10-12G

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934

CHINA GOLDEN DRAGON TRAVEL GROUP
(Exact name of small business issuer as specified in its charter)

Nevada	26-3552176
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5F Wan Zhao Kemao Building, Fu’an Street,
Heping District, Tianjin
People’s Republic of China  300021
(Address of Principal Executive Offices; Zip Code)
Registrant’s Telephone Number, Including Area Code:	0086-22-2306.8001

Securities to be registered under Section 12(b) of the Act:  

Title of each class to be so registered
None Name of each exchange on which each class is to be registered  
None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value 0.001

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definition for “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):   

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller Reporting Company	Q

TABLE OF CONTENTS

BUSINESS	2
RISK FACTORS	11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
PROPERTIES	29
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	30
DIRECTORS AND EXECUTIVE OFFICERS	32
EXECUTIVE COMPENSATION	33
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	35
LEGAL PROCEEDINGS	37
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	38
RECENT SALES OF UNREGISTERED SECURITIES	38
DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED	39
INDEMNIFICATION OF DIRECTORS AND OFFICERS	40
FINANCIAL STATEMENTS	41
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	41
FINANCIAL STATEMENTS AND EXHIBITS	41

FORWARD-LOOKING STATEMENTS

This registration statement contains forward-looking statements.  The forward-looking statements are contained principally in the sections entitled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements.  These risks and uncertainties include, but are not limited to, the factors described in the section captioned “Risk Factors” below.  In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could, ” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements.  Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties.  Given these uncertainties, you should not place undue reliance on these forward-looking statements.  These forward-looking statements include, among other things, statements relating to:

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general economic conditions;

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our expectations regarding our ability to maintain and grow our business;

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our expectations regarding the continued growth of the market for travel and leisure services;

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our beliefs regarding the competitiveness of our Company;

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our expectations with respect to increased revenue growth and our ability to achieve increased profitability;

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our future business development, results of operations and financial condition; and

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competition from other companies in the travel and leisure industry.

Also, forward-looking statements represent our estimates and assumptions only as of the date of this registration statement.  You should read this registration statement and the documents that we reference in this registration statement, or that we filed as exhibits herewith, completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

USE OF CERTAIN DEFINED TERMS

In this registration statement, unless indicated otherwise, references to

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“ChuanRui Travel” refers to Beijing Rong ChuanRui Travel Consulting Co., LTD, a wholly foreign owned PRC company

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“Golden Dragon,” the “Company,” “we,” “us,” or “our,” are references to the combined business of China Golden Dragon Travel Group, a Nevada corporation, and its wholly owned subsidiary, Touchstone; Touchstone’s wholly owned subsidiary, Wellcare; Wellcare’s wholly owned subsidiary, ChuanRui Travel; ChuanRui Travel’s wholly owned subsidiary, Nanjing Qianjiu; Nanjing Qianjiu’s wholly owned subsidiary, Tianjin Longhai Longjia; Tianjin Longhai Longjia’s wholly owned subsidiary, Sky Travel; and Sky Travel’s wholly owned subsidiaries, Tianjin Golden Dragon and Nanjing Feiyu; but do not include the stockholders of Golden Dragon;

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“Nanjing Feiyu” refers to Nanjing Feiyu Travel Service Co., Ltd,; a PRC limited company;

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“Nanjing Qianjiu” refers to Nanjing Qianjiu Enterprise Management and Consulting Co., Ltd, a PRC limited company;

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“PRC” or “China” refers to the People’s Republic of China; and “RMB” refers to the Renminbi, the legal currency of China;

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“Securities Act” are to the Securities Act of 1933, as amended, and “Exchange Act” are to the Securities Exchange Act of 1934, as amended;

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“Sky Travel” refers to Tianjin Golden Dragon Sky Travel Co., Ltd, a PRC corporation

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“Tianjin Longhai Longjia” refers to Tianjin Longhai Longjia Enterprise Management and Consulting Co., Ltd, a PRC limited company;

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“Touchstone” refers to Touchstone Industry Group Limited, a British Virgin Islands limited company;

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“Tianjin Golden Dragon” refers to Tianjin Golden Dragon Int’l Travel Service Co., Ltd, a PRC limited company;

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“U.S. or the “United States” refers to the United States of America; and “U.S. dollars,” “dollars,” “USD” and “$” refer to the legal currency of the United States; and

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“Wellcare” refers to Wellcare International LTD, a Hong Kong limited company.

In this registration statement we are relying on and we refer to information and statistics regarding the travel and leisure industry that we have obtained from various sited public sources.  Any such information is publicly available for free and has not been specifically prepared for us for use or incorporation in this registration statement or otherwise.

BUSINESS

Overview of Our Business

The Company is a holding company that operates primarily through its PRC subsidiaries, Tianjin Golden Dragon and Nanjing Feiyu. Through our subsidiaries, we are engaged in the business of Chinese domestic and international tour packaging. We plan and organize conferences, events and tours for large groups in the various districts of Tianjin and Nanjing, and offer several specialized package tours to areas such as Hunan, Changsha, Shaoshan, Kunming, Dali and Lijiang, We also offer tour packages for holidays and special events and have garnered nationwide recognition for our unique tourist products, such as our signature Olympics Tour package, in support of the 2008 games, our Wedding Tours to celebrate honeymoons, and our branded Parents’ Tour, designed for families to travel together. We were the first PRC company to offer honeymoon tours in China and our Parent Tour has served more than 100,000 people since its introduction in 2003. As part of our corporate tourism package, we also offer local transportation on our fleet of 65 buses.

Our international corporate customers include Motorola, Panasonic and Butler, and our domestic customers include the Tianjin Municipal Government, the Tianjin Tonight Newspaper, and the local branches of The People’s Insurance Company (Group) of China, the Bank of China, Shanghai Pudong Development Bank and China Mobile. In addition, our subsidiary Tianjin Golden Dragon is the exclusive agent in Tianjin for Hong Kong Disneyland, which brings approximately 20,000 visitors annually, and for the Bright Star Cruise Line, which accounts for more than 5,000 tourists annually.   

During 2007, we served more than 690,000 tourists and we were ranked twenty-ninth in revenues in the Chinese travel industry by China National Tourism Administration, CNTA.  The CNTA has also recognized us among the Top 100 Enterprises for eight consecutive years.

Our Corporate History and Structure

The Company was organized under the laws of the State of Arizona, in 2004, as VT Video Services, Inc., a wholly owned subsidiary of Visitalk Capital Corporation, ("VCC"), which in turn was a wholly owned subsidiary of Visitalk.com, ("Visitalk"), as part of the implementation of Visitalk’s Chapter 11 reorganization plan and as such, we were a shell company with no assets or operations. VCC was authorized by the Visitalk plan as the reorganized debtor. On July 28, 2008, we completed a reincorporation merger into Bay Peak 2 Acquisition Corp., a Nevada corporation ("Bay Peak"). In connection with the reincorporation merger, we changed our name from VT Financial Services, Inc. to BayPeak. On January 14, 2009, we changed our name again to China Golden Dragon Travel Group, in connection with our reverse merger acquisition of Touchstone. As a result of the reverse acquisition transaction, we now conduct our operations in the PRC through our wholly owned PRC subsidiaries, Tianjin Golden Dragon and Nanjing Feiyu.

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The following chart reflects our organizational structure as of the date of this registration statement.

Our corporate headquarters are located at 5F Wan Zhao Kemao Building, Fu’an Street, Heping District, Tianjin, China, Zip Code: 300021. Our telephone number is +86-22-2306.8001. We maintain a website at  that contains information about our company, but that information is not a part of this registration statement.

Settlement and Stock Split

On July 28, 2008, we issued and sold 39,190,574 shares of our common stock to Bay Peak LLC, for a total purchase price of $47,812.50, pursuant to the terms of a stock purchase agreement. On that date, we also changed our domicile to Nevada, effected a 1-for-7 stock split, and changed our name from VT Financials Services, Inc. to BayPeak, each of which was a closing condition of the stock purchase agreement. On August 29, 2008, we entered into a settlement and release agreement with VCC, pursuant to which, we agreed to issue 2,000,000 shares of our common stock to VCC, prior to giving effect to the split, and to pay VCC $50,000, in exchange for VCC’s forgiveness of certain liabilities held by them. Each party also released the other of all claims arising from or related to the facts stated in the settlement agreement, other than rights and obligations arising out of the remaining agreements. On July 28, 2008, we also entered into a shareholders’ rights agreement with VCC, Bay Peak and The Aviary, LLC, pursuant to which we agreed not to enter into certain material transactions without the approval of the shareholders party to the agreement and they agreed to a lockup of their shares.

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Earn-in Agreement

On January 14, 2009, our principal shareholder, LiQiang Song, entered into an earn-in agreement with Xuetian Yuan and Jinwei Chen, our Chief Executive Officer and Chief Operating Officer, respectively, and the founders of our PRC operating subsidiaries, or the Founders, pursuant to which, upon the satisfaction of certain conditions, the Founders have the option to purchase up to an aggregate of 74,107,658 shares of our common stock owned by Mr. Song, at a purchase price of $0.001 per share (the par value of our common stock); except that with respect to the shares eligible to be purchased relating to the satisfaction of condition (4), the purchase price is $0.001 per share, multiplied by the number of such shares, plus $1,000. Under the terms of the earn-in agreement, the Founders will have the right to purchase the shares as follows: (1) 25% of the shares within six months after the execution of the Share Exchange Agreement, provided that on or before that date, we have entered into a binding employment agreement with the Founders and the Founders are employed by us pursuant to that agreement on such date; (2) 25% of the shares after this registration statement on Form 10 has become effective; (3) 25% of the shares if we achieve not less than $5,400,000 in after-tax net income, as determined under United States generally accepted accounting principles, or US GAAP, for the year ended December 31, 2009; and (4) 25% of the shares if we achieve not less than $9,000,000 in pre-tax profits, as determined under US GAAP for the fiscal year ended December 31, 2009. For purposes of determining whether or not the financial thresholds described above have been achieved, the purchase of the shares by the Founders or any other person designated by the Founders will not be deemed to be an expense charge, or other deduction from our revenues for these computations onlyeven though US GAAP may require contrary treatment. Each Founder may purchase 25% of the total number of shares that he or she is eligible to purchase under the earn-in agreement upon the satisfaction of each condition described above. If the Founders purchase all 74,107,658 shares eligible for purchase under the earn-in agreement, the Founders will become our controlling shareholders.

Reverse Acquisition

On December 24, 2008, we completed a reverse acquisition transaction through a share exchange with Touchstone, whereby we issued to the shareholders of Touchstone, 101,101,853 shares of our common stock, par value $0.001, in exchange for all the issued and outstanding capital stock of Touchstone. Touchstone thereby became our wholly owned subsidiary and its subsidiaries, Wellcare, ChuanRui Travel, Nanjing Qianjiu, Tianjin Longhai Longjia, Sky Travel, Tianjin Golden Dragon and Nanjing Feiyu, became our indirect subsidiaries. As a result of the reverse acquisition transaction, on December 24, 2008, Cory Roberts resigned from all corporate offices and from our board of directors, and Xuetian Yuan, Jinwei Chen and Wang Lu were appointed Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, respectively. On same day, our board of directors appointed Xuetian Yuan, Jinwei Chen and Chen Feiyu to serve as members on the board of directors, with Xuetian Yuan serving as Chairman.

As a condition to the closing of the reverse acquisition, we filed a certificate of amendment to our articles of incorporation with the Nevada Secretary of State on January 14, 2009, to change our name from Bay Peak 2 Acquisition Corp. to China Golden Dragon Travel Group.  

Our BVI subsidiary, Touchstone, is a holding company and has no operations of its own. It was formed in January 2008, solely for the purpose of acquiring Wellcare, our Hong Kong subsidiary, which in turn was formed in February 2008, as a holding company for our PRC operating subsidiaries, Chuanrui Travel, Nanjing Qianjiu, Tianjin Longhai Longjia, Sky Travel, Tianjin Golden Dragon and Nanjing Feiyu.  Chuanrui Travel was formed in June 2008, under the laws of the PRC, with RMB100,000 in registered capital, for the purpose of providing consulting services in connection with international travel and tourism. Chuanrui Travel acquired 100% of the equity interest of Nanjing Qianjiu in August 2008.  Nanjing Qianjiu was incorporated on July 1, 2008 under the laws of the PRC, with RMB100,000 in registered capital, for the purpose of providing consulting services related to enterprise management, marketing, planning and investment.  Nanjing Qianjiu acquired 100% of the equity interest of Tianjin Longhai Longjia on July 9, 2008.  Tianjin Longhai Longjia was incorporated on July 3, 2008 under the laws of the PRC, with RMB100,000 in registered capital, for the purpose of providing consulting services related to enterprise management, marketing, planning and investment and conferences. Tianjin Longhai Longjia acquired 100% of the equity interest of Sky Travel on July 9, 2008.  Sky Travel was incorporated on January 17, 2001, under the laws of the PRC, with RMB300,000 in registered capital, for the purpose of providing consulting services related to domestic tourism, conference services and general retail merchandising.  Sky Travel owns a 70% majority interest in Tianjin Golden Dragon and a 30% minority interest in Nanjing Feiyu.  Tianjin Golden Dragon was incorporated on May 8, 1995, for the purpose of providing consulting services related to domestic and international tourism, ticketing, conferences, charters and wholesale and retail merchandising, and Nanjing Feiyu was incorporated on August 14, 2003, for the purpose of providing consulting services related to domestic tourism and travel, ticketing, conferences and retail merchandising.

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Travel and Tourism Industry

The travel and tourism industry in China has greatly expanded over the last few decades and the UN World Travel Organization, or UNWTO, has deemed China to be the fastest growing travel market in the world.  The emergence of a newly rich middle class and an easing of restrictions on movement by the Chinese authorities are both fueling this travel boom.  Travel within China has become easier in recent years with the lifting of travel controls, massive investment in transportation facilities such as roads, railways and airlines, and the rapid rise in incomes. The number of domestic tourists increased from 695 million in 1998 to 878 million in 2002, boosting domestic tourism receipts from Rmb239.1 billion (US$28.9 billion) to Rmb387.8 billion (US$46.9 billion).

According to statistics of CNTA, tourism industry in China had a fast growth in 2007, 131million foreign tourists visited China in 2007, which generated 41.9billion USD in revenue, this represented 5.5% and 23.5% growth from the previous year, respectively. Domestic tourists account for over one billion people, approximately, with an income of 112billion USD. Furthermore, 41million Chinese tourists traveled abroad, an increase of 18.6% from 2006. And total income for China’s tourism industry reached 158.7billion USD, with an increase of 22.6% from last year. By the end of 2007, the latest statistic shows 19,657 registered travel agencies exist in China represent annual growth of 9.6%.

Domestic Tourism

Because of  China’s fast economic development and the improvement of living standards in recent years, domestic tourism has become an engine and the pillar industry of Chinese economic growth.  According to CNTA statistics, from January to November 2008, there were 39,970,340 domestic tourists received in major cities of China, representing a year on year increase of 13.37%.

CNTA estimates that, in the next 10 years, domestic tourism will maintain an annual growth rate of 10.4%, that  personal tourism consumption will grow at annual average rate of 9.8%, and that enterprise and government travel  will grow at an annual average rage of 10.9%.

Inbound Tourism

According to Factbox, China is the world’s fourth largest country for inbound tourism. According to the UNWTO, China has become a major tourist destination, with the number of international foreign tourists growing from 230,000 in 1978, to approximately, 49.6 million in 2006, making it the fourth most visited country in the world.  While there are gaps between the massive luxury hotels in the big cities and the more limited facilities elsewhere, hotel building continues apace.  The number of tourist hotels shot up from 5,782 in 1998, to 8,880 by 2002.  By 2003 China had some 9,751 tourist hotels and a burgeoning hospitality industry, much of which is developed through joint ventures with foreign partners.  The recent 2008 Summer Olympics is expected to result in a rapid increase in inbound tourism in the next few years, and the coming 2010 Expo Ga mes in Shanghai is expected to contribute to this trend.

According to Factbox, there were approximately 55 million inbound tourists in 2007 contributing a whopping $41.9 billion U.S. dollars to the Chinese travel industry. The number of domestic tourists totaled over one billion, approximately with a total income of RMB777.1 billion.

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Outbound Tourism

China is rapidly becoming one of the most important outbound tourism markets in the world and is currently the largest travel market in Asia.  Rising middle class incomes and a pent-up demand to see the rest of the world will make China one of the most significant outbound tourism markets in the coming decade.  Controls on foreign travel are being gradually eased.  Rising disposable incomes and constant exposure to foreign countries on television have also contributed to a surge in outward tourism.  The UNWTO estimates that China will become the largest tourist country and the fourth largest for overseas travel by 2020, with an expected 100 million international travelers.  In terms of total outbound travel spending, China is currently ranked fifth and is expected to be the fastest growing in the world from 2006 to 2015, jumping into the number tw o slot for total travel spending by 2015.  According to the China National Tourism Administration, or CNTA, China’s outbound travelers reached 40.95 million in 2007, an 18.6% increase over the previous year.

One indication of this is the increase in the number of travel agencies, from 6,222 in 1998, to 11,552 in 2002, which has accompanied a rise in the number of Chinese tourists going abroad from 3.2 million to 10.1 million in the same period. The proportion of Chinese going abroad for “private purposes” rose steadily during that time from 38.1% to 60.8%. Almost all the growth in travel agencies has so far been in Chinese-owned agencies, which increased from 4,910 to 10,203, while international travel agencies in China have remained at just over 1,300.

Mainland Chinese are currently able to take organized leisure tours to over 130 countries and regions that have a bilateral agreement with China, often referred to as Approved Destination Status, or ADS, agreements, and until December 2007, the United States was not on the ADS list.  On December 11, 2007, the U.S. and China signed a memorandum of understanding, or MOU, to facilitate Chinese group leisure travel from China to the United States and opens up the market for U.S. companies.  U.S. destinations can now market themselves in China, and the agreement also provides the necessary framework to permit group leisure travel from China to the United States.  In 2007, China ranked as the 16th largest international market for the United States, with 397,405 Chinese visitors to the U.S. spending a record $2.56 billion, or over $6,000 per person.  The U.S. Department of Commerce expects the number of Chinese visitors to the U.S. to reach approximately 579,000 by 2011.

Our Products and Services

We organize package tours in Tianjin and Nanjing, our business mainly contains two aspects, one is package tour (package tour is a form of product bundling); we operate the tour package ourselves but also sell it to other independent travel agencies after organizing tour groups, another business form is tourism related services.

Package Tours:  Our package tour operations are comprised of domestic and outbound travel services. Domestic package tours can be divided into long-distance (travelling by airplane or train) and short-distance package tours (travelling by bus). Destinations of our long-distance package tours include the tour packages to Guangdong, Sichuan, Yunnan, Shandong, Hunan provinces. The destinations of our short-distance package tours include the tours to Beijing, Shanghai, Hangzhou and Tanshang. Domestic tours depart either from Tianjin or from Nanjing. We design and organize our long-distance tour packages and then sell the packages to our partner travel agencies which are responsible for tour package implementation. We design, organize and implement our short-distance tours. Domestic tour is our primary business, representing approximately 75% of our annual revenue. < /P>

The main destinations of our international tour packages are: East-Asia (South-Korea, Japan, Hong Kong and Macao), Western Europe (France, Italy), Australia, New Zealand and African countries. Tour packages to Asian countries represent more than half of the revenues of the outbound tour operations.

Tourism Related Services: There are two operations in our tourism related service business, bus leasing and ticket booking services. We currently own 65 buses available for our package tour business. When a bus is not scheduled for a package tour operation, primarily during low seasons, we lease the bus to other travel agencies or large enterprises to serve their commuter needs. Our ticket booking service is a relatively small part of our business (less than a 1% contribution to annual revenue). We are the exclusive agent of Hong Kong Disneyland tickets in Tianjin, all travelers using a travel agency and planning a visit to Hong Kong Disneyland can only purchase their Disneyland tickets from us. We also sell other tickets including airline and cruise ship tickets.

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We also offer theme tour packages for holidays and special events and have garnered nationwide recognition for our unique tourist products, such as our signature 2008 Beijing Olympics Tour package, our Honey Tours on cruise ships, and our branded Parents' Tour, designed for families to travel together. Our Parent Tour, in particular has served more than 100,000 people since its introduction and we were one of the first PRC companies to offer honeymoon tours in China.

Our Growth Strategy

We are committed to enhancing profitability and cash flows through the following strategies:

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Development of Charter Flights.  We plan to offer charter flights to more destinations in China.  In October 2008 we began to offer charter flights to 14 domestic destinations in Yunnan, Xinjiang, Dalian, Sichuan, Shandong, Hunan, Guangxi, Hainan.  We expect that by chartering our flights we will effectively lower the cost of our long-distance tour packages. Moreover, we are currently negotiating with the Civil Aviation Administration of China, or CAAC, to obtain permission to share its tickets-info terminal in 2009 for the sale of excess tickets to the public, as well as to our own package-tour customers, which we expect to result in additional revenues.

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Mergers and Acquisitions.  We plan to grow organically as well as through mergers and acquisitions.  In September 2008 we opened a new office in Beijing, to facilitate our local tour packages in the area in the wake of the 2008 Olympic Games.  We also plan to merge with, or acquire mid-sized travel agencies in provinces such as Shandong, Liaoning, Hainan, Yunnan, Guangxi and Sichuan, for the purpose of local tour implementation and programming. We expect that the increased size in the number of outlets and geographic services area will allow for increased brand promotion and will benefit our margins by reducing the cost of long-distance tour-packages.

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Increased Sales Network:  Our strategic plans call for seventy new sales outlets to be established in Beijing, Tianjin and Hebei by the end of 2010.  The new sales outlets will primarily focus on package-tour customer collections.

Marketing

Our marketing efforts are focused on the economically developed areas of Tianjin and Nanjing. Our target customers are the middle-aged and elderly travelers. We concentrate our business operations in Tianjin and Nanjing, and extend our services to the adjacent cities. The majority of our customers are from Nanjing and Tianjin; these two cities and the surrounding areas have a combined population around 45-50 million.

We target senior citizens who have more time for travel and leisure.  China has an aging population, with the elderly making up 15% of the population, or approximately 210 million people.  As the quality of life improves for the average Chinese citizen, the middle-aged and elderly population is also seeking a better standard of living, which includes increasing their travel and leisure time. In addition, this target set is not only more likely to be loyal but they are also more likely to promote our package tourism business by word of mouth.

There is typically an increase in Olympic related tourism for several years for the city that hosted an Olympic Games. We have experienced fast growth in tourism related to the 2008 Beijing Olympic Games.  Our one-day tour to Beijing from Tianjin has become extremely popular; in the two months after the closing of Olympic Games in September, we organized more than 110,000 tourists to Beijing from Tianjin to visit Olympic venues.

With the 2007 MOU between the U.S. and China, discussed elsewhere in this registration statement, there are now over 130 outbound tourism destinations opened to China. We plan to add an African tour and several new routes in Asia.

Our Major Customers

We earn revenues through the sale of our products and services to customers in China who travel throughout China and abroad.  During fiscal years 2007 and 2006, our five largest customers were Heilongjiang CITS, Sichuan CITS, Beijing Beilu Holiday, Changchun Tianyi Travel Service and Tianjin Huadong Holiday.   These customers combined accounted for approximately $ 5million, or 24.42% of our total sales revenue in 2007, and $3 million, or 17.76% of our total sales revenue in 2006.  Our largest customer, Heilongjiang CITS, accounted for approximately 6.19% and 4.67% of our total revenues for the years ended December 31, 2007 and 2006, respectively.

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The following table shows our largest customers in 2007, ranked in order of percentage of revenues.

Rank	Customer Name	Percentage of Revenue
1	Heilongjiang CITS	6.19%
2	Sichuan CITS	6.06%
3	Beijing Beilu Holiday	4.74%
4	Changchun Tianyi Travel Service	4.42%
5	Tianjin Huadong Holiday	3.01%

Our Competition

Due to the nature of the business, our competitors are mostly local travel agencies. Our main competitors are Tianjin Classic Holiday Travel Agency, Kanghui Travel Agency, Tianjin Youth Travel Agency and Daya CTS. Tianjin Classic Holiday Travel Agency is our major competitor. We both focus on Tianjin-based retail customers, we are dealing with the same primary business and focusing on the same customer group, the difference is that we have some different theme tours. We have a total of 23 offices and Tianjin Classic Holiday Travel Agency has 12. The other three travel agencies mainly market their service to institutions, such as government and corporations. Retail customers generate very little revenue for their revenue.

Moreover, the MOU between the U.S. and China, not only facilitated Chinese group leisure travel from China to the United States, but it also opened up the PRC travel and tourism market to U.S. competitors.  Many of our current and future competitors are better established than we are and may be more widely known to consumers, have larger infrastructures and greater capital resources.  

We believe that we have the following competitive strengths in our industry that allow us to compete effectively:  

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Brand Market Differentiation. With twelve years in the tourism business, we have established a large group of loyal customers, especially in north and north-east China. In Tianjin, we established a tourists’ club for loyal customers, which has grown to approximately 20,000 members.

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Lower Cost. Because of our volume of tourists, we are able to provide a favorable price to our customers for flights, accommodation and ground transportation.  Moreover, since we own our own tour buses, we are able to offer our customers lower prices on leased transportation during the off season and on guided tours during the peak season.

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Experienced Management Team.  Our management team has significant experience in the travel and tourism industries.  Our President and Chief Executive Officer and Founder, Mr. Xuetian Yuan, served for 13 years  as a director in the transportation department of the Tianjin Transportation Bureau until our founding in 1995 and our Chief Operating Officer, Ms. Jinwei Chen, has worked for 13 years in the industry.

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High-quality Customer Service. Due to the fact that we develop our tours to meet customer demands and continually upgrade and modify our services based on customer feedback, we experience strong repeat business and customer referrals because we have a policy of high quality customer service.

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Extensive Sales Offices.  We have 23 sales offices in Tianjin and 1 sales office in Nanjing, this network is covering almost all areas of Tianjin and Nanjing, this extensive local presence can meet local  tourist’s needs, and get feedback from our customers in time to allow us to improve our services.

Regulation

New Holiday Pattern  

In November 2007, the PRC Government unveiled a draft plan to overhaul China’s complex public holiday system, with the end result being that, the total number of legal holidays will increase from 10 days to 11 days.  Some of the plan highlights are:

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The Spring Festival will begin on the eve of the Lunar New Year, rather than on the day itself;

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The three-day May Day public holiday is reduced to one day;

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Three new one-day public holidays are created for Tomb-Sweeping Day, the Dragon-Boat Festival and the Mid-Autumn Festival; and

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Golden Weeks will be maintained for the Spring Festival and the National Day public holiday, by working the entire weekend previous to each of these holidays.

We expect that this new pattern of two 7-day long holidays and five 3-day short holidays, will result in a 30-40% revenue growth for domestic travel agencies.

Foreign Currency Regulations

We are subject to the PRC’s foreign currency regulations. The PRC government has control over RMB reserves through, among other things, direct regulation of the conversion or RMB into other foreign currencies. Although foreign currencies which are required for “current account” transactions can be bought freely at authorized Chinese banks, the proper procedural requirements prescribed by Chinese law must be met. At the same time, Chinese companies are also required to sell their foreign exchange earnings to authorized Chinese banks and the purchase of foreign currencies for capital account transactions still requires prior approval of the Chinese government.

Environmental Matters

Regulations relating to the protection of the environment have not had a significant effect on our capital expenditures, earnings or competitive position.  Our operations are not energy intensive, and we are not engaged in producing consumer products, and all of our businesses are following the national environmental regulation, as well as our bus service.

Our Employees

As of September 30, 2008, we employed 86 full-time employees and 146 part-time employees. The following table sets forth the number of our full-time employees by function as of September 30, 2008,excluding employees in sales outlays:

Department	Number of Employees
Human Resources	2
Administration Office	5
Enterprise Planning	7
Finance	9
International Tours	6
Ticket Dept	2
Customer Service	5
Tour Operations	19
Bus Services	4
Total	59

- -9-

We believe to have a good relationship with our employees. Our Chinese subsidiaries have trade unions which protect employees’ rights, aim to assist in the fulfillment of our economic objectives, encourage employee participation in management decisions and assist in mediating disputes between us and union members. We have not experienced any significant problems or disruptions to our operations due to labor disputes, nor have we experienced any difficulties in recruitment and retention of experienced staff. As required by applicable Chinese law, we have entered into employment contracts with all of our officers, managers and employees. The remuneration payable to employees includes basic salaries and allowances. We also provide training for our staff from time to time to enhance their technical knowledge.

Our employees in China participate in a state pension scheme organized by Chinese municipal and provincial governments. We are required to contribute to the scheme at rates ranging from 13% to 18% of the average monthly salary. As of the date of this report, we have complied with the regulation and have paid the state pension plan as required by law.  In addition, we are required by Chinese law to cover employees in China with various types of social insurance. We have purchased social insurance for all of our employees.

With the expansion of our business operations, we expect that the number of our employees will increase in the next 12 months.

Insurance

We maintain property insurance for our administrative office buildings. The aggregate maximum amount covered by our insurance policy is up to approximately $17,757. We also maintain business interruption insurance and key-personnel life insurance. We believe our insurance coverage is customary and standard of companies of comparable size in comparable industries in China.

Litigation

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not currently aware of any legal proceedings or claims that we believe could have a material adverse effect on our business, financial condition or operating results.

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RISK FACTORS

An investment in our common stock involves a high degree of risk.  You should carefully consider the risks described below, together with all of the other information included in this registration statement, before making an investment decision.  If any of the following risks actually occur, our business, financial condition or results of operations could suffer.  In that case, the value of our common stock could decline, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

We may require additional capital and we may not be able to obtain it on acceptable terms or at all.

As of September 30, 2008, we had cash and cash equivalents of $ 4,339,925. We believe that our current cash on hand and cash flow from operations will be sufficient to meet our present cash needs for at least the next twelve months. We may, however, require additional cash resources due to a change in business conditions, our inability to achieve our targeted growth milestones, a decline in same store sales or other future developments that negatively affect our cash flows from operations. If these resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations. Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:

•

investors’ perception of, and demand for, securities of United States-based companies involved in the franchise distribution business;

•

conditions of the U.S. and other capital markets in which we may seek to raise funds;

•

our future results of operations, financial condition and cash flows; and

•

economic, political and other conditions in United States and other international markets where we may seek to establish a presence.

Financing may not be available in amounts or on terms acceptable to us, if at all.  Any failure by us to raise additional funds on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition and results of operations.

Our operating history may not serve as an adequate basis to judge our future prospects and operating results.

We have encountered and will continue to encounter risks and difficulties frequently experienced by companies in evolving industries such as the travel service industry in China. Some of the risks relate to our ability to:

•

attract and retain customers and encourage our customers to engage in repeat transactions;

•

retain our existing agreements with travel suppliers such as hotels and airlines and to expand our service offerings on satisfactory terms with our travel suppliers;

•

operate, support, expand and develop our operations, our call center, our website, and our communications and other systems;

•

diversify our sources of revenue;

•

maintain effective control of our expenses;

•

attract and retain qualified employees;

•

raise additional capital;

•

respond to changes in our regulatory environment; and

•

respond to competitive market conditions.

If we are not successful in addressing any or all of these risks, our business may be materially affected in an adverse manner.

- -11-

We may be exposed to potential risks relating to our internal controls over financial reporting and our ability to have the operating effectiveness of our internal controls attested to by our independent auditors.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404, the SEC adopted rules requiring public companies to include a report from management on the company’s internal controls over financial reporting in their annual reports, including Form 10-K.  In addition, the independent registered public accounting firm auditing a company’s financial statements must attest to and report on the operating effectiveness of our internal controls.  In the future, our management may conclude that our internal controls over our financial reporting are not effective due to the identification of one or more material weaknesses, or our independent registered public accounting firm may issue an adverse opinion on our internal control over financial reporting if one or more material weaknesses are identified.  We can provide no assurance that we will com ply with all of the requirements imposed by SOX 404 and there can be no positive assurance that we will receive a positive attestation from our independent auditors.  In the event we identify significant deficiencies or material weaknesses in our internal controls that we cannot remediate in a timely manner or we are unable to receive a positive attestation from our independent auditors with respect to our internal controls, investors and others may lose confidence in the reliability of our financial statements.  A significant financial reporting failure could cause an immediate loss of investor confidence in our Company and a sharp decline in the market price of its common stock.

Our business depends on the technology infrastructure of third parties, which if interrupted could impair the quality of our service.

We rely on third-party computer systems and other service providers, including the computerized reservation systems of airlines and hotels to make reservations and confirmations.  Other third parties provide, for instance, our back-up data center, telecommunications access lines, significant computer systems and software licensing, support and maintenance service and air-ticket delivery.  Any interruption in these or other third-party services or deterioration in their performance could impair the quality of our service.

The loss of key personnel or difficulties recruiting and retaining qualified personnel could jeopardize our ability to meet our growth targets.

Our future growth depends substantially on the contributions by and abilities of key executives and other employees, and on our ability to attract and retain them.  We must continue to recruit, retain and motivate management and other employees sufficient to maintain our current business and support our projected growth.  A loss of key employees or a significant shortage of high quality employees could jeopardize our ability to meet our growth targets.  Xuetian Yuan has been very important to our success.  Mr. Yuan is our founder, a significant stockholder and our Chief Executive Officer.  The loss of Mr. Yuan’s services could have a significant negative effect on us.  Also, our continued success and the achievement of our expansion goals are dependent upon our ability to attract and retain additional qualified employees as we expand. &nbs p;If we are unable to attract and retain additional qualified employees our operating results will suffer and we will not be able to expand as projected.

The current global economic financial crisis may negatively impact our business

We expect that the current global financial crisis will eventually have a negative impact on our business. Global air travel has fallen off as the financial crisis has hit economies around the world. The International Air Transport Association recently reported that international passenger traffic has declined 1.3% in October 2008 and 2.9% in September 2008, compared with the same periods in 2007. Although China is considered economically stable, and was originally viewed by some economists as being the one bright spot in the economic downturn, we expect that industry in China will be affected as the manufacturing and export contracts relied on by the PRC economy are curtailed, and that this in turn will affect our customers. The travel industry is highly sensitive to business and personal discretionary spending levels, and it tends to decline during general economic downturns in the PRC. If our customers have less discretionary funds as a result of the current global economic environment, the need for our products and services will also reduce and will negatively impact our sales. This effect could be offset if we can successfully increase our market share in the overall tourism market, which we plan to achieve through optimizing and expanding our sales outlays, expanding our client base and continuously improving our service qualities.

In addition, other adverse trends or events, such as a recurrence of any serious contagious diseases, increased occurrence of travel-related accidents, outbreak of war, poor weather conditions or natural disasters etc., will tend to reduce travel and are likely to reduce the Company's revenues.

Because we do business internationally, our business could be harmed if changes in political or economic stability, laws, exchange rates or foreign trade policies should occur.

Future sales of our franchises in foreign markets and our future relationships with our foreign customers will subject us to the risks of doing business abroad.   Other risks in doing business internationally include political or economic instability, any significant fluctuations in the value of the dollar against foreign currencies, terrorist activities and restrictions on the transfer of funds. Although we have not yet been affected in a material way by any of the foregoing factors, we cannot predict the likelihood or frequency of any such events occurring in the future, and any material disruption may have an adverse affect on our business.

We may not be able to protect our trademarks and other proprietary rights and our failure to so protect those marks and rights would have a material adverse effect on our business, operations, prospects and financial condition.

We believe that our Parents’ Tour, Wedding Tour and Olympics Tour logos and other proprietary rights that we use in our business are important to our success and our competitive position.  Accordingly, we devote substantial resources to the establishment and protection of our trademarks and proprietary rights.  However, the actions taken by us may be inadequate to prevent imitation of our products and concepts by others.

- -12-

RISKS RELATED TO THE MARKET FOR OUR STOCK

 No market currently exists for the trading of our securities and no market may ever develop.  Accordingly, you may not have any means of trading shares of our common stock.

A market does not presently exist for our securities and no assurance can be given that a market will ever develop.  Consequently, you may not be able to liquidate your investment in our securities for an emergency or at any time, and the securities will not be readily acceptable as collateral for loans. Although we will endeavor to establish a trading market for our securities in the future, no assurance can be given as to the timing of this event or whether the market, if established, will be sufficiently liquid to enable an investor to liquidate his investment in us.  

We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.

The SEC has adopted regulations which generally define so-called “penny stocks” as an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions.  If our common stock becomes a “penny stock”, we may become subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock Rule”.  This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouses).  For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and receive the purchas er’s written consent to the transaction prior to sale.  As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market.  Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities.  Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

There can be no assurance that our common stock will qualify for exemption from the Penny Stock Rule.  In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock if the SEC finds that such a restriction would be in the public interest.

Our holding company structure may limit the payment of dividends.

We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should we decide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiaries and other holdings and investments. In addition, our operating subsidiaries, from time to time, may be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions as discussed below. If future dividends are paid in RMB, fluctuations in the exchange rate for the conversion of RMB into U.S. dollars may reduce the amount received by U.S . stockholders upon conversion of the dividend payment into U.S. dollars.

Chinese regulations currently permit the payment of dividends only out of accumulated profits as determined in accordance with Chinese accounting standards and regulations. Our subsidiaries in China are also required to set aside a portion of their after tax profits according to Chinese accounting standards and regulations to fund certain reserve funds. Currently, our subsidiaries in China are the only sources of revenues or investment holdings for the payment of dividends. If they do not accumulate sufficient profits under Chinese accounting standards and regulations to first fund certain reserve funds as required by Chinese accounting standards, we will be unable to pay any dividends.

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Market volatility may affect our stock price, and the value of our common stock may experience sudden decreases.

There has been, and will likely continue to be, significant volatility in the market price of securities, including ours. These fluctuations can be unrelated to the operating performance of these companies. Factors such as the following could cause the market price of our common stock to fluctuate substantially:

•

announcements of new products by us or our competitors;

•

litigation involving us;

•

quarterly fluctuations in our financial results or other travel related companies’ financial results;

•

shortfalls in our actual financial results compared to our guidance or results previously forecasted by stock market analysts;

•

acquisitions or strategic alliances by us or our competitors;

•

any stock repurchase program;

•

the gain or loss of a significant customer; and

•

general conditions in the travel industry and conditions in the financial markets.

A decline in the market price of our common stock may adversely impact our ability to attract and retain employees. In addition, stockholders may initiate securities class action lawsuits if the market price of our stock drops significantly, which may cause us to incur substantial costs and could divert the time and attention of our management.

Our controlling stockholder holds a significant percentage of our outstanding voting securities, which could hinder our ability to engage in significant corporate transactions without his approval.

As a result, he possesses significant influence, giving him the ability, among other things, to elect a majority of our Board of Directors and to authorize or prevent proposed significant corporate transactions. His ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offer.

RISKS RELATED TO DOING BUSINESS IN CHINA

Declines or disruptions in the travel industry generally could reduce our revenue.

A large part of the Company’s business is currently driven by the trends that occur in the travel industry in China, including the hotel, airline and packaged-tour industries.  As the travel industry is highly sensitive to business and personal discretionary spending levels, it tends to decline during general economic downturns. In addition, other adverse trends or events that tend to reduce travel and are likely to reduce the Company’s revenues include the

following:

•

a recurrence of SARS or any other serious contagious diseases;

•

increased prices in the hotel, airline, or other travel-related industries;

•

increased occurrence of travel-related accidents;

•

outbreak of war or conflict across the Taiwan Strait or elsewhere in the Asia-Pacific region;

•

increases in terrorism or the occurrence of a terrorist attack in the Asia-Pacific region or elsewhere;

•

poor weather conditions; and

•

natural disasters.

- -14-

The Company could be severely affected by changes in the travel industry and will, in many cases, have little or no control over those changes.  As a result of any of these events, our operating results and financial conditions could be materially and adversely affected.

Our results are likely to fluctuate because of seasonality in the travel industry in China.

Our business travel operations experience seasonal fluctuations, reflecting seasonal variations in demand for travel services.  During the first quarter, demand for travel services generally declines and the number of bookings flattens or decreases, in part due to a slowdown in business activity during the Chinese New Year holiday. Demand for travel services generally peaks during the second half of the year and there may be seasonal fluctuations in allocations of travel services made available to us by travel suppliers.  Consequently, our revenues may fluctuate from quarter to quarter.

Changes in China’s political or economic situation could harm us and our operational results.

Economic reforms adopted by the Chinese government have had a positive effect on the economic development of the country, but the government could change these economic reforms or any of the legal systems at any time. This could either benefit or damage our operations and profitability. Some of the things that could have this effect are:

•

Level of government involvement in the economy;

•

Control of foreign exchange;

•

Methods of allocating resources;

•

Balance of payments position;

•

International trade restrictions; and

•

International conflict.

The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development, or OECD, in many ways. As a result of these differences, we may not develop in the same way or at the same rate as might be expected if the Chinese economy were similar to those of the OECD member countries.

Our business is largely subject to the uncertain legal environment in China and your legal protection could be limited.

The Chinese legal system is a civil law system based on written statutes. Unlike common law systems, it is a system in which precedents set in earlier legal cases are not generally used. The overall effect of legislation enacted over the past 20 years has been to enhance the protections afforded to foreign invested enterprises in China. However, these laws, regulations and legal requirements are relatively recent and are evolving rapidly, and their interpretation and enforcement involve uncertainties. These uncertainties could limit the legal protections available to foreign investors, such as the right of foreign invested enterprises to hold licenses and permits such as requisite business licenses. In addition, all of our executive officers and our directors are residents of China and not of the U.S., and substantially all the assets of these persons are located outside the U.S. As a result, it could be difficult for investors to affect service of process in the U.S., or to enforce a judgment obtained in the U.S. against us or any of these persons.

- -15-

The Chinese government exerts substantial influence over the manner in which we must conduct our business activities which could have an adverse effect on our ability to operate in China.

China only recently has permitted provincial and local economic autonomy and private economic activities. The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property and other matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties or joint ventures.

Future inflation in China may inhibit our ability to conduct business in China.

In recent years, the Chinese economy has experienced periods of rapid expansion and high rates of inflation. During the past ten years, the rate of inflation in China has been as high as 20.7% and as low as -2.2%. These factors have led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. High inflation may in the future cause the Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.

Any recurrence of severe acute respiratory syndrome, or SARS, or another widespread public health problem, could harm our operations.

A renewed outbreak of SARS or another widespread public health problem in China, where our operations are conducted, could have a negative effect on our operations.  Our operations may be impacted by a number of health-related factors, including the following:

•

quarantines or closures of some of our offices which would severely disrupt our operations,

•

the sickness or death of our key officers and employees, and

•

a general slowdown in the Chinese economy.

Any of the foregoing events or other unforeseen consequences of public health problems could damage our operations.

Restrictions on currency exchange may limit our ability to receive and use our revenues effectively.

The majority of our revenues will be settled in RMB, and any future restrictions on currency exchanges may limit our ability to use revenue generated in RMB to fund any future business activities outside China or to make dividend or other payments in U.S. dollars. Although the Chinese government introduced regulations in 1996 to allow greater convertibility of the RMB for current account transactions, significant restrictions still remain, including primarily the restriction that foreign-invested enterprises may only buy, sell or remit foreign currencies after providing valid commercial documents, at those banks in China authorized to conduct foreign exchange business. In addition, conversion of RMB for capital account items, including direct investment and loans, is subject to governmental approval in China, and companies are required to open and maintain separate foreig n exchange accounts for capital account items. We cannot be certain that the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the RMB.

- -16-

Fluctuations in exchange rates could adversely affect our business and the value of our securities.

The value of our common stock will be indirectly affected by the foreign exchange rate between U.S. dollars and RMB and between those currencies and other currencies in which our sales may be denominated.  Appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations.  Fluctuations in the exchange rate will also affect the relative value of any dividend we issue that will be exchanged into U.S. dollars as well as earnings from, and the value of, any U.S. dollar-denominated investments we make in the future.

Since July 2005, the RMB has no longer been pegged to the U.S. dollar.  Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations.  To date, we have not entered into any hedging transactions.  While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all.  In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident stockholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us or otherwise materially adversely affect us.

In October 2005, the PRC State Administration of Foreign Exchange, or SAFE, issued the Notice on Relevant Issues in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China, generally referred to as Circular 75, which required PRC residents to register with the competent local SAFE branch before establishing or acquiring control over an offshore special purpose company, or SPV, for the purpose of engaging in an equity financing outside of China on the strength of domestic PRC assets originally held by those residents. Internal implementing guidelines issued by SAFE, which became public in June 2007 (known as Notice 106), expanded the reach of Circular 75 by (1) purporting to cover the establishment or acquisition of control by PRC residents of offshore entities which merely acquire “control” ov er domestic companies or assets, even in the absence of legal ownership; (2) adding requirements relating to the source of the PRC resident’s funds used to establish or acquire the offshore entity; (3) covering the use of existing offshore entities for offshore financings; (4) purporting to cover situations in which an offshore SPV establishes a new subsidiary in China or acquires an unrelated company or unrelated assets in China; and (5) making the domestic affiliate of the SPV responsible for the accuracy of certain documents which must be filed in connection with any such registration, notably, the business plan which describes the overseas financing and the use of proceeds. Amendments to registrations made under Circular 75 are required in connection with any increase or decrease of capital, transfer of shares, mergers and acquisitions, equity investment or creation of any security interest in any assets located in China to guarantee offshore obligations, and Notice 106 makes the offshore SPV jointl y responsible for these filings. In the case of an SPV which was established, and which acquired a related domestic company or assets, before the implementation date of Circular 75, a retroactive SAFE registration was required to have been completed before March 31, 2006; this date was subsequently extended indefinitely by Notice 106, which also required that the registrant establish that all foreign exchange transactions undertaken by the SPV and its affiliates were in compliance with applicable laws and regulations. Failure to comply with the requirements of Circular 75, as applied by SAFE in accordance with Notice 106, may result in fines and other penalties under PRC laws for evasion of applicable foreign exchange restrictions. Any such failure could also result in the SPV’s affiliates being impeded or prevented from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the SPV, or from engaging in other transfers of funds into or out of China.

We believe that our stockholders, who are PRC residents as defined in Circular 75, have registered with the relevant branch of SAFE, as currently required, in connection with their equity interests in us and our acquisitions of equity interests in our PRC subsidiaries. However, we cannot provide any assurances that their existing registrations have fully complied with, and they have made all necessary amendments to their registration to fully comply with, all applicable registrations or approvals required by Circular 75. Moreover, because of uncertainty over how Circular 75 will be interpreted and implemented, and how or whether SAFE will apply it to us, we cannot predict how it will affect our business operations or future strategies. For example, our present and prospective PRC subsidiaries’ ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 by our PRC resident beneficial holders. In addition, such PRC residents may not always be able to complete the necessary registration procedures required by Circular 75. We also have little control over either our present or prospective direct or indirect stockholders or the outcome of such registration procedures. A failure by our PRC resident beneficial holders or future PRC resident stockholders to comply with Circular 75, if SAFE requires it, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiaries’ ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

- -17-

If the China Securities Regulatory Commission, or CSRC, or another PRC regulatory agency, determines that CSRC approval is required in connection with this offering, this offering may be delayed or cancelled, or we may become subject to penalties.

On August 8, 2006, six PRC regulatory agencies, including the CSRC, promulgated the Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors, which became effective on September 8, 2006. This new regulation, among other things, has certain provisions that require SPVs formed for the purpose of acquiring PRC domestic companies and controlled by PRC individuals, to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock market. However, the new regulation does not expressly provide that approval from the CSRC is required for the offshore listing of an SPV which acquires, directly or indirectly, an equity interest or shares of domestic PRC entities held by domestic companies or individuals by cash payment, nor does it expressly provide that approval from CSRC is not required for the offshore listing of an SPV w hich has fully completed its acquisition of an equity interest in domestic PRC equity prior to September 8, 2006. On September 21, 2006, the CSRC published on its official website a notice specifying the documents and materials that are required to be submitted for obtaining CSRC approval. It is not clear whether the provisions in the new regulation regarding the offshore listing and trading of the securities of an SPV applies to an offshore company such as us which has acquired equity interests in PRC domestic entities for cash and has completed the acquisition of the equity interest of PRC domestic entities prior to the effective date of the new regulation. Since the new regulation has only recently been adopted, there remains some uncertainty as to how this regulation will be interpreted or implemented. If the CSRC or another PRC regulatory agency subsequently determines that the CSRC’s approval is required for this offering, we may face sanctions by the CSRC or another PRC regulatory agency. If this happens, these regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from this offering into the PRC, restrict or prohibit payment or remittance of dividends to us or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation a nd prospects, as well as the trading price of our shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to delay or cancel this offering before settlement and delivery of the shares being offered by us.

We may be unable to complete a business combination transaction efficiently or on favorable terms due to complicated merger and acquisition regulations which became effective on September 8, 2006.

On August 9, 2006, six PRC regulatory agencies, including the CSRC, promulgated the Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors, which became effective on September 8, 2006. This new regulation, among other things, governs the approval process by which a PRC company may participate in an acquisition of assets or equity interests. Depending on the structure of the transaction, the new regulation will require the PRC parties to make a series of applications and supplemental applications to the government agencies. In some instances, the application process may require the presentation of economic data concerning a transaction, including appraisals of the target business and evaluations of the acquirer, which are designed to allow the government to assess the transaction. Government approvals will have expiration dates by which a transac tion must be completed and reported to the government agencies. Compliance with the new regulations is likely to be more time consuming and expensive than in the past and the government can now exert more control over the combination of two businesses. Accordingly, due to the new regulation, our ability to engage in business combination transactions has become significantly more complicated, time consuming and expensive, and we may not be able to negotiate a transaction that is acceptable to our stockholders or sufficiently protect their interests in a transaction.

- -18-

The new regulation allows PRC government agencies to assess the economic terms of a business combination transaction. Parties to a business combination transaction may have to submit to the Ministry of Commerce and other relevant government agencies an appraisal report, an evaluation report and the acquisition agreement, all of which form part of the application for approval, depending on the structure of the transaction. The regulations also prohibit a transaction at an acquisition price obviously lower than the appraised value of the PRC business or assets and in certain transaction structures, require that consideration must be paid within defined periods, generally not in excess of a year. The regulation also limits our ability to negotiate various terms of the acquisition, including aspects of the initial consideration, contingent consideration, holdback provisions, indemnification provisions and provisions relating to the assumption and allocation of assets and liabilities. Transaction structures involving trusts, nominees and similar entities are prohibited. Therefore, such regulation may impede our ability to negotiate and complete a business combination transaction on financial terms that satisfy our investors and protect our stockholders’ economic interests.

The value of our securities will be affected by the foreign exchange rate between U.S. dollars and RMB.

The value of our common stock will be affected by the foreign exchange rate between U.S. dollars and RMB, and between those currencies and other currencies in which our sales may be denominated. For example, to the extent that we need to convert U.S. dollars into RMB for our operational needs and should the RMB appreciate against the U.S. dollar at that time, our financial position, the business of the company, and the price of our common stock may be harmed. Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of declaring dividends on our common stock or for other business purposes and the U.S. dollar appreciates against the RMB, the U.S. dollar equivalent of our earnings from our subsidiaries in China would be reduced.

Under the New EIT Law, we may be classified as a “resident enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.

China passed a new Enterprise Income Tax Law (the “New EIT Law”), and its implementing rules, both of which became effective on January 1, 2008.  Under the New EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes.  The implementing rules of the New EIT Law define de facto management as “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.  Because the New EIT Law and its implementing rules are new, no official interpretation or application of this new “resident enterprise” classification is available. Therefore, it is unclear how ta x authorities will determine tax residency based on the facts of each case.

If the PRC tax authorities determine that Golden Dragon is a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow.  First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations.  In our case, this would mean that income such as non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, although under the New EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify as “tax-exempt income,” we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the pr ocessing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes.  Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC stockholders and with respect to gains derived by our non-PRC stockholders from transferring our shares.  We are actively monitoring the possibility of “resident enterprise” treatment for the 2008 tax year and are evaluating appropriate organizational changes to avoid this treatment, to the extent possible.

If we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be creditable against our U.S. tax.

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We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.

We are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. We have operations, agreements with third parties and we make sales in China. Our activities in China create the risk of unauthorized payments or offers of payments by the employees, consultants, sales agents or distributors of our Company, even though they may not always be subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents or distributors of our Company may engage in condu ct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the U.S. government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a holding company that operates primarily through our PRC subsidiaries, Tianjin Golden Dragon and Nanjing Feiyu.  Through our subsidiaries, we are engaged in the business of Chinese domestic and international tour packaging.  We plan and organize conferences, events and tours for large groups in the various districts of Tianjin and Nanjing, and offer several specialized package tours to areas such as Hunan, Changsha, Shaoshan, Kunming, Dali and Lijiang,  We also offer tour packages for holidays and special events and have garnered nationwide recognition for our unique tourist products, such as our signature Olympics Tour package, in support of the 2008 games, our Wedding Tours to celebrate honeymoons, and our branded Parents’ Tour, designed for families to travel together.   We were the first PRC company to offer honeymoon tours in China and our Parent Tour has served more than 100,000 people since its introduction in 2003.  As part of our corporate tourism package, we also offer local transportation on our fleet of 65 buses.

Our international corporate customers include Motorola, Panasonic and Butler, and our domestic customers include the Tianjin Municipal Government, the Tianjin Tonight Newspaper, and the local branches of The People’s Insurance Company (Group) of China, the Bank of China, Shanghai Pudong Development Bank and China Mobile. In addition, our subsidiary Tianjin Golden Dragon is the exclusive agent in Tianjin for Hong Kong Disneyland, which brings approximately 20,000 visitors annually, and for the Bright Star Cruise Line, which accounts for more than 5,000 tourists annually.   

During 2007, we served more than 690,000 tourists and we were ranked twenty-ninth in revenues in the Chinese travel industry by China National Tourism Administration, CNTA.  The CNTA has also recognized us among the Top 100 Enterprises for eight consecutive years.

Our sales revenue for the fiscal years ended December 31, 2007 and 2006 was $26,763,814 and $21,914,567, respectively, and our sales revenue for the nine months ended September 30, 2008 and 2007 was $26,904,548 and $20,710,780, respectively.  Our net income for the fiscal years ended December 31, 2007 and 2006 was $3,207,712 and $2,422,243, respectively, and our net income for the nine months ended September 30, 2008 and 2007 was $4,164,417 and $2,322,022, respectively.

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Recent Developments

On July 28, 2008, we entered into a stock purchase agreement among VT Financial Services, Inc. and Bay Peak LLC, pursuant to which, we issued and sold to Bay Peak 39,190,574 shares of our common stock for a total purchase price of $47,812.50.  The closing of the stock purchase agreement was conditioned upon, among other things, the execution of a settlement and release agreement and a shareholders’ rights agreement, and upon the preparation of a proxy statement calling a special shareholders meeting for approval of, among other things, a change of the Company’s domicile to Nevada and a 1-for-7 reverse split.  On August 29, 2008, we entered into a settlement and release agreement with VCC, pursuant to which, we agreed to issue 2,000,000 shares of our common stock to VCC, prior to giving effect to the split, and to pay VCC $50,000, in exchang e for VCC’s forgiveness certain liabilities held by us.  Each party also released the other of all claims arising from or related to the facts stated in the settlement agreement, other than rights and obligations arising out of the remaining agreements.  On July 28, 2008, we also entered into a shareholders’ rights agreement with VCC, Bay Peak and The Aviary, LLC, pursuant to which we agreed not to enter into certain material transactions without the approval of the shareholders party to the agreement and they agreed to a lockup of their shares.  As a result of the stock purchase transaction, we merged with and into Bay Peak 2 Acquisition Corp., a Nevada Corporation, which was formed solely for the purpose of acquiring our company and had no other business purpose, assets or operations, and changed our name from VT Financial Services, Inc., to Bay Peak 2 Acquisition Corp.

Prior to December 24, 2008, we were a shell company and had no operations.  On December 24, 2008, we completed a reverse acquisition transaction through a share exchange with Touchstone Industry Group Limited, or Touchstone, whereby we issued to the shareholders of Touchstone, 101,101,853 shares of our common stock, par value $0.001, in exchange for all the issued and outstanding capital stock of Touchstone.  Touchstone thereby became our wholly owned subsidiary and its subsidiaries, Wellcare, ChuanRui Travel, Nanjing Qianjiu, Tianjin Longhai Longjia, Sky Travel, Tianjin Golden Dragon and Nanjing Feiyu, became our indirect subsidiaries.  As a result of the reverse acquisition transaction, on December 24, 2008, Cory Roberts resigned from all corporate offices and from our board of directors, and Xuetian Yuan, Jinwei Chen and Yuanyuan Song were appointed Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, respectively.  On same day, our board of directors appointed Xuetian Yuan, Jinwei Chen and Chen Feiyu to serve as members on the board of directors, with Xuetian Yuan serving as Chairman. In accordance with SFAS 141, we booked this merger using the recapitalization method which consolidated the Company with Touchstone and its subsidiaries, and treated the Company as a shell company at the time of the merger.  Since we were a shell company at the time of the merger while Touchstone had operations and was significantly larger than we were, under SFAS 141, Touchstone is considered to be the acquirer. As a condition to the closing of the reverse acquisition, we filed a certificate of amendment to our articles of incorporation with the Nevada Secretary of State on January 14, 2009, to change our name from Bay Peak 2 Acquisition Corp. to China Golden Dragon Travel Group.  

On January 14, 2009, our principal shareholder, LiQiang Song, entered into an earn-in agreement with Xuetian Yuan and Jinwei Chen, our Chief Executive Officer and Chief Operating Officer, respectively, and the founders of our PRC operating subsidiaries, or the Founders, pursuant to which, upon the satisfaction of certain conditions, the Founders have the option to purchase up to an aggregate of 74,107,658 shares of our common stock owned by Mr. Song, at a purchase price of $0.001 per share (the par value of our common stock); except that with respect to the shares eligible to be purchased relating to the satisfaction of condition (4), the purchase price is $0.001 per share, multiplied the number of such shares, plus $1,000. Under the terms of the earn-in agreement, the Founders will have the right to purchase the shares as follows: (1) 25% of the shares within six months after the execution of the Share Exchange Agreement, provided that on or before that date, we have entered into a binding employment agreement with the Founders and the Founders are employed by us pursuant to that agreement on such date; (2) 25% of the shares after this registration statement on Form 10 has become effective; (3) 25% of the shares if we achieve not less than $5,400,000 in after-tax net income, as determined under United States generally accepted accounting principals, or US GAAP, for the year ended December 31, 2009; and (4) 25% of the shares if we achieve not less than $9,000,000 in pre-tax profits, as determined under US GAAP for the fiscal year ended December 31, 2009. For purposes of determining whether or not the financial thresholds described above have been achieved, the purchase of the shares by the Founders or any other person designated by the Founders will not be deemed to be an expense, charge, or other deduction from our revenues even though US GAAP may require contrary treatment. Each Founder may purchase 25% of the total number of shares that he or she is eligible to purchase under the earn-in agreement upon the satisfaction of each condition described above. If the Founders purchase all 74,107,658 shares eligible for purchase under the earn-in agreement, the Founders will become our controlling shareholders.

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Principal Factors Affecting Our Financial Performance

Market research discussed elsewhere herein reflects that our industry is one that will continue to grow in the coming years.  However, we expect that the following factors will affect our financial performance in the years to come:

Overall Demand For Our Services

We expect that the current global financial crisis will eventually have a negative impact on our business. Global air travel has fallen off as the financial crisis has hit economies around the world. The International Air Transport Association recently reported that international passenger traffic has declined 1.3% in October 2008 and 2.9% in September 2008, compared with the same periods in 2007. Although China is considered economically stable, and was originally viewed by some economists as being the one bright spot in the economic downturn, we expect that industry in China will be affected as the manufacturing and export contracts relied on by the PRC economy are curtailed, and that this in turn will affect our customers. The travel industry is highly sensitive to business and personal discretionary spending levels, and it tends to decline during general economic downturns in the PRC. If our customers have less discretionary funds as a result of the current global economic environment, the need for our products and services will also reduce and will negatively impact our sales. This effect could be offset if we can successfully increase our market share in the overall tourism market, which we plan to achieve through optimizing and expanding our sales outlays, expanding our client base and continuously improving our service qualities.

In addition, other adverse trends or events, such as a recurrence of any serious contagious diseases, increased occurrence of travel-related accidents, outbreak of war, poor weather conditions or natural disasters etc., will tend to reduce travel and are likely to reduce the Company's revenues.

Credit and Foreign Currency Risks

Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash, cash equivalents, accounts receivables and other receivable.  We place our cash and cash equivalents, which amounted to USD4,339,925 and USD549,707 as at September 30, 2008 and December 31, 2007, with financial institutions that our management believes are of high-credit ratings and quality.   We conduct credit evaluations of customers and generally does not require collateral or other security from its customers.  We establish an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers.

A majority of our sales and expenses transactions and a significant portion of our assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the PBOC. Remittances in currencies other than RMB by us in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

Our Ability to Reduce Cost

If we are not able to reduce costs to our customers, we will not be able to remain competitive.  We not only focus on expanding our business, but we also focus on reducing costs to our customers. Our current cost reduction methods include the use of charter fights and bypassing brokers.  Since October 2008, we now charter flights to 14 destinations, including: Yunnan, Xinjiang, Dalian, Sichuan (Chengdu and Jiu Zaigou), Shandong (Qingdao, Pengcheng, Yantai, Weihai), Hunan (Zhang Jiajie, Fenghuang ancient city), Guangxi (Guilin) and Hainan (Sanya). This approach has effectively lowered our transportation costs while providing additional revenue through the sale of selling spare seats to the traveling public.  We are also trying to bypass brokers of package tours to East Asia, including tours to Korea and Japan.  Instead we are securing such packages thro ugh direct co-operation with foreign travel agencies.  We expect that this approach will effectively lower the cost of our East Asian tour packages.

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Results of Operations

The following tables set forth key components of our results of operations for the periods indicated.  Results and key components of our revenue are shown in dollars.

(All amounts are in thousands of U.S. dollars)

	Year Ended December 31,		Nine Months Ended September 30,
	2007	2006	2008	2007
Revenues	26,763,814	21,914,567	26,904,548	20,710,780
Cost of services	(21,285,346)	(17,364,106)	(20,214,725)	(16,514,755)
Gross margin	5,478,468	4,550,461	6,689,823	4,196,025
Operating expenses:
Selling expenses	254,127	283,113	247,092	201,438
General and administrative  expenses	686,763	737,447	852,047	464,468
	940,890	1,020,560	1,099,139	665,906
Income from operations	4,537,578	3,529,901	5,590,684	3,530,119
Other income (expense):
Interest income	5,071	6,941	118	4,228
Interest expense	(87,229)	(116,431)	(38,232)	(68,200)
Other income	333,305	198,214	-	-
Other expenses	(1,096)	(3,337)	(14)	(442)
	250,051	85,387	(38,128)	(64,414)
Income before income tax  expense	4,787,629	3,615,288	5,552,556	3,465,705
Income tax expense	1,579,917	1,193,045	1,388,139	1,143,683
Net income	3,207,712	2,422,243	4,164,417	2,322,022
Foreign currency translation  gain	116,413	84,569	104,287	86,383
Comprehensive income	3,324,125	2,506,812	4,268,704	2,408,405

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	Year Ended December 31,		Nine Months Ended September 30,
As a percentage of revenues	2007	2006	2008	2007
Revenues	100.0%	100.0%	100.0%	100.0%
Cost of services	(79.5%)	(79.2%)	(75.1%)	79.7%
Gross margin	20.5%	20.8%	24.9%	20.3%
Operating expenses:
Selling expenses	0.9%	1.3%	0.9%	1.0%
General and administrative  expenses	2.6%	3.4%	3.2%	2.2%
	3.5%	4.7%	4.1%	3.2%
Income from operations	17.0%	16.1%	20.8%	17.0%
Other income (expense):
Interest income	0.0%	0.0%	0.0%	0.0%
Interest expense	(0.3%)	(0.5%)	(0.1%)	(0.3%)
Other income	1.2%	0.9%	-	-
Other expenses	0.0%	0.0%	0.0%	0.0%
	0.9%	0.4%	(0.1%)	(0.3%)
Income before income tax  expense	17.9%	16.5%	20.7%	16.7%
Income tax expense	5.9%	5.4%	5.2%	5.5%
Net income	12.0%	11.1%	15.5%	11.2%
Foreign currency translation  gain	0.4%	0.4%	0.4%	0.4%
Comprehensive income	12.4%	11.5%	15.9%	11.6%

Nine months Ended September 30, 2008 and 2007

Revenues.  Our total revenues during the nine months ended September 30, 2008 amounted to $26.9million, which is an increase of $6.2 million, or 29.9%, from our total revenues during the same period in 2007, when we had revenues of $20.7 million.  The increase in sales is attributable to the continuous expansion of our client base and the increase in sales of our Beijing Tour package in the wake of the 2008 Olympic Games.  

Costs of Services.  Our cost of services during the nine months ended September 30, 2008 amounted to $20.2 million, which is $3.7 million, or 22.4%, more than that during the same period in 2007, when the cost of goods sold were $16.5 million.  The increase percentage in cost of services is lower than that of revenues, mainly due to the effective cost control procedures executed by management.  Our current cost reduction methods include the use of charter fights and bypassing brokers.  Since October 2008, we now charter flights to 14 destinations in China. This approach has effectively lowered our transportation costs while providing additional revenue through the sale of selling spare seats to the traveling public.  We are also trying to bypass brokers of package tours to East Asia, including tours to Korea and Japan. &n bsp;Instead we are securing such packages through direct co-operation with foreign travel agencies.  We expect that this approach will effectively lower the cost of our East Asian tour packages.

Total Operating Expenses.  Our total operating expenses during the nine months ended September 30, 2008 amounted to $1.1 million, which is $0.4 million more than that during the same period of 2007, when we had operating expenses of $0.7 million.  The increase in our operating expenses is mainly due to our increased advertising, an increase in our insurance coverage and other office expenses incurred to support the expansion of our customer base during the 2008 period.

Interest Expenses.  Our total interest expenses decreased of 43.9% from $68,200 for the nine months ended September 30, 2007, to $38,232 in the same period of 2008.  The increase is mainly due to our continuous repayment of a long term loan of approximately $2,748,248, which was fully repaid as of September 30, 2008.

Income Taxes. We incurred income taxes of $1,388,139 during the nine months ended September 30, 2008, while during the same period of 2007, tax charges amounted to $1,143,683. Although our effective income tax rate decreased from 33% of 2007, to 25% of 2008, we accrued more taxes in 2008 primarily because we earned more income.

Net Income after Taxes. We incurred a net income of $4.2 million during the nine months ended September 30, 2008. This is an increase of $1.9 million, as compared to the same period in 2007, when we realized net income of $2.3 million. The increase in our net income during the 2008 period is primarily due to the increase in our revenue and income from operations.

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Fiscal Year Ended December 31, 2007 and 2006

Revenues. Our total revenues during the fiscal year ended December 31, 2007, amounted to $26.8 million, which is an increase of $4.9 million, or 22.1%, from total revenues during the same period in 2006, when we had revenues of $22.0 million. The increase in revenues is primarily attributable to increase sales of our package tour services provided to Tianjin domestic tourists and the increase of subcontracted package tours from other travel agencies during the 2007 period.

Costs of Services.  Our cost of services during the fiscal year ended December 31, 2007 amounted to $21.3 million, which is $3.9 million, or 22.6%, more than our cost of services during the same period in 2006, when the cost of goods sold were $17.4 million.  The increase in our cost of services is mainly in line with our increase in revenues.

Total Operating Expenses.  Our total operating expenses decreased by $0.1, or 7.8%, to about $0.9 million in fiscal 2007, from about $ 1.0 million in fiscal 2006.  The decrease in our total operating expenses during the 2007 period was mainly due to a decrease in administrative expenses in connection with a reduction in our staff during the 2007 period.

Interest Expenses.  Our total interest expenses decreased of 25.1%, from $116,431 in fiscal 2006, to $87,229 in fiscal 2007.  The decrease in our interest expenses was mainly due to our continuous repayment of a long term loan of approximately $2,748,248.  During the 2007 period, the balance due on the loan decreased $231,665, from $403,492 as of December 31, 2006, to $171,827 as of December 31, 2007.

Other income. Our other income increased by $135,091, or 68.2%, from $198,214 in fiscal 2006, to $333,305 in fiscal 2007. The increase in our other income was mainly due to certain advertising rebates that we received during the 2007 period in connection with our advertising to attract tourists to the Beijing Olympic Games.

Income Taxes.  We incurred income taxes of $1.6 million during the fiscal year ended December 31, 2007, while during the same period in 2006, tax charge amounted to $1.2 million.  The $0.4 million increase in taxes paid is in line with the increase in our earned income during the 2007 period.

Net Income after Taxes. We incurred a net income of $3.2 million during the fiscal year ended December 31, 2007.  This is an increase of $0.8 million as compared to the same period in 2006, which realized net income of $2.4 million.  The increase in our net income in 2007 resulted mostly from the obvious increase in revenue and income from operations.

Liquidity and Capital Resources

Cash and cash equivalents represent cash on hand and deposits held at call with banks. We consider all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.   As of September 30, 2008, we had cash and cash equivalents of $4,339,925.  The following table provides detailed information about our net cash flow for all financial statement periods presented in this registration statement.

(All amounts are in thousands of U.S. dollars)

	Year Ended December 31,		Nine months Ended September 30,
	2007	2006	2008	2007
Net cash provided by operating activities	6,308,817	3,670,408	7,256,401	4,841,902
Net cash used in investing activities	(20,424)	(32,943)	(4,470)	(4,629)
Net cash used in financing activities	(5,876,819)	(3,692,633)	(3,628,358)	(3,848,655)
Effect of foreign currency exchange rate changes on cash	22,202	4,652	166,645	24,205
Net increase/(decrease) in cash and cash equivalents	433,776	(50,516)	3,790,218	1,012,823

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Operating Activities

Net cash provided by operating activities was $7,256,401 for the nine months ended September 30, 2008, which represents an increase of $2,414,499, from the $4,841,902 net cash provided by operating activities during the same period in 2007. The increase in cash provided by operating activities was primarily due to the increase in our revenue from operations.

Net cash provided by operating activities was $6,308,817 for the year ended December 31, 2007, which is an increase of $2,638,409 from the $3,670,408 net cash provided by operating activities for the same period in 2006. The increase is mainly the result of an increase in revenue from operations.

Investing Activities

Our main uses of cash for investing activities are for purchases of fixed assets.  Net cash used in investing activities during the nine months ended September 30, 2008 and 2007 was $4,470 and $4,629 respectively, which are not material comparing to that of other activities.

Our main uses of cash for investing activities are for purchases of fixed assets.  Net cash used in investing activities during the year ended December 31, 2008 and 2007 was $20,424 and $32,943, respectively, which are not material comparing to that of other activities.

Financing Activities

The following table summarizes our long term debt (in USD) for the periods indicated:

	September 30,	December 31,
	2008 (Unaudited)	2007	2006
Current portion of long-term debt	363,141	648,272	925,522
Long-term debt	-	171,827	403,492
Total debt	363,141	820,099	1,329,014

On August 24, 2005, Tianjin Golden Dragon entered into a credit agreement with First Automobile Finance Co., Ltd., or FAFCO, pursuant to which, FAFCO agreed to loan RMB18,790,600 (approximately, $2,748,248) for a period of 33 months, at an annual interest rate of 6.34%. The loan was due and payable in full on or before May 19, 2008, but Tianjin Golden Dragon had the option of applying to extend the repayment date no later than 30 business days prior to the due date.  On January 11, 2007, Tianjin Golden Dragon and FAFCO entered into an agreement to extend the repayment date for the remaining RMB10,383,240 (approximately, $1,518,617) of the loan to May 19, 2009, and to change the annual interest rate from 6.34% to 7.13%.

As of September 30, 2008, the long term loan had been fully repaid and we do not have any long/short term loans.  Net cash used in financing activities for the nine months ended September 30, 2008 totaled $3,628,358, as compared to $3,848,655 during the same period of 2007.    

Our debt ratio (total long-term debt/total assets) was 2.4% as of December 31, 2007. Net cash used in financing activities for the year ended December 31, 2007 totaled $5,876,819, as compared to $3,692,633for the year ended December 31, 2006. The increase in cash used in financing activities was primarily due to the increase of dividends to equity owners.

We believe that our currently available working capital, after receiving the aggregate proceeds of our capital raising activities, should be adequate to sustain our operations at our current levels through at least the next twelve months.  

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Obligations under Material Contracts

On October 30, 2008, Touchstone entered into a Securities Purchase Agreement with Bay Peak, LLC, or Bay Peak, pursuant to which Touchstone agreed to issue to Bay Peak ordinary shares of Touchstone in an amount equal to 6% of the issued and outstanding capital stock of Touchstone.  In addition, upon completion of an equity financing transaction in which we raise at least $5 million, Touchstone agreed to issue warrants to purchase an additional 8% of the total then issued and outstanding capital stock of Touchstone.  We assumed Touchstone's obligation to issue the warrants in connection with the reverse merger transaction.  In exchange for issuance of such shares and warrants, Bay Peak agreed to forgive a $200,000 advisory fee owed to Bay Peak, in connection with the reverse merger transaction.  When Touchstone entered into this ag reement, Bay Peak was our principal stockholder,  and Cory Roberts, Bay Peak’s Managing Member and the beneficial owner of its shares, was our director.  

Seasonality

Like most other retail businesses, our business is seasonal. Traditionally, travel and tourism products and services reflect seasonal adjustments in revenue during the second and third quarters of the calendar year.  Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full year.  In addition, fluctuations in sales and operating income in any fiscal quarter may be affected by other events affecting retail sales.  Our industry is highly sensitive to business and personal discretionary spending levels, it tends to decline during general economic downturns.

Inflation

Inflationary factors, such as increases in our products and services and our overhead costs, could impair our operating results.  Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of sales revenue if the selling prices of our products and services do not increase with these increased costs.

Critical Accounting Policies

Foreign Currency Translation

The functional currency of the Company is the Renminbi as the PRC is the primary economic environment in which the Company operates.  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions.  The resulting exchange differences are included in the determination of net income for the respective periods.  For financial reporting purposes, the financial statements of the Company, which are prepared using RMB, are translated into the Company’s reporting currency, the USD. The Company’s assets and liabilities are translated using the exchange rate at each balance sheet date.  Revenue and expenses are translated using average rates prevailing during the reporting period. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity.  Since RMB is not a fully convertible currency, all foreign exchange transactions involving RMB must take place either through the People’s Bank of China, or PBOC, or other institutions authorized to buy and sell foreign exchange.  The exchange rates for foreign exchange transactions are the rates of exchange quoted by the PBOC.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Accounts Receivable and Other Receivables

Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable.  The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.  The Company does not have any off-balance-sheet credit exposure related to its customers. As of September 30, 2008 and December 31, 2007, no allowance for doubtful accounts was provided for.

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As needed for normal business purposes, the Company advances predetermined amounts based upon internal Company policy to certain employees and unrelated parties to ensure certain transactions to be performed in a timely manner. The Company has full oversight and control over the advanced accounts.  As of September 30, 2008 and December 31, 2007, no allowance for doubtful accounts was provided for.

Long-Lived Assets

Vehicles and office equipment are recorded at cost less accumulated depreciation over 10 years and 5 years, respectively. Depreciation is calculated on the straight-line method after taking into account their respective estimated residual values over the following estimated useful lives.  Depreciation expense is included in cost of services and general and administrative expenses. When vehicles and office equipment are retired or otherwise disposed of, resulting gain or loss is included in net income or loss in the year of disposition for the difference between the net book value and proceeds received thereon.  Maintenance and repairs which do not improve or extent the expected useful lives of the assets are charged to expenses as incurred.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset.  If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount of the asset and its fair value. There were no impairment losses in the nine months ended September 30, 2008 and the year ended December 31, 2007.

Revenue Recognition

The Company's revenue recognition policies are in compliance with Staff Accounting Bulletin No. 104, “Revenue Recognition”. Revenue from travel services is recognized at the date the price is fixed or determinable, the services are provided completely, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded as advances from customers.

Taxation

Because we are incorporated in the PRC, we are governed by the income tax law of the PRC and are subject to PRC enterprise income tax.  Our applicable income tax rate was 33% for the years ended December 31, 2007 and 2006. Beginning January 1, 2008, the new Chinese Enterprise Income Tax, or EIT, law will replace the existing laws for Domestic Enterprises, or DES, and Foreign Invested Enterprises, or FIEs. The new standard EIT rate of 25% will replace the 33% rate currently applicable to both DES and FIEs.  

Revenue derived from travelling services is subject to business tax at 5.5% of gross service income after deducting relevant costs. Revenue derived from bus leasing is subject to business tax at 3% of gross service income.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and any operating loss and tax credit carry forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  A valuation allowance is provided to reduce the amount of deferred tax asset if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The fair value is estimated by discounting the future cash flow using an interest rate which approximated the rate for which the financial institution would charge borrowers with similar credit ratings and remaining maturities.

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Recently Issued Accounting Pronouncements

FASB Statement No. 160 (“SFAS No. 160”) – In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements.” This Statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 is effective for the Company’s fiscal year beginning October 1, 2009. Management is currently evaluating the effect of this pronouncement on financial statements.

FASB Statement No. 141 (“SFAS No. 141”) – In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations.” This Statement replaces SFAS No. 141, Business Combinations. This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This Statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to ena ble users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) will apply prospectively to business combinations for which the acquisition date is on or after Company’s fiscal year beginning October 1, 2009. While the Company has not yet evaluated this statement for the impact, if any, that SFAS No. 141(R) will have on its consolidated financial statements, the Company will be required to expense costs related to any acquisitions after September 30, 2009.

FASB Statement No. 161 (“SFAS No. 161”) – On March 19, 2008, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities.” The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The new standard also improves transparency about the location and amounts of derivative instruments in an entity’s financial statements; how derivative instruments and related hedged items are accounted for under FASB Statement No. 133; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. FASB Statement No. 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity’s liquidity by requiring disclosure of derivative features that are credit risk–related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. Management is currently evaluating the effect of this pronouncement on financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

PROPERTIES

All land in China is owned by the state or collectives. Individuals and companies are permitted to acquire rights to use land or land use rights for specific purposes. In the case of land used for industrial purposes, the land use rights are granted for a period of 50 years. This period may be renewed at the expiration of the initial and any subsequent terms according to the relevant Chinese laws. Granted land use rights are transferable and may be used as security for borrowings and other obligations.

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Our executive offices are located at 5F Wan Zhao Kemao Building, Fu’an Street, Heping District in Tianjin, China. Our executive offices consist of approximately 764 square meters, all of which are dedicated to administrative office space. We occupy our space pursuant to a five-year lease agreement between Tianjin Golden Dragon and Bo Yuan, under which we are obligated to pay an annual rent of RMB 100,000.  Our lease expired on December 31, 2008 but we have renewed it for an additional 3 years, through 2011, and have paid aggregate annual rent in advance.   

The following table provides a summary of all our property leases:

Lessee	Lessor	Yearly Rental (in RMB)	Premises	Term
Nanjing Qianjiu	Xiaoyan Wu	12,000	Room 7001, No. 11 Zhan Yuan Road, Qinhuai District, Nanjing	June 1, 2008 to May 31, 2009
Tianjin Longhai Longjia	Xuetian Yuan	0*	Room 2-D-504 Xinliju Building New Cultural Garden, Fu’an Avenue, Heping District, Tianjin	June 30, 2008 to June 29, 2009
Sky Travel	Jinwei Chen	10,000	No. 97 Bing Jiang Road, Heping District, Tianjin	January 1, 2006 to December 31, 2015
Tianjin Golden Dragon	Bo Yuan	100,000	Room 2-D-501-504 Xin Li Ju, New Cultural Garden, Fu’an Avenue, Heping District, Tianjin	January 1, 2009 to December 31, 2011
Nanjing Feiyu	Jiangsu Jinlian Paper Co., Ltd.	34,000	Room 7028, No. 11 Zhanyuan Road (Or: Room 7B1H Confucius Temple Commerce and Trade Mall, Qinhuai District, Nanjing)	October 24, 2008 to October 23, 2010
Chuanrui Travel	Beijing Rongjin Shiji Commercial Service Co., Ltd.	10,000	Room A042 6th Floor, Jin Yuan Times Shopping Mall, 1 Yuan Da Road, Hai Dian, Beijing	May 28, 2008 to May 27, 2009

_____________
* Mortgaged to Shenzhen Development Bank, Tianjin Branch for a period commencing from July 12, 2006 to July 12, 2020. Total balance: US $510,000; Mortgage amount: US $263,000, Amount Paid: $247,000. Mr. Xuetian's owns property and allows the Company to use the facility free of charge.

Our other property primarily consists of computer equipment, servers, licensed software, some furniture and fixtures.  And currently we don’t have any intention to make large scale improvement or development with respect to these properties.

We believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our business.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of our common stock as of January 14, 2009 (i) by each person who is known by us to beneficially own more than 5% of our common stock; (ii) by each of our officers and directors; and (iii) by all of our officers and directors as a group.

Unless otherwise specified, the address of each of the persons set forth below is 5F Wan Zhao Kemao Building, Fu’an Street, Heping District, Tianjin, PRC.

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Name & Address of Beneficial Owner	Office, If Any	Title of Class	Amount and Nature of Beneficial Ownership(1)	Percent of Class(2)
Officers and Directors
Xuetian Yuan	Chairman, Chief Executive Officer and President	Common stock $0.001 par value	0	*
Jinwei Chen	Director and Chief Operating Officer	Common stock $0.001 par value	0	*
Feiyu Chen	Director	Common stock $0.001 par value	0	*
Yuanyuan Song	Chief Financial Officer	Common stock $0.001 par value	0	*
All officers and directors as a group (4 persons named above)		Common stock $0.001 par value	0	*
5% Securities Holders
Liqiang Song		Common stock $0.001 par value	81,083,686(3)	75.01%
Xiaohong Yu		Common stock $0.001 par value	6,976,028	6.45%
Shumei Yu		Common stock $0.001 par value	6,976,028	6.45%
Bay Peak, LLC 169 Bolsa Ave. Mill Valley, CA 94941		Common stock $0.001 par value	11,664,765(4)	10.79%

* Less than 1%

¹Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.  Each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to the shares of our common stock.

²As of January 14, 2009, a total of 108,095,641 shares of our common stock are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1).  For each Beneficial Owner above, any options exercisable within 60 days have been included in the denominator.

³ 74,107,658 of the shares currently attributed to Mr. Song are subject to a call option under an earn-in agreement between Mr. Song and the founders of our PRC subsidiaries, which gives the founders the right to acquire such shares outright upon the occurrence of certain conditions set forth in the agreement.  While the earn-in agreement gives the founders the right to acquire such shares in the future, and Mr. Song has pledged in the agreement not to dispose of the shares without their consent, it does not give them any influence or control over Mr. Song regarding how he should exercise his shareholder rights.

⁴ Represents 11,664,765 shares of common stock held by Bay Peak, LLC.  Cory Roberts is the managing member of Bay Peak, LLC and has sole voting and dispositive power over the shares held by it.

Changes in Control

Pursuant to an earn-in agreement, dated January 14, 2009, among the founders of our PRC operating subsidiaries and our controlling shareholder, Mr. LiQiang Song, the founders have the option to acquire all of Mr. Eliasov’s control shares.  For details regarding these agreements, see our disclosures under “Certain Relationships and Related Transactions, and Director Independence” herein.  Other than the foregoing, we do not currently have any arrangements which if consummated may result in a change of control of our Company.

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DIRECTORS AND EXECUTIVE OFFICERS

Directors and Executive Officers

The following sets forth the name and position of each of our current executive officers and directors.

Name	Age	Position
Xuetian Yuan	53	Chairman, Chief Executive Officer and President
Yuanyuan Song	38	Chief Financial Officer
Jinwei Chen	46	Director and Chief Operating Officer
Feiyu Chen	48	Director

XUETIAN YUAN.  Mr. Yuan is the founder of our company and has served as its President and Chief Executive Officer since December 24, 2008.  Mr. Yuan has also served as the President of our Chinese operating subsidiary, Golden Dragon Travel since its founding in May 1995.  Prior to this time, Mr. Yuan served as a director in the transportation department of the Tianjin transportation bureau.  Mr. Yuan graduated from Tianjin First Middle School in 1971, and he now also serves as vice president of Tianjin Tourism Association.  

YUANYUAN SONG. Mr. Song has served as our Chief Financial Officer since January 2009. Mr Song has worked as vice president in Nanjing Feiyu for more than 10 years, he joined in Nanjin Feijin from 1992, he studied mechanical manufacturing in Nanjing Mechanical Institute from 1989 to 1991 and achieved a college degree, now he serves as Chief Financial Officer.

JINWEI CHEN.  Ms. Chen has served as our Director and Chief Operating Officer since December 24, 2008.  She has also served as the Director and Assistant General Manager of our Chinese operating subsidiary, Golden Dragon Travel since its founding in May 1995.  Ms Chen earned a Bachelor’s Degree in Chemical Engineering from Tianjin University in 1985.

FEIYU CHEN. Mr Chen has served as our Director since December 24, 2008.  He has also served as General Manager of one of our Chinese operating subsidiaries, Nanjing Feiyu, since August 1996.  Mr. Chen earned a Degree in Economy Management from the Beijing Audit Institute in 1985 and is currently President of the Nanjing Tourism Association.

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Key Employees

The following sets forth the name, position and relevant work history of our key employees.

Jianping Chen	50	Human Resource Manager	Ms. Chen has served as the Manager of our Human Resources Department since July 2000.   She graduated from the Tianjin Number 21 Senior School in 1976.
Qi Chen	58	Administrative Manager	Mr. Chen has served as our Administrative Manager since August 1996.  He graduated from the Tianjin Chengdu Dao Senior School in 1964, and now he is the head of Administration office.
Ying Zhuang	37	Comptroller	Ms. Zhuang has served as the Manager of our Accounting Department since September 1996.  She graduated from the Tianjin Finance School in 1996.
Jian Chang	28	Manager of International Tours	Mr. Chang has served as our Manager of International Tours since July 2000.  He graduated with a Bachelor’s Degree in Tourism from Tianjin Nankai University in 1999.
Bo Yuan	28	Board Secretary; Manager of IT and Enterprise Planning	Mr. Yuan has served as the Manager of our IT and Enterprise Planning Department since August 1998.  He graduated with a Degree in History from the Tianjin Normal University in 2003.

Family Relationships

There are no family relationships among any of our officers and directors.  

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers have been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.  Except as set forth in our discussion below in “Certain Relationships and Related Transactions, and Director Independence” none of our directors, director nominees or executive officers have been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

EXECUTIVE COMPENSATION

Summary Compensation Table – 2007 and 2006

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods.  No other executive officers received total annual salary and bonus compensation in excess of $100,000.

Name and Principal Position	Year	Salary ($)	Bonus ($)	All Other Compensation ($)	Total ($)
Xuetian Yuan, Chairman, Chief Executive Officer and President(1)	2006	45,000	--	1,395,000	1,440,000
	2007	45,000	--	1,395,000	1,440,000
Jinwei Chen,	2006	40,000	--	680,000	720,000
Director and Chief Operating  Officer(1)	2007	40,000	--	680,000	720,000
Mr. Cory Roberts, Former President and Chairman(2)	2006	--	--	--	--
	2007	--	--	--	--

  ⁽¹⁾    On December 24, 2008, we acquired Golden Dragon in a reverse acquisition transaction that was structured as a share exchange and in connection with that transaction,; Mr. Xuetian Yuan became our Chief Executive Officer and Jinwei Chen, became our Chief Operating Officer. Prior to the effective date of the reverse acquisition, Mr. Yuan served as the Chairman of Golden Dragon Travel, Golden Dragon's wholly owned subsidiary and Mr. Chen served as Golden Dragon's Chief Operating Officer and Director. The annual, long term and other compensation shown in this table for Mr. Yuan includes the amount that he received as an employee of Golden Dragon Travel, prior to the consummation of the reverse acquisition.

  ⁽²⁾    Mr. Cory Roberts served as our President and Chief Executive Officer until his resignation on December 24, 2008, in connection with our reverse acquisition of Golden Dragon, after which Mr. Yuan became our Chief Executive Officer.

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Employment Agreements

Prior to our reverse acquisition, we were a private limited company organized under the laws of the PRC, and in accordance with PRC regulations, the salary of our executive was determined by our shareholders.  In addition each employee is required to enter into an employment agreement executed by the Company’s human resources department and the company’s financial department. Accordingly, all our employees, including our Chief Executive Officer, Xuetian Yuan, and our Chief Operating Officer, Jinwei Chen, have executed our form of employment agreement. 

For fiscal years 2006 and 2007, Mr. Yuan earned an annual salary of $45,000 and dividends of $1,395,000 for his services as our Chief Executive Officer as the Executive Director of our Chinese operating subsidiaries, and Ms. Chen earned an annual salary of $40,00 and earned dividends of $680,000 for her services as our Chief Operating Officer and as the Assistant Executive Director of our Chinese operating subsidiaries. Pursuant to the Company’s new employment agreements with them, Mr. Yuan and Ms. Chen, will earn $50,000 and $45,000, respectively, during fiscal year 2009, for their services in those capacities to the Company.  We also intend to enter into an employment agreement with Yuanyuan Song, our Chief Financial Officer.  Our executive officers are not entitled to severance payments upon the termination of their employment agreements and they are subject to the customary non-competition and confidentiality covenants.  

Bonuses and Deferred Compensation

We do not have any bonus, deferred compensation or retirement plan. We do not have a compensation committee. All decisions regarding compensation are determined by our board of directors. We intend to establish a compensation committee led by an independent director.  

Options and Stock Appreciation Rights

None

Director Compensation

During the 2006 and 2007 fiscal year, we did not pay our directors any compensation for their services as our directors, however, our Director, Feiyu Chen, earned an annual salary of $720,000 including all dividends paid during 2006 and 2007, for his services as General Manager of one of our Chinese operating subsidiaries, Nanjing Feiyu.  Pursuant to the Company’s new employment agreement with him, Mr. Chen, will earn $40,000 during fiscal year 2009, for his continued services in this capacity to the Company.  

In the future, we will adopt a policy of paying independent directors a fee for their attendance at board and committee meetings. We also reimburse our directors for reasonable travel expenses related to their duties as our directors.  

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

The following includes a summary of transactions since the beginning of the 2006 fiscal year, or any currently proposed transaction, in which we were or are to be a participant and the amount involved that exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under “Executive Compensation”).  We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions.

•

On July 3, 2008, Mr. Xuetian Yuan, our new Chief Executive Officer, entered into a non-interest bearing loan agreement with Tianjin Golden Dragon, one of our Chinese operating subsidiaries, pursuant to which Mr. Yuan borrowed RMB34,152,826 (approximately, $4,995,919) from Tianjin Golden Dragon. Mr. Yuan was obligated to repay RMB9.5 million (approximately, $1,389,437) of this amount by the end of October 2008, to repay an additional RMB6.2million (approximately, $906,790) from his share of Tianjin Golden Dragon’s profit to be distributed at  the end of 2008, and the balance of the loan was to be treated as a profit distribution to Mr. Yuan going forward.  As a result of our reverse acquisition of Touchstone and our status as a public company, we intend to enter into a formal agreement with Mr. Yuan with respect to the settlement of the loan.  Following the registration of our securities, we will comply with the prohibition on personal loans, directly or indirectly, including through any subsidiary, to extend or maintain credit, to arrange for the extension of credit, or to renew an extension of credit, in the form of a personal loan to or for any of our directors or executive officers (or equivalent thereof).

•

On July 28, 2008, we entered into a stock purchase agreement among VT Financial Services, Inc. and Bay Peak LLC, pursuant to which, we issued and sold to Bay Peak LLC 39,190,574 shares of our common stock for a total purchase price of $47,812.50. The closing of the stock purchase agreement was conditioned upon, among other things, the execution of a settlement and release agreement and a shareholders’ rights agreement, and upon the preparation of a proxy statement calling a special shareholders meeting for approval of, among other things, a change of the Company’s domicile to Nevada and a 1-for-7 reverse split. As a result of the stock purchase transaction, we merged with and into Bay Peak 2 Acquisition Corp., a Nevada Corporation, which was formed solely for the purpose of acquiring our company and had no other business purpose, assets or operations, and changed our name from VT Financial Services, Inc., to Bay Peak 2 Acquisition Corp.

•

On July 28, 2008, we also entered into a shareholders’ rights agreement with VCC, Bay Peak and The Aviary, LLC, pursuant to which we agreed not to enter into certain material transactions without the approval of the shareholders party to the agreement and they agreed to a lockup of their shares.

•

On August 29, 2008, we entered into a settlement and release agreement with VCC, pursuant to which, we agreed to issue 2,000,000 shares of our common stock to VCC, prior to giving effect to the split, and to pay VCC $50,000, in exchange for VCC’s forgiveness certain liabilities held by us.  Each party also released the other of all claims arising from or related to the facts stated in the settlement agreement, other than rights and obligations arising out of the remaining agreements.  

•

Prior to December 24, 2008, we were a shell company and had no operations.  On December 24, 2008, we completed a reverse acquisition transaction through a share exchange with Touchstone Industry Group Limited, or Touchstone, whereby we issued to the shareholders of Touchstone, 101,101,853 shares of our common stock, par value $0.001, in exchange for all the issued and outstanding capital stock of Touchstone.  Touchstone thereby became our wholly owned subsidiary and its subsidiaries, Wellcare, ChuanRui Travel, Nanjing Qianjiu, Tianjin Longhai Longjia, Sky Travel, Tianjin Golden Dragon and Nanjing Feiyu, became our indirect subsidiaries.  As a result of the reverse acquisition transaction, on December 24, 2008, Cory Roberts resigned from all corporate offices and from our board of directors, and Xuetian Yuan, Jinwei Chen and Yuanyuan Song were appointed Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, respectively.  On same day, our board of directors appointed Xuetian Yuan, Jinwei Chen and Chen Feiyu to serve as members on the board of directors, with Xuetian Yuan serving as Chairman. In accordance with SFAS 141, we booked this merger using the recapitalization method which consolidated the Company with Touchstone and its subsidiaries, and treated the Company as a shell company at the time of the merger.  Since we were a shell company at the time of the merger while Touchstone had operations and was significantly larger than we were, under SFAS 141, Touchstone is considered to be the acquirer. As a condition to the closing of the reverse acquisition, we filed a certificate of amendment to our articles of incorporation with the Nevada Secretary of State on January 14, 2009, to change our name from Bay Peak 2 Acquisition Corp. to China Golden Dragon Travel Group.  

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•

On January 14, 2009, our principal shareholder, LiQiang Song, entered into an earn-in agreement with Xuetian Yuan and Jinwei Chen, our Chief Executive Officer and Chief Operating Officer, respectively, and the founders of our PRC operating subsidiaries, or the Founders, pursuant to which, upon the satisfaction of certain conditions, the Founders have the option to purchase up to an aggregate of 74,107,658 shares of our common stock owned Mr. Song, at a purchase price of $0.001 per share (the par value of our common stock); except that with respect to the shares eligible to be purchased relating to the satisfaction of condition (4), the purchase price is $0.001 per share, multiplied the number of such shares, plus $1,000.  Under the terms of the earn-in agreement, the Founders will have the right to purchase the shares as follows: (1) 25% of the shares within six months after the execution of the Share Exchange Agreement, provided that on or before that date, we have entered into a binding employment agreement with the Founders and the Founders are employed by us pursuant to that agreement on such date; (2) 25% of the shares after this registration statement on Form 10 has become effective; (3) 25% of the shares if we achieve not less than $5,400,000 in after-tax net income, as determined under United States generally accepted accounting principals, or US GAAP, for the year ended December 31, 2009; and (4) 25% of the shares if we achieve not less than $9,000,000 in pre-tax profits, as determined under US GAAP for the fiscal year ended December 31, 2009.  For purposes of determining whether or not the financial thresholds described above have been achieved, the purchase of the shares by the Founders or any other person designated by the Founders will not be deemed to be an expense, charge, or other deduction from our revenues even though US GAAP may require contrary treatment.  Each Founder may to purchase 25% of the total number of shares that he or she is eligible to purchase under the earn-in agreement upon the satisfaction of each condition described above. If the Founders purchase all 74,107,658 shares eligible for purchase under the earn-in agreement, the Founders will become our controlling shareholders.

•

Our subsidiaries, Nanjing Qianjiu, Tianjin Longhai Longjia, Sky  Travel and Tianjin Golden Dragon, lease space pursuant to respective lease agreements between each of them and certain of our employees, including Xuetian Yuan, our Chief Executive Officer and Jinwei Chen, our Director and Chief Operating Officer.  A detailed description of these lease arrangements are disclosed under the heading “Our Properties” elsewhere in this registration statement.

Except as set forth in our discussion above, none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

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Promoters and Certain Control Persons

We did not have any promoters at any time during the past five fiscal years.

Except as set forth in our discussion above, none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

Director Independence

None of our directors are independent under the independent director standard of the NASDAQ Global Market.

LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.  However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business.  We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results.

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY

AND RELATED STOCKHOLDER MATTERS

Market Information

There currently is no market for our common stock. We plan to list our common stock as soon as practicable. However, we cannot assure you that we will be able to meet the initial listing standards of any stock exchange, or that we will be able to maintain any such listing. Until our common stock is listed on an exchange, we expect that it would be eligible to be quoted in the over-the-counter bulletin board maintained by the Financial Industry Regulatory Authority (FINRA). In this venue, however, an investor may find it difficult to obtain accurate quotations as to the market value of the common stock and trading of our common stock may be extremely sporadic. For example, several days may pass before any shares may be traded. A more active market for the common stock may never develop. In addition, if we failed to meet the criteria set forth in SEC regulations, various req uirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling the common stock, which may further affect its liquidity and could make it more difficult for us to raise additional capital.

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Holders

On As of January 14, 2009, there were approximately 250 stockholders of record of our common stock. The number of record holders does not include persons who held our common stock in nominee or “street name” accounts through brokers.

Dividends

Prior to our reverse acquisition of Touchstone, Touchstone was a private company and dividends were controlled by and distributed to its shareholders.  Our board of directors will make any future decisions and has complete discretion on whether to pay dividends, subject to the approval of our shareholders.  Our board of directors has decided that it is in the best interest of the Company and of our shareholders to retain all profits going forward to further grow the business.  Accordingly, we do not intend to pay any dividends in the near future.  Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

Equity Compensation Plans

Under the Visitalk Plan, our shareholders were deemed to have approved an Equity Incentive Plan, or EIP, for our employees, non-employee directors and other service providers.  Of its authorized and unissued capital, our Board of Directors has reserved a total of 3,000,000 shares of our common stock for potential issuance under the EIP.  Any options to be granted under the EIP may be either “incentive stock options,” as defined in Section 422 of the Internal Revenue Code, or “nonqualified stock options,” or options not intended to be incentive stock options, at the discretion of the board of directors and as reflected in the terms of the written option agreement.  The option price shall not be less than 100% of the fair market value of the optioned common stock on the date the option is granted.  The option price shall not be less tha n 110% of the fair market value of the optioned common stock for an optionee holding at the time of grant, more than 10% of the total combined voting power of all classes of stock of the Company.  Options become exercisable based on the discretion of the board of directors and must be exercised within ten years of the date of grant.  To date no options have been granted under the EIP.  

RECENT SALES OF UNREGISTERED SECURITIES

On December 24, 2008, we completed a reverse acquisition transaction through a share exchange with Touchstone, whereby we issued to the shareholders of Touchstone, 101,101,853 shares of our common stock, par value $0.001, in exchange for all the issued and outstanding capital stock of Touchstone.  Touchstone thereby became our wholly owned subsidiary. The issuance of common stock was exempt from the registration requirements provided by Section 4(2) of the Securities Act for the offer and sale of securities not involving a public offering and Regulation D promulgated thereunder.  

In instances described above where we issued securities in reliance upon Regulation D, we relied upon Rule 506 of Regulation D of the Securities Act.  These stockholders who received the securities in such instances made representations that (a) the stockholder is acquiring the securities for his, her or its own account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, (b) the stockholder agrees not to sell or otherwise transfer the purchased shares unless they are registered under the Securities Act and any applicable state securities laws, or an exemption or exemptions from such registration are available, (c) the stockholder has knowledge and experience in financial and business matters such that he, she or it is cap able of evaluating the merits and risks of an investment in us, (d) the stockholder had access to all of our documents, records and books pertaining to the investment and was provided the opportunity to ask questions and receive answers regarding the terms and conditions of the offering and to obtain any additional information which we possessed or were able to acquire without unreasonable effort and expense, and (e) the stockholder has no need for the liquidity in its investment in us and could afford the complete loss of such investment.  Management made the determination that the investors in instances where we relied on Regulation D are Accredited Investors (as defined in Regulation D) based upon management’s inquiry into their sophistication and net worth.  In addition, there was no general solicitation or advertising for securities issued in reliance upon Regulation D.

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In instances described above where we indicate that we relied upon Section 4(2) of the Securities Act in issuing securities, our reliance was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there were only a limited number of offerees; (c) there were no subsequent or contemporaneous public offerings of the securities by us; (d) the securities were not broken down into smaller denominations; and (e) the negotiations for the sale of the stock took place directly between the offeree and us.

DESCRIPTION OF REGISTRANT’S SECURITIES TO BE REGISTERED

Common Stock

We are authorized to issue up to 190,000,000 shares of common stock, par value $0.001 per share and 10,000,000 shares of preferred stock, par value $0.001 per share.  As of January 14, 2009, we had a total of 108,095,641 shares of common stock outstanding and no shares of preferred stock outstanding.

Each outstanding share of common stock entitles the holder thereof to one vote per share on all matters.  Our bylaws provide that elections for directors shall be by a plurality of votes.  Stockholders do not have preemptive rights to purchase shares in any future issuance of our common stock.  Upon our liquidation, dissolution or winding up, and after payment of creditors and preferred stockholders, if any, our assets will be divided pro-rata on a share-for-share basis among the holders of the shares of common stock.

The holders of shares of our common stock are entitled to dividends out of funds legally available when and as declared by our board of directors.    Should we decide in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiaries and other holdings and investments.  In addition, our operating subsidiaries, from time to time, may be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions.  In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to receive, ratably, the net assets available to stockholders after payment of all creditors.

All of the issued and outstanding shares of our common stock are duly authorized, validly issued, fully paid and non-assessable.  To the extent that additional shares of our common stock are issued, the relative interests of existing stockholders will be diluted.

Preferred Stock

We are authorized to issue up to 10,000,000 shares of preferred stock, par value $0.001 per share, in one or more classes or series within a class as may be determined by our board of directors, who may establish, from time to time, the number of shares to be included in each class or series, may fix the designation, powers, preferences and rights of the shares of each such class or series and any qualifications, limitations or restrictions thereof.  Any preferred stock so issued by the board of directors may rank senior to the common stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up of us, or both.  Moreover, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, under certain circumstances, the issuance of preferred stock or the existence of the unissued pre ferred stock might tend to discourage or render more difficult a merger or other change of control.  As of January 14, 2009, no shares of our preferred stock are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1).  

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Warrants

As part of the implementation of Visitalk’s Chapter 11 reorganization plan, Visitalk issued six series of warrants, designated as Series A through F, together the Plan Warrants, to certain Visitalk creditors.  This issuance appears to have been exempt from federal and state securities registration requirements under Section 1145 of the Bankruptcy Code.  The Company issued them to VCC in accordance with the License Agreement described below.  VCC then distributed them to creditors and claimants of Visitalk.com.  The Plan Warrants have all been issued as “book entry” on the books of the Company, i.e., they are uncertificated.  The Plan Warrant holders have the right to request a certificate at any time for any warrant.  According to the Disclosure Statement, no such requests had been received.  Each series has 8,423,491 Plan W arrants issued and outstanding, equaling a total of 50,540,946 Plan Warrants.  Each Plan Warrant provides for the purchase of one share of common stock and may be called by the Company for a price of $.0001 per warrant at any time, subject to each Plan Warrant holder’s exercise rights within 20 days of notice of the Company’s intent to redeem the Plan Warrants.  

Under the Plan Warrant Agreement, the Company’s obligations relate to the actions of the warrant agent, which include certain periodic reporting obligations to the Plan Warrant holders and transfer agent responsibilities upon exercise of Plan Warrants.  The Company currently acts as the Warrant Agent.  The Company has the right to appoint an alternative warrant agent.  The Company is responsible for expenses incurred by the warrant agent (whether it acts as the warrant agent or appoints one), but Plan Warrant holders are required to pay for expenses relating to exercise and taxes relating to transfer or exercise of Plan Warrants.  If the Company were to appoint a warrant agent, the Company would be required to compensate it for all reasonable expenses and charges of any kind incurred in its performance of the Plan Warrant Agreement, and to indemnify it for all liability incurred under the Plan Warrant Agreement.  In addition, the Company must provide 20 days’ notice to the Plan Warrant holders of an intention to conduct a merger or other reorganization, which must set forth the facts to indicate the effect of the action (to the extent the effect may be known at the date of the notice) on the exercise price and the kind and amount of the shares or other property deliverable upon exercise of the Plan Warrants.  The Company must at all times keep reserved, and free from preemptive rights, the full number of shares that may be issued upon the exercise of outstanding Plan Warrants.

The Company may extend the expiration date of the Plan Warrants or reduce their exercise price on a temporary or permanent basis.  The six series of the Plan Warrants have a current expiration date of February 28, 2009.  Series A and B have an exercise price of $2.00, Series C and Series D have an exercise price of $3.00 and Series E and Series F have an exercise price of $4.00.  The Company has issued Plan Warrants in units, or Warrant Units, consisting of all six series.  The Plan Warrants are subject to a limitation on exercise such that Plan Warrant holders, together with their affiliates, may not exercise a number of Plan Warrants that would cause their share ownership of the Company to exceed 4.99% of the outstanding shares of the Company.

The Plan Warrant Agreement generally only terminates on the earlier of the expiration date of the Plan Warrants (February 28, 2009), or the earlier date by which all the Plan Warrants have been exercised or redeemed.

Anti-takeover Effects of Our Articles of Incorporation and By-laws

Our Articles of Incorporation and Bylaws contain certain provisions that may have anti-takeover effects, making it more difficult for or preventing a third party from acquiring control of the Company or changing our board of directors and management. Our Articles of Incorporation provide that our board of directors may issue, without further stockholder approval, up to 10,000,000 shares of preferred stock, par value $0.001 per share, in one or more classes or series within a class. No shares of preferred stock are currently outstanding. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of our outstanding voting stock. According to our Bylaws and Articles of Incorporation, neither the holders of our common stock nor the holders of our preferred stock have cumulative voting rights in the election of our directors. The combination of the present ownership by a few stockholders of a significant portion of our issued and outstanding capital stock and lack of cumulative voting makes it more difficult for other stockholders to replace our board of directors or for a third party to obtain control of the Company by replacing our board of directors.

Anti-takeover Effects of Nevada Law

Business Combinations

The "business combination" provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, or NRS, prohibit a Nevada corporation with at least 200 stockholders from engaging in various "combination" transactions with any interested stockholder: for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the board of directors prior to the date the interested stockholder obtained such status; or after the expiration of the three-year period, unless: the transaction is approved by the board of directors or a majority of the voting power held by disinterested stockholders, or if the consideration to be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share paid by the interested stockholder within the three years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, (b) the market value per share of common stock on the date of announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher, or (c) for holders of preferred stock, the highest liquidation value of the preferred stock, if it is higher.

A "combination" is defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, with an "interested stockholder" having: (a) an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation, or (c) 10% or more of the earning power or net income of the corporation.

In general, an "interested stockholder" is a person who, together with affiliates and associates, owns (or within three years, did own) 10% or more of a corporation’s voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.

Our Articles of Incorporation state that we have elected not to be governed by the "business combination" provisions, therefore such provisions currently do not apply to us.

Control Share Acquisitions

The "control share" provisions of Sections 78.378 to 78.3793, inclusive, of the NRS, which apply only to Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, and which conduct business directly or indirectly in Nevada, prohibit an acquirer, under certain circumstances, from voting its shares of a target corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target corporation’s disinterested stockholders. The statute specifies three thresholds: one-fifth or more but less than one-third, one-third but less than a majority, and a majority or more, of the outstanding voting power. Once an acquirer crosses one of the above thresholds, those shares in an offer or acquisition and acquired within 90 days thereof become "control shares" and such control shares are deprived of the right to vote until disinterested stockholders restore the right. These provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.

Our Articles of Incorporation state that we have elected not to be governed by these provisions, therefore, they currently do not apply to us.

Transfer Agent and Registrar

Prior to our reverse merger transaction we did not have an independent stock transfer agent.  However, we are in the process of retaining Securities Transfer Corporation as our independent transfer agent.  Their address is 2591 Dallas Parkway, Suite 102, Frisco Texas 75034, and their phone number is (469) 633-0101.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our bylaws provide for the indemnification of our present and prior directors and officers or any person who may have served at our request as a director or officer of another corporation in which we own shares of capital stock or of which we are a creditor, against expenses actually and necessarily incurred by them in connection with the defense of any actions, suits or proceedings in which they, or any of them, are made parties, or a party, by reason of being or having been director(s) or officer(s) of us or of such other corporation, in the absence of negligence or misconduct in the performance of their duties.  This indemnification policy could result in substantial expenditure by us, which we may be unable to recoup.

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Insofar as indemnification by us for liabilities arising under the Securities Exchange Act of 1934 may be permitted to our directors, officers and controlling persons pursuant to provisions of the Articles of Incorporation and Bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy and is, therefore, unenforceable.  In the event that a claim for indemnification by such director, officer or controlling person of us in the successful defense of any action, suit or proceeding is asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by us is against public policy as expr essed in the Act and will be governed by the final adjudication of such issue.

At the present time, there is no pending litigation or proceeding involving a director, officer, employee or other agent of ours in which indemnification would be required or permitted.  We are not aware of any threatened litigation or proceeding which may result in a claim for such indemnification.

FINANCIAL STATEMENTS

The financial statements required by this item begin on page F-1 hereof.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

Prior to the effective date of this registration statement, we were not an SEC reporting Company and did not report our financial statements.  However, in connection with our reverse merger transaction, our board of directors recommended and approved the appointment of the independent registered public accounting firm K.P. Cheng & Company of Hong Kong, or K.P. Cheng, as our independent auditor, for the fiscal years ended December 31, 2007 and 2006 and during the subsequent interim period through the date of this report.

During the fiscal years ended December 31, 2007 and 2006 and through the date hereof, neither us nor anyone acting on our behalf consulted K.P. Cheng with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us or oral advice was provided that K.P. Cheng concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement or reportable events set forth in Item 304 of Regulation S-K.

FINANCIAL STATEMENTS AND EXHIBITS

Financial Statements

Filed herewith are:

1.

Touchstone Industry Group Limited and Subsidiaries Consolidated Financial Statements (Unaudited) for the Nine months Ended September 30, 2008 and 2007; and

2.

Touchstone Industry Group Limited and Subsidiaries Consolidated Financial Statements for the Years Ended December 31, 2007 and 2006.

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Exhibits

2.1	Share Exchange Agreement, dated as of December 24, 2008, among the registrant, Touchstone Industry Group Limited and the shareholders of Touchstone Industry Group Limited.
2.2	Second Joint Plan of Reorganization, dated June 22, 2004.
3.1	Amended and Restated Articles of Incorporation, as filed with the Secretary of State of Nevada on January  14, 2009.
3.2	Amended and Restated Bylaws of the registrant, adopted January 14, 2009.
4.1	VT Video 2004 Equity Incentive Plan.
4.2	Plan Warrant Agreement of Visitalk Capital Corporation, effective as of June 22, 2004 .
10.1	Securities Purchase Agreement, dated October 30, 2008, by and between Touchstone Industry Group Limited and Bay Peak, LLC.
10.2	Earn-In Agreement, dated January 14, 2009, by and among Liqiang Song, Xuetian Yuan and Jinwei Chen.
10.3	Loan Agreement, dated July 3, 2008, by and between Tianjin Golden Dragon International Travel Service Co., Ltd. and Xuetian Yuan.
10.4	Credit Loan Agreement for Automobile Buyer, by and between Tianjin Golden Dragon International Travel Service Co., Ltd. and First Automobile Finance Co., Ltd.
10.5	Mortgage Contract for Automobile Credit, by and between Tianjin Golden Dragon International Travel Service Co., Ltd. and First Automobile Finance Co., Ltd.
10.6	Extension Agreement to Credit Loan Agreement for Automobile Buyer, by and between Tianjin Golden Dragon International Travel Service Co., Ltd. and First Automobile Finance Co., Ltd.
10.7	Form of Employment Agreement
14	Code of Ethics
21	List of Subsidiaries
23	Consent of Bernstein & Pinchuk LLP
24	Power of Attorney (included on the signature page of this registration statement)

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SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

GOLDEN DRAGON TRAVEL GROUP
By:	/s/ Xuetian Yuan
	Xuetian Yuan President and Chief Executive  Officer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.  Each person whose signature appears below constitutes and appoints Xuetian Yuan and Cory Roberts, and each of them individually, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing req uisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Signature	Title	Date
/s/ Xuetian Yuan Xuetian Yuan	Chairman, Chief Executive Officer and President (Principal Executive Officer)	January 21, 2009
/s/ Jinwei Chen Jinwei Chen	Executive Vice President, Chief Operating Officer	January 21, 2009
/s/Feiyu Chen Feiyu Chen	Director	January 21, 2009
/s/Yuanyuan Song Yuanyuan Song	Chief Executive Officer (Principal Financial and Accounting Officer)	January 21, 2009

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Touchstone Industry Group Limited
Consolidated Financial Statements
September 30, 2008 and 2007

TABLE OF CONTENTS
	Page
Consolidated Financial Statements
Consolidated Balance Sheets	F-2
Consolidated Statements of Operations and Comprehensive Income	F-3
Consolidated Statements of Cash Flows	F-4
Notes to the Consolidated Financial Statements	F-5	~ F-13

F-1

Touchstone Industry Group Limited
Consolidated Balance Sheets
	September 30, 2008	December 31, 2007
	USD	USD
	Unaudited
Assets
Current assets:
Cash and cash equivalents	4,339,925	549,707
Accounts receivable, net	902,998	1,270,034
Due from stockholders	1,201,973	2,148,702
Other receivables	306,528	117,827
Total current assets	6,751,424	4,086,270
Vehicles and office equipment, net	2,784,261	2,855,662
Other long-term assets	263,996	246,420
	9,799,681	7,188,352
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	583,390	603,361
Advances from customers	273,469	386,625
Accruals and other payables	238,642	245,046
Taxes payable	6,247,450	4,162,942
Current portion of long-term debt	363,141	648,272
Total current liabilities	7,706,092	6,046,246
Long-term debt, excluding current portion	- -	171,827
Stockholders’ equity:
Common stock ($1 par value; 50,000 shares
authorized, issued and outstanding as of
September 30, 2008)	50,000	- -
Members’ capital	- -	9,918
Additional paid-in capital	562,499	- -
Appropriated retained earnings	1,109,790	693,348
Accumulated other comprehensive income	371,300	267,013
Total stockholders’ equity	2,093,589	970,279
	9,799,681	7,188,352

See notes to the consolidated financial statements

F-2

     Touchstone Industry Group Limited
Consolidated Statements of Operations and Comprehensive Income

	Nine months ended September 30,
	2008		2007
	USD		USD
	Unaudited		Unaudited
Revenues	26,904,548		20,710,780
Cost of services	20,214,725		16,514,755
Gross margin	6,689,823		4,196,025
Operating expenses:
Selling expenses	247,092		201,438
General and administrative expenses	852,047		464,468
	1,099,139		665,906
Income from operations	5,590,684		3,530,119
Other income (expense):
Interest income	118		4,228
Interest expense	(38,232	)	(68,200	)
Other expenses	(14	)	(442	)
	(38,128	)	(64,414	)
Income before income tax expense	5,552,556		3,465,705
Income tax expense	1,388,139		1,143,683
Net income	4,164,417		2,322,022
Foreign currency translation gain	104,287		86,383
Comprehensive income	4,268,704		2,408,405

See notes to the consolidated financial statements

F-3

Touchstone Industry Group Limited
Consolidated Statements of Cash Flows
	Nine months ended September 30,
	2008		2007
	USD		USD
	Unaudited		Unaudited
Cash flows from operating activities
Net income	4,164,417		2,322,022
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation	270,072		271,793
Changes in operating assets and liabilities
Accounts receivable	441,861		(235,603	)
Other receivables	(174,089	)	968,161
Due from stockholder	1,062,105		- -
Accounts payable	(60,835	)	273,232
Advances from customers	(135,886	)	(159,637	)
Accruals and other payables	(37,286	)	85,031
Taxes payable	1,726,042		1,316,903
Net cash provided by operating activities	7,256,401		4,841,902
Cash flows from investing activities
Purchases of vehicles and office equipment	(4,470	)	(4,629	)
Cash flows from financing activities
Sales from common stock	50,000		- -
Payments of dividends to stockholders	(3,747,975	)	(2,089,820	)
Due to stockholder	- -		(416,765	)
Receipt from (distribution to) stockholders	567,318		(916,147	)
Repayments of borrowing	(497,701	)	(425,923	)
Net cash used in financing activities	(3,628,358	)	(3,848,655	)
Effect of exchange rate changes on cash	166,645		24,205
Net increase in cash and cash equivalents	3,790,218		1,012,823
Cash and cash equivalents at beginning of period	549,707		115,931
Cash and cash equivalents at end of period	4,339,925		1,128,754
Supplemental disclosure of cash flow information
Interest paid	38,934		64,991
Income taxes paid	- -		- -

See notes to the consolidated financial statements

F-4

Touchstone Industry Group Limited
Notes to the Consolidated Financial Statements

1.	Organization and principal activities
	Touchstone Industry Group Limited (“Touchstone”) was incorporated on January 20, 2008 in British Virgin Island (“BVI”). Touchstone itself has no significant business operations and assets other than holds equity interests in Tianjin Golden Dragon Sky Travel Services Co., Ltd, Tianjin Golden Dragon International Travel Services Co., Ltd. and Nanjing Feiyu Travel Services Co., Ltd. through a series of reorganization activities described below (the “Reorganization”).
	Tianjin Golden Dragon Sky Travel Services Co., Ltd. (“Sky Travel”), formerly known as Tianjin Jinshan Travel Services Co., Ltd., was established as a limited liability company in 2000 in Tianjin, the People’s Republic of China (the “PRC”). The registered capital is USD36,247. Sky Travel is principally engaged in the domestic travel services business, providing packaged tour services including tour planning, hotel reservations, transportation arrangement and tour guide services to inbound tourists.
	Tianjin Golden Dragon International Travel Services Co., Ltd. (“International Travel”) was established as a limited liability company in 1995 in Tianjin, PRC. The registered capital is USD2,356,068. International Travel is principally engaged in the international travel services business, providing outbound packaged tour services including tour planning, hotel reservations, transportation arrangement and tour guide services to tourists. International Travel also provides bus leasing services to required customers.
	Nanjing Feiyu Travel Services Co., Ltd. (“Nanjing Feiyu”) was established as a limited liability company in 2003 in Nanjing, Jiangsu Province, PRC. The registered capital is USD60,413. Nanjing Feiyu is principally engaged in the domestic travel services business, providing required tour services for the packaged tour subcontracted from other travel agencies.
	Prior to the Reorganization, International Travel and Sky Travel are 51% owned by Mr. Xuetian Yuan and 49% owned by Ms. Jinwei Chen respectively. Nanjing Feiyu is 60% owned by Ms. Wei Liu and 40% owned by Mr. Feiyu Chen respectively. The International Travel, Sky Travel, and Nanjing Feiyu are operating under common management.
	Upon the completion of the Reorganization in September 2008, Sky Travel, International Travel and Nanjing Feiyu are ultimately 100% owned by Touchstone through a series of shell companies.
	Touchstone and its fellow shell subsidiaries, International Travel, Sky Travel and Nanjing Feiyu are collectively referred to as the “Company”.

F-5

Touchstone Industry Group Limited
Notes to the Consolidated Financial Statements

2. Summary of significant accounting policies

(a)	Basis of presentation
	The accompanying consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-K and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and changes in financial position in conformity with accounting principles generally accepted in the United States of America (GAAP). The results of operations and cash flows for the nine months ended at September 30, 2008 are not necessarily indicative of the operating results and cash flows, which will be reported for the full fiscal year.
(b)	Foreign currency translation
	The functional currency of the Company is the Renminbi (“RMB’) as the PRC is the primary economic environment in which the Company operates.
	Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange differences are included in the determination of net income for the respective periods.
	For financial reporting purposes, the financial statements of the Company, which are prepared using RMB, are translated into the Company’s reporting currency, the United States Dollar (“USD”). The Company’s assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during the reporting period. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity.
	Since RMB is not a fully convertible currency, all foreign exchange transactions involving RMB must take place either through the People’s Bank of China (“PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for foreign exchange transactions are the rates of exchange quoted by the PBOC.
(c)	Use of estimates
	The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
(d)	Cash and cash equivalents
	Cash and cash equivalents represent cash on hand and deposits held at call with banks. The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.

F-6

Touchstone Industry Group Limited
Notes to the Consolidated Financial Statements

(e)	Accounts receivable
	Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of September 30, 2008 and December 31, 2007, no allowance for doubtful accounts was provided for.
(f)	Other receivables
	As needed for normal business purposes, the Company advances predetermined amounts based upon internal Company policy to certain employees and unrelated parties to ensure certain transactions to be performed in a timely manner. The Company has full oversight and control over the advanced accounts. As of September 30, 2008 and December 31, 2007, no allowance for doubtful accounts was provided for.
(g)	Long-lived assets
	Vehicles and office Equipment

Vehicles and office equipment are recorded at cost less accumulated depreciation. Depreciation is calculated on the straight-line method after taking into account their respective estimated residual values over the following estimated useful lives:

Vehicles Office equipment 10 years 5 years

	Depreciation expense is included in cost of services and general and administrative expenses.
	When vehicles and office equipment are retired or otherwise disposed of, resulting gain or loss is included in net income or loss in the year of disposition for the difference between the net book value and proceeds received thereon. Maintenance and repairs which do not improve or extent the expected useful lives of the assets are charged to expenses as incurred.
	Impairment of long-lived assets
	Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount of the asset and its fair value. There were no impairment losses in the nine months ended September 30, 2008 and the year ended December 31, 2007.
(h)	Statutory surplus reserve
	The Company is required to set aside 10% of its income after income taxes prepared in accordance with PRC accounting regulations to the statutory surplus reserve until the balance reaches 50% of the paid-in capital or registered capital, whether further appropriation will be at the directors’ recommendation.

F-7

Touchstone Industry Group Limited
Notes to the Consolidated Financial Statements

(i)	Revenue recognition
	The Company's revenue recognition policies are in compliance with Staff Accounting Bulletin No. 104, “Revenue Recognition”. Revenue from travel services is recognized at the date the price is fixed or determinable, the services are provided completely, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded as advances from customers.
(j)	Taxations
	(i)	Income tax
	The Company, being incorporated in the PRC, is governed by the income tax law of the PRC and is subject to PRC enterprise income tax. The applicable income tax rate for the Company was 33% for the year ended December 31, 2007. Beginning January 1, 2008, the new Chinese Enterprise Income Tax (“EIT”) law will replace the existing laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises (“FIEs”). The new standard EIT rate of 25% will replace the 33% rate currently applicable to both DES and FIEs.
	(ii)	Business tax and relevant surcharges
	Revenue derived from travelling services is subject to business tax at 5.5% of gross service income after deducting relevant costs. Revenue derived from bus leasing is subject to business tax at 3% of gross service income.
	(iii)	Deferred tax
	Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and any operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided to reduce the amount of deferred tax asset if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
(k)	Contingencies
	In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, product and environmental liability, and tax matters. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 5, “Accounting for Contingencies”, the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Historically, the Company has not experienced any material service liability claims.
(l)	Fair value of financial instruments
	The carrying amounts of cash and cash equivalents, accounts receivables from third and related parties, amounts due from and due to related parties, accounts payable, other payables and short-term borrowings approximate their fair values due to their short term nature.

F-8

Touchstone Industry Group Limited
Notes to the Consolidated Financial Statements

(l)	Fair value of financial instruments (continued)
	The fair value is estimated by discounting the future cash flow using an interest rate which approximated the rate for which the financial institution would charge borrowers with similar credit ratings and remaining maturities.
(m)	Recently issued accounting standards
	FASB Statement No. 160 (“SFAS No. 160”)
	In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements”. This Statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 is effective for the Company’s fiscal year beginning October 1, 2009. Management is currently evaluating the effect of this pronouncement on financial statements.
	FASB Statement No. 141 (“SFAS No. 141”)
	In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This Statement replaces SFAS No. 141, Business Combinations. This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This Statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) will apply prospectively to business combinations for which the acquisition date is on or after Company’s fiscal year beginning October 1, 2009. While the Company has not yet evaluated this statement for the impact, if any, that SFAS No. 141(R) will have on its consolidated financial statements, the Company will be required to expense costs related to any acquisitions after September 30, 2009.
	FASB Statement No. 161 (“SFAS No. 161”)
	On March 19, 2008, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities”. The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The new standard also improves transparency about the location and amounts of derivative instruments in an entity’s financial statements; how derivative instruments and related hedged items are accounted for under FASB Statement No. 133; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. FASB Statement No. 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity’s liquidity by requiring disclosure of derivative features that are credit risk–related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. Management is currently evaluating the effect of this pronouncement on financial statements.

F-9

Touchstone Industry Group Limited
Notes to the Consolidated Financial Statements

(m)

Segment reporting

The Company operates and manages its business as a single segment. As the Company generates all of its revenues from customers in the PRC, no geographical segments are presented.

3.

Significant risks

(a)	Revenue
	As the travel industry is highly sensitive to business and personal discretionary spending levels, it tends to decline during general economic downturns in the PRC. Although China is considered economically stable, it is possible that unanticipated events there or in foreign countries could disrupt the Company’s operation. In addition, other adverse trends or events, such as a recurrence of any serious contagious diseases, increased occurrence of travel-related accidents, outbreak of war, poor weather conditions or natural disasters etc., will tend to reduce travel and are likely to reduce the Company's revenues.
(b)	Credit risk
	Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, accounts receivables and other receivable. The Company places its cash and cash equivalents, amounted to USD4,339,925 and USD549,707 as at September 30, 2008 and December 31, 2007, respectively with financial institutions that management believes are of high-credit ratings and quality.
	The Company conducts credit evaluations of customers and generally does not require collateral or other security from its customers. The Company establishes an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers.
(c)	Foreign currency risk
	A majority of the Company’s sales and expenses transactions and a significant portion of the Company’s assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the PBOC. Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

4.

Due from stockholder

One of the Company’s stockholders had advanced USD1,201,973 and USD2,148,702 from the Company as of September 30, 2008 and December 31, 2007 respectively. The cash advance was interest free, had no fixed term of repayment and was unsecured. In October 2008, the stockholder repaid USD293,328 to the Company. For the remaining USD908,645, the Company entered into an agreement with the stockholder. Pursuant to the agreement, the remaining amount due from stockholder should be settled by the dividend to be apportioned to the stockholder by the end of 2008.

F-10

     Touchstone Industry Group Limited
Notes to the Consolidated Financial Statements

5.	Vehicles and office equipment
	Vehicles and office equipment consist of the following:

	September, 30	December 31,
	2008	2007
	USD	USD
	Unaudited
Vehicles	4,128,652	3,853,789
Office equipment	175,706	159,687
Total vehicles and office equipment	4,304,358	4,013,476
Less: accumulated depreciation	1,520,097	1,157,814
	2,784,261	2,855,662

	In August 2005, the vehicles, which amounted to USD2,292,020 were pledged as security to First Automobiles Financial Co., Ltd., an unrelated company, for providing a guarantee for the Company's long-term borrowing amounting to USD2,270,356. As at September 30, 2008 and December 31, 2007, the net book value of the pledged vehicles were USD1,873,641 and USD2,041,876 respectively.
6.	Other long-term assets
	Other long-term assets wholly represent the quality warranty funds deposited in local tourism administration according to relevant PRC regulations.
7.	Long-term borrowing

	September, 30	December 31,
	2008	2007
	USD	USD
	Unaudited
Current portion of long-term borrowing	363,141	648,272
Long-term borrowing	- -	171,827
	363,141	820,099

This borrowing is granted by First Automobiles Financial Co., Ltd., an unrelated party, for providing financial support to the Company's purchase of vehicles. Term of the loan is from August 29, 2005 to May 19, 2008, and the interest rate is 6.34% per annum. On January 11, 2007, an extension loan contract was signed and the final repayment date is changed to March 18, 2009 and the interest rate is changed to 7.13% per annum. The loan is secured by the vehicles described in note 5.

The fair value of the long-term loan approximates its carrying amount, as the impact of discounting is not significant. The fair value is based on cash flow discounted using a rate based on the borrowing rate of 7.29% and 7.56% for the nine months ended September 2008 and the year ended December 31, 2007 respectively.

F-11

Touchstone Industry Group Limited
Notes to the Consolidated Financial Statements

8.	Revenue and cost of services
		Nine months ended September 30,
		2008	2007
		USD	USD
		Unaudited	Unaudited
	Revenue
	- tourism services	26,322,515	20,005,796
	- rental services	582,033	704,984
		26,904,548	20,710,780
	Cost of services
	- tourism services	19,720,320	15,915,910
	- rental services	494,405	598,845
		20,214,725	16,514,755
	Gross profit
	- tourism services	6,602,195	4,089,886
	- rental services	87,628	106,139
		6,689,823	4,196,025
9.	Taxation
(a)	Taxes payable
		September 30,	December 31,
		2008	2007
		USD	USD
		Unaudited
	Income tax payable	5,234,238	3,542,301
	Business tax payable	959,444	592,525
	Other tax payable	53,768	28,116
		6,247,450	4,162,942

The Company has obtained special tax clearances from local tax authority of the PRC Government, confirming that the Company has already filed all the taxes for the operating period prior to December 31, 2004, therefore the Company’s stockholders considered that the Company does not have any potential tax liabilities before that date and have committed to bear all the tax liabilities if any occurs. However, as the tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises have completed their relevant tax filings, the Company’s tax filings since then may not be final. Therefore it is uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings for the period after December 31, 2004 which may lead to additional tax liabilities.

F-12

Touchstone Industry Group Limited
Notes to the Consolidated Financial Statements

The actual income tax expense is computed by applying the PRC statutory tax rate of 25% and 33% to income before income taxes as a result of the following:

	Nine months ended September 30,
	2008		2007
	USD		USD
	Unaudited		Unaudited
Income before income taxes	5,552,556		3,465,705
Effective tax rate	25	%	33	%
	1,388,139		1,143,683

(b)	Deferred tax
	As at September 30, 2008 and December 31, 2007, no provision for deferred taxation was recognized as there were no material temporary differences for tax purpose.

10.	Advertising
	The Company expenses all advertising costs as incurred. The advertising cost for the periods ended at September 2008 and 2007 were insignificant.
11.	Appropriated retained earnings

		2008	2007
		USD	USD
		Unaudited	Unaudited
	As at January 1	693,348	372,577
	Appropriation of retained earnings	416,442	232,202
	As at September 30	1,109,790	604,779
12.	Commitments and contingencies

(a)	Operating lease commitments
	As of September 30, 2008, the Company did not have any significant operating lease commitments.
(b)	Capital and other commitments
	As of September 30, 2008, the Company did not have any significant capital and other commitments, long-term obligations, or guarantees.

13.

Subsequent events

On December 24, 2008, Touchstone completed a reverse acquisition transaction through a share exchange with China Golden Dragon Travel Group ("Golden Dragon"), which was incorporated in Nevada and changed its name from Bay Peak 2 Acquisition Corp. on January 14, 2009, whereby Golden Dragon issued to the shareholders of Touchstone, 101,101,853 shares of its common stock, par value $0.001, in exchange for all the issued and outstanding capital stock of Touchstone. Touchstone thereby became Golden Dragon’s wholly owned subsidiary and its subsidiaries, Wellcare, ChuanRui Travel, Nanjing Qianjiu, Tianjin Longhai Longjia, Sky Travel, Tianjin Golden Dragon and Nanjing Feiyu, became Golden Dragon’s indirect subsidiaries.

F-13
 

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Financial Statements
December 31, 2007 and 2006

TABLE OF CONTENTS

	Page
Report of Independent Registered Public Accounting Firm	F-15
Financial Statements
Combined Balance Sheets	F-16
Combined Statements of Operations and Comprehensive Income	F-17
Combined Statements of Changes in Members' Equity	F-18
Combined Statements of Cash Flows	F-19
Notes to the Combined Financial Statements	F-20 ~ F-29

F-14

Report of Independent Registered Public Accounting Firm

To the Board of Directors and members of
Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd

We have audited the accompanying combined balance sheets of Tianjin Golden Dragon International Travel Service CO., Ltd, Tianjin Golden Dragon Sky Travel Service Co., Ltd and Nanjing Feiyu Travel Service Co., Ltd. (together referred to as "the Company") as of December 31, 2007 and 2006, and the related statements of operations and comprehensive income, members' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2007 and 2006, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/Bernstein & Pinchuk LLP

November 19, 2008

F-15

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Combined Balance Sheets

	December 31,
	2007	2006
	USD	USD
Assets
Current assets:
Cash and cash equivalents	549,707	115,931
Accounts receivable, net	1,270,034	1,214,191
Due from members – short term	2,148,702	-
Other receivables	117,827	1,082,496
Total current assets	4,086,270	2,412,618
Vehicles and office equipment, net	2,855,662	3,004,884
Due from member-long term	-	2,009,990
Other long-term assets	246,420	230,512
	7,188,352	7,658,004
Liabilities and Members' Equity
Current liabilities:
Accounts payable	603,361	508,926
Advances from customers	386,625	687,789
Accruals and other payables	245,046	115,823
Taxes payable	4,162,942	2,087,713
Due to member	-	408,815
Current portion of long-term debt	648,272	925,522
Total current liabilities	6,046,246	4,734,588
Long-term debt, excluding current portion	171,827	403,492
Members' equity:
Members' capital	9,918	1,996,747
Appropriated retained earnings	693,348	372,577
Accumulated other comprehensive income	267,013	150,600
Total members' equity	970,279	2,519,924
	7,188,352	7,658,004

See notes to the combined financial statements

F-16

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Combined Statements of Operations and Comprehensive Income

	Year ended December 31,
	2007	2006
	USD	USD
Revenues	26,763,814	21,914,567
Cost of services	21,285,346	17,364,106
Gross margin	5,478,468	4,550,461
Operating expenses:
Selling expenses	254,127	283,113
General and administrative expenses	686,763	737,447
	940,890	1,020,560
Income from operations	4,537,578	3,529,901
Other income (expense):
Interest income	5,071	6,941
Interest expense	(87,229)	(116,431)
Other income	333,305	198,214
Other expenses	(1,096)	(3,337)
	250,051	85,387
Income before income tax expense	4,787,629	3,615,288
Income tax expense	1,579,917	1,193,045
Net income	3,207,712	2,422,243
Foreign currency translation gain	116,413	84,569
Comprehensive income	3,324,125	2,506,812

See notes to the combined financial statements

F-17

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Combined Statements of Changes in Members’ Equity
Years ended December 31, 2007 and 2006

	Members'	Appropriated	Unappropriated	Accumulated other	Total members'
	capital	retained earnings	retained earnings	comprehensive income	equity
	USD	USD	USD	USD	USD
Balance at January 1, 2006	2,418,788	130,353	-	66,031	2,615,172
Net income	-	-	2,422,243	-	2,422,243
Dividends declared	-	-	(2,180,019)	-	(2,180,019)
Distribution to members	(422,041)	-	-	-	(422,041)
Statutory surplus reserve appropriated	-	242,224	(242,224)	-	-
Foreign currency translation adjustment	-	-	-	84,569	84,569
Balance at December 31, 2006	1,996,747	372,577	-	150,600	2,519,924
Net income	-	-	3,207,712	-	3,207,712
Dividends declared	-	-	(2,886,941)	-	(2,886,941)
Distribution to members	(1,986,829)	-	-	-	(1,986,829)
Statutory surplus reserve appropriated	-	320,771	(320,771)	-	-
Foreign currency translation adjustment	-	-	-	116,413	116,413
Balance at December 31, 2007	9,918	693,348	-	267,013	970,279

See notes to the combined financial statements

F-18

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Combined Statements of Cash Flows

	Year ended December 31,
	2007	2006
	USD	USD
Cash flows from operating activities
Net income	3,207,712	2,422,243
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation	365,124	348,222
Changes in operating assets and liabilities
Accounts receivable	27,017	(215,508)
Other receivables	1,004,704	(1,011,064)
Accounts payable	57,336	319,504
Advances from customers	(337,001)	444,421
Notes payable	-	(133,763)
Accrual and other payables	117,186	70,777
Taxes payable	1,866,739	1,425,576
Net cash provided by operating activities	6,308,817	3,670,408
Cash flows from investing activities
Purchases of vehicles and office equipment	(20,424)	(32,943)
Cash flows from financing activities
Payments of dividends to members	(2,886,941)	(2,180,019)
Due to a member	(422,451)	(236,291)
Distribution to members	(1,986,829)	(422,041)
Repayments of long-term debt	(580,598)	(854,282)
Net cash used in financing activities	(5,876,819)	(3,692,633)
Effect of exchange rate changes on cash	22,202	4,652
Net increase (decrease) in cash and cash equivalents	433,776	(50,516)
Cash and cash equivalents at beginning of year	115,931	166,447
Cash and cash equivalents at end of year	549,707	115,931
Supplemental disclosure of cash flow information
Interest paid	87,229	116,431
Income taxes paid	400	167

See notes to the combined financial statements

F-19

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Notes to the Combined Financial Statements

1.	Organization and principal activities
	The accompanying financial statements include the accounts of the following:
	Tianjin Golden Dragon International Travel Services Co., Ltd. (the “International Travel”) was established as a limited liability company in 1995 in Tianjin, the People’s Republic of China (the “PRC”). The registered capital is USD2,356,068. International Travel is principally engaged in the international travel services business, providing outbound packaged tour services including tour planning, hotel reservations, transportation arrangement and tour guide services to tourists. International Travel also provides bus leasing services to required customers.
	Tianjin Golden Dragon Sky Travel Services Co., Ltd. (the “Sky Travel”), formerly known as Tianjin Jinshan Travel Services Co., Ltd., was established as a limited liability company in 2000 in Tianjin, PRC. The registered capital is USD36,247. Sky Travel is principally engaged in the domestic travel services business, providing packaged tour services including tour planning, hotel reservations, transportation arrangement and tour guide services to inbound tourists.
	Nanjing Feiyu Travel Services Co., Ltd. (the “Nanjing Feiyu”) was established as a limited liability company in 2003 in Nanjing, Jiangsu Province, PRC. The registered capital is USD60,413. Nanjing Feiyu is principally engaged in the domestic travel services business, providing required tour services for the packaged tour subcontracted from other travel agencies.
	International Travel and Sky Travel are 51% owned by Mr. Xuetian Yuan and 49% owned by Ms. Jinwei Chen respectively. Nanjing Feiyu is 60% owned by Ms. Wei Liu and 40% owned by Mr. Feiyu Chen respectively.
	The International Travel, Sky Travel, and Nanjing Feiyu are operating under common management.
	International Travel, Sky Travel and Nanjing Feiyu are collectively referred to as the “Company” .
2.	Summary of significant accounting policies

(a)	Basis of presentation
	The accompanying combined financial statements have been presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Combined financial statements include the accounts of the Company. All significant intercompany balances and transactions have been eliminated.

F-20

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Notes to the Combined Financial Statements

(b)	Business combinations under common control
	Business combinations under common control are accounted for in accordance with the accounting principles applicable to business combinations. In applying these principles, the financial information incorporate the financial statement items of the combining entities or business in which the common control combination occurs as if they had been combined from the date when the combining entities or business first came under the control of the controlling party.
	According to ARB No. 51, the financial statements of all three companies are combined because of common management.
	The net assets of the combining entities or businesses are combined using the existing carrying values prior to the common control combination from the controlling parties’ perspective. No amount is recognized in respect of goodwill or excess of acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of common control combination, to the extent of the continuation of the controlling parties’ interest.
	The combined income statements include the results of each of the combining entities since January 1, 2004 which is the date the entities first operated under common management.
	The comparative amounts in the combined financial information are presented as if the entities had been combined at the previous balance sheet date or when they first came under common control, whichever is the shorter.
(c)	Foreign currency transaction
	The functional currency of the Company is the Renminbi (“RMB’) as the PRC is the primary economic environment in which the Company operates.
	Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange differences are included in the determination of net income for the respective periods.
	For financial reporting purposes, the financial statements of the Company, which are prepared using the RMB, are translated into the Company’s reporting currency, the United States Dollar (“USD”). The Company’s assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during the reporting period. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in members’ equity.
	Since the RMB is not a fully convertible currency, all foreign exchange transactions involving RMB must take place either through the People’s Bank of China (“PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for foreign exchange transactions are the rates of exchange quoted by the PBOC.

F-21

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Notes to the Combined Financial Statements

(d)	Use of estimation
	The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
(e)	Cash and cash equivalents
	Cash and cash equivalents represent cash on hand and deposits held at call with banks. The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.
(f)	Accounts receivable
	Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of December 31, 2007 and 2006, no allowance for doubtful accounts was provided for.
(g)	Other receivables
	As needed for normal business purposes, the Company advances predetermined amounts based upon internal Company policy to certain employees and unrelated parties to ensure certain transactions to be performed in a timely manner. The Company has full oversight and control over the advanced accounts. As of December 31, 2007 and 2006, no allowance for doubtful accounts was provided for.
(h)	Long-lived assets
	Vehicles and office Equipment

Vehicles and office equipment are recorded at cost less accumulated depreciation. Depreciation is calculated on the straight-line method after taking into account their respective estimated residual values over the following estimated useful lives:

Vehicles	10 years
Office equipment	5 years

Depreciation expense is included in cost of services and general and administrative expenses.

When vehicles and office equipment are retired or otherwise disposed of, resulting gain or loss is included in net income or loss in the year of disposition for the difference between the net book value and proceeds received thereon. Maintenance and repairs which do not improve or extent the expected useful lives of the assets are charged to expenses as incurred.

F-22

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Notes to the Combined Financial Statements

Impairment of long-lived assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount of the asset and its fair value. There were no impairment losses in the years ended December 31, 2007 and 2006.

(i)	Statutory surplus reserve
	The Company is required to set aside 10% of its income after income taxes prepared in accordance with PRC accounting regulations to the statutory surplus reserve until the balance reaches 50% of the paid up capital or registered capital, whether further appropriation will be at the directors’ recommendation.
(j)	Revenue recognition
	The Company's revenue recognition policies are in compliance with Staff Accounting Bulletin No. 104, “Revenue Recognition”. Revenue from travel services is recognized at the date the price is fixed or determinable, the services are provided completely, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded as advances from customers.
(k)	Taxations
	(i)	Income tax
	The Company, being incorporated in the PRC, is governed by the income tax law of the PRC and is subject to PRC enterprise income tax. The applicable income tax rates for the Company were 33% for the years ended December 31, 2007 and 2006. Beginning January 1, 2008, the new Chinese Enterprise Income Tax (“EIT”) law will replace the existing laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises (“FIEs”). The new standard EIT rate of 25% will replace the 33% rate currently applicable to both DES and FIEs.
	(ii)	Business tax and relevant surcharges
	Revenue derived from travelling services is subject to business tax at 5.5% of gross service income after deducting relevant costs. Revenue derived from bus leasing is subject to business tax at 3% of gross service income.
	(iii)	Deferred tax
	Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and any operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided to reduce the amount of deferred tax asset if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

F-23

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Notes to the Combined Financial Statements

(l)	Commitments and contingencies
	In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, product and environmental liability, and tax matters. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 5, “Accounting for Contingencies”, the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Historically, the Company has not experienced any material service liability claims.
(m)	Fair value of financial instruments
	The carrying amounts of cash and cash equivalents, accounts receivables from third and related parties, amounts due from and due to related parties, accounts payable, other payables and short-term borrowings approximate their fair values due to their short term nature.
	The fair value are estimated by discounting the future cash flow using an interest rate which approximated the rate for which the financial institution would charge borrowers with similar credit ratings and remaining maturities.
(n)	Recently issued accounting standards
	Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”)
	In June 2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109, which clarifies the accounting for uncertainty in tax positions. This interpretation requires that an entity recognizes in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. The initial adoption of FIN 48 on January 1, 2007 did not have any impact on the Company's financial position or results of operations. The Company has no material unrecognized tax benefit which would favourably affect the effective income tax rate in future periods. The Company has elected to classify interest and penalties related to an uncertain tax position, if and when required, as part of income tax expense in the combined statements of operations and comprehensive income.
	FASB Statement No. 157 (“SFAS No. 157”)
	In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, provides a framework for measuring fair value, and expands the disclosures required for fair value measurements. SFAS No. 157 does not require any new fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Although management will continue to evaluate the application of SFAS No. 157, management does not currently believe the adoption of SFAS No. 157 will have a material impact on the Company’s results of operations or financial position.
	FASB statement No. 159 (“SFAS No. 159”)
	In February 2007, the FASB issued SFAS No. 159, Fair Value Option for Financial Assets and Financial Liabilities. SFAS 159 permits companies to measure certain financial instruments and certain other items at fair value. The standard requires that unrealized gains and losses on items for which the fair value option has been elected to be reported in earnings. SFAS No. 159 is effective for the Company on January 1, 2008, although earlier adoption is permitted. Although management will continue to evaluate the application of SFAS No. 159, management does not currently believe the adoption of SFAS No. 159 will have a material impact on the Company’s results of operations or financial position.

F-24

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Notes to the Combined Financial Statements

(o)

Segment reporting

The Company operates and manages its business as a single segment. As the Company generates all of its revenues from customers in the PRC, no geographical segments are presented.

3.

Significant risks

(a)	Revenue
	As the travel industry is highly sensitive to business and personal discretionary spending levels, it tends to decline during general economic downturns in the PRC. Although China is considered economically stable, it is possible that unanticipated events there or in foreign countries could disrupt the Company’s operation. In addition, other adverse trends or events, such as a recurrence of any serious contagious diseases, increased occurrence of travel-related accidents, outbreak of war, poor weather conditions or natural disasters etc., will tend to reduce travel and are likely to reduce the Company's revenues.
(b)	Credit risk
	Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, accounts receivables and other receivable. The Company places its cash and cash equivalents, amounted to USD549,707 and USD115,931 as at December 31, 2007 and 2006, with financial institutions that management believes are of high-credit ratings and quality.
	The Company conducts credit evaluations of customers and generally does not require collateral or other security from its customers. The Company establishes an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers.
(c)	Foreign currency risk
	A majority of the Company’s sales and expenses transactions and a significant portion of the Company’s assets and liabilities are denominated in Renminbi (“RMB”). RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the PBOC. Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

4.

Due from member

One of the Company’s members had advanced USD2,148,702 and USD2,009,990 to the Company as of December 31, 2007 and 2006 respectively. The cash advance was interest free, had no fixed term of repayment and was unsecured. USD1,300,500 has been collected in September 2008. For the remaining USD848,202, the Company entered into an agreement with the member, in accordance with which it should be settled by the dividend to be apportioned to the member by the end of 2008.

F-25

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Notes to the Combined Financial Statements

5.	Vehicles and office equipment
	Vehicles and office equipment consist of the following:

	December 31,
	2007		2006
	USD		USD
Vehicles	3,853,789		3,605,003
Office equipment	159,687		129,613
Total vehicles and office equipment	4,013,476		3,734,616
Less: accumulated depreciation	(1,157,814	)	(729,732	)
Total vehicles and office equipment, net	2,855,662		3,004,884

	In August 2005, the vehicles amounted to USD2,292,020 were pledged as security to First Automobiles Financial Co., Ltd., an unrelated company, for providing guarantee for the Company's long-term debt amounted to USD2,270,356. As at December 31, 2007 and 2006, the net book value of the pledged vehicles were USD2,041,876 and USD2,140,847 respectively.
6.	Other long-term assets
	Other long-term assets wholly represent the quality warranty funds deposited in local tourism administration according to relevant PRC regulations.
7.	Amount due to member
	The balance wholly represented amount due to one of the members of Nanjing Feiyu, arising from the normal operating payment made on behalf of the Company. The balance was short term in nature, unsecured and non-interest bearing and was repaid in 2007.
8.	Long-term debt

	December 31,
	2007	2006
	USD	USD
Current portion	648,272	925,522
Long-term portion	171,827	403,492
	820,099	1,329,014

This debt is granted by First Automobiles Financial Co., Ltd., an unrelated party, for providing financial support to the Company's purchase of vehicles. Term of the loan is from August 29, 2005 to May 19, 2008, and the interest rate is 6.34% per annum. On January 11, 2007, an extension loan contract was signed and the final repayment date is changed to March 18, 2009 and the interest rate is changed to 7.13% per annum. The loan is secured by the vehicles as described in note 5.

The fair value of the long-term loan equals its carrying amount, as the impact of discounting is not significant. The fair value is based on cash flow discounted using a rate based on the borrowing rate of 7.02% and 6.3% for the year ended December 31, 2007 and 2006 respectively.

F-26

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Notes to the Combined Financial Statements

9.      Revenue and cost of services

	December 31,
	2007		2006
	USD		USD
Revenue
- - tourism services	25,811,011		21,002,270
- - rental services	952,803		912,297
	26,763,814		21,914,567
Cost of services
- - tourism services	(20,475,993	)	(16,582,056	)
- - rental services	(809,353	)	(782,050	)
	(21,285,346	)	(17,364,106	)
Gross margin
- - tourism services	5,335,018		4,420,214
- - rental services	143,450		130,247
	5,478,468		4,550,461

10.

Advertising

The Company expenses all advertising costs as incurred. The advertising cost for the years 2006 and 2007 was insignificant.

11.

Taxation

(a)

Taxes payable

	December 31,
	2007	2006
	USD	USD
Income tax payable	3,542,301	1,785,077
Business tax payable	592,525	288,510
Other tax payable	28,116	14,126
	4,162,942	2,087,713

The Company has obtained special tax clearances from local tax authority of the PRC Government, confirming that the Company has already filed all the taxes for the operating period prior to December 31, 2004, therefore the Company’s members considered that the Company does not have any potential tax liabilities before that date and have committed to bear all the tax liabilities if any occurs. However, as the tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises have completed their relevant tax filings, hence the Company’s tax filings since then may not be final. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings for the period after December 31, 2004 which may lead to additional tax liabilities.

F-27

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Notes to the Combined Financial Statements

The actual income tax expense is computed by applying the PRC statutory tax rate of 33% to income before income taxes as a result of the following:

	December 31,
	2007		2006
	USD		USD
Income before income taxes	4,787,629		3,615,288
Effective tax rate	33	%	33	%
	1,579,917		1,193,045

	On March 16, 2007, the PRC government enacted the new Enterprise Income Tax Law which imposes a single income tax rate of 25% for most domestic enterprises and foreign investment enterprises. The Enterprise Income Tax Law is effective as of January 1, 2008 and the applicable income tax rate of the Company will be 25%.
(b)	Deferred tax
	As at December 31, 2007 and 2006, no provision for deferred taxation was recognized as there was no material temporary difference for tax purpose.

12.	Statutory surplus reserve
		December 31,
		2007	2006
		USD	USD
	Statutory surplus reserve appropriation	320,771	242,224

	In accordance with the “Company Law of the PRC” and the Company’s Articles of Association, appropriations from net profit should be made to the statutory surplus reserve, after offsetting accumulated losses from prior years, and before profit distributions to the members. The percentages to be appropriated to the Reserve Fund are determined by the Board of Directors of the Company. The statutory surplus reserve can be used to offset accumulated losses or to increase capital.
13.	Distribution to members
	The balances represented members’ receivable, which the members did not intend to repay, with balances of USD 2,442,810 and USD 455,981 as of December 31, 2007 and 2006 respectively. The Company applied such receivable from the members to their capital accounts.
14.	Dividends

	December 31,
	2007	2006
	USD	USD
Dividends paid to members	2,886,941	2,180,019

F-28

Tianjin Golden Dragon International Travel Service Co., Ltd,
Tianjin Golden Dragon Sky Travel Service Co., Ltd and
Nanjing Feiyu Travel Service Co., Ltd
Notes to the Combined Financial Statements

15.

Commitments and contingencies

(a)	Operating lease commitments
	As of December 31, 2007, the Company did not have any significant operating lease commitments.
(b)	Capital and other commitments
	As of December 31, 2007, the Company did not have any significant capital and other commitments, long-term obligations, or guarantees.

16.

Subsequent events

	The following reorganization was carried out subsequent to December 31, 2007:
(a)	Sky Travel acquired 51% and 49% of the equity interest of International Travel from Mr. Xuetian Yuan and Ms. Jinwei Chen respectively on April 9, 2008.
(b)	International Travel acquired 30% of the equity interest of Nanjing Feiyu and Sky Travel acquired 70% of the equity interest of Nanjing Feiyu from Ms. Wei Liu and Mr. Feiyu Chen on May 19, 2008
(c)	51% and 49% of the equity interest of Sky Travel from Mr. Xuetian Yuan and Ms. Jinwei Chen respectively was acquired by Tianjin Longhai Longjia Enterprise Management and Consulting Co., Ltd.("Tianjin Longhai Longjia"), which was incorporated on July 3, 2008 under the laws of the PRC, with USD14,737 in registered capital, for the purpose of providing consulting services related to enterprise management, marketing, planning and investment and conferences, on July 9, 2008.

F-29

EXHIBIT INDEX

2.1	Share Exchange Agreement, dated as of December 24, 2008, among the registrant, Touchstone Industry Group Limited and the shareholders of Touchstone Industry Group Limited.
2.2	Second Joint Plan of Reorganization, dated June 22, 2004.
3.1	Amended and Restated Articles of Incorporation, as filed with the Secretary of State of Nevada on January  14, 2009.
3.2	Amended and Restated Bylaws of the registrant, adopted January 14, 2009.
4.1	VT Video 2004 Equity Incentive Plan.
4.2	Plan Warrant Agreement of Visitalk Capital Corporation, effective as of June 22, 2004.
10.1	Securities Purchase Agreement, dated October 30, 2008, by and between Touchstone Industry Group Limited and Bay Peak, LLC.
10.2	Earn-In Agreement, dated January 14, 2009, by and among Liqiang Song, Xuetian Yuan and Jinwei Chen.
10.3	Loan Agreement, dated July 3, 2008, by and between Tianjin Golden Dragon International Travel Service Co., Ltd. and Xuetian Yuan.
10.4	Credit Loan Agreement for Automobile Buyer, by and between Tianjin Golden Dragon International Travel Service Co., Ltd. and First Automobile Finance Co., Ltd.
10.5	Mortgage Contract for Automobile Credit, by and between Tianjin Golden Dragon International Travel Service Co., Ltd. and First Automobile Finance Co., Ltd.
10.6	Extension Agreement to Credit Loan Agreement for Automobile Buyer, by and between Tianjin Golden Dragon International Travel Service Co., Ltd. and First Automobile Finance Co., Ltd.
10.7	Form of Employment Agreement
14	Code of Ethics
21	List of Subsidiaries
23	Consent of Bernstein & Pinchuk LLP
24	Power of Attorney (included on the signature page of this registration statement)

- -44-

EX-2.1

Exhibit 2.1

SHARE EXCHANGE AGREEMENT

by and among

BAY PEAK 2 ACQUISITION CORP.

TOUCHSTONE INDUSTRY GROUP LIMITED

and

THE SHAREHOLDERS OF

TOUCHSTONE INDUSTRY GROUP LIMITED
NAMED HEREIN

Dated as of November 30, 2008

TABLE OF CONTENTS

ARTICLE I EXCHANGE OF SHARES		1
1.1.	Exchange by the Shareholders	1
1.2.	Closing	1
1.3.	Section 368 Reorganization	2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS		2
2.1.	Good Title	2
2.2.	Organization	2
2.3.	Power and Authority	2
2.4.	No Conflicts	2
2.5.	No Finder's Fee	3
2.6.	Purchase Entirely for Own Account	3
2.7.	Available Information	3
2.8.	Non-Registration	3
2.9.	Restricted Securities	3
2.10.	Legends	3
2.11.	Additional Legend; Consent	4
2.12.	Accredited Investor	4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF TIGL		4
3.1.	Organization, Standing and Power	4
3.2.	TIGL Subsidiaries; Equity Interests	4
3.3.	Capital Structure	5
3.4.	Authority; Execution and Delivery; Enforceability	5
3.5.	No Conflicts; Consents	5
3.6.	Taxes	6
3.7.	Benefit Plans	6
3.8.	Litigation	7
3.9.	Compliance with Applicable Laws	7
3.10.	Brokers	7
3.11.	Contracts	7
3.12.	Title to Properties	7
3.13.	Intellectual Property	8
3.14.	Labor Matters	8
3.15.	Financial Statements	8
3.16.	Insurance	8
3.17.	Transactions with Affiliates and Employees	8
3.18.	Solvency	9
3.19.	Application of Takeover Protections	9
3.20.	No Additional Agreements	9
3.21.	Investment Company	9
3.22.	Disclosure	9
3.23.	Absence of Certain Changes or Events	9
3.24.	No Undisclosed Events, Liabilities, Developments or Circumstances	10
3.25.	Foreign Corrupt Practices	11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BP2		11
4.1.	Organization, Standing and Power	11
4.2.	Subsidiaries; Equity Interests	11
4.3.	Capital Structure	11
4.4.	Authority; Execution and Delivery; Enforceability	12
4.5.	No Conflicts; Consents	12
4.6.	Undisclosed Liabilities	13
4.7.	Financial Statements	13
4.8.	Absence of Certain Changes or Events	13
4.9.	Taxes	14
4.10.	Absence of Changes in Benefit Plans	14
4.11.	ERISA Compliance; Excess Parachute Payments	15

i

TABLE OF CONTENTS

4.12.	Litigation	15
4.13.	Compliance with Applicable Laws	15
4.14.	Business Activities.	15
4.15.	Contracts	15
4.16.	Title to Properties	15
4.17.	Intellectual Property	16
4.18.	Employees/Labor Matters	16
4.19.	Transactions With Affiliates and Employees	16
4.20.	Solvency	16
4.21.	Application of Takeover Protections	17
4.22.	No Additional Agreements	17
4.23.	Investment Company	17
4.24.	Disclosure	17
4.25.	Certain Registration Matters	17
4.26.	No Undisclosed Events, Liabilities, Developments or Circumstances	17
4.27.	Foreign Corrupt Practices	18
4.28.	Formation related to a finalized Bankruptcy Plan	18
ARTICLE V DELIVERIES		18
5.1.	Deliveries of the Shareholders	18
5.2.	Deliveries of BP2	18
5.3.	Deliveries of TIGL	19
ARTICLE VI CONDITIONS TO CLOSING		20
6.1.	Shareholder and TIGL Conditions Precedent	20
6.2.	BP2 Conditions Precedent	20
ARTICLE VII COVENANTS		22
7.1.	Registration Under the Exchange Act; Listing	22
7.2.	Blue Sky Laws	22
7.3.	Public Announcements	22
7.4.	Fees and Expenses	22
7.5.	Continued Efforts	22
7.6.	Exclusivity	22
7.7.	Access	23
7.8.	Preservation of Business	23
7.9.	Amendment of BP2 Qualification Documents	23
7.10.	Indemnification and Insurance	23
7.11.	Preparation of Disclosure Letter	24
7.12.	Assumption of Securities Purchase Agreement	24
ARTICLE VIII MISCELLANEOUS		24
8.1.	Notices	24
8.2.	Amendments; Waivers; No Additional Consideration	25
8.3.	Termination	25
8.4.	Replacement of Securities	26
8.5.	Remedies	26
8.6.	Independent Nature of Shareholders' Obligations and Rights	26
8.7.	Limitation of Liability	26
8.8.	Interpretation	27
8.9.	Severability	27
8.10.	Counterparts; Facsimile Execution	27
8.11.	Entire Agreement; Third Party Beneficiaries	27
8.12.	Governing Law	27
8.13.	Assignment	27

Annex A

Schedule of Share Issuance

Annex B

Definitions

Schedule 1

Final Decree

 

ii

 

SHARE EXCHANGE AGREEMENT

This SHARE EXCHANGE AGREEMENT (this “Agreement”), dated as of November 30, 2008, is by and among Bay Peak 2 Acquisition Corp., a Nevada corporation (“BP2”), Touchstone Industry Group Limited, a British Virgin Islands company (“TIGL”), and the Persons identified on Annex A hereto (together referred to herein as the “Shareholders”, each a “Shareholder”).  Each of the parties to this Agreement is individually referred to herein as a “Party” and collectively, as the “Parties.”  Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed to them in Annex B hereto.

BACKGROUND

TIGL has 50,000 shares of capital stock (the “TIGL Stock”) issued and outstanding, all of which are held by the Shareholders.  Each Shareholder is the record and beneficial owner of the number of shares of TIGL Stock set forth opposite such Shareholder's name on Annex A hereto.  Each Shareholder has agreed to transfer all of his, her or its (hereinafter “its”) shares of TIGL Stock in exchange for a number of newly issued shares of the Common Stock, $.001 par value, of BP2 (the “BP2 Stock”) that will, in the aggregate, constitute 93.53% of the issued and outstanding capital stock of BP2, on a fully diluted basis, as of and immediately after the Closing.  The number of shares of BP2 Stock to be received by each Shareholder is listed opposite each such Shareholder's name on Annex A.  The aggregate number of shares of BP2 Stock that is reflected on Annex A is referred to herein as the “Shares
48;.  

The Board of Directors of each of BP2 and TIGL has determined that it is desirable to effect this plan of reorganization and share exchange.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I
Exchange of Shares

1.1.

Exchange by the Shareholders.  

At the Closing, each Shareholder shall sell, transfer, convey, assign and deliver to BP2 its TIGL Stock free and clear of all Liens in exchange for the BP2 Stock listed on Annex A opposite such Shareholder's name.

1.2.

Closing.  

The closing (the “Closing”) of the transactions contemplated hereby (the “Transactions”) shall take place at the offices of Pillsbury Winthrop Shaw Pittman LLP in San Francisco, CA commencing at 9:00 a.m. local time on the second business day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the Transactions (other than conditions with respect to actions that the respective parties will take at Closing) or such other date and time as the Parties may mutually determine (the “Closing Date”).

1.3.

Section 368 Reorganization.  

For U.S. federal income tax purposes, the Transactions are intended to constitute a “reorganization” within the meaning of Section 368(a)(1)(B) of the Code. The Parties to this Agreement hereby adopt this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) of the United States Treasury Regulations, and agree to file and retain such information as shall be required under Section 1.368-3T of the United States Treasury Regulations. Notwithstanding the foregoing or anything else to the contrary contained in this Agreement, the Parties acknowledge and agree that no Party is making any representation or warranty as to the qualification of the Transactions as a reorganization under Section 368 of the Code or as to the effect, if any, that any transaction consummated prior to, on or after the Closing Date has or may have on any such reorganization status. The Parties acknowledge and agree that each (a) has had the opportunity to obtain independent lega l and tax advice with respect to the Transactions and this Agreement, and (b) is responsible for paying its own Taxes, including without limitation, any adverse Tax consequences that may result if the transaction contemplated by this Agreement is determined not to qualify as a reorganization under Section 368 of the Code.

ARTICLE II
Representations and Warranties of the Shareholders

Each of the Shareholders hereby severally (and not jointly) represents and warrants to BP2 with respect to itself, as follows:.

2.1.

Good Title.  

The Shareholder is the record and beneficial owner, and has good title to its TIGL Stock, with the right and authority to sell and deliver such TIGL Stock.  Upon delivery of any certificate or certificates duly assigned, representing the same as herein contemplated and/or upon registering of BP2 as the new owner of such TIGL Stock in the share register of TIGL, BP2 will receive good title to such TIGL Stock, free and clear of all Liens.

2.2.

Organization.  

Each Shareholder that is an entity is duly organized and validly existing in its jurisdiction of organization.

2.3.

Power and Authority.  

Each Shareholder that is an entity has the legal power, capacity and authority to execute and deliver this Agreement and each Transaction Document to be delivered by it hereunder and to perform its obligations hereunder and thereunder, and to consummate the Transactions.  All acts required to be taken by the Shareholder to enter into this Agreement, to deliver each Transaction Document to which it is a party and to carry out the Transactions have been properly taken.  This Agreement constitutes a legal, valid and binding obligation of the Shareholder, enforceable against the Shareholder in accordance with the terms hereof.

2.4.

No Conflicts.  

The execution and delivery of this Agreement by the Shareholder and the performance by the Shareholder of its obligations hereunder in accordance with the terms hereof: (a) will not require the consent of any third party or Governmental Entity under any Laws; (b) will not violate any Laws applicable to the Shareholder and (c) will not violate or breach any contractual obligation to which the Shareholder is a party.

-2-

2.5.

No Finder's Fee.  

The Shareholder has not created any obligation for any finder's, investment banker's or broker's fee in connection with the Transactions.

2.6.

Purchase Entirely for Own Account.  

The BP2 Stock proposed to be acquired by the Shareholder hereunder will be acquired for investment for its own account, and not with a view to the resale or distribution of any part thereof, and the Shareholder has no present intention of selling or otherwise distributing the BP2 Stock, except in compliance with applicable securities laws.

2.7.

Available Information.  

The Shareholder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of investment in BP2.

2.8.

Non-Registration.  

The Shareholder understands that the BP2 Stock has not been registered under the Securities Act and, if issued in accordance with the provisions of this Agreement, will be issued by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Shareholder's representations as expressed herein.  The non-registration shall have no prejudice with respect to any rights, interests, benefits and entitlements attached to the BP2 Stock in accordance with BP2's charter documents or the laws of its jurisdiction of incorporation.

2.9.

Restricted Securities.  

The Shareholder understands that the Shares are characterized as “restricted securities” under the Securities Act inasmuch as this Agreement contemplates that, if acquired by the Shareholder pursuant hereto, the Shares would be acquired in a transaction not involving a public offering. The issuance of the Shares hereunder have not been registered under the Securities Act or the securities laws of any state of the U.S. and that the issuance of the BP2 Stock is being effected in reliance upon an exemption from registration afforded under Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering. The Shareholder further acknowledges that if the Shares are issued to the Shareholder in accordance with the provisions of this Agreement, such Shares may not be resold without registration under the Securities Act or the existence of an exemption therefrom.  The Shareholder represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

2.10.

Legends.  

 The Shareholder hereby agrees with BP2 that the BP2 Stock will bear the following legend or one that is substantially similar to the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

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2.11.

Additional Legend; Consent.

Additionally, the BP2 Stock will bear any legend required by the “blue sky” laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended. The Shareholder consents to BP2 making a notation on its records or giving instructions to any transfer agent of BP2 Stock in order to implement the restrictions on transfer of the Shares.

2.12.

Accredited Investor.  

The Shareholder is an “accredited Investor” within the meaning of Rule 501 under the Securities Act and the Shareholder was not organized for the specific purpose of acquiring the Shares.

ARTICLE III
Representations and Warranties of TIGL

Subject to the exceptions set forth in the TIGL Disclosure Letter (regardless of whether or not the TIGL Disclosure Letter is referenced below with respect to any particular representation or warranty), TIGL represents and warrants as follows to BP2.

3.1.

Organization, Standing and Power.  

TIGL and each of its subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has the corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on TIGL, a material adverse effect on the ability of TIGL to perform its obligations under this Agreement or on the ability of TIGL to consummate the Transactions (a “TIGL Material Adverse Effect”).  TIGL and each of its subsidiaries is duly qualified to do business in each jurisdiction where the nature of its business or its ownership or leasing of its properties make such qualification necessary except where the failure to so qualify would not reasonably be expected to have a TIGL Material Adverse Effect.  TIGL has delivered to BP2 true and complete copies of the TIGL Constituent Instruments, and the comparable charter, organizational documents and other constituent instruments of each of its subsidiaries, in each case as amended through the date of this Agreement.

3.2.

TIGL Subsidiaries; Equity Interests.  

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(a)

The TIGL Disclosure Letter lists each subsidiary of TIGL and its jurisdiction of organization.  All the outstanding shares of capital stock or equity investments of each subsidiary have been validly issued and are fully paid and nonassessable and are as of the date of this Agreement owned by TIGL, by another subsidiary of TIGL or by TIGL and another subsidiary of TIGL, free and clear of all Liens.

(b)

Except for its interests in its subsidiaries, TIGL does not as of the date of this Agreement own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person.

3.3.

Capital Structure.  

The authorized capital stock of TIGL consists of 50,000 ordinary shares all of which are issued and outstanding.  Except as set forth above, no shares of capital stock or other voting securities of TIGL are issued, reserved for issuance or outstanding.  TIGL is the sole record and beneficial owner of all of the issued and outstanding capital stock of each of its subsidiaries.  All outstanding shares of the capital stock of TIGL and each of its subsidiaries are duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the applicable corporate laws of the British Virgin Islands, the TIGL Constituent Instruments or any Contract to which TIGL is a party or otherwise bound.  There are not any bonds, debentures, notes or other indebtedness of TIGL or any of its subsidiaries having the right to v ote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of TIGL Stock or the capital stock of any of its subsidiaries may vote (“Voting TIGL Debt”).  Except as set forth in the TIGL Disclosure Letter, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which TIGL or any of its subsidiaries is a party or by which any of them is bound (a) obligating TIGL or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, TIGL or any of its subsidiaries or any Voting TIGL Debt, (b) obligating TIGL or any of its subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of TIGL or of any of its subsidiaries.  As of the date of this Agreement, there are not any outstanding contractual obligations of TIGL to repurchase, redeem or otherwise acquire any shares of capital stock of TIGL.

3.4.

Authority; Execution and Delivery; Enforceability.  

TIGL has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the Transactions.  The execution and delivery by TIGL of this Agreement and the consummation by TIGL of the Transactions have been duly authorized and approved by the Board of Directors of TIGL and no other corporate proceedings on the part of TIGL are necessary to authorize this Agreement and the Transactions.  When executed and delivered, this Agreement will be enforceable against TIGL in accordance with its terms.

3.5.

No Conflicts; Consents.  

(a)

The execution and delivery by TIGL of this Agreement does not, and the consummation of the Transactions and compliance with the terms hereof will not, 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, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of TIGL or any of its subsidiaries under, any provision of (i) the TIGL Constituent Instruments or the comparable charter or organizational documents of any of its subsidiaries, (ii) any Contract to which TIGL or any of its subsidiaries is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 3.5(b), any material judgment, order or decree or material Law applicable to TIGL or any of its subsidiaries or their respective properties or assets, oth er than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a TIGL Material Adverse Effect.

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(b)

Except for any required filings under applicable “Blue Sky” or state securities commissions, no Consent of, or registration, declaration or filing with, or permit from, any Governmental Entity is required to be obtained or made by or with respect to TIGL or any of its subsidiaries in connection with the execution, delivery and performance of this Agreement or the consummation of the Transactions.

3.6.

Taxes.  

(a)

Each of TIGL and each of its subsidiaries has timely filed, or has caused to be timely filed on its behalf, all Tax Returns required to be filed by it, and all such Tax Returns are true, complete and accurate, except to the extent any failure to file or any inaccuracies in any filed Tax Returns, individually or in the aggregate, have not had and would not reasonably be expected to have a TIGL Material Adverse Effect.  All Taxes shown to be due on such Tax Returns, or otherwise owed, have been timely paid, except to the extent that any failure to pay, individually or in the aggregate, has not had and would not reasonably be expected to have a TIGL Material Adverse Effect.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of TIGL know of no basis for any such claim.

(b)

The TIGL Financial Statements reflect an adequate reserve for all Taxes payable by TIGL and its subsidiaries (in addition to any reserve for deferred Taxes to reflect timing differences between book and Tax items) for all Taxable periods and portions thereof through the date of such financial statements.  No deficiency with respect to any Taxes has been proposed, asserted or assessed against TIGL or any of its subsidiaries, and no requests for waivers of the time to assess any such Taxes are pending, except to the extent any such deficiency or request for waiver, individually or in the aggregate, has not had and would not reasonably be expected to have a TIGL Material Adverse Effect.

3.7.

Benefit Plans.  

(a)

Except as set forth in the TIGL Disclosure Letter, TIGL does not have or maintain any collective bargaining agreement or any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding) providing benefits to any current or former employee, officer or director of TIGL or any of its subsidiaries (collectively, “TIGL Benefit Plans”).  As of the date of this Agreement there are not any severance or termination agreements or arrangements between TIGL or any of its subsidiaries and any current or former employee, officer or director of TIGL or any of its subsidiaries, nor does TIGL or any of its subsidiaries have any general severance plan or policy.

(b)

Since December 31, 2007, there has not been any adoption or amendment in any material respect by TIGL or any of its subsidiaries of any TIGL Benefit Plan.

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3.8.

Litigation.  

There is no Action against or affecting TIGL or any of its subsidiaries or any of their respective properties which (a) adversely affects or challenges the legality, validity or enforceability of any of this Agreement or the Shares or (b) could, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a TIGL Material Adverse Effect.  Neither TIGL nor any of its subsidiaries, nor any director or officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a claim or violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.

3.9.

Compliance with Applicable Laws.  

TIGL and each of its subsidiaries have conducted their business and operations in compliance with all applicable Laws, including those relating to occupational health and safety and the environment, except for instances of noncompliance that, individually and in the aggregate, have not had and would not reasonably be expected to have a TIGL Material Adverse Effect.  TIGL has not received any written communication during the past two years from a Governmental Entity that alleges that TIGL is not in compliance in any material respect with any applicable Law.  This Section 3.9 does not relate to matters with respect to Taxes, which are the subject of Section 3.6.

3.10.

Brokers.  

Except as set forth in the TIGL Disclosure Letter, no broker, investment banker, financial advisor or other person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of TIGL or any of its subsidiaries.

3.11.

Contracts.  

Except as disclosed in the TIGL Disclosure Letter, there are no Contracts that are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of TIGL and its subsidiaries taken as a whole.  Neither TIGL nor any of its subsidiaries is in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in a TIGL Material Adverse Effect.

3.12.

Title to Properties.  

Except as set forth in the TIGL Disclosure Letter, neither TIGL nor any of its subsidiaries own any real property.  TIGL and each of its subsidiaries has sufficient title to, or valid leasehold interests in, all of its properties and assets used in the conduct of its businesses.  All such assets and properties, other than assets and properties in which TIGL or any of its subsidiaries has leasehold interests, are free and clear of all Liens other than those set forth in the TIGL Disclosure Letter and except for Liens that, in the aggregate, do not and will not materially interfere with the ability of TIGL and its subsidiaries to conduct business as currently conducted.

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3.13.

Intellectual Property.  

TIGL and each of its subsidiaries own, or are validly licensed or otherwise have the right to use, all Intellectual Property Rights which are material to the conduct of the business of TIGL and its subsidiaries taken as a whole.  The TIGL Disclosure Letter sets forth a description of all Intellectual Property Rights which are material to the conduct of the business of TIGL and its subsidiaries taken as a whole.  There are no claims pending or, to the knowledge of TIGL, threatened that TIGL or any of its subsidiaries is infringing or otherwise adversely affecting the rights of any person with regard to any Intellectual Property Right.  To the knowledge of TIGL, no person is infringing the rights of TIGL or any of its subsidiaries with respect to any Intellectual Property Right.

3.14.

Labor Matters.  

There are no collective bargaining or other labor union agreements to which TIGL or any of its subsidiaries is a party or by which any of them is bound.  No material labor dispute exists or, to the knowledge of TIGL, is imminent with respect to any of the employees of TIGL.

3.15.

Financial Statements.  

TIGL has delivered to BP2 its audited consolidated financial statements for the fiscal years ended December 31, 2007 and 2006 and its unaudited financial statements for the nine months ended September 30, 2008 and 2007 (collectively, the “TIGL Financial Statements”).  The TIGL Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods indicated.  The TIGL Financial Statements fairly present in all material respects the financial condition and operating results of TIGL, as of the dates, and for the periods, indicated therein.  TIGL does not have any material liabilities or obligations, contingent or otherwise, other than (a) liabilities incurred in the ordinary course of business subsequent to December 31, 2007, and (b) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting pr inciples to be reflected in the TIGL Financial Statements, which, in both cases, individually and in the aggregate, would not be reasonably expected to result in a TIGL Material Adverse Effect.

3.16.

Insurance.  

Except as set forth in the TIGL Disclosure Letter, TIGL and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which TIGL and its subsidiaries are engaged and in the geographic areas where they engage in such businesses.  TIGL has no reason to believe that it will not be able to renew its and its subsidiaries' existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business on terms consistent with market for TIGL's and such subsidiaries' respective lines of business.

3.17.

Transactions with Affiliates and Employees.  

Except as set forth in the TIGL Disclosure Letter and the TIGL Financial Statements, none of the officers or directors of TIGL and, to the knowledge of TIGL, none of the employees of TIGL is presently a party to any transaction with TIGL or any of its subsidiaries (other than for services as employees, officers and directors), including any Contract or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of TIGL, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

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3.18.

Solvency.  

Based on the financial condition of TIGL as of the Closing Date (and assuming that the Closing shall have occurred), (a) TIGL's fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of TIGL's existing debts and other liabilities (including known contingent liabilities) as they mature, (b) TIGL's assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by TIGL, and projected capital requirements and capital availability thereof, and (c) the current cash flow of TIGL, together with the proceeds TIGL would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid.  TIGL does not int end to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).

3.19.

Application of Takeover Protections.  

TIGL has taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the TIGL Constituent Instruments or the laws of its  jurisdiction of organization that is or could become applicable to the Shareholders as a result of the Shareholders and TIGL fulfilling their obligations or exercising their rights under this Agreement, including, without limitation, the issuance of the Shares and the Shareholders' ownership of the Shares.

3.20.

No Additional Agreements.  

Except as set forth in the TIGL Disclosure Letter, TIGL does not have any agreement or understanding with the Shareholders with respect to the Transactions other than as specified in this Agreement.

3.21.

Investment Company.  

TIGL is not, and is not an affiliate of, and immediately following the Closing will not have become, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

3.22.

Disclosure.  

All disclosure provided to BP2 regarding TIGL, its business and the Transactions, furnished by or on behalf of TIGL (including TIGL's representations and warranties set forth in this Agreement) is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

3.23.

Absence of Certain Changes or Events.  

Except as disclosed in the TIGL Financial Statements or in the TIGL Disclosure Letter, from December 31, 2007 to the date of this Agreement, TIGL has conducted its business only in the ordinary course, and during such period there has not been:

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(a)

any change in the assets, liabilities, financial condition or operating results of TIGL or any of its subsidiaries, except changes in the ordinary course of business that have not caused, in the aggregate, a TIGL Material Adverse Effect;

(b)

any damage, destruction or loss, whether or not covered by insurance, that would have a TIGL Material Adverse Effect;

(c)

any waiver or compromise by TIGL or any of its subsidiaries of a valuable right or of a material debt owed to it;

(d)

any satisfaction or discharge of any lien, claim, or encumbrance or payment of any obligation by TIGL or any of its subsidiaries, except in the ordinary course of business and the satisfaction or discharge of which would not have a TIGL Material Adverse Effect;

(e)

any material change to a material Contract by which TIGL or any of its subsidiaries or any of its respective assets is bound or subject;

(f)

any mortgage, pledge, transfer of a security interest in, or lien, created by TIGL or any of its subsidiaries, with respect to any of its material properties or assets, except liens for taxes not yet due or payable and liens that arise in the ordinary course of business and do not materially impair TIGL's or its subsidiaries' ownership or use of such property or assets;

(g)

any loans or guarantees made by TIGL or any of its subsidiaries to or for the benefit of its employees, officers or directors, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business;

(h)

any alteration of TIGL's method of accounting or the identity of its auditors;

(i)

any declaration or payment of dividend or distribution of cash or other property to the Shareholders or any purchase, redemption or agreements to purchase or redeem any TIGL Stock;

(j)

any issuance of equity securities to any officer, director or affiliate, except pursuant to existing TIGL stock option plans; or

(k)

any arrangement or commitment by TIGL or any of its subsidiaries to do any of the things described in this Section 3.23.

3.24.

No Undisclosed Events, Liabilities, Developments or Circumstances.  

No event, liability, development or circumstance has occurred or exists, or is contemplated to occur with respect to TIGL or any of its subsidiaries, or their respective businesses, properties, prospects, operations or financial condition, that would be required to be disclosed by TIGL under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by TIGL of its TIGL Stock and which has not been publicly announced.

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3.25.

Foreign Corrupt Practices.  

Neither TIGL, nor any of its subsidiaries, nor, to TIGL's knowledge, any director, officer, agent, employee or other person acting on behalf of TIGL or any of its subsidiaries has, in the course of its actions for, or on behalf of, TIGL (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (d) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

ARTICLE IV
Representations and Warranties of BP2

Subject to the exceptions set forth in the BP2 Disclosure Letter (regardless of whether or not the BP2 Disclosure Letter is referenced below with respect to any particular representation or warranty), BP2 represents and warrants as follows to the Shareholders and TIGL.

4.1.

Organization, Standing and Power.  

BP2 is duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on BP2, a material adverse effect on the ability of BP2 to perform its obligations under this Agreement or on the ability of BP2 to consummate the Transactions (a “BP2 Material Adverse Effect”).  BP2 is duly qualified to do business in each jurisdiction where the nature of its business or its ownership or leasing of its properties makes such qualification necessary and where the failure to so qualify wo uld reasonably be expected to have a BP2 Material Adverse Effect.  BP2 has delivered to TIGL true and complete copies of the BP2 Charter and the BP2 Bylaws.

4.2.

Subsidiaries; Equity Interests.  

BP2 does not own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person.

4.3.

Capital Structure.  

The authorized capital stock of BP2 consists of 190,000,000 shares of common stock, $.001 par value, and 10,000,000 shares of undesignated preferred stock, $.001 par value.  As of the date hereof (a) 6,993,788 shares of BP2's common stock are issued and outstanding, (b) no shares of preferred stock are issued and outstanding, and (c) no shares of BP2's common stock or preferred stock are held by BP2 in its treasury.  Except as set forth in the BP2 Disclosure Letter, no shares of capital stock or other voting securities of BP2 were issued, reserved for issuance or outstanding.  All outstanding shares of the capital stock of BP2 are, and all such shares that may be issued prior to the date hereof will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Nevada Revised Sta tutes, the BP2 Charter, the BP2 Bylaws or any Contract to which BP2 is a party or otherwise bound.  Except as set forth in the BP2 Disclosure Letter, there are not any bonds, debentures, notes or other indebtedness of BP2 having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of BP2's common stock may vote (“Voting BP2 Debt”).  Except as set forth in the BP2 Disclosure Letter, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which BP2 is a party or by which it is bound (a) obligating BP2 to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchang eable into any capital stock of or other equity interest in, BP2 or any Voting BP2 Debt, (b) obligating BP2 to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of BP2.  As of the date of this Agreement, there are not any outstanding contractual obligations of BP2 to repurchase, redeem or otherwise acquire any shares of capital stock of BP2.   Except as set forth in the BP2 Disclosure Letter, BP2 is not a party to any agreement granting any securityholder of BP2 the right to cause BP2 to register shares of the capital stock or other securities of BP2 held by such securityholder under the Securities Act.  The stockholder list provided to TIGL is a current stockholder list generated by its stock transfer agent, and such list accurately reflects all of the issued and outstanding shares of the BP2's common stock.

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4.4.

Authority; Execution and Delivery; Enforceability.  

The execution and delivery by BP2 of this Agreement and the consummation by BP2 of the Transactions have been duly authorized and approved by the Board of Directors of BP2 and the holders of a majority of its capital stock and no other corporate proceedings on the part of BP2 are necessary to authorize this Agreement and the Transactions.  This Agreement constitutes a legal, valid and binding obligation of BP2, enforceable against BP2 in accordance with the terms hereof.

4.5.

No Conflicts; Consents.  

(a)

The execution and delivery by BP2 of this Agreement does not, and the consummation of Transactions and compliance with the terms hereof will not, contravene, 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, cancellation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any person under, or result in the creation of any Lien upon any of the properties or assets of BP2 under, any provision of (i) the BP2 Charter or BP2 Bylaws, (ii) any material Contract to which BP2 is a party or by which any of its properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 4.5(b), any material Order or material Law applicable to BP2 or its properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the ag gregate, have not had and would not reasonably be expected to have a BP2 Material Adverse Effect.

(b)

No Consent of, or registration, declaration or filing with, or permit from, any Governmental Entity is required to be obtained or made by or with respect to BP2 in connection with the execution, delivery and performance of this Agreement or the consummation of the Transactions, other than filings under state “blue sky” laws, as may be required in connection with this Agreement and the Transactions.

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4.6.

Undisclosed Liabilities.  

BP2 has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by U.S. generally accepted accounting principles to be set forth on a balance sheet of BP2 or in the notes thereto.  The BP2 Disclosure Letter sets forth all financial and contractual obligations and liabilities (including any obligations to issue capital stock or other securities of BP2) due after the date hereof.  As of the date hereof, all liabilities of BP2 have been paid off and shall in no event remain liabilities of BP2, TIGL or the Shareholders following the Closing.

4.7.

Financial Statements.  

BP2 has delivered to TIGL and Shareholders its unaudited consolidated financial statements for period ending August 31, 2008 (the “BP2 Financial Statements”).  The BP2 Financial Statements fairly present in all material respects the financial condition and operating results of BP2, as of the dates, and for the periods, indicated therein.  BP2 does not have any material liabilities or obligations, contingent or otherwise, other than (a) liabilities incurred in the ordinary course of business subsequent to August 31, 2008, and (b) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in the BP2 Financial Statements, which, in both cases, individually and in the aggregate, would not be reasonably expected to result in a BP2 Material Adverse Effect.

4.8.

Absence of Certain Changes or Events.

 Except as disclosed in the most recent BP2 Financial Statements or the BP2 Disclosure Letter, from the date of the most recent unaudited financial statements of BP2 to the date of this Agreement, BP2 has conducted its business only in the ordinary course, and during such period there has not been:

(a)

any change in the assets, liabilities, financial condition or operating results of BP2 from that reflected in the BP2 Financial Statements, except changes in the ordinary course of business that have not caused, in the aggregate, a BP2 Material Adverse Effect;

(b)

any damage, destruction or loss, whether or not covered by insurance, that would have a BP2 Material Adverse Effect;

(c)

any waiver or compromise by BP2 of a valuable right or of a material debt owed to it;

(d)

any satisfaction or discharge of any lien, claim, or encumbrance or payment of any obligation by BP2, except in the ordinary course of business and the satisfaction or discharge of which would not have a BP2 Material Adverse Effect;

(e)

any material change to a material Contract by which BP2 or any of its assets is bound or subject;

(f)

any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder;

(g)

any resignation or termination of employment of any officer of BP2;

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(h)

any mortgage, pledge, transfer of a security interest in or lien created by BP2 with respect to any of its material properties or assets, except liens for taxes not yet due or payable and liens that arise in the ordinary course of business and that do not materially impair BP2's ownership or use of such property or assets;

(i)

any loans or guarantees made by BP2 to or for the benefit of its employees, officers or directors, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business;

(j)

any declaration, setting aside or payment or other distribution in respect of any of BP2's capital stock, or any direct or indirect redemption, purchase, or other acquisition of any of such stock by BP2;

(k)

any alteration of BP2's method of accounting or the identity of its auditors;

(l)

any issuance of equity securities to any officer, director or affiliate, except pursuant to existing BP2 stock option plans; or

(m)

any arrangement or commitment by BP2 to do any of the things described in this Section 4.8.

4.9.

Taxes.  

(a)

BP2 has timely filed, or has caused to be timely filed on its behalf, all Tax Returns required to be filed by it, and all such Tax Returns are true, complete and accurate, except to the extent any failure to file, any delinquency in filing or any inaccuracies in any filed Tax Returns, individually or in the aggregate, have not had and would not reasonably be expected to have a BP2 Material Adverse Effect.  All Taxes shown to be due on such Tax Returns, or otherwise owed, have been timely paid, except to the extent that any failure to pay, individually or in the aggregate, has not had and would not reasonably be expected to have a BP2 Material Adverse Effect.

(b)

The BP2 Financial Statements reflect an adequate reserve for all Taxes payable by BP2 (in addition to any reserve for deferred Taxes to reflect timing differences between book and Tax items) for all Taxable periods and portions thereof through the date of such financial statements.  No deficiency with respect to any Taxes has been proposed, asserted or assessed against BP2, and no requests for waivers of the time to assess any such Taxes are pending, except to the extent any such deficiency or request for waiver, individually or in the aggregate, has not had and would not reasonably be expected to have a BP2 Material Adverse Effect.

(c)

There are no Liens for Taxes (other than for current Taxes not yet due and payable) on the assets of BP2.  BP2 is not bound by any agreement with respect to Taxes.

4.10.

Absence of Changes in Benefit Plans.  

From the date of the BP2 Financial Statements to the date of this Agreement, there has not been any adoption or amendment in any material respect by BP2 of any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding) providing benefits to any current or former employee, officer or director of BP2 (collectively, “BP2 Benefit Plans”).  As of the date of this Agreement, there are not any employment, consulting, indemnification, severance or termination agreements or arrangements between BP2 and any current or former employee, officer or director of BP2, nor does BP2 have any general severance plan or policy.

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4.11.

ERISA Compliance; Excess Parachute Payments.  

BP2 does not, and since its inception never has, maintained or contributed to any “employee pension benefit plans” (as defined in Section 3(2) of ERISA), “employee welfare benefit plans” (as defined in Section 3(1) of ERISA) or any other BP2 Benefit Plan for the benefit of any current or former employees, consultants, officers or directors of BP2.

4.12.

Litigation.  

There is no Action against or affecting BP2 or any subsidiary or any of their respective properties which (a) adversely affects or challenges the legality, validity or enforceability of either of this Agreement or the Shares or (b) could, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a BP2 Material Adverse Effect.  Neither BP2 nor any subsidiary, nor any director or officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a claim or violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.

4.13.

Compliance with Applicable Laws.  

BP2 is in compliance with all applicable Laws, including those relating to occupational health and safety, the environment, export controls, trade sanctions and embargoes, except for instances of noncompliance that, individually and in the aggregate, have not had and would not reasonably be expected to have a BP2 Material Adverse Effect.  BP2 has not received any written communication during the past two years from a Governmental Entity that alleges that BP2 is not in compliance in any material respect with any applicable Law.  This Section 4.13 does not relate to matters with respect to Taxes, which are the subject of Section 4.9.

4.14.

Business Activities.  

BP2 has not conducted any business activities, either directly or indirectly, within any country that is on the U.S. Department of State's list of state sponsors of terrorism.

4.15.

Contracts.  

Except as set forth in the BP2 Disclosure Letter, there are no Contracts that are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of BP2 taken as a whole.  BP2 is not in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in a BP2 Material Adverse Effect.

4.16.

Title to Properties.  

BP2 has good title to, or valid leasehold interests in, all of its properties and assets used in the conduct of its businesses.  All such assets and properties, other than assets and properties in which BP2 has leasehold interests, are free and clear of all Liens, except for Liens that, in the aggregate, do not and will not materially interfere with the ability of BP2 to conduct business as currently conducted.  BP2 has complied in all material respects with the terms of all material leases to which it is a party and under which it is in occupancy, and all such leases are in full force and effect.  BP2 enjoys peaceful and undisturbed possession under all such material leases.

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4.17.

Intellectual Property.  

BP2 does not own, nor is validly licensed nor otherwise has the right to use, any Intellectual Property Rights.  No claims are pending or, to the knowledge of BP2, threatened that BP2 is infringing or otherwise adversely affecting the rights of any person with regard to any Intellectual Property Right.

4.18.

Employees/Labor Matters.  

(a)

There are no collective bargaining or other labor union agreements to which BP2 is a party or by which it is bound.  No material labor dispute exists or, to the knowledge of BP2, is imminent with respect to any of the employees of BP2.

(b)

 Set forth in the BP2 Disclosure Letter is a complete list of all stock option plans providing for the grant by BP2 of stock options to directors, officers, employees, consultants or other Persons.

(c)

Except as set forth in the BP2 Disclosure Letter, BP2 does not have any employee benefit plans or arrangements covering its present and former employees or providing benefits to such persons in respect of services provided to BP2.

(d)

Except as set forth in the BP2 Disclosure Letter, neither the consummation of the Transactions alone, nor in combination with another event, with respect to each director, officer, employee and consultant of BP2, will result in (a) any payment (including, without limitation, severance, unemployment compensation or bonus payments) becoming due from BP2, (b) any increase in the amount of compensation or benefits payable to any such individual or (c) any acceleration of the vesting or timing of payment of compensation payable to any such individual. No agreement, arrangement or other contract of BP2 provides benefits or payments contingent upon, triggered by, or increased as a result of a change in the ownership or effective control of BP2.

4.19.

Transactions With Affiliates and Employees.

 None of the officers or directors of BP2 and, to the knowledge of BP2, none of the employees of BP2 is presently a party to any transaction with BP2 or any subsidiary (other than for services as employees, officers and directors), including any Contract or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of BP2, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

4.20.

Solvency.

 Based on the financial condition of BP2 as of the Closing Date (and assuming that the Closing shall have occurred), (a) BP2's fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of BP2's existing debts and other liabilities (including known contingent liabilities) as they mature, (b) BP2's assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted, including its capital needs, taking into account the particular capital requirements of the business conducted by BP2, and projected capital requirements and capital availability thereof, and (c) the current cash flow of BP2, together with the proceeds BP2 would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid.  BP2 does not int end to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).

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4.21.

Application of Takeover Protections.

 BP2 has taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the BP2's charter documents or the laws of its state of incorporation that is or could become applicable to the Shareholders as a result of the Shareholders and BP2 fulfilling their obligations or exercising their rights under this Agreement, including, without limitation, the issuance of the Shares and the Shareholders' ownership of the Shares.

4.22.

No Additional Agreements.  

BP2 does not have any agreement or understanding with the Shareholders with respect to the Transactions other than as specified in this Agreement.

4.23.

Investment Company.  

BP2 is not, and is not an affiliate of, and immediately following the Closing will not have become, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

4.24.

Disclosure.  

All disclosure provided to the Shareholders regarding BP2, its business and the Transactions, furnished by or on behalf of BP2 (including BP2's representations and warranties set forth in this Agreement) is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

4.25.

Certain Registration Matters.  

Except as set forth in the BP2 Disclosure Letter, BP2 has not granted or agreed to grant to any person any rights (including “piggy-back” registration rights) to have any securities of BP2 registered with the SEC or any other governmental authority that have not been satisfied.

4.26.

No Undisclosed Events, Liabilities, Developments or Circumstances.  

No event, liability, development or circumstance has occurred or exists, or is contemplated to occur with respect to BP2, its subsidiaries or their respective businesses, properties, prospects, operations or financial condition, that would be required to be disclosed by BP2 under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by BP2 of its common stock and which has not been publicly announced.

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4.27.

Foreign Corrupt Practices.  

Neither BP2, nor to BP2's knowledge, any director, officer, agent, employee or other person acting on behalf of BP2 has, in the course of its actions for, or on behalf of, BP2 (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (d) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

4.28.

Formation related to a finalized Bankruptcy Plan.

 BP2 was originally incorporated with the name VT Financial Services Inc. (“VTF”).  VTF was formed as part of the implementation of a Chapter 11 reorganization plan (the “Visitalk Plan”) of Visitalk.com, Inc. (“Visitalk.com”). VTF was incorporated in Arizona on September 3, 2004 as a wholly owned subsidiary of Visitalk Capital Corporation (“VCC”). The Visitalk Plan was confirmed by the Bankruptcy Court and deemed effective on September 17, 2004. The Final Decree closing the Visitalk.com Chapter 11 case was entered by the Bankruptcy Court on July 28, 2006 and is attached as Schedule 1 (the “Final Decree”). With the entry of the Final Decree, VTF has no liabilities of any kind related to any Visitalk.com claimants or shareholders. The Visitalk Plan further authorized VCC to distribute 846,147 of VTF's shares held by VCC to 201 creditors of Visitalk.com.  In addition, the Visitalk Plan authorized the issu ance of newly designated warrants to purchase shares of VTF common stock, in various ratios in accordance with the Visitalk Plan, to 330 creditors and claimants of Visitalk.com.  The distribution of these securities under the Visitalk Plan was exempt from registration under the Securities Act of 1933, as authorized by Section 1145 of the Bankruptcy Code. VTF changed the state of incorporation from Arizona to Nevada and adopted a change of name to Bay Peak 2 Acquisition Corp. effective October 1, 2008.

ARTICLE V
Deliveries

5.1.

Deliveries of the Shareholders.  

(a)

Concurrently herewith each Shareholder is delivering to BP2 this Agreement executed by the Shareholder.

(b)

At or prior to the Closing, each Shareholder shall deliver to BP2:

(i)

certificate(s) representing its TIGL Stock; and

(ii)

an original duly executed instrument of transfer for transfer by the Shareholder of its TIGL Stock to BP2.

5.2.

Deliveries of BP2.  

(a)

Concurrently herewith, BP2 is delivering to the Shareholders and to TIGL a copy of this Agreement executed by BP2.

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(b)

At or prior to the Closing, BP2 shall deliver to TIGL:

(i)

a certificate from BP2, signed by its Secretary or Assistant Secretary, certifying that the attached copies of the BP2 Charter, BP2 Bylaws and resolutions of the stockholders and Board of Directors of BP2 approving this Agreement and the Transactions are all true, complete and correct and remain in full force and effect;

(ii)

a certificate of good standing of BP2 dated within five (5) business days of Closing issued by the Secretary of State of Nevada;

(iii)

a letter of resignation from each director and officer of BP2 resigning from their positions effective upon the Closing;  

(iv)

evidence of the election of Mr. Yuan XueTian, Mr. Chen FeiYu and Ms. Chen JinWei as directors of BP2, Mr. Yuan XueTian as the Chief Executive Officer of BP2, Mr. Song YuanYuan as the Chief Financial Officer of BP2, and such other executive officers designated by TIGL, effective as of the Closing;

(v)

such pay-off letters and releases relating to liabilities of BP2 as TIGL shall request, in form and substance satisfactory to TIGL;

(vi)

the results of UCC, judgment lien and tax lien searches with respect to BP2, the results of which indicate no liens on the assets of BP2;

(vii)

a duly executed release by the current directors, officers and certain stockholders of BP2 in favor of BP2, TIGL and the Shareholders, in form and substance satisfactory to TIGL; and

(viii)

an indemnity agreement, executed by Bay Peak for the benefit of BP2, TIGL and Shareholders, in the form and substance satisfactory to TIGL.

(c)

At or within 5 business days following the Closing, BP2 shall deliver to each Shareholder a certificate representing the Shares issued to such Shareholder as set forth on Annex A.

5.3.

Deliveries of TIGL.  

(a)

Concurrently herewith, TIGL is delivering to BP2 this Agreement executed by TIGL.

(b)

At or prior to the Closing, TIGL shall deliver to BP2 a certificate from TIGL, signed by its authorized officer certifying that the attached copies of the TIGL Constituent Instruments and resolutions of the Board of Directors of TIGL approving this Agreement and the Transactions are all true, complete and correct and remain in full force and effect.

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ARTICLE VI
Conditions to Closing

6.1.

Shareholder and TIGL Conditions Precedent.  

The obligations of the Shareholders and TIGL to enter into and complete the Closing are subject, at the option of the Shareholders and TIGL, to the fulfillment on or prior to the Closing Date of the following conditions:

(a)

Representations and Covenants.  The representations and warranties of BP2 contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date.  BP2 shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by BP2 on or prior to the Closing Date.  BP2 shall have delivered to the Shareholders and TIGL a certificate, dated the Closing Date, to the foregoing effect.

(b)

Litigation.  No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the Transactions or to seek damages or a discovery order in connection with such Transactions, or which has or may have, in the reasonable opinion of TIGL or the Shareholders, a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of BP2 or TIGL.

(c)

No Material Adverse Change.  There shall not have been any occurrence, event, incident, action, failure to act, or transaction since the BP2 Financial Statements which has had or is reasonably likely to cause a BP2 Material Adverse Effect.

(d)

Post-Closing Capitalization.  At, and immediately after, the Closing, the authorized capitalization, and the number of issued and outstanding shares of the capital stock of BP2, on a fully-diluted basis, as indicated on a schedule to be delivered by the Parties at or prior to the Closing, shall be acceptable to TIGL and the Shareholders.

(e)

Deliveries.  The deliveries specified in Section 5.2 shall have been made by BP2.  

(f)

Satisfactory Completion of Due Diligence.  TIGL and the Shareholders shall have completed  their legal, accounting and business due diligence of BP2 and the results thereof shall be satisfactory to TIGL and the Shareholders in their sole and absolute discretion.

(g)

Consents.  All material consents, waivers, approvals, authorizations or orders required to be obtained, and all filings required to be made, by BP2 for the authorization, execution and delivery of this Agreement and the consummation by it of the transactions contemplated by this Agreement, shall have been obtained and made by BP2, except where the failure to receive such consents, waivers, approvals, authorizations or orders or to make such filings would not have a material adverse effect on BP2, Shareholders or TIGL.

6.2.

BP2 Conditions Precedent.  

The obligations of BP2 to enter into and complete the Closing is subject, at the option of BP2, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by BP2 in writing.

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(a)

Representations and Covenants.  The representations and warranties of the Shareholders and TIGL contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date.  The Shareholders and TIGL shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by the Shareholder and TIGL on or prior to the Closing Date.  Each of TIGL and the Shareholders shall have delivered to BP2 a certificate, dated the Closing Date, to the foregoing effect.

(b)

Litigation.  No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the Transactions or to seek damages or a discovery order in connection with such Transactions, or which has or may have, in the reasonable opinion of BP2, a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of TIGL

(c)

No Material Adverse Change.  There shall not have been any occurrence, event, incident, action, failure to act, or transaction since December 31, 2007 which has had or is reasonably likely to cause a TIGL Material Adverse Effect.

(d)

Post-Closing Capitalization.  At, and immediately after, the Closing, the authorized capitalization, and the number of issued and outstanding shares of the capital stock of BP2, on a fully-diluted basis, as indicated on a schedule to be delivered by the Parties at or prior to the Closing, shall be acceptable to BP2.

(e)

Deliveries.  The deliveries specified in Section 5.1 and Section 5.3 shall have been made by the Shareholders and TIGL, respectively.  

(f)

Satisfactory Completion of Due Diligence.  BP2 shall have completed its legal, accounting and business due diligence of TIGL and the Shareholders and the results thereof shall be satisfactory to BP2 in its sole and absolute discretion.

(g)

Delivery of Audit  Report and  Financial  Statements.  TIGL shall have completed the TIGL Financial Statements and shall have received an audit report from an independent audit firm that is registered with the Public Company Accounting Oversight Board relating to the fiscal years ended December 31, 2007 and 2006.  The form and substance of the Financial Statements shall be satisfactory to BP2 in its sole and absolute discretion.

(h)

Delivery of PRC Legal Opinion.  TIGL shall have received an opinion from its legal counsel in the People's Republic of China that confirms the legality under Chinese law of the restructuring being effected by TIGL in connection with the Transactions and that is otherwise satisfactory to TIGL, the Shareholders, and BP2.

(i)

Securities Purchase Agreement. Bay Peak and TIGL shall have executed and delivered a securities purchase agreement, in form and substance to be agreed upon by the parties thereto.

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(j)

Consents.  All material consents, waivers, approvals, authorizations or orders required to be obtained, and all filings required to be made, by the Shareholders or TIGL for the authorization, execution and delivery of this Agreement and the consummation by them of the transactions contemplated by this Agreement, shall have been obtained and made by Shareholders or TIGL, except where the failure to receive such consents, waivers, approvals, authorizations or orders or to make such filings would not have a material adverse effect on the BP2, Shareholders or TIGL.

ARTICLE VII
Covenants

7.1.

Registration Under the Exchange Act; Listing.  

BP2 will use its best efforts to file a Form 10 within 60 days after Closing to register the Shares pursuant to the Exchange Act and qualify BP2 Stock for trading on a recognized U.S. stock exchange or OTC.

7.2.

Blue Sky Laws.

 BP2 shall take any action (other than qualifying to do business in any jurisdiction in which it is not now so qualified) required to be taken under any applicable state securities laws in connection with the issuance of the BP2 Stock in connection with this Agreement.

7.3.

Public Announcements.

 BP2 and TIGL will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press releases or other public statements with respect to this Agreement and the Transactions and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchanges.

7.4.

Fees and Expenses.  

All fees and expenses incurred in connection with this Agreement shall be paid by the Party incurring such fees or expenses, whether or not this Agreement is consummated.

7.5.

Continued Efforts.  

Each Party shall use commercially reasonable efforts to (a) take all action reasonably necessary to consummate the Transactions, and (b) take such steps and do such acts as may be necessary to keep all of its representations and warranties true and correct as of the Closing Date with the same effect as if the same had been made, and this Agreement had been dated, as of the Closing Date.

7.6.

Exclusivity.  

No Party hereto shall (a) solicit, initiate, or encourage the submission of any proposal or offer from any person relating to the acquisition of any capital stock or other voting securities of BP2 or TIGL (as applicable), or any assets of BP2 or TIGL (as applicable) (including any acquisition structured as a merger, consolidation, share exchange or other business combination), (b) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any person to do or seek any of the foregoing, or (c) take any other action that is inconsistent with the Transactions and that has the effect of avoiding the Closing contemplated hereby.  Each Party shall notify the other immediately if any person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.

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7.7.

Access.  

Each Party shall permit representatives of any other Party to have full access to all premises, properties, personnel, books, records (including Tax records), contracts, and documents of or pertaining to such Party.

7.8.

Preservation of Business.  

From the date of this Agreement until the Closing Date, each of TIGL and BP2 shall, except as otherwise permitted by the terms of this Agreement, operate only in the ordinary and usual course of business consistent with its past practices and shall use reasonable commercial efforts to (a) preserve intact its business organization, (b) preserve the good will and advantageous relationships with customers, suppliers, independent contractors, employees and other Persons material to the operation of its business, and (c) not permit any action or omission that would cause any of its representations or warranties contained herein to become inaccurate or any of its covenants to be breached in any material respect.

7.9.

Amendment of BP2 Qualification Documents.

 Immediately following the Closing, the Shareholders shall cause BP2 to amend the qualification documents in each jurisdiction (other than its state of formation) in which it is qualified to do business to change BP2's name to “China Golden Dragon Travel Group, Inc.”

7.10.

Indemnification and Insurance.

(a)

BP2 shall to the fullest extent permitted under applicable Law or the BP2 Charter and Bylaws, indemnify and hold harmless, each present and former director, officer or employee of BP2 (collectively, the “Indemnified Parties”) against any damages (x) arising out of or pertaining to the transactions contemplated by this Agreement or (y) otherwise with respect to any acts or omissions occurring at or prior to the Closing Date, to the same extent as provided in the BP2 Charter and Bylaws or any applicable contract or agreement as in effect on the date hereof, in each case for a period of five years after the Closing Date. In the event of any such Proceeding (whether arising before or after the Closing Date), (i) any counsel retained by the Indemnified Parties for any period after the Closing Date shall be reasonably satisfactory to BP2, (ii) after the Closing Date, BP2 shall pay the reasonable fees and expenses of such counsel, promptly after statements therefor are received, provided that the Indemnified Parties shall be required to reimburse BP2 for such payments in the circumstances and to the extent required by the BP2 Charter and Bylaws, any applicable contract or agreement or applicable Law, and (iii) BP2 will cooperate in the defense of any such matter;  provided, however , that BP2 shall not be liable for any settlement effected without its written consent (which consent shall not be unreasonably withheld. The Indemnified Parties as a group may retain only one law firm to represent them in each applicable jurisdiction with respect to any single action unless there is, under applicable standards of professional conduct, a conflict on any significant issue between the positions of any two or more Indemnified Parties, in which case each Indemnified Person with respect to whom such a conflict exists (or group of such Indemnified Persons who among them have no such conflict) may retain one separate law firm in each applicable jurisdiction.

(b)

This Section 7.10 shall survive the consummation of the transactions contemplated by this Agreement and upon the execution hereof, is intended to benefit the Indemnified Parties, shall be binding on all successors and assigns of BP2 and shall be enforceable by the Indemnified Parties.

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7.11.

Preparation of Disclosure Letter.  

The Parties acknowledge and agree that, while BP2 and TIGL have provided drafts of the BP2 Disclosure Letter and TIGL Disclosure Letter, BP2 and TIGL have not yet delivered the final disclosure letters.  BP2 and TIGL shall deliver BP2 Disclosure Letter and the TIGL Disclosure Letter to the Parties, including copies of all agreements and other documents referred to thereon, in final form within at least 2 business days prior to the Closing.  The Parties shall have two (2) business days following delivery of BP2 Disclosure Letter and the TIGL Disclosure Letter, along with all related agreements and other documents referred to thereon, in which to terminate this Agreement if any Party objects to any information contained in BP2 Disclosure Letter or the TIGL Disclosure Letter or the contents of any such agreement or other document and the Parties cannot agree on mutually satisfactory modifications thereto.

7.12.

Assumption of Securities Purchase Agreement.  

BP2 hereby assumes all of the obligations of TIGL under that certain Securities Purchase Agreement, dated October 30, 2008, between TIGL and Bay Peak (the “SPA”).  The Parties acknowledge that while TIGL has issued shares of TIGL's stock to Bay Peak as required by Section 2 of the SPA, TIGL has not yet issued the Warrant required by such section.  BP2 hereby agrees to issue a Warrant to Bay Peak and/or its designees on the closing date of the Financing for the purchase of a number of shares of BP2's Common Stock equal to 8% of total issued and outstanding capital stock of BP2 on a fully diluted basis on the date of such Financing.

ARTICLE VIII
Miscellaneous

8.1.

Notices.  

All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given upon receipt by the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):

If to BP2, to:

Bay Peak 2 Acquisition Corp.

169 Bolsa Ave.

Mill Valley, CA. 94941

Attention: Cory Roberts

Facsimile: 415-462-0242

If to Touchstone Industry Group Limited, to:

Song LiQiang

China World Tower 1, Ste. 1810

No.1 JianGuoMenWai Avenue

Beijing 10004, China

Facsimile: 0086-10-65050868

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with a copy to:

Pillsbury Winthrop Shaw Pittman LLP

50 Fremont Street

San Francisco, CA  94105-2228

Attention:  Scott C. Kline, Esq.

Facsimile: 415.983.1200

If to the Shareholders at the addresses set forth in Annex A hereto.  

8.2.

Amendments; Waivers; No Additional Consideration.  

No provision of this Agreement may be waived or amended except in a written instrument signed by TIGL, BP2 and Shareholders holding a majority of the Shares.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any Party to exercise any right hereunder in any manner impair the exercise of any such right.  No consideration shall be offered or paid to any Shareholder to amend or consent to a waiver or modification of any provision of any Transaction Document unless the same consideration is also offered to all Shareholders to then hold the Shares.

8.3.

Termination.

(a)

The Parties may terminate this Agreement as provided below:

(i)

TIGL, BP2 and a majority of the Shareholders may terminate this Agreement by mutual written consent at any time prior to the Closing;

(ii)

BP2 may terminate this Agreement by giving written notice to TIGL and the Shareholders at any time prior to the Closing (A) in the event TIGL or any Shareholder has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, BP2 has notified TIGL and/or the Shareholder of the breach, and the breach has continued without cure for a period of twenty days after the notice of breach; (B) in the event that BP2 objects to any information contained in the TIGL Disclosure Letter and the Parties cannot agree on mutually satisfactory modifications thereto, in accordance with Section 7.11 hereof; or (C) if the Closing shall not have occurred on or before January 1, 2009 by reason of the failure of any condition precedent under Section 6.2 hereof (unless the failure results primarily from BP2 itself breaching any representation, warranty, or covenant contained in this Agreement); and

(iii)

TIGL may terminate this Agreement by giving written notice to BP2 at any time prior to the Closing (A) in the event BP2 has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, TIGL has notified BP2 of the breach, and the breach has continued without cure for a period of twenty days after the notice of breach;  (B) if the Closing shall not have occurred on or before January 1, 2009 by reason of the failure of any condition precedent under Section 6.1 hereof (unless the failure results primarily from TIGL or any Shareholder breaching any representation, warranty, or covenant contained in this Agreement).

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(b)

If any Party terminates this Agreement pursuant to Section 8.3(a) above, all rights and obligations of the Parties hereunder shall terminate without any liability of any Party to any other Party (except for any liability of any Party then in breach).

8.4.

Replacement of Securities.  

If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, BP2 shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to BP2 of such loss, theft or destruction and customary and reasonable indemnity, if requested.  The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Shares.  If a replacement certificate or instrument evidencing any Shares is requested due to a mutilation thereof, BP2 may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

8.5.

Remedies.  

In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Shareholders, BP2 and TIGL will be entitled to specific performance under this Agreement.  The Parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

8.6.

Independent Nature of Shareholders' Obligations and Rights.  

The obligations of each Shareholder under this Agreement are several and not joint with the obligations of any other Shareholder, and no Shareholder shall be responsible in any way for the performance of the obligations of any other Shareholder under this Agreement.  The decision of each Shareholder to acquire the Shares pursuant to this Agreement has been made by such Shareholder independently of any other Shareholder.  Nothing contained herein, and no action taken by any Shareholder pursuant hereto, shall be deemed to constitute the Shareholders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Shareholders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated herein.  Each Shareholder shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Shareholder to be joined as an additional party in any proceeding for such purpose.  Each of TIGL and BP2 acknowledges that each of the Shareholders has been provided with this same Agreement for the purpose of closing a transaction with multiple Shareholders and not because it was required or requested to do so by any Shareholder.

8.7.

Limitation of Liability.  

Notwithstanding anything herein to the contrary, each of BP2 and TIGL acknowledges and agrees that the liability of a Shareholder arising directly or indirectly, under any Transaction Document of any and every nature whatsoever shall be satisfied solely out of the assets of such Shareholder, and that no trustee, officer, other investment vehicle or any other affiliate of such Shareholder or any investor, shareholder or holder of shares of beneficial interest of such Shareholder shall be personally liable for any liabilities of such Shareholder.

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8.8.

Interpretation.  

When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.

8.9.

Severability.  

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions 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 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 to the end that the Transactions are fulfilled to the extent possible.

8.10.

Counterparts; Facsimile Execution.  

This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties.  Facsimile execution and delivery of this Agreement is legal, valid and binding for all purposes.

8.11.

Entire Agreement; Third Party Beneficiaries.  

This Agreement, taken together with the TIGL Disclosure Letter and the BP2 Disclosure Letter, (a) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the Transactions and (b) are not intended to confer upon any person other than the Parties any rights or remedies.

8.12.

Governing Law.  

This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof, except to the extent the laws of Nevada are mandatorily applicable to the Transactions.

8.13.

Assignment.  

Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of each of the other Parties.  Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Share Exchange Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

BAY PEAK 2 ACQUISITION CORP.

By: /s/ Cory Roberts

Name:  Cory Roberts

Title:  President

TOUCHSTONE INDUSTRY GROUP LTD.

By: /s/ Song LiQiang

Name:  Song LiQiang

Title: President

SHAREHOLDERS:

/s/ Song LiQiang

Song LiQiang

/s/ Yu Shumei

Yu Shumei

 /s/ Yu Xiaohong

Yu Xiaohong

 /s/ Cory Roberts

BayPeak LLC

Cory Roberts

-28-

 

ANNEX A

Shareholder of TIGL

Name	Number of Shares of TIGL Stock	Percentage of Total Shares of TIGL Stock	Number of Shares of BP2 Stock to be Received
Song LiQiang China World Tower 1, Ste. 1810 No.1 JianGuoMenWai Avenue Beijing 10004, China	40,100	80.2%	81,083,686
Yu Xiaohong China World Tower 1, Ste. 1810 No.1 JianGuoMenWai Avenue Beijing 10004, China	3,450	6.9%	6,976,028
Yu Shumei China World Tower 1, Ste. 1810 No.1 JianGuoMenWai Avenue Beijing 10004, China	3,450	6.9%	6,976,028
BayPeak LLC 169 Bolsa Ave. Mill Valley, California	3,000	6%	6,066,111

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ANNEX B

Definitions

“Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened in writing before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, county, local or foreign), stock market, stock exchange or trading facility.

“Agreement” has the meaning set forth in the Preamble of this Agreement.

“Bay Peak” means Bay Peak LLC.

“BP2” has the meaning set forth in the Preamble of this Agreement.

“BP2 Benefit Plans” has the meaning set forth in the Section 4.10 of this Agreement.

“BP2 Bylaws” means the Bylaws of BP2, as amended to the date of this Agreement.

“BP2 Charter” means the Articles of Incorporation of BP2, as amended to the date of this Agreement.

“BP2 Disclosure Letter” means the letter delivered from BP2 to TIGL and the Shareholder concurrently herewith.

“BP2 Financial Statements” has the meaning set forth in the Section 4.7 of this Agreement.

“BP2 Material Adverse Effect” has the meaning set forth in the Section 4.1 of this Agreement.

“BP2 Stock” has the meaning set forth in the Background Section of this Agreement.

“Closing” has the meaning set forth in Section 1.2 of this Agreement.

“Closing Date” has the meaning set forth in Section 1.2 of this Agreement.

“Consent” means any material consent, approval, license, permit, order or authorization.

“Contract” means any contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument.

“Final Decree” has the meaning set forth in Section 4.28 of this Agreement.

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“Financing” means the first equity financing transaction by the Company occurring within 12 months of this Agreement raising at least US$2 million.

“Governmental Entity” means any federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign.

“Indemnified Parties” has the meaning set forth in Section 7.10 of this Agreement.

“Intellectual Property Right” means any patent, patent right, trademark, trademark right, trade name, trade name right, service mark, service mark right, copyright and other proprietary intellectual property right and computer program.

“Law” means any statute, law, ordinance, rule, regulation, order, writ, injunction, judgment, or decree.

“Lien” means any lien, security interest, pledge, equity and claim of any kind, voting trust, stockholder agreement and other encumbrance.

“Party” has the meaning set forth in the Preamble of this Agreement.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Shareholder” has the meaning set forth in the Preamble of this Agreement.

“Shares” has the meaning set forth in the Background Section of this Agreement.

“SPA” has the meaning set forth in Section 7.12 of this Agreement.

“Taxes” means all forms of taxation, whenever created or imposed, and whether of the United States or elsewhere, and whether imposed by a local, municipal, governmental, state, foreign, federal or other Governmental Entity, or in connection with any agreement with respect to Taxes, including all interest, penalties and additions imposed with respect to such amounts.

“Tax Return” means all federal, state, local, provincial and foreign Tax returns, declarations, statements, reports, schedules, forms and information returns and any amended Tax return relating to Taxes.

“TIGL” has the meaning set forth in the Preamble of this Agreement.

“TIGL Benefit Plans” has the meaning set forth in Section 3.7 of this Agreement.

“TIGL Constituent Instruments” means the memorandum and articles of association of TIGL and such other constituent instruments of TIGL as may exist, each as amended to the date of this Agreement.

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“TIGL Disclosure Letter” means the letter delivered from TIGL to BP2 concurrently herewith.

“TIGL Financial Statements” has the meaning set forth in the Section 3.15 of this Agreement.

“TIGL Material Adverse Effect” has the meaning set forth in Section 3.1 of this Agreement.

“TIGL Stock” has the meaning set forth in the Background Section of this Agreement.

“Transactions” has the meaning set forth in Section 1.2 of this Agreement.

“Transaction Documents” means this Agreement and any other documents or agreements executed in connection with the Transactions.

“VCC” has the meaning set forth in Section 4.28 of this Agreement.

“Visitalk Plan” has the meaning set forth in Section 4.28 of this Agreement.

“Visitalk.com” has the meaning set forth in Section 4.28 of this Agreement.

“Voting BP2 Debt” has the meaning set forth in Section 4.3 of this Agreement.

“Voting TIGL Debt” has the meaning set forth in Section 3.3 of this Agreement.

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EX-2.2

Exhibit 2.2

Mark J. Giunta (#015079)
Law Office of Mark J. Giunta
845 N. Third Ave.
Phoenix, AZ 85003-1408
Phone: (602) 307-0837
Fax: (602) 307-0838
Email: Mark.Giunta@Azbar.org

Attorney for visitalk.com, Inc.

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF ARIZONA

In re: VISITALK.COM, INC., Tax I.D. #86-0930147 Debtor, Chapter 11 Proceeding Case No. 00-13035-PHX-RTB

SECOND JOINT PLAN OF REORGANIZATION
Dated June 22, 2004

     visitalk.com, Inc., an Arizona corporation (“Visitalk”), the Debtor and Debtor-in-Possession (the “Proponent”) in the above-captioned case; hereby proposes a Joint Plan of Reorganization (“Plan”) pursuant to 11 U.S.C. §1129 with affiliates formed or to be formed before the Effective Date; VT Equities Corp., (“VTEC”), Visitalk, Inc., d/b/a VT Consumer Services (“CSI”), VT Business Products, Inc. (“BPI”), VT Gaming Services, Inc. (“Gaming”), VT Financial Services, Inc. (“Financial”), VT International Corp. (“International”), VT Billing Services, Inc. (“Billing”), VT Marketing Services, Inc. (“Marketing”), VT Video Services, Inc. (“Video”), VT Language Specific One, Inc. through VT Language Specific Ten, Inc. (“Languages 1-10”) and NavEdge Networks, Inc. (“NavEdge”). The Proponent, VTEC, CSI,

- - 1 -
 

BPI, Gaming, Financial, International, Billing, Marketing, Video, Languages 1-10 and NavEdge are referred to in the Plan following as the “Co-Proponents.”

- - 2 -
 

INDEX FOR SECOND JOINT PLAN OF REORGANIZATION
Article		Page
I	Definitions	4
II	Objective Of The Reorganization	4
III	Classification Of Claims And Interests	8
IV	Identification Of Classes Impaired Under The Plan	12
V	Treatment Of Classified Claims And Interests	13
VI	Post Confirmation Management Of The Reorganized Debtor	20
VII	Anticipated Post Confirmation Litigation	22
VIII	Acceptance And Rejection Of Executory Contracts	23
IX	Descriptions Of Securities To Be Issued In Satisfaction Of Claims And	23
	Interests
X	Post Confirmation Business Operations	33
XI	Ownership Of The Debtor’s Assets And Causes Of Action	33
XII	The Creditor’s Trust	34
XIII	Continuation And Termination Of Security Interests	42
XIV	Insurance	43
XV	Satisfaction Of Claims And Interests	43
XVI	Binding Nature Of The Plan	44
XVII	Termination Of The Automatic Stay And Discharge	44
XVIII	Implementation Of The Plan	44
XIX	Modification Of And Amendments To This Plan	50
XX	Remedies For Defaults By The Reorganized Debtor	50
XXI	Retention Of Bankruptcy Court Jurisdiction	51
XXII	Request For Confirmation	52

LIST OF EXHIBITS
Appendix A	Definitions
Exhibit 1 Exhibit 2	Form of merger document between VTEC and the Debtor Form of Equity Incentive Plan

- - 3 -

ARTICLE I DEFINITIONS

1.1 Defined Terms. The capitalized terms used in this Plan shall have the meanings as set forth in Appendix “A” attached hereto.

1.2 Undefined Terms. Terms and phrases, whether capitalized or not, that are used and not defined in Appendix “A” attached hereto, but are defined by the Bankruptcy Code, have the meanings ascribed to them in the Bankruptcy Code.

1.3 Interpretation. The headings in this Plan are for convenience and reference only and shall not limit or otherwise affect the provisions hereof. Words denoting the singular number shall include the plural number and vice versa, and words denoting one gender shall include the other gender.

ARTICLE II
OBJECTIVE OF THE REORGANIZATION

2.1 General Plan. This Plan provides for the reorganization of Debtor through the creation of Operating Subsidiaries and a subsequent merger of the Debtor with VTEC, in which the Allowed Unsecured Creditors of the Debtor have an equity interest, and a conveyance of the Debtor’s Causes of Action and $50,000 to a Creditor’s Trust whose beneficiaries include in part the Allowed Unsecured Creditors of the Debtor.

     VTEC, which will be incorporated in Nevada, will be the survivor in the merger. The form of merger document is attached as Exhibit 1. VTEC will operate as a holding company. After the Effective Date, VTEC will initially control eighteen Operating Subsidiaries based on Visitalk’s businesses and will own an interest in NavEdge. VTEC will become the Reorganized Debtor. The purpose of this post confirmation structure is to have a fresh start Reorganized Debtor with modern Articles of Incorporation and by-laws, incorporated in a state with favorable laws and low costs. Once the Plan has been implemented and the Articles of Merger filed, the Debtor shall be dissolved in accordance with Arizona law.

- - 4 -

     Any of the Operating Subsidiaries may acquire other assets and/or existing business operations with the objective of creating additional value for such Operating Subsidiaries’ shareholders and for the shareholders of the Reorganized Debtor. The Plan creates “currency” in the form of securities that may be issued by the Operating Subsidiaries, which will have potentially publicly trading securities.

The Co-proponents believe that these securities could be used to, among other beneficial objectives:

(a)	attract capital;
(b)	attract additional qualified management; or
(c)	acquire assets or entities and for mergers or acquisitions.

     The Debtor’s creditors and claim holders may be issued VTEC securities and Operating Subsidiary securities or Series A Senior Notes or Series B Notes in differing amounts depending upon their election to be paid with securities issued under the Plan and the classification and amount of their Allowed Claims. Any of the Debtor’s Funding Lenders, Administrative Claimants or Post petition Claimants may elect to be paid their loans or claims with securities issued under the Plan. No securities will be issued to Holders of Old Common Stock or Holders of Old Preferred Stock except the Debtor will offer Holders of Old Preferred Stock common stock purchase warrants solely in exchange for a release of all claims and for which such holders will have to invest new value as further described in Article IX. Such warrants would have nominal value but could be beneficial to the Reorganized Debtor and the Operating Subsidiaries in the future. Except for this option, all of the Debtor’s Old Common Stock and Old Preferred Stock shall be canceled pursuant to this Plan.

- - 5 -

     The Debtor is authorized to issue securities of VTEC and its Operating Subsidiaries to its creditors in satisfaction of their allowed claims.

     On the Effective Date of the Plan, all the Causes of Action of the Debtor, defined herein, shall be conveyed to the Creditors’ Trust along with $50,000 in cash to fund the operation of the Trust. Active Professionals and Class 7 Allowed Unsecured Creditors shall be the beneficiaries of the Creditor’s Trust.

2.2 Facilities. The Debtor originally made a six-month arrangement with Aztoré, an advisor to the Debtor, effective April 1, 2001, to move to an appropriate facility of approximately 2,000 square feet. With this commitment, on May 31, 2001, the Debtor completely vacated its 7^th Street facility, which totaled about 27,000 square feet and relocated its offices and its network operating facility, necessary to maintain the Visitalk business, to its new facility. This facility arrangement with Aztore included the availability of appropriate Bandwidth, power and secure computer operating facilities. Starting on October 1, 2001, the Debtor leased this facility directly on a month-to-month basis from Quality Care Solutions, Inc., (“QCSI”) through October 2002. The Debtor owes QCSI $96,784.35 plus interest. Aztoré guaranteed this lease payment for a fee claim of $5,000 per month. On November 1, 2002 the Debtor again restructured its facilities requirements to minimize overhead. Starting on that date a majority of the Debtor’s facility requirements were supplied through the NavEdge Operating Agreement and the Debtor directly rents additional storage space for records and equipment storage.

2.3 Alternatives to the Plan. As set forth in the Disclosure Statement accompanying this Plan, if the Debtor’s assets were liquidated in a case under Chapter 7, the creditors holding general unsecured claims would receive nothing for their claims since value of the Debtor’s assets are less than the outstanding Secured and Administrative Claims. The Debtor and its Co-Proponents believe that by continuing the Debtor’s existing business through the structure created by this Plan (which will result in part in the reduction of Administrative Claims) and conveying Causes of Action to the Creditor’s Trust in which creditors holding general unsecured claims are beneficiaries, that these unsecured creditors will receive a greater return than through a liquidation.

- - 6 -

2.4 The NOL’s and the Investment Company Exemption. The Plan is structured to maintain the Debtor’s estimated $40,000,000 in NOL’s. The Plan is also structured so that the Reorganized Debtor may operate as an investment company exempt from regulation under the Investment Company Act of 1940. Operating as an investment company improves the Reorganized Debtor’s opportunities to exploit the NOL’s. If the Debtor were liquidated, the NOL’s would be lost.

2.5 Funding Plan. The Court previously approved a financing motion allowing the Debtor to raise funds to execute the Plan by borrowing up to (a) $1,000,000 from a Primary Lender Group (“PLG”) and/or (b) up to $2,000,000 from a New Value Lender Group (“NVLG”). Approximately $338,500 has already been borrowed. The Holders of the Notes issued to the PLG and NVL groups can, at their sole option, elect under the Plan to have such notes paid with securities of VTEC and the Operating Subsidiaries issued under the Plan. The Debtor has a commitment from Aztore, the largest PLG lender, or an Aztore affiliate, (jointly “Aztore”), to advance up to $200,000 to fund the Plan. Aztore will lend the Debtor funds within five days of the Plan being filed with the Court. In accordance with the Court Order approving the PLG, the Debtor will loan the cash received to NavEdge, the successor to Technology, Property and Equipment Corp. (“TPEC”) referenced in the original Court Order and the Debtor will pledge the note it receives from NavEdge (the “NavEdge Note”) to Aztore as collateral for Aztore’s PLG loan. Aztore’s PLG loan shall be an administrative claim but in the event the Plan is not approved shall only have recourse to the NavEdge Note and Aztore’s claim shall in no way impact the Creditors Trust. Aztore shall agree that if the Plan is approved it shall accept either Class 1(a) treatment or shares issued under the Plan in payment of its PLG loan as allowed by the Plan under Class 1(c).

- - 7 -

ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS

3.1 General. For the purposes of organization only with respect to administrative expenses and for purposes of organization, voting and all Confirmation matters with respect to all Claims of Creditors of the Debtor, this Plan classifies Claims in separate and distinct Classes as follows:

3.2 Administrative Expenses and Claims.

            (a) Class 1(a) shall consist of the costs and expenses of administration as defined in Section 503 of the Bankruptcy Code for which application or allowance is made, or a Claim is filed, as the same are allowed, approved, and ordered paid by the Court. Administrative Expenses shall consist of: (1) all Claims arising under Section 330 of the Bankruptcy Code, including reasonable compensation for actual and necessary services rendered by a professional person (including attorneys) and by an paraprofessional persons employed by such, based on, among other things, the nature, extent and value of such services, the time spent on such services, and the cost of comparable services other than in a case under Title 11; (2) the costs and expenses of the administration of this proceeding, including, but not limited to, any Bankruptcy Court Clerk fees or Court Reporter’s fees which have not been paid, the cost of reproduction and mailing of this Plan and Disclosure Statement; (3) any post-petition operating expenses of the Debtor which are due and unpaid at the Effective Date; and (4) the actual and necessary costs of preserving the Debtor’s estate.

- - 8 -

     The Debtor estimates that Class 1(a) claims, at the time of confirmation, will be approximately $1,300,000 of which $450,000 is due to Active Professionals performing services for the Debtor’s estate or the Debtor.

     (b) Class 1(b) claims shall consist of the Allowed Administrative Claims of the Funding Lenders. This class shall include the claims of the LLC in the asserted principal amount of $250,000, plus interest. The LLC asserts a security interest in furniture and equipment (with the exception of the Axient Equipment) and proceeds from the sale there from. This class also includes the NVLG Noteholders and the PLG Noteholders, excluding Aztoré’s PLG Claim, up to a principal amount of $3,000,000, less Aztore’s PLG Claim, depending on the amount of funds actually advanced by the Primary Lender Group or the New Value Lender Group to the Debtor. These notes are secured by notes issued by NavEdge or other collateral.

     (c) Class 1(c) claims shall consist of Allowed Administrative Claims of Aztoré. These claims include the (i) the Aztoré Primary Lender Claim which is currently asserted to be $200,000 but may increase; (ii) the asserted Aztoré Agency Fee Claim in the amount of $100,000 under the Court approved NVLG and PLG loan agreements; (iii) the asserted Aztoré Facilities Fee Claim in the amount of $50,000 arising from supplying the Debtor facilities between April 1, 2001 and September 30, 2001; (iv) the asserted Aztore Rent Guaranty Claim in the amount of $65,000 for guaranteeing the Debtor’s rent, still currently unpaid, between October 1, 2001 and October 30, 2002 and (v) the asserted Aztore Financial Services and Operations Fee Claim in the amount of $50,000 arising from supplying the Debtor management and consulting services including assistance with structural issues, recruiting employees, designing incentive programs in the bankruptcy context, financial analysis, financial reporting and development and coordination of the creation of financing offerings under the Plan.

- - 9 -

     (d) Class 1(d) claims shall consist of the Allowed Administrative claims of the post-petition employee group in the estimated amount of about $558,000. This amount will depend on the date of the Plan confirmation and Effective Date. A majority of this claim will be paid in securities issued under the Plan.

     Included in Class 1(d) is the Allowed Administrative Claim of Rick Rothwell (“Rothwell Administrative Claim”), former President of the Debtor (post-petition). This claim has two components. The first is known as the Rothwell Cash Claim which is in the estimated amount of about $44,000. The second is the Rothwell Equity Claim which Rothwell has agreed in advance could only be paid by equities under a Plan of Reorganization. The Rothwell Equity Claim, if allowed, could be in excess of $400,000. Class 1(d) also includes any Allowed Administrative Claim by Gerry Mayo, the current President of the Debtor which also has two components similar to the Rothwell Administrative Claim. It is estimated that Mayo would have a cash claim of $13,000 plus a $107,000 claim payable only in equity.

3.3 Class 2: Priority Claims (Excluding Tax Claims). Class 2 consists of all Allowed Claims entitled to priority under section 507(a)(1) through (9) excluding subsection (8), tax claims, of the Bankruptcy Code. The Debtor estimates that there are approximately $55,000 in priority wage claims arising under Section 507(a)(3).

3.4 Class 3: Priority Tax Claims (Section 507(a)(8)). Class 3 consists of all Allowed Claims entitled to priority under section 507(a)(8) of the Bankruptcy Code, which include tax claims. The Debtor believes that no amounts are due to the IRS or State taxing authorities entitled to priority treatment pursuant to 11 U.S.C. § 507(a)(8).

- - 10 -

3.5 Class 4: Secured Claim of Axient. Class 4 consists of any Allowed Secured Claim held by Axient Communications, Inc. (“Axient”). The Allowance of Axient’s Secured Claim has been resolved by a Stipulation wherein Axient released its security interest, received a note for $30,000 to be paid pursuant to the Debtor’s Plan and an Allowed Unsecured Claim of $250,000. This Class is impaired.

3.6 Class 5: Secured Claim of Cisco. Class 5 consists of any Allowed Secured Claim held by Cisco Systems, Inc. (“Cisco”). Cisco purported to hold a security interest in the Compaq Servers. On September 28, 2001, Cisco and the Debtor entered into a stipulation settling their disputes regarding this claim entered by the Court on or about October 11, 2001. Cisco agreed to a Class 1(a) Administrative Claim of $70,490, a secured claim in the amount of $50,000, and an Allowed Unsecured Claim against the Debtor in the amount of $625,374.46. This Class is impaired.

3.7 Class 6: Secured Claim of American Fire Equipment Sales and Services Corp. Class 6 consists of any Allowed Secured Claim by American Fire Equipment Sales and Services Corp. (“Fire Equipment”) arising from the sale to the Debtor of a fire suppression system in which Fire Equipment purported to retain a lien in the system securing the approximate amount of $31,951. This Class is impaired.

3.8 Class 7: Unsecured Creditors Claims. Class 7 consisted of the Allowed Unsecured Claims of Creditors. Based on proofs of claim filed with this Court there are allowed and/or asserted, but not yet allowed, unsecured claims of approximately $8,500,000.00. This Class is impaired.

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3.9 Class 8: Preferred Stock Equity Interest Claims. Class 8 consists of the Allowed Interests of all of the holders of the Debtor’s Old Preferred Stock.

3.10 Class 9: Common Stock Equity Interest Claims. Class 9 consists of the Allowed Interests of all of the holders of the Debtor’s Old Common stock

ARTICLE IV
IDENTIFICATION OF CLASSES IMPAIRED BY THE PLAN

4.1 General. Only some of the classes of claims and interests created by the Plan are considered “impaired” pursuant to 11 U.S.C. § 1124. This means, in part, that the Plan modifies the contractual rights of all holders of claims and interests, that holders of classified claims will not receive the allowed amounts of their claims in cash on the Effective Date of the Plan, and that holders of allowed interests will not retain any fixed liquidation preference or be paid any fixed redemption amount for equity securities held.

4.2 Impaired Classes of Claims. Classes 4, 5, 6, 7, 8 and 9 are impaired under this Plan. Class 3 is treated in accordance with Section 1129(a) of the Bankruptcy Code.

4.3 Impairment Controversies. If a controversy arises as to whether any Claim or any class of Claims is impaired under this Plan, such class shall be treated as specified in this Plan unless the Bankruptcy Court shall determine such controversy upon motion of the party challenging the characterization of a particular Class or Claim under this Plan.

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ARTICLE V
TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS

5.1 Claim Amounts. Because certain of the claims against the Debtor are either unknown or for undetermined amounts, the amounts of claims specified in the Plan reflect only the Debtor's best estimate as of the date hereof. A list of creditors and claim amounts are included in the Schedules and Statement of Affairs filed by the Debtor in this case. The Debtor reserves the right to object to any claim and equity security interests noted in the Schedules and Statement of Affairs, or any other claim asserted against the Debtor, either prior to or following Confirmation. Under the Plan, objections to claims must be filed within sixty (60) days following the Effective Date of the Plan.

     The Debtor shall distribute all securities to Holders of Allowed Claims, pursuant to the terms of this Plan, within 120 days of the Effective Date. Regardless, on the Final Effective Date the Holders of Allowed Claims shall become the owners of the securities with all rights to transfer them on the books of the Reorganized Debtor until issued. Unless otherwise specified, in calculating the number of Securities to be distributed pursuant to any formulae set forth below, the number of such Securities to be distributed to each Holder of an Allowed Claim or Allowed Interest shall be rounded up to the next even number but in no event shall any claimant receive less than 100 Shares or Units or a note with less than $100 in principal.

5.2 Treatment Of Administrative Claims and Expenses

            (a) Class 1(a) Claims (Administrative Expense Claims). On the Final Effective Date, the Allowed Amount of Class 1(a) Administrative Expenses of all Class 1(a) claimants, except Active Professionals, shall be paid in full through the issuance, at the option of such administrative claimants, by a Series A Note OR a Series B Note OR for each $1.00 of allowed claim the following securities: one share of VTEC Common Stock plus eight VTEC Warrant Units plus 1/8 share of each Operating Subsidiary Common Stock plus one hundred Operating Subsidiary Warrant Units. Such Series A Notes or Series B Notes will be issued in $10 increments, rounded up, and will be a general unsecured claim of VTEC. All trade and service debts and obligations incurred in the normal course of the Debtor's business during the Chapter 11 case since January 1, 2003 shall be paid when due in the ordinary course of business except if otherwise elected by the creditor. Such election regarding notes or other securities must take place at no later than the date that the ballots are due for this Plan. If the Claimant makes no election, the Claimant shall as a default receive Series A Notes.

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     On the Effective Date, the claims of Active Professionals included in Class 1(a) shall A) be reduced (to any extent that they have not already been so reduced) by the proceeds paid to certain of these Professionals pursuant to page 5 of the Motion To Approve Amendment To Note Agreement filed on September 27, 2002 and subsequently approved by the Court, B) be paid a pro rata share of the Causes of Action Proceeds (with $50,000 of said Causes of Action Proceeds to be held back and conveyed to the Creditors’ Trust free and clear of liens to fund its operation), and C) be paid their pro-rata share of an additional $75,000 to be provided by the Funding Lenders, and D) the Active Professionals shall, to the extent that their Claims remain unpaid, become beneficiaries of the Creditors Trust and paid from the proceeds of such Trust.

     (b) Class 1(b) Claims (the “Funding Lender Claims”). The holder of a Class 1(b) Claim may elect to take payment of any portion of such claim plus interest as either a Series A Senior Note or Series B Note issued in $10.00 increments rounded up or for each $1.00 of claim the following: two VTEC Common Shares plus eight VTEC Warrant Units plus one Operating Subsidiary Common Share plus four Operating Subsidiary Warrant Units. Each member of the Funding Lender Group may elect to direct payment of such securities issued under the Plan and these payments may go directly to the Class 1(b)’s members as if they were direct lenders. To elect to receive the Series A Senior Note, or to elect to receive the Series B Note, any class member must notify the Debtor by certified mail by the time that ballots are due for this Plan. If they do not provide such notice, they will be deemed to have elected to be paid with securities issued under the Plan. The elections of each of the members of the LLC shall occur in place of an election by the LLC.

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     (c) Class 1(c) Claims (the Aztoré Claims). Class 1(c) Claims, plus interest, will be paid on the Effective Date through the issuance of four VTEC Common Shares plus eight VTEC Warrant Units for each $1.00 of claim. If Aztore acquires any Class 1(a) claims it can elect to take Class 1(a) treatment or Class 1(c) treatment.

     (d) Class 1(d) Claims (the Post petition Employee Claims). Except for Rothwell and Gerry Mayo, holders of allowed Class 1(d) Claims may elect to receive in full satisfaction of those claims the same treatment as Class 1(b). Rothwell has agreed to accept in full settlement of the Rothwell Cash Claim a $44,000 Series B Note and in full settlement of the Rothwell Equity Claim a $10,000 cash payment to be provided by the Funding Lenders, plus the number of VTEC Common Shares equal to 4.99% of the Reorganized Debtor issued at the consummation of the Plan plus Operating Subsidiary Common Shares equal to ½% of each Operating Subsidiary issued at the consummation of the Plan.

     To the extent Gerry Mayo receives an Allowed Administrative Claim, he has agreed to settle such claim for $850 per month during the time of Mr. Mayo’s pre-confirmation service to the Debtor plus VTEC Common Stock equal to 3% of the VTEC Common Stock issued at the consummation of the Plan.

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5.3 Class 2: Priority Claims (Excluding Tax Claims). Class 2 Claims shall be treated the same as the Class 1(a) claimants. Class 2 Claims are not Active Professionals Claims.

5.4 Class 3: Priority Tax Claims (Section 507(a)(8)). Class 3 Claims shall be paid in full by receiving deferred even quarterly cash payments commencing on the first day of the calendar quarter at least 90 days after the Effective Date and continuing over a period of six years from the date of the claims’ assessment, of a value, as of the Effective Date of the Plan, equal to the allowed amount of such claim. The IRS has withdrawn its proof of claim and confirmed there are no amounts due priority pursuant to 11 U.S.C. § 507(a)(8).

5.5 Class 4: Secured Claim of Axient. The Debtor will treat the Axient claim as if it were a Class 1(b) Funding Lender claim for $30,000. Axient may elect to receive a Series A Senior Note or a Series B Note. Unless the Claimant affirmatively elects either such note it will receive the securities described in Section 5.2(b) herein. To maintain the same treatment as agreed to under a Stipulation between the Debtor and Axient related to Axient’s treatment under the First Amended Joint Plan of Reorganization, one year after the Effective Date Axient may demand that the Reorganized Debtor repurchase all the securities so received for $33,000 (the “Put”). The Debtor’s liability under the Put may be met by a third party. Axient’s Allowed Unsecured Claim of $250,000 shall be included in, and treated as, a Class 7 Claim.

5.6. Class 5: Secured Claim of Cisco. The Holder of the Class 5 Claim, Cisco, shall retain all of its liens in the subject 32 Compaq servers. The Debtor will issue Cisco Series B Convertible Notes for $120,000 in full settlement of both Cisco’s Class 1(a) Administrative Claim and Secured Claim and Cisco will transfer the ownership of the Compaq Servers to the Debtor. Cisco’s Allowed Unsecured Claim shall be included in, and treated as, a Class 7 Claim. Cisco’s Class 1(a) Claim is treated in its entirety in this section, Section 5.6, of the Plan and will receive no separate or additional consideration on account of Section 5.2(a) of this Plan.

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5.7. Class 6: Secured Claim of American Fire Equipment Sales and Services Corp. To the extent that Fire Equipment holds an Allowed Secured Claim, Fire Equipment shall retain all of its liens in the subject fire suppression system. The Debtor shall consent to the return of the fire suppression system in full satisfaction of, and release, of all claims of any type and description by Fire Equipment against the Debtor. Any deficiency shall be treated as a Class 7 Claim.

5.8. Class 7: Unsecured Creditors Claims. Class 7 Claimants shall receive each claimant’s pro rata share of the Class 7 Securities Pool based on the even dollar amount of each Allowed Unsecured Claims plus one Creditor Trust Unit for each even $1.00 of each Allowed Unsecured Claims. The Class 7 Securities Pool will hold the following: 500,000 or 10% of VTEC’s Common Shares actually issued under the Plan, which ever is less, plus for each VTEC Common Share issued to the Class 7 Securities Pool, the Class 7 Securities Pool will receive four VTEC Warrant Units. In addition, the Class 7 Securities Pool shall receive 100,000 Common Shares in each Operating Subsidiary plus 400,000 Operating Subsidiary Warrant Units. The Debtor and the Co-Proponents shall each have the authority to issue such additional shares of the Reorganized Debtor and Operating Subsidiaries to the Class 7 Securities Pool so that each Class 7 Allowed Claimant shall hold at least 100 units of any security excluding the Trust Units.

5.9 Class 8: Preferred Stock Equity Interest Claims. All of Class 8 Equity Interest Holder’s Claims for Old Preferred Stock of Debtor shall be canceled by operation of this Plan. Therefore, the Class 8 Equity Interest Holders shall retain none of their Old Preferred Stock or any other interests in the Debtor, the Reorganized Debtor or the Operating Subsidiaries. In settlement of any claims against the Debtor in the form of an executed release to be provided thereto, the Class 8 Interest Holder’s may receive, only in exchange for a formal release against the Debtor and all the Co-Proponents of such parties potential claims as a creditor and not on account of their status as a shareholder, two VTEC Warrant Units for each ten dollars ($10.00) invested in the Debtor’s Preferred Stock and one Operating Subsidiary Warrant Unit in each Operating Subsidiary for each twenty dollars ($20.00) invested in the Debtor’s Preferred Stock.

5.10 Class 9: Common Stock Equity Interest Claims. All of Class 9 Equity Interest Holder’s Claims for Old Common Stock of Debtor shall be canceled by operation of this Plan. Therefore, the Class 9 Equity Interest Holders shall retain none of their Old Common Stock or any other interests in the Debtor, the Reorganized Debtor or any of the Operating Subsidiaries.

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5.11	Disputed Claims And Interests.
	(a) The Debtor or the Reorganized Debtor and its attorneys may file on or before ninety (90) days from the Effective Date of the Plan:

(1)	an objection to any claim;
(2)	a motion to determine the extent, priority, or amount of any secured or other claim; or
(3)	a complaint to determine the validity, priority or extent of any lien or other interest in property of the Debtor's estate.

     Copies of responsive pleadings to all such objections, motions, or complaints must be served upon the Reorganized Debtor's attorney, Mark Giunta, Esq., or any successor attorney for the Reorganized Debtor.

5.11 Treatment of Objections. Where objections are made to any claim or to any motions or proceedings filed in regard to any lien, claim, or privilege, any payments or distributions of securities that are due in accordance with the Plan shall be held in trust by the Reorganized Debtor, subject to the Bankruptcy Court's jurisdiction, in an interest-bearing or escrow account or accounts in Phoenix, Arizona, which account or accounts shall be federally insured (in the event of a distribution of a cash payment) and segregated unless otherwise stated herein or, in the alternative, one or more of the following will be provided:

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(a)	a letter of credit or other bond; or
(b)	certificates of deposit or other security satisfactory to the Court to assure the payment of the claim.
(c)	Within thirty (30) days after entry of a final, non-appealable order resolving any disputed claim, lien or privilege, payment, including accrued interest, or securities shall be distributed to the claimant (subject to the terms of the Plan) or any other entity entitled to distribution in accordance with the Bankruptcy Court's order.

5.12 Penalty Claims. No creditor, whether secured, unsecured, priority, or non-priority, shall be entitled to any fine, penalty, exemplary or punitive damages, late charges, default interest, or any other monetary charge relating to or arising from any act or omission by the Debtor, and any claim for such sums shall be deemed disallowed, whether or not a specific objection to the allowance of such sums is filed. Creditors with allowed, secured claims shall be entitled to reasonable attorneys' fees and interest at a non-default rate, subject to the limitations of Section 506 of the Bankruptcy Code.

5.13 Unclaimed Distributions. All distributions of money or securities under the Plan which are returned by the Post Office undelivered or which cannot be delivered due to the distributee's failure to provide the Reorganized Debtor with a current address will be retained by the Reorganized Debtor in trust in a federally insured bank (in the event of a distribution of a cash payment) or by the Reorganized Debtor as pertains to all classes except Class 7 and or by the Creditors’ Trustee in the case of a Class 7 distribution. After the expiration of six (6) months from the date of the first attempted distribution, any unclaimed securities and all future distributions will vest in the Reorganized Debtor or the Creditor’s Trust, as the case may be, free of any claim of the distributee. The Creditors’ Trust will open a securities account and any such unclaimed securities will be deposited into this account for the benefit of the Creditors’ Trust. The Trustee shall have the authority to sell such securities and use the proceeds for the benefit of the Creditors’ Trust.

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ARTICLE VI
POST CONFIRMATION MANAGEMENT
OF THE REORGANIZED DEBTOR

6.1 The Board of Directors and Corporate Officers. Notwithstanding the issuance of securities pursuant to this Plan, some or all of which may give full voting rights to holders of those securities, on the Confirmation Date the Board of Directors of the Debtor will change to the individuals designated below and the initial Board of Directors of the Reorganized Debtor shall also consist of those persons designated below. If a director, designated as a member of the initial Board of Directors of the Reorganized Debtor, is unable to complete his tenure, the remaining directors shall appoint a new director.

Name	Office	Remuneration
Michael S.	Chief Executive	$12,000 per month and $1,200
Williams	Officer and Chairman	per month per formed and
	of the Board	active Operating Subsidiary
		unless not on the board of such
		entity.
Lanny R. Lang	Vice President,	$8,000 for the Debtor and $800
	Secretary, Treasurer	per month per formed and
	and Director	active Operating Subsidiary
		unless not on the board of such
		entity.

     Unless Officers and Directors of the Operating Subsidiaries are elected or appointed prior to the Effective Date, the above officers and directors shall also serve as the initial officers and directors of the Operating Subsidiaries until such entities hold their first shareholder meeting and successors are duly elected. Messrs. Williams and Lang agree to take securities for any claim that accrues hereunder between the Confirmation Date and the Effective Date as if such amounts were additional Class 1(c) Claims. After the Effective Date if the Debtor or VTEC or an Operating Subsidiary has insufficient funds to pay such amounts, then Williams and Lang will defer such compensation in exchange for accumulating interest on unpaid amounts at 12% or take payment in the form of securities to be issued by the Reorganized Debtor at fair market value. Williams and Lang will qualify for employee stock option grants under VTEC’s Equity Incentive Plan at fair market value. As to the Operating Subsidiaries, after the Confirmation Date, if Williams and Lang are active in the management of the subsidiaries, they will receive compensation commensurate with the operating of such entity including potential awards under such subsidiary’s Equity Incentive Plan.

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6.2 Qualifications of Directors and Officers. The qualifications of the individuals who will constitute the initial Board of Directors and serve as Officers of the Debtor and the Reorganized Debtor are as set forth in an Exhibit to the Disclosure Statement.

6.3 Compensation of Directors and Officers. The prior table shows the initial proposed annual remuneration and fees of those individuals who will be the directors and officers of the Debtor and the Reorganized Debtor, when it is formed, anytime immediately following the Confirmation Date of the Plan. However, payment of such remuneration is subject to the ability of the Reorganized Debtor to make such payments without endangering the operating ability of the Reorganized Debtor and ensuring the continued feasibility of the Plan. Any salaries unable to be paid will be deferred and accrue interest at 12%. There are no employment contracts between either the Debtor or the Reorganized Debtor and the proposed officers and directors listed above.

     The Debtor and the Co-Proponents propose the adoption, upon the Effective Date, of an “Equity Incentive Plan” covering the issuance of up to 3,000,000 shares of common stock, at fair market value, for the officers, directors and key employees of VTEC and each of its Operating Subsidiaries. The proposed form of equity incentive plan for VTEC and each Operating Subsidiary is attached hereto as Exhibit 3. A vote to accept this Plan shall constitute an affirmative vote in favor of the adoption of such Equity Incentive Plans and shall be deemed to be the equivalent of a shareholder vote allowing such plans to qualify as “qualified equity incentive plans” for all purposes under the IRS Code. As a Co-proponent of this Plan, by virtue of confirmation of this Plan, VTEC shall be deemed to have voted, as the majority shareholder of each Operating Subsidiary, in favor of the adoption of such equity incentive plan for each Operating Subsidiary.

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     The awarding of any such options under the approved equity incentive plans shall be subject to sole discretion of the Board of Directors of each specific entity and the terms of such equity incentive plans.

     The directors of the Reorganized Debtor will also be authorized to approve reimbursement to its officers and directors for actual expenses incurred, compensation to directors for attendance at meetings of the board of directors, and the salaries and fees for corporate officers set forth above following the Effective Date. Nevertheless, the Reorganized Debtor's initial corporate board has no plans to approve any such increased compensation for directors or officers, other than as described in the Disclosure Statement and this Plan.

6.4 Meetings of Directors and Selection of New Directors. Following the Effective Date of this Plan, the board of directors of the Reorganized Debtor shall meet monthly for six months. The initial board of directors shall serve until the next meeting of shareholders held pursuant to the Articles of Incorporation and/or Bylaws of the Reorganized Debtor.

ARTICLE VII
ANTICIPATED POST CONFIRMATION LITIGATION

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     The Debtor will review the Proofs of Claims filed in this case by alleged creditors when submitted. The only contemplated post confirmation litigation by the Debtor are objections to the allowance of certain claims that may be filed by the Debtor.

     The balance of all Causes of Action, regardless of their state of litigation, including but not exhausted by all preference and avoidance actions, fraudulent conveyance actions, potential fraudulent transfer against MP3.com, Inc., and actions against former directors and officers, held by the Debtor will be transferred upon the Effective Date to the Creditor Trust for the benefit of unsecured creditors.

ARTICLE VIII
ACCEPTANCE AND REJECTION OF EXECUTORY CONTRACTS

     In accordance with 11 U.S.C. § 365, the Debtor hereby does not accept or assume any executory contracts and unexpired leases except those executory contracts and unexpired leases already paid in full by the Debtor, including, if applicable, the Debtor’s Directors and Officers Liability Policy.

     Pursuant to 11 U.S.C. § 365, the Debtor hereby rejects any and all executory contracts and leases not already rejected except as noted elsewhere in this Article.

     Any person or entity injured by such rejection shall be deemed to hold an unsecured claim against the Debtor to the extent allowed, and, unless a prior bar date has not been established by the Court, within ten (10) days before the initial hearing on confirmation of the Plan, must file a proof of claim for any damages resulting therefrom or be forever barred from asserting any claim. The Debtor reserves the right to apply to the Bankruptcy Court at any time prior to confirmation of the Plan to reject any and all other contracts which are executory.

ARTICLE IX
DESCRIPTIONS OF SECURITIES TO BE ISSUED

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IN SATISFACTION OF CLAIMS AND INTERESTS

9.1	Identification and Attributes of Securities.
	(a)	VTEC Securities.
		(1)	VTEC Common Shares: Each share of VTEC Common Stock shall be fully paid, non-assessable, and entitled to one vote per share.
		(2)	VTEC Warrant Unit: A VTEC Warrant Unit shall consist of six warrants to purchase newly issued common stock in the Reorganized Debtor. The warrants will be issued as a unit with a separate CUSIP number. As warrants expire or are exercised, VTEC, in its sole option, may choose to issue a New Unit, create other combination Units or may detach the warrants. These warrants are:
			(a)	one “A Warrant” which will allow the holder to purchase a share of common stock for $2.00, expiring eighteen months after the Effective Date ;
			(b)	one “B Warrant” identical to the A Warrant;
			(c)	one “C Warrant” which will allow the holder to purchase a share of common stock for $3.00, expiring eighteen months after the Effective Date;
			(d)	one “D Warrant” identical to the C Warrant;
			(e)	one “E Warrant” which will allow the holder to purchase a share of common stock for $4.00, expiring eighteen months after the Effective Date;
			(f)	one “F Warrant” identical to the E Warrant;
		(3)	Other VTEC Unit Terms. The exercise prices of the warrants in the VTEC Warrant Unit may be lowered from time to time for such

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	periods as determined by the VTEC Board in its sole discretion and the expiration dates of the warrants in the VTEC Warrant Unit may be extended from time to time at the discretion of VTEC. All the warrants in the VTEC Warrant Unit shall be subject to a Call anytime by the Reorganized Debtor but the holders would have 20 days from the mailing of the Call notice to the Warrant Holders address of record to exercise the right to purchase new common stock associated with said warrants. The stock and warrants are immediately detachable from the Unit at the discretion of the Reorganized Debtor and may be regrouped into different Units at the option of the Reorganized Debtor. The specific exercise terms and restrictions of the VTEC Warrant Unit may be modified at any time by the VTEC Board to maintain the most flexibility and capacity for the Reorganized Debtor to maintain the most NOL value and limit claims of any Change of Control testing event as defined in the Code.
(b)	Operating Subsidiary Securities
	(1)	Operating Subsidiary Common Shares. Each share of Operating Subsidiary Common Stock shall be fully paid, non-assessable, and entitled to one vote per share in matters pertaining to each respective Operating Subsidiary.
	(2)	Operating Subsidiary Warrant Unit. Each Operating Subsidiary Warrant Unit shall consist of six warrants of such subsidiary. These warrants are:
		(a)	one “A Warrant” which will allow the holder to purchase a share of common stock for $2.00, expiring eighteen months after the Effective Date ;
		(b)	one “B Warrant” identical to the A Warrant;

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	(c)	one “C Warrant” which will allow the holder to purchase a share of common stock for $3.00, expiring eighteen months after the Effective Date;
	(d)	one “D Warrant” identical to the C Warrant;
	(e)	one “E Warrant” which will allow the holder to purchase a share of common stock for $4.00, expiring eighteen months after the Effective Date;
	(f)	one “F Warrant” identical to the E Warrant;
(3)	Other Operating Subsidiary Common Stock and Warrant Unit Terms. The exercise prices of any of the Operating Subsidiary warrants may be lowered from time to time to amounts and for periods to be established by and at the discretion of the respective Boards of Directors of each Operating Subsidiary and the expiration dates of any of the Operating Subsidiary warrants may be extended from time to time at the discretion of the respective Boards of Directors of each Operating Subsidiary. All the Warrants shall be subject to a Call anytime by the Operating Subsidiaries Board of Directors but in the event of any Call the holders would have 20 days from the mailing of the Call notice to exercise the right to purchase new common stock associated with said warrants. The Operating Subsidiaries may not Call or fail to extend the Warrants without the approval of VTEC. The stock and warrants are immediately detachable from the Operating Subsidiary Units at the discretion of the Reorganized Debtor as part of the Plan’s implementation and thereafter at the discretion of the issuing Operating Subsidiary’s Board of Directors and may be regrouped into different Units at the option of such Board of Directors.

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The Operating Subsidiary Common Shares issued to Classes 1(a) and PLG Lenders in Class 1(b) who elect Class 1(a) treatment will not be diluted in the event of an Initial Change Of Control Acquisition Or Merger.

     (e) The Series A Senior Notes. The Series A Senior Notes will be transferable notes issued in $10 denominations. No partial notes will be issued but rounded up to the next whole $10 amount. The Series A Notes will bear interest at 10% per annum due at maturity. The Series A Senior Notes may be prepaid at any time and mature five years after the Effective Date.

     (f) The Series B Notes. The Series B Notes will be transferable, convertible notes issued in $10 denominations. No partial notes will be issued but rounded up to the next whole $10 amount. The Series B Notes will bear interest at 5% per annum due at maturity and the principal and accrued interest of the Series B Notes will convert into VTEC Common Shares at $.75 per share. These Series B Notes may be prepaid at any time and mature five years after the Effective Date.

9.2 Distribution of Securities.

     The Debtor will distribute the following securities within 120 days of the Effective Date. Regardless, until such securities are issued, the claim holders receiving securities will possess all the rights and benefits of all such securities including the right to transfer their interest in any note or security on the books of the Reorganized Debtor or any Operating Subsidiary to other holders prior to the formal distribution. The Reorganized Debtor shall require that any such transfers shall require customary stock powers, signature guarantees, corporate or other resolutions and affidavits, legal opinions and purchase agreements prior to being effective.

     (a) Up to 500,000 VTEC Common Shares, 2,000,000 VTEC Warrant Units, both as may be adjusted for actual shares issued, plus 100,000 Common Shares of each of the Operating Subsidiary and 400,000 Operating Subsidiary Warrant Units shall be issued to the Class 7 Securities Pool.

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     (b) The Debtor shall issue shares of VTEC Common Stock and certificates representing the VTEC Warrant Units to each claimant the elects to be paid on the Effective Date with securities issued under the Plan in accordance with the proposed Plan treatment.

     (c) The Unsecured Creditors shall receive their pro rata percentage of securities from the Class 7 Securities Pool and their pro rata share of the Trust Units based on their Allowed Claims. Upon the Effective Date all such Common Shares will be deemed fully paid and non-assessable and shall be entitled to one vote each.

     (d) Under the Plan, the Debtor will distribute securities of the Reorganized Debtor and securities of each of the Operating Subsidiaries to settle its administrative and other claims and its unsecured debts, certain employee obligations, Aztoré’s claims and the claims of the Funding Lenders. If the Debtor increases the Funding Lender Notes by borrowing approximately $100,000 additional from Aztoré and all but approximately $133,100 of administrative claimants elect to take Series A Senior Notes, the ownership of the Reorganized Debtor and the Operating Subsidiaries will be as shown on the chart below.

				Operating	Operating
	VTEC	VTEC	Trust	Subsidiary	Subsidiary
Creditor Group	Shares	Units	Units	Shares	Units(a)
Aztoré	2,875,000	5,750,000
Funding Lenders	1,010,100	4,040,400		63,200	252,800
Post Petition Employees	348,100	576,000		31,000	25,000
Unsecured creditors	500,000	2,000,000	8,500,000	100,000	400,000
Admin claims who elect	266,800	1,067,200		16,675	66,700
securities
VTEC				4,790,000
Class 8		8,000,000			4,000,000
Total common shares	5,000,000			5,000,000

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     This Chart does not include a representation of the Active Professionals Claimants from Class 1(a) who also shall have a priority beneficial interest in the Creditors’ Trust.

9.4 Dividends.

     No dividends have ever been paid by the Debtor. The declaration of any future cash or stock dividends will be made at the discretion of the Reorganized Debtor’s board of directors. It is anticipated that any income received by the Reorganized Debtor or the Operating Subsidiaries will be devoted to such entities’ future operations. The Co-Proponents do not anticipate the payment of cash dividends on the Reorganized Debtor's or Operating Subsidiaries’ common stock in the foreseeable future, and any decision to pay dividends will depend on the Reorganized Debtor's or each Operating Subsidiaries’ profitability, funds legally available there for and other factors.

9.5 Transfer Agent. The registrar and transfer agent for the stock, the warrants, the Series A Senior Notes and the Series B Notes issued pursuant to the Plan will be a qualified stock transfer agent or note agent, as required, as selected by the Board of Directors of each entity. Such Boards may also elect to have such corporation act as its own transfer, warrant and note agent without requiring any bond and such entity may change customary agency fees for services.

9.6 SEC Reporting. The Debtor is not currently subject to the reporting requirements of the Exchange Act. VTEC and the Operating Subsidiaries expect to voluntarily subject themselves to the requirements of the Exchange Act when they have capital available for the necessary filings. Being subject to the Exchange Act will allow VTEC and the Operating Subsidiaries to trade on the Over the Counter Bulletin Board System (the “OTC Bulletin Board) rather than on the “Pink Sheets.” Trading on the OTC Bulletin Board generally offers holders of securities enhanced liquidity.

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9.7

Resale of Securities.

(a) Resales in General. In general, securities issued by a debtor in a Chapter 11reorganization to a creditor on account of a claim may be resold by such recipient without further registration under the Exchange Act or other laws, in reliance on the exemption from registration provided by the Bankruptcy Code. This exemption does not apply to holders who are deemed “underwriters” with respect to such securities, as the term “underwriter” is defined in the Bankruptcy Code.

     Section 1145(b)(1) of the Bankruptcy Code provides that “except with respect to ordinary trading transactions,” an entity is an “underwriter” if such entity: (i) purchases a claim against or interest in a debtor with a view to distribution of any security received in exchange for such claim or interest; (ii) offers to sell securities offered or sold under the Plan for the holders of such securities (except certain offers to sell fractional interests); (iii) offers to buy securities offered or sold under the Plan from the holders of such securities if the offer to buy is made with a view to distributing such securities and the offer to buy if made under an agreement made in connection with the Plan, with the consummation of the Plan, or with the offer or sale of securities under the Plan of reorganization; or (iv) is an issuer with respect to a reorganized debtor's securities, as the term “issuer” is used in § 2(11) of the Securities Act.

     In the context of the Plan, an “issuer” under § 2(11) of the Securities Act includes any person directly or indirectly controlling or controlled by the Debtor or any person under direct or indirect control with the Debtor. Whether a person is an “issuer” and, therefore, an “underwriter” for purposes of § 1145(b) of the Bankruptcy Code depends upon a number of factors, including the relative size of the shareholder's equity interest in the Debtor; the distribution and concentration of other equity interests in the Debtor; whether the person, either alone or acting in concert with others, has a contractual or other relationship giving that person power over management policies and decisions; and whether the person actually has such power notwithstanding the absence of formal indicia of control.

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     Because of complex and subjective issues involved in determining issuer and underwriter status, creditors and equity interest holders are urged to consult with their attorneys concerning whether they will be able to trade freely any securities they are to receive under the Plan. NEITHER THE DEBTOR NOR ANY OF ITS REPRESENTATIVES MAKE ANY REPRESENTATIONS AS TO WHETHER ANY SECURITIES ISSUED PURSUANT TO THE PLAN, ONCE PLACED IN THE HANDS OF RECIPIENTS UNDER THE PLAN, MAY BE FREELY TRADED. Persons who may be underwriters must either register the securities under the Securities Act in connection with a resale or use an applicable exemption from registration.

     The Reorganized Debtor is not obligated to register securities issued pursuant to the Plan or to assist holders of such securities in establishing an exemption from registration. Accordingly, any entity becoming a holder of such securities who is determined to be an underwriter may be able to dispose of the securities only in limited circumstances.

     If the Reorganized Debtor has reason to believe that a recipient of its securities pursuant to the Plan may be an underwriter, the Reorganized Debtor may require from such recipient a statement that the recipient is aware of Section 1145 of the Bankruptcy Code and the requirements of the Securities Act regarding resale of those securities and that those securities held by such recipient will be sold in compliance with the Securities Act.

     (b) State “Blue Sky” Laws. State laws affecting resales of securities issued in connection with bankruptcy reorganizations may vary. Those who become holders of securities issued pursuant to the Plan should consult with their attorneys concerning the applicability of any state law affecting resales of such securities.

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     (c) Listing and Trading. IT IS ADVISABLE FOR EACH RECIPIENT OF SECURITIES ISSUED PURSUANT TO THE PLAN TO CONSULT INDEPENDENT COUNSEL PRIOR TO SELLING THOSE SECURITIES. ALL CREDITORS AND EQUITY HOLDERS ARE ALSO URGED TO CONSULT COUNSEL REGARDING TAX CONSEQUENCES OF THE PLAN AND, IN PARTICULAR, ANY TAX CONSEQUENCES OF RECEIVING SECURITIES UNDER THE PLAN. The securities issued under the Plan will only trade if the Reorganized Debtor or the Operating Subsidiaries apply with a member of the National Association of Securities Dealers. The Debtor believes that the proposed management of the Reorganized Debtor and the Operating Subsidiaries will be able to attract a sponsoring broker-dealer but such sponsorship will require audits of each entity and registration under the Exchange Act. Both of these activities require capital investment and there is no assurance that such additional capital will be available.

     (d) Restrictions related to the maintenance of NOL’s. There are various rules limiting the maintenance of the Reorganized Debtor’s NOL’s if there are changes of control of the Reorganized Debtor. All Shares and Warrants issued by the Reorganized Debtor will have a legend restricting the ability of any shareholder or shareholder affiliate from acquiring more than 4.99% of the Reorganized Debtor’s Stock or Warrants without the Reorganized Debtor’s approval. There are no NOL restrictions on Holders of Operating Subsidiaries shares or warrants. Holders of less than 4.99% of the Reorganized Debtor may sell their stock without impact as long as the buyer of such stock owns after the acquisition less than 4.99% of the Reorganized Debtor. In the event a holder accumulates more than 4.99% this sale will be void. In addition, any warrants to be issued that would violate the NOL rules will be void.

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     (e) Timing of Reorganized Debtor Warrant Exercise. When a Holder exercises their VTEC Warrants, whether voluntarily or in response to a Call, such Warrants will be accumulated and exercised at the convenience of the Reorganized Debtor, but not less than monthly, to avoid or minimize multiple “change testing dates” which could negatively impact the maintenance of the NOL’s.

ARTICLE X
POST CONFIRMATION BUSINESS OPERATIONS

     After the Effective Date, the Reorganized Debtor will continue its business through the Operating Subsidiaries and manage its affairs without supervision by the Bankruptcy Court except as expressly set forth herein, and it may enter into agreements to transfer, convey, encumber, use and lease any and all of its assets.

ARTICLE XI
OWNERSHIP OF THE DEBTOR’S ASSETS AND CAUSES OF ACTION

11.1 The Assets. Excluding the Causes of Action and the Causes of Action Proceeds, as of the Effective Date of the Plan, the Reorganized Debtor and the Operating Subsidiaries shall retain and be vested with ownership of all property of the Debtor's Chapter 11 estate, as defined in 11 U.S.C. § 541, and the Reorganized Debtor shall own all such property free and clear of all liens, claims and interests of any person or entity, except as specifically provided in the Plan or the order confirming the Plan. Not withstanding any statement in this section, all control of, and any benefit arising from, a preference avoidance action against Axient shall be retained and vested with the Debtor.

11.2 The Causes of Action. All the Causes of Action and all the Causes of Action Proceeds shall be conveyed to the Creditors’ Trust.

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ARTICLE XII THE CREDITOR’S TRUST

12.1 Purpose of the Creditor’s Trust. The purpose of the Creditor’s Trust is to marshal, maintain, administer, pursue, collect, settle, dispose of and disburse the Trust Property for the benefit of the holders of the Active Professionals Claims included in Class 1(a) and the Allowed Unsecured Claims under Class 7.

12.2 Beneficiaries of Creditor’s Trust. The Active Professionals and the holders of Allowed Unsecured Claims under Class 7 shall be the beneficiaries of the Creditor’s Trust until the claims of the Active Professionals and all the holders of all allowed claims under Class 7 shall be paid. The Claims of the Active Professionals shall be paid with priority and in full by the Creditors’ Trust prior to any payment of the allowed claims under Class 7.

12.3 Appointment by Court Order. In the Confirmation Order, the Creditor’s Trustee will be appointed and will be bound to perform as required by the Plan, provided, however, that the appointment of the Creditor’s Trustee will be subject to the Creditor’s Trustee delivering a bond in a reasonable amount to be determined by the Court.

12.4 Termination of the Unsecured Creditors Committee and Appointment of Creditor’s Trust Trustee and operation of the Creditors’ Trust.

     (a) Prior to the Effective Date of the Plan, the Debtor shall select the Creditor’s Trustee, which Creditor’s Trustee shall be the subject to the approval of the Committee and Debtor shall submit an application for appointment of the Creditor’s Trustee to the Court. The Debtor shall send a copy of said application to all unsecured creditors and said creditors shall have ten days following service to object to the Application and to submit additional names to be considered by the Court. Thereafter, the Court may select and appoint the Creditor’s Trustee.

     (b) On the Effective Date or upon the appointment of the Creditor’s Trustee, whichever is later to occur, the Unsecured Creditors Committee will terminate.

     (c) Termination Events. The authority of the Creditor’s Trustee will be effective as soon as the Creditor’s Trustee is appointed and will remain in full force and effect until:

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(1)	payment in full of all the claims of the Active Professionals and all the Trust Unit holders; or
(2)	the liquidation of all Trust Property and distribution of all Trust Property proceeds; or
(3)	the determination by the Creditor’s Trustee in his reasonable business judgment that no further action should be taken with regard to the remaining Trust Property and that no additional distributions will be made

     (d) Termination of the Trust. Upon any of the above Termination Events, the Creditor’s Trustee shall file with the Court a “Notice of Termination” (the “Notice”). The Notice shall be mailed to all holders of Trust Units and state that such Trust Unit may file an objection to the Notice, with a copy to the Creditor’s Trustee within twenty days of filing of the Notice and then a hearing shall be set on such objections. The Notice also shall contain an accounting of the Creditor’s Trust and a summary of action taken by the Creditor’s Trustee to dispose of the Trust Property and the results obtained. The Notice shall certify that the terms of this provision have been satisfied in full and unless an objection is received from a party in interest, the duties and responsibilities of the Creditor’s Trustee shall terminate twenty days after service of the Notice. If a party in interest objects, then the Creditor’s Trustee’s duties and responsibilities will not terminate until the Court has so ruled following Notice and a hearing. Concurrently therewith, the Creditor’s Trustee shall be discharged from all further duties and responsibilities in connection with the Trust Property and the holders of Trust Units. All tax returns and any filings or reports shall have been filed with the appropriate state or federal regulatory authorities and all taxes have been paid prior to termination of the Creditors’ Trustee’s duties. Further, the service of the Creditor’s Trust under the Plan will be subject to the following:

     (e) Tenure, Removal and Replacement of Creditor’s Trustee. The Creditor’s Trustee will serve until resignation pursuant to subsection (1) below, removal pursuant to subsection (2) below, or the completion of his or her duties;

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(1)	The Creditor’s Trustee may resign at any time by providing a written notice of resignation to the beneficiaries of the Creditor’s Trust and the Bankruptcy Court. Such resignation will be effective when a successor is appointed as provided herein;
(2)	The Creditor’s Trustee may be removed for cause by Order of the Bankruptcy Court, which may be sought by any Trust Unit holder of the Creditor’s Trust, or upon a vote of greater than 50% of the outstanding Trust Units of beneficiaries of the Creditor’s Trust without Court approval; and
(3)	In the event of a vacancy in the position of the Creditor’s Trustee, whether by removal, resignation, illness, incapacity, or death, the vacancy will be filled by the appointment of a successor Creditor’s Trustee approved by the Bankruptcy Court after appropriate notice and hearing.

     (f) Powers and Duties of the Creditor’s Trustee. The Creditor’s Trustee shall marshal, maintain, administer, pursue, collect, settle, dispose of, and disperse the Trust Property for the benefit of Allowed Unsecured Claim holders of Class 7. Effective on the Effective Date, the Creditor’s Trustee will be the representative of the Estate as that term is used in Bankruptcy Code §1123(b)(3)(B) and will have the rights and powers provided for in a Bankruptcy Code in addition to any rights and powers granted herein to pursue the Causes of Action. In his or her capacity as the representative of the Estate, the Creditor’s Trustee will be the successor in interest to the Debtor with respect to the Causes of Action. The Creditor’s Trustee will hold all right, title and interest in and to the Causes of Action on behalf of the beneficiaries of the Creditor’s Trust and will pay from the Creditor’s Trust all ordinary and necessary costs of protecting, preserving, investigating and pursuing the Causes of Action. The Creditor’s Trustee will administer the Creditor’s Trust, will liquidate the Causes of Action of the Creditor’s Trust, and will make distributions from the Creditor’s Trust all in the accordance with the terms of the Plan. Unless otherwise excused or exempted from doing so by the Bankruptcy Code, the Creditor’s Trustee will abide by all laws including tax laws and regulations, and will prepare or cause to be prepared all local, state, or federal tax returns, filings, and/or reports that are necessary or appropriate. The Creditor’s Trustee shall also have the power to settle any of the Causes of Action. That Creditor’s Trustee shall have the power to retain and employ, for reasonable compensation and upon reasonable terms professional persons, including but not limited to appraisers, accountants, brokers, attorneys, and clerical assistants to assist in the administration and liquidation of the Trust Property. The Creditor’s Trustee shall have power to borrow funds on reasonable business terms to finance the investigation and litigation of the Causes of Action.

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     (g) Distribution of Proceeds. Proceeds from the liquidation of the Causes of Action shall be disbursed in the following manner and order:

(1)	First, to satisfy any valid loans that have been obtained by the Creditor’s Trust for purposes of financing the Creditor’s Trust activities;
(2)	Second, to pay all costs and expenses related to the care and maintenance of the Trust Property, including but not limited to, the expenses of the Creditor’s Trust (including the fees and expenses of the Creditor’s Trustee and his or her professionals) and the expenses related to prosecution of the Causes of Action and to pay the Active Professionals Claimants included in Class 1(a) on a pro-rata basis in full for remaining fees and costs owed as of the Effective Date. All unpaid fees and costs of the Active Professionals, any fees and costs of the Active Professonals incurred post- Effective Date and all costs and expenses of the Creditor’s Trustee and his or her professionals shall have administrative priority pursuant to 11 U.S.C. section 507 and 503(b) over all other obligations of the Creditor’s Trust.
(3)	Third, to establish and fund a reserve account of no less than $50,000 to provide for future expenses of the Creditor’s Trust (the initial reserve account shall be established by the conveyance of $50,000 from Causes of Action Proceeds free and clear of liens by the Debtor to the Creditor’s Trust on the Effective Date);

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(4)      Fourth, to pay holders of Trust Units on a pro-rata basis with any amounts attributable to an unsecured claim that is still a Disputed Claim as of the date of the distribution being set aside in a separate interest bearing account pending determination by the Court as to whether or not the Claim is an Allowed Unsecured Claim.

     (h) Compensation of the Creditor’s Trustee. The Creditor’s Trustee shall be compensated on an hourly basis and shall not receive compensation until such time as the Creditor’s Trustee files with the Court a written application requesting compensation which includes, at a minimum, a written detailed time statement setting out each task performed and the amount of time spent for each task as well as quarterly reports discussed below. When said application is filed, the Creditor’s Trustee shall send notice to all remaining Trust Unit holders of the Creditor’s Trust. Thereafter, all parties will have fifteen days from service of the notice to object to compensation requested.

     (i) Reporting Requirements. Beginning with a date which is 90 days after the effective date, and continuing quarterly thereafter until the final distribution under the Creditor’s Trust, the Creditor’s Trustee will provide written reports to those Trust Unit holders who request special notice from the Creditor’s Trustee on or after the Effective Date. The reports will provide information on collections and disbursements, administrative costs, settlements, and the Creditor’s Trustee’s ongoing efforts to administer the Trust Property.

     (j) Limitation on Liability. Subject to applicable law, the Creditor’s Trustee will not be liable for any act he or she may do or omit to do as Creditor’s Trustee hereunder while acting in good faith and in the exercise of his or her reasonable business judgment; nor will the Creditor’s Trustee be liable in any event except for his or her own gross negligence or willful fraud or willful misconduct. The foregoing limitation on liability also will apply to any person, including professionals, employed by the Creditor’s Trustee and acting on behalf of the Creditor’s Trustee in the fulfillment of the Creditor’s Trustee’s duties hereunder.

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     (k) Transfer of Trust Property to the Creditor’s Trust. Except as otherwise provided in the Plan, title to the Trust Property, including the Causes of Action and the $50,000 from the Causes of Action Proceeds, will pass to the Creditor Trust on the Effective Date free and clear of all claims and equity interest in accordance with Bankruptcy Code §1141. Note that no other Causes of Action Proceeds, other than the $50,000 described herein, shall be transferred by the Debtor to the Creditor’s Trust. The Creditor’s Trustee will pay or otherwise make distributions on account of the Active Professional’s pro rata claim amounts and thereafter the Trust Unit holders in accordance with the terms of the Plan.

     (l) Effect of Transfer. For federal and applicable state income tax purposes, the transfer of the Trust Property to the Creditor’s Trust will be a disposition of the Trust Property directly to and for the benefit of the beneficiaries of the Creditor’s Trust in partial satisfaction of their claims, immediately followed by a deemed contribution of the Trust Property by the beneficiaries to the Creditor’s Trust. The beneficiaries will be treated as the grantors and deemed owners of the Creditor’s Trust.

     (m) Preservation of Debtor’s Claims, Demands and Causes of Action. All claims and Causes of Action of any kind or nature whatsoever held by, through or on behalf of the Debtor and/or its Estate against any other person, including, but not limited to, all Avoidance Actions, and all claims or Causes of Action arising before the Confirmation Date which has not been resolved or disposed of prior to the Confirmation Date are preserved in full for the benefit of the Creditor’s Trust. The Creditors’ Trust shall be entitled to name the Reorganized Debtor or the Debtor as a nominal party to any claim but shall provide indemnification for any liability that may arise form such action pursuant to a formal agreement to be executed with the RLOC agreement.

     (n) Further Documentation. Within sixty (60) days of Confirmation, the Debtor shall execute any and all further documents and instruments which may be reasonably required to establish the Creditor’s Trust and to assist the Creditor’s Trustee in his or her responsibilities and upon the terms set forth herein.

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     (o) Schedule of Distributions. Distributions shall be made to the Trust Unit holders on semi-annual distribution dates to be determined by the Creditor’s Trustee, except that no distribution shall be necessary when, in the Creditor’s Trustee’s discretion, the Creditor’s Trustee determines that insufficient funds exist in the accounts considering the likely costs and expenses which the Creditor’s Trust is likely to incur and the likely income available to the Creditor’s Trust for the reasonable future.

     (p) Return Distributions. All distributions to Class 7, which are returned by the United States Post Office undelivered, or, which cannot be delivered due to lack of a current address will be retained by the Creditor’s Trustee for said distributee. After the expiration of six (6) months from the date of the first attempted distribution, any unclaimed securities and all future distributions will vest in the Creditor’s Trust, free of any claim of the distributee. The Creditors’ Trust will open a securities account and any such unclaimed securities will be deposited into this account for the benefit of the Creditors’ Trust. The Trustee shall have the authority to sell such securities and use the proceeds for the benefit of the Creditors’ Trust or the Creditors’ Trust may distribute the securities if it bears all transfer fees.

12.5 Further Obligation of Debtor and the Reorganized Debtor.

     (a) Access to Documents. Upon Confirmation, the Reorganized Debtor and will be in possession of various documents and information that may be needed by the Creditor’s Trust for purposes of investigating and pursuing the Causes of Action. Among other things, Debtor has documentation and information containing information about or related to accounts receivable, accounts payable, payments to vendors and other third parties that took place within one year preceding the following bankruptcy, employee agreements, equipment leases, equipment purchase agreements, vendor agreements, investigative reports, demand letters, stockholder agreements, due diligence files, marketing agreements, ledgers, invoices, financial statements, corporate records, stock bond offering documents, stock and bond purchase agreements, loan documents, security agreements, license agreements, etc.

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     (b) Storage of Documents. The Reorganized Debtor agrees to store all such documents for at least two years at their business location and to maintain all of Debtor’s and the Estate’s computerized records including all accounting information until Creditor’s Trust is terminated at no cost to the Creditor’s Trust. All accounting information and other computerized records of the Debtor and the Estate shall be “backed up” by the Reorganized Debtor. The Reorganized Debtor shall provide Creditor’s Trustee, the Trustee’s representatives and professionals with liberal access to all such documentation and information at no cost to the Creditor’s Trust. However, the Reorganized Debtor may elect to transfer all computerized records of the Debtor and the Estate onto a segregated computer system to which Creditor’s Trustee, the Trustee’s representative and professionals shall be given liberal access during regular business hours. The Creditor’s Trustee, the Trustee’s representatives and professionals may make such other arrangements with the Reorganized Debtor for the maintenance and access of documents and information as may be reasonably agreed to between the parties. Two years after the Effective Date, the Reorganized Debtor may notify the Creditor’s Trustee, via written notice, of its intent to dispose of any of the documents. The Creditor’s Trustee shall have thirty days from receipt of such notice to notify the Reorganized Debtor of any documents that the Creditor’s Trustee would like transferred to a different storage site. Upon receipt of such notice, the Reorganized Debtor and the Creditor’s Trustee shall cooperate in effectuating such transfer in a manner, which will preserve the integrity of the documents and the validity of such documentation for use in pursuit of any of the Causes of Action. Any and all of the above-referenced documentation information may be copied at the request of Creditor’s Trustee or the Trustee’s representatives or professionals and such cost of $.10 per copy will be borne by the Creditors’ Trust. Any research assistance provided by the Reorganized Debtor exceeding a cumulative total of 100 hours will be billed to the Creditors’ Trust at $100 per hour.

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     (c) Audit and Work paper access. If the Reorganized Debtor has audits performed, the Reorganized Debtor will request its auditors provide the Creditors’ Trustee access to such audits and all of auditor’s work papers with backup documents within ten days of receipt of a final audit. Further, the Reorganized Debtor agrees to request that its auditors to provide copies of all work papers and underlying documentation for the audits to Creditor’s Trustee, Trustee’s representatives and professionals. The Creditors’ Trust shall pay the extra cost of such copies, documentation or delivery charged to the Reorganized Debtor by the auditors.

     (d) Funding of the Creditor Trust provided by the Reorganized Debtor. The Debtor is conveying to the Creditor’s Trust on the Effective Date $50,000 from the Causes of Action Proceeds free and clear of any liens or encumbrances to operate the Creditors Trust.

     Any lien that the NVL lenders, Navedge or the Reorganized Debtor or their successors, have in any of the Causes of Action or Causes of the Action Proceeds are released on the Effective Date of the Plan.

ARTICLE XIII
CONTINUATION AND TERMINATION OF SECURITY INTERESTS

     Unless otherwise provided in the Plan or in the Final Order, all creditors possessing allowed, secured claims shall retain their liens on any of their collateral the Reorganized Debtor acquires to secure payment of all cash or other property to be distributed to them pursuant to the terms of the Plan. Such liens on the Reorganized Debtor's property shall be deemed relinquished and reconveyed to the Reorganized Debtor upon the payment to the holders of such liens of all money, property or securities due them in satisfaction of their allowed, secured claims pursuant to the terms of the Plan.

     Moreover, once any lien is deemed relinquished and reconveyed to the Reorganized Debtor pursuant to the terms of the Plan, the creditor who had claimed such lien shall immediately deliver to the Reorganized Debtor all documents, properly signed and notarized, needed to document the release of the lien according to any applicable state or federal law. If the required documentation is not supplied within one (1) week after demand there for has been made, the Reorganized Debtor may seek an order from the Bankruptcy Court enforcing the lien release provisions of this Plan or entry of an order declaring the lien to be released or void.

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     Except as stated previously in this Article, all security interests and liens of any kind in any property the Reorganized Debtor acquires under the Plan shall terminate and shall be deemed to have terminated upon the Effective Date of the Plan

ARTICLE XIV INSURANCE

     The Reorganized Debtor shall maintain insurance on all of its and its subsidiaries' tangible personal and real property in an amount not less than the fair market value of that property and shall keep its and its subsidiaries' property in good repair, reasonable wear and tear excepted.

ARTICLE XV
SATISFACTION OF CLAIMS AND INTERESTS

     All classes of allowed claims and allowed interests shall receive the distributions set forth herein on account of and in complete satisfaction of those allowed claims and interests. Without limiting the foregoing, upon the Effective Date of the Plan, each holder (and each successor of a holder) of an Allowed Claim or an Allowed Interest shall be deemed to have waived, relinquished and released any and all of its rights and claims against the Debtor and the Reorganized Debtor, except as provided in the Plan or the Final Order. The Creditor’s Trust, the Debtor’s note holders and the Debtor’s shareholders retain their rights, if any, to pursue claims and causes of action against the Debtor’s directors, officers and employees, non Debtor third parties and Debtor’s Directors and Officers Insurance.

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ARTICLE XVI BINDING NATURE OF THE PLAN

     Upon the entry of the Order Confirming the Plan, the Plan shall bind the Debtor, the Reorganized Debtor, all entities that are to acquire any property under the Plan, all creditors, and all equity security holders, whether or not their claims and interests are impaired under the Plan and whether or not they have accepted the Plan, as determined by § 1141(a) of the Bankruptcy Code.

     This means, in part, that, except as provided by an express order of the Bankruptcy Court or pursuant to the terms of the Plan or the Order Confirming the Plan, all judicial, administrative or other actions or proceedings pending against the Debtor or arising out of claims accrued prior to the confirmation of the Plan shall be permanently enjoined.

ARTICLE XVII
TERMINATION OF THE AUTOMATIC STAY AND DISCHARGE

     The automatic stay imposed by 11 U.S.C. § 362(a) shall terminate when the Final Order becomes non-appealable. Pursuant to Section 1141(a) of the Bankruptcy Code, the entry of the Final Order shall permanently bar the filing and asserting of any claims against the Debtor and the Reorganized Debtor which arose or relate to the period of time prior to the date of entry of that order, except as provided in the Plan or the Order Confirming the Plan. The Creditor’s Trust, the Debtor’s convertible note holders and the Debtor’s shareholders retain their rights, if any, to pursue claims and causes of action against the Debtor’s directors, officers and employees, non Debtor third parties and Debtor’s D&O Insurance.

ARTICLE XVIII IMPLEMENTATION OF THE PLAN.

The Plan will be implemented, in part, as follows:

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18.1 Formation of the required entities. No later than immediately prior to the Effective Date, VTEC shall be designated as the Reorganized Debtor with the Directors specified in Article VI. The Debtor, at its option shall take actions to form or acquire the Operating Subsidiaries, by purchasing shares of common stock at either par value or the amount necessary to pay the legal fees and stock issuance fees of formation. Any funding required to form the Operating Subsidiaries or VTEC shall be provided by Aztoré in the form of additional PLG loans or other Funding Lenders in the form of additional PLG or NVLG loans. The Debtor, at its option, can incorporate in any state. The most likely states the Debtor will select are either Nevada or Arizona. The Debtor is authorized to file Articles of Incorporation authorizing up to 200,000,000 common shares and 25,000,000 undesignated preferred.

18.2 Merger. This Plan provides for the reorganization of Debtor through a merger of the Debtor with VTEC. VTEC, incorporated in Nevada, will be the survivor in the merger. The form of merger document is attached as Exhibit 1. VTEC will operate as a holding company. All assets and rights of the Debtor shall be transferred to the appropriate entity in accordance with the Plan. After all liabilities and claims are settled and all assets transferred, the Plan implemented and the Articles of Merger filed, the Debtor shall be dissolved in accordance with Arizona law.

18.3 Election of Directors of the Operating Subsidiaries. The Directors of the Debtor or the Reorganized Debtor will vote to elect the Officers and Directors of each of the Operating Subsidiaries. Unless determined otherwise by the VTEC Board of Directors, the Officers and Directors of each Operating Subsidiary will be identical to the VTEC Officers and Directors until the first shareholders meeting of each Operating Subsidiary, at which time new officers and directors will be elected.

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18.4 Licensing of the Visitalk Rights. Each Operating Subsidiary shall, in exchange for an Operating License from the Debtor to each Operating Subsidiary for its Visitalk line of business and related rights, issue VTEC 5,000,000 or more as required for rounding shares of Operating Subsidiary Common Stock and sufficient Operating Subsidiary Warranty Units to allow for the Plan Implementation.

18.5 Create an Employee Equity Incentive Plan. The Board of Directors of each entity created under the Plan will be considered to have adopted an employee Equity Incentive Plan for covering up to 3,000,000 shares of common stock. Acceptance of the Plan is deemed the equivalent of a stockholder vote in favor of the employee Equity Incentive Plan. The form of employee Equity Incentive Plan is attached as Exhibit 3 hereto.

18.6 The Board of Directors of the Debtor or the Reorganized Debtor shall oversee implementation of the Plan and be fully empowered to act for the Debtor to implement the Plan. 18.7 The Debtor shall transfer all the Causes of Action and all Causes of Action Proceeds to the Creditors’ Trust and transfer up to 500,000 VTEC Common Shares, 2,000,000 VTEC Warrant Units (both as adjusted for actual issuances under the Plan), 100,000 Operating Subsidiary Common Shares and 400,000 Operating Subsidiary Warrant Units in each Operating Subsidiary to the Class 7 Securities Pool.

18.8 The Board of Directors of the Reorganized Debtor shall take the necessary actions to;

(a)	transfer the Assets to the Reorganized Debtor free and clear of any liens or judgments against such assets;
(b)	elect the officers and directors of the Operating Subsidiaries;
(c)	merge the Debtor with VTEC, its 100% owned subsidiary; and

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(d)    After all such implementation actions have been completed, the Debtor shall have no remaining assets and no remaining liabilities and shall be formally dissolved in accordance with Arizona law.

18.9 The Board of Directors of VTEC and the Operating Subsidiaries shall have all of the powers granted any board of directors by applicable state or federal laws.

18.10 The Board of Directors of VTEC and the Operating Subsidiaries shall have the power to amend the Articles of Incorporation and the Bylaws of VTEC and the Operating Subsidiaries in any manner necessary to carry out the provisions of the Plan. The board of directors shall be entitled to use and exercise all pertinent provisions of state and federal law.

18.11 To implement the issuance of the securities provided for in the Plan, the Board of Directors of VTEC and the Operating Subsidiaries shall take all necessary steps required by the Code, Federal and state laws and to perform such implementation in a cost effective manner, the Board of Directors shall have the authority to vary, alter or revise any of the steps outlined above so long as such change does not negatively affect any of the distributions provided for by the Plan. Any fractional shares due to the election of payment with securities shall be rounded up to the next whole share or Unit.

18.12 The Board of Directors of VTEC and the Operating Subsidiaries shall have the authority to make provision for payment of cash and/or distribution of securities to creditors as required hereby on the Effective Date of the Plan or as otherwise provided herein.

18.13 NOL Restrictions. In order to facilitate the Debtor’s ability to preserve and utilize its NOL’s, VTEC has approved the imposition of a less than 5% limitation on the ability of certain shareholders to acquire additional securities issued by the VTEC (the “5% Limitation”). The Certificate of Incorporation of VTEC specifies that any acquisition of Common Stock or Warrants or other securities made in violation of the 5% Limitation will be null and void ab initio. It also will allow the Reorganized Debtor, in its sole discretion, to exempt from application of the 5% Limitation any acquisition of shares of Common Stock (or of Warrants or other securities), so long as such acquisition will not jeopardize the Company’s ability to preserve and utilize its NOLs.

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     It is the purpose of the 5% Limitation to facilitate the Reorganized Debtor’s ability to preserve and utilize its NOLs and to that end the Board of Directors of the Reorganized Debtor is authorized to take actions, to the extent permitted by law and not inconsistent with the provisions of the 5% Limitation, which it deems necessary or advisable to protect the Company and the interests of holders of its equity and debt securities by maintaining the Company’s ability to preserve and utilize its NOLs. In this regard, the Board of Directors may, to the extent permitted by law, from time to time, establish, modify, amend or rescind, by by-law or otherwise, regulations and procedures not inconsistent with the terms of the 5% Limitation for the orderly application, administration and implementation of the provisions of the 5% Limitation.

     As a mechanism for enforcing the 5% Limitation, the Certificate of Incorporation of the Company provides that any transfer of shares of Common Stock, Warrants or other securities in violation of the 5% Limitation is automatically null and void as to that number of shares of Common Stock or Warrants or other securities which caused the acquirer thereof (the “Purported Owner”) to exceed the 5% Limitation (the shares and/or Warrants or other securities which cause the Purported Owner to exceed the 5% Limitation being herein referred to as the “Excess Shares”).

     The purported transfer of the Excess Shares to the Purported Owner will not be recognized by the Company. Instead, if necessary, the Purported Owner will be instructed to deliver the Excess Shares to, or otherwise place the Excess Shares under the control of, a trustee (the “Share Trustee”) who will proceed forthwith to sell the Excess Shares in the market to a Permitted Transferee.

- - 48 -

18.14 Securities Distribution. The Board of Directors of VTEC shall have the right to distribute any securities issued under the Plan directly into an account at any insured broker-dealer. Any security recipient that desires to have actual certificates shall pay the standard price to the Transfer Agent for the issuance of such requested physical certificate. The Reorganized Debtor may assist creditors in opening accounts to receive any securities in any reasonable way.

18.15 NOL Legend. Certificates evidencing shares of Common Stock and the Warrant Certificates will bear the following or a substantially similar legend notifying the holder of the restrictions imposed by the 5% Limitation:

“Pursuant to provisions of the Certificate of Incorporation of VT Equities Corp. (the “Company”) which are designed to facilitate the Company’s ability to preserve and utilize its net operating loss carryovers for federal income tax purposes, the transfer of the shares represented hereby to any person who would own subsequent thereto 5% or more of the Company’s outstanding common stock or other securities (as calculated pursuant to the provisions of the Certificate of Incorporation of the Company) is restricted and will not be recognized except in certain circumstances. Copies of the applicable provisions of the Certificate of Incorporation and the regulations adopted by the Board of Directors of the Company there under will be available for inspection at the offices of the Company, and the Company will mail a copy thereof without charge within five days after receipt of a written request for such provisions and regulations sent to the Secretary at such address”.

- - 49 -

18.16 Option to report as an Investment Company. The Reorganized Debtor may choose to act as an investment company if it meets the requirements under Section 6(a)2 of the Investment Company Act of 1940. The Reorganized Debtor is authorized to take such actions to allow it to qualify for this exemption.

18.17 Percentage ownership references under the Plan. All percentage ownership amounts referenced in the Plan, except for the 5% Limitation, are for actual common stock issues and outstanding. Any potential warrant exercises are ignored in such calculations.

18.18 Name Changes and authorized shares. VTEC or the Operating subsidiaries, without further shareholder vote are, prior to the printing of share and warrant certificates, authorized to increase their authorized shares or to change their name to a name more reflective of their business and marketing plans.

ARTICLE XIX
MODIFICATION OF AND AMENDMENTS TO THIS PLAN

     Prior to the entry of the Final Order, the Debtor may propose amendments or modifications in accordance with 11 U.S.C. §1127(a). After confirmation, the Reorganized Debtor may amend this Plan in the manner provided by Section 1127(b) of the Bankruptcy Code.

     The Bankruptcy Court may, at any time, so long as it does not materially or adversely affect the interests of creditors and equity interest holders, remedy defects and omissions or reconcile any inconsistencies herein or in the Final Order as may be appropriate to effectuate this Plan.

ARTICLE XX
REMEDIES FOR DEFAULTS BY THE REORGANIZED DEBTOR

     If the Reorganized Debtor fails to comply with the terms hereof, the holders of unsecured claims or equity interests in any class materially harmed thereby may proceed against the Reorganized Debtor and its property to enforce this Plan, taking any action permissible under federal or state law, in any court of competent jurisdiction.

- - 50 -

     With respect to holders of liens on the Reorganized Debtor’s property, such creditors may act in accordance with any applicable and existing mortgage, deed of trust, security agreement, or other instrument evidencing a lien or encumbrance on their collateral.

ARTICLE XXI
RETENTION OF BANKRUPTCY COURT JURISDICTION

     Following confirmation of this Plan, the Bankruptcy Court shall retain, without limitation, jurisdiction for the following purposes and to provide any relief the Reorganized Debtor may require to effectuate the Plan or any modification of the Plan:

     (a) Deciding the proper classification of any claim, determining the proper allowance for purposes of distribution of claims estimated for purposes of voting, and resolving objections to claims.

     (b) Resolving all disputes regarding title to assets of the Reorganized Debtor and all disputes arising under the Bankruptcy Code;

     (c) Hearing all matters and deciding all issues regarding the prosecution by the Debtor, the Reorganized Debtor or the Creditors’ Trust of any Causes of Action;

(d)	Entering any order required to
	(1)	enforce the rights and powers of the Creditor’s Trustee;
	(2)	removal or appointment of the Creditor’s Trustee or any successor;
	(3)	clarify or establish the formation, matters of form, structure, operations, distribution from, or closure of the Creditors’ Trust; or
	(4)	clarify or approve the allowance, compensation and payment of the Creditors’ Trustee.

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(e)	Correcting of any defect, curing any omission, or reconciling any inconsistency between this Plan and the Final Order as may be appropriate to effectuate the purposes and intent of this Plan;
(f)	Modifying this Plan after confirmation;
(g)	Enforcing and interpreting the terms and conditions of this Plan, any securities issued under this Plan, or any other documentation effectuating this Plan;

     (h)  Resolve any claims or causes of action, including any avoidance actions arising by operation of U.S.C. §§ 542 through 551, against any creditors or equity security holders held by the Debtor, the Reorganized Debtor, the Creditor’s Trust or any creditors of the Debtor;

     (i)  Entering any order required to enforce the rights and powers of the Reorganized Debtor;

     (j)  Determining any claim entitled to priority under Section 507 of the Bankruptcy Code; and

     (k)  Entering any order required to close the Debtor's case.

ARTICLE XXII REQUEST FOR CONFIRMATION

The Debtor and the Co-proponents requests entry of an Order confirming the Plan pursuant to Section 1129 of the Bankruptcy Code.

RESPECTFULLY SUBMITTED this 22^nd day of June, 2004.

By /s/ 015079                                                                      

Mark J. Giunta, Esq.
845 North Third Ave.
Phoenix, Arizona 85003-1408
Attorney for Debtor/Debtor-in-Possession

ORIGINAL AND ONE COPY of the

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Foregoing were filed with the Clerk of the

U.S. Bankruptcy Court this 22nd day of June, 2004.

Copy of the foregoing mailed/or emailed the 22nd day of June, 2004 to:

Dean M. Dinner

Jennings, Haug & Cunningham

2800 N. Central Avenue, Suite 1800

Phoenix, Arizona 85004-1049

Kelly G. Black

Jackson White Gardner Weech & Walker P.C.

40 North Center, Suite 200

Mesa, Arizona 85201

Carolyn J. Johnsen

Edward M. Zachary

Gallagher & Kennedy

2575 E. Camelback Road, 11^th floor

Phoenix, Arizona 85016-9225

Paul S. Gerding

Paul S. Gerding, Jr.

Lieberman, Dodge, Gerding, Kothe

& Anderson, Ltd.

Phoenix Corporate Center

3003 North Central Avenue, Suite 1800

Phoenix, Arizona 85012-2909

Eric E. Sagerman, Esq.

Murphy, Sheneman, Julian & Rogers

2049 Century Park East, Suite 2100

Los Angeles, California 90067

Terri P. Durham, Esq.

MP3.Com, Inc.

4790 Eastgate Mall

San Diego, CA 92121-1970

Richard L. Cobb

Hank E. Pearson

LAKE & COBB, PLC

101 North First Avenue

Suite 2000

Phoenix, Arizona 85003

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Michael D. Curran, Esq.

Maynard Murray Cronin & O’Sullivan, P.L.C.

3200 North Central Avenue, Suite 2300

Phoenix, Arizona 85012

Dorian Daley

Assistant General Counsel

Oracle Corporation

500 Oracle Parkway

Mail Stop 5op7

Redwood City, CA 94065

Lawrence M. Schwab, Esq.

Thomas M. Gaa, Esq.

Bialson, Bergen & Schwab

2600 El Camino Real, Suite 300

Palo Alto, CA 94306

Christopher R. Kaup, Esq.

Tiffany & Bosco, P.A.

1850 North Central Ave, 5^th Floor, VIAD Tower

Phoenix, AZ 85004-4546

Robert Miller, Esq.

Bryan Cave LLP

Two North Central Ave., Suite 2200

Phoenix, AZ 85004-4406

Arnold Reyes

The Reyes Law Firm P.C.

4407 Bee Cave Road, Suite 512

Austin, TX 78746-6496

Ronald E. Warnicke, Esq.

Warnicke & Littler, PLC

1411 North Third Street

Phoenix, AZ 85004

Michael R. King

GAMMAGE & BURNHAM, P.L.C.

Two North Central, 18^th Floor

Phoenix, Arizona 85004

Rick Cuellar

United States Trustee’s Office

P.O. Box 36170

- - 54 -

Phoenix, Arizona 85067

MetroGroup

26 Broadway, Suite 400

New York, NY 1004

Att: Marcus L. Arky, Esq.

Kesha M. Jennings

- - 55 -

EX-3.1

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

OF

CHINA GOLDEN DRAGON TRAVEL GROUP

(the “Corporation”)

Effective as of January 14, 2009

_______________________________________________________

ARTICLE I

OFFICES

Section 1.1.

Registered Office. The registered office and registered agent of the Corporation shall be as from time to time set forth in the Corporation’s Articles of Incorporation.

Section 1.2.

Other Offices. The Corporation may also have offices at such other places, both within and without the State of Nevada, as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

STOCKHOLDERS

Section 2.1.

Place of Meetings. All meetings of the stockholders for the election of Directors shall be held at such place, within or without the State of Nevada, as may be fixed from time to time by the Board of Directors.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Nevada, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.2.

Annual Meeting. An annual meeting of the stockholders shall be held at such time as may be determined by the Board of Directors, at which meeting the stockholders shall elect a Board of Directors and transact such other business as may properly be brought before the meeting.

Section 2.3.

List of Stockholders. At least ten days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order, with the address of and the number of voting shares registered in the name of each, shall be prepared by the officer or agent having charge of the stock transfer books.  Such list shall be kept on file at the registered office of the Corporation for a period of ten days prior to such meeting and shall be subject to inspection by any stockholder at any time during usual business hours. Such list shall be produced and kept open at the time and place of the meeting during the whole time thereof, and shall be subject to the inspection of any stockholder who may be present.

Section 2.4.

Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by law, by the Articles of Incorporation or by these Amended and Restated Bylaws, may be called by the Chief Executive Officer (if any) or the President or the Board of Directors, or shall be called by the President or Secretary at the request in writing of the holders of not less than thirty percent of all the shares issued, outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.  Business transacted at all special meetings shall be confined to the purposes stated in the notice of the meeting unless all stockholders entitled to vote are present and consent.

 Section 2.5.

Notice. Written or printed notice stating the place, day and hour of any meeting of the stockholders and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than sixty days before the date of the meeting, either personally or by mail, by or at the direction of the Chief Executive Officer (if any), the President, the Secretary, or the officer or person calling the meeting, to each stockholder of record entitled to vote at the meeting.  If mailed, such notice shall be deemed to be delivered when deposited in the mail, addressed to the stockholder at his address as it appears on the stock transfer books and records of the Corporation or its transfer agent, with postage thereon prepaid.

Section 2.6.

Quorum. At all meetings of the stockholders, the presence in person or by proxy of the holders of a majority of the shares issued and outstanding and entitled to vote shall be necessary and sufficient to constitute a quorum for the transaction of business except as otherwise provided by law, by the Articles of Incorporation or by these Amended and Restated Bylaws.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At such adjourned m eeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.

Section 2.7.

Voting. When a quorum is present at any meeting of the Corporation’s stockholders, the vote of the holders of a majority of the shares having voting power present in person or represented by proxy at such meeting shall decide any questions brought before such meeting, unless the question is one upon which, by express provision of law, the Articles of Incorporation or these Amended and Restated Bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question.  The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

Section 2.8.

Method of Voting. Each outstanding share of the Corporation’s capital stock shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders, except to the extent that the voting rights of the shares of any class or classes are otherwise provided by applicable law or the Articles of Incorporation, as amended from time to time.  At any meeting of the stockholders, every stockholder having the right to vote shall be entitled to vote in person or by proxy appointed by an instrument in writing subscribed by such stockholder or by his duly authorized attorney-in-fact and bearing a date not more than 6 months prior to such meeting, unless such instrument provides for a longer period.  Each proxy shall be revocable unless expressly provided therein to be irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power.  Such proxy shall be filed with the Secretary of the Corporation prior to or at the time of the meeting.  Voting for directors shall be in accordance with Article III of these Amended and Restated Bylaws.  Voting on any question or in any election may be by voice vote or show of hands unless the presiding officer shall order or any stockholder shall demand that voting be by written ballot.

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Section 2.9.

Record Date; Closing Transfer Books. The Board of Directors may fix in advance a record date for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such record date to be not less than ten nor more than sixty days prior to such meeting, or the Board of Directors may close the stock transfer books for such purpose for a period of not less than ten nor more than sixty days prior to such meeting.  In the absence of any action by the Board of Directors, the date upon which the notice of the meeting is mailed shall be the record date.

Section 2.10.

Action By Consent. Any action required or permitted by law, the Articles of Incorporation, or these Amended and Restated Bylaws to be taken at a meeting of the stockholders of the Corporation may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by stockholders holding at least a majority of the voting power; provided that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required.  Such signed consent shall be delivered to the Secretary for inclusion in the Minute Book of the Corporation.

ARTICLE III

BOARD OF DIRECTORS

Section 3.1.

Management. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, who may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law, the Articles of Incorporation, a stockholders’ agreement or these Amended and Restated Bylaws directed or required to be exercised or done by the stockholders.

Section 3.2.

Qualification; Election; Term. None of the directors need be a stockholder of the Corporation or a resident of the State of Nevada.  The directors shall be elected by plurality vote at the annual meeting of the stockholders, except as hereinafter provided, and each director elected shall hold office until his successor shall be elected and qualified.

Section 3.3.

Number. The number of directors of the Corporation shall be fixed as the Board of Directors may from time to time designate.  No decrease in the number of directors shall have the effect of shortening the term of any incumbent director.

Section 3.4.

Removal. Any director may be removed either for or without cause at any special meeting of stockholders by the affirmative vote of at least two-thirds of the voting power of the issued and outstanding stock entitled to vote; provided, however, that notice of intention to act upon such matter shall have been given in the notice calling such meeting.

Section 3.5.

Vacancies. Any vacancy occurring in the Board of Directors by death, resignation, removal or otherwise may be filled by an affirmative vote of at least a majority of the remaining directors though less than a quorum of the Board of Directors.  A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office.  A directorship to be filled by reason of an increase in the number of directors may be filled by the Board of Directors for a term of office only until the next election of one or more directors by the stockholders.

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Section 3.6.

Place of Meetings. Meetings of the Board of Directors, regular or special, may be held at such place within or without the State of Nevada as may be fixed from time to time by the Board of Directors.

Section 3.7.

Annual Meeting. The first meeting of each newly elected Board of Directors shall be held without further notice immediately following the annual meeting of stockholders and at the same place, unless by unanimous consent or unless the directors then elected and serving shall change such time or place.

Section 3.8.

Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by resolution of the Board of Directors.

Section 3.9.

Special Meetings. Special meetings of the Board of Directors may be called by the Chief Executive Officer (if any) or President on oral or written notice to each director, given either personally, by telephone, by telegram or by mail, given at least forty-eight hours prior to the time of the meeting.  Special meetings shall be called by the Chief Executive Officer, President or the Secretary in like manner and on like notice on the written request of a majority of directors.  Except as may be otherwise expressly provided by law, the Articles of Incorporation or these Amended and Restated Bylaws, neither the business to be transacted at, nor the purpose of, any special meeting need to be specified in a notice or waiver of notice.

Section 3.10.

Quorum. At all meetings of the Board of Directors the presence of a majority of the number of directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the affirmative vote of at least a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by law, the Articles of Incorporation or these Amended and Restated Bylaws.  If a quorum shall not be present at any meeting of directors, the directors present thereat may adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be present.

Section 3.11.

Interested Directors. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) the fact as to his relationship or interest and as to the contract or transaction is known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the fact as to his relationship or interest and as to the contract or transaction is known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved, or ratified by the Board of Directors, a committee thereof, or the stockholders.  Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

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Section 3.12.

Committees. The Board of Directors may, by resolution passed by a majority of the whole Board, designate committees, each committee to consist of two or more directors of the Corporation, which committees shall have such power and authority and shall perform such functions as may be provided in such resolution.  Such committee or committees shall have such name or names as may be designated by the Board and shall keep regular minutes of their proceedings and report the same to the Board of Directors when required.

Section 3.13.

Action by Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or any committee of the Board of Directors may be taken without such a meeting if a consent or consents in writing, setting forth the action so taken, is signed by all the members of the Board of Directors or such other committee, as the case may be.

Section 3.14.

Compensation of Directors. Directors shall receive such compensation for their services, and reimbursement for their expenses as the Board of Directors, by resolution, shall establish; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

ARTICLE IV

NOTICE

Section 4.1.

Form of Notice. Whenever required by law, the Articles of Incorporation or these Amended and Restated Bylaws, notice is to be given to any director or stockholder, and no provision is made as to how such notice shall be given, such notice may be given: (a) in writing, by mail, postage prepaid, addressed to such director or stockholder at such address as appears on the books and records of the Corporation or its transfer agent; or (b) in any other method permitted by law.  Any notice required or permitted to be given by mail shall be deemed to be given at the time when the same shall be deposited in the United States mail.

Section 4.2.

Waiver. Whenever any notice is required to be given to any stockholder or director of the Corporation as required by law, the Articles of Incorporation or these Amended and Restated Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a stockholder or director at a meeting shall constitute a waiver of notice of such meeting, except where such stockholder or director attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

ARTICLE V

OFFICERS AND AGENTS

Section 5.1.

In General. The officers of the Corporation shall be elected by the Board of Directors and shall be a President, a Treasurer, and a Secretary.  The Board of Directors may also elect a Chairman of the Board, a Chief Executive Officer, a Chief Operating Officer, a Chief Financial Officer, and one or more Vice Presidents, Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers.  Any two or more offices may be held by the same person.

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Section 5.2.

Election. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall elect the officers, none of whom need be a member of the Board of Directors.

Section 5.3.

Other Officers and Agents. The Board of Directors may also elect and appoint such other officers and agents as it shall deem necessary, who shall be elected and appointed for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board.

Section 5.4.

Salaries. The salaries of all officers and agents of the Corporation shall be fixed by the Board of Directors or any committee of the Board, if so authorized by the Board.

Section 5.5.

Term of Office and Removal. Each officer of the Corporation shall hold office until his death, or his resignation or removal from office, or the election and qualification of his successor, whichever shall first occur.  Any officer or agent elected or appointed by the Board of Directors may be removed at any time, for or without cause, by the affirmative vote of a majority of the whole Board of Directors, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.  If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors.

Section 5.6.

Employment and Other Contracts. The Board of Directors may authorize any officer or officers or agent or agents to enter into any contract or execute and deliver any instrument in the name or on behalf of the Corporation, and such authority may be general or confined to specific instances.  The Board of Directors may, when it believes the interest of the Corporation will best be served thereby, authorize executive employment contracts which will contain such terms and conditions as the Board of Directors deems appropriate.  

Section 5.7.

Chairman of the Board. The Chairman of the Board, subject to the direction of the Board of Directors, shall perform such executive, supervisory and management functions and duties as from time to time may be assigned to him or her by the Board of Directors.  The Chairman of the Board shall preside at all meetings of the stockholders of the Corporation and all meetings of the Board of Directors.

Section 5.8.

Chief Executive Officer. The Chief Executive Officer shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect.  The Chief Executive Officer shall preside at all meetings of the stockholders of the Corporation and all meetings of the Board of Directors in the absence of the Chairman of the Board.

Section 5.9.

President. The President shall be subject to the direction of the Board of Directors and the Chief Executive Officer (if any), and shall have general charge of the business, affairs and property of the Corporation and general supervision over its other officers and agents.  The President shall see that the officers carry all other orders and resolutions of the Board of Directors into effect.  The President shall execute all authorized conveyances, contracts, or other obligations in the name of the Corporation except where required by law to be otherwise signed and executed and except where the signing and execution shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation or reserved to the Board of Directors or any committee thereof.  The President shall preside at all meetings of the stockholders of the Corporation and all meetings of the Board of Directors in the absence of the Chairman of the Board and the Chief Executive Officer.  The President shall perform all duties incident to the office of the President and such other duties as may be prescribed by the Board of Directors from time to time.

-6-

Section 5.10.

Chief Operating Officer. The Chief Operating Officer shall be subject to the direction of the Chief Executive Officer (if any), the President and the Board of Directors and shall have day-to-day managerial responsibility for the operation of the Corporation.

Section 5.11.

Chief Financial Officer. The Chief Financial Officer shall be subject to the direction of the Chief Executive Officer (if any), the President and the Board of Directors and shall have day-to-day managerial responsibility for the finances of the Corporation.

Section 5.12.

Vice Presidents. Each Vice President shall have such powers and perform such duties as the Board of Directors or any committee thereof may from time to time prescribe, or as the President may from time to time delegate to him.  In the absence or disability of the President, any Vice President may perform the duties and exercise the powers of the President.

Section 5.13.

Secretary. The Secretary shall attend all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose.  The Secretary shall perform like duties for the Board of Directors when required.  He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors and shall perform such other duties as may be prescribed by the Board of Directors under whose supervision he shall be.  He shall keep in safe custody the seal of the Corporation. He shall be under the supervision of the President.  He shall perform such other duties and have such other authority and powers as the Board of Directors may from time to time prescribe or as the President may from time to time delegate.

Section 5.14.

Assistant Secretaries. Each Assistant Secretary shall have such powers and perform such duties as the Board of Directors may from time to time prescribe or as the President may from time to time delegate to him.

Section 5.15.

Treasurer. The Treasurer shall have the custody of all corporate funds and securities, shall keep full and accurate accounts of receipts and disbursements of the Corporation, and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors.  He shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, shall render to the Directors, at the regular meetings of the Board of Directors, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation, and shall perform such other duties as the Board of Directors may prescribe or the President may from time to time delegate.

Section 5.16.

Assistant Treasurers. Each Assistant Treasurer shall have such powers and perform such duties as the Board of Directors may from time to time prescribe or as the President may from time to time delegate to him.

Section 5.17.

Bonding. If required by the Board of Directors, all or certain of the officers shall give the Corporation a bond, in such form, in such sum, and with such surety or sureties as shall be satisfactory to the Board of Directors, for the faithful performance of the duties of their office and for the restoration to the Corporation, in case of their death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the Corporation.

- -7-

ARTICLE VI

CERTIFICATES OF SHARES

Section 6.1.

Form of Certificates.  The Corporation may, but is not required to, deliver to each stockholder a certificate or certificates, in such form as may be determined by the Board of Directors, representing shares to which the stockholder is entitled.  Such certificates shall be consecutively numbered and shall be registered on the books and records the Corporation or its transfer agent as they are issued.  Each certificate shall state on the face thereof the holder’s name, the number, class of shares, and the par value of such shares or a statement that such shares are without par value.

Section 6.2.

Shares without Certificates.  The Board of Directors may authorize the issuance of uncertificated shares of some or all of the shares of any or all of its classes or series.  The issuance of uncertificated shares has no effect on existing certificates for shares until surrendered to the Corporation, or on the respective rights and obligations of the stockholders. Unless otherwise provided by the Nevada Revised Statutes, the rights and obligations of stockholders are identical whether or not their shares of stock are represented by certificates.  Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send the stockholder a written statement containing the information required on the certificates pursuant to Section 6.1.  At least annually thereafter, the Corporation shall provide to its stockholders of record, a written statement confirming the information contained in the informational statement prev iously sent pursuant to this Section.  

Section 6.3.

Lost Certificates. The Board of Directors may direct that a new certificate be issued, or that uncertificated shares be issued, in place of any certificate theretofore issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost or destroyed.  When authorizing such issue of a new certificate or uncertificated shares, the Board of Directors, in its discretion and as a condition precedent to the issuance thereof, may require the owner of such lost or destroyed certificate, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond, in such form, in such sum, and with such surety or sureties as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed.  When a certificate has been lost, apparently dest royed or wrongfully taken, and the holder of record fails to notify the Corporation within a reasonable time after he has notice of it, and the Corporation registers a transfer of the shares represented by the certificate before receiving such notification, the holder of record is precluded from making any claim against the Corporation for the transfer or a new certificate or uncertificated shares.

Section 6.4.

Transfer of Shares. Shares of stock shall be transferable only on the books of the Corporation or its transfer agent by the holder thereof in person or by his duly authorized attorney.  Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate representing shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation or the transfer agent of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

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Section 6.5.

Registered Stockholders. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.

ARTICLE VII

GENERAL PROVISIONS

Section 7.1.

Dividends. Dividends upon the outstanding shares of the Corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting.  Dividends may be declared and paid in cash, in property, or in shares of the Corporation, subject to the provisions of the Nevada Revised Statutes and the Articles of Incorporation.  The Board of Directors may fix in advance a record date for the purpose of determining stockholders entitled to receive payment of any dividend, such record date to be not more than sixty days prior to the payment date of such dividend, or the Board of Directors may close the stock transfer books for such purpose for a period of not more than sixty days prior to the payment date of such dividend.  In the absence of any action by the Board of Directors, the date upon which the Board of Directors adopts the resolution declaring such dividend shall be the record dat e.

Section 7.2.

Reserves. There may be created by resolution of the Board of Directors out of the surplus of the Corporation such reserve or reserves as the directors from time to time, in their discretion, think proper to provide for contingencies, or to equalize dividends, or to repair or maintain any property of the Corporation, or for such other purpose as the directors shall think beneficial to the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.  Surplus of the Corporation to the extent so reserved shall not be available for the payment of dividends or other distributions by the Corporation.

Section 7.3.

Telephone and Similar Meetings. Stockholders, directors and committee members may participate in and hold a meeting by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other.  Participation in such a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

Section 7.4.

Books and Records. The Corporation shall keep correct and complete books and records of account and minutes of the proceedings of its stockholders and Board of Directors, and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its stockholders, giving the names and addresses of all stockholders and the number and class of the shares held by each.

Section 7.5.

Checks and Notes. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

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Section 7.6.

Loans. No loans shall be contracted on behalf of the Corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.

Section 7.7.

Fiscal Year. The fiscal year of the Corporation shall be fixed, and shall be subject to change, by the Board of Directors.

Section 7.8.

Seal. The Corporation may have a seal, and such seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.  Any officer of the Corporation shall have authority to affix the seal to any document requiring it.

Section 7.9.

Indemnification. The Corporation shall indemnify its directors to the fullest extent permitted by the Nevada Revised Statutes and may, if and to the extent authorized by the Board of Directors, so indemnify its officers and any other person whom it has the power to indemnify against liability, reasonable expense or other matter whatsoever.

Section 7.10.

Insurance. The Corporation may at the discretion of the Board of Directors purchase and maintain insurance on behalf of any person who holds or who has held any position identified in Section 7.9 against any and all liability incurred by such person in any such position or arising out of his status as such.

Section 7.11.

Resignation. Any director, officer or agent may resign by giving written notice to the President or the Secretary.  Such resignation shall take effect at the time specified therein or immediately if no time is specified therein. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 7.12.

Off-Shore Offerings.  In all offerings of securities pursuant to Regulation S of the Securities Act of 1933, as amended (the “Act”), the Corporation shall require that its stock transfer agent refuse to register any transfer of securities not made in accordance with the provisions of Regulation S, pursuant to registration under the Act or an available exemption thereunder.

Section 7.13.

Amendment of Bylaws. These Amended and Restated Bylaws may be altered, amended or repealed at any meeting of the Board of Directors at which a quorum is present, by the affirmative vote of a majority of the Directors present at such meeting.

Section 7.14.

Invalid Provisions. If any part of these Amended and Restated Bylaws shall be held invalid or inoperative for any reason, the remaining parts, so far as possible and reasonable, shall be valid and operative.

Section 7.15.

Relation to Articles of Incorporation. These Amended and Restated Bylaws are subject to, and governed by, the Articles of Incorporation.

***

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EX-4.1

EX-4.2

Exhibit 4.2

visitalk.com, Inc. Bankruptcy Plan Distribution

WARRANTSIN VISITALK CAPITAL CORPORATION

AND ITS

OPERATING SUBSIDIARIES

CLASSES 1 THROUGH 7

Master Warrant Agreement and related information Booklet

PLAN WARRANT AGREEMENT

ACCEPTANCE AND EFFECTIVE DELIVERY REQUIRED

This Plan Warrant Agreement is effective as of the Effective Date of the Second Joint Plan of Reorganization of visitalk.com, Inc. and other Co-Proponents dated June 22, 2004. This Plan Warrant Agreement and the Plan Warrants are only valid if a Warrant Holder executes a Warrant Acceptance and Effective Delivery Agreement before March 31, 2006; and such Warrant Acceptance and Effective Delivery Agreement is received by Visitalk Capital Corporation before April 15, 2006.

TABLE OF CONTENTS

	Page
PLAN WARRANT AGREEMENT
BACKGROUND AND DEFINITIONS	1
ARTICLE I - THE PLAN WARRANTS	2
ARTICLE II - EXERCISE PERIOD; REDEMPTION	3
ARTICLE III - ISSUANCE AND TRANSFER OF OWNERSHIP	4
ARTICLE IV - EXERCISE OF PLAN WARRANTS	6
ARTICLE V - LIMITATIONS ON EXERCISE	7
ARTICLE VI - RIGHTS AND DUTIES OF WARRANT AGENT	8
ARTICLE VII - CONTINGENT WARRANT HOLDER AGENT	10
ARTICLE VIII - RIGHTS AND DUTIES OF WARRANT HOLDERS	11
ARTICLE IX - NOTICES	11
ARTICLE X - MISCELLANEOUS	13
EXHIBITS TO THE PLAN WARRANT AGREEMENT
A - ISSUERS COVERED BY THE PLAN WARRANT AGREEMENT	16
B - FORM OF WARRANT ACCEPTANCE AND EFFECTIVE DELIVERY AGREEMENT	17
C - FORM OF CLAIM HOLDER OWNERSHIP SCHEDULE	19
D - FORM OF WARRANT CERTIFICATE OR WARRANT UNIT CERTIFICATE	20
E - FORM OF SUBSCRIPTION AND EXERCISE NOTICE	23
F - FORM OF ELECTION TO CERTIFICATE AGREEMENT	25
G - FORM OF CONTINGENT AGENT AGREEMENT	27

PLAN WARRANT AGREEMENT

This Plan Warrant Agreement (the “Agreement”) is effective as of the Effective Date of the Second Joint Plan of Reorganization of visitalk.com, Inc. and other Co-Proponents dated June 22, 2004 (the “Plan”). The Warrant Holders, as defined below, are a party to this Agreement pursuant to the operation of the Plan. However, this Agreement and the Plan Warrants, which are the subject of this Agreement, are only valid if a Warrant Holder executes a “Warrant Acceptance and Effective Delivery Agreement” before March 31, 2006 and such Warrant Acceptance and Effective Delivery Agreement is received by Visitalk Capital Corporation (“VCC”) before April 15, 2006. VCC is executing this Agreement and other related agreements necessary to implement this Agreement as an Issuer, as defined below, and as an agent for the other Issuers (the “Implementation Agent”), all of which are controlled by VCC.

BACKGROUND AND DEFINITIONS 

A.The subject matter of this Agreement is the Series A through F Plan Warrants issued in accordance with the Plan (the “Plan Warrants”) for each of the companies on the listing attached hereto as Exhibit A and their successors (each such entity hereinafter an “Issuer” or jointly “Issuers”).

B.Capitalized terms used but not otherwise defined in this Agreement have the same meaning as defined in the Plan.

C.The Issuers are entities formed or authorized under the Plan, were Co-Proponents of the Plan, and, pursuant to certain exemptions provided in the Bankruptcy Code, are authorized to issue the Plan Warrants and, upon the exercise of the Plan Warrants, Shares, without registration of the Plan Warrants or Shares under applicable securities laws.

D.The term “Share” refers to one share of common stock of an applicable Issuer.

E.The term “Claim” refers to an allowed claim under the Plan and the term “Claim Holder” is the owner of such Claim.

F.The maximum numbers of Plan Warrants to be issued for each Claim are specified in the Plan

G.The registered holder of any Plan Warrant is hereinafter referred to as a “Warrant Holder.”

H.The Issuers and the Warrant Holders desire to specify certain matters regarding the Plan Warrants. In accordance with the Plan, each Issuer will issue six series of Plan Warrants (each, a “Series”), designated as A Warrants, B Warrants, C Warrants, D Warrants, E Warrants and F Warrants, as further described in Article I. The term “Plan Warrants” refers to all of the Series of Plan Warrants as a group.

I.Each “Plan Warrant” entitles the Warrant Holder to purchase, subject to the terms and conditions set forth in this Plan Warrant Agreement, at any time on or after September 17, 2004, and prior to the close of business on the Expiration Date, but not thereafter (unless the Plan Warrant is earlier the subject of a Call or the Plan Warrant Expiration Date is extended by the Issuer), one fully paid and non-assessable share of an Issuer’s common stock (“Common Stock”), or equivalent security of any successor thereto, at a purchase price equal to the “Exercise Price”, as adjusted, unless lowered by the Issuer as set forth in Article I.

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Plan Warrant Agreement 

J.Pursuant to the Plan, each Issuer will initially act as its own agent and perform the duties enumerated in this Agreement (the “Warrant Agent”) but each Issuer may determine, in their sole discretion, to engage another qualified person to act as its Warrant Agent to perform the duties and activities hereunder. Any reference to Warrant Agent refers to an individual Issuer, acting as its own Warrant Agent, or the appointed Warrant Agent of the Issuer, as the case may apply.

AGREEMENTS

NOW, THEREFORE, in consideration of the above recitals, the following representations, warranties, covenants and conditions, and other good and valuable consideration, the receipt of which is acknowledged, the Warrant Holders, by executing the “Warrant Acceptance and Effective Delivery Agreement,” a form of which is attached hereto as Exhibit B, agree with each Issuer as follows:

ARTICLE I

THE PLAN WARRANTS

1.1Each Plan Warrant has a specified “Exercise Price,” which is the amount, as adjusted from time to time as provided in Section 1.4 below, at which a Warrant Holder is entitled to purchase one Share from an Issuer. A Warrant Holder may exercise all or any number of a Series of Plan Warrants resulting in the purchase of a whole number of Shares.

1.2Initial Exercise prices. Each Series of Plan Warrants has an initial Exercise Price as set forth below.

a)Each Series A Warrant (an “A Warrant”) has an initial Exercise Price of $2.00.

b)Each Series B Warrant (a “B Warrant”) has an initial Exercise Price of $2.00.

c)Each Series C Warrant (a “C Warrant”) has an initial Exercise Price of $3.00.

d)Each Series D Warrant (a “D Warrant”) has an initial Exercise Price of $3.00.

e)Each Series E Warrant (an “E Warrant”) has an initial Exercise Price of $4.00.

f)Each Series F Warrant (an “F Warrant”) has an initial Exercise Price of $4.00.

1.3     Number of Plan Warrants. The “Claim Holder Ownership Schedule”, attached hereto as Exhibit C, specifies, by Issuer, the number of each Series of Plan Warrants to be delivered to any Warrant Holder for a specified Claim under the Plan. Pursuant to the Plan, an Issuer, in their sole discretion, has the option of issuing the Plan Warrants as “Plan Warrant Unit.” The Plan Warrants on Exhibit C are presented as Plan Warrant Units with each unit consisting of one Series A Warrant, one Series B Warrant, one Series C Warrant, one Series D Warrant, one Series E Warrant and one Series F Warrant. Pursuant to the Plan, in the future, a Plan Warrant Unit may consist of any combination of the Plan Warrants as determined by each Issuer in their sole discretion.

2

Plan Warrant Agreement 

1.4     Adjustments in Number of Plan Warrants and Exercise Price. If, prior to the exercise of any Plan Warrant, an Issuer shall have effected one or more stock splits-ups, stock dividends or other increases or reductions of the number of Shares into which the Plan Warrants are exercisable without receiving compensation in money, services or property, then the number of Shares subject to a Plan Warrant may, at the sole discretion of the Issuer, (i) if a net increase shall have been effected in the number of outstanding Shares, be proportionately increased, and the cash consideration payable per share for the Exercise Price be proportionately reduced, or, (ii) if a net reduction shall have been effected in the number outstanding Shares, be proportionately reduced, and the cash consideration payable per Share for the Exercise Price be proportionately increased. Pursuant to the Plan, an Issuer may, in its sole discretion and without further shareholder approval, upon any increase or decrease in the number of shares of its common stock outstanding, elect to (i) keep the terms of any of its Plan Warrants outstanding unchanged, (ii) proportionately increase or decrease the Exercise Price and keep the number of Plan Warrants unchanged or (iii) proportionately increase or decrease the number of Shares issuable upon exercise of the Plan Warrants and keep the Exercise Price unchanged.

1.5Discretionary Reduction in the Plan Warrant Exercise Price. An Issuer may, in its sole discretion and in accordance with the Plan, from time to time and, at any time, reduce the Exercise Price of any Plan Warrant subject to this Agreement, including a temporary reduction in the Exercise Price.

ARTICLE II

EXERCISE PERIOD; REDEMPTION

2.1Plan Warrant Exercises. Unless individually extended as provided herein, the Plan Warrants will expire at 5:00 p.m., MST on March 17, 2006 (the “Warrant Expiration Date”).

a)All Plan Warrants hereunder may be exercised at any time after the Effective Date of this Agreement and prior to the Warrant Expiration Date.

b)After any Warrant Expiration Date, unless such date is extended by an Issuer and except as provided in Article VII, any unexercised Plan Warrants will be void and all rights of the Warrant Holders shall cease.

2.2Redemption. At any time prior to any Expiration Date, each Issuer, in its sole discretion and in accordance with the Plan, may redeem some or all of any then outstanding Plan Warrants for $.0001 per Plan Warrant (“Redemption Price”). In accordance with the Plan, an Issuer may choose to redeem all or any portion of a Series of Plan Warrants, which may be selected on a pro rata basis, by random lot or as otherwise fairly determined, all in the Issuer’s sole discretion. Upon an Issuer’s determination to redeem any Plan Warrants, such Issuer shall give notice (“Redemption Notice”) of its determination to all affected Warrant Holders and the Warrant Holders shall have the time specified in the Redemption Notice (the “Redemption Date”), which shall not be less than twenty (20) days from the date of such Redemption Notice, to exercise any Plan Warrant as provided herein. Upon expiration of the Redemption Date, and after expiration of the period during which limited rights may be granted to an agent under Article VII (the “Contingent Agent”), but only if one has been appointed by an Issuer as provided in Article VII, the Issuer shall pay the Redemption Price to the Warrant Holders. An Issuer shall not be required to pay any amount less than $1.00 to any Warrant Holder and any amounts less than $1.00 due to any Warrant Holder shall be retained by an Issuer.

3

Plan Warrant Agreement 

2.3Extension of the Warrant Expiration Date. An Issuer may, in its sole discretion and in accordance with the Plan, from time to time and, at any time, extend the Warrant Expiration Date of any Plan Warrant for any period of time. Notice to the Warrant Holders of Plan Warrant changes shall be provided in accordance with Article IX.

ARTICLE III

ISSUANCE AND TRANSFER OF OWNERSHIP

3.1     Form of Plan Warrant. The Plan Warrants may be issued in either uncertificated form (i.e., “Book Entry”) or in registered and certificated form, as determined pursuant to Section 3.2 below.

a)Book Entry Form. If Plan Warrants are issued in uncertificated form (“Book Entry”), the Warrant Agent shall maintain records of the number of Plan Warrants owned by each registered Warrant Holder. The Warrant Agent shall report ownership positions to the Warrant Holders no more than sixty (60) days after the end of each calendar year or, if requested in writing by a Warrant Holder, each calendar quarter. The report shall indicate any transactions regarding the Plan Warrants such as exercises or transfers. The report shall be delivered by regular mail to the address appearing on a Warrant Agent’s records for any Warrant Holder. A Warrant Holder may elect delivery by e-mail or other similar delivery option as an alternative to regular mail. At any time an Issuer determines not to maintain Book Entry for the Plan Warrants, the Issuer it may certificate and deliver the warrants to the Warrant Holders at no cost to the Warrant Holders for the certification.

b)Certificated Form. If in certificated form, the warrant certificates (the “Warrant Certificates”) shall be substantially in the form attached hereto as Exhibit D. Warrant Certificates shall be signed by, or shall bear the facsimile signature of an Executive Officer of each Issuer and shall bear the Issuer’s corporate seal or a facsimile of the Issuer’s corporate seal. If any person, whose facsimile signature has been placed on any Warrant Certificate as the signature of an officer of an Issuer, shall have ceased to be an officer before the Warrant Certificate is countersigned, issued and delivered, the Warrant Certificate shall be countersigned, issued and delivered with the same effect as if the officer had not ceased to be an officer. Any Warrant Certificate may be signed by, or made to bear the facsimile signature of, any person who at the actual date of the preparation of the Warrant Certificate shall be a proper officer of an Issuer to sign the Warrant Certificate even though such person was not an officer upon the date of this Agreement. If a Warrant Agent other than the Issuer is appointed, and Warrant Certificates are issued after the appointment, Warrant Certificates shall be manually countersigned by the Warrant Agent and shall not be valid for any purposes unless so countersigned. The Warrant Agent hereby is authorized to countersign any Warrant Certificate that is properly issued and deliver the same to, or in accordance with the properly documented and verified instruction of, any registered Warrant Holder.

4

Plan Warrant Agreement 

3.2Delivery of Plan Warrant. The Warrant Holder shall select the method of delivery of the Plan Warrant, as set forth in Section 3.1b) above.

a)Book Entry Form. The Warrant Holder, by executing and delivering the “Warrant Acceptance and Effective Delivery Agreement,” a form of which is attached hereto as Exhibit B, hereby elects to have all the Plan Warrants issued in Book Entry form. By executing only the Warrant Acceptance and Effective Delivery Agreement and thereby electing Book Entry for the Plan Warrants, the Warrant Holders also elect to have a Contingent Agent act for them under certain limited circumstances as set forth in Article VII.

b)Certificated Form. If the Warrant holder desires to receive physical delivery of the Plan Warrants (i.e. certificated form), such Warrant Holder must, in addition to executing the Warrant Acceptance and Effective Delivery Agreement as set forth in Section 3.2a) above, also execute and deliver the “Election to Certificate Agreement” as attached hereto as Exhibit F. The Plan Warrants requested in certificated form will be issued in Units consisting of one A Warrant, one B Warrant, one C Warrant, one D Warrant, one E Warrant and one F Warrant for each Issuer. To receive certificates for the Plan Warrants, such Warrant Holder shall remit an issuance fee set forth in the Election to Certificate Agreement. Warrant Holders electing Plan Warrants in certificated form also waive any of the rights and benefits to having the Contingent Agent act for them under certain limited circumstances as set forth in Article VII.

3.3Transfer of Ownership. The Warrant Agent may register the transfer of any outstanding Warrant Certificate or any Book Entry ownership change upon the receipt of appropriate instruments of transfer, in a form satisfactory to both the Issuer and the Warrant Agent, duly executed by the Warrant Holder or a duly authorized attorney, including, if requested by the Warrant Agent, legal opinions and signature verification as required, in the Issuer’s sole discretion. An Assignment Form appears on the back of the “Form of Plan Warrant Certificate” attached hereto as Exhibit D. Upon any registration of transfer, either (i) a new Warrant Certificate shall be issued in the name of and delivered to the transferee and the surrendered Warrant Certificate shall be canceled or (ii) a new Book Entry shall be made reflecting the transfer and notice shall be given to the new Warrant Holder. In the event a certificated warrant is submitted for transfer, a customary cash fee for the transfer must accompany such Plan Warrant prior to the execution of the transfer.

3.4Mutilated or Missing Warrant Certificates. If any Warrant Certificate is mutilated, lost, stolen, or destroyed, an Issuer and the Warrant Agent may, on such terms as to fully indemnify them or otherwise as they may in their sole discretion impose (which shall, in the case of a mutilated Warrant Certificate, include the surrender thereof), and upon the receipt of evidence satisfactory to an Issuer and the Warrant Agent of such mutilation, loss, theft or destruction, issue a substitute Warrant Certificate of like denomination and tenor as the Warrant Certificate so mutilated, lost, stolen or destroyed. Applicants for substitute Warrant Certificates shall comply with such other reasonable regulations and pay any reasonable charges as an Issuer or the Warrant Agent may prescribe including costs of an indemnity bond, if required by an Issuer in its sole discretion.

5

Plan Warrant Agreement 

3.5No Fractional Plan Warrants or Shares. An Issuer shall not be required to issue fractions of Plan Warrants upon the reissue of Plan Warrants due to any adjustments as described in Section 1.4 or otherwise. In lieu of issuing any fractional interest, an Issuer shall round up to the nearest full Plan Warrant. If the total Plan Warrants surrendered by exercise would result in the issuance of a fractional Share, an Issuer shall not be required to issue a fractional Share but rather the aggregate number of Shares issuable will be rounded up to the nearest full share. At an Issuer’s sole option, an Issuer may pay the cash value of any such fractional interest in lieu of issuing additional Shares or Plan Warrants.

ARTICLE IV

EXERCISE OF PLAN WARRANTS

4.1Method of Exercise. Subject to Article V, any Plan Warrant or any multiple of Plan Warrants evidenced by any Warrant Certificate or in Book Entry form may be exercised on or before the Expiration Date. Plan Warrants shall be exercised by the Warrant Holder by either (i) surrendering to the Warrant Agent the Warrant Certificate evidencing the Plan Warrants with a “Subscription and Exercise Notice,” a form of which is attached hereto as Exhibit E, duly completed and executed showing the number of Plan Warrants being exercised, or (ii) if in Book Entry form, by delivering to the Warrant Agent a Subscription and Exercise Notice, duly completed and executed showing the number of Book Entry Plan Warrants being exercised. In addition, the Warrant Holder must deliver to the Warrant Agent, by certified check, or other immediately available funds or wire transfer, in U. S. dollars (“Good Funds”), as the Warrant Agent may elect, payable to the order of the Issuer of such Plan Warrant, the Exercise Price for each Share to be purchased. Both the Subscription and Exercise Notice relating to a certificated Plan Warrant and a Book Entry Plan Warrants are hereinafter referred to as an “Exercise Notice.” The form of Exercise Notice may be changed from time to time and, at any time, in the discretion of the Issuer.

4.2Delivery of Shares. Upon receipt of the Exercise Notice and payment in Good Funds of the full Exercise Price for the Plan Warrants that are the subject to the Exercise Notice, the Warrant Agent shall requisition the issuance of the required Shares, and deliver such Shares in accordance with the properly documented instructions of the Warrant Holder. The certificate for the Shares shall be deemed to be issued, and the person to whom the Shares are issued of record shall be deemed to have become a holder of record of the Shares, as of the date of the surrender of such properly executed Exercise Notice and payment of the Exercise Price in Good Funds, whichever shall last occur. If however, the books of an Issuer with respect to the Shares shall be deemed to be closed, the person to whom such Shares are issued shall be deemed to have become a record holder of such Shares as of the date on which such books of the Issuer shall next be open (whether before, on or after the Expiration Date). All Warrant Certificates surrendered upon exercise of Plan Warrants shall be canceled.

6

Plan Warrant Agreement 

4.3Unexercised Warrants. If less than all the Plan Warrants evidenced by a Warrant Certificate or Book Entry are exercised upon a single occasion, until the Expiration Date, a new Warrant Certificate or Book Entry for the balance of the Plan Warrants not so exercised shall be issued and delivered to or recorded in the Warrant Holder’s name, or in accordance with transfer instructions properly given by the Warrant Holder.

4.4Escrow. Upon the exercise, or conversion of any Plan Warrant, the Warrant Agent, if not the Issuer, shall promptly deposit the payment of the Exercise Price into an escrow account established by mutual agreement of an Issuer and their Warrant Agent at a federally insured commercial bank. All funds deposited in the escrow account will be disbursed on a weekly basis to an Issuer once such funds have been determined by the Warrant Agent to be collected funds. Once the funds are determined to be collected funds, the Warrant Agent shall take actions to cause the certificate(s) representing the Shares issued pursuant to the exercise of the Plan Warrants to be issued.

4.5Expenses. Except for Section 4.6, expenses incurred by the Warrant Agent while acting in the capacity as Warrant Agent will be paid by each Issuer. These expenses, including delivery of Share certificates to the shareholder, will be deducted from the Exercise Price submitted prior to distribution of funds to the Issuer. The Warrant Agent will supply a detailed account statement relating to the number of Shares exercised, names of the registered Warrant Holder(s) and the net amount of funds remitted will be given to the applicable Issuer with each payment.

4.6Fees. At the time of exercise of any Plan Warrant, any cost for Share issuance and transfer fee is to be paid by the Warrant Holder. In the event the Warrant Holder must pay such fees and fails to remit same, the Warrant Agent, if agreed to by the Issuer, may elect to have such fee deducted from the proceeds prior to distribution to an Issuer.

ARTICLE V

LIMITATIONS ON EXERCISE

5.1Limit of Exercise. The Warrant Holder, together with the Warrant Holder’s “affiliates,” as such term is defined in the Securities and Exchange Commission’s rules and regulations, shall not be entitled to exercise any Plan Warrant if, after giving effect to such exercise, the Warrant Holder and its Affiliates would beneficially own in excess of 4.99% of the outstanding Shares of an Issuer. For purposes of the foregoing calculation, the Shares beneficially owned by a Warrant Holder and its Affiliates or acquired by the Warrant Holder and its Affiliates, shall include the number of Shares issuable upon exercise of such Plan Warrant with respect to which the determination is being made, but shall exclude the number of Shares that would be issuable upon (i) exercise of the remaining, non-exercised portion of any Plan Warrants issued by the Issuer and beneficially owned by such Warrant Holder and its Affiliates and subject to a limitation on conversion or exercise and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of an Issuer subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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Plan Warrant Agreement 

5.2Warrant holder Representation. Each Exercise Notice executed by a Warrant Holder shall constitute a representation by such Warrant Holder that, after giving effect to such Exercise Notice, (i) such Warrant Holder will not beneficially own (as determined in accordance with this Article V) in excess of 4.99% of the outstanding Shares of an Issuer and (ii) the Warrant Holder will not have acquired, through exercise of such Plan Warrant or otherwise, a number of Shares that, when added to the number of Shares beneficially owned by the Warrant Holder at the beginning of the sixty (60) day period ending on and including the applicable date of exercise of such Plan Warrant, is in excess of 4.99% of the outstanding Shares of the Issuer following the exercise during the sixty (60) day period ending on and including the date of exercise.

5.3Shares Outstanding. For purposes of this Article V, in determining the number of the outstanding Shares of an Issuer, the Warrant Holder may rely on the number of outstanding Shares (i) as reflected on an Issuer’s web site or, (ii) at such time as an Issuer is a reporting Issuer under the Exchange Act, as reflected in an Issuer’s most recent annual, quarterly or current report filed pursuant to the Exchange Act, or (iii) as reflected in its most recent public announcement or other notice by an Issuer setting forth the number of Shares outstanding. The number of outstanding Shares shall be determined after giving effect to exercises of such Plan Warrant (including the exercise with respect to which this determination is being made) by the Warrant Holder.

5.4Waiver. An Issuer, in their sole discretion, may waive the ownership and exercise limitations imposed by this Article V in whole or in part upon receipt by the Warrant Holder of its undertaking, in form acceptable to an Issuer in its sole discretion, including if necessary legal opinions, to fully comply with all applicable securities law reporting requirements.

ARTICLE VI

RIGHTS AND DUTIES OF WARRANT AGENT

6.1Third Party Warrant Agent. If an Issuer appoints a third party Warrant Agent, which it may do in its sole discretion, and such Warrant Agent accepts the appointment, such Warrant Agent will only accept upon the following terms and conditions, by all of which an Issuer and every Warrant Holder by acceptance of this Plan Warrant Agreement shall be bound:

a) Statements contained in this Agreement and in the Warrant Certificates, if such Warrant Certificates are issued, shall be taken as statements of the Issuer. The Warrant Agent assumes no responsibility for the correctness of any of these statements except those that describe the Warrant Agent or any action taken or to be taken by the Warrant Agent.

b) The Warrant Agent shall not be responsible for any failures of an Issuer to comply with any of an Issuer’s covenants contained in this Agreement or in the Warrant Certificates.

c) The Warrant Agent may consult at any time with counsel satisfactory to it (who may also be counsel for its applicable Issuer) and the Warrant Agent shall incur no liability or responsibility to an Issuer or to any Warrant Holder in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion or the advice of such counsel, provided the Warrant Agent shall have exercised reasonable care in the selection and continued employment of such counsel.

8

Plan Warrant Agreement 

d) The Warrant Agent shall incur no liability or responsibility to an Issuer or to any Warrant Holder for any action taken in reliance upon any notice, resolution, waiver, consent, order, certificate or other paper, document or instrument believed by it to be genuine and to have been signed, sent or presented by the proper party or parties.

e) An Issuer agrees to pay to the Warrant Agent reasonable compensation for all services rendered by the Warrant Agent in the execution of this Agreement, to reimburse the Warrant Agent for all expenses, taxes and governmental charges and all other charges of any kind in nature incurred by the Warrant Agent in the execution of this Agreement and to, except as a result of a Warrant Agent’s negligence or bad faith, indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and counsel fees, for this Agreement.

f) The Warrant Agent shall be under no obligation to institute any action, suit or legal proceeding or to take any other action likely to involve expense unless an Issuer or one or more Warrant Holders shall furnish the Warrant Agent with reasonable security and indemnity for any costs and expense that may be incurred in connection with such action, suit or legal proceeding. However, this proceeding provision shall not affect the power of the Warrant Agent to take such action as the Warrant Agent may consider proper, whether with or without any such security or indemnity. All rights of action under this Agreement or under any of the Plan Warrants may be enforced by the Warrant Agent without the possession of any of the Warrant Certificates or the production thereof at any trial or other proceeding relative thereto, and any such action, suit or proceeding instituted by the Warrant Agent shall be brought in its name as Warrant Agent, and any recovery of judgment shall be for the ratable benefit of the Warrant Holders as their respective rights or interest may appear.

g) The Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Plan Warrants or other securities of an Issuer or become pecuniary interested in any transaction in which an Issuer may be interested, or contract with or lend money to an Issuer or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for an Issuer or for any other legal entity.

6.2Successor Warrant Agent. Any corporation into which the Warrant Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Warrant Agent shall be a party, or any corporation succeeding to the corporate trust business of the Warrant Agent, shall be the successor to the Warrant Agent hereunder without the execution or filing of any paper or any further act of a party or the parties hereto. In any such event or if the name of the Warrant Agent is changed, the Warrant Agent or its successor may adopt the countersignature of the original Warrant Agent and may countersign the Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent.

9

Plan Warrant Agreement 

6.3Appointment of a New Warrant Agent. A Warrant Agent may resign or be discharged by the applicable Issuer from its duties under this Agreement, with or without cause, by one party giving notice in writing to the other, and by giving a date when such resignation or discharge shall take effect, which, unless for cause, such notice shall be sent at least thirty (30) days prior to the date so specified.

a)If a Warrant Agent shall resign, be discharged or shall otherwise become incapable of acting, an Issuer may elect to act as its own Warrant Agent or shall appoint a successor to the Warrant Agent.

b)If an Issuer fails to make such election or appointment within a period of thirty (30) days after it has been notified in writing of the resignation or incapacity of its Warrant Agent, then any Warrant Holder may apply to the Bankruptcy Court in Phoenix, Arizona, for the appointment of a successor to the Warrant Agent.

c)Pending appointment of a successor to the Warrant Agent, either by the Issuer or by the Bankruptcy Court, each Issuer shall carry out the duties of the Warrant Agent. After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as the Warrant Agent without further act or deed and the Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it as the Warrant Agent, and execute and deliver any further assurance, conveyance, act or deed necessary for effecting the delivery or transfer.

d)Failure to give any notice provided for in this Section 6.3, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent.

ARTICLE VII

CONTINGENT WARRANT HOLDER AGENT

7.1Contingent Warrant Holder Agent. By the execution of the Warrant Acceptance and Effective Delivery Agreement and electing Book Entry for the Plan Warrants, the accepting Warrant Holders elect also to have an additional agent act for them only under the limited circumstances and in the manner specified in the “Contingent Agent Agreement” attached hereto as Exhibit G (the “Contingent Agent”). If a Warrant Holder executing the Warrant Acceptance and Effective Delivery Agreement, however, elects to receive physical delivery of the Plan Warrants in accordance with the terms of the “Election to Certificate Agreement” as attached hereto as Exhibit F, the electing Warrant Holder waives any of its rights and benefits to having the Contingent Agent act for them pursuant to the Contingent Agent Agreement.

7.2General Duties of the Contingent Agent. In the event a Warrant Holder fails to exercise a Plan Warrant before an Expiration Date or lapse of date specified in a Redemption Notice, the Contingent Agent shall have the rights specified in the Contingent Agent Agreement to act for the Warrant Holder with limitations and with a duty to the Warrant Holder to remit any benefits pro rata to the Warrant Holders of all similarly affected Plan Warrants.

10

Plan Warrant Agreement 

7.3Subsequent Termination of Contingent Agent. Subsequent to the execution of the Warrant Acceptance and Effective Delivery Agreement, any Warrant Holder may elect to terminate the Contingent Agent Agreement by notifying an Issuer in writing. Any such notice must be received before the Expiration Date of the applicable Plan Warrant.

7.4No Duty to Appoint a Contingent Agent. An Issuer may elect to appoint a Contingent Agent but has no duty to do so. The terms of the Contingent Agent Agreement are controlling regarding all issues pertaining to the Contingent Agent.

ARTICLE VIII

RIGHTS AND DUTIES OF WARRANT HOLDERS

8.1Rights of Warrant Holders.

a)No Warrant Holder, as such, shall have any rights as a shareholder of any Issuer, either at law or equity, and the rights of the Warrant Holders are limited to those rights expressly provided in this Agreement or in the Warrant Certificates, if issued. Notwithstanding any notice to the contrary, an Issuer and their Warrant Agent may treat the registered Warrant Holder in respect to any Warrant Certificate or Book Entry or otherwise as the absolute owner thereof for all purposes.

b)Except as otherwise specifically provided herein, no Warrant Holder shall be entitled to vote or receive dividends or be deemed the holder of Shares of the applicable Issuer for any purpose, nor shall anything contained in any Plan Warrant or this Agreement be construed to confer upon the Warrant Holder including but not limited to (i) any of the rights of a stockholder of an Issuer, (ii) any right to vote, (iii) any right to give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), and (iv) any right to receive notice of meetings or receive dividends or subscription rights prior to the issuance of the Shares that the Warrant Holder is then entitled to receive upon the due exercise of any Plan Warrant.

c)No Plan Warrant shall be construed as imposing any liabilities on any Warrant Holder to purchase any securities of an Issuer, whether such liabilities are asserted by an Issuer or by creditors of an Issuer.

8.2Taxes. The Warrant Holder will pay all taxes attributable to the Plan Warrants or the initial issuance of Shares upon exercise of the Plan Warrants, including any tax that may be payable with respect to any transfer involved in any issue of Warrant Certificates or in the issue of any certificates of Shares upon the exercise of any Plan Warrant in a name other than that of the Warrant Holder.

ARTICLE IX

NOTICES

9.1Notices to Warrant Holders. Any distribution, notice or demand required or authorized by this Agreement to be given or made by an Issuer or by a Warrant Agent to or on the Warrant Holder shall be sufficiently given or made if sent by first class mail, postage prepaid, addressed to the Warrant Holder at their last known address as it appears on the Plan Warrant registration books of the Issuer or the official Warrant Holder listing maintained by the Warrant Agent.

11

Plan Warrant Agreement 

a.Notice of Plan Warrant Changes. Except for an extension of the Expiration Date, which shall be effective when such information is a matter of public record (or upon mailing or other means of notification agreed to by a Warrant Holder, upon any adjustment pursuant to Sections 1.4 and 1.5, an Issuer within twenty (20) days thereafter will (i) file with the Warrant Agent a certificate signed by an officer of the Issuer setting forth the details of the adjustment, the method of calculation and the facts upon which the calculation is based, and (ii) provide written notice of the adjustments to each Warrant Holder as of the record date.

b.Notice of Reorganization. If an Issuer proposes to enter into any reorganization, reclassification, sale of substantially all of its assets, consolidation, merger, dissolution, liquidation or winding up, an Issuer will give notice of the fact at least twenty (20) days prior to the action to all Warrant Holders. This notice shall set forth the facts to indicate the effect of the action (to the extent the effect may be known at the date of the notice) on the Exercise Price and the kind and amount of the Shares or other property deliverable upon exercise of the Plan Warrants.

c.Failure to Give Notice. Without limiting the obligation of an Issuer to provide notice to each Warrant Holder, failure of an Issuer to give notice shall not invalidate corporate action taken by an Issuer.

d.Unclaimed Notices and Bad Addresses. All notices, mailings and distributions under the Plan which are returned by the Post Office undelivered or which cannot be delivered due to the failure of the Warrant Holder to provide the Issuers with a current address will be retained by the Issuer pursuant to Section 5.13 of the Plan, incorporated herein by reference. The Warrant Agent or the Issuer is under no obligation to continue notices, mailings and distributions to known undeliverable or bad addresses.

9.2Notices to Warrant Agent and Issuers. Any notice or demand authorized by this Agreement to be given or made by the Warrant Agent or by any Warrant Holder to or on an Issuer shall be sufficiently given or made if sent by mail, first class, certified or registered, postage prepaid, addressed (until another address is filed in writing by an Issuer with its Warrant Agent), to an Issuer’s official headquarters address. Any notice or demand authorized by this Agreement to be given or made by any Warrant Holder or by an Issuer to or on the Warrant Agent shall be sufficiently given or made if sent by mail, first class, certified or registered, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with an Issuer), to the Warrant Agent’s official headquarters address.

12

Plan Warrant Agreement 

ARTICLE X

MISCELLANEOUS

10.1Reservation of Shares. For the purpose of enabling an Issuer to satisfy its obligations to issue Shares upon exercise of their Plan Warrants, Issuers will at all times reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued shares, the full number of Shares that may be issued upon the exercise of Plan Warrants. The Shares will, upon issue, be fully paid and non-assessable by an Issuer and free from all liens, charges and security interest with respect to the issue thereof.

10.2Governmental Restrictions. If any Shares issuable upon the exercise of a Plan Warrant require approval of any governmental authority, the applicable Issuer will endeavor to secure such approval; provided that in no event shall such Shares be issued, and an Issuer shall have the authority to suspend the exercise of all Plan Warrants, until such approval has been obtained. If any such period of suspension continues past an Expiration Date, all affected Plan Warrants, the exercise of which have been requested on or prior to the Expiration Date and which were accompanied with Good Funds, shall be exercisable upon the removal of such suspension until the close of business on the business day immediately following the expiration of such suspension. The Issuer or the Warrant Agent shall hold any funds received during such suspension in escrow in a segregated and specified account. In the event a governmental authority requires the modification of this Agreement, any effected Issuer may make such modification without further agreement of any Warrant Holder. If such modification materially impacts the rights of the Warrant Holders, such Issuer will mail a notification of such change to the affected Warrant Holders.

10.3Supplements and Amendments. An Issuer and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Warrant Holders in order to cure any ambiguity or to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that an Issuer and the Warrant Agent may deem necessary or desirable.

10.4Assignment. A Warrant Holder may transfer and assign their rights to any Plan Warrant provided, however, that any such assignment shall not release the Warrant Holder from their commitments and obligations hereunder unless the obligations are formally assumed by such assignee. A Warrant Holder shall not transfer the Plan Warrants unless the transfer is registered or exempt from registration under applicable securities laws. The Warrant Agent may require that such Warrant Holder first obtain an opinion of counsel satisfactory to the Warrant Agent and the Issuer that the proposed disposition or transfer does not violate securities laws. Any transfer must specifically acknowledge that this Agreement will continue to control the Plan Warrants so transferred.

10.5Termination. This Agreement shall terminate at the close of business on the Expiration Date or such earlier date upon which all Plan Warrants of all Issuers have been exercised or redeemed; provided, however, that if exercise of any Plan Warrants are suspended pursuant to Section 10.2 and such suspension continues past the Expiration Date, this Agreement shall terminate at the close of the business on the business day immediately following the expiration of the suspension. The provisions of Article VI shall survive this termination.

13

Plan Warrant Agreement 

10.6Governing Law. This Agreement and each Plan Warrant Certificate or other evidence of ownership issued hereunder shall be deemed to be a contract made under the laws of the state in which an Issuer is incorporated at such time as a dispute arises and, for all purposes except as superseded by the jurisdiction of the Bankruptcy Court, shall be construed in accordance with the laws of such State. Any disputes shall be governed by the Plan, the Bankruptcy Court, the orders of the Bankruptcy Court pertaining to the Plan and the Bankruptcy Code. Venue, if in state or federal court shall be the most convenient state or federal court in relationship to the applicable Issuer’s headquarters.

10.7Successors. All the covenants and provision of this Agreement by or for the benefit of an Issuer, a Warrant Holder or a Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

10.8Severability. Should any part of this Agreement for any reason be declared invalid or unenforceable, such decision will not affect the validity or unenforceability of any remaining portion, which remaining portion will remain in force and effect as if this Agreement had been executed with the invalid portion eliminated and it is hereby declared the intention of the parties hereto that the parties would have executed the remaining portion of this Agreement without including therein any such part or portion which may, for any reason, be hereafter declared invalid or unenforceable.

10.9Reliance. The Warrant Agent may rely on the facsimile or similar transmissions from a Warrant Holder as original signatures and representations of the Issuer as to the names, addresses and number of Plan Warrants of the Issuer’s Warrant Holders and their ownership positions.

10.10Construction. The parties hereto hereby acknowledge and agree that the rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be applied to the interpretation of this Agreement. No inference in favor of, or against, any party will be drawn from the fact that one party has drafted any portion hereof.

10.11Advice of Counsel. Each party hereby acknowledges that they are entitled to and have been afforded the opportunity to consult legal counsel of their choice regarding the terms and conditions and legal effects of this Agreement, as well as the advisability and propriety thereof. Each party hereby further acknowledges that having so consulted with legal counsel of their choosing or having chosen not to consult, hereby waives any right to the legal representation or effective representation and any right to raise or rely upon the lack of representation or effective representation in any future proceedings or in connection with any future claim.

10.12Complete Agreement; Amendment. Except as determined by the Plan, the Bankruptcy Court, the orders of the Bankruptcy Court and the Bankruptcy Code, this Agreement sets forth the entire understanding between the parties hereto and supersedes all prior agreements, arrangements and communications, whether oral or written, with respect to the subject matter hereof. No other agreements, representations, warranties or other matters, whether oral or written, shall be deemed to bind the parties hereto with respect to the subject matter hereof. This Agreement may not be modified or amended except by the mutual written agreement of the parties.

14

Plan Warrant Agreement 

10.13Captions. The descriptive headings of the various Sections or parts of this Agreement are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

10.14Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signature of all of the parties reflected hereon as the signatories.

IN WITNESS WHEREOF, this Agreement has been executed as of the Effective Date written above.

“WARRANT HOLDER” deemed executed in accordance with the terms of the Plan and the Warrant Acceptance and Effective Delivery Agreement, attached hereto as Exhibit B and specifically made part hereto.	“ISSUERS” VISITALK CAPITAL CORPORATON As an Issuer and as Implementation Agent for the other Issuers
/s/
Signature (all record holders should sign)	By: Its:

15

EXHIBIT A

ISSUERS COVERED BY THE PLAN WARRANT AGREEMENT

Visitalk Capital Corporation

VT Billing Services, Inc.

VT Business Products, Inc.

VT Consumer Services, Inc.

VT Financial Services, Inc.

VT Gaming Services, Inc.

VT International Corp.

VT Marketing Services, Inc.

VT Video Services, Inc.

VT Arabic Services, Inc.

VT Chinese Services, Inc.

VT Dutch Services, Inc.

VT French Services, Inc.

VT German Services, Inc.

VT Hispanos Services, Inc.

VT Italian Services, Inc.

VT Japanese Services, Inc.

VT Korean Services, Inc.

VT Portuguese Services, Inc.

16

EXHIBIT B

FORM OF WARRANT ACCEPTANCE AND EFFECTIVE DELIVERY AGREEMENT

Visitalk Capital Corporation

14647 S. 50th St., Suite 130

Phoenix, AZ 85044

Dear Sir or Madam:

A.Capitalized terms, unless defined herein, have the same meaning as defined in the warrant agreement effective September 17, 2004 (the “Plan Warrant Agreement”) or in the Second Joint Plan of Reorganization dated June 22, 2004, confirmed by the United States Bankruptcy Court for the District of Arizona related to Case No. 00-13035-PHX-RTB (the “Plan”) of visitalk.com, Inc. (“Visitalk”). The Undersigned represents that they have reviewed the Plan Warrant Agreement and the Plan and have had the opportunity to ask questions regarding their terms and restrictions.

B.Each Issuer is required under the Plan to issue certain warrants to various claimants categorized under the Plan (the “Plan Warrants”). Such Plan Warrants are defined in the Plan and governed in accordance with the Plan Warrant Agreement.

C.The Undersigned, _______________________________________, hereby tenders this Warrant Acceptance and Effective Delivery Agreement (the “Acceptance Agreement”) to Visitalk Capital Corporation, as an Issuer and as the Implementation Agent for the other Issuers, and unless an executed “Election to Certificate Agreement” is attached, hereby elects to have all of their Plan Warrants issued in Book Entry form.

D.This Acceptance Agreement has been duly authorized by all necessary action on the part of the Undersigned and, if necessary, this Acceptance Agreement has been duly executed by an authorized officer or representative of the Undersigned and such person is a legal officer or representative of the Undersigned and this Acceptance Agreement is enforceable in accordance with its terms.

E.If physical delivery of the Plan Warrant certificates is desired, please and return sign BOTH this Acceptance Agreement and also sign and return the “Election to Certificate Agreement, “ attached to the Plan Warrant Agreement as Exhibit F, along with a check for the certificate issue fee as set forth therein.

BY EXECUTION BELOW, THE UNDERSIGNED ACKNOWLEDGES THAT THEY HAVE RECEIVED EFFECTIVE DELIVERY OF THE PLAN WARRANTS. VISITALK CAPITAL CORPORATION AND EACH ISSUER IS RELYING UPON THE ACCURACY AND COMPLETENESS OF THE REPRESENTATIONS CONTAINED HEREIN IN COMPLYING WITH ITS OBLIGATIONS.

Warrant Holder Accepted and Agreed: WARRANT HOLDER **	Issuer Acceptance VISITALK CAPITAL CORPORATON, as an Issuer and as Implementation Agent for the other Issuers
Signatures (all record holders should sign)	By: Its:

** NOTE - If the Plan Warrants are being accepted by an “Entity”,

Warrant Holder must sign the Certificate of Authority on Exhibit B-2

17

EXHIBIT B-2

CERTIFICATE OF AUTHORIZATION

(to be completed if the Plan Warrants are being accepted by an “ Entity”)

I hereby certify that _________________________________________________________(“Entity”)

 (name of company, trust, partnership or other form of entity)

is a_______________organized and existing under and by virtue of the laws of the State of______________

(entity type)                 (state)

and its tax ID number is__________________________and it is currently in good standing and its charter

(federal tax ID or SS #)

in full force and effect. I further certify that the______________________and/or the___________________

(title)              (title)

are fully authorized and empowered to make , execute and deliver any and all written instruments necessary or

proper to effectuate the authority hereby conferred. I further certify that________________________now is

(name)

the______________________and __________________________is now the______________________.

(title)(name)(title)

I further certify that the officers set forth herein, or any one of them, are duly authorized by the Entity to execute and carry out the terms of the Warrant Acceptance and Effective Delivery Agreement and certify further that the Warrant Acceptance and Effective Delivery Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

Dated this____day of___________, 200__.
	Signature of certifying officer (Must not be signed by officer authorized to act)
	Title of certifying officer

18

EXHIBIT C

FORM OF CLAIM HOLDER OWNERSHIP SCHEDULE

The Plan Warrants specified below are only valid if the specific named Claim Holder named herein, or a proper assignee, has executed a Warrant Acceptance and Effective Delivery Agreement (“Acceptance Agreement”) prior to March 31, 2006 and such agreement has been received by Visitalk Capital Corporation as the agent of the Issuers no later than April 15, 2006.

Claim Holder:

______________________________________	Investment in Series A:	$________________
______________________________________	Investment in Series B:	$________________
______________________________________	Investment in Series C:	$________________
______________________________________	Investment in Series_____	$________________

Plan Allowed Claim:	$____________
Plan Class:	_____________

Issuers	Unit #	Warrant Units**
	___________	_____________________
Visitalk Capital Corporation	___________	_____________________
VT Billing Services, Inc.	___________	_____________________
VT Business Products, Inc.	___________	_____________________
VT Consumer Services, Inc.	___________	_____________________
VT Financial Services, Inc.	___________	_____________________
Dynamic Biometric Systems, Inc.	___________	_____________________
VT International Corp.	___________	_____________________
VT Marketing Services, Inc.	___________	_____________________
VT Video Services, Inc.	___________	_____________________
VT Arabic Services, Inc.	___________	_____________________
VT Chinese Services, Inc.	___________	_____________________
VT Dutch Services, Inc.	___________	_____________________
VT French Services, Inc.	___________	_____________________
VT German Services, Inc.	___________	_____________________
VT Hispanos Services, Inc.	___________	_____________________
VT Italian Services, Inc.	___________	_____________________
VT Japanese Services, Inc.	___________	______________________
VT Korean Services, Inc.	___________	_____________________
VT Portuguese Services, Inc.	___________	_____________________

** A Warrant Unit consists of consist of one A Warrant, one B Warrant, one C Warrant, one D Warrant, one E Warrant and one F Warrant.

19

EXHIBIT D

FORM OF WARRANT CERTIFICATE OR WARRANT UNIT CERTIFICATE

NAME OF ISSUER

Plan Warrants to Purchase __________ Shares	Warrant Series ___ - Number ____
Plan Warrant Expiration Date ______________	Per Warrant Exercise Price $_____.00

THIS IS TO CERTIFY that,________________________________________or registered assigns, is the registered holder (“Warrant Holder”) of the number of warrants (“Plan Warrants”) set forth above. Each Plan Warrant entitles the Warrant Holder to purchase, subject to the terms and conditions in this certificate and set forth in a warrant agreement effective September 17, 2004, (the “Plan Warrant Agreement”) which is hereby incorporated herein and made a part hereof, at any time on or after September 17, 2004, and at or prior to the close of business on the Expiration Date, but not thereafter, unless the Plan Warrant is earlier Called or the Plan Warrant Expiration Date is extended by the Issuer, one fully paid and non-assessable share of the Issuer’s common stock (“Share”), or equivalent security of any successor thereto, at a purchase price equal to the Exercise Price set forth above, as adjusted, in accordance with the Plan Warrant Agreement. Capitalized terms herein have the same meaning as in the Plan Warrant Agreement, which is controlling.

Upon (i) exercise and satisfaction of one or more conditions precedent set forth herein and in the Plan Warrant Agreement, (ii) presentation and surrender to the Issuer or the Warrant Agent, or its successor, a Warrant Certificate with a Subscription and Exercise Notice duly executed, and (iii) accompanied by payment of the purchase price in Good Funds payable to the order of the Issuer, the Warrant Holder will receive one or more certificates of Shares or equivalent securities so purchased. Issuance of fractional shares is governed by the Plan Warrant Agreement.

The Issuer covenants and agrees that all Shares delivered upon the exercise of these Plan Warrants will, upon delivery, be fully paid and non-assessable. The Plan Warrants shall not be exercisable in any jurisdiction where exercise would be unlawful. The Issuer shall not be required to honor the exercise of the Plan Warrants if, in the opinion of its Board of Directors, upon advice of counsel, the issuance of Shares upon exercise of the Plan Warrants would be unlawful. The number of Shares, or other equivalent equity security, issuable upon the exercise of these Plan Warrants and the Exercise Price shall be subject to adjustment from time to time, in certain events, as set forth in the Plan Warrant Agreement.

The Issuer agrees at all times to reserve or hold available, or cause to reserve or hold available, a sufficient number or Shares, or other equivalent equity security, to cover the number of Shares, or other equivalent equity security, issuable upon the exercise of these and all other Plan Warrants of like tenor then outstanding.

This Warrant Certificate does not entitle the Warrant Holder hereof, either at law or in equity, to any voting rights or other rights as a shareholder of the Issuer, or to any other rights whatsoever except the rights expressly herein set forth, and no dividend shall be payable or accrue in respect of these Plan Warrants or the interest represented hereby, or the Shares that may be purchased upon exercise hereof until or unless, and except to the extent that, these Plan Warrants shall be duly exercised.

20

This Warrant Certificate is exchangeable at any time prior to expiration upon the surrender hereof by the Warrant Holder to the Warrant Agent for one or more new Warrant Certificates of like tenor and date representing in the aggregate the right to purchase the number of Shares that may be purchased upon exercise hereof, each of the new Warrant Certificates to represent the right to purchase the number of Shares as may be designated by the Warrant Holder at the time of the surrender. Any issuance or transfer costs related to this Warrant Certificate shall be paid by the Warrant Holder.

The Issuer may deem and treat the Warrant Holder of this Warrant Certificate at any time as the absolute owner hereof and of the Plan Warrants covered hereby for all purposes and shall not be affected by any notice to the contrary.

The Plan Warrants evidenced by this Warrant Certificate are subject to the terms of the Plan Warrant Agreement which is available at the principal corporate office of the Warrant Agent or the Issuer. The Plan Warrant Agreement is incorporated herein by reference and made a part hereof and reference is hereby made to the Plan Warrant Agreement for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Warrant Agent, the Issuers and the Warrant Holders of the Plan Warrants.

If a Third Party Warrant Agent has been appointed, this Warrant Certificate shall not be valid or obligatory for any purpose unless countersigned by the Warrant Agent.

In Witness Whereof, the Issuer has caused this Warrant Certificate to be executed by its duly authorized officer, and the corporate seal hereunto affixed.

	ISSUER
Dated:____________________________________	By:
		President

By:
	Secretary

21

Exhibit D-1

ASSIGNMENT FORM

To assign this Plan Warrant or a Book Entry Plan Warrant, fill in the form below:

I or we assign and transfer___________________of my Plan Warrant rights under Warrant Series________(indicate A through F or U for unit) - Certificate or Book Entry No.________to: (must include Assignee’s Social Security or EIN No. below)

(“Assignee”) 

(Print or type assignee’s name

 (Print or type assignee’s address and zip code)

Federal Tax ID or Social Security Number(s):__________________________________

and irrevocably appoint____________________________________as agent to transfer this Plan Warrant on the books of the Issuers. The agent may substitute another to act for him.

I represent that the Assignee received and has agreed to be bound by all the terms of the Plan Warrant Agreement dated September 17, 2004 governing this Plan Warrant.

Date:_______________________	Signature:
		(Sign exactly as your name appears on the other side of this Warrant Certificate)

Signature Guarantee **: ________________________________________

By______________________________________________

** - The signature must be guaranteed by an eligible guarantor institution

(a bank, stockbroker, savings and loan association or credit union with

Membership in an approved signature guarantee medallion program)

pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.

22

EXHIBIT E

FORM OF SUBSCRIPTION AND EXERCISE NOTICE

(To be completed and signed only upon an exercise of a Plan Warrant(s) in whole or in part)

ISSUER:

___________________________

___________________________

___________________________

Dear Sir or Madam:

A.Capitalized terms, unless defined herein, have the same meaning as defined in the warrant agreement effective September 17, 2004 (the “Plan Warrant Agreement”) or in the Second Joint Plan of Reorganization dated June 22, 2004, confirmed by the United States Bankruptcy Court for the District of Arizona related to Case No. 00-13035-PHX-RTB (the “Plan”) of visitalk.com, Inc. (“Visitalk”). The Undersigned represents that they have reviewed the Plan Warrant Agreement and the Plan and have had the opportunity to ask questions regarding their terms and restrictions.

B.The Undersigned,_______________________________________, the Warrant Holder of the attached Plan Warrant or Book Entry Plan Warrant designated as______________________, hereby irrevocably elects to exercise the purchase right represented by such Plan Warrants for, and to purchase from the Issuer,__________________ Shares, and herewith makes a payment of $_____________in Good Funds, as such terms are defined in the Plan Warrant Agreement,. (Payment = Plan Warrants exercised x Exercise Price).

C.Important Notice regarding Ownership Limitations. This Subscription and Exercise Notice is governed by Article V of the Plan Warrant Agreement and is a specific representation by the Undersigned that, after giving effect to this Exercise Notice, (i) the Warrant Holder and its Affiliates will not beneficially own in excess of 4.99% of the outstanding Shares of the Issuer and (ii) the Warrant Holder will not have acquired, through exercise of this Plan Warrant or otherwise, a number of Shares that, when added to the number of Shares beneficially owned by the Warrant Holder at the beginning of the 60-day period ending on and including the applicable date of exercise of these Plan Warrants, is in excess of 4.99% of the outstanding Shares of an Issuer.

D.The Undersigned hereby requests that the Certificate for the Shares be issued in the following name and delivered to the following address:_______________________________________ (Print or type name, address and zip code)

E.If this Subscription and Exercise Notice is for an exercise of the Plan Warrants to purchase fewer the maximum Shares to which the Undersigned is entitled under the Plan Warrants tendered, the Undersigned hereby requests that new Plan Warrants for the remaining Plan Warrants be issued in the following name and delivered to the following address:____________________________________(Print or type name, address and zip code)

F.This Subscription and Exercise Notice has been duly authorized by all necessary action on the part of the Undersigned and, if necessary, this Subscription and Exercise Notice has been duly executed by an authorized officer or representative of the Undersigned and such person is a legal officer or representative of the Undersigned and this Subscription and Exercise Notice is enforceable in accordance with its terms.

BY EXECUTION BELOW, THE UNDERSIGNED ACKNOWLEDGES THAT THE ISSUER IS RELYING UPON THE ACCURACY AND COMPLETENESS OF THE REPRESENTATIONS CONTAINED HEREIN IN COMPLYING WITH ITS OBLIGATIONS.

Warrant Holder Accepted and Agreed:	Issuer Acceptance
WARRANT HOLDER **
Signatures (all record holders should sign)	By:
	Its:

** NOTE - If the Plan Warrants are being accepted by an “Entity”,

Warrant Holder must sign the Certificate of Authorization on Exhibit E-2

23

EXHIBIT E-2

CERTIFICATE OF AUTHORIZATION

(to be completed if the Plan Warrants are being accepted by an “Entity”)

I hereby certify that _________________________________________________________(“Entity”)

 (name of company, trust, partnership or other form of entity)

is a_______________organized and existing under and by virtue of the laws of the State of______________

(entity type)        (state)

and its tax ID number is__________________________and it is currently in good standing and its charter

(federal tax ID or SS #)

in full force and effect. I further certify that the______________________and/or the___________________

(title)              (title)

are fully authorized and empowered to make , execute and deliver any and all written instruments necessary or

proper to effectuate the authority hereby conferred. I further certify that________________________now is

(name)

the______________________and __________________________is now the______________________.

(title)(name)(title)

I further certify that the officers set forth herein, or any one of them, are duly authorized by the Entity to execute and carry out the terms of the Subscription and Exercise Notice and certify further that the Subscription and Exercise Notice has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

Dated this____day of___________, 200__.
	Signature of certifying officer (Must not be signed by officer authorized to act)
	Title of certifying officer

24

EXHIBIT F

FORM OF ELECTION TO CERTIFICATE AGREEMENT

Visitalk Capital Corporation

14647 S. 50th St., Suite 130

Phoenix, AZ 85044

Dear Sir or Madam:

A.Capitalized terms, unless defined herein, have the same meaning as defined in the warrant agreement effective September 17, 2004 (the “Plan Warrant Agreement”) or in the Second Joint Plan of Reorganization dated June 22, 2004, confirmed by the United States Bankruptcy Court for the District of Arizona related to Case No. 00-13035-PHX-RTB (the “Plan”) of visitalk.com, Inc. (“Visitalk”). The Undersigned represents that they have reviewed the Plan Warrant Agreement and the Plan and have had the opportunity to ask questions regarding their terms and restrictions.

B.The Undersigned, ____________________________________________, by executing this Election to Certificate Agreement, hereby elects to have all its Plan Warrants issued in certificated form. The Plan Warrants requested will be issued in Units consisting of one A Warrant, one B Warrant, one C Warrant, one D Warrant, one E Warrant and one F Warrant for each Issuer, in accordance with the Plan Warrant Agreement and as authorized under the Plan.

C.The Undersigned is enclosing a check for $285.00 (19 certificates x $15.00 per certificate issuance fee) payable to Visitalk Capital Corporation as the Implementation Agent for the Issuers.

D.The Undersigned understands and acknowledges that, by electing to receive physical delivery of the Plan Warrants:

a.the Undersigned waives any of the rights and benefits to having the Contingent Agent act for them pursuant to the Contingent Agent Agreement, and

b.transfer fees will be imposed upon any future transfers or changes in the Units. For example, if the Undersigned desires to exercise only the A Warrants, the Undersigned will have to submit the Unit certificate and pay a fee to issue a new Unit certificate.

E.This Election to Certificate Agreement has been duly authorized by all necessary action on the part of the Undersigned and, if necessary, this Election to Certificate Agreement has been duly executed by an authorized officer or representative of the Undersigned and such person is a legal officer or representative of the Undersigned and this Election to Certificate Agreement is enforceable in accordance with its terms.

BY EXECUTION BELOW, THE UNDERSIGNED ACKNOWLEDGES THAT VISITALK CAPITAL CORPORATION AND EACH ISSUER IS RELYING UPON THE ACCURACY AND COMPLETENESS OF THE REPRESENTATIONS CONTAINED HEREIN IN COMPLYING WITH ITS OBLIGATIONS.

Warrant Holder Accepted and Agreed:	Issuer Acceptance
WARRANT HOLDER **	VISITALK CAPITAL CORPORATON, as an Issuer and as Implementation Agent for the other Issuers
Signatures (all record holders should sign)	By:
	Its:

** NOTE - If the Plan Warrants are being accepted by an “Entity”,

Warrant Holder must sign the Certificate of Authorization on Exhibit F-2

25

EXHIBIT F-2

CERTIFICATE OF AUTHORIZATION

(to be completed if the Plan Warrants are being accepted by an “Entity”)

I hereby certify that _________________________________________________________(“Entity”)

 (name of company, trust, partnership or other form of entity)

is a_______________organized and existing under and by virtue of the laws of the State of______________

(entity type)                 (state)

and its tax ID number is__________________________and it is currently in good standing and its charter

(federal tax ID or SS #)

in full force and effect. I further certify that the______________________and/or the___________________

(title)              (title)

are fully authorized and empowered to make , execute and deliver any and all written instruments necessary or

proper to effectuate the authority hereby conferred. I further certify that________________________now is

(name)

the______________________and __________________________is now the______________________.

(title)(name)(title)

I further certify that the officers set forth herein, or any one of them, are duly authorized by the Entity to execute and carry out the terms of the Election to Certificate Agreement and certify further that the Election to Certificate Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

Dated this____day of___________, 200__.
	Signature of certifying officer (Must not be signed by officer authorized to act)
	Title of certifying officer

26

EXHIBIT G

FORM OF CONTINGENT AGENT AGREEMENT

This Contingent Agent Agreement (the “Agreement”) is made effective as of the day last executed by and among the Issuer (the “Issuer”) and an agent, (the “Contingent Agent”), whose name and address appear on the signature page hereto.

RECITALS

A.The Issuer, pursuant to the confirmed and effective Second Joint Plan of Reorganization dated June 22, 2004 filed with the United States Bankruptcy Court for the District of Arizona related to Case No. 00-13035-PHX-RTB (the “Plan”) of visitalk.com, Inc. and other Co-Proponents (jointly “Visitalk”), has issued certain warrants to various claimants under the Plan (the “Plan Warrants”) in accordance with the Plan and a warrant agreement effective September 17, 2004 (the “Plan Warrant Agreement”).

B.Capitalized terms, unless defined herein, have the same meaning as defined in the Plan Warrant Agreement or the Plan.

C.The Plan Warrants are all subject to redemption by the Issuer in its sole discretion and have a fixed Expiration Date that may be extended by the Issuer in its sole discretion.

D.The Plan Warrant Agreement authorizes the Issuer to, in its sole discretion; provide the registered warrant holders of the certain Plan Warrants (the “Warrant Holders”) with a Contingent Agent to act for such Warrant Holders to attempt to maximize the value of the Plan Warrants for such Warrant Holders under certain limited circumstances.

E.The Plan Warrant Agreement allows any Holder to elect in writing not to be bound by this Agreement so that any references to Warrant Holders herein only pertain to the Warrant Holders who have not elected out of this Agreement. The Plan Warrants of any Warrant Holder covered by this Agreement must have been exempt from registration under Section 1145 of the Bankruptcy Code by meeting such requirements.

AGREEMENTS

NOW, THEREFORE, in consideration of the above recitals, the following representations, warranties, covenants and conditions, and other good and valuable consideration, the receipt of which is acknowledged, the Parties agree as follows:

ARTICLE I

APPOINTMENT OF WARRANT HOLDER CONTINGENT AGENT

1.1Appointment. Subject to the limitations in this Agreement, the Issuer hereby appoints the Contingent Agent to perform limited services for the Warrant Holders.

27

Contingent Agent Agreement

1.2Qualifications. The Contingent Agent agrees to be bound by the terms of this Agreement, and this Agreement may be modified to clarify its intent and the duties and responsibilities of the Contingent Agent. The Contingent Agent must be a licensed broker-dealer.

1.3Resignation or Removal of the Contingent Agent. The Contingent Agent may resign its duties and be discharged from all further duties and liabilities hereunder after giving thirty (30) days notice in writing to the Issuer; provided that such shorter notice may be given, as such Issuer shall accept as sufficient. At any time, the Issuer, upon notice and with or without cause, may remove the Contingent Agent. In the event the office of the Contingent Agent shall become vacant by resignation or incapacity to act or otherwise, the Issuer may, but is not required to, appoint in writing a new Contingent Agent in place of the Contingent Agent vacating the office.

1.4Successor Contingent Agent. Upon appointment, which requires the execution of a form of this Agreement, any successor Contingent Agent shall be vested with the same powers, rights, duties, responsibilities and immunities as if such agent had been originally named as Contingent Agent. If for any reason it becomes necessary or expedient to execute any further assurance, conveyance, act or deed, the same shall be done at the expense of the Issuer. Subject to the foregoing provisions, any corporation into which any Contingent Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which any Contingent Agent is a party shall be the successor Contingent Agent under this Agreement without any further act. Hereinafter, any reference to the Contingent Agent shall apply to any properly elected successor Contingent Agent.

ARTICLE II

RIGHTS AND DUTIES OF THE CONTINGENT AGENT IN THE EVENT OF NON-EXERCISE

2.1General Duties. The Contingent Agent will act for the Warrant Holders to sell the Plan Warrants or the shares of common stock issued through the exercise of the Plan Warrants (the “Shares”) to attempt to maximize the value of the Expired Warrants, as defined in paragraph 2.2. The Contingent Agent’s decisions regarding negotiation of Share prices or Plan Warrant prices, in public or private sales, unless grossly negligent, are deemed to be reasonable. The Contingent Agent has the right but not the obligation to exercise the rights in this Article and the Contingent Agent’s good faith exercise of these rights shall be in its sole discretion.

2.2Contingent on the Expiration of Time to Exercise. In the event Plan Warrants expire due to either a redemption Call of any specific Series of Plan Warrants as provided in the Plan Warrant Agreement or upon occurrence of any Expiration Date (the “Expired Warrants”), the Warrant Holder and Issuer of each such Plan Warrant hereby grant the Contingent Agent special rights as provided in this Agreement to maximize the potential value of any such Expired Warrants but only after the date specified in the Redemption Notice or after the Expiration Date.

2.3Limited Extension of Exercise Date. Only if there is a Contingent Agent and only if the Expired Warrants are in Book Entry form, the Issuer will extend the period any Expired Warrants may be exercised for an additional thirty (30) days after the Redemption Date specified in the Redemption Notice or after the Expiration Date (the “Special Exercise Period”). Only during this Special Exercise Period, may the Contingent Agent exercise any amount of Expired Warrants as allowed under this Agreement, subject to the limitation in Article 3.2 below, and only for the benefit of all the Warrant Holders of all the Expired Warrants (the “Covered Holders”). The Contingent Agent may also sell any amount of the Expired Warrants for the benefit of all the Covered Holders and may assign the Special Exercise Period right to the buyer of any such Expired Warrants, subject to the limitation in Article 3.2 below. This grant of a Special Exercise Period to the Contingent Agent in no way grants any Warrant Holder additional time to exercise.

28

Contingent Agent Agreement

2.4Distribution of Proceeds from Sale or Exercise. In the event that the Contingent Agent exercises its rights under this Article, the Contingent Agent will accumulate the proceeds received from the sale of Expired Warrants or Shares in a specifically established trust account (the “Trust Account”) and will deduct the Fees and Expenses (as defined below) to derive the net proceeds (“Net Proceeds”). The beneficiaries of such Trust Account are the Warrant Holders of all the Expired Warrants. Within ten (10) business days of the expiration of the Special Exercise Period, the Contingent Agent shall distribute the Net Proceeds pro rata to all the Covered Holders. Payment of the Net Proceeds will be accompanied by a summary accounting of the receipts, expenses and fees. The distribution to any Covered Holder will equal the Net Proceeds multiplied by a fraction that equals the Expired Warrants the Covered Holder could have exercised prior to the Expiration Date divided by all Expired Warrants that could have been exercised by all Covered Holders prior to the Expiration Date.

2.5Contingent Agent’s Fees and Expenses. The Contingent Agent’s Fees and Expenses shall include (i) all reasonable expenses incident to the performance of or compliance with its obligations under this Agreement; (ii) all costs and expenses incurred by the Contingent Agent (including all transfer taxes, brokerage and other discounts and commissions and finders’ and similar fees payable in respect to the sales of the Expired Warrants or Shares issued upon the exercise of the Expired Warrants, and (iii) a Contingent Agent commission equal to a percentage of the gross sale proceeds as negotiated by the Issuer from time to time.

ARTICLE III

LIMITATION AND METHOD OF EXERCISE

3.1Method of Exercise. In the event the Contingent Agent elects to exercise Plan Warrants and sell the Shares so received, the Issuer and the Contingent Agent agree that the Contingent Agent can instruct the selling broker to remit the Exercise Price directly to the Issuer with the remaining proceeds being delivered to the Contingent Agent for deposit to the Trust Account. The Issuer agrees that in its sole discretion, upon the sale confirmation and upon coordination with any broker, the Issuer may cause the Shares to be delivered simultaneously with the receipt of the Exercise Price.

3.2Limitation on Ownership.

(a)Notwithstanding anything to the contrary contained herein, unless specifically waived and approved by the Issuer in writing, the number of Expired Warrants subject to this Agreement shall not be in excess of 4.99% of the outstanding shares of common stock of the Issuer. For purposes of this paragraph, the number of outstanding shares of common stock will be ascertained from the Issuer’s transfer agent as of the close of business of the Expiration Date of the subject Plan Warrants. The number of outstanding shares of common stock shall be determined after giving effect to the Shares not yet issued as a result of the exercise of Plan Warrants on or prior to the Expiration Date, including the exercise with respect to this determination.

29

Contingent Agent Agreement

(b)The Contingent Agent may transfer and assign its rights to any Expiring Warrants of the Issuer provided, however, that any such assignment shall require that all such obligations in the Plan Warrant Agreement regarding limitation of ownership are formally assumed by the assignee.

3.3Grant by the Warrant Holder of Limited power of attorney. The Contingent Agent shall be the sole attorney in fact of the Warrant Holders to exercise or sell any Expired Warrants held in the name of the Warrant Holder throughout the Special Exercise Period.

3.4Special accounts. The Contingent Agent has the right and authority to open a special brokerage account or other financial institution account to maintain the securities or proceeds and to facilitate transactions. Such accounts will be a fiduciary account for the Covered Holders.

ARTICLE IV

CONCERNING THE CONTINGENT AGENT

4.1     Actions by Contingent Agent. The Contingent Agent may, for the execution of the duties and in the execution of the powers conferred upon it, appoint or employ as agents or representatives or otherwise any solicitors, counsel, bankers, brokers, accountants, clerks or inspectors or other agents, and all reasonable expenses and disbursements made and incurred by the Contingent Agent in connection with the execution of its duties hereunder will be included as Fees and Expenses as provided in Section 2.5 above.

4.2     Exculpatory Provisions. In order to induce the Contingent Agent to act hereunder, the Issuer and each Warrant Holder, by not electing out of this Agreement, agree that:

(a)The Contingent Agent shall be entitled to take legal or other advice and employ such assistance as it may deem necessary to the proper discharge of its duties hereunder and to pay proper and reasonable compensation therefore and may in connection with any matter relating to this Agreement, act on the opinion or advice or information obtained from any attorney, auditor or other expert, whether obtained by the Contingent Agent, the Issuer or otherwise and shall not be responsible for any loss occasioned by acting thereon;

(b)Whenever in the administration of its duties under this Agreement, the Contingent Agent shall deem it necessary or desirable that any matter be provided or established by the Issuer prior to taking or suffering any action hereunder, such matter (unless other evidence is specifically prescribed) may be deemed to be conclusively proved and established by a certificate of an executive officer of the Issuer delivered to the Contingent Agent and such certificate shall be full justification and cause to the Contingent Agent for any action taken or suffered in good faith by it under the provisions of this Agreement; but in its discretion, the Contingent Agent may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as the Contingent Agent may deem reasonable;

30

Contingent Agent Agreement

(c)The Contingent Agent shall be liable hereunder only for its own negligence or willful misconduct;

(d)The Contingent Agent shall not be liable for or by reason of any of the statements of facts or recitals contained in this Agreement or in the Plan Warrant Agreement or be required to verify the same and all such statements and recitals are and shall be deemed to have been made by the Issuer only;

(e)The Contingent Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof or in respect of the validity of the execution or exercise of any Plan Warrant covered hereunder; nor shall the Contingent Agent be responsible for any breach by the Issuer of any covenant or condition contained in this Agreement or in any such Plan Warrant; nor shall the Contingent Agent by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares to be issued upon the right of purchase provided for in the Plan Warrant Agreement or in any Warrant or as to whether any shares will, when issued, be duly authorized or be validly issued and fully paid and non-assessable, it being hereby agreed and declared that as to all the matters and things referred to in this subparagraph the duty and responsibility shall rest upon the Issuer and not upon the Contingent Agent and the failure of the Issuer to discharge any such duty and responsibility shall not in any way render the Contingent Agent liable or place upon it any duty or responsibility for breach of which it would be liable;

(f)Except as in this Agreement expressly provided, the Contingent Agent acts hereunder solely for the benefit of the Warrant Holders and does not assume any fiduciary or other relationship or agency or trust for or with the Issuer. The duties and obligations of the Contingent Agent under this Agreement shall be determined solely by the provisions hereof, and no implied covenants or obligations shall be read into this Agreement against the Contingent Agent.

4.3     Indemnification. Provided the Contingent Agent carries out its duties, within its discretion as provided under this Agreement, the Issuer will indemnify and hold harmless the Contingent Agent from and against any claim, action or loss resulting from the performance of its duties hereunder.

4.4Modification of Agreement. The Contingent Agent may, without the consent or concurrence of the Warrant Holders by supplemental agreement or otherwise, concur with the Issuer in making any modifications or corrections to this Agreement as to which it shall have been advised by counsel (who may but need not also be counsel for the Issuer) that the same are not prejudicial to the rights of the Warrant Holders as indicated by the general sense or intent of the original language and are required for the purpose of curing or correcting the inconsistent provision or clerical omission or mistake or manifest error herein. The Issuer or the Contingent Agent may request a modification of the Agreement by a majority of the Warrant Holders, voting in person or by proxy.

31

Contingent Agent Agreement

ARTICLE V

MISCELLANEOUS

5.1Successors and Assigns. This Agreement shall be binding upon the heirs, successors and assigns of the Warrant Holders and the Issuers.

5.2Severability. Should any part of this Agreement for any reason be declared invalid or unenforceable, such decision will not affect the validity or unenforceability of any remaining portion, which remaining portion will remain in force and effect as if this Agreement had been executed with the invalid portion eliminated and it is hereby declared the intention of the parties hereto that the parties would have executed the remaining portion of this Agreement without including therein any such part or portion which may, for any reason, be hereafter declared invalid or unenforceable.

5.3Reliance. The Contingent Agent may rely on facsimile or similar transmissions from the Warrant Holders as original signatures and representations of the Issuer as to the names, addresses and number of Plan Warrants of the Warrant Holders.

5.4Governing Law. This Agreement and shall be deemed to be a contract made under the laws of the state in which an Issuer is incorporated at such time as a dispute arises and, for all purposes except as superseded by the jurisdiction of the Bankruptcy Court, shall be construed in accordance with the laws of such State. Any disputes shall be governed by the Plan, the Bankruptcy Court, the orders of the Bankruptcy Court pertaining to the Plan and the Bankruptcy Code. Venue, if in state or federal court, shall be the most convenient state or federal court in relationship to the applicable Issuer’s head quarters.

5.5Construction. The parties hereto hereby acknowledge and agree that the rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be applied to the interpretation of this Agreement. No inference in favor of, or against, any party will be drawn from the fact that one party has drafted any portion hereof.

5.6Advice of Counsel. Each party hereby acknowledges that they are entitled to and have been afforded the opportunity to consult legal counsel of their choice regarding the terms and conditions and legal effects of this Agreement, as well as the advisability and propriety thereof. Each party hereby further acknowledges that having so consulted with legal counsel of their choosing or having chosen not to consult, hereby waives any right to such legal representation or effective representation and any right to raise or rely upon the lack of representation or effective representation in any future proceedings or in connection with any future claim.

5.7Complete Agreement; Amendment. This Agreement sets forth the entire understanding between the parties hereto and supersedes all prior agreements, arrangements and communications, whether oral or written, with respect to the subject matter hereof. No other agreements, representations, warranties or other matters, whether oral or written, shall be deemed to bind the parties hereto with respect to the subject matter hereof. This Agreement may not be modified or amended except by the mutual written agreement of the parties.

32

Contingent Agent Agreement

5.8Captions. The descriptive headings of the various Sections or parts of this Agreement are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

IN WITNESS WHEREOF, this Agreement has been executed as of the date last executed below.

ISSUER	CONTINGENT AGENT
By:	By:
Name: Its: Date:	Name: Its: Date: Address:

33

14647 South 50th Street, Suite 130

Phoenix, AZ 85044

Phone: 480-759-9400 ▪ Fax: 480-759-9401

www.visitalkcapital.com

Michael S. Williams President & Chief Portfolio Officer 480-759-9400 x100 mike.williams@visitalkcapital.com Lanny R. Lang Chief Financial Officer 480-759-9400 x101 Lanny.lang@visitalkcapital.com Ivan Teodorovic Investor Relations 480-759-9400 x1 Ivan.teodorovic@visitalkcapital.com

EX-10.1

EXECUTION COPY

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT ("Agreement") is made and entered into as of October 30, 2008, by and among Touchstone Industry Group Limited, a British Virgin Islands corporation ("TIGL") and BayPeak LLC, a California limited liability company ("BayPeak").

W I T N E S S E T H:

WHEREAS, Tianjin Golden Dragon Travel Services Limited, a company organized under the laws of the People's Republic of China ("Dragon") has entered into an Engagement Agreement, dated January 20, 2008 (the "Engagement Agreement") with Carret (Beijing) Investment Management & Advisory Company ("Carret"), pursuant to which Dragon engaged Carret to provide financial advisory services in connection with one or more offerings of securities by Dragon and a going public transaction. Dragon was subsequently acquired by, and is now a wholly-owned subsidiary of, Wellcare International Limited, a Hong Kong company ("WIltd"), which is a wholly-owned subsidiary of TIGL.

WHEREAS, Carret and BayPeak entered into a Financial Advisory Cooperation Agreement, dated May 20, 2008 (the "Cooperation Agreement"), pursuant to which Carret engaged BayPeak to provide certain of the required services to Dragon on Carret's behalf.

WHEREAS, the parties wish to clarify and amend certain provisions of the Engagement Agreement and Cooperation Agreement regarding the issuance of equity securities to BayPeak .

NOW, THEREFORE, for and in consideration of the covenants set forth herein and the mutual benefits to be gained by the parties hereto, and other good and valuable consideration, the receipt and adequacy of which are now and forever acknowledged and confessed, the parties hereto hereby agree and intend to be legally bound as follows:

1.     The Financing.     TIGL shall use commercially reasonable efforts to raise approximately $5 million in a pre-listing equity financing transaction on terms that are reasonably satisfactory to TIGL and the Shareholder (the "Financing"). TIGL shall reserve for issuance shares of its common stock sufficient to consummate such equity financing.

2.     Reimbursement of Advances; Forgiveness of Fees; Issuance of Securities to BayPeak.     TIGL acknowledges that (i) BayPeak has prepaid certain fees on Dragon's behalf pursuant to the Cooperation Agreement, including legal fees and auditing fees, and will continue to prepay up to an aggregate of US $1 million of such fees until the consummation of the Financing and (ii) obligations to reimburse BayPeak for all prepaid expenses of Dragon under the Engagement Agreement and Cooperation Agreement will be assumed by TIGL. The parties acknowledge and agree that such fees shall be reimbursed upon the consummation of the Financing. BayPeak has agreed to forgive a $200,000 fee included in the Cooperation Agreement in consideration of the issuance by TIGL, of (i) shares in an amount equal to 6% of the total number of issued and outstanding shares of Common Stock, and Warrants to purchase an additional 8% of total then issued and outstanding Shares of TIGL, on a fully diluted basis, to BayPeak (the "Shares"). TIGL hereby agrees to issue such Securities to BayPeak immediately upon execution of this agreement. BayPeak hereby acknowledges and agrees that the issuance of the Securities fully and completely satisfies any obligations of Dragon to issue equity securities to Bay Peak, whether pursuant to the Engagement Agreement, Cooperation Agreement or otherwise.

SECURITIES PURCHASE AGREEMENT

Page 1

EXECUTION COPY

3.     Representations and Warranties.     In connection with BayPeak's purchase of the Shares pursuant to Section 2 above, BayPeak, hereby represents and warrants as follows:

A.

BayPeak understands the business in which the TIGL and WI LTD will be engaged and has such knowledge and experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of an investment in TIGL and making an informed investment decision with respect thereto. BayPeak has obtained sufficient information to evaluate the merits and risks of the investment and to make such a decision.

B.

BayPeak is an "Accredited Investor" (as such term is defined in Rule 501(a) of Regulation D of the Securities Act of 1933).

C.

BayPeak has had access to all documents, records and books of TIGL and WI LTD pertaining to this investment. Additionally, BayPeak has been provided the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain any additional information which TIGL and WI LTD possesses, or can acquire without unreasonable effort or expense, that is relevant to BayPeak's investment decision.

D.

BayPeak has adequate means of providing for its current needs and possible personal contingencies in the same manner as BayPeak would have been able to provide prior to making the investment in the Shares, has no need for liquidity in this investment, is aware of and able to bear the risks of the investment for an indefinite period of time, and presently, based on existing conditions, is able to afford a complete loss of such investment

E.

BayPeak recognizes that TIGL and WI LTD have limited financial or operating history and that the Shares as an investment involve significant risks.

F.

BayPeak understands that the Shares are "restricted securities" as that term is defined pursuant to Rule 144 of the Securities Act, and have not been registered under the Securities Act or under certain state securities laws in reliance upon exemptions therefrom for nonpublic offerings. BayPeak understands that the Shares must be held indefinitely unless the sale thereof is subsequently registered under the Act and under certain state securities laws or an exemption or exemptions from such registration are available.

SECURITIES PURCHASE AGREEMENT

Page 2

EXECUTION COPY

G.

The Shares are being purchased solely for BayPeak's account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, and no other person has a direct or indirect beneficial interest in such Shares. BayPeak represents that BayPeak has no agreement, understanding, commitment or other arrangement with any person and no present intention to sell, transfer or assign any Shares.

H.

BayPeak agrees not to sell or otherwise transfer the Shares unless they are registered under the Act and under any applicable state securities laws, or an exemption or exemptions from such registration are available.

I.

BayPeak is authorized and otherwise duly qualified to purchase and hold Shares and to enter into this Agreement and such entity has not been formed for the specific purpose of acquiring Shares in TIGL unless all of its equity owners qualify as accredited individual investors.

4.     Indemnification.     BayPeak agrees to indemnify and hold harmless TIGL from and against all liability, damage, losses, costs and expenses (including reasonable attorneys' fees and court costs) which they may incur by reason of any breach of the representations and warranties made by BayPeak herein, or in any document provided by BayPeak to TIGL.

5.     Legends.     BayPeak hereby agrees with TIGL that the Shares will bear the following legend or one that is substantially similar to the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

Additionally, the Shares will bear any legend required by the "blue sky" laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended. BayPeak consents to TIGL making a notation on its records or giving instructions to its Transfer Agent in order to implement the restrictions on transfer of the Shares.

SECURITIES PURCHASE AGREEMENT

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EXECUTION COPY

6.     Piggy-Back Registration Rights.

A.

If at any time after the date hereof, TIGL shall determine to register for its own account or the account of others under the Securities Act (including pursuant a demand for registration of any stockholder of TIGL) any of its equity securities, other than in connection with the IPO or on Form S-4 or Form S-8 or their then equivalents relating to shares of Common Stock to be issued solely in connection with any acquisition of any entity or business or shares of Common Stock issuable in connection with stock option or other employee benefit plans, it shall send to each holder of Registrable Shares who is entitled to registration rights under this Section 6 written notice of such determination and, if within twenty (20) days after receipt of such notice, such holder shall so request in writing, TIGL shall use its best efforts to include in such registration statement all or any part of the Registrable Shares such holder requests to be registered, except that if; in connection with a public offering of TIGL the managing underwriter shall impose a limitation on the number of shares of such Common Stock which may be included in the registration statement because, in its judgment, such limitation is necessary to effect an orderly public distribution, then TIGL shall be obligated to include in such registration statement only such limited portion of the Registrable Shares with respect to which such holder has requested inclusion hereunder on a pro rata basis. "Registrable Shares" shall mean the Shares issuable pursuant to this Agreement; provided, however, that shares of Common Stock which are Registrable Shares shall cease to be Registrable Shares upon the consummation of any sale pursuant to a registration statement or Rule 144 under the Securities Act or once such shares become eligible for resale pursuant to Rule 144(k).

B.

TIGL will use its best efforts to keep effective any registration or qualification contemplated by this Section 6 and shall from time to time amend or supplement each applicable registration statement, preliminary prospectus, final prospectus, application, document and communication until such time as all of the Shares may be sold without volume restrictions pursuant to Rule 144, in each case as determined by the counsel to TIGL pursuant to a written opinion letter to such effect, addressed and acceptable to TIGL's transfer agent. TIGL will also provide each holder of Registrable Shares with as many copies of the prospectus contained in any such registration statement as it may reasonably request.

SECURITIES PURCHASE AGREEMENT

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C.

Indemnification by TIGL.

(i) In the event that TIGL registers any of the Registrable Shares under the Securities Act, TIGL will indemnify and hold harmless each holder and each underwriter of the Registrable Shares (including their officers, directors, affiliates and partners) so registered (including any broker or dealer through whom such shares may be sold) and each person, if any, who controls such holder or any such underwriter within the meaning of Section 15 of the Securities Act from and against any and all losses, claims, damages, expenses or liabilities, joint or several, to which they or any of them become subject under the Securities Act, applicable state securities laws or under any other statute or at common law or otherwise, as incurred, and, except as hereinafter provided, will reimburse each such holder, each such underwriter and each such controlling person, if any, for any legal or other expenses reasonably incurred by them or any of them in connection with investigating or defending any actions whether or not resulting in any liability, as incurred, insofar as such losses, claims, damages, expenses, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement, in any preliminary or amended preliminary prospectus or in the final prospectus (or the registration statement or prospectus as from time to time amended or supplemented by TIGL) or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or any violation by TIGL of any rule or regulation promulgated under the Securities Act or any state securities laws applicable to TIGL and relating to action or inaction required of TIGL in connection with such registration, unless (i) such untrue statement or alleged untrue statement or omission or alleged omission was made in such registration statement, preliminary or amended preliminary prospectus or final prospectus in reliance upon and in conformity with information furnished in writing to TIGL in connection therewith by any such holder of Registrable Shares (in the case of indemnification of such holder), any such underwriter (in the case of indemnification of such underwriter) or any such controlling person (in the case of indemnification of such controlling person) expressly for use therein, or unless (ii) in the case of a sale directly by such holder of Registrable Shares (including a sale of such Registrable Shares through any underwriter retained by such holder of Registrable Shares to engage in a distribution solely on behalf of such holder of Registrable Shares), such untrue statement or alleged untrue statement or omission or alleged omission was contained in a preliminary prospectus and corrected in a final or amended prospectus copies of which were delivered to such holder of Registrable Shares or such underwriter on a timely basis, and such holder of Registrable Shares failed to deliver a copy of the final or amended prospectus at or prior to the confirmation for the sale of the Registrable Shares to the person asserting any such loss, claim, damage or liability in any case where such delivery is required by the Securities Act.

(ii) Promptly after receipt by any holder of Registrable Shares, any underwriter or any controlling person of notice of the commencement of any action in respect of which indemnity may be sought against TIGL, such holder of Registrable Shares, or such underwriter or such controlling person, as the case may be, will notify TIGL in writing of the commencement thereof (provided, that failure by any such person to so notify TIGL shall not relieve TIGL from any liability it may have hereunder to any other person entitled to claim indemnity or contribution hereunder) and, subject to the provisions hereinafter stated, TIGL shall be entitled to assume the defense of such action (including the employment of counsel, who shall be counsel reasonably satisfactory to such holder of Registrable Shares, such underwriter or such controlling person, as the case may be), and the payment of expenses insofar as such action shall relate to any alleged liability in respect of which indemnity may be sought against TIGL.

SECURITIES PURCHASE AGREEMENT

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(iii) In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which any holder of Registrable Shares exercising rights under this Section 6 or any controlling person of any such holder, makes a claim for indemnification pursuant to this Section 6 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 6 provides for indemnification in such case, then, TIGL and such holder will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of TIGL on the one hand and of the holder of Registrable Shares on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of TIGL on the one hand and of the holder of Registrable Shares on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by TIGL on the one hand or by the holder of Registrable Shares on the other, and each party's relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case, (A) no such holder will be required to contribute any amount in excess of the public offering price of all such Registrable Shares offered by it pursuant to such registration statement, net of any underwriting discounts or commissions paid by such holder; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

D.

Indemnification by Holders of Registrable Shares.

(i) In the event that TIGL registers any of the Registrable Shares under the Securities Act, each holder of the Registrable Shares so registered will, as a condition to registration of the Registrable Shares, agree to indemnify and hold harmless TIGL, each of its directors, each of its officers who have signed or otherwise participated in the preparation of the registration statement, each underwriter of the Registrable Shares so registered (including any broker or dealer through whom such of the shares may be sold) and each person, if any, who controls TIGL within the meaning of Section 15 of the Securities Act from and against any and all losses, claims, damages, expenses or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, applicable state securities laws or under any other statute or at common law or otherwise, and, except as hereinafter provided, will reimburse TIGL and each such director, officer, underwriter or controlling person for any legal or other expenses reasonably incurred by them or any of them in connection with investigating or defending any actions whether or not resulting in any liability, insofar as such losses, claims, damages, expenses, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement, in any preliminary or amended preliminary prospectus or in the final prospectus (or in the registration statement or prospectus as from time to time amended or supplemented) or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, but only insofar as any such statement or omission was made in reliance upon and in conformity with information furnished in writing to TIGL in connection therewith by such holder of Registrable shares expressly for use therein; provided, however, that such holder's obligations hereunder shall be limited to an amount equal to the aggregate public offering price of the Registrable Shares sold by such holder in such registration, net of any underwriting discounts or commissions paid by such holder.

SECURITIES PURCHASE AGREEMENT

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EXECUTION COPY

(ii) In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which TIGL or another person entitled to indemnification pursuant to this Section 6 makes a claim for indemnification pursuant to this Section 6, but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding that this Section 6 provides for indemnification, in such case, then, TIGL and such holder will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of TIGL on the one hand and of the holder of Registrable Shares on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of TIGL on the one hand and of the holder of Registrable Shares on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by TIGL on the one hand or by the holder of Registrable Shares on the other, and each party's relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case, (A) no such holder will be required to contribute any amount in excess of the public offering price of all such Registrable Shares offered by it pursuant to such registration statement, net of any underwriting discounts or commissions paid by such holder; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

7.     Exchange Act Reports.     TIGL will use commercially reasonable efforts to (i) timely file with the SEC such information as the SEC may require under the Exchange Act and (ii) take all action as may be required as a condition to the availability of Rule 144 or Rule 144A under the Securities Act (or any successor exemptive rule hereafter in effect) with respect to such Common Stock. TIGL shall furnish to any holder of Registrable Shares forthwith upon request (i) a written statement by TIGL as to its compliance with the reporting requirements of Rule 144, (ii) a copy of the most recent annual or quarterly report of TIGL as filed with the Commission, and (iii) such other public reports and public documents as a holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a holder to sell any such Registrable Securities without registration. TIGL agrees to use commercially reasonable efforts to facilitate and expedite transfers of the shares pursuant to Rule 144 under the Securities Act, which efforts shall include timely notice to its transfer agent to expedite such transfers of shares. As long as BayPeak owns any Shares, if TIGL is not required to file reports pursuant to such laws, TIGL will prepare and furnish to BayPeak and make publicly available in accordance with Rule 144(c) promulgated by the SEC pursuant to the Securities Act, such information as is required for BayPeak to sell the Shares under Rule 144.

SECURITIES PURCHASE AGREEMENT

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EXECUTION COPY

8.     Expenses.     In the case of each registration effected under Section 6, TIGL shall bear all reasonable costs and expenses of each such registration on behalf of the selling holders of Registrable Shares, including, but not limited to, TIGL's printing, legal and accounting fees and expenses, SEC and NASD filing fees and "Blue Sky" fees; provided, however, that TIGL shall have no obligation to pay or otherwise bear any portion of the underwriters' commissions or discounts attributable to the Registrable Shares being offered and sold by the holders of the Registrable Shares, or the fees and expenses of counsel for the selling holders of Registrable Shares in connection with the registration of the Registrable Shares.

9.     Transferability.     For all purposes of Section 6 of this Agreement, BayPeak or an assignee thereof who agrees to be bound by the provisions of Section 6 shall be deemed at any particular time to be the holder of all Registrable Securities of which such person shall at such time be the "beneficial owner," determined in accordance with Rule 13d-3 under the Exchange Act.

10.     Restrictions on Future Issuances of Securities.     For a period of twelve (12) months commencing on the date of this Agreement, without the prior written consent of BayPeak, TIGL shall not issue (a) any shares of the capital stock of TIGL, whether now authorized or authorized in the future, or (b) any rights, options or warrants to purchase any shares of the capital stock of TIGL, or (c) any other securities of TIGL of any type that are or may become convertible into or exercisable for any shares of the capital stock of TIGL, except in connection with the IPO and the Financing.

11.     Appointment of Chief Financial Officer.     TIGL shall, within three (3) months after the closing date of this agreement, hire a Chief Financial Officer with (i) experience with the generally accepted accounting principles of the United States and SEC financial reporting requirements and (ii) fluency in English.

12.     Notices.     All notices provided for in this Agreement shall be in writing signed by the party giving such notice, and delivered personally or sent by overnight courier or messenger or sent by registered or certified mail, return receipt requested, or by telex, facsimile transmission, telegram or similar means of communication if confirmed by mail to TIGL at its current address or such other address as may be specified in TIGL's reports that are filed from time to time with the SEC and to BayPeak at its address as it appears on the books and records of TIGL. Notices shall be deemed to have been received on the date of personal delivery or facsimile, or if sent by certified or registered mail, return receipt requested, shall be deemed to be delivered on the third business day after the date of mailing. A copy of any notice shall also be delivered to Pillsbury Winthrop Shaw Pittman LLP, 50 Fremont Street, San Francisco, CA 94105, Attention: Scott C. Kline, Esq., Facsimile: (415) 983-1200.

SECURITIES PURCHASE AGREEMENT

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13.     Attorney's Fee.     If any legal action or any arbitration or other proceeding is brought for the enforcement or interpretation of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with or related to this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys' fees and other costs in connection with that action or proceeding, in addition to any other relief to which it or they may be entitled.

14.     Waiver.     The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by such other party.

15.     Choice of Law.     This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof, except to the extent the laws of Nevada are mandatorily applicable to the transactions contemplated hereby.

16.     Complete Agreement.     This Agreement, together with the Engagement Agreement and Cooperation Agreement, contains the entire agreement of the parties relating to the subject matter hereof. This Agreement and its terms may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. It is understood that this Agreement may be prepared and executed in both the English and Chinese languages, with both versions having legal efficacy. If a dispute arises as to the interpretation of a particular provision of this Agreement because of differences between the Chinese and English languages, the English version shall prevail. If any provision of this Agreement, or any interpretation thereof, conflicts with any provision of the Engagement Agreement or Cooperation Agreement, the terms of this Agreement shall prevail.

17.     Counterparts.     This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

18.     Binding Effect.     This Agreement shall be binding upon the parties hereto and inure to the benefit of the parties, their respective heirs, administrators, executors, successors and assigns.

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SECURITIES PURCHASE AGREEMENT

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

BayPeak:

BayPeak LLC

By:________________________

Name: Cory Roberts

Title: Managing Member

TIGL:

Touchstone Industry Group Limited

By:________________________

Name:

Title:

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EX-10.2

Exhibit 10.2

EARN-IN AGREEMENT

This EARN-IN AGREEMENT (the “Agreement”) is made as of September 1, 2008 (the “Effective Date”), between and among (i) Song LiQiang, a citizen of the  United States of America (the “Shareholder”) ; and (ii) Yuan Xuetian and Chen Jinwei, individual citizens of the People’s Republic of China (collectively the “Buyers”, each a “Buyer”) (each of the foregoing, a “Party” and together, the “Parties”). Capitalized terms not otherwise defined have the meanings assigned to them in Appendix A to this Agreement.

RECITALS

A.

The Shareholder is beneficial and record owner of 81,083,686 shares of the Common Stock, $.001 par value, of Bay Peak 2 Acquisition Corp., a Nevada corporation (“BP2”).

B.

BP2 is the sole shareholder of Touchstone Industry Group Limited, a British Virgin Islands company (“Touchstone”), which is the sole shareholder of Wellcare International Limited, a company existing under the laws of Hong Kong (“Holdco”), which in turn is the sole shareholder of Beijing Rong Chuanrui Tour Consulting Co., Ltd (“Rong Chuanrui”), which in turn is the sole shareholder of Nanjing Qianjiu Enterprise Management and Consulting Co., Ltd (“Nanjing Qianjiu”), which in turn is the sole shareholder of Tianjin Longhai Longjia Enterprise Management and Consulting Co., Ltd (“Tianjin Longhai Longjia”), which in turn is the sole shareholder of Tianjin Golden Dragon Sky Travel Co., Ltd (“Sky Travel”), which in turn is the sole shareholder of Tianjin Golden Dragon International Travel Service Co., Ltd (“International Travel”), which in turn is the 70% shareholder of Nanjing Feiyu Travel Service Co., Ltd (“Nanjing Feiyu”). Rong Chuanrui, Nanjing Qianjiu, Tianjin Longhai Longjia, Sky Travel, International Travel and Nanjing Feiyu are limited liabilities companies existing under the laws of the People’s Republic of China.   Touchstone, Holdco, Rong Chuanrui, Nanjing Qianjiu, Tianjin Longhai Longjia, Sky Travel, International Travel and Nanjing Feiyu will be collectively referred to as the “subsidiaries”.  Sky Travel, International Travel and Nanjing Feiyu will be collectively referred to as the “Operating Companies”.

C.

The Buyers are the founders of Sky Travel and International Travel.

D.

The Shareholder believes that the continuing services of the Buyers in their roles with BP2 and the Operating Companies are critical to the continued success of the business of BP2 and Operating Companies and therefore to the value of the shares of BP2 held by the Shareholder; and

E.

The Shareholder therefore wishes to provide the Buyers with an incentive to continue to devote their full time and attention to the business of BP2 and the Operating Companies by entering into this Agreement, and the Buyers are willing to devote their full attention to that business in part because of the benefit they hope to gain pursuant to this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficient of which is acknowledged by the Parties, the Parties agree as follows:

AGREEMENT

The Parties to this Agreement, intending to be bound thereby, in consideration for the mutual promises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the Parties, agree as follows.

1

ARTICLE I

CALL RIGHT

1.1

Maintenance of Option Shares.   From and after the date of this Agreement and through and including the Expiration Date, the Shareholder irrevocably agrees it will not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, or announce the offering of, any of the Option Shares (as such term is defined herein), including any securities convertible into, or exchangeable for, or representing the rights to receive, Option Shares.  In furtherance thereof, BP2 will (x) place a stop order on all Option Shares covered by any registration statements, (y) notify its transfer agent in writing of the stop order and the restri ctions on such Option Shares under this Agreement and direct the transfer agent not to process any attempts by the Shareholder to resell or transfer any Option Shares under such registration statements or otherwise in violation of this Agreement.

1.2

Call Right.   The Buyers will have, during the Exercise Period, and when a Condition is met, the right and option (the “Call Right”) to purchase from the Shareholder, and upon the exercise of such right and option the Shareholder will have the obligation to issue and sell to the Buyers, a portion of the Option Shares identified in the Call Exercise Notice. The Buyers will be permitted to purchase, and the Shareholder will be obligated to issue and sell, the following numbers of Option Shares upon the attainment of the following Conditions. “Option Shares” means an aggregate of 74,107,658 shares of common stock of BP2 owned by Shareholder as to which a Call Right is granted by this Agreement.  In each exercise of the Call Right, Yuan Xue tian will be entitled to purchase 60% of the number of Option Shares to be issued in that exercise, and Chen Jinwei will be entitled to purchase 40% of the number of Option Shares to be issued in the same exercise.

Condition	Number of the Option Shares as to which there is a Call Right
Condition 1	18,526,914 Shares, representing 25% of the Option Shares
Condition 2	18,526,914  Shares, representing 25% of the Option Shares
Condition 3	18,526,914  Shares, representing 25% of the Option Shares
Condition 4	18,526,914  Shares, representing 25% of the Option Shares

1.3

Call Period.  The Call Right will be exercisable by any Buyer by delivering a Call Exercise Notice at any time during the period (the “Exercise Period”) commencing on the date upon which Condition 1 has been satisfied (the “Initial Call Date”) and ending at 6:30 p.m. (New York time) on the fifth anniversary of the Initial Call Date (such date or the earlier expiration of the Call Right is referred to herein as the “Expiration Date”).

1.4

Exercise Process.   In order to exercise the Call Right during the Exercise Period, the Buyer will deliver to the Shareholder a written notice of such exercise substantially in the form attached hereto as Exhibit B (a “Call Exercise Notice”) to such address or facsimile number set forth therein. The Call Exercise Notice will indicate the number of the Option Shares as to which the Buyer is then exercising its Call Right and the aggregate Call Price. Provided the Call Exercise Notice is delivered in accordance with Section  to the Shareholder on or prior to 6:30 p.m. (Beijing time) on a Business Day, the date of exercise (the “Exercise Date”) of the Call Right will be the date of such delivery of such Call Exercise Notice. In the event the Call Exercise Notice is delivered after 6:30 p.m. (Beijing time) on any day or on a date which is not a Business Day, the Exercise Date will be deemed to be the first Business Day after the date of such delivery of such Call Exercise Notice. The delivery of a Call Exercise Notice in accordance herewith will constitute a binding obligation (a) on the part of the Buyer to purchase and (b) on the part of the Shareholder to sell, the Option Shares subject to such Call Exercise Notice in accordance with the terms of this Agreement.

2

1.5

Call Price.   If the Call Right is exercised pursuant to this , as payment for the Option Shares issued to and purchased by the Buyer pursuant to the Call Right, the Buyer will pay the applicable Call Price to the Shareholder no later than fifteen (15) Business Days after the Exercise Date.

1.6

Delivery of the Shares.   Upon the receipt of a Call Exercise Notice, the Shareholder will deliver, or take all steps necessary to cause to be delivered, the Option Shares being issued to and purchased by the Buyers pursuant to such Call Exercise Notice.

ARTICLE II

ENCUMBRANCES, SET-OFF

2.1

Encumbrances.   Upon the issuance and sale of any Option Shares to the Buyers pursuant to an exercise of the Call Right, such Option Shares will be validly issued and outstanding, fully paid and nonassessable, with no personal liability attaching to the ownership thereof, free and clear of any liens whatsoever and with no restrictions on the voting rights thereof and other incidents of record and beneficial ownership pertaining thereto.

2.2

Set-off.   The Buyers will be absolutely entitled to receive all the Option Shares subject to the exercise of a Call Right, and for the purposes of this Agreement, the Shareholder hereby waives, as against the Buyers, all rights of set-off or counterclaim that would or might otherwise be available to the Shareholder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1

Representations and Warranties of the Shareholder.    The Shareholder represents and warrants to the Buyers, that:

(a)

Due Authorization.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereunder to be carried out by it have been duly authorized by all necessary action on the part of the Shareholder. This Agreement, and all agreements and documents executed and delivered pursuant to this Agreement, constitute valid and binding obligations of the Shareholder, enforceable against the Shareholder in accordance with its terms, subject to applicable Bankruptcy Laws and other laws or equitable principles of general application affecting the rights of creditors generally.  

(b)

No Conflicts.   Neither the execution or delivery of this Agreement by the Shareholder nor the fulfillment or compliance by the Shareholder with any of the terms hereof will, with or without the giving of notice and/or the passage of time, (i) conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract or any judgment, decree or order to which the Shareholder is subject or by which the Shareholder is bound, or (ii) require any consent, license, permit, authorization, approval or other action by any Person or Governmental Body which has not yet been obtained or received. The execution, delivery and performance of this Agreement by the Shareholder or compliance with the provisions hereof by the Shareholder does not, and will not, viol ate any provision of any Law to which the Shareholder is subject or by which it is bound.

3

(c)

No Actions.   There are no lawsuits, actions or, to the best knowledge of the Shareholder, investigations, claims or demands or other proceedings pending or, to the best of the knowledge of the Shareholder, threatened against the Shareholder that, if resolved in a manner adverse to the Shareholder, would adversely affect the right or ability of the Shareholder to carry out its obligations set forth in this Agreement.

3.2

Representations and Warranties of the Buyers.   Each of the Buyers represents and warrants to the Shareholder, that:

(a)

Due Authorization.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereunder to be carried out by it have been duly authorized by all necessary action on the part of the Buyer. This Agreement, and all agreements and documents executed and delivered pursuant to this Agreement, constitute valid and binding obligations of the Buyer, enforceable against the Buyer in accordance with its terms, subject to applicable Bankruptcy Laws and other laws or equitable principles of general application affecting the rights of creditors generally.

(b)

No Conflicts.  Neither the execution or delivery of this Agreement by the Buyer nor the fulfillment or compliance by the Buyer with any of the terms hereof will, with or without the giving of notice and/or the passage of time, (i) conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, (A) the organizational or charter documents of the Buyer or (B) any contract or any judgment, decree or order to which the Buyer is subject or by which the Buyers is bound, or (ii) require any consent, license, permit, authorization, approval or other action by any Person or Governmental Body which has not yet been obtained or received. The execution, delivery and performance of this Agreement by the Buyer or compliance with the provisions hereof by the Buyer does not, and will not, violate any provision of any Law to which the Buyer is subject or by which it is bound.

(c)

No Actions.  There are no lawsuits, actions or, to the best knowledge of the Buyer, investigations, claims or demands or other proceedings pending or, to the best knowledge of the Buyer, threatened against the Buyer that, if resolved in a manner adverse to the Buyer, would adversely affect the right or ability of the Buyer to carry out its obligations set forth in this Agreement.

ARTICLE IV

EVENTS OF DEFAULT AND TERMINATION

4.1

Events of Default.  The occurrence at any time with respect to a Party (the “Defaulting Party”) of any of the following events will constitute an event of default (an “Event of Default”) with respect to such party:

(a)

Failure to Pay or Deliver.  The failure by a Party to make, when due, any payment under this Agreement or deliver the Option Shares in accordance with this Agreement, if such failure is not remedied on or before the third Business Day after notice of such failure is given to the Defaulting Party.

(b)

Breach of Agreement.  The failure by a Party to comply with or perform any agreement, covenant or obligation (other than a failure described in Section , which will be governed by Section ) to be complied with or performed by such Party in accordance with this Agreement if such failure is not remedied on or before the tenth Business Day after notice of such failure is given to the Defaulting Party.

(c)

Bankruptcy.  A Party (1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any relief under any Bankruptcy Law, or a petition is presented for its winding-up or liquidation, and in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liqu idation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all of its assets; (7) has a secured party take possession of all or substantially all of its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all of its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or rescinded, in each case within 30 days thereafter; (8) causes or is subject to any event with respect to it that, under applicable Law, has an analogous effect to any of the eve nts described in clauses (1) through (7); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

4

4.2

Termination.   If at any time an Event of Default with respect to a Party has occurred and is continuing, the other party may terminate this Agreement and deem the Expiration Date to have occurred by giving written notice to the Defaulting Party specifying the relevant Event of Default.

ARTICLE V

MISCELLANEOUS PROVISIONS

5.1

Further Assurances. Each Party will execute and/or cause to be delivered to each other Party such instruments and other documents, and will take such other actions, as such other Party may reasonably request (prior to, at or after the Closing) for the purpose of carrying out or evidencing any of the transactions contemplated by this Agreement.

5.2

Notices.   Any notice or other communication required or permitted to be delivered to any Party will be in writing and will be deemed properly delivered, given and received upon dispatch by hand, courier or express delivery service with receipt confirmed by signature of the addressee, to the address set forth beneath the name of such Party below (or to such other address as such Party may specify in a written notice given to the other Parties):

If to the Shareholder:	China World Tower 1, Ste. 1810 No.1 JianGuoMenWai Avenue Beijing 10004, China
If to the Buyer:	Yuan Xuetian 5F Wan Zhao Kemao Building, Fu’an Street, Heping District, Tianjin, PRC and, Chen Jinwei 5F Wan Zhao Kemao Building, Fu’an Street, Heping District, Tianjin, PRC

5

5.3

Time of The Essence.   Time is of the essence of this Agreement.

5.4

Headings, Gender and Usage.   The headings contained in this Agreement are for convenience of reference only, will not be deemed to be a part of this Agreement and will not be referred to in connection with the construction or interpretation of this Agreement. For purposes of this Agreement:  the words “include” and “including” will be taken to include the words, “without limitation;” and  whenever the context requires, the singular number will include the plural, and vice versa; and each of the masculine, feminine and neuter genders will refer to the others.

5.5

Governing Law and Language.   This Agreement, including all matters of construction, validity and performance, will in all respects be governed by, and construed in accordance with, the laws of the State of New York  (without giving effect to principles relating to conflict of laws).  This Agreement is written in English and the English language will govern any interpretation of this Agreement.

5.6

Venue and Jurisdiction.   If any legal proceeding or other legal action relating to this Agreement is brought or otherwise initiated, the venue therefor will be in the State of New York, which will be deemed to be a convenient forum.  Each of the Parties hereby expressly and irrevocably consents and submits to the jurisdiction of the courts in the State of New York .

5.7

Interpretation.  Each Party acknowledges that it has participated in the drafting of this Agreement, and any applicable rule of construction to the effect that ambiguities are to be resolved against the drafting party may not be applied in connection with the construction or interpretation of this Agreement.

5.8

Successors and Assigns.  Each of the Parties will not assign this Agreement or any rights or obligations hereunder without the prior written consent of the other Party. The provisions hereof will inure to the benefit of, and be binding upon, the successors and permitted assigns of the Parties.

5.9

Waiver.

(a)

No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Person in exercising any power, right, privilege or remedy under this Agreement, will operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy will preclude any other or further exercise thereof or of any other power, right, privilege or remedy.

(b)

No Person will be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such Person; and any such waiver will not be applicable or have any effect except in the specific instance in which it is given.

5.10

Entire Agreement; Amendment.  This Agreement constitutes the full and entire understanding and agreement between the Parties with regard to the subject matter hereof. Any term of this Agreement may be amended only with the written consent of each Party.

5.11

Severability.   In the event that any provision of this Agreement, or the application of any such provision to any Person or set of circumstances, will be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision to Persons or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable, will not be impaired or otherwise affected and will continue to be valid and enforceable to the fullest extent permitted by law.

6

5.12

Entire Agreement.   This Agreement sets forth the entire understanding of the Parties relating to the subject matter hereof and supersedes all prior agreements and understandings among or between any of the parties relating to the subject matter thereof.

5.13

Counterparts. This Agreement may be executed in several counterparts, each of which will constitute an original and all of which, when taken together, will constitute one agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

7

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered as of the date first set forth above.

“SHAREHOLDER”

SONG LIQIANG, an individual citizen of United States of America

By: /s/ Song LiQiang

“BUYERS” YUAN XUETIAN, an individual citizen of the People’s Republic of China


By: /s/ Yuan Xuetian
CHEN JINWEI, an individual citizen of the People’s Republic of China


By: /s/ Chen Jinwei

Attachments:

Exhibit A

Certain Definitions

Exhibit B

Form of Call Exercise Notice

8

 

EXHIBIT A

CERTAIN DEFINITIONS

For purposes of this Agreement (including this Exhibit A):

“Bankruptcy Law” means any Law of any jurisdiction relating to bankruptcy, insolvency, corporate reorganization, company arrangement, civil rehabilitation, special liquidation, moratorium, readjustment of debt, appointment of a conservator, trustee or receiver, or similar debtor relief.

“Call Price” means, with respect to any exercise of the Call Right, the par value or US$ 0.001 per share of the Option Shares subject to any Call Exercise Notice, provided, that the aggregate Call Price with respect to the Option Shares eligible to be purchased by the Buyer upon exercise of the Call Right relating to the satisfaction of Condition 4 will be the sum of (i) the par value or US$ 0.001 per share multiplied the number of such Option Shares plus (ii) [US$ 1,000].

“Conditions” means Conditions 1 through 4, in the aggregate.

“Condition 1” means the occurrence of the date that is six months after the date of this Agreement, provided, however, that  on or before that date, the Buyers and BP2 or an Operating Company have entered into a binding employment agreements, in form and substance satisfactory to BP2; and  the Buyers are employed by BP2 or an Operating Company pursuant to that agreement on such date.

“Condition 2” means the United States Securities and Exchange Commission declaring effective a registration statement on Form 10 filed by the Company under the Securities Exchange Act of 1934, as amended.

“Condition 3” means BP2 and its subsidiaries, on a consolidated basis, achieving not less than US$5,400,000 in after-tax net income, as determined under US GAAP for the period ended September 2009.  Notwithstanding the foregoing, the Parties agree that for purposes of determining whether or not the US$5,400,000 in after-tax net income have been achieved, the purchase of the Option Shares by the Buyers or any other person designated by the Buyer shall not be deemed to be an expense, charge, or other deduction from revenues of BP2 even though GAAP may require contrary treatment. 

“Condition 4” means BP2 and its subsidiaries, on a consolidated basis, achieving not less than US$9,000,000 in pre tax profits, as determined under US GAAP for the fiscal year ending 2009.  Notwithstanding the foregoing, the Parties agree that for purposes of determining whether or not the US$9,000,000 in pre tax profits have been achieved, the purchase of the Option Shares by the Buyers or any other person designated by the Buyers shall not be deemed to be an expense, charge, or other deduction from revenues of the Company even though GAAP may require contrary treatment.

 “Effective Date” is defined in the Preamble.

“Encumbrance” means any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, equity, trust, equitable interest, claim, preference, right of possession, lease, tenancy, license, encroachment, covenant, infringement, interference, Order, proxy, option, right of first refusal, preemptive right, community property interest, legend, defect, impediment, exception, reservation, limitation, impairment, imperfection of title, condition or restriction of any nature (including any restriction on the transfer of any asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).

 “GAAP” means generally accepted accounting principles consistently applied during the relevant period.

“Governmental Body” means any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-Governmental Body of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or Entity and any court or other tribunal); (d) multi-national organization or body; or (e) individual, Entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature.

9

“Holdco” is defined in the Recitals.

 “Law” means any national, federal, state, local, municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement, specification, determination, decision, opinion or interpretation issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Body.

“Operating Companies” is defined in the Recitals.

“Party” and “Parties” are defined in the Preamble to this Agreement.

“Person” means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 “US GAAP” means United States Generally Accepted Accounting Principles consistently applied.

10

EXHIBIT B

FORM OF CALL EXERCISE NOTICE

[Date]

SONG LIQIANG China World Tower 1, Ste. 1810

No.1 JianGuoMenWai Avenue

Beijing 10004, China

Re: Earn-In Agreement dated September 1, 2008 (the “Earn-In Agreement”), between and among (i) Song LiQiang, a citizen of the People’s Republic of China (the “Shareholder”); and (ii) Yuan Xuetian and Chen Jinwei, individual citizens of the People’s Republic of China (collectively the “Buyers”, each a “Buyer”)

Dear Sir:

In accordance with Section  of the Earn-In Agreement, the undersigned Buyer hereby provides this notice of exercise of the Call Right in the manner specified below:

(a) The Buyer hereby exercises its Call Right with respect to the Option Shares pursuant to the Earn-In Agreement.

(b) The Buyers will pay the sum of $____________ to the Shareholder.

(d) Pursuant to this exercise, the Shareholder will deliver to _______________ the Option Shares in accordance with the instructions attached hereto.

Dated: _______________, ______
	__________________________________

11

EX-10.3

 

Exhibit 10.3

(English Translation)

Loan Agreement

Party A Mr. Yuan Xuetian

Party B Tianjin Golden  Dragon International Travel Service Co., Ltd

As of December 31^st 2007, Party A borrowed from Party B totaling RMB 34,152,826 Yuan, which was used for market exploitation. The two parties negotiated and agreed that the loan was free of interest. Party A should repay RMB 9.5 million Yuan by the end of October 2008. For another part of the loan, amount to RMB 6.2 million Yuan, Party A planned to repay by netting off its profit distribution from Party B by the end of 2008. The two parties negotiated and agreed that the remaining loan was treated as distribution to Party A. The agreement is duplicated. Party A and Party B shall each take one copy.

Signature and seal of the two parties.

Party A

Yuan Xuetian

July 3rd 2008

Party B

Tianjin Golden Dragon International Travel Service Co., Ltd

July 3rd 2008

EX-10.4

Exhibit 10.4

(English Translation)

Credit Loan Agreement for Automobile Buyer

Contract No.: 23881777-4WL01

Borrower (“Party A”): Tianjin Golden Gradon Int’l Travel Service Co., Ltd

Address: 2-D-510, Xinliju, Xinwenhua Garden, Fu'an Street, Heping District, Tianjin, China

Zip Code: 300021

Tel: 022-23068003

Fax: 022-23068002

Lender (“Party B”): First Automobile Finance Co. Ltd.

Address: No. 19, Dongfeng Street, Changchun City

Zip Code: 130011

Tel: 0431-7614679

Fax: 0431-5900294

Party A wholesale purchased automobiles from the brand automobile sales companies subsidiary to China Faw Group Corporation (hereinafter “Faw Group”) or distributors within the commercial networks of Faw Group (hereinafter the “Seller”), and desired to apply for the loan from Party B.  To specify the parties’ rights and obligations, the Parties hereby reach this Agreement upon mutual and equal cooperation to abide by.

1

Type and Use of the Loan

1.1

The loan hereunder is the buyer’s credit.

1.2

The loan hereunder is exclusively used for wholesale purchasing automobiles from the Seller, Party A shall not change the use of the loan without Party B’s written consent.

2

Loan Amount, Term and Withdrawal

2.1

The loan amount hereunder is RMB 18,790,600.

2.2

The loan term hereunder is from Aug. 24, 2005 to May 19, 2008, which will be counted based on the actual date of withdrawal.

2.3

Preconditions to withdraw the loan (which shall be satisfied at the same time):

2.3.1

All the relevant fees payable are paid off hereunder;

2.3.2

Party A has already completed required approvals, registrations, deliveries and other compulsory formalities for the loan hereunder as per relevant rules and regulations;

2.3.3

The security agreement or other ways of security have been effective to Party B’s satisfactory when the Agreement is secured;

2.3.4

Party A has not breached the Agreement in any way; and

2.3.5

Party A shall submit effective receipts for the loan or receipts for withdrawing the loan two working days in advance.

2.4

Party B will grant the loan as long as Party A conforms with all the preconditions hereabove and Party A shall withdraw the total loan at one time.  The actual withdrawal date will be counted as per the date specified on the loan receipts or receipts for withdrawing the loan which are the inseverable part of this Agreement.  If there is any conflict between the loan receipts or receipts for withdrawing the loan and the Agreement, the Agreement prevails except for the matter of withdrawal date.

3

Loan Interest Rate and Accrual

3.1

The interest rate hereunder is : 5.28‰ per month.  The interest accrual will be calculated on a daily base starting from the actual withdrawal date.  When the loan is due, the interests shall be paid off together with the principal.

3.2

The interest rate hereunder is determined based on the state benchmark interest rate plus certain floating rate (the floating extent and direction is fixed during the loan term), and Party A agrees with any adjustment to the state benchmark interest rate during the loan term.  Party B is entitled to calculated the interests according to the adjusted interest rate and method based on the stipulations herein without notifying Party A.  Execution of this Article 3.2 by Party B will not be deemed as any modification or amendment to the Agreement .  The adjustment to the loan interest rate will take effect on the first day of the succeeding quarter when the adjustment to the state benchmark interest rate takes effect.  If the loan term is within one month (inclusive), the loan interest rate will not be adjusted.

4

Repayment

4.1

Party A shall fully pay off the principal and corresponding interests within the specified term herein.

4.2

Party A irrevocably chooses the following method of repaying the principal and interests.

4.2.1

Repay the equivalent amount installment of the principal and corresponding interests per month which will be calculated as per the following formula:

Payable repayment of the principal and interests every month=[principal × monthly interest rate × (1 + monthly interest rate)ⁿ] ÷ [(1 + monthly interest rate) ⁿ – 1] (n= total number of months for repayment)

The repayment date: the 19^th of each month.

4.3

The monthly interest rate used in the  hereabove refers to the loan interest rate specified in article  hereabove.

4.4

Every repayment date and specific details please refer to the appendix Repayment Schedule hereto.

4.5

Party A shall fully deposit the current payable installment of principal and interests to the deposit account opened by Party B before every repayment date as per the stipulations herein and hereby irrevocably authorize Party B to actively deduct the amount from aforementioned Party A’s account on the specified repayment date.  Should Party A adopt other ways of repayment, it shall fully deposit the payable principal and interests to the account designated by Party B before 3 pm every repayment date.  When Party A breaches the Agreement, it shall pay the account payable in the way designated by Party B without the limitations of repayment specified herein.

4.6

Upon the consent of Party B, Party A may apply for the advance repayment and it shall notify Party B at least five working days prior to the repayment date specified herein and execute corresponding advance repayment agreement which will be regards as the supplementary to this Agreement with the same legal force.  The unpaid principal and corresponding interests shall be repaid as per newly executed Repayment Schedule.

5

Loan Security

5.1

To guarantee the repayment of the loan hereunder, the loan is secured by the Mortgage Agreement with the number of 23881777-4wL01DY.

5.2

Party A is obliged to actively cooperate with Party B and make sure Party B execute corresponding mortgage agreement with the mortgager.

5.3

If there is or will be any change of the security hereunder which may adversely influence Party B’s credit, Party A shall provide another satisfactory security as per Party B’s requirement upon the notice.

5.4

Party A hereby confirms that Party B is entitled to exercise the rights stipulated in the mortgage agreement to realize its credit and abandon all the pleas against Party B for its aforementioned option.

6

Both Parties’ Rights and Obligations

6.1

Party A’s rights and obligations:

6.1.1

Withdraw and use the loan as per the term and use specified herein;

6.1.2

Shall not repay the loan in advance without the written consent by Party B;

6.1.3

Be responsible for the authenticity, effectiveness, accuracy and completeness of the materials provided to Party B for the loan review;

6.1.4

Accept the investigation, inquiry and supervision of the use of the loan hereunder conducted by Party B;

6.1.5

Cooperate with the investigation, inquiry and supervision of Party A’s production, operation and financial status and provide corresponding financial reports;

6.1.6

Pay off the principal and interests as per the stipulations herein;

6.1.7

Bear relevant costs and expenses hereunder, including but not limited with notarization, verification, assessment, registration and so on; and

6.1.8

Sign for the collection letters or documents and pay off within five days as of the receipt of aforementioned letters and documents.

6.1.9

Transfer of debt under the agreement to a third party before the loan is repaid shall be agreed by Party B in written.

6.2

Party B’s Rights and Obligations

6.2.1

Party B will receive from the bank account opened by Party A for Party B the principle, interest, compound interest, penalty interest and other fees payable by Party A according to the agreement.

6.2.2

Party B will provide loan to Party B according to the schedule under the agreement.  In case that the loan fails to be wired to the designated account by Party A due to any reason out of control of Party B, such as failure of bank payment system, and will assist Party A to eliminate such failure, however, Party B will not bear any liability for any possible loss occurred.

6.2.3

Party B is entitled to assign, at its discretion, part or all of its credit under the agreement to a third party, however, Party B shall notify Party A within 7 days after the execution of credit assignment agreement.

6.2.4

Party B is entitled to impose credit sanction against Party A, report to authorities or urge for repayment through disclosure on the press media, if Party A evades supervision of Party A, delays in repayment of principle and interest, or conduct any other materially illegal act.

7

Breach of Contract

7.1

Breach of Contract by Party A

Any following act of Party A will constitute or will be deemed as breach of the agreement during the term of the agreement:

7.1.1

Any representation or warrant by Party A in the agreement  proved to be incorrect or unreal, for instance, Party A provides to Party B with balance sheet, income statement or other financial reports which is false or hides important facts;

7.1.2

Failure to use the loan in the term or for the purpose specified in the agreement;

7.1.3

Failure to repay the principle and interest according to the schedule under the agreement;

7.1.4

Failure to cooperate on or refusal of examination by Party B in connection with use of loan and related business operation;

7.1.5

Transfer or disposal, or threat of transfer or disposal of important part of its assets without written consent of Party B, which could cause material damages to Party B,;

7.1.6

Possession by other creditors, take-over by designated trustee, receiver or staff of similar kind of Important part or all of the assets of Party A, or its assets under seizure, freeze, or other security excising state, which could cause material damages to Party B;

7.1.7

Consolidation, separation, merge, shareholding restructuring, contracting, lease, assets transfer, investment, decrease of capital, shareholding change, transfer of material assets, and other act by Party A, without written consent of Party B, that may sufficiently affect interest of Party B and risk the security of credit of Party B;

7.1.8

Deterioration of business and finance to the extent that Party A can not repay the debt due, or involvement in current or potential legal proceedings, or damage, loss of the mortgaged properties, or other events possibly risking the security of the loan, that Party B considers affecting or damaging the interests of Party B under the agreement while Party A fails to provide corresponding security measures required by Party B;

7.1.9

Other debt born by Party A has affected or will possibly affect its performance of obligations under the agreement, while Party B fails to provide corresponding security measures required by Party B;

7.1.10

Inability of Party A to bear the responsibilities under the agreement; or in case that the above events can be cured, Party A fails to provide effective remedy within 10 days after receiving the notice from Party B.

7.2

Brach of Contract by Guarantor (translation intentionally omitted)

7.3

Failure of Party A to provide new security required by Party B will be deemed as breach by Party A if any following event occurs to the mortgagor:

7.3.1

Mortgagor fails to buy insurance for the mortgaged properties requested by Party B, or fails to handle the insurance compensation according to the agreement in case of occurrence of any insurance incident;

7.3.2

Mortgagor fails to handle the compensation according to the agreement, in case of damage, loss, or decrease of value of mortgaged properties attribute to act of a third party;

7.3.3

Donation, transfer, lease, multiple mortgage, or other disposal of the mortgaged properties by Mortgagor without written consent of Party B;

7.3.4

Mortgagor fails to handle the payment according to the agreement, arisen from disposal of mortgaged properties agreed by Party B;

7.3.5

Mortgagor fails to recover the value of mortgaged properties in time or provide other security recognized by Party B in case of damage, loss, or decrease of value of mortgaged properties; and

7.3.6

Others.

7.4

Breach of Contract by Pledgor (translation intentionally omitted)

7.5

Party A shall be deemed to breach the contract if the security agreement or any other security method is invalid, null, cancelled, suspended, unenforceable, or the security provider has partially or entirely lost its capability to provide security or refuse to performance its obligations, and Party A fails to provide new security based on the request from Party B.

7.6

Breach of Contract by Party B

Any following act of Party B will constitute or will be deemed as breach of the agreement during the term of the agreement:

7.6.1

Party B fails to grant the loan to Party A as per the stipulations herein under the circumstances that Party A has already fully performed its obligations hereunder and satisfies the conditions for granting the loan.

8

Liabilities for Breach

8.1

Both Parties shall perform corresponding obligations hereunder.  The Party which does not perform or fully perform its obligations hereunder shall bear the liabilities for breach.

8.2

Party B is entitled with the following rights when the events of default occur as specified in article 7.1to 7.5:

8.2.1

Declare that all the loan is due in advance and demand Party A to immediately repay all the principal, interests and expenses hereunder.  For the part Party A is unable to repay, it will be additionally charged with liquidated damages as per article .

8.2.2

Demand Party A to pay off the overdue interests and have the setoff right to the capital in certain accounts.

8.2.3

If Party A does not repay the loan interests in time, Party B will impose penalty interests for the overdue loan as per relevant rules issued by People’s Bank of China and compound interests for the payable overdue interests, the penalty interest rate is 150% of the loan interest rate specified in article .

8.2.4

Demand Party A to provide new security for all the debt hereunder as per Party B’s requirement.

8.2.5

Exercise the right of security.

8.3

Party B shall pay liquidated damages for delay on a daily basis as per the interest rate specified in article  hereunder when the event under article 7.6.1 occurs.

9

Dispute Resolution

9.1

All the disputes between Party A and Party B arising herefrom will be resolved upon mutual discussion, if there is no agreement reached through the discussion, the parties shall launch the litigation to the people’s court where Party B’s domiciles is located.

10

Miscellaneous

10.1

Party B will take closed management to the special deposit account opened by Party A;

10.2

Party A shall pay RMB650,000 to the account set forth hereabove each month with the rental (if the rental is insufficient for the repayment, the balance will be made up by Party A) in order to repay the principal and interests of the loan.  The remaining money in the account shall be treated as the performance bond of the repayment and shall not be transferred.

EX-10.5

 

Exhibit 10.5

(English Translation)

Mortgage Contract for Automobile Credit

Contract No.: 2388177-4WL01DY

Debtor (hereinafter “Party A”): Tianjin Golden Dragon International Travel Service Co., Ltd

Address: 2-D-510, Xinliju, Xinwenhua Garden, Fu'an Street, Heping District, Tianjin, China

Postcode:  300021

Telephone:  022-23068003

Fax:  022-23068002

Creditor (hereinafter “Party B”): First Automobile Finance Co., Ltd

Address: No. 19, Dongfeng Street, Changchun City.

Postcode:  130011

Telephone:  800-846-8666

Fax:  0431-85900284

In order to secure the performance of Credit Loan Agreement for Automobile Buyer (Contract No. 23881777-4w101) (hereinafter referred as “Base Contract”) entered into between Tianjin Golden Dragon International Travel Service Co., Ltd (hereinafter referred as “Debtor to Base Contract”) and Party B under this agreement, Party A agrees to provide mortgage.  For the purpose of clarify the rights and obligations of the parties, based on the principle of equality and mutual benefit, the parties agree as follows:

1.

Representations and Warrants by Party A

1.1

Party A is the complete, effective, and legal owner or administrator authorized by the nation of the mortgaged properties which are free from any disputes in terms of ownership or the right of administration and operation.

1.2

Party A fully understands the purpose of the loan by the debtor under the Base Contract, and voluntarily provides mortgage for creditor under the Base Contract.

1.3

The objects of the mortgage can be legally used as mortgages.

1.4

Party A has acquired consent from all collective owners of the mortgaged properties in advance. The mortgage under the agreement is free from any restriction.

1.5

The mortgaged properties under the agreement are not confiscated, seized or controlled.

1.6

Party A has provided sufficient and reasonable description of the defects of the mortgaged properties under the agreement.

1.7

If part or all of the mortgaged properties under the agreement are leased, Party A will inform the mortgage to the tenant and notify Party B of the lease in written.

1.8

All the certificates of ownership or usage or other effective supporting certificates and related materials regarding the mortgaged properties provided to Party B shall be truthful, legal and effective.

1.9

Party A has been authorized by board of shareholders, board of directors or other utmost authority, as the case may be,  to execution of the agreement, which will not violate the laws, regulations and Articles of Association of the enterprise.

2.

Base Credit and its Amount under the Mortgage

The loan secured by Party A is an amount provided by the creditor of RMB 18,790,600.

3.

Term of Obligations Performance by Debtor under Base Agreement

3.1

The performance period for the Debtor to Base Contract of its obligations is the repayment period stipulated under the Base Contract.  The date for repayment of the principal and interest or the due date for any payment is the expiration date of performing obligations.  If the Base Contract requires that the loan will need to be repaid in installments, then the due date for each of the installments is the expiration date of performing obligations; if the Base Contract provides that the due date of the loan accelerates, then the accelerated due date will be the expiration date of performing the loan.

4.

Coverage of Mortgage

4.1

The mortgage covers the principal, interests, compound interests, penalty interests, liquidated damages, compensations, realization fee of mortgage (including but not limited to litigation fee, property preservation fee, implementation fee, attorney fee, travel and accommodation fee) and other fees.

5.

Specification of Mortgaged Properties

5.1

Mortgaged properties shall be the those specified in the List of Mortgaged Properties attached to the agreement.

5.2

The agreement of the value of the mortgaged properties in the List of Mortgaged Properties will neither be regarded as reference or basis for value assessment in disposal of the mortgaged properties by Party B according to Article 9, nor constitute any restriction on exercising the mortgage by Party B.

2

6.

Mortgage Registration

6.1

In case of mortgage registration required by laws and regulations or agreed by both parties, the parties shall conduct mortgage registration with relevant authorities within 15 days since the execution of the agreement.

6.2

Party A shall deliver the certificates evidencing the titles to the mortgaged properties to the possession of Party B after the registration of mortgaged properties.

7

Possession and Management of Mortgage Property

7.1

The mortgage property will be possessed and managed by Party A.  Party A shall take reasonable and necessary measures to maintain the mortgage property.  Party B may inspect such property from time to time.

7.2

Party A shall inform Party B of the damage and loss of the mortgage property and deliver the certificate which indicates the reason of the damage and loss issued by the competent authority to Party B promptly.

8

Insurance of Mortgage Property

8.1

Party A will pay the full insurance for the mortgage property before the execution of this Agreement and specify Party B as the first beneficiary.  There shall be no provision against Party B’s interest in the insurance policy.

8.2

The period of insurance shall be no less than 3 months longer than performance period of base agreement.  If the debts fail to be repaid according the schedule, Party A shall extend the insurance period accordingly.

8.3

Before the rescind or termination of this Agreement, Party A shall not suspend or terminate the insurance with any reason.  Otherwise, Party B is entitled to pay the insurance on behalf of Party A, and all the expenses shall be borne by Party A.

8.4

Within the terms of this Agreement, the insurance indemnity of the mortgage property shall be fully paid to Party B as the repayment, or deposit into the bank account designated by Party B as security amount for the base agreement and be paid to Party B when the debts become payable.

9

Realization of Mortgage

9.1

After the expiration of repayment period, if debtor fails to perform the repayment obligation, Party B is entitled to dispose the mortgage property hereunder.

9.2

When realizing the mortgage right, through the negotiation with Party A, Party B has the priority right for claim of the money agreed by both parties or from the auction or sell of the mortgage property.

3

9.3

The money from the disposal of the mortgage property shall be used according to the following sequence: 1) realization fee; 2) compensations; 3) liquidated damages; 4) compound interests of the base credit; 5) overdue interest of the base credit; 6) interests of the base credit; 7) principal of the base credit.

10

Liability for Breach

10.1

If Party A makes the false statement and representation in Article 1, which causes the losses of Party B, Party A shall fully compensate Party B and pay the 10% of the amount of base credit as liquidated damages.

10.2

If any party fails to perform or fully perform the obligations set forth herein, such party shall take the relevant responsibilities and compensate the loss of the other party.

10.3

If this Agreement is void due to Party A’s fault, Party A shall compensate all the losses of Party B within the original security scope.

11

Settlement of Disputes

Any dispute arisen during the performance of this Agreement may be settled by friendly consultation by Party A and Party B.  If no agreement is reached, any dispute shall be filed to the People’s Court where the Party B located.

Party A (Chop): Legal Representative: Date: Party B (Chop): Legal Representative: Date:

4

EX-10.6

 

Exhibit 10.6

(English Translation)

Extension Agreement to Credit Loan Agreement for Automobile Buyer

Debtor (hereinafter “Party A”): Tianjin Golden Dragon International Travel Service Co., Ltd

Address: 2-D-510, Xinliju, Xinwenhua Garden, Fu'an Street, Heping District, Tianjin, China

Postcode:  300021

Telephone:  022-23068003

Fax:  022-23068002

Creditor (hereinafter “Party B”):

Address:

Postcode:  130011

Telephone:  800-846-8666

Fax:  0431-85900284

According to the provisions set forth in the Credit Loan Agreement for Automobile Buyer (Contract No. 23881777-4w101) ( hereinafter the “Loan Agreement”) entered by and between Party A and Party B on August 24, 2005, Party A is unable to repay the loan amount under the Loan Agreement subject to the repayment schedule and hereby applies for an extension of the loan period and Party B agrees so after internal review.  In order to specify the rights and obligations between Party A and Party B and through equal negotiation, the parties reach the following agreements on the issue of loan extension and will strictly comply:

1.

With the consent of Party B within the loan period specified in the Loan Agreement, Party A may apply for an extension of the loan period.  Party A shall apply the extension and conclude the agreement with Party B within 30 working days prior to the expiration date of the Loan Agreement, otherwise Party B is entitled to refuse.

2.

The loan amount under the Loan Agreement is RMB Eighteen Million Seven Hundred and Ninety Thousand Six Hundred (in words).  The loan period is 33 months, from August 24, 2005 to May 19, 2008.  As of January 11, 2007, the total unpaid amount of principal is RMB Ten Million Three Hundred and Eighty Three Thousand Two Hundred and Forty (in words).  Through the censor by Party B, Party B agrees to extend the loan period for an amount of RMB Ten Million Three Hundred and Eighty Three Thousand Two Hundred and Forty (in words), and the extension period is 10 months from May 19, 2008 to March 18, 2009.

3.

Upon the execution and effectiveness day of this Agreement, the interest rate will be changed from 5.28%, as specified in the Loan Agreement, to 5.94%.  The method of changing interest rate stipulated in the Loan Agreement shall still apply.

4.

The method of repayment and repayment day for each period set forth in the Loan Agreement shall still apply in the extension period.  The monthly repayment of principal and interest will be subject to the new repayment schedule made by Party B (as attached the Appendix).

5.

Security.  As a security against the loan and the extension of the loan hereunder, Party A agrees to continue the mortgage of the properties specified in the Mortgage Agreement for Automobile Credit (Contract No. 23881777-4WLDY01) ( hereinafter the “Mortgage Agreement”), entered by and between Party A and Party B on August 24, 2005.  The mortgage covers the principal under extension, interests (including compound interests and penalty interests), liquidated damages, compensations, realization fee of mortgage (including but not limited to litigation fee, property preservation fee, implementation fee, attorney fee, notice fee, assessment fee, auction fee) and other fees during the extension period.  The other rights and obligations of Party A arisen out of such mortgage, shall be performed according to the Mortgage Agreement.

6.

The other rights and obligations of Party A and Party B, which is not covered in this Agreement, shall be performed according to the Loan Agreement.

7.

Settlement of Disputes.  Any dispute, argument or controversy arisen during the performance of this Agreement shall be settled by friendly consultation and entered the supplementary agreement by Party A and Party B.  If no agreement is reached, any dispute shall be filed to the People’s Court where the Party B located.  The parties will continue to exercise their remaining respective rights and fulfill their remaining respective obligations under this Agreement, except with regard to the matters under dispute.

8.

Notarization.  This Agreement will be enforceable after the notarization.  If Party A fails to repay all the principal, interests and other fees according to the repayment schedule, or incurs other defaults, Party B has right to apply the enforceable implement with the People’s Court directly.  Party A agrees to accept the enforceable implement and waive any right of defense unconditionally.  The Article 7 hereof will not apply under this situation.

9.

The appendix hereto is an integrated part of this Agreement.  The appendix has the same legal effectiveness as this Agreement.  This Agreement, including its appendix, is an integrated part of the Loan Agreement, which has the same legal effectiveness as the Loan Agreement.  Unless otherwise provided hereunder, the provisions set forth in the Loan Agreement, Mortgage Agreement shall remain in full force and effect.

10.

Effectiveness of this Agreement.  This Agreement will become effective upon the execution day and will terminate upon the day that the principal, interests, compound interests, penalty interests, liquidated damages, compensations and other fees have been paid.

2

11.

This Agreement is made in 3 counterparts with each party holding one.  Each counterpart has the same legal effectiveness.  If the notarization is required, the additional counterpart may be added, which will have the same effectiveness.

12.

Party A’s Representation.

12.1.

Party A has gained the necessary authority and approval upon the execution of this Agreement.

12.2.

Party A has known that Party B is the legal financial institution approved by the financial administrative authority and its business scope and permissions.

12.3.

Party A has known, understood and accepted the each provision herein when it made the representation hereunder.

Party A (Chop): Legal Representative: Date: Party B (Chop): Legal Representative: Date:

3

EX-10.7

 

Exhibit 10.7

(English Translation)

Labor Contract

I.

The Parties to the Contract

Party A  (Company)	Name
	Representative
	Address
	Tel

Party B (Employee)	Name
	Home Address
	Tel
	I.D. No.

II.

Term of Contract

1.

This labor contract is fixed-term contract.  The term of this contract is from ____ to ________.

2.

This labor contract is unfixed-term contract.  The term of this contract is from ____.

3.

This labor contract is for project completion.  Both parties reach the agreements as follows:

_________________________________________________________________________.

4.

The probationary period ___ months from ____ to ________.

III.

Content and Place of the Work

5.

Party B’s position is ________, and he will complete the work duty according to the Party A’s requirements.  The work content is _____________.

6.

The work place of Party B is _____________________.

7.

The duties of Party B is _________________________.

IV.

Work Time and Vocation

8.

Party A will implement _____________ work time for Party B.

a. fixed work time;

b. hourly work time;

c. non-fixed work time.

1

9.

If Party B needs to work overtime due to production requirements, Party A shall extend the working hours as necessary and compliance with the relevant government provisions.

10.

The vocation excluding the national holidays that Party B may enjoy are as follows:

_________________________________________________________________________

V.

Employment Compensation

11.

Party A will pay the cash to Party B as the monthly salary.  The payment day of salary is ________.

12.

The salary of Party B is RMB____________ per month.

13.

The specific method of payment is as follow:

________________________________________________________________________

VI.

Employment Compensation

14.

Party A and Party B both assume their respective payment obligations according to the provisions relating to social insurance such as pension, unemployment and medical insurance required by national and local laws, policies and regulations;

15.

Party A shall withhold and pay the amount of Party B’s required benefit payment to the local social security authorities.

VII.

Employment Protection and Working Conditions

16.

Party A shall provide Party B with working environment in compliance with the nationally required safety and hygiene conditions, and ensure the physical safety of Party B and that Party B works in an environment which is not hazardous to his or her health.

17.

When Party B works for Party A, Party A shall provide Party B with any protective equipment necessary to insure Party B’s safety, depending upon the actual working conditions of Party B.

18.

Party B shall strictly comply with the labor safety rules.

19.

If Party B has occupational disease or is work-related injured or dead, Party A shall provide the relevant treatment according to the national and local regulations.

VIII.

Rescind, Termination and Renewal of the Contract

20.

Party A and Party B may rescind or terminate the labor contract according to the Labor Contract Law unilaterally.

21.

Party B shall complete the handover procedure before _________.  Party A will pay the severance and issue the certificate of termination to Party B.

IX.

Liability of Breach and Liquidated Damages

22.

If Party A provides the training for Party B, the service period and liquidated damages are as follows:

__________________________________________________________________________________________________________________________________________________

23.

If Party B is the senior officer of Party A, the confidentiality and non-competition agreement are as follows:

__________________________________________________________________________________________________________________________________________________

2

X.

Dispute Resolution

24.

When any dispute arises regarding the provisions of the contract, both parties shall settled by consultation first; if no agreement is reached, any party may apply for arbitration with the competent labor dispute settlement arbitration committee.  If any party does not accept the arbitration, a lawsuit may be filed with the competent people’s court.

XI.

Miscellaneous

25.

Any issued not covered in this contract will be implemented according to the national and local laws and regulations.

26.

Any conflicts between the contract and laws, laws shall prevail.

27.

Both parties understand the provisions herein.

28.

The Contract shall be effective upon Party B’s commencement of work for Party A.  The Contract shall be executed in two copies with Party A and Party B holding one copy each.

Corporate Seal of Party A	Signature or Seal of Party B
Date	Date

3

 

Renewal of Labor Contract

Through the negotiation between both parties, both parties agree to renew the labor contract.

1.

This labor contract is fixed-term contract.  The term of this contract is from ____ to ________.

2.

This labor contract is unfixed-term contract.  The term of this contract is from ____.

Corporate Seal of Party A	Signature or Seal of Party B
Date	Date

4

 

Change of Labor Contract

Through the negotiation between both parties, both parties agree to change the labor contract as follows:

Corporate Seal of Party A	Signature or Seal of Party B
Date	Date

5

EX-14

Exhibit 14.1

CODE OF ETHICS

OF

CHINA GOLDEN DRAGON TRAVEL GROUP

I.Objectives

Shenzhen Power International, Inc. and its subsidiaries (together, the “Company”) is committed to the highest level of ethical behavior.  The Company’s business success depends upon the reputation of the Company and its directors, officers and employees to perform with the highest level of integrity and principled business conduct.

This Code of Ethics (“Code”) applies to all directors, officers and employees of the Company, including the Company’s principal executive officer and principal financial officer, (collectively, the “Covered Persons”).  This Code is designed to deter wrongdoing and to promote all of the following:

•

honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

•

full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the “Commission”), and in other public communications made by the Company;

•

compliance with applicable governmental laws, rules and regulations;

•

the prompt internal reporting to an appropriate person or persons identified herein for receiving notice of violations or potential violations of this Code; and

•

accountability for adherence to this Code.

Current versions of the Code will be maintained on the Company’s Website and distributed periodically to all Covered Persons.  Compliance with the Code is, first and foremost, the individual responsibility of every Covered Person.

This Code is not intended to cover every applicable law, or to provide answers to all questions that might arise; for such, the Company relies on each person’s sense of what is right, including a sense of when it is appropriate to seek guidance from others on an appropriate course of conduct.

II.Honest And Ethical Conduct

Each Covered Person must always conduct himself or herself in an honest and ethical manner.  Each Covered Person must act with the highest standards of personal and professional integrity and must not tolerate others who attempt to deceive or evade responsibility for actions.  Honest and ethical conduct must be a driving force in every decision made by a Covered Person while performing his or her duties for the Company.  When in doubt as to whether an action is honest and ethical, each Covered Person shall seek advice from his or her immediate supervisor or senior management, as appropriate.

III.Conflicts Of Interest

The term “conflict of interest” refers to any circumstance that would cast doubt on a Covered Person’s ability to act objectively when representing the Company’s interest.  Covered Persons should not use their position or association with the Company for their own or their family’s personal gain, and should avoid situations in which their personal interests (or those of their family) conflict or overlap, or appear to conflict or overlap, with the Company’s best interests.

The following are examples of activities that give rise to a conflict of interest.  These examples do not in any way limit the general scope of the Company’s policy regarding conflicts of interest.

•

Where a Covered Person’s association with (or financial interest in) another person or entity would reasonably be expected to interfere with the Covered Person’s independent judgment as to the Company’s best interest, that association or financial interest creates a conflict of interest.

•

The holding of a financial interest by a Covered Person in any present or potential competitor, customer, supplier, or contractor of the Company creates a conflict of interest, except where the business or enterprise in which the Covered Person holds such financial interest is publicly owned, and the financial interest of the Covered Person in such public entity constitutes less than one percent (1%) of the ownership of that business or enterprise.

•

The acceptance by a Covered Person of a membership on the board of directors, or serving as a consultant or advisor to any board or any management, of a business that is a present or potential competitor, customer, supplier, or contractor of the Company, creates a conflict of interest, unless such relationship is pre-approved in writing by the principal executive officer of the Company.

•

Engaging in any transaction involving the Company, from which the Covered Person can benefit financially or otherwise, apart from the usual compensation received in the ordinary course of business, creates a conflict of interest.  Such transactions include lending or borrowing money, guaranteeing debts, or accepting gifts, entertainment, or favors from a present or potential competitor, customer, supplier, or contractor of the Company.

•

The use or disclosure of any unpublished information regarding the Company, obtained by a Covered Person in connection with his or her employment for personal benefit, creates a conflict of interest.

It is our policy and it is expected that all Covered Persons should endeavor to avoid all situations that present an actual or apparent conflict of interest.  All actual or apparent conflicts of interest must be handled honestly and ethically.  If a Covered Person suspects that he or she may have a conflict of interest, that Covered Person is required to report the situation to, and to seek guidance from, his or her immediate supervisor or senior management, as appropriate.  For purposes of this Code, directors, the principal executive officer, and the principal financial officer shall report any such conflict or potential conflict situations to the chairman of the audit committee, if one is created, and in the absence of an audit committee, to chairman of the board of directors.  Officers (other than the principal executive officer and principal financial officer) and employees of the Company shall report any such situations to their immediate supervisor.  It is the r esponsibility of the audit committee chairman or the chairman of the board, as applicable, to determine if a conflict of interest exists or whether such situation is likely to impair the Covered Persons ability to perform his or her assigned duties with the Company, and if such situation is determined to present a conflict, to determine the necessary resolution.

IV.Compliance With Applicable Laws, Rules And Regulations

Full compliance with the letter and the spirit of all applicable governmental laws, rules and regulations, and applicable rules and listing standards of any national securities exchange on which the Company’s securities may be listed, is one of the foundations on which this Company’s ethical policies are built.  All directors and executive officers of the Company must understand and take responsibility for the Company’s compliance with the applicable governmental laws, rules and regulations of the cities, states and countries in which the Company operates, and for complying with the applicable rules and listing standards of any national securities exchange on which the Company’s securities may be listed.

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V.Rules To Promote Full, Fair, Accurate, Timely and Understandable Disclosure

As a public Company, the Company has a responsibility to report financial information to security holders so that they are provided with accurate information in all material respects about the Company’s financial condition and results of operations.  It is the policy of the Company to fully and fairly disclose the financial condition of the Company in compliance with applicable accounting principles, laws, rules and regulations.  Further, it is the Company’s policy to promote full, fair, accurate, timely and understandable disclosure in all Company reports required to be filed with or submitted to the Commission, as required by applicable laws, rules and regulations then in effect, and in other public communications made by the Company.

Covered Persons may be called upon to provide or prepare necessary information to ensure that the Company’s public reports are complete, fair and understandable.  The Company expects Covered Persons to take this responsibility seriously and to provide accurate information related to the Company’s public disclosure requirements.

All books and records of the Company shall fully and fairly reflect all Company transactions in accordance with accounting principles generally accepted in the United States of America, and any other financial reporting or accounting regulations to which the Company is subject.  No entries to the Company’s books and records shall be made or omitted to intentionally conceal or disguise the true nature of any transaction.  Covered Persons shall maintain all Company books and records in accordance with the Company’s established disclosure controls and procedures and internal controls for financial reporting, as such controls may be amended from time to time.

The Company is committed to develop and operate a system of internal control policy over financial reporting and accounting record, to ensure all internal transactions are properly authorized and recorded, and are compliant with all applicable laws.  The internal controls include but are not limited to written policies and procedures, superior examination and monitoring, budget control and other inspection and settlement.  The Company is committed to develop and operate a system of disclosure procedures to ensure that all information is disclosed in accordance with applicable rules and regulations.

All Covered Persons must report any questionable accounting or auditing matters that may come to their attention. This applies to all reports or records prepared for internal or external purposes.  If any Covered Person has concerns or complaints regarding questionable accounting or auditing matters of the Company, Covered Person shall report such matters to his or her immediate supervisor.  If the immediate supervisor is involved in the questionable accounting or auditing matter, or does not timely resolve the Covered Person’s concern, the Covered Person should submit their concerns to the principal executive officer or the principal financial officer.  If the principal executive officer and the principal financial officer are involved in the questionable accounting or auditing matter, or do not timely resolve the Covered Person's concerns, the Covered person should submit his or her concern directly to the audit committee, if one be established, or to the board of directo rs in the absence of a designated audit committee.  The reporting of any such matters may be done on a confidential basis, at the election of the Covered Person making the report.

VI. Competition and Fair Dealing

The Company seeks to outperform its competitors fairly and honestly.  The Company does not seek competitive advantages through illegal or unethical business practices.  Each Covered Person shall endeavor to deal fairly with the Company’s customers, service providers, suppliers, competitors and employees.  No Covered Person shall take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any unfair dealing practice.

-3-

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers.  No gift or entertainment should ever be offered, given, provided or accepted by any Company employee, family member of an employee or agent unless it: (i) is not a cash gift, (ii) is consistent with customary business practices, (iii) is not excessive in value, (iv) cannot be construed as a bribe or payoff, and (v) does not violate any laws or regulations.  Please discuss with the Company’s Human Resource Manager any gifts which you are not certain are appropriate.

VII.Corporate Opportunities

Covered Persons are prohibited from taking for themselves opportunities that are discovered through the use of Company property, information or position, or using Company property, information or position for personal gain.  Covered Persons have a duty to the Company to advance its legitimate interest when the opportunity to do so arises.

VIII.Confidentiality

Covered Persons must maintain the confidentiality of non-public, proprietary information regarding the Company, its customers or its suppliers, and shall use that information only to further the business interests of the Company, except where disclosure or other use is authorized by the Company or legally mandated.  This includes information disseminated to employees in an effort to keep them informed or in connection with their work activities, but with the instruction, confidential labeling, or reasonable expectation that the information be kept confidential.

IX.Trading on Inside Information

Inside information includes any non-public information, whether favorable or unfavorable, that investors generally consider important in making investment decisions.  Examples include financial results not yet released, imminent regulatory approval/disapproval of an alliance or other significant matter such as the purchase or sale of a business unit or significant assets, threatened litigation, or other significant facts about a business.  No information obtained as the result of employment at, or a director’s service on the Board of, the Company may be used for personal profit or as the basis for a “tip” to others, unless such information has previously been made generally available to the public, and even in such circumstances, such information may be subject to other duties.

X.Protection and Proper Use of Company Assets

Covered Persons should protect the Company’s assets and ensure their efficient use.  Theft, carelessness and waste have an adverse impact on the Company and its profitability.  Company assets may only be used for legitimate Company business purposes.

XI. Foreign Corrupt Practices Act (“FCPA”)

The FCPA prohibits the making of a payment and/or the offering of anything of value to any foreign government official, government agency, political party or political candidate in exchange for a business favor or when otherwise intended to influence the action taken by any such individual or agency or to gain any competitive or improper business advantage.  Prohibitions of the FCPA apply to actions taken by all Covered Persons and by all outside parties engaged directly or indirectly by the Company (e.g., consultants, professional advisers, etc.).  Given the complexity of the FCPA and the severe penalties associated with its violation, all Covered Persons are urged to contact the Company’s Human Resource Manager at any time with any questions concerning the Company’s and their obligations under and in compliance with the FCPA.

-4-

XII.  Fair treatment

The Company is firmly committed to providing equal opportunity to all employees and will not tolerate any illegal discrimination or harassment based on nationality, national origin, sex, religion or any other protected class, avoid any discrimination or harassment for psychological or physiological defect.

The Company strives to provide each employee with a safe and healthy work environment. Regardless of the status of the employee, the Company prohibits any sexual harassment to employees of opposite sex through body or language.  Violence and threatening behavior are not permitted.

XIII.Compliance with the Code; Discipline

Violation of this Code may result in serious consequences for the Company, its corporate reputation and credibility and the confidence level of its customers and investors.  Sanctions against the Company for criminal or civil wrongdoing could include substantial fines and restrictions on future operations.  Individual employees could be required to pay significant fines or be sentenced to prison. Therefore, violations will be taken seriously.

Company-imposed disciplinary action will be coordinated with the employee’s supervisor, the human resources department and the Company’s Human Resource Manager. The overall seriousness of the matter will be considered in determining disciplinary action to be taken: which might include consequences up to and including dismissal.  Individual cases may require an employee to reimburse the Company for losses or damages.  The Company may even refer an employee for criminal prosecution, civil enforcement or a combination of the above.

Disciplinary action may also be taken against Covered Persons who condone, permit or have knowledge of illegal or unethical conduct by subordinates and do not take corrective action, and against Covered Persons who make false statements in connection with investigations of violations of this Code.  

All Covered Persons will be held to the standards in this Code. Violating the Code, even if directed to do so by management is not justifiable.  If a manager solicits actions in violation of this Code, the Covered Person should contact the Company’s Human Resource Manager.

XIV. Reporting and Compliance procedure

Every Covered Person has the responsibility to ask questions, seek guidance, report suspected violations and express concerns regarding compliance with this Code.  The Company’s Human Resource Manager can be reached for explanation, clarification, and guidance of this Code at 86-22-2306-8001 (telephone) or his office.  Any employee, officer or director who knows or believes that any other employee or representative of the Company has engaged or is engaging in Company-related conduct that violates applicable law or this Code should report such information to the Human Resource Manager.  Covered Persons may report such conduct openly or anonymously without fear of retaliation. The Company will not discipline, discriminate against or retaliate against any employee who reports such conduct, unless it is determined that the report was made with knowledge that it was false, or who cooperates in any investigation or inquiry regarding such conduct.  Any supervisor who receives a report of a violation of this Code must immediately inform the Human Resource Manager.

Covered Persons may report violations of this Code on a confidential or anonymous basis, while the Company encourages reporting person to identify himself or herself when reporting violations so that the Company may follow up with the reporting person, as necessary, for additional information. Covered Person may report to the Human Resource Manager through any of the following means:

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By post:

5F Wan Zhao Kemao Building, Fu’an Street

Heping District, Tianjin

People’s Republic of China 300021

Telephone: 86-22-2306-8001

Facsimile: 86-10-6505-0868

(You can leave a recorded message without identifying yourself)

If the Human Resource Manager receives information regarding an alleged violation of this Code, he or she shall, in consultation with outside counsel, as appropriate, (a) evaluate such information, (b) if the alleged violation involves an executive officer or a director, inform the chief executive officers and Board of Directors of the alleged violation, (c) determine whether it is necessary to conduct an informal inquiry or a formal investigation and, if so, initiate such inquiry or investigation and (d) report the results of any such inquiry or investigation, together with a recommendation as to disposition of the matter, to the chief executive officers for action, or if the alleged violation involves an executive officer or a director, report the results of any such inquiry or investigation to the Board of Directors or a committee thereof.  Covered Persons are expected to cooperate fully with any inquiry or investigation by the Company regarding an alleged violation of this Code.

Failure to cooperate with any such inquiry or investigation may result in disciplinary action, up to and including discharge.

The Company shall determine whether violations of this Code have occurred and, if so, shall determine the disciplinary measures to be taken against any employee who has violated this Code.  In the event that the alleged violation involves an executive officer or a director, the chief executive officers and the Board of Directors, respectively, shall determine whether a violation of this Code has occurred and, if so, shall determine the disciplinary measures to be taken against such executive officer or director.

Failure to comply with the standards outlined in this Code will result in disciplinary action including, but not limited to, reprimands, warnings, probation or suspension without pay, demotions, reductions in salary, discharge and restitution. Certain violations of this Code may require the Company to refer the matter to the appropriate governmental or regulatory authorities for investigation or prosecution.  Moreover, any supervisor who directs or approves of any conduct in violation of this Code, or who has knowledge of such conduct and does not immediately report it, also will be subject to disciplinary action, up to and including discharge.

XV.Waiver of the Code

While some of the policies contained in this Code must be strictly adhered to and no exceptions can be allowed, in other cases exceptions may be possible.  Any request for a waiver of any provision of this Code must be in writing and addressed to the Board or the Audit Committee (if one be established), if made by an executive officer or a director, or the Chief Executive Officer of the Company, if made by an employee.

Any waiver of this Code may be made only by the independent directors on the board of directors, or by an authorized committee of the board of directors comprised solely of independent directors, and will be disclosed as required by law, Commission regulations, or the rules and listing standards of any national securities exchange on which the Company’s securities may be listed.

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Any waiver of this Code with respect to an officer or director must be approved by the Board or the Audit Committee, after consultation with the Company’s corporate or outside counsel, and will be disclosed as required by law, Commission regulations, or the rules and listing standards of any national securities exchange on which the Company’s securities may be listed.

XVI. Dissemination and Amendment

This Code shall be distributed to each employee, officer and director of the Company upon commencement of his or her employment or other relationship with the Company.  The Company reserves the right to amend, alter or terminate this Code at any time for any reason.

Adopted by the Board of Directors effective as of January 14, 2009.

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EX-21

 

Exhibit 21

Subsidiaries of China Golden Dragon Travel Group

Name of Subsidiary	Jurisdiction of Organization	% Owned
Touchstone Industry Group Limited	BVI	100%
Wellcare International Limited	Hong Kong	100%
Beijing Rong ChuanRui Travel Consulting Co., Ltd.	PRC	100%
Nanjing Qianjiu Enterprise Management and Consulting Co., Ltd.	PRC	100%
Tianjin Longhai Longjia Enterprise Management and Consulting Co., Ltd.	PRC	100%
Tianjin Golden Dragon Sky Travel Co., Ltd.	PRC	100%
Tianjin Golden Dragon Int’l Travel Service Co., Ltd.	PRC	100%
Nanjing Feiyu Travel Service Co., Ltd.	PRC	100%

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this General Form for Registration of Securities on Form 10 of our report dated November 19, 2008, relating to the combined balance sheets of Tianjin Golden Dragon International Travel Service Co., Ltd, Tianjin Golden Dragon Sky Travel Service Co., Ltd and Nanjing Feiyu Travel Service Co., Ltd as of December 31, 2007 and 2006 and the related combined statements of operations and comprehensive income, changes in members’ equity, and cash flows for each of the years then ended.

/s/Bernstein & Pinchuk LLP

New York, New York
January 21, 2009