Performance Earn Out Agreement

ANNEX I


ASIA AUTOMOTIVE ACQUISITION CORPORATION


PERFORMANCE ORIENTED EARN-OUT AGREEMENT


This PERFORMANCE ORIENTED EARN-OUT AGREEMENT (the "Agreement"), is entered into as of July 24, 2007 by and between ASIA AUTOMOTIVE ACQUISITION CORPORATION, a public company in the United States ("Party A", or the "Company") and the executives listed on Schedule A hereto ("Party B", or the "Executives"). The Company and Executives are referred to collectively as the "Parties".


RECITALS


WHEREAS THE COMPANY SHALL EMPLOY THE EXECUTIVES FOR A PERIOD OF ONE (1) YEAR STARTING FROM THE DATE OF THIS AGREEMENT, AND THE COMPANY AGREES TO PROVIDE EARN-OUT SHARE PAYMENTS TO THE EXECUTIVES ACCORDING TO THE BUSINESS PERFORMANCE OF Hunan TX Enterprise Co., Ltd. ("TX CHINA"), THE PARTIES AGREE AS FOLLOWS:


AGREEMENT


1. Issuance of Incentive Shares


(1) If the Company achieves or exceeds the Targeted After-


Tax Profit of the 2007 financial year (as defined in Article 2), the Executives or the persons designated by the Executives shall receive, and AAAC shall issue and deliver, two million (2,000,000) shares of the Company's common stock to the Executives within 30 days following the date of filing of the audit of financial statement for the 2007 financial year, with no consideration paid by the Executives ("Incentive Shares");


(2) The Executives may distribute the Incentive Shares among them at their sole discretion;


(3) In the event that the Company does not achieve the Targeted After-Tax Profit for the 2007 financial year, the Company shall not issue any common stock to the Executive with no consideration.


2. Targeted After-Tax Profit


The Company's Targeted After-Tax Profit for the 2007 financial year shall be US$9,500,000 ("Targeted After-Tax Profit"). Such amount shall be exclusive of all one time charges or expenses associated with the acquisition transaction between the Company and TX China, including but not limited to US G ...