EQUITY
      PURCHASE AGREEMENT

     

     

    by
      and
      among 

     

    


     

    HEILONGJIANG
      MOVEUP FOOD CO., LTD.

     

    and

     

    HUNAN
      MULIN MODERN FOOD COMPANY, LTD.

     

    CHEN
      YUANRONG

     

    and

     

    AUSNUTRIA
      DAIRY (HUNAN) COMPANY LTD.

     

     

     

    


     

    


     

    Dated
      as
      of October 25, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      EQUITY
        PURCHASE AGREEMENT

       

      This
        EQUITY
        PURCHASE AGREEMENT,
        dated
        as of October 25, 2007 (this “Agreement”),
        is by
        and among:

       

      1. 
        Heilongjiang Moveup Food Co., Ltd.
        (the
“Purchaser”),
        a
        company duly organized under the laws of the People’s Republic of China
        (“PRC”
or
        “China”)
        with
        the
        registered address at 1
        Qingxiang Street, Kedong Town, Kedong County, Qiqihaer City, Heilongjiang
        Province, China, its legal representative is Liu Shenghui (Chairman of the
        board
        of directors), a PRC citizen;

       

      2. AUSNUTRIA
        DAIRY (HUNAN) COMPANY LTD. (the
        “Company”),
        a
        Sino-foreign equity joint venture duly organized under the PRC laws with
        its
        registered address at 2 Hexi Wangwang East Rd, Changsha, Hunan Province,
        China,
        its legal representative is Yan Weibin (Chairman of the board of directors),
        a
        PRC citizen; 

       

      3. HUNAN
        MULIN MODERN FOOD COMPANY, LTD.
        (the
“Domestic
        Shareholder”), a
        limited
        liability company organized
        and existing under the PRC laws with its registered address at Hi-tech
        Food Industry Park, Gaotang Hill, Hunan Province, China,
        its
        legal representative is Wu Xinxing (Chairman of the board of directors),
        a PRC
        citizen; and 

       

      4. CHEN
        YUANRONG (the
        “Management
        Shareholder”),
        a PRC
        citizen with PRC identification card number 432627195909267514 and address
        at
        9#/F, Xindaxin Building #168 Huangxing Middle Road, Changsha, Hunan Province,
        China.

       

      Each
        of
        Domestic Shareholder and Management Shareholder is referred to herein
        individually as a “Seller”,
        and
        collectively as the “Sellers”).
        Each of
        Purchaser, the Company and Shareholders shall be referred to in this Agreement
        as a “Party”,
        collectively “Parties.”
        

       

      W
        I T N E
        S S E T H:

       

      WHEREAS,
        the
        Sellers own legally and beneficially all of the share
        capital of the Company as more specifically set forth in Schedule I attached
        hereto (“Equity
        Interests”);
        and

       

      WHEREAS,
        the
        Sellers desire to sell to Purchaser, and Purchaser desires to purchase from
        the
        Sellers, the Equity Interests for the Consideration and upon the terms and
        conditions set forth herein.

       

      NOW,
        THEREFORE,
        in
        consideration of the premises and the mutual covenants and agreements
        hereinafter contained and other good and valuable consideration, the adequacy
        of
        which is hereby acknowledged, the Parties hereby agree as follows:

       

      
        
          
          

        

        
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      ARTICLE
        I

       

      DEFINITIONS

       

      1.1 Certain
        Definitions.

       

      For
        purposes of this Agreement, the following terms shall have the meanings
        specified in this Section
        1.1:

       

      “Affiliate”
means,
        with respect to any Person, any other Person that, directly or indirectly
        through one or more intermediaries, controls, or is controlled by, or is
        under
        common control with, such Person, and the term “control” (including the terms
“controlled by” and “under common control with”) means the possession, directly
        or indirectly, of the power to direct or cause the direction of the management
        and policies of such Person, whether through ownership of voting securities,
        by
        contract or otherwise.

       

      “Business
        Day”
means
        any day of the year on which national banking institutions in [Changsha]
        are
        open to the public for conducting business and are not required or authorized
        to
        close.

       

      “CIETAC”
means
        China International Economic and Trade Arbitration Commission.

       

      “Contract”
means
        any written contract, agreement, indenture, note, bond, mortgage, loan,
        instrument, lease, or license.

       

      “Employees”
shall
        mean the natural persons who provide or has provided labor services to the
        Company, including any natural person who, according to applicable Law, may
        be
        deemed as having a de facto labor relationship with the Company, though the
        Company has not signed the written labor contract with or directly paid
        compensation to or paid statutory social insurance contributions for
        him/her.

       

      “Environmental
        Costs and Liabilities”
shall
        mean, with respect to any Person, all liabilities, obligations,
        responsibilities, losses, damages (including punitive damages and consequential
        damages) costs and expenses (including all reasonable fees, disbursements
        and
        expenses of counsel, experts and consultants and costs of investigation and
        feasibility studies), fines, penalties, sanctions and interest incurred as
        a
        result of violation of any Environmental Law or Environmental
        Permit.

       

      “Environmental
        Law”
means
        any applicable Law currently in effect relating to the protection of the
        environment or natural resources, and the regulations promulgated pursuant
        thereto.

       

      “Environmental
        Permit”
shall
        mean, with respect to any Person, any Permit required by Environmental Laws
        for
        the operation of such Person or any of its Subsidiaries, including to any
        Permit
        issued by the environmental protection agency of the PRC (or its local
        counterparts) with respect to such Person or any of its
        Subsidiaries.

       

      
        
          
          

        

        
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      “Escrow
        Amount”
shall
        mean the amount of RMB 70,000,000.00 deposited in the escrow account set
        up
        pursuant to an escrow agreement among Domestic Shareholder, Purchaser, the
        Company and China Merchants Bank, Changsha Branch and the interest accrued
        therein.

       

      “GAAP”
means
        the Accounting Standards for Business Enterprises and other relevant accounting
        regulations, as amended, applicable to the Company issued by the Ministry
        of
        Finance of the PRC as of the date hereof.

       

      “Governmental
        Body”
means
        any government or governmental or regulatory body thereof, or political
        subdivision thereof, whether central, provincial, local or foreign, or any
        agency, instrumentality or authority thereof, or any court or arbitrator
        (public
        or private).

       

      “Indebtedness”
of
        any
        Person means, without duplication, (i) the principal of and, accreted value
        and accrued and unpaid interest in respect of (A) indebtedness of such
        Person for money borrowed and (B) indebtedness evidenced by notes,
        debentures, bonds or other similar instruments for the payment of which such
        Person is responsible or liable; (ii) all obligations of such Person issued
        or assumed as the deferred purchase price of property, all conditional sale
        obligations of such Person and all obligations of such Person under any title
        retention agreement (but excluding trade accounts payable and other accrued
        current liabilities); (iii) all obligations of the type referred to in
        clauses (i) and (ii) of any Persons the payment of which such Person is
        responsible or liable, directly or indirectly, as obligor, guarantor, surety
        or
        otherwise; and (iv) all obligations of the type referred to in
        clauses (i) through (iii) of other Persons secured by any Lien on any
        property or asset of such Person (whether or not such obligation is assumed
        by
        such Person).

       

      “Knowledge
        of the Company”
means
        the actual knowledge of those Persons identified on Schedule
        1.1(a).

       

      “Law”
means
        any foreign, central government, provincial government or local law, statute,
        code, ordinance, rule or regulation.

       

      “Legal
        Proceeding”
means
        any judicial, administrative or arbitral actions, suits or proceedings (public
        or private) by or before a Governmental Body.

       

      “Liability”
means
        any debt, liability or obligation (whether direct or indirect, absolute or
        contingent, accrued or unaccrued, liquidated or unliquidated, or due or to
        become due) and including all costs and expenses relating thereto.

       

      
        
          
          

        

        
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      “Lien”
means
        any lien, encumbrance, pledge, mortgage, deed of trust, security interest,
        claim, lease, charge, option, right of first refusal, easement, servitude
        or
        transfer restriction.

       

      “Material
        Adverse Effect”
means
        a
        material adverse effect on (i) the business, assets, properties, results
        of
        operations or financial condition of the Company or (ii) the ability of the
        Company to consummate the transactions contemplated by this
        Agreement.

       

      “MOFCOM”
means
        the Ministry of Commerce of the PRC or its local counterparts. 

       

      “Order”
means
        any order, injunction, judgment, decree, ruling, writ, assessment or arbitration
        award of a Governmental Body.

       

      “Ordinary
        Course of Business”
means
        the ordinary and usual course of normal day-to-day operations of the Company.
        

       

      “Permits”
means
        any approvals, authorizations, consents, licenses, permits or certificates
        of a
        Governmental Body.

       

      “Permitted
        Exceptions” 
        means
        (i) all defects, exceptions, restrictions, easements, rights of way and
        encumbrances disclosed in land-use rights agreements; (ii) statutory liens
        for
        current Taxes, assessments or other governmental charges not yet delinquent
        or
        the amount or validity of which is being contested in good faith by appropriate
        proceedings; (iii) mechanics’, carriers’, workers’, repairers’ and similar Liens
        arising or incurred in the Ordinary Course of Business; (iv) zoning,
        entitlement and other land use and environmental regulations by any Governmental
        Body; (v) title of a lessor under a capital or operating lease; and (vi)
        such
        other imperfections in title, charges, easements, restrictions and encumbrances
        which would not result in a Material Adverse Effect.

       

      “Person”
means
        any individual, corporation, partnership, limited liability company, firm,
        joint
        venture, association, joint-stock company, trust, unincorporated organization,
        Governmental Body or other entity. 

       

      “PRC”
means
        the People’s Republic of China, which for purposes of this Agreement does not
        include the Hong Kong Special Administrative Region, Macao Special
        Administrative Region or Taiwan.

       

      “Release”
means
        any release, spill, emission, leaking, pumping, injection, deposit, disposal,
        discharge, dispersal, or leaching into the environment.

       

      “SAIC”
means
        the State Administration for Industry and Commerce of the PRC and its local
        counterparts.

       

      
        
          
          

        

        
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      “Shareholders”
means
        Domestic Shareholder, and Management Shareholder.

       

      “Software”
means
        any and all (i) computer programs, including any and all software
        implementations of algorithms, models and methodologies, whether in source
        code
        or object code, and (ii) databases and compilations, including any and all
        data and collections of data, whether machine readable or
        otherwise.

       

      “Tax”
or
        “Taxes”
means
        (i) all federal, state, local or foreign taxes, charges, fees, imposts, levies
        or other assessments, including all net income, gross receipts, capital,
        sales,
        use, ad valorem, value added, transfer, franchise, profits, inventory, capital
        stock, license, withholding, payroll, employment, social security, unemployment,
        excise, severance, stamp, occupation, property and estimated taxes, customs
        duties, fees, assessments and charges of any kind whatsoever, and (ii) all
        interest, penalties, fines, additions to tax or additional amounts imposed
        by
        any Tax Authority in connection with any item described in clause
        (i).

       

      “Tax
        Authority”
means
        any Governmental Body responsible for the administration of any
        Tax.

       

      “Tax
        Return”
means
        any return, report or statement required to be filed with respect to any
        Tax
        (including any attachments thereto, and any amendment thereof), including
        any
        information return, claim for refund, amended return or declaration of estimated
        Tax, and including, where permitted or required, combined, consolidated or
        unitary returns for any group of entities that includes Seller, any of the
        Subsidiaries, or any of their Affiliates.

       

      “Technology”
means,
        collectively, all information, designs, formulae, algorithms, procedures,
        methods, techniques, ideas, know-how, research and development, technical
        data,
        programs, subroutines, tools, materials, specifications, processes, inventions
        (whether patentable or unpatentable and whether or not reduced to practice),
        apparatus, creations, improvements, works of authorship and other similar
        materials, and all recordings, graphs, drawings, reports, analyses, and other
        writings, and other tangible embodiments of the foregoing, in any form whether
        or not specifically listed herein, and all related technology, that are used
        in,
        incorporated in, embodied in, displayed by or relate to, or are used by the
        Company.

       

      1.2 Other
        Definitional and Interpretive Matters.
        Unless
        otherwise expressly provided, for purposes of this Agreement, the following
        rules of interpretation shall apply:

       

      Calculation
        of Time Period.
        When
        calculating the period of time before which, within which or following which
        any
        act is to be done or step taken pursuant to this Agreement, the date that
        is the
        reference date in calculating such period shall be excluded. If the last
        day of
        such period is a non-Business Day, the period in question shall end on the
        next
        succeeding Business Day.

       

      
        
          
          

        

        
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      Currency.
        Any
        reference in this Agreement to RMB shall mean the lawful currency of the
        PRC.
        Any reference in this Agreement to US$ or Dollar shall mean the lawful currency
        of the United States of America. Any reference in this Agreement to Euro
        shall
        mean the lawful currency of the European Union.

       

      Exhibits/Schedules.
        The
        Exhibits and Schedules to this Agreement are hereby incorporated and made
        a part
        hereof and are an integral part of this Agreement. All Exhibits and Schedules
        annexed hereto or referred to herein are hereby incorporated in and made
        a part
        of this Agreement as if set forth in full herein. 

       

      Headings.
        The
        provision of a Table of Contents, the division of this Agreement into Articles,
        Sections and other subdivisions and the insertion of headings are for
        convenience of reference only and shall not affect or be utilized in construing
        or interpreting this Agreement. All references in this Agreement to any
“Article” or “Section” are to the corresponding Section of this Agreement unless
        otherwise specified.

       

      Herein.
        The
        words such as “herein,”
        “hereof,”
        “hereby”
and
        “hereunder”
refer
        to this Agreement as a whole and not merely to a subdivision in which such
        words
        appear unless the context otherwise requires.

       

      Including.
        The
        word “including”
or
        any
        variation thereof means “including,
        without limitation”
and
        shall not be construed to limit any general statement that it follows to
        the
        specific or similar items or matters immediately following it. 

       

      The
        Parties have participated jointly in the negotiation and drafting of this
        Agreement and, in the event an ambiguity or question of intent or interpretation
        arises, this Agreement shall be construed as jointly drafted by the Parties
        and
        no presumption or burden of proof shall arise favoring or disfavoring any
        Party
        by virtue of the authorship of any provision of this Agreement.

       

      ARTICLE
        II

       

      SALE
        AND PURCHASE OF EQUITY INTERESTS, CONSIDERATION; CLOSING

       

      2.1 Sale
        and Purchase of Equity Interests.
        Upon
        the terms and subject to the conditions contained herein, on the Closing
        Date,
        Sellers agree to sell to Purchaser, free and clear of any and all Liens,
        and
        Purchaser agrees to purchase from Sellers, the Equity Interests.

       

      2.2 Consideration.
        

       

      (a) The
        aggregate consideration to be paid by Purchaser to Sellers for the Equity
        Interests shall be an amount equal to RMB206,500,00 (the “Cash
        Consideration”)
        of
        which the Domestic Shareholder shall transfer 43% equity interests of the
        Company, free of any lien, to the Purchaser and receive RMB150,500,000, and
        the
        Management Shareholder shall transfer 32% equity interests of the Company,
        free
        of any lien, to the Purchaser and receive RMB56,000,000 .

       

      
        
          
          

        

        
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      (b) Unless
        otherwise agreed in writing by the Parties, the Cash Consideration represents
        the gross cash amount (including taxes) to be paid by Purchaser to Sellers;
        Sellers will be responsible for clearing all their own tax liabilities and
        filing obligations related to the transaction hereunder and all the Parties
        acknowledge that Purchaser has no responsibility for any of such taxes and
        related costs of the Sellers, including any transfer taxes imposed on
        Sellers.

       

      (c) Purchaser
        agrees to pay such Cash Consideration as the consideration for the Equity
        Interests on the express basis that it shall obtain from Sellers 75% of the
        ownership of the Company and so that Purchaser has control over the Company.
        

       

      2.3 Transaction
        Steps.
        All
        Parties agree that the equity transfer transaction steps under this Agreement
        shall be as follows:

       

      (a) This
        Agreement shall be signed by all Parties;

       

      (b) Each
        Seller shall inform Purchaser of the bank account information. 

       

      (c) The
        Parties shall jointly apply to MOFCOM’s local office, Changsha Bureau of
        Commerce, and obtain the Amended Certificate of Approval;

       

      (d) Within
        three (3) Business Days of receipt of the Amended Certificate of Approval,
        Purchaser shall pay to Sellers the Cash Consideration in full; 

       

      (e) The
        Parties shall take the actions to satisfy the conditions precedent set forth
        in
        Article VII; and 

       

      (f) The
        Parties shall deliver the closing documents in accordance with Section 2.6.
        .

       

      2.4 Payment
        Confirmation.
        Upon
        receipt of the Cash Consideration by each of Sellers, such Seller shall provide
        Purchaser, on the same day of such receipt, with a written acknowledgement
        thereof in the form and substance as set forth in Exhibit
        A
        (“Payment
        Acknowledgement”).
        Such
        Payment Acknowledgements or Purchaser’s wire transfer receipts shall constitute
        the final and conclusive evidence of the completion of Purchaser’s payment
        obligations of Cash Consideration under this Agreement.

       

      2.5. Closing
        Place/Date.
        The
        consummation of the sale and purchase of the Equity Interests provided in
        Section 2.1
        hereof
        (the “Closing”) shall take place at Suite 701, CBD International Plaza, No. 16
        Yong’andongli, Jianguomen Avenue, Beijing, PRC (or at such other place as the
        Parties may designate in writing). The date of Closing (the “Closing
        Date”)
        shall
        be the third Business Day after the date by which Purchaser and Sellers jointly
        obtain the Company’s amended certificate of approval showing Purchaser as the
        holder of 75% Equity Interests (the “Amended
        Certificate of Approval”)
        and
        the amended business license and the restated articles of association from
        the
        SAIC showing the shareholders of the Company have been changed (the
“Amended
        Business License”)
        and
        that all the conditions precedent set forth in Article
        VII
        are
        fully satisfied or waived.
        After
        confirming that the aforesaid conditions have been fully satisfied or waived
        and
        obtaining the Amended Business License and the restated articles of association,
        Sellers and the Company shall jointly execute a closing certificate in the
        form
        as set out in Exhibit
        B
        hereto
        (the “Closing
        Certificate”).
        

       

      
        
          
          

        

        
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      2.5 Deliveries
        on the Closing Date.
        On the
        Closing Date and prior to the execution of the Closing Certificate, Sellers
        shall deliver or cause the Company to deliver, as applicable, to Purchaser
        the
        items as listed in Exhibit
        C.

       

      2.7 Rights
        and Liabilities.
        After
        the transfer of the 75% Equity Interests, the Company shall continue assuming
        its existing rights and liabilities, and the Sellers will not take on any
        such
        rights or liabilities. 

       

      ARTICLE
        III

       

      SELLERS’
        REPRESENTATIONS AND WARRANTIES RELATING TO SELLERS

       

      Sellers
        hereby represent, severally and not jointly, to Purchaser as of the Effective
        Date and as of the Closing Date that:

       

      3.1 Organization
        and Good Standing.
        The
        Domestic Shareholder is a company duly organized, validly existing and in
        good
        standing under the laws of the jurisdiction of its registration. Management
        Shareholder is an individual with good civil capability. Each Seller has
        all
        requisite power and authority to own, lease and operate its properties and
        to
        carry on its business. 

       

      3.2 Execution,
        Authorization and Validity.
        Each
        Seller has full legal power and authorization to execute and deliver this
        Agreement and each other agreement, document, or instrument or certificate
        to be
        delivered by such Seller as contemplated by this Agreement or to be executed
        by
        such Seller in connection with the consummation of the transactions
        contemplated by this Agreement (the “Seller
        Documents”),
        to
        perform its obligations hereunder and thereunder, and to consummate the
        transactions contemplated hereby and thereby. This Agreement and the Seller
        Documents have been duly and validly executed and delivered by each Seller
        and,
        assuming due authorization, execution and delivery by the Purchaser, constitute
        a legal, valid and binding obligation of such Seller, enforceable against
        it in
        accordance with its terms. 

       

      
        
          
          

        

        
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      3.3 Conflicts;
        Consents of Third Parties.

       

      (a) None
        of
        the execution and delivery by each Seller of this Agreement or Seller Document,
        the consummation of the transactions contemplated hereby or thereby, or
        compliance by such Seller with any of the provisions hereof or thereof will
        conflict with, or result in any violation of or default (with or without
        notice
        or lapse of time, or both) under, or give rise to a right of termination
        or
        cancellation under any provision of (i) any Contract, or Permit to which
        such Seller is a party or by which any of the properties or assets of such
        Seller are bound; (ii) any Order of any Governmental Body applicable to such
        Seller or by which any of the properties or assets of such Sellers are bound;
        or
        (iii) any applicable Law, except in each case where such Contracts, Orders
        or
        applicable Law are adopted or otherwise take effect after the Closing or
        where
        such violation or default arises from actions or omissions by any Person
        other
        than such Seller.

       

      (b) No
        consent, waiver, approval, Order, Permit or authorization of, or declaration
        or
        filing with, or notification to, any Person or Governmental Body is
        required on the part of each Seller in connection with the execution and
        delivery of this Agreement, the Seller Documents, the compliance by such
        Seller
        with any of the provisions hereof or thereof, or the consummation of the
        transactions contemplated hereby or thereby, except for consents set forth
        in
Schedule
        3.3(b).

       

      3.4 Ownership
        and Transfer of Equity Interests.
        Sellers
        are the true and lawful owners of the Equity Interests, free and clear of
        any
        Liens. Sellers have the right and capacity to sell, transfer, assign and
        deliver
        such Equity Interests as provided in this Agreement, and such delivery will
        convey to Purchaser the good and marketable Equity Interests, free and clear
        of
        any Liens. 

       

      3.5 Litigation.
        Except
        as set forth in Schedule
        3.5,
        there
        is no Legal Proceeding pending or threatened against Sellers or to which
        Sellers
        are otherwise parties relating to this Agreement, Seller Document or the
        transactions contemplated hereby or thereby.

       

      3.6 Financial
        Advisors.
        No
        Person has acted, directly or indirectly, as a broker, finder or financial
        advisor for Sellers in connection with the transactions contemplated by this
        Agreement and no Person is or will be entitled to any fee or commission or
        like
        payment in respect thereof.

       

      
        
          
          

        

        
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      ARTICLE
        IV

       

      SELLERS’
        REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY

       

      Sellers
        hereby represent, severally and not jointly, to Purchaser as of the Effective
        Date and as of the Closing Date that 

       

      4.1 Organization
        and Good Standing.
        The
        Company is a limited liability company duly organized in substance and procedure
        in accordance with the laws of the PRC, validly existing and in good standing
        under the laws of the PRC and has all requisite power and authority to own,
        lease and operate its properties and to carry on its business as now conducted
        and as currently proposed to be conducted. 

       

      4.2 Authorization
        of Agreement.
        The
        Company has all requisite power, authority and legal capacity to execute
        and
        deliver this Agreement and each agreement, document, or instrument or
        certificate to be delivered by the Company as contemplated by this Agreement
        or
        to be executed by the Company in connection with the transactions contemplated
        by this Agreement (the “Company
        Documents”),
        to
        perform its obligations under this Agreement and the Company Documents and
        to
        consummate the transactions contemplated hereby and thereby. The Company
        has
        taken all required actions to authorize and approve the execution, delivery
        and
        performance of this Agreement and each of the Company Documents and the
        consummation of the transactions contemplated hereby and thereby. 

       

      4.3 Conflicts;
        Consents of Third Parties.

       

      (a) None
        of
        the execution and delivery by the Company of this Agreement or the Company
        Documents, the consummation of the transactions contemplated hereby or thereby,
        or compliance by the Company with any of the provisions hereof or thereof
        will
        conflict with, or result in any violation or breach of, conflict with or
        default
        (with or without notice or lapse of time, or both) under, or give rise to
        a
        right of termination, cancellation or acceleration of any obligation or to
        loss
        of a material benefit under, or give rise to any obligation of the Company
        to
        make any payment under, or to the increased, additional, accelerated or
        guaranteed rights or entitlements of any Person under, or result in the creation
        of any Liens upon any of the properties or assets of the Company under, any
        provision of (i) the articles of association or comparable organizational
        documents of the Company; (ii) any Contract, or Permit to which the Company
        is a party or by which any of the properties or assets of the Company is
        bound;
        (iii) any Order applicable to the Company or any of its properties or assets;
        or
        (iv) any applicable Law, except in each case where such organizational
        documents, Contracts, Permits, Orders or applicable Law are adopted or otherwise
        take effect after the Closing or where such violation or default arises from
        actions or omissions by any Person other than the Company or
        Sellers.

       

      (b) No
        consent, waiver, approval, Order, Permit or authorization of, or declaration
        or
        filing with, or notification to, any Person or Governmental Body is
        required on the part of the Company in connection with (i) the execution
        and
        delivery of this Agreement and the Company Documents, respectively, the
        compliance by the Company with any of the provisions hereof and thereof,
        or the
        consummation of the transactions contemplated hereby or thereby, or
        (ii) the continuing validity and effectiveness immediately following the
        Closing of any Permit or Contract of the Company, except for consents set
        forth
        in Schedule
        4.3(b).
        

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      4.4 Capitalization.

       

      (a) The
        registered capital with respect to all of the Equity Interests in the Company
        have been fully paid up. Such Equity Interests were issued to Sellers not
        in
        violation of any purchase or call option, right of first refusal, subscription
        right, preemptive right or any similar rights. All of the Equity Interests
        in
        the Company are owned of record by the shareholders of the Company.

       

      (b) The
        Equity Interests represents 75% of the ownership interest in the Company.
        There
        is no existing option, warrant, call, pre-emptive rights, rights of first
        refusal, other purchase rights or Contract to which Sellers or the Company
        are
        parties requiring, and there are no other Contracts or securities of the
        Company
        outstanding which would require sale of, or be convertible into or exchangeable
        for, or evidence ownership of the right to purchase Equity Interests or any
        part
        thereof. There are no obligations, contingent or otherwise, of the Company
        to
        (i) repurchase any Equity Interests, (ii) declare dividends or pay any declared
        but unpaid dividends on its Equity Interests, or (iii) pledge or create Liens
        or
        other encumbrances on or otherwise dispose of the Equity Interests with respect
        to the obligations of any Person. There is no outstanding profit participation
        or similar rights with respect to the Company. There are no bonds, notes
        or
        other indebtedness of the Company having the right to vote or consent (or,
        convertible into, or exchangeable for, securities having the right to vote
        or
        consent) on any matters on which equity holders of the Company may vote.
        There
        are no voting trusts, irrevocable proxies or other Contracts or understandings
        to which the Company or Sellers is a party or is bound with respect to the
        voting or consent of any Equity Interests. 

       

      4.5 Subsidiaries.
        The
        Company has no Subsidiary or branch.

       

      4.6 Corporate
        Records.

       

      (a) The
        Company has delivered to Purchaser true, correct, current and complete copies
        of
        its business license and articles of association (each certified in writing
        by
        the authorized representative of the Company as true, correct, current and
        complete copies thereof with the official seal of the Company affixed thereto)
        or comparable organizational documents of the Company in each case as amended
        and in effect on the due date hereof, including all amendments
        thereto.

       

      (b) The
        meeting resolutions of the Company previously made available to Purchaser
        and
        kept at the Company after the Closing Date contain all of the resolutions
        made
        by the Company a and such resolutions are true, correct and complete and
        accurately reflect all other requisite actions of the equity holders and
        board
        of directors of the Company. 

       

      4.7 Financial
        Statements.
        

       

      (a) The
        Company has delivered to Purchaser complete and accurate copies of (i) the
        financial statements and reports of the Company for the year of 2004, 2005
        and
        2006 that were filed with Changsha SAIC, and (ii) the unaudited financial
        statements for the first two quarters of 2007 (collectively, the “Financial
        Statements”).
        The
        Financial Statements with adjustment mutually agreed by Sellers and Purchaser
        present fairly in all material respects the financial position, results of
        operations and cash flows as at the dates and for the periods indicated therein.
        The Company has maintained all financial statements and records for those
        periods of times and as required by applicable Law, except where failure
        to do
        so could not be expected to cause any Material Adverse Effect. The adjusted
        balance sheet of the Company dated as of July 19, 2007 is referred to herein
        as
        the “Base
        Date Balance Sheet”.
        July
        19, 2007 is referred to herein as the “Reference
        Date”.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      (b) All
        books, records and accounts of the Company and its Affiliates are accurate
        and
        complete and are maintained in all material respects in accordance with good
        business practice and all applicable Law. The Company and its Affiliates
        maintain systems of internal accounting controls sufficient to provide
        reasonable assurances that: (i) transactions are executed in accordance with
        management’s general or specific authorization; (ii) transactions are recorded
        as necessary to permit the preparation of financial statements in conformity
        with accounting principles and methods consistently applied by the Company
        and
        to maintain accountability for assets; (iii) access to assets is permitted
        only in accordance with management’s general or specific authorization; and
        (iv) the recorded accountability for assets is compared with the actual
        levels at reasonable intervals and appropriate action is taken with respect
        to
        any differences.

       

      (c) All
        of
        the Financial Statements have been prepared from, are in accordance with
        and
        accurately reflect the books and records of the Company and its Affiliates.
        The
        reports of the Company’s independent auditors regarding the financial statements
        have not been withdrawn, supplemented or modified, and the Company has received
        no communication from its independent auditors concerning any such withdrawal,
        supplement or modification. Sellers have provided to Purchaser copies of
        all
        issued auditors’ reports, letters to management regarding accounting practices
        and systems of internal controls, and all responses to such letters from
        management (if any), whether the same are issued to Sellers or any Person acting
        on their behalf.

       

      (d) The
        Company’s senior managers have disclosed, based on their most recent evaluation,
        to the Company’s independent auditors (i) all significant deficiencies in the
        design or operation of internal controls which could adversely affect the
        Company’s ability to record, process, summarize and report financial data and
        have identified for the Company’s independent auditors any material weaknesses
        (if any) in internal controls and (ii) any fraud, whether or not material
        (if
        any), that involves management or other Employees who have a significant
        role in
        the Company’s internal controls.

       

      (e) The
        Company has established and maintains disclosure controls and procedures;
        such
        disclosure controls and procedures are designed to ensure that material
        information relating to the Company, is made known to the Company’s principal
        executive officer and its principal officer of the financial department by
        others within the Company; and, to the Knowledge of the Company and Sellers,
        such disclosure controls and procedures are effective in timely alerting
        the
        Company’s principal executive officer and its principal officer of the financial
        department to material information.

       

      (f) As
        of the
        Closing, the Liabilities of the Company consists of only (i) bank loans,
        (ii)
        advance from customers, (iii) notes payables, (iv) trading payables, (v)
        tax
        payables in the Ordinary Course of Business, excluding any penalty or similar
        tax liabilities, and (vi) other trading related liabilities and
        accruals.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      4.8 No
        Undisclosed Liabilities.
        The
        Company does not have any Indebtedness or Liabilities (whether or not required
        under GAAP to be reflected on a balance sheet or the notes thereto) other
        than
        those (i) specifically reflected on and fully reserved against in the Base
        Date
        Balance Sheet or (ii) incurred in the Ordinary Course of Business since the
        Reference Date and that are immaterial to the Company (for the avoidance
        of
        doubt, incurring any bank loan or other long-term liabilities shall not be
        deemed as within the Ordinary Course of Business).

       

      4.9 Absence
        of Certain Specific Developments.
        Except
        as expressly contemplated by this Agreement or as set forth on Schedule 4.9,
        since
        the Reference Date (a) the Company has conducted their business and maintained
        their organizations, operation and goodwill only in the Ordinary Course of
        Business and (b) there has not been any event, change, occurrence or
        circumstance that, individually or in the aggregate, has had or could reasonably
        be expected to have a Material Adverse Effect.     

       

      4.10 Taxes.

       

      (a) (i)
        All
        Tax Returns required to be filed by or on behalf of the Company and any of
        its
        Affiliates have been duly and timely filed with the appropriate Tax Authority
        in
        all jurisdictions in which such Tax Returns are required to be filed (after
        giving effect to any valid extensions of time in which to make such filings),
        and all such Tax Returns are true, complete and correct in all respects;
        and
        (ii) all Taxes payable by or on behalf of each of the Company and any
        consolidated group of which the Company is or was a member have been fully
        and
        timely paid.

       

      (b) The
        Company has complied in all respects with all applicable Law relating to
        the
        payment and withholding of Taxes (including the Employees’ individual income
        taxes which are withheld and paid by the Company on behalf of the Employees)
        and
        has duly and timely withheld and paid over to the appropriate Tax Authority
        all
        amounts required to be so withheld and paid under all applicable
        Law.

       

      (c) Purchaser
        has received complete copies of: (i) all PRC central government, provincial
        government, and local Tax Returns of the Company relating to the taxable
        periods
        since December 31, 2004; and (ii) appropriate documentation from the applicable
        Tax Authority evidencing the tax-exempt status of Company, if there is any.
        All
        Tax Returns filed by or on behalf of the Company have been examined by the
        relevant Tax Authority.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      (d) Schedule
        4.10(d)
        lists
        (i) all material types of Taxes paid, and all types of Tax Returns filed
        by or
        on behalf of Company, and (ii) all of the Governmental Bodies that impose
        such
        Taxes or with respect to which the Company has a duty to file such Tax Returns.
        No claim has been made by a Tax Authority where the Company does not file
        Tax
        Returns such that it is or may be subject to that taxation.

       

      (e) All
        deficiencies asserted or assessments made as a result of any examinations
        by any
        Tax Authority of the Tax Returns of, or including, the Company have been
        fully
        paid, and there are no other audits or investigations by any Tax Authority
        in
        progress, nor have Sellers, or the Company received any notice from any Tax
        Authority that it intends to conduct such an audit or investigation. No issue
        has been raised by a Tax Authority in any prior examination of the Company
        which, by application of the same or similar principles, could reasonably
        be
        expected to result in a proposed deficiency for any subsequent taxable
        period.

       

      (f) Neither
        the Company nor any other Person on its behalf has (i) any application pending
        with any Tax Authority requesting permission for any changes in accounting
        methods that relate to the Company, (ii) requested any extension of time
        within
        which to file any Tax Return, which Tax Return has since not been filed,
        (iii)
        granted any extension for the assessment or collection of Taxes, which Taxes
        have not since been paid, or (iv) granted to any Person any power of attorney
        that is currently in force with respect to any Tax matter.

       

      (g) The
        Company is not a party to any tax sharing, allocation, indemnity or similar
        agreement or arrangement (whether or not written) pursuant to which it will
        have
        any obligation to make any payments after the Closing.

      


      (h) There
        are
        no Liens as a result of any unpaid Taxes upon any of the assets, properties
        or
        inventories of the Company. 

       

      (i) The
        Company has never been a member of any consolidated, combined or unitary
        group
        of corporations for any Tax purposes other than a group in which the Company
        is
        the common parent.

       

      (j) The
        Company has never had a permanent establishment in any country other than
        the
        PRC, and has never engaged in a trade or business in any country other than
        the
        PRC.

       

      (k) There
        is
        no taxable income of the Company that will be required under applicable tax
        Law
        to be reported by the Purchaser or any of its Affiliates, including the Company,
        for a taxable period beginning after the Closing Date which taxable income
        was
        realized (and reflects economic income arising) prior to the Closing Date,
        save
        as specifically stated in writing by Sellers prior to the Closing
        Date.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      (l) The
        Company has not received any official notification from any Tax Authority
        within
        three (3) years prior to Closing threatening a material change to the Company,
        other than those which affect all taxpayers in the same industry.

       

      (m) The
        Company does not receive any tax refunds, credits, benefits, deductions,
        exemptions or otherwise from any of PRC Tax Authority which is not in compliance
        with applicable Law.

       

      (n) The
        Company has not changed its residence for tax purpose or its accounting
        reference date or the accounting procedures or principles by reference to
        which
        its accounts are drawn up; or, except as required by applicable Law or the
        condition imposed by any Tax Authority, make any tax election, adopt or change
        any accounting method for tax purposes, file any amended Tax Return or report,
        consent to or enter into any closing agreement or similar agreement with
        any Tax
        Authority, consent to or settle or compromise any tax claim or assessment
        or
        take any position inconsistent with any past practice on any Tax Return or
        report.

       

      4.11 Real
        Property.

       

      (a) Schedule
        4.11(a)
        sets
        forth a complete list of (i) all real property which is occupied by the Company
        as of the date of this Agreement (including any real property which the Company
        has acquired ownership (if applicable) or right to use thereof (individually,
        an
“Occupied
        Property”
and
        collectively, the “Occupied
        Properties”);
        the
        Occupied Property shall be transferred to the Company, by any means, after
        the
        Purchaser pays the Advance Payment, which shall be one of the conditions
        precedent to Purchaser’s obligations of closing; (ii) all real property and
        interests in real property leased by the Company (individually, a “Real
        Property Lease”
and
        collectively, the “Real
        Property Leases”
and,
        together with the Occupied Properties, being referred to herein individually
        as
        a “Company
        Property”
and
        collectively as the “Company
        Properties”)
        as
        lessee or lessor, including a description of each such Real Property Lease
        (including the name of the third party lessor or lessee and the date of the
        lease or sublease and all amendments thereto). The Company has good and
        marketable right to all Occupied Properties, free and clear of all Liens
        of any
        nature whatsoever, except those Liens set forth on Schedule 4.11(a).
        The
        Company Properties constitute all interests in real property currently used,
        occupied or currently held for use in connection with the business of the
        Company and which are necessary for the continued operation of the business
        of
        the Company as the business is currently conducted. All of the Company
        Properties and buildings, fixtures and improvements thereon (i) are in good
        operating condition without structural defects, and all mechanical and other
        systems located thereon are in good operating condition, and no condition
        exists
        requiring material repairs, alterations or corrections and (ii) are suitable,
        sufficient and appropriate in all respects for their current and contemplated
        uses. None of the improvements located on the Company Properties constitute
        a
        non-conforming use or otherwise require any special dispensation, variance
        or
        special permit under any applicable Law. The Company has delivered to Purchaser
        true, correct and complete copies of (i) all documentations concerning their
        rights to the Occupied Properties and (ii) the Real Property Leases, together
        with all amendments, modifications or supplements, if any, thereto. The Company
        Properties are not subject to any leases, rights of first refusal, options
        to
        purchase or rights of occupancy, except the Real Property Leases set forth
        on
        Schedule 4.11(a).

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      (b) the
        Company, as applicable, has a valid, binding and enforceable leasehold interest
        under each of the leased Company Property under which it is a lessee, free
        and
        clear of all Liens other than Permitted Exceptions. Each of such Company
        Property is in full force and effect. the Company is not in default under
        any
        contracts relating to Company Property, and no event has occurred and no
        circumstance exists which, if not remedied, and whether with or without notice
        or the lapse of time, or both, would result in such a default. The Company
        has
        not received or given any notice of any default or event that with notice
        or
        lapse of time, or both, would constitute a default by the Company under any
        of
        the contracts relating to the Company Property and, to the Knowledge of the
        Company and Sellers, no other party is in default thereof, and no party to
        any
        of such contracts has exercised any termination rights with respect
        thereto.

       

      (c) The
        Company has all certificates and Permits necessary or useful for the current
        use
        and operation of each Company Property, and the Company has fully complied
        with
        all material conditions of the Permits applicable to them. No default or
        violation, or event that with the lapse of time or giving of notice or both
        would become a default or violation, has occurred in the due observance of
        any
        Permit. 

       

      (d) There
        does not exist any actual or, to the Knowledge of the Company and Sellers,
        threatened or contemplated condemnation or eminent domain proceedings that
        affect the Company Property or any part thereof, and none of the Company
        or
        Sellers has received any notice, oral or written, of the intention of any
        Governmental Body or other Person to take or use all or any part
        thereof.

       

      (e) None
        of
        Sellers or the Company has received any notice from any insurance company
        that
        has issued a policy with respect to the Company Property requiring performance
        of any structural or other repairs or alterations to such property.

       

      (f) The
        Company does not own, hold, or is not obligated under or is a party to, any
        contractual right to purchase, acquire, sell, assign or dispose of any real
        estate or any portion thereof or interest therein.

       

      (g) The
        Company has not entered into any non arm-length transaction relating to any
        real
        property, including Company Property, within three (3) years prior to the
        Closing, other than as set forth in Schedule
        4.11(g). 

       

      4.12 Tangible
        Personal Property.

       

      (a) The
        Company has good and marketable title or right to use all of the items of
        tangible personal property used in its business (except as sold or disposed
        of
        in the Ordinary Course of Business not in violation of this Agreement), free
        and
        clear of any and all Liens, other than the Permitted Exceptions. All such
        items
        of tangible personal property that, individually or in the aggregate, are
        material to the operation of the business of the Company are in good condition
        and in a state of good maintenance and repair (ordinary wear and tear excepted)
        and are suitable for the purposes used.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      (b) Schedule
        4.12(b)
        sets
        forth all leases of personal property (“Personal
        Property Leases”)
        involving annual payments in excess of RMB 75,000 relating to personal property
        used in the business of the Company or to which the Company is a party or
        by
        which the properties or assets of the Company are bound. All of the items
        of
        personal property under the Personal Property Leases are in good condition
        and
        repair (ordinary wear and tear excepted) and are suitable for the purposes
        used,
        and such property is in all material respects in the condition required of
        such
        property by the terms of the lease applicable thereto during the term of
        the
        lease. The Company has delivered to Purchaser true, correct and complete
        copies
        of the Personal Property Leases, together with all amendments, modifications
        or
        supplements thereto. 

       

      (c) The
        Company has a valid and enforceable leasehold interest under each of the
        Personal Property Leases under which they are lessees. Each of the Personal
        Property Leases is in full force and effect and the Company has not received
        or
        given any notice of any default or event that with notice or lapse of time,
        or
        both, would constitute a default by the Company under any of the Personal
        Property Leases and, to the Knowledge of Company and Sellers, no other party
        is
        in default thereof, and no party to the Personal Property Leases has exercised
        any termination rights with respect thereto.

       

      4.13 Intellectual
        Property.

       

      (a) Schedule
        4.13(a)
        sets
        forth an accurate and complete list of all the Intellectual Property owned
        or
        used by the Company and Schedule 4.13(a)
        lists
        the jurisdictions in which each such item of Intellectual Property has been
        issued or registered or in which any such application for such issuance and
        registration has been filed (if applicable). For purpose of this Agreement,
        “Intellectual
        Property”
shall
        mean all intellectual property rights owned, licensed to or used by the Company
        arising from or in respect of the following, whether protected, created or
        arising under the laws of the PRC or any other jurisdiction: (i) all
        trademarks, service marks, trade names, service names, brand names, trade
        dress
        rights, logos, Internet domain names and corporate names and general intangibles
        of a like nature, together with the goodwill associated with any of the
        foregoing, registered or unregistered, and all applications, registrations
        and
        renewals thereof, (collectively, “Marks”),
        (ii)
        all patents and applications therefor, including continuations, divisionals,
        continuations-in-part, or reissues of patent applications and patents issuing
        thereon, and all similar rights arising under applicable Law (collectively,
        “Patents”)
        (iii) registered or unregistered copyrights and registrations and
        applications therefor (collectively, “Copyrights”), (iv)
        discoveries, concepts, ideas, research and development, know-how, formulas,
        inventions, compositions, industrial production processes and techniques,
        technical data, procedures, designs, drawings, specifications, databases,
        and
        other proprietary or confidential information, including customer lists,
        supplier lists, pricing and cost information, and business and marketing
        plans
        and proposals of the Company (collectively, “Trade
        Secrets”),
        and
        (v) all Software and Technology of the Company. “Intellectual
        Property Licenses”
shall
        mean (i) any grant by the Company to another Person of any right to use any
        of
        the Intellectual Property, and (ii) any grant by another Person to the Company
        of a right to use such Person’s intellectual property rights included in the
        Intellectual Property of the Company. 

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      (b) Except
        as
        disclosed in Schedule
        4.13(b),
        the
        Company owns all right, title and interest in and to all Intellectual Property
        required to be set forth on Schedule
        4.13(a).
        All
        necessary registration, maintenance, renewal, and other relevant filing fees
        due
        through the date hereof in connection therewith have been timely paid and
        all
        necessary documents and certificates in connection therewith have been timely
        filed with the relevant patent, copyright, trademark, or other authorities
        in
        the PRC [or
        foreign jurisdictions, as the case may be,]
        for the
        purposes of maintaining such registered Intellectual Property in full force
        and
        effect. Except
        as
        set forth in Schedule
        4.13(b),
        there
        are, as of the date of this Agreement, no filings, payments or similar actions
        that must be taken by the Company within 120 days following the Closing Date
        for
        the purposes of obtaining, maintaining, perfecting or renewing any such
        registrations and applications. 

       

      (c) Except
        as
        set forth on Schedule
        4.13(c),
        the
        Company is the sole and exclusive owner of all right, title and interest
        in and
        to, or have valid and continuing rights to use, sell and license, all Software,
        Technology and other Intellectual Property used in the conduct of the business
        and operations of the Company as presently conducted and as currently proposed
        to be conducted, free and clear of all Liens or obligations to others. The
        Software, Technology or other Intellectual Property owned, used, licensed,
        practiced or otherwise commercially exploited by the Company and the Company’s
        present and currently proposed business practices and methods, do not infringe,
        violate or constitute an unauthorized use or misappropriation of any Marks,
        Copyright, Trade Secret, Patent or other similar right, of any Person. The
        Intellectual Property owned or used by or licensed to the Company includes
        all
        of the intellectual property rights used by the Company to conduct its business
        in the manner in which such business is currently being conducted and as
        currently contemplated to be conducted.

       

      (d) Except
        with respect to licenses of Software (i) distributed as “freeware” or (ii)
        distributed via Internet access without charge and for use without charge,
        Schedule
        4.13(d)
        sets
        forth a list, complete and accurate as of the date of this Agreement, of
        all
        agreements pursuant to which the Company licenses in or otherwise is authorized
        to use all Software, Technology and other Intellectual Property used in the
        conduct of the business and operations of the Company as presently conducted
        and
        as currently contemplated to be conducted. The Company has delivered to
        Purchaser correct, complete and current copies of all such agreements. Except
        pursuant to the agreements described in clause (i) above or identified on
        Schedule
        4.13(d),
        the
        Company is not required, obligated, or under any liability whatsoever to
        make
        any payments by way of royalties, fees or other payments described in the
        applicable agreements, to any third party with respect to any Software,
        Technology and other Intellectual Property used in the conduct the business
        and
        operations of the Company as presently conducted.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      (e) Except
        as
        set forth on Schedule
        4.13(e),
        neither
        the execution of this Agreement or Company Documents, the consummation of
        the
        transactions contemplated hereby or thereby, nor the conduct of the business
        and
        operations of the Company as presently conducted and as currently proposed
        to be
        conducted will result in: (i) the Company granting to any third party any
        right
        to Intellectual Property owned by, or licensed to, the Company, or (ii) the
        Company being bound by, or subject to, any non-compete or other restriction
        on
        the operation or scope of its business. Following the Closing, the Company
        will
        have the right to exercise all of its current rights under agreements granting
        rights to the Company with respect to Software, Technology and other
        Intellectual Property of a third party to the same extent and in the same
        manner
        it would have been able to had the transactions contemplated by this Agreement
        not occurred, and without the payment of any additional consideration as
        a
        result of such transaction and without the necessity of any third party consent
        as a result of such transaction. 

       

      (f) Schedule
        4.13(f)
        sets
        forth a complete and accurate list of all Contracts to which the Company
        is a
        party (i) granting any Intellectual Property Licenses, (ii) containing
        a covenant not to compete or otherwise limiting its ability to use or exploit
        fully any of the Intellectual Property or (iii) containing an agreement to
        indemnify any other Person against any claim of infringement, violation,
        misappropriation or unauthorized use of any Intellectual Property. The Company
        has delivered to Purchaser true, correct and complete copies of each Contract
        set forth on Schedule
        4.13(f),
        together with all amendments, modifications or supplements thereto.

       

      (g) Each
        of
        the Intellectual Property Licenses is in full force and effect and is the
        legal,
        valid and binding obligation of the Company, enforceable against the parties
        thereto in accordance with its terms. The Company is not in default under
        any
        Intellectual Property License, nor, to the Knowledge of the Company and Sellers,
        is any other party to any Intellectual Property License in default thereunder,
        and no event has occurred that with the lapse of time or the giving of notice
        or
        both would constitute a default thereunder. No party to any of the Intellectual
        Property Licenses including Sellers (and other than the Company) has the
        right
        to use the Marks on products identical or similar to those sold in connection
        with the business as presently conducted or as presently proposed to be
        conducted by the Company after the Closing. No party to any of the Intellectual
        Property Licenses has provided notice that it intends to exercise or has
        exercised any termination rights with respect thereto.

       

      (h) No
        Trade
        Secret of the Company has been authorized to be disclosed or has been actually
        disclosed by the Company to any of its Employee or any third party other
        than
        pursuant to a written non-disclosure agreement including restrictions on
        the
        disclosure and use of the Intellectual Property consistent with customary
        practices in the industry in which the Company operates. The Company has
        taken
        appropriate security measures to protect the secrecy, confidentiality and
        value
        of all the Trade Secrets of the Company, which measures are consistent with
        customary practices in the industry in which the Company operates, and including
        any program required by applicable Law in respect of designating and preventing
        the disclosure of Trade Secrets.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      (i) Schedule
        4.13(i)
        sets
forth
        a
        complete and accurate list of (i) all Software and computer hardware
(other
        than “off the shelf” Software or hardware that is generally commercially
        available) that
        is
        owned exclusively by,
        or is
        used in the business of,
        the
        Company and (ii) all Software and computer hardware (other
        than “off the shelf” Software or hardware that is generally commercially
        available) that
        is
        not exclusively owned by the Company or is used
        in
the
        business of the Company. After the Closing, (x) all Software and computer
        hardware (other
        than “off the shelf” Software hardware that is generally commercially available)
currently
        owned exclusively by the Company will continue to be owned exclusively by
        the
        Company, (y) the Company will have the same continuing rights to use all
        Software and computer hardware (other
        than “off the shelf” Software or hardware that is generally commercially
        available) that
        is
        not currently exclusively owned by the Company and is currently used in the
        business as they did before the Closing, and (z) the Software and computer
        hardware currently owned exclusively by the Company are sufficient for the
        conduct of the business the Company as presently conducted and as proposed
        to be
        conducted.

       

      (j) Except
        as
        disclosed in Schedule
        4.13(j),
        as of
        the date hereof, the Company is not the subject of any pending or, to the
        Knowledge of the Company and Sellers, any threatened Legal Proceeding which
        involves a claim of infringement, misappropriation, unauthorized use, or
        violation of any intellectual property rights by any Person against the Company
        or challenging the ownership, use, validity or enforceability of any
        Intellectual Property. The Company has not received notice of any such
        threatened claim and, to the Knowledge of the Company and Sellers, there
        are no
        facts or circumstances that would form the basis for any claim of infringement,
        unauthorized use, misappropriation or violation of any intellectual property
        rights by any Person against the Company, or challenging the ownership, use,
        validity or enforceability of any Intellectual Property.

       

      (k) All
        of
        the Intellectual Property owned by the Company is valid and enforceable.
        Except
        as disclosed in Schedule
        4.13(k), to
        the
        Knowledge of the Company and Sellers, no Person is infringing, violating,
        misusing or misappropriating any material Intellectual Property of the Company,
        and no such claims have been made against any Person by the Company.


       

      (l) There
        are
        no Orders to which the Company is a party or by which the Company is bound
        which
        restrict, in any material respect, the right to use any of the Intellectual
        Property. 

       

      (m) The
        consummation of the transactions contemplated by this Agreement will not
        result
        in the loss or impairment of Purchaser’s right to own or use any of the
        Intellectual Property.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      (n) No
        present or former Employee has any right, title, or interest, directly or
        indirectly, in whole or in part, in any Intellectual Property owned, licensed
        to
        or used by the Company. To the Knowledge of the Company and Sellers, no
        Employee, consultant or independent contractor of the Company is, as a result
        of
        or in the course of such Employee’s, consultant’s or independent contractor’s
        engagement by the Company, in default or breach of any material term of any
        employment agreement, non-disclosure agreement, assignment of invention
        agreement or similar agreement.

       

      (o) The
        Company is in compliance with any posted privacy policies and any laws or
        regulations relating
        to
        personally identifiable information.
        

       

      4.14 Material
        Contracts.

       

      (a) Schedule
        4.14(a)
        sets
        forth all of the following currently effective and enforceable Contracts
        to
        which the Company is a party or by which it is bound (collectively, the
“Material
        Contracts”):

       

      (i) Contracts
        with any Seller or any current officer or director of the Company (other
        than
        Contracts made in the Ordinary Course of Business on terms generally available
        to similarly situated non-affiliated parties);

       

      (ii) Contracts
        with any labor union or association representing any employee of the
        Company;

       

      (iii) Contracts
        for the sale of any of the assets of the Company other than in the Ordinary
        Course of Business, for consideration in excess of RMB
        1,000,000.00;

       

      (iv) Contracts
        relating to any acquisition to be made by the Company of any operating business
        or the capital stock of any other Person, in each case for consideration
        in
        excess of RMB 1,000,000.00;

       

      (v) Contracts
        relating to the incurrence of Indebtedness, or the making of any loans, in
        each
        case involving amounts in excess of RMB1,000,000.00;

       

      (vi) Contracts
        which involve the expenditure of more than RMB 1,000,000.00 in the aggregate
        or
        require performance by any party more than one year from the date hereof
        that,
        in either case, are not terminable by the Company without penalty on notice
        of
        180 days’ or less.

       

      (b) Except
        as
        set forth on Schedule
        4.14(b),
        the
        Company has not received any written notice of any default or event that
        with
        notice or lapse of time, or both, would constitute a default by the Company
        under any Material Contract.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      4.15 Employee
        Benefits Plans.

       

      (a) Schedule
        4.15(a)
        sets
        forth a correct and complete list of all “Employee
        Benefit Plans”
and
        all
        other employee benefit programs, agreements, policies, arrangements or payroll
        practices, including bonus plans, employment, consulting or other compensation
        agreements, collective bargaining agreements, incentive, equity or equity-based
        compensation, or deferred compensation arrangements, change in control,
        termination or severance plans or arrangements, equity purchase, severance
        pay,
        sick leave, vacation pay, salary continuation for disability, hospitalization,
        medical insurance, life insurance and scholarship plans and programs maintained
        by the Company or to which the Company contributed or is obligated to contribute
        thereunder for current or former Employees (collectively, with statutory
        social
        insurance applicable to the Company, the “Company
        Welfare Plans”).

       

      (b) Correct
        and complete copies of the following documents (if any), with respect to
        each of
        the Company Welfare Plans, have been made available or delivered to Purchaser
        by
        the Company, to the extent applicable: (i) any plans, all amendments
        thereto and related trust documents, insurance contracts or other funding
        arrangements, and amendments thereto; (ii) the most recent actuarial
        report; (iii) summary plan descriptions; (iv) written communications
        to Employees relating to the Company Welfare Plans; and (v) written
        descriptions of all non-written agreements relating to the Company Welfare
        Plans.

       

      (c) The
        Company Welfare Plans have been maintained in all material respects in
        accordance with their terms and with all provisions of applicable Law. No
        fiduciary has any liability for breach of fiduciary duty or any other failure
        to
        act or comply in connection with the administration or investment of the
        assets
        of any Company Welfare Plans.

       

      (d) All
        contributions and premiums (including all employer contributions and employee
        salary reduction contributions) required to have been made under any of the
        Company Welfare Plans or by applicable Law (including any funds or trusts
        established thereunder or in connection therewith) have been made by the
        due
        date thereof (including any valid extension), and all contributions for any
        period ending on or before the Closing Date that are not yet due will have
        been
        paid or sufficient accruals for such contributions and other payments in
        accordance with GAAP are duly and fully provided for on the Base Date Balance
        Sheet.

       

      (e) There
        are
        no pending actions, claims or lawsuits that have been asserted or instituted
        against the Company Welfare Plans, the assets of any of the trusts under
        the
        Company Welfare Plans or the sponsor or administrator of any of the Company
        Welfare Plans, or against any fiduciary of the Company Welfare Plans with
        respect to the operation of any of the Company Welfare Plans (other than
        routine
        benefit claims), nor does the Company or Sellers have any knowledge of facts
        that could form the basis for any such claim or lawsuit.

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      (f) None
        of
        the Company Welfare Plans provides for post-employment life or health insurance,
        benefits or coverage for any participant or any beneficiary of a participant,
        except at the expense of the participant or the participant’s
        beneficiary.

       

      (g) Neither
        the execution and delivery of this Agreement nor the consummation of the
        transactions contemplated hereby or thereby will (i) result in any payment
        becoming due to any Employee, (ii) increase any benefits otherwise payable
        under
        any Company Welfare Plan or (iii) result in the acceleration of the time
        of
        payment or vesting of any such benefits under any Company Welfare
        Plan.

       

      (h) The
        Company has not any contract, plan or commitment, whether legally binding
        or
        not, to create any additional Company Welfare Plan or to modify any existing
        Company Welfare Plan.

       

      (i) No
        equity
        interest, share capital or other security issued by the Company forms or
        has
        formed a material part of the assets of any Company Welfare Plan.

       

      (j) There
        exists no other Employees except as set forth on the attached Schedule
        4.15(j),
        which
        schedule shall also list such Employees’ duty, type of job, and total amount of
        salary and compensation for calendar years 2004, 2005 and 2006. Schedule
        4.15(j)
        shall
        have listed the Employees by dividing them into two categories: (i) Management
        Employees; (ii) Non-management Employees.

       

      4.16 Labor.

       

      (a) Except
        as
        set forth on Schedule
        4.16(a),
        the
        Company is not a party to any labor or collective bargaining agreement and
        there
        are no labor or collective bargaining agreements which pertain to Employees
        or
        any of its Subsidiaries. The Company has delivered or otherwise made available
        to Purchaser true, correct and complete copies of the labor or collective
        bargaining agreements listed on Schedule 4.16(a),
        together with all amendments, modifications or supplements thereto.


       

      (b) Except
        as
        set forth on Schedule 4.16(b),
        no
        Employees are represented by any labor organization. No labor organization
        or
        group of Employees has made a pending demand for recognition, and there are
        no
        representation proceedings or petitions seeking a representation proceeding
        presently pending or, to the Knowledge of the Company or Sellers, threatened
        to
        be brought or filed, with any labor relations tribunal. There is no organizing
        activity involving the Company pending or, to the Knowledge of the Company
        or
        Sellers, threatened by any labor organization or group of
        Employees.

       

      (c) There
        are
        no unfair labor practice charges, grievances or complaints pending or, to
        the
        Knowledge of the Company or Sellers, threatened by or on behalf of any Employee
        or group of Employees. 

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      (d) There
        are
        no complaints, charges or claims against the Company pending or, to Knowledge
        of
        the Company and Sellers, threatened that could be brought or filed, with
        any
        Governmental Body based on, arising out of, in connection with or otherwise
        relating to the employment or termination of employment of or failure to
        employ,
        any individual. The Company is in compliance with all applicable Law relating
        to
        the employment of labor, including all such applicable Law relating to wages,
        hours, pension, unemployment, collective bargaining, discrimination, civil
        rights, safety and health, workers’ compensation, social security funds, housing
        funds and the collection and payment of withholding or social security taxes
        and
        any similar tax, to the extent applicable.

       

      (e) All
        the
        employment agreements entered into between the Employees or independent
        contractors and the Company are in full compliance with all applicable
        Law.

       

      4.17 Litigation.
        Except
        as set forth in Schedule
        4.17,
        there
        is no Legal Proceeding pending or, to the Knowledge of the Company or Sellers,
        threatened against the Company (or pending or, to the Knowledge of the Company
        and Sellers, threatened against any of the officers, directors or Employees
        of
        the Company with respect to their business activities on behalf of the Company),
        or to which the Company is otherwise a party before any Governmental Body;
        nor
        to the Knowledge of the Company or Sellers is there any reasonable basis
        for any
        such Legal Proceeding. Except as set forth on Schedule
        4.17,
        the
        Company is not subject to any Order, and the Company is not in breach or
        violation of any Order. Except as set forth on Schedule
        4.17,
        the
        Company is not engaged in any Legal Proceedings to recover monies due it
        or for
        damages sustained by it. There are no Legal Proceedings pending or, to the
        Knowledge of the Company or Sellers, threatened against the Company or to
        which
        the Company is otherwise a party relating to this Agreement, any Company
        Document or the transactions contemplated hereby or thereby.

       

      4.18 Compliance
        with Laws; Permits.

       

      (a) The
        Company is in compliance in all material respects with all applicable Law
        applicable to its business, operations or assets. The Company has not received
        any notice of or been charged with the violation of any applicable Law. Except
        as disclosed under Section
        4.18(a)
        hereof,
        the Company is not under investigation by any Governmental Body with respect
        to
        the violation of any applicable Law and there are no facts or circumstances
        which could form the basis for any such violation. All marketing, advertising
        and promotional claims with respect to the Company have been made in full
        compliance with all applicable Law.

       

      (b) Schedule 4.18(b)
        contains
        a list of all Permits that are required for the operation of the business
        of the
        Company as presently conducted and as presently intended to be conducted
        (“Company
        Permits”),
        other
        than those the failure of which to possess is immaterial, and identifies
        those
        Company Permits that have not yet undergone an annual or biennial inspection
        due
        in the current year. The Company currently has all Permits that are required
        for
        the operation of its business as presently conducted and as presently intended
        to be conducted, other than those the failure of which to possess is immaterial.
        The Company is not in default or violation, and no event has occurred that,
        with
        notice or the lapse of time or both, would constitute a default or violation,
        in
        any material respect of any term, condition or provision of any Company Permit,
        and to the Knowledge of the Company or Sellers, there are no facts or
        circumstances which could form the basis for any such default or violation.
        There are no Legal Proceedings pending or, to the Knowledge of the Company
        or
        Sellers, threatened, relating to the suspension, revocation or modification
        of
        any Company Permit.

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      4.19 Environmental
        Matters.

       

      (a) The
        operations of the Company are and have been in compliance with all applicable
        Environmental Laws, which compliance includes obtaining, maintaining in good
        standing and complying with all Environmental Permits and no action or
        proceeding is pending or, to the Knowledge of the Company or Sellers, threatened
        to revoke, modify or terminate any such Environmental Permit, and, to the
        Knowledge of the Company or Sellers, no facts, circumstances or conditions
        currently exist that could adversely affect such continued compliance with
        Environmental Laws and Environmental Permits or require currently unbudgeted
        capital expenditures to achieve or maintain such continued compliance with
        Environmental Laws and Environmental Permits;

       

      (b) The
        Company is not the subject of any currently effective written Order by any
        PRC
        Governmental Body or Contract with any PRC Governmental Body or Person with
        respect to (i) Environmental Laws, (ii) remedial action or (iii) any Release
        or
        threatened Release of a hazardous material;

       

      (c) No
        claim
        has been made or is pending, or to the Knowledge of the Company or Sellers,
        threatened against the Company alleging that the Company may be in violation
        of
        any Environmental Law or Environmental Permit, or may have any liability
        under
        any Environmental Law;

       

      (d) To
        the
        Knowledge of the Company or Sellers, no facts, circumstances or conditions
        exist
        with respect to the Company or any property currently or formerly owned,
        operated or leased by the Company or any property to which the Company arranged
        for the disposal or treatment of hazardous materials that could reasonably
        be
        expected to result in the Company incurring unbudgeted Environmental Costs
        and
        Liabilities;

       

      (e) There
        are
        no investigations of the business, operations, or currently or, to the Knowledge
        of the Company or Sellers, previously owned, operated or leased property
        of the
        Company pending or, to the Knowledge of the Company or Sellers, threatened
        which
        could lead to the imposition of any environmental costs and Liabilities or
        Liens
        under Environmental Law;

       

      (f) The
        transactions contemplated under this Agreement do not require the consent
        of or
        filings with any PRC Governmental Body with jurisdiction over the Company
        with
        respect to environmental matters;

       

      (g) Except
        as
        set forth on Schedule
        4.19(g),
        there
        is not located at any of the properties currently or (while owned, operated
        or
        leased by the Company) previously owned, operated or leased by the Company
        any
        (i) underground storage tanks, (ii) landfill, (iii) surface impoundment,
        (iii)
        asbestos-containing material or (iv) equipment containing polychlorinated
        biphenyls; and

       

      (h) The
        Company has provided to Purchaser all environmentally related audits, studies,
        reports, analyses, and results of investigations (if any) that have been
        performed with respect to the currently or previously owned, leased or operated
        properties of the Company.

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      4.20 Insurance.
        The
        Company has insurance policies in full force and effect for such amounts
        satisfying all requirements of applicable Law, all agreements to which the
        Company is a party or by which it is bound and customary practice in the
        industry. Set forth in Schedule
        4.20
        is a
        list of all insurance policies held by or applicable to the Company setting
        forth, in respect of each such policy, the policy name, policy number, carrier,
        term, type and amount of coverage and annual premium. Except as set forth
        on
Schedule
        4.20,
        no
        event relating to the Company has occurred which could reasonably be expected
        to
        result in a retroactive upward adjustment in premiums under any such insurance
        policies or which could reasonably be expected to result in a prospective
        upward
        adjustment in such premiums. Excluding insurance policies that have expired
        and
        been replaced in the Ordinary Course of Business, no insurance policy has
        been
        cancelled within the last two years and, to the Knowledge of the Company
        or
        Sellers, no threat has been made to cancel any insurance policy of the Company
        during such period. Except as noted on Schedule
        4.20,
        all
        such insurance will remain in full force and effect immediately following
        the
        consummation of the transactions contemplated by this Agreement. No event
        has
        occurred, including the failure by the Company to give any notice or information
        or the Company giving any inaccurate or erroneous notice or information,
        which
        limits or impairs the rights of the Company under any such insurance
        policies.

       

      4.21 Inventories.

       

      (a) The
        inventories of the Company are in good and marketable condition, and are
        usable
        and of a quantity and quality saleable in the Ordinary Course of Business.
        The
        inventories of the Company constitute sufficient quantities for the normal
        operation of business in accordance with past practice.

       

      (b) Adequate
        reserves have been reflected in the balance sheet for obsolete, excess, damaged,
        slow-moving, or otherwise unusable inventory, which reserves were calculated
        in
        a manner consistent with past practice and in accordance with GAAP consistently
        applied.

       

      4.22 Accounts
        and Notes Receivable and Payable.

       

      (a) All
        accounts and notes receivable of the Company have arisen from bona fide
        transactions in the Ordinary Course of Business consistent with past practice,
        are properly recorded and are payable on ordinary trade terms. All accounts
        and
        notes receivable of the Company reflected on the Base Date Balance Sheet
        and
        incurred after the Reference Date are true and good. None of the accounts
        or the
        notes receivable of the Company (i) is subject to any setoffs or counterclaims
        or (ii) represents obligations for goods sold on consignment, on a
        sale-or-return basis or subject to any other repurchase or return
        arrangement.

       

      (b) All
        accounts payable of the Company reflected in the Base Date Balance Sheet
        or
        arising after the date thereof are the result of bona fide transactions in
        the
        Ordinary Course of Business and have been paid or are not yet due and
        payable.

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      4.23 Related
        Party Transactions.
        Except
        as disclosed in Schedule
        4.23,
        no
        Employee, officer, director, equity holder, partner or member of the Company,
        any of his or her Associates or any of their respective Affiliates
        (“Related
        Persons”)
        (i)
        owes any amount to the Company nor does the Company owe any amount to, or
        has
        the Company committed to make any loan or extend or guarantee credit to or
        for
        the benefit of, any Related Person, (ii) to the Knowledge of the Company
        and
        Sellers, is involved in any business arrangement or other relationship with
        the
        Company (whether written or oral), (iii) owns any property or right, tangible
        or
        intangible, that is used by the Company, (iv) to the Knowledge of the Company
        and Sellers, has any claim or cause of action against the Company or (v)
        owns
        any direct or indirect interest of any kind in, or controls or is a director,
        officer, employee or partner of, or consultant to, or lender to or borrower
        from
        or has the right to participate in the profits of, any Person which is a
        competitor, supplier, customer, landlord, tenant, creditor or debtor of the
        Company.

       

      4.24 Vendors,
        Customers and Suppliers.
        

       

      (a) Schedule
        4.24(a)
        sets
        forth a list of the ten (10) largest vendors/customers and the
        ten
        (10) largest suppliers of the Company, as measured by the RMB amount of
        purchases therefrom or thereby, during each of the fiscal years ended December
        31, 2004, December 31, 2005 and December 31, 2006, showing the approximate
        total
        sales by the Company to each such vendor/customer and the approximate total
        purchases by the Company from each such supplier, during such
        period.

       

      (b) Since
        2006, no vendor/customer or supplier listed on Schedule 4.24(a)
        has
        terminated its relationship with the Company (or course of dealing upon which
        the Company have relied) and, to the Knowledge of the Company and Sellers,
        no
        customer or supplier listed on Schedule
        4.24(a)
        has
        notified the Company that it intends to terminate its business with the Company
        (or the course of dealing upon which the Company has relied). 

       

      4.25 Product
        Quality; Product Warranty; Product Liability.
        

       

      (a) The
        Company has not any liability for replacement of any products or other damages
        in connection therewith or any other customer or product obligations not
        reserved against on the Base Date Balance Sheet.

       

      (b) The
        Company has not committed any act or failed to commit any act, that would
        result
        in, and there has been no product recall or other occurrence that would give
        rise to or form the basis of, any product liability or liability for breach
        of
        warranty (whether covered by insurance or not) on the part of the Company
        with
        respect to products delivered or sold by or on behalf of the Company.


       

      4.26 Banks;
        Power of Attorney.
        Schedule
        4.26
        contains
        a complete and correct list of the names and locations of all banks in which
        Company has accounts or safe deposit boxes and the names of all persons
        authorized to draw thereon or to have access thereto. Except as set forth
        on
Schedule
        4.26,
        no
        person holds a power of attorney to act on behalf of the Company.

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      4.27 Certain
        Payments.
        Neither
        the Company nor, to the Knowledge of the Company or Sellers, any director,
        officer, employee, or other Person associated with or acting on behalf of
        any of
        them, has directly or indirectly (a) made any contribution, gift, bribe,
        rebate,
        payoff, influence payment, kickback, or other payment to any Person, private
        or
        public, regardless of form, whether in money, property, or services (i) to
        obtain favorable treatment in securing business for the Company, (ii) to
        pay for
        favorable treatment for business secured by the Company, (iii) to obtain
        special
        concessions or for special concessions already obtained, for or in respect
        of
        the Company, or (iv) in violation of any applicable Law, or (b) established
        or
        maintained any fund or asset with respect to the Company that has not be
        recorded in the books and records of the Company. 

       

      4.28 Financial
        Advisors.
        No
        Person has acted, directly or indirectly, as a broker, finder or financial
        advisor for Sellers or the Company in connection with the transactions
        contemplated by this Agreement and no Person is or will be entitled to any
        fee
        or commission or like payment in respect thereof for which Purchaser could
        be
        liable.

       

      4.29 Full
        Disclosure.
        No
        representation or warranty of Sellers or the Company contained in this Agreement
        or any of the Company Documents and no written statement made by or on behalf
        of
        the Company or Sellers to Purchaser or any of its Affiliates pursuant to
        this
        Agreement, any of the Company Documents or Seller Documents contains an untrue
        statement of a material fact or omits to state a material fact necessary
        to make
        the statements contained herein or therein not misleading. There are no facts
        which the Company or Sellers have not disclosed to Purchaser in writing which
        could, individually or in the aggregate, reasonably be expected to have a
        Material Adverse Effect.

       

      ARTICLE
        V

       

      REPRESENTATIONS
        AND WARRANTIES OF PURCHASER

       

      Purchaser
        hereby makes to Sellers the representations and warranties as follows:


       

      5.1 Organization
        and Good Standing.
        Purchaser is a company duly established, validly existing and in good standing
        under the RPC laws and has all requisite corporate power and authority to
        own,
        lease and operate properties and carry on its business. 

       

      5.2 Authorization
        of Agreement.
        Purchaser has full requisite power, authority and legal capability to execute
        and deliver this Agreement, and each other agreement, document, instrument
        or
        certificate to be delivered by Purchaser as contemplated by this Agreement
        or to
        be executed by Purchaser in connection with the consummation of the transactions
        contemplated hereby and thereby (the “Purchaser
        Documents”),
        and
        to consummate the transactions contemplated hereby and thereby. Purchaser
        has
        taken all requisite actions to duly authorize and approve the execution,
        delivery and performance by Purchaser of this Agreement, and each Purchaser
        Documents and the consummation of the transactions contemplated hereby and
        thereby. This Agreement and the Purchaser Documents have been duly and validly
        executed and delivered by Purchaser and, assuming due authorization, execution
        and delivery by the Company and Sellers, constitutes a legal, valid and binding
        obligation of Purchaser, enforceable against it in accordance with their
        respective terms.

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      5.3 Conflicts;
        Consents of Third Parties.

       

      (a) None
        of
        the execution and delivery by Purchaser of this Agreement and the Purchaser
        Documents, the consummation of the transactions contemplated hereby or thereby,
        or the compliance by Purchaser with any of the provisions hereof or thereof
        will
        conflict with, or result in violation of or default (with or without notice
        or
        lapse of time, or both) under, or give rise to a right of termination or
        cancellation under any provision of (i) the articles of association or
        comparable organizational documents of Purchaser; (ii) any Contract or
        Permit to which Purchaser is a party or by which any of the properties or
        assets
        of Purchaser is bound; (iii) any Order of any PRC or foreign Governmental
        Body
        applicable to Purchaser or by which any of the properties or assets of Purchaser
        is bound; or (iv) any applicable Law, except in each case where such
        organizational documents, Contracts, Permits, Orders or applicable Law are
        adopted or otherwise take effect after the Closing or where such violation
        or
        default arises from actions or omissions by any Person other than
        Purchaser.

       

      (b) No
        consent, waiver, approval, Order, Permit or authorization of, or declaration
        or
        filing with, or notification to, any Person or Governmental Body is required
        on
        the part of Purchaser in connection with the execution and delivery of this
        Agreement or the Purchaser Documents or the compliance by Purchaser with
        any of
        the provisions hereof or thereof, except for consents set forth in Schedule
        5.3(b).

       

      5.4 Litigation.
        There
        are no Legal Proceedings pending or, to the knowledge of Purchaser, threatened
        against Purchaser or to which Purchaser is otherwise a party relating to
        this
        Agreement, the Purchaser Documents or the transactions contemplated hereby
        and
        thereby.

       

      5.5 Financial
        Advisors.
        No
        Person has acted, directly or indirectly, as a broker, finder or financial
        advisor for Purchaser in connection with the transactions contemplated by
        this
        Agreement and no Person is entitled to any fee or commission or like payment
        in
        respect thereof.

       

      ARTICLE
        VI

       

      COVENANTS

       

      6.1 Access
        to Information; Confidentiality.
        The
        Company and Sellers shall (i) afford to Purchaser and its representatives
        full
        access, during normal business hours and upon reasonable notice, to all of
        the
        Company’s properties and facilities (including all real property and the
        buildings, structures, fixtures, appurtenances and improvements erected,
        attached or located thereon), books, financial information (including working
        papers and data in the possession of the Company or its independent public
        accountants, internal audit reports, and “Management
        Letters”
from
        such accountants with respect to the Company’s systems of internal control, if
        any), Contracts and records of the Company and, (ii) during such period between
        the execution hereof and the Closing, to promptly furnish to Purchaser and
        its
        representatives such information concerning the businesses (including
        information relating to supplier, vendor, customer, product pricing,
        advertising/media planning), properties and personnel of the Company as
        Purchaser and its representatives shall reasonably request. From the date
        hereof, the Company shall generally keep Purchaser and its representatives
        informed as to all material matters involving the operations and businesses
        of
        the Company. The Company shall cause its officers, employees, consultants,
        agents, accountants, attorneys and other representatives to supply to
        Purchaser’s and its representatives such information as shall have been
        reasonably requested. No information provided to or obtained by Purchaser
        and
        its representatives pursuant to this Section
        6.1
        shall
        limit or otherwise affect the remedies available hereunder to Purchaser
        (including Purchaser’s right to seek indemnification pursuant to Article
        VIII),
        or the
        representations or warranties of, or the conditions to the obligations of,
        the
        Parties hereto.
        Each
        Party shall keep confidential the terms and conditions of this Agreement
        and
        other confidential commercial information disclosed by another Party hereto
        (collectively, the “Confidential
        Information”). 

       

      
        
          
          

        

        
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      6.2 Conduct
        of the Business Pending the Closing.

       

      (a) Prior
        to
        the Closing, except (I) as required by applicable Law, (II) as otherwise
        contemplated by this Agreement or (III) with the prior written consent of
        Purchaser (which consent shall not be unreasonably withheld, delayed or
        conditioned), the Company shall:

       

      (i) conduct
        the businesses of the Company only in the Ordinary Course of Business;


       

      (ii) use
        its
        commercially reasonable efforts to (A) preserve the present business operations,
        organization and goodwill of the Company, and (B) preserve the present
        relationships with customers and suppliers of the Company;

       

      (iii) maintain
        (A) all of the assets and properties of, or used by, the Company in its current
        condition, ordinary wear and tear excepted, and (B) insurance upon all of
        the
        properties and assets of the Company in such amounts and of such kinds
        comparable to that in effect on the date of this Agreement;

       

      (iv) (A)
        maintain the books, accounts and records of the Company in the Ordinary Course
        of Business, (B) continue to collect accounts receivable and pay accounts
        payable utilizing normal procedures and without discounting or accelerating
        payment of such accounts, and (C) comply with all contractual and other
        obligations of the Company; 

       

      (v) comply
        with the capital expenditure plan of the Company for 2007, including making
        such
        capital expenditures in the amounts and at the times set forth in such plan;
        and

       

      (vi) comply
        in
        all material respects with all applicable Laws.

       

      (b) Except
        (I) as required by applicable Law, (II) as otherwise contemplated by this
        Agreement or (III) with the prior written consent of Purchaser (which consent
        shall not be unreasonably withheld, delayed or conditioned), the Company
        shall
        not:

       

      (i) declare,
        set aside, make or pay any dividend or other distribution in respect of the
        capital stock of the Company or repurchase, redeem or otherwise acquire any
        outstanding shares of the capital stock or other securities of, or other
        ownership interests in, the Company;

       

      (ii) transfer,
        issue, sell or dispose of any shares of capital stock or other securities
        of the
        Company or grant options, warrants, calls or other rights to purchase or
        otherwise acquire shares of the capital stock or other securities of the
        Company;

       

      (iii) effect
        any recapitalization, reclassification or like change in the capitalization
        of
        the Company;

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      (iv) amend
        the
        certificate of incorporation or by-laws or comparable organizational documents
        of the Company;

       

      (v) other
        than in the Ordinary Course of Business or as required by Law or Contract,
        (A)
        materially increase the annual level of compensation of any director or
        executive officer of the Company, (B) materially increase the annual level
        of
        compensation payable or to become payable by the Company to any of its directors
        or executive officers, (C) grant any unusual or extraordinary bonus, benefit
        or
        other direct or indirect compensation to any director or executive officer,
        (D)
        materially increase the coverage or benefits available under any (or create
        any
        new) Employee Benefit Plan or (E) enter into any employment, deferred
        compensation, severance, consulting, non-competition or similar agreement
        (or
        amend any such agreement) to which the Company is a party or involving a
        director or executive officer of the Company, except, in each case, as required
        by applicable Law from time to time in effect or by the terms of any Employee
        Benefit Plans;

       

      (vi) subject
        to any Lien, any of the properties or assets (whether tangible or intangible)
        of
        the Company, except for Permitted Exceptions;

       

      (vii) acquire
        any material properties or assets or sell, assign, license, transfer, convey,
        lease or otherwise dispose of any of the material properties or assets of
        the
        Company (except pursuant to an existing Contract for fair consideration in
        the
        Ordinary Course of Business or for the purpose of disposing of obsolete or
        worthless assets);

       

      (viii) other
        than in the Ordinary Course of Business, cancel or compromise any material
        debt
        or claim or waive or release any material right of the Company;

       

      (ix) enter
        into any commitment for capital expenditures of the Company in excess of
        RMB
        500,000.00 for any individual commitment and RMB 2,000,000.00 for all
        commitments in the aggregate;

       

      (x) enter
        into, modify or terminate any labor or collective bargaining agreement of
        the
        Company;

       

      (xi) permit
        the Company to enter into or agree to enter into any merger or consolidation
        with any Person;

       

      (xii) make
        or
        rescind any election relating to Taxes, settle or compromise any claim, action,
        suit, litigation, proceeding, arbitration, investigation, audit controversy
        relating to Taxes, or except as required by applicable law or GAAP, make
        any
        material change to any of its methods of accounting or methods of reporting
        income or deductions for Tax or accounting practice or policy from those
        employed in the preparation of its most recent Tax Return; or

       

      (xiii) agree
        to
        do anything prohibited by this Section
        6.2(b).
         

       

      
        
          
          

        

        
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      6.3 Third
        Party Consents.
        Sellers
        and the Company shall use their best efforts to obtain at the earliest
        practicable date all consents, waivers and approvals from, and provide all
        notices to, all third parties that are not a Governmental Body, which consents,
        waivers, approvals and notices are required to consummate, or in connection
        with, the transactions contemplated by this Agreement, including to the
        consents, waivers, approvals and notices referred to in Section
        3.2 and
        Section
        4.3
        (except
        for such matters covered by Section
        6.4).
        Executed counterparts of such consents, waivers and approvals shall be delivered
        to Purchaser promptly after receipt thereof, and copies of such notices shall
        be
        delivered to Purchaser promptly after the making thereof. 

       

      6.4 PRC
        Governmental Consents and Approvals.
        Unless
        otherwise provided herein, each of Sellers and the Company shall each use
        its
        best efforts to obtain (and Purchaser shall provide reasonable cooperation
        upon
        request) at the earliest practical date all consents, waivers, approvals,
        Orders, Permits, authorizations and declarations from, make all filings with,
        and provide all notices to, all Governmental Bodies which are required to
        consummate, or are required in connection with, the transactions contemplated
        by
        this Agreement, including the consents, waivers, approvals, Orders, Permits,
        authorizations, declarations, filings and notices referred to in Section
        3.2
        and
Section
        4.3.
        Sellers
        and the Company shall each use its best efforts to furnish to Purchaser all
        information required for any application or other filing to be made pursuant
        to
        any applicable Law in connection with the transactions contemplated by this
        Agreement. Sellers and the Company shall each promptly inform Purchaser of
        any
        oral communication with, and provide copies of written communications with,
        any
        Governmental Body regarding any such filings or any such transaction and
        permit
        Purchaser to review in advance any proposed communication by Sellers or the
        Company to any Governmental Body. Sellers or the Company shall not independently
        participate in any meeting with any Governmental Body in respect of any such
        filings, investigation, or other inquiry without giving Purchaser prior notice
        of the meeting and the opportunity to attend or participate (except that
        giving
        such opportunity is prohibited by such Governmental Body). Subject to applicable
        Law, the Parties hereto shall consult and cooperate with one another in
        connection with the matters described in this Section
        6.4,
        including in connection with any analyses, appearances, presentations,
        memorandums, briefs, arguments, opinions and proposals made or submitted
        by or
        on behalf of any Party hereto relating to proceedings under any antitrust
        Law. 

       

      6.5 Further
        Assurances.
        Subject
        to, and not in limitation of, Section 6.4,
        each of
        Sellers and the Company shall use its best efforts to (i) take, or cause
        to be
        taken, all actions necessary or appropriate to consummate the transactions
        contemplated by this Agreement and (ii) cause the fulfillment at the earliest
        practicable date of all of the conditions to their respective obligations
        to
        consummate the transactions contemplated by this Agreement.

       

      6.6 Preservation
        of Records.
        Subject
        to any retention requirements relating to the preservation of Tax and/or
        accounting records, Sellers shall, and agree to cause the Company to, preserve
        and keep the records held by them relating to the business of the Company
        and
        shall make such records and personnel available to Purchaser as may be
        reasonably required by a party in connection with, among other things, any
        insurance claims by, legal proceedings against or governmental investigations
        of
        Sellers, the Company, or Purchaser or any of their Affiliates or in order
        to
        enable Purchaser to comply with its obligations under this Agreement and
        document or instrument contemplated hereby.

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

      6.7 Use
        of
        Name.
        Sellers
        hereby agree that upon the Closing, Purchaser and the Company shall have
        the
        sole right to the use of the name “Ausnutria”, “澳优”or
        similar names and any service marks, trademarks, trade names, d/b/a names,
        fictitious names, identifying symbols, logos, emblems, signs or insignia
        related
        thereto or containing or comprising the foregoing, or otherwise used in the
        business of the Company, including any name or mark confusingly similar thereto
        and the trademarks and service marks (collectively, the “Company
        Marks”).
        Sellers shall not, and shall not permit any Person acting on their behalf
        to,
        use such name or any variation or simulation thereof or any of the Company
        Marks. 

       

      6.8 Environmental
        Matters.
        

       

      (a) Sellers
        and the Company shall permit Purchaser and its environmental consultant,
        to
        conduct such investigations of the environmental conditions of any real property
        operated or leased by the Company and the operations conducted thereat
        (“Purchaser’s
        Environmental Assessment”).
        Purchaser’s Environmental Assessment shall be conducted by a qualified
        environmental consulting firm selected by Purchaser, in compliance with
        applicable Law and in a manner that minimizes the disruption of the operations
        of the Company.

       

      (b) Sellers
        and the Company shall promptly file all materials required by Environmental
        Laws
        as a result of or in furtherance of the transactions contemplated hereunder
        and
        to promptly respond to all requests made by any Government Body required
        or
        necessary for the transfer or re-issuance of Environmental Permits required
        to
        conduct the Company’s business. Purchaser shall cooperate in all reasonable
        respects with the Company with respect to such filings.

       

      6.9 Related-Party
        Transactions.
        On or
        prior to the Closing Date, the Company shall (a) not to enter into any Contracts
        or transactions with Sellers or any Person acting on their behalf, other
        than
        those existing Contracts or transactions set forth on Schedule
        6.9(a),
        and (b)
collect
        all the receivables from and pay all the payables to the Affiliates of the
        Company or the Related Persons as set forth in Schedule
        6.9(b),
        (each a
“Related
        Party Transaction”)
        

       

      6.10 Monthly
        Financial Statements.
        As soon
        as reasonably practicable, but in no event later than ten (10) days after
        the
        end of each calendar month during the period from the date hereof to the
        Closing
        Date, Seller shall cause the Company to provide Purchaser with the unaudited
        monthly financial statements of the Company for such preceding month.


       

      
        
          
          

        

        
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      6.11 Fees
        and Expenses.
        At or
        prior to the Closing, Sellers and the Company shall pay and discharge the
        unpaid
        balance of all Company Transaction Expenses as of the close of business on
        the
        day immediately preceding the Closing. For
        the
        purposes of this Agreement, “Company
        Transaction Expenses”
shall
        mean, except as otherwise expressly set forth in Section
        10.1
        or other
        sections under this Agreement, the aggregate amount of all out-of-pocket
        fees
        and expenses, incurred by or on behalf of, or paid or to be paid by, the
        Company
        in connection with the process of selling Equity Interests or otherwise relating
        to the negotiation, preparation or execution of this Agreement or any documents
        or agreements contemplated hereby or thereby or the performance or consummation
        of the transactions contemplated hereby or thereby, including (a) any fees
        and
        expenses associated with obtaining necessary or appropriate waivers, consents
        or
        approvals of any Governmental Body or third parties on behalf of the Company;
        (b) any fees or expenses associated with release and termination of any Liens;
        (c) all brokers’ or finders’ fees; (d) fees and expenses of counsel, advisors,
        consultants, investment bankers, accountants, and auditors and experts, and
        (e)
        all bonuses or payments to current or former directors, officers, Employees
        and
        consultants of the Company paid as a result of or in connection with the
        transactions contemplated hereby.

       

      6.12 Notification
        of Certain Matters.
        Sellers
        or the Company (as applicable) shall give notice to Purchaser, as promptly
        as
        reasonably practicable upon becoming aware of (a) any event that has caused
        or
        is reasonably likely to cause any of the representation or warranty in this
        Agreement made by Sellers to be untrue or inaccurate in any respect at any
        time
        after the date hereof and prior to the Closing, (b) any material failure
        on
        their part to comply with or satisfy any covenant, condition or agreement
        to be
        complied with or satisfied by it hereunder (c) the institution of or the
        threat
        of institution of any Legal Proceeding against any of Sellers, the Company,
        or
        Purchaser related to this Agreement or the transactions contemplated hereby
        or
        thereby; provided
        that the
        delivery of any notice pursuant to this Section
        6.12
        shall
        not limit or otherwise affect the remedies available hereunder to the Party
        receiving such notice, or the representations or warranties of, or the
        conditions to the obligations of, the Parties hereto.

       

      6.13 Resignation
        of Directors.
        Sellers
        shall cause each of the directors of the Company set forth on Schedule
        6.13
        to
        submit a letter of resignation effective on or before the Closing
        Date. 

       

      6.14 Non-Competition
        and Non-Solicitation

       

      (a) For
        a
        period of three (3) years from and after the Closing Date, the Management
        Stockholder shall not directly or indirectly, own, manage, engage in, operate,
        control, work for, consult with, render services for, do business with, maintain
        any interest in (proprietary, financial or otherwise) or participate in the
        ownership, management, operation or control of, any business, whether in
        corporate, proprietorship or partnership form or otherwise, engaged in dairy
        production, sales, marketing or distribution or that otherwise competes with
        the
        Company (a “Restricted
        Business”).

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

      (b) For
        a
        period of three (3) years from and after the Closing Date, the Management
        Shareholder shall not, and shall cause its directors, officers, employees
        and
        Affiliates not to, directly or indirectly: (i) cause, solicit, induce or
        encourage any employees of the Company to leave such employment or hire,
        employ
        or otherwise engage any such individual; or (ii) cause, induce or encourage
        any material actual or prospective client, customer, supplier, or licensor
        of
        the Company (including any existing or former customer of the Company and
        any
        Person that becomes a client or customer of the Company after the Closing)
        or
        any other Person who has a material business relationship with the Company,
        to
        terminate or modify any such actual or prospective relationship.

       

      (c) The
        covenants and undertakings contained in this Section 6.14
        relate
        to matters which are of a special, unique and extraordinary character and
        a
        violation of any of the terms of this Section 6.14
        will
        cause irreparable injury to Purchaser, the amount of which will be impossible
        to
        estimate or determine and which cannot be adequately compensated. Accordingly,
        the remedy at law for any breach of this Section
        6.14
        will be
        inadequate. Therefore, Purchaser will be entitled to a temporary and permanent
        injunction, restraining order or other equitable relief from any court of
        competent jurisdiction in the event of any breach of this Section 6.14
        without
        the necessity of proving actual damage or posting any bond whatsoever. The
        rights and remedies provided by this Section 6.14
        are
        cumulative and in addition to any other rights and remedies which Purchaser
        may
        have hereunder or at law or in equity. 

       

      6.15 Escrow
        Account.
        Sellers
        and the Company shall cooperate with Purchaser to release the Escrow Amount
        to
        an account designated by Purchaser, as Purchaser may determine at its
        discretion.

       

      ARTICLE
        VII

       

      CONDITIONS
        TO CLOSING

       

      7.1 Conditions
        Precedent to Obligations of Purchaser.
        The
        obligation of Purchaser to consummate the transactions contemplated by this
        Agreement is subject to the fulfillment, on or prior to the Closing Date,
        of
        each of the conditions precedent (any
        or
        all of which may be waived by Purchaser in whole or in part to the extent
        permitted by applicable law): 

       

      (a) the
        representations and warranties of the other Parties set forth hereunder in
        Articles
        III and IV
        shall be
        true and correct as of the date hereof and; 

       

      (b) the
        other
        Parties and each of its affiliates shall have performed and complied with
        all
        obligations and agreements required hereunder to be performed or complied
        with
        by them on or prior to the Closing Date;

       

      
        
          
          

        

        
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      (c) there
        shall not be in effect any Order by a Governmental Body of competent
        jurisdiction restraining, enjoining or otherwise prohibiting the consummation
        of
        the transactions contemplated hereby;

       

      (d) no
        legal
        proceedings shall have been instituted or threatened or claim or demand made
        against any Party or any Affiliate of such Party, seeking to restrain or
        prohibit, or to obtain substantial damages with respect to, the consummation
        of
        the transactions contemplated hereby;

       

      (e) each
        of
        the other Parties shall have obtained or made any consent, approval, order
        or
        authorization of, or registration, declaration or filing with, any Governmental
        Body required to be obtained or made by such other Party in connection with
        the
        execution and delivery of this Agreement or the consummation of the transactions
        contemplated hereby or thereby;

       

      (f) the
        board
        of directors of the Company have unanimously passed a valid resolution for
        approval of the transfer of Equity Interest from Sellers to the Purchaser
        and
        the restated articles of association of the Company;

       

      (g) All
        trademarks related to the name of the Company and the names of the products
        of
        the Company shall be officially registered as owned by the Company;


       

      (h) this
        Agreement shall have all been approved by the competent approval and
        registration authorities and Company is granted with a new certificate of
        approval and a new business license from the relevant authority, stating
        that
        Purchaser holds 75% of registered capital of Company; 

       

      (i) The
        Occupied Property set forth in Schedule 4.11(a)
        shall have been transferred to the Company; and

       

      (j) Prior
        to
        the Closing, the Domestic Shareholder shall have assigned to the Company
        free of
        any and all Liens all of the land use rights with respect to the Ausnutria
        Land
        and all of the ownership rights with respect to all buildings and other real
        property located on the Ausnutria Land. “Ausnutria
        Land”
means
        the plot of land with an area of approximately 66,523.305 square meters
located
        to the south of Wangwang Road (旺旺爑)
        and to
        the east of Dianchang Avenue (电厂大澭)
        and is
        within the High-Tech Food Industrial Park of Hunan Province (湖南省攨科技朡品工业基地),
        the
        land use right of which was granted to the Domestic Shareholder under a Land
        Use
        Contrac dated July 21, 2000 between Domestic Shareholder and the People's
        Government of Wangcheng County.

       

      
        
          
          

        

        
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      7.2 Conditions
        Precedent to Obligations of Sellers.
        The
        obligations of Sellers to consummate the transactions contemplated by this
        Agreement are subject to the fulfillment, prior to or on the Closing Date,
        of
        each of the conditions precedent (any or all of which may be waived by Sellers
        in whole or in part to the extent permitted by applicable Law):

       

      (a) the
        representations and warranties of Purchaser hereunder in Article
        V shall
        be
        true and correct as of the date hereof and; 

       

      (b) the
        other
        Parties have, performed and complied with all obligations and agreements
        required hereunder to be performed or complied with by them on or prior to
        the
        Closing Date; and

       

      (c) no
        legal
        proceedings shall have been instituted or threatened or claim or demand made
        against any Party or any of her/his/its Affiliates, seeking to restrain or
        prohibit, or to obtain substantial damages with respect to, the consummation
        of
        the transactions contemplated hereby, and there shall not be in effect any
        Order
        by a Governmental Body of competent jurisdiction restraining, enjoining or
        otherwise prohibiting the consummation of the transactions contemplated
        hereby.

       

      ARTICLE
        VIII

       

      INDEMNIFICATION

       

      8.1 Survival
        of Representations and Warranties.
        The
        representations and warranties of the Parties contained in this Agreement,
        any
        certificate delivered pursuant hereto or any Seller Document, Company Document
        or Purchaser Document shall survive the Closing indefinitely. 

       

      8.2 Indemnification. 

       

      a) Subject
        to Sections
        8.4
        and
8.5
        hereof,
        Sellers hereby agree to, jointly and severally, indemnify and hold Purchaser,
        the Company and their respective directors, officers, employees, Affiliates,
        stockholders, agents, attorneys, representatives, successors and assigns
        (collectively, the “Purchaser
        Indemnified Parties”)
        harmless from and against, and pay to the applicable Purchaser Indemnified
        Parties the amount of, in accordance with actual Loss incurred, any and all
        losses, liabilities, claims, obligations, deficiencies, demands, judgments,
        damages (including incidental and consequential damages), interest, fines,
        penalties, claims, suits, actions, causes of action, assessments, awards,
        costs
        and expenses (including costs of investigation and defense and attorneys’ and
        other professionals’ fees), or any diminution in value, whether or not involving
        a third party claim (individually, a “Loss”
and,
        collectively, “Losses”),
        if
        such Losses are:

       

      (i) based
        upon, attributable to or resulting from the failure of any of the
        representations or warranties made by any Seller in this Agreement to be
        true
        and correct in all respects at and as of the date hereof and at and as of
        the
        Closing Date;

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

      (ii) based
        upon, attributable to or resulting from the breach of any covenant or other
        agreement on the part of any Seller or (prior to the Closing) the Company
        under
        this Agreement;

       

      (iii) based
        upon, attributable to or resulting from any third party claims out of Ordinary
        Course of Business, including claims for product liabilities, resulted from
        any
        business activities before the Closing but arising after the
        Closing;

       

      (iv) based
        upon, attributable to or resulting from (A) any employment-related Liability
        with respect to the employment between the Company and its Employees or arising
        from the termination of such employment on or prior to the Closing Date (B)
        any
        liability relating to, arising under any Company Welfare Plan or otherwise
        for
        any period prior to the Closing Date and (C) any liability relating to or
        arising under compliance with any applicable Law relating to government-mandated
        contributions, premiums and benefits for any period prior to the Closing
        Date;

       

      (v) based
        upon, attributable to or resulting from any claims or legal proceedings from
        a
        third party with respect to Company Marks, Software, Technology or other
        Intellectual Property for any usage by the Company prior to the Closing
        Date;

       

      (vi) based
        upon, attributable to or resulting from any legal liability under the
        Environmental Laws arising as a result of the situation already existing
        on or
        prior to the Closing Date or the Company’s act or omission in connection
        therewith; 

       

      (vii) based
        upon, attributable to or resulting from the claw-back of the income tax and
        other levies with respect to which the Company had been entitled to an exemption
        or reduction prior to Closing Date as a result of completion of the transaction
        contemplated under this Agreement,

       

      (viii) based
        upon, attributable to or resulting from any events or actions taken by or
        omissions of Sellers or (prior to the Closing Date) the Company;

       

      (ix) based
        upon, attributable to or resulting from the matters as disclosed by Sellers
        in
Schedule
        4.13(j)
        (IP
        matters) which could possibly cause disputes; or

       

      (x) based
        upon, attributable to or resulting from the matters described in Section
        8.2a)
        or
        related thereto for whatever causes. 

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

      (b) Purchaser
        hereby agrees to indemnify and hold Sellers harmless from and against any
        and
        all Losses, if such Losses are:

       

      (xi) based
        upon, attributable to or resulting from the failure of any of the
        representations or warranties made by Purchaser in this Agreement to be true
        and
        correct in all respects at the date hereof and as of the Closing Date;
        or

       

      (xii) based
        upon, attributable to or resulting from the breach of any covenant or other
        agreement on the part of Purchaser under this Agreement. 

       

      (c) The
        right
        to indemnification or any other remedy based on representations, warranties,
        covenants and agreements in this Agreement, Seller Document or Purchaser
        Document shall not be affected by any investigation conducted at any time,
        or
        any knowledge acquired (or capable of being acquired) at any time, whether
        before or after the execution and delivery of this Agreement or the Closing
        Date, with respect to the accuracy or inaccuracy of, or compliance with,
        any
        such representation, warranty, covenant or agreement. The waiver of any
        condition based on the accuracy of any such representation or warranty, or
        on
        the performance of or compliance with any such covenant or agreements, will
        not
        affect the right to indemnification or any other remedy based on such
        representations, warranties, covenants and agreements.

       

      8.3 Indemnification
        Procedures.

       

      (a) A
        claim
        for indemnification for any matter not involving a third party claim may
        be
        asserted by notice to the Party from whom indemnification is sought;
provided,
        however,
        that
        failure to so notify the indemnifying Party shall not preclude the indemnified
        party from any indemnification which it may claim in accordance with this
        Article
        VIII.

       

      (b) In
        the
        event that any Legal Proceedings shall be instituted or that any claim or
        demand
        shall be asserted by any third party in respect of which indemnification
        may be
        sought under Section
        8.2
        hereof
        (a “Third
        Party Claim”),
        the
        indemnified party shall promptly cause written notice of the assertion of
        any
        Third Party Claim of which it has knowledge that is covered by this indemnity
        to
        be forwarded to the indemnifying Party. 

       

      (i)
        Subject
        to the provisions of this Section 8.3,
        after
        indemnified party has informed indemnifying Party of any Third Party Claim
        and
        if the Third Party Claim has been filed against the Company, Purchaser shall
        consult with Sellers to select counsel representing the Company to defend
        against, negotiate, settle or otherwise deal with such Third Party Claim
        which
        relates to any Losses indemnified against hereunder. If a Purchaser is the
        indemnified party and elects to defend against, negotiate, settle or otherwise
        deal with any Third Party Claim which relates to any Losses indemnified by
        it
        hereunder, Sellers shall reimburse such Purchaser Indemnified Party for the
        expenses of defending such Third Party Claim upon submission of periodic
        bills.
        If Purchaser is the indemnifying Party, Sellers may participate, at his own
        expense, in the defense of such Third Party Claim. 

       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

      (ii)
        The
        Parties hereto agree to provide reasonable access to each other to such
        documents and information as may be reasonably requested in connection with
        the
        defense, negotiation or settlement of any such Third Party Claim.
        Notwithstanding anything in this Section
        8.3
        to the
        contrary, neither the indemnifying Party nor the indemnified party shall,
        without the written consent of the other Party, settle or compromise any
        Third
        Party Claim or permit a default or consent to entry of any judgment unless
        the
        claimant or claimants and such Party provide to such other Party an unqualified
        release from all liability in respect of the Third Party Claim. If the
        indemnifying Party makes any payment on any Third Party Claim, the indemnifying
        Party shall be subrogated, to the extent of such payment, to all rights and
        remedies of the indemnified party to any insurance benefits or other claims
        of
        the indemnified party with respect to such Third Party Claim. 

       

      (c) After
        any
        final decision, judgment or award shall have been rendered by a Governmental
        Body of competent jurisdiction and the expiration of the time in which to
        appeal
        therefrom, or a settlement shall have been consummated, or the indemnified
        party
        and the indemnifying Party shall have arrived at a mutually binding agreement,
        in each case with respect to any Third Party Claim hereunder, the indemnified
        party shall forward to the indemnifying Party notice of any remaining sums
        due
        and owing by the indemnifying Party pursuant to this Agreement with respect
        to
        such matter and the indemnifying Party shall pay all of such remaining sums
        so
        due and owing to the indemnified party in accordance with Section
        8.3
        by wire
        transfer of immediately available funds within five (5) Business Days after
        the
        date of such notice. 

       

      8.4 Tax
        Matters. 

       

      (a) Tax
        Indemnification.
        Sellers
        hereby agree to be liable for and to indemnify and hold Purchaser harmless
        from
        and against, and pay to Purchaser the amount of any and all Losses in respect
        of
        (i) all Taxes of the Company (or any predecessor thereof) for any taxable
        period
        ending on or before the Closing Date, and (ii) the failure of any of the
        representations and warranties contained in Section 4.10
        to be
        true and correct in all respects (determined without regard to any qualification
        related to materiality contained therein) or the failure to perform any covenant
        contained in this Agreement with respect to Taxes.

       

      (b) Filing
        of Tax Returns; Payment of Taxes.

       

      (xiii) On
        or
        prior to the Closing Date, Sellers and the Company shall timely file all
        Tax
        Returns required to be filed by them on or prior to the Closing Date and
        shall
        pay or cause to be paid all Taxes shown due thereon. All such Tax Returns
        shall
        be prepared in a manner consistent with their prior practice, except for
        the
        necessary adjustments as required under GAAP or applicable Law. Sellers and
        the
        Company shall provide Purchaser with copies of such completed Tax Returns
        promptly prior to the due date for filing thereof.

       

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

      (xiv) Following
        the Closing, Purchaser shall cause to be timely filed all Tax Returns required
        to be filed by the Company and, without prejudice to the rights to payment
        from
        Sellers under Section 8.4(b)(xv),
        pay or
        cause to be paid all Taxes shown due thereon.

       

      (xv) Not
        later
        than ten (10) days prior to the due date for the payment of Taxes on any
        Tax
        Returns which Purchaser has the responsibility to cause to be filed pursuant
        to
Section
        8.4(b)(xiv),
        Sellers
        shall pay to Purchaser the amount of Taxes owed by Sellers to the Purchaser
        pursuant to the provisions of Section
        8.4(a).
        No
        payment pursuant to this Section 8.4(b)(xv)
        shall
        excuse Sellers from its indemnification obligations pursuant to Section
        8.4(a)
        if the
        amount of Taxes as ultimately determined (on audit or otherwise) for the
        periods
        covered by such Tax Returns exceeds the amount of Sellers’ payment under this
Section
        8.4(b)(xv).

       

      (c) Tax
        Audits.

       

      (i) If
        notice
        of any Legal Proceeding with respect to Taxes of the Company (a “Tax
        Claim”)
        shall
        be received by Purchaser for which Sellers may reasonably be expected to
        be
        liable pursuant to Section
        8.4(a),
        Purchaser shall promptly notify Sellers in writing of such Tax Claim;
provided,
        however,
        that
        the failure of Purchaser to give Sellers notice as provided herein shall
        not
        relieve Sellers of their obligations under this Section
        8.4
        except
        to the extent that Sellers are actually and materially prejudiced
        thereby.

       

      (ii) Purchaser
        shall have the right, at the expense of Sellers to the extent such Tax Claim
        is
        subject to indemnification by Sellers pursuant to Section
        8.4(a)
        hereof,
        to represent the interests of the Company in any Tax Claim; provided,
        that
        with respect to a Tax Claim relating exclusively to taxable periods ending
        on or
        before the Closing Date, Purchaser shall not settle such claim without the
        consent of Sellers, which consent shall not be unreasonably
        withheld.

       

      (d) Disputes.
        Any
        dispute as to any matter covered hereby shall be resolved by an independent
        accounting firm acceptable to Sellers and Purchaser. The fees and expenses
        of
        such accounting firm shall be borne equally by Sellers, on the one hand,
        and
        Purchaser on the other. If any dispute with respect to a Tax Return is not
        resolved prior to the due date of such Tax Return, such Tax Return shall
        be
        filed in the manner that the Party responsible for preparing such Tax Return
        deems correct.

       

      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

      

      8.5 Tax
        Treatment of Indemnity Payments.
        Sellers
        and Purchaser agree to treat any indemnity payment made pursuant to this
        Article
        VIII
        as an
        adjustment to the Cash Consideration for all income tax purposes. If,
        notwithstanding the treatment required by the preceding sentence, any
        indemnification payment under Article
        VIII
        is
        determined to be taxable to the Party receiving such payment by any Tax
        Authority, the paying Party shall also indemnify the Party receiving such
        payment for any Taxes incurred by reason of the receipt of such payment and
        any
        Losses incurred by the Party receiving such payment in connection with such
        Taxes (or any asserted deficiency, claim, demand, action, suit, proceeding,
        judgment or assessment, including the defense or settlement thereof, relating
        to
        such Taxes). 

       

      ARTICLE
        IX

       

      TERMINATION

       

      9.1 Termination
        of Agreement.
        This
        Agreement may be terminated prior to the Closing under any of the following
        circumstances and conditions:

       

      (a) automatically
        if the Closing has not been accomplished within eighteen (18) months of the
        date
        hereof, provided that this Agreement shall continue to be effective if the
        Parties otherwise agree to extend the term of this Agreement;

       

      (b) by
        written consent of each Party; 

       

      (c) by
        written notice from Purchaser to the other Parties that there has been an
        event,
        change, occurrence or circumstance, individually or in the aggregate that
        has
        had or could reasonably be expected to have a Material Adverse Effect with
        respect to the Company or the Sellers;

       

      (d) by
        any
        Party if there shall be in effect a final non-appealable Order of a Governmental
        Body of competent jurisdiction restraining, enjoining or otherwise prohibiting
        the consummation of the transactions contemplated hereby; or

       

      (e) by
        Purchaser or Sellers if the other Parties shall have breached or failed to
        perform any of their respective representations, warranties, covenants or
        agreements set forth in this Agreement in any material aspect, or if any
        representation or warranty of such other Parties shall have become untrue
        in any
        material aspect, and such breach is incapable of being cured within thirty
        (30)
        days following receipt of a notice sent by the non-breaching Party.

       

      9.2 Procedure
        Upon Termination.
        In
        the
        event of termination, written notice thereof shall forthwith be given to
        the
        other Party or Parties, and this Agreement shall terminate upon arrival of
        such
        notice to the other Party or Parties, and the purchase of the Equity Interests
        hereunder shall be abandoned, without further action by Purchaser, the Company
        or Sellers. 

       

      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

      9.3 Effect
        of Termination. 

       

      (a) In
        the
        event that this Agreement is validly terminated, then each of the Parties
        shall
        be relieved of their duties and obligations arising under this Agreement
        after
        the date of such termination (other than any indemnification liability arising
        from Article
        VIII
        hereof);
provided,
        however,
        that
        the obligations of the Parties set forth in this Section
        9.3
        and
Article
        X
        hereof
        shall survive any such termination and shall be enforceable
        hereunder.

       

      (b) In
        the
        event that this Agreement is validly terminated as provided herein, but the
        Amended Business License and the restated articles of association have been
        issued by SAIC, the Parties agree to jointly apply to SAIC in writing for
        the
        cancellation of the Amended Business License and the restated articles of
        association; if Purchaser has made any prepayment of any portion of the Cash
        Consideration in order to obtain the Amended Business License and the restated
        articles of association or the Amended Certificate of Approval, such prepayment
        shall be returned to Purchaser within five (5) Business Days after the
        termination of this Agreement.

       

      ARTICLE
        X

       

      MISCELLANEOUS

       

      10.1 Expenses.
        Except
        as otherwise provided in this Agreement, Sellers and Purchaser shall each
        bear
        its own expenses incurred in connection with the negotiation and execution
        of
        this Agreement and each other agreement, document and instrument contemplated
        by
        this Agreement and the consummation of the transactions contemplated hereby
        and
        thereby, it being understood that in no event shall the Company bear any
        of such
        costs and expenses.

       

      10.2 Specific
        Performance.
        Without
        prejudicing other rights and remedies which a Party may have under this
        Agreement, Sellers acknowledge and agree that damages may not be an adequate
        remedy for any breach of this Agreement and the remedies of injunction, specific
        performance and other non monetary remedies as permitted by applicable Law
        are
        appropriate for any threatened or actual breach of any provision of this
        Agreement (in addition to other remedies to which Purchaser may be entitled
        under the laws of the PRC) and no proof of special damages shall be necessary
        for the enforcement of the rights under this Section
        10.2.

       

      10.3 Dispute
        Resolution. 

       

      (a) Except
        as
        otherwise expressly provided herein, any dispute, controversy or claim arising
        out of or in relation to this Agreement, including the validity, invalidity,
        breach or termination
        thereof,
        shall be submitted to CIETAC in accordance with the Arbitration Administration
        Procedures of CIETAC and the Arbitration Rules of International Chambers
        in
        force on the date when the notice of arbitration is submitted. The
        arbitration panel shall consist of three (3) arbitrators. Purchaser and Sellers
        shall each select one arbitrator, and a third arbitrator shall be jointly
        selected by Purchaser and Sellers through mutual agreement. If no agreement
        is
        reached, the third arbitrator shall be appointed by CIETAC. Each arbitrator
        shall be impartial and independent of the Parties and shall have more than
        ten
        (10) years’ legal practice experience. . The place of the arbitration shall be
        in Beijing. The arbitral proceedings shall be conducted in Chinese.


       

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

      (b) The
        arbitration award shall be final and binding on the Parties, and the Parties
        agree to be bound thereby and to act accordingly. The costs of arbitration
        and
        the costs of enforcing the arbitral award (including witness expenses,
        attorneys’ fees and the cost of the translator
        appointed in accordance with Section
        10.3(a)
        above)
        shall be borne by the losing party, unless otherwise determined by the arbitral
        award.

       

      (c) When
        any
        dispute occurs and when any dispute is under arbitration, except for the
        matters
        under dispute, the Parties shall continue to fulfill their respective
        obligations (and shall be entitled to exercise their rights) under this
        Agreement.

       

      (d) Each
        Party also consents generally in respect of any proceedings arising out of
        or in
        connection with this Agreement to the giving of any relief or the issue of
        any
        process in connection with such proceedings including the making, enforcement
        or
        execution against any property whatsoever (irrespective of its use or intended
        use) of any order or judgment which may be made or given in such
        proceedings.

       

      (e) Any
        decision or award of the arbitration panel shall be enforceable by any court
        having jurisdiction over the Party against which the decision or award has
        been
        rendered, or wherever assets of the Party against which the decision or award
        has been rendered can be located. If it becomes necessary for a Party to
        enforce
        an arbitral award by legal action of any kind, the defaulting Party shall
        pay
        all reasonable costs and expenses, including attorney’s fees, which shall be
        incurred by the Party seeking to enforce the award.

       

      10.4 Entire
        Agreement; Amendments and Waivers.
        This
        Agreement (including the schedules and exhibits hereto) represent the entire
        understanding and agreement between the Parties hereto with respect to the
        subject matter hereof (including the documents executed by the Parties for
        implementation of the transaction hereunder and not in conflict with this
        Agreement) and can be amended, supplemented or changed, and any provision
        hereof
        can be waived, only by written instrument making specific reference to this
        Agreement signed by the Party against whom enforcement of any such amendment,
        supplement, modification or waiver is sought. The waiver by any Party hereto
        of
        a breach of any provision of this Agreement shall not operate or be construed
        as
        a further or continuing waiver of such breach or as a waiver of any other
        or
        subsequent breach. No failure on the part of any Party to exercise, and no
        delay
        in exercising, any right, power or remedy hereunder shall operate as a waiver
        thereof, nor shall any single or partial exercise of such right, power or
        remedy
        by such Party preclude any other or further exercise thereof or the exercise
        of
        any other right, power or remedy. Except as expressly provided herein, all
        remedies hereunder are cumulative and are not exclusive of any other remedies
        provided by law.

       

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

      10.5 Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        People’s Republic of China.

       

      10.6 Notices.
        All
        notices and other communications under this Agreement shall be in writing
        and
        shall be deemed given (i) when delivered personally by hand (with written
        confirmation of receipt), (ii) when sent by facsimile (with written confirmation
        of transmission) or (iii) one Business Day following the day sent by any
        of the
        following reputable international overnight courier: EMS, DHL or FEDEX (with
        written confirmation of receipt) or three (3) Business Days after such dispatch
        in the case of international deliveries, in each case at the following addresses
        and facsimile numbers (or to such other address or facsimile number as a
        Party
        may have specified by notice given to the other Party pursuant to this
        provision):

       

      If
        to
        Sellers, to:

       

      HUNAN
        MULIN MODERN FOOD COMPANY, LTD.

       

      Hi-tech
        Food Industry Park, Gaotang Hill, 

       

      Hunan,
        China 

       

      


       

      CHEN
        YUANRONG

       

      19F,
        Xindaxin Building #168 Huangxing Middle Road, Changsha

       

      Hunan,
        China 

       

      


       

      If
        to the
        Company, to:

       

      AUSNUTRIA
        DAIRY (HUNAN) COMPANY LTD 

       

      2
        Hexi
        Wangwang East Rd, Changsha

       

      Hunan
        Province, China

       

      


       

      If
        to
        Purchaser, to:

       

      HEILONGJIANG
        MOVEUP FOOD CO., LTD.

       

      1
        Qingxiang Street, Kedong Town, Kedong County, Qiqihaer City 

       

      Heilongjiang
        Province, China 

       

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

      With
        a
        copy to:

      


      Broad
        & Bright Law Firm

      Suite
        701, CBD International Plaza

      No.
        16
        Yong’andongli, Jianguomen Avenue

      Chaoyang
        District, Beijing, 100022, China

      Facsimile:
        +86 10 8518-1919

      Attention:
        Mr. Wang Dong

      


      10.7 Severability.
        If any
        term or other provision of this Agreement is invalid, illegal, or incapable
        of
        being enforced by any law or public policy, all other terms or provisions
        of
        this Agreement shall nevertheless remain in full force and effect so long
        as the
        economic or legal substance of the transactions contemplated hereby is not
        affected in any manner materially adverse to any Party. Upon such determination
        that any term or other provision is invalid, illegal, or incapable of being
        enforced, the Parties hereto shall negotiate in good faith to modify this
        Agreement so as to effect the original intent of the Parties as closely as
        possible in an acceptable manner in order that the transactions contemplated
        hereby are consummated as originally contemplated to the greatest extent
        possible.

       

      10.8 Binding
        Effect; Assignment.
        This
        Agreement shall be binding upon and inure to the benefit of the Parties and
        their respective successors and permitted assigns. Except as otherwise provided
        in this Agreement, this Agreement shall not create or deemed to create any
        third
        party benefit for any individual or entity who is not a Party hereto. No
        assignment of this Agreement or of any rights or obligations hereunder may
        be
        made by either Sellers or Purchaser (by operation of law or otherwise) without
        the prior written consent of the other Parties hereto and any attempted
        assignment without the required consents shall be void. 

       

      10.9 Counterparts.
        This
        Agreement is written and executed in Chinese and English and both versions
        shall
        have equal force and effect. In the event that there is any discrepancy between
        the Chinese and English versions, the Chinese version shall prevail. This
        Agreement may be executed in one or more counterparts, each of which will
        be
        deemed to be an original copy of this Agreement and all of which, when taken
        together, will be deemed to constitute one and the same agreement. 

       

      10.10 Effect.
        This
        Agreement shall become effective and binding upon each Party, its successors
        and
        permitted assigns. 

       

      10.11 Third
        Party Beneficiary.
        Except
        to the extent expressly stated otherwise herein, nothing in this Agreement
        is
        intended to confer upon any Person other than the Parties hereto and their
        respective successors and permitted assigns any rights, benefits, or obligations
        hereunder. 

       

      **
        REMAINDER OF PAGE INTENTIONALLY LEFT BLANK**

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
        by
        their respective officers thereunto duly authorized, as of the date first
        written above. 

       

      
        	
                PURCHASER:

                HEILONGJIANG
                  MOVEUP FOOD CO., LTD.     
                  

              	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                By:  
                  

              	/s/ Liu
                Shenghui	 	 	 
	
                 

                Name:  

              	
                
Liu
                Shenghui	 	 	
              
	
                Title:  


              	Chairman,
                Legal
                Representative	 	 	 


      

       

      
        
          	
                  
                    SELLER:

                    HUNAN
                      MULIN MODERN FOOD COMPANY,
                      LTD.      

                  

                	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                  By:  
                    

                	/s/ Wu
                  Xingxing	 	 	 
	
                   

                  Name:  

                	
                  
Wu
                  Xingxing	 	 	
                
	
                  Title:  


                	Chairman,
                  Legal
                  Representative	 	 	 


        

        
           

          
            	
                    CHEN
                      YUANRONG     

                  	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                    By:  
                      

                  	/s/ Chen
                    Yuanrong	 	 	 
	
                     

                    Name:  

                  	
                    
Chen
                    Yuanrong	 	 	
                  


          

          
             

            
              	
                      
                        COMPANY:
                          

                        AUSNUTRIA
                          DAIRY (HUNAN) COMPANY LTD    
                          

                      

                    	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                      By:  
                        

                    	/s/ Weibin
                      Yan	 	 	 
	
                       

                      Name:  

                    	
                      
Weibin
                      Yan	 	 	
                    
	
                      Title:  


                    	Chairman,
                      Legal
                      Representative 	 	 	 


            

             

            
              
                
                

              

              
                48

                
                  

                

              

              
                
                

              

            

          

        

      

       

      SCHEDULE
        1

       

      EQUITY
        INTERESTS

       

      
        	
                Sellers

              	 	
                Percentage

              	 	
                Certificates

              
	
                Hunan
                  Mulin Modern Food Company, Ltd.

              	 	
                43%

              	 	 
	
                Chen
                  Yuanrong

              	 	
                32%

              	 	 


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        A

      


      Payment
        Acknowledgement (Form)

      


      Pursuant
        to the Equity Transfer Agreement dated as of [·](the
        “Agreement”),
        by
        and among HEILONGJIANG MOVEUP FOOD CO., LTD. (“Purchaser”),
        AUSNUTRIA DAIRY (HUNAN) COMPANY LTD. (the “Company”),
        HUNAN
        MULIN MODERN FOOD COMPANY, LTD (THE “Domestic
        Shareholder”)
        and
        Mr. CHEN YUANRONG (the “Management
        Shareholder”),
        (with
        capitalized terms defined in the Agreement having the same meaning when used
        herein), [Domestic Shareholder] hereby acknowledge that:

       

      
        	
                (a)

              	
                it
                  has received an amount equal to RMB206,500,000 in accordance with
                  Section
                  2.2 of the Agreement, which represents the payment in full by Purchaser
                  for the purchase of forty three percent (43%) of the Equity Interests
                  of
                  the Company; and

              


      

      


      
        	
                (b)

              	
                there
                  is not any payment outstanding by Purchaser under the
                  Agreement.

              


      

      


      
        	 	 	 
	 	HUNAN
                MULIN MODERN
                FOOD COMPANY, LTD
	 
 	 
 	 
 
	 	By:  	 
	 	Name:  	
                

                Wu
                  Xingxing 

              
	 	Title:   	Chairman, Legal Representative 
	 	 	 


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        B

      


      Closing
        Certificate (Form)

      


      AUSNUTRIA
        DAIRY (HUNAN) COMPANY LTD.

      HUNAN
        MULIN MODERN FOOD COMPANY, LTD.

      AND

      CHEN
        YUANRONG

      


      CLOSING
        CERTIFICATE

      [DATE]

      


      Reference
        is hereby made to the Equity Purchase Agreement, dated as of [·] (the
“Equity
        Purchase Agreement”),
        by
        and among (1) HEILONGJIANG MOVEUP FOOD CO., LTD. (“Purchaser”),
        a
        company duly organized and existing under the PRC laws, (2) AUSNUTRIA DAIRY
        (HUNAN) COMPANY LTD., a Sino-foreign equity joint venture duly organized
        under
        the PRC laws (“Company”),
        and
        (3) HUNAN MULIN MODERN FOOD COMPANY, LTD, a limited liability company organized
        and existing under the PRC laws (the “Domestic
        Shareholder”)
        and
        MR. CHEN YUANROGN (the “Management
        Shareholder”),
        a
        PRC citizen with PRC identification card number 432627195909267514
        and
        address at 19F,
        Xindaxin Building #168 Huangxing Middle Road, Changsha, Hunan,
        China.

       

      Each
        of
        Domestic Shareholder and Management Shareholder is referred to herein
        individually as an “Seller”,
        and
        collectively as the “Sellers”.
        Capitalized terms used herein but not otherwise defined shall have the meanings
        set forth in the Equity Purchase Agreement.

      


      The
        undersigned authorized officers of Sellers and the Company hereby certify
        to
        Purchaser as follows:

      


      
        	
                1.

              	
                The
                  representations and warranties of Sellers set forth in the Equity
                  Purchase
                  Agreement are true and correct in all material respects as of the
                  date of
                  the Equity Purchase Agreement and as of the date hereof, as though
                  made as
                  of the date hereof.

              


      

      


      
        	
                2.

              	
                Sellers
                  have each performed and complied with all agreements, obligations
                  and
                  conditions required in the Equity Purchaser Agreement which each
                  is
                  required to perform or comply with on or before the
                  Closing.

              


      

      


      
        
          	3.	
                  Since
                    the date of the Equity Purchase Agreement, there has not been
                    any event,
                    change, occurrences or circumstance that, individually or in
                    the aggregate
                    with any such events, changes, occurrences or circumstances,
                    has had or
                    could reasonably be expected to have a Material Adverse
                    Effect.

                


        

      

      


      
        	
                4.

              	
                No
                  actions have been instituted or threatened or claim or demand made
                  against
                  either of the Sellers or the Company seeking to restrain or prohibit
                  or to
                  obtain substantial damages with respect to the consummation of
                  the
                  transactions contemplated under the Equity Purchase Agreement,
                  and there
                  is not in effect any Order of any Governmental Body of competent
                  jurisdiction restraining, enjoining or otherwise prohibiting the
                  consummation of the transactions contemplated under the Equity
                  Purchase
                  Agreement.

              


      

       

      This
        certificate is issued by Sellers and the Company in accordance with Section
        2.5
        of the Equity Purchase Agreement.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the undersigned have executed and delivered this Certificate
        as
        of the date first above written.

       

      
        
          	
                  AUSNUTRIA
                    DAIRY (HUNAN) COMPANY
                    LTD.  

                	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                  By:  
                    

                	 	 	 	 
	
                   

                  Name:  

                	
                  
Leng
                  Youbin	 	 	
                
	
                  Title:  


                	Chairman,
                  Legal
                  Representative	 	 	 


        

         

      

      
         

        
          
            	
                    HUNAN
                      MULIN MODERN FOOD COMPANY,
                      LTD  

                  	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                    By:  
                      

                  	 	 	 	 
	
                     

                    Name:  

                  	
                    
Wu
                    Xingxing	 	 	
                  
	
                    Title:  


                  	Chairman,
                    Legal
                    Representative	 	 	 


          

           

        

      

      
         

        
          	
                  CHEN
                    YUANRONG     

                	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                  By:  
                    

                	 	 	 	 
	
                   

                  Name:  

                	
                  
Chen
                  Yuanrong	 	 	
                


        

        
           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

      EXHIBIT
        C

      


      List
        of Deliverables to the Purchaser on the Closing Date

      


      
        	
              	1.	
                The
                  Equity Purchase Agreement executed and delivered by all Parties
                  thereto;

              


      

       

      
        	 	
                2.

              	
                The
                  Amended Certificate of Approval of the Company, evidencing that
                  Purchaser
                  owns 75% of the equity in the
                  Company;

              


      

       

      
        	 	
                3.

              	
                The
                  Amended Business License of the Company, evidencing that Purchaser
                  owns
                  75% of the equity in the Company;

              


      

       

      
        	 	
                4.

              	
                Unanimous
                  Board resolutions of the Company, approving the transactions contemplated
                  under the Equity Purchase
                  Agreement;

              


      

       

      
        	 	
                5.

              	
                Unanimous
                  Board resolutions of the Company, approving the restated articles
                  of
                  association;

              


      

       

      
        	
              	6.	
                The
                  restated article of association;

              


      

       

      
        	
              	7.	
                The
                  restated joint venture contract; 

              


      

       

      
        	 	
                8.

              	
                Payment
                  Acknowledgment to be executed and delivered by each of Domestic
                  Shareholder and Management Shareholder;


              


      

       

      
        	 	
                9.

              	
                Closing
                  Certificate to be executed and delivered by each of Domestic Shareholder
                  and Management Shareholder;

              


      

       

      
        	 	
                10.

              	
                Land
                  use right certificate issued by the appropriate Government Body
                  to the
                  Company with respect to the Ausnutria Land free of any and all
                  Liens with
                  a term expiring no earlier than July 31, 2051; and
                  

              


      

       

      
        	
              	11.	
                Building
                  ownership certificate issued by the appropriate Government Body
                  to the
                  Company with respect to each of the buildings and other real property
                  located on the Ausnutria Land free of any and all
                  Liens