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    Appointment Microgenix JV Licencee for China

    Document date: Mon 16 Jun 2003 Published: Mon 16 Jun 2003 09:41:31
    Document No: 238932 Document part: A
    Market Flag: Y
    Classification: Other

    HOMEX - Perth

    AFT Corporation's Microgenix JV announces that it has entered into a
    Heads of Agreement to grant an exclusive Master Licence for the
    manufacture and distribution of the Microgenix Air Purification
    System for a term of ten (10) years for Greater China.

    Implementation of the obligations under the Master Licence will be
    undertaken by a company within the Tsinghua University Enterprise
    Group ("TUEG"). TUEG was founded in 1995, and is a high-and-new
    technology enterprise group. It is supported by Tsinghua University,
    a major University located in Beijing that has a powerful strength in
    science and technology as well as its human talents.

    TUEG is mainly engaged in managing the business capital of Tsinghua
    University and bringing scientific and technologic achievements into
    industry. TUEG has total assets of Rmb 17.5 billion (US$2.11billion)
    and annual revenue of Rmb 11.5 billion (US$1.39 billion ) in 2002.

    The group has involved in more than 30 enterprises.
    Some of the more well-known solely owned companies are:
    Tsinghua Unisplendour (Group);
    Tsinghua Tongli Electric Equipment Co, Ltd;
    Tsinghua Energy Simulation Company;
    Guohuan Tsinghua Environment Engineering Designing and Research
    Institute; and
    Tsinghua Science Park Development Centre.

    In addition, through a majority shareholding, TUEG controls:
    Tsinghua Solar Co, Ltd;
    Tsinghua Unisplendour Biological Co, Ltd;
    Hangtian Tsinghua Satellite Technolgoy Ltd;
    Tsinghua Yuanxing Biological Medicine Technology Share-Holding Co,

    Some of the well-known listed companies in TUEG are:
    Tsinghua Tongfang Co, Ltd;
    Tsinghua Unisplendour Co, Ltd;
    Chengzhi Shareholding Co, Ltd;
    Tsinghua Unisplendour Guhan Bio-Pharmaceutical Corporation Ltd;
    Tellhow Sci-Tech Co, Ltd; and
    Zhuhai Hudian Co, Ltd

    Further information on these TUEG controlled companies can be
    obtained from either the Shanghai Stock Exchange or the Shenzhen
    Stock Exchange in China.

    The Master Licencee will in concert with the Tsinghua University
    Group will:

    (a) carry out market surveys in the Greater China to determine which
    Microgenix products will be suitable for the markets.

    (b) organise meetings between scientists from the Peoples Republic of
    China Ministry of Health and Microgenix representatives to assist in
    obtaining any required certification of the manufacturing of
    Microgenix products in China;

    (c) obtain all governmental endorsements, approvals and licences in
    respect of Microgenix products and its Biogreen 3000 filter media as
    may be required in the China;

    (d) obtain from at least one high profile hospital in a principal
    city in China binding orders for Microgenix products utilising
    Biogreen filter media to be installed within three (3) months from
    the date of these terms;

    (e) identify and recommend to Microgenix, sub-licensees,
    manufacturers and distributors in China to manufacture the Microgenix
    products to all Microgenix specifications and all applicable
    standards required in China;

    Microgenix agrees to provide to the Master Licencee;

    (a) copies of all test reports obtained by it from independent
    internationally recognised testing facilities concerning the
    performance of Microgenix products including the test methodology and
    program of works;

    (b) manufacturing drawings and related information;

    (c) approvals for the appointment of sub-licensees, manufacturers and
    distributors recommended provided recommendations are acceptable to
    Microgenix and the appointees execute all such sub-licence,
    manufacture and distribution agreements as Microgenix may reasonably

    (a) The Master Licensee must make sufficient sales of MAPS products
    and Biogreen filter media in each twelve months to generate minimum
    annual payment to Microgenix commencing in the first year at
    US$500,000 rising progressively to US$1,500,000 in the 6th year.

    (d) The royalties are net to Microgenix and if their payment is
    subject to withholding tax in the China, the Master Licensee or its
    approved sub-licensees and distributors must bear such tax.

    (e) Master Licensee and its approved sub-licensees and distributors
    must acquire all filter media for use in Microgenix products from

    (f) The Master Licensee must contemporaneously with the signing of
    the formal agreement provide to Microgenix an irrevocable and
    unconditional bank guarantee from a reputable bank of US$500,000,
    such guarantees to be renewable from year to year during the Term and
    to provide that if there is any shortfall in the minimum annual
    payment amount for any year then Microgenix may draw down against the
    bank guarantee the amount of any such shortfall.

    (g) The parties must sign the formal agreement no later than twenty
    (20) working days from certification of the Microgenix system by the
    relevant Peoples Republic of China testing authority.

    The parties have already entered into a
    Non-Disclosure/Confidentiality And Non-Circumvention Agreement and
    the terms of the agreement shall shall be confidential and not be
    disclosed by either party to third parties without the prior written
    consent of the other party.

    Released by:
    ADV Corporation Ltd (Market Code AFT)
    Suite 8 Level 6
    3 Spring Street
    Sydney NSW 2000
    Contact: Jeff Dalco
    Tel: 02 9988 0833 Email: [email protected]
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