Contents :

1. Introduction

The Board of Directors of Nextnation wishes to announce that the Company had signed a Memorandum of Understanding (“MOU”) with Tawasul Telecom Co. LLC. (“TT”), for the purpose of collaborating with each other in relation to research, development and the provision of Internet and wireless technologies and wireless value-added services, and related software and business ancillary thereto (“Subject Activities”) in countries where Nextnation and TT (“Parties”) are currently operating their business.

2. Information on TT

TT is a company registered in the Kingdom of Saudi Arabia which is involved in the provision of telecommunication, Internet and mobile value-added services in the Middle East countries including, but not limited to the Kingdom of Saudi Arabia, Iraq, Kuwait, Palestine, Jordan, and Lebanon.

3. Rationale for the MOU

The MOU is expected to enable Nextnation and its subsidiaries (“Nextnation Group”) to penetrate the fast-growing wireless value added services market and related industries in the Middle East countries and this is in line with the Nextnation Group’s overseas market expansion strategies to diversify and grow its revenue base.

4. Salient terms of the MOU

(i) The Parties hereby agree to collaborate with each other upon the terms and conditions set out in the MOU and to observe good faith towards one another in all matters affecting their dealings hereunder and interests herein, including, but not limited, to the following:-

(a) The roles and responsibilities of the Parties;
(b) The obtaining and granting of the necessary rights, licenses, approvals and grants with respect to the Subject Activities;
(c) Investment by the Parties;
(d) The joint marketing by the Parties; and
(e) Any other ancillary agreements between the Parties that are deemed necessary.

(ii) The Parties agree that each party shall provide all reasonable resources required for all matters relating to the Subject Activities.

(iii) The Parties shall each take all steps as may from time to time be necessary to protect their confidential information and Intellectual Property Rights from unauthorized or inadvertent disclosure or unauthorized use, including, but not limited to, all steps each party takes to protect its own information that it considers proprietary or trade secrets.

(iv) The Parties shall form a working group for the preparation of:-

(a) The due diligence study into the viability of the Subject Activities; and
(b) The implementation plan for the Subject Activities.

5. Financial Effects

The MOU will not have any material effect on the share capital, earnings and net assets of the Company or Nextnation Group for the financial year ending 30 April 2007.

6. Directors and Substantial Shareholders’ Interest

None of the Directors of Nextnation or persons connected to them has any interests, direct or indirect, in the MOU. The Directors of Nextnation are not aware of any substantial shareholders of Nextnation or persons connected to them who has any interest, direct or indirect, in the MOU.

7. Documents available for inspection

The MOU will be available for inspection at the Registered Office of the Company located at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur from Monday to Friday (except public holidays) between 9.00 a.m. to 5.00 p.m.

This announcement is dated 3 October 2006.