Joint Venture Agreement

JOINT VENTURE AGREEMENT
JILIN LIANLI (CBR) BREWING COMPANY LTD.


JOINT VENTURE AGREEMENT JILIN LIANLI (CBR) BREWING COMPANY LTD.


CHAPTER 1 : GENERAL


Clause 1 Whereas in accordance with the "Law of the People's Republic
of China for the Joint Ventures Enterprises with Chinese and
Foreign Investments", "Company Law of the People's Republic of
China" and other relevant legislations and regulations of
China, Jilin Province Juetai City Brewery, Jilin Province
Chuang Xiang Zhi Yie Ltd. and March International Group
Limited agree, on the basis of equality and procuring mutual
benefits, friendly co-operation and mutual development, to
sign this joint venture agreement to establish a joint
venture company designated as "Jilin Lianli (CBR) Brewing
Company Ltd." in Juetai City, Jilin Province of China.


CHAPTER 2 : INTERPRETATION


Clause 2 In this Agreement, unless the context otherwise requires, the
following terms and words have the interpretations as follow:


1. "Agreement" means this Joint Venture Agreement and
all its appendices.


2. "Joint Venture Company" means Jilin Lianli (CBR)
Brewing Company Ltd.


3. "Party A" means Jilin Province Juetai Brewery.
"Party B" means March International Group Limited.
"Party C" means Jilin Province Chuang Xiang Zhi Yie
Ltd.


4. "China" means the People's Republic of China ("PRC").


5. "PRC Laws" means all the central, provincial and
local laws, legislations, regulations, rules,
procedures, and judicial interpretation documents
(including transient and provisional), but excludes
all the internal documents which are not disclosed to
foreign investors.


6. "Board of Directors" means the Board of Directors of
the Joint Venture Company.


7. "Directors" means the members in the Board of
Directors as appointed by the Joint Venture Parties
in accordance with this Agreement.


8. "Articles of Association" means the articles of
association of the Joint Venture Company prepared in
accordance with the terms and


conditions specified in this Agreement, which is
signed by all the Joint Venture Parties, and is
approved by the relevant governmental authorities.


9. "Third Party" means any legal person or legal entity
in China other than the Joint Venture Parties.


10. "Joint Venture Law" means the Law of the People's
Republic of China for the Joint Venture Enterprises
with Chinese and Foreign Investments, and other
legislation and regulations applicable to
Sino-foreign joint venture enterprises.


11. "Company Law" means the Company Law of the People's
Republic of China.


12. "Joint Venture Period" means the period commencing
from the date of issuance of the business license of the
Joint Venture Company and terminating on the date as
specified in this Agreement and Articles of
Association in compliance with the PRC laws.


13. "Yuan" means the unit of currency denominated in this
Agreement. Unless otherwise indicated, the currency
means the Renminbi ("RMB").


14. "Foreign Currency" or "Foreign Exchange" means the
legal currency, as stipulated by the laws of that
foreign country, which can be freely exchanged and
transacted outside the vicinity of China.


Clause 3 The attached appendices are an integral and non-segregated
part of this Agreement, and possess the same legal efficacy
as this Agreement.


Appendix I : List of assets and liabilities transferred
from Party A to the Joint Venture Company,
and such list shall be signed by all
three Joint Venture Parties.


Appendix II : Land use right certificate, red-lined
diagram, and the property deeds.


Appendix III : The certificates issued by the relevant
governmental authorities certifying the
property ownership documents contained in
Appendix I and Appendix II.


Appendix IV : The trademarks registration certificates of
Party B, and the relevant identification
documents.


Appendix V : The documents in relation to the packaging line
transferred from Party B to the Joint Venture
Company.


Appendix VI : List of assets transferred from Party C to the
Joint Venture Company, and such list shall be
signed by all the three Joint Venture Parties.


CHAPTER 3 : PARTIES TO THE JOINT VENTURE


Clause 4 The parties of this Agreement are :


Party A :
Name : Jilin Province Juetai Brewery
Legal Address : Juetai City, Jilin Province, China
Legal Representative : Mr. Sun Chang Yuan


Party B :


Name : March International Group Limited
Legal Address : 23rd Floor, Hang Seng Causeway Bay
Building, 28
Yee Wo Street, Causeway Bay,
Hong Kong


Legal Representative : Mr. Chen Zi Shou


Party C :
Name : Jilin Province Chuang Xiang Zhi
Yie Ltd.
Legal Address : No. 50 Tong Zhi Street, Chang Chun
City, Jilin Province, China
Legal Representative : Mr. Li Wei


Clause 5 In accordance with Chapter 25 of this Agreement, all Parties
have the rights and responsibilities to inform the other
Parties in any change of the legal address or the legal
representative.


CHAPTER 4 : ESTABLISHMENT OF THE JOINT VENTURE COMPANY


Clause 6 All Parties have agreed to establish a Joint Venture Company
in China in accordance with the Joint Venture Law, the Company
Law and other PRC Laws. The Joint Venture Company will be
established as an independent legal person under the laws of
the PRC and will subject to the jurisdiction and protection of
the laws of China, as well as the associated rights and
benefits thereto.


Clause 7 Name of the Joint Venture Company:
Jilin Lianli (CBR) Brewing Company Ltd.


Legal address of the Joint Venture Company:
Juetai City, Jilin Province, China


Clause 8 All activities of the Joint Venture Company shall comply with
the legislations, regulations, orders and relevant rules
prevailing in the PRC.


Clause 9 The Joint Venture Company shall be a company with limited
liability. Parties to the Joint Venture Company shall assume
liability up to the limit of their respective capital
contributions. All Parties shall share the profit and loss and
undertake the risk according to the ratio of their capital
contribution towards the registered capital. The Joint Venture
Company shall use all its assets to undertake all the
liabilities of the Joint Venture Company.


Clause 10 Unless with written consent and agreement, all the
liabilities, responsibilities, and debts created in any forms,
for any reasons, and in any circumstances by an individual Joint
Venture Party shall be borne and undertaken by such Party.


CHAPTER 5 : OBJECTIVES, SCALE AND SCOPE OF BUSINESS


Clause 11 The objectives of the Joint Venture Parties in forming the
joint venture business are:


Basing on the wishes to strengthen economic cooperation and
technology exchange, by adopting advanced but practical
technique and scientific management method, by expanding the
synergy of joint venture advantage, to improve quality of the
products, to establish the production facilities up to 30,000
metric tons annual capacity, in order to actively explore the
domestic and international market, to continuously expand the
scale of operation, so as to increase the production capacity
to 200,000 metric tons in five years, and to procure
satisfactory economic benefits for all Parties.


Clause 12 The scope of business of the Joint Venture Company is:


The production, sale, research and development and other
technology consultation activities in relation to beer,
beverage and other auxiliary products.


CHAPTER 6 : TOTAL INVESTMENT, INVESTMENT RATIO AND REGISTERED CAPITAL


Clause 13 The total investment of the Joint Venture Company is RMB
25,000,000. Party A shall contribute RMB 10,000,000, which
amounts to 40% of the total registered capital of the Joint
Venture Company. Party B shall contribute RMB 12,750,000,
which amounts to 51% of the total registered capital of the
Joint Venture Company. Party C shall contribute RMB 2,250,000,
which amounts to 9% of the total registered capital of the
Joint Venture Company.


Clause 14 The registered capital of the Joint Venture Company is RMB
25,000,000.


Clause 15 Party A shall contribute its existing net assets to the Joint
Venture Company as its capital contribution.


Clause 16 Party A hereby guarantees that, in pursuant to Clause 15 of
this Agreement, all the assets injected by Party A which
represents its capital contribution to the


Joint Venture Company are legally owned by Party A itself, and
all these assets do not bear or attach with any guarantees,
charges or collateral of debts. In case of any Party
subsequently claiming right or ownership of those assets
injected by Party A to the Joint Venture Company, all such
responsibilities shall be borne by Party A. The values of the
relevant assets will be deducted from the total capital
contribution by Party A. Party A shall then deduce other means
to pay up its capital contribution to the Joint Venture
Company.


Clause 17 Party B shall use its US "CBR" brandname (Chinese name:
"Lianli"), one bottle packaging line for beer with the
annual capacity of not less than 30,000 metric tons, and the
relevant brewing technology, craftsmanship, formula, and yeast
as its capital contribution to the Joint Venture Company. The
value of the aforesaid assets is valued at RMB 12,750,000.


Clause 18 Party C shall inject the assets and the distribution
networks of its Shengyang sales office, Cheungchun sales
office, Jilin sales office and Haribun sales office into the
Joint Venture Company. The value of the aforesaid assets is
valued at RMB 2,250,000.


Clause 19 Other capital required by the Joint Venture Company besides
the registered capital shall be resolved by the Joint Venture
Company through loan financing.


Clause 20 The assets injected by all the Joint Venture Parties shall be
completed within 90 days after the effective date of this
Agreement.


Clause 21 The registered capital of the Joint Venture Company cannot be
reduced at any time during the Joint Venture Period.


Clause 22 The Parties cannot withdraw their contributed capital at
any time during the Joint Venture Period.


Clause 23 If the registered capital is increased during the Joint
Venture Period, it shall be approved and adopted by the Board
of Directors and all relevant registration procedures shall be
completed.


CHAPTER 7 : TRANSFERENCE OF EQUITY AND ASSETS OF THE JOINT VENTURE COMPANY,
CHARGES, GUARANTEES, LENDING AND BORROWING FROM OUTSIDE PARTIES,
INVESTMENTS AND LOANS


Clause 24 After the establishment of the Joint Venture Company, if any
Party intends to transfer its portion of capital contributions
or equity, notwithstanding partially or entirely, such Party
shall report in written form to the Board of Directors as well
as communicate to the other Parties. Under the same
conditions, the other Parties have the preemptive right to
acquire such share or equity interest. Unless all the
Parties to the Joint Venture Company forfeit the rights


of acquisition, the solicitor cannot transfer its equity
interest to other third parties.


After the counter-parties receive the written notice, they
must reply to the soliciting party within 30 days explicitly
stating whether they will acquire the equity interest. If
no reply is received within 30 days, it is assumed that the
counter-parties will not acquire the relevant equity interest.


All the activities in connection with the transference of
equity and assets of the Joint Venture Company, executing
charges against the assets of the Joint Venture Company,
making guarantees in the name of the Joint Venture Company,
lending and borrowing from outside parties, making investments
and obtaining loans, shall be agreed and approved by the Board
of Directors. If the representatives from any Parties
execute the aforesaid activities without the authorization
from the Board of Directors, the ultimate liability and
responsibility shall be borne by that Party.


CHAPTER 8 : RESPONSIBILITIES OF THE PARTIES TO THE JOINT VENTURE


Clause 25 All Joint Venture Parties shall accomplish their respective
responsibilities as follows:


Responsibilities of Party A:


1. To be responsible for obtaining approvals, permits,
business registrations, business licenses for
establishing and operating the Joint Venture Company
from relevant governmental authorities in China. The
related expenses will be paid by the Joint Venture
Company.


2. To be responsible for negotiating with the relevant
governmental authorities in order to enable the Joint
Venture Company to obtain all the privileges as
granted by law.


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