Settlement Agreement

Party A: ALJ ASIA PACIFIC LIMITED

Address: Flat D, 27th Floor, CNT Tower, 338 Hennessy Road, Hong Kong Authorized representative: Mr. James Zimmerman and Mr. Nicholas Chan Party B: QINGDAO HUATAI ENTERPRISE GROUP CO., LTD

Address: No.127 Fuzhou Road, Qingdao, Shandong, China

Legal Representative: Tan Linlin, director of the board

Authorized agent: Li Ning

Party C: CITIC AUTOMOBILES SALES BRANCH

Address: Room 3023 of 11th building, No.1 Shilibao Road, Chaoyang District, Beijing, China

Legal Representative: Wang Jianzhi

WHEREAS the disputes relating to automobiles sale agreement between Party A, Party B and Party C has been settled by the International Court of Arbitration in Hong Kong on November 8, 2005 with a final arbitration award 13138/MS (“Arbitration Award”).

Party A applied to the Beijing Second Intermediate People’s Court for the enforcement of the said award on May 18, 2006, and the court made a civil decision (2006) 962 on October 12, 2006.

Party A received the payment of 1 million Yuan RMB returned via the court on May, 2008.

As of October 8, 2008, Party B and Party C owed 8,689,209 Yuan RMB totally to Party A.

Based on the principle of respecting the facts and mutual understanding, fully considering the true operation situation, the Parties conciliated with each other under the guide of enforcement department of the Beijing Second Intermediate People’s Court (hereinafter referred to as the “court”). After friendly and frankly negotiations, the Parties have reached the conciliation agreement on the civil decision (2006) 962 as follows:

1, Party B should pay Party A 1,500,000 Yuan RMB in cash through the court on the date of signing this agreement;

2, Party B should pay Party A 2,500,000 Yuan RMB in cash through the court

before December 31, 2008; Party A agrees to notify the court to release Party B’s sealed cars after receiving the said fund;

3, Party B should pay Party A 2,000,000 Yuan RMB in cash through the court before January 1, 2009; Party A agrees to notify the court to release Party B’s sealed houses after receiving the said funds.;

4, Party A agrees to remit all the debts including the principal and its interests decided by the final award 13138/MS of International Court of Arbitration and civil decision (2006) 962 from Party B after receiving the said funds. The settlement payments shall be made to the court and then transferred with the court’s assistance to ALJ Chengdu and then to ALJ in Hong Kong;

Party A agrees to remit all the debts decided by the final award 13138/MS of International Court of Arbitration and civil decision (2006) 962 from Party B after receiving the said funds, and release Party C’s investor, namely CITIC AUTOMOBILE, from the obligation to pay the debts;

5, The agreement will come into force after the signature. All parties should perform their duties under this agreement without violation. If Party B and C violates the agreement, Party A would apply the court to take the enforcing measures in accordance with the final award 13138/MS of International Court of Arbitration and civil decision (2006) 962;

6, The Parties agree that under no circumstances will Party A release Party B or Party C from their obligations under the Arbitration Award unless ALJ receives full settlement of the agreed sum in accordance with the terms set forth in this Agreement;

7, The Parties agree that this agreement is made in good faith by the Parties hereto and is 'without prejudice' to Party A’s present application for enforcement of the Arbitration Award before the court. Therefore, if Party B pays the settlement sum in accordance with the terms herein, Party A shall apply to the court to withdraw the enforcement application. However, if Party B fails to pay the entire settlement sum due strictly in accordance with the terms herein, THEN Party A will immediately apply to the court to continue with enforcement of the Arbitration Award for the full amount due with interest as stated in the Arbitration Award and Party B and Party C will not contest the enforcement AND Party A shall apply to reinstate the court order for seizure of the cars and buildings and Party B and Party C shall not contest such application.

8, This agreement is made in four originals. Party A, Party B and Party C shall each hold one original, as well as the enforcement department of the Beijing