Document:

Unassociated Document

    CONFIDENTIAL

     

    AMERICAN
      DAIRY, INC.

     

    (as
      the “Lender”)

     

    and
      

     

    MOVEUP
      LIMITED 

     

    (as
      the “Borrower”)

     

    
      
        

      

    

     

    LOAN
      AGREEMENT

     

    
      

    

     

    Dated
      as
      of June
      27, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    THIS
      LOAN AGREEMENT
      (this
“Agreement”)
      is
      made on June 27, 2007. 

     

    BETWEEN

     

    
      	
              (1)

            	
              American
                Dairy, Inc.,
                a
                company incorporated under the laws of ___________________ (“Lender”);
                and

            

    

     

    
      	
              (2)

            	
              Moveup
                Limited,
                a
                company incorporated under the laws of Samoa (the “Borrower”).

            

    

     

    Each
      of
      the parties named above shall be referred to as a “Party”,
      and
      collectively as the “Parties”.

     

    WHEREAS

     

    
      	
              (A)

            	
              Borrower
                is contemplating purchasing 100% of the equity interest (the “Acquisition”)
                in Ausnutria Dairy (Hunan) Company, currently an equity joint venture
                established under the laws of the People’s Republic of China
                (“PRC”);
                and

            

    

     

    
      	
              (B)

            	
              Lender
                is willing to make the loan under the terms and conditions of this
                Agreement for the purpose of the Acquisition.

            

    

     

    NOW,
      THEREFORE, in
      consideration of the premises and the mutual covenants and agreements
      hereinafter contained, the Parties hereby agree as follows:

     

    
      	
              1.

            	
              DEFINITION

            

    

     

    Unless
      otherwise defined in this Agreement, capitalized terms used in this Agreement
      shall have the following meanings:

     

    “Affiliate”
shall
      mean, 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.

     

    “Person”
shall
      mean any individual, firm, corporation (including a business trust), limited
      liability company, partnership, joint venture, association, joint stock company,
      trust, unincorporated organization, governmental agency or other entity.

     

    “Repayment
      Date”
shall
      mean the fifth anniversary of the date hereof.

     

    “RMB”
shall
      mean the lawful currency of PRC.

     

    “US$”
shall
      mean the lawful currency of the United States of America.

     

    
      	
              2.

            	
              THE
                LOAN

            

    

     

    Subject
      to the terms of this Agreement, Lender will make an advance in US$ or other
      convertible currency in an amount equivalent to US$ 10 million (the
“Loan”)
      to
      Borrower on the date that Borrower is obligated to make any deposit or advance
      payment for the Acquisition (the “Effective
      Date”).

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              3.

            	
              ADVANCE
                OF THE LOAN

            

    

     

    On
      the
      Effective Date, Lender will release the funds of the Loan by wire transfer
      or
      other means mutually agreed between the Parties to an account designated by
      Borrower. 

     

    
      	4.	
              INTEREST
                

            

    

     

    
      	 	
              4.1

            	
              Subject
                to Section 4.2 below, the Loan shall not bear any interest.
                

            

    

     

    
      	 	
              4.2

            	
              Notwithstanding
                Section 4.1 above, effective immediately upon the occurrence of an
                Event
                of Default and for as long thereafter as such Event of Default shall
                be
                continuing, the principal balance of the Loan, and the amount of
                all other
                obligations then due and payable hereunder, shall bear interest at
                a rate
                that is twelve percent per
                annum.
                Such interest shall be payable on
                demand.

            

    

     

    
      	
              5.

            	
              REPAYMENT

            

    

     

    Borrower
      promises to repay the Loan in full on the Repayment Date or earlier if required
      by the terms hereof.

     

    
      	
              6.

            	
              PAYMENTS

            

    

     

    
      	 	
              6.1

            	
              Borrower
                shall make all payments of principal and interest in respect of the
                Loan
                hereunder in the same currency of the Loan advanced by the Lender
                free and
                clear of, and without withholding or deduction for, any present or
                future
                taxes, duties, assessments or other governmental charges of whatever
                nature imposed, levied, collected, withheld or assessed by any relevant
                taxing jurisdiction unless such withholding or deduction is required
                by
                applicable law. In the event that any withholding or deduction is
                required
                by applicable law, Borrower shall pay such additional amounts as
                will
                result in the receipt by the Lender of such net amount as would have
                been
                received by it if no such withholding or deduction had been
                required.

            

    

     

    
      	 	
              6.2

            	
              Unless
                otherwise agreed by Lender, all such interest and principal shall
                be paid
                to the bank account of Lender or any other person or entity as the
                Lender
                may designate to Borrower for this
                purpose.

            

    

     

    
      	
              7.

            	
              REPRESENTATIONS
                AND WARRANTIES

            

    

     

    To
      induce
      the Lender to enter into this Agreement, Borrower represents and warrants each
      of the following to the Lender, on and as of the date hereof and after giving
      effect to the making of the Loan on the Effective Date:

     

    
      	 	
              7.1

            	
              Borrower
                has the authority and legal power to enter into this Agreement and
                to
                borrow the Loan pursuant to the terms
                hereof.

            

    

     

    
      	 	
              7.2

            	
              The
                execution, delivery and performance by Borrower of this
                Agreement
                do
                not and will not (a) violate any laws applicable to Borrower, (b)
                conflict
                with or result in the breach of, or constitute a default under, any
                material contractual obligation of Borrower or (c) require the consent
                of,
                authorization by, approval of, notice to, or filing or registration
                with,
                any governmental agency or any other
                Person.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              7.3

            	
              This
                Agreement has been duly executed and delivered by Borrower. This
                Agreement
                constitutes the legal, valid and binding obligation of Borrower,
                enforceable against Borrower in accordance with the terms
                hereof.

            

    

     

    
      	
              8.

            	
              COVENANTS
                OF BORROWER

            

    

     

    So
      long
      as any amount of the Loan under this Agreement remains outstanding, Borrower
      shall:

     

    
      	 	
              8.1

            	
              use
                the proceeds of the Loan for the payment of any deposit or advance
                payment
                or the purchase price of the Acquisition;
                and

            

    

     

    
      	 	
              8.2

            	
              use
                its best effort to consummate the Acquisition, including entering
                into all
                the definitive agreements as necessary, filing for all the registrations
                or approvals for the Acquisition required under the applicable law,
                and
                complying with the covenants set forth in the definitive agreements;
                and

            

    

     

    
      	
              9.

            	
              EVENTS
                OF DEFAULT

            

    

     

    
      	 	
              9.1

            	
              An
                “Event
                of Default”
                shall mean any of the following
                events:

            

    

     

    
      	 	
              9.1.1

            	
              Borrower
                fails to pay any amount of the Loan, interest or fees when they become
                due
                and payable under this Agreement;

            

    

     

    
      	 	
              9.1.2

            	
              Borrower
                fails to perform, observe or comply with any of the covenants contained
                in
                Section 8 hereof; or

            

    

     

    
      	 	
              9.1.3

            	
              Any
                representation or warranty made by Borrower herein is not true and
                correct
                when made.

            

    

     

    
      	 	
              9.2

            	
              Upon
                the occurrence of an Event of Default, the Lender may, by notice
                to
                Borrower, declare the Loan, all interest thereon and all other amounts
                and
                obligations payable under this Agreement to be forthwith due and
                payable,
                whereupon the Loan, all such interest and all such amounts and obligations
                shall become and be forthwith due and payable, without presentment,
                demand, protest or further notice of any kind, all of which are hereby
                expressly waived by Borrower. In addition to the remedies set forth
                above,
                the Lender may commence such legal action or proceedings or exercise
                any
                other remedies provided by applicable law.

            

    

     

    
      	
              10.

            	
              AMENDMENT
                AND MODIFICATION 

            

    

     

    Except
      as
      otherwise permitted herein, this Agreement and its provisions may be amended,
      supplemented, changed, modified or terminated by a writing signed by both
      Parties.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              11.

            	
              LOAN
                ASSIGNMENT

            

    

     

    Subject
      to the prior notification to Borrower but without the necessity of obtaining
      Borrower’ consent, Lender may, at the Lender’s sole discretion, assign its
      rights and liabilities under this Agreement to an Affiliate of Lender.

     

    
      	
              12.

            	
              GOVERNING
                LAW 

            

    

     

    This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the
      State of New York. 

     

    
      	
              13.

            	
              ARBITRATION

            

    

     

    The
      Parties agree to negotiate in good faith to resolve any disputes among them
      regarding this Agreement. If any dispute cannot be resolved through negotiation,
      it shall be resolved through arbitration at HKIAC in accordance with the
UNCITRAL
      Arbitration Rules as at present in force. There shall be three (3) arbitrators
      on the arbitration panel. Borrower and Lender shall each appoint one arbitrator,
      and the third arbitrator shall be selected by the chairman of HKIAC. The
      language used throughout the arbitral proceedings shall be English. The
      arbitration award shall be final and binding on the Parties. The costs of
      arbitration and enforcing the arbitral award (including witness expenses,
      attorneys' fees) shall be borne by the losing Party, unless otherwise determined
      by the arbitration panel.

     

    
      	
              14.

            	
              MISCELLANEOUS

            

    

     

    
      	
            	14.1	
              Counterparts.
                This Agreement may be executed in any number of counterparts and
                by the
                Parties in separate counterparts, each of which when so executed
                shall be
                deemed to be an original and all of which taken together shall constitute
                one and the same agreement.

            

    

     

    
      	
            	14.2	
              Successors.
                This Agreement shall be binding upon and inure to the benefit of
                the
                Parties and their respective successors and
                assigns.

            

    

     

    
      	
            	14.3	
              Severability.
                If
                any one or more of the provisions contained in this Agreement, or
                the
                application thereof in any circumstance, is held invalid, illegal
                or
                unenforceable in any respect for any reason, the validity, legality
                and
                enforceability of any such provision in every other
                respect and of the remaining provisions hereof shall not be in any
                way
                impaired, unless the provisions held invalid, illegal or unenforceable
                shall substantially impair the benefits of the remaining provisions
                of
                this Agreement. The Parties further agree to replace such invalid,
                illegal
                or unenforceable provision of this Agreement with a valid, legal
                and
                enforceable provision that will achieve, to the extent possible,
                the
                economic, business and other purposes of such invalid, illegal or
                unenforceable provision.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Loan Agreement the day and year first above
      written.

    

      
      

    

    
      	Lender:
              AMERICAN
                DAIRY, INC.

            	 	 	Borrower:
              MOVEUP
                LIMITED

            
	 	 	 	 
	By:  
              /s/ Leng You Bin	 	 	By: 
/s/
              Michael Tung
	
              
                

              
Name: Leng
              You Bin	 	 	
              
                

              

              Name:
                Michael Tung

            
	
              
                Title: 
                  Chief
                  Executive Officer
                   

                

              

            	 	 	
              
                Title:
                  DirectorEXECUTION
      COPY

    CONFIDENTIAL

     

    EQUITY
      PURCHASE AGREEMENT

     

    by
      and
      among 

     

    MOVEUP
      LIMITED

     

    and

     

    HUNAN
      MULIN MODERN FOOD COMPANY, LTD.

     

    AUSTRALIA
      AUSNUTRIA DAIRY PTY

     

    CHEN
      YUANRONG

     

    and

     

    AUSNUTRIA
      DAIRY (HUNAN) COMPANY LTD.

     

    Dated
      as
      of August
      2,
      2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    EQUITY
      PURCHASE AGREEMENT

     

    This
      EQUITY
      PURCHASE AGREEMENT,
      dated
      as of August 2, 2007 (this “Agreement”),
      is by
      and among:

     

    1. MOVEUP
      LIMITED,
      a
      company duly organized under the laws of Samoa with
      the
      registered address at _____________________________
      (“Purchaser”);

     

    2. AUSNUTRIA
      DAIRY (HUNAN) COMPANY LTD.,
      a
      Sino-foreign equity joint venture duly organized under the laws of the People’s
      Republic of China with its registered address at 9F XinDaxin Building, 168
      Huangxin Middle Rd, Changsha, Hunan, People’s Republic of China 410005 (the
“Company”);
      

     

    3. HUNAN
      MULIN MODERN FOOD COMPANY, LTD., a
      limited
      liability company organized
      and existing under the laws of the People’s
      Republic of China
      (the
“Domestic
      Shareholder”),
      AUSTRALIA
      AUSNUTRIA DAIRY Pty Ltd.,
      a
      company organized and existing under the laws of Australia and (the
“Foreign
      Shareholder”)
      and
      Mr. CHEN
      YUANRONG (the
      “Management
      Shareholder”),
      a PRC
      Resident with PRC identification card number _____________ and address at
      _______________________________ (each of Domestic Shareholder, Foreign
      Shareholder and Management Shareholder is referred to herein individually as
      an
“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 issued
      and
      outstanding 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:

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1 Certain
      Definitions.

     

    (A) 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 Shanghai and
      New
      York are open to the public for conducting business and are not required or
      authorized to close.

     

    “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 and its Subsidiaries, including any natural person who, according to
      applicable Law, may be deemed as having a de facto labor relationship with
      the
      Company or any of its Subsidiaries, though the Company or any of its
      Subsidiaries 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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Escrow
      Amount”
shall
      mean the amount of RMB 77,000,000.00 deposited in the escrow account set up
      pursuant to an escrow agreement among Domestic Shareholder, Foreign 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).

     

    “HKIAC”
shall
      mean the Hong Kong International Arbitration Center and its
      successors.

     

    “Hong
      Kong”
shall
      mean the Hong Kong Special Administrative Region.

     

    “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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “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 and the Subsidiaries (taken
      as
      a whole) 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
      and
      the Subsidiaries. 

     

    “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.

     

    “SAFE”
means
      the State Administration of Foreign Exchange of the PRC and its local
      counterparts. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

    “Shareholders”
means
      Domestic Shareholder, Foreign 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.

     

    “Subsidiary”
means
      any Person of which a majority of the outstanding share capital, voting
      securities or other voting equity interests are owned, directly or indirectly,
      by the Company.

     

    “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 or any Subsidiary.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    1.2 Terms
      Defined Elsewhere in this Agreement.
      For
      purposes of this Agreement, the following terms shall have the meanings set
      forth in the sections indicated, when such terms are used in the main text
      of
      this Agreement and all the exhibits and schedules (unless as otherwise defined
      in relevant exhibit or schedule):

     

    
      	
              Term

            	 	
              Section

            	 
	
              Agreement

            	 	 	
              Recitals

            	 
	
              Amended
                Business License

            	 	 	
              2.5

            	 
	
              Amended
                Certificate of Approval 

            	 	 	
              2.5

            	 
	
              Base
                Date Balance Sheet

            	 	 	
              4.7(a

            	
              )

            
	
              Cash
                Consideration

            	 	 	
              2.2(a

            	
              )

            
	
              Closing
                

            	 	 	
              2.5

            	 
	
              Closing
                Certificate

            	 	 	
              2.5

            	 
	
              Closing
                Date

            	 	 	
              2.5

            	 
	
              Company

            	 	 	
              Recitals

            	 
	
              Company
                Documents

            	 	 	
              4.2
                

            	 
	
              Company
                Marks

            	 	 	
              6.7

            	 
	
              Company
                Permits

            	 	 	
              4.18(b

            	
              )

            
	
              Company
                Property 

            	 	 	
              4.11(a

            	
              )

            
	
              Company
                Transaction Expenses

            	 	 	
              6.11

            	 
	
              Company
                Welfare Plans

            	 	 	
              4.15(a

            	
              )

            
	
              Confidential
                Information

            	 	 	
              6.1

            	 
	
              Copyrights

            	 	 	
              4.13(a

            	
              )

            
	
              Domestic
                Shareholder

            	 	 	
              Recitals

            	 
	
              Employee
                Benefits Plans

            	 	 	
              4.15(a

            	
              )

            
	
              Equity
                Interests

            	 	 	
              Recitals

            	 
	
              FCPA

            	 	 	
              6.15

            	 
	
              Financial
                Statements 

            	 	 	
              4.7(a

            	
              )

            
	
              Foreign
                Shareholder

            	 	 	
              Recitals

            	 
	
              Intellectual
                Property

            	 	 	
              4.13(a

            	
              )

            
	
              Intellectual
                Property Licenses

            	 	 	
              4.13(a

            	
              )

            
	
              Loss/Losses

            	 	 	
              8.2(a

            	
              )

            
	
              Management
                Letters 

            	 	 	
              6.1

            	 
	
              Management
                Shareholder

            	 	 	
              Recitals

            	 
	
              Marks

            	 	 	
              4.13(a

            	
              )

            
	
              Material
                Contracts 

            	 	 	
              4.14(a

            	
              )

            
	
              Necessary
                Approvals

            	 	 	
              7.3

            	 
	
              Non-competition
                and Confidentiality Agreement

            	 	 	
              7.1(h

            	
              )

            
	
              Occupied
                Property

            	 	 	
              4.11(a

            	
              )

            
	
              Parties/Party

            	 	 	
              Recitals

            	 
	
              Patents

            	 	 	
              4.13(a

            	
              )

            
	
              Payment
                Acknowledgement

            	 	 	
              2.4

            	 
	
              Personal
                Property Leases

            	 	 	
              4.12(b

            	
              )

            
	
              Purchaser

            	 	 	
              Recitals

            	 
	
              Purchaser
                Documents

            	 	 	
              5.2
                

            	 
	
              Purchaser
                Indemnified Parties

            	 	 	
              8.2(a

            	
              )

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
              Term

            	 	
               Section

            	 
	
              Purchaser’s
                Environmental Assessment

            	 	 	
              6.8(a

            	
              )

            
	
              Real
                Property Lease

            	 	 	
              4.11(a

            	
              )

            
	
              Related
                Party Transaction 

            	 	 	
              6.9

            	 
	
              Related
                Persons

            	 	 	
              4.23
                

            	 
	
              Reference
                Date

            	 	 	
              4.7(a

            	
              )

            
	
              Restricted
                Business

            	 	 	
              6.14(a

            	
              )

            
	
              Seller

            	 	 	
              Recitals

            	 
	
              Seller
                Documents 

            	 	 	
              3.2

            	 
	
              Tax
                Claim

            	 	 	
              8.4(i

            	
              )

            
	
              Third
                Party Claim

            	 	 	
              8.3(b

            	
              )

            
	
              Trade
                Secrets

            	 	 	
              4.13(a

            	
              )

            

    

    

     

    1.3 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.

     

    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. 

     

    Gender
      and Number.
      Any
      reference in this Agreement to gender shall include all genders, and words
      imparting the singular number only shall include the plural and vice
      versa.

     

    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.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    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 RMB 350,000,000.00 (the “Cash
      Consideration”)
      of
      which the Domestic Shareholder shall receive RMB 150,500,000.00, the Foreign
      Shareholder shall receive RMB 87,500,000.00 or equivalent foreign currency
      and
      the Management Shareholder shall receive RMB 112,000,000.00

     

    (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 100% of the
      ownership and control over the Company and so that Purchaser has complete and
      absolute control over the Company and owns and controls directly the business
      and all the tangible and intangible assets of the Company. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    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) The
      Domestic Shareholder and the Management Shareholder shall each open an interim
      foreign currency bank account. The Foreign Shareholder shall designate a bank
      account offshore. Each Seller shall inform Purchaser of the bank account
      information. Purchaser shall, within 3 Business Days after the Sellers provide
      the bank accounts numbers, pay to the Sellers, their shares of 20% of the Cash
      Consideration (the “Advance Payment”). If practical, all Parties agree that the
      Escrow Amount shall be released from the escrow and used to pay portion or
      all
      of the Advance Payment; if the Escrow Amount is not used to make the Advance
      Payment, then within three Business Days after Purchaser make the Advance
      Payment, Sellers shall cooperate with Purchaser and return the Escrow Amount
      to
      Purchaser.

     

    (c) The
      Parties shall jointly apply to MOFCOM’s local office, Changsha Bureau of
      Commerce, and obtain the Amended Certificate of Approval, and take the actions
      to satisfy the conditions precedent set forth in Article VII, including
      obtaining the Amended Business License;

     

    (d) Within
      three Business Days after all the conditions precedent set forth in Article
      VII
      are met or duly waived, Purchaser shall pay to Sellers the remaining 80% of
      the
      Cash Consideration, and the Parties shall deliver the closing documents in
      accordance with Section 2.6. Purchaser shall cooperate with Domestic Shareholder
      and Management Shareholder with their foreign currency registration and foreign
      currency exchange procedures to complete the currency exchange.

     

    2.4 Payment
      Confirmation.

     

    (a) Purchaser
      shall, on or before the Closing Date, use its commercially reasonable efforts
      to, and Sellers shall provide assistance to Purchaser to, obtain an approval
      letter in relation to foreign exchange control from the SAFE approving Purchaser
      to make payment in accordance with this Agreement. 

     

    (b) 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 Weil Gotshal & Manges LLP, 38/F Tower 2
      Plaza, 1366 Nan Jing Road (W), Shanghai 200040, 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
      sole holder of Equity Interests (the “Amended
      Certificate of Approval”)
      and
      the amended business license from the SAIC showing Company’s status has been
      changed from an equity joint venture to a wholly foreign owed enterprise (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, Sellers and the Company shall jointly
      execute a closing certificate in the form as set out in Exhibit
      B
      hereto
      (the “Closing
      Certificate”).
      

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    2.6 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.

     

    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.
      Each of
      the Domestic Shareholder and the Foreign 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. 

     

    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.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (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.

     

     

    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. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    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, the Subsidiary 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).
      

     

    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 Sellers.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (b) The
      Equity Interests represents 100% 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, and the Company cause each of the Subsidiaries to
      deliver, to Purchaser true, correct, current and complete copies of their
      business licenses and articles of association (each certified in writing by
      the
      authorized representative of the Company or each of the Subsidiaries as true,
      correct, current and complete copies thereof with the official seal of the
      Company or each of the Subsidiaries affixed thereto) or comparable
      organizational documents of the Company and each of the Subsidiaries in each
      case as amended and in effect on the due date hereof, including all amendments
      thereto.

     

    (b) The
      meeting resolutions of the Company and each Subsidiary previously made available
      to Purchaser and kept at the Company and each Subsidiary after the Closing
      Date
      contain all of the resolutions made by the Company and each Subsidiary 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
      and each Subsidiary. 

     

    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 and its Affiliates have 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”.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (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, including the Subsidiaries, 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.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (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.

     

    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 or any Subsidiary have been
      examined by the relevant Tax Authority.

     

    
      
        
        

      

      
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    (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 or any Subsidiary, 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 or any Subsidiary, (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.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (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”),
      (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).

     

    
      
        
        

      

      
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    (b) Each
      of
      the Company and the Subsidiaries, 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. Neither
      the Company nor an Subsidiary is 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. Neither the Company nor any Subsidiary has
      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 or any of the
      Subsidiary 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) Neither
      the Company nor any Subsidiary owns, holds, is 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) Neither
      the Company nor any Subsidiary has 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.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (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. 

     

    
      
        
        

      

      
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    (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.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (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 and the Subsidiaries 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.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (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 any of the Subsidiaries 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.

     

    (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.

     

    
      
        
        

      

      
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    (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 or any of
      the
      Subsidiaries (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
      or
      any of the Subsidiaries;

     

    (iii) Contracts
      for the sale of any of the assets of the Company or any of the Subsidiaries
      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 or any of the Subsidiaries
      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 or a Subsidiary without
      penalty on notice of 180 days’ or less.

     

    (b) Except
      as
      set forth on Schedule
      4.14(b),
      neither
      the Company nor any Subsidiary has 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 and the Subsidiaries under any Material Contract.

     

    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”).

     

    
      
        
        

      

      
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    (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.

     

    
      
        
        

      

      
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    (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) Neither
      the Company nor any of its Subsidiaries has 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),
      neither
      the Company nor any of its Subsidiaries is 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. 

     

    
      
        
        

      

      
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    (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 any of its Subsidiaries (or pending or, to
      the
      Knowledge of the Company and Sellers, threatened against any of the officers,
      directors or Employees of the Company or any of its Subsidiaries with respect
      to
      their business activities on behalf of the Company), or to which the Company
      or
      any of its Subsidiaries 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,
      neither
      the Company nor any of its Subsidiaries is subject to any Order, and neither
      the
      Company nor any of its Subsidiaries is in breach or violation of any Order.
      Except as set forth on Schedule
      4.17,
      neither
      the Company nor any of its Subsidiaries is 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 any of its Subsidiaries or to which the Company or any
      of
      its Subsidiaries 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 and the Subsidiaries are in compliance in all material respects with
      all
      applicable Law applicable to its business, operations or assets. Neither the
      Company nor any of its Subsidiaries has received any notice of or been charged
      with the violation of any applicable Law. Except as disclosed under Section
      4.18(a)
      hereof,
      neither the Company nor any of its Subsidiaries is 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
      or
      any of its Subsidiaries 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 or any of its Subsidiaries 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 and the Subsidiaries currently have 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. Neither the Company nor any of its Subsidiaries is 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.

     

    
      
        
        

      

      
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    4.19 Environmental
      Matters.

     

    (a) The
      operations of the Company and each of its Subsidiaries 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) Neither
      the Company nor any of its Subsidiaries is 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 or any of its Subsidiaries alleging that the
      Company or any of its Subsidiaries 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 of its Subsidiaries or any property currently
      or formerly owned, operated or leased by the Company or any of its Subsidiaries
      or any property to which the Company or any of its Subsidiaries 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 or any of its Subsidiaries 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;

     

    
      
        
        

      

      
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    (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 or any of its Subsidiaries) 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 or any of its Subsidiaries.

     

    4.20 Insurance.
      The
      Company and each of the Subsidiaries have insurance policies in full force
      and
      effect for such amounts satisfying all requirements of applicable Law, all
      agreements to which the Company or the Subsidiary 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 or any
      of
      its Subsidiaries 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 or any of its Subsidiaries 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 or any of its Subsidiaries 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 or any of its Subsidiaries to
      give any notice or information or the Company or any of its Subsidiaries giving
      any inaccurate or erroneous notice or information, which limits or impairs
      the
      rights of the Company or any of its Subsidiaries 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.

     

    
      
        
        

      

      
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    (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.

     

    4.23 Related
      Party Transactions.
      Except
      as disclosed in Schedule
      4.23,
      no
      Employee, officer, director, equity holder, partner or member of the Company
      or
      any of its Subsidiaries, any of his or her Associates or any of their respective
      Affiliates (“Related
      Persons”)
      (i)
      owes any amount to the Company or any of its Subsidiaries nor does the Company
      or any of its Subsidiaries owe any amount to, or has the Company or any of
      its
      Subsidiaries 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 or any of its Subsidiaries (whether written or oral), (iii) owns any
      property or right, tangible or intangible, that is used by the Company or any
      of
      its Subsidiaries, (iv) to the Knowledge of the Company and Sellers, has any
      claim or cause of action against the Company or any of its Subsidiaries 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 or any Subsidiary.

     

    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.

     

    
      
        
        

      

      
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    (b) Since
      December 31, 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) Neither
      the Company nor any of its Subsidiaries has 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) Neither
      the Company nor any of its Subsidiaries has 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 or any of the Subsidiaries with respect to
      products delivered or sold by or on behalf of the Company or any of the
      Subsidiaries. 

     

    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 or any Subsidiary 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 or any
      Subsidiary.

     

    4.27 Certain
      Payments.
      

     

    (a) 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.

     

    
      
        
        

      

      
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    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 laws of Samoa 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.

     

    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.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (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, and shall cause the Subsidiaries
      to:

     

    (i) conduct
      the respective businesses of the Company and the Subsidiaries 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 the Subsidiaries, and (B) preserve
      the present relationships with customers and suppliers of the Company and the
      Subsidiaries;

     

    (iii) maintain
      (A) all of the assets and properties of, or used by, the Company and the
      Subsidiaries in their current condition, ordinary wear and tear excepted, and
      (B) insurance upon all of the properties and assets of the Company and the
      Subsidiaries 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 and the Subsidiaries
      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 and the Subsidiaries;

     

    (v) comply
      with the capital expenditure plan of the Company and the Subsidiaries 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, and shall not permit the Subsidiaries to:

     

    (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 or any of the Subsidiaries;

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    (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 or any of the Subsidiaries, (B) materially
      increase the annual level of compensation payable or to become payable by the
      Company or any of the Subsidiaries to any of their respective 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 or any of the Subsidiaries is
      a
      party or involving a director or executive officer of the Company or any of
      the
      Subsidiaries, 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 or any of the Subsidiaries, 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 and the Subsidiaries (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 or any of the
      Subsidiaries;

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (ix) enter
      into any commitment for capital expenditures of the Company and the Subsidiaries
      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 or any of the Subsidiaries;

     

    (xi) permit
      the Company or any of the Subsidiaries 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).
       

     

    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. 

     

    
      
        
        

      

      
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    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 or
      any
      of the Subsidiaries 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, the Subsidiaries 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.

     

    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 or any of the Subsidiaries, 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 or any of the Subsidiaries 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.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (b) Sellers
      and the Company shall, and the Company shall cause its Subsidiaries to, 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.

     

    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 or its Subsidiaries 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,
      the
      Subsidiaries 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.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    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, and shall cause its Affiliates not to, 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 or any of the Subsidiaries (a
“Restricted
      Business”).

     

    (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 or the Subsidiaries 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 or any of the Subsidiaries
      (including any existing or former customer of the Company or the Subsidiaries
      and any Person that becomes a client or customer of the Company or any of the
      Subsidiaries after the Closing) or any other Person who has a material business
      relationship with the Company or any of the Subsidiaries, 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. 

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    6.15 Foreign
      Corruption Practice Act.
      Prior to
      Closing, Sellers and the Company shall, and shall cause their respective
      directors, officers, employees and Affiliates to, comply with the Foreign
      Corruption Practice Act, 15 U.S.C. §§ 78dd-1, et seq., and any other applicable
      anti-corruption rule or regulation (collectively “FCPA”).
      Sellers and the Company shall, and shall cause its Affiliates to, develop,
      enforce and maintain relevant policy and procedure to ensure a continuing
      compliance with the FCPA.

     

    6.16 Escrow
      Account.
      Sellers
      and the Company shall cooperate with Purchaser to release the Escrow Amount
      (a)
      to make the Advance Payment or (b) to an account designated by Purchaser after
      the payment of the Advance Payment, 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

     

    (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, and

     

    (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;

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    (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;

     

    (g) the
      Purchaser shall have received all the items as set forth in Exhibit
      C
      of this
      Agreement; 

     

    (h) Each
      of
      the Persons listed on Schedule
      7.1(h) shall
      have executed and delivered to Purchaser a non-competition and confidentiality
      agreement, in substantially the form attached hereto as Exhibit
      D
      (the
“Non-Competition
      and Confidentiality Agreement”);
      

     

    (i) 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,
      and

     

    (j) 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 100% of registered capital of Company and the Company is a
      wholly foreign owned company.

     

    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 ay 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.

     

    7.3 Necessary
      Approvals and Amended Business License.
      Prior
      to Closing, Sellers shall use their best efforts (and Purchaser shall reasonably
      cooperate with Sellers), including applying for any necessary extension, to
      ensure that all the obtained items of the approvals, permits or authorizations
      which are set out in Section
      3.2
      and
Section
      4.3
      (“Necessary
      Approvals”),
      will
      remain valid and effective. In the event that any of the conditions under or
      pursuant to Section
      7.1
      or
Section
      7.2
      cannot
      be satisfied, or would reasonably be expected not able to be satisfied, the
      Parties agree that: (i) if the application for the Amended Business License
      has
      not been filed with SAIC, such filing shall be deferred; (ii) if such
      application has been filed with SAIC, the Parties shall jointly apply to SAIC
      for a suspension of the issuance of the Amended Business License; and (iii)
      if
      the Amended Business License has been issued by SAIC, the Parties shall defer
      obtaining from SAIC the Amended Business License.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

     

    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;

     

    (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;

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    (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
      8.2(a)
      or
      related thereto for whatever causes. 

     

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

     

    (i) 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

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    (ii) 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. 

     

    (vii) 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 Indemnified
      Party 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. 

     

    (viii) 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. 

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    (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 of the Subsidiaries (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.

     

    (i) 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.

     

    (ii) 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)(iii),
      pay or
      cause to be paid all Taxes shown due thereon.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    (iii) 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)(ii),
      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)(iii)
      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)(iii).

     

    (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.

     

    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). 

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

     

    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. 

     

    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.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

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

     

    (c) Sellers
      shall return all of the Advance Payment to Buyer within 5 Business Days after
      the termination unless this Agreement is terminated pursuant to Section
      9.1(e)
      due to
      any misrepresentation or breach by Purchaser.

     

    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 HKIAC in accordance with the Arbitration Administration
      Procedures of HKIAC 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 HKIAC. Each arbitrator
      shall
      be impartial and independent of the Parties and shall have more than ten (10)
      years’ legal practice experience. The above third arbitrator shall not be a
      citizen of the PRC or Australia. The place of the arbitration shall be in Hong
      Kong. The arbitral proceedings shall be conducted in English and Chinese.
To
      the
      extent a translator is necessary during the arbitration, the Parties shall
      stipulate a neutral, official translator for the arbitration proceedings,
      acceptable to HKIAC. If the Parties are unable to agree on an official
      translator, then HKIAC shall appoint one.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    (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, that 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.

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    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.

     

    ________________________________

     

    ________________________________

     

    ________________________________

     

    AUSTRALIA
      AUSNUTRIA DAIRY PTY LTD

     

    ________________________________

     

    ________________________________

     

    ________________________________

     

    CHEN
      YUANRONG

     

    ________________________________

     

    ________________________________

     

    ________________________________

     

    If
      to the
      Company, to:

     

    AUSNUTRIA
      DAIRY (HUNAN) COMPANY LTD 

     

    _______________________________

     

    _______________________________

     

    _______________________________

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    

    If
      to
      Purchaser, to:

    

    MOVEUP
      LIMITED

    ___________________

    ___________________

    ___________________

    ___________________

    ___________________

    

     

    With
      a
      copy to:

     

    Weil,
      Gotshal & Manges LLP

    38/F
      Tower 2 Plaza 66

    1366
      Nanjing Road (W)

    Shanghai
      200040, P.R. China

    Facsimile:
      +86 21 3217 9511

    Attention:
      Mr. Steven Xiang

     

    A
      delivery between the mainland part of PRC (excluding Hong Kong, Macao and
      Taiwan) and Hong Kong shall be considered an international
      delivery.

     

    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. Each Party acknowledges that it has reviewed both
      language texts and that they are substantially the same in all material
      respects. In the event that there is any discrepancy between the Chinese and
      English versions, the arbitration panel as constituted pursuant to Section
      10.3(a)
      shall
      decide which version more accurately reflects the true intention of the Parties.
      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. 

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    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**

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    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:

               

              MOVEUP
                LIMITED

            
	 
 	 
 	 
 
	
            	By:  	/s/ Michael Tung
	 	
              

              Name:
                Michael Tung

            
	 	
              
                Title:
                  Director

              

            
	 	
               

            

    

    
      	 	 	 
	 	
              SELLERS:

            
	 	 
	 	
              HUNAN
                MULIN MODERN FOOD COMPANY LTD.

            
	 
 	 
 	 
 
	
            	By:  	/s/ Wu Xing Xing
	 	
              
Name:
              Wu Xing Xing
	 	
              Title:
                Chairman

            
	 	
               

            

    

    
      	 	 	 
	 	
              AUSTRALIA
                AUSNUTRIA DAIRY PTY LTD.

            
	 
 	 
 	 
 
	
            	By:  	/s/ Wu Yue Shi
	 	
              

              Name:
                Wu Yue Shi

            
	 	
              Title:
                Managing Director

            
	 	 

    

    
      	 	 	 
	 	
              CHEN
                YUANRONG 

               

              /s/
                Chen Yuanrong

              
                

              
CHEN YUANRONG
	
               

            

    

    
      	 	 	 
	 	
              COMPANY:

            
	 	 
	 	
              AUSNUTRIA
                DAIRY (HUNAN) COMPANY LTD.

            
	 
 	 
 	 
 
	
            	By:  	/s/ Yan Wei Bin
	 	
              

              Name:
                Yan Wei Bin

            
	 	
              
                Title:
                  Chairman

              

            
	 	
               

            

    

    
       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      1

     

    EQUITY
      INTERESTS

     

    
      	
              Sellers

            	 	
              Percentage

            	 	
              Certificates

            	 
	
              Hunan
                Mulin Modern Food Company, Ltd.

            	 	 	
              43

            	
              %

            	 	 	 
	
              Australia
                Ausnutria Dairy Pty Ltd.

            	 	 	
              25

            	
              %

            	 	 	 
	
              Chen
                Yuanrong

            	 	 	
              32

            	
              %

            	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    

    Payment
      Acknowledgement (Form)

    

    Pursuant
      to the Equity Transfer Agreement dated as of [•](the “Agreement”),
      by
      and among MOVEUP LIMITED (“Purchaser”),
      AUSNUTRIA DAIRY (HUNAN) COMPANY LTD. (the “Company”),
      HUNAN
      MULIN MODERN FOOD COMPANY, LTD.
      (the
“Domestic
      Shareholder”),
      AUSTRALIA
      AUSNUTRIA DAIRY Pty
      (the
“Foreign
      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 [RMB One Hundred And Fifty Million Five Hundred
      Thousand (RMB 150,500,000.00)] 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:
	 	
              Title:

            

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    Closing
      Certificate (Form)

    EXHIBIT
      B

    

    FORM
      OF SELLERS AND COMPANY CLOSING CERTIFICATE

     

    

    AUSNUTRIA
      DAIRY (HUNAN) COMPANY LTD.

    HUNAN
      MULIN MODERN FOOD COMPANY, LTD.

    AUSTRALIA
      AUSNUTRIA DAIRY PTY

    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) MOVEUP LIMITED (“Purchaser”),
      a
      company duly organized and existing under the laws of Samoa, (2) AUSNUTRIA
      DAIRY
      (HUNAN) COMPANY LTD., a Sino-foreign equity joint venture duly organized under
      the laws of the People’s Republic of China (“Company”),
      and
      (3) HUNAN MULIN MODERN FOOD COMPANY, LTD., a
      limited
      liability company organized
      and existing under the laws of the People’s
      Republic of China
      (the
“Domestic
      Shareholder”),
      AUSTRALIA
      AUSNUTRIA DAIRY Pty,
      a
      company organized and existing under the laws of Australia and (the
“Foreign
      Shareholder”)
      and
      Mr. CHEN YUANRONG (the
      “Management
      Shareholder”),
      a PRC
      Resident with PRC identification card number _____________ and address at
      _______________________________ (each of Domestic Shareholder, Foreign
      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 Purchase 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:

    Title:

    

    

    

    HUNAN
      MULIN MODERN FOOD COMPANY, LTD.

    By: 

    
      

    

    
    

    Name:

    Title:

    

    

    

    AUSTRALIA
      AUSNUTRIA DAIRY PTY

    By: 

    
      

    

    
    

    Name:

    Title:

    

    

    

    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 100% of the equity in the
                Company.

            

    

     

    
      	 	
              3.

            	
              The
                Amended Business License of the Company, evidencing that Purchaser
                owns
                100% of the equity in the Company.

            

    

     

    
      	 	
              4.

            	
              Certified
                Board resolutions of Domestic Shareholder, approving the transactions
                contemplated under the Equity Purchase
                Agreement.

            

    

     

    
      	 	
              5.

            	
              Certified
                Board resolutions of Foreign Shareholder, approving the transactions
                contemplated under the Equity Purchase
                Agreement.

            

    

     

    
      	 	
              6.

            	
              Certified
                unanimous Board resolutions of the Company, approving the transactions
                contemplated under the Equity Purchase
                Agreement.

            

    

     

    
      	 	
              7.

            	
              Payment
                Acknowledgment to be executed and delivered by each of Domestic
                Shareholder, Foreign Shareholder and Management
                Shareholder.

            

    

     

    
      	 	
              8.

            	
              Closing
                Certificate to be executed and delivered by each of Domestic Shareholder,
                Foreign Shareholder and Management
                Shareholder.

            

    

     

    
      	 	
              9.

            	
              Non-Compete
                and Confidentiality Agreement each of Domestic Shareholder, Foreign
                Shareholder and Management
                Shareholder.

            

    

     

    
      	 	
              10.

            	
              Trademark
                registrations showing all the Trademarks related to the names of
                the
                Company and names of the products of the Company are registered to
                be
                owned by the Company.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

    

    Form
      of Non-competition and Non-solicitation Agreement

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      3.3 (b) SELLERS’ DISCLOSURE OF THIRD PARTY’S CONSENT

    

    SCHEDULE
      3.5 LIST OF PENDING LEGAL PROCEEDINGS INITIATED AGAINST
      SELLERS

    

    SCHEDULE
      4.3 (b) COMPANY’S DISCLOSURE OF THIRD PARTY’S CONSENT

    

    SCHEDULE
      4.9 DISCLOSURE OF SPECIFIC DEVELOPMENT 

    

    SCHEDULE
      4.10 (d) DISCLOSURE OF APPLICABLE TAX AND TAX RETURNS FILED BY COMPANY

    

    SCHEDULE
      4.11(a) REAL PROPERTIES OWNED BY COMPANY 

    

    SCHEDULE
      4.12 (b) LEASE OF PERSONAL PROPERTY IN EXCESS OF RMB
      75,000

    

    SCHEDULE
      4.13 (a) LISTS OF INTELLECTUAL PROPERTY OF COMPANY 

    

    SCHEDULE
      4.13 (b) EXCEPTIONS TO COMPANY’S INTELLECTUAL PROPERTY
      RIGHTS

    

    SCHEDULE
      4.13 (c) INTELLECTUAL PROPERTY RIGHTS NOT SOLELY OWNED BY
      COMPANY

    

    SCHEDULE
      4.13 (d) INTELLECTUAL PROPERTY LICENSE

    

    SCHEDULE
      4.13 (e) ENCUMBRANCE TO INTELLECTUAL PROPERTY RIGHTS

    

    SCHEDULE
      4.13 (f) CONTRACTS CONCERNING INTELLECTUAL PROPERTY RIGHTS

    

    SCHEDULE
      4.13 (i) LIST OF SOFTWARE AND HARDWARE

    

    SCHEDULE
      4.13 (j) INTELLECTUAL PROPERTY LITIGATION

    

    SCHEDULE
      4.13 (k) PERSONS INFRINGING INTELLECTUAL PROPERTY 

    

    SCHEDULE
      4.14 (a) DISCLOSURE OF MATERIAL CONTRACTS

    

    SCHEDULE
      4.14 (b) TERMINATION, ACCELERATION OR MODIFICATION OF MATERIAL
      CONTRACTS

    

    SCHEDULE
      4.15 (a) EMPLOYEE’S BENEFIT PLAN

    

    SCHEDULE
      4.15 (j) EMPLOYEES LIST

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      4.16 (a) LABOR OR COLLECTIVE BARGAINING AGREEMENT

    

    SCHEDULE
      4.16 (b) LABOR ORGANIZATION REPRESENTING EMPLOYEES

    

    SCHEDULE
      4.17 LIST OF PENDING LEGAL PROCEEDINGS INITIATED AGAINST
      COMPANY

    

    SCHEDULE
      4.18 (a) DISCLOSURE OF INVESTIGATION INITIATED AGAINST COMPANY BY GOVERNMENTAL
      BODY

    

    SCHEDULE
      4.18 (b) LIST OF COMPANY PERMITS

    

    SCHEDULE
      4.19 (g) DISCLOSURE OF ENVIRONMENTAL HARZARDOUS MATERIALS

    

    SCHEDULE
      4.20 LIST OF INSURANCE POLICIES SUBSCRIBED BY COMPANY 

    

    SCHEDULE
      4.23 DISCLOSURE OF RELATED PARTY TRANSACTION

    

    SCHEDULE
      4.24 (a) LIST OF TEN (10) LARGEST VENDORS/CUSTOMERS AND SUPPLIERS OF
      COMPANY

    

    SCHEDULE
      4.26 LIST OF BANKS WHERE COMPANY HAVE ACCOUNT

    

    SCHEDULE
      5.3(b) PURCHASER’S
      DISCLOSURE OF ANY THIRD PARTY CONSENT

     

    SCHEDULE
      7.1(h) PERSONS TO SIGN NON-COMPETITION AND CONFIDENTIALITY
      AGREEMENT

     

    
      
        
        

      

      
        5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]