EnglishSummary of the Conditional Sale and Purchase Agreement DATE:July 10,2010 WONDERAUTO LIMITED (asthe Seller A) And YEARCITYLIMITED (asthe Seller B) And JINYING LIMITED (asthe Buyer) CONDITIONALSALES AND PURCHASE AGREEMENT re 4,015Outstanding Shares of APPLAUDGROUP LIMITED Index

(i)

JINHENG AUTOMOTIVE SAFETY TECHNOLOGY HOLDINGS LIMITED (“Listed Company”）, a company established under the laws of Cayman Islands. As at the date of this agreement, authorized capital of the listed company is 100,000,000HK dollar and totally divided into 10,000,000,000 common stocks (“Shares of Listed Company”). With per value of 0.01 and 476,548,888 stock shares, the company was listed on The Stock Exchange of Hong Kong. The further details of the listed company are attached to the Attachment I.

(ii)

Applaud Group Limited (the “Company”), a company duly established and existing under the laws of BVI, with registered office at P.O.Box957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. As at the date of this agreement, the authorized capital of the company is $50,000 and totally divided into 5,000,000 common stocks (the “Company Shares”). With per value of 0.01 and 10,467 total of shares，of which (i) Seller A has 2188 stock shares (the “Seller A Shares”); And (ii) Seller B holds 1,827 shares (the “Seller B Shares”). The Seller A Shares and Seller B Shares are collectively referred to as the “Shares”. Further details are listed in Annex 2. As at the date of this agreement, the Company holds 231,530,000 stock shares of the Listed Company, constituting approximately 48.58% of the total shares of the Listed Company.

(iii)

Subject to the terms and conditions of the Agreement, the Sellers agree to sell and the Buyer agrees to buy the Shares.

1.1

Unless otherwise set forth, the terms below shall have the meanings as set out hereunder in the context of this Agreement (including its preface and its appendixes):

1.2

Except otherwise defined, all terms in this Agreement have the same meaning stipulated.

1.3

The title of this Agreement has no influence to nature of this Agreement.

1.4

Any insertion of contents and clauses of this Agreement shall not have the same legal effect as this Agreement.

1.5

Except otherwise stipulated, any clause, table or appendix is referred to from this Agreement.

1.6

The regulations, rules and other laws are in connection with the timely updates of themselves.

2.1

Subject to the terms of this Agreement, the Sellers agree to sell and the Buyer agrees to buy the Shares. The Shares shall be subject to no Lien.

2.2

Unless all Shares are sold at the same time, the Seller has no obligation to sell any Shares.

3.

3.1

The total consideration for the Shares is HK$162,000,000, of which, HK$88,282,940 will be paid to the Seller A and HK$73,717,060 will be paid to the Seller B.

3.2

The total consideration as set forth in clause 3.1 will be paid after the Completion Date and within 10 Business Days after (i) the Company, as a shareholder of the Listed Company receives the special cash dividend according to the clause 4.1 in Jinheng BVI Agreement; and (ii) Buyer, as the Company’s shareholder, shall have received the special cash dividend distributed by the Company. The parties agree that no consideration will be paid on the Completion Date.

3.3

The parties hereby agree that the Sellers have no rights to the special cash dividend distributed by the Company to its shareholders, and the special cash dividend belong to the Buyer. As such, the record date for the distribution of special cash dividend by the Company to its shareholders shall be a date after the Completion Date.

4.1

The completion of the transactions contemplated by this Agreement is conditional upon the satisfaction of the following conditions:

 

(1)

the Sellers, the Buyer and the Company have each received all necessary consents and authorizations required for the sell of Shares;

 

(2)

all condition precedents for the Jinheng BVI Agreement have been satisfied (except for the condition that this Agreement shall become unconditional);

4.2

The Sellers and the Buyer shall use its best efforts to cause the satisfaction of the conditions set forth in clause 4.1 above, including provision of all necessary documents and materials to the Listed Company, the SEC, Hong Kong Stock Exchange and other government agencies.

4.3

If the above conditions have not been satisfied on or before September 30, 2010 or such later date as the parties may agree in writing (except for clauses 7, 9, 15, 17 and 18), this Agreement will be terminated, in which case, either party shall be liable to the other party except for any breach occurred before the termination.

5.

5.2

The following documents shall be delivered by the Seller to the Buyer:

(1)

documents for the transfer of the Shares to the Buyer signed by the Seller;

 

(2)

other documents relevant to the transfer of the interest of the Shares;

 

(3)

the registration and other corporate documents;

 

(4)

the record of corporation, shareholder list, directors list, and other documents in related with this transaction;

 

(5)

the resignation letter of Qingjie Zhao as director of the Company, and the resignation letter have been confirmed by both the Buyer and the Seller;

 

(6)

the resignation letter of Qingjie Zhao and Qingdong Zeng as directors of the Listed Company, and the resignation letter have been confirmed by both the Buyer and the Seller ;

 

(7)

the copy of the Board meeting minutes signed by a director stipulated and the approval of this Agreement, and authorizing one or more people (when necessary) to sign this Agreement.

5.3

The Seller shall urge the board of the Company to hold a board meeting and approve the followings:

 

(1)

to approve the transaction for the sale of  the Shares to the Buyer;

 

(2)

to accept the requirements in clause 5.2(5) on resignation of all directors, and

5.4

The Buyer shall provide the following documents upon completion of the transaction:

(1)

documents for the transfer of the Shares to the Buyer signed by the Buyer;

 

(2)

the board resolution signed by a director of the Seller;

5.5

In case the Buyer could not meet the requirements stipulated in clause 5.4, the Seller shall:

 

(1)

to postpone the completion of the transaction up to 28 day, or

 

(2)

to implement its obligation regardless the default of the Buyer, or

 

(3)

to terminate this Agreement.

6.

6.1

The Seller testifies that the warranties stipulated in the Attachment III are accurate and true.

7.

7.1

Except otherwise agreed by the other parties, or required by laws and regulations, the Parties of this Agreement shall not make public announcement, press release or other public disclosures allowed.

7.2

No disclosure of any information of this Agreement to persons other than the persons involved in the preparation and implementation of this transaction.

8.

8.1

The Seller shall sign or urge other necessary person to provide warrants to ensure the Buyer’s interests.

9.

9.1

All related notifications shall be sent to the following addresses:

add.

：

No.56, Lingxi Avenue, Taihe District,

Jinzhou City, Lioaning Province, China

 

fax

：

+86 ###-###-####

attn

：

The Board

add.

：

No.56, Lingxi Avenue, Taihe District,

inzhou City, Liaoling Province,  PR China

 

fax

：

+86 ###-###-####

attn

：

The Board

add.

：

Unit 605, 6/F, Beautiful Group Tower, 74-77,

Connaught Road Central, Central,

Hong Kong

fax

：

852-2542 0280

attn

：

Tianzhong Fu

9.2

All notifications shall be delivered to the indicated addresses by (i) post mail, (ii) personal delivery, and  (iii) fax.

9.3

The Seller irrevocably appoints Mr. Tianzhong Fu to receive all documents and notifications of this transaction.

10.

10.1

Time is of essence in this Agreement, while no delay or waiver of obligations of the other party in case of one party no implementation or delay its implementation of this Agreement.

11.

11.1

The effectiveness, validity and enforceability of other clauses in this Agreement shall not be swayed by any jurisdiction changes.

12.

12.1

No revision, supplement or change shall be made unless signed by both parties of this Agreement.

13.

13.1

No party to this agreement can transfer its rights or obligations under this Agreement without pre-approval of the other party.

14.

14.1

This Agreement is the final in replace any previous contracts, arrangements, statements or transactions between the parties.

15.

15.1

The parties agreed to bear its own expenses incurred during the preparation, discussion and implementation of this Agreement.

15.2

The taxes applied to the transaction under this Agreement shall be borne by the Seller and The Buyer itself.

16.

16.1

This Agreement may be duplicated in any amount for signature. And all signed copies shall be deemed as parts of the integration of this Agreement.

17.

Governing Laws and Jurisdictions

17.1

This Agreement is governed by Hong Kong laws.

17.2

All parties of this Agreement is under the jurisdiction of Hong Kong Court.

1.1

The seller is the registered and beneficial shareholder of the Shares.

1.2

Except otherwise stipulated in terms of this agreement, the Shares are not subject to any mortgage, lien or pledge.

2.1

The seller has capacity to sign of this Agreement and perform its obligations under this agreement (include, not limited to, transfer to the Shares to the Buyer)

2.2

Upon signing of this agreement, all terms in this agreement shall be valid and bonding to the parties of this agreement.

 

The statements in the preface and the appendix are true and accurate.