General Announcement Reference No O&-041014-65195

Submitting Merchant Bank	:	K & N KENANGA BHD
Company Name	:	ASIAEP BHD (MESDAQ Market)
Stock Name	:	ASIAEP
Date Announced	:	14/10/2004

Type	:	Announcement
Subject	:	ASIAEP BERHAD ("AsiaEP" or the "Company") Co-operative agreement between the Company and GuangDong Linux Center ("GDLC")

Contents :


1. Introduction

The Board of Directors of AsiaEP ("Directors") is pleased to announce that the Company had on 14 October 2004 entered into an agreement with GDLC (the "Agreement") to mutually promote each other's software, products and technical expertise.

2. Background information on GDLC

GDLC is a resource provider in the areas of software, hardware and professional support for Linux operating system in the People's Republic of China ("PRC"). It has provided technical assistance, system testing, training and development and on-site support to numerous government bodies, business and industry users. Its core professional support team is segregated into three (3) levels to provide technical support with different levels of difficulties and complexities.

GDLC has advanced network and hardware resources for IBM X and P Series, Lanso and Intel hardwares. Its softwares include Redhat, Suse, Redflag, NeoShine, TurboLinux, MidoriLinux, TomLinux which are covered by product and technical supports. Some of its major trade partners include IBM, Oracle, BEA System Inc and Lanso.

3. Objectives of the Agreement

Both parties are to cooperate to achieve the following objectives, and to enhance their technical expertise as well as their commercial and marketing activities according to the following areas: -

1. GDLC is able to provide the necessary Research and Development ("R&D") tools and resources to ensure the functionability, capability and integratability of AsiaEP's future Linux system;

2. GDLC is able to provide, upon request by AsiaEP, its support for AsiaEP's operating system, information database, intermediary, user support system and final products including software and hardware;

3. Coupled with its strengths in software and hardware resources, outsourcing capabilities and R&D resources, GDLC is capable of delivering outsourcing solutions to AsiaEP should the need arises, especially in the shift from Windows platform to Linux platform;

4. GDLC is able to provide a Linux professional team to provide consultancy services, on-site and distant support services and after-sales services whenever and wherever required by AsiaEP;

5. GDLC is able to provide AsiaEP with the necessary on-site and distant contractual resources for the R&D of AsiaEP's softwares;

6. GDLC is able to tailor a Linux training course for AsiaEP and other end-users since GDLC has a comprehensive Linux certified training course, and together with other software vendors, GDLC could also provide training and development for Redhat, Redflag, IBM and Intel;

7. Subject to further agreement between GDLC and AsiaEP, if any, the R&D resources, consultancy services, outsourcing capabilities, technical support, contractual resources, training and development courses and software applications and solutions developed by GDLC can further be sold to other external parties by AsiaEP; and

8. Both parties could conduct information exchange and research so as to promote AsiaEP's products and software expertise in the PRC. Both parties could also promote and market each other's products and software expertise in their respective geographical region.

4. Salient terms of the Agreement

The salient terms of the Agreement between AsiaEP and GDLC are as follows:-

(1) Both parties are to cooperate in the areas of technical expertise, commerce and promotional activities in order to achieve the objectives as set out in Paragraph (3), if any, above: -

- R&D resources;
- Software applications and solutions;
- Outsourcing capabilities;
- Technical support;
- Contractual resources;
- Training and development;
- External trade; and
- Marketing and promotional activities

(2) Both parties are to promote and market each other's products in jointly organized promotional activities.

(3) Both parties are to support each other in the areas of information resources and services, but are not committed to guarantee the realization of any objectives as stipulated in the Agreement.

(4) Either party is entitled to consult on each other's technical resources , and is obliged to respond to either party's request in a timely manner.

(5) Both parties are committed to provide the necessary equipments, venues, human resources and other resources to facilitate the course of the agreed upon co-operative activities at a cost to be determined by both parties.

(6) Either party is entitled to request from the other party and the other party is obliged to facilitate channels in respect of each other's third party resources should such resources be needed in the course of the mutual cooperation.

(7) The Agreement does not limit either party to seek similar co-operative agreements with other companies, educational bodies, government bodies or non-profit organizations.

(8) The Agreement is in effect from the date of signing of the Agreement until 31 December 2005. In the event the terms of this Agreement are not adhered to by either party, or in reasonable circumstances the objectives as stipulated in Paragraph (3) above are not achievable in an effective manner, either party is able to terminate this Agreement.

(9) Any disputes that arise out of disagreement between both parties are to be forwarded to an arbitrator, being China International Trade Committee. The language to be adopted in the arbitration shall be Chinese, with the decision of the arbitrator being final and enforceable on both parties.

(10) Each respective party is to bear the expenses incurred by itself pursuant to the Agreement.

(11) The Agreement is subject to the laws of the PRC.

5. Statement by the Directors

The Directors are of the view that the Agreement is a strategic partnership which is complementary to the Company's business in view of the objectives of the Agreement as set out in Paragraph (3) of this announcement. The Directors are also of the view that should the objectives come to fruition, the results would be beneficial to the Company in gaining a foothold in the PRC, together with the availability of technical resources of GDLC in the PRC.

The Directors are of the opinion that the Agreement will have minimal, or if not no financial impact on AsiaEP's current financial results for the financial year ending 2005. However, such a collaboration with GDLC is expected to add value to the Company in the long run.

6. Directors' and Substantial Shareholders' Interest

The Directors and the substantial shareholders of the Company do not have any interest, directly or indirectly, in the above agreement. In so far as the existing Directors and the substantial shareholders are able to ascertain and are aware, no persons connected to them have any interest, directly or indirectly, in the said Agreement.


This announcement is dated 14 October 2004.