Exhibit 10.38



Certain portions of this Exhibit have been omitted pursuant to a request for
"Confidential Treatment" under Rule 24b-2 of the Securities and Exchange
Commission. Such portions have been redacted and bracketed in the request and
appear as [ ] in the text of this Exhibit. The omitted confidential information
has been filed with the Securities and Exchange Commission.


                      AGREEMENT OF TRANSFER OF SHARES - 01

Party A: Shandong Lu Neng Huang Tai Industrial Group Company Limited
Address: 172, Industry Road North, Jinan, Shandong
Legal Representative: (signature)
Nationality: Chinese
Title: General Manager

Party B: American Pacific Aviation and Technology Inc.
Address: One Sansome Street, 19th Floor
Legal Representative: (signature)
Nationality: US
Title: President

      The China Card Smart Card (Shanghai) Company Limited is a joint venture
established and registered on March 21, 2000, by the Shandong Huang Tai
Industrial Group Corporation (approved by local Industry and Commerce
Administration and other agencies to rename as Shandong Lu Neng Huang Tai
Industrial Group Company Limited on August 31, 2001). The registered capital of
the joint venture shall be RMB$[         ], of which Party A shall contribute in
form of cash, in the amount of RMB$[          ], and Party B shall contribute in
form of equipment, equivalent to the amount of RMB$[          ]. After review by
the Board of Directors of the China Card Smart Card (Shanghai) Company, it was
agreed that the American Pacific Aviation & Technology Inc. transfer 50% of its
shares of the China Card Smart Card (Shanghai) Company, in the amount of
RMB$[         ], to Shandong Lu Neng Huang Tai Industrial Group Company Limited,
Shandong Lu Neng Huang Tai Industrial Group Material Trading Company, and the
United Power (USA), Inc. Parties A and B agree to the following:

  1. Party A shall pay RMB$[        ] (if payment to be made in US currency, the
     foreign exchange rate of which shall be 8.27) to buy 12% of the shares of
     the China Card Company owned by Party B. After acquisition, the total
     shares owned by Party A shall be 62% of the registered capital of the
     company.

  2. Payment method of transfer of shares: Method 1, Party A shall pay to the
     China Card Company, which will then pay Party B; Method 2, Party A shall
     pay the amount directly to Party B.

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  3. Payment Deadline: Within two months after the share transfer agreement
     become valid.

  4. Process of share transfer shall be handled by the China Card Company.

  5. After transfer of shares, Party B shall hold no interest in the joint
     venture, and shall not be liable to any liabilities and indebtedness of the
     joint venture.

  6. The making, validity, interpretation, execution and settlement of dispute
     of this agreement shall be governed by the laws of the People's Republic of
     China.

  7. Any dispute over the share transfer agreement shall be settled by friendly
     negotiations. In the event negotiations fail to solve the dispute, it shall
     be brought to arbitration by the China International Economic and Trade
     Arbitration Committee, based on the rules and regulations of said
     committee. The decision of the Committee shall be final and shall have
     binding effect on all parties.

  8. This agreement shall become effective when signed by all parties, beginning
     the date when it is approved by pertinent government agency.

  9. This agreement shall cease effective when the process of share transfer is
     completed.

 10. Original shareholders agree to the above terms and conditions of share
     transfer.

Signatures of Original Shareholders: (signatures)

Date Signed: September 6, 2001

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