Dates: the 21st day of October 2007

Exhibit 4.2

Dates: the 21^st day of October 2007

ALPHAPORT INTERNATIONAL LIMITED

(AS TRANSFEROR)

AND

HOME INNS & HOTELS MANAGEMENT (HONG KONG) LIMITED

(AS TRANSFEREE)

AND

LI ▇▇▇ ▇▇▇▇

(AS GUARANTOR IN FAVOR OF TRANSFEROR)

AND

HOME INNS & HOTELS MANAGEMENT INC

(AS SHAREHOLDER OF TRANSFEREE)

AGREEMENT

For the Sale and Purchase of

the entire issued share capital of

HONG KONG AI HOME HOTEL

INVESTMENT LIMITED

THIS AGREEMENT FOR THE SALE AND PURCHASE (this “Agreement”) is made this 21^st day of October 2007, by and among:

(A)	Alphaport International Limited, a corporation incorporated and existing pursuant to the laws of British Virgin Islands with its business address at ▇.▇.▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Virgin Islands(hereinafter referred to as “Party A”);

(B)	Home Inns & Hotels Management (Hong Kong) Limited, a corporation incorporated and existing pursuant to the laws of Hong Kong SAR with its business address at Room 2001, 20th Floor, The Centrium ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ (hereinafter referred to as “Party B”); and

(C)	Li ▇▇▇ ▇▇▇▇, a PRC citizen with the ID card number of 310106620622121 and residential address of ▇▇.▇▇, ▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ (hereinafter referred to as “Party C”)

(D)

Home Inns & Hotels Management Inc, a corporation incorporated and existing pursuant to the laws of Cayman Islands with its business address at c/o M&C Corporate Services Limited, ▇.▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Church Street, ▇▇▇▇▇▇ Town, Grand Cayman, Cayman Island, British West Indies (hereinafter referred to as “Party D”).

Hong Kong Ai Home Hotel Investment Limited is a company incorporated and existing under the laws of Hong Kong SAR with its legal address at ▇▇▇▇ ▇-▇, ▇▇/▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ (hereinafter referred to as the “Company”);

(Party A, Party B, Party C and Party D are collectively referred to as the “Parties” and each individually referred to as a “Party”).

WHEREAS :-

(a)	As at the date of this Agreement the Company has the authorized share capital of HK$1,000,000 which is divided into 1,000,000 ordinary shares of HK$1.00 each whilst 1 share has been fully paid. All details of the particulars of the Company are set out in Appendix A.

(b)

As at the date of this Agreement, the Company owns 80% of the equity of Shanghai Top Star Hotel Management Co., Ltd. (“Top Star”), and Top Star has set up 20 branches. Except for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ branches have been operating under the name of “Top Star Hotels”. As at the date of this Agreement, there are 2 branches (Shanghai West Yan’an Road Hotel and Changzhou Citizen Square Hotel) which have not obtained the business license. (The above 20 branches and the 2 hotels which have not obtained business licenses are collectively referred to as the “Branches”).

(c)

Currently, Shanghai Chuwen Investment Co., Ltd. (“Shanghai Chuwen”) owns 20% of the equity of Top Star. In addition, Chuwen owns 100% of the equity of Nanning Top Star Hotel Management Co., Ltd. (“Nanning Top Star”) and 95% of the equity of Chengdu Top Star Marrica Hotel Management Co., Ltd. (“Chengdu Top Star”), 90% of the equity of Shanghai Wenlai Investment Management Co., Ltd. (“Shanghai Wenlai”) and is going to establish Shanghai Guoding Top Star Hotel Co., Ltd. (“Guoding Top Star”) (the other four companies other than Shanghai Wenlai are referred to as “Subsidiaries”)

(d)	By 31st August 2007, Shanghai Chuwen has outstanding owing of RMB 220,600,000 to Shanghai Chang Bai Real Estate Development Co., Ltd.

(e)	Party A has greed to sell and Party B has agreed to purchase the entire 100% shares of the Company subject to the terms and conditions of this Agreement.

1.	PURPOSES AND DEFINITIONS

1.1	In this Agreement the following expressions shall, unless the context otherwise requires, have the following respective meanings :-


Expression		Meaning
“Accounts”		The audited accounts of the Company and its subsidiaries as at the Accounts Date comprising its balance sheet as at the Accounts Date, its consolidated income statement for the year ended the Accounts Date;

“Accounts Date”		31 August 2007;

“Business Day”		A day on which banks in Hong Kong are open for business (other than a Saturday or a Sunday or a public holiday);

“Companies Ordinance”		The Companies Ordinance (Cap.32 of the Laws of Hong Kong);

“Completion”		The first working day immediately after all the Conditions Precedent have been satisfied pursuant to Clauses 4 of this Agreement;

“Consideration “		The total consideration paid by Party B to Party A subject to the terms and conditions of this Agreement for the Sale Shares of the sum as stated in Clause 3 of this Agreement;

“Group Companies”		The Company and all its subsidiaries (not limited to Top Star and its branches);

“Hong Kong”		The Hong Kong Special Administrative Region of the People’s Republic of China;

“HK$”		Hong Kong dollar, the lawful currency of Hong Kong;


“PRC”		People of Republic China, excluding Taiwan, Hong Kong and Macau under this Agreement;

“person”		Includes person, companies, corporations or unincorporated bodies, joint venture or business firms which are not legal entities;

“Sale Shares”		Ordinary Shares of which face value of HK$1.00 of the Company comprise of 100% of the Companies’ issued share capital and all its incidental rights and interests;

“Taxation”		Tax imposed on the Company and its subsidiaries including: (a) All forms of taxation whenever and wherever created or imposed including but not limited to profit tax, levy, duty, custom duty and any other duties imposed by taxation authorities or financial authorities; (b) Tax being claimed or tax increased due to any cancellation of discount or exemption of taxation resulted by any law or regulations (for example policies of reduction in tax, tax written off or waived); (c) All costs, charges, interest, surcharges, holding over payment, penalties and expenses incidental to a liability to the form of taxation set out in (a) and (b) above;

“Warranties”		The representations, warranties and undertakings on the part of Party A to Party B set out in Clause 5 and Appendix G of this Agreement.

1.2	In this Agreement, words importing the singular number only shall include the plural number and vice versa; words importing any of the masculine, feminine and neuter gender only shall include the others of them.

1.3	The headings in this Agreement are for convenience only and shall not affect the contents of this Agreement.

1.4	“Parties of this Agreement” means parties of this Agreement.

1.5	Schedules and Appendix form the entire part of this Agreement.

1.6	All dates and times referred in this Agreement refers to dates and times of Hong Kong.

1.7

“Party A” and “Party B” referred in this Agreement shall include (where applicable and approved by relevant parties) their successors, assignors (notwithstanding resulted by any merge and acquisitions) or its representatives. All such person shall perform the duties and obligations of Party A and Party B under this Agreement, as they are the executor of this Agreement.

2.	TRANSFER OF EQUITY INTEREST

2.1	Transfer of Equity Interest

Subject to the terms and conditions of this Agreement, Party A shall sell / assign, and Party B shall purchase, all interest in the Sale Share on the date of Completion. (Collectively referred to as “Transfer”)

2.2

Ownership

Party B agrees to purchase all interest in the Sale Shares free from any mortgage, lien, claim, charge, encumbrance or third parties’ interest in any kind whatsoever, subject to the Warranties and undertakings of Party A in this Agreement.

2.3	The completion of the assignment of the Sale Shares shall take place from 1 November, 2007 and being settled as soon as possible.

3.	PURCHASE PRICE AND PAYMENT

3.1

Consideration for Sale Share

The consideration for the Sale Share shall be calculated according to the followings:

Purchase Price = Benchmark Price + Part of the Current Assets of Company by 31^st October 2007 (in this Agreement, all the financial data of the Company shall be inclusive of the information of Top Star) + Part of the Current Assets of Shanghai Chuwen by 31^stOctober 2007–Total liabilities incurred by the Company by 31^st October 2007 –Total liabilities incurred by Shanghai Chuwen by 31^st October 2007

The Benchmark Price shall be in the sum of USD equivalent to RMB 339,000,000 (the exchange rate between RMB and USD shall be the average of cash purchase price and selling price published by Bank of China on the date of this Agreement i.e. USD 100 = RMB 750.74). The amount of Current Assets and Total liabilities of / incurred by the Company and Shanghai Chuwen shall follow the amount as stated in the Due Diligence Report issued by the accountants of Party B, and the details of the above for the adjustment of Purchase Price are attached in Appendix C herein. Party B shall pay part of the Consideration to Party A in cash via telegraphic transfer and the remaining part of the Purchase Price shall be paid by means of common stocks of Party D.

The part of the Consideration in stock shall be equivalent to RMB 80,000,000. The value of the stocks shall be as per the average price calculated based on the average price (half of the sum of the then highest price and lowest price) of each business day during the period from 24^th August 2007 (US Time) to 19 October, 2007 (US Time) in NASDAQ. Such average price shall be USD 32.4966 and RMB 80,000,000, which shall be equal to 655,831 shares of Party D’s common share (or 327,916 ADS).

The Consideration is based on the Parties’ mutual understanding and agreed upon the net value of the Company subject to evaluation.

3.2

Payment of Consideration

A and B under this Clause shall be defined as follows:

A= current assets of the Company and Shanghai Chuwen to be increased- all the liabilities of the Company and Top Star to be decreased (the borrowing of RMB 8,500,000 from Party A and the bank loan of RMB 38,000,000 as well as the borrowing of RMB 125,600,000 from Shanghai Chang Bai Property Development Co., Ltd. shall be excluded from the liabilities)

B=RMB 13,900,000+A

The Consideration shall be paid by Party B to Party A in accordance with the followings:

(a)

After the share transfer of the Company and Shanghai Chuwen Investment Co., Ltd. (i.e. the shareholders transfer all its shares in Shanghai Chuwen Investment Co., Ltd. to Party B’s Affiliated company), once the accounting firm appointed by Party B has completed the auditing of the accounts till 31 October 2007 of the Company and Shanghai Chuwen by no later than 31 November 2007, Party B shall pay Party A the consideration in the sum in USD equivalent to the consideration amount of B and if B is a negative figure, then Party B shall deduct the amount equivalent to B from the Second Payment (this tranche of payment is referred to as “First Payment” hereunder).

(b)

After the completion of the First Payment and Party A, Top Star and Shanghai Chuwen Investment Co., Ltd. have settled the secured amount equivalent to RMB30,000,000 pursuant to Appendix D of this Agreement, and (i) if B is a positive figure, then Party B shall pay Party A the sum of USD equivalent to RMB 30,000,000; (ii) if B is a negative figure, the

Party B shall pay Party A the sum of USD equivalent to the sum of RMB 30,000,000 and B (this tranche of payment is referred to as “Second Payment”).

(c)

After the completion of the Second Payment, Party A, Top Star and Shanghai Chuwen shall settle the secured amount equivalent to RMB 80,000,000 pursuant to Appendix D of this Agreement (exclusive of the issues settled under 3.2 (b)), and after Party A submit its application to Party B together with presentation of the relevant documentary evidence, Party D shall issue the shares equivalent to RMB 80,000,000, which its value shall be calculated in accordance with the method stated in Clause 3.1. Party B shall ensure that such issued shares shall be transferred to Party A after its issuance. (Such issuance of common share is referred to as “Third Payment” hereunder);

(d)

After the completion of the Third Payment, Party A, Top Star and Shanghai Chuwen Investment Co., Ltd. shall settled all the matters pursuant to Appendix D (exclusive of the settled issues in 3.2 (b) and 3.2 (c)), and Party B shall, after Party A provides the written application and relevant documentary evidence to prove its settlement of each of the matters, pay the part of the Consideration equivalent to the accumulative secured amount not exceeding in the sum of USD equivalent to RMB 28,000,000, (such sum in USD equivalent to RMB 28,000,000 is referred to as “Fourth Payment” hereunder);

(e)

Within one year after the share transfer of Shanghai Chuwen Investment Co., Ltd. and the Company, Party B shall pay in the sum of USD equivalent to RMB 15,000,000, provided that Party A, Top Star and Shanghai Chuwen Investment Co., Ltd. have settled all the matters as set out in Appendix D. Notwithstanding of the aforementioned, the payment of the remaining portion shall be subject to the progress of the settlement of the account payables of the Company, Top Star and Shanghai Chuwen Investment Co., Ltd., of which such amount shall be based on the amount as stated in the audited account of the Company which is audited by the Transferee and dated 31^st October 2007. Before such payables are all being settled, the Transferee is entitled to hold the equivalent amount.

(f)

In the event that Party A, Top Star and Shanghai Chuwen Investment Co, Ltd. fails to settle the issues listed in Appendix D within the agreed due date, Party B is entitled to hold the secured amount.

[The amount to be paid shall be as per the agreement among the parties, and shall be as per the amount stated on the balance sheets of Party A, Top Star and Shanghai Chuwen Investment Co., Ltd. by 31^st October 2007.]

The bank account designated by Party A for receiving the Consideration is subject to the written notification from Party A to Party B.

Party A shall issue written acknowledgements accordingly to Party B upon the receipt of each payment respectively.

3.3

Repayment of the loan to Party A

Party B undertakes that the Company shall repay all the loans to Party A on the next working days after completion of the share subscription by the Company and Shanghai Chuwen.

3.4

Fees and Expenses

The Parties shall be responsible to pay any other taxes and fees that may be imposed in connection with the transaction contemplated hereby according to relevant laws and regulations under Hong Kong SAR and any other jurisdictions.

4.	Profit Distribution

Unless the context otherwise required, all the rights and obligations of the Company, Top Star and Shanghai Chuwen Investment Co., Ltd. created on or before 31^st October 2007 shall be borne by Party A while all the rights and obligations created after 31^st October 2007 shall be borne by Party B.

5.	Operation Hand Over

5.1

Party A shall hand over the operation power of the Company to Party B by 1st November 2007. Party A shall hand over such operation power to Party B in accordance with the handover checklist preset out in Appendix B. After the handover, Party B shall provide assistance for the continuous performance of matters as set out in Appendix D if necessary.

5.2	Documents Delivery

The Parties shall deliver the documents within 2 Business Days upon signing of this Agreement (“Delivery Date”) at Party B’s office or other places and time as agreed by Party A and Party B.

On Delivery Date, Party A and/or the Company shall deliver to Party B the followings :-

(a)

all valid share certificates in respect of the Sale Shares sealed and issued to Party B by the Company;

(b)

duly executed and valid bought and sold notes and instruments of transfer in favour of Party B and/or its nominee and all duly executed and valid documents incidental thereto in respect of the Share Shares;

(c)

certified copies of the minutes of board meetings, board resolutions or written resolutions of Party A approving and authorizing the execution and the completion of this Agreement and the transactions hereby contemplated;

(d)

confirmation letters of Party A and the Company confirming both Party A and the Company do not observe any Warranties of Party A and the Company were breached or contrary was found to the Warranties of Party A and the Company;

(e)

the written resignation of all directors and company secretaries of the Company effective on the date of Completion (the resignation of the directors shall in the format set out by s157D(3) of the Company Ordinance) with acknowledgement to the effect that they have no claim against the Company for compensation for whatsoever reasons;

(f)

certified copies of the minutes of board meetings, board resolutions or written resolutions of the Company in respect to the following matters:-

(i)

the consent and approval of the execution and performance (if required) of this Agreement;

(ii)

the approval of the written resignation pursuant to Clause 5.2(f) and the appointment of the persons nominated by Party B as the director of the Company; and

(iii)

[the approval of the alternation of the banking authorization of the Company or the approval of the cancellation of all bank accounts of the Company (if any)];

(g)

the company seal, the incorporation certificate, the business registration certificate, the Memorandum and Articles of Association and all statutory records and the account books of the Company;

(h)

cashier orders in favour of “Hong Kong SAR Government” prepared by each of Party A and Party B for the payment of half of the amount of ad valorem duty and half of the amount of stamp duty payable by each parties subject to the Sale Shares;

(i)

confirmation letters to the Hong Kong Inland Revenue Department by each of Party A and Party B, undertaking the payment of half of the amount of all supplementary stamp duty charged by the Hong Kong Inland Revenue Department subject to this Agreement;

(j)

confirmation letters by each of Party A and Party B, confirming the execution and exercise of this Agreement and the transactions hereby contemplated have acquired all third parties’ consents (if any), including but not limited to governing or administrative authorities of Hong Kong, PRC or any other jurisdictions;

(k)

all title deeds or documents (if any) in respect to the assets and properties hold by the Company;

(l)

written resignation of all legal representatives and directors of Top Star and its branches appointed by Party A, effective on the date of Completion together with written confirmations that they have no claim against the Company for compensation for whatsoever reasons;

(m)

evidences to show the compliance and/or performance and/or settlement of the matter required by Party B provided by the Company or Party A, and was satisfied by Party B.

5.3	Upon the fulfilment of the conditions set out in Clause 5.2, at the same time Party B shall deliver the followings to Party A on Completion:-

Certified copies of the minutes of board meetings, board resolutions or written resolutions of Party B approving and authorizing the execution and the Completion of this Agreement and the transactions hereby contemplated.

5.4	Further Delivery Procedures

Party A shall cooperate with Party B subject to the request of Party B to complete following replacement procedures, including but not limited to the payment of Party A’s share of stamp duty for transferring the Sale Shares and the replacement of all of the signatures and seals recorded with banks. If Party A fails to pay his share of stamp duty for transfer of the Sale Shares on or before 31 December 2007, Party B may withhold payment of the amount equivalent to the remaining balance of the Consideration payable by Party A pursuant to this Agreement.

5.5

Approval

Commencing from 1 November, 2007, Party A shall, together with Party B, make proper registration of this Agreement and make relevant updates to the Company registrar (including but not limited to the transfer of Sale Shares) in order to comply with the laws of Hong Kong SAR, as well as the relevant replacement registration for Shanghai Chuwen Investment Co., Ltd.. Party B shall cooperate with Party A in regards to those documents to be provided by Party B.

5.6	Compliance with Conditions

The Parties will use their respective best efforts to cause the conditions set forth in Clause 5 and Clause 6 and otherwise agreed by the Parties to be performed by each of them to be satisfied on or prior to the date of Completion, and shall not take any other action inconsistent with their respective obligations hereunder or that could hinder or delay the transactions contemplated by this Agreement.

5.7	The shareholders of Shanghai Chuwen Investment Co., Ltd. have transferred their all equity to the affiliates of Party B, and the business license of Shanghai Chuwen Investment Co., Ltd. has been updated accordingly.

5.8	Other conditions:

(a)

All directors and legal representatives (if any) of the Group Company appointed by Party A have been resigned and were replaced by persons appointed on behalf of Party B, unless such continuous appointment of such persons were agreed by Party;

(b)

The representations, warranties and undertakings as set out in Appendix G are true and accurate;

(c)

Party A has not breached any of its representations, warranties and undertakings made under this Agreement on and before the date of Completion;

Prior to the date of Completion, Party A has completed all the “other matters to be settled before the date of Completion” in Appendix D.

5.9.

Both Parties agreed that the date of Completion shall not be later than 31 December 2007. If there are any Conditions Precedent have not been fulfilled by 31 December 2007, Party B is entitled to terminate the purchase of the remaining branches or subsidiaries and deduct the price of the remaining branches and subsidiaries from the Consideration ( the price of the branches or subsidiaries as stated in Appendix E ); Notwithstanding the aforesaid, the business license issues set out in Appendix D shall be dealt with in accordance with the following approaches: those hotels of the Company and Shanghai Chuwen failed to get the business license with the business scope of “hotel operation” before 31 December 2007 shall not affect the fulfilment of the Conditions Precedents. The deadline for obtaining the business license with the business scope of “hotel operation” is agreed to be extended to 30 June 2008 and Party B shall be entitled to terminate the purchase of those branches and subsidiaries without obtaining the business licenses with “hotel operation” business scope. However in the event that after Party B has terminated the purchase before 31 December 2008 and such branches and subsidiaries has been granted the business license with business scope of “hotel operation”, then Party B shall purchase in accordance with the price listed under Appendix E.

5.10	Before the date of Completion, Party B shall undertake to complete the following:

(a)

Party B has not breached any of its representations and warranties under this Agreement on or before the date of Completion.

6.	REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

6.1

Representations and Warranties by Party A

Party A hereby represents and warrants to Party B that:

(a)

The Company, Top Star and Shanghai Chuwen Investment Co., Ltd. are duly incorporated in its place of incorporation and complies with applicable laws and is of good standing validly existing

(b)

Party A has full corporate power and is authorised to enter into this Agreement and has obtained all the necessary authorization;

(c)

The Company did not have any business or investments other than its interest in Top Star;

(d)

Unless the context otherwise requires, the Sale Share that Party A is selling hereunder and the assets of the Company and Top Star and the equity and assets of Shanghai Chuwen Investment Co., Ltd. are not subject to any security, encumbrances, any other defects in title or any claim against such Equity Interest or property and assets;

the execution and performance of this Agreement by Party A shall not violate any outstanding commitments, permits or obligations, whether contractual or otherwise, or any currently effective and applicable law, regulation, decree or policy or Articles of Association;

ii.

Party A, the Company, Top Star and Shanghai Chuwen Investment Co., Ltd. shall ensure the truth and accurateness of the above conditions, and shall be liable for the indemnification for all the losses incurred due to any untruth or incorrect of the condition;

iii.

Party A shall endeavour to settle all the matters set forth in Appendix D and shall be liable to indemnify the loss incurred by Party B, the Company, Top Star and Shanghai Chuwen Investment Co., Ltd within the limitation stipulated by the law.

iv.

The interests and liabilities under the credits and debts of / incurred by Top Star and Shanghai Chuwen Investment Co., Ltd. by 31^st October 2007 have been taken into account in determining the Consideration in Clause 3.1 of this Agreement. Party A shall completely settle all the debts incurred before 31^st October 2007 but not reflected in the Due Diligence Report issued by the accountants firm via Top Star and Shanghai Chuwen Investment Co., Ltd. After the date of Completion, Party A shall make payment to the creditor, or make compensation to Party B, the Company, Top Star or Shanghai Chuwen Investment Co., Ltd. in case Party B, the Company, Top Star or Shanghai Chuwen Investment Co., Ltd. are claimed against by any third party for such undisclosed liabilities.

Party A shall ensure that the decoration projects of Branches, Shanghai Chuwen Investment Co., Ltd. and Subsidiaries have passed the inspection and could be put in operation after the Completion by Party B. In case Top Star or Shanghai Chuwen or its subsidiaries incur any loss due to the decoration qualification problem, the quality deposit shall be compensated first pursuant to decoration projects agreement. If such amount is not enough to cover the loss, both parties hereby agree to deal with it pursuant to Appendix D of this Agreement.

vi.

Party A shall indemnify Party B against all legal liabilities or compensations of the Company, Top Star and Shanghai Chuwen Investment Co., Ltd. occurred on or before 31st October 2007

vii.

Party A shall deliver to Party B and/or its solicitor before and after date of Completion, all information and documents that reasonably required by Party B to ensure such representations, warranties and undertakings are accurately and properly complied with.

viii.

Party A shall inform Party B of any false, incorrect, misleading or breaching of the representations, warranties and undertakings, or any situations which might take any adverse effect to the asset or liabilities of Shanghai Chuwen Investment Co., Ltd., Top Star or Branches promptly upon its awareness;

ix.

Party A shall indemnify Party B with all the fees, expenses, damages within the limitation upon the law or any other liabilities incurred by Party B due to its breaching of the representations, warranties and undertakings or any other provisions hereunder;

Party A shall indemnify Party B with all the losses, damages, cost and expenses, fees and remedies incurred by Party B due to Party A’s breaching of the representations, warranties and undertakings or any other provisions hereunder;

xi.

Unless otherwise specified herein, each representation, warranty and undertaking, whether provided by Party A or the Company, shall be given independently, and none of the representation, warranty and undertaking by Party A or the Company shall be restricted by other representation, warranty and undertaking or any other provisions of this Agreement;

xii.

Party A hereby undertakes to Party B, if Party B suffered any losses, liabilities, damages, costs, claims and expenses (including but not limited to compensations, penalties, expenses and interests) as a result (directly or indirectly) of any this Clause 5 and any other terms and conditions of this Agreement being breached or found to be inaccurate or misleading, Party A shall indemnify Party B all such losses;

xiii.

Notwithstanding the above, Party A shall comply with the representations, warranties and undertakings as set forth in Appendix G; and

(r)

On the date of this Agreement is signed, Shanghai Chuwen has no longer owned 90% shares of Shanghai ▇▇▇ ▇▇▇.

6.2

Representations and Warranties by Party B

Party B hereby represents and warrants to Party A that:

(a)

Party B has full corporate power and authority to enter into this Agreement, and has obtained all the necessary authorizations;

(b)

the execution and performance of this Agreement shall not violate any outstanding commitments, permits or obligations, whether contractual or otherwise, or any currently effective and applicable law, regulation, decree or policy.

(c)

Party B shall forthwith inform Party A upon becoming aware of any event that any representations, warranties and undertakings to be false, incorrect, misleading or breached which have any adverse effect to the asset or liabilities of the Company., Top Star or the Branches of Top Star;

6.3

Representations and Warranties by Party D

Party D hereby represents and warrants to Party A that: if Party D issues its shares as set out in this Agreement in accordance with Clause 3.2 (c) hereunder within six months after the completion of the share transfer of the Company and Top Star, it shall assist Party A to apply for the F-3 registration with SEC for such shares issued to Party A upon Clause 3.2 (c) within six months after the completion of the share transfer. The stocks of Party C held by Party A shall be transferable with no limitation in NASDAQ after the registration is approved. Subject to the process of completion of the settlement of the issues listed in Appendix D by Party A, Party D shall issue such stocks six months after the completion of share transfer of Company and Top Star and Party D shall assist Party A to apply for the F-3 registration with SEC immediately after the issuance of the stocks.

7.	EFFECTIVENESS

7.1

Effective Date

This Agreement shall become effective upon the execution and stamp of the authorised persons of the parties. The effectiveness shall not be relied on the fulfilment of all the Conditions Precedent. In the event that if any Conditions Precedent has not been fulfilled due to any party’s fault before the date of Completion, then the default party shall be responsible for the liabilities of breach of agreement under this Agreement.

8.	CONFIDENTIALITY

8.1

Confidential Information and Confidential Obligations

The Parties hereby covenant and agree that each of them shall, and shall cause their respective affiliates, directors, officers, employees and agents to, hold in strictest confidence, and not, without the prior written approval of another Party, use for their own benefit or the benefit of any other party or disclose to any third person (other than in the Exceptions listed below) any information of any kind relating to the transaction contemplated hereby and the other Party’s businesses, customers, financials or other affairs (“Confidential Information”).

8.2

Exceptions

Clause 8.1 shall not apply to the disclosure of Confidential Information if and to the extent:

(a)

required by any court of competent jurisdiction or any competent judicial, governmental, supervisory or regulatory body;

(b)

required by the rules of any securities exchange on which securities of the Receiving Party or any direct or indirect shareholder of the Receiving Party are listed;

(c)

that such information was lawfully in the Receiving Party’s possession prior to the receipt thereof from the other Party; or

(d)

that such information is in the public domain other than through breach of this Clause.

8.3

Survival

This Clause 9 and the obligations and benefits hereunder shall survive the termination or expiration of this Agreement.

9.	INDEMNIFICATION

9.1

In case that Party A fails to complete all the matters by 31 December 2007, Party B shall have the right to:(a) give up purchasing the Branches (Subsidiaries)(in case Party B gives up purchasing certain branches, Party A shall bear the relevant costs and de-register such branches within 20 working days after Party B’s making decision, and shall ensure that all the liabilities relating to such branches are unrelated to Party B); (b) deduct the secured amount from the Consideration wholly or partly according to the details of the penalty; (c) deduct the loss incurred by Party B and outstanding payables of the Company, Top Star or Shanghai Chuwen Investment Co., Ltd. relating to such Branches from the unpaid Consideration; and (c) other measures adoptable to Party B.

9.2

In case that Party B make breaching conducts, including but not limit to failure to pay the amount on time, Party B shall pay the late penalty at 0.03% of the outstanding amount per day to Party A. Apart from claiming the late penalty, Party A shall be entitled to request Party B continue to enforce this Agreement.

9.3

Party B shall have right to terminate this Agreement without liable for any compensation in case there are any events occurred in the Company, Top Star or Shanghai Chuwen Investment Co., Ltd. which have adversary effect upon the operation of the Company, Top Star or Shanghai Chuwen Investment Co., Ltd. (the total affected amount reaches or exceeds MB 40,000,000) before the operation hand over date as stated in Clause 5.1. In such case, Part A shall return the paid part of consideration. In

case the occurrence of such adverse effect is due to the incorrect of Party A’s representation or warranties, then Party B shall have the right to terminate this Agreement. In such case, in addition to repayment of the paid, Party A shall pay the liquidated damage which shall not lower than 20% of the consideration, until all the actual losses of Party B has been remedied.

9.4

The Parties agree to defend, fully indemnify the other Party and hold the other Party harmless against any liabilities, losses, damages and costs sustained, assumed or suffered by the other Party now or at any time in the future as a result of any breaches of the representations, warranties and undertakings set forth herein.

9.5	In case the party which is obligated to indemnify the other party fails to pay the indemnity within the reasonable term designated by the other party, it shall bear penalty of delay at the rate of 0.03% of outstanding amount per day until all of the indemnity are paid off.

9.6	As the Guarantor of Party A, Party C shall guarantee Party A’s full performance of its duties and obligations under this Agreement, and Party C shall take joint and several liability with Party B in case of any breaches of Party A.

10.

MISCELLANEOUS PROVISIONS

10.1

Notices

Notices or other communications required to be given by any Party pursuant to this Agreement shall be in written form, and may be delivered personally or sent by a recognized courier service or by facsimile transmission to the address of the other Party set forth below. Any Party may at any time change its address for service by notice in writing delivered to all the other Party in accordance with the provisions hereby.

The dates on which notices shall be deemed to have been duly received shall be determined as follows:

(a)

Notices given by personal delivery shall be deemed duly received on the date of personal delivery.

(b)

Notices given by courier shall be deemed duly received on the date indicated on the receipt.

(c)

Notices given by facsimile transmission shall be deemed duly received on the first business day following the date of successful transmission and receipt.

Notices to Party A:

Attention: ▇▇. ▇▇ Wenyong

Address: ▇▇. ▇▇, ▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇

Facsimile:

Telephone:

Notices to Party B:

Attention: Ms. May ▇▇▇▇▇▇ ▇▇

Address: Lane 421, Cang Ping Road, Jing’an District, Shanghai P.R.C.

Facsimile: ▇▇-▇▇-▇▇▇▇-▇▇▇▇

Telephone: ▇▇-▇▇-▇▇▇▇-▇▇▇▇

Notices to Party C:

Attention: ▇▇. ▇▇ Wenyong

Address: ▇▇. ▇▇, ▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇

Facsimile:

Telephone:

Notices to the Company:

Before share transfer:

Attention: ▇▇. ▇▇ Wenyong

Address: ▇▇. ▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇:

Telephone:

After share transfer:

Attention: Ms. May ▇▇▇▇▇▇ ▇▇

Address: Lane 421, Cang Ping Road, Jing’an District, Shanghai P.R.C.

Facsimile: ▇▇-▇▇-▇▇▇▇-▇▇▇▇

Telephone: ▇▇-▇▇-▇▇▇▇-▇▇▇▇

10.2

Governing Law

The formation, execution, validity, interpretation and performance of this Agreement shall be governed by and construed in accordance with the published and publicly available laws of Hong Kong SAR; provided, however, that generally accepted standards and principles of international commercial law and customary international practice shall govern to the extent that there is no published and publicly available Hong Kong law with respect to a particular issue.

10.3

Dispute Resolution

Any dispute arising in connection with this Agreement shall be handled in accordance with the following provisions:

(a)

In the event of any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, the Parties shall attempt in the first instance to resolve such dispute through friendly consultations.

(b)

If the dispute is not resolved by friendly consultation within thirty (30) days after the commencement of such consultations, then any of the Parties in dispute may submit the dispute for arbitration to Hong Kong International Arbitration Centre.

(c)

The arbitration award shall be final and binding on the Parties, and the Parties agree to be bound thereby and to act accordingly.

(d)

The costs of arbitration shall be borne by the Parties as designated in the arbitration award.

(e)

When any dispute occurs and is the subject of friendly consultations, or arbitration, the Parties shall continue to exercise their remaining respective rights, and fulfil their remaining respective obligations, under this Agreement, except in respect of those matters under dispute.

10.4

Appendices

Appendices attached hereto and the other documents delivered pursuant hereto are hereby made a part of this Agreement as if set forth in full herein.

10.5

Severability

In case any provisions are held invalid under any laws and regulations, the effectiveness of rest provisions of this Agreement shall not be affected.

10.6

Further Assurances

Each of the Parties agrees to expeditiously execute such documents and perform such further acts as may be reasonably required or desirable to carry out or to perform the provisions and purposes of this Agreement.

In case Party A fails to fulfil the conditions precedents as stipulated in Clause 4.1 by the date of Completion, then Party A shall be obliged to fulfil the conditions after the date of Completion, and indemnify Party B with all the loss incurred due to the failure of fulfilment.

10.7

Waiver

No waiver by any Party of any breaches by any other Parties of any provision hereof shall be deemed to be a waiver of any subsequent breaches of that or any other provision hereof and any forbearance or delay by any Party in exercising any of its rights hereunder shall not be construed as a waiver thereof.

10.8

Amendment

It is expressly agreed that no amendments hereof shall be effective unless made in writing and signed by both Parties.

10.9

Language

This Agreement is executed in Chinese and English in six originals in each language. Both English and Chinese language versions shall be equally valid. Should there is any discrepancy between the Chinese and English version, the Chinese version shall prevail. Each party shall keep two originals.

Appendix A

Particulars of the Company

The particulars of the Company as at the Date of this Agreement are as follows:-


Company Name	:	Hong Kong AI Home Hotel Investment Limited

Date of Incorporation	:	30 September 2005

Business Registration Cert. No.	:	36068941-000-09-07-1 (Valid until 29 Sept 08)

Company No.	:	998665

Place of Incorporation	:	Hong Kong

Registered Office	:	▇▇▇▇▇ ▇ & ▇, ▇▇/▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, HONG KONG.

Authorized Share Capital	:	HK$1,000,000.00 dividend into 1,000,000 shares of HK$1.00 each

Issued Capital	:	HK$1.00 dividend into 1 share of HK$1.00 each

Existing Directors	:



Name
HE Hongzhang
LI Wenyong
▇▇▇ ▇▇▇


Company Secretary	:	Fenright Secretarial Services Limited

Existing Shareholders

Registered Holder(s)

No. of Shares

Alphaport International Limited

LOGO

1 Share


Appendix B: Share transfer legal handover list
Item	Content	Confirmation of the handover	Remarks
Licenses and permits	Business License
	Sanitary Approval
	Food Health Certificate
	Drainage Permit
	Environmental Protection Certificate
	Fire Protection Approval
	Public Security and Special Business Approval
	Enterprise Code
	Taxation Certificate-Accountant
	Social Insurance certificate and other licenses and permits or governmental approvals and etc. (like company name per-approval)
Chops	Company seal-Financial chop
	Contract chop
	Accountant special chop
	Legal representative chop-accountant to apply for the replacement
	Invoices chop-accountant
Constitutional documents	Shareholders meeting minutes
	Share transfer agreement
	managing director’s resolution
	application for changing the shareholding of the company with SAIC
	Articles of Association
	Articles of Association-SAIC filing certificate
Contracts and agreements	Premise lease agreement and relevant appendix, supplemental agreement and etc.		Property title deeds/landlord’s business licenses and etc.
	Lease agreement
	employment contract-HR, review the quantities and types and contents, regulations and employees’ handbook
	Construction contract
	Supply agreement
	Reservation agreement
	Hotel daily operational agreement
	Other contracts and agreements and documents
Engineering layout	Property layout and decoration blueprint
IP rights	trademark
	Patent (invention, practical novelty, surface design)
	patent ()

Appendix B: Share transfer financial handover list


Item	Content	Confirmation of handover	Remarks
Fixed assets	Air conditioners, TV, lifts and other fixed assets		Since 1 November, Homeinn and the transferor shall proceed the fixed assets and inventory check and handover and both parties shall sign on the handover list upon the handover.
Tax information	Tax certificate (local and state level respectively)
	quarterly corporate tax payment vouchers
	corporate tax annual claim and its appendix and the tax payment vouchers
	monthly business tax claim form and its payment vouchers
	tax audit report (if any)
	other tax (stamp duty and etc.) declare form and the relevant payment vouchers
Financial accounts, accounting books and vouchers	financial report (monthly and annually)
	audit report (if any)
	various capital verification report
	accounting books (general consolidated and breakdown)		the details breakdown and the consolidated account and the report form’s items need to be checked item by item so that to secure the integrity of the accounting books
	all accounting vouchers		vouchers need to be checked its integrity upon the consecutive numbering
assets and other property registration	bank account opening information and its replacement and cancellation information		make sure the current bank account’s opening documents are completely obtained
	chops used in the bank need to be registered and updated its replacement information		make sure the chops used for the current bank account have been completely obtained
	accountant use chop and its updated information		make sure the current financial chop is completely obtained
	invoice use chop registration and its updated information		make sure the current invoice chop is completely obtained
	real property and automobile and other company assets registration (if any)
	fixed assets and inventory check list (if any)
	major assets transfer contract (if any)
	fixed assets account book made upon the assets shown in account book on the handover date		need to check thoroughly so that to confirm the profit and loss
	breakdown of the inventory list upon the assets shown in account book on the handover date		need to check thoroughly so that to confirm the profit and loss
	confirmation on the construction price
other related financial information	HR contract and HR monthly payroll
	social insurance contribution record
	invoices and other original vouchers not been recorded into the account book
	major contract related to the company transaction (and the lease registration certificates)		make sure the integrity of the lease agreement and its registration, other unsettled contracts (especially the office lease agreement)
	bank slip and its balance adjustment forms		at least make sure the bank slips is completed.
	invoice counterfoil and its filing receipt
	company chop usage record (if any)
	the court judgement related to the company and its relevant documentation
	system user registration record
	financial software related certificate and its passcode and etc.

Appendix C: Adjustment details of the purchase price


Adjustments	Reason for adjustments/ Substance of calculation	Accounting Items	Company/Hotel Name	Amount (+/-)
Increases
1	Book value of cash account	Cash
2	Book value of cash account	Cash in bank
3	Estimated account receivable	Account receivable
4	Estimated creditor’s rights	Other notes receivable
5	Prepaid expenses such as rental	Deferred and prepaid expenses
6		Advance money (except to Inventories and engineering)
			Total Increase:
Decreases
1	Actual bank debts repayable	Short-term borrowing
2	Actual debt repayable	Account payable
3	Actual wage payable	Accrued wages
4	Due services for deposit received	Deposit received
5	Actual tax payable	Tax payable
6	Actual supplementary taxes payable	Other fund in conformity with paying
7	Actual debt repayable	Other account payables
8	Estimated payable liabilities	Drawing expense in advance
9	Estimated payable liabilities	Anticipation liabilities
10	Actual bank debts repayable	Long-term borrowing
11	Estimated debts payable and liabilities	Commitment items
			Total Decrease:
Difference (Increase-Decrease):

Appendix D: List of Pending Issues, Solutions, Secured Amount of Top Star and Shanghai Chuwen

No.

the transferor shall settle the issue as follows
before 31 December 2007

in case of failure to solve the issue, the following shall
be referred

secured amount

Issues

Contents

RMB

US$

lack of permits and licenses

Some hotels operated by Top Star and Shanghai Chuwen have not obtained the necessary permits and licenses, see details in appendix E.

Top Star and Shanghai Chuwen shall obtain all necessary permits and licenses before the completion date

in case the hotels were unable to obtain the business license with the business scope of “hotel operation” until 30th June 2008, Homeinn is entitled to give up the acquisition of such hotels and deduct the corresponding value from the consideration (the value of the hotels shall be subject to the Appendix E); However, in case the hotels succeeded in obtaining the business license with the business scope of “hotel operation” before 31th December 2008 after Homeinn had given up the acquisition of such hotels, Homeinn shall acquire the hotels in accordance with the value as listed in Appendix E.

106,444,617

14,178,626

the owner of Chengdu Luomashi Hotel and the Lease agreement

Homeinn shall deduct 5% of the consideration of Chengdu Luomashi Hotel from the total consideration;

Chengdu Maruika shall transfer the 5% equity to Shanghai Chuwen before the completion date

Homeinn shall deduct 5% of the consideration of Chengdu Luomashi Hotel from the total consideration;

670,000

89,245

the transferor and its shareholder shall be liable for any loss arising therefrom.

Top Star shall terminate the lease agreement with the landlord

the transferor and its shareholder shall be liable for any loss arising therefrom.

The reduced value shall be deducted from the consideration in case of the reduction of the value of the hotel due to the failure of such change

the tenant in the sublease agreements shall be changed from Maruica to Chengdu Top Star

The reduced value shall be deducted from the consideration in case of the reduction of the value of the hotel due to the failure of such change

there are two contract operation agreements for Chongqing Daping Hotel

both Shanghai Top Star and Chengdu Top Star entered into contract operation agreements.

the agreement signed by Top Star shall be terminated as its business scope is without “hotel operation”.

The transferor and its shareholder shall be liable for any loss arising therefrom.

the party who executed the lease agreements is not the party who operates the hotel.

the party currently operating Guangxi Jiaoyuxueyuan Hotel is Top Star Nanning, but the lease agreement was entered into by Top Star.

the tenant in the lease agreement shall be changed from Top Star to Top Star Nanning.

Try to persuade the landlord agree with the change from Top Star to Nanning Top Star. In case of any additional business tax to be born by Top Star, such additional amount shall be deducted from the consideration.

500,000

66,601

the party currently operating Nanning An’hu Hotel is An’hu Branch of Top Star Nanning, but the lease agreement eas entered into by Top Star.

the tenant in the lease agreement shall be changed from Top Star to An’hu Branch of Top Star Nanning.

there are two lease agreements for Suzhou Fengqiao Hotel.

Suzhou Fengqiao Hotel executed two lease agreements with the landlord and the sublessor respectively, as the sublessor have not obtained the permission from the landlord for such sublease.

Try to have the landlord confirmed that the lease agreement with Top Star need not be enforced, it is used for the registration of the hotel; Furthermore to confirm that the landlord agrees the sublessor to sublease the premise.

The transferor and its shareholder shall be liable for any loss arising therefrom.

mortgage on the premises

the premise of Shenyang Gugong hotel has been mortgaged before being rented.

The transferee shall get the written confirmation from the mortgagee that the lease agreement shall still be enforced even if the mortgage is executed.

The transferor and its shareholder shall be liable for any loss caused to Homeinn due to the execution of the mortgage by the mortgagee.

obtain the
relevant
confirmation

the premise of Foshan Zumiao hotel has been mortgaged before being rented.

The transferee shall get the written confirmation from the mortgagee that the lease agreement shall still be enforced even if the mortgage is executed.

The transferor and its shareholder shall be liable for any loss caused to Homeinn due to the execution of the mortgage by the mortgagee.

the premise of Nanjing Tongjimen hotel has been mortgaged before being rented.

The transferee shall get the written confirmation from the mortgagee that the lease agreement shall still be enforced even if the mortgage is executed.

The transferor and its shareholder shall be liable for any loss caused to Homeinn due to the execution of the mortgage by the mortgagee.

Appendix D: List of Pending Issues, Solutions, Secured Amount of Top Star and Shanghai Chuwen

No.

the transferor shall settle the issue as follows
before 31 December 2007

in case of failure to solve the issue, the following shall
be referred

secured amount

Issues

Contents

RMB

US$

Chengdu Qintai Hotel’s termination of the lease agreement

Top Star shall pay the rental for the term from 1 June, 2007 when the landlord deliver the property till the effective date of the lease agreement signed by the landlord and the third party

The commitment made for the landlord shall be withdrawn

The rental paid by Homeinn after the completion date shall be deducted from the consideration.

390,000

51,949

Shanghai Dalian Lu Hotel’s termination of the lease agreement

Top Star requested the landlord to refund the ▇▇▇▇▇▇▇ money of RMB 1,200,000, but the landlord claimed that they had put into RMB 1,700,000 as investment and requested Top Star to compensate RMB 500,000

To terminate the lease agreement with the landlord.

The transferor and its shareholder shall be liable for any loss arising therefrom.

500,000

66,601

Construction decoration problems

some hotels have not met the decoration requirement for using as a hotel

Top Star repair and re-decorate those unsatisfied portion to meet the hotel decoration requirement

In case Homeinn repair and re-decorate the hotels, then such investment shall be deducted from the remaining amount of the consideration.

1,700,000

226,443

employment and HR problem

Some employees have not been paid three funds; All the employees have not been paid the housing fund.

Try to remedy such payment

In case any penalty is imposed on such problems which had happened before the completion date, the transferor and the shareholder shall be responsible for such penalty.

The planning purpose of the property changed.

The planning purpose of the property for some hotels have been changed without permission.

In case the change of the planning purpose of the property causes any loss to Homeinn, such loss shall be reimbursed by the transferor and the shareholder.

Lease registration has not been done yet.

Most hotels have not passed through the lease registrations.

In case Homeinn suffers any loss due to the non-registration before the completion date, the transferor and the shareholder shall be responsible to reimburse Homeinn.

remaining
consideration

The administrative penalties imposed on the hotels

The administrative penalties imposed by Security Public Bureau, SAIC, Fire Control, City Planning and Quality Control and etc are mainly related to the operation without permits and licenses.

In case any similar penalty is imposed on such problems which had happened before the completion date, the transferor and the shareholder shall be responsible for such penalty.

Security account

Shanghai Chuwen opened security account in Dongfang Security

Such security account shall be canceled

Company credit card

Shanghai Chuwen applied two credit cards for He Hongzhang and ▇▇▇ ▇▇▇.

Such credit cards shall be canceled

Sahnghai Chuwen has account receivable up to ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Tuo Feng Advertisement Co.

Tuo feng shall repay such amount of money

Withhold the same amount of money from the consideration until the repayment is made.

Shanghai Chuwen has account receivable up to RMB 500,000 from Shanghai Wenlai Investment Management Co.

Shanghai Wenlai shall repay such amount of money.

Withhold the same amount of money from the consideration until the repayment is made.

Related account

Shanghai Chuwen shall repay Changbai Real Estate Co. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇.

▇▇▇▇▇ this amount, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ deducted as the Tuo Feng account receivable while the rest ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ taken over by Homeinn after the transfer.

Deduct the same amount of money from the consideration.

Top Star has account receivable up to ▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Tuo Feng Advertisement Co.

Tuo Feng shall repay such amount of money.

Withhold the same amount of money from the consideration until the repayment is made.

Top Star shall repay Shanghai Hui Da Knitting Co. RMB 7 million.

Top Star shall repay the principal and interest thereof.

Deduct the same amount of money from the consideration and the transferor and the shareholder shall bear the interest thereon.

Top Star has a bank loan of ▇▇▇ ▇▇ million

Top Star shall repay the principal and interest and the liquidated damage thereof.

Deduct the same amount of money from the consideration.

Appendix D: List of Pending Issues, Solutions, Secured Amount of Top Star and Shanghai Chuwen

the transferor shall settle the issue as follows

in case of failure to solve the issue, the following shall

secured amount

No.

Issues

Contents

before 31 December 2007

be referred

RMB

US$

Sponsor for titling the Qunying Football Cup

Top Star was granted the title of the football cup and guarantee to sponsor RMB 4,893,000 underwhich RMB 1,610,000 has been already paid up.