Document:

Exhibit 10.1

                              EMPLOYMENT AGREEMENT
                              --------------------

         This EMPLOYMENT AGREEMENT, dated as of April 1, 2005 by and between
COACTIVE MARKETING GROUP, INC., a Delaware corporation with its principal place
of business at 75 Ninth Avenue, New York, New York 10010 ("Employer") and ERWIN
MEVORAH, an individual residing at 44 North Wyoming Avenue, South Orange, New
Jersey 07079 ("Employee").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, Employer operates a sales promotion and marketing services
business; and

         WHEREAS, Employer desires to employ Employee, and Employee desires to
enter into the employ of Employer, on the terms and conditions set forth below;

         NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements and covenants hereinafter set forth, the parties hereto agree as
follows:

         1.       Employment. Employer hereby employs Employee and Employee
hereby accepts employment by Employer for the period and on the terms and
conditions set forth in this Agreement.

         2.       Position, Employment Duties and Responsibilities. Employee
shall be employed as Employer's Senior Vice President -- Finance with the
responsibility of maintaining and reporting on Employer's accounting records and
such other responsibilities typically accorded a Vice President -- Finance and
Controller, subject to Employer's established company policies and procedures
and to such further duties and responsibilities granted and restrictions imposed
by Employer's Chief Financial Officer. Throughout the term of this Agreement,
Employee shall devote his entire working time, energy and skill and best efforts
to the performance of his duties hereunder in a manner which will faithfully and
diligently further the business and interests of Employer. Employee's direct
reporting responsibility is to the Chief Financial Officer of Employer.

         3.       Working Facilities. Employee will work out of Employer's
offices located in New York, New York.

         4.       Compensation and Benefits.
                  -------------------------

                  4.1      Salary. For all of the services rendered by Employee
to Employer, Employer shall pay to Employee an annual salary of Two Hundred and
Fifty Thousand Dollars ($250,000), payable in reasonable periodic installments
in accordance with Employer's regular payroll practices in effect from time to
time. Employee's performance will be reviewed annually and subject to such
review, Employee's salary may be adjusted as the Board of Directors of Employer
may determine in its sole discretion, but the Employee acknowledges that there
is no agreement regarding any such adjustment.

                  4.2      Bonus. Employer from time to time may pay Employee
such bonuses or other additional compensation as the Board of Directors of
Employer may determine in its sole discretion, but Employee acknowledges that
there is no agreement regarding any such additional payments.
<PAGE>

                  4.3      Employee Benefits. Employee shall be entitled to (a)
participate in and be provided with health insurance, life insurance and other
benefit plans and programs readily offered to and or made available to
Employer's employees, (b) four (4) weeks paid vacation during each year of the
employment term, with such vacation otherwise consistent with the vacation
policy of Employer and (c) observe Employee's religious holidays. Should
Employee elect to participate in Employer's provided health insurance plans,
Employer will not be required to contribute to the expense of Employee's
eligible family coverage.

                  4.4      Travel, Entertainment and Other Business Expenses.
During the period of employment pursuant to this Agreement, Employee will be
reimbursed for reasonable expenses incurred for the benefit of Employer in
accordance with the general policy of Employer. Those reimbursable expenses
shall include properly documented, authorized or otherwise reasonably required,
travel, entertainment and other business expenses incurred by Employee, other
than those expenses related to or in connection with routine commutation to and
from Employee's home.

                  4.5      Automobile Allowance.During the period of employment
pursuant to this Agreement, Employer shall provide Employee with a monthly
automobile allowance of five hundred dollars ($500).

                  4.5      Deductions. All references herein to compensation to
be paid to Employees are to the gross amounts thereof which are due hereunder.
Employer shall have the right to deduct therefrom all taxes which may be
required to be deducted or withheld under any provision of the law (including,
without limitation, social security payments, income tax withholding and any
other deduction required by law) now in effect or which may become effective at
any time during the term of this Agreement.

         5.       Term. This Agreement shall be for a term of one (1) year,
commencing on the date hereof and ending on the first anniversary of the date
hereof, provided, however, that Employer may terminate this Agreement as of
November 1, 2005 by providing Employee with not less than thirty (30) days
notice of such termination. However, in the event Employer replaces it current
Chief Financial Officer with anyone other than Employee, on the commencement
date of such replacement, this Agreement will be deemed to have been terminated
by Employer. Unless earlier terminated, subsequent to its initial one year term,
this Agreement shall automatically continue on a month to month basis unless and
until either party terminates this Agreement by providing the other party with
not less than thirty (30) days prior written notice of termination effective on
or after the first anniversary of the date hereof. In the event Employer
terminates this Agreement, Employee shall be entitled receive four (4) months
severance pay, unless such termination was pursuant to Section 7 as hereinafter
set forth.

         6.       Nondisclosure and Non-Compete.
                  -----------------------------

                  6.1      Definitions. The following words and expressions used
in this Agreement shall have the respective meanings hereby assigned to them as
follows:

                                       2
<PAGE>

                           (a)      "Affiliate" shall mean any partnership,
firm, corporation, association, trust, unincorporated organization or other
entity, that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, Employer.

                           (b)      "Business Associate(s)" shall mean and refer
to any (all) individuals, partnerships, corporations, associations or other
business enterprises in any form which have had in the past, have currently,
shall have or be attempting to develop during the Restriction Period a business
relationship with Employer or any of its Affiliates as a customer or supplier.

                           (c)      "Customer(s)" shall mean and refer to any
(all) of the past or current customers of Employer or any of its Affiliates and
shall also include those prospective customers who are actively being marketed
by Employer or any of its Affiliates during the term of this Agreement.

                           (d)      "Competitor" shall mean and refer to any
individual, partnership, corporation, association or other business enterprise
in any form, other than Employer and its Affiliates, which at any time during
the Restriction Period, either directly or indirectly, (i) engages in the
business of promotion marketing and sells to Customers in the Restriction Area
or (ii) engages in any other business directly competitive with Employer or any
of its Affiliates and sells to Customers in the Restriction Area.

                           (e)      "Confidential Information" shall mean and
refer to all information of Employer and its Affiliates which is not generally
known or available to the public or a Competitor (whether or not in written or
tangible form), the knowledge of which could benefit a Competitor, including
without limitation, all of the following types of information:

                           (i)      identities of, and information pertaining
                                    to, Customers, Personnel and Business
                                    Associates;

                           (ii)     research, projections, financial
                                    information, cost and pricing information,
                                    invoices and internal accounting statistics;

                           (iii)    product or service development plans and
                                    marketing strategies;

                           (iv)     purchasing methods; and

                           (v)      trade secrets, or other knowledge or
                                    processes of or developed by Employer or any
                                    of its Affiliate.

                           (f)      "Confidential Materials" shall mean and
refer to any and all documents, materials, programs, recordings or any other
tangible media (including, without limitation, copies or reproductions of any of
the foregoing) in which Confidential Information may be contained.

                           (g)      "Personnel" shall mean and refer to any
(all) employees, contractors, agents, brokers, consultants or other individuals
rendering services to Employer or any of its Affiliates for compensation in any
form, whether employed by or independent of Employer or any of its Affiliates.

                                       3
<PAGE>

                           (h)      "Restriction Area" shall mean and refer to
the United States.

                           (i)      "Restriction Period" shall mean and refer to
the period of time, commencing on Employee's date of employment and expiring
eighteen (18) months after, for any reason whatsoever, (i) the employment
relationship between Employee and Employer or any of its Affiliates terminates
or (ii) Employee ceases to perform services for Employer or any of its
Affiliates, whichever occurs later.

                  6.2      Covenant Not to Interfere.
                           -------------------------

                           (a)      During the Restriction Period, Employee
shall not, directly or indirectly, solicit, induce or influence, or attempt to
induce or influence, any Customer to terminate a relationship which has been
formed or is being formed with Employer or any of its Affiliates, or to reduce
the extent of, discourage the development of, or otherwise harm its relationship
with Employer or any of its Affiliates, including, without limitation, to
commence or increase its relationship with any Competitor.

                           (b)      During the Restriction Period, Employee
shall not, directly or indirectly, recruit, solicit, induce or influence, any
Personnel of Employer or any of its Affiliates to discontinue, reduce the extent
of, discourage the development of, or otherwise harm their relationship or
commitment to Employer or its Affiliates, including, without limitation, by
employing, seeking to employ or inducing or influencing a Competitor to employ
or seek to employ any Personnel of Employer or any of its Affiliates, or
inducing an employee of Employer or any of its Affiliates to leave employment by
Employer or its Affiliate, as the case may be.

                           (c)      During the Restriction Period, Employee
shall not, directly or indirectly, solicit, induce or influence, or attempt to
induce or influence, any Business Associate to discontinue, reduce the extent
of, discourage the development of, or otherwise harm its relationship with
Employer or any of its Affiliates, including, without limitation, by inducing a
Business Associate to commence, increase the extent of, develop or otherwise
enhance its relationship with any Competitor, or to refuse to do business with
Employer or any of its Affiliates.

                  6.3      Confidential Information.
                           ------------------------

                           (a)      Duty to Maintain Confidentiality. Employee
shall maintain in strict confidence and duly safeguard to the best of his
ability any and all Confidential Information. Employee covenants that Employee
will become familiar with and abide by all policies and rules issued by Employer
now or in the future dealing with Confidential Information.

                           (b)      Covenant Not to Disclose, Use or Exploit.
Employee shall not, directly or indirectly, disclose to anyone or use or
otherwise exploit for the benefit of anyone, other than Employer and its
Affiliates, any Confidential Information.

                           (c)      Confidential Materials. All Confidential
Materials are and shall remain the exclusive property of Employer. No
Confidential Materials may be copied or otherwise reproduced, removed from the
premises of Employer, or entrusted to any person or entity (other than the
Personnel entitled to such materials by authorization of Employer) without prior
written permission from Employer.

                                       4
<PAGE>

                  6.4      Employer's Property. Any and all writings,
improvements, processes, procedures and/or techniques which Employee may make,
conceive, discover or develop, either solely or jointly with any other person or
persons, at any time during the term of this Agreement, whether during working
hours or at any other time and whether at request or upon the suggestion of
Employer or any Affiliate thereof, which relate to or are useful in connection
with any business now or hereafter carried on or contemplated by Employer or any
Affiliate thereof, including developments or expansions of its present fields of
operations, shall be the sole and exclusive property of Employer. Employee shall
make full disclosure to Employer of all such writings, improvements, processes,
procedures and techniques, and shall do everything necessary or desirable to
vest the absolute title thereto in Employer. Employee shall not be entitled to
any additional or special compensation or reimbursement regarding any and all
such writings, improvements, processes, procedures and techniques.

         7.       Discharge for Cause. Employer may discharge Employee at any
time for (a) criminal conduct constituting a felony offense, (b) alcohol or drug
abuse which impairs Employee's performance of Employee's duties hereunder, (c)
incompetence, (d) insubordination, (e) willful misconduct, (f) willful violation
of any express direction or any reasonable rule or regulation established by
Employer's Board of Directors from time to time regarding the conduct of its
business, (g) misrepresentation made in this Agreement, or (h) any violation of
Employee of the terms and conditions of this Agreement. In the event that
Employer wishes to discharge Employee for incompetence, insubordination, willful
misconduct, any willful violation of any express direction or any reasonable
rule or regulation established by Employer's Board of Directors from time to
time regarding the conduct of its business, misrepresentation made in this
Agreement, or any violation of Employee of the terms and conditions of this
Agreement, Employer shall notify Employee, orally or in writing, of Employer's
intention to discharge Employee and of the time (which shall be at least 48
hours after such notice) and place when Employee may have a hearing before the
Board of Directors. Following such hearing, the Board of Directors shall advise
Employee of its determination and, if Employee is to be terminated, of the date
of Employee's termination. In the event of any termination pursuant to this
Section 7, Employer shall have no further obligations or liabilities hereunder
after the date of such discharge.

         8.       Consequences Upon Termination.
                  -----------------------------

                  8.1      Payment of Compensation Owed. Upon the termination of
Employee's employment and this Agreement for any reason whatsoever, Employer
shall promptly pay to Employee all compensation owed to Employee up until the
date of termination.

                  8.2      Return of Property. Upon the termination of
Employee's employment and this Agreement for any reason whatsoever, Employee
shall promptly return to Employer all Confidential Materials in his possession
or within Employee's control, all keys, credit cards, business card files and
other property belonging to Employer.

                  8.3      Performance of Services. After the termination of
Employee's employment and for the remaining duration of the Restriction Period,
Employee shall notify Employer of the name and address of all persons for whom
Employee performs services for compensation and the nature of such services,
whether performed by Employee as a proprietor, partner, shareholder, investor,
manager, director, officer, employee, venturer, representative, agent, broker,
independent contractor, consultant or otherwise.

                                       5
<PAGE>

         9.       Remedies.
                  --------

                  9.1      Equitable Relief. The parties acknowledge that the
provisions and restrictions of this Agreement, including without limitation the
restrictions contained in Article 6 hereof, are reasonable and necessary for the
protection of the legitimate interests of Employer and Employee. The parties
further acknowledge that the provisions and restrictions of this Agreement are
unique, and that any breach or threatened breach of any of these provisions or
restrictions by Employee will provide Employer with no adequate remedy at law,
and the result will be irreparable harm to Employer. Therefore, the parties
agree that upon a breach or threatened breach of the provisions or restrictions
hereof by Employee, Employer shall be entitled, in addition to any other
remedies which may be available to it, to institute and maintain proceedings at
law or in equity, to recover damages, obtain specific performance or a temporary
or permanent injunction, without the necessity of establishing the likelihood of
irreparable injury or proving damages and without being required to post bond or
other security.

                  9.2      Modification of Restrictions; Full Restriction
Period. If the Restriction Period, the Restriction Area or the scope of activity
restricted in Article 6 should be adjudged unreasonable in any proceeding, then
the Restriction Period shall be reduced by such number of months, the
Restriction Area shall be reduced by the elimination of such portion thereof or
the scope of the restricted activity shall be modified, or any or all of the
foregoing, so that such restrictions may be enforced in such area and for such
time as is adjudged to be reasonable. If Employee violates any of the
restrictions contained in Article 6, the Restriction Period shall not run in
favor of Employee from the time of commencement of any such violation until such
time as such violation shall be cured by Employee to the satisfaction of
Employer.

                  9.3      Arbitration. Except for the provisions of Sections
9.1 and 9.2 above, any controversy, dispute, or difference arising out of or
relative to this Agreement or the breach thereof shall first be submitted to
settlement by arbitration in New York, New York in accordance with the rules
which are then in effect of the American Arbitration Association, provided that
persons eligible to be selected as arbitrators shall be limited to
attorneys-at-law. A demand for arbitration under this provision shall be made in
writing to the other party within sixty (60) days of the date the party
demanding arbitration knew or should have known of the event giving rise to the
claim, but in no event more than two (2) years after the event giving rise to
the claim, or the claim shall be forever barred. The parties agree that judgment
upon any award rendered may be entered in any court having jurisdiction thereof
as an enforceable judgment or decree.

         10.      Consideration for Restrictive Covenants. Employee acknowledges
that the execution of this Agreement and compliance with it by Employer shall
constitute fair and adequate consideration for Employee's compliance with the
restrictive covenants contained in the respective sections of this Agreement.

         11.      Miscellaneous.
                  -------------

                  11.1     Governing Law. This Agreement, its interpretation,
performance and enforcement, and the rights and remedies of the parties hereto,
shall be governed and construed by the laws of the State of New York applicable
to contracts to be performed wholly within New York, without regard to
principles of conflicts of laws and without the aid of any canon, custom or rule
of law requiring construction against the drafter.

                                       6
<PAGE>

                  11.2     Waiver. A waiver by any party of any condition or the
breach of any term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
not be deemed or construed as a further or continuing waiver of any such
condition or the breach of any other term, covenant, representation, or warranty
set forth in this Agreement.

                  11.3     Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior agreements and contemporaneous understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.

                  11.4     Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by cable, by telecopy, by telegram, by telex or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this Section
11.5):

                           (a)      if to Employer:

                           CoActive Marketing Group, Inc.
                           75 Ninth Avenue
                           New York, New York 10011
                           Telecopy:  (212) 660-3860
                           Attention: Chief Executive Officer

                           with a copy to:

                           CoActive Marketing Group, Inc.
                           75 Ninth Avenue
                           New York, New York 11011
                           Telecopy:  (516) 622-2888
                           Attention: Donald A. Bernard
                                      Executive Vice President

                           (b)      if to Employee:

                           Erwin Mevorah
                           44 North Wyoming Avenue
                           South Orange, New Jersey 07079

                  11.6     Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.

                                       7
<PAGE>

                  11.7     Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

                  11.8     Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.

                  11.9     Amendment or Termination. No agreement shall be
effective to change, modify, waive, release, amend, terminate, discharge or
effect an abandonment of this Agreement, in whole or in part, unless such
agreement is in writing, refers expressly to this Agreement and is signed by the
party against whom enforcement of the change, modification, waiver, release,
amendment, termination, discharge or effectuation of the abandonment is sought.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.

                                       COACTIVE MARKETING GROUP, INC.

                                       By: /s/ DONALD A. BERNARD
                                           -------------------------------------
                                           Donald A. Bernard
                                           Executive Vice President,
                                           Chief Financial Officer
                                           and Secretary

                                           /s/ ERWIN MEVORAH
                                           -------------------------------------
                                           Erwin Mevorah

                                       8Purchase Agreement

    
      Exhibit
        10.1

      

      DATE:
        27 SEPTEMBER 2005

      

      

      GLORY
        GOAL INVESTMENTS LIMITED 

      (as
        Vendor)

      

      AND
        

      

      GLOBAL
        INNOVATIVE SYSTEMS INC.

      (as
        Purchaser)

      

      AND

      

      KO
        YIN

      (as
        Guarantor)

       

      
        
          

        

      

      

      SALE
        AND PURCHASE AGREEMENT 

      FOR
        

      325
        SHARES OF HK$1 EACH IN

      BEIJING
        ILLUMINATION (HONG KONG) LIMITED

      

      
        
          

        

       

       

       

      
 

      

      
        
          

        

      

      

      
        	
                

              

      

      
         

        35th
          Floor, Two International Finance Centre,

        8
          Finance Street,

        Central,
          Hong Kong

         

        Tel:
          (852) 2511 5100 Fax: (852) 2511 9515

        Website:
          www.prestongates.com

         

        Our
          ref: 53520-00001/NKA/CWF

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      I
        N D E X

       

      

        
          	
                  Clause
                    No.

                	
                  Heading

                	
                  Page
                    No.

                
	 	 	 
	
                  1.
                    

                	
                  INTERPRETATION
                    

                	
                  1

                
	
                  2.
                    

                	
                  SALE
                    AND PURCHASE OF THE SALE SHARES 4

                	 
	
                  3.
                    

                	
                  CONDITIONS
                    

                	
                  4

                
	
                  4.
                    

                	
                  CONSIDERATION
                    

                	
                  5

                
	
                  5.
                    

                	
                  COMPLETION
                    

                	
                  5

                
	
                  6.
                    

                	
                  VENDOR
                    WARRANTIES AND INDEMNITIES 

                	
                  8

                
	
                  7.
                    

                	
                  FURTHER
                    UNDERTAKINGS 

                	
                  10

                
	
                  8.
                    

                	
                  PURCHASER
                    WARRANTIES 

                	
                  10

                
	
                  9.
                    

                	
                  PROFIT
                    GUARANTEE 

                	
                  12

                
	
                  10.
                    

                	
                  CONDUCT
                    OF BUSINESS PENDING COMPLETION 

                	
                  12

                
	
                  11.
                    

                	
                  ACCESS
                    TO INFORMATION 

                	
                  14

                
	
                  12.
                    

                	
                  FURTHER
                    ASSURANCE 

                	
                  14

                
	
                  13.
                    

                	
                  GUARANTEE
                    AND OPTION TO ACQUIRE FURTHER SHARES 

                	
                  15

                
	
                  14.
                    

                	
                  CONFIDENTIALITY
                    AND ANNOUNCEMENTS 

                	
                  15

                
	
                  15.
                    

                	
                  TIME
                    AND WAIVER 

                	
                  16

                
	
                  16.
                    

                	
                  INVALIDITY
                    

                	
                  16

                
	
                  17.
                    

                	
                  AMENDMENTS
                    

                	
                  16

                
	
                  18.
                    

                	
                  NOTICES
                    

                	
                  16

                
	
                  19.
                    

                	
                  ASSIGNMENT
                    

                	
                  18

                
	
                  20.
                    

                	
                  ENTIRE
                    AGREEMENT 

                	
                  18

                
	
                  21.
                    

                	
                  COSTS
                    AND STAMP DUTY 

                	
                  18

                
	
                  22.
                    

                	
                  COUNTERPART
                    

                	
                  18

                
	
                  23.
                    

                	
                  LEGAL
                    REPRESENTATION 

                	
                  18

                
	
                  24.
                    

                	
                  GOVERNING
                    LAW, JURISDICTION AND PROCESS AGENTS 

                	
                  18

                
	 	 	
                   

                
	
                  Schedule

                	 	 
	 	 	 
	
                  1
                    

                	
                  DETAILS
                    OF THE COMPANY 

                	
                  20

                
	
                  2
                    

                	
                  DETAILS
                    OF THE SUBSIDIARIES 

                	
                  21

                
	
                  3
                    

                	
                  VENDOR
                    WARRANTIES 

                	
                  22

                
	
                  4
                    

                	
                  PURCHASER
                    WARRANTIES 

                	
                  33

                
	
                  5
                    

                	
                  OPTION
                    DEED 

                	
                  34

                
	 	 	 
	
                  EXECUTION
                    

                	
                   

                	
                  35

                

        

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      THIS
        AGREEMENT is dated 27 September 2005

      

      BETWEEN:

      

      
        	(1)	
                GLORY
                  GOAL INVESTMENTS LIMITED,
                  a
                  company incorporated in the British Virgin Islands and having its
                  registered office at P.O. Box 957, Offshore Incorporations Centre,
                  Road
                  Town, Tortola, British Virgin Islands (the “Vendor”);

              

      

      

      
        	(2)	
                GLOBAL
                  INNOVATIVE SYSTEMS INC.,
                  a
                  company incorporated under the laws of the State of Nevada, the
                  United
                  States and having its correspondence office at 16/F., Hang Seng
                  Mongkok
                  Building, 677 Nathan Road, Mongkok, Kowloon, Hong Kong, the common
                  shares
                  of which are quoted on OTCBB (as defined below) (the “Purchaser”);
                  and

              

      

      

      
        	(3)	
                KO
                  YIN
                  (holder of Hong Kong Permanent Identity Card No. P330688 (0)) and
                  whose
                  correspondence address is at House No. 5, Mantex Villa, Hang Lok
                  Lane,
                  Tung Lo Wan Hill, Tai Wai, New Territories, Hong Kong (the “Guarantor”).

              

      

      

      WHEREAS:

      

      
        	(A)	
                Beijing
                  Illumination (Hong Kong) Limited (the “Company”)
                  is a company incorporated in Hong Kong with limited liability and
                  has an
                  authorised share capital of HK$10,000 divided into 10,000 shares
                  (the
                  “Shares”)
                  of HK$1.00 each, of which 1,250 Shares have been issued and allotted
                  and
                  are fully paid. Further details of the Company are set out in Schedule
                  1.

              

      

      

      
        	(B)	
                As
                  at the date of this Agreement, the Vendor is the legal and beneficial
                  owner of the Sale Shares,
                  which shall be equivalent to 26% of the issued share capital of
                  the
                  Company upon Completion.
                  The
                  Guarantor is the ultimate beneficial owner of 100% of the issued
                  share
                  capital of the Vendor.

              

      

      

      
        	(C)	
                The
                  Vendor has agreed to sell and the Purchaser has agreed to purchase
                  the
                  Sale Shares subject to and upon the terms and conditions of this
                  Agreement.

              

      

      

      
        	(D)	
                In
                  consideration of the Purchaser agreeing to enter into this Agreement,
                  the
                  Guarantor has agreed to guarantee, among other matters, the due
                  and
                  punctual performance by the Vendor of its obligations under this
                  Agreement
                  subject to and upon the terms and conditions of this
                  Agreement.

              

      

      

      NOW
        IT IS HEREBY AGREED AS FOLLOWS:

      

      
        	
                1.

              	
                INTERPRETATION

              

      

      

      1.1 In
        this
        Agreement (including the Recitals and Schedules), unless the context otherwise
        requires or permits, the following words and expressions shall have the meanings
        ascribed to each of them respectively below:

       

      
        
          	 	
                  “Business
                    Day”

                	 	
                  a
                    day (other than Saturday and days on which a tropical cyclone
                    warning No.
                    8 or above or a “black
                    rainstorm warning signal”
                    is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00
                    p.m.) on
                    which banks are open in Hong Kong and for general banking
                    business;

                
	 	 	 	 
	 	
                  “Completion”

                	 	
                  completion
                    of the sale and purchase of the Sale Shares in accordance with
                    the terms
                    and conditions of this Agreement;

                

        

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

        
          
            	 	 	 	 
	 	
                    “Completion
                      Date”

                  	 	
                    5
                      October 2005 or such other date as the Vendor and the Purchaser
                      may agree
                      in writing prior to Completion and where the context otherwise
                      requires,
                      the date on which Completion takes place;

                  
	 	 	 	 
	 	
                    “Consideration
                      Shares”

                  	 	
                    1,750,000
                      new common shares of US$0.0001 each in the share capital of
                      the Purchaser
                      to be issued and allotted to the Vendor for part settlement
                      of the
                      consideration of the sale of the Sale Shares pursuant to Clause
                      4.1(2);

                  
	 	 	 	 
	 	
                    “Disclosed”

                  	 	
                    disclosed
                      in a full, fair, specific and accurate manner in this Agreement
                      and the
                      Management Accounts;

                  
	 	 	 	 
	 	
                    “Encumbrance”

                  	 	
                    any
                      mortgage, charge, pledge, lien (otherwise than arising by statute
                      or
                      operation of law), hypothecation or other encumbrance, priority
                      or
                      security interest, deferred purchase, title retention, leasing,
                      sale-and-repurchase or sale-and-leaseback arrangement whatsoever
                      over or
                      in any property, assets or rights of whatsoever nature and
                      includes any
                      agreement for any of the same and “Encumber”
                      shall be construed accordingly;

                  
	 	 	 	 
	 	
                    “Group”

                  	 	
                    the
                      Company and its subsidiaries and “member
                      of the Group”
                      shall be construed accordingly;

                  
	 	 	 	 
	 	
                    “HK$”

                  	 	
                    Hong
                      Kong dollars;

                  
	 	 	 	 
	 	
                    “Hong
                      Kong”

                  	 	
                    the
                      Hong Kong Special Administrative Region of the PRC;

                  
	 	 	 	 
	 	
                    “Independent
                      Accountants”

                  	 	
                    an
                      independent firm of accountants which is acceptable to the
                      Purchaser,
                      appointed by the Vendor for the purpose of reviewing the Management
                      Accounts;

                  
	 	 	 	 
	 	
                    “Key
                      Employee”

                  	 	
                    each
                      of the Guarantor, Li Yang and Lam So Ying;

                  
	 	 	 	 
	 	
                    “Management
                      Accounts”

                  	 	
                    the
                      unaudited consolidated balance sheet of the Group as at the
                      Management
                      Accounts Date and the unaudited consolidated profit and loss
                      accounts of
                      the Group for the period commenced from 1 January 2005 and
                      ended the
                      Management Accounts Date including the directors’ report thereon (if any)
                      and the notes thereto reviewed by the Independent Accountants,
                      copies of
                      all of which are annexed hereto and initialed by the parties
                      hereto for
                      the purpose of identification;

                  
	 	 	 	 
	 	
                    “Management
                      Accounts Date”

                  	 	
                    30
                      September 2005;

                  
	 	 	 	 
	 	
                    “Option
                      Deed”

                  	 	
                    the
                      deed of option to be made between the Guarantor, Admire Fame
                      Invests
                      Limited, Gain Huge Investments Limited, Splendid Fortune Investments
                      Limited and the Purchaser, in substantially the form as set
                      out in
                      Schedule 5;

                  

          

           

          
            
              
              

            

            
              2

              
                

              

            

            
              
              

            

          

          
            	 	 	 	 
	 	
                    “OTCBB”

                  	 	
                    acronym
                      for The OTC Bulletin Board, an electronic quotation system
                      that displays
                      real-time quotes, last-sale prices, and volume information
                      over-the-counter securities that are not listed on The Nasdaq
                      Stock Market
                      or a national securities exchange in the US;

                  
	 	 	 	 
	 	
                    “PRC”

                  	 	
                    the
                      People’s Republic of China;

                  
	 	 	 	 
	 	
                    “Purchaser
                      Warranties”

                  	 	
                    representations,
                      undertakings and warranties set out in Clause 8 and Schedule
                      4;

                  
	 	 	 	 
	 	
                    “Sale
                      Shares”

                  	 	
                    325
                      Shares, which shall be equivalent to 26% of the issued share
                      capital of
                      the Company upon Completion, to be sold by the Vendor to the
                      Purchaser
                      pursuant to this Agreement;

                  
	 	 	 	 
	 	
                    “Service
                      Agreement”

                  	 	
                    the
                      service agreement between each of the Key Employees and the
                      Company, in
                      the form and substance acceptable to the Purchaser;

                  
	 	 	 	 
	 	
                    “Taxation”

                  	 	
                    all
                      forms of taxation including overseas taxation and all forms
                      of profits
                      tax, interest tax, estate duty and stamp duty and all levies,
                      imposts,
                      duties, charges, fees, deductions and withholdings whatsoever
                      charged or
                      imposed by any statutory, governmental state, provincial, local
                      government
                      or municipal authority whatsoever and the expression “Tax”
                      shall be construed accordingly;

                  
	 	 	 	 
	 	
                    “this
                      Agreement”

                  	 	
                    this
                      agreement for the sale and purchase of the Sale Shares, as
                      amended from
                      time to time;

                  
	 	 	 	 
	 	
                    “Vendor Warranties”

                  	 	
                    representations,
                      undertakings and warranties set out in Clause 6 and Schedule
                      3;

                  
	 	 	 	 
	 	
                    “US”

                  	 	
                    the
                      United States of America; and

                  
	 	 	 	 
	 	
                    “US$”

                  	 	
                    United
                      States of America
                      dollars.

                  

          

        

      

      

      
        	1.2	
                The
                  headings of this Agreement are inserted for convenience only and
                  shall be
                  ignored in construing this Agreement. Unless the context otherwise
                  requires, references in this Agreement to the singular shall be
                  deemed to
                  include references to the plural and vice versa; and references
                  to one
                  gender shall include all genders and references to any person shall
                  include an individual, firm, body corporate or
                  unincorporate.

              

      

      

      
        	1.3	
                References
                  to any statute or statutory provision shall include any statute
                  or
                  statutory provision which amends or replaces or has amended or
                  replaced it
                  and shall include any subordinate legislation made under the relevant
                  statute.

              

      

      

      
        	
                1.4

              	
                References
                  in this Agreement to Clauses and Schedules are references to clauses
                  of
                  and schedules to this Agreement.

              

      

      

      
        	1.5	
                The
                  Schedules and Recitals shall form part of this
                  Agreement.

              

      

      

      
        	1.6	
                Reference
                  to
                  a “subsidiary”
                  shall be construed in accordance with section 2 of the Companies
                  Ordinance
                  (Chapter 32 of Laws of Hong Kong).

              

      

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      
        	
                2.

              	
                SALE
                  AND PURCHASE OF THE SALE
                  SHARES

              

      

      

      
        	2.1	
                Subject
                  to and upon the terms and conditions of this Agreement, the Vendor
                  shall
                  as legal and beneficial owner sell and the Purchaser shall purchase,
                  the
                  Sale Shares free from all Encumbrances together with all rights
                  now and
                  hereafter attaching thereto including but not limited to the right
                  to all
                  dividends and other distribution which may be paid, declared or
                  made in
                  respect thereof at any time on or after the date of this
                  Agreement.

              

      

      

      
        	2.2	
                The
                  Vendor represents and warrants that there are no pre-emption rights
                  and
                  any other restrictions on the transfer
                  in
                  relation to the Sale Shares, whether conferred by the memorandum
                  and articles of association of the Company or
                  otherwise.

              

      

      

      
        	2.3	
                The
                  Purchaser shall not be obliged to (but may) complete the purchase
                  of any
                  of the Sale Shares unless the sale and purchase of all the Sale
                  Shares is
                  completed simultaneously in accordance with this
                  Agreement.

              

      

      

      
        	
                3.

              	
                CONDITIONS

              

      

      

      
        	3.1	
                Completion
                  is conditional upon:

              

      

      

      
        	
              	(1)	
                the
                  Purchaser having received from firm(s) of lawyers qualified to
                  practise
                  laws in Hong Kong or the
                  PRC acceptable
                  to and as required by the Purchaser, legal opinion(s) confirming,
                  inter alia, (i)
                  relevant members of the Group in Hong
                  Kong or the
                  PRC are legally established and continued effectively; (ii) the
                  Company’s
                  title in the equity interest, direct or indirect, in such members
                  of the
                  Group is valid and legally enforceable; and (iii) members of the
                  Group
                  have obtained all necessary approvals and licenses for their then
                  existing
                  operation and businesses;

              

      

      

      
        	
              	(2)	
                the
                  Vendor and the Guarantor having received from a firm of lawyers
                  qualified
                  to practise laws in the State of Nevada, the US acceptable to the
                  Vendor
                  and the Guarantor, a legal opinion confirming, inter alia, (i)
                  the
                  Purchaser is a corporation duly organized, validly existing and
                  in good
                  standing under the laws of the State of Nevada, the US, and that
                  it has
                  the corporate power and authority to execute, deliver and perform
                  this
                  Agreement, (ii) the Consideration Shares to be issued to the Vendor
                  pursuant to the terms of this Agreement have been duly authorised
                  and
                  validly issued and are fully paid and non-assessable; and (iii)
                  the issue
                  of the Consideration Shares contemplated herein does not violate
                  any
                  federal or state law of the US or require the registration of the
                  Consideration Shares pursuant to any federal or state law of the
                  US
                  dealing with the issue, sale, transfer, and/or exchange of
                  securities;

              

      

      

      
        	
              	(3)	
                the
                  Purchaser having received all of the regulatory, stockholder and
                  other
                  third party approvals and authorizations necessary to consummate
                  the
                  transactions contemplated
                  hereunder;

              

      

      

      
        	
              	(4)	
                no
                  event having occurred which suggests that there has been a breach
                  of any
                  of the Vendor Warranties that is material in the context of the
                  sale and
                  purchase of the Sale Shares; 

              

      

      

      
        	
              	(5)	
                no
                  event having occurred which suggests that there has been a breach
                  of any
                  of the Purchaser Warranties that is material in the context of
                  the
                  Vendor’s acceptance of the Consideration Shares in part satisfaction of
                  the purchase price of the Sale
                  Shares;

              

      

      

      
        	
              	(6)	
                the
                  Purchaser being satisfied with the results of the review of the
                  Management
                  Accounts conducted by the Independent Accountants;

              

      

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      
        	
              	(7)	
                the
                  listing of the issued shares of the Purchaser on OTCBB not being
                  revoked
                  or withdrawn, or, if applicable, suspended for more than ten (10)
                  consecutive Business Days (excluding any suspension pending the
                  clearance
                  or issue of the announcement or circular of the Purchaser in relation
                  to
                  the transactions contemplated under this Agreement);
                  and

              

      

      

      
        	
              	(8)	
                all
                  necessary approvals, consents, authorisations and licences in relation
                  to
                  the transactions contemplated under this Agreement having been
                  obtained.

              

      

      

      
        	
                3.2

              	
                The
                  Vendor and the Guarantor may at any time waive in writing any of
                  the
                  conditions set out in Clauses 3.1(2), (5), (7) and (8) on such
                  terms as
                  they may in their absolute discretion consider appropriate. The
                  Purchaser
                  may at any time waive in writing any of the conditions set out
                  in Clauses
                  3.1(1), (3), (4), (6) and (8) on such terms as it may in its absolute
                  discretion consider appropriate. If any of the conditions set out
                  in
                  Clause 3.1 has not been fulfilled (or, as the case may be, waived)
                  on or
                  before 12:00 noon on 31 October 2005 or such other date as the
                  Purchaser
                  and the Vendor may otherwise agree, this Agreement shall lapse
                  and
                  determine (save and except Clauses 14, 17, 20, 21 and 24 which
                  shall
                  continue to have full force and effect) and none of the parties
                  hereto
                  shall have any obligations and liabilities hereunder save for any
                  antecedent breaches of the terms
                  hereof.

              

      

      

      
        	3.3	
                The
                  Vendor shall as soon as reasonably practicable give notice to the
                  Purchaser of the fulfillment or waiver of the conditions specified
                  in
                  Clauses 3.1(1), (3), (4), (6) and (8). The Purchaser shall as soon
                  as
                  reasonably practicable give notice to the Vendor of the fulfillment
                  or
                  waiver of the conditions specified in Clauses 3.1(2), (5), (7)
                  and (8).
                  Each of the Vendor and the Purchaser shall provide such documents
                  as the
                  other party may require evidencing the fulfillment of such
                  conditions.

              

      

      

      
        	
                4.

              	
                CONSIDERATION

              

      

      

      
        	4.1	
                The
                  consideration for the sale and purchase of the Sale Shares shall
                  be an
                  aggregate amount of HK$30,000,000 which shall be satisfied by the
                  Purchaser in the following manner:

              

      

      

      
        	
              	(1)	
                as
                  to HK$15,000,000 in cash to be satisfied on the Completion Date;
                  and

              

      

      

      
        	
              	(2)	
                as
                  to the balance of HK$15,000,000 to be fully satisfied on Completion
                  by the
                  issue and allotment of the Consideration Shares by the Purchaser
                  to the
                  Vendor credited as fully paid at the agreed valuation of US$1.10
                  per
                  Consideration Share.

              

      

      

      
        	4.2	
                The
                  Consideration Shares to be issued and allotted to the Vendor as
                  part
                  consideration for the Sale Shares pursuant to Clause 4.1(2) shall
                  rank
                  pari passu among themselves and with all other common shares of
                  the
                  Purchaser then in issue.

              

      

      

      
        	
                5.

              	
                COMPLETION

              

      

      

      
        	5.1	
                Upon
                  compliance with or fulfillment of all the conditions set out in
                  Clause
                  3.1, Completion shall take place at the offices of Preston Gates
&
                  Ellis, legal advisers to the Vendor and the Guarantor at 35th Floor,
                  Two
                  International Finance Centre, 8 Finance Street, Central, Hong Kong
                  or such
                  other place as the parties shall determine at 4:00 p.m. on the
                  Completion
                  Date when all the acts and requirements set out in this Clause
                  5 shall be
                  complied with (except that any of such acts and requirements may
                  be waived
                  by the party not in default of its obligations hereunder, PROVIDED
                  THAT
                  such waiver shall not prejudice any of the rights which it or any
                  other
                  party may have under this
                  Agreement).

              

      

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      
        	
                5.2

              	
                At
                  Completion, the Vendor and/or the Guarantor shall deliver or procure
                  the
                  delivery to the Purchaser of all the
                  following:

              

      

      

      
        	
              	(1)	
                copy,
                  certified by a director of the Company as true and complete, of
                  the
                  resolutions in such form to the satisfaction of the Purchaser passed
                  by
                  the directors of the Company approving the following
                  matters:

              

      

      

      
        	
              	(i)	
                transfer
                  of the Sale Shares to the Purchaser (or its nominee(s)) and the
                  registration of such transfer subject to the relevant instrument
                  of
                  transfer being duly presented for
                  registration;

              

      

      

      
        	
              	(ii)	
                the
                  appointment of one (1) nominee of the Purchaser as director of
                  the Company
                  with effect from the Completion
                  Date;

              

      

      

      
        	
              	(2)	
                copy,
                  certified by a director of the Vendor as true and complete, of
                  the
                  resolutions in such form to the satisfaction of the Purchaser passed
                  by
                  the directors of the Vendor approving the following
                  matters:

              

      

      

      
        	
              	(i)	
                the
                  sale of the Sale Shares to the
                  Purchaser;

              

      

      

      
        	
              	(ii)	
                the
                  entering into by the Vendor of this Agreement and authorizing any
                  one
                  director thereof to execute the same on its
                  behalf.

              

      

      

      
        	
              	(3)	
                valid
                  share certificate(s) in respect of the Sale
                  Shares;

              

      

      

      
        	
              	(4)	
                duly
                  executed instrument(s) of transfer of the Sale Shares in favour
                  of the
                  Purchaser (or its nominee(s));

              

      

      

      
        	
              	(5)	
                duly
                  executed sold note(s) for the Sale Shares by the beneficial owner
                  thereof;

              

      

      

      
        	
              	(6)	
                an
                  application, in such form as the Purchaser may reasonably prescribe,
                  for
                  the number of the Consideration Shares to be issued and allotted
                  to the
                  Vendor (or its nominee(s));

              

      

      

      
        	
              	(7)	
                such
                  other documents as may be required to give to the Purchaser good
                  title to
                  the Sale Shares and to enable the Purchaser (or its nominee(s))
                  to become
                  the registered owner thereof; 

              

      

      

      
        	
              	(8)	
                the
                  Service Agreements duly executed by the Key Employees and the Company;
                  and

              

      

      

      
        	
              	(9)	
                a
                  certificate issued by each of the Vendor and the Guarantor confirming
                  that
                  it/he is not aware of any event which is in breach or inconsistent
                  with
                  any of the Vendor Warranties.

              

      

      

      
        	5.3	
                Against
                  compliance and fulfillment of all acts and the requirements set
                  out in
                  Clause 5.2, the Purchaser shall deliver to the
                  Vendor:

              

      

      

      
        	
              	(1)	
                duly
                  executed instrument(s) of transfer and duly executed bought note(s)
                  in
                  respect of the Sale Shares;

              

      

      

      
        	
              	(2)	
                a
                  cheque drawn on a bank account in Hong Kong or if the Vendor and
                  the
                  Purchaser shall agree, by way of telegraphic transfer for the part
                  cash
                  consideration referred to in Clause 4.1(1) and made payable to
                  the Vendor
                  or such other person as it may direct in writing (whose receipt
                  shall be
                  an absolute discharge therefor);

              

      

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      
        	
              	(3)	
                copy,
                  certified by a director of the Purchaser as true and complete,
                  of the
                  resolutions in such form to the satisfaction of the Vendor passed
                  by the
                  directors of the Purchaser approving this Agreement and other documents
                  necessary for the purpose of effecting this transaction and authorising
                  a
                  person or persons to execute the same (with seal, where appropriate)
                  for
                  and on its behalf, the issue and allotment of the Consideration
                  Shares in
                  accordance with the provisions of Clause 4 and enter the name of
                  the
                  Vendor (or its nominee(s)) as holders thereof on its register of
                  members;

              

      

      

      
        	
              	(4)	
                deliver
                  to the Vendor duly issued definitive certificate in board lots
                  (as far as
                  is practicable) for quotation on OTCBB for the Consideration Shares
                  issued
                  and allotted to the Vendor under Clause
                  4.1(2);

              

      

      

      
        	
              	(5)	
                a
                  letter to the Vendor and the Guarantor from Mr. Bondy Tan as process
                  agent
                  irrevocably accepting appointment as process agent for the Purchaser;
                  and

              

      

      

      
        	
              	(6)	
                a
                  certificate issued by the Purchaser confirming that it is not aware
                  of any
                  event which is in breach or inconsistent with any of the Purchaser
                  Warranties.

              

      

      

      
        	5.4	
                The
                  Purchaser shall, against compliance with the requirements set out
                  in
                  Clauses 5.2 and 5.3 submit duly executed bought and sold note(s)
                  and the
                  instrument(s) for the transfer of the Sale Shares for stamping
                  within two
                  (2) days of Completion.

              

      

      

      
        	5.5	
                In
                  the event that the Vendor shall fail to do anything required to
                  be done by
                  them under Clauses 5.2, without prejudice to any other right or
                  remedy
                  available to the Purchaser, the Purchaser
                  may:

              

      

      

      
        	 	
                (1)

              	
                defer
                  Completion to a day not more than twenty-one (21) Business Days
                  after the
                  Completion Date (and so that provisions of this Clause 5.5(1) shall
                  apply
                  to Completion as so deferred); or

              

      

      

      
        	 	
                (2)

              	
                proceed
                  to Completion so far as practicable but without prejudice to the
                  Purchaser’s right to the extent that the Vendor shall not have complied
                  with its obligations hereunder; or

              

      

      

      
        	 	
                (3)

              	
                rescind
                  this Agreement (apart from Clauses 14, 17, 20, 21 and 24 which
                  shall
                  continue to have full force and effect) in which case none of the
                  parties
                  hereto shall have any claim of any nature whatsoever against any
                  of the
                  other parties under this Agreement (save for any rights and liabilities
                  of
                  the parties which have accrued prior to
                  rescission).

              

      

      

      
        	5.6	
                In
                  the event that the Purchaser shall fail to do anything required
                  to be done
                  by them under Clauses 5.3, without prejudice to any other right
                  or remedy
                  available to the Vendor, the Vendor
                  may:

              

      

      

      
        	 	
                (1)

              	
                defer
                  Completion to a day not more than twenty-one (21) Business Days
                  after the
                  Completion Date (and so that provisions of this Clause 5.6(1) shall
                  apply
                  to Completion as so deferred); or

              

      

      

      
        	 	
                (2)

              	
                proceed
                  to Completion so far as practicable but without prejudice to the
                  Vendor’s
                  right to the extent that the Purchaser shall not have complied
                  with its
                  obligations hereunder; or

              

      

      

      
        	 	
                (3)

              	
                rescind
                  this Agreement (apart from Clauses 14, 17, 20, 21 and 24 which
                  shall
                  continue to have full force and effect) in which case none of the
                  parties
                  hereto shall have any claim of any nature whatsoever against any
                  of the
                  other parties under this Agreement (save for any rights and liabilities
                  of
                  the parties which have accrued prior to
                  rescission).

              

      

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
        	
                6.

              	
                VENDOR
                  WARRANTIES AND
                  INDEMNITIES

              

      

      

      
        	6.1	
                Each
                  of the Vendor and the Guarantor hereby represents, warrants and
                  undertakes
                  to the Purchaser and its successors and assigns that the Vendor
                  Warranties
                  are true and accurate in all material respects on the date of this
                  Agreement and will continue to be so up to and including the Completion
                  Date with reference to the facts and circumstances from time to
                  time
                  applying. The Vendor Warranties are subject to the matters
                  Disclosed.

              

      

      

      
        	6.2	
                Each
                  of the Vendor Warranties is without prejudice to any other Vendor
                  Warranty
                  and, except where expressly or otherwise stated, no provision in
                  any
                  Vendor Warranty shall govern or limit the extent or application
                  of any
                  other provision in any Vendor Warranty. Each of the Vendor and
                  the
                  Guarantor hereby agrees that the Purchaser shall treat each of
                  the Vendor
                  Warranties as a condition of this
                  Agreement.

              

      

      

      
        	6.3	
                Each
                  of the Vendor and the Guarantor hereby agrees to fully indemnify
                  and keeps
                  the Purchaser and its assigns fully indemnified on demand from
                  and against
                  any depletion of assets, all losses, costs and expenses (including
                  legal
                  expenses) which the Purchaser and its assigns may incur or sustain
                  from or
                  in consequence of any of the Vendor Warranties not being correct
                  or fully
                  complied with. This indemnity shall be without prejudice to any
                  of the
                  rights and remedies of the Purchaser and its assigns in relation
                  to any
                  such breach of Vendor Warranties and all such rights and remedies
                  are
                  hereby expressly reserved.

              

      

      

      
        	6.4	
                If
                  it shall be found at any time after Completion that any of the
                  Vendor
                  Warranties is not true, correct and accurate or is not as represented,
                  warranted or undertaken and:

              

      

      

      
        	
              	(1)	
                the
                  effect thereof is that the value of some assets of the Group including,
                  without limitation, the value of any asset stated in the Management
                  Accounts being less than its value would have been had there been
                  no such
                  breach or the matter warranted were as warranted;
                  or

              

      

      

      
        	
              	(2)	
                the
                  Group has incurred or is under any liability or contingent liability
                  which
                  would not have been incurred if such matter were as represented
                  or
                  warranted or the relevant undertaking were performed;
                  or

              

      

      

      
        	
              	(3)	
                the
                  effect thereof is that the amount of a liability of the Group is
                  higher
                  than its amount would have been had there been no such breach or
                  the
                  matter warranted were as warranted,

              

      

      

      then,
        without prejudice to any other provisions of this Agreement, each of the
        Vendor
        and the Guarantor shall indemnify the Purchaser on demand on a full indemnity
        basis, and holds it harmless from and against all liabilities, damages, costs,
        claims, reduction in net consolidated assets or increase in net consolidated
        liabilities and all reasonable expenses which the Purchaser may sustain,
        suffer,
        or incur as a result of any of the foregoing and each of the Vendor and the
        Guarantor shall pay to the Purchaser on demand the full amount of any such
        loss
        as aforesaid in immediately available funds.

      

      
        	6.5	
                The
                  Vendor Warranties shall survive Completion and the rights and remedies
                  of
                  the Purchaser in respect of any breach of the Vendor Warranties
                  shall not
                  be affected by Completion or by the Purchaser rescinding, or failing
                  to
                  rescind this Agreement, or failing to exercise or delaying the
                  exercise of
                  any right or remedy, or by any other event or matter whatsoever,
                  except a
                  specific and duly authorised written waiver or release and no single
                  or
                  partial exercise of any right or remedy shall preclude any further
                  or
                  other exercise.

              

      

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      
        	
                6.6

              	
                Each
                  of the Vendor and the Guarantor undertakes in relation to any Vendor
                  Warranty which refers to the knowledge, awareness, information
                  or belief
                  of each of the Vendor and the Guarantor that it/he has made due
                  and
                  careful enquiry into the subject matter of that Vendor Warranty
                  and that
                  it/he does not have the knowledge, awareness, information or belief
                  that
                  the subject matter of that Vendor Warranty may not be correct,
                  complete or
                  accurate.

              

      

      

      
        	6.7	
                As
                  soon as reasonably practicable and in any event within ten (10)
                  Business
                  days from the date of this Agreement, the Vendor shall appoint
                  the
                  Independent Accountants to perform a review of the Management Accounts.
                  Each of the Vendor and the Guarantor hereby undertakes to deliver
                  the
                  Management Accounts to the Purchaser within seventy five (75) calendar
                  days from the date of this Agreement and that the Management Accounts
                  will
                  conform to the generally accepted accounting practice, standards
                  and
                  principles of Hong Kong, and were prepared based on substantially
                  the same
                  accounting practice, standards and principles as those adopted
                  and
                  consistently applied by the Group.

              

      

      

      
        	6.8	
                The
                  following provisions shall apply in respect of the review of the
                  Management Accounts referred to in Clause
                  6.7:

              

      

      

      
        	 	
                (1)

              	
                the
                  Vendor and the Guarantor shall and shall procure the Group to,
                  render such
                  assistance to the Independent Accountants as may be necessary for
                  the
                  review of the Management Accounts;

              

      

      

      
        	 	
                (2)

              	
                without
                  prejudice to the generality of (1) above, the Vendor and the Guarantor
                  shall and shall procure the Group to, supply to the Independent
                  Accountants such information and records and accord the Independent
                  Accountants such access to the properties and facilities of the
                  Group as
                  the Independent Accountants may reasonably require for their review
                  of the
                  Management Accounts; and

              

      

      

      
        	
              	(3)	
                provided
                  that the same conform to the generally accepted accounting practice,
                  standards and principles of Hong Kong, substantially the same accounting
                  practice, standards and principles as those adopted and consistently
                  applied by the Group in its preparation of the Management Accounts
                  shall
                  be adopted in the review of the Management
                  Accounts.

              

      

      

      
        	
                6.9

              	
                The
                  liability of each of the Vendor and the Guarantor in respect of
                  any breach
                  of the Vendor Warranties shall be limited as provided in this Clause
                  6.9:

              

      

      

      
        	 	
                (1)

              	
                the
                  Vendor and the Guarantor shall be under no liability in respect
                  of a
                  breach of any of the Vendor Warranties or to indemnify pursuant
                  to this
                  Agreement unless the Vendor and the Guarantor shall have received
                  written
                  notice from the Purchaser prior to the date falling on the second
                  anniversary of the Completion Date in respect of the Vendor Warranties
                  or
                  the indemnity as aforesaid giving full details of the relevant
                  claim and
                  any such claim shall (if not previously satisfied, settled or withdrawn)
                  be deemed to have been waived at the expiration of three (3) months
                  after
                  the second anniversary of the Completion Date unless proceedings
                  in
                  respect thereof shall then have been commenced against the Vendor
                  and the
                  Guarantor;

              

      

      

      
        	 	
                (2)

              	
                the
                  Vendor and the Guarantor shall be under no liability in respect
                  of any
                  breach of the Vendor Warranties or to indemnify as
                  aforesaid:

              

      

      

      
        	 	
                (i)

              	
                if
                  such liability would not have arisen but for something voluntarily
                  done or
                  omitted to be done (other than pursuant to a legally binding commitment
                  created on or before Completion) by the Purchaser or the Company
                  or any
                  member of the Group after Completion and otherwise than in the
                  usual and
                  ordinary course of business;

              

      

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      
        	 	
                (ii)

              	
                to
                  the extent that such liability arises or is increased as a result
                  only of
                  an increase in rates of Taxation made after Completion with retrospective
                  effect; or

              

      

      

      
        	 	
                (iii)

              	
                to
                  the extent that in accordance with applicable law (whether of Hong
                  Kong,
                  the PRC or elsewhere) a note, provision, allowance or reserve in
                  respect
                  thereof was made in the Management Accounts provided that, for
                  the
                  avoidance of doubt, to the extent any such note, provision, allowance
                  or
                  reserve is not in accordance with applicable law, the liability
                  of the
                  Vendor and/or the Guarantor in respect thereof shall not be limited
                  or
                  excluded by this sub-Clause (iii). 

              

      

      

      
        	
                6.10

              	
                The
                  Vendor and the Guarantor shall have no liability in respect of
                  any
                  individual matter unless the liability of the Vendor and the Guarantor
                  in
                  respect thereof shall exceed an amount of HK$300,000 (or the equivalent
                  thereof) provided that individual matters each not exceeding HK$300,000
                  in
                  terms of the liability of the Vendor and the Guarantor in respect
                  thereof
                  shall be aggregated and treated as a single claim if they stem
                  from the
                  same fact or event.

              

      

      

      
        	
                6.11

              	
                The
                  aggregate amount of the liability of the Vendor and the Guarantor
                  in
                  respect of any claim for breach of any of the Vendor Warranties
                  or to
                  indemnify as aforesaid or shall not exceed the aggregate amount
                  of the
                  consideration payable pursuant to Clause 4 (or the equivalent
                  thereof).

              

      

      

      
        	
                6.12

              	
                The
                  Purchaser shall reimburse to the Vendor and the Guarantor an amount
                  equal
                  to any sum paid by the Vendor and the Guarantor in respect of a
                  claim
                  under the Vendor Warranties or to be indemnified as aforesaid which
                  is
                  subsequently recovered or paid to the Purchaser or the Company
                  by a third
                  party.

              

      

      

      
        	
                6.13

              	
                The
                  provisions of Clauses 6.9 to 6.13 shall continue in full force
                  and effect
                  notwithstanding Completion.

              

      

      

      
        	
                7.

              	
                FURTHER
                  UNDERTAKINGS

              

      

      

      
        	
                7.1

              	
                The
                  Vendor and the Guarantor hereby jointly and severally guarantees
                  and warrants to the Purchaser that
                  the net
                  tangible assets of the Group as at 30 September 2005 (as shown
                  in the
                  Management Accounts) and in accordance with
                  the generally accepted accounting practice, standards and principles
                  of
                  Hong Kong shall not be less than
                  HK$50,000,000.

              

      

      

      
        	
                7.2

              	
                The
                  Vendor and the Guarantor hereby jointly and severally agrees that
                  any and
                  all trade debts and account receivables of the Group
                  as
                  at 30 September 2005 (as shown in the Management Accounts)
                  will be settled by or collected in full from the relevant debtor(s)
                  on or
                  prior the first anniversary of the Completion Date, failing which
                  the
                  Vendor and Guarantor jointly and severally undertakes to the Purchaser
                  that it and he shall, forthwith upon demand by the Purchaser, purchase,
                  at
                  the face value, any and all such trade debts and account receivables
                  of
                  the Group. Upon receipt of full payment in cash of the relevant
                  purchase
                  amounts due from the Vendor and/or the Guarantor as aforesaid,
                  the
                  relevant trade debts or accounts receivables shall then be assigned
                  to the
                  Vendor and/or the Guarantor, on an “as is” basis with no further recourse
                  to, or compensation from any of the Purchaser or the
                  Group.

              

      

      

      
        	
                8.

              	
                PURCHASER
                  WARRANTIES

              

      

      

      
        	
                8.1

              	
                Subject
                  to Clause 8.7, the Purchaser represents, warrants and undertakes
                  to the
                  Vendor and the Guarantor and their respective successors and assigns
                  that
                  the Purchaser Warranties are true and accurate in all material
                  aspects on
                  the date of this Agreement and will continue to be so on up to
                  and
                  including the Completion Date with reference to the facts and
                  circumstances from time to time applying.

              

      

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
        	
                8.2

              	
                The
                  Purchaser agrees that the Vendor and the Guarantor may treat each
                  of the
                  Purchaser Warranties as a condition of this
                  Agreement.

              

      

      

      
        	
                8.3

              	
                The
                  Purchaser shall indemnify and keep fully and effectively indemnified
                  the
                  Vendor and the Guarantor on demand from and against all losses,
                  costs and
                  expenses which may be incurred by them or any of them in connection
                  with
                  any breach of any of the Purchaser Warranties or their successfully
                  enforcing any claim for any such
                  breach.

              

      

      

      
        	
                8.4

              	
                The
                  following provisions shall apply to all claims for damages for
                  a breach of
                  the Purchaser:

              

      

      

      
        	 	
                (1)

              	
                if
                  this Agreement is terminated prior to Completion, the maximum liabilities
                  of the Purchaser shall be limited to the amount of the Vendor and
                  the
                  Guarantor’s costs and expenses in the negotiation, entering into of this
                  Agreement, the termination of this Agreement, and related expenses,
                  up to
                  a maximum of HK$300,000;

              

      

      

      
        	 	
                (2)

              	
                the
                  provisions of sub-Clause (1) shall not apply to any breach of the
                  Purchaser Warranties or concealment of a breach of any Purchaser
                  Warranty
                  arising out of any dishonest or deliberate act of the Purchaser;
                  and

              

      

      

      
        	 	
                (3)

              	
                the
                  Purchaser shall be under no liability in respect of a breach of
                  any of the
                  Purchaser Warranties or to indemnify pursuant to this Agreement
                  unless the
                  Purchaser shall have received written notice from the Vendor and
                  the
                  Guarantor prior to the date falling on the sixth anniversary of
                  the
                  Completion Date in respect of the Purchaser Warranties or the indemnity
                  as
                  aforesaid giving full details of the relevant claim and any such
                  claim
                  shall (if not previously satisfied, settled or withdrawn) be deemed
                  to
                  have been waived at the expiration of three (3) months after the
                  sixth
                  anniversary of the Completion Date unless proceedings in respect
                  thereof
                  shall then have been commenced against the
                  Purchaser.

              

      

      

      
        	
                8.5

              	
                The
                  indemnity provided for under Clause 8.4 is without prejudice to
                  any other
                  rights and remedies of the Vendor and the Guarantor in relation
                  to any
                  breach of any of the Purchaser Warranties and all other rights
                  and
                  remedies are expressly reserved to the Vendor and the
                  Guarantor.

              

      

      

      
        	
                8.6

              	
                Each
                  of the Purchaser Warranties is without prejudice to any other Purchaser
                  Warranty or other agreements or indemnities entered into between
                  the
                  parties or any of them and, except where expressly stated otherwise,
                  no
                  provision contained in this Agreement or other agreements or indemnities
                  shall govern or limit the extent or application of any other provision
                  of
                  this Agreement or such other
                  agreements.

              

      

      

      
        	
                8.7

              	
                All
                  of the Purchaser Warranties are deemed to be qualified by the Purchaser’s
                  filings with the Securities and Exchange Commission of the US published
                  up
                  to the date of this Agreement.

              

      

      

      
        	
                8.8

              	
                No
                  claim by the Vendor or the Guarantor shall be prejudiced, nor shall
                  the
                  amount of any claim by them be reduced, in consequence of any information
                  relating to the Purchaser or its affairs which may at any time
                  have come
                  to the knowledge of any of the Vendor or the Guarantor, and it
                  shall not
                  be a defence to any claim against the Purchaser that any of the
                  Vendor or
                  the Guarantor knew or ought to have known or had constructive knowledge
                  or
                  any information relating to the circumstance giving rise to such
                  claim,
                  subject, in each case, to Clause
                  8.7.

              

      

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      
        	
                8.9

              	
                The
                  rights and remedies of the Vendor and the Guarantor in respect
                  of any
                  breach of the Purchaser Warranties shall not be affected by investigations
                  made by or on behalf of them into the affairs of the
                  Purchaser.

              

      

      

      
        	
                8.10

              	
                The
                  Purchaser Warranties shall survive Completion insofar as the same
                  are not
                  fully performed on Completion.

              

      

      

      
        	
                9.

              	
                PROFIT
                  GUARANTEE

              

      

      

      
        	
                9.1

              	
                In
                  consideration of the Purchaser’s agreement to enter into this Agreement,
                  the Vendor hereby irrevocably and unconditionally guarantees to
                  the
                  Purchaser that the aggregate net profit after taxation but before
                  extraordinary items of the Group (the “Net
                  Profit”)
                  for the twelve months ending 31 December 2006 as shown in the audited
                  consolidated financial statements of the Group ending such date
                  shall not
                  be less than HK$15,000,000 (the “Guaranteed
                  Net Profit”).
                  If the Net Profit is less than the Guaranteed Net Profit, then
                  the Vendor
                  shall pay to the Purchaser in cash within fourteen (14) calendar
                  days
                  after the delivery of the audited consolidated financial statements
                  of the
                  Group aforesaid an amount calculated as
                  follows:

              

      

      

      Amount
        payable to the Purchaser = (Guaranteed Net Profit - Net Profit) x 7.7 x
        26%

      

      PROVIDED
        THAT the aforesaid amount shall be rounded up to the nearest whole
        dollar.

      

      
        	
                9.2

              	
                The
                  Vendor undertakes to procure that the audited consolidated financial
                  statements of the Group shall be prepared by the Company and audited
                  by
                  the Independent Accountants in accordance with the generally acceptable
                  accounting practice, standards and principles of Hong Kong in respect
                  of
                  the twelve months referred to in Clause 9.1, together with any
                  notes,
                  reports or statements included therein or annexed thereto, a copy
                  of which
                  shall be delivered to the Purchaser for review by not later than
                  two (2)
                  months following the balance sheet date of the relevant
                  period.

              

      

      

      
        	
                10.

              	
                CONDUCT
                  OF BUSINESS PENDING
                  COMPLETION

              

      

      

      
        	10.1	
                The
                  Vendor hereby undertakes with the Purchaser to procure that, except
                  as
                  required by this Agreement, no resolution of the directors or shareholders
                  of any member of the Group shall be passed prior to Completion
                  without the
                  prior written consent of the
                  Purchaser.

              

      

      

      
        	10.2	
                The
                  Vendor hereby undertakes with the Purchaser that until Completion
                  the
                  Group shall carry on its business in a manner consistent with past
                  practice and shall:

              

      

      

      
        	
              	(1)	
                procure
                  that the Group shall not without first obtaining the prior written
                  consent
                  of the Purchaser enter into any contract or commitment of an unusual
                  or
                  onerous nature or other than in the normal and ordinary course
                  of
                  business; and

              

      

      

      
        	
              	(2)	
                keep
                  the Purchaser informed of all matters relating to the Group and
                  its
                  business, assets and prospects.

              

      

      

      
        	10.3	
                Without
                  prejudice and notwithstanding Clause 10.2, the Vendor undertakes
                  that it
                  shall pending Completion take all steps necessary to ensure that
                  the Group
                  shall not carry out any of the following actions and no resolution
                  of the
                  board of directors of any member of the Group or of its general
                  meeting
                  shall be passed to carry out the same unless the written consent
                  of the
                  Purchaser is obtained:

              

      

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      
        	 	
                (1)

              	
                the
                  creation or issue of any shares in any member of the Group or the
                  grant of
                  any options over any shares or the uncalled capital of any member
                  of the
                  Group or the issue of any warrant, debentures, securities or other
                  obligations convertible into shares in any member of the Group
                  or enter
                  into any agreement to do any of the same;

              

      

      

      
        	 	
                (2)

              	
                the
                  capitalisation, repayment or other form of distribution of any
                  amount
                  standing to the credit of any reserve of any member of the Group
                  on the
                  redemption or purchase of any shares in any member of the Group
                  or any
                  other reorganisation of share
                  capital;

              

      

      

      
        	 	
                (3)

              	
                the
                  winding-up or liquidation of any member of the Group;
                  

              

      

      

      
        	 	
                (4)

              	
                the
                  alteration of the rights attaching to any of the Sale Shares or
                  the shares
                  or registered capital in any member of the Group;
                  

              

      

      

      
        	 	
                (5)

              	
                the
                  alteration of the memorandum and articles of association of any
                  member of
                  the Group and the passing of any resolutions inconsistent with
                  the
                  provision of this Agreement;

              

      

      

      
        	 	
                (6)

              	
                the
                  acquisition or disposal of any lease or any other interests in
                  real
                  property owned or occupied by each member of the Group or the creation
                  of
                  any Encumbrance over such property;

              

      

      

      
        	 	
                (7)

              	
                the
                  acquisition of disposal of any property or other asset by each
                  member of
                  the Group if the aggregate sum involved exceeds (or, in the case
                  of a
                  disposal, if the book value exceeds)
                  HK$500,000;

              

      

      

      
        	 	
                (8)

              	
                the
                  acquisition or formation by any member of the Group of any subsidiary
                  or
                  the acquisition of any share in any other company or the participation
                  by
                  any member of the Group in any partnership or joint
                  venture;

              

      

      

      
        	 	
                (9)

              	
                the
                  sale or disposal of the whole or a substantial part of the undertaking
                  or
                  the assets of any member of the
                  Group;

              

      

      

      
        	 	
                (10)

              	
                the
                  entering into of any material contract by any member of the Group
                  other
                  than in its usual and ordinary course of
                  business;

              

      

      

      
        	 	
                (11)

              	
                except
                  in the usual and ordinary course of business of the relevant member
                  of the
                  Group, the lending of any moneys (otherwise than by way of deposit
                  with a
                  bank or other institution the normal business of which includes
                  the
                  acceptance of deposit), the granting of any credit or the giving
                  of any
                  guarantee or indemnity;

              

      

      

      
        	 	
                (12)

              	
                the
                  amalgamation or merger of any member of the Group with any other
                  company
                  or concern;

              

      

      

      
        	 	
                (13)

              	
                the
                  alteration of the composition of any board of directors of any
                  member of
                  the Group; 

              

      

      

      
        	 	
                (14)

              	
                the
                  making of any capital commitment by any member of the
                  Group;

              

      

      

      
        	
              	(15)	
                the
                  borrowing of any moneys or acceptance of credit facilities by any
                  member
                  of the Group from banks, financial institutions and any other third
                  parties other than in its usual and ordinary course of business;
                  or

              

      

      

      
        	 	
                (16)

              	
                the
                  making, declaration or payment of any dividend or
                  distribution.

              

      

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      
        	10.4	
                If
                  at any time before Completion any of the Vendor or the Guarantor
                  comes to
                  know of any fact or event which:

              

      

      

      
        	 	
                (1)

              	
                is
                  in any way inconsistent with any of the undertakings or agreements
                  of any
                  of the Vendor or the Guarantor,
                  and/or

              

      

      

      
        	 	
                (2)

              	
                suggests
                  that any of the Vendor Warranties may not be correct or incapable
                  of being
                  carried out, and/or

              

      

      

      
        	 	
                (3)

              	
                might
                  affect the willingness of a prudent purchaser for value of the
                  Sale Shares
                  to complete its purchase or the amount of the consideration which
                  such
                  purchaser would be prepared to pay for the Sale
                  Shares,

              

      

      

      the
        Vendor and the Guarantor shall give immediate written notice thereof to the
        Purchaser in which event the Purchaser may within seven (7) Business Days
        of
        receiving such notice rescind this Agreement by written notice to the Vendor
        and
        the Guarantor.

      

      
        	
                10.5

              	
                If
                  at any time before Completion the Purchaser comes to know of any
                  fact or
                  event which:

              

      

      

      
        	 	
                (1)

              	
                is
                  in any way inconsistent with any of the undertakings or agreements
                  of the
                  Purchaser, and/or

              

      

      

      
        	 	
                (2)

              	
                suggests
                  that any of the Purchaser Warranties may not be correct or incapable
                  of
                  being carried out, and/or

              

      

      

      
        	 	
                (3)

              	
                might
                  affect the willingness of a prudent investor for value for the
                  subscription of the Consideration Shares to subscribe for the
                  Consideration Shares or the amount of the subscription price which
                  such
                  investor would be prepared to subscribe for the Consideration
                  Shares,

              

      

      

      the
        Purchaser shall give immediate written notice thereof to the Vendor and the
        Guarantor in which event the Vendor and the Guarantor may within ten (10)
        Business Days of receiving such notice rescind this Agreement by giving to
        the
        Purchaser a notice in writing signed by them jointly (but not
        otherwise).

      

      
        	10.6	
                If
                  at any time before Completion any of the Vendor and the Guarantor
                  fails to
                  comply with any of its/his obligations under this Clause 10 or
                  any other
                  provisions of this Agreement or the Purchaser determines (acting
                  reasonably) that any of the Vendor Warranties might have been incorrect
                  or
                  is or may be incapable of performance, the Purchaser may rescind
                  this
                  Agreement by written notice to the Vendor and the
                  Guarantor.

              

      

      

      
        	
                11.

              	
                ACCESS
                  TO INFORMATION

              

      

      

      The
        Vendor shall procure that, pending Completion, the Purchaser, its agents,
        representatives and professional advisers are given promptly on request full
        access to all such facilities and information regarding the business, assets,
        liabilities, contracts and affairs of the Group and other evidence of ownership
        of the assets owned by the Group as the Purchaser may require.

      

      
        	
                12.

              	
                FURTHER
                  ASSURANCE

              

      

      

      Each
        party shall execute, do and perform or procure to be executed, done and
        performed by other necessary parties all such further acts, agreements,
        assignments, assurances, deeds and documents within its powers to give effect
        to
        this Agreement and all transactions contemplated hereunder. 

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      
        	
                13.

              	
                GUARANTEE
                  AND OPTION TO ACQUIRE FURTHER
                  SHARES

              

      

       

      
        	
                13.1

              	
                The
                  Guarantor hereby irrevocably and unconditionally guarantees to
                  the
                  Purchaser the due and punctual performance of the Vendor of its
                  obligations under this Agreement and undertakes to indemnify and
                  keep
                  effectively indemnified the Purchaser (if necessary by payment
                  of cash on
                  first demand) against all liabilities, losses, damages, costs and
                  expenses
                  stipulated under this Agreement or otherwise which the Purchaser
                  may
                  suffer or incur in connection with any default or delay on the
                  part of the
                  Vendor in the performance or any such
                  obligations.

              

      

      

      
        	
                13.2

              	
                The
                  obligations and liabilities of the Guarantor shall be continuing
                  obligations and shall not be satisfied, discharged or affected
                  by an
                  intermediate payment or any change in the constitution or control
                  of, or
                  the insolvency of or any bankruptcy, winding up or analogous proceedings
                  relating to any of the parties to this
                  Agreement.

              

      

      

      
        	
                13.3

              	
                The
                  liability of the Guarantor hereunder shall be unaffected by any
                  arrangement which the Purchaser may make with the Vendor or with
                  any other
                  person which (but for this provision) might operate to diminish
                  or
                  discharge the liability of or otherwise provide a defence to a
                  surety.
                  Without prejudice to the generality of the foregoing, the Purchaser
                  is to
                  be at liberty at any time and without reference to the Guarantor
                  to give
                  time for payment or grant any other indulgence and to give up,
                  deal with,
                  vary, exchange or abstain from perfecting or enforcing any other
                  securities or guarantees held by the Guarantor at any time and
                  to
                  discharge any party thereto and to realise such securities or guarantees,
                  as the Purchaser thinks fit and to compound with, accept compositions
                  from
                  and make any other arrangements with the Vendor without affecting
                  the
                  liability of the Guarantor
                  hereunder.

              

      

      

      
        	
                13.4

              	
                As
                  a separate and independent stipulation, it is hereby agreed by
                  the
                  Guarantor that any obligation and undertaking under this Clause
                  13 which
                  may not be enforceable against the Guarantor on the footing of
                  a
                  guarantee, whether by reason of any legal limitation (other than
                  any
                  limitation imposed by this Agreement), disability or incapacity
                  on or of
                  the Vendor or any other fact or circumstance whether or not known
                  to the
                  Purchaser shall nevertheless be enforceable against the Guarantor
                  as the
                  sole and principal obligor in respect
                  thereof.

              

      

      

      
        	
                13.5

              	
                Without
                  prejudice to the other provisions of this Agreement, the obligations
                  and
                  undertakings expressed to be assumed by or imposed on the Guarantor
                  under
                  this Agreement shall remain in force so long as the Vendor shall
                  have any
                  liability or obligation to the Purchaser under this Agreement and
                  until
                  all such liabilities and obligations have been discharged in
                  full.

              

      

      

      
        	
                13.6

              	
                The
                  Guarantor hereby waives any right to require a proceeding first
                  against
                  the Vendor or any other person.

              

      

      

      
        	13.7	
                Each
                  of the Guarantor and the Purchaser acknowledges that the Purchaser
                  is
                  prepared to purchase further Shares in which the Guarantor is ultimately
                  interested through his interest in Admire Fame Invests Limited,
                  Gain Huge
                  Investments Limited and Splendid Fortune Investments Limited, subject
                  to
                  Completion and subject further to and upon the terms of set out
                  in the
                  Option Deed, to the intent that the Purchaser (or such other company
                  as
                  the Purchaser may nominate) shall own, together with the Sale Shares,
                  not
                  less than an aggregate of 51% of the issued share capital of the
                  Company
                  after Completion. The Guarantor agrees to procure Admire Fame Invests
                  Limited, Gain Huge Investments Limited, Splendid Fortune Investments
                  Limited and the Purchaser agrees, to enter into the Option
                  Deed.

              

      

      

      
        	
                14.

              	
                CONFIDENTIALITY
                  AND ANNOUNCEMENTS

              

      

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      
        	14.1	
                Each
                  of the parties hereto undertakes to the others that it/he will
                  not, at any
                  time after the date of this Agreement, divulge or communicate to
                  any
                  person other than to its professional advisers, or when required
                  by law,
                  or to its respective officers or employees whose province it is
                  to know
                  the same any confidential information concerning the business,
                  accounts,
                  finance or contractual arrangements or other dealings, transactions
                  or
                  affairs of any of the others which may be within or may come to
                  its
                  knowledge and it shall use its best endeavours to prevent the publication
                  or disclosure of any such confidential information concerning such
                  matters.

              

      

      

      
        	14.2	
                No
                  public announcement or communication of any kind shall be made
                  in respect
                  of the subject matter of this Agreement unless specifically agreed
                  between
                  the parties hereto or unless an announcement is required pursuant
                  to the
                  applicable law and the regulations or the requirements of the Securities
                  and Exchange Commission of the US or any other regulatory body
                  or
                  authority. Any announcement by any party hereto required to be
                  made
                  pursuant to any relevant law or regulation or the requirements
                  of the
                  Securities and Exchange Commission of the US or any other regulatory
                  body
                  or authority shall be issued only after such prior consultation
                  with the
                  other party as is reasonably practicable in the
                  circumstances.

              

      

      

      
        	
                15.

              	
                TIME
                  AND WAIVER

              

      

      

      Time
        shall in every respect be of the essence of this Agreement but no failure
        on the
        part of any party hereto to exercise, and no delay on its part in exercising
        any
        right hereunder shall operate as a waiver thereof, nor will any single or
        partial exercise of any right under this Agreement preclude any other or
        further
        exercise of it or the exercise of any other right or prejudice or affect
        any
        right against any other parties hereto under the same liability, whether
        joint,
        several or otherwise. The rights and remedies provided in this Agreement
        are
        cumulative and not exclusive of any rights or remedies provided by law. The
        parties shall then use all reasonable endeavors to replace the invalid or
        unenforceable provisions by a valid and enforceable substitute provision
        the
        effect of which is as close as possible to the intended effect of the invalid
        and unenforceable provision.

      

      
        	
                16.

              	
                INVALIDITY

              

      

      

      If
        at any
        time any one or more of the provisions of this Agreement is or becomes illegal,
        invalid or unenforceable in any respect under the laws of any relevant
        jurisdiction, neither the legality, validity or enforceability of the remaining
        provisions of this Agreement in that jurisdiction nor the legality, validity
        or
        enforceability of such provision under the laws of any other jurisdictions
        shall
        in any way be affected or impaired thereby.

      

      
        	
                17.

              	
                AMENDMENTS

              

      

      

      This
        Agreement shall not be amended, supplemented or modified except by instruments
        in writing signed by all parties hereto.

      

      
        	
                18.

              	
                NOTICES

              

      

      

      
        	18.1	
                Any
                  notice claim, demand, court process, document or other communication
                  to be
                  given under this Agreement (collectively “communication”
                  in this Clause 18) shall be in writing in the English language
                  and may be
                  served or given personally or sent to the telex or facsimile numbers
                  (if
                  any) of the relevant party and marked for the attention and/or
                  copied to
                  such other person as specified in Clause
                  18.5.

              

      

      

      
        	18.2	
                A
                  change of address or telex or facsimile number of the person to
                  whom a
                  communication is to be addressed or copied pursuant to this Agreement
                  shall not be effective until five (5) days after a written notice
                  of
                  change has been served in accordance with the provisions of this
                  Clause 18
                  on all other parties to this Agreement with specific reference
                  in such
                  notice that such change is for the purposes of this
                  Agreement.

              

      

      

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      
        	
                18.3

              	
                A
                  party may not designate a non Hong Kong address for the service
                  of
                  communications to it.

              

      

      

      
        	18.4	
                All
                  communications shall be served by the following means and the addressee
                  of
                  a communication shall be deemed to have received the same within
                  the time
                  stated adjacent to the relevant means of
                  despatch:

              

      

       

      
        	 Means of
                despatch   	 Time of deemed
                receipt
	 Local mail or courier    	 24 hours
	 Telex      	 on despatch
	 Facsimile      	 on despatch
	 Air courier/speedpost    	 3 days
	 Airmail      	 5 days

      

       

      
        	18.5	
                The
                  initial addresses and facsimile numbers of the parties for the
                  service of
                  communications, the person for whose attention such communications
                  are to
                  be marked and the person to whom a communication is to be copied
                  are as
                  follows:

              

      

       

      
        	 To the Vendor: 	 Name:	Glory Goal Investments Limited
	 	 Address:	c/o House No. 5, Mantex Villa, Hang
                Lok Lane,
                Tung Lo Wan Hill, Tai Wai, New Territories, Hong Kong
	 	 Facsimile:  	(852)
                2759 8811
	 	 Attention:	Mr. Ko Yin
	 	 	 
	 To the Purchaser:	 Name:	Global Innovative Systems Inc.
	 	 Address:	16/F., Hang Seng Mongkok Building,
                677 Nathan
                Road, Mongkok, Kowloon, Hong Kong
	 	 Facsimile: 	(852) 2546 6878
	 	 Attention:	Board of Directors
	 	 	 
	To the Guarantor:	 Address: 	House No. 5, Mantex Villa, Hang Lok
                 Lane,
                Tung
                Lo Wan Hill, Tai Wai, New
                Territories, Hong Kong
	 	 Facsimile: 	(852) 2759
                0282

      

       

      
        	18.6	
                A
                  communication served in accordance with this Clause 18 shall be
                  deemed
                  sufficiently served and in proving service and/or receipt of a
                  communication it shall be sufficient to prove that such communication
                  was
                  left at the addressee’s address or that the envelope containing such
                  communication was properly addressed and posted or despatched to
                  the
                  addressee's address or that the communication was properly transmitted
                  by
                  telex, facsimile or cable to the addressee. In the case of communication
                  by telex, such communication shall be deemed properly transmitted
                  upon the
                  receipt by the machine sending the telex the telex answerback of
                  the
                  addressee; in the case of facsimile transmission, such transmission
                  shall
                  be deemed properly transmitted on receipt of a report of satisfactory
                  transmission printed out by the sending
                  machine.

              

      

      

      
        	18.7	
                Nothing
                  in this Clause 18 shall preclude the service of communication or
                  the proof
                  of such service by any mode permitted by
                  law.

              

      

      

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      
        	
                19.

              	
                ASSIGNMENT

              

      

      

      This
        Agreement shall be binding upon and enure for the benefit of each party’s
        successors or assigns and, none of the rights of the parties under this
        Agreement may be assigned or transferred.

      

      
        	
                20.

              	
                ENTIRE
                  AGREEMENT

              

      

      

      This
        Agreement (together with any documents referred to herein) constitutes the
        entire agreement between the parties hereto with respect to the matters dealt
        with herein and supersedes any previous agreements, arrangements, statements,
        understandings or transactions between the parties hereto in relation to
        the
        matters hereof.

      

      
        	
                21.

              	
                COSTS
                  AND STAMP DUTY

              

      

      

      
        	21.1	
                Each
                  of the Vendor and the Purchaser shall bear its own costs and expenses
                  (including legal fees) incurred in connection with the preparation,
                  negotiation, execution and performance of this Agreement and all
                  documents
                  incidental or relating to Completion.

              

      

      

      
        	21.2	
                Stamp
                  duty or such other levy, tax or duties in respect of the transfer
                  of the
                  Sale Shares shall be paid equally by the Vendor and the Purchaser.
                  Without
                  prejudicing the foregoing, the Vendor hereby agrees and undertakes
                  to
                  attend to the assessment of the stamp duty in respect of the transfer
                  of
                  the Sale Shares by the Inland Revenue Department of Hong Kong after
                  Completion and make the payment of the assessed amount in advance.
                  In
                  consideration of the Vendor agreeing to pay such assessed duty,
                  the
                  Purchaser hereby agrees to reimburse the Vendor the payment of
                  one half of
                  the total assessed stamp duty.

              

      

      

      
        	
                22.

              	
                COUNTERPART

              

      

      

      This
        Agreement may be executed in any number of counterparts, all of which taken
        together shall constitute one and the same instrument and any of parties
        hereto
        may execute this Agreement by signing any such counterparts.

      

      
        	
                23.

              	
                LEGAL
                  REPRESENTATION

              

      

      

      The
        parties hereby acknowledge that Preston Gates & Ellis only act for the
        Vendor and the Guarantor in connection with this Agreement and the Purchaser
        has
        been duly advised to seek independent legal advice and to obtain separate
        legal
        representation.

      

      
        	
                24.

              	
                GOVERNING
                  LAW, JURISDICTION AND PROCESS
                  AGENTS

              

      

      

      
        	24.1	
                This
                  Agreement shall be governed by and construed in accordance with
                  the laws
                  of Hong Kong.

              

      

      

      
        	24.2	
                The
                  parties hereto hereby irrevocably submit to the non-exclusive jurisdiction
                  of the courts of Hong Kong.

              

      

      

      
        	24.3	
                The
                  Vendor hereby irrevocably appoints the Guarantor, whose correspondence
                  address is at House No. 5, Mantex Villa, Hang Lok Lane, Tung Lo
                  Wan Hill,
                  Tai Wai, New Territories, Hong Kong as its service agent to accept
                  service
                  or process out of the courts of the Hong Kong in connection with
                  this
                  Agreement. Such appointment cannot be revoked and the Vendor hereby
                  confirms that any process, writ of action or summonses out of the
                  courts
                  of Hong Kong served either personally on or sent by post (postal
                  prepaid)
                  to the service agent referred to in this Clause 24.3 at the then
                  current
                  address of such service agent shall be and shall be deemed to be
                  served on
                  the Vendor and that the failure of the service agent to give any
                  notice of
                  such service of process to the Vendor shall not impair or affect
                  the
                  validity of such service or of any judgment based
                  thereon.

              

      

      

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      
        	24.4	
                The
                  Purchaser hereby irrevocably appoints Mr. Bondy Tan, holder of
                  Hong Kong
                  Permanent Identity Card No. D 500769 (1)) and whose correspondence
                  address
                  is at 16/F., Hang Seng Mongkok Building, 677 Nathan Road, Mongkok,
                  Kowloon, Hong Kong as its service agent to accept service or process
                  out
                  of the courts of the Hong Kong in connection with this Agreement.
                  Such
                  appointment cannot be revoked and the Purchaser hereby confirms
                  that any
                  process, writ of action or summonses out of the courts of Hong
                  Kong served
                  either personally on or sent by post (postal prepaid) to the service
                  agent
                  referred to in this Clause 24.4 at the then current address of
                  such
                  service agent shall be and shall be deemed to be served on the
                  Purchaser
                  and that the failure of the service agent to give any notice of
                  such
                  service of process to the Purchaser shall not impair or affect
                  the
                  validity of such service or of any judgment based
                  thereon.

              

      

      

      

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        1

      

      DETAILS
        OF THE COMPANY

      

      
        
          	
                  Name
                    of Company 

                	
                  :

                	
                  Beijing
                    Illumination (Hong Kong) Limited

                
	 	 	 
	
                  Date
                    of Incorporation

                	
                  :

                	
                  11
                    October 2002

                
	 	 	 
	
                  Place
                    of Incorporation

                	
                  :

                	
                  Hong
                    Kong

                
	 	 	 
	
                  Company
                    Number

                	
                  :

                	
                  817413

                
	 	 	 
	
                  Registered
                    Office

                	
                  :

                	
                  Rooms
                    1108-1109

                  11th
                    Floor

                  Tower
                    2, Enterprise Square

                  9
                    Sheung Yuet Road

                  Kowloon
                    Bay, Kowloon

                  Hong
                    Kong

                
	 	 	 
	
                  Existing
                    company secretary

                	
                  :

                	
                  Leung
                    Man Fai 

                
	 	 	 
	
                  Authorised
                    share capital

                	
                  :

                	
                  HK$10,000
                    divided into 10,000 shares of HK$1.00 each

                
	 	 	 
	
                  Issued
                    share capital

                	
                  :

                	
                  HK$1,250
                    (comprising of 1,250 shares of HK$1.00 each)

                
	 
	
                  Existing
                    shareholders:

                

        

          

        
          
            	Name
                    of shareholders	 	 No.
                    of shares	 Percentage
	 	 	 	 
	
                    Glory
                      Goal Investments Limited

                  	 	
                    325

                  	
                    26.00

                  
	
                    Aeneas
                      Portfolio Company, L.P.

                  	 	
                    250

                  	
                    20.00

                  
	
                    First
                      Top Holdings Limited

                  	 	
                    250

                  	
                    20.00

                  
	
                    Admire
                      Fame Investments Limited

                  	 	
                    215

                  	
                    17.20

                  
	
                    Gain
                      Huge Investments Limited

                  	 	
                    125

                  	
                    10.00

                  
	
                    Splendid
                      Fortune Investments Limited

                  	 	
                    45

                  	
                    3.60

                  
	
                    Chen
                      Mun Onn

                  	 	
                    15

                  	
                    1.20

                  
	
                    Qin
                      Fu Yan

                  	 	
                    5

                  	
                    0.40

                  
	
                    China
                      Northern Enterprises Investment Fund Limited

                  	 	
                    5

                  	
                    0.40

                  
	
                    Tee
                      Tsun Chi

                  	 	
                    5

                  	
                    0.40

                  
	
                    Wong
                      Chi Chin

                  	 	
                    5

                  	
                    0.40

                  
	
                    Tsang
                      Chi Ping

                  	 	
                    3

                  	
                    0.24

                  
	
                    Ho
                      Chung Yin, Andrew

                  	 	
                    2

                  	
                    0.16

                  

          

           

          
            	
                    Directors:

                  	
                    :

                  	
                    (1) Li
                      Yang

                  
	 	 	
                    (2) Lam
                      So Ying

                  
	 	 	
                    (3) Ko
                      Yin

                  
	 	 	 
	
                    Auditors

                  	
                    :

                  	
                    Deloitte
                      Touche Tohmatsu

                  
	 	 	 
	
                    Financial
                      year end

                  	
                    :

                  	
                    31
                      December

                  
	 	 	 
	
                    Principal
                      activities

                  	
                    :

                  	
                    Investment
                      holding

                  

          

        

      

      

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      SCHEDULE
        2

      

      DETAILS
        OF THE SUBSIDIARIES

      

      
        	
                1.

              	
                Name
                  of the subsidiary

              	
                :

              	
                (transliterated
                  as Beijing Aihua New Enterprise Lighting Appliance Company
                  Ltd.)

              
	 	 	 	 
	 	
                Economic
                  nature

              	
                :

              	
                wholly
                  foreign owned enterprise

              
	 	 	 	 
	 	
                Investor

              	
                :

              	
                The
                  Company

              
	 	 	 	 
	 	
                Investment
                  capital

              	
                :

              	
                RMB21,000,000
                  (equivalent to approximately HK$19,811,320)

              
	 	 	 	 
	 	
                Registered
                  capital

              	
                :

              	
                RMB15,300,000
                  (equivalent to approximately HK$14,433,962)

              
	 	 	 	 
	 	
                Attributable
                  interest of the Group

              	
                :

              	
                100%

              
	 	 	 	 
	 	
                Terms

              	
                :

              	
                25
                  years from 3rd June, 2003 to 2nd June, 2028

              
	 	 	 	 
	 	
                Scope
                  of business

              	
                :

              	
                manufacture
                  of lighting equipment; production installation, technology development
                  and
                  provision of technical services; and sale of its own
                  products

              
	 	 	 	 
	
                2.

              	
                Name
                  of the subsidiary

              	
                :

              	
                (transliterated
                  as Xianghe Aihua New Enterprise Lighting Equipment Company
                  Ltd.)

              
	 	 	 	 
	 	
                Economic
                  nature

              	
                :

              	
                Limited
                  liability company

              
	 	 	 	 
	 	
                Joint
                  venture partners

              	
                :

              	
                (a) (as
                  to 51%); and

                 

                (b) Wang
                  Yong Hua (PRC joint venture partner) (as to 49%)

              
	 	 	 	 
	 	
                Registered
                  capital

              	
                :

              	
                RMB500,000
                  (equivalent to approximately HK$471,698)

              
	 	 	 	 
	 	
                Attributable
                  interest of the Group

              	
                :

              	
                51%

              
	 	 	 	 
	 	
                Terms

              	
                :

              	
                20
                  years from 20th November, 2003 to 19th November, 2023

              
	 	 	 	 
	 	
                Scope
                  of business

              	
                :

              	
                Research
                  and development of lighting equipment; manufacture of lighting
                  devices;
                  and sale of tis own products

              

      

      

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      SCHEDULE
        3

      

      VENDOR
        WARRANTIES

      

      
        	l.	
                Recitals

              

      

      

      The
        matters stated in the Recitals to this Agreement are true and correct in
        all
        material respects.

      

      
        	2.	
                The
                  Vendor, the Guarantor and the
                  Company

              

      

      

      
        	2.1	
                Each
                  of the Vendor and the Guarantor has the full power to enter into
                  and
                  perform this Agreement and this Agreement will, when executed,
                  constitute
                  binding obligations on each of them in accordance with its
                  terms.

              

      

      

      
        	2.2	
                Save
                  as Disclosed and except, in particular, the amount of HK$2,300,000
                  and RMB
                  4,259,600 due to the Guarantor, there is no outstanding indebtedness
                  or
                  other liability (actual or contingent) owing by any member of the
                  Group to
                  the Vendor or the Guarantor, any director of a member of the Group
                  or any
                  person connected with the Vendor or the Guarantor nor is there
                  any
                  indebtedness owing to a member of the Group by any such person.
                  With
                  respect to the aforesaid indebtedness, the Guarantor warrants that
                  not
                  more than HK$1,000,000 will be recovered from the Company or any
                  member of
                  the Group prior to the first anniversary of the Completion date.
                  For
                  avoidance of doubt, any further sums advanced by the Guarantor
                  to the
                  Company or any member of the Group after Completion shall be repaid
                  to the
                  Guarantor at any time on demand.

              

      

      

      
        	2.3	
                The
                  entire issued share capital of the Company is as set out in Recital
                  (A)
                  and the Sale Shares are issued fully paid and are beneficially
                  owned by
                  the Vendor free from all Encumbrances and the same are freely transferable
                  by the Vendor without the consent, approval, permission, licence
                  or
                  concurrence of any third party.

              

      

      

      
        	2.4	
                True
                  copies or certified true copies of the memorandum and articles
                  of
                  association of the Company and true copies of the articles of association
                  of the Company have been provided to the Purchaser. The copies
                  of the
                  memorandum and articles of association of the Company so provided
                  to the
                  Purchaser are true and complete and have embodied in them or annexed
                  to
                  them a copy of every such resolution as is required by the Companies
                  Ordinance (Cap. 32 of the Laws of Hong Kong) or other relevant
                  legislation.

              

      

      

      
        	2.5	
                None
                  of the members of the Group has granted any right to call for the
                  issue of
                  or agreed to issue at any time after Completion any share or loan
                  capital.

              

      

      

      
        	2.6	
                None
                  of the members of the Group is under any contract, options, warrants
                  or
                  any other obligations regarding any part of its capital, issued
                  or
                  unissued, or for the issue of any shares, debentures, warrants,
                  options,
                  or other similar securities.

              

      

      

      
        	2.7	
                Save
                  as Disclosed, none of the members of the Group has any other subsidiary
                  and does not have any investment in any other
                  company.

              

      

      

      
        	3.	
                Financial
                  and taxation

              

      

      

      
        	3.1	
                The
                  Management Accounts were prepared in accordance with the generally
                  accepted accounting practice, standards and principles of Hong
                  Kong,
                  substantially the same accounting practice, standards and principles
                  as
                  those adopted and consistently applied by the
                  Group.

              

      

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      
        	3.2	
                Each
                  member of the Group has duly complied and will until Completion
                  continue
                  duly to comply with its obligations to account to the relevant
                  tax
                  authorities for all amounts for which it is or may become accountable
                  in
                  respect of Taxation.

              

      

      

      
        	3.3	
                All
                  returns in connection with Taxation that should have been made
                  by a member
                  of the Group have been made currently and on a proper basis and
                  will until
                  Completion continue to be so made.

              

      

      

      
        	3.4	
                Each
                  member of the Group has duly and punctually paid all Taxation which
                  it has
                  become liable to pay and is under no liability to pay any penalty
                  or
                  interest in connection with any claim for
                  Taxation.

              

      

      

      
        	3.5	
                The
                  Group has sufficient working capital to carry on its businesses
                  in their
                  present form and at present levels of turnover for the foreseeable
                  future
                  and for the purposes of carrying out and fulfilling in accordance
                  with
                  their terms all orders, projects and other contractual obligations
                  which
                  have been placed with or undertaken by the
                  Group.

              

      

      

      
        	3.6	
                Save
                  as Disclosed and except, in particular, the indebtedness set out
                  below,
                  the Company and other members of the Group has no outstanding debts,
                  liabilities and indebtedness, whether actual, contingent or deferred,
                  due
                  or payable or incurred in the ordinary and usual course of business,
                  since
                  the Management Accounts Date:

              

      

      

      
        	
              	(a)	
                an
                  aggregate principal amount of RMB4,500,000 together with interest
                  thereon
                  due to The China Construction Bank;
                  and

              

      

      

      
        	
              	(b)	
                an
                  aggregate principal amount of US$516,633.95 together with interest
                  thereon
                  due to Aeneas Portfolio Company, L.P.
                  

              

      

      

      
        	3.7	
                The
                  expenses incurred and to be borne by the Company and members of
                  the Group
                  in relation to the proposed initial public offering of the Group
                  on The
                  Stock Exchange of Hong Kong Limited through the intended holding
                  company
                  of the Group (i.e., China Aihua Lighting Technology Company Limited)
                  up to
                  30 September 2005 shall not exceed HK$3,800,000. No further expenses
                  in
                  the aforesaid public offering will be incurred without the prior
                  written
                  approval of the Purchaser. 

              

      

      

      
        	3.7	
                Each
                  member of the Group has exercised its reasonable endeavours to
                  preserve
                  and secure all tax benefits and
                  refunds.

              

      

      

      
        	3.8	
                All
                  assets of the Group of a wasting or depreciable nature are stated
                  in the
                  Management Accounts after deduction of depreciation, and such depreciation
                  being in amounts sufficient to write down such assets over their
                  respective expected useful economic lives, and unless stated to
                  the
                  contrary in the Management Accounts, depreciation is calculated
                  on a
                  straight line basis and a consistent depreciation policy has been
                  adopted
                  over all assets and there has been no change in the basis or policy
                  of
                  depreciation.

              

      

      

      
        	3.9	
                All
                  accounting records, vouchers, invoices, ledgers, contracts and
                  memoranda
                  and all other accounting documents of the Group and records of
                  all
                  transactions thereof are in the possession of the relevant member
                  of the
                  Group and have been properly written up, kept and maintained in
                  accordance
                  with generally accepted accounting practice and together shows
                  a true and
                  fair view of the affairs and financial position of the
                  Group.

              

      

      

      
        	3.10	
                A
                  consistent accounting policy has been adopted by each of the members
                  of
                  the Group over the past three years immediately preceding the Management
                  Accounts Date (or, from the date of incorporation when this is
                  a shorter
                  period) and there has been no material change
                  thereof.

              

      

      

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      
        	3.11	
                None
                  of the members of the Group holds any security (including any guarantee
                  or
                  indemnity) which is not valid and enforceable against the grantor
                  thereof
                  in accordance with its terms.

              

      

      

      
        	3.12	
                In
                  relation to all financing arrangements to which any of the members
                  of the
                  Group is a party:

              

      

      

      
        	
              	(a)	
                there
                  has been no contravention of or non compliance with any provision
                  of any
                  such document which is material and adverse in the context of the
                  Group;

              

      

      

      
        	
              	(b)	
                no
                  steps for the enforcement of any Encumbrances have been taken or
                  threatened;

              

      

      

      
        	
              	(c)	
                there
                  has not been any material alteration in the terms and conditions
                  of any of
                  the said arrangements or facilities all of which are in full force
                  and
                  effect;

              

      

      

      
        	
              	(d)	
                nothing
                  has been done or omitted to be done whereby the continuance of
                  the said
                  arrangements and facilities in full force and effect might be adversely
                  affected or prejudiced; and

              

      

      

      
        	
              	(e)	
                none
                  of the arrangements is dependent on the guarantee of or on any
                  security
                  provided by a third party.

              

      

      

      
        	3.13	
                The
                  total amount borrowed by each of the members of the
                  Group:

              

      

      

      
        	
              	(a)	
                from
                  its bankers does not exceed its overdraft facilities;
                  and

              

      

      

      
        	
              	(b)	
                from
                  whatsoever source does not exceed any limitation on borrowing contained
                  in
                  its constitutive documents or any other deed or document binding
                  on
                  it.

              

      

      

      
        	3.14	
                Save
                  as Disclosed, there were no material commitments on capital account
                  outstanding as at the Management Accounts Date and, since the Management
                  Accounts Date, the members of the Group have not made, or agreed
                  to make,
                  any material capital expenditure, or incurred or agreed to incur
                  any
                  material capital commitments nor has any of them disposed of, or
                  realised,
                  any capital assets material to its usual and ordinary course of
                  business
                  or any interest therein.

              

      

      

      
        	3.15	
                The
                  net tangible asset value of the Group as at the date of this Agreement
                  calculated in accordance with the generally accepted accounting
                  principles
                  of Hong Kong is not less than the amount shown in the Management
                  Accounts
                  and the Vendor considers that the accounting basis and policies
                  adopted
                  for such calculations are fair, reasonable and appropriate to reflect
                  the
                  net tangible assets of the Group as at such
                  date.

              

      

      

      
        	4.	
                Assets

              

      

      

      
        	4.1	
                The
                  assets of the Group included in the Management Accounts are solely
                  the
                  property of the Group and are not subject to any Encumbrance or
                  any
                  agreement to give or create any Encumbrance including any bill
                  of sale,
                  hire or hire purchase agreement, conditional sale, credit sale
                  or similar
                  agreement except for (i) any hire purchase agreement in the usual
                  and
                  ordinary course of business involving expenditure of less than
                  HK$1,000,000 per annum; (ii) title retention provisions in respect
                  of
                  goods and materials supplied to the Group in the usual and ordinary
                  course
                  of business; or (iii) liens arising in the ordinary course of business
                  by
                  operation of law.

              

      

      

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      
        	
                4.2

              	
                Since
                  the Management Accounts Date, save for disposals in the ordinary
                  course of
                  its business, the assets of the Company and its subsidiaries have
                  been in
                  the possession of, or under the control of, the
                  Group.

              

      

      

      
        	4.3	
                The
                  fixed and loose plant, machinery, vehicles and other equipment
                  used in
                  connection with the business of the Group are in a good and safe
                  state of
                  repair and condition and satisfactory working order and have been
                  regularly and properly maintained. 

              

      

      

      
        	5.	
                Litigation,
                  disputes and winding
                  up

              

      

      

      
        	5.1	
                Save
                  as Disclosed and except as plaintiff in the collection of debt
                  arising in
                  the usual and ordinary course of business (none of which exceeds
                  HK$500,000), no member of the Group is engaged in (nor is any director
                  in
                  relation to the affairs of any member of the Group engaged in)
                  any legal
                  proceedings (including litigation, arbitration and prosecution)
                  and no
                  such proceedings are pending or threatened, nor are there any facts
                  likely
                  to give rise to such proceedings known or which would on reasonable
                  enquiry be known to any member of the Group or their respective
                  directors.

              

      

      

      
        	5.2	
                None
                  of the member of the Group, the Vendor and the Guarantor has in
                  relation
                  to the any company of the Group committed nor are they liable for
                  any
                  criminal, illegal, unlawful or unauthorised act or breach of any
                  obligation whether imposed by or pursuant to the laws of Hong Kong,
                  the
                  PRC or otherwise.

              

      

      

      
        	5.3	
                No
                  order has been made, or petition presented, or resolution passed
                  for the
                  winding up of or the taking of any analogous proceedings against
                  any
                  member of the Group; nor has any distress, execution or other process
                  been
                  levied in respect of the Group which remains undischarged; nor
                  is there
                  any unfulfilled or unsatisfied judgment or court order outstanding
                  against
                  any member of the Group.

              

      

      

      
        	6.	
                Company
                  records

              

      

      

      
        	6.1	
                Each
                  member of the Group has kept duly made up all requisite books of
                  account
                  (reflecting in accordance with good accounting principles all the
                  financial transactions of the relevant member of the Group), minute
                  books,
                  registers, records and these and all other deeds and documents
                  (properly
                  stamped where necessary) belonging to or which ought to be in the
                  possession of a member of the Group and its seal are in the possession
                  of
                  the relevant member of the Group or the lender(s) to the member
                  of the
                  Group concerned (where such documents form part of the loan or
                  security
                  documents for loans made to the Group or documents required to
                  be
                  delivered under such loan or security
                  documents).

              

      

      

      
        	6.2	
                All
                  accounts, books, ledgers, and other financial records of each member
                  of
                  the Group:

              

      

      

      
        	
              	(a)	
                have
                  been properly maintained, are in the possession of the Company
                  and contain
                  due and accurate records of all matters required by law to be entered
                  therein;

              

      

      

      
        	
              	(b)	
                do
                  not contain or reflect any material inaccuracies or discrepancies;
                  and

              

      

      

      
        	
              	(c)	
                give
                  and reflect a true and fair view of the matters which ought to
                  appear
                  therein and no notice or allegation that any of the same is incorrect
                  has
                  been received, or if the Company has received such notice or allegation,
                  the incorrectness or errors have been
                  rectified.

              

      

      

      
        	6.3	
                Without
                  prejudice to the generality of paragraph 6.1 the minute book of
                  directors’
                  meetings and the minute book of shareholders’ meetings respectively of
                  each member of the Group contain full and accurate records of all
                  resolutions passed by the directors and the shareholders of the
                  member of
                  the Group concerned and no resolutions have been passed by either
                  the
                  directors or shareholders of the member of the Group concerned
                  which are
                  not recorded in the relevant minute
                  books.

              

      

      

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      
        	
                6.4

              	
                All
                  documents requiring to be filed with the registrar of companies
                  or
                  equivalent government bureau in the jurisdiction in which any member
                  of
                  the Group is incorporated or any other relevant authority by the
                  relevant
                  member of the Group have been properly made up and
                  filed.

              

      

      

      
        	7.	
                Properties

              

      

      

      
        	
                7.1

              	
                The
                  property (the “Property”)
                  referred to in the Management Accounts comprises all the land and
                  premises
                  occupied by the Group at the date hereof and all the estate, interest,
                  right and title whatsoever of the Group in, under, over or in respect
                  of
                  any land or premises and the descriptions and user set out therein
                  are
                  correct and not misleading in all material
                  respects.

              

      

      

      
        	
                7.2

              	
                The
                  Group has exclusive and unfettered possession and is the sole occupier
                  of
                  the Property.

              

      

      

      
        	
                7.3

              	
                There
                  are no covenants, restrictions, burdens, stipulations, conditions,
                  terms
                  or outgoings affecting the Property which are of an unusual or
                  onerous
                  nature or which affect the use or intended use of the Property
                  and there
                  are no other matters which adversely affect the right of the Group
                  thereto.

              

      

      

      
        	
                7.4

              	
                All
                  covenants, restrictions, stipulations, conditions and other terms
                  affecting the Property have been observed and performed and there
                  are no
                  circumstances which would entitle or require the government or
                  any
                  landlord or other person to exercise any powers of entry and taking
                  possession or which would otherwise restrict or terminate the continued
                  possession of occupation of the
                  Property.

              

      

      

      
        	
                7.5

              	
                The
                  present use of the Property is the permitted use for the purpose
                  of the
                  relevant planning of building regulations and is not adversely
                  affected or
                  likely to be adversely affected by any planning proposals and the
                  Group is
                  not a temporary user or user subject to onerous or unusual conditions
                  giving rise to abnormal
                  expenditure.

              

      

      

      
        	
                7.6

              	
                The
                  Property is not affected by any order or notice of or proceedings
                  involving any governmental or local authority or other body or
                  any
                  agreement with any of the same or by notices serviced by the Group
                  on any
                  such authority or body.

              

      

      

      
        	
                7.7

              	
                The
                  construction of all buildings and erections on the Property comply
                  with
                  all statutes, regulations, bye-laws and other relevant
                  legislation.

              

      

      

      
        	
                7.8

              	
                All
                  policies of insurance relating to the Property effected by the
                  Group
                  (including fixtures, fittings and contents) are current and valid,
                  cover
                  the full re-instatement value thereof and are not subject to any
                  special
                  or unusual terms or restrictions or to the payment of any premium
                  in
                  excess of the normal rate for policies of the same kind and conform
                  in all
                  material respects with the requirements of the lease under which
                  the
                  Property is held.

              

      

      

      
        	
                7.9

              	
                No
                  structural or other material defects have appeared in respect of
                  or is
                  affecting the buildings and structures on or comprising the Property
                  or
                  nay parts thereof and all such buildings are in good and substantial
                  repair and condition.

              

      

      

      
        	
                7.10

              	
                There
                  are not in force or required to be in force any licences under
                  any
                  applicable legislation or regulations which apply to the
                  Property.

              

      

      

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      
        	
                7.11

              	
                The
                  Property is accessible by public roads and enjoys the services
                  of water,
                  gas, electricity, telephone line, sewerage and other utility services
                  and
                  the accessibility of such roads and these services are reasonably
                  adequate
                  for the operations of the business of the
                  Group.

              

      

      

      
        	7.12	
                There
                  are no circumstances under which by operation of law or otherwise
                  the
                  Group’s right to remain at or use the Property for the purposes for which
                  it is now used may be adversely affected for any reason
                  whatsoever.

              

      

      

      
        	8.	
                Corporate
                  status

              

      

      

      
        	8.1	
                The
                  contents of Schedules 1 and 2 are true and accurate in all material
                  respects.

              

      

      

      
        	8.2	
                Each
                  member of the Group has been duly incorporated and constituted,
                  and is
                  legally subsisting under the law of its place of incorporation
                  and has the
                  requisite corporate power and all permits, authorities, licences
                  and
                  consents (whether granted by public or private authority) necessary
                  to
                  carry on its business in the matter and in the places in which
                  its
                  business is now carried on and there are no circumstances which
                  might lead
                  to the suspension or cancellation of any such permits, authorities,
                  licences or consents, and there has been no resolution, petition
                  or order
                  for the winding-up of any member of the Group and no receiver has
                  been
                  appointed in respect thereof or any part of the assets thereof,
                  nor are
                  any such resolutions, orders and appointments imminent or
                  likely.

              

      

      

      
        	8.3	
                No
                  events or omissions have occurred whereby the constitution, subsistence
                  or
                  corporate status of any member of the Group have been or are likely
                  to be
                  adversely affected.

              

      

      

      
        	9.	
                The
                  business

              

      

      

      
        	9.1	
                Since
                  the Management Account Date and save as Disclosed:
                  

              

      

      

      
        	
              	(a)	
                each
                  member of the Group has carried on its business in the ordinary
                  and usual
                  course without having entered into any material transaction, assumed
                  any
                  material liability, or made any material payment not provided for
                  in the
                  Management Accounts which is not in the ordinary course of its
                  business,
                  and there has not been any material adverse interruption or alteration
                  in
                  the nature, scope or manner of its business which would likely
                  to
                  prejudice the interests of the Purchaser as a prospectively purchaser
                  of
                  the Sale Shares;

              

      

      

      
        	
              	(b)	
                each
                  member of the Group has paid its creditors within the time agreed
                  with
                  such creditors and there are no debts outstanding by the Company
                  which
                  have been due for more than six months other than intra-group indebtedness
                  which does not exceed HK$500,000 in aggregate for the Group as
                  a whole or
                  moneys borrowed from third parties of a non-trade nature (which
                  do not
                  exceed HK$500,000 in aggregate for the Group as a
                  whole;

              

      

      

      
        	
              	(c)	
                the
                  Group has not entered into, or agreed to enter into, any capital
                  commitments in an amount exceeding the aggregate of HK$1,000,000
                  (or its
                  equivalent in any other currency);

              

      

      

      
        	
              	(d)	
                no
                  share or loan capital has been issued or agreed to be issued by
                  the
                  respective companies;

              

      

      

      
        	
              	(e)	
                no
                  distribution of capital or income has been declared, made or paid
                  in
                  respect of any share capital of any member of the Group and (excluding
                  fluctuations in overdrawn current accounts with bankers) no loan
                  or loan
                  capital of any member of the Group has been repaid in whole or
                  part or has
                  become liable to be repaid in advance of their scheduled dates
                  of
                  repayment; and

              

      

      

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      
        	
              	(f)	
                there
                  has been no material deterioration in the financial position or
                  prospects
                  or turnover of the Group (taken as a
                  whole).

              

      

      

      
        	9.2	
                The
                  acquisition of Sale Shares by the Purchaser and compliance with
                  the terms
                  of this Agreement will not:

              

      

      

      
        	
              	(a)	
                cause
                  any member of the Group to lose the benefit of any right or privilege
                  it
                  presently enjoys or cause any person who normally does business
                  with the
                  Group not to continue to do so on the same basis as
                  previously;

              

      

      

      
        	
              	(b)	
                relieve
                  any person of any obligation to the Group (whether contractual
                  or
                  otherwise) or enable any person to determine any such obligation
                  or any
                  right or benefit enjoyed by the Group or to exercise any right
                  whether
                  under an agreement with or otherwise in respect of any of
                  them;

              

      

      

      
        	
              	(c)	
                result
                  in any present or future indebtedness of the Group becoming due
                  or capable
                  of being declared due and payable prior to its stated
                  maturity;

              

      

      

      
        	
              	(d)	
                give
                  rise to or cause to become exercisable any right of pre-emption;
                  or

              

      

      

      
        	
              	(e)	
                adversely
                  affect the Group’s relationships with its clients, customers, suppliers or
                  employees.

              

      

      

      
        	10.	
                The
                  Group’s contracts

              

      

      

      
        	10.1	
                All
                  documents (which is likely to have a material effect on the financial
                  or
                  trading position or prospects of any member of the Group or involves
                  or is
                  likely to involve (i) expenditure by any member of the Group in
                  excess of
                  HK$1,000,000 in respect of any such document or (ii) obligations
                  or
                  restrictions of any member of the Group of an unusual or exceptional
                  nature or magnitude and not in the ordinary and usual course of
                  business)
                  to which any member of the Group is a party and other documents
                  owned by
                  or which ought to be in the possession of the Group have been properly
                  stamped and are in the Group’s possession and true and complete copies
                  thereof have been delivered to the
                  Purchaser.

              

      

      

      
        	10.2	
                No
                  member of the Group is a party to any agreement, transaction, obligation,
                  commitment, understanding, arrangement or liability in which
                  it:

              

      

      

      
        	
              	(a)	
                is
                  incapable of complete performance in accordance with its terms
                  within six
                  months after the date on which it was entered into or
                  undertaken;

              

      

      

      
        	
              	(b)	
                is
                  known or is likely to result in a loss to the Group on completion
                  of
                  performance;

              

      

      

      
        	
              	(c)	
                cannot
                  readily be fulfilled or performed by the member of the Group on
                  time
                  without undue or unusual expenditure of money and
                  effort;

              

      

      

      
        	
              	(d)	
                involves
                  or is likely to involve obligations, restrictions, expenditure
                  or receipts
                  of an unusual, onerous or exceptional
                  nature;

              

      

      

      
        	
              	(e)	
                is
                  a lease or a contract for hire or rent, hire purchase or purchase
                  by way
                  of credit sale or periodical
                  payment;

              

      

      

      
        	
              	(f)	
                is
                  a contract with any trade union or body authorized representing
                  the
                  Company’s employees;

              

      

      

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      
        	
              	(g)	
                requires
                  an aggregate consideration payable by the Company in excess of
                  HK$500,000
                  otherwise than in the usual and ordinary course of business of
                  the
                  Group;

              

      

      

      
        	
              	(h)	
                is
                  a contract for services (other than normal office
                  services);

              

      

      

      
        	
              	(i)	
                in
                  any way restricts the Company’s freedom to carry on the whole or any part
                  of its business in any part of the world in such manner as it thinks
                  fit;
                  or

              

      

      

      
        	
              	(j)	
                is
                  in any way otherwise than in the ordinary and proper course of
                  the
                  Company’s or the respective subsidiary’s
                  business.

              

      

      

      
        	10.3	
                No
                  member of the Group is a party to any agreement under which the
                  member of
                  the Group or any other party is in default, being a default which
                  is
                  material in relation to the financial or trading position of the
                  Company
                  nor are there any circumstances likely to give rise to such a
                  default.

              

      

      

      
        	10.4	
                No
                  person other than a member of the Group has given any guarantee
                  of or
                  security for any overdraft, loan or loan facility granted to any
                  member of
                  the Group.

              

      

      

      
        	10.5	
                There
                  are in force no powers of attorney given by a member of the Group.
                  No
                  person, as agent or otherwise, is entitled or authorised to bind
                  or commit
                  a member of the Group to any obligation not in the ordinary course
                  of the
                  relevant member’s business.

              

      

      

      
        	11.	
                Insurance

              

      

      

      
        	11.1	
                The
                  Group has maintained insurance covers in respect of all risks and
                  up to an
                  extent that may reasonably be expected of a prudent businessman
                  operating
                  a business similar to that of the
                  Group.

              

      

      

      
        	11.2	
                All
                  insurance policies taken out by the Group are valid, binding, in
                  full
                  force and effect and not voidable. To the best knowledge of the
                  Vendor and
                  the Guarantor, there are no circumstances which might lead to any
                  liability under any such insurance policies being avoided by the
                  insurers
                  or the premiums being increased and there is no claim outstanding
                  under
                  any such policy nor are there any circumstances likely to give
                  rise to a
                  claim.

              

      

      

      
        	
                12.

              	
                Employment
                  and disputes

              

      

      

      
        	
                12.1

              	
                There
                  has been no past and there is no existing or pending industrial
                  or labour
                  dispute with the employees of any member of the Group which is
                  of a
                  material nature exists or is
                  imminent.

              

      

      

      
        	
                12.2

              	
                To
                  the best of knowledge, information and belief of the Vendor and
                  the
                  Guarantor, there is no existing or imminent material labour disturbance
                  by
                  the employees of any of the principal suppliers, manufacturers
                  or
                  contractors of any member of the Group which might be expected
                  to result
                  in any material adverse change in the condition, financial or otherwise,
                  or in the earnings, business affairs or business prospects of any
                  member
                  of the Group.

              

      

      

      
        	12.3	
                No
                  member of the Group has established or incurred an obligation to
                  establish
                  or given any undertaking in respect of any retirement, death or
                  disability
                  scheme or arrangement relating to any present or past employee
                  or director
                  of any member of the Group or any other person under which any
                  obligation
                  or liability has arisen or might reasonably be expected to arise
                  which is
                  material.

              

      

      

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      
        	
                12.4

              	
                The
                  Group has neither given notice of any redundancies or layoffs nor
                  started
                  consultations with any independent trade union or employees’
                  representatives regarding redundancies, lay offs or dismissals
                  within the
                  period of one year prior to the date hereof. No circumstances have
                  arisen
                  under which the Group is likely to be required to pay damages for
                  wrongful
                  dismissal, to make any statutory severance, redundancy or long
                  service
                  payment or to make or pay any compensation for unreasonable dismissal
                  or
                  to make any other payment under any employment protection legislation
                  or
                  to reinstate or re-engage any former employee. No circumstances
                  have
                  arisen under which the Group is likely to be required to pay damages
                  or
                  compensation, or suffer any penalty or be required to take corrective
                  action or be subject to any form of discipline under any laws conferring
                  protection against discrimination, harassment, victimisation or
                  vilification by reason of age, gender, family circumstances, race,
                  religion or disability. So far as the Group is aware, there are
                  no
                  current, pending or threatened claims of any type against it by
                  any
                  existing or former employees.

              

      

      

      
        	
                12.5

              	
                There
                  are no existing service or other agreements or contracts between
                  the Group
                  and any of its directors or executives or employees which cannot
                  be
                  lawfully terminated by six calendar months’ notice or less without giving
                  rise to any claim for damages or compensation other than a statutory
                  redundancy or severance or long service payment, and the Group
                  has
                  complied with all its obligations under all ordinances, statutes
                  and
                  regulations, codes, orders and awards in connection with its employees
                  and
                  with all collective agreements with respect to trade unions or
                  to
                  employees of the Group.

              

      

      

      
        	
                13.

              	
                Environment
                  issues

              

      

      

      
        	
                13.1

              	
                The
                  Group is currently complying with all environmental laws in Hong
                  Kong, the
                  PRC and other relevant jurisdictions and has at all times complied
                  with
                  all environmental laws.

              

      

      

      
        	
                13.2

              	
                No
                  discharge, release, leaching, emission or escape into the environment
                  of
                  any hazardous substance or any substance regulated by any relevant
                  environmental law has occurred or is occurring in the conduct of
                  the
                  business of the Group or in the conduct by the Group of any former
                  business or in connection with or in relation to any assets of
                  the Group
                  or in connection with or in relation to any former assets of the
                  Group
                  while such former assets were in the ownership or under the control
                  of the
                  Group and no such discharge, release, leaching, emission or escape
                  has
                  occurred or is occurring for which the Company might otherwise
                  be held
                  liable.

              

      

      

      
        	13.3	
                All
                  waste which is or has been used, produced, controlled or disposed
                  of by
                  the Group and all waste which is or has been located at the Group’s
                  properties is and has been stored, labelled, handled, released,
                  treated,
                  processed, deposited, transported, documented and disposed of in
                  accordance with all environmental
                  laws.

              

      

      

      
        	13.4	
                The
                  Group in carrying on its business has ensured that the best available
                  techniques not entailing excessive cost are used for preventing
                  the
                  discharge, release, leaching, emission or escape into the environment
                  of
                  any hazardous substance or of any substance regulated by relevant
                  environmental laws.

              

      

      

      
        	13.5	
                There
                  have not been nor are there threatened or pending any civil or
                  criminal
                  actions, notices of violations, investigations, administrative
                  proceedings
                  or written communications from any regulatory authority under any
                  environmental laws against the Group or any of its assets or any
                  of its
                  directors, employees, officers or agents and, so far as the Group
                  is aware, there are no facts or circumstances which may give rise
                  to the
                  same.

              

      

      

      
        	14.	
                Intellectual
                  property rights and trade
                  secrets

              

      

      

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      
        	
                14.1

              	
                The
                  business of the Group (and of any licensee under a licence granted
                  by the
                  Group) as now carried on, does not, and is not likely to, infringe
                  any
                  intellectual property right (that is to say, patent, patent application,
                  knowhow, trade or service mark, trade or service mark application,
                  trade
                  name, registered design, copyright, logo or other similar intellectual,
                  industrial or commercial right) of any other person (and would
                  not do so
                  if the same were valid).

              

      

      

      
        	14.2	
                To
                  the extent that the Group has been granted any licence for the
                  use of any
                  intellectual property right, all such licences are in full force
                  and
                  effect.

              

      

       

      
        	14.3	
                Without
                  prejudice to paragraph 14.1 above, the Group does not use any processes
                  and is not engaged in any activities which involve the misuse of
                  any
                  knowhow, lists of customers or suppliers, trade secrets, technical
                  processes or other confidential information (together “Confidential
                  Information”)
                  belonging to any third party. There has been no actual or alleged
                  misuse
                  by any person of any of its Confidential Information. The Group
                  has not
                  disclosed to any person any of its Confidential Information except
                  where
                  such disclosure was properly made in the usual and ordinary course
                  of the
                  Group’s business and was made subject to an agreement under which the
                  recipient is obliged to maintain the confidentiality of such Confidential
                  Information and is restrained from further disclosing it or using
                  it other
                  than for the purposes for which it was disclosed by the
                  Group.

              

      

      

      
        	14.4	
                The
                  Group has not (otherwise than in the ordinary and normal course
                  of
                  business and to its staff and officers whose province it is to
                  know and
                  its professional advisers) disclosed, or permitted to be disclosed,
                  or
                  undertaken or arranged to disclose, to any person other than the
                  Purchaser
                  any of its knowhow, trade secrets, confidential information, price
                  lists
                  or lists of customers or suppliers.

              

      

      

      
        	15.	
                Events
                  since the Management Accounts
                  Date

              

      

      

      Since
        the
        Management Accounts Date:

      

      
        	
              	(a)	
                there
                  has been no material adverse change in the financial condition
                  or
                  prospects of any of the members of the Group and each of the members
                  of
                  the Group has entered into transactions and incurred liabilities
                  only in
                  the ordinary course of trading;

              

      

      

      
        	
              	(b)	
                no
                  resolution of any of the members of the Group in general meeting
                  has been
                  passed other than resolutions relating to the business of an annual
                  general meeting which was not special
                  business;

              

      

      

      
        	
              	(c)	
                the
                  financial year end of each of the members of the Group has continued
                  to be
                  and has not changed;

              

      

      

      
        	
              	(d)	
                no
                  event has occurred which would entitle any third party (with or
                  without
                  the giving of notice) to call for the repayment of indebtedness
                  prior to
                  its normal maturity date;

              

      

      

      
        	
              	(e)	
                the
                  business of each of the members of the Group has been carried on
                  in the
                  ordinary and usual course and in the same manner (including nature
                  and
                  scope) as in the past, no fixed asset or stock has been written
                  up nor any
                  debt written off, and no unusual or abnormal contract has been
                  entered
                  into by any of the members of the
                  Group;

              

      

      

      
        	
              	(f)	
                no
                  asset of any of the members of the Group has been acquired or disposed,
                  or
                  has been agreed to be acquired or disposed of, otherwise than in
                  the
                  ordinary course of business and there has been no disposal or parting
                  with
                  possession of any of its property, assets (including know-how)
                  or stock in
                  trade or any payments by any of the members of the Group, and no
                  contract
                  involving expenditure by it on capital account has been entered
                  into by
                  any of the members of the Group, and no liability has been created
                  or has
                  otherwise arisen (other than in the ordinary course of business
                  as
                  previously carried on);

              

      

      

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      
        	
              	(g)	
                there
                  has been no disposal of any asset (including stock) or supply of
                  any
                  service or business facility of any kind (including a loan of money
                  or the
                  letting, hiring or licensing of any property whether tangible or
                  intangible) in circumstances where the consideration actually received
                  or
                  receivable for such disposal or supply was less than the consideration
                  which could be deemed to have been received for tax
                  purposes;

              

      

      

      
        	
              	(h)	
                no
                  event has occurred which gives rise to a tax liability to any of
                  the
                  members of the Group or deemed (as opposed to actual) income, profits
                  or
                  gains or which results in the relevant company becoming liable
                  to pay or
                  bear a tax liability directly or primarily chargeable against or
                  attributable to another person, firm or company;
                  and

              

      

      

      
        	
              	(i)	
                no
                  remuneration (including bonuses) or benefit payable to any officer
                  or
                  employee of any of the members of the Group has been increased
                  nor has any
                  of the members of the Group undertaken any obligation to increase
                  any such
                  remuneration at any future date with or without retrospective
                  effect.

              

      

      

      
        	16.	
                General

              

      

      

      All
        information contained in this Agreement or in the documents referred to herein
        and therein and all other information concerning the Group and/or any part
        or
        parts of its business operations assets and liabilities (actual or contingent)
        supplied in the course of the negotiations leading to this Agreement to the
        Purchaser or its agents was when given true, complete and accurate in all
        material respects and there is no fact or matter which has not been disclosed
        which renders any such information or documents untrue, inaccurate or misleading
        in any material respect at the date of this Agreement or which if disclosed
        might reasonable be expected to influence adversely the Purchaser’s decision to
        purchase the Sale Shares on the terms of this Agreement.

       

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

      SCHEDULE
        4

      

      PURCHASER
        WARRANTIES

      

      
        	
                1.

              	
                The
                  audited condensed consolidated financial statements of the Purchaser
                  and
                  its subsidiaries for the year ended 31 March 2005 have been prepared
                  in
                  accordance with generally accepted accounting principles and practice
                  consistently applied and give a true and fair view of the results
                  of
                  operations and assets and liabilities of the Purchaser and its
                  subsidiaries for the year ended and as at the date to which such
                  financial
                  statements have been made up.

              

      

      

      
        	
                2.

              	
                The
                  Purchaser has been duly incorporated and is validly existing under
                  the
                  laws of its place of incorporation (namely, the State of Nevada,
                  the US)
                  and has full power, authority and legal right to own its assets
                  and carry
                  on its business.

              

      

      

      
        	
                3.

              	
                The
                  Consideration Shares represent approximately 8.78% of the common
                  shares of
                  the Purchaser in issue on the date of this Agreement, and approximately
                  8.07% of the common shares of the Purchaser in issue on Completion
                  as
                  enlarged by the issue of the Consideration
                  Shares.

              

      

      

      
        	
                4.

              	
                The
                  Consideration Shares shall, upon issue, rank pari passu among themselves
                  and with all other common shares of the Purchaser then in issue
                  and are
                  free from all Encumbrances.

              

      

      

      
        	
                5.

              	
                Since
                  30 June 2005, there has been no material adverse change to the
                  financial
                  position of the Purchaser and its subsidiaries (taken as a
                  whole).

              

      

      

      
        	6.	
                All
                  information contained in this Agreement or in the documents referred
                  to
                  herein and therein and all other information concerning the Purchaser
                  and/or any part or parts of its business operations assets and
                  liabilities
                  (actual or contingent) supplied in the course of the negotiations
                  leading
                  to this Agreement to the Vendor or its agents was when given true,
                  complete and accurate in all material respects and there is no
                  fact or
                  matter which has not been disclosed which renders any such information
                  or
                  documents untrue, inaccurate or misleading in any material respect
                  at the
                  date of this Agreement or which if disclosed might reasonable be
                  expected
                  to influence adversely the Vendor’s decision to accept the Consideration
                  Shares on the terms of this
                  Agreement.

              

      

       

      
 

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

      SCHEDULE
        5

      

      OPTION
        DEED

       

       

      
 

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

      IN
        WITNESS
        whereof
        this Agreement has been duly executed by all parties hereto the day and year
        first above written.

      

      
        	 

                THE
                  VENDOR

                

                SIGNED
                  by

                 

                for
                  and on behalf of

                 

                GLORY
                  GOAL INVESTMENTS LIMITED
                  

                 

                 

                in
                  the presence of:

                

                

                

                

                THE
                  PURCHASER

                

                SIGNED
                  by

                 

                for
                  and on behalf of

                 

                GLOBAL
                  INNOVATIVE SYSTEMS
                  INC.

                 

                in
                  the presence of:

                

                

                

                

                THE
                  GUARANTOR

                

                SIGNED,
                  SEALED AND DELIVERED 

                by
                  KO
                  YIN

                in
                  the presence of:

              	
                 

                 

                 

                )

                )

                )

                )

                )

                )

                )

                )

                )

                 

                 

                 

                 

                 

                 

                 

                
                  )

                  )

                  )

                  )

                  )

                  )

                  )

                  )

                   

                   

                   

                   

                   

                   

                   

                  
                    )

                    )

                    )

                  

                

              

      

      
 

       

      35

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