Document:

THIS  WARRANT  HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS
AMENDED (THE  "SECURITIES  ACT"), OR ANY OTHER  APPLICABLE STATE SECURITIES LAWS
AND HAS BEEN ISSUED IN RELIANCE UPON AN EXEMPTION  FROM  REGISTRATION  UNDER THE
SECURITIES  ACT.  THIS  WARRANT  SHALL  NOT  CONSTITUTE  AN  OFFER TO SELL NOR A
SOLICITATION  OF AN OFFER TO BUY THE WARRANT IN ANY  JURISDICTION  IN WHICH SUCH
OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THIS WARRANT AND THE SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE  HEREOF HAVE
NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
"SECURITIES   ACT"),  OR  ANY  STATE  SECURITIES  LAWS  AND  MAY  NOT  BE  SOLD,
TRANSFERRED,  PLEDGED OR OTHERWISE  DISPOSED OF UNLESS (i) REGISTERED  UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR (ii) GLOBAL SOURCES
LIMITED, A DELAWARE CORPORATION (THE "COMPANY"), SHALL HAVE RECEIVED AN OPINION,
IN FORM, SCOPE AND SUBSTANCE REASONABLY  ACCEPTABLE TO THE COMPANY, FROM COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE  STATE SECURITIES LAWS
IS NOT REQUIRED.

                                     WARRANT

                             GLOBAL SOURCES LIMITED

No. ____                                     Initial  Number of Shares:_________
Date of Issuance: _________________                        Exercise Price:______

            THIS CERTIFIES that, for value received,  ___________(the "Holder"),
is entitled, upon the terms and subject to the conditions hereinafter set forth,
at any time on or after_________________ and on or prior to ________________(the
"Termination  Date") but not  thereafter,  to subscribe  for and  purchase  from
GLOBAL  SOURCES  LIMITED,  a Delaware  corporation  (the  "Company"),  up to ___
_________________ (_______)  shares (the "Warrant  Shares") of Common Stock, par
value US $0.001  per share of the  Company  (the  "Common  Stock"),  subject  to
adjustment as hereinafter provided, at a purchase price per share equal to _____
( the "Exercise  Price").  This Warrant is being issued in  connection  with the
Purchase  Agreement  dated as of ________________ by and between the Company and
the Holder (the "Agreement").

<PAGE>

     1.  Title of  Warrant.  Prior  to the  expiration  hereof  and  subject  to
compliance with the Securities Act and other  applicable  laws, this Warrant and
all rights  hereunder  are  transferable,  in whole or in part, at the office or
agency of the  Company  by the  holder  hereof  in person or by duly  authorized
attorney,  upon  surrender of this Warrant  together  with the  Assignment  Form
annexed hereto properly endorsed.

     2. Warrant Shares.

          (a) The Company covenants that all shares of Common Stock which may be
issued upon the  exercise  of rights  represented  by this  Warrant  will,  upon
exercise of the rights represented by this Warrant, be duly authorized,  validly
issued,  fully paid and nonassessable and free from all taxes, liens and charges
in respect of the issue  thereof  (other  than taxes in respect of any  transfer
occurring  contemporaneously  with such issue).

          (b) The  Company  covenants  that  during the  period  the  Warrant is
outstanding,  it will reserve from its  authorized  and unissued  Common  Stock,
solely for the  purpose of  effecting  the  exercise  of the Warrant a number of
shares of Common  Stock  equal to of the  aggregate  number  of  Warrant  Shares
issuable upon exercise of the Warrant on the date of the Purchase Agreement. The
Company  further  covenants  that its issuance of this Warrant shall  constitute
full authority to its officers who are charged with the duty of executing  stock
certificates  to execute and issue the  necessary  certificates  for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.

     3. Exercise of Warrant.

          (a)  Method  of  Exercise.  Except  as  provided  in  Section 4 below,
exercise of the purchase  rights  represented by this Warrant may be made at any
time or times,  before the close of business on the  Termination  Date,  or such
earlier date on which this Warrant may terminate as provided in this Warrant, by
the  surrender  of this Warrant and the Notice of Exercise  Form annexed  hereto
duly  executed,  at the office of the Company (or such other office or agency of
the Company as it may  designate by notice in writing to the  registered  holder
hereof at the address of such holder  appearing on the books of the Company) and
upon payment of the Exercise  Price of the shares thereby  purchased;  whereupon
the holder of this Warrant  shall be entitled to receive a  certificate  for the
number of shares of Common Stock so purchased. Certificates for shares purchased
hereunder  shall be delivered to the holder hereof within ten (10) business days
after the date on which this Warrant  shall have been  exercised  as  aforesaid.
Payment  of the  Exercise  Price  of the  shares  may be by  certified  check or
cashier's  check or by wire transfer to an account  designated by the Company in
an amount  equal to the  Exercise  Price  multiplied  by the  number of  Warrant
Shares.

                                      -2-
<PAGE>

     4.  Adjustments of Exercise Price and Number of Warrant Shares.  The number
and kind of  securities  purchasable  upon the  exercise of this Warrant and the
Exercise  Price  shall be  subject  to  adjustment  from  time to time  upon the
happening of any of the following.

         (a) In case the  Company  shall (i) declare or pay a dividend in shares
of Common Stock or make a  distribution  in shares of Common Stock to holders of
its outstanding  Common Stock,  (ii) subdivide its outstanding  shares of Common
Stock,  (iii)  combine  its  outstanding  shares of Common  Stock into a smaller
number of shares of Common  Stock or (iv) issue any shares of its capital  stock
in a  reclassification  of the Common Stock,  then the number of Warrant  Shares
purchasable  upon  exercise of this Warrant  immediately  prior thereto shall be
adjusted  so that the holder of this  Warrant  shall be  entitled to receive the
kind and number of Warrant  Shares or other  securities  of the Company which he
would  have  owned or have  been  entitled  to  receive  had such  Warrant  been
exercised in advance  thereof.  Upon each such adjustment of the kind and number
of Warrant  Shares or other  securities  of the  Company  which are  purchasable
hereunder,  the holder of this Warrant shall  thereafter be entitled to purchase
the number of Warrant Shares or other securities  resulting from such adjustment
at an  Exercise  Price per such  Warrant  Share or other  security  obtained  by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares  purchasable  pursuant hereto  immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company  resulting from such  adjustment.  An adjustment made pursuant to
this paragraph shall become  effective  immediately  after the effective date of
such event retroactive to the record date, if any, for such event.

                                      -3-
<PAGE>

          (b) If after the date on which the  Warrants  are first  issued to the
Holder,  any capital  reorganization  or  reclassification  of the shares of the
Common  Stock,  or   consolidation   or  merger  of  the  Company  with  another
corporation,  or the sale of all or  substantially  all of its assets to another
corporation  or other similar  event shall be effected,  then, as a condition of
such reorganization,  reclassification,  consolidation,  merger, or sale, lawful
and fair provision  shall be made whereby the Holder shall  thereafter  have the
right to purchase and receive  upon the basis and upon the terms and  conditions
specified in this Agreement such shares of stock,  securities,  or assets as may
be issued or payable with respect to or in exchange for a number of  outstanding
shares  of such  Common  Stock  equal to the  number  of  shares  of such  stock
immediately  theretofore  purchasable  and  receivable  upon the exercise of the
rights represented by this Agreement had such reorganization,  reclassification,
consolidation,  merger or sale not taken  place,  and in such event  appropriate
provisions  shall be made with respect to the rights and interests of the Holder
to the end that the provisions hereof shall thereafter be applicable,  as nearly
as may be in relation to any shares of stock,  securities,  or assets thereafter
deliverable upon the exercise hereof. Upon the occurrence of any event specified
in this paragraph,  the Company shall given written notice of the effective date
of  such   reorganization,   reclassification,   consolidation,   merger,  sale,
dissolution, liquidation, winding up or issuance. Such notice shall also specify
the date as of which the holders of Common  Stock of record shall be entitled to
exchange their Common Stock for stock,  securities,  or other assets deliverable
upon  such  reorganization,   reclassification,   consolidation,  merger,  sale,
dissolution,  liquidation,  winding up or issuance. Failure to give such notice,
or any  defect  therein  shall not  affect  the  legality  or  validity  of such
material.

     5. Voluntary  Adjustment by the Company. The Company may at any time during
the term of this Warrant,  reduce the then current  Exercise Price to any amount
and for any period of time deemed appropriate by the Board of Directors of the
Company.

                                      -4-
<PAGE>

     6. Notice of Adjustment. Whenever the number of Warrant Shares or number or
kind of  securities  or other  property  purchasable  upon the  exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly mail by registered or certified mail, return receipt requested,  to the
holder of this Warrant notice of such  adjustment or  adjustments  setting forth
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise  Price of such Warrant Shares (and
other  securities  or property)  after such  adjustment,  setting  forth a brief
statement  of  the  facts  requiring  such  adjustment  and  setting  forth  the
computation  by which  such  adjustment  was made.  Such  notice,  in absence of
manifest  error,  shall  be  conclusive  evidence  of the  correctness  of  such
adjustment.

     7.  No  Fractional   Shares  or  Scrip.  No  fractional   shares  or  scrip
representing  fractional  shares  shall  be  issued  upon the  exercise  of this
Warrant.

     8. Charges,  Taxes and  Expenses.  Issuance of  certificates  for shares of
Common Stock upon the exercise of this Warrant  shall be made without  charge to
the holder hereof for any issue or transfer tax or other  incidental  expense in
respect of the  issuance of such  certificate,  all of which taxes and  expenses
shall be paid by the Company,  and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant;  provided,  however,  that in the event certificates for
shares of Common  Stock  are to be issued in a name  other  than the name of the
holder of this  Warrant,  this Warrant when  surrendered  for exercise  shall be
accompanied by the Assignment  Form attached  hereto duly executed by the holder
hereof; and provided further, that upon any transfer involved in the issuance or
delivery  of any  certificates  for  shares of Common  Stock,  the  Company  may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

                                      -5-
<PAGE>

     9.  No Rights as Stockholder until Exercise.  This Warrant does not entitle
the holder hereof to any voting  rights or other rights as a stockholder  of the
Company  prior to the exercise  thereof.  Upon the surrender of this Warrant and
the payment of the aggregate  Exercise  Price,  the Warrant  Shares so purchased
shall be and be deemed to be issued to such  holder as the record  owner of such
shares as of the close of business on the later of the date of such surrender or
payment.

     10.  Loss,  Theft,  Destruction  or  Mutilation  of  Warrant.  The  Company
represents and warrants that upon receipt by the Company of evidence  reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
certificate or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction,  of indemnity or security reasonably satisfactory
to it, and upon surrender and cancellation of such Warrant or stock certificate,
if  mutilated,  the  Company  will  make  and  deliver  a new  Warrant  or stock
certificate  of like  tenor and dated as of such  cancellation,  in lieu of such
Warrant or stock certificate.

     11. Unregistered Securities/Legend.

          (a) The Holder of this  Warrant,  by acceptance  hereof,  acknowledges
that this  Warrant and the shares of Warrant  Shares to be issued upon  exercise
hereof are being  acquired  solely for the  Holder's  own  account  and not as a
nominee for any other party,  and for  investment,  and that the Holder will not
offer, sell or otherwise dispose of this Warrant or any shares of Warrant Shares
to be issued upon exercise hereof except  pursuant to an effective  registration
statement,  or an exemption from registration,  under the Securities Act and any
applicable state securities laws.

          (b) Except as provided in Section 11(c)  hereof,  this Warrant and all
certificates  representing  shares of Warrant Shares issued upon exercise hereof
shall be stamped or imprinted with a legend in substantially the following form:

          THIS  WARRANT AND THE SHARES OF COMMON STOCK  ISSUABLE  UPON
          EXERCISE   HEREOF  HAVE  NOT  BEEN   REGISTERED   UNDER  THE
          SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),
          OR  ANY  STATE   SECURITIES   LAWS  AND  MAY  NOT  BE  SOLD,
          TRANSFERRED,  PLEDGED OR  OTHERWISE  DISPOSED  OF UNLESS (i)
          REGISTERED  UNDER THE  SECURITIES  ACT AND UNDER  APPLICABLE
          STATE  SECURITIES  LAWS OR (ii) GLOBAL  SOURCES  LIMITED,  A
          DELAWARE CORPORATION (THE "COMPANY"), SHALL HAVE RECEIVED AN
          OPINION, IN FORM, SCOPE AND SUBSTANCE REASONABLY  ACCEPTABLE
          TO THE COMPANY,  FROM COUNSEL  REASONABLY  ACCEPTABLE TO THE
          COMPANY, THAT REGISTRATION OF SUCH SECURITIES

                                      -6-
<PAGE>

          UNDER  THE  SECURITIES  ACT  AND  UNDER  THE  PROVISIONS  OF
          APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

         (c) The restrictions imposed by this Section 11(c) upon the transfer of
this  Warrant or the  shares of Warrant  Shares to be  purchased  upon  exercise
hereof shall terminate (i) when such securities  shall have been resold pursuant
to being effectively registered under the Securities Act, (ii) upon the Issuer's
receipt of an opinion of counsel, in form and substance reasonably  satisfactory
to the Issuer,  addressed to the Issuer to the effect that such restrictions are
no  longer  required  to ensure  compliance  with the  Securities  Act and state
securities laws or (iii) upon the Issuer's receipt of other evidence  reasonably
satisfactory to the Issuer that such registration and qualification  under state
securities  laws is not  required.  Whenever such  restrictions  shall cease and
terminate as to any such  securities,  the Holder  thereof  shall be entitled to
receive from the Issuer (or its transfer agent and registrar),  without any cost
or expense (other than applicable  transfer taxes, if any), new Warrants (or, in
the case of shares of Warrant Shares, new stock  certificates) of like tenor not
bearing the applicable  legend  required by Section 11(b) hereof relating to the
Securities Act and state securities laws.

     12. Miscellaneous.

          (a) Issue Date.  The provisions of this Warrant shall be construed and
shall be given effect in all respects as if it had been issued and  delivered by
the Company on the date hereof.

          (b)  Waivers.  Any  waiver by the  Company,  on the one hand,  and the
Investor,  on the other  hand,  of any breach of or  failure to comply  with any
provision  or  condition  of this  Agreement  by the  other  party  shall not be
construed as, or constitute, a continuing waiver of such provision or condition,
or a waiver of any  other  breach  of, or  failure  to  comply  with,  any other
provision or condition of this  Agreement,  any such waiver to be limited to the
specific matter and instance for which it is given. No waiver of any such breach
or failure or of any provision or condition of this Agreement shall be effective
unless in a written  instrument  signed by the party  granting  the  waiver  and
delivered  to the other party  hereto in the manner  provided  for  hereunder in
Section  6(c).  No failure or delay by either  party to enforce or exercise  its
rights  hereunder  shall be deemed a waiver  hereof,  nor  shall  any  single or
partial exercise of any such right or any abandonment or discontinuance of steps
to enforce such rights,  preclude any other or further  exercise  thereof or the
exercise of any other  right.

          (c) Notices. All notices, demands,  consents,  requests,  instructions
and other  communications  to be given or  delivered  or  permitted  under or by
reason of the provisions of this Warrant or in connection with the  transactions
contemplated  hereby shall be in writing and shall be deemed to be delivered and
received by the intended recipient as follows: (i) if personally  delivered,  on
the business day of such  delivery (as  evidenced by the receipt of the personal
delivery  service),  (ii) if mailed  certified or registered mail return receipt
requested,  four (4)

                                      -7-
<PAGE>

business days after being mailed,  (iii) if delivered by overnight courier (with
all charges  having been  prepaid),  on the  business  day of such  delivery (as
evidenced  by the  receipt  of  the  overnight  courier  service  of  recognized
standing), or (iv) if delivered by facsimile  transmission,  on the business day
of such delivery if sent by 6:00 p.m. in the time zone of the  recipient,  or if
sent after that time, on the next  succeeding  business day (as evidenced by the
printed  confirmation of delivery  generated by the sending  party's  telecopier
machine).  If  any  notice,  demand,  consent,  request,  instruction  or  other
communication  cannot be  delivered  because  of a changed  address  of which no
notice was given (in  accordance  with this  Section  12(c)),  or the refusal to
accept  same,  the  notice,  demand,  consent,  request,  instruction  or  other
communication  shall be deemed received on the second business day the notice is
sent (as  evidenced  by a sworn  affidavit  of the  sender).  All such  notices,
demands, consents, requests,  instructions and other communications will be sent
to the following addresses or facsimile numbers as applicable:

                   If to the Company:   Global Sources Limited
                                        342 Madison Avenue, Suite 1815
                                        New York, New York 10173
                                        Attn: President
                                        Telephone: 212-687-6363
                                        Facsimile:  212-687-0555

                   with copies to:      Parker Chapin LLP
                                        405 Lexington Avenue
                                        New York, New York 10174
                                        Attn:  Martin E. Weisberg, Esq.
                                        Telephone: (212) 704-6000
                                        Facsimile: (212) 704-6288

                   If to the Holder:    Peter Lusk
                                        99 Park Avenue, Suite 2230
                                        New York, New York 10016

                                        Telephone:  (212) 986-6808
                                        Facsimile:  (212) 856-9847

                   with copies to:      ________________________
                                        ________________________
                                        ________________________
                                        Attn:
                                        Telephone:
                                        Facsimile:

or to such other  address as any party may specify by notice  given to the other
party in accordance with this Section 12(c).

                                      -8-
<PAGE>

          (d) Governing  Law. This Warrant shall be governed by and construed in
accordance  with the  internal  laws of the  State of New York,  without  giving
effect to its conflict of law provisions.

          (e) Interpretation. The article and section headings contained in this
Warrant are solely for the purpose of reference, are not part of this Warrant of
the  parties and shall not in any way affect the  meaning or  interpretation  of
this Warrant.

          (f) Entire  Agreement.  This Warrant contains the entire agreement and
understanding of the parties hereto in respect of the transactions  contemplated
by  this  Warrant.  There  are  no  restrictions,   promises,   representations,
warranties,  covenants or undertakings,  other than those expressly set forth or
referred to herein.  This Warrant  supersedes  all prior and/or  contemporaneous
agreements  and  understandings   between  the  parties  with  respect  to  such
transactions.

          (g) Severability.  The parties agree that should any provision of this
Warrant be held to be invalid,  illegal or  unenforceable  in any  jurisdiction,
that holding shall be effective only to the extent of such invalidity, illegally
or unenforceability  without  invalidating or rendering illegal or unenforceable
the  remaining  provisions  hereof,  and  any  such  invalidity,   illegally  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.  It is the intent of the
parties that the Warrant be fully  enforced to the fullest  extent  permitted by
applicable law.

          (h) Amendment and Waiver.  This Warrant and any provisions  hereof may
be amended, modified or supplemented,  changed, waived, discharged or terminated
only by an instrument in writing signed by the Company and the Holder.

          IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

DATED: _________  ____, 2000        GLOBAL SOURCES LIMITED

                                    By: _________________________________
                                    Name: _______________________________
                                    Title:  _____________________________

                                      -9-
<PAGE>

                               NOTICE OF EXERCISE

To:   GLOBAL SOURCES LIMITED

          (1) The  undersigned  hereby  elects to  purchase  ________  shares of
Common Stock, par value $0.001 per shares (the "Common Stock") of GLOBAL SOURCES
LIMITED  pursuant to the terms of the  attached  Warrant,  and tenders  herewith
payment of the exercise  price in full,  together with all  applicable  transfer
taxes, if any.

          (2) Please  issue a  certificate  or  certificates  representing  said
shares of Common Stock in the name of the  undersigned  or in such other name as
is specified below:

                  -------------------------------
                  (Name)

                  -------------------------------
                  (Address)

                  -------------------------------

          (3) The shares of Common  Stock being  issued in  connection  with the
exercise of the attached  Warrant are [not] being issued in connection  with the
sale of the Common Stock.

Dated:

                                          ------------------------------
                                          Signature

                                       -1-
<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

          FOR VALUE  RECEIVED,  the foregoing  Warrant and all rights  evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

________________________________________________________________

                                          Dated:  ______________, 20___

                  Holder's Signature:     _____________________________

                  Holder's Address:       _____________________________

                                          _____________________________

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of  corporations  and  those  acting  in an  fiduciary  or other  representative
capacity  should  file  proper  evidence of  authority  to assign the  foregoing
Warrant.

                                       -2-EMPLOYMENT AGREEMENT
                              --------------------

      EMPLOYMENT AGREEMENT (the "Agreement") dated as of the 3rd day of January,
2000,  by  and  between  GLOBAL  SOURCES  LTD.,  a  Delaware   corporation  (the
"Corporation"),  having its principal  place of business  at 342 Madison Avenue,
Suite 1500, New York, New York 10173, and FRANK PALMA ("Executive"), residing at
659 Mountain Road, Kinnelon, New Jersey 07405.

      WHEREAS,  Executive and the Corporation had previously  agreed to terms of
an Executive's  employment with the corporation,  said terms and said employment
to go into  effect only after the  closing of the  contemplated  purchase by the
Corporation  of  certain  of the  New  Jersey  assets  of  Goodrich  &  Sherwood
Associates, Inc. ("G&S"), Executive's former employer;

      WHEREAS,  the  Corporation  as of this date has not purchased the said New
Jersey assets of G&S and has recently discontinued  negotiations to purchase the
said  assets,  and thus  Executive's  employment  with the  Corporation  has not
commenced;

      WHEREAS,  G&S  has constructively  terminated  the employment of Executive
who is no longer employed by G&S ; and

      WHEREAS,  the  Corporation  desires  to employ  Executive,  and  Executive
desires  to be  employed  by the  Corporation,  upon the  terms  and  conditions
hereinafter set forth.

      IT IS, THEREFORE, AGREED:

     1.  Employment.  The  Corporation  hereby  employs  Executive and Executive
hereby accepts  employment  from the  Corporation  upon the terms and conditions
herein set forth.

     2. Duties.  During the term of employment  hereunder,  Executive shall hold
the position of Executive  Vice  President  and Chief  Operating  Officer of the
Corporation and shall have and perform such duties and  responsibilities  as are
customarily   attendant   to  such   position   and  such   other   duties   and
responsibilities  commensurate  with his position as are designated from time to
time by the Board of  Directors of the  Corporation.  In carrying out his duties
and  responsibilities  hereunder,  Executive  shall abide by all policies of the
Corporation  applicable  to  senior  management  employees  to the  extent  such
policies have been previously provided in writing to Executive, and shall devote
his full-time efforts, attention,  energies and skills to the performance of his
duties  and  responsibilities  for and on behalf of the  Corporation;  provided,
however, that Executive may engage in charitable,  educational, religious, civic
and  similar  types of  activities  (all of which shall be deemed to benefit the
Corporation)  to the extent that such  activities do not inhibit or prohibit the
performance of his duties  hereunder or inhibit or conflict with the business of
the Corporation;  and, provided further,  however,  that nothing in this Section
shall be construed to prevent Executive from, personally and for his own account
or the  account  of  members  of his  family,  managing  his or  their  personal
investments, provided that such activity does not interfere with the performance
of his duties and responsibilities under this Agreement.

     3. Employment Term.  Executive's  employment  hereunder shall be for a term
commencing  on the  3rd day of  January,  2000  (the  "Commencement  Date")  and
terminating on

                                      -1-
<PAGE>

December  31;  2002  (the  "Employment  Term"),  unless  terminated  earlier  as
hereinafter  provided.  If Executive is employed by the  Corporation on December
31,  2002,  the  Corporation  agrees  that it will offer to  continue  to employ
Executive on a part-time  basis with  mutually  agreed duties for such period of
time and on such terms and conditions as may be mutually agreed.

     4. Stock Grant.

          (a) In  consideration  of Executive's  acceptance of employment  under
this Agreement, Corporation is issuing to Executive on and as of the date hereof
Four Hundred Fifty  Thousand  (450,000)  shares of the common  stock,  par value
$_______, of Corporation (the "Shares"), having an agreed value of $1.20 each.

          (b) In  connection  with the  issuance  of the  Shares  to  Executive,
Executive acknowledges and agrees as follows:

               (i) The issuance of the shares to Executive intended to be exempt
from  registration  under the  Securities  Act of 1933,  as amended (the "Act"),
based in part on the agreements of Executive set forth in this Agreement;

               (ii) Executive is acquiring the Shares solely for his own account
for investment and not with a view to resale or distribution  thereof,  in whole
or in part. Executive has no agreement or arrangement with any person to sell or
transfer  or  otherwise  dispose  of all or any  part of the  Shares  and has no
present plans to enter into any such agreement or arrangement.

               (iii)  Executive has such  knowledge and experience in financial,
tax, and  business  matters so as to enable him to evaluate the merits and risks
of acceptance of the Shares pursuant to this Agreement.

               (iv) Executive recognizes that he must bear the economic risks of
an  investment in Shares  indefinitely,  because none of the Shares may be sold,
transferred,  hypothecated  or otherwise  disposed of unless they are registered
under the Act and  applicable  state  securities  laws or an exemption from such
registration  is  available.   Legends  shall  be  placed  on  the  certificates
representing  the Shares  stating that the Shares  represented  thereby have not
been  registered  under  the  Act  or  applicable  state  securities  laws,  and
appropriate notations thereof will be made in Corporation's stock books.

               (v)  Executive  has adequate  means of providing  for his current
financial needs and foreseeable  contingencies  and has no need for liquidity in
the Shares for an indefinite period of time.

          (c) In the  event  that at any time or  times  the  Corporation  shall
determine to register  any shares of common  stock,  par value  $________ of the
Corporation (the "Common Stock") or securities convertible; into or exchangeable
or  exercisable  for  shares of Common  Stock  under the  Securities  Act or any
similar  federal  statute,  whether  in  connection  with a public  offering  of
securities  by the  Corporation  (a "primary  offering"),  a public  offering of
securities by selling stockholders of the Corporation (a "secondary  offering"),
or both, but not in connection with a registration  effected solely to implement
a security-based  compensation plan or a transaction to which Rule 145 under the
Securities  Act or any  successor  provision is applicable

                                      -2-
<PAGE>

or  which  is  otherwise  effected  on Form S-4 or any  successor  thereto,  the
Corporation  will  promptly  give  written  notice  thereof  to  Executive.   In
connection with any such registration, if within thirty (30) days after the date
of such notice,  Executive  requests the  inclusion of some or all of the Shares
owned by  Executive  in such  registration,  the  Corporation  will use its best
efforts to effect the registration  under the Securities Act of all Shares which
Executive may request.

          (d) The  Corporation  agrees that in the event  Executive is unable to
sell One Hundred  Thousand  (100,000)  of the Shares prior to March 15, 2001 and
realize net proceeds from such sale in an aggregate amount sufficient to satisfy
Executive's federal and state income tax obligations attributable to Executive's
receipt of the grant pursuant to Section 4(a) of the Four Hundred Fifty Thousand
(450,000) Shares (the "Tax  Shortfall"),  the Corporation shall pay to Executive
prior to April 15, 2001 an aggregate amount equal to the Tax Shortfall plus such
amount as is  necessary to cover the  additional  federal and state income taxes
incurred by  Executive  by virtue of his receipt of the Tax  Shortfall.  For the
purposes of this provision,  Executive's  combined  federal and state income tax
rate  shall be  deemed to be  Forty-Five  percent  (45%).  If  Executive  is not
required to sell all One Hundred Thousand (100,000) of the Shares to satisfy his
federal and state income tax  obligations  with respect to the grant pursuant to
Section 4(a) above,  the  Corporation,  at its option on at least ten (10) days'
prior  written  notice,  may  redeem at a price of One Cent (it) per Share  such
portion of the said One Hundred  Thousand  (100,000)  Shares as Executive is not
required to sell.

     5. Compensation and Other Benefits.  For all services rendered by Executive
hereunder  during the Employment  Term, he shall be paid by the  Corporation the
following compensation and be entitled to the following benefits:

          5.1 Base Salary.  An annualized base salary of Three Hundred  Thousand
Dollars ($300,000) (the "Base Salary") payable in equal  installments,  not less
often than every two weeks,  in accordance  with the  Corporation's  policy from
time to time in effect for payment of salary to senior management employees. The
Base Salary shall be reviewed at least  annually by the  Corporation's  Board of
Directors, at which time the Corporation's Board of Directors may (but shall not
be obligated to) increase the Base Salary.

          5.2  Guaranteed  Bonuses.  A guaranteed  minimum  bonus of One Hundred
Fifty  Thousand  Dollars  ($150,000)  for each full  calendar  year  within  the
Employment  Term,  including  the year 2000,  payable  with respect to each such
calendar  year within  forty-five  (45) days after the last day of the preceding
calendar year.

          5.3 Stock Options.  Concurrently  with the execution of this Agreement
and effective as of the date hereof,  the  Corporation  is granting to Executive
stock options to purchase One Hundred  Fifty  Thousand  (150,000)  Shares of the
Corporation at the price of $2.00 per share pursuant to a Stock Option Agreement
in the form annexed hereto as Exhibit A.

          5.4 Other Employment Benefits.  Executive (and, where applicable,  his
dependents and beneficiaries) shall also be entitled to the following benefits:

          (a) four (4) weeks of paid vacation per calendar year;

          (b) paid holidays as provided to the Corporation's other employees;

                                      -3-
<PAGE>

          (c)  participation  in all  employee  benefit  plans to  which  senior
management employees of the Corporation (and, where applicable, their dependents
and beneficiaries) are entitled during the Employment Term,  including,  without
limitation,  medical,  dental and health insurance and welfare plans, disability
insurance plans,  life insurance  plans,  bonus plans,  incentive  plans,  stock
plans, stock option plans, pension and profit sharing plans and other present or
equivalent  successor  plans and practices of the  Corporation  for which senior
management employees (and, where applicable, their dependents and beneficiaries)
are eligible;

          (d)  reimbursement  of Executive's club membership dues and fees in an
aggregate amount not exceeding  Fifteen Thousand Dollars  ($15,000) per calendar
year;

          (e) an automobile  allowance of One Thousand Two Hundred Fifty Dollars
($1,250) per month;

          (f) payment of the disability  insurance and life insurance  premiums.
as provided in Sections 5.5 and 5.6 hereof; and

          (g) other fringe  benefits as are made  available from time to time by
the Corporation to senior management employees.

          5.5  Disability  Insurance  Premiums.  Executive  and the  Corporation
acknowledge  that there has heretofore  been issued and is presently in effect a
non-cancelable  guaranteed renewable disability income policy covering Executive
issued by The New England Mutual Life Insurance Company of Massachusetts, Policy
No.  191D2779000,  which policy provides for a maximum monthly benefit of $8,000
until age 67  payable  to  Executive.  Corporation  agrees  to make the  premium
payments with respect to such policy to The New England Life  Insurance  Company
of Massachusetts on Executive's behalf as they become due.

          5.6 Life Insurance Premiums.  Executive and the Corporation agree that
Executive shall apply for a variable universal life insurance policy on his life
in the  face  amount  of  $500,000  to be  issued  by a life  insurance  company
designated by  Executive,  which policy shall  designate  Executive as the owner
thereof and shall also name such beneficiary or beneficiaries as Executive shall
designate,  but the  premium  payments  with  respect to which  shall be made by
Corporation on Executive's behalf as they become due.

          5.7 Business Expenses.  During the Employment Term, Executive shall be
reimbursed in accordance with the policies of the Corporation  from time to time
in effect for all reasonable and necessary  expenses duly incurred in connection
with the duties to be  performed  and the  services to be rendered by  Executive
hereunder,  upon submission of itemized  expense  statements and copies of bills
relating  thereto in the manner and at the times Generally  applicable to senior
management employees of the Corporation.

          6. Termination.

          (a)  Executive's  employment  under this Agreement shall be terminated
upon  Executive's  death or legal  incapacity.  In such event,  Executive or his
representative  shall be entitled  to (i) any unpaid  Base  Salary and  benefits
earned through the end of the month during which such  termination  occurs,  and
(ii) a pro rata portion of the  guaranteed  bonus payable for

                                      -4-
<PAGE>

such calendar  year pursuant to Section 5.2 hereof  through the end of the month
during which such termination occurs.

          (b)  The  Corporation  may,  at  its  option,   terminate  Executive's
employment under this Agreement if Executive shall suffer a Permanent Disability
(as hereinafter defined). In such event,  Executive shall be entitled to (i) any
unpaid Base Salary and benefits earned through the end of the month during which
such  termination  occurs,  and (ii) a pro rata portion of the guaranteed  bonus
payable for such calendar year pursuant to Section 5.2 hereof through the end of
the month during which such termination  occurs. For purposes of this Agreement,
the term Permanent  Disability shall mean permanently  disabled so as to qualify
for full benefits under the disability  income  insurance  policy referred to in
Section 5.5 hereof; provided,  however, that if such disability insurance policy
is not in effect on the date of termination, Permanent Disability shall mean the
inability of Executive (based on medical evidence reasonably satisfactory to the
Board of  Directors  of the  Corporation)  to perform his duties  hereunder on a
full-time  basis for a period or periods  aggregating  one hundred  eighty (180)
days  during any  consecutive  twelve  (12)  months or any period of ninety (90)
consecutive days due to illness or injury of a physical or mental nature.

          (c) The  Corporation  may, at its option,  terminate  the  Executive's
employment  hereunder  for  Cause.  Cause,  as used  herein,  shall mean (i) the
willful  failure of Executive to carry out one or more of his designated  duties
or responsibilities  set forth in Section 2 hereof after written notice from the
Corporation of his failure to do so and the continuance of such failure for more
than thirty (30) days after  receipt by Executive of such written  notice,  (ii)
theft or fraud by Executive  involving  the  Corporation  or the  conviction  of
Executive of a felony,  or (iii) the willful gross misconduct of Executive which
causes substantial economic or reputation harm to the Corporation.  In the event
of such  termination  for Cause,  the  employment of Executive  hereunder  shall
terminate  immediately and Executive shall receive any unpaid Base Salary earned
through the date of termination but shall be entitled to no further compensation
or benefits.

     7.  Finder's  Fees.  Executive  and the  Corporation  acknowledge  that the
Corporation is seeking to expand by acquiring other entities that are engaged in
the executive  search and/or  executive  placement  businesses.  The Corporation
acknowledges  that  Executive has extensive  experience in such  businesses  and
knows the owners of entities engaged in such business and, therefore,  may be in
a position to introduce  candidates  for possible  purchase by the  Corporation.
Accordingly,  the  Corporation  and  Executive  agree  that in the event that an
entity is  introduced  to the  Corporation  by Executive  and  subsequently  the
Corporation and/or one or more affiliates of the Corporation acquire such entity
either by merger,  by purchase of substantially all of its assets or by purchase
of a majority or more of its capital  stock,  the  Corporation  agrees to pay to
Executive  when the  transaction is closed a finder's fee equal to three percent
(3%) of the purchase  price  (defined to include all cash or securities  paid to
the acquired  entity's  shareholders or to the acquired entity,  as applicable).
Such  finder's fee will be determined as of the closing date and will be payable
on the closing date. If the purchase  price or a portion  thereof is in the form
of debt  or  equity  securities,  then  the  amount  of the  purchase  price  or
applicable  portion  thereof  will be  based on the  fair  market  value of such
securities  determined  as of the closing  date.  This  provision  shall survive
termination of Executive's employment pursuant to this Agreement.

                                      -5-
<PAGE>

     8. Confidential Information.

          (a)  Executive  covenants  and agrees  that he shall not,  directly or
indirectly, during the Employment Term or thereafter, communicate or divulge to,
or use for the  benefit of himself or any other  person,  firm,  association  or
corporation, without the prior written consent of the Corporation, any secret or
confidential  knowledge  or  secret  or  confidential   information  pertaining,
directly  or  indirectly,  to any  aspect  of the  business  or  affairs  of the
Corporation  or the  products,  employees,  customers or financial  condition or
prospects  thereof,  including,  but not limited to, any  confidential  methods,
inventions,  devices,  processes,  lists of customers and financial  information
relating  to the  business  of the  Corporation,  except to the extent that such
knowledge or  information  can be shown to have been (i)  previously  known on a
nonconfidential basis by Executive, (ii) generally known in the trade through no
fault or act of Executive,  or (iii) later  lawfully  acquired by Executive from
sources  other than the  Corporation,  and  further  except that  Executive  may
disclose  such  information  under court order and in order to pursue his rights
under this  Agreement  provided  that he shall have given at least  twenty  (20)
days' prior written notice to the  Corporation  in either event.  Such secret or
confidential  information  shall remain the sole and  exclusive  property of the
Corporation and, upon termination of this Agreement, Executive shall immediately
thereupon  return  all such  information  in his  possession  or  control to the
Corporation.

          (b) Executive hereby  acknowledges that irreparable  injury may result
to the  Corporation  in the event of a breach of the  terms  and  conditions  of
Section 8(a) of this  Agreement to be performed or observed by him, which may be
difficult to ascertain, and that the award of damages may not be adequate relief
to the Corporation. Executive, therefore, agrees that in the event of his breach
of any of such terms or conditions of this Agreement to be performed or observed
by him, the Corporation  shall have the right, in addition to all other remedies
available in the event of a breach of this  Agreement,  to  injunctive  or other
equitable relief against Executive.

     9.  Indemnification.   The  Corporation  acknowledges  that  Executive  was
recently  employed as Senior Vice  President of Goodrich & Sherwood  Associates,
Inc.  ("G&S")  pursuant to a letter  agreement  dated December 19, 1996 and that
Executive's  employment with G&S has terminated.  The Corporation agrees that in
the event G&S  asserts  any claims  against  Executive  and/or  commences  legal
proceedings against Executive relating to Executive's employment with G&S and/or
the  termination  of  Executive's  employment  with G&S, the  Corporation  shall
indemnify and hold Executive  harmless from and against any and all liabilities,
losses,  damages, costs or expenses (including,  without limitation,  attorneys'
fees and expenses, court costs and all other out-of-pocket expenses) directly or
indirectly  incurred by Executive in defending  against such claims and/or legal
proceedings and any amounts incurred by Executive in satisfaction of settlements
or judgments  against  Executive.  The Corporation  shall pay such  liabilities,
losses,  damages,  costs or expenses to or for the account of  Executive  as and
when requested in writing by Executive. This provision shall survive termination
of Executive's employment pursuant to this Agreement.

     10. Unpaid  Commissions and Expenses.  The Corporation  acknowledges  that,
pursuant  to  Executive's  letter  agreement  with G&S  referred to in Section 9
hereof,  Executive presently is entitled to certain commissions and expenses and
will be entitled to  additional

                                      -6-
<PAGE>

commissions  and expenses as of the date of the  termination  of his  employment
with  G&S.  The  Corporation  agrees  that in the  event  G&S  does  not pay all
commissions  and  expenses  to which  Executive  is  entitled  by not later than
January  31,  2000,  the  Corporation  will pay to  Executive  all  such  unpaid
commissions  and  expenses  up to a  maximum  of  Twenty-Five  Thousand  Dollars
($25,000).  This provision shall survive  termination of Executive's  employment
pursuant to this Agreement.

     11.  Withholding.  Anything  herein to the  contrary  notwithstanding,  all
payments  required  to be  made  by the  Corporation  under  this  Agreement  to
Executive or his estate or beneficiaries  shall be subject to the withholding of
such  amounts,  if any,  relating  to tax and other  payroll  deductions  as the
Corporation  may  reasonably  determine  it  should  withhold  pursuant  to  any
applicable law or regulation.

     12.  Noncompetition.  (a) Executive  shall be prohibited from disclosing to
anyone (except to the extent reasonably  necessary to perform Executive's duties
hereunder) any  confidential  information  concerning the business or affairs of
the Corporation or the Corporation's  subsidiaries or affiliates which Executive
may have  acquired in the course of and as incident to his  employment  or prior
dealings with the Corporation or the  Corporation's  subsidiaries or affiliates,
including,  without  limitation,  client lists,  business or trade  secrets,  or
methods or techniques used by the Corporation or the Corporation's  subsidiaries
or affiliates in or about its business.  The obligation in this Subsection 12(a)
survives the expiration or earlier termination of this Agreement.

          (b) During the Term of this  Agreement and for a period of twenty-four
(24) months after the expiration or earlier termination  hereof,  Executive will
not:

               (i) compete  with the  Corporation  for business  with  customers
and/or clients that are or have been clients or customers of the  Corporation or
its  subsidiaries  within the four (4) months  preceding  the date the Executive
leaves the Corporation; or

               (ii)  influence  or  attempt to  influence  any  employee  of the
Corporation or the Corporation's  subsidiaries or affiliates to terminate his or
her  employment  with  the  Corporation  or the  Corporation's  subsidiaries  or
affiliates.

          The  obligation in this  Subsection 12 (b) survives the  expiration or
earlier termination of this Agreement.  In the event that the restrictive period
provided  in this  Section  12(b) is  determined  to be too long by any court or
other body having  jurisdiction  over any dispute  between the parties over such
issue whose decision is binding on the parties hereto,  this Section 12(b) shall
be valid and enforceable for the period determined to be so enforceable.

     13.  Notices.  All  notices,  requests,  demands  and other  communications
hereunder  shall be in  writing  and  shall be  given  to the  parties  at their
respective addresses set forth below and shall be sent by (a) hand delivery, (b)
certified mail,  return receipt  requested,  postage prepaid,  (c), a recognized
overnight delivery service, or (d) telecopy or other means of facsimile. Notices
sent by hand delivery  shall be deemed  received  when  delivered to the address
and/or  person set forth below;  notices sent by certified  mail shall be deemed
received  when  accepted;

                                      -7-
<PAGE>

notices  sent by  overnight  delivery  service  shall be  deemed  received  when
delivered and notices sent by telecopy shall be deemed  received upon receipt of
confirmation of dispatch.

          (a) To Executive:

              Frank Palma
              659 Mountain Road
              Kinnelon, New Jersey 07405
              Telecopy No.  (973) 492-5639

          (b) To Corporation:

              Global Sources Ltd.
              342 Madison Avenue, Suite 1500
              New York, New York 10173
              Attention: James Strupp, Chairman
              Telecopy: (973) 316-1594

or to such  other  address  or  telecopy  number as any party may  designate  by
written notice in the aforesaid manner.

     14. Modification. No modification, amendment or waiver of the provisions of
this  Agreement  shall be  effective  unless in writing  specifically  referring
hereto and signed by all parties.

     15. Waiver of Breach.  The waiver by any party of a breach of any provision
of this Agreement by another party shall not operate or be construed as a waiver
of any subsequent breach.

     16. Assignability and Binding Effect. Executive shall not assign any of his
rights or delegate the performance of any of his obligations  hereunder  without
the prior written  consent of the  Corporation.  However,  the  Corporation  may
assign any of its rights and delegate the  performance of any of its obligations
hereunder to any of its successors,  assigns or successors-in-interest.  Subject
to the  provisions of the preceding  sentences,  all the terms of this Agreement
shall be binding  upon and shall  inure to the  benefit of the parties and their
legal representatives, heirs, successors and assigns.

     17.  Governing Law. This Agreement and the rights of the parties  hereunder
shall be governed by and  interpreted in accordance  with the internal laws, and
not the conflicts-of-laws  rules, Of the State of New York. The unenforceability
or  invalidity  of any  provisions  of  this  Agreement  shall  not  affect  the
enforceability or validity of the balance of this Agreement.

     18.  Captions.  Captions  contained  in this  Agreement  are  inserted  for
convenience  only and in no way  define,  limit or extend the scope or intent of
any provision of this Agreement.

     19.  Survival of  Covenants.  The  covenants  and other  provisions of this
Agreement  shall survive the termination of Executive's  employment  pursuant to
this Agreement.

                                      -8-
<PAGE>

     20.  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
counterparts and each of such counterparts shall for any purpose be deemed to be
an original,  and all such  counterparts  shall together  constitute one and the
same document.

     21. Entire  Agreement.  This  Agreement  constitutes  the entire  Agreement
between the parties with respect to the subject matter hereof.

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

                               GLOBAL SOURCES LTD.

                               By: /s/ James J. Strupp
                                  ----------------------------
                                  James J. Strupp
                                  Chairman

                                  /s/ Frank Palma
                                  ----------------------------
                                  FRANK PALMA

                                      -9-

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