belongs to the termination of (5), (6), (7) of article 20.1, the observant party
(parties)  or  non-affected  party  shall have the right to  purchase  equity of
defaulting party or affected party.

      20.10.  Upon  determination  before the date of expirations  under article
20.1  under  this  contract  or  before  expirations  of  cooperative   duration
stipulated under article 19, with the exception of stipulations prescribed under
20.2,  any  party  ("takeover  party"),  after  consent  from  the  other  party
("withdrawn  party")  can buy out the  withdrawn  party's  equity  in the  joint
venture  company (as an  enterprise  under  operations).  If the takeover  party
issues notice to buy out the other party's equity, both parties shall decide the
joint venture  company's  value  through  consultations.  If no  agreements  are
reached within thirty (30) days of discussion,  then within the following thirty
(30) days they shall appoint an international investment bank corporation, using
public  international  standards  to decide the value  (evaluated)  of the joint
venture as an enterprise  under business  operations.  Relevant charges occurred
should be borne the joint venture company.

      20.11. Business acquisition  (takeover) prices shall be multiplied product
of the following two items a value of the joint venture company  specified under
the item of article (1) multiply __Proportion of registered capital in the joint
venture of the  withdrawn  party.  The takeover  party can inform the  withdrawn
party  thirty (30) days in written  notice after final  evaluation  of the joint
venture  company  and buy out  equity of  withdrawn  party in the joint  venture
company via acquisition

      20.12.  If the takeover  party  chooses to buy out the equity of withdrawn
party in the joint  venture,  both  parties  shall  timely  sign a  transfer  or
assignment  contract on the above equity for necessary approval from authorities
for application and completion of the assignment. If the above assignment is not
completed  within  nintey  (90) days after the  receipt of notice  mentioned  in
article (2), then the acquisition  party has the right (but no  obligation),  at
any time, to terminate business  acquisition.  Under this situation,  assignment
application  shall be withdrawn and the joint  venture  company and both parties
shall apply for  dissolution  of the joint  venture  company from  examining and
approving authorities.

      20.13. After the termination of article 20 under this contract,  if either
party has not started the takeover procedures prescribed under the article 20.3,
it shall be deemed that the board of directors has unanimously agree to pass the
resolution to dissolve the joint venture company. Then the joint venture company
shall   immediately   apply  for   dissolution   from  examining  and  approving
authorities.  To terminate this contract or dissolve the joint venture  company,
either party agrees to take any action  prescribed in Law, signs up any document
prescribed  by law and agrees to promote Board members to take the above actions
and sign up the above documents accordantly.

                                   ARTICLE 21
           THE DISPOSAL OF ASSETS AFTER THE EXPIRATION OF THE DURATION

      21.1. Upon the expiration of contract duration, or approval of dissolution
in accordance with Article 20 or terminations of contract or dissolutions of the
joint  venture  under  other  conditions,  liquidation  shall be carried  out in
accordance with China's law, relevant provisions and rules and regulations below
for liquidation (except for those conflicting with Law).

                                       20
<PAGE>

      21.2. The liquidation committee shall be made up of three members. Party A
has right to appoint one member and Party B two members. Any resolutions made by
liquidation committee shall be unanimously approved.

      21.3. In the process of drafting and carrying out  liquidation  plan,  the
liquidation  committee  shall make all  efforts to get as high price as possible
for  assets  of the  joint  venture.  Moreover,  in  accordance  with the  State
Regulations  on Foreign  Exchange  Control,  assets shall be sold in U.S dollar,
other convertible foreign currencies or Renminbi.

      21.4.  Assets  evaluation  process  shall be operated  for any asset to be
liquidated.  The  liquidation  committee  shall  invite  an  accounting  firm to
perform,  which is  registered  in  China,  with  correspondent  qualifications,
moreover independent from either party.

      21.5.  Upon  distribution  of residual  assets after  liability and equity
disposal  and tax  composition,  Party B enjoys the first  priority  for foreign
exchange of the joint venture.  If foreign exchange in he joint venture fails to
pay  off  Party  B's  all  proportional  shares  in  the  residual  assets,  the
liquidation  committee  shall,  for the party B,  convert  Renminbi  to  foreign
exchange in Foreign exchange swap centers or banks.

      21.6.  After the  liquidation,  either  party  shall be entitled to obtain
copies of accounting vouches,  books,  financial statements,  meeting minutes of
the board of directors,  resolutions  and other relevant  documents at their own
expenses.

      21.7.  Articles 20.3, 20.4 and 21.1 shall be kept valid after the contract
Expiration of the Duration or  termination  before the date of expiration of the
joint  venture  until  all  takeover  procedures  under  article  20.3  and  the
liquidation work under the article 21.1 has been completed.

                                   ARTICLE 22
                                    INSURANCE

      22.1.  Throughout  contract period, the joint venture company on shall, in
all the time, cover insurance.  Types and value of insurance shall be decided by
General  Manager and approved by the board of directors.  In accordance with law
and  provisions  of the People's  Republic of China,  he joint venture can cover
insurance from Insurance companies or institutes in China and abroad.

                                   ARTICLE 23
                        LIABILITY FOR BREACH OF CONTRACT

      23.1. Should either Party fail to provide on schedule the contributions in
accordance  with the  provisions  defined  in  Article 6 of this  contract,  the
defaulting  party shall pay to the other party (3)% per month of the  prescribed
contributions  to observant  party starting from the first month after exceeding
the time  limit.  Should  the  defaulting  party fail for  accumulatively  three
months, he shall pay (9%) of the other party's prescribed  contribution shall to
the  other  party.  Meanwhile,  the  observant  party  shall  have the  right to
terminate  the contract  accordance  with the  provisions of Article 20.1 of the
contract.

                                       21
<PAGE>

      23.2.  Should all or part of the contract be unable to be fulfilled  owing
to the  fault  of one  party,  the  party in  breach  shall  bear the  liability
therefore.  Under all  circumstances,  the  liabilities of the above  defaulting
party  shall be  limited to the amount of their  respective  subscribed  capital
contributions

                                   ARTICLE 24
                                  FORCE MAJEURE

      24.1.  Any failure or delay in the  performance  by either Party hereto of
its  obligations  under this contract shall not constitute a breach hereof if it
is caused by the occurrences beyond the control, that is, force majeure.

      24.2.  The  declaring  prevented  party  shall  notify the other  party in
written without any delay,  and within (15) days thereafter  provide  sufficient
documents of Force Majeure and its affecting period for evidence.

      24.3.  Under the situation of Force Majeure,  the two Parties hereto shall
settle the problem through mutual  consultation  for a fair solution,  moreover,
shall  dedicate  all  reasonable  endeavors  to cut down its  influence.  If the
results or aftermath of Force Majeure  event has set up heavy  obstacles for the
operation  of the joint  venture  and lasts  over 6  months,  moreover,  no fair
solutions was found, both parties shall have the right to terminate the contract
under the premise that the Party who  terminates  the contract has fulfilled his
obligations prescribed under the article 24.3.

                                   ARTICLE 25
                         GOVERNING LAW AND JURISDICTION

      25.1. The formation, validity, interpretation, execution and settlement of
disputes in respect of, this contract  shall be governed by the relevant laws of
the People's  Republic of China. For unsettled problem under our contract having
no law stipulation, it shall be settled abiding by international trade practice.

      25.2 With  regard to newly  issued  law or rules and  provision  after the
effective date of this contract or amendments or new explanation for current law
provisions,  which may have virtual and  unfavorable  effect on interests of one
party under this contract,  two parties shall,  try their best,  effectuate most
necessary  amendments to keep the either party  economic  interests no less than
those before newly issued law or rules and provision after the effective date of
this contract or amendments or new explanation  for current law  provisions.  In
case of such  adjustments  failure,  any party whose interests were virtually or
unfavorably affected has the right to terminate this contract.

      25.3.  As from the date of this  contract,  the join  venture  and the two
parties  has the right to enjoy more  favorable  taxation,  investment  or other
treatments than those in this contract as Foreign-invested Enterprise or foreign
investors in accordance by law. As agreed,  the two parties or the joint venture
shall, under requirements of law, timely apply to enjoy favorable treatments the
above.

                                       22
<PAGE>

                                   ARTICLE 26
                             SETTLEMENT OF DISPUTES

      26.1.  Any disputes  arising from the execution of, or in connection  with
this  contract  shall be settled  through  friendly  consultations  between both
parties.   In  case  no   understanding   settlement  can  be  reached   through
consultations within sixty (60) days as from the date the written request from a
Party to the other party for  consultation,  the disputes  shall be submitted to
the China  International  Economic  and  Trade  Arbitration  Commission  ("Trade
Arbitration   Commission")  for  arbitration  in  accordance  with  its  current
effective rules in Beijing.

      26.2.  (3)  arbitrators  shall be  appointed,  including  (1) appointed by
Claimant and the other (1) by  defendant,  (1) Both parties may jointly  appoint
one arbitrator.  Under the failure of joint appointment,  Arbitration Commission
shall appoint the latter  arbitrator as the presiding  arbitrator in arbitration
tribunal.

      26.3. Arbitration procedures shall be written in Chinese.

      26.4. The arbitral award is final and binding upon both parties.

      26.5.  In the  course of  disputes,  rights  and  obligations  under  this
contract shall be  continuously  executed by both parties except the part of the
contract that is under arbitration.

      26.6. In any arbitration,  any  jurisdiction  procedures of enforcement of
arbitration  award and any  other  lawsuit  procedures,  either  party  declared
explicitly waiver of sovereign defenses, and other defenses based on such claims
or facts as an institute or department from an independent and sovereign state.

                                   ARTICLE 27
                                  OTHER CLAUSES

      27.1. The failure,  delay,  relaxation or indulgence on the part of either
party in exercising  any power or right  conferred  under this contract does not
operate as a waiver of that power or right,  nor does any single  exercise  of a
power or part exercise of right  preclude any other or further  exercise of this
power or right under this agreement.

      27.2. Except other provisions, neither party may assign or transfer all or
any part of its rights or obligations under this agreement subscribed to a third
party without the prior written  consent of the other party or approval from the
examination and approval authority as per required legally.

      27.3.  This  contract is hereto  made and entered  into by two parties two
parties based on mutual  interests of their lawful  successors  and assignees of
and is  legally  binding  This  contract  shall  not  be  subject  to  any  oral
amendments.  Any amendments to the contract or other  appendices shall come into
force only after a written  agreement  has been  signed  both  parties and after
approved by the examining and approving authority as per requirement legally.

                                       23
<PAGE>

      27.4. Any provision in this agreement,  which is invalid or unenforceable,
shall not affect the validity or  enforceability  of other  provision under this
contract.

      27.5. The contract  undersigned shall be written in Chinese and in 6 (six)
original copies.

      27.6. Any notice or written  correspondence from one party to the other or
the joint  venture  prescribed  d under our  contract  shall be in Chinese.  Any
notice shall be sent by express  courier or by fax. The express  service company
shall confirm the receipt of delivery.  For any notice or written correspondence
under this  contract,  seven (7) days as from the date from  handing  over to an
express  courier service company shall be deemed as Receipt Date, or, in case of
fax, one (1) day from the date as Receipt Date which, however, shall be verified
by fax confirmation  report. Any notice and correspondence  shall be sent to the
following address till written notice to the other Party for change of address.

      Party A

            RUILI GROUP CO.,LTD.
            Address: No.1169, Yu Meng Road, Economic Development Zone,
                     Rui An City
            Fax No.: 0577-65608962
            Attention: Zhang Xiaoping

      Party B

            FAIRFORD HOLDINGS LIMITED
            Address: No.12, Zhong Huan Xia Que Road
            Hong Kong Special Administrative Region 00852-25220172
            Attention: ZHANG Ronggang

            Joint Venture:

            RUILI GROUP RUIAN AUTO PARTS CO., LTD.
            Address: No.1169, Yu Meng Road, Economic Development Zone,
                     Rui An City
            Tel: 0577-65608962
            Attention: General Manager

      27.7.  This contract  iterates full agreements on contract object and thus
replaces all former discussions, negotiations and agreements on contract object.
If the  former  resolutions  conflict  with  provisions  prescribed  under  this
contract clause and the article of association, hereabove, if any, this contract
clause and regulations prevail.

                                       24
<PAGE>

      IN WITNESS  WHEREOF,  the Parties hereto have signed up this contracted by
their duly authorized  representatives  in Wenzhou,  Zhejiang province as of the
date on Jan. 19th, 2004 first above written.

                                    RUILI GROUP LIMITED

                                    By:
                                       -----------------------------------------
                                       Zhang Xiaoping,
                                    Title:  Board Chairman

                                    FAIRFORD HOLDINGS LIMITED

                                    By:
                                       -----------------------------------------
                                       Zhang Ronggang
                                    Title:  General Manager
                                    Nationality:  China

                                       25
<PAGE>

ARTICLE 1   General Provisions.............................................23

ARTICLE 2   The Two Parties of the Contract................................23

ARTICLE 3   Definitions....................................................23

ARTICLE 4   Foundation of the Joint Ventures Company.......................24

ARTICLE 5   Scope and Scale of Management..................................25

ARTICLE 6   Total Amount of Investment and the Registered Capital..........25

ARTICLE 7   The Responsibilities of Both Parties...........................29

ARTICLE 8   Mutual Declarations and Warranties.............................30

ARTICLE 9   Technology.....................................................31

ARTICLE 10  Sales of the Joint Venture Products............................31

ARTICLE 11  Board of Directors.............................................31

ARTICLE 12  Management Structure...........................................35

ARTICLE 13  Purchase of Material and Equipment.............................35

ARTICLE 14  Preparation of the Joint Venture Company.......................35

ARTICLE 15  Labor Management...............................................36

ARTICLE 16  Accounting, Auditing and Other Financial Affairs...............36

ARTICLE 17  Taxes..........................................................38

ARTICLE 18  Confidentiality................................................38

ARTICLE 19  The Duration of a Joint Venture Company........................40

ARTICLE 20  Termination, Business Acquisition, Liquidation.................40

ARTICLE 21  The Disposal of Assets after the Expiration of the Duration....41

ARTICLE 22  Insurance......................................................42

ARTICLE 23  Liability for breach of contract...............................42

ARTICLE 24  Force Majeure..................................................43

ARTICLE 25  Governing Law and Jurisdiction.................................43

                                       26
<PAGE>

ARTICLE 26  Settlement of Disputes.........................................44

ARTICLE 27  Other Clauses..................................................44

                                       27EXHIBIT 10.17

                                  CONFIDENTIAL

      THE  SECURITIES   OFFERED  HEREBY  HAVE  NOT  BEEN  REGISTERED  UNDER  THE
SECURITIES  ACT  OF  1933,  AS  AMENDED,  OR THE  LAWS  OF ANY  STATE  OR  OTHER
JURISDICTION.  THE SECURITIES  ARE BEING OFFERED FOR  INVESTMENT  PURPOSES ONLY,
WITHOUT A VIEW TO RESALE OR DISTRIBUTION  THEREOF, AND MAY NOT BE TRANSFERRED OR
DISPOSED  OF IN THE  ABSENCE  OF AN  EFFECTIVE  REGISTRATION  STATEMENT  FOR THE
SECURITIES  UNDER  THE  SECURITIES  ACT OF  1933,  AS  AMENDED,  AND  APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER  JURISDICTION,  OR THE  AVAILABILITY OF AN
EXEMPTION  FROM SUCH  REGISTRATION  REQUIREMENTS.  NEITHER  THE  SECURITIES  AND
EXCHANGE  COMMISSION  NOR  ANY  STATE  SECURITIES  COMMISSION  HAS  APPROVED  OR
DISAPPROVED OF THESE  SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
SECURITIES  PURCHASE  AGREEMENT  OR ANY OF THE  OTHER  OFFERING  DOCUMENTS.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                          SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT (this  "Agreement"),  dated January 12,
2004, by and between  INTERNATIONAL  TRAVEL CD'S,  INC., a Colorado  corporation
(the  "Company"),  and RAM  TRADING  LTD.,  a Cayman  Islands  exempted  company
("Purchaser").

                                R E C I T A L S:

      WHEREAS,  Purchaser  desires to purchase  and the Company  desires to sell
1,000,000 shares (the "Shares") of common stock, no par value per share ("Common
Stock"), of the Company on the terms and conditions set forth herein.

      NOW, THEREFORE, in consideration of the premises hereof and the agreements
set forth herein below, the parties hereto hereby agree as follows:

      1.    Sale and Purchase of Shares; Closing.

            (a) Sale and Purchase of Shares. Subject to the terms and conditions
hereof,  at the Closing (as defined below),  the Company shall issue and sell to
Purchaser,  and  Purchaser  shall  purchase  from the  Company,  the Shares at a
purchase price (the "Purchase Price") of $320,000.

            (b) Closing. The closing of the sale and purchase of the Shares (the
"Closing") shall take place by telephone,  facsimile  transmission and overnight
courier upon execution of this Agreement.  At the Closing: (i) the Company shall
deliver to Purchaser certificate(s)  evidencing the Shares; (ii) Purchaser shall
pay the Purchase  Price to the Company by check or wire transfer of  immediately
available  funds;  and (iii) the Company and Purchaser shall execute and deliver

<PAGE>

any  and  all  additional  documents,  certificates,   consents  and  agreements
necessary to release any funds or other property of the Company from escrow,  to
effectuate  the  transfer  of  the  Shares  or  to  complete  the   transactions
contemplated hereby.

      2.    Description of Securities.

            (a) Rights and  Obligations.  The Shares  shall have such rights and
obligations as set forth in the Company's Articles of Incorporation, as amended.

            (b) Restricted Securities. The Shares have not been registered under
the Securities Act of 1933, as amended (the "Securities  Act" or "Act"),  or any
applicable state securities, or "blue sky," laws, are "restricted securities" as
that  term is  defined  under  Rule 144 of the  Securities  Act,  and may not be
offered for sale or sold or otherwise  transferred in a transaction  which would
constitute a sale thereof  within the meaning of the  Securities Act unless such
Shares (i) have been  registered for sale under the Securities Act and have been
registered or qualified under  applicable  state securities laws relating to the
offer  and  sale of  securities;  or  (ii)  are  exempt  from  the  registration
requirements  of the  Securities  Act and are exempt  from the  registration  or
qualification  requirements of such state  securities laws. In any case where an
exemption is relied upon by Purchaser from the registration  requirements of the
Securities Act and the registration or qualification  requirements of such state
securities  laws,  Purchase shall furnish the Company with an opinion of counsel
stating that the proposed sale or other  disposition  of such  securities may be
effected  without  registration  under the Securities Act and will not result in
any  violation  of  any  applicable   state  securities  laws  relating  to  the
registration or  qualification  of securities for sale, such counsel and opinion
to be satisfactory to the Company.

      3.  Representations and Warranties of Purchaser.  Purchaser represents and
warrants to the Company as follows:

            (a) Corporate Power and Authority;  Binding Agreement. The execution
and  delivery  of  this  Agreement  by  Purchaser  and the  consummation  of the
transactions contemplated hereby are within the power and authority of Purchaser
and have been duly authorized by all necessary corporate or other organizational
action  of  Purchaser.  No other  corporation,  or other  organizational  act or
proceeding on the part of Purchaser is necessary to authorize  this Agreement or
the consummation of the transactions contemplated hereby.  Purchaser's signatory
hereto has full power and authority to execute and deliver this Agreement in the
name of and on behalf of  Purchaser,  and the  signature  is genuine.  When duly
executed and delivered by the parties  hereto,  this Agreement will constitute a
valid and legally  binding  obligation  of Purchaser  enforceable  against it in
accordance with its terms.

            (b) Accredited Investor. Purchaser has such knowledge and experience
in business and financial  matters that  Purchaser is capable of evaluating  the
merits of and risks  associated  with  purchasing  the Shares.  Purchaser  is an
"accredited investor" as that term is defined in Rule 501 of Regulation D of the
Securities Act.

            (c)  No  Conflict.  The  execution,   delivery  and  performance  by
Purchaser of the Agreement and the transactions  contemplated  hereby are within
the powers of Purchaser and will not constitute or result in a breach or default

                                       2
<PAGE>

under,  or conflict with, any order,  ruling or regulation of any court or other
tribunal or of any governmental  commission or agency, or any agreement or other
undertaking, to which Purchaser is a party or by which Purchaser is bound.

            (d) Investment Intent.  Purchaser hereby acknowledges that Purchaser
has been advised that this  offering has not been  registered  with, or reviewed
by, the  Securities  and Exchange  Commission  ("SEC")  because this offering is
intended to be a private offering pursuant to Section 4(2) of the Securities Act
and/or Rule 506 of Regulation D thereunder. Purchaser represents that the Shares
are being  purchased for  Purchaser's own account and not on behalf of any other
person, for investment purposes only and not with a view towards distribution or
resale to others.  Purchaser  agrees  that  Purchaser  will not attempt to sell,
transfer,  assign,  pledge or  otherwise  dispose  of all or any  portion of the
Shares  unless they are  registered  under the  Securities  Act or unless in the
opinion  of counsel an  exemption  from such  registration  is  available,  such
counsel  and  such  opinion  to  be  satisfactory  to  the  Company.   Purchaser
understands that the Shares have not been registered under the Securities Act by
reason of a claimed  exemption  under the  provisions of the Securities Act that
depends, in part, upon Purchaser's investment intention.

            (e) Other Securities Laws. Purchaser  understands that no securities
administrator  of any  state or other  jurisdiction  has  made  any  finding  or
determination relating to the fairness of this investment and that no securities
administrator  of any state has  recommended  or endorsed,  or will recommend or
endorse, the purchase and sale of the Shares.

            (f) No General Solicitation.  Purchaser acknowledges that no general
solicitation or general advertising (including  communications  published in any
newspaper, magazine, on the Internet or other broadcast) has been received by it
and that no public solicitation or advertisement with respect to the offering of
the Shares has been made to it.

            (g) Advice of Tax and Legal  Advisors.  Purchaser  has relied solely
upon the advice of its own tax and legal  advisors  with  respect to the tax and
other legal aspects of this investment.

            (h) Access to Information.  Purchaser has had access to all material
and relevant information  concerning the Company, and its management,  financial
condition,   capitalization,   market  information,  properties  and  prospects,
necessary  to enable  Purchaser  to make an informed  investment  decision  with
respect to its  investment  in the  Shares,  including  but not  limited to, the
Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December 31,
2002,  and the  Company's  Quarterly  Reports on Form 10-QSB for the three month
periods ended March 31, June 30, and September 30, 2003. Purchaser has carefully
read and  reviewed,  and is familiar with and  understands  the contents of, the
Form 10-KSB and Forms 10-QSB, including,  without limitation, the "Risk Factors"
set  forth  in the  Form  10-KSB.  Purchaser  acknowledges  that  it has had the
opportunity  to ask  questions  of  and  receive  answers  from,  and to  obtain
additional information from, representatives of the Company concerning the terms
and conditions of the Agreement,  the acquisition of the Shares, and the present
and proposed  business and financial  condition of the Company,  and has had all
such  questions  answered to its  satisfaction  and has been  supplied  with all
information requested.

                                       3
<PAGE>

            (i) No Brokers  Fees.  No person has or will receive from  Purchaser
or, to  Purchaser'  knowledge,  from any other  person,  any  compensation  as a
broker,  finder or advisor, or in any other capacity in connection with the sale
and purchase of the Shares

            (j) Legend on Certificates.  Purchaser  understands and acknowledges
that the Shares and any certificates  issued in replacement  therefor shall bear
the  following  legend,  in  addition  to any other  legend  required  by law or
otherwise:

            "THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT
            BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS
            AMENDED,  OR  APPLICABLE  SECURITIES  LAWS OF ANY STATE OR
            OTHER  JURISDICTION.  THE  SECURITIES  REPRESENTED BY THIS
            CERTIFICATE  HAVE BEEN TAKEN BY THE  REGISTERED  OWNER FOR
            INVESTMENT,  AND WITHOUT A VIEW TO RESALE OR  DISTRIBUTION
            THEREOF,  AND MAY NOT BE TRANSFERRED OR DISPOSED OF IN THE
            ABSENCE OF AN  EFFECTIVE  REGISTRATION  STATEMENT  FOR THE
            SECURITIES  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,
            AND  APPLICABLE  SECURITIES  LAWS OF ANY  STATE  OR  OTHER
            JURISDICTION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
            ISSUER THAT SUCH REGISTRATION STATEMENT IS NOT REQUIRED."

      4.  Representations  and  Warranties  of the Company.  The Company  hereby
represents and warrants to Purchaser as follows:

            (a) Organization and Standing of the Company.  The Company is a duly
organized and validly  existing  corporation  in good standing under the laws of
the State of Colorado with adequate  power and authority to conduct the business
in which it is now engaged,  has the corporate power and authority to enter into
this  Agreement,  and is duly qualified and licensed to do business as a foreign
corporation in such other states or  jurisdictions  as is necessary to enable it
to  carry on its  business,  except  where  failure  to do so  would  not have a
material adverse effect on its business.

            (b)  Corporate  Power and  Authority.  The execution and delivery of
this  Agreement  and  the  transactions   contemplated  hereby  have  been  duly
authorized by the Board of Directors of the Company.  No other  corporate act or
proceeding on the part of the Company is necessary to authorize  this  Agreement
or the consummation of the transactions  contemplated hereby. When duly executed
and delivered by the parties hereto,  this Agreement will constitute a valid and
legally binding obligation of the Company  enforceable  against it in accordance
with its terms,  except as such enforceability may be limited by (i) bankruptcy,
insolvency,  moratorium,  reorganization  or other  similar  laws and  legal and
equitable  principles  limiting or affecting the rights of creditors  generally;
and/or (ii) general principles of equity,  regardless of whether considered in a
proceeding in equity or at law.

            (c)  No  Conflict.  The  execution,   delivery  and  performance  by
Purchaser of the Agreement and the transactions  contemplated  hereby are within
the  powers  of the  Company  and will not  constitute  or result in a breach or

                                       4
<PAGE>

default under, or conflict with, any order, ruling or regulation of any court or
other tribunal or of any governmental  commission or agency, or any agreement or
other  undertaking,  to which the  Company is a party or by which the Company is
bound.

            (d) Reservation of Shares.  The requisite number of shares of Common
Stock have been duly  authorized  and reserved for issuance  upon the  Company's
receipt and  acceptance of payment  therefore,  or conversion of the Shares,  as
applicable,  and no further  corporate action is required for the valid issuance
of such Shares.

            (e) No Brokers  Fees.  No person has or will receive from  Purchaser
or, to  Purchaser'  knowledge,  from any other  person,  any  compensation  as a
broker,  finder or advisor, or in any other capacity in connection with the sale
and purchase of the Shares

      5. Registration Rights. The Company covenants and agrees as follows:

            5.1 For the  purpose of this  Section 5, the  following  definitions
shall apply:

                  (a) "Exchange Act" shall mean the  Securities  Exchange Act of
1934, as amended,  and the rules and regulations of the SEC  thereunder,  all as
the same shall be in effect at the time.

                  (b) "Person" shall mean an individual, partnership (general or
limited), corporation, limited liability company, joint venture, business trust,
cooperative,  association or other form of business organization, whether or not
regarded  as a legal  entity  under  applicable  law,  a trust  (inter  vivos or
testamentary),  an  estate  of a  deceased,  insane  or  incompetent  person,  a
quasi-governmental  entity,  a government  or any agency,  authority,  political
subdivision or other instrumentality thereof, or any other entity.

                  (c) "Register,"  "registered," and "registration"  shall refer
to a registration  effected by preparing and filing a registration  statement in
compliance with the Act, and the declaration or order of  effectiveness  of such
registration statement or document.

                  (d)  "Registration  Statement"  shall  mean  any  registration
statement  of the  Company  filed with the SEC  pursuant  to the  provisions  of
Paragraph 5.2 of this Agreement, which covers the resale of the Restricted Stock
on an  appropriate  form  then  permitted  by  the  SEC  to  be  used  for  such
registration and the sales  contemplated to be made thereby under the Securities
Act, or any similar rule that may be adopted by the SEC, and all  amendments and
supplements  to such  registration  statement,  including  any  pre-  and  post-
effective  amendments thereto,  in each case including the prospectus  contained
therein,  all  exhibits  thereto and all  materials  incorporated  by  reference
therein.

                  (e) "Restricted Stock" shall mean (i) the Shares; and (ii) any
additional  shares of Common Stock  issued or issuable  after the date hereof in
respect of any of the foregoing securities,  by way of a stock dividend or stock
split;  provided  that as to any  particular  shares of Restricted  Stock,  such
securities  shall cease to constitute  Restricted  Stock (x) when a Registration
Statement  with  respect  to the  sale  of such  securities  shall  have  become
effective  under  the Act and  such  securities  shall  have  been  disposed  of
thereunder, or (y) when such securities are permitted to be distributed pursuant

                                       5
<PAGE>

to Rule 144(k) (or any  successor  provision  to such Rule) under the Act or are
otherwise freely  transferable to the public without further  registration under
the Act.

                  (f) "Selling Stockholders" shall mean Purchaser and any of its
respective successors and assigns.

            5.2. Registration of the Shares.

                  (a) The  Company  shall  notify all  Selling  Stockholders  in
writing  at least  fifteen  (15) days  prior to the  filing of any  registration
statement  under  the  Securities  Act for  purposes  of a  public  offering  of
securities  of  the  Company  (including,   but  not  limited  to,  registration
statements  relating to secondary  offerings of securities  of the Company,  but
excluding  registration  statements  on SEC Forms  S-4,  S-8 or any  similar  or
successor forms) and will afford each such Selling Stockholder an opportunity to
include in such registration statement all or part of such Restricted Stock held
by such Selling Stockholder. Each Selling Stockholder desiring to include in any
such  registration  statement all or any part of the Restricted Stock held by it
shall, within ten (10) days after the  above-described  notice from the Company,
so notify the Company in writing. Such notice shall state the intended method of
disposition of the Restricted  Stock by such Selling  Stockholder.  If a Selling
Stockholder  decides  not  to  include  all  of  its  Restricted  Stock  in  any
registration  statement  thereafter  filed by the  Company,  such  Holder  shall
nevertheless  continue to have the right to include any Restricted  Stock in any
subsequent  registration statement or registration statements as may be filed by
the Company with respect to offerings of its securities,  all upon the terms and
conditions set forth herein.

                  (b) In the event that any  registration  pursuant to Paragraph
5.2(a) shall be, in whole or in part, an underwritten  public offering of Common
Stock on behalf of the Company, all Selling Stockholders proposing to distribute
their   Restricted  Stock  through  such   underwriting   shall  enter  into  an
underwriting  agreement in customary form with the  underwriter or  underwriters
selected  for such  underwriting  by the Company.  If the  managing  underwriter
thereof  advises  the  Company  in  writing  that in its  opinion  the number of
securities  requested  to be  included in such  registration  exceeds the number
which can be sold in an orderly  manner in such  offering  within a price  range
acceptable to the Company,  the Company shall include in such  registration  (i)
first, the securities the Company proposes to sell, (ii) second,  the securities
held by persons who are parties to an agreement  with the Company which provides
for "demand" or "mandatory"  registration rights and (iii) third, the Restricted
Stock and any other registrable securities eligible and requested to be included
in such  registration  to the extent that the number of shares to be  registered
under this clause  (iii) will not, in the opinion of the  managing  underwriter,
adversely affect the offering of the securities pursuant to clause (i) and (ii).
In such a case,  shares shall be  registered  pro rata among the holders of such
Restricted Stock and registrable securities on the basis of the number of shares
eligible for registration that are owned by all such holders and requested to be
included in such registration.

                  (c) Notwithstanding anything to the contrary contained herein,
the Company's obligation in Paragraphs 5.2(a) and 5.2(b) above shall extend only
to the  inclusion  of the  Restricted  Stock in a  Registration  Statement.  The
Company  shall  have no  obligation  to  assure  the  terms  and  conditions  of
distribution, to obtain a commitment from an underwriter relative to the sale of
the Restricted Stock or to otherwise assume any  responsibility  for the manner,
price or terms of the distribution of the Restricted Stock.

                                       6
<PAGE>

                  (d) The Company  shall have the right to terminate or withdraw
any  registration   initiated  by  it  under  this  Section  5.2  prior  to  the
effectiveness of such registration  without thereby  incurring  liability to the
holders of the Restricted Stock, regardless of whether any holder has elected to
include  securities  in such  registration.  The  Registration  Expenses of such
withdrawn  registration shall be borne by the Company in accordance with Section
5.4 hereof.

            5.3. Registration  Procedures.  Whenever it is obligated to register
any Restricted Stock pursuant to this Agreement, the Company shall:

                  (a)  prepare  and file with the SEC a  Registration  Statement
with respect to the  Restricted  Stock in the manner set forth in Paragraph  5.2
hereof and use its reasonable best efforts to cause such Registration  Statement
to become  effective as promptly as possible and to remain  effective  until the
earlier  of (i) the  period in which  all  shares of  Restricted  Stock  covered
thereby shall have been sold, or (ii) nine (9) months from the effective date of
the first  Registration  Statement filed by the Company with the SEC pursuant to
this Agreement or with respect to any  subsequent  Registration  Statement,  180
days from the effective date of such Registration Statement;

                  (b) prepare and file with the SEC such  amendments  (including
post-effective  amendments) and supplements to such  Registration  Statement and
the  prospectus  used in  connection  therewith as may be necessary to keep such
Registration  Statement  effective for the period  specified in Paragraph 5.3(a)
above  and to  comply  with  the  provisions  of the  Act  with  respect  to the
disposition of all Restricted  Stock covered by such  Registration  Statement in
accordance   with  the  intended   method  of  disposition  set  forth  in  such
Registration Statement for such period;

                  (c) furnish to the Selling  Stockholders such number of copies
of the Registration  Statement and the prospectus  included  therein  (including
each preliminary  prospectus) as such person may reasonably  request in order to
facilitate the public sale or other  disposition of the Restricted Stock covered
by such Registration Statement;

                  (d) use its reasonable best efforts to register or qualify the
Restricted  Stock  covered  by  such  Registration  Statement  under  the  state
securities  laws  of  such  jurisdictions  as  any  Selling   Stockholder  shall
reasonably request;  provided,  however, that the Company shall not for any such
purpose be  required  to qualify  generally  to  transact  business as a foreign
corporation  in any  jurisdiction  where it is not so qualified or to consent to
general service of process in any such jurisdiction;

                  (e) in the event of any underwritten  public  offering,  enter
into and perform its obligations under an underwriting  agreement,  in usual and
customary  form,  with  the  managing  underwriter(s)  of  such  offering.  Each
Purchaser  participating in such underwriting  shall also enter into and perform
its obligations under such an agreement, as described in Section 6.2(b);

                                       7
<PAGE>

                  (f)  immediately  notify each Selling  Stockholder at any time
when a prospectus relating thereto is required to be delivered under the Act, of
the happening of any event as a result of which the prospectus contained in such
Registration  Statement,  as then in effect,  includes an untrue  statement of a
material  fact or omits to state a material  fact  required or  necessary  to be
stated therein in order to make the statements  contained therein not misleading
in light of the  circumstances  under which they were made. The Company will use
reasonable efforts to amend or supplement such prospectus in order to cause such
prospectus  not to include any untrue  statement  of a material  fact or omit to
state a material  fact  required to be stated  therein or  necessary to make the
statements therein not misleading in the light of the circumstances  under which
they were made;

                  (g)  prepare  and  file  with  the  SEC  such  amendments  and
supplements to such registration statement and the prospectus used in connection
with  such  registration  statements  as may be  necessary  to  comply  with the
provisions  of  the  Securities  Act  with  respect  to the  disposition  of all
securities covered by such registration statement;

                  (h) make available for  inspection by any Selling  Stockholder
and any attorney, accountant or other agent retained by any Selling Stockholder,
all financial and other records, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to supply
all  information  reasonably  requested  by any Selling  Stockholder,  attorney,
accountant or agent in connection with such  Registration  Statement;  provided,
however,  that such Selling  Stockholder,  underwriter,  attorney or  accountant
shall agree to hold in confidence and trust all information so provided;

                  (i) use its  reasonable  best  efforts to list the  Restricted
Stock  covered by such  Registration  Statement  on each  exchange or  automated
quotation  system on which  similar  securities  issued by the  Company are then
listed  (with the  listing  application  being made at the time of the filing of
such Registration Statement or as soon thereafter as is reasonably practicable);

                  (j) notify each Selling  Stockholder  of any threat by the SEC
or state  securities  commission to undertake a stop order with respect to sales
under the Registration Statement; and

                  (k) cooperate in the timely removal of any restrictive legends
from the shares of Restricted Stock in connection with the resale of such shares
covered by an effective Registration Statement.

            5.4. Delay of Registration.  No Selling  Stockholder  shall have any
right to obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any  controversy  that might arise with respect to
the interpretation or implementation of this Section 5.

            5.5 Expenses.

                  (a)  For  the  purposes  of  this   Paragraph  5.5,  the  term
"Registration  Expenses"  shall mean:  all  expenses  incurred by the Company in
complying with Paragraph 5.2 of this Agreement,  including,  without limitation,
all registration and filing fees,  printing expenses,  fees and disbursements of

                                       8
<PAGE>

counsel and independent public accountants for the Company,  reasonable fees and
disbursements  of a single special  counsel for the Selling  Stockholders,  fees
under state  securities  laws,  fees of the National  Association  of Securities
Dealers, Inc. ("NASD"),  fees and expenses of listing shares of Restricted Stock
on any securities  exchange or automated quotation system on which the Company's
shares are listed and fees of transfer agents and registrars.  The term "Selling
Expenses"  shall  mean:  all  underwriting  discounts  and  selling  commissions
applicable   to  the  sale  of   Restricted   Stock  and  all   accountable   or
non-accountable expenses paid to any underwriter in respect of such sale.

                  (b) Except as otherwise  provided herein, the Company will pay
all Registration  Expenses in connection with the Registration  Statements filed
pursuant to Paragraph 5.2 of this Agreement.  All Selling Expenses in connection
with  any  Registration  Statements  filed  pursuant  to  Paragraph  5.1 of this
Agreement  shall be borne by the Selling  Stockholders  pro rata on the basis of
the number of shares  registered  by each  Selling  Stockholder  whose shares of
Restricted Stock are covered by such Registration  Statement, or by such persons
other than the  Company  (except to the extent the  Company  may be a seller) as
they may agree.

            5.6. Obligations of the Selling Stockholder.

                  (a) In  connection  with  each  registration  hereunder,  each
Selling Stockholder will furnish to the Company in writing such information with
respect to it and the securities held by it and the proposed distribution by it,
as shall be  reasonably  requested by the Company in order to assure  compliance
with applicable  federal and state  securities laws as a condition  precedent to
including  the  Selling  Stockholder's  Restricted  Stock  in  the  Registration
Statement.  Each Selling  Stockholder  shall also promptly notify the Company of
any  changes in such  information  included  in the  Registration  Statement  or
prospectus as a result of which there is an untrue statement of material fact or
an omission  to state any  material  fact  required  or  necessary  to be stated
therein in order to make the  statements  contained  therein not  misleading  in
light of the circumstances under which they were made.

                  (b)  In  connection  with  the  filing  of  the   Registration
Statement, each Selling Stockholder shall furnish to the Company in writing such
information  and  affidavits  as the  Company  reasonably  requests  for  use in
connection with such Registration Statement or prospectus.

                  (c) In  connection  with each  registration  pursuant  to this
Agreement,  each Selling Stockholder agrees that it will not effect sales of any
Restricted  Stock  until  notified by the  Company of the  effectiveness  of the
Registration Statement,  and thereafter will suspend such sales after receipt of
telegraphic  or written  notice from the Company to suspend  sales to permit the
Company to correct or update a Registration Statement or prospectus.  At the end
of any period  during  which the  Company is  obligated  to keep a  Registration
Statement  current,   each  Selling   Stockholder  shall  discontinue  sales  of
Restricted Stock pursuant to such Registration  Statement upon receipt of notice
from the Company of its  intention to remove from  registration  the  Restricted
Stock covered by such  Registration  Statement  which remains  unsold,  and each
Selling  Stockholder shall notify the Company of the number of shares registered
which remain unsold immediately upon receipt of such notice from the Company.

                                       9
<PAGE>

            5.7. Information Blackout and Holdbacks.

                  (a)  At  any  time  when  a  Registration  Statement  effected
pursuant to Paragraph 5.2 is effective,  upon written notice from the Company to
Purchaser  that  the  Company  has  determined  in good  faith  that the sale of
Restricted Stock pursuant to the Registration Statement would require disclosure
of non-public material information,  Purchaser shall suspend sales of Restricted
Stock  pursuant to such  Registration  Statement  until such time as the Company
notifies  Purchaser  that such material  information  has been  disclosed to the
public or has ceased to be material, or that sales pursuant to such Registration
Statement may otherwise be resumed.

                  (b)  Notwithstanding  any other  provision of this  Agreement,
Purchaser  shall not effect any public  sale or  distribution  (including  sales
pursuant  to Rule  144),  if and when  available,  of equity  securities  of the
Company,  or any securities  convertible into or exchangeable or exercisable for
such  securities,  during the thirty (30) days prior to the  commencement of any
primary  offering  to be  undertaken  by the  Company of shares of its  unissued
Common Stock ("Primary Offering"),  which may also include other securities, and
ending  one  hundred  twenty  (120) days after  completion  of any such  Primary
Offering,  unless  the  Company,  in  the  case  of a  non-underwritten  Primary
Offering,  or the managing  underwriter,  in the case of an underwritten Primary
Offering, otherwise agree.

            5.8. Indemnification.

                  (a) The Company agrees to indemnify,  to the extent  permitted
by  law,  each  Selling  Stockholder,   such  Selling  Stockholder's  respective
partners,  officers,  directors,  underwriters  and each Person who controls any
Selling Stockholder (within the meaning of the Act) against all losses,  claims,
damages,  liabilities  and  expenses  caused by (i) any untrue  statement  of or
alleged  untrue  statement  of  material  fact  contained  in  the  Registration
Statement,  prospectus or  preliminary  prospectus  or any amendment  thereof or
supplement thereto,  (ii) any omission of or alleged omission of a material fact
required to be stated  therein or necessary to make the  statements  therein not
misleading,  or (iii) any  violation or alleged  violation by the Company of the
Act,  the  Exchange  Act,  any state  securities  law or any rule or  regulation
promulgated  under the Act,  the  Exchange  Act or any state  securities  law in
connection   with  the   offering   covered  by  such   registration   statement
("Violations");  provided,  however,  that the indemnity  agreement contained in
this Section  5.8(a) shall not apply to amounts paid in  settlement  of any such
loss, claim, damage,  liability or action if such settlement is effected without
the consent of the Company,  which consent shall not be  unreasonably  withheld,
nor shall the Company be liable in for any loss,  claim,  damage,  liability  or
action to the extent  that it arises out of or is based upon a  Violation  which
occurs in reliance upon and in  conformity  with written  information  furnished
expressly  for  use  in  connection  with  such  registration  by  such  Selling
Stockholder,  partner, officer,  director,  underwriter or controlling person of
such Selling Stockholder.

                  (b) To the extent  permitted by law, each Selling  Stockholder
shall  indemnify  and hold  harmless the  Company,  each of its  directors,  its
officers and each person, if any, who controls the Company within the meaning of
the Act, any underwriter and any other Selling  Stockholder  selling  securities
under such  registration  statement or any of such other  Selling  Stockholder's
partners,  directors  or  officers  or any  person  who  controls  such  Selling

                                       10
<PAGE>

Stockholder,  against  any  losses,  claims,  damages or  liabilities  (joint or
several) to which the Company or any such director, officer, controlling person,
underwriter or other such Selling Stockholder,  or partner, director, officer or
controlling person of such other Selling  Stockholder,  may become subject under
the Act, the Exchange Act or other federal or state law, insofar as such losses,
claims,  damages or liabilities (or actions in respect  thereto) arise out of or
are  based  upon any  Violation,  in each  case to the  extent  (and only to the
extent) that such  Violation (i) occurs in reliance upon and in conformity  with
written  information  furnished by such Selling  Stockholder under an instrument
duly  executed  by such  Selling  Stockholder  for use in  connection  with such
registration;  or (ii) occurs as a result of any  disposition  of the Restricted
Stock  in  a  manner  that  fails  to  comply  with  the  permitted  methods  of
distribution identified within the Registration Statement.

                  (c) Any Person entitled to indemnification hereunder shall (i)
give prompt written notice to the  indemnifying  party of any claim with respect
to which it seeks  indemnification  (provided  that the  failure to give  prompt
notice shall not impair any Person's right to  indemnification  hereunder to the
extent such failure has not prejudiced the indemnifying  party), and (ii) unless
in such indemnified  party's reasonable  judgment a conflict of interest between
such indemnified and indemnifying  parties may exist with respect to such claim,
permit such indemnifying  party to assume the defense of such claim with counsel
reasonably  satisfactory to the  indemnified  party. If such defense is assumed,
the indemnifying  party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably  withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses  of  more  than  one  counsel  for  all  parties  indemnified  by  such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any  indemnified  party  a  conflict  of  interest  may  exist  between  such
indemnified party and any other of such indemnified parties with respect to such
claim.

                  (d) If the indemnification provided for in this Section 5.8 is
held by a court of competent  jurisdiction  to be  unavailable to an indemnified
party with respect to any losses,  claims,  damages or  liabilities  referred to
herein,  the indemnifying  party, in lieu of indemnifying such indemnified party
thereunder,  shall to the extent  permitted by applicable  law contribute to the
amount  paid or  payable  by such  indemnified  party as a result of such  loss,
claim,  damage or liability in such  proportion as is appropriate to reflect the
relative fault of the indemnifying  party on the one hand and of the indemnified
party on the other in  connection  with the  violation(s)  described  in Section
5.8(a) that resulted in such loss,  claim,  damage or liability,  as well as any
other relevant equitable considerations.  The relative fault of the indemnifying
party and of the  indemnified  party  shall be  determined  by a court of law by
reference to, among other things, whether the untrue or alleged untrue statement
of a  material  fact  or the  omission  to  state a  material  fact  relates  to
information  supplied by the indemnifying  party or by the indemnified party and
the parties' relative intent,  knowledge,  access to information and opportunity
to correct or prevent such  statement or  omission;  provided,  that in no event
shall  any  contribution  by a  Selling  Stockholder  hereunder  exceed  the net
proceeds from the offering received by such Selling Stockholder.

                  (e) The  indemnification  provided  for under  this  Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the  indemnified  party or any  officer,  director  or  controlling

                                       11
<PAGE>

Person of such  indemnified  party and shall survive the transfer of securities.
The Company also agrees to make such  provisions as are reasonably  requested by
any indemnified  party for contribution to such party in the event the Company's
indemnification is unavailable for any reason.

      6.  Notices.  All  notices,  requests,  consents  or other  communications
required or permitted  hereunder shall be in writing and shall be hand delivered
or mailed,  first class postage prepaid,  by registered or certified mail to the
following addresses:

            If to the Company:

                  International Travel CD's, Inc.
                  111 Presidential Boulevard, Suite 158A
                  Bala Cynwyd, PA 19004
                  Attention:  President

            With a copy to:

                  Spector Gadon & Rosen, P.C.
                  Seven Penn Center
                  1635 Market Street, 7th Floor
                  Philadelphia, PA 19103
                  Attention: Vincent A. Vietti, Esquire

            If to Purchaser:

                  To that address indicated on the signature page hereof.

            Unless specified  otherwise,  such notices and other  communications
shall for all  purposes of this  Agreement  be treated as being  effective  upon
being  delivered  personally  or, if sent by mail,  five days after the same has
been  deposited in a regularly  maintained  receptacle for the deposit of United
States mail, addressed as set forth above, and postage prepaid.

      7.  Confidentiality.  The existence and contents of this Agreement and the
transactions  contemplated hereby are confidential and shall not be disclosed by
Purchaser  to any person for any  reason.  Purchaser  understands  that  certain
information contained herein may be regarded as material non-public  information
under Regulation FD under the Securities Act. Purchaser hereby acknowledges that
it remains bound by its prior express agreement to maintain the  confidentiality
of  such  information  and to  not  disclose  such  information  to any  person.
Purchaser  understands  that  federal law  provides  severe  civil and  criminal
penalties for trading in the public  market on the basis of material  non-public
information.

      8.   Survival  of   Representations   and   Warranties,   Indemnification.
Representations and warranties  contained herein shall survive the execution and
delivery of this  Agreement.  Purchaser  agrees to indemnify,  hold harmless and
defend the Company and its respective  affiliates and agents with respect to any
and all loss, damage,  expense, claim, action or liability any of them may incur
as a result of the breach or untruth of any  representations  or warranties made

                                       12
<PAGE>

by Purchaser  herein,  and  Purchaser  agrees that in the event of any breach or
untruth of any  representations  or  warranties  made by Purchaser  herein,  the
Company  may,  at its  option,  forthwith  rescind  the  sale of the  Shares  to
Purchaser.

      9. Parties in Interest.  All the terms and  provisions  of this  Agreement
shall be  binding  upon,  inure to the  benefit  of, and be  enforceable  by the
respective successors and permitted assigns of the parties hereto, provided that
this  Agreement  and the  interests  herein may not be assigned by either  party
without the express written consent of the other party.

      10.  Governing Law. This  Agreement  shall be governed by and construed in
accordance with the laws of the State of Colorado.

      11. Sections and Other Headings.  The section and other headings contained
in  this  Agreement  are  for  the  convenience  of  reference  only  and do not
constitute  part of this  Agreement  or otherwise  affect any of the  provisions
hereof.

      12. Severability.  If one or more provisions of this Agreement are held to
be  unenforceable  under  applicable  law, such provision shall be excluded from
this Agreement and the balance of the Agreement  shall be interpreted as if such
provisions  were so excluded and shall be  enforceable  in  accordance  with its
terms.

      13. Counterpart Signatures.  This Agreement may be executed in counterpart
and  delivered via  facsimile,  both of which shall be deemed to be an original,
and both of which together shall be deemed to be one and the same instrument.

      14. Entire  Agreement.  This Agreement  constitutes  the entire  agreement
between the parties  with  respect to the subject  matter  hereto,  and no party
shall be  liable or bound to any other  party in any  manner by any  warranties,
representations,  guarantees or covenants  except as  specifically  set forth in
this  Agreement.  The terms and conditions of this Agreement  shall inure to the
benefit of and be binding  upon the  respective  successors  and  assigns of the
parties.  Nothing in this Agreement,  express or implied,  is intended to confer
upon any party other than the parties hereto or their respective  successors and
assigns any rights,  remedies,  obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.

                  [Remainder of Page Intentionally Left Blank]

                                       13
<PAGE>

      IN WITNESS WHEREOF, intending to be legally bound, the parties hereto have
caused this Agreement to be signed by their duly  authorized  officers as of the
date first written above.

                                  RAM TRADING, LTD.

                                  By: /s/ James R. Park
                                      ------------------------------------------
                                      Name: James R. Park
                                      Title: VP Ritchie Capital Management, LLC,
                                             Investment Advisor to RAM Trading,
                                             Ltd.

                                  INTERNATIONAL TRAVEL CD'S, INC.

                                  By:  /s/ Mark A. Bush
                                      ------------------------------------------
                                      Name: Mark A. Bush
                                      Title: President

                                       14

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