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    STOCK
      PURCHASE AGREEMENT

     

    THIS
      STOCK PURCHASE AGREEMENT
      (the
“Agreement”),
      dated
      as of November 6, 2007, is made and entered into by and among Ng Chi Sum, holder
      of Hong Kong Identity Card No. D289522(7) and Yam Mei Ling, holder of Hong
      Kong
      Identity Card No. G265499(6) (each a “Shareholder”
and
      collectively, the “Shareholders”),
      solely for purposes of Article Six and Article
      Nine,
      China
      Architectural Engineering, Inc., a Delaware corporation (“CAE”),
      and
      Full Art International, Ltd., a Hong Kong corporation and wholly-owned
      subsidiary of CAE (“Full
      Art”).
      

     

    WITNESSETH:

     

    WHEREAS,
      the
      Shareholders own one hundred percent (100%) of the issued and outstanding shares
      in the capital of Techwell Engineering Limited, a limited liability company
      incorporated in Hong Kong with Company No. 113922 (“Techwell”),
      with
      the number of such shares owned by each of the Shareholders set forth opposite
      the names of the respective Shareholders in Section 3.01(b) of the disclosure
      schedule attached hereto as Exhibit
      A
      (“Techwell
      Disclosure Schedule”);

     

    WHEREAS,
      Techwell and the Techwell Subsidiaries (collectively, the “Techwell Group”)
      engage
      in the business of manufacturing and constructing external building facades,
      including roofing systems for buildings and curtain wall systems and accessories
      (the “Business”);
      and

     

    WHEREAS,
      Full
      Art desires to acquire from the Shareholders and the Shareholders desire to
      sell
      to Full Art all of the issued and outstanding shares in the capital of Techwell
      (the “Techwell
      Shares”)
      (the
“Techwell Acquisition”).

     

    NOW, THEREFORE,
      in
      consideration of the promises and the respective representations, warranties,
      covenants, agreements and conditions hereinafter set forth, Full Art, CAE and
      the Shareholders, intending to be legally bound hereby, agree as
      follows:

     

    ARTICLE
      ONE

    DEFINITIONS

     

    
      	 	
              1.01

            	
              Definitions.

            

    

     

    In
      this
      Agreement, the following terms shall have the meanings set forth below unless
      the context provides or requires otherwise:

     

    “1933
      Act”
means
      the Securities Act of 1933, as amended.

     

    “Affiliate”
      means,
      with respect to any person, any other person that, directly or indirectly,
      through one or more intermediaries, controls, is controlled by, or is under
      common control with such person. “Control” for this purpose means possession,
      directly or indirectly, of more than fifty percent (50%) of the voting power
      of
      a person.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Entity”
means
      any sole proprietorship, corporation, partnership of any kind having a separate
      legal status, limited liability company, business trust, unincorporated
      organization or association, mutual company, joint stock company or joint
      venture.

     

    “Environmental
      Law”
      means
      and includes all
      statutes, regulations, rules, policy, guidance, ordinances, codes, common law,
      licenses, permits, orders, approvals, plans, authorizations, concessions,
      franchises and similar items, of all Governmental Authorities and all judicial
      and administrative and regulatory writs, injunctions, decrees, judgments and
      orders to which Techwell or any Techwell Subsidiary or Full Art is a party
      or is
      otherwise directly bound, now or which becomes effective on or before the
      Closing Date relating to land use (other than zoning/planning), air, soil,
      surface water, groundwater (including the protection, cleanup, removal,
      remediation or damage thereof), human health and safety or any other
      environmental matter, including the following laws and all corresponding
      regulations and their equivalent or similar laws and regulations in any other
      jurisdiction, in each case as the same may be amended from time to time:
      Comprehensive Environmental Response, Compensation and Liability Act of 1980
      (CERCLA), 42 U.S.C. §§ 9601 et seq.; Federal Resource Conservation and Recovery
      Act, 42 U.S.C. §§ 6901 et seq.; Clean Water Act, 33 U.S.C. §§ 1251 et seq.;
      Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq.; Refuse Act 33 U.S.C. §
407; Occupational Safety and Health Act, 29 U.S.C. §§ 651 et seq.; Clean Air
      Act, 42 U.S.C. §§ 7401 et seq.; Environmental Protection Act 1990 (UK); the
      Water Resources Act 1990 (UK); and the Health and Safety at Work etc. Act 1974
      (UK) and any state counterparts and equivalents thereto.

     

    “GAAP”
      means
      (i) as it pertains to the financial statements or accounting of CAE, United
      States generally accepted accounting principles, (ii) as it pertains to the
      financial statements or accounting of Techwell or any Techwell Subsidiary
      incorporated in Hong Kong, Hong Kong generally accepted accounting principles
      comprising Hong Kong Financial Reporting Standards and interpretations issued
      by
      the Hong Kong Institute of Certified Public Accountants, and (iii) as it
      pertains to the financial statements or accounting of any Techwell Subsidiary
      incorporated or established outside Hong Kong, the generally accepted accounting
      principles of the jurisdiction or territory of the place of its incorporation
      or
      establishment.

     

    “Governmental
      Authority”
means
      (i) any federal, state, county, municipal or other government, domestic or
      foreign, or any agency, board, bureau, commission, court, department or other
      instrumentality of any such government, or (ii) any Person having the authority
      under any applicable Governmental Requirement to administer, assess, collect
      or
      impose Taxes.

     

    “Governmental
      Requirement”
means
      at any time (i) any law, statute, code, ordinance, order, rule, regulation,
      judgment, decree, injunction, writ, edict, award, authorization or other
      requirement of any Governmental Authority in effect at that time or (ii) any
      obligation included in any certificate, certification, franchise, permit or
      license issued by any Governmental Authority or resulting from binding
      arbitration, including any requirement under common law, at that
      time.

     

    “Hazardous
      Substances” means
      and
      include any substance: (i) the presence of which requires reporting,
      investigation, removal or remediation under any Environmental Law; (ii) that
      is
      defined as a “hazardous waste,” “hazardous substance,” “toxic substance,” or
“pollutant” or “contaminant” under any Environmental Law; (iii) the presence of
      which causes or threatens to cause a nuisance, trespass or other tortious
      condition or poses a hazard to the health or safety of persons; or (iv) that
      contains gasoline, diesel fuel or other petroleum hydrocarbons, PCBs, asbestos,
      silica or urea formaldehyde foam insulation. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

    “Knowledge”
      means,
      as it relates to any Shareholder, Techwell or any Techwell Subsidiary, the
      actual knowledge of each Shareholder, plus such knowledge as any Shareholder
      would have acquired after due investigation of the relevant fact or matter
      (including making all necessary enquiries with the respective officers,
      directors and employees of Techwell and each Techwell Subsidiary), regardless
      of
      whether such investigation has actually occurred, and as to any other Person,
      the actual knowledge of a specified Person of any particular fact or other
      matter after due investigation, and the words “aware,” “known” or similar words,
      expressions or phrases shall be construed accordingly.

     

    “Lease”
means
      any lease, sub-lease, tenancy agreement, sub-tenancy agreement, licence or
      any
      other document (including any option for extension relating thereto) granted
      or
      agreed to be granted to Techwell or any Techwell Subsidiaries or pursuant to
      which any of them holds or occupies any Leased Property, details of which are
      set forth in Section 3.1(m) of the Techwell Disclosure Schedule.

     

    “Legal
      Requirement”
      means
      any law, regulation, rule, ordinance, decree, order or other standard imposed
      by
      a Governmental Authority applicable to a party or the conduct or operation
      of
      its business or the ownership or use of any of its assets, including, in the
      case of Techwell or any Techwell Subsidiary, all those imposed under the
      Mandatory Provident Fund Schemes Ordinance of the laws of Hong Kong, or any
      equivalent or similar laws, rules, regulations or requirements of any other
      applicable jurisdiction.

     

    “License”
means
      any license, certification, permit or other authorization from any Governmental
      Authority necessary for Techwell or any Techwell Subsidiary to conduct the
      Business or any part thereof or own or operate any of its assets and
      properties.

     

    “Material
      Adverse Effect”
means
      (i) with respect to Full Art or CAE, as applicable, a material adverse effect
      on
      the business, operations, affairs, properties, assets or condition (financial
      or
      otherwise) of such party; and (ii) with respect to Techwell, any event,
      circumstance, occurrence, fact, condition, change or effect which, individually
      or in the aggregate (a) has or would be reasonably expected to have a material
      adverse effect on the business, operations, affairs, properties, assets or
      condition (financial or otherwise) of Techwell or any Techwell Subsidiary,
      or
      (b) will or would be reasonably expected to adversely affect the ability of
      Techwell or any Shareholder to consummate the transactions contemplated under
      this Agreement or any other Transaction Document to which it is a
      party.

     

    “MPF
      Scheme”
means
      a
      mandatory provident scheme within the meaning given to such term under the
      Mandatory Provident Fund Schemes Ordinance under the laws of Hong Kong in which
      Techwell or any Techwell Subsidiary has participated for the benefit of its
      employees or other statutorily required provident scheme under any law, rules
      or
      regulations applicable to Techwell or any Techwell Subsidiary for the benefit
      of
      any employee.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “ORSO
      Scheme”
means
      an occupational retirement scheme registered as a registered scheme under
      section 18 of the Occupational Retirement Schemes Ordinance of the Laws of
      Hong Kong, in which Techwell or any Techwell Subsidiary has operated,
      contributed or participated for the benefit of any of its
      employees.

     

    “Permitted
      Liens”
means,
      with respect to the property or other assets of Techwell or any Techwell
      Subsidiary (or any revenues, income or profits of Techwell or any Techwell
      Subsidiary therefrom): (i) Liens for Taxes if the same are not at the time
      due
      and delinquent; (ii) Liens of carriers, warehousemen, mechanics, laborers and
      materialmen for sums not yet due; (iii) Liens incurred in the ordinary course
      of
      the Business in connection with workers’ compensation, unemployment insurance
      and other social security legislation; (iv) Liens incurred in the ordinary
      course of the Business in connection with deposit accounts or to secure the
      performance of bids, tenders, trade contracts, statutory obligations, surety
      and
      appeal bonds, performance and return of money bonds and other obligations of
      like nature; (v) easements, rights-of-way, reservations, restrictions and other
      similar encumbrances incurred in the ordinary course of the Business or existing
      on property and not interfering in any material respect with the ordinary
      conduct of the Business or the use of that property; and (vi) defects or
      irregularities in Techwell’s interest in its real properties which do not
      materially (A) diminish the value of the surface estate or (B) interfere with
      the ordinary conduct of the Business or the use of any of such
      properties.

     

    “Person”
means
      any natural person, Entity, estate, trust, union or employee organization or
      Governmental Authority.

     

    “PRC”
means
      the People’s Republic of China, excluding, for the purposes of this Agreement,
      the Macau Special Administrative Region, Hong Kong and Taiwan.

     

    “Solvent”
means,
      for any Person on a particular date, that on such date (a) the fair value
      of the property of such Person is greater than the total amount of liabilities,
      including, without limitation, contingent liabilities, of such Person,
      (b) the present fair saleable value of the assets of such Person is not
      less than the amount that will be required to pay the probable liability of
      such
      Person on its debts as they become absolute and matured, (c) such Person
      does not intend to, and does not believe it will, incur debts and liabilities
      beyond such Person’s ability to pay as such debts and liabilities mature,
      (d) such Person is not engaged in a business or a transaction, and is not
      about to engage in a business or a transaction, for which such Person’s property
      would constitute an unreasonably small capital, and (e) such Person is able
      to pay its debts as they become due and payable.

     

    “Statutory
      Plans”
means
      statutory or other benefit plans which Techwell or any Techwell Subsidiary
      is
      required to participate in or comply with pursuant to any applicable statutes,
      laws, rules, regulations, codes, notices, circulars, orders, edicts, decrees,
      practices or promulgations of any Governmental Authority in any jurisdiction,
      including plans administered pursuant to applicable health tax, workplace safety
      insurance and employment insurance legislation and, without any limitation
      to
      the foregoing, including any statutorily required employee compensation
      insurance, ORSO Schemes or MPF Schemes, and any social insurance, social
      security or welfare benefit contributions required under the laws of the PRC
      or
      any other applicable jurisdiction.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Taxes”
      means and
      includes all forms of taxes, charges, fees, imposts, duties, levies, deductions,
      withholdings or other assessments of any nature imposed, levied, collected,
      withheld or assessed by any Governmental Authority or other taxing or similar
      authority in any part of the world, including income, gross receipts, excise,
      property, sales, use, transfer, payroll, licence, value added, social security,
      national insurance (or other similar contributions or payments), franchise,
      estimated, severance, customs and stamp taxes (including any interest, fines,
      penalties, charges or additions attributable to, claimed, payable or imposed
      on
      or with respect to, any such taxes, charges, fees, levies or other
      assessments).

     

    “Tax
      Returns”
means
      any return, statement, declaration, notice, certificate, report or other
      document that is or has been filed with or submitted to, or required to be
      filed
      with or submitted to, any Governmental Authority in connection with the
      determination, assessment, collection or payment of any Tax or in connection
      with the administration, implementation or enforcement of or compliance with
      any
      Legal Requirement or Governmental Requirement related to any Tax.

     

    “Transaction
      Documents”
means
      this Agreement, the Escrow Agreement, the Employment Agreement, and any other
      agreements, documents and instruments delivered under or pursuant to any of
      the
      foregoing.

     

    ARTICLE
      TWO

    SALE
      AND PURCHASE; PURCHASE PRICE; CLOSING

     

    
      	 	
              2.01

            	
              Purchase
                and Sale of the Techwell
                Shares.

            

    

     

    At
      the
      Closing, subject to the terms and conditions of this Agreement, the Shareholders
      shall sell, transfer, assign, convey and deliver to Full Art all of the Techwell
      Shares, free and clear of any liens, encumbrances, pledge, security interest,
      restrictive covenant, burden or charge of any kind or nature whatsoever, legal
      or equitable, or any item similar or related to the foregoing (“Liens”),
      together with all rights attaching thereto including the right to receive all
      dividends and distributions declared, made or paid on or after the date of
      Closing. 

     

    
      	 	
              2.02

            	
              Delivery
                of Techwell Certificates. 

            

    

     

    At
      the
      Closing, the Shareholders shall deliver to Full Art:

     

    (a) all
      original share certificates representing all of the Techwell Shares, which
      certificates shall be accompanied by instruments of transfer of the Techwell
      Shares duly executed by the respective registered holders thereof in favor
      of
      Full Art (or such other person(s) as it may direct); and

     

    (b) to
      the
      extent any of the same shall not have been provided prior to Closing, all
      documents required in Section 8.01 and such other documents as Full Art may
      require evidencing the fulfilment of the conditions precedent
      thereunder.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	 	
              2.03

            	
              Purchase
                Price; Payment. 

            

    

     

    
      (a)
        Aggregate
        Purchase Price.
        The
        aggregate purchase price to be paid by Full Art to the Shareholders for the
        Techwell Shares shall be Eleven Million Six Hundred Fifty-Four Thousand Five
        Hundred Sixty-Six U.S. Dollars (US$11,654,566) (the “Aggregate
        Purchase Price”),
        which
        amount is equal to the product of the net profit of Techwell as stated in
        the
        Techwell Financial Statements for the twelve (12) month period ended September
        30, 2007 multiplied by seven (7) and shall be paid fifty percent (50%) in
        cash
        and fifty percent (50%) in CAE Common Shares as more specifically set forth
        in
        Sections 2.03(b) and 2.03(c).

    

     

    (b)
      Payment
      of the Aggregate Purchase Price. 

     

    (i) The
      portion of the Aggregate Purchase Price payable to Ng Chi Sum is Five Million
      Eight Hundred Twenty-Seven Thousand Two Hundred Eighty-Three U.S. Dollars
      (US$5,827,283), payable as follows: (A) an aggregate of Five Million Two Hundred
      Forty-Four Thousand Five Hundred Fifty-Four and 70/100 U.S. Dollars
      (US$5,244,554.70) in cash, to be delivered to such Shareholder at Closing by
      wire transfer of immediately available funds pursuant to written instructions
      provided by such Shareholder to Full Art, and (B) an aggregate of Five Hundred
      Eighty-Two Thousand Seven Hundred Twenty-Eight and 30/100 U.S. Dollars
      (US$582,728.30) in CAE Common Shares (the “Ng
      Share Purchase Price”),
      or
      70,378 CAE Common Shares valued at Eight and 28/100 U.S. Dollars ($8.28), the
      closing price of the CAE Common Shares as listed on the American Stock Exchange
      one (1) day immediately preceding the date of the Closing (the “CAE
      Share Price”),
      with
      certificate(s) evidencing 49,264 CAE Common Shares, or an amount equal to
      seventy percent (70%) of the Ng Share Purchase Price, to be delivered to such
      Shareholder at Closing. 

     

    (ii) The
      portion of the Aggregate Purchase Price payable to Yam Mei Ling is Five Million
      Eight Hundred Twenty-Seven Thousand Two Hundred Eighty-Three U.S. Dollars
      (US$5,827,283), payable as follows: (A) an aggregate of Five Hundred Eighty-Two
      Thousand Seven Hundred Twenty-Eight and 30/100 U.S. Dollars (US$582,728.30)
      in
      cash, to be delivered to such Shareholder at Closing by wire transfer of
      immediately available funds pursuant to written instructions provided by such
      Shareholder to Full Art, and (B) an aggregate of Five Million Two Hundred
      Forty-Four Thousand Five Hundred Fifty-Four and 70/100 U.S. Dollars
      (US$5,244,554.70) in CAE Common Shares (the “Yam
      Share Purchase Price”
and
      together with the Ng Share Purchase Price, collectively the “Aggregate
      Share Purchase Price”),
      or
      633,400 CAE Common Shares valued at the CAE Share Price, with certificate(s)
      evidencing 443,380 CAE Common Shares, or an amount equal to seventy percent
      (70%) of the Yam Share Purchase Price to be delivered to the such Shareholder
      at
      Closing. 

     

    
      	 	
              (c)

            	
              Escrow
                Funds; Disbursement.
                

            

    

     

    (i) At
      Closing, CAE shall issue two (2) certificates representing an aggregate of
      211,134 CAE Common Shares (the “Escrow
      Funds”),
      or
      thirty percent (30%) of the Aggregate Share Purchase Price, to Mellon Bank,
      N.A., as escrow agent (the “Escrow
      Agent”).
      The
      Escrow Funds will be held and disbursed as specified in this Agreement and
      in an
      escrow agreement substantially in the form attached hereto as Exhibit
      B
      (the
“Escrow
      Agreement”).
      The
      parties understand and agree that 21,113 and 190,021 CAE Common Shares of the
      Escrow Funds each represent thirty percent (30%) of the Ng Share Purchase Price
      and Yam Share Purchase Price, respectively.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (ii) On
      the
      first (1st)
      anniversary of the date of the Closing (the “First Disbursement
      Date”),
      the
      Shareholders and Full Art shall cause the Escrow Agent to deliver to CAE the
      original stock certificate constituting the Escrow Funds whereupon Full Art
      shall:

     

    
      	 	
              (1)

            	
              cause
                CAE to direct its transfer agent to reissue certificate(s) to the
                Shareholders representing two thirds (2/3) of the original number
                of CAE
                Common Shares constituting the Escrow Funds less any CAE Common Shares
                delivered to Full Art and/or otherwise sold in accordance with this
                Agreement and the Escrow Agreement through the First Disbursement
                Date;
                and

            

    

     

    
      	 	
              (2)

            	
              cause
                CAE to return to Escrow Agent a stock certificate for the remaining
                balance of those CAE Common Shares to be held as the Escrow
                Funds.

            

    

     

    (iii) On
      the
      second (2nd)
      anniversary of the date of the Closing, the Shareholders and Full Art shall
      cause the Escrow Agent to deliver to CAE the stock certificate for the remaining
      balance of CAE Common Shares held as Escrow Funds as of such date whereupon
      Full
      Art shall cause CAE to direct its transfer agent to reissue certificate(s)
      to
      the Shareholders representing such remaining balance of CAE Common
      Shares.

     

    
      	 	
              2.04

            	
              Closing. 

            

    

     

    The
      closing of the transactions contemplated by this Agreement (the “Closing”)
      shall
      take place at the offices of Kirkpatrick & Lockhart Preston Gates Ellis LLP,
      10100 Santa Monica Boulevard, 7th
      Floor,
      Los Angeles, California 90067 at 10:00 a.m., Pacific Standard time on November
      6, 2007, or such other place and date as the parties may mutually agree upon
      (the “Closing
      Date”).
      

     

    ARTICLE
      THREE

    REPRESENTATIONS
      AND WARRANTIES OF SHAREHOLDERS
      RELATING TO TECHWELL

     

    
      	 	
              3.01

            	
              Representations
                and Warranties of Shareholders
                relating to Techwell.

            

    

     

    All
      references in this Section 3.01 to Techwell, other than those in paragraphs
      (b),
      (c), (d) and (g), shall be read and construed as a reference to Techwell and
      each of the Techwell Subsidiaries. The Shareholders hereby jointly and severally
      represent and warrant to Full Art as follows:

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (a)
      Corporate Status. Techwell is a corporation duly incorporated, validly
      existing and in good standing under the laws of the place of its incorporation
      or establishment, with full corporate power and authority to own its property
      and to carry on its business as presently conducted. Techwell is qualified
      to do
      business as a foreign corporation in any other jurisdiction where the character
      or location of the property owned, leased or operated by it or the nature of
      the
      business conducted by it makes such qualification necessary. Techwell has made
      available to Full Art true and complete copies of its Memorandum and Articles
      of
      Association or equivalent constitutional documents, including any amendments
      thereto. The minute books of Techwell, as heretofore made available to Full
      Art,
      are correct and complete in all material respects.

     

    (b)
      Capitalization
      of Techwell. The
      authorized share capital of Techwell consists solely of 3,500,000 ordinary
      shares of HK$1.00 par value each, all of which are issued and outstanding.
      Set
      forth in Section 3.01(b)
      of the
      Techwell Disclosure Schedule is a complete and correct list of the issued and
      outstanding shares in the capital of Techwell and the names, addresses and
      beneficial ownership of each Shareholder in such shares. The Techwell Shares
      represent all of the issued and outstanding share capital of Techwell and all
      of
      the Techwell Shares have been duly authorized and validly issued in compliance
      with applicable law (including federal and state securities laws), are fully
      paid and nonassessable, and were not issued in violation of any statutory,
      contractual or other preemptive rights, rights of first refusal or similar
      rights. There are no outstanding options, warrants, rights, puts, calls,
      commitments, conversion rights, plans or other agreements of any character
      to
      which Techwell or any Shareholder is a party or otherwise bound which provide
      for the acquisition, disposition or issuance of any issued but not outstanding,
      outstanding, or authorized and unissued shares, or any part of the share or
      equity capital of or any other securities exercisable or convertible into or
      exchangeable for any part of the capital of Techwell. There is no personal
      liability, and there are no preemptive or similar rights, statutory or
      otherwise, attached to the Techwell Shares. No Shareholder or any other holder
      of any of Techwell’s securities has any rights, “demand,” “piggy-back” or
      otherwise, to have such securities registered under the 1933 Act. 

     

    (c)
      Ownership
      of Techwell Shares.
      Each
      Shareholder is the record and beneficial owner of the number of Techwell Shares
      set forth opposite its name in Section 3.01(b)
      of the
      Techwell Disclosure Schedule. Each Shareholder has good and marketable title
      to
      such Techwell Shares, free and clear of any Liens. All such Techwell Shares
      are
      duly authorized, validly issued, fully paid and nonassessable and each
      Shareholder has complete and unrestricted power and the unqualified right to
      sell, assign, transfer and deliver its Techwell Shares to Full Art.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (d)
      Subsidiaries.
      Section
      3.01(d) of the Techwell Disclosure Schedule sets forth the name, jurisdiction
      of
      incorporation or establishment of each Entity in which Techwell owns of record
      or beneficially, directly or indirectly, any equity securities or similar
      interests of any person, or any interest in a partnership or joint venture
      of
      any kind (each a “Techwell
      Subsidiary”
and
      collectively, the “Techwell Subsidiaries”).
      No
      Techwell Subsidiary has any discontinued operations, ceased doing business
      or
      sold all or substantially all of its operating assets, operates or formerly
      operated a business not related to the Business, or is otherwise inactive.
      Section 3.01(d) further identifies any Techwell Subsidiary that was merged,
      dissolved, liquidated (or terminated by similar means) at any time. Techwell
      owns, directly or indirectly, all of the share capital or other equity interests
      of each Techwell Subsidiary free and clear of any Liens, and all the issued
      and
      outstanding shares in the capital of and all other equity interests in each
      Techwell Subsidiary are validly issued and are fully paid, non-assessable and
      free of preemptive and similar rights to subscribe for or purchase securities.
      Each Techwell Subsidiary is a corporation duly organized, validly existing
      and
      in good standing under the laws of its jurisdiction of organization. Each
      Techwell Subsidiary has the corporate power and authority to own or lease its
      properties, perform its obligations under the agreements, contracts or other
      instruments to which it is a party or by which it is bound and the Legal
      Requirements and Governmental Requirements to which it is subject and otherwise
      carry on its business as now conducted. Neither Techwell nor any Techwell
      Subsidiary is a party to any agreement, contract or other instrument to acquire
      any equity or other securities of any other person or ownership interest in
      any
      other business.

     

    (e)
      Corporate
      Authority; Authorized and Effective Agreement.
      Each
      Shareholder has full legal capacity and power to execute and deliver this
      Agreement and each of the Shareholders and Techwell has full legal capacity
      and
      power to execute and deliver the Transaction Documents to which Techwell or
      any
      Shareholder is a party, which Agreement and Transaction Documents have been
      or
      will, on or prior to Closing, be duly executed and delivered by such parties
      and
      constitute the valid and binding obligation of such parties except (i) as
      limited by applicable bankruptcy, insolvency, reorganization, moratorium and
      other laws of general application affecting enforcement of creditors’ rights
      generally, (ii) as limited by laws relating to the availability of specific
      performance, injunctive relief or other equitable remedies and (iii) insofar
      as
      indemnification and contribution provisions may be limited by applicable law.
      

     

    (f)
      No
      Conflict. The
      execution, delivery, performance and the consummation of the transactions
      contemplated by this Agreement and the Transaction Documents by Techwell and
      the
      Shareholders will not, directly or indirectly, (i) violate any Legal Requirement
      or any Governmental Requirement; (ii) violate the Memorandum and Articles of
      Association or equivalent constitutional documents of Techwell; (iii) violate
      any judgment, award or decree to which Techwell or any Shareholder is a party
      or
      by which Techwell or any Shareholder is bound; (iv) violate any provision of
      any
      material indenture, agreement or other instrument to which Techwell or any
      of
      the Shareholders is a party, or by which Techwell, any of the Shareholders,
      or
      any of its respective properties or assets is bound or affected, or result
      in a
      breach of or constitute (with due notice or lapse of time or both) a default
      under any such indenture, agreement or other instrument, except any indenture,
      agreement or other instrument that will be satisfied in full at or before
      Closing; (v) result in the creation or imposition of any Lien upon any of the
      properties or assets of Techwell; or (vi) result in any suspension, revocation,
      impairment, forfeiture or non-renewal of any License of Techwell.

     

    
      
        
        

      

      
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    (g)
      Financial
      Statements of Techwell.
      Techwell has furnished to Full Art audited financial statements of Techwell
      prepared on a consolidated basis consisting of balance sheets as of December
      31
      for the years 2006 and 2005, and the related statements of income, changes
      in
      shareholders’ equity and cash flows for the two (2) years ended December 31,
      2006 (the “Techwell
      Balance Sheet Date”)
      and
      the unaudited interim balance sheet and income statement as of September 30,
      2007 (collectively, all of such consolidated financial statements are referred
      to as “Techwell
      Financial Statements”).
      The
      Techwell Financial Statements have been prepared in accordance with GAAP applied
      on a consistent basis during the periods involved (except as may be indicated
      in
      the notes thereto) and fairly present in all material respects the consolidated
      financial position of Techwell as of the dates thereof and its consolidated
      results of operations and cash flows for the periods then ended (subject, in
      the
      case of unaudited statements, to the absence of notes and normal year-end audit
      adjustments).

     

    (h) Absence
      of Undisclosed Liabilities.
      Techwell has no liabilities or obligations (whether accrued, absolute,
      contingent or otherwise) except: (i) as set forth in Section 3.01(h)
      of the
      Techwell Disclosure Schedule, (ii) as set forth on the Techwell Financial
      Statements or (iii) as incurred since the Techwell Balance Sheet Date in the
      ordinary course of business and usual and normal in amount both individually
      and
      in the aggregate.

     

    (i) Absence
      of Changes.
      Except
      as set forth in Section 3.01(i) of the Techwell Disclosure Schedule, since
      the
      Techwell Balance Sheet Date, Techwell has operated its business in the ordinary
      course consistent with Techwell’s past practice, and there has not been any
      Material Adverse Effect respecting Techwell. 

     

    (j) Reports
      and Records.
      Techwell and its employees have filed all reports and maintained all records
      and
      licenses required to be filed or maintained by it. All such documents and
      reports complied in all material respects with applicable requirements of law
      and rules and regulations in effect at the time such documents and reports
      were
      filed and contained in all material respects the information required to be
      stated therein.

     

    
      	
            	(k)	
              Taxes. 

            

    

     

    (i) Techwell
      has timely filed all Tax Returns required to be filed on or before the date
      hereof and will timely file all Tax Returns required to be filed on or before
      Closing under any applicable laws and regulations. Such Tax Returns are true,
      correct and complete in all respects. All Taxes due and owing by Techwell
      (whether or not showing on any Tax Return) have been paid. Techwell is not
      currently the beneficiary of any extension of time in which to file any Tax
      Return. No written claim has ever been made by any authority in a jurisdiction
      where Techwell does not file Tax Returns that Techwell is or may be subject
      to
      taxation by that jurisdiction. There are no liens for Taxes (other than for
      Taxes not yet due and payable) upon any of the assets of Techwell. Techwell
      has
      not waived any statute of limitations in respect of Taxes or agreed to any
      extension of time with respect to a Tax assessment or deficiency.

     

    (ii) Techwell
      has withheld and paid all Taxes required to have been withheld and paid in
      connection with any amounts paid or owing to any employee, independent
      contractor, creditor, stockholder, or other third party. Proper records have
      been maintained in respect of all such deductions and payments and all
      applicable laws, rules and regulations have been complied with.

     

    
      
        
        

      

      
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    (iii) Neither
      Techwell nor any director or officer (or employee responsible for Tax matters)
      of Techwell expects any authority to assess any additional Taxes for any period
      for which Tax Returns have been filed. No foreign, federal, state, or local
      tax
      audits or administrative or judicial Tax proceedings are pending or being
      conducted with respect to Techwell. Techwell has not received from any
      Governmental Authority (including jurisdictions where Techwell does not file
      Tax
      Returns) any (1) written notice indicating an intent to open an audit or other
      review, (2) request for information related to Tax matters, or (3) notice of
      deficiency or proposed adjustment for any amount of Tax proposed, asserted,
      or
      assessed by any taxing authority against Techwell.

     

    (iv) Techwell
      is not a party to any agreement, contract, arrangement or plan that has resulted
      or could result, separately or in the aggregate, in payment of (1) any “excess
      parachute payment” within the meaning of Section 280G of the Internal Revenue
      Code of 1986, as amended (the “Code”)
      from
      this transaction (or any corresponding provision of state, local or foreign
      Tax
      law) or (2) any amount that will not be fully deductible as a result of Code
      Section 162(m) (or any corresponding provision of state, local or foreign Tax
      law). 

     

    (v) Techwell
      has not been a member of an affiliated group filing a consolidated federal
      income Tax Return and Techwell has never been a member of any group for Tax
      purposes (other than the group comprising solely Techwell and Techwell
      Subsidiaries). Techwell does not have any liability for the Taxes of any Person
      or Entity under any applicable Legal Requirement as a transferee or successor,
      by contract, or otherwise. No act or transaction has been or will, either on
      or
      before the Closing, be affected by Techwell, any Shareholder or any other Person
      in consequence of which Techwell is or may be held liable for Taxes primarily
      chargeable against some other Person.

     

    (vi) The
      unpaid Taxes of Techwell (1) did not, as of the date of the most recent balance
      sheet included in the Techwell Financial Statements, exceed the reserve for
      Tax
      liability (rather than any reserve for deferred Taxes established to reflect
      timing differences between book and Tax income) set forth on the face of such
      balance sheet (rather than in any notes thereto) and (2) do not and will
      not exceed such reserve as adjusted for the passage of time through the date
      of
      the Closing in accordance with the past custom and practice of Techwell in
      filing its Tax Returns. Since the date of the most recent balance sheet included
      in the Techwell Financial Statements, Techwell has not incurred any liability
      for Taxes arising from extraordinary gains or losses, as that term is used
      in
      GAAP, outside the ordinary course of business consistent with past custom and
      practice.

     

    (vii) No
      power
      of attorney has been granted by Techwell with respect to any matters relating
      to
      Taxes that is currently in effect.

     

    (viii) Techwell
      has not filed any disclosures under Code Sections 6662 or 6011 or comparable
      provisions of state, local or foreign law to prevent the imposition of penalties
      with respect to any Tax reporting position taken on any Tax Return.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (ix) Techwell
      will not be required to include any item of income in, or exclude any item
      of
      deduction from, taxable income for any taxable period (or portion thereof)
      ending after the Closing Date as a result of any (A) change in method of
      accounting for a taxable period ending on or prior to the Closing Date; (B)
      “closing agreement” as described in Code Section 7121 (or any corresponding or
      similar provision of state, local or foreign income Tax law) executed on or
      prior to the Closing Date; (C) intercompany transactions or any excess loss
      account described in Treasury Regulations under Code Section 1502 (or any
      corresponding similar provision of state, local or foreign income Tax law);
      (D)
      installment sale or open transaction disposition made on or prior to the Closing
      Date; or (E) prepaid amount received on or prior to the Closing
      Date.

     

    (x) Techwell
      does not own an interest in real property in any jurisdiction in which a Tax
      is
      imposed, or the value of the interest is reassessed, on the transfer of any
      interest in real property and which treats the transfer of an interest in an
      entity that owns an interest in real property as a transfer of the interest
      in
      real property.

     

    (xii) Techwell
      has not, in the past ten (10) years, (i) acquired assets from another
      corporation in a transaction in which the Tax basis of the acquired assets
      was
      determined, in whole or in part, by reference to the Tax basis of the acquired
      assets (or any other property) in the hands of the transferor or (ii) acquired
      the stock of any corporation which is a qualified subchapter S
      subsidiary.

    

    (xiii) Techwell
      has not entered into or been engaged in or been a party to any transaction
      which
      is artificial or fictitious or any transaction or series of transactions or
      scheme or arrangement of which the main or dominant purpose or one of the main
      or dominant purposes was the avoidance or deferral of or reduction in the
      liability to Tax of Techwell, to the extent that such arrangement is prohibited
      under any Legal Requirement or Governmental Requirement. No Tax scheme in
      effect, as previously applied in the Techwell Financial Statements, has been
      or
      will be illegal under any Legal Requirement or Governmental Requirement or
      adversely affect the financial condition of Techwell or the operation of the
      Business. None of the assets and properties of Techwell has been purchased
      at an
      under value or been given to Techwell in circumstances where the gift or element
      of under value might be subject to or give rise to any form of Tax, estate
      duty
      chargeable or assessable against Techwell or on any of its assets.

    

    (xiv) Techwell
      has sufficient records to permit accurate calculation of the Tax liability
      or
      relief which would arise upon a disposal or realisation on completion of each
      asset owned by Techwell at the Techwell Balance Sheet Date or acquired by
      Techwell before Closing and has otherwise maintained accurate and complete
      books
      of account and records with respect to all transactions and other matters
      occurring on or before Closing to enable the due and proper preparation and
      filing of all Tax Returns required of Techwell whether before or after Closing.
      Techwell has duly submitted all claims and disclaimers the making of which
      has
      been assumed for the purposes of the Techwell Financial Statements.

    

    
      
        
        

      

      
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    (l)
      Marketable Title; Condition of Assets. Techwell owns, and is in
      rightful possession of, and has good and marketable title to, all of its assets
      and properties used (other than the Techwell Real Properties, which is addressed
      in Section 3.01(m)), free and clear of any Lien or other interest of any persons
      whatsoever, except for Liens constituting Permitted Liens. The assets of
      Techwell are all the assets needed to continue to conduct the Business as it
      is
      presently being conducted. Except for any incidental repairs required in the
      ordinary course of business, each item of tangible personal property owned
      or
      used by Techwell in conducting the Business is in good operating condition
      and
      in a state of good maintenance and repair (ordinary wear and tear excepted)
      and
      is adequate and suitable for the purposes for which they are presently being
      used. 

     

    (m) Real
      Property.
      

     

    (i) Section
      3.01(m)
      of the
      Techwell Disclosure Schedule lists and describes any interest in real property
      held by Techwell, including all real properties and premises owned, leased,
      occupied or otherwise used by Techwell or in connection with the Business (the
      “Techwell
      Real Properties”).
      The
      Techwell Real Properties constitute all of the interests in real property used
      in the Business, including any land use rights granted with respect to any
      real
      property, and all deeds and documents necessary to prove the title of Techwell
      to the Techwell Real Properties are in the possession of Techwell. All of the
      buildings, structures and appurtenances situated on the Techwell Real Properties
      are (i) in good operating condition and in a state of good maintenance and
      repair (ordinary wear and tear excepted) and (ii) adequate and suitable for
      the
      purposes for which they are presently being used. 

     

    (ii) Techwell
      is not the registered or beneficial owner of any Techwell Real Properties.
      

     

    (iii) The
      Techwell Real Properties in Section 3.01(m) of the Techwell Disclosure Schedule
      (“Leased
      Properties”)
      are
      all occupied under Leases and the particulars of all Leases are fully and
      accurately set out in that Section 3.01(m). The Techwell Real Properties in
      Section 3.01(m) of the Techwell Disclosure Schedule are all occupied pursuant
      to
      land use rights sold or granted to Techwell. Techwell possesses good leasehold
      to its Leased Properties pursuant to valid and subsisting Leases held by it.
      With respect to any land use rights sold or granted or purported to have been
      sold or granted to Techwell, such land use rights have been validly sold or
      granted by competent Governmental Authorities duly authorised so to do and
      Techwell has good and valid title thereto free from Liens (other than Permitted
      Liens) and enforceable against any other third Person under PRC laws or the
      laws
      of any other applicable jurisdiction.

     

    
      
        
        

      

      
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    (iv) The
      Leases are head leases, are properly completed and (where required) stamped
      and
      are in the possession and under the control of Techwell. The land use rights
      to
      any Techwell Real Property in the PRC are owned by Techwell for a period of
      not
      less than fifty (50) years from the relevant date as shown in Section
3.01(m)
      of the
      Techwell Disclosure Schedule.

     

    (v) All
      necessary consents, permits, licenses, certificates, authorisations and
      approvals for the grant of the Leases and land use rights pertaining to any
      Techwell Real Property were obtained before such grant. The landlords named
      in
      the Leases were the registered owners of the Leased Properties at the time
      of
      the grant of the relevant Lease and all Leases are duly registered with the
      appropriate Governmental Authorities in accordance with applicable Legal
      Requirement or Governmental Requirement of the PRC or of any other applicable
      jurisdiction. With respect to the land use rights, Techwell has obtained and
      is
      in possession of the relevant land use right registration and other certificates
      and all other documents of title and such certificates and documents of title
      are valid and subsisting and in full force and effect.

     

    (vi) Save
      for
      Permitted Liens, the Techwell Real Properties and the title deeds and
      documentation relating thereto are not subject to any debenture (whether fixed
      or floating), option, agreement for sale, condition, covenant, agreement, claim,
      overriding interest or any other Liens, nor is there any Person in possession
      or
      occupation of or who has or claims any right or easement of any kind in respect
      of any such properties adversely to the estate, interest, right or title therein
      of Techwell.

     

    (vii) There
      are
      no rights, interests, covenants, restrictions, reservations, licenses or
      easements, nor any disputes or outstanding notices (whether given by a lessor
      or
      any other person) nor in the case of a Leased Property, rights for the lessor
      to
      break the term nor (without prejudice to the generality of the foregoing) any
      other matters or things which adversely affect the value of the Techwell Real
      Properties or the proper use and enjoyment thereof for the purpose of the
      business now being carried on at such properties.

     

    (viii) The
      Leases contain no right of termination by the landlord thereof except on grounds
      of non-payment of rent, breach of covenant or insolvency. There are no
      circumstances which would entitle or require a lessor or any other Person to
      exercise any power of entry upon or of taking possession of any Techwell Real
      Properties or which would otherwise restrict or terminate the continued
      possession or occupation thereof.

     

    (ix) The
      Leased Properties are not subject to any outgoings other than general and water
      rates, rent, management charges of a non-capital nature and utility charges.
      All
      land premiums and other Taxes and all rents, service charges and other outgoings
      payable by Techwell in respect of the Leased Properties or properties to
      Techwell holds land use rights have been duly and timely paid and will be paid
      up to the date of Closing and no amount is or will be due or payable by Techwell
      in respect thereof on or prior to Closing.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (x) Techwell
      has duly performed, observed and complied with all covenants, restrictions,
      reservations, conditions, agreements, statutory requirements, bye-laws, orders,
      building regulations and other stipulations and regulations affecting the
      Techwell Real Properties and their use, including the terms of all Leases,
      and
      the use of such properties does not contravene the same and no notice of any
      alleged breach of any of the terms of any such Lease has been served on
      Techwell. Without limiting the foregoing, the current use by Techwell of the
      Techwell Real Properties and all of the buildings, structures and appurtenances
      situated thereon is in compliance with all zoning or planning restrictions
      applicable thereto. All necessary certificates of compliance and other
      certificates, consents, occupation and other permits, licenses, authorisations
      and approvals for the user of any Techwell Real Properties and any and all
      buildings and structures thereon, as they are being used, have been duly
      obtained and are in full force, validity and effect and there are no
      circumstances known to any Shareholder which are likely to result in the
      forfeiture, avoidance, withdrawal or non-renewal of or restriction on or
      amendment to the same. All such properties are used by Techwell for legal
      purposes and Techwell has not violated any Legal Requirement or any Governmental
      Requirement of the PRC or elsewhere relating to land or property. None of the
      Shareholders is aware of any facts, matters or any notice or order served by
      any
      Governmental Authority which may adversely affect the right of Techwell to
      use
      such properties for the purpose for which they are presently being used or
      intended to be used. None of such properties is subject to any actual or
      threatened condemnation or other proceedings, notice or order given by any
      PRC
      or other Governmental Authority which would adversely affect such properties
      or
      any part thereof or preclude or impair the use of any such property by Techwell
      for the purposes for which it is currently used. None of the Techwell Real
      Properties is adversely affected or likely to be adversely affected by any
      planning, highways, transport, utility or other proposals.

     

    (xi) Techwell
      is entitled to and has exclusive vacant possession of the Techwell Real
      Properties and, other than the Leases, no part of the Techwell Real Properties
      is subject to any lease, tenancy or licence or any agreement to grant such
      lease, tenancy or licence and no Person other than Techwell has a right to
      occupy or enter upon any of the Techwell Real Properties, other than the rights
      of landlords pursuant to the Leases. The Leases are not subject to any options
      or rights of pre-emption or first refusal in favour of any third
      parties.

     

    (xii) There
      is
      no outstanding monetary claim or liability, contingent or otherwise, affecting
      the Techwell Real Properties and in the case of a Leased Property there are
      no
      rent reviews in the course of being determined or exercisable by the lessor
      from
      a date prior to the date of Closing.

     

    (xiii) Techwell
      has maintained adequate insurance with respect to the Techwell Real Properties
      where the failure so to maintain would or could reasonably expected to have
      a
      Material Adverse Effect on Techwell. Where Techwell is responsible for
      maintaining insurance of the Leased Properties, the policy conforms in all
      respects with the requirements of the relevant Lease. 

     

    
      
        
        

      

      
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    (n) Legal
      Proceedings and Insolvency. 

     

    (i) Except
      as
      set forth in Section 3.01(n) of the Techwell Disclosure Schedule, there are
      no
      actions, suits, proceedings, claims or investigations pending or, to the
      Knowledge of any Shareholder, threatened, in any court, before any governmental
      agency or instrumentality or other Governmental Authority or in any arbitration
      proceeding against or by Techwell or against any of its activities, assets
      and
      properties.

     

    (ii) As
      of the
      date hereof, immediately prior to and immediately following Closing, Techwell
      and each Shareholder is and will be Solvent. None of Techwell and the
      Shareholders is contemplating the filing of any petition by it under any
      bankruptcy or insolvency laws or the liquidating of all or a substantial portion
      of its property, and none of the Shareholders has any knowledge of any third
      party contemplating the filing of any such petition against Techwell or any
      Shareholder. 

     

    (o) Regulatory
      Matters. Techwell is not a party to and neither Techwell nor any of its
      properties or assets is subject to any order, judgment, decree, agreement,
      memorandum of understanding or similar arrangement with any Governmental
      Authority charged with the supervision or regulation of Techwell or its business
      activities. Techwell has not been advised by any of the Governmental Authorities
      that any of such Governmental Authorities are contemplating issuing or
      requesting (or are considering the appropriateness of issuing or requesting)
      any
      such order, judgment, decree, agreement, memorandum of understanding,
      supervisory letter or similar submission.

     

    (p) Brokers,
      Finders and Others.
      There
      are no fees or commissions claimed by, or payable by Techwell or any Shareholder
      to, any broker, finder, intermediary, or any other similar person in connection
      with effecting this Agreement or the transactions contemplated hereby, except
      for ordinary and customary legal and accounting fees which shall be paid in
      full
      at Closing.

     

    (q) Employment
      Agreements.
      Except
      as disclosed in Section 3.01(q)
      of the
      Techwell Disclosure Schedule, Techwell is not a party to any employment, change
      in control, severance, consulting, non-compete, piracy or nonsolicitation
      agreement. Techwell is not a party to, bound by or negotiating any collective
      bargaining agreement, nor are any of its respective employees represented by
      any
      labor union or similar organization. Techwell is in compliance in all material
      respects with all its contractual obligations and all applicable laws respecting
      employment and employment practices, terms and conditions of employment and
      wages and hours, including those pertaining to welfare
      funds, social benefits, social insurance contributions, provident fund or
      retirement scheme contributions, medical benefits, insurance, retirement
      benefits, pensions and the like,
      and has
      maintained current, adequate and suitable records regarding the same, and
      Techwell has not engaged in any unfair labor practice.
      Each of
      the employees of Techwell who is by law subject to immigration control, has
      been
      granted appropriate permission to remain in Hong Kong, PRC or any other
      applicable jurisdiction and has a valid work permit issued in relation to his
      employment with Techwell and has obtained all necessary extensions to his leave
      to remain in Hong Kong, PRC or any other applicable jurisdiction and so far
      as
      the Shareholders are aware there are in existence no grounds upon which any
      such
      leave to remain or work permit might be curtailed or the employee may be
      required to leave Hong Kong, PRC or any other applicable jurisdiction in which
      his services to Techwell are required to be performed.

     

    
      
        
        

      

      
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              (r)

            	
              Employee
                Benefit Plans

            

    

     

    (i) Section
      3.01(r)(i)
      of the
      Techwell Disclosure Schedule sets forth a list of all (a) stock option, stock
      purchase, restricted stock, equity compensation, deferred compensation, bonus,
      fringe benefit, sick leave, vacation, paid or unpaid leave, profit sharing,
      pension, retirement, deferred compensation, medical, life, disability, accident,
      salary continuation, supplemental retirement, severance, change-of-control
      and
      unemployment benefit plans, programs or agreements (whether or not insured),
      (b)
      employment agreement, and (c) Statutory Plans (collectively, the “Employee
      Benefit Plans”)
      that
      have been established, maintained, or sponsored by Techwell, or to which
      Techwell has contributed or into which Techwell has entered (the “Techwell
      Employee Benefit Plans”).
      “Techwell Employee Benefit Plans” shall not include any Employee Benefit Plan
      that is maintained under applicable law by a governmental body. Techwell has
      not
      announced or otherwise made a commitment to implement any arrangement that,
      if
      implemented, would be a Techwell Employee Benefit Plan or to improve or change
      the benefits provided under any Techwell Employee Benefit Plans, unless to
      the
      extent required under any applicable Legal Requirement or Governmental
      Requirement.

     

    (ii) Techwell
      has made available to Full Art, to the extent applicable, true and complete
      copies of the following documents with respect to each Techwell Employee Benefit
      Plan,
      (A) the
      plan document (or, in the case of any unwritten Techwell Employee Benefit Plan,
      a written summary of the terms of such Techwell Employee Benefit Plan), (B)
      the
      summary plan description, (C) the trust agreement, and (D) all related
      agreements, insurance contracts and other agreements by which such Techwell
      Employee Benefit Plan is established, operated, administered or
      funded.

     

    (iii)
      Each
      Techwell Employee Benefit Plan complies in form and has been maintained and
      operated in all respects in accordance with the requirements of all applicable
      laws, including all applicable laws, rules, regulations, codes and practices
      pertaining to any Statutory Plans, and each Techwell Employee Benefit Plan
      has
      been maintained and operated in accordance with its terms. 

     

    (iv)
      Neither
      Techwell nor any director, officer or employee of Techwell, nor any other person
      who participates in the operation of any Techwell Employee Benefit Plan has
      engaged in any transaction with respect to any Techwell Employee Benefit Plan,
      or breached any applicable fiduciary responsibility or obligation under any
      applicable Legal Requirement or Governmental Requirement that would subject
      any
      of them to a tax, penalty or liability for prohibited transactions or breach
      of
      any obligations under any applicable Legal Requirement or Governmental
      Requirement or would result in any claim being made under, by or on behalf
      of
      any such Techwell Employee Benefit Plan by any party with standing to make
      such
      a claim.

     

    
      
        
        

      

      
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    (v)
      There
      are
      no actions,
      suits or claims pending or, to the Knowledge of any Shareholder, threatened
      verbally or in writing against or with respect to any Techwell Employee Benefit
      Plan or the assets of any Techwell Employee Benefit Plan (other than routine
      claims for benefits and appeals of denied claims), and no civil or criminal
      action brought pursuant to the provisions of any applicable Legal Requirements
      or Governmental Requirements of any jurisdiction applicable to Techwell is
      pending or threatened verbally or in writing against Techwell or any fiduciary
      of any Techwell Employee Benefit Plan with respect to any Techwell Employee
      Benefit Plan. Techwell has not received any written notice that any Techwell
      Employee Benefit Plan or any fiduciary thereof is presently the subject of
      an
      audit, investigation or examination by any governmental or quasi-governmental
      agency, and, to the Shareholders’ Knowledge, no such action has been
      threatened.

     

    (xii) Techwell
      has in place and maintained all Statutory Plans in full compliance with the
      Legal Requirements and Governmental Requirements of any jurisdiction applicable
      to Techwell, its Business or its operations. All employer and employee payments,
      contributions and premiums required to be remitted, paid to or in respect of
      each such Statutory Plan have been paid or remitted in a timely fashion in
      accordance with its terms and all such Legal Requirements and Governmental
      Requirements and no Taxes, penalties, fees, contributions or other payments
      are
      owing under or, in relation to, any such Statutory Plan. Without limiting the
      foregoing, all benefits and contributions payable to any employee of Techwell
      under any ORSO Scheme, MPF Scheme or any other Statutory Plan have been fully
      satisfied.

     

    
      	
            	(s)	
              Compliance
                with Laws. Except as set forth in Section 3.01(s) of the Techwell
                Disclosure Schedule, Techwell:

            

    

     

    (i)
      is
      in
      compliance, in all material respects, with all applicable federal, state, local
      and foreign statutes, laws, regulations, ordinances, rules, judgments, orders
      or
      decrees applicable to Techwell, its Business, operations and activities, or
      to
      the employees conducting such business;

     

    (ii)
      has
      all
      material permits, licenses, authorizations, orders and approvals of, and has
      made all filings, applications and registrations with, all Governmental
      Authorities that are required in order to permit it to own or lease its
      properties and to conduct its business as presently conducted; all such permits,
      licenses, certificates of authority, orders and approvals are in full force
      and
      effect and no suspension or cancellation of any of them has been threatened
      in
      writing; and

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (iii)
      has
      received no written notification or communication from any Governmental
      Authorities since January 1, 2001, (A) asserting that Techwell or any
      subsidiary is not in compliance with any of the statutes, regulations or
      ordinances which such Governmental Authorities enforce, or (B) threatening
      to revoke any license, franchise, permit or governmental authorization which
      has
      not been resolved to the satisfaction of the Governmental Authorities which
      sent
      such notification or communication. There is no event which has occurred that,
      to the knowledge of Techwell, would reasonably be expected to result in the
      revocation of any such license, franchise, permit or governmental
      authorization.

     

    
      	
            	(t)	
              Environmental
                Matters. 

            

    

     

    (i) Except
      as
      set forth in Section 3.01(t)
      of the
      Techwell Disclosure Schedule, neither Techwell, the Shareholders nor any Person
      acting at its direction has discharged, released or emitted, or has threatened
      to discharge, release or emit Hazardous Substances into the air, water, surface
      water, ground water, soil, land surface or subsurface strata or transported
      Hazardous Substances to or from property currently owned, leased or used by
      Techwell except in compliance with Environmental Law and except for claims
      or
      releases which have been remediated and for which the appropriate Governmental
      Authority has delivered a “no further action” letter or similar written
      indications that no additional action is required.

     

    (ii) Except
      as
      set forth in Section 3.01(t)
      of the
      Techwell Disclosure Schedule, neither Techwell nor any Shareholder has received
      any written or verbal notification from a Governmental Authority that there
      is
      any violation of any Environmental Law with respect to the business and
      properties of Techwell and neither Techwell nor any of the Shareholders has
      received any written or verbal notification from a Governmental Authority
      pursuant to any Environmental Law, and with respect to any such matter notified,
      none of them remain open, active or require any further action on the part
      of
      Techwell.

     

    (iii) Techwell
      has all licenses, certificates, consents, approvals, qualifications, filings,
      declarations, registrations, exemptions, permits and other authorizations from
      federal, state, foreign or local Governmental Authorities that are necessary
      with respect to the conduct of the Business and the ownership, use or operation
      of Techwell Real Properties and any other assets and properties of Techwell
      (each a “Permit”
and
      collectively, the “Permits”).
      All
      such Permits and the continuing validity thereof will not be adversely affected
      by the consummation of the transactions contemplated hereby and, to the extent
      required for the conduct of the Business by Techwell or the ownership or use
      of
      any of its assets and properties after Closing, all such Permits may otherwise
      be transferred or assigned to Full Art in accordance with their terms and with
      applicable law. To the extent so required, Techwell and the Shareholders shall
      use their best efforts to cooperate with and assist Full Art so that the Permits
      can be conveyed, transferred and/or assigned to Full Art. The present conduct
      of
      the Business is not dependent upon any zoning variance or non-conforming use
      exception. Section 3.01(t)
      of the
      Techwell Disclosure Schedule contains a list of all Permits. There is no basis
      for the revocation or withdrawal of any Permit or any non-renewal thereof upon
      its expiry. Neither Techwell nor any of the Shareholders has received any
      written or verbal notification from the federal, state, foreign or local
      Governmental Authorities that there is a violation of any Permit with respect
      to
      the business and properties of Techwell and neither Techwell nor any of the
      Shareholders has received any written or verbal notification from the federal,
      state, foreign or local governments regarding any Permit, and with respect
      to
      any such matter notified, none of them remain open, active or require any
      further action on the part of Techwell or any of the Shareholders.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (iv) Except
      as
      set forth in Section 3.01(t)
      of the
      Techwell Disclosure Schedule, there are no underground storage tank systems
      or
      facilities on any portion of the property currently owned, leased or used by
      Techwell and any underground storage tank or facility previously located thereon
      has either been removed or closed in place, and Techwell has completed all
      applicable investigations and procedures required to close such tanks or tank
      systems in compliance with all applicable Environmental Laws. Section
3.01(t)
      of the
      Techwell Disclosure Schedule identifies all storage tanks or facilities that
      have been closed in place.

     

    (v) Techwell
      has never manufactured, processed, handled or sold asbestos or products
      containing asbestos. Techwell has never manufactured or sold sand blasting
      sand
      to third parties for use outside of Techwell’s facilities. Except as set forth
      Section 3.01(t)
      of the
      Techwell Disclosure Schedule, neither Techwell nor any of the Shareholders
      has
      received notice of any claim or suit against Techwell or any of the Shareholders
      for asbestos- or silica-related exposure or injury, whether by current or former
      employees or third parties.

     

    (u) Insurance.
      Section 3.01(u) of the Techwell Disclosure Schedule lists all of the insurance
      policies of fire, liability, workers’ compensation, fiduciary liability and
      other forms of insurance providing insurance coverage to or for Techwell in
      effect for the past five (5) years. Unless otherwise set forth in Section
      3.01(u) of the Techwell Disclosure Schedule, (i) Techwell is named insured
      under
      such policies, (ii) all premiums required to be paid with respect thereto
      covering all periods up to and including the Closing Date have been paid, (iii)
      except for any directors’ and officers’ liability insurance policies, all of
      such insurance policies have been issued on an “occurrence” basis, (iv) there
      has been no complete lapse in insurance coverage at any time within the last
      ten
      (10) years, (v) there are not presently, and after the Closing Date there will
      not be, any retrospective premiums due under any of such policies, (vi) no
      notice of default, cancellation or termination has been received with respect
      to
      any such policy, (vii) and all claims thereunder have been filed in due and
      timely fashion. Techwell has delivered or caused to be delivered to Full Art
      true and complete copies of all current insurance policies, binders or bonds.
      Since January 1, 2007, no currently outstanding and unpaid claims have been
      made
      by Techwell on any of such policies. There are no claims outstanding against
      Techwell with respect to any period for which any lapse in insurance coverage
      occurred. No claims are being handled by an insurer of Techwell under a
      reservation of rights letter.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (v) Governmental
      and Third-Party Proceedings.
      Except
      as set forth in Section 3.01(v) of the Techwell Disclosure Schedule, no consent,
      approval, authorization of, or registration, declaration or filing with, any
      court, Governmental Authority or any other third party is required to be made
      or
      obtained by Techwell or any Shareholder in connection with the execution,
      delivery or performance by any of them of this Agreement and the Transaction
      Documents to which it is a party or the consummation by the Shareholders of
      the
      transactions contemplated hereby.

     

    (w) Contracts.
      Section
3.01(w)
      of the
      Techwell Disclosure Schedule sets forth a list of all Contracts (as hereinafter
      defined) in existence as of the date of this Agreement (other than those which
      have been performed completely): (A) which involve the payment by or to
      Techwell of more than $10,000 in connection with the purchase of property or
      goods or the performance of services and (B) which are not in the ordinary
      course of its business consistent with past practice (such contracts referred
      to
      herein as “Contracts”).
      Complete copies of all such Contracts have been made available to Full Art.
      Neither Techwell nor, to the Knowledge of any Shareholder, any other party
      thereto, is in default under any contract listed in Section 3.01(w)
      of the
      Techwell Disclosure Schedule.

     

    (x) Customer
      Relations.
      To the
      Shareholders’ Knowledge, there exists no consideration or state of facts or
      circumstances involving Techwell’s customers, insurance carriers (the
“Carriers”),
      employees or sales representatives that could adversely affect Techwell after
      the date of Closing. No controversy or disagreement presently exists or has
      been
      threatened between Techwell and any customer or Carrier of Techwell (including
      but not limited to any allegations of errors and/or omissions). There has been
      no change in the commission structures of such Carriers, and to the
      Shareholders’ Knowledge, there is no pending change to the commission structure
      of such Carriers.

     

    (y) Intellectual
      Property. Section
      3.01(y)
      of the
      Techwell Disclosure Schedule sets forth a complete list of all of the registered
      trademarks, trademark registrations, applications for trademark registration,
      registered trade names, patents and registered copyrights owned by Techwell,
      all
      of which are owned by Techwell free and clear of any encumbrances. Techwell
      is
      not infringing any patent, copyright or trademark of any third party or
      otherwise violating the intellectual property rights of any third party nor
      has
      any claim been made or, threatened verbally or in writing against Techwell
      alleging any such violation, and there has been no violation by others of any
      right of Techwell in any trademark or copyright. Techwell is not a party to
      or
      bound by any license or other agreement requiring the payment by it of any
      royalty or similar payment in connection with its operations, except for
      commercially available software.

     

    (z) Affiliate
      Transactions.
      Section
3.01(z)
      of the
      Techwell Disclosure Schedule contains a list of all Contracts, transfers of
      assets or liabilities or other commitments or transactions, whether or not
      entered into in the ordinary course of business, to or by which Techwell, on
      the
      one hand, and any of its Affiliates, on the other hand, are or have been a
      party
      or otherwise bound or affected. Except as disclosed in Section 3.01(z)
      of the
      Techwell Disclosure Schedule, each Contract, transfer of assets or liabilities
      or other commitment or transaction set forth or required to be set forth in
      Section 3.01(z)
      of the
      Techwell Disclosure Schedule was on terms and conditions as favorable to
      Techwell as would have been obtainable by it at the time in a comparable
      arm’s-length transaction with a Person other than Techwell or any of its
      Affiliates.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (aa) Access
      to Full Art and CAE Information. Each
      Shareholder has
      had
      the opportunity to conduct its own independent investigation of Full Art and
      CAE
      and collect and review all materials made available by Full Art and publicly
      available by CAE to evaluate the Techwell Acquisition. Each Shareholder, its
      officers and directors and its representatives have been provided the
      opportunity to ask questions of, and receive answers from, the directors and
      officers of Full Art concerning the business of Full Art and CAE. Each
      Shareholder acknowledges that it has had access to sufficient information to
      understand the merits and risks associated with the Techwell Acquisition. To
      the
      extent that any Shareholder has deemed it appropriate to do so, he or she has
      retained, and relied upon, appropriate professional advice concerning the tax,
      legal, business and financial merits and consequences of consummating the
      transactions contemplated by this Agreement and the Transaction Documents.
      

     

    (bb) Disclosure.
      None of
      the representations or warranties of any Shareholder contained in this Article
      Three and none of the statements and information contained in the Techwell
      Disclosure Schedule referenced in Article Three or in any certificate, document
      or other instrument delivered by any Shareholder pursuant to this Agreement
      is
      false or misleading in any material respect or omits to state a fact necessary
      to make the statements therein not misleading in any material respect. None
      of
      the representations or warranties of any Shareholder contained in Article Four
      and none of the information contained in the Techwell Disclosure Schedule
      referenced in Article Four is false or misleading in any material respect or
      omits to state a fact necessary to make the statements in Article Four or in
      the
      Techwell Disclosure Schedule referenced in Article Four not misleading in any
      material respect.

     

    (cc) Foreign
      Corrupt Practices Act. None
      of
      Techwell, the Shareholders, any director, officer, agent or employee of any
      of
      them, and any other Person associated with or acting for or on behalf of any
      of
      them has directly or indirectly (1) made any contribution, gift, bribe, rebate,
      payoff, influence payment, kickback, or other payment to any Person, private
      or
      public, regardless of form, whether in money, property, or services (i) to
      obtain favourable treatment in securing business, (ii) to pay for favourable
      treatment for business secured, (iii) to obtain special concessions or for
      special concessions already obtained, for or in respect of Techwell (or any
      Affiliate thereof),
      in
      violation of any law or otherwise constituting an offence under the Foreign
      Corrupt Practices Act of 1977 of the United States, as amended
      (assuming for these purposes that the Shareholders and Techwell were subject
      to
      that Act), or
      (iv)
      in violation of any law (including without limitation any relevant and
      applicable Tax laws or in relation to the payment or non-payment of any Taxes
      by
      Techwell or any Shareholder), or (2) established or maintained any fund or
      asset
      that has not been recorded in the books and records of Techwell,
      or (3)
has
      violated any anti-corruption or anti-bribery laws or regulations of Hong Kong,
      the PRC
      or
      equivalent laws and regulations promulgated in any other
      jurisdictions.
      None of
      the assets and properties of Techwell were obtained or procured through any
      contribution, gift, bribe, rebate, payoff, influence payment, kickback, or
      other
      payment to any Person, private or public, regardless of form, whether in money,
      property, or services that would have violated the foregoing representations
      and
      warranties.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (dd) Account
      Receivables. Section
      3.01(dd) of the Techwell Disclosure Schedule sets forth an accurate, correct
      and
      complete list of all account receivables of Techwell existing as of September
      30, 2007 (“Receivables”). 
      Each Receivable is (1) a valid and legally binding obligation of the
      account debtor enforceable in accordance with its terms and not subject to
      set-offs, adverse claims, counterclaims, assessments, defaults, prepayments,
      defenses or conditions precedent; (2) a true and correct statement of the
      account for products actually sold and delivered to, or for services actually
      performed for and accepted by, such account debtor; and (3) except as set
      forth in Section 3.01(dd) of the Techwell Disclosure Schedule, fully collectible
      within twenty-four (24) months following the date of Closing, subject to trade
      discounts provided in the ordinary and usual course of the Business consistent
      with past practice and any allowance for doubtful accounts contained in the
      Techwell Financial Statements.

     

    (ee) PRC
      Entities. Section
      3.01(ee) of the Techwell Disclosure Schedule contains a complete list and
      accurate corporate particulars of each
      Techwell Subsidiary established or organized under the laws of the PRC,
      including details of the holders of any equity interest or joint venture parties
      therein and the extent of their respective interests. Without limiting the
      other
      provisions of this Section 3.01, the following representations and warranties
      shall apply to each Techwell Subsidiary established or organized under the
      laws
      of the PRC: 

     

    (i) The
      articles, other constitutional documents and certificates of approval and any
      related joint venture contracts of the Techwell Subsidiary are valid and have
      been duly approved and registered (as applicable) by competent PRC Governmental
      Authorities;

     

    (ii) All
      business and other licenses, certificates, consents, approvals, qualifications,
      permits and other authorizations required from any Governmental Authority under
      any applicable Legal Requirements and Governmental Requirements in the PRC
      for
      the due and proper establishment and operation of the Techwell Subsidiary and
      its business have been duly obtained and made and are in full force and
      effect.

     

    (iii) All
      filings, declarations, exemptions and registrations from or with all applicable
      and competent PRC Governmental Authorities required in respect of the Techwell
      Subsidiary and its operations including, without limitation, registrations
      with
      Foreign Economic Relations and Trade Commission, State or the relevant local
      Administration of Industry and Commerce, State Administration for Foreign
      Exchange, tax bureau and customs authorities have been duly completed in
      accordance with all applicable Legal Requirements and Governmental Requirements
      in the PRC.

     

    (iv) Techwell
      has complied with all applicable Legal Requirements and Governmental
      Requirements in the PRC regarding the contribution and payment of the registered
      or share capital of any Techwell Subsidiary, the payment schedule of which
      has
      been approved by competent PRC Governmental Authorities, and all such
      contributions and payments due on or prior to the date of Closing have been
      fully paid. Particulars of any such contributions and payments that remain
      outstanding after the date of Closing are fully set forth in Section 3.01(ee)
      of
      the Techwell Disclosure Schedule.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (v) Techwell
      Subsidiary is not in receipt of any letter or notice from any PRC Governmental
      Authority notifying revocation of any Permits or Licenses issued to it by any
      PRC Governmental Authority for non-compliance or the need for compliance or
      remedial actions in respect of the activities carried out by it.

     

    (vi) Techwell
      Subsidiary has been conducting and will conduct its business activities within
      the permitted scope of its business license or is otherwise operating its
      business in full compliance with all applicable Legal Requirements and
      Governmental Requirements and with all requisite Permits and Licenses granted
      by
      competent PRC Governmental Authorities or any other Person.

     

    (vii) All
      Licenses and Permits required for the conduct of any part of the Business which
      are subject to periodic renewal have been obtained and there are no grounds
      on
      which such renewals will not be granted by the relevant PRC Governmental
      Authorities or other Persons.

     

    (viii) Techwell
      Subsidiary has complied with all Legal Requirement and Governmental Requirement
      in the PRC with regard to employment, labour or labour contracts, staff or
      labour management or protection, including without limitation those pertaining
      to welfare funds, social benefits, social insurance contributions, medical
      benefits, insurance, retirement benefits, pensions and the like.

     

     

    (ff) Due
      Diligence. None of the statements (whether written or oral) made by any
      Shareholder or employee of Techwell (including, without limitation, any
      documents and information supplied by such Persons) in response to the
      preliminary due diligence questionnaire (the “Diligence
      Request”) dated October 5, 2007 (including, without limitation, any
      oral statements made to CAE’s directors, officers, employees and/or legal
      representatives are untrue or misleading in ay manner or omit to state any
      material fact. A copy of Techwell’s response to the Diligence Request is
      attached hereto as Exhibit C.

     

    ARTICLE
      FOUR

    REPRESENTATIONS
      AND WARRANTIES OF THE SHAREHOLDERS

     

    
      	 	
              4.01

            	
              Representations
                and Warranties of the
                Shareholders.

            

    

     

    Each
      Shareholder hereby severally warrants and represents to Full Art and CAE
      that:

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (a)

            	
              Investment
                Representations. 

            

    

     

    (i) Each
      Shareholder has received this Agreement and carefully read such Agreement;
      the
      decision to acquire CAE Common Shares has been taken solely in reliance upon
      the
      information contained in this Agreement, and such other written information
      supplied by an authorized representative of CAE as each Shareholder may have
      requested. Each Shareholder acknowledges that all documents, records and books
      pertaining to this investment have been made available for inspection by such
      Shareholder, its attorneys, accountants and purchaser representatives upon
      request prior to tendering this Agreement, and that it has been informed by
      CAE
      that its books and records will be available for inspection by each Shareholder
      or its agents and representatives at any time, and from time to time, during
      reasonable business hours and upon reasonable notice. Each Shareholder further
      acknowledges that it (or its advisors, agents and/or representatives) has had
      a
      reasonable and adequate opportunity to ask questions of and receive answers
      from
      CAE concerning the terms and conditions of the acquisition of CAE Common Shares,
      the nature of CAE Common Shares and the business and operations of CAE, and
      to
      obtain from CAE such additional information, to the extent possessed or
      obtainable without unreasonable effort or expense, as is necessary to verify
      the
      accuracy of the information contained in this Agreement or otherwise provided
      by
      CAE; all such questions have been answered by CAE to the full satisfaction
      of
      each Shareholder. No Shareholder is relying upon any oral information furnished
      by CAE or any other person in connection with its investment decision, and
      in
      any event, no such oral information has been furnished to any Shareholder which
      is in any way inconsistent with or contradictory to any information contained
      in
      this Agreement, or otherwise provided to any Shareholder by CAE in writing
      as
      described above.

     

    (ii) Each
      Shareholder meets the criteria established in one or more of subsections (1)
      or
      (2) below:

     

    
      	 	
              (1)

            	
              Shareholder
                is an “accredited investor” as such term is defined in Rule 501 of
                Regulation D, promulgated under the 1933
                Act.

            

    

     

    
      	 	
              (2)

            	
              Shareholder
                is not a U.S. Person, as defined in Rule 901 of Regulation S, promulgated
                under the 1933 Act and such Shareholder severally represents and
                warrants
                that:

            

    

     

    (A) Shareholder
      is not acquiring the CAE Common Shares as a result of, and such Shareholder
      covenants that he, she or it will not engage in any “directed selling efforts”
(as defined in Regulation S under the 1933 Act) in the United States in
      respect of the CAE Common Shares which would include any activities undertaken
      for the purpose of, or that could reasonably be expected to have the effect
      of,
      conditioning the market in the United States for the resale of any of the CAE
      Common Shares;

     

    (B) Shareholder
      is not acquiring the CAE Common Shares for the account or benefit of, directly
      or indirectly, any U.S. Person;

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (C) Shareholder
      is a resident of the jurisdiction in which such Shareholder
      resides;

     

    (D) the
      offer
      and the sale of the CAE Common Shares to such Shareholder as contemplated in
      this Agreement complies with or is exempt from the applicable securities
      legislation of the jurisdiction in which the Shareholder resides;

     

    (E) Shareholder
      is outside the United States when receiving and executing this Agreement and
      that the Shareholder will be outside the United States when acquiring the CAE
      Common Shares, 

     

    (F) and
      the
      Shareholder covenants with Full Art and CAE that:

     

    (a) offers
      and sales of any of the CAE Common Shares prior to the expiration of a period
      of
      one year after the date of original issuance of the CAE Common Shares (the
      one
      year period hereinafter referred to as the “Distribution
      Compliance Period”)
      shall
      only be made in compliance with the safe harbor provisions set forth in
      Regulation S, pursuant to the registration provisions of the 1933 Act or an
      exemption therefrom, and that all offers and sales after the Distribution
      Compliance Period shall be made only in compliance with the registration
      provisions of the 1933 Act or an exemption therefrom and in each case only
      in
      accordance with applicable state securities laws; and

     

    (b) Shareholder
      will
      not
      engage in hedging transactions with respect to the CAE Common Shares until
      after
      the expiration of the Distribution Compliance Period.

     

    (iii) Each
      Shareholder: (1) has adequate net worth and means of providing for current
      financial needs and possible personal contingencies, (2) has no need for
      liquidity in this investment; and (3) is able to bear the economic risks of
      an
      investment in CAE Common Shares for an indefinite period of time, and of losing
      the entire amount of such investment.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (iv) Each
      Shareholder understands and acknowledges that an acquirer of CAE Common Shares
      must be prepared to bear the economic risk of such investment for an indefinite
      period because of: (A) the heightened nature of the risks associated with an
      investment in CAE due to its status as a development stage company; (B)
      illiquidity of the CAE Common Shares due to the fact such stock has not been
      registered under the 1933 Act or any state securities act (nor passed upon
      by
      the SEC or any state securities commission), and CAE Common Shares has not
      been
      registered or qualified by any Shareholder under federal or state securities
      laws solely in reliance upon an available exemption from such registration
      or
      qualification, and hence such CAE Common Shares cannot be sold unless it is
      subsequently so registered or qualified (which is not likely), or are otherwise
      subject to any applicable exemption from such registration requirements; and
      (C)
      substantial restrictions on the transfer of CAE Common Shares, as set forth
      in,
      among other documents, this Agreement and by legend on the face or reverse
      side
      of any certificate evidencing an ownership interest in CAE.

     

    (v) Each
      Shareholder either (i) has a pre-existing personal or business relationship
      with
      Full Art, its officers, directors or affiliates; or (ii) alone or with its
      representatives, such knowledge and experience in financial and business matters
      that it is capable of evaluating the merits and risks of an investment in CAE
      Common Shares.

     

    (vi) Each
      Shareholder understands and acknowledges that an investment in CAE Common Shares
      is speculative in nature, and involves certain risks.

     

    (vii) 
      No
      Shareholder is a member of the National Association of Securities Dealers,
      or of
      any other self-regulatory agency which would require approval prior to any
      acquisition of CAE Common Shares.

     

    (viii) Each
      Shareholder is acquiring CAE Common Shares for its own investment, and not
      with
      a view toward the subdivision, resale, distribution, or fractionalization
      thereof. No Shareholder has any contract, undertaking, arrangement or obligation
      with or to any person to sell, transfer, or otherwise dispose of CAE Common
      Shares (or any portion thereof hereby acquired), nor has a present intention
      to
      enter into any such contract, undertaking, agreement or
      arrangement.

     

    (ix) The
      offering of CAE Common Shares was made only through direct, personal
      communication between each Shareholder (or a representative thereof) and CAE;
      the acquisition of CAE Common Shares by each Shareholder is not the result
      of
      any form of general solicitation or general advertising including, but not
      limited to, the following: (i) any advertisement, article, notice or other
      communication published in any newspaper, magazine, or other written
      communication, or broadcast over television, radio or any other medium; or
      (ii)
      any seminar or meeting to which the attendees had been invited by any general
      solicitation or general advertising.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (x) Each
      Shareholder has been advised to consult with an attorney regarding legal matters
      concerning the acquisition and ownership of CAE Common Shares, and with a tax
      advisor regarding the tax consequences of acquiring such stock.

     

    (xi) No
      Shareholder has distributed this Agreement, or any other information pertaining
      to the acquisition of CAE Common Shares hereunder, to anyone other than its
      representative and/or its investment, legal or accounting advisors in connection
      with its consideration of an acquisition of CAE Common Shares.

     

    (xii) No
      Shareholder was organized for the specific purpose of acquiring the CAE Common
      Shares subscribed for herein, and has other investments or business activities
      besides investing in CAE, unless any Shareholder has indicated the contrary
      to
      CAE in writing. Each Shareholder has specified in writing the number and
      character (i.e., individual, corporate, company, etc.) of the beneficial owners
      thereof.

     

     

    (b) Third-Party
      Proceedings. No Shareholder is bound by or subject to any contract,
      agreement, law, court order or judgment, administrative ruling, regulation
      or
      any other item which prohibits or restricts it from entering into and performing
      this Agreement in accordance with its terms, or requiring the consent of any
      third party prior to the entry into or performance of this Agreement in
      accordance with its terms by such party. 

     

     

    
      	 	
              (c)

            	
              Legal
                Proceedings; Compliance. 

            

    

     

    (i) There
      are
      no actions, suits, proceedings, or arbitrations or investigations pending,
      or to
      the Knowledge of each Shareholder, threatened in any court or before any
      governmental agency or instrumentality or arbitration panel or otherwise against
      such Shareholder (1) which seek to or could restrain, prohibit, rescind or
      declare unlawful, or result in substantial damage in respect of, the transfer
      of
      the Techwell Shares as contemplated by this Agreement, or (2) in which an
      adverse determination could reasonably be expected, singly or in the aggregate,
      to have a materially adverse effect on any Shareholder or its ability to perform
      its obligations under this Agreement.

     

    (ii) No
      Shareholder is subject to any judgment, order, decree or governmental
      restriction which could reasonably be expected to have a materially adverse
      effect on the operations of such Shareholder or which would interfere with
      the
      sale of the Techwell Shares contemplated by this Agreement.

     

     

    (d) Disclosure.
      None of the representations or warranties of any Shareholder contained
      in
      this Article Four and none of the information in respect of any Shareholder
      contained in the Techwell Disclosure Schedule referenced in this Article Four
      is
      false or misleading in any material respect or omits to state a fact necessary
      to make the statements in this Article Four or in the Techwell Disclosure
      Schedule to Article Four not misleading in any material respect. 

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      FIVE

    REPRESENTATIONS
      AND WARRANTIES OF FULL ART

     

    
      	 	
              5.01

            	
              Representations
                and Warranties of Full Art. 

            

    

     

    Full
      Art
      hereby warrants and represents to Techwell and the Shareholders
      that:

     

    (a) Corporate
      Status. Full Art is a Hong Kong corporation duly organized and validly
      existing under the laws of Hong Kong and has the full corporate power and
      authority to own its property, to carry on its business as presently conducted
      and to enter into and to perform its obligations under this Agreement and
      consummate the transactions contemplated by this Agreement. Full Art is duly
      qualified to do business as a foreign corporation in each other jurisdiction
      where the character or location of the business conducted by it makes such
      qualifications necessary. Full Art has made available to the Shareholders true
      and complete copies of its Memorandum and Articles of Association, including
      any
      amendments thereto.

     

    (b) Corporate
      Authority; Authorized and Effective Agreement.
      Full
      Art
      has full legal capacity and power to execute and deliver this Agreement and
      the
      Transaction Documents to which Full Art is a party, which Agreement and
      Transaction Documents have been or will, on or prior to Closing, be duly
      executed and delivered by Full Art and constitute the valid and binding
      obligation of Full Art enforceable
      against Full Art in accordance with its terms except (i) as limited by
      applicable bankruptcy, insolvency, reorganization, moratorium and other laws
      of
      general application affecting enforcement of creditors’ rights generally, (ii)
      as limited by laws relating to the availability of specific performance,
      injunctive relief or other equitable remedies and (iii) insofar as
      indemnification and contribution provisions may be limited by applicable law.
      

     

    (c) Legal
      Proceedings.
      There
      are no actions, suits, proceedings, claims or investigations pending or, to
      the
      Knowledge of Full Art, threatened in any court, before any governmental agency
      or instrumentality or in any arbitration proceeding against or by Full Art
      which, individually or in the aggregate, would have a Material Adverse Effect
      on
      Full Art. 

     

    (d) No
      Conflict.
      The
      execution, delivery and performance of this Agreement and the Transaction
      Documents, and the consummation of the transactions contemplated hereby, by
      Full
      Art do not and will not (i) conflict with, or result in a violation of, or
      result in the breach of or a default (or which with notice or lapse of time
      would result in a default) under, any provision of: (A) any federal, state
      or
      local law, regulation, ordinance, order, rule or administrative ruling of any
      Governmental Authorities applicable to Full Art or its properties; (B) the
      Memorandum and Articles of Association of Full Art; or (C) any material
      agreement, material indenture or material instrument to which Full Art is a
      party or by which it or its properties or assets may be bound; or (D) any order,
      judgment, writ, injunction or decree of any court, arbitration panel or any
      Governmental Authorities applicable to Full Art; (ii) result in the
      creation or acceleration of any security interest, mortgage, option, lien,
      or
      encumbrance upon any property of Full Art, or (iii) violate the terms or
      conditions of, or result in the cancellation, modification, revocation or
      suspension of, any contract, agreement, license, approval, certificate, permit
      or authorization held by Full Art.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (e) Brokers,
      Finders and Others.
      There
      are no fees or commissions of any sort whatsoever claimed by, or payable by
      Full
      Art to, any broker, finder, intermediary or any other similar person in
      connection with effecting this Agreement or the transactions contemplated
      hereby, except for ordinary and customary legal and accounting
      fees.

     

    ARTICLE
      SIX

    REPRESENTATIONS
      AND WARRANTIES OF CAE

     

    
      	 	
              6.01

            	
              Representations
                and Warranties of CAE. 

            

    

     

    CAE
      hereby warrants and represents to Techwell and the Shareholders
      that:

     

    (a) Subsidiaries.
      All of the subsidiaries of CAE (each a “CAE Subsidiary” and
      collectively, the “CAE Subsidiaries”) are set forth on Section
      6.01(a) of the disclosure schedule attached hereto as Exhibit D
      (“Full Art Disclosure Schedule”). CAE owns, directly or
      indirectly, all of the capital stock or other equity interests of each CAE
      Subsidiary free and clear of any liens, and all the issued and outstanding
      shares of capital stock of each CAE Subsidiary are validly issued and are fully
      paid, non-assessable and free of preemptive and similar rights to subscribe
      for
      or purchase securities.

     

    (b) Corporate
      Status.
      Each of
      CAE and the CAE Subsidiaries is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own and use its properties and assets and
      to
      carry on its business as currently conducted. Neither CAE nor any CAE Subsidiary
      is in violation or default of any of the provisions of its respective
      certificate or Articles of Incorporation, Bylaws or other organizational or
      charter documents. CAE and each CAE Subsidiary is duly qualified to conduct
      business and is in good standing as a foreign corporation or other entity in
      each jurisdiction in which the nature of the business conducted or property
      owned by it makes such qualification necessary, except where the failure to
      be
      so qualified or in good standing, as the case may be, would not result in a
      Material Adverse Effect and no proceeding has been instituted in any such
      jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
      curtail such power and authority or qualification.

     

    (c) Corporate
      Authority; Authorized and Effective Agreement.
      CAE has
      full legal capacity and power to execute and deliver this Agreement and the
      Transaction Documents to which CAE is a party, which Agreement and such
      Transaction Documents have been duly executed and delivered by CAE and
      constitute the valid and binding obligation of CAE enforceable against CAE
      in
      accordance with its terms except (i) as limited by applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by laws
      relating to the availability of specific performance, injunctive relief or
      other
      equitable remedies and (iii) insofar as indemnification and contribution
      provisions may be limited by applicable law. 

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    (d) No
      Conflict.
      The
      execution, delivery and performance of this Agreement and the Transaction
      Documents, and the consummation of the transactions contemplated hereby, by
      CAE
      do not and will not (i) conflict with, or result in a violation of, or
      result in the breach of or a default (or which with notice or lapse of time
      would result in a default) under, any provision of: (A) any federal, state
      or
      local law, regulation, ordinance, order, rule or administrative ruling of any
      Governmental Authorities applicable to CAE or its properties; (B) the
      Articles of Incorporation or Bylaws of CAE; or (C) any material agreement,
      material indenture or material instrument to which CAE is a party or by which
      it
      or its properties or assets may be bound; or (D) any order, judgment, writ,
      injunction or decree of any court, arbitration panel or any Governmental
      Authorities applicable to CAE; (ii) result in the creation or acceleration
      of any security interest, mortgage, option, lien, or encumbrance upon any
      property of CAE, or (iii) violate the terms or conditions of, or result in
      the cancellation, modification, revocation or suspension of, any contract,
      agreement, license, approval, certificate, permit or authorization held by
      CAE.

     

    
      	 	
              (e)

            	
              Capitalization
                of CAE.

            

    

     

    (i) As
      of the
      date hereof, the authorized capital stock of CAE consists of (A) 100,000,000
      shares of common stock, no par value (the “CAE Common Shares”),
      of
      which 51,079,638 common shares are issued and outstanding and (B) 10,000,000
      shares of preferred stock, $.001 par value (the “CAE
      Preferred Shares”
and
      together with the CAE Common Shares, the “CAE
      Shares”),
      of
      which no shares are issued and outstanding. Section 6.01(e)(i) of the Full
      Art
      Disclosure Schedule sets forth a complete and correct list of the CAE Common
      Shares currently outstanding. All of the outstanding CAE Shares have been duly
      authorized and are validly issued, fully paid and non-assessable, and were
      not
      issued in violation of the preemptive rights of any person. All CAE Common
      Shares to be issued hereunder will be issued in compliance in all material
      respects with all applicable federal and state securities laws. As of the date
      of this Agreement, except as disclosed in CAE’s most recently filed periodic
      report with the Securities and Exchange Commission (the “Periodic
      Report”)
      and
      except for CAE Common Shares issuable pursuant to this Agreement and except
      as
      otherwise disclosed in Section 6.01(e)(i) of the Full Art Disclosure Schedule,
      CAE has no other commitment or obligation to issue, deliver or sell, or cause
      to
      be issued, delivered or sold, any CAE Common Shares. Except as set forth in
      the
      Periodic Report and except as otherwise disclosed in Section 6.01(e)(i) of
      the
      Full Art Disclosure Schedule, there are no bonds, debentures, notes or other
      indebtedness of CAE, and no securities or other instruments or obligations
      of
      CAE the value of which is in any way based upon or derived from any capital
      or
      voting stock of CAE, having the right to vote (or convertible into, or
      exchangeable for, securities having the right to vote) on any matters on which
      stockholders of CAE may vote. Except as set forth above, as of the date of
      this
      Agreement, there are no material contracts of any kind to which CAE is a party
      or by which CAE is bound obligating CAE to issue, deliver or sell, or cause
      to
      be issued, delivered or sold, additional shares of capital stock of, or other
      equity or voting interests in, or securities convertible into, or exchangeable
      or exercisable for, shares of capital stock of, or other equity or voting
      interests in, CAE or obligating CAE to issue, grant, extend or enter into any
      such security, option, warrant, call, right or contract. There are no
      outstanding contractual obligations of CAE to repurchase, redeem or otherwise
      acquire any shares of capital stock of, or other equity or voting interests
      in,
      CAE.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (ii) The
      CAE
      Common Shares to be issued in exchange for the Techwell Shares as a portion
      of
      the Aggregate Purchase Price, when issued in accordance with the terms of this
      Agreement, will be duly authorized, validly issued, fully paid and
      non-assessable, and will not be subject to any preemptive or other statutory
      right of CAE stockholders.

     

    (f) Financial
      Statements of CAE. CAE has furnished to the Shareholders financial
      statements of CAE consisting of the balance sheets as of December for each
      of the years 2006 and 2005, and the related statements of income, changes in
      shareholders’ equity and cash flows for the two (2) years ended December 31,
      2006, including accompanying notes and the report thereon of Samuel H. Wong
      & Co., LLP, and the statement of financial condition as of September 30,
      2007 (the “CAE Balance Sheet Date”) and the related statements
      of earnings, shareholders’ equity and cash flows for the nine (9) months then
      ended (collectively, all of such financial statements are referred to as the
      “CAE Financial Statements”). The CAE Financial Statements have
      been prepared in accordance with GAAP applied on a consistent basis during
      the
      periods involved (except as may be indicated in the notes thereto) and fairly
      present in all material respects the financial position of CAE as of the dates
      thereof and their respective results of operations and cash flows for the
      periods then ended (subject, in the case of unaudited statements, to normal
      year-end audit adjustments). 

     

    (g) Absence
      of Undisclosed Liabilities.
      Except
      as disclosed in the Periodic Report and except as set forth in the CAE Financial
      Statements or in Section 6.01(g) of the Full Art Disclosure Schedule and except
      as arising hereunder, CAE has no liabilities or obligations of any nature
      (whether accrued, absolute, contingent or otherwise) except as otherwise
      disclosed on the CAE Financial Statements, or incurred since CAE Balance Sheet
      Date in the ordinary course of business and usual and normal in amount both
      individually and in the aggregate. 

     

    (h) Absence
      of Changes.
      Since
      the CAE Balance Sheet Date, CAE has operated its business in the ordinary course
      consistent with past practice, and there has not been any Material Adverse
      Effect respecting CAE. 

     

    (i) Taxes.
      CAE has
      timely filed or caused to be filed on a timely basis all Tax Returns with
      respect to all Taxes required to be filed under applicable laws and regulations.
      Such Tax Returns are true, correct and complete in all respects. All Taxes
      due
      and owing by CAE (whether or not showing on any Tax Return) have been paid.
      CAE
      is not currently the beneficiary of any extension of time in which to file
      any
      Tax Return. No written claim has ever been made by any authority in a
      jurisdiction where CAE does not file Tax Returns that Full Art is or may be
      subject to taxation by that jurisdiction. There are no liens for Taxes (other
      than for Taxes not yet due and payable) upon any of the assets of CAE. CAE
      has
      not waived any statute of limitations in respect of Taxes or agreed to any
      extension of time with respect to a Tax assessment or deficiency.

     

    (j) Legal
      Proceedings.
      There
      are no actions, suits, proceedings, claims or investigations pending or, to
      the
      Knowledge of CAE, threatened in any court, before any governmental agency or
      instrumentality or in any arbitration proceeding against or by CAE, the effect
      of which would constitute a Material Adverse Effect on CAE. 

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (k) Regulatory
      Matters.
      CAE is
      not a party to and neither CAE nor any of its properties or assets is subject
      to
      any order, judgment, decree, agreement, memorandum of understanding or similar
      arrangement with any Governmental Authority charged with the supervision or
      regulation of CAE. CAE has not been advised by any of the Governmental
      Authorities that any of such Governmental Authorities are contemplating issuing
      or requesting (or are considering the appropriateness of issuing or requesting)
      any such order, judgment, decree, agreement, memorandum of understanding,
      supervisory letter or similar submission.

     

    (l) Brokers,
      Finders and Others.
      There
      are no fees or commissions of any sort whatsoever claimed by, or payable by
      CAE
      to, any broker, finder, intermediary or any other similar person in connection
      with effecting this Agreement or the transactions contemplated hereby, except
      for ordinary and customary legal and accounting fees.

     

    (m) Compliance
      with Laws.
      Except
      as disclosed in the Periodic Report and except as set forth in Section 6.01(m)
      of the Full Art Disclosure Schedule, CAE:

     

    (i) is
      in
      compliance, in all material respects, with all applicable federal, state, local
      and foreign statutes, laws, regulations, ordinances, rules, judgments, orders
      or
      decrees applicable thereto or to the employees conducting such
      business;

     

    (ii) has
      all
      material permits, licenses, authorizations, orders and approvals of, and has
      made all filings, applications and registrations with, all Governmental
      Authorities that are required in order to permit it to own or lease its
      properties and to conduct its business as presently conducted; all such permits,
      licenses, certificates of authority, orders and approvals are in full force
      and
      effect and no suspension or cancellation of any of them has been threatened
      in
      writing; and

     

    (iii) has
      received no written notification or communication from any Governmental
      Authorities since January 1, 2001, (A) asserting that CAE is not in
      compliance with any of the statutes, regulations or ordinances which such
      Governmental Authorities enforce, or (B) threatening to revoke any license,
      franchise, permit or governmental authorization which has not been resolved
      to
      the satisfaction of the Governmental Authorities which sent such notification
      or
      communication. There is no event which has occurred that, to the knowledge
      of
      CAE, would reasonably be expected to result in the revocation of any such
      license, franchise, permit or governmental authorization.

     

    (n) Governmental
      and Third-Party Proceedings. Except as set forth in Section 6.01(n) of the
      Full Art Disclosure Schedule, no consent, approval, authorization of, or
      registration, declaration or filing with, any court, Governmental Authorities
      or
      any other third party is required to be made or obtained by CAE in connection
      with the execution, delivery or performance by CAE of this Agreement and the
      Transaction Documents or the consummation by CAE of the transactions
      contemplated hereby.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      SEVEN

    FURTHER
      OBLIGATIONS OF THE PARTIES

     

    
      	 	
              7.01

            	
              Necessary
                Further Action.

            

    

     

    Each
      of
      Full Art and each Shareholder agrees to use its commercially reasonable efforts
      to take, or cause to be taken, all necessary actions and execute all additional
      documents, agreements and instruments required to consummate the transactions
      contemplated in this Agreement including taking all steps to secure promptly
      all
      consents, rulings and approvals of Governmental Authorities and Carriers which
      are necessary for the performance by each party of each of its obligations
      under
      this Agreement and the transactions contemplated hereby.

     

    
      	 	
              7.02

            	
              Press
                Releases.

            

    

     

    Neither
      the Shareholders nor Full Art shall, and the Shareholders shall procure Techwell
      to not, make any press release or other public announcement concerning the
      transactions contemplated by this Agreement without the prior written consent
      of
      the other parties hereto as to the form and contents of such press release
      or
      public announcement.

     

    
      	 	
              7.03

            	
              Further
                Covenants.

            

    

     

    (a) Each
      Shareholder covenants to Full Art that it will not, without the prior written
      consent of Full Art, for a period of two (2) years after the date of Closing,
      either solely or jointly with or on behalf of any other Person or otherwise,
      whether as a director, shareholder, employee, partner, agent or
      otherwise:

     

    (i) carry
      on
      or be engaged or interested directly or indirectly in any capacity (except
      as
      the owner of shares or securities listed or dealt in on an internationally
      recognized stock exchange in Hong Kong or elsewhere held by way of investment
      only) in any business which may be in competition within Hong Kong, Macau or
      PRC
      with Techwell or any Techwell Subsidiaries in the carrying on of the
      Business;

     

    (ii) solicit
      or entice or endeavor to solicit or entice away from Techwell or any Techwell
      Subsidiaries any employee, officer, manager, consultant (including employees
      who
      are directors) of Techwell or any Techwell Subsidiaries or any Persons whose
      services are otherwise made available to Techwell or any Techwell Subsidiaries
      on a full-time or substantially full-time basis;

     

    (iii) deal
      with, canvass, solicit or approach or cause to be dealt with, canvassed or
      solicited or approached for business in respect of any trade or business carried
      on or service provided by Techwell or any Techwell Subsidiary any Person who
      at
      Closing or within two years prior to Closing was a customer, supplier, client,
      representative, agent of or in the habit of dealing under contract with Techwell
      or any Techwell Subsidiary.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (b) Each
      Shareholder further covenants to Full Art that:

     

    (i) it
      will
      not at any time hereafter make use of or disclose or divulge to any Person
      other
      than to officers or employees of Techwell whose province it is to know the
      same
      any information relating to Techwell or any Techwell Subsidiary other than
      any
      information properly available to the public through no breach of its
      obligations hereunder or disclosed or divulged pursuant to an order of a court
      of competent jurisdiction;

     

    (ii) it
      will
      not at any time hereafter in relation to any trade, business or company use
      a
      name including the word or symbol “Techwell”, “Techwell Engineering,” “Techwell
      Engineering Limited” or any Chinese equivalent thereof or any similar word or
      symbol in such a way as to be capable of or likely to be confused with the
      name
      of Techwell or any Techwell Subsidiary and shall use all reasonable endeavors
      to
      procure that no such name will be used by any Person with which it is
      connected;

     

    (iii) it
      will
      not do anything which might prejudice the goodwill of Techwell or any Techwell
      Subsidiary;

     

    (iv) it
      will
      procure that its Affiliates and their respective employees will observe the
      restrictions contained in this Section 7.03.

     

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

     

    (d) The
      restrictions contained in this Section 7.03 are considered reasonable by the
      Shareholders and the other parties hereto, but in the event that any such
      restriction shall be found to be void but would be valid if some part thereof
      were deleted or the area of operation or the period of application reduced,
      such
      restriction shall apply with such modification as may be necessary to make
      it
      valid and effective.

     

    
      	 	
              7.04

            	
              Lock-Up
                Agreement.

            

    

     

    (a) Each
      Shareholder agrees that other than as set forth below, such Shareholder shall
      not: (i) sell, assign, exchange, transfer, pledge, distribute or otherwise
      dispose of (X) any of the CAE Common Shares received by such Shareholder
      pursuant to this Agreement, or (Y) any interest (including, without limitation,
      an option to buy or sell) in any such CAE Common Shares, in whole or in part,
      and no such attempted transfer shall be treated as effective for any purpose;
      or
      (ii) engage in any transaction in respect of any CAE Common Shares received
      by
      such Shareholder pursuant to this Agreement or any interest therein, the intent
      or effect of which is the effective economic disposition of such shares
      (including, but not limited to, engaging in put, call, short-sale, straddle
      or
      similar market transactions) (the foregoing restrictions are referred to herein
      as “Lock-Up Restrictions”). 

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (b) Each
      Shareholder’s CAE Common Shares acquired pursuant to this Agreement shall be
      released from the Lock-Up Restrictions on the first (1st)
      anniversary of the Closing Date.

     

    (c) The
      certificates evidencing the CAE Common Shares received by the Shareholders
      pursuant to this Agreement shall bear a legend as set forth below and such
      legend shall remain during the term of this Lock-Up Agreement as set forth
      above:

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER RESTRICTIONS
      SET
      FORTH IN THAT CERTAIN STOCK PURCHASE AGREEMENT BY AND AMONG CHINA ARCHITECTURAL
      ENGINEERING, INC., A DELAWARE CORPORATION, FULL ART INTERNATIONAL, LTD., A
      HONG
      KONG CORPORATION, AND THE HOLDER HEREOF (THE “PURCHASE AGREEMENT”), AND MAY NOT
      BE SOLD, ASSIGNED, EXCHANGED, TRANSFERRED, ENCUMBERED, PLEDGED, DISTRIBUTED
      OR
      OTHERWISE DISPOSED OF PRIOR TO THAT CERTAIN TIME PERIOD DETAILED IN SECTION
      7.04
      OF THE PURCHASE AGREEMENT. THE ISSUER AGREES TO REMOVE THIS RESTRICTIVE LEGEND
      (AND ANY STOP ORDER PLACED WITH THE TRANSFER AGENT) UPON THE EXPIRATION OF
      THE
      TIME PERIOD SPECIFIED IN SECTION 7.04 OF THE PURCHASE AGREEMENT. A COPY OF
      THE
      PURCHASE AGREEMENT IS AVAILABLE FOR YOUR REVIEW AT THE PRINCIPAL EXECUTIVE
      OFFICE OF THE ISSUER.

     

    
      	
            	7.05	
              Techwell
                Building Systems (Shenzhen) Ltd. and Techwell International
                Limited.

            

    

     

    (a) Each
      Shareholder agrees to file, or cause to be filed, as soon as reasonably
      practicable and in any event within five (5) business days from the date of
      this
      Closing, any and all filings required by any Governmental Authority in
      connection with establishing Techwell’s ownership of the outstanding capital
      interests in each of Techwell Building Systems (Shenzhen) Ltd.
      (“Techwell Shenzhen”) and Techwell International Limited
      (“Techwell Macau”). Each Shareholder shall promptly notify Full
      Art upon completion of the filings and provide to Full Art evidence of such
      filings, including governmental acknowledgement of receipt of such filings,
      and
      each Shareholder shall promptly notify Full Art and provide proper documentation
      upon completion of the transfer of the capital interests of each of Techwell
      Shenzhen and Techwell Macau. In addition, each Shareholder shall take all
      efforts required to effect the fully, properly, and legally establish Techwell’s
      ownership of the outstanding capital interests in each of Techwell Shenzhen
      and
      Techwell Macau, as determined by Full Art’s legal counsel.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (b) Each
      Shareholder shall, as soon as reasonably practicable and in any event within
      seven (7) business days from the date of this Closing, cause to be delivered
      to
      Full Art (i) a legal opinion issued by Macau legal counsel with respect to
      Techwell Marcau (the “Macau Opinion”)
      and
      (ii) a legal opinion issued by PRC legal counsel with respect to Techwell
      Shenzhen (the “PRC
      Opinion”,
      and
      collectively with the Macau Opinion, the “Opinions”).
      The
      Opinions shall opine as to effectiveness and legality of the transfer of the
      capital equity interests of Techwell Shenzhen and Techwell Macau to Techwell,
      subject to the appropriate Governmental Authority’s processing of the transfer
      documents and filings as described in Section 7.05(a) above. In addition, the
      Opinions shall cover the incorporation, business operations, share capital,
      management, litigation, taxes, and social security of Techwell Shenzhen and
      Techwell Macau, respectively, and the Opinions shall be in the substantially
      the
      form as previously provided to each of the Shareholders and their legal
      counsel.

     

    
      	
            	7.06	
              Additional
                Covenants and Agreements

            

    

     

    Each
      of
      the Shareholders acknowledges and agrees to the following with respect to the
      sale of the Techwell Shares hereunder:

     

    (a) Shareholders
      have not provided adequate assurances to Full Art that any outstanding loans
      of
      Techwell whether secured by the Shareholders, South Crown Aluminum Building
      Systems Limited, a Hong Kong corporation, or otherwise shall not become
      immediately due and payable in full or in part as a result of the Closing.
      To
      the extent such loans become due and payable and Full Art and/or CAE is required
      to make any accelerated payments thereunder where such accelerated payments
      were
      caused by Shareholders’ failure to obtain the consent of any lender,
      Shareholders shall be jointly and severally liable for any and all costs
      incurred by Full Art and/or CAE regardless of any surety or guaranty, if
      any.

     

    (b) Shareholders
      acknowledge that there are several bank accounts relating to Techwell and/or
      the
      Techwell Subsidiaries on which one or both Shareholders are designated as
      authorized signatories. Immediately after the Closing, Shareholders shall take
      any and all action necessary to cause persons designated by Full Art to become
      authorized signatories on such accounts such that any disbursements made from
      said accounts can only be made pursuant to instructions from the authorized
      signatories as designated by Full Art.

     

    (c) Pursuant
      to certain Chinese transfer documents dated October 25, 2007, Techwell Shenzhen
      agreed to pay Shareholders individual consideration in the aggregate amount
      of
      Ten Million Hong Kong Dollars (HK$10,000,000) upon the effectiveness of the
      transfer of such Shareholders’ capital interests in Techwell Shenzhen. Techwell
      Macau has also agreed to pay Geoffrey Ng consideration in the amount of
      Twenty-Two Thousand Five Hundred MOP (MOP$22,500) as consideration for the
      transfer of his capital interest in Techwell Macau. To the extent that this
      is
      not Full Art’s understanding and agreement with Shareholders as of the date
      hereof, Shareholders shall waive any and all rights to receive such
      consideration and Techwell Shenzhen and Techwell Macau, as applicable, shall
      have no further obligation to pay such consideration to any Shareholder as
      it
      relates to such Shareholders’ transfer of his/her interests in either of
      Techwell Shenzhen or Techwell Macau.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    (d) Shareholders
      acknowledge that, notwithstanding the applicability of Macau laws regarding
      ownership of shares, a portion of Shareholders’ capital interests in Techwell
      Macau is currently held in trust. To the extent that CAE is unable to
      consolidate the financial statements of Techwell and the Techwell Subsidiaries
      in their entirety as a result of such trust or if such trust violates in any
      way
      the laws of Hong Kong, PRC or Macau, Shareholders shall take any and all action
      necessary to transfer such interests and shall be legally responsible for any
      failure to validly and legally effect the transfer of Shareholders’ capital
      interests in Techwell Macau. Further, Shareholders shall be jointly and
      severally liable for any damages to Full Art and/or CAE as a result of such
      transfer not being legally and validly effected.

     

    (e) Shareholders
      acknowledge that Techwell Shenzhen’s environmental protection approval from
      Nanshan Environment Protection Bureau (“Environmental
      Permit”)
      expired in January 2007 and as such, Techwell Shenzhen does not currently have
      an effective Environmental Permit. Immediately after the Closing, Shareholders
      shall take any and all action necessary to file or cause, or cause to be filed,
      as soon as reasonably practicable and in any event within five (5) business
      days
      from the date of this Closing, any and all filings required by Governmental
      Authorities in connection with obtaining and/or renewing its Environmental
      Permit. Shareholders shall be jointly and severally liable for any and all
      damages to Full Art and/or CAE as a result of such Environmental Permit not
      being effective prior to the Closing.

     

    (f) Shareholders
      acknowledge that to the extent that Techwell Shenzhen’s payments of social
      insurance to PRC Governmental Authorities do not meet the statutory requirements
      set forth under PRC law and Techwell Shenzhen is deemed liable for payments
      of
      social insurance with respect to any employees hired by Techwell Shenzhen on
      or
      prior to the Closing, Shareholders shall be jointly and severally liable for
      any
      and all such costs incurred by Full Art and/or CAE after the Closing with
      respect to such payments.

     

    (g) Shareholders
      acknowledge that to the extent that Techwell Shenzhen does not have any written
      employment agreements executed with its employees as required under the PRC
      Labor Law, Shareholders shall be jointly and severally liable for any and all
      damages incurred by Full Art and/or CAE as a result of such employment
      agreements not being executed on or before the Closing.

     

    ARTICLE
      EIGHT

    CONDITIONS
      PRECEDENT TO THE OBLIGATIONS OF THE PARTIES

     

    
      	 	
              8.01

            	
              Conditions
                to the Obligations of Full
                Art.

            

    

     

    The
      obligations of Full Art under this Agreement shall be subject to the
      satisfaction, or written waiver by Full Art prior to the Closing, of each of
      the
      following conditions precedent:

     

    (a) All
      material authorizations, consents, waivers and approvals required on the part
      of
      any Shareholder or Techwell in connection with the execution, delivery and
      performance of this Agreement or any Transaction Document to which it is a
      party
      shall have been duly obtained and shall be in form and substance reasonably
      satisfactory to Full Art and its counsel.

     

    (b) No
      legal action, investigation (whether antitrust or otherwise) or proceeding
      (including any petition, action or proceeding for or in relation to the
      winding-up, insolvency, liquidation or dissolution of Techwell or for the
      appointment of any receiver, trustee or similar officer of Techwell or any
      of
      its assets and properties) shall have been instituted by or threatened by any
      Person or Governmental Authority, in either case seeking to restrain, prohibit,
      invalidate or otherwise affect the consummation of the transactions contemplated
      hereby or which would, if adversely decided, materially adversely affect
      Techwell or the Business after the Closing Date.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    (c) The
      representations and warranties of the Shareholders set forth in this Agreement
      that are qualified with respect to materiality shall be true and correct as
      of
      the date of this Agreement and as of the Closing as though such representations
      and warranties were also made as of the Closing, except that those
      representations and warranties which by their terms speak as of a specific
      date
      shall be true and correct as of such date. The representations and warranties
      of
      the Shareholders set forth in this Agreement that are not qualified with respect
      to materiality shall be true and correct in all material respects as of the
      date
      of this Agreement and as of the Closing as though such representations and
      warranties were also made as of the Closing, except that those representations
      and warranties which by their terms speak as of a specific date shall be true
      and correct as of such date. Full Art shall have received a certificate, dated
      with the date of the Closing, signed by the Shareholders, to such
      effect.

     

    (d) Each
      Shareholder shall have performed in all material respects all of its covenants
      and obligations under this Agreement to be performed by it on or prior to the
      Closing, including those relating to the Closing, and Full Art shall have
      received a certificate, dated with the date of the Closing, signed by the
      Shareholders, to such effect.

     

    (e) The
      Transaction Documents shall have been duly executed and delivered by all parties
      hereto other than Full Art.

     

    (f) Instruments
      of transfer of the Techwell Shares duly executed by the respective registered
      holders thereof in favor of Full Art (or such other person(s) as it may direct)
      and contract notes (in a form complying with the Stamp Duty Ordinance, Chapter
      117 of the laws of Hong Kong) recording the sale and purchase of the Techwell
      Shares contemplated hereunder shall have been duly executed by the Shareholders
      and delivered to Full Art. 

     

    (g) The
      Shareholders shall have delivered to Full Art a cashier order in favor of the
      Government of the Hong Kong SAR on account of their share of Hong Kong stamp
      duty payable by them upon the sale and purchase of the Techwell Shares, together
      with a written undertaking on terms acceptable to Full Art by the Shareholders
      in favor of the Government of the Hong Kong SAR and/or Full Art to pay within
      forty-eight (48) hours after assessment fifty percent (50%) of any additional
      stamp duty which may be assessed payable in respect of the sale and purchase
      of
      the Techwell Shares.

     

    (h) No
      event
      or circumstance shall have occurred that would constitute a Material Adverse
      Effect with respect to Techwell.

     

    (i) The
      Shareholders shall have delivered to Full Art a certificate of continuing
      registration, dated as of a date not more than two (2) business days prior
      to
      the Closing Date (or such longer period as may be acceptable to Full Art),
      duly
      issued by the Registrar of Companies in Hong Kong and, if required by Full
      Art,
      any other certificate duly issued by the appropriate governmental authority
      in
      each state, if any, in which Techwell is authorized to do business, showing
      that
      Techwell is in good standing and authorized to do business. 

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    (j) Full
      Art
      shall have received the following documents in form and substance satisfactory
      to Full Art:

     

    (i) certificates
      in respect of all issued shares in the capital of each of the Techwell
      Subsidiaries held by Techwell or a subsidiary of Techwell and transfers of
      all
      shares in any Techwell Subsidiary held by any nominee of Techwell or of a
      subsidiary of Techwell in favour of Full Art or such other Person(s) as Full
      Art
      may direct;

     

    (ii) such
      waivers or consents as Full Art may require to enable Full Art or its nominee(s)
      to be registered as the holder(s) of the Techwell Shares and shares in the
      Techwell Subsidiaries referenced in subsection (i) above, and such other
      documents as may be reasonably required to give good title to the Techwell
      Shares free from all claims, liens, charges, equities and encumbrances and
      third
      party rights of any kind and to enable Full Art (or as it may nominate) to
      become the registered holder thereof;

     

    (iii) all
      title
      deeds and other documents of title to the Owned Properties and any other
      Techwell Real Properties to which Techwell or any Techwell Subsidiary holds
      land
      use rights, and all statutory books and records (including, without limitation,
      register of members, register of directors, register of secretaries and all
      minute books), duly written up to date, of Techwell and the Techwell
      Subsidiaries, their certificates of registration and securities and common
      seals;

     

    (iv) all
      books
      and accounts and other records, including without limitation, the cheque books
      and bank records of Techwell and the Techwell Subsidiaries;

     

    (v) if
      so
      required by Full Art, a letter of resignation from the auditors of Techwell
      and
      of its subsidiaries confirming that they have no outstanding claims of any
      kind
      against Techwell or any such subsidiaries;

     

    (vi) to
      the
      extent required by Full Art, evidence that all guarantees given by Techwell
      and
      the Techwell Subsidiaries in favor of third parties in respect of the
      performance of the obligations of any Shareholder or any other Person not being
      Techwell or one of the Techwell Subsidiaries have been released;

     

    (vii) to
      the
      extent required by Full Art, evidence that all loans or other indebtedness
      due
      or owing to Techwell or any of the Techwell Subsidiaries by any Shareholder
      or
      its Affiliate or by any directors or other officers of Techwell or any of the
      Techwell Subsidiaries have been repaid in full;

     

    (viii) powers
      of
      attorney, if necessary, on terms acceptable to Full Art, under which any of
      the
      documents referred to in this Section
      8.01(j)
      is
      executed;

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    (ix) duly
      executed resolutions of the board of directors of Techwell and, where required,
      of its Shareholders in accordance with its Memorandum and Articles of
      Association evidencing the following:

     

    (1) the
      approval by the board of directors of Techwell of the transfers of the Techwell
      Shares to Full Art or its nominee(s) and (subject only to the production of
      duly
      stamped transfers) its/their registration as members of Techwell in respect
      of
      the Techwell Shares;

     

    (2) such
      persons as Full Art may nominate to be validly appointed as directors of
      Techwell and Techwell Subsidiaries with effect from the date of
      Closing;

     

    (3) such
      directors and the secretary of Techwell and/or the Techwell Subsidiaries as
      Full
      Art may require to resign from all their offices with Techwell and/or such
      Techwell Subsidiaries, delivering to Full Art a letter under seal from each
      of
      such directors and secretary acknowledging that he/she has no claim outstanding
      for compensation or otherwise against Techwell and the relevant Techwell
      Subsidiaries; and

     

    (4) such
      person(s) as Full Art may nominate to be the authorised signatories for the
      operation of the bank accounts of Techwell and any Techwell Subsidiaries and
      cause the removal of such existing authorised signatories as Full Art may
      direct.

     

    (k) Ng
      Chi Sum shall have entered into an employment agreement with Techwell to act
      as
      General Manager of Techwell in substantially the form attached hereto as
Exhibit E (the “Employment Agreement”). 

     

    (l) The
      net
      assets of Techwell reflected on the Techwell Financial Statements as of
      September 30, 2007 shall equal at least thirty percent (30%) of the Aggregate
      Purchase Price.

     

    
      	 	
              8.02

            	
              Conditions
                to the Obligations of the
                Shareholders.

            

    

     

    The
      obligations of the Shareholders under this Agreement shall be subject to
      satisfaction, or written waiver by the Shareholders prior to the Closing, of
      each of the following conditions precedent:

     

    (a) All
      material authorizations, consents, waivers and approvals required on the part
      of
      Full Art in connection with the execution, delivery and performance of this
      Agreement shall have been duly obtained and shall be in form and substance
      reasonably satisfactory to the Shareholders and its counsel.

     

    (b) No
      legal action, investigation (whether antitrust or otherwise) or proceeding
      shall
      have been instituted by or threatened by any Person or Governmental Authority,
      in either case seeking to restrain, prohibit, invalidate or otherwise affect
      the
      consummation by Full Art or CAE of the transactions contemplated
      hereby.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    (c) The
      representations and warranties of Full Art and CAE set forth in this Agreement
      that are qualified with respect to materiality shall be true and correct as
      of
      the date of this Agreement and as of the Closing as though such representations
      and warranties were also made as of the Closing, except that those
      representations and warranties which by their terms speak as of a specific
      date
      shall be true and correct as of such date. The representations and warranties
      of
      Full Art and CAE set forth in this Agreement that are not qualified with respect
      to materiality shall be true and correct in all material respects as of the
      date
      of this Agreement and as of the Closing as though such representations and
      warranties were also made as of the Closing, except that those representations
      and warranties which by their terms speak as of a specific date shall be true
      and correct as of such date. The Shareholders shall have received a certificate,
      dated with the date of the Closing, signed on behalf of Full Art and CAE by
      its
      respective President and Chief Executive Officer, to such effect.

     

    (d) Full
      Art shall have performed in all material respects all of its covenants and
      obligations under this Agreement to be performed by it on or prior to the
      Closing, including those related to the Closing, and the Shareholders shall
      have
      received a certificate, dated with the date of the Closing, signed on behalf
      of
      Full Art by Full Art’s President and Chief Executive Officer to such
      effect.

     

    (e) The
      Transaction Documents shall have been duly executed and delivered by all parties
      hereto other than the Shareholders.

     

    ARTICLE
      NINE

    SURVIVAL
      AND INDEMNIFICATION

     

    
      	 	
              9.01

            	
              Survival
                of Representations, Warranties and Covenants. 

            

    

     

    Notwithstanding
      any investigation made on behalf of Full Art, CAE, or the Shareholders prior
      to
      or after the Closing Date, the representations and warranties of the
      Shareholders, Full Art and CAE set forth in this Agreement, or in any document
      delivered pursuant to the terms hereof or in connection with the transactions
      contemplated hereby, shall survive the date of the Closing but shall terminate
      on the date twenty-four (24) months following the Closing Date, provided,
      however
      that the
      representations and warranties contained in Sections 3.01(a), 3.01(b),
      3.01(c), 3.01(e), 3.01(n), 3.01(cc), 3.01(dd), 5.01(b), 6.01(c) and 6.01(e)
      shall have no expiration date and the representations and warranties contained
      in Sections 3.01(k), 3.01(r) and 3.01(t) shall survive for the applicable
      statute of limitations period. All covenants and other agreements shall survive
      the Closing in accordance with the respective applicable statute of
      limitations.

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    
      	 	
              9.02

            	
              Shareholders’
                Indemnification.

            

    

     

    (a) Subject
      to the terms and conditions of Sections 9.04 and 9.05, the Shareholders shall
      jointly and severally indemnify Full Art, CAE and its officers, directors,
      employees, Affiliates and agents and, upon and after the Closing, Techwell
      and
      Techwell Subsidiaries (collectively, “Full
      Art Indemnified Parties”)
      and
      hold each harmless from and against any and all losses, damages, actions,
      proceedings, causes of action, liabilities, claims, encumbrances, penalties,
      demands, assessments, settlements, judgments, costs and expenses including
      court
      costs and reasonable attorneys’ fees and disbursements (collectively,
“Losses”)
      incurred by Full Art Indemnified Parties in connection with, arising out of,
      or
      resulting from any of the following:

     

    (i) any
      breach or inaccuracy of any representation, warranty or statement made by any
      of
      the Shareholders in this Agreement or in any other Transaction Document to
      which
      he/she is a party; 

     

    (ii) any
      failure by any of the Shareholders to perform any agreement, covenant or
      obligation of any of the Shareholders pursuant to this Agreement or any
      Transaction Document to which he/she is a party;

     

    (iii) any
      and all (1) Taxes (or the nonpayment thereof) of Techwell or any Techwell
      Subsidiary for all taxable periods ending on or before the date of the Closing
      and the portion through the end of the date of the Closing for any taxable
      period that includes (but does not end on) the date of the Closing (the
“Pre-Closing Tax Period”), (2) all Taxes of any member of an unaffiliated,
      consolidated, combined or unitary group of which Techwell (or any predecessor
      of
      Techwell) is or was a member on or prior to the date of the Closing , including
      pursuant to Treasury Regulations Section 1.1502-6 or any analogous or similar
      state, local or foreign law or regulation, and (3) any and all Taxes of any
      Person (other than Techwell) imposed on Techwell as a transferee or successor,
      by contract or pursuant to any law, rule, or regulation, which Taxes relate
      to
      an event or transaction occurring before or at the Closing; provided,
however, that in the case of clauses (1), (2), and (3) above, the
      Shareholders shall be liable only to the extent that such Taxes exceed the
      amount, if any, reserved for such Taxes (excluding any reserve for deferred
      Taxes established to reflect timing differences between book and Tax income)
      as
      reflected on the face of the most recent balance sheet included in the Techwell
      Financial Statements; 

     

    (iv) any
      and
      all (1) Environmental Laws applicable or any environmental liability related
      in
      any way to Techwell or any Shareholder or any of their properties, including
      without limitation, the presence, generation, storage, release, threatened
      release, use, transport, disposal, arrangement of disposal or treatment of
      oil,
      oil and gas wastes, solid wastes or hazardous substances on any of their
      properties, (2) breach or non-compliance by either Techwell or any Shareholder
      with any Environmental Law applicable to Techwell or any Shareholder, and (3)
      actual or alleged presence, use, release, storage, treatment, disposal,
      generation, threatened release, transportation, arrangement for transport or
      arrangement for disposal of oil, oil and gas wastes, solid wastes or hazardous
      substances on or at any of the properties owned or operated by Techwell or
      any
      Shareholder; or

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    (v) any
      action,
      litigation, suit, proceeding, investigation (civil, criminal, regulatory or
      otherwise), arbitration, claim, demand, grievance or inquiry, including any
      assessment, notice, demand or other document issued or action taken by or on
      behalf of any Governmental Authority in any part of the world, that is pending
      or threatened against Techwell or any Techwell Subsidiary prior to or on the
      date of Closing.

     

    (b) Subject
      to the terms and conditions of Section 9.04 and without prejudice to the other
      provisions of this Section 9.02 or restricting the rights of Full Art
      Indemnified Parties or the ability of any of them to claim damages on any basis,
      in the event of any breach or inaccuracy of any representation, warranty or
      statement made by any of the Shareholders in this Agreement or in any other
      Transaction Document to which he/she is a party, each of the Shareholders hereby
      jointly and severally covenants to pay to Full Art:

     

    (i) the
      amount necessary to put Techwell and each of Techwell Subsidiaries into the
      position which would have existed if such representation, warranty or statement
      had not been breached and had been true and not misleading; and

     

    (ii) all
      costs
      and expenses incurred by Full Art, Techwell or any of the Techwell Subsidiaries,
      directly or indirectly, as a result of such breach.

     

    (c) Subject
      to the terms and conditions of Sections 9.04 and 9.05 and without prejudice
      to
      the other provisions of this Section 9.02 or any other rights that any Full
      Art
      Indemnified Parties may have against the Shareholders, if on the second
      (2nd)
      anniversary of the date of Closing, the actual amount of the Receivables
      collected by Techwell is less than the amount of the Receivables set forth
      in
      Section 3.01(dd) of the Techwell Disclosure Schedule, the Shareholders shall
      jointly and severally pay to Full Art an amount equal to the difference between
      the Receivables stated in Section 3.01(dd) of the Techwell Disclosure Schedule
      and the actual amount of the Receivables collected by Techwell.

     

    
      	
            	9.03	
              Full
                Art Indemnification; CAE
                Indemnification.

            

    

     

    (a)
      Full Art Indemnification. Subject to the terms and conditions of
      Section 9.04, Full Art shall indemnify the Shareholders, and their agents
      (“Shareholders’ Indemnified Parties”) and hold each harmless
      from and against any and all Losses, incurred by Shareholders’ Indemnified
      Parties in connection with, arising out of, or resulting from any of the
      following:

     

    (i) any
      breach or inaccuracy of any representation or warranty made by Full Art in
      this
      Agreement; or

     

    (ii) any
      failure by Full Art to perform any agreement, covenant or obligation of Full
      Art
      pursuant to this Agreement.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    (b) CAE
      Indemnification. Subject to the terms and conditions of Section 9.04, CAE
      shall indemnify the Shareholders’ Indemnified Parties and hold each harmless
      from and against any and all Losses, incurred by Shareholders’ Indemnified
      Parties in connection with, arising out of, or resulting from any of the
      following:

     

    (i) any
      breach or inaccuracy of any representation or warranty made by CAE in this
      Agreement; or

     

    (ii) any
      failure by CAE to perform any agreement, covenant or obligation of CAE pursuant
      to this Agreement.

     

    
      	 	
              9.04

            	
              Indemnification
                Process.

            

    

     

    (a) As
      promptly as is reasonably practicable after becoming aware of a claim for
      indemnification under this Agreement that does not involve a third party claim,
      Full Art shall give notice to the Shareholders of such claim or the Shareholders
      shall provide notice to Full Art or CAE (the “Claim Notice”),
      as the case may be, which Claim Notice shall, to the extent such information
      is
      reasonably available, specify the facts alleged to constitute the basis for
      such
      claim, the representations, warranties, covenants and obligations alleged to
      have been breached and the amount sought hereunder from the indemnifying
      persons. It is the intent of the parties that amounts paid under this Article
      Nine shall represent an adjustment to the Aggregate Purchase Price and the
      parties will report such payments consistent with such intent.

     

    (b) The
      party
      seeking indemnification shall give notice as promptly as is reasonably
      practicable, but in any event no later than fifteen (15) business days after
      receiving notice thereof, to the Shareholders, Full Art or CAE, as the case
      may
      be, of the assertion of any claim, or the commencement of any suit, action
      or
      proceeding, by any Person not a party hereto in respect of which indemnity
      may
      be sought under this Agreement (which notice shall, to the extent such
      information is reasonably available, specify in reasonable detail the nature
      and
      amount of such claim). After such notice, the indemnifying party shall have
      the
      right to assume the defense; provided,
      however,
      that
      such indemnified party shall have the right to participate at its own expense
      in
      the defense of such action; and provided,
      further,
      that
      the indemnifying party shall not consent to the entry of any judgment or enter
      into any settlement, except with the written consent of such indemnified party
      (which consent shall not be unreasonably withheld), that (a) fails to include
      as
      an unconditional term thereof the giving by the claimant or plaintiff to such
      indemnified party of a release from all liability in respect of any such action
      or (b) grants the claimant or plaintiff any injunctive relief against the
      indemnified party.  Any failure to give prompt notice under this Section
      9.04(b) shall not bar an indemnified party’s right to claim indemnification
      under this Article
      Nine,
      except
      to the extent that an indemnifying party shall have been harmed by such
      failure.

     

    (c) Within
      ten (10) business days or the receipt of a Claim Notice, the Shareholders,
      Full
      Art or CAE, as the case may be, shall deliver to the Escrow Agent and Full
      Art,
      CAE or the Shareholders, as the case may be, a notice (“Objection
      Notice”)
      stating they intend to contest the claim (a “Contest”)
      or to
      accept liability thereunder. 

     

    (i) If
      the
      Shareholders, Full Art or CAE, as the case may be, do not give an Objection
      Notice within that ten (10) business day period, the Shareholders, Full Art
      or
      CAE, as the case may be, will be deemed to accept liability as it relates to
      such claim. To the extent the Shareholders are deemed liable for any Losses
      hereunder, such liability shall be satisfied pursuant to Section 9.05.

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    (ii) If
      Full
      Art or CAE gives a timely Objection Notice, then within thirty (30) business
      days of the receipt thereof, the Shareholders and Full Art or CAE, as the case
      may be, shall select an independent arbitrator (the “Independent Arbitrator”).
      The
      Independent Arbitrator shall be selected by the mutual agreement of the
      Shareholders and Full Art or CAE, as the case may be. If the parties cannot
      agree on the identity of an Independent Arbitrator within ten (10) business
      days
      of the date of an Objection Notice, then the Independent Arbitrator will be
      determined by an arbitrator selected by the Shareholders and an arbitrator
      selected by Full Art or CAE, as the case may be. The decision of the Independent
      Arbitrator shall be borne as directed by him. The Shareholders and Full Art
      or
      CAE, as the case may be, shall be entitled to make such representation and
      provide such information and reports to the Independent Arbitrator within twenty
      (20) business days of the date of agreement or, if later, determination of
      the
      identity of the Independent Arbitrator. The Shareholders and Full Art or CAE,
      as
      the case may be, shall use their respective commercially reasonable efforts
      to
      procure that the Independent Arbitrator issues his/her ruling within thirty
      (30)
      business days after the matter is submitted to him/her for
      consideration.

     

    (iii) If
      the
      Shareholders give a timely Objection Notice, the Escrow Agent shall not take
      any
      further action with respect to the claim being Contested except as further
      provided in the Escrow Agreement.

     

    
      	 	
              9.05

            	
              Satisfaction
                of Shareholders’
Indemnification.

            

    

     

    Whenever
      the Shareholders are deemed liable for any Losses for which indemnification
      is
      provided pursuant to this Article
      Nine,
      the
      Shareholders shall have ten (10) business days from such time such liability
      is
      deemed accepted to pay or satisfy such liability pursuant to one of the
      following methods:

     

    (a) Shareholders
      may elect to pay by wire transfer of immediately available funds to Full Art;
      

     

    (b) Shareholders
      may deliver a notice (“Claim
      Payment Notice”)
      to
      Escrow Agent instructing such agent to deliver to Full Art a stock certificate
      representing such amount of CAE Common Shares from the Escrow Funds required
      to
      satisfy the claim set forth in the Claim Payment Notice where such shares are
      valued at the CAE Share Price; or

     

    (c) Shareholders
      may deliver a Claim Payment Notice instructing Escrow Agent to sell such amount
      of CAE Common Shares equal to an amount equal to 110% of the claim set forth
      in
      the Claim Payment Notice divided by the closing price of the CAE Common Shares
      as listed on the American Stock Exchange one (1) day immediately preceding
      the
      date of the Claim Payment Notice; provided,
      that
      Escrow Agent shall not sell such Common Stock until it shall have received
      an
      opinion from counsel to CAE and Full Art indicating that the proposed sale
      of
      such CAE Common Shares are not required to be registered under the 1933 Act,
      by
      reason of an exemption thereunder; provided,
      further,
      that to
      the extent the proceeds from such sale exceed the amount required to satisfy
      the
      claim set forth in the Claim Payment notice, such excess proceeds shall be
      delivered to Shareholders; provided,
      further,
      that to
      the extent the proceeds from such sale are not sufficient to satisfy the claim
      set forth in the Claim Payment Notice, Shareholders shall be required to satisfy
      the remainder of such claim by wire transfer of immediately available funds
      to
      Full Art.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    To
      the
      extent that the Shareholders fail to timely designate one of the methods set
      forth above, Full Art shall have sole discretion to designate one of the above
      methods for satisfaction of Shareholders’ liability hereunder.

     

    
      	 	
              9.06

            	
              Exclusive
                Remedy.

            

    

     

    Except
      (a) in the case of fraud or (b) for seeking specific performance or other form
      of equitable relief available at law or equity in connection with the
      enforcement of a covenant in this Agreement, the indemnification provided by
      this Article
      Nine
      shall be
      the sole and exclusive remedy for any Losses of the Full Art Indemnified
      Parties, on the one hand, or Shareholders’ Indemnified Parties, on the other,
      with respect to any misrepresentation or inaccuracy in, or breach of, any
      representations or warranties or any breach or failure in performance of, any
      covenants or agreements made by Full Art, CAE or any Shareholder under this
      Agreement or any other agreements delivered in conjunction with this Agreement.
      

     

    ARTICLE
      TEN

    TAX
      MATTERS

     

    
      	 	
              10.01

            	
              Responsibility
                for Filing Tax Returns.

            

    

     

    The
      Shareholders shall and shall cause Techwell to properly prepare and file all
      Tax
      Returns required on the part of Techwell at any time through the date of Closing
      in compliance with all applicable laws, rules and regulations. With respect
      to
      any Tax Return required of Techwell to be filed after the date of Closing
      covering any taxable period ending on or before the date of Closing or any
      taxable period that includes (but does not end on) the date of Closing, the
      Shareholders shall provide all assistance required by Full Art to enable it
      to
      prepare or cause to be prepared and file or cause to be filed all such Tax
      Returns for Techwell, including the provision of any books of account, records
      and other information with respect to any transactions and other matters
      occurring on or before Closing, in any case so to permit all such Tax Returns
      to
      be properly and accurately prepared and filed in compliance with all applicable
      laws, rules and regulations. Full Art shall permit the Shareholders to review
      and comment on each such Tax Return described in the preceding sentence prior
      to
      filing.

     

    
      	 	
              10.02

            	
              Certain
                Taxes and Fees.

            

    

     

    All
      transfer, including real property, documentary, sales, use, stamp, registration
      and other such Taxes, and all conveyance fees, recording charges and other
      fees
      and charges (including any penalties and interest) incurred in connection with
      consummation of the transactions contemplated by this Agreement shall be paid
      by
      the Shareholders when due, and the Shareholders will, at their own expense,
      file
      all necessary Tax Returns and other documentation with respect to all such
      Taxes, fees and charges, except that all Hong Kong stamp duty arising from
      the
      transfer of the Techwell Shares payable or assessed to be payable shall be
      borne
      as to one-half by the Shareholders jointly and severally and as to the other
      half by Full Art. 

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      ELEVEN

    MISCELLANEOUS

     

    
      	 	
              11.01

            	
              Notices.

            

    

     

    All
      notices, requests, demands and other communications required or permitted to
      be
      given under this Agreement shall be given in writing and shall be deemed to
      have
      been duly given (a) on the date of delivery if delivered by hand or by telecopy,
      in the case of telecopy upon confirmation of receipt, (b) on the date of
      delivery, if delivered by electronic mail, upon confirmation of receipt, or
      (c)
      on the first business day following the date of dispatch if delivered by a
      recognized next-day courier service. All notices thereunder shall be delivered
      to the following addresses:

     

    If
      to
      Shareholders, to:

     

    
      	 	 	
              
                Ng
                  Chi Sum

                HSE
                  A4, Ville de Jardin

                33-35
                  Sui Wo Road

                Shatin,
                  Hong Kong

              

              Email:
                geoffng@techwell-eng.com.hk

            

    

     

    and
      

    

    
      	 	 	
              Yam
                Mei Ling

              
                Flat
                  7, 11/F, Block F, Garden Vista

                15-17
                  on King Street

                Shatin,
                  Hong Kong

                
                  Email:
                    mariayam@techwell-eng.com.hk

                

              

            

    

     

    with
      a
      copy to:

     

    
      	 	 	
              Donald
                Yap, Cheng & Kong, Solicitors & Notaries

              Rooms
                2101-2, 21/F

              
                Far
                  East Consortium Building

                
                  121
                    Des Veoux Road Central

                  
                    Hong
                      Kong

                    Attn:
                      Anita S.W.
                      Luk

                  

                

              

            

    

    
    

     

    
      	 	 	
              If
                to Full Art, to:

            

    

    
      	 	 	
               

            

    

    
      	 	 	
              
                Full
                  Art International, Ltd.

                105
                  Baishi Road

                Jiuzhou
                  West Avenue

                Zhuhai
                  519070

                People’s
                  Republic of China

                0086-756-8538908

                Attn:
                  Luo Ken Yi

                Email:
                   luokeny@yahoo.com.cn
                  

              

            

    

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

       

    

    with
      a
      copy to:

    
       

      
        	 	 	
                
                  Kirkpatrick
                    & Lockhart Preston Gates Ellis LLP

                  10100
                    Santa Monica Blvd., 7th
                    Floor

                  Los
                    Angeles, CA 90067

                  Attention:
                    Thomas J. Poletti, Esq.

                  Facsimile:
                    (310) 552-5001

                  Email:
                    thomas.poletti@klgates.com

                

              

      

      
      

       

    

    Any
      party
      to this Agreement may, by notice given in accordance with this Section
11.01,
      designate a new address for notices, requests, demands and other communications
      to such party.

    

    
      	 	
              11.02

            	
              Counterparts.

            

    

    

    This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be a duplicate original, but all of which taken together shall be
      deemed to constitute a single instrument.

     

    
      	 	
              11.03

            	
              Entire
                Agreement; No Third-Party
                Rights.

            

    

     

    This
      Agreement and the Disclosure Schedules attached hereto constitute the entire
      agreement, and supersede all prior agreements and understandings, both written
      and oral, between the parties with respect to the subject matter of this
      Agreement. This Agreement is not intended to confer upon any person other than
      the parties hereto (and their respective successors and assigns) any rights
      or
      remedies.

     

    
      	 	
              11.04

            	
              Successors
                and Assigns.

            

    

     

    This
      Agreement shall inure to the benefit of and be binding upon the respective
      successors and permitted assigns (including successive, as well as immediate,
      successors and assigns) of the parties hereto. This Agreement may not be
      assigned by any party hereto without the prior written consent of the other
      parties.

     

    
      	 	
              11.05

            	
              Captions

            

    

     

    The
      captions contained in this Agreement are included only for convenience of
      reference and do not define, limit, explain or modify this Agreement or its
      interpretation, construction or meaning and are in no way to be construed as
      part of this Agreement.

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    
      	 	
              11.06

            	
              Governing
                Law.

            

    

     

    This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of Delaware without giving effect to principles of conflicts or choice
      of laws (except to the extent that mandatory provisions of Federal law are
      applicable).

     

    
      	 	
              11.07

            	
              Payment
                of Fees and Expenses.

            

    

     

    Except
      as
      otherwise provided in Section 10.02 or otherwise agreed in writing, each party
      hereto shall pay its own costs and expenses, including legal and accounting
      fees, incurred in connection with the preparation, negotiation and execution
      of
      the Transaction Documents and the consummation of the transactions contemplated
      hereby and all expenses relating to its performance of, and compliance with,
      its
      undertakings herein.

     

    
      	 	
              11.08

            	
              Amendment.

            

    

     

    From
      time
      to time and at any time prior to the Closing, this Agreement may be amended
      only
      by an agreement in writing executed by Full Art, CAE, and such Shareholders
      that
      constitute the holders of at least a majority in interest of the Techwell
      Shares.

     

    
      	 	
              11.09

            	
              WAIVER
                OF JURY TRIAL. 

            

    

     

    TO
      THE
      EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HEREBY
      WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
      OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
      CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER,
      RELATED TO, BASED ON OR IN CONNECTION WITH THIS AGREEMENT OR THE SUBJECT MATTER
      HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT
      OR CONTRACT OR OTHERWISE. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART
      OR A
      COPY OF THIS SECTION 14.09 WITH ANY COURT AS WRITTEN EVIDECNE OF THE CONSENT
      OF
      EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

     

    
      	 	
              11.10

            	
              Waiver.

            

    

     

    The
      rights and remedies of the parties to this Agreement are cumulative and not
      alternative. Neither the failure nor any delay by any party in exercising any
      right, power or privilege under this Agreement or the documents referred to
      in
      this Agreement will operate as a waiver of such right, power or privilege,
      and
      no single or partial exercise of any such right, power or privilege will
      preclude any other or further exercise of such right, power or privilege or
      the
      exercise of any other right, power or privilege.

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    
      	 	
              11.11

            	
              Severability.

            

    

     

    If
      any
      provision of this Agreement is held invalid or unenforceable by any court of
      competent jurisdiction, the other provisions of this Agreement will remain
      in
      full force and effect. Any provision of this Agreement held invalid or
      unenforceable only in part or degree will remain in full force and effect to
      the
      extent not held invalid or unenforceable.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, this Agreement has been duly executed and delivered on behalf
      of Full Art, CAE and the Shareholders as of the date set forth in the first
      paragraph above.

     

     

    
      	 	 	 
	 	FULL
              ART
              INTERNATIONAL, LTD.
	 
 	 
 	 
 
	 	By:  	/s/
              Luo
              Ken Yi 
	 	
              

              Name:
                Luo Ken Yi

              Title:
                Chairman

            
	 	 

    

     

    
      
        	 	 	 
	 	
                Solely
                  for purposes of Article Six and Article
                  Nine

                CHINA
                  ARCHITECTURAL ENGINEERING, INC.

              
	 
 	 
 	 
 
	 	By:  	/s/
                Luo
                Ken Yi 
	 	
                

                Name:
                  Luo Ken Yi

                Title:
                  Chief
                  Executive Officer

              
	 	 

         

        
          
            	 	 	 
	 	
                    SHAREHOLDERS:
                      

                  
	 	 
	 	/s/ Ng Chi Sum 
	 	
                    
Printed
                    Name: Ng Chi Sum
	 	 
	 	 	 

             

            
              
                	 	 	 
	 	/s/ Yam Mei Ling 
	 	
                        
Printed
                        Name: Yam Mei Ling
	 	 
	 	 	 

              
                
                  
                  

                

                
                  52

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

      

    

     

    

    EXHIBIT
      A

    

    TECHWELL
      DISCLOSURE SCHEDULE

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Techwell
      Disclosure Schedule

    Section
      3.01(b)

    Capitalization
      of Techwell and Ownership of Techwell Shares

    

    
      	
              Techwell
                Shares

            	
               Issued
                and Outstanding

            
	
              Ordinary
                Shares, HK$1.00 par value

            	
              3,500,000

            

    

    
 

    
      	
              Name

            	
              Address

            	
              Number
                of Shares Beneficially Owned

            
	
              Ng
                Chi Sum

            	
              Hse
                A4, Ville de Jardin, 33 - 35 Sui Wo Road, Shatin, Hong
                Kong.

            	
              3,325,000

            
	
              Yam
                Mei Ling

            	
              Flat
                7, 11/F., Block F, Garden Vista, 15-17 On King Street, Shatin, Hong
                Kong

            	
              175,000

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(d)

    Subsidiaries

    

    Techwell
      Building Systems (Shenzhen) Ltd.:
      

    1/F.,
      B1
      Factory Building, Zone 5, Hung Hua Ling Industrial Zone, Xi Li Lu, Nanshan,
      Shenzhen, China

    

    Techwell
      International Ltd.:
      

    Ave.
      Horta Costa, No. 15, 1/F., “A”, Macau)

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(h)

    Liabilities

    

    

    

    No
      liabilities or obligations except as set forth in the Techwell Financial
      Statements.

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(i)

    Changes
      to Business

    

    

    

    No
      Change.

     

    
      
        
        

      

      
        -
          4
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(m)

    Real
      Property

     

    

    

    No
      interest in Real Property, except leases for office spaces in Hong Kong, Macau
      and PRC for the purpose of business operation.

    

    
      
        	1.	
                Techwell
                  Engineering Ltd.

                17/F., Centre 600, 82 King Lam
                  Street, Cheung
                  Sha Wan, Kowloon, Hong Kong

              

      

    

     

    
      	2.	
              Techwell
                Building Systems (Shenzhen) Ltd.

              1/F., B1 Factory Building, Zone
                5, Hung Hua
                Ling Industrial Zone, Xi Li Lu, Nanshan, Shenzhen,
                China

            

    

     

    
      
        	2.	
                Techwell
                  International Ltd.

                
                  (Site
                    Office)

                  Flat
                    C, 30/F., Block 21, Rua De Seng Tou, No. 297-559, Nova Taipa,
                    Taipa,
                    Macau

                

              

      

    

    
    

    
      
        
        

      

      
        -
          5
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(n)

    Legal
      Proceedings

    

    

    

    

    Techwell
      Engineering Ltd. had commenced a civil proceedings against Wishing Star Ltd.
      in
      the Court of First Instance in the Hong Kong SAR under Action No. HCA2604 of
      2004. In the action, Techwell claimed against Wishing Star Ltd. for the
      outstanding sum of HK$1,852,624.84 being the outstanding costs for work done
      and
      material supplied for services provided by Techwell to Wishing Star. The stage
      of discovery has been completed and after the exchange of witness statements,
      the case shall be ready be set down for Trial.

     

    
      
        
        

      

      
        -
          6
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(q)

    Employment
      Agreements

     

     

    

    Techwell
      is not a party to any employment, change in control, severance, consulting,
      and
      the like as identified in the SPA.

     

    
      
        
        

      

      
        -
          7
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(r)

    Storage
      Tanks and Facilities

    

    

    

    Not
      used
      / applicable.

     

    
      
        
        

      

      
        -
          8
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(r)(i)

    Employee
      Benefit Plans

    

    All
      Employee Benefit Plans are maintained in accordance with applicable laws by
      the
      respective body of The Government of Hong Kong SAR:

    

    
      
        	1.	
                The
                  Mandatory Provident Fund Schemes
                  Authority;

              

      

    

    
      
        	
                2.

              	
                The
                  Employment Compensation Scheme, Labour
                  Department;

              

      

    

    
      
        	
                3.

              	
                The
                  Labour Ordinance, Labour
                  Department.

              

      

    

    

    
      
        
        

      

      
        -
          9
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(s)

    Compliance
      with Laws

    

    Techwell
      operates in compliance with all laws, regulations, ordinances and rules
      applicable to offices of operations.

    

    Techwell
      has in place and maintained all Statutory Plans in full compliance with the
      Legal Requirements and Governmental Requirements applicable to Techwell, its
      business and its operations.

     

    
      
        
        

      

      
        -
          10
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(t)

    Environmental
      Matters

    

    Techwell
      operates in compliance with all regulations, ordinances and rules applicable
      to
      offices of operations.

     

    
      
        
        

      

      
        -
          11
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(u)

    Insurance

    

    Techwell
      Engineering Ltd. has been taking the following forms of insurance for the past
      five (5) years:

    

    
      
        	1.	
                Employees’
                  Compensation Insurance
                  Policy;

              

      

    

    
      
        	
                2.

              	
                Public
                  Liability;

              

      

    

    
      
        	
                3.

              	
                Property
                  All Risks.

              

      

    

     

    
      
        
        

      

      
        -
          12
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(v)

    Governmental
      and Third-Party Proceedings

    

    All
      as
      listed in Section 3.01(h) - Liabilities.

    

    
      
        
        

      

      
        -
          13
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(w)

    Contracts

    

    All
      contracts have been performed completely.

     

    
      
        
        

      

      
        -
          14
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(y)

    Intellectual
      Property

    

    Techwell
      Engineering Ltd. registers the following trademarks in Hong Kong and PRC
      respectively:

    

    Hong
      Kong

     

    
      	Class	: 	6

      	
              Particulars

            	
              :

            	
              corrugated,
                trapezoidal, textured metal sheets; custom fabricated panels for
                buildings; roof and wall cladding; all made of metal; all inclusive
                in
                Class 6.

            

    

     

    
      
        
          	
                	1.	
                  Welltech

                

        

      

      
        
          	
                	
                  2.

                	
                  Weltec

                

        

      

      
        
          	
                	
                  3.

                	
                  Bolzen
                    Fassade 

                

        

      

       

    

    China

     

    
      
        	Class	: 	6

        	
                Particulars

              	
                :

              	
                corrugated,
                  trapezoidal, textured metal sheets; custom fabricated panels for
                  buildings; roof and wall cladding.

              

      

       

    

    
      
        	
              	
                ☆

              	
                波紋ø瓦ἲ÷梯形构濠的港ᙂ穼板ô按客ઌ癿求定制的大樓、屋柾和牆壁発笵層用港屬嵌板☆

              

      

    

    

    
      
        	
              	1.	
                Weltec

              

      

    

    
      	
            	2.	
              Bolzen
                Fassade 

            

    

     

    
      
        
        

      

      
        -
          15
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(z)

    Affiliate
      Transactions

    

    None.

     

    
      
        
        

      

      
        -
          16
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(dd)

    Accounts
      Receivables

    

    All
      as
      disclosed in the Techwell Financial Statements.

     

    
      
        
        

      

      
        -
          17
          -

        
          

        

      

      
        
        

      

    

     

    Techwell
      Disclosure Schedule

    Section
      3.01(ee)

    PRC
      Entities

    

    Wholly
      owned subsidiary:

    

    Techwell
      Building Systems (Shenzhen) Ltd.

    1/F.,
      B1
      Factory Building, Zone 5, Hung Hua Ling Industrial Zone, Xi Li Lu, Nanshan,
      Shenzhen, China

    

    
      
        
        

      

      
        -
          18
          -

        
          

        

      

      
        
        

      

    

    

      EXHIBIT
        B

      

      ESCROW
        AGREEMENT

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      MELLON
        BANK, N.A.

      

      STANDARD
        FORM

      ESCROW
        AGREEMENT 

      

      This
        Escrow Agreement, dated as of November 6, 2007, is by and among Full Art
        International, Ltd., a Hong Kong corporation having its principal place of
        business at 105 Baishi Road, Jiuzhou West Avenue, Zhuhai 519070, PRC
        (“Full
        Art”),
        Ng
        Chi Sum, holder of Hong Kong Identity Card No. D289522(7) and Yam Mei Ling,
        holder of Hong Kong Identity Card No. G265499(6) (each a “Shareholder”
and
        collectively, the “Shareholders”)
        (collectively, the “Escrow
        Parties”),
        and
        Mellon Bank, N.A. , a national banking association with its principal place
        of
        business at One Mellon Center, Pittsburgh, PA 15258 (the “Escrow
        Agent”).

      

      WHEREAS,
        Full Art, the Shareholders and China Architectural Engineering, Inc., a Delaware
        corporation and sole shareholder of Full Art (“CAE”),
        have
        entered into that certain Stock Purchase Agreement dated as of November 6,
        2007
        (the “Purchase
        Agreement”),
        pursuant to which Full Art shall purchase all of the outstanding capital
        stock
        of Techwell Engineering Limited from the Shareholders;

      

      WHEREAS,
        pursuant to Section 2.03(a) of the Purchase Agreement, Full Art has agreed
        to
        transfer to the Shareholders aggregate consideration of Eleven Million Six
        Hundred Fifty-Four Thousand Five Hundred Sixty-Six and 0/100 U.S. Dollars
        ($11,654,566.00) (the “Purchase
        Price”),
        to be
        paid in the form of cash and issuance of shares of CAE’s common stock, $0.001
        par value (“Common
        Stock”)
        under
        certain circumstances as set forth herein; and

      

      WHEREAS,
        pursuant to Section 2.03(c) of the Purchase Agreement, Full Art and the
        Shareholders have agreed to enter into this Escrow Agreement and deposit
        a
        portion of the Purchase Price with the Escrow Agent in the form of shares
        of
        Common Stock, such funds and shares to be released further to the terms set
        forth herein.

      

      NOW,
        THEREFORE, in consideration of the premises and agreements of the parties
        contained in this Agreement, and for other good and valuable consideration,
        the
        receipt and sufficiency of which are acknowledged, the parties agree as
        follows:

      

      1.
         Appointment
        of Agent.
        The
        Escrow Parties appoint the Escrow Agent as their agent to hold in escrow,
        and to
        administer the disposition of, the Escrow Fund (as defined below) in accordance
        with the terms of this Agreement, and the Escrow Agent accepts such
        appointment.

      

      2.
         Establishment
        of Escrow. 

      

      (a)
         Escrow
        Shares. As
        soon
        as reasonably practicable and in any event within fifteen (15) business days
        from the date hereof, pursuant to the Purchase Agreement Full Art shall deliver
        to the Escrow Agent stock certificates representing Two Hundred Eleven Thousand
        One Hundred Thirty-Four (211,134) shares of CAE’s Common Stock registered in the
        name of the Shareholders, together with stock powers executed in blank by
        each
        Shareholder, as applicable, and, upon receipt thereof, the Escrow Agent shall
        acknowledge such receipt in writing. Such shares, together with any securities
        distributed in respect thereof or in exchange therefor, are referred to herein
        as “Escrow
        Shares.” The
        Escrow Shares will be held and disbursed by the Escrow Agent in accordance
        with
        the terms hereof. The Escrow Shares together with any cash or other property
        distributed in respect thereof and less any amounts paid or distributed from
        time to time in accordance with the terms of this Agreement, are referred
        to
        herein as the “Escrow
        Fund.” 

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      (b)
         Distributions,
        Etc. Any
        securities distributed in respect of or in exchange for any of the Escrow
        Shares, whether by way of distribution, other reorganizations, or otherwise,
        shall be issued in the name of the Shareholders, and shall be delivered to
        the
        Escrow Agent, who shall hold such securities in escrow. Such securities shall
        be
        considered Escrow Shares for purposes hereof. Any cash dividends or property
        (other than securities) distributed in respect of the Escrow Shares that
        are
        received by the Escrow Agent shall be held by the Escrow Agent as part of
        the
        Escrow Fund. Subject to the foregoing, the Escrow Agent shall, upon written
        instruction from Full Art (a copy of which shall also be delivered to
        Shareholders), deliver any certificate representing the Escrow Shares to
        any
        payment agent or exchange agent if required in connection with a sale, merger,
        combination or similar reorganization involving CAE.

      

      (c)
         Cash
        Deposits. The
        Escrow Agent shall deposit any cash received in connection with the Escrow
        Fund
        in one or more deposit accounts at Mellon Bank, N.A. in accordance with such
        written instructions and directions as may from time to time be provided
        to the
        Escrow Agent by the Shareholders. In the event that the Escrow Agent does
        not
        receive written instructions, the Escrow Agent shall deposit the Escrow Fund
        in
        deposit accounts at Mellon Bank, N.A. Deposits shall in all instances be
        subject
        to the Escrow Agent’s standard funds availability policy. The Escrow Agent shall
        not be responsible for any loss due to interest rate fluctuation or early
        withdrawal penalty. The Escrow Parties understand that deposits of the Escrow
        Fund are not necessarily insured by the United States Government or any agency
        or instrumentality thereof, or of any state or municipality, and that such
        deposits do not necessarily earn a fixed rate of return. In no instance shall
        the Escrow Agent have any obligation to provide investment advice of any
        kind.
        The Escrow Agent shall not be liable or responsible for any loss resulting
        from
        any deposits made pursuant to this Section 4,
        other
        than as a result of the gross negligence or willful misconduct of the Escrow
        Agent. 

      

      (d) Voting
        of Interests. The
        Shareholders shall have the right, in each Shareholder’s sole discretion, to
        exercise any and all voting rights with respect to the Escrow Shares. The
        Escrow
        Agent shall not vote the Escrow Shares or take any other action with respect
        thereto unless each Shareholder has given the Escrow Agent written instructions
        in that regard.

      

      (e) Transferability
        of Escrow Shares. For
        the
        period during which the Escrow Shares are held by the Escrow Agent in accordance
        with this Agreement, the Shareholders’ interest in such Escrow Shares shall not
        be assignable or transferable.

      

      3.  Customer
        Identification and TIN Certification.
        To help
        the government fight the funding of terrorism and money laundering activities,
        Federal laws requires all financial institutions to obtain, verify and record
        information that identifies each individual or entity that opens an account.
        Therefore, the Escrow Agent must obtain the name, address, taxpayer or other
        government identification number, and other information, such as date of
        birth
        for individuals, for each individual and business entity that is a party
        to this
        Agreement. For individuals signing this Agreement on their own behalf or
        on
        behalf of another, the Escrow Agent requires a copy of a driver’s license,
        passport or other form of photo identification. For business and other entities
        that are parties to this Agreement, the Escrow Agent will require such documents
        as it deems necessary to confirm the legal existence of the entity.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      At
        the
        time of or prior to execution of this Agreement, any Escrow Party providing
        a
        tax identification number for tax reporting purposes shall provide to the
        Escrow
        Agent a completed IRS Form W-9, and every individual executing this Agreement
        on
        behalf of an Escrow Party shall provide to the Escrow Agent a copy of a driver’s
        license, passport or other form of photo identification acceptable to the
        Escrow
        Agent. The Escrow Parties agree to provide to the Escrow Agent such
        organizational documents and documents establishing the authority of any
        individual acting in a representative capacity as the Escrow Agent may require
        in order to comply with its established practices, procedures and policies.
        

      

      Sub-accounts:
        For
        purposes of (i) allocating pro
        rata
        among
the
        Shareholders (the “Information Reporting Parties”),
        in
        accordance with their percentage interests as set forth on Schedule
        A
        to this
        Agreement, interest and other income earned with respect to the Initial Deposit
        and (ii) IRS information reporting, the Escrow Agent may deposit the Initial
        Deposit in two or more sub-accounts associated with a non-interest bearing
        master account (the “Master Account”) provided that any distributions shall be
        made pro
        rata
        from the
        sub-accounts unless otherwise specified. The Escrow
        Agent is authorized and directed to report all interest and other income
        earned
        on the Escrow Fund in accordance with the IRS Forms W-9 provided to the Escrow
        Agent by the Information Reporting Parties,
        pro
        rata
        based on
        their respective percentage interests. In
        the
        event that any Information Reporting Party fails to provide to the Escrow
        Agent
        a completed IRS Form W-9, such Information Reporting Party’s share of the
        Initial Deposit shall be held by the Escrow Agent in the Master Account until
        said Form W-9 is provided to the Escrow Agent.
        The
        Escrow Agent is authorized and directed to assign the tax identification
        number
        certified by the Shareholders to the Master Account. 

      

      4.
         Deposit
        of the Escrow Fund.
        The
        Escrow Agent shall deposit the Escrow Fund in one or more deposit accounts
        at
        Mellon Bank, N.A. in accordance with such written instructions and directions
        as
        may from time to time be provided to the Escrow Agent by the Shareholders.
        In
        the event that the Escrow Agent does not receive written instructions, the
        Escrow Agent shall deposit the Escrow Fund in deposit accounts at Mellon
        Bank,
        N.A. Deposits shall in all instances be subject to the Escrow Agent’s standard
        funds availability policy. The Escrow Agent shall not be responsible for
        any
        loss due to interest rate fluctuation or early withdrawal penalty. The Escrow
        Parties understand that deposits of the Escrow Fund are not necessarily insured
        by the United States Government or any agency or instrumentality thereof,
        or of
        any state or municipality, and that such deposits do not necessarily earn
        a
        fixed rate of return. In no instance shall the Escrow Agent have any obligation
        to provide investment advice of any kind. The Escrow Agent shall not be liable
        or responsible for any loss resulting from any deposits made pursuant to
        Section
4,
        other
        than as a result of the gross negligence or willful misconduct of the Escrow
        Agent. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      5.
         Release
        of the Escrow Fund.
        The
        Escrow Fund is intended to provide a source of funds for the payment of any
        amounts which may become payable to Full Art pursuant to Article 9 of the
        Purchase Agreement. The Escrow Fund shall only be distributed and released
        as
        follows:

      

      (a)  If
        Full
        Art makes a claim for indemnification pursuant to Article 9 of the Purchase
        Agreement (the “Claim”),
        Full
        Art shall deliver to the Escrow Agent and Shareholders a written notice (a
        “Claim
        Notice”)
        specifying the facts alleged to constitute the basis for such claim, the
        representations, warranties, covenants and obligations alleged to have been
        breached and the amount sought hereunder from the indemnifying persons.

      

      (b) Within
        ten (10) business days or the receipt of a Claim Notice, the Shareholders
        shall
        deliver to the Escrow Agent and Full Art a notice (“Objection
        Notice”)
        stating they intend to contest the claim (a “Contest”)
        or to
        accept liability thereunder. 

       

      (i) If
        the
        Shareholders do not give an Objection Notice within the ten (10) business
        day
        period, the Shareholders will be deemed to accept liability as it relates
        to
        such claim. To the extent the Shareholders are deemed liable for any Claims
        hereunder, such liability shall be satisfied pursuant to Section 5(c) hereof.
        

       

      (ii) If
        the
        Shareholders give a timely Objection Notice, the Escrow Agent shall not take
        any
        further action with respect to the claim being Contested except as further
        provided herein. Within thirty (30) business days of the receipt thereof,
        the
        Shareholders and Full Art shall select an independent arbitrator (the
“Independent
        Arbitrator”).
        The
        Independent Arbitrator shall be selected by the mutual agreement of the
        Shareholders and Full Art. If the parties cannot agree on the identity of
        an
        Independent Arbitrator within ten (10) business days of the date of an Objection
        Notice, then the Independent Arbitrator will be determined by an arbitrator
        selected by the Shareholders and an arbitrator selected by Full Art. The
        decision of the Independent Arbitrator shall be borne as directed by him.
        The
        Shareholders and Full Art shall be entitled to make such representation and
        provide such information and reports to the Independent Arbitrator within
        twenty
        (20) business days of the date of agreement or, if later, determination of
        the
        identity of the Independent Arbitrator. The Shareholders and Full Art shall
        use
        their respective commercially reasonable efforts to procure that the Independent
        Arbitrator issues his/her ruling within thirty (30) business days after the
        matter is submitted to him/her for consideration. 

       

      (c) Whenever
        the Shareholders are deemed liable for any Claims, the Shareholders shall
        have
        ten (10) business days from such time such liability is deemed accepted to
        pay
        or satisfy such liability pursuant to one of the following methods:

       

      (i)Shareholders
        may elect to pay by wire transfer of immediately available funds to Full
        Art;

       

      (ii) Shareholders
        may deliver a notice (“Claim
        Payment Notice”)
        to
        Escrow Agent instructing such agent to deliver to Full Art a stock certificate
        representing such amount of Common Stock from the Escrow Funds required to
        satisfy the claim set forth in the Claim Payment Notice where such shares
        are
        valued at the CAE Share Price (as defined in the Purchase Agreement);
        or

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (ii) Shareholders
        may deliver a Claim Payment Notice instructing Escrow Agent to sell such
        amount
        of Common Stock equal to an amount equal to 110% of the claim set forth in
        the
        Claim Payment Notice divided by the closing price of the Common Stock as
        listed
        on the American Stock Exchange one (1) day immediately preceding the date
        of the
        Claim Payment Notice; provided,
        that
        Escrow Agent shall not sell such Common Stock until it shall have received
        an
        opinion from counsel to CAE and Full Art indicating that the proposed sale
        of
        such shares of Common Stock are not required to be registered under the
        Securities Act of 1933, as amended, by reason of an exemption thereunder;
        provided,
        further,
        that to
        the extent the proceeds from such sale exceed the amount required to satisfy
        the
        claim set forth in the Claim Payment notice, such excess proceeds shall be
        delivered to Shareholders; provided,
        further,
        that to
        the extent the proceeds from such sale are not sufficient to satisfy the
        claim
        set forth in the Claim Payment Notice, Shareholders shall be required to
        satisfy
        the remainder of such claim by wire transfer of immediately available funds
        to
        Full Art.

       

      To
        the
        extent that the Shareholders fail to timely designate one of the methods
        set
        forth above, Full Art shall have sole discretion to designate one of the
        above
        methods for satisfaction of Shareholders’ liability hereunder.

      

      (d)  Notwithstanding
        anything to the contrary in this Agreement, if the Escrow Agent receives
        written
        instructions from all of the Escrow Parties, or their respective successors
        or
        assigns, substantially in the form of Exhibit
        A,
        as to
        the disbursement of the Escrow Fund (“Joint Written
        Instructions”),
        the
        Escrow Agent shall disburse the Escrow Fund pursuant to such Joint Written
        Instruction. The Escrow Agent shall have no obligation to follow any directions
        set forth in any Joint Written Instructions unless and until the Escrow Agent
        is
        satisfied, in its sole discretion, that the persons executing said Joint
        Written
        Instructions are authorized to do so.

      

      (e)  Notwithstanding
        anything to the contrary in this Agreement, if any amount to be released
        at any
        time or under any circumstances exceeds the balance in the Escrow Fund, the
        Escrow Agent shall release the balance in the Escrow Fund and shall have
        no
        liability or responsibility to the Escrow Parties for any
        deficiency.

      

      (f)  On
        the
        second (2nd)
        anniversary of the date of this Agreement, the Escrow Fund shall terminate
        with
        respect to all remaining Escrow Shares, if any, and all such remaining Escrow
        Shares, if any, shall be delivered to CAE as directed by the Shareholders
        and
        Full Art pursuant to Joint Written Instructions.

      

      6. Methods
        of Payment. 

      

      (a) All
        payments of cash required to be made by the Escrow Agent under this Agreement
        shall be made by wire transfer or by cashier’s check, as elected by the party
        receiving the funds. Any wire transfers shall be made subject to, and in
        accordance with, the Escrow Agent’s normal funds transfer procedures in effect
        from time to time. The Escrow Agent shall be entitled to rely upon all bank
        and
        account information provided to the Escrow Agent by any of the Escrow Parties.
        The Escrow Agent shall have no duty to verify or otherwise confirm any written
        wire transfer instructions but it may do so in its discretion on any occasion
        without incurring any liability to any of the Escrow Parties for failing
        to do
        so on any other occasion. The Escrow Agent shall process all wire transfers
        based on bank identification and account numbers rather than the names of
        the
        intended recipient of the funds, even if such numbers pertain to a recipient
        other than the recipient identified in the payment instructions. The Escrow
        Agent shall have no duty to detect any such inconsistencies and shall resolve
        any such inconsistencies by using the account number. 

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      
 

      (b) All
        distributions of Common Stock required to be made by the Escrow Agent under
        this
        Agreement shall be distributed by certified mail or next-day courier service,
        as
        elected by the party receiving such distribution.

      

      7. Responsibilities
        and Liability of Escrow Agent.

      

      (a)  Duties
        Limited.
        The
        Escrow Agent undertakes to perform only such duties as are expressly set
        forth
        in this Agreement. The Escrow Agent's duties shall be determined only with
        reference to this Agreement and applicable laws and it shall have no implied
        duties. The Escrow Agent shall not be bound by, deemed to have knowledge
        of, or
        have any obligation to make inquiry into or consider, any term or provision
        of
        any agreement between any of the Escrow Parties and/or any other third party
        or
        as to which the escrow relationship created by this Agreement relates, including
        without limitation any documents referenced in this Agreement. 

      

      (b)
         Limitations
        on Liability
        of Escrow Agent.
        Except
        in cases of the Escrow Agent's bad faith, willful misconduct or gross
        negligence, the Escrow Agent shall be fully protected (i) in acting in reliance
        upon any certificate, statement, request, notice, advice, instruction,
        direction, other agreement or instrument or signature reasonably and in good
        faith believed by the Escrow Agent to be genuine, (ii) in assuming that any
        person purporting to give the Escrow Agent any of the foregoing in connection
        with either this Agreement or the Escrow Agent's duties, has been duly
        authorized to do so, and (iii) in acting or failing to act in good faith
        on the
        advice of any counsel retained by the Escrow Agent. The Escrow Agent shall
        not
        be liable for any mistake of fact or law or any error of judgment, or for
        any
        act or omission, except as a result of its bad faith, willful misconduct
        or
        gross negligence. The Escrow Agent shall not be responsible for any loss
        incurred upon any action taken under circumstances not constituting bad faith,
        willful misconduct or gross negligence. 

      

      In
        connection with any payments that the Escrow Agent is instructed to make
        by wire
        transfer, the Escrow Agent shall not be liable for the acts or omissions
        of (a)
        any Escrow Party or other person providing such instructions, including without
        limitation errors as to the amount, bank information or bank account number;
        or
        (b) any other person or entity, including without limitation any Federal
        Reserve
        Bank, any transmission or communications facility, any funds transfer system,
        any receiver or receiving depository financial institution, and no such person
        or entity shall be deemed to be an agent of the Escrow Agent. 

      

      Without
        limiting the generality of the foregoing, it is agreed that in no event will
        the
        Escrow Agent be liable for any lost profits or other indirect, special,
        incidental or consequential damages which the parties may incur or experience
        by
        reason of having entered into or relied on this Agreement or arising out
        of or
        in connection with the Escrow Agent's services, even if the Escrow Agent
        was
        advised or otherwise made aware of the possibility of such damages; nor shall
        the Escrow Agent be liable for acts of God, acts of war, breakdowns or
        malfunctions of machines or computers, interruptions or malfunctions of
        communications or power supplies, labor difficulties, actions of public
        authorities, or any other similar cause or catastrophe beyond the Escrow
        Agent's
        reasonable control.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      In
        the
        event that the Escrow Agent shall be uncertain as to its duties or rights
        under
        this Agreement, or shall receive any certificate, statement, request, notice,
        advice, instruction, direction or other agreement or instrument from any
        other
        party with respect to the Escrow Funds which, in the Escrow Agent's reasonable
        and good faith opinion, is in conflict with any of the provisions of this
        Agreement, or shall be advised that a dispute has arisen with respect to
        the
        Escrow Fund or any part thereof, the Escrow Agent shall be entitled, without
        liability to any person, to refrain from taking any action other than to
        keep
        safely the Escrow Fund until the Escrow Agent shall be directed otherwise
        in
        accordance with Joint Written Instructions or an order of a court with
        jurisdiction over the Escrow Agent. The Escrow Agent shall be under no duty
        to
        institute or defend any legal proceedings, although the Escrow Agent may,
        in its
        discretion and at the expense of the Escrow Parties as provided in subsections
        (c) or (d) immediately below, institute or defend such proceedings.

      

      (c)
         Indemnification
        of Escrow Agent.
        The
        Escrow Parties jointly and severally agree to indemnify the Escrow Agent
        for,
        and to hold it harmless against, any and all claims, suits, actions,
        proceedings, investigations, judgments, deficiencies, damages, settlements,
        liabilities and expenses (including reasonable legal fees and expenses of
        attorneys chosen by the Escrow Agent) as and when incurred, arising out of
        or
        based upon any act, omission, alleged act or alleged omission by the Escrow
        Agent or any other cause, in any case in connection with the acceptance of,
        or
        performance or non-performance by the Escrow Agent of, any of the Escrow
        Agent's
        duties under this Agreement, except as a result of the Escrow Agent's bad
        faith,
        willful misconduct or gross negligence. 

      

      (d)
         Authority
        to Interplead.
        The
        Escrow Parties authorize the Escrow Agent, if the Escrow Agent is threatened
        with litigation or is sued, to interplead all interested parties in any court
        of
        competent jurisdiction and to deposit the Escrow Fund with the clerk of that
        court. In the event of any dispute, the Escrow Agent shall be entitled to
        petition a court of competent jurisdiction and shall perform any acts ordered
        by
        such court.

      

      8.
         Termination.
        This
        Agreement and all the obligations of the Escrow Agent shall terminate upon
        the
        earliest to occur of the release of the entire Escrow Fund by the Escrow
        Agent
        in accordance with this Agreement or the deposit of the Escrow Fund by the
        Escrow Agent in accordance with Section 7(d) hereof.

      

      9.
         Removal
        of Escrow Agent.
        The
        Escrow Parties acting together shall have the right to terminate the appointment
        of the Escrow Agent, specifying the date upon which such termination shall
        take
        effect. Thereafter, the Escrow Agent shall have no further obligation to
        the
        Escrow Parties except to hold the Escrow Fund as depository and not otherwise.
        The Escrow Parties agree that they will jointly appoint a banking corporation,
        trust company or attorney as successor escrow agent. Escrow Agent shall refrain
        from taking any action until it shall receive joint written instructions
        from
        the Escrow Parties designating the successor escrow agent. Escrow Agent shall
        deliver all of the Escrow Fund to such successor escrow agent in accordance
        with
        such instructions and upon receipt of the Escrow Fund, the successor escrow
        agent shall be bound by all of the provisions of this Agreement.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
10.
         Resignation
        of Escrow Agent.
        The
        Escrow Agent may resign and be discharged from its duties and obligations
        hereunder at any time by giving no less than ten (10) days' prior written
        notice
        of such resignation to the Escrow Parties, specifying the date when such
        resignation will take effect. Thereafter, the Escrow Agent shall have no
        further
        obligation to the Escrow Parties except to hold the Escrow Fund as depository
        and not otherwise. In the event of such resignation, the Escrow Parties agree
        that they will jointly appoint a banking corporation, trust company, or attorney
        as successor escrow agent within ten (10) days of notice of such resignation.
        Escrow Agent shall refrain from taking any action until it shall receive
        joint
        written instructions from the Escrow Parties designating the successor escrow
        agent. Escrow Agent shall deliver all of the Escrow Fund to such successor
        escrow agent in accordance with such instructions and upon receipt of the
        Escrow
        Fund, the successor escrow agent shall be bound by all of the provisions
        of this
        Agreement.

      

      11.
         Accounting.
        On a
        monthly basis, the Escrow Agent shall render a written statement setting
        forth
        the balance of the Escrow Fund, all interest earned and all distributions
        made,
        which statements shall be delivered to the following address(es):

      

      To
        Shareholders:

      

      Ng
        Chi
        Sum

      Hse
        A4,
        Ville de Jardin

      33-35
        Sui
        Wo Road

      Shatin, Hong
        Kong

      

      and

      

      Yam
        Mei
        Ling

      Flat
        7,
        11/F., Block F

      Garden
        Vista

      15-17
        King Street, 

      N.
        T.,
        Hong Kong

      

      To
        Full
        Art:

      

      Full
        Art
        International, Ltd.

      105
        Baishi Road

      Jiuzhou
        West Avenue

      Zhuhai
        519070

      People’s
        Republic of China

      0086-756-8538908

      Attn:
        Luo
        Ken Yi

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      12.
         Survival.
        Notwithstanding anything in this Agreement to the contrary, the provisions
        of
        Section 7 shall survive any resignation or removal of the Escrow Agent, and
        any
        termination of this Agreement.

      

      13.
          Escrow
        Agent Fees, Costs, and Expenses.
        The
        Escrow Agent shall charge an annual administrative fee of Two Thousand Five
        Hundred Dollars ($2,500), and shall be entitled to be reimbursed for its
        customary fees and charges for any wire transfers or other depository services
        rendered in connection with the Escrow Fund and any delivery charges or other
        out of pocket expenses incurred in connection the Escrow Fund. The Escrow
        Parties each acknowledge their joint and several obligation to pay any fees,
        expenses and other amounts owed to the Escrow Agent pursuant to this Agreement,
        including without limitation any fees incurred by Escrow Agent in connection
        with the transfer, reissuance or sale of Common Stock required under this
        Agreement. The Escrow Parties agree that Escrow Agent shall be entitled to
        pay
        itself for any fees, expenses or other amounts owed to the Escrow Agent out
        of
        the amounts held in the Escrow Fund and grant to the Escrow Agent a first
        priority security interest in the Escrow Fund to secure all obligations owed
        by
        them to the Escrow Agent under this Agreement. The Escrow Parties further
        agree
        that the Escrow Agent shall be entitled to withhold any distribution otherwise
        required to be made from the Escrow Fund if any fees, expenses or other amounts
        owed to the Escrow Agent remain unpaid on the date such distribution would
        otherwise be made.

      

      14.
          Notices.
        All
        notices under this Agreement shall be transmitted to the respective parties,
        shall be in writing and shall be considered to have been duly given or served
        when personally delivered to any individual party, or on the first (1st)
        business day after the date of deposit with an overnight courier for next
        day
        delivery, postage paid, or on the third (3rd) business day after deposit
        in the
        United States mail, certified or registered, return receipt requested, postage
        prepaid, or on the date of telecopy, fax or similar transmission during normal
        business hours, as evidenced by mechanical confirmation of such telecopy,
        fax or
        similar transmission, addressed in all cases to the party at his or its address
        set forth below, or to such other address as such party may designate, provided
        that notices will be deemed to have given to the Escrow Agent on the actual
        date
        received:

      

      If
        to
        Shareholders:

      

      Ng
        Chi
        Sum

      Hse
        A4,
        Ville de Jardin

      33-35
        Sui
        Wo Road

      Shatin, Hong
        Kong

      

      and

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      Yam
        Mei
        Ling

      Flat
        F,
        11/F., Block F

      Garden
        Vista

      15-17
        King Street, 

      N.
        T.,
        Hong Kong

      

      Copy
        to:

      

      Cheng
        & Kong Solicitors & Notaries

      Rooms
        2101-2, 21/F

      Far
        East
        Consortium Building

      121
        Des
        Veoux Road Central

      Hong
        Kong

      Attn:
        Donald Yap

      

      If
        to
        Full Art:

      

      Full
        Art
        International, Ltd.

      105
        Baishi Road

      Jiuzhou
        West Avenue

      Zhuhai
        519070

      People’s
        Republic of China

      0086-756-8538908

      Attn:
        Luo
        Ken Yi

      

      Copy
        to:

      

      Kirkpatrick
        & Lockhart Preston Gates Ellis LLP

      10100
        Santa Monica Blvd., 7th
        Floor

      Los
        Angeles, CA 90067

      Attention:
        Thomas J. Poletti, Esq.

      Facsimile:
        (310) 552-5001

      Email:
        thomas.poletti@klgates.com

      

      If
        to the
        Escrow Agent:

      

      Mellon
        Bank, N.A. 

      One
        Mellon Center, Room 151-3737

      Pittsburgh,
        PA 15258

      Facsimile:
        (412) 234-5339

      Attention:
        Carolyn Kozlowski, Vice President

      

      Any
        notice, except notice by the Escrow Agent, may be given on behalf of any
        party
        by its counsel or other authorized representative. In all cases the Escrow
        Agent
        shall be entitled to rely on a copy or a fax transmission of any document
        with
        the same legal effect as if it were the original of such document.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
15.
          Modifications;
        Waiver.
        This
        Agreement may not be altered or modified without the express prior written
        consent of all of the parties to this Agreement. No course of conduct shall
        constitute a waiver of any terms or conditions of this Agreement, unless
        such
        waiver is specified in writing, and then only to the extent so specified.
        A
        waiver of any of the terms and conditions of this Agreement on one occasion
        shall not constitute a waiver of the other terms of this Agreement, or of
        such
        terms and conditions on any other occasion.

      

      16.
         Further
        Assurances.
        If at
        any time the Escrow Agent shall determine or be advised that any further
        agreements, assurances or other documents are reasonably necessary or desirable
        to carry out the provisions of this Agreement and the transactions contemplated
        by this Agreement, the Escrow Parties shall execute and deliver any and all
        such
        agreements or other documents, and do all things reasonably necessary or
        appropriate to carry out fully the provisions of this Agreement.

      

      17.
         Assignment.
        This
        Agreement shall inure to the benefit of and be binding upon the successors,
        heirs, personal representatives, and permitted assigns of the parties. This
        Agreement is freely assignable by the Escrow Parties; provided, however,
        that no
        assignment by such party, or it successors or assigns, shall be effective
        unless
        prior written notice of such assignment is given to the other parties,
        including, without limitation, the Escrow Agent. This Agreement may not be
        assigned by the Escrow Agent, except that upon prior written notice to the
        Escrow Parties, the Escrow Agent may assign this Agreement to an affiliated
        or
        successor bank or other qualified bank entity.

      

      18.
         Section
        Headings.
        The
        section headings contained in this Agreement are inserted for purposes of
        convenience of reference only and shall not affect the meaning or interpretation
        of this Agreement.

      

      19.
         Governing
        Law.
        This
        Escrow Agreement shall be governed by and construed in accordance with the
        laws
        of the Commonwealth of Pennsylvania, without regard to principles of conflicts
        of law.

      

      20.
         Counterparts
        and Facsimile Execution.
        This
        Agreement may be executed in two or more counterparts, each of which shall
        be
        deemed an original and all of which together shall constitute one and the
        same
        instrument. The exchange of copies of this Escrow Agreement and of signature
        pages by facsimile transmission shall constitute effective execution and
        delivery of this Escrow Agreement as to the parties and may be used in lieu
        of
        the original Escrow Agreement for all purposes (and such signatures of the
        parties transmitted by facsimile shall be deemed to be their original signatures
        for all purposes).

      

      

      [Signatures
        on Next Page]

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

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

       

       

      
        	 	SHAREHOLDERS
	 	 
	 	                                                                           
                
	 	Ng Chi Sum
	 	 
	 	 
	 	                                                                           
                
	 	Yam Mei Ling
	 	 
	 	 
	 	FULL ART INTERNATIONAL,
                LTD.
	 	 
	 	
                BY:                                                                            

                NAME:
                  Luo Ken Yi

                TITLE:
                  Chairman

              
	 	 
	 	 
	 	MELLON BANK,
                N.A.
	 	 
	 	 
	 	
                BY:                                                                            
                  

                NAME:                                                                     

                TITLE:                                                                      

              
	 	 

      

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

      

      JOINT
        WRITTEN INSTRUCTIONS

      FOR
        RELEASE OF ESCROW FUNDS

      

      Pursuant
        to Section 5(d) of the Escrow Agreement dated as of November 6, 2007, by
        and
        among Full Art International, Ltd., Ng Chi Sum, Yam Mei Ling and Mellon Bank,
        N.A. (the “Escrow Agent”), Full Art International, Ltd., Ng Chi Sum and Yam Mei
        Ling, or their respective successors or assigns, hereby instruct the Escrow
        Agent to release the Escrow Fund in accordance with the following
        instructions:

       

      
        	Wire Instructions:	 	 
	 	 	 
	Account Name:	 	                                                                           
                
	Account Number:	 	                                                                           
                
	Bank Name:	 	                                                                           
                
	Bank ABA Number:	 	                                                                           
                
	Bank Address:	 	                                                                           
                
	
              	 	                                                                           
                
	For credit to:	 	                                                                           
                
	Special Instructions:	 	                                                                           
                
	
              	 	                                                                           
                
	 	 	 
	 	 	 
	Bank Check: 	 	 
	 	 	 
	Payee Name:	 	                                                                           
                
	Mailing Address:	 	                                                                           
                
	 	 	                                                                           
                
	 	 	                                                                           
                
	 	 	 

      

      
 

      
        	SHAREHOLDERS	 	FULL ART INTERNATIONAL, LTD.
	 	 	 
	 	 	 
	                                                                           
                	 	By:                                                                            
                
	Ng Chi Sum	 	Name:
	 	 	Title:
	 	 	 
	                                                                           
                	 	 
	Yam Mei Ling	 	 

      

         

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    

      EXHIBIT
        D

      

      FULL
        ART DISCLOSURE SCHEDULE

    

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Full
      Art Disclosure Schedule

    Section
      6.01(a)

    CAE
      Subsidiaries

    

    
      	
              Subsidiary
                Name

            	
              Country

            
	
              Full
                Art International, Ltd.

            	
              Hong
                Kong

            
	
               

            	
               

            
	
              Zhuhai
                King Glass Engineering Co., Ltd

            	
              People’s
                Republic of China

            
	
               

            	
               

            
	
              Zhuhai
                King General Glass Engineering Technology Co., Ltd

            	
              People’s
                Republic of China

            
	
               

            	
               

            
	
              King
                General Engineering (HK) Ltd.

            	
              Hong
                Kong

            
	
               

            	
               

            
	
              KGE
                Building System Ltd.

            	
              Hong
                Kong

            
	
               

            	
               

            
	
              KGE
                Australia Pty Ltd.

            	
              Australia

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Full
      Art Disclosure Schedule

    Section
      6.01(e)(i)

    Capitalization
      of CAE

    

    
      	
              CAE
                Shares

            	
               Issued
                and Outstanding

            
	
              Common
                Stock, US$0.001 par value

            	
              51,079,638(1)

            

    

    

    (1)
      The
      number of shares of common stock outstanding excludes (i) 73,700 shares of
      common stock issuable upon exercise of outstanding warrants, (ii) 2,857,143
      shares of common stock issuable upon the conversion of bonds, subject to
      adjustment, and (iii) 800,000 shares of common stock issuable upon the exercise
      of bond warrants, subject to adjustment, as discussed in CAE’s Form S-1
      Registration Statement filed with the United States Securities and Exchange
      Commission on October 22, 2007.

    

    The
      number of shares of common stock outstanding also excludes 140,000 shares of
      common stock issuable upon the exercise of warrants to be issued to Investor
      Relations International (“IRI”) pursuant to that certain letter of engagement
      and work authorization dated September 15, 2007 between IRI and
      CAE.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Full
      Art Disclosure Schedule

    Section
      6.01(g)

    Undisclosed
      Liabilities

    

    None.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Full
      Art Disclosure Schedule

    Section
      6.01(m)

    Compliance
      with Laws

    

    None.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Full
      Art Disclosure Schedule

    Section
      6.01(n)

    Governmental
      and Third-Party Proceedings

    

    None.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      E

    

    EMPLOYMENT
      AGREEMENT

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      EMPLOYMENT
        AGREEMENT

       

      THIS
        EMPLOYMENT AGREEMENT
        (this
“Agreement”)
        is
        made on November 6, 2007 and shall be effective as of and contingent upon
        the
        consummation of the Techwell Acquisition, as defined below.

       

      Between:

       

      
        	
                (1)

              	
                TECHWELL
                  ENGINEERING LIMITED,
                  a
                  limited liability company incorporated in Hong Kong with Company
                  No.
                  113922, whose registered office is at 17/F, Centre 600, 82 King
                  Lam
                  Street, Cheung Sha Wan, Kowloon, Hong Kong (the “Company”);
                  and

              

      

       

      
        	
                (2)

              	
                Ng
                  Chi Sum (holder
                  of Hong Kong Identity Card No. D289522(7))
                  of
                  Hse A4, Ville de Jardin, 33-35 Sui Wo Road, Shatin, Hong Kong (the
                  “Employee”).

              

      

       

      Whereas:

       

      
        	
                (A)

              	
                China
                  Architectural Engineering, Inc., incorporated under the laws of
                  the State
                  of Delaware, U.S.A., whose registered office is at 105 Baishi Road,
                  Jiuzhou West Avenue, Zhuhai 519070, People’s Republic of China, intends to
                  acquire one hundred percent (100%) of the issued and outstanding
                  shares in
                  the capital of the Company (the “Techwell Acquisition”).

              

      

       

      
        	
                (B)

              	
                The
                  parties desire to enter into this Agreement to establish the terms
                  and
                  conditions of the Employee’s employment, which shall be contingent on and
                  effective as of the consummation of the Techwell
                  Acquisition.

              

      

       

      IT
        IS AGREED
        as
        follows:

       

      Definitions

       

      
        	
                1.

              	
                In
                  this Agreement the following expressions shall have the following
                  meanings:

              

      

       

      “Business” means
        all
        and any business, trade or other commercial activities of the Company or
        any
        Group Company;

       

      “Board” means
        the
        Board of Directors of the Company or a duly authorized committee of the Board
        of
        Directors;

       

      “Confidential
        Information” means
        all
        and any information, knowledge or data (whether or not recorded in documentary
        form or on computer disk or tape) not generally known or available to the
        public
        which Employee may have learned, discovered, developed, conceived, originated
        or
        prepared during or as a result of the Employment relating to the operations,
        business methods, corporate plans, management systems, finances, new business
        opportunities, products, services, technology, customers, clients, policies,
        procedures, accounts, personnel, techniques, concepts, or research and
        development projects of the Company or any Group Company and any and all
        trade
        secrets, secret formulae, process, inventions, designs, know-how, discoveries,
        technical specifications and other technical information relating to the
        creation, production or supply of any past, present or future product or
        service
        of the Company or any Group Company;

       

      
        
          
          

        

        
          Page
            1

          
            

          

        

        
          
          

        

      

       

      “Employment” means
        the
        Employee’s employment in accordance with the terms and conditions of this
        Agreement;

       

      “Group
        Company” means
        the
        Company and any company which is a direct or indirect subsidiary of the Company
        from time to time; 

       

      “Termination
        Date” means
        the
        date on which the Employment is terminated howsoever caused.

       

      Term
        and Appointment

       

      
        	
                2.1

              	
                According
                  to the terms of this Agreement, the Employee shall be appointed
                  as the
                  General Manager of the Company.

              

      

       

      
        	
                2.2

              	
                Subject
                  to clause 9, the Employment shall commence upon the closing of
                  the
                  Techwell Acquisition and shall continue for a period of five (5)
                  years
                  from such date unless or until terminated by either party according
                  to
                  clause 8. Thereafter,
                  this Agreement shall automatically be renewed for successive one-year
                  terms for a period of three (3) years unless either party shall
                  give the
                  other no less than one hundred and eighty (180) days prior written
                  notice
                  of intent not to renew this Agreement. Notwithstanding
                  the foregoing, this Agreement is contingent upon the consummation
                  of the
                  Techwell Acquisition, and in the event that the Techwell Acquisition
                  does
                  not close, for whatever reason, within the sixty (60) day period
                  following
                  the date of this Agreement, this Agreement shall be terminated
                  and have no
                  effect.

              

      

       

      
        	
                2.3

              	
                Employee
                  shall bear his individual income tax by himself according to applicable
                  law and shall be responsible to properly report his personal income
                  tax to
                  his country or place of residency. Notwithstanding the Employee’s
                  reporting and payment obligations with respect to income taxes,
                  Employee
                  agrees that the Company or Group Company is entitled to withhold
                  the tax
                  according to applicable law.

              

      

       

      Duties

       

      3.1 During
        the Employment, the Employee will:

       

      
        	 	
                (a)

              	
                devote
                  his best efforts, energies, skills and attention to the business
                  and
                  affairs of the Company and Group
                  Company;

              

      

       

      
        	 	
                (b)

              	
                faithfully
                  and diligently perform all such duties and exercise all such powers
                  that
                  are commensurate with Employee’s position and as are lawfully and properly
                  assigned to him from time to time by the Chief Executive Officer
                  or the
                  Board, whether such duties or powers relate to the Company or any
                  other
                  Group Company;

              

      

       

      
        
          
          

        

        
          Page
            2

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (c)

              	
                comply
                  with all directions lawfully and properly given to him by the Chief
                  Executive Officer and the Board as they may from time to time deem
                  in the
                  best interests of the Company;

              

      

       

      
        	 	
                (d)

              	
                devote
                  the whole of his time, attention and abilities to the business
                  of the
                  Company or any other Group Company for which he is required to
                  perform
                  duties and shall not, without the Company’s prior written consent, be
                  directly or indirectly engaged, concerned or interested in any
                  other
                  business activity, trade or
                  occupation;

              

      

       

      
        	 	
                (e)

              	
                promptly
                  provide the Company with all such information as it may require
                  in
                  connection with the business or affairs of the Company and of any
                  other
                  Group Company for which he is required to perform
                  duties.

              

      

       

      
        	 	
                (f)

              	
                comply
                  with any and all governmental laws, regulations, and policies in
                  connection with his actions as an employee of the Company and conduct
                  himself in accordance with the highest business standards as are
                  reasonably and customarily expected of such position;
                  and

              

      

       

      
        	 	
                (g)

              	
                fully
                  cooperate and participate in any investigation conducted by the
                  Company
                  relating to its interests or as may be required by applicable
                  law.

              

      

       

      
        	
                3.2

              	
                The
                  Employee shall be required to work during the Company’s normal business
                  hours together with such additional hours as are required in the
                  proper
                  performance of his duties. The Employee acknowledges that he has
                  no
                  entitlement to additional remuneration for any hours worked in
                  excess of
                  the Company’s normal business
                  hours.

              

      

       

      
        	
                3.3

              	
                The
                  Employee’s normal place of work is 17/F Centre 600, 82 King Lam Street,
                  Cheung Sha Wan, Kowloon, Hong Kong. However, the Employee may be
                  assigned
                  to work in any of the Company’s offices, and may be required to make
                  overseas business trips as may be required for the proper performance
                  of
                  his duties under the Employment.

              

      

      

      Salary

       

      
        	
                4.1

              	
                The
                  Employee’s base salary shall be One Hundred Forty Thousand U.S. Dollars
                  (US$140,000) per annum payable in regular instalments in accordance
                  with
                  the customary payroll practices of the Company and subject to all
                  legally
                  required deductions and withholdings. Employee’s base salary will be
                  reviewed by the Company’s Compensation Committee annually in a manner that
                  is consistent with Company’s compensation policy. The base salary may be
                  increased from time to time by the Compensation Committee in its
                  absolute
                  discretion, the determination of which shall be based upon such
                  standards,
                  guidelines and factual circumstances as the Compensation Committee
                  deems
                  relevant. 

              

      

       

      
        
          
          

        

        
          Page
            3

          
            

          

        

        
          
          

        

      

       

      
        	
                4.2

              	
                Other
                  than as explicitly set forth in this Agreement, the Employee’s salary is
                  inclusive of all fees and other remuneration to which he may be
                  or become
                  entitled as an officer of the Company or of any other Group
                  Company.

              

      

       

      
        	
                4.3

              	
                During
                  Employment, Employee is entitled to reimbursement for reasonable
                  and
                  necessary business expenses incurred by Employee in connection
                  with the
                  performance of Employee’s duties. Payments to Employee will be made in
                  accordance with the Company’s policy and procedures upon presentation of
                  itemized statements of such business expenses in such detail as
                  the
                  Company may reasonably require and pursuant to applicable Company
                  policy.

              

      

       

      Vacation

       

      
        	
                5.1

              	
                The
                  Employee is entitled to accrue up to twenty (20) working days’ paid
                  vacation per calendar year during his Employment (plus public holidays
                  in
                  Hong Kong), to be taken at a time or times convenient to the Company.
                  The
                  right to paid vacation will accrue pro rata during each calendar
                  year of
                  the Employment. Any vacation time not taken within twelve (12)
                  months of
                  accruing will be forfeited, and no more than twenty (20) working
                  days’ of
                  vacation may be accrued at any time. Vacation time may not be carried
                  over
                  from one year to the next and payment will not be made in lieu
                  of
                  vacations not taken. 

              

      

       

      
        	
                5.2

              	
                On
                  termination of the Employment, the Employee shall be entitled to
                  payment
                  in lieu of accrued but untaken vacation (other than vacations forfeited
                  in
                  accordance with clause 5.1) on a pro rata
                  basis.

              

      

       

      Sickness
        and Other Incapacity

       

      
        	
                6.1

              	
                Subject
                  to the Employee’s compliance with the Company’s policy on notification and
                  certification of periods of absence from work, the Employee will
                  continue
                  to be paid his full salary during any period of absence from work
                  due to
                  sickness, injury or other incapacity, up to a maximum of two (2)
                  days for
                  each completed month of service in the first year of service and
                  four (4)
                  days for each completed month of service thereafter.
                  

              

      

       

      
        	
                6.2

              	
                The
                  Employee will not be paid during any period of absence from work
                  (other
                  than due to vacation, holiday, sickness, injury or other incapacity)
                  without the prior written permission of the
                  Company.

              

      

       

      Intellectual
        Property

       

      
        	
                7.1

              	
                The
                  Employee shall forthwith disclose full details of any inventions,
                  designs,
                  know-how or discoveries, whether registerable or not, or whether
                  patentable or a copyright work (“Inventions”)
                  in confidence to the Company and shall regard himself in relation
                  thereto
                  as a trustee for the Company.

              

      

       

      
        	
                7.2

              	
                All
                  intellectual property rights in such Inventions shall vest absolutely
                  in
                  the Company which shall be entitled, so far as the law permits,
                  to the
                  exclusive use thereof.

              

      

       

      
        
          
          

        

        
          Page
            4

          
            

          

        

        
          
          

        

      

       

      
        	
                7.3

              	
                Notwithstanding
                  clause 7.2 above, the Employee shall assign to the Company the
                  copyright
                  (by way of assignment of copyright) and other intellectual property
                  rights, if any, in respect of all works written, originated, conceived
                  or
                  made by the Employee (except only those works written, originated,
                  conceived or made by the Employee wholly outside his normal working
                  hours
                  hereunder and wholly unconnected with the Employment) during the
                  continuance of the Employment.

              

      

       

      
        	
                7.4

              	
                The
                  Employee agrees and undertakes that at any time during or after
                  the
                  termination of his Employment he will execute such deeds or documents
                  and
                  do all such acts and things as the Company may deem necessary or
                  desirable
                  to substantiate the Company’s rights in respect of the Inventions and
                  other intellectual property rights referred to in this clause 7,
                  including
                  for the purpose of obtaining letters patent or other privileges
                  in all
                  such countries as the Company may
                  require.

              

      

       

      Termination

       

      
        	
                8.1

              	
                Either
                  party may terminate the Employment by providing the other party
                  with sixty
                  (60) days’ written notice. The Company may, in its sole discretion, also
                  terminate the Employment immediately without prior written notice
                  by
                  making a payment of the base salary to Employee in lieu of prior
                  written
                  notice.

              

      

       

      
        	
                8.2

              	
                At
                  any time during the Employment the Company may also terminate the
                  Employment immediately and with no liability to make any further
                  payment
                  to the Employee (other than in respect of amounts accrued) for
                  serious
                  misconduct, including, without limitation, if the
                  Employee:

              

      

       

      
        	 	
                (a)

              	
                commits
                  any serious or repeated breach of any of his obligations under
                  this
                  Agreement or his Employment;

              

      

       

      
        	 	
                (b)

              	
                is
                  guilty of serious misconduct which, in the Board’s reasonable opinion, has
                  damaged or may damage the business or affairs of the Company or
                  any other
                  Group Company;

              

      

       

      
        	 	
                (c)

              	
                is
                  guilty of conduct which, in the Board’s reasonable opinion, brings or is
                  likely to bring himself, the Company or any other Group Company
                  into
                  disrepute;

              

      

       

      
        	 	
                (d)

              	
                is
                  charged with a criminal offense (other than a road traffic offense
                  not
                  subject to a custodial sentence);

              

      

       

      
        	 	
                (e)

              	
                is
                  or becomes incapacitated or ill to the extent that he is unable
                  to perform
                  the inherent duties and obligations of the Employment and the Employee
                  has
                  exhausted all of his entitlement to paid sickness leave set out
                  in clause
                  6, or 

              

      

       

      
        	 	
                (f)

              	
                is
                  declared bankrupt or makes any arrangement with or for the benefit
                  of his
                  creditors.

              

      

       

      
        
          
          

        

        
          Page
            5

          
            

          

        

        
          
          

        

      

       

      Any
        delay
        or forbearance by the Company in exercising any right of termination shall
        not
        constitute a waiver of it.

       

      
        	
                8.3

              	
                On
                  termination of the Employment for whatever reason (and whether
                  in breach
                  of contract or otherwise) the Employee
                  will:

              

      

       

      
        	 	
                (a)

              	
                immediately
                  deliver to the Company all books, documents, papers, computer records,
                  computer data, and any other property relating to the business
                  of or
                  belonging to the Company or any other Group Company which is in
                  his
                  possession or under his control. The Employee is not entitled to
                  retain
                  copies or reproductions of any documents, papers or computer records
                  relating to the business of or belonging to the Company or any
                  other Group
                  Company;

              

      

       

      
        	 	
                (b)

              	
                immediately
                  resign from any office he holds with the Company or any other Group
                  Company (and from any related trusteeships) without any compensation
                  for
                  loss of office. Should the Employee fail to do so he hereby irrevocably
                  authorizes the Company to appoint some person in his name and on
                  his
                  behalf to sign any documents and do any thing to give effect to
                  his
                  resignation from office; and

              

      

       

      
        	 	
                (c)

              	
                immediately
                  pay to the Company or, as the case may be, any other Group Company
                  all
                  outstanding amounts due or owed to the Company or any other Group
                  Company.
                  The Employee confirms that, should he fail to do so, the Company
                  is to be
                  treated as authorised to deduct from any amounts due or owed to
                  the
                  Employee by the Company (or any other Group Company) a sum equal
                  to such
                  amounts. 

              

      

       

      
        	
                8.4

              	
                The
                  Employee will not at any time after termination of the Employment
                  represent himself as being in any way concerned with or interested
                  in the
                  business of, or employed by, the Company or any other Group
                  Company.

              

      

       

      
        	
                8.5

              	
                The
                  Employee agrees that any payments pursuant to this clause 8 will
                  be in
                  full and final settlement of any and all claims the Employee may
                  have
                  against the Company or any other Group Company arising out of or
                  in
                  connection with his Employment or its termination, and Employee
                  and the
                  Company agree to execute a general mutual release in favor of the
                  other
                  and their successors, affiliates and estates to the fullest extent
                  permitted by law, drafted by and in a form reasonably satisfactory
                  to the
                  Company and Employee. 

              

      

       

      Suspension

       

      
        	
                9.1

              	
                Where
                  notice of termination has been served by either party whether in
                  accordance with clause 8.1 or otherwise, the Company shall be under
                  no obligation to provide work for or assign any duties to the Employee
                  for
                  the whole or any part of the relevant notice period and may require
                  him:

              

      

       

      
        	 	
                (a)

              	
                not
                  to attend any premises of the Company or any other Group Company;
                  and/or

              

      

       

      
        
          
          

        

        
          Page
            6

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (b)

              	
                to
                  resign with immediate effect from any offices he holds with the
                  Company or
                  any other Group Company (and any related trusteeships);
                  and/or

              

      

       

      
        	 	
                (c)

              	
                to
                  refrain from business contact with any customers, clients or employees
                  of
                  the Company or any Group Company;
                  and/or

              

      

       

      
        	 	
                (d)

              	
                to
                  take any vacation which has accrued under clause 5.1 during any
                  period of suspension under this
                  clause 10.1.

              

      

       

      
        	
                9.2

              	
                The
                  provisions of clauses 10 and 11 shall remain in full force and effect
                  during any period of suspension under
                  clause 9.1.

              

      

       

      
        	
                9.3

              	
                Any
                  suspension under this clause 9.1 shall be on full salary and benefits
                  during any period of suspension.

              

      

       

      Confidential
        Information 

       

      
        	
                10.1

              	
                The
                  Employee acknowledges:

              

      

       

      
        	 	
                (a)

              	
                that
                  the Confidential Information is valuable to the Company and other
                  Group
                  Companies;

              

      

       

      
        	 	
                (b)

              	
                that
                  the Company will provide the Employee with access to Confidential
                  Information so that the Employee is properly able to carry out
                  the duties
                  pursuant to this Agreement;

              

      

       

      
        	 	
                (c)

              	
                that
                  the Employee owes, without limitation, a duty of trust and confidence
                  to
                  the Company and a duty to act at all times in the best interests
                  of the
                  Company;

              

      

       

      
        	 	
                (d)

              	
                that
                  the disclosure of any Confidential Information to any customer
                  or actual
                  or potential competitor of the Company or any Group Company would
                  place
                  the Company at a serious competitive disadvantage and would cause
                  immeasurable damage to the Business and therefore the restrictions
                  contained in clauses 10 and 11 are reasonable to protect the
                  Company;

              

      

       

      and
        the
        Employee undertakes that he will not at any time (whether during the Employment
        or for a period of 12 months from the Termination Date) use for his own or
        another’s advantage, or reveal to any third-party person, firm, company or
        organization and shall use his best efforts to prevent the publication or
        disclosure of any Confidential Information to any third party.

       

      
        	
                10.2

              	
                The
                  limitations imposed on Employee pursuant to clause 10.1 shall not
                  apply to
                  Employee’s (i) compliance with legal process or subpoena, or (ii)
                  statements in response to inquiry from a court or regulatory body,
                  provided that Employee gives the Company reasonable prior written
                  notice
                  of such process, subpoena or request. In addition, the restrictions
                  in
                  this clause shall not apply so as to prevent the Employee from
                  using his
                  own personal skill in any business in which he may be lawfully
                  engaged
                  after the Employment is ended.

              

      

       

      
        
          
          

        

        
          Page
            7

          
            

          

        

        
          
          

        

      

       

      Restrictive
        Covenants

       

      
        	
                11.1

              	
                The
                  Employee covenants with the Company (for itself and as trustee
                  and agent
                  for each other Group Company) that, for the period during the Employment
                  and the twelve (12) months following the Termination Date, he shall
                  not,
                  whether directly or indirectly, on his own behalf or on behalf
                  of or in
                  conjunction with any other person, firm, company or other entity
                  (except
                  on behalf of the Company):

              

      

       

      
        	 	
                (a)

              	
                solicit
                  or entice away or attempt to solicit or entice away from the Company
                  or
                  any Group Company any person, firm, company or other entity who
                  is, or
                  was, a client of the Company or any Group Company with whom the
                  Employee
                  had business dealings during the course of his Employment or in
                  the twelve
                  (12) month period prior to the Termination
                  Date;

              

      

       

      
        	 	
                (b)

              	
                solicit
                  or entice away or attempt to solicit or entice away any individual
                  person
                  who is employed or engaged by the Company or any Group Company
                  either as a
                  director or in a managerial or technical capacity; or who is in
                  possession
                  of Confidential Information and with whom the Employee had business
                  dealings during the course of his Employment or the twelve (12)
                  month
                  period immediately prior to the Termination Date;
                  

              

      

       

      
        	 	
                (c)

              	
                carry
                  on, set up, be employed, engaged or interested in a business in
                  Hong Kong,
                  the People’s Republic of China, and any other geographic locations where
                  the Company’s Business is conducted, that is in competition with, whether
                  directly or indirectly, the Business as at the Termination Date.
                  It is
                  agreed that if any such company ceases to be in competition with
                  the
                  Company and/or any Group Company this clause 11.1(c) shall, with
                  effect from that date, cease to apply in respect of such company.
                  The
                  provisions of this clause 11.1(c) shall not, at any time following
                  the Termination Date, prevent the Employee from (i) owning an equity
                  interest in the Company, and (ii) owning up to one percent (1%)
                  of the
                  securities in a corporation engaged in a business that competes
                  with the
                  Company, provided that such securities are listed on a national
                  securities
                  exchange. Nothing in this clause 11.1(c) shall prohibit Employee
                  from
                  seeking or doing of business not in direct or indirect competition
                  with
                  the Business;

              

      

       

      
        	
                11.2

              	
                While
                  the parties agree that the restrictions contained in clause 10
                  and 11 are
                  reasonable in all the circumstances, it is agreed that if any court
                  of
                  competent jurisdiction holds that the length of the post-termination
                  covenants contained in clauses 10 and 11 are not reasonable, the
                  parties
                  agree that:

              

      

       

      
        	 	
                (a)

              	
                the
                  covenants are to apply for a period of nine (9) months from the
                  Termination Date; or, if this period is held to be
                  unreasonable,

              

      

       

      
        
          
          

        

        
          Page
            8

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (b)

              	
                for
                  a period of six (6) months from the Termination Date; or if this
                  period is
                  held to be unreasonable,

              

      

       

      
        	 	
                (c)

              	
                for
                  such other period as any court of competent jurisdiction decides
                  is
                  reasonable.

              

      

       

      
        	
                11.3

              	
                The
                  period during which the restrictions referred to in clauses 11.1(a)
                  to (c) inclusive which apply following the Termination Date shall
                  be
                  reduced by the amount of time during which, if at all, the Company
                  suspends the Employee under the provisions of clause 9.1.
                  

              

      

       

      Miscellaneous

       

      
        	
                12.1

              	
                This
                  Agreement, together with any other documents referred to in this
                  Agreement, supersedes all other employment agreements both oral
                  and in
                  writing between the Company and the Employee. The Employee acknowledges
                  that he has not entered into this Agreement in reliance upon any
                  representation, warranty or undertaking which is not set out in
                  this
                  Agreement or expressly referred to in it as forming part of the
                  Employee’s
                  contract of employment.

              

      

       

      
        	
                12.2

              	
                The
                  Employee represents and warrants to the Company that he will not
                  by reason
                  of entering into the Employment, or by performing any duties under
                  this
                  Agreement, be in breach of any terms of employment with a third
                  party
                  whether express or implied or of any other obligation binding on
                  him.

              

      

       

      
        	
                12.3

              	
                Any
                  notice to be given under this Agreement to the Employee may be
                  served by
                  being handed to him personally or by being sent by registered post
                  to him
                  at his usual or last known address; and any notice to be given
                  to the
                  Company may be served by being left at or by being sent by registered
                  post
                  to its registered office for the time being. Any notice served
                  by
                  registered post shall be deemed to have been served two days (excluding
                  Sundays and statutory holidays) after the date of the registered
                  post
                  receipt. 

              

      

       

      
        	
                12.4

              	
                The
                  provisions of clauses 10, 11 and 12 shall remain in full force and
                  effect after the Termination Date. 

              

      

       

      
        	
                12.5

              	
                This
                  Agreement and the relationship between the parties shall be governed
                  by,
                  and interpreted in accordance with, the laws of the State of Delaware,
                  U.S.A. Each of the parties agrees that the courts of the State
                  of Delaware
                  are to have non-exclusive jurisdiction to settle any disputes (including
                  claims for set-off and counterclaims) which may arise in connection
                  with
                  the creation, validity, effect, interpretation or performance of,
                  or the
                  legal relationships established by, this Agreement or otherwise
                  arising in
                  connection with this Agreement, and for such purposes irrevocably
                  submit
                  to the non-exclusive jurisdiction of the courts of the State of
                  Delaware.

              

      

       

      
        	
                12.6

              	
                The
                  Agreement is written in both Chinese and English languages. If
                  any
                  inconsistency arises between the two versions, the English version
                  shall
                  prevail.

              

      

       

      
        
          
          

        

        
          Page
            9

          
            

          

        

        
          
          

        

      

       

      
        	
                12.7

              	
                If
                  any one or more of the provisions contained in this Agreement shall
                  for
                  any reason be held to be invalid, illegal, or unenforceable in
                  any
                  respect, such invalidity, illegality, or unenforceability shall
                  not affect
                  any other provision hereof, and this Agreement shall be construed
                  as if
                  such invalid, illegal, or unenforceable provision had never been
                  contained
                  herein. In addition, if any court of competent jurisdiction determines
                  that any of the provisions set forth herein are unenforceable because
                  of
                  the duration or geographic scope of such provision, such court
                  shall have
                  the power to reduce the duration or scope of such provision as
                  the case
                  may be, to the extent necessary to render such provision
                  enforceable.

              

      

       

      
        	
                12.8

              	
                The
                  waiver by any party to a breach of any provision of this Agreement
                  must be
                  in writing and signed by such party to be effective, and shall
                  not operate
                  or be construed as a waiver of any subsequent breach of this
                  Agreement.

              

      

       

      
        	
                12.9

              	
                This
                  Agreement is personal in nature, and neither this Agreement nor
                  any part
                  of any obligation herein shall be assignable by Employee. The Company
                  shall be entitled to assign this Agreement to any affiliate or
                  successor
                  of the Company that assumes the ownership or control of the business
                  of
                  the Company, and the Agreement shall inure to the benefit of any
                  such
                  successor or assign.

              

      

       

      
        	
                12.10

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

              

      

       

      [SIGNATURE
        PAGE TO FOLLOW]

       

      
        
          
          

        

        
          Page
            10

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF
        this
AGREEMENT
        has
        been
        signed on the date the day and year first above written.

      

        
          	
                  SIGNED
                    by
                    NG
                    CHI SUM

                	
                  )

                
	
                  in
                    the presence of: 

                	
                  )

                
	 	 
	 	 
	 	 
	 	 
	
                  SIGNED
                    for
                    and on behalf of

                	
                  )

                
	
                  TECHWELL
                    ENGINEERING LIMITED

                	
                  )

                
	
                  in
                    the presence of:

                	
                  )

                

        

      

      
 

      
        
          
          

        

        
          Page
            11

          
            

          

        

        
          
          

        

         

      

      DATED
        THE 6TH DAY OF NOVEMBER, 2007

      

      

      TECHWELL
        ENGINEERING LIMITED

      

      

      and

      

      

      NG
        CHI SUM

       

      
        	 
	 
	
                EMPLOYMENT
                  AGREEMENTLIMITED
      RECOURSE ASSIGNMENT

    

    FOR
      GOOD
      AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
      acknowledged, and for the consideration set forth on Exhibit
      “A”
      attached
      hereto and incorporated herein (the “Purchase
      Price”),
      YA
      Global Investments, L.P., f/k/a Cornell Capital Partners, LP (the “Assignor”),
      a
      Cayman Island exempt limited partnership with an office located at 101 Hudson
      Street Suite 3700, Jersey City, New Jersey 07302, hereby sells, assigns, and
      transfers to Titan-Nexus, Inc. (the “Assignee”),
      a
      wholly owned subsidiary of Titan PCB West, Inc. (“Titan
      Electronics”), a
      Delaware corporation with its principal place of business located at 1700 Jay
      E
      11 Drive, Suite 200, Richardson, Texas 75081, in accordance with the terms
      hereof, all right, title, and interest, if any, of the Assignor in and to each
      of the documents, instruments and agreements described on Exhibit
      “B”,
      annexed
      hereto and incorporated herein by reference (collectively, the “Assigned
      Documents”)
      which
      relate to the loan arrangements between the Assignor and Nexus Custom
      Electronics Corp., f/k/a NECI Acquisition, Inc. (“NCEC”)
      and
      Nexus Nano Electronics, Inc., f/k/a Sagamore Holdings, Inc. (“Nexus
      Nano”,
      and
      collectively with NCEC, the “Borrowers”),
      and
      all rights, remedies, powers, and discretions of the Assignor thereunder, as
      if
      the Assignor had specifically and separately assigned to the Assignee each
      of
      the Assigned Documents. Except as expressly set forth in Section 5, below,
      this
      Assignment is made WITHOUT
      RECOURSE.
      

    

    
      	
              1.

            	
              Assignor’s
                Representations and Warranties.
                The Assignor warrants and represents solely
                the following, all as determined in accordance with the Assignor’s books
                and records:

            

    

     

    
      	 	
              a.

            	
              Exhibit
                “C”
                attached hereto and incorporated herein sets forth the amounts of
                principal and interest which were outstanding under the Assigned
                Documents
                as of October 31, 2007.

            

    

     

    
      	 	
              b.

            	
              After
                review of its files, the Assignor believes that the Assigned Documents
                include all of the debt instruments held by the Assignor with respect
                to
                its loan arrangements with the Borrowers, and all material documents
                granting security for such debt instruments, and that after consummation
                of the assignment contemplated herein, the Assignor will not hold
                any
                material debt of, or security interests or liens upon any material
                property of, the Borrowers, provided,
                however,
                that it is acknowledged and understood that the Assigned Documents
                specifically do not include certain documents, instruments, and/or
                agreements relating to the purchase of, or rights with respect to,
                stock
                of the Borrowers, including, without limitation, certain securities
                purchase agreements, registration rights agreements, warrants, investor
                agreements, and the like. In the event that the Assignor locates
                additional debt or security documents that should have been included
                in
                the Assigned Documents, or if the Assignee notifies the Assignor
                in
                writing of such additional documents that should have been included
                in the
                Assigned Documents, then the Assignor execute such assignments of
                such
                documents as the Assignee may reasonably request, and, to the extent
                that
                the originals of such documents are in the Assignor’s possession, deliver
                the originals of the same to the Assignee without further
                consideration.

            

    

     

    
      	 	
              c.

            	
              The
                Assignor (i) has not previously assigned, sold, or otherwise transferred
                the Assigned Documents, (ii) has the right and authority to transfer
                the
                Assigned Documents to the Assignee, and (iii) is transferring the
                Assigned Documents to the Assignee free and clear of any liens or
                encumbrances.

            

    

     

    
      	 	
              d.

            	
              The
                execution by the Assignor of this Assignment and the performance
                by the
                Assignor of the Assignor’s obligations hereunder respectively have been
                duly authorized by all required action and will not violate any order
                of
                any court or governmental agency or any agreement by which the Assignor
                is
                bound. 

            

    

     

    
      	 	
              e.

            	
              The
                Assignor has no actual knowledge of the filing of any action against
                the
                Borrowers or the Assignor seeking to invalidate, void, set aside,
                subordinate, or otherwise impair all or some portion of the Assigned
                Documents, or the debts, claims, liens, or security interests evidenced
                by
                the Assigned Documents, nor has the Assignor received any written
                correspondence threatening such an action. For the purpose of this
                provision, the “actual knowledge” of the Assignor shall mean the actual
                knowledge of the officers of the Assignor with responsibility for
                the
                management of the Assignor’s loan arrangements with the
                Borrowers.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              2.

            	
              Exclusion
                of Assignor’s Warranties and Representations.
                Except as specifically provided in Section 1, above, this Assignment
                is
                made by the Assignor without any representations or warranties whatsoever,
                whether expressed, implied, or imposed by law. Without limiting the
                generality of the foregoing exclusion of representations and warranties,
                this Assignment is made without any representations or warranties
                with
                respect to:

            

    

     

    
      	 	
              a.

            	
              the
                genuineness of any signature other than those made by or on behalf
                of the
                Assignor.

            

    

     

    
      	 	
              b.

            	
              the
                collectability of any amount owed to the Assignor under any of the
                Assigned Documents by the Borrowers or any guarantor of the Borrowers’
                obligations to the Assignor.

            

    

     

    
      	 	
              c.

            	
              the
                financial condition of the Borrowers or of any guarantor of the
                obligations of the Borrowers to the
                Assignor.

            

    

     

    
      	 	
              d.

            	
              the
                legality, validity, sufficiency, or enforceability of any of the
                Assigned
                Documents. 

            

    

     

    
      	 	
              e.

            	
              the
                validity, enforceability, attachment, priority, or perfection of
                any
                security interest, attachment, relief, encumbrance or mortgage included
                in
                the Assigned Documents, or the compliance with applicable law of
                any
                proceedings commenced or followed by the Assignor with respect to
                the
                Assignor’s loan arrangements with the
                Borrowers.

            

    

     

    
      	 	
              f.

            	
              the
                existence, or applicability, of any claims or causes of action under
                any
                state and Federal fraudulent transfer and conveyance laws, insolvency
                laws, and judicially developed doctrines relevant, or similar, to
                any of
                the foregoing laws, such as preference actions, equitable subordination
                and the like, whether under bankruptcy, insolvency, reorganization,
                receivership, moratorium and other similar laws affecting the rights
                and
                remedies of creditors, or other applicable law, that may result in
                the
                avoidance, subordination, setting aside, or invalidation of the Assigned
                Documents, or otherwise modify or affect the validity, enforceability,
                or
                priority, of the Assigned Documents or any of the claims evidenced
                thereby
                or the liens, pledges, and/or security interests granted thereunder
                or in
                connection therewith.

            

    

     

    
      	 	
              g.

            	
              the
                existence, value, access to, or condition of any collateral granted
                (or
                purported to be granted) to the Assignor under the Assigned Documents,
                including, without limitation, as to any environmental matters (including,
                without limitation as to the existence of lead paint, asbestos, UFFI,
                radon or any other material, hazardous or otherwise), the existence
                of
                health, housing, building or other code violations and/or the existence,
                identity or number of tenants or other occupants at any real estate
                collateral or any leased premises.

            

    

     

    
      	
              3.

            	
              Assignee’s
                Acknowledgment.
                The Assignee acknowledges the foregoing exclusion of representations
                and
                warranties and further acknowledges and agrees that (a) except as
                expressly provided in Section 1, above, the Assignor has not made
                any
                representations or warranties whatsoever, and (b) except as expressly
                provided in Section 5, is purchasing the Assigned Documents “as is” and
                without any recourse to the
                Assignor.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              4.

            	
              Remedies
                for Breach of Assignor’s Representations and
                Warranties.
                The sole remedy of the Assignee for the breach of any of the
                representations and warranties set forth in Section 1 above shall
                be a
                full or partial refund of the Purchase Price, as appropriate, provided that
                (a) in such case the Assignor shall have the right to repurchase
                the
                Assigned Documents in accordance with the provisions of Section 13,
                below,
                and (b) with respect to a breach of the representations and warranties
                set
                forth in Section 1(b), above, the Assignor shall be granted the
                opportunity to cure any such breach by executing and delivering to
                the
                Assignee within ten (10) business days of written demand by the Assignee
                such further assignments as the Assignee may reasonably request to
                ensure
                that all material debt instruments, and the security documents granted
                in
                connection with the same, have been assigned to the
                Assignee.

            

    

     

    
      	
              5.

            	
              
                Limited
                  Recourse Provision. This
                  Assignment is made WITHOUT
                  RECOURSE,
                  except in the following specific circumstances, and then only to
                  extent
                  expressly set forth in this Section:

              

            

    

     

    
      	 	
              a.

            	
              In
                the event that on or before eighteen (18) months from the date of
                this
                Assignment, the Assignee, in good faith and in the exercise of its
                reasonable discretion, deems it necessary to settle or pay any unsecured
                claims of the Borrowers (but only to the extent that such claims
                are held
                by parties unrelated to the Assignee, Titan Electronics, or Titan
                Global
                Holdings, Inc. or any of their respective affiliates) in connection
                with
                the enforcement of the Assigned Documents, then the Assignee shall
                have
                the right to require the Assignor to return shares of Preferred Stock
                (as
                defined on Exhibit
                “A”)
                to Titan Electronics in a number equal to the lesser of (i) the number
                of
                shares with a value equal to the actual cash payments made by the
                Assignee
                to such unsecured claimants, plus reasonable out of pocket costs
                and
                expenses (including attorneys fees and expenses) incurred by the
                Assignee
                in connection with settling such claims, and (ii) the number of shares
                of
                Preferred Stock granted to the Assignor pursuant to Section 2 of
                Exhibit
                “A”.
                

            

    

     

    
      	 	
              b.

            	
              In
                the event that on or before eighteen (18) months from the date of
                this
                Assignment, one or more actions are commenced by a party unrelated
                to the
                Assignee, Titan Electronics, Titan Global Holdings, Inc. or any of
                their
                respective affiliates which seek(s) to invalidate, void, set aside,
                subordinate, or otherwise impair all or some portion of the debts,
                claims,
                liens or security interests securing such claims, evidenced by the
                Assigned Documents, or a bankruptcy proceeding is commenced by or
                against
                either or both of the Borrowers during such eighteen (18) month period
                and
                such an action is later commenced in that bankruptcy proceeding,
                and such
                debts, claims, liens, or security interests, or some portion thereof,
                are
                thereafter actually invalidated, voided, set aside, subordinated,
                or
                otherwise impaired, or the Assignee, in good faith and in the exercise
                of
                its reasonable discretion, settles such action(s), then the Assignee
                shall
                have the right to require the Assignor to return shares of Preferred
                Stock
                (as defined on Exhibit
                “A”)
                to Titan Electronics in a number equal to the lesser of (i) the number
                of
                shares with a value equal to (without duplication) the amount of
                the debt
                invalidated or subordinated, or value of the collateral secured by
                a lien
                or security interest that was invalidated, subordinated, or set aside,
                or
                the actual cash payments made by the Assignee to settle such claims,
                plus
                the reasonable out of pocket costs and expenses (including attorneys
                fees
                and expenses) incurred by the Assignee in defending or settling such
                action or actions, and (ii) the number of shares of Preferred Stock
                granted to the Assignor pursuant to Section 2 of Exhibit
                “A”.
                Notwithstanding the foregoing, if the Assignee subsequently receives
                a
                distribution on any of the debts, claims, liens or security interests
                which were invalidated, voided, set aside, subordinated, or otherwise
                impaired (such as a distribution in a bankruptcy to the Assignee
                as an
                unsecured creditor), then the Assignor shall be entitled to the return
                of
                Preferred Stock in an amount with a value equal to such distribution,
                less
                any reasonable out of pocket costs and expenses incurred by the Assignee
                in connection with obtaining such distribution.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              c.

            	
              Notwithstanding
                the foregoing, the Assignee agrees that to the extent that the Assignee
                recovers any funds from Jaco Electronics, Inc. or Nexus Custom
                Electronics, Inc. pursuant to (a) any cause of action arising out
                of, or
                related to, that certain Asset Purchase Agreement dated as of September
                20, 2004 entered into by and among Jaco Electronics, Inc., Nexus
                Custom
                Electronics, Inc., and the Borrowers, or any of the transactions
                relating
                thereto, including, without limitation, the current civil action
                pending
                in The United States District Court for the Southern District of
                New York
                as Case No. 06-CV-6687, or (b) as a result of a claim or claims arising
                from the sale of counterfeit inventory by Jaco Electronics, Inc.
                to the
                Borrowers prior to the date of this Assignment, then the Assignee
                will
                first apply such funds, net of the reasonable out of pocket costs
                and
                expenses (including attorneys fees and expenses) incurred by the
                Assignee
                in obtaining such funds, to any claim the Assignee may have under
                Sections
                5(a) and 5(b), before exercising its right to require the return
                of the
                Preferred Stock, and to the extent the Assignee recovers such funds
                after
                the Assignor has been required to return all or any portion of the
                Preferred Stock to the Assignee under Sections 5(a) and/or 5(b),
                above,
                then the Assignor shall be entitled to the return of Preferred Stock
                in an
                amount with a value equal to such
                recovery.

            

    

     

    
      	 	
              d.

            	
              For
                the purposes of this Section and for Section 13, the value of the
                Preferred Stock shall be calculated as the greater of (x) the liquidation
                value of the Preferred Stock as of the date of the closing on this
                Assignment, or (y) the conversion value of the Preferred Stock into
                common
                stock of Titan Electronics determined as of the date the Assignee
                makes
                demand for the return of the Preferred Stock.

            

    

     

    
      	 	
              e.

            	
              In
                the event that the Assignor is required to return shares of Preferred
                Stock to the Assignee under Sections 5(a) or 5(b) above, and the
                Assignor
                no longer holds sufficient shares of Preferred Stock to satisfy such
                requirement, then the Assignor shall return all of the shares of
                Preferred
                Stock still in its possession, and then pay to the Assignee a cash
                amount
                equal to the lesser of (a) the value of the number of shares of Preferred
                Stock that would have otherwise been returned pursuant to the formula
                set
                forth in Section 5(d) above or (b) the total proceeds actually received
                for such shares of Preferred Stock (or, to the extent, converted
                to common
                stock and then sold by Assignor, the total proceeds actually received
                for
                such underlying shares of common stock as a result of such conversion)
                that would otherwise have been returned pursuant to Section 5(d)
                above if
                such shares had not been sold, net of the reasonable costs and expenses
                (including capital gains taxes, if any) incurred by the Assignor
                in
                selling such shares. In the event that the Assignor sold shares for
                different prices, then the price per share shall be calculated as
                the
                average of such prices. The Assignee acknowledges and agrees that
                the
                decision to sell such shares, and the price received for such shares,
                is
                wholly within the discretion of the Assignor, and that when selling
                shares, the Assignor shall have no duty to obtain the highest or
                best
                price for such shares. 

            

    

     

    
      	 	
              f.

            	
              Under
                no circumstances whatsoever shall the Assignor ever be required to
                return
                the TGH Shares (as defined in Exhibit
                “A”),
                or to defend the Assignee in any action of the nature described in
                this
                Section 5, or otherwise in connection with the Assigned Documents
                or the
                transactions related thereto.

            

    

     

    
      	
              6.

            	
              No
                Endorsement.
                This Assignment is made without any of the representations or warranties
                described in Article 3 and Article 9 of the Uniform Commercial Code
                as
                enacted and in force in the State of New Jersey, and does not constitute
                an endorsement by the Assignor of any promissory notes or other
                instruments listed on Exhibit
                “B”.
                Any attempt to affix this Assignment to such promissory notes or
                other
                instruments shall be without force or effect to alter the nature
                of this
                Assignment.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              7.

            	
              Representations
                by Assignee.
                The Assignee represents the
                following:

            

    

     

    
      	 	
              a.

            	
              The
                Assignee has determined to purchase this Assignment and the Assigned
                Documents following the Assignee’s own independent review and inspection
                of whatever matters the Assignee deemed necessary or appropriate
                and not
                in reliance upon any information provided by the
                Assignor.

            

    

     

    
      	 	
              b.

            	
              The
                Assignee has made its own independent investigation and evaluation
                as to
                the facts and circumstances relating to this Assignment.
                

            

    

     

    
      	 	
              c.

            	
              The
                Assignee has entered into this transaction after consultation with
                independent counsel of the Assignee’s own selection and, with the sole
                exception of the representations and warranties specifically made
                in
                Section 1, above, is not relying upon any representation or warranty
                of
                the Assignor in consummating this
                transaction.

            

    

     

    
      	 	
              d.

            	
              The
                execution by the Assignee of this Assignment and the performance
                by the
                Assignee of the Assignee’s obligations hereunder respectively have been
                duly authorized by all required action and will not violate any order
                of
                any court or governmental agency or any agreement by which the Assignee
                is
                bound.

            

    

     

    
      	 	
              e.

            	
              The
                Assignee is aware that (i) as a result of the convertible feature
                of
                certain of the Assigned Documents, that such Assigned Documents may
                be
                considered securities under applicable Federal and/or state securities
                laws, (ii) the Assigned Documents, and any securities into which
                any of
                the Assigned Documents may be converted, have not been registered
                with the
                Securities and Exchange Commission or the securities commission of
                any
                state and (iii) if such securities laws are applicable, the Assigned
                Documents, or any securities into which any of the Assigned Documents
                may
                be converted, may not be offered or sold except pursuant to an effective
                registration statement under the Securities Act of 1933, as amended
                (the
                “Securities Act”), or pursuant to an available exemption from, or in a
                transaction no subject to, the registration requirements of the Securities
                Act, and in accordance with applicable state securities laws.
                

            

    

     

    
      	 	
              f.

            	
              The
                Assignee is an “accredited Investor”, as defined in the Securities Act,
                and the Assignee has purchased the Assigned Documents for its own
                account,
                and not with a view to resale. The Assignee is able to bear the economic
                risk of the purchase of the Assigned Documents and it is able to
                hold the
                Assigned Documents for an indefinite period of
                time.

            

    

     

    
      	 	
              g.

            	
              The
                Assignee has done a full, complete, and exhaustive evaluation and
                investigation into the status of the Borrowers and into the status
                of any
                collateral which purportedly secures the Borrowers’ obligations under the
                Assigned Documents, including, without limitation, the Borrowers’
                financial status, the environmental condition of the collateral
                purportedly granted under any of the Assigned Documents, and the
                applicability of state and Federal fraudulent transfer and conveyance
                laws, insolvency laws, and judicially developed doctrines relevant,
                or
                similar, to any of the foregoing laws, such as preference actions,
                equitable subordination and the
                like.

            

    

     

    
      	 	
              h.

            	
              The
                Assignee acknowledges and agrees that the Purchase Price is to be
                paid in
                full to the Assignor, without adjustment whatsoever for the amount
                of
                outstanding taxes (or any other form of taxes or charges or liens
                whatsoever) affecting the collateral purportedly granted to the Assignor
                under the Assigned Documents, and the Assignee further acknowledges
                that
                the Assignee has investigated and evaluated the status of any and
                all
                outstanding taxes and understands that the Assignor is not responsible
                or
                liable in any way to the Assignee for the payment or adjustment
                thereof.

            

    

     

    
      	 	
              i.

            	
              The
                Assignee has not relied, in entering into this Assignment, upon any
                oral
                or written information from the Assignor or any of the Assignor’s
                employees, attorneys, affiliates, parent, agents or representatives,
                other
                than the express representations of the Assignor contained in Section
                1 of
                this Assignment. The Assignee further acknowledges that no employee
                or
                representative of the Assignor has been authorized to make, and that
                the
                Assignee has not relied upon, any statements or representations other
                than
                those specifically contained in Section 1 of this
                Assignment.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              8.

            	
              Scope
                of Assignment.
                The Assignee hereby expressly acknowledges and agrees that this Assignment
                is effective only as to the Assigned Documents, and the obligations
                evidenced thereby, specifically referenced on Exhibit
                “B”.
                

            

    

     

    
      	
              9.

            	
              Conditions
                Precedent.
                The sale of the Assigned Documents contemplated herein shall not
                be
                effective unless and until the following conditions precedent are
                satisfied:

            

    

     

    
      	 	
              a.

            	
              Each
                of the parties hereto shall have executed this Assignment where indicated
                below.

            

    

     

    
      	 	
              b.

            	
              The
                shares representing the Purchase Price shall have been transferred
                to the
                Assignor.

            

    

     

    
      	 	
              c.

            	
              The
                Assignor shall have purchased Two Million Five Hundred Thousand
                (2,500,000) shares of common stock of Titan Global Holdings, Inc.
                (the
                “TGH Purchased Shares”) in exchange for Five Million Dollars
                ($5,000,000.00).

            

    

     

    
      	 	
              d.

            	
              The
                Borrowers shall have executed and delivered an Acknowledgement and
                Consent
                with respect to the Assignment contemplated
                herein.

            

    

     

    
      	
              10.

            	
              Delivery
                of Assigned Documents.
                Upon the satisfaction of each of the conditions precedent set forth
                in
                Section 9, the Assignor shall deliver the following to the
                Assignee:

            

    

     

    
      	 	
              a.

            	
              An
                original of this Assignment executed by the Assignor;
                

            

    

     

    
      	 	
              b.

            	
              All
                of the original Assigned Documents in the Assignor’s possession;
                

            

    

     

    
      	 	
              c.

            	
              An
                assignment, in recordable form, of the Mortgage identified on Exhibit
                “B”;

            

    

     

    
      	 	
              d.

            	
              Authorization
                to file UCC-3 Assignments for the UCC Financing Statements identified
                on
                Exhibit
                “B”
                and 

            

    

     

    
      	 	
              e.

            	
              An
                allonge for each promissory note or other instrument listed on
                Exhibit
                “B”.

            

    

     

    
      	
              11.

            	
              WAIVER
                OF TRIAL BY JURY.
                THE
                ASSIGNEE AND THE ASSIGNOR HEREBY MAKE THE FOLLOWING WAIVER KNOWINGLY,
                VOLUNTARILY, AND INTENTIONALLY, AND UNDERSTAND THAT THE OTHER, IN
                ENTERING
                INTO THIS ASSIGNMENT, IS RELYING THEREON. THE ASSIGNEE AND THE ASSIGNOR,
                IF AND TO THE EXTENT OTHERWISE ENTITLED THERETO, HEREBY IRREVOCABLY
                WAIVE
                ANY PRESENT OR FUTURE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR
                CONTROVERSY IN WHICH THE OTHER PARTY IS OR BECOMES A PARTY (WHETHER
                SUCH
                CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE ASSIGNOR OR THE
                ASSIGNEE OR IN WHICH THE ASSIGNOR OR THE ASSIGNEE IS JOINED AS A
                PARTY
                LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF, OR IS IN RESPECT
                OF,
                THIS ASSIGNMENT, THE ASSIGNED DOCUMENTS, OR ANY RELATIONSHIP BETWEEN
                THE
                ASSIGNEE, WHETHER ALONE OR WITH OTHERS, AND THE ASSIGNOR RELATIVE
                TO THE
                ASSIGNED DOCUMENTS, THIS ASSIGNMENT, OR
                OTHERWISE.

            

    

     

    
      	
              12.

            	
              Indemnification.
                The Assignee hereby agrees to indemnify, defend, and hold the Assignor
                and
                any employee, officer, director, affiliate, parent, attorney, agent
                or
                predecessor-in-interest of the Assignor (each, an “Indemnified
                Person”)
                harmless of and from any claim brought or threatened against any
                Indemnified Person by the Borrowers, any guarantor or endorser of
                the
                Borrowers’ obligations, or any other person (as well as from attorneys’
                fees and expenses in connection therewith) on account, relating to,
                or
                arising out of the Assignee’s actions or omissions from and after the
                transfer of the Assigned Documents to the Assignee, each of which
                may be
                defended, compromised, settled, or pursued by the Indemnified Person
                with
                counsel of the Assignor’s selection, but at the sole cost and expense of
                the Assignee. The Assignee, by executing this Assignment where indicated
                below, acknowledges and agrees that its liability and obligations
                under
                this Section shall continue in full force and effect for a period
                of
                eighteen (18) months from the date of this
                Assignment.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              13.

            	
              Assignor’s
                Right to Repurchase Assigned Documents.

            

    

     

    
      	 	
              a.

            	
              The
                Assignor shall have the absolute and irrevocable right to purchase
                the
                Assigned Documents from the Assignee at any time after the date hereof
                if
                the Assignee asserts a claim against the Assignor for a breach of
                the
                representations and warranties set forth in Section
                1.

            

    

     

    
      	 	
              b.

            	
              In
                the event that the Assignor determines, in its sole and exclusive
                discretion, to exercise its right of repurchase any of the Assigned
                Documents under the terms set forth herein,
                then:

            

    

     

    
      	 	
              i.

            	
              the
                Assignor shall provide the Assignee with not less than three (3)
                business
                day’s written notice of its election, and shall purchase the Assigned
                Documents from the Assignee for the “Repurchase Price”. As used herein,
                the term “Repurchase
                Price”
                shall mean: (a) the return of the shares delivered to the Assignor
                as part
                of the Purchase Price, minus
                (b) shares of a value equal to any collections received with respect
                to
                the Assigned Documents after the execution and delivery of this Assignment
                and of the Assigned Documents, regardless of how received and applied
                to
                the obligations under the Assigned Documents, minus
                (c) shares of a value equal to the amount of any debt forgiveness
                or
                compromise granted by the Assignee to the Borrowers or any guarantor,
                plus
                (d) shares of a value equal to any reasonable out of pocket costs
                and
                expenses (including attorneys fees and expenses) incurred by the
                Assignee
                in connection with the Assigned Documents or the enforcement thereof;
                and
                

            

    

     

    
      	 	
              ii.

            	
              the
                Assignee shall deliver to the Assignor concurrently with the Assignor’s
                payment of the Repurchase Price, the following with respect to the
                Assigned Documents: (a) all original promissory notes and/or other
                debt
                instruments, properly re-endorsed to the Assignor, (b) all other
                original
                Assigned Documents delivered to the Assignee, and (c) any and all
                other
                reassignment instruments reasonably requested by the
                Assignor.

            

    

     

    
      	
              14.

            	
              Miscellaneous.

            

    

     

    
      	 	
              a.

            	
              This
                Assignment constitutes the entire agreement between the Assignor
                and the
                Assignee, shall be construed in accordance with the internal law
                of the
                State of New Jersey without regard to any conflicts of laws rules
                or
                principles, and is intended to take effect as a sealed
                instrument.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              b.

            	Each of the parties agrees that any legal action,
              proceeding, case, or controversy with respect to this Assignment or
              any
              Assigned Documents may only be brought in the Superior Court of Hudson
              County, New Jersey or in the United States District Court, District
              of New
              Jersey, sitting in Newark, New Jersey. By execution and delivery of
              this
              Assignment, each of the parties, for itself and in respect of its
              property, accepts, submits, and consents generally and unconditionally,
              to
              the jurisdiction of the aforesaid courts and WAIVES
              any objection based on forum
              non conveniens
              and any objection to venue of any action or proceeding instituted under
              this Assignment or any of the Assigned
              Documents.

    

     

    
       

    

    

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    Executed
      as an instrument under seal as of the 2nd
      day of
      November, 2007.

    

    
      	 	 	 
	 	
              YA
                GLOBAL INVESTMENTS, L.P.

            
	 
 	 
 	 
 
	 	By:  	Yorkville
              Advisors, LLC
	
            	Its:	Investment Manager
	 	
            

    

    
      	 	 	 
		By:  	/s/ Mark
              Angelo
	 	
              Name: Mark
                Angelo

            
	 	
              Its: Portfolio
                Manager

            

    

     

    Acknowledged,
      agreed, and accepted on 

    the
      terms and conditions set forth herein:

    

    TITAN
      NEXUS, INC.

    

    By:
      /s/
      BRYAN M. CHANCE

    Name:
      Bryan M. Chance

    Its:
      President

    

    

    Acknowledged,
      agreed, and accepted solely for the

    purposes
      of its obligations set forth on Exhibit A hereto:

    

    TITAN
      GLOBAL HOLDINGS, INC.

    

    By:
      /s/
      BRYAN M. CHANCE

    Name:
      Bryan M. Chance

    Its:
      President & CEO

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      “A”

    TO
      A CERTAIN ASSIGNMENT

    DATED
      AS OF NOVEMBER 1, 2007 BY AND BETWEEN

    YA
      GLOBAL INVESTMENTS, L.P. AND TITAN-NEXUS, INC.

    

    

    

    The
      Purchase Price for the Assigned Documents shall be as follows:

    

    1. Two
      Million (2,000,000) shares of common stock, par value $0.001 per share, of
      Titan
      Global Holdings, Inc. (“TGH”) valued at $2.00 per share (the “TGH Shares”).

     

    2. Convertible
      Preferred Stock (the “Preferred Stock”) of Titan PCB West, Inc. (“Titan
      Electronics”) with a liquidation value on the date of the closing of not less
      than Seven Million Two Hundred and Forty-Five Thousand One Hundred and Seventy
      Eight Dollars ($7,245,178) and a conversion rate into common stock of Titan
      Electronics as agreed by the parties and set forth in the Certificate of
      Amendment of Titan Electronics of even date herewith designating the rights
      of
      such Preferred Stock. The Preferred Stock shall include customary preferred
      stock terms, including, without limitation, piggyback and demand registration
      rights, voting rights (including rights to vote as a separate class with respect
      to certain major decisions of Titan Electronics), redemption rights, and
      anti-dilution protections. In addition, the Preferred Stock terms shall include
      a covenant by Titan Electronics providing that, within eighteen (18) months
      of
      the closing hereunder, it shall: (a) consolidate the assets of Nexus Nano
      Electronics, Inc. and the business operations of Titan PCB East, Inc. into
      Titan
      Electronics, and (b) consummate a public distribution of the shares of common
      stock of Titan Electronics (which may be limited to a distribution of Titan
      Electronics stock to the shareholders of TGH); provided, however, in the event
      that if either (a) or (b) shall not occur within such time period, YA Global
      Investments, L.P. shall have a put right to sell the Preferred Stock back to
      the
      Assignee, Titan Electronics, or TGH for no less than the liquidation value
      of
      $7,245,178. In addition, Titan Electronics shall have the right to re-purchase
      the shares of Preferred Stock at the price of $70.00 per share upon at least
      thirty (30) days prior written notice to the Assignor.

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
      “B”

    TO
      A CERTAIN ASSIGNMENT

    DATED
      AS OF NOVEMBER 1, 2007 BY AND BETWEEN

    YA
      GLOBAL INVESTMENTS, L.P. AND TITAN-NEXUS, INC.

     

    

    
      	
              1.

            	
              Term
                Note dated September 20, 2004 made by NCEC payable to Comerica Bank
                in the
                original principal amount of $1,200,000.00, and assigned by Comerica
                Bank
                to the Assignor pursuant to a certain Term Note Allonge dated August
                8,
                2007.

            

    

     

    
      	
              2.

            	
              Revolving
                Credit Note dated September 20, 2004 made by NCEC payable to Comerica
                Bank
                in the original principal amount of $5,000,000.00, and assigned by
                Comerica Bank to the Assignor pursuant to a certain Revolving Credit
                Note
                Allonge dated August 8, 2007.

            

    

     

    
      	
              3.

            	
              Credit
                Agreement dated as of September 20, 2004 by and between NCEC and
                Comerica
                Bank, and assigned by Comerica Bank to the Assignor pursuant to a
                certain
                Assignment of Credit Agreement dated August 8,
                2007.

            

    

     

    
      	
              4.

            	
              Security
                Agreement dated as of September 20, 2004, granted by NCEC in favor
                of
                Comerica Bank, and assigned by Comerica Bank to the Assignor pursuant
                to a
                certain Assignment of Security Agreement dated August 8, 2007, and
                amended
                and restated by a certain Amended and Restated Security Agreement
                dated
                August 8, 2007.

            

    

     

    
      	
              5.

            	
              Continuing
                Collateral Mortgage dated as of September 20, 2004, granted by NCEC
                in
                favor of Comerica Bank upon a certain property located in Brandon,
                Vermont, and assigned by Comerica Bank to the Assignor pursuant to
                a
                certain Assignment of Mortgage dated August 8, 2007, and amended
                and
                restated by a certain Amended and Restated Continuing Collateral
                Mortgage
                dated August 8, 2007. 

            

    

     

    
      	
              6.

            	
              Guaranty
                dated as of July 30, 2007 made by NCEC in favor of the
                Assignor.

            

    

     

    
      	
              7.

            	
              Amended
                and Restated Secured Convertible Debenture (No. CCP-1) dated March
                10,
                2006 in the original face amount of $743,284.72, issued by Nexus
                Nano to
                the Assignor. 

            

    

     

    
      	
              8.

            	
              Secured
                Convertible Debenture (No. CCP-2) dated June 1, 2006 in the original
                face
                amount of $850,000.00 issued by Nexus Nano to the
                Assignor.

            

    

     

    
      	
              9.

            	
              Secured
                Convertible Note (No. NXNO 4-1) dated July 30, 2007 in the original
                principal amount of $660,000.00, made by Nexus Nano payable to the
                Assignor.

            

    

     

    
      	
              10.

            	
              Secured
                Convertible Note (No. NXNO 4-2) dated July 30, 2007 in the original
                principal amount of $6,723,087.00, made by Nexus Nano payable to
                the
                Assignor.

            

    

     

    
      	
              11.

            	
              Security
                Agreement dated as of November 10, 2005, granted by Nexus Nano to
                CSI
                Business Finance, Inc., and assigned to the Assignor by Assignment
                dated
                March 10, 2006, as amended by that certain Amended Security Agreement
                dated as of June 1, 2006 entered into by and between Nexus Nano and
                the
                Assignor.

            

    

     

    
      	
              12.

            	
              Parent
                Security Agreement dated as of July 30, 2007, granted by Nexus Nano
                to the
                Assignor.

            

    

     

    
      	
              13.

            	
              The
                following UCC Financing Statements: (i) UCC Financing Statement naming
                NECE as debtor, in favor of Comerica Bank as secured party, and filed
                with
                the Secretary of State of Florida on September 22, 2004 as document
                number
                200407923665, and assigned to the Assignor; (ii) UCC Financing Statement
                naming Nexus Nano as debtor, in favor of the Assignor as secured
                party,
                and filed with the Secretary of State of Nevada on March 21, 2007
                as
                document number 2007008715-9; and (iii) UCC Financing Statement naming
                Nexus Nano as debtor, in favor of the Assignor as secured party,
                and filed
                with the Secretary of State of Nevada on August 1, 2007 as document
                number
                2007024948-2.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      “C”

    TO
      A CERTAIN ASSIGNMENT

    DATED
      AS OF NOVEMBER 1, 2007 BY AND BETWEEN

    YA
      GLOBAL INVESTMENTS, L.P. AND TITAN-NEXUS, INC.

    

    

    Principal
      and interest outstanding under the Assigned Documents as of October 31,
      2007:

    

    

      
        	 	 	 	 
	
                Total
                  Debentures (principal):

              	 	
                $

              	
                8,907,620.02

              	 
	
                Total
                  Debentures (interest):

              	 	
                $

              	
                556,515.49

              	 
	
                Term
                  note (principal):

              	 	
                $

              	
                520,000.00

              	 
	
                Term
                  note (interest):

              	 	
                $

              	
                16,369.89

              	 
	
                Revolving
                  note (principal)

              	 	
                $

              	
                1,207,342.00

              	 
	
                Revolving
                  note (interest) 

              	 	
                $

              	
                37,330.98

              	 
	 	 	 	 	 
	
                Total

              	 	
                $

              	
                11,245,178.38

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}]]