Legal Due Diligence Report

Legal Due Diligence Report
Legal Due Diligence Report

[ ] CO., LTD

Proposed RTO and Financing on Over the Counter Bulletin Board

Legal Due Diligence Report

[], [] Province,

From:

Date: [ ], 2007

Re: Legal Due Diligence Report of [] XX Ltd

Dear Sirs

We have been instructed as solicitors to[ ](the “Company”).

We present our legal due diligence report on the Company in connection with the proposed RTO of the Company’s offshore holding company with an OTCBB shell company and financing (the “Project”).

This Legal Due Diligence Report (this “Report”) is presented on the following bases:

1. The information contained in this Report is primarily based on:

(i) information and documentation supplied by the Company in response to the information

sought in the due diligence questionnaire and our further requests for supplemental information and documentation;

(ii) discussions with the directors, management and staff of the Company;

(iii) a search of the public records of the Company available for inspection at relevant PRC authorities in charge of administration for industry and commerce1;

2. In reviewing the documentation supplied to, or obtained by, us we have assumed that:

(i) all copies made from original documents are true and complete and that such original

documents are authentic and complete;

(ii) all documents supplied to, or obtained by, us as originals are authentic and complete;

(iii) all signatures appearing on documents supplied to, or obtained by, us as originals or copies of originals are genuine;

(iv) the Company has the requisite corporate power to enter into all contractual arrangements to which it is a party and to perform its obligations thereunder;

1 Such public records were provided to us by the Company.

(v) all contractual documents have been duly authorised, executed and delivered by the parties thereto and constitute legally enforceable obligations of the parties under the laws of relevant jurisdictions;

(vi) the Company has not passed a voluntary winding up resolution and that no petition has been presented to or order made by any court for the winding up or administration of the Company and that no receiver has been appointed in relation to the Company or any of its assets or revenue;

(vii)the Company has drawn to our attention all matters relevant to our information requests.

3. This Report is subject to the following qualifications:

(i) we have not attempted independently to verify the authenticity and completeness of any

original documents by contacting third parties;

(ii)this Report does not of itself constitute a verification exercise;

(iii) we are qualified to practice law only in the People’s Republic of China and we express no opinion as to any other laws;

(iv) we have not investigated and have not attempted to comment on the commercial, financial ,technical or accounting implications of documents which have been supplied to, or obtained by, us or make any assessment of the current financial condition of the Company;

(v) we have not investigated and make no comment on the adequacy of the Company’s insurance cover;

(vi) this Report is by its nature a factual analysis and a legal review of the information supplied to us and should not be regarded as, or relied upon as being, a comprehensive or formal legal opinion concerning any matter referred to in it;

(vii) we accept no responsibility whatsoever to update this Report for events or circumstances occurring after the date of this Report and cannot accept responsibility for information supplied to us by, or obtained by us from, third parties which may have become out of date at the date of this Report;

(viii) this Report is not to be construed as advice on whether or not to proceed with the Project.

Instead, regard should be had to a variety of other factors, commercial, financial, technical, accounting and otherwise, which come or should come, to the notice of the addressees of this Report by means other than legal due diligence;

(ix) there can be no assurance that the information supplied to, or obtained by, us is complete or accurate in all respects or that there is no material information in relation to the Company of which we have not been made aware.

The addressees of this Report should be aware that circumstances such as laws which are applicable in an insolvency, receivership, administration or creditors rights generally may affect the enforceability, performance or validity of agreements summarised in this Report.

This Report makes fair disclosure of the legal matters which are referred to in it. However, we accept no responsibility whatsoever for any inaccuracy or incompleteness in this Report to the extent that any inaccuracy or incompleteness of the information and/or documentation on which we report would not

be apparent from a careful and thorough appraisal of such information and documentation as it has been supplied to, or obtained by, us and reviewed and after appropriate enquiry arising therefrom. This Report is limited to the effect of the laws of the People’s Republic of China as they, and the facts bearing upon this Report, existed on the date of this Report. We expressly disclaim any obligation or undertaking to update or modify this Report as a consequence of any future changes in such laws or in any facts bearing upon this Report. Additionally, we have not investigated, and we do not express or imply any view or opinion on, or in respect of, the laws of any country other than the PRC, and we have assumed that no such other laws would affect the contents contained in this Report.

This Report is addressed solely to you for your benefit and for the purpose of the Placing and Project. It should not be shown, communicated or disclosed to any other person nor relied upon by any other person or for any other purpose. It must not be quoted or referred to in any public document or filed with any person without our prior express written consent.

Yours faithfully

Global Law Office

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