Document:

Unassociated Document

    Exhibit
10.1

    

    FORM
OF INDEPENDENT DIRECTOR AGREEMENT

    

    THIS
INDEPENDENT DIRECTOR
AGREEMENT (the “Agreement”) is made as of the
_____ day of July, 2010 and is by and between Bohai Pharmaceuticals Group, Inc.,
a Nevada corporation (the “Company”), and _________(the
“Director”).

    

    WHEREAS, the Board of
Directors of the Company (the “Board of Directors”) desires
to appoint the Director to perform the duties of an “independent” director
(within the meaning of the rules of the U.S. Securities and Exchange Commission
(the “SEC”)), and the
Director desires to be so appointed for such position and to perform the duties
required of such position in accordance with the terms and conditions of this
Agreement.

    

    NOW, THEREFORE, in
consideration for the above recited promises and the mutual promises, agreements
and covenants of the Company and the Director contained herein, the adequacy and
sufficiency of which are hereby acknowledged, the Company and the Director
hereby agree as follows:

    

    1.           DUTIES.  The Company
requires that the Director be available to perform the duties of an independent
director customarily related to this function as may be determined and assigned
by the Board of Directors of the Company and as may be required by the Company’s
constituent instruments, including its certificate or articles of incorporation,
bylaws and its corporate governance and board committee charters, each as
amended or modified from time to time, and by applicable law, including, without
limitation, the Nevada Revised Statutes (the “NRS”) and the rules and
regulations of the SEC and any exchange or quotation system on which the
Company’s securities may be traded from time to time.  The Director
agrees to devote as much time as is necessary to perform completely the duties
as an independent director of the Company, including duties as a member of the
Audit Committee and such other committees as the Director may hereafter be
appointed to.  The Director will perform such duties described herein
in accordance with the general fiduciary duty of directors arising under the
NRS.

    

    2.           TERM.

    

    (a)           Except
as provided for in Section 2(b), the term of this Agreement shall commence as of
the date of the Director’s appointment by the Board of Directors of the Company
and shall continue until the expiration of the Director’s term or his death,
incapacity, removal or resignation.

    

    (b)           It
is acknowledged and agreed that the Director shall serve for an initial period
ending on three months after date first written above, (the “Initial
Period”).  At any time prior to the conclusion of the Initial
Period, the Chairman of the Board of Directors may, on behalf of the Company and
in his discretion, request that the Director tender his resignation from the
Board of Directors, effective immediately, and if so requested, the Director
shall offer such resignation immediately.  If the Director’s service
on the Board of Directors is terminated in accordance with this Section 2(b),
the Director shall forfeit his rights hereunder to receive any compensation from
the Company and this Agreement shall terminate (expect for those provisions
which expressly survive termination).

    
      
         

      

      
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    3.           COMPENSATION.  For
all services to be rendered by the Director in any capacity hereunder, the
Company agrees to: (i) pay the Director a cash fee of $[   
] per annum with the first year’s payment due quarterly in arrears on the
last day of each fiscal quarter of the Company (i.e., March 31, June 30,
September 30 and December 31) commencing September 30, 2010, and (ii) following
the conclusion of the Initial Period, and provided this Agreement is not
terminated pursuant to the Section 2(b), issue to the Director a 5 year
non-qualified option to purchase [    ] shares of resticted
common stock of the Company at a price equal to $[    ] per
share, which option shall contain a cashless exercise feature.  Such
fee and any other compensation of the Director may be adjusted from time to time
as agreed by the parties or as determined by the Compensation or other similar
committee of the Board of Directors.

    

    4.           EXPENSES.  In
addition to the compensation provided in paragraph 3 hereof, the Company will
reimburse the Director for pre-approved reasonable business related expenses
incurred in good faith in the performance of the Director’s duties for the
Company, including, without limitation, the cost of round trip business class
airfare to China from the United States and back at least one time per year for
an in person board meeting.  Such payments shall be made by the
Company upon submission by the Director of a signed statement itemizing the
expenses incurred.  Such statement shall be accompanied by sufficient
documentary matter to support the expenditures.

    

    5.           CONFIDENTIALITY.  The
Company and the Director each acknowledge that, in order for the intents and
purposes of this Agreement to be accomplished, the Director shall necessarily be
obtaining access to certain confidential information concerning the Company and
its affairs, including, but not limited to, business methods, information
systems, financial data and strategic plans which are unique assets of the
Company (as further defined below, the “Confidential Information”) and
that the communication of such Confidential Information to third parties could
irreparably injure the Company and its business.  Accordingly,
Director agrees that, during his association with the Company and thereafter, he
will treat and safeguard as confidential and secret all Confidential Information
received by him at any time and that, without the prior written consent of the
Company, he will not disclose or reveal any of the Confidential Information to
any third party whatsoever or use the same in any manner except in connection
with the business of the Company and in any event in no way harmful to or
competitive with the Company or its business.  For purposes of this
Agreement, “Confidential Information” means any information not generally known
to the public or recognized as standard industry practice, any trade secrets,
know-how, development, manufacturing, marketing and distribution plans and
information, inventions, formulas, methods or processes, whether or not patented
or patentable, pricing policies and records of the Company (and such other
information normally understood to be confidential or otherwise designated as
such in writing by the Company), all of which Director expressly acknowledges
and agrees shall be confidential and proprietary information belonging to the
Company.  Upon termination of his association with the Company,
Director shall return to the Company all documents and papers relating to the
Company, including any Confidential Information, together with any copies
thereof, or certify that he has destroyed all such documents and
papers.  Furthermore, Director recognizes that the Company has
received and in the future will receive confidential or proprietary information
from third parties subject to a duty on the Company’s part to maintain the
confidentiality of such information and, in some cases, to use it only for
certain limited purposes.  Director agrees that Director owes the
Company and such third parties, both during the term of Directors association
with the Company and thereafter, a duty to hold all such confidential or
proprietary information in the strictest confidence and not to, except as is
consistent with the Company’s agreement with the third party, disclose it to any
person or entity or use it for the benefit of anyone other than the Company or
such third party, unless expressly authorized to act otherwise by an officer of
the Company.  Director agrees that his obligations under this Section
5 are necessary and reasonable in order to protect the Company and its business,
and expressly agrees that monetary damages would be inadequate to compensate the
Company for any breach of this Section 5.  Accordingly, Director
agrees and acknowledges that any such violation or threatened violation will
cause irreparable injury to the Company and that, in addition to any other
remedies that may be available, in law, in equity or otherwise, the Company
shall be entitled to seek injunctive relief against the threatened breach of
this Agreement or the continuation of any such breach, without the necessity of
proving actual damages and without the necessity of posting bond or other
security.

    
      
         

      

      
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    6.           TERMINATION.  With
or without cause, the Company and the Director may each terminate this Agreement
at any time upon thirty (30) days written notice, and, provided that such
termination is following the Initial Period, the Company shall be obligated to
pay to the Director the compensation and expenses due up to the date of the
termination.  Nothing contained herein or omitted herefrom shall
prevent the shareholders of the Company from removing the Director with
immediate effect at any time for any reason.

    

    7.           INDEMNIFICATION;
INSURANCE.

    

    (a)           The
Company shall indemnify, defend and hold harmless the Director, to the full
extent allowed by the law of the State of Nevada, and as provided by, or granted
pursuant to, any charter provision, bylaw provision, agreement (including,
without limitation, the Indemnification Agreement executed herewith), vote of
stockholders or disinterested directors or otherwise, both as to action in the
Director’s official capacity and as to action in another capacity relating to
the Company’s business while holding such office.  The Company and the
Director are executing an indemnification agreement in the form attached hereto
as Exhibit
A.

    

    (b)           During
the term of this Agreement the Company shall at all times obtain and maintain a
policy or policies of director and officer liability insurance, in an amount not
less than $3,000,000, of which the Independent Director will be named as an
insured, providing the Independent Director with coverage for all amounts and
expenses arising in any way as a result of Independent Director’s service or
appointment as a director of the Company. The Company shall promptly (and in any
event within 2 business days) notify the Independent Director of any lapse in
coverage under such policy or policies or any material change or modification to
such policy or policies. It being agreed that the Company shall use commercially
reasonable efforts to increase such coverage to $5,000,000 if: (i) the Company
lists on a national exchange or (ii) the Company raises material capital with
third parties through the issuance of securities

    
      
         

      

      
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    8.           AMENDMENTS;
WAIVERS.  No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and the Director or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought.  No waiver of any
breach with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any
subsequent breach or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right.

    

    9.           NOTICES.  All
notices, requests, demands and other communications provided in connection with
this Agreement shall be in writing and shall be deemed to have been duly given
at the time when hand delivered, delivered by express courier, or sent by
facsimile (with receipt confirmed by the sender’s transmitting device) in
accordance with the contact information provided on the signature page hereto or
such other contact information as the parties may have duly provided by
notice.

    

    10.        GOVERNING LAW.  This
Agreement shall be interpreted in accordance with, and the rights of the parties
hereto shall be determined by, the laws of the State of Nevada without reference
to that state’s conflicts of laws principles.

    

    11.        ASSIGNMENT.  The
rights and benefits of the Company under this Agreement shall be transferable,
and all the covenants and agreements hereunder shall inure to the benefit of,
and be enforceable by or against, its successors and assigns.  The
duties and obligations of the Director under this Agreement are personal and
therefore the Director may not assign any right or duty under this Agreement
without the prior written consent of the Company.

    

    12.        MISCELLANEOUS.  If
any provision of this Agreement shall be declared invalid or illegal, for any
reason whatsoever, then, notwithstanding such invalidity or illegality, the
remaining terms and provisions of the this Agreement shall remain in full force
and effect in the same manner as if the invalid or illegal provision had not
been contained herein.

    

    13.        HEADINGS;
CONSTRUCTION.  The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any
party.

    

    14.        NO THIRD-PARTY
BENEFICIARIES.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person or entity.

    

    15.        SEVERABILITY.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

    
      
         

      

      
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    16.        ENTIRE
AGREEMENT.  Subject to the provisions of the NRS and the
Company’s articles of association and bylaws, this Agreement and the exhibit
hereto sets forth the entire agreement of the parties with respect to its
subject matter and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party to this
Agreement with respect to such subject matter.

    

    17.        COUNTERPARTS. This Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one instrument.  Execution and delivery of this Agreement
by facsimile or other electronic signature is legal, valid and binding for all
purposes.

    

    [Signature
Page Follows]

    
      
         

      

      
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    IN WITNESS WHEREOF, the
parties hereto have caused this Independent Director Agreement to be duly
executed and signed as of the day and year first above written.

    

    
      
        
          
            
              
                
                  
                    
                      	
                              BOHAI
      PHARMACEUTICALS GROUP, INC.

                            
	 
      
	
                              By:

                            	
                               

                            
	 
      	
                              Name:
      Hongwei Qu

                            
	 
      	
                              Title: President
      and CEO

                            
	 
      
	
                              Contact
      Information:

                            
	
                              c/o
      Yantai Bohai Pharmaceuticals Group Co. Ltd.

                            
	
                              No.
      9 Daxin Road, Zhifu District

                            
	
                              Yantai,
      Shandong Province, China

                            
	
                              Attention:
      Hongwei Qu

                            
	
                              Fax
      Number: +86-0535-6763559

                            
	 
      
	
                              Independent
      Director

                            
	 
      
	
                               

                            
	
                              Name:

                            
	
                              Contact
      Information:

                            
	
                               

                            
	
                               

                            
	
                               

                            
	
                               

                            

                    

                  

                

              

            

          

        

      

    

     

    
      [Signature Page to Independent
Director Agreement]

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    INDEMNIFICATION
AGREEMENT

    

    This INDEMNIFICATION
AGREEMENT is made as of the _____ day of July, 2010 and is by and
between Bohai Pharmaceuticals Group Inc., a Nevada corporation (the “Company”), and
[                
] (hereinafter referred to as the “Indemnitee”).

    

    WHEREAS, Section 78.7502 of
the Nevada Revised Statutes and the Bylaws of the Company empower the Company to
indemnify its officers and directors and do not, by themselves, limit the extent
to which the Company may indemnify persons serving as its officers and
directors;

    

    WHEREAS, the Indemnitee has
agreed to serve as an independent director of the Company, provided, and on the
expressed condition, that he is furnished with the indemnification provided for
herein;

    

    WHEREAS, the Company believes
that the interest of the Company and its current and future shareholders would
be best served by a combination of: (i) such director and officer liability
insurance as the Company may obtain pursuant to the Company’s obligations
hereunder and (ii) a contract with Indemnitee to indemnify him to the fullest
extent permitted by law (as in effect on the date hereof, or, to the extent any
amendment may expand such permitted indemnification, as hereafter in effect)
against personal liability for actions taken in the performance of his duties to
the Company; and

    

    WHEREAS, the Company and the
Indemnitee desire to enter into this Agreement in order to satisfy the foregoing
premises.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    NOW, THEREFORE, in
consideration for the above recited promises and the mutual promises, agreements
and covenants of the Company and the Indemnitee contained herein, the adequacy
and sufficiency of which are hereby acknowledged, the Company and the Indemnitee
hereby agree as follows:

    

    1.           CERTAIN DEFINITIONS. In addition to the other
capitalized terms defined herein, the following capitalized terms shall have the
following meanings:

    

    (a)           “Expenses” means, for the
purposes of this Agreement, all direct and indirect costs of any type or nature
whatsoever (including, without limitation, any reasonable and customary fees and
expenses of Indemnitee’s counsel, accountants and other experts and other
reasonable and customary out-of-pocket costs) actually and reasonably incurred
by the Indemnitee in connection with the investigation, preparation, defense or
appeal of a Proceeding; provided, however, that Expenses shall not include
judgments, fines, penalties or amounts paid in settlement of a
Proceeding.

    

    (b)           “Proceeding” means, for the
purposes of this Agreement, any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (including
an action brought by or in the right of the Company) in which Indemnitee may be
or may have been involved as a party or otherwise, by reason of the fact that
Indemnitee is or was a director of the Company, by reason of any action taken by
him or of any inaction on his part while acting as such director or by reason of
the fact that he is or was serving at the request of the Company as a director,
officer, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, or was a director or
officer of the foreign or domestic corporation which was a predecessor
corporation to the Company or of another enterprise at the request of such
predecessor corporation, whether or not he is serving in such capacity at the
time any liability or expense is incurred for which indemnification or
reimbursement can be provided under this Agreement.

    

    2.           INDEMNIFICATION.

    

    (a)           THIRD PARTY
PROCEEDINGS.  The Company shall indemnify Indemnitee against
Expenses, judgments, fines, penalties or amounts paid in settlement (if the
settlement is approved in advance by the Company) actually and reasonably
incurred by Indemnitee in connection with a Proceeding (other than a Proceeding
by or in the right of the Company) if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful.  The
termination of any Proceeding by judgment, order, settlement, conviction, or
upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in the best interests of the Company, or,
with respect to any criminal Proceeding, had no reasonable cause to believe that
Indemnitee’s conduct was unlawful.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (b)           PROCEEDINGS BY OR IN THE RIGHT OF THE
COMPANY.  To the fullest extent permitted by law, the Company
shall indemnify Indemnitee against Expenses and amounts paid in settlement,
actually and reasonably incurred by Indemnitee in connection with a Proceeding
by or in the right of the Company to procure a judgment in its favor if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the best interests of the Company and its
shareholders.  Notwithstanding the foregoing, no indemnification shall
be made in respect of any claim, issue or matter as to which Indemnitee shall
have been adjudged liable to the Company in the performance of Indemnitee’s duty
to the Company and its shareholders unless and only to the extent that the court
in which such action or proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnity for expenses and then only to the
extent that the court shall determine.

    
      

      (c)           SCOPE.  Notwithstanding
any other provision of this Agreement but subject to Section 13(b) hereof, the
Company shall indemnify the Indemnitee to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized by
other provisions of this Agreement, the Company’s Amended and Restated Articles
of Incorporation, the Company’s Amended and Restated Bylaws or by
statute.

      

      3.           LIMITATIONS ON
INDEMNIFICATION. Any other provision
herein to the contrary notwithstanding, the Company shall not be obligated
pursuant to the terms of this Agreement:

      

      (a)           EXCLUDED ACTS.  To
indemnify Indemnitee for any acts or omissions or transactions from which a
director may not be relieved of liability under applicable law;

      

      (b)           EXCLUDED INDEMNIFICATION
PAYMENTS.  To indemnify or advance Expenses in violation of any
prohibition or limitation on indemnification under the statutes, regulations or
rules promulgated by any state or federal regulatory agency having jurisdiction
over the Company.

      

      (c)           CLAIMS INITIATED BY
INDEMNITEE.  To indemnify or advance Expenses to Indemnitee
with respect to Proceedings or claims initiated or brought voluntarily by
Indemnitee and not by way of defense, except with respect to proceedings brought
to establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Section 78.7502 of the
Nevada Revised Statutes, but such indemnification or advancement of Expenses may
be provided by the Company in specific cases if the Board of Directors has
approved the initiation or bringing of such suit;

      

      (d)           LACK OF GOOD
FAITH.  To indemnify Indemnitee for any Expenses incurred by
the Indemnitee with respect to any proceeding instituted by Indemnitee to
enforce or  interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was
frivolous;

      

      (e)           INSURED CLAIMS.  To
indemnify Indemnitee for Expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) which have been paid directly to or
on behalf of Indemnitee by an insurance carrier under a policy of directors’ and
officers’ liability insurance maintained by the Company or any other policy of
insurance maintained by the Company or Indemnitee;

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      (f)           CLAIMS UNDER SECTION
16(b).  To indemnify Indemnitee for Expenses and the payment of
profits arising from the purchase and sale by Indemnitee of securities in
violation of Section 16(b) of the Securities Exchange Act of 1934, as amended,
or any similar successor statute.

      

      4.           DETERMINATION OF RIGHT TO
INDEMNIFICATION.  Upon receipt of a written claim addressed to
the Board of Directors for indemnification pursuant to Section 2 hereof, the
Company shall determine by any of the methods set forth in Section 78.751 of the
Nevada Revised Statutes whether Indemnitee has met the applicable standards of
conduct which makes it permissible under applicable law to indemnify
Indemnitee.  If a claim under Section 2 hereof is not paid in full by
the Company within ninety (90) days after such written claim has been received
by the Company, the Indemnitee may at any time thereafter bring suit against the
Company to recover the unpaid amount of the claim and, unless such action is
dismissed by the court as frivolous or brought in bad faith, the Indemnitee
shall be entitled to be paid also the expense of prosecuting such
claim.  The court in which such action is brought shall determine
whether Indemnitee or the Company shall have the burden of proof concerning
whether Indemnitee has or has not met the applicable standard of
conduct.

      

      5.           ADVANCEMENT AND REPAYMENT OF
EXPENSES. Subject to Section 3
hereof, the Expenses incurred by Indemnitee in defending and investigating any
Proceeding shall be paid by the Company in advance of the final disposition of
such Proceeding within 30 days after receiving from Indemnitee the copies of
invoices presented to Indemnitee for such Expenses, if Indemnitee shall provide
an undertaking to the Company to repay such amount to the extent it is
ultimately determined that Indemnitee is not entitled to
indemnification.  In determining whether or not to make an advance
hereunder, the ability of Indemnitee to repay shall not be a
factor.  Notwithstanding the foregoing, in a proceeding brought by the
Company directly, in its own right (as distinguished from an action bought
derivatively or by any receiver or trustee), the Company shall not be required
to make the advances called for hereby if the Board of Directors determines, in
its sole discretion, that it does not appear that Indemnitee has met the
standards of conduct which make it permissible under Applicable law to indemnify
Indemnitee and the advancement of Expenses would not be in the best interests of
the Company and its shareholders.

      

      6.           PARTIAL INDEMNIFICATION. If the Indemnitee is
entitled under any provision of this Agreement to indemnification or advancement
by the Company of some or a portion of any Expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, penalties, and
amounts paid in settlement) incurred by him in the investigation, defense,
settlement or appeal of a Proceeding, but is not entitled to indemnification or
advancement of the total amount thereof, the Company shall nevertheless
indemnify or pay advancements to the Indemnitee for the portion of such Expenses
or liabilities to which the Indemnitee is entitled.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      7.           NOTICE TO COMPANY BY
INDEMNITEE. Indemnitee shall notify
the Company in writing of any matter with respect to which Indemnitee intends to
seek indemnification hereunder as soon as reasonably practicable following the
receipt by Indemnitee of written notice thereof; provided, however, that any
delay in so notifying the Company shall not constitute a waiver by Indemnitee of
her rights hereunder.  The written notification to the Company shall
be addressed to the Board of Directors and shall include a description of the
nature of the Proceeding and the facts underlying the Proceeding and be
accompanied by copies of any documents filed with the court in which the
Proceeding is pending.  In addition, Indemnitee shall give the Company
such information and cooperation as it may reasonably require and as shall be
within Indemnitee’s power.

      

      8.           MAINTENANCE OF LIABILITY
INSURANCE.

      

      (a)           Subject
to Section 3 hereof, the Company hereby agrees that so long as Indemnitee shall
continue to serve as a director or officer of the Company and thereafter so long
as Indemnitee shall be subject to any possible Proceeding, the Company, subject
to Section 8(b) below, shall use reasonable commercial efforts to obtain and
maintain in full force and effect directors’ and officers’ liability insurance
(“D&O Insurance”)
which provides Indemnitee the same rights and benefits as are accorded to the
most favorably insured of the Company’s directors, if Indemnitee is a director;
or of the Company’s officers, if Indemnitee is not a director of the Company but
is an officer.

      

      (b)           Notwithstanding
the foregoing, the Company shall have no obligation to obtain or maintain
D&O Insurance if the Company determines in good faith that such insurance is
not reasonably available, the premium costs for such insurance are
disproportionate to the amount of coverage provided, the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or the Indemnitee is covered by similar insurance maintained by a
subsidiary or parent of the Company.

      

      (c)           If,
at the time of the receipt of a notice of a claim pursuant to Section 7 hereof
hereof, the Company has D&O Insurance in effect, the Company shall give
prompt notice of the commencement of such Proceeding to the insurers in
accordance with the procedures set forth in the respective
policies.  The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such Proceeding in accordance with the terms of
such policies.

      

      9.           DEFENSE OF CLAIM. In the event that the
Company shall be obligated under Section 5 hereof to pay the Expenses of any
Proceeding against Indemnitee, the Company, if appropriate, shall be entitled to
assume the defense of such Proceeding, with counsel approved by Indemnitee,
which approval shall not be unreasonably withheld, upon the delivery to
Indemnitee of written notice of its election to do so.  After delivery
of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same Proceeding, provided that: (i) Indemnitee shall have the
right to employ his counsel in any such Proceeding at Indemnitee’s expense; and
(ii) if (A) the employment of counsel by Indemnitee has been previously
authorized by the Company, or (B) Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
in the conduct of such defense or (C) the Company shall not, in fact, have
employed counsel to assume the defense of such Proceeding, then the fees and
expenses of Indemnitee’s counsel shall be at the expense of the
Company.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      10.         ATTORNEYS’ FEES. In the event that
Indemnitee or the Company institutes an action to enforce or interpret any terms
of this Agreement, the Company shall reimburse Indemnitee for all of the
Indemnitee’s reasonable fees and expenses in bringing and pursuing such action
or defense, unless as part of such action or defense, a court of competent
jurisdiction determines that the material assertions made by Indemnitee as a
basis for such action or defense were not made in good faith or were
frivolous.

      

      11.        CONTINUATION OF
OBLIGATIONS. All agreements and
obligations of the Company contained herein shall continue during the period the
Indemnitee is a director or officer of the Company, or is or was serving at the
request of the Company as a director, officer, fiduciary, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, and
shall continue thereafter so long as the Indemnitee shall be subject to any
possible proceeding by reason of the fact that Indemnitee served in any capacity
referred to herein.

      

      12.        SUCCESSORS AND ASSIGNS. This Agreement
establishes contract rights that shall be binding upon, and shall inure to the
benefit of, the successors, assigns, heirs and legal representatives of the
parties hereto.

      

      13.   
     NON-EXCLUSIVITY.

      

      (a)           The
provisions for indemnification and advancement of expenses set forth in this
Agreement shall not be deemed to be exclusive of any other rights that the
Indemnitee may have under any provision of law, the Company’s Amended Articles
of Incorporation or Amended and Restated Bylaws, the vote of the Company’s
shareholders or disinterested directors, other agreements or otherwise, both as
to action in her official capacity and action in another capacity while
occupying her position as a director or officer of the Company.

      

      (b)           In
the event of any changes, after the date of this Agreement, in any applicable
law, statute, or rule which expand the right of a Nevada corporation to
indemnify its officers and directors, the Indemnitee’s rights and the Company’s
obligations under this Agreement shall be expanded to the full extent permitted
by such changes.  In the event of any changes in any applicable law,
statute or rule, which narrow the right of a Nevada corporation to indemnify a
director or officer, such changes, to the extent not otherwise required by such
law, statute or rule to be applied to this Agreement, shall have no effect on
this Agreement or the parties’ rights and obligations hereunder.

      

      14.         EFFECTIVENESS OF
AGREEMENT. To the extent that the
indemnification permitted under the terms of certain provisions of this
Agreement exceeds the scope of the indemnification provided for in the Nevada
Revised Statutes, such provisions shall not be effective unless and until the
Company’s Articles of Incorporation authorize such additional rights of
indemnification.  In all other respects, the balance of this Agreement
shall be effective as of the date set forth on the first page and may apply to
acts of omissions of Indemnitee which occurred prior to such date if Indemnitee
was an officer, director, employee or other agent of the Company, or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, at
the time such act or omission occurred.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      15.         SEVERABILITY. Nothing in this
Agreement is intended to require or shall be construed as requiring the Company
to do or fail to do any act in violation of applicable law.  The
Company’s inability,  pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement.  The provisions of this Agreement shall be severable as
provided in this Section 15.  If this Agreement or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Company shall nevertheless indemnify Indemnitee to the full extent permitted
by any applicable portion of this Agreement that shall not have been
invalidated, and the balance of this Agreement not so invalidated shall be
enforceable in accordance with its terms.

      

      16.         GOVERNING LAW. This Agreement shall be
interpreted and enforced in accordance with the laws of the State of Nevada,
without reference to its conflict of law principals.  To the extent
permitted by applicable law, the parties hereby waive any provisions of law
which render any provision of this Agreement unenforceable in any
respect.

      

      17.         NOTICES. All notices, requests,
demands and other communications provided in connection with this Agreement
shall be in writing and shall be deemed to have been duly given at the time when
hand delivered, delivered by express courier, or sent by facsimile (with receipt
confirmed by the sender’s transmitting device) in accordance with the contact
information provided on the signature page hereto or such other contact
information as the parties may have duly provided by notice.

      

      18.         MUTUAL ACKNOWLEDGMENT. Both the Company and
Indemnitee acknowledge that in certain instances, federal law or applicable
public policy may prohibit the Company from indemnifying its directors and
officers under this Agreement or otherwise.  Indemnitee understands
and acknowledges that the Company has undertaken or may be required in the
future to undertake with the appropriate state or federal regulatory agency to
submit for approval any request for indemnification, and has undertaken or may
be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company’s right under public policy to
indemnify Indemnitee.

      

      19.         COUNTERPARTS. This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one instrument.  Facsimile execution and
delivery of this Agreement is legal, valid and binding for all
purposes.

      

      20.         AMENDMENT AND
TERMINATION. No amendment,
modification, termination or cancellation of this Agreement shall be effective
unless in writing signed by both parties hereto.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      [Signature
Page Follows]

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      IN WITNESS WHEREOF, the
parties hereto have caused this Indemnification Agreement to be duly executed
and signed as of the day and year first above written.

      

      
        
          
            
              
                
                  
                    	 
      	
                            BOHAI
      PHARMACEUTICALS GROUP, INC.

                          
	 
      	 
      	 
      
	 
      	
                            By: 

                          	 
      
	 
      	 
      	
                            Name: 
      Hongwei Qu

                          
	 
      	 
      	
                            Title:   
      President and CEO总裁

                          
	 
      	 
      	 
      
	 
      	 
      	
                            Contact
      Information:

                          
	 
      	 
      	
                            c/o
      Yantai Bohai Pharmaceuticals Group Co. Ltd.

                          
	 
      	 
      	
                            No.
      9 Daxin Road, Zhifu District

                          
	 
      	 
      	
                            Yantai,
      Shandong Province, China

                          
	 
      	 
      	
                            Attention:
      Hongwei Qu

                          
	 
      	 
      	
                            Fax
      Number: +86-0535-6763559

                          
	 
      	 
      	 
      
	 
      	
                            Director:Unassociated Document

     

    
      EXHIBIT
10.1

      English
Summary of the Conditional Disposal Agreement

      

      DATE:  July 10,
2010

      

      

      JINHENG
AUTOMOTIVE SAFETY TECHNOLOGY HOLDINGS LIMITED

      (as
the Seller)

      

      

      And

      

      

      VITAL
GLEE DEVELOPMENT LIMITED

      (as
the Buyer)

      

      

      

      

      
        
          

        

      CONDITIONAL
DISPOSAL AGREEMENT

      

      re

      

      Shares
of

      

      JINHENG
(BVI) LIMITED

       

      
 

      
        
          

        

       

    

    
 

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    Index

    

    
      
        
          
            
              
                
                  
                    
                      	
                              Clause
      No.

                            	 
      	
                              Headings

                            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                              1

                            	 
      	
                              Interpretation

                            	 
      	
                              3

                            
	
                              2

                            	 
      	
                              Purchase
      and Sales of Shares

                            	 
      	
                              6

                            
	
                              3

                            	 
      	
                              Pre-conditions

                            	 
      	
                              7

                            
	
                              4

                            	 
      	
                              Consideration

                            	 
      	
                              8

                            
	
                              5

                            	 
      	
                              Completion
      of Transaction

                            	 
      	
                              9

                            
	
                              6

                            	 
      	
                              Warranties
      & Covenants

                            	 
      	
                              10
      

                            
	
                              7

                            	 
      	
                              Confidentiality

                            	 
      	
                              10
      

                            
	
                              8

                            	 
      	
                              Other
      Warrants

                            	 
      	
                              11
      

                            
	
                              9

                            	 
      	
                              Notification

                            	 
      	
                              11
      

                            
	
                              10

                            	 
      	
                              Time
      and No Waiver

                            	 
      	
                              11
      

                            
	
                              11

                            	 
      	
                              Partial
      Default

                            	 
      	
                              11
      

                            
	
                              12

                            	 
      	
                              Revision

                            	 
      	
                              11
      

                            
	
                              13

                            	 
      	
                              Consignment

                            	 
      	
                              12
      

                            
	
                              14

                            	 
      	
                              Integration
      of Agreement

                            	 
      	
                              12
      

                            
	
                              15

                            	 
      	
                              Cost,
      Expense and Taxes

                            	 
      	
                              12
      

                            
	
                              16

                            	 
      	
                              Duplicates

                            	 
      	
                              12
      

                            
	
                              17

                            	 
      	
                              Governing
      Law, Jurisdiction and receiving Agent

                            	 
      	
                              12

                            

                    

                  

                

              

            

          

           

          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        Attachment
      I –

                                      	 
      	
                                        Part
      A: Description of the company

                                      	 
      	 
      
	 
      	 
      	
                                        Part
      B: Description of the affiliate companies

                                      	 
      	 
      
	
                                        Attachment
      II –

                                      	 
      	
                                        Related
      Warranties

                                      	 
      	 
      
	
                                        Attachment
      III –

                                      	 
      	
                                        Part
      A: No.1 Promissory Note

                                      	 
      	 
      
	 
      	 
      	
                                        Part
      B: No.2 Promissory Note

                                      	 
      	 
      
	 
      	 
      	
                                        Part
      C: No. 3 Promissory Note

                                      	 
      	 
      
	
                                        Attachment
      IV –

                                      	 
      	
                                        Share
      Pledge Agreement

                                      	 
      	 
      
	
                                        Attachment
      V –

                                      	 
      	
                                        Trademark
      License Agreement

                                      	 
      	 
      
	
                                        Attachment
      VI –

                                      	 
      	
                                        Part
      A: Great Idea Supply Agreement

                                      	 
      	 
      
	 
      	 
      	
                                        Part
      B: Winner Supply Agreement

                                      	 
      	 
      
	
                                        Attachment
      VII –

                                      	 
      	
                                        Waiver
      Agreement

                                      	 
      	 
      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      This
Conditional Disposal Agreement is signed by the Parties below on the 10th day of
July, 2010:

      

      Between:
Jinheng Automotive Safety
Technology Holdings Limited, a corporation duly formed under the laws of
Carman Islands with its legal address at Cricket Square, Hutchins Drive, P.O.
Box 2681, Grand Cayman KY1-1111, Cayman Islands, and its Hong Kong business
address at Unit 605, 6/F, Beautiful Group Tower, 74-77, Connaught Road Central,
Central, Hong Kong (hereinafter referred to as the “Seller”);

      

      And:
VITAL GLEE DEVELOPMENT
LIMITED, a corporation duly formed under the laws of the British Virgin
Islands with its legal address at P.O. Box 438, Offshore Incorporations Centre,
Road Town, Tortola, British Virgin Islands (hereinafter referred herein to as
the “Purchaser” or “Buyer”);

      

      WHEREAS,

      
        	
                (i)  

              	
                Jinheng
      (BVI) Limited (“Company”) is a corporation duly formed under the laws of
      the British Virgin Islands with its legal address at P.O.Box 957, Offshore
      Incorporations Centre, Road Town, Tortola, British Virgin Islands. At the
      date of this Agreement, the legal capital of the Company is HK$1,000.00
      divided into 100,000 common shares (“Shares”) with a par value of HK$0.01,
      of which 10,309 shares have been issued (“Selling Shares”) and wholly
      owned by the Seller. The Seller is willing to sell his Shares to the Buyer
      According to terms of this Agreement. Further details of the Company will
      be presented in Appendix 1 (a) of this
  Agreement.

              

      

      

      
        	
                (ii)  

              	
                (ii)
      under the terms and stipulations of this Agreement, the Seller is willing
      to sell, and the Buyer is willing to purchase the Selling
      Shares.

              

      

      

      NOW,
THEREFORE, the Parties reached the following agreements:

      

      
        1.    Definitions

      

      

      
        	
                1.1  

              	
                Unless
      otherwise set forth, the terms below shall have the meanings as set out
      hereunder in the context of this Agreement (including its preface and its
      appendixes):

              

      

       

      
        
          	
                  “Accounting
      Date”

                	
                  31
      May, 2010

                
	 
      	 
      
	
                  “Applaud”

                	
                  Applaud
      Group Limited, a corporation duly formed under the laws of British Virgin
      Islands with its legal address at P.O.Box 957, Offshore Incorporations
      Centre, Road Town, Tortola, British Virgin Islands. At the date of this
      Agreement, the Applaud owns 231,530,000 shares of the Seller,
      approximately 48.58% of the total outstanding shares of the
      Seller.

                
	 
      	 
      
	
                  “Applaud
      Agreement”

                	
                  the
      conditional sale and purchase agreement dated 10 July 2010 and entered
      into among Wonder Auto and Yearcity as vendors and Jin Ying as purchaser
      in relation to the sale and purchase of the Applaud
  Shares

                
	 
      	 
      
	
                  “associate(s)”

                	
                  has
      the meaning ascribed thereto in the Listing Rules

                
	 
      	 
      
	
                  “Business
      Day(s)”

                	
                  a
      day on which licensed banks in Hong Kong are open for normal banking
      business throughout their normal business hours (excluding Saturdays,
      Sundays and public holidays)

                
	 
      	 
      
	
                  “Completion”

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

                
	 
      	 
      
	
                  “Completion
      Date”

                	
                  the
      seventh (7th) Business Days after all the Conditions Precedent have been
      fulfilled (or such later date as the parties to the Disposal Agreement may
      agree in writing)

                
	 
      	 
      
	
                  “Lien”

                	
                  referring
      to all liens, encumbrance, pledge, priority, guarantee and other various
      liabilities in connection of the abovementioned
  agreements

                
	 
      	 
      
	
                  “First
      Promissory Note”

                	
                  the
      non-interest bearing promissory note in the principal amount of
      HK$169,500,000 which is due on the 30th day after the Completion Date to
      be executed by the Purchaser for the purpose of settling part of
      the  consideration for the Selling Shares, in form set forth in
      Attachment III

                

        

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        
          	
                  “Group”

                	
                  the
      company and its subsidiaries

                
	 
      	 
      
	
                  “Group
      Company”

                	
                  any
      company in the Group

                
	 
      	 
      
	
                  “Hong
      Kong”

                	
                  the
      Hong Kong special admin. zone of China

                
	 
      	 
      
	
                  “Listing
      Rules”

                	
                  the
      rules governing the listing of securities on the stock
      exchange

                
	 
      	 
      
	
                  “Management
      Book”

                	
                  the
      balance sheet and income statement from January 1, 2010 to the end of
      fiscal period, a copy of which is attached to this
    Agreement.

                
	 
      	 
      
	
                  “China”

                	
                  P.R.
      China (for purpose of this agreement, excluding Hong Kong and
      Macao)

                
	 
      	 
      
	
                  “Group
      Restructure”

                	
                  the
      restructuring to be conducted immediately after execution of this
      Agreement pursuant to which the relevant Group Company shall transfer all
      of its ownership of Shanxi Winner Auto-Parts Limited and Shenyang Jinheng
      Jinsida Automobile Electronic Co., Ltd. and shareholder loan (if any) to
      the Seller (or its designated wholly-owned subsidiary).

                
	 
      	 
      
	
                  “First
      Promissory Note”

                	
                  the
      non-interest bearing promissory note in the principal amount of
      HK$169,500,000 which is due on the 180th day after the Completion Date to
      be executed by the Purchaser for the purpose of settling part of
      the  consideration for the Selling Shares, in form set forth in
      Attachment III Part A

                
	 
      	 
      
	
                  “SEC”

                	
                  the
      SEC of Hong Kong Stock Exchange

                
	 
      	 
      
	
                  “Sellers’
      Shareholders”

                	
                  the
      shareholder of the Seller

                
	 
      	 
      
	
                  “Stock
      Exchange”

                	
                  the
      Stock Exchange of Hong Kong Limited

                
	 
      	 
      
	
                  “Affiliated
      Company”

                	
                  refer
      to the subsidiaries after the Group Restructure, the detail of which is
      set forth in Appendix 1. For the avoidance of doubt, Affiliated Company
      does not include Shanxi Winner Auto-Parts Limited and Shenyang Jinheng
      Jinsida Automobile Electronic Co., Ltd.

                
	 
      	 
      
	
                  “Supply
      Agreements”

                	
                  collectively,
      the Great Idea Supply Agreement and the Winner Supply
      Agreement

                

        

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        
          	
                  “Great
      Idea Supply Agreement”

                	
                  the
      supply agreement between Beijing Jinheng Great Idea Auto Electronic System
      Limited and Jinzhou Jinheng Auto Safety System Limited (one of the group
      company) stipulating the supply relationship engaging from the completion
      of the transaction to December 31, 2012. Details of the supply agreement
      is set forth in Attachment VI Part A

                
	 
      	 
      
	
                  “Winner
      Supply Agreement”

                	
                  the
      supply agreement between Shanxi Winner Auto Parts Limited and Jinzhou
      Jinheng Auto Safety System Limited (one of the group company) stipulating
      the supply relationship engaging from the completion of the transaction to
      December 31, 2012. Details of the supply agreement is set forth in
      Attachment VI Part B

                
	 
      	 
      
	
                  “Third
      Promissory Note”

                	
                  the
      non-interest bearing promissory note in the principal amount of
      HK$452,000,000 which is due on the 180th day after the Completion Date to
      be executed by the Purchaser for the purpose of settling part of
      the  consideration for the Selling Shares, in form set forth in
      Attachment III Part B

                
	 
      	 
      
	
                  “Trademark
      License Agreement”

                	
                  the
      trademark agreement signed between group company and its subsidiaries for
      the using right. Please see Attachment V

                
	 
      	 
      
	
                  “This
      Agreement”

                	
                  The
      agreement set forth for the selling and purchasing of the selling
      shares

                
	 
      	 
      
	
                  “Relevant
      Warranties”

                	
                  The
      warranties listed in Attachment III regarding the descriptions, warranties
      and convents stipulated in this Agreement

                
	 
      	 
      
	
                  “Share
      Pledge Agreement”

                	
                  the
      Share Pledge Agreement signed upon the date of completion of the
      transaction, please see Attachment IV

                
	 
      	 
      
	
                  “Seller’s
      Shareholder Special Meeting”

                	
                  A
      shareholders meeting called in accord with the stipulation set forth in
      clause 4.1

                
	 
      	 
      
	
                  “Second
      Promissory Note”

                	
                  the
      non-interest bearing promissory note in the principal amount of
      HK$169,500,000 which is due on the 180th day after the Completion Date to
      be executed by the Purchaser for the purpose of settling part of
      the  consideration for the Selling Shares, in form set forth in
      Attachment III Part C

                

        

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

        
          	
                  “Waiver
      Agreement”

                	
                  the
      waiver agreement between the company and its affiliates (not including
      Shanxi Winner Auto Parts Company and the Shenyang Jinheng Jinsida Auto
      Electronic System Company), please see the Attachment
  VII

                
	 
      	 
      
	
                  “HK$”

                	
                  Hong
      Kong dollars, the lawful currency of Hong Kong

                
	 
      	 
      
	
                  “US$”

                	
                  United
      States dollars, the lawful currency of the United States of
      America

                
	 
      	 
      
	
                  “%”

                	
                  per
      cent.

                

        

      

       

      
        
          	
                  1.2

                	
                  Except
      otherwise defined, all terms in this Agreement have the same meaning
      stipulated.

                

        

      

      

      
        	
                1.3 

              	
                The
      title of this Agreement has no influence to nature of this
      Agreement.

              

      

      

      
        
          	
                  1.4

                	
                  Any
      insertion of contents and clauses of this Agreement shall not have the
      same legal effect as this
Agreement.

                

        

      

      

      
        	
                1.5

              	
                Except
      otherwise stipulated, any clause, table or appendix is referred to from
      this Agreement.

              

      

      

      
        	
                1.6

              	
                The
      regulations, rules and other laws are in connection with the timely
      updates of themselves.

              

      

       

      2.    Purchase and Sales of the
Selling Shares

      

      
        	
                2.1

              	
                Subject
      to the terms and conditions of this Agreement, the Seller, as the legal
      and beneficial owner of the Selling Shares, hereby agree to sell the
      Selling Shares and the Buyer agrees to buy the Selling Shares. The Selling
      Shares shall not be subject to any Lien and shall have all rights attached
      to the Selling Shares upon the Completion, including rights to all
      dividends declared or paid after the Completion
  Date.

              

      

      

      
        	
                2.2

              	
                Unless
      all Selling Shares are sold at the same time, the Seller has no obligation
      to sell any Selling Shares.

              

      

      

      
        	
                2.3

              	
                Upon
      the Completion of the transaction hereunder, the Buyer shall have all
      rights to the Selling Share and the Company’s assets and be liable for all
      liability of the Company, including all equity interest of the Company’s
      direct or indirect subsidiaries, but excluding any equity interest in and
      shareholder loan (if any) of Shanxi Winner Auto-Parts Limited (“Shaxi
      Winner”) or Shenyang Jinheng Jinsida Automobile Electronic Co., Ltd.
      (“Jinsida”). The Buyer hereby covenants to cause the Group to complete the
      Group Restructure, the Seller shall have all rights and be liable for all
      liability or losses of Shanxi Winner and Jinsida during the period after
      the signing of this Agreement and before the completion of the Group
      Restructure.

              

      

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      

      
        	
                2.4

              	
                The
      Buyer shall prepare an appraisal report of the asset of the
      Group.

              

      

      

      3.    CONSIDERATION

      

      
        	
                3.1

              	
                The
      total consideration for the Selling Shares is HK$1,130,000,000。

              

      

      

      
        	
                3.2

              	
                The
      total onsideration shall be paid by the Purchaser in the following
      manner:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                a
      sum of HK$339,000,000, (the “Initial Payment and Deposit”), shall be paid
      by the Purchaser within seven calendar days after the date of fulfilment
      of all conditions set forth in section 4.1 (a) to (e)
    below;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                a
      sum of HK$169,500,000 shall be satisfied by the Purchaser by issuing the
      First Promissory Note upon
Completion;

              

      

      

      
        	
                 
      

              	
                (3)

              	
                a
      sum of HK$169,500,000 shall be satisfied by the Purchaser by issuing the
      Second Promissory Note upon Completion;
and

              

      

      

      
        	
                 
      

              	
                (4)

              	
                the
      balance of a sum of HK$452,000,000 shall be satisfied by the Purchaser by
      issuing the Third Promissory Note upon
  Completion.

              

      

       

      
        	
                3.3

              	
                Under
      Section 3.2(1), the Buyer shall deliver a check equal to the Initial
      Payment and Deposit on the date set forth
  thereunder.

              

      

      

      
        	
                3.4

              	
                As
      part of the Buyer’s obligation under Section 3.2 (2) to (4), the Buyer
      shall execute the Share Pledge Agreement and deliver the relevant
      documents as set forth in Section 5.4(4) on the Completion
      Date.

              

      

      

      
        	
                3.5

              	
                The
      Seller shall send its confirmation on receipt of the payments within three
      Business Days.

              

      

      

      
        	
                3.6

              	
                After
      the Completion of the transaction hereunder, any amount paid by the
      Purchaser under this Agreement (including but not limited to the Initial
      Payment and Deposit) shall be non-refundable in any
  event.

              

      

      

      
        	
                3.7

              	
                If
      Completion does not take place or the
      Conditions Precedent have not been fulfilled as a result of the sole
      default of the Purchaser, the Seller shall have right to the Initial
      Payment and Deposit, and neither party shall have any obligations and
      liabilities hereunder and neither party shall take any action to claim for
      damages or to enforce specific performance or any other rights and
      remedies.

              

      

      

      
        	
                3.8

              	
                If
      Completion does not take place or the conditions precedent have not been
      fulfilled as a result of the sole default of the Seller, the Seller shall
      refund the Initial Payment and Deposit to the Purchaser and neither party
      shall have any obligations and liabilities hereunder and neither party
      shall take any action to claim for damages or to enforce specific
      performance or any other rights and
remedies.

              

      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
        	
                3.9

              	
                If
      Completion does not take place or the conditions precedent have not been
      fulfilled other than due to the default of either the Purchaser or the
      Seller, the Seller shall refund the Initial Payment and Deposit to the
      Purchaser, and neither party shall have any obligations and liabilities
      hereunder and neither party shall take any action to claim for damages or
      to enforce specific performance or any other rights and
      remedies.

              

      

       

      4.    Conditions
Precedent

      

      
        	
                4.1  

              	
                The
      completion of the transaction contemplated hereunder is conditional upon
      the following conditions being
satisfied:

              

      

      

      
        
          	
                	
                  (1) 

                	
                  the
      passing by the shareholders of the Seller at the special shareholder
      meeting of the Seller of the necessary resolution to approve (i) this
      Agreement and the transactions contemplated hereunder, including but not
      limited to the Trademark License Agreement; (ii) the Supply Agreements and
      transactions contemplated thereunder; (iii) payment of special cash
      dividend of no less than HK$1.00 per share to the Seller’s
      shareholders.

                

        

      

      

      
        
          	
                	
                  (2) 

                	
                  The
      Buyer’s board shall have approved (i) this Agreement and the transactions
      contemplated hereunder; (ii) the Supply Agreements and the transactions
      contemplated thereunder; and (iii) the Trade License Agreement and the
      transactions contemplated
thereunder.

                

        

      

      

      
        
          	
                	
                  (3) 

                	
                  the
      Seller, the Purchaser and the Company have each received the approval or
      consent required for the transfer of the Selling Shares contemplated
      hereunder.

                

        

      

      

      
        
          	
                	
                  (4) 

                	
                  All
      conditions for the closing of the Applaud Agreement have been satisfied
      (save for the condition for this Agreement to become unconditional);;

                

        

      

      

      
        
          	
                	
                  (5) 

                	
                  The
      parties have entered into the Trademark Licence Agreement;
    and

                

        

      

      

      
        
          	
                	
                  (6) 

                	
                  the
      payment of the Initial Payment and Deposit by the Purchaser under Section
      3.2(1).

                

        

      

      

      
        
          	
                  4.2 

                	
                  The
      Seller and the Buyer shall use its best efforts to cause the satisfaction
      of the conditions set forth in Section 4.1, including provision of
      required documents and materials to the Seller, Stock Exchange, SEC and
      other government authorities.

                

        

      

      

      
        	
                4.3

              	
                If
      the above conditions have not been satisfied on or before September 30,
      2010 or such later date as the parties may agree in writing, neither
      parties shall be bound to proceed with the sale and purchase of the
      Selling Shares and the outstanding obligations under this Agreement shall
      cease to be of any effect (except for sections 7, 9, 15 and 17 which shall
      remain enforceable).

              

      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      5.     Completion
of Transaction

      

      
        	
                5.1

              	
                Completion
      shall take place on the seventh Business Day after the date of
      fulfillment of all the conditions set forth in Section 4.1 hereof or such
      other date as the parties may mutually
agree.

              

      

       

      
        	
                5.2 

              	
                The
      following documents shall be delivered by the Seller to the
      Buyer:

              

      

      

      
        	  	
                (1) 

              	
                the
      documents necessary for the transfer of the Selling Shares to the Buyer
      signed by the Seller;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                other
      documents relevant to the transfer of the interest of the Selling
      Shares;

              

      

      

      
        	
                 
      

              	
                (3)

              	
                the
      registration and other corporate
documents;

              

      

      

      
        	
                 
      

              	
                (4)

              	
                the
      record of corporation, shareholder list, directors list, and other
      documents in related with this
transaction;

              

      

      

      
        	
                 
      

              	
                (5)

              	
                the
      resignation letter of all directors of the Group, and if subsidiary of the
      Group, all directors designated by the
Group;

              

      

      

      
        	
                 
      

              	
                (6)

              	
                the
      board resolution signed by a director of the
  Seller;

              

      

      

      
        	
                 
      

              	
                (7)

              	
                the
      copy of the shareholders approval stipulated in clause 4.1,
      and

              

      

      

      
        	
                 
      

              	
                (8)

              	
                the
      Waiver Deed signed by the Seller and the
Company

              

      

      

      
        	
                 
      

              	
                5.3

              	
                The
      Seller shall cause its board to hold a board meeting and approve the
      followings:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                to
      approve the transaction of the Selling Shares to the Buyer and the
      relevant registration for such
transfer;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                to
      accept resignation of all directors as set forth in clause 5.2(5),
      and

              

      

      

      
        	
                 
      

              	
                (3)

              	
                to
      change the bank account and signature in accord with requirement from the
      Buyer.

              

      

      

      
        	
                5.4 

              	
                The
      Buyer shall provide the following documents upon completion of the
      transaction:

              

      

      

      
        	  
    	
                (1) 

              	
                the
      documents necessary for the transfer of the Selling Shares to the Buyer
      signed by the Buyer;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                the
      board resolution signed by a director of the
  Seller;

              

      

      

      
        	
                 
      

              	
                (3)

              	
                other
      documents stipulated in clause 3.2(2), (3) and
  (4);

              

      

      

      
        	
                 
      

              	
                (4)

              	
                the
      promissory notes, and

              

      

      

      
        
          	  
    	
                  (5) 

                	
                  the
      board minutes for approval of the Trademark License Agreement, and/or
      Supplier Agreements and transactions contemplated
    thereunder.

                

        

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
        	
                5.5

              	
                In
      case the Buyer could not meet the requirements stipulated in clause 5.4,
      the Seller may:

              

      

      

      
        
          	
                	
                  (1) 

                	
                  postpone
      the completion of the transaction up to 28 day,
  or

                

        

      

      

      
        
          	
                	
                  (2) 

                	
                  perform
      its obligation under the Agreement,
or

                

        

      

      

      
        
          	
                	
                  (3) 

                	
                  terminate
      this Agreement without any
liabilities.

                

        

      

      

      6.     Warranties
& Covenants

      

      
        	
                6.1

              	
                The
      Seller represents and warranties that the representations and warranties
      stipulated in the Appendix 2 are accurate and
  true.

              

      

      

      
        	
                6.2

              	
                The
      Seller hereby covenants that it will use its reasonable best efforts to
      ensure no material change to the board and senior management of the Group
      (except for changes agreed upon by both parties or self-initiated
      resignation by such person) within 12 months after the Completion
      Date.

              

      

      

      
        
          	
                  6.3

                	
                  The
      Seller hereby covenants that, within 3 years after the Completion Date,
      the Seller will not and will cause its affiliates not to, directly or
      indirectly, engage in the promotion, sale, distribution or supply of
      automobile airbags and safety belts (excluding the supply of parties
      therefor) in China and any other
areas.

                

        

      

      

      
        	
                6.4

              	
                The
      Seller hereby covenants that it shall promptly conduct the Group
      Restructure after the signing of this Agreement. The Seller shall and
      causes its subsidiaries to execute all documents necessary for the Group
      Restructure, the content of which shall be satisfactory to the Buyer to
      the extent not to the detriment to the
Seller.

              

      

      

      
        	
                6.5

              	
                Each
      of the Seller (if applicable, through its independent director committee)
      and the Buyer covenants to the other party that, before the Buyer publish
      this Agreement and the transactions contemplated hereunder according to
      the Listing Rules, it will obtain a fairness opinion issued by an
      independent third party indicating this Agreement and the transactions
      contemplated hereunder are fair and reasonable to the respective party.
      The Seller and the Buyer shall provide a copy of such fairness opinion to
      the other party as soon as
possible.

              

      

      

      7.    Confidentiality

      

      
        	
                7.1

              	
                Except
      otherwise agreed by the other parties, or required by laws and
      regulations, the Parties of this Agreement shall not make public
      announcement, press release or other public disclosures
      allowed.

              

      

      

      
        	
                7.2

              	
                No
      disclosure of any information of this Agreement to persons other than the
      persons involved in the preparation and implementation of this
      transaction.

              

      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      8.    Other
Warranties

      

      
        
          	
                  8.1

                	
                  The
      Seller shall execute or cause other person to execute documents and take
      actions necessary for the transfer of the Selling
  Shares.

                

        

      

      

      
        	
                8.2

              	
                Before
      the Buyer performs its obligation stipulated in clause 3.2(2), (3) and (4)
      and its obligations under the Promissory Notes, the Buyer shall have no
      right to any distribution or payment to the Company’s shareholders through
      distribution, return of capital, repayment of shareholder loan or other
      methods.

              

      

      

      9.    Notification

      

      
        	
                9.1

              	
                All
      related notifications shall be sent to the following
      addresses:

              

      

       

       

                      To the Seller:     Jinheng Auto
Safety Technology Holdings Limited

      
        
          	 
      	
                  add.

                	
                  :

                	
                  Unit
      605, 6/F, Beautiful Group Tower, 74-77,

                  Connaught
      Road Central, Central, Hong Kong

                
	 
      	
                  fax

                	
                  :

                	
                  852-2542
      0280

                
	 
      	
                  attn

                	
                  :

                	
                  Tianzhong
      Fu

                
	 
      	 
      	 
      	 
      

        

      

       

       

                      To the Buyer:    Vital Glee
Development Limited

      
        
          	 
      	
                  add.

                	
                  :

                	
                  No.56,
      Lingxi Avenue, Taihe District,

                  Jinzhou
      City, Liaoling Province, The PRC

                
	 
      	
                  fax

                	
                  :

                	
                  86-416-2669641

                
	 
      	
                  attn

                	
                  :

                	
                  the
      Board

                

        

      
        	
                9.2

              	
                All
      notifications shall be delivered to the indicated addresses by (i) post
      mail, (ii) personal delivery, and  (iii)
  fax.

              

      

      

      
        
          	
                  9.3

                	
                  The
      Seller irrevocably appoints Mr. Tianzhong Fu to receive all documents and
      notifications of this
transaction.

                

        

      

      

      10.   Time and
No Waiver

      

      
        
          	
                  10.1

                	
                  Time
      is of essence in this Agreement, while no delay or waiver of obligations
      of the other party in case of one party no implementation or delay its
      implementation of this
Agreement.

                

        

      

      

      11.   Partial
Default

      

      
        
          	
                  11.1

                	
                  The
      effectiveness, validity and enforceability of other clauses in this
      Agreement shall not be swayed by any jurisdiction
  changes.

                

        

      

      

      12.           Revision

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
        	
                12.1

              	
                No
      revision, supplement or change be made other than signed by both parties
      of this Agreement.

              

      

      

      
        13.   Transfer

      

      

      
        	
                13.1

              	
                No
      transfer of this Agreement without pre-consent of the other
      party.

              

      

      

      14.   Integrate
of Agreement

      

      
        	
                14.1

              	
                This
      Agreement is the final in replace any previous contracts, arrangements,
      statements or transactions between the
parties.

              

      

      

      
        15.   Cost,
Expense and Taxes

      

      

      
        	
                15.1

              	
                The
      parties agreed to bear its own expenses incurred during the preparation,
      discussion and implementation of this
Agreement.

              

      

      

      
        	
                15.2

              	
                The
      taxes applied to the transaction under this Agreement shall be borne by
      the Seller and The Buyer itself.

              

      

      

      16.   Duplicates

      

      
        	
                16.1

              	
                This
      Agreement may be duplicated in any amount for signature. And all signed
      copies shall be deemed as parts of the integration of this
      Agreement.

              

      

      

      17.   Governing Laws and
Jurisdictions

      

      
        	
                17.1 

              	
                This
      Agreement is governed by Hong Kong
laws.

              

      

      

      
        	
                17.2 

              	
                All
      parties of this Agreement is under the jurisdiction of Hong Kong
      Court.

              

      

      

      18.   Language of This
Agreement

      

      
        	
                18.1

              	
                This
      Agreement is written in
Chinese.

              

      

    

    
 

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    
      Attachment
I

    

    

    
      Part A: Company
Details

    

    

    
      
        
          	
                  Company

                	
                  :

                	
                  Jinheng
      (BVI) Limited

                       
      

                
	
                  Register

                	
                  :

                	
                  British
      Virgin Islands

                       
      

                
	
                  Registration
      No.

                	
                  :

                	
                  564095

                       
      

                
	
                  Funding
      Date

                	
                  :

                	
                  October
      14, 2003

                      
      

                
	
                  Register
      Office

                	
                  :

                	
                  P.O.
      Box 957, Offshore Incorporations Centre, Road Town, Tortola, British
      Virgin Islands

                      
      

                
	
                  Register
      Capital

                	
                  :

                	
                  HK$1,000.00

                      
      

                
	
                  Outstanding
      Capital

                	
                  :

                	
                  HK$103.09

                

           

          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Shareholder

                                  	
                                    :

                                  	
                                    name

                                  	 	
                                    ownership

                                  	 
	 
      	 
      	 
      	 	 	 
	 
      	 
      	
                                    Jinheng
      Auto Safety Tech. Holdings Limited

                                  	 	
                                    100%

                                  	 

                          

                        

                      

                    

                  

                

              

            

          

           

          	
                  Director

                	
                  :

                	
                  Li
      Feng, Xing Zhanwu, Zhao Qingjie

                      
      

                
	
                  Main
      Business

                	
                  :

                	
                  Investment

                

        

      

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    
      Attachment
I

    

    

    
      Part B: Subsidiary
Details

    

     

    
      
        	
                Company

              	
                :

              	
                Jinheng
      (Hong Kong) Limited

                    
      

              
	
                Register

              	
                :

              	
                Hong
      Kong

                    
      

              
	
                Registration
      No.

              	
                :

              	
                843758

                    
      

              
	
                Funding
      Date

              	
                :

              	
                March
      28, 2003

                    
      

              
	
                Register
      Office

              	
                :

              	
                Unit
      605, 6/F, Beautiful Group Tower, 74-77, Connaught Road Central, Central,
      Hong Kong

                    
      

              
	
                Register
      Capital

              	
                :

              	
                HK$1,000.00

                    
      

              
	
                Outstanding
      Capital

              	
                :

              	
                HK$70.00

                      
      

              

        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Shareholder

                                	
                                  :

                                	
                                  name

                                	 	
                                  ownership

                                	 
	 
      	 
      	 
      	 	 	 
	 
      	 
      	
                                  Jinheng
      (BVI) Limited

                                	 	
                                  100%

                                	 

                        

                      

                    

                  

                

              

            

          

        

        
          
            	 	 	 
	
                    Director

                  	
                    :

                  	
                    Li
      Feng, Xing Zhanwu, Zhao Qingjie, Fu Tianzhong

                  
	 	 	 
	
                    Main
      Business

                  	
                    :

                  	
                    Investment

                  

          

        

      

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    
      Attachment
I

    

    

    
      
        	
                Company

              	
                :

              	
                Jinheng
      Auto Safety Tech. System Co., Ltd.

                     
      

              
	
                Register

              	
                :

              	
                P.R.
      China

                     
      

              
	
                Registration
      No.

              	
                :

              	
                210700400008757

                     
      

              
	
                Funding
      Date

              	
                :

              	
                January
      3, 1997

                    
      

              
	
                Register
      Office

              	
                :

              	
                No.
      16, Block 4, Bohai Street, Jinzhou E & D Zone, Liaoning
      China

                    
      

              
	
                Register
      Capital

              	
                :

              	
                HK$185,000,000.00

                    
      

              
	
                Outstanding
      Capital

              	
                :

              	
                HK$185,000,000.00

              

         

        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Shareholder

                                	
                                  :

                                	
                                  name

                                	 	
                                  ownership

                                	 
	 	 	 	 	 	 
	 
      	 
      	
                                  Jinheng
      (Hong Kong) Limited

                                	 	
                                  100%

                                	 

                        

                      

                    

                  

                

              

            

          

        

         

        	
                Director

              	
                :

              	
                Xing
      Zhanwu, Zeng Qingdong, Yang Donglin, Li Hong, Hao Dianqing

                    
      

              
	
                Main
      Business

              	
                :

              	
                Design,
      manufacture and sales of auto safety airbag system and safety seat belt
      system

              

      

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  Company

                	
                  :

                	
                  Shenyang
      Brillion Jinheng Auto Safety System Co., Ltd.

                     
      

                
	
                  Register

                	
                  :

                	
                  P.R.
      China

                     
      

                
	
                  Registration
      No.

                	
                  :

                	
                  210100401002189

                     
      

                
	
                  Funding
      Date

                	
                  :

                	
                  December
      11, 2003

                      
      

                
	
                  Register
      Office

                	
                  :

                	
                  Shenyang
      City, Liaoning Province, P.R. China

                     
      

                
	
                  Register
      Capital

                	
                  :

                	
                  RMB27,000,000.00

                      
      

                
	
                  Outstanding
      Capital

                	
                  :

                	
                  RMB27,000,000.00

                

        

         

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	
                                                                      Shareholder

                                                                    	
                                                                      :

                                                                    	
                                                                      name

                                                                    	 	
                                                                      ownership

                                                                    	 
	 	 	 	 	 	 
	 
      	 
      	
                                                                      Jinheng
      Auto Safety Tech. System Co., Ltd.

                                                                    	 	
                                                                      37.04%

                                                                    	 
	 	 	 	 	 	 
	 
      	 
      	
                                                                      Jinheng
      (Hong Kong) Limited

                                                                    	 	
                                                                      18.52%

                                                                    	 
	 	 	 	 	 	 
	 
      	 
      	
                                                                      Langfu
      International Limited

                                                                    	 	
                                                                      7.41%

                                                                    	 
	 	 	 	 	 	 
	 
      	 
      	
                                                                      Shenynag
      Power Development Limited

                                                                    	 	
                                                                      22.22%

                                                                    	 
	 	 	 	 	 	 
	 
      	 
      	
                                                                      Brillion
      Automotive Company

                                                                    	 	
                                                                      14.81%

                                                                    	 

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

         

        
          	
                  Director

                	
                  :

                	
                  Xing
      Zhanwu, Liu Pengcheng, Shen Lixin, Fu Tianzhong, FangDehe, Hao Dianqing,
      Yang Donglin, Li Jinwei, Wang Gang

                        
      

                
	
                  Main
      Business

                	
                  :

                	
                  Design,
      manufacture and sales of auto safety airbag system, safety seat belt
      system and other auto
parts

                

        

      

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  Company

                	
                  :

                	
                  Beijing
      Shijia Jinheng Auto Parts Co., Ltd.

                       
      

                
	
                  Register

                	
                  :

                	
                  P.R.
      China

                      
      

                
	
                  Registration
      No.

                	
                  :

                	
                  1102231897810

                      
      

                
	
                  Funding
      Date

                	
                  :

                	
                  October
      14, 2005

                      
      

                
	
                  Register
      Office

                	
                  :

                	
                  No.6,
      Guoxing Street, Guoxian County, Tongzhou District, Beijing, P.R.
      China

                     
      

                
	
                  Register
      Capital

                	
                  :

                	
                  RMB20,000,000.00

                      
      

                
	
                  Outstanding
      Capital

                	
                  :

                	
                  RMB20,000,000.00

                

        

         

        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Shareholder

                                  	
                                    :

                                  	
                                    name

                                  	 	
                                    ownership

                                  	 
	 	 	 	 	 	 
	 
      	 
      	
                                    Jinheng
      Auto Safety Tech. System Co., Ltd.

                                  	 	
                                    100%

                                  	 

                          

                        

                      

                    

                  

                

              

            

          

        

         

        
          	
                  Director

                	
                  :

                	
                  Xing
      Zhanwu, Yang Donglin, Hao Dianqing,

                       
      

                
	
                  Main
      Business

                	
                  :

                	
                  Manufacture
      and sales of auto steering wheels, hickory GICCI decoration
      wares

                

        

      

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    	
                            Company

                          	
                            :

                          	
                            Harbin
      Hafei Jinheng Auto Safety System Co., Ltd.

                                
      

                          
	
                            Register

                          	
                            :

                          	
                            P.R.
      China

                                
      

                          
	
                            Registration
      No.

                          	
                            :

                          	
                            230108100014019

                               
      

                          
	
                            Funding
      Date

                          	
                            :

                          	
                            December
      3, 2003

                               
      

                          
	
                            Register
      Office

                          	
                            :

                          	
                            Zone
      A, Pingfang Industrial Park, Harbin, P.R. China

                               
      

                          
	
                            Register
      Capital

                          	
                            :

                          	
                            RMB13,000,000.00

                               
      

                          
	
                            Outstanding
      Capital

                          	
                            :

                          	
                            RMB13,000,000.00

                          

                  

                   

                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	
                                                        Shareholder

                                                      	
                                                        :

                                                      	
                                                        name

                                                      	 	
                                                        ownership

                                                      	 
	 	 	 	 	 	 
	 
      	 
      	
                                                        Jinheng
      Auto Safety Tech. System Co., Ltd.

                                                      	 	
                                                        90%

                                                      	 
	 	 	 	 	 	 
	 
      	 
      	
                                                        Hafei
      Automotive Company

                                                      	 	
                                                        10%

                                                      	 
	 	 	 	 	 	 
	
                                                        Director

                                                      	
                                                        :

                                                      	
                                                        Yang
      Donglin, Hao Dianqing

                                                             
      

                                                      	 
	
                                                        Main
      Business

                                                      	
                                                        :

                                                      	
                                                        Design,
      manufacture and sales of auto safety airbag system and other auto
      parts

                                                      	 

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
      Attachment
II

    

    

    
      Relevant
Warranties

    

    

    1.           Share
Disposal

    

    
      	
              1.1

            	
              The
      seller is the registered shareholder and interest owner of the selling
      shares.

            

    

    

    
      	
              1.2

            	
              Except
      otherwise stipulated in terms of this agreement, there is no restrictions
      by any installment, mortgage or
pledge.

            

    

    

    
      2.          
The
Seller

    

    

    
      	
              2.1

            	
              The
      seller is in its full capable to act signing of this agreement and
      implement the obligations defined in this agreement (include, not limited
      to, transfer to equity right of the selling shares to the
      buyer)

            

    

    

    
      	
              2.2

            	
              Upon
      signing of this agreement, all terms in this agreement shall be valid and
      bonding to the parties of this
agreement.

            

    

    

    
      3.          
Miscellaneous

    

    

    
      	
               
      

            	
              The
      statements in the preface and the appendix are true and
      accurate.

            

    

    

    
      4.          
Management
Book

    

    

    
      	
               
      

            	
              The
      management book is prepared in accord with the good and commonly accepted
      accounting principles, and relevant laws and regulations of Hong Kong, and
      well up to the standard of integrity and accuracy, so as to exhibit the
      true and fair financial status of the group company, including the assets
      and liabilities, during the accounting
period.

            

    

    

    
      5.          
Assets and contingent
liability

    

    

    
      	
               
      

            	
              The
      seller shall disclose its assets and contingent liability on its Hong Kong
      Stock Exchange website. The seller shall be liable for the truth and
      accuracy of its material
events.

            

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    
      Attachment
III

    

    

    
      Part
A

    

    
       

      The First Promissory
Note

      

      Date:     July  ,
2010

      

      VITAL
GLEE DEVELOPMENT LIMITED, a corporation duly formed under the laws of the
British Virgin Islands with its legal address at P.O. Box 438,Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands, herein
consent and promise to pay HK$ 169,500,000(principal amount) to Jinheng
Automotive Saftey Technology Holdings Limited(including transferee and holdings
of this note) , with address herein at Unit 605, Beautiful Group Tower, 77,
Connaught Road Central, Central, Hong Kong

      

      The
principal shall bear no interest, and be paid in full amount at the maturity
date(The 30th day
from the date of issue of the First Promissory Note), in accordance with the
following regulations.

      

      The
Issuer may, with three Business Days’ prior notice in writing to the Payee,
redeem the Promissory Note, and repay whole or any part of the outstanding
Principal Amount at any time from the date of issue of the Promissory Notes
until three Business Days immediately prior to the maturity date of the relevant
Promissory Note. The redemption notice shall be effective upon received by the
Payee, once given may not be rescinded or withdrawn.A day on which licensed
banks in Hong Kong are open for normal banking business throughout their normal
business hours (excluding Saturdays, Sundays and public holidays),which for the
purpose of the Promissory Note.

      

      The
amount under this context will be paid to the payee by a promissory note signed
by a HongKong bank.

      

      The
Promissory Note(s), be freely transferable and assignable by the payee to any
other person and any subsequent holder of the Promissory Note(s) will (except as
otherwise required by law) be treated as the absolute owner of the Promissory
Note(s) for all purposes.

      

      Time is
the key herein. Failure, delay of the payee to exercise any right or any partial
right under this regulation shall not operate as a waiver thereof. The payee may
further exercise the relevant right when it’s proper at its own discretion.
However, if the issuer fails to pay any amount due under the relevant Promissory
Notes, a default interest shall be calculated from and including the maturity
date to the date of actual payment at the rate (the “Default Interest Rate”) of the
one-year lending rate of The People’s Bank of China on the outstanding Principal
Amount

      

      Any
affair in this promissory note shall be governed and construed in accordance
with laws and regulations of the HongKong special administrative region of the
People Republic of China. Parites irrevocably submits to the non-exclusive
jurisdiction of the Hong Kong courts .

      

      
        
          	
                     

                
	
                  VITAL
      GLEE DEVELOPMENT LIMITED

                
	
                  SIGNED
      AND SEALED

                

        

      

      

      
        
          	
                  Name:

                	 
      	 
      	
                  Name:

                	 
      
	
                  Title:

                	 
      	 
      	
                  Title:

                	 
      

        

      

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
      Attachment
III

    

    

    
      Part
B

    

     

    
      
        The Second Promissory
Note

      

      

      Date:     July   ,2010

      

      VITAL
GLEE DEVELOPMENT LIMITED, a corporation duly formed under the laws of the
British Virgin Islands with its legal address at P.O. Box 438,Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands, herein
consent and promise to pay HK$ 169,500,000(principal amount) to Jinheng
Automotive Saftey Technology Holdings Limited(including transferee and holdings
of this note) , with address herein at Unit 605, Beautiful Group Tower, 77,
Connaught Road Central, Central, Hong Kong

      

      The
principal shall bear no interest, and be paid in full amount at the maturity
date (The 90th day
from the date of issue of the First Promissory Note), in accordance with the
following regulations.

      

      The
Issuer may, with three Business Days’ prior notice in writing to the Payee,
redeem the Promissory Note, and repay whole or any part of the outstanding
Principal Amount at any time from the date of issue of the Promissory Notes
until three Business Days immediately prior to the maturity date of the relevant
Promissory Note. The redemption notice shall be effective upon received by the
Payee, once given may not be rescinded or withdrawn.A day on which licensed
banks in Hong Kong are open for normal banking business throughout their normal
business hours (excluding Saturdays, Sundays and public holidays),which for the
purpose of the Promissory Note.

      

      The
amount under this context will be paid to the payee by a promissory note signed
by a HongKong bank.

      

      The
Promissory Note(s), be freely transferable and assignable by the payee to any
other person and any subsequent holder of the Promissory Note(s) will (except as
otherwise required by law) be treated as the absolute owner of the Promissory
Note(s) for all purposes.

      

      Time is
the key herein. Failure, delay of the payee to exercise any right or any partial
right under this regulation shall not operate as a waiver thereof. The payee may
further exercise the relevant right when it’s proper at its own discretion.
However, if the issuer fails to pay any amount due under the relevant Promissory
Notes, a default interest shall be calculated from and including the maturity
date to the date of actual payment at the rate (the “Default Interest Rate”) of the
one-year lending rate of The People’s Bank of China on the outstanding Principal
Amount

      

      Any
affair in this promissory note shall be governed and construed in accordance
with laws and regulations of the HongKong special administrative region of the
People Republic of China. Parites irrevocably submits to the non-exclusive
jurisdiction of the Hong Kong courts .

      

      
        
          	
                     

                
	
                  VITAL
      GLEE DEVELOPMENT LIMITED

                
	
                  SIGNED
      AND SEALED

                

        

      

      

      
        
          	
                  Name:

                	 
      	 
      	
                  Name:

                	 
      
	
                  Title:

                	 
      	 
      	
                  Title:

                	 
      

        

      

    

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    
      Attachment
III

    

    

    
      Part
C

    

     

    
      
        The Third Promissory
Note

      

      

      Date:     July   ,2010

      

      VITAL
GLEE DEVELOPMENT LIMITED, a corporation duly formed under the laws of the
British Virgin Islands with its legal address at P.O. Box 438,Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands, herein
consent and promise to pay HK$ 452,000,000 (principal amount) to Jinheng
Automotive Saftey Technology Holdings Limited(including transferee and holdings
of this note) , with address herein at Unit 605, Beautiful Group Tower, 77,
Connaught Road Central, Central, Hong Kong

      

      The
principal shall bear no interest, and be paid in full amount at the maturity
date (The 180th day
from the date of issue of the First Promissory Note), in accordance with the
following regulations.

      

      The
Issuer may, with three Business Days’ prior notice in writing to the Payee,
redeem the Promissory Note, and repay whole or any part of the outstanding
Principal Amount at any time from the date of issue of the Promissory Notes
until three Business Days immediately prior to the maturity date of the relevant
Promissory Note. The redemption notice shall be effective upon received by the
Payee, once given may not be rescinded or withdrawn.A day on which licensed
banks in Hong Kong are open for normal banking business throughout their normal
business hours (excluding Saturdays, Sundays and public holidays),which for the
purpose of the Promissory Note.

      

      The
amount under this context will be paid to the payee by a promissory note signed
by a HongKong bank.

      

      The
Promissory Note(s), be freely transferable and assignable by the payee to any
other person and any subsequent holder of the Promissory Note(s) will (except as
otherwise required by law) be treated as the absolute owner of the Promissory
Note(s) for all purposes.

      

      Time is
the key herein. Failure, delay of the payee to exercise any right or any partial
right under this regulation shall not operate as a waiver thereof. The payee may
further exercise the relevant right when it’s proper at its own discretion.
However, if the issuer fails to pay any amount due under the relevant Promissory
Notes, a default interest shall be calculated from and including the maturity
date to the date of actual payment at the rate (the “Default Interest Rate”) of the
one-year lending rate of The People’s Bank of China on the outstanding Principal
Amount

      

      Any
affair in this promissory note shall be governed and construed in accordance
with laws and regulations of the HongKong special administrative region of the
People Republic of China. Parites irrevocably submits to the non-exclusive
jurisdiction of the Hong Kong courts .

      

      
        
          
            	
                       

                  
	
                    VITAL
      GLEE DEVELOPMENT LIMITED

                  
	
                    SIGNED
      AND SEALED

                  

          

        

      

      

      
        
          	
                  Name:

                	 
      	 
      	
                  Name:

                	 
      
	
                  Title:

                	 
      	 
      	
                  Title:

                	 
      

        

      

      

      [Remarks]
This document is the translation from original in Chinese, and all contents are
subject to the original version with signatures.

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
      Attachment
IV

    

    

    Share Pledge Agreement

    
      

      DATE: 

      

      VITAL
GLEE DEVELOPMENT LIMITED

      (as
the Chargor)

      

      IN
FAVOUR OF

      

      JINHENG
AUTOMOTIVE SAFETY TECHNOLOGY HOLDINGS LIMITED

      (as
the Chargee)

      

      
        
          

        

      

      

      SHARE
PLEDGE AGREEMENT

      

      re

      

      Shares
of

      

      JINHENG
(BVI) LIMITED

       

      
        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      Index

      

      
        
          
            
              
                
                  
                    
                      
                        	
                                Clause No.

                              	 
      	
                                Headings

                              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                 
      1

                              	 
      	
                                Interpretation

                              	 
      	
                                 
      1

                              
	
                                 
      2

                              	 
      	
                                Charging
      provisions

                              	 
      	
                                 
      3

                              
	
                                 
      3

                              	 
      	
                                Representations
      and warranties

                              	 
      	
                                 
      4

                              
	
                                 
      4

                              	 
      	
                                General
      covenants

                              	 
      	
                                 
      5

                              
	
                                 
      5

                              	 
      	
                                voting
      rights

                              	 
      	
                                 
      9

                              
	
                                 
      6

                              	 
      	
                                Enforcement
      of security

                              	 
      	
                                 
      10

                              
	
                                 
      7

                              	 
      	
                                Third
      parties dealing with the Chargee

                              	 
      	
                                 
      12

                              
	
                                 
      8

                              	 
      	
                                Further
      assurance

                              	 
      	
                                 
      12

                              
	
                                  9

                              	
                                 
      

                              	
                                Power
      of attorney

                              	 
      	
                                 
      12

                              
	
                                10

                              	 
      	
                                Warranties
      and undertakings of the Chargee

                              	 
      	
                                 
      12

                              
	
                                11

                              	 
      	
                                Release

                              	 
      	
                                 
      13

                              
	
                                12

                              	 
      	
                                Nature
      of security

                              	 
      	
                                 
      13

                              
	
                                13

                              	 
      	
                                Expenses

                              	 
      	
                                 
      14

                              
	
                                14

                              	 
      	
                                Miscellaneous

                              	 
      	
                                 
      14

                              
	
                                15

                              	 
      	
                                Assignment

                              	 
      	
                                 
      16

                              
	
                                16

                              	 
      	
                                Indemnity

                              	 
      	
                                 
      16

                              
	
                                17

                              	 
      	
                                Notices

                              	 
      	
                                 
      16

                              
	
                                18

                              	 
      	
                                Law
      and jurisdiction

                              	 
      	
                                 
      17

                              

                      

                    

                  

                

              

            

          

        

      

      

      
        
          
            
              
                
                  	
                          Execution

                        	 
      	 
      
	 
      	 
      	 
      
	
                          Attachment
      I - Instrument of Transfer

                        	 
      	 
      
	
                          Attachment
      II –
      Resignation Letter

                        	 
      	 
      
	
                          Attachment
      III –
      Written Resolution of Change of Directors

                        	 
      	 
      
	
                          Attachment
      IV - Written Resolution of Share Transfer

                        	 
      	 
      

                

              

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      THIS CHARGE is dated [Ÿ]:

      

      VITAL GLEE DEVELOPMENT
LIMITED,a company
incorporated in British Virgin Islands, its registered office is P.O. Box 438,
Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands, fax
no.:86-416-2669641(the “Chargor”);

      

      IN
FAVOUR OF:

      

      Jinheng Automotive Safety Technology
Holdings Limited,a company
incorporated in Cayman Islands, its registered office is Cricket Square,
Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands, its
principal place of business is Room 605, Beautiful Group Tower, 77 Connaught
Road Central, Hong Kong, fax no.: 00852-2542 0280 (”Chargee”)

      

      WHEREAS:

      

      (A)Jinheng (BVI)
Limited(”the Company”)is a company
incorporated in British Virgin Islands, its registered office is P.O. Box 957,
Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. As
at the date of entering into this deed of charge, the authorized share capital
of the Company is HK$1,000, dividend into 100,000 ordinary shares of HK$0.01 par
value(”Share”), of which 10,309
Shares has been issued and fully paid up.

      

      (B)Pursuant to the
《Agreement
for the Sale and Purchase of the Entire Share Capital of the Jinheng (BVI)
Limited》(”Sales and Purchase
Agreement”)entered
between  the Chargor and the Chargee dated 10 July 2010, Chargee
agreed to sell and Chargor agreed to purchase the sale shares at a consideration
of HK$1,130,000,000, in which the settlement method of the consideration
including the Chargor issues Promissory Notes to the Chargee (as defined in the
Sales and Purchase Agreement).

      

      
        (C)As security for
the performance of Chargor under the Promissory Notes, the Chargor enter into
this Deed of Charge in favor of the Chargee.

      

      

      NOW
THIS CHARGE WITNESSES as follows:

      

      
        	
                1.

              	
                INTERPRETATION

              

      

      

      1.1 Words
and expressions defined in the Sale and Purchase Agreement shall, unless
otherwise specified, have the same meanings when used herein: In this Charge
(including the Recitals hereto), except where the context otherwise
requires:

      

      “Charged
Securities” means 100% of the entire issued share capital of the Company
legally and beneficially owned by the Chargor, including all dividends paid or
payable thereon and stocks and shares, rights, monies and property accruing or
offered at any time by way of substitution, redemption, bonus, preference,
option, exchange, dividend, distribution, scheme of arrangement or organization
or otherwise to the same or in respect thereof;

      
        
           

        

        
          - 1
-

          
            

          

        

        
           

        

      

      

      “Disposition” means any sale,
assignment, exchange, transfer, concession, loan, lease, surrender of lease,
tenancy, license, direct or indirect reservation, waiver, compromise, release,
dealing with or in or granting of any option, right of first refusal or other
right or interest whatsoever and includes any agreement so to do and “Dispose” and “Disposal” shall be construed
accordingly;

      

      “Encumbrance”
means any mortgage, charge, pledge, lien, hypothecation or other encumbrance,
priority of 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;

      

      “Secured
Obligations” means any and all of the obligations of the Chargor under
the Sale and Purchase Agreement and the Promissory Notes (whether or not for the
payment of money, and including any obligation to pay damages for breach of
contract) and any and all of the obligations of the Chargor under this Charge
and/or all other obligations hereby secured (whether or not is secured alone or
jointly, and no matter of what method, name or form of security, and no matter
as an assignor or securer)

      

      “Shares” as defined in the
paragraph (A) in the recital;

      

      “this Charge” means this
instrument, as originally executed or amended from time to time

      

      “the Group” means the Company
and its subsidiaries;

      

      “Group Company” means any
member company of the Group;

      

      
        “Hong Kong” means the Hong Kong
Special Administrative Region of the PRC;

      

      

      “HK$” means Hong Kong dollars,
the lawful currency of Hong Kong; and

      

      “US$” means United States
Dollars, the lawful currency of the United States of America.

      

      1.2
Except to the extent that the context requires otherwise, any reference in this
Charge to:

      

      
        	
                 
      

              	
                (1)

              	
                any
      document shall include that document as in force for the time being and as
      amended in accordance with the terms thereof or with the agreement of the
      parties thereto;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                any
      enactment shall include the same as from time to time re-enacted, amended,
      extended, consolidated or replaced;
and

              

      

      

      
        	
                 
      

              	
                (3)

              	
                a
      “person” includes
      any individual, company, corporation, firm, partnership, joint venture,
      association, organization, unit or trust (in each case, whether or not
      having separate legal
personality).

              

      

      
        
           

        

        
          - 2
-

          
            

          

        

        
           

        

      

      

      1.3 The
headings and table of contents in this Charge are inserted for convenience only
and shall be ignored in construing this Charge. Unless the context otherwise
requires, references in this Charge to the singular shall include the plural and
vice versa, and
references to one gender shall include all genders. Unless otherwise stated,
references in this Charge to Clauses are to the clauses of this
Charge.

      

      
        	
                2.

              	
                CHARGING
      PROVISIONS

              

      

      

      2.1 In
consideration of the Sale and Purchase Agreement entered into between the
Chargor and the Chargee and the Chargee agrees to accept the Promissory Notes
issued by the Chargor, the Chargor as legal and beneficial owner hereby charges
by way of first fixed charge the Charged Securities to the Chargee as continuing
security for the payment and discharge of the Secured Obligations.

      

      2.2 This
Charge should be effective upon the completion of the Sale and Purchase
Agreement. The Chargor hereby undertakes that it shall forthwith upon the
execution of this Charge, deliver to the Chargee or its designated person the
following items:

      

      
        	
                 
      

              	
                (1)

              	
                share
      certificate in respect of the Charged Securities issued in the name of the
      Chargor;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                undated
      instrument of transfer in respect of the Charged Securities duly executed
      in blank by the Chargor;

              

      

      

      
        	
                 
      

              	
                (3)

              	
                undated
      letters of resignation of all the directors of the
  Company;

              

      

      

      
        	
                 
      

              	
                (4)

              	
                undated
      written resolutions of the all directors of the Company approving the
      transfer of the Charged Securities, the resignation of directors of the
      Company and the appointment of nominees designated by the Chargee as new
      director(s) of the Company;

              

      

      

      
        	
                 
      

              	
                (5)

              	
                the
      written resolution of all directors of the Company for the approval of
      transfer the Charged Securities to the Chargee or its nominee, without any
      date on it;

              

      

      

      
        	
                 
      

              	
                (6)

              	
                the
      stat record of the Company (including the company chop and common seal,
      the certificate of incorporation, the certificate of business
      registration, the memorandum and articles of the association, all
      certificates and transfer documents, register of members, register of
      directors, board minutes, register of charge, share certificates, tax
      reports, accounting books and other records of the Company);
      and

              

      

      

      
        	
                 
      

              	
                (7)

              	
                Other
      documents in order to reflect the ownership over the Charged Securities by
      the Chargee (signed by the registered owner or its representative), or to
      pass the ownership of the Charged Securities to the Chargee or its
      designated person, or any other documents that may require from time to
      time by the Chargee, and the Chargee can register such documents at any
      time without any notification to the
Chargor.

              

      

      
        
           

        

        
          - 3
-

          
            

          

        

        
           

        

      

      

      2.3 The
Chargor hereby undertakes that upon receipt of any further shares or securities
of the Company or any dividends, rights, monies or property accruing or offered
in respect of the Charged Securities or other securities of the Company, it
shall forthwith deposit the same with the Chargee or its nominee, together with
the relevant instruments of transfer in favor of the Chargee or any one or more
of its nominees, or other applicable instrument of transfer acceptable to the
Chargee, all duly executed or if required by the Chargee, in such form that the
Chargee may complete the due execution thereof (which completion on behalf of
the Chargor, the Chargor hereby expressly authorizes and ratifies).

      

      
        
          	
                  2.4

                	
                  Upon
      the Deed of Charge is duly signed, Chargee has the right to register the
      following information in the register of member of the
      Company:

                

        

      

      

      
        	
                 
      

              	
                (1)

              	
                Identified
      that the Charged Securities has been charged to the Chargee under the Deed
      of Charge; and

              

      

      

      
        	
                 
      

              	
                (2)

              	
                the
      registration date of recording such remarks in the register of
      member.

              

      

      

      2.5 The
Chargor hereby agrees that at any time after the date hereof, the Chargee may,
at the cost of the Chargor, register the Charged Securities in the name of the
Chargee or its nominee.

      

      
        	
                3.

              	
                REPRESENTATIONS AND
      WARRANTIES

              

      

      

      3.1 The
Chargor hereby represents and warrants to the Chargee as follows (unless those
circumstances of the Group Company exist before the completion of the Sale and
Purchase Agreement)

      

      
        	
                 
      

              	
                (1)

              	
                the
      Chargor is the legal and beneficial owner of the Charged Securities free
      and clear of all Encumbrances and Dispositions and has good and marketable
      title thereto;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                the
      Charged Securities are validly issued and fully paid or credited as fully
      paid;

              

      

      

      
        	
                 
      

              	
                (3)

              	
                the
      Charged Securities are not liable to any call, assessment or demand of any
      kind and any Group Company has not granted any right or option whatsoever
      to call for the issue of any further shares in that Group
      Company;

              

      

      

      
        	
                 
      

              	
                (4)

              	
                the
      Chargor has full power, authority and right to charge the Charged
      Securities in the manner provided in this Charge free from all
      Dispositions and Encumbrances;

              

      

      

      
        	
                 
      

              	
                (5)

              	
                the
      execution, delivery and performance of this Charge by the Chargor will not
      exceed any power granted to the Chargor or violate in any respects of (a)
      any provisions of any law or regulation or any order or decree of any
      governmental agency or court to which it is subject; or (b) any mortgage,
      charge, deed, contract or other undertaking or instrument to which the
      Chargor is a party or which is binding upon the Chargor or its assets; or
      (c) the articles and memorandum of the association of the Chargor. And the
      execution, delivery and performance of this Charge will not result in the
      creation or imposition of, or any obligation to create or impose, any
      Encumbrance on any of the assets save and except the Encumbrance created
      hereunder;

              

      

      
        
           

        

        
          - 4
-

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                (6)

              	
                all
      governmental or other authorizations, approvals and consents required for
      or in connection with the execution, validity, enforceability or
      admissibility in evidence of this Charge have been obtained and all such
      authorizations, approvals and consents are in full force and
      effect;

              

      

      

      
        	
                 
      

              	
                (7)

              	
                this
      Charge constitutes legal, valid and binding obligations on the Chargor and
      enforceable against the Chargor in accordance with its
    terms;

              

      

      

      
        	
                 
      

              	
                (8)

              	
                it
      is necessary or advisable under any law to file, register or otherwise
      record this Charge in any public office or elsewhere or to pay any stamp,
      registration or similar tax on or in relation to this Charge in order to
      ensure the legality, validity, enforceability, effectiveness or
      admissibility in evidence of this
Charge;

              

      

      

      
        	
                 
      

              	
                (9)

              	
                in
      any proceedings in relation to this Charge taken in the relevant
      jurisdiction where the Chargor carries on its business or has assets, the
      choice of Hong Kong law should be recognized and
  enforced;

              

      

      

      
        	
                 
      

              	
                (10)

              	
                the
      Group Company has not issued or resolved or agreed to issue or granted any
      shares, options or other right to acquire any shares or securities of the
      Group Company to any person;

              

      

      

      
        	
                 
      

              	
                (11)

              	
                the
      Chargor is generally subject to civil and commercial law and to legal
      proceedings and neither it nor any of its assets or revenues is entitled
      to any immunity or privilege (sovereign or otherwise) from any set-off,
      judgment, execution, attachment or other legal
  process;

              

      

      

      
        	
                 
      

              	
                (12)

              	
                no
      litigation, arbitration or administrative proceeding is currently taking
      place or pending or threatened against any of the Chargor, the Group
      Company or its assets which if adversely determined would have a material
      adverse effect on the ability of any of the Chargor to perform its
      obligations under this Charge;

              

      

      

      
        	
                 
      

              	
                (13)

              	
                the
      facts stated in the Recitals are true and correct in all respects;

              

      

      

      
        	
                 
      

              	
                (14)

              	
                the
      Company is beneficially owned the entire interest of subsidiaries listed
      in the Sale and Purchase Agreement, and the registered share capital of
      the Company in its subsidiaries has been fully paid;
  and

              

      

      

      
        	
                 
      

              	
                (15)

              	
                the
      Sale and Purchase Agreement, those Promissory Note and this Charge is
      legally valid and enforceable under its
  jurisdiction.

              

      

      

      3.2  The
Chargor further represents and warrants to the Chargee that so long as part of
the Secured Obligations remains outstanding, each of the representations and
warranties set out in Clause 3.1 will be correct and complied with in all
respects.

      

      
        	
                4.

              	
                GENERAL
      COVENANTS

              

      

      

      4.1 The
Chargor hereby covenants with the Chargee that so long as any part of the
Secured Obligations remains outstanding, it will:

      
        
           

        

        
          - 5
-

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                (1)

              	
                warrant
      and defend its title to and the security interest in the Charged
      Securities hereby created in favor of the Chargee against any and all
      claims of all persons whomsoever;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                procure
      that at all times the Charged Securities are free from any restrictions on
      transfer;

              

      

      

      
        	
                 
      

              	
                (3)

              	
                punctually
      pay all calls or other payments due in respect of any of the Charged
      Securities and in case of default, the Chargee may (but shall not be
      obliged to), if it thinks fit, make any such payment on behalf of the
      Chargor and in which event the Chargor shall reimburse the Chargee on
      demand any reasonable sums so paid together with interest thereon at such
      rate of the one-year lending rate of the People’s Bank of China for
      overdue sums from the date on which payment was made up to the date of
      full repayment;

              

      

      

      
        	
                 
      

              	
                (4)

              	
                at
      its own expense, subscribe and pay for all rights, shares, options,
      warrants or securities of the Company from time to time offered to the
      Chargor or the Chargee by virtue of the holding of the Charged
      Securities;

              

      

      

      
        	
                 
      

              	
                (5)

              	
                pay
      to the Chargee upon demand, on a full indemnity basis, all costs and
      expenses and charges (including legal fees) incurred by the Chargee in
      connection with the perfection or preservation of the security created by
      this Charge or with the preservation, enforcement, exercise or attempted
      or intended exercise of any right, power or remedy hereunder and to pay
      interest thereon at such rate of the one-year lending rate of the People’s
      Bank of China from the date on which such expense or liability was
      incurred by the Chargee to the date of full payment, which until payment
      shall form part of the Secured
Obligations;

              

      

      

      
        	
                 
      

              	
                (6)

              	
                with
      prior written consent from the Chargee, procure the Group Company not to
      allot or issue any shares or grant any right to subscribe shares, and will
      not change the authorized share capital or any attached rights to the
      share capital

              

      

      

      
        	
                 
      

              	
                (7)

              	
                duly
      perform, observe and comply with its obligations hereunder in all respects
      and in accordance with all laws and regulations applicable to the
      transactions contemplated hereby;

              

      

      

      
        	
                 
      

              	
                (8)

              	
                promptly
      advise the Chargee in writing upon becoming aware of the occurrence of any
      event or any material adverse factor which may inhibit the Chargor in the
      performance of its obligations
hereunder;

              

      

      

      
        	
                 
      

              	
                (9)

              	
                promptly
      upon becoming aware inform the Chargee of the occurrence of any default on
      Sale and Purchase Agreement, such Promissory Notes or this Charge;

              

      

      

      
        	
                 
      

              	
                (10)

              	
                obtain
      and maintain all authorizations, approvals and consents to ensure that
      this Charge is and will remain in full force and effect and take immediate
      steps to obtain and thereafter maintain in full force and effect any other
      authorizations which may become necessary for the purposes stated
      herein;

              

      

      
        
           

        

        
          - 6
-

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                (11)

              	
                ensure
      that at all times the claims of the Chargee against the Chargor hereunder
      will rank first in priority of payment and security against the claims of
      all its creditors;

              

      

      

      
        	
                 
      

              	
                (12)

              	
                promptly
      notify the Chargee of any notice or communication relating to this Charge,
      which may adversely affect the rights of the Chargee under the this Charge
      as and when the Chargor receives the
same;

              

      

      

      
        	
                 
      

              	
                (13)

              	
                do
      or permit to be done everything which the Chargee may from time to time
      require to be done for the purpose of enforcing the Chargee’s rights
      hereunder and will allow the name of the Chargor to be used as and when
      required by the Chargee for that
purposes;

              

      

      

      
        	
                 
      

              	
                (14)

              	
                at
      all time remain the legal and beneficial owner of the Charged Securities
      unless the Chargee otherwise agrees in
writing;

              

      

      

      
        	
                 
      

              	
                (15)

              	
                procure
      that the Group Company shall not amend or make any supplement on the
      memorandum and articles of association, which may adversely affect the
      rights of the Chargor to perform its obligations under this Charge;

              

      

      

      
        	
                 
      

              	
                (16)

              	
                procure
      that the Group Company will operate in line with its previous way, and
      will not enter into any agreements or undertakings which are abnormal or
      intended to damage the benefit of the Chargee, unless the Chargee
      otherwise agrees in writing;

              

      

      

      
        	
                 
      

              	
                (17)

              	
                procure
      that the Chargee will be reasonably notified the business, financial,
      assets and prospects of the Group Company in all material aspects;

              

      

      

      
        	
                 
      

              	
                (18)

              	
                procure
      that at any time this Charge is effective and the Secured Obligations have
      outstanding or not completed, before 31 August of every year provide to
      the Chargee the unaudited consolidated financial statements of the Company
      between 1 January and 30 June of the year, before 31 March of next year
      provide to the Chargee the audited consolidated financial statements of
      the Company between 1 January and 31 December of the year;
    and

              

      

      

      
        	
                 
      

              	
                (19)

              	
                Unless
      in the normal business not affect the enforcement of the right of charge,
      without the written consent from the Chargee, procure the Group Company
      will not perform the following activities, and the board of directors or
      its shareholders meeting will not pass the resolution to perform the
      following activities:

              

      

      

      
        	
                 
      

              	
                (a)

              	
                issue
      and shares or grant share options for any shares or not paid-up shares of
      the Group Company, or issue warrants, debentures, securities or other
      rights which can transfer into shares, or sign any agreements for the
      above said activities;

              

      

      
        
           

        

        
          - 7
-

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                (b)

              	
                capitalize,
      repay or distribute in other way, the credit amount of the reserve account
      of the Group Company;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                the
      cessation or winding-up of the Company;

              

      

      

      
        	
                 
      

              	
                (d)

              	
                amend
      the rights attached to the Shares;

              

      

      

      
        	
                 
      

              	
                (e)

              	
                amend
      the memorandum and articles of association of the Group Company, pass the
      resolutions which is not in line with the conditions of this
      Charge;

              

      

      

      
        	
                 
      

              	
                (f)

              	
                other
      than the ordinary course of business of the Group Company, dispose the
      lease agreement or other rights owned or used by the Company, or set the
      mortgage or other Encumbrance on that property;

              

      

      

      
        	
                 
      

              	
                (g)

              	
                other
      than the ordinary course of business of the Group Company, dispose the
      property or other assets of the Company;

              

      

      

      
        	
                 
      

              	
                (h)

              	
                the
      Group Company acquire or establish any subsidiary, or acquire the shares
      of other company, or the Group Company join any partnership or joint
      venture;

              

      

      

      
        	
                 
      

              	
                (i)

              	
                sell
      or dispose the business or assets of the Group
  Company;

              

      

      

      
        	
                 
      

              	
                (j)

              	
                other
      than the ordinary course of business of the Group Company, enter into
      material agreements with any shareholder or its
  associates;

              

      

      

      
        	
                 
      

              	
                (k)

              	
                other
      than the ordinary course of business of the Group Company, lend money to
      others(not to bank or its ordinary course of business, including deposit),
      approve borrowings, provide guarantee or remedies or borrow money from
      bank, financial institutions or other person(unless regulated under the
      clauses of this Charge), and such amount more than
    RMB500,000;

              

      

      

      
        	
                 
      

              	
                (l)

              	
                the
      Group Company merge or consolidate with other
  company;

              

      

      

      
        	
                 
      

              	
                (m)

              	
                change
      the composition of the board of directors of the Group Company (other than
      the change regulated under the clauses of this Charge);

              

      

      

      
        	
                 
      

              	
                (n)

              	
                change
      the profit distribution policy of the Group
  Company;

              

      

      

      
        	
                 
      

              	
                (o)

              	
                making
      capital commitment by the Group Company;

              

      

      

      
        	
                 
      

              	
                (p)

              	
                adopt
      share option schemes by the Group Company;

              

      

      
        
           

        

        
          - 8
-

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                (q)

              	
                substantially
      change the director remuneration of the Group Company;

              

      

      

      
        	
                 
      

              	
                (r)

              	
                make,
      declare and pay dividend; and

              

      

      

      
        	
                 
      

              	
                (s)

              	
                allow
      other person by the way of subscribe shares or transfer to be the
      shareholders of the Company, unless regulated in the
    Charge.

              

      

      

      4.2 The
Chargor further covenants with the Chargee that so long as any part of the
Secured Obligations remains outstanding, without the prior written consent of
the Chargee, it will not:

      

      
        	
                 
      

              	
                (1)

              	
                dispose
      of, create or permit to arise or subsist any Encumbrance over the Charged
      Securities or any part thereof or the equity of redemption thereof under
      this Charge;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                demand
      or accept any payment from the Group Company by way of distribution,
      return of capital or otherwise howsoever in respect of any shares in the
      capital of the Company;

              

      

      

      
        	
                 
      

              	
                (3)

              	
                permit
      or agree to any variation of the rights attaching to any of the Charged
      Securities

              

      

      

      
        	
                 
      

              	
                (4)

              	
                transfer,
      dispose or disposal any or part of the any shares of the Group
      Company.

              

      

      

      
        4.3 The
Chargor further covenants with the Chargee that the Charged Securities
constitute all the issued shares of the Company.

      

      

      4.4 If
the Chargor defaults in performing its obligations under Clause 4.1(3) or
4.1(5), without prejudice to any rights of the Chargee, the Chargee may effect
any such payment as may be required to be made by the Chargor or, as the case
may be, subscribe to and pay for the rights or other issues and any money so
paid by the Chargee shall be repaid on demand together with interest thereon at
such rate of the one-year lending rate of the People’s Bank of China for overdue
sums which is for the time being notified to the Chargor (as well after as
before judgment) from the date on which payment is made to the date of full
repayment, which shall until payment form part of the Secured
Obligations.

      

      
        	
                5.

              	
                VOTING
      RIGHTS

              

      

      

      5.1 Until
this Charge hereby constituted becomes enforceable, the Chargor shall at any
time exercise any voting rights in respect of the Charged Securities provided
that will not affect the right of the Chargee.

      

      5.2 Upon
this Charge becoming enforceable and at any time thereafter, the Chargee or its
nominee may (to the entire exclusion of the Chargor) at any time at the
discretion of the Chargee exercise any voting rights in respect of the Charged
Securities and all powers or rights given to trustees by sub-sections (4) and
(5) of section 11 of the Trustee Ordinance of Hong Kong in respect of securities
subject to a trust and all powers or rights which may be exercised by the person
in whose name the Charged Securities are registered.

      
        
           

        

        
          - 9
-

          
            

          

        

        
           

        

      

      

      
        	
                6.

              	
                ENFORCEMENT OF
      SECURITY

              

      

      

      6.1          The
Chargee shall be immediately enforceable on or at any time or times after any
circumstances stated below happen:

      

      (a)          The
Chargor does not pay, repay or satisfy any payable amount under the Sale and
Purchase Agreement, the Promissory Notes or this Charge of the Extended Period.
“Extended Period means:

      

      
        	
              	
                (i)

              	
                for
      the First Promissory Note, 30 days after the maturity date of the First
      Promissory Note;

              

      

      
        
          	
                	
                  (ii)

                	
                  for
      the Second Promissory Note, 30 days after the maturity date of the Second
      Promissory Note;

                

        

      

      
        	
              	
                (iii)

              	
                for
      the Third Promissory Note, 60 days after the maturity date of the Third
      Promissory Note;

              

      

      

      (b)          Other
the waiver of the relevant Extended Period mentioned in the clause 6.1 above,
the Chargor cannot perform its Secured Obligations or other obligations,
declarations or undertakings under this Charge, or the Chargor default any
obligations under the Sale and Purchase Agreement or such Promissory
Notes;

      

      (c)          Any
representations, declarations or undertakings made by the Chargor under this
Charge, or any repeated representations, declarations or undertakings under this
Charge, is proved to be wrong or misleading;

      

      (d)          Any
creditors take over the Chargor or all or part of assets, or any events for the
purpose of assign (or assigned) receiver, executor, trustee or similar person to
take over all or part of the assets of the Chargor;

      

      (e)          Other
the waiver of the relevant Extended Period mentioned in the clause 6.1 above,
the Chargor (i) not able to satisfy all matured liabilities, (ii) terminate or
temporarily terminate to pay all or part of its liabilities, or have a threat of
this, (iii) commence the negotiation or take any actions to consolidate,
rearrange or extend the repayment period of all liabilities (or any part of
liabilities that cannot repay once matured), (iv) proposed or executed any
arrangement on liabilities in favor of creditors, (v) any business has been
stopped operation, or has received a threat on this, or (vi) declared
liquidation; and

      

      (f)           the
Chargor has been applied for bankruptcy, liquidation or insolvency, or an order
has been declared by the court, or an effective resolution has been passed or
any other actions in related to this has been taken, and if such application or
action is not applied or taken by the Chargor, any such order or other actions
do not release or terminated within 7 days.

      

      6.2 Upon
the security hereby constituted becoming enforceable and at any time thereafter,
the Chargee may without prejudice to any of its rights under this Charge, to the
exclusion of the Chargor, and without any notice to or further consent or
concurrence by the Chargor exercise all rights and enjoy all benefits attaching
to the Charged Securities as if it were a sole beneficial owner thereof
including without limitation the right to vote and to receive
dividends.

      
        
           

        

        
          - 10
-

          
            

          

        

        
           

        

      

      

      6.3 Upon
the security hereby constituted becoming enforceable after the Chargee has given
to the Chargor a notice of its intention to dispose of the Charged Securities,
the Chargee shall be entitled to dispose of the Charged Securities or any part
thereof by such method, upon such terms and for such consideration (whether
payable or deliverable immediately or by installments), or the Chargee may in
its absolute discretion to transfer the Charged Securities to third parties at a
reasonable price. The Chargee has the power to postpone any such Disposition and
in any such case the Chargee may exercise any and all rights attaching to the
Charged Securities as it in its discretion may determine and without being
answerable for any loss occasioned by such Disposition or resulting from
postponement thereof or the exercise of such rights.  The Chargor
shall not have any claim against the Chargee or its nominee in respect of any
loss arising out of any such sale or any postponement thereof howsoever caused
and whether or not a better price could or might have been obtained upon the
sale of the Shares or any of them by deferring or advancing the date of such
sale.

      

      6.4 All
monies received by the Chargee in respect of the Disposition by it of the
Charged Securities or any part thereof or otherwise howsoever arising out of the
exercise by the Chargee of its power hereunder shall be applied in or towards
payment of the Secured Obligations in such order as the Chargee deems
fit.  If such proceeds are insufficient to discharge the Secured
Obligations in full, then nothing contained in this Charge shall prejudice the
rights of the Chargee against any of the Chargor or any other person under this
Charge in respect of such deficiency.  In connection with any proposed
Disposition, the Chargor hereby waives all rights to confidentiality in respect
of the Shares or business of the Company and its subsidiaries.

      

      6.5 For
the purpose of assisting the Chargee in the exercise of any rights conferred by
this Clause 6, the Chargor hereby covenants that it will promptly execute such
bought and sold notes, instruments of transfer, proxies, the director
resignation letter of the Company, the board of director resolution of the
Company and other documents as the Chargee may require and will procure the
registration of transfers of the Charged Securities and the entry of the Chargee
or such persons it may appoint in the register of members as the holder of the
Charged Securities and give all necessary assistance to the Chargee in arranging
the registration of the transfer of the Charged Securities to the Chargee or
such persons it may appoint in the books of the Company and the entry of the
Chargee or such persons it may appoint in the register of members of the Company
as the holder of the Charged Securities, and the entry of the Chargee or such
persons it may appointed as the new directors of the Company in the register of
directors.

      

      6.6 When
the Chargor execute all Charged Securities under this Charge, the Chargee may in
its absolute discretion consider all the Secured Obligations of the Chargor
under this Charge have been fully satisfied, and all the obligations of the
Chargor under this Charge is deemed to be fully released.

      

      
        6.7 When
the Chargor execute all Charged Securities under this Charge, all expenses,
stamp duty or other tax in related to the dispose of Charged Securities (if
necessary) should be borne by the Chargor.

      

      
        
           

        

        
          - 11
-

          
            

          

        

        
           

        

      

      

      
        	
                7.

              	
                THIRD PARTIES DEALING
      WITH THE CHARGEE

              

      

      

      7.1 The
Chargor agrees that, upon any Disposal of the whole or any part of the Charged
Securities or rights which the Chargee shall make or purport to make under this
Charge, a statement in writing signed by any director, officer or manager for
the time being of the Chargee that the security constituted hereby is
enforceable and that the power of sale has become exercisable shall be
conclusive evidence of the fact in favour of any purchaser or other persons to
whom any of the Charged Securities or rights may be transferred.  The
purchaser or other person will take the Charged Securities or rights free of any
right of the Chargor or any person claiming under it and the Chargor hereby
undertakes to fully indemnify the Chargee and keep the Chargee fully indemnified
against any claim which may be made against the Chargee by such purchaser or
such other person by reason of any defect in its title to the Charged Securities
or other rights.

      

      7.2 Upon
any Disposition of the Charged Securities or any part thereof under Clause 6.3,
the purchaser shall not be bound to see or enquire whether the power of
Disposition of the Chargee has arisen in the manner herein provided and the
Disposition shall be deemed to be within the power of the Chargee and the
receipt of the Chargee for the purchase money shall effectively discharge the
purchaser who shall not be concerned or be in any way answerable
therefor.

      

      
        	
                8.

              	
                FURTHER
      ASSURANCE

              

      

      

      8.1          The
Chargor agrees, at its own costs and expenses, to execute and do all assurances,
acts, deeds and things as the Chargee may reasonably require, and procure other
interested parties so to do, for protecting or perfecting the security over all
or any part of the Charged Securities or for facilitating the realization of all
or any part of the Charged Securities and the exercise of all powers, rights,
remedies, authorities and discretions vested in the Chargee.  The
Chargor shall, in particular, execute all transfers and assurances of all or any
part of the Charged Securities whether to the Chargee or to its nominees or
purchasers and give all notices, orders and directions which the Chargee may
think expedient.

      

      
        	
                9.

              	
                POWER OF
      ATTORNEY

              

      

      

      9.1 As
continuing security for the discharge of the Secured Obligations and the
performance of its obligations hereunder, the Chargor hereby irrevocably
appoints the Chargee and any 2 officers from time to time nominated by the
Chargee, each with full power of substitution and each with full power to act
alone, to be its attorneys and in its name and on behalf to sign, seal and
deliver or otherwise execute and do all such assurances, deeds, acts, documents
and things (whether as their own act or deed or otherwise) which, in the opinion
of the Chargee, it should execute or do pursuant to any of the terms of this
Charge or for the purpose of giving the Chargee the full benefit of this Charge
and the security hereby created and generally to use its name in the exercise of
all or any of the powers conferred on the Chargee hereunder.

      

      9.2 The
Chargor hereby ratifies and confirms and covenants to ratify and confirm
whatever such attorneys shall lawfully do or cause to be done by virtue of
Clause 9.1.

      

      
        	
                10.

              	
                WARRANTIES
      AND UNDERTAKINGS OF THE
CHARGEE

              

      

      

      The
Chargee hereby warrants to the Chargor that so long as part of the Secured
Obligations remains outstanding, the Chargee warrants and undertakes:

      

      10.1 Other
than execution of the charge, it will not abuse the power or rights as a
Chargee;

      
        
           

        

        
          - 12
-

          
            

          

        

        
           

        

      

      

      
        10.2 Other
than execution of the charge, it will not intervene the normal operation of
the secured assets;

      

      

      
        10.3 Other
than execution of the charge, the Chargee will fully cooperate with the Chargor
for any reasonable merge and acquisition, financing and investment;
and

      

      

      10.4
Within 60 days after the release of the charge, making all discharge procedures
and complete the related legal processes, and return all records and documents
as stated in clause 2.2.

      

      
        	
                11.

              	
                RELEASE

              

      

      

      11.1
Within 30 days after the discharge of the Secured Obligations (including
provision for contingent liabilities in such manner and of such amount as may be
determined by the Chargee in its absolute discretion) and all obligations and
liabilities under this Charge but subject to the rights of any other person
which have arisen as a result of the exercise by the Chargee of any of its
powers, rights and remedies hereunder and the rights of any third party, the
Chargee shall take all steps that may be necessary to release and discharge the
Charged Securities from the security hereby created and where appropriate,
transfer the Charged Securities to the Chargor or as the Chargor may direct and
release the Chargor from the terms of this Charge.

      

      11.2 Any
release, discharge or transfer as mentioned in Clause 11.1 shall be in such form
as the Chargee shall approve and shall be made at the cost and expense of the
Chargor. On any release of any of the Charged Securities, the Chargee shall
return the identical securities (i.e. the clause 2.2 of this Charge) which were
deposited, lodged, held or transferred to the Chargor.

      

      11.3 Clause
11.1 shall apply only in respect of such number of the Charged Securities as
remains after the exercise of the rights, powers and remedies of the Chargee in
the event of the security conferred by this Charge becoming enforceable and
shall not in any way restrict or be construed so as to restrict such rights,
powers and remedies.

      

      
        	
                12.

              	
                NATURE OF
      SECURITY

              

      

      

      12.1 The
security created by this Charge is in addition to and not in substitution for
and shall not in any way affect or be affected by any other security or
guarantee which the Chargee may now or at any time hold or take from the
Company, the Chargor or any other person in respect of the Secured Obligations
and the obligations and liabilities under this Charge.

      

      12.2 The
security created by this Charge shall not be considered satisfied or discharged
by any intermediate payment or satisfaction of the whole or part of the Secured
Obligations but shall be a continuing security and shall extend to cover any sum
which shall for the time being constitute the balance due or expressed to be due
from the Chargor to the Chargee in respect of the Secured
Obligations.

      
        
           

        

        
          - 13
-

          
            

          

        

        
           

        

      

      12.3 If
the Chargee received notices on any Encumbrance subsequently created or other
rights (no matter actual or determine), and such Encumbrance or rights may
affect the Charged Securities or any part of it, the Chargee has the right to
open or more than one account for such Encumbrance or right. If the Chargee does
not open new account, it should be deemed that the Chargee has open a new
account at the time it receive the notice, and the from that time all money paid
by the Chargor to the Chargee should be credited to such new account but not to
reduce the amount of the Secured Obligations at the time when the Chargee
received the notice.

      

      
        	
                13.

              	
                Expenses

              

      

      

      
        13.1        
Each
party should itself borne the expenses resulted from the draft, negotiation and
entering into this Charge (including the legal fee).

      

      

      
        	
                14.

              	
                MISCELLANEOUS

              

      

      

      14.1 This
security and the rights of the Chargee hereunder shall not be affected by any
act, omission, fact, circumstance, matter or thing which, but for this
provision, might operate to release or otherwise exonerate the Chargor from its
obligations hereunder, including, without limitation, and whether or not known
to the Chargee:

      

      
        	
                 
      

              	
                (1)

              	
                any
      time or indulgence granted to the Chargor or any other
    person;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                the
      taking, variation, compromise, renewal or release of, or refusal or
      failure to perfect or enforce or realise any rights, remedies or
      securities against any of the Chargor or any other
  person;

              

      

      

      
        	
                 
      

              	
                (3)

              	
                any
      want of authority by any person purporting to act on behalf of the Chargor
      or any other person;

              

      

      

      
        	
                 
      

              	
                (4)

              	
                any
      amendment to, or variation of the terms of this
  Charge;

              

      

      

      
        	
                 
      

              	
                (5)

              	
                the
      Chargor or any other person not being or ceasing to be legally liable for
      discharging any obligation or liability undertaken or purported to be
      undertaken on its behalf;

              

      

      

      
        	
                 
      

              	
                (6)

              	
                the
      illegality, invalidity or unenforceability of or any defect in any
      provision of this Charge;

              

      

      

      
        	
              	
                (7)

              	
                the
      lapse or expiry of applicable limitation
period;

              

      

      

      
        	
                 
      

              	
                (8)

              	
                the
      absorption, amalgamation, reconstruction or reorganization or other change
      in the constitution of the Company or any other
  person;

              

      

      

      
        	
                 
      

              	
                (9)

              	
                the
      winding-up, liquidation or dissolution of the Company, the Chargee or any
      other person; and

              

      

      

      
        	
                 
      

              	
                (10)

              	
                any
      other act, omission, event of thing whatsoever which but for this
      provision would or might afford an equitable defence to a surety or
      otherwise operate to discharge, impair or affect the obligations or
      liabilities of the Chargor
hereunder.

              

      

      
        
           

        

        
          - 14
-

          
            

          

        

        
           

        

      

      
        14.2       
The
release of any obligations between the Chargee and the Chargor, is conditional
upon no avoidance or reduction on the security, dispose payment towards the
Chargee by the Chargor or any other person due to any bankruptcy or liquidation.
If such avoidance or reduction happens, the Chargee can execute the regulations
under this Charge towards the Chargor in a way deemed such release not yet
happen.

      

      

      14.3 This
Charge shall continue to be effective or, as the case may be, shall be
reinstated if at any time payment of any sums paid to the Chargee or hereunder
must be rescinded or otherwise repaid or restored by the Chargee upon the
bankruptcy, liquidation, reorganization or otherwise of the Chargor (whether as
a fraudulent preference or otherwise).

      

      14.4 No
payment to the Chargee under this Charge pursuant to any judgment or order of
any court or otherwise shall operate to discharge any obligation or liability of
the Chargor in respect of which it was made unless and until payment in full
shall have been received in the currency in which such obligation or liability
was incurred.  To the extent that the amount of any such payment
shall, on actual conversion into such currency, fall short of the amount of such
obligation or liability expressed in that currency, the Chargee shall have a
further separate cause of action against the Chargor for the recovery of the
amount of the shortfall.

      

      14.5 The
Chargor undertakes on demand fully and effectually to indemnify and at all times
keep indemnified the Chargee against any claim, demand, action, proceeding,
liability, loss, damage, penalty, interest, cost, charge or expense, legal or
otherwise, taken, made, threatened, sustained or incurred by or against the
Chargee for anything done, permitted or omitted in the exercise or purported
exercise of any of the powers of the Chargee under or pursuant to this
Charge.

      

      14.6 Save
as may be expressly provided herein to the contrary, time is of the essence of
this Charge.  No failure or delay on the part of the Chargee to
exercise any power, right or remedy under this Charge shall operate as a waiver
thereof nor shall a waiver by the Chargee of any particular default by the
Chargor affect or prejudice the power, right or remedy of the Chargee in respect
of any other default or any subsequent default of the same or a different kind
nor shall any single or partial exercise by the Chargee of any power, right or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other power, right or remedy.  The powers, right and remedies
provided in this Charge are not exclusive of any power, right and remedies but
are cumulative and in addition to every other power, right and remedy now or
hereafter existing at law, in equity, by statute or contract or
otherwise.

      

      14.7 If
at any time any provision of this Charge is or becomes illegal, invalid or
unenforceable in any respect, neither the legality, validity or enforceability
of the remaining provisions of this Charge nor the legality, validity or
enforceability of such provision shall in any way be affected or impaired
thereby.

      

      14.8 The
Chargor hereby undertakes that it shall, entirely at its own expense,
immediately upon demand by the Chargee make, execute, do and perform, or cause
or procure to be made, executed, done and performed, by it and/or use its best
endeavors to procure to be made, executed, done and performed by other necessary
parties (if any), all such further acts, agreements, assignments, assurances,
bills, contracts, deeds, documents, evidences of indebtedness, indemnities
instruments, letters, loan notes, notices, powers of attorney, promissory notes,
receipts, securities, undertakings, matters and things as the Chargee shall
reasonably require to perfect or improve the security afforded or created, or
intended to be afforded or created by this Charge.

      
        
           

        

        
          - 15
-

          
            

          

        

        
           

        

      

      

      14.9         A
certificate of the Chargee of the amount of the Secured Obligations outstanding
and due at any time hereunder shall, in the absence of manifest error, be
binding and conclusive on the Chargor.

      

      
        	
                15.

              	
                ASSIGNMENT

              

      

      

      15.1 This
Charge shall be binding on and shall ensure to the benefit of the parties and
their respective executors, administrators, successors and assigns provided that
the Chargor may not Dispose of its rights or obligations hereunder without the
prior written consent of the Chargee.

      

      15.2 The
Chargee may at any time without the consent of or notice to the Chargor assign
its rights and benefits hereunder or any part thereof to anyone.  Such
assignee shall have the same rights and benefits and/or obligations against the
Chargor under this Charge as if it were an original party thereto in respect of
its rights and benefits and/or obligations assigned to it.  The
Chargee may disclose to a potential assignee or any other person proposing to
enter into contractual arrangements with it in relation to this Charge such
information about the Chargor as it may think fit.

      

      
        	
                16.

              	
                INDEMNITY

              

      

      

      16.1
Independently of any other terms, conditions and stipulations herein, the
Chargor agrees that if, for any reasons whatsoever, its obligations under any of
the provisions hereof is or becomes or proves to be unenforceable or shall be
declared or adjudged to be illegal, invalid or unenforceable under any
applicable law, it shall grant to the Chargee a complete indemnity and will pay
to the Chargee all sums necessary to make good and to compensate the Chargee for
all losses, damages, costs, disbursements and liabilities suffered or incurred
by the Chargee as a direct or indirect result of such illegality, invalidity or
unenforceability.

      

      
        	
                17.

              	
                NOTICES

              

      

      

      17.1 Save
as otherwise provided herein, all notices or other communications required or
permitted hereunder:

      

      
        	
                 
      

              	
                (1)

              	
                shall
      be in writing and may be sent by postage prepaid mail (by airmail if to
      another jurisdiction), facsimile or personal
  delivery;

              

      

      

      
        	
                 
      

              	
                (2)

              	
                shall
      be sent to the relevant party at the facsimile number or address from time
      to time designated by that party to the other party, the initial facsimile
      number and address so designated by each party is set out under its name
      on the first page of this Charge;

              

      

      

      
        	
                 
      

              	
                (3)

              	
                the
      notice sent by the Chargor or the Chargee shall not be effective until
      actually received by the other party;
and

              

      

      

      
        	
                 
      

              	
                (4)

              	
                if
      sent to the Chargor shall be deemed to have been given or made to and
      received by the Chargor (a) within three days after the date of posting,
      if sent by mail; (b) when delivered, if delivered by hand; and (c) on
      dispatch, if sent by facsimile.

              

      

      
        
           

        

        
          - 16
-

          
            

          

        

        
           

        

      

      

      17.2        The
Chargor hereby irrevocably appoint Mr Foo Tin Chung, Victor at Room 605,
Beautiful Group Tower, 77 Connaught Road Central, Hong Kong as the its agent to
accept the service of process out of the courts arising out of this Charge. The
Chargor further agree to appoint an agent in Hong Kong to accept the service of
process out of the courts, and keep other parties informed the name and address
of such agent. The delivery to the agent is deemed to deliver to the party who
appoint the agent. The clause 6.1 is also applicable to the agent of the
Chargor.

      

      
        	
                18.

              	
                LAW AND
      JURISDICTION

              

      

      

      18.1        This
Charge shall be governed by and construed in accordance with the laws of Hong
Kong. The Chargor hereby irrevocably agree that the laws of Hong Kong are not
its exclusive jurisdiction.

      

      18.2      
 This Charge does not limit the Chargee to arise any legal processes
towards the Chargor in other country or district court which has jurisdiction,
and does not limit any delivery method allowed. The Chargee may file a lawsuit
in one or a few countries or districts courts which has jurisdiction, and can
file a lawsuit in other country or district court which has jurisdiction, no
matter they are filed at the same time or not. The Chargor hereby irrevocably
waives any objection to any proceedings in any such courts on the basis of forum
non-convenience.  The Chargor agrees that a judgment in any
proceedings brought in any such courts may be enforced in any other jurisdiction
by suit on the judgment or in any other manner permitted by law.

      

      18.3 The
Chargor hereby consents to the service of process out of the courts of Hong Kong
by the mailing of a copy or notice thereof by postage prepaid mail to the
address of the Chargor from time to time designated by the Chargor to the
Chargee pursuant to Clause 17.1(2) and confirms that failure by the Chargor to
receive such copy or notice shall not prejudice due service.

      
        
           

        

        
          - 17
-

          
            

          

        

        
           

        

      

      

      IN WITNESS whereof the Chargor
has executed this Charge the day and year first above written

      

      Chargor

      
        
          	
                  Signed,
      sealed and delivered by

                	
                  )

                
	
                  For
      and on behalf of

                	
                  )

                
	
                  VITAL
      GLEE DEVELOPMENT LIMITED

                	
                  )

                
	
                  in
      the presence of:

                	
                  )

                

        

      

      

      Chargee

      
        
          	
                  Signed,
      sealed and delivered by

                	
                  )

                
	
                  For
      and on behalf of

                	
                  )

                
	
                  Jinheng
      Automotive Safety Technology

                	
                  )

                
	
                  Holdings
      Limited

                	
                  )

                
	
                  in
      the presence of:

                	
                  )

                

        

      

      
        
           

        

        
          - 18
-

          
            

          

        

        
           

        

      

      Attachment
I

       

      Instrument
of Transfer

      
          

          

        

      

       

      Jinheng
(BVI) Limited

      
         

        
          

        

      

       

      VITAL GLEE DEVELOPMENT
LIMITED,a company
incorporated in British Virgin Islands which registered office is at P.O. Box
438, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
(the “Transferor”) for
value received, subject to the several conditions upon which the Transferor
holds the same at the time of execution hereof, do hereby transfer
the               shares
of HK$0.01 each standing in the name of the Transferor in the register of
Jinheng (BVI) Limited (the “Company”) to Jinheng
Automotive safety Technology Holdings Limited which registered office is at
Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman
Islands (the “Transferee”)。

       

      The
Transferee does hereby agree to take the said shares subject to the same
conditions.

      

      Date:

       

      
        
          
            
              
                
                  	
                          Transferor

                        	 
      	
                          Transferee

                        
	 
      	 
      	 
      
	 
      	 
      	 
      

                

              

            

          

        

      

      
        
           

        

        
          - 19
-

          
            

          

        

        
           

        

      

      

      Attachment
II

       

      Resignation
Letter

       

      Date:

       

      
        	
                To:

              	
                Jinheng
      (BVI)
Limited

              

      

      The board
of directors

       

      To Whom it May
Concern:

       

      I,                  
(I.D. Card no.     
                ),hereby
unconditionally and irrevocably
resign the directorship in the Jinheng (BVI) Limited (the
“Company”)  with effective
on                               .

       

      I confirm
that I have no claim against the Company in respect of compensation, salaries,
expenses, loss or others.

       

      
        
          	
                  Signed
      and delivered by

                	
                  )

                
	
                  In
      the witness of

                	
                  )

                

        

      

      
        
           

        

        
          - 20
-

          
            

          

        

        
           

        

      

      

      Attachment
III

       

      Written
Resolution of Change of Directors

       

      Jinheng
(BVI) Limited (the “Company”)

      (Incorporated
in the British Virgin Islands with limited liability)

       

      WRITTEN
RESOLUTION OF THE BOARD OF DIRECTORS OF THE COMPANY (“BOARD”) IN ACCORDANCE WITH
THE ARTICLES OF THE COMPANY AS AT [ ]

       

      
        	
                1.

              	
                Change
      of
directors

              

      

       

      There was
tabled the following documents for this resolution

       

      
        	
                 
      

              	
                (1)

              	
                A directorship
      resignation letter signed on [ ];

              

      

       

      
        	
                 
      

              	
                (2)

              	
                A directorship
      resignation letter signed on [ ];

              

      

       

      
        ([ ] and[
], collectively “Resigned Directors”)

      

       

      
        	
                 
      

              	
                After
      careful consideration of the documents tabled, it was unanimously resolved
      that:

              

      

       

      
        	
                 
      

              	
                (1)

              	
                Accept
      the resignation of the Resigned Directors with effective on the date of
      this resolution passed; and

              

      

       

      
        	
                 
      

              	
                (2)

              	
                Agreed
      to appoint the following person as the director of the Company with
      effective on the date of this resolution
  passed:-

              

      

       

      
        
          
            
              	 
      	 
      	 
      
	
                        Name:

                        Date:

                    	 
      	
                        Name:

                        Date:

                    

            

          

        

      

      
        
           

        

        
          - 21
-

          
            

          

        

        
           

        

      

      

      Attachment
IV

       

      Written
Resolution of Share Transfer

       

      Jinheng
(BVI) Limited (the “Company”)

      (Incorporated
in the British Virgin Islands with limited liability)

       

      WRITTEN
RESOLUTION OF THE BOARD OF DIRECTORS OF THE COMPANY (“BOARD”) IN ACCORDANCE WITH
THE ARTICLES OF THE COMPANY AS AT [ ]

      

      
        	
                1.

              	
                Transfer of
      Shares

              

      

      subject
to the relevant Bought and Sold Notes and Instrument of Transfer duly executed
and stamped, after careful consideration and discussion, the Board agreed the
following transfer of shares:

      

      
        
          
            
              	
                      Transferor

                    	 
      	
                      Transferee

                    	 
      	
                      No. of shares

                    
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                      Jinheng
      Automotive

                    	 
      	 
      
	 
      	 
      	
                      Safety
      Technology

                    	 
      	 
      
	 
      	
                        

                    	
                      Holdings
      Limited

                    	
                        

                    	 
      

            

          

        

      

      

      The Board
authorizes any one director of the Company to execute the share certificate for
____________________________in related to the new shares and that the seal of
the Company be affixed thereon, and enter the name of the Transferee to the
register of members of the Company as the register holder of
_______________share of the Company.

      

      
        The Board
also approves to cancel the ____________________shares issued
to_______________________.

      

      

      
        
          
            	 
      	 
      	 
      
	
                      Name:

                      Date:

                  	 
      	
                      Name:

                      Date:

                  

          

        

      

      

      
        [Remarks]
This document is the translation from original in Chinese, and all contents are
subject to the original version with signatures.

      

      
         

        
          
            
            

          

          
            - 22
-

            
              

            

          

          
            
            

          

        

      

    

    
      Attachment
V

    

    

    English Summary of Trademark
License Agreement

    
      

      This
agreement is signed on the date of July 10, 2010 by the following two
parties:

      

      
        	
                (1)

              	
                Jinheng
      Automotive Safety Technology Holdings Limited, a corporation duly formed
      under the laws of the People Republic of China, with its registered and
      operating place at No. 16, Block 4, Bohai Street, Economic and Technology
      Development Zone, Jinzhou City, Liaoning Province of PRC.(the owner of
      trademark, hereinafter refers to “the owner of
  trademark”)

              

      

      

      
        	
                (2)

              	
                Jinheng
      Automotive Eletronic (HongKong) Limited, a corporation duly formed under
      the laws of the People Republic of China, with its registered place at
      Floor 14 Printing House, 6 Duddell Street, Central HongKong (the licensee
      of trademark, hereinafter refers to “the licensee of
      trademark”)

              

      

      

      Whereas,

       

      Jinheng
Automotive Safety Technology Holdings Limited, a corporation duly formed under
the laws of the People Republic of China, with its registered and operating
place at No. 16, Block 4, Bohai Street, Economic and Technology Development
Zone, Jinzhou City, Liaoning Province of PRC, which is the owner of all
trademarks listed in Appendix 1 (hereinafter refers to “the licensed
trademark”)

      

      The
licensee desires to utilize the Name in China upon and in connection with the
goods, services ( hereinafter refers to “goods and services”) prescribed in
Appendix 2 and Appendix 3 hereinafter described, which was granted by the
owner.

      

      Now,
therefore, in consideration of the mutual promises herein contained, it is
hereby agreed:

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      Definition

      

      Unless
otherwise specified in writing by the Parties, the following terms in this
Agreement shall be interpreted to have the following meanings:

      

      
        Independent
shareholder   for the purpose of approving the Disposal,
Shareholders other than the Purchaser and its associate, including but not
limited to the Controlling Shareholder; and (ii) for the purpose of approving
the Supply Agreements, Shareholders other than Mr. Zhao and Wonder Auto
Technology and their respective associates, including the Controlling
Shareholder

      

      HKEx                     means
Hong Kong Exchanges and Clearing Limited

      Listing
Rules         The Rules
Governing the Listing of Securities on the HongKong Stock Exchange

      

      
        “Equity
transfer Agreement” is signed by the Listing Company as the seller, and
Vital Glee Development Limited as the buyer, and Vital Glee Development Limited
hereby consents to acquire and the Listing Company consens to sell all the
outstanding shares issued by Jinheng BVI.

      

      

      
        
          	
                  1.

                	
                  (a)

                	
                  WHEREAS,
      Licensee had paid 1 Renminbi as the licensed fee to the owner, owner
      hereby grants to Licensee to utllize such Licensed Trademarks during the
      Licensed Term and in the Licensed Territory for the purpose of provision
      of Licensed Services.

                

        

      

      

      
        	
                  

              	
                (b)

              	
                The
      licensee is granted to have the non-exclusive right to utlize the
      Trademarks by this agreement.

              

      

       

      
        	
                  

              	
                (c)

              	
                Any
      amendments or supplements to this Agreement shall take effect if any
      amendments or supplements to the licensed trademark during the Licensed
      Territory for the purpose of provision of Licensed Services. If necessary,
      parties consent to sign a new trademark license
  agreement.

              

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      
        	
              	
                (d)

              	
                The
      licensee hereby is granted to relicense the rights and obligations, and
      upon the licensed trademarks to third parties (including but not limited
      the subsidiaries and the affiliates to the licensee) without the prior
      consent by the owner. Relicense will terminate at the termination of this
      contact.

              

      

      

      
        	
              	
                (e)

              	
                Any
      corresponding amendments and supplements should not be made to this
      agreement upon the any amendments and supplements made to the trademark
      appendixes by the parties.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                In
      addition to The License Fee under Article 1(a), nothing shall be hereof
      paid by the licensee. Any royalties upon the goods and the services hereby
      shall not be paid by the licensee.

              

      

      

      
        
          	
                  2.

                	
                  
                    (a)    The
      licensee has undertaken with the owner that it will only use the licensed
      Trademarks on specified products, and the owner also consents not to use
      the licensed trademarks other than the automobile safety airbags system
      and safety belts system business, and not to relicense the trademarks to
      the independent third parties. It is also agreed under the Trademark
      Licence Agreement that the owner will not use the licensed trademark upon
      the specified goods and services to aviod competition with eh
      licensee.

                  

                

        

      

      

      
        	
                 
      

              	
                (b)    The
      owner irrecoverably and unconditioned promises to take all legal actions
      to ensure (i) who be duly the sole owner of the licensed trademark, (ii)
      who duly has the sole right to utilize the licensed trademark, except
      prescribed herein, (iii) ensuring no mortgage on the licensed trademake,
      except prescribed herein, and (iv) ensure no infringement on the
      Intelligence Property owned by independent third
  parties.

              

      

      

      
        	
                 
      

              	
                (c)   The
      owner irrecoverably and unconditioned promises to take all legal actions
      to ensure validity of the trademark to protect the bilateral common
      interests.

              

      

      

      
        
          	
                   
      

                	
                  
                    (d)   Documents,
      information and data in respect of the licensed trademark should be
      provided upon the request of the
licensee.

                  

                

        

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        
        

      

      
        	
                3.

              	
                Any
      changes to the letter, pattern, combinations in connection of the trade
      mark should be forbiddened without permission in writing by the
      owner.  Licensee could not use Such Licensed Trademarks should
      not be utlized byond the scope of the goods and
  services.

              

      

      
        	
                4.

              	
                Printing
      the licensed trademarks on the licensee’s own is granted by the
      owner.

              

      

      
        	
                5.

              	
                Once
      any infringements by any third parties of the rights contained in the
      Licensed Trademarks found, notification should in no time made to the
      owner. No action should be done by the licensee without consent in writing
      by owner.

              

      

      
        	
                6.

              	
                The
      ownership and legal interest of the owner on the licensed trademark is
      ensured by the licensee. Any infringements made by the licensee upon the
      licensed trademark in any form should be forbidden, especially expression
      of ownership of the licensee should be
  forbidden.

              

      

      

      
        	
                7.

              	
                (a) The Trademark
      Licence Agreement shall become effective upon the following conditions
      precedent being satisfied:

              

      

      
        	
                 
      

              	
                (i)
      the passing by the Independent Shareholders at the EGM of the necessary
      resolution to approve by the independent shareholders of the licensee,
      Jinheng Automotive Safety Technology Holdings Limted the transactions
      contemplated thereunder, including but not limited to the Trademark
      Licence Agreement;

              

      

      

      
        	
                 
      

              	
                (ii)
      All the pre-requisite to the Equity Transfer Agreement should be
      satisfied; and

              

      

      

      (iii)the
consents and authorizations necessarily required to be obtained on the part of
Jinzhou Jinheng and Jinheng Electronic HK in respect of the Trademark Licence
Agreement and the transactions contemplated thereunder having been
obtained.

      

      
        
          	  	
                  (b) 

                	
                  The
      agreement will be terminated if the pre-requsites prescribed in the 7(a)
      upon or before December 31, 2010, excluding the breach before the
      termination. Parties should not undertake the responsibilites and
      obligations.

                

        

      

       

      
        	  	
                
                  (c)

                

              	
                Written notification
      can be given by the owner to terminate the licensed term, if one of the
      following conditiones occur, without considering the above presribed.

              

      

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      
         

      

      
        	
                 
      

              	
                i)

              	
                Unable
      to perform the obligations prescribed under the agreement, and taking no
      actions to remedy the bereach within 30
days.

              

      

      

      
        	
                 
      

              	
                ii)

              	
                Being
      insolvent in maturity debt, or being insolvent in maturity debt in written
      form, or being unable to allocate the profit
  payable.

              

      

      

      
        	
                 
      

              	
                iii)

              	
                To
      file a petition in bankrupcy by
licensee.

              

      

      
        	
                 
      

              	
                iv)

              	
                Being
      adjudicated a bankrupt by the Licensee or if a petition in bankruptcy is
      filed against Licensee,

              

      

      

      
        	
                 
      

              	
                v)

              	
                existing
      normal operating can not be continued by the licensee as the result of the
      government, law and political
systems.

              

      

      

      
        	
                 
      

              	
                7.

              	
                The
      agreement will come into effect upon the date of pre-requsites prescribed
      in Article 7(a) are satisfied, will be effective during the licensed
      term.

              

      

      
        
        

      

       

      9.           The
agreement is govermed and constructed under the laws of the PRC.

      

      [signature
page follows]

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

      
        
          
            
              	
                      Owner’s
      signature and seal

                    
	 
      
	
                      Name,

                    
	
                      Title,

                    
	
                      Date,

                    
	 
      
	
                      Licensee’
      s signiture and seal

                    
	 
      
	
                      Name

                    
	
                      Title

                    
	
                      Date,

                    

            

          

        

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      Appendix
I

      

      Licensed Trademark

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      Appendix
II

      

      Applied
Commodity

      

      The design, manufacture and
sales of auto parts (not including but not limited to, auto safety products) and
other products, but not including auto safety airbag system and auto seat belt
system.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      Appendix
III

      

      Applied
Service

      

      To provide inspection
services, and issuing inspection reports, development and design for auto parts
(not including but not limited to, auto safety products) and other products, but
not including auto safety airbag system and auto seat belt
system.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    
      Attachment
VI

    

    

    
      Part
A

    

    

    Great Idea Supply
Agreement

     

    
      
        Date:
July 10, 2010

        __________________________

         

        English
Summary of Supply Agreement

        __________________________

        

        Between

        

        Beijing
Jinheng Great Idea Auto Electronic System Co., Ltd.

        (as
Supplier)

        

        And

        

        Jinzhou
Jinheng Automobile Safety System Co., Ltd.

        (as
Buyer)

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        Contents 

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  No.

                                                	
                                                  Clause

                                                	 
	 
      	 
      	 
	
                                                  1.

                                                	
                                                  Definition

                                                	 
	 
      	 
      	 
	
                                                  2.

                                                	
                                                  Pre-conditions

                                                	 
	 
      	 
      	 
	
                                                  3.

                                                	
                                                  Supply

                                                	 
	 
      	 
      	 
	
                                                  4.

                                                	
                                                  Price
      and payment terms

                                                	 
	 
      	 
      	 
	
                                                  5.

                                                	
                                                  Delivery
      and acceptance

                                                	 
	 
      	 
      	 
	
                                                  6.

                                                	
                                                  Notice
      and delivery

                                                	 
	 
      	 
      	 
	
                                                  7.

                                                	
                                                  Effective,
      validity, termination and covenant

                                                	 
	 
      	 
      	 
	
                                                  8.

                                                	
                                                  Force
      majeure

                                                	 
	 
      	 
      	 
	
                                                  9.

                                                	
                                                  Default

                                                	 
	 
      	 
      	 
	
                                                  10.

                                                	
                                                  Agreement
      characteristic

                                                	 
	 
      	 
      	 
	
                                                  11.

                                                	
                                                  Dispute
      settlement

                                                	 

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          
  

        Execution
_____________________________________________________

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        This
supply agreement was singed on July 10, 2010 between by:

        

        
          
            	
                    (1)

                  	
                    Beijing
      Jinheng Great Idea Auto Electronic System Co., Ltd. (and / or its
      affiliated companies,
      hereinafter referred as “Supplier”) , a corporation duly formed under the
      laws of People Relisting of China, with its registered place at 38-2, No.2
      Jingyuan North Street, Eco. & Tech. Development Zone, Beijing,
      China.

                  

          

        

        

        
          
            	
                    (2)

                  	
                    Jinzhou
      Jinheng Automobile Safety System Co., Ltd. (and / or its affiliated
      companies,
      hereinafter referred as “Buyer”) , a corporation duly formed under the
      laws of People Relisting of China, with its registered place at No.16,
      Block 4, Bohai Street, Eco. & Tech. Development Zone, Jinzhou City,
      Liaoning Province, China.

                  

          

        

        

        Whereas,

        

        
          	
                  1.

                	
                  The
      Supplier is mainly engaged in R&D, designing, manufacturing and
      selling of Auto electronic facilities and suppling service in Auto
      electronic control technologies.

                

        

        

        
          	
                  2.

                	
                  The
      Buyer is mainly engaged in designing, manufacturing and selling of Auto
      air bag system and safety belt
system.

                

        

        

        
          	
                  3.

                	
                  The
      Supplier is willing to supply (including manufacturing and / or selling),
      in accordance with the items in this agreement, auto electronic parts to
      Buyer. Buyer is also willing to buy related goods from
      Supplier.

                

        

        

        Now,
therefore, both parties, on the base of mutual benefit, it is hereby
agreed:

        

        
          	
                  1.

                	
                  Definition

                

        

        

        Unless
otherwise specified in writing by the Parties, the following terms in this
Agreement shall be interpreted to have the following meanings:

        

        
          
            
              
                
                  
                    	
                            1.1

                          	
                            “China”,  the
      People’s Relisting of China excluding Hong Kong, Macau
      and
      Taiwan for the purpose of this
agreement.

                          

                  

                

              

            

          

        

        

        
          
            
              
                
                  	
                          1.2

                        	
                          “Force
      majeure”, Nature disasters like earthquake, typhoon, floods, or other
      severe
      weather, etc. or objective conditions like fire, social chaos, war, strike
      that could not be forecasted or
avoided.

                        

                

              

            

          

        

        

        
          
            
              
                
                  	
                          1.3

                        	
                          “Independent
      shareholder”, for the purpose of approving the Disposal, Shareholders
      other than the Purchaser and its associate, including but not limited to
      the Controlling
Shareholder;.

                        

                

              

            

          

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

        
          	
                  1.4

                	
                  “Effective
      Term”,  Effective period described in clause
  7.

                

        

        

        
          	
                  1.5

                	
                  “Goods”,  products
      that Supplier and Buyer agree to supply and
  purchase.

                

        

        

        
          	
                  1.6

                	
                  “HK Ex”,  means Hong
      Kong Exchanges and Clearing
Limited.

                

        

        

        
          
            	
                    1.7

                  	
                    “Listing
      rules”, the Rules Governing the Listing of Securities on the
      Hong Kong
      Stock Exchange.

                  

          

        

        

        
          	
                  1.8

                	
                  “Affiliates”, 
      defined as Chapter 1 of listing
rules.

                

        

        

        
          	
                  1.9

                	
                  “Business
      day”,  days in Chinese Solar calendar excluding legal
      holidays.

                

        

        

        
          
            	
                    1.10

                  	
                    “HK
      dollar”,   legal currency used in Hong Kong Special
      Administrative Region.

                  

          

        

        

        
          
            	
                    1.11

                  	
                    “Equity
      transfer Agreement”,  signed by the Listing Company as the
      seller, and
      Vital Glee Development Limited as the Buyer, and Vital Glee Development
      Limited hereby consents to acquire and the Listing Company consens to sell
      all the outstanding shares issued by Jinheng
  BVI..

                  

          

        

        

        
          	
                  2.

                	
                  Pre-conditions

                

        

        

        
          	
                  2.1

                	
                  This
      agreement will come into effect upon following pre-requsites being
      satisfied,

                

        

        

        
          	
                   
      

                	
                  (i)

                	
                  the
      passing by the Independent Shareholders at the EGM of the necessary
      resolution to approve by the independent shareholders of Jinheng
      Automotive Safety Technology Holdings Limted (listing company)
      ;

                

        

        

        
          	
                   
      

                	
                  (ii)

                	
                  All
      the pre-requisite to the Equity Transfer Agreement should be satisfied;
      and

                

        

        

        
          	
                   
      

                	
                  (iii)

                	
                  consents
      and authorizations necessarily required to be obtained in respect of the
      supply agreement and the transactions contemplated thereunder having been
      obtained.

                

        

        
          	
                  2.2

                	
                  Both
      parties should try their best to meet the pre-requsites described in
      Article 2.1, especially provide all information and documents required by
      the laws, regulations, rules to the Supplier, HKEx and other regulation
      agencies.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  2.3

                	
                  The
      agreement will be terminated if the pre-requsites prescribed in the 7(a)
      upon or before December 31, 2010, excluding the breach before the
      termination. Parties should not undertake the responsibilites and
      obligations.

                

        

        

        
          	
                  3.

                	
                  Supply

                

        

        

        
          	
                  3.1

                	
                  Buy
      should purchase the goods under the order of the agreement during the
      term, in accordance with the items and conditions prescribed in the
      agreement.

                

        

        

        
          	
                  3.2

                	
                  Supplier
      shall manufacture and sell the goods under the order of the agreement
      during the term in accordance with the items and conditions prescribed in
      the agreement.

                

        

        

        
          	
                  4.

                	
                  Price and
      Payments

                

        

        

        
          	
                  4.1

                	
                  Otherwise
      a new supply agreement signed, the price should be set under the fair
      value each month.

                

        

        

        
          	
                  4.2

                	
                  Supplier
      should release invoice for the goods they submit to Buyer and Buyer should
      pay for it in 30 days starting from the invoice
  date.

                

        

        

        
          	
                  4.3

                	
                  From
      the effective date of this agreement to December 31, 2010 and the year of
      2011 and 2012, the total annual amount that Buyer should purchase from
      Supplier should not exceed RMB50 million, RMB70 million and RMB90
      million.

                

        

        

        
          	
                  5.

                	
                  Delivery and
      acceptance

                

        

        

        
          	
                  5.1

                	
                  Supplier
      should try to comply with delivery date prescribed in the detailed
      agreement, and Buyer reserve the right to pursue legal actions against the
      Supplier except the item 8 below.

                

        

        

        
          	
                  5.2

                	
                  Delivery
      destination given in written form to the Supplier will be nominated by the
      Buyer. All freights specified in this agreement are imposed upon the Buyer
      to avoid dispute.

                

        

        

        
          	
                  5.3

                	
                  If
      any unconformity with the order was found by the Buyer, notification
      should be given by the Buyer to explain the reason of being unconformity
      upon arriving at the destination
place.

                

        

        

        
          	
                  5.4

                	
                  If
      notification was no given stated as above, the goods will be understood as
      qualified in every respect, the Buyer will be understood to accept the
      delivery of goods, and no legal repesponsibilites will be impose upon the
      Supplier.

                

        

        

        
          	
                  5.5

                	
                  All
      risks and liabilities will be transferred to Buyer when goods arrived in
      delivery destination,

                

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  6.

                	
                  Notice and
      Delivery

                

        

        

        
          	
                  6.1

                	
                  All
      notices or other materials released from one party to another under the
      requirements of the agreement can be sent to the other side by fax or
      post. The address and fax number are as
follows:

                

        

        

        To the
Supplier:

        Beijing
Jinheng Greatidea Auto Electronical System Co., Ltd.

        Address:
38-2, No.2 Jingyuan North Street, Eco. & Tech. Development Zone, Beijing,
China

        Fax:
010-67856562

        

        To the
Buyer:

        Jinzhou
Jinheng Automobile Safety System Co., Ltd.

        Address:
No.16, Section 4, Bohai Street, Eco. & Tech. Development Zone, Jinzhou,
Liaoning, China

        Fax:
0416-3585717

        

        
          	
                  6.2

                	
                  The
      materials sent by post will be regarded as received seven days after
      posting if the mail were not rejected to the
  Supplier.

                

        

        

        
          	
                  6.3

                	
                  The
      materials sent by fax will be regarded as received on the same day if the
      sender received confirmation.

                

        

        

        
          	
                  7.

                	
                  Effective, Term,
      Termination and Covenant

                

        

        

        
          	
                  7.1

                	
                  This
      agreement will come into effect from the date of pre-requsites being
      satisfied to December 31, 2012 under the requirement of the Article
      2.

                

        

        

        
          	
                  7.2

                	
                  During
      the term, Supplier should terminate agreement in written form under the
      condition of no approval of Supplier, their listing company or shareholder
      of listing company. This agreement will be terminated on the day of Buyer
      receiving Supplier’s notice.

                

        

        

        
          	
                  7.3

                	
                  Under
      the condition of no influence of Article 7.2, during the term, one party
      breaks agreement term continually and badly, and no supplement in 30 days,
      the other party has right to terminate this agreement in written
      form.

                

        

        

        
          	
                  7.4

                	
                  During
      the validity, the agreement will terminate in any below
      conditions:

                

        

        
          
            	 	 	 
	
                      
      

                  	
                    (i)

                  	
                    One
      party is announced bankrupt;

                  
	 	 	 

          

        

        
          	
                   

                	
                  (ii)

                	
                  One
      party is liquidation (excluding the purpose of merger,
      restructuring);

                

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                    

                	
                  (iii)

                	
                  One
      party stops operation or will stop
operation.

                

        

        

        
          	
                  7.5

                	
                  Failure,
      delay of the payee to exercise any right or any partial right under this
      regulation shall not operate as a waiver
  thereof.

                

        

        

        
          	
                  7.6

                	
                  The
      termination right in Article 7.3 is no influence of disobeyed side’
      recognized right
      or right to compensation (if
applicable).

                

        

        

        
          	
                  7.7

                	
                  Both
      parties commit that permit the auditors of the listing company to audit
      the accounts of agreement deals, to release report on the transaction
      under the agreement..

                

        

        

        
          	
                  8.

                	
                  Force
      majeure

                

        

        

        
          	
                  8.1

                	
                  The
      force majeure side can exempt responsibility of default, and inform the
      other side in official certificate
form.

                

        

        

        
          	
                  9.

                	
                  Default

                

        

        

        
          	
                  9.1

                	
                  Compensation
      should be made by the default party to the other for the exonomic losses
      incurred.

                

        

        

        
          	
                  9.2

                	
                  Penalty
      should be paid by default party to the other for the breach of the
      agreement under the laws and
regulations.

                

        

        

        
          	
                  10.

                	
                  Nature of
      Agreement

                

        

        

        
          	
                  10.1

                	
                  It
      is agreed that Buyer has right to request Supplier to supply goods as they
      required; Suppler have right to share and performance its right and
      responsibility with their nominated
company.

                

        

        

        
          	
                  10.2

                	
                  No
      partenership between the Buyer and the Supplier will be formed by this
      agreement.

                

        

        

        
          	
                  10.3

                	
                  This
      agreement includes all the terms between Supplier and Buyer, supersedes
      former agreements. Otherwise authorize in written form by two parties, it
      can not be revised.

                

        

        

        
          	
                  10.4

                	
                  Both
      parties conform that, both parties have no other promise or terms except
      articles required by the agreement.

                

        

        

        
          	
                  10.5

                	
                  If
      any term in this agreement is identified by any Court or other official
      agency as invalidity or partial invalidity, and other terms are valid to
      effect

                

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  11.

                	
                  Dispute
      Settlement

                

        

        

        
          	
                  11.1

                	
                  This
      agreement is governed and construted under the laws of People Republic of
      China.

                

        

        

        
          	
                  11.2

                	
                  Both
      parties should settle the dispute on the basis of friendly discussion. Any
      party can litigate to presidial People’ Court if no settlement can be
      made.

                

        

        

        This
agreement may be excuted by parties hereto in quadruplicate, and come into
effect by signiture of the authorized representatives and seal of the
parties.

        

        [signature
page follows]

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        The
Supplier:

        Beijing
Jinheng Great Idea Auto Electronic System Co., Ltd.

        

        Signature:

        

        The
Buyer:

        Jinzhou
Jinheng Automobile Safety System Co., Ltd.

        

        Signature:

        

        [Remarks]
This document is the translation from original in Chinese, and all contents are
subject to the original version with signatures.

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

    

    
      Attachment
VI

    

    

    
      Part
B

    

    

    Winner Supply
Agreement

     

    
      Date:
July 10, 2010

      __________________________

       

      English
Summary of Supply Agreement

      __________________________

      

      Between

      

      Shanxi
Winner Auto Parts Co., Ltd.

      (as
Supplier)

      

      And

      

      Jinzhou
Jinheng Automobile Safety System Co., Ltd.

      (as
Buyer)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Contents

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        No.

                                      	
                                        Clause

                                      
	 	 
	
                                        1.

                                      	
                                        Definition

                                      
	 	 
	
                                        2.

                                      	
                                        Pre-conditions

                                      
	 	 
	
                                        3.

                                      	
                                        Supply

                                      
	 	 
	
                                        4.

                                      	
                                        Price
      and payment terms

                                      
	 	 
	
                                        5.

                                      	
                                        Delivery
      and acceptance

                                      
	 	 
	
                                        6.

                                      	
                                        Notice
      and delivery

                                      
	 	 
	
                                        7.

                                      	
                                        Effective,
      validity, termination and covenant

                                      
	 	 
	
                                        8.

                                      	
                                        Force
      majeure

                                      
	 	 
	
                                        9.

                                      	
                                        Default

                                      
	 	 
	
                                        10.

                                      	
                                        Agreement
      characteristic

                                      
	 	 
	
                                        11.

                                      	
                                        Dispute
      settlement

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      Execution
_________________________________________________

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      This
supply agreement was singed on July 10, 2010 between by:

      

      
        	
                (1)

              	
                Shanxi
      Winner Auto Parts Co., Ltd. (and / or its affiliated companies,
      hereinafter referred as “Supplier”) , a corporation duly formed under the
      laws of People Relisting of China, with its registered place at No. 12,
      Wuluo Street, Taiyuan E&D Zone, Shanxi Province,
  China.

              

      

      

      
        	
                (2)

              	
                Jinzhou
      Jinheng Automobile Safety System Co., Ltd. (and / or its affiliated
      companies, hereinafter referred as “Buyer”) , a corporation duly formed
      under the laws of People Relisting of China, with its registered place at
      No.16, Block 4, Bohai Street, Eco. & Tech. Development Zone, Jinzhou
      City, Liaoning Province, China.

              

      

      

      Whereas,

      

      
        	
                1.

              	
                The
      Supplier is mainly engaged in R&D, designing, manufacturing and
      selling of Auto safety airbag inflator and other auto
    parts.

              

      

      

      
        	
                2.

              	
                The
      Buyer is mainly engaged in designing, manufacturing and selling of Auto
      air bag system and safety belt
system.

              

      

      

      
        	
                3.

              	
                The
      Supplier is willing to supply (including manufacturing and / or selling),
      in accordance with the items in this agreement, auto safety airbag
      inflator and other auto parts to Buyer. Buyer is also willing to buy
      related goods from Supplier.

              

      

      

      Now,
therefore, both parties, on the base of mutual benefit, it is hereby
agreed:

      

      
        	
                1.

              	
                Definition

              

      

      

      Unless
otherwise specified in writing by the Parties, the following terms in this
Agreement shall be interpreted to have the following meanings:

      

      
        	
                1.1

              	
                “China”,  the
      People’s Relisting of China excluding Hong Kong, Macau and Taiwan for the
      purpose of this agreement.

              

      

      

      
        	
                1.2

              	
                “Force
      majeure”, Nature disasters like earthquake, typhoon, floods, or other
      severe weather, etc. or objective conditions like fire, social chaos, war,
      strike that could not be forecasted or
avoided.

              

      

      

      
        	
                1.3

              	
                “Independent
      shareholder”, for the purpose of approving the Disposal, Shareholders
      other than the Purchaser and its associate, including but not limited to
      the Controlling Shareholder;.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                1.4

              	
                “Effective
      Term”, Effective period described in clause
7.

              

      

      

      
        	
                1.5

              	
                “Goods”,
      products that Supplier and Buyer agree to supply and
    purchase.

              

      

      

      
        	
                1.6

              	
                “HK Ex”, means Hong Kong
      Exchanges and Clearing Limited.

              

      

      

      
        	
                1.7

              	
                “Listing
      rules”, the Rules Governing the Listing of Securities on
      the Hong Kong Stock
Exchange.

              

      

      

      
        	
                1.8

              	
                “Affiliates”, defined
      as Chapter 1 of listing rules.

              

      

      

      
        	
                1.9

              	
                “Business
      day”, days in Chinese Solar calendar excluding legal
    holidays.

              

      

      

      
        	
                1.10

              	
                “HK
      dollar”, legal currency used in Hong Kong Special Administrative
      Region.

              

      

      

      
        	
                1.11

              	
                “Equity
      transfer Agreement”,  signed by the Listing Company as the
      seller, and Vital Glee Development Limited as the Buyer, and Vital Glee
      Development Limited hereby consents to acquire and the Listing Company
      consens to sell all the outstanding shares issued by Jinheng
      BVI..

              

      

      

      
        	
                2.

              	
                Pre-conditions

              

      

      

      
        	
                2.1

              	
                This
      agreement will come into effect upon following pre-requsites being
      satisfied,

              

      

      

      
        	
                 
      

              	
                (i)

              	
                the
      passing by the Independent Shareholders at the EGM of the necessary
      resolution to approve by the independent shareholders of Jinheng
      Automotive Safety Technology Holdings Limted (listing company)
      ;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                All
      the pre-requisite to the Equity Transfer Agreement should be satisfied;
      and

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                consents
      and authorizations necessarily required to be obtained in respect of the
      supply agreement and the transactions contemplated thereunder having been
      obtained.

              

      

      

      
        	
                2.2

              	
                Both
      parties should try their best to meet the pre-requsites described in
      Article 2.1, especially provide all information and documents required by
      the laws, regulations, rules to the Supplier, HKEx and other regulation
      agencies.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                2.3

              	
                The
      agreement will be terminated if the pre-requsites prescribed in the 7(a)
      upon or before December 31, 2010, excluding the breach before the
      termination. Parties should not undertake the responsibilites and
      obligations.

              

      

      

      
        	
                3.

              	
                Supply

              

      

      

      
        	
                3.1

              	
                Buy
      should purchase the goods under the order of the agreement during the
      term, in accordance with the items and conditions prescribed in the
      agreement.

              

      

      

      
        	
                3.2

              	
                Supplier
      shall manufacture and sell the goods under the order of the agreement
      during the term in accordance with the items and conditions prescribed in
      the agreement.

              

      

      

      
        	
                4.

              	
                Price and
      Payments

              

      

      

      
        	
                4.1

              	
                Otherwise
      a new supply agreement signed, the price should be set under the fair
      value each month.

              

      

      

      
        	
                4.2

              	
                Supplier
      should release invoice for the goods they submit to Buyer and Buyer should
      pay for it in 90 days starting from the invoice
  date.

              

      

      

      
        	
                4.3

              	
                From
      the effective date of this agreement to December 31, 2010 and the year of
      2011 and 2012, the total annual amount that Buyer should purchase from
      Supplier should not exceed RMB190 million, RMB250 million and RMB320
      million.

              

      

      

      
        	
                5.

              	
                Delivery and
      acceptance

              

      

      

      
        	
                5.1

              	
                Supplier
      should try to comply with delivery date prescribed in the detailed
      agreement, and Buyer reserve the right to pursue legal actions against the
      Supplier except the item 8 below.

              

      

      

      
        	
                5.2

              	
                Delivery
      destination given in written form to the Supplier will be nominated by the
      Buyer. All freights specified in this agreement are imposed upon the Buyer
      to avoid dispute.

              

      

      

      
        	
                5.3

              	
                If
      any unconformity with the order was found by the Buyer, notification
      should be given by the Buyer to explain the reason of being unconformity
      upon arriving at the destination place. Any disputes arisen shall be
      settled within 60 days through discussion of both
  parties.

              

      

      

      
        	
                5.4

              	
                If
      notification was no given stated as above, the goods will be understood as
      qualified in every respect, the Buyer will be understood to accept the
      delivery of goods, and no legal repesponsibilites will be impose upon the
      Supplier.

              

      

      

      
        	
                5.5

              	
                All
      risks and liabilities will be transferred to Buyer when goods arrived in
      delivery destination,

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                6.

              	
                Notice and
      Delivery

              

      

      

      
        	
                6.1

              	
                All
      notices or other materials released from one party to another under the
      requirements of the agreement can be sent to the other side by fax or
      post. The address and fax number are as
follows:

              

      

      

      To the
Supplier:

      Shanxi
Winner Auto Parts Co., Ltd.

      
        Address:
No. 12, Wuluo Street, Taiyuan E&D Zone, Shanxi Province,
China.

      

      Fax:
0351-7560619

      

      To the
Buyer:

      Jinzhou
Jinheng Automobile Safety System Co., Ltd.

      
        Address:
No.16, Section 4, Bohai Street, Eco. & Tech. Development Zone, Jinzhou,
Liaoning, China

      

      Fax:
0416-3585717

      

      
        	
                6.2

              	
                The
      materials sent by post will be regarded as received seven days after
      posting if the mail were not rejected to the
  Supplier.

              

      

      

      
        	
                6.3

              	
                The
      materials sent by fax will be regarded as received on the same day if the
      sender received confirmation.

              

      

      

      
        	
                7.

              	
                Effective, Term,
      Termination and Covenant

              

      

      

      
        	
                7.1

              	
                This
      agreement will come into effect from the date of pre-requsites being
      satisfied to December 31, 2012 under the requirement of the Article
      2.

              

      

      

      
        	
                7.2

              	
                During
      the term, Supplier should terminate agreement in written form under the
      condition of no approval of Supplier, their listing company or shareholder
      of listing company. This agreement will be terminated on the day of Buyer
      receiving Supplier’s notice.

              

      

      

      
        	
                7.3

              	
                Under
      the condition of no influence of Article 7.2, during the term, one party
      breaks agreement term continually and badly, and no supplement in 30 days,
      the other party has right to terminate this agreement in written
      form.

              

      

      

      
        	
                7.4

              	
                During
      the validity, the agreement will terminate in any below
      conditions:

              

      

      
        	
                 
      

              	
                (i)

              	
                One
      party is announced bankrupt;

              

      

      
        	
              	
                (ii)

              	
                One
      party is liquidation (excluding the purpose of merger,
      restructuring);

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
              	
                (iii)

              	
                One
      party stops operation or will stop
operation.

              

      

      

      
        	
                7.5

              	
                Failure,
      delay of the payee to exercise any right or any partial right under this
      regulation shall not operate as a waiver
  thereof.

              

      

      

      
        	
                7.6

              	
                The
      termination right in Article 7.3 is no influence of disobeyed side’
      recognized right
      or right to compensation (if
applicable).

              

      

      

      
        	
                7.7

              	
                Both
      parties commit that permit the auditors of the listing company to audit
      the accounts of agreement deals, to release report on the transaction
      under the agreement..

              

      

      

      
        	
                8.

              	
                Force
      majeure

              

      

      

      
        	
                8.1

              	
                The
      force majeure side can exempt responsibility of default, and inform the
      other side in official certificate
form.

              

      

      

      
        	
                9.

              	
                Default

              

      

      

      
        	
                9.1

              	
                Compensation
      should be made by the default party to the other for the exonomic losses
      incurred.

              

      

      

      
        	
                9.2

              	
                Penalty
      should be paid by default party to the other for the breach of the
      agreement under the laws and
regulations.

              

      

      

      
        	
                10.

              	
                Nature of
      Agreement

              

      

      

      
        	
                10.1

              	
                It
      is agreed by both parties that the Buyer has right to request the Supplier
      to supply goods as they required; the Suppler has right to share and
      performance its right and responsibility with their nominated
      company.

              

      

      

      
        	
                10.2

              	
                No
      partenership between the Buyer and the Supplier will be formed by this
      agreement.

              

      

      

      
        	
                10.3

              	
                This
      agreement includes all the terms between Supplier and Buyer, supersedes
      former agreements. Otherwise authorize in written form by two parties, it
      can not be revised.

              

      

      

      
        	
                10.4

              	
                Both
      parties conform that, both parties have no other promise or terms except
      articles required by the agreement.

              

      

      

      
        	
                10.5

              	
                If
      any term in this agreement is identified by any Court or other official
      agency as invalidity or partial invalidity, and other terms are valid to
      effect

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                11.

              	
                Dispute
      Settlement

              

      

      

      
        	
                11.1

              	
                This
      agreement is governed and construted under the laws of People Republic of
      China.

              

      

      

      
        	
                11.2

              	
                Both
      parties should settle the dispute on the basis of friendly discussion. Any
      party can litigate to presidial People’ Court if no settlement can be
      made.

              

      

      

      This
agreement may be excuted by parties hereto in quadruplicate, and come into effect by
signiture of the authorized representatives and seal of the
parties.

      

      [signature
page follows]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      The
Supplier:

      Shanxi
Winner Auto Parts Co., Ltd.

      

      Signature:

      

      The
Buyer:

      Jinzhou
Jinheng Automobile Safety System Co., Ltd.

      

      Signature:

      

      [Remarks]
This document is the translation from original in Chinese, and all contents are
subject to the original version with signatures.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
      Attachment
VII

    

    

    Waiver
Agreement

     

    
      Date:
July 10, 2010

      

      Jinheng
Automotive Safety Technology Holdings Limited

      

      Takes

      

      Jinheng
BVI Limited

      

      As
beneficiary

      

      Waiver
Agreement

      

        
          
             

          

          
            
            

            
              

            

          

          
             

          

        

      This
agreement is duly signed on July 10, 2010 by:

      between

      Jinheng Automotive Safety Technology
Holdings Limited(“Jinheng Automotive”), a coporation duly formed under
the laws of Cayman Islands, registered office at Cricket Square, Hutchins Drive,
P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands, with its business place at
Unit 605, Beautiful Group Tower, 77, Connaught Road Central, Central, Hong
Kong.

      
        and

      

      Jinheng (BVI) Limited (Jinheng
BVI), a coproration duly formed under the laws of British Virgin Islands,
with its rigisgered office at P.O.Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands

      

      Whereas:

      
        
          	
                  (1) 

                	
                  As
      of the agreement date, Jinheng BVI and its subsidiaries (excluding Shanxi
      Winner Auto-Parts Limited and Shenyang Jinheng Jinsida Automobile
      Electronic Co., Ltd.) still owed non-current accounts(accounts receivable)
      to Jinheng Automotive and its subsidiaries (Jinheng
      Group)(excluding Jinheng BVI and its subsidiaries, but including
      Shanxi Winner Auto-Parts Limited and Shenyang Jinheng Jinsida Automobile
      Electronic Co., Ltd.). The accounts receivables includes, (i) investments in
      subsidiaries and acquisitions of assets by members of the Disposed Group
      but paid by the members of the Remaining Group ; and (ii) dividend
      declared by the Jinheng BVI but not yet paid to the Jinheng
      Automotive.

                

        

      

      
        
          	
                  (2) 

                	
                  Under
      this agreement, Jinheng Automotive should consent and waive the accounts
      receivable.

                

        

      

        

      Now
Therefore, the parties hereto agree as follows:

        

      
        	
                1.

              	
                Jinheng
      hereby Automotive irrecovably and unconditioned should consent to waive
      all the rights, ownership, equity and intereses, including any action to
      sign relavent documents and booking
records.

              

      

      
        	
                2.

              	
                Jinheng
      BVI hereby irrecovably and unconditioned should consent to waive all the
      rights, ownership, equity and intereses, including any action to sign
      relavent documents and booking
records.

              

      

      
        	
                3.

              	
                This
      agreement is governed and constructed under the laws of HongKong Special
      Administrative Region of the People’s Republic of China. Jinheng
      Automotive hereby irrecovably and unconditioned should agree to submit to
      the exclusive jurisdiction of Hong Kong
courts.

              

      

      
          

        This
agreement is signed on date of the first page of this
agreement

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      
        Jinheng
Automotive Safety Technology Holdings Limited

      

      

      
        By
authorized representavie____________

      

      

      
        Under the
witness____________________

      

      

      
        Signe and
Sealed

      

      

      
        Jinheng
(BVI) Limited

      

      

      
        By
authorized representavie

      

      

      
        Under the
witness

      

      

      
        Signe and
Sealed

      

      

      
        [Remarks]
This document is the translation from original in Chinese, and all contents are
subject to the original version with signatures.

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    
  

    IN WITNESS whereof it has
executed this Agreement the day and year first above written

    

    
      Seller

    

    
      	
              Signed,
      sealed and delivered by

            	
              )

            

    

    
      
        	
                For
      and on behalf of

              	
                )

              
	Jinheng Automotive Safety
      Technology 	) 

      

    

    
      	
              Holdings
      Limited

            	
              )

            

    

    
      
        	
                in
      the presence of:

              	
                )

              
	/s/
      CORPORATE SEAL	 

      

    

    

    Buyer

    
      
        	
                Signed,
      sealed and delivered by

              	
                )

              
	For
      and on behalf of	) 
	VITAL GLEE DEVELOPMENT
      LIMITED	) 

      

    

    
      
        	
                in
      the presence of:

              	
                )

              
	/s/
      CORPORATE SEAL

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}]]