1. Definitions and Interpretation
1.1 Definitions
      In this Transfer Contract, unless the context otherwise requires ,the following terms or expressions shall have the following meanings:
      “Agreed Form” means any document the form and contents of which have been agreed by the Parties and which has been initialed by the Parties on the Execution Date for identification purpose only.
      “Applicable Laws ” means any laws , regulations ,administrative regulations , rules, notices ,and other legislative , executive or judicial decisions or pronouncements of the PRC which are publicly promulgated and in force for the time being.
      “Approvals Letter” means the application letter to the Approval Authority requesting its approval in relation to the transfer of Equity interest, this Transfer Contract and Transaction Documents.
      “Approvals” means licenses ,consents , authorizations , orders, warrants , confirmations ,permissions, certificates, approvals and authorities issued by the relevant PRC authorities.
      “Approval Authority” means Ninghai County Foreign Trade and Economy Bureau and /or any other competent authority in the PRC.
      “Approval Date” shall mean the date on which the transfer of Equity Interest has been approved by the Approval Authority , as evidenced in the revised certificate of approval issued by the Approval Authority.
      “Audited Accounts” means the 2005 accounts of the Company audited by a qualified Certified Public Accountants firm.
      “Audited Accounts Date “ means the date on which the auditing reports in connection with the Audited Accounts are issued by the Certified Public Accountants firm.
      “Balance Sheet Date” means December 31,2005
      “Business Day “means a day on which banks are open for business in the PRC and Germany (excluding Saturdays, Sundays and public holidays).
      “Board Resolutions” means the resolutions passed unanimously by the respective Boards of Directors of the Transferor, Transferee and the Company approving the transfer of the Equity Interest , this Transfer Contract and the Transaction Documents.
      “China” or “PRC” shall mean the People’s Republic of China , excluding ,for the purposes of this Transfer Contract only , the Hong Kong and Macau Special Administrative Regions and Taiwan.
      “Encumbrance” means any claim, charge, mortgage, security, lien, option, equity, power of sale , hypothecation, retention of title , right of pre-emption, right of first refusal, other third party rights or security inerest of any kind.
      “Establishment Date” means the date on which the Company was issued its original PRC Business License.
      “Execution Date” shall mean the date of execution of this Transfer Contract and the Transaction Documents, whichever is the last to occur.
      “Intellectual Property Rights” or “IPR” means any and all rights in any invention, discovery, improvement, utility, model, copyrightable work, industrial design or mask work, algorithm, date structure, trade secrets or know-how , confidential information, or any idea having commercial value. IPR shall include any trademark, trade dress, trade name, domain name , or falling under the control of a single source. IPR shall include all rights of whatsoever nature in computer software and data, all intangible rights or privileges of a nature similar to any of the foregoing in every case in any part of the world and whether or not registered , and all rights in any applications and granted registrations for any of the foregoing rights.
      “EURO”means the lawful currency of the European Union.
      “Purchase Price “ means the price for the purchase of the Equity Interest as set forth in Article 3.1 hereof.
      “RMB”means the Renminbi yuan, the lawful currency of the PRC.
      “Registration Authority” means Ninghai County Industry and Commerce Administration Bureau and/or any other competent authority in the PRC.
      “Registration Date” shall mean the date on which the transfer of Equity Interest has been registered by the Registration Authority, as evidenced in the revised business license issued by the Registration Authority.
      “Taxation” means all forms of taxation whether direct or in direct and whether levied by reference to income, profits, gains, net wealth, asset values, turnover, added value or other reference and statutory, state, provincial, local governmental or municipal impositions, duties, contributions, rates and levies (including without limitation social security contributions and any other payroll taxes), whenever imposed (whether imposed by way of a withholding or deduction for or on account of tax or otherwise) and in respect of any person and all penalties, charges, costs and interest relating thereto.
      “Taxes” means any and all applicable tax and taxes (including, but not limited to any value added tax or sales tax , stamp or other duty, levy, impost, charge, fee, deduction, or withholding of any nature and howsoever called or described ) by whomsoever and wheresoever imposed, levied, collected or assessed.
      “Transaction Documents” means:
(a) the Amendment Agreements , including:
The Agreement on the Amendments to the Joint Venture Contract
The Agreement on the Amendments to the Articles of Association
The Supplementary Agreement to the “Equipment and Vehicle Lease Contract”
The Agreement on the Amendments to the “Land and Building Lease Contract”
(b) the Application Letter, and (c) the Board Resolutions.
      “Warranties” means the representations and warranties given by the Transferor to the Transferee , as set out in Schedule II.
1.2 Interpretation
The following rules of interpretation apply to this Transfer Contract unless the context requires otherwise:
(a) a reference to any contract, agreement or document includes a reference to that agreement, contract or document as amended, supplemented or replaced from time to time;
(b) a reference to an article or schedule is to an Article or a Schedule to this Transfer Contract;
(c) a reference to any person includes a body corporate, an unincorporated body or other entity;
(d) words in the singular in the English version includes its plural form and vice versa;
(e) words denoting a gender in the English version includes all genders; and (f) the clause headings are inserted for convenience only and shall in no way affect the construction of this Transfer Contract.
2. Transfer of Equity Interest
2.1 Sale and Purchase of Equity Interest
      The Transferor hereby agrees to sell to the Transferee, and the Transferee hereby agrees to purchase, from the Transferor, the Equity Interest, free from any Encumbrances, in accordance with the terms of this Transfer Contract and Applicable Laws.
2.2 Transfer of Rights
       Subject to the terms of this Transfer Contract, from and after the Registration Date, the Transferee shall assume in full all obligations and liabilities of the Transferor arising from or in connection with the Equity Interest, and the Transferee shall acquire all rights, benefits, and privileges including rights to receive distributions of profits in relation to the Equity interest.
3. Purchase Price
3.1 Purchase Price
      The Purchase Price shall be RMB 2,000,000 (in words: two million) Yuan. This amount shall constitute the total payment the transferee shall make to the transferor for the transfer of shares hereunder, including all government expenses, exchange costs and other expenses.
3.2 Payment Date and Currency
      The Purchase Price shall be paid by the Transferee to the Transferor in a Lump sum within fifteen (15) days of the Registration Date or the Audited Accounts Date, whichever is later.
      The Purchase Price shall be paid in EURO or another foreign currency according to the buying exchange rate between RMB and EURO or the currency in which the payment is made as published by the Bank of China on the date of payment.
3.3 Taxes
      The Transferor shall be responsible for payment of all Taxes on the Purchase Price in accordance with Applicable Laws.
4. Representations and Warranties
4.1 Mutual Representations and Warranties
      Each Party represents and warrants to the other Party that on the date hereof and as of the Approval Date:
(a) it is an independent legal person duly organized, validly existing and in good standing under the laws of the place of its establishment or incorporation;
(b) it has obtained all consents and approvals and taken all actions necessary for it to validly enter into and give effect to this Transfer Contract and it has full authority to enter into this Transfer Contract and to perform its obligations hereunder;
(c) its signatory to this Transfer Contract is either its legal representative or its duly authorized representative and, on signing this Transfer Contract , and from and after the Approval Date, the provisions of this Transfer Contract shall constitute valid, lawful and legally binding obligations of such Party;
(d) no steps have been taken or legal proceedings commenced or threatened against such Party for its winding-up or for it to be declared bankrupt or insolvent or for a liquidation committee or administrator to be appointed in respect of its assets or business;
(e) its execution of this Transfer Contract and its performance of its obligations hereunder: (i) will not violate any provision of its business license, articles of association or similar organizational documents; (ii) will not violate the provisions of any laws or regulations to which it is subject or any governmental authorization or approval; (iii) will not violate or result in a default or breach under any other contract or agreement to which it is a party or any unilateral commitment or undertaking which binds it or give any third party a right to take action against it ;and (iv) will not violate any judgment or arbitration award of any tribunal to which it is subject or the order or ruling of any government or regulatory body to whose jurisdiction it is subject;
(f) no lawsuit, arbitration or other legal or government proceeding is pending or , to its knowledge, threatened against it that would affect its ability to perform its obligations under this Transfer Contract; and (g) it has disclosed to the other Party all documents issued by any governmental department or regulatory body wherever located that may have a material adverse effect on its ability to fully perform its obligations under this Transfer Contract or on the ability of the Company to carry on the same business as previously after the transfer of the Equity Interest.
4.2 Repetition
      Each Party further represents and warrants to the other Party that each of the representation and warranties given by it under Article 4.1 shall be true in all respects as at the date of signature of this Transfer Contract, and on the Approval Date.
4.3 Consequences of Inaccuracy in Representations and Warranties
      If any of the representations and warranties of a Party are not accurate in all material respects on any date set out in Article 4.2 , the such Party shall be in material breach of this Transfer Contract.
4.4 Liability for Breach
      If the Transferor breaches any of the warranties , or if a Party breaches any of the representations or warranties given by it in Article 4.1 (or repeated in Article 4.2) , then in addition to any other remedies available to the other Party under this Transfer Contract or under Applicable Laws, it shall be liable to compensate the other Party against any losses, damages, costs, expenses, liabilities and claims that such Party or the Company may suffer as a result of such breach.
5. Warranties
5.1 Transferor’s Warranties
The Transferor warrants and represents to the Transferee in the terms set out in Schedule II.
5.2 Reliance on Warranties
The Transferor acknowledges that Transferee has entered into this Transfer Contract in reliance on , among other things, the Warranties. Each of the Warranties shall be construed as a separate Warranty and ( save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference to or inference from the terms of any other Warranty or any other terms of this Transfer Contract.
5.3 Repetition
      The Transferor further warrants and undertake to and with the Transferee that:
(a) the Warranties will be fulfilled and will be true and accurate in all respects and not misleading in any respect at the Approval Date and the Audited Accounts Date as if they had been given again at the Approval Date and the Audited Accounts Date ; and (b) if after the signing of this Transfer Contract, and before the Registration Date or the Audited Accounts Date ( whichever is late) any event shall occur or matter shall arise which results or may result in any of the Warranties being unfulfilled , untrue, misleading or incorrect in any respect at the Registration Date , the Transferor shall immediately notify the Transferee in writing fully thereof and the Transferor (at its own cost ) shall make any investigation concerning the event which the Transferee may require.
5.4 Release from Warranties
      The Warranties and all other provisions of this Transfer Contract insofar as the same not having been performed at the Registration Date shall not be extinguished as of the Registration Date, or by any other event or matter whatsoever, except by a specific and duly authorized written waiver or release by the Transferee.
5.5 Incorrect Warranties
      If prior to the Registration Date or the Audited Accounts Date (whichever is late ) it shall be found that any of the Warranties was when given or would be at the Registration Date or the Audited Accounts Date incorrect or inconsistent with any of them, and that incorrectness or inconsistency has a materially adverse effect on the financial position, revenue or viability of the Company, the Transferee may provide written notice to the Transferor that it wishes to terminated ,but without prejudice to the accrued rights of either Party. Failure to exercise this right shall not constitute a waiver of any other rights the Transfer Contract arising out of breach of any Warranty.
5.6 Liability for reach for Incorrect Warranties
      If any of the representations and warranties of the Transferor are not accurate in all material respects on any date set out in Article 5.3, the Transferor shall be in material breach of this Transfer Contract.
      If the Transferor breaches any of the Warranties listed in Schedule II, then in addition to any other remedies available to the Transferee under this Transfer Contract or under Applicable Laws, it shall be liable to compensate the Transferee against any losses, damages, costs, expenses, liabilities and claims that the Transferee of the Company may suffer as a result of such breach.
6. Obligations of the Parties
6.1 Application for Approval
6.1.1 Submission of Application
      Within seven(7) days from the Execution Date, the Parties shall procure that the Company submit this Transfer Contract, and all other Transaction Documents to the Approval Authority for approval.
6.1.2 Obtaining Approval
      The Parties shall use all reasonable efforts to procure that approval from the Approval Authority for this Transfer Contract and the Transaction Documents is obtained at the earliest possible opportunity. The Transferor shall procure that the Company delivers to the Transferee (as the case may be ):
(a) within one (1) Business Day of receipt ,a copy of all the relevant approvals and documents received from the Approval Authority;
(b) on or before the Execution Date , letters of resignation duly signed by one director of the Company appointed by the Transferor in the Agreed Form to take effect as at the Approval Date; and (c) within three (3) Business Days following the Approval Date or the date on which the Purchase Price is received by the Transferor, whichever is the later, the investment certificate originally issued to the Transferor by the Company.
6.1.3 Amendment to Application
      If the Approval Authority requires amendments to be made to this Transfer Contract or to any of the Transaction Documents as a condition to granting Approvals, then such amendments must be agreed in writing by the Parties. If either Party cannot accept such amendments, then it shall be entitled to serve notice on the other Party to terminate this Transfer Contract pursuant to Article 8(b) hereof at any time prior to the Approval Date. If the Approvals given by the Approval Authority impose additional conditions or changes to business scope of the Company that are not acceptable to the Transferee, the Transferor shall work together with the Transferee to resolve such issue, but if such issues cannot be resolved within 30days of the issue date of such Approval, the Transferee shall be entitled to serve notice on the Transferor requiring the Transferor to take such steps as are necessary to rescind the Approvals and return the Parties to the positions they were in prior to the Execution Date. If the Transferor fails to comply with the foregoing, it shall be in material breach of this Transfer Contract.
6.1.4 Re-issue of Documents
      Following the Approval Date, the Transferee shall be responsible for ensuring that the Company shall complete its re-registration and re-issue of all relevant investment certificates and other documents necessary or desirable to reflect the transfer of the Equity Interest to the Transferee. The Transferor shall provide its full cooperation and support as and when needed during the process.
6.1.5 Further Assurance
      Each Party shall perform all such acts and execute all such additional documents as may be required by the Approval Authority or Registration Authority or as may be reasonably necessary to achieve the objectives of this Transfer Contract.
6.2 Transferor’s Further Obligations
6.2.1 Replacement of Director
      With the Execution of this Contract the Transferor shall do or cause to do all the things necessary to make sure that upon the Registration Date the Company’s Board of Directors will consist of five members, including three members appointed by the Transferee and two members appointed by the Transferor ,and the Transferee shall have the right to appoint the board Chairman , including but not limited to :
(a) the signing of a dismissal letter in the Agreed Form for the dismissal of one director appointed by the Transferor from the board of directors of the Company;
(b) the signing of a resignation letter by the director to be dismissed by the Transferor, the signing of the resignation letter by the board chairman appointed by the Transferor for his resignation from the board chairman position;
(c) the signing of the board resolution regarding the restructuring of the board of directors by the current members appointed by the Transferor to the board of directors of the Company;
(d) the signing of the Amendment Agreement to reflect the new board structure;
(e) the submission of the aforementioned dismissal letter, the resignation letter, board resolution, Amendment Agreement and the Transferee’s appointment letter for the appointment of director(s) including the board chairman to the Company’s board of directors to the Approval Authority and Registration Authority for approval and registration.
6.2.2 Amendment to the “Land and Building lease Contract”
      The Transferor agrees that upon or immediately after the Execution Date, it shall cause Ningbo Cosuccess Electric Wire Co., Ltd. to enter into an Agreement on the Amendment to the Land and Building Lease Contract with the Company for the change of the lease term under this Lease Contract.
6.2.3 Supplementary Agreement to the “Equipment and Vehicle Lease Contract”
      The Transferor agrees that upon or immediately after the Execution Date, it shall cause Ningbo Cosuccess Electric Wire Co., Ltd. to enter into a Supplementary Agreement to the Equipment and Vehicle Lease Contract with the Company for the adjustment of the leased vehicles under this Lease Contract.
6.2.4 Joint Handling of Bank Accounts
      The Transferor agrees to take all necessary measures to ensure that after the Execution Date , any handling of any bank account of the Company ( including the establishment and change of signing rights, reserved bank signature/stamp, as well as the withdrawal , payment and transfer of money and etc.)shall be carried out by the General Manager of the Company together with the Vice General Manager nominated by the Transferee.
7. Breach of Contract
       Except as otherwise provided herein, if a Party (“breaching party”) fails to perform any of its material obligations under this Transfer Contract, then the other Party (“aggrieved party”) may at its option, in addition to its other rights under Article 8 or under Applicable Laws:
(a) give written notice to the breaching party, describing the nature and scope of the breach and demanding that the breaching party cure the breach at its cost within the time specified in the notice (being no more than a 30day period); and (b) if the breaching party fails to cure the breach within such specified period following delivery of such written notice, the aggrieved party may claim direct and foreseeable damages arising from the breach.
8. Termination
      Either Party has the right to terminate this Transfer Contract or cancel this Transfer Contract (if this Transfer Contract has not come into effect ) upon written notice to the other Party:
(a) in the event that the Approval Date does not occur within sixty (60) days following the Execution Date for any reason not attributable to the notifying Party;
(b) in the event that the Approval Authority requires amendments to be made to this Transfer Contract or to any other Transaction Documents which are not acceptable to either Party; or
(c) as otherwise separately agreed in writing by the Parties.
9. Governing Law and Dispute Resolution
9.1 Governing Law
      The validity, interpretation and performance of this Transfer Contract shall be governed by the laws , regulations and other stipulations of the People’s Republic of China.
9.2 Friendly Consultations
      In the event of any dispute, controversy or claim arising out of or relating to this Transfer Contract, or the breach, termination or invalidity hereof (“dispute”), the Parties shall attempt in the first instance to resolve such dispute through friendly consultations.
9.3 Choice of Arbitration
(a) In the event the dispute is not resolved through consultations within sixty (60) days after the date such consultations were first requested in writing by a Party ,then either Party may submit the dispute to China International Economy and Trade Arbitration Commission (“CIETAC”) Shanghai branch for arbitration in Shanghai in accordance with the Arbitration Rules of CIETAC then in force, (“Arbitration Rules”).
(b) The tribunal shall consist of three (3) arbitrators to be appointed by the Chairman of the CIETAC Shanghai Branch.
(c) The language of the arbitration shall be English.
9.4 Procedural Compliance
The Parties undertake:
(a) to comply strictly with the time limits specified in the Arbitration Rules for the taking of any step or the performance of any act in or in connection with any arbitration; and (b) to comply with and to carry out , in full and without delay, any procedural orders (including, without limitation to , any interim measures of protection ordered) or any award (interim or final ) made by the arbitral tribunal.
9.5 Enforcement of Award
Each of the Parties irrevocably:
(a) agrees that any arbitral award shall be final and binding;
(b) undertakes that it will execute and perform the arbitral award fully and without delay.; and (c) waives any rights which it may have to contest the validity of the arbitration agreement set forth in this Article or the jurisdiction of the relevant arbitration institution to hear and to determine any arbitration begun pursuant to this Article 9.
       When any dispute occurs and is the subject of friendly consultations or arbitration, the Parties shall continue to exercise their remaining respective rights and fulfill their remaining respective obligations under this Transfer contract, except in respect of those matters under dispute.
10. Confidentiality
10.1 Public Announcement
      Subject to Article 10.3, none of the Parties shall make any public announcement concerning this Transfer contract, the Transaction Documents or any other or subsequent documents executed by the Parties in relation to the transfer without the prior written approval (which approval shall not be unreasonably withheld ) of the Transferee (in the event that the Transferor wishes to make a public announcement) or of the Transferor (in the event that the Transferee wishes to make a public announcement).
10.2 Confidential Information
      Subject to Article 10.1 and 10.3, each Party shall treat as confidential and not disclose or use any information received or obtained as a result of entering into this Transfer Contract or any Transaction Document (or any agreement ,contract or document entered into pursuant to the foregoing) which relates to :
(a) the provisions of such Transfer Contract, Transaction Documents, or any such other agreements or contracts or documents entered into pursuant to the foregoing;
(b) the negotiations relating to such Transfer Contract, Transaction Documents or such other agreements, contracts or documents; or
(c) the business, financial or other affairs of the other Party (including future plans and targets).
10.3 Public Information
Articles 10.1 and 10.2 shall not prohibit disclosure or use of any information if and to the extent:
(a) the disclosure or use is required by Applicable Law, any regulatory body or the rules and regulations of any stock exchange or for the purpose of obtaining Approvals;
(b) the disclosure or use is required to vest the full benefit of this Transfer Contract or any Transaction Document in each Party;
(c) the disclosure or use is required for the purpose of any judicial proceedings arising out of this Transfer Contract or any Transaction Document or any other agreement , contract or document entered into under this Transfer Contract, or the disclosure is reasonably required to be made to a Taxation authority in connection with the Taxation affairs of the disclosing Party;
(d) the disclosure is made to professional advisers of either of the Parties provided such professional advisers comply with the provisions of Article 10.2 in respect of such information as if they were a party to this Transfer Contract;
(e) the information becomes publicly available (other than by breach of this Transfer Contract );
(f) the other Party has given prior written approval to the disclosure or use ; or
(g) the information is independently developed after the Approval Date,
      provided that prior to the disclosure or use of any information pursuant to Article 10.3(a), 10.3(b), 10.3(c) (except in the case of disclosure to the Taxation authority) or 10.3 (d), the Party concerned shall promptly notify the other Party of such requirement with a view to providing the other Party with a reasonable opportunity to contest such disclosure or use or otherwise to agree the timing and content of such disclosure or use .
11. Assignment
Neither of the Parties shall be entitled to assign the benefit of any provision of this Transfer Contract without the prior written approval of the other Party.
12. Notice
12.1 Contact Information
      All notices to be issued by either Party in relation to this Transfer Contract shall be written in English only and may be delivered to the following addresses or fax numbers (as the case may be):
12.2 Method of Delivery
      Any notice may be delivered by hand or sent by fax or prepaid post. Without prejudice to the foregoing, any notice shall conclusively be deemed to have been received on the next business Day in the place to which it is sent , if sent by fax ( subject to proof of uninterrupted completed transmission), or 72 hours from the time of posting (as per the postmark); if sent by post, or at the time of delivery ,if delivery by hand (subject to proof of delivery).
13. Miscellaneous
13.1 Costs, Expenses and Tax
Each Party shall bear its own costs and expenses incurred in connection
with the preparation, negotiation, execution and completion of the Transfer Contract. The Transferor acknowledges that the Purchase Price by the Transferee to the Transferor for the Equity Interest is inclusive of any tax payable to PRC tax authorities in respect of which the Transferee may have obligation to act as a withholding party.
13.2 Entire Agreement
      This Transfer Contract, the Transaction Documents and all the agreements and/or documents referred to herein or incorporated by express reference, constitute the entire agreement between the Parties with respect to the subject matter of this Transfer Contract, and supersede all previous oral and written agreements, contracts, understandings and communications of the Parties in respect of the subject matter of this Transfer Contract.
13.3 Severability
If any provision of this Transfer Contract is held to be invalid or unenforceable, then such provision shall (so far as it is invalid or unenforceable ) be given on effect and shall be deemed not to be included in this Transfer Contract but without invalidating any of the remaining provisions of this Transfer Contract. The Parties shall then use all reasonable endeavors to replace the invalid or unenforceable provisions by a valid and enforceable substitute provision the effect of which is as possible to the intended effect of the invalid or unenforceable provision.
13.4 Waiver
(a) No failure or delay by any Party in exercising any right or remedy provided by law under this Transfer Contract shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any other or further exercise of it or the exercise of any other right or remedy.
(b) The rights and remedies of the Parties under or pursuant to this Transfer Contract are cumulative, may be exercised as often as such Party considers appropriate and are in addition to its rights and remedies under Applicable Laws.
13.5 Effectiveness
      This Transfer Contract shall become effective on the Approval Date in accordance with Applicable Law.
13.6 Variation
No variation of this Transfer Contract shall be effective unless in writing and signed by or on behalf of each Party and approved by the Approval Authority.
13.7 Time of the Essence
      Any time, date or period referred to in any provision of this Transfer Contract may be extended by mutual agreement between the Parties but as regards any time , date or period originally fixed or so extended , time shall be of the essence.
13.8 Counterparts
      This Transfer Contract may be executed in any number of counterparts and by the Parties on separate counterparts, each of which is an original but all of which together constitute one and the same instrument.
13.9 Language
      This Transfer Contract shall be executed in both English and Chinese languages, and both language versions shall be equally authentic. In case of any discrepancy between the English version and the Chinese version. The English version shall prevail.
13.10 Number of Originals
      This Transfer Contract is made in four (4) originals in each language version. Each Party shall keep one original and the other two originals shall be submitted to the Approval Authority for examination and approval.
13.11 Stamp Duty
      Each Party shall bear responsibility for paying all stamp duty which is payable on original copies of this Transfer Contract held by it in accordance with Applicable Laws.
For and on behalf of For and on behalf of
_________________________________ ____________________________
Name: Name:
Position: Position: