Document:

EXHIBIT 4.2

                           THE JACKSON RIVERS COMPANY
           NON-EMPLOYEE DIRECTORS AND CONSULTANTS RETAINER STOCK PLAN
                             FOR THE YEAR 2004 NO. 2

     1.   Introduction.  This  Plan  shall  be  known as the "The Jackson Rivers
          ------------
Company  Non-Employee Directors and Consultants Retainer Stock Plan for the Year
2004 No. 2," and is hereinafter referred to as the "Plan."  The purposes of this
Plan  are  to  enable  The  Jackson  Rivers  Company, a Florida corporation (the
"Company"),  to  promote  the  interests  of the Company and its stockholders by
attracting  and  retaining  non-employee  Directors  and  Consultants capable of
furthering  the  future  success  of  the Company and by aligning their economic
interests more closely with those of the Company's stockholders, by paying their
retainer  or fees in the form of shares of the Company's common stock, par value
$0.001  per  share  (the  "Common  Stock").

     2.   Definitions.  The  following  terms  shall have the meanings set forth
          -----------
below:

     "Board"  means  the  Board  of  Directors  of  the  Company.

     "Change  of  Control"  has the meaning set forth in Paragraph 12(d) hereof.

     "Code"  means  the Internal Revenue Code of 1986, as amended, and the rules
and  regulations  thereunder. References to any provision of the Code or rule or
regulation  thereunder  shall  be  deemed  to  include  any amended or successor
provision,  rule  or  regulation.

     "Committee"  means  the committee that administers this Plan, as more fully
defined  in  Paragraph  13  hereof.

     "Common  Stock"  has  the  meaning  set  forth  in  Paragraph  1  hereof.

     "Company"  has  the  meaning  set  forth  in  Paragraph  1  hereof.

     "Consultants"  means  the  Company's  consultants and advisors only if: (i)
they  are  natural persons; (ii) they provide bona fide services to the Company;
and  (iii)  the  services  are  not  in  connection  with  the  offer or sale of
securities  in  a capital-raising transaction, and do not directly or indirectly
promote  or  maintain  a  market  for  the  Company's  securities.

     "Deferral  Election"  has  the  meaning  set  forth  in Paragraph 6 hereof.

     "Deferred  Stock  Account"  means  a  bookkeeping account maintained by the
Company  for a Participant representing the Participant's interest in the shares
credited  to  such  Deferred  Stock  Account  pursuant  to  Paragraph  7 hereof.

     "Delivery  Date"  has  the  meaning  set  forth  in  Paragraph  6  hereof.

     "Director" means an individual who is a member of the Board of Directors of
the  Company.

     "Dividend  Equivalent"  for  a given dividend or other distribution means a
number  of  shares  of  the  Common  Stock having a Fair Market Value, as of the
record date for such dividend or distribution, equal to the amount of cash, plus
the  Fair  Market  Value  on  the  date of distribution of any property, that is
distributed  with  respect  to  one  share  of the Common Stock pursuant to such
dividend  or  distribution;  such  Fair  Market  Value  to  be determined by the
Committee  in  good  faith.

     "Effective  Date"  has  the  meaning  set  forth  in  Paragraph  3  hereof.

     "Exchange  Act"  has  the  meaning  set  forth  in  Paragraph 12(d) hereof.

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     "Fair  Market Value" means the mean between the highest and lowest reported
sales  prices  of the Common Stock on the New York Stock Exchange Composite Tape
or, if not listed on such exchange, on any other national securities exchange on
which  the  Common  Stock is listed or on The Nasdaq Stock Market, or, if not so
listed  on  any  other  national securities exchange or The Nasdaq Stock Market,
then  the  average  of  the  bid  price of the Common Stock during the last five
trading  days  on  the OTC Bulletin Board immediately preceding the last trading
day  prior  to  the  date  with  respect to which the Fair Market Value is to be
determined.  If  the  Common  Stock  is  not then publicly traded, then the Fair
Market  Value  of  the  Common  Stock shall be the book value of the Company per
share  as  determined  on the last day of March, June, September, or December in
any  year  closest  to  the  date when the determination is to be made.  For the
purpose  of  determining book value hereunder, book value shall be determined by
adding  as  of  the  applicable date called for herein the capital, surplus, and
undivided  profits  of  the  Company,  and  after  having  deducted any reserves
theretofore  established;  the sum of these items shall be divided by the number
of shares of the Common Stock outstanding as of said date, and the quotient thus
obtained shall represent the book value of each share of the Common Stock of the
Company.

     "Participant"  has  the  meaning  set  forth  in  Paragraph  4  hereof.

     "Payment  Time"  means  the  time  when  a  Stock  Retainer is payable to a
Participant  pursuant to Paragraph 5 hereof (without regard to the effect of any
Deferral  Election).

     "Stock  Retainer"  has  the  meaning  set  forth  in  Paragraph  5  hereof.

     "Third  Anniversary"  has  the  meaning  set  forth  in Paragraph 6 hereof.

     3.   Effective  Date  of  the  Plan.  This  Plan  was  adopted by the Board
          ------------------------------
effective  April  16,  2004  (the  "Effective  Date").

     4.   Eligibility.  Each  individual  who is a Director or Consultant on the
          -----------
Effective  Date  and  each  individual  who  becomes  a  Director  or Consultant
thereafter  during  the  term  of  this  Plan,  shall  be  a  participant  (the
"Participant")  in this Plan, in each case during such period as such individual
remains a Director or Consultant and is not an employee of the Company or any of
its  subsidiaries.  Each  credit  of shares of the Common Stock pursuant to this
Plan shall be evidenced by a written agreement duly executed and delivered by or
on  behalf of the Company and a Participant, if such an agreement is required by
the  Company  to  assure  compliance  with  all applicable laws and regulations.

     5.   Grants  of  Shares.  Commencing  on  the Effective Date, the amount of
          ------------------
compensation  for service to directors or consultants shall be payable in shares
of  the  Common Stock (the "Stock Retainer") pursuant to this Plan at the deemed
issuance  price  of  $0.045  per  Share.

     6.   Deferral Option.  From and after the Effective Date, a Participant may
          ---------------
make an election (a "Deferral Election") on an annual basis to defer delivery of
the Stock Retainer specifying which one of the following ways the Stock Retainer
is to be delivered (a) on the date which is three years after the Effective Date
for  which  it was originally payable (the "Third Anniversary"), (b) on the date
upon  which the Participant ceases to be a Director or Consultant for any reason
(the  "Departure  Date")  or (c) in five equal annual installments commencing on
the  Departure  Date  (the  "Third  Anniversary" and "Departure Date" each being
referred  to  herein as a "Delivery Date").  Such Deferral Election shall remain
in  effect  for each Subsequent Year unless changed, provided that, any Deferral
Election  with  respect  to  a  particular Year may not be changed less than six
months  prior to the beginning of such Year, and provided, further, that no more
than  one  Deferral  Election  or  change  thereof  may  be  made  in  any Year.

     Any Deferral Election and any change or revocation thereof shall be made by
delivering  written  notice  thereof  to  the Committee no later than six months
prior to the beginning of the Year in which it is to be effected; provided that,
with  respect to the Year beginning on the Effective Date, any Deferral Election
or  revocation  thereof must be delivered no later than the close of business on
the  30th  day  after  the  Effective  Date.

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     7.   Deferred  Stock Accounts.  The Company shall maintain a Deferred Stock
          ------------------------
Account  for  each  Participant  who makes a Deferral Election to which shall be
credited,  as of the applicable Payment Time, the number of shares of the Common
Stock  payable  pursuant  to  the  Stock Retainer to which the Deferral Election
relates.  So  long  as  any amounts in such Deferred Stock Account have not been
delivered  to  the  Participant  under  Paragraph  8 hereof, each Deferred Stock
Account  shall be credited as of the payment date for any dividend paid or other
distribution  made  with respect to the Common Stock, with a number of shares of
the  Common Stock equal to (a) the number of shares of the Common Stock shown in
such Deferred Stock Account on the record date for such dividend or distribution
multiplied  by  (b)  the  Dividend Equivalent for such dividend or distribution.

     8.   Delivery  of  Shares.
          --------------------

     (a)  The  shares  of  the  Common  Stock  in a Participant's Deferred Stock
Account  with  respect  to  any Stock Retainer for which a Deferral Election has
been  made (together with dividends attributable to such shares credited to such
Deferred  Stock  Account) shall be delivered in accordance with this Paragraph 8
as  soon as practicable after the applicable Delivery Date.  Except with respect
to  a  Deferral  Election  pursuant  to  Paragraph  6 hereof, or other agreement
between  the parties, such shares shall be delivered at one time; provided that,
if  the  number  of shares so delivered includes a fractional share, such number
shall  be rounded to the nearest whole number of shares.  If the Participant has
in  effect  a Deferral Election pursuant to Paragraph 6 hereof, then such shares
shall  be  delivered  in five equal annual installments (together with dividends
attributable  to  such shares credited to such Deferred Stock Account), with the
first  such installment being delivered on the first anniversary of the Delivery
Date;  provided  that,  if  in  order  to equalize such installments, fractional
shares  would  have  to  be  delivered,  such  installments shall be adjusted by
rounding  to  the  nearest  whole share.  If any such shares are to be delivered
after  the  Participant  has  died  or become legally incompetent, they shall be
delivered  to the Participant's estate or legal guardian, as the case may be, in
accordance  with  the  foregoing;  provided that, if the Participant dies with a
Deferral  Election pursuant to Paragraph 6 hereof in effect, the Committee shall
deliver  all  remaining  undelivered  shares  to  the  Participant's  estate
immediately.  References  to a Participant in this Plan shall be deemed to refer
to  the  Participant's  estate  or  legal  guardian,  where  appropriate.

     (b)  The  Company may, but shall not be required to, create a grantor trust
or  utilize  an existing grantor trust (in either case, "Trust") to assist it in
accumulating  the  shares  of the Common Stock needed to fulfill its obligations
under this Paragraph 8.  However, Participants shall have no beneficial or other
interest  in  the Trust and the assets thereof, and their rights under this Plan
shall  be  as  general  creditors of the Company, unaffected by the existence or
nonexistence  of  the  Trust,  except  that  deliveries  of  Stock  Retainers to
Participants  from  the  Trust  shall,  to  the  extent  thereof,  be treated as
satisfying  the  Company's  obligations  under  this  Paragraph  8.

     9.   Share  Certificates;  Voting  and  Other Rights.  The certificates for
          -----------------------------------------------
shares  delivered to a Participant pursuant to Paragraph 8 above shall be issued
in the name of the Participant, and from and after the date of such issuance the
Participant shall be entitled to all rights of a stockholder with respect to the
Common Stock for all such shares issued in his name, including the right to vote
the  shares,  and  the  Participant  shall  receive  all  dividends  and  other
distributions  paid  or  made  with  respect  thereto.

     10.   General  Restrictions.
           ---------------------

          (a)  Notwithstanding  any  other  provision of this Plan or agreements
made pursuant thereto, the Company shall not be required to issue or deliver any
certificate or certificates for shares of the Common Stock under this Plan prior
to  fulfillment  of  all  of  the  following  conditions:

               (i)  Listing  or  approval  for  listing  upon official notice of
issuance  of  such  shares  on  the New York Stock Exchange, Inc., or such other
securities  exchange  as  may  at  the  time  be  a market for the Common Stock;

               (ii) Any registration or other qualification of such shares under
any state or federal law or regulation, or the maintaining in effect of any such
registration  or  other qualification which the Committee shall, upon the advice
of  counsel,  deem  necessary  or  advisable;  and

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               (iii) Obtaining  any  other consent, approval, or permit from any
state  or federal governmental agency which the Committee shall, after receiving
the  advice  of  counsel,  determine  to  be  necessary  or  advisable.

          (b)  Nothing  contained  in  this  Plan shall prevent the Company from
adopting  other  or  additional  compensation arrangements for the Participants.

     11.  Shares  Available.  Subject  to Paragraph 12 below, the maximum number
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of  shares  of  the  Common  Stock  which  may in the aggregate be paid as Stock
Retainers  pursuant  to  this  Plan  is  10,000,000.  Shares of the Common Stock
issuable  under  this  Plan  may be taken from treasury shares of the Company or
purchased  on the open market.  In the event that any outstanding Stock Retainer
under  this  Plan  for any reason expires or is terminated, the shares of Common
Stock  allocable  to  the  unexercised  portion  of  the Stock Retainer shall be
available for issuance under The Jackson Rivers Company Employee Stock Incentive
Plan  for  the  Year  2004  No.  2.

     12.  Adjustments;  Change  of  Control.
          ---------------------------------

          (a)  In  the  event  that there is, at any time after the Board adopts
this  Plan,  any  change  in  corporate  capitalization,  such as a stock split,
combination  of  shares,  exchange  of  shares,  warrants  or rights offering to
purchase  the  Common  Stock  at  a  price  below  its  Fair  Market  Value,
reclassification,  or  recapitalization, or a corporate transaction, such as any
merger,  consolidation,  separation,  including  a  spin-off, stock dividend, or
other  extraordinary  distribution  of  stock  or  property  of the Company, any
reorganization  (whether  or not such reorganization comes within the definition
of  such term in Section 368 of the Code) or any partial or complete liquidation
of  the Company (each of the foregoing a "Transaction"), in each case other than
any  such  Transaction which constitutes a Change of Control (as defined below),
(i)  the  Deferred  Stock Accounts shall be credited with the amount and kind of
shares  or  other  property  which  would  have been received by a holder of the
number  of  shares  of  the Common Stock held in such Deferred Stock Account had
such  shares of the Common Stock been outstanding as of the effectiveness of any
such  Transaction,  (ii) the number and kind of shares or other property subject
to  this  Plan  shall  likewise  be  appropriately  adjusted  to  reflect  the
effectiveness  of  any  such  Transaction,  and  (iii)  the  Committee  shall
appropriately  adjust  any  other  relevant provisions of this Plan and any such
modification  by  the  Committee shall be binding and conclusive on all persons.

          (b)  If  the shares of the Common Stock credited to the Deferred Stock
Accounts  are  converted  pursuant  to  Paragraph  12(a)  into  another  form of
property,  references  in  this  Plan to the Common Stock shall be deemed, where
appropriate,  to  refer  to  such  other  form  of  property,  with  such  other
modifications as may be required for this Plan to operate in accordance with its
purposes.  Without  limiting  the  generality  of  the  foregoing, references to
delivery of certificates for shares of the Common Stock shall be deemed to refer
to delivery of cash and the incidents of ownership of any other property held in
the  Deferred  Stock  Accounts.

          (c)  In lieu of the adjustment contemplated by Paragraph 12(a), in the
event  of  a  Change  of  Control,  the following shall occur on the date of the
Change  of Control (i) the shares of the Common Stock held in each Participant's
Deferred  Stock  Account  shall be deemed to be issued and outstanding as of the
Change  of Control; (ii) the Company shall forthwith deliver to each Participant
who  has  a  Deferred Stock Account all of the shares of the Common Stock or any
other property held in such Participant's Deferred Stock Account; and (iii) this
Plan  shall  be  terminated.

          (d)  For  purposes  of  this Plan, Change of Control shall mean any of
the  following  events:

               (i)  The  acquisition  by any individual, entity or group (within
the  meaning  of  Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934,  as  amended  (the  "Exchange  Act")) (a "Person") of beneficial ownership
(within  the  meaning  of  Rule  13d-3 promulgated under the Exchange Act) of 40
percent or more of either (1) the then outstanding shares of the Common Stock of
the Company (the "Outstanding Company Common Stock"), or (2) the combined voting
power  of  then  outstanding  voting  securities of the Company entitled to vote
generally  in  the  election  of  directors  (the  "Outstanding  Company  Voting
Securities");  provided,  however,  that  the  following  acquisitions shall not
constitute  a  Change  of  Control (A) any acquisition directly from the Company
(excluding  an  acquisition  by virtue of the exercise of a conversion privilege
unless  the  security  being  so converted was itself acquired directly from the
Company),  (B)  any  acquisition  by  the  Company,  (C)  any

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acquisition  by  any  employee  benefit  plan  (or  related  trust) sponsored or
maintained  by  the  Company or any corporation controlled by the Company or (D)
any  acquisition  by  any  corporation  pursuant  to a reorganization, merger or
consolidation,  if,  following such reorganization, merger or consolidation, the
conditions  described  in  clauses  (A),  (B) and (C) of paragraph (iii) of this
Paragraph  12(d)  are  satisfied;  or

               (ii) Individuals who, as of the date hereof, constitute the Board
of  the  Company (as of the date hereof, "Incumbent Board") cease for any reason
to  constitute  at  least  a  majority of the Board; provided, however, that any
individual  becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at  least  a majority of the directors then comprising the Incumbent Board shall
be  considered  as  though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such  terms  are  used  in  Rule  14a-11 of Regulation 14A promulgated under the
Exchange  Act) or other actual or threatened solicitation of proxies or consents
by  or  on  behalf  of  a  Person  other  than  the  Board;  or

               (iii)  Approval  by  the  stockholders  of  the  Company  of  a
reorganization,  merger,  binding  share  exchange  or  consolidation,  unless,
following  such  reorganization, merger, binding share exchange or consolidation
(A)  more  than  60  percent of, respectively, then outstanding shares of common
stock  of  the  corporation  resulting from such reorganization, merger, binding
share  exchange  or  consolidation  and  the  combined  voting  power  of  then
outstanding  voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners,  respectively,  of  the Outstanding Company Common Stock and Outstanding
Company  Voting  Securities  immediately  prior  to such reorganization, merger,
binding share exchange or consolidation in substantially the same proportions as
their ownership, immediately prior to such reorganization, merger, binding share
exchange  or  consolidation,  of  the  Outstanding  Company  Common  Stock  and
Outstanding  Company  Voting  Securities,  as  the  case  may  be, (B) no Person
(excluding  the  Company,  any  employee  benefit plan (or related trust) of the
Company  or such corporation resulting from such reorganization, merger, binding
share  exchange or consolidation and any Person beneficially owning, immediately
prior  to  such reorganization, merger, binding share exchange or consolidation,
directly  or  indirectly,  20  percent or more of the Outstanding Company Common
Stock or Outstanding Company Voting Securities, as the case may be) beneficially
owns,  directly  or  indirectly,  20  percent  or  more  of,  respectively, then
outstanding  shares  of  common  stock  of  the  corporation resulting from such
reorganization,  merger, binding share exchange or consolidation or the combined
voting  power of then outstanding voting securities of such corporation entitled
to  vote  generally in the election of directors, and (C) at least a majority of
the  members  of  the  board of directors of the corporation resulting from such
reorganization,  merger, binding share exchange or consolidation were members of
the  Incumbent  Board  at  the  time  of  the execution of the initial agreement
providing  for  such  reorganization,  merger,  binding  share  exchange  or
consolidation;  or

               (iv)  Approval  by  the  stockholders  of  the  Company  of (1) a
complete  liquidation  or  dissolution  of the Company, or (2) the sale or other
disposition of all or substantially all of the assets of the Company, other than
to  a  corporation,  with  respect  to  which  following  such  sale  or  other
disposition,  (A) more than 60 percent of, respectively, then outstanding shares
of  common  stock  of  such  corporation  and  the combined voting power of then
outstanding  voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners,  respectively,  of  the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially  the same proportion as their ownership, immediately prior to such
sale  or  other  disposition,  of  the  Outstanding  Company  Common  Stock  and
Outstanding  Company  Voting  Securities,  as  the  case  may  be, (B) no Person
(excluding  the  Company and any employee benefit plan (or related trust) of the
Company  or  such  corporation  and  any Person beneficially owning, immediately
prior  to  such sale or other disposition, directly or indirectly, 20 percent or
more  of  the  Outstanding  Company  Common  Stock or Outstanding Company Voting
Securities,  as  the  case may be) beneficially owns, directly or indirectly, 20
percent  or  more  of,  respectively, then outstanding shares of common stock of
such  corporation  and  the  combined  voting  power  of then outstanding voting
securities  of  such  corporation  entitled to vote generally in the election of
directors,  and (C) at least a majority of the members of the board of directors
of  such  corporation  were  members  of  the Incumbent Board at the time of the
execution  of  the  initial  agreement or action of the Board providing for such
sale  or  other  disposition  of  assets  of  the  Company.

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     13.  Administration;  Amendment  and  Termination.
          --------------------------------------------

          (a)  This  Plan shall be administered by a committee consisting of two
members  who  shall  be the current directors of the Company or senior executive
officers or other directors who are not Participants as may be designated by the
Chief  Executive  Officer  (the "Committee"), which shall have full authority to
construe  and  interpret  this  Plan,  to establish, amend and rescind rules and
regulations  relating  to  this  Plan, and to take all such actions and make all
such  determinations  in  connection  with this Plan as it may deem necessary or
desirable.

          (b)  The  Board  may  from  time  to time make such amendments to this
Plan,  including  to  preserve or come within any exemption from liability under
Section  16(b)  of  the  Exchange  Act,  as  it  may deem proper and in the best
interest  of the Company without further approval of the Company's stockholders,
provided  that,  to  the  extent  required  under  Florida  law  or  to  qualify
transactions  under  this  Plan for exemption under Rule 16b-3 promulgated under
the  Exchange  Act,  no  amendment to this Plan shall be adopted without further
approval  of  the  Company's stockholders and, provided, further, that if and to
the  extent  required  for this Plan to comply with Rule 16b-3 promulgated under
the  Exchange Act, no amendment to this Plan shall be made more than once in any
six  month period that would change the amount, price or timing of the grants of
the  Common  Stock hereunder other than to comport with changes in the Code, the
Employee  Retirement Income Security Act of 1974, as amended, or the regulations
thereunder.  The  Board  may  terminate  this  Plan  at  any time by a vote of a
majority  of  the  members  thereof.

     14.  Restrictions  on  Transfer.  Each Stock Option granted under this Plan
          --------------------------
shall  be transferable only by will or the laws of descent and distribution.  No
interest  of  any  Employee  under  this  Plan  shall  be subject to attachment,
execution, garnishment, sequestration, the laws of bankruptcy or any other legal
or  equitable  process.  Each  Stock  Option  granted  under  this Plan shall be
exercisable  during  an  Employee's  lifetime  only  by  the  Employee or by the
Employee's  legal  representative.

     15.  Term  of  Plan.  No shares of the Common Stock shall be issued, unless
          --------------
and  until  the  Directors  of the Company have approved this Plan and all other
legal  requirements have been met.  This Plan was adopted by the Board effective
April  16,  2004,  and  shall  expire  on  April  16,  2014.

     16.  Governing  Law.  This  Plan  and all actions taken thereunder shall be
          --------------
governed by, and construed in accordance with, the laws of the State of Florida.

     17.  Information to Shareholders.  The Company shall furnish to each of its
          ---------------------------
stockholders  financial  statements  of  the  Company  at  least  annually.

     18.  Miscellaneous.
          -------------

          (a)  Nothing  in this Plan shall be deemed to create any obligation on
the  part  of the Board to nominate any Director for reelection by the Company's
stockholders  or to limit the rights of the stockholders to remove any Director.

          (b)  The  Company  shall  have  the  right  to  require,  prior to the
issuance  or  delivery  of any shares of the Common Stock pursuant to this Plan,
that  a  Participant  make  arrangements  satisfactory  to the Committee for the
withholding  of  any  taxes  required  by law to be withheld with respect to the
issuance  or  delivery  of  such  shares,  including, without limitation, by the
withholding  of  shares  that  would  otherwise  be  so  issued or delivered, by
withholding  from any other payment due to the Participant, or by a cash payment
to  the  Company  by  the  Participant.

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IN  WITNESS WHEREOF, this Plan has been executed effective as of April 16, 2004.

                                   THE JACKSON RIVERS COMPANY

                                   By /s/ Dennis Lauzon
                                      -----------------------------------
                                       Dennis Lauzon, President

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                                                                    EXHIBIT 10.1

                                 AGREEMENT AMONG

(1)  PACIFICNET STRATEGIC INVESTMENT HOLDINGS LIMITED, AND PACIFICNET INC.
(2)  GUANGZHOU YUESHEN TAIYANG TECHNOLOGY LIMITED
(3)  GUANGZHOU YUESHEN ELECTRONIC TECHNOLOGY CO., LTD
(4)  SHANGHAI CLASSIC GROUP LIMITED
(5)  AVATAR TRADING LTD
(6)  LI, YANKUAN
(7)  WU, YIWEN

                     FOR THE SALE AND PURCHASE OF SHARES IN
                         SHANGHAI CLASSIC GROUP LIMITED

THIS AGREEMENT is made on April 12, 2004.

AMONG:

(1)    PACIFICNET STRATEGIC INVESTMENT HOLDINGS LIMITED (Chinese Company Name
       "chinese characters here"), a company existing under the laws of the
       British Virgin Islands whose principal place of business is at Room 2710,
       Hong Kong Plaza, 188 Connaught Road West, Hong Kong. (hereafter referred
       as the "PURCHASER"). The Purchaser is a wholly owned subsidiary of
       PacificNet Inc. ("PACT"), a company incorporated under the laws of the
       State of Delaware in the United States of America whose principal office
       is situate at 860 Blue Gentian Road, Suite 360, Eagan, MN 55121-1575, the
       United States of America, the shares of which are listed on the NASDAQ
       stock exchange in the United States of America under the trading symbol
       of "PACT".

(2)    GUANGZHOU YUESHEN TAIYANG TECHNOLOGY LIMITED (Chinese Company Name
       "chinese characters here"), a company incorporated in Guangzhou, China
       whose principal place of business is No 602 FL6 Huagong Building 808 East
       Dongfeng Road Guangzhou Guangdong 510080, China (hereinafter referred to
       as the "COMPANY");

(3)    GUANGZHOU YUESHEN ELECTRONIC TECHNOLOGY CO., LTD (Chinese Company Name
       "chinese characters here"), a company incorporated in Guangzhou, China
       whose principal place of business is at No 602 FL6 Huagong Building 808
       East Dongfeng Road Guangzhou Guangdong 510080, China (hereinafter jointly
       referred to as the "SHAREHOLDER COMPANY");

(4)    SHANGHAI CLASSIC GROUP LIMITED, a company existing under the laws of the
       British Virgin Islands whose principal place of business is No 602 FL6
       Huagong Building 808 East Dongfeng Road Guangzhou Guangdong 510080, China
       and (hereinafter referred to as the "HOLDING COMPANY");

(5)    LI, YANKUAN AIN (PRC ID: 440112195706120967), WU, YIWEN IAOAIA (PRC ID:
       440106196412220919), and GUANGZHOU YUESHEN ELECTRONIC TECHNOLOGY CO., LTD
       (Chinese Company Name "(chinese characters here"), a company Incorporated
       in Guangzhou, China whose principal place of business is at No 602 FL6
       Huagong Building 808 East Dongfeng Road Guangzhou Guangdong 510080, China
       (hereinafter jointly referred to as the "WARRANTOR"); and

(6)    LI, YANKUAN AIN and AVATAR TRADING LTD, a company existing under the laws
       of the British Virgin Islands whOSE principal place of business is No 602
       FL6 Huagong Building 808 East Dongfeng Road Guangzhou Guangdong 510080,
       China (hereinafter jointly referred to as the "SELLER").

                                       1
<PAGE>

WHEREAS:

A.     The Company is a private company incorporated under the laws of the
       People's Republic of China whose principal place of business is No 602
       FL6 Huagong Building 808 East Dongfeng Road Guangzhou Guangdong 510080,
       China

B.     The Shareholder Company has an authorized capital of RMB 1,030,000,
       representing the entire capital of the Company (the "SHARES"), and is
       beneficially owned by shareholder as set out in Part I of Schedule 1.

C.     The Shareholder Company owns an operation that engages in the wholesale
       and retail of phone cards in China with the People's Republic of China
       Registered Trademark RenWoXing ("(Y)oss.U|ae"), the domain name
       ysrwx.com, and other liceNSEs to resell 263 and other Internet dialup
       accounts and board-band Internet accounts. (the "Business");

D.     The Holding Company owns 51% of the Company, whereas the Shareholder
       Company owns 49% of the Company. Li, YanKuan and Wu, YiWen owns 80% and
       20% of the Shareholder Company, respectively. The Seller Li, YanKuan and
       Avatar Trading Ltd owns 60% (=51/85) and 40% (=34/85) of the Holding
       Company, respectively.

E.     The Holding Company wish to sell to the Purchaser, and the Purchaser
       wishes to purchase from Holding Company, 100% of the shares of Holding
       Company (the "SALE SHARES"), and the Holding Company agrees to subscribe
       from the Company the Subscription Shares (details of which are set out in
       Part III of Schedule 1) all upon the terms and subject to the conditions
       set forth herein.

F.     The Purchaser requires the Warrantor to give such representations,
       warranties, covenants and undertakings as are set out herein as a
       condition to the Purchaser's entry into this Agreement.

            NOW, THEREFORE, in consideration of the promises and the mutual
       agreements and covenants hereinafter set forth, and intending to be
       legally bound hereby, the parties to this Agreement hereby agree as
       follows:

1.     INTERPRETATION

1.1    The Recitals and Schedules form part of this Agreement and shall have the
       same force and effect as if expressly set out in the body of this
       Agreement and any reference to this Agreement shall include the Recitals
       and Schedules.

2.2    In this Agreement except where the context otherwise requires the
       following words and expressions shall have the following meanings:

"BVI"                    The British Virgin Islands;

"COMPLETION"             completion of the sale and purchase of the Sale Shares
                         in accordance with Clause 5 of this Agreement;

"COMPLETION DATE"        April 30, 2004 on or before 6 p.m. Beijing Time (or
                         such later date as the parties shall agree in writing);

"CONDITIONS"             the conditions contained or referred to in Clause 4;

"CONSIDERATION"          the consideration payable for the sale and purchase of
                         the Sale Shares to the Holding Company pursuant to
                         Clause 3 [as adjusted by clause 6];

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

"HK$"                    Hong Kong dollars

"RMB"                    Chinese Renminbi

"PACT SHARES"            Ordinary shares of PACT;

"PRC"                    People's Republic of China;

                                       2
<PAGE>

"SALE SHARES"            the 85 ordinary shares of US$1.00 each in the capital
                         of the Holding Company being held by the Seller and
                         such shares being beneficially owned by and registered
                         in the name of the Seller in the proportions inter se
                         set out in Part III of Schedule 1;

"SUBSCRIPTION SHARES"    the 1,020,000 ordinary shares of RMB1.00 each in the
                         capital of the Company being 51% of entire issued share
                         capital of the newly registered Company to be issued to
                         the Holding Company;

 "US$"                   United States dollars;

"UNITED STATES"          United States of America;

1.3    Words and phrases (not otherwise defined in this Agreement) the
       definitions of which are contained or referred to in the Companies
       Ordinance (Cap. 32) shall be construed as having the meanings thereby
       attributed to them.

1.4    References in this Agreement to ordinances and to statutory provisions
       shall be construed as references to those ordinances or statutory
       provisions as respectively as modified (on or before the date hereof) or
       re-enacted (whether before or after the date hereof) from time to time
       and to any orders, regulations, instruments or subordinate legislation
       made under the relevant ordinances or provisions thereof and shall
       include references to any repealed ordinance or provisions thereof which
       has been so re-enacted (with or without modifications).

1.5    The headings are for convenience only and shall not affect the
       construction of this Agreement.

1.6    All representations, undertakings, warranties, indemnities, covenants,
       agreements and obligations given or entered into by more than one person
       are given or entered into jointly and severally.

1.7    Except where the context otherwise requires words denoting the singular
       include the plural and vice versa; words denoting any one gender include
       all genders; words denoting persons include incorporations and firms and
       vice versa.

1.8    Reference to clauses, sub-clauses, paragraphs and schedules are (unless
       the context requires otherwise) to clauses, sub-clauses, paragraphs and
       schedules of this Agreement.

1.9    The expressions the "Holding Company", the "Company", the "Seller" and
       the "Purchaser" shall unless the context requires otherwise shall include
       their successors, personal representatives and permitted assigns.

1.10   The schedules and appendices form part of this Agreement.

2.     SALE OF SHARES

2.1    Subject to the terms of this Agreement the Seller shall sell as
       beneficial owner and the Purchaser (relying on the representations,
       warranties, agreements, covenants, undertakings and indemnities
       hereinafter referred to) shall purchase the SALE SHARES free from all
       options, liens, charges, pledges, claims, agreements, encumbrances,
       equities and other third party rights of any nature whatsoever and
       together with all rights of any nature whatsoever now or hereafter
       attaching or accruing to it including all rights to any dividends or
       other distribution declared paid or made in respect of them after the
       date of this Agreement.

2.2    The Sale Shares shall be allotted and issued fully paid, and shall rank
       pari passu in all respects among themselves and with the Shares in issue
       on the date of allotment and issue, including the right to receive all
       dividends, distributions and other payments made or to be made the record
       date for which falls on or after the date of such allotment and issue.

                                       3
<PAGE>

3.     CONSIDERATION

3.1    The Consideration below for the Sale Shares of the Holding Company shall
       be settled in accordance with the following provisions that the Purchaser
       will pay the Seller:

       a)     USD $616,195 (approximately RMB 5,100,000 using exchange rate of
              1USD= 8.27660 RMB) in payable in PACT Shares: equivalent to
              106,240 Restricted PACT Shares (the "Escrow Shares") based on a
              valuation of $5.80 per PACT share, payable to LI, YANKUAN or her
              nominee(s) for 51 out of a total of 85 Sale Shares, in accordance
              with the following:
              o      Within 30 days of the signing of this agreement, PURCHASER
                     shall deliver to the Escrow Agent (designated by the
                     Purchaser) the Escrow Shares, to be held under the terms of
                     an escrow agreement to be entered into with the Escrow
                     Agent, being the remaining payment of the purchase
                     consideration

              In exchange, LI, YANKUAN will transfer to the Purchaser 51 out of
              a total of 85 outstanding shares of the Holding Company, and;

              b)     USD $338,303.17 (approximately RMB 2,800,000 using exchange
                     rate of 1USD= 8.27660 RMB) payable to Avatar Trading Ltd
                     for 34 out of a total of 85 Sale Shares within 30 days
                     after the Completion as defined in Clause 5 of this
                     Agreement. In exchange, Avatar Trading Ltd will transfer to
                     the Purchaser 34 out of a total of 85 outstanding shares of
                     the Holding Company, and;

              c)     USD $241,645.12 (approximately RMB 2,000,000 using exchange
                     rate of 1USD= 8.27660 RMB) payable to the Company through
                     the Holdings Company for the Subscription Shares within 30
                     days after the Completion as defined in Clause 5 of this
                     Agreement, and;

              d)     A Common Stock Purchase Warrant to purchase 50,000 shares
                     ("Warrant Shares") of PACT Common Stock, par value $0.0001
                     per share. The purchase price of one share of Common Stock
                     (the "Exercise Price") under this Warrant shall be the
                     5-Day Volume Weighted Average Price of the common stock of
                     PACT before the signing date of this Agreement, exercisable
                     within 3 years from the date of issuance.

3.2    In the event that:

       (a)    the Purchaser fails to receive any required regulatory approvals
              by the SEC, NASDAQ, or fails to receive the approval of the
              Shareholders of PACT if required; or
       (b)    the conditions set out in Clause 5 shall not have been fulfilled
              by the Completion Date or such other date as the parties hereto
              may agree in writing; or
       (c)    the transaction is not completed for any reason by April 30, 2004,
              or if the;

           the Escrow Agreement shall provide that the Escrow Shares shall be
           returned to the Purchaser within ten (10) days following the date on
           which the Purchaser rescinds this Agreement.

3.3    Escrow Arrangement for Consideration Shares

     Warrantor hereby agrees and acknowledges that the total Consideration
     payable by PACT is based on Warrantor's warranty in respect of the Net
     Income of the Company as described in this section. In this regard
     Warrantor hereby agrees to allow the Purchaser to appoint the Escrow Agent
     upon the terms of the Escrow Agreement in the agreed terms to hold all the
     Escrow Shares to be issued in accordance with the Escrow Agreement and this
     Agreement on Completion and Warrantor undertakes that it shall not either
     sell, transfer, charge, encumber, grant options over or otherwise dispose
     of, or of any legal or beneficial interest in any of the Consideration
     Shares until such part of the Consideration Shares are released by the
     Escrow Agent to Warrantor in accordance with the following schedule :

<TABLE>
<CAPTION>

      -------------------------------------------------------- ---------------- ---------------------------------
      Release Date                                             Number of        Release Criteria based on
      (If receiving funds by April 5, 2004, assuming receipt   Shares to be     Accumulated Net Income
      by PACT Auditors of certification that the auditor's     Released
      review relating to Company and its business is
      acceptable and can be consolidated into PACT's audited
      accounts, balance sheet and financial statements, in
      accordance with the US GAAP.)
      -------------------------------------------------------- ---------------- ---------------------------------
<S>   <C>
      3.3.1.  45 days after closing.                           26,560
                                                               restricted
                                                               PACT Shares
      -------------------------------------------------------- ---------------- ---------------------------------
      3.3.2. Within 30 days from the receipt of the            26,560           Company has achieved Net Income
      Auditors certification of the Net Income for the 9       restricted       for the 9 months ending on months
      ending on September 30, 2004.                            PACT Shares      September 30, 2004 not less than
                                                                                RMB 800,000.
      -------------------------------------------------------- ---------------- ---------------------------------
      3.3.3. Within 30 days from the receipt of the            26,560           Company has achieved Net Income
      Auditors certification of the Net Income for the 12      restricted       for the 12 months ending on
      months ending on December 31, 2004.                      PACT Shares      December 31, 2004 not less than
                                                                                RMB 1,300,000.
      -------------------------------------------------------- ---------------- ---------------------------------
      3.3.4. Within 30 days from the receipt of the            26,560           Company has achieved Net Income
      Auditors certification of the Net Income for the 3       restricted       for the 12 months ending on
      months ending on March 31, 2005.                         PACT Shares      December 31, 2004 plus the 3 months
                                                                                ending on March 31, 2005 not less
                                                                                than RMB 1,800,000.
      -------------------------------------------------------- ---------------- ---------------------------------
      TOTAL NUMBER of PACT Shares to be released from the      106,240          Company will be entitled to the
      Escrow                                                   restricted       entire escrow shares if it has
                                                               PACT Shares      achieved Net Income for the 12 months
                                                                                ending on December 31, 2004 plus the 3
                                                                                months ending on March 31, 2005 not
                                                                                less than RMB 1,800,000
      -------------------------------------------------------- ---------------- ---------------------------------
</TABLE>

         Purchaser agrees that on the relevant release date (as referred to in
         the above schedule) LI, YANKUAN or her nominee(s) will collect the
         relevant portion of the Escrow Shares from the Escrow Agent (if the
         Release Criteria has been met).

3.4    Net Income Warranty By Warrantor and Penalty

         3.4.1    Warrantor warrants, represents and undertakes that:
                  (i)      the total Net Income for the 12 months ending on
                           December 31, 2004 plus the 3 months ending on March
                           31, 2005 ("First Term") will not be less than RMB
                           1,800,000.
                  (ii)     the total Net Income for the 12 months ending on
                           December 31, 2004 plus the 3 months ending on March
                           31, 2005 ("First Term") will not be less than RMB
                           2,500,000, if the Company receives the short-term
                           credit-line bank facility of RMB 10,000,000 by
                           September 1, 2004.
                  (iii)    the total Net Income of COMPANY for the period from
                           April 1, 2005 to March 31, 2006 ("Second Term") will
                           not be less than RMB 3,500,000.

         3.4.2    PENALTY IN CASE OF SHORTFALL OF NET INCOME BELOW RMB 1,800,000
                  FOR THE PERIOD 12 MONTHS AFTER RECEIVING FUNDS: In the event
                  that Company produces only a portion of the annual Net Income
                  warranted by Warrantor for the 12 months after receiving
                  funds, then Seller shall return to Purchaser the number of
                  PACT shares equivalent to the dollar amount of the shortfall
                  of the Net Income divided by US$5.80 (the original per share
                  price of the PACT stock at the closing).

3.5      Purchaser will not object to the Company to apply for a short-term
         credit-line bank facility of RMB 10,000,000.

                                       5
<PAGE>

3.6    USE OF PROCEEDS: Shareholder Company will pay back RMB 3,000,000 of third
       party loan within 6 months after closing of the transaction. The
       remaining cash from Purchaser to Company will be used for general
       operation mainly to acquire calling cards in bulk from China Telecom,
       China Mobile, and China Unicom. Purchaser will appoint financial
       controller to Company.

3.7    In case of any stock split or reverse stock split by PACT, the number of
       PACT shares to be issued, awarded, or returned will be adjusted according
       to the stock split ratio.

3.8    Option Agreement for the Purchaser to Maintain 51% Ownership:

       All parties hereby agree that upon Completion, the Company and
       Shareholder Company shall immediately grant an option or warrant to the
       Purchaser to purchase additional shares at the same price and
       consideration as in Clause 3.1 of this Agreement, in order for the
       Purchaser (and subsequent Holding Company) to maintain a 51% ownership in
       the Company and Shareholder. Such option or warrant shall be immediately
       exercisable upon any dilution caused by any new issuance of shares by the
       Company and Shareholder Company for the purpose of fund raising, private
       placement, public offering, or other corporate activity.

4      CONDITIONS

4.1    Any of the obligation of Purchaser hereunder is conditional upon:

4.1.1         the Purchaser being satisfied in its sole and absolute discretion
              with the results of a legal and financial due diligence review to
              be conducted by it on the Holding Company and the Company;

4.1.2         if required, the relevant stock exchange, government and
              securities authority and regulator in the United States granting
              listing of the PACT Shares to be issued herein;

4.1.3         if required, a resolution at a meeting of the Directors of PACT
              approving this Agreement, the purchase of the Sale Shares,
              creating and giving authority for the issue of the Escrow Shares,
              the implementation of the transactions contemplated hereunder and
              all other matters incidental hereto in accordance with the
              provisions of PACT's articles of association and Bylaws and such
              rules, regulations and laws in force from time to time in the
              United States and which apply to PACT;

4.1.4         if required, the shareholders of PACT at a meeting of shareholders
              approving this Agreement, the purchase of the Sale Shares,
              creating and giving authority for the issue of the Escrow Shares,
              the implementation of the transactions contemplated hereunder and
              all other matters incidental hereto in accordance with the
              provisions of PACT's articles of association and Bylaws and such
              rules, regulations and laws in force from time to time in the
              United States and which apply to PACT;

4.1.5         all amounts outstanding to the Seller by the Holding Company and
              the Company have been either repaid to the Holding Company and the
              Company or otherwise waived; and

4.1.6         the Purchaser being satisfied that the accounts of the Holding
              Company and the Company can be consolidated into PACT's audited
              financial statement, including balance sheet and income statements
              in accordance with the US GAAP.

4.2    The Seller, the Holding Company, and the Company undertakes to disclose
       in writing to the Purchaser anything which will or may prevent any of the
       conditions from being satisfied at or prior to Completion, as applicable,
       immediately upon the Seller and/or the Holding Company and/or the Company
       becoming aware of such a situation.

4.3    From the date of this Agreement until Completion, except for the
       transactions described herein or otherwise with the prior written consent
       of the Purchaser:

         (a)      The Warrantor warrants and undertakes that they will cause the
                  Holding Company and the Company to:

                  (i)      conduct its Business in the ordinary course and
                           consistent with past practices;

                  (ii)     use its best efforts to maintain in full force and
                           effect the existence of the Holding Company and the
                           Company;

                                       6
<PAGE>

                  (iii)    promptly and timely prepare and file any financial
                           reports and franchise tax returns and pay all taxes
                           and assessments, if any, required to maintain the
                           existence of the Holding Company and the Company;

                  (iv)     keep records in which true and correct entries will
                           be made of all material transactions by and with the
                           Holding Company and the Company;

                  (v)      duly observe all material requirements of
                           governmental authorities unless contested in good
                           faith by appropriate proceedings with the consent of
                           the Purchaser;

                  (vi)     promptly pay and discharge, or cause to be paid and
                           discharged, when due and payable, all lawful taxes,
                           assessments and governmental charges or levies
                           imposed upon the income, profits, property or
                           business of the Holding Company and the Company
                           unless contested in good faith by appropriate
                           proceedings with the consent of the Purchaser;

                  (vii)    at all times comply with the provisions of all
                           contracts, agreements and leases to which the Holding
                           Company and the Company is a party, unless contested
                           in good faith by appropriate proceedings with the
                           consent of the Purchaser; and

                  (viii)   to use best endeavors to procure that the employees
                           of the Holding Company and the Company at the date of
                           this Agreement remain and continue as employees after
                           completion;

         (b)      The Warrantor warrants and undertakes to cause the Holding
                  Company and the Company not to:

                  (i)      modify its [Memorandum or Articles of Association]
                           [Bylaws];

                  (ii)     cause or permit its liquidation or dissolution;

                  (iii)    institute, or permit to be instituted against it, any
                           proceeding, which remains undismissed for a period of
                           [30] days after the filing thereof, seeking to
                           adjudicate it as bankrupt or insolvent, or seeking
                           liquidation, winding-up, reorganization, arrangement,
                           adjustment, protection, relief or composition of it
                           or its debts under any law relating to bankruptcy,
                           insolvency or reorganization or relief of debtors, or
                           seeking the entry of any order or relief or the
                           appointment of receiver, trustee or other similar
                           official for it or for any substantial part of its
                           property;

                  (iv)     make a general assignment for the benefit of its
                           creditors;

                  (v)      except as agreed in this Agreement, declare or pay
                           any dividend or make any distribution to any of its
                           shareholders;

                  (vi)     issue, redeem, sell or dispose of, or create any
                           obligation to issue, redeem, sell or dispose of, any
                           shares of its capital stock (whether authorized but
                           unissued or held in treasury);

                  (vii)    effect any stock split, reclassification or
                           combination;

                  (ix)     modify its agreements and other obligations with
                           respect to its long-term indebtedness, including but
                           not limited to its loan agreements, indentures,
                           mortgages, debentures, notes and security agreements;

4.4    Until Completion, the Warrantor, the Holding Company and the Company
       shall procure that the Purchaser, its agents and representatives are
       given reasonable access to such documents relating to the Holding Company
       and the Company, as the Purchaser shall request. The Holding Company and
       the Company will assist the Purchaser's auditor to complete the audit
       report of the Holding Company and the Company in accordance with the US
       GAAP by April 30, 2004.

4.5    The Warrantor warrants, represents and undertakes that there shall have
       been no Material Adverse Change in the assets or the business, prospects,
       financial condition or results of operations of the Holding Company and
       the Company.

4.6    The Purchaser shall be entitled to rescind this Agreement by notice in
       writing to the Seller, the Holding Company and the Company if prior to
       Completion it appears that any of the Warranties is not or was not true
       and accurate in all respects or if any act or event occurs which, had it
       occurred on or before the date of this Agreement, would have constituted
       a breach of any of the Warranties or if there is any material non
       fulfillment of any of the Warranties which (being capable of remedy) is
       not remedied prior to Completion.

                                       7
<PAGE>

5        COMPLETION

5.1    Subject to the terms of this Agreement and subject to the approval of the
       board of directors of the Purchaser, Completion shall take place pursuant
       to this clause at the offices of the Purchaser's Legal Counsel on the
       Completion Date.

5.2    Upon Completion the Seller and the Holding Company shall:

         (a)      deliver to the Purchaser:

                  (i)      duly completed and signed transfers of the Sale
                           Shares by the registered holders thereof in favor of
                           the Purchaser or as it may direct together with the
                           relative bought/sold notes and share certificates;

                  (ii)     duly completed, executed and validly issued share
                           certificates of the Sale Shares in favor of the
                           Purchaser or as it may direct;

                  (iii)    certified true copies of the minutes of meetings of
                           the Holding Company's board of directors and
                           shareholders approving the transfer, assignment and
                           allotment of the Sale Shares to the Purchaser;

                  (iv)     certified true copies of the minutes of meetings of
                           the Holding Company Shareholder's board of directors
                           and shareholders approving this Agreement and all
                           matters herein contemplated and the transfer and
                           assignment of its Sale Shares to the Purchaser.

6      REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

6.1    The Holding Company, Shareholder Company, Seller, and the Warrantor
       jointly and severally, represents, warrants and undertakes to the
       Purchaser (to the intent that the provisions of this clause shall
       continue to have full force and effect notwithstanding completion) that:

       6.1.1  each of the Warranties is true and accurate in all respects and
              not misleading at the date of this Agreement and will continue to
              be true and accurate in all respects and not misleading up to and
              including the Completion Date;

       6.1.2  the Holding Company, Shareholder Company and the Seller have and
              will have full power and authority to enter into and perform this
              Agreement and the Deed of Indemnity which constitute or when
              executed will constitute binding obligations on them in accordance
              with their respective terms;

       6.1.3  the Sale Shares will constitute 100 percent of the entire issued
              and allotted capital of the Holding Company on a fully diluted
              basis,

       6.1.4  the Holding Company owns 51 percent of the entire issued and
              allotted capital of the Company on a fully diluted basis;

       6.1.5  there have been no options, warrants, pledges, bonds or any
              instrument or agreement of the like whatsoever granted to any
              third party by any of the Seller in favor of any third party in
              respect of any shares in the Company or the Holding Company;

       6.1.6  there is and at completion will be no pledge, lien or other
              encumbrance on, over or affecting the Sale Shares and there is and
              at completion will be no agreement or arrangement to give or
              create any such encumbrance and no claim has been or will be made
              by any person to be entitled to any of the foregoing;

                                       8
<PAGE>

       6.1.7  the Seller will be entitled to transfer the full legal and
              beneficial ownership of the Sale Shares to the Purchaser on the
              terms of this Agreement without the consent of any third party;

       6.1.8  the Seller is an "accredited investor" as defined pursuant to
              Regulation D of the Securities Act of 1933, as amended. The Seller
              acknowledges that the Escrow Shares have not been registered and
              are "restricted securities";

       6.1.9  the Company listed in Part I of Schedule 2 are all the present
              subsidiaries of the Holding Company and the Shareholder Company;

       6.1.10 the information in Schedule 2 relating to the Holding Company and
              the Company is true and accurate in all respects;

       6.1.11 the Holding Company is the 51% beneficial owner the shares in the
              Company free from any encumbrance, and the Seller is the 100%
              beneficial owner the shares in the Holding Company free from any
              encumbrance;

       6.1.12 the contents of the Disclosure Letter and of all accompanying
              documents are true and accurate in all respects and fully, clearly
              and accurately disclose every matter to which they relate;

       6.1.13 each of the Holding Company and the Subsidiary are duly
              incorporated and validly existing in its relevant jurisdiction of
              incorporation;

       6.1.14 the Seller, the Company, the Shareholder Company and the Warrantor
              will transfer from Shareholder Company to the Company all assets,
              contracts, business operations, human resources, government
              licenses, trademarks, logos, and intellectual properties
              subtracting all liabilities and obligations for a consideration of
              RMB 1.

7      RESTRICTIONS

7.1    The Seller, the Company, and the Warrantor undertakes to the Purchaser
       that they shall not without the prior written consent of the Purchaser
       for a period of 2 years after Completion either solely or jointly with or
       on behalf of any other person, firm, company, trust or otherwise whether
       as director, shareholder, employee, partner, agent or otherwise:

       (a)   carry on or be engaged or interested directly or indirectly in any
             capacity (except as the owner of shares or securities listed or
             dealt in on a stock exchange in Hong Kong, PRC, and USA or
             elsewhere held by way of investment only) in any business which
             shall be in competition within Hong Kong, PRC, and USA with the
             Company or its subsidiaries in the current business of the Company;

       (b)   solicit or entice or endeavor to solicit or entice away from the
             Company or its subsidiaries any employee, officer, manager,
             consultant (including employees who are directors) of the Company
             or its subsidiaries or any persons whose services are otherwise
             made available to the Company or its subsidiaries;

       (c)   deal with, canvass, solicit or approach or cause to be dealt with,
             canvassed or solicited or approached for business in respect of any
             trade or business carried on or service provided by the Company or
             its subsidiaries any person, firm or company who at Completion or
             within two years prior to Completion was a customer, supplier,
             client, representative, agent of or in the habit of dealing under
             contract with the Company or the Subsidiaries;

7.2    The Seller, the Company, and the Warrantor further undertake to the
       Purchaser that:

       (a)   they will not at any time hereafter make use of or disclose or
             divulge to any person other than to officers or employees of the
             Company whose province it is to know the same any information
             relating to the Company or the subsidiaries other than any
             information properly available to the public or disclosed or
             divulged pursuant to an order of a court of competent jurisdiction;

       (b)   they will not at any time hereafter in relation to any trade,
             business or company use a name, or internet domain name including
             the word [or symbol, or logo design] RenWoXing ("(Y)oss.U|ae") or
             any similar word [or symBOL] in such a way as to be capable of or
             likely to be confused with the name of the Company [or any
             subsidiary] and shall use all reasonable endeavors to procure that
             no such name shall be used by any person, firm or company with
             which [it is/they are] connected;

                                       9
<PAGE>

       (c)   they will procure that its subsidiaries, holding company and any
             other affiliated companies and its employees will observe the
             restrictions contained in this Clause 7;

       (d)   they shall not do anything which might prejudice the goodwill of
             the Company or its subsidiaries.

7.3    Each and every obligation under this clause shall be treated as a
       separate obligation and shall be severally enforceable as such and in the
       event of any obligation or obligations being or becoming unenforceable in
       whole or in part such part or parts as are unenforceable shall be deleted
       from this clause and any such deletion shall not affect the
       enforceability of all such parts of this clause as remain not so deleted.

7.4    The restrictions contained in this clause 7 are considered reasonable by
       the parties but in the event that any such restriction shall be found to
       be void but would be valid if some part thereof were deleted or the area
       of operation or the period of application reduced such restriction shall
       apply with such modification as may be necessary to make it valid and
       effective.

7.5    Nothing in this Clause 7 shall apply to:

       (a)   the continuing involvement or any involvement by any of the Seller,
             the Company, and the Warrantor in any business in which he is on
             the date of this Agreement directly or indirectly interested; or

       (b)   the direct or indirect holding of any securities listed on a
             recognized stock exchange where the total voting rights exercisable
             at general meetings of the company concerned as represented by such
             holding do not exceed 10 per cent of the total voting rights
             attaching to the securities of the same class as that held by the
             Seller, the Company, and the Warrantor; or

       (c)   the holding by the Seller, the Company, and the Warrantor of any
             securities of any member of the Group; or

       (d)   the use or disclosure of any information in the public domain
             (otherwise than in consequence of any breach by any of the Seller,
             the Company, and the Warrantor of any provisions of this
             Agreement).

8      RIGHT OF FIRST REFUSAL

8.1    Before any shares in the Company may be sold or otherwise transferred or
       disposed of by any of the Shareholders of the Company ("Selling
       Shareholder", including but not limited to the Seller), the Purchaser
       shall have a right of first refusal ("Right of First Refusal") to
       purchase such shares ("Offered Securities") in accordance with Clauses
       (8.2) and (8.3) below.

8.2    Before the transfer or disposal of any Offered Securities, the Selling
       Shareholder shall deliver to the Purchaser and the Company a written
       notice ("Transfer Notice") stating :-

       (a)    the Selling Shareholder's intention to sell or otherwise dispose
              of such Offered Securities;
       (b)    the name of each proposed purchaser or other transferee (a
              "Proposed Transferee");
       (c)    the number of Offered Securities to be transferred to each
              Proposed Transferee; and
       (d)    the cash price and/or other consideration for which the Selling
              Shareholder proposes to transfer the Offered Securities to the
              Proposed Transferee ("OFFERED PRICE").

       The Transfer Notice shall certify that the Selling Shareholder has
       received a firm offer from the Proposed Transferee(s) and in good faith
       believes a binding agreement for the Disposal is obtainable on the terms
       set forth in the Transfer Notice. The Transfer Notice shall also include
       a copy of any written proposal, term sheet or letter of intent or other
       agreement relating to the proposed disposal. The Transfer Notice shall
       constitute an irrevocable offer by the Selling Shareholder to sell the
       Offered Securities to the Purchaser.

                                       10
<PAGE>

8.3    The Purchaser shall have a right, upon notice to the Selling Shareholder
       at any time within 15 calendar days after receipt of the Transfer Notice,
       to purchase all, any or a portion of such Offered Securities at (a) such
       price per share of the Offered Securities as (i) determined by an
       independent international appraiser experienced in the valuation of such
       shares and business of the Company as chosen by the Purchaser or (ii) the
       Offered Price, which ever shall be lower ("Purchaser Offer Price"); and
       (b) upon the same terms (or as similar as reasonably possible), upon
       which the Selling Shareholder is proposing or is to dispose of such
       Offered Securities, save the sale/purchase price shall be the Purchaser
       Offer Price, and the Selling Shareholder shall, upon receipt of the
       notice of purchase from the Purchaser, sell such Offered Securities to
       the Purchaser pursuant to such terms, with such closing to take place
       within 45 calendar days after delivery of the Transfer Notice ("Purchase
       Right Period").

8.4    If any of the Offered Securities proposed in the Transfer Notice to be
       transferred are not purchased by the Purchaser, then after expiry of the
       Purchase Right Period, the Selling Shareholder may sell or otherwise
       transfer or dispose of such Offered Securities which have not been
       purchased by the Purchaser at the Offered Price or at a higher price,
       provided that such sale or other transfer shall be completed and
       consummated within 45 days after the expiry of Purchase Right Period, and
       provided further that the Proposed Transferee agrees in writing that the
       provisions of this Agreement and any shareholder's agreement between the
       Purchaser and the Seller regulating their respective rights within the
       Company (if any) shall continue to apply to the Offered Securities that
       are transferred to the Proposed Transferee. If the Offered Securities
       described in the Transfer Notice are not transferred to the Proposed
       Transferee within such 45 day period, such Selling Shareholder will not
       transfer or dispose of any Offered Securities unless such securities are
       first re-offered to the Purchaser in accordance with Clauses (8.2) and
       (8.3) above.

Notwithstanding the procedures set forth above, if one Party wishes to transfer
its ownership shares to its affiliate, the other Party shall promptly give
consent to such proposed transfer and waive the right of first refusal.
"Affiliate" shall mean any company which, through ownership of voting stock or
otherwise, is controlled by, under common control with, or in control of, a
Party; "control" shall mean ownership, directly or indirectly, of more than
fifty percent (50%) of the securities having the right to vote for the election
of directors in the case of a corporation, and more than fifty percent (50%) of
the beneficial interests in the capital in the case of a business entity other
than a corporation.

9      BOARD OF DIRECTORS, OPERATION AND MANAGEMENT

9.1    The board of directors of the Company shall be the highest authority of
       the Company and shall determine all major issues of the Company.

9.2    The board of directors of the Company shall be nominated by the
       shareholders and composed of Five (5) directors, 3 directors and the
       Company Legal Representative to be nominated by Purchaser and 2 directors
       to be nominated by the Shareholder Company.

9.3    The board of directors shall meet at least once every quarter. A Board
       meeting may be called by any director.

9.4    The Company shall establish an operation and management structure to be
       responsible for the daily operation and management of the Company. The
       Company officers shall include one (1) General Manager, one (1) Vice
       General Manager, and one Chief Financial Officer.

9.5    The task of the General Manager shall be to carry out the various
       resolutions of the board of directors of the Company and organize and
       direct the daily operation and management of the Company. The operation
       and management structure may consist of certain departments, the managers
       for which shall be responsible for the work of the relevant departments,
       handle matters delegated by the General Manager and the Vice General
       Manager, and report to the General Manager and the Vice General Manager.

9.6    In the event of graft or serious dereliction of duty, the General Manager
       and the Vice General Manager may be removed and replaced by the board of
       directors of the Company with a resolution at any time.

10     INDEMNITY

The Seller and the Warrantor will indemnify and will keep indemnified and save
harmless the Purchaser (for itself and as trustee for the Holding Company from
and against any and all losses, claims, damages (including lost profits,
consequential damages, interest, penalties, fines and monetary sanctions)
liabilities and costs incurred or suffered by the Purchaser by reason of,
resulting from, in connection with, or arising in any manner whatsoever out of
the breach of any Warranties or covenants or the inaccuracy of any
representation of the Seller or the Warrantor contained or referred to in this
Agreement or in any agreement, instrument or document delivered by or on behalf
of the Seller or the Warrantor in connection therewith including, but not
limited to, any dimunition in the value of the assets of and any payment made or
required to be made by the Purchaser or the Holding Company or any Subsidiary
and any costs and expenses incurred as a result of such breach provided that the
indemnity contained in this clause 9 shall be without prejudice to any other
rights and remedies available to the Purchaser;

                                       11
<PAGE>

11     COSTS

The Purchaser shall pay for all the due diligence costs, not exceeding
HK$50,000, including auditing and valuation appraisal costs, fairness opinion
letter, legal costs, and expenses and other incidental costs and disbursements
in relation to the negotiations leading up to the purchase of the Sale Shares
and to the preparation, execution and carrying into effect of this Agreement.
The costs exceeding the amount of HK$50,000 shall be borne equally by the Seller
and the Purchaser.

12     COMPLETE AGREEMENT

This Agreement represents the entire and complete agreement between the parties
in relation to the subject matter hereof and supersedes any previous agreement
whether written or oral in relation thereto. No variations to this Agreement
shall be effective unless made or confirmed in writing and signed by all the
parties hereto.

13     SEVERABILITY

In the event that any provision of this Agreement is held to be unenforceable,
illegal or invalid by any court of competent jurisdiction, the validity,
legality or enforceability of the remaining provisions shall not be affected nor
shall any subsequent application of such provisions be affected. In lieu of any
such invalid, illegal or unenforceable provision, the parties hereto intend that
there shall be added as part of this Agreement a provision as similar in terms
to such invalid, illegal or unenforceable provision as may be possible and be
valid, legal and enforceable.

14     COUNTERPARTS

This Agreement may be executed in counterparts with the same force and effect as
if executed on a single document and all such counterparts shall constitute one
and the same instrument.

15     NOTICES

Any notice required to be given under this Agreement shall be sufficiently given
if delivered in person, forwarded by registered post or sent by overnight
international couriers or facsimile transmission to the relevant party at its
address, or fax number set out below (or such other address as the addressee has
by five days prior written notice specified to the other parties) :

           To the Purchaser  :
           Victor Tong, President
           PacificNet Strategic Investment Holdings Limited and PacificNet Inc.
           Room 2710, Hong Kong Plaza, 188 Connaught Road West, Hong Kong.
           Tel: +852-28762900
           Fax: +852-28590900

           To the Company:
           Attn:      Ms. Li, YanKuan, CEO & President
                      Guangzhou Yueshen Taiyang Technolgoy Limited
                      ("chinese characters here")
           No 602 FL6 Huagong Building 808 East Dongfeng Road Guangzhou
           Guangdong 510080, China

           To the Shareholder Company:
           Attn:      Ms. Li, YanKuan, CEO & President
                      Guangzhou Yueshen Electronic Technology Co., Ltd
                      ("chinese characters here")
           No 602 FL6 Huagong Building 808 East Dongfeng Road Guangzhou
           Guangdong 510080, China

           To the Holding Company and the Seller:
           Attn:      Ms. Li, YanKuan, Director
           Attn:      Ms. Li, YanKuan, Director, Avatar Trading Ltd
           No 602 FL6 Huagong Building 808 East Dongfeng Road Guangzhou
           Guangdong 510080, China

           To the Warrantor:
           Attn:      Ms. Li, YanKuan
                      Mr. Wu, YiWen IaOaIA
           No 602 FL6 Huagong Building 808 East Dongfeng Road Guangzhou
           Guangdong 510080, China

                                       12
<PAGE>

16     SETTLEMENT OF DISPUTES

16.1   The formation of this Agreement and its Appendices and related
       agreements, and the validity, interpretation, performance and settlement
       of disputes thereof shall be governed by the laws of the Hong Kong SAR.

16.2   Any disputes arising out of or in connection with this Agreement shall be
       resolved through friendly consultations by the Parties; if no agreement
       can be reached through consultations within thirty (30) days after the
       occurrence of such dispute, either Party shall have the right to submit
       such dispute to the International Economic and Trade Arbitration
       Commission Hong Kong Branch for arbitration in Hong Kong in accordance
       with its procedures of arbitration. The arbitral award shall be final and
       binding upon both Parties.

17     GOVERNING LAW AND JURISDICTION

This Agreement shall be governed by and construed in accordance with the laws of
Hong Kong. The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of the courts of Hong Kong.

            IN WITNESS WHEREOF, each of the Purchaser, the Holding Company, the
Company, the Seller, and the Warrantor has duly executed, or has caused to be
duly executed by their respective officers thereunto duly authorized, this
Agreement as of the date first written above.

THE PURCHASER:  PACIFICNET STRATEGIC INVESTMENT HOLDINGS LIMITED AND
                PACIFICNET INC.

                        By:          /s/ Tony Tong
                                     ------------------------------------------
                        Name:        Tony Tong
                        Title:       CEO

THE COMPANY:  GUANGZHOU YUESHEN TAIYANG TECHNOLOGY LIMITED
              ("chinese characters here")

                        By:          /s/ Li, YanKuan
                                     ------------------------------------------
                        Name:        Ms. Li, YanKuan
                        Title:       President & CEO

                        By:          /s/ Wu, YiWen
                                     ------------------------------------------
                                     ------------------------------------------
                        Name:        Mr. Wu, YiWen
                        Title:       Chairman

THE SHAREHOLDER COMPANY:  GUANGZHOU YUESHEN ELECTRONIC TECHNOLOGY CO., LTD
                          ("chinese characters here")

                        By:          /s/ Li, YanKuan
                                     ------------------------------------------
                        Name:        Ms. Li, YanKuan
                        Title:       President & CEO

                        By:          /s/ Wu, YiWen
                                     ------------------------------------------
                        Name:        Mr. Wu, YiWen
                        Title:       Chairman

                                       13
<PAGE>

THE HOLDING COMPANY (Shanghai Classic Group Limited) AND THE SELLER:

                        By:          /s/ Li, YanKuan
                                     ------------------------------------------
                        Name:        Ms. Li, YanKuan

                        By:          /s/ Li, YanKuan
                                     ------------------------------------------
                        Name:        Ms. Li, YanKuan
                                     AVATAR TRADING LTD

THE WARRANTOR:

                        By:          /s/ Li, YanKuan
                                     ------------------------------------------
                        Name:        Ms. Li, YanKuan

                        By:          /s/ Wu, YiWen
                                     ------------------------------------------
                        Name:        Mr. Wu, YiWen

       SCHEDULE 1

       PART I
       THE COMPANY SHAREHOLDERS AND SHARES

Company Name:  Guangzhou Yueshen Taiyang Technolgoy Limited
               ("chinese characters here")

Name of Shareholder (2)             Percentage of Shares held by the Shareholder
-----------------------             --------------------------------------------
Guangzhou Yueshen Electronic        49%
Technology Co., Ltd
("chinese characters here")
Shanghai Classic Group Limited      51%

       PART II
       THE SHAREHOLDER COMPANY SHAREHOLDER AND SHARES

Company Name:  Guangzhou Yueshen Electronic Technology Co., Ltd
               ("chinese characters here")

Name of Shareholder (2)             Percentage of Shares held by the Shareholder
-----------------------             --------------------------------------------
Li, YanKuan                         80%
Wu, YiWen                           20%

       PART III
       THE HOLDING COMPANY SHAREHOLDERS AND SHARES

Company Name:  SHANGHAI CLASSIC GROUP LIMITED

Name of Shareholder (2)            Number of Shares held by the Shareholder (85)
-----------------------            ---------------------------------------------
Li, YanKuan                        51
Avatar Trading Ltd                 34

                                       14
<PAGE>

                                                       Li, YanKuan
PacifcNet, Inc. ("PACT") [USA]                         Wu, YiWen
PacificNet Strategic Investment Holdings Limited           |
|                                                          |100%
| 100%                                                     |
|                                                 Guangzhou Yueshen Electronic
Shanghai Classic Group Limited [BVI]              Technology Co., Ltd.
|                                                          |
| 51%                                                      |49%
|                                                          |
Guangzhou Yueshen Taiyang Technolgoy Limited----------------

<PAGE>

                                       16

       SCHEDULE 2

       PART I
       THE COMPANY

NAME                       :    Guangzhou Yueshen Taiyang Technolgoy Limited
                                ("chinese characters here")

INCORPORATED IN            :    People's Republic of China

AUTHORIZED SHARE CAPITAL   :    2,000,000 RMB

NO. ISSUED SHARES          :    2,000,000 SHARES
NOMINAL SHARE VALUE        :    1 RMB
ISSUED SHARE CAPITAL       :    2,000,000 RMB

REGISTERED OFFICE          :    No 602 FL6 Huagong Building 808 East Dongfeng
                                Road
                                Guangzhou Guangdong 510080, China

BENEFICIAL SHAREHOLDERS    :    Guangzhou Yueshen Electronic Technology Co., Ltd
                                ("chinese characters here")
                                Shanghai Classic Group Limited

REGISTERED SHAREHOLDERS    :    Guangzhou Yueshen Electronic Technology Co., Ltd
                                ("chinese characters here")
                                Shanghai Classic Group Limited

DIRECTORS                  :    Li, YanKuan
                                Wu, YiWen

                                       16
<PAGE>

       PART II
       THE SHAREHOLDER COMPANY

NAME                       :    Guangzhou Yueshen Electronic Technology Co., Ltd
                                ("chinese characters here")

INCORPORATED IN            :    People's Republic of China

AUTHORIZED SHARE CAPITAL   :    1,030,000 RMB

NO. ISSUED SHARES          :    1,030,000 SHARES
NOMINAL SHARE VALUE        :    1 RMB
ISSUED SHARE CAPITAL       :    1,030,000 RMB

REGISTERED OFFICE          :    No 602 FL6 Huagong Building 808 East Dongfeng
                                Road
                                Guangzhou Guangdong 510080, China

BENEFICIAL SHAREHOLDERS    :    Li, YanKuan
                                Wu, YiWen

REGISTERED SHAREHOLDERS    :    Li, YanKuan
                                Wu, YiWen

DIRECTORS                  :    Li, YanKuan
                                Wu, YiWen

                                       17
<PAGE>

       PART III
       THE HOLDING COMPANY

NAME                       :    Shanghai Classic Group Limited

INCORPORATED IN            :    British Virgin Islands

AUTHORIZED SHARE CAPITAL   :    US$50,000.00

NO. ISSUED SHARES          :    85 SHARES
NOMINAL SHARE VALUE        :    US$1
ISSUED SHARE CAPITAL       :    US$85

REGISTERED OFFICE          :    Beaufort House
                                P.O. Box 438, Road Town,
                                Tortola, British Virgin Islands

BENEFICIAL SHAREHOLDERS    :    Li, YanKuan
                                Avatar Trading Ltd

REGISTERED SHAREHOLDERS    :    Li, YanKuan
                                Avatar Trading Ltd

DIRECTORS                  :    Ms. Li, YanKuan

                                       18
<PAGE>

SCHEDULE 3

                  CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

This Confidentiality and Non-Competition Agreement (the "Agreement") is made as
of this 1st day of December 2003 ("Effective Date") by and between Guangzhou
Yueshen Taiyang Technolgoy Limited ("chinese characters here") and Guangzhou
Yueshen Electronic Technology Co., Ltd ("chinese characters here")(the
"Company") and Li, YanKuan and Wu, YiWen (the "Director"). The Company and the
Director are hereinafter referred to individually as a "Party" and collectively
as the "Parties."

WHEREAS, the Director is a member of the Company's board of directors, and also
a principal shareholder of most of the related entities of the Company in China
(excluding the Company's subsidiaries) (collectively, the "Related Chinese
Entities");

WHEREAS, both the Director and the Company expressly acknowledge and agree that
the sole purpose of the Related Chinese Entities is to further the business
purposes of the Company; and

WHEREAS, in light of the Director's fiduciary relationship with the Company and
in consideration for the Director's agreement to enter into this Agreement with
the Company, the Company has assisted and will assist in the capitalization and
operation of the Related Chinese Entities.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements set forth below, the Parties agree as follows:

I. CONFIDENTIALITY

1.1 The Director shall keep secret and shall not at any time use for Director's
own or any third party's advantage, or reveal to any person, company,
organization or any other entity, and shall use the Director's best endeavors to
prevent the publication or disclosure of, any and all Confidential Information
(as defined below).
1.2 If the Director breaches his obligation of confidentiality hereunder, the
Director shall be liable to the Company for all damages (direct or
consequential) incurred as a result of the Director's breach.
1.3 The restrictions in this Article I shall not apply to any disclosure or use
authorized by the Company or required by law.
1.4 "Confidential Information" shall mean information relating to the business,
customers, products and affairs of the Company (including without limitation,
marketing information) deemed or treated confidential by the Company, or which
the Director knows or ought reasonably to have known to be confidential, and
trade secrets, including without limitation designs, processes, pricing
policies, methods, inventions, technology, technical data, financial information
and know-how relating to the business of the Company.
1.5 For purposes of Articles I and II of this Agreement, the Company shall
include all subsidiaries of the Company as well as the Related Chinese Entities.

II. NON-COMPETITION

2.l The Director agrees that he shall not engage in any business directly
competitive with that carried on by the Company, provided that nothing in this
clause shall preclude the Director from holding or being otherwise interested in
any shares or other securities of any company, any part of which is listed or
dealt in on any stock exchange or recognized securities market anywhere, and the
Director shall notify the Company in writing of his interest in such shares or
securities in a timely manner and with such details and particulars as the
Company may reasonably require.

2.2 In consideration of the Company's assistance in the capitalization and
operation of the Related Chinese Entities, the Director hereby agrees that
during the period he is a shareholder of any of the Related Chinese Entities and
for a period of two (2) years following the termination of this Agreement:
(a) Director shall not approach clients, customers, suppliers or contacts of the
Company or other persons or entities introduced to Director in Director's
capacity as a director or shareholder of the Company for the purposes of doing
business with such persons or entities and will not interfere with the business
relationship between the Company and such persons and/or entities;
(b) unless expressly consented to by the Company, Director will not provide
services as a director or otherwise for any competitor of the Company in China,
or engage, whether as principal, partner, licensor or otherwise, in any business
which is in direct or indirect competition with the business of the Company; and
(c) unless expressly consented to by the Company, Director will not seek
directly or indirectly, by the offer of alternative employment or other
inducement whatsoever, to solicit the services of any employee of the Company
employed as at the date of termination of this Agreement, or in the year
preceding such termination.

<PAGE>

2.3 The provisions provided in Article II shall be separate and severable and
enforceable independently of each other and independent of any other provision
of this Agreement. In the event that any provision of this Article II should be
found to be void under applicable laws and regulations but would be valid if
some part thereof were deleted or the period or area of application reduced,
such provisions shall apply with such modification as may be necessary to make
them valid and effective.

III. TERM.
This Agreement shall remain in full force and effect until both Parties hereto
agree to terminate it in writing.

IV. MISCELLANEOUS

4.1 Binding Effect. This Agreement will be binding upon and inure to the benefit
of any successor of the Company. Any such successor of the Company will be
deemed substituted for the Company under the terms of this Agreement for all
purposes. For this purpose, "successor" means any person, company, organization
or other entity which at any time, whether by purchase, merger or otherwise,
directly or indirectly acquires all or substantially all of the assets or
business of the Company.

4.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Hong Kong SAR without conflicts of laws principles
thereof.

4.3 Severability. In the case that any one or more of the provisions contained
in this Agreement shall be held invalid, illegal or unenforceable in any respect
under any applicable law, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.

4.4 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the Parties and supersedes all other oral and written
agreements between the Company and the Director regarding the subject matter
hereof. The Director acknowledges that he has not entered into this Agreement in
reliance upon any representation, warranty or undertaking which is not set forth
in this Agreement.

4.5 Notice. Any notice to be given under this Agreement to the Director may be
served by being handed to Director personally or by being sent by recorded
delivery first class post to Director at Director's usual or last known address;
and any notice to be given to the Company may be served by being left at or by
being sent by recorded delivery first class post to its registered office. Any
notice served by post shall be deemed to have been served on the day (excluding
Sundays and statutory holidays) next following the date of posting and in
proving such service it shall be sufficient proof that the envelope containing
the notice was properly addressed and posted as a prepaid letter by recorded
delivery first class post.

4.6 Headings. The headings in this Agreement are for the convenience of the
Parties hereto and shall not be deemed a substantive part of this Agreement.

4.7 Amendment. No amendment to the terms of this Agreement shall be valid unless
in writing and signed by both Parties hereto.

4.8 Counterparts. This Agreement may be signed in two (2) counterparts and each
counterpart shall be deemed to be an original.

IN WITNESS WHEREOF this Agreement has been executed on the date first above
written.

Guangzhou Yueshen Taiyang Technolgoy Limited ("chinese characters here")
Guangzhou Yueshen Electronic Technology Co., Ltd ("chinese characters here")

By:    /s/ Li, YanKuan                  By:    /s/ Wu, YiWen
       -----------------------------           ---------------------------------
Name:  Ms. Li, YanKuan                  Name:  Mr. Wu, YiWen
Title: President & CEO & Director       Title: Chairman

                                       20

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